UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
(MARK ONE)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2000.
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: 000-26045
ASTIR, INC.
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(Exact name of small business issuer as specified in its charter)
Nevada 88-0306861
---------------------------------------- --------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
8100 West Sahara Ave., Suite 200
Las Vegas, Nevada 89117
---------------------------------------- --------------------
(Address of principal executive offices) (Zip Code)
N/A
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(Former name, former address and former fiscal year, if changed
since last report.)
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 past 12 months (or for such shorter period that the registrant was required
to file such reports), and 2) has been subject to such filing requirements for
the past 90 days.
YES [X] NO [ ]
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date:
At September 30, 2000, there were 2,500,000 issued and oustanding
shares of the Registrant's Common Stock, $.001 par value.
Transitional Small Business Disclosure Format (check one):
YES [ ] NO [X]
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<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
ASTIR, INC.
FINANCIAL STATEMENTS
TABLE OF CONTENTS
Page
------
Independent Auditor's Report 3
Financial Statements
Balance Sheets 4
Statements of Operations 5-6
Statements of Stockholders' Equity 7
Statements of Cash Flows 8-9
Notes to Financial Statements 10-11
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<PAGE>
Independent Auditor's Report
Board of Directors
Astir, Inc.
Las Vegas, Nevada
I have audited the accompanying balance sheets of Astir, Inc. (a
development stage company), as of September 30, 2000 and December 31, 1999 and
as of December 31, 1998 and the related statements of operations, changes in
stockholders' equity and cash flows for the nine-month period and the years then
ended. These financial statements are the responsibility of the Company's
management. My responsibility is to express an opinion on these financial
statements based on my audit.
I conducted my audit in accordance with generally accepted auditing
standards. Those standards require that I plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
I believe that my audit provides a reasonable basis for my opinion.
In my opinion, the financial statements referrred to above present fairly,
in all material respects, the financial position of Astir, Inc. (a development
stage company) at September 30, 2000 and at December 31, 1999 and at December
31, 1998, and the results of its operations and its cash flows for the nine
month period and years then ended in conformity with generally accepted
accounting principles.
The accompanying financial statements have been prepared assuming the
Company will continue as a going concern. As discussed in Note 3 to the
financial statements, the Company has had no operations and has no established
source of revenue. This raises substantial doubt about its ability to continue
as a going concern. Management's plan in regard to these matters are also
described in Note 3. The financial statements do not include any adjustments
that might result from the outcome of this uncertainty.
/s/ KURT D. SALIGER, C.P.A.
----------------------
KURT D. SALIGER
CERTIFIED PUBLIC ACCOUNTANT
November 3, 2000
Las Vegas, Nevada
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<PAGE>
ASTIR, INC.
(A Development Stage Company)
BALANCE SHEETS
<TABLE>
<CAPTION>
Sept. 30, 2000 December 31, 1999 December 31, 1998
<S> <C> <C> <C>
ASSETS
CURRENT ASSETS
Cash $ 176 $ 315 $ 900
-------------- ----------------- -----------------
TOTAL CURRENT ASSETS $ 176 $ 315 $ 900
-------------- ----------------- -----------------
TOTAL ASSETS $ 176 $ 315 $ 900
============== ================= =================
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Officers Advances $ 8,165 $ 7,265 $ 7,265
-------------- ----------------- -----------------
TOTAL CURRENT LIABILITIES $ 8,165 $ 7,265 $ 7,265
LONG-TERM DEBT $ 0 $ 0 $ 0
STOCKHOLDERS' EQUITY
Common stock: $.001 par value
authorized 50,000,000 shares;
issued and outstanding
2,500,000 shares $ 2,500 $ 2,500 $ 2,500
Additional Paid in Capital $ 0 $ 0 $ 0
Deficit Accumulated
During Development Stage (10,489) (9,450) (8,865)
--------------- ----------------- -----------------
TOTAL STOCKHOLDERS' EQUITY $ ( 7,989) $ (6,950) $ (6,365)
--------------- ----------------- -----------------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 176 $ 315 $ 900
=============== ================= =================
</TABLE>
See Accompanying Notes to Financial Statements.
