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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549


FORM 10-Q


x QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES AND EXCHANGE ACT OF 1934


For the quarterly period ended December 31, 2012


oTRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


For the transition period from                   to                 

Commission File Number 0-54360


WINDAUS GLOBAL ENERGY, INC.

(FORMERLY BLUESTAR ENTERTAINMENT TECHNOLOGIES, INC.)

 (Exact name of registrant as specified in its charter)


Wyoming

None

(State or other jurisdiction of incorporation or organization)

(I.R.S. Employer Identification Number)


205 Oakhill Drive, Brantford, Ontario, Canada                                                                                                N3T 5L7

(Address of principal executive offices)

 (Zip Code)


Registrant’s telephone number: (226) 706-9153


Indicate by check mark whether registrant (1) has filed all reports to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding  12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  o  Yes  x  No


Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§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).   xYes o No


Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer," and "smaller reporting company" in Rule 12b-2 of the Exchange Act (Check one):

 

Large accelerated filer

o

Accelerated filer

o

Non-accelerated filer (Do not check if smaller reporting company)

o

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 o No x

 

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

 

There were 60,000,000 shares of common stock issued and outstanding as of February 14, 2013. 




 

WINDAUS GLOBAL ENERGY, INC.

(FORMERLY BLUESTAR ENTERTAINMENT TECHNOLOGIES, INC.)


PART I.  FINANCIAL INFORMATION

Page(s)


Item 1.

Financial Statements


Condensed  Balance Sheets as of December 31, 2012 (unaudited) and

June 30, 2012

4


Unaudited Condensed  Statements of Operations for the six and three month

periods ended December 31, 2012 and 2011

5


Unaudited  Statements of Changes in Stockholders’ Deficiency for the period
               from June 30, 2012 through December 31, 2012

6


Unaudited  Statements of Cash Flows for the six month periods ended

December 31, 2012 and 2011, and for the period from May 28, 2008 (Inception)
              through December 31, 2012

7


Notes to the Unaudited Condensed  Financial Statements

8


Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of

Operations

12


Item 3.

Quantitative and Qualitative Disclosures About Market Risk

14


Item 4.

Controls and Procedures

14


PART II – OTHER INFORMATION


Item 1.

Legal Proceedings

15


Item 1A.

Risk Factors

15


Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

15


Item 3

Defaults Upon Senior Securities

15


Item 4.

Mine Safety Disclosures

15


Item 5.

Other Information

15


Item 6.

Exhibits

15


Signatures

16






2


PART I – FINANCIAL INFORMATION


Item 1.  Financial Statements.







3


WINDAUS GLOBAL ENERGY, INC.

(FORMERLY BLUESTAR ENTERTAINMENT TECHNOLOGIES, INC.)

(A Development Stage Company)

CONDENSED  BALANCE SHEETS



 

 

December 31,

 

 

June 30,

 

 

2012

 

 

2012

ASSETS

 

(unaudited)

 

 

 

 

 

 

 

 

 

Current Assets

 

 

 

 

 

   Other receivable - related party

$

13,063

 

$

3,413

   Accounts receivable

 

--

 

 

5,000

Total Current Assets

 

13,063

 

 

8,413

 

 

 

 

 

 

TOTAL ASSETS

$

13,063

 

$

8,413

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' DEFICIENCY

 

 

 

 

 

 

 

 

 

 

 

Current Liabilities

 

 

 

 

 

  Accrued expenses

$

1,490

 

$

1,490

  Accounts payable

 

3,119

 

 

5,944

  Related party payable

 

8,454

 

 

17,625

  Note payable

 

11,500

 

 

--

  Note payable – related party

 

20,420

 

 

--

  Accrued interest on notes payable

 

235

 

 

--

Total Current Liabilities

 

45,218

 

 

25,059

Stockholders' Deficiency

 

 

 

 

 

   Preferred stock, no par value, unlimited

 

 

 

 

 

   shares authorized; no shares issued and    outstanding

        

--     

 

 


--

   Common stock, no par value; unlimited shares authorized; 60,000,000 and 560,020,000 shares issued and outstanding

 

84,552

 

 

84,452

   Additional paid in capital

 

55,157

 

 

58,052

   Accumulated Deficit

 

(171,864)

 

 

(159,150)

 

 

 

 

 

 

Total Stockholders' Deficiency

 

(32,155)

 

 

(16,646)

 

 

 

 

 

 

TOTAL LIABILITIES AND STOCKHOLDERS'

 

 

 

 

 

   DEFICIENCY

$

13,063

 

$

8,413

 

 

 

 

 

 


4


See accompanying Notes to Condensed Financial Statements.






