UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON D.C. 20549



FORM 10-Q





|           |                                                                                        
|---------- | ---------------------------------------------------------------------------------------
|(Mark One) |                                                                                        
|ý          | Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934



For the quarterly period ended September 30, 2003



|  |                                                                                   
|- | ----------------------------------------------------------------------------------
| ̈ | Transition Report Under Section 13 or 15(d) of the Securities Exchange Act of 1934



|                                                                 
|-----------------------------------------------------------------
|For the transition period from _______________ to _______________
|                                                                 
|Commission File 333-34686                                        



PR Specialists, Inc.

(Exact Name of Registrant as Specified in Its Charter)



|                                                               |  |                                        
|-------------------------------------------------------------- |  | ---------------------------------------
|Delaware                                                       |  | 95-4792965                             
|(State or Other Jurisdiction of Incorporation or Organization) |  | (I.R.S. Employer Identification Number)



2201 Marina Bay Drive West # 204 Fort Lauderdale, Florida                                     33312

(Address of principal executive offices)                                                      (Zip Code)



|                                                                                   |                                                     |  | 
|---------------------------------------------------------------------------------- | --------------------------------------------------- |  | 
|                                                                                   | (954) 725-0138                                      | 
|(Registrants Telephone Number, Including Area Code)                              
|                                                                                   |                                                     | 
|                                                                                   | 2300 NE 48th Court, Lighthouse Point, Florida 33064 | 
|(Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report)



Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 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 ý



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



|                           |                                         
|-------------------------- | ----------------------------------------
|Large accelerated filer   ̈ | Accelerated filer                       ̈
|Non-accelerated filer     ̈ | Smaller reporting company     ý         



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



APPLICABLE ONLY TO CORPORATE ISSUERS



As of July 28, 2009, there were approximately 2,959,834 shares of common stock, $0.001 par value, issued and outstanding.



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PR SPECIALISTS, INC.



Form 10-Q Index

September 30, 2003



|        |                       |                                                                                       |    
|------- | --------------------- | ------------------------------------------------------------------------------------- | ---
|        |                       | Page                                                                                 
|Part I  | Financial Information |                                                                                      
|        |                       |                                                                                       |    
|        | Item 1                | Financial Statements                                                                  | 2  
|        |                       |                                                                                       |    
|        |                       | Consolidated Balance Sheets                                                           | F-1
|        |                       |                                                                                       |    
|        |                       | Consolidated Statements of Operations                                                 | F-2
|        |                       |                                                                                       |    
|        |                       | Consolidated Statements of Stockholders (Deficit) Equity                             | F-3
|        |                       |                                                                                       |    
|        |                       | Consolidated Statements of Cash Flows                                                 | F-4
|        |                       |                                                                                       |    
|        |                       | Notes To Financial Statements                                                         | F-5
|        |                       |                                                                                       |    
|        | Item 2                | Managements Discussion and Analysis of Financial Condition and Results of Operations | 12 
|        |                       |                                                                                       |    
|        | Item 3                | Quantitative and Qualitative Disclosures About Market Risk                            | 15 
|        |                       |                                                                                       |    
|        | Item 4                | Controls and Procedures                                                               | 16 
|        |                       |                                                                                       |    
|Part II | Other Information     | 16                                                                                   
|        |                       |                                                                                       |    
|        | Item 1                | Legal Proceedings                                                                     | 16 
|        |                       |                                                                                       |    
|        | Item 1A               | Risk Factors                                                                          | 16 
|        |                       |                                                                                       |    
|        | Item 2                | Unregistered Sales of Equity Securities and Use of Proceeds                           | 16 
|        |                       |                                                                                       |    
|        | Item 3                | Defaults Upon Senior Securities                                                       | 16 
|        |                       |                                                                                       |    
|        | Item 4                | Submission of Matters to a Vote of Security Holders                                   | 17 
|        |                       |                                                                                       |    
|        | Item 5                | Other Information                                                                     | 17 
|        |                       |                                                                                       |    
|        | Item 6                | Exhibits                                                                              | 17 
|        |                       |                                                                                       |    
|        |                       | Signatures                                                                            | 18 



1



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PART I - FINANCIAL INFORMATION



Item 1.

Financial Statements









PR SPECIALISTS, INC. AND SUBSIDIARIES



CONDENSED CONSOLIDATED FINANCIAL STATEMENTS



SEPTEMBER 30, 2003 AND 2002









2



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CONTENTS



|                                                          |           
|--------------------------------------------------------- | ----------
|                                                          | PAGE      
|                                                          |           
|CONSOLIDATED BALANCE SHEETS                               | F-1       
|                                                          |           
|CONSOLIDATED STATEMENTS OF OPERATIONS                     | F-2       
|                                                          |           
|CONSOLIDATED STATEMENTS OF STOCKHOLDERS (DEFICIT) EQUITY | F-3       
|                                                          |           
|CONSOLIDATED STATEMENTS OF CASH FLOWS                     | F-4       
|                                                          |           
|NOTES TO FINANCIAL STATEMENTS                             | F-5  F-10















3



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PR SPECISLISTS, INC. AND SUBSIDIARIES

(A Development Stage Company)

