10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D. C. 20549

FORM 10-Q

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

For the quarterly period ended September 30, 2014

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

Commission file number 000-54583

Delaine Corporation

(Exact name of registrant as specified in its charter)

Nevada

(State or other jurisdiction of incorporation or organization)

393 Crescent Ave, Wyckoff, NJ 07481

(Address of principal executive offices, including zip code.)

(201) 425-4725

(Registrant's telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES x NO ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-Y (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). YES x NO ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a small reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “small reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	¨	Accelerated filer	¨
Non-accelerated filer	¨	Smaller reporting company	x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). YES ¨ NO x

As of November 12, 2014, there are 65,112,813 shares of common stock outstanding.

All references in this Report on Form 10-Q to the terms “we”, “our”, “us”, the “Company”, “Delaine” and the “Registrant” refer to Delaine Corporation unless the context indicates another meaning.

PART I – FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

The unaudited interim financial statements included herein have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). The financial statements and notes are presented as permitted on Form 10-Q and do not contain information included in the Company’s annual statements and notes. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures are adequate to make the information presented not misleading. It is suggested that these financial statements be read in conjunction with the June 30, 2013 audited financial statements and the accompanying notes thereto. While management believes the procedures followed in preparing these financial statements are reasonable, the accuracy of the amounts are in some respects dependent upon the facts that will exist, and procedures that will be accomplished by the Company later in the year. These unaudited financial statements reflect all adjustments, including normal recurring adjustments, which, in the opinion of management, are necessary to present fairly the operations and cash flows for the periods presented.

2

Delaine Corporation

Index to the Financial Statements (Unaudited)

September 30, 2014 (Unaudited)

June 30, 2014

Balance Sheets as of September 30, 2014 (Unaudited) and June 30, 2014	4
Statements of Operations (Unaudited) for the three month periods ended September 30, 2014 and 2013	5
Statements of Cash Flows (Unaudited) for the three month periods ended September 30, 2014 and 2013	6
Notes to the Financial Statements (Unaudited)	7

3

Delaine Corporation

Balance Sheets (Unaudited)

	September 30, 2014			June 30, 2014
ASSETS
Current assets:
Cash	$	128,603		$	123,331
Restricted cash (see Note 3)		73,563			73,563
Accounts receivable		16,619			28,350
Total current assets		218,785			225,244
Property, plant and equipment, net		3,757			3,467
Intangible assets		353,194			353,194
Total assets	$	575,736		$	581,905
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	104,031		$	39,882
Accounts payable - related party		15,347			31,946
Total current liabilities		119,378			71,828
Stockholders' Equity
Preferred stock, par value $0.001, 10,000,000 shares authorized, 400,000 shares issued and outstanding as of September 30, 2013 and June 30, 2013, respectively		400			400
Common stock, par value $0.001, 100,000,000 shares authorized, 65,112,813 issued and outstanding as of September 30, 2014 and June 30, 2014, respectively		65,113			65,113
Additional paid-in capital		759,551			759,551
Retained deficit		(368,706	)		(314,987	)
Total stockholder's equity		456,358			510,077
Total liabilities and stockholder's equity	$	575,736		$	581,905

See accompanying notes to the financial statements (unaudited).

4

Delaine Corporation

Statements of Operations (Unaudited)

	For the Three Months Ended September 30, 2014			For the Three Months Ended September 30, 2013
Net Revenue (gross total transactions of $517,909 and $337,000)	$	124,069		$	125,570
Operating expenses:
Advertising		35,784			15,550
General and administrative		15,866			13,944
Selling		48,639			29,011
Professional fees		9,673			13,968
Executive compensation		67,700			31,600
Depreciation expense		126			82
Total operating expenses		177,788			104,155
Operating income (loss) before income taxes		(53,719	)		21,415
Other income		-			2
Income tax (expense) benefit		-			-
Net income (loss)	$	(53,719	)	$	21,417
Basic and diluted income (loss) per common share	$	(0.00	)	$	(0.00	)
Weighted average shares outstanding		65,112,813			65,012,813

See accompanying notes to the financial statements (unaudited).

