U.S.
SECURITIES AND EXCHANGE COMMISSION


Washington,
D.C. 20549





FORM
10-Q





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





For
the quarterly period ended March 31, 2010





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





For the
transition period from





Commission
File No. 000-52202





FOUR
STAR HOLDINGS, INC.


(Exact
name of small business issuer as specified in its charter)





Florida
            26-1427633(State
      or other jurisdiction of incorporation Or organization)
            (I.R.S.
      Employer Identification No.)





100
Four Star Lane


Odenville, Alabama
35120


(Address
of Principal Executive Offices)





(205) 640-3726


(Issuer’s
telephone number)





Dragon’s
Lair Holdings, Inc.


(Former
name, address and fiscal year, if changed since last report)





Check
whether the issuer (1) has filed all reports required to be filed by Section 13
or 15(d) of the Exchange Act during the preceding 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 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,” “non-accelerated filer,” and “smaller reporting company” in
Rule 12b-2 of the Exchange Act.





[ 
]  Large accelerated
filer                                                                                     [ 
]  Accelerated filer





[ 
]  Non-accelerated
filer                                                                                
     [X]  Smaller reporting
company





APPLICABLE
ONLY TO CORPORATE ISSUERS:





State the
number of shares outstanding of each of the issuer’s classes of common equity,
as of March 31, 2010:  22,234,228 shares of common stock.




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





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








Table
of Contents





TABLE OF
CONTENTS
 
 PagePART
      I – FINANCIAL INFORMATIONItem 1.    Financial
      Statements
                3Item 2.   Management’s Discussion and
      Analysis of Financial Condition
                4Item
      3.    Controls and
    Procedures
                5PART
      II – OTHER INFORMATIONItem 1.Legal Proceedings
                7Item
      2.Changes in Securities
                7Item 3.Defaults Upon Senior Securities
                7Item 4.Submission of Matters to a Vote of Security
      Holders
                7Item 5.Other Information
                7Item 6.Exhibits and Reports on Form 8-K
                7SIGNATURE
                8
  
 - 2
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of Contents





Item 1.    Financial Information





BASIS
OF PRESENTATION





The
accompanying unaudited financial statements are presented in accordance with
generally accepted accounting principles for interim financial information and
the instructions to Form 10-Q and item 310 under subpart A of Regulation S-B. In
the opinion of management, all adjustments (consisting only of normal occurring
accruals) considered necessary in order to make the financial statements not
misleading, have been included.  Operating results for the quarter
ended March 31, 2010 are not necessarily indicative of results that may be
expected for the year ending December 31, 2010.  The financial
statements are presented on the accrual basis.








FINANCIAL
STATEMENTS





FOUR
STAR HOLDINGS, INC.





Table
of Contents




PAGEBALANCE
      SHEETS
              F-1STATEMENTS
      OF OPERATIONS
              F-3STATEMENTS
      OF CASH FLOWS
              F-4FOOTNOTES
      TO FINANCIAL STATEMENTS
              F-6







- 3
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of Contents







FOUR
      STAR HOLDINGS, INC.CONSOLIDATED
      BALANCE SHEETSASSETSMarch
      31,
            
            
            December
      31,2010
            
            
            2009(Unaudited)CURRENT
      ASSETS:Cash
            
            $
            -
            
            
            $
            137Accounts
      receivable
            
            
            44,872
            
            
            
            -Due
      from related parties
            
            
            875,048
            
            
            
            -Inventories:
            
            
            
            
            
            
            402Real
      estate held for sale
            
            
            3,389,566
            
            
            
            -Land
      held for development
            
            
            6,480,836
            
            
            
            -Total
      Current Assets
            
            
            10,790,322
            
            
            
            539FIXED
      ASSETS:Equipment,
      net of accumulated depreciation
            
            
            889,724
            
            
            
            345OTHER
      ASSETS:License,
      net
            
            
            660
            
            
            
            660Loan
      origination fees, net of accumulated amortization
            
            
            40,888
            
            
            
            -Total
      other assets
            
            
            41,548
            
            
            
            660Total
      Assets
            
            $
            11,721,594
            
            
            $
            1,544LIABILITIES AND SHAREHOLDERS'
      EQUITYCURRENT
      LIABILITIES:Accounts
      payable & accrued expenses
            
            $
            60,863
            
            
            $
            7,000Long
      Term Liabilities:Notes
      payable
            
            
            5,834,248
            
            
            
            -Deferred
      tax liability
            
            
            1,387,179
            
            
            
            -Total
      long term liabilities
            
            
            7,221,427
            
            
            
            -Total
      Liabilities
            
            
            7,282,290
            
            
            
