UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

———————

FORM 10-Q

———————

(Mark One)


ü	QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
	ACT OF 1934
For the quarterly period ended May 31, 2009

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

For the transition period from _____________ to _____________

Commission file number 333-153920

———————

PEERLESS CAPITAL CORPORATION

(Exact name of small business issuer as specified in its charter)

———————


Delaware	26-3265417
State or other jurisdiction of	(IRS Employer
Incorporation or organization	Identification Number)

139 Charles Street, Suite 344, Massachusetts 02114

(Address of principal executive offices) (Zip Code)

(617) 374-9200

(Issuer’s telephone number, including area code)

(Former name, former address and former fiscal year, if changed)

———————


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.			ü	Yes		No

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

Large Accelerated filer		Accelerated filer
Non-accelerated filer	(Do not check if a smaller	Smaller reporting Company			ü
	reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act.)
			ü	Yes		No

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS:

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

APPLICABLE ONLY TO CORPORATE ISSUERS

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
2,700,000 common shares outstanding as of August 31, 2009.

PEERLESS CAPITAL CORPORATION

TABLE OF CONTENTS

Page

PART I — FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS.

BALANCE SHEETS

STATEMENTS OF OPERATIONS

STATEMENTS OF CASH FLOWS

NOTES TO FINANCIAL STATEMENTS

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

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

ITEM 4T. CONTROLS AND PROCEDURES

PART II — OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

ITEM 1A. RISK FACTORS

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

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

ITEM 5. OTHER INFORMATION.

ITEM 6. EXHIBITS.

Certification of CEO Pursuant to Section 302

Certification of CFO Pursuant to Section 302

Certification of Officers Pursuant to Section 906

PART I — FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS.

PEERLESS CAPITAL CORPORATION
(A DEVELOPMENT STAGE COMPANY)

BALANCE SHEETS


	May 31, 2009			August 31, 2008
		(Unaudited)			(Audited)
ASSETS
Current Assets
Cash & Cash Equivalents	$	2		$	3,052
Prepaid Expenses		—			620
Total Current Assets		2			3,672
TOTAL ASSETS	$	2		$	3,672

LIABILITIES & SHAREHOLDERS’ (DEFICIT) EQUITY
Current Liabilities
Accounts Payable and Accrued Expenses	$	150		$	—
Related Party Payable (Note 5 and 7)		20,427			218
Total Current Liabilities		20,577			218


TOTAL LIABILITIES		20,577			218

Commitments & Contingencies (Note 10)

Shareholders’ (Deficit) Equity (Note 8)
Preferred Stock, Series A, $.0001 par value; 10,000,000 shares authorized, 2,950,000 shares issued and outstanding at May 31, 2009 and August 31, 2008, respectively		295			295
Common Stock, $.0001 par value; 500,000,000 shares authorized, 2,700,000 and 2,550,000 shares issued and outstanding at May 31, 2009 and August 31, 2008, respectively		270			255
Stock Subscription Receivable		—			(27,118	)
Shares to be Returned		(10	)		—
Additional Paid-in Capital		32,240			31,620
Accumulated Deficit		(53,370	)		(1,598	)
Total Shareholders' (Deficit) Equity		(20,575	)		3,454
TOTAL LIABILITIES AND SHAREHOLDERS' (DEFICIT) EQUITY	$	2		$	3,672

The Accompanying Notes Are an Integral Part of these Consolidated Financial Statements

PEERLESS CAPITAL CORPORATION
(A DEVELOPMENT STAGE COMPANY)

STATEMENTS OF OPERATIONS

(Unaudited)



	Three Months Ended May 31,					Nine Months Ended May 31,					Cumulative Period From August 21, 2008 (Inception of the Development Stage) Through May 31, 2009
	2009			2008		2009			2008

Net Sales	$	—		$	—	$	—		$	—	$	—
Cost of Sales		—			—		—			—		—
Gross Profit (Loss)		—			—		—			—		—

Operating Expenses
Professional Fees		3,000			—		37,143			—		38,523
Stock Based Compensation		—			—		1,875			—		1,875
Selling, General and Administrative Expenses		8,825			—		12,754			—		12,972

