Attached files
file | filename |
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EX-23.1 - Stalar 1, Inc. | v211730_ex23-1.htm |
EX-31.2 - Stalar 1, Inc. | v211730_ex31-2.htm |
EX-32.1 - Stalar 1, Inc. | v211730_ex32-1.htm |
EX-31.1 - Stalar 1, Inc. | v211730_ex31-1.htm |
SECURITIES
AND EXCHANGE COMMISSION
Washington, D.C.
20549
Form
10-K/A
Amendment
No. 1
þ Annual Report under
Section 13 or 15(d) of the Securities Exchange Act of 1934
For the
fiscal year ended September 30, 2010
Or
¨
Transitional Report under Section 13 or 15(d) of the Securities Exchange Act of
1934
000-52971
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Commission file number
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Stalar 1, Inc.
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(Name of Small Business Issuer in its charter)
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Delaware
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26-1402640
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(State or other jurisdiction of
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(I.R.S. Employer
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incorporation or organization)
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Identification No.)
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317 Madison Avenue, Suite 1520
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New York, New York
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10017
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(Address of principal executive offices)
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(Zip Code)
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Issuer's
telephone number: (212) 953-1544
Securities
registered under Section 12(b) of the Act: None
Securities
registered under Section 12(g) of the Act:
Common Stock, $0.0001 Par
Value
(Title of
Class)
Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in
rule 405 of the Securities Act. YES ¨ NO þ
Indicate
by check mark if the registrant is not required to file reports pursuant to
Section 13 or 15(d) of the Exchange Act. ¨
Check
whether the issuer (1) has filed all reports required to be filed by Section 13
or 15(d) of the Securities Exchange Act of 1934during 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 þ NO ¨
Indicate
by check mark whether the registrant has submitted electronically and posted on
its corporate website, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this
chapter) during the preceding 12 months (or for such shorter period that the
registrant was required to submit and post such files). YES ¨ NO þ
Indicate
by check mark if disclosure of delinquent filers pursuant to Item 405 of
Regulation S-K (§ 229.405 of this chapter) is not contained herein, and will not
be contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this form 10-K
or any amendment to this Form 10-K. þ
Indicate
by checkmark whether the registrant is a large accelerated filer, an accelerated
filer, a non-accelerated filer, or a smaller reporting company.
þ 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 þ No ¨
Stalar 1,
Inc. had no revenues during its third fiscal year ending September 30,
2010.
The
aggregate market value of the Common Stock held by non-affiliates of Stalar 1,
Inc. was $1,780.00 on September 30, 2010.
As of
December 27, 2010, 2,044,500 shares of the Common Stock of Stalar 1, Inc. were
issued and outstanding and no shares of the Preferred Stock of Stalar 1, Inc.
were issued or outstanding.
TABLE OF
CONTENTS
Page
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||||
Item
8.
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Financial
Statements and Supplementary Data
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3
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Item
9A(T).
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Controls
and Procedures
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3
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PART
IV
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||||
Item
15.
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Exhibits,
Financial Statement Schedules
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4
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EXPLANATORY
NOTE
Stalar 1,
Inc. (the “Company”) is filing this Amendment No. 1 on Form 10-K/A (this
“Amendment”) with the Securities and Exchange Commission (the “SEC”) to amend
its Annual Report on Form 10-K for the fiscal year ended September 30, 2010
as filed with the SEC on December 28, 2010 (the “Original Report”). This
Amendment amends and restates Item 9A. Controls and
Procedures. This Amendment is being filed to enhance the Company’s
disclosures under the above-referenced items in response to comments from the
staff of the SEC given in connection with its review of the Company’s recent
filings under the Securities Exchange Act of 1934.
Except as
described above, the Original Report has not been amended, updated or otherwise
modified. The Original Report, as amended by this Amendment, continues to speak
as of the date of the Original Report and does not reflect events occurring
after the filing of the Original Report or update or otherwise modify any
related or other disclosures, including forward-looking statements. Accordingly,
this Amendment should be read in conjunction with the Company’s other filings
made with the SEC subsequent to the filing of the Original
Report.
