10-Q 1 form10-q.htm STARINVEST GROUP, INC FORM 10Q 06.30.2010 form10-q.htm



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-Q

[X] QUARTERLY REPORT UNDER SECTION 13 OR 15 (D) OF
THE SECURITIES AND EXCHANGE ACT OF 1934

For the period ended June 30, 2010

Or

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (D) OF
THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _________to ______________

COMMISSION FILE NUMBER: 814-00652

StarInvest Group, Inc.
----------------------------------------------------------------------
(Exact name of registrant as specified in its charter)

                           Nevada                                                          91-1317131
                          -------------------------------                                         ------------------------------
                                        (State of other jurisdiction of incorporation or organization)              (IRS EmployerIdentification)                       

 
3300 North A Street Suite 2-210
Midland, Texas
(Address of principal executive offices)
 
79705
(Zip Code)

Registrant's Telephone Number: (432) 682-8373

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 of 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 is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer
 
Accelerated filer
Non-accelerated filer      
 
Smaller reporting companyx
(Do not check if a smaller reporting company)

State the number of shares outstanding of each of the issuer's classes of common equity, as the latest practicable date: There were 201,970,200 shares of the Registrant's common stock issued and outstanding as of August 16, 2010
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes  [  ]  No [ X ]
 
 
       
 


 
StarInvest Group, Inc.

FORM 10-Q

QUARTERLY PERIOD ENDED June 30, 2010

TABLE of CONTENTS

PART I - FINANCIAL INFORMATION 
PAGE
   
Item 1 - Financial Statements 
  3
   
Balance Sheets as of June 30, 2010 (Unaudited) and December 31, 2009 
  3
   
Statements of Operations (Unaudited) For the Three Months Ended June 30, 2010 and 2009
  4
   
Statements of Operations (Unaudited) For the Six Months Ended June 30, 2010 and 2009
  5
   
Statements of Cash Flows (Unaudited) For the Six Months Ended June 30, 2010 and 2009
  6
   
Statement of Investments for June 30, 2010
  7
   
Notes to Financial Statements
  7
   
Item 2 - Management's Discussion and Analysis of Financial Condition and Results of Operations                          11
   
Item 3 - Quantitative and Qualitative Disclosures about Market Risk
  16
   
Item 4 - Controls and Procedures 
  16
   
PART II - OTHER INFORMATION 
  17
   
Item 1 - Legal Proceedings 
  17
   
Item 1A – Risk Factors 
  17
   
Item 2 - Unregistered Sales of Equity Securities and Use of Proceeds 
  17
   
Item 3 - Default upon Senior Securities 
  17
   
Item 4 - Submission of Matters to a Vote of Security Holders 
  17
   
Item 5 - Other Information
  18
   
Item 6 – Exhibits 
  18
   
Signatures
  18

 
2

 
 
Item 1 - Financial Statements

STARINVEST GROUP, INC.
 
BALANCE SHEET
 
AS OF JUNE 30, 2010 & DECEMBER 31, 2009
 
             
   
2010
   
2009
 
ASSETS
 
(unaudited)
   
(audited)
 
   Current Assets
           
       Cash
  $ 7,108     $ 11,527  
       Receivable, deposits and other
    19,267       179,476  
         Total current assets
    26,375       191,003  
                 
       Computers and software (net)
    148,187       150,809  
                 
                 
   Investments and loans (cost of $649,999 & $649,999)
    675,853       721,630  
   Website and organization costs (net)
    670,535       619,415  
   Goodwill
    2,070,010       2,070,010  
                 
         Total assets
  $ 3,590,960     $ 3,752,867  
                 
                 
LIABILITIES AND STOCKHOLDERS' EQUITY
               
                 
   Current liabilities
               
       Accounts payable and accrued expenses
  $ 789,291     $ 671,891  
       Loans payable
    1,763,740       1,143,526  
         Total current liabilities
    2,553,031       1,815,417  
                 
       Long term liabilities
    25,000       27,752  
                 
   Stockholders' equity
               
      Common stock, $.001 par value, 900,000,000 shares
               
       authorized; 201,620,200 and 201,620,200 shares issued
               
       and outstanding, respectively
    201,970       201,620  
      Additional paid-in-capital
    16,585,394       16,135,579  
      Accumulated deficit
    (15,774,435 )     (14,427,501 )
         Total stockholders' equity
    1,012,929       1,909,698  
                 
         Total liabilities and stockholders' equity
  $ 3,590,960     $ 3,752,867  
 
 
 
3

 

 
STARINVEST GROUP, INC.
 
