UNITED
STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-K
|X| Annual Report under Section 13 or 15(d) of the Securities Exchange Act of 1934
For the fiscal year ended September 30, 2011
Or
|_| Transitional Report under Section 13 or 15(d) of the Securities Exchange Act of 1934
000-52971
----------------------
Commission file number
Stalar 1, Inc.
---------------------------------------------
(Name of Small Business Issuer in its charter)
| Delaware | 26-1402640 |
| (State or other jurisdiction of | (I.R.S. Employer |
| incorporation or organization) | Identification No.) |
| 317 Madison Avenue, Suite 1520 | |
| New York, New York | 10017 |
| (Address of principal executive offices) | (Zip Code) |
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 [X]
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Exchange Act. [ ]
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES [X] NO [ ]
Indicate by check mark whether the registrant 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 [X] NO [ ]
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. |X|
Indicate by checkmark whether the
registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.
[X] 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 |X| No |_|
Stalar 1, Inc. had no revenues during its fiscal year ending September 30, 2011.
The aggregate market value of the Common Stock held by non-affiliates of Stalar 1, Inc. was $1,780.00 on September 30, 2011.
As of December 15, 2011, 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.
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Form 10-K
Report for the Fiscal Year Ended September 30, 2011
| Page | ||
|
PART I
| ||
| Item 1. | Business | 4 |
| Item 1A. | Risk Factors | 4 |
| Item 1B. | Unresolved Staff Comments | 4 |
| Item 2. | Properties | 4 |
| Item 3. | Legal Proceedings | 4 |
|
PART II
| ||
| Item 5. | Market for Registrant’s Common Equity and Related Stockholder Matters and Issuer Purchases of Equity Securities | 4 |
| Item 6. | Selected Financial Data | 5 |
| Item 7. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 5 |
| Item 7A. | Quantitative and Qualitative Disclosures About Market Risk | 6 |
| Item 8. | Financial Statements and Supplementary Data | 6 |
| Item 9. | Changes In and Disagreements With Accountants on Accounting and Financial Disclosure | 6 |
| Item 9A. | Controls and Procedures | 6 |
| Item 9B. | Other Information | 7 |
|
PART III
| ||
| Item 10. | Directors, Executive Officers and Corporate Governance | 7 |
| Item 11. | Executive Compensation | 8 |
| Item 12. | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters | 10 |
| Item 13. | Certain Relationships and Related Transactions, and Director Independence | 10 |
| Item 14. | Principal Accountant Fees and Services | 10 |
|
PART IV
| ||
| Item 15. | Exhibits, Financial Statement Schedules | 11 |
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PART I
ITEM 1. BUSINESS.
Stalar 1, Inc. ("we", "us", "our", the "Company" or the "Registrant") was incorporated in the State of Delaware on November 13, 2007. Since inception, the Company has been engaged in organizational efforts and obtaining initial financing. The Company was formed as a vehicle to pursue a business combination and has made numerous efforts to date to identify a possible business combination. The business purpose of the Company is to seek the acquisition of, or merger with, an existing operating company.
As reported on the Company’s most recent 8-K filing on November 30, 2011, the Company recently terminated its Reverse Merger and Financial Advisory Agreement (the “Merger Agreement”) with Tianjin TEDA Hengyun Commerce and Trade Co., Ltd. (“Tianjin”), effective November 14, 2011. As a result of the termination, and pursuant to the Merger Agreement, the Company retained the funds held in escrow, less disbursements made pursuant to the terms of the Merger Agreement, as liquidated damages.
Currently our Company would be defined as a "shell" company, an entity which is generally described as having no or nominal operations and no or nominal assets. The Company was organized as a vehicle to investigate and, if such investigation warrants, acquire a target company or business seeking the perceived advantages of being a publicly held corporation. Our principal business objective for the past 12 months, for the next 12 months and beyond such time will be to achieve long-term growth potential through a combination with an operating business. The Company will not restrict our potential candidate target companies to any specific business, industry or geographical location and, thus, may acquire any type of business.
