MUSTANG ALLIANCES, INC. - FORM 10-Q

Attached files

file	filename
EX-4.2 - AMENDED AND RESTATED PROMISSORY NOTE - MUSTANG ALLIANCES, INC.	f10q09094ii_mustang.htm
EX-32.1 - CERTIFICATION PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 - MUSTANG ALLIANCES, INC.	f10q0909ex32_mustang.htm
EX-31.1 - CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002 - MUSTANG ALLIANCES, INC.	f10q0909ex31_mustang.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

x QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarter ended September 30, 2009

o TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.

For the transition period from _____ to _____

Commission File Number: 333-148431

MUSTANG ALLIANCES, INC.

(Exact name of small business issuer as specified in its charter)

	Nevada		74-3206736
	(State of incorporation)		(IRS Employer ID Number)

410 Park Avenue, 15th Floor

New York, New York 110022

(Address of principal executive offices)

(888) 251-3422

(Issuer's telephone number)

________________________________________________________________

(Former name, former address and former fiscal year, if changed since last report)

Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 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 definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer o	Accelerated Filer o
Non-accelerated filer o (Do not check if a smaller reporting company)	Smaller reporting company x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes x No 

As of November 12, 2009, 10,800,000 shares of common stock, par value $0.0001 per share, were issued and outstanding.

TABLE OF CONTENTS

	Page
PART I

Item 1. Financial Statements	1

Item 2. Management’s Discussion and Analysis of Financial Conditions and Results of Operations	7

Item 3 Quantitative and Qualitative Disclosures About Market Risk	14

Item 4T Controls and Procedures	14

PART II

Item 1. Legal Proceedings	14

Item IA. Risk Factors	14

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	14

Item 3. Defaults Upon Senior Securities	15

Item 4. Submission of Matters to a Vote of Security Holders	15

Item 5. Other Information	15

Item 6. Exhibits	15

PART I

FINANCIAL INFORMATION

Item 1. Financial Statements.

MUSTANG ALLIANCES, INC.

(A DEVELOPMENT STAGE COMPANY)

CONDENSED BALANCE SHEET

ASSETS

	September 30, 2009			December 31, 2008
	(Unaudited)
Current Assets:
Cash	$	594		$	534

Total Current Assets		594			534

Total Assets	$	594		$	534



LIABILITIES AND STOCKHOLDERS’ (DEFICIENCY)

Current Liabilities:
Accrued Expenses	$	10,839		$	4,374
Current Portion of Long-Term Debt		-			40,000

Total Current Liabilities		10,839			44,374

Long-Term Debt, Net of Current Portion		56,400			-

Total Liabilities		67,239			44,374

Commitments and Contingencies

Stockholders’ (Deficiency):
Preferred Stock, $.0001 par value; 5,000,000 shares
authorized, none issued and outstanding		-			-
Common Stock, $.0001 par value; 500,000,000 shares
authorized, 10,900,000 shares issued and outstanding
at September 30, 2009 and December 31, 2008		1,090			1,090
Additional Paid-In Capital		50,674			50,674
Deficit Accumulated During the Development Stage		(118,409	)		(95,604	)

Total Stockholders’ (Deficiency)		(66,645	)		(43,840	)

Total Liabilities and Stockholders’ (Deficiency)	$	594		$	534

The accompanying notes are an integral part of these financial statements.

MUSTANG ALLIANCES, INC.

(A DEVELOPMENT STAGE COMPANY)

CONDENSED STATEMENT OF OPERATIONS

(Unaudited)

	For the						For the						For the Period
	Nine Months Ended						Quarter Ended						February 22, 2007
	September 30,						September 30,						(Inception) To
	2009			2008			2009			2008			September 30, 2009

Net Revenues	$	-		$	-		$	-		$	-		$	-

Costs and Expenses:
Professional and Consulting Fees		18,500			74,926			4,000			59,976			105,701
General and Administrative Expenses		1,440			1,600			300			153			4,724
Start Up Costs		-			-			-			-			1,145

Total Costs and Expenses		19,940			76,526			4,300			60,129			111,570

Operating Loss		(19,940	)		(76,526	)		(4,300	)		(60,129	)		(111,570	)