STATEMENT OF OPERATIONS
 
FOR THE THREE MONTHS ENDED JUNE 30,
 
             
   
2010
   
2009
 
   
(unaudited)
   
(unaudited)
 
Income
           
   Interest
  $ -     $ 11,250  
   Stock transfer income
    14,010       7,287  
   Consulting income
    25,046       4,866  
   Total income
    39,056       23,403  
       Cost of goods sold
    71,318       541  
   Gross Profit
    (32,262 )     22,862  
   Expenses:
               
       General and administrative
    215,859       71,813  
       Professional Fees
    62,969       9,187  
       Interest Expense
    16,505       10,187  
   Total expenses
    295,333       91,187  
                 
   Loss before other income (expenses)
    (327,595 )     (68,325 )
                 
Net Realized and Unrealized Gains (Losses):
               
       Net unrealized gain (loss) on investments
    (63,577 )     -  
   Total net gains (losses)
    (63,577 )     -  
                 
Net loss
  $ (391,172 )   $ (68,325 )
                 
    Basic earnings (loss) per common share
  $ (0.00 )   $ (0.00 )
    Diluted earnings (loss) per common share
  $ (0.00 )   $ (0.00 )
    Weighted average common shares outstanding - basic
    201,697,123       90,854,104  
    Weighted average common shares outstanding - diluted
    254,876,343       91,942,016  
                 





4




 
STARINVEST GROUP, INC.
 
STATEMENT OF OPERATIONS
 
FOR THE SIX MONTHS ENDED JUNE 30,
 
             
   
2010
   
2009
 
   
(unaudited)
   
(unaudited)
 
Income
           
   Interest
  $ 11,250     $ 22,500  
   Stock transfer income
    19,477       8,210  
   Consulting income
    60,219       4,866  
   Total income
    90,946       35,576  
       Cost of goods sold
    302,512       541  
   Gross Profit
    (211,566 )     35,035  
   Expenses:
               
       General and administrative
    409,237       152,936  
       Professional Fees
    141,013       57,510  
       Interest Expense
    32,203       19,695  
   Total expenses
    582,453       230,141  
                 
   Loss before other income (expenses)
    (794,019 )     (195,106 )
                 
Net Realized and Unrealized Gains (Losses):
               
       Net realized gain (loss) on investments
    -       9,399  
       Net unrealized gain (loss) on investments
    (77,026 )     -  
   Total net gains (losses)
    (77,026 )     9,399  
                 
Net loss
  $ (871,045 )   $ (185,707 )
                 
    Basic earnings (loss) per common share
  $ (0.00 )   $ (0.00 )
    Diluted earnings (loss) per common share
  $ (0.00 )   $ (0.00 )
    Weighted average common shares outstanding - basic
    201,658,874       90,854,104  
    Weighted average common shares outstanding - diluted
    246,758,585       91,898,303  
                 




5







STARINVEST GROUP, INC.
 
CONSOLIDATED STATEMENTS OF CASH FLOWS
 
FOR THE SIX MONTHS ENDED JUNE 30,
 
             
   
2010
   
2009
 
             
Cash flows from operating activities:
           
Net loss
  $ (871,045 )   $ (185,707 )
                 
Adjustments to reconcile net loss to net
               
  cash used in operating activities:
               
  Net unrealized loss in investments
    77,026       -  
  Depreciation and amortization
    51,502       6,488  
  Interest expense
    32,203       19,695  
  Interest income
    (11,250 )     (22,500 )
Changes in assets and liabilites
               
  (Increase) decrease in assets:
               
  (Increase) decrease in receivable and prepaid expenses
    160,209       (3,274 )
  Other assets
    (1,201 )     (1,201 )
Increase (decrease) in liabilities:
               
  Accounts payable and accrued expenses
    117,400       14,900  
   Total adjustments
    425,889       14,108  
                 
Net cash used in operating activities
    (445,156 )     (171,599 )
                 
Cash flows from investing activities
               
  Net cash (paid for) received from investments
    (108,263 )     34,124  
Net cash provided by investing activities
    (108,263 )     34,124  
                 
Cash flows from financing activities
               
  Net proceeds from (repayments of) loans
    549,000       150,000  
  Payment to repurchase shares
    -       -  
Net cash provided (used) by financing activities
    549,000       150,000  
                 
