SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-KSB
Annual Report Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
(Mark One)
[ X ] Annual report pursuant to section 13 or 15(d) of the
Securities Exchange Act of 1934
For the fiscal year ended March 31, 2001
[ ] Transition report under section 13 or 15(d) of the
Securities Exchange Act of 1934
For the transition period from _______ to_______
Commission File Number 333-85787
Trading Solutions.com, Inc.
(Name of small business issuer in its charter)
Nevada 88-0425691
(State or other jurisdiction of (I.R.S. Employer I.D. No.)
incorporation or organization)
200 Camino Aguajito, Suite 200, Monterey, CA 93940
(Address and Zip Code of principal executive offices)
Issuer's telephone number, including area code: 619-688-9308
Securities registered pursuant to Section 12(b) of the Exchange Act:
None
Securities registered under Section 12(g) of the Exchange Act:
Common Stock, $.001 par value
(Title of class)
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 report(s), and (2) has been subject to such filing requirements
for the past 90 days. Yes [ x ] No [ ]
Check if there is no disclosure of delinquent filers in response to
Item 405 of Regulation S-B is contained in this form, and no
disclosure will be contained, to the best of the registrant's
knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this form 10-KSB or any
amendment to this Form 10-KSB. [ ]
The issuer's revenue for its most recent fiscal year was: $22,963
The aggregate market value of the issuer's voting stock held as of
March 31, 2001 by non-affiliates of the issuer (401,000 shares) was
$451,125.
As of March 31, 2001 the issuer had 2,861,000 shares of its $.001
par value common stock outstanding.
Transitional Small Business Format: Yes [ ] No [ X ]
Documents incorporated by reference: none
PART I
Item 1. Description of Business.
The Company is a development stage company, providing online
trading classes along with basic computer classes. Trading
Solutions.com, Inc. was incorporated on May 14, 1999 by seven
persons or entities contributing $0.001 per share for 2,495,000
shares of common stock. We also received funds from the exercise of
options to purchase 85,000 shares of common stock for $0.10 per
share and the sale of a Regulation D private placement of 180,000
shares for $0.50 per share. In July 2000 we completed our Initial
Public Offering selling 101,000 shares for $1.00 per share. This
provided the capitalization of the Company.
In December 1999 the Company changed its Fiscal Year End to
March 31.
Since inception, the Company has been engaged in developing
corporate structure, planning operations, capital raising
activities, and negotiating agreements with prospective business
affiliates. The Company has had $22,963 in operational income in
2001.
Trading Solutions.com, Inc. trading school is designed to
provide education for people interested in online investing. The
Company offers training for beginners as well as experienced
traders. Courses consist of a combination of theory sessions linked
closely with a practical hands-on approach. The Company provides
online training, individual training, small group sessions and
seminars on various trading and computer-related subjects.
Our marketing strategy is directed towards beginners and
experienced traders. Management is working to establish a local
market niche for each one of our trading schools by advertising in
local newspapers and radio. We are working to increase the public's
awareness of the Company's name and its services. This goal is to be
achieved by carefully positioned editorials regarding the Company's
services. We maintain advertisements in the local newspapers and
produce color catalogs to be printed and distributed throughout the
year.
Our goal was to become a leading online training school
combined with an online store for a one-stop learning experience.
The Company offers classes and information with current
technological information. In years 1998, 1999 and 2000 the
information most in demand included online trading, electronic
trading, day trading strategies, and the software applied in
trading. We intended to offer as many types of training and as great
a variety within each subject category as possible. By the end of
the year 2000, a downturn in the stock market has greatly affected
our business, lowering the demand for our services.
In May 2001 we were approached by Springland Beverages, Inc., a
Canadian water and beverage related company. Springland Beverages,
Inc. proposed to merge with Trading Solutions.com, Inc. After
reviewing their business plan we entered into a Letter of Intent
with Springland Beverages, Inc. and are working on a definitive
merger agreement.