2
ITEM
8. FINANCIAL STATEMENTS.
See the
financial statements annexed to this annual report.
ITEM
9A(T). CONTROLS AND PROCEDURES.
Evaluation
of Disclosure Controls and Procedures
Our
Principal Executive Officer conducted an evaluation of the effectiveness of the
design and operation of our disclosure controls and procedures, as defined in
Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as
amended (“Exchange Act”). Disclosure controls and procedures are those controls
and procedures designed to provide reasonable assurance that the information
required to be disclosed in our Exchange Act filings is (1) recorded, processed,
summarized and reported within the time periods specified in the Securities and
Exchange Commission’s rules and forms, and (2) accumulated and communicated to
management as appropriate, to allow timely decisions regarding required
disclosure.
Our
original Form 10-K did not include management’s report on internal controls over
financial reporting which is a required item pursuant to Regulation S-K. Because
of this omission, our Principal Executive Officer has reevaluated the
effectiveness of the design and operation of our disclosure controls and
procedures and concluded that, as of September 30, 2010, our disclosure controls
and procedures were not effective in providing a reasonable level of assurance
that the information required to be disclosed in our Exchange Act filings is
recorded, processed, summarized and reported within the time periods specified
in the Commission’s rules and forms. The following material weakness in our
disclosure controls and procedures as of September 30, 2010 was
identified:
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·
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As
a shell company with no operations or investments, we do not have any
full-time employees. Our single officer devoted time to our affairs on an
“as needed” basis. As a result, our ability to coordinate, review timely
and file financial reports may not have been
adequate.
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A
material weakness is a control deficiency, or combination of control
deficiencies, that results in a reasonable possibility that a material
misstatement of the Company’s annual or interim financial statements would not
be prevented or detected on a timely basis by the Company’s internal
controls.
Remediation
of Material Weakness
A number
of actions are currently being undertaken to remediate the material weakness
noted above. We will immediately appoint an additional officer and director,
increasing the number of officers from one single individual who served as both
the single officer and director to two officers and two directors. We also
intend to establish a Disclosure Committee, chaired by our Principal Executive
Officer, comprised of individuals experienced in the disclosure obligations of
public companies that will be available on an as-needed basis and also meet
regularly and advise the Principal Executive Officer with respect to the
Company’s disclosure obligations.
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)
promulgated under the Exchange Act. Those rules define internal control over
financial reporting as 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 generally accepted
accounting principles and includes those policies and procedures that: (i)
pertain to the maintenance of records that, in reasonable detail, accurately and
fairly reflect our transactions and dispositions of our assets; (ii) provide
reasonable assurance that transactions are recorded as necessary to permit
preparation of financial statements in accordance with generally accepted
accounting principles, and that out receipts and expenditures are being made
only in accordance with authorizations of our management and directors; and
(iii) provide reasonable assurance regarding prevention or timely detection
of unauthorized acquisitions, use or disposition of our assets that could have a
material effect on our financial statements.
Because
of its inherent limitations, internal controls over financial reporting may not
prevent or detect misstatements. Projections of any evaluation of effectiveness
to future periods are subject to the risk that controls may become inadequate
because of changes in conditions, or that the degree of compliance with the
policies or procedures may deteriorate.
Management
assessed the effectiveness of our internal control over financial reporting as
of September 30, 2010 based on the criteria for effective internal control over
financial reporting established in Internal Control—Integrated Framework issued
by the Committee on Sponsoring Organizations of the Treadway Commission and SEC
guidance on conducting such assessments. Our assessment included consideration
of the material weakness identified in the disclosure controls above and we
concluded that the weakness identified above did not impact
reliability of financial reporting and the preparation of financial statements
for external purposes in accordance with generally accepted accounting
principles when also considering our limited size and complexity. However, based
on our assessment, management concluded that during the period covered by this
report, such internal controls and procedures were not effective as a result of
a significant deficiency. This was due to deficiencies that existed in the
design or operation of our internal control or reporting that adversely affected
our internal controls, in that we only have one employee to oversee bank
reconciliations, posting payables and other financial accounting tasks and that
taken together may be considered a significant deficiency.
