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

SCHEDULE 14F-1

INFORMATION STATEMENT
PURSUANT TO SECTION 14(F) OF THE
SECURITIES EXCHANGE ACT OF 1934
AND RULE 14F-1 PROMULGATED THEREUNDER

APPLIED SPECTRUM TECHNOLOGIES, INC.
(Exact name of registrant as specified in charter)

DELAWARE
(State or other Jurisdiction of Incorporation or Organization)

0-16397 41-2185030
(Commission File Number) (IRS Employer Identification No.)

936A BEACHLAND
BOULEVARD, SUITE 13
VERO BEACH, FL 32963
(Address of Principal Executive
Offices and zip code)

(772) 231-7544
(Registrant's telephone
number, including area code)

N/A
(Former name or former address, if changed since last report)

June 14, 2006

APPLIED SPECTRUM TECHNOLOGIES, INC.

INFORMATION STATEMENT
PURSUANT TO SECTION 14(F) OF THE
SECURITIES EXCHANGE ACT OF 1934
AND RULE 14F-1 PROMULGATED THEREUNDER

THIS INFORMATION STATEMENT IS BEING PROVIDED FOR INFORMATIONAL PURPOSES ONLY. NO
VOTE OR OTHER ACTION OF THE STOCKHOLDERS OF APPLIED SPECTRUM TECHNOLOGIES, INC.
IS REQUIRED IN CONNECTION WITH THIS INFORMATION STATEMENT. NO PROXIES ARE BEING
SOLICITED AND YOU ARE REQUESTED NOT TO SEND A PROXY TO APPLIED SPECTRUM
TECHNOLOGIES, INC.

INTRODUCTION

This Information Statement is being furnished to stockholders of record as
of June 9, 2006, of the outstanding shares of common stock, par value $0.001
(the "Common Stock") of Applied Spectrum Technologies, Inc., a Delaware
corporation ("Applied"), pursuant to Section 14(f) of the Securities Exchange
Act of 1934 (the "Exchange Act") and Rule 14f-1 promulgated thereunder, in
connection with the issuance of certain shares of Series A Convertible Preferred
Stock pursuant to an Agreement and Plan of Merger (the "Merger Agreement") dated
as of May 16, 2006, by and among Applied, Pro-Stars, Inc., a Nevada corporation
("Pro-Stars") and APSP Acquisition, Inc., a Delaware corporation and
wholly-owned subsidiary of Applied ("Merger Sub").

Under the Merger Agreement, Applied and Pro-Stars will enter into a
business combination transaction by means of a merger ("Merger") between Merger
Sub and Pro-Stars in which Pro-Stars will merge with Merger Sub and be the
surviving entity, through an exchange of all the issued and outstanding shares
of common stock of Pro-Stars for shares of Series A Convertible Preferred Stock,
par value $0.001 per share, of Applied ("Preferred Stock"). Following the
closing of the Merger ("Closing"), Pro-Stars will continue as a wholly-owned
subsidiary of Applied.

The Merger Agreement is included as Exhibit 2.1 to Applied's Current
Report on Form 8-K dated May 16, 2006, and filed with the Securities and
Exchange Commission ("SEC") on May 19, 2006. The Merger Agreement is the legal
document that governs the Merger and the other transactions contemplated by the
Merger Agreement. The discussion of the Merger Agreement set forth herein is
qualified in its entirety by reference to this Exhibit 2.1.

The Merger Agreement provides that Applied's current sole director and
officer, Kevin R. Keating, will resign as an officer and director of Applied
effective as of the Closing Date (as defined in the Merger Agreement) and will
appoint to Applied's board the following persons:

o Sam Battistone, the Chairman and CEO of Pro-Stars
o Sean Goodchild, the President, Secretary and a director of Pro-Stars
o Dale Larsson, the Chief Financial Officer and a director of
Pro-Stars
o Klaus Moeller, a director of Pro-Stars

Each of these newly-appointed directors of Applied is described in more detail
below.

This Information Statement is being furnished pursuant to Section 14(f) of
the Exchange Act, and Rule 14f-1 promulgated thereunder. No action is required
by the stockholders of Applied in connection with this Information Statement.
However, Section 14(f) of the Exchange Act of 1934 and Rule 14f-1 promulgated
thereunder require the mailing to Applied's stockholders of record of the
information set forth in this Information Statement at least 10 days prior to
the date a change in a majority of Applied's directors occurs (otherwise than at
a meeting of Applied's stockholders). Accordingly, the Closing of the
transactions contemplated under the Merger Agreement and the resulting change in
a majority of Applied's directors will not occur until at least 10 days
following the filing and mailing of this Information Statement. This Information
Statement will be first mailed to Applied's stockholders of record on or about
June 14, 2006.

PROPOSED CHANGE IN CONTROL TRANSACTION

On May 16, 2006, Applied entered into the Merger Agreement with Pro-Stars,
Inc. and Merger Sub. Under the Merger Agreement, Applied and Pro-Stars will
enter into a business combination transaction by means of a merger between
Merger Sub and Pro-Stars in which Pro-Stars will merge with Merger Sub and be
the surviving entity, through an exchange of all the issued and outstanding
shares of common stock of Pro-Stars for shares of Series A Convertible Preferred
Stock, par value $0.001 per share, of Applied ("Preferred Stock"). Following the
closing of the Merger ("Closing"), Pro-Stars will continue as a wholly-owned
subsidiary of Applied.

In connection with the Merger, (i) each outstanding share of Pro-Stars
common stock will be converted into the right to receive 0.043656 shares of
Preferred Stock; and (ii) each outstanding option and warrant to purchase one
(1) share of Pro-Stars common stock will be assumed by Applied and converted
into an option or warrant to purchase 4.39879 shares of Applied common stock
(with the exercise price being adjusted accordingly). The exchange ratios set
forth above assume $15,000,000 in gross proceeds to be received by Applied in
the Equity Financing (defined below) and are subject to change depending on the
actual amount of gross proceeds received by Applied in the Equity Financing and
the actual pre-money valuation of Applied (after giving effect to the Merger
with Pro-Stars).

The consummation of the Merger is contingent on a minimum of $10,000,000
(or such lesser amount as mutually agreed to by Applied and Pro-Stars) being
subscribed for, and funded into escrow, by certain accredited and institutional
investors ("Investors") for the purchase of either Preferred Stock or common
stock of Applied promptly after the closing of the Merger under terms and
conditions approved by Applied's board of directors immediately following the
Merger ("Equity Financing"). The closing of the Equity Financing will be
contingent on the closing of the Merger, and the Merger will be contingent on
the closing of the Equity Financing.

No assurances can be given that the Equity Financing or the Merger will be
completed. Further, in the event the Equity Financing is completed, there can be
no assurance that that the gross proceeds will be at least $10,000,000.

The exchange ratios set forth above are also subject to adjustment to
reflect appropriately the effect of any stock split, stock dividend,
reorganization, recapitalization, reclassification, combination or other like
change with respect to the capital stock of Applied or Pro-Stars (or any options
or warrants with respect to the foregoing) occurring on or after May 16, 2006
and through the Closing.

For purposes of this Information Statement, it is assumed that the Equity
Financing will be completed with gross proceeds of $15,000,000 and, as such, the
Merger is completed without any adjustment to the exchange ratios.

As of May 31, 2006, Pro-Stars common stock, options and warrants
outstanding were as follows:

o 22,906,350 shares of common stock.

o Options to purchase 4,325,000 shares of common stock at an exercise
price of $1.00 per share.

o Warrants to purchase 2,177,550 shares of common stock at an exercise
price of $1.00 per share, warrants to purchase 100,000 shares of
common stock at an exercise price of 110% of the common stock share
price in the Equity Financing and warrants to purchase 100,000
shares of common stock at an exercise price of 120% of the common
stock share price in the Equity Financing.

Assuming no Pro-Stars' stockholder elects dissenters' rights, the
Pro-Stars stockholders will be issued 1,000,000 shares of Preferred Stock in the
Merger. Each share of Preferred Stock will be convertible into 100.760204 shares
of Applied's common stock. Accordingly, upon completion of the Merger and the
Equity Financing, the Pro-Stars stockholders will own 1,000,000 shares of
Preferred Stock (equivalent to 100,760,204 shares of Applied's common stock on
an as-converted basis), the Investors will receive 72,350,555 shares of
Applied's common stock (or, if the Equity Financing is structured as Preferred
Stock, 718,047 shares of Preferred Stock convertible into 72,350,555 shares of
Applied's common stock), and the current Applied stockholders will own 5,353,941
shares of Applied's common stock. Upon conversion of the Preferred Stock, the
Pro-Stars stockholders together with the Investors will own approximately 97% of
the total outstanding shares of Applied's common stock, and the current Applied
stockholders will own approximately 3% of the total outstanding shares of
Applied's common stock.