Item 2. Description of Property.
The Company's sales and administrative office is located at 200
Camino Aguajito, Suite 200, Monterey, CA, 93940. It has no other
physical facilities.
Item 3. Legal Proceedings.
None.
2
Item 4. Submission of Matters to a Vote of Securities Holders.
None.
PART II
Item 5. Market for Common Equity and Related Stockholder Matters.
The Company's common stock is quoted on the Over the Counter
Bulletin Board under the symbol TSLU. Trading in the common stock
has been limited and sporadic and the quotations set forth below are
not necessarily indicative of actual market conditions. Further,
these prices reflect inter-dealer prices without retail mark-up,
mark-down, or commission, and may not necessarily reflect actual
transactions. The high and low bid prices for the common stock for
each quarter of the fiscal years ended March 31, 2000 and 2001 are
as follows:
YEAR BID ASK
2000 HIGH LOW HIGH LOW
Oct. 5 thru
Dec. 29 1.875 1.50 3 2.125
(First
Available)
YEAR BID ASK
2001 HIGH LOW HIGH LOW
First 2.125 .625 2.50 1.125
Quarter
Second 1.41 .46 1.50 1.06
Quarter
As of March 31, 2001, there were approximately 50 shareholders
of record holding a total of 2,760,000 shares of common stock. The
holders of common stock are entitled to one vote for each share held
of record on all matters submitted to a vote of stockholders.
Holders of the common stock have no preemptive rights and no right
to convert their common stock into any other securities. There are
no redemption or sinking fund provisions applicable to the common
stock.
The Company has not paid, nor declared, any dividends since its
inception and does not intend to declare any such dividends in the
foreseeable future. The Company's ability to pay dividends is
subject to limitations imposed by Nevada law. Under Nevada law,
dividends may be paid to the extent that the corporation's assets
exceed its liabilities and it is able to pay its debts as they
become due in the usual course of business.
Item 6. Management's Discussion and Analysis or Plan of Operation.
Results of Operations for the period ending March 31, 2001 and from
date of inception to year ended March 31, 2000
During the year, the Company's financial condition has minimal
changes as a result of operations. In the fiscal year ending March
31, 2001, the Company received revenues of $22,963, compare to
$1,920 in the previous year. The Company increase in sales was a
result of its marketing efforts. Expenses were $132,741 for the year
ended March 31, 2001 compared to $130,770 for the previous year.
Loss from operations was $109,778 for the year ended March 31, 2001
compared to $128,850 for the previous year. Other expenses were $800
for the year ended March 31, 2001 compared to $14 for the year ended
March 31, 2000. The net loss was
3
$110,578 for the year ended March 31, 2001 compared to $128,864 for
the previous year. Due to a downturn in the stock market we are
seeing a slowing demand for our services, which may adversely affect
our revenues.
Liquidity and Capital Resources
At present, the Company's major sources of liquidity and cash
consist of accounts receivable $1,695. The Company has furniture and
equipment valued at $2,863 for total assets of $4,562. Liabilities
consist of accounts payable in the amount of $7,214 and state
corporate tax payable of $800 for total liabilities of $8,014. Total
stockholders deficit as of March 31, 2001 was $3,452.
The Company does not have any capital commitments for the next
twelve months.
We have entered into discussions with another company to
exchange stock to acquire this non public company. To date, details
of this transaction have not been formalized.
The Company is still in its development stage and has not felt
the effects of inflation. The primary concern would be a further
decline in the stock market which will result in fewer customers for
our online trading classes. Should a further decline occur, the
Company would increase its cost of sales.
Item 7. Financial Statements.
The financial statements of the Company appear at the end of
this report beginning with the Index to Financial Statements on page
9.
Item 8. Changes In and Disagreements with Accountants on Accounting
and Financial Disclosure.
None.
PART III
Item 9. Directors, Executive Officers, Promoters and Control
Persons; Compliance With Section 16(a) of the Exchange Act.
