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 MARCH 31, 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 Registrant as Specified in its Charter)




Nevada
75-3260541(State or other jurisdiction of incorporation or organization)
(I.R.S. Employer ID No.)444 Seabreeze Blvd., Suite 660, Daytona Beach, FL
32118(Address of principal executive offices)
(Zip code)





Registrant's telephone number: (905) 212-7467





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 xNo o




Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes o No o
  Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
  Large accelerated filer
o

Accelerated filer
oNon-accelerated filer
o
(Do not check if a smaller reporting company)
Smaller reporting company
x
 
 Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes oNo x






APPLICABLE ONLY TO CORPORATE ISSUERS:
  Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
  At May 21, 2010, 32,750,000 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 March 31, 2010 (unaudited) and June 30, 2009
3Unaudited Condensed Statements of Operations for the three and nine months ended March 31, 2010 and 2009, cumulative during development stage from February 22, 2007 (inception) through March 31, 2010
4Unaudited Condensed Statements of Cash Flows for the nine months ended March 31, 2010 and 2009, and cumulative during development stage from February 22, 2007 (inception) through March 31, 2010
5Notes to Condensed Financial Statements (unaudited)
6ITEM 2
Management’s Discussion and Analysis of Financial Condition and Results of Operations
10ITEM 3
Quantitative and Qualitative Disclosures about Market Risk
13ITEM 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 SHEETSMarch 31,


June 30,2010


2009(unaudited)ASSETSCURRENT ASSETSCash

$
7,838


$
-Prepaid expenses


502



-Deferred Expenses


25,215



-TOTAL CURRENT ASSETS


33,556



-Total Assets

$
33,556


$
-LIABILITIES AND STOCKHOLDERS' (DEFICIT)Accounts payable

$
6,029


$
1,500Accounts payable - Related party


-



2,450Shareholder advances


92,815



689TOTAL CURRENT LIABILITIES


98,843



4,638COMMITMENTS AND CONTINGENCIESSTOCKHOLDERS' (DEFICIT)Preferred stock, par value $.0001, 10,000,000shares authorized, 10,000 issued and outstanding


1



-Common stock, par value $.0001, 100,000,000shares authorized, 32,750,000 issued and outstanding - 2010and, 31,500,000 issued and outstanding - 2009


3,275



3,150Paid in Capital


164,435



67,061(Deficit) accumulated during the development stage


(232,999
)


(74,849
)Total Stockholders' (Deficit)


(65,288
)


(4,638
)Total Liabilities and Stockholders' (Deficit)

$
33,556


$
-


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


For the nine months ended


(Inception)March 31,


March 31,


to2010


2009


2010


2009


March 31, 2010REVENUES

$
-


$
-


$
-


$
-


$
-EXPENSESAmortization


(5,000
)


-



(14,785
)


-



(14,785
)Accounting and Audit fees


(3,851
)


-



(23,016
)


(1,500
)


(41,356
)Consulting Fees


(102,000
)


-



(111,000
)


-



(117,500
)Rent expense


(2,808
)


(679
)


(8,635
)


(4,770
)


(16,710
)General and administrative


(1,703
)


(354
)


(713
)


(2,958
)


(42,144
)Total expenses


(115,363
)


(1,033
)


(158,150
)


(9,228
)


(232,495
)Interest Expense


-



-



-



-



(504
)NET (LOSS)

$
(115,363
)

$
(1,033
)

$
(158,150
)

$
(9,228
)

$
(232,999
)OTHER COMPREHENSIVE INCOMEForeign exchange gain on translation


-



-



-



-COMPREHENSIVE INCOME (LOSS)

$
(115,363
)

$
(1,033
)

$
(158,150
)

$
(9,228
)NET (LOSS) PER SHARE - BASIC


*



*



*



*WEIGHTED AVERAGE NUMBER OFCOMMON SHARES OUTSTANDING


31,500,000



31,500,000



31,500,000



31,500,000*  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 nine months ended


(Inception)March 31,


to2010


2009


March 31, 2010OPERATING ACTIVITIESNet (loss)

$
(158,150
)

$
(9,228
)

