UNITED STATES


SECURITIES AND EXCHANGE COMMISSION


Washington, D.C.  20549








FORM 10-Q





(Mark One)





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





FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2010





OR





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





FOR THE TRANSITION FROM _______ TO ________.





COMMISSION FILE NUMBER: 333-146441









A&J VENTURE CAPITAL GROUP INC.


(Exact Name of Small Business Issuer as Specified in its Charter)




Nevada
75-3260541(State or other jurisdiction of incorporation or organization)
(I.R.S. Employer ID No.)23890 Copper Hill Drive #206, Valencia CA
91354(Address of principal executive offices)
(Zip code)




Issuer's telephone number: (661) 414-7125





N/A


(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 oYes x No o





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





As of October 27, 2010, 32,897,500 shares of the Registrant's Common Stock were issued and outstanding.





Transitional Small Business Disclosure Format: Yes oNo x


1


A&J VENTURE CAPITAL GROUP, INC.





TABLE OF CONTENTS





Page No.PART I
FINANCIAL INFORMATIONITEM 1
Condensed Financial StatementsCondensed Balance Sheets as of September 30, 2010 (unaudited) and June 30, 2010
3Unaudited Condensed Statements of Operations for the three months ended September 30, 2010 and 2009, cumulative during development stage from February 22, 2007 (inception) through September 30, 2010
4Unaudited Condensed Statements of Cash Flows for the three months ended September 30, 2010 and 2009, and cumulative during development stage from February 22, 2007 (inception) through September 30, 2010
5Notes to Condensed Financial Statements (unaudited)
6ITEM 2
Management’s Discussion and Analysis of Financial Condition and Results of Operations
9ITEM 3
Quantitative and Qualitative Disclosures about Market Risk
12ITEM 4T
Controls and Procedures
13PART II
OTHER INFORMATIONITEM 2
Unregistered Sales of Equity Securities and Use of Proceeds
14ITEM 6
Exhibits
14SIGNATURE

14














2








A & J VENTURE CAPITAL GROUP, INC.(Formerly known as Alco Energy Corp.)(A DEVELOPMENT STAGE ENTERPRISE)CONDENSED BALANCE SHEETSSeptember 30,


June 30,2010


2010(unaudited)ASSETSCURRENT ASSETSCash

$
288


$
19,602Prepaid expenses


-



7,500Deferred Expenses


15,215



20,215TOTAL CURRENT ASSETS


15,503



47,317Total Assets

$
15,503


$
47,317LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)CURRENT LIABILITIESAccounts payable

$
2,961


$
4,214Accounts payable - Related party


-



3,000Shareholder advances


-



94,775TOTAL CURRENT LIABILITIES


2,961



101,989COMMITMENTS AND CONTINGENCIESSTOCKHOLDERS' EQUITY (DEFICIT)Preferred stock, par value $.0001, 10,000,000shares authorized, 10,000 issued and outstanding - 2010,none issued and outstanding - 2011


-



1Common stock, par value $.0001, 100,000,000shares authorized, 18,077,500 issued and outstanding - 201032,897,500 issued and outstanding - 2011


3,290



1,808Paid in Capital


325,233



201,402(Deficit) accumulated during the development stage


(315,980
)


(257,883
)Total Stockholders' Equity (Deficit)


12,542



(54,672
)Total Liabilities and Stockholders' Equity (Deficit)

$
15,503


$
47,317











The accompanying notes are an integral part of the financial statements





3





A & J VENTURE CAPITAL GROUP, INC.(Formerly known as Alco Energy Corp.)(A DEVELOPMENT STAGE ENTERPRISE)CONDENSED STATEMENTS OF OPERATIONS(unaudited)CumulativefromFebruary 22, 2007For the three months ended


(Inception)September 30,


to2010


2009


September 30, 2010REVENUES

$
-


$
-


$
-EXPENSESAmortization


5,000



4,785



24,785Accounting, Audit, and Legal fees


18,528



1,710



73,759Consulting Fees


30,000



4,500



150,500Rent expense


1,723



2,855



21,067General and administrative


2,847



(1,457
)


45,366Total expenses


58,097



12,393



315,476Interest Expense


-



-



504NET (LOSS)

$
(58,097
)

$
(12,393
)

$
(315,980
)OTHER COMPREHENSIVE INCOMEForeign exchange gain on translation


-



-COMPREHENSIVE INCOME (LOSS)