The issuance of the shares of Preferred Stock to the Pro-Stars
stockholders in the Merger (and, upon conversion, the shares of Applied common
stock underlying such shares of Preferred Stock) and the issuance of shares of
Preferred Stock or Applied's common stock in the Equity Financing are intended
to be exempt from registration under the Securities Act of 1933, as amended (the
"Securities Act"), pursuant to Section 4(2) thereof and such other available
exemptions. As such, the shares of Applied's common stock, the shares of
Preferred Stock and the shares of Applied's common stock underlying the
Preferred Stock may not be offered or sold in the United States unless they are
registered under the Securities Act, or an exemption from the registration
requirements of the Securities Act is available. No registration statement
covering these securities has been filed with the United States Securities and
Exchange Commission ("Commission") or with any state securities commission in
respect of the Merger or the Equity Financing. However, as a condition to the
Equity Financing, it is expected that Applied will agree to register for public
re-sale the shares of Applied's common stock (or the shares of common stock
underlying the Preferred Stock) issued to the Investors in the Equity Financing.
In addition, Applied has agreed to register for public re-sale after the Merger:
(i) 2,400,000 shares of Applied's common stock (on a pre-Reverse Split basis),
the holders of which have piggyback registration rights, (ii) 2,281,302 shares
of Applied's common stock (on a pre-Reverse Split basis) held by KI Equity
Partners III, LLC, and (iii) shares of common stock underlying certain shares of
Preferred Stock issued in the Merger.

Applied is presently authorized under its Certificate of Incorporation to
issue 150,000,000 shares of common stock, $0.001 par value per share, and
5,000,000 shares of preferred stock, par value $0.001 per share. Of the
5,000,000 shares of preferred stock authorized, 2,000,000 shares will be
designated as Series A Convertible Preferred Stock pursuant to a certificate of
designations ("Certificate of Designations"), which will be approved by
Applied's board of directors, and filed with and accepted by, the Secretary of
State of the State of Delaware prior to the Closing of the Merger. Currently,
Applied has 5,353,941 shares of common stock outstanding and no shares of
preferred stock outstanding.

Each share of Preferred Stock will be convertible into 100.760204 shares
of Applied's common stock (the "Conversion Rate"). The Preferred Stock will
immediately and automatically be converted into shares of Applied's common stock
(the "Mandatory Conversion") upon the effective date of the filing of an Amended
and Restated Certificate of Incorporation of Applied, to be approved by a
majority of Applied's stockholders (voting together on an
as-converted-to-common-stock basis) following the Merger, effecting a 1 for 15
reverse stock split of Applied's outstanding common stock ("Reverse Split").

The holders of shares of Preferred Stock will be entitled to vote together
with the holders of Applied's common stock, as a single class, upon all matters
submitted to holders of common stock for a vote. Each share of Preferred Stock
will carry a number of votes equal to the number of shares of common stock
issuable as if converted at the record date. As such, immediately following the
Merger, the Pro-Stars stockholders and the Investors will have approximately 97%
of the total combined voting power of all classes of Applied stock entitled to
vote.

In connection with the Reverse Split, Applied's board of directors may, in
its discretion, provide special treatment to certain Applied stockholders to
preserve round lot holders (i.e., holders owning at least 100 shares prior to
the Reverse Split) after the Reverse Split. Applied's board of directors may
elect, in its discretion, to provide such special treatment to the record
holders of Applied's common stock only on a per certificate basis or more
generally to the beneficial holders of Applied's common stock. For example, if
Applied's board determines to provide such special treatment to record holders
only, the record holders of Applied's common stock holding a certificate
representing 1,500 or fewer shares of common stock but at least 100 shares of
common stock would receive 100 shares of common stock after the Reverse Split
with respect to each such certificate, and record holders holding a certificate
representing 100 shares of common stock or fewer would not be affected and would
continue to hold a certificate representing the same number of shares as such
stockholders held before the Reverse Split. In the alternative, if Applied's
board determines to provide such special treatment to beneficial holders
generally, the beneficial holders of Applied's common stock beneficially holding
1,500 or fewer shares of common stock but at least 100 shares of common stock
would receive 100 shares of common stock after the Reverse Split, and persons
beneficially holding 100 shares of common stock or fewer would not be affected
by the Reverse Split and would continue to hold the same number of shares as
such stockholders held before the Reverse Split. The terms and conditions of
special treatment afforded to Applied stockholders to preserve round lot
stockholders, if any, including the record dates for determining which
stockholders may be eligible for such special treatment, will be established in
the discretion of Applied's board of directors.

Effective as of the Closing of the Merger, and subject to applicable
regulatory requirements, including the preparation, filing and distribution to
the Applied stockholders of this Information Statement at least ten (10) days
prior to Closing, Kevin R. Keating, Applied's current sole officer and director
will resign such positions and will appoint as directors:

As a condition to the Closing of the Merger, the holders of Applied's
capital stock representing a majority of Applied's voting power immediately
after Closing (including KI Equity Partners III, LLC, Applied's current majority
stockholder) will agree to vote their shares of Applied's voting securities to
approve the Reverse Split, the assumption of and amendment to, Pro-Stars' 2005
equity incentive plan, and the change of Applied's corporate name to Pro-Stars,
Inc. (collectively, the "Actions").

Additional information concerning Messrs. Battistone, Goodchild, Larsson
and Moeller is set forth below.

At or prior to the Closing, Applied will also enter into a certain
financial advisory agreement with Keating Securities, LLC ("Keating
Securities"), a registered broker-dealer, under which Keating Securities will be
compensated by Applied for its advisory services rendered to Applied in
connection with the Merger. The transaction advisory fee will be $500,000, with
the payment thereof being subject to the Closing of the Merger.

Applied and Pro-Stars have each agreed to continue to operate their
business in the ordinary course prior to the Merger.

Under the Merger Agreement, each of Applied and Pro-Stars have agreed to
do certain things, some of which are conditions to the Merger transaction. Each
company is obligated to (a) obtain all necessary approvals for various aspects
of the transaction, (b) give the other access to the records and personnel to
complete due diligence review, (c) proceed expeditiously to undertake all
actions so as to be able to consummate the Merger, (d) in the case of Pro-Stars,
deliver audited financial statements including a balance sheet as of December
31, 2004 and 2005 and statements of operations, cash flows and stockholders'
equity for the years then ended, and unaudited financial statements including a
balance sheet as of March 31, 2005 and 2006 and statements of operations, cash
flows and stockholders' equity for the three months then ended, and (e) refrain
from soliciting or initiating proposals from, providing information to or
holding discussions with any party concerning any sale of assets or any material
portion of any capital stock or any merger, consolidation, business combination,
liquidation or similar transaction, subject to the fiduciary obligations of
directors generally.

Consummation of the Merger is also contingent upon (i) preparation, filing
and distribution to the Applied stockholders of this Information Statement, (ii)
continued quotation of Applied's common stock on the Over-the-Counter Bulletin
Board, (iii) the completion of the Equity Financing, (iv) Applied's entry into
an investor relations agreement, and (v) holders of no more than 0.5% of the
outstanding shares of Pro-Stars' common stock shall have taken action to
exercise their dissenters' or appraisal rights pursuant to applicable laws.

The representations and warranties of the parties to the Merger Agreement
generally do not survive the Closing.

The Merger Agreement may be terminated as follows: (i) by mutual consent,
(ii) by either party if the Merger is not consummated by June 30, 2006, (iii) by
either party if the Merger is prohibited by issuance of an order, decree or
ruling, or (iv) by either party if the other is in material breach of any
representation, warranty, covenant or agreement. In the event of termination,
both parties are responsible for their own expenses. If the Merger Agreement is
terminated by Applied as a result of Pro-Stars' failure to satisfy the
conditions precedent to Closing that are applicable to it or as a result of a
breach or misrepresentation by Pro-Stars, the $50,000 deposit paid to Applied by
Pro-Stars may be retained by Applied as liquidated damages and as its sole
source of damages for any breach or termination of the Merger Agreement.

The directors of Applied have approved the Merger Agreement and the
transactions contemplated thereunder. The directors of Pro-Stars have approved
the Merger Agreement and the transactions contemplated thereunder. The Merger
Agreement and the transactions contemplated thereunder require the approval of
Pro-Stars' stockholders before the Merger can be consummated. The parties expect
the closing of the transactions under the Merger Agreement to occur on or about
June 30, 2006. However, there can be no assurances that the Merger or Equity
Financing will be completed.

On March 28, 2006, in its Current Report on Form 8-K dated March 27, 2006,
Applied reported the execution of a letter of intent to acquire Pro-Stars. On
May 19, 2006, in its Current Report on Form 8-K dated May 16, 2006, Applied
reported the execution of the Merger Agreement to acquire Pro-Stars.

