U.S.
SECURITIES AND EXCHANGE COMMISSION


Washington,
D.C. 20549


FORM
10-Q





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





For the
quarterly period ended: December 31, 2010





 ̈ TRANSITION REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF
1934





Commission
file number:000-53326





DRC VENTURES, INC.(Exact
      name of registrant as specified in its
charter)





Nevada
                  
                  26-2423443(State
      or other jurisdiction of incorporation or organization)
                  
                  (I.R.S.
      Employer Identification
No.)





497 Willow Street, South Hempstead, New York
      11550(Address
      of principal executive
offices)
 
 (516) 594-4401(Issuer's
      telephone
number)





(Former
      name, former address and formerfiscal
      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.    x  Yes    ̈  No





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   ̈ No





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    ̈
              Accelerated
      filer      ̈Non-accelerated
      filer      ̈  (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). xYes  ̈No





APPLICABLE
ONLY TO ISSUERS INVOLVED IN BANKRUPTCY


PROCEEDINGS
DURING THE PRECEDING FIVE YEARS





Indicate
by check mark whether the registrant has filed all documents and reports
required to be filed by Section 12, 13 or 15(d) of the Securities Exchange Act
of 1934 subsequent to the distribution of securities under a plan confirmed by a
court.   ̈
Yes   ̈
No










APPLICABLE
ONLY TO CORPORATE ISSUERS





State the
number of shares outstanding of each of the issuer's classes of common equity,
as of the latest practicable date:  At February 11, 2011 there were
1,000,000 shares of common stock outstanding.




1





PART
I — FINANCIAL INFORMATION





Item 1.
Financial Statements.





PageBalance
      Sheets as of December 31, 2010 (unaudited) and June 30,
    2010
              
              F-1Statements
      of Operations for the three and six months ended December 31, 2010 and
      2009 and the period from April  15, 2008 (date of inception) to
      December 31, 2010 (unaudited)
              
              F-2Statement
      of Stockholder’s Deficit as of December 31, 2010
    (unaudited)
              
              F-3Statements
      of Cash Flows for the six months ended December 31, 2010 and 2009 and the
      period from April 15, 2008 (date of inception) to December 31, 2010
      (unaudited)
              
              F-4Notes
      to Financial Statements
              
              F-5




2


DRC
VENTURES, INC.
 (A
DEVELOPMENT STAGE COMPANY)
 BALANCE
SHEETS (unaudited)
 AS
OF DECEMBER 31, 2010 AND JUNE 30, 2010
 
 December 31,
                    2010
                  
                  
                  June 30,
                    2010ASSETSCurrent
      AssetsCash
      and equivalents
                  
                  $
                  1
                  
                  
                  $
                  1TOTAL
      ASSETS
                  
                  $
                  1
                  
                  
                  $
                  1LIABILITIES
      AND STOCKHOLDERS’ DEFICITLiabilitiesCurrent
      LiabilitiesAccrued
      expenses
                  
                  $
                  1,900
                  
                  
                  $
                  3,750Accrued
      interest – related party
                  
                  
                  2,932
                  
                  
                  
                  2,136Loan
      payable - related party
                  
                  
                  22,565
                  
                  
                  
                  17,215Total
      Liabilities
                  
                  
                  27,397
                  
                  
                  
                  23,101Stockholders’
      DeficitCommon
      Stock, $.0001 par value, 100,000,000 shares authorized, 1,000,000 shares
      issued and outstanding
                  
                  
                  100
                  
                  
                  
                  100Preferred
      Stock, $.0001 par value, 10,000,000 shares authorized, -0- shares
      issued and outstanding
                  
                  
                  0
                  
                  
                  
                  0Stock
      subscription receivable
                  
                  
                  0
                  
                  
                  
                  (100
                  )Deficit
      accumulated during the development stage
                  
                  
                  (27,496
                  )
                  
                  
                  (23,100
                  )Total
      Stockholders’ Deficit
                  
                  
                  (27,396
                  )
                  