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<PAGE>
ASTIR, INC.
(A Development Stage Company)
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
Jan. 1, 2000 Sept. 21, 1993
to Sept. 30, (inception) to
2000 Sept. 30, 2000
----------- --------------
<S> <C> <C>
INCOME
REVENUES $ 0 $ 0
----------- --------------
TOTAL INCOME $ 0 $ 0
EXPENSES
General and administrative $ 1,039 $ 10,489
----------- --------------
TOTAL EXPENSES $ 1,039 $ 10,489
----------- --------------
NET PROFIT (LOSS) $ (1,039) $ (10,489)
=========== ==============
NET PROFIT (LOSS) PER SHARE $ (0.0004) $ (0.0042)
=========== ==============
AVERAGE NUMBER OF SHARES
OF COMMON STOCK OUTSTANDING 2,500,000 2,500,000
=========== ==============
</TABLE>
See Accompanying Notes to Financial Statements.
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<PAGE>
ASTIR, INC.
(A Development Stage Company)
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
Jan. 1, 1999 Jan. 1, 1998
to Dec. 31, to
1999 Dec. 31, 1998
----------- --------------
<S> <C> <C>
INCOME
REVENUES $ 0 $ 0
----------- --------------
TOTAL INCOME $ 0 $ 0
EXPENSES
General and administrative $ 585 $ 6,365
----------- --------------
TOTAL EXPENSES $ 585 $ 6,365
----------- --------------
NET PROFIT (LOSS) $ (585) $ (6,365)
=========== ==============
NET PROFIT (LOSS) PER SHARE $ (0.0002) $ (0.0025)
=========== ==============
AVERAGE NUMBER OF SHARES
OF COMMON STOCK OUTSTANDING 2,500,000 2,500,000
=========== ==============
</TABLE>
See Accompanying Notes to Financial Statements.
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<PAGE>
ASTIR, INC.
(A Development Stage Company)
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
September 30, 2000
December 31, 1999
December 31, 1998
<TABLE>
<CAPTION>
Common Stock
--------- (Deficit)
Number Additional Accumulated
of Paid-In During
Shares Amount Capital Development Stage
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Balance at December 31, 1997 2,500,000 $ 2,500 $ 0 $ (2,500)
Net (Loss) year ended
December 31, 1998 $ (6,365)
----------- ----------- ----------- -----------
Balance at December 31, 1998 2,500,000 $ 2,500 $ 0 $ (8,865)
Net (Loss), year ended
December 31, 1999 $ (585)
----------- ----------- ----------- -----------
Balance at Dec. 31, 1999 2,500,000 $ 2,500 $ 0 $ (9,450)
Net (Loss), nine months ended
September 30, 2000 $ (1,039)
----------- ----------- ----------- -----------
Balance September 30, 2000 2,500,000 $ 2,500 $ 0 $ (10,489)
=========== =========== =========== ===========
</TABLE>
See Accompanying Notes to Financial Statements.
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<PAGE>
ASTIR, INC.
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Jan. 1, 2000 Sept. 21, 1993
to Sept. 30, (inception) to
2000 Sept. 30, 2000
----------- --------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $ (1,039) $ (10,489)
Adjustment to reconcile net (loss) to
net cash provided by operating activities:
Increase in officers advances $ 900 $ 8,165
----------- --------------
Net cash provided (used) by
operations $ (139) $ (2,324)
----------- --------------
CASH FLOWS FROM INVESTING ACTIVITIES $ 0 $ 0
CASH FLOWS FROM FINANCING ACTIVITIES
Issue common stock $ 0 $ 2,500
----------- --------------
Net increase (decrease) cash $ (139) $ 176
Cash, Beginning of Period $ 315 $ 0
----------- --------------
Cash, Ending of Period $ 176 $ 176
=========== ==============
</TABLE>
See Accompanying Notes to Financial Statements
-8-
<PAGE>
ASTIR, INC.
