UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended April 30, 2010
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
Commission File Number 000-52387
AMERICAN TELSTAR, INC.
(Exact Name of Registrant as Specified in its Charter)
Colorado 84-1052279
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification Number)
730 W. Randolph Street, Suite 600
Chicago, IL 60661
(Address of Principal Executive Offices) (Zip Code)
312-454-0015
(Registrant's telephone number including area code)
444 Park Forest Way, Wellington, FL 33414
(Former name, former address, and former fiscal year,
if changed since last report)
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 has submitted electronically and
posted on its corporate Web site, if any, every Interactive Data File required
to be submitted and posted pursuant to Rule 405 of Regulation S-T (ss.232.405 of
this chapter) during the preceding 12 months (or for such shorter period that
the registrant was required to submit and post such files).* *The registrant has
not yet been phased into the interactive data requirements. [ ] 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 definition of "large accelerated filer," "accelerated filer" and "smaller
reporting company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer [ ] Accelerated Filer [ ]
Non-accelerated filer [ ] 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
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS:
Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Sections 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distributions of securities under a plan
confirmed by a court. [ ] Yes [ ] No [X] N/A
APPLICABLE TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date. Class - Common Stock, 650,225
shares outstanding as of June 7, 2010.
AMERICAN TELSTAR, INC.
Index
Page
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PART I FINANCIAL INFORMATION
Item 1 Financial Statements (Unaudited) 3
Balance Sheets 3
Statements of Operations for the three months ended
April 30, 2010 and 2009 4
Statements of Operations for the nine months ended
April 30, 2010 and 2009, and for the period from date
of new development stage (March 25, 2005) to April 30, 2010 5
Statements of Cash Flows for the nine months ended
April 30, 2010 and 2009, and for the period from date
of new development stage (March 25, 2005) to April 30, 2010 6
Notes to Financial Statements 7
Item 2 Management's Discussion and Analysis of Financial Condition
and Results of Operations 9
Item 3 Quantitative and Qualitative Disclosures About Market Risk 10
Item 4T Controls and Procedures 10
PART II OTHER INFORMATION
Item 1 Legal Proceedings 11
Item 1A Risk Factors 11
Item 2 Unregistered Sales of Equity Securities and Use of Proceeds 11
Item 3 Defaults Upon Senior Securities 11
Item 4 Removed and Reserved 11
Item 5 Other Information 11
Item 6 Exhibits 11
SIGNATURES 12
2
American Telstar, Inc.
(A Development Stage Company)
BALANCE SHEETS
(Unaudited)
April 30, 2010 July 31, 2009
-------------- -------------
ASSETS
Current Assets:
Cash $ -- $ 5,253
--------- ---------
Total Assets $ -- $ 5,253
========= =========
LIABILITIES AND STOCKHOLDERS' (DEFICIT)
Current Liabilities:
Accounts payable, investment banking
services $ 25,000 $ 26,250
Accounts payable, related party -- 626
Accrued liabilities -- --
--------- ---------
Total Current Liabilities 25,000 26,876
Stockholders' (Deficit):
Preferred Stock, $0.10 par value
40,000,000 shares authorized,
None issued and outstanding -- --
Common Stock, $0.001 par value,
500,000,000 shares authorized
650,225 shares issued and outstanding 65 65
Additional paid-in capital 229,435 229,435
Accumulated (deficit) (163,000) (163,000)
Accumulated (deficit) during development stage (91,500) (88,123)
--------- ---------
Total Stockholders' (Deficit) (25,000) (21,623)
--------- ---------
Total Liabilities and Stockholders' (Deficit) $ -- $ 5,253
========= =========
The accompanying notes are an integral part of these financial statements.
3
American Telstar, Inc.
(A Development Stage Company)
STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended
-------------------------------------
April 30, 2010 April 30, 2009
-------------- --------------
Revenues $ -- $ --
---------- ----------
Operating Expenses:
Investment banking services 750 25,500
Professional fees 2,586 583
Other -- --
---------- ----------
Total Operating Expenses 3,336 26,083
---------- ----------
Other Income:
Forgiveness of debt 3,500 --
---------- ----------
Total Other Income 3,500 --
---------- ----------
Net Income (Loss) $ 164 $ (26,083)
---------- ----------
Per Share $ Nil $ (.04)
========== ==========
Weighted Average Number of Shares Outstanding 650,225 650,225
========== ==========
The accompanying notes are an integral part of these financial statements.
4
American Telstar, Inc.