The following table sets forth the name, age, position and
office term of each executive officer and director of the Company as
of March 31, 2001.
Name Age Position Director or Officer Since
Natalie Shahvaran 24 President, Director May 14, 1999
Michael A. Strahl 41 Secretary, Director May 14, 1999
Susan Turner 45 Treasurer, Director May 14, 1999
All officers hold their positions at the will of the Board of
Directors. All directors hold their positions for one year or until
their successors are elected and qualified. Set forth below is
certain biographical information regarding each of the Company's
executive officers and directors:
Natalie Shahvaran (Age 24). President, Chief Executive Officer,
Chief Operating Officer, Director. Ms. Shahvaran graduated from
Heald Business College with honors and received her Associate's
Degree in Computer Business Administration in 1999. She has been
managing several trading accounts for several years. Ms. Shahvaran
worked as a computer consultant for Monterey Ventures, Inc. from
1998 to 1999. Monterey Ventures is a venture capital and financing
company for small companies. Ms. Shahvaran was employed by Heald
College as a college algebra/business math tutor from January 1997
to December 1998.
4
Michael A. Strahl (Age 41). Secretary, Director. Mr. Strahl
graduated from Western State College and received his BA in Business
Administration/Finance. He was the Vice President and Director of
Themiis Corporation, a merchant bank specializing in environmental
management from June 1997 to July 1999. He was Vice President and
Chief Operating Officer of Environmental Enzymes, Inc., an enzyme
manufacturing company from February 1999 to July 1999. He is
currently on the board of directors of Internet Finance.com, Inc.
and Monterey Technologies, Inc. Michael A. Strahl is also a part
owner and board member since March of 1994 of the Environmental
Business Network. Inc., an environmental solutions oriented company.
He was President of Environmental and Energy Group, Inc. (EEG),
consultant to the oil and gas industry from April 1992 to August
1993. Before joining the environmental industry, Michael A. Strahl
was a NASD Principal with Corporate Securities Group from April 1998
to January 1999 and was a branch manager for Oxford Financials from
February 1990 to May 1990. An NASD Principal must pass a series 24
Securities License which allows him to be a branch manager of a
stock brokerage form.
Susan Turner (Age 45). Chief Financial Officer, Treasurer,
Director. Ms. Turner attended the University of Michigan School of
Business Administration and received her BA in Business
Administration in April 1975. She graduated with a major in
Accounting. Ms. Turner passed the CPA exam in November 1975 and
obtained a Michigan CPA license April 1978, a Georgia license
September 1980 and a California license December 1985. Ms. Turner is
currently a Certified Public Accountant. Ms. Turner started her
professional career over 20 years ago with Peat, Marwick, Mitchell,
a national CPA firm from September 1975 to April 1977. She was also
audit manager for the Commercial Loan Department of General Electric
Credit Corporation in Palo Alto, CA from November 1978 to July 1981.
Ms. Turner previously managed the tax department of McGilloway &
Elstob in California from December 1984 to September 1987, and has
been the proprietor of her own CPA firm since 1987. Ms. Turner will
handle the Corporation's financial matters, including financial
statement preparation, tax returns, budgeting and forecasting.
Compliance with Section 16(a) of the Exchange Act
Based solely upon a review of Forms 3, 4 and 5 furnished to the
Company, the Company is not aware of any person who at any time
during the fiscal year ended March 31, 2001 was a director, officer,
or beneficial owner of more than ten percent of the Common Stock of
the Company, and who failed to file, on a timely basis, reports
required by Section 16(a) of the Securities Exchange Act of 1934
during such fiscal year.