$
(232,999
)Adjustments to reconcile net income (loss) to net cash used byoperating activitiesStock issued for services


97,500



-



97,500Depreciation and amortization


14,785



-



14,834Changes in operating assets and liabilitiesAccounts payable


4,529



(1,002
)


4,226Accounts payable - Related party


(2,450
)


11,078



2,707Prepaid expenses


(502
)


(848
)


(502
)Deferred Charges


(40,000
)


-



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


(84,288
)


-



(154,234
)INVESTING ACTIVITIESPurchase of property and equipment


-



-



(1,622
)NET CASH PROVIDED BY INVESTING ACTIVITIES


-



-



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


-



-



35,193Proceeds from shareholder loan payable


92,126



-



128,501NET CASH PROVIDED BY FINANCING ACTIVITIES


92,126



-



163,694NET INCREASE (DECREASE) IN CASH


7,838



-



7,838CASH, BEGINNING OF PERIOD


-



-



-CASH, END OF PERIOD

$
7,838


$
-


$
7,838SUPPLEMENTAL SCHEDULE OF NON-CASH INVESTING AND FINANCING ACTIVITIESShareholder advances on behalf of company









$
36,591Property and equipment net of depreciation exchanged for debt










(1,573
)Shareholder's debt contributed to capital










(35,018
)$
-
 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 FINANCIAL STATEMENTS
 For the nine months ended March 31, 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 March 31, 2010 and the results of its operations and cash flows for the nine months ended March 31, 2010 have been made.  Operating results for the nine months ended March 31, 2010 are not necessarily indicative of the results that may be expected for the year ended June 30, 2010.





These condensed financial statements should be read in conjunction with the financial statements and notes for the years ended June 30, 2009, 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 in 2009 and 2008.





As of March 31, 2010 we have a working capital deficit of $65,287, stockholders’ deficit of $65,288 and accumulated deficit of $232,999. During the period ending March 31, 2010 we had a net loss of $158,150 and cash used in operating activities of $84,288. 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 January 2010, the FASB issued Accounting Standards Update 2010-02, Consolidation (Topic 810): Accounting and Reporting for Decreases in Ownership of a Subsidiary.  This amendment to Topic 810 clarifies, but does not change, the scope of current US GAAP.  It clarifies the decrease in ownership provisions of Subtopic 810-10 and removes the potential conflict between guidance in that Subtopic and asset derecognition and gain or loss recognition guidance that may exist in other US GAAP.  An entity will be required to follow the amended guidance beginning in the period that it first adopts FAS 160 (now included in Subtopic 810-10).  For those entities that have already adopted FAS 160, the amendments are effective at the beginning of the first interim or annual reporting period ending on or after December 15, 2009. The amendments should be applied retrospectively to the first period that an entity adopted FAS 160.  The Company does not expect the provisions of ASU 2010-02 to have a material effect on the financial position, results of operations or cash flows of the Company.





In January 2010, the FASB issued Accounting Standards Update 2010-01, Equity (Topic 505): Accounting for Distributions to Shareholders with Components of Stock and Cash (A Consensus of the FASB Emerging Issues Task Force).  This amendment to Topic 505 clarifies the stock portion of a distribution to shareholders that allows them to elect to receive cash or stock with a limit on the amount of cash that will be distributed is not a stock dividend for purposes of applying Topics 505 and 260. Effective for interim and annual periods ending on or after December 15, 2009, and would be applied on a retrospective basis.  The Company does not expect the provisions of ASU 2010-01 to have a material effect on the financial position, results of operations or cash flows of the Company.





