10-Q 1 form10q.htm Filed by Automated Filing Services Inc. (604) 609-0244 - The Cavalier Group - Form 10-Q

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

[ X ] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended FEBRUARY 29, 2008

[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from _____to _______

Commission file number: 333-127016

THE CAVALIER GROUP
(Exact name of small business issuer in its charter)

Wyoming 98-0463119
(State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.)
   
5728 – 125A Street  
Surrey, British Columbia V3X 3G8
(Address of principal executive offices) (Zip Code)

Issuer’s telephone number: (604) 597-0028

Securities Registered Under Section 12(b) of the Exchange Act: None

Securities Registered Under Section 12(g) of the Exchange Act: Common Stock, $0.001 par value (Title of class)

Indicate by check mark whether the issuer (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [ x ] No [ ]

Indicate by check mark whether the registrant is a large accelerated filer, a non-accelerated filer or a smaller reporting company.

Large accelerated filer [ ]

Accelerated filer [ ]

Non-accelerated filer [ ]

Smaller reporting company [ x ]

State the number of shares outstanding of each of the issuer’s classes of common equity, as of the latest practicable date: 7,490,000 shares of Common Stock as of April 4, 2008.

Transitional Small Business Format. Yes [ ] No [ X ]

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements



THE CAVALIER GROUP
(An Exploration Stage Company)
Condensed Balance Sheet
(Unaudited)
February 29, 2008

Assets
Current assets:      
     Cash $  5,492  
  $  5,492  
       
Liabilities and Shareholders’ Deficit   
Current liabilities:      
     Accounts payable and accrued liabilities $  1,000  
     Notes payable:      
           Related party (Note 2)   5,000  
           Other (Note 5)   10,000  
     Accrued interest payable:      
           Related party (Note 2)   83  
           Other (Note 5)   146  
                                     Total current liabilities   16,229  
       
Shareholders’ deficit (Notes 2 and 6):      
     Common stock, $.001 par value; 200,000,000 shares authorized,      
           7,490,000 shares issued and outstanding   7,490  
     Additional paid-in capital   73,910  
     Accumulated deficit   (92,306 )
     Cumulative translation adjustment   169  
                                     Total shareholders’ deficit   (10,737 )
  $  5,492  

See accompanying notes to condensed financial statements



THE CAVALIER GROUP
(An Exploration Stage Company)
Condensed Statements of Operations
(Unaudited)

                            February 11, 2005  
                            (Inception)  
    Three Months Ended     Nine Months Ended     Through  
    February 29,           February 29,           February 29,  
Expenses:   2008     2007     2008     2007     2008  
   Contributed rent (Note 2) $  600   $  —   $  1,800   $  —   $  3,200  
   Contributed administrative support (Note 2)   50     50     150     150     700  
   Professional fees   1,000     1,000     3,215     5,730     20,845  
   Travel and meals               1,175     4,619  
   Office   1,229     3,854     3,309     10,210     24,385  
   Rent       600         1,800     2,400  
   Organization costs                   250  
   Bank Charges   206         318     68     706  
   Licenses, permits, filing fees   1,967     1,306     2,027     1,406     8,207  
   Mineral Interest               26,458     20,603  
   Public relations   400     1,663     960     4,465     6,162  
                         Total expenses   5,452     8,473     11,779     51,462     92,077  
                         Operating loss   (5,452 )   (8,473 )   (11,779 )   (51,462 )   (92,077 )
                               
Interest expense   (153 )       (229 )       (229 )
                               
                         Loss before income taxes   (5,605 )   (8,473 )   (12,008 )   (51,462 )   (92,306 )
                               
Income tax provision (Note 4)                    
                               
                         Net loss $  (5,605 ) $  (8,473 ) $  (12,008 ) $  (51,462 ) $  (92,306 )
                               
Basic and diluted loss per share $  (0.00 ) $ (0.00 ) $ (0.00 ) $ (0.01 )      
                               
Basic and diluted weighted average                              
   common shares outstanding   7,490,000     7,490,000     7,490,000     7,272,000        

See accompanying notes to condensed financial statements



THE CAVALIER GROUP
(An Exploration Stage Company)
Condensed Statement of Changes in Shareholders' Equity
(Unaudited)

                            Cumulative        
                            Translation        
                            Adjustment        
                Additional           Other        
    Common Stock     Paid-In     Accumulated     Comprehensive        
    Shares     Par Value     Capital     Deficit     Income     Total  
Balance at February 11, 2005 (inception)     $  —   $  —   $  —   $  —   $  
                                     
February 2005, common stock sold to an                                    
   officer ($.001/share) (Note 2)   4,000,000     4,000                 4,000  
April 2005 through May 2005, common                                    
   stock sold in private placement offering                                    
   ($.01/share) (Note 6)   2,400,000     2,400     21,600             24,000  
Office space and administrative support                                    
   contributed by an officer (Note 2)           350             350  
Net loss, period ended May 31, 2005               (5,006 )       (5,006 )
                                     
Balance at May 31, 2005   6,400,000     6,400     21,950     (5,006 )       23,344  
                                     
Office space and administrative support                                    
   contributed by an officer (Note 2)           1,400             1,400  
Comprehensive loss:                                    
   Net loss, period ended                                    
      February 28, 2006               (21,639 )       (21,639 )
   Cumulative translation adjustment                   152     152  
Comprehensive loss                       (21,487 )
                                     