Total Operating Expenses		11,825			—		51,772			—		53,370

Loss From Operations		(11,825	)		—		(51,772	)		—		(53,370	)

Provision for Income Taxes		—			—		—			—		—

Net Loss	$	(11,825	)	$	—	$	(51,772	)	$	—	$	(53,370	)

Loss Per Common Share
Basic	$	(0.00	)	$	0.00	$	(0.02	)	$	0.00
Diluted	$	(0.00	)	$	0.00	$	(0.02	)	$	0.00

Weighted-Average Shares Used to Compute:
Basic		2,700,000			—		2,699,451			—
Diluted		2,700,000			—		2,699,451			—

The Accompanying Notes Are an Integral Part of these Consolidated Financial Statements

PEERLESS CAPITAL CORPORATION
(A DEVELOPMENT STAGE COMPANY)

STATEMENTS OF CASH FLOWS

(Unaudited)


	Nine Months Ended May 31,					Cumulative Period From August 21, 2008 (Inception of the Development Stage) Through May 31, 2009
	2009			2008
CASH USED IN OPERATING ACTIVITIES
Net Loss	$	(51,772	)	$	—	$	(53,370	)
Adjustments to Reconcile Net Income to Net Cash Used in Operating Activities
Stock Issued for Services		1,875			—		1,875
Changes in Operating Assets and Liabilities
(Increase) Decrease in Prepaid Expenses		620			—		—
(Decrease) Increase in Accounts Payable and Accrued Expenses		150			—		150
NET CASH USED IN OPERATING ACTIVITIES		(49,127	)		—		(51,345	)

CASH PROVIDED BY FINANCING ACTIVITIES:
Net Proceeds From Issuance of Stock		27,118			—		32,170
Proceeds From Related Party		32,811			—		33,029
Repayments to Related Party		(12,602	)		—		(12,602	)
Refund of Cash to Investor		(1,250	)		—		(1,250	)
NET CASH PROVIDED BY FINANCING ACTIVITIES		46,077			—		51,347

NET INCREASE (DECREASE) IN CASH & CASH EQUIVALENTS		(3,050	)		—		2
BEGINNING CASH & CASH EQUIVALENTS		3,052			—		—
ENDING CASH & CASH EQUIVALENTS	$	2		$	—	$	2

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash Paid for Interest	$	—		$	—
Cash Paid for Income Taxes	$	—		$	—

The Accompanying Notes Are an Integral Part of these Consolidated Financial Statements

PEERLESS CAPITAL CORPORATION

(A DEVELOPMENT STAGE COMPANY)

NOTES TO FINANCIAL STATEMENTS

NOTE 1 – NATURE OF BUSINESS

The Company’s business plan is to further develop management’s existing contacts in the financial and entrepreneurial industries in Asia and the United States of America and generate revenues from advising entrepreneurs in Asia with regard to doing business in the United States of America. Management expects to advise their customers in the areas of general business operations, mergers and acquisitions, and international business. However, management has no proven track record in these fields and there is no assurance that management possesses the skills necessary to further develop this business and the financial and entrepreneurial contacts in Asia and the United States of America.

Control By Principal Stockholders

The directors and executive officers own beneficially and in the aggregate, the majority of the voting power of the outstanding shares of the Company. Accordingly, the directors, executive officers and their affiliates, if they voted their shares uniformly, would have the ability to control the approval of most corporate actions, including increasing the authorized capital stock of the Company and the dissolution, merger or sale of the Company’s assets or business.

NOTE 2 – BASIS OF PRESENTATION

These condensed interim consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“US GAAP”).

The interim results of operations are not necessarily indicative of the results to be expected for the fiscal year ending August 31, 2009. The Company’s financial statements contained herein are unaudited and, in the opinion of management, contain all adjustments (consisting only of normal recurring accruals) necessary for a fair presentation of financial position, results of operations and cash flows for the period presented. The Company’s accounting policies and certain other disclosures are set forth in the notes to the consolidated financial statements contained in the Company’s Form S-1, as amended, for the year ended August 31, 2008, filed with the Securities and Exchange Commission on October 31, 2008. These financial statements should be read in conjunction with the Company’s audited financial statements and notes thereto. The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States of America (“US GAAP”). The financial statements have, in management’s opinion, been properly prepared within reasonable limits of materiality and within the framework of the significant accounting policies summarized below:

Peerless Capital Corporation is a development stage company as described by Statements of the Financial Accounting Standards Board No. 7 (“SFAS 7.”) SFAS states that a business is considered to be in the development stage if it is devoting substantially all of its efforts to establishing a new business and either of the following conditions exists:

Planned principal operations have not commenced.

