United States
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-QSB

             QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

                 For the Quarterly Period Ended: March 31, 2006

                         Commission File Number: 0-16397

                       APPLIED SPECTRUM TECHNOLOGIES, INC.
               (Exact name of registrant as specified in charter)

           Delaware                                       41-2185030
(State or other jurisdiction of                (IRS Employer Identification No.)
incorporation or organization)

            936A Beachland Boulevard, Suite 13, Vero Beach, FL 32963
              (Address of principal executive offices and zip code)

                                 (772) 231-7544
              (Registrant's telephone number, including area code)

                                       N/A
          (Former Name or Former Address, if Changed Since Last Report)

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 |_|.

Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act). Yes |X| No |_|.

As of May 12, 2006, there were 5,353,941 shares of common stock, par value
$0.001 per share, outstanding.

Transitional Small Business Disclosure Format (check one): Yes |_| No |X|.

<PAGE>

TABLE OF CONTENTS

PART I. FINANCIAL INFORMATION

  Item 1.  Financial Statements

      Condensed Balance Sheets as of March 31, 2006 (unaudited)
      and September 30, 2005                                                   1

      Condensed Statements of Operations for the three and six
      month periods ended March 31, 2006 and 2005 (unaudited)                  2

      Condensed Statements of Cash Flows for the six month
      periods ended March 31, 2006 and 2005 (unaudited)                        3

      Notes to Financial Statements (unaudited)                              4-7

  Item 2.  Management's Discussion and Analysis of
           Financial Condition and Results of Operations                    8-22

  Item 3.  Controls and Procedures                                            23

   PART II.OTHER INFORMATION
  Item 1.  Legal Proceedings                                                  24
  Item 2.  Changes in Securities and Use of Proceeds                          24
  Item 3.  Defaults upon Senior Securities                                    24
  Item 4.  Submission of Matters to a Vote of Security Holders                24
  Item 5.  Other information                                                  24
  Item 6.  Exhibits and Reports on Form 8-K                                   25

      Signatures                                                              26

      Certifications
           Exhibit 31                                                      27-28
           Exhibit 32                                                         29

<PAGE>

PART I - FINANCIAL INFORMATION

<PAGE>

ITEM 1.  FINANCIAL STATEMENTS

                       APPLIED SPECTRUM TECHNOLOGIES, INC.
                                 BALANCE SHEETS

                                                     March 31,     September 30,
                                                       2006            2005
                                                   ------------    ------------
                                                   (Unaudited)
ASSETS

CURRENT ASSET
  Cash                                             $     92,096    $         --
  Other assets                                               --          18,936
                                                   ------------    ------------

TOTAL ASSETS                                       $     92,096    $     18,936
                                                   ============    ============

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
  Accounts payable and accrued expenses            $         --    $      1,568
  Deposit liability                                      50,000              --
                                                   ------------    ------------

  Total Current Liabilities                              50,000           1,568

STOCKHOLDERS' EQUITY
  Preferred stock, $0.001 par value, 5,000,000
    shares authorized, none issued and
    outstanding                                              --              --
  Common stock, $0.001 par value, 150,000,000
    shares authorized, 5,353,941 and 2,953,941
    shares issued and outstanding                         5,354           2,954
  Additional paid-in capital                         16,210,416      16,090,798
  Accumulated deficit                               (16,173,674)    (16,076,384)
                                                   ------------    ------------

  Total Stockholders' Equity                             42,096          17,368
                                                   ------------    ------------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY         $     92,096    $     18,936
                                                   ============    ============

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

                                       1
<PAGE>

                       APPLIED SPECTRUM TECHNOLOGIES, INC.
                            STATEMENTS OF OPERATIONS
                                   (Unaudited)

<TABLE>
<CAPTION>
                                    Three Months Ended            Six  Months  Ended
                                        March 31,                     March 31,
                               --------------------------    --------------------------
                                   2006           2005           2006           2005
                               -----------    -----------    -----------    -----------
<S>                            <C>            <C>            <C>            <C>
Revenue                        $        --    $        --    $        --    $        --

Operating expenses:
  General and administrative
    expenses                        30,247            450         97,414            900
                               -----------    -----------    -----------    -----------

Loss from operations               (30,247)          (450)       (97,414)          (900)

Other income (expense):
  Interest expense                      --             --             --             --
  Interest income                       --            101            124            191
                               -----------    -----------    -----------    -----------

Net loss                       $   (30,247)   $      (349)   $   (97,290)   $      (709)
                               ===========    ===========    ===========    ===========

Net loss per share
  (basic and diluted)          $     (0.01)   $     (0.00)   $     (0.03)   $     (0.00)
                               ===========    ===========    ===========    ===========

Weighted average shares of
  common stock outstanding       4,741,719      2,953,941      3,838,007      2,953,941
                               ===========    ===========    ===========    ===========
</TABLE>

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

                                       2
<PAGE>

                       APPLIED SPECTRUM TECHNOLOGIES, INC.
                            STATEMENTS OF CASH FLOWS
                                   (Unaudited)

                                                            Six Months
                                                          Ended March 31,
                                                   ----------------------------
                                                       2006            2005
                                                   ------------    ------------
CASH FLOWS FROM OPERATIONS
Net income (loss)                                  $    (97,290)   $       (709)
Adjustments to reconcile net income (loss)
  to net cash used in operating activities:
    Rent expense contributed                                450             900
    Stocks issued for services                           10,000              --
    Changes in:
      Accounts payable and accrued expenses              (1,568)         (9,611)
      Deposit liability                                  50,000              --
      Other assets                                       18,936           9,420
                                                   ------------    ------------

Net cash provided by (used in) operating
  activities                                            (19,922)             --
                                                   ------------    ------------

CASH FLOWS FROM FINANCING ACTIVITIES
  Proceeds from issuance of common stock                110,000              --
  Accrued expenses paid by former shareholder             1,568              --
                                                   ------------    ------------

Net cash flows from financing activities                111,568              --
                                                   ------------    ------------