Balance at May 31, 2006   6,400,000     6,400     23,350     (26,645 )   152     3,257  
                                     
July 2006, common stock sold pursuant                                    
   to Form SB-2 registered offering at                                    
   $.05/share, net of $5,000 of offering                                    
   costs (Note 6)   1,090,000     1,090     48,410             49,500  
Administrative support contributed                                    
   by an officer (Note 2)           200             200  
Comprehensive loss:                                    
   Net loss, period ended                                    
      May 31, 2007               (53,653 )       (53,653 )
   Cumulative translation adjustment                   954     954  
Comprehensive loss                                 (52,699 )
Balance at May 31, 2007   7,490,000     7,490     71,960     (80,298 )   1,106     258  
                                     
Office space and administrative support                                    
   contributed by an officer (Note 2)           1,950             1,950  
Comprehensive loss:                                    
   Net loss, period ended                                    
      February 29, 2008               (12,008 )       (12,008 )
   Cumulative translation adjustment                   (937 )   (937 )
Comprehensive loss                                 (12,945 )
                                     
Balance at February 29, 2008   7,490,000   $  7,490   $  73,910   $  (92,306 ) $  169   $  (10,737 )

See accompanying notes to condensed financial statements



THE CAVALIER GROUP
(An Exploration Stage Company)
Condensed Statements of Cash Flows
(Unaudited)

                February 11, 2005  
                (Inception)  
    Nine Months Ended     Through  
    February 29,     February 29,  
    2008     2007     2008  
Cash flows from operating activities:                  
   Net loss $  (12,008 ) $  (51,462 )   (92,306 )
   Adjustments to reconcile net loss to net cash                  
          used in operating activities:                  
               Office space and administrative support                  
                  contributed by an officer (Note 2)   1,950     150     3,900  
               Changes in operating assets and liabilities:                  
                     Deferred offering costs       5,000      
                          Accrued liabilities   (1,771 )   20,776     1,229  
                                 Net cash used in                  
                                       operating activities   (11,829 )   (25,536 )   (87,177 )
                   
Cash flows from financing activities:                  
   Proceeds from the sale of common stock       54,500     82,500  
   Proceeds from the issuance of notes payable   15,000         15,000  
   Offering costs       (5,000 )   (5,000 )
                                 Net cash provided by                  
                                       financing activities   15,000     49,500     92,500  
                   
                                       Net change in cash   3,171     23,964     5,323  
                   
Effect of exchange rate changes on cash   (937 )   (44 )   169  
                   
Cash, beginning of period   3,258     4,839      
                   
Cash, end of period $  5,492   $  28,759     5,492  
                   
Supplemental disclosure of cash flow information:                  
   Cash paid during the period for:                  
         Income taxes $  —   $  —      
         Interest $  —   $  —      

See accompanying notes to condensed financial statements


THE CAVALIER GROUP
(An Exploration Stage Company)
Notes to Condensed Financial Statements
(Unaudited)

NOTE 1: BASIS OF PRESENTATION

The condensed financial statements presented herein have been prepared by the Company in accordance with the accounting policies in its audited financial statements for the period ended May 31, 2007 as filed in its Form 10-KSB and should be read in conjunction with the notes thereto. The Company is in the exploration stage in accordance with Industry Guide 7. On April 25, 2005, the Company entered into an option agreement to acquire 100 percent of the right, title and interest in a mineral claim located in northeast Ontario, Canada. (see Note 3).

In the opinion of management, all adjustments (consisting only of normal recurring adjustments) which are necessary to provide a fair presentation of operating results for the interim period presented have been made. The results of operations for the periods presented are not necessarily indicative of the results to be expected for the year.

Interim financial data presented herein are unaudited.

The Company’s functional currency is the Canadian dollar; however, the accompanying financial statements and footnotes refer to United States (“U.S.”) dollars unless Canadian dollars are specifically designated with “CDN”.

NOTE 2: RELATED PARTY TRANSACTIONS

The Company’s president contributed office space to the Company for the nine months ended February 29, 2008. The office space was valued at $200 per month based on the market rate in the local area and is included in the accompanying financial statements as contributed rent expense with a corresponding credit to additional paid-in capital.

On October 23, 2007, the Company’s president loaned the Company $5,000 in exchange for a promissory note. The note carries a five percent interest rate and matures on October 23, 2008. Accrued interest payable on the note totaled $83 at November 30, 2007.

The president contributed administrative services to the Company for the periods presented. The time and effort was recorded in the accompanying financial statements based on the prevailing rates for such services, which equaled $50 per hour based on the level of services performed. The services are reported as contributed administrative services with a corresponding credit to additional paid-in capital.

In February 2005, the Company sold 4,000,000 shares of its restricted common stock to its president for $4,000 ($.001/share).

The Company’s president contributed office space to the Company from inception through May 31, 2006. The office space was valued at $100 per month based on the market rate in the local area and is included in the accompanying financial statements as contributed rent expense with a corresponding credit to additional paid-in capital.


