ARX Gold Corp - FORM 10-Q - September 15, 2011

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EXCEL - IDEA: XBRL DOCUMENT - ARX Gold Corp	Financial_Report.xls
EX-32 - CERTIFICATION - ARX Gold Corp	daulton_10q-ex32.htm
EX-31.2 - CERTIFICATION - ARX Gold Corp	daulton_10q-ex3102.htm
EX-31.1 - CERTIFICATION - ARX Gold Corp	daulton_10q-ex3101.htm

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 July 31, 2011

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

For the transition period from _______________ to ______________.

DAULTON CAPITAL CORP.

(Exact name of Registrant as specified in its charter)

Nevada		333-152002		30-0459858
(State or other jurisdiction of incorporation)		(Commission File No.)		(IRS Employer Identification No.)

3960 Howard Hughes Parkway, Suite 500, Las Vegas, Nevada 89169

(Address of principal executive offices, including Zip Code)

Registrant's telephone number, including area code: (888) 387-1403

N/A

(Former name or former address 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) had been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark whether the Registrant is a large accelerated filer, and 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. (Check One):

	Large accelerated filer o	Accelerated filer o

	Non-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 Exchange Act Rule 12b-2 of the Exchange Act). Yes o No x

Class of Stock	No. Shares Outstanding	Date

Common	60,240,003	July 31, 2011

Daulton Capital Corporation

(An Exploration Stage Company)

Notes to Financial Statements

July 31, 2011

(Unaudited)

		PAGE
PART I.	FINANCIAL INFORMATION

Item 1.	Financial Statements	1

	Consolidated Balance Sheet as of July 31, 2011 (unaudited)	1

	Consolidated Statement of Operations for the period ending July 31, 2011 (unaudited)	2

	Consolidated Statement of Cash Flows for the period ending July 31, 2011 (unaudited)	3

	Consolidated Statement of Shareholders’ Deficit for the period ending July 31, 2011 (unaudited)	4

	Notes to Consolidated Financial Statements (unaudited)	5

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	10

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	15

Item 4.	Controls and Procedures	15

PART II.	OTHER INFORMATION	18

Item 1.	Legal Proceedings	18

Item 1A.	Risk Factors	18

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	18

Item 3.	Defaults Upon Senior Securities	18

Item 4.	(Removed and Reserved).	18

Item 5.	Other Information	18

Item 6.	Exhibits	18

	Signatures	19

PART I – FINANCIAL INFORMATION

ITEM 1. Financial Statements

DAULTON CAPITAL CORPORATION

(An Exploration Development Stage Company)

Balance Sheet

as at

ASSETS
	July 31,			April 30,
	2011			2011
	(Unaudited)
Current Assets
Cash and Cash Equivalents	$	16		$	4,199

Other Assets
Mineral Propery Interest		35,000			-

TOTAL ASSETS	$	35,016		$	4,199

LIABILITIES & STOCKHOLDERS' EQUITY

Current Liabilities
Officer Loan		105,492			90,492
Stockholder Loan		35,000			-

		140,492			90,492

Commitments and contingencies (Note 5)

Stockholders' Equity
Preferred Stock, $0.001 par value, 5,000,000 shares authorized; none outstanding as at July 31, 2011 and April 30, 2011.
Common Stock, $0.001 par value, 200,000,000 shares authorized, 60,240,003 shares issued and outstanding as at July 31, 2011 60,240,003 shares issued and outstanding as at April 30, 2011		60,240			60,240
Additional paid-in capital		896,761			896,761
Subscriptions received		23,000			3,000
Deficit accumulated in the development stage		(1,085,477	)		(1,046,294	)

Total Stockholders' Equity		(105,476	)		(86,293	)

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	35,016		$	4,199

DAULTON CAPITAL CORPORATION

(An Exploration Stage Company)

Statement of Operations

(Unaudited)

							For the period
							of Inception,
							from Jan. 8,
	For the 3 months ended						2008 through
	July 31,						July 31,
	2011			2010			2011

Revenues
Crude Oil Production	$	-		$	-		$	17,189

Costs and Expenses
Mining Exploration		-			-			40,203
Salary & Wages		-			-			45,000
Consulting		20,000			-			267,664
Professional Fees		14,450			2,350			100,556
Occupancy Expense		-			996			13,745
Stock Transfer Fees		616			1,386			12,296
Abandonment Loss		-			-			385,000
Impairment of oil and gas leases		-			-			190,000
Other General & Administrative		4,117			3,985			48,202
Total Expenses		39,183			8,717			1,102,666

Operating Loss		(39,183	)		(8,717	)		(1,085,477	)

Net Income (Loss)	$	(39,183	)	$	(8,717	)	$	(1,085,477	)

Net Income (Loss) per share, basic and diluted	$	(0.001	)	$	(0.000	)

Weighted average number of shares outstanding, basic and diluted		57,600,000			57,600,000

DAULTON CAPITAL CORPORATION

(An Exploration Stage Company)

Statement of Cash Flows

(Unaudited)