5

Delaine Corporation

Statements of Cash Flows (Unaudited)

	For the Quarter Ended September 30, 2014			For the Quarter Ended September 30, 2013
Cash flows from operating activities:
Net income (loss)	$	(53,719	)	$	21,417
Depreciation expense		126			82
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Restricted cash		-			(72,209	)
Accounts receivable		11,731			(4,975	)
Prepaid expenses		-			5,833
Accounts payable		64,149			1,894
Accounts payable - related party		(16,599	)		15,800
Net cash provided by (used in) operating activities		5,688			(32,158	)
Cash flows from investing activities:
Purchase of equipment		(416	)		-
Net cash used in investing activities		(416	)		-
Cash flows from financing activities:
Contributed capital		-			25
Net cash provided by financing activities		-			25
Net increase (decrease) in cash		5,272			(32,133	)
Cash at beginning of period		123,331			41,334
Cash at end of period	$	128,603		$	9,201
Supplemental Information:
Cash paid for interest	$	-		$	-
Cash paid for income taxes	$	-		$	-

See accompanying notes to the financial statements (unaudited).

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Delaine Corporation

Notes to the Financial Statements (Unaudited)

1) BASIS FOR FINANCIAL STATEMENTS

The accompanying financial statements have been prepared by the Company without audit. In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations and cash flows for all periods presented have been made.

Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted. It is suggested that these condensed financial statements be read in conjunction with the financial statements and notes thereto included in the Company's June 30, 2014 audited financial statements as reported in Form 10-K. The results of operations for the period ended September 30, 2014 are not necessarily indicative of the operating results for the full year ended June 30, 2015.

REVENUE RECOGNITION

The Company recognizes revenue under ASC 605 “Revenue Recognition.” Under ASC 605-45, the Company determined that revenues should be recognized on the net revenue reporting method, where the Company only reports the net revenues from the drop shipped transactions. Revenue is recognized when revenues have been collected and the product has been shipped FOB shipper. Gross and net revenue is as follows:

	9/30/2014		9/30/2013
Gross total transactions	$	517,909	$	337,000
Gross cost of total transactions		393,840		211,430
Net revenue	$	124,069	$	125,570

2) RESTRICTED CASH

The Company uses merchant accounts to facilitate sales realized through the Company’s proprietary online sales platform. In accordance with certain merchant account agreements 15% of cash receipts are withheld for a period of up to 12 months to ensure the Company’s creditworthiness. After such period these withholdings are to be deposited in the Company’s bank accounts and become usable. Accordingly, as of September 30, 2014, the Company has classified these reserve balances in merchant accounts as restricted cash, totaling $73,563.

3) RELATED PARTY TRANSACTIONS

In August, 2013, the Company entered into an agreement with its President, wherein the Company agreed to pay a monthly salary of $15,800 in exchange for services to be rendered. Furthermore, the Company entered into an agreement with its Chief Technology Officer (“CTO”) pursuant to which terms the Company agreed to pay a monthly salary of $6,500. These compensation amounts have been recorded in executive compensation for the period ended September 30, 2014, totaling $47,400 for the President and $20,300 for the CTO. Of this amount, $15,347 has yet to be paid and is recorded in accounts payable – related party as of September 30, 2014, ( $31,946 at June 30, 2014).

4) PROVISION FOR INCOME TAXES

The Financial Accounting Standards Board (FASB) has issued FASB ASC 740-10 (Prior authoritative literature: Financial Interpretation No. 48, "Accounting for Uncertainty in Income Taxes - An Interpretation of FASB Statement No. 109 (FIN 48)). FASB ASC 740-10 clarifies the accounting for uncertainty in income taxes recognized in an enterprise's financial statements in accordance with prior literature FASB Statement No. 109, Accounting for Income Taxes. This standard requires a company to determine whether it is more likely than not that a tax position will be sustained will be sustained upon examination based upon the technical merits of the position. If the more-likely-than- not threshold is met, a company must measure the tax position to determine the amount to recognize in the financial statements. As a result of the implementation of this standard, the Company performed a review of its material tax positions in accordance with recognition and measurement standards established by FASB ASC 740-10. 

7

Delaine Corporation

Notes to the Financial Statements (Unaudited)

4) PROVISION FOR INCOME TAXES (CONTINUED)

Deferred taxes are provided on a liability method whereby deferred tax assets are recognized for deductible temporary differences and operating loss and tax credit carry-forwards and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax basis. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.

The income tax provision differs from the amount of income tax determined by applying the U.S. federal and state income tax rates of 43% to pretax income from continuing operations for the quarters ended September 30, 2014 and 2013 due to the following:

	For the Quarter Ended September 30, 2014			For the Quarter Ended September 30, 2013
Deferred tax asset:
Net operating loss carryforward	$	103,430		$	133,130
Valuation allowance		(103,430	)		(133,130	)
Total	$	-		$	-

The components of income tax expense are as follows:

	For the Quarter Ended September 30, 2014			For the Quarter Ended September 30, 2013
Current Federal Tax	$	(18,264	)	$	7,281
Current State Tax		(4,835	)		1,927
Use of NOL and Rate Difference		-			(9,208	)
Change in NOL benefit		-			30,698
Change in valuation allowance		23,099			(30,698	)
Total	$	-		$	-

The potential income tax benefit of these losses has been offset by a full valuation allowance.