NOTE 3: OPTION ON UNPROVEN MINERAL INTERESTS

Casa Claims Option Agreement (formerly referred to as the Mineta Resources Ltd. Option Agreement)

On April 25, 2005, the Company entered into an option agreement to acquire 100 percent of the right, title and interest in a mineral claim located in northeast Ontario, Canada. On November 30, 2006, the parties amended the agreement due to equipment malfunctions encountered during the drilling process. The parties agreed to revise the exploration costs incurred through October 31, 2006 and 2007 to CDN$30,000 and CDN$120,000, respectively. The original agreement called for exploration costs of CDN$50,000 and CDN$100,000, respectively, as of October 31, 2006 and 2007.

Under the terms of the Option Agreement, the Company is required to:

A. Make option exploration expenditures as follows:

Exploration    
Expenditures   Due Date
CDN $ 30,000.00 * October 31, 2006
CDN 130,000.00   October 31, 2008
  $ 160,000.00    

B. Make annual payments of CDN$50,000, commencing January 1, 2009, as long as the Company held any interest in the claim.

*

During the three months ended November 30, 2006, the Company incurred CDN$22,790 (US$20,603) for exploration expenditures under the option agreement. In April 2007, the Company obtained a waiver for the requirement to expend CDN$30,000 by October 31, 2006.

In addition to the above terms, the optionor is to retain a three percent net smelter royalty.

NOTE 4: INCOME TAXES

The Company records its income taxes in accordance with SFAS No. 109, “Accounting for Income Taxes”. The Company incurred net operating losses during the periods shown on the condensed financial statements resulting in a deferred tax asset, which was fully allowed for; therefore, the net benefit and expense result in $-0- income taxes.

NOTE 5: NOTE PAYABLE

On September 18, 2007, an investor loaned the Company $5,000 in exchange for a promissory note. The note carries a five percent interest rate and matures on September 18, 2008.

On January 14, 2008, an investor loaned the Company $5,000 in exchange for a promissory note. The note carries a five percent interest rate and matures on January 14, 2009.

Accrued interest payable on the notes totaled $146 at February 29, 2008.


NOTE 6: SHAREHOLDERS’ EQUITY

The Company filed a Form SB-2 registration statement with the SEC on July 29, 2005 to offer up to 2,000,000 shares of the Company’s common stock at a price of $0.05 per share. The registration statement became effective on January 31, 2006. During July 2006, the Company sold 1,090,000 common shares pursuant to the registration statement for net proceeds of $49,500, after deducting $5,000 of offering costs.

Between April 2005 and May 2005, the Company offered for sale 3,000,000 shares at of its common stock at a price of $0.01 per share. The Company closed the offering after selling 2,400,000 shares for gross proceeds of $24,000. The offering was made in reliance on an exemption from registration of a trade in the United States under Rule 903 of Regulation S of the United States Securities Act of 1933, as amended.

NOTE 7: SHARE EXCHANGE AGREEMENT

On January 20, 2008, the Company entered into a share exchange agreement with United Premier Medical Group, a Cayman corporation, and the shareholders of United Premier Medical Group. Pursuant to the terms of the share exchange agreement, the Company has agreed to acquire all of the issued and outstanding shares of United Premier Medical Group’s common stock in exchange for the Company’s issuance of 42,658,000 shares of its common stock to the shareholders of United Premier Medical Group.

Business of United Premier Medical Group

United Premier Medical Group is principally engaged in the business of infrastructure investment in boutique units in hospitals or medical centers of its business partners and providing hospital management and medical consultation services through cooperation with hospitals and medical institutions in the Peoples Republic of China and Macau on one hand and strategic alliances with medical institutions in the United States and experienced healthcare experts and medical consultants on the other hand.

Terms and Conditions of the Share Exchange Agreement

The following is a brief description of the terms and conditions of the share exchange agreement that are material to the Company:

1.

The representations and warranties of United Premier Medical Group, it’s shareholders and the Company set forth in the share exchange agreement remain true, correct and complete in all respects as of the closing;

   
2.

All of the covenants and obligations that the respective parties are required to perform or to comply with pursuant to the share exchange agreement at or prior to the closing must have been performed and complied with in all material respects;

   
3.

United Premier Medical Group and the Company having received duly executed copies of all third party consents and approvals contemplated by the share exchange agreement, if any;

   
4.

United Premier Medical Group and the Company having been reasonably satisfied with their due diligence investigations of the other party that is reasonable and customary in a similar transaction;




5.

United Premier Medical Group will have delivered to the Company audited financial statements prepared in accordance with United States GAAP and audited by an independent auditor registered with the Public Company Accounting Oversight Board in the United States; and

   
6.

The Company will adopt resolutions appointing nominees of United Premier Medical Group to the board of directors of the Company.

The anticipated closing date is April 30, 2008. Due to conditions precedent to closing, including but not limited to those set out above, and the risk that these conditions precedent will not be satisfied, there is no assurance that we will complete the share exchange.


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

Cautionary Statement Regarding Forward-Looking Statements

This quarterly report contains forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. These statements relate to future events or our future financial performance. Some discussions in this report may contain forward-looking statements that involve risk and uncertainty. A number of important factors could cause our actual results to differ materially from those expressed in any forward-looking statements made by us in this report. Forward-looking statements are often identified by words like: “believe”, “expect”, “estimate”, “anticipate”, “intend”, “project” and similar expressions or words which, by their nature, refer to future events.

In some cases, you can also identify forward-looking statements by terminology such as “may”, “will”, “should”, “plans”, “predicts”, “potential” or “continue” or the negative of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties and other factors, including the risks in the section entitled "Risk Factors", that may cause our or our industry's actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements.

Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity or achievements. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results.

Our financial statements are stated in United States Dollars (US$) and are prepared in accordance with United States Generally Accepted Accounting Principles. All references to "common shares" refer to the common shares in our capital stock.

As used in this annual report, the terms "we", "us", "our", and "Cavalier" mean The Cavalier Group.

Foreign Currency and Exchange Rates

Dollar costs of Cavalier’s property acquisition and planned exploration costs are in Canadian Dollars. For purposes of consistency and to express United States Dollars throughout this report, Canadian Dollars have been converted into United States currency at the rate of US $1.00 being approximately equal to CA $1.00 or CA $1.00 being approximately equal to US $1.00 which is the approximate average exchange rate during recent months and which is consistent with the incorporated financial statements.


THE FOLLOWING ANALYSIS OF THE RESULTS OF OPERATIONS AND FINANCIAL CONDITION OF THE CORPORATION FOR THE PERIOD ENDING FEBRUARY 29, 2008 SHOULD BE READ IN CONJUNCTION WITH THE CORPORATION’S CONSOLIDATED FINANCIAL STATEMENTS, INCLUDING THE NOTES THERETO CONTAINED ELSEWHERE IN THIS FORM 10-Q.

Overview

We were incorporated in the State of Wyoming on February 11, 2005 as The Cavalier Group with a fiscal year end of May 31. Our statutory registered agent's office is located at 1620 Central Avenue, Suite 202, Cheyenne, Wyoming 82001 and our business office is located at 5728 - 125A Street, Surrey, British Columbia V3X 3G8; telephone (604) 597-0028. There have been no material reclassifications, mergers, consolidations or purchases or sales of any significant amount of assets not in the ordinary course of business since the date of incorporation. We are a start-up, exploration stage company engaged in the search for gold and related minerals. There is no assurance that a commercially viable mineral deposit, a


3

reserve, exists in our claim or can be shown to exist until sufficient and appropriate exploration is done and a comprehensive evaluation of such work concludes economic and legal feasibility.

On April 25, 2005, as amended on February 29, 2008 and October 31, 2007, we optioned a property containing four claim blocks in Ontario, Canada by entering into an Option To Purchase And Royalty Agreement with Larry Gervais, the beneficial owner, an arms-length Ontario resident, to acquire the claims by making certain expenditures and carrying out certain exploration work.

Under the terms of the agreement, Gervais granted to Cavalier the sole and exclusive right to acquire 100 percent of the right, title and interest of Gervais in the Casa claims, subject to his receiving annual payments and a royalty, in accordance with the terms of the agreement, as follows:

1.

Cavalier must incur exploration expenditures on the claims of a minimum of $40,000, by October 31, 2006; On February 29, 2008, the parties amended the agreement due to equipment failure encountered during the drilling process such as to revise the exploration costs incurred through October 31, to CA $30,000. We actually incurred CA $22,790 for exploration expenditures and on October 31, 2007, obtained a waiver for the requirement to spend CA $30,000 by October 31, 2007;

   
2.

Cavalier must incur exploration expenditures on the claims of a further $130,000, for an aggregate minimum exploration expense of $160,000, by October 31, 2008; and

   
3.

Upon exercise of the option, Cavalier is required to pay to Gervais, commencing January 1, 2009, the sum of $50,000 per annum, as prepayment of the net smelter royalty.

The parties amended the agreement due to equipment malfunctions encountered during the drilling process. We agreed with the owner of the claims to delay the diamond drilling part of the program until phase II (thus decreasing the required expenditure on phase I and increasing the required expenditure under phase II by a corresponding amount; the funds not spent on phase I will be added to the budget for phase II). A report on the work accomplished during 2006 (Geological Report for The Cavalier Group on the Phase I Exploration Program of the Casa Claims Group Property dated April 17, 2007 by R. S. Middleton, P. Eng.) was presented to the Board in May, 2007 and was discussed in our 10-KSB filing August 28, 2007.

The claims are located approximately 18 miles north of the Eades railway station north of Lake Abitibi which is 100 miles east of Cochrane and 500 miles north of Toronto, Ontario. Access is via muskeg tractor road and a gravel road (Road #643) that extends north to the west boundary of the property.

The claims are unencumbered and there are no competitive conditions which affect the claims. Further, there is no insurance covering the claims. We believe that no insurance is necessary since the claims are unimproved and contain no buildings or improvements.

Mr. R. S. Middleton, P. Eng., authored the “Report On The Casa Claims Group Property”, dated May 19, 2005, in which he recommended a two-phase exploration program to properly evaluate the potential of the claims; he has now completed the field work in the first phase of the exploration program and is prepared the Geological Report for The Cavalier Group on the Phase I Exploration Program of the Casa Claims Group Property dated April 17, 2007. Mr. Middleton is a Professional Engineer in good standing in the Association of Professional Engineers of Ontario and the Geological Association of Canada. He is a graduate of the Michigan Technological University, (B.S., 1968 and M.S., 1969) and he has practiced his profession as an exploration geologist for more than 35 years.

There are no parks or developments that would interfere with exploration for or exploitation of any mineral deposits that might be located on the claim. There are no disputes as to title or liens registered on the claim.