Net increase (decrease) in cash                          92,096              --

Cash, beginning of period                                    --              --
                                                   ------------    ------------

Cash, end of period                                $     92,096    $         --
                                                   ============    ============

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

                                       3
<PAGE>

                       APPLIED SPECTRUM TECHNOLOGIES, INC.
                          NOTES TO FINANCIAL STATEMENTS
                                 March 31, 2006
                                   (Unaudited)

NOTE 1 - BASIS OF PRESENTATION

The accompanying unaudited financial statements of Applied Spectrum
Technologies, Inc. ("the Company") are presented in accordance with the
requirements for Form 10-Q and Article 10 of Regulation S-X and Regulation S-B.
Accordingly, they do not include all of the disclosures required by generally
accepted accounting principles. In the opinion of management, all adjustments
(all of which were of a normal recurring nature) considered necessary to fairly
present the financial position, results of operations, and cash flows of the
Company on a consistent basis, have been made.

These results have been determined on the basis of generally accepted accounting
principles and practices applied consistently with those used in the preparation
of the Company's Annual Financial Statements for the years ending September 30,
2005 and 2004. Operating results for the three months ending March 31, 2006 are
not necessarily indicative of the results that may be expected for the year
ended September 30, 2006.

The Company recommends that the accompanying condensed financial statements for
the interim period be read in conjunction with Form 10-KSB for the year ending
September 30, 2005.

Use of Estimates

The financial statements have been prepared in conformity with accounting
principles generally accepted in the United States of America. In preparing the
financial statements, management is required to make estimates and assumptions
that affect the reported amounts of assets and liabilities as of the date of the
statements of financial condition and revenues and expenses for the year then
ended. Actual results may differ significantly from those estimates.

Net Loss Per Share

Basic loss per weighted average common share is computed by dividing the net
loss by the weighted average number of common shares outstanding during the
period. Common stock equivalents are excluded from the computation for the three
months ended March 31, 2006 and 2005, as their effect is anti-dilutive.

                                       4
<PAGE>

                       APPLIED SPECTRUM TECHNOLOGIES, INC.
                          NOTES TO FINANCIAL STATEMENTS
                                 March 31, 2006
                                   (Unaudited)

NOTE 1 - BASIS OF PRESENTATION (continued)

Stock Based Compensation

Effective January 1, 2006, the Company adopted Statement of Financial Accounting
Standards ("SFAS") No. 123(R), "Share-Based Payment, using the modified
prospective application transition method. Under this transition approach, the
fair value method is used to recognize compensation cost for the unvested
portion of awards granted, modified, or settled in fiscal years beginning the
effective date, which remain unvested, as well as for new awards. The Company in
the past accounted for stock-based employee compensation arrangements in
accordance with provisions of Accounting Principles Board ("APB") Opinion No.
25, "Accounting for Stock Issued to Employees." Because there were no unvested
awards outstanding as of January 1, 2006, the adoption of SFAS 123(R) did not
have a significant impact on the Company's financial position or results of
operations. There were no options issued during the three months ended March 31,
2006 and 2005, respectively.

NOTE 2 - STOCKHOLDERS' EQUITY

On October 7, 2005, the Company and Applied Spectrum Technologies, Inc., a
Minnesota corporation entered into a certain Agreement and Plan of Merger. The
Merger was completed on November 17, 2005, and the Articles of Merger were filed
with the States of Minnesota and Delaware on November 17, 2005. As a result of
the Merger, the Company's Certificate of Incorporation now provides for
authorized capital consisting of 150,000,000 shares of common stock, par value
of $0.001 per share and 5,000,000 shares of preferred stock, par value $0.001
per share. These financial statements have been presented to give effect to the
Merger and the change in the Company's authorized capital stock and par value.

On January 4, 2006, the Company issued 1,500,000 shares of its common stock to
KI Equity Partners III, LLC, a Delaware limited liability company ("KI Equity")
for a purchase price of $75,000, or $0.05 per share. The proceeds from the
purchase price were intended as working capital to pay expenses to maintain the
reporting status of the Company. Concurrently, the Company issued 100,000 shares
of its common stock to Kevin R. Keating, the sole officer and director of the
Company, for services rendered to the Company valued at $5,000, or $0.05 per
share. The Company also issued 100,000 shares of its common stock to a
consulting firm for financial consulting services rendered to the Company valued
at $5,000, or $0.05 per share.

                                       5
<PAGE>

                       APPLIED SPECTRUM TECHNOLOGIES, INC.
                          NOTES TO FINANCIAL STATEMENTS
                                 March 31, 2006
                                   (Unaudited)

NOTE 2 - STOCKHOLDERS' EQUITY (continued)

On March 10, 2006, the Company issued additional 700,000 shares of its common
stock to KI Equity for a purchase price of $35,000, or $0.05 per share. KI
Equity owns a total of 4,481,302 shares of the Company's Common Stock
immediately after the above stock issuances.

As of March 31, 2006, there were 5,353,941 shares of common stock outstanding
and no shares of preferred stock outstanding.

There were no outstanding options or warrants at March 31, 2006.

During the period ended March 31, 2006, the former shareholder paid an accrued
legal expense on behalf of the Company and was recorded as additional paid-in
capital in the amount of $1,568.

NOTE 3 - INCOME TAXES

At March 31, 2006, the Company had accumulated net operating loss carryforwards
for federal tax purposes of approximately $1,918,000 that are available to
offset future taxable income, if any, through 2025. Realization of the net
operating loss carryforwards is dependent upon future profitable operations. In
addition, the carryforwards may be limited upon a change of control as described
in Internal Revenue Code Section 382. Accordingly, management has recorded a
valuation allowance to reduce deferred tax assets associated with net operating
loss carryforwards to zero at March 31, 2006.