As of September 30, 2014, the Company has an unused net operating loss carry-forward balance of $240,536 that is available to offset future taxable income. This unused net operating loss carry-forward balance begins to expire in 2033. The Company also has operating losses of approximately $78,550 which expire beginning in 2030. However, due to a change in control and line of business, the losses are suspended. These losses have not been considered in the deferred tax asset calculation as of September 30, 2014.

8

Delaine Corporation

Notes to the Financial Statements (Unaudited)

4) PROVISION FOR INCOME TAXES (CONTINUED)

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:

	For the Quarter Ended September 30, 2014		For the Quarter Ended September 30, 2013
Beginning balance	$	-	$	-
Additions based on tax positions related to current year		-		-
Additions for tax positions of prior years		-		-
Reductions for tax positions of prior years		-		-
Reductions in benefit due to income tax expense		-		-
Ending balance	$	-	$	-

At September 30, 2014, the Company had no unrecognized tax benefits that, if recognized, would affect the effective tax rate.

The Company did not have any tax positions for which it is reasonably possible that the total amount of unrecognized tax benefits will significantly increase or decrease within the next 12 months. 

As of September 30, 2014 and 2013, the Company had no accrued interest or penalties related to uncertain tax positions.

The tax years that remain subject to examination by major taxing jurisdictions are those since June 23, 2010 (Inception) through the year ended June 30, 2014.

5) GOING CONCERN AND LIQUIDITY CONSIDERATIONS

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates, among other things, the realization of assets and satisfaction of liabilities in the normal course of business. As of September 30, 2014 and June 30, 2014, the Company has a retained deficit of $368,706 and $314,987, respectively. The Company intends to fund operations through equity financing arrangements, which may be insufficient to fund its capital expenditures, working capital and other cash requirements for the next twelve months.

6) ADVERTISING COSTS

The Company expenses advertising costs as incurred. Advertising expenses were $35,784 and $15,550 for the three months ended September 30, 2014 and 2013, respectively.

7) SUBSEQUENT EVENTS

The Company has evaluated its subsequent events from the balance sheet date through the date of issuance and determined that there are no additional events to disclose.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion is an overview of the important factors that management focuses on in evaluating our business; financial condition and operating performance should be read in conjunction with the financial statements included in this Quarterly Report on Form 10-Q. This discussion contains forward-looking statements that involve risks and uncertainties. Actual results could differ materially from those anticipated in these forward-looking statements as a result of any number of factors, including those set forth in the Company’s reports filed with the SEC on Form 10-K, 10-Q and 8-K as well as in this Quarterly Report on Form 10-Q. Given the uncertainties that surround such statements, you are cautioned not to place undue reliance on such forward-looking statements.

Our Company

Delaine Corporation (the “Company”) was incorporated on September 23, 2010 in the State of Nevada. The Company’s accounting and reporting policies conform to accounting principles generally accepted in the United States of America, and the Company’s fiscal year end is September 30. Pursuant to the Reorganization Agreement entered into in September 2012, the Company’s development and operations are to provide online sales of recycled automotive parts using the Company sole’s and exclusive license to certain proprietary technology relating to online procurement of goods (the “Technology”). During the fourth quarter of fiscal year ended September 30, 2013 we launched our online store under the brand Car Monkeys, to introduce our product line to the marketplace. During the three months ended September 30, 2013 we commenced operating our second website under the brand Low Mileage Parts. As of the first quarter of fiscal 2014 we were no longer in the Development Stage.

As an online retailer, we believe we have a significant competitive advantage over traditional retailers in that we do not have to invest in and maintain substantial inventory. Through our proprietary software, we match our customers’ demand with our suppliers’ products and create a virtual ‘Just-in-Time’ inventory system.

Results of Operations

We realized $124,069 in net revenue during the three months ended September 30, 2014 from gross transactions of $517,909. Our gross transactions cost, consisting of supplier payments and shipping cost was $393,840. We realized $125,570 in net revenue during the three months ended September 30, 2013 from gross transactions of $337,000.

Our net revenue of $124,069 compares to $125,570 in net revenue for the three months ended September 30, 2013. The Company had a net operating loss of $53,719 for the three months ended September 30, 2014 compared to net operating income of $21,415 for the three months ended September 30, 2013. The net operating loss was due to increases in our operating expenses, in 2014 such as increased advertising and selling commission expenses from increasing our gross transactions substantially from the prior year. In addition, our executives are now being compensated at a fixed monthly amount, which was not the case in the prior year.