CONSOLIDATED BALANCE SHEETS





|                                                       |   |                    |   |                  
|------------------------------------------------------ | - | ------------------ | - | -----------------
|                                                       |   | September 30, 2003 |   | December 31, 2002
|                                                       |   | (Unaudited)        |   | (Audited)        
|                                                       |   |                    |   |                  
|ASSETS                                                 |   |                    |   |                  
|CURRENT ASSETS                                         |   |                    |   |                  
|Cash and cash equivalents                              | $ | -                  | $ | -                
|                                                       |   | -                  |   | -                
|                                                       |   |                    |   |                  
|OTHER ASSETS                                           |   |                    |   |                  
|Deposits                                               |   | 22,890             |   | 22,890           
|                                                       |   |                    |   |                  
|TOTAL ASSETS                                           | $ | 22,890             | $ | 22,890           
|                                                       |   |                    |   |                  
|                                                       |   |                    |   |                  
|LIABILITIES AND STOCKHOLDERS' (DEFICIT) EQUITY         |   |                    |   |                  
|CURRENT LIABILITIES                                    |   |                    |   |                  
|Accounts payable                                       | $ | 268,052            | $ | 267,820          
|Accrued expenses                                       |   | 227,170            |   | 153,712          
|Advances from stockholders                             |   | 176,700            |   | 176,700          
|Total Current Liabilities                              |   | 671,922            |   | 598,232          
|                                                       |   |                    |   |                  
|STOCKHOLDERS' (DEFICIT) EQUITY                         |   |                    |   |                  
|Common stock $0.001 par value, 20,000,000 authorized   |   |                    |   |                  
|16,048,000 and 16,048,000 issued and outstanding at    |   |                    |   |                  
|September 30, 2003 and December 31, 2002, respectively | $ | 16,048             | $ | 16,048           
|Additional paid-in-capital                             |   | 788,072            |   | 788,072          
|Deferred stock based compensation                      |   | (5,205)            |   | (5,205)          
|Accumulated (deficit)                                  |   | (1,447,947)        |   | (1,374,257)      
|                                                       |   |                    |   |                  
|TOTAL STOCKHOLDERS' (DEFICIT) EQUITY                   |   | (649,032)          |   | (575,342)        
|                                                       |   |                    |   |                  
|TOTAL LIABILITIES AND STOCKHOLDERS' (DEFICIT) EQUITY   | $ | 22,890             | $ | 22,890           







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



F-1



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PR SPECIALISTS, INC. AND SUBSIDIARIES

(A Development Stage Company)

CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE THREE AND NINE MONTHS ENDING SEPTEMBER 30, 2003 AND 2002 AND

FOR THE PERIOD DECEMBER 21, 2001 (INCEPTION) TO SEPTEMBER 30, 2003







|                                                    |   |                 |            |                    |            |                    |            |                    |            |                   
|--------------------------------------------------- | - | --------------- | ---------- | ------------------ | ---------- | ------------------ | ---------- | ------------------ | ---------- | ------------------
|                                                    |   |                 |            | For the            |            | For the            |            | For the            |            | For the           
|                                                    |   |                 |            | Three Months       |            | Three Months       |            | Nine Months        |            | Nine Months       
|                                                    |   | Cumulative      |            | Ending             |            | Ending             |            | Ending             |            | Ending            
|                                                    |   | Since Inception |            | September 30, 2003 |            | September 30, 2002 |            | September 30, 2003 |            | September 30, 2002
|                                                    |   |                 |            |                    |            |                    |            |                    |            |                   
|NET SALES                                           | $ | 224,436         | $          | -                  | $          | 134,085            | $          | -                  | $          | 165,868           
|                                                    |   |                 |            |                    |            |                    |            |                    |            |                   
|COST AND EXPENSE                                    |   |                 |            |                    |            |                    |            |                    |            |                   
|Cost of services                                    |   | 116,637         |            | -                  |            | 130,056            |            | -                  |            | 130,056           
|Stock based consulting fees                         |   | 41,295          |            | -                  |            | 6,225              |            | -                  |            | 12,450            
|General and administrative                          |   | 1,286,009       |            | 24,718             |            | 610,548            |            | 73,690             |            | 961,516           
|                                                    |   | 1,443,941       |            | 24,718             |            | 746,829            |            | 73,690             |            | 1,104,022         
|                                                    |   |                 |            |                    |            |                    |            |                    |            |                   
|LOSS FROM OPERATIONS                                |   | (1,219,505)     |            | (24,718)           |            | (612,744)          |            | (73,690)           |            | (938,154)         
|                                                    |   |                 |            |                    |            |                    |            |                    |            |                   
|OTHER INCOME (EXPENSE)                              |   |                 |            |                    |            |                    |            |                    |            |                   
|Rental income                                       |   | 12,000          |            | -                  |            | -                  |            | -                  |            | -                 
|Loss on settlement of liabilities                   |   | (199,500)       |            | -                  |            | -                  |            | -                  |            | -                 
|Loss on disposition of equipment                    |   | (40,929)        |            | -                  |            | -                  |            | -                  |            | -                 
|Interest expense                                    |   | (13)            |            | -                  |            | -                  |            | -                  |            | -                 
|                                                    |   |                 |            |                    |            |                    |            |                    |            |                   
|                                                    |   |                 |            |                    |            |                    |            |                    |            |                   
|NET LOSS                                            | $ | (1,447,947)     | $          | (24,718)           | $          | (612,744)          | $          | (73,690)           | $          | (938,154)         
|                                                    |   |                 |            |                    |            |                    |            |                    |            |                   
|Basic and Diluted Loss per Share                    |   |                 | $          | (0.00)             | $          | (0.04)             | $          | (0.00)             | $          | (0.07)            
|                                                    |   |                 |            |                    |            |                    |            |                    |            |                   
|Basic and Diluted Weighted Average Number of Shares |   |                 | 16,048,000 |                    | 15,656,163 |                    | 16,048,000 |                    | 14,088,963









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



F-2





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PR SPECIALISTS, INC. AND SUBSIDIARIES

(A Development Stage Company)

CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS (DEFICIT) EQUITY

FOR THE PERIOD DECEMBER 21, 2001 (INCEPTION) TO SEPTEMBER 30, 2003







|                                                       |   |            |   |        |   |         |   |              |   |                |          |                     |          |             |  | 
|------------------------------------------------------ | - | ---------- | - | ------ | - | ------- | - | ------------ | - | -------------- | -------- | ------------------- | -------- | ----------- |  | 
|                                                       |   |            |   |        |   |         |   |              |   |                |          | Deficit Accumulated |          |            
|                                                       |   | Number of  |   | Common |   | Paid-in |   | Common Stock |   | Deferred Stock |          | During              |          |            
|                                                       |   | Shares     |   | Stock  |   | Capital |   | Subscribed   |   | Based Comp     |          | Development Stage   |          | Total      
|                                                       |   |            |   |        |   |         |   |              |   |                |          |                     |          |            
|BALANCE AT DECEMBER 21, 2001 (INCEPTION)               |   | -          | $ | -      | $ | -       | $ | -            | $ | -              | $        | -                   | $        | -          
|                                                       |   |            |   |        |   |         |   |              |   |                |          |                     |          |            
|Issuance of common stock to founders                   |   | 8,270,000  |   | 8,270  |   | (7,443) |   | -            |   | -              |          | -                   |          | 827        
|Net loss from inception to December 31, 2001           |   | -          |   | -      |   | -       |   | -            |   | -              |          | (150)               |          | (150)      
|                                                       |   |            |   |        |   |         |   |              |   |                |          |                     |          |            
|BALANCE AT DECEMBER 31, 2001                           |   | 8,270,000  |   | 8,270  |   | (7,443) |   | -            |   | -              |          | (150)               |          | 677        
|                                                       |   |            |   |        |   |         |   |              |   |                |          |                     |          |            
|Issuance of common stock for cash                      |   | 2,040,000  |   | 2,040  |   | 459,960 |   | -            |   | -              |          | -                   |          | 462,000    
|Recapitalization of PR Specialists, Inc.               |   | 5,323,000  |   | 5,323  |   | 48,142  |   | 35           |   | -              |          | -                   |          | 53,500     
|Issuance of common stock for consulting services       |   | 250,000    |   | 250    |   | 199,750 |   | (35)         |   | (5,205)        |          | -                   |          | 194,760    
|Issuance of common stock for vendor payable            |   | 165,000    |   | 165    |   | 82,335  |   | -            |   | -              |          | -                   |          | 82,500     
|Services contributed by employee                       |   | -          |   | -      |   | 5,328   |   | -            |   | -              |          | -                   |          | 5,328      
|Net loss for the year ended December 31, 2002          |   | -          |   | -      |   | -       |   | -            |   | -              |          | (1,374,107)         |          | (1,374,107)
|                                                       |   |            |   |        |   |         |   |              |   |                |          |                     |          |            
|BALANCE AT DECEMBER 31, 2002                           |   | 16,048,000 |   | 16,048 |   | 788,072 |   | -            |   | (5,205)        |          | (1,374,257)         |          | (575,342)  
|                                                       |   |            |   |        |   |         |   |              |   |                |          |                     |          |            
|Net loss for the nine months ending September 30, 2003 | - |            | - |        | - |         | - |              | - |                | (73,690) |                     | (73,690)
|                                                       |   |            |   |        |   |         |   |              |   |                |          |                     |          |            
|BALANCE AT SEPTEMBER 30, 2003                          |   | 16,048,000 | $ | 16,048 | $ | 788,072 | $ | -            | $ | (5,205)        | $        | (1,447,947)         | $        | (649,032)  







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



F-3





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PR SPECIALISTS, INC. AND SUBSIDIARIES

(A Development Stage Company)

CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE NINE MONTHS ENDING SEPTEMBER 30, 2003 AND 2002