$
(58,097
)

$
(12,393
)NET (LOSS) PER SHARE - BASIC

$
(0.01
)

$
(0.04
)WEIGHTED AVERAGE NUMBER OFCOMMON SHARES OUTSTANDING


23,017,500



315,000*  less than $(.01) per share














The accompanying notes are an integral part of the financial statements








4






A & J VENTURE CAPITAL GROUP, INC.(Formerly known as Alco Energy Corp.)(A DEVELOPMENT STAGE ENTERPRISE)CONDENSED STATEMENTS OF CASH FLOWS(unaudited)CumulativefromFebruary 22, 2007For the three months ended


(Inception)September 30,


to2010


2009


September 30, 2010OPERATING ACTIVITIESNet (loss)

$
(58,097
)

$
(12,393
)

$
(315,980
)Adjustments to reconcile net income (loss) to net cash used byoperating activitiesStock issued for services


30,000



-



127,500Depreciation and amortization


5,000



4,785



24,834Contributed capital


-



-



-Changes in operating assets and liabilitiesAccounts payable


(1,254
)


3,987



1,157Accounts payable - Related party


(2,463
)


3,550



3,244Prepaid expenses


7,500



-



-Deferred Charges


-



(40,000
)


(40,000
)NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES


(19,314
)


(40,072
)


(199,245
)INVESTING ACTIVITIESPurchase of property and equipment


-



-



(1,622
)NET CASH PROVIDED BY INVESTING ACTIVITIES


-



-



(1,622
)FINANCING ACTIVITIESProceeds from sale of common stock


-



-



70,693Proceeds from shareholder loan payable


-



84,126



130,461NET CASH PROVIDED BY FINANCING ACTIVITIES


-



84,126



201,154NET INCREASE (DECREASE) IN CASH


(19,314
)


44,055



288CASH, BEGINNING OF PERIOD


19,602



-



-CASH, END OF PERIOD

$
288


$
44,055


$
288SUPPLEMENTAL SCHEDULE OF NON-CASH INVESTING AND FINANCING ACTIVITIESShareholder advances on behalf of company

$
95,312






$
131,903Property and equipment net of depreciation exchanged for debt


-







(1,573
)Account payable - related party contributed to capital


(537
)






(537
)Shareholder's debt contributed to capital


(94,775
)






(129,793
)$
-






$
-











The accompanying notes are an integral part of the financial statements











5
 
 A & J VENTURE CAPITAL GROUP, INC.
 (FORMERLY ALCO ENERGY CORP.)
 (A Development Stage Enterprise)
 NOTES TO CONDENSED INTERIM FINANCIAL STATEMENTS
 For the three months ended September 30, 2010 and 2009
 (Unaudited)





NOTE 1 - BASIS OF PRESENTATION





In the opinion of management, the accompanying unaudited condensed financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q.  Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation of the Company’s financial position as of September 30, 2010 and the results of its operations and cash flows for the three months ended September 30, 2010 and 2009 have been made.  Operating results for the three months ended September 30, 2010 are not necessarily indicative of the results that may be expected for the year ended June 30, 2011.





These condensed financial statements should be read in conjunction with the financial statements and notes for the years ended June 30, 2010, thereto contained in the Company’s Form 10-K.








NOTE 2 – GOING CONCERN





Our financial statements have been presented on the basis that we are a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business.  We have sustained operating losses since inception.





As of September 30, 2010 we have a working capital surplus of $12,542, and accumulated deficit of $315,980. During the period ending September 30, 2010 we had a net loss of $58,097 and cash used in operating activities of $19,314. The Company’s ability to continue in existence is dependent on its ability to develop additional sources of capital, and/or achieve profitable operations and positive cash flows. Management’s plan is to aggressively pursue its present business plan. Since inception we have funded our operations through the issuance of common stock and related party loans and advances, and will seek additional debt or equity financing as required. The accompanying financial statements do not include any adjustments that might result from the outcome of this uncertainty.








NOTE 3 – RECENTLY ISSUED ACCOUNTING STANDARDS





Below is a listing of the most recent accounting standards and their effect on the Company.