To date, our transactions are entirely from sales of rebuilt engines, transmissions and rear axle assemblies. We intend to use our net income to increase our search engine key word advertising to include smaller rebuilt parts such as starters and alternators.

We expect the trend of increasing transactions to continue as we build our CarMonkeys.com brand and increase search engine key word advertising. At present we are only purchasing key word advertising for rebuilt engines, transmissions and rear axle assemblies. We are also seeking to find additional suppliers for these and other parts.

10

Quarter Ended September 30, 2014 Compared to Quarter Ended September 30, 2013.

Operating Expenses:

Executive compensation of $67,700 for the three months ended September 30, 2014 increased from $31,600 for the three months ended September 30, 2013. The increase was due to employment agreements entered into late in the September 2013 quarter under which the President receives compensation of $15,800 per month and the Chief Technology Officer receives compensation of $6,500 per month. Sales commission expense was $48,639 for the three months ended September 30, 2014 compared to $29,011 for the three months ended September 30, 2013 and reflects our increase in total transactions. Advertising expense was $35,784 for the three months ended September 30, 2014 compared to $15,550 for the three months ended September 30, 2013 and reflects our increase in keyword search engine advertising. Professional fees were $9,673 consisting primarily of accounting and legal fees for the three months ended September 30, 2014, while professional fees were $13,968 for the three months ended September 30, 2013.

Liquidity and Capital Resources

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates, among other things, the realization of assets and satisfaction of liabilities in the normal course of business. As of September 30, 2014 and June 30, 2014 respectively, the Company had unrestricted cash of $128,603 and $123,331. The retained deficit for these respective periods is $368,706 and $314,987, an increase of 17% due to the net loss for the quarter. Our intangible assets of $353,194 are the intellectual property.

The Company uses merchant accounts to facilitate sales realized through the Company’s proprietary online sales platform. In accordance with certain merchant account agreements 15% of cash receipts up to a certain maximum amount are withheld for a period of 6 to 12 months to ensure the Company’s creditworthiness. After such period these withholdings are to be deposited in the Company’s bank accounts and become usable. Accordingly, as of September 30, 2014, the Company has classified these merchant account reserve balances as restricted cash, totaling $73,563 compared to $73,563 for the year ended June 30, 2014.

We intend to use our net income and seek investment capital to increase our search engine key word advertising.

As of September 30, 2014 and June 30, 2014 respectively, current liabilities totaled $119,378 and $71,828. Accounts payable were $104,031 as of September 30, 2014 compared to $39,882 as of June 30, 2014. The increase in accounts payable related to shipping costs due to a higher gross transaction volume during the quarter. In addition there was approximately $22,000 of accounts payable recorded which represents shipping costs incurred in the fourth quarter which were incorrectly invoiced by one of our shippers. The shipper’s invoices have now been corrected and such a delay in recording the accounts payable is not expected to reoccur. As of September 30, 2014 we had accounts payable related party representing compensation due to our president of $15,347 compared to $31,946 for the year ended June 30, 2014, a decrease of 52%, as the company was able to pay the President with cash rather than accruing most of his compensation.

The successful execution of our business plan requires significant cash resources. Because of our limited operating history, equity or debt financing arrangements may not be available in amounts and on terms acceptable to us, if at all. Additionally, because we intend to rely upon the sale of additional equity securities, there is a risk that your shares will suffer additional dilution. Furthermore, if we incur additional indebtedness there is a risk that increased debt service obligations will restrict our operations. To the extent that additional capital is raised through the sale of equity or convertible debt securities, the issuance of these securities could result in further dilution to our stockholders.

As of September 30, 2014 and September 30, 2013, we had no material commitments for capital expenditures.

11

Off Balance Sheet Arrangements

None.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information required under this item.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we have conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities and Exchange Act of 1934, as of the end of the period covered by this report. Based on this evaluation, our principal executive officer and principal financial officer concluded as of the evaluation date that our disclosure controls and procedures were effective such that information to be included in our Securities and Exchange Commission reports was correctly reported within the time periods specified in SEC rules and forms relating to our company, during the period when this report was being prepared.

Changes in internal controls over financial reporting

There was no change in our internal control over financial reporting during the quarter ended September 30, 2014 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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PART II – OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

Currently we are not involved in any pending litigation or legal proceeding.

ITEM 1A. RISK FACTORS

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item. 

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

None.

ITEM 5. OTHER INFORMATION

None.

