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(Former
name, former address and former fiscal year, if changed since last
report)
Check
whether the issuer (1) filed all reports required to be filed by Section 13
or
15(d) of the Securities Exchange Act of 1934 during the preceding 12 months
(or
for such shorter period that the issuer was required to file such reports),
and
(2) has been subject to such filing requirements for the past 90 days [ ]
Yes [X] No
Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act). [X] Yes [ ] No
State
the
number of shares outstanding of each of the issuer’s classes of common stock, as
of the latest practicable date: 2,150,000 common shares as of
December 31, 2007
Transitional
Small Business Disclosure Format (check one): Yes [ ] No [X]
These
unaudited financial statements have been prepared in accordance with accounting
principles generally accepted in the United States of America for interim
financial information and the SEC instructions to Form 10-QSB. In the
opinion of management, all adjustments considered necessary for a fair
presentation have been included. Operating results for the interim
period ended December 31, 2007 are not necessarily indicative of the results
that can be expected for the full year.
Windstar,
Inc. (“Windstar”) is a development stage company and was incorporated in Nevada
on September 6, 2007. The Company is developing a cooking smoke
purifier. Windstar operates out of office space owned by a director
and stockholder of the Company. The facilities are provided at no
charge. There can be no assurances that the facilities will continue
to be provided at no charge in the future.
Development
Stage Company
The
accompanying financial statements have been prepared in accordance with the
Statement of Financial Accounting Standards No. 7 ”Accounting and Reporting by
Development-Stage Enterprises”. A development-stage enterprise is one
in which planned principal operations have not commenced or if its operations
have commenced, there has been no significant revenues there
from.
Cash
and Cash Equivalents
Windstar
considers all highly liquid investments with maturities of three months or
less
to be cash equivalents. At December 31, 2007the Company had $0 of
cash.
Fair
Value of Financial Instruments
Windstar’s
financial instruments consist of cash and cash equivalents. The carrying
amount
of these financial instruments approximates fair value due either to length
of
maturity or interest rates that approximate prevailing market rates unless
otherwise disclosed in these financial statements.
Income
Taxes
Income
taxes are computed using the asset and liability method. Under the
asset and liability method, deferred income tax assets and liabilities are
determined based on the differences between the financial reporting and tax
bases of assets and liabilities and are measured using the currently enacted
tax
rates and laws. A valuation allowance is provided for the amount of
deferred tax assets that, based on available evidence, are not expected to
be
realized.
NOTE
1 – SUMMARY OF ACCOUNTING POLICIES (continued)
Use
of Estimates
The
preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date the financial statements and
the
reported amount of revenues and expenses during the reporting
period. Actual results could differ from those
estimates.
Basic
loss per share
Basic
loss per share has been calculated based on the weighted average number of
shares of common stock outstanding during the period.
Recent
Accounting Pronouncements
Windstar
does not expect the adoption of recently issued accounting pronouncements
to
have a significant impact on the Company’s results of operations, financial
position or cash flow.
NOTE
2 – PREPAID EXPENSES
Prepaid
expenses at December 31, 2007 consisted of an advance retainer paid to the
firms
outside independent auditors for services to be rendered for periods after
December 31, 2007.
NOTE
3 – INCOME TAXES
For
the period ended December 31, 2007, Windstar has incurred net losses and,
therefore, has no tax liability. The net deferred tax asset generated
by the loss carry-forward has been fully reserved. The cumulative net
operating loss carry-forward is approximately $41,000 at December 31, 2007,
and
will expire in the year 2027.
The
cumulative tax effect at the expected rate of 34% of significant items
comprising our net deferred tax amount is as follows:
2007
Deferred
tax asset attributable to:
Net
operating loss carryover
$
13,900
Valuation
allowance
(13,900)
Net
deferred tax asset
$
-
NOTE
4 – LIQUIDITY AND GOING CONCERN
Windstar
has limited working capital and has not yet received revenues from sales
of
products or services. These factors create substantial doubt about
the Company’s ability to continue as a going concern. The financial
statements do not include any adjustment that might be necessary if the Company
is unable to continue as a going concern.