Item 10. Executive Compensation
Executive Year Salary
Natalie Shahvaran 2000 $11,300
President 2001 $30,500
Michael Strahl 2000 $1,550
Secretary 2001 $2,500
Susan Turner 2000 -0-
Treasurer 2001 $1,000
The board has adopted an executive compensation plan for its
Executive Officers and Directors as follows: the board members will
receive no cash compensation or reimbursement for the expenses
incurred in connection with attending board meetings. The Company
reserves the right to pay consulting fees to its board members and
officers for the time and services they provide to the Company. Our
Chief Executive Officer will receive up to $30,000 in compensation
for her full time commitment to the development and promotion of the
company.
Employment Contracts and Termination of Employment and Change in
Control Arrangement.
5
There are no compensatory plans or arrangements, including
payments to be received from the Company, with respect to any person
named in Cash Compensation set out above which would in any way
result in payments to any such person because of his resignation,
retirement, or other termination of such person's employment with
the Company or its subsidiaries, or any change in control of the
Company, or a change in the person's responsibilities following a
change of control of the Company.
Item 11. Security Ownership of Certain Beneficial Owners and
Management.
The following table sets forth, as of March 31, 2001, the
beneficial ownership of the Company's Common Stock by each person
known by the Company to beneficially own more than 5% of the
Company's Common Stock, including options, outstanding as of such
date and by the officers and directors of the Company as a group.
Except as otherwise indicated, all shares are owned directly.
Class After
Title of Class Name and address of Amount and Nature Percent of
Offering beneficial owner of Beneficial Ownership Class
Common Natalie Shahvaran (1) 1,250,000 46.62%
P.O. Box 22851
Carmel, CA 93922
Common Robert Strahl (2) 1,260,000 47%
2251 San Diego Ave., #B-375
San Diego, CA 92110
Common Michael A. Strahl (1) 20,000 0.7%
814 Bel Air Way
Salinas, CA 93901
Common Susan F. Turner (1) 3,000 0.1%
P.O. Box 3687
Carmel, CA 93921
Common Directors and Officers 1,290,000 47.48%
as a group (3 persons)
(1) Officer and/or director of the Company
(2) Mr. Robert Strahl is the beneficial owner of 1,210,000 shares
held in the name of Internet Finance.com, Inc. and of 50,000 shares
held in the name of Monterey Ventures, Inc.
There are no contracts or other arrangements that could result
in a change of control of the Company.
Item 12. Certain Relationships and Related Transactions.
The Company entered into an agreement with Internet
Finance.com, Inc., a company controlled by Robert Strahl, to provide
assistance to the Company in the formation of its corporate
structure and to use their contacts in assisting with the
development of a public market for the Company's common stock. The
agreement calls for Internet Finance.com, Inc. to be paid a total of
$22,000 of which the entire amount has been paid plus $2,000 for
additional services.
6
Monterey Ventures, a company also controlled by Robert Strahl,
provides office space and support services to the Company. Total
cash paid for these services was $1,000 for year ended March 31,
2001 and $1,615 for year ended March 31, 2000.
The Company entered into an agreement with Natalie Shahvaran to
provide consulting services to the Company. Ms. Shahvaran was paid
$30,500 for the year ended March 31, 2001 and $11,3000 for the year
ended March 31, 2000 and these amounts have been identified in the
executive compensation table.
A shareholder, Melissa DeAnzo provided support services to the
Company and was paid $4,700 for the year ended March 31, 2001 and
$9,500 for the year ended March 31, 2000.
Item 13. Exhibits and Reports on Form 8-K.
Reports on Form 8-K
On August 28, 2000, the Company filed a report on Form 8-K,
Other Events. The purpose of the filing was to inform the public
that the registered offering by the issuer had been closed.
On May 24, 2001, the Company filed a report on Form 8-K, Other
Events. The purpose of the filing was to inform the public that the
Company has signed a letter of intent with Springland Beverages,
Inc. for the acquisition of Springland.
Exhibits
Exhibit No. Description
Location
2.1 Articles of Incorporation *
2.2 Amended Articles of Incorporation *
2.3 Bylaws *
* Incorporated herein by reference to the Company's Form 10-SB/A2 as
filed with the Securities and Exchange Commission on March 20, 2000.