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Jan. 1, 1999 Jan. 1, 1998
to Dec. 31, to
1999 Dec. 31, 1998
----------- --------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $ (585) $ (6,365)
Adjustment to reconcile net (loss) to
net cash provided by operating activities:
Increase in officers advances $ 0 $ 7,265
----------- --------------
Net cash provided (used) by
operations $ (585) $ 900
----------- --------------
CASH FLOWS FROM INVESTING ACTIVITIES $ 0 $ 0
CASH FLOWS FROM FINANCING ACTIVITIES
Issue common stock $ 0 $ 0
----------- --------------
Net increase (decrease) cash $ (585) $ 900
Cash, Beginning of Period $ 900 $ 0
----------- --------------
Cash, Ending of Period $ 315 $ 900
=========== ==============
</TABLE>
See Accompanying Notes to Financial Statements
-9-
<PAGE>
ASTIR, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
September 30, 2000
December 31, 1999
December 31, 1998
NOTE 1- HISTORY AND ORGANIZATION OF THE COMPANY
THE COMPANY WAS ORGANIZED IN SEPTEMBER 21, 1993 UNDER THE LAWS OF THE STATE OF
NEVADA. THE COMPANY CURRENTLY HAS NO OPERATIONS AND, IN ACCORDANCE WITH SFAS #7,
IS CONSIDERED A DEVELOPMENT STAGE COMPANY.
ON OCTOBER 20, 1993 THE COMPANY ISSUED 2,500,000 SHARES OF $0.001 PAR VALUE
COMMON STOCK FOR $2,500 IN CASH.
ON JULY 22, 1998, THE STATE OF NEVADA APPROVED THE COMPANY'S RESTATED ARTICLES
OF INCORPORATION, WHICH INCREASED ITS CAPITALIZATION FROM 3,000,000 COMMON
SHARES TO 50,000,000 COMMON SHARES. THE PAR VALUE OF THE COMMON STOCK WAS
UNCHANGED AT $0.001 PER SHARE.
NOTE 2- ACCOUNTING POLICIES AND PROCEDURES
THE COMPANY HAS NOT DETERMINED ITS ACCOUNTING POLICIES AND PROCEDURES, EXCEPT
AS FOLLOWS:
A) THE COMPANY USES THE ACCRUAL METHOD OF ACCOUNTING.
B) EARININGS OR LOSS PER SHARE IS CALULATED USING THE NUMBER OF SHARES OF
COMMON STOCK OUTSTANDING AS OF THE BALANCE SHEET DATE.
C) THE COMPANY HAS NOT YET ADOPTED ANY POLICY REGARDING PAYMENT OF
DIVIDENDS. NO DIVIDENDS HAVE BEEN PAID SINCE INCEPTION.
NOTE 3- GOING CONCERN
THE COMPANY'S FINANCIAL STATEMENTS ARE PREPARED USING THE GENERALLY ACCEPTED
ACCOUNTING PRINCIPLES APPLICABLE TO A GOING CONCERN. HOWEVER, THE COMPANY HAS NO
CURRENT SOURCE OF REVENUE. WITHOUT REALIZATION OF ADDITIONAL CAPITAL, IT WOULD
BE UNLIKELY FOR THE COMPANY TO CONTINUE AS A GOING CONCERN. IT IS MANAGEMENT'S
PLAN TO SEEK ADDITIONAL CAPITAL TO KEEP THE COMPANY OPERATING.
NOTE 4- WARRANTS AND OPTIONS
THERE ARE NO WARRANTS OR OPTIONS OUTSTANDING TO ACQUIRE ANY ADDITIONAL SHARES OF
COMMON STOCK.