							For the period
							of Inception,
							from Jan. 8,
	For the 3 months ended						2008 through
	July 31,						July 31,
	2011			2010			2011

Cash Flows From Operating Activities
Net Income (Loss)	$	(39,183	)	$	(8,717	)	$	(1,085,477	)
Adjustments to reconcile net loss to net cash used by operating activities:
Non-cash issue of stock for services								178,500
Change in operating assets and liabilities:
Subscriptions Received		-			-			-
Net Cash provided by (used by) operating activities		(39,183	)		(8,717	)		(906,977	)

Cash Flows From Investing activities
Mineral Property Interest		(35,000	)					(35,000	)
Purchase of mining leases								(240,000	)
Abandonment of oil and gas leases								665,000
Net Cash (used by) Investing Activities		(35,000	)		-			390,000

Cash Flows From Financing Activities
Proceeds from the sale of Stock								164,054
Subscriptions Received		20,000			6,000			185,000
Proceeds of loans from officers		15,000						105,492
Proceeds of loans from stockholders		35,000						35,000
Contribution of capital								27,447
Net Cash provided by Financing Activities		70,000			6,000			516,993

Net Increase (Decrease) in Cash		(4,183	)		(2,717	)		16

Cash at beginning of period		4,199			10,764			-

Cash at end of period	$	16		$	8,047		$	16

Cash Paid For:
Interest	$	-		$	-		$	-
Income Taxes	$	-		$	-		$	-

DAULTON CAPITAL CORPORATION

(An Exploration Stage Company)

Statement of Stockholders' Equity (Deficit)

For the period from Inception, January 8, 2008, to July 31, 2011

(Unaudited)

											Accumulated
					Sub-			Additional			Deficit During
	Common Stock				scriptions			Paid-in			Exploration
	Shares		Amount		Received			Capital			Stage			Total

Balances at Inception, January 8, 2008		-	$	-	$	-		$	-		$	-		$	-
Common stock issued for cash on Jan. 14, 2008 at $0.098		28,800,000		28,800					(11,223	)					17,577
Common stock issued for cash on Feb. 21, 2008 at $0.0977		24,000,000		24,000					122,477						146,477
Net loss for the period												(11,594	)		(11,594	)

Balances at April 30, 2008		52,800,000	$	52,800	$	-		$	111,254		$	(11,594	)	$	152,460
Common stock issued for purchase of a working interest in wells at $0.30 per share Oct.16, 2008		4,800,000		4,800					85,200						90,000
Net loss for the year												(51,710	)		(51,710	)

Balances at April 30, 2009		57,600,000	$	57,600	$	-		$	196,454		$	(63,304	)	$	190,750
Capital contributed Dec. 31, 2010									12,447						12,447
Subscriptions Received for common stock Nov. 2009 to March, 2010						89,000									89,000
Net loss for the year												(276,925	)		(276,925	)

Balances at April 30, 2010		57,600,000	$	57,600	$	89,000		$	208,901		$	(340,229	)	$	15,272
Common stock issued for services September 14, 2010 at $0.21		850,000		850					177,650						178,500
Shares issued at $0.32 as partial consideration in acquisition of mineral lease Nov. 15, 2010		750,000		750					239,250						240,000
Common stock issued for subscriptions December 3, 2010 at $0.30 per sh.		33,334		33		(10,000	)		9,967						-
Director contributed his loan to the Company, Dec.15, 2010									15,000						15,000
Subscriptions received for common stock Dec.22, 2010						76,000									76,000
Shares issued at $0.19 as partial consideration in acquisition of mineral lease Jan. 13, 2011		500,000		500					94,500						95,000
Common stock issued for subscriptions March 11, 2011 at $0.30 per sh.		506,669		507		(152,000	)		151,493
Net loss for the year												(706,065	)		(706,065	)

Balances at April 30, 2011		60,240,003	$	60,240	$	3,000		$	896,761		$	(1,046,294	)	$	(86,293	)
Subscriptions received for common stock May 11, 2011					$	20,000								$	20,000
Net loss for the three months												(39,183	)		(39,183	)

Balances at July 31, 2011		60,240,003		60,240		23,000			896,761			(1,085,477	)		(105,476	)

Daulton Capital Corporation

(An Exploration Stage Company)

Notes to Financial Statements

July 31, 2011

(Unaudited)

1.	Basis of Presentation and Nature of Operations

These unaudited interim financial statements as of and for the three months ended July 31, 2011 reflect all adjustments which, in the opinion of management, are necessary to present fairly the financial position, results of operations and cash flows for the period presented in accordance with the accounting principles generally accepted in the United States of America. All adjustments are of a normal recurring nature.

These unaudited interim financial statements should be read in conjunction with the Company’s financial statements and notes thereto included in the Company’s April 30, 2011 report. The Company assumes that the users of the interim financial information herein have read, or have access to, the audited financial statements for the preceding period, and that the adequacy of additional disclosure needed for a fair presentation may be determined in that context. The results of operations for the three month period ended July 31, 2011 are not necessarily indicative of results for the entire year ending April 30, 2012.

