UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
Form
10-K
(Mark
one)
x
ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
For the
fiscal year ended March 31, 2009
o
TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
For the
transition period from ___________ to _____________
Commission
File Number: 000-52763
ALLSTAR
RESTAURANTS
(Name of
small business issuer in its charter)
|
Nevada
|
20-2638087
|
|
(State or other
jurisdiction of
incorporation
or organization)
|
(I.R.S.
Employer Identification No.)
|
1458
Broad Street, Regina, Sask. S4R 1Y9, Canada
Tel:
306-529-2652 Fax: 306-352-1597
(Operations
and Administrative office)
or
Incorp
Services, Inc.
375 N.
Stephanie Street, Suite 1411, Henderson, NV 89193-8909
Tel:
702-866-2500
(Name,
address and telephone number for Agent for Service)
Securities
registered under Section 12(b) of the Exchange
Act: None
Securities
registered under Section 12(g) of the Exchange Act
Common
Shares
(Title of
class)
Check
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.
Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act).
Check if
disclosure of delinquent filers in response to Item 405 of Regulation S-B is not
contained in this form, and no disclosure will be contained, to the best of the
Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K.
x
The Company's revenues for
the most recent fiscal year were
$1,282,302.
The
aggregate market value of the voting stock held by non-affiliates of the Company
on
June
18,
2009
was
$582,000
.
As of
June
18,
2009
the Company had 9,950,000 issued and outstanding shares of common
stock.
Part I
Item 1. Description of Business
Business
Development
Allstar
Restaurants was incorporated on December 22, 2004 under the laws of the state of
Nevada. The company was originally incorporated under the name
Nexstar Corporation, Inc. and changed its name by order of Director’s Resolution
on March 30, 2005, to Allstar Restaurants. Our wholly-owned operating
subsidiary, China Doll Foods Ltd., (originally called Fastserve Foods Inc.), was
acquired on July 1, 2005. China Doll Foods Ltd., doing business as China Doll
Restaurant and Lounge, is a full service family-style restaurant and lounge
specializing in a Chinese Food Menu. The restaurant operates in the Western
Canadian city of Regina, in the province of Saskatchewan, Canada. The
acquisition consisted of a share exchange in which all 100 shares of the new
subsidiary, owned by our Director, President and C.E.O., Mr. Terry G. Bowering,
were exchanged for 5,000,000 common shares in Allstar
Restaurants. The acquisition marked the start of restaurant and
business operations for the company. There are no bankruptcies, receivership, or
similar proceedings against the parent or operating subsidiary. We intend to
develop into a multi-unit food services enterprise through a combination of
either franchising our brand and theme concept or by acquiring and developing
additional restaurant operations that are capable of offering dine-in, takeout
and catering services. With our existing restaurant operation, we are currently
focused on developing the “China Doll Restaurant” brand and standardizing our
daily operating procedures to prepare for future expansion.
Business
of the Issuer
We are
engaged in the full-service restaurant and food services industry. We currently
operate one restaurant operation through our wholly-owned Canadian subsidiary,
China Doll Foods, Ltd., which features a full Chinese Food menu. We currently
employ 25 people in the restaurant business. The restaurant operates seven days
per week offering a lunch, evening dining, and full menu for takeout, delivery,
and catering service. Our gross sales revenue consists of approximately 55%
takeout business and 45% dine-in business.
As our
business grows and expands we expect that we will hire additional employees as
needed. We consider our employee relations to be good and to date we have
experienced no work stoppages, strikes, or labor disputes. None of the company’s
employees are covered by a collective bargaining agreement. There are no
employee agreements.
Business
Strategy
Concentrate on Selected Strong
Economy Markets
-
The
Company’s current market focus includes the Western Canadian city of Regina, in
the province of Saskatchewan. The local and regional economy is resource-based
(Oil, Potash, Uranium, Grain, Mining, etc), therefore it is currently robust and
vibrant with consumers having a high level of discretionary income, which is
contributing to the growth in sales of our restaurant business
year-over-year.
Acquire Additional Restaurant
Operations
-
The
Company will seek to acquire assets and/or restaurants which increase the
Company’s penetration in the markets where it has chosen to concentrate and
which exhibit an opportunity to improve returns through operational and/or
marketing initiatives and enhancements.
Franchising
The
company intends to explore the feasibility of multi-unit growth through
franchising the China Doll Restaurant business operations. Management is
currently concentrating on streamlining and documenting operational procedures
as well as branding of the name, image, and logo of the China Doll Restaurant.
China Doll Restaurant is a registered business name in the Province of
Saskatchewan. The company intends to explore the possibility of registering the
business name and image across Canada and developing a “theme” restaurant
concept built around the success of the existing China Doll
Restaurant.
Marketing
Strategy
We
continue our marketing activities by advertising on radio, local TV Cable
channels, some selective print advertising, and on-line marketing through our
web-site located at
www.cdoll.ca
. We
also consider other forms of marketing and promotion, such as sports team
sponsorships, that we believe will deliver our product and services message in a
cost-effective fashion. Through our Marketing activities, we endeavor to
position our business in the marketplace as a family full-service dining
experience focusing on providing a broad selection of high-quality but
moderately-priced Chinese Food.
Future
Development Projects
The
Company is in the initial stages of pursuing opportunities within the trading
area to acquire new restaurants and/or develop additional locations to
capitalize on the long-standing reputation of the China Doll Restaurant and to
extend the “China Doll Restaurant” brand concept. Our long-term objective is to
develop a branded multi-unit full-service restaurant operation either through
corporate-owned and/or franchised units. As of the date of this filing, we have
not executed any intent agreements for any new restaurant locations or
additional restaurant acquisitions.
Relevant
Regulations
The
Restaurant industry is subject to extensive licensing and regulation by
Provincial and/or local government departments such as health, sanitation, fire,
and workers’ safety, among others. We are also subject to periodic review by the
province and municipal authorities for areas in which the restaurants are
located. In addition, we are subject to local land use, zoning, building,
planning, and traffic ordinances and regulations in the selection and
acquisition of suitable sites for constructing new salons. Delays in
obtaining, or denials of, or revocation or temporary suspension of, necessary
licenses or approvals could have a material adverse impact on the development of
our restaurant business.
Various
Federal and/or Provincial, and local municipal laws can and may affect our
business. The development and operation of restaurant businesses depend,
to a significant extent, on the selection and acquisition of suitable
sites. These sites are subject to zoning, land use, environmental,
traffic, and other regulations of state and local governmental agencies.
City ordinances or other regulations, or the application of such ordinances or
regulations, could impair our ability to construct or acquire our restaurants in
desired locations and could result in costly delays.
The delay
or failure to obtain or maintain any licenses or permits necessary for
operations could have a material adverse effect on our business. In
addition, an increase in the minimum wage rate, employee benefit costs, costs of
installing fixtures or accommodations for handicapped individuals or other costs
associated with employees could adversely affect our business. We also are
subject laws and regulations that, among other things, may require us to install
certain fixtures or accommodations in new restaurants or to renovate existing
restaurants to meet federally mandated requirements.
Products
and Services Offered
Our
current restaurant business features a full Chinese food menu for both a
full-service dine-in experience as well as a takeout service, which consists of
pickup orders and city-wide delivery service. We provide takeout service for our
entire menu selection for either lunch time or late evening dining. The
restaurant can seat up to 200 people for both our lunch and evening dining. We
also cater to large groups for private parties up to 100. All of our meals are
individually cooked to order for the customer and targeted at a North American
market. We offer over 90 different types of Chinese dishes and items on our
menu. Our current kitchen staff consists of all-Asian cooks and Kitchen prep
assistants with a combined industry experience of well over 100 years in the
food services industry.
Competition
The
restaurant business is highly competitive with respect to price, service, and
food type and quality. Restaurant operators also compete for attractive
restaurant sites and qualified restaurant personnel and managers. Our
restaurants will compete with a large number of other restaurants in our
specific target market, including national and regional restaurant chains and
franchised restaurant systems, as well as with locally owned, independent
restaurants.