NOTE 4 - OTHER ASSETS AND DUE TO FORMER SHAREHOLDER

Other assets consist of three bank accounts held in the name of Norwood Venture
Corp., a former shareholder of the Company. These funds are segregated and are
for the benefit of and the specific use by the Company. In connection with the
change of control described in Note 5, below, the balance of these accounts was
transferred to Norwood Venture Corp. following the change in control as payment
for consulting services rendered by it to the Company. The Company has recorded
a liability for payment due to former shareholder as of December 31, 2005.
Subsequent to December 31, 2005, this liability was paid in full from the
segregated funds.

                                       6
<PAGE>

                       APPLIED SPECTRUM TECHNOLOGIES, INC.
                          NOTES TO FINANCIAL STATEMENTS
                                 March 31, 2006
                                   (Unaudited)

NOTE 5 - CHANGE OF CONTROL

On December 14, 2005, Norwood Venture Corp. entered into a Securities Purchase
Agreement with KI Equity, as amended (the "Purchase Agreement") under which KI
Equity agreed to purchase and Norwood agreed to sell an aggregate of 2,281,302
shares of common stock of the Company, representing approximately 77.2% of the
Company's outstanding shares of common stock, to KI Equity at a price of
$175,000. The closing of the transactions under the Purchase Agreement occurred
on December 29, 2005.

NOTE 6 - RELATED PARTY TRANSACTION

The sole director of the Company, Kevin R. Keating, is the father of the
managing member of Keating Investments, LLC. Keating Investments, LLC is the
managing member of KI Equity Partners III, LLC, which is the majority
shareholder of the Company.

Effective January 1, 2006, the Company entered into a contract with Vero
Management, L.L.C. ("Vero") for managerial and administrative services. Vero has
not been engaged to provide, and Vero does not render, legal, accounting,
auditing, investment banking or capital formation services. Kevin R. Keating,
the sole director of the Company, is the manager of Vero. The term of the
contract is for one year, but the contract may be terminated at any time. In
consideration of the services provided, Vero is paid $2,500 for each month in
which services are rendered. A total of $7,500 is included in general and
administrative expenses for the three month period ended March 31, 2006.

                                       7
<PAGE>

                       APPLIED SPECTRUM TECHNOLOGIES, INC.
                          NOTES TO FINANCIAL STATEMENTS
                                 March 31, 2006
                                   (Unaudited)

NOTE 7 - LETTER OF INTENT

On March 27, 2006, the Company entered into a Letter of Intent to acquire
Pro-Stars, Inc., a Nevada corporation ("Pro-Stars"). Pro-Stars is a retailer of
sports and celebrity endorsed products and memorabilia, focusing on live
signings by celebrities from the sports and entertainment world.

Under the transactions contemplated under the Letter of Intent, the Company
would issue: (i) restricted shares of its convertible preferred stock, the
designations, rights and preferences of which will be established by the
Company's board of directors prior to Closing, to the holders of Pro-Stars'
outstanding equity securities; and (ii) additional equity securities in
connection with a private placement offering (the "Offering") to certain
to-be-identified investors under terms and conditions which will be negotiated
by Pro-Stars and the Investors. The convertible securities that would be issued
to the Pro-Stars' Stockholders, the equity securities that would be issued to
investors, and the options, warrants and other convertible securities of
Pro-Stars assumed by the Company in connection with the acquisition of Pro-Stars
would, in the aggregate, represent approximately 97% of the issued and
outstanding shares of common stock of the Company on a fully diluted and
as-converted basis following the acquisition of Pro-Stars and completion of the
Offering.

The closing of the proposed acquisition would be subject to Pro-Stars' ability
to raise not less than $10 million in the Offering. In addition, the closing of
the acquisition of Pro-Stars would also be a condition to the closing of the
Offering. Pursuant to the Letter of Intent, the Company received a good faith
deposit of $50,000. In the event the Letter of Intent is terminated under
certain specified circumstances, all or a portion of the deposit may be retained
by the Company. The deposit has been recorded as a liability on the Company's
balance sheet.

                                       8
<PAGE>

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
        CONDITION AND RESULTS OF OPERATIONS

Forward-Looking Statements

The following discussion may contain certain forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934. Such statements are intended to be covered by
the safe harbors created by such provisions. These statements include the plans
and objectives of management for future growth of the Company, including plans
and objectives related to the consummation of acquisitions and future private
and public issuances of the Company's equity and debt securities. The
forward-looking statements included herein are based on current expectations
that involve numerous risks and uncertainties. Assumptions relating to the
foregoing involve judgments with respect to, among other things, future
economic, competitive and market conditions and future business decisions, all
of which are difficult or impossible to predict accurately and many of which are
beyond the control of the Company. Although the Company believes that the
assumptions underlying the forward-looking statements are reasonable, any of the
assumptions could be inaccurate and, therefore, there can be no assurance that
the forward-looking statements included in this Form 10-QSB will prove to be
accurate. In light of the significant uncertainties inherent in the
forward-looking statements included herein, the inclusion of such information
should not be regarded as a representation by the Company or any other person
that the objectives and plans of the Company will be achieved.

The words "we," "us" and "our" refer to the Company. The words or phrases "would
be," "will allow," "intends to," "will likely result," "are expected to," "will
continue," "is anticipated," "estimate," "project," or similar expressions are
intended to identify "forward-looking statements." Actual results could differ
materially from those projected in the forward looking statements as a result of
a number of risks and uncertainties, including but not limited to: (a) limited
amount of resources devoted to achieving our business plan; (b) our failure to
implement our business plan within the time period we originally planned to
accomplish; (c) because we are seeking to merge with an operating business which
has not yet been identified, you will be unable to determine whether we will
ever become profitable; and (d) other risks that are discussed in this Form
10-QSB or included in our previous filings with the Securities and Exchange
Commission.