The
ability of Windstar to continue as a going concern is dependent on the Company
generating cash from the sale of its common stock and/or obtaining debt
financing and attaining future profitable operations. Management’s
plans include selling its equity securities and obtaining debt financing
to fund
its capital requirement and ongoing operations; however, there can be no
assurance the Company will be successful in these efforts.
Certain
statements, other than purely historical information, including estimates,
projections, statements relating to our business plans, objectives, and expected
operating results, and the assumptions upon which those statements are based,
are “forward-looking statements” within the meaning of the Private Securities
Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933
and Section 21E of the Securities Exchange Act of
1934. These forward-looking statements generally are identified
by the words “believes,”“project,”“expects,”“anticipates,”“estimates,”“intends,”“strategy,”“plan,”“may,”“will,”“would,”“will be,”“will
continue,”“will likely result,” and similar expressions. We intend such
forward-looking statements to be
covered by the safe-harbor provisions for forward-looking statements contained
in the
Private Securities Litigation Reform Act of 1995, and are including
this statement for purposes of
complying with those safe-harbor provisions. Forward-looking
statements are based on current expectations and assumptions that are subject
to
risks and uncertainties which may cause actual results to differ materially
from
the forward-looking statements. Our
ability to predict results or the
actual effect of future plans or strategies is inherently uncertain. Factors
which could have a material
adverse affect on
our
operations and future prospects on a
consolidated basis include, but are not limited to: changes in economic
conditions, legislative/regulatory changes, availability of capital, interest
rates, competition, and
generally accepted accounting
principles.
These risks and uncertainties should also be
considered in evaluating
forward-looking statements and undue reliance should not be placed on such
statements. We
undertake no obligation to update or revise publicly any forward-looking
statements, whether as a result of new information, future events or
otherwise. Further
information concerning our
business, including additional factors
that could materially affect our
financial results, is included herein
and in our other
filings with the SEC.
Plan
of Operation
We
were
incorporated as “Windstar, Inc.” in the State of Nevada on September 6, 2007. We
are engaged in the business of developing, producing, and marketing an effective
and inexpensive air purification device. Our goal is to produce an improved
air
purification device (our “Product”) specifically for removing the impurities
produced while cooking, and for recycling and redistributing the cleansed air
back into the kitchen. Our intention is to manufacture and distribute our
Product to residential consumers in the Philippines and other Asian countries
for everyday use in their homes. We are a development stage company and have
not
generated any sales to date. Our product is still in the development stage
and
is not yet ready for commercial sale. We plan to complete the development of
our
product in the next six to twelve months, and begin recognizing revenue from
the
distribution of our product by April, 2009.
Product
Development
Our
company’s goal is to produce an air purification device that is available to the
public at a price of $20 per unit, so as not to create a financial hardship
on
families who would like cleaner kitchen
air.
We
will achieve this goal by continuing to develop our product using the best
materials and methods available to achieve the highest quality product at the
lowest possible production cost.
We
intend
to continue to test and refine the design of the prototype of our Product over
the coming months. While we feel that our Product in its current form could
compete effectively in the marketplace, we plan to improve the design of our
Product to improve its filtration efficiency and reduce its production cost
as
much as possible. Specifically, we are looking to achieve the
following:
§
Creating
the most effective purification system using the least amount of
space;
§
Making
our product quieter and more energy efficient, to reduce consumer
cost;
§
Selecting
the best materials available at the lowest cost
possible
Depending
upon the success of our initial product, in the future we intend to add
additional components to give consumers more options and increase demand for
our
products. We expect to incur roughly $10,000 on product development in the
next
twelve months.
Production
and Distribution
We
do not
currently have any manufacturing facilities. Our directors have contacted
several general manufacturers in the Philippines, and have begun negotiations
for the manufacture of our product on a contract basis. We are currently
negotiating price, payment, customer guarantee, shipping, inventory, delivery
schedule and returns. Production of our Product doesn’t require any facilities
or equipment beyond what is available at any general manufacturer. We could
contract with any general manufacturer to manufacture our product by following
our instructions. Most manufacturers already utilize the same materials we
use
to create our Product, we simply need to provide the design and manufacturing
instructions. We do not anticipate renting a warehouse at this stage of our
business. The manufacturer we select to work with us will provide packaging,
storage, and shipping services for us as part of our agreement.
