10-Q 1 form10q013109.txt FORM 10-Q DATED 01-31-09 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended: January 31, 2009 or [ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT For the transition period from ________________ to __________________ Commission File Number: 333-143630 TECHS LOANSTAR, INC. ______________________________________________________ (Exact name of registrant as specified in its charter) Nevada 20-4682058 _______________________________ ___________________ (State or other jurisdiction of (IRS Employer incorporation or organization) Identification No.) 112 North Curry Street Carson City, Nevada, 89703 ________________________________________ (Address of principal executive offices) (775) 284-3770 ____________________________________________________ (Registrant's telephone number, including area code) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ] Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. Large accelerated filer [ ] Accelerated filer [ ] Non-accelerated filer [ ] Smaller reporting company [X] (Do not check if a smaller reporting company) Indicate by check mark whether the registrant is a shell company (as defined in rule 12b-2 of the Exchange Act). Yes [X] No [ ] Indicate the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date: As of February 17, 2009, the registrant had 40,400,000 shares of common stock, $0.001 par value, issued and outstanding. TECHS LOANSTAR, INC. (A DEVELOPMENT STAGE COMPANY) CONDENSED FINANCIAL STATEMENTS JANUARY 31, 2009 (UNAUDITED) CONDENSED BALANCE SHEETS CONDENSED STATEMENTS OF OPERATIONS CONDENSED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT) CONDENSED STATEMENTS OF CASH FLOWS CONDENSED NOTES TO FINANCIAL STATEMENTS 2

TECHS LOANSTAR, INC. (A DEVELOPMENT STAGE COMPANY) CONDENSED BALANCE SHEETS (UNAUDITED) January 31, 2009 April 30, 2008 _______________________________________________________________________________________________________________________________ ASSETS CURRENT ASSETS Cash $ 5 $ 198 Prepaid Expenses - - _______________________________________________________________________________________________________________________________ Total Assets 5 198 =============================================================================================================================== LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) CURRENT LIABILITIES Accrued expenses 7,575 9,528 Shareholders Loan 14,773 1,167 _______________________________________________________________________________________________________________________________ Total Liabilities 22,348 10,695 _______________________________________________________________________________________________________________________________ STOCKHOLDERS' EQUITY (DEFICIT) Capital stock Authorized 300,000,000 shares of common stock, $0.001 par value, Issued and outstanding 40,400,000 shares of common stock 40,400 40,400 Additional paid-in capital (17,900) (17,900) Deficit accumulated during the development stage (44,843) (32,997) _______________________________________________________________________________________________________________________________ Total Stockholders' Equity (22,343) (10,497) _______________________________________________________________________________________________________________________________ Total Liabilities and Stockholders' Equity $ 5 $ 198 ===============================================================================================================================

The accompanying notes are an integral part of these financial statements 3

TECHS LOANSTAR, INC. (A DEVELOPMENT STAGE COMPANY) CONDENSED STATEMENTS OF OPERATIONS (UNAUDITED) CUMULATIVE FROM THREE MONTHS THREE MONTHS NINE MONTHS NINE MONTHS INCEPTION ENDED ENDED ENDED ENDED (APRIL 7, 2006) JANUARY 31, 2009 JANUARY 31, 2008 JANUARY 31, 2009 JANUARY 31, 2008 TO JANUARY 31, 2009 __________________________________________________________________________________________________________________________________ REVENUE $ - $ - $ - $ - $ - __________________________________________________________________________________________________________________________________ OPERATING EXPENSES Office and general $ 148 (3,391) $ (2,990) $ (5,137) $ (13,937) Professional fees (5,000) (2,500) (8,856) (8,400) (30,906) __________________________________________________________________________________________________________________________________ LOSS FROM OPERATIONS $ (4,852) $ (5,891) $ (11,846) $ (13,537) $ (44,843) PROVISION FOR INCOME TAX $ - $ - $ - $ - $ - NET LOSS $ (4,852) $ (5,891) $ (11,846) $ (13,537) $ (44,843) ================================================================================================================================== BASIC AND DILUTED LOSS PER COMMON SHARE $ 0.00 $ 0.00 $ 0.00 $ 0.00 ================================================================================================================================== WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING - BASIC AND DILUTED 40,000,000 35,468,624 40,000,000 35,468,624 ==================================================================================================================================

