**U. S. Securities and Exchange Commission**

 

Washington, D. C. 20549 

 

**FORM 10-QSB**

 

**x ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE**

**ACT OF 1934**

 

For the three month period ended March 31, 2006 

 

**o TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE**

**ACT OF 1934**

 

For the transition period from _______ to _______

 

*Commission File No**. -*0-51075 

 

**Autostrada Motors, Inc.**

 

(Name of Small Business Issuer in its Charter)

 

 

| Utah                            | 20-0919460                 |
|---------------------------------|----------------------------|
| (State or Other Jurisdiction of | (I.R.S. Employer I.D. No.) |
| incorporation or organization)  |                       |

 

 

235 West 500 South 

Salt Lake City, Utah 84101  

(Address of Principal Executive Offices) 

 

Issuer’s Telephone Number: (801) 524-9500 

 

**None; not applicable.** 

(Former Name or Former Address, if changed since last Report) 

 

Securities Registered under Section 12(b) of the Exchange Act: None 

Name of Each Exchange on Which Registered: None 

Securities Registered under Section 12(g) of the Exchange Act: $0.001 par value common stock 

 

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 Issuer was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

 

Indicate by check mark whether the Issuer is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Yes o No x

 

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

 

1

 

 

 

**APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY**

**PROCEEDINGS DURING THE PRECEDING FIVE YEARS**

 

Not applicable.

 

**APPLICABLE ONLY TO CORPORATE ISSUERS**

 

Indicate the number of shares outstanding of each of the Issuer’s classes of common equity, as of the latest practicable date: May 09, 2006 – 1,050,000 shares of common stock. 

 

Transitional Small Business Disclosure Format (Check one): Yes o No x

 

**FINANCIAL STATEMENTS**

 

March 31, 2006

**C O N T E N T S**

 

| Condensed Balance Sheets                | 3 |
|-----------------------------------------|---|
| Condensed Statements of Operations      | 5 |
| Statements of Cash Flows                | 6 |
| Notes to Condensed Financial Statements | 7 |

 

 

 

2

 

 

**PART I - FINANCIAL INFORMATION**

 

**Item 1. Financial Statements.**

 

**AUTOSTRADA MOTORS, INC.**

**CONDENSED BALANCE SHEET**

**(Unaudited)**

 

 