            7,000SHAREHOLDERS'
      EQUITY:Preferred
      stock (15,000,000 authorized;par
      value $.001; none issued and outstanding)
            
            
            -
            
            
            
            -Common
      stock (100,000,000 shares authorized;no
      par value; 22,234,228 and 8,001,078 issued and outstanding,
      respectively)Accumulated
      deficit
            
            
            (94,043
            )
            
            
            (94,043
            )Total
      Shareholders' Equity (Deficit)
            
            
            4,439,304
            
            
            
            (5,456
            )Total
      Liabilities and Shareholders' Equity
            
            $
            11,721,594
            
            
            $
            1,544




The
accompanying notes are an integral part of these financial
statements








F -
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of Contents


FOUR
      STAR HOLDINGS, INC.CONSOLIDATED
      STATEMENTS OF OPERATIONSMarch
      31,
            
            
            March
      31,2010
            
            
            2009UnauditedNet
      Sales
            
            $
            163,148
            
            
            $
            -Cost
      of Sales
            
            
            116,575
            
            
            
            -Gross
      Profit
            
            
            46,573
            
            
            
            -Expenses:Amortization
            
            
            2,813
            
            
            
            60Depreciation
            
            
            2,596
            
            
            
            25General
      and Administrative
            
            
            80,516
            
            
            
            17,430Total
            
            
            85,925
            
            
            
            (17,515
            )Loss
      before other income (expense):
            
            
            (39,352
            )
            
            
            (17,515
            )Other
      income - commission
            
            
            2,215
            
            
            
            -Interest
      expense
            
            
            (94,305
            )
            
            
            -Total
      other expense, net
            
            
            (92,090
            )
            
            
            -Net
      (loss) before Income Taxes
            
            
            (131,442
            )
            
            
            (17,515
            )Provision
      for Income Taxes
            
            
            -
            
            
            
            -Net
      loss
            
            $
            (131,442
            )
            
            $
            (17,515
            )Basic
      and diluted net loss per common share
            
            $
            (0.0076
            )
            
            $
            (0.0022
            )Weighted
      average number of common shares outstanding
            
            
            17,386,048
            
            
            
            7,901,078





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






F -
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of Contents





FOUR
      STAR HOLDINGS, INC.CONSOLIDATED
      STATEMENTS OF CASH FLOWSMarch
      31,
            
            
            March
      31,2010
            
            
            2009UnauditedOPERATING
      ACTIVITIES:Net
      loss
            
            $
            (131,442
            )
            
            $
            (17,515
            )Adjustments
      to reconcile net income to net cashused
      in operating activities:Issuance
      of common stock for services
            
            
            60,829
            
            
            
            -Increase
      in amortization
            
            
            2,813
            
            
            
            60Increase
      in depreciation
            
            
            2,596
            
            
            
            25Changes
      in operating assets and operating liabilities:Accounts
      receivable
            
            
            (44,872
            )
            
            
            -Due
      from related parties
            
            
            (875,048
            )
            
            
            -Changes  in
      inventory:Real
      estate held for sale
            
            
            (3,389,566
            )
            
            
            -Land
      held for development
            
            
            (6,480,836
            )
            
            
            -Loan
      origination fees
            
            
            (38,075
            )
            
            
            -Accounts
      payable and accrued expenses
            
            
            60,863
            
            
            
            -Deferred
      tax liability
            
            
            1,387,179
            
            
            
            -Net
      cash used in operating activities
            
            
            (9,445,559
            )
            
            
            (17,430
            )INVESTING
      ACTIVITIES:Increase
      in Equipment
            
            
            (882,628
            )
            
            
            -Net
      cash used in investing activities
            
            
            (882,628
            )
            
            
            -FINANCING
      ACTIVITIES:Increase
      in notes payable
            
            
            5,834,248
            
            
            
            -Stock
      issued for investment in Ridgefield Development
Corporation
            
            
            4,417,772
            
            
            
            -Stock
      issued for investment in Four Star Realty
            
            
            26,984
            
            
            
            -Net
      cash provided by financing activities
            
            
            10,279,004
            
            
            
            -NET
      DECREASE IN CASH
            
            
            (49,183
            )
            
            
            (17,430
            )CASH
      BEGINNING BALANCE
            
            
            49,183
            
            
            
            66,613CASH
      ENDING BALANCE
            
            $
            -
            
            
            $
            49,183SUPPLEMENTAL
      DISCLOSURE OF CASH FLOW INFORMATION:Taxes
      paid
            
            $
            -
            
            
            $
            -Interest
      paid
            
            $
            94,305
            
            
            $
            -





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











F -
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of Contents







FOUR
STAR HOLDINGS, INC.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS


(Unaudited)





March
31, 2010





NOTE
1 – BASIS OF PRESENTATION





The
accompanying unaudited interim financial statements have been prepared in
accordance with the rules and regulations of the Securities and Exchange
Commission for the presentation of interim financial information, and include
all the information and footnotes required by generally accepted accounting
principles for complete financial statements.  The audited financial
statements for the period December 31, 2009 and the year then ended were filed
on February 5, 2010 with the Securities and Exchange Commission and are hereby
referenced.  In the opinion of management, all adjustments (consisting
of normal recurring accruals) considered necessary for a fair presentation have
been included.  Operating results for the three month period ended
March 31, 2010 are not necessarily indicative of the results that may be
expected for the year ended December 31, 2010.





