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EX-31.1 - EXHIBIT311 - ASTIKA HOLDINGS INC.exhibit311.htm
EX-32.1 - EXHIBIT321 - ASTIKA HOLDINGS INC.exhibit321.htm


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM 10-Q

þ
 
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
For the quarterly period ended March 31, 2013
 
OR

o
 
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
For the transition period from ___________ to ___________
 
Commission file number 000-54855
 
____________________________
 
ASTIKA HOLDINGS, INC.
(Exact name of registrant as specified in its charter)
 
Florida
(State or other jurisdiction of incorporation or organization)
 
27-4601693
(I.R.S. Employer Identification Number)

7000 W. Palmetto Park Road, Suite 409
Boca Raton, Florida
(Address of principal executive offices)
 
33433
(Zip Code)
 
(509) 562-3211
(Issuer’s telephone number, including area code)

Not applicable
(Former name, former address and former fiscal year, if changed since last report)

Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes o No þ

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 definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.  (Check one):

           Large accelerated filer   o                                                                                    Accelerated filer                              o
           Non-accelerated filer     o                                                                                    Smaller reporting company           x
           (Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yeso No  þ
 
State the number of shares outstanding of each of the issuer’s classes of common equity, as of the latest practicable date.
 
Class
 
Outstanding at May 10, 2013
     
Common Stock, par value $.001 per share
 
11,077,750 shares

 
 
 


 



 

 
 
ASTIKA HOLDINGS, INC.
 
 

 
  PAGE
       
Part I   Financial Information
 
3
 
       
 
3
 
       
 
3
 
       
 
4
 
 
     
 
5
 
       
 
6
 
       
  7  
       
  10  
       
Item 4.     Controls and Procedures
  10  
       
Part II  Other Information
  13  
       
    Item 1.     Legal Proceedings   13  
       
  13  
       
    Item 3.     Defaults Upon Senior Securities
  13  
       
    Item 4.     Mine Safety Disclosures.
  13  
       
Item 5.     Other Information
  13  
       
Item 6.     Exhibits
  13  
       
  14  
       
EX-31.1
EX-32.1
EX-101 INSTANCE DOCUMENT
EX-101 SCHEMA DOCUMENT
EX-101 CALCULATION LINKBASE DOCUMENT
EX-101 LABELS LINKBASE DOCUMENT
EX-101 PRESENTATION LINKBASE DOCUMENT
EX-101 DEFINITION LINKBASE DOCUMENT
 
 
 
 

 

 
 
PART I  FINANCIAL INFORMATION

 
 
ASTIKA HOLDINGS, INC. AND SUBSIDIARY
 
 
(Unaudited)
 
   
             
ASSETS
           
   
March 31, 2013
   
December 31, 2012
 
             
Current assets:
           
     Cash and cash equivalents   $ 41,209     $ 77,130  
     Accounts receivable     697       436  
                           Total current assets     41,906       77,566  
                 
Equipment, net of depreciation of $653 and $513, respectively
    2,145       2,285  
Intangible assets, net of amortization of $424 and $309, respectively
    5,076       5,191  
                 
Total assets
  $ 49,127     $ 85,042  
                 
                 
LIABILITIES AND SHAREHOLDERS' EQUITY
               
                 
Current liabilities:
               
     Accounts payable and accrued expenses   $ 5,585     $ 16,525  
     Loan     2,109       2,083  
                          Total current liabilities     7,694       18,608  
                 
                 
Shareholders' equity:
               
     Preferred stock (10,000,000 authorized;                
          par value $.001; none issued and outstanding)   $ -     $ -  
     Common stock (140,000,000 shares authorized; par value $.001;                
          11,077,750 shares issued and outstanding     11,078       11,078  
          at  March 31, 2013 and December 31, 2012, respectively)                
     Additional paid in captal     112,782       112,782  
     Accumulated deficit     (82,427 )     (57,426 )
                           Total shareholders' equity     41,433       66,434  
                 
Total liabilities and shareholders' equity
  $ 49,127     $ 85,042  
 
 
 
 
The accompanying notes are an integral part of these unaudited consolidated financial statements.
 