Net increase (decrease) in cash
    (4,419 )     12,525  
                 
Cash, beginning of period
    11,527       7,936  
                 
Cash, end of period
  $ 7,108     $ 20,461  
                 
                 

 

 
6



STARINVEST GROUP, INC.
STATEMENT OF INVESTMENTS
June 30, 2010


Portfolio Company
Business Description
Value -06/30/10
# Of Shares
Cost
Value
Status
             
Western Roses
Cemetery
$616,250
Loan
$450,000
616,250
Private
             
Crownbutte Wind Power, Inc.
Alternative Energy
  $59,603
315,215
$199,999
$59,603
CBWP.OB
             
Total
 
$676,853
 
$649,999
   
             



Notes to the Financial Statements June 30, 2010

NOTE 1 - ORGANIZATION AND BASIS OF PRESENTATION

The accompanying financial statements have been prepared by StarInvest Group, Inc. ("STIV" or the "Company") without audit. In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position as of June 30, 2009, and the results of operations and cash flows for all periods presented have been made.
 

Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted. These financial statements should be read in conjunction with the audited financial statements and related notes and schedules included in the Company's 2009 Annual Report filed on Form 10-K dated December 31, 2009. The results of operations for the periods ended June 30, 2010 and 2009 are not necessarily indicative of the operating results for the full years.

The Company is offering its services through its subsidiaries My Transfer Agent, LLC, Stocktransfer.com, EXX, LLC.

My Transfer Agent (“MTA”) provides "turn-key" solutions of transfer agent, legal, EDGAR and other related services to public and private companies. MTA serves as Transfer Agent performing the functions of original issue, cancellation and reissuance of stock certificates and uncertificated shares. MTA is committed to delivering a complete package of products and services focused on today's technology but never losing sight that service is the first priority.

Stock Transfer.com (“ST”) is an agent’s resource information providing the latest information about the stock transfer industry and providing consulting services for public and private companies.StockTransfer.com consolidates industry specific information to educate, inform and assist companies with finding information about being or going public. The site is also used as a vehicle to educate shareholders about their investments and give them access to services and professionals who can assist them.
 
 
7


EXX is in the business of building autonomous, efficient reliable and cost effective trading platforms in order to achieve Straight Through Processing (STP) in the financial industry.  The Company's main business is customizing proprietary platforms so from one program STP is enabled across all the financial networks.

The Company is also retaining a portion of its portfolio focused in a wide variety of different sectors including but not limited to alternative resources, technology, biotech, insurance, and services.  As of June 30, 2010, we invested approximately $ 649,999 in 2 companies.  The Company is looking to sell non core business as the financial sector has become our foundation to grow. The proceeds from the assets sales will be used to reduce debt and drive growth in MTA , Todd & Co and EXX.com.



NOTE 2 - INVESTMENTS

As of June 30, 2010, the Company has retained a portfolio of 2 investments for a total of approximately $649,999 in funded capital and with a current valuation of $ 675,853.  The Company’s investment portfolio consists of the following:

Portfolio Company
Description
Value
 
Crownbutte Wind Power, Inc
 
Equity
 
 
59,603
Western Roses
Loan
616,250
     
Total
 
675,853


As required by ASR 118, the investment committee of the company is required to assign a fair value to all investments. To comply with Section 2(a) (41) of the Investment Company Act and Rule 2a-4 under the Investment Company Act, it is incumbent upon the board of directors to satisfy themselves that all appropriate factors relevant to the value of securities for which market quotations are not readily available have been considered and to determine the method of arriving at the fair value of each such security. To the extent considered necessary, the board may appoint persons to assist them in the determination of such value, and to make the actual calculations pursuant to the board's direction. The board must also, consistent with this responsibility, continuously review the appropriateness of the method used in valuing each issue of security in the company's portfolio. The directors must recognize their responsibilities in this matter and whenever technical assistance is requested from individuals who are not directors, the findings of such intervals must be carefully reviewed by the directors in order to satisfy themselves that the resulting valuations are fair.