Organization

Daulton Capital Corporation (the “Company”) was incorporated under the laws of the State of Nevada January 8, 2008. The Company was organized for the purpose of engaging in any activity or business not in conflict with the laws of the State of Nevada or of the United States of America. The company became engaged in the oil and gas industry.

Current Business of the Company

Mayberry No. 1. In February, 2008, the Company purchased a 20% working interest /16% Net Revenue Interest in a producing oil well known at Mayberry No. 1, located in an oil and gas leasehold estate in Creek County, Oklahoma. In June, 2008 SemCrude, Inc., the collector of the oil produced by the well, reported bankruptcy under Chapter 11 of the Bankruptcy Code. Payments to the Company for oil sold have been suspended.

Glencoe Wells. On July 30, 2008, the Company purchased a 5% working interest / 4% net revenue interest in six oil wells known as the Glencoe Wells located in an oil and gas leasehold estate in Pawnee County, Oklahoma. The purchase was paid in restricted common stock. Volumetric calculations of the wells were not performed.

Property Acquisition Costs:

	Unproved
Mayberry No. 1 well	$	100,000
Glencoe Wells		90,000
	$	190,000

Impairment of the Mayberry and Glencoe interests was considered under FASB ASC Topic 360. Future cash flows from and beyond probable reserves was considered to be zero. The wells were considered 100% impaired in April, 2010 and written down accordingly.

Ballarat and Hunker Mineral Claims. In February, 2010, the Company entered into option agreements with an individual, Shawn Ryan, for the purchase of two groups of mining claims in the Yukon Territory, Canada, known as the Ballarat Property and the Hunker Project. The Ballarat Property consisted of 38 mineral claims covering 1900 acres and the Hunker Project consists of 121 mineral claims covering 6,000 acres in known gold producing areas. The option on the Ballarat Property required making staged cash payments and issuing common shares of the company. The Company incurred $40,203 exploration expenses during the prior year, consisting of soil sampling. The first payments of $25,000 due for each option were paid. The Company defaulted on the second annual combined payment of $125,000, which was due February 15, 2011. On April 29, 2011 the Company signed a letter of termination, releasing its interest in the mineral options.

Papua New Guinea Mining Claim. On April 18, 2011, the Company entered into an agreement with South Pacific Connection, a Papua, New Guinea corporation, to purchase an 80% working interest in a mining claim in Papua, New Guinea for $35,000 and 2,500,000 restricted common shares. The $35,000 was paid. Stock is to be issued in stages over five years. The agreement requires the Company to make $3,400,000 capital expenditures over five years.

2.	Summary of Significant Accounting Policies

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements, and reported amounts of revenue and expenses during the reporting period. Actual results could differ materially from those estimates. Significant estimates made by management are, among others, reliability of long-lived assets, deferred taxes and stock option valuation.

Cash and equivalents

Cash and equivalents include investments with initial maturities of three months or less.

Fair Value of Financial Instruments

The Financial Accounting Standards Board issued Statement of Financial Accounting Standards (“SFAS”) No. 107, “Disclosures About Fair Value of Financial Instruments.” SFAS No. 107 requires disclosure of fair value information about financial instruments when it is practicable to estimate that value. The carrying amounts of the Company’s financial instruments as of July 31, 2011 approximate their respective fair values, because of the short-term nature of these instruments. Such instruments normally consist of cash, accounts payable and prepaid expenses.

Income Taxes

The Company utilizes FASB ACS 740, “Income Taxes,” which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred tax assets and liabilities are determined based on the difference between the tax basis of assets and liabilities and their financial reporting amounts based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. A valuation allowance is recorded when it is “more likely-than-not” that a deferred tax asset will not be realized.

The Company generated a deferred tax credit through net operating loss carryforward. However, a valuation allowance of 100% has been established. The Company has a Net Operating Loss of approximately $732,000 as at July 31, 2011, which can be utilized to offset taxable income for the following 20 years, unless utilized first.

Interest and penalties on tax deficiencies recognized in accordance with ACS accounting standards are classified as income taxes in accordance with ASC Topic 740-10-50-19.

Recent Accounting Pronouncements

Comprehensive Income — In June 2011, the Financial Accounting Standards Board (“FASB”) issued new guidance on the presentation of comprehensive income. Specifically, the new guidance allows an entity to present components of net income and other comprehensive income in one continuous statement, referred to as the statement of comprehensive income, or in two separate, but consecutive statements. The new guidance eliminates the current option to report other comprehensive income and its components in the statement of changes in equity. While the new guidance changes the presentation of comprehensive income, there are no changes to the components that are recognized in net income or other comprehensive income under current accounting guidance. This new guidance is effective for fiscal years and interim periods beginning after December 15, 2011. We do not believe our adoption of the new guidance will have an impact on our consolidated financial position, results of operations or cash flows.

Going Concern

The Company’s financial statements are prepared using accounting principles generally accepted in the United States of America applicable to a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has not yet established an ongoing source of revenues sufficient to cover its operating costs and to allow it to continue as a going concern. The company experienced a loss of $24,183 in the three months ended July 31, 2011 and $1,070,477 since inception, January 8, 2008. The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable. If the Company is unable to obtain adequate capital, it could be forced to cease development of operations.