The accompanying notes are an integral part of these financial statements. 4

TECHS LOANSTAR, INC. (A DEVELOPMENT STAGE COMPANY) CONDENSED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT) FROM INCEPTION (APRIL 7, 2006) TO JANUARY 31, 2009 (UNAUDITED) Deficit Accumulated Additional Share During the Paid-in Subscription Development Common Stock Capital Receivable Stage Total _______________________________________________________________________________________ Number of shares Amount ___________________________________________________________________________________________________________________________________ Balance, April 7,2006 - $ - $ - $ - $ - $ - Common stock issued at $0.001 per share on 28,000,000 28,000 (21,000) (7,000) - - April 21, 2006 to President Net loss for the year ended April 30, 2006 (Audited) - - - - (1,279) (1,279) ___________________________________________________________________________________________________________________________________ Balance, April 30, 2006 (Audited) 28,000 (21,000) (7,000) (1,279) (1,279) ___________________________________________________________________________________________________________________________________ Proceeds received from share subscriptions - - - 7,000 - 7,000 receivable Common stock issued at $0.005 per share. 12,400,000 12,400 3,100 - - 15,500 (May 1, 2006 to April 30, 2007) Net Loss for the year ended April 30,2007 (Audited) - - - - (9,867) (9,867) ___________________________________________________________________________________________________________________________________ Balance, April 30, 2007 (Audited) 40,400,000 $ 40,400 $ (17,900) - (11,146) 11,354 ___________________________________________________________________________________________________________________________________ Net Loss for the year ended April 30,2008 (Audited) - - - - (21,851) (21,851) ___________________________________________________________________________________________________________________________________ Balance, April 30, 2008 (Audited) 40,400,000 $ 40,400 $ (17,900) (32,997) (10,497) ___________________________________________________________________________________________________________________________________ Net loss for the period ended January 31, 2009 - - - - (11,846) (11,846) ___________________________________________________________________________________________________________________________________ Balance, January 31, 2009 40,400,000 $ 40,400 $ (17,900) $ - $ (44,843) $ (22,343) ===================================================================================================================================

The accompanying notes are an integral part of these financial statements. 5

TECHS LOANSTAR, INC. (A DEVELOPMENT STAGE COMPANY) CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED) Cumulative results of operations from Nine months Nine months inception (April ended ended 7, 2006) to January 31, 2009 January 31, 2008 January 31, 2009 __________________________________________________________________________________________________________________________ OPERATING ACTIVITIES Net loss $ (11,846) $ (13,537) $ (44,843) Changes in operating assets and liabilities Prepaid Expenses - 2,500 - Accrued Liabilities (1,954) 4,457 7,575 __________________________________________________________________________________________________________________________ NET CASH FROM OPERATING ACTIVITIES (13,800) (6,580) (37,268) __________________________________________________________________________________________________________________________ FINANCING ACTIVITIES Proceeds from sale of common stock - - 22,500 Shareholders Loan 13,607 - 14,773 __________________________________________________________________________________________________________________________ NET CASH FROM FINANCING ACTIVITIES 13,607 - 37,273 __________________________________________________________________________________________________________________________ NET INCREASE (DECREASE) IN CASH (193) (6,580) 5 CASH, BEGINNING 198 11,954 - __________________________________________________________________________________________________________________________ CASH, ENDING $ 5 $ 5,374 $ 5 ========================================================================================================================== Supplemental cash flow information: Cash paid for: Interest $ - $ - $ - Income Taxes $ - $ - $ - ========================================================================================================================== NON-CASH ACTIVITIES Stock issued for services - - - Stock issued for accounts payable - - - Stock issued for notes payable - - - Stock issued for convertible debentures and interest - - - Convertible debentures issued for services - - - Warrants issued - - - Stock issued for penalty on default of convertible debenture - - - Note payable issued for finance charges - - - Forgiveness of not payable and accrued interest - - - Stock issued for investment. - - -