WINDAUS GLOBAL ENERGY, INC.

(FORMERLY BLUESTAR ENTERTAINMENT TECHNOLOGIES, INC.)

(A Development Stage Company)

CONDENSED  STATEMENTS OF OPERATIONS (UNAUDITED)


 

 

For The Six Months Ended December 31, 2012

 

 

For The Six Months Ended December 31, 2011

 

 

For The Three Months Ended December 31, 2012

 

 

For The Three Months Ended December 31, 2011

 

 

Period May 8, 2008 (Inception) Through December 31, 2012

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues

$

3,000

 

$

9,200

 

$

--

 

$

9,600

 

$

14,400

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of Sales

 

1,125

 

 

2,934

 

 

--

 

 

3,908

 

 

4,809

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross Profit

 

1,875

 

 

6,266

 

 

--

 

 

5,692

 

 

9,591

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

General and administrative expenses

  

14,354

 

 

16,457

 

 

8,454

 

 

9,622

 

 

176,305

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss from operations

 

(12,479)

 

 

(10,191)

 

 

(8,454)

 

 

(3,930)

 

 

(166,714)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

(235)

 

 

--

 

 

(197)

 

 

--

 

 

(235)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss before discontinued operations

 

(12,714)

 

 

(10,191)

 

 

(8,651)

 

 

(3,930)

 

 

(166,949)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss from discontinued operations

 

--

 

 

--

 

 

--

 

 

--

 

 

(4,915)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NET LOSS

$

(12,714)

 

$

(10,191)

 

$

(8,651)

 

$

(3,930)

 

$

(171,864)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Loss per share -- basic and diluted

$

(0.00)

 

$

(0.00)

 

$

(0.00)

 

$

(0.00)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding

 

498,300,109

 

 

212,963,297

 

 

435,223,736

 

 

406,133,913

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 















See accompanying Notes to Condensed Financial Statements.


5



WINDAUS GLOBAL ENERGY, INC.

(A Development Stage Company)

CONDENSED STATEMENT OF CHANGES IN STOCKHOLDERS' DEFICIENCY (UNAUDITED)

FOR THE PERIOD JUNE 30, 2012 TO DECEMBER 31, 2012

 

 

 

 

 

 

 

 

 

 

 

 

Deficit

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

Number of

 

 

Common

 

 

Additional

 

 

During

 

 

Total

 

 

 

Common

 

 

Share

 

 

Paid-In

 

 

Development

 

 

Stockholders'

                       

 

 

Shares

 

 

Amount

 

 

Capital

 

 

       Stage     

 

 

 Deficiency  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance as of June 30, 2012

 

 

560,020,000

 

$

84,452

 

$

58,052

 

$

(159,150)

 

$

(16,646)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common stock issued to related  party for license acquired

 

 

36,000,000

 

 

100

 

 

(20,520)

 

 

--

 

 

(20,420)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cancellation of common stock   

 

 

(536,020,000)

 

 

--

 

 

--

 

 

--

 

 

--

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cancellation of related party payable

                    

--

 

 

--

 

 

17,625

 

 

--

 

 

17,625

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

                            

 

 

--

 

 

--

 

 

--

 

 

(12,714)

 

 

(12,714)

Balance as of December 31, 2012

60,000,000

 

$

84,552

 

$

55,157

 

$

(171,864)

 

$

(32,155)




































See accompanying Notes to Condensed Financial Statements.


6









WINDAUS GLOBAL ENERGY, INC.

(FORMERLY BLUESTAR ENTERTAINMENT TECHNOLOGIES, INC.)