                                       9
<PAGE>

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
        CONDITION AND RESULTS OF OPERATIONS (continued)

Company Background

On October 7, 2005, the Company and Applied Spectrum Technologies, Inc., a
Minnesota corporation ("Applied - Minnesota") entered into a certain Agreement
and Plan of Merger ("Plan of Merger"). Pursuant to the Plan of Merger, subject
to stockholder approval, Applied - Minnesota was to merge with and into the
Company for the purposes of the redomestication of the Company from the State of
Minnesota to the State of Delaware (the "Merger"). On November 14, 2005, the
holders of a majority of Applied - Minnesota's outstanding shares of common
stock approved the Merger. The Merger was completed on November 17, 2005, and
the Articles of Merger were filed with the States of Minnesota and Delaware on
November 17, 2005. As a result of the Merger, the Company's Certificate of
Incorporation now provides for authorized capital consisting of 150,000,000
shares of common stock, par value of $0.001 per share and 5,000,000 shares of
preferred stock, par value $0.001 per share. These financial statements have
been presented to give effect to the Merger and the change in the Company's
authorized capital stock and par value.

The Company's predecessor, Applied - Minnesota, was organized as a Minnesota
corporation on February 17, 1982. The technology on which Applied - Minnesota's
original products were based, including Spread Spectrum Technology, permit data
and telemetry to be transmitted simultaneously over telephone wire without
interfering with normal voice service. These products were known as data/voice
multiplexing ("DVM") equipment and were aimed at operating telephone companies
(Telco market). Applied - Minnesota's lack of financial resources caused it to
pursue a plan of dissolution as approved by the Board of Directors and approved
by the shareholders on November 30, 1993. Applied - Minnesota had been inactive
since 1994. Prior to implementation of the Plan of Dissolution, Applied -
Minnesota was engaged in the development, manufacture, marketing and sale of
digital business communication systems.

The Company plans to pursue and negotiate a business combination or other
strategic transaction. Ultimately, the continuation of the Company is dependent
upon the establishment of profitable operations. Because the achievement of
these plans in dependent on future events, there can be no assurance that future
profitable operations will occur as planned.

                                       10
<PAGE>

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
        CONDITION AND RESULTS OF OPERATIONS (continued)

Entry into Letter of Intent

On March 27, 2006, the Company entered into a Letter of Intent to acquire
Pro-Stars, Inc., a Nevada corporation ("Pro-Stars"). Pro-Stars is a retailer of
sports and celebrity endorsed products and memorabilia, focusing on live
signings by celebrities from the sports and entertainment world.

Under the transactions contemplated under the Letter of Intent, the Company
would issue: (i) restricted shares of its convertible preferred stock, the
designations, rights and preferences of which will be established by the
Company's board of directors prior to Closing, to the holders of Pro-Stars'
outstanding equity securities; and (ii) additional equity securities in
connection with a private placement offering (the "Offering") to certain
to-be-identified investors under terms and conditions which will be negotiated
by Pro-Stars and the Investors. The convertible securities that would be issued
to the Pro-Stars' Stockholders, the equity securities that would be issued to
investors, and the options, warrants and other convertible securities of
Pro-Stars assumed by the Company in connection with the acquisition of Pro-Stars
would, in the aggregate, represent approximately 97% of the issued and
outstanding shares of common stock of the Company on a fully diluted and
as-converted basis following the acquisition of Pro-Stars and completion of the
Offering.

The closing of the proposed acquisition would be subject to Pro-Stars' ability
to raise not less than $10 million in the Offering. In addition, the closing of
the acquisition of Pro-Stars would also be a condition to the closing of the
Offering. Pursuant to the Letter of Intent, the Company received a good faith
deposit of $50,000. In the event the Letter of Intent is terminated under
certain specified circumstances, all or a portion of the deposit may be retained
by the Company. The deposit has been recorded as a liability on the Company's
balance sheet.

Results of Operations

During the three months ended March 31, 2006, the Company had net loss of
$30,247, consisting primarily of general and administrative expenses. The
Company's net loss for the first six months of fiscal year 2006 was $97,290.
These general and administrative expenses included primarily legal, accounting
and other consulting fees.

Liquidity and Capital Resources

On January 4, 2006, the Company issued 1,500,000 shares of its common stock to
KI Equity for a purchase price of $75,000, or $0.05 per share. The proceeds from
the purchase price were intended as working capital to pay expenses to maintain
the reporting status of the Company.

                                       11
<PAGE>

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
        CONDITION AND RESULTS OF OPERATIONS (continued)

Liquidity and Capital Resources (continued)

Concurrently, the Company issued 100,000 shares of its common stock to Kevin R.
Keating, the sole officer and director of the Company, for services rendered to
the Company valued at $5,000, or $0.05 per share. The Company also issued
100,000 shares of its common stock to a consulting firm for financial consulting
services rendered to the Company valued at $5,000, or $0.05 per share. On March
10, 2006, the Company issued additional 700,000 shares of its common stock to KI
Equity for a purchase price of $35,000, or $0.05 per share. The proceeds from
the purchase price were also intended as working capital of the Company.

The Company has nominal assets or no operating revenue. The Company has been
dependent upon the receipt of capital investment or other financing to fund its
continuing activities business plan which is to seek a combination with a
private operating company. The Company has not identified any business
combination and therefore, cannot ascertain with any degree of certainty the
capital requirements for any particular transaction. In addition, the Company is
dependent upon certain related parties to provide continued funding and capital
resources. If continued funding and capital sources are unavailable at
reasonable terms, the Company may not be able to implement its plan of
operations.

Plan of Operations

Risk Factors

An investment in our common stock involves investment risks and the possibility
of the loss of an investor's entire investment. A prospective investor should
evaluate all information about us and the risk factors discussed below in
relation to his financial circumstances before investing in us.

      1. No Current Operating Business. We currently have no relevant operating
business, revenues from operations or assets. Our business plan is to seek a
merger or business combination with an operating business. We face all of the
risks inherent in the investigation, acquisition, or involvement in a new
business opportunity. An investor's purchase of any of our securities must be
regarded as placing funds at a high risk in a new or "start-up" venture with all
of the unforeseen costs, expenses, problems, and difficulties to which such
ventures are subject.

      2. No Assurance of Success or Profitability. There is no assurance that we
will acquire a suitable and favorable business opportunity in a reverse merger
transaction. In addition, even if we become involved in a business opportunity,
there is no assurance that the business we acquire will generate revenues or
profits, or that the value of our common stock will increase as a result of the
acquired business opportunity.