NOTE
2 - DESCRIPTION OF BUSINESS




Description of
Business





Dragon’s
Lair Holdings, Inc., a Florida corporation, was incorporated on October 4, 2007,
and conducts its operations through its operating subsidiaries. Our Company was
a provider of personal care products by means of a network of direct sales
consultants.  Our business strategy was to provide quality products,
operate at a profit, and enable our direct sales consultants to operate at a
profit.





On
December 14, 2009, Bobby Smith, Jr., (100% owner of Four Star Investment, Inc.),
and Frances Mize (a single person) together consummated the purchase of
5,928,235 shares of common stock of Dragon’s Lair Holdings, Inc. from Talles
Investments, Inc., Michel Lemoine, Yamit Lemoine, H. Bradley Ress, Steve
Kravitz, Joseph R. Pierre-Louis, and Island Capital Management, LLC, which
constituted 74.1 percent (74.1%) of the issued and outstanding shares of common
stock of Dragon’s Lair Holdings, Inc., for an aggregate cash purchase price in
the amount of $325,000.  The source of the funds for the purchase
price for the shares of common stock of the Company was from Four Star
Investments, Inc., an Alabama corporation, which is wholly owned by Bobby Smith,
Jr.  As a result of the transactions, (i) Bobby R. Smith, Jr. owns
individually 43.7 percent (43.7%) of the issued and outstanding common stock of
the Company and has the sole power to vote and dispose of the such shares (ii)
Frances Mize owns individually 30.4 percent (30.4%) of the issued and
outstanding common stock of Dragon’s Lair Holdings, Inc. and has the sole power
to vote and dispose of the such shares.





On
February 10, 2010, Dragon’s Lair Holdings, Inc. changed its name to Four Star
Holdings, Inc., (hereinafter known as the “Company”). The Company is a real
estate acquisition and development entity that invests in companies that operate
as real estate developers and home builders in order to (i) maximize cash flows,
(ii) create value within the organizations and (iii) eventually sell at a
profit.


Ridgefield
Development Corporation and Four Star Realty, LLC, an Alabama corporation and an
Alabama limited liability company, incorporated and organized on September 17,
2003 and January 1, 2006 respectively, were acquired on March 31, 2010 by the
Company.  (See Note 6). As of March 31, 2010, the company structure is
set forth in the following chart:











FOUR
      STAR HOLDINGS, INC.
              a
      Florida corporation









F -
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of Contents




RIDGEFIELD
      DEVELOPMENT CORPORATION
              An
      Alabama corporation
              (100%
      Owned Subsidiary)





FOUR
      STAR REALTY, LLC
              An
      Alabama limited liability company
              (100%
      Owned Subsidiary)


Our
principal executive office is located at 100 Four Star Lane, Odenville,
AL  35120.  Our telephone number is (205)-640-7821, and our
company website is www.4StarHoldings.com.  Our
fiscal year ends on December 31st.





Basis of
Presentation





The
accompanying consolidated financial statements have been prepared by the
Company. The Company’s consolidated financial statements are prepared in
accordance with generally accepted accounting principles in the United States of
America (“US GAAP”). The consolidated financial statements of the Company
include the Company and its subsidiaries. All material inter-company balances
and transactions have been eliminated.








NOTE
3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES





Cash and Cash
Equivalents





The
Company considers all highly liquid debt instruments with original maturities of
three months or less to be cash equivalents. As of March 31, 2010, the Company
has no cash equivalents.





Use of
Estimates





The
preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect certain reported amounts and disclosures. Accordingly, actual results
could differ from those estimates.





Inventories





Inventories
are stated at cost unless the inventory within a community is determined to be
impaired, in which case the impaired inventory is written down to fair value.
Inventory costs include land, land development and home construction costs, real
estate taxes, deposits on land purchase contracts and interest related to
development and construction. Construction overhead and selling expenses are
expensed as incurred. Real estate held-for-sale is classified as inventories
until delivered. Land, land development, amenities and other costs are
accumulated by specific area and allocated to homes within the respective areas.
The Company reviews its inventory for indicators of impairment by evaluating
each community during each reporting period. The inventory within each community
is categorized as real estate held-for-sale or land held for development based
on the development state within respective phases.