                  
                  (23,100
                  )TOTAL
      LIABILITIES AND STOCKHOLDERS’ DEFICIT
                  
                  $
                  1
                  
                  
                  $
                  1
  See
accompanying notes to financial statements.
  F-1
 
 DRC
VENTURES, INC.
 (A
DEVELOPMENT STAGE COMPANY)
 STATEMENTS
OF OPERATIONS (unaudited)
 FOR
THE THREE MONTHS AND SIX MONTHS ENDED DECEMBER 31, 2010 AND 2009
 PERIOD
FROM APRIL 15, 2008 (INCEPTION) TO DECEMBER 31, 2010
 
 Three months
                    ended
                    December 31,
                    2010
                  
                  
                  Three months
                    ended
                    December 31,
                    2009
                  
                  
                  Six months
                    ended
                    December 31,
                    2010
                  
                  
                  Six months
                    ended
                    December 31,
                    2009
                  
                  
                  Period from
                    April 15, 2008
                    (Inception) to
                    December 31,
                    2010REVENUES
                  
                  $
                  0
                  
                  
                  $
                  0
                  
                  
                  $
                  0
                  
                  
                  $
                  0
                  
                  
                  $
                  0EXPENSESProfessional
      fees
                  
                  
                  2,100
                  
                  
                  
                  2,200
                  
                  
                  
                  3,100
                  
                  
                  
                  2,200
                  
                  
                  
                  22,545General
      and administrative expenses
                  
                  
                  500
                  
                  
                  
                  567
                  
                  
                  
                  500
                  
                  
                  
                  579
                  
                  
                  
                  2,019TOTAL
      EXPENSES
                  
                  
                  2,600
                  
                  
                  
                  2,767
                  
                  
                  
                  3,600
                  
                  
                  
                  2,779
                  
                  
                  
                  24,564LOSS
      FROM OPERATIONS
                  
                  
                  (2,600
                  )
                  
                  
                  (2,767
                  )
                  
                  
                  (3,600
                  )
                  
                  
                  (2,779
                  )
                  
                  
                  (24,564
                  )OTHER
      EXPENSESInterest
      expense
                  
                  
                  436
                  
                  
                  
                  (227
                  )
                  
                  
                  796
                  
                  
                  
                  (453
                  )
                  
                  
                  2,932LOSS
      BEFORE PROVISION FOR INCOME TAXES
                  
                  
                  (3,036
                  )
                  
                  
                  (2,994
                  )
                  
                  
                  (4,396
                  )
                  
                  
                  (3,232
                  )
                  
                  
                  (27,496
                  )PROVISION
      FOR INCOME TAXES
                  
                  
                  0
                  
                  
                  
                  0
                  
                  
                  
                  0
                  
                  
                  
                  0
                  
                  
                  
                  0NET
      LOSS
                  
                  $
                  (3,036
                  )
                  
                  $
                  (2,994
                  )
                  
                  $
                  (4,396
                  )
                  
                  $
                  (3,232
                  )
                  
                  $
                  (27,496
                  )NET
      LOSS PER SHARE: BASIC AND DILUTED
                  
                  $
                  (0.00
                  )
                  
                  $
                  (0.00
                  )
                  
                  $
                  (0.00
                  )
                  
                  $
                  (0.00
                  )WEIGHTED
      AVERAGE NUMBER OF SHARES OUTSTANDING: BASIC AND DILUTED
                  
                  
                  1,000,000
                  
                  
                  
                  1,000,000
                  
                  
                  
                  1,000,000
                  
                  
                  
                  1,000,000
  See
accompanying notes to financial statements.
 
 F-2
  DRC
VENTURES, INC.
 (A
DEVELOPMENT STAGE COMPANY)
 STATEMENT
OF STOCKHOLDERS’ DEFICIT (unaudited)
 PERIOD
FROM APRIL 15, 2008 (INCEPTION) TO DECEMBER 31, 2010
 
 Common Stock
                  
                  
                  Stock
                    subscription
                  
                  
                  Deficit
                    accumulated
                    during the
                    developmentShares
                  
                  
                  Amount
                  
                  
                  receivable
                  
                  
                  stage
                  
                  
                  TotalInception,
      April 15, 2008
                  
                  
                  0
                  
                  
                  $
                  0
                  
                  
                  $
                  0
                  
                  
                  $
                  0
                  
                  
                  $
                  0Issuance
      of common stock to founders for stock subscription receivable @
      $.0001
                  
                  
                  1,000,000
                  
                  
                  
                  100
                  
                  
                  
                  (100
                  )
                  
                  
                  -
                  
                  
                  