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ITEM 6. EXHIBITS

The following documents are filed as a part of this report or are incorporated by reference to previous filings, if so indicated:

Exhibit No.	Description
31.1	Section 302 Certification of Chief Executive Officer
31.2	Section 302 Certification of Chief Financial Officer
32.1	Section 906 Certification of Chief Executive Officer
32.2	Section 906 Certification of Chief Financial Officer

101.INS **	XBRL Instance Document
101.SCH **	XBRL Taxonomy Extension Schema Document
101.CAL **	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF **	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB **	XBRL Taxonomy Extension Label Linkbase Document
101.PRE **	XBRL Taxonomy Extension Presentation Linkbase Document

___________

** XBRL (Extensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.

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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.

	DELAINE CORPORATION
November 14, 2014	By:	/s/ Mariusz Girt
		Mariusz Girt, President

15

EX-31.1

EXHIBIT 31.1

SARBANES-OXLEY SECTION 302(a) CERTIFICATION

I, Mariusz Girt, certify that:

1.	I have reviewed this 10-Q for the quarter ended September 30, 2014 of Delaine Corporation;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules and 15d-15(e) for the registrant and have:
	a.	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
	b.	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
	c.	Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
	d.	Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
5.	The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
	a.	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
	b.	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: November 14, 2014	By:	/s/ Mariusz Girt
		Mariusz Girt, CEO

EX-31.2

EXHIBIT 31.2

SARBANES-OXLEY SECTION 302(a) CERTIFICATION

I, Pawel Girt, certify that:

1.	I have reviewed this 10-Q for the quarter ended September 30, 2014 of Delaine Corporation;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules and 15d-15(e) for the registrant and have:
	a.	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
	b.	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
	c.	Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
	d.	Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
5.	The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
	a.	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
	b.	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: November 14, 2014	By:	/s/ Pawel Girt
		Pawel Girt, CFO

EX-32.1

EXHIBIT 32.1

CERTIFICATION PURSUANT TO 

18 U.S.C. Section 1350, 

AS ADOPTED PURSUANT TO 

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Delaine Corporation, (the "Company") on Form 10-Q for the quarter ended September 30, 2014, as filed with the Securities and Exchange Commission on the date hereof (the "report"), I, Mariusz Girt, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1)	The Report fully complies with the requirements of Section 13 (a) or 15 (d) of the Securities Exchange Act of 1934; and
(2)	The information contained in this Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: November 14, 2014	By:	/s/ Mariusz Girt
		Mariusz Girt, Chief Executive Officer

EX-32.2

EXHIBIT 32.2

CERTIFICATION PURSUANT TO 

18 U.S.C. Section 1350, 

AS ADOPTED PURSUANT TO 

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Delaine Corporation, (the "Company") on Form 10-Q for the quarter ended September 30, 2014, as filed with the Securities and Exchange Commission on the date hereof (the "report"), I, Pawel Girt, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1)	The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)	The information contained in this Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: November 14, 2014	By:	/s/ Pawel Girt
		Pawel Girt, Chief Financial Officer

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PROVISION FOR INCOME TAXES

3 Months Ended

Sep. 30, 2014

Notes to Financial Statements

Note 4 - PROVISION FOR INCOME TAXES

The Financial Accounting Standards Board (FASB) has issued FASB ASC 740-10 (Prior authoritative literature: Financial Interpretation No. 48, "Accounting for Uncertainty in Income Taxes - An Interpretation of FASB Statement No. 109 (FIN 48)). FASB ASC 740-10 clarifies the accounting for uncertainty in income taxes recognized in an enterprise's financial statements in accordance with prior literature FASB Statement No. 109, Accounting for Income Taxes. This standard requires a company to determine whether it is more likely than not that a tax position will be sustained will be sustained upon examination based upon the technical merits of the position. If the more-likely-than- not threshold is met, a company must measure the tax position to determine the amount to recognize in the financial statements. As a result of the implementation of this standard, the Company performed a review of its material tax positions in accordance with recognition and measurement standards established by FASB ASC 740-10. 

Deferred taxes are provided on a liability method whereby deferred tax assets are recognized for deductible temporary differences and operating loss and tax credit carry-forwards and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax basis. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.