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the
registrant caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
Trading Solutions.com, Inc.
Date: July 12, 2001 By:/s/ Natalie Shahvaran
Natalie Shahvaran, President
Date: July 12, 2001 By:/s/ Susan F. Turner
Susan F. Turner, Treasurer
In accordance with the Exchange Act, this report has been
signed below by the following persons on behalf of the registrant
and in the capacities and on the dates indicated.
Date: July 12, 2001 By:/s/ Natalie Shahvaran
Natalie Shahvaran, Director
7
Date: July 12, 2001 By:/s/ Michael A. Strahl
Michael A. Strahl, Director
Date: July 12, 2001 By:/s/ Susan F. Turner
Susan F. Turner, Director
8
TRADING SOLUTIONS.COM, INCORPORATED
Index to Financial Statements
Page
Independent Auditor's Report 10
Balance Sheet 11
Statement of Operations, From date of
Inception to June 30, 1999 12
Statement of Shareholder's Equity 13
Statement of Cash Flows, From date of
Inception to June 30, 1999 14
Notes to Financial Statements 15
9
To the Board of Directors and Shareholders
Trading Solutions.Com, Incorporated
Monterey, California
Independent Auditor's Report
I have audited the balance sheet of Trading Solutions.Com,
Incorporated as of March 31, 2001 and 2000, and the related
statements of operations, stockholders' equity and cash flows for
the year ended March 31, 2001 and from the date of inception to
March 31, 2000. These financial statements are the responsibility
of the Company's management. My responsibility is to express an
opinion on these financial statements based on my audit.
I conducted my audit in accordance with generally accepted auditing
standards. Those standards require that I plan and perform the
audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes
examining on a test basis, evidence supporting the amounts and
assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial
statement presentation. I believe that my audit provides reasonable
basis for my opinion.
In my opinion, the financial statements referred to in the first
paragraph present fairly, in all material respects, the financial
position of Trading Solutions.Com, Incorporated, as of March 31,
2001 and 2000 and the results of operations and its cash flows and
the cumulative results of operations and cumulative cash flows for
the year ended March 31, 2001 and for the period from date of
inception to March 31, 2000 in conformity with generally accepted
accounting principles.
The accompanying financial statements have been prepared assuming
the Company will continue as a going concern. As discussed in Note
7 to the financial statements, the Company has incurred net losses
from operations and has received no revenue, which raises
substantial doubt about its ability to continue as a going concern.
The financial statements do not include any adjustment that might
result from the outcome of this uncertainty.
/s/ Hawkins Accounting
June 27, 2001
10
TRADING SOLUTIONS.COM, INCORPORATED
BALANCE SHEET
March 31, 2001 and 2000
ASSETS
Current assets
Cash in bank $ 4 $ 4,691
Other receivable 1,695 176
Total current assets 1,699 4,867
Furniture and equipment
Equipment 2,606 2,206
Furniture 1,273 600
3,879 2,806
Accumulated depreciation (1,016) (176)
2,863 2,630
Total assets $ 4,562 $ 7,497
LIABILITIES AND STOCKHOLDER'S EQUITY
Current liabilities
Accounts payable $ 7,214 $ 1,371
State corporate tax payable $ 800
Total current liabilities 8,014 1,371
Total liabilities 8,014 1,371
Stockholders' equity
Common stock, 20,000,000 shares authorized at
a par value of .001. 2,861,000 outstanding 28,610 27,600
Paid in capital 207,380 107,390
Deficit incurred during development stage (239,442) (128,864)
Total stockholder's equity (3,452) 6,126
Total liabilities and stockholder's equity $ 4,562 $ 7,497
The accompanying notes are an integral part of these financial
statements.