|                                          |   | **March 31,**   |    |   |   | **December 31,** |   |
|-----------------------------------------------|--------|-----------------|---------|--------|--------|------------------|--------|
|                                          |   | **2006**        |    |   |   | **2005**         |   |
|                                          |   | **(Unaudited)** |    |   |   | **(Audited)**    |   |
| **ASSETS**                                    |   |            |    |   |   |             |   |   |   |
| Current Assets                                |   |            |    |   |   |             |   |   |   |
| Cash                                          |   | $               | 103,275 |   |   |             | $      | 43,644 |   |
| Accounts Receivable                           |   |            | 5,819   |   |   |             |   | 42,815 |   |
| Financing Receivables                         |   |            | 51,825  |   |   |             |   | 39,255 |   |
| Employee Advances                             |   |            | 3,242   |   |   |             |   | 2,184 |   |
| Prepaid Expenses                              |   |            | 900     |   |   |             |   | 900 |   |
| Current Portion Prepaid Consulting            |   |            | —  |   |   |             |   | 4,688 |   |
| Inventory                                     |   |            | 592,405 |   |   |             |   | 540,791 |   |
| Total Current Assets                          |   |            | 757,466 |   |   |             |   | 674,277 |   |
|                                          |   |            |    |   |   |             |   |   |   |
| Property, Plant, & Equipment [Net]        |   |            | 62,477  |   |   |             |   | 66,855 |   |
|                                          |   |            |    |   |   |             |   |   |   |
| Other Assets                                  |   |            |    |   |   |             |   |   |   |
| Non-current Financing Receivables             |   |            | 15,954  |   |   |             |   | 13,284 |   |
| Deposits                                      |   |            | 2,600   |   |   |             |   | 2,600 |   |
| Deferred Tax Asset                            |   |            | 8,133   |   |   |             |   | 8,133 |   |
| Total Other Assets                            |   |            | 26,687  |   |   |             |   | 24,017 |   |
|                                          |   |            |    |   |   |             |   |   |   |
| **Total Assets**                              |   | $               | 846,630 |   |   |             | $      | 765,149 |   |
|                                          |   |            |    |   |   |             |   |   |   |
| **LIABILITIES AND STOCKHOLDERS’ EQUITY** |   |            |    |   |   |             |   |   |   |
| Liabilities                                   |   |            |    |   |   |             |   |   |   |
| Current Liabilities                           |   |            |    |   |   |             |   |   |   |
| Accounts Payable                              |   | $               | 341,179 |   |   |             | $      | 269,214 |   |
| Sales Tax Payable                             |   |            | 45,567  |   |   |             |   | 30,865 |   |
| Taxes Payable                                 |   |            | 1,453   |   |   |             |   | 1,453 |   |
| Line of Credit                                |   |            | 239,630 |   |   |             |   | 207,589 |   |
| Notes Payable to Related Parties              |   |            | 38,000  |   |   |             |   | 39,226 |   |
| Total Current Liabilities                     |   |            | 665,829 |   |   |             |   | 548,347 |   |
|                                          |   |            |    |   |   |             |   |   |   |
| Notes Payable Related Party                   |   |            | 101,500 |   |   |             |   | 126,500 |   |
|                                          |   |            |    |   |   |             |   |   |   |
| **Total Liabilities**                         |   |            | 767,329 |   |   |             |   | 674,847 |   |
|                                          |   |            |    |   |   |             |   |   |   |
| **Stockholders’ Equity**                 |   |            |    |   |   |             |   |   |   |

 

 

3

 

 

 

 

| Preferred stock: $.001 par value,                   |   |   |    |   |   |   |   |    |   |
|-----------------------------------------------------|--------|--------|---------|--------|--------|--------|--------|---------|--------|
| 5,000,000 shares authorized,                        |   |   |    |   |   |   |   |    |   |
| no issued or outstanding                            |   | $      | —  |   |   |   | $      | —  |   |
| Common stock, $.001 par value,                      |   |   |    |   |   |   |   |    |   |
| 70,000,000 shares authorized,                       |   |   |    |   |   |   |   |    |   |
| 1,050,000 issued and outstanding                    |   |   | 1,050   |   |   |   |   | 1,050   |   |
| Paid in Excess of par value                         |   |   | 115,762 |   |   |   |   | 115,762 |   |
| Accumulated deficit                                 |   |   | (37,511 | )      |   |   |   | (26,510 | )      |
| **Total Stockholders’ Equity**                 |   |   | 79,301  |   |   |   |   | 90,302  |   |
| **Total Liabilities and Stockholders’ Equity** |   | $      | 846,630 |   |   |   | $      | 765,149 |   |

 

 

See accompanying notes.

****

 

4

 

 

**AUTOSTRADA MOTORS, INC.**

**CONDENSED STATEMENTS OF OPERATIONS**

**For the Three Month Periods Ended March 31, 2006 and 2005**

**(Unaudited)**

 

 