The income tax provision differs from the amount of income tax determined by applying the U.S. federal and state income tax rates of 43% to pretax income from continuing operations for the quarters ended September 30, 2014 and 2013 due to the following:

	For the Quarter Ended September 30, 2014			For the Quarter Ended September 30, 2013
Deferred tax asset:
Net operating loss carryforward	$	103,430		$	133,130
Valuation allowance		(103,430	)		(133,130	)
Total	$	-		$	-

The components of income tax expense are as follows:

	For the Quarter Ended September 30, 2014			For the Quarter Ended September 30, 2013
Current Federal Tax	$	(18,264	)	$	7,281
Current State Tax		(4,835	)		1,927
Use of NOL and Rate Difference		-			(9,208	)
Change in NOL benefit		-			30,698
Change in valuation allowance		23,099			(30,698	)
Total	$	-		$	-

The potential income tax benefit of these losses has been offset by a full valuation allowance.

As of September 30, 2014, the Company has an unused net operating loss carry-forward balance of $240,536 that is available to offset future taxable income. This unused net operating loss carry-forward balance begins to expire in 2033. The Company also has operating losses of approximately $78,550 which expire beginning in 2030. However, due to a change in control and line of business, the losses are suspended. These losses have not been considered in the deferred tax asset calculation as of September 30, 2014.

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:

	For the Quarter Ended September 30, 2014		For the Quarter Ended September 30, 2013
Beginning balance	$	-	$	-
Additions based on tax positions related to current year		-		-
Additions for tax positions of prior years		-		-
Reductions for tax positions of prior years		-		-
Reductions in benefit due to income tax expense		-		-
Ending balance	$	-	$	-

At September 30, 2014, the Company had no unrecognized tax benefits that, if recognized, would affect the effective tax rate.

The Company did not have any tax positions for which it is reasonably possible that the total amount of unrecognized tax benefits will significantly increase or decrease within the next 12 months. 

As of September 30, 2014 and 2013, the Company had no accrued interest or penalties related to uncertain tax positions.

The tax years that remain subject to examination by major taxing jurisdictions are those since June 23, 2010 (Inception) through the year ended June 30, 2014.

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RELATED PARTY TRANSACTIONS

3 Months Ended

Sep. 30, 2014

Notes to Financial Statements

Note 3 - RELATED PARTY TRANSACTIONS

In August, 2013, the Company entered into an agreement with its President, wherein the Company agreed to pay a monthly salary of $15,800 in exchange for services to be rendered. Furthermore, the Company entered into an agreement with its Chief Technology Officer (“CTO”) pursuant to which terms the Company agreed to pay a monthly salary of $6,500. These compensation amounts have been recorded in executive compensation for the period ended September 30, 2014, totaling $47,400 for the President and $20,300 for the CTO. Of this amount, $15,347 has yet to be paid and is recorded in accounts payable – related party as of September 30, 2014, ( $31,946 at June 30, 2014).

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Balance Sheets (USD $)	Sep. 30, 2014	Jun. 30, 2014
Current assets:
Cash	$ 128,603	$ 123,331
Restricted cash (see Note 3)	73,563	73,563
Accounts receivable	16,619	28,350
Total current assets	218,785	225,244
Property, plant and equipment, net	3,757	3,467
Intangible assets	353,194	353,194
Total assets	575,736	581,905
Current liabilities:
Accounts payable	104,031	39,882
Accounts payable - related party	15,347	31,946
Total current liabilities	119,378	71,828
Stockholders' Equity
Preferred stock, par value $0.001, 10,000,000 shares authorized, 400,000 shares issued and outstanding as of September 30, 2013 and June 30, 2013, respectively	400	400
Common stock, par value $0.001, 100,000,000 shares authorized, 65,112,813 issued and outstanding as of September 30, 2014 and June 30, 2014, respectively	65,113	65,113
Additional paid-in capital	759,551	759,551
Retained deficit	(368,706)	(314,987)
Total stockholder's equity	456,358	510,077
Total liabilities and stockholder's equity	$ 575,736	$ 581,905

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BASIS FOR FINANCIAL STATEMENTS

3 Months Ended

Sep. 30, 2014

Notes to Financial Statements

Note 1 - BASIS FOR FINANCIAL STATEMENTS

The accompanying financial statements have been prepared by the Company without audit. In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations and cash flows for all periods presented have been made. 

Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted. It is suggested that these condensed financial statements be read in conjunction with the financial statements and notes thereto included in the Company's June 30, 2014 audited financial statements as reported in Form 10-K. The results of operations for the period ended September 30, 2014 are not necessarily indicative of the operating results for the full year ended June 30, 2015.