Other Income (Expense):
Interest Expense		(2,865	)		(2,400	)		(1,123	)		(800	)		(6,839	)

Total Other Income (Expense)		(2,865	)		(2,400	)		(1,123	)		(800	)		(6,839	)

Net Loss	$	(22,805	)	$	(78,926	)	$	(5,423	)	$	(60,929	)	$	(118,409	)

Basic and Diluted Loss Per Share	$	(.00	)	$	(.00	)	$	(.00	)	$	(.00	)

Weighted Average Common Shares Outstanding		10,900,000			10,278,179			10,900,000			10,800,000

The accompanying notes are an integral part of the financial statements.

MUSTANG ALLIANCES, INC.

(A DEVELOPMENT STAGE COMPANY)

CONDENSED STATEMENT OF STOCKHOLDERS’ EQUITY (DEFICIENCY)

FOR THE PERIOD FEBRUARY 22, 2007 (INCEPTION) TO SEPTEMBER 30, 2009

(Unaudited)

							Deficit
					Additional		Accumulated During the
	Common Stock				Paid-In		Development
	Shares		Amount		Capital		Stage			Total

Balance, February 22, 2007		-	$	-	$	-	$	-		$	-

Common Stock Issued to Founders at
$.0001 Per Share, February 22, 2007		8,000,000		800		-		-			800

Net Loss for the Period		-		-		-		(4,498	)		(4,498	)

Balance, December 31, 2007		8,000,000		800		-		(4,498	)		(3,698	)

Common Stock Issued to Investors at
$.025 Per Share, Net of Offering
Costs, February 20, 2008		2,800,000		280		44,684		-			44,964

Common Stock Issued for Services,
February 25, 2008		100,000		10		5,990		-			6,000

Net Loss for the Year Ended
December 31, 2008		-		-		-		(91,106	)		(91,106	)

Balance, December 31, 2008		10,900,000		1,090		50,674		(95,604	)		(43,840	)

Net Loss for the Nine Months Ended
September 30, 2009 (Unaudited)		-		-		-		(22,805	)		(22,805	)

Balance, September 30, 2009 (Unaudited)		10,900,000	$	1,090	$	50,674	$	(118,409	)	$	(66,645	)

The accompanying notes are an integral part of these financial statements.

MUSTANG ALLIANCES, INC.

(A DEVELOPMENT STAGE COMPANY)

CONDENSED STATEMENT OF CASH FLOWS

(Unaudited)

	For the						For the Period
	Nine Months Ended						February 22, 2007
	September 30,						(Inception) to
	2009			2008			September 30, 2009
Cash Flows from Operating Activities:
Net Loss	$	(22,805	)	$	(78,926	)	$	(118,409	)
Common Stock Issued for Services		-			-			6,000
Adjustments to Reconcile Net Loss to Net
Cash Used in Operating Activities:
Changes in Assets and Liabilities:
Decrease in Accounts Payable		-			(1,579	)		-
Increase in Accrued Expenses		6,465			3,900			10,839

Net Cash Used in Operating Activities		(16,340	)		(76,605	)		(101,570	)

Cash Flows from Investing Activities:		-			-			-

Cash Flows from Financing Activities:
Proceeds of Borrowings		16,400			-			56,400
Proceeds from Sale of Common Stock		-			70,000			70,800
Payments of Deferred Offering Costs		-			(7,500	)		(25,000	)
Expenses of Offering		-			(36	)		(36	)

Net Cash Provided by Financing Activities		16,400			62,464			102,164

Increase (Decrease) in Cash		60			(14,141	)		594

Cash – Beginning of Period		534			21,155			-

Cash – End of Period	$	594		$	7,014		$	594


Supplemental Disclosures of Cash Flow Information:
Interest Paid	$	-		$	-		$	-
Income Taxes Paid	$	-		$	-		$	-

Supplemental Schedule of Non-Cash Investing and
Financing Activities:
Deferred Offering Costs Charged to Additional
Paid-In Capital	$	25,000		$	-		$	25,000

Deferred Offering Costs Recorded in Accounts
Payable	$	-		$	-		$	7,500

The accompanying notes are an integral part of these financial statements.

MUSTANG ALLIANCES, INC.