In August 2009, the FASB issued Accounting Standards Update 2009-05, "Fair Value Measurements and Disclosures (Topic 820) - Measuring Liabilities at Fair Value". This update includes amendments to Subtopic 820-10 "Fair Value Measurements and Disclosures - Overall" for the fair value measurements of liabilities and provides clarification that in circumstances in which quoted price in an active market for the identical liability is not available, a reporting entity is required to measure fair value using one or more of the techniques provided for in this update.  This Statement is effective for fiscal years, and interim periods within those fiscal years, beginning on or after August 26, 2009.  The application of this update did not have a material impact on the Company’s results of operations or financial position.





In September 2009, the FASB issued Accounting Standards Update 2009-08, "Earnings Per Share-Amendments to Section 260-10-S99".  This update includes technical corrections to Topic 260-10-S99, "Earnings Per Share", based on EITF Topic D-53, "Computation of Earnings Per Share for a Period that Includes a Redemption or an Induced Conversion of a Portion of a Class of Preferred Stock" and EITF Topic D-42,  "The Effect of the Calculation of Earnings Per Share for the Redemption or Induced Conversion of Preferred  Stock".  The application of this update did not have an impact on the Company’s results of operations, therefore not requiring additional earnings per share computation.









6
 
 A & J VENTURE CAPITAL GROUP, INC.
 (FORMERLY ALCO ENERGY CORP.)
 (A Development Stage Enterprise)
 NOTES TO CONDENSED INTERIM FINANCIAL STATEMENTS
 For the three months ended September 30, 2010 and 2009
 (Unaudited)




NOTE 3 – RECENTLY ISSUED ACCOUNTING STANDARDS - continued
  In January 2010, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2010-6, “Improving Disclosures about Fair Value Measurements.” This update requires additional disclosure within the roll forward of activity for assets and liabilities measured at fair value on a recurring basis, including transfers of assets and liabilities between Level 1 and Level 2 of the fair value hierarchy and the separate presentation of purchases, sales, issuances and settlements of assets and liabilities within Level 3 of the fair value hierarchy. In addition, the update requires enhanced disclosures of the valuation techniques and inputs used in the fair value measurements within Levels 2 and 3. The new disclosure requirements are effective for interim and annual periods beginning after December 15, 2009, except for the disclosure of purchases, sales, issuances and settlements of Level 3 measurements. Those disclosures are effective for fiscal years beginning after December 15, 2010. As ASU 2010-6 only requires enhanced disclosures, the Company does not expect that the adoption of this update will have a material effect on its financial statements.





In February 2010, the FASB issued Accounting Standards Update 2010-09, "Subsequent Events: Amendments to Certain Recognition and Disclosure Requirements."  This FASB retracts the requirement to disclose the date through which subsequent events have been evaluated and whether that date is the date the financial statements were issued or were available to be issued. ASU 2010-09 is effective for interim and annual financial periods ending after February 24, 2010, and has been applied with no material impact on the Company’s financial statements.





In February 2010, the FASB issued Accounting Standards Update 2010-08, "Technical Corrections to Various Topics." This FASB eliminates inconsistencies and outdated provisions in GAAP and provides needed clarification on others. ASU 2010-08 is  effective  for interim and annual  financial  periods  ending  after February  2010,  and has been applied with no material  impact on the  Company's financial statements.





In August 2010, the FASB issued Accounting Standards Update 2010-21, "Accounting for Technical Amendments to Various SEC Rules and Schedules".  This Accounting Standards Update amends various SEC paragraphs pursuant to the issuance of Release No. 33-9026; Technical Amendments to Rules, Forms, Schedules and Codifications of Financial Reporting Policies.  Management does not expect this update to have a material effect on the Company's financial statements.








NOTE 4 – RELATED PARTY TRANSACTIONS AND BALANCES





Resignation and appointment of officers and directors





On August 18, 2010, our President, Chief Financial Officer, and Director resigned. Prior to his resignation, he appointed a replacement Director to serve as our Board of directors, and our sole officer until further members and officers are elected. On September 30, 2010, we issued 7,500,000 shares of our restricted common stock to our new officer and director for agreeing to serve our Company in that capacity, valued at $.002 per share for a total expense of $15,000 which is reflected in consulting fees.





Related party transactions





For the periods ending September 30, 2010 and 2009, we accrued $-0- and $4,500, respectively, for consulting fees for our previous President. For the periods ending September 30, 2010 and 2009, we also paid $1,723 and $2,855, respectively, rent for our office space in Heidelberg, Germany, to the same officer.






