UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-Q

PART I - FINANCIAL INFORMATION

These 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-Q.  In the opinion of management, all adjustments considered necessary for a fair presentation have been included.  Operating results for the interim period ended June 30,December 31, 2010 are not necessarily indicative of the results that can be expected for the full year.

 

See accompanying notesNotes to financial statements.Financial Statements.

NOTES TO THE FINANCIAL STATEMENTS

NOTE 1 – SUMMARY OF ACCOUNTING POLICIES

 

NOTE 69 - SUBSEQUENT EVENTS

Management has evaluated subsequent events through the date on which the financial statements were submitted to the Securities and Exchange Commission and has determined it does not have any material subsequent events to disclose.of this filing.

 

Forward-Looking Statements

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,continu e,” “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.

Overview

We were incorporated as “Windstar, Inc.”intend to help develop and commercialize a potentially lifesaving technology by the introduction of tissue-engineered skin substitutes to restore the qualities of healthy human skin for use in the Statetreatment of Nevada on September 6, 2007. We are engaged in the businessburns, chronic wounds and a variety 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.

PermaDerm™ is a tissue-engineered skin substitute prepared from autologous (patient’s own) skin cells.  It is a combination of cultured epithelium with a collagen-fibroblast implant that produces a skin substitute that contains both epidermal and dermal components.  This model has been engagedshown in preclinical studies to generate a search for other business opportunities which may benefit our shareholders and allow us to raise capital and operate.  Recent negotiations with whatfunctional skin barrier. Critically, we believe that self-to-self skin grafts for permanent skin tissue will not be rejected by the immune system of the patient, unlike with porcine or cadaver grafts in which rejection is a more viable business opportunity leads us to believe that we will be revising our business plan and focus over the next quarter. If this opportunity does not develop, however, we will continue to both seek new opportunities and look for capital to develop our Product.an important possibility.

 

Results of Operations for the Three and Nine Months Ended June 30,December 31, 2010 and 2009 and Period from September 6, 2007 (Date of Inception) until June 30, 2010vs. December 31, 2009.

We have generated no revenue forrevenues since the period from September 6, 2007 (Dateinception of Inception) until June 30, 2010.the Company.  We do not anticipate earningexpect to generate revenues until such timewe are able to obtain FDA approval of PermaDerm™, and thereafter acquire the license rights to sell products associated with 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.technology.

Our Operating ExpensesWe incurred operating expenses of $769,261 for the three months ended June 30,December 31, 2010, were $2,000, as compared with operating expenses of $2,000 for the three months ended June 30,December 31, 2009.  Our Operating Expensesoperating expenses for both periods consisted of general and administrative expenses.  Our operating expenses in 2009, consisting of professional fees, were incurred primarily to enable us to satisfy the nine months ended June 30,requirements of a reporting company. Our operating expenses increased dramatically in 2010 were $6,000, as compareda result of ramping up operations in connection with $6,000 forour tissue-engineered skin substitutes business, and consisted mainly of the nine months ended June 30, 2009.  Our Operating Expenses from September 6, 2007 (Date of Inception) to June 30, 2010 were $65,500.  Our Operating Expenses for all periods consisting entirely of Professional Fees.following:

We therefore, recordedincurred stock based compensation of $112,500 from the issuance of 150,000 shares of our common stock to a consultant.  Such amount is included above under consulting.  Our other expenses for the three months December 31, 2010 consisted of interest expense amounting to $1,875.  The interest expense was incurred under the terms of a demand note payable.

We incurred a net loss of $771,136 for the three months ended December 31, 2010, as compared with a net loss of $2,000 for the three months ended June 30, 2010, as compared with $2,000 for the three months ended June 30,December 31, 2009.  We recorded a net loss

Going Concern

We have negative working capital, have incurred losses since inception, and have not yet received revenues from sales of products or services.  These factors create substantial doubt about 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.

A smaller reporting company is not required to provide the information required by this Item.

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 June 30,December 31, 2010.  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.Officer.  Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of June 30,December 31, 2010, our disclosure controls and procedures are effective.  Therewere not effective due to the presence of material weaknesses in internal control over financial reporting.

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the company’s annual or interim financial statements will not be prevented or detected on a timely basis. Management has identified the following material weaknesses which have been no changescaused management to conclude that, as of December 31, 2010, our disclosure controls and procedures were not effective: (i) inadequate segregation of duties and effective risk assessment; and (ii) insufficient written policies and procedures for accounting and financial reporting with respect to the requirements and application of both US GAAP and SEC guidelines.

Remediation Plan to Address the Material Weaknesses in Internal Control over Financial Reporting

Limitations on the Effectiveness ofChanges in Internal ControlsControl over Financial Reporting

Our management does not expect that our disclosure controls and procedures orThere were no changes in our internal control over financial reporting will necessarily prevent all fraud and material error. Our disclosure controls and proceduresduring the three months ended December 31, 2010 that have materially affected, or are designedreasonable likely to provide reasonable assurance of achievingmaterially affect, 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 ainternal 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.over financial reporting.

PART II – OTHER INFORMATION

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.

A smaller reporting company is not required to provide the information required by this Item.

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SIGNATURES