|                                                                                            |   |                 |   |                    |   |                   
|------------------------------------------------------------------------------------------- | - | --------------- | - | ------------------ | - | ------------------
|                                                                                            |   |                 |   | For the            |   | For the           
|                                                                                            |   | Cumulative      |   | Nine Months Ending |   | Nine Months Ending
|                                                                                            |   | Since Inception |   | September 30, 2003 |   | September 30, 2002
|CASH FLOWS FROM OPERATING ACTIVITIES                                                        |   |                 |   |                    |   |                   
|Net loss                                                                                    | $ | (1,447,947)     | $ | (73,690)           | $ | (938,154)         
|Adjustment to reconcile net loss to net cash                                                |   |                 |   |                    |   |                   
|provided by (used in) operating activities                                                  |   |                 |   |                    |   |                   
|Depreciation expense                                                                        |   | 16,348          |   | -                  |   | 18,215            
|Stock based consulting services                                                             |   | 41,295          |   | -                  |   | 12,450            
|Services contributed by employee                                                            |   | 5,328           |   | -                  |   | -                 
|Amortization of prepaid expenses received in acquisition
                     of subsidiary |   | 15,999          |   | -                  |   | 15,999            
|Loss on settlement of liabilities                                                           |   | 199,500         |   | -                  |   | -                 
|Loss on disposition of equipment                                                            |   | 40,929          |   | -                  |   | -                 
|Changes in operating assets and liabilities:                                                |   |                 |   |                    |   |                   
|(Increase) decrease in prepaid expenses                                                     |   | 12,604          |   | -                  |   | (1,965)           
|Increase in accounts payable and accrued expenses                                           |   | 642,907         |   | 73,690             |   | 454,663           
|                                                                                            |   |                 |   |                    |   |                   
|Net cash used in operating activities                                                       |   | (473,037)       |   | -                  |   | (438,792)         
|                                                                                            |   |                 |   |                    |   |                   
|CASH FLOWS FROM INVESTING ACTIVITIES                                                        |   |                 |   |                    |   |                   
|Cash received in acquisition of subsidiary, net of liabilities                              |   | 24,897          |   | -                  |   | 24,897            
|Deposits                                                                                    |   | (22,890)        |   | -                  |   | (22,890)          
|Acquisition of property and equipment                                                       |   | (168,497)       |   | -                  |   | (168,497)         
|                                                                                            |   |                 |   |                    |   |                   
|Net cash used in investing activities                                                       |   | (166,490)       |   | -                  |   | (166,490)         
|                                                                                            |   |                 |   |                    |   |                   
|CASH FLOWS FROM FINANCING ACTIVITIES                                                        |   |                 |   |                    |   |                   
|Advances from stockholders                                                                  |   | 176,700         |   | -                  |   | 162,158           
|Proceeds from issuance of common stock                                                      |   | 462,827         |   | -                  |   | 462,827           
|                                                                                            |   |                 |   |                    |   |                   
|Net cash provided by financing activities                                                   |   | 639,527         |   | -                  |   | 624,985           
|                                                                                            |   |                 |   |                    |   |                   
|NET INCREASE IN CASH                                                                        |   | -               |   | -                  |   | 19,703            
|                                                                                            |   |                 |   |                    |   |                   
|CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD                                             |   | -               |   | -                  |   | -                 
|                                                                                            |   |                 |   |                    |   |                   
|CASH AND CASH EQUIVALENTS - END OF PERIOD                                                   | $ | -               | $ | -                  | $ | 19,703            
|                                                                                            |   |                 |   |                    |   |                   
|SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION                                           |   |                 |   |                    |   |                   
|                                                                                            |   |                 |   |                    |   |                   
|CASH PAID DURING THE PERIOD FOR:                                                            |   |                 |   |                    |   |                   
|Interest                                                                                    | $ | -               | $ | -                  | $ | -                 
|                                                                                            |   |                 |   |                    |   |                   
|SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING                                               |   |                 |   |                    |   |                   
|AND FINANCING ACTIVITIES                                                                    |   |                 |   |                    |   |                   
|                                                                                            |   |                 |   |                    |   |                   
|Common stock issued to settle liabilities                                                   | $ | 33,000          | $ | -                  | $ | 33,000            
|                                                                                            |   |                 |   |                    |   |                   
|Fixed assets disposed of to settle liabilities                                              | $ | 106,200         | $ | -                  | $ | 106,200           



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



F-4



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PR SPECIALISTS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2003







NOTE 1  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES



Nature of the Business

PR Specialists, Inc. (the Company) was incorporated under the laws of the state of Delaware on March 21, 2000.  On May 1, 2002, The Company entered into an Agreement and Plan of Share Exchange (the Agreement) with Servitrust Corp., a Florida corporation formed on December 21, 2001 for the purpose of creating a web-based fulfillment-servicing enterprise to provide communications, marketing, CRM services, collections as well as high level inbound and outbound call center capabilities to financial institutions and the business industry throughout the world.  Pursuant to the Agreement, the Company acquired all of the outstanding capital stock of Servitrust in exchange for 10,000,000 shares of its common stock (see Note 2).



In addition, the president and another shareholder each previously entered into an option agreement with certain shareholders of Servitrust whereby the Servitrust shareholders will have the opportunity (over a period of approximately nine months) to (i) acquire from the president up to 3,000,000 shares of the common stock he  currently owns in the Company for a price of $0.10 per share; and (ii) acquire up to 1,350,000 shares of the common stock that another one of the Companys stockholders owns for a price of $0.10 per share.



Principles of Consolidation

The accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries.  All significant inter-company transactions and balances have been eliminated in consolidation.



Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying disclosures.  Although these estimates are based on managements best knowledge of current events and actions the Company may undertake in the future, actual results could differ from the estimates.



Cash Equivalents

For the purposes of the statement of cash flows, the Company considers all highly liquid instruments with maturities of three months or less at the time of purchase to be cash equivalents.



Concentration of Credit Risk

Certain financial instruments potentially subject the Company to concentrations of credit risk.  These financial instruments consist primarily of cash and accounts receivable.  The Company places its temporary cash investments with high credit quality financial institutions to limit its credit exposure.  Concentrations of credit risk with respect to accounts receivables are limited since the Company performs ongoing credit evaluations of its customers financial condition and due to the generally short payment terms.





F-5



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PR SPECIALISTS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2003





NOTE 1  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)



Property and Equipment

Property and equipment are stated at cost.  A purchase of property and equipment is capitalized if it is valued at $500 or more and has an estimated useful life of at least one year.  Depreciation is principally provided by use of the straight-line method over the estimated useful lives of the assets, as follows:  office equipment, 5 years; and computers, 5 years.



Revenue Recognition

In accordance with the SECs Staff Accounting Bulletin No. 104 (SAB 104) Revenue Recognition, the Company recognizes revenue when persuasive evidence of a customer or distributor arrangement exists or acceptance occurs, receipt of goods by customer occurs, the price is fixed or determinable, and the sales revenues are considered collectible.  Subject to these criteria the Company recognizes revenue at the time compounds are shipped to the customer.



Fair Value of Financial Instruments

The Companys financial instruments consist of cash, accounts payable and accrued expenses.  The carrying values of cash, accounts payable and accrued expenses approximate fair value because of their short maturities.



Income Taxes

The Company follows SFAS 109 Accounting for Income Taxes, which requires an asset and liability approach to financial accounting and reporting for income taxes.  Deferred income tax assets and liabilities are computed annually for temporary differences between the financial statement and tax bases of assets and liabilities that will result in taxable or deductible amounts in the future based on enacted tax laws and rates applicable to the periods in which differences are expected to affect taxable income.  Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized.  Income tax expense is the tax payable or refundable for the period plus or minus the change during the period in deferred tax assets and liabilities.



