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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 10-QSB
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[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the period ended: June 30, 2000
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (D) OF THE
SECURITIES EXCHANGE ACT OF 1934
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Commission File Number: 0-28861
INTERNATIONAL STAR, INC.
Incorporated pursuant to the Laws of the State of Nevada
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IRS Employer Identification No. - 86-0876846
2808 CHILDRESS, Las Vegas, NV 89109
(702) 869-8757
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Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Securities Exchange Act 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
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The Company had 27,480,000 shares of common stock outstanding at June 30, 2000.
Transitional Small Business Disclosure Format (check one): Yes No X
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<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
Balance Sheets as of June 30, 2000 ..............................3
Statements of Operations ........................................4
Statements of Cash Flows ........................................5
Notes to Consolidated Financial Statements (unaudited)...........6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations.......................8
PART II. OTHER INFORMATION .............................................9
Signature Page..........................................10
EXHIBITS
Financial Data Schedule .....................................EX 27
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<PAGE>
ITEM 1 - FINANCIAL STATEMENTS
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INTERNATIONAL STAR, INC.
Balance Sheet
<TABLE>
<CAPTION>
June 30, December 31,
2000 2000
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(Unaudited) (Audited)
ASSETS
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<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents $ 109 $ 3,073
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TOTAL CURRENT ASSETS $ 109 $ 3,073
FIXED ASSETS:
Equipment and Fixtures -- --
Less Accumulated Depreciation -- --
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NET FIXED ASSETS $ -- $ --
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TOTAL ASSETS $ 109 $ 3,073
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LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
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CURRENT LIABILITIES:
Payables and accrued interest $ 21,233 $ 17,731
Loans from individuals 80,000 80,000
Advances from affiliates/stockholders 104,011 99,642
Loan from affiliate/stockholder 63,965 57,500
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TOTAL CURRENT LIABILITIES $ 269,209 $ 254,873
STOCKHOLDERS' EQUITY:
Common stock, $.001 par value; authorized
100,000,000 shares, issued and outstanding
27,480,000 shares on June 30, 2000 and
December 31, 1999 27,480 27,480
Excess of par value over paid in capital (12,480) (12,480)
Accumulated deficit (284,100) (266,800)
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TOTAL STOCKHOLDER'S DEFICIT $ (269,100) $ (251,800)
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TOTAL LIABILITIES AND
STOCKHOLDER'S DEFICIT $ 109 $ 3,073
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</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS
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<PAGE>
INTERNATIONAL STAR, INC.
Statements of Operations
<TABLE>
<CAPTION>
Six Months Six Months Three Months Three Months
Ended Ended Ended Ended
June 30, 2000 June 30, 1999 June 30, 2000 June 30, 1999
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(Unaudited) (Unaudited) (Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
INCOME $ -- $ -- $ -- $ --
EXPENSES
Mineral development costs -- -- -- --
Interest Expense 3,503 750 1,778 375
General and administrative 13,797 18,948 9,406 8,246
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TOTAL EXPENSES $ 17,300 19,698 11,184 8,621
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NET LOSS $ (17,300) $ (19,698) $ (11,184) $ (8,621)
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Weighted Average Shares
Common Stock Outstanding 27,480,000 27,480,000 27,480,000 27,480,000
----------- ------------ ------------ -----------
NET LOSS PER COMMON SHARE $ (0.001) $ (0.001) $ (0.000) $ (0.000)
=========== ============ ============ ===========
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS
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<PAGE>
TESMARK, INC.
STATEMENT OF CASH FLOWS
<TABLE>
<CAPTION>
Six Months Six Months
Ended Ended
June 30, 2000 June 30, 1999
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(Unaudited) (Unaudited)
<S> <C> <C>
CASH FLOWS USED IN OPERATING ACTIVITIES:
Net Loss $ (17,300) $ (19,698)
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CASH FLOW USED IN OPERATING ACTIVITIES $ (17,300) $ (19,698)
CHANGES TO OPERATING ASSETS AND LIABILITIES:
Increase (decrease) in accounts
payable and accured interest 3,502 975
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CASH FLOWS USED IN OPERATING ACTIVITIES $ (13,798) $ (18,723)
CASH FLOWS FROM FINANCING ACTIVITIES:
Loans from individuals -- --
Advances from stockholders/affiliates 4,369 18,723
Loans from stockholders/affiliates 6,465 --
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CASH FLOWS FROM FINANCING ACTIVITIES $ 10,834 $ 18,723
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NET INCREASE (DECREASE) IN CASH $ (2,964) --
Cash at beginning of period 3,073 --
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Cash at end of period $ 109 $ --
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</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS
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<PAGE>
INTERNATIONAL STAR, INC.