                  0Net
      loss for the period ended June 30, 2008
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  (9,195
                  )
                  
                  
                  (9,195
                  )Balance,
      June 30, 2008
                  
                  
                  1,000,000
                  
                  
                  
                  100
                  
                  
                  
                  (100
                  )
                  
                  
                  (9,195
                  )
                  
                  
                  (9,195
                  )Net
      loss for the year ended June 30, 2009
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  (3,763
                  )
                  
                  
                  (3,763
                  )Balance,
      June 30, 2009
                  
                  
                  1,000,000
                  
                  
                  
                  100
                  
                  
                  
                  (100
                  )
                  
                  
                  (12,958
                  )
                  
                  
                  (12,958
                  )Net
      loss for the year ended June 30, 2010
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  (10,142
                  )
                  
                  
                  (10,142
                  )Balance,
      June 30, 2010
                  
                  
                  1,000,000
                  
                  
                  
                  100
                  
                  
                  
                  (100
                  )
                  
                  
                  (23,100
                  )
                  
                  
                  (23,100
                  )Cash
      received for stock subscription receivable
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  100
                  
                  
                  
                  -
                  
                  
                  
                  100Net
      loss for the six months ended December 31, 2010
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  (4,396
                  )
                  
                  
                  (4,396
                  )Balance,
      December 31, 2010
                  
                  
                  1,000,000
                  
                  
                  $
                  100
                  
                  
                  $
                  0
                  
                  
                  $
                  (27,496
                  )
                  
                  $
                  (27,396
                  )
  See
accompanying notes to financial statements.
  F-3
 
 DRC
VENTURES, INC.
 (A
DEVELOPMENT STAGE COMPANY)
 STATEMENTS
OF CASH FLOWS (unaudited)
 FOR
THE SIX MONTHS ENDED DECEMBER 31, 2010 AND 2009
 PERIOD
FROM APRIL 15, 2008 (INCEPTION) TO DECEMBER 31, 2010
 
 Six months
                    ended December
                    31, 2010
                  
                  
                  Six months
                    ended December
                    31, 2009
                  
                  
                  Period from
                    April 15, 2008
                    (Inception) to
                    December 31,
                    2010CASH
      FLOWS FROM OPERATING ACTIVITIESNet
      loss for the period
                  
                  $
                  (4,396
                  )
                  
                  $
                  (3,232
                  )
                  
                  $
                  (27,496
                  )Change
      in non-cash working capital items:Changes
      in assets and liabilities:Increase
      (decrease) in accrued expenses
                  
                  
                  (1,850
                  )
                  
                  
                  0
                  
                  
                  
                  1,900Increase
      in accrued interest – related party
                  
                  
                  796
                  
                  
                  
                  453
                  
                  
                  
                  2,932CASH
      FLOWS USED BY OPERATING ACTIVITIES
                  
                  
                  (5,450
                  )
                  
                  
                  (2,779
                  )
                  
                  
                  (22,664
                  )CASH
      FLOWS FROM FINANCING ACTIVITIESLoans
      received from related party
                  
                  
                  5,350
                  
                  
                  
                  2,270
                  
                  
                  
                  22,565Proceeds
      from sales of common stock
                  
                  
                  100
                  
                  
                  
                  0
                  
                  
                  
                  100NET
      CASH PROVIDED BY FINANCING ACTIVITIES
                  
                  
                  5,450
                  
                  
                  
                  2,270
                  
                  
                  
                  22,665NET
      INCREASE (DECREASE) IN CASH
                  
                  
                  0
                  
                  
                  
                  (509
                  )
                  
                  
                  1Cash,
      beginning of period
                  
                  
                  1
                  
                  
                  
                  520
                  
                  
                  
                  0Cash,
      end of period
                  
                  $
                  1
                  
                  
                  $
                  11
                  
                  
                  $
                  1SUPPLEMENTAL
      CASH FLOW INFORMATION:Interest
      paid
                  
                  $
                  0
                  
                  
                  $
                  0
                  
                  
                  $
                  0Income
      taxes paid
                  
                  $
                  0
                  
                  
                  $
                  0
                  
                  
                  $
                  0SUPPLEMENTAL
      NON-CASH INVESTING AND FINANCING ACTIVITIES:Shares
      issued for subscription receivable
                  