(A Development Stage Company)

CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED)

 

 

For The Six Months Ended December 31, 2012

 

 

For The Six Months Ended December 31, 2011

 

 

Period May 28, 2008 (Inception) Through December 31, 2012

CASH FLOWS FROM OPERATING ACTIVITIES

 

 

 

 

 

 

 

 

Net loss

$

(12,714)

 

$

(10,191)

 

$

(171,864)

Adjustments to reconcile net loss to net cash

 

 

 

 

 

 

 

 

  used in operating activities:

 

 

 

 

 

 

 

 

   Fair value of common stock transferred to officer

 

--

 

 

--

 

 

53,552

   Fair value of common stock issued for services

 

--

 

 

--

 

 

1,200

  Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

   Increase in other receivable – related party

 

(9,650)

 

 

(102)

 

 

(13,063)

Decrease in accounts receivable

 

5,000

 

 

 

 

 

--

Increase (decrease) in accounts payable and accrued expenses

(2,590)

 

 

(7)

 

 

4,844

Increase in accounts payable -related party

 

8,454

 

 

10,300

 

 

79,331

Net cash used in operating activities

 

(11,500)

 

 

--

 

 

(46,000)

 

 

 

 

 

 

 

 

 

CASH FLOWS FROM INVESTING ACTIVITIES:

 

 

 

 

 

 

Net cash used by investing activities

 

--

 

 

--

 

 

--

CASH FLOWS FROM FINANCING ACTIVITIES:

 

 

 

 

 

 

   Proceeds from sale of common stock

 

--

 

 

--

 

 

30,000

   Proceeds from promissory note

 

11,500

 

 

--

 

 

11,500

   Contribution to capital

 

--

 

 

--

 

 

4,500

Net cash provided by financing activities

 

11,500

 

 

--

 

 

46,000

Net increase (decrease) in cash and

 

 

 

 

 

 

 

 

    cash equivalents

 

--

 

 

--

 

 

--

Cash and cash equivalents, beginning of period

 

--

 

 

--

 

 

--

Cash and cash equivalents, end of period

$

--

 

$

--

 

$

--

Supplemental Disclosure of Cash Flow Information:

 

 

 

 

 

 

   Interest paid

$

--

 

$

--

 

$

--

   Income taxes paid

$

--

 

$

--

 

$

--

 

 

 

 

 

 

 

 

 

Supplemental Disclosure of non cash operating

 

 

 

 

 

 

  information:

 

 

 

 

 

 

 

 

Note payable issued to related party for acquisition of license

$

20,420

 

$

--

 

$

20,420

Cancellation of related party payable considered as capital contribution

$

17,625

 

$

--

 

$

17,625

Fair value of common stock issued to related party for

 

 

 

 

 

 

the cancellation of related party payable

$

--

 

$

--

 

$

53,252


See accompanying Notes to Condensed Financial Statements


7


 WINDAUS GLOBAL ENERGY, INC.

(FORMERLY BLUESTAR ENTERTAINMENT TECHNOLOGIES, INC.)

(A Development Stage Company)

NOTES TO CONDENSED  FINANCIAL STATEMENTS (UNAUDITED)

  FOR THE SIX MONTHS ENDED DECEMBER 31, 2012 AND 2011

AND THE PERIOD MAY 28, 2008 (INCEPTION) TO DECEMBER 31, 2012


NOTE 1 – NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES

 

Organization, Nature of Business and Trade Name

 

Windaus Global Energy, Inc.  (the “Company”) was organized on May 28, 2008 under the Business Companies Act of 2004 of the British Virgin Islands under the name Solarte Hotel Corporation. During the six months ended December 31, 2012 and 2011, the Company offered incorporation services in Panama and other offshore jurisdictions.  The Company did not realize significant revenues from its planned principal business purpose and is considered to be in its development state in accordance with Accounting Standards Codification (ASC) 915, “Development Stage Entities.” The Company has, at the present time, not paid any dividends and any dividends that may be paid in the future will depend upon the financial requirements of the Company and other relevant factors. The Company had contracted to purchase real estate in Panama on which it intended to develop a hotel.  This business was abandoned and is accounted for as discontinued operations. In December 2011, the Company changed its name from Solarte Hotel Corporation to Bluestar Entertainment Technologies, Inc. In December 2012, the Company acquired certain wind energy generation technology from a related party.  Due to this acquisition, the Company will now shift to the wind energy generation business.  In February 2013, the Company filed Articles of Continuance with the Wyoming Secretary of State to redomicile in Wyoming under the name Windaus Global Energy, Inc.


