UNITED STATES


SECURITIES AND EXCHANGE COMMISSION


Washington, DC  20549





Form 10-Q










(Mark one)


x
Quarterly Report under Section 13 or 15(d) of the Securities Exchange Act of 1934For the quarterly period ended March 31, 2010o
Transition Report under Section 13 or 15(d) of the Securities Exchange Act of 1934For the transition period from ______________ to _____________











Commission File Number: 33-56574






Truewest Corporation


(Exact name of registrant as specified in its charter)





Nevada
25-1605848(State of incorporation)
(IRS Employer ID Number)





211 West Wall Street, Midland, TX 79701


(Address of principal executive offices)





(432) 682-1761


(Issuer's telephone number)








Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 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  o  NO  o





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. (Check one):





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





Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act): YES  x  NO  o





State the number of shares outstanding of each of the issuer's classes of common equity as of the latest practicable date: April 23, 2010: 450,800




Transitional Small Business Disclosure Format (check one): YES  o  NO  x





Truewest Corporation





Form 10-Q for the Quarter ended December 31, 2009





Table of Contents





PagePart I - Financial InformationItem 1 - Financial Statements
3Item 2 - Management's Discussion and Analysis or Plan of Operation
15Item 3 - Quantitative and Qualitative Disclosures About Market Risk
17Item 4 - Controls and Procedures
17Part II - Other InformationItem 1 - Legal Proceedings
18Item 2 - Recent Sales of Unregistered Securities and Use of Proceeds
18Item 3 - Defaults Upon Senior Securities
18Item 4 - Submission of Matters to a Vote of Security Holders
18Item 5 - Other Information
18Item 6 - Exhibits
18Signatures
18


2


Part I





Item 1 - Financial Statements





Truewest Corporation


(a development stage company)


Balance Sheets


March 31, 2010 and September 30, 2009








(Unaudited)


(Audited)March 31,


September 30,2010


2009ASSETSCurrent AssetsCash on hand and in bank

$
14,252


$
20,142Total Current Assets


14,252



20,142Total Assets

$
14,252


$
20,142LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)LiabilitiesCurrent LiabilitiesAccounts payable - trade

$
—


$
—Note payable to controlling shareholder


66,000



66,000Accrued interest payable to controlling stockholder


10,822



8,848Total Current Liabilities


76,822



74,848Total Liabilities


76,822



74,848Commitments and ContingenciesStockholders’ Equity (Deficit)Preferred stock - $0.001 par value50,000,000 shares authorizedNone issued and outstanding


—



—Common stock - $0.001 par value.100,000,000 shares authorized.450,800 shares issued and outstanding


451



451Common stock warrants


1,012



1,012Additional paid-in capital


48,116,101



48,116,101Deficit accumulated during the development stage


(48,180,134
)


(48,172,270
)Total Stockholders’ Equity (Deficit)


(62,570
)


(54,706
)Total Liabilities and Stockholders’ Equity

$
14,252


$
20,142














The financial information presented herein has been prepared by management without audit


by independent certified public accountants.


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


3


Truewest Corporation


(a development stage company)


Statements of Operations


Six and Three months ended March 31, 2010 and


Period from July 5, 1989 (date of inception) through March 31, 2010





(Unaudited)








Period fromJuly 5, 1989Six months


Six months


Three months


Three months


(date of inception)ended


ended


ended


ended


throughMarch 31,


March 31,


March 31,


March 31,


March 31,2010


2009


2010


2009


2010Revenues

$
—


$
—


$
—


$
—


$
—Operating ExpensesGeneral andadministrative expenses


5,890



6,905



1,695



2,270



17,160,949Depreciation expense


—



—



—



—



91,495Research and development expense


—



—



—



—



10,556,405Technology and patent rights acquired


—



—



—



—



2,650,000Expense related to warrant extensions


—



—



—



—



17,890,676Amortization of goodwill


—



—



—



—



535,057Total operating expenses


5,890



6,905



1,695



2,270



48,884,582Loss from operations


(5,890
)


(6,905
)


(1,695
)


(2,270
)


(48,884,582
)Other Income (Expense)Interest expense


(1,974
)


(1,974
)


(976
)


(976
)


(347,427
)Other income


—



189



—



47



1,043,713Other expense


—



—



—



—



(67,405
)Equity in loss fromunconsolidated subsidiaries


—



—



—



—



(575,412
)Impairment loss


—



—



—



—



(690,124
)Gain from sale of stock


—



—



—



—



1,341,094Total other income (expense)


(1,974
)


(1,785
)


(976
)


(929
)


704,448Loss before provision for income taxes


(7,864
)


(8,690
)


(2,671
)


(3,199
)


(48,180,134
)Provision for income taxes


—



—



—



—



—Net Loss

$
(7,864
)

$
(8,690
)

$
(2,671
)

$
(3,199
)

$
(48,180,134
)Earnings per share of common stock outstanding computed on net loss -basic and fully diluted

$
(0.02
)

$
(0.02
)

$
(0.01
)

$
(0.01
)Weighted-average number of shares outstanding -basic and fully diluted


450,800



450,800



450,800



450,800














The financial information presented herein has been prepared by management without audit


by independent certified public accountants.