 
 
 

 
 
 
 
 

ASTIKA HOLDINGS, INC. AND SUBSIDIARY
(Unaudited)
             
             
             
   
For the three
month period
   
For the three
month period
 
   
ended
March 31, 2013
   
ended
March 31, 2012
 
             
Revenues
  $ 677     $ 826  
                 
Cost of revenues
    -       -  
Gross Profit
    677       826  
                 
Operating expenses
               
     Selling, general and administrative expenses     25,537       2,466  
     Amortization of intangible assets     115       10  
                 
Total operating expenses
    25,652       2,476  
                 
Operating income (loss)
    (24,975 )     (1,650 )
Interest expense, net
    (26 )     -  
                 
Net (loss) before Income Taxes
    (25,001 )     (1,650 )
                 
Provision for Income Taxes
    -       -  
                 
Net (loss)
    (25,001 )     (1,650 )
                 
Basic and diluted net (loss) per common share
  $ (0.00 )   $ (0.00 )
                 
Weighted average number of common shares outstanding
    11,077,750       7,272,967  
 
 
 
 
The accompanying notes are an integral part of these unaudited consolidated financial statements.
 
 


 
 
 
 
 

ASTIKA HOLDINGS, INC. AND SUBSIDIARY
(Unaudited)
             
             
             
 
For the three
month period
   
For the three
month period
 
 
ended
March 31, 2013
   
ended
March 31, 2012
 
OPERATING ACTIVITIES:
           
Net loss
  $ (25,001 )   $ (1,650 )
Adjustments to reconcile net loss to net cash
               
used in operating activities:
               
Amortization
    115       10  
Depreciation
    140       93  
Issuance of common stock for services
    -       360  
Interest expense
    26       -  
Changes in operating assets and liabilities:
               
Increase (decrease) in accounts receivable
    (261 )     -  
Increase (decrease) in accounts payable and accrued expenses
    (10,940 )     2,000  
                 
Net cash provided by (used in) operating activities
    (35,921 )     813  
                 
INVESTING ACTIVITIES:
               
Cash paid for intangible assets
    -       -  
Cash paid for equipment
    -       (2,798 )
                 
Net cash used in investing activities
    -       (2,798 )
                 
FINANCING ACTIVITIES:
               
Repayment on debt
    -       -  
Proceeds from sale of common stock
    -       5,000  
Proceeds from sale of preferred stock
    -       -  
                 
Net cash provided by financing activities
    -       5,000  
                 
NET INCREASE IN CASH
    (35,921 )     3,015  
                 
CASH BEGINNING BALANCE
    77,130       8,033  
                 
CASH ENDING BALANCE
  $ 41,209     $ 11,048  
                 
Non-cash investing and financing activities:
               
Conversion of preferred stock to common stock
    -       -  
Purchase of intangible asset
    -       -  
                 
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
         
Taxes paid
  $ -     $ -  
Interest paid
  $ -     $ -  
 
 
 
 
 
The accompanying notes are an integral part of these unaudited consolidated financial statements.
 

 



 
ASTIKA HOLDINGS, INC.


MARCH 31, 2013

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, but do not include all the information and footnotes required by generally accepted accounting principles for complete financial statements.  The audited financial statements for the period January 13, 2011 (Inception) through December 31, 2011 and the year ended December 31, 2012 are included in Annual Report on Form 10-K of Astika Holdings, Inc. which was filed on March 26, 2013, 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, 2013 are not necessarily indicative of the results that may be expected for the year ended December 31, 2013.

NOTE 2 - DESCRIPTION OF BUSINESS

Astika Holdings, Inc. (the “Company”, “we”, “us”, “our”), is a music publishing company, which owns and acquires rights to musical compositions, exploits and markets these compositions and receive royalties or fees for their use from domestic and international sources.  Our music catalog includes the composer/arranger rights in four musical compositions included in the 1981 Hollywood movie, Raiders of the Lost Ark.  We also have a copyrighted recorded music compilation consisting of seven musical compositions written by EuGene Gant, one of our exclusive songwriters, entitled, “Eugenius SOL Presents:  Green and Healthy”, which is available for sale on the Internet website www.alephmusic.com.  We own rights in 19 other musical compositions.  In total, we own rights in 30 musical compositions.  Both Astika Holdings, Inc. and its wholly owned subsidiary Astika Music Entertainment, Inc. were incorporated under the laws of the State of Florida on January 13, 2011. Our fiscal year end is December 31.

