ALLSTAR RESTAURANTS
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
|
|
For the Nine Months Ended
|
|
|
December 31,
|
|
|
|
|
|
2007
|
|
2006
|
|
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM OPERATING ACTIVITIES
|
|
|
|
|
Net Loss
|
$ (31,303)
|
|
$ (3,501)
|
|
Adjustments to reconcile net loss to net cash used by
|
|
|
|
|
operating activities:
|
|
|
|
|
Depreciation & Amortization
|
66,254
|
|
44,181
|
|
Contribution of Interest
|
15,532
|
|
10440
|
|
Changes in operating assets and liabilities:
|
|
|
|
|
Increase in accounts receivable - other
|
(8,591)
|
|
(9,566)
|
|
Increase in Inventory
|
|
|
(484)
|
|
Decrease (increase) in prepaids
|
(877)
|
|
(13,167)
|
|
(Increase) decrease in deposits
|
-
|
|
755
|
|
Decrease in debt offering costs
|
434
|
|
-
|
|
Increase (decrease) in accounts payable
|
(5,198)
|
|
(30,052)
|
|
|
|
|
|
|
|
|
|
|
|
Net Cash Provided (Used) by Operating Activities
|
36,251
|
|
(1,394)
|
|
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM INVESTING ACTIVITIES
|
|
|
|
|
Purchase of fixed assets
|
(18,555)
|
|
(96,398)
|
|
|
|
|
|
|
|
|
|
|
|
Net Cash Provided (Used) by Investing Activities
|
(18,555)
|
|
(96,398)
|
|
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM FINANCING ACTIVITIES
|
|
|
|
|
Payments on SBL loan
|
(17,515)
|
|
(13,842)
|
|
Payments on Shareholder loan
|
(47,531)
|
|
-
|
|
Proceeds from Shareholder loan
|
44,960
|
|
71,633
|
|
|
|
|
|
|
|
|
|
|
|
Net Cash Provided by Financing Activities
|
(20,086)
|
|
57,791
|
|
|
|
|
|
|
|
|
|
|
|
NET INCREASE (DECREASE) IN CASH
|
(2,390)
|
|
(40,001)
|
|
|
|
|
|
|
CASH POSITION, BEGINNING OF YEAR
|
60,701
|
|
73,295
|
|
|
|
|
|
|
|
|
|
|
|
CASH POSITION, END OF THREE MONTHS PERIOD
|
58,311
|
|
33,294
|
|
|
============
|
|
============
|
|
|
|
|
|
|
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
|
|
|
|
|
|
|
|
|
CASH PAID FOR DURING THE PERIOD:
|
|
|
|
|
|
|
|
|
|
Interest
|
$ 20,663
|
|
$ 19,571
|
|
Income Taxes
|
$ -
|
|
$ -
|
|
|
|
|
|
|
NON CASH FINANCING ACTIVITIES
|
|
|
|
|
Interest contributed by stockholder
|
$ 15,532
|
|
$ 10,440
|
|
|
============
|
|
============
|
The accompanying notes are an integral part of these consolidated financial statements.
F-4
ALLSTAR RESTAURANTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2007 and 2006
1. BASIS OF FINANCIAL STATEMENT PRESENTATION
The accompanying unaudited consolidated financial statements have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted in accordance with such rules and regulations. The information furnished in the interim consolidated financial statements includes normal recurring adjustments and reflects all adjustments, which, in the opinion of management, are necessary for a fair presentation of such financial statements. Although management believes the disclosures and information presented are adequate to make the information not misleading, it is suggested that these interim consolidated financial statements be read in conjunction with the Company’s most recent audited consolidated financial statements and notes thereto as of March 31, 2007. Operating results for the nine months ended December 31, 2007 are not necessarily indicative of the results that may be expected for the year ending March 31, 2008.