F -
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of Contents






Revenue
Recognition





Revenues
from fixed-price contracts are recognized on the completed contract method. This
method is used because the typical contract is completed in three months or
less, and financial position and results of operations do not vary significantly
from those that would result from use of the percentage-of-completion method. A
contract is considered complete when all costs except insignificant items have
been incurred and the installation is operating according to specifications or
has been accepted by the customer.





Contract
costs include all direct material and labor costs and those indirect costs
related to contract performance, such as indirect labor, supplies, tools,
repairs, and depreciation costs. General and administrative costs are charged to
expense as incurred. Provisions for estimated losses on uncompleted contracts
are made in the period in which such losses are determined.





Earnings (Loss) Per
Share





The
Company computes earnings per share in accordance with the Accounting Standards
Codification (“ASC”) 260 “Earnings Per Share” which was previously Statement of
Accounting Standards No. 128, “Earnings per Share” (“SFAS No. 128”). Under
the provisions of SFAS No. 128, basic earnings per share is computed by dividing
the net income (loss) for the period by the weighted average number of common
shares outstanding during the period. Diluted earnings per share is computed by
dividing the net income (loss) for the period by the weighted average number of
common and potentially dilutive common shares outstanding during the
period.  There were no potentially dilutive common shares outstanding
during the period.





Income
Taxes





The
Company accounts for income taxes in accordance with Statement of Financial
Accounting Standards No. 109, “Accounting for Income Taxes.” Under the asset and
liability method of Statement 109, deferred tax assets and liabilities are
recognized for the estimated future tax consequences attributable to differences
between the financial statement carrying amounts of existing assets and
liabilities and their respective tax bases. Deferred tax assets and liabilities
are measured using enacted tax rates in effect for the year in which those
temporary differences are expected to be recovered or settled.





Fair Value of Financial
Instruments





The
Company considers that the carrying amount of financial instruments, including
accounts payable, approximates fair value because of the short maturity of these
instruments.





Share Based
Payments





In
December 2004, the FASB issued SFAS No. 123(R), “Share-Based Payment,” which
replaces SFAS No. 123 and supersedes APB Opinion No. 25. Under SFAS No. 123(R),
companies are required to measure the compensation costs of share-based
compensation arrangements based on the grant-date fair value and recognize the
costs in the financial statements over the period during which employees or
independent contractors are required to provide services. Share-based
compensation arrangements include stock options and warrants, restricted share
plans, performance-based awards, share appreciation rights and employee share
purchase plans. In March 2005, the SEC issued Staff Accounting Bulletin No. 107,
or “SAB 107”. SAB 107 expresses views of the staff regarding the interaction
between SFAS No. 123(R) and certain SEC rules and regulations and provides the
staff's views regarding the valuation of share-based payment arrangements for
public companies. SFAS No. 123(R) permits public companies to adopt its
requirements using one of two methods. On April 14, 2005, the SEC adopted a new
rule amending the compliance dates for SFAS 123(R). Companies may elect to apply
this statement either prospectively, or on a modified version of retrospective
application under which financial statements for prior periods are adjusted 1on
a basis consistent with the pro forma disclosures required for those periods
under SFAS 123.





Effective
commencing on the year ended December 31, 2007, the Company has fully adopted
the provisions of SFAS No. 123(R) and related interpretations as provided by SAB
107. As such, compensation cost is measured on the date of grant as the fair
value of the share-based payments. Such compensation amounts, if any, are
amortized over the respective vesting periods of the option grant.






F -
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of Contents





Recent Accounting
Pronouncements





FASB
Accounting Standards Codification





(Accounting
Standards Update (“ASU”) 2009-01)





In
June 2009, FASB approved the FASB Accounting Standards Codification (“the
Codification”) as the single source of authoritative nongovernmental GAAP. All
existing accounting standard documents, such as FASB, American Institute of
Certified Public Accountants, Emerging Issues Task Force and other related
literature, excluding guidance from the Securities and Exchange Commission
(“SEC”), have been superseded by the Codification. All other non-grandfathered,
non-SEC accounting literature not included in the Codification has become
non-authoritative. The Codification did not change GAAP, but instead introduced
a new structure that combines all authoritative standards into a comprehensive,
topically organized online database. The Codification is effective for interim
or annual periods ending after March 15, 2009, and impacts the Company’s
financial statements as all future references to authoritative accounting
literature will be referenced in accordance with the Codification. There have
been no changes to the content of the Company’s financial statements or
disclosures as a result of implementing the Codification during the quarter
ended March 30, 2010.   As a result of the Company’s
implementation of the Codification during the quarter ended March 30, 2010,
previous references to new accounting standards and literature are no longer
applicable. In the current quarter financial statements, the Company will
provide reference to both new and old guidance to assist in understanding the
impacts of recently adopted accounting literature, particularly for guidance
adopted since the beginning of the current fiscal year but prior to the
Codification.