The Company does not currently engage in any business activities that provide cash flow. The costs of investigating and analyzing business combinations for the next 12 months and beyond such time will be paid with money in our treasury, and/or through borrowings from our stockholders, management or other investors.
We presently have no employees apart from our management. Our only two officers are engaged in outside business activities and will continue to devote very limited time to our business until the acquisition of a successful business opportunity has been identified. We expect no significant changes in the number of our employees other than such changes, if any, incident to a business combination.
ITEM 1A. RISK FACTORS.
A smaller reporting company is not required to provide the information required by this Item.
ITEM 1B . Unresolved Staff Comments.
A smaller reporting company is not required to provide the information required by this Item.
ITEM 2. PROPERTIES.
The Company neither rents nor owns any property. The Company utilizes the office space and equipment of Dr. Steven Fox, its President, Secretary and a Director, at no cost, on a month to month basis.
ITEM 3. LEGAL PROCEEDINGS.
We are not a party to any pending legal proceeding. We are not aware of any pending legal proceeding to which any of our officers, directors, or any beneficial holders of 5% or more of our voting securities are adverse to us or have a material interest adverse to us.
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.
The Company's Common Stock is not trading on any stock exchange. The Company is not aware of any market activity in its stock since its inception and through the date of this filing.
As of December 15, 2011, there were approximately 51 record holders of the Company's Common Stock.
The Registrant has not paid any cash dividends to date and does not anticipate or contemplate paying dividends in the foreseeable future. It is the present intention of management to utilize all available funds for the development of the Registrant's business.
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As of September 30, 2011, we had no equity compensation arrangements or plans either approved or not approved by our stockholders. We granted no options during our fiscal year ended September 30, 2011 and had no options outstanding as of September 30, 2011. The Company has not repurchased any equity securities of the Company during the fourth quarter of the fiscal year ended September 30, 2011.
ITEM 6. SELECTED FINANCIAL DATA.
A smaller reporting company is not required to provide the information required by this Item.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
The following presentation of management's discussion and analysis of the Company's financial condition and results of operations should be read in conjunction with the Company's consolidated financial statements and the accompanying notes thereto. This section and other parts of this report contain forward-looking statements that involve risks and uncertainties. The Company's actual results may differ significantly from the results discussed in the forward-looking statements.
Overview
The Company was incorporated on November 13, 2007. The Company, which is in the development stage, has had no operations during the quarterly period ended September 30, 2011, nor for the period November 13, 2007 (inception) to September 30, 2011 and has no operations as of the date of this filing.
Continuing Operations, Liquidity and Capital Resources
General and administrative expenses were $24,925 for the fiscal year ended September 30, 2011 compared to $14,166 for the period October 1, 2009 to September 30, 2010, and $83,923 for the period November 13, 2007 (inception) to September 30, 2011. General and administrative expenses consist primarily of professional fees and organization expenses. We had a net loss of $24,925 for the period October 1, 2010 to September 30, 2011.
The Company was organized as a vehicle to investigate and, if such investigation warrants, acquire a target company or business seeking the perceived advantages of being a publicly held corporation. Our principal business objective for the next 12 months and beyond such time will be to achieve long-term growth potential through a combination with an operating business. The Company will not restrict our potential candidate target companies to any specific business, industry or geographical location and, thus, may acquire any type of business.
The Company does not currently engage in any business activities that provide cash flow. The costs of investigating and analyzing business combinations for the next 12 months and beyond such time will be paid with money in our treasury, and/or through borrowings from our stockholders, management or other investors.
We expect no significant changes in the number of our employees other than such changes, if any, incident to a business combination.
During the next 12 months we anticipate incurring costs related to:
a) filing of Exchange Act reports, and
b) costs relating to consummating an acquisition.
Going Concern
We have financed our activities to date from loans from our majority stockholder. We believe we will be able to meet costs anticipated to be incurred in the next 12 months through deferral of fees by certain service providers and additional amounts, as necessary, to be loaned to or invested in us by our stockholders, management or other investors. The report of our independent registered public accounting firm, MSCM LLP, on our audited financial statements contains a qualification regarding our ability to continue as a going concern.
