PETRO USA, INC. - Quarter Report: 2010 September (Form 10-Q)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

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FORM 10-Q

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All State Properties Holdings, Inc.

 (Exact name of registrant as specified in its charter)

2333 Alexandria Drive, Lexington Kentucky  40504

(Address of Principal Executive Office) (Zip Code)

(859) 514-6717

(Registrant’s telephone number, including area code)

________________

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

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Securities registered pursuant to Section 12(b) of the Act:   

2,928,960,614

Title of Class: Common Stock, $.0001 par value per share

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 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

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). . YES  x     NO

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of accelerated filer and large accelerated filer in Rule 12b-2 of the Exchange Act. (Check one):

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act) YES  ¨    NO x

The aggregate market value of the common stock held by non-affiliates of Registrant was $ 1,030.804, as of October 28, 2010 based on the last sale price of $.0012 for each share of common stock on such date.  As of October 28, 2010, there were 3,617,794,954 shares outstanding.

All State Properties Holdings, Inc.

FORM 10-Q QUARTERLY REPORT

September 30, 2010

INDEX

F-1

F-2

F-3

F-4

F-5

All State Properties Holdings, Inc.

(a Development Stage Enterprise)
Notes to Financial Statements
For the three months ended September 30, 2010

1.

Organization, Description of Business, and Basis of Accounting

Business Organization

All State Properties Holding, Inc., a corporation (the “Company”) was organized under the state of Nevada on April 24, 2008 to conduct business formerly carried on by its predecessor partnership, All State Properties L.P. (the “Partnership”). The Partnership merged with the Company on May 29, 2008. The Company acquired all of the assets and assumed all of the liabilities and obligations of the Partnership. At May 29, 2008 each unit, par value $0.001 per share of the Partnership was converted into one issued and outstanding share of par value $0.0001 common stock of the Corporation.

On September 20, 2010, EnergyOne Technologies, Inc. acquired all the assets of MB Consulting Services, LLC, of which the assets included majority ownership of All State Properties Holdings, Inc. with a purchase agreement entitled Limited Liability Company Ownership Purchase Agreement. Under the terms of the Purchase Agreement, MB Consulting Services, LLC (the “Seller”), sold to EnergyOne Technologies, Inc. (the “Buyer”) all assets of Seller, which included 2,500,500,000 shares of the Company, which was approximately 90 percent (90%) of the issued and outstanding capital of the Company for Fifty Thousand dollars ($50,000) plus an agreement to pay a debt owed to Belmont by Seller.

The Company’s fiscal year end is June 30th. The company re-entered the development stage July 1, 2007 when revenue generation ceased and the Company refocused its’ activities to raising capital. The Company is currently in the development stage and has limited assets, and is in the process of acquiring assets and changing business philosophies and, consequently, has no revenues. In accordance with the FASB ASC 915, it is considered a Development Stage Company.  

Accounting Basis

These financial statements have been prepared on the accrual basis of accounting following generally accepted accounting principles of the United States of America consistently applied.

Income Taxes

The Company uses the asset and liability method of accounting for income taxes. At September 30, 2010 and June 30, 2010, respectively, the deferred tax asset and deferred tax liability accounts, as recorded when material to the financial statements, are entirely the result of temporary and permanent differences.  Temporary differences represent differences in the recognition of assets and liabilities for tax and financial reporting purposes, primarily share based compensation and loss on settlement of debt.

As of September 30, 2010, the deferred tax asset related to the Company's net operating loss (NOL) carryforward is fully reserved.  Due to the provisions of Internal Revenue Code Section 338, the Company may have no net operating loss carryforwards available to offset financial statement or tax return taxable income in future periods as a result of a change in

F-6

All State Properties Holdings, Inc.

(a Development Stage Enterprise)
Notes to Financial Statements
For the three months ended September 30, 2010

1.

Organization, Description of Business, and Basis of Accounting (Cont.)

control involving 50 percentage points or more of the issued and outstanding securities of the Company.

Dividends

The Company is a Development Stage Company and has not yet adopted a policy regarding the payment of dividends.

Earnings (Loss) per Share

Basic earnings (loss) per share is computed by dividing the net income (loss) available to common shareholders by the weighted-average number of common shares outstanding during the respective period presented in our accompanying financial statements.

Fully diluted earnings (loss) per share is computed similar to basic income (loss) per share except that the denominator is increased to include the number of common stock equivalents (primarily outstanding options and warrants).