NOTE 3 - LOAN TRANSACTION

The Company purchased a recorded music compilation from EuGene Gant for a purchase price of $5,000 pursuant to a Bill of Sale and Assignment dated June 15, 2012, an Exclusive Songwriter Agreement dated June 15, 2012, and a Promissory Note that the Company concurrently executed and delivered to him on the same date.  The Company made a payment to Mr. Gant in the amount of $1,000 on June 15, 2012 and $2,000 on October 1, 2012, and the remaining $2,000 principal amount under Promissory Note bears interest at five percent (5%) per annum, and there is one remaining principal installment payment in the amount of $2,000 due on June 15, 2013.  Accrued and unpaid interest on the Promissory Note is also due on June 15, 2013.  There is accrued interest on the Promissory Note in the amount of $109 as of March 31, 2013. As of March 31, 2013, total outstanding short-term debt, which is comprised of principal and interest, was $2,109.

NOTE 4 – INTANGIBLE ASSETS

The Company has capitalized costs in acquiring intangible properties which consisted of the following at March 31, 2013 and December 31, 2012:

   
March 31, 2013
   
December 31, 2012
 
                 
Rights to Musical Compositions in BMI Catalog
 
$
500
   
$
500
 
Rights to Eugenius SOL Presents:  Green and Healthy
   
5,000
     
5,000
 
Accumulated Amortization
   
(424
)
   
(309
)
Intangible Assets, Net
 
$
5,076
   
$
5,191
 

The Music Catalog rights of the Company are being amortized using the straight-line method over the estimated useful life of twelve years.
 
Intangible assets consist of the composer and arranger rights to four musical compositions included in the 1981 Hollywood movie, Raiders of the Lost Ark, which we acquired on January 25, 2011 from Mr. Eugene B. Settler, our Chairman of the Board, President, Chief Executive Officer and Treasurer, at no cost.  The value of the rights to the four musical compositions was determined to be the administrative costs in the amount of $500 charged by Broadcast Music Inc. (BMI) to record the assignment and transfer on BMI’s records of such rights from Mr. Settler to the Company.  Intangible assets also consist of seven original musical compositions from EuGene Gant, the songwriter, which is on the recorded music compilation entitled, “Eugenius SOL Presents:  Green and Healthy”, and is available for sale as a digital download on the Internet website www.alephmusic.com.  We purchased this recorded music compilation from him for a purchase price of $5,000 pursuant to a Bill of Sale and Assignment dated June 15, 2012.

We evaluate the recoverability of identifiable intangible assets whenever events or changes in circumstances indicate that an intangible asset’s carrying amount may not be recoverable. There was no impairment loss for the periods indicated above.

 
 
 

 

 
 
 
 

The following discussion and analysis should be read in conjunction with our consolidated financial statements, including the notes thereto, appearing in this report and are hereby referenced.  The following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed below and elsewhere in this report. You should not place undue certainty on these forward-looking statements, which apply only as of the date of this report.  We believe it is important to communicate our expectations. However, our management disclaims any obligation to update any forward-looking statements whether as a result of new information, future events or otherwise.
 
These forward-looking statements are based on our management’s current expectations and beliefs and involve numerous risks and uncertainties that could cause actual results to differ materially from expectations.  You should not rely upon these forward-looking statements as predictions of future events because we cannot assure you that the events or circumstances reflected in these statements will be achieved or will occur.  You can identify a forward-looking statement by the use of the forward-terminology, including words such as “may”, “will”, “believes”, “anticipates”, “estimates”, “expects”, “continues”, “should”, “seeks”, “intends”, “plans”, and/or words of similar import, or the negative of these words and phrases or other variations of these words and phrases or comparable terminology.  These forward-looking statements relate to, among other things: our sales, results of operations and anticipated cash flows; capital expenditures; depreciation and amortization expenses; sales, general and administrative expenses; our ability to maintain and develop relationship with our existing and potential future customers;  and, our ability to maintain a level of investment that is required to remain competitive.  Many factors could cause our actual results to differ materially from those projected in these forward-looking statements, including, but not limited to: variability of our revenues and financial performance; risks associated with technological changes; the acceptance of our products in the marketplace by existing and potential customers; disruption of operations or increases in expenses due to our involvement with litigation or caused by civil or political unrest or other catastrophic events; general economic conditions, government mandates; and, the continued employment of our key personnel and other risks associated with competition.
 