Planned operations have commenced, but there has been no significant revenue therefrom.

The Company’s management believes the Company is a development stage entity as it is in the process of attempting to develop a new business, and is also exploring various forms of financing and capital structures in order to facilitate initial operations in Asia and any possible acquisitions, mergers or other business combinations if and when such opportunities present themselves. The Company has considered SFAS 7, paragraph 11, footnote 7, and has determined that the Company qualifies as a development stage company, and as such, has determined August 21, 2008, the inception date, to be the inception date of the development stage.

The Company anticipates that after extensive operations in Asia, the Company’s management will have developed business opportunities and entered into profitable business transactions by December 31, 2009. As of May 31, 2009, the company had a total deficit of $53,370 from operations in pursuit of this objective.

NOTE 4 – GOING CONCERN

The Company’s financial statements have been prepared on a going concern basis, which contemplates continuity of operations, realization of assets and liquidation of liabilities in the normal course of business. The Company had cumulative losses of $(53,370) as of May 31, 2009 and negative cash flows from operations during the period from September 1, 2008 through May 31, 2009 of $(49,127). The ability of the Company to operate as a going concern depends upon its ability to obtain outside sources of working capital. Management is aware of these requirements and is undertaking specific measures to address these liquidity concerns. Notwithstanding the foregoing, there can be no assurance that the Company will be successful in obtaining financing, that it will have sufficient funds to execute its business plan or that it will generate positive operating results. The financial statements do not include any adjustments relating to the recoverability and classification of asset carrying amounts or the amount and classification of liabilities that might result should the Company be unable to continue as a going concern.

NOTE 5 – RELATED PARTY PAYABLE

The table below details transactions related to the related party payable to the Company’s Chief Executive Officer during the period from September 1, 2008 through May 31, 2009:



	2009
Beginning Balance Payable	$	218
Advances From Chief Executive Officer		32,811
Repayments to Chief Executive Officer		(12,602	)
Ending Balance Payable	$	20,427

All advances from the Chief Executive Officer are non-interest bearing and are expected to be repaid within a short timeframe.

NOTE 6 – INCOME TAXES

The FASB has issued Statement of Financial Accounting Standards No. 109 (“SFAS 109”), “Accounting for Income Taxes”, which requires the asset and liability method of accounting for income taxes. Under the asset and liability method, deferred income taxes are recognized for the tax consequences of “temporary differences” by applying enacted statutory tax rates applicable to future years to differences between the financial statement carrying amounts and the tax basis of existing assets and liabilities.

The Company’s net deferred tax asset as of May 31, 2009 and August 31, 2008 consisted of the following:



	May 31, 2009			August 31, 2008
Net operating loss carry forward	$	21,000		$	650

Valuation allowance		(21,000	)		(650	)
Net deferred tax asset	$	—		$	—

The net operating losses generated in the periods ended May 31, 2009 and August 31, 2008 will expire in 2028.

The components of current income tax expense for the nine months ended May 31, 2009 and May 31, 2008 consisted of the following:



	May 31, 2009			May 31, 2008
Current federal tax expense	$	—		$	—
Current state tax expense		—			—
Change in NOL benefits		21,000			—

Change in valuation allowance		(21,000	)		—
Income tax expense	$	—		$	—

The following is a reconciliation of the provision for income taxes at the United States federal income tax rate to the income taxes reflected in the Statement of Operations:



	May 31, 2009			May 31, 2008

Tax expense (credit) at statutory rate-federal		(35%	)		(35%	)
State tax expense net of federal tax		(6%	)		(6%	)
Changes in valuation allowance		41%			41%
Tax expense at actual rate		0%			0%

NOTE 7 – RELATED PARTY TRANSACTIONS

An entity controlled by the Company’s Chief Executive Officer billed and was paid $7,500 in consulting fees to prepare the registration statement filed on Form S-1 with the United States Securities and Exchange Commission on October 9, 2008 and amended on October 31, 2008. Additionally, an entity controlled by the Company’s Chief Executive Officer billed $9,000 in consulting fees to organize the Company, further develop the Company’s business plan, assist in preparing an application with the Federal Industry Regulatory Authority (‘FINRA”) under Rule 15c211 in order to obtain a stock symbol, and to work with the Company’s market maker in order to obtain a quote for the Company’s common stock.

