UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
CITYPLACEWASHINGTON, STATED.C. POSTALCODE20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 for the quarterly period ended September 30, 2010
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 for the transition period from to
Commission file number 000-15303
HST GLOBAL, INC.
(Exact name of registrant as specified in its charter)
Nevada 73-1215433
(State or other jurisdiction of (I. R. S. Employer Identification No.)
incorporation or organization)
150 Research Drive, Hampton, VA 23666
(Address of principal executive offices) (Zip Code)
Issuer's telephone number 757-766-6100
n/a
(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. Yes [x] No [ ]
Indicate by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
the definitions of "large accelerated filer," "accelerated filer" and "smaller
reporting company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer [ ] Accelerated filer [ ]
Non-accelerated filer [ ] 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). Yes [ ] No [x]
The number of shares of the registrant's common stock outstanding as of
September 30, 2010 was 28,719,854 shares.
TABLE OF CONTENTS
-----------------
PART I - FINANCIAL INFORMATION 3
Item 1. Financial Statements 3
Condensed Consolidated Balance Sheets 3
Condensed Consolidated Statements of Operations and Comprehensive
Income 4
Condensed Consolidated Statements of Cash Flows 5
Notes to Condensed Consolidated Financial Statements 6
Item 2. Management's Discussion & Analysis of Financial Condition
and Results of operations 12
Item 3. Quantitative and Qualitative Disclosures about Market Risk 13
Item 4. Controls and Procedures 13
PART II - OTHER INFORMATION 14
Item 1. Legal Proceedings 14
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 14
Item 3. Defaults Upon Senior Securities 14
Item 4. (Removed and Reserved) 14
Item 5. Other Information 14
Item 6. Exhibit 14
Signatures 15
Page 2
HST GLOBAL INC. AND SUBSIDIARIES
(a Development Stage Company)
CONDENSED CONSOLIDATED BALANCE SHEETS
September 30, December 31,
2010 2009
(Unaudited) (Audited)
--------------- --------------
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ (11,679) $ 5,358
Property, plant and equipment, net of
accumulated depreciation 732 1,461
--------------- --------------
TOTAL ASSETS $ (10,947) $ 6,819
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable and accrued expenses $ 117,293 $ 111,623
Accounts payable and accrued expenses
- related parties $ 533,138 $ 476,778
Deposits - Shareholder 200,000 200,000
Advances from Shareholder 526,492 246,556
Note payable - related party 300,000 300,000
--------------- --------------
Total Current Liabilities $ 1,676,923 $ 1,334,957
STOCKHOLDERS' EQUITY (DEFICIENCY):
Preferred stock; 5,000,000 shares authorized;
$.001 par value; 1,000,000 shares issued
and none outstanding - -
Capital stock, $.001 par value; 100,000,000
shares authorized; 28,719,854 shares issued
and outstanding at September 30, 2010;
25,234,139 shares issued and outstanding
at December 31, 2009 28,720 25,235
Additional paid-in capital 1,951,952 1,624,437
Deficit accumulated during the development
stage (3,668,542) (2,977,810)
--------------- --------------
Total Stockholders' Equity (Deficiency) $ (1,687,870) $ (1,328,138)
--------------- --------------
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY/(DEFICIT) $ (10,947) $ 6,819
=============== ==============
The Accompanying Notes are an Integral Part of these Financial Statement
Page 3
HST GLOBAL, INC. AND SUBSIDIARIES
(a Development Stage Company)
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2010 AND 2009AND
FOR THE PERIOD FROM THE DATE OF INCEPTION (AUGUST 6, 2007) TO SEPTEMBER 30, 2010
(Unaudited)
Three Months Three Months Nine Months Nine Months From Date of
Ended Ended Ended Ended Inception (8/6/07)
September 30, September 30, September 30, September 30, to September 30,
2010 2009 2010 2009 2010
--------------- --------------- --------------- --------------- -------------------
REVENUES $ - $ - $ - $ - $ -
Cost Of Sales - - - - -
--------------- --------------- --------------- --------------- -------------------
Gross Profit - - - - -
OPERATING EXPENSES:
Salaries - 20,308 - 38,308 176,031
Consulting 70,000 155,640 349,052 577,621 1,942,000