Kevin R. Keating is the father of Timothy J. Keating, the principal member
of Keating Investments, LLC. Keating Investments, LLC is the managing member of
KI Equity Partners III, LLC ("KI Equity"), which is the current majority
stockholder of Applied, and Keating Securities, LLC, the registered
broker-dealer affiliate of Keating Investments, LLC. Kevin R. Keating is not
affiliated with and has no equity interest in Keating Investments, LLC, KI
Equity or Keating Securities, LLC and disclaims any beneficial interest in the
shares of Applied's common stock owned by KI Equity. Similarly, Keating
Investments, LLC, KI Equity and Keating Securities, LLC disclaim any beneficial
interest in the shares of Applied's common stock currently owned by Kevin R.
Keating.

VOTING SECURITIES

Applied's common stock is the only class of equity securities that is
currently outstanding and entitled to vote at a meeting of Applied's
stockholders. Each share of common stock entitles the holder thereof to one
vote. As of June 1, 2006, 5,353,941 shares of Applied' common stock were
outstanding.

APPLIED'S BUSINESS

Applied is currently a public "shell" company with nominal assets whose
sole business has been to identify, evaluate and investigate various companies
with the intent that, if such investigation warrants, a reverse merger
transaction be negotiated and completed pursuant to which Applied would acquire
a target company with an operating business with the intent of continuing the
acquired company's business as a publicly held entity.

PRO-STARS' BUSINESS

Pro-Stars, Inc., a Nevada corporation ("Pro-Stars"), owns, either directly
or indirectly, a majority of the partnership interests in and to the following
limited partnerships: (i) CAEFOD, LP, a Nevada limited partnership ("CAEFOD");
(ii) RIOFOD, LP, a Nevada limited partnership ("RIOFOD"); (iii) SWFOD, LP, a
Nevada limited partnership ("SWFOD"); and (iv) MOAFOD, LP, a Nevada limited
partnership ("MOAFOD") (collectively, the "Partnerships"). Each of the
Partnerships has entered into a franchise agreement with Dreams Franchise
Corporation, a California corporation ("DFC") to operate a Field of Dreams(R)
store (collectively, the "Stores"). The Stores sell sports-related merchandise
and celebrity-oriented merchandise, sports collectibles, memorabilia, trading
cards and related merchandise and products. The Stores owned by CAEFOD, RIOFOD
and SWFOD are located in malls on the strip in Las Vegas while the Store owned
by MOAFOD is located in the Mall of America in Bloomington, Minnesota.

Pro-Stars also owns a 100% interest in Stars Live 365, LLC ("SL365"),
which operates at certain of Pro-Stars' Field of Dreams store locations in Las
Vegas and which owns an interest in each of the Partnerships. The Stars Live 365
concept emphasizes the presence at the store each day of a celebrity personality
from the sports, television, motion picture, political or any other arena that
has produced well-recognized individuals to sign autographs, photographs or
other pieces of memorabilia. Through its ownership of SL365, Pro-Stars owns a
majority interest in and is the general partner of 365 Las Vegas, LP, a Nevada
limited partnership, and a majority interest in each of the Partnerships.

The corporate headquarters of Pro-Stars is located at Pro-Stars, Inc.,
6225 MacLeod Ave., Suite 23, Las Vegas, Nevada 89120.

The business of Pro-Stars involves a number of risks and uncertainties
that could cause the actual results of the company to differ materially from
those estimated by management from time to time. Potential risks and
uncertainties, include, but are not limited to, such factors as fluctuations in
demand for Pro-Stars' products, changes in the franchise arrangements for
Pro-Stars' current or future franchise store locations, the cost of inventory
purchased from Pro-Stars' franchisor and its affiliates, conditions and trends
in the retail market, additions or departures of key personnel, Pro-Stars'
ability to attract and maintain customers and strategic business relationships,
Pro-Stars' ability to identify, locate and construct new store locations on a
cost-effective basis, the impact of competitive products and pricing, growth in
target markets, the adequacy of Pro-Stars' liquidity and financial strength to
support its growth, and other information that may be detailed from time to time
in Applied's filings with the United States Securities and Exchange Commission
should the Merger transaction contemplated by the Merger Agreement be completed.

DIRECTORS AND OFFICERS

On December 14, 2005, Norwood Venture Corp., a Delaware corporation
("Norwood") entered into a Securities Purchase Agreement with KI Equity Partners
III, LLC, a Delaware limited liability company ("KI Equity"), as amended (the
"Purchase Agreement") under which KI Equity agreed to purchase and Norwood
agreed to sell an aggregate of 2,281,302 shares of Applied's common stock,
representing approximately 77.2% of Applied's outstanding shares of common stock
at the time, to KI Equity at a price of $175,000.

The closing of the transactions under the Purchase Agreement occurred on
December 29, 2005 ("Closing"). Effective as of the Closing, Mark R. Littell
resigned as Chief Executive Officer and Chief Financial Officer of Applied, and
Kevin R. Keating was appointed President, Secretary, Treasurer and a director of
Applied. Mark R. Littell had been the Chief Executive Officer, Chief Financial
Officer and a Director of Applied since January 1998. Since May 1988, Mr.
Littell has been the President and controlling stockholder of Norwood.

The Purchase Agreement contemplated that Mark R. Littell would continue as
a director of Applied following the Closing until such time as Applied complied
with Section 14(f) of the Securities Exchange Act of 1934, as amended, and Rule
14f-1 promulgated under the Exchange Act. The information statement under Rule
14f-1 was filed with the SEC on December 15, 2005 and mailed to Applied's
stockholders on December 19, 2005. Accordingly, effective December 30, 2005,
Mark R. Littell resigned as a director of Applied.

The following table sets forth the names, positions and ages of executive
officers and directors of Applied. All directors serve until the next annual
meeting of stockholders or until their successors are elected and qualified.
Officers are elected by the board of directors and their terms of office are,
except to the extent governed by employment contract, at the discretion of the
board of directors. There is no family relationship between any director,
executive officer or person nominated or chosen by Applied to become a director
or executive officer.

NAME AGE POSITION TERM
- -------------------- ------- ----------------------------------- ----------
Kevin R. Keating (1) 66 President, Treasurer, Secretary and 1 Year
Director

(1) Mr. Keating became President, Secretary, Treasurer, and a director
effective December 29, 2005.

KEVIN R. KEATING, sole Director, President, Secretary and Treasurer of
Applied, is an investment executive and for the past nine years has been the
Branch Manager of the Vero Beach, Florida, office of Brookstreet Securities
Corporation. Brookstreet is a full-service, national network of independent
investment professionals. Mr. Keating services the investment needs of private
clients with special emphasis on equities. For more than 35 years, he has been
engaged in various aspects of the investment brokerage business. Mr. Keating
began his Wall Street career with the First Boston Company in New York in 1965.
From 1967 through 1974, he was employed by several institutional research
boutiques where he functioned as Vice President Institutional Equity Sales. From
1974 until 1982, Mr. Keating was the President and Chief Executive Officer of
Douglas Stewart, Inc., a New York Stock Exchange member firm. Since 1982, he has
been associated with a variety of firms as a registered representative servicing
the needs of individual investors. Mr. Keating is also the manager and sole
member of Vero Management, LLC, which has a management agreement with Applied.

COMMITTEES OF BOARD OF DIRECTORS

Audit Committee and Audit Committee Financial Expert
- ----------------------------------------------------

Applied is not a "listed company" under SEC rules and is therefore not
required to have an audit committee comprised of independent directors. Applied
does not currently have an audit committee, however, for certain purposes of the
rules and regulations of the SEC, Applied's board of directors is deemed to be
its audit committee. Applied's board of directors has determined that its
members do not include a person who is an "audit committee financial expert"
within the meaning of the rules and regulations of the SEC. The board of
directors has determined that each of its members is able to read and understand
fundamental financial statements and has substantial business experience that
results in that member's financial sophistication. Accordingly, the board of
directors believes that each of its members have the sufficient knowledge and
experience necessary to fulfill the duties and obligations that an audit
committee would have.

No Code of Ethics
- -----------------

A code of ethics relates to written standards that are reasonably designed
to deter wrongdoing and to promote:

o Honest and ethical conduct, including the ethical handling of actual
or apparent conflicts of interest between personal and professional
relationships;

o Full, fair, accurate, timely and understandable disclosure in
reports and documents that are filed with, or submitted to, the SEC
and in other public communications made by an issuer;

o Compliance with applicable governmental laws, rules and regulations;

o The prompt internal reporting of violations of the code to an
appropriate person or persons identified in the code; and

o Accountability for adherence to the code.