(A DEVELOPMENT STAGE COMPANY)

NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

NOTE 1 - Organization and Basis of Presentation

Mustang Alliances, Inc. (“the Company”) was incorporated on February 22, 2007 under the laws of the State of Nevada.

The Company has not yet generated revenues from planned principal operations and is considered a development stage company as defined in Statement of Financial Accounting Standards (“SFAS”) No. 7. The Company intended to market and sell anti-lock braking systems produced in China to the auto parts and auto manufacturing market in the United States. The Company has since abandoned its business plan and is now seeking an operating company with which to merge or acquire. Accordingly, the Company is now considered a blank check company. There is no assurance, however, that the Company will achieve its objectives or goals.

In the opinion of the Company’s management, the accompanying unaudited condensed financial statements contain all adjustments (consisting of only normal recurring adjustments) necessary to present fairly the information set forth therein. These financial statements are condensed and therefore do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements.

Results of operations for interim periods are not necessarily indicative of the results of operations for a full year.

The Company is a development stage company and has not commenced planned principal operations. The Company had no revenues and incurred a net loss of $22,805 for the nine months ended September 30, 2009 and a net loss of $118,409 for the period February 22, 2007 (inception) to September 30, 2009. In addition, the Company had a working capital deficiency of $10,245 at September 30, 2009. These factors raise substantial doubt about the Company’s ability to continue as a going concern.

There can be no assurance that sufficient funds will be generated during the next year or thereafter from operations or that funds will be available from external sources such as debt or equity financings or other potential sources. The lack of additional capital could force the Company to curtail or cease operations and would, therefore, have a material adverse effect on its business. Furthermore, there can be no assurance that any such required funds, if available, will be available on attractive terms or that they will not have a significant dilutive effect on the Company's existing stockholders.

The Company is attempting to address its lack of liquidity by raising additional funds, either in the form of debt or equity or some combination thereof. During the quarter ended September 30, 2009 the Company borrowed $2,300 for working capital purposes. There can be no assurances that the Company will be able to raise the additional funds it requires.

The accompanying condensed financial statements do not include any adjustments related to the recoverability or classification of asset-carrying amounts or the amounts and classifications of liabilities that may result should the Company be unable to continue as a going concern.

MUSTANG ALLIANCES, INC.

(A DEVELOPMENT STAGE COMPANY)

NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

NOTE 2 - Long-Term Debt

On October 5, 2007, the Company issued for aggregate consideration of $40,000, a promissory note in the aggregate principal amount of $40,000. The promissory note has a line of credit of up to $200,000 and is due October 5, 2009, and bears interest at 8% per annum. The Company borrowed $2,300 on its line of credit during the quarter ended September 30, 2009 (see Note 5).

NOTE 3 - Common Stock

In February 2007 the Company issued 8,000,000 shares of common stock at $.0001 per share to the Founders of the Company for $800.

In February 2008 the Company sold 2,800,000 shares of common stock at $.025 per share pursuant to its public offering. The Company received net proceeds of $44,964.

In February 2008 the Company issued 100,000 shares of common stock valued at $.06 per share for services rendered. The Company recorded stock based compensation expense of $6,000 in connection with this issuance.

NOTE 4 - Preferred Stock

The Company’s Board of Directors may, without further action by the Company’s stockholders, from time to time, direct the issuance of any authorized but unissued or unreserved shares of preferred stock in series and at the time of issuance, determine the rights, preferences and limitations of each series. The holders of preferred stock may be entitled to receive a preference payment in the event of any liquidation, dissolution or winding-up of the Company before any payment is made to the holders of the common stock. Furthermore, the board of directors could issue preferred stock with voting and other rights that could adversely affect the voting power of the holders of the common stock.

NOTE 5 - Subsequent Events

During November 2009, the holder of the Company's promissory note in connection with its line of credit, extended the due date of the Note until October 5, 2011. The note continues to bear interest at the rate of 8% per annum (see Note 2).

Item 2. Management’s Discussion and Analysis or Plan of Operations.

As used in this Form 10-Q, references to the “Mustang,” Company,” “we,” “our” or “us” refer to Mustang Alliances, Inc. unless the context otherwise indicates.