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


4


Truewest Corporation


(a development stage company)


Statements of Cash Flows


Six months ended March 31, 2010 and 2009 and


Period from July 5, 1989 (date of inception) through March 31, 2010





(Unaudited)








Period fromJuly 5, 1989Six months


Six months


(date of inception)ended


ended


throughMarch 31,


March 31,


March 31,2010


2009


2010Cash Flows from Operating ActivitiesNet income (loss) for the period

$
(7,864
)

$
(8,690
)

$
(48,180,134
)Adjustments to reconcile net loss tonet cash provided by operating activitiesDepreciation and amortization


—



—



626,552Equity in loss of unconsolidated subsidiaries


—



—



575,412Impairment loss


—



—



704,491Gain on sale of stock


—



—



(1,341,094
)Expense related to warrant extensions


—



—



17,890,676Warrants issued for services


—



—



515,515Common stock issued for services


—



—



138,950Common stock issued for License and Marketing agreement


—



—



80,000Inventory deposit - BICO


—



—



(1,000,000
)Accrued interest contributed to equity


—



—



324,879Increase (Decrease) inAccrued interest payable


1,974



1,974



10,822Net cash used in operating activities


(5,890
)


(6,716
)


(29,653,887
)Cash Flows from Investing ActivitiesPurchase of property and equipment


—



—



(303,746
)Proceeds from sale of property and equipment


—



—



175,000Cash paid for investment in MicroIslet & Diabecore


—



—



(2,587,468
)Proceeds from sale of MicroIslet & Diabecore stock


—



—



2,127,968Net activity on notes receivable from related parties


—



—



(138,538
)Net cash provided by (used in) investing activities


—



—



(726,784
)Cash Flows from Financing ActivitiesCash received from notes payable toFormer majority shareholder and others


—



—



396,200Current majority shareholder


—



—



66,000Convertible notes


—



—



95,000Cash paid on notes payable


—



—



(42,500
)Cash received from sale of common stock


—



—



11,096,834Cash received on Regulation S sale of common stock


—



—



288,751Cash received on sale of common stock to BICO


—



—



4,200,000Cash received on warrant exercises


—



—



157,946Net activity on cash advanced to/received from BICO


—



—



14,160,060Cash paid to acquire treasury stock


—



—



(35,001
)Cash contributed as capital to support operations


—



—



11,677Net cash provided by financing activities


—



—



30,394,967Increase (Decrease) in Cash


(5,890
)


(6,716
)


14,274Cash at beginning of period


20,142



31,323



—Cash at end of period

$
14,252


$
24,607


$
14,252














The financial information presented herein has been prepared by management without audit


by independent certified public accountants.


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


5


Truewest Corporation


(a development stage company)


Statements of Cash Flows - Continued


Six months ended March 31, 2010 and 2009 and


Period from July 5, 1989 (date of inception) through March 31, 2010





(Unaudited)





Period fromJuly 5, 1989Six months


Six months


(date of inception)ended


ended


throughMarch 31,


March 31,


March 31,2010


2009


2010Supplemental Disclosure of Interest and Income Taxes PaidInterest paid for the year

$
—


$
—


$
11,725Income taxes paid for the year

$
—


$
—


$
—Supplemental Disclosure of Non-Cash Investing and Financing ActivitiesIssuance of 371,000 shares of common stockto satisfy $303,000 note payable

$
—


$
—


$
303,000Issuance of 3,000,000 shares of common stockto BICO in payment of intercompany debt

$
—


$
—


$
10,500,000














The financial information presented herein has been prepared by management without audit


by independent certified public accountants.


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


6


Truewest Corporation


(a development stage company)


Notes to Financial Statements


March 31, 2010 and 2009








Note A - Organization and Description of Business





Truewest Corporation (Company) was incorporated on July 5, 1989 as Diasense, Inc. in accordance with the Laws of the Commonwealth of Pennsylvania.





On January 22, 2007, the Company filed Articles of Merger and Plan of Merger with the Commonwealth of Pennsylvania and the State of Nevada to change the Company’s domicile from Pennsylvania to Nevada by means of a merger with and into a Nevada corporation formed on November 3, 2006 solely for the purpose of effecting the reincorporation.  The Articles of Incorporation and Bylaws of the Nevada corporation are the Articles of Incorporation and Bylaws of the surviving corporation.  Such Articles of Incorporation maintained the Company’s corporate name of Diasense, Inc. and modified the Company’s capital structure to allow for the issuance of up to 100,000,000 shares of $0.001 par value common stock and up to 50,000,000 shares of $0.001 par value preferred stock.  Although the merger documents were filed in both Pennsylvania and Nevada on January 22, 2007, the Commonwealth of Pennsylvania required completion of certain documents in order to issue a tax clearance certificate to complete the merger. The required tax clearance was not issued until March 22,, 2007 which formally completed the domicile relocation to Nevada.  The effect of this action is reflected in the accompanying financial statements as of the first day of the first period presented.





On March 19, 2008, the Company changed its corporate name to Truewest Corporation.





On August 29, 2006, the Company entered into a Voluntary Surrender Agreement whereby all of the Company's assets, which had previously been pledged as collateral to secure loan agreements by and between the Company and Company’s lender, who was also the Company’s majority shareholder, under which the Company was then in default, were repossessed.  Through the date of the Voluntary Surrender Agreement, the Company’s business efforts were focused on developing a noninvasive glucose sensor (Sensor).  The Sensor was proposed to use electromagnetic technology to measure the concentration of glucose in human tissue without requiring the user to take a blood sample.