Currently,
we compete with a variety of restaurant companies in our local market. Our
principal competitors in our primary market include casual full service dine-in
restaurants combined that also have delivery and takeout services and licensed
lounges. Most of these types of businesses are long established and
privately-owned restaurants. Our primary competitors in the business include
(but not limited to) Houston Pizza (5 locations), Western Pizza (10 locations),
Trifon’s Pizza (8 locations), Lee’s Chop Suey (3 locations), Regency Palace
Restaurant, O.B. Kitchen (2 locations), Angkor Southeast Asian Delight, 4
Seasons Palace and Sports Bar, etc. We will also compete with large National
family restaurant chains and franchises such as Pizza Hut (8 locations), East
Side Mario’s (2 locations), Boston Pizza (6 locations), and Smitty’s Restaurants
(6 locations). As well, we directly compete within our niche segment (Chinese
Food only) with approximately 30-35 small to medium sized privately-owned and
operated Chinese Food restaurants located in every area of the
city.
Many of
our larger competitors have longer operating histories, larger customer bases,
greater brand recognition and significantly greater financial, marketing and
other resources than the Company. The Company is aware that certain of its
proposed competitors have and may continue to adopt more aggressive pricing or
marketing policies. Increased
competition
may result in reduced operating margins, loss of market share and a diminished
brand franchise. The Company believes that the principal competitive factors in
its market are brand recognition, location, variety and quality of menu and food
services offered, value-added services, management, and quality of staff and
service provided.
There can
be no assurance that the Company will be able to successfully sustain our
competitiveness in our market on an ongoing basis. New restaurant and food
service product concepts, changing customer tastes and preferences combined with
new restaurant openings of existing competitors, as well as large national
franchised competitors moving into the market, may increase the competitive
pressures on the Company.
Item 2. Description of Property
Our
executive and head office is located at 1458 Broad Street, Regina, Saskatchewan,
Canada, S4R 1Y9. This office functions as our main office administrative
operating facility. We believe our current premises are adequate for our current
administrative operations and we do not anticipate that we will require any
additional premises in the foreseeable future.
As of
July 1, 2005, through our acquired subsidiary Fastserve Foods Inc. (now known as
China Doll Foods Ltd.), we currently lease space for our restaurant operation
(trading as China Doll Restaurant and Lounge). The restaurant is located in a
multi-tenant strip mall, originally constructed in 1986, on a major thoroughfare
and traffic corner near to the city center of Regina, in the Province of
Saskatchewan, Canada. The traffic count per day is in access of 30,000,
considered to be high volume for the market. We have adequate signage
identifying our property. The restaurant occupies a total of 5,562 square feet
of space allowing for a maximum seating capacity in the dining room and lounge
of approximately 200 people. The restaurant has a reception/waiting area, a
dining room where lunch and dinner is served daily, a fully equipped kitchen and
preparation area, dry goods inventory storage area, three large walk-in storage
coolers and freezers, and a large sports bar and lounge with multiple big screen
Plasma TVs equipped with the latest satellite TV technology. The restaurant is
open for business seven days per week. The current lease term will expire on
January 31, 2012, at which time the company can re-negotiate at prevailing
market rents for an additional 5 year option if so desired. The lease provides
for a fixed net rental payment plus a percentage, based on square feet occupied,
of the property taxes, common area, and maintenance expenses of the
building.
The China
Doll Restaurant building is regularly maintained by outside contractors who are
on call 24 hours per day in most cases. Management believes that this property
is in good condition and that there will not be any immediate or medium term
need for any significant repairs, maintenance expenditures or leasehold
improvements to maintain the operational and aesthetic integrity of the occupied
premises for the foreseeable future. At a minimum, only routine recurring
maintenance and periodic minor capital leasehold improvements will be necessary.
The property and business is insured up to replacement cost as determined by
management with consultation from insurance experts. Business interruption
insurance is also in place under its current insurance policy. In the opinion of
management there is currently adequate total insurance coverage in
place.
Item 3. Legal Proceedings
We are
not aware of any legal proceedings or pending legal proceedings against us. We
may however be involved, from time to time, in various legal proceedings and
claims incident to the normal conduct of our business.
Item 4. Submission of Matters to a Vote of Security
Holders
None to
report.
Part II
Item 5. Market for Common Equity and Related Stockholder
Matters
Market
Information
The
company received its trading symbol on October 5, 2007 and the company’s common
stock is presently being traded on the over-the-counter market under the symbol
“AREN” and is quoted on the OTC Bulletin Board. For the period indicated,
the following table sets forth the high and low sales prices per share of our
common stock. These
prices
represent inter-dealer quotations without retail markup, markdown, or commission
and may not necessarily represent actual transactions.
|
Year
ended March 31, 2009:
|
|
High
|
|
|
Low
|
|
|
|
|
|
|
|
|
|
|
April
1, 2008 to March 31, 2009
|
|
$
|
0.51
|
|
|
$
|
0.12
|
|
To date,
none of our outstanding shares of common stock are subject to outstanding
options. We have no warrants outstanding. We have registered shares all of the
common stock held by existing security holders for resale with the exception of
the shareholdings of
Terry
G. Bowering,
our Chairman, President, CEO, and CFO. We currently have 42 shareholders of
record.
Shareholders
As of
June 18, 2009, there were 42 holders of record of Allstar Restaurants, holding a
total of 9,950,000 shares.
Dividends
Allstar
Restaurants has not declared, and does not foresee declaring, any dividends now
or in the foreseeable future.
Item 6. Management’s Discussion and Analysis or Plan of
Operation
The
following discussion should be read in conjunction with our consolidated audited
financial statements and the related notes that appear elsewhere in this report.
The following discussion contains forward-looking statements that reflect our
plans, estimates and beliefs. Our actual results could differ materially from
those discussed in the forward looking statements. Factors that could cause or
contribute to such differences include, but are not limited to, those discussed
below and elsewhere in this report.
Our
consolidated audited financial statements are stated in United States Dollars
and are prepared in accordance with United States Generally Accepted Accounting
Principles.
Overview
Our
accumulated deficit as of our year ended on March 31, 2009 was $(164,951) as
compared to $(117,964) as of March 31, 2008. During the fiscal year ended March
31, 2008, the deficit increased by $46,987. The discussion below provides an
overview of our operations, discusses our results of operations, our plan of
operations and our liquidity and capital resources.
Our
operating expenses are classified into several categories:
|
|
§
|
Sales
Less Gross Profit
|
|
|
§
|
Depreciation
& Amortization
|
|
|
§
|
General
Administrative Expenses
|
Sales for
the year ended March 31, 2009 were $1,282,302 as compared to Sales of $1,255,752
for the year ended March 31, 2008. Our Gross Profit (Sales less Cost of Sales)
increased from $859,234 for the year ended March 31, 2008 to $896,669 for the
year ended March 31, 2009.
Professional
Fees consist primarily of our contracted accounting, legal and audit fees. These
amounted to $45,609 for the year ended March 31, 2009 and $45,424 for the year
ended March 31, 2008. Professional fees are attributable primarily to
accounting, legal and audit fees for preparation and review of our filings with
the Securities & Exchange Commission (SEC) in 2008 and 2009.
Depreciation
and amortization expense charged to operations was $87,115 and $89,859 in 2009
and 2008, respectively.
General
Administrative Expenses refer to Repairs & Maintenance, Insurance, Stock
Transfer Agent fees, Filing fees, Office Expenses, Restaurant Supplies, and
other miscellaneous expenses necessary to run the business on a
daily
basis.
These expenses in aggregate amounted to $76,932 for the year ended March 31,
2009 and $62,607 for the year ended March 31, 2008.
Payroll
expenses increased to $535,051 for the year ended March 31, 2009, from $500,066
for the year ended March 31, 2008.
Results
of Operations
Sales
increased year over year to $1,282,302 from $1,255,752, for the year ended March
31, 2009 versus March 31, 2008, respectively. This represents an increase of
2.1% year-over-year. This is a result of the strength of the Western Canadian
economy, a series of menu price increases, and more aggressive marketing
strategies and advertising expenditures. With the increase in Sales of 2.1 %
over the previous year, we maintained a Gross Profit Margin of 69.9% of Sales,
versus 68.4% for the previous year. The slight increase in Sales and Gross
Profit year-over-year was a result of a combination of factors including
increased marketing expenditures, some menu price increases, and the continued
strength of the Western Canadian economy.
We
realized a net loss of $(46,987) for the fiscal year ended March 31, 2009,
compared to a net loss of $(50,564) for the fiscal year ended March 31, 2008.
Total operating expenses for the year ended March 31, 2009 were $906,735
compared to $861,678 for the year ended March 31, 2008. Out of these total
expenses for the year ended March 31, 2009, $45,609 represented Professional
fees, $535,051 for Payroll expenses, $53,729 for Marketing & Advertising,
$108,299 for Rent & Utilities, $87,115 for Depreciation & Amortization,
and $76,932 for General Administrative Expenses. All of these expenses increased
over the previous period but are consistent with expanding sales and
demand.