Off-balance Sheet Arrangements
None
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Item 7A. Quantitative and Qualitative Disclosures About Market Risk
A smaller reporting company is not required to provide the information required by this Item.
ITEM 8. FINANCIAL STATEMENTS.
See the financial statements annexed to this annual report.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.
In its two most recent fiscal years or any later interim period, the Company has had no disagreements with its independent accountants.
ITEM 9A. 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 Principal Executive Officer has concluded that, as of September 30, 2011, our disclosure controls and procedures were 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.
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, 2011 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. Management concluded that during the period covered by this report, such internal controls and procedures were effective.
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.
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ITEM 9B. OTHER INFORMATION.
None
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.
Our officers and directors and their ages and positions are as follows:
| Name | Age | Position |
| Steven R. Fox | 58 | Director, CEO/President, CFO, Secretary |
| Jan Fox | 56 | Director, Vice President |
Steven R. Fox, DDS
Dr. Fox is a practicing dentist in New York City. Dr. Fox is a fellow in the American College of Dentistry and a fellow in the International College of Dentistry. He is a former faculty member of the Harvard School of Dental Medicine and a former officer of Harvard. In 1999 Dr. Fox was the Ernst and Young Entrepreneur of the Year. Dr. Fox is the Chairman of the Rebel Group, Inc., a privately-held company, that is involved in importing and exporting. In 1999, Dr. Fox received the Medal of Freedom from the Republican Members of the United States Senate. Since the Company's inception, Dr. Fox has been serving as the Company's CEO/President, CFO, Secretary and a member of the Board of Directors. The term of Dr. Fox’s office as both an officer and director expires at our annual meeting of stockholders or until his successors are duly elected and qualified.
Steven Fox is also the CEO/President, CFO, Secretary, member of the Board of Directors, and controlling stockholder of Stalar 2, Inc., a Delaware corporation.
Jan Fox
During the past five years Ms. Fox has been a homemaker. In February of 2011, Ms. Fox was appointed as the Vice President and a member of the Board of Directors of the Company, for a term expiring upon her resignation or removal.
Significant Employees.
None.
Family Relationships.
Steven R. Fox and Jan Fox are married.
Involvement in Certain Legal Proceedings.
There have been no events under any bankruptcy act, no criminal proceedings and no judgments, injunctions, orders or decrees material to the evaluation of the ability and integrity of any director, executive officer, promoter or control person of Registrant during the past five years.
Section 16(a) Beneficial Ownership Reporting Compliance
Compliance with Section 16(a) of the Securities Exchange Act of 1934 Section 16(a) of the Securities Exchange Act of 1934, as amended, requires the Company's officers and directors, and persons who own more than 10% of a registered class of the Company's equity securities, to file reports of ownership and changes in ownership with the Securities and Exchange Commission (the "Commission"). Officers, directors and greater than 10% stockholders are required by the Commission's regulations to furnish the Company with copies of all section 16(a) forms they file. To the Company's knowledge, based solely on a review of the copies of reports furnished to the Company during the fiscal year ended September 30, 2011, the Company's officers, directors and greater than 10% stockholders complied with all filing requirements under section 16(a).
Audit Committee.
The Board of Directors acts as the Audit Committee. The Company has no qualified financial expert at this time because it has not been able to hire a qualified candidate. Further, the Company believes that it has inadequate financial resources at this time to hire such an expert. The Company intends to continue to search for a qualified individual for hire.
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Code of Ethics.
We have adopted a Code of Ethics that applies to all of our executive officers, directors and employees. Our Code of Ethics codifies the business and ethical principles that govern all aspects of our business. This document will be made available in print, free of charge, to any stockholder requesting a copy in writing from the Company.
ITEM 11. EXECUTIVE COMPENSATION.