The Company’s current principal business activity is to seek a suitable reverse acquisition candidate through acquisition, merger or other suitable business combination method.





The Company has never fully implemented any business plan(s) and, accordingly, is considered to be in the development stage.








Note B - Preparation of Financial Statements





The Company follows the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America and has a year-end of September 30.





The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America 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 of the financial statements and the reported amounts of revenues and expenses during the reporting period.  Actual results could differ from those estimates.





Management further acknowledges that it is solely responsible for adopting sound accounting practices, establishing and maintaining a system of internal accounting control and preventing and detecting fraud.  The Company’s system of internal accounting control is designed to assure, among other items, that 1) recorded transactions are valid; 2) valid transactions are recorded; and 3) transactions are recorded in the proper period in a timely manner to produce financial statements which present fairly the financial condition, results of operations and cash flows of the Company for the respective periods being presented.





During interim periods, the Company follows the accounting policies set forth in its annual audited financial statements filed with the U. S. Securities and Exchange Commission on its Annual Report on Form 10-K containing the Company’s financial statements for the year ended September 30, 2009.  The information presented within these interim financial statements may not include all disclosures required by generally accepted accounting principles and the users of financial information provided for interim periods should refer to the annual financial information and footnotes when reviewing the interim financial results presented herein.


7


Truewest Corporation


(a development stage company)


Notes to Financial Statements - Continued


March 31, 2010 and 2009








Note B - Preparation of Financial Statements - Continued





In the opinion of management, the accompanying interim financial statements, prepared in accordance with the U. S. Securities and Exchange Commission’s instructions for Form 10-Q, are unaudited and contain all material adjustments, consisting only of normal recurring adjustments necessary to present fairly the financial condition, results of operations and cash flows of the Company for the respective interim periods presented.  The current period results of operations are not necessarily indicative of results which ultimately will be reported for the full fiscal year ending September 30, 2010.








Note C - Going Concern Uncertainty





On August 29, 2006, the Company entered into a Voluntary Surrender Agreement (Voluntary Surrender Agreement) with Dominion Assets, LLC (Dominion) whereby all of the Company's assets, which had previously been pledged as collateral to secure loan agreements under which the Company was then in default, were repossessed.  Dominion was, at that time, the majority shareholder of the Company.





The Company’s business plan is to seek an acquisition or merger with a private operating company which offers an opportunity for growth and possible appreciation of our stockholders’ investment in the then issued and outstanding common stock.  However, there is no assurance that the Company will be able to successfully consummate an acquisition or merger with a private operating company or, if successful, that any acquisition or merger will result in the appreciation of our stockholders’ investment in the then outstanding common stock.





Because of these factors, the Company’s auditors have issued an audit opinion on the Company’s financial statements which includes a statement describing our going concern status.  This means, in the auditor’s opinion, substantial doubt about our ability to continue as a going concern exists at the date of their opinion.





The Company’s majority stockholder currently maintains the corporate status of the Company and has provided all nominal working capital support on the Company's behalf.  Because of the Company's lack of operating assets, its continuance is fully dependent upon the majority stockholder's continuing support.  It is the intent of management and significant stockholders to provide sufficient working capital necessary to support and preserve the integrity of the corporate entity.  However, no formal commitments or arrangements to advance or loan funds to the Company or repay any such advances or loans exist.  There is no legal obligation for either management or significant stockholders to provide additional future funding and the Company is at the mercy of future economic trends and business operations for the Company’s majority stockholder to have the resources available to support the Company.  Should this pledge fail to provide financing, the Company has not identified any alternative sources of working capital to support the Company.





The Company's continued existence is dependent upon its ability to generate sufficient cash flows from operations to support its daily operations as well as provide sufficient resources to retire existing liabilities and obligations on a timely basis.  Further, the Company faces considerable risk in it’s business plan and a potential shortfall of funding due to our inability to raise capital in the equity securities market.  If no additional operating capital is received during the next twelve months, the Company will be forced to rely on existing cash in the bank and additional funds loaned by management and/or significant stockholders.





The Company remains dependent upon additional external sources of financing; including being dependent upon its management and/or significant stockholders to provide sufficient working capital in excess of the Company’s initial capitalization to preserve the integrity of the corporate entity.





The Company anticipates offering future sales of equity securities.  However, there is no assurance that the Company will be able to obtain additional funding through the sales of additional equity securities or, that such funding, if available, will be obtained on terms favorable to or affordable by the Company.


8


Truewest Corporation


(a development stage company)


Notes to Financial Statements - Continued


March 31, 2010 and 2009








Note C - Going Concern Uncertainty - Continued





The Company’s certificate of incorporation authorizes the issuance of up to 50,000,000 shares of preferred stock and 100,000,000 shares of common stock.  The Company’s ability to issue preferred stock may limit the Company’s ability to obtain debt or equity financing as well as impede potential takeover of the Company, which takeover may be in the best interest of stockholders.  The Company’s ability to issue these authorized but unissued securities may also negatively impact our ability to raise additional capital through the sale of our debt or equity securities.