Forward-Looking Statements

The following discussion should be read in conjunction with our financial statements, which are included elsewhere in this Form 10-Q (the “Report”). This Report contains forward-looking statements which relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as “may,” “should,” “expects,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential” or “continue” or the negative of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties, and other factors that may cause our or our industry’s actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements.

For a description of such risks and uncertainties refer to our Annual Report on Form 10-K, filed with the Securities and Exchange Commission on March 30, 2009. While these forward-looking statements, and any assumptions upon which they are based, are made in good faith and reflect our current judgment regarding the direction of our business, actual results will almost always vary, sometimes materially, from any estimates, predictions, projections, assumptions or other future performance suggested herein. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results.

Business Overview

Mustang Alliances, Inc. was incorporated on February 22, 2007, in the State of Nevada. The Company was focused on the business of marketing and selling anti-lock braking systems produced in China to the auto parts and auto manufacturing market of the United States. Due to the state of the economy, the Company has conducted virtually no business other than organizational matters, filing its Registration Statement and filings of periodic reports with the SEC. Due to the downturn in new car sales and the worsening economic conditions world wide, the Company has had difficulties in effectuating its business plan. These difficulties include an inability to raise cash, a difficulty solidifying a manufacturing deal in China and a decrease in new car sales. The Company has since abandoned its business plan and is now seeking an operating company with which to merge or to acquire. Therefore, the Company is considered a blank check company for purposes of this report. As defined in Section 7(b)(3) of the Securities Act of 1933, as amended, a blank check company is a development stage company that has no specific business plan or purpose or has indicated that its business plan is to engage in a merger or an acquisition with an unidentified company or companies and is issuing “penny stock” securities as defined in Rule 3(a)(51) of the Securities Exchange Act of 1934, as amended.

Mustang’s current business plan is to attempt to identify and negotiate with a business target for the merger of that entity with and into Mustang. In certain instances, a target company may wish to become a subsidiary of Mustang or may wish to contribute or sell assets to Mustang rather than to merge.

No assurances can be given that Mustang will be successful in identifying or negotiating with any target company. Mustang seeks to provide a method for a foreign or domestic private company to become a reporting or public company whose securities are qualified for trading in the United States secondary markets.

A business combination with a target company normally will involve the transfer to the target company of the majority of the issued and outstanding common stock of Mustang, and the substitution by the target company of its own management and board of directors. No assurances can be given that Mustang will be able to enter into a business combination, or, if Mustang does enter into such a business combination, no assurances can be given as to the terms of a business combination, or as to the nature of the target company.

Since its inception on February 22, 2007, Mustang has not engaged in any business operations other than organizational matters, filing its Registration Statement on Form SB-2 filed with the Securities and Exchange Commission, file number 333-148431 (the “Registration Statement”) and filings of periodic reports with the SEC pursuant to the reporting requirements of Securities Exchange Act of 1934, as amended. The current and proposed business activities described herein classify Mustang as a blank check company. The Securities and Exchange Commission and many states have enacted statutes, rules and regulations limiting the sale of securities of blank check companies.

Plan of Operation

General

During the next 12 months, the Company intends to seek, investigate and, if such investigation warrants, acquire an interest in one or more business opportunities presented to it by persons or firms who or which desire to seek the perceived advantages of a publicly held corporation. At this time, the Company has no plan, proposal, agreement, understanding or arrangement to acquire or merge with any specific business or company, and the Company has not identified any specific business or company for investigation and evaluation. No member of Management or promotor of the Company has had any material discussions with any other company with respect to any acquisition of that company.

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. The discussion of the proposed plan of operation under this caption and throughout this Quarterly Report 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.

The Company intends to obtain funds in one or more private placements to finance the operation of any acquired business. Persons purchasing securities in these placements and other shareholders will likely not have the opportunity to participate in the decision relating to any acquisition. The Company’s proposed business is sometimes referred to as a “blind pool” because any investors will entrust their investment monies to the Company’s management before they have a chance to analyze any ultimate use to which their money may be put. Consequently, the Company’s potential success is heavily dependent on the Company’s management, which will have virtually unlimited discretion in searching for and entering into a business opportunity. None of the officers and directors of the Company has had any experience in the proposed business of the Company. There can be no assurance that the Company will be able to raise any funds in private placements. In any private placement, management may purchase shares on the same terms as offered in the private placement.