In
June 2009, the FASB revised the authoritative guidance for consolidating
variable interest entities, which changes how a company determines when an
entity that is insufficiently capitalized or is not controlled through voting
(or similar rights) should be consolidated. The determination of whether a
company is required to consolidate an entity is based on, among other things, an
entity’s purpose and design and a company’s ability to direct the activities of
the entity that most significantly impact the entity’s economic performance. The
Company is currently evaluating the impact the adoption of this guidance will
have on its consolidated financial statements.





In
January 2010, the FASB issued ASU 2010-06, “Improving Disclosures about
Fair Value Measurements,” which requires additional disclosures about transfers
between Levels 1 and 2 of the fair value hierarchy and disclosures about
purchases, sales, issuances and settlements in the roll forward of activity in
Level 3 fair value measurements. This guidance was effective for the Company in
the current quarter, except for the Level 3 activity disclosures, which are
effective for fiscal years beginning after December 15, 2010. The adoption
of this guidance, which is related to disclosure only, will not have a material
impact on the Company’s consolidated financial position, results of operations
or cash flows.





Subsequent
Events





(Included
in Accounting Standards Codification (“ASC”) 855 “Subsequent Events”, previously
SFAS No. 165 “Subsequent Events”)





SFAS
No. 165 established general standards of accounting for and disclosure of
events that occur after the balance sheet date, but before the financial
statements are issued or available to be issued (“subsequent events”). An entity
is required to disclose the date through which subsequent events have been
evaluated and the basis for that date. For public entities, this is the date the
financial statements are issued. SFAS No. 165 does not apply to subsequent
events or transactions that are within the scope of other GAAP and did not
result in significant changes in the subsequent events reported by the Company.
SFAS No. 165 became effective for interim or annual periods ending after
June 15, 2009 and did not impact the Company’s financial statements. The
Company evaluated for subsequent events through the issuance date of the
Company’s financial statements. No recognized or non-recognized subsequent
events were noted.






F -
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of Contents





Determination of the Useful
Life of Intangible Assets





(Included
in ASC 350 “Intangibles – Goodwill and Other”, previously FSP SFAS No. 142-3
“Determination of the Useful Lives of Intangible Assets”)





FSP SFAS
No. 142-3 amended the factors that should be considered in developing
renewal or extension assumptions used to determine the useful life of a
recognized intangible asset under previously issued goodwill and intangible
assets topics. This change was intended to improve the consistency between the
useful life of a recognized intangible asset and the period of expected cash
flows used to measure the fair value of the asset under topics related to
business combinations and other GAAP. The requirement for determining useful
lives must be applied prospectively to intangible assets acquired after the
effective date and the disclosure requirements must be applied prospectively to
all intangible assets recognized as of, and subsequent to, the effective date.
FSP SFAS No. 142-3 became effective for financial statements issued for
fiscal years beginning after December 15, 2008, and interim periods within
those fiscal years. The adoption of FSP SFAS No. 142-3 did not impact the
Company’s financial statements.





Non-controlling
Interests





(Included
in ASC 810 “Consolidation”, previously SFAS No. 160 “Non-controlling Interests
in Consolidated Financial Statements an amendment of ARB No. 51”)





SFAS
No. 160 changed the accounting and reporting for minority interests such
that they will be recharacterized as non-controlling interests and classified as
a component of equity. SFAS No. 160 became effective for fiscal years
beginning after December 15, 2008 with early application prohibited. The
Company implemented SFAS No. 160 at the start of fiscal 2009 and no longer
records an intangible asset when the purchase price of a non-controlling
interest exceeds the book value at the time of buyout. Any shortfall resulting
from the early buyout of non-controlling interests will continue to be
recognized as a benefit in partner investment expense up to the initial amount
recognized at the time of buy-in. Additionally, operating losses can be
allocated to non-controlling interests even when such allocation results in a
deficit balance (i.e., book value can go
negative).  Minority interest expense is no longer separately reported
as a reduction to net income on the consolidated income statement, but is
instead shown below net income under the heading “net income attributable to
non-controlling interests.” The adoption of SFAS No. 160 did not have any
other material impact on the Company’s financial statements.