Summary Compensation Table
As the table below indicates, none of the Company's officers or directors has received any cash remuneration since inception.
| SUMMARY COMPENSATION TABLE | |||||||||
| Name and principal position |
Year |
Salary ($) |
Bonus ($) |
Stock Awards ($) |
Option Awards ($) |
Non-Equity Incentive Plan Compensation ($) |
Nonqualified Deferred Compensation Earnings ($) |
All Other Compensation ($) |
Total ($) |
| Steven
R. Fox Director, CEO/President, CFO, Secretary |
2011 2010 2009 2008 |
0 0 0 0 |
0 0 0 0 |
0 0 0 0 |
0 0 0 0 |
0 0 0 0 |
0 0 0 0 |
0 0 0 0 |
0 0 0 0 |
| Jan
Fox Director, Vice President |
2011 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
Narrative Disclosure to the Summary Compensation Table
None of the Company's officers or members of the Board of Directors has received any cash remuneration since inception. Officers will not receive any remuneration until the consummation of an acquisition. No remuneration of any nature has been paid for or on account of services rendered by a director in such capacity. The Company's officers and directors intend to devote only limited amounts of time to our affairs.
It is possible that, after the Company successfully consummates a business combination with an unaffiliated entity, that entity may desire to employ or retain certain of our officers and directors for the purposes of providing services to the surviving entity. However, the Company has adopted a policy whereby the offer of any post-transaction employment to our management will not be a consideration in our decision whether to undertake any proposed transaction.
No retirement, pension, profit sharing, stock option or insurance programs or other similar programs have been adopted by the Company for the benefit of its employees.
There are no understandings or agreements regarding compensation our management will receive after a business combination that is required to be included in this item, or otherwise.
We have not entered into any employment agreement or consulting agreement with our executive officers. There are no arrangements or plans in which we provide pension, retirement or similar benefits for executive officers.
Although we do not currently compensate our officers, we reserve the right to provide compensation at some time in the future. Our decision to compensate officers depends on the availability of our cash resources with respect to the need for cash to further our business purposes.
Stock Option Grants
We have not granted any stock options to the executive officers or directors since our inception.
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Outstanding Equity Awards at Fiscal Year-End
As the table below indicates, the Company has no unexercised options, stock that has not vested, or equity incentive plan awards for our executive officers as of September 30, 2011. The Company has not granted any stock options to the executive officers or directors since our inception.
| OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END | |||||||||
| OPTION AWARDS | STOCK AWARDS | ||||||||
| Name |
Number of Securities Underlying Unexercised Options (#) Exercisable |
Number of Securities Underlying Unexercised Options (#) Unexercisable |
Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) |
Option Exercise Price ($) |
Option Expiration Date |
Number of Shares or Units of Stock That Have Not Vested (#) |
Market Value of Shares or Units of Stock That Have Not Vested ($) |
Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) |
Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested (#) |
| Steven R. Fox | - | - | - | - | - | - | - | - | - |
| Jan Fox | - | - | - | - | - | - | - | - | - |
Compensation of Directors
As the table below indicates, no compensation has been paid to our directors as of September 30, 2011.
| DIRECTOR COMPENSATION | |||||||
| Name |
Fees Earned or Paid in Cash ($) |
Stock Awards ($) |
Option Awards ($) |
Non-Equity Incentive Plan Compensation ($) |
Non-Qualified Deferred Compensation Earnings ($) |
All Other Compensation ($) |
Total ($) |
| Steven R. Fox | - | - | - | - | - | - | - |
| Jan Fox | - | - | - | - | - | - | - |
Narrative Disclosure to the Director Compensation Table
The Company does not have any standard arrangements pursuant to which directors of the Company are compensated for services provided as a director. All directors are entitled to reimbursement for expenses reasonably incurred in attending Board of Directors' meetings. There has been no compensation paid to the Company's Directors as of the end of September 30, 2011.
Stock Option Plans
We did not have a stock option plan in place as of September 30, 2011.
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ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.