                  $
                  0
                  
                  
                  $
                  0
                  
                  
                  $
                  100
  See
accompanying notes to financial statements.
  F-4
 
 DRC
VENTURES, INC.
 (A
DEVELOPMENT STAGE COMPANY)
 NOTES
TO THE FINANCIAL STATEMENTS
 DECEMBER
31, 2010
 
 NOTE
1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 
 Nature of
Business
 DRC
Ventures, Inc. (“DRC Ventures” and the “Company”) was organized under the laws
of the State of Nevada on April 15, 2008 as a corporation. The
Company’s objective is to acquire or merge with a target business or company in
a business combination.
 
 Development Stage
Company
 The
accompanying financial statements have been prepared in accordance with
generally accepted accounting principles related to development-stage
companies.  A development-stage company is one in which planned
principal operations have not commenced or if its operations have commenced,
there has been no significant revenues there from.
 
 Basis of
Presentation
 The
financial statements of the Company have been prepared in accordance with
generally accepted accounting principles in the United States of America and are
presented in US dollars.
 
 Accounting
Basis
 The
Company uses the accrual basis of accounting and accounting principles generally
accepted in the United States of America (“GAAP” accounting).  The
Company has adopted a June 30 fiscal year end.
 
 Cash and Cash
Equivalents
 DRC
Ventures considers all highly liquid investments with maturities of three months
or less to be cash equivalents.  At December 31, 2010 and June 30,
2010, the Company had $1 of cash.
 
 Fair Value of Financial
Instruments
 The
Company’s financial instruments consist of cash and cash equivalents, accrued
expenses, accrued interest – related party and loans payable to a related party.
The carrying amount of these financial instruments approximates fair value due
either to length of maturity or interest rates that approximate prevailing
market rates unless otherwise disclosed in these financial
statements.
 
 Income
Taxes
 Income
taxes are computed using the asset and liability method.  Under the
asset and liability method, deferred income tax assets and liabilities are
determined based on the differences between the financial reporting and tax
bases of assets and liabilities and are measured using the currently enacted tax
rates and laws.  A valuation allowance is provided for the amount of
deferred tax assets that, based on available evidence, are not expected to be
realized.
 
 Use of
Estimates
 The
preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date the financial statements and the
reported amount of revenues and expenses during the reporting
period.  Actual results could differ from those
estimates.
 
 Revenue
Recognition
 The
Company recognizes revenue when products are fully delivered or services have
been provided and collection is reasonably assured.
 
 Basic Income (Loss) Per
Share
 Basic
income (loss) per share is calculated by dividing the Company’s net loss
applicable to common shareholders by the weighted average number of common
shares during the period. Diluted earnings per share is calculated by dividing
the Company’s net income available to common shareholders by the diluted
weighted average number of shares outstanding during the year. The diluted
weighted average number of shares outstanding is the basic weighted number of
shares adjusted for any potentially dilutive debt or equity. There are no such
common stock equivalents outstanding as of December 31, 2010.
  F-5
 
 DRC
VENTURES, INC.
 (A
DEVELOPMENT STAGE COMPANY)
 NOTES
TO THE FINANCIAL STATEMENTS
 DECEMBER
31, 2010
 
 NOTE
1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
 
 Stock-Based
Compensation
 Stock-based
compensation is accounted for at fair value in accordance with ASC Topic
718.  To date, the Company has not adopted a stock option plan and has
not granted any stock options. As of December 31, 2010, the Company has not
issued any stock-based payments to its employees.
 
 Recent Accounting
Pronouncements
 DRC
Ventures does not expect the adoption of recently issued accounting
pronouncements to have a significant impact on the Company’s results of
operations, financial position or cash flow.
 
 NOTE
2 – ACCRUED EXPENSES
 
 Accrued
expenses at December 31, 2010 and June 30, 2010 consisted of amounts owed to the
Company’s outside independent auditors.
 
 NOTE
3 – LOAN PAYABLE – RELATED PARTY
 
 The
Company has signed a series of promissory notes with a related
party.  The total amount of the loans outstanding was $22,565 and
$17,215 as of December 31, 2010 and June 30, 2010, respectively. The loans are
payable upon demand, bear 8% interest and are unsecured.
 