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<PAGE>
ASTIR, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
September 30, 2000
December 31, 1999
December 31, 1998
NOTE 5- RELATED PARTY TRANSACTIONS
THE COMPANY NEITHER OWNS OR LEASES ANY REAL OR PERSONAL PROPERTY. OFFICE
SERVICES ARE PROVIDED WITHOUT CHARGE BY A DIRECTOR. SUCH COSTS ARE IMMATERIAL
TO THE FINANCIAL STATEMENTS AND ARE NOT REFLECTED. THE OFFICERS AND DIRECTORS
OF THE COMPANY ARE INVOLVED IN OTHER BUSINESS OPPORTUNITIES AND MAY, IN THE
FUTURE, BECOME INVOLVED IN ANOTHER BUSINESS OPPORTUNITY. IF A SPECIFIC
BUSINESS BECOMES AVAILABLE, SUCH PERSONS MAY FACE A CONFLICT IN SELECTING
BETWEEN THE COMPANY AND THEIR OTHER BUSINESS INTERESTS. THE COMPANY HAS NOT
FORMULATED A POLICY FOR THE RESOLUTION OF SUCH CONFLICTS.
NOTE 6- OFFICERS ADVANCES
WHILE THE COMPANY IS SEEKING ADDITIONAL CAPITAL THROUGH A MERGER WITH AN
EXISTING OPERATING COMPANY, AN OFFICER OF THE COMPANY HAS ADVANCED FUNDS ON
BEHALF OF THE COMPANY TO PAY FOR COSTS INCURRED BY IT. THESE FUNDS ARE INTEREST
FREE.
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<PAGE>
Item 2. MANAGEMENT'S PLAN OF OPERATION
NOTE REGARDING PROJECTIONS AND FORWARD LOOKING STATEMENTS
This statement includes projections of future results and "forward-looking
Statements" as that term is defined in Section 27A of the Securities Act of 1933
as amended ( the "Securities Act" ), and Section 21E of the Securities Exchange
Act of 1934 as amended (the "Exchange Act"). All statements that are included in
this Registration Statement, other than statements of historical fact, are
forward-looking statements. Although Management believes that the expectations
reflected in these forward-looking statements are reasonable, it can give no
assurance that such expectations will prove to have been correct. Important
factors that could cause actual results to differ materially from the
expectations are disclosed in this Statement, including, without limitation, in
conjunction with those forward-looking statements contained in this Statement.
Plan of Operation - General
The Company's plan is to seek, investigate, and if such investigation warrants,
acquire an interest in one or more business opportunities presented to it by
persons or firms desiring the perceived advantages of a publicly held
corporation. At this time, the Company has no plan, proposal, agreement,
understanding, or arrangement to acquire or merge with any specific business or
company, and the Company has not identified any specific business or company for
investigation and evaluation. No member of Management or any promoter of the
Company, or an affiliate of either, has had any material discussions with any
other company with respect to any acquisition of that company. The Company will
not restrict its search to any specific business, industry, or geographical
location, and may participate in business ventures of virtually any kind or
nature. Discussion of the proposed business under this caption and throughout
this Registration Statement is purposefully general and is not meant to restrict
the Company's virtually unlimited discretion to search for and enter into a
business combination.
The Company may seek a combination with a firm with only recently commenced
operations, or a developing company in need of additional funds to expand into
new products or markets or seeking to develop a new product or service, or an
established business which may be experiencing financial or operating
difficulties and needs additional capital which is perceived to be easier to
raise by a public company. In some instances, a business opportunity may involve
acquiring or merging with a corporation which does not need substantial
additional cash but which desires to establish a public trading market for its
common stock. The Company may purchase assets and establish wholly - owned
subsidiaries in various businesses or purchase existing businesses as
subsidiaries.
Selecting a business opportunity will be complex and extremely risky. Because of
general economic conditions, rapid technological advances being made in some
industries, and shortages of available capital, management believes that there
are numerous firms seeking the benefits of a publicly-traded corporation. Such
perceived benefits of a publicly traded corporation may include facilitating or
improving the terms on which additional equity financing may be sought,
providing liquidity for the principals of a business, creating a means for
providing incentive stock options or similar benefits to key employees,
providing liquidity (subject to restrictions of applicable statues) for all
shareholders, and other items. Potentially available business opportunities may
occur in many different industries and at various stages of development, all of
which will make the task of comparative investigation and analysis of such
business opportunities extremely difficult and complex.