The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish its plans to generate revenue from mining operations and oil and gas leases. The accompanying financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amount and classifications or liabilities or other adjustments that might be necessary should the Company be unable to continue as a going concern.

Exploration-Stage Company

The Company is considered an exploration-stage company, with limited operating revenues during the periods presented, as defined by Statement of Financial Accounting Standards (“SFAS”) No. 7. SFAS. No. 7 requires companies to report their operations, shareholders deficit and cash flows since inception through the date that revenues are generated from management’s intended operations, among other things. Management has defined inception as January 8, 2008. Since inception, the Company has incurred an operating loss of $1,070,477. The Company’s working capital has been generated through the sales of common stock and limited revenue from crude oil production. Management has provided financial data since January 8, 2008 in the financial statements, as a means to provide readers of the Company’s financial information to make informed investment decisions.

Basic and Diluted Net Loss Per Share

Net loss per share is calculated in accordance with FASB ASC 260, Earnings Per Share, for the period presented. ASC 260 requires presentation of basic earnings per share and diluted earnings per share. Basic income (loss) per share (“Basic EPS”) is computed by dividing net loss available to common stockholders by the weighted average number of common shares outstanding during the period. Diluted earnings per share (“Diluted EPS”) is similarly calculated. Dilution is computed by applying the treasury stock method. Under this method, options and warrants are assumed to be exercised at the beginning of the period (or at the time of issuance, if later), and as if funds obtained thereby were used to purchase common stock at the average market price during the period. As at July 31, 2011, there were no potentially dilutive securities.

The following is a reconciliation of the numerator and denominator of the basic and diluted earnings per share computations for the three months ended July 31, 2011 and 2010,

Numerator:

Basic and diluted net loss per share:	2011			2010

Net Loss	$	(24,183	)	$	(8,717	)

Denominator

Basic and diluted weighted average number of shares outstanding	60,240,000			57,600,000

Basic and Diluted Net Loss Per Share	$	(0.00	)	$	(0.00	)

Accounting for Oil and Gas Producing Activities

The company uses the successful efforts method of accounting for oil and gas producing activities. Under this method, acquisition costs for proved and unproved properties are capitalized when incurred.

Acquisition costs are capitalized when incurred pending the determination of whether a well has found proved reserves. A determination of whether a well has found proved reserves is made within a year of acquisition.

If after that year has passed, a determination that proved reserves exist cannot be made, the well is assumed to be impaired, and its costs are charged to expense. It’s costs can however, continue to be capitalized if a sufficient quantity of reserves are discovered in the well to justify its completion as a producing well and sufficient progress is made assessing the reserves and the well’s economic and operating feasibility. The impairment of unamortized capital costs is measured at a lease level and is reduced to fair value if it is determined that the sum of expected future net cash flows is less than the net book value.

The company determines if impairment has occurred through either adverse changes or as a result of the annual review of all fields. Development costs of proved oil and gas properties, including estimated dismantlement, restoration and abandonment costs and acquisition costs, are depreciated and depleted on a field basis by the units-of-production method using proved reserves, respectively.

The Costs of unproved oil and gas properties are generally combined and impaired over a period that is based on the average holding period for such properties and the company’s experience of successful operations.

Oil and Gas Revenue Recognition

The company applies the sales method of accounting for crude oil and natural gas revenue. Under this method, revenues are recognized based on the actual volume of crude oil and natural gas sold to purchasers. Revenue from the sale of oil and gas is reported by the oil/gas gathering company monthly and paid two months in arrears.

Accounts Receivable

The Company’s crude oil revenue is normally paid two months in arrears by the oil purchasing company. The purchasing company, SemCrude, petitioned for Chapter 11 bankruptcy in the fiscal year ended April 30, 2008. Revenue payments were suspended and the wells were shut in. The final payment was received in May, 2008. There have been no payments since. No receivables are recorded at July 31, 2011.

3.	Income Taxes

No provision was made for federal income tax for the three months ended July 31, 2011, since the Company had net operating loss.

Net operating loss carry-forwards may be used to reduce taxable income through the year 2031. The availability of the Company’s net operating loss carry-forwards are subject to limitation if there is a 50% or more positive change in the ownership of the Company’s stock.

The net operating loss carry-forward for federal and state income tax purposes is approximately $732,000, generating a Federal deferred tax credit of $292,800 as of July 31, 2011. An allowance of $292,800 has been established.

4.	Related Party Transactions

The Company has a payable to the Company’s chairman of $105,492. The loan carries no interest, is unsecured, due on demand and has no maturity.

5.	Stockholder Loan

The Company received a loan from a stockholder of $35,000 to effect the agreement signed April 18, 2011 for purchase of an interest in a mineral claim. The initial terms of the loan pending further negotiations are that it carries no interest, is unsecured, due on demand and has no maturity.

6.	Capital Structure

On May 11, 2011, $20,000 cash was received for subscriptions of common stock.

No stock was issued during the quarter ended July 31, 2011.