Applied has not adopted a code of ethics that applies to the Chief
Executive Officer and Chief Financial Officer because it has no meaningful
operations. Applied does not believe that a formal written code of ethics is
necessary at this time.

Conflicts of Interest
- ---------------------

Certain conflicts of interest existed at September 30, 2005 and may
continue to exist between Applied and its officers and directors due to the fact
that each has other business interests to which they devote their primary
attention. Each officer and director may continue to do so notwithstanding the
fact that management time should be devoted to the business of Applied.

Certain conflicts of interest may exist between Applied and its
management, and conflicts may develop in the future. Applied has not established
policies or procedures for the resolution of current or potential conflicts of
interest between Applied, its officers and directors or affiliated entities.
There can be no assurance that management will resolve all conflicts of interest
in favor of Applied, and conflicts of interest may arise that can be resolved
only through the exercise by management their best judgment as may be consistent
with their fiduciary duties. Management will try to resolve conflicts to the
best advantage of all concerned, but there may be times when an acquisition
opportunity is given to another entity to the disadvantage of Applied's
stockholders and for which there will be no recourse. As part of the Merger,
Applied will engage Keating Securities, LLC, an affiliate of Keating
Investments, LLC, the managing member of Applied's controlling stockholder, to
act as a financial advisor in connection with the Merger for which it will earn
a $500,000 advisory fee upon the Closing.

Board Meetings and Committees
- -----------------------------

Directors may be paid their expenses, if any, of attendance at such
meeting of the Board of Directors, and may be paid a fixed sum for attendance at
each meeting of the Board of Directors or a stated salary as Director. No such
payment shall preclude any Director from serving Applied in any other capacity
and receiving compensation therefore except as otherwise provided under
applicable law. Except as set forth below, no compensation has been paid to the
Directors. The Board of Directors may designate from among its members an
executive committee and one or more other committees. No such committees have
been appointed.

Applied is not a "listed company" under SEC rules and is therefore not
required to have a compensation committee or a nominating committee. Applied
does not currently have a compensation committee. Applied's Board of Directors
is currently comprised of only one member, Kevin R. Keating, who is also
Applied's sole officer acting as President, Secretary and Treasurer. Applied has
no employees, and any compensation for directors and officers must be approved
by the Board of Directors.

Applied neither has a nominating committee for persons to be proposed as
directors for election to the Board of Directors nor a formal method of
communicating nominees from shareholders. Applied does not have any restrictions
on shareholder nominations under its certificate of incorporation or by-laws.
The only restrictions are those applicable generally under Delaware General
Corporation Law and the federal proxy rules. Currently, the entire Board of
Directors decides on nominees, on the recommendation of one or more members of
the Board of Directors. None of the members of the Board of Directors are
"independent." The Board of Directors will consider suggestions from individual
shareholders, subject to evaluation of the person's merits. Stockholders may
communicate nominee suggestions directly to any of the Board members,
accompanied by biographical details and a statement of support for the nominees.
The suggested nominee must also provide a statement of consent to being
considered for nomination. Although there are no formal criteria for nominees,
Applied's Board of Directors believes that persons should be actively engaged in
business endeavors, have a financial background, and be familiar with
acquisition strategies and money management.

Because the management and directors of Applied are the same persons, the
Board of Directors has determined not to adopt a formal methodology for
communications from shareholders on the belief that any communication would be
brought to the Board's attention by virtue of the co-extensive capacities served
by Kevin R. Keating.

APPLIED EXECUTIVE COMPENSATION SUMMARY

The following Executive Compensation Chart highlights the compensation for
Applied's executive officers. No other executive officers received salary and
bonus in excess of $100,000 for the prior three fiscal years.

- ------------------------------------------------------------------------------------------------------------------------------
Long Term Compensation
- ------------------------------ ---------------------------------------- -------------------------------------- ---------------
Annual Compensation Awards Payouts
- ------------------------------ ---------------------------------------- ------------------------- ----------- ---------------
Securities
Name Other Restricted Underlying
and Annual Stock Options/ LTIP All Other
Principal Salary ($) Bonus Compensation Award(s) SARs (#) (2) Payouts Compensation
Position Year ($) ($) ($) ($) ($)
- ---------------------- ------- ------------ --------- ----------------- ------------ ------------- ----------- ---------------

Mark R. Littell (CEO 2005 $0 $0 $0 N/A N/A N/A N/A
and CFO) 2004 $0 $0 $0 N/A N/A N/A N/A
2003 $0 $0 $0 N/A N/A N/A N/A
- ---------------------- ------- ------------ --------- ----------------- ------------ ------------- ----------- ---------------

There was no other compensation paid to Mark R. Littell during the fiscal
year ended September 30, 2005 in his capacity as an officer or director of
Applied. There were no option grants to Mark R. Littell during the fiscal year
ended September 30, 2005, and no options were exercised by Mark R. Littell
during the fiscal year ended September 30, 2005.

We did not pay any compensation to any director in the year ended
September 30, 2005.

On January 4, 2006, Applied issued 100,000 shares of its common stock to
Kevin R. Keating, the current sole officer and director of Applied, for services
rendered to Applied valued at $5,000, or $0.05 per share. Mr. Keating became an
officer and director of Applied effective December 29, 2005.

NEW DIRECTORS AND OFFICERS

The Merger Agreement provides that, on the Closing Date, Kevin R. Keating
will resign as the President, Treasurer, Secretary and a director of Applied and
shall appoint the following persons as executive officers and directors of
Applied.

NAME AGE POSITION
------------------- ----- --------------------------------------------------

Sam D. Battistone 66 Chairman of the Board and Chief Executive Officer

Sean Goodchild 45 President, Secretary and Director

Dale E. Larsson 62 Chief Financial Officer and Director

Klaus Moeller 45 Director

SAM D. BATTISTONE is currently the chief executive officer and chairman of
the board of directors of Pro-Stars. Mr. Battistone has held these positions
since January, 2005. Mr. Battistone is also the chief executive officer and
chairman of the board of directors of Dreams, Inc., a position he has held since
inception of that company. Mr. Battistone served as president of Dreams, Inc.
until November 1998. He was the principal owner, founder and served as Chairman
of the Board, President and Governor of the New Orleans Jazz and Utah Jazz of
the National Basketball Association (NBA) from 1974 to 1986. In 1983, he was
appointed by the Commissioner of the NBA to the Advisory committee of the Board
of Governors of the NBA. He held that position until he sold his interest in the
team. He served as a founding director of Sambo's Restaurants, Inc. and in each
of the following capacities, from time to time, from 1967 to 1979: President,
Chief Executive Officer, Vice-Chairman and Chairman of the Board of Directors.
During that period, Sambo's grew from a regional operation of 59 restaurants to
a national chain of more than 1,100 units in 47 states. From 1971 to 1973, he
served on the Board of Directors of the National Restaurant Association.

SEAN GOODCHILD is the president of Pro-Stars and has been elected to serve
on the board of directors of Pro-Stars. Mr. Goodchild also previously served as
Pro-Stars' chief executive officer. Mr. Goodchild has sat on the board of
directors since Pro-Stars' inception. Mr. Goodchild has a background in sales,
sourcing products from around the globe, mainly in China, Hong Kong, Thailand
and other parts of Asia, as well as South America.

DALE E. LARSSON has served as a director of Pro-Stars since January 10,
2005, when he was appointed chief financial officer and a director of Pro-Stars.
Mr. Larsson has served as a director of Dreams, Inc. since 1982 and was
Secretary-Treasurer and Chief Financial Officer of Dreams, Inc. until September
1998. Mr. Larsson graduated from Brigham Young University in 1971 with a degree
in business. From 1972 to 1980, Mr. Larsson served as controller of Invest West
Financial Corporation, a Santa Barbara, California based real estate company.
From 1981 to 1982, he served as the corporate controller of WMS Famco, a Nevada
corporation based in Salt Lake City, Utah, which engaged in the business of
investing in land, restaurants and radio stations.

KLAUS MOELLER was elected to serve on the board of directors of Pro-Stars.
Mr. Moeller currently also acts as the Chief Executive Officer and Chairman of
the Board of Pacific Entertainment Corporation, a privately held company in the
business of producing and selling a variety of children's entertainment
products. Mr. Moeller founded Genius Products, Inc., a publicly traded company,
in 1997 and acted as its chief executive officer until February 2005. Mr.
Moeller resigned as a director of Genius Products on September 9, 2005. In his
capacity as chief executive officer, Mr. Moeller was in charge of the day-to-day
business operations of Genius Products. Mr. Moeller also served as the interim
chief financial officer of Genius Products from May 2001 to July 28, 2005. On
December 31, 2005, Mr. Moeller entered into an Asset Purchase Agreement with
Genius Products, which was later assigned to Pacific Entertainment Corporation,
whereby he obtained all licensing rights and trademarks to a variety of
children's entertainment products, including brand names like Baby Genius. Mr.
Moeller was previously chairman of the board and chief executive officer of
International Trade and Manufacturing Corporation, which was acquired by Genius
Products in October 1997. Mr. Moeller has a background in marketing,
advertising, real estate and auditing.