In
particular, Payroll expenses and benefits increased by $34,985, or approximately
7%, to $535,051 for the year ended March 31, 2009. Our Payroll costs for the
year ended March 31, 2008 were $500,066. The overall increase in the Payroll
Expense is consistent with the increase in sales and demand, the adding of some
additional staff as required, as well as pay increases for the senior employees.
Also, a major factor contributing to the overall wage rate increase was a series
of legislated minimum wage increases by the Provincial Government that took
place during the period, which had the effect of driving up wages across the
full spectrum of our payroll. Our payroll expenses may increase next year as we
add new employees to meet increased demand and possible expansion. In addition,
we anticipate another minimum wage increase to go in effect during
2009.
Interest
expense for the year ended March 31, 2009 decreased to $36,921, from $48,120 for
the year ended March 31, 2008. This decrease in interest expense was due to the
ongoing payments made to substantially reduce the principal balances of both the
Small Business Loan and the shareholder loan during the year ended March 31,
2009.
We do not
expect our rent expenses to increase next year but anticipate an increase in
energy costs which may drive up the cost our utilities expenses.
We expect
our depreciation expense to decrease in the next year due to a reduced amount of
major fixed asset additions for the current fiscal period.
We expect
our other administrative expenses to increase in the next year as our legal fees
may increase as we further our strategic goals and additional legal advice
and/or legal 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 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 become profitable in the future.
Liquidity
and Capital Resources
For the
year ended March 31, 2009, Net cash provided by operating activities was
$50,211. Net cash provided by operating activities for the year ended March 31,
2008 was $48,152.
Net cash
used by investing activities during the year ended March 31, 2009 was $(11,666).
Net cash used by investing activities for the year ended March 31, 2008 was
$(21,493). The change in cash used in investing activities is due to a decrease
in fixed asset additions for the most recent period. Management determined that
there was no need for any significant additions to equipment or leasehold
improvements during the year ended March 31, 2009.
Net cash
used by financing activities for the year ended March 31, 2009 was $(65,824).
Cash used by financing activities for the year ended March 31, 2008 was
$(37,638). The cash used by financing activities for the year ended March 31,
2009 was due to a decreased need to fund fixed asset additions combined with
ongoing payments made to reduce the principal balances of both the Small
Business Loan and the shareholder loan.
At March
31, 2009 we had $22,443 in cash, compared to $49,722 as at March 31,
2008.
PLAN
OF OPERATIONS
The
Company's primary objective for the next fiscal year ending March 31, 2010 is to
continue to increase market share by growing existing restaurant sales through
the use of aggressive marketing campaigns. We will focus our marketing efforts
on positioning our restaurant business as a provider of premium Chinese Food for
both the dine-in and takeout segments of the marketplace. We will maintain our
moderately-priced menu while emphasizing the quality of our food and
service.
The
Company's other objectives for fiscal 2010 are as follows:
|
|
·
|
Improve
customer value by offering a wider range services at a variety of prices,
i.e. catering to large groups, social club functions, sports team
banquets, office parties, etc.
|
|
|
·
|
Introduce
monthly “special occasion” packages for Valentine’s Day, Mother’s Day,
Secretary’s Day,
|
|
|
·
|
Develop
quality enhancements based on excellent customer service and
products
|
|
|
·
|
Analyze
our core market and to assess its viability for market growth for
additional restaurant locations
|
Our
ongoing objective is to increase sales through increased brand awareness through
our marketing campaigns and price specials promotions. We will focus our
marketing efforts on developing China Doll Restaurant’s competitive attributes
consisting of offering quality customer service along with a premium quality
Chinese food menu. The Company is exploring the feasibility of developing the
Regina and regional market area in terms of additional China Doll locations as
well as developing other alternatives to our present operations, such as
“Express Takeout” only locations that provide flexibility and low overhead. We
may have to retain a Franchise Consulting firm to assist us in this plan. These
development plans are highly dependent on the availability of potential sites,
lease terms, financing availability and cost, and availability and quality of
management and staff personnel.
Growth
Strategy
We are
incorporating the following strategy to reach our future
objectives:
|
|
·
|
Expand
our restaurant operations through:
|
• the
addition and development of an additional China Doll Restaurant location in our
existing market
by end of
fiscal year 2010;
• the
possible acquisition or development of full-service restaurants operating under
other names;
|
|
·
|
Improve
our profitability and margins by instituting a new series of menu price
increases while at the same time improving operating efficiency of our
China Doll Restaurant brand by continuing to streamline, standardize, and
document our daily operating
procedures;
|
|
|
·
|
Focus
on utilizing creative and aggressive marketing
initiatives
|
Over the
next twelve months we expect that our number of employees will
increase. Additional staff will be required when we acquire a
restaurant or launch a new restaurant. We are in the initial stages of seeking
new acquisitions and looking for potentially suitable locations for new
restaurants.
Seasonality
Generally
our restaurant business is slightly affected by a seasonal component. Our peak
season for business activity is September to the peak of business for the entire
year which is the month of December. Typically, the business slows in the summer
months of late June, July, and August.
Customers
As we are
classified as a “Retail Eating Place” serving the individual consumer, we do not
have a significant concentration of sales with any individual customer and,
therefore, the loss of any one customer would not have a material impact on our
business.
Working
Capital
We had
negative working capital of $(86,215) as at March 31, 2009, compared to negative
working capital of $(198,368) at March 31, 2008. The reason for the positive
change in Working Capital from the previous year is that the shareholder loan, a
current liability, was substantially reduced during the 2008/2009 fiscal
period.
We fund
the growth of our business through a combination of available cash and cash
equivalents and cash flows generated from operations. Our Cash Flow generated
from operations for the period ended March 31, 2009 was $50,211 as compared to
$48,152 for the year ended March 31, 2008.
Additional
information regarding our "Liquidity and Capital Resources" is included in
Item 6 Management's Discussion and Analysis of Financial Condition and
Results of Operations, of this Annual Report on Form 10-K.
As at
March 31, 2009 and March 31, 2008, we had cash and cash equivalents of $22,443,
and $49,722, respectively. Although we believe we are adequately capitalized for
our existing operation, we may need to raise additional capital within the next
twelve months to realize our growth objectives. Additional funding may not be
available on favorable terms or at all. We cannot predict with certainty what
revenues we can expect during the next twelve months, but we believe, based on
historical figures, that we will have adequate cash flow from operations to
sustain our operations for the next twelve months. However, in order to grow our
business through acquisition, we anticipate that we will be required to raise
additional capital. We cannot guarantee that we will be able to raise sufficient
capital or any capital at all in the future, in which case our operations may
not grow as planned.
Competitive
Strategy
There are
three major ways in which we will create an advantage over our competitors over
the next twelve months;
|
|
·
|
Increased
monthly marketing expenditures emphasizing name/brand identity, quality
service, and value pricing
|
|
|
·
|
Maximize
employee motivation (bonus incentives, group benefits plan to retain and
attract high-value staff)
|
|
|
·
|
Employ
innovative new service options (i.e. introduce childrens’ menu, seniors’
menu, promote catering options for special occasion group parties such as
sports teams and club
gatherings).
|
Promotion
We expect
to significantly increase our planned expenditures for marketing and promotion
over the next twelve month period. This is essential to increase awareness of
our existing restaurant business and prepare the company for future expansion
possibilities. We plan to increase our radio advertising and develop an ongoing
direct mail marketing campaign for the September to December peak business
period. We will also further develop our web-site and commence an on-line
advertising campaign through that medium in a more aggressive manner. We expect
that marketing expenses will range approximately $5,000 to $7,000 per month over
the next fiscal period.
Personnel
As of
June 15, 2009, our management and personnel includes our Chairman, CEO,
President, and General Manger of Operations, Terry G. Bowering,
Our
restaurant employs 25 people with various degrees of skill and
experience. We have a Head Chef/Kitchen Manager in charge of all food
services operations and a Staff Supervisor in charge of all front-of-restaurant
customer service staff. Our chief executive, Mr. Bowering, handles all of the
responsibilities in the area of corporate administration and business
development, as well as capital raising services and is direct liason with our
Chief Accountant, whose services we subcontract. In the twelve months ending
March 31, 2010, we plan to raise our total number of permanent employees to
approximately 30 and we will add two more front-line Chinese cooks to meet
anticipated growing demand and to train for future expansion plans.