                                       12
<PAGE>

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
        CONDITION AND RESULTS OF OPERATIONS (continued)

Plan of Operations

Risk Factors (continued)

      3. Possible Business - Not Identified and Highly Risky. Except as
described elsewhere in this Report, we have not identified and have no
commitments to enter into or acquire a specific business opportunity and
therefore we can disclose the risks and hazards of a business or opportunity
that we acquire only in a general manner, and cannot disclose the risks and
hazards of any specific business or other opportunity that we may enter into. An
investor can expect a potential business opportunity to be quite risky.

Our acquisition of or participation in a business opportunity could result in a
total loss to our investors and stockholders if the target business is
unsuccessful. Further, any investment in us may continue to be highly illiquid.

      4. Type of Business Acquired. Except as descrinbed elsewhere in this
Report, the type of business that may be acquired is not identified. Therefore,
our investors and stockholders have to rely on our management to determine which
target business to pursue. There are no controlling parameters of the business
to be acquired. Thus, ultimately an investment will depend on the target
business and therefore investors in us will be subject to all the risks that
would be associated with that selected business. Our management may have the
right to approve and authorize a reverse merger transaction with a target
company without obtaining the vote of the majority of our stockholders.

      5. Impracticability of Exhaustive Investigation. We have limited funds and
lack full-time management which will likely make it impracticable to conduct a
complete and exhaustive investigation and analysis of a business opportunity
before we commit our limited capital and other resources to acquire a target
business. Management decisions, therefore, likely will be made without detailed
feasibility studies, independent analysis, market surveys, and the like which,
if we had more funds available to us, would be desirable. We will be
particularly dependent in making decisions upon information provided by the
promoter, owner, sponsor, or others associated with the business opportunity
seeking to be acquired by us.

      6. Lack of Diversification. Because of our limited financial resources, it
is unlikely that we will be able to diversify our acquisitions or operations.
The inability to diversify our activities into more than one area will subject
our investors and stockholders to economic fluctuations within a particular
business or industry and therefore increase the risks associated with the
investment. We only intend to acquire a single business opportunity and thus
your investment will lack diversification.

                                       13
<PAGE>

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
        CONDITION AND RESULTS OF OPERATIONS (continued)

Plan of Operations

Risk Factors (continued)

      7. Possible Reliance upon Unaudited Financial Statements. We will require
audited financial statements from target companies that we propose to acquire.
No assurance can be given, however, that audited financials will be available at
the closing of the reverse merger transaction. In cases where audited financials
are unavailable, we will have to rely upon unaudited information received from
target companies' management that has not been verified by outside auditors. We,
at the time of acquisition, will be subject to the reporting provisions of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and thus will
be required to furnish certain information about significant acquisitions,
including audited financial statements for any business that the shell company
acquires. Consequently, acquisition prospects that do not have or are unable to
obtain the required audited statements may not be appropriate for acquisition so
long as the reporting requirements of the Exchange Act are applicable. But, in
cases where we have completed a reverse merger transaction in reliance on
unaudited financial statements and audited statements cannot subsequently be
obtained, the continued ability of the post-transaction company to remain a
reporting company and publicly trading will be in jeopardy and may significantly
reduce the value of your investment.

      8. Investment Company Regulation. We do not intend to become classified as
an "investment company" under the Investment Company Act of 1940 (the
"Investment Act"). We believe that we will not become subject to regulation
under the Investment Act because (i) we will not be engaged in the business of
investing or trading in securities, and (ii) any acquisition undertaken will
result in the target company obtaining a majority interest in us. Should there
be a requirement to register as an investment company, it would cause
significant registration and compliance costs. Any violation of the Investment
Act will subject us to materially adverse consequences. Should the SEC find that
we are subject to the Investment Act, and order registration under the
Investment Act, we would resist such finding and take steps to avoid such
registration. Irrespective of whether the SEC or we were to prevail in such
dispute about whether or not we are an investment company, however, the damages
and delays would be costly.

      9. Other Regulation. Any acquisition made by us may be of a business that
is subject to regulation or licensing by federal, state, or local authorities.
Foreign companies may also be considered, and be subject to similar business
regulations as are applicable in the United States and also may be subject to
limitations on ownership by foreign persons and entities. Compliance with such
regulations and licensing can be expected to be a time-consuming, expensive
process and may limit our other investment opportunities. We intend to pursue
potential business opportunities in foreign countries, including China, and as
such, such opportunities will be subject to foreign country laws and regulations
affecting foreign investment, business operations, currency exchange,
repatriation of profits, and taxation, which will increase the risk of your
investment.

                                       14
<PAGE>

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
        CONDITION AND RESULTS OF OPERATIONS (continued)

Plan of Operations (continued)

Risk Factors (continued)

      10. Dependence upon Management. We will be heavily dependent upon the
skills, talents, and abilities of our management to implement our business plan.
Our management may devote limited time to our affairs, which may be inadequate
for our business, and may delay the acquisition of any business opportunity
considered. Furthermore, management has little experience in seeking,
investigating, and acquiring businesses and will depend upon its limited
business knowledge in making decisions regarding our acquisition of a business
opportunity. Because investors will not be able to evaluate the merits of
possible business acquisitions by us, they should critically assess the
information concerning the management.

      11. Dependence upon Outside Advisors. To supplement the business
experience of management, we may be required to employ accountants, technical
experts, appraisers, attorneys, or other consultants or advisors. Some of these
outside advisors may be our affiliates or their affiliated entities. The
selection of any such advisors will be made by our management without any input
from stockholders.

      12. Conflicts of Interest. Our management has other business interests to
which they will devote primary attention. As a result, conflicts of interest may
arise that can be resolved only through the exercise by them of their judgment
as may be consistent with their fiduciary duties. Our management will try to
resolve conflicts to the best advantage of all concerned, but there may be times
when an acquisition opportunity is given to another entity to the disadvantage
of our stockholders and for which there will be no recourse. It is also expected
that we will engage Keating Securities, LLC, an affiliate of Keating
Investments, LLC, the managing member of our controlling stockholder, to act as
a financial advisor in connection with the reverse merger transaction for which
it may earn a cash and/or equity fee.