In such a restricted cash flow scenario, the Company would be unable to complete its business plan steps, and would, instead, delay all cash intensive activities.  Without necessary cash flow, the Company may become dormant during the next twelve months, or until such time as necessary funds could be raised in the equity securities market.





While the Company is of the opinion that good faith estimates of the Company’s ability to secure additional capital in the future to reach its goals have been made, there is no guarantee that the Company will receive sufficient funding to sustain operations or implement any future business plan steps.





While the Company is of the opinion that good faith estimates of the Company’s ability to secure additional capital in the future to reach its goals have been made, there is no guarantee that the Company will receive sufficient funding to sustain operations or implement any future business plan steps.








Note D - Summary of Significant Accounting Policies





1.
Cash and cash equivalents





For Statement of Cash Flows purposes, the Company considers all cash on hand and in banks, certificates of deposit and other highly-liquid investments with maturities of three months or less, when purchased, to be cash and cash equivalents.





2.
Property and Equipment





Property and equipment were recorded at historical cost.  These costs were depreciated over the estimated useful lives of the individual assets using the straight-line method, generally seven to thirty-nine years.





Gains and losses from disposition of property and equipment are recognized as incurred and are included in operations.





In accordance with the provisions required by the Property, Plant and Equipment Topic of the FASB Accounting Standards Codification whereby the Company follows the policy of evaluating all property and equipment as of the end of each reporting quarter.  Effective September 30, 2006, the Company had no assets subject to this accounting pronouncement.





3.
Income Taxes





The Company files income tax returns in the United States of America and may file, as applicable and appropriate, various state(s).  With few exceptions, the Company is no longer subject to U.S. federal, state and local, as applicable, income tax examinations by regulatory taxing authorities for years before 2006.  The Company does not anticipate any examinations of returns filed since 2006.


9


Truewest Corporation


(a development stage company)


Notes to Financial Statements - Continued


March 31, 2010 and 2009








Note D - Summary of Significant Accounting Policies - Continued





3.
Income Taxes - continued





The Company uses the asset and liability method of accounting for income taxes.  At March 31, 2010 and September 30, 2009, respectively, the deferred tax asset and deferred tax liability accounts, as recorded when material to the financial statements, are entirely the result of temporary differences.  Temporary differences generally represent differences in the recognition of assets and liabilities for tax and financial reporting purposes, primarily accumulated depreciation and amortization, allowance for doubtful accounts and vacation accruals.





The Company has adopted the provisions required by the Income Taxes topic of the FASB Accounting Standards Codification.  The Codification Topic requires the recognition of potential liabilities as a result of management’s acceptance of potentially uncertain positions for income tax treatment on a “more-likely-than-not” probability of an assessment upon examination by a respective taxing authority.  As a result of the implementation of Codification’s Income Tax Topic, the Company did not incur any liability for unrecognized tax benefits.





4.
Earnings (loss) per share





Basic earnings (loss) per share is computed by dividing the net income (loss) available to common stockholders by the weighted-average number of common shares outstanding during the respective period presented in our accompanying financial statements.





Fully diluted earnings (loss) per share is computed similar to basic income (loss) per share except that the denominator is increased to include the number of common stock equivalents (primarily outstanding options and warrants).





Common stock equivalents represent the dilutive effect of the assumed exercise of the outstanding stock options and warrants, using the treasury stock method, at either the beginning of the respective period presented or the date of issuance, whichever is later, and only if the common stock equivalents are considered dilutive based upon the Company’s net income (loss) position at the calculation date.





At March 31, 2010 and 2009, the Company’s outstanding warrants are considered to be common stock equivalents; however, the issued and outstanding warrants are considered anti-dilutive due to the Company’s net operating loss position.





5.
Treasury Stock





The Company accounts for treasury stock acquisitions and sales pursuant to the tenets of the Equity Topic of the FASB Accounting Standards Codification whereby treasury stock acquisitions are first charged against par value and any excess purchase price is first charged to additional paid-in capital and then to retained earnings.  Any subsequent sale of treasury stock is first credited to par value and any excess is credited to additional paid-in capital.





6.
Research and development costs





Research and development expenses were charged to operations as incurred.  Patents, Licenses and Marketing Agreements acquired from the Company’s former parent company were charged to operations as acquired.





7.
New and Pending Accounting Pronouncements





The Company is of the opinion that any and all pending accounting pronouncements, either in the adoption phase or not yet required to be adopted, will not have a significant impact on the Company's financial position or results of operations.


10


Truewest Corporation


(a development stage company)


Notes to Financial Statements - Continued


March 31, 2010 and 2009








Note E - Fair Value of Financial Instruments





The carrying amount of cash, accounts receivable, accounts payable and notes payable, as applicable, approximates fair value due to the short term nature of these items and/or the current interest rates payable in relation to current market conditions.





Interest rate risk is the risk that the Company’s earnings are subject to fluctuations in interest rates on either investments or on debt and is fully dependent upon the volatility of these rates.  The Company does not use derivative instruments to moderate its exposure to interest rate risk, if any.





Financial risk is the risk that the Company’s earnings are subject to fluctuations in interest rates or foreign exchange rates and are fully dependent upon the volatility of these rates.  The company does not use derivative instruments to moderate its exposure to financial risk, if any.