No single standard for determining "fair value...in good faith" can be laid down, since fair value depends upon the circumstances of each individual case. As a general principle, the current "fair value" of an issue of securities being valued by the board of directors would appear to be the amount which the owner might reasonably expect to receive for them upon their current sale. Methods which are in accord with this principle may, for example, be based on a multiple of earnings, or a discount from market of a similar freely traded security, or yield to maturity with respect to debt issues, or a combination of these and
other methods. Some of the general factors which the directors should consider in determining a valuation method for an individual issue of securities include:

1) the fundamental analytical data relating to the investment,

2) the nature and duration of restrictions on disposition of the securities, and
 
 
8


3) an evaluation of the forces which influence the market in which these securities are purchased and sold. Among the more specific factors which are to be considered are: type of security, financial statements, cost at date of purchase, size of holding, discount from market value of unrestricted securities of the same class at time of purchase, special reports prepared by analysis, information as to any transactions or offers with respect to the security, existence of merger proposals or tender offers affecting the securities, price and extent of public trading in similar securities of the issuer or comparable companies, and other relevant matters.

The board has arrived at the following valuation method for its investments. Where there is not a readily available source for determining the market value of any investment, either because the investment is not publicly traded, or is thinly traded, and in absence of a recent appraisal, the value of the investment shall be based on the following criteria:

1. Total amount of the Company's actual investment ("AI"). This amount shall include all loans, purchase price of securities, and fair value of securities given at the time of exchange.

2. Total revenues for the preceding twelve months ("R").

3. Earnings before interest, taxes and depreciation ("EBITD")

4. Estimate of likely sale price of investment ("ESP")

5. Net assets of investment ("NA")

6. Likelihood of investment generating positive returns (going concern).

The estimated value of each investment shall be determined as follows:

·  
Where no or limited revenues or earnings are present, then the value shall be the greater of the investment's a) net assets, b) estimated sales price, or c) total amount of actual investment.

·  
Where revenues and/or earnings are present, then the value shall be the greater of one time (1x) revenues or three times (3x) earnings, plus the greater of the net assets of the investment or the total amount of the actual investment.

·  
Under both scenarios, the value of the investment shall be adjusted down if there is a reasonable expectation that the Company will not be able to recoup the investment or if the Company has not retained independent appraisers to assist in the valuation of the portfolio investments because the cost was determined to be prohibitive for the current levels of investments.

NOTE 3 - EQUITY TRANSACTIONS

None.

 

 
9

 
 
NOTE 4 - LOANS PAYABLE
 

 
 
June 30, 2010
     December 31, 2009  
             
Convertible Debentures payable with and aggregate
           
Principal of $1,452,104 due March, 2013 at
           
3% per annum,  interest paid semi-annually.  Accrued
           
Interest on these convertible debentures at June 30, 2010
       
Is $26,421.
           
             
Theses loans are unsecured.
  $ 1,478,525     $ 895,260  
                 
Loan to Reese-Cole Partnership is secured
               
By the assets of Starinvest Group
  $ 140,215     $ 140,215  
                 
Current loans payable, no interest accrued
               
These loans are unsecured.
  $ 145,000     $ 110,803  
                 
 
               
Total current loans payable
  $ 1,763,740     $ 1,146,278  

 
10

 

NOTE 5 – CURRENT QUARTER EVENTS

On March 17, 2010, Todd & Company (“Todd”) received FINRA’s approval of the firm’s 1017 application and acceptance of StarInvest as the new owners. On June 21, 2010 the new management team of Todd was interviewed and approved by FINRA. On August 5, 2010, after several delays, Todd received a “Welcome Letter” from FINRA and it can now begin operations.

On May 5, 2010, StarInvest representing itself and the other investors in Western Roses, Inc (“WR”) foreclosed on the assets of the WR. Even though, STIV has been actively working with WR’s management to resolve the issue, WR has repeatedly failed to serve the $775,000 note. Also, in January 2010, it came to our knowledge that the Texas Department of Banking (TDB), which oversees perpetual care cemetery operations, decided to suspend the operations of Western Roses until certain deficiencies were corrected.  STIV to protect its investment in WR provided the manpower and capital to correct them, and on July 6, 2010, the TDB inspected the facilities and the records and confirmed that all of the deficiencies were corrected.  In the meantime, STIV has setup West Texas Memorial Park, Inc (“WTMP”) a newco to transfer the assets of WR, and we are currently awaiting approval from the TDB to have the perpetual fund transferred into WTMP. Since May 2010, the management has been been interviewing prospective candidates for the management position.  We are pleased to have found the right person in Bob Roberts. Mr. Roberts will officially begin as General Manager on September 1, 2010.