(A Development Stage Company)
STATEMENTS OF OPERATIONS
(Unaudited)
For the Period
from March 25, 2005
(date of
Nine Months Ended development stage)
------------------------------------- through
April 30, 2010 April 30, 2009 April 30, 2010
-------------- -------------- --------------
Revenues $ -- $ -- $ --
---------- ---------- ----------
Operating Expenses:
Stock issued for reorganization services -- -- 6,500
Consulting fees, related party -- -- 30,000
Investment banking services 2,250 25,500 28,500
Professional fees 4,627 2,939 27,948
Other -- 57 2,052
---------- ---------- ----------
Total Operating Expenses 6,877 28,496 95,000
---------- ---------- ----------
Other Income:
Forgiveness of debt 3,500 -- 3,500
---------- ---------- ----------
Total Other Income 3,500 -- 3,500
---------- ---------- ----------
Net (Loss) $ (3,377) $ (28,496) $ (91,500)
---------- ---------- ----------
Per Share $ (.01) $ (.04) $ (.14)
========== ========== ==========
Weighted Average Number of Shares Outstanding 650,225 650,225 637,590
========== ========== ==========
The accompanying notes are an integral part of these financial statements.
5
American Telstar, Inc.
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
(Unaudited)
For the Period
from March 25, 2005
(date of
development stage)
Nine Months Ended Nine Months Ended through
April 30, 2010 April 30, 2009 April 30, 2010
-------------- -------------- --------------
Cash Flows from Operating Activities:
Net (loss) $ (3,377) $(28,496) $(91,500)
Adjustment to reconcile net (loss) to net cash
provided by operating activities:
Stock issued for reorganization expenses -- -- 6,500
Decrease in prepaid expense -- -- 30,000
Forgiveness of debt (3,500) -- (3,500)
Increase in accounts payable 1,624 23,396 28,500
-------- -------- --------
Net Cash (Used in) Operating Activities (5,253) (5,100) (30,000)
-------- -------- --------
Cash Flows from Investing Activities -- -- --
-------- -------- --------
Cash Flows from Financing Activities
Issuance of common stock -- -- 30,000
-------- -------- --------
Net Cash Provided by Financing Activities -- -- 30,000
Increase (decrease) in Cash (5,253) (5,100) --
Cash, Beginning of Period 5,253 13,321 --
-------- -------- --------
Cash, End of Period $ -- $ 8,221 $ --
======== ======== ========
Interest Paid $ -- $ -- $ --
======== ======== ========
Income Taxes Paid $ -- $ -- $ --
======== ======== ========
The accompanying notes are an integral part of these financial statements.
6
American Telstar, Inc.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
April 30, 2010 (Unaudited)
(1) Unaudited Financial Statements
The balance sheets as of April 30, 2010 and July 31, 2009, and the statements of
operations and the statements of cash flows for the three month and nine month
periods ended April 30, 2010 and 2009, and the period from March 25, 2005 (date
of development stage) through April 30, 2010, have been prepared by American
Telstar, Inc. (Company) without audit, pursuant to the rules and regulations of
the Securities and Exchange Commission ("SEC") as promulgated in Item 210 of
Regulation S-X. Certain information and footnote disclosures normally included
in the financial statements prepared in accordance with accounting principles
generally accepted in the United States of America ("US GAAP"), have been
condensed or omitted pursuant to such SEC rules and regulations, and the Company
believes that the disclosures are adequate to make the information presented not
misleading. In the opinion of management, all adjustments (which include only
normal recurring adjustments) necessary to present fairly the financial
position, results of operations and changes in financial position at April 30,
2010 and for all periods presented, have been made. The results for these
interim periods are not necessarily indicative of the results for the entire
year.
It is suggested that these statements be read in conjunction with the July 31,
2009 unaudited financial statements and the accompanying notes included in the
Company's Annual Report on Form 10-K, filed with the Securities and Exchange
Commission.
(2) Basis of Presentation - Going Concern
The accompanying financial statements have been prepared in conformity with
generally accepted accounting principles in the United States of America, which
contemplates continuation of the Company as a going concern. However, the
Company has negative working capital and stockholders' deficits and no active
business operations, which raises substantial doubt about its ability to
continue as a going concern.
In view of these matters, realization of certain of the assets in the
accompanying balance sheet is dependent upon continued operations of the
Company, which in turn is dependent upon the Company's ability to meet its
financial requirements, raise additional capital and the success of its future
operations.
Management has opted to resume the filing of Securities and Exchange Commission
(SEC) reporting documentation and then to seek a business combination.
Management believes that this plan provides an opportunity for the Company to
continue as a going concern.
(3) Common and Preferred Stock
The Company's Articles of Incorporation authorize the issuance of up to
500,000,000 shares of $0.0001 par value common stock and up to 40,000,000 shares
of $0.10 par value preferred stock. As of April 30, 2010, there were 650,225
shares of common stock issued and outstanding and there were no preferred shares
issued or outstanding. The terms and preferences of the authorized preferred
stock may be determined at the discretion of the Company's board of directors.