Loss Per Share

The Company follows SFAS 128 Earnings Per Share resulting in the presentation of basic and diluted earnings (loss) per share.  Because the Company reported a net loss in 2002 and 2001, common stock equivalents, including stock options and warrants were anti-dilutive; therefore, the amounts reported for basic and diluted loss per share were the same.



Recoverability of Long Lived Assets

The Company follows SFAS No. 144 Accounting for the Impairment or Disposal of Long-Lived Assets (Statement 144).  Long-lived assets to be held and used are reviewed for impairment whenever events or changes in circumstances indicate that the related carrying amount may not be recoverable.  When required, impairment losses on assets to be held and used are recognized based on the excess of the assets carrying amount.





F-6



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PR SPECIALISTS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2003





NOTE 1  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)



Comprehensive Income

The Company follows SFAS No. 130, Reporting Comprehensive Income.  Comprehensive income is a more inclusive financial reporting methodology that includes disclosure of certain financial information that historically has not been recognized in the calculation of net income.  Since the Company has no items of other comprehensive income, comprehensive income (loss) is equal to net income (loss).



Recently Issued Accounting Pronouncements

In June 2006, the Financial Accounting Standards Board (FASB) issued Interpretation No. 48 (FIN 48), Accounting for Uncertainty in Income Taxes.  FIN-48 prescribes detailed guidance for the financial statement recognition, measurement and disclosure of uncertain tax positions recognized in an enterprises financial statements in accordance with FASB Statement No. 109, Accounting for Income Taxes.  Tax positions must meet a more-likely-than-not recognition threshold at the effective date to be recognized upon the adoption of FIN 48 and in subsequent periods.  FIN 48 will be effective for fiscal years beginning after December 15, 2006 (our calendar year 2007) and the provisions of FIN 48 will be applied to all tax positions under Statement No. 109 upon initial adoption.  The cumulative effect of applying the provisions of this interpretation will be reported as an adjustment to the opening balance of retained earnings for that fiscal year.  The Company is currently evaluating the potential impact of FIN 48 on its financial statements.



In September 2006, the SEC issued Staff Accounting Bulletin No. 108 (SAB No. 108).  SAB No. 108 addresses the process and diversity in practice of quantifying financial statement misstatements resulting in the potential build up of improper amounts on the balance sheet.  We will be required to adopt the provisions of SAB No. 108 in fiscal 2007.  We currently do no believe that the adoption of SAB No. 108 will have a material impact on our financial statements.



During September 2006, the Financial Accounting Standards Board (FASB) issued SFAS No. 157, Fair Value Measurements (SFAS 157), which is effective for fiscal years beginning after November 15, 2007 with earlier adoption encouraged. SFAS 157 defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles, and expands disclosures about fair value measurements. In February 2008, the FASB issued FASB Staff Position FAS 157-2, Effective Date of FASB Statement No. 157, which delayed the effective date of SFAS 157 for all non-financial assets and liabilities, except those that are recognized or disclosed at fair value in the financial statements on a recurring basis, until January 1, 2009.   The Company adopted SFAS 157 on January 1, 2008 for all financial assets and liabilities, but the implementation did not require additional disclosures or have a significant impact on the Company's financial statements.  The Company has not yet determined the impact the implementation of SFAS 157 will have on the Companys non-financial assets and liabilities which are not recognized or disclosed on a recurring basis.  However, the Company does not anticipate that the full adoption of SFAS 157 will significantly impact their consolidated financial statements.



During February 2007, the FASB issued SFAS No. 159, The Fair Value Option for Financial Assets and Financial Liabilitiesincluding an amendment of FASB Statement No. 115 (SFAS 159), which permits entities to choose to measure many financial instruments and certain other items at fair value. The objective of SFAS 159 is to improve financial reporting by providing entities with the opportunity to mitigate volatility in reported earnings caused by measuring related assets and liabilities differently without having to apply complex hedge accounting provisions. The Company has adopted SFAS 159 on January 1, 2008 and has elected not to measure any additional financial assets, liabilities or other items at fair value.



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PR SPECIALISTS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2003







NOTE 1  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)



Recently Issued Accounting Pronouncements

In December 2007, the FASB issued SFAS No. 141 (revised 2007), Business Combinations (SFAS 141R). SFAS 141R establishes principles and requirements for how an acquirer recognizes and measures in its financial statements the identifiable assets acquired, the liabilities assumed, any noncontrolling interest in the acquiree and the goodwill acquired. SFAS 141R also establishes disclosure requirements to enable the evaluation of the nature and financial effects of the business combination. This statement is effective for the Company beginning January 1, 2009 and will change the accounting for business combinations on a prospective basis.



In December 2007, the FASB issued SFAS No. 160, Noncontrolling Interests in Consolidated Financial Statementsan amendment of Accounting Research Bulletin No. 51 (SFAS 160). SFAS 160 establishes accounting and reporting standards for ownership interests in subsidiaries held by parties other than the parent, the amount of consolidated net income attributable to the parent and to the noncontrolling interest, changes in a parents ownership interest, and the valuation of retained noncontrolling equity investments when a subsidiary is deconsolidated. SFAS 160 also establishes disclosure requirements that clearly identify and distinguish between the interests of the parent and the interests of the noncontrolling owners. This statement is effective for the Company beginning January 1, 2009.   This statement is not currently applicable since it has no majority-owned subsidiaries.



In March 2008, the FASB issued Statement No. 161, Disclosures about Derivative Instruments and Hedging Activities (SFAS 161), which is effective January 1, 2009. SFAS 161 requires enhanced disclosures about derivative instruments and hedging activities to allow for a better understanding of their effects on an entitys financial position, financial performance, and cash flows. Among other things, SFAS 161 requires disclosures of the fair values of derivative instruments and associated gains and losses in a tabular formant.  SFAS 161 is not currently applicable to the Company since the Company does not have derivative investments of hedging activity.



