ITEM 1 BUSINESS
American Telstar, Inc. (the "Company") was incorporated on August 5, 1986, under the laws of the State of Colorado. The Company was in the music distribution business.
Since 1991, the Company has not engaged in any operations and has been dormant. As such, the Company may presently be defined as a "shell" company, whose sole purpose, at this time, is to locate and consummate a merger or acquisition with a private entity.
Effective March 25, 2005, the Company commenced activities to become reporting with the SEC with the intention to become a publicly trading company and on January 3, 2007, filed a registration statement on Form 10-SB with the U. S. Securities and Exchange Commission (the "SEC") registering its common stock under Section 12(g) of the Securities and Exchange Act of 1934 (the "Exchange Act"). The purpose of the Company is to engage in any lawful corporate undertaking, including, but not limited to, selected mergers and acquisitions. The Company has been in the developmental stage and has no operations since the renewal of its charter. The Company has not commenced any operational activities. The Board of Directors of the Company has elected to commence implementation of the Company's principal business purpose, described below under "General Business Plan".
Pursuant to the Articles of Incorporation, the Company is authorized to issue 500,000,000 shares of common stock, $0.0001 par value, and 40,000,000 shares of Preferred Stock, $0.10 par value. As of July 31, 2010, there are 650,225 shares of common stock outstanding.
The proposed business activities described herein classify the Company as a "blank check" company. Many states have enacted statutes, rules and regulations limiting the sale of securities of "blank check" companies in their respective jurisdictions. Management does not intend to undertake any offering of the Company's securities, either debt or equity, until such time as the Company has successfully implemented its business plan herein.
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 to Purchaser, 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.
GENERAL BUSINESS PLAN
At this time, the Company's purpose is to seek, investigate and, if such investigation warrants, acquire an interest in business opportunities presented to it by persons or firms who or which desire to seek the perceived advantages of an Exchange Act registered corporation. The Company will not restrict its search to any specific business, industry, or geographical location and the Company may participate in a business venture of virtually any kind or nature. This discussion of the proposed business is purposefully general and is not meant to be restrictive of the Company's virtually unlimited discretion to search for and enter into potential business opportunities. Management anticipates that it may be able to participate in only one potential business venture because the Company has nominal assets and limited financial resources. This lack of diversification should be considered a substantial risk to shareholders of the Company because it will not permit the Company to offset potential losses from one venture against gains from another.
The Company may seek a business opportunity with entities which have recently commenced operations, or which wish to utilize the public marketplace in order to raise additional capital in order to expand into new products or markets, to develop a new product or service, or for other corporate purposes. The Company may acquire assets and establish wholly-owned subsidiaries in various businesses or acquire existing businesses as subsidiaries.
The Company intends to advertise and promote the Company privately. The Company has not yet prepared any notices or advertisement.
ITEM 1A
ITEM 1A RISK FACTORS
Not applicable.
ITEM 1B
ITEM 1B UNRESOLVED STAFF COMMENTS
None.
ITEM 2
ITEM 2 PROPERTIES
The Company does not own or lease any property. Our sole officer and director provides office space and related office services without charge. There is no guarantee that this arrangement will continue in the future.
ITEM 3
ITEM 3 LEGAL PROCEEDINGS
There are no known legal proceedings or outstanding judgments against the Company, nor any pending litigation.
ITEM 4
ITEM 4 REMOVED AND RESERVED
PART II
ITEM 5
ITEM 5 MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS AND REGISTRANT PURCHASES OF EQUITY SECURITIES
(a) Market Information.
The Company's securities are listed for trading on the OTCBB, but there is no active trading market.
(b) Holders.
As of July 31, 2010, there are approximately 28 holders of the Company's Common Stock.
(c) Dividends.
The Company has never paid a cash dividend on its common stock and has no present intention to declare or pay cash dividends on the common stock in the foreseeable future. The Company intends to retain any earnings which it may realize in the foreseeable future to finance its operations. Future dividends, if any, will depend on earnings, financing requirements and other factors.
The transfer agent for the Company's common stock is Computershare, 350 Indiana Street, Suite 750, Golden, CO 80401.