Management anticipates that it will only participate in one potential business venture. This lack of diversification should be considered a substantial risk in investing in 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 a firm which only recently commenced operations, or a developing company in need of additional funds for expansion into new products or markets, or seeking to develop a new product or service, or an established business which may be experiencing financial or operating difficulties and is in the need for additional capital which is perceived to be easier to raise by a public company. In some instances, a business opportunity may involve the acquisition or merger with a corporation which does not need substantial additional cash but which desires to establish a public trading market for its common stock. The Company may purchase assets and establish wholly owned subsidiaries in various business or purchase existing businesses as subsidiaries.

The Company anticipates that the selection of a business opportunity in which to participate will be complex and extremely risky. Because of general economic conditions, rapid technological advances being made in some industries, and shortages of available capital, management believes that there are numerous firms seeking the benefits of a publicly traded corporation. Such perceived benefits of a publicly traded corporation may include facilitating or improving the terms on which additional equity financing may be sought, providing liquidity for the principals of a business, creating a means for providing incentive stock options or similar benefits to key employees, providing liquidity (subject to restrictions of applicable statutes) for all shareholders, and other factors. Potentially available business opportunities may occur in many different industries and at various stages of development, all of which will make the task of comparative investigation and analysis of such business opportunities extremely difficult and complex.

As part of any transaction, the acquired company may require that management or other stockholders of the Company sell all or a portion of their shares to the acquired company, or to the principals of the acquired company. It is anticipated that the sales price of such shares will be lower than the current market price or anticipated market price of the Company’s common stock. The Company’s funds are not expected to be used for purposes of any stock purchase from insiders. The Company shareholders will not be provided the opportunity to approve or consent to such sale. The opportunity to sell all or a portion of their shares in connection with an acquisition may influence management’s decision to enter into a specific transaction. However, management believes that since the anticipated sales price will be less than market value, that the potential of a stock sale by management will be a material factor on their decision to enter a specific transaction.

The above description of potential sales of management stock is not based upon any corporate bylaw, shareholder or board resolution, or contract or agreement. No other payments of cash or property are expected to be received by Management in connection with any acquisition.

The Company has not formulated any policy regarding the use of consultants or outside advisors, but does not anticipate that it will use the services of such persons.

The Company has, and will continue to have, insufficient capital with which to provide the owners of business opportunities with any significant cash or other assets. However, management believes the Company will offer owners of business opportunities the opportunity to acquire a controlling ownership interest in a public company at substantially less cost than is required to conduct an initial public offering. The owners of the business opportunities will, however, incur significant post-merger or acquisition registration costs in the event they wish to register a portion of their shares for subsequent sale. The Company will also incur significant legal and accounting costs in connection with the acquisition of a business opportunity including the costs of preparing post-effective amendments, Forms 8-K, agreements and related reports and documents nevertheless, the officers and directors of the Company have not conducted market research and are not aware of statistical data which would support the perceived benefits of a merger or acquisition transaction for the owners of a business opportunity. The Company does not intend to make any loans to any prospective merger or acquisition candidates or to unaffiliated third parties.

Sources of Opportunities

The Company anticipates that business opportunities for possible acquisition will be referred by various sources, including its officers and directors, professional advisers, securities broker-dealers, venture capitalists, members of the financial community, and others who may present unsolicited proposals.

The Company will seek a potential business opportunity from all known sources, but will rely principally on personal contacts of its officers and directors as well as indirect associations between them and other business and professional people. It is not presently anticipated that the Company will engage professional firms specializing in business acquisitions or reorganizations.

The officers and directors of the Company are currently employed in other positions and will devote only a portion of their time (not more than three hours per week) to the business affairs of the Company, until such time as an acquisition has been determined to be highly favorable, at which time they expect to spend full time in investigating and closing any acquisition for a period of two weeks. In addition, in the face of competing demands for their time, the officers and directors may grant priority to their full-time positions rather than to the Company.