Our Proposed Exploration Program – Plan of Operation

As the result of our inability to secure the financing required to carry on with the exploration of the Casa claims, we have temporarily suspended plans to continue with phase II of the exploration program.


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Plan of Operation

On January 20, 2008, we entered into a share exchange agreement with United Premier Medical Group, a Cayman corporation, and the shareholders of United Premier Medical Group. Pursuant to the terms of the share exchange agreement, we have agreed to acquire all of the issued and outstanding shares of United Premier Medical Group’s common stock in exchange for the issuance by our company of 42,658,000 shares of our common stock to the shareholders of United Premier Medical Group. A copy of the share exchange agreement was attached as Exhibit 2.1 to our 8-K filing on January 21, 2008.

Employees

Our only employees are Gerald W. Williams and Roy D. West our senior officer and directors.

At present, we have no employees, other than Messrs. Williams & West. Neither has an employment agreement with us. We presently do not have pension, health, annuity, insurance, stock options, profit sharing or similar benefit plans; however, we may adopt such plans in the future.

Offices

Our offices are located at 5728 - 125A Street, Surrey, B.C. Canada V3X 3G8.

Risks

At present we do not know whether or not the claims contain commercially exploitable reserves of gold or any other valuable mineral. Additionally, the proposed expenditures to be made by us in the exploration of the claim may not result in the discovery of commercial quantities of ore. Problems such as unusual or unexpected formations and other unanticipated conditions are involved in mineral exploration and often result in unsuccessful exploration efforts. In that case, we would be unable to complete our business plan.

We have insufficient financial resources to complete the second phase of our proposed exploration plan and have elected to temporarily suspend operations on the Casa claim.

In regards to the acquisition of United Premier Medical Group, although we anticipate closing the transaction in April, 2008, there is no assurance that the closing will take place.

Results of Operations

Cavalier was incorporated on February 11, 2005; comparative periods for the six month periods ended November 20, 2007, February 29, 2008, and February 11, 2005 (inception) through February 29, 2008 are presented in the following discussion.

Since inception, we have used our common stock and advances from stockholders to raise money for our optioned acquisition and for corporate expenses. Net cash provided by financing activities (less offering costs) from inception on February 11, 2005 to February 29, 2008 was $97,500 as a result of proceeds received from sales of our common stock ($82,500), advances from stockholders ($15,000) less offering costs of $5,000.

The Corporation did not generate any revenues from operations for the quarter ended February 29, 2008. To date, we have not generated any revenues from our mineral exploration business.

REVENUES

REVENUE – Gross revenue for the quarter ended February 29, 2008 was $0 ($0 for the quarter ended February 29, 2008) and $0 for the period from inception to February 29, 2008.


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COMMON STOCK – Since inception, we have used our common stock to raise money for our optioned acquisition and for corporate expenses. Net cash provided by financing activities during the nine months ended February 29, 2008 was $15,000 compared to $49,500 for the nine months ended February 28, 2007 and $92,500 for the period from inception on February 11, 2005 through to and including February 29, 2008. No options or warrants were issued to issue shares at a later date in the most recent quarter.

EXPENSES


Expense Item
For the 3rd Quarter
ended February 29,
2008
For the 3rd Quarter
ended February 29,
2007
Feb. 11, 2005
(Inception) thru
February 29, 2008
Contributed rent $ 600 $ — $ 3,200
Contributed administrative support 50 50 700
Professional fees 1,000 1,000 20,845
Travel and meals 4,619
Office 1,229 3,854 24,385
Rent 600 2,400
Organization costs 250
Bank charges 206 706
Licenses, permits, filing fees 1,967 1,306 8,207
Mineral interest acquisition & exploration 20,603
Interest expenses payable on advances 153 229
Public relations 400 1,663 6,162
TOTAL $5,605 $8,473 $92,077

SUMMARY – Total expenses were $5,605 in the quarter ended February 29, 2008 compared to $8,473 in the previous quarter ended February 28, 2007. For the nine month periods ended February 29, 2008 and February 28, 2007, the comparative values were $12,008 and $51,462 respectively. A total of $92,306 in expenses has been incurred since inception on February 11, 2005 through February 29, 2008. The costs can be subdivided into the following categories.

CONTRIBUTED EXPENSES: $650 in contributed expenses ($50 for contributed administrative costs and $600 for contributed rent) were incurred for the quarter ended February 29, 2008 as compared to $50 for the period ended February 28, 2007 (for contributed administrative costs only). For the nine month periods ended February 29, 2008 and February 28, 2007, the comparative values were $1,950 and $150 respectively while a total of $3,900 was incurred in the period from inception on February 11, 2005 to February 29, 2008. An officer contributed office space to the Company for the nine months ended February 29, 2008. The office space was valued at $200 per month based on the market rate in the local area and is included in the accompanying financial statements as contributed rent expense with a corresponding credit to additional paid-in capital. Contributed expenses are reported as contributed costs with a corresponding credit to additional paid-in capital.

PROFESSIONAL FEES: Cavalier incurred $1,000 in professional fees for the quarter ended on February 29, 2008 as compared to $1,000 for the quarter ended February 28, 2007. For the nine month periods ended February 29, 2008 and February 28, 2007, the comparative values were $3,215 and $5,730 respectively. From inception to February 11, 2005, we have incurred a total of $20,845 in professional fees mainly spent on legal and accounting matters. This cost category will have frequent swings in spending depending on our legal and accounting requirements.