As at July 31, 2011, the Company was authorized to issue 200,000,000 shares of $0.001 par value common stock, of which 60,240,003 shares were issued and outstanding.

The Company was also authorized to issue 5,000,000 shares of preferred stock, of which none was issued and outstanding.

7.	Commitments and Contingencies

There were no commitments or contingencies in the three months ended July 31, 2011.

8.	Legal Proceedings

There were no legal proceedings against the Company with respect to matters arising in the ordinary course of business. Neither the Company nor any of its officers or directors is involved in any other litigation other than as creditors in the SemCrude bankruptcy proceeding, or is involved either as plaintiffs or defendants, and have no knowledge of any threatened or pending litigation against them or any of the officers or directors.

ITEM 2.

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

References in this Quarterly Report on Form 10-Q (this "Quarterly Report") to "we", "us", "our", "Registrant", "Issuer", "Company", "Daulton", mean Daulton Capital Corp., a Nevada Corporation, unless the context otherwise requires.

Forward-Looking Statements

This following information specifies certain forward-looking statements of our management. Forward-looking statements are statements that estimate the happening of future events and are not based on historical fact. Forward-looking statements may be identified by the use of forward-looking terminology, such as “may” “shall”, “could”, “expect”, “estimate”, “anticipate”, “predict”, “probable”, “possible”, “should”, “continue”, or similar terms, variations of those terms or the negative of those terms. The forward-looking statements specified in the following information have been compiled by our management on the basis of assumptions made by management and considered by management to be reasonable. Our future operating results, however, are impossible to predict, and no representation, guaranty, or warranty is to be inferred from those forward-looking statements.

Forward-looking statements include, but are not limited to, statements relating to our future business and financial performance, our competitive position and other material future developments that you may take into consideration.

We believe it is important to communicate our expectations to our shareholders. However, there may be events in the future that we are not able to accurately predict or over which we have no control.

You are cautioned not to place undue reliance on these forward-looking statements. The assumptions used for purposes of the forward-looking statements represent estimates of future events and are subject to uncertainty as to possible changes in economic, legislative, industry, and other circumstances. As a result, the identification and interpretation of data and other information and their use in developing and selecting assumptions from and among reasonable alternatives require the exercise of judgment. To the extent that the assumed events do not occur, the outcome may vary substantially from anticipated or projected results; accordingly, no opinion is expressed on the achievability of those forward-looking statements. We cannot guarantee that any of the assumptions relating to the forward-looking statements specified in the following information are accurate, and we assume no obligation to update any such forward-looking statements.

The following discussion of financial condition and results of operations should be read in conjunction with the consolidated financial statements and the notes to the consolidated financial statements, which are included elsewhere in this report.

Organizational History

We were incorporated in Nevada on January 8, 2008 with the intention of pursuing oil and gas exploration and development opportunities.

On February 15, 2008, we filed a Certificate of Amendment to increase our authorized stock into 50,000,000 shares of common stock, $0.001 par value and 5,000,000 shares of preferred stock, $0.001 par value.

On October 17, 2008, we filed a Certificate of Change with the Nevada Secretary of State effecting a four-for-one forward stock split of our common stock and increasing the our authorized capitalization to 200,000,000 shares of common stock.

On August 7, 2009, we filed a Certificate of Amendment to affect a four-for-one forward split of our common stock.

Operational History

We have a 20% working interest (16% net revenue interest) in an oil well located in Creek County, Oklahoma. As of April 30, 2010, the well was shut in and not producing.

On July 30, 2008, we acquired a 5% working interest (4% net revenue interest) in six wells located in Pawnee County, Oklahoma. In consideration for assignment of the working interest in these wells, we issued 300,000 shares of its restricted common stock to the former owner of the working interest. As of April 30, 2010, the wells were shut in and not producing.

In June 2008, SemCrude, the purchaser of the oil produced by our wells, filed for bankruptcy under Chapter 11 of the Federal Bankruptcy Code. As a result, payments to us for oil sold have been suspended.

On April 25, 2009, we signed an agreement to acquire approximately 90% of the outstanding shares of Energy Solutions People Inc. in exchange for 7,234,034 shares of our common stock. Energy Solutions was incorporated in Nevada in September 2007. Shortly after its formation, Energy Solutions acquired the rights to various renewable energy products, the most significant of which are wind turbines and solar powered electrical generators. This agreement was subsequently terminated.

On February 22, 2010, we entered into an option agreement with Shawn Ryan to purchase an undivided interest of mining claims of a property described as “Ballarat Property.” In addition, on February 25, 2010, we entered into an option agreement with Shawn Ryan to purchase an undivided interest of mining claims of a property described as “Hunker Project.” Our exploration activities on the Ballarat Property and the Hunker Project were limited only to soil sampling. The Ballarat Property and Hunker Project option agreements, and all amendments thereto, were terminated as of April 29, 2011 through a mutual agreement with Mr. Ryan.