In May 2008, the FASB issued Statement of Financial Accounting Standards No. 162, The Hierarchyof Generally Accepted Accounting Principles(FAS 162"). This Standard identifies the sources of accounting principles and the framework for selecting the principles to be used in the preparation of financial statements of nongovernmental entities that are presented in conformity with generally accepted accounting principles. FAS 162 directs thehierarchy to the entity, rather than the independent auditors, as the entity is responsible for selecting accounting principles for financial statements that are presented in conformity with generally accepted accounting principles. The Standard is effective 60 days following SEC approval of the Public Company Accounting Oversight Board amendments to remove the hierarchy of generally accepted accounting principles from the auditing standards. FAS 162 is not expected to have an impact on the financial statements.



In April 2008, the FASB issued FASB Staff Position (FSP) FAS 142-3, Determination of the Useful Life of Intangible Assets, which amends the factors that should be considered in developing renewal or extension assumptions used to determine the useful life of a recognized intangible asset under FASB Statement No. 142, Goodwill and Other Intangible Assets.This Staff Position is effective for financial statements issued for fiscal years beginning after December 15, 2008, and interim periods within those fiscal years. Early adoption is prohibited. Application of this FSP is not expected to have a significant impact on the financial statements.



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PR SPECIALISTS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2003







NOTE 1  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)



Recently Issued Accounting Pronouncements

In June 2008, the FASB issued FSP EITF 03-6-1, Determining Whether Instruments Granted in Share-Based Payment Transactions are Participating Securities. This FSP provides that unvested share-based payment awards that contain nonforfeitable rights to dividends or dividend equivalents (whether paid or unpaid) are participating securities and shall be included in the computation of earnings per share pursuant to the two-class method. The Company does not currently have any share-based awards that would qualify as participating securities. Therefore, application of this FSP is not expected to have an effect on the Company's financial reporting.



In May 2008, the FASB issued FASB Staff Position (FSP) APB 14-1, Accounting for Convertible Debt That May Be Settled in Cash upon Conversion (Including Partial Cash Settlement)("FSP 14-1"). FSP 14-1 will be effective for financial statements issued for fiscal years beginning after December 15, 2008. The FSP includes guidance that convertible debt instruments that may be settled in cash upon conversion should be separated between the liability and equity components, with each component being accounted for in a manner that will reflect the entity's nonconvertible debt borrowing rate when interest costs are recognized in subsequent periods. This FSP is not currently applicable to the Company.



In October 2008, the FASB issued FAS Staff Position (FSP) 157-3, "Determining the Fair Value of a Financial Asset When the Market for That Asset Is Not Active." This is effective upon issuance, including prior periods for which financial statements have not been issued. This FSP applies to financial assets within the scope of accounting pronouncements that require or permit fair value measurements in accordance with Statement 157.This FSP clarifies the application of Statement 157 in a market that is not active and provides an example to illustrate key considerations in determining the fair value of a financial asset when the market for that financial asset is not active. FSP 1573 did not have an impact on the companys financial statements.





NOTE 2  ADVANCES FROM STOCKHOLDERS



Advances from stockholders consist of the following:



|                           |   |                    |   |                  
|-------------------------- | - | ------------------ | - | -----------------
|                           |   | September 30, 2003 |   | December 31, 2002
|                           |   |                    |   |                  
|Advances from stockholders | $ | 176,700            | $ | 176,700          





NOTE 3  COMMON STOCK



Reverse Acquisition and Recapitalization

Under a share exchange agreement (the Agreement) entered into on May 1, 2002, the Company acquired 100% of the issued and outstanding common stock of Servitrust Corp. (SC) in exchange for 10,000,000 shares of its common stock.  Immediately after the acquisition, there were 15,323,000 shares outstanding.  During 2002, the Company issued 5,323,000 common shares for $53,500 of net assets acquired as part of the business combination (recapitalization) referred to above.  Generally accepted accounting principles in the U.S. require that the Company whose shareholders retain a majority interest in a business combination be treated as the acquirer for accounting purposes.  As a result, the exchange was treated as a reverse acquisition and recapitalization of the Company and the consolidated financial statements include the balance sheet of the accounting acquirer and the acquiree at historical costs as of June 30, 2002 and the statements of operations include the results of operations of the accounting acquirer for all periods presented and the results of operations of the acquiree from the date of reverse acquisition and recapitalization



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PR SPECIALISTS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2003







Common Stock

During December 2001, the Company issued 8,270,000 shares of its common stock to its founders valued at $827, fair value.



During 2002, the Company issued 2,040,000 shares of its common stock for $462,000 in proceeds.



During 2002, the Company went through a recapitalization and issued an additional 5,323,000 shares of its common stock for $53,500.



During 2002, the Company issued 250,000 shares of its common stock for consulting services valued at $194,760, fair value.  Stock based consulting fees reflected in the statement of operations total $41,295 and the related deferred stock based compensation at December 31, 2002 totals $5,205.



During 2002, the Company issued 165,000 shares of its common stock for payment of a vendor payable, valued at $82,500, fair value.



During 2002, an employee contributed services to the Company valued at $5,328, fair value.