Evaluation of Opportunities

The analysis of new business opportunities will be undertaken by or under the supervision of the officers and directors of the Company. Management intends to concentrate on identifying prospective business opportunities which may be brought to its attention through present associations with management. In analyzing prospective business opportunities, management will consider such matters as the available technical, financial and managerial resources; working capital and other financial requirements; history of operation, if any; prospects for the future; present and expected competition; the quality and experience of management services which may be available and the depth of that management; the potential for further research, development or exploration; specific risk factors not now foreseeable but which then may be anticipated to impact the proposed activities of the Company; the potential for growth or expansion; the potential for profit; the perceived public recognition or acceptance of products, services or trades; name identification; and other relevant factors. Officers and directors of the Company will meet personally with management and key personnel of the firm sponsoring the business opportunity as part of their investigation. To the extent possible, the Company intends to utilize written reports and personal investigation to evaluate the above factors. The Company will not acquire or merge with any company for which audited financial statements cannot be obtained.

The Company will not restrict its search for any specific kind of business, but may acquire a venture which is in its preliminary or development stage, which is already in operation, or in essentially any stage of its corporate life. It is currently impossible to predict the status of any business in which the Company may become engaged, in that such business may need additional capital, may merely desire to have its shares publicly traded, or may seek other perceived advantages which the Company may offer.

Acquisition of Opportunities

In implementing a structure for a particular business acquisition, the Company may become a party to a merger, consolidation, reorganization, joint venture, franchise or licensing agreement with another corporation or entity. It may also purchase stock or assets of an existing business. On the consummation of a transaction, it is possible that the present management and shareholders of the Company will not be in control of the Company. In addition, a majority or all of the Company’s officers and directors may, as part of the terms of the acquisition transaction, resign and be replaced by new officers and directors without a vote of the Company’s shareholders.

It is anticipated that any securities issued in any such reorganization would be issued in reliance on exemptions from registration under applicable Federal and state securities laws. In some circumstances, however, as a negotiated element of this transaction, the Company may agree to register such securities either at the time the transaction is consummated, under certain conditions, or at a specified time thereafter. The issuance of substantial additional securities and their potential sale into any trading market which may develop in the Company’s common stock may have a depressive effect on such market. While the actual terms of a transaction to which the Company may be a party cannot be predicted, it may be expected that the parties to the business transaction will find it desirable to avoid the creation of a taxable event and thereby structure the acquisition in a so called “tax free” reorganization under Sections 368(a)(1) or 351 of the Internal Revenue Code of 1986, as amended (the “Code”). In order to obtain tax free treatment under the Code, it may be necessary for the owners of the acquired business to own 80% or more of the voting stock of the surviving entity. In such event, the shareholders of the Company, including investors in this offering, would retain less than 20% of the issued and outstanding shares of the surviving entity, which could result in significant dilution in the equity of such shareholders.

As part of the Company’s investigation, officers and directors of the Company will meet personally with management and key personnel, may visit and inspect material facilities, obtain independent analysis or verification of certain information provided, check references of management and key personnel, and take other reasonable investigative measures, to the extent of the Company’s limited financial resources and management expertise.

The manner in which each Company participates in an opportunity will depend on the nature of the opportunity, the respective needs and desires of the Company and other parties, the management of the opportunity, and the relative negotiating strength of the Company and such other management.

With respect to any mergers or acquisitions, negotiations with target company management will be expected to focus on the percentage of the Company which target company shareholders would acquire in exchange for their shareholdings in the target company. Depending upon, among other things, the target company’s assets and liabilities, the Company’s shareholders will in all likelihood hold a lesser percentage ownership interest in the Company following any merger or acquisition. The percentage ownership may be subject to significant reduction in the event the Company acquires a target company with substantial assets. Any merger or acquisition effected by the Company can be expected to have a significant dilutive effect on the percentage of shares held by the Company’s then shareholders, including purchasers in this offering.

The Company will not have sufficient funds (unless it is able to raise funds in a private placement) to undertake any significant development, marketing and manufacturing of any products which may be acquired.

Accordingly, following the acquisition of any such product, the Company will, in all likelihood, be required to either seek debt or equity financing or obtain funding from third parties, in exchange for which the Company would probably be required to give up a substantial portion of its interest in any acquired product. There is no assurance that the Company will be able either to obtain additional financing or interest third parties in providing funding for the further development, marketing and manufacturing of any products acquired.