On April 18, 2011, we entered into a Purchase Agreement with South Pacific Connection Limited (James Das), to purchase an 80% working interest of a mining claim in Papua New Guinea. In exchange for the Mining Claim, the Company paid $35,000.00 to South Pacific at the execution of the Purchase Agreement. Pursuant to the Purchase Agreement, the Company shall issue a total of 2,500,000 shares restricted common stock in staged payments over the next 5 years. The payments shall be made in increments of 500,000 shares, delivered on September 11 of each year. In addition, the Company shall incur a total of $3,400,000 in total capital expenditures over the next 5 years to retain the working interest of the mining claim. As of the date of this report there has been no exploration activities associated with this mining claim.

We will need to raise the funds required for excavation from third parties to continue with our exploration activities. We may also attempt to raise needed capital through the private sale of our securities or by borrowing from third parties. If we are able to raise such capital, we intend to spend such capital over the next 12 months with soil and stream sampling, geological mapping and possibly initiating a ground magnetic survey and excavator trenching followed by an evaluation of a possible drill program. However, we may not be successful in raising the capital needed for the aforementioned exploration activities.

Our future plans will be dependent upon the amount of capital we are able to raise. We do not have any commitments or arrangements from any person to provide us with any additional capital.

General Overview of Business

As of April 30, 2010, we abandoned all of our oil and gas prospects. We plan to evaluate mining prospects and participate in mining activities on those prospects, which in the opinion of management are favorable. If, through our review, a geographical area indicates geological and economic potential, we may attempt to acquire leases or other interests in the area. We may then attempt to sell portions of its leasehold interests in a prospect to unrelated third parties, thus sharing the risks and rewards of the exploration and development of the prospect with the joint owners.

We may also:

●	Acquire a working interest in one or more prospects from others and participate with the other working interest owners in mining, or

●	Purchase producing mining properties.

Our activities will primarily be dependent upon available equity and debt financing.

Oil and Gas Prospects

We have abandoned all of our oil and gas prospects, which included the 20% working interest (16% net revenue interest) in the Creek Well and the 5% working interest (4% net revenue interest) in Pawnee Wells. Impairment of these long-lived assets was considered under FASB ASC Topic 360. Future cash flows from and beyond probable reserves was considered to be zero. The Creek well and Pawnee Wells were considered 100% impaired in April of 2010 and written down accordingly.

Mining Interests

We are currently engaged in the business of exploration of precious metals with a focus on the exploration and development of quartz deposits in North America. As of the date of this Quarterly Report, the Company’s mineral interests consist mainly of option agreements on exploration stage properties. We have not established any proven or probable reserves on our mineral property interests.

Papua New Guinea

On April 18, 2011, the Company and South Pacific Connection Ltd., a company formed under the laws of Papua New Guinea (“South Pacific”) entered into the Purchase Agreement for the Company to purchase an 80% working interest of a mining claim in Papua New Guinea. In exchange for the mining claim, the Company paid $35,000.00 to South Pacific at the execution of the Purchase Agreement. Pursuant to the Purchase Agreement, the Company shall issue a total of 2,500,000 shares restricted common stock in staged payments over the next 5 years. The payments shall be made in increments of 500,000 shares, delivered on September 11 of each year. In addition, the Company shall incur a total of $3,400,000 in total capital expenditures over the next 5 years to retain the working interest of the mining claim. The Company’s exploration plans are to conduct stream sediment sampling and geological mapping in conjunction with ridge and spur or grid soil sampling and bulk sampling of stream gravels

The key task of our initial plan is to determine appropriate drill targets within any mineralized zones found and interpretation of findings. Thus far we have done no work on the property.

Ballarat

On February 22, 2010, the Company and Shawn Ryan, an individual (“Ryan”), entered into the “Ballarat Option Agreement” that granted the Company the right to purchase from Ryan an undivided interest in the mining claims on a property described as the “Ballarat Property.” The Ballarat Option Agreement provided the Company with the option to acquire a 100% interest in the Ballarat Property from Ryan by making staged cash payments and issuing a total of 1,250,000 shares of common shares of stock of the Company on or before February 15, 2014.

Pursuant to the Ballarat Option Agreement, Ryan retained a 2% net smelter return interest that requires an advance royalty payment for $30,000 starting Aug 20, 2014. At the option of the Company, the net smelter return interest may be reduced to 1% upon making a $2 million dollar payment to Ryan. The Company’s exploration plans for the Ballarat Property is to establish a soil and ground magnetic survey. The soil-sampling program will be followed up with a portable excavator-trenching program that the Company believes will generate numerous quality drill targets.

Pursuant to the Ballarat Option Agreement, the first payment of $25,000 was due to Ryan on or about March 15, 2010. However, the Company and Ryan entered into the “Ballarat Extension Agreement” to extend such payment by 10 days.

On March 31, 2010, the Company entered into an “Amendment to Ballarat Option Agreement” which amended the Ballarat Option Agreement as follows: (a) the Ballarat Property shall consist of 94 Yukon Quartz Mining Claims located in the Dawson Mining District, Yukon Territory, Canada and (b) the claim block shall cover approximately 19 square kilometers and straddle Ballarat Creek.