Overview
 
The Company, through its wholly-owned subsidiary Astika Music Entertainment, Inc., engages in the music publishing business.  We own and acquire rights to musical compositions, exploit and market these compositions and receive royalties or fees for their use from domestic and international sources.  Our primary activities through the date of this report have been related to the acquisition and administration of musical compositions, including the composer and arranger rights to four musical compositions from the 1981 Hollywood movie, Raiders of the Lost Ark, which we acquired at no cost from Mr. Settler on January 25, 2011, the engagement of two persons to write musical compositions as works for hire for us on an exclusive basis and completing our recent public  offering.  The composer/arranger rights to our Raiders of the Lost Ark musical compositions are also co-owned by Veronica C. Gamba, who is entitled to share equally in any performance royalties collected by BMI and, consequently, the approval of Ms. Gamba, or her assignees, is required for any additional royalty or fee arrangements with prospective licensees involving these compositions.  We cannot provide any assurance that we will be able to obtain any such approval from Ms. Gamba, or any of her assignees.  

Our Operations
 
We are prioritizing the use the proceeds of our recent public offering, as follows:
 
Anticipated Milestones
 
Projected Date
of Completion
 
Budget
Allocation($)
         
Payment of Offering Expenses
 
Completed
 
53,706 (actual)
         
Purchase of Music and Recording Equipment
 
June 2013
 
6,300 (estimated)
         
Music Production for 3 Unpublished Compositions in Music Catalog
 
June 2013
 
6,000 (estimated)
         
Executive Compensation for Mr. Settler
 
0-12 Months
 
6,000 (estimated)
         
Public Company Reporting
 
0-12 Months
 
25,494 (estimated)
         
General and Administrative Expenses
 
0-12 Months
 
2,500 (estimated)
         
Total Expenditures
     
100,000
 
 
 
 
 

 

 
 
 

The foregoing represents our best estimate of the allocation of the proceeds of this offering based on the planned use of funds for our operations and current objectives.  Our management will have broad discretion in determining the uses of the proceeds of this offering.  We may reallocate funds from time to time if our management believes such reallocation to be in our best interest for uses that may or may not have been herein anticipated.

Results of Operations for the Three Month Period Ended March 31, 2013 Compared to the Period March 31, 2012
 
Revenues. Revenues consisted of performance royalties from our music catalog   The Company’s revenues for the three month period ended March 31, 2013 were $677 as compared to $826 for the three month period ended March 31, 2013, and the decrease was due to a decrease in performance royalty payments from Broadcast Music Inc. (BMI) on the composer and arranger rights to musical compositions our catalog.
 
Selling, General and Administrative Expenses.   Selling, general and administrative expenses for the three month period ended March 31, 2013were $25,537 as compared to $2,466 for the three month period ended March 31, 2012. General and administrative expenses increased due to expenses relating to being a public reporting company, including professional service fees for preparing our SEC reports, transfer agent fees and blue sky filing fees and fees and expenses relating to the Company’s public offering.  General and administrative expenses consisted primarily of corporate support expenses, such as legal and accounting, and director stock compensation expenses. 
 
Liquidity and Capital Resources
 
We measure our liquidity in a number of ways, including the following:
 
 
As of
December 31, 2012
   
As of
March 31, 2013
 
           
           
Cash
 
$
77,130
   
$
41,209
 
Working Capital
   
58,958
     
34,212
 
Debt (current)
   
18,608
     
7,694
 
 
From January 13, 2011 (inception) through March 31, 2013, we raised a total of $123,500 from the issuance of common stock and the conversion of Series A Convertible Preferred Stock into shares of common stock.
 
Impact of Inflation
 
We believe that the rate of inflation has had negligible effect on our operations.  We believe we can absorb most, if not all, increased non-controlled operating costs by increasing sales prices, whenever deemed necessary and by operating our Company in the most efficient manner possible.
 
 
 
 

 



 
 
Net Cash Used in Operating Activities

We experienced negative cash flow from operating activities during the three month period ended March 31, 2013 in the amount of $35,921.  The cash used in operating activities during this period was due to cash used to fund a net loss of $25,001, adjusted for non-cash expenses related to amortization of intangible assets, depreciation on equipment, and accrued interest.
 
Net Cash Used in Investing Activities
 
The cash used in investing activities during the three month period ended March 31, 2013 was $0.

Net Cash Provided by Financing Activities
 
Cash provided by financing activities during the three month period ended March 31, 2013 was $0.
 
Availability of Additional Funds
 
Based on our working capital as of March 31, 2013 and revenues, we do not expect to need additional equity and/or debt financing to continue our operations during the next 12 months.  We expect that our current cash on hand will fund our operations through December 2013.   See “Description of Business”.
 