Notes to Financial Statements
A. ORIGINATION AND HISTORY
International Star, Inc, ("the Company") was incorporated October 28, 1993 as a
Nevada corporation. On November 5, 1993, the Company Issued 2,500 shares, no par
value, for cash consideration of $5,000 in a 504 intrastate offering. The
Company amended its articles of incorporation on January 22, 1997 increasing its
authorized common stock from 2,500 shares to 100,000,000 shares and modified its
par value to $.001 per share.
In January 1997, the Company forward split its common stock to 6,000,000 shares
in a 2400:1 exchange. In April 1997, the Company again forward split its stock
5:1, increasing the total outstanding shares to 30,000,000 and in a
reorganization of outstanding shares canceled 17,400,000 shares, forward split
the balance of the shares 8:1 for an additional issuance of 10,080,000 shares to
the 12,600,000 shares outstanding and then issued 300,000 shares to the
shareholders who canceled the 17,400,000 shares, resulting in 22,980,000 shares
outstanding. Also, in April 1997, the Company issued 4,500,000 shares in
consideration of services performed by various individuals and corporations,
which services were valued at $10,000. The 4,500,000-share transaction, which
predates the 5:1 and 8:1 transactions were apparently not impacted by either of
the two aforementioned forward splits, resulting in 27,480,000 shares
outstanding.
In April 1997, the Company entered the waste management business. A loan of
$50,000 was obtained from an affiliated entity, American Holding Group, at 3%,
(no formal loan documents have been drafted), and the Company opened an office
in Idaho Falls, Idaho. Due to a lack of capital, the Company was only able to
obtain a small instrumentation sale for $17,444 to Asia Kingtec Co. LTD., in
Taiwan, in December 1997. The Company closed its office in January 1998 and
abandoned the computers and office equipment, purchased at $6,981, to the three
individuals who 1ead the Company into the waste management business.
The three individuals, who had been made officers and directors in connection
with the foray into the waste management business, resigned in August 1999. The
Company accepted the resignations on September 8, 1999.
The Company then refocused its efforts into mining in 1998. On March 3, 1998,
the Company entered into a mineral lease with James R. Ardoin. The lease does
not require any minimum royalty payments, and charges a royalty payment of 2%
of net smelter returns. The term of the lease is for 20 years. The Company has
not commenced commercial operations on the lease.
On July 17, 1998, the Company entered into an extraction agreement with AuRic
Metallurgical Laboratories, Inc., a Utah limited liability corporation, with the
requirement that the Company pay a 1 % net smelter return to AuRic for
utilization of its technology.
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<PAGE>
On October 12, 1998, the Company entered into a letter of intent with North
American Industrial Development Authority, Inc. (NAIDA). NAIDA, of Kingman,
Arizona, indicates that it desires to construct an investment in a mineral
processing plant to process ores from the Company's mineral property. NAIDA will
receive 15% of the total ore produced.
The Company's operations are conducted by the Company's officers and directors
through their own accounts. The Company's offices, general and administrative
expenses have all been advanced by these individuals and corporations and
accounted for as advances from affillates/shareholders. The Company has no
ability to repay its accounts payable, loans and advances from affiliates as the
Company has no assets.
B. LOANS FROM INDIVIDUALS
On August 15, 1999 the Company borrowed $80,000 from four individuals, bearing
an interest rate of 6%. The eighteen-month notes will mature on February 15,
2001. The Company has not paid the principal or interest on these notes, and is
negotiating to convert the notes into common stock. The funds from the notes
were utilized to pay the legal fees in connection with filing of this Form 10,
pay office expenses and costs associated with various business opportunities the
Company has examined.
C. MINERAL LEASE DEVELOPMENT COSTS
The Company obtained a number of mineral leases in Mohave County, Arizona in
1998. The Company conducted preliminary assay sampling and metallurgical testing
of the ores on the property. Although the test results were promising, an
overall depressed precious metals market would not allow commercial development
of the property at this time. The Company has expensed the costs incurred to
date on the project due to the depressed state of the precious metals market.