ITEM 6
ITEM 6 SELECTED FINANCIAL DATA
The following selected financial data should be read in conjunction with our financial statements and related notes and "Management's Discussion and Analysis of Financial Condition and Results of Operations". The statements o operations data for the years ended July 31, 2010 and 2009 and the balance sheet data at July 31, 2010 and 2009 are derived from our financial statements which are included elsewhere in this Form 10-K. The historical results are not necessarily indicative of results to be expected for future periods.
STATEMENTS OF OPERATIONS DATA:
For the Year Ended July 31, 2010 2009 -------- --------
Revenue $ -- $ -- Cost of goods sold -- -- -------- -------- Gross profit (loss) -- -- -------- -------- Total Operating Expenses 4,252 30,001 -------- --------
Net (Loss) (4,252) (30,001) ======== ========
Basic and diluted loss per share (0.01) (0.05) ======== ======== Shares used in calculation of loss per share: Basic and Diluted 650,225 650,225 ======== ========
BALANCE SHEET DATA:
For the Year Ended July 31, 2010 2009 -------- --------
Cash and Cash Equivalents $ 9,053 $ 5,253 Working Capital (25,875) (21,623) Total Assets 9,053 5,253 Long Term Obligations 20,140 -- Total Shareholders' equity (deficit) (25,875) (21,623)
ITEM 7
ITEM 7 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion should be read in conjunction with the financial statements and notes thereto. Our fiscal year ends July 31. This document contains certain forward-looking statements including, among others, anticipated trends in our financial condition and results of operations and our business strategy. These forward-looking statements are based largely on our current expectations and are subject to a number of risks and uncertainties. Actual results could differ materially from these forward-looking statements. Important factors to consider in evaluating such forward-looking statements include (i) changes in external factors or in our internal budgeting process which might impact trends in our results of operations; (ii) unanticipated working capital or other cash requirements; (iii) changes in our business strategy or an inability to execute our strategy due to unanticipated changes in the industries in which we operate; and (iv) various competitive market factors that may prevent us from competing successfully in the marketplace.
RESULTS OF OPERATIONS
The Company incorporated in Colorado on August 5, 1986 as a music distribution business. Since 1991, the Company has not engaged in any operations and has been dormant. As such, the Company may presently be defined as a "shell" company, whose sole purpose, at this time, is to locate and consummate a merger or acquisition with a private entity.
Effective March 25, 2005, the Company commenced activities to become reporting with the SEC with the intention to become a publicly trading company and on January 3, 2007, filed a registration statement on Form 10-SB with the U. S. Securities and Exchange Commission (the "SEC") registering its common stock under Section 12(g) of the Securities and Exchange Act of 1934 (the "Exchange Act"). The purpose of the Company is to engage in any lawful corporate
undertaking, including, but not limited to, selected mergers and acquisitions. The Company has been in the developmental stage and has no operations since the renewal of its charter. The Company has not commenced any operational activities. The Board of Directors of the Company has elected to commence implementation of the Company's principal business purpose, described below under "General Business Plan".
For the year ended July 31, 2010 we incurred a net loss of ($4,252) or ($0.01) per share compared to a net loss of ($30,001) or ($0.05) per share for the year ended July 31, 2009. The change is primarily attributable to an increase in professional and consulting fees and a reversal of a previously accrued investment banking fee which was forgiven in connection with the stock purchase agreement dated May 26, 2010.
The Company believes that while there is some doubt as to the Company's continuation as a going concern, its success is dependent upon its ability to meet its financing requirements and the success of its future operations or completion of a successful business combination. Management believes that the Company's operating and financial requirements provide the opportunity to the Company to continue as a going concern. The opinion of the Company's auditor (page 6) and the notes to the Company's financial statements (Note 3, page 13) express substantial doubt as to the Company's ability to continue as a going concern based upon the fact that the Company did not generate any revenues during the year ended July 31, 2010, is unlikely to generate earnings in the immediate or foreseeable future and has an accumulated deficit of $255,375 as of July 31, 2010.
LIQUIDITY AND CAPITAL RESOURCES
On July 31, 2010 we had a negative working capital of ($25,875) and cash of $9,053, compared to negative working capital of ($21,623) and cash of $5,253 at July 31, 2009.
The Company has no operating history as a "blank check" company and no material assets.
We presently do not have any available credit, bank financing or other external sources of liquidity. We will need to obtain additional capital in order to commence operations. We are currently investigating other financial alternatives, including additional equity and/or debt financing. In order to obtain capital, we may need to sell additional shares of our common stock or borrow funds from private lenders. However, there can be no assurance that any additional financing will become available to us, and if available, on terms acceptable to us.
