China Pharmaceuticals (CRRWF) 10-Q 2009 Q3 Quarterly report

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

x QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2009

o TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________ to __________

Commission file number: 000-52763

ALLSTAR  RESTAURANTS

(Exact name of Small Business Issuer as Specified in its Charter)

Nevada	20-2638087
(State or Other Jurisdiction	(I.R.S. Employer
of Incorporation or Organization)	Identification Number)

1458 Broad Street, Regina, Sask. S4R 1Y9, Canada

(Address of registrant's principal executive offices)

306-529-2652

(Issuer’s Telephone Number, Including Area Code)

Check whether the Issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes  x       No  o

Indicate by check mark whether the Issuer is a shell company (as defined by Rule 12b-2 of the Exchange Act).

Yes  o       No  x

State the number of shares outstanding of each of the Issuers classes of common equity, as of the latest practicable date:

Common, $.001 par value per share: 9,950,000 outstanding as ofNovember 18, 2009.

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TABLE OF CONTENTS

PART I - FINANCIAL INFORMATION	3
ITEM 1. FINANCIAL STATEMENTS	3
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION	10
ITEM 3. CONTROLS AND PROCEDURES	13
PART II - OTHER INFORMATION	13
ITEM 1. LEGAL PROCEEDINGS	13
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	13
ITEM 3. DEFAULTS UPON SENIOR SECURITIES	14
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS	14
ITEM 5. OTHER INFORMATION	14
ITEM 6. EXHIBITS	14
SIGNATURES	14
EXHIBIT 31.1	14
EXHIBIT 32.1	14

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PART I - FINANCIAL INFORMATION

Item 1.       Financial Statements.

ALLSTAR  RESTAURANTS

CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2009

INDEX	Page
Consolidated Balance Sheets	F-1
Unaudited Consolidated Statements of Operations	F-2
Unaudited Consolidated Statements of Stockholders’ Equity(Deficit)	F-3
Unaudited Consolidated Statement of Cash Flows	F-4
Notes to the Unaudited Consolidated Financial Statements	F-5 to F-6

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ALLSTAR RESTAURANTS
CONSOLIDATED BALANCE SHEETS
	Sept 30,			March 31,
	2009			2009
	(Unaudited)			(Audited)
CURRENT ASSETS
Cash	$	10,378		$	22,443
Accounts receivable - other		-			425
Inventory - total		18,784			15,980
Prepaids		9,172			9,334
TOTAL CURRENT ASSETS		38,334			48,182
NET FIXED ASSETS		127,962			142,065
OTHER ASSETS
Deposits		6,365			5,415
Debt offering costs		1,332			1,361
TOTAL OTHER ASSETS		7,697			6,776
TOTAL ASSETS	$	173,993		$	197,023
CURRENT LIABILITIES
Accounts payable and accrued liabilities	$	51,041		$	47,471
SBL loan - current portion		30,801			25,335
Shareholder's loan		56,062			61,591
TOTAL CURRENT LIABILITIES		137,904			134,397
LONG TERM LIABILITIES
Long term debt - SBL loan		57,378			62,228
TOTAL LIABILITIES		195,282			196,625
STOCKHOLDER'S EQUITY (DEFICIT)
Common stock; 75,000,000 shares authorized at $0.001 par value,
9,950,000 and 9,950,000 shares issued and outstanding,
respectively (Note 3)		9,950			9,950
Additional paid-in capital		163,604			156,098
Currency Translation		1,238			(699	)
Retained Earnings (Deficit)		(196,081	)		(164,951	)
TOTAL STOCKHOLDERS' EQUITY (DEFICIT)		(21,289	)		398
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)	$	173,993		$	197,023

The accompanying notes are an integral part of these consolidated financial statements.

