nova_10q.htm

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 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 o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No o The registrant does not have a Web site.

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

PART I – FINANCIAL INFORMATION

Item 1.	Financial Statements	3
	Condensed Balance Sheets		4
	Condensed Statements of Operations		5
	Condensed Statements of Cash Flows		6
	Notes to the Unaudited Condensed Financial Statements		7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		8
Item 3.	Quantitative and Qualitative Disclosures about Market Risk		10
Item 4.	Controls and Procedures		10

PART II – OTHER INFORMATION

Item 6.	Exhibits		11
Signatures			12

PART I – FINANCIAL INFORMATION

	SEPT 30, 2012			DEC 31, 2011
	(Unaudited)
ASSETS
CURRENT ASSETS
Cash	$	1,154		$	283
Total current assets		1,154			283

TOTAL ASSETS	$	1,154		$	283

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
Accounts payable – related party	$	36,750		$	20,300
Accounts payable		-			4,445
Loans		66,250			56,250
Accrued interest		8,308			4,340
Total current liabilities		111,308			85,335
Total liabilities		111,308			85,335
STOCKHOLDERS' EQUITY
Common stock, $.001 par value; 20,000,000 shares authorized; 18,000,000 shares issued and outstanding		18,000			18,000
Additional paid-in capital		9,000			9,000
Deficit accumulated during the development stage		(137,154	)		(112,052	)
Total stockholders' equity		(110,154	)		(85,052	)

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	1,154		$	283

	FOR THE THREE MONTHS ENDED SEPT 30, 2012			FOR THE THREE MONTHS ENDED SEPT 30, 2011			FOR THE NINE MONTHS ENDED SEPT 30, 2012			FOR THE NINE MONTHS ENDED SEPT 30, 2011			FROM INCEPTION ON APR 25, 1986 TO SEPT 30, 2012

Revenues	$	0		$	0		$	0		$	0		$	0

Expenses
General and administrative		5,828			1,427			21,134			5,148			128,846
Total expenses		5,828			1,427			21,134			5,148			128,846

Net operating loss before other expense		(5,828	)		(1,427	)		(21,134	)		(5,148	)		(128,846	)

Other income (expense)
Interest expense		(1,325	)		(1,125	)		(3,968	)		(3,381	)		(8,308	)
Total other income (expense)		(1,325	)		(1,125	)		(3,968	)		(3,381	)		(8,308	)

Loss from operations before income taxes		(7,153	)		(2,552	)		(25,102	)		(8,529	)		(137,154	)

Income taxes		0			0			0			0			0

Net loss	$	(7,153	)	$	(2,552	)	$	(25,102	)	$	(8,529	)	$	(137,154	)

Basic and diluted net loss per share	$	(0.00	)	$	(0.00	)	$	(0.00	)	$	(0.00	)

Weighted average shares outstanding		18,000,000			18,000,000			18,000,000			18,000,000

	FOR THE NINE MONTHS ENDED SEPT 30, 2012			FOR THE NINE MONTHS ENDED SEPT 30, 2011			FROM INCEPTION ON APR 25, 1986 TO SEPT 30, 2012

Cash Flows from Operating Activities
Net loss	$	(25,102	)	$	(8,529	)	$	(137,154	)
Adjustments to reconcile net loss to cash provided (used) by operating activities:
Shares issued for services		0			0			10,000
Depreciation and amortization		0			0			17,000
Changes in assets and liabilities:
Increase in accounts payable and accrued expenses		12,005			(275	)		36,750
Increase in accrued interest		3,968			3,381			8,308
Net cash provided (used) by operating activities		(9,129	)		(5,423	)		(65,096	)

Cash Flows from Investing Activities
Net cash provided (used) by investing activities		0			0			0

Cash Flows from Financing Activities
Proceeds from cash advances and notes payable		10,000			4,000			66,250
Net cash provided by financing activities		10,000			4,000			66,250

Increase (decrease) in cash		871			(1,423	)		1,154

Cash and cash equivalents at beginning of period		283			2,002			0

Cash and cash equivalents at end of period	$	1,154		$	579		$	1,154

Supplemental Cash Flow Information:
Cash paid for interest	$	0		$	0		$	0
Cash paid for Income taxes	$	0		$	0		$	0

Non-Cash Investing and Financing Activities
Stock issued for marketing rights	$	0		$	0		$	17,000
Converted accounts payable and advances into loans	$	0		$	52,250		$	52,250

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 as of and for the period ended September 30, 2012 and for all periods presented 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 December 31, 2011 audited financial statements as reported in its Form 10-K. The results of operations for the period ended September 30, 2012 are not necessarily indicative of the operating results for the full year ended December 31, 2012.