11
TRADING SOLUTIONS.COM, INCORPORATED
STATEMENT OF OPERATIONS
For the year ending March 31, 2001 and from date of inception to
year ended March 31, 2000
2001 2000
Income $ 22,963 $ 1,920
Expenses
Accounting fees 7,980 6,000
Advertising 17,975 4,580
Bank Charges 149 104
Compensation 0 34,000
expense
Consulting fees 63,984 41,107
Depreciation 840, 176
Education 0 1,995
Management fees 0 5,000
Miscellaneous 0 7,884
Office supplies 5,808 4,534
Postage 1,424 89
Promotions 0 514
Tax and licenses 180 1,765
Legal fees 5,742 12,606
Organizational 0 896
costs
Rent 3,600 3,166
Telephone 3,292 2,602
Travel 21,314 3,752
Dues and 453
subscriptions
Total expenses 132,741 130,770
Loss from (109,778) (128,850)
operations
Other (expenses)
Interest (14)
State Corporate Tax (800)
Total other expenses (800) (14)
expenses
Net Loss $ (110,578) $(128,864)
Loss per common
Share (0.04) $ (0.05)
Weighted average of 2,828,334 2,587,302
shares outstanding
The accompanying notes are an integral part of these financial
statements.
12
TRADING SOLUTIONS.COM, INCORPORATED
STATEMENT OF STOCKHOLDER'S EQUITY
For year ending March 31, 2001 and from date of inception to year
end March 31, 2000
Paid
Common Stock In Retained
Shares Amount Capital Earnings Total
Founders stock 2,495,000 24,950 (22,455) 2,495
Options 85,000 850 41,645 42,495
May 18, 1999 14,000 140 6,860 7,000
May 2l,1999 2,000 20 980 1,000
May 24, 1999 3,000 30 1,470 1,500
May 27, 1999 2,000 20 980 1,000
June 2,1999 10,000 100 4,900 5,000
June 3, 1999 2,000 20 980 1,000
June 4, 1999 4,000 40 1,960 2,000
June 7, 1999 2,000 20 980 1,000
June 13, 1999 2,000 20 980 1,000
June 16, 1999 3,000 30 1,470 1,500
June 17, 1999 . 10,000 100 4,900 5,000
June 22, 1999 2,000 20 980 1,000
June 25, 1999 1,000 10 490 500
June 27, 1999 6,000 60 2,940 3,000
June 29, 1999 12,000 120 5,880 6,000
June 30, 1999 2,000 20 980 1,000
July 1, 1999 15,000 150 7,350 7,500
July 2, 1999 14,000 140 6,860 7,000
July 5, 1999 3,000 30 1,470 1,500
July 8, 1999 6,000 60 2,940 3,000
July 12, 1999 2,000 20 980 1,000
July 14, 1999 3,000 30 1,470 1,500
November 23, 1999 2,000 20 980 1,000
November 29, 1999 2,000 20 980 1,000
December 3, 1999 20,000 200 9,800 10,000
December 9, 1999 2,000 20 980 1,000
December 13, 1999 10,000 100 4,900 5,000
December 20, 1999 20,000 200 9,800 10,000
December 21, 1999 4,000 40 1,960 2,000
Not less per period (128,864) (128,864)
Total 2,760,000 $ 27,600 $ 107,390 $ (128,864) $ 6,126
2001
March 31, 2000 2,760,000 $ 27,600 $ 107,390 (128,864) $ 6,126
June 26, 2000 35,000 330 34,650 35,000
July 18, 2000 21,000 210 20,790 21,000
July 19, 2000 3,000 30 2,970 3,000
July 21, 2000 25,000 250 24,750 25,000
August 1, 2000 13,000 130 12,870 13,000
August 4, 2000 2,000 20 1,980 2,000
November 21, 2000 2,000 20 1,980 2,000
Net loss per period (110,579) (110,578)
2,861,000 $ 28,610 $ 207,380 $ (239,442) $ (3,452)
The accompanying notes are an integral part of these financial
statements
13
TRADING SOLUTIONS.COM, INCORPORATED
STATEMENT OF CASH FLOWS - INDIRECT METHOD
For the year ended March 31, 2001 and from date of inception to year
end March 31, 2000
2001 2000
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) $ (110,578) $ (128,864)
Adjustment to reconcile net income to net cash
provided by operating activities
Depreciation 840 176
Compensation expense 34,000
Increase in other receivables (1,519) (176)
Increase in current liabilities 6,643 1,371
NET CASH PROVIDED BY OPERATING ACTIVITIES (104,614) (93,493)
INVESTING ACTIVITIES
Purchase of furniture and equipment 1,073 2,806
NET CASH USED INVESTING ACTIVITIES 1,073 2,806
FINANCING ACTIVITIES
Sale of common stock 101,000 100,990
Short term borrowing 3,000
Payment of short term borrowing (3,000)