If our
sales and marketing program is successful in growing our sales beyond our
current expectations, we may be required to hire new personnel to meet the
demand and maintain our high level of customer service.
Future
Operations
We are
streamlining our operational procedures by standardizing and documenting all
processes. These procedures are preparation for future expansion either via
Franchising or acquiring additional wholly-owned corporate restaurant locations.
We do not anticipate any acquisitions of any new restaurants prior to the third
quarter of the next (2009/2010) fiscal year.
Due to
our resulting operating deficit, in their report on our audited consolidated
financial statements for the period ended March 31, 2009, our independent
auditors included an explanatory paragraph regarding concerns about our ability
to continue as a going concern. Our audited financial statements contain
additional note disclosures describing the circumstances that lead to this
disclosure by our independent auditors. We do not expect to incur major auditing
and legal expenses in the 2009/2010 fiscal period, therefore, we expect our
financial situation to substantially change over future operating quarters.
However, we may still incur losses as we will be expending funds for expenses
unrelated to the operation of the restaurant business such as auditing and legal
expenses necessary to file our required reporting documents and to raise capital
in the future as needed.
There are
no assurances that we will be able to obtain further funds required for our
continued operations and expansion plans. We are pursuing various financing
alternatives to meet our immediate and long-term financial requirements. There
can be no assurance that additional financing will be available to us when
needed or, if available, that it can be obtained on commercially reasonable
terms. If we are not able to obtain the additional financing on a timely basis,
we may not be able to execute our acquisition and expansion plans as
desired.
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, several related
party transactions have taken place. These relationships and related
transactions are discussed in detail on page 29 in section Part III Item 12,
Certain Relationships and Related Transactions.
As noted
in Note 8 of the Consolidated Financial Statements of March 31,
2009:
|
|
a)
|
As
of March 31, 2009, the total loan amount due to the shareholder of $61,591
(2008: $212,282) is uncollateralized, and due on
demand.
|
|
|
b)
|
During
the year, the Company paid the director and officer of the Company $63,140
(2008: $42,000) in wages. No directors’ fees were
paid.
|
Item 7. Financial Statements
ALLSTAR
RESTAURANTS
CONSOLIDATED FINANCIAL
STATEMENTS
FOR THE YEAR ENDED MARCH 31,
2009
CONTENTS
F-1
REPORT OF INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM
To the
Stockholders and Board of Directors
Allstar
Restaurants
Regina,
Sask., Canada
We have
audited the accompanying consolidated balance sheets of Allstar Restaurants as
of March 31, 2009 and 2008, and the related consolidated statements of
operations, stockholders equity (deficit) and cash flows for the years ended
March 31, 2009 and 2008. These consolidated financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these consolidated financial statements based on our
audits.
We
conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the
consolidated financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the consolidated financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall consolidated financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our
opinion, the consolidated financial statements referred to above present fairly,
in all material respects, the consolidated financial position of Allstar
Restaurants as of March 31, 2009 and 2008, and the results of their operations
and their cash flows for the years ended March 31, 2009 and 2008, in conformity
with U.S. generally accepted accounting principles.
We were
not engaged to examine management's assessment about the effectiveness of
Allstar Restaurants' internal control over financial reporting as of March 31,
2009 and, accordingly, we do not express an opinion thereon.
The
accompanying consolidated financial statements have been prepared assuming that
the Company will continue as a going concern. As discussed in Note 10 to the
consolidated financial statements, the Company has sustained recent losses from
operations, has a deficit in working capital and a stockholders' deficit. This
raises substantial doubt about the Company's ability to continue as a going
concern. Management's plans in regard to this matter are also described in Note
10. The consolidated financial statements do not include any adjustments that
might result from the outcome of this uncertainty.
HJ &
Associates, LLC
Salt Lake
City, Utah
June 18,
2009
American
Institute of Certified Public Accountants
Member of
Public Company Accounting Oversight Board
F-2
ALLSTAR
RESTAURANTS
CONSOLIDATED
BALANCE
|
|
|
March
31,
|
|
|
March
31,
|
|
|
|
|
2009
|
|
|
2008
|
|
|
|
|
(Audited)
|
|
|
(Audited)
|
|
|
CURRENT
ASSETS
|
|
|
|
|
|
|
|
Cash
|
|
|
22,443
|
|
|
$
|
49,722
|
|
|
Accounts
receivable - other
|
|
|
425
|
|
|
|
621
|
|
|
Inventory
- total
|
|
|
15,980
|
|
|
|
17,257
|
|
|
Prepaids
|
|
|
9,334
|
|
|
|
11,846
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL
CURRENT ASSETS
|
|
|
48,182
|
|
|
|
79,446
|
|
|
|
|
|
|
|
|
|
|
|
|
NET
FIXED ASSETS
|
|
|
142,065
|
|
|
|
254,103
|
|
|
|
|
|
|
|
|
|
|
|
|
OTHER
ASSETS
|
|
|
|
|
|
|
|
|
|
Deposits
|
|
|
5,415
|
|
|
|
6,640
|
|
|
Debt
offering costs
|
|
|
1,361
|
|
|
|
2,224
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL
OTHER ASSETS
|
|
|
6,776
|
|
|
|
8,864
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL
ASSETS
|
|
$
|
197,023
|
|
|
$
|
342,413
|
|
|
|
|
|
|
|
|
|
|
|
|
CURRENT
LIABILITIES
|
|
|
|
|
|
|
|
|
|
Accounts
payable and accrued liabilities
|
|
|
47,471
|
|
|
|
39,462
|
|
|
SBL
loan - current portion
|
|
|
25,335
|
|
|
|
26,070
|
|
|
Shareholder's
loan
|
|
|
61,591
|
|
|
|
212,282
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL
CURRENT LIABILITIES
|
|
|
134,397
|
|
|
|
277,814
|
|
|
|
|
|
|
|
|
|
|
|
|
LONG
TERM LIABILITIES
|
|
|
|
|
|
|
|
|
|
Long
term debt - SBL loan
|
|
|
62,228
|
|
|
|
108,387
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL
LIABILITIES
|
|
|
196,625
|
|
|
|
386,201
|
|
|
|
|
|
|
|
|
|
|
|
|
STOCKHOLDER'S
EQUITY (DEFICIT)
|
|
|
|
|
|
|
|
|
|
Common
stock; 75,000,000 shares authorized at $0.001 par value, 9,950,000 and
9,950,000 shares issued and outstanding, respectively (Note
3)
|
|
|
9,950
|
|
|
|
9,950
|
|
|
Additional
paid-in capital
|
|
|
156,098
|
|
|
|
63,740
|
|
|
Currency
Translation
|
|
|
(699
|
)
|
|
|
486
|
|
|
Retained
Earnings (Deficit)
|
|
|
(164,951
|
)
|
|
|
(117,964
|
)
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL
STOCKHOLDERS' EQUITY (DEFICIT)
|
|
|
398
|
|
|
|
(43,788
|
)
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
|
|
$
|
197,023
|
|
|
$
|
342,413
|
|
The
accompanying notes are an integral part of these consolidated financial
statements.
F-3
ALLSTAR
RESTAURANTS
CONSOLIDATED
STATEMENTS OF
OPERATIONS
|
|
|
2009
|
|
|
2008
|
|
|
|
|
March
31
|
|
|
March
31
|
|
|
|
|
|
|
|
|
|
|
SALES
|
|
$
|
1,282,302
|
|
|
$
|
1,255,752
|
|
|
COST
OF SALES
|
|
|
385,633
|
|
|
|
396,518
|
|
|
|
|
|
|
|
|
|
|
|
|
GROSS
PROFIT
|
|
|
896,669
|
|
|
|
859,234
|
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING
EXPENSES
|
|
|
|
|
|
|
|
|
|
Payroll
expenses & benefits
|
|
|
535,051
|
|
|
|
500,066
|
|
|
Professional
fees
|
|
|
45,609
|
|
|
|
45,424
|
|
|
General
administrative expenses
|
|
|
76,932
|
|
|
|
62,607
|
|
|
Marketing
& advertising
|
|
|
53,729
|
|
|
|
43,459
|
|
|
Depreciation
& amortization
|
|
|
87,115
|
|
|
|
89,859
|
|
|
Rent
& utilities
|
|
|
108,299
|
|
|
|
120,263
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL
OPERATING EXPENSES
|
|
|
906,735
|
|
|
|
861,678
|
|
|
|
|
|
|
|
|
|
|
|
|
INCOME
FROM OPERATIONS
|
|
|
(10,066
|
)
|
|
|
(2,444
|
)
|
|
|
|
|
|
|
|
|
|
|
|
OTHER
EXPENSES
|
|
|
|
|
|
|
|
|
|
Interest
expense
|
|
|
36,921
|
|
|
|
48,120
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL
OTHER EXPENSES
|
|
|
36,921
|
|
|
|
48,120
|
|
|
|
|
|
|
|
|
|
|
|
|
INCOME
(LOSS) BEFORE INCOME TAXES
|
|
|
(46,987
|
)
|
|
|
(50,564
|
)
|
|
|
|
|
|
|
|
|
|
|
|
PROVISION
FOR INCOME TAXES
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
NET
INCOME (LOSS)
|
|
$
|
(46,987
|
)
|
|
$
|
(50,564
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Basic
income (loss) per share of common stock
|
|
$
|
(0.00
|
)
|
|
$
|
(0.00
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Weighted
average number of common shares outstanding
|
|
|
9,950,000
|
|
|
|
9,950,000
|
|
The
accompanying notes are an integral part of these consolidated financial
statements.