F-1

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ALLSTAR RESTAURANTS
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
	For the Three Months Ended						For the Six Months Ended
	September 30,						September 30,
	2009			2008			2009			2008
SALES	$	313,156		$	330,366		$	617,819		$	672,682
COST OF SALES		90,220			106,292			180,519			208,665
GROSS PROFIT		222,936			224,074			437,300			464,017
OPERATING EXPENSES
Payroll expenses & benefits		142,218			140,260			278,465			277,468
Professional fees		8,880			7,504			27,784			28,797
General administrative expenses		18,352			29,138			36,691			46,598
Marketing & advertising		9,660			18,368			20,020			24,789
Depreciation & amortization		20,914			23,281			41,827			47,003
Rent & utilities		25,499			25,882			51,166			55,007
TOTAL OPERATING EXPENSES		225,523			244,433			455,953			479,662
INCOME FROM OPERATIONS		(2,587	)		(20,359	)		(18,653	)		(15,645	)
OTHER EXPENSES
Interest expense		6,215			11,107			12,477			22,021
TOTAL OTHER EXPENSES		6,215			11,107			12,477			22,021
INCOME (LOSS)
BEFORE INCOME TAXES		(8,802	)		(31,466	)		(31,130	)		(37,666	)
PROVISION FOR INCOME TAXES		-			-			-			-
NET INCOME (LOSS)	$	(8,802	)	$	(31,466	)	$	(31,130	)	$	(37,666	)
Basic income (loss) per share
of common stock	$	(0.00	)	$	(0.00	)	$	(0.00	)	$	(0.00	)
Weighted average number of
common shares outstanding		9,950,000			9,950,000			9,950,000			9,950,000

The accompanying notes are an integral part of these consolidated financial statements.

F-2

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ALLSTAR RESTAURANTS
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
					Additional		Comprehensive
	Common Stock				Paid In		Income			Accumulated
	Shares		Amount		Capital		(Loss)			Deficit
BALANCE, MARCH 31, 2009		9,950,000	$	9,950	$	156,098	$	(699	)	$	(164,951	)
Imputed interest on shareholder loan
credited to contributed capital
(unaudited)		-		-		2,575		-			-
Contributed capital
(unaudited)		-		-		4,931		-			-
Loss on currency translation
(unaudited)		-		-		-		1,937			-
Net Loss for the six months ended
September 30, 2009 (unaudited)		-		-		-		-			(31,130	)
BALANCE, SEPTEMBER 30, 2009		9,950,000	$	9,950	$	163,604	$	1,238		$	(196,081	)

The accompanying notes are an integral part of these consolidated financial statements.

F-3

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ALLSTAR RESTAURANTS
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
	For the Six Months Ended
	September 30,
	2009			2008
CASH FLOWS FROM OPERATING ACTIVITIES
Net Loss	$	(31,130	)	$	(37,666	)
Adjustments to reconcile net loss to net cash
used by operating activities:
Depreciation & Amortization		41,827			47,003
Contribution of Interest		2,575			8,732
Changes in operating assets and liabilities:
(Increase) decrease in accounts receivable - other		425			379
Increase in Inventory		-			-
Decrease (increase) in prepaids		1,802			5,498
(Increase) decrease in deposits		-			-
Decrease in debt offering costs		266			135
Increase (decrease) in accounts payable		(3,711	)		24,725
Net Cash Provided by Operating Activities		12,054			48,806
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of fixed assets		(3,910	)		(14,258	)
New Cash (Used) by Investing Activities		(3,910	)		(14,258	)
CASH FLOWS FROM FINANCING ACTIVITIES
Payments on SBL loan		(9,089	)		(12,609	)
Payments on Shareholder loan		(16,333	)		(6,159	)
Contributed Capital		5,213			-
Net Cash (Used) by Financing Activities		(20,209	)		(18,768	)
NET INCREASE (DECREASE) IN CASH		(12,065	)		15,780
CASH, BEGINNING OF PERIOD		22,443			49,722
CASH, END OF PERIOD	$	10,378		$	65,502
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
CASH PAID FOR DURING THE PERIOD:
Interest	$	9,902		$	13,289
Income Taxes	$	-		$	-
NON CASH FINANCING ACTIVITIES
Shareholder loan forgiven credited to Contributed Capital	$	-		$	44,960
Interest contributed by stockholder	$	2,575		$	8,732

The accompanying notes are an integral part of these consolidated financial statements.

F-4

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ALLSTAR RESTAURANTS

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2009 and 2008

1. BASIS OF FINANCIAL STATEMENT PRESENTATION

The accompanying unaudited consolidated financial statements have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission.  Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted in accordance with such rules and regulations.  The information furnished in the interim consolidated financial statements includes normal recurring adjustments and reflects all adjustments, which, in the opinion of management, are necessary for a fair presentation of such financial statements.  Although management believes the disclosures and information presented are adequate to make the information not misleading, it is suggested that these interim consolidated financial statements be read in conjunction with the Company’s most recent audited consolidated financial statements and notes thereto as of March 31, 2009. Operating results for the six months ended September 30, 2009 are not necessarily indicative of the results that may be expected for the year ending March 31, 2010.