Fiscal Year - The Company’s fiscal year-end is June 30.


Interim Financial Statements - The accompanying financial statements as of and for the periods ended December 31, 2012 and 2011 have been prepared by the Company without audit. In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the  financial position, results and operations, and cash flows at December 31,  2012 and 2011 and for all periods presented herein, have been made. The results of operations for the periods ended December 31, 2012 and 2011 are not necessarily indicative of the operating results for the full years. The accompanying condensed financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and in accordance with the instructions for Form 10-Q.  Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. The balance sheet information as of June 30, 2012 was derived from the audited financial statements included in the Company's financial statements as of and for the year ended June 30, 2012 included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (the “SEC”) on November 13, 2012. These financial statements should be read in conjunction with that report.


Accounting 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, the disclosures of contingent assets and liabilities at the date of the financial statements, and the reported amount of revenues and expenses during the reported period.  The current economic environment has increased the degree of uncertainty inherent in these estimates and assumptions.  Actual results could differ from those estimated.

 

Fair Value Measurements - Effective beginning second quarter 2010, the FASB ASC Topic 825, Financial Instruments, requires disclosures about fair value of financial instruments in quarterly reports as well as in annual reports.  For the Company, this statement applies to certain investments and long-term debt.  Also, the FASB ASC Topic 820, Fair Value Measurements and Disclosures, clarifies the definition of fair value for financial reporting, establishes a framework for measuring fair value and requires additional disclosures about the use of fair value measurements.


Various inputs are considered when determining the value of the Company’s investments and long-term debt.  The inputs or methodologies used for valuing securities are not necessarily an indication of the risk associated with investing in these securities.  These inputs are summarized in the three broad levels listed below.


·

Level 1 – observable market inputs that are unadjusted quoted prices for identical assets or liabilities in active markets.



8


WINDAUS GLOBAL ENERGY, INC.

(FORMERLY BLUESTAR ENTERTAINMENT TECHNOLOGIES, INC.)

(A Development Stage Company)

NOTES TO CONDENSED  FINANCIAL STATEMENTS (UNAUDITED)

FOR THE SIX MONTHS ENDED DECEMBER 31, 2012 AND 2011

AND THE PERIOD MAY 28, 2008 (INCEPTION) TO DECEMBER 31, 2012


NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Continued]


·

Level 2 – other significant observable inputs (including quoted prices for similar securities, interest rates, credit risk, etc.).

·

Level 3 – significant unobservable inputs (including the Company’s own assumptions in determining the fair value of investments).


The Company’s adoption of FASB ASC Topic 825 did not have a material impact on the company’s financial statements.


The carrying value of financial assets and liabilities recorded at fair value is measured on a recurring or nonrecurring basis. Financial assets and liabilities measured on a non-recurring basis are those that are adjusted to fair value when a significant event occurs. The Company had no financial assets or liabilities carried and measured on a nonrecurring basis during the reporting periods. Financial assets and liabilities measured on a recurring basis are those that are adjusted to fair value each time a financial statement is prepared. The Company had no financial assets and/or liabilities carried at fair value on a recurring basis at December 31, 2012 or June 30, 2012.


The availability of inputs observable in the market varies from instrument to instrument and depends on a variety of factors including the type of instrument, whether the instrument is actively traded, and other characteristics particular to the transaction. For many financial instruments, pricing inputs are readily observable in the market, the valuation methodology used is widely accepted by market participants, and the valuation does not require significant management discretion. For other financial instruments, pricing inputs are less observable in the market and may require management judgment. As of December 31, 2012 and, 2011, the Company had no assets other than accounts receivable and receivable from related party.


Basic and diluted loss per share - Basic loss per share is based on the weighted-average number of shares of common stock outstanding.  Diluted Loss per share is based on the weighted-average number of shares of common stock outstanding adjusted for the effects of common stock that may be issued as a result of the following types of potentially dilutive instruments:


Warrants,


Employee stock options, and


Other equity awards, which include long-term incentive awards.


The FASB ASC Topic 260, Loss Per Share, requires the Company to include additional shares in the computation of loss per share, assuming dilution.


Diluted loss per share is based on the assumption that all dilutive options were converted or exercised. Dilution is computed by applying the treasury stock method. Under this method, options are assumed to be exercised at the time of issuance, and as if funds obtained thereby were used to purchase common stock at the average market price during the period.