|                                                    |   | **Three Months** |      |   |   | **Three Months** |   |
|---------------------------------------------------------|--------|------------------|-----------|--------|--------|------------------|--------|
|                                                    |   | **Ended March**  |      |   |   | **Ended March**  |   |
|                                                    |   | **31, 2006**     |      |   |   | **31, 2005**     |   |
|                                                    |   |             |      |   |   |             |   |   |   |
| Revenues                                                |   | $                | 1,377,433 |   |   |             | $      | 1,241,040 |   |
|                                                    |   |             |      |   |   |             |   |   |   |
| Cost of Goods Sold                                      |   |             | 1,276,501 |   |   |             |   | 1,161,044 |   |
|                                                    |   |             |      |   |   |             |   |   |   |
| Gross Profit (Loss)                                     |   |             | 100,932   |   |   |             |   | 79,996 |   |
|                                                    |   |             |      |   |   |             |   |   |   |
| Advertising                                             |   |             | 6,693     |   |   |             |   | 3,513 |   |
| Depreciation                                            |   |             | 4,645     |   |   |             |   | 3,546 |   |
| General & Administrative Expenses                   |   |             | 91,849    |   |   |             |   | 72,408 |   |
|                                                    |   |             |      |   |   |             |   |   |   |
| Operating Income (Loss)                                 |   |             | (2,255    | )      |   |             |   | 529 |   |
|                                                    |   |             |      |   |   |             |   |   |   |
| Other Income and Expense                                |   |             |      |   |   |             |   |   |   |
|                                                    |   |             |      |   |   |             |   |   |   |
| Interest Income                                         |   |             | 1,411     |   |   |             |   | 143 |   |
| Interest Expense                                        |   |             | (10,157   | )      |   |             |   | (6,734 | ) |
|                                                    |   |             |      |   |   |             |   |   |   |
| Net Income (Loss) Before Taxes                          |   |             | (11,001   | )      |   |             |   | (6,062 | ) |
|                                                    |   |             |      |   |   |             |   |   |   |
| Current Year Provision for Income & Franchise Taxes |   |             | —    |   |   |             |   | — |   |
|                                                    |   |             |      |   |   |             |   |   |   |
| Net Income (Loss)                                       |   | $                | (11,001   | )      |   |             | $      | (6,062 | ) |
|                                                    |   |             |      |   |   |             |   |   |   |
| Loss Per Share                                          |   |             | (0.01     | )      |   |             |   | (0.01 | ) |
|                                                    |   |             |      |   |   |             |   |   |   |
| Weighted Average Shares Outstanding                     |   |             | 1,050,000 |   |   |             |   | 1,050,000 |   |

 

 

 

 

See accompanying notes.

 

 

5

 

 

 

**AUTOSTRADA MOTORS, INC.**

**STATEMENTS OF CASH FLOWS**

**For the Three Month Periods Ended March 31, 2006 and 2005**

**(Unaudited)**

 

 