Note F - Note Payable to Officer/Director





On September 29, 2006, the Company and it’s sole officer and director, Glenn A. Little, acknowledged that outside funds are necessary to support the corporate entity and comply with the periodic reporting requirements of the Securities Exchange Act of 1934, as amended.  To this end, Mr. Little agreed to lend the Company up to $50,000 with a maturity period not to exceed two (2) years from the initial funding date at an interest rate of 6.0% per annum.  Through December 31, 2009 and September 30, 2009, respectively, Mr. Little has advanced approximately $66,000 under this agreement.  This loan matured on September 30, 2008.  The Company and Mr. Little intend to negotiate an extension of the maturity date into some future period.  At this time, Mr. Little has made no demand for payment.








Note G - Income Taxes





The components of income tax (benefit) expense for each of the six months ended March 31, 2010 and 2009 and for the period from July 5, 1989 (date of inception) through March 31, 2010, are as follows:





Period fromJuly 5, 1989Six months


Six months


(date of inception)ended


ended


throughMarch 31,


March 31,


March 31,2010


2009


2010Federal:Current

$
—


$
—


$
—Deferred


—



—



——



—



—State:Current


—



—



—Deferred


—



—



——



—



—Total

$
—


$
—


$
—





Concurrent with a September 2006 change in control, the Company has a net operating loss carryforward for future periods of approximately $103,000.  The ultimate amount and availability of any future net operating loss carryforwards may be subject to limitations set forth by the Internal Revenue Code. Factors such as the number of shares ultimately issued within a three year look-back period; whether there is a deemed more than 50 percent change in control; the applicable long-term tax exempt bond rate; continuity of historical business; and subsequent income of the Company all enter into the annual computation of allowable annual utilization of the carryforwards.


11


Truewest Corporation


(a development stage company)


Notes to Financial Statements - Continued


March 31, 2010 and 2009








Note G - Income Taxes - Continued





The Company's income tax expense (benefit) for each of the six months ended March 31, 2010 and 2009 and for the period from July 5, 1989 (date of inception) through March 31, 2010, respectively, differed from the statutory federal rate of 34 percent as follows:





Period fromJuly 5, 1989Six months


Six months


(date of inception)ended


ended


throughMarch 31,


March 31,


March 31,2010


2009


2010Statutory rate applied to income before income taxes

$
(2,700
)

$
(3,000
)

$
(16,400,000
)Increase (decrease) in income taxes resulting from:State income taxes


—



—



—Other, including reserve for deferred tax assetand application of net operating loss carryforward


2,700



3,000



16,400,000Income tax expense

$
—


$
—


$
—





Temporary differences, consisting primarily of statutory deferrals of expenses for organizational costs, statutory differences in the depreciable/amortizable lives for property and equipment and patents and the recognition of expense charges related to the issuance of warrants, between the financial statement carrying amounts and tax bases of assets and liabilities give rise to deferred tax assets and/or liabilities.  As of March 31, 2010 and September 30, 2009, respectively, after taking the September 2006 change in control into consideration:





December 31,


September 30,2009


2009Deferred tax assetsNet operating loss carryforwards

$
22,700


$
20,000Less valuation allowance


(22,700
)


(20,000
)Net Deferred Tax Asset

$
—


$
—





During the six month period ended March 31, 2010 and the year ended December 31, 2009, respectively, the valuation allowance for the deferred tax asset increased by approximately $700 and $5,100, respectively.








Note H - Common Stock Transactions





On September 18, 2006, the Company entered into a unit purchase agreement (Unit Purchase Agreement) to sell 1,000 Units to Glenn A. Little (Little) for $125,000 cash.  Each Unit consisted of 11,100 shares of common stock and 500 common stock purchase warrants or an aggregate of 11,100,000 shares of common stock and 500,000 common stock purchase warrants.  There were no commissions or underwriting discounts paid in conjunction with this transaction and the Company believes that the shares and warrants were exempt from registration under Section 4(2) of the Securities Act of 1933 as amended.





The common stock purchase warrants can be exercised at any time from their issuance on September 18, 2006 through September 18, 2011 at an exercise price of $0.10 per share.  The Company assigned a value of $5,000 to these warrants.





On September 18, 2006, connected with yet separate from the aforementioned Unit Purchase Agreement, the Company entered into a Share Purchase Agreement with Dominion, the Company’s then-majority shareholder, whereby the Company purchased from Dominion 11,975,000 shares of common stock of the Company for a purchase price of $1.00.  The shares were cancelled upon receipt by the Company and returned to unissued status.


12


Truewest Corporation


(a development stage company)


Notes to Financial Statements - Continued


March 31, 2010 and 2009








Note H - Common Stock Transactions - Continued





On November 14, 2006, the Company filed a Definitive Schedule 14C - Information Statement Pursuant to Section 14C of the Securities Exchange Act of 1934 noting actions to be taken without a meeting upon the written consent of the holders of a majority of the outstanding shares of the voting capital stock of the Company.  The actions at this meeting included 1) to reverse split the currently issued and outstanding common stock (Reverse Split) of the Company on a 100,000 shares for one (1) share basis, with no stockholder being reversed to less than a round lot of 100 shares; and 2) to change the Company’s state of incorporation from Pennsylvania to Nevada.  On January 19, 2006, shareholders holding a majority of the Company’s common stock voted to rescind the reverse stock portion of the previous approval.