REVENUE RECOGNITION

The Company recognizes revenue under ASC 605 “Revenue Recognition.” Under ASC 605-45, the Company determined that revenues should be recognized on the net revenue reporting method, where the Company only reports the net revenues from the drop shipped transactions. Revenue is recognized when revenues have been collected and the product has been shipped FOB shipper. Gross and net revenue is as follows:

	9/30/2014		9/30/2013
Gross total transactions	$	517,909	$	337,000
Gross cost of total transactions		393,840		211,430
Net revenue	$	124,069	$	125,570

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GOING CONCERN AND LIQUIDITY CONSIDERATIONS (Details Narrative) (USD $)	Sep. 30, 2014	Jun. 30, 2014
Going Concern And Liquidity Considerations Details Narrative
Retained deficit	$ 368,706	$ 314,987

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RESTRICTED CASH

3 Months Ended

Sep. 30, 2014

Notes to Financial Statements

Note 2 - RESTRICTED CASH

The Company uses merchant accounts to facilitate sales realized through the Company’s proprietary online sales platform. In accordance with certain merchant account agreements 15% of cash receipts are withheld for a period of up to 12 months to ensure the Company’s creditworthiness. After such period these withholdings are to be deposited in the Company’s bank accounts and become usable. Accordingly, as of September 30, 2014, the Company has classified these reserve balances in merchant accounts as restricted cash, totaling $73,563.

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Balance Sheets (Parenthetical) (USD $)	Sep. 30, 2014	Jun. 30, 2014
Stockholders' Deficit
Preferred stock, par value	$ 0.001	$ 0.001
Preferred stock, authorized	10,000,000	10,000,000
Preferred stock, issued	400,000	400,000
Preferred stock, outstanding	400,000	400,000
Common stock, par value	$ 0.001	$ 0.001
Common stock, authorized	100,000,000	100,000,000
Common stock, issued	65,112,813	65,112,813
Common stock, outstanding	65,112,813	65,112,813

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RELATED PARTY TRANSACTIONS (Details Narrative) (USD $)	Sep. 30, 2014	Jun. 30, 2014
Related Party Transactions Details Narrative
Accounts payable - related party	$ 15,347	$ 31,946
Executive compensation to president	47,400
Executive compensation to CTO	$ 20,300

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Document and Entity Information	3 Months Ended
	Sep. 30, 2014	Nov. 12, 2014
Document And Entity Information
Entity Registrant Name	Delaine Corp
Entity Central Index Key	0001496139
Document Type	10-Q
Document Period End Date	Sep. 30, 2014
Amendment Flag	false
Current Fiscal Year End Date	--06-30
Is Entity a Well-known Seasoned Issuer?	No
Is Entity a Voluntary Filer?	No
Is Entity's Reporting Status Current?	Yes
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		65,112,813
Document Fiscal Period Focus	Q1
Document Fiscal Year Focus	2015

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PROVISION FOR INCOME TAXES (Details) (USD $)	Sep. 30, 2014	Jun. 30, 2013
Provision For Income Taxes Details
Net operating loss carryforward	$ 103,430	$ 133,130
Valuation allowance	(103,430)	(133,130)
Total

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Statements of Operations (Unaudited) (USD $)	3 Months Ended
	Sep. 30, 2014	Sep. 30, 2013
Statements Of Operations
Net Revenue (gross total transactions of $517,909 and $337,000)	$ 124,069	$ 125,570
Operating expenses:
Advertising	35,784	15,550
General and administrative	15,866	13,944
Selling	48,639	29,011
Professional fees	9,673	13,968
Executive compensation	67,700	31,600
Depreciation expense	126	82
Total operating expenses	177,788	104,155
Operating income (loss) before income taxes	(53,719)	21,415
Other income		2
Income tax (expense) benefit
Net income (loss)	$ (53,719)	$ 21,417
Basic and diluted income (loss) per common share	$ 0.00	$ 0.00
Weighted average shares outstanding	65,112,813	65,012,813

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SUBSEQUENT EVENTS

3 Months Ended

Sep. 30, 2014

Notes to Financial Statements

Note 7 - SUBSEQUENT EVENTS

The Company has evaluated its subsequent events from the balance sheet date through the date of this issuance and determined that there are no additional events to disclose.

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ADVERTISING COSTS

3 Months Ended

Sep. 30, 2014

Notes to Financial Statements

Note 6 - ADVERTISING COSTS

The Company expenses advertising costs as incurred. Advertising expenses were $35,784 and $15,550 for the three months ended September 30, 2014 and 2013, respectively.