-12-
<PAGE>
Management believes that the Company may be able to benefit from the use of
"leverage" to acquire a target company. Leveraging a transaction involves
acquiring a business while incurring significant indebtedness for a large
percentage of the purchase price of that business. Through leveraged
transactions, the Company would be required to use less of its available funds
to acquire a target company and, therefore, could commit those funds to the
operations of the business, to combinations with other target companies, or to
other activities. The borrowing involved in a leveraged transaction will
ordinarily be secured by the assets of the acquired business. If that business
is not able to generate sufficient revenues to make payments on the debt
incurred by the Company to acquire that business, the lender would be able to
exercise the remedies provided by law or by contract. These leveraging
techniques, while reducing the amount of funds that the Company must commit to
acquire a business, may correspondingly increase the risk of loss to the
Company. No assurance can be given as to the terms or availability of financing
for any acquisition by the Company. During periods when interest rates are
relatively high, the benefits of leveraging are not as great as during periods
of lower interest rates, because the investment in the business held on a
leveraged basis will only be profitable if it generates sufficient revenues to
cover the related debt and other costs of the financing. Lenders from which the
Company may obtain funds for purposes of a leveraged buy-out may impose
restrictions on the future borrowing, distribution, and operating policies of
the Company. It is not possible at this time to predict the restrictions, if
any, which lenders may impose, or the impact thereof on the Company.
The Company has insufficient capital with which to provide the owners of
businesses significant cash or other assets. Management believes the Company
will offer owners of businesses the opportunity to acquire a controlling
ownership interest in a public company at substantially less cost than is
required to conduct an initial public offering. The owners of the businesses
will, however, incur significant post-merger or acquisition registration costs
in the event they wish to register a portion of their shares for subsequent
sale. The Company will also incur significant legal and accounting costs in
connection with the acquisition of a business opportunity, including the costs
of preparing post- effective amendments, Forms 8-K, agreements, and related
reports and documents.
Nevertheless, the officers and directors of the Company have not conducted
market research and are not aware of statistical data which would support the
perceived benefits of a merger or acquisition transaction for the owners of a
businesses. The Company does not intend to make any loans to any prospective
merger or acquisition candidates or to unaffiliated third parties.
The Company will not restrict its search for any specific kind of firms, but may
acquire a venture which is in its preliminary or development stage, which is
already in operation, or in essentially any stage of its corporate life. It is
impossible to predict at this time the status of any business in which the
Company may become engaged, in that such business may need to seek additional
capital, may desire to have its shares publicly traded, or may seek other
perceived advantages which the Company may offer. However, the Company does not
intend to obtain funds in one or more private placements to finance the
operation of any acquired business opportunity until such time as the Company
has successfully consummated such a merger or acquisition. The Company also has
no plans to conduct any offerings under Regulation S.
-13-
<PAGE>
Sources of Opportunities
The Company will seek a potential business opportunity from all known sources,
but will rely principally on personal contacts of its officers and directors as
well as indirect associations between them and other business and professional
people. It is not presently anticipated that the Company will engage
professional firms specializing in business acquisitions or reorganizations.
Management, while not especially experienced in matters relating to the new
business of the Company, will rely upon their own efforts and, to a much lesser
extent, the efforts of the Company's shareholders, in accomplishing the business
purposes of the Company. It is not anticipated that any outside consultants or
advisors, other than the Company's legal counsel and accountants, will be
utilized by the Company to effectuate its business purposes described herein.
However, if the Company does retain such an outside consultant or advisor, any
cash fee earned by such party will need to be paid by the prospective
merger/acquisition candidate, as the Company has no cash assets with which to
pay such obligation. There have been no discussions, understandings, contracts
or agreements with any outside consultants and none are anticipated in the
future. In the past, the Company's management has never used outside consultants
or advisors in connection with a merger or acquisition.