7
 
 A & J VENTURE CAPITAL GROUP, INC.
 (FORMERLY ALCO ENERGY CORP.)
 (A Development Stage Enterprise)
 NOTES TO CONDENSED INTERIM FINANCIAL STATEMENTS
 For the three months ended September 30, 2010 and 2009
 (Unaudited)





NOTE 4 – RELATED PARTY TRANSACTIONS AND BALANCES - continued
  Related party transactions - continued
  As of September 30, 2010 and 2009, we owed our previous President $-0- and $6,000 in accounts payable – related party, and $-0- and $84,815 in shareholder advances. As a result of the below letter of intent our former President closed our bank account in Germany, and retained the balance as payment towards his consulting fees balance owed of $3,000, the payment made to him against this balance was $2,463, leaving a balance of $537 which was contributed to capital.





For the period ended September 30, 2010, we incurred consulting fees for our current President in the amount of $5,000 per month for a total of $15,000 in consulting expense. On September 30, 2010, we issued 7,500,000 shares of restricted common stock as payment, valued at a share price of $.002.





Binding letter of intent





On September 18, 2010 we entered in a binding letter of agreement with our former President to let him retain the active business contacts, contracts and assets of the Company’s present business plan in exchange for his returning 10,000 shares of series “A” preferred stock he was issued in January 2010 for cancellation and 180,000 shares of common stock for cancellation. As part of this agreement, our previous President contributed outstanding debt owed to him of $95,312 including advances of $94,775 and $537 in accounts payable – related party.








NOTE 5 – STOCKHOLDER’S EQUITY





Reverse stock split





As previously discussed, as of this filing we are awaiting approval of the reverse split of our common stock in the ratio of 1 share for 100 shares, this will be executed as soon as approval is granted. The effect of this transaction has been shown on the accompanying financials.








NOTE 6 – SUBSEQUENT EVENTS





The Company evaluated its financial statements for subsequent events through the date the financial statements were issued. The Company found the below subsequent events which would require recognition or disclosure in the financial statements.





Shareholder advances





In October 2010, our current President paid operating bills totaling $3,218. These payments are recorded as a shareholder’s advance.





8





ITEM 2 - Management’s Discussion and Analysis of Financial Condition and Results of Operations





You should read this section in conjunction with our financial statements and the related notes included in this Form 10-Q.  Some of the information contained in this section or set forth elsewhere in this Form 10-Q, including information with respect to our plans and strategies for our business, statements regarding the industry outlook, our expectations regarding the future performance of our business, and the other non-historical statements contained herein are forward-looking statements.




FORWARD-LOOKING STATEMENT NOTICE


This Form 10-Q contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.  For this purpose any statements contained in this Form 10-Q that are not statements of historical fact may be deemed to be forward-looking statements.  Without limiting the foregoing, words such as “may,” “will,” “expect,” “believe,” “anticipate,” “estimate” or “continue” or comparable terminology are intended to identify forward-looking statements.  These statements by their nature involve substantial risks and uncertainties, and actual results may differ materially depending on a variety of factors, many of which are not within our control.  These factors include but are not limited to economic conditions generally and in the industries in which we may participate; competition within our chosen industry, including competition from much larger competitors; technological advances and failure to successfully develop business relationships.
  
 Description of Business.
 
 A & J Venture Capital Group, Inc. was incorporated in the State of Nevada on February 22, 2007. The Company has now focused its efforts on seeking a business opportunity.  The Company will attempt to locate and negotiate with a business entity for the merger of that target company into the Company. In certain instances, a target company may wish to become a subsidiary of the Company or may wish to contribute assets to the Company rather than merge. No assurances can be given that the Company will be successful in locating or negotiating with any target company. The Company will provide a method for a foreign or domestic private company to become a reporting (“public”) company whose securities are qualified for trading in the United States secondary market.
 
 The Company intends to seek, investigate, and if warranted, acquire an interest in a business opportunity.  We are not restricting our search to any particular industry or geographical area.  We may therefore engage in essentially any business in any industry.  Our management has unrestricted discretion in seeking and participating in a business opportunity, subject to the availability of such opportunities, economic conditions and other factors.
 
 The selection of a business opportunity in which to participate is complex and extremely risky and will be made by management in the exercise of its business judgment.  There is no assurance that we will be able to identify and acquire any business opportunity which will ultimately prove to be beneficial to our company and shareholders.
 