On June 20, 2007, the Company filed another Preliminary Schedule 14C - Information Statement Pursuant to Section 14C of the Securities Exchange Act of 1934 noting the following actions to be taken by the Company’s Board of Directors pursuant to actions taken by a written consent of a majority of stockholders without meeting “1. To reverse split the currently issued and outstanding common stock (the "Common Stock") of the Company on a 12,500 shares for 1 share basis, with fractional shares paid in cash at the rate of ($.05) cents for each fractional share and 2. To increase the number of shares the Company is authorized to issue to 100,000,000 shares of common stock par value $.001 and 50,000,000 shares of preferred stock par value $.001 to be issued in such services and designations as determined from time to time by the Board of Directors.”





The Company's Board of Directors initially approved Item No. 1 above on February 28, 2007 and recommended that the Company effect the reverse split of its currently issued and outstanding Common Stock.  The Board of Directors approved Item No. 2 above on December 1, 2006 in connection with the Company's change of domicile from Pennsylvania to Nevada at which time the Company's authorized capital stock was increased from 40,000,000 shares of common stock par value $0.01 to 100,000,000 shares of Common Stock par value $0.001 and 50,000,000 shares of Preferred Stock par value $0.001 to be issued in such series and designations as may be determined by the Board of Directors.  That approval was adopted at the same time as a proposed 100,000 to 1 reverse split with fractional shares rounded up to the nearest whole share and no shareholder rounded to less than a round lot of 100 shares.  The Company’s Board of Directors decided not to proceed with that reverse split as announced in its Form 8−K filed on January 19, 2007.  The change in domicile, however, from Pennsylvania to Nevada was completed and as a result the Company's authorized capital was increased as stated above.





On or about December 2, 2008, the Company completed the aforementioned reverse stock split on the basis of one (1) share for each 12,500 shares issued and outstanding, with fractional shares paid in cash at the rate of five ($.05) cents for each fractional share.  This action reduced the number of issued and outstanding shares from 22,105,051 to 1,596.  The effect of this action is presented in the accompanying financial statements as of the first day of the first period presented.





On March 17, 2008, the Company filed a Definitive Schedule 14C - Information Statement Pursuant to Section 14C of the Securities Exchange Act of 1934 with respect to the above mentioned 1 for 5 reverse stock split with stockholder’s positions rounded to the nearest whole share with a contemporaneous 100 for 1 forward split of the Company’s common stock.  This action became effective immediately and the effects are reflected in the accompanying financial statements as of the first day of the first period presented.





As a result of the aforementioned reverse and forward splits, the Company’s issued and outstanding shares of common stock went from 22,105,151 to 52,000.





On May 1, 2008, a total of 398,800 warrants, including 367,075 warrants held by Glenn A. Little, were exercised at a price of $0.10 per share which resulted in the issuance of 398,800 shares of restricted, unregistered common stock for a gross proceeds of $39,880.  There were no commissions or underwriting discounts paid in conjunction with this transaction and the Company believes that the shares issued upon the exercise of the corresponding warrants were exempt from registration under Section 4(2) of the Securities Act of 1933, as amended.


13


Truewest Corporation


(a development stage company)


Notes to Financial Statements - Continued


March 31, 2010 and 2009








Note I - Stock Warrants





During August 2006, the Company reached termination agreements with all holders of the Company’s Common Stock Warrants and terminated all issued and outstanding warrants.  As of December 31, 2009 and September 30, 2009, respectively, the only outstanding warrants relate to the aforementioned September 18, 2006 transaction with Glenn A. Little.





On May 1, 2008, 398,800 warrants were exercised to acquire an equivalent number of restricted, unregistered shares of common stock for gross proceeds of $39,880.





Number of


WeightedWarrant shares


Average PriceBalance at October 1, 2007


500,000


$
0.10Issued


—



—Exercised


(398,800
)


(0.10
)Expired


—



—Balance at September 30, 2008


101,200


$
0.10Issued


—



—Exercised


—



—Expired


—



—Balance at September 30, 2009


101,200


$
0.10Issued


—



—Exercised


—



—Expired


—



—Balance at March 31, 2010


101,200


$
0.10








Note I - Subsequent Events





Management has evaluated all activity of the Company through April 23, 2010 (the issue date of the financial statements) and concluded that no subsequent events have occurred that would require recognition in the financial statements or disclosure in the notes to financial statements.














(Remainder of this page left blank intentionally)


14


Part I - Item 2





Management’s Discussion and Analysis of Financial Condition and Results of Operations





(1)
Caution Regarding Forward-Looking Information




Certain statements contained in this quarterly filing, including, without limitation, statements containing the words "believes", "anticipates", "expects" and words of similar import, constitute forward-looking statements. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of the Company, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements.