We
intend
to sell our product in wholesale orders to large kitchen, home appliance, and
residential construction companies. Upon receiving a wholesale order, we will
arrange for manufacture and shipment of the Product to the customer at
pre-negotiated prices from the manufacturer. We anticipate wholesale orders
will
be fulfilled within five business days of placing the order to the manufacturer.
Our Product will arrive at the customer fully assembled, with easy-to-follow
instructions for installation and use. As a result, production of our air
purifiers will not require us to procure any special facilities or
equipment.
Marketing
Strategy
The
goal
of our company is for our air purification system to become the leading air
purification product in Asia. In order to achieve our goal, we intend to
complete the development of our initial product and introduce our product to
the
kitchen and home appliance industries within the next twelve months. To increase
consumer awareness of our product among our potential customers,
specifically
major kitchen retailers, we intend to specifically engage in the
following:
§
Attending
National and Regional Kitchen and Home Appliance Promotions, Events
and
Conferences: These are events and conferences managed by regional
and
central home appliance organizations to promote new kitchen products
and
technology. We plan to introduce our products to the home appliance
merchants, retailers and wholesalers in attendance at these events.
These
events will also include trade meetings and promotional events and
related
seminars and conferences.
§
Developing
Direct Marketing Programs to Attract Retailers: We intend to market
directly to retailers by conducting seminars, through the use of
online
advertisements, and through traditional media outlets such as newspapers
and trade publications.
§
Special
Promotions: Initially, we intend to offer special promotions to a
few
major home appliance retailers by supplying them with a limited amount
of
our Product for sale or distribution to their general customers.
Based on
customer feedback, we anticipate these retailers will begin placing
regular, wholesale orders with our
company.
§
Product
Demonstrations: We intend to send members of our sale team to various
kitchen and home appliance supply stores and retailers to conduct
live
demonstrations of our product, including assembly, installation,
and
effectiveness.
We
anticipate that the costs associated with our initial marketing program will
be
approximately $6,000. Additional Travel expenses associated with the
development, production, and marketing of our Product are expected to be
approximately $4,000.
Management
Expansion
We
intend
to expand our current management team to retain directors, officers and
employees with experience relevant to our business focus. Our current officers
are highly skilled in technical areas such as research and product development,
and we are looking to add officers who have experience in marketing and business
management to expand our company more effectively.
Sales
Personnel
In
the
short term, we intend to use the services of our management to sell our
products. As our product approaches the manufacturing stage, however, we plan
to
employ salespersons in the Philippines, and other Asian countries to promote
and
sell our Product. These sales representatives will be responsible for
soliciting, selecting and securing accounts within a particular regional
territory.
Expenses
We
estimate the costs to implement our business strategy over the following twelve
months to be:
§
Travel
and Related expenses, which will consist primarily of our executive
officers and directors visiting home appliance merchants, retailers
and
wholesalers in their sales efforts. We estimate travel and related
expenses for the next twelve months will be approximately
$4,000;
Initial
Marketing, which will consist of the marketing efforts discussed
above,
including direct marketing and attendance at trade shows. We estimate
initial marketing expenses for the next twelve months will be
approximately $6,000;
§
Research
and Development costs consist of developing and testing our Product
and
determining the best combination of materials and suppliers for
production. We estimate that research and development costs for the
next
twelve months will be approximately
$10,000.
We
intend to obtain business capital through the use of private equity fundraising
or shareholder loans. We anticipate that, in time, the primary source of
revenues for our business model will be the sale of our Product.
Off
Balance Sheet Transactions
As
of
December 31, 2007, we have had no off balance sheet transactions.
Significant
Equipment
We
do not
intend to purchase any significant equipment for the next twelve
months.
We
did
not earn any revenues from inception through the period ending December 31,2007. We do not anticipate earning revenues until such time that we refine
our
Product and successfully market it to our target consumers. We are presently
in
the development stage of our business and we can provide no assurance that
we
will successfully implement our business plan.