In December 2009, the FASB issued Accounting Standards Update 2009-17, Consolidations (Topic 810): Improvements to Financial Reporting by Enterprises Involved with Variable Interest Entities.  This Accounting Standards Update amends the FASB Accounting Standards Codification for Statement 167. (See FAS 167 effective date below)





In December 2009, the FASB issued Accounting Standards Update 2009-16, Transfers and Servicing (Topic 860): Accounting for Transfers of Financial Assets.  This Accounting Standards Update amends the FASB Accounting Standards Codification for Statement 166. (See FAS 166 effective date below)





In October 2009, the FASB issued Accounting Standards Update 2009-15, Accounting for Own-Share Lending Arrangements in Contemplation of Convertible Debt Issuance or Other Financing.  This Accounting Standards Update amends the FASB Accounting Standard Codification for EITF 09-1.  (See EITF 09-1 effective date below)





In October 2009, the FASB issued Accounting Standards Update 2009-14, Software (Topic 985): Certain Revenue Arrangements That Include Software Elements.  This update changed the accounting model for revenue arrangements that include both tangible products and software elements.  Effective prospectively for revenue arrangements entered into or materially modified in fiscal years beginning on or after June 15, 2010.  Early adoption is permitted.  The Company does not expect the provisions of ASU 2009-14 to have a material effect on the financial position, results of operations or cash flows of the Company.




6
 A & J VENTURE CAPITAL GROUP, INC.
 (FORMERLY ALCO ENERGY CORP.)
 (A Development Stage Enterprise)
 NOTES TO CONDENSED FINANCIAL STATEMENTS
 For the nine months ended March 31, 2010 and 2009
 (Unaudited)
 
 NOTE 3 – RECENTLY ISSUED ACCOUNTING STANDARDS – continued





In October 2009, the FASB issued Accounting Standards Update 2009-13, Revenue Recognition (Topic 605): Multiple-Deliverable Revenue Arrangements.  This update addressed the accounting for multiple-deliverable arrangements to enable vendors to account for products or services (deliverables) separately rather than a combined unit and will be separated in more circumstances that under existing US GAAP.  This amendment has eliminated that residual method of allocation.  Effective prospectively for revenue arrangements entered into or materially modified in fiscal years beginning on or after June 15, 2010.  Early adoption is permitted. The Company does not expect the provisions of ASU 2009-13 to have a material effect on the financial position, results of operations or cash flows of the Company.





In September 2009, the FASB issued Accounting Standards Update 2009-12, Fair Value Measurements and Disclosures (Topic 820): Investments in Certain Entities That Calculate Net Asset Value per Share (or Its Equivalent).  This update provides amendments to Topic 820 for the fair value measurement of investments in certain entities that calculate net asset value per share (or its equivalent).  It is effective for interim and annual periods ending after December 15, 2009.  Early application is permitted in financial statements for earlier interim and annual periods that have not been issued. The Company does not expect the provisions of ASU 2009-12 to have a material effect on the financial position, results of operations or cash flows of the Company.





In July 2009, the FASB ratified the consensus reached by EITF (Emerging Issues Task Force) issued EITF No. 09-1, (ASC Topic 470) “Accounting for Own-Share Lending Arrangements in Contemplation of Convertible Debt Issuance” (“EITF 09-1”).  The provisions of EITF 09-1, clarifies the accounting treatment and disclosure of share-lending arrangements that are classified as equity in the financial statements of the share lender.  An example of a share-lending arrangement is an agreement between the Company (share lender) and an investment bank (share borrower) which allows the investment bank to use the loaned shares to enter into equity derivative contracts with investors.  EITF 09-1 is effective for fiscal years that beginning on or after December 15, 2009 and requires retrospective application for all arrangements outstanding as of the beginning of fiscal years beginning on or after December 15, 2009.   Share-lending arrangements that have been terminated as a result of counterparty default prior to December 15, 2009, but for which the entity has not reached a final settlement as of December 15, 2009 are within the scope.  Effective for share-lending arrangements entered into on or after the beginning of the first reporting period that begins on or after June 15, 2009.  The Company does not expect the provisions of EITF 09-1 to have a material effect on the financial position, results of operations or cash flows of the Company.





In June 2009, the FASB issued SFAS No. 168 (ASC Topic 105), “The FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles – a replacement of FASB Statement No. 162” (“SFAS No. 168”).  Under SFAS No. 168 the “FASB Accounting Standards Codification” (“Codification”) will become the source of authoritative US GAAP to be applied by nongovernmental entities.  Rules and interpretive releases of the Securities and Exchange Commission (“SEC”) under authority of federal securities laws are also sources of authoritative GAAP for SEC registrants. SFAS No. 168 is effective for financial statements issued for interim and annual periods ending after September 15, 2009.  On the effective date, the Codification will supersede all then-existing non-SEC accounting and reporting standards. All other non-grandfathered non-SEC accounting literature not included in the Codification will become non-authoritative. SFAS No. 168 is effective for the Company’s interim quarterly period beginning July 1, 2009. The Company does not expect the adoption of SFAS No. 168 to have an impact on the financial statements.