3
Remediation
of Material Weakness
The
Company will have its financial accounting reviewed on a monthly basis by an
independent certified public accountant who acts as a consultant to the
Company.
Our
annual report does not include an attestation report of our registered public
accounting firm regarding internal control over financial reporting.
Management's report was not subject to attestation by our registered public
accounting firm pursuant to rules of the Securities and Exchange Commission that
permit us to provide only management's report in this annual
report.
During
the most recently completed fiscal quarter, there has been no change in our
internal control over financial reporting that has materially affected or is
reasonably likely to have a materially affect, our internal control over
financial reporting.
PART
IV
ITEM
15. EXHIBITS, FINANCIALS STATEMENTS, FINANCIAL STATEMENT SCHEDULES.
(a)(1)
FINANCIAL STATEMENTS. The following financial statements are included in this
report:
Title
of Document
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Page
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Report
of Independent Registered Public Accounting Firm
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F-1
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Balance
Sheets
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F-2
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Statements
of Operations
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F-3
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Statements
of Cash Flows
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F-4
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Statement
of Changes in Stockholders' Deficit
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F-5
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Notes
to Financial Statements
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F-6
to F-9
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(a)(2)
FINANCIAL STATEMENT SCHEDULES. The following financial statement schedules are
included as part of this report: None.
(a)(3)
EXHIBITS. The following exhibits are included as part of this
report:
Exhibit
Number
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Title of Document
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3.1
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Articles
of Incorporation (1)
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3.1(i)
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Certificate
of Correction to Certificate of Incorporation(1)
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3.2
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Bylaws
(1)
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14.1
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Code
of Ethics (2)
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23.1
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Consent
of MSCM LLP
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31.1
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Certification of Chief Executive
Officer pursuant to Securities Exchange Act Rule 13a-14(a)/15d-14(a), as
adopted pursuant to Section 302 of the Sarbanes-Oxley Act of
2002
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31.2
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Certification of Chief Financial
Officer pursuant to Securities Exchange Act Rule 13a-14(a)/15d-14(a), as
adopted pursuant to Section 302 of the Sarbanes-Oxley Act of
2002
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32.1
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Certification of Chief Executive
Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002
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(1)
Incorporated by reference from the Company's registration statement on Form
10-SB filed on December 12, 2007.
(2)
Incorporated by reference from the Company's Quarterly Report on Form 10-Q filed
on May 7, 2009.
4
SIGNATURES
Pursuant
to the requirements of Section 13 or 15(d) 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.
STALAR 1, INC. | |||
Dated: February
14, 2011
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By
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/s/Steven R. Fox
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Steven
R. Fox, President
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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.
By
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/s/Steven R. Fox
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Steven
R. Fox
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CEO,
CFO, President and Secretary
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Dated:
February 14, 2011
5
STALAR 1,
INC.
(A
Development Stage Company)
INDEX TO
FINANCIAL STATEMENTS
PERIOD
FROM NOVEMBER 13, 2007 (Inception) TO SEPTEMBER 30, 2010
Page
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No.
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FINANCIAL
STATEMENTS
|
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Report
of Independent Registered Public Accounting Firm
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F-1
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Balance
Sheets
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F-2
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Statements
of Operations
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F-3
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Statements
of Cash Flows
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F-4
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Statement
of Changes in Stockholders’ Deficit
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F-5
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Notes
to Financial Statements
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F-6—F-9
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701 Evans Avenue
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telephone:
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(416) 626-6000
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|||
8th Floor
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facsimile:
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(416) 626-8650
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|||
Toronto, Ontario Canada
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email:
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info@mscm.ca
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|||
M9C 1A3
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website:
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www.mscm.ca
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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING
FIRM
To the
Board of Directors and Stockholders of
Stalar 1,
Inc. (A Development Stage Company)
We have
audited the accompanying balance sheets of Stalar 1, Inc. as of September 30,
2010 and 2009 and the related statements of operations, changes in stockholders’
deficit and cash flows for the years then ended and for the period from November
13, 2007 (Inception) to September 30, 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 audits.