 Accrued
interest on the above loans was $2,932 and $2,136 as of December 31, 2010 and
June 30, 2010.
 
 NOTE
4 – COMMON STOCK
 
 The
Company has 100,000,000 shares of $0.0001 par value common stock
authorized.
 
 During
the period ended June 30, 2008, the Company issued 1,000,000 shares of common
stock to its founders for a subscription receivable of $100. The receivable was
paid in the quarter ended December 31, 2010.
 
 As of
December 31, 2010 and June 30, 2010 there were 1,000,000 shares of common stock
issued and outstanding.
 
 The
Company also has 10,000,000 shares of $0.0001 par value preferred stock
authorized.
 
 As of
December 31, 2010 and June 30, 2010 there were 0 shares of preferred stock
issued and outstanding.
 
 NOTE
5 – INCOME TAXES
 
 As of
December 31, 2010, the Company had net operating loss carry forwards of
approximately $27,500 that may be available to reduce future years’ taxable
income through 2030. Future tax benefits which may arise as a result of these
losses have not been recognized in these financial statements, as their
realization is determined not likely to occur and accordingly, the Company has
recorded a valuation allowance for the deferred tax asset relating to these tax
loss carry-forwards.
 
 The
provision for Federal income tax consists of the following:
 
 December 31,
                      2010Federal
      income tax benefit attributable to:Current
      Operations
                    
                    $
                    1,495Less:
      valuation allowance
                    
                    
                    (1,495
                    )Net
      provision for Federal income taxes
                    
                    $
                    0
  F-6
 
 DRC
VENTURES, INC.
 (A
DEVELOPMENT STAGE COMPANY)
 NOTES
TO THE FINANCIAL STATEMENTS
 DECEMBER
31, 2010
  NOTE
5 – INCOME TAXES (CONTINUED)
 
 As of
December 31, 2010, the Company had net operating loss carry forwards of
approximately $27,500 that may be available to reduce future years’ taxable
income through 2030. Future tax benefits which may arise as a result of these
losses have not been recognized in these financial statements, as their
realization is determined not likely to occur and accordingly, the Company has
recorded a valuation allowance for the deferred tax asset relating to these tax
loss carry-forwards.
 
 The
provision for Federal income tax consists of the following:
 
 December 31,
                      2010Federal
      income tax benefit attributable to:Current
      Operations
                    
                    $
                    1,495Less:
      valuation allowance
                    
                    
                    (1,495
                    )Net
      provision for Federal income taxes
                    
                    $
                    0
 
 The
cumulative tax effect at the expected rate of 34% of significant items
comprising our net deferred tax amount is as follows:
 
 December 31,
                      2010
                    
                    
                    June 30, 2010Deferred
      tax asset attributable to:Net
      operating loss carryover
                    
                    $
                    9,350
                    
                    
                    $
                    7,854Less:
      valuation allowance
                    
                    
                    (9,350
                    )
                    
                    
                    (7,854
                    )Net
      deferred tax asset
                    
                    $
                    0
                    
                    
                    $
                    0
 
 Due to
the change in ownership provisions of the Tax Reform Act of 1986, net operating
loss carry forwards of $27,500 for Federal income tax reporting purposes are
subject to annual limitations. Should a change in ownership occur net operating
loss carry forwards may be limited as to use in future years.
 
 NOTE
6 – LIQUIDITY AND GOING CONCERN
  DRC
Ventures has negative working capital, has incurred losses since inception, and
has not yet received revenues from sales of products or
services.  These factors create substantial doubt about the Company’s
ability to continue as a going concern.  The financial statements do
not include any adjustment that might be necessary if the Company is unable to
continue as a going concern.
  The
ability of DRC Ventures to continue as a going concern is dependent on the
Company generating cash from the sale of its common stock and/or obtaining debt
financing and attaining future profitable operations.  Management’s
plans include selling its equity securities and obtaining debt financing to fund
its capital requirement and ongoing operations; however, there can be no
assurance the Company will be successful in these efforts.
 
 NOTE
7 – COMMITMENTS AND CONTINGENCIES
 
 The
Company neither owns nor leases any real or personal property. An officer has
provided office services without charge.  There is no obligation for
the officer to continue this arrangement.  Such costs are immaterial
to the financial statements and accordingly are not reflected
herein.  The officers and directors are involved in other business
activities and most likely will become involved in other business activities in
the future.
 