COMPENSATION: No compensation costs were incurred for the quarter ended February 29, 2008 and no direct compensation costs have been incurred since inception.

OFFICE EXPENSES: $1,229 in office costs were incurred in the most recent quarter which ended on February 29, 2008 while $3,854 was incurred for the quarter ended February 28, 2007. For the nine month periods ended February 29, 2008 and February 28, 2007, the comparative values were $3,309 and $10,210 respectively. Costs were lower for the current year as we had previously completed the first stage of our


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exploration program. For the period February 11, 2005 (inception) through February 29, 2008 a total of $24,385 has been spent on office related expenses.

TRAVEL AND MEAL EXPENSES: No travel or meal costs were incurred in the most recent quarter which ended on February 29, 2008 and no costs were incurred for the quarter ended February 28, 2007. For the nine month periods ended February 29, 2008 and February 28, 2007, the comparative values were $0 (nil) and $1,175 respectively. For the period February 11, 2005 (inception) through February 29, 2008 a total of $4,619 has been spent on travel and meal expenses.

BUSINESS PROMOTION & PUBLIC RELATIONS EXPENSES: $400 in business promotion and public relations costs were incurred in the most recent quarter which ended on February 29, 2008 while $1,663 was incurred for the quarter ended February 28, 2007. For the nine month periods ended February 29, 2008 and February 28, 2007, the comparative values were $960 and $4,465 respectively and for the period February 11, 2005 (inception) through February 29, 2008 a total of $6,162 has been spent on business promotion and related expenses.

INCORPORATION OR ORGANIZATION EXPENSES: $0 in incorporation costs were incurred in the most recent quarter which ended on February 29, 2008 and $0 was incurred for the similar period in the previous fiscal year. For the period February 11, 2005 (inception) through February 29, 2008 a total of $250 has been spent on incorporation costs related to establishing our business.

OTHER GENERAL AND ADMINISTRATIVE COSTS: $206 in other costs were incurred in the current quarter under review and $0 (nil) was incurred for the quarter ended February 28, 2007. For the nine month periods ended February 29, 2008 and February 28, 2007, the comparative values were $318 and $68 respectively whole for the period February 11, 2005 (inception) through February 29, 2008, Cavalier has spent a total of $706 on other general and administrative or miscellaneous expenses.

LICENCES, PERMITS AND FILING FEES: $1,967 in licences, permits and filing costs were incurred in the current quarter under review and $1,306 was incurred for the quarter ended February 28, 2007. For the nine month periods ended February 29, 2008 and February 28, 2007, the comparative values were $2,027 and $1,406 respectively. For the period February 11, 2005 (inception) through February 29, 2008, Cavalier has spent a total of $8,207 on licences, permits and filing fees.

MINERAL EXPLORATION AND FILING FEES: No mineral exploration or related filing costs were incurred in the current quarter under review and none were incurred for the quarter ended February 28, 2007. For the nine month periods ended February 29, 2008 and February 28, 2007, the comparative values were $0 (nil) and $26,458 respectively. For the period February 11, 2005 (inception) through February 29, 2008, Cavalier has spent a total of $20,603 on mineral exploration and filing fees in exploring its optioned mineral property.

RENT: No rental expenses were incurred in the current quarter under review while $600 was incurred for the quarter ended February 28, 2007. For the nine month periods ended February 29, 2008 and February 28, 2007, the comparative values were $0 (nil) and $1,800 respectively. For the period February 11, 2005 (inception) through February 29, 2008, Cavalier has spent a total of $2,400 on rental expenses.

INTEREST EXPENSE: $153 in interest expenses was incurred in the quarter under review while $0 (nil) was incurred for the quarter ended February 28, 2007. For the nine month periods ended February 29, 2008 and February 28, 2007, the comparative values were $229 and $0 (nil) respectively. For the period February 11, 2005 (inception) through February 29, 2008, Cavalier has spent a total of $229 on interest expenses related to the terms of the advances from shareholders.

ADVANCES FROM SHAREHOLDERS: In the most recent nine-month period, two shareholders, one of whom was our senior officer and a director, have advanced the Corporation $5,000 and $10,000 for a total of $15,000 to assist the Corporation in its cash requirements and to be able to continue operations. No such advances were records in the previous quarter or nine-month period. The terms of the advances are that


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they are to be prepaid on in late September, early October, 2008 and January 2,009 and bear interest at a rate of five (5%) percent per annum.

NET CASH USED IN OPERATING ACTIVITIES: For the nine month period ended on February 29, 2008, $11,829 in net cash was used as compared to $25,536 having been used in the quarter ended February 28, 2007. A total of $87,177 in net cash has been used for the period from Inception on February 11, 2005 to February 29, 2008.

INCOME TAX PROVISION: As a result of operating losses, there has been no provision for the payment of income taxes to date in 2006, 2007 or from the date of inception.

During the six month period under review, Cavalier sold no shares of its common stock. As of the date of this report Cavalier has 7,490,000 common shares issued and outstanding.

Cavalier continues to carefully control its expenses and overall costs as it moves forward with the development of its business plan. We do not have any employees and engage personnel through outside consulting contracts or agreements or other such arrangements, including for legal, accounting and technical consultants.