General and administrative expenses 85,582 141,064 328,173 381,939 1,451,374
--------------- --------------- --------------- --------------- -------------------
Total Operating Expenses 155,582 317,012 677,225 997,868 3,569,405
--------------- --------------- --------------- --------------- -------------------
NET (LOSS) FROM OPERATIONS (155,582) (317,012) (677,225) (997,868) (3,569,405)
OTHER EXPENSES:
Interest expense - - 13,507 - 60,009
--------------- --------------- --------------- --------------- -------------------
Total Other Expenses - - 13,507 - 60,009
--------------- --------------- --------------- --------------- -------------------
NET (LOSS) $ (155,582) $ (317,012) $ (690,732) $ (997,868) $ (3,629,414)
=============== =============== =============== =============== ===================
NET INCOME (LOSS) PER SHARE:
BASIC AND DILUTED - COMMON $ (0.01) $ (0.01) $ (0.02) $ (0.04)
=============== =============== =============== ===============
WEIGHTED AVERAGE SHARES OUTSTANDING:
BASIC AND DILUTED - COMMON 28,719,854 25,234,053 28,603,187 25,073,831
=============== =============== =============== ===============
<FN>
The Accompanying Notes are an Integral Part of these Financial Statements
Page 4
HST GLOBAL, INC. AND SUBSIDIARIES
(a Development Stage Company)
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2010 AND 2009 AND
THE PERIOD FROM THE DATE OF INCEPTION (AUGUST 6, 2007) TO SEPTEMBER 30, 2010
(unaudited)
Nine Months Nine Months From Date of Inception
Ended Ended (August 6, 2007) to
September 30, September 30, September 30,
2010 2009 2010
--------------- --------------- ------------------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ (690,732) $ (997,868) $ (3,629,414)
Adjustments to reconcile net loss to
net cash used in operating activities:
Depreciation and amortization 729 729 2,185
Common stock issued for services 108,000 7,890 258,390
Changes in operations-assets and
liabilities net of acquisitions:
Accounts payable and accrued expenses 285,030 377,989 873,431
Note payable - related parties - - 100,000
--------------- --------------- ------------------------
Net Cash used in Operating Activities (296,973) (611,259) (2,395,408)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of equipment - - (2,917)
--------------- --------------- ------------------------
Net Cash used in Investing Activities - - (2,917)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from sale of common stock - 176,250 1,226,750
Deposits from shareholders - 200,000 450,000
Proceeds from notes payable
- related parties - - 200,000
Advances from shareholders 279,936 232,600 526,492
Effect of merger adjustment - - (16,596)
Proceeds from loans - - -
--------------- --------------- ------------------------
Net cash provided by financing activities 279,936 608,850 2,386,646
--------------- --------------- ------------------------
Net Increase (decrease) in cash (17,037) (2,409) (11,679)
CASH AT BEGINNING PERIOD 5,358 776 -
--------------- --------------- ------------------------
CASH AT END OF PERIOD $ (11,679) $ (1,633) $ (11,679)
=============== =============== ========================
Cash paid for interest $ - $ -
=============== ===============
Cash paid for taxes $ - $ -
=============== ===============
Common stock issued for services $ 108,000 $ - $ 108,000
Common stock issued for accrued services $ 223,000 $ - $ 223,000
<FN>
The Accompanying Notes are an Integral Part of these Financial Statements
Page 5
HST GLOBAL, INC. AND SUBSIDIARIES
(FORMERLY HEALTH SOURCE TECHNOLOGIES, INC.)
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2010
(UNAUDITED)
NOTE 1 - BASIS OF PRESENTATION
The consolidated financial statements of HST Global, Inc. and subsidiaries (the
"Company") have been prepared in accordance with generally accepted accounting
principles for financial information and pursuant to the requirements for
reporting on Form 10-Q. Accordingly they do not include all the information and
footnotes required by accounting principles generally accepted in the United
States of American for complete financial statements. However, such information
reflects all adjustments (consisting of normal recurring adjustments), which
are, in the opinion of management, necessary for the fair presentation of the
consolidated financial position and the consolidated results of operations.