 Because we have no specific business plan or expertise, our activities are subject to several significant risks.  In particular, any business acquisition or participation we pursue will likely be based on the decision of management without the consent, vote, or approval of our shareholders.
 
 On October 6, 2010, the Board of Directors approved a non-binding Letter Agreement for acquisition by the Company of certain assets and an option to acquire another company.  That Letter Agreement contains certain actions which must be taken by the Company as conditions precedent for the Closing of these potential acquisition transactions, including specifically amendments to the Articles of Incorporation.  There can be no assurance that this transaction will close.
 
 
 Sources of Opportunities
 
 We anticipate that business opportunities may arise from various sources, including officers and directors, professional advisers, securities broker-dealers, venture capitalists, members of the financial community, and others who may present unsolicited proposals.
 
 We will seek potential business opportunities from all known sources, but will rely principally on the personal contacts of our officers and directors as well as indirect associations between them and other business and professional people.  Although we do not anticipate engaging professional firms specializing in business acquisitions or reorganizations, we may retain such firms if management deems it in our best interests.  In some instances, we may publish notices or advertisements seeking a potential business opportunity in financial or trade publications.
  
 Criteria
 
 We will not restrict our search to any particular business, industry or geographical location.  We may acquire a business opportunity in any stage of development.  This includes opportunities involving “start up” or new companies.  In seeking a business venture, management will base their decisions on the business objective of seeking long-term capital appreciation in the real value of our company.  We will not be controlled by an attempt to take advantage of an anticipated or perceived appeal of a specific industry, management group, or product.
   9
  ITEM 2 - Management’s Discussion and Analysis of Financial Condition and Results of Operations - continued
  Criteria - continued
  In analyzing prospective business opportunities, management will consider the following factors:
 
 ·available technical, financial and managerial resources;
 ·working capital and other financial requirements;
 ·the history of operations, if any;
 ·prospects for the future;
 ·the nature of present and expected competition;
 ·the quality and experience of management services which may be available and the depth of the management;
 ·the potential for further research, development or exploration;
 ·the potential for growth and expansion;
 ·the potential for profit;
 ·the perceived public recognition or acceptance of products, services, trade or service marks, name identification; and other relevant factors.
 
 Generally, our management will analyze all available factors and make a determination based upon a composite of available facts, without relying on any single factor.
 
 
 Methods of Participation of Acquisition
 
 Management will review specific business and then select the most suitable opportunities based on legal structure or method of participation.  Such structures and methods may include, but are not limited to, leases, purchase and sale agreements, licenses, joint ventures, other contractual arrangements, and may involve a reorganization, merger or consolidation transactions.  Management may act directly or indirectly through an interest in a partnership, corporation, or other form of organization.
 
 
 Procedures
 
 As part of the our investigation of business opportunities, officers and directors may meet personally with management and key personnel of the firm sponsoring the business opportunity.  We may visit and inspect material facilities, obtain independent analysis or verification of certain information provided, check references of management and key personnel, and conduct other reasonable measures.
 
 We will generally ask to be provided with written materials regarding the business opportunity.  These materials may include the following:
 
 ·descriptions of product, service and company history; management resumes;
 ·financial information;
 ·available projections with related assumptions upon which they are based;
 ·an explanation of proprietary products and services;
 ·evidence of existing patents, trademarks or service marks or rights thereto;
 ·present and proposed forms of compensation to management;
 ·a description of transactions between the prospective entity and its affiliates;
 ·relevant analysis of risks and competitive conditions;
 ·a financial plan of operation and estimated capital requirements;
 ·and other information deemed relevant.
 
 
 Competition
 
 We expect to encounter substantial competition in our efforts to acquire a business opportunity.  The primary competition is from other companies organized and funded for similar purposes, small venture capital partnerships and corporations, small business investment companies and wealthy individuals.
   10
  ITEM 2 - Management’s Discussion and Analysis of Financial Condition and Results of Operations - continued
  Employees
 
 We do not currently have any employees but rely upon the efforts of our officer and director to conduct our business.  We do not have any employment or compensation agreements in place with our officers and directors although they are reimbursed for expenditures advanced on our behalf.
 