The Company’s Chief Executive Officer advanced $31,161 to the Company during the nine months ended May 31, 2009 for working capital needs. Repayments of $10,952 were made as cash balances permitted during the nine months ended May 31, 2009.

In September 2008, the Company paid a director $2,000 for legal services associated with the August 31, 2008 private placement. As of May 31, 2009, the director had billed a total of $4,000 since August 2008, and the Company had paid the director $4,000.

NOTE 8 – SHAREHOLDERS’ EQUITY

Peerless Capital Corporation (the “Company”) was incorporated under the laws of the State of Delaware on August 21, 2008. The Company’s current certificate of incorporation provides for authorized capital stock of 500,000,000 common shares, $0.0001 par value, and 10,000,000 preferred shares, $0.0001 par value. There are no outstanding stock options, stock awards or warrants to purchase common stock as of May 31, 2009. The Company does not have a stock option plan, stock award plan, registration rights agreement or any form of shareholders’ agreements in place as of May 31, 2009.

On August 21, 2008, pursuant to a board resolution, the Company issued 2,950,000 shares of its Series A Preferred Stock, at $0.0001 per share, for a total of $295.

On August 31, 2008, pursuant to thirty two stock subscription agreements, the Company issued 2,550,000 shares of its common stock, at $0.0125 per share, for a total of $31,875.

On September 2, 2008, the Company awarded 50,000 shares of common stock to each of its members of the board of directors, or 150,000 shares of common stock in the aggregate, for board compensation totaling $1,875. The shares were free of any vesting or other restrictions relating to performance, timing or other employment considerations.

As of October 9, 2008, the $27,118 reported as a stock subscription receivable in the accompanying balance sheet had been received by the Company.

Also on October 9, 2008, the Company received a request from two investors, who are husband and wife, to return their investments in the Company which totaled $1,250. The investors learned that they were unable to participate in the private placement as a result of their affiliation with the President of the Company and the investors affiliation with a registered broker dealer. The funds were returned to the investors. However, the shares issued to the investors remained outstanding and are scheduled to be canceled.

NOTE 9 – LOSS PER SHARE

The Company utilizes SFAS No. 128, “Earnings per Share” to calculate gain/loss per share. Basic earnings/loss per share is computed by dividing the earnings/loss available to common stockholders (as the numerator) by the weighted-average number of common shares outstanding (as the denominator). Diluted earnings/loss per share is computed similar to basic earning/loss per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if all potential common stock (including common stock equivalents) had all been issued, and if such additional common shares were dilutive.

There were no common stock equivalents which would have had a dilutive effect on the Company’s common stock as of May 31, 2009 and May 31, 2008, respectively.

NOTE 10 – COMMITMENTS, CONTINGENCIES AND OTHER MATTERS

As of the date of this report, the Company was not aware of any threatened or pending legal proceedings against it.

The Company currently utilizes office space free of charge. The office space is under lease to an entity controlled by the Company’s Chief Executive Officer.

NOTE 11 - NEW ACCOUNTING PRONOUNCEMENTS

In December 2006, the FASB issued SFAS No. 157, “FAIR VALUE MEASUREMENTS,” (“SFAS No. 157”) which defines fair value, establishes a framework for measuring fair value in accordance with GAAP, and expands disclosures about fair value measurements. SFAS No. 157 simplifies and codifies related guidance within GAAP, but does not require any new fair value measurements. The guidance in SFAS No. 157 applies to derivatives and other financial instruments measured at estimated fair value under SFAS No. 133 and related pronouncements. SFAS No. 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years. SFAS No. 157 applies to certain assets and liabilities that are being measured and reported on a fair value basis. SFAS No. 157 defines fair value, establishes a framework for measuring fair value in accordance with generally accepted accounting principles, and expands disclosure about fair value measurements. This Statement enables the reader of the financial statements to assess the inputs used to develop those measurements by establishing a hierarchy for ranking the quality and reliability of the information used to determine fair values. We adopted SFAS 157 on September 1, 2008 without material impact to our financial statements.