In June 2009, the FASB issued SFAS No. 167 (ASC Topic 810), “Amendments to FASB Interpretation No. 46(R) (“SFAS 167”).   SFAS 167 amends the consolidation guidance applicable to variable interest entities. The provisions of SFAS 167 significantly affect the overall consolidation analysis under FASB Interpretation No. 46(R).  SFAS 167 is effective as of the beginning of the first fiscal year that begins after November 15, 2009. SFAS 167 will be effective for the Company beginning in 2010. The Company does not expect the provisions of SFAS 167 to have a material effect on the financial position, results of operations or cash flows of the Company.





In June 2009, the FASB issued SFAS No. 166, (ASC Topic 860) “Accounting for Transfers of Financial Assets—an amendment of FASB Statement No. 140” (“SFAS 166”). The provisions of SFAS 166, in part, amend the derecognition guidance in FASB Statement No. 140, eliminate the exemption from consolidation for qualifying special-purpose entities and require additional disclosures. SFAS 166 is effective for financial asset transfers occurring after the beginning of an entity’s first fiscal year that begins after November 15, 2009. The Company does not expect the provisions of SFAS 166 to have a material effect on the financial position, results of operations or cash flows of the Company.





In April 2009, the FASB issued SFAS No. 164, (ASC Topic 810) “Not-for-Profit Entities: Mergers and Acquisitions – including an amendment of FASB Statement No. 142” (“SFAS 164”). The provisions of SFAS 164 provide guidance on accounting for a combination of not-for-profit entities either via merger or acquisition.  SFAS 164 is effective for mergers occurring on or after the beginning of an initial reporting period beginning on or after December 15, 2009 and acquisitions occurring on or after the beginning of the first annual reporting period beginning on or after December 15, 2009. The Company does not expect the provisions of SFAS 164 to have a material effect on the financial position, results of operations or cash flows of the Company.











7


A & J VENTURE CAPITAL GROUP, INC.
 (FORMERLY ALCO ENERGY CORP.)
 (A Development Stage Enterprise)
 NOTES TO CONDENSED FINANCIAL STATEMENTS
 For the nine months ended March 31, 2010 and 2009
 (Unaudited)





NOTE 3 – RECENTLY ISSUED ACCOUNTING STANDARDS – continued





In June 2009, the Securities and Exchange Commission’s Office of the Chief Accountant and Division of Corporation Finance announced the release of Staff Accounting Bulletin (SAB) No. 112. This staff accounting bulletin amends or rescinds portions of the interpretive guidance included in the Staff Accounting Bulletin Series in order to make the relevant interpretive guidance consistent with current authoritative accounting and auditing guidance and Securities and Exchange Commission rules and regulations. Specifically, the staff is updating the Series in order to bring existing guidance into conformity with recent pronouncements by the Financial Accounting Standards Board, namely, Statement of Financial Accounting Standards No. 141 (revised 2007) (ASC Topic 805), Business Combinations, and Statement of Financial Accounting Standards No. 160 (ASC Topic 810), Non-controlling Interests in Consolidated Financial Statements. The statements in staff accounting bulletins are not rules or interpretations of the Commission, nor are they published as bearing the Commission's official approval. They represent interpretations and practices followed by the Division of Corporation Finance and the Office of the Chief Accountant in administering the disclosure requirements of the Federal securities laws.





In September 2008, the FASB issued exposure drafts that eliminate qualifying special purpose entities from the guidance of SFAS No. 140(ASC Topic 860), “Accounting for Transfers and Servicing of Financial  Assets and  Extinguishments of Liabilities,” and  FASB  Interpretation 46 (ASC Topic 810) (revised December 2003), “Consolidation of  Variable  Interest Entities − an interpretation of ARB  No. 51 (ASC Topic 810),” as well as other modifications.  While the proposed revised pronouncements have not been finalized and the proposals are subject to further public comment, the Company anticipates the changes will not have a significant impact on the Company’s financial statements.  The changes would be effective March 1, 2010, on a prospective basis.