2. DESCRIPTION OF THE BUSINESS

The company was incorporated December 22, 2004 under the laws of the state of Nevada as Nexstar Properties Inc.  The company name was changed to Allstar Restaurants on March 30, 2005.  Allstar Restaurants was established to pursue opportunities in the full-service segment of the restaurant and food services industry with the objective of developing into a multi-unit restaurant and food services operation.

The company commenced operations with its first restaurant acquisition as of July 1, 2005. On July 1, 2005, a wholly owned subsidiary, Fastserve Foods Inc., incorporated under the laws of the province of Saskatchewan, Canada, in the City of Regina, was acquired. Fastserve Foods Inc., which changed its name to China Doll Foods Ltd. during the previous fiscal period, operates an established restaurant and sports lounge called China Doll Restaurant and Lounge, located in the City of Regina, in the province of Saskatchewan, Canada. This subsidiary acts as an operating company for all business activities relating to the company’s restaurant businesses in Canada.

3. CAPITAL STOCK

As of September 30, 2009, the company has authorized 75,000,000 common voting shares each with a par value of $0.001. As of the period ended September 30, 2009, the company had 9,950,000 common shares outstanding.

4. RELATED PARTY TRANSACTIONS

The total outstanding balance of the shareholder loan as at September 30, 2009 is $56,062. This shareholder loan carries no set terms of principal repayment. The shareholder does not expect to make a specific claim on the interest for this loan during the current year or foreseeable future. Imputed Interest for the most recent six months period ended has been recorded on the balance sheet at the rate of 9.00 % on the outstanding loan balance. Additional Paid-In Capital in the form of imputed interest on the shareholder loan was recorded. The total of this cost is shown on the balance sheet as Additional Paid-In Capital of $2,575 and in the income statement as interest expense.

On July 1, 2005, a wholly owned subsidiary, Fastserve Foods Inc., incorporated under the laws of the province of Saskatchewan, Canada, in the City of Regina, was acquired.  Fastserve Foods Inc. operates an established restaurant and sports lounge called China Doll Restaurant and Lounge, located in the City of Regina, in the province of Saskatchewan, Canada. This subsidiary, now known as China Doll Foods Ltd., currently acts as the operating entity for all business activities relating to the company’s restaurant businesses in Canada. The acquisition was executed by exchanging all (100%) of the issued and outstanding common shares (100) of Fastserve Foods Inc., for 5,000,000 common shares issued by Allstar Restaurants.  As stated, the majority shareholder is currently the Chairman of the Board and Chief Executive Officer of Allstar Restaurants. As of the date of this filing, the shareholder holds a total of 5,100,000 common shares of Allstar Restaurants.

F-5

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ALLSTAR RESTAURANTS

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2009 and 2008

5.  FOREIGN CURRENCY TRANSLATIONS

The Company’s functional currency is the Canadian dollar. The Company’s reporting currency is the U.S. dollar.  All transactions initiated in other currencies are re-measured into the functional currency as follows:

Monetary assets and liabilities at the rate of exchange in effect at the balance sheet date,

ii)   Non-monetary assets and liabilities, and equity at historical rates, and

iii)   Revenue and expense items at the average rate of exchange prevailing during the period.

Gains and losses on re-measurement are included in determining net income for the period

Translation of balances from the functional currency into the reporting currency is conducted as follows:

Assets and liabilities at the rate of exchange in effect at the balance sheet date,

ii)   Equity at historical rates, and

iii)   Revenue and expense items at the average rate of exchange prevailing during the period.

Translation adjustments resulting from translation of balances from functional to reporting currency are accumulated as a separate component of shareholders’ equity as a component of comprehensive income or loss.

6.  GOING CONCERN

The Company's financial statements are prepared using accounting principles generally accepted in the United States of America applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. For the six months period ended September 30, 2009, the Company has incurred a net loss of $(31,130) and losses from operations in recent prior periods. The company’s current liabilities exceed its current assets by $99,570. These factors may create uncertainty about the Company's ability to continue as a going concern. In order to continue as a going concern and achieve a profitable level of operations, the Company will require, among other things, additional capital resources. Management's plans to obtain such resources for the Company include (1) Issuing promissory notes in exchange for additional shareholder loans; (2) conversion of existing promissory notes into common stock; (3) the company will actively seek to execute additional acquisitions of established restaurant businesses that present opportunities for additional cash flow and value creation via marketing and operational enhancements. However, at this time it is anticipated that any future acquisition(s) will not be executed prior to the end of the fiscal year ended 2010.