We
incurred operating expenses in the amount of $37,000 for the three months ended
December 31, 2007 and $41,000 from our inception on September 6, 2007 to
December 31, 2007. The operating expenses for these periods consisted of legal
fees and accounting fees. We anticipate our operating expenses will increase
as
we undertake our plan of operations. The increase will be attributable to the
continued development of our Product and the professional fees associated with
our becoming a reporting company under the Securities Exchange Act of
1934.
We
have
not attained profitable operations and are dependent upon obtaining financing
to
pursue our business activities. For these reasons our auditors stated in their
report that they have substantial doubt we will be able to continue as a going
concern.
Going
Concern
We
have
limited working capital and have not yet received revenues from sales of
products or services. These factors create substantial doubt about the our
ability to continue as a going concern. The financial statements contained
herein do not include any adjustment that might be necessary if we are unable
to
continue as a going concern.
Our
ability to continue as a going concern is dependent on our generating cash
from
the sale of our common stock and/or obtaining debt financing and attaining
future profitable operations. Management’s plans include selling our equity
securities and obtaining debt financing to fund out capital requirement and
ongoing operations; however, there can be no assurance we will be successful
in
these efforts.
We
carried out an evaluation of the effectiveness of the design and operation
of
our disclosure controls and procedures (as defined in Exchange Act Rules
13a-15(e) and 15d-15(e)) as of December 31, 2007. This evaluation was
carried out under the supervision and with the participation of our Chief
Executive Officer and our Chief Financial Officer, Siew Mee
Fam. Based upon that evaluation, our Chief Executive Officer and
Chief Financial Officer concluded that, as of December 31, 2007, our disclosure
controls and procedures are effective. There have been no changes in
our internal controls over financial reporting during the quarter ended December31, 2007.
Disclosure
controls and procedures are controls and other procedures that are designed
to
ensure that information required to be disclosed in our reports filed or
submitted under the Exchange Act are recorded, processed, summarized and
reported, within the time periods specified in the SEC's rules and forms.
Disclosure controls and procedures include, without limitation, controls and
procedures designed to ensure that information required to be disclosed in
our
reports filed under the Exchange Act is accumulated and communicated to
management, including our Chief Executive Officer and Chief Financial Officer,
to allow timely decisions regarding required disclosure.
Limitations
on the
Effectiveness of Internal Controls
Our
management does not expect that our disclosure controls and procedures or our
internal control over financial reporting will necessarily prevent all fraud
and
material error. Our disclosure controls and procedures are designed to provide
reasonable assurance of achieving our objectives and our Chief Executive Officer
and Chief Financial Officer concluded that our disclosure controls and
procedures are effective at that reasonable assurance level. Further,
the design of a control system must reflect the fact that there are resource
constraints, and the benefits of controls must be considered relative to their
costs. Because of the inherent limitations in all control systems, no evaluation
of controls can provide absolute assurance that all control issues and instances
of fraud, if any, within the Company have been detected. These inherent
limitations include the realities that judgments in decision-making can be
faulty, and that breakdowns can occur because of simple error or mistake.
Additionally, controls can be circumvented by the individual acts of some
persons, by collusion of two or more people, or by management override of the
internal control. The design of any system of controls also is based in part
upon certain assumptions about the likelihood of future events, and there can
be
no assurance that any design will succeed in achieving its stated goals under
all potential future conditions. Over time, control may become inadequate
because of changes in conditions, or the degree of compliance with the policies
or procedures may deteriorate.
We
are
not a party to any pending legal proceeding. We are not aware of any pending
legal proceeding to which any of our officers, directors, or any beneficial
holders of 5% or more of our voting securities are adverse to us or have a
material interest adverse to us.
On
October 31, 2007, the registration statement filed on Form SB-2 (Commission
file
number 333-146834) was declared effective by the SEC. This offering has
commenced and is ongoing. This registration statement registered 950,000 shares
of Common Stock on behalf of certain selling shareholders of the company. We
will not receive any proceeds from this offering and have not made any
arrangements for the sale of these securities.
No
matters have been submitted to our security holders for a vote, through the
solicitation of proxies or otherwise, during the quarterly period ended December31, 2007.
In
accordance with the requirements of the Securities and Exchange Act of 1934,
the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