2. DESCRIPTION OF THE BUSINESS
The company was incorporated December 22, 2004 under the laws of the state of Nevada as Nexstar Properties Inc. The company name was changed to Allstar Restaurants on March 30, 2005. Allstar Restaurants was established to pursue opportunities in the full-service segment of the restaurant and food services industry with the objective of developing into a multi-unit restaurant and food services operation.
The company commenced operations with its first restaurant acquisition as of July 1, 2005. On July 1, 2005, a wholly owned subsidiary, Fastserve Foods Inc., incorporated under the laws of the province of Saskatchewan, Canada, in the City of Regina, was acquired. Fastserve Foods Inc., which recently changed its name to China Doll Foods Ltd., operates an established restaurant and sports lounge called China Doll Restaurant and Lounge, located in the City of Regina, in the province of Saskatchewan, Canada. This subsidiary acts as an operating company for all business activities relating to the company’s restaurant businesses in Canada.
3. CAPITAL STOCK
As of December 31, 2007, the company has authorized 75,000,000 common voting shares each with a par value of $0.001. As of the period ended December 31, 2007, the company had 9,950,000 common shares outstanding.
4. RELATED PARTY TRANSACTIONS
During the nine months ended December 31, 2007, the principal shareholder provided an additional loan to the company in the amount of $44,960. The total outstanding balance of the shareholder loan as at December 31, 2007 is $234,187 and the full amount is shown as a current liability on the balance sheet. This shareholder loan carries no set terms of principal repayment. The shareholder does not expect to make a specific claim on the interest for this loan during the current year or foreseeable future. Imputed Interest for the nine months period ended has been recorded on the balance sheet at the rate of 9.00 % on the outstanding loan balance for the nine months ended December 31, 2007. Additional Paid-In Capital in the form of imputed interest on the shareholder loan was recorded. The total of this cost is shown on the balance sheet as Additional Paid-In Capital of $15,532 and in the income statement as interest expense for the same amount.
ALLSTAR RESTAURANTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2007 and 2006
4. RELATED PARTY TRANSACTIONS (continued)
On July 1, 2005, a wholly owned subsidiary, Fastserve Foods Inc., incorporated under the laws of the province of Saskatchewan, Canada, in the City of Regina, was acquired. Fastserve Foods Inc. operates an established restaurant and sports lounge called China Doll Restaurant and Lounge, located in the City of Regina, in the province of Saskatchewan, Canada. This subsidiary acts as an operating company for all business activities relating to the company’s restaurant businesses in Canada. The acquisition was executed by exchanging all (100%) of the issued and outstanding common shares (100) of Fastserve Foods Inc., for 5,000,000 common shares issued by Allstar Restaurants. As stated, the majority shareholder is currently the Chairman of the Board and Chief Executive Officer of Allstar Restaurants. As of the date of this filing, the shareholder holds a total of 5,100,000 common shares of Allstar Restaurants.
5. FOREIGN CURRENCY TRANSLATIONS
The Company’s functional currency is the Canadian dollar. The Company’s reporting currency is the U.S. dollar. All transactions initiated in other currencies are re-measured into the functional currency as follows:
Monetary assets and liabilities at the rate of exchange in effect at the balance sheet date,
ii) Non-monetary assets and liabilities, and equity at historical rates, and
iii) Revenue and expense items at the average rate of exchange prevailing during the period.
Gains and losses on re-measurement are included in determining net income for the period.
Translation of balances from the functional currency into the reporting currency is conducted as follows:
Assets and liabilities at the rate of exchange in effect at the balance sheet date,
ii) Equity at historical rates, and
iii) Revenue and expense items at the average rate of exchange prevailing during the period.
Translation adjustments resulting from translation of balances from functional to reporting currency are accumulated as a separate component of shareholders’ equity as a component of comprehensive income or loss.