      13. Need for Additional Financing. In all likelihood we will need
additional funds to take advantage of any available acquisition business
opportunity. Even if we were to obtain sufficient funds to acquire an interest
in a business opportunity, we may not have sufficient capital to fully exploit
the opportunity. Our ultimate success will depend upon our ability to raise
additional capital at the time of the acquisition and thereafter. When
additional capital may be needed, there can be no assurance that funds will be
available from any source or, if available, that they can be obtained on
acceptable terms.

      14. Borrowing Transactions. There is a possibility that any acquisition of
a business opportunity by us will require borrowing against the assets of the
business opportunity to be acquired, or against the projected future revenues or
profits of the business opportunity. This leverage could increase our exposure
to larger losses. There is no assurance that any business opportunity acquired
through borrowing and leverage will generate sufficient revenues to cover the
related debt and expenses.

      15. No Foreseeable Dividends. We do not intend to pay any dividends. We do
not foresee making any cash distributions in the manner of a dividend or
otherwise.

                                       15
<PAGE>

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
        CONDITION AND RESULTS OF OPERATIONS (continued)

Plan of Operations (continued)

Risk Factors (continued)

      16. Loss of Control by Present Management and Stockholders. It is likely
that any acquisition of an operating company will result in a change in control
of the then current directors, officers and the stockholders. Therefore, our
management prior to the acquisition will be changed to those of the target
company and its stockholders, who will then control the combined company. At
that time, our stockholders will be at investment risk for the decisions about
the business by persons that they may not know or have any ability to influence
through a board seat or by the voting mechanism of stockholders.

      17. Dilutive Effects of Issuing Additional Common Stock. In any reverse
merger transaction, for tax reasons and management reasons, the owners of the
target company will be issued a large number of shares of common stock which
will dilute the ownership interest of our current stockholders. In addition, at
the time of the reverse merger, it will be likely that there will be additional
authorized but unissued shares that may be later issued by the then new
management for any purpose without the consent or vote of the stockholders. The
acquisition issuance and additional issuances that may occur will dilute the
interests of our stockholders after the reverse merger transaction.

      18. Thinly-traded Public Market. Our securities will be very thinly
traded, and the price if traded may not reflect the value of the company.
Moreover, there may be a reverse split of the shares which may not reflect the
value of the company either. There can be no assurance that there will be an
active market for our shares either now or after we complete the reverse merger.
The market liquidity will be dependant on the perception of the operating
business and any steps that its management might take to bring the company to
the awareness of investors. There can be no assurance given that there will be
any awareness generated. Consequently investors may not be able to liquidate
their investment or liquidate it at a price that reflects the value of the
business. If a more active market should develop, the price may be highly
volatile. Because there may be a low price for our securities, many brokerage
firms may not be willing to effect transactions in the securities. Even if an
investor finds a broker willing to effect a transaction in the securities, the
combination of brokerage commissions, transfer fees, taxes, if any, and any
other selling costs may exceed the selling price. Further, many lending
institutions will not permit the use of such securities as collateral for any
loans.

                                       16
<PAGE>

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
        CONDITION AND RESULTS OF OPERATIONS (continued)

Plan of Operations (continued)

Risk Factors (continued)

      19. Possible Rule 144 Sales. The majority of our shares currently
outstanding are "restricted securities" within the meaning of Rule 144 under the
Securities Act of 1933, as amended (the "Act"). As restricted shares, these
shares may be resold only pursuant to an effective registration statement or
under the requirements of Rule 144 or other applicable exemption from
registration under the Act and as required under applicable state securities
laws. Rule 144 provides in essence that a person who has held restricted
securities for a period of one year may, under certain conditions, sell every
three months, in brokerage transactions, a number of shares that does not exceed
the greater of 1.0% of a company's outstanding common stock or the average
weekly trading volume during the four calendar weeks prior to the sale. There is
no limit on the amount of restricted securities that may be sold by a
non-affiliate after the restricted securities have been held by the owner for a
period of two years. Current stockholders who own 10% or more of our shares will
likely be deemed an affiliate until 90 days after a reverse merger is completed
with a target company. After such 90-day period, and assuming said shares have
been held for more than two years, these stockholders may be able to sell their
shares without volume restrictions. A sale under Rule 144 or under any other
exemption from the Act, if available, or pursuant to subsequent registrations of
our shares, may have a depressive effect upon the price of our shares in any
market that may develop.

                                       17
<PAGE>

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
        CONDITION AND RESULTS OF OPERATIONS (continued)

Plan of Operations (continued)

General Business Plan

Our plan of operation is to seek a target company with which to merge or to
complete a business combination. In any transaction, we will be the surviving
entity, and our stockholders will retain a percentage ownership interest in the
post-transaction company. The amount of the retained equity ownership by our
stockholders will be negotiated by our management and the target company. We may
also be required to pay cash and/or equity fees to third parties that advise us
in connection with the merger or business combination, commonly refereed to as a
reverse merger. These third party advisors may include certain affiliates of
ours and their affiliated entities.

Typically in connection with the reverse merger transaction involving us and the
target company, there will be a capital funding event for the target business on
a combined basis either at the time of the reverse merger or shortly thereafter.
This may be a private placement by either us or the target company, if the
funding event is contingent on the closing of the reverse merger. If the funding
event is after the reverse merger, it will likely be a public offering or
private placement of our securities. It will often be the case that the
liquidity opportunity for our existing stockholders will be tied to the ability
of the old and new investors of the target enterprise to have liquidity in the
market for their financial investment. Therefore, our stockholders may have to
continue to hold their investment or may face competition in being able to sell
their shares in the post-transaction business in the public market, which may
depress the price for such a volume of securities.