Results shown for interim periods are not necessarily indicative of the results
to be obtained for a full year. The consolidated balance sheet information as of
September 30, 2010 was derived from the audited consolidated financial
statements included in the Company's Annual Report on Form 10-KSB for the year
ended December 31, 2009. These annual financial statements should be read in
conjunction with that report.
The consolidated financial statements include the accounts of the Company and
Health Source Technologies, Inc (a wholly owned subsidiary).
NOTE 2 - NATURE AND PURPOSE OF BUSINESS
HST Global, Inc. (the Company) was incorporated under the laws of the state of
Nevada on August 6, 2007. The company is currently headquartered in Hampton,
Virginia. HST Global, Inc. is an Integrated Health and Wellness company that is
developing and / or acquiring a network of Wellness Centers worldwide that are
primarily focused on the immunotherapy and alternative treatment of late stage
cancer. In addition, the company intends to acquire innovative products for the
treatment of late stage cancer. In this regard, the company primarily focuses on
homeopathic and alternative product candidates that are undergoing or have
already completed significant clinical testing for the treatment of late stage
cancer.
The company has identified the growing acceptance of alternative cancer
treatments worldwide which has placed us in a perfect position to open our own
brand of Cancer Treatment Centers. This strategy will enable the company to
address the challenges individuals face in the treatment of cancer in the later
stages.
NOTE 3 - NATURE OF SIGNIFICANT ACCOUNTING POLICIES
CASH AND CASH EQUIVALENTS
The company considers all highly liquid debt instruments purchased with maturity
of three months or less to be cash equivalents.
REVENUE RECOGNITION
The company considers revenue to be recognized at the time the service is
performed.
Page 6
USE OF ESTIMATES
The preparation of the Company's financial statements required management to
make estimates and assumptions that affect the amounts reported in the financial
statements and accompanying notes. Actual results could differ from these
estimates.
FAIR VALUE OF FINANCIAL INSTRUMENTS
The Company's short-term financial instruments consist of cash and cash
equivalents and accounts payable. The carrying amounts of these financial
instruments approximate fair value because of their short-term maturities.
Financial instruments that potentially subject the Company to a concentration of
credit risk consist principally of cash. During the year the Company did not
maintain cash deposits at financial institution in excess of the $250,000 limit
covered by the Federal Deposit Insurance Corporation. The Company does not hold
or issue financial instruments for trading purposes nor does it hold or issue
interest rate or leverage derivative financial instruments.
EARNINGS PER SHARE
Basic Earnings per Share ("EPS") is computed by dividing net income available to
common stockholders by the weighted average number of common stock shares
outstanding during the year. Diluted EPS is computed by dividing net income
available to common stockholders by the weighted-average number of common stock
shares outstanding during the year plus potential dilutive instruments such as
stock options and warrants. The effect of stock options on diluted EPS is
determined through the application of the treasury exercises that are
hypothetically used to repurchase the Company's common stock at the average
market price during the period. Loss per share is unchanged on a diluted basis
since the assumed exercise of common stock equivalents would have an
anti-dilutive effect.
INCOME TAXES
The Company uses the asset and liability method of accounting for income taxes.
This method requires the recognition of deferred tax assets and liabilities for
the expected future tax consequences of temporary differences between the
carrying amounts and the tax basis of certain assets and liabilities. Deferred
income tax assets and liabilities are computed annually for the difference
between the financial statement and tax bases of assets and liabilities that
will result in taxable or deductible amounts in the future, 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 tax assets to the amount expected to be realized. Income tax
expense is the tax payable or refundable for the period, plus or minus the
change during the period in deferred tax assets and liabilities. Deferred
income taxes may arise from temporary differences resulting from income and
expense items reported for financial accounting and tax purposes in different
periods. Deferred taxes are classified as current or non-current, depending on
the classification of the assets and liabilities to which they relate. Deferred
taxes arising from temporary differences that are not related to an asset or
liability are classified as current or non-current depending on the periods in
which the temporary differences are expected to reverse. The Company had no
significant deferred tax items arise during any of the period presented.
CONCENTRATION OF CREDIT RISK
The Company does not have any concentration of related financial credit risk.
Page 7
RECENT ACCOUNTING PRONOUNCEMENTS
The Company does not expect that the adoption of other recent accounting
pronouncements will have a material impact to its financial statements.