F-4
ALLSTAR
RESTAURANTS
CONSOLIDATED
STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT
)
|
|
|
|
|
|
|
|
|
Additional
|
|
|
Comprehensive
|
|
|
|
|
Common
Stock
|
|
|
Paid
In
|
|
|
Income
|
|
|
Accumulated
|
|
|
|
|
Shares
|
|
|
Amount
|
|
|
Capital
|
|
|
(Loss)
|
|
|
Deficit
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BALANCE,
MARCH 31, 2006
|
|
|
9,950,000
|
|
|
$
|
9,950
|
|
|
$
|
28,377
|
|
|
$
|
(131
|
)
|
|
$
|
(35,539
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Imputed
interest on shareholder loan
credited to contributed
capital
|
|
|
-
|
|
|
|
-
|
|
|
|
14,706
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain
on currency translation
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
35
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Loss for the
year ended
March 31,
2007
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(31,861
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BALANCE,
MARCH 31, 2007
|
|
|
9,950,000
|
|
|
|
9,950
|
|
|
|
43,083
|
|
|
|
(96
|
)
|
|
|
(67,400
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Imputed
interest on shareholder loan
credited to contributed
capital
|
|
|
-
|
|
|
|
-
|
|
|
|
20,657
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain
on currency translation
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
582
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Loss for the year ended
March 31, 2008
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(50,564
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BALANCE,
MARCH 31, 2008
|
|
|
9,950,000
|
|
|
|
9,950
|
|
|
|
63,740
|
|
|
|
486
|
|
|
|
(117,964
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Imputed
interest on shareholder loan
credited to contributed
capital
|
|
|
-
|
|
|
|
-
|
|
|
|
14,221
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Conversion
of loans payable
to contributed capital
|
|
|
-
|
|
|
|
-
|
|
|
|
77,397
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contribution
of cash
|
|
|
-
|
|
|
|
-
|
|
|
|
740
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss
on currency translation
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(1,185
|
)
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Loss for the year ended
March 31, 2009
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(46,987
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BALANCE,
MARCH 31, 2009
|
|
|
9,950,000
|
|
|
$
|
9,950
|
|
|
$
|
156,098
|
|
|
$
|
(699
|
)
|
|
$
|
(164,951
|
)
|
The
accompanying notes are an integral part of these consolidated financial
statements.
F-5
ALLSTAR
RESTAURANTS
CONSOLIDATED
STATEMENTS OF CASH
FLOWS
|
|
|
2009
|
|
|
2008
|
|
|
|
|
March
31
|
|
|
March
31
|
|
|
CASH
FLOWS FROM OPERATING ACTIVITIES
|
|
|
|
|
|
|
|
Net
Loss
|
|
$
|
(46,987
|
)
|
|
|
(50,564
|
)
|
|
Adjustments
to reconcile net loss to net cash used by operating
activities:
|
|
|
|
|
|
|
|
|
|
Depreciation
& Amortization
|
|
|
87,115
|
|
|
|
89,859
|
|
|
Contribution
of Interest
|
|
|
14,221
|
|
|
|
20,657
|
|
|
Changes
in operating assets and liabilities:
|
|
|
|
|
|
|
|
|
|
Debt
Offering Costs
|
|
|
454
|
|
|
|
-
|
|
|
Decrease
in accounts receivable - other
|
|
|
196
|
|
|
|
9,714
|
|
|
(Increase)
Decrease in Inventory
|
|
|
(2,160
|
)
|
|
|
(3,842
|
)
|
|
(Increase)
Decrease in prepaids
|
|
|
327
|
|
|
|
-
|
|
|
(Increase)
Decrease in deposits
|
|
|
-
|
|
|
|
79
|
|
|
Increase
(Decrease) in accounts payable
|
|
|
(2,955
|
)
|
|
|
(17,751
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Net
Cash Provided by Operating Activities
|
|
|
50,211
|
|
|
|
48,152
|
|
|
|
|
|
|
|
|
|
|
|
|
CASH
FLOWS FROM INVESTING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
Purchase
of fixed assets
|
|
|
(11,666
|
)
|
|
|
(21,493
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Net
Cash Provided (Used) by Investing Activities
|
|
|
(11,666
|
)
|
|
|
(21,493
|
)
|
|
|
|
|
|
|
|
|
|
|
|
CASH
FLOWS FROM FINANCING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
Payments
on notes payable
|
|
|
(22,101
|
)
|
|
|
(22,756
|
)
|
|
Payments
on shareholder loan
|
|
|
(44,463
|
)
|
|
|
(60,143
|
)
|
|
Additional
paid In capital
|
|
|
740
|
|
|
|
-
|
|
|
Proceeds
from shareholder loan
|
|
|
-
|
|
|
|
45,261
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Cash Provided (Used) by Financing Activities
|
|
|
(65,824
|
)
|
|
|
(37,638
|
)
|
|
|
|
|
|
|
|
|
|
|
|
NET
INCREASE (DECREASE) IN CASH
|
|
$
|
(27,279
|
)
|
|
$
|
(10,979
|
)
|
|
|
|
|
|
|
|
|
|
|
|
CASH
POSITION, BEGINNING OF YEAR
|
|
|
49,722
|
|
|
|
60,701
|
|
|
|
|
|
|
|
|
|
|
|
|
CASH
POSITION, END OF THE TWELVE MONTHS PERIOD
|
|
|
22,443
|
|
|
|
49,722
|
|
|
|
|
|
|
|
|
|
|
|
|
SUPPLEMENTAL
DISCLOSURE OF CASH FLOW INFORMATION
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CASH
PAID FOR DURING THE PERIOD:
|
|
|
|
|
|
|
|
|
|
Interest
|
|
$
|
22,700
|
|
|
$
|
27,463
|
|
|
Income
Taxes
|
|
$
|
-
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
NON
CASH FINANCING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
Principle interest
contributed
by stockholder
|
|
$
|
91,618
|
|
|
$
|
20,657
|
|
The
accompanying notes are an integral part of these consolidated financial
statements.
F-6
ALLSTAR
RESTAURANTS
NOTES TO THE
CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2009 and
2008
|
1.
|
DESCRIPTION
OF THE BUSINESS
|
|
|
The
company was incorporated December 22, 2004 under the laws of the state of
the 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. 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 the operating company for all business
activities relating to the company’s restaurant businesses in Canada. On
June 15, 2007, by order of Directors’ Resolution, the subsidiary’s name
(Fastserve Foods Inc.) was changed to China Doll Foods Ltd.
|
|
2.
|
SIGNIFICANT
ACCOUNTING POLICIES
|
|
|
These
financial statements have been prepared in accordance with Generally
Accepted Accounting Principles followed in the United States of America
and reflect the following significant accounting
policies.
|
|
|
(a)
|
Principles of
Consolidation
|
|
|
The
accompanying consolidated financial statements include the accounts of its
wholly owned subsidiary China Doll Foods Ltd., (collectively, the
“Company”). All significant intercompany accounts and
transactions have been eliminated, if
any.
|
|
|
(b)
|
Financial
Instruments
|
|
|
It
is management's opinion that the company is not exposed to significant
interest, currency or credit risks arising from its financial
instruments.