The accompanying notes are an integral part of these financial statements. 6 TECHS LOANSTAR, INC. (A DEVELOPMENT STAGE COMPANY) NOTES TO THE CONDENSED FINANCIAL STATEMENTS (UNAUDITED) JANUARY 31, 2009 _______________________________________________________________________________ NOTE 1 - CONDENSED FINANCIAL STATEMENTS The accompanying financial statements have been prepared by the Company without audit. In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations, and cash flows at January 31, 2009, and for all periods presented herein, have been made. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted. It is suggested that these condensed financial statements be read in conjunction with the financial statements and notes thereto included in the Company's April 30, 2008 audited financial statements. The results of operations for the periods ended January 31, 2009 and 2008 are not necessarily indicative of the operating results for the full years. NOTE 2 - GOING CONCERN The Company's financial statements are prepared using generally accepted accounting principles 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. The Company has not yet established an ongoing source of revenues sufficient to cover its operating costs and allow it to continue as a going concern. The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable. If the Company is unable to obtain adequate capital, it could be forced to cease operations. In order to continue as a going concern, the Company will need, among other things, additional capital resources. Management's plan is to obtain such resources for the Company by obtaining capital from management and significant shareholders sufficient to meet its minimal operating expenses and seeking equity and/or debt financing. However 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. 7 ITEM 2: MANAGEMENT DISCUSSION AND ANALYSIS OR PLAN OF OPERATION Overview This interim report contains forward looking statements relating to our Company's future economic performance, plans and objectives of management for future operations, projections of revenue mix and other financial items that are based on the beliefs of, as well as assumptions made by and information currently known to our management. The words "expects", "intends", "plans", "believes", "anticipates", "may", "could", "should" and other similar expressions and variations thereof are intended to identify forward-looking statements. The cautionary statements set forth in this section are intended to emphasize that actual results may differ materially from those contained in any forward looking statement. The following discussion should be read in conjunction with our financial statements and related notes included elsewhere in this report. Techs Loanstar, Inc. ("Techs Loanstar," "the Company," "us", "our" or "we,") was incorporated in the State of Nevada as a for-profit company on April 7, 2006. We are a development-stage company formed to enter into the loan management services industry with proprietary loan management software applications that we intend to procure. The Company proposes to provide low cost, user friendly data base applications for the growing payday and equity loan industry. Techs Loanstar will compete with traditional loan management software developers by offering a range of consulting services and customized data base applications to pay-day and equity loan businesses. The Company has not generated any revenues from inception nor during the fiscal quarter ended January 31, 2009. As of the fiscal quarter ended January 31, 2009 we had $5 of cash on hand. We incurred operating expenses of $4,852 comprised of professional fees and office and general expenses. In the fiscal quarter ended January 31, 2008 we incurred operating expenses of $5,891 also made up of professional fees and office and general expenses. Since inception, Techs Loanstar has incurred operating losses of $44,843. Plan of Operation We anticipate that our current cash and cash equivalents and cash generated from operations, if any, will be insufficient to satisfy our liquidity requirements for at least the next 12 months. We will require additional funds and the Company will seek to sell additional capital through private equity placements, debt securities or seek alternative sources of financing. If we are unable to secure additional financing, we may be required to reduce the scope of our business plan, which could harm our business, financial condition and operating results. Over the next 12 month period we must raise capital and start the staged procurement of our loan management software systems that we intend to license in stages and expand and enhance over time and as our business develops. As our first step we plan to acquire open source data base applications that we can customize to suite a wide variety of financing businesses, such as pay-day and equity loan, leasing and finance companies. The cost of customizing theses application is estimated to cost $7,000. The next stage is procuring the e-commerce transaction software required in advance of client functionality that will enable the purchase of our products and services over the Internet at an estimated cost of $4,000. 8 In the final stage expect to procure client functionality modules to augment the loan management data base systems with a call center, website integration, data conversion, internet lead integration and accounting file auto export services, estimated to cost $8,000. During this stage we will continue work on the client, transaction and administration modules and other data base functionality. During this period we also intend to initiate our marketing activities to attract prospective clients from a large number of North American pay-day and equity loan businesses. Our marketing plan includes identifying and initiating contact with pay-day and equity loan providers, participating in finance industry trade shows, placing advertisements in trade magazines and on-line journals and contacting finance industry associations. The execution of the marketing plan is estimated to cost $15,000. If we can complete these stages and we receive a positive reaction from our potential customers in the form of firm purchase orders, we will attempt to raise money through a private placement, public offering or long-term loans to purchase additional functionality for our loan management software. At present, our sole officer and director has invested $7,000 and a total of 31 others have invested a further $15,500 through the purchase of common shares of the company. Our sole officer and director has also invested a further $14,773 in the way of shareholder loans. At the present time, we have not made any arrangements to raise additional cash. If we are unable to raise capital, we will either suspend development and marketing operations until we do raise the cash or cease operations entirely. If we are unable to complete any phase of our software procurement or marketing efforts because we don't have enough money, we will cease our development and marketing operations until we raise money. Attempting to raise capital after failing in any phase of our software procurement plan would be difficult. As such, if we cannot secure additional proceeds we will have to cease operations and investors would lose their entire investment. Management does not plan to hire additional employees at this time. Our sole officer and director will be responsible for the initial product sourcing. Once the company is ready to begin its Internet marketing, it will hire an independent consultant to build our web site. The Company also intends to hire sales representatives initially on a commission only basis to keep administrative overhead to a