Basic and diluted loss per share is the same as there was no dilutive effect of any stock options for the periods presented.


Stock-Based Compensation - The Company periodically issues stock options and warrants to employees and non-employees in non-capital raising transactions for services and for financing costs. The Company accounts for stock option and warrant grants issued and vesting to employees based on the authoritative guidance provided by the Financial Accounting Standards Board whereas the value of the award is measured on the date of grant and recognized over the vesting period. authoritative guidance of the Financial Accounting Standards Board whereas the value of the stock compensation is based upon the measurement date as determined at either a) the date at which a performance commitment is reached, or b) at the date at which the necessary performance to earn the equity instruments is complete.



9


WINDAUS GLOBAL ENERGY, INC.

(FORMERLY BLUESTAR ENTERTAINMENT TECHNOLOGIES, INC.)

(A Development Stage Company)

NOTES TO CONDENSED  FINANCIAL STATEMENTS (UNAUDITED)

FOR THE SIX MONTHS ENDED DECEMBER 31, 2012 AND 2011

AND THE PERIOD MAY 28, 2008 (INCEPTION) TO DECEMBER 31, 2012


NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Continued]


Non-employee stock-based compensation charges generally are amortized over the vesting period on a straight-line basis. In certain circumstances where there are no future performance requirements by the non-employee, option grants are immediately vested and the total stock-based compensation charge is recorded in the period of the measurement date.


The fair value of the Company's common stock option grant is estimated using the Black-Scholes option pricing model, which uses certain assumptions related to risk-free interest rates, expected volatility, expected life of the common stock options, and future dividends. Compensation expense is recorded based upon the value derived from the Black-Scholes option pricing model, and based on actual experience.  The assumptions used in the Black-Scholes option pricing model could materially affect compensation expense recorded in the future.


The Company did not grant any new options or warrants during the six and three months ended December 31, 2012. As of December 31, 2012, there were no options or warrants outstanding.


Concentrations, Risks, and Uncertainties - The Company did not have a concentration of business with suppliers or customers constituting greater than 10% of the Company’s gross sales during the six and three months ended December 31, 2012 and 2011.


NOTE 2 - GOING CONCERN

 

The accompanying condensed 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.  However, the Company was only recently formed and has not yet been successful in establishing profitable operations.   The Company has a working capital deficiency of $32,155 and stockholders' deficiency of $32,155 as of December 31, 2012.  The Company has received limited revenues to date and has no foreseeable source of revenues sufficient to offset operating costs. These factors raise substantial doubt about the ability of the Company to continue as a going concern.  As a result, the Company’s independent registered public accounting firm, in its report on the Company’s June 30, 2012 financial statements, has raised substantial doubt about the Company’s ability to continue as a going concern.  In this regard, management is proposing to raise any necessary additional funds not provided by operations through loans or through additional sales of their common stock.  There is no assurance that the Company will be successful in raising this additional capital or in achieving profitable operations.  The financial statements do not include any adjustments that might result from the outcome of these uncertainties.


NOTE 3 - RECENTLY ENACTED ACCOUNTING STANDARDS



In December 2011, the FASB issued ASU No. 2011-11, “Balance Sheet (Topic 210): Disclosures about Offsetting Assets and Liabilities.” This ASU requires an entity to disclose information about offsetting and related arrangements to enable users of its financial statements to understand the effect of those arrangements on its financial position. ASU No. 2011-11 will be applied retrospectively and is effective for annual and interim reporting periods beginning on or after January 1, 2013.  The Company does not expect adoption of this standard to have a material impact on its results of operations, financial condition, or liquidity.

In July 2012, the FASB issued ASU No. 2012-02, Intangibles-Goodwill and Other (Topic 350): Testing Indefinite-Lived Intangible Assets for Impairment (ASU 2012-02), allowing entities the option to first assess qualitative factors to determine whether it is necessary to perform the quantitative impairment test. If the qualitative assessment indicates it is more-likely-than-not that the fair value of an indefinite-lived intangible asset is less than its carrying amount, the quantitative impairment test is required. Otherwise, no testing is required. ASU 2012-02 is effective for the Company in the period beginning January 1, 2013. The Company does not expect the adoption of this update to have a material effect on the financial statements.