Common stock equivalents represent the dilutive effect of the assumed exercise of outstanding stock options and warrants, using the treasury stock method, at either the beginning of the respective period presented or the date of issuance, whichever is later, and only if the common stock equivalents are considered dilutive based upon the Company’s net income (loss) position at the calculation date.

As of September 30, 2010 and June 30, 2010, the Company has no issued and outstanding warrants or options.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Reclassification

Certain prior period amounts have been reclassified to conform to current presentation.

2

Going Concern

The accompanying financial statements have been prepared assuming the Company will continue as a going concern, which contemplates the realization of assets and the liquidation of liabilities in the normal course of business.  However, the Company has incurred significant losses and is dependent on obtaining adequate capital to fund operating losses until it becomes profitable. If the Company is

F-7

All State Properties Holdings, Inc.

(a Development Stage Enterprise)
Notes to Financial Statements
For the three months ended September 30, 2010

unable to obtain the necessary funding it could cease operations as a new enterprise.  This raises substantial doubt about the Company’s ability to continue as a going concern.  These financial statements do not include any adjustments that might result from this uncertainty.

3.

Income Taxes

The Company provides for income taxes asset and liability approach in accounting for income taxes. Deferred tax assets and liabilities are recorded based on the differences between the financial statement and tax bases of assets and liabilities and the tax rates in effect when these differences are expected to reverse. This method requires the reduction of deferred tax assets by a valuation allowance if, based on the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized.

The provision for income taxes differs from the amounts which would be provided by applying the statutory federal income tax rate of 39% to the net loss before provision for income taxes for the following reasons:

Net deferred tax assets consist of the following components as of :

F-8

All State Properties Holdings, Inc.

(a Development Stage Enterprise)
Notes to Financial Statements
For the three months ended September 30, 2010

The Company has a net operating loss carryover of $9,073,563 as of September 30, 2010 which expires in 2030. Due to the change in ownership provisions of the Tax Reform Act of 1986, net operating loss carry forwards for federal income tax reporting purposes are subject Income Taxes to annual limitations. Should a change in ownership occur net operating loss carry forwards may be limited as to use in future years.

The Company has net operating loss carryforwards that were derived solely from operating losses from prior years.  These amounts can be carried forward to offset future taxable income for a period of 20 years for each tax year’s loss.  No provision was made for federal income taxes as the Company has significant net operating losses.  

At September 30, 2010 and June 30, 2010, the Company has established a valuation allowance equal to the deferred tax assets as there is no assurance that the Company will generate future taxable income to utilize these assets.

Due to the provisions of Internal Revenue Code Section 338, the Company may have no net operating loss carryforwards available to offset financial statement or tax return taxable income in future periods as a result of a change in control involving 50 percentage points or more of the issued and outstanding securities of the Company. The Company had no uncertain tax positions at September 30, 2010 or June 30, 2010.

4.

Capital Stock

The Company has 10,000,000 shares of Preferred Stock authorized at a par value of $0.0001 and none has been issued at September 30, 2010 and 2009.

On September 8, 2009, the Company increased the authorized Common Stock from 100,000,000 to 200,000,000 shares. These shares had an authorized par value of $0.0001.  In conjunction with the conversion to a corporation, occurring during fiscal 2008, the Company issued 3,118,065 shares on a one for one basis for each partnership unit.  Concurrent with that transaction 129,950 shares were retired.  Additionally, 5,021,000 Founder’s shares were issued in conjunction with the change in control of the Company.

Also occurring during fiscal 2008, the Company issued 800,000 shares of its’ common stock in exchange for a note payable from a related party. No gain or loss was recorded on the settlement of this note due to its’ related party nature.

Pursuant to the agreement with MB Consulting Services, LLC (hereinafter “MB Consulting”) through which MB Consulting would acquire fifty and one one-thousandth percent (50.001%) of the anti-dilutive capital stock of the Company from Belmont Partners, was issued  9,180,885 shares and later issued an additional 90,821,115 shares of anti-dilutive Restricted Common Stock as founder’s shares after the change in control. Also, on September 22, 2009, the Company, in accordance with the agreement, issued 2,488,014 Shares of anti-dilutive Restricted Common Stock to Belmont Partners, LLC as founder’s shares.

F-9

All State Properties Holdings, Inc.

(a Development Stage Enterprise)
Notes to Financial Statements
For the three months ended September 30, 2010

4.

Capital Stock (Cont.)