NOTE 4  STOCK BASED CONSULTING FEES



On February 8, 2002, the Company entered into a one-year consulting agreement with Shoreliner Capital Limited Partnership to assist in its corporate development, financial structure and financial strategies.  The agreement required the Company to issue 250,000 common shares as consideration for services and stated that the consultant would be entitled to the aforementioned consideration in the event the agreement was terminated prior to the twelve month term.  The Company recorded a deferred asset and liability to issue stock of $50,000 on February 8, 2002 based on the value of the common stock on said date of $0.20 per share.  The Company issued 250,000 common shares on June 17, 2002 at which date the price of the stock was $0.80 per share.  Accordingly, the Company recorded a $150,000 loss on settlement of liabilities upon the issuance of the shares to reflect the excess value of the shares on June 17, 2002 versus the value as of the February 8, 2002 obligation date.  For the nine months ending September 30, 2003 and 2002, stock based consulting fees reflected in the statement of operations total $0 and $12,450 and the related deferred stock based compensation at September 30, 2003 totals $5,205.  Stock based consulting fees related to this transaction of $3,500 were recorded prior to the May 1, 2002 share exchange agreement.



NOTE 5  INCOME TAXES



There is no income tax benefit for the losses for the nine months ending September 30, 2003 and 2002 since management has determined that the realization of the net deferred tax asset is not assured and has created a valuation allowance for the entire amount of such benefits.



The Companys policy is to record interest and penalties associated with unrecognized tax benefits as additional income taxes in the statement of operations.  As of January 1, 2003, the Company had no unrecognized tax benefits, or any tax related interest or penalties.  There were no changes in the Companys unrecognized tax benefits during the nine months ending September 30, 2003.  The Company did not recognize any interest or penalties during 2003 related to unrecognized tax benefits.







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Item 2.

Managements Discussion and Analysis of Financial Condition and Results of Operations.



The following discussion Managements Discussion and Analysis of Financial Condition and Results of Operations contains forward-looking statements. The words anticipate, believe, expect, plan, intend, estimate, project, will, could, may and similar expressions are intended to identify forward-looking statements. Such statements reflect our current views with respect to future events and financial performance and involve risks and uncertainties. Should one or more risks or uncertainties occur, or should underlying assumptions prove incorrect, actual results may vary materially and adversely from those anticipated, believed, expected, planned, intended, estimated, projected or otherwise indicated. We caution you not to place undue reliance on these forward-looking statements, which we have made as of the date of this Quarterly Report on Form 10-Q.



The following is qualified by reference to, and should be read in conjunction with our financial statements (Financial Statements), and the notes thereto, included elsewhere in this Form 10-Q, as well as the discussion hereunder Managements Discussion and Analysis of Financial Condition and Results of Operations.



Our Business Development



PR Specialists, Inc. (the Company or PR Specialists) was incorporated in March 2000 as a publicity services firm specializing in small and medium size businesses. We offered a range of services to deliver publicity  solutions  designed to help clients  promote their Internet  businesses, including strategy consulting; publicity  plans, press  releases, post-release  support, press  kits, editorial  contact  database, editorial  calendars, new product  announcements, product reviews, trade show support, clipping  services, and web site  promotion.



Due to a lack of revenue and capital constraints, we were unable to continue with our publicity services business plan and on April 11, 2002, we entered into an Agreement and Plan of Share Exchange with Servitrust Corp., a Florida corporation (Servitrust), which provided for our Company to acquire all of the outstanding capital stock of Servitrust in exchange for 10,000,000 shares of our Company's common stock. On May 1, 2002, we completed the acquisition of 100% of the issued and outstanding shares of Servitrust and Servitrust became our wholly owned subsidiary. For accounting purposes, Servitrust was treated as the acquirer, and the share exchange was treated as a reverse acquisition and recapitalization.



Upon reorganizing with Servitrust, we changed our plan of business and we became a development stage, low cost, fulfillment-servicing corporation that provided communication, asset based services and collections, as well as high level in-bound and out-bound call center capabilities to financial institutions and other businesses.



Due to a lack of revenue and capital constraints, we were unable to continue with this business plan, and in December 2002, we ultimately ceased our business activities and became dormant. During that dormant period, we incurred losses and did not have any revenues to cover our incurred expenses.



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In July 2006, we issued 440,000 shares of our common stock to certain of our creditors in exchange for their waiving accumulated principal liabilities we owed to them in excess of approximately $220,000, along with all interest, penalties and costs associated therewith. Subsequently, during 2006 through 2007, pursuant to a private offering, we issued 600,000 shares of our common stock in exchange for $90,000 cash. In February 2007, we dissolved Servitrust, and all of our other subsidiary companies pursuant to the Florida Business Corporation Act.



Presently, PR Specialists conducts no business operations. We are in the process of bringing our Companys periodic and other filings current with the Securities and Exchange Commission. Subsequently, we intend to investigate opportunities to effect a merger, exchange of capital stock, asset acquisition, or other similar business combination (a Business Combination) with an operating or development stage business (Target Business), which desires to employ the Company to become a reporting corporation under the Securities Exchange Act of 1934.



We do not have a sufficient amount of cash in the bank or an established source of revenue needed to cover the costs of operations, which would allow us to continue as a going concern. Our financial statements have been prepared using generally accepted accounting principles applicable to a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. Our ability to meet those obligations and continue as a going concern is dependent upon us raising new capital through debt or equity financing and issuing equity securities to complete a Business Combination with a Target Business. There are no agreements or understandings of any kind with respect to any loans from officers or directors of the Company on behalf of the Company. In the event we do not obtain adequate funds to support normal operations prior to completing a Business Combination with a Target Business, we may cease operations and a Business Combination may not occur. With the exception of certain professional fees, and costs related to a Business Combination, we expect that we will incur minimal operating costs over the next 12 months.



Significant Accounting Policies



Our financial statements have been prepared in conformity with U.S. generally accepted accounting principles. As a result, some accounting policies have a significant impact on amounts reported in these financial statements. A summary of those significant accounting policies can be found in the notes to the Financial Statements.