Other recent accounting pronouncements issued by the FASB (including its Emerging Issues Task Force), the AICPA, and the Securities Exchange Commission (the "SEC") did not or are not believed by management to have a material impact on the Company's present or future  financial statements.





10


 WINDAUS GLOBAL ENERGY, INC.

(FORMERLY BLUESTAR ENTERTAINMENT TECHNOLOGIES, INC.)

(A Development Stage Company)

NOTES TO CONDENSED  FINANCIAL STATEMENTS (UNAUDITED)

FOR THE SIX MONTHS ENDED DECEMBER 31, 2012 AND 2011

AND THE PERIOD MAY 28, 2008 (INCEPTION) TO DECEMBER 31, 2012

 


NOTE 4 - CAPITAL STOCK

 

Common Stock - The Company has authorized an unlimited number of shares of no par value common stock and preferred stock. 


In May 2008, in connection with its organization, the Company issued 15,000,000 shares of their previously authorized but unissued common stock to one person for $10,000 cash. An additional 500,000 shares were issued to one purchaser for $20,000 on June 30, 2008.


On June 12, 2011, our board of directors approved a 5-for-1 forward split of our common shares. As a result of the forward split, total outstanding common shares were increased from 3,100,000 to 15,500,000 shares. Each holder of one common share received an additional certificate for four shares. All references to common shares in the financial statements and accompanying notes to the condensed financial statements have been retroactively restated to reflect the changes in capital structure resulting from the forward split.


On October 25, 2011, the Board of Directors authorized the issuance of 12,000,000 shares of common stock for services, including 3,000,000 shares to our corporate secretary.  The shares were valued at $.0001 per share, or a total of $1,200, based upon estimated market price of the common stock on the date of the issuance. The services included 3,000,000 shares as compensation for acting as such corporate secretary, 3,000,000 shares for web design, and the remainder for marketing assistance.


In October, 2011, the Company issued 532,520,000 shares at $.0001 per share in cancellation of the $53,252 in related party payables outstanding as of June 30, 2011.  The shares issued were valued based upon estimated market price of the common stock on the date of the issuance.


In June 2012, an existing majority shareholder transferred a total 535,520,000 shares of common stock it owns, or approximately 96% of the outstanding shares, to an entity controlled by an officer of the Company.  The transfer was accounted for as compensation to the officer and the 535,520,000 shares were valued at $.0001 per share, or $53,552, based upon estimated market price of the common stock on the date of the transfer.


By resolution dated November 27, 2012, the Board of Directors authorized the issuance of 36,000,000 restricted shares with a nominal value of $100 and a promissory note in the amount of $20,420 for the assignment of one patent and the related intellectual property from a party which was non-affiliated at the time.  In connection with this assignment, the party nominated a new President, Chief Financial Officer and director who is an affiliate of the assignor. The assignment took effect on December 4, 2012. In connection with the change of control, certain shareholders cancelled 536,020,000 outstanding shares. The Company deemed the issuance of the 36 million shares, valued at $100 and the issuance of the $20,420 promissory note as a non pro-rata distribution to the incoming majority shareholders.


NOTE 5 - RELATED PARTY TRANSACTIONS

 

Related party payable consists of amounts owing for executive compensation and loans.  The amounts are non-interest bearing and due on demand.


As of June 30, 2012, a total of $17,625 was due to a related party for the executive's compensation and travel expenses. On December 4, 2012, this payable was cancelled with the consent of the former executive and was recognized as capital contribution from the shareholder during the period ended December 31, 2012.


During the period ended December 31, 2012, a shareholder advanced $8,454 to the Company for legal services. This amount is payable on demand and bear no interest.


Outstanding balances at December 31, 2012 and June 30, 2012 were $8,454 and $17,625 respectively  


NOTE 6 – NOTES PAYABLE


On August 29, 2012, the Company issued a promissory note to an unrelated party for cash of $11,500.  The note is due on demand and bears interest at 4%. Balance of principal and interest as of December 31, 2012 amounted to $11,500 and $153 respectively.


