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

                                   FORM 10-QSB

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

                  For the Quarterly Period Ended: June 30, 2006

                         Commission File Number: 0-16397

                       APPLIED SPECTRUM TECHNOLOGIES, INC.
        (Exact name of small business issuer as specified in its 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)

                                 (772) 231-7544
                           (Issuer's telephone number)

                                       N/A
              (Former name, former address and former fiscal year,
                          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 June 30, 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 June 30, 2006 (unaudited)
      and September 30, 2005                                                   1

    Condensed Statements of Operations for the three and nine
      month periods ended June 30, 2006 and 2005 (unaudited)                   2

    Condensed Statements of Cash Flows for the nine month
      periods ended June 30, 2006 and 2005 (unaudited)                         3

    Notes to Financial Statements (unaudited)                                4-7

  Item 2. Management's Discussion and Analysis or Plan of Operation         8-21

  Item 3. Controls and Procedures                                             22

PART II.OTHER INFORMATION

  Item 1. Legal Proceedings                                                   23
  Item 2. Unregistered Sales of Equity Securities and Use of Proceeds         23
  Item 3. Defaults Upon Senior Securities                                     23
  Item 4. Submission of Matters to a Vote of Security Holders                 23
  Item 5. Other information                                                   23
  Item 6. Exhibits                                                            24

    Signatures                                                                25

    Certifications
      Exhibit 31                                                           26-27
      Exhibit 32                                                              28

<PAGE>

PART I - FINANCIAL INFORMATION

<PAGE>

ITEM 1.  FINANCIAL STATEMENTS

                       APPLIED SPECTRUM TECHNOLOGIES, INC.
                                 BALANCE SHEETS

                                                      June 30,    September 30,
                                                        2006           2005
                                                    ------------  -------------
                                                     (Unaudited)
ASSETS

CURRENT ASSETS
  Cash                                              $     70,629   $         --
  Other assets                                                --         18,936
                                                    ------------   ------------
TOTAL ASSETS                                        $     70,629   $     18,936
                                                    ============   ============

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
  Accounts payable and accrued expenses             $      2,000   $      1,568
  Deposit liability                                       50,000             --
                                                    ------------   ------------
  Total Current Liabilities                               52,000          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                                (16,197,141)   (16,076,384)
                                                    ------------   ------------
  Total Stockholders' Equity                              18,629         17,368
                                                    ------------   ------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY          $     70,629   $     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       Nine Months Ended
                                              June 30,                June 30,
                                       ----------------------  ----------------------
                                          2006        2005         2006       2005
                                       ----------  ----------  ----------  ----------
<S>                                    <C>         <C>         <C>         <C>
Revenue                                $       --  $       --  $       --  $       --

Operating expenses:
  General and administrative expenses      23,467         450     120,881       1,350
                                       ----------  ----------  ----------  ----------
Loss from operations                      (23,467)       (450)   (120,881)     (1,350)

Other income (expense):
  Interest income                              --         102         124         118
                                       ----------  ----------  ----------  ----------
Net loss                               $  (23,467) $     (348) $ (120,757) $   (1,057)
                                       ==========  ==========  ==========  ==========

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

Weighted average shares of
  common stock outstanding              5,353,941   2,953,941   4,343,318   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)

                                                     Nine Months
                                                   Ended June 30,
                                                --------------------
                                                  2006        2005
                                                ---------   --------
CASH FLOWS FROM OPERATIONS
Net loss                                        $(120,757)  $ (1,057)
Adjustments to reconcile net loss to net
  cash used in operating activities:
    Rent expense contributed                          450      1,350
    Common Stock issued for services               10,000         --
    Changes in:
      Accounts payable and accrued expenses           432    (11,209)
      Deposit liability                            50,000         --
      Other assets                                 18,936     10,916
                                                ---------   --------
Net cash used in operating activities             (40,939)        --
                                                ---------   --------

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  in cash                              70,629         --

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

Cash, end of period                             $  70,629   $     --
                                                =========   ========

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


                                        3

<PAGE>

                       APPLIED SPECTRUM TECHNOLOGIES, INC.
                          NOTES TO FINANCIAL STATEMENTS
                                  June 30, 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-QSB 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.

      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
      fiscal years ended September 30, 2005 and 2004. Operating results for the
      three months ended June 30, 2006 are not necessarily indicative of the
      results that may be expected for the year ending 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 fiscal year ended 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 Income (Loss) Per Share

      Basic income (loss) per weighted average common share is computed by
      dividing the net income (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 and nine months ended
      June 30, 2006 and 2005, when their effect is anti-dilutive. There were no
      common stock equivalents outstanding at the balance sheet date.