NOTE 4 – RELATED PARTY TRANSACTIONS AND BALANCES





For the period ending March 31, 2010, we paid $13,500 for consulting fees for our President. We also paid $8,635 rent for our office space in Heidelberg, Germany, to the same officer. As of March 31, 2010, we owed our President $8,689in shareholder advances. On July 2, 2009, we received an advance of $84,126 from our President in connection with a non-collateralized note payable. The note is payable on demand and bears no interest, and is therefore classified as a current liability.





On March 1, 2010, we granted and issued our President 10,000 series “A” preferred stock shares with a value of $10,000 for consulting services rendered, and the expense is included in consulting fees in the statements of operations. (Note 5)






NOTE 5 – STOCKHOLDERS’ EQUITY





Increase in Authorized Shares of Common and Preferred Stock





On February 18, 2010, our board of directors (“BOD”) approved an amendment to our articles of incorporation to authorize us to issue two classes of stock and to increase the authorized shares and decrease the par value of our common stock. One class of shares shall be designated as common stock, par value $0.0001 and the total number of common shares which this Corporation is authorized to issue is 100,000,000. Previously, our common shares of stock were par value of $0.001, and total authorized was 75,000,000. The other class of shares shall be designated as preferred stock, par value $0.0001 and the total number of preferred shares which we are authorized to issue is 10,000,000. The holders of the preferred stock shall such rights, preferences and privileges as may be determined by the BOD prior to the issuance of such shares. The preferred stock may be issued in such series as are designated by the BOD and the BOD may fix the number of authorized shares of preferred stock for each series and the rights preferences and privileges of each series of preferred stock. The amendment was approved by the board of directors and by a majority of the shareholders.  The amendment was filed with the Secretary of State of Nevada and became effective on February 19, 2010. The effect of this amendment has been reflected in the accompanying financial statements, and Stockholders’ Statement of Deficit.





Preferred Stock – Series A





On February 26, 2010, we filed with the Secretary of State of the State of Nevada a Certificate of Designation of Series “A” Preferred Stock (the "Certificate of Designations") designating ten thousand (10,000) of the Company's previously authorized preferred stock.





The 10,000 Series “A” Preferred Stock shall have an aggregate voting power of 45% of the combined voting power of the entire Company’s shares, Common Stock and Preferred Stock as long as the Company is in existence. Each holder of the Series “A” Preferred Stock shall have full voting rights and powers equal to the voting rights and powers of the holders of Common Stock, and shall be entitled, notwithstanding any provision hereof, to notice of any stockholders’ meeting in accordance with the by-laws of the Company, and shall be entitled to vote, together with holders of Common Stock, with respect to any question upon which holders of Common Stock have the right to vote.





Without the vote or consent of the holders of at least a majority of the shares of Series “A” Preferred Stock then outstanding, the Company may not (i) authorize, create or issue, or increase the authorized number of shares of, any class or series of capital stock ranking prior to or on a parity with the Series “A” Preferred Stock, (ii) authorize, create or issue any class or series of common stock of the Company other than the Common Stock, (iii) authorize any reclassification of the Series “A” Preferred Stock, (iv) authorize, create or issue any securities convertible into or exercisable for capital stock prohibited by (i) or (ii), (v) amend this Certificate of Designations or (vi) enter into any merger or reorganization, or disposal of assets involving 20% of the total capitalization of the Company.