Management cannot provide any assurances that the Company will be successful in accomplishing any of its plans. The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plans described in the preceding paragraph and eventually secure other sources of financing and attain profitable operations.

7. SUBSEQUENT EVENTS

Management has evaluated subsequent events as ofNovember 18, 2009 and has determined there are no subsequent events to be reported.

F-6

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

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our financial statements and the related notes thereto contained elsewhere in this Form 10-Q.

Forward-Looking Statements

This discussion contains forward-looking statements that involve risks and uncertainties. All statements regarding future events, our future financial performance and operating results, our business strategy and our financing plans are forward-looking statements. In many cases, you can identify forward-looking statements by terminology, such as “may”, “should”, “expects”, “intends”, “plans”, “anticipates”, “believes”, “estimates”, “predicts”, “potential” or “continue” or the negative of such terms and other comparable terminology.  These statements are only predictions.  Known and unknown risks, uncertainties and other factors could cause our actual results to differ materially from those projected in any forward-looking statements.  We do not intend to update these forward-looking statements.

Overview

Allstar Restaurants, (referred to herein as the “Company”, “Allstar”, “we”, “us” and “our”) is primarily engaged in the restaurant business located in the city of Regina, in the province of Saskatchewan, Western Canada.

We were incorporated on December 22, 2004 under the laws of the State of Nevada originally under the name Nexstar Properties, Inc. By Director’s resolution, on March 30, 2005, the company’s name was changed to Allstar Restaurants. The company’s United States registered office is located at 3155 East Patrick Lane, Suite 1, Las Vegas, Nevada 89120-3481. Our principal executive offices are located at 1458 Broad Street, Regina, Saskatchewan, S4R 1Y9, Canada. The telephone number for our executive office is 306.529.2652. The fax number is 306.352.1597.

We are a restaurant company with the objective of developing into a multi-unit full-service restaurant and food services business. The company was established to pursue opportunities in the family style full-service casual dining segment of the restaurant industry. Allstar Restaurants, through a wholly owned subsidiary called Fastserve Foods Inc., acquired on July 1, 2005, currently owns and operates an established restaurant and licensed lounge called China Doll Restaurant and Lounge. This restaurant is located in the city of Regina, in the province Saskatchewan, Canada. This subsidiary, which recently changed its name to China Doll Foods Ltd., currently acts as the operating company for all business activities relating to the company’s restaurant business(s) in Western Canada. The China Doll Restaurant is currently the only restaurant location operated and wholly-owned by Allstar Restaurants.

We have received a going concern opinion from our auditors which contemplates, among other things, the realization of assets and satisfaction of liabilities in the normal course of business. For the six months period ended September 30, 2009, the Company had a net loss of $(31,130) and an accumulated retained earnings deficit as at September 30, 2009 of $(196,081). The Company intends to fund operations over the next nine to twelve months through improved cash flow generated from operations as well as equity financing arrangements, both of which may be insufficient to fund its capital expenditures, working capital and other cash requirements over the next six months to the year ending March 31, 2010. Please refer to Note 6, “Going Concern”, accompanying the financial statements.

The discussion below provides an overview of our operations, discusses our results of operations, our plan of operations and our liquidity and capital resources.

Results of Operations

Overview - Quarter ended September 30, 2009

Total salesfor the three months ended September 30, 2009 were $313,156 compared to $330,366 in sales for the three months ended September 30, 2008, representing a 5.2 % decrease in period-over-period sales. Gross profit, herein defined as sales less cost of sales, was $222,936 for the three months ended September 30, 2009, compared to $224,074 in gross profit for the three months ended September 30, 2008. We still maintained a consistent Gross Profit margin of approximately 70% for both periods. Our operating expenses were $225,523 for the three months ended September 30, 2009 compared to operating expenses of $244,433 for the three months ended September 30,

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2008. Operating expenses decreased primarily as a result of the decrease in overall sales for the period as our expenses are a consistent percentage of sales each period. The U.S./Canadian Dollar currency exchange fluctuation was also a contributing factor in the overall decrease in total operating expenses for the three months period ended September 30, 2009. Depreciation and amortization expense has decreased slightly from $23,281 for the three months ended September 30, 2008 to $20,914 for the three months ended September 30, 2009 due to the decrease in investment in fixed assets as compared to previous periods.

