Business Context and Reporting Period
Company: BlueStar Financial Group, Inc. (Note: Input metadata referenced "Quest Resource Holding Corp," but the filing text identifies the registrant as BlueStar Financial Group, Inc.)
Reporting Period: Quarterly period ended September 30, 2009.
Status: Development stage company incorporated in Nevada (July 12, 2002). The company has no subsidiaries and has not conducted revenue-generating operations since inception. It is classified as a shell company and a smaller reporting company.
Key Financial Metrics
| Metric | Three Months Ended Sep 30, 2009 | Three Months Ended Sep 30, 2008 | Inception to Sep 30, 2009 |
|---|---|---|---|
| Revenue | $0 | $0 | $0 |
| Net Loss | $(3,023) | $(600) | $(64,800) |
| Cash Balance (End of Period) | $3 | $500 | $3 |
| Total Assets | $109,523 | N/A | $109,523 |
| Total Liabilities | $16,923 | N/A | $16,923 |
| Stockholders' Equity | $92,600 | N/A | $92,600 |
| Shares Outstanding | 12,400,000 | 7,400,000 (Wtd Avg) | 12,400,000 |
Liquidity & Debt: The company holds $3 in cash. Current liabilities include $1,523 in accounts payable and $15,400 in related party payables. Assets are primarily composed of notes receivable ($94,520) and amounts due from a consultant ($15,000).
Material Changes and Operational Updates
- Management Changes: On October 27, 2009, Richard A. Papworth was appointed Interim CEO and Board Member, and Jeffrey Rassas was appointed Chairman. The company relocated from Richland, Washington, to Scottsdale, Arizona.
- Strategic Pivot: The company announced a Letter of Intent on November 11, 2009, to purchase YouChange, Inc., an electronic re-commerce and recycling company, marking an entry into the "Green Tech" sector.
- Financial Position: Net loss for the quarter increased to $3,023 from $600 in the prior year period, driven by professional fees. Accumulated deficit since inception stands at $64,800.
Outlook, Risks, and Contingencies
Going Concern: The filing contains a substantial doubt disclosure regarding the company's ability to continue as a going concern. The company has no revenue and relies on obtaining adequate capital to fund operating losses.
Capital Needs: Management estimates a need for approximately $25,000 over the next 12 months to maintain reporting status and implement business plans. Without this capital, operations may cease.
Legal Contingency: A dispute exists with Delos Stock Transfer regarding the alleged misappropriation of approximately $15,000 from an escrow account. This amount is recorded as "Due from consultant" on the balance sheet.
Risk Factors: Risks include lack of operating history, inability to secure financing, potential dilution of shareholders, and management's lack of technical experience in the proposed leasing/Green Tech sectors.
Investor Verification Checklist
- Cash Runway: Verify the immediate availability of the estimated $25,000 required for operations, given the current cash balance of only $3.
- Asset Recoverability: Assess the collectability of the $94,520 in notes receivable and the $15,000 disputed amount from Delos Stock Transfer.
- Transaction Status: Confirm the status of the Letter of Intent to purchase YouChange, Inc., as this is the primary proposed revenue driver.
- Legal Resolution: Monitor the outcome of the dispute with Delos Stock Transfer, which represents a significant portion of current assets.
- Financing Terms: Review any new financing agreements for potential dilution or restrictive covenants.