minimum. Off Balance Sheet Arrangements. As of the date of this Quarterly Report, the current funds available to the Company will not be sufficient to continue operations. The cost to establish the Company and begin operations is estimated to be approximately $24,000 over the next twelve months and the cost of maintaining our reporting status is estimated to be $14,000 over this same period. The officer and director, Mr. Pizzacalla has undertaken to provide the Company with operating capital to sustain our business over the next twelve month period as the expenses are incurred in the form of a non-secured loan. However, there is no contract in place or written agreement securing this agreement. Management believes that if the Company cannot raise sufficient revenues or maintain its reporting status with the SEC it will have to cease all efforts directed towards the Company. As such, any investment previously made would be lost in its entirety. Other than the above described situation the Company does not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on the Company's financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors. 9 ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK We are a smaller reporting company as defined by Rule 12b-2 of the Securities Act of 1934 and are not required to provide the information under this item. Item 4T. CONTROLS AND PROCEDURES Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is defined in Rule 13a-15(f) or 15d-15(f) promulgated under the Securities Exchange Act of 1934 as a process designed by, or under the supervision of, the company's principal executive and principal financial officers and effected by the company's board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America and includes those policies and procedures that: - Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the company; - Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with accounting principles generally accepted in the United States of America and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and - Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the company's assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. Because of the inherent limitations of internal control, there is a risk that material misstatements may not be prevented or detected on a timely basis by internal control over financial reporting. However, these inherent limitations are known features of the financial reporting process. Therefore, it is possible to design into the process safeguards to reduce, though not eliminate, this risk. As of January 31, 2009 management assessed the effectiveness of our internal control over financial reporting based on the criteria for effective internal control over financial reporting established in Internal Control--Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission ("COSO") and SEC guidance on conducting such assessments. Based on that evaluation, they concluded that, during the period covered by this report, such internal controls and procedures were not effective to detect the inappropriate application of US GAAP rules as more fully described below. This was due to deficiencies that existed in the design or operation of our internal controls over financial reporting that adversely affected our internal controls and that may be considered to be material weaknesses. The matters involving internal controls and procedures that our management considered to be material weaknesses under the standards of the Public Company 10 Accounting Oversight Board were: (1) lack of a functioning audit committee due to a lack of a majority of independent members and a lack of a majority of outside directors on our board of directors, resulting in ineffective oversight in the establishment and monitoring of required internal controls and procedures; (2) inadequate segregation of duties consistent with control objectives; and (3) ineffective controls over period end financial disclosure and reporting processes. The aforementioned material weaknesses were identified by our Chief Executive Officer in connection with the review of our financial statements as of January 31, 2009. Management believes that the material weaknesses set forth in items (2) and (3) above did not have an effect on our financial results. However, management believes that the lack of a functioning audit committee and the lack of a majority of outside directors on our board of directors results in ineffective oversight in the establishment and monitoring of required internal controls and procedures, which could result in a material misstatement in our financial statements in future periods. In an effort to remediate the identified material weaknesses and other deficiencies and enhance our internal controls, we have initiated, or plan to initiate, the following series of measures: We will create a position to segregate duties consistent with control objectives and will increase our personnel resources and technical accounting expertise within the accounting function when funds are available to us. And, we plan to appoint one or more outside directors to our board of directors who shall be appointed to an audit committee resulting in a fully functioning audit committee who will undertake the oversight in the establishment and monitoring of required internal controls and procedures such as reviewing and approving estimates and assumptions made by management when funds are available to us. Management believes that the appointment of one or more outside directors, who shall be appointed to a fully functioning audit committee, will remedy the lack of a functioning audit committee and a lack of a majority of outside directors on our Board. We will continue to monitor and evaluate the effectiveness of our internal controls and procedures and our internal controls over financial reporting on an ongoing basis and are committed to taking further action and implementing additional enhancements or improvements, as necessary and as funds allow. There was no change in our internal controls over financial reporting that occurred during the period covered by this report, which has materially affected, or is reasonably likely to materially affect, our internal controls over financial reporting. PART II. OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS The Company is not a party to any pending legal proceedings, and no such proceedings are known to be contemplated. No director, officer, or affiliate of the issuer and no owner of record or beneficiary of more than 5% of the securities of the issuer, or any security holder is a party adverse to the small business issuer or has a material interest adverse to the small business issuer. ITEM 1A. RISK FACTORS We are a smaller reporting company as defined by Rule 12b-2 of the Securities Act of 1934 and are not required to provide the information under this item. 11 ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS None. ITEM 3. DEFAULTS UPON SENIOR SECURITIES None ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS None ITEM 5. OTHER INFORMATION None ITEM 6. EXHIBITS 31.1 Rule 13(a)-14(a)/15(d)-14(a) Certification of Chief Executive Officer 31.2 Rule 13(a)-14(a)/15(d)-14(a) Certification of Chief Financial Officer* 32.1 Section 1350 Certification of Chief Executive Officer 32.2 Section 1350 Certification of Chief Financial Officer** * Included in Exhibit 31.1 ** Included in Exhibit 32.1 SIGNATURES Pursuant to the requirements of the Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. TECHS LOANSTAR, INC. By: /s/ GARY PIZZACALLA ________________________________________ Gary Pizzacalla President, Secretary Treasurer, Principal Executive Officer, Principal Financial Officer and Director Dated: March 9, 2009 12