NOTE 4 - REVERSE MERGER, ACQUISITION AND BUSINESS DISPOSAL
On May 9, 2008, the Company entered into a merger and share exchange agreement
with NT Holding Corp. NT Holding Corp was incorporated on April 11, 1984 under
the laws of the State of Delaware. NT Holding Corp since its inception has been
involved in various business operations including mining and the development of
mineral properties. At the time of the merger and share exchange agreement, NT
Holding had disposed of its operation assets and previous operations and was
considered a development stage company.
This business acquisition has been accounted for as a reverse merger
(recapitalization) with Health Source Technologies, Inc. deemed to be the
accounting acquirer and NT Holding Corp deemed to be the legal acquirer.
Accordingly, the historical financial information statements presented herein
are those of Health Source Technologies, Inc. The accumulated deficit of the
accounting acquirer has been carried forward after the acquisition as well as
its assets and liabilities. Operations prior to the business combination are
those of the acquirer. In conjunction with this business combination, the Board
of Directors approved a 25 for 1 reverse split of the Company's common stock.
The stock splits have been applied retroactively in the financial statements as
if the split had occurred at the inception of the company.
NOTE 5 - STOCKHOLDERS EQUITY
The Company completed a business combination with Health Source Technologies
Inc. on May 9, 2008 (see Note 4). In conjunction with this acquisition the Board
of Directors approved a 25 for 1 reverse split of the Company's common stock.
Prior to the acquisition the Company had 30,039,203 shares of common stock
outstanding. The issuance of the 66,000,000 new shares of common stock to
facilitate the business combination gave the company a total of 96,039,203
shares outstanding immediately before the stock split. After the stock split
there were 4,041,568 shares outstanding. In addition, the post-acquisition
equity structure was to reflect a 95% ownership by the shareholders of Health
Source Technologies, Inc. In order to facilitate this structure, an additional
99,744,800 pre-split shares were issued and delivered to HST shareholders once
sufficient authorized capital was available. On December 31, 2008, 3,989,792
post split shares were issued. On December 31, 2008, 3,989,792 post split shares
were issued to Ron Howell, an officer and shareholder of the Company and Eric
Clemons, a shareholder of the Company to complete the terms of the acquisition
agreement. These shares have been retroactively reported in the financial
statements as being issued in conjunction with the acquisition that occurred on
May 5, 2008.
As part of the consideration for this business combination there were also
1,000,000 shares of preferred stock issued which where convertible into 16.2
(post split) shares of the company's common stock. These preferred shares were
converted into 16,200,000 shares of common stock.
The Company has received $1,049,000 from various persons and companies as
deposits that were being held by the company in the anticipation of fulfilling a
common stock subscription agreement. On August 20, 2008 the Company issued
839,200 shares of its common stock at a purchase price of $1.25 per share. Also,
on August 20, 2008 the company issued 15,000 shares of common stock in exchange
for legal services rendered to the company. The shares were valued at $9.50 per
share which was the trading price of the shares on the date the shares were
issued.
Page 8
On October 28, 2008, the company received $250,000 from an investor for working
capital. This transaction was initially reported as a deposit from shareholder.
On June 9, 2009 the Company issued 200,000 shares at a price of $1.25 per share.
This issuance was completed in accordance with Section 4(2) of the Securities
Act in an offering without any public offering or distribution. These shares are
restricted securities and include an appropriate restrictive legend.
On February 20, 2009, the company received $75,000 from an investor for working
capital. This investor was issued 60,000 shares, at a price of $1.25 per share.
This issuance was completed in accordance with Section 4(2) of the Securities
Act in an offering without any public offering or distribution. These shares are
restricted securities and include an appropriate restrictive legend.
On March 16, 2009, the company received $25,000 from an investor for working
capital. This investor was issued 20,000 shares, at a price of $1.25 per share.
This issuance was completed in accordance with Section 4(2) of the Securities
Act in an offering without any public offering or distribution. These shares are
restricted securities and include an appropriate restrictive legend.
On June 9, 2009, the company received $50,000 from an investor for working
capital. This investor was issued 40,000 shares, at a price of $1.25 per share.
This issuance was completed in accordance with Section 4(2) of the Securities
Act in an offering without any public offering or distribution. These shares are
restricted securities and include an appropriate restrictive legend.