|                                                 |   |   |   | **For the Three** |   |     |   | **For the Three** |   |
|------------------------------------------------------|--------|--------|--------|-------------------|--------|----------|--------|-------------------|--------|
|                                                 |   |   |   | **Months ended**  |   |     |   | **Months ended**  |   |
|                                                 |   |   |   | **March 31,**     |   |     |   | **March 31,**     |   |
|                                                 |   |   |   | **2006**          |   |     |   | **2005**          |   |
| Cash Flows From Operating Activities:                |   |   |   |              |   |     |   |              |   |   |   |   |   |
| Net Income (Loss)                                    |   |   |   |              | $      | (11,001  | )      |              |   |   | $ | (6,062 | ) |
| Adjustments to reconcile net profit to               |   |   |   |              |   |     |   |              |   |   |   |   |   |
| net cash provided by operating activities:           |   |   |   |              |   |     |   |              |   |   |   |   |   |
| Depreciation Expense                                 |   |   |   |              |   | 4,645    |   |              |   |   |   | 3,546 |   |
| Stock Issued for Services                            |   |   |   |              |   | 4,688    |   |              |   |   |   | — |   |
| (Increase) Decrease in Accounts Receivable           |   |   |   |              |   | 36,996   |   |              |   |   |   | 4,882 |   |
| (Increase) Decrease in Financing Receivables         |   |   |   |              |   | (15,240  | )      |              |   |   |   | (2,869 | ) |
| (Increase) Decrease in Inventory                     |   |   |   |              |   | (51,614  | )      |              |   |   |   | 111,647 |   |
| (Increase) Decrease in Prepaid Expenses              |   |   |   |              |   | —   |   |              |   |   |   | 6,517 |   |
| (Increase) Decrease in Employee Advances             |   |   |   |              |   | (1,058   | )      |              |   |   |   |   |   |
| Increase (decrease) in Accounts Payable              |   |   |   |              |   | 71,965   |   |              |   |   |   | (45,484 | ) |
| Increase (decrease) in Accrued Liabilities           |   |   |   |              |   | 14,702   |   |              |   |   |   | 18,652 |   |
|                                                 |   |   |   |              |   |     |   |              |   |   |   |   |   |
| Net Cash Provided by/(Used for) Operating Activities |   |   |   |              |   | 54,083   |   |              |   |   |   | 90,829 |   |
| Cash Flows From Investing Activities:                |   |   |   |              |   |     |   |              |   |   |   |   |   |
| Purchase of Property, Plant, & Equipment         |   |   |   |              |   | (267     | )      |              |   |   |   | — |   |
|                                                 |   |   |   |              |   |     |   |              |   |   |   |   |   |
| Net Cash Provided by/(Used for) Investing Activities |   |   |   |              |   | (267     | )      |              |   |   |   | — |   |
| Cash Flows From Financing Activities:                |   |   |   |              |   |     |   |              |   |   |   |   |   |
| Repayment on Related Party Notes                     |   |   |   |              |   | (26,226  | )      |              |   |   |   | (7,739 | ) |
| Proceeds from Related Party Notes                    |   |   |   |              |   |     |   |              |   |   |   | — |   |
| Proceeds from Lines of Credit                        |   |   |   |              |   | 521,428  |   |              |   |   |   | — |   |
| Repayment on Lines of Credit                         |   |   |   |              |   | (489,387 | )      |              |   |   |   | (61,702 | ) |
|                                                 |   |   |   |              |   |     |   |              |   |   |   |   |   |
| Net Cash Provided by/(Used for) Financing Activities |   |   |   |              |   | 5,815    |   |              |   |   |   | (69,441 | ) |
| Net Increase in Cash                                 |   |   |   |              |   | 59,631   |   |              |   |   |   | 21,388 |   |
| Beginning Cash Balance                               |   |   |   |              |   | 43,644   |   |              |   |   |   | 17,336 |   |
| Ending Cash Balance                                  |   |   |   |              | $      | 103,275  |   |              |   |   | $ | 38,724 |   |
| Supplemental Discloser of Cash Flow Information:     |   |   |   |              |   |     |   |              |   |   |   |   |   |
| Cash paid for Taxes                                  |   |   |   |              | $      | —   |   |              |   |   | $ | — |   |
| Cash paid during the year for Interest               |   |   |   |              | $      | 10,157   |   |              |   |   | $ | 1,079 |   |

 

 

See accompanying notes.

 

****

 

6

 

 

**AUTOSTRADA MOTORS, INC.**

**NOTES TO CONDENSED FINANCIAL STATEMENTS**

**March 31, 2006**

 

**NOTE 1 – BASIS OF PRESENTATION**

 

The accompanying financial statements have been prepared without audit, pursuant to the rules and regulations of the Security and Exchange Commission. The interim financial statements reflect all adjustments which, in the opinion of management, are necessary to present a fair statement of the results for the period.

 

Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted. It is suggested that these condensed financial statements be read in conjunction with the financial statements and notes thereto included in the Company’s Annual Report on Form 10-KSB for the year ended December 31, 2005. The results of operation for the period ended March 31, 2006 are not necessarily indicative of the operating results for the full years.

 

**NOTE 2 – RELATED PARTY PAYABLES**

 

As of March 31, 2006, the Company has recorded a note payable to a shareholder for $38,000. 

 

As of March 31, 2006, the Company has recorded a note payable to a related party for $101,500. The note requires monthly interest payments of prime plus 2.25 percent. The principal is due at maturity on August 1, 2008. During the period, the Company repaid $25,000, in principal, on the note.