On May 23, 2005, the Company issued 70,000 shares of its common stock to its
President for reorganization services valued by the Board of Directors at
$6,500, resulting in a price per share of $.0928.
Also on May 23, 2005, the Company issued 328,750 shares of its common stock to
Pride Equities, Inc. (Pride), representing approximately 51% of its common stock
outstanding, in exchange for future services valued at $30,000 and a cash
contribution of $30,000, resulting in a price per share of $.1825. The services
7
provided by Pride consisted principally of services related to the Company's
reorganization. Determination of this price per share by the Board of Directors
was based on the fact that the shares issued to Pride were majority control
shares. This transaction resulted in a change in control of the Company.
Also on May 23, 2005, the Company effected a one for 200 reverse stock split.
All references in the accompanying financial statements to the number of common
shares and per share amounts have been retroactively adjusted to reflect the
reverse stock split.
(4) Subsequent Events
On May 26, 2010, Lisa Guise, (the "Purchaser"), entered into a Stock Purchase
Agreement (the "Purchase") with Pride Equities, Inc. and Charles Calello
(collectively "Seller") pursuant to which the Seller sold an aggregate of
493,750 shares of Common Stock of the Company, representing approximately 75.94%
of the total issued and outstanding shares of Common Stock of the Company, for a
total purchase price of $175,000 and attained voting control of the Company.
Subsequent to April 30, 2010, the Company settled its payable for investment
banking services for a total of $25,000, resulting in forgiveness of debt of
$3,500. The forgiveness of debt is reflected in other income.
8
ITEM 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
OVERVIEW
The following discussion updates our plan of operation for the next twelve
months. It also analyzes our financial condition at April 30, 2010 and compares
it to our financial condition at July 31, 2009. Finally, the discussion
summarizes the results of our operations for the three months and nine months
ended April 30, 2010. This discussion and analysis should be read in conjunction
with our unaudited financial statements for the year ended July 31, 2009,
including footnotes, and the discussion and analysis included in our Form 10-K.
PLAN OF OPERATION
American Telstar, Inc., (the "registrant" or "Company") was incorporated under
the laws of the state of Colorado on August 5, 1986. The registrant was
originally organized to engage in the music video business as well as a movie
production business. Since 1991, the Company has not engaged in any operations
and has been dormant. The Company may seek to acquire a controlling interest in
such entities in contemplation of later completing an acquisition. The Company
is not limited to any operation or geographic area in seeking out opportunities.
LIQUIDITY AND CAPITAL RESOURCES
As of April 30, 2010, we had a working capital deficit of $25,000, comprised of
current assets of $0 and current liabilities of $25,000. This represents a
decrease of $3,377 in working capital compared to the balance of ($21,623)
reported at July 31, 2009. During the nine months ended April 30, 2010, our
working capital declined as we invested our capital resources in our business.
RESULTS OF OPERATIONS - THREE MONTHS AND NINE MONTHS ENDED APRIL 30, 2010
COMPARED TO THE THREE MONTHS AND NINE MONTHS ENDED APRIL 30, 2009
We are considered a development stage company for accounting purposes, since we
are working to implement our plan of operations. We are unable to predict with
any degree of accuracy when this classification will change. We expect to incur
losses until such time, if ever, we emerge from the development stage.
The Company generated no revenues during the quarter ended April 30, 2010, and
management does not anticipate any revenues until following the conclusion of a
merger or acquisition, if any, as contemplated by the Company's business plan.
The Company has negative working capital. The Company anticipates operational
costs will be limited until such time as significant evaluation work is
undertaken regarding prospective mergers or acquisitions.
At April 30, 2010, the Company had no material commitments for capital
expenditures.
FORWARD-LOOKING STATEMENTS
This Form 10-Q contains or incorporates by reference "forward-looking
statements," as that term is used in federal securities laws, about our
financial condition, results of operations and business. These statements
include, among others:
- statements concerning the benefits that we expect will result from our
business activities and that we contemplate or have completed; and
- statements of our expectations, beliefs, future plans and strategies,
anticipated developments and other matters that are not historical
facts.
9
These statements may be made expressly in this document or may be incorporated
by reference to other documents that we will file with the SEC. You can find
many of these statements by looking for words such as "believes," "expects,"
"anticipates," "estimates" or similar expressions used in this report or
incorporated by reference in this report.
These forward-looking statements are subject to numerous assumptions, risks and
uncertainties that may cause our actual results to be materially different from
any future results expressed or implied in those statements. Because the
statements are subject to risks and uncertainties, actual results may differ
materially from those expressed or implied. We caution you not to put undue
reliance on these statements, which speak only as of the date of this report.