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ADVERTISING COSTS (Details Narrative) (USD $)	3 Months Ended
	Sep. 30, 2014	Sep. 30, 2013
Advertising Costs Details Narrative
Advertising expenses	$ 35,784	$ 15,550

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PROVISION FOR INCOME TAXES (Details 1) (USD $)	3 Months Ended
	Sep. 30, 2014	Sep. 30, 2013
Provision For Income Taxes Details 1
Current Federal Tax (Benefit)	$ (18,264)	$ 7,281
Current State Tax (Benefit)	(4,835)	1,927
Use of NOL and Rate Difference		(9,208)
Change in NOL benefit		30,698
Change in valuation allowance	23,099	(30,698)
Total

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BASIS FOR FINANCIAL STATEMENTS (Details) (USD $)	3 Months Ended
	Sep. 30, 2014	Sep. 30, 2013
Basis For Financial Statements Details
Gross total transactions	$ 517,909	$ 337,000
Gross cost of total transactions	393,840	211,430
Net revenue	$ 124,069	$ 125,570

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BASIS FOR FINANCIAL STATEMENTS (Tables)

3 Months Ended

Sep. 30, 2014

Basis For Financial Statements Tables

Revenue Recognition

	9/30/2014		9/30/2013
Gross total transactions	$	517,909	$	337,000
Gross cost of total transactions		393,840		211,430
Net revenue	$	124,069	$	125,570

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PROVISION FOR INCOME TAXES (Tables)

3 Months Ended

Sep. 30, 2014

Provision For Income Taxes Tables

Income tax provision

	For the Quarter Ended September 30, 2014			For the Quarter Ended September 30, 2013
Deferred tax asset:
Net operating loss carryforward	$	103,430		$	133,130
Valuation allowance		(103,430	)		(133,130	)
Total	$	-		$	-

The components of income tax expense

The components of income tax expense are as follows:

	For the Quarter Ended September 30, 2014			For the Quarter Ended September 30, 2013
Current Federal Tax	$	(18,264	)	$	7,281
Current State Tax		(4,835	)		1,927
Use of NOL and Rate Difference		-			(9,208	)
Change in NOL benefit		-			30,698
Change in valuation allowance		23,099			(30,698	)
Total	$	-		$	-

Unrecognized tax benefits

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:

	For the Quarter Ended September 30, 2014		For the Quarter Ended September 30, 2013
Beginning balance	$	-	$	-
Additions based on tax positions related to current year		-		-
Additions for tax positions of prior years		-		-
Reductions for tax positions of prior years		-		-
Reductions in benefit due to income tax expense		-		-
Ending balance	$	-	$	-

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RESTRICTED CASH (Details Narrative) (USD $)	Sep. 30, 2014
Restricted Cash Details Narrative
Restricted cash	$ 73,563

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PROVISION FOR INCOME TAXES (Details Narrative) (USD $)	3 Months Ended
	Sep. 30, 2014	Sep. 30, 2013
Provision For Income Taxes Details Narrative
Federal and state income tax rates	43.00%	43.00%
Operating loss carry forwards	$ 240,536
Operating loss carry forwards expiration year	2033
Operating losses	$ 78,550
Operating loss expiration year	2030

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Statements of Cash Flows (Unaudited) (USD $)	3 Months Ended
	Sep. 30, 2014	Sep. 30, 2013
Cash flows from operating activities:
Net income (loss)	$ (53,719)	$ 21,417
Depreciation expense	126	82
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Restricted cash		(72,209)
Accounts receivable	11,731	(4,975)
Prepaid expenses		5,833
Accounts payable	64,149	1,894
Accounts payable - related party	(16,599)	15,800
Net cash provided by (used in) operating activities	5,688	(32,158)
Purchase of equipment	(416)
Net cash used in investing activities	(416)
Cash flows from financing activities:
Contributed capital		25
Net cash provided by financing activities		25
Net increase (decrease) in cash	5,272	(32,133)
Cash at beginning of period	123,331	41,334
Cash at end of period	128,603	9,201
Supplemental Information:
Cash paid for interest
Cash paid for income taxes

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GOING CONCERN AND LIQUIDITY CONSIDERATIONS

3 Months Ended

Sep. 30, 2014

Notes to Financial Statements

Note 5 - GOING CONCERN AND LIQUIDITY CONSIDERATIONS

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates, among other things, the realization of assets and satisfaction of liabilities in the normal course of business. As of September 30, 2014 and June 30, 2014, the Company has a retained deficit of $368,706 and $314,987, respectively. The Company intends to fund operations through equity financing arrangements, which may be insufficient to fund its capital expenditures, working capital and other cash requirements for the next twelve months.

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PROVISION FOR INCOME TAXES (Details 2) (USD $)	3 Months Ended
	Sep. 30, 2014	Sep. 30, 2013
Provision For Income Taxes Details 2
Additions based on tax positions related to current year
Additions for tax positions of prior years
Reductions for tax positions of prior years
Reductions in benefit due to income tax expense