                                        4

<PAGE>

                       APPLIED SPECTRUM TECHNOLOGIES, INC.
                          NOTES TO FINANCIAL STATEMENTS
                                  June 30, 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 and nine months ended June 30,
      2006 and 2005, respectively.

NOTE 2 - STOCKHOLDERS' EQUITY

      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 an unaffiliated 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 an 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 owned a total of 4,481,302 shares of the Company's Common
      Stock immediately after the above stock issuances.

      As of June 30, 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 June 30, 2006.


                                        5

<PAGE>

                       APPLIED SPECTRUM TECHNOLOGIES, INC.
                          NOTES TO FINANCIAL STATEMENTS
                                  June 30, 2006
                                   (Unaudited)

NOTE 3 - INCOME TAXES

      At June 30, 2006, the Company had accumulated net operating loss
      carryforwards for federal tax purposes of approximately $2,036,000 that
      are available to offset future taxable income, if any, through 2026.
      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 June 30, 2006.

NOTE 4 - OTHER ASSETS AND DUE TO FORMER SHAREHOLDER

      Other assets consisted of three bank accounts held in the name of Norwood
      Venture Corp., a former shareholder of the Company. These funds were
      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 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.

NOTE 5 - 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 by any party. In consideration of the services
      provided, Vero is paid $2,500 for each month in which services are
      rendered. A total of $7,500 was included in general and administrative
      expenses relating to this agreement for the three month period ended June
      30, 2006.


                                        6

<PAGE>

                       APPLIED SPECTRUM TECHNOLOGIES, INC.
                          NOTES TO FINANCIAL STATEMENTS
                                  June 30, 2006
                                   (Unaudited)

NOTE 6 - ENTRY AND TERMINATION OF A MERGER AGREEMENT

      On May 16, 2006, the Company entered into an agreement and plan of merger
      ("Merger Agreement") with Pro-Stars, Inc., a Nevada corporation
      ("Pro-Stars") and APSP Acquisition, Inc., a Delaware corporation and
      wholly-owned subsidiary of the Company (`Merger Sub"). Pro-Stars is a
      retailer of sports and celebrity endorsed products and memorabilia.

      Under the Merger Agreement, the Company and Pro-Stars would enter into a
      business combination transaction by means of a merger of Merger Sub into
      Pro-Stars through an exchange of all the issued and outstanding shares of
      common stock of Pro-Stars for shares of convertible preferred stock of the
      Company. The consummation of the Merger was subject to Pro-Stars' ability
      to raise not less than $10 million in an offering ("Equity Financing").

      Effective July 14, 2006, the Company terminated the Merger Agreement due
      to the failure of the transactions contemplated thereunder to have been
      consummated by June 30, 2006, which date was extended by the Company to
      July 14, 2006.

NOTE 7 - SUBSEQUENT EVENT

      Pursuant to a Letter of Intent with Pro-Stars signed on March 27, 2006,
      the Company received a good faith deposit of $50,000. In the event the
      Letter of Intent was terminated under certain specified circumstances, all
      or a portion of the deposit would be retained by the Company.

      Following the termination of the Merger Agreement on July 14, 2006,
      $25,000 of the deposit was retained by the Company per mutual agreement of
      the parties.


                                        7

<PAGE>

ITEM  2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

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 potential 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) the
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.


                                        8

<PAGE>

ITEM  2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION (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") to redomesticate the Company from the
State of Minnesota to the State of Delaware (the "Merger"). The Merger was
completed 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. 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 is dependent on future events, there can be no assurance that future
profitable operations will occur.


                                       9

<PAGE>

ITEM  2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION (continued)

Entry into Letter of Intent

On May 16, 2006, the Company entered into an agreement and plan of merger
("Merger Agreement") with Pro-Stars, Inc., a Nevada corporation ("Pro-Stars")
and APSP Acquisition, Inc., a Delaware corporation and wholly-owned subsidiary
of the Company (`Merger Sub"). Pro-Stars is a retailer of sports and celebrity
endorsed products and memorabilia.

Under the Merger Agreement, the Company and Pro-Stars would enter into a
business combination transaction by means of a merger of Merger Sub into
Pro-Stars through an exchange of all the issued and outstanding shares of common
stock of Pro-Stars for shares of convertible preferred stock of the Company.