 
 Plan of Operation
 
 The Company is seeking to acquire assets or shares of an entity actively engaged in business which generates revenues. The Company has identified a particular acquisition and on October 6, 2010, the Board of Directors approved a non-binding Letter Agreement for acquisition by the Company of certain assets and an option to acquire another company.  That Letter Agreement contains certain actions which must be taken by the Company as conditions precedent for the Closing of these potential acquisition transactions, including specifically amendments to the Articles of Incorporation.  There can be no assurance that this transaction will close.
 
 The Company’s current operating plan is to pursue the above acquisition and to continue searching for potential businesses, products, technologies and companies for acquisition and to handle the administrative and reporting requirements of a public company.  To demonstrate our commitment to maintaining ethical reporting and business practices, we adopted a Code of Ethics and Business Conduct.
 
 The Company has, and will continue to have, no capital with which to provide the owners of business opportunities with any significant cash or other assets. However, management believes the Company will be able to offer owners of acquisition candidates the opportunity to acquire a controlling ownership interest in a publicly registered company without incurring the cost and time required to conduct an initial public offering. The owners of the acquisition candidate will, however, incur significant legal and accounting costs in connection with the acquisition of a business opportunity, including the costs of preparing Form 8-K’s, 10-K’s, 10-Q’s, agreements and related reports and documents.
   Results of Operations for the Three Months Ended September 30, 2010 and the Three Months Ended September 30, 2009





We did not earn any revenues for the period ended September 30, 2010 and 2009.





As of September 30, 2010, we had total assets of $15,503 and total liabilities of $2,961 compared to total assets of $47,317 and total liabilities of $101,989 as of June 30, 2010.





During the three months ended September 30, 2010, we incurred operating expenses in the amount of $58,097. These operating expenses were comprised of accounting and audit fees, general and management expenses, and transfer agent fees, compared to operating expenses of $12,393 for the three months ended September 30, 2009.




For the three months ended September 30, 2010, we paid rent expense of $1,723 to our former president.  For the three month period ending September 30, 2009, we paid $4,500 for consulting fees to our former president. We also paid $2,855 rent for our office space in Heidelberg, Germany, to the same officer.





Beginning June 1, 2009, we leased the above office space from our former President under a non-cancelable operating lease; previous to this we leased office space on a month to month basis.  Rent expense was $1,723 for the three months ended September 30, 2010 compared to $2,855 for the three month period ended September 30, 2009.




We have not generated any revenue since inception and are dependent upon obtaining financing to pursue marketing and distribution activities. For these reasons, our auditors believe that there is substantial doubt that we will be able to continue as a going concern.





Liquidity and Capital Resources




As of September 30, 2010 the Company had a cash balance of $288, and as of June 30, 2010, the Company had a cash balance of $19,602.




Through June 30, 2009, we had sold $42,000 in equity securities to pay for our business operations. We sold 135,000 shares of common stock to 30 unaffiliated shareholders on August 23, 2007 for total proceeds of $36,000 pursuant to Regulation S of the Securities Act.  We subsequently filed a Registration Statement on the Form SB-2 for this offering on October 2, 2007 and became effective on October 12, 2007. We have used these funds as working capital for administrative expenses and professional fee payments to third parties.  Also, we sold 180,000 shares of common stock to our officer and directors on June 29, 2007 and August 6, 2007 for total proceeds of $36,000 pursuant to Regulation S of the Securities Act.





If the Company is not successful in generating sufficient liquidity from operations or in raising sufficient capital resources, on terms acceptable to it, this could have a material adverse effect on its business, results of operations liquidity and financial condition.






11




ITEM 2 - Management’s Discussion and Analysis of Financial Condition and Results of Operations - continued
  Liquidity and Capital Resources - continued
  The Company presently does not have any available credit, bank financing or other external sources of liquidity, other than the net proceeds from the Offering. Due to its brief history and historical operating losses, the Company’s operations have not been a source of liquidity. The Company will need to obtain additional capital in order to expand operations and become profitable. In order to obtain capital, the Company may need to sell additional shares of its common stock or borrow funds from private lenders. There can be no assurance that the Company will be successful in obtaining additional funding.