We realized a net loss of $(8,802) for the three months ended September 30, 2009 compared to a net loss of $(31,466) for the three months period ended September 30, 2008.

Overview – Six months ended September 30, 2009

Total salesfor the six months ended September 30, 2009 were $617,819 compared to $672,682 in sales for the six months ended September 30, 2008, representing in a 8.16% decrease in period-over-period sales. This decrease in sales was due to slightly slower business activity during the summer months. Gross Profit, defined as sales less cost of sales, was $437,300 or the six months ended September 30, 2009, compared to $464,017 in gross profit for the six months ended September 30, 2008.

Our operating expenses were $455,953 for the six months ended September 30, 2009 compared to operating expenses of $479,662 for the six months ended September 30, 2008. Operating expenses decreased during this period which was due in part to the corresponding drop in sales.  Depreciation and amortization expense has decreased from $47,003 for the six months ended September 30, 2008 to $41,827 for the six months ended September 30, 2009 due to reduced fixed asset additions during the period.  Our marketing and advertising expenditures decreased to $20,020 for the most recent six months period as compared to $24,789 for the same period in 2008. Our general administrative expenses for the six months period ended decreased to $36,691 as compared to $46,598 for the same period in 2008.

We realized a total net loss of $(31,130) for the six months ended September 30, 2009 compared to a net loss of $(37,666) for the six months period ended September 30, 2008.

Operations Outlook

The Company's plan of operations and primary objective for the next six months to the fiscal period ending March 31, 2010 is to increase its existing restaurant location sales while controlling costs. We will also begin to analyze prospects for acquiring additional restaurant locations to either extend our existing brand concept or look to acquire other existing established restaurant operations.

For our existing restaurant operation, the company intends to reach its sales objectives as follows:

● Increase marketing expenditures beginning in the third quarter (October) of our fiscal year. We will continue to focus our marketing efforts on continuing to position our restaurant business based on the highly differentiated quality of our core Chinese food menu items as well as our superior customer service both for the dine-in and takeout segments of our business. We will accomplish this by emphasizing the message of “quality with great service” in our print, radio, on-line, and direct mail campaigns which will begin near the end of the summer season.

● Continue to reinvest in the existing restaurant business where necessary to improve and freshen the interior and exterior appearance,

● Continue to focus on improving overall customer satisfaction measures through enhanced management and customer service training processes,

● Bring into effect a menu-wide price increase program,

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● Focus on continuing to expand our city-wide delivery and takeout service concept by improving efficiency and utilizing creative and aggressive marketing initiatives,

● Continue to streamline and standardize our cost and accounting controls systems and procedures.

Allstar Restaurants’ objective and plan for our existing restaurant operation, the China Doll Restaurant, is to continue to strive to increase restaurant sales through increased customer counts in each primary day-part (lunch, dinner and late-night, takeout), selective menu and price promotions and effective marketing of China Doll Restaurant’s competitive attributes of high quality food products, superior taste and value pricing. Over the next three to six months the number of our employees, in particular kitchen staff, may increase as our sales growth trend continues. We may also extend our operations hours to accommodate a greater customer base, which may also have an impact on overhead expenses.  Management will continue to standardize and document operations procedures with the objective of extending the China Doll Restaurant brand in the future to either additional corporate-owned locations or explore the feasibility of future franchise offerings.

We believe that we will have sufficient revenue and cash flow to pay our operating expenses for the next twelve months. We anticipate that we may have an opportunity to raise additional capital to expand our operations through equity financings. However, we cannot guarantee that we will be able to raise that capital, in which case some of our operational plans may be required to be altered or even curtailed.

Liquidity and Capital Resources

Overview – Six Months Ended September 30, 2009

For the six months period ended September 30, 2009, net cash balance was $10,378. Net cash provided by operating activities for the six months period ended September 30, 2009 was $12,054. The decrease in cash provided by operating activities for the six months period ended September 30, 2009 was due to increased payments on accounts payable as compared to the six months ended September 30, 2008.