On September 10, 2009, the Company issued 5,000,000 Shares of anti-dilutive Restricted Common Stock in contractual obligations to the key officers of the Company and 250,000 Shares of Restricted Common Stock in satisfaction of $20,000 to creditors. This transaction was contractual in nature and valued at market. The value of these transactions amounted to $497,500 and $30,675, respectively.

On September 16, 2009, the Company issued 3,325,000 shares of Unrestricted Common Stock in satisfaction of $266,000 of additional obligations of the Company. This transaction was contractual in nature and valued at market. The value of this transaction amounted to $333,738.

In October, 2009, the Company issued 12,250,000 shares of Unrestricted Common Stock as satisfaction of a promissory note payable. This stock was obligated by the Company on August 28, 2009, and a demand promissory note and hypothecation agreement were executed on that date. The Company set aside stock to cover the original debt of $12,250 since the demand promissory note was considered due, and the debt delinquent, at the time executed and the market value was used to value the stock on the date obligated and set aside.  This transaction resulted in a loss on settlement of debt on the amount of $967,750.

On December 29, 2009, the Company issued 993,000 Shares of anti-dilutive Restricted Common Stock in contractual obligations to the key officers of the Company and 349,359 Shares of Restricted Common Stock as part of the purchase agreement with Belmont Partners. This transaction was contractual in nature and valued at market. The value of this transaction amounted to $121,842 and $42,866, respectively.

On June 23, 2010, the Company issued 600,000 shares of Restricted Common Stock in exchange for investor relations services. This transaction was contractual in nature and valued at market. The value of this transaction amounted to $42,000.

On August 11, 2010, the Company, along with majority shareholder approval, authorized an increase in the number of authorized shares of common stock from Two Hundred Million (200,000,000) shares to Five Billion (5,000,000,000) shares. On August 16, 2010, the company issued 2,476,243,431 common shares as additional founder’s stock and as a result of the increase in authorized shares.

On August 16, 2010, the Company issued 116,799,690 shares to its’ key officers as additional share based compensation.  The shares issued in this transaction were valued at market and amounted to $4,438,388.  These shares were issued primarily as a result of the increase in authorized shares.

On August 22, 2010, the Company was committed to issue 250,000 shares of Restricted Common Stock in exchange for investor relations services. This transaction was contractual in nature and valued at market. The value of this transaction amounted to $6,250.

F-10

All State Properties Holdings, Inc.

(a Development Stage Enterprise)
Notes to Financial Statements
For the three months ended September 30, 2010

4.

Capital Stock (Cont.)

On August 26, 2010, the company issued common stock in the amount of 200,000,000 registered and free-trading shares to Epic Worldwide, Inc. in exchange for the promissory note to a key officer.  These shares were valued at the market and the transaction amounted to $1,770,000.

At September 30, 2010 and June 30, 2010, the company had 2,928,960,614 and 135,667,493 common shares issued and outstanding, respectively.

The Company has no other classes of shares authorized for issuance. At September 30, 2010 and June 30, 2010, there were no outstanding stock options or warrants.

5.

Related Party Transactions

In fiscal 2009, an additional $16,692 was advanced to the Company from related parties and $ 1,470 was repaid. The remaining advances and accrued interest, which totaled $35,372 were forgiven together which resulted in additional paid in capital. There was no gain or loss recorded on this debt forgiveness since it was with a related party.

During the year ended, June 30, 2010, funds were advanced to the Company by an officer for working capital needs in the amount of $59,938.

During the three month period ended, September 30, 2010, funds were advanced for working capital needs in the amount of $26,075 and $4,000 was repaid during the same time period. These amounts are non-interest bearing loans which are unsecured and have no stated terms for repayment.

6.

Notes Payable - Officers

At September 30, 2010, the Company transferred the accrued officer’s salaries to promissory notes payable.  These notes bear interest at 12% and are unsecured and due on demand. The balance of these notes at September 30, 2010 and June 30, 2010 were $516,355 and $427,000, respectively.

7.

Sale of Ownership interest

On September 20, 2010, a majority interest was acquired by EnergyOne Technologies, Inc., ownership of the Company was subsequently to Francis Zubrowski in a pass-through transaction.  No profit occurred in this pass-through transaction.

F-11

All State Properties Holdings, Inc.

(a Development Stage Enterprise)
Notes to Financial Statements
For the three months ended September 30, 2010

8.