PRO-STARS EXECUTIVE COMPENSATION SUMMARY

The following Executive Compensation Chart highlights the compensation for
Pro-Stars' executive officers. No other executive officers received salary
and/or bonus in excess of $100,000 for the prior three fiscal years ended
December 31, 2003, 2004 and 2005.

- ----------------------------------------------------------------------- --------------------------------------
Long Term Compensation
- ----------------------------------------------------------------------- --------------------------------------
Awards Payouts
Annual Compensation
- --------------------------- ------------------------------------------- -------------------------- ----------- ---------------
Securities
Name Other Restricted Underlying
and Annual Stock Options/ LTIP All Other
Principal Salary Bonus Compensation Award(s) SARs (#) (#) Payouts Compensation
Position Year ($) ($) ($) ($) ($) ($)
- ------------------ -------- --------------- --------- ----------------- ------------ ------------- ----------- ---------------

Sam D. 2005 $192,000 (1) $0 $8,264 (2) N/A 1,000,000 N/A N/A
Battistone (CEO 2004 $0 $0 $0 N/A N/A N/A N/A
and Director) 2003 $0 $0 $0 N/A N/A N/A N/A

- ------------------ -------- --------------- --------- ----------------- ------------ ------------- ----------- ---------------
Sean Goodchild 2005 $80,000 $0 $0 N/A 500,000 N/A N/A
(President, COO 2004 $60,000 $0 $0 N/A N/A N/A N/A
and Director) 2003 $0 $0 $0 N/A N/A N/A N/A

- ------------------ -------- --------------- --------- ----------------- ------------ ------------- ----------- ---------------
Dale E. Larsson 2005 $80,000 $0 $3,471(3) N/A 500,000 N/A N/A
(CFO and 2004 $0 $0 $0 N/A N/A N/A N/A
director) 2003 $0 $0 $0 N/A N/A N/A N/A

- ------------------ -------- --------------- --------- ----------------- ------------ ------------- ----------- ---------------

(1) Mr. Battistone has assigned all of his annual compensation to Dreamstar,
Inc., an entity wholly owned by him, and Pro-Stars makes Mr. Battistone's salary
payments directly to that entity.

(2) Amount represents auto allowance paid to Mr. Battistone.

(3) Amount represents payments in connection to Mr. Larsson's life insurance
premiums.

EMPLOYMENT AGREEMENTS

On January 1, 2005, Mr. Larsson entered into a written employment
agreement with Pro-Stars, Inc. Additionally, on October 1, 2005, Mr. Battistone
entered into a written employment agreement with Pro-Stars, Inc. Each employment
agreement is for a three year term. Pursuant to these employment agreements,
Pro-Stars pays Mr. Battistone an annual base salary of $192,000 and Mr. Larsson
an annual base salary of $80,000. Additionally, pursuant to the these employment
agreements, Pro-Stars granted stock options to Mr. Battistone to purchase
1,000,000 shares of common stock of Pro-Stars and stock options to Mr. Larsson
to purchase 500,000 shares of common stock of Pro-Stars, each at an exercise
price of $1.00. Assuming (i) the completion of the Merger; (ii) gross proceeds
from the Equity Financing of $15,000,000; (iii) completion of the Reverse Split;
and (iv) the automatic conversion of the Preferred Stock into Applied's Common
Stock, the option granted to Mr. Battistone would be adjusted to become an
option to purchase 293,253 shares of common stock of Applied and the option
granted to Mr. Larsson would be adjusted to become an option to purchase 146,627
shares of common stock of Applied, each at an exercise price of $3.41 per share.
The stock options granted to Mr. Battistone and Mr. Larsson vest at a rate of
50% of the shares on the date of the option grant, 25% on the first anniversary
of the date of the option grant and 25% on the second anniversary of the date of
the option grant. Mr. Battistone and Mr. Larsson are also entitled to receive
annual bonuses and additional stock option grants at the discretion of
Pro-Stars' Board of Directors. In addition, if either Mr. Battistone or Mr.
Larsson is terminated for any reason other than for "cause" as defined in their
respective agreements, then Pro-Stars must pay the applicable officer an amount
equal to one year's base salary.

On January 1, 2005, Mr. Joseph Casey, III entered into a written
employment agreement with Pro-Stars to serve as the head of the Stars Live 365
division. Mr. Casey's employment agreement is for a three year term. Pursuant to
this employment agreement, Pro-Stars pays Mr. Casey an annual base salary of
$84,000. Additionally, pursuant to the employment agreement, Pro-Stars granted
stock options to Mr. Casey to purchase 500,000 shares of common stock of
Pro-Stars, at an exercise price of $1.00. Assuming (i) the completion of the
Merger; (ii) gross proceeds from the Equity Financing of $15,000,000; (iii)
completion of the Reverse Split; and (iv) the automatic conversion of the
Preferred Stock into Applied's Common Stock, such option would be adjusted to
become an option to purchase 146,627 shares of common stock of Applied, at an
exercise price of $3.41 per share. The stock option vests at a rate of 50% of
the shares on the date of the option grant, 25% of the shares on the first
anniversary of the date of the option grant and 25% of the shares on the second
anniversary of the date of the option grant. Mr. Casey is also entitled to
receive annual bonuses and additional stock option grants at the discretion of
the Board of Directors. In addition, if Mr. Casey is terminated by Pro-Stars for
any reason other than for "cause" as defined in their respective agreements,
then Pro-Stars must pay Mr. Casey an amount equal to one year's base salary.

On January 1, 2004, Pro-Stars entered into a consulting agreement with Mr.
Sean Goodchild under which Mr. Goodchild received compensation equal to $5,000
per month exclusive of travel and out-of-pocket expenses, which were reimbursed
by Pro-Stars. The agreement expired on December 31, 2004 and was replaced by a
new three year agreement on January 1, 2005 for total payment of $80,000 per
annum exclusive of travel and out-of-pocket expenses, which are reimbursed by
Pro-Stars. Additionally, pursuant to the terms of the consulting agreement,
Pro-Stars granted a stock option to Mr. Goodchild to purchase 500,000 shares of
common stock of Pro-Stars, at an exercise price of $1.00. Assuming (i) the
completion of the Merger; (ii) gross proceeds from the Equity Financing of
$15,000,000; (iii) completion of the Reverse Split; and (iv) the automatic
conversion of the Preferred Stock into Applied's Common Stock, such option would
be adjusted to become an option to purchase 146,627 shares of common stock of
Applied, at an exercise price of $3.41 per share. The stock option vests at a
rate of 50% of the shares on the date of the option grant, 25% of the shares on
the first anniversary of the date of the option grant and 25% of the shares on
the second anniversary of the date of the option grant. Mr. Goodchild is also
eligible to participate in any of Pro-Stars' bonus programs. Pro-Stars also pays
Mr. Goodchild a monthly sum of $600 to purchase a health care benefit plan.
Under the agreement, Mr. Goodchild is entitled to indemnification by Pro-Stars
for damages resulting from certain liabilities, suits, claims, losses, damages
and judgments against him related to his services under the consulting
agreement. The consulting agreement may be terminated by either party upon
written notice at least 30 days prior to the termination date.

On January 1, 2004, Pro-Stars entered into a consulting agreement with Mr.
Klaus Moeller, under which Mr. Moeller received compensation equal to $5,000 per
month, exclusive of travel and out-of-pocket expenses, which were reimbursed by
Pro-Stars. The agreement expired on December 31, 2004 and was replaced by a new
three year agreement on January 1, 2005 for total payment of $3,000 per month,
exclusive of travel and out-of-pocket expenses, which are reimbursed by
Pro-Stars. Additionally, pursuant to the terms of the consulting agreement,
Pro-Stars granted a stock option to Mr. Moeller to purchase 500,000 shares of
common stock of Pro-Stars, each at an exercise price of $1.00. Assuming (i) the
completion of the Merger; (ii) gross proceeds from the Equity Financing of
$15,000,000; (iii) completion of the Reverse Split; and (iv) the automatic
conversion of the Preferred Stock into Applied's Common Stock, such option would
be adjusted to become an option to purchase 146,627 shares of common stock of
Applied, at an exercise price of $3.41 per share. The stock option vests at a
rate of 50% of the shares on the date of the option grant, 25% of the shares on
the first anniversary of the date of the option grant and 25% of the shares on
the second anniversary of the date of the option grant. Mr. Moeller is also
eligible to participate in any of Pro-Stars' bonus programs at the discretion of
Pro-Stars' Board of Directors. Under the agreement, Mr. Moeller is entitled to
indemnification by Pro-Stars for damages resulting from certain liabilities,
suits, claims, losses, damages and judgments against him related to his services
under the consulting agreement. The consulting agreement may be terminated by
either party upon written notice at least 30 days prior to the termination date.