Critical Accounting Policies and Estimates
 
Our financial statements and accompanying notes have been prepared in accordance with United States generally accepted accounting principles applied on a consistent basis. The preparation of financial statements in conformity with United States generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods.  Actual results could differ from these estimates. Our significant estimates and assumptions include amortization, the fair value of our stock, and the valuation allowance relating to the Company’s deferred tax assets.
 
We qualify as an “emerging growth company”, as defined in the Jumpstart Our Business Startups Act, which became law in April, 2012.  Under the JOBS Act, “emerging growth companies”, can delay adopting new or revised accounting standards until such time as those standards apply to private companies. We have elected not to avail ourselves of this exemption from new or revised accounting standards and, therefore, will be subject to the same new or revised accounting standards as other public companies that are not emerging growth companies.
 
Material Commitments
 
There were no material commitments during the three month period ended March 31, 2013.
 
Purchase of Furniture and Equipment
 
There were no purchases of computers and equipment during the three month period ended March 31, 2013.

Recent Accounting Pronouncements
 
We have adopted all recently issued accounting pronouncements.  The adoption of the accounting pronouncements, including those not yet effective, is not anticipated to have a material effect on our financial position or results of operations.
 
 
 

 



 
 
Critical Accounting Policies and Estimates
 
Our financial statements and accompanying notes have been prepared in accordance with United States generally accepted accounting principles applied on a consistent basis. The preparation of financial statements in conformity with United States generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods.  Actual results could differ from these estimates. Our significant estimates and assumptions include amortization, the fair value of our stock, and the valuation allowance relating to the Company’s deferred tax assets.
 
We qualify as an “emerging growth company”, as defined in the Jumpstart Our Business Startups Act, which became law in April, 2012.  Under the JOBS Act, “emerging growth companies”, can delay adopting new or revised accounting standards until such time as those standards apply to private companies. We have elected not to avail ourselves of this exemption from new or revised accounting standards and, therefore, will be subject to the same new or revised accounting standards as other public companies that are not emerging growth companies.
  
Off Balance Sheet Arrangements
 
As of March 31, 2013, we had no off balance sheet arrangements.
 
ITEM 3.  Quantitative and Qualitative Disclosures about Market Risk
 
Disclosure under this section is not required for a smaller reporting company.

Item 4.   Controls and Procedures

We maintain disclosure controls and procedures that are designed to ensure that the information required to be disclosed in the reports that we file under the Securities Exchange Act of 1934 (the "Exchange Act") is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and that such information is accumulated and communicated to our management, including our President and Treasurer, as appropriate, to allow timely decisions regarding required disclosures.  In designing and evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated, can only provide reasonable assurance of achieving the desired control objectives, and in reaching a reasonable level of assurance, management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

As required by SEC Rule 13a-15(b), we carried out an evaluation, under the supervision and with the participation of our management, including our President and Treasurer, of the effectiveness of the design and operation of our disclosure controls and procedures as of the end of our fourth fiscal quarter covered by this report. Based on the foregoing, our President and Treasurer concluded that our disclosure controls and procedures were effective at the reasonable assurance level.  It should be noted that the design of any system of controls is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions, regardless of how remote.

MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

Our management of is responsible for establishing and maintaining adequate internal control over financial reporting.  Internal control over financial reporting is defined in Rule 13a-15(f) or 15d-15(f) promulgated under the Securities Exchange Act of 1934 as a process designed by, or under the supervision of, the Company’s principal executive and financial officer and effected by the Company’s 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 that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the Company;

 
 
 

 
 
- 10 -


 
 

 
 
·
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 management and directors of the Company; 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.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. 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.

The Company’s management assessed the effectiveness of the Company’s internal control over financial reporting as of March 31, 2013.  In making this assessment, the Company’s management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in Internal Control-Integrated Framework.  The COSO framework is based upon five integrated components of control: control environment, risk assessment, control activities, information and communications and ongoing monitoring.

Based on the assessment performed, management has concluded that the Company’s internal control over financial reporting, as of March 31, 2013, is effective and provides reasonable assurance regarding the reliability of its financial reporting and the preparation of its financial statements in accordance with generally accepted accounting principles.  Further, management has not identified any material weaknesses in internal control over financial reporting as of March 31, 2013.