On December 4, 2012, the Company issued a promissory note to a related party of $20,420 for the acquisition of a license or patent rights (see Notes 1 and 4). The note is unsecured, bear an interest of 5% and repayable out of any financing closed by the Company of $250,000 or more, or on September 30, 2013, whichever first occurs.  Balance of principal and interest as of December 31, 2012 amounted to $20,420 and $82 respectively.


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


Disclaimer Regarding Forward-Looking Statements


This Current Report on Form 10-Q contains forward-looking statements within the meaning of the federal securities laws. These include statements about our expectations, beliefs, intentions or strategies for the future, which we indicate by words or phrases such as “anticipate,” “expect,” “intend,” “plan,” “will,” “we believe,” “believes,” “management believes” and similar language.  Except for the historical information contained herein, the matters discussed in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and elsewhere in this report are forward-looking statements that involve risks and uncertainties. The factors listed in the section captioned “Risk Factors,” as well as any cautionary language in this report; provide examples of risks, uncertainties and events that may cause our actual results to differ materially from those projected. Except as may be required by law, we undertake no obligation to update any forward-looking statement to reflect events after the date of this Form 10-Q.


The ongoing and future success of our business of offering incorporation services is primarily dependent on our ability to market our services, primarily by referrals. We emphasize a high level of service to our customers and potential customers. Since we maintain low overhead, we are able to maintain operations with our currently low level of revenues.


Critical Accounting Policies and Estimates


Accounting 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, the disclosures of contingent assets and liabilities at the date of the financial statements, and the reported amount of revenues and expenses during the reported period.  The current economic environment has increased the degree of uncertainty inherent in these estimates and assumptions.  Actual results could differ from those estimated.

 

Stock Based Compensation - The Company may periodically issue stock options and warrants to employees and non-employees in non-capital raising transactions for services and for financing costs. The Company accounts for stock option and warrant grants issued and vesting to employees based on the authoritative guidance provided by the Financial Accounting Standards Board (“FASB”) whereas the value of the award is measured on the date of grant and recognized over the vesting period.  The Company accounts for stock option and warrant grants issued and vesting to non-employees in accordance with the authoritative guidance of the FASB whereas the value of the stock compensation is based upon the measurement date as determined at either a) the date at which a performance commitment is reached, or b) at the date at which the necessary performance to earn the equity instruments is complete. Non-employee stock-based compensation charges generally are amortized over the vesting period on a straight-line basis. In certain circumstances where there are no future performance requirements by the non-employee, option grants are immediately vested and the total stock-based compensation charge is recorded in the period of the measurement date.


The fair value of the Company's common stock option grant is estimated using the Black-Scholes-Merton option pricing model, which uses certain assumptions related to risk-free interest rates, expected volatility, expected life of the common stock options, and future dividends.  Compensation expense is recorded based upon the value derived from the Black-Scholes option pricing model, and based on actual experience.  The assumptions used in the Black-Scholes-Merton option pricing model could materially affect compensation expense recorded in future periods.


We did not grant any new employee options and no options were cancelled or exercised during the six and three months ended December 31, 2012. As of December 31, 2012, there were no options outstanding.


Six and three months ended December 31, 2012 compared to six and three months ended December 31, 2011


Our incorporation business commenced receipt of revenues in the three months ended December 31, 2011, and continued through the periods ended December 31, 2012. During the periods six and three months ended December 31, 2012, our revenues amounted to $3,000 and $0, respectively compared to the periods six and three months ended December 31, 2011 of $9,200 and $9,600 respectively.  Although we enjoyed high gross margins, management recognized that growth in this business was slow and on December 4, 2012, the Company decided to shift to the wind energy business with the acquisition of certain wind energy generation technology and the related patent.  



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Analysis of Financial Position, Liquidity and Capital Resources


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.  However, the Company was only recently formed and has not yet been successful in establishing profitable operations.   The Company has a working capital deficiency of $32,155 and stockholders' deficiency of $32,155 as of December 31, 2012.  The Company has received limited revenues to date and has no foreseeable source of revenues sufficient to offset operating costs. These factors raise substantial doubt about the ability of the Company to continue as a going concern.  In this regard, management is proposing to raise any necessary additional funds not provided by operations through loans or through additional sales of their common stock.  There is no assurance that the Company will be successful in raising this additional capital or in achieving profitable operations.  The financial statements do not include any adjustments that might result from the outcome of these uncertainties.