8
 A & J VENTURE CAPITAL GROUP, INC.
 (FORMERLY ALCO ENERGY CORP.)
 (A Development Stage Enterprise)
 NOTES TO CONDENSED FINANCIAL STATEMENTS
 For the nine months ended March 31, 2010 and 2009
 (Unaudited)





NOTE 5 – STOCKHOLDERS’ EQUITY- continued


Preferred Stock – Series A - continued
  Subject to the rights of the holders of any other series of Preferred Stock ranking senior to or on a parity with the Series “A” Preferred Stock with respect to liquidation and any other class or series of capital stock of the Company ranking senior to or on a parity with the Series “A” Preferred Stock with respect to liquidation, in the event of any liquidation, dissolution or winding up of the affairs of the Company, whether voluntary or involuntary, the holders of record of the issued and outstanding shares of Series “A” Preferred Stock shall be entitled to receive, out of the assets of the Company available for distribution to the holders of shares of Series “A” Preferred Stock, prior and in preference to any distribution of any of the assets of the Company to the holders of Common Stock and any other series of Preferred Stock ranking junior to the Series “A” Preferred Stock with respect to liquidation.





The holders of the Series “A” Preferred Stock shall not be entitled to receive dividends per share of Series “A” Preferred Stock.  The Company shall have no rights to redeem Series “A” Preferred Stock.





Stock Based Compensation





On January 6, 2010, we granted and approved the issuance of 1,250,000 shares restricted Common Shares at $0.07 per share to our investor relations firm for investment relation services rendered to us by them.








NOTE 6 – COMMITMENTS AND CONTINGENCIES





Joint Venture Agreement





On January 10, 2010, we entered into a joint venture with an unrelated third party to form a new company called “A&J Brewery Ltd.” After the new company is set up we will own 50% of the common stock. We will jointly operate the new venture with the third party, who will be mainly responsible for the marketing, exporting, production, and management of the plant. We will be responsible for the business expansion and funding for the new venture. The new venture will have a calendar fiscal year, and will follow all local regulations. After the payment of all taxes the profit and losses will be distributed according to shareholdings. The joint venture can be dissolved by either party, or because of serious loss, and the governing law shall be the laws of Hong Kong. As of March 31, 2010, the Agreement was never formalized and was never executed; as such it is not in force.








NOTE 7 – SUBSEQUENT EVENT





The Company evaluated its March 31, 2010 financial statements for subsequent events through the date the financial statements were issued. The Company is not aware of any subsequent events which would require recognition or disclosure in the financial statements.








9


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.





The following discussion highlights the principal factors that have affected our financial condition and results of operations as well as our liquidity and capital resources for the periods described. This discussion contains forward-looking statements. Please see “Forward-Looking Statements” and “Risk Factors” for a discussion of the uncertainties, risks and assumptions associated with these forward-looking statements.





The following discussion and analysis of the Company’s financial condition and results of operations are based on the Company’s financial statements, which the Company has prepared in accordance with U.S. generally accepted accounting principles. You should read the discussion and analysis together with such financial statements and the related notes thereto.





Plan of Operations





A & J Venture Capital, Inc.’s strategy is to pursue total or partial takeover of Chinese SME ́s with the scope of restructuring and improving their performance through the thorough application of modern management techniques.  This will be achieved through A&J Venture Capital Group ́s own staff or through the development of the subsidiaries existent staff.  A dynamically tailored package of activities design the Company will lead the subsidiaries to development stage.





On January 10, 2010, we entered into a joint venture with an unrelated third party to form a new company called “A&J Brewery Ltd.” After the new company is set up we will own 50% of the common stock. We will jointly operate the new venture with the third party, who will be mainly responsible for the marketing, exporting, production, and management of the plant. We will be responsible for the business expansion and funding for the new venture. The new venture will follow all local regulations. After the payment of all taxes the profit and losses will be distributed according to shareholdings. The joint venture can be dissolved by either party, or because of serious loss, and the governing law shall be the laws of Hong Kong. As of March 31, 2010, the Agreement was never formalized and was never executed; as such it is not in force.




Overall, during the next 12 months, we cannot predict accurately the amount of capital that we will need to accomplish our plan of operations. The amount of capital needed will vary depending on the projects that we seek.  If during the next 12 months, we are unsuccessful in effectuating our plan of operations as described above, we expect to incur total expenditures of at least $500,000. In this regard and during such period; we anticipate spending $20,000 on professional fees attributable to fulfilling our reporting obligations under the federals securities laws and $50,000 on general administrative costs and expenditures associated with complying with reporting obligations.  We anticipate that additional funding will be required in the form of equity financing from the sale of our common stock. However, we cannot provide investors with any assurance that we will be able to raise sufficient funding from the sale of our common stock to fund our marketing plan and operations. We believe that debt financing will not be an alternative for funding the marketing plan. We do not have any arrangements in place for any future equity financing. If we are required to raise additional funds, substantial dilution may result to existing shareholders. Our auditor’s have raised substantial doubt concerning our ability to continue as a going concern. Please see our audited financial statements contained in our Form 10-K for the period ended June 30, 2009.