|
|
|
The
preparation of financial statements in accordance with generally accepted
accounting principles used in the United States of America requires
management to make estimates and assumptions that affect the reported
amounts of assets and liabilities at the date of the financial statements,
and the reported amounts of revenues and expenses during the reporting
period. Actual results could differ from management's best
estimates, as additional information becomes available in the
future. As adjustments become necessary, they are reported in
income in the period in which they become
known.
|
|
|
Inventory
is stated at the lower of cost and net realizable value. Cost is
determined on the first in, first out basis, although we value some older
inventory items at current costs.
|
|
|
(e)
|
Property
and Equipment
|
|
|
Property
and equipment are recorded at cost. Depreciation is computed using the
straight line over the useful lives as shown at note
3.
|
|
|
(f)
|
Revenue
Recognition Policy
|
|
|
|
|
|
|
|
Sales
revenue is earned when cash is received and in minimal instances where
credit is extended creating a receivable. Credit card and debit card sales
consistently represent approximately 65% of sales
revenue.
|
F-7
ALLSTAR
RESTAURANTS
NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS
March
31, 2009 and 2008
|
2.
|
SIGNIFICANT
ACCOUNTING POLICIES
(Continued)
|
|
|
(f)
|
Revenue
Recognition Policy
|
|
|
Accounts
receivable or house accounts, represent less than 1% of sales. Credit card
and debit card sales create credit card receivables on which
re-imbursement is normally received in an average of one to three
operating days, depending on the type of credit card accepted. The
restaurant business currently accepts Visa, MasterCard, American Express,
and all types of bank debit cards.
|
The
Company follows the policy of charging the costs of advertising to expense as
incurred. During the year ended March 31, 2009 and 2008, the Company expensed
$53,729 and $43,459, respectively.
The
Company and its subsidiary file income tax returns in the U.S. federal
jurisdiction, and in Canada, respectively.
With few exceptions,
the Company is no longer subject to U.S. federal, state and local, or non-U.S.
income tax examinations by tax authorities for years before March 31,
2005.
The
Company adopted the provisions of FASB Interpretation No. 48,
Accounting for Uncertainty in Income
Taxes
, on January 1, 2007. For the year ended March 31, 2009, the company
had taken no uncertain tax positions to disclose.
The
Company’s policy is to recognize interest accrued related to unrecognized tax
benefits in interest expense and penalties in operating expenses.
|
|
(h)
|
New
Accounting Pronouncements
|
SFAS
No. 141 (revised 2007),
Business
Combinations
This
Statement fundamentally alters the manner in which the buyer recognizes and
measures the assets acquired and liabilities assumed in the business combination
and the goodwill related to the business combination. In particular,
the fair value principles in this revised Statement are a major change from
Statement No. 141’s cost allocation process. The Statement is
effective for business combinations for which the acquisition date is on or
after the beginning of the first annual reporting period beginning on or after
December 15, 2008. This statement does not affect the company.
SFAS
No. 157,
Fair Value
Measurements
This
Statement does not require any new fair value measurements, but rather, it
provides enhanced guidance to other pronouncements that require or permit assets
or liabilities to be measured at fair value. However, the application
of this Statement may change how fair value is determined. The
Statement also expands the required disclosures about fair value measurements.
The Statement is effective for financial statements issued for fiscal years
beginning after November 15, 2007, and interim periods within those fiscal
years. The implementation of the Statement for nonfinancial assets
and nonfinancial liabilities that are recognized or disclosed at fair value in
the financial statements on a nonrecurring basis is deferred to fiscal years
beginning after November 15, 2008, and interim periods within those fiscal
years. This statement does not affect the company at this time.
SFAS
No. 160,
Noncontrolling
Interests in Consolidated Financial Statements
This
Statement amends Accounting Research Bulletin No. 51,
Consolidated Financial
Statements,
and requires all entities to report noncontrolling (minority)
interests in subsidiaries within equity in the consolidated financial
statements, but separate from the parent shareholders’ equity. The
Statement is effective for fiscal years, and interim periods within those fiscal
years, beginning on or after December 15, 2008. This statement does not affect
the company at this time.
F-8
ALLSTAR
RESTAURANTS
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
March 31, 2009 and
2008
|
2.
|
SIGNIFICANT
ACCOUNTING POLICIES
(Continued)
|
|
|
(h)
|
New
Accounting Pronouncements
|
SFAS
No. 161,
Disclosures about
Derivative Instruments and Hedging Activities
This
Statement requires enhanced disclosures about derivative instruments and hedging
activities. The Statement is effective for financial statements
issued for any reporting period that begins after November 15, 2008, regardless
of whether that reporting period is the first interim period in the entity’s
fiscal year. This statement does not affect the company.
SFAS
No. 163,
Accounting for
Financial Guarantee Insurance Contracts - an interpretation of FASB Statement
No. 60
This
Statement clarifies how SFAS No. 60,
Accounting and Reporting by
Insurance Enterprises,
applies to financial guarantee insurance
contracts, including recognition and measurement of premium revenue and claim
liabilities. The Statement also requires expanded disclosures about
financial guarantee insurance contracts. SFAS
No. 163
is effective for financial statements issued for fiscal years beginning after
December 15, 2008, and interim periods within those fiscal years, except for
disclosures about the insurance enterprise’s risk-management activities.
Disclosures about the insurance enterprise’s risk-management activities are
effective the first period (including interim periods) beginning after May
23, 2008. This statement does not affect the company.
|
3.
|
PROPERTY
AND EQUIPMENT
|
|
|
|
|
Year Ended 2009
|
|
|
Year Ended 2008
|
|
|
|
Useful
|
|
|
|
|
|
|
|
|
|
|
Accumulated
|
|
|
|
Life
|
|
Cost
|
|
|
Depreciation
|
|
|
Cost
|
|
|
Depreciation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equipment
and furniture
|
5
years
|
|
$
|
105,651
|
|
|
$
|
74,905
|
|
|
$
|
126,845
|
|
|
$
|
66,068
|
|
|
Computer
equipment
|
5
years
|
|
|
6,918
|
|
|
|
4,512
|
|
|
|
8,482
|
|
|
|
3,836
|
|
|
Electronic
equipment
|
5
years
|
|
|
26,980
|
|
|
|
18,016
|
|
|
|
26,178
|
|
|
|
15,707
|
|
|
Website
|
5
years
|
|
|
3,262
|
|
|
|
2,182
|
|
|
|
4,000
|
|
|
|
1,875
|
|
|
Vehicles
|
5
years
|
|
|
3,724
|
|
|
|
2,421
|
|
|
|
4,566
|
|
|
|
2,055
|
|
|
Leasehold
improvements
|
7
years
|
|
|
239,752
|
|
|
|
142,186
|
|
|
|
289,247
|
|
|
|
115,675
|
|
|
|
|
|
$
|
386,287
|
|
|
$
|
244,222
|
|
|
$
|
459,318
|
|
|
$
|
205,215
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
book value
|
|
|
$
|
142,065
|
|
|
|
|
|
|
$
|
254,103
|
|
|
|
|
|
|
|
Depreciation
expense for the years ended March 31, 2009 and 2008 were $87,115 and
$89,859, respectively.
|
|
|
The
Small Business Term Loan at Conexus Credit Union (Regina, Sask. Canada)
carries an interest rate of prime plus 3% secured by a general security
agreement over all property of the company and is payable over seven years
in equal monthly installments of CAD$ 3,100 (US$ 2,460) including
principal and interest. The original loan was in the amount of CAD$
204,000 (US$ 161,874) of which CAD$ 4,000 (US$ 3,174) is being carried on
the balance sheet as Debt Offering Costs and amortized over the seven year
term of the loan.
|
|
|
|
2008
|
|
|
|
|
|
|
|
Long
term principal balance as of March 31, 2009
|
|
|
|
|
|
|
$
|
62,228
|
|
|
Current
portion due
|
|
|
25,335
|
|
|
|
|
|
|
|
|
Total
balance outstanding as of March 31, 2009
|
|
|
87,563
|
|
F-9
ALLSTAR
RESTAURANTS
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
March 31, 2009 and
2008
|
4.
|
LONG
TERM DEBT (Continued)
|
|
|
Principle
repayments to maturity are as
follows:
|
|
Year
Ending
|
|
|
|
|
March 31, 2009
|
|
Amount
|
|
|
|
|
|
|
|
2010
|
|
$
|
25,335
|
|
|
2011
|
|
|
26,764
|
|
|
2012
|
|
|
28,273
|
|
|
Thereafter
|
|
|
7,191
|
|
|
|
|
$
|
87,563
|
|
On March
31, 2005 the company assumed responsibility for the lease of its premises from
the previous operator of the restaurant and lounge. Upon the assumption of the
lease the company executed an option to renew the term for an additional five
years extending to January 31, 2012. Upon this expiry date, the company also has
two five-year options to renew the lease. The minimum annual rental for each of
the next four years to the end of the current lease term is as
follows:
|
2010
|
|
$
|
48,584
|
|
|
2011
|
|
|
51,283
|
|
|
2012
|
|
|
51,283
|
|
|
Thereafter
|
|
|
-
|
|
|
|
|
$
|
151,150
|
|
The
company currently has authorized 75,000,000 common voting shares each with a par
value of $0.001. As of the year ended March 31, 2009, the company had 9,950,000
common shares outstanding, compared to 9,950,000 common shares outstanding as of
the year ended March 31, 2008.