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. The Company has limited assets, has incurred losses since inception, has negative cash flows from operations, and has no revenue-generating activities. Its activities have been limited for the past several years and it is dependent upon financing to continue operations. These factors raise substantial doubt about the ability of the Company to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. It is management’s plan to acquire or merge with other operating companies.

The U. S. Securities and Exchange Commission (“SEC”) encourages reporting companies to disclose forward-looking information so that investors can better understand future prospects and make informed investment decisions. This report contains these types of statements. Words such as “may,” “expect,” “believe,” “intend,” “anticipate,” “estimate,” “project,” or “continue” or comparable terminology used in connection with any discussion of future operating results or financial performance identify forward-looking statements. You are cautioned not to place undue reliance on the forward-looking statements, which speak only as of the date of this report. All forward-looking statements reflect our present expectation of future events and are subject to a number of important factors and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements.

We are a development stage company and have not recorded revenues for the past two fiscal years. At September 30, 2012 we had $1,154 in cash and total liabilities of $111,308. We are dependent upon financing to continue basic operations. Management intends to rely upon advances or loans from management, significant stockholders or third parties to meet our cash requirements, but we have not entered into written agreements guaranteeing funds and, therefore, no one is obligated to provide funds to us in the future. These factors raise doubt as to our ability to continue as a going concern. Our plan is to combine with an operating company to generate revenue.

As of the date of this report, our management has not had any discussions with any representative of any other entity regarding a business combination with us. Any target business that is selected may be a financially unstable company or an entity in its early stages of development or growth, including entities without established records of sales or earnings. In that event, we will be subject to numerous risks inherent in the business and operations of financially unstable and early stage or potential emerging growth companies. In addition, we may effect a business combination with an entity in an industry characterized by a high level of risk, and, although our management will endeavor to evaluate the risks inherent in a particular target business, there can be no assurance that we will properly ascertain or assess all significant risks. Also, any business combination or transaction will likely result in a significant issuance of shares and substantial dilution to present stockholders of the Company.

We anticipate that the selection of a business opportunity will be complex and extremely risky. Because of general economic conditions, rapid technological advances being made in some industries and shortages of available capital, our management believes that there are numerous firms seeking the perceived benefits of becoming a publicly traded corporation. Such perceived benefits of becoming a publicly traded corporation include, among other things, facilitating or improving the terms on which additional equity financing may be obtained, providing liquidity for the principals of and investors in a business, creating a means for providing incentive stock options or similar benefits to key employees, and offering greater flexibility in structuring acquisitions, joint ventures and the like through the issuance of securities. Potentially available business combinations may occur in many different industries and at various stages of development, all of which will make the task of comparative investigation and analysis of such business opportunities extremely difficult and complex.

Management anticipates that the struggling global economy will restrict the number of business opportunities available to us and will restrict the cash available for such transactions. There can be no assurance in the current economy that we will be able to acquire an interest in an operating company.

If we obtain a business opportunity, then it may be necessary to raise additional capital. We anticipate that we will sell our common stock to raise this additional capital. We expect that we would issue such stock pursuant to exemptions to the registration requirements provided by federal and state securities laws. The purchasers and manner of issuance will be determined according to our financial needs and the available exemptions to the registration requirements of the Securities Act of 1933. We do not currently intend to make a public offering of our stock. We also note that if we issue more shares of our common stock, then our stockholders may experience dilution in the value per share of their common stock.

We have not recorded revenues from operations since inception. We have not established an ongoing source of revenue sufficient to cover our operating costs and we have relied primarily upon related parties to pay for our operating expenses. At September 30, 2012 our cash increased to $1,154 from $283 at December 31, 2011 as a result of proceeds from additional loans. Our total liabilities increased to $111,308 for the nine month period ended September 30, 2012 (“nine month period”) from $85,335 at December 31, 2011 and this increase primarily represents loans totaling $10,000 and accounts payable of $12,005 for professional services performed by or paid for by a related party.