SFAS No. 157 requires that assets and liabilities carried at fair value will be classified and disclosed in one of the following three categories:

Level 1: Quoted market prices in active markets for identical assets or liabilities.

Level 2: Observable market based inputs or unobservable inputs that are corroborated by market data.

Level 3: Unobservable inputs that are not corroborated by market data.

In May 2008, the FASB issued FSP APB 14-1, “Accounting for Convertible Debt Instruments That May Be Settled in Cash upon Conversion (Including Partial Cash Settlement)” (“FSB APB 14-1”). FSP APB 14-1 requires recognition of both the liability and equity components of convertible debt instruments with cash settlement features. The debt component is required to be recognized at the fair value of a similar instrument that does not have an associated equity component. The equity component is recognized as the difference between the proceeds from the issuance of the note and the fair value of the liability. FSP APB 14-1 also requires an accretion of the resulting debt discount over the expected life of the debt. Retrospective application to all periods presented is required and a cumulative-effect adjustment is recognized as of the beginning of the first period presented. This standard is effective for us in the first quarter of fiscal year 2010. The adoption of FSP APB 14-1 is not expected to have a material impact on our financial statements.

In June 2008, the FASB ratified the Emerging Issues Task Force (“EITF”) Issue No. 07-5, “Determining whether an Instrument (or Embedded Feature) is indexed to an Entity’s own Stock” (“EITF 07-5”). EITF 07-5 is effective for financial statements issued for fiscal years beginning after December 15, 2008, and interim periods within those fiscal years. Early application is not permitted. Paragraph 11(a) of SFAS No. 133 - specifies that a contract that would otherwise meet the definition of a derivative but is both (a) indexed to our own stock and (b) classified in stockholders’ equity in the statement of financial position would not be consider a derivative financial instrument. EITF 07-5 provides a new two-step model to be applied in determining whether a financial instrument or an embedded feature is indexed to an issuer’s own stock and thus able to qualify for the SFAS No. 133 paragraph 11(a) scope exception.

We will adopt EITF 07-5 effective September 1, 2009. The adoption of EITF 07-5’s requirements can affect the accounting for warrants or convertible debt that contain provisions that protect holders from a decline in the stock price (or “down-round” protection). For example, warrants with such provisions will no longer be recorded in equity. Down-round protection provisions reduce the exercise price of a warrant or convertible instrument if a company either issues equity shares for a price that is lower than the exercise price of those instruments or issues new warrants or convertible instruments that have a lower exercise price. We evaluated whether convertible debt or warrants to acquire stock of the Company contain provisions that protect holders from declines in the stock price or otherwise could result in modification of the exercise price and/or shares to be issued under the respective warrant agreements based on a variable that is not an input to the fair value of a “fixed-for-fixed” option. We do not expect that the adoption of EITF 07-5 will have a material impact on our financial statements.

In April 2009, the FASB issued FSP FAS 107-1/APB 28-1 (“FSP 107-1”), which is entitled “Interim Disclosures about Fair Value of Financial Instruments.” This pronouncement amended SFAS No 107, Disclosures about Fair Value of Financial Instruments, to require disclosure of the carrying amount and the fair value of all financial instruments for interim reporting periods and annual financial statements of publicly traded companies (even if the financial instrument is not recognized in the balance sheet), including the methods and significant assumptions used to estimate the fair values and any changes in such methods and assumptions. FSP 107-1 also amended APB Opinion No. 28, Interim Financial Reporting, to require disclosures in summarized financial information at interim reporting periods. FSP 107-1 is effective for interim reporting periods ending after June 15, 2009, with early adoption permitted for periods ended after March 15, 2009 if a company also elects to early adopt FSP FAS 157-4, Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Indentifying Transactions That Are Not Orderly, and FSP FAS 115-2/FAS 124-2, Recognition and Presentation of Other-Than-Temporary Impairments. We expect the adoption of this pronouncement will not have a material impact to our financial statements.