The company is still seeking joint venture partners for this project.
D. LOANS AND ADVANCES FROM STOCKHOLDERS/OFFICERS
The Company has advanced its operations through loans and advances from its two
principal stockholders. Two of the personal advances have been verbally
converted into loans. The original loan in April 1997, for $50,000, bears
interest at 3%. The other loan In December 1999 for $7,500 bears interest at 8%.
On May 1, 2000, the amount of $4,093 was converted to a note bearing an interest
rate of 6%, and on June 1, 2000, the amount of $2,373 was converted to a note
also bearing an interest rate of 6%. There have been various repayments of the
loans/advances; however, for the aggregate, the loans/advances have continued to
increase. The Company's officers have utilized their personal funds and credit
cards to fund the office expenses of the Company, travel and auto expenses,
mineral development costs and other business opportunity costs. The two
individuals have not received any compensation for their services or interest on
the majority of their advances. The Company has no ability to repay these
advances/loans, and it will most likely require conversion into equity of the
Company.
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<PAGE>
E. BASIS OF PREPARATION
In the opinion of the management of International STAR, Inc. (the Company), the
accompanying unaudited condensed financial statements include all normal
adjustments considered necessary to present fairly the financial position as of
June 30, 2000, and the results of its operations for the three months and nine
months ended June 30, 1999 and 2000, and cash flows for the nine months ended
June 30, 1999 and 2000. Interim results are not necessarily indicative of
results for a full year. The condensed financial statements and notes are
presented as permitted by Form 10-Q, and do not contain certain information
included in the Company's audited financial statements and notes for the fiscal
year ended December 31, 1999.
GOING CONCERN
The Company's condensed financial statements are presented on a going concern
basis, which contemplates the realization of assets and satisfaction of
liabilities in the normal course of business. The Company has experienced
recurring losses since inception and has negative net working capital and cash
flows from operations. The Company's ability to continue as a going concern is
contingent upon its ability to secure additional financing, initiating sale of
its products, and attaining profitable operations. Management is pursuing
various sources of equity financing. Although the Company plans to pursue
additional financing, there can be no assurance that the Company will be able to
secure financing or obtain on terms beneficial to the Company. The financial
statements do not include any adjustments to reflect the possible future effects
on the recoverability and classification of assets or the amounts and
classification of liabilities that may result from the possible inability of the
Company to continue as a going concern.
ITEM 2 -- MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
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This discussion and analysis should be read in conjunction with our condensed
financial statements and related notes thereto appearing in Item 1 of this
report. In addition to historical information, this report contains
"forward-looking statements" that are within the safe harbor provisions of the
Private Securities Litigation Reform Act of 1995, and that are subject to
certain risks and uncertainties that could cause actual results to differ
materially from those projected. The words "believe", "expect", "intend",
"anticipate", and similar expressions are used to identify forward-looking
statements, but their absence does not mean that such statement is not
forward-looking. Many factors could affect the Company's actual results
including the successful operation of its mining properties and the successful
contracting for its other products. The Company is not likely to achieve any
earnings until commercialization takes place. These risk factors, among others,
could cause results to differ materially from those presently anticipated by the
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<PAGE>
Company. Readers are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date of this report. The
Company undertakes no obligation to publicly release the results of any
revisions to these forward-looking statements that may be made to reflect events
or circumstances after the date of this report or to reflect the occurrence of
anticipated events. OVERVIEW The Company was organized under the laws of the
State of Nevada on October 28, 1993 as Mattress Showrooms, Inc. The Company's
business now, is bifurcated -- both in transportation and mining. The Company
has obtained mining leases in Arizona and plans operations there. It also is
seeking combination with another Firm and/or exploitation of opportunities to
develop and deploy a proprietary automatic vehicle location system.
To date, the Company has generated no operating revenues. Management anticipates
only modest revenues from operations over the next quarter. It has incurred
losses since inception. The Company does not have the capital it requires to
proceed to bring mining operations and development of its proprietary vehicle
location product to market immediately. The Company estimates that it requires
$750,000 over the next 12 months in order to bring the Company to profitable
operations.
PART II - OTHER INFORMATION
None.
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<PAGE>
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
International STAR
(Registrant)
/s/ Kamal Alawas
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President, Chief Financial Officer
and Director
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