The following table sets forth, as of September 30, 2011 the number of shares of Common Stock owned of record and beneficially by executive officers, directors and persons who hold 5% or more of the outstanding Common Stock of the Company.
| Amount and | ||
| Nature of | ||
| Beneficial | Percentage | |
| Name and Address | Ownership(3) | of Class |
|
Steven R. Fox (1) 317 Madison Avenue, Suite 1520, New York, NY 10017 |
2,000,000 | 97.82% |
|
Jan Fox (2) 317 Madison Avenue, Suite 1520, New York, NY 10017 |
2,000,000 | 97.82% |
| All Officers and Directors as a group | 2,000,000 | 97.82% |
(1) Steven R. Fox is the CEO/President, CFO, Secretary and a director of the Company. Mr. Fox holds these shares individually, however he is married to Jan Fox, and they reside in the state of New York.
(2) Jan Fox, the Vice President, and a director of the Company, is married to Steven R. Fox, and they reside in the state of New York. Mrs. Fox holds no stock of the Company, however she is the beneficial owner of shares held in Mr. Fox’s name.
(3) All shares are owned directly and of record and such stockholder has sole voting, investment, and dispositive power.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE.
During the fiscal year ended September 30, 2011, Steven R. Fox, an officer and Director of the Company, has advanced funds in the aggregate amount of $23,679 to the Company to cover cash requirements. Inclusive of the $23,679, the aggregate principal amount of all loans made by Steven R. Fox from the Company’s inception is $70,535. The loans are unsecured and payable on demand with interest at the prime rate of 3.25% at September 30, 2011.
As aforementioned, Steven R. Fox and Jan Fox, the two members of the Board of Directors, are married.
The Company utilizes the office space and equipment of its President at no cost. Management estimated such amounts to be immaterial.
Except as otherwise indicated herein, there have been no related party transactions, or any other transactions or relationships required to be disclosed pursuant to Item 404 of Regulation S-B.
Neither of the Directors of the Company would be deemed independent under the independence standards applicable to the Company. The Company does not have a separately designated audit, nominating or compensation committee or committee performing similar functions.
ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES.
Audit Fees
The fees incurred for the fiscal year ending September 30, 2011 for professional services rendered by our principal accountant for the audit of our annual financial statements and review of our quarterly financial statements is approximately $7,000.
Audit Related Fees
There were no audit related fees for the fiscal years ended September 30, 2011. Audit related fees include fees for assurance and related services rendered by the principal accountant related to the audit or review of our financial statements, not included in the foregoing paragraph.
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Tax Fees
There were no tax fees for the fiscal year ended September 30, 2011. Tax fees include fees for professional services rendered by the principal accountant for tax compliance, tax advice and tax planning.
All Other Fees
There were no other professional services rendered by our principal accountant during the last two fiscal years that were not included in the above paragraphs.
The engagement of the Company’s independent auditor, MSCM LLP, was approved by the Company’s Board of Directors which serves as the Audit Committee. The Audit Committee does not anticipate that the Company’s auditor will provide any services other that audit services and consequently the Audit Committee has not adopted any pre-approval policies and procedures described in paragraph (c)(7)(i) of Rule 2-01 of Regulation S-X. No services described in Items 9(e)(2) through 9(e)(4) of Schedule 14A were provided by the Company’s auditors.
ITEM 15. EXHIBITS, FINANCIALS STATEMENTS, FINANCIAL STATEMENT SCHEDULES.
(a)(1) FINANCIAL STATEMENTS. The following financial statements are included in this report:
| Title of Document | Page | |
| Report of Independent Registered Public Accounting Firm | F-1 | |
| Balance Sheets | F-2 | |
| Statements of Operations | F-3 | |
| Statements of Cash Flows | F-4 | |
| Statement of Changes in Stockholders' Deficit | F-5 | |
| Notes to Financial Statements | F-6 to F-9 |
(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 |
Title of Document | |
| 3.1 | Articles of Incorporation (1) | |
| 3.1(i) | Certificate of Correction to Certificate of Incorporation(1) | |
| 3.2 | Bylaws (1) | |
| 14.1 | Code of Ethics (2) | |
| 23.1 | Consent of MSCM LLP | |
| 31.1 | 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 | |
| 31.2 | 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 | |
| 32.1 | 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 | |
| 101.INS | XBRL Instance Document | |
| 101.SCH | XBRL Taxonomy Extension Schema Document | |
| 101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document | |
| 101.LAB | XBRL Taxonomy Extension Label Linkbase Document | |
| 101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document | |
| 101.DEF | XBRL Taxonomy Extension Definition Linkbase Document |
(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.