However, pursuant to a Termination Agreement, the aforementioned Ballarat Option Agreement and the Amendment to the Ballarat Option Agreement have been terminated and are therefore null and void as of April 29, 2011. Pursuant to the Termination Agreement Ryan shall keep the payment of $25,000 and the issuance of 250,000 shares of restricted common stock.

Hunker

On February 25, 2010, the Company and Ryan entered into the “Hunker Option Agreement” for the Company to acquire from Ryan an undivided interest in the mining claims of a property described as the “Hunker Project.” The Hunker Option Agreement granted the Company the option to earn 100% interest in the Hunker Project from Ryan by making staged cash payments and issuing a total of 1,000,000 shares of common stock of the Company to Ryan on or before February 15, 2014. Ryan shall retain a 2% net smelter return interest that requires an advance royalty payment for $30,000. At the option of the Company, the net smelter return interest of Ryan may be reduced to 1% upon making a $2 million dollar payment to Ryan. The Company has paid Ryan the first payment of $25,000.

The Hunker Project consists of 121 Yukon Quartz Mining Claims located in the Dawson Mining District, Yukon Territory Canada. The claim block is situated 15 miles southeast of Dawson City and now stands at 6,000 acres or 24 square kilometers and straddles Hunker Creek.

However, pursuant to the Termination Agreement, the aforementioned Hunker Option Agreement has been terminated and thus is null and void as of April 29, 2011. Pursuant to the Termination Agreement Ryan shall keep the payment of $25,000 and the issuance of 1,000,000 shares of restricted common stock.

Results of Operations for the Three Months Ended July 31, 2011

During the three month period ended July 31, 2011, the Company incurred an operating loss of $39,183.

Our activities have been financed from proceeds of shareholders, related or third party subscriptions and/or loans. We do not anticipate earning revenues until such time as we have entered into commercial production of any mineral claims. We are presently in the pre-exploration stage of our business and we can provide no assurance that we will discover commercially exploitable levels of mineral resources on any properties, or if such resources are discovered, that we will enter into commercial production of any mineral claims.

Net Loss for the Three Month Period Ended July 31, 2011

For the three month period ended July 31, 2011, we recorded an operating loss of $39,183, compared to a loss of $8,717 for the comparative three month period of the prior year. The loss consists of: mining and exploration $-0- (2010 - $nil); salary & wages $-0- (2010 - $nil); consulting fees $20,000 (2010 - $nil); professional fees $14,450 (2010 - $2,350); occupancy expenses $-0- (2010 - $996); stock transfer fees $616 (2010 - $1,386); abandonment loss $-0- (2010 - $nil); impairment of oil and gas leases $-0- (2010 - $nil); and other general and administrative fees $4,117 (2010 - $3,985).

Cumulative Loss to July 31, 2011

We have generated $17,189 in revenues from our operations since our incorporation through July 31, 2011. We have incurred a cumulative loss of $1,085,477 since inception, January 8, 2008. Thus, there can be no assurance that we will ever achieve profitability or that revenues will be generated and sustained in the future. We are dependent upon obtaining additional and future financing to pursue our exploration and excavation activities.

Liquidity and Further Capital Resources

At July 31, 2011, we had assets of $35,016, consisting of cash and cash equivalents and mineral property interests. Total stockholders’ deficit was $35,016 at July 31, 2011. We are an exploration stage company and, since inception, have experienced significant changes in liquidity, capital resources and shareholders’ equity.

To finance the Company’s operations, the Company has relied upon cash on hand, sources internally generated from management, advances from shareholders and financing via loans and debt financing.

Additionally, on May 11, 2011, the Company received $20,000 cash for subscriptions of common stock.

Off-Balance Sheet Arrangements

As of July 31, 2011, the Company did not have any off-balance sheet arrangements.

ITEM 3.

Quantitative and Qualitative Disclosures About Market Risk.

Not applicable.

ITEM 4.

Controls and Procedures.

Disclosure Controls and Procedures

Our management, with the participation of the Company’s Principal Executive Officer and Principal Financial Officer, has evaluated the effectiveness of the Company’s disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end of the period covered by this report. In designing and evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated, can only provide reasonable assurance of achieving the desired control objectives and management is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on such evaluation, the Company’s Principal Executive Officer and Principal Financial Officer have concluded that as of July 31, 2011, the Company’s disclosure controls and procedures were not effective, at the reasonable assurance level, in recording, processing, summarizing and reporting, on a timely basis, information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act and in ensuring that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the Company’s management, including the Principal Executive Officer and Principal Financial Officer, as appropriate to allow timely discussions regarding required disclosure; due to the material weaknesses described below.

In light of the material weaknesses described below, we performed additional analysis and other post-closing procedures to ensure that our financial statements were prepared in accordance with generally accepted accounting principles. Accordingly, we believe that the financial statements included in this report fairly present, in all material respects, our financial condition, results of operations, changes in stockholders’ equity and cash flows for the periods presented.

Management Report on Internal Control Over Financial Reporting

The Company’s management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Rule 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934. Our internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. The Company’s internal control over financial reporting includes those policies and procedures that:

1.	Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company;

Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with accounting principles generally accepted in the United States of America, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and

3.	Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company’s assets that could have a material effect on our financial statements.