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 also includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, 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 Stalar 1, Inc. as of September 30,
2010 and 2009, and the results of its operations and its cash flows for the
years then ended and for the period from November 13, 2007 (Inception) to
September 30, 2010 in conformity with accounting principles generally accepted
in the United States of America.
The
accompanying financial statements have been prepared assuming that the Company
will continue as a going concern. As discussed in Note A to the
financial statements, the Company has never generated revenue and is unlikely to
generate earnings in the immediate or foreseeable future. These
conditions raise substantial doubt as to the ability of the Company to continue
as a going concern. Managements’ plans in regards to these matters
are described in Note A. These financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
/s/
MSCM LLP
Toronto,
Ontario
December
15, 2010
F-1
STALAR 1,
INC.
(A
Development Stage Company)
BALANCE
SHEETS
SEPTEMBER
30, 2010 AND 2009
2010
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2009
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|||||||
ASSETS
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||||||||
Current
assets
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||||||||
Cash
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$ | 1,406 | $ | 45 | ||||
LIABILITIES AND STOCKHOLDERS’
DEFICIT
|
||||||||
Current
liabilities
|
||||||||
Accounts
payable and accrued expenses
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$ | 11,568 | $ | 10,159 | ||||
Loan
payable – Officer
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46,856 | 33,118 | ||||||
Total
current liabilities
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58,424 | 43,277 | ||||||
Stockholders’
deficit
|
||||||||
Preferred
stock - $0.0001 par value; 25,000,000 shares authorized; none issued
or outstanding
|
- | - | ||||||
Common
stock - $0.0001 par value; 75,000,000 shares authorized; 2,044,500
and 2,035,000 issued and outstanding, respectively
|
205 | 204 | ||||||
Additional
paid-in capital
|
1,775 | 1,396 | ||||||
Deficit
accumulated during the development stage
|
58,998 | (44,832 | ) | |||||
Total
stockholders’ deficit
|
57,018 | (43,232 | ) | |||||
$ | 1,406 | $ | 45 |
The
accompanying notes are an integral part of these financial
statements.
F-2
STALAR 1,
INC.
(A
Development Stage Company)
STATEMENTS
OF OPERATIONS
November 13, 2007
|
||||||||||||
Year Ended
|
Year Ended
|
(Inception) to
|
||||||||||
September 30, 2010
|
September 30, 2009
|
September 30, 2010
|
||||||||||
Revenues
|
$ | - | $ | - | $ | - | ||||||
General
and administrative expenses
|
||||||||||||
Professional
fees
|
13,098 | 18,936 | 41,068 | |||||||||
Organization
costs
|
- | - | 14,868 | |||||||||
Interest
expense
|
1,068 | 1,111 | 2,179 | |||||||||
Sundry
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- | 356 | 883 | |||||||||
14,166 | 20,403 | 58,998 | ||||||||||
Net
loss
|
$ | (14,166 | ) | $ | (20,403 | ) | $ | (58,998 | ) | |||
Loss
per common share:
|
||||||||||||
basic
and diluted
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$ | (0.007 | ) | $ | (0.010 | ) | ||||||
Weighted
average number of common shares outstanding, basic and
diluted
|
2,042,001 | 2,032,479 |
The
accompanying notes are an integral part of these financial
statements.
F-3
STALAR 1,
INC.