ITEM 8
ITEM 8 FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Page ----
Report of Independent Registered Public Accounting Firm 8 Balance Sheets 9 Statements of Operations 10 Statements of Cash Flows 11 Statements of Changes in Stockholders' Equity 12 Notes to Financial Statements 13
Paritz & Company, P.A. 15 Warren Street, Suite 25 Hackensack, New Jersey 07601 Phone: (201) 342-7753 Fax: (201) 342-7598 E-Mail: paritz @paritz.com - -------------------------------------------------------------------------------- Certified Public Accountants
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Board of Directors American Telstar, Inc. (A Development Stage Company)
We have audited the accompanying balance sheets of American Telstar, Inc. (A Development Stage Company) as of July 31, 2010 and 2009 and the related statements of operations, changes in stockholders' equity and cash flows for the years then ended and for the period from inception (March 25, 2005) to July 31, 2010. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of American Telstar, Inc. (A Development Stage Company) as of July 31, 2010, and the results of its operations and its cash flows for the year then ended and for the period from inception (March 25, 2005) to July 31, 2010, in conformity with accounting principles generally accepted in the United States of America.
As discussed in Note 3, the accompanying financial statements have been prepared assuming the Company will continue as a going concern. The ability of the Company to continue as a going concern and to emerge from the development stage is dependent upon its successful execution of its plan of operations and ability to raise additional financing. There is no guarantee that the Company will be able to raise additional financing or sell any of its products or services at a profit. The Company did not generate any revenue during the year ended July 31, 2010 and has an accumulated deficit of $255,375 as of that date. These factors, among others, raise substantial doubt regarding the Company's ability to continue as a going concern. The accompanying financial statements do not include any adjustments that might result from the outcome of this uncertainty.
/s/ Paritz & Company, P.A. - ------------------------------ Paritz & Company, P.A. Hackensack, New Jersey October 14, 2010
AMERICAN TELSTAR, INC. BALANCE SHEETS (A DEVELOPMENT STAGE COMPANY)
SEE NOTES TO FINANCIAL STATEMENTS
AMERICAN TELSTAR, INC. STATEMENTS OF OPERATIONS (A DEVELOPMENT STAGE COMPANY)
SEE NOTES TO FINANCIAL STATEMENTS
AMERICAN TELSTAR, INC. STATEMENTS OF CASH FLOWS (A DEVELOPMENT STAGE COMPANY)
SEE NOTES TO FINANCIAL STATEMENTS
AMERICAN TELSTAR, INC. STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (A DEVELOPMENT STAGE COMPANY) FOR THE PERIOD FROM MARCH 25, 2005 (DATE OF DEVELOPMENT STAGE) THROUGH JULY 31, 2010
SEE NOTES TO FINANCIAL STATEMENTS
AMERICAN TELSTAR, INC. (A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS JULY 31, 2010
NOTE 1 - ORGANIZATION & SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a) Organization and Description of Business
The Company (formerly Heritage Funding, Ltd.) was originally incorporated as a Colorado corporation on August 5, 1986.
Heritage Funding, Ltd. successfully completed a public offering of securities during the year ended July 31, 1988. On November 28, 1988, the Company issued 185,000 (post reverse-split) shares of its $.0001 par value common stock in exchange for 100% ownership of American Telstar, Inc. American Telstar, Inc. was established as a California corporation in 1986. The Company was engaged in the music video business as well as a movie production business. American Telstar in 1988 became engaged in acquiring music through lease agreements for various record labels. Since 1991, the Company has not engaged in any operations and has been dormant.
Heritage Funding, Ltd. changed its name to American Telstar, Inc. effective December 9, 1988.
The business combination was accounted for as a reverse purchase since the controlling shareholders of the acquired company control the acquiring company after the transaction. The stockholders' (deficit) section of the financial statements has been retroactively adjusted to give effect to the reorganization as of the date the original shares were issued by American Telstar, Inc., the California corporation. The net monetary assets of Heritage Funding, Ltd. at the time of the transaction have been treated as consideration for the new shares at that time.
Effective March 25, 2005, the Company commenced activities to become reporting with the SEC with the intention to become a publicly trading company.