On May 12, 2010, Leon’s Urbaitel informed the Company about his resignation from his position as President of My Transfer Agent, LLC. Mr. Urbaitel was hired in July 2008.
 
On June 30, 2010 STIV management decided to suspend EXX operation.  The main reason for the management’s decision was the unexpected delay in the approval of Todd & Company. Without the support of an operational Broker/Dealer, EXX has been unable to recognize revenues while, at the same time, has been forced to maintain the system. The cost of running the system without receiving revenues led to the decision to suspend EXX’s services until Todd was approved by FINRA.  Now, that we have received approval, we will concentrate our resources to revamp Todd’s operations and to reestablish EXX services. StarInvest still retains ownership of the complete EXX system, including codes and programs that are at the core of the system. STIV has hired the Bamford Group, Inc, an external IT solutions provider to re-start operations, increase efficiency, and lower the maintenance costs. STIV is also looking for a professional and specialized team to replace part or all members of the previous management. The management is currently looking into taking legal action against some of the previous owners of EXX. The Company believes the previous owners have breached their contracts and their fiduciary responsibility on several occasions, and it is evaluating any possible legal actions to defend its investment in EXX, LLC.
 
 

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

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

FORWARD-LOOKING STATEMENTS

This Form 10-Q contains forward-looking statements that involve substantial risks and uncertainties. These forward-looking statements are not historical facts, but rather are based on current expectations, estimates and projections about our industry, our beliefs, and our assumptions. Words such as “anticipates,” “expects,” “intends,” “plans,” “believes,” “seeks,” and “estimates” and variations of these words and similar expressions are intended to identify forward-looking statements. These statements are not guarantees of future performance and are subject to risks, uncertainties, and other factors, some of which are beyond our control and difficult to predict and could cause actual results to differ materially from those expressed or forecasted in the forward-looking statements. Although we believe that the assumptions on which these forward-looking statements are based are reasonable, any of those assumptions could prove to be inaccurate, and as a result, the forward-looking statements based on those assumptions also could be inaccurate. Important assumptions include our ability to originate new loans and investments, certain margins and levels of profitability and the availability of additional capital. In light of these and other uncertainties, the inclusion of a projection or forward-looking statement in this Form 10-Q should not be regarded as a representation by us that our plans and objectives will be achieved. In addition, you should carefully consider the factors discussed in Part I, “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2009, which could materially affect our business, financial condition or future results.  These risks are not the only risks facing our Company. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition and/or operating results.  Our actual results may differ significantly from the results projected in the forward-looking statements.   We assume no obligation to update forward-looking statements, except as otherwise required under the applicable federal securities laws.
 
 
11


CRITICAL ACCOUNTING POLICIES

Our financial statements and related public financial information are based on the application of accounting principles generally accepted in the United States of America ("GAAP"). GAAP requires the use of estimates; assumptions, judgments and subjective interpretations of accounting principles that have an impact on the assets, liabilities, revenue and expense amounts reported. These estimates can also affect supplemental information contained in our external disclosures including information regarding contingencies, risk and financial condition. We believe our use of estimates and underlying accounting assumptions adhere to GAAP and are consistently and conservatively applied. Valuations based on estimates are reviewed by us for reasonableness and conservatism on a consistent basis. Primary areas where our financial information is subject to the use of estimates, assumptions and the application of judgment include acquisitions, valuation of investments, and the realizability of deferred tax assets. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. Actual results may differ materially from these estimates under different assumptions or conditions.

VALUATION OF LONG-LIVED AND INTANGIBLE ASSETS

The recoverability of long-lived assets requires considerable judgment and is evaluated on an annual basis or more frequently if events or circumstances indicate that the assets may be impaired. As it relates to definite life intangible assets, we apply the impairment rules as required by SFAS No. 121, "Accounting for the Impairment of Long-Lived Assets and Assets to Be Disposed Of" as amended by SFAS No. 144, which also requires significant judgment and assumptions related to the expected future cash flows attributable to the intangible asset. The impact of modifying any of these assumptions can have a significant impact on the estimate of fair value and, thus, the recoverability of the asset.

INCOME TAXES

We recognize deferred tax assets and liabilities based on the differences between the financial statement carrying amounts and the tax bases of assets and liabilities. We regularly review our deferred tax assets for recoverability and establish a valuation allowance based upon historical losses, projected future taxable income and the expected timing of the reversals of existing temporary differences. As of June 30, 2009, we estimated the allowance on net deferred tax assets to be one hundred percent of the net deferred tax assets.

