UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549  FORM 10-QSB  (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, 2005.  or  o
Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934. Exchange Act of 1934.  For the transition period from ______to______.  Commission file number 333-110324  KING CAPITAL HOLDINGS, INC. (Exact name of registrant as specified in its charter)  Florida
16-1682307(State or other jurisdiction of
(I.R.S. Employer Identification No.)incorporation or organization)  9387 S. Old State Road, Lewis Center, Ohio
43035(Address of principal executive offices)
(Zip Code)  (770) 514-2006 (Registrants telephone number, including area code)  (Former name, former address and former fiscal year, if changed since last report)  Check whether the issuer (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or for such shorter period that the issuer was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o  Check whether the registrant has filed all documents and reports required to be filed by Sections 12, 13, or 15(d) of the Exchange Act subsequent to the distribution of securities under a plan confirmed by a court. YesxNo o  State the number of shares outstanding of each of the issuers classes of common equity, as of May 18, 2005: 33,101,400 shares of common stock.      KING CAPITAL HOLDINGS INC.

FINANCIAL STATEMENTS



INDEX



PART I-- FINANCIAL INFORMATION



Item 1.
Financial Statements

Item 2.
Managements Discussion and Analysis of Financial Condition

Item 3.
Control and Procedures

PART II-- OTHER INFORMATION



Item 1.
Legal Proceedings

Item 2.
Changes in Securities

Item 3.
Defaults Upon Senior Securities

Item 4.
Submission of Matters to a Vote of Security Holders

Item 5.
Other Information

Item 6.
Exhibits and Reports on Form 8-K

SIGNATURE



Item 1. Financial Information



BASIS OF PRESENTATION



The accompanying reviewed financial statements are presented in accordance with generally accepted accounting principles for interim financial information and the instructions to Form 10-QSB and item 310 under subpart A of Regulation S-B. 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 only of normal occurring accruals) considered necessary in order to make the financial statements not misleading, have been included. Operating results for the three months ended March 31, 2005 are not necessarily indicative of results that may be expected for the year ending December 31, 2005. The financial statements are presented on the accrual basis.







KING CAPITAL HOLDINGS, INC. AND SUBSIDIARY

CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

AS OF MARCH 31, 2005









KING CAPITAL HOLDINGS, INC. AND SUBSIDIARY





CONTENTS





PAGE
1
CONDENSED CONSOLIDATED BALANCE SHEET AS OF MARCH 31, 2005 (UNAUDITED)PAGE
2
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31, 2005 AND 2004 (UNAUDITED)PAGE
3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE THREE MONTHS ENDED MARCH 31, 2005 AND 2004 (UNAUDITED)PAGE
4
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)



KING CAPITAL HOLDINGS, INC. AND SUBSIDIARY

CONDENSED CONSOLIDATED BALANCE SHEET

AS OF MARCH 31, 2005

(UNAUDITED)









ASSETSCURRENT ASSETSCash
$
79,102Accounts receivable, net

19,130Prepaid expenses

708Other receivables

16,591Total Current Assets

115,531PROPERTY AND EQUIPMENT, NET

25,946TOTAL ASSETS
$
141,477LIABILITIES AND STOCKHOLDERS EQUITYCURRENT LIABILITIESAccounts payable and accrued expenses
$
25,859Income taxes payable

21,953TOTAL CURRENT LIABILITIES

47,812STOCKHOLDERS EQUITYPreferred stock, $0.001 par value, 10,000,000 shares authorized, none issued and outstanding

-Common stock, $0.001 par value, 100,000,000 shares authorized, 33,101,400 shares issued and outstanding

33,101Additional paid in capital

(15,422)Retained earnings

76,986Less subscription receivable

(1,000)Total Stockholders Equity

93,665TOTAL LIABILITIES AND STOCKHOLDERS EQUITY
$
141,477



See accompanying notes to condensed consolidated financial statements.

1





KING CAPITAL HOLDINGS, INC. AND SUBSIDIARY

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE THREE MONTHS ENDED MARCH 31, 2005 AND 2004

(UNAUDITED)









2005

2004REVENUE
$
250,341
$
141,781OPERATING EXPENSESMortgage application costs and expenses

93,179

52,171Advertising

47,341

46,899General and administrative

31,192

35,180Total Operating Expenses

171,712

134,250INCOME FROM OPERATIONS

78,629

7,531OTHER INCOMEInterest income

-

3Total Other Income

-

3Income Before Provision for Income Taxes

78,629

7,534Provision for Income Taxes

18,907

1,130NET INCOME
$
59,722
$
6,404Net income per share - basic and diluted
$
-
$
-Weighted average number of shares outstanding during the period - basic and diluted

33,101,400

33,101,400



See accompanying notes to condensed consolidated financial statements.