 

During the period, the Company repaid a related party $1,226 for expense paid on behalf of the Company.

 

**NOTE 3 – SUBSEQUENT EVENTS**

 

On April 13, 2006, the Company announced the execution of a Letter of Intent to acquire Water Bank of America, Inc., a Canadian corporation.  The closing is subject to the execution and delivery of a definitive agreement and various other conditions; no assurance can be given that this acquisition will be completed.

 

On April 19, 2006, the Company’s Board of Directors resolved to establish a wholly owned subsidiary by the name of ASDM Holdings, Inc.  The Board of Directors also resolved to transfer all operations, including assets and liabilities, into this subsidiary.

 

On May 3, 2006, the Company’s Board of Directors resolved to affect a forward split, by dividend, of its outstanding common stock on the basis of eight for one.  The forward split is to have an effective date as of May 15, 2006.

 

****

 

7

 

 

**Item 2. Management’s Discussion and Analysis or Plan of Operation.**

 

**Plan of Operation**

 

Our plan of operation for the next 12 months is to continue with our current business operations. However, we have accumulated losses since our inception and have not yet been able to generate consistent profits from operations. Operating capital has been raised through loans from members (while we were an L.L.C.), lines of credit and from our shareholders. 

 

On April 13, 2006, subsequent to the period covered by this report, we announced the execution of a Letter of Intent to acquire Water Bank of America, Inc., a Canadian corporation.  The closing is subject to the execution and delivery of a definitive agreement and various other conditions; no assurance can be given that this acquisition will be completed.  For additional information, please see our Current Report on Form 8-K, as filed with the Securities and Exchange Commission on or about April 13, 2006, which is incorporated herein by this reference.

 

**Results of Operations**

 

Our Company has generated limited profits since inception. We generated a net loss of ($11,001) on Revenue of $1,377,433 for the quarterly period ended March 31, 2006, and a loss of ($6,062) on revenue of $1,241,040 for the quarterly period ended March 31, 2005.  The increase in revenue during the quarterly period ended March 31, 2006, was primarily attributed to two factors:  First, we increased our sales volume for the quarterly period ended March 31, 2006, as compared to the quarterly period ended March 31, 2005; and Second, we have shifted our inventory to focus on newer, higher quality and lower mileage vehicles which has resulted in increased margins. 

 

Revenues increased from $1,241,040 for the quarterly period ended March 31, 2005, to $1,377,433 for the quarterly period ended March 31, 2006. For both the quarterly periods ended March 31, 2006 and 2005, 80% of the vehicles sold were retail or lot generated. Approximately 75% of the sales leads are initiated from AutoTrader.com, Cars.com, and our web site, www.autostradamotors.com. The remaining sales leads come from drive-by traffic (12.5%) and customer referrals (12.5%). All retail sales are finalized at our offices located at the sales lot. 

 

**Liquidity and Capital Resources**

 

During the quarterly periods ended March 31, 2006, and 2005, we had revenues of $1,377,433 and $1,241,040 respectively; there were accounts receivable at March 31, 2006, and March 31, 2005 of $5,819 and $10,786, respectively. Inventory was $592,405 and $199,931, respectively, at March 31, 2006, and March 31, 2005. 

 

Future cash flow from operations is anticipated to cover lease payments and other expenses of operation. Currently, we do not anticipate any additional short term or long term capital requirements. If additional short term or long term capital requirements are necessary, we anticipate approaching members of our management and/or shareholder’s to cover any unanticipated working capital needs. 

 

**Forward-Looking Statements**

 

The foregoing discussion contains forward-looking statements that discuss, among other things, future expectations and projections regarding future developments, operations and financial conditions. All forward-looking statements are based on management’s existing beliefs about present and future events outside of management’s control and on assumptions that may prove to be incorrect. If any underlying assumptions prove incorrect, Autostrada Motors, Inc.’s actual results may vary materially from those anticipated, estimated, projected or intended. 