On June 9, 2009, the company received $26,250 from an investor for working
capital. This investor was issued 21,000 shares, at a price of $1.25 per share.
This issuance was completed in accordance with Section 4(2) of the Securities
Act in an offering without any public offering or distribution. These shares are
restricted securities and include an appropriate restrictive legend.
On June 10, 2009 the company issued 5,000 shares of common stock in exchange for
services rendered to the company. The shares were valued at $1.27 per share
which was the trading price of the shares on the date the shares were issued.
On July 15, 2009 the company issued 2,000 shares of common stock in exchange for
services rendered to the company. The shares were valued at $.82 per share which
was the trading price of the shares on the date the shares were issued.
On January 20, 2010 the company issued 1,714,286 shares of restricted common
stock to Ron Howell as payment for consulting services performed during 2009.
The shares were valued at $.07 per share. This issuance was completed in
accordance with Section 4(2) of the Securities Act in an offering without any
public offering or distribution. These shares are restricted securities and
include an appropriate restrictive legend.
On January 20, 2010 the company issued 1,471,429 shares of restricted common
stock to Eric Clemons as payment for consulting services performed during 2009.
The shares were valued at $.07 per share. This issuance was completed in
accordance with Section 4(2) of the Securities Act in an offering without any
public offering or distribution. These shares are restricted securities and
include an appropriate restrictive legend.
On April 23, 2010 the company issued 150,000 shares of common stock in exchange
for legal services rendered to the company. The shares were valued at $.35 per
share.
Page 9
On May 20, 2010 the company issued 150,000 shares of common stock in exchange
for legal services rendered to the company. The shares were valued at $.35 per
share.
NOTE 6 - ACCOUNTS PAYABLE AND ACCRUED EXPENSES - RELATED PARTIES
Accounts payable and accrued expenses consist of the following:
The Health Network, Inc. $233,994
Ronald Howell $132,416
Eric Clemons $166,728
--------
$533,138
Please see Notes 8 and 9 for further explanation of these liabilities.
NOTE 7 - SHAREHOLDER DEPOSITS
During July and August of 2009, the company received a total of $200,000 from an
investor as a deposit for the purchase of common stock. This transaction has
been reported as shareholder deposits on the company's financial statements.
NOTE 8 - NOTES PAYABLE - RELATED PARTIES
In connection with the reverse acquisition described in note 3 to the financial
statements, the Company agreed to pay the former shareholders of the target
company the sum of $100,000. This note does carry an interest amount and is
repayable upon demand by the holder of the note.
On November 25, 2009, the Company entered into an agreement with a shareholder
of the Company. Under terms of this agreement, the Company received $200,000
from this individual in exchange for the issuance of a promissory note in the
principal amount of $200,000 and 200,000 shares of the Company's common stock.
Under the terms of the promissory note, the Company is obligated to repay the
principal amount of the note together with $20,000 interest on or before March
15, 2010. The company is currently in default and in renegotiations regarding
the note.
As of June 30, 2010, the Company had not issued the shares of common stock. The
Company has accrued interest in the amount of $46,000 owed under the terms of
this agreement. The Company recorded interest in the amount of $26,000 which
represents the 200,000 shares of common stock valued at $.13 per share which was
the trading price of the Company's common stock on the date the agreement was
executed by the Company. The Company has also accrued an additional $20,000 as
interest owed at March 31, 2010 based upon the terms of the promissory note.
NOTE 9 - ADVANCES FROM SHAREHOLDER
Since the Company's inception, Mr. Howell has advanced $388,200 to the Company
to assist with working capital needs. These advances accrue interest at a rate
of six percent (6%) per annum of the unpaid balance. At September 30, 2010, the
Company owes Mr. Howell the amount of $395,478 which includes accrued interest
in the amount of $7,278.
Since the Company's inception, Mr. Clemons has advanced $124,336 to the Company
to assist with working capital needs. These advances accrue interest at a rate
of six percent (6%) per annum of the unpaid balance. At September 30, 2010, the
Company owes Mr. Clemons the amount of $131,014 which includes accrued interest
in the amount of $6,678.