(b) Development Stage Activities
Based upon the Company's business plan, it is a development stage enterprise since planned principal operations have not yet commenced. Accordingly, the Company presents its financial statements in conformity with the accounting principles generally accepted in the United States of America that apply in establishing operating enterprises. As a development stage enterprise, the Company discloses the deficit accumulated during the development stage and the cumulative statements of operations and cash flows from commencement of development stage to the current balance sheet date. The development stage began March 25, 2005 when the Company commenced activities to become reporting with the SEC with the intention to become a publicly trading company.
AMERICAN TELSTAR, INC. (A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING PRINCIPLES
A. USE OF ESTIMATES
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that 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. Actual results could differ from those estimates.
B. DEVELOPMENT STAGE
The Company continues to devote substantially all of its efforts to exploring potential targets for a business combination through the purchase of assets, share purchase or exchange, merger or similar type of transaction.
C. INCOME TAXES
Deferred tax assets and liabilities are recognized for future tax consequences attributable to differences between financial statement carrying amounts of existing assets and liabilities and their respective tax bases. In addition, the recognition of future tax benefits, such as carry-forwards, to the extent that realization of such benefits is more likely than not and that a valuation allowance be provided when it is more likely than not that some portion of the deferred tax asset will not be realized.
D. SHARE-BASED COMPENSATION
Share-based compensation cost is measured at the grant date based on the fair value of the award and is recognized as expense over the requisite service period. The Company's policy is to recognize compensation cost for awards with only service conditions and a graded vesting schedule on a straight-line basis over the requisite service period for the entire award.
During the years ended July 31, 2010 and 2009, there were no stock options granted or outstanding.
E. RECENT ACCOUNTING PRONOUNCEMENTS
There were various accounting standards and interpretations issued during 2010 and 2009, none of which are expected to have a material impact on the Company's financial position, operations or cash flows.
AMERICAN TELSTAR, INC. (A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING PRINCIPLES (CONT'D)
F. FAIR VALUE OF FINANCIAL INSTRUMENTS
The Company adopted the provisions of Accounting Standards Codification ("ASC") 820, Fair Value Measurements and Disclosures. ASC 820 clarifies the definition of fair value, prescribes methods for measuring fair value, and establishes a fair value hierarchy to classify the inputs used in measuring fair value as follows:
Level 1-Inputs are unadjusted quoted prices in active markets for identical assets or liabilities available at the measurement date.
Level 2-Inputs are unadjusted quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, inputs other then quoted prices that are observable, and inputs derived from or corroborated by observable market data.
Level 3-Inputs are unobservable inputs which reflect the reporting entity's own assumptions on what assumptions the market participants would use in pricing the asset or liability based on the best available information.
The Company's financial instruments primarily consist of cash and related party borrowings. As of the balance sheet dates, the estimated fair values of financial instruments were not materially different from their carrying values as presented on the balance sheet.
NOTE 3 - GOING CONCERN
The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the Company will continue to realize its assets and discharge its liabilities in the normal course of business. The Company has not generated any revenues since inception, has an accumulated loss of $255,375 as of July 31, 2010, and is unlikely to generate earnings in the immediate or foreseeable future. The continuation of the Company as a going concern is dependent upon, among other things, the continued financial support from its shareholders, the ability of the Company to obtain necessary equity or debt financing, and the attainment of profitable operations. These factors, among others, raise substantial doubt regarding the Company's ability to continue as a going concern. There is no assurance that the Company will be able to generate revenues in the future. These financial statements do not give any effect to any adjustments that would be necessary should the Company be unable to continue as a going concern.
AMERICAN TELSTAR, INC. (A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
NOTE 4 - STOCKHOLDERS' EQUITY
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 July 31, 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 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 restated to reflect the reverse stock split.
NOTE 5 - RELATED PARTY TRANSACTIONS
The Company uses the offices of its Chief Executive Officer for its minimal office facility needs for no consideration. No provision for these costs has been provided since it has been determined they are immaterial.
During the year ended July 31, 2010, the Company's majority shareholder advanced $20,140 to fund the Company's expenses. This loan is non-interest bearing with no stated maturity date.
In connection with a stock purchase agreement, the former majority shareholders of the company forgave $25,000 of investment services due to them. This amount is shown as a reduction of expenses in the accompanying statement of operations for the year ended July 31, 2010.