(A
Development Stage Company)
STATEMENTS
OF CASH FLOWS
November 13, 2007
|
||||||||||||
Year Ended
|
Year Ended
|
(Inception) to
|
||||||||||
September 30, 2010
|
September 30, 2009
|
September 30, 2009
|
||||||||||
Cash
flows from operating activities:
|
||||||||||||
Net
loss
|
$ | (14,166 | ) | $ | (20,403 | ) | $ | (58,998 | ) | |||
Adjustments
to reconcile net loss to net cash used in operating
activities:
|
||||||||||||
Common
stock issued for services
|
380 | 400 | 780 | |||||||||
Increases
in cash flows from operating activities resulting from changes
in:
|
||||||||||||
Accounts
payable and accrued expenses
|
1,409 | 7,997 | 11,568 | |||||||||
Net
cash used in operating activities
|
(12,377 | ) | (12,006 | ) | (46,650 | ) | ||||||
Cash
flows from financing activities:
|
||||||||||||
Proceeds
from issuance of Common Stock
|
- | - | 1,200 | |||||||||
Loans
from Officer
|
13,738 | 10,743 | 46,856 | |||||||||
Net
cash provided by financing activities
|
13,738 | 10,743 | 48,056 | |||||||||
Net
increase (decrease) in cash
|
1,361 | (1,263 | ) | 1,406 | ||||||||
Cash,
beginning of period
|
45 | 1,308 | - | |||||||||
Cash,
end of period
|
$ | 1,406 | $ | 45 | $ | 1,406 | ||||||
Supplemental
cash flow information:
|
||||||||||||
Non-cash
financing activities:
|
||||||||||||
Common
Stock issued for services
|
$ | 380 | $ | 400 | $ | 780 |
The
accompanying notes are an integral part of these financial
statements.
F-4
STALAR 1,
INC.
(A
Development Stage Company)
STATEMENT
OF CHANGES IN STOCKHOLDERS’ DEFICIT
Deficit
|
||||||||||||||||||||
Accumulated
|
||||||||||||||||||||
Additional
|
During
|
|||||||||||||||||||
Paid-in
|
Development
|
|||||||||||||||||||
Shares
|
Amount
|
Capital
|
Stage
|
Total
|
||||||||||||||||
Shares
issued at inception, November 13, 2007
|
$ | - | $ | - | $ | - | $ | - | $ | - | ||||||||||
Shares
issued for cash, at par $0.0001
|
2,000,000 | 200 | - | - | 200 | |||||||||||||||
Shares
issued for cash, at $0.04 per share
|
25,000 | 3 | 997 | - | 1,000 | |||||||||||||||
Net
loss for the period
|
- | - | - | (24,429 | ) | (24,429 | ) | |||||||||||||
Balance,
September 30, 2008
|
2,025,000 | 203 | 997 | (24,429 | ) | (23,229 | ) | |||||||||||||
Shares
issued for services, valued at $0.04 per share
|
10,000 | 1 | 399 | - | 400 | |||||||||||||||
Net
loss for the year
|
- | - | - | (20,403 | ) | (20,403 | ) | |||||||||||||
Balance,
September 30, 2009
|
2,035,000 | 204 | 1,396 | (44,832 | ) | (43,232 | ) | |||||||||||||
Shares
issued for services, valued at $.04 per share
|
9,500 | 1 | 379 | - | 380 | |||||||||||||||
Net
loss for the year
|
- | - | - | (14,166 | ) | (14,166 | ) | |||||||||||||
Balance,
September 30, 2010
|
2,044,500 | $ | 205 | $ | 1,775 | $ | (58,998 | ) | $ | (57,018 | ) |
The
accompanying notes are an integral part of these financial
statements.
F-5
STALAR 1,
INC.
(A
Development Stage Company)
NOTES TO
FINANCIAL STATEMENTS
SEPTEMBER
30, 2010
NOTE A – NATURE OF BUSINESS
AND BASIS OF PRESENTATION
Stalar 1,
Inc. (“the
Company”),
was incorporated in the State of Delaware on November 13, 2007. The
Company, which is in the development stage, is a “shell company”, because it has
no or nominal assets, other than cash, and no or nominal
operations. The Company was formed to pursue a business combination
with an operating private company, foreign or domestic, seeking to become a
reporting, “public” company. No assurances can be given that the
Company will be successful in locating or negotiating with any target
company. The Company has been engaged in organizational efforts,
obtaining initial financing and on November 2, 2010 entered into a Reverse
Merger and Financial Advisory Agreement, see Note H.