Reorganization



On May 1, 2002, the Company completed the acquisition of 100% of the issued and outstanding shares of Servitrust Corp. (Servitrust), which became our Companys wholly owned operating subsidiary.  For accounting purposes, Servitrust was treated as the acquirer, and the share exchange was treated as a reverse acquisition and recapitalization of the Company and the consolidated financial statements include the balance sheet of the accounting acquirer and the acquiree at historical costs as of June 30, 2002 and the statements of operations include the



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results of operations of the accounting acquirer for all periods presented and the results of operations of the acquiree from the date of reverse acquisition and recapitalization.



Results of Operations



Comparison of Three Months Ending September 30, 2003 to Three Months Ended September 30, 2002



Revenues



We generated $0 and $134,085 in revenues from operations during the three months ending September 30, 2003 and 2002, respectively, for a decrease of $134,085.  Our revenue decreased because our operations ceased in November 2002.



Operating Expenses



Our operating expenses were $24,718 and $746,829 for the three months ended September 30, 2003 and 2002, respectively, for a decrease of $722,111.  This decrease in operating expenses was due to our operations ceasing in November 2002.



Net Loss



Net loss was $24,718 and $612,744 for the three months ended September 30, 2003 and 2002, respectively, for a decrease of $588,026, resulting from the ceasing operations in November 2002.



Comparison of Nine Months Ending September 30, 2003 to Nine Months Ending September 30, 2002



Revenues



We generated $0 and $165,868 in revenues from operations during the nine months ending September 30, 2003 and 2002, respectively, for a decrease of $165,868.  Our revenue decreased because our operations ceased in November 2002.



Operating Expenses



Our operating expenses were $73,690 and $1,104,022 for the nine months ended September 30, 2003 and 2002, respectively, for an decrease of $1,030,332.  This decrease in operating expenses was due to our operations ceasing in November 2002.



Net Loss



Net loss was $73,690 and $938,154 for the nine months ended September 30, 2003 and 2002, respectively, for a decrease of $864,464, resulting from the ceasing operations in November 2002.



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Liquidity and Capital Resources



At September 30, 2003, we had a zero cash balance, our assets totaled $22,890, our liabilities totaled $671,922, and we had a stockholders deficit of $649,032. We have been, and anticipate that we will continue to be, limited in terms of our capital resources. Our cash position is insufficient to meet our continuing anticipated expenses, accordingly, we will be required to raise significant additional capital to sustain operations and further implement our business plan.



Analysis of Cash Flow



For the Nine Months Ending September 30, 2003



We generated no revenues from operations for nine months ending September 30, 2003 because our operations ceased in November 2002.



For the Nine Months Ending September 30, 2002



Net cash used in operating activities was $438,792, primarily consisting of a net loss of $938,154 and an increase in prepaid expenses of $1,965, offset by an increase in accounts payable of $454,663 and stock based consulting services of $12,450.



Net cash used in investing activities was $166,490, primarily consisting of the acquisition of property and equipment of $168,497 and deposits of $22,890, offset by cash received in acquisition of subsidiary of $24,897.



Net cash provided by financing activities was $624,985, consisting of $462,827 of proceeds from the issuance of common stock and advances from stockholders of $162,158.



Significant Trends, Developments and Uncertainties





Due to a lack of revenue and capital constraints, in December 2002 we ultimately ceased our business activities and became dormant. During that dormant period, we incurred losses and did not have any revenues to cover our incurred expenses. In February 2007, we dissolved Servitrust, and all of our other subsidiary companies pursuant to the Florida Business Corporation Act. Presently, PR Specialists conducts no business operations. We are in the process of bringing our Companys periodic and other filings current with the Securities and Exchange Commission.



Item 3.

Quantitative and Qualitative Disclosures about Market Risk.



Not applicable.





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Item 4.

Controls and Procedures.



As of the date this report is filed, an evaluation was performed under the supervision and with the participation of the Company's sole principal executive officer and financial officer of the effectiveness of the design and operation of the Companys disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this report. During that period, our Company experienced significant capital constraints, and we ultimately ceased our business activities and became dormant. During the period covered by this report, our Company was unable to comply with its Exchange Act reporting because no accounting work was completed, no financial statements were prepared, and no audits were obtained. The evaluation revealed to the Company's principal executive officer and financial officer that, as a result of those circumstances, the design and operation of the Companys disclosure controls and procedures were not effective as of the end of the period covered by this report, and that the design and operation of the Companys disclosure controls and procedures remain ineffective as of the date of this report.



Management has implemented a process to monitor and assess both the design and operating effectiveness of internal control over financial reporting. All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation.



There has been no change in our internal control over financial reporting during our last fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.



PART II - OTHER INFORMATION



Item 1.

Legal Proceedings.



Not applicable.



Item 1A.

Risk Factors.



Not applicable.



Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds.



Not applicable.



Item 3.

Defaults Upon Senior Securities.



Not applicable.





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Item 4.

Submission of Matters to a Vote of Security Holders.



Not applicable.



Item 5.

Other Information.



Not applicable.

Item 6.

Exhibits



The following exhibits are included herein:



Exhibit No.

Description of Exhibit



31.1

Certification pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended, executed by the Principal Executive Officer of the Company.



31.2

Certification pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended, executed by the Principal Financial Officer of the Company.



32.1

Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, executed by the Principal Executive Officer of the Company.



32.2

Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, executed by the Principal Financial Officer of the Company.



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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.



PR SPECIALISTS, INC.



Registrant



By:/s/ Lawrence Ruden

Lawrence Ruden, President



Dated: July 28, 2009



By:/s/ Lawrence Ruden

Lawrence Ruden, President



Dated: July 28, 2009



By:/s/ Lawrence Ruden

Lawrence Ruden, Treasurer



Dated: July 28, 2009



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