Such factors include, among others, the following: international, national and local general economic and market conditions: demographic changes; the ability of the Company to sustain, manage or forecast its growth; the ability of the Company to successfully make and integrate acquisitions; raw material costs and availability; new product development and introduction; existing government regulations and changes in, or the failure to comply with, government regulations; adverse publicity; competition; the loss of significant customers or suppliers; fluctuations and difficulty in forecasting operating results; changes in business strategy or development plans; business  disruptions; the ability to attract and retain qualified personnel; the ability to protect technology; and other factors referenced in this and previous filings.





Given these uncertainties, readers of this Form 10-Q and investors are cautioned not to place undue reliance on such forward-looking statements. The Company disclaims any obligation to update any such factors or to publicly announce the result of any revisions to any of the forward-looking statements contained herein to reflect future events or developments.





(2)
Plan of Operations





The Company had no revenue for either of the six or three month periods ended March 31, 2010 and 2009, respectively.





General and administrative expenses of approximately $5,900 and $6,900, respectively, for the six month periods ended March 31, 2010 and 2009, respectively, have been directly related maintaining the corporate entity and maintaining compliance with the Securities Exchange Act of 1934, as amended.





It is anticipated that future expenditure levels may increase as the Company intends to fully comply with it’s periodic reporting requirements.





Earnings per share for the respective three month periods ended March 31, 2010 and 2009 were $(0.02) and $(0.02) based on the weighted-average shares issued and outstanding at the end of each respective period.





The Company does not expect to generate any meaningful revenue or incur operating expenses for purposes other than fulfilling the obligations of a reporting company under the Securities Exchange Act of 1934 unless and until such time that the Company’s operating subsidiary begins meaningful operations.





At March 31, 2010 and September 30, 2009, the Company had working capital of approximately $(62,000) and $(55,000), respectively.





It is the belief of management and significant stockholders that they will provide sufficient working capital necessary to support and preserve the integrity of the corporate entity.   However, there is no legal obligation for either management or significant stockholders to provide additional future funding.  Further, the Company is at the mercy of future economic trends and business operations for the Company’s majority stockholder to have the resources available to support the Company.  Should this pledge fail to provide financing, the Company has not identified any alternative sources.  Consequently, there is substantial doubt about the Company's ability to continue as a going concern.





The Company's need for working capital may change dramatically as a result of any business acquisition or combination transaction.  There can be no assurance that the Company will identify any such business, product, technology or company suitable for acquisition in the future.  Further, there can be no assurance that the Company would be successful in consummating any acquisition on favorable terms or that it will be able to profitably manage the business, product, technology or company it acquires.


15


Plan of Business





General





The Company intends to locate and combine with an existing, privately-held company which is profitable or, in management's view, has growth potential, irrespective of the industry in which it is engaged.  However, the Company does not intend to combine with a private company which may be deemed to be an investment company subject to the Investment Company Act of 1940.  A combination may be structured as a merger, consolidation, exchange of the Company's common stock for stock or assets or any other form which will result in the combined enterprise's becoming a publicly-held corporation.





Pending negotiation and consummation of a combination, the Company anticipates that it will have, aside from carrying on its search for a combination partner, no business activities, and, thus, will have no source of revenue.  Should the Company incur any significant liabilities prior to a combination with a private company, it may not be able to satisfy such liabilities as are incurred.





If the Company's management pursues one or more combination opportunities beyond the preliminary negotiations stage and those negotiations are subsequently terminated, it is foreseeable that such efforts will exhaust the Company's ability to continue to seek such combination opportunities before any successful combination can be consummated.  In that event, the Company's common stock will become worthless and holders of the Company's common stock will receive a nominal distribution, if any, upon the Company's liquidation and dissolution.





Combination Suitability Standards





In its pursuit for a combination partner, the Company's management intends to consider only combination candidates which are profitable or, in management's view, have growth potential.  The Company's management does not intend to pursue any combination proposal beyond the preliminary negotiation stage with any combination candidate which does not furnish the Company with audited financial statements for at least its most recent fiscal year and unaudited financial statements for interim periods subsequent to the date of such audited financial statements, or is in a position to provide such financial statements in a timely manner.  The Company will, if necessary funds are available, engage attorneys and/or accountants in its efforts to investigate a combination candidate and to consummate a business combination.  The Company may require payment of fees by such combination candidate to fund the investigation of such candidate.  In the event such a combination candidate is engaged in a high technology business, the Company may also obtain reports from independent organizations of recognized standing covering the technology being developed and/or used by the candidate.  The Company's limited financial resources may make the acquisition of such reports difficult or even impossible to obtain and, thus, there can be no assurance that the Company will have sufficient funds to obtain such reports when considering combination proposals or candidates.  To the extent the Company is unable to obtain the advice or reports from experts, the risks of any combined enterprise's being unsuccessful will be enhanced.  Furthermore, to the knowledge of the Company's officers and directors, neither the candidate nor any of its directors, executive officers, principal stockholders or general partners:




(1)
will have been convicted of securities fraud, mail fraud, tax fraud, embezzlement, bribery, or a similar criminal offense involving misappropriation or theft of funds, or be the subject of a pending investigation or indictment involving any of those offenses;





(2)
will have been subject to a temporary or permanent injunction or restraining order arising from unlawful transactions in securities, whether as issuer, underwriter, broker, dealer, or investment  advisor,  may be the  subject of any  pending investigation or a defendant in a pending lawsuit arising from or based upon allegations of unlawful transactions in securities; or





(3)
will have been a defendant in a civil action which resulted in a final judgement against it or him awarding damages or rescission based upon unlawful practices or sales of securities.