Based on an evaluation under the supervision and with the participation of the Company’s management, the Company’s principal executive officer and principal financial officer has concluded that the Company’s disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act were not effective as of March 31, 2013 (the “Evaluation Date”), to ensure that information required to be disclosed by the Company in reports that it files or submits under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission rules and forms and (ii) accumulated and communicated to the Company’s management, including its principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.   Each of the following is deemed a material weakness in our internal control over financial reporting:

·  
We do not have an audit committee.  While we are not currently obligated to have an audit committee, including a member who is an “audit committee financial expert,” as defined in Item 407 of Regulation S-K, under applicable regulations or listing standards; however, it is management’s view that such a committee is an important internal control over financial reporting, the lack of which may result in ineffective oversight in the establishment and monitoring of internal controls and procedures.

·  
We did not maintain proper segregation of duties for the preparation of our financial statements.  We currently have only one officer overseeing all transactions.  This has resulted in several deficiencies, including the lack of control over preparation of financial statements and proper application of accounting

Management believes that the material weaknesses set forth in the two items above did not have an effect on our financial results. However, management believes that the lack of a functioning audit committee results in ineffective oversight in the establishment and monitoring of required internal controls and procedures, which could result in a material misstatement in our financial statements in future periods.

 
 
 

 
 
- 11 -

 
 
 

Management's Remediation Initiatives
 
In an effort to remediate the identified material weaknesses and other deficiencies and enhance our internal controls, we plan to initiate the following series of measures once we have the financial resources to do so:
 
·  
We will create a position to segregate duties consistent with control objectives and will increase our personnel resources and technical accounting expertise within the accounting function when funds are available to us. And, we plan to appoint one or more outside directors to an audit committee resulting in a fully functioning audit committee, which will undertake the oversight in the establishment and monitoring of required internal controls and procedures, such as reviewing and approving estimates and assumptions made by management when funds are available to us.

·  
Management believes that the appointment of outside directors to a fully functioning audit committee, would remedy the lack of a functioning audit committee.

Changes in Internal Control Over Financial Reporting

There were no changes in our internal controls over financial reporting that occurred during the period covered by this report, which were identified in connection with management’s evaluation required by paragraph (d) of Rules 13a-15 and 15d-15 under the Exchange Act, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

This quarterly report does not include an attestation report of the Company’s registered independent public accounting firm regarding internal control over financial reporting.  Management’s report was not subject to attestation by the Company’s independent registered public accounting firm pursuant to temporary rules of the SEC that permit the Company to provide only management’s report in this quarterly report.
 

/s/ Eugene B. Settler                                                              
     Eugene B. Settler
     CEO, President and Treasurer
 
 
 
 
 
 

 
 
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PART II.  OTHER INFORMATION
 
Item 1.   Legal Proceedings
 
None
 
Item 2.     Unregistered Sales of Equity Securities and Use of Proceeds

On September 6, 2012, the Company commenced its public offering pursuant to the Form S-1 Registration Statement (Registration No. 333-182113).  The public offering was terminated on November 28, 2012.  The proceeds of the offering in the amount of $106,100 were deposited in the Company’s non-interest bearing bank account, and have been used by us in the business, as of March 31, 2013, as follows:

Marketing, Promotion and Advertising
 
$
-
 
Printing expenses
   
6,869
 
Executive Compensation
 
 
2,000
 
Legal fees and expenses
   
39,629
 
Accounting fees and expenses
   
6,750
 
Blue sky fees and expenses
   
3,371
 
Transfer Agent fees
   
19,405
 
Miscellaneous
   
 1,000
 
         
Total
 
$
79,024
 
 

Item 3.  Defaults Upon Senior Securities
 
None

Item 4.  Mine Safety Disclosures
 
Not applicable
 
Item 5.  Other Information
 
None
 
(a)           Exhibits
 
 
 
 

 
 
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Pursuant to the requirements 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.
 
ASTIKA HOLDINGS, INC.


DATE:  May 13, 2013
 
By:  /s/  Eugene B. Settler                                                              
              Eugene B. Settler
              Chairman, President, Chief Executive Officer
              and Treasurer (Principal Accounting Officer
              and Authorized Officer)
 
 
 
 
 
 
 
 

 
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Astika Holdings, Inc.
 
Index to Exhibits

 
 
Exhibit Number   Description
     
Exhibit 31.1
 
     
Exhibit 32.1
 

 
 
 
 
 
 
 
 

 


 
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