EXPLORATION RESULTS

No exploration work has been carried out on our optioned mineral claims in the most recent nine month period. We have been unsuccessful in our efforts to raise the capital required to move ahead with Phase II of the proposed exploration program and have temporarily suspended operation on the Casa claims.

Plan of Operation

Cavalier cannot satisfy its cash requirements for the current fiscal year end of May 31, 2007 with available cash on hand. As of February 29, 2008, we had a deficit of $10,737 in unallocated working capital.

On January 20, 2008, we entered into a share exchange agreement with United Premier Medical Group, a Cayman corporation, and the shareholders of United Premier Medical Group. Pursuant to the terms of the share exchange agreement, we have agreed to acquire all of the issued and outstanding shares of United Premier Medical Group’s common stock in exchange for the issuance by our company of 42,658,000 shares of our common stock to the shareholders of United Premier Medical Group. A copy of the share exchange agreement was attached as Exhibit 2.1 to our 8-K filing on January 21, 2008.

For the balance of the current fiscal year to May 31, 2008 we will concentrate our efforts on completing our planned merger with United Premier Medical Group.

Business of United Premier Medical Group

United Premier Medical Group is principally engaged in the business of infrastructure investment in boutique units in hospitals or medical centres of its business partners and providing hospital management and medical consultation services through co-operation with hospitals and medical institutions in the Peoples Republic of China and Macau on one hand and strategic alliances with medical institutions in the United States and experienced healthcare experts and medical consultants on the other hand.

Terms and Conditions of the Share Exchange Agreement

The following is a brief description of the terms and conditions of the share exchange agreement that are material to our company:

1.

The representations and warranties of United Premier Medical Group, it’s shareholders and our company set forth in the share exchange agreement remain true, correct and complete in all respects as of the closing;

   
2.

All of the covenants and obligations that the respective parties are required to perform or



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to comply with pursuant to the share exchange agreement at or prior to the closing must have been performed and complied with in all material respects;

   
3.

United Premier Medical Group and our company having received duly executed copies of all third party consents and approvals contemplated by the share exchange agreement, if any;

   
4.

United Premier Medical Group and our company having been reasonably satisfied with their due diligence investigations of the other party that is reasonable and customary in a similar transaction;

   
5.

United Premier Medical Group will have delivered to our company audited financial statements prepared in accordance with United States GAAP and audited by an independent auditor registered with the Public Company Accounting Oversight Board in the United States; and

   
6.

our company will adopt resolutions appointing nominees of United Premier Medical Group to the board of directors of our company.

The foregoing description of the share exchange agreement is qualified in its entirety by the contents of the share exchange agreement. Due to conditions precedent to closing, including but not limited to those set out above, and the risk that these conditions precedent will not be satisfied, there is no assurance that we will complete the share exchange.

We do not expect any changes or more hiring of employees since contracts are given on an as needed basis to consultants and sub-contractor specialists in specific fields of expertise for the exploration works.

Presently, our revenues are not sufficient to meet operating and capital expenses. We have incurred operating losses since inception, and this is likely to continue through fiscal 2007 - 2008.

As at February 29, 2008, we had a working capital deficit of $10,737. We do not anticipate that we will be able to satisfy any of these funding requirements internally until we significantly increase our revenues.

Due to the uncertainty of our ability to meet our current operating and capital expenses, in their report on the annual financial statements for the year ended May 31, 2007, our independent auditors included an explanatory paragraph regarding concerns about our ability to continue as a going concern. Our financial statements contain additional note disclosures describing the circumstances that lead to this disclosure by our independent auditors.

There is substantial doubt about our ability to continue as a going concern as the continuation of our business is dependent upon obtaining further financing. The issuance of additional equity securities by us could result in a significant dilution in the equity interests of our current stockholders. Obtaining commercial loans, assuming those loans would be available, will increase our liabilities and future cash commitments.

There can be no assurance that additional financing will be available to us when needed or, if available, that it can be obtained on commercially reasonable terms. If we are not able to obtain the additional financing on a timely basis, we will not be able to meet our obligations as they become due.

Liquidity and Capital Resources

As of end of the last quarter on February 29, 2008, we have yet to generate any revenues from our business operations.

Since inception, we have used our common stock and stockholder advances to raise money for our optioned acquisition and for corporate expenses. Net cash provided by financing activities from inception on February 11, 2005 to February 29, 2008 was $92,500 as a result of gross proceeds received from sales of our common stock and advances from stockholders. We issued 4,000,000 shares of common stock through a Section 4(2) offering in February, 2005 for cash consideration of $4,000. We issued 2,400,000 shares of common stock through a Regulation S offering in April, 2005 for cash consideration of $24,000 to a total


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of 10 placees. Finally, we issued 1,090,000 shares of common stock through a Regulation SB offering in June and July, 2006 for cash consideration of $54,500 to a total of 42 placees. In the latest nine-month period we accepted advances from stockholders totalling $15,000.

As of February 29, 2008, our total assets which consist entirely of cash and prepaid expenses amounted to $5,492 and our total liabilities were $16,229. Working capital stood at negative $10,737.

For the quarter ended February 29, 2008, the net loss was $12,008 ($0.0007 per share). The loss per share was based on a weighted average of 7,490,000 common shares outstanding. For the same period ended February 28, 2007, the corresponding number was a loss of $34,333 ($0.0016 per share) based on 7,490,000 shares outstanding. The net loss from Inception to February 29, 2008 is $92,306.