The
accompanying financial statements have been prepared in conformity with
generally accepted accounting principles in the United States of America, which
contemplate continuation of the Company as a going concern. The
Company, however, has minimal assets and working capital and lacks a sufficient
source of revenues, which raises substantial doubt about the Company’s ability
to continue as a going concern. The Company’s ability to continue as
a going concern and to realize its assets and to discharge its liabilities is
dependent upon the Company’s management to securing a business
combination. Management intends to fund working capital requirements
for the foreseeable future and believes that the current business plan if
successfully implemented may provide the opportunity for the Company to continue
as a going concern. The accompanying statements do not include any
adjustments that might result should the Company be unable to continue as a
going concern.
NOTE B – SUMMARY OF
SIGNIFICANT ACCOUNTING POLICIES
Estimates
The
preparation of financial statements in conformity with generally accepted
accounting principles in the United States of America 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.
Income
Taxes
Income
taxes are calculated using the asset and liability method, under which deferred
tax assets and liabilities are recorded based on the difference between the
financial statement and tax basis of assets and liabilities using enacted tax
rates in effect for the year in which the differences are expected to reverse.
In assessing the realizability of deferred tax assets, management considers
whether it is more likely than not that some portion or all of the deferred tax
assets will not be realized. The ultimate realization of deferred tax assets is
primarily dependent upon the generation of future taxable income during the
periods in which those temporary differences become deductible. In determining
the future tax consequences of events that have been recognized in the Company’s
financial statements or tax returns, judgment is required.
F-6
STALAR 1,
INC.
(A
Development Stage Company)
NOTES TO
FINANCIAL STATEMENTS
SEPTEMBER
30, 2010
(Continued)
NOTE B – SUMMARY OF
SIGNIFICANT ACCOUNTING POLICIES (continued)
Income taxes
(continued)
Interest
and penalties related to unrecognized tax benefits will be recognized in the
financial statements as a component of the income tax provision. Significant
judgment is required to evaluate uncertain tax positions. The Company will
evaluate its uncertain tax positions on a quarterly and annual basis. The
evaluations are based upon a number of factors, including changes in facts or
circumstances, changes in tax law, correspondence with tax authorities during
the course of audits and effective settlement of audit issues. Changes in the
recognition or measurement of uncertain tax positions could result in material
increases or decreases in the Company’s income tax expense in the period in
which the change is made.
Loss Per
Share
The
Company uses Statement of Financial Accounting Standards No. 128, “Earnings
Per Share”, which was primarily codified into Topic 260 “Earnings Per Share”,
for calculating the basic and diluted loss per share. The Company computes basic
loss per share by dividing net loss and net loss attributable to common
stockholders by the weighted average number of common shares outstanding.
Diluted loss per share is computed similar to basic loss per share except that
the denominator is increased to include the number of additional common shares
that would have been outstanding if the potential shares had been issued and if
the additional shares were dilutive. Common equivalent shares are excluded from
the computation of net loss per share if their effect is
anti-dilutive. The Company does not have any common stock
equivalents.
Fair Value
Measurements
Effective
January 1, 2008, the Company adopted Financial Accounting Standards Board
(“FASB”) Statement of Financial Accounting Standards (“SFAS”) No. 157, “Fair
Value Measurements”, which was primarily codified into Topic 820 “Fair Value
Measurements and Disclosures”, as amended. This standard defines fair
value, provides guidance for measuring fair value and requires certain
disclosures. The standard utilizes a fair value hierarchy which is
categorized into three levels based on the inputs to the valuation techniques
used to measure fair value. The standard does not require any new
fair value measurements, but discusses valuation techniques, such as the market
approach (comparable market prices), the income approach (present value of
future income or cash flows) and the cost approach (cost to replace the service
capacity of an asset or replacement cost).