STOCK OPTION GRANTS TO PRO-STARS EXECUTIVES

The following table provides information concerning individual option
grants of stock options made during fiscal 2005 to officers of Pro-Stars. The
percentage of total options granted to Pro-Stars' employees in the last fiscal
year is based on options to purchase an aggregate of 3,350,000 shares of common
stock granted under Pro-Stars Equity Incentive Plan to its employees in fiscal
2005.

NUMBER OF PERCENT OF
SHARES OF TOTAL
COMMON OPTIONS
STOCK GRANTED TO
UNDERLYING EMPLOYEES EXERCISE
OPTIONS IN LAST PRICE EXPIRATION
NAME GRANTED (#) FISCAL YEAR ($/SH) DATE
- ----------------- ------------- ------------- ---------- ----------

Sam D. Battistone 1,000,000 29% $1.00 7-28-2010
Sean Goodchild 500,000 14% $1.00 7-28-2010
Dale E. Larsson 500,000 14% $1.00 7-28-2010

The following table provides information concerning individual stock
option grants of stock options made during fiscal 2005 to officers of Pro-Stars
as adjusted to give effect to: (i) the completion of the Merger; (ii) gross
proceeds from the Equity Financing of $15,000,000; (iii) completion of the
Reverse Split; and (iv) the automatic conversion of the Preferred Stock into
Applied's Common Stock.

Sam D. Battistone 293,253 29% $3.41 7-28-2010
Sean Goodchild 146,627 14% $3.41 7-28-2010
Dale E. Larsson 146,627 14% $3.41 7-28-2010

Pro-Stars adopted a stock option plan (the "Equity Incentive Plan") in
May, 2005. Prior to the Merger, Pro-Stars had reserved 4,000,000 shares of its
common stock for issuance under the Equity Incentive Plan. In connection with
the Merger, Applied will assume the Equity Incentive Plan and all options
outstanding thereunder. After giving effect to the Merger and the Reverse Split,
the number of shares of common stock reserved under the Equity Incentive Plan
will be 1,173,011 shares of Applied common stock; provided, however, that
Applied intends to increase the number of shares reserved for issuance under the
Equity Incentive Plan to 2,000,000 after the closing of the Merger.

Under the Equity Incentive Plan, options to purchase common stock may,
from time to time, be granted to directors, officers, employees and service
providers of Pro-Stars. The exercise price for any non-statutory options granted
under the Equity Incentive Plan will not be less than 85% than the fair market
value of the common stock at the time of grant. The exercise price of incentive
stock options granted under the Equity Incentive Plan will not be less than the
fair market value of the common stock at the time of grant. The maximum term of
each option is ten years, and options granted under the Equity Incentive Plan
are non-transferable and subject to early termination in the event of the death
of the optionee or the optionee ceasing to be a director, officer, employee of
or a service provider to Pro-Stars or any applicable subsidiary.

Pro-Stars provides health insurance coverage to each of its employees and
pays Mr. Goodchild $600 per month to purchase a health care benefit plan.

To the best of Applied's knowledge, none of the proposed officers or
directors intended to be appointed following the Closing, including any of their
affiliates, currently beneficially own any equity securities or rights to
acquire any securities of Applied, and no such persons have been involved in any
transaction with Applied or any of its directors, executive officers or
affiliates that is required to be disclosed pursuant to the rules and
regulations of the SEC, other than with respect to the transactions that have
been described herein. To the best of Applied's knowledge, none of the proposed
officers and directors intended to be appointed following the Closing have been
convicted in a criminal proceeding, excluding traffic violations or similar
misdemeanors, nor have they been a party to any judicial or administrative
proceeding during the past five years, except for matters that were dismissed
without sanction or settlement, that resulted in a judgment, decree or final
order enjoining the person from future violations of, or prohibiting activities
subject to, federal or state securities laws, or a finding of any violation of
federal or state securities laws.

AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION
VALUES

The following table sets forth the number of shares of Pro-Stars' common
stock subject to exercisable and unexercisable stock options that Pro-Stars'
officers held at the end of its fiscal year 2005. The named officers did not
exercise any options in fiscal 2005.

NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS AT FISCAL
NAME OPTIONS AT FISCAL YEAR END YEAR END
- ----------------- --------------------------- ------------------------------
EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
Sam D. Battistone 500,000 500,000 $0 $0
Sean Goodchild 250,000 250,000 $0 $0
Dale E. Larsson 250,000 250,000 $0 $0

The following table provides information concerning the number of
shares of Pro-Stars' common stock subject to exercisable and unexercisable stock
options that Pro-Stars' officer held at the end of its fiscal year 2005 adjusted
to give effect to: (i) the completion of the Merger; (ii) gross proceeds from
the Equity Financing of $15,000,000; (iii) completion of the Reverse Split; and
(iv) the automatic conversion of the Preferred Stock into Applied's Common
Stock. The named officers did not exercise any options in fiscal 2005.

NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS AT FISCAL
NAME OPTIONS AT FISCAL YEAR END YEAR END
- ----------------- --------------------------- ------------------------------
EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
Sam D. Battistone 146,627 146,626 $0 $0
Sean Goodchild 73,314 73,313 $0 $0
Dale E. Larsson 73,314 73,313 $0 $0

DIRECTOR COMPENSATION

Directors who are also officers of Pro-Stars do not receive separate
compensation for their services as directors of Pro-Stars. Independent directors
of Pro-Stars currently do not receive compensation for their service on the
Board.

LEGAL PROCEEDINGS

On November 8, 2005, Pro-Stars initiated the litigation matter entitled
Pro-Stars, Inc. v. Paula Abdul, Inc., et al (together, "Abdul") (SDSC Case No.
GIC 856641) (the "Litigation"). Pursuant to the Litigation, Pro-Stars has
asserted a breach of contract action against Abdul for the breach of a licensing
agreement concerning the design, marketing and promotions of three watch designs
carrying the "Paula Abdul" trademark. Due to Abdul's nonperformance, Pro-Stars
has sued for breach of contract seeking to recover all out of pocket expenses
and reasonably anticipated lost profits.

Abdul filed a cross-complaint in response to the Litigation alleging a
breach of contract and fraud. Neither cause of action sets forth a damage claim
expected to be in excess of the jurisdictional minimum ($25,000). Pro-Stars
disputes the allegations set forth in the Cross-Complaint and intends to pursue
the matter to trial.

SECURITY OWNERSHIP OF
CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth certain information regarding Applied's
common stock beneficially owned on June 1, 2006, for (i) each shareholder
Applied knows to be the beneficial owner of 5% or more of its outstanding common
stock, (ii) each of Applied's executive officers and directors, and (iii) all
executive officers and directors as a group. In general, a person is deemed to
be a "beneficial owner" of a security if that person has or shares the power to
vote or direct the voting of such security, or the power to dispose or to direct
the disposition of such security. A person is also deemed to be a beneficial
owner of any securities of which the person has the right to acquire beneficial
ownership within 60 days. To the best of Applied's knowledge, all persons named
have sole voting and investment power with respect to such shares, except as
otherwise noted. Except as set forth in this Information Statement, there are
not any pending or anticipated arrangements that may cause a change in control
of Applied. At June 1, 2006, 5,353,941 shares of Applied' common stock were
outstanding.

Number of Shares Percent of
Name Beneficially Owned Shares
- ----------------------------------- ------------------ -----------
Kevin R. Keating 100,000 (1) 1.9%
936A Beachland Boulevard, Suite 13
Vero Beach, Florida 32963

KI Equity Partners III, LLC 4,481,302 (2) 83.7%
c/o Timothy J. Keating, Manager
5251 DTC Parkway, Suite 1090
Greenwood Village, Colorado 80111

All Executive Officers and 100,000 1.9%
Directors as a group

(1) Kevin R. Keating is not affiliated with and has no equity interest
in KI Equity Partners III, LLC ("KI Equity") and disclaims any
beneficial interest in the shares of Applied's common stock owned by
KI Equity.

(2) Timothy J. Keating is the manager of KI Equity and exercises sole
voting and investment control over such shares. KI Equity is not
owned by or affiliated with Kevin R. Keating and disclaims any
beneficial interest in the shares of Applied's common stock owned by
Kevin R. Keating.