The Company's officers and directors will make these determinations by asking pertinent questions of the management of prospective combination candidates.  Such persons will also ask pertinent questions of others who may be involved in the combination proceedings.  However, the officers and directors of the Company will not generally take other steps to verify independently information obtained in this manner which is favorable.  Unless something comes to their attention which puts them on notice of a possible disqualification which is being concealed from them, such persons will rely on information received from the management of the prospective combination candidate and from others who may be involved in the combination proceedings.


16


(3)
Liquidity and Capital Resources





It is the belief of management and significant stockholders that they will provide sufficient working capital necessary to support and preserve the integrity of the corporate entity.   However, there is no legal obligation for either management or significant stockholders to provide additional future funding.  Further, the Company is at the mercy of future economic trends and business operations for the Company’s majority stockholder to have the resources available to support the Company.  Should this pledge fail to provide financing, the Company has not identified any alternative sources.  Consequently, there is substantial doubt about the Company's ability to continue as a going concern.





The Company has no current plans, proposals, arrangements or understandings with respect to the sale or issuance of additional securities prior to the location of a merger or acquisition candidate.  Accordingly, there can be no assurance that sufficient funds will be available to the Company to allow it to cover the expenses related to such activities.





Regardless of whether the Company’s cash assets prove to be inadequate to meet the Company’s operational needs, the Company might seek to compensate providers of services by issuances of stock in lieu of cash.





(4)
Critical Accounting Policies





Our financial statements and related public financial information are based on the application of accounting principles generally accepted in the United States (“GAAP”).  GAAP requires the use of estimates; assumptions, judgments and subjective interpretations of accounting principles that have an impact on the assets, liabilities, revenue and expense amounts reported.  These estimates can also affect supplemental information contained in our external disclosures including information regarding contingencies, risk and financial condition.  We believe our use of estimates and underlying accounting assumptions adhere to GAAP and are consistently and conservatively applied.  We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances.  Actual results may differ materially from these estimates under different assumptions or conditions. We continue to monitor significant estimates made during the preparation of our financial statements.





Our significant accounting policies are summarized in Note D of our financial statements.  While all these significant accounting policies impact our financial condition and results of operations, we view certain of these policies as critical. Policies determined to be critical are those policies that have the most significant impact on our financial statements and require management to use a greater degree of judgment and estimates.  Actual results may differ from those estimates. Our management believes that given current facts and circumstances, it is unlikely that applying any other reasonable judgments or estimate methodologies would cause effect on our consolidated results of operations, financial position or liquidity for the periods presented in this report.





(5)
Effect of Climate Change Legislation





The Company currently has no known or identified exposure to any current or proposed climate change legislation which could negatively impact the Company’s operations or require capital expenditures to become compliant.  Additionally, any currently proposed or to-be-proposed-in-the-future legislation concerning climate change activities, business operations related thereto or a publicly perceived risk associated with climate change could, potentially, negatively impact the Company’s efforts to identify an appropriate target company which may wish to enter into a business combination transaction with the Company.








Item 3 - Quantitative and Qualitative Disclosures About Market Risk





In future periods, the Company may become subject to certain market risks, including changes in interest rates and currency exchange rates.  At the present time, the Company has no identified exposure and does not undertake any specific actions to limit exposures, if any.








Item 4 - Controls and Procedures





(a)
Disclosure Controls and Procedures





Disclosure controls and procedures are controls and procedures designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Commission’s rules and forms and include controls and procedures designed to ensure that information we are required to disclose in such reports is accumulated and communicated to management, including our Chief Executive Officer (CEO) and Chief Financial Officer (CFO), as appropriate, to allow timely decisions regarding required disclosure.


17


Our management, under the supervision and with the participation of our CEO and CFO, have evaluated the effectiveness of our disclosure controls and procedures as defined in Rules 13a-15 promulgated under the Exchange Act as of the end of the period covered by this Quarterly Report.  Based on such evaluation, our CEO and CFO have concluded that, as of the end of the period covered by this Quarterly Report, our disclosure controls and procedures are effective.





(b)
Changes in Internal Control over Financial Reporting





There was no change in our internal control over financial reporting that occurred during the quarter ended March 31, 2010 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting which internal controls will remain deficient until such time as the Company completes a merger transaction or acquisition of an operating business at which time management will be able to implement effective controls and procedures.








Part II - Other Information








Item 1 - Legal Proceedings





None








Item2 - Unregistered Sales of Equity Securities and Use of Proceeds





None








Item3 - Defaults upon Senior Securities





None








Item 4 - Submission of Matters to a Vote of Security Holders





The Company has held no regularly scheduled, called or special meetings of stockholders during the reporting period.








Item 5 - Other Information





None








Item6 - Exhibits




31.1 Certification pursuant to Section 302 of Sarbanes-Oxley Act of 2002




32.1 Certification pursuant to Section 906 of Sarbanes-Oxley Act of 2002





SIGNATURES





In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.




Truewest CorporationDated: April 23, 2010

/s/ Glenn A. LittleGlenn A. LittlePresident, Chief Executive Officer,Chief Financial Officer and Sole Director


18