Deferred
taxes are provided on a liability method whereby deferred tax assets are
recognized for deductible temporary differences and operating loss and tax
credit carry forwards and deferred tax liabilities are recognized for taxable
temporary differences. Temporary differences are the differences
between the reported amounts of assets and liabilities and their tax
bases. Deferred tax assets are reduced by a valuation allowance when,
in the opinion of management, it is more likely than not that some portion or
all of the deferred tax assets will not be realized. Deferred tax
assets and liabilities are adjusted for the effects of changes in tax laws and
rates on the date of enactment.
F-10
ALLSTAR
RESTAURANTS
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
March 31, 2009 and
2008
|
7.
|
INCOME
TAXES (Continued)
|
Net
deferred tax assets consist of the following components:
|
|
|
March 31,
|
|
|
|
|
2009
|
|
|
2008
|
|
|
Deferred
tax assets:
|
|
|
|
|
|
|
|
NOL
Carryover
|
|
$
|
38,500
|
|
|
$
|
32,000
|
|
|
Depreciation
|
|
|
22,900
|
|
|
|
8,600
|
|
|
|
|
|
|
|
|
|
|
|
|
Deferred
tax liabilities:
|
|
|
|
|
|
|
|
|
|
Depreciation
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
Valuation
allowance
|
|
|
(61,400
|
)
|
|
|
(40,600
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Net
deferred tax asset
|
|
$
|
-
|
|
|
$
|
-
|
|
The
income tax provision differs from the amount of income tax determined by
applying the U.S. federal income tax rate to pretax income from continuing
operations for the years ended March 31, 2009 and 2008 due to the
following:
|
|
|
March 31,
|
|
|
|
|
2009
|
|
|
2008
|
|
|
|
|
|
|
|
|
|
|
Book
Income
|
|
$
|
(18,300
|
)
|
|
$
|
(19,700
|
)
|
|
Contributed
Interest
|
|
|
600
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Valuation
allowance
|
|
|
17,700
|
|
|
|
19,700
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
-
|
|
|
$
|
-
|
|
At March
31, 2009, the Company had total net operating losses carried forward of
approximately $98,600 that may be offset against future taxable income from the
year 2010 through 2030. No tax benefit has been reported in the March 31, 2009
financial statements since the potential tax benefit is offset by a valuation
allowance of the same amount.
Due to
the change in ownership provisions of the Tax Reform Act of 1986, net operating
loss carry forwards for Federal income tax reporting purposes are subject to
annual limitations. Should a change in ownership occur, net operating
loss carry forwards may be limited as to use in future years.
|
8.
|
RELATED
PARTY TRANSACTIONS
|
|
|
Since
inception of the company, Terry G. Bowering, our Chairman, President,
Chief Executive Officer, and principal shareholder, loaned funds to the
company. There were no additional shareholder loans made to the company
during the 2008/2009 fiscal year. In fact, the shareholder loan was
substantially reduced during this period. The outstanding balance of the
shareholder loan as at March 31, 2008 was $212,282. The outstanding
balance of the shareholder loan as at March 31, 2009 is $61,591 and is
shown as a current liability on the balance sheet. This shareholder
loan carries no set terms of principal repayment. The shareholder
will not make a claim for interest on this loan during the current year or
foreseeable future. Imputed Interest has been recorded on the balance
sheet at the rate of 8.00 % on the total outstanding loan balance for the
period ended March 31, 2009. Additional Paid-In Capital in the form of
imputed interest on the shareholder loan in the amount of $14,221
was recorded as
interest expense on the Income statement
and
|
F-11
ALLSTAR
RESTAURANTS
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
March 31, 2009 and
2008
|
8.
|
RELATED
PARTY TRANSACTIONS (Continued)
|
credited
to Additional Paid-In Capital on the balance sheet. 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. Fastserve Foods Inc.’s common shares were 100%
wholly-owned by Terry G. Bowering, our current Chairman, President, Chief
Executive Officer. On June 15, 2007, the subsidiary’s name was changed to China
Doll Foods Ltd. As of the date of this filing, Terry G. Bowering holds a total
of 5,100,000 common shares of Allstar Restaurants.
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:
i)
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.
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. At March 31, 2009, the Company has an accumulated
deficit of $(164,951) and has incurred a loss from operations for the twelve
months then ended. The company’s current liabilities exceed its current assets
by $86,215. 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) raising
additional capital through sale of common stock in additional private placement
share offerings as needed in 2009; (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; (4) The company filed a Form SB-2 Registration Statement with the
United States Securities and Exchange Commission which has been declared
affective as of August 18, 2007,
F-12
ALLSTAR
RESTAURANTS
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
March 31, 2009 and
2008
|
10.
|
GOING
CONCERN (Continued)
|
making
the company fully reporting. As of October 5, 2007, the company received a
trading symbol (OTCBB: AREN), and is now publicly traded on the NASD
Over-The-Counter Bulletin Board Exchange. The company’s fully reporting and
publicly traded status will provide enhanced opportunities for the company to
raise capital via private and public stock offerings in the future.
Management
cannot provide any assurances that the Company will be successful in
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. The accompanying financial
statements do not include any adjustments that might be necessary if the Company
is unable to continue as a going concern.
F-13
Item 8. Changes in and disagreements with Accountants on
Accounting and Financial Disclosure
There
have been no disagreements on accounting and financial disclosures from the
inception of the Company through to the date of this Report.
Item 8A. Controls and Procedures
Critical
Accounting Policies
The
Company maintains disclosure controls and procedures that are designed to ensure
that information required to be disclosed in the Company's Exchange Act reports
is recorded, processed, summarized and reported within the time periods
specified in the SEC's rules and forms, and that such information is accumulated
and communicated to the Company's management, including its Chief Executive
Officer and Chief Financial Officer, as appropriate, to allow timely decisions
regarding required disclosure based closely on the definition of "disclosure
controls and procedures" in Rule 13a-15(e). The Company’s disclosure controls
and procedures are designed to provide a reasonable level of assurance of
reaching the Company’s desired disclosure control objectives. In
designing and evaluating the disclosure controls and procedures, management
recognized that any controls and procedures, no matter how well designed and
operated, can provide only reasonable assurance of achieving the desired control
objectives, and management necessarily was required to apply its judgment in
evaluating the cost-benefit relationship of possible controls and
procedures. The Company’s certifying officer has concluded that the
Company’s disclosure controls and procedures are effective in reaching that
level of assurance.
As of the
end of the period being reported upon, the Company carried out an evaluation,
under the supervision and with the participation of the Company's management,
including the Company's Chief Executive Officer and the Company's Chief
Financial Officer, of the effectiveness of the design and operation of the
Company's disclosure controls and procedures. Based on the foregoing, our Chief
Executive Officer and Chief Financial Officer concluded that our disclosure
controls and procedures were effective.
There
have been no significant changes in our internal controls or in other factors
that could significantly affect the internal controls subsequent to the date the
Company completed its evaluation.
(a)
Evaluation of
Disclosure Controls and Procedures.
Our management, with the
participation of our President, evaluated the effectiveness of our disclosure
controls and procedures as of the end of the period covered by this report.
Based on that evaluation, our President 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 our management, including our President, 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.
Management’s Annual Report on
Internal Control over Financial Reporting.
Our management 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 of 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.
Our
management, with the participation of the President, evaluated the effectiveness
of the Company’s internal control over financial reporting as of March 31, 2009.
In making this assessment, our management used the criteria set forth by the
Committee of Sponsoring Organizations of the Treadway Commission (COSO) in
Internal Control — Integrated Framework. Based on this evaluation, our
management, with the participation of the President, concluded that, as of March
31, 2009, our internal control over financial reporting was
effective.