Consolidation of Variable
Interest Entities – Amended





(To be
included in ASC 810 “Consolidation”, SFAS No. 167 “Amendments to FASB
Interpretation No. 46(R)”)





SFAS
No. 167 amends FASB Interpretation No. 46(R) “Consolidation of
Variable Interest Entities regarding certain guidance for determining whether an
entity is a variable interest entity and modifies the methods allowed for
determining the primary beneficiary of a variable interest entity. The
amendments include: (1) the elimination of the exemption for qualifying
special purpose entities, (2) a new approach for determining who should
consolidate a variable-interest entity, and (3) changes to when it is
necessary to reassess who should consolidate a variable-interest entity. SFAS
No. 167 is effective for the first annual reporting period beginning after
November 15, 2009, with earlier adoption prohibited. The Company will adopt
SFAS No. 167 in fiscal 2010 and does not anticipate any material impact on
the Company’s financial statements.





Management
does not believe that any other recently issued, but not yet effective,
accounting standards or pronouncements, if currently adopted, would have a
material effect on the Company’s financial statements.






F -
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NOTE
4 - EQUITY TRANSACTIONS





On
October 4, 2007 (inception), Dragon’s Lair Holdings issued 975,000 shares of
common stock for the purchase of the license to manufacture, distribute and
sell, the Sore-Eez Chinese herbal liniment, its initial product, from Yamit
Lemoine.  The value of the license was determined to be the legal
costs to create the license, which was $1,200, as there were no other
out-of-pocket costs for the license or the development of the
recipe.





On
November 4, 2007, Dragon’s Lair Holdings, Inc. issued 5,000,000 shares of common
stock to an investor for cash in the amount of $11,100.





On
December 31, 2007, Dragon’s Lair Holdings, Inc. issued 63,278 shares of common
stock to an investor for cash in the amount of $633.





On March
27, 2008, Dragon’s Lair Holdings, Inc. issued 100,000 shares of common stock to
directors for services rendered at a value of $4,008.





On
December 11, 2008, Dragon’s Lair Holdings, Inc. completed its public offering
pursuant to its Form S-1 Registration Statement of 6,780 shares of Series A
Convertible Preferred Stock, which were converted into 1,762,800 shares of
common stock and provided aggregate offering proceeds in the amount of
$67,800.





On April
1, 2009, Dragon’s Lair Holdings, Inc. issued 100,000 shares of common stock to
its transfer agent for services rendered at a value of $3,846.





On
December 14, 2009, Bobby Smith Jr. and Frances T. Mize purchased 74.1% of the
issued and outstanding stock of Dragon’s Lair holdings, Inc. exchanging
beneficial ownership to these persons.





On
February 10, 2010, the Company issued 2,075,000 restricted shares for consultant
services.





On
February 10, 2010, the Company issued an aggregate of 12,000,000 shares of
common stock of the Company, of which six (6) million were issued to each of
Frances Mize and Bobby R. Smith, Jr. to cover extraordinary expenses incurred
and paid on behalf of the Company and for future and probable
acquisitions.





On
February 10, 2010, the Company executed an agreement to issue an aggregate of
200,000 shares of common stock to Joseph L. Pittera, attorney for the Company,
for services rendered.





On March
15, 2010, the Company issued 158,150 restricted shares for IT consulting
services.





NOTE
5 - CONCENTRATION OF CREDIT RISK





Financial
instruments that potentially subject the Company to concentrations of credit
risk consist principally of cash deposits. Accounts at each institution are
insured by the Federal Deposit Insurance Corporation (“FDIC”). At March 30,
2010, the Company had no amounts in excess of the FDIC insured
limit.






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NOTE
6 – BUSINESS COMBINATIONS





On March
31, 2010, the Company acquired 100% of the outstanding common shares of
Ridgefield Development Corporation, (“Ridgefield”) from Ridgefield’s former
majority shareholders (“the shareholders”). Ridgefield is a real estate
development company in Odenville, Alabama, and the acquisition is expected to
increase the Company’s brand awareness and market share in the area. The
business combination was a tax-free reorganization under Section 368(a) of the
Internal Revenue Code.




Consideration
paid by the Company included the issuance of 1,477,516 shares of Company common
stock. The fair value assigned to the consideration is as follows:






The fair
value of $4,417,772 for the 1,477,516 shares issued by Company as consideration
paid for Ridgefield was determined on the basis of the closing market price of
Company’s common shares on the acquisition date.




The
transaction was accounted for using the acquisition method required by Topic
805, Business
Combinations. The assignment of the total consideration as of the date of
the acquisition is as follows:




Buildings,
      net
            
            
            872,737Real
      estate held for sale
            
            
            3,389,566Land
            
            
            6,480,836Other
      assets
            
            
            918,847Accounts
      payable and accrued expenses
            
            
            (22,787
            )Deferred
      income tax liability
            
            
            (1,387,179
            )Notes
      payable
            
            
            (5,834,248
            )Total
      fair value
            
            $
            4,417,772






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Fair
valuation methods used for the identifiable net assets acquired in that
acquisition make use of quoted prices in active markets and discounted cash
flows using current interest rates.