NOTE 6 - INCOME TAXES
At July 31, 2010 and 2009, the Company had net operating loss carry forwards of approximately $92,000 and $88,000 which expire through 2030. Pursuant to Section 382 of the Internal Revenue Code regarding substantial changes in ownership, utilization of these losses may be limited. Due to the fact that the Company has not generated any taxable income through July 31, 2010 except for income from the cancellation of investment banking fees, it was determined that it was more likely than not that the Company's deferred tax asset will not be realized. As such, the deferred tax asset of approximately $37,000 and $35,000 at July 31, 2010 and 2009, respectively, has been offset by a full valuation allowance of $37,000 and $35,000, respectively.
PART III
ITEM 9
ITEM 9 CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
None.
ITEM 9A
ITEM 9A CONTROLS AND PROCEDURES
EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES
The Company maintains disclosure controls and procedures (as defined in the Securities Exchange Act of 1934 Rules 13a-15(e) or 15d-15(e)) designed to ensure that information required to be disclosed in reports filed or submitted under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by the Company in its reports that it files or submits under the Exchange Act is accumulated and communicated to the Company's management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.
The Company's management, with the participation of its chief executive and chief financial officer, evaluated the effectiveness of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) or 15d-15(e)) as of July 31, 2010. Based on that evaluation, the Company's chief executive officer concluded that, as of that date, the Company's disclosure controls and procedures were not effective at a reasonable assurance level, due to the identification of a material weakness, as discussed further below under Management's Report on Internal Control over Financial Reporting.
MANAGEMENT'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act). Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Therefore, even those systems determined to be effective can provide only reasonable assurance of achieving their control objectives. Furthermore, smaller reporting companies face additional limitations. Smaller reporting companies employ fewer individuals and find it difficult to properly segregate duties. Additionally, smaller reporting companies tend to utilize general accounting software packages that lack a rigorous set of software controls.
Our management, with the participation of the President, evaluated the effectiveness of the Company's internal control over financial reporting as of July 31, 2010. In making this assessment, our management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control -- Integrated Framework. Based on that evaluation, our management concluded that, as of July 31, 2010, our internal control over financial reporting was not effective due to material weaknesses in the system of internal control. Specifically, management identified the following control deficiencies. (1) The Company has not properly segregated duties as one or two individuals initiate, authorize, and complete all transactions. The Company has not implemented measures that would prevent the individuals from overriding the internal control system. The Company does not believe that this control deficiency has resulted in deficient financial reporting because the Chief Financial Officer is aware of his responsibilities under the SEC's reporting requirements and personally certifies the financial reports. (2) The Company has installed accounting software that does not prevent erroneous or unauthorized changes to previous reporting periods and does not provide an adequate audit trail of entries made in the accounting software.
Accordingly, while the Company has identified certain material weaknesses in its system of internal control over financial reporting, it believes that it has taken reasonable steps to ascertain that the financial information contained in this report is in accordance with generally accepted accounting principles. Management has determined that current resources would be appropriately applied elsewhere and when resources permit, they will alleviate material weaknesses through various steps.
CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING
There were no changes in our internal control over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act, during our most recently completed fiscal year that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
ITEM 9B
ITEM 9B 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 to Purchaser, 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. The Company reported the Purchase on a Current Report on Form 8-K which was filed with the SEC on May 27, 2010.
On August 4, 2010, the Company retained Paritz & Company, P.A. as its independent registered public accounting firm for the fiscal year ended July 31, 2010. The Company did not use an independent auditor in the prior fiscal year because the Company was an inactive company as defined by Regulation S-X ss.210. 3-11 and audited financial statements were not required to be presented.
On September 28, 2010, the Company changed the location of its principal executive offices from 730 W. Randolph Street, Suite 600, Chicago, IL 60661 to 36 Mclean Street, Red Bank, NJ 07701 and changed its telephone number from 312-454-0015 to 201-970-4987.