Our cash needs to date have historically been funded by loans from management and other related parties. The amounts advanced do not bear interest and there is no agreement as to repayment.  In the six months ended December 31, 2012, we obtained a loan from a third party for $11,500, and a shareholder advanced $8,454 for services at no interest, due on demand and issued a note payable of $20,420 that will mature on September 30, 2012.  We expect to need a minimum of $500,000 in cash through December 31, 2013 in order to build out a factory and for working capital in order to fill orders. We have no commitments or arrangements for this financing.


Off Balance Sheet Arrangements and Contractual Obligations.


The Company has no off balance sheet arrangements and no contractual obligations.


Quantitative and Qualitative Information about Market Risk.


We do not invest in any market risk sensitive instruments.


Inflation


The Company is not subject at this time to the effects of inflation.



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Recent Accounting Pronouncements

 

In December 2011, the FASB issued ASU No. 2011-11, “Balance Sheet (Topic 210): Disclosures about Offsetting Assets and Liabilities.” This ASU requires an entity to disclose information about offsetting and related arrangements to enable users of its financial statements to understand the effect of those arrangements on its financial position. ASU No. 2011-11 will be applied retrospectively and is effective for annual and interim reporting periods beginning on or after January 1, 2013.  The Company does not expect adoption of this standard to have a material impact on its results of operations, financial condition, or liquidity.

In July 2012, the FASB issued ASU No. 2012-02, Intangibles-Goodwill and Other (Topic 350): Testing Indefinite-Lived Intangible Assets for Impairment (ASU 2012-02), allowing entities the option to first assess qualitative factors to determine whether it is necessary to perform the quantitative impairment test. If the qualitative assessment indicates it is more-likely-than-not that the fair value of an indefinite-lived intangible asset is less than its carrying amount, the quantitative impairment test is required. Otherwise, no testing is required. ASU 2012-02 is effective for the Company in the period beginning January 1, 2013. The Company does not expect the adoption of this update to have a material effect on the financial statements.

 

Other recent accounting pronouncements issued by the FASB (including its Emerging Issues Task Force), the AICPA, and the Securities Exchange Commission (the "SEC") did not or are not believed by management to have a material impact on the Company's present or future  financial statements.

Item 3.  Quantitative and Qualitative Disclosures About Market Risk.


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


Item 4.  Controls and Procedures.


Evaluation of Disclosure Controls and Procedures


The Company’s principal executive officer and its principal financial officer, conducted an evaluation of the Company’s disclosure controls and procedures (as defined in Exchange Act Rules 13a-14(c) and 15d -14 (c)) as of December 31, 2012. Based on this evaluation, our principal executive officer and principal financial officer concluded as of the Evaluation Date that our disclosure controls and procedures were effective to enable us to accurately record, process, summarize and report certain information required to be included in the Company’s periodic SEC filings within the required time periods, and to accumulate and communicate to our management, including the Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.


Our management, including our chief executive officer and chief financial officer, does not expect that our disclosure controls and procedures or our internal controls will prevent all error and all fraud.  A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints and the benefits of controls must be considered relative to their costs. Due to the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected.


Changes in Internal Controls


There have been no changes in our internal controls over financial reporting during the quarter ended December 31, 2012 that have materially affected or are reasonably likely to materially affect our internal controls.








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PART II — OTHER INFORMATION


Item 1.  Legal Proceedings.


We are not a party to or otherwise involved in any legal proceedings.


Item 1A.  Risk Factors.


As a “smaller reporting company” as defined by Item 10 of Regulation S-K, the Company is not required to provide information required by this Item.


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


None.


Item 3.  Defaults Upon Senior Securities.


There have been no events which are required to be reported under this Item.


Item 4.  Mine Safety Disclosures.


Not applicable.


Item 5.  Other Information.


None.


Item 6.  Exhibits.


31. Certification of CEO and CFO.

32. Certification pursuant to 18 U.S.C. Section 1350 of CEO and CFO






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SIGNATURES


Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

  

WINDAUS GLOBAL ENERGY, INC.

  

  

  

Dated:  February 15, 2013

By:

/s/ David Worrall

  

  

David Worrall

  

  

CEO and Chief Financial Officer (chief financial and accounting officer and duly authorized officer)

  

 

 

 

 

 

 

 

 






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