2





KING CAPITAL HOLDINGS, INC. AND SUBSIDIARY

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE THREE MONTHS ENDED MARCH 31, 2005 AND 2004

(UNAUDITED)









2005

2004CASH FLOWS FROM OPERATING ACTIVITIES:Net income
$
59,722
$
6,404Adjustments to reconcile net income to net cash provided by operating activities:Depreciation expense

1,650

1,645Changes in operating assets and liabilities:Decrease (increase) in accounts receivable

(6,691)

6,990Decrease in prepaid expenses

375

729Increase in other receivables

(16,591)

-Increase (decrease) in accounts payable and accrued expenses

(648)

23,752Net Cash Provided By Operating Activities

37,817

39,520CASH FLOWS FROM INVESTING ACTIVITIES

-

-CASH FLOWS FROM FINANCING ACTIVITIES:Decrease in cash overdraft

-

(3,985)Net Cash Used In Financing Activities

-

(3,985)NET INCREASE IN CASH

37,817

35,535CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD

41,285

6,112CASH AND CASH EQUIVALENTS AT END OF PERIOD
$
79,102
$
41,647SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:Cash paid fro income taxes
$
-
$
-Cash paid for interest expense
$
-
$
-



See accompanying notes to condensed consolidated financial statements.

3





KING CAPITAL HOLDINGS, INC. AND SUBSIDIARY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

AS OF MARCH 31, 2005

(UNAUDITED)







NOTE 1
BASIS OF PRESENTATION AND ORGANIZATION

(A) Basis of Presentation



The accompanying unaudited financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules and regulations of the Securities and Exchange Commission for interim financial information. Accordingly, they do not include all the information necessary for a comprehensive presentation of financial position and results of operations.



It is managements opinion however, that all material adjustments (consisting of normal recurring adjustments) have been made which are necessary for a fair financial statements presentation. The results for the interim period are not necessarily indicative of the results to be expected for the year.



(B) Use of Estimates



In preparing financial statements in conformity with generally accepted accounting principles, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and revenues and expenses during the reported period. Actual results could differ from those estimates.



(C) Earnings Per Share



Basic and diluted net income per common share is computed based upon the weighted average common shares outstanding as defined by Financial Accounting Standards No. 128, Earnings Per Share. As of March 31, 2005 and 2004, there were no common share equivalents outstanding.



(D) Income Taxes



For the three months ended March 31, 2005, the Company accounts for income taxes under the Statement of Financial Accounting Standards No. 109, Accounting for Income Taxes (Statement 109). Under Statement 109, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Under Statement 109, the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.







4










Item 2. Managements Discussion and Analysis or Plan of Operation



Overview



We are a provider of traditional mortgage services and we derive our revenues from the brokering of mortgage loans. We charge a fixed processing fee, a credit report fee, a brokerage fee, and an origination fee. We recognize revenues when the loan is closed, at which time we are paid by the lender.



We have generated revenues to date and although we expect to continue to generate revenues we will still need to raise additional funds to expand our business. Therefore we will continue to operate on a reduced budget until such time. If we are unable to raise additional funds by fiscal year end 2005 we may have to limit our operations to an extent not presently determinable by management. Sean King, our sole officer, director and principal shareholder, has agreed verbally that he will cover the costs for our operations until additional funds become available. We have no written agreement with Mr. King to legally insure that he will provide the funding for our operation. Although we have no commitments for capital, other than verbal assurances from Mr. King, we may raise additional funds through:



-
public offerings of equity, securities convertible into equity or debt,-
private offerings of securities or debt, or-
other sources.

Even if we do not raise additional capital, we believe that we will be able to continue operations for twelve months based on the funding to be provided by Mr. King and revenues that we anticipate generating in the near future. Our investors should assume that any additional funding will cause substantial dilution to current stockholders. In addition, we may not be able to raise additional funds on favorable terms, if at all.



Results of Operations



For the Three Months Ended March 31, 2005 and 2004



Gross revenues increased from $141,781 for the three month period ended March 31, 2004 to $250,341 for the three months period ended March 31, 2005, an increase of $108,560. These revenues were generated from our brokering of mortgage loans. We are not aware of any known trends, events, demands, commitments or uncertainties in our industry that are reasonably likely to have a material impact on our present or future financial condition or operating performance. The increase in revenues is due significant part upon our increased marketing and advertising of our services as well as maintaining relationships with and providing support to, existing and new customers. There can be no assurance that our revenues will increase in the future. Accordingly, our ability to maintain or increase revenues will depend in part upon our ability to market and advertise our services to attract new customers. Our net income from operations
for the period ending March 31, 2004 was $6,404 as compared to net income from operations for the period ending March 31, 2005 of $59,722.