We intend to obtain capital from management, significant stockholders and/or third parties to cover minimal operations; however, there is no assurance that additional funding will be available. Our ability to continue as a going concern during the long term is dependent upon our ability to find a suitable business opportunity and acquire or enter into a merger with such company. The type of business opportunity with which we acquire or merge will affect our profitability for the long term.

During the next 12 months we anticipate incurring additional costs related to the filing of Exchange Act reports. We believe we will be able to meet these costs through funds provided by management, significant stockholders and/or third parties. We may also rely on the issuance of our common stock in lieu of cash to convert debt or pay for expenses.

We did not record revenues in either the three or nine month periods ended September 30, 2012 or 2011. General and administrative expense increased from $1,427 for the three month period ended September 30, 2011 (“third quarter”) to $5,828 for 2012 third quarter. General and administrative expense increased from $5,148 for the 2011 nine month period to $21,134 for 2012 nine month period. The increases in general and administrative expense in the 2012 interim periods primarily reflect increased professional and consulting services relied upon for our operations.

Accordingly, our net loss increased from $2,552 for the 2011 third quarter to $7,153 for the 2012 third quarter and our net loss increased from $8,529 for the 2011 nine month period to $25,102 for the 2012 nine month period. Management expects net losses to continue until we acquire or merge with a business opportunity.

At September 30, 2012 we recorded loans totaling $66,250 and at December 31, 2011 we recorded loans of $56,250 representing services received, as well as cash advances received from unrelated parties. Prior to December 31, 2010 management intended to issue common stock to convert amounts owed to third parties; however, it was determined that it was not in the best interests of all parties to issue stock for the advances and, therefore, the parties agreed that liabilities of $52,250 would be treated as loans effective January 1, 2011. All of the loans are non-collateralized, carry interest at 8% and are due on demand.

We have not entered into any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources and would be considered material to investors.

We maintain disclosure controls and procedures (as defined in Rule 13a-15(e) or 15d-15(e) under the Exchange Act) that are designed to ensure that information required to be disclosed in our filings under the Exchange Act is recorded, processed, summarized and reported within the periods specified in the rules and forms of the SEC. This information is accumulated to allow our management to make timely decisions regarding required disclosure. Our President, who serves as our principal executive officer and principal financial officer, evaluated the effectiveness of our disclosure controls and procedures as of the end of the period covered by this report and he determined that our disclosure controls and procedures were ineffective due to a control deficiency. During the period we did not have additional personnel to allow segregation of duties to ensure the completeness or accuracy of our information. Due to the size and operations of the Company we are unable to remediate this deficiency until we acquire or merge with another company.

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). Management conducted an evaluation of our internal control over financial reporting and determined that there were no changes made in our internal control over financial reporting during the quarter ended September 30, 2012 that have materially affected or are reasonably likely to materially affect our internal control over financial reporting.

No.		Description
3(i)		Articles of Incorporation, as amended (Incorporated by reference to exhibit 3.1 of Form 10-SB, filed December 10, 2001)
3(ii)		Bylaws of Nova Star Innovations, Inc. (Incorporated by reference to exhibit 3.2 of Form 10-SB, filed December 10, 2001)
101.INS		XBRL Instance Document
101.SCH		XBRL Taxonomy Extension Schema Document
101.CAL		XBRL Taxonomy Calculation Linkbase Document
101.DEF		XBRL Taxonomy Extension Definition Linkbase Document
101.LAB		XBRL Taxonomy Label Linkbase Document
101.PRE		XBRL Taxonomy Presentation Linkbase Document

Nevada		90-0369457
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

#281, 369 East 900 South, Salt Lake City, Utah		84111
(Address of principal executive offices)		(Zip Code)

Large accelerated filer	o	Accelerated filer	o
Non-accelerated filer	o	Smaller reporting company	x

No.		Description
31.1		Principal Executive Officer Certification
31.2		Principal Financial Officer Certification
32.1		Section 1350 Certification

	NOVA STAR INNOVATIONS, INC.

Date: November 6, 2012	By:	/s/ Mark S. Clayton
		Mark S. Clayton
		President and Director
		Principal Financial Officer