It is anticipated that the investigation of specific business opportunities and the negotiation, drafting and execution of relevant agreements, disclosure documents and other instruments will require substantial management time and attention and substantial costs for accountants, attorneys and others. If a decision is made not to participate in a specific business opportunity the costs therefore incurred in the related investigation would not be recoverable.

Furthermore, even if an agreement is reached for the participation in a specific business opportunity, the failure to consummate that transaction may result in the loss to the Company of the related costs incurred. Management believes that the Company may be able to benefit from the use of “leverage” in the acquisition of a business opportunity. Leveraging a transaction involves the acquisition of a business through incurring significant indebtedness for a large percentage of the purchase price for that business.

Through a leveraged transaction, the Company would be required to use less of its available funds for acquiring the business opportunity and, therefore, could commit those funds to the operations of the business opportunity, to acquisition of other business opportunities or to other activities. The borrowing involved in a leveraged transaction will ordinarily be secured by the assets of the business opportunity to be acquired. If the business opportunity acquired is not able to generate sufficient revenues to make payments on the debt incurred by the Company to acquire that business opportunity, the lender would be able to exercise the remedies provided by law or by contract. These leveraging techniques, while reducing the amount of funds that the Company must commit to acquiring a business opportunity, may correspondingly increase the risk of loss to the Company. No assurance can be given as to the terms or the availability of financing for any acquisition by the Company. No assurance can be given as to the terms or the availability of financing for any acquisition by the Company. During periods when interest rates are relatively high, the benefits of leveraging are not as great as during periods of lower interest rates because the investment in the business opportunity held on a leveraged basis will only be profitable if it generates sufficient revenues to cover the related debt and other costs of the financing. Lenders from which the Company may obtain funds for purposes of a leveraged buy-out may impose restrictions on the future borrowing, distribution, and operating policies of the Company. It is not possible at this time to predict the restrictions, if any, which lenders may impose or the impact thereof on the Company.

Results of Operations For the nine months ended September 30, 2009 compared to the nine months ended September 30, 2008

The following discussion should be read in conjunction with the condensed financial statements and in conjunction with the Company's Form 10-K filed on March 30, 2009, as amended. Results for interim periods may not be indicative of results for the full year.

Revenues

The Company did not generate any revenues for the three (3) months ended September 30, 2009 and 2008. We are not expecting to generate any revenues in the future.

During the nine (9) months ended September 30, 2009 and 2008, total operating expenses were $19,940 and $76,526, respectively, which were primarily the result of professional fees associated with fulfilling the Company’s SEC reporting requirements and consulting fees.

Net loss

During the nine (9) months ended September 30, 2009 and 2008, the net loss was 22,805 and $78,926, respectively.

Liquidity and Capital Resources

As of September 30, 2009, the Company had cash in the amount of $594.

The focus of Mustang’s efforts is to acquire or develop an operating business. Despite no active operations at this time, management intends to continue in business and has no intention to liquidate the Company. Mustang has considered various business alternatives including the possible acquisition of an existing business, but to date has found possible opportunities unsuitable or excessively priced. Mustang does not contemplate limiting the scope of its search to any particular industry. Management has considered the risk of possible opportunities as well as their potential rewards. Management has invested time evaluating several proposals for possible acquisition or combination; however, none of these opportunities were pursued. Mustang presently owns no real property and at this time has no intention of acquiring any such property. Mustang’s sole expected expenses are comprised of professional fees primarily incident to its reporting requirements.

The accompanying financial statements have been prepared assuming Mustang will continue as a going concern. Mustang’s recurring losses from operations, stockholders’ deficiency and working capital deficiency, and lack of revenue generating operations, raise substantial doubt about the Company’s ability to continue as a going concern.

Management believes Mustang will continue to incur losses and negative cash flows from operating activities for the foreseeable future and will need additional equity or debt financing to sustain its operations until it can achieve profitability and positive cash flows, if ever. Management plans to seek additional debt and/or equity financing for Mustang, but cannot assure that such financing will be available on acceptable terms.