The Company will need additional investments in order to continue operations. Additional investments are being sought, but the Company cannot guarantee that it will be able to obtain such investments. Financing transactions may include the issuance of equity or debt securities, obtaining credit facilities, or other financing mechanisms. However, the trading price of the Company’s common stock and a downturn in the U.S. stock and debt markets could make it more difficult to obtain financing through the issuance of equity or debt securities. Even if the Company is able to raise the funds required, it is possible that it could incur unexpected costs and expenses, fail to collect significant amounts owed to it, or experience unexpected cash requirements that would force it to seek alternative financing. Further, if the Company issues additional equity or debt securities, stockholders may experience additional dilution or the new equity securities may have rights, preferences or privileges senior to those of existing holders of the Company’s common stock. If additional financing is not available or is not available on acceptable terms, the Company will have to curtail its operations.






Critical Accounting Policies




Our financial statements are prepared in accordance with accounting principles generally accepted in the United States of America. Preparing financial statements in accordance with generally accepted accounting principles requires management to make estimates and assumptions which affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the balance sheet dates, and the recognition of revenues and expenses for the reporting periods. These estimates and assumptions are affected by management's application of accounting policies.




Contractual Obligations





Beginning June 1, 2009, we leased office space from our former President under a non-cancelable operating lease at 670 Euros per month (approximately $960 per month) for 12 months.  The rent expense for the three months ended September 30, 2010 was $1,723.








Off-Balance Sheet Commitments and Arrangements




We have not entered into any financial guarantees or other commitments to guarantee the payment obligations of any third parties. In addition, we have not entered into any derivative contracts that are indexed to our own shares and classified as shareholder’s equity, or that are not reflected in our consolidated financial statements. Furthermore, we do not have any retained or contingent interest in assets transferred to an unconsolidated entity that serves as credit, liquidity or market risk support to such entity. Moreover, we do not have any variable interest in any unconsolidated entity that provides financing, liquidity, market risk or credit support to us or engages in leasing, hedging or research and development services with us.








Inflation





Inflation has not materially impacted our results of operations in recent years.








ITEM 3 - Quantitative and Qualitative Disclosures about Market Risk





As a “smaller reporting company” (as defined by Item 10 of Regulation S-K), the Company is not required to provide information required by this Item, as defined by Regulation S-K Item 305(e).








12




ITEM 4T - Controls and Procedures




Disclosure controls and procedures




As required by Rule 13a-15 under the Securities Exchange Act of 1934, as of the end of the period covered by this quarterly report, being September 30, 2010, we have carried out an evaluation of the effectiveness of the design and operation of our company’s disclosure controls and procedures. This evaluation was carried out under the supervision and with the participation of our management, including our Chief Executive Officer. Based upon that evaluation, our Chief Executive Officer concluded that our disclosure controls and procedures are effective as at the end of the period covered by this report. There have been no significant changes in our internal controls over financial reporting that occurred during our most recent fiscal quarter ended September 30, 2010 that have materially affected, or are reasonably likely to materially affect our internal controls over financial reporting.




Disclosure controls and procedures and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported, within the time period specified in the Securities and Exchange Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed under the Securities Exchange Act of 1934 is accumulated and communicated to management, including our Chief Executive Officer to allow timely decisions regarding required disclosure.




Our management, including our Chief Executive Officer and Chief Accounting Officer, does not expect that our disclosure controls and procedures or our internal controls will prevent all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of the controls can provide absolute assurance that all control issues and instances of fraud, if any, within our company have been detected.





Changes in Internal Control over Financial Reporting




There were no changes in our internal controls over financial reporting during the three month period ended September 30, 2010 that materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.







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PART II OTHER INFORMATION





ITEM 2 - Unregistered Sales of Equity Securities and Use of Proceeds




On January 6, 2010, the Board of Directors of the Company authorized and approved the issuance of 12,500 shares restricted Common Shares at $7.00 per share to CityVac IR Services in exchange for investment relation services to be rendered to the Company.   These shares were issued during the quarter ended September 30, 2010.  The Company relied on Section 4 (2) of the Securities Act of 1933, as amended (the "Act") with respect to the shareholder.


ITEM 6 - Exhibits




ExhibitNumber

Description of Exhibit31.1


Section 302 Certification of Chief Executive Officer31.2


Section 302 Certification of Chief Financial Officer32.1


Section 906 Certification of Chief Executive Officer32.2


Section 906 Certification of Chief Financial Officer











SIGNATURES





Pursuant to the requirements of Section 13 or 15(d) of the Exchange Act, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.






A&J VENTURE CAPITAL GROUP, INC.Date: October 29, 2010
By:
/s/ Antal MarkusName: Antal MarkusTitle: CEO, CFO








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