In April 2009, the FASB also issued FSP FAS 157-4, which generally applies to all assets and liabilities within the scope of any accounting pronouncements that require or permit fair value measurements. This pronouncement, which does not change SFAS No. 157’s guidance regarding Level 1 inputs, requires the entity to (i) evaluate certain factors to determine whether there has been a significant decrease in the volume and level of activity for the asset or liability when compared with normal market activity, (ii) consider whether the preceding indicates that transactions or quoted prices are not determinative of fair value and, if so, whether a significant adjustment thereof is necessary to estimate fair value in accordance with SFAS No. 157, and (iii) ignore the intent to hold the asset or liability when estimating fair value. FSP FAS 157-4 also provides guidance to consider in determining whether a transaction is orderly (or not orderly) when there has been a significant decrease in the volume and level of activity for the asset or liability, based on the weight of available evidence. This pronouncement is effective for interim and annual reporting periods ending after June 15, 2009, and shall be applied prospectively. Early adoption of FSP FAS 157-4 also requires early adoption of the pronouncement described in the following paragraph. However, early adoption for periods ended before March 15, 2009 is not permitted. We expect the adoption of this pronouncement will not have a material impact to our financial statements.

In April 2009, the FASB issued FSP FAS 115-2 and 124-2 (hereinafter referred to as “FAS 115-2/124-2”), which amends the other-than-temporary impairment (“OTTI”) recognition guidance in certain existing U.S. GAAP (including SFAS No. 115 and 130, FSP FAS 115-1/FAS 124-1, and EITF Issue 99-20) for debt securities classified as available-for-sale and held-to-maturity. FAS 115-2/124-2 requires the entity to consider (i) whether the entire amortized cost basis of the security will be recovered (based on the present value of expected cash flows), and (ii) its intent to sell the security. Based on the factors described in the preceding sentence, this pronouncement also explains the process for determining the OTTI to be recognized in “other comprehensive income” (generally, the impairment charge for other than a credit loss) and in earnings. FAS 115-2/124-2 does not change existing recognition or measurement guidance related to OTTI of equity securities. This pronouncement is effective as described in the preceding paragraph. Certain transition rules apply to debt securities held at the beginning of the interim period of adoption when an OTTI was previously recognized. If an entity early adopts either FSP 107-1 or FSP FAS 157-4, the entity is also required to early adopt this pronouncement. In addition, if an entity early adopts FAS 115-2/124-2, it is also required to early adopt FSP FAS 157-4. We expect the adoption of this pronouncement will not have a material impact to our financial statements.

In November 2007, the EITF issued a consensus on EITF 07-1, “Accounting for Collaborative Arrangements” (“EITF 07-1”). The Task Force reached a consensus on how to determine whether an arrangement constitutes a collaborative arrangement, how costs incurred and revenue generated on sales to third parties should be reported by the partners to a collaborative arrangement in each of their respective income statements, how payments made to or received by a partner pursuant to a collaborative arrangement should be presented in the income statement, and what participants should disclose in the notes to the financial statements about a collaborative arrangement. This issue shall be effective for annual periods beginning after December 15, 2008. Entities should report the effects of applying this Issue as a change in accounting principle through retrospective application to all periods to the extent practicable. Upon application of this issue, the following should be disclosed: a) a description of the prior-period information that has been retrospectively adjusted, if any, and b) the effect of the change on revenue and operating expenses (or other appropriate captions of changes in the applicable net assets or performance indicator) and on any other affected financial statement line item. We expect the adoption of this pronouncement will not have a material impact to our financial statements.

In December 2007, the FASB issued SFAS No. 141 (revised 2007), “Business Combinations” (“SFAS 141(R)”). This statement requires an acquirer to recognize the assets acquired, the liabilities assumed, and any noncontrolling interest in the acquiree at the acquisition date, measured at their fair values as of that date. SFAS 141(R) replaces the cost-allocation process of SFAS No. 141, “Business Combinations” (“SFAS 141”) which required the cost of an acquisition to be allocated to the individual assets acquired and liabilities assumed based on their estimated fair values. This statement applies

prospectively and is effective for annual periods beginning after December 15, 2008. Earlier adoption is prohibited. We expect the adoption of this pronouncement will not have a material impact to our financial statements.