Cash (used) by investing activities during the six months ended September 30, 2009 was $(3,910). Net cash (used) by investing activities for the six months ended September 30, 2008 was $(14,258).

Net cash (used) by financing activities for the six months ended September 30, 2009 was $(20,209). Net cash (used) by financing activities for the period ending September 30, 2008 was $(18,768). For the six months period ended September 30, 2009 we continue to make payments to reduce both the SBL loan as well as the shareholder loan while only receiving approximately $5,200 in cash proceeds from financings. This accounted for the increase in net cash (used) by financing activities for the six months ended September 30, 2009.

As at September 30, 2009 we had $10,378 in cash, compared to $65,502 in cash as at September 30, 2008. We had a negative working capital of $(99,570) as at September 30, 2009 compared to a negative working capital of $(160,384) as at September 30, 2008.

                           .

We will continue to have professional fees which include accounting, auditing, legal, and statutory filing fees, and those fees may increase because of our reporting status and the required filings for requisite quarterly and annual reports with the Securities and Exchange Commission. We expect that we will have additional filings whereby our auditors may be required to prepare further financial reports.  We are aware that audit fees have generally increased as a function of the increased reporting requirements mandated by the Sarbanes-Oxley Act. We are optimistic that our business activities will increase, which will require auditing procedures over a greater transaction base. We expect our other administrative expenses to increase in the next quarter as our legal fees may increase as we further our strategic goals and additional advice and/or opinions may be required.

Due to the foregoing factors, our operating results are difficult to forecast.  You should evaluate our prospects in light of the risk, expenses and difficulties commonly encountered by comparable development-stage companies in rapidly evolving markets.  We cannot assure you that we willsuccessfully address such risks and challenges.  In addition, even though we have an operational business with revenues, we cannotassure you that our revenues willincrease or that we will be profitable in the future.

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Other Information - Certain Relationships and Related Transactions

We intend that any transactions between us and our officers, directors, principal stockholders, affiliates or advisors will be on terms no less favorable to us than those reasonably obtainable from third parties.  To date, the following related party transactions have taken place.

As noted in Note 4 of the Consolidated Financial Statements of September 30, 2009: During the six months ended September 30, 2009, the principal shareholder provided no additional loans to the company. The total outstanding balance of the shareholder loans as at September 30, 2009 is $56,062 and the full amount is shown as a current liability on the balance sheet. This shareholder loan carries interest but has no set terms of principal repayment. The shareholder does not expect to make a specific claim on the interest for this loan during the current year or foreseeable future. Imputed Interest on the shareholder loan for the three months period ended has been recorded on the income statement as interest expense at the rate of 9.00 % on the outstanding loan balance for the six months ended September 30, 2009. This imputed interest in the amount of $2,575 was recorded on the balance sheet in the form of Additional Paid-In Capital.

On October 4th, 2007, we received clearance from the NASD to have our securities trade publicly on the Over-the-Counter Bulletin Board exchange under the symbol AREN.OB. There is no assurance that a liquid trading market will develop, or, if developed, that it will be sustained. A purchaser of our shares may, therefore, find it difficult to resell our shares publicly should he or she desire to do so. Furthermore, our shares are not marginal and it is unlikely that a lending institution would accept our common stock as collateral for a loan.

Item 3.       Controls and Procedures.

Management has evaluated, with the participation of our Principal Executive Officer and Principal Financial Officer, the effectiveness of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) as of the end of the period covered by this report.  Based upon this evaluation, our Principal Executive Officer and Principal Financial Officer concluded that, as of the end of the period covered by this report, our disclosure controls and procedures were effective to ensure that information required to be disclosed by us in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Commission’s rules and forms.  There have been no significant changes in our internal controls over financial reporting that occurred during the fiscal quarter covered by this report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II - OTHER INFORMATION

Item 1.       Legal Proceedings.

There are no material pending legal proceedings to which the Company is a party or to which any of its property is subject.

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

None

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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.

31.1	Certification of Principal Executive Officer and Principal Financial Officer  pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (Rules 13a-14 and 15d-14 of the Exchange Act)
32.1	Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350)

SIGNATURES

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.

ALLSTAR  RESTAURANTS

(Registrant)

Dated:  November 18, 2009                                       

By:   /s/ Terry G. Bowering

Terry G. Bowering, Chief Executive Officer

(Principal Executive Officer) Chief Financial Officer,

Chief Accounting Officer (Principal Financial Officer)

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