VALUATION OF INVESTMENTS

As required by ASR 118, our investment committee is required to assign a fair value to all investments. To comply with Section 2(a) (41) of the Investment Company Act and Rule 2a-4 under the Investment Company Act, it is incumbent upon the board of directors to satisfy themselves that all appropriate factors relevant to the value of securities for which market quotations are not readily available have been considered and to determine the method of arriving at the fair value of each such security. To the extent considered necessary, the board may appoint persons to assist them in the determination of such value, and to make the actual calculations pursuant to the board's direction. The board must also, consistent with this responsibility, continuously review the appropriateness of the method used in valuing each issue of security in our portfolio. The directors must recognize their responsibilities in this matter and whenever technical assistance is requested from individuals who are not directors, the findings of such intervals must be carefully reviewed by the directors in order to satisfy themselves that the resulting valuations are fair.

No single standard for determining "fair value...in good faith" can be laid down, since fair value depends upon the circumstances of each individual case. As a general principle, the current "fair value" of an issue of securities being valued by the board of directors would appear to be the amount which the owner might reasonably expect to receive for them upon their current sale. Methods which are in accord with this principle may, for example, be based on a multiple of earnings, or a discount from market of a similar freely traded security, or yield to maturity with respect to debt issues, or a combination of these and other methods. Some of the general factors which the directors should consider in determining a valuation method for an individual issue of securities include:
 
 
12


1) the fundamental analytical data relating to the investment, 2) the nature and duration of restrictions on disposition of the securities, and 3) an evaluation of the forces which influence the market in which these securities are purchased and sold. Among the more specific factors which are to be considered are: type of security, financial statements, cost at date of purchase, size of holding, discount from market value of unrestricted securities of the same class at time of purchase, special reports prepared by analysis, information as to any transactions or offers with respect to the security, existence of merger proposals or tender offers affecting the securities, price and extent of public trading in similar securities of the issuer or comparable companies, and other relevant matters.

The board has arrived at the following valuation method for its investments. Where there is not a readily available source for determining the market value of any investment, either because the investment is not publicly traded, or is thinly traded, or in the absence of a recent appraisal, the value of the investment shall be based on the following criteria:

1.
Total amount of our actual investment ("AI"). This amount shall include all loans, purchase price of securities, and fair value of securities given at the time of exchange.

2.
Total revenues for the preceding twelve months ("R").

3.
Earnings before interest, taxes and depreciation ("EBITD")

4.
Estimate of likely sale price of investment ("ESP")

5.
Net assets of investment ("NA")

6.
Likelihood of investment generating positive returns (going concern).

The estimated value of each investment shall be determined as follows:

·  
Where no or limited revenues or earnings are present, then the value shall be the greater of the investment's a) net assets, b) estimated sales price, or c) total amount of actual investment.
·  
Where revenues and/or earnings are present, then the value shall be the greater of one time (1x) revenues or three times (3x) earnings, plus the greater of the net assets of the investment or the total amount of the actual investment.
·  
Under both scenarios, the value of the investment shall be adjusted down if there is a reasonable expectation that we will not be able to recoup the investment or if there is reasonable doubt about the investments ability to continue as a going concern.

We have not retained independent appraisers to assist in the valuation of the portfolio investments because the cost was determined to be prohibitive for the current levels of investments.


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OUR STRATEGY

The Company’s strategy is focused on offering a full menu of services in the financial sector through its subsidiaries.

As a result of our October 16, 2009 acquisition of EXX.COM, LLC, the Company is now forming a strategy to expand the customer base of EXX.com into our Broker Dealer (BD). The ECN platform will provide quote services, news retrieval, charting, option chain pricing and archive all trading information, for readily accessibility, as required by securities regulations in the financial industry. In addition customers of our BD and EXX will have remote access to viewing and executing orders on the EXX platform with NYSE, FINRA, OTC markets,, OTC BB , OTC Pink sheets and option markets. The EXX Customer support desk will facilitate traditional services for clients looking for direct assistance. The institutional application is a cost effective, compliant focused flexible system with unique characteristics welcomed by institutional customers. The strategy for MTA is to acquire smaller transfer agents, to aggregate the customer base and introduce new technologies and services to its customers

RESULTS OF OPERATIONS


 Income

For the three months ended June 30, 2010 gross income totaled $39,056 as compared to $23,403 for the three months ended June 30, 2009. The primary difference was higher Consulting and Stock Transfer income currently as compared to the 2009 period.  For the six months ended June 30, 2010 gross income totaled $90,946 as compared to $35,576 for the six months ended June 30, 2009.  Gross income is up for the same reasons the three months were up.