In May 2009, the FASB issued SFAS No. 165, Subsequent Events, (“SFAS 165”) which establishes general standards of accounting for and disclosure of events that occur after the balance sheet date but before the financial statements are issued or are available to be issued. It requires the disclosure of the date through which an entity has evaluated subsequent events and the basis for that date. We adopted SFAS 165 beginning April 1, 2009. The adoption of SFAS 165 did not have a material impact on our consolidated financial position, results of operations or cash flows. We have evaluated subsequent events through August 31, 2009, the day before our condensed consolidated financial statements were issued.

The Sarbanes-Oxley Act of 2002 (“the Act”) introduced new requirements regarding corporate governance and financial reporting. Among the many requirements of the Act is for management to annually assess and report on the effectiveness of its internal control over financial reporting under Section 404(a) and for its registered public accountant to attest to this report under Section 404(b). The SEC has modified the effective date and adoption requirements of Section 404(a) and Section 404(b) implementation for non-accelerated filers multiple times, such that we were required to issue our management report on internal control over financial reporting in this annual report on Form 10-K for the fiscal year ended August 31, 2008. Based on current SEC requirements, we will be required to have our auditor attest the effectiveness of internal controls over financial reporting for our fiscal year ending August 31, 2009.

Other recent accounting pronouncements issued by the FASB (including its Emerging Issues Task Force), the American Institute of Certified Public Accountants, and the Securities and Exchange Commission did not or are not believed by management to have a material impact on the Company’s present or future consolidated financial statements.

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

The discussion and financial statements contained herein are for the nine months ended May 31, 2009 and May 31, 2008. The following discussion should be read in conjunction with our financial statements and notes included herewith.

CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS

This report contains forward-looking statements that involve risks and uncertainties. We generally use words such as “believe,” “may,” “could,” “will,” “intend,” “expect,” “anticipate,” “plan,” and similar expressions to identify forward-looking statements, including statements regarding our ability to continue to create innovative technology products, our ability to continue to generate new business based on our sales and marketing efforts, referrals and existing relationships, our financing strategy and ability to access the capital markets and other risks discussed in our Risk Factor section included in our Form S-1, as amended, for the year ended August 31, 2008, as filed with the Securities and Exchange Commission on October 31, 2008. Although we believe the expectations expressed in the forward-looking statements included in this Form 10-Q are based on reasonable assumptions within the bounds of our knowledge of our business, a number of factors could cause our actual results to differ materially from those expressed in any forward-looking statements. We cannot assure you that the results or developments expected or anticipated by us will be realized or, even if substantially realized, that those results or developments will result in the expected consequences for us or affect us, our business or our operations in the way we expect. We caution readers not to place undue reliance on these forward-looking statements, which speak only as of their dates. We do not intend to update any of the forward-looking statements after the date of this document to conform these statements to actual results or to changes in our expectations, except as required by law.

NINE MONTHS ENDED MAY 31, 2009 AS COMPARED TO THE NINE MONTHS ENDED MAY 31, 2008

RESULTS OF OPERATIONS

SALES AND COSTS OF GOODS SOLD

Sales and costs of good sold for the nine months ended May 31, 2009 were $0 as compared to $0 for the nine months ended May 31, 2008. The Company was organized on August 21, 2008 and has yet to generate revenues.

OPERATING EXPENSES

Operating expenses for the nine months ended May 31, 2009 amounted to $51,772 as compared to $0 for the nine months ended May 31, 2008. The Company was organized on August 21, 2008 and thus had no operations for the nine months ended May 31, 2008. For the nine months ended May 31 2009, the company incurred professional fees of $30,810 to develop the Company’s business plan, file a registration on Form S-1 with the United States Securities and Exchange Commission and to prepare an application with FINRA in order to obtain a stock symbol and eventually a stock quote. Additionally, a total of $5,833 in professional fees were billed to the Company by its independent auditor.

NET LOSS

Net loss for the nine months ended May 31, 2009 was $51,772 as compared to $0 for the nine months ended May 31, 2008 due to the reasons set forth above.

BASIC AND DILUTED INCOME PER SHARE

Our basic and diluted net loss per share was $(0.02) and $0.00 for the nine months ended May 31, 2009 and May 31, 2008, respectively.

