UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the quarterly period ended: FEBRUARY 28, 2009
or
|_| TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the transition period from _________ to __________
Commission File Number: 000-53412
POP STARZ VENTURES 3, INC.
(Exact name of small business issuer as specified in its charter)
Delaware 26-3142811
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
150 E. Angeleno Ave.
#1426
Burbank, California 91502
(Address of principal executive offices)
305-407-9052
(Issuer's telephone number)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
[X] Yes |_| No
Indicate by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
the definitions of "large accelerated filer," "accelerated file" and "smaller
reporting company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer [ ] Accelerated filer [ ]
Non-accelerated filer [ ] Smaller reporting company [X]
(Do not check if a smaller reporting company)
Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act).
[X] Yes |_| No
As of April 9, 2009 there are 665,000 shares of the registrant's common stock
outstanding.
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Pop Starz Ventures 3, Inc.
(A Development Stage Company)
Balance Sheet
February 28, August 31,
2009 2008
----------- ---------
(unaudited) (audited)
ASSETS
Current Assets:
Cash .......................................... $ - $ 850
Prepaid expense ............................... - 500
------- -------
Total Assets ............................... $ - $ 1,350
======= =======
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Account payable ............................... $ - $ 1,250
Account payable-related party ................. 1,920 2,600
------- -------
Total Current Liabilities .................. 1,920 3,850
------- -------
Total Liabilities ................................ 1,920 3,850
------- -------
Stockholders' Equity
Common stock, $.001 par value 100,000,000
authorized 665,000 and 100,000 issued
and outstanding, respectively ............... 665 100
Additional Paid in Capital .................... 5,339 254
Deficit Accumulated in the Development Stage .. (7,924) (2,854)
------- -------
Total Stockholders' Equity ................. (1,920) (2,500)
------- -------
Total Liabilities and Stockholders' Equity . $ - $ 1,350
======= =======
See accompanying notes to financial statements
2
Pop Starz Ventures 3, Inc.
(A Development Stage Company)
Statements of Operations
Unaudited
From the Date
For the Three Months For the Six Months of Inception
Ended Ended August 7, 2008
February 28, February 28, to February 28,
2009 2008 2009 2008 2009
-------- -------- -------- -------- ---------------
General administrative expenses ....... $ 1,920 $ - $ 5,070 $ - $ 7,924
-------- -------- -------- -------- --------
Loss before provision for income tax .. (1,920) - (5,070) - (7,924)
-------- -------- -------- -------- --------
Income tax expense .................... - - - - -
-------- -------- -------- -------- --------
Net Loss .............................. $ (1,920) $ - $ (5,070) $ - $ (7,924)
======== ======== ======== ======== ========
Basic and Diluted Loss per Common Share $ - $ - $ (0.01) $ - $ (0.02)
======== ======== ======== ======== ========
Basic and Diluted Weighted Average
Common Shares Outstanding ........... 665,000 - 430,884 - 392,146
======== ======== ======== ======== ========
See accompanying notes to financial statements
3
Pop Starz Ventures 3, Inc.
(A Development Stage Company)
Statements of Changes in Stockholders' Equity
Deficit
Accumulated
in the Total
Common Stock Paid in Development Stockholders'
Shares Amount Capital Stage Equity
-------- ------ ------- ----------- -------------
Balance, August 7, 2008, date
of inception ............... - $ - $ - $ - $ -
Proceeds from Founders shares
issued at par value of $.001
on August 7, 2008 (audited) 100,000 100 254 - 354
Net Loss .................... - - - (2,854) (2,854)
-------- ------ ------- ---------- ------------
Balance, August 31, 2008 .... 100,000 100 254 (2,854) (2,500)
Issuance of common stock for
repayment of related-party
at $.01 on November 14, 2008 565,000 565 5,085 - 5,650
Net loss for the six months
ended February 28, 2009 .... - - - (5,070) (5,070)
-------- ------ ------- ---------- ------------
Balance, February 28, 2009
(unaudited) ................ 665,000 $ 665 $ 5,339 $ (7,924) $ (1,920)
======== ====== ======= ========== ============
See accompanying notes to financial statements
4
Pop Starz Ventures 3, Inc.