The consummation of the Merger was subject to Pro-Stars' ability to raise not
less than $10 million in an offering ("Equity Financing").

Pursuant to a Letter of Intent with Pro-Stars signed on March 27, 2006, 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 would be retained by the Company.

Effective July 14, 2006, the Company terminated the Merger Agreement due to the
failure of the transactions contemplated thereunder to have been consummated by
June 30, 2006, which date was extended by the Company to July 14, 2006.

Following the termination of the Merger Agreement on July 14, 2006, $25,000 of
the deposit was retained by the Company by mutual agreement of the parties.

Results of Operations

During the three months ended June 30, 2006, the Company had net loss of
$23,467, consisting primarily of general and administrative expenses. The
Company's net loss for the first nine months of fiscal year 2006 was $120,757.
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.


                                       10

<PAGE>

ITEM  2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION (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 an unaffiliated 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 an 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 its sole officer, director and his affiliates to provide
continued funding and capital resources. If continued funding and capital
sources are unavailable at reasonable terms, it is likely the Company would 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.


                                       11

<PAGE>

ITEM  2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION (continued)

Plan of Operations

Risk Factors (continued)

      3. Possible Business - Not Identified and Highly Risky. 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 may 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 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 described elsewhere in this
Report, the type of business that may be acquired by us 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 which we acquired. Thus, ultimately an investment will depend on
the target business and therefore our stockholders will be subject to all the
risks that would be associated with a selected business. In addition, 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 an
investment. We only intend to acquire a single business opportunity and thus
your investment will lack diversification.


                                       12

<PAGE>

ITEM  2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION (continued)

Plan of Operations

Risk Factors (continued)

      7. 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.

      8. 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 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.


                                       13

<PAGE>

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION (continued)

Plan of Operations (continued)

Risk Factors (continued)

      9. Dependence upon Management. We are almost exclusively dependent upon
the skills, talents, and abilities of our sole officer and director to implement
our business plan. Our management devotes 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.

      10. 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.

      11. 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 would be likely
that we would 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.

      12. 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.

      13. 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.

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


                                       14

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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION (continued)

Plan of Operations (continued)

Risk Factors (continued)

      15. 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.

      16. 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.

      17. Thinly-traded Public Market. Our securities are very thinly traded,
and the price 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 any reverse merger. The market liquidity
will be dependant on, among other things, the perception of the operating
business and any steps that 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 our 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.


                                       15

<PAGE>

ITEM  2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION (continued)

Plan of Operations (continued)

Risk Factors (continued)

      18. 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.


                                       16

<PAGE>

ITEM  2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION (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 referred to as a
reverse merger. These third party advisors may include certain affiliates of
ours and their affiliated entities.

Typically in connection with a 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 lawful
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 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.


                                       17

<PAGE>

ITEM  2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION (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.


                                       18

<PAGE>

ITEM  2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION (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 expected 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 likely 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
a reverse merger transaction, may resign and may be replaced by new directors
without a vote of our stockholders.

It is anticipated that certain securities issued by us in connection with a
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 may 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 would
attempt to negotiate the registration of some or all of our current outstanding
shares which are restricted, but there is no guarantee that this would be
accomplished or, if accomplished, that the registration rights would be
identical to other registration rights. If such registration occurs, it would be
undertaken by the surviving entity after it has successfully consummated a
reverse merger and the Company no longer considered inactive. The issuance of
substantial additional securities by us in connection with a 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. There is no
assurance that such a trading market would develop.


                                       19

<PAGE>

ITEM  2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION (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.

We do not intend to 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.


                                       20

<PAGE>

ITEM  2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION (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.


                                       21

<PAGE>

ITEM  3. CONTROLS AND PROCEDURES

The Company had no active business operations during the fiscal quarter ended
June 30, 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.


                                       22

<PAGE>

PART II. OTHER INFORMATION

Item  1. Legal Proceedings

         None

Item  2. Unregistered Sales of Equity Securities and Use of Proceeds

         None

Item  3. Defaults Upon Senior Securities

         None

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

         None

Item  5. Other Information

         None


                                       23

<PAGE>

Item  6. Exhibits

         (a)   Exhibits

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

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


                                       24

<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: August 14, 2006                   By: /s/ Kevin R. Keating
                                            ------------------------------------
                                            Kevin R. Keating, President


                                       25