6. GOING CONCERN
The Company's financial statements are prepared using accounting principles generally accepted in the United States of America applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. For the nine months period ended December 31, 2007, the Company has incurred a net loss of $(31,303) and losses from operations in recent prior periods. The company’s current liabilities exceed its current assets by $199,141. These factors may create uncertainty about the Company's ability to continue as a going concern. In order to continue as a going concern and achieve a profitable level of operations, the Company will require, among other things, additional capital resources. Management's plans to obtain such resources for the Company include (1) Issuing promissory notes in exchange for additional shareholder loans; (2) conversion of existing promissory notes into common stock; (3) the company will actively seek to execute additional acquisitions of established restaurant businesses that present opportunities for additional cash flow and value creation via marketing and operational enhancements. However, it is anticipated that any future acquisition(s) will not be executed prior to the end of the fiscal year ended 2008; (4) The Company has filed a Form SB-2 Registration statement to the United States Securities and Exchange Commission with the intention of becoming a fully reporting and publicly-traded corporation. We had received a Notice of Effectiveness on August 13, 2007, officially making us a fully reporting Public Company. This will provide additional opportunities in the future for the Company to raise capital via stock offerings. Management cannot provide any assurances that the Company will be successful in
ALLSTAR RESTAURANTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2007 and 2006
6. GOING CONCERN (continued)
accomplishing any of its plans. The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plans described in the preceding paragraph and eventually secure other sources of financing and attain profitable operations.
Item 2. Management’s Discussion and Analysis or Plan of Operation.
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our financial statements and the related notes thereto contained elsewhere in this Form 10-QSB.
Forward-Looking Statements
This discussion contains forward-looking statements that involve risks and uncertainties. All statements regarding future events, our future financial performance and operating results, our business strategy and our financing plans are forward-looking statements. In many cases, you can identify forward-looking statements by terminology, such as “may”, “should”, “expects”, “intends”, “plans”, “anticipates”, “believes”, “estimates”, “predicts”, “potential” or “continue” or the negative of such terms and other comparable terminology. These statements are only predictions. Known and unknown risks, uncertainties and other factors could cause our actual results to differ materially from those projected in any forward-looking statements. We do not intend to update these forward-looking statements.
Overview
Allstar Restaurants
,
(referred to herein as the “Company”, “Allstar”, “we”, “us” and “our”) is primarily engaged in the restaurant business located in the city of Regina, in the province of Saskatchewan, Western Canada.
We were incorporated on December 22, 2004 under the laws of the State of Nevada originally under the name Nexstar Properties, Inc. By Director’s resolution, on March 30, 2005, the company’s name was changed to Allstar Restaurants. The company’s United States registered office is located at 3155 East Patrick Lane, Suite 1, Las Vegas, Nevada 89120-3481. Our principal executive offices are located at 1458 Broad Street, Regina, Saskatchewan, S4R 1Y9, Canada. The telephone number for our executive office is 306.529.2652. The fax number is 306.352.1597.
We are a restaurant company with the objective of developing into a multi-unit full-service restaurant and food services business. The company was established to pursue opportunities in the family style full-service casual dining segment of the restaurant industry. Allstar Restaurants, through a wholly owned subsidiary called Fastserve Foods Inc., acquired on July 1, 2005, currently owns and operates an established restaurant and licensed lounge called China Doll Restaurant and Lounge. This restaurant is located in the city of Regina, in the province Saskatchewan, Canada. This subsidiary, which recently changed its name to China Doll Foods Ltd., currently acts as the operating company for all business activities relating to the company’s restaurant business(s) in Western Canada. The China Doll Restaurant is currently the only restaurant location operated and wholly-owned by Allstar Restaurants.
We have received a going concern opinion from our auditors which contemplates, among other things, the realization of assets and satisfaction of liabilities in the normal course of business. For the nine months period ended December 31, 2007, the Company had a net loss of $(31,303) and an accumulated retained earnings deficit as at December 31, 2007 of $(98,703). The Company intends to fund operations over the next six to twelve months through improved cash flow generated from operations as well as equity financing arrangements, both of which may be insufficient to fund its capital expenditures, working capital and other cash requirements over the next three months to the year ending March 31, 2008. Please refer to Note 6, “Going Concern”, accompanying the financial statements.