All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and reporting. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

A material weakness is a control deficiency (within the meaning of Public Company Accounting Oversight Board (“PCAOB”) Auditing Standard No. 5) or combination of control deficiencies, that results in more than a remote likelihood that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis.

Under the supervision and with the participation of our management, including our Principal Executive Officer and Principal Financial Officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting as of the period covered by this report based on the framework in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”). Based on the results of management’s assessment and evaluation, our Principal Executive Officer and Principal Accounting Officer concluded that our internal control over financial reporting was not effective due to the material weaknesses described below.

Material Weaknesses

The Company’s management assessed the effectiveness of the Company’s internal control over financial reporting as of July 31, 2011. In making this assessment, the Company’s management used the framework set forth by the Committee of Sponsoring Organizations of the Treadway Commission in “Internal Control – Integrated Framework.” Based on this assessment, management concluded that, as of July 31, 2011, the Company’s internal control over financial reporting was not effective based on this framework.

Management evaluated the impact of ineffective control over financial reporting and concluded that the control deficiency represented a material weakness.

In connection with the financial statements and notes thereto for the quarter ended July 31, 2011, management has concluded that they observed inadequate review and approval of certain aspects of the accounting process that they considered to be a material weakness in internal control. In particular, the notes to the financial statements had to add additional disclosure material and restating our financial statements in our Annual Report on Form 10-K/A for the fiscal year ended April 30, 2010, and for the Quarterly Report on Form 10-Q/A for the quarter ended October 31, 2010.

After a review of the Company’s current review and approval of certain aspects of the accounting process, management concluded that the inadequate review and approval process represented a material weakness.

Remediation of Material Weaknesses

To remediate the material weaknesses identified above, we have done the following subsequent to July 31, 2011, which correspond to the two material weaknesses identified above.

1.	In connection with the ineffective assessment of the Company’s internal control over financial reporting, management plans to implement additional controls to improve the effectiveness of the Company’s disclosure controls and procedures.

Management believes this remediation will remediate the corresponding material weakness described in Item 1, immediately above.

In connection with the reported inadequate review and approval of certain aspects of the accounting process, management has reiterated the Company’s current review and approval processes, to insure that all accounting reconciliations, journal entries and complex transactions are reviewed and approved on a timely basis.

Management believes this remediation has remediated the corresponding material weakness described in Item 2, immediately above.

Inherent Limitations on the Effectiveness of Controls

Management does not expect that our disclosure controls and procedures or our internal control over financial reporting will prevent or detect 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 systems 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 a cost-effective control system, no evaluation of internal control over financial reporting can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, have been or will be detected.

These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of a simple error or mistake. Controls can also be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the controls. The design of any system of controls is based in part on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Projections of any evaluation of controls effectiveness to future periods are subject to risks. Over time, controls may become inadequate because of changes in conditions or deterioration in the degree of compliance with policies or procedures.

Changes in Internal Control over Financial Reporting

There have not been any changes in the Company’s internal control over financial reporting (as such term is defined in Rules 13-15(f) and 15d-15(f) under the Exchange Act) during the period covered by this report that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II – OTHER INFORMATION

ITEM 1.

Legal Proceedings.

There were no other legal proceedings against the Company with respect to matters arising in the ordinary course of business. Neither the Company nor any of its officers or directors is involved in any other litigation other than as creditors in the SemCrude bankruptcy proceeding, or is involved either as plaintiffs or defendants, and have no knowledge of any threatened or pending litigation against them or any of the officers or directors.

ITEM 1A.

Risk Factors.

Smaller reporting companies are not required to provide the information required by this Item 1A.

ITEM 2.

Unregistered Sales of Equity Securities and Use of Proceeds.

During the quarter ended June 30, 2011, the Company raised a total of $20,000 from two accredited investors. The shares of common stock and the warrants sold to the investors have not been issued by the Company.

The restricted shares of common stock of the Company to be issued rely upon exemptions provided for under Regulation S of the Securities Act of 1933, as amended, or Sections 4(2) and 4(6), including Regulation D promulgated thereunder, of the Securities Act of 1933, as amended, based on the accredited investors knowledge of our operations and financial condition and experience in financial and business matters that allowed them to evaluate the merits and risk of receipt of these securities, and Regulations based on sales of securities outside the United States.

ITEM 3.

Defaults Upon Senior Securities.

None.

ITEM 4.

(Removed and Reserved).

ITEM 5.

Other Information.

None.

ITEM 6.

Exhibits.

Number		Exhibit

31.1		Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2		Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32		Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS		XBRL Instance Document
101.SCH		XBRL Schema Document
101.CAL		XBRL Calculation Linkbase Document
101.DEF		XBRL Definition Linkbase Document
101.LAB		XBRL Label Linkbase Document
101.PRE		XBRL Presentation Linkbase Document

SIGNATURES

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

	DAULTON CAPITAL CORP.

Date: September __, 2011	By:	/s/ Terry Fields
		Terry Fields, President and Principal Financial and Accounting Officer

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