(A Development Stage Company)
Statements of Cash Flows
(Unaudited)
For the Six Months From the date
Ended of Inception
February 28, August 7, 2008
------------------ to February 28,
2009 2008 2009
------- ------- ---------------
OPERATING ACTIVITIES:
Net loss .................................... $(5,070) $ - $(7,924)
Adjustments to reconcile net loss to net cash
provided (used) by operating activities:
Prepaid expenses ......................... 500 - -
Accounts payable ......................... (1,250) - -
Accounts payable-related party ........... 4,970 - 7,570
------- ------- -------
Net Cash Used by Operating Activities ....... (850) - (354)
------- ------- -------
FINANCING ACTIVITIES:
Proceeds from issuance of common stock ...... - - 354
------- ------- -------
Net Cash Provided by Financing Activities ... - - 354
------- ------- -------
Net Increase in Cash ........................ (850) - -
------- ------- -------
Cash at Beginning of Period ................. 850 - -
------- ------- -------
Cash at End of Period ....................... $ - $ - $ -
======= ======= =======
Supplemental Disclosures:
Cash paid for income taxes .................. $ - $ - $ -
======= ======= =======
Cash paid for interest ...................... $ - $ - $ -
======= ======= =======
Non Cash Transactions:
Issuance of common stock for repayment of
Accounts payable related party ......... $ 5,650 $ - $ 5,650
======= ======= =======
See accompanying notes to financial statements
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POP STARZ VENTURES 3, INC.
A DEVELOPMENT STAGE COMPANY
NOTES TO FINANCIAL STATEMENTS
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, NATURE OF OPERATIONS AND USE
OF ESTIMATES:
NATURE OF BUSINESS AND BASIS OF PRESENTATION
Pop Starz Ventures 3, Inc. (a development stage company) ("the Company") was
incorporated in the State of Delaware on August 7, 2008 as a blank check
development stage company to acquire, through a merger, capital stock exchange,
asset or stock acquisition, exchangeable share transaction or other similar
business combination (each a "Business Combination") one or more domestic or
international operating businesses.
As of February 28, 2009, the Company had not yet commenced any operations. All
activity through February 28, 2009 relates to the Company's formation and fees
related to filings with the Securities and Exchange Commission.
The Company is considered to be a development stage company and as such the
financial statements presented herein are presented in accordance with Statement
of Financial Accounting Standards ("SFAS") No. 7. "Accounting and Reporting By
Development Stage Enterprises." The Company is subject to the risks associated
with activities of development stage companies.
The accompanying financial statements have been prepared in accordance with
accounting principles generally accepted in the United States of America and
pursuant to the rules and regulations of the Securities and Exchange Commission
("SEC").
USE OF ESTIMATES
The preparation of financial statements, in conformity with accounting
principals generally accepted in the United States of America requires
management to make estimates and assumptions, which affect the reported amounts
of assets and liabilities and disclosure of contingent assets and liabilities at
the date of the financial statements and the reported amounts of revenues and
expenses during the reporting period.
CASH AND CASH EQUIVALENTS:
Cash and cash equivalents are considered to be all highly liquid investments
purchased with an initial maturity of three (3) months or less.
INCOME TAXES:
The Company complies with the provisions of SFAS No. 109 "Accounting for Income
Taxes". Deferred income tax assets and liabilities are computed for differences
between the financial statement and tax bases of assets and liabilities that
will result in future taxable or deductible amounts and are based on enacted tax
laws and rates applicable to the periods in which the differences are expected
to affect taxable income. Valuation allowances are established, when necessary,
to reduce deferred income tax assets to the amount expected to be realized.
INCOME (LOSS) PER SHARE:
In accordance with SFAS No. 128, "Earnings Per Share", the basic net loss per
common share is computed by dividing net loss available to common stockholders
by the weighted average number of common shares outstanding. Diluted net loss
per common share is computed similar to basic net loss per common share except
that the denominator is increased to include the number of additional common
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POP STARZ VENTURES 3, INC.
A DEVELOPMENT STAGE COMPANY
NOTES TO FINANCIAL STATEMENTS
shares that would have been outstanding if the potential common shares had been
issued and if the additional common shares were dilutive. At February 28, 2009,
diluted net loss per share is equivalent to basic net loss per share as there
were no dilutive securities outstanding.
FAIR VALUE OF FINANCIAL INSTRUMENTS
Statement of Financial Accounting Standards No. 107, "Disclosures about Fair
Value of Financial Instruments," requires disclosures of information about the
fair value of certain financial instruments for which it is practicable to
estimate the value. For purpose of this disclosure, the fair value of a
financial instrument is the amount at which the instrument could be exchanged in
a current transaction between willing parties, other than in a forced sale or
liquidation. The carrying amount reported in the balance sheet for accrued
liabilities and amounts due to related parties approximate their fair market
value based on the short-term maturity of these instruments.
NOTE 2: RELATED PARTY TRANSACTIONS
On August 7, 2008, in connection with the formation of the Company, the founder
of the Company received 100,000 shares of common stock from the Company for an
aggregate of $354, or $.001 per share.