Termination of purchase of Goldleaf Gold interests

On August 6, 2010, the Company acquired mineral interests belonging to Goldleaf Exploration, LLC. However, there was a provision allowing for the obligations of the agreement to be terminated in the event of a major change in ownership of the Company.  The acquisition and subsequent transfer was such a transaction and management is in the process of formalizing the termination. This formal termination should occur in the Company’s second quarter ended, December 31, 2010. These financial statements reflect the termination of this agreement.

9.

Subsequent Events

The Company’s new management, in a belief that a reduction in the number of authorized shares would be in the best interest of the Company, began the process of reducing the number of authorized shares. This process was terminated when the new management decided to keep the shares the same.

On August 6, 2010, the Company acquired the mineral interests belonging to Goldleaf Exploration, LLC. However, there was a provision allowing for the obligations of the agreement to be terminated in the event of a major change in ownership of the Company.  The acquisition and subsequent transfer was such a transaction and management is in the process of formalizing the termination. This formal termination will occur in the Company’s second quarter ended, December 31, 2010. These financial statements reflect the termination of this agreement.

F-12

All State Properties Holdings, Inc.

ITEM 2. Management’s Discussion and Analysis of Financial Condition and Result of Operations

The following discussion and analysis of our financial condition, results of operations, liquidity and capital resources should be read in conjunction with our financial statements and notes thereto.

THREE MONTHS ENDED SEPTEMBER 30, 2010 COMPARED TO THREE MONTHS ENDED SEPTEMBER 30, 2009

The Company had minimal operations for the three months ended September 30, 2010 vs September 30, 2009, as it was in the process of changing operational philosophies. The net loss was $6,448,324 and $904,675 for the three months ended September 30, 2010 vs September 30, 2009, respectively.

OPERATION AND ADMINISTRATIVE EXPENSES

Operating expenses increased from $904,675 in the three months ended September 30, 2009 to $6,360,056 in the three months ended September 30, 2010. Whenever possible, the previous management has utilized common stock or notes payable of the Company to fund such expenditures in order to minimize the cash required.  Operating expenses primarily consist of Officer’s Salaries and Investor Relations Expenses that are paid to the current and immediate past officers and investment relations firms for performing various tasks. Investor Relations Expenses increased from $9,531 in the three months ended September 30, 2009 to $1,787,005 in the three months ended September 30, 2010.

LIQUIDITY AND CAPITAL RESOURCES

As of September 30, 2010 and June 30, 2010, we had $43 and $622 cash on hand respectively. We believe that we will continue to need investing and financing activities to fund operations. Our primary liquidity and capital resource needs are to finance the costs of our operations. During the three months ended  and September 30, 2009, cash provided by (used in) operations was $(1,800,579) and $703, respectively, primarily for the payment of current officer’s salaries and investor relations expenses. Whenever possible, the previous management has utilized common stock of the Company to fund such expenditures in order to minimize the cash required.  The Company will actively seek alternative sources of funding to continue as a going concern.

Net cash provided by investing activities was $0 during the three month periods ending September 30, 2010 and September 30, 2009.

Net cash provided by financial activities for the three month period ending September 30, 2010 was $1,800,000 compared with net cash provided in financing activities of $0 for the three months ended September 30, 2009.

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ITEM 3. Quantitative and Qualitative Disclosures About Market Risk

None.

ITEM 4. Controls and Procedures

The Company's Director and Chief Executive Officer, Francis Zubrowski, is responsible for establishing and maintaining disclosure controls and procedures for the Company.

An evaluation was performed under the supervision and with the participation of our management of the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities and Exchange Act of 1934, as amended) as of the end of period covered by this report. Based on that evaluation, the management concluded that these disclosure controls and procedures were not effective. The Company did not have sufficient segregation of duties due to the limited resources available. There has been no change in our internal control over financial reporting during our most recent 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

None.

ITEM 1.A Risk Factors

There have been no material changes from the risk factors disclosed in All State Properties Holdings, Inc. Form 10-K for the year ended June 30, 2010.

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

There were no unregistered sales of equity securities during the quarter covered by this report.

ITEM 3. Defaults upon Senior Securities

None.

ITEM 4. Submission of Matters to Vote of Security Holders

No matters were submitted during the quarter covered by this report to a vote of stockholders. However, the Articles of Incorporation were amended to provide for Indemnification of Officers and Directors that was considered necessary to retain qualified talent.

ITEM 5. Other Information

None.

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ITEM 6. Exhibits

All State Properties Holdings, Inc.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

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