The discussion below provides an overview of our operations, discusses our results of operations, our plan of operations and our liquidity and capital resources.
Results of Operations
Overview - Quarter ended December 31, 2007
Total sales
for the three months ended December 31, 2007 were $344,330 compared to $277,304 in sales for the three months ended December 31, 2006. This increase is the result of a combination of an increased advertising budget, menu price increases, and the continued strength of the Western Canadian economy. The Canadian Dollar exchange rate was also a factor in the increase in recorded sales as the Canadian dollar strengthened considerably during the latest nine months period ended. Gross profit, herein defined as sales less cost of sales, was $235,795 for the three months ended December 31, 2007, compared to $189,309 gross profit for the three months ended December 31, 2007.
Our operating expenses were $215,116 for the three months ended December 31, 2007 compared to operating expenses of $166,895 for the three months ended December 31, 2006. Operating expenses increased primarily as a result of an increase in payroll expenses and benefits to $128,820 for the nine months period ended December 31, 2007 as compared to $102,549 for the previous nine months period ended December 31, 2006. As well as an increase in advertising expenses for the three months ended December 31, 2007 compared to the three months ended December 31, 2006. The increase in payroll expenses for the period was the result of a general per-hour wage increase for most staff as a mandated Provincial minimum wage increase came into effect. Also, the addition of some kitchen staff as a result of the trend in increases sales realized for the period was a contributing factor. Depreciation and amortization expense has increased from $14,513 for the three months ended December 31, 2006 to $22,085 for the three months ended December 31, 2007 due to the substantial increased investment in leasehold improvements that took place during the third and fourth quarters of the most recent fiscal period ending March 31, 2007.
We realized a net gain of $8,004 for the three months ended December 31, 2007 compared to a net gain of $12,467 for the three months period ended December 31, 2006.
Overview – Nine months ended December 31, 2007
Total sales
were $919,574 for the nine months ended December 31, 2007 compared to $749,028 in sales for the nine months ended December 31, 2006. This increase is the result of a combination of an improvement in the restaurant dining room through a leasehold improvements upgrade, customer service improvements, menu price increases, and the continued overall strength of the economy in Western Canada. The Canadian Dollar strengthened considerably during this period which also contributed to the increase in recorded sales for the period.
Gross profit, herein defined as sales less cost of sales, was $623,140 for the nine months ended December 31, 2007, compared to $515,284 gross profit for the nine months ended December 31, 2006.
Operating expenses were $618,248 for the nine months ended December 31, 2007 compared to operating expenses of $488,774 for the nine months ended December 31, 2006. Operating expense increased primarily as a result of an increase in professional fees as well as payroll expenses and benefits for the nine months ended December 31, 2007 compared to the nine months ended December 31, 2006. The increases in these particular expenses for the period primarily consist of a general per-hour wage increase for most staff and the addition of some kitchen staff and front-of-restaurant staff as a result of the trend in increases sales realized for the period. Payroll expenses grew from $293,431 for the nine months period ended December 31, 2006 to $359,802 for the nine months period ended December 31, 2997. Professional fees were $13,014 for the nine months period ended December 31, 2006 as compared to $36,711 for the nine months period ended December 31, 2007. Professional fees consist largely of accounting, auditing, and legal fees to prepare the year-end financial statements and for the preparation and filing of the company’s Form SB-2 Registration Statement and subsequent amendments. Depreciation and amortization expense has increased from $44,181 for the nine months ended December 31, 2006 to $66,254 for the nine months ended December 31, 2007 due to the substantial increased investment in leasehold improvements that took place during the third and fourth quarters of the most recent fiscal period ending March 31, 2007. Utilities increased to $86,737 for the nine months period ended December 31, 2007 as compared to $77,740 for the nine months period ended December 31, 2006. The increase in utilities during the period was due to a continued increase in both energy use and cost.