Page 10
NOTE 10 - FINANCIAL CONDITION AND GOING CONCERN
The Company's financial statements have been presented on the basis that it will
continue as a going concern, which contemplates the realization of assets and
the satisfaction of liabilities in the normal course of business. The Company
incurred a net loss from continuing operations of $690,732 for the nine months
ended September 30, 2010 and has an accumulated deficit of $3,668,542 at
September 30, 2010. These factors raise substantial doubt as to its ability to
obtain debt and/or equity financing and achieve profitable operations.
There are no assurances that HST Global, Inc. will be able to either (1) achieve
a level of revenues adequate to generate sufficient cash flow from operations;
or (2) obtain additional financing through either private placement, public
offerings and/or bank financing necessary to support its working capital
requirements. To the extent that funds generated from operations and any private
placements, public offerings and/or bank financing are insufficient, the Company
will have to raise additional working capital. No assurance can be given that
additional financing will be available, or if available, will be on terms
acceptable to HST Global, Inc. If adequate working capital is not available HST
Global, Inc. may be required to curtail its operations.
NOTE 11 - SUBSEQUENT EVENTS
Management has evaluated subsequent events through November 15, 2010 which is
the date that the financial statements were issued.
Page 11
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The following discussion should be read in conjunction with the information
contained in the condensed consolidated financial statements of the Company and
the notes thereto appearing elsewhere herein and in conjunction with the
Management's Discussion and Analysis set forth in (1) the Company's Annual
Report on Form 10-K for the year ended December 31, 2009, as amended (which is
incorporated herein by this reference). As used in this report, the terms
"Company", "we", "our", "us" and "HSTC" refer to HST Global, Inc.
PRELIMINARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This quarterly report contains forward-looking statements within the meaning of
the federal securities laws. These include statements about our expectations,
beliefs, intentions or strategies for the future, which we indicate by words or
phrases such as "anticipate," "expect," "intend," "plan," "will," "we believe,"
"HSTC believes," "management believes" and similar language. The forward-looking
statements are based on the current expectations of HSTC and are subject to
certain risks, uncertainties and assumptions, including those set forth in the
discussion under "Management's Discussion and Analysis of Financial Condition
and Results of Operations" in this report. The actual results may differ
materially from results anticipated in these forward-looking statements. We base
the forward-looking statements on information currently available to us, and we
assume no obligation to update them.
Investors are also advised to refer to the information in our filings with the
Securities and Exchange Commission, especially on Forms 10-K, 10-Q and 8-K, in
which we discuss in more detail various important factors that could cause
actual results to differ from expected or historic results. It is not possible
to foresee or identify all such factors. As such, investors should not consider
any list of such factors to be an exhaustive statement of all risks and
uncertainties or potentially inaccurate assumptions.
CRITICAL ACCOUNTING POLICIES AND ESTIMATES
Our financial statements and related public financial information are based on
the application of accounting principles generally accepted in the United States
("US GAAP"). US GAAP requires the use of estimates; assumptions, judgments and
subjective interpretations of accounting principles that have an impact on the
assets, liabilities, revenues and expense amounts reported. These estimates can
also affect supplemental information contained in our external disclosures
including information regarding contingencies, risk and financial condition. We
believe our use of estimates and underlying accounting assumptions adhere to
GAAP and are consistently and conservatively applied. We base our estimates on
historical experience and on various other assumptions that we believe to be
reasonable under the circumstances. Actual results may differ materially from
these estimates under different assumptions or conditions. We continue to
monitor significant estimates made during the preparation of our financial
statements.
RESULTS OF OPERATIONS - THREE MONTHS ENDED SEPTEMBER 30, 2010 AS COMPARED TO
THREE MONTHS ENDED SEPTEMBER 30, 2009
REVENUES, COST OF SALES AND OPERATING EXPENSES
The Company had revenues of $0 for the quarter ended September 30, 2010 as
compared to $0 for the quarter ended September 30, 2009. The costs of sales for
the same period were $0 in 2010 as compared to $0 for 2009. The Company incurred
expenses of $155,582 for the quarter ended September 30, 2010 as compared to
$317,012 for the quarter ended September 30, 2009. The expenses in the third
quarter of 2010 were incurred to further the company's Research and Development
efforts and continue the company's strategic plan of opening wellness clinics
Page 12
worldwide. Until the Company obtains capital required to develop any properties
or businesses and obtains the revenues needed from its future operations to meet
its obligations, the Company will be dependent upon sources other than operating
revenues to meet its operating and capital needs. Operating revenues may never
satisfy these needs.