Seasonality




Historically,
the homebuilding industry has experienced seasonal fluctuations; therefore, the
operating results for the period ended March 31, 2010 is not necessarily
indicative of the results that may be expected for the fiscal year ending
December 31, 2010.







On March
31, 2010, the Company acquired 100% of the membership interests of Four Star
Realty, LLC (“Realty”) in a stock-for-membership interests exchange. The Company
issued 9,026 shares for all interests held by the members of Realty. The
transaction was a tax-free reorganization under Section 368(b) of the Internal
Revenue Code. Realty is a licensed real estate brokerage located in Odenville,
Alabama, and the acquisition is expected to increase the Company’s brand
awareness and market share in the area.











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Item 2.Management’s Discussion and Analysis of Financial
Conditions and




Results
of Operations





Plan of
Operation





Dragon’s
Lair Holdings, Inc., a Florida corporation, was incorporated on October 4, 2007,
and conducts its operations through its operating subsidiaries. Our Company was
a provider of personal care products by means of a network of direct sales
consultants.  Our business strategy was to provide quality products,
operate at a profit, and enable our direct sales consultants to operate at a
profit.





On
December 14, 2009, Bobby Smith, Jr., (100% owner of Four Star Investment, Inc.),
and Frances Mize (a single person) together consummated the purchase of
5,928,235 shares of common stock of Dragon’s Lair Holdings, Inc. from Talles
Investments, Inc., Michel Lemoine, Yamit Lemoine, H. Bradley Ress, Steve
Kravitz, Joseph R. Pierre-Louis, and Island Capital Management, LLC, which
constituted 74.1 percent (74.1%) of the issued and outstanding shares of common
stock of Dragon’s Lair Holdings, Inc., for an aggregate cash purchase price in
the amount of $325,000.  The source of the funds for the purchase
price for the shares of common stock of the Company was from Four Star
Investments, Inc., an Alabama corporation, which is wholly owned by Bobby Smith,
Jr.  As a result of the transactions, (i) Bobby R. Smith, Jr. owns
individually 43.7 percent (43.7%) of the issued and outstanding common stock of
the Company and has the sole power to vote and dispose of the such shares (ii)
Frances Mize owns individually 30.4 percent (30.4%) of the issued and
outstanding common stock of Dragon’s Lair Holdings, Inc. and has the sole power
to vote and dispose of the such shares.





On
February 10, 2010, Dragon’s Lair Holdings, Inc. changed its name to Four Star
Holdings, Inc., (hereinafter known as the “Company”). The Company is a real
estate acquisition and development entity that invests in companies that operate
as real estate developers and home builders in order to (i) maximize cash flows,
(ii) create value within the organizations and (iii) eventually sell at a
profit.





Ridgefield
Development Corporation and Four Star Realty, LLC, an Alabama corporation and an
Alabama limited liability company, incorporated and organized on September 17,
2003 and January 1, 2006 respectively, were acquired on March 31, 2010 by the
Company.





Results of
Operation





For the
quarter ended March 31, 2010, the registrant recognized a net loss of $131,442.
Some general and administrative expenses during the year were accrued. Expenses
for the year were comprised of costs mainly associated with the business
combination between Four Star Holdings, Inc., Ridgefield Development Corporation
and Four Star Realty, LLC, legal, accounting and office expenses.






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Liquidity and Capital
Resource





The
company will rely upon
the  issuance  of  common  stock  and  additional  capital  contributions  from
shareholders  to  fund  administrative expenses
pending full implementation of the Company’s business model.





Critical Accounting
Policies





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





Item 3.   Controls and Procedures





(a)
            Evaluation
      of disclosure controls and
procedures.





Our
management is responsible for establishing and maintaining adequate internal
control over financial reporting for the Company. Internal control over
financial reporting is defined in Rule 13a-15(f) or 15d-15(f) promulgated under
the Securities Exchange Act of 1934 (Exchange Act) as a process designed by or
under the supervision of, our chief executive officer and chief financial
officer and affected by our Board of Directors, management and other personnel,
to provide reasonable assurance regarding the reliability of financial reporting
and the preparation of financial statements for external purposes in accordance
with generally accepted accounting principles and includes those policies and
procedures that:





Pertain
to the maintenance of records in reasonable detail to accurately and fairly
reflect the transactions and dispositions of our assets





Provide
reasonable assurance that transactions are recorded as necessary to permit
preparation of financial statements in accordance with generally accepted
accounting principles, and that receipts and expenditures of the Company are
being made only in  accordance with authorizations of our management
and directors: and





Provide
reasonable assurance regarding prevention or timely detection of unauthorized
acquisition, use or disposition of the Company’s assets that could have a
material effect on the financial statements.