From the date of inception, August 7, 2008 through February 28, 2009, the Tucker
Family Spendthrift Trust ("TFST") loaned the Company $7,570.
On November 14, 2008, the TFST accepted 565,000 shares of common stock as
repayment of $5,650 of the advances made to the Company.
The Company has been provided office space, telephone and secretarial services
from our President, without charge.
NOTE 3: STOCKHOLDERS' EQUITY:
At February 28, 2009, the authorized capital of the Company consists of
100,000,000 shares of common stock with a par value of $.001. At February 28,
2009 and August 31, 2008, there are 665,000 and 100,000 shares of common stock
outstanding, respectively.
NOTE 4: GOING CONCERN
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. The Company does not have sufficient
working capital for its planned activity, which raises substantial doubt about
its ability to continue as a going concern.
Continuation of the company as a going concern is dependent upon obtaining
additional working capital and the management of the Company has developed a
strategy, which it believes will accomplish this objective through short-term
loans from its shareholders and additional equity investments, which will enable
the Company to continue operations for the coming year. There can be no
assurance that the Company's efforts will be successful. As a result, the
Company's independent registered public accountant has issued a going concern
opinion on the consolidated financial statements of the Company for the fiscal
year ended August 31, 2008 and also for the six month period ended February 28,
2009. The financial statements do not include any adjustments that might result
from the outcome of these uncertainties.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.
FORWARD LOOKING STATEMENT NOTICE
Certain statements made in this Quarterly Report on Form 10-Q are
"forward-looking statements" (within the meaning of the Private Securities
Litigation Reform Act of 1995) in regard to the plans and objectives of
management for future operations. Such statements involve known and unknown
risks, uncertainties and other factors that may cause actual results,
performance or achievements of Pop Starz Ventures 3, Inc. I ("we", "us", "our"
or the "Company") to be materially different from any future results,
performance or achievements expressed or implied by such forward-looking
statements. The forward-looking statements included herein are based on current
expectations that involve numerous risks and uncertainties. The Company's plans
and objectives are based, in part, on assumptions involving the continued
expansion of business. Assumptions relating to the foregoing involve judgments
with respect to, among other things, future economic, competitive and market
conditions and future business decisions, all of which are difficult or
impossible to predict accurately and many of which are beyond the control of the
Company. Although the Company believes its assumptions underlying the
forward-looking statements are reasonable, any of the assumptions could prove
inaccurate and, therefore, there can be no assurance the forward-looking
statements included in this Quarterly Report will prove to be accurate. In light
of the significant uncertainties inherent in the forward-looking statements
included herein, the inclusion of such information should not be regarded as a
representation by the Company or any other person that the objectives and plans
of the Company will be achieved.
Pop Starz Ventures 3, Inc. was incorporated on August 7, 2008 under the laws of
the State of Delaware to engage in any lawful corporate undertaking, including,
but not limited to, selected mergers and acquisitions. We have been in the
developmental stage since inception and have no operations to date other than
issuing shares to our original shareholders and other expenses related to the
our filing of our Form 10 on September 12, 2008 and our subsequent filings with
the Securities and Exchange Commission.
The Company has not had any operating income from inception, August 7, 2008 to
date. For the three months ended February 28, 2009, the registrant recognized a
net loss of $1,920. Expenses from inception were comprised of costs mainly
associated with legal, accounting and filing fees. From the date of inception to
February 28, 2009 the Company recognized a loss of $7,924.
The Company's current business objective is to locate suitable business
combination opportunities. The Company does not currently engage in any business
activities that provide cash flow. As of February 28, 2009, we do not have any
cash or cash equivalents. We will fund the costs of investigating and analyzing
a suitable business combination through related party advances for the next 12
months. If our efforts are unsuccessful within that period, we will have to seek
additional funds.
During the next 12 months we anticipate incurring costs related to:
(i) Filing of Exchange Act reports;
(ii) Officer and director's salaries and rent; and
(iii) Consummating an acquisition.
8
We believe we will be able to meet these costs through amounts, as necessary, to
be loaned by or invested in us by our stockholders, management or other
investors. However, no assurance can be given that we will be able to raise
additional capital, when needed or at all, or that such capital, if available,
will be on acceptable terms. In the absence of obtaining additional financing,
the Company may be unable to fund its operations. Accordingly, the Company's
financial condition could require that the Company seek the protection of
applicable reorganization laws in order to avoid or delay actions by third
parties, which could materially adversely affect, interrupt or cause the
cessation of the Company's operations. As a result, the Company's independent
registered public accounting firm has issued a going concern opinion on the
consolidated financial statements of the Company for the fiscal year ended May
31, 2008.