THREE MONTHS ENDED MAY 31, 2009 AS COMPARED TO THE THREE MONTHS ENDED MAY 31, 2008

RESULTS OF OPERATIONS

SALES AND COSTS OF GOODS SOLD

Sales and costs of good sold for the three months ended May 31, 2009 were $0 as compared to $0 for the three months ended May 31, 2008. The Company was organized on August 21, 2008 and has yet to generate revenues.

OPERATING EXPENSES

Operating expenses for the three months ended May 31, 2009 amounted to $11,825 as compared to $0 for the three months ended May 31, 2008. The Company was organized on August 21, 2008 and thus had no operations for the three months

ended May 31, 2008. For the three months ended May 31, 2009, the company incurred professional fees and travel costs of $3,000 and $6,776, respectively, for general business development activities in Asia.

NET LOSS

Net loss for the three months ended May 31, 2009 was $11,825 as compared to $0 for the three months ended May 31, 2008 due to the reasons set forth above.

BASIC AND DILUTED INCOME PER SHARE

Our basic and diluted net loss per share was $(0.00) and $0.00 for the three months ended May 31, 2009 and May 31, 2008, respectively.

LIQUIDITY AND CAPITAL RESOURCES

As of May 31, 2009, our current assets were $2 and current liabilities were $20,577. Cash and cash equivalents totaled $2 as of May 31, 2009. Our Shareholders’ deficit at May 31, 2009 was $(20,575). We had a net usage of cash for operating activities for the nine months ended May 31, 2009 and 2008 of $(49,127) and $0, respectively. We had net cash provided by financing activities of $46,077 and $0 for the nine months ended May 31, 2009 and 2008, respectively.

We are operating from a cash flow deficit funded by the issuance of debt and the sale of equity, including funding provided by the Company’s Chief Executive Officer. Without the continued availability of external funding, we would have to materially curtail our operations and our current plans for expansion. We intend to continue funding our operations through the sale of additional equity and/or issuance of debt, though there can be no guarantee that we will be successful in our efforts.

FINANCING ACTIVITIES

MATERIAL TRENDS AND UNCERTAINTIES

We are a shell company. Should our cash flow shortfalls continue, and should we be unsuccessful in raising capital, it will have an adverse impact on our business, which in turn will have an adverse impact on our financial condition and results of operations. While we are actively assessing our cash flow needs and pursuing multiple avenues of financing and cash flow generation, there can be no assurance that our activities will be successful. If our fundraising efforts are not successful, it is likely that we will not be able to meet our obligations as they come due.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not applicable

ITEM 4T. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

We conducted an evaluation under the supervision and with the participation of our management, including our Chief Executive Officer (who is also the principal accounting officer), of the effectiveness of the design and operation of our disclosure controls and procedures. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Securities and Exchange Act of 1934, as amended (“Exchange Act”), means controls and other procedures of a company that are designed to ensure that information required to be disclosed by the company in the reports it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission’s rules and forms. Disclosure controls and procedures also include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate, to allow timely decisions regarding required disclosure. Based on this evaluation, our Chief Executive Officer (who is also the principal accounting officer) concluded that as of May 31, 2009, there were no matters which would result in more than a remote likelihood that a material misstatement of the quarterly financial statements would not have been prevented or detected.

Changes in Internal Control Over Financial Reporting

No change in the Company’s internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) occurred during the fiscal quarter ended May 31, 2009 that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II — OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

We may be involved in litigation, negotiation and settlement matters that may occur in our day-to-day operations. Management does not believe the implication of this type of litigation will have a material impact on our financial statements.

ITEM 1A. RISK FACTORS

Not required.

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

NONE.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

NONE.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

NONE.

ITEM 5. OTHER INFORMATION.

NONE.

ITEM 6. EXHIBITS.



Exhibits. No.		Description
31.1		Certification Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, filed herewith.

32.1		Certification of Officers pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, filed herewith.

SIGNATURE

In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


	PEERLESS CAPITAL CORPORATION
	(Registrant)

Date: August 31, 2009	By:	/s/ James T. Crane
		James T. Crane
		Chief Executive Officer and Principal Accounting Officer

Peerless Capital Corp 10-Q