 NOTE
8 – SUBSEQUENT EVENTS
 
 Management
has evaluated subsequent events through February 10, 2011, the date these
financial statements were issued, and has determined it does not have any
material subsequent events to disclose.
  F-7




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





Overview.





DRC
Ventures, Inc. (“we”, “us” or the “Company”) was organized in the State of
Nevada on April 15, 2008.  We are a developmental stage company and
have not generated any revenues to date.  We were organized to serve
as a vehicle for a business combination through a capital stock exchange,
merger, reverse acquisition, asset acquisition or other similar business
combination (a “Business Combination”) with an operating or development stage
business (the “Target Business”) which desires to utilize our status as a
reporting company under the Securities Exchange Act of 1934, as amended (the
“Exchange Act”).   We are in the process of identifying and
evaluating targets for a Business Combination.  We are not presently
engaged in, and will not engage in, any substantive commercial business
operations unless and until we consummate a Business Combination.





Our
management has broad discretion with respect to identifying and selecting a
prospective Target Business.  We have not established any specific
attributes or criteria (financial or otherwise) for prospective Target
Businesses.  Our sole officer and director has never served as an
officer or director of a development stage public company with the business
purpose of entering into a transaction such as that contemplated by our
Company.  Accordingly, he may not successfully identify a Target
Business or conclude a Business Combination.





We cannot assure you that we will be
successful in concluding a Business Combination.  We will not realize
any revenues or generate any income unless and until we successfully merge with
or acquire an operating business that is generating revenues and otherwise is
operating profitably.  Moreover, we can offer no guarantee that the Company
will achieve long-term or immediate short-term earnings from any Business
Combination.





Any
entity with which we consummate a Business Combination will be subject to
numerous risks in connection with its operations.  To the extent we
affect a Business Combination with a financially unstable company or an entity
in its early stage of development or growth, including entities without
established records of sales or earnings, we may be affected by numerous risks
inherent in the business and operations of financially unstable and early stage
or potential emerging growth companies.  If we consummate a Business
Combination with a foreign entity, we will be subject to all of the risks
attendant to foreign operations.  Although our management will
endeavor to evaluate the risks inherent in a particular Target Business, we
cannot assure you that we will properly ascertain or assess all significant risk
factors.





We expect
that in connection with any Business Combination, we will issue a significant
number of shares of our common stock (equal to at least 80% of the total number
of shares outstanding after giving effect to the transaction and likely a
significantly higher percentage) in order to ensure that the Business
Combination qualifies as a tax-free transaction under federal tax
laws.  The issuance of additional shares of our capital stock
will:




·
            significantly
      reduce the equity interest of our stockholders prior to the transaction;
      and





·
            cause
      a change in control and likely result in the resignation or removal of our
      present officers and directors.





Our
management anticipates that our Company likely will affect only one Business
Combination, due primarily to our financial resources and the dilution of
interest for present and prospective stockholders, which is likely to occur as a
result of our management's plan to offer a controlling interest to a Target
Business in order to achieve a tax-free reorganization.  This lack of
diversification should be considered a substantial risk in investing in us
because it will not permit us to offset potential losses from one venture
against potential gains from another.


3





Liquidity and Capital
Resources.





At
December 31, 2010, we had a de minimus amount of cash on hand.  Our
available cash will not be sufficient to cover our operating costs and expenses
over the next twelve months which we anticipate will comprise costs and expenses
in connection with the preparation and filing of reports under the Exchange Act,
the identification and evaluation of targets for a Business Combination and,
possibly, a Business Combination, and we will require funds
therefor.  Over the next twelve months, we estimate that we will incur
costs and expenses in connection with the preparation and filing of reports
under the Exchange Act of approximately $15,000.  We are unable to
provide an estimate of the costs we may incur in connection with identifying and
evaluating Targets Businesses or costs we may incur in connection with entering
into a Business Combination given the multitude of variables associated with
such activities.





To date,
we have funded our operations through loans from our stockholders and, as of
December 31, 2010, we had borrowed an aggregate of $22,565 from them, including
$5,350 during the six months then ended.  Our stockholders have
advised orally us that they present intend to fund additional costs and expenses
that we will incur through loans or further investment in the Company, as and
when necessary.  However, our stockholders are under no obligation to
provide such funding.