Prior to consummating a business combination transaction, we do not anticipate:
(i) Any expenditures for research and development;
(ii) Any expenditures or cash receipts for the purchase or sale of
any property plant or equipment; or
(iii) Any significant change in the number of employees.
LIQUIDITY AND CAPITAL RESOURCES
At February 28, 2009, the Company had no capital resources and has relied upon
the issuance of common stock and additional capital contributions from
shareholders to fund administrative expenses pending acquisition of an operating
company. While the Company believes that it will succeed in attracting
additional capital and generate capital from operations, there can be no
assurance that the Company's efforts will be successful. The Company's continued
existence is dependent upon its ability to locate an operating company with
which to merge. The financial statements do not include any adjustments that
might result from the outcome of these uncertainties.
Management anticipates seeking out a target company through solicitation. Such
solicitation may include newspaper or magazine advertisements, mailings and
other distributions to law firms, accounting firms, investment bankers,
financial advisors and similar persons, the use of one or more World Wide Web
sites and similar methods. No estimate can be made as to the number of persons
who will be contacted or solicited. Management may engage in such solicitation
directly or may employ one or more other entities to conduct or assist in such
solicitation. Management and its affiliates will pay referral fees to
consultants and others who refer target businesses for mergers into public
companies in which management and its affiliates have an interest. Payments are
made if a business combination occurs, and may consist of cash or a portion of
the stock in the Company retained by management and its affiliates, or both.
OFF-BALANCE SHEET ARRANGEMENTS
The Company does not have any off-balance sheet arrangements that have or are
reasonably likely to have a current or future effect on the Company's financial
condition, changes in financial condition, revenues or expenses, results of
operations, liquidity, capital expenditures or capital resources that is
material to investors.
CONTRACTUAL OBLIGATIONS
As a "smaller reporting company" as defined by Item 10 of Regulation S-K, the
Company is not required to provide this information.
9
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
Our business is not currently subject to market risk. All of our business is
currently conducted in US dollars, which is our functional currency. We have no
interest bearing debt and are not subject to any interest rate risk.
ITEM 4. CONTROLS AND PROCEDURES.
EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES
We maintain disclosure controls and procedures (as defined in Rules 13a-15(e)
and 15d-15(e) under the Securities Exchange Act of 1934, as amended, (the
"Exchange Act")) that are designed: (i) to ensure that information required to
be disclosed in the reports that we file or submit under the Exchange Act is
recorded, processed, summarized and reported within the time periods specified
in the SEC's rules and forms and (ii) to ensure that such information is
communicated to the management, including our Principal Executive and Financial
Officer, as appropriate, to allow timely decisions regarding required
disclosure. Our management, with the participation of our Principal Executive
and Financial Officer, evaluated the effectiveness of our disclosure controls
and procedures as of the end of the period covered by this report, and based on
that evaluation, our Principal Executive and Financial Officer has concluded
that our disclosure controls and procedures (as defined in Rules 13a-15(e) and
15d-15(e)) are effective.
CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING
There were no changes in our internal control over financial reporting that
occurred during our most recent fiscal quarter 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.
None.
ITEM 1A. RISK FACTORS.
There have been no material changes to the risk factors previously disclosed
under item 1 of the Company's Registration Statement on Form 10 as filed with
the United States Securities and Exchange Commission on September 12, 2008.
ITEM 2. SALE OF UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
On August 7, 2008, in connection with the formation of the Company, the founder
of the Company received 100,000 shares of common stock from the Company for an
aggregate of $354, or $.001 per share.
On November 14, 2008, the Company issued 565,000 shares of common stock to the
Tucker Family Spendthrift Trust at $.01 as repayment for $5,650 in advances made
to the Company outstanding through that date.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
None.
10
ITEM 4. SUBMISSIONS OF MATTERS TO A VOTE OF SECURITY HOLDERS.
None.
ITEM 5. OTHER INFORMATION.
None.
ITEM 6. EXHIBITS.
Exhibit
No. Title of Document
- -------- ----------------------------------------------------------
3.1 Certificate of Incorporation (1)
31 Certification of the Chief Executive & Financial Officer pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002. (2)
32 Certification of the Chief Executive Officer pursuant to Section 906
of the Sarbanes-Oxley Act of 2002.(2)
_________
(1) Incorporated by reference to the Registrant's filing of Form 10 as filed
with the Securities and Exchange Commission on September 12, 2008
(2) Filed herewith
SIGNATURE
In accordance with the requirements of the Securities Exchange Act of
1934, the Registrant has caused this report to be signed on its behalf by the
undersigned, duly authorized.
April 13, 2009 /s/ Michelle Tucker
- --------------------------------------------------------------------------
Michelle Tucker, Chief Executive and Financial Officer
11