The following table sets forth certain information regarding Applied's
common stock beneficially owned on June 1, 2006, for (i) each stockholder known
to be the beneficial owner of 5% or more of Applied's outstanding common stock,
(ii) each executive officer and director, and (iii) all executive officers and
directors as a group, on a pro forma basis to reflect the transactions
contemplated by the Merger Agreement on a post-Reverse Split basis, assuming
such transactions were completed as of such date and further assuming that the
gross proceeds from the Equity Financing are $15,000,000. The information
contained in the following table is provided for disclosure purposes only as
there can be no assurance that the transactions contemplated by the Merger
Agreement will be completed or that the actual ownership will be as set forth
therein based on the assumptions used. At Closing, Applied intends to file a
Current Report on Form 8-K which will include an updated beneficial ownership
table for Applied to reflect the actual results of the completion of the
transactions under the Merger Agreement and the Equity Financing.

Assuming (i) the completion of the Merger, (ii) gross proceeds from the
Equity Financing of $15,000,000, (iii) the Reverse Split, and (iv) the automatic
conversion of the Preferred Stock into Applied's Common Stock occurred as of
June 1, 2006, Applied expects to have 11,897,649 shares of Common Stock
outstanding.

Number of Shares Percent of
Name Beneficially Owned Shares
- ----------------------------------- ------------------ -----------

Sam D. Battistone 1,759,516 (1) 14.6%
P.O. Box 230400 Las Vegas, NV 88123

Sean Goodchild 843,102 (2) 7.0%
Apartado 1230
P-8401-910 Praia Do Carvoeiro
Algarve, Portugal

Dale E. Larsson 109,970 (3) 0.9%
1776 North State Street
Suite # 160
Orem, UT 84057

Klaus Moeller 549,849 (4) 4.5%
3335 Caminito Daniella
Del Mar, CA 92014

KI Equity Partners III, LLC 298,754 (5) 2.5%
c/o Timothy J. Keating, Manager
5251 DTC Parkway, Suite 1090
Greenwood Village, Colorado 80111

All Executive Officers and Directors 3,561,191 (6) 28.7%
as a Group (5 persons)

(1) Includes options to purchase 146,627 shares of common stock which
will be vested within sixty (60) days after June 1, 2006.

(2) Includes options to purchase 109,970 shares of common stock which
will be vested within sixty (60) days after June 1, 2006.

(3) Includes options to purchase 109,970 shares of common stock which
will be vested within sixty (60) days after June 1, 2006.

(4) Includes options to purchase 109,970 shares of common stock which
will be vested within sixty (60) days after June 1, 2006. These
shares are held by the Klaus Moeller Family Trust UTD 10/14/03 of
which Klaus Moeller is a trustee. Mr. Moeller has dispositive and
voting power over such shares.

(5) Timothy J. Keating is the manager of KI Equity Partners III, LLC
("KI Equity"), and exercises sole voting and investment control over
such shares

(6) Includes options to purchase 476,537 shares of common stock which
will be vested within sixty (60) days after June 1, 2006.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

APPLIED

In connection with the Purchase Agreement, Mark R. Littell and Norwood
entered into an agreement releasing Applied from any and all claims they have
against Applied.

During 2006, Norwood paid an accrued legal expense on behalf of Applied in
the amount of $1,568, which was recorded as additional paid-in capital.

In connection with the Purchase Agreement, Applied paid Norwood
approximately $18,936 for consulting services rendered by it to Applied.

Effective January 1, 2006, Applied entered into a contract with Vero
Management, L.L.C. ("Vero") for managerial and administrative services. Vero has
not been engaged to provide, and Vero does not render, legal, accounting,
auditing, investment banking or capital formation services. Kevin R. Keating,
the sole director of Applied, is the manager of Vero. The term of the contract
is for one year, but the contract may be terminated at any time. In
consideration of the services provided, Vero is paid $2,500 for each month in
which services are rendered.

Kevin R. Keating is the father of Timothy J. Keating, the principal member
of Keating Investments, LLC. Keating Investments, LLC is the managing member of
KI Equity, which is the majority stockholder of Applied. Keating Investments,
LLC is also the managing member and 90% owner of Keating Securities, LLC, a
registered broker-dealer. Kevin R. Keating is not affiliated with and has no
equity interest in Keating Investments, LLC, KI Equity, or Keating Securities,
LLC and disclaims any beneficial interest in the shares of Applied's common
stock owned by KI Equity. Similarly, Keating Investments, LLC, KI Equity and
Keating Securities, LLC disclaim any beneficial interest in the shares of
Applied's common stock currently owned by Kevin R. Keating.

At or prior to the Closing, pursuant to the terms of the Merger Agreement,
Applied will enter into a certain financial advisory agreement with Keating
Securities, LLC ("Keating Securities"), a registered broker-dealer, under which
Keating Securities will be compensated by Applied for its advisory services
rendered to Applied in connection with the Merger. The transaction advisory fee
will be $500,000. This fee shall be paid upon the Closing of the Merger.

Other than the above transactions or otherwise set forth in this
Information Statement or in any reports filed by Applied with the SEC, Applied
has not entered into any material transactions with any director, executive
officer, and nominee for director, beneficial owner of five percent or more of
its common stock, or family members of such persons. Applied is not a subsidiary
of any company.

PRO-STARS

Sean Goodchild, Pro-Stars' president, has loaned Pro-Stars $450,000 to be
used for certain tenant improvements for its Field of Dreams store located at
Caesar's Palace. The loan is to be repaid out of the proceeds of the Equity
Financing.

Sam D. Battistone, the chief executive officer and chairman of the board
of directors of Pro-Stars, is an officer, director and shareholder of Dreams,
Inc., a Utah corporation. Additionally, Dale E. Larsson, the chief financial
officer and director of Pro-Stars, is also a director and minority shareholder
of Dreams, Inc. Dreams, Inc., through its wholly owned subsidiary DFC, is the
franchisor to Pro-Stars. Each of the Partnerships has entered into a franchise
agreement with DFC to own and operate a Field of Dreams store pursuant to which
it pays DFC a percentage of gross revenues of each such Field of Dreams stores.

On December 30, 2004, Pro-Stars entered into an exclusive licensing
agreement with Dreams, Inc. and DFC to acquire exclusive worldwide licensing
rights to develop the Stars Live 365 Concept and to acquire exclusive rights to
develop new Field of Dreams stores in the City of Las Vegas, Nevada and a 100
mile radius surrounding Las Vegas. Pursuant to the terms of the exclusive
licensing agreement, Pro-Stars is obligated to pay DFC a percentage of gross
revenues of each Field of Dreams store and each Stars Live 365 Concept store.
Pursuant to the terms of the exclusive licensing agreement, Dreams, Inc. is
obligated to cause Pete Rose, with whom it has an exclusive arrangement, to make
appearances at Pro-Stars' stores. Sam D. Battistone, is an officer, director and
shareholder of Dreams Inc. Additionally, Dale E. Larsson, is a director and
minority shareholder of Dreams, Inc. DFC is a wholly owned subsidiary of Dreams,
Inc.

In connection with the exclusive licensing agreement with Dreams, Inc. and
DFC, Pro-Stars is obligated to pay The Green Organization, Mr. Rose's agent, for
the services of Pete Rose. For the year ended December 31, 2005, Pro-Stars paid
the Green Organization $733,207 in connection with Pete Rose's services.

Mounted Memories, a division of Dreams, Inc., is a major supplier of
sports memorabilia products that Pro-Stars sells in its stores. For the year
ended December 31, 2005, Pro-Stars incurred total inventory costs of $299,376 in
connection with inventory purchase for resale from Mounted Memories.

In October, 2005, Pro-Stars acquired 100% of the membership interests in
and to Stars Live 365, LLC, a Nevada limited liability company from Sam D.
Battistone. At the time of Pro-Stars' acquisition of the membership interests in
Stars Live 365, Mr. Battistone was serving as the chief executive officer and
chairman of the board of directors of Pro-Stars. In consideration for Mr.
Battistone's membership interests in Stars Live 365, Pro-Stars issued to Mr.
Battistone (a) a secured promissory note in the original principal amount of
$1,000,000 payable in 50 equal installments of $20,000; and (b) a secured
promissory note in the original principal amount of $500,000 payable in 40 equal
monthly installments of $12,500. A portion of these promissory notes was
assigned by Mr. Battistone to Mr. Joseph Casey, III. Upon the assignment to Mr.
Casey of a portion of each promissory note, Pro-Stars cancelled the original
promissory notes and issued new promissory notes to Mr. Battistone and Mr. Casey
as follows: (a) $136,000 and $480,000 to Mr. Casey; and (b) $460,000 and
$326,500 to Mr. Battistone. Each of the promissory notes is payable in equal
monthly installments without interest. The current balances under the promissory
notes issued to Mr. Casey are $120,000 and $440,000, respectively. The current
balances under the promissory notes issued to Mr. Battistone are $440,000 and
$318,000, respectively. Mr. Casey is currently serving as head of the Stars Live
365 division of Pro-Stars. These notes are secured by a pledge of the membership
interests that Pro-Stars acquired in the transaction.