We realized a net loss of $(31,303) for the nine months ended December 31, 2007 compared to a net loss of $(3,501) for the nine months period ended December 31, 2006.
Operations Outlook
The Company's plan of operations and primary objective for the next three months to the fiscal period ending March 31, 2008 is to increase its existing restaurant location sales while controlling costs. We will also begin to analyze prospects for acquiring additional restaurant locations to either extend our existing brand concept or look to acquire other existing established restaurant operations.
For our existing restaurant operation, the company intends to reach its sales objectives as follows:
-
Maintain marketing expenditures going in to the last quarter (January to March) of our fiscal year. We will continue to focus our marketing efforts on continuing to position our restaurant business based on the highly differentiated quality of our core Chinese food menu items as well as our superior customer service both for the dine-in and takeout segments of our business. We will accomplish this by emphasizing the message of “quality with great service” in our print, radio, on-line, and direct mail campaigns which will begin near the end of the summer season.
-
Continue to reinvest in the existing restaurant business where necessary to improve and freshen the interior and exterior appearance,
-
Continue to focus on improving overall customer satisfaction measures through enhanced management and customer service training processes,
-
Introduce limited new menu offerings,
-
Focus on expanding our city-wide delivery and takeout service concept by improving efficiency and utilizing creative and aggressive marketing initiatives,
-
Streamline and standardize our cost and accounting controls systems and procedures.
Allstar Restaurants’ objective and plan for our existing restaurant operation, the China Doll Restaurant, is to continue to strive to increase restaurant sales through increased customer counts in each primary day-part (lunch, dinner and late-night, takeout), selective menu and price promotions and effective marketing of China Doll Restaurant’s competitive attributes of high quality food products, superior taste and value pricing. Over the next three months the number of our employees, in particular kitchen staff, may increase as our sales growth trend continues. We may also extend our operations hours to accommodate a greater customer base, which may also have an impact on overhead expenses. Management plans to begin to standardize and document operations procedures with the objective of extending the China Doll Restaurant brand in the future to either additional corporate-owned locations or explore the feasibility of future franchise offerings.
Although we cannot predict with certainty what revenues we can expect during the next twelve months, we believe that we probably will have enough revenue, when added to our cash on hand, to pay our operating expenses for the next twelve months. We anticipate that we may have an opportunity to raise additional capital to expand our operations through equity financings. However, we cannot guarantee that we will be able to raise that capital, in which event our operations plans may be required to be altered or even curtailed.
Liquidity and Capital Resources
Overview –Nine Months Ended December 31, 2007
For the nine months period ended December 31, 2007, net cash provided by operating activities was $36,251. Net cash (used) in operating activities for the nine months period ended December 31, 2006 was $(1,394). The increase in cash provided by operating activities for the nine months period ended December 31, 2007 was primarily due to a substantial increase in sales for the period which was $919,574 as compared to $749,028 for the previous nine months ended December 31, 2006, resulting in the increase in cash generated from operations.
Cash (used) by investing activities during the nine months ended December 31, 2007 was $(18,555). Net cash (used) by investing activities for the same period last year was $(96,398). We experienced a substantial decrease in the investment of leasehold improvements for the nine months ended December 31, 2007 versus the nine months period ended December 31, 2006, as a result of the completion of most our leaseholds upgrade plan over the previous twelve months.
Net cash (used) by financing activities for the nine months ended December 31, 2007 was $(20,086). Net cash provided by financing activities for the period ending December 31, 2006 was $57,791. For the nine months period
ended December 31, 2007 we initiated making payments to reduce the shareholder loans which accounted for the net cash (used) by financing activities for the period.
As at December 31, 2007 we had $58,311 in cash, compared to $33,294 as at December 31, 2006. We had a negative working capital of $199,141 as at December 31, 2007 compared to a negative working capital of $190,820 as at December 31, 2006.