PART III
ITEM 10
ITEM 10 DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
The directors of the Company hold office for annual terms and will remain in their positions until successors have been elected and qualified. The officers are appointed by the board of directors of the Company and hold office until their death, resignation or removal from office. The ages, positions held, and duration of terms of the directors and executive officers are as follows as of the date of this report:
Name Age Position ---- --- --------
Lisa Guise 42 President, Chief Executive Officer and Director
LISA GUISE
Lisa Guise is a director of the Company. Ms. Guise graduated Syracuse University. Ms. Guise received her Bachelor's of science degree in speech communications in 1991. Over the past few years Ms. Guise has been an independent business consultant. Her experience includes working with management of privately-held companies to maximize productivity as well as general corporate matters. Ms. Guise has experience in various industries including fitness and transportation.
SIGNIFICANT EMPLOYEES
The Company has no regular employees. Lisa Guise devotes approximately 5% of her time to the Company's business.
INVOLVEMENT IN CERTAIN LEGAL PROCEEDINGS
None
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities and Exchange Act of 1934 requires any person who is our director or executive officer or who beneficially holds more than ten percent (10%) of any class of our securities which have been registered with the Securities and Exchange Commission. These persons are also required under the regulations of the Securities and Exchange Commission to furnish us with copies of all Section 16(a) reports they file. To the Company's knowledge, all Section 16(a) reports were timely filed except that (1) during the fiscal year ended July 31, 2010, one person, Charles Calello, filed a late Form 4 reporting one transaction; and (2) during the fiscal years ended July 31, 2010 and prior fiscal years, no beneficial ownership reports have been filed by Peter Porath or Ranji Bedi.
CODE OF ETHICS
We have not prepared a written code of ethics and employment standards for our company.
CORPORATE GOVERNANCE; AUDIT COMMITTEE FINANCIAL EXPERT
We currently do not have an audit committee financial expert or an independent audit committee expert due to the fact that our Board of Directors currently does not have an independent audit committee.
ITEM 11
ITEM 11 EXECUTIVE COMPENSATION
The following table sets forth information concerning the annual and long-term compensation earned by the Company's principal executive officer, each of our two most highly compensated executive officers who were serving as executive officers at any time during the fiscal year.
- ---------- (1) Elected May 26, 2010 (2) Resigned May 26, 2010
There are no employment agreements or consulting agreements with our current sole director and executive officer. There are no arrangements or plans in which we provide pension, retirement or similar benefits for directors or executive officers. We do not have any material bonus or profit sharing plans pursuant to which cash or non-cash compensation is or may be paid to our directors or executive officers, except that stock options may be granted at the discretion of our board of directors from time to time. We have no plans or arrangements in respect of remuneration received or that may be received by our executive officers to compensate such officers in the event of termination of employment (as a result of resignation, retirement, change of control) or a change of responsibilities following a change of control.
None of the Company's current officers or directors received any compensation for their respective services rendered to the Company during the last two fiscal years. They all agreed to act without compensation until authorized by the Board of Directors. Such authorization is not expected to occur until the Company has generated revenues from operations after consummation of a merger or acquisition. The Company currently has no funds available to pay our sole officers and director. Further, our sole officers and director is not accruing any compensation pursuant to any agreement with the Company.
It is possible that, after the Company successfully consummates a merger or acquisition with an unaffiliated entity, that entity may desire to employ or retain one or a number of members of the Company's management for the purposes of providing services to the surviving entity, or otherwise provide other compensation to such persons. However, the Company has adopted a policy whereby the offer of any post-transaction remuneration to members of management will not be a consideration in the Company's decision to undertake any proposed transaction. Each member of management has agreed to disclose to the Company's Board of Directors any discussions concerning possible compensation to be paid to them by any entity that proposes to undertake a transaction with the Company and further, to abstain from voting on such transaction. Therefore, as a practical matter, if each member of the Company's Board of Directors is offered compensation in any form from any prospective merger or acquisition candidate, the proposed transaction will not be approved by the Company's Board of Directors as a result of the inability of the Board to affirmatively approve such a transaction.
It is possible that persons associated with management may refer a prospective merger or acquisition candidate to the Company. In the event the Company consummates a transaction with any entity referred by associates of management, it is possible that such an associate will be compensated for their referral in
the form of a finder's fee. It is anticipated that this fee will be either in the form of restricted common stock issued by the Company as part of the terms of the proposed transaction, or will be in the form of cash consideration. However, if such compensation is in the form of cash, such payment will be tendered by the acquisition or merger candidate, because the Company has insufficient cash available. The amount of such finder's fee cannot be determined as of the date of this registration statement, but is expected to be comparable to consideration normally paid in like transactions. No member of management of the Company will receive any finder's fee, either directly or indirectly, as a result of their respective efforts to implement the Company's business plan outlined herein.