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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: December 15, 2011 | By | /s/Steven R. Fox |
| Steven R. Fox, President | ||
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 /s/Steven R. Fox
Steven R. Fox
CEO, CFO, President and Secretary
Dated: December 15, 2011
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STALAR 1, INC.
(A Development Stage Company)
INDEX TO FINANCIAL STATEMENTS
PERIOD FROM NOVEMBER 13, 2007 (Inception) TO SEPTEMBER 30, 2011
| Page | ||
| No. | ||
| FINANCIAL STATEMENTS | ||
| Report of Independent Registered Public Accounting Firm | F-1 | |
| Balance Sheets | F-2 | |
| Statements of Operations | F-3 | |
| Statements of Cash Flows | F-4 | |
| Statement of Changes in Stockholders’ Deficit | F-5 | |
| Notes to Financial Statements | F-6--F-9 |
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. (the “Company”) as of September 30, 2011 and 2010, 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, 2011. The Company’s management is responsible for these financial statements. 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 audit 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 audit 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 the Company as of September 30, 2011 and 2010, 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, 2011 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. Management’s 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.
|
Signed: “MSCM LLP” | |
| Toronto, Ontario | |
| December 12, 2011 | |
| F-1 |
STALAR 1, INC.
(A Development Stage Company)
BALANCE SHEETS
SEPTEMBER 30, 2011 AND 2010
| 2011 | 2010 | |||||||
| ASSETS | ||||||||
| Current assets | ||||||||
| Cash | $ | 99 | $ | 1,406 | ||||
| Escrow deposit | 10,000 | — | ||||||
| Total current assets | $ | 10,099 | $ | 1,406 | ||||
| LIABILITIES AND STOCKHOLDERS’ DEFICIT | ||||||||
| Current liabilities | ||||||||
| Accounts payable and accrued expenses | $ | 21,507 | $ | 11,568 | ||||
| Loan payable – President | 70,535 | 46,856 | ||||||
| Total current liabilities | 92,042 | 58,424 | ||||||
| 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 issued and outstanding | 205 | 205 | ||||||
| Additional paid-in capital | 1,775 | 1,775 | ||||||
| Deficit accumulated during the development stage | (83,923 | ) | (58,998 | ) | ||||
| Total stockholders’ deficit | (81,943 | ) | (57,018 | ) | ||||
| $ | 10,099 | $ | 1,406 | |||||
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, 2011 | September 30, 2010 | September 30, 2011 | ||||||||||
| Revenues | $ | — | $ | — | $ | — | ||||||
| General and administrative expenses | ||||||||||||
| Professional fees | 22,628 | 13,098 | 63,696 | |||||||||
| Organization costs | — | — | 14,868 | |||||||||
| Interest expense | 1,937 | 1,068 | 4,116 | |||||||||
| Sundry | 360 | — | 1,243 | |||||||||
| 24,925 | 14,166 | 83,923 | ||||||||||
| Net loss | $ | (24,925 | ) | $ | (14,166 | ) | $ | (83,923 | ) | |||
| Loss per common share: | ||||||||||||
| basic and diluted | $ | (0.012 | ) | $ | (0.007 | ) | ||||||
| Weighted average number of common shares outstanding, basic and diluted | 2,044,500 | 2,042,001 | ||||||||||
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, 2011 | September 30, 2010 | September 30, 2011 | ||||||||||
| Cash flows from operating activities: | ||||||||||||
| Net loss | $ | (24,925 | ) | $ | (14,166 | ) | $ | (83,923 | ) | |||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||||||
| Common stock issued for services | — | 380 | 780 | |||||||||
| Increases (decreases) in cash flows from operating activities resulting from changes in: | ||||||||||||
| Accounts payable and accrued expenses | 9,939 | 1,409 | 21,507 | |||||||||
| Escrow deposits | (10,000 | ) | — | (10,000 | ) | |||||||
| Net cash used in operating activities | (24,986 | ) | (12,377 | ) | (71,636 | ) | ||||||
| Cash flows from financing activities: | ||||||||||||
| Proceeds from issuance of Common Stock | — | — | 1,200 | |||||||||
| Loans from President | 23,679 | 13,738 | 70,535 | |||||||||
| Net cash provided by financing activities | 23,679 | 13,738 | 71,735 | |||||||||
| Net increase (decrease) in cash | (1,307 | ) | 1,361 | 99 | ||||||||
| Cash, beginning of period | 1,406 | 45 | — | |||||||||
| Cash, end of period | $ | 99 | $ | 1,406 | $ | 99 | ||||||
| Supplemental cash flow information: | ||||||||||||