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Because
of its inherent limitations, internal control over financial reporting may not
prevent or detect misstatements. Also, projections of any evaluation of
effectiveness to future periods are subject to the risk that controls may become
inadequate because of changes in conditions, or that the degree of compliance
with the policies or procedures may deteriorate.





Management
assessed the effectiveness of the Company’s Internal Control over financial
reporting as of March 31, 2010. In making this assessment, management used the
criteria set forth by the Committee of Sponsoring Organizations of the Treadway
Commission in this Internal Control-Integrated Framework.





Base on
our assessment, we believe that, as of March 31, 2010 our internal control over
financial reporting was effective.





Evaluation
of Disclosure Controls and Procedures


We
maintain disclosure controls and procedures (as defined in Rules 13a-15(f) and
15d-15(f) under the Exchange Act) that are designed to ensure that information
required to be disclosed in the reports we file or submit under the Exchange Act
is recorded, processed, summarized and reported within the time periods
specified in the SEC’s rules and forms, and that such information is accumulated
and communicated to our management, including our chief executive officer and
chief financial officer, as appropriate to allow timely decisions regarding
disclosure.  In designing and evaluating the disclosure controls and
procedures, management recognized that any controls and procedures, no matter
how well designed and operated, can provide only reasonable assurance of
achieving the desired control objectives, and management necessarily was
required to apply its judgment in evaluating the cost-benefit relationship of
possible controls and procedures.





Our
management, with the participation of our chief executive officer and chief
financial officer, have evaluated the effectiveness of our disclosure controls
and procedures as of March 31, 2010.  Based on their evaluation, our
chief executive officer and chief financial officer have concluded that, as of
March 31, 2010, our disclosure controls and procedures were
effective.





(b)            Changes in internal
controls.





There
have not been any changes in the Company’s internal control over financial
reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the
Exchange Act) during the quarter ended March 31, 2010 that have materially
affected, or are reasonably likely to materially affect, the Company’s internal
control over financial reporting.








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PART
II - OTHER INFORMATION





Item 1.  Legal Proceedings.





The
Company is party to one lawsuit which was filed on May 6, 2010 in the United
States District Court for the Northern District of Alabama, Middle Division as
case number CV-10-PT-1183-M.





The
Plaintiffs in the lawsuit are Cirrus Acquisition and Development Corporation, a
Nevada corporation, and Cirrus Global Capital Management, Inc., a Nevada
corporation, Cirrus Holdings, Inc., and Richard Woods.  The Plaintiffs
sued the following Defendants: Four Star Companies, Inc., a Florida corporation
and its subsidiaries, including but not limited to Twelve Oaks Properties, Inc.,
Ridgefield Development, SBE, Inc., Four Star Realty, Four Star Investments,
B&B Smith Construction, and Four Star Land Ventures; Dragon’s Lair Holdings,
Inc., a Florida corporation; Four Star Holding Company, Inc. a Florida
corporation; Bobby Smith, Jr. individually and in his capacity as officer,
director and principal of Four Star Companies, Inc., Dragon’s Lair Holdings,
Inc.; Fran Mize, individually and in her capacity as officer, director and
principal of Four Star Companies, Inc., Dragon’s Lair Holdings, Inc., and Four
Star Holdings, Inc.





The
lawsuit alleges that the Plaintiffs are owed Four Star Holdings, Inc. common
stock and cash in payment for financial brokerage services
rendered.  The Company disputes the quality and effectiveness of such
services and expects that the matter will be resolved in its favor.





Item 2.   Changes in
Securities.





None





Item 3. Defaults Upon Senior
Securities.





None





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





None





Item 5.Other Information.





None





Item 6.   Exhibits and Reports on Form
8-K





(a) Exhibits





33.1 Certification
pursuant to Section 302 of Sarbanes Oxley Act of 2002





33.2 Certification
pursuant to Section 906 of Sarbanes Oxley Act of 2002





(b) Reports
on Form 8-K





8-K filed February 10, 2010 regarding
items 2.01, 5.03, 8.01 and 9.01





8-K filed February 16, 2010 regarding
items 1.01, 3.02 and 9.01








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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.








FOUR
STAR HOLDINGS, INC.








Date: May
17, 2010





/s/ Bobby R. Smith,
Jr.


Bobby R.
Smith, Jr.


Chief
Executive Officer











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