We will continue to have professional fees which include accounting, auditing, legal, and statutory filing fees, and those fees may increase because of our reporting status and the required filings for requisite quarterly and annual reports with the Securities and Exchange Commission. We expect that we will have additional filings whereby our auditors may be required to prepare further financial reports. We are aware that audit fees have generally increased as a function of the increased reporting requirements mandated by the recently enacted Sarbanes-Oxley Act. We are optimistic that our business activities will increase, which will require auditing procedures over a greater transaction base. We expect our other administrative expenses to increase in the next quarter as our legal fees may increase as we further our strategic goals and additional advice and/or opinions may be required.
Due to the foregoing factors, our operating results are difficult to forecast. You should evaluate our prospects in light of the risk, expenses and difficulties commonly encountered by comparable development-stage companies in rapidly evolving markets. We cannot assure you that we will successfully address such risks and challenges. In addition, even though we have an operational business with revenues, we cannot assure you that our revenues will increase or that we will continue to be profitable in the future.
Other Information - Certain Relationships and Related Transactions
We intend that any transactions between us and our officers, directors, principal stockholders, affiliates or advisors will be on terms no less favorable to us than those reasonably obtainable from third parties. To date, the following related party transactions have taken place:
As noted in Note 4 of the Consolidated Financial Statements of December 31, 2007: During the nine months ended December 31, 2007, the principal shareholder provided additional loans to the company in the total amount of $44,960. The total outstanding balance of the shareholder loans as at December 31, 2007 is $234,187, and the full amount is shown as a current liability on the balance sheet. This shareholder loan carries interest but has no set terms of principal repayment. The shareholder does not expect to make a specific claim on the interest for this loan during the current year or foreseeable future. Imputed Interest on the shareholder loan for the nine months period ended has been recorded on the income statement as interest expense at the rate of 9.00 % on the outstanding loan balance for the nine months ended December 31, 2007. This imputed interest in the amount of $15,532 was recorded on the balance sheet in the form of Additional Paid-In Capital.
On October 4, 2007, we received clearance from the NASD to have our securities trade publicly on the Over-the-Counter Bulletin Board exchange under the symbol AREN.OB. There is no assurance that a liquid trading market will develop, or, if developed, that it will be sustained. A purchaser of our shares may, therefore, find it difficult to resell our shares publicly should he or she desire to do so. Furthermore, our shares are not marginable and it is unlikely that a lending institution would accept our common stock as collateral for a loan.
Item 3. Controls and Procedures.
Management has evaluated, with the participation of our Principal Executive Officer and Principal Financial Officer, the effectiveness of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) as of the end of the period covered by this report. Based upon this evaluation, our Principal Executive Officer and Principal Financial Officer concluded that, as of the end of the period covered by this report, our disclosure controls and procedures were effective to ensure that information required to be disclosed by us in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Commission’s rules and forms. There have been no significant changes in our internal controls over financial reporting that occurred during the fiscal quarter covered by this report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
There are no material pending legal proceedings to which the Company is a party or to which any of its property is subject.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
None
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Submission of Matters to a Vote of Security
-
Holders.
None.
Item 5. Other Information.
None.
Item 6. Exhibits.
|
|
31.1
|
Certification of Principal Executive Officer and Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (Rules 13a-14 and 15d-14 of the Exchange Act)
|
|
|
|
|
|
|
32.1
|
Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350)
|
SIGNATURES
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.
ALLSTAR RESTAURANTS
(Registrant)
Dated: February 4
th
, 2008
By:
/s/
Terry G. Bowering
Terry G. Bowering, Chief Executive Officer
(Principal Executive Officer) Chief Financial Officer,
Chief Accounting Officer (Principal Financial Officer)
PetroGas (PK) (USOTC:PTCO)
Gráfica de Acción Histórica
De May 2024 a Jun 2024
PetroGas (PK) (USOTC:PTCO)
Gráfica de Acción Histórica
De Jun 2023 a Jun 2024