We cannot
provide investors with any assurance that we will have sufficient capital
resources to identify a suitable Target Business, to conduct effective due
diligence as to any Target Business or to consummate a Business
Combination.  As a result of our negative working capital, our losses
since inception, and failure to generate revenues from operations, our financial
statements include a note in which our auditor has expressed doubt about our
ability to continue as a "going concern."





Results of
Operations.





Since our
inception, we have not generated any revenues.  We reported a net loss
for the three months ended December 31, 2010 of $3,036 and a net loss since
inception of $27,496.  The Company has used cash from operations of
$22,664 since its inception, consisting primarily of professional fees, and has
a negative working capital of $27,396 at December 31, 2010.





We do not
expect to engage in any activities, other than seeking to identify a Target
Business, unless and until such time as we enter into a Business Combination
with a Target Business, if ever.  We cannot provide investors with any
assessment as to the nature of a Target Business’s operations or speculate as to
the status of its products or operations, whether at the time of the Business
Combination it will be generating revenues or its future prospects.





Item
3. Quantitative and Qualitative Disclosures about Market Risk.





Not applicable.





Item
4(T). Controls and Procedures.





Evaluation
of Disclosure Controls and Procedures





As of
December 31, 2010, the Company’s management carried out an evaluation, under the
supervision and with the participation of the Company’s Chief Executive Officer,
who is the Company’s principal executive officer and principal financial
officer, of the effectiveness of the design and operation of the Company’s
disclosure controls and procedures (as defined in Rules 13a-15 and 15d-15 under
the Exchange Act), pursuant to Exchange Act Rule 13a-15. Based on such
evaluation, the Company’s Chief Executive Officer has concluded that the
Company's disclosure controls and procedures were effective.




Changes
in Internal Controls





There
have been no changes in the Company’s internal control over financial reporting
(as defined in Rules 13a-15 and 15d-15 under the Exchange Act) during the three
months ended December 31, 2010 that have materially affected, or are reasonably
likely to materially affect, the Company’s internal control over financial
reporting.





PART
II — OTHER INFORMATION





Item
1. Legal Proceedings.





The
Company is not a party to any legal proceeding or litigation.


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Item
1A. Risk Factors.





Smaller
reporting companies are not required to provide the information required by this
item.





Item
2. Unregistered Sales of Equity Securities and Use of Proceeds.





(a) During
the three months ended December 31, 2010, the Company did not issue any
securities.





(b) Not
applicable.





(c)
During the three months ended December 31, 2010, neither the issuer nor any
"affiliated purchaser," as defined in Rule 10b-18(a)(13), purchased any shares
or other units of any class of the issuer's equity securities.





Item
3. Defaults Upon Senior Securities.





None.





Item
4. (Removed and Reserved)





Item
5. Other Information.





(a) None.





(b) The Company has not adopted any
procedures by which security holders may recommend nominees to the registrant's
board of directors.





Item
6. Exhibits.





Exhibit
              Description31.1
              Certification
      of the Company’s Principal Executive Officer and Principal Financial
      Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, with
      respect to the registrant’s Quarterly Report on Form 10-Q for the quarter
      ended December 31, 2010.32.1*
              Certification
      of the Company’s Principal Executive Officer and Principal Financial
      Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section
      906 of the Sarbanes Oxley Act of
2002.





*  Pursuant
to Commission Release No. 33-8238, this certification will be treated as
“accompanying” this Quarterly Report on Form 10-Q and not “filed” as part of
such report for purposes of Section 18 of the Securities Exchange Act of
1934, as amended, or otherwise subject to the liability of Section 18 of
the Securities Exchange Act of 1934, as amended, and this certification will not
be deemed to be incorporated by reference into any filing under the Securities
Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended,
except to the extent that the registrant specifically incorporates it by
reference.





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SIGNATURES





Pursuant
to the requirements of the Securities Exchange Act of 1934, as amended, the
Registrant has duly caused the Report to be signed on its behalf by the
undersigned thereunto duly authorized.





DRC
      VENTURES, INC.Dated:
      February 11, 2011
                  By:
                  /s/ Ronald
      WilliamsName:
                  Ronald
      WilliamsTitle:
                  President,
      Principal Executive Officer
                    and
      Principal Financial
Officer




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