RESULTS OF OPERATIONS - NINE MONTHS ENDED SEPTEMBER 30, 2010 AS COMPARED TO NINE
MONTHS ENDED SEPTEMBER 30, 2009
REVENUES, COST OF SALES AND OPERATING EXPENSES
The Company had revenues of $0 for the nine months ended September 30, 2010 as
compared to $0 for the nine months ended June 30, 2009. The costs of sales for
the same period were $0 in 2010 as compared to $0 for 2009. The Company incurred
expenses of $690,733 for the nine months ended September 30, 2010 as compared to
$997,868 for the nine months ended September 30, 2009. The expenses in the first
nine months of 2010 were incurred to further the company's Research and
Development efforts and continue the company's strategic plan of opening
wellness clinics worldwide. Until the Company obtains capital required to
develop any properties or businesses and obtains the revenues needed from its
future operations to meet its obligations, the Company will be dependent upon
sources other than operating revenues to meet its operating and capital needs.
Operating revenues may never satisfy these needs.
GAIN ON DISCONTINUED OPERATIONS
No income or loss was recorded in the current quarter from discontinued
operations or from the disposal of a subsidiary.
LIQUIDITY AND CAPITAL RESOURCES
CASH
Our cash balance as of September 30, 2010 was $(11,679).
The Company does not currently have sufficient capital in its accounts, nor
sufficient firm commitments for capital to assure its ability to meet its
current obligations or to continue its planned operations. The Company is
continuing to pursue working capital and additional revenue through the seeking
of the capital it needs to carry on its planned operations. There is no
assurance that any of the planned activities will be successful.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
None.
ITEM 4. CONTROLS AND PROCEDURES.
EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES
Our Chief Executive Officer and Chief Financial Officer (collectively the
"Certifying Officers") maintain a system of disclosure controls and procedures
that is designed to provide reasonable assurance that information, which is
required to be disclosed, is accumulated and communicated to management timely.
Under the supervision and with the participation of management, the Certifying
Officers evaluated the effectiveness of the design and operation of our
disclosure controls and procedures (as defined in Rule [13a-14(c)/15d-14(c)]
under the Exchange Act) within 90 days prior to the filing date of this report.
Based upon that evaluation, the Certifying Officers concluded that our
disclosure controls and procedures are not effective in timely alerting them to
Page 13
material information relative to our company required to be disclosed in our
periodic filings with the SEC.
CHANGES IN INTERNAL CONTROLS
During the Quarter ended September 30, 2010, there were no changes made to our
internal controls over financial reporting that are reasonably likely to affect
the reliability of those controls, or the accuracy of our financial reporting.
PART II: OTHER INFORMATION
ITEM 1 - LEGAL PROCEEDINGS
None.
ITEM 2 - UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
None.
ITEM 3 - DEFAULTS UPON SENIOR SECURITIES
On November 25, 2009, the Company entered into an agreement with a shareholder
of the Company. Under terms of this agreement, the Company received $200,000
from this individual in exchange for the issuance of a promissory note in the
principal amount of $200,000 and 200,000 shares of the Company's common stock.
Under the terms of the promissory note, the Company is obligated to repay the
principal amount of the note together with $20,000 interest on or before March
15, 2010. The company is currently in default and in renegotiations regarding
the note.
ITEM 4 - (Removed and Reserved)
ITEM 5 - OTHER INFORMATION
None.
ITEM 6 - EXHIBITS
The following exhibits are filed as part of this quarterly report on Form
10-QSB:
31.1 Certification of Chief Executive Officer pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002
31.2 Certification of Acting Chief Financial Officer pursuant to Section 302 of
the Sarbanes-Oxley Act of 2002
32.1 Certification of Chief Executive Officer pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002
32.2 Certification of Acting Chief Financial Officer pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002
Page 14
SIGNATURES
----------
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
Dated: November 19, 2010 HST GLOBAL, INC.
(the registrant)
By: \s\ Ron Howell
----------------
Ron Howell
Chief Executive Officer
Page 15