 Expenses

For the three months ended June 30, 2010 expenses totaled $295,333 as compared to $91,187 for the three months ended June 30, 2009.  This increase in expenses is due to higher operating costs due to its new subsidiaries MTA & EXX.  For the six months ended June 30, 2010 expenses totaled $582,453 as compared to $230,141 for the six months ended June 30, 2009.

 Loss before other income

The Company’s loss before other income totaled $327,595 and $68,325, respectively for the three months ended June 30, 2010 and 2009.  This increase in loss is primarily due to the increased costs of running the subsidiaries.  The Company's loss before other income totaled $794,019 and $195,106, respectively for the six months ended June 30, 2010 and 2009.  This six month increase in loss is primarily due to more expenses due to the newly acquired companies in the current period as compared to the period ended June 30, 2009.

Net Realized Gains

The Company had a net realized gain of $9,399 for the six months ended June 30, 2009 as compared to no gains or losses realized for the six months ended June 30, 2010.

Net Unrealized Losses

There was $63,577 in net unrealized losses for the three months ended June 30, 2010 as compared to no unrealized losses for the comparable 2009 period.  There was $77,026 in net unrealized losses  for the six months ended June 30, 2010 as compared to no net unrealized losses for the six months ended June 30, 2009.  The net unrealized losses represent a lower market valuation for some of the Company's portfolio companies.
 
 
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Net Loss

The Company’s net loss totaled $391,172 and $68,325, respectively for the three months ended June 30, 2010 and 2009.  This increase in loss is primarily due to the increased operating costs of the subsidiaries for the period ended June 30, 2010.  The Company's net loss totaled $871,045 and $185,707, respectively for the six months ended June 30, 2010 and 2009.  The increase in loss is due to running the subsidiaries for the period ended June 30, 2010.

LIQUIDITY AND CAPITAL RESOURCES

For the six months ended June 30, 2010, net cash used by operating activities was $445,156 compared to $171,599 used by operating activities for the six months ended June 30, 2009.  The current six month’s usage was due to the net loss of $871,045, interest expense of $32,203, interest income of $11,250, depreciation and amortization of $51,502 and an increase in accounts payable and accrued expenses of $117,400.  In the corresponding period of 2009, cash was used primarily by the net loss of $185,707 and provided by interest expense of $19,695 and a decrease of $22,500 in non-cash interest income.

For the six months ended June 30, 2010, there was $108,263 in cash used by investing activities as compared to $34,124 of cash provided by investing activities for the six months ended June 30, 2009.  In 2009, the Company sold shares of investments on the open market and had some realized gains.

For the six months ended June 30, 2010, there was $549,000 provided by financing activities through the proceeds of loans.  For the comparable six month period ending June 30, 2009, there was $150,000 in cash provided by loan proceeds.

The Company anticipates a significant increase in capital expenditures to revamp Todd’s operations, reestablish EXX’s services, and to support the growth of MTA. These expenditures are subjected to obtaining additional financing, of which there can be no assurance. The Company's capital requirements depend on numerous factors, including market acceptance of the Company's investment ability to obtain additional financing, technological developments, capital expenditures and other factors. The Company has an immediate need for additional financing to continue operations. The Company is seeking to obtain additional capital through the sale of its securities and loans.  If the Company does not immediately receive additional financing, the Company will be required to cease operations. If the Company obtains additional financing, of which there can be no assurance, the Company may sell its equity securities. The sale of additional equity or convertible debt securities could result in additional dilution to stockholders. There can be no assurance that financing will be available in the required amounts or on terms acceptable to the Company, if at all.
CONTRACTUAL OBLIGATIONS

The following table summarizes our outstanding contractual obligations as of June 30, 2010

Contractual obligations
Payments due by period
Total
Less than 1 year
1-3 years
3-5 years
More than 5 years
[Long-Term Debt Obligations]
  1,763,740
 1,763,740
     
[Capital Lease Obligations]
         
[Operating Lease Obligations]
         
[Purchase Obligations]
      25,000
    25,000
     
[Other Long-Term Liabilities Reflected on the Registrant's Balance Sheet under GAAP]
         
Total
  1,788,740
 1,788,740
     
 
 
 
 
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OFF BALANCE SHEET ARRANGEMENTS

None.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Smaller reporting companies. A smaller reporting company, as defined by Rule 229.10(f)(1), is not required to provide the information required by this Item.