We will not restrict our search to any specific business, industry or geographic
location, and we may participate in a business venture of virtually any kind or
nature. This discussion of our plan for acquiring an operating business is
purposefully general, and it is not meant to be restrictive of the virtually
unlimited discretion to search for and enter into potential business
opportunities. We anticipate that we will be able to participate in only one
potential business venture because of our nominal assets and limited financial
resources.

We may seek a business opportunity with entities which have recently commenced
operations, or that desire to utilize the public marketplace in order to raise
additional capital in order to expand into new products or markets, to develop a
new product or service, or for other corporate purposes. We may acquire assets
and establish wholly owned subsidiaries in various businesses or acquire
existing businesses as subsidiaries.

                                       18
<PAGE>

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
        CONDITION AND RESULTS OF OPERATIONS (continued)

Plan of Operations (continued)

General Business Plan (continued)

We expect that the selection of a business opportunity will be complex and
risky. Due to general economic conditions, rapid technological advances being
made in some industries and shortages of available capital, we believe that
there are numerous potential targets with either sound business ideas or
operations seeking the benefits of a shell company that has complied with the
federal reporting requirements for public companies and is publicly trading.
Such benefits may include facilitating or improving the terms on which
additional equity financing may be sought, providing liquidity for incentive
stock options or similar benefits to key employees, providing liquidity (subject
to restrictions of applicable statutes) for all stockholders and other factors.
Potentially, available business opportunities 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. We have, and will continue to have, limited
capital with which to provide the owners of business opportunities with any
significant cash or other assets. We will, however, be able to offer owners of
target candidates the opportunity to acquire a controlling ownership interest in
an issuer who has complied with the reporting requirements under federal
securities laws without incurring the cost and time required to conduct an
initial public offering.

The analysis of new business opportunities will be undertaken by, or under the
supervision of, our management who will likely engage outside advisors to assist
us in this analysis. Some of these outside advisors may be affiliates of ours or
their affiliated entities. We intend to concentrate on identifying preliminary
prospective business opportunities which may be brought to our attention through
present associations of our officers and directors, or by our advisors. In
analyzing prospective business opportunities, we will consider such matters as
(i) available technical, financial and managerial resources; (ii) working
capital and other financial requirements; (iii) history of operations, if any
and prospects for the future; (iv) nature of present and expected competition;
(v) quality, experience and depth of management services; (vi) potential for
further research, development or exploration; (vii) specific risk factors not
now foreseeable but that may be anticipated to impact the proposed activities of
the company; (viii) potential for growth or expansion; (ix) potential for
profit; (x) public recognition and acceptance of products, services or trades;
(xi) name identification; and (xii) other factors that we consider relevant. As
part of our investigation of the business opportunity, we or our advisors expect
to meet personally with or interview management and key personnel.

                                       19
<PAGE>

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
        CONDITION AND RESULTS OF OPERATIONS (continued)

Plan of Operations (continued)

General Business Plan (continued)

We may also have to compensate certain advisors, finders and investment banking
firms for services rendered in connection with the identification of target
operating companies and the negotiation and completion of the transaction. Due
to our limited resources, it is expect that all or a portion of this
compensation will be in the form of our common stock or from cash provided by
the target company or the funding event. Additional issuance of our common stock
will have a further dilutive effect on the percentage of shares held our
stockholders. Keating Securities, LLC, an affiliate of Keating Investments, LLC,
the managing member of our controlling stockholder, will also act as a financial
advisor in connection with the reverse merger transaction and will be paid a
cash and/or equity fee upon the successful closing of the reverse merger.

We will not acquire or merge with any company for which audited financial
statements cannot be obtained within a reasonable period of time after closing
of the proposed transaction.

Acquisition Opportunities

In implementing a structure for a particular business acquisition, we may become
a party to a merger, consolidation, reorganization, joint venture, or licensing
agreement with another company or entity. We may also acquire stock or assets of
an existing business. Our management may have the right to approve and authorize
a reverse merger transaction with a target company without obtaining the vote of
the majority of our stockholders. Further, upon consummation of a reverse merger
transaction, it is probable that our present management and stockholders will no
longer be in control of us. In addition, our management, as part of the terms of
the reverse merger transaction, may resign and may be replaced by new directors
without a vote of our stockholders. Any and all sales of shares of our common
stock may only be made in compliance with the securities laws of the United
States and any applicable state.

It is anticipated that certain securities issued by us in connection with the
reverse merger would be issued in reliance upon exemptions from registration
under application federal and state securities laws. In some circumstances, as a
negotiated element of the reverse merger transaction, we will be asked to agree
to register all or a part of such securities immediately after the transaction
is consummated or at specified times thereafter. In such a case, we will attempt
to negotiate the registration of some or all of our current outstanding shares
which are restricted, but there is no guarantee that this will be accomplished
or, if accomplished, that the registration rights identical. If such
registration occurs, it will be undertaken by the surviving entity after it has
successfully consummated a reverse merger and is no longer considered an
inactive company. The issuance of substantial additional securities by us in
connection with the reverse merger and their potential sale into any trading
market which may develop in our securities may have a depressive effect on the
value of our securities in the future. There is no assurance that such a trading
market will develop.

                                       20
<PAGE>

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
        CONDITION AND RESULTS OF OPERATIONS (continued)

Plan of Operations (continued)

Acquisition Opportunities (continued)

While the actual terms of a reverse merger transaction cannot be predicted, it
is expected that the parties to any business transaction will find it desirable
to avoid the creation of a taxable event and thereby structure the business
transaction in a so-called "tax-free" reorganization under Sections 368(a)(1) or
351 of the Internal Revenue Code (the "Code"). In order to obtain tax-free
treatment under the Code, it may be necessary for the owners of the acquired
business to own 80 percent or more of the voting stock of the surviving entity.
In such event, the equity interest retained by our current stockholders would be
less than 20 percent of the issued and outstanding shares of the surviving
entity. This would result in significant dilution in the equity interests of our
stockholders.

In addition to the tax considerations discussed above, it is likely that in any
reverse merger, and depending upon, among other things, the target company's
assets and liabilities, the equity interests of our stockholders after the
transaction will be a small percentage of the post-transaction company. The
percentage ownership may be subject to significant reduction in the event we
acquire a target company with significant assets and expectations of growth.