| Non-cash financing activities: | ||||||||||||
| Common Stock issued for services | $ | — | $ | 380 | $ | 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 $.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 $.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 | ) | |||||||||||||
| Net loss for the year | — | — | — | (24,925 | ) | (24,925 | ) | |||||||||||||
| Balance, September 30, 2011 | 2,044,500 | $ | 205 | $ | 1,775 | $ | (83,923 | ) | $ | (81,943 | ) | |||||||||
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, 2011
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 September 2, 2011 entered into a Reverse Merger and Financial Advisory Agreement, see Notes H and I.
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, 2011
(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.
Cash and Cash Equivalents
Cash balances in banks are insured by the Federal Deposit Insurance Corporation subject to certain limitations. At times, balances may exceed insured limits. For purposes of the statement of cash flows, the Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents.
Loss Per Share
The Company uses 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
Generally accepted accounting principles ("GAAP") define fair value, provide guidance for measuring fair value and require certain disclosures. GAAP utilizes a fair value hierarchy which is categorized into three levels based on the inputs to the valuation techniques used to measure fair value. These principles discuss 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). These principles provide for a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The following is a brief description of those three levels:
| Level 1: | Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities. |
| Level 2: | Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active. |
| Level 3: | Unobservable inputs that reflect the Company's assumptions. |
| F-7 |
STALAR 1, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2011
(Continued)
Fair Value of Financial Instruments (continued)
The Company’s financial instruments consist of cash, escrow deposits, accounts payable and accrued expenses and loan payable – President. 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, 2011 and 2010, 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.
NOTE D – INCOME TAXES
As of September 30, 2011 there are loss carryforwards for Federal income tax purposes of approximately $78,000, 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, 2011 and 2010 the Company had a deferred tax asset amounting to approximately $27,500 and $19,200, 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 Steven R. Fox, the President and a director of the Company for total proceeds of $200.
Loan Payable – President
Steven R. Fox, the President and a director of the Company, 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 of 3.25% at September 30, 2011 (2010 – 3.25%).
| F-8 |
STALAR 1, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2011
(Continued)
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.
NOTE H – REVERSE MERGER AND FINANCIAL ADVISORY AGREEMENT
On September 2, 2011, the Company entered into a Reverse Merger and Financial Advisory Agreement, (the “Merger Agreement”), with Tianjin TEDA Hengyun Commerce and Trade Co., Ltd., (“Tianjin”). Pursuant to the Merger Agreement, Tianjin would either (i) effect a merger with the Company, or (ii) effect a merger with another entity upon mutual agreement of the two parties. 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. Additionally, the Merger Agreement prohibits Tianjin from soliciting, entertaining, negotiating, accepting or considering a merger transaction with any other entity.
NOTE I – ESCROW DEPOSIT
Pursuant to the Merger Agreement, see Note H, Tianjin placed $10,000 in escrow with the Company’s counsel for payment of costs and expenses associated with the merger transaction. If Tianjin falls to consummate the merger, through no fault of the Company, the proceeds of the escrow will be released to the Company as liquidated damages.
NOTE J – SUBSEQUENT EVENTS
During the course of its due diligence and discussions with Tianjin, Stalar 1, Inc. has elected to terminate the Merger Agreement, effective November 30, 2011. Stalar 1, Inc. will retain the escrowed funds as provided for in the Merger Agreement.
| F-9 |