As is customary in the industry, the Company may pay a finder's fee for locating
an acquisition prospect. If any such fee is paid, it will be approved by the
Company's Board of Directors and will be in accordance with the industry
standards. Such fees are customarily between 1% and 5% of the size of the
transaction, based upon a sliding scale of the amount involved. Such fees are
typically in the range of 5% on a $1,000,000 transaction ratably down to 1% in a
$4,000,000 transaction. Management has adopted a policy that such a finder's fee
or real estate brokerage fee could, in certain circumstances, be paid to any
employee, officer, director or 5% shareholder of the Company, if such person
plays a material role in bringing a transaction to the Company.
The Company will not have sufficient funds to undertake any significant
development, marketing, and manufacturing of any products which may be acquired.
Accordingly, if it acquires the rights to a product, rather than entering into a
merger or acquisition, it most likely would need to seek debt or equity
financing or obtain funding from third parties, in exchange for which the
Company would probably be required to give up a substantial portion of its
interest in any acquired product. There is no assurance that the Company will be
able either to obtain additional financing or to interest third parties in
providing funding for the further development, marketing and manufacturing of
any products acquired.
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<PAGE>
Evaluation of Opportunities
The analysis of new business opportunities will be undertaken by or under the
supervision of the officers and directors of the Company (see "Management").
Management intends to concentrate on identifying prospective business
opportunities which may be brought to its attention through present associations
with management. In analyzing prospective business opportunities, management
will consider, among other factors, such matters as;
1. the available technical, financial and managerial resources
2. working capital and other financial requirements
3. history of operation, if any
4. prospects for the future
5. present and expected competition
6. the quality and experience of management services which may be
available and the depth of that management
7. the potential for further research, development or exploration
8. specific risk factors not now foreseeable but which then may be
anticipated to impact the proposed activities of the Company
9. the potential for growth or expansion
10. the potential for profit
11. the perceived public recognition or acceptance of products, services or
trades
12. name identification
Management will meet personally with management and key personnel of the firm
sponsoring the business opportunity as part of their investigation. To the
extent possible, the Company intends to utilize written reports and personal
investigation to evaluate the above factors. The Company will not acquire or
merge with any company for which audited financial statements cannot be
obtained. Opportunities in which the Company participates will present certain
risks, many of which cannot be identified adequately prior to selecting a
specific opportunity. The Company's shareholders must, therefore, depend on
Management to identify and evaluate such risks. Promoters of some opportunities
may have been unable to develop a going concern or may present a business in its
development stage (in that it has not generated significant revenues from its
principal business activities prior to the Company's participation.) Even after
the Company's participation, there is a risk that the combined enterprise may
not become a going concern or advance beyond the development stage. Other
opportunities may involve new and untested products, processes, or market
strategies which may not succeed. Such risks will be assumed by the Company and,
therefore, its shareholders.
The investigation of specific business opportunities and the negotiation,
drafting, and execution of relevant agreements, disclosure documents, and other
instruments will require substantial management time and attention as well as
substantial costs for accountants, attorneys, and others. If a decision is made
not to participate in a specific business opportunity the costs incurred in the
related investigation would not be recoverable. Furthermore, even if an
agreement is reached for the participation in a specific business opportunity,
the failure to consummate that transaction may result in the loss by the Company
of the related costs incurred.
There is the additional risk that the Company will not find a suitable target.
Management does not believe the Company will generate revenue without finding
and completing a transaction with a suitable target company. If no such target
is found, therefore, no return on an investment in the Company will be realized,
and there will not, most likely, be a market for the Company's stock.
-15-
<PAGE>
Acquisition of Opportunities
In implementing a structure for a particular business acquisition, the Company
may become a party to a merger, consolidation, reorganization, joint venture,
franchise, or licensing agreement with another corporation or entity. It may
also purchase stock or assets of an existing business. Once a transaction is
complete, it is possible that the present management and shareholders of the
Company will not be in control of the Company. In addition, a majority or all of
the Company's officers and directors may, as part of the terms of the
transaction, resign and be replaced by new officers and directors without a vote
of the Company's shareholders.