NET CASH REALIZED FROM FINANCING ACTIVITIES 101,000 100,990
INCREASE IN CASH AND CASH EQUIVALENTS (4,687) 4,691
Cash and cash equivalents at the beginning
of the year 4,691 0
CASH AND CASH EQUIVALENTS $ 4 $ 4,691
Supplemental disclosure of financing activities
Interest paid during he period from date of
inception to March 31, 2000 $ 14
The accompanying notes are an integral part of these financial
statements
14
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Nature of the business - Trading Solutions.Com, Inc (the
"Company) is designed to provide education for people
interested in on line investing. The Company also intends
to establish a corporate trading account and manage money.
The Company further intends to establish or acquire an e-
commerce business to link with the trading school.
Pervasiveness of estimates - The preparation of financial
statements in conformity with generally accepted
accounting principles requires management to make
estimates and assumptions that affect the reported amounts
of assets, 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
these estimates.
Cash and cash equivalents - For financial statement
presentation purposes, the Company considers all short
term investments with a maturity date of three months or
less to be cash equivalents.
Property and equipment - Property and equipment are
recorded at cost. Maintenance and repairs are expensed as
incurred; major renewals and betterments are capitalized.
When items of property or equipment are sold or retired,
the related costs and accumulated depreciation are removed
from the accounts and any gain or loss is included in
income.
Depreciation is provided using the straight-line method,
over the useful lives of the assets.
Income taxes - Income taxes are provided for the tax
effects of transactions reported in the financial
statements and consist of taxes currently due plus
deferred taxes related primarily to differences between
the recorded book basis and the tax basis of assets and
liabilities for financial and income tax reporting. The
deferred tax assets and liabilities represent the future
tax return consequences of those differences, which will
either be taxable or deductible when the assets and
liabilities are recovered or settled. Deferred taxes are
also recognized for operating losses that are available to
offset future taxable income.
Stock options -Stock that is issued for services rendered
are recorded at the fair value of the stock in the year
that the stock is given and recorded as an expense in the
same year.
NOTE 2:BACKGROUND
The Company was incorporated under the laws of the State of
Nevada on May 14,1999. The principal activities of the Company,
from the beginning of the development stage, have been
organizational matters and the sale of stock.
15
NOTE 3:EQUIPMENT AND FURNITURE
The following is a summary of fixed asset classifications,
accumulated depreciation and depreciable lives for the Company at
March 31 2001 and 2000.
Useful life
Years 2001 2000
Computer equipment 5 $ 2,606 $ 2,206
Office furniture 10 1,273 600
Total 3,879 2,806
Accumulated depreciation (1,016) (176)
Net equipment and furniture $ 2,863 $ 2,630
Depreciation expense for the period from date of inception to
year-end March 31, 2001 and 2000 was $840 and $ 176
respectively.
NOTE 4: COMMON STOCK
Founders stock - At incorporation the Company issued stock to the
founders of the corporation. These shares totaled 2,495,000
shares and were issued for consideration of $.001 per share.
Proceeds from these sales were $2,495. At the organizational
meeting of the board of directors it was voted on to issue stock
options of the Company's common stock to certain officers of the