Selling, general and administrative expenses decreased from $35,180 for the period ending March 31, 2004 to $31,192 for the period ending March 31, 2005. These expenses represent our total operating expenses during this period. The decrease in our total operating expenses was due to the decreased sale, marketing and advertising expenditures. Mortgage expense and application cost expense was $52,171 and $93,179 for the three months ended March 31, 2004 and 2005, respectively an increase of $41,008. The increase was due to the increase in revenue. Advertising expenses were $47,341 and $46,899 for the three months ended March 31, 2005 and 2004, respectively an increase of $442 in additional advertising costs.



Capital Resources and Liquidity.



As of March 31, 2005, we had $79,102 in cash. Our general and administrative is expected to average $10,500 per month for the next 12 months based upon our projected operating budget. We can currently satisfy less than eight months of operations without receiving additional funds from Mr. King or additional investors.



Our operating activities provided cash of $37,817 in the three months ending March 31, 2005, whereas in the three months ending March 31, 2004 our operating activities provided cash of $39,520. As of March 31, 2005, we had total current assets of $115,531 including cash of $79,102. As of March 31, 2005, our total current liabilities amounted to $47,812.



We plan to pay a salary of $4,000 per month to our sole officer and director for the next 12 months. We do not have sufficient cash to meet our minimum expenses for the next 12 months and we will be unable to expand on our business unless we are successful in raising additional capital. We are seeking equity financing of between $250,000 and $500,000 to cover our expenses. If we cannot raise at least $250,000 it will have a significant impact on our liquidity and our ability to proceed with our business expansion plans. Specifically, failure to raise at least $250,000 may require us to reduce our current staff and will prevent us from hiring additional resources necessary to support our expansion plans. Moreover, expansion will be delayed since we will not have the requisite funding available. In addition, we will need to raise additional capital to continue our operations past 12 months, and there is no assurance we will
be successful in raising the needed capital.



Critical Accounting Policies



King Capitals financial statements and related public financial information are based on the application of accounting principles generally accepted in the United States (GAAP). GAAP requires the use of estimates; assumptions, judgments and subjective interpretations of accounting principles that have an impact on the assets, liabilities, revenue and expense amounts reported. These estimates can also affect supplemental information contained in our external disclosures including information regarding contingencies, risk and financial condition. We believe our use if estimates and underlying accounting assumptions adhere to GAAP and are consistently and conservatively applied. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. Actual results may differ materially from these estimates under different assumptions or
conditions. We continue to monitor significant estimates made during the preparation of our financial statements.









Our significant accounting policies are summarized in Note 1 of our financial statements. While all these significant accounting policies impact its financial condition and results of operations, King Capital views certain of these policies as critical. Policies determined to be critical are those policies that have the most significant impact on King Capitals consolidated financial statements and require management to use a greater degree of judgment and estimates. Actual results may differ from those estimates. Our management believes that given current facts and circumstances, it is unlikely that applying any other reasonable judgments or estimate methodologies would cause effect on our consolidated results of operations, financial position or liquidity for the periods presented in this report.



Item 3. Controls and Procedures



(a)
Evaluation of disclosure controls and procedures.

Our Chief Executive Officer and Chief Financial Officer (collectively the Certifying Officers) maintain a system of disclosure controls and procedures that is designed to provide reasonable assurance that information, which is required to be disclosed, is accumulated and communicated to management timely. Under the supervision and with the participation of management, the Certifying Officers evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule [13a-14(c)/15d-14(c)]under the Exchange Act) within 90 days prior to the filing date of this report. Based upon that evaluation, the Certifying Officers concluded that our disclosure controls and procedures are effective in timely alerting them to material information relative to our company required to be disclosed in our periodic filings with the SEC.





(b)
Changes in internal controls.

Our Certifying Officer has indicated that there were no significant changes in our internal controls or other factors that could significantly affect such controls subsequent to the date of his evaluation, and there were no such control actions with regard to significant deficiencies and material weaknesses.



PART II - OTHER INFORMATION



Item 1. Legal Proceedings.



The Company is currently not a party to any pending legal proceedings and no such action by, or to the best of its knowledge, against the Company has been threatened.



Item 2. Changes in Securities.



None



Item 3. Defaults Upon Senior Securities.



None









Item 4. Submission of Matters to a Vote of Security Holders.



No matter was submitted during the quarter ending March 31, 2005, covered by this report to a vote of the Companys shareholders, through the solicitation of proxies or otherwise.



Item 5. Other Information.



None



Item 6. Exhibits and Reports of Form 8-K.



(a)
Exhibits

31.1 Certification pursuant to Section 302 of Sarbanes Oxley Act of 2002

32.1 Certification pursuant to Section 906 of Sarbanes Oxley Act of 2002



(b)
Reports of Form 8-K

None

SIGNATURES



In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, there unto duly authorized.



KING CAPITAL HOLDINGS, INC.Registrant



Date: May 18, 2005
By:/s/ Sean KingSean KingPresident, Chief Executive Officer,Chief Financial Officer andChief Accounting Officer