ITEM 4. CONTROLS AND PROCEDURES

a) Evaluation of Disclosure Controls and Procedures

Our Chief Executive Officer and Chief Financial Officer evaluated the effectiveness of our disclosure controls and procedures as of the end of the period covered by this report. Based on that evaluation, Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures as of the end of the period covered by this report were effective such that the information required to be disclosed by us in reports filed under the Securities Exchange Act of 1934 is (i) recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms and (ii) accumulated and communicated to the Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding disclosure. A controls system cannot provide absolute assurance, however, that the objectives of the controls system are met, and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company have been detected.

Our Chief Executive Officer and Chief Financial Officer is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act). Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Therefore, even those systems determined to be effective can provide only reasonable assurance of achieving their control objectives. Furthermore, smaller reporting companies face additional limitations. Smaller reporting companies employ fewer individuals and find it difficult to properly segregate duties. Often, one or two individuals control every aspect of the Company's operation and are in a position to override any system of internal control. Additionally, smaller reporting companies tend to utilize general accounting software packages that lack a rigorous set of software controls.

b) Changes in Internal Control over Financial Reporting.

During the Quarter ended June 30, 2010, there was no change in our internal control over financial reporting (as such term is defined in Rule 13a-15(f) under the Exchange Act) that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
 

LACK OF INDEPENDENT BOARD OF DIRECTORS AND AUDIT COMMITTEE

Management is aware that an audit committee composed of the requisite number of independent members along with a qualified financial expert has not yet been established.  Considering the costs associated with procuring and providing the infrastructure to support an independent audit committee and the limited number of transactions, Management has concluded that the risks associated with the lack of an independent audit committee are not justified.  Management will periodically reevaluate this situation.
 
 
 
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LACK OF SEGREGATION OF DUTIES

Management is aware that there is a lack of segregation of duties at the Company due to the small number of employees dealing with general administrative and financial matters. However, at this time management has decided that considering the abilities of the employees now involved and the control procedures in place, the risks associated with such lack of segregation are low and the potential benefits of adding employees to clearly segregate duties do not justify the substantial expenses associated with such increases.  Management will periodically reevaluate this situation

PART II. OTHER  INFORMATION

ITEM 1. Legal Proceedings

There are no legal proceedings that have occurred within the past five years concerning our directors, or control persons which involved a criminal conviction, a criminal proceeding, an administrative or civil proceeding limiting one's participation in the securities or banking industries, or a finding of securities or commodities law violations.

There are no material legal proceedings to which any director, officer or affiliate of the Company, any owner of record or beneficially of more than five percent of any class of voting securities of the Company, or any associate of any such director, officer, affiliate of the Company, or security holder is a party adverse to the Company or has a material interest adverse to the Company.

Item 1.A  RISK FACTORS

There are no material changes from the risk factors previously disclosed in the Company’s Annual Report for the year ended December 31, 2009 filed March 31, 2010.
 
 
ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds
 
On June 11, 2010, the Company has agreed to issue 350,000 restricted common shares valued $9,000 for services provided to the Company by Sabrina Kozuch. The securities described above were issued in reliance on the exemption from registration set forth in Section 4(2) of the Securities Act of 1933.


ITEM 3. Defaults Upon Senior Securities

 
STIV defaulted on the $140,215 six month note from Reese-Cole Partnership (RCP). The maturity date was June 16, 2010 and the parties agreed to extend it to August 16, 2010.
 

ITEM 4. Submission of Matters to Vote of Security Holders

None.
 
 
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ITEM 5. Other Information

None.


 ITEM 6. Exhibits and Reports on Form 8-K

None.

(a) Exhibits

Exhibit No.   Description
------   -----------

31.1      Certification by Chief Executive Officer Pursuant to Section 302

31.2      Certification by Chief Financial Officer Pursuant to Section 302

32.1      Certification by Chief Executive Officer Pursuant to Section 906
 
32.2  Certification by Chief Financial Officer Pursuant to Section 906

(b) Reports on Form 8-K None

SIGNATURE PAGE

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

Date: August 16, 2010
 
/s/ Robert H. Cole
-------------------------
Robert H. Cole
Chief Executive Officer
 
 
 
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