In December, 2004, Pro-Stars purchased a 50% partnership interest in and
to CAEFOD, RIOFOD and SWFOD from FOD Las Vegas, LLC, a Nevada limited liability
company ("FODLV"). Sam D. Battistone was the managing-member of FODLV. In
consideration for the interests, Pro-Stars paid FODLV a cash payment of $335,000
and issued FODLV a secured promissory note in the amount of $665,000, of which
$165,000 was paid six months after the closing of the transaction with the
remaining outstanding balance financed over a period of 36 months at an interest
rate of 6% per annum. The note for the remaining $500,000 was assigned by FODLV
to Mr. Joseph Casey, III and, in connection therewith, Pro-Stars cancelled the
original note and reissued a new note directly to Mr. Casey. Subsequent to
Pro-Stars' acquisition of the partnership interests, Mr. Battistone was
appointed chief executive officer and chairman of the board of directors of
Pro-Stars. The promissory note issued to FODLV is secured by the partnership
interests in CAEFOD, RIOFOD and SWFOD Pro-Stars acquired from FODLV under a
pledge agreement.

FODLV, an entity wholly owned by Sam D. Battistone, rents office space to
Pro-Stars in Nevada pursuant to a lease dated October 24, 2003 with Park 2000.
The lease expires in November 2006.

In October 2004, Pro-Stars entered into a 10-year non-cancelable lease
agreement for 600 square feet of retail space in the Showcase Mall in Las Vegas.
The lease expires in October, 2014. The lease is guaranteed by Sam D.
Battistone, in the form of a standby letter of credit totaling $420,000. In
February 2006, Pro-Stars entered into a Lease Modification for the space at the
Showcase Mall which amendment called for the removal of 247 square feet from the
original lease agreement. The remaining space is being sublet to a small store
selling sports memorabilia provided by a nearby Field of Dreams store owned by
Pro-Stars. In connection with the lease modification, the letter of credit
requirement was reduced to $240,000.

In October 2005, Pro-Stars entered into an agreement to purchase all of
the remaining partnership interests of former partners and employees of CAEFOD
and RIOFOD. In conjunction with that transaction, Pro-Stars assumed a promissory
note from the sellers to Kim Casey, the wife of Joseph Casey, III, in the
principal amount of $41,641.43, which bears interest at a rate of 6% per annum.

On October 1, 2005, Pro-Stars entered into a three year employment
agreement with Sam D. Battistone to serve as its chief executive officer for
total compensation of $192,000 per annum. In addition, Mr. Battistone was
granted an option to purchase 1,000,000 shares of common stock of Pro-Stars, at
an exercise price of $1.00 per share. Assuming (i) the completion of the Merger;
(ii) gross proceeds from the Equity Financing of $15,000,000; (iii) completion
of the Reverse Split; and (iv) the automatic conversion of the Preferred Stock
into Applied's Common Stock, such option would be adjusted to become an option
to purchase 293,253 shares of common stock of Applied, at an exercise price of
$3.41 per share. The stock options vest at a rate of 50% of the shares on the
grant date, 25% of the shares on the first anniversary of the grant date and 25%
of the shares on the second anniversary of the grant date. The agreement may be
renewed for 12 month terms, unless terminated by either party, and provides for
severance payments for a total of 12 months in the vent of termination of
employment for reasons other than cause.

On January 1, 2005, Pro-Stars entered into employment agreements with Dale
E. Larsson, its chief financial officer, and Joseph Casey, III, president of the
Stars Live 365 division, for a period of three years. The agreements may be
renewed for additional 12 month terms by written agreement, unless terminated by
either party. The agreements provide for an annual base salary of $80,000 for
Mr. Larsson and an annual base salary of $84,000 for Mr. Casey. The agreements
provide for severance payments for a total of 12 months in the event of
termination of employment for any reason other than cause. In connection with
the employment agreement, Pro-Stars issued options to each of Messrs. Larsson
and Casey to purchase 500,000 shares of common stock of Pro-Stars, each at an
exercise price of $1.00. Assuming (i) the completion of the Merger; (ii) gross
proceeds from the Equity Financing of $15,000,000; (iii) completion of the
Reverse Split; and (iv) the automatic conversion of the Preferred Stock into
Applied's Common Stock, such options would be adjusted to become an option to
purchase 146,627 shares of common stock of Applied, each at an exercise price of
$3.41 per share. The stock options vest at a rate of 50% of the shares on the
grant date, 25% of the shares on the first anniversary of the grant date and 25%
of the shares on the second anniversary of the grant date.

On January 1, 2004, Pro-Stars entered into a consulting agreement with its
president, Sean Goodchild, to provide certain consulting and advisory services
to Pro-Stars on a project basis. Under the terms of the consulting agreement,
Mr. Goodchild received monthly payments of $5,000. The agreement expired on
December 31, 2004 and was replaced by a three year agreement on January 1, 2005
for total payment of $80,000 per annum exclusive of travel and out-of-pocket
expenses, which are reimbursed by Pro-Stars. Additionally, pursuant to the terms
of the consulting agreement, Pro-Stars issued a stock option to Mr. Goodchild to
purchase 500,000 shares of common stock of Pro-Stars, at an exercise price of
$1.00. Assuming (i) the completion of the Merger; (ii) gross proceeds from the
Equity Financing of $15,000,000; (iii) completion of the Reverse Split; and (iv)
the automatic conversion of the Preferred Stock into Applied's Common Stock,
such option would be adjusted to become an option to purchase 146,627 shares of
common stock of Applied, at an exercise price of $3.41 per share. The stock
option vests at a rate of 50% of the shares on the grant date, 25% of the shares
on the first anniversary of the grant date and 25% of the shares on the second
anniversary of the grant date. Mr. Goodchild is also eligible to participate in
any of Pro-Stars' bonus programs at the discretion of Pro-Stars' board of
directors. Mr. Goodchild is also paid a monthly sum of $600 to purchase a health
care benefit plan.

On January 1, 2004, Pro-Stars entered into a consulting agreement with
Klaus Moeller, one of its directors, to provide certain consulting and advisory
services on a project basis. Under the terms of the consulting agreement, Mr.
Moeller received monthly payments of $5,000. The agreement expired on December
31, 2004. On January 1, 2005, Pro-Stars extended the consulting agreement for a
period of three years for monthly payments of $3,000 per month plus travel and
out-of-pocket expenses. Either party may terminate the agreement upon 30 days
prior written notice to the other. Additionally, pursuant to the terms of the
consulting agreement, Pro-Stars issued a stock option to Mr. Moeller to purchase
500,000 shares of common stock of Pro-Stars, at an exercise price of $1.00.
Assuming (i) the completion of the Merger; (ii) gross proceeds from the Equity
Financing of $15,000,000; (iii) completion of the Reverse Split; and (iv) the
automatic conversion of the Preferred Stock into Applied's Common Stock, such
option would be adjusted to become an option to purchase 146,627 shares of
common stock of Applied, at an exercise price of $3.41 per share. The stock
option vests at a rate of 50% of the shares on the grant date, 25% of the shares
on the first anniversary of the grant date and 25% of the shares on the second
anniversary of the grant date. Mr. Moeller is also eligible to participate in
Pro-Stars' bonus program at the discretion of its board of directors.

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
Applied's directors and executive officers, and persons who beneficially own
more than 10% of a registered class of Applied' equity securities, to file
reports of beneficial ownership and changes in beneficial ownership of Applied's
securities with the SEC on Forms 3 (Initial Statement of Beneficial Ownership),
4 (Statement of Changes of Beneficial Ownership of Securities) and 5 (Annual
Statement of Beneficial Ownership of Securities). Directors, executive officers
and beneficial owners of more than 10% of Applied's common stock are required by
SEC regulations to furnish Applied with copies of all Section 16(a) forms that
they file. Except as otherwise set forth herein, based solely on review of the
copies of such forms furnished to Applied, or written representations that no
reports were required, Applied believes that for the fiscal year ended September
30, 2005 beneficial owners complied with the Section 16(a) filing requirements
applicable to them in that each officer, director and beneficial owner of 10% or
more of Applied's securities filed a Form 3 with the SEC and has had no change
of ownership since such filing.

SIGNATURE

In accordance with Section 13 or 15(d) of the Exchange Act, the Registrant
caused this Report to be signed on its behalf by the undersigned, thereunto duly
authorized.

APPLIED SPECTRUM TECHNOLOGIES, INC.
(Registrant)

By: /s/ Kevin R. Keating
---------------------------
Name: Kevin R. Keating
Title: President

Dated: June 14, 2006