We will participate in a business opportunity only after the negotiation and
execution of appropriate written agreements. Although the terms of the
acquisition agreements cannot be predicted, generally such agreements will (i)
require specific representations and warranties by all of the parties; (ii)
specify certain events of default and remedies therefor; (iii) detail the terms
of closing and the conditions which must be satisfied by each of the parties
prior to and after closing; (iv) outline the manner of bearing costs, including
costs associated with our attorneys and accountants; (v) set forth
indemnification provisions; and (vi) include miscellaneous other terms.

As stated above, we will not acquire or merge with any entity which cannot
provide independent audited financial statements within a reasonable period of
time after closing of the proposed transaction. Included in these requirements
is the affirmative duty to file independent audited financial statements as part
of a Current Report on Form 8-K, required to be filed with the SEC upon
consummation of a merger or acquisition, as well as audited financial statements
included in an Annual Report on Form 10-K (or Form 10-KSB, as applicable). If
such audited financial statements are not available at closing, or within time
parameters necessary to insure compliance with the reporting requirements under
federal securities laws, or if the audited financial statements provided do not
conform to the representations made by the business to be acquired, we will
attempt to negotiate a provision in the definitive closing documents to void the
transaction. However, there is no guarantee that we will be successful in
including such a provision and, in such case, the continued ability of the
post-transaction company to remain a reporting company and publicly trading may
be in jeopardy.

                                       21
<PAGE>

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
        CONDITION AND RESULTS OF OPERATIONS (continued)

Plan of Operations (continued)

Competition

We are an insignificant participant among the firms which engage in the reverse
merger of shell companies into an operating business. There are many established
venture capital and financial concerns that have significantly greater financial
and personnel resources and technical expertise than we have. In view of our
limited financial resources and limited management availability, we will
continue to be at a significant competitive disadvantage compared to our
competitors. As a result, we may not be able to find suitable target companies
with which to complete a reverse merger transaction.

We are an insignificant participant among the firms which engage in the reverse
merger of shell companies into an operating business. There are many established
venture capital and financial concerns that have significantly greater financial
and personnel resources and technical expertise than we have. In view of our
limited financial resources and limited management availability, we will
continue to be at a significant competitive disadvantage compared to our
competitors. As a result, we may not be able to find suitable target companies
with which to complete a reverse merger transaction.

                                       22
<PAGE>

ITEM 3. CONTROLS AND PROCEDURES

The Company had no active business operations during the fiscal quarter ended
March 31, 2006. As of the end of the period covered by this report, the Company
conducted an evaluation, under the supervision and with the participation of the
President, of the Company's disclosure controls and procedures (as defined in
Rules 13a-15(e) and 15d-15(e) under the 1934 Act. Based on this evaluation, the
President concluded that the Company's disclosure controls and procedures are
effective to ensure that information required to be disclosed by the Company in
reports that it files or submits under the 1934 Act is recorded, processed,
summarized and reported within the time periods specified in Securities and
Exchange Commission rules and forms. There was no change in the Company's
internal control over financial reporting during the Company's most recently
completed fiscal quarter that has materially affected, or is reasonably likely
to materially affect, the Company's internal control over financial reporting.

                                       23
<PAGE>

PART II. OTHER INFORMATION
Item 1. Legal Proceedings

        None

Item 2. Changes in Securities

        On January 4, 2006, the Company issued 1,500,000 shares of its common
        stock to KI Equity for a purchase price of $75,000, or $0.05 per share.
        The proceeds from the purchase price were intended as working capital to
        pay expenses to maintain the reporting status of the Company.
        Concurrently, the Company issued 100,000 shares of its common stock to
        Kevin R. Keating, the sole officer and director of the Company, for
        services rendered to the Company valued at $5,000, or $0.05 per share.
        The Company also issued 100,000 shares of its common stock to a
        consulting firm for financial consulting services rendered to the
        Company valued at $5,000, or $0.05 per share.

        On March 10, 2006, the Company issued additional 700,000 shares of its
        common stock to KI Equity for a purchase price of $35,000, or $0.05 per
        share.

        The above shares of common stock were issued under an exemption from
        registration under Section 4(2) of the Securities Act of 1933, as
        amended ("Securities Act"). As such, the above shares of common stock
        will be restricted shares, and the holder thereof may not sell, transfer
        or otherwise dispose of such shares without registration under the
        Securities Act or an exemption therefrom. The Company has agreed to
        grant "piggyback" registration rights to the holders with respect to the
        above shares.

Item 3. Defaults Upon Senior Securities

        None

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

        None

Item 5. Other Information

        None

                                       24
<PAGE>

Item 6. Exhibits and Reports on Form 8-K

        (a)     Exhibits

        31      Certification of President of the Company Accompanying Periodic
                Reports pursuant to Section 302 of the Sarbanes-Oxley Act of
                2002 (as filed herewith).

        32      Certification of President of the Company pursuant to Section
                906 of the Sarbanes-Oxley Act of 2002 (as filed herewith).

        (b)     Reports on Form 8-K

                On January 4, 2006, the Company filed its Current Report on Form
                8-K dated January 4, 2006 disclosing unregistered sales of
                1,700,000 shares of equity securities as described elsewhere in
                this Report.

                On March 10, 2006, the Company filed its Current Report on Form
                8-K dated March 10, 2006 disclosing unregistered sales of
                700,000 shares of equity securities as described elsewhere in
                this Report.

                On March 29, 2006, the Company filed its Current Report on Form
                8-K dated March 27, 2006 disclosing the execution of its letter
                of intent to acquire Pro-Stars, Inc., a Nevada corporation as
                described elsewhere in this Report.

                                       25
<PAGE>

                                   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.

                                             APPLIED SPECTRUM TECHNOLOGIES, INC.

Date: May 15, 2006                           By: /s/ Kevin R. Keating
                                                 --------------------
                                                 Kevin R. Keating, President

                                       26