Further, the information contained in this document or incorporated herein by
reference is a statement of our present intention and is based on present facts
and assumptions, and may change at any time and without notice, based on changes
in such facts or assumptions.
ITEM 3 QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The important factors that could prevent us from achieving our stated goals and
objectives include, but are not limited to, those set forth in our annual report
on Form 10-K, other reports filed with the SEC and the following:
* The worldwide economic situation;
* Any change in interest rates or inflation;
* The willingness and ability of third parties to honor their
contractual commitments;
* Our ability to raise additional capital, as it may be affected by
current conditions in the stock market and competition for risk
capital; and
* Environmental and other regulations, as the same presently exist and
may hereafter be amended.
We undertake no responsibility or obligation to update publicly these
forward-looking statements, but may do so in the future in written or oral
statements. Investors should take note of any future statements made by or on
our behalf.
ITEM 4T CONTROLS AND PROCEDURES
(a) Disclosure Controls and Procedures. We maintain a system of controls and
procedures designed to ensure that information required to be disclosed by us in
reports that we file or submit under the Securities Exchange Act of 1934, as
amended, is recorded, processed, summarized and reported, within time periods
specified in the SEC's rules and forms and to ensure that information required
to be disclosed by us in the reports that we file or submit under the Securities
Exchange Act of 1934, as amended, is accumulated and communicated to our
management, including our Chief Executive Officer and Principal Financial
Officer, as appropriate to allow timely decisions regarding required disclosure.
As of April 30, 2010, under the supervision and with the participation of our
Principal Executive and Financial Officer, management has evaluated the
effectiveness of the design and operation of our disclosure controls and
procedures. Based on that evaluation, the Principal Executive and Financial
Officer concluded that our disclosure controls and procedures were effective.
(b) Changes in Internal Controls. There were no changes in our internal control
over financial reporting during the quarter ended April 30, 2010 that materially
affected, or is reasonably likely to materially affect, our internal controls
over financial reporting.
10
PART II
OTHER INFORMATION
ITEM 1 LEGAL PROCEEDINGS
None.
ITEM 1A RISK FACTORS
We are not aware of any market risk factors in addition to those disclosed in
our Form 10-K filed with the SEC.
ITEM 2 UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
None
ITEM 3 DEFAULTS UPON SENIOR SECURITIES
None
ITEM 4 REMOVED AND RESERVED
None
ITEM 5 OTHER INFORMATION
On May 26, 2010, Lisa Guise, (the "Purchaser"), entered into a Stock Purchase
Agreement (the "Purchase") with Pride Equities, Inc. and Charles Calello
(collectively "Seller") pursuant to which the Seller sold an aggregate of
493,750 shares of Common Stock of the Company, representing approximately 75.94%
of the total issued and outstanding shares of Common Stock of the Company, for a
total purchase price of $175,000 and attained voting control of the Company. On
May 27, 2010, the Company filed a Current Report on Form 8-K with the SEC
reporting the change in control.
Prior to the Purchase, our officers and directors were Charles Calello and Peter
Porath. On May 26, 2010, Mr. Calello and Mr. Porath resigned from all offices
held by them. Additionally, Charles Calello and Peter Porath tendered their
resignation as directors to be effective on the tenth day following the filing
of an Information Statement with the SEC and the mailing of this Information
Statement to our shareholders (the "Effective Date"). In connection with the
Purchase Transaction, Ms. Lisa Guise was appointed ("Incoming Director") as sole
director to take office as of the Effective Date. On May 27, 2010, the Company
filed an Information Statement on Schedule 14f-1 reporting the change in the
majority membership of the Board, and the change in directors occurred on the
Effective Date. The Incoming Director was appointed by written consent.
ITEM 6 EXHIBITS
Exhibits required by Item 601 of Regulation S-K:
Exhibit
Number Description of Exhibit
- ------ ----------------------
3.1 Articles of Incorporation (*)
3.2 Bylaws (*)
31 Certification of Principal Executive and Principal Financial Officer
filed pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32 Certification of Principal Executive and Principal Financial Officer
pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906
of the Sarbanes-Oxley Act of 2002.
- ----------
* Incorporated by reference herein from the Company's Registration Statement
on Form 10-SB filed on January 3, 2007 with the SEC.
11
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this quarterly report to be signed
on its behalf by the undersigned, thereunto duly authorized.
Date: June 7, 2010 AMERICAN TELSTAR, INC.
By: /s/ Lisa Guise
----------------------------------------
Lisa Guise
Principal Executive Officer
Principal Financial Officer and Director
12