Inflation / Currency Fluctuations

Inflation has not been a factor during the recent quarter ended February 29, 2008. Inflation is moderately higher than it was during 2006 and 2007 but the actual rate of inflation is not material and is not considered a factor in our contemplated capital expenditure program.

Controls and Procedures

A. Disclosure

Our principal executive and financial officer has, as of the date of this report, evaluated the effectiveness of our disclosure controls and procedures and has concluded that our procedures and controls are effective. There have been no changes in the our internal controls or in other factors that could affect these controls, including any corrective actions with regard to deficiencies and material weaknesses.

B. Internal Control over Financial Reporting

Our certifying officers (principal executive and financial officer)are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14). Our Chief Executive Officer and Chief Financial Officer have:

  a)

designed a framework to evaluate the effectiveness of our internal control over our financial reporting as required by paragraph (c) of Rule 13a-15 or Rule 15d-15 through the use of ongoing review and checks and balances for all transactions and decisions; we have designed disclosure controls and procedures to ensure that material information relating to our affairs, including our consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;

     
  b)

evaluated the effectiveness of our disclosure controls and procedures as of the filing date of this quarterly report (the "Evaluation Date"); and

     
  c)

presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date; and

There have been no changes in the our internal controls or in other factors that could affect these controls including any corrective actions with regard to deficiencies and material weaknesses.


PART II – OTHER INFORMATION

Item 1. Legal Proceedings

The Corporation is and has not been party to any legal proceedings in the preceeding quarter.


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Item 2. Changes in Securities

Cavalier had 7,490,000 shares of common stock issued and outstanding as of April 4, 2008. Of these shares, approximately 4,000,000 shares are held by an affiliate of the Corporation; none of those shares can be resold in compliance with the limitations of Rule 144 as adopted by the Securities Act of 1933, as amended (the “Securities Act”).

In general, under Rule 144, a person who has beneficially owned shares privately acquired directly or indirectly from us or from one of our affiliates, for at least one year, or who is an affiliate, is entitled to sell, within any three-month period, a number of shares that do not exceed the greater of 1% of the then outstanding shares or the average weekly trading volume in our shares during the four calendar weeks immediately preceding such sale. Sales under Rule 144 are also subject to certain manner of sale provisions, notice requirements and the availability of current public information about us. A person who is not deemed to have been an affiliate at any time during the 90 days preceding the sale, and who has beneficially owned restricted shares for at least two years, is entitled to sell all such shares under Rule 144 without regard to the volume limitations, current public information requirements, manner of sale provisions or notice requirements.

The issuances discussed under this section are exempted from registration under Rule 903 of Regulation S of the Securities Act (“Reg. S”) or Section 4(2) of the Securities Act (“Section 4(2)”), as provided. All purchasers of our securities acquired the shares for investment purposes only and all stock certificates reflect the appropriate legends as appropriate. No underwriters were involved in connection with the sale of securities referred to in this report.

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

No matter has been submitted to a vote of security holders during the preceeding quarter.

Item 5. Other Information

Use of Proceeds

Net cash provided by financing activities from inception on February 11, 2005 to February 29, 2008 was $92,500 as a result of proceeds received from sales of our common stock and an advance from a stockholder. During that same period, the following table indicates how the proceeds have been spent:

Professional Fees 20,845
Mineral Interest Exploration Costs 20,603
Office Expenses 24,385
Licenses, Permits and Filing Fees 8,207
Organizational Costs 250
Business Promotion & Public Relations 6,162
Travel and Meals 4,619
Rent 2,400
Interest Paid or Payable 229
Other Costs 706
           Total Use of Proceeds to February 29, 2008 92,306

Common Stock

During the six month period ended February 29, 2008, no shares of common stock were issued. As of February 29, 2008 and April 4, 2008 there were 7,490,000 shares issued and outstanding.

Options

No options were granted during the nine month period ending February 29, 2008.


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Code of Ethics

The Board of Directors on April 30, 2005 adopted a formal written Code of Business Conduct and Ethics and Compliance Program for all officers, directors and senior employees. A copy of the Code of Business Conduct and Ethics is available upon written request by any person without charge. To obtain a copy, an interested party should contact our offices by telephone at (888) 755-9766 or write to 1620 Central Avenue, Suite 202, Cheyenne, Wyoming 82001.

Web Site

Cavalier does not maintain a Web site but has an e-mail address at “cavaliergroup@gmail.com”.

Item 6. Exhibits and Reports on Form 8-K

Reports on Form 8-K filed during the quarter ended February 29, 2008:

  • January 21, 2008 – Entry into a Definitive Material Agreement – The Board of Directors announced entry into a share exchange agreement between The Cavalier Group and United Premier Medical Group.
Exhibits  
   
31.1 Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
   
31.2 Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
   
32.1 Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
   
32.2 Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

SIGNATURES

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

The Cavalier Group
(Registrant)

  Date: April 4, 2008
   
  BY: /s/ “Gerald W. Williams”
     
  Gerald W. Williams, President, Chief Executive Officer, Principal Executive
    Officer, Secretary, Treasurer, Chief Financial Officer, Principal
    Financial Officer and a Member of the Board of Directors
     
  BY: /s/ “Roy D. West”
     
  Roy D. West, Member of the Board of Directors