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




Results of Operations for the Three Months Ended March 31, 2010 and the Three Months Ended March 31, 2009





We did not earn any revenues for the period ended March 31, 2010 and 2009.





As of March 31, 2010, we had total assets of $33,556 and total liabilities of $98,843 compared to total assets of $0 and total liabilities of $4,638 as of June 30, 2009.





During the three months ended March 31, 2010, we incurred operating expenses in the amount of $115,363. These operating expenses were comprised of accounting and audit fees, general and management expenses, and transfer agent fees, compared to operating expenses of $1,033 for the three months ended March 31, 2009.





For the three month period ending March 31, 2010, we paid $4,500 for consulting fees to our President. We also paid $2,808 rent for our office space in Heidelberg, Germany, to the same officer.





Beginning June 1, 2009, we leased the above office space from our current President under a non-cancelable operating lease; previous to this we leased office space on a month to month basis.  Rent expense was $2,808 for the three months ended March 31, 2010.




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.





Results of Operations for the Nine months Ended March 31, 2010 and the Nine months Ended March 31, 2009





During the nine months ended March 31, 2010, we incurred operating expenses in the amount of $158,150. These operating expenses were comprised of accounting and audit fees, general and management expenses, and transfer agent fees.  This compared to operating expenses of $9,228 for the nine months ended March 31, 2009.





For the nine month period ending March 31, 2010, we paid $13,500 for consulting fees for our President. On March 1, 2010, we granted and issued our President 10,000 series “A” preferred stock shares with a value of $10,000 for consulting services rendered, and the expense is included in consulting fees in the statements of operations. We also paid $8,635 rent for our office space in Heidelberg, Germany, to the same officer.





As of March 31, 2010, we owed our President $92,815, consisting of $8,689 in shareholder advances in the current period, and on July 2, 2009, we received an advance of $84,126 from our President in connection with a non-collateralized note payable. The note is payable on demand, and is therefore classified as a current liability, and bears no interest.





Beginning June 1, 2009, we leased office space from our current President under a non-cancelable operating lease; previous to this we leased office space on a month to month basis.  Rent expense was $8,635 for the nine months ended March 31, 2010.




Liquidity and Capital Resources




As of March 31, 2010 the Company had a cash balance of $7,838, and as of June 30, 2009, the Company had no cash balance.





On July 2, 2009, we received an advance of $84,126 from our President in connection with a non-collateralized note payable. The note is payable on demand and bears no interest.







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




Liquidity and Capital Resources - continued




Through December 31, 2009, we had sold $42,000 in equity securities to pay for our business operations. We sold 13,500,000 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 18,000,000 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.




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 current President under a non-cancelable operating lease at 670 Euros per month (approximately $960 per month) for 12 months.  Rent expense was $2,808 and $8,635 for the three months ended and nine months ended March 31, 2010, respectively.





Beginning February 1, 2010, we leased a 578 square foot office space at 444 Seabreeze Blvd., Suite 660, Daytona Beach, Florida on a month to month basis at $903 per month, with a thirty day notice. We did not finalize this agreement and did not move in and cancelled the agreement.








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






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 March 31, 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 March 31, 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.







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  ITEM 4T - Controls and Procedures - continued
  Changes in Internal Control over Financial Reporting
  There were no changes in our internal controls over financial reporting during the nine month period ended March 31, 2010 that materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.








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 1,250,000 shares restricted Common Shares at $0.07 per share to CityVac IR Services in exchange for investment relation services to be rendered to the Company. As of February 15, 2009, these shares of common stock have not been issued and are pending.  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: May 24, 2010
By:
/s/ Andreas KlimmName: Andreas KlimmTitle:








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