The accompanying financial statements do not include any adjustments that might result from the outcome of this uncertainty. There can be no assurance that management will be successful in implementing its business plan or that the successful implementation of such business plan will actually improve the Company’s operating results.

Going Concern Consideration

There can be no assurance that sufficient funds will be generated during the next three months or thereafter from operations or that funds will be available from external sources such as debt or equity financings or other potential sources. The lack of additional capital could force the Company to curtail or cease operations and would, therefore, have a material adverse effect on its business. Furthermore, there can be no assurance that any such required funds, if available, will be available on attractive terms or that they will not have a significant dilutive effect on the Company's existing stockholders.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements.

Item 3.Quantitative and Qualitative Disclosures About Market Risk.

A smaller reporting company, as defined by Item 10 of Regulation S-K, is not required to provide the information required by this item.

Item 4(T). Controls and Procedures.

Disclosure Controls and Procedures

Our disclosure controls and procedures are designed to ensure that information required to be disclosed in reports that we file or submit under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the United States Securities and Exchange Commission. Our principal executive officer and principal financial and accounting officer have reviewed the effectiveness of our “disclosure controls and procedures” (as defined in the Securities Exchange Act of 1934 Rules 13(a)-15(e) and 15(d)-15(e)) within the end of the period covered by this Quarterly Report on Form 10-Q and have concluded that the disclosure controls and procedures are effective to ensure that material information relating to the Company is recorded, processed, summarized, and reported in a timely manner. There were no significant changes in our internal controls or in other factors that could significantly affect these controls subsequent to the last day they were evaluated by our principal executive officer and principal financial and accounting officer.

Changes in Internal Controls over Financial Reporting

There have been no changes in the Company's internal control over financial reporting during the last quarterly period covered by this report that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.

PART II

OTHER INFORMATION

Item 1. Legal Proceedings.

There are no pending legal proceedings to which the Company is a party or in which any director, officer or affiliate of the Company, any owner of record or beneficially of more than 5% of any class of voting securities of the Company, or security holder is a party adverse to the Company or has a material interest adverse to the Company. The Company’s property is not the subject of any pending legal proceedings.

Item 1A. Risk Factors

A smaller reporting company, as defined by Item 10 of Regulation S-K, is not required to provide the information required by this item.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

Unregistered Sales of Equity Securities

None.

Purchases of equity securities by the issuer and affiliated purchasers

None.

Use of Proceeds

None

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Submission of Matters to a Vote of Security Holders.

There was no matter submitted to a vote of security holders during the fiscal quarter ended September 30, 2009.

Item 5. Other Information.

On November 9, 2009, the Company entered into Amended and Restated Promissory Note with First Line Capital LLC (the “Note”), which amends and replaces the previous Promissory Note dated October 9, 2007 in its entirety. The Note provides that until the second anniversary of the date of the Note, upon at least two (2) business days' prior written notice to the holder, the Company may borrow from the holder, from time to time, any amount in increments of up to $50,000; provided, however, that the aggregate principal amount outstanding under the Note shall not exceed $200,000 at any given time. The note bears an interest rate of 8% per annum, beginning on the date of the Note until the Note is paid in full. The principal amount of the Note and all accrued and unpaid interest is due and payable on October 5, 2011.

Item 6. Exhibits

Exhibit No.		Description
4.2		Amended and Restated Promissory Note, dated November 9, 2009, made by Mustang Alliances, Inc. in favor of First Line Capital LLC.
31.1		Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1		Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

SIGNATURES

In accordance with to requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	MUSTANG ALLIANCES, INC.

Dated: November 13, 2009	By:	/s/Joseph Levi
		Name: Joseph Levi
		Title: President, Chief Executive Officer, Treasurer and Director (Principal Executive, Financial and Accounting Officer)

In accordance with the Exchange Act, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.


Dated: November 13, 2009	By:	/s/ Joseph Levi
		Name: Joseph Levi
		Title: President, Chief Executive Officer,Treasurer and Director (Principal Executive, Financial and Accounting Officer)


Dated: November 13, 2009	By:	/s/ Eliezer Oppenheimer
		Name: Eliezer Oppenheimer
		Titl:e Secretary and Director

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