It is anticipated that securities issued in any such reorganization would be
issued in reliance on exemptions from registration under applicable Federal and
state securities laws. In some circumstances, however, as a negotiated element
of this transaction, the Company may agree to register such securities either at
the time the transaction is consummated, under certain conditions, or at
specified time thereafter. The issuance of substantial additional securities and
their potential sale into any trading market which may develop in the Company's
Common Stock may have a depressive effect on such market.
While the actual terms of a transaction to which the Company may be a party
cannot be predicted, it may be expected that the parties to the business
transaction will find it desirable to avoid the creation of a taxable event and
thereby structure the acquisition in a so called "tax free" reorganization under
Sections 368 (a) (1) or 351 of the Internal Revenue Code of 1986, as amended
(the "Code"). In order to obtain tax free treatment under the Code, it may be
necessary for the owners of the acquired business to own 80% or more of the
voting stock of the surviving entity. In such event, the shareholders of the
Company, including investors in this offering, would retain less than 20% of the
issued and outstanding shares of the surviving entity, which could result in
significant dilution in the equity of such shareholders.
As part of the Company's investigation, officers and directors of the Company
will meet personally with management and key personnel, may visit and inspect
material facilities, obtain independent analysis or verification of certain
information provided, check references of management and key personnel, and take
other reasonable investigative measures, to the extent of the Company's limited
financial resources and management expertise.
The manner in which the Company participates in an opportunity with a target
company will depend on the nature of the opportunity, the respective needs and
desires of the Company and other parties, the management of the opportunity, and
the relative negotiating strength of the Company and such other management.
With respect to any mergers or acquisitions, negotiations with target company
management will be expected to focus on the percentage of the Company which the
target company's shareholders would acquire in exchange for their shareholdings
in the target company. Depending upon, among other things, the target company's
assets and liabilities, the Company's shareholders will, in all likelihood, hold
a lesser percentage ownership interest in the Company following any merger or
acquisition. The percentage ownership may be subject to significant reduction in
the event the Company acquires a target company with substantial assets. Any
merger or acquisition effected by the Company can be expected to have a
significant dilutive effect on the percentage of shares held by the Company's
then shareholders, including purchasers in this offering.
Management has advanced, and will continue to advance, funds which shall be used
by the Company in identifying and pursuing agreements with target companies.
Management anticipates that these funds will be repaid from the proceeds of any
agreement with the target company, and that any such agreement may, in fact, be
contingent upon the repayment of those funds.
-16-
<PAGE>
Competition
The Company is an insignificant participant among firms which engage in business
combinations with, or financing of, development - stage enterprises. There are
many established management and financial consulting companies and venture
capital firms which have significantly greater financial and personal resources,
technical expertise and experience than the Company. In view of the Company's
limited financial resources and management availability, the Company will
continue to be at significant competitive disadvantage due to the
Company's competitors.
Regulation and Taxation
The Investment Company Act of 1940 defines an "investment company" as an issuer
which is or holds itself out as being engaged primarily in the business of
investing, reinvesting or trading securities. While the Company does not intend
to engage in such activities, the Company may obtain and hold a minority
interest in a number of development stage enterprises. The Company could be
expected to incur significant registration and compliance costs if required to
register under the Investment Company Act of 1940. Accordingly, management will
continue to review the Company's activities from time to time with a view toward
reducing the likelihood the Company could be classified as an "investment
company".The Company intends to structure a merger or acquisition in such manner
as to minimize Federal and state tax consequences to the Company and to any
target company.
Employees
The Company's only employees at the present time are its officers and directors,
who will devote as much time as the Board of Directors determine is necessary to
carry out the affairs of the Company.
-17-
<PAGE>
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits
Exhibit No. Description
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3.1 Articles of Incorporation
(Incorporated by reference from Form 10-SB/A filed on
July 19, 2000).
3.2 By-Laws
(Incorporated by reference from Form 10-SB/A filed on
July 19, 2000).
(b) Reports on Form 8-K
The Company has not filed any reports on Form 8-K.
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SIGNATURES
In accordance with the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.
ASTIR, INC.
----------------
(Name of Registrant)
Date: November 21, 2000 By: /s/ JORGE MELGAR
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JORGE MELGAR
PRESIDENT
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