(b)
Changes in Internal Control over
Financial Reporting.
There were no changes in the Company's internal
controls over financial reporting, known to the chief executive officer or the
chief financial officer that occurred during the period covered by this
report that has materially affected, or is reasonably likely to materially
affect, the Company's internal control over financial
reporting.
Item 8B. Other Information
None to
Report.
Part III
Item 9. Directors, Executive Officers, Promoters and Control Persons;
Compliance with Section 16(a) of the Exchange Act
The
following table sets forth certain information as of June 18, 2009.
Executive
Compensation
The
following table sets forth the salaries and directors’ fees we expect to pay to
our executives on an annual basis.
|
Person
|
Age
|
Position
|
Term
|
|
|
|
|
|
|
Mr.
Terry G. Bowering
(1)
|
48
|
President
& Director
|
1
Year
|
|
(1)
|
Mr.
Terry G. Bowering is the Chief Executive Officer, President and Chairman
of Allstar Restaurants.
|
We do not
have an audit committee, nor do we have a compensation committee at this time.
We anticipate forming these committees at a future Board of Directors’
meeting.
Chairman,
Chief Executive Officer, President, Chief Financial Officer and Chief Accounting
Officer
Terry G. Bowering
was born
August 30, 1960, in Canada.
At
present, Mr. Bowering is employed as Managing Director and General Manager of
China Doll Foods Ltd. (formerly Fastserve Foods Inc.), in Regina, Saskatchewan,
Canada. Mr. Bowering oversees the daily business operations of ChinaDoll Foods
Ltd., its restaurants and food services business, as well as the corporate
development and administrative duties for Allstar Restaurants. Mr. Bowering also
acts as an independent Management Consultant offering consultation to private
companies on a variety of financial and administrative issues. From 1999 to 2003
Mr. Bowering was a Director and Chief Executive Officer of Netforce Systems
Inc., an Internet Services company, based in Antigua, West Indies. Mr. Bowering
holds a Bachelor of Administration degree (B.Admin.) in Finance from the
University of Regina, and a Master of Business Administration degree (MBA) from
the University of Saskatchewan, Canada. Mr. Bowering currently resides in
Regina, Canada. Mr. Bowering was appointed to the position of Director on
December 22
nd
, 2004,
to serve until his successor has been elected and qualifies.
Compliance
with Section 16(a) of Securities Exchange Act of 1934
During
the fiscal year ended March 31, 2009, our Directors and Officers complied with
all applicable Section 16(a) filing requirements. This statement is based solely
on a review of the copies of such reports that reflect all reportable
transactions furnished to us by our Directors and Officers and their written
representations that such reports accurately reflect all reportable
transactions.
Item 10. Executive Compensation
The
following table sets forth the salaries and directors’ fees paid to our
executives on an annual basis.
Executive
Compensation
The
following table sets forth the salaries and directors’ fees we expect to pay to
our executives on an annual basis.
|
Person
|
Position
|
Salary
|
Directors’ fees
|
|
|
|
|
|
|
Terry
G. Bowering
(1)
|
President
& Director
|
$63,140
|
$0.00*
|
(1)
Mr. Terry G. Bowering is the President and Director of Allstar
Restaurants.
We
currently do not have an audit committee, nor do we have a compensation
committee. We anticipate forming these committees at a future Board of
Directors’ meeting.
|
Person
|
Director’s
Position
|
|
Stock
Based Salary
|
|
|
*Fees
|
|
|
Compensation/Salary
|
|
|
Total
|
|
|
|
|
2008
|
|
|
2009
|
|
|
2008
|
|
|
2009
|
|
|
2008
|
|
|
2009
|
|
|
2008
|
|
|
2009
|
|
|
Terry
G. Bowering
|
Chair,
CEO, CFO, CAO
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
$
|
42,000
|
|
|
$
|
63,140
|
|
|
$
|
42,000
|
|
|
$
|
63,140
|
|
We
currently have one director. As of March 31, 2009, there are no other
arrangements, standard or otherwise, with any director or officer wherein the
director or officer is compensated other than as stated above.
So that
we can attract qualified personnel in the future, and to retain quality
employees, officers and directors, we intend to develop a stock option plan and
have our employees, officers and directors opt in to the plan at their choosing;
and/or issue shares to our employees, officers and directors.
Item 11. Security Ownership of Certain Beneficial Owners and Management
and Related Stockholder Matters
The
following table sets forth, as of June 18, 2009, certain information
as to shares of our common stock owned by (i) each person known by us to
beneficially own more than 5% of our outstanding common stock, (ii) each of our
directors, and (iii) all of our executive officers and directors as a
group:
|
|
|
AMOUNT
AND NATURE
|
|
PERCENT
OF
|
|
|
|
OF
BENEFICIAL SHARES
|
|
OUTSTANDING
|
|
NAME
|
|
OWNED
|
|
OWNERSHIP
|
|
|
|
|
|
|
|
Terry
G. Bowering
|
|
5,100,000
common shares
|
|
51.26%
|
Mr.
Bowering’s shares have not been registered for resale.
Item 12. 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, some
related party transactions have taken place.
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., now known as 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
current 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. Fastserve Foods Inc. was 100%
wholly-owned by our current Chairman of the Board and Chief Executive Officer,
Terry G. Bowering. As of the date of this filing, Mr. bowering holds a total of
5,100,000 common shares of Allstar Restaurants.
Since
inception, Terry G. Bowering, our current Chairman, President, Chief Executive
Officer, and principal shareholder, loaned funds to the company. There were no
additional shareholder loans made to the company during the 2008/2009 fiscal
year. In fact, during the 2008/2009 fiscal period, the principal of the
shareholder loan was substantially reduced. The outstanding balance of the
shareholder loan as at March 31, 2008 was $212,282. The outstanding balance of
the shareholder loan as at March 31, 2009 was $61,591. This shareholder
loan carries no set terms of principal repayment. The shareholder will not
make a claim for interest on this loan during the current year or foreseeable
future. Imputed Interest has been recorded on the balance sheet at the rate of
8.00 % on the total outstanding loan balance for the period ended March 31,
2009. Additional Paid-In Capital in the form of imputed interest on the
shareholder loan in the amount of $14,221 was recorded as interest expense on
the Income statement and credited to Additional Paid-In Capital on the balance
sheet.
Item 13. Exhibits
EXHIBITS
(a)
Audited Consolidated Financial Statements (included in Part 10 of this
Report):
Auditor’s
Report
Consolidated
Balance Sheet – March 31, 2009
Consolidated
Statements of Operations and Deficit – March 31, 2009
Consolidated
Statements of Cash Flows – March 31, 2009
Consolidated
Statement of Stockholders’ Equity – March 31, 2009
Notes
to Consolidated Financial Statements – March 31, 2009
(b)
None.
(c)
Exhibit
Item 14. Principal Accountant Fees and Services
Our audit
fees have remained consistent the last two years. However, we are aware that
audit fees have generally increased as a function of the increased reporting
requirements mandated by the enacted Sarbanes-Oxley Act. We
are also optimistic that
our business activities will increase, which will require auditing procedures
over a greater transaction base.
AUDIT
FEES. The aggregate fees billed by our auditors for
professional services rendered for the audits of our annual financial statements
for the fiscal years ended March 31, 2009 and 2008 and for the reviews of the
financial statements included in our Quarterly Reports on Form 10-Q and 10-QSB
during the fiscal year ended Mar 31, 2009 and 2008 were $24,875 and $22,000,
respectively.
AUDIT
RELATED FEES. We did not incur any fees to auditors for audit related
fees during the fiscal years ended March 31, 2009 and 2008.
TAX FEES. Our
fees to auditors for tax compliance, tax advice or tax compliance services
during the fiscal year ended March 31, 2009 were $1,075.
ALL OTHER
FEES. We did not incur any other fees billed by auditors for services
rendered to our Company, other than the services covered in “Audit Fees” for the
fiscal years ended March 31, 2009 and 2008.
SIGNATURES
In
accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized
.
|
|
ALLSTAR
RESTAURANTS
(Registrant)
|
|
|
|
|
|
|
|
|
By
|
/s/ Terry
G. Bowering
|
|
|
|
|
Terry
G. Bowering,
|
|
|
|
|
Chief
Executive Officer, Chief Financial Officer
|
|
|
|
|
Chief
Accounting Officer
|
|
|
|
|
|
|
|
|
Date
|
June
18, 2009
|
|
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