No retirement, pension, profit sharing, stock option or insurance programs or other similar programs have been adopted by the Company for the benefit of its employees.
As of July 31, 2010, there were no equity compensation plans in effect.
ITEM 12
ITEM 12 SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
The following table sets forth certain information as of the date of this Report with respect to the beneficial ownership of the outstanding common stock of the Company by (i) any holder of more than five (5%) percent; (ii) each of the Company's executive officers and directors; and (iii) the Company's directors and executive officers as a group. Unless otherwise indicated below, the persons and entities named in the table have sole voting and sole investment power with respect to all shares beneficially owned. The percentage of class is based on 650,225 shares of common stock issued and outstanding as of the date of this Report.
Amount of Beneficial Percentage of Name and Address of Beneficial Owner Ownership Class - ------------------------------------ --------- ----- Lisa Guise 493,750 75.94% c/o American Telstar, Inc. 36 Mclean Street, Red Bank, NJ 07701
Ranji Bedi 95,000 14.61% 9889 Santa Monica Boulevard, Suite 205 Beverly Hills, CA 90210
Officers and Directors as a group (1 person) 493,750 75.94%
ITEM 13
ITEM 13 CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE
The Board of Directors has passed a resolution which contains a policy that the Company will not seek an acquisition or merger with any entity in which any of the Company's Officers, Directors, principal shareholders or their affiliates or associates serve as officer or director or hold any ownership interest. Management is not aware of any circumstances under which this policy, through their own initiative may be changed.
The proposed business activities described herein classify the Company as a "blank check" company. Many states have enacted statutes, rules and regulations limiting the sale of securities of "blank check" companies in their respective jurisdictions. Management does not intend at this time to undertake any efforts to cause a market to develop in the Company's securities until such time as the Company has successfully implemented its business plan described herein.
ITEM 14
ITEM 14 PRINCIPAL ACCOUNTANT FEES AND SERVICES
On August 4, 2010, the Company retained Paritz & Company, P. A. as its independent registered public accounting firm for the fiscal year ended July 31, 2010. The Company did not use an independent auditor in the prior fiscal year because the Company was an inactive company as defined by Regulation S-Xss.210. 3-11 and audited financial statements were not required to be presented. During
the year ended July 31, 2009, the total fees billed for audit-related services was $0, for tax services was $0 and for other services was $0. During the year ended July 31, 2010, the total fees billed for audit-related services was $6,000.00, for tax services was $0 and for all other services was $0.
PART IV
ITEM 15
ITEM 15 EXHIBITS, FINANCIAL STATEMENT SCHEDULES
Exhibit No. Description - ----------- ----------- 3.1 Articles of Incorporation (1) 3.2 Certificate of Amendment of Articles of Incorporation dated December 16, 1988 (1) 3.3 Articles of Reinstatement dated June 21, 1996 (1) 3.4 Articles of Reinstatement dated September 7, 1999 (1) 3.5 By-Laws (1) 31 Certification of Principal Executive Officer and Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 32 Certification of Principal Executive Officer and Principal Financial Officer to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
- ---------- (1) Incorporated herein by reference from the Company's Registration Statement on Form 10-SB filed with the Securities and Exchange Commission on January 3, 2007.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities and Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
AMERICAN TELSTAR, INC.
Date: October 20, 2010 By /s/Lisa Guise ------------------------------------- Lisa Guise President and Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated:
/s/ Lisa Guise President, Chief Executive October 20, 2010 - ---------------------------- Officer and Director Lisa Guise (Principal Executive Officer) (Principal Financial and Accounting Officer)
SUPPLEMENTAL INFORMATION TO BE FURNISHED WITH REPORTS FILED PURSUANT TO SECTION 15(D) OF THE ACT BY REGISTRANTS WHICH HAVE NOT REGISTERED SECURITIES PURSUANT TO SECTION 12 OF THE ACT
The registrant has not furnished to its security holders an annual report covering its fiscal year ended July 31, 2010 or any proxy material with respect to any annual or other meeting of security holders, nor will the registrant furnish such material to its security holders subsequent to the filing of its annual report on this Form 10-K.