 

****

 

8

 

 

**Item 3. Controls and Procedures.**

 

An evaluation was performed under the supervision and with the participation of our management, including the President and Treasurer, regarding the effectiveness of the design and operation of the Company’s disclosure controls and procedures within 90 days before the filing date of this quarterly report. Based on that evaluation, the Company’s management, including the President and Treasurer, concluded that the Company’s disclosure controls and procedures are effectively designed to ensure that the information required to be disclosed or filed by us is recorded, processed or summarized, within the time periods specified in the rules and regulations of the Securities and Exchange Commission. There have been no significant changes in our internal controls or in other factors that could significantly affect internal controls subsequent to their evaluation. 

 

**PART II - OTHER INFORMATION**

 

**Item 1. Legal Proceedings.**

 

We are not a party to any pending legal proceeding. To the knowledge of management, no federal, state or local governmental agency is presently contemplating any proceeding against us. No director, executive officer or affiliate of ours or owner of record or beneficially of more than five percent of our common stock is a party adverse to us or has a material interest adverse to us in any proceeding. 

 

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

 

There have been changes in securities for the Quarter Ended March 31, 2006. 

 

**Item 3. Defaults Upon Senior Securities.**

 

None; not applicable. 

 

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

 

None; not applicable. 

 

**Item 5. Other Information.**

 

On April 13, 2006, subsequent to the period covered by this Quarterly Report, we announced the execution of a Letter of Intent to acquire Water Bank of America, Inc., a Canadian corporation.  The closing is subject to the execution and delivery of a definitive agreement and various other conditions; no assurance can be given that this acquisition will be completed.  For additional information, please see our Current Report on Form 8-K, as filed with the Securities and Exchange Commission on or about April 13, 2006, which is incorporated herein by this reference.

 

On April 19, 2006, Subsequent to the period covered by this Quarterly Report, our Board of Directors resolved to establish a wholly owned subsidiary by the name of ASDM Holdings, Inc.  The Board of Directors also resolved to transfer all operations, including assets and liabilities, into this subsidiary.

 

On May 3, 2006, our Board of Directors resolved to effect a forward split, by dividend, of our outstanding common stock on the basis of eight for one.  The forward split is to have an effective date as of May 15, 2006.

 

****

 

9

 

 

**Item 6.Exhibits.**

 

(a) Exhibits

 

**31 302 Certification of Douglas W. Fry**

 

**31.1 302 Certification of Travis T. Jenson**

 

**32 906 Certification**

 

**Unanimous Consent of the Board of Directors of Autostrada Motors, Inc.**

 

(b) Reports on Form 8-K 

 

On or about April 13, 2006, we filed a Current Report on Form 8-K disclosing under Item 7.01 and 9.01 the announcement of the execution of a Letter of Intent to acquire Water Bank of America, Inc., a Canadian corporation.

 

(c) Documents Incorporated by Reference 

 

Form 8-K Current Report as filed on April 13, 2006, concerning the announcement of the execution of a Letter of Intent to acquire Water Bank of America, Inc., a Canadian corporation.

 

**SIGNATURES**

 

In accordance with the requirements of the Exchange Act, the Registrant has caused this Quarterly Report to be signed on its behalf by the undersigned, thereunto duly authorized. 

 

**AUTOSTRADA MOTORS, INC.**

 

| *Date:*** | *05/09/06*** | * * | *By:***  | */s/Douglas W. Fry***                                        |
|-----------|--------------|----------|----------|--------------------------------------------------------------|
| * *  | * *     | * * | * * | *Douglas W. Fry, President and Director***                   |
| * *  | * *     | * * | * * | * *                                                     |
| *Date:*** | *05/09/06*** | * * | *By:***  | */s/Travis T. Jenson***                                      |
| * *  | * *     | * * | * * | *Travis T. Jenson, Secretary, Treasurer, CFO and Director*** |

 

 

 

10