Fair Value of Financial
Instruments
The
Company’s financial instruments consist of cash, accounts payable and accrued
expenses and loan payable-officer. The carrying value approximates
fair value due to the short maturity of these instruments.
NOTE C - PREFERRED
STOCK
The
Company’s Certificate of Incorporation authorizes the issuance of up to
25,000,000 shares of preferred stock. As of September 30, 2010 and 2009, there
was no preferred stock outstanding. The Board of Directors, without
the requirement of shareholder approval, can issue preferred shares with
dividend, preferences, liquidation, conversion, voting and other rights which
could adversely affect the voting power or other rights of the holders of common
stock.
F-7
STALAR 1,
INC.
(A
Development Stage Company)
NOTES TO
FINANCIAL STATEMENTS
SEPTEMBER
30, 2010
(Continued)
NOTE D –
INCOME TAXES
As of
September 30, 2010 there are loss carryforwards for Federal income tax purposes
of approximately $54,800, available to offset future taxable
income. The carryforwards begin to expire in 2028. The
Company does not expect to incur a Federal income tax liability in the
foreseeable future. As of September 30, 2010 and 2009 the Company had
a deferred tax asset amounting to approximately $19,200 and $11,300,
respectively. Realization of deferred tax assets is dependent on
future earnings, if any, the timing and amount of which is
uncertain. Accordingly, the deferred tax asset has been fully offset
by a valuation allowance of the same amount.
Certain
provisions of the tax law may limit net operating loss carryforwards available
for use in any given year in the event of a significant change in
ownership.
NOTE E – RECENT ACCOUNTING
PRONOUNCEMENTS
Recent
pronouncements issued by FASB or other authoritative standards groups with
future effective dates are either not applicable or are not expected to be
significant to the financial statements of the Company.
NOTE F - RELATED PARTY BALANCES AND
TRANSACTIONS
Equity
Transaction
In
November 2007, the Company issued 2,000,000 shares of common stock to the sole
officer and director for total proceeds of $200.
Loan Payable -
Officer
The
officer has advanced funds to the Company to cover cash
requirements. The loan is unsecured and is payable on demand with
interest at the prime rate.
NOTE G – EQUITY
TRANSACTIONS
During
the period from November 13, 2007 to September 30, 2008 the Company issued
25,000 shares of common stock to unrelated parties at $.04 per share, for total
cash proceeds of $1,000.
In
December 2008, the Company issued 10,000 shares of common stock for services,
valued at $.04 per share, for a total value of $400.
In
January 2010, the Company issued 9,500 shares of common stock for services,
valued at $.04 per share, for a total value of $380.
F-8
STALAR 1,
INC.
(A
Development Stage Company)
NOTES TO
FINANCIAL STATEMENTS
SEPTEMBER
30, 2010
(Continued)
NOTE H – SUBSEQUENT
EVENTS
On
November 2, 2010, the Company entered into a Reverse Merger and Financial
Advisory Agreement (the “Agreement”) Shenyang Yanshajing Building Material Co.
Ltd., (“Shenyang”.) Pursuant to the Agreement, Shenyang would either (i) effect
a merger with the Company, or (ii) effect a merger with another
entity. In consideration of either merger, the Company or its
designee, would receive fully-paid and non-assessable shares of the survivor of
the merger and warrants to purchase additional capital stock of the survivor of
the merger.
By letter
dated December 4, 2010, Shenyang notified the Company that it was
terminating the Agreement. In a letter dated December 6, 2010, The Company
responded that the Agreement did not provide a termination right to Shenyang. By
letter dated December 15, 2010 Shenyang’s counsel reiterated Shenyang’s
termination and disclaimed any liability to the Company. By letter dated
December 18, 2010, the Company reiterated its view that Shenyang lacked
authority to terminate the Agreement and alleged other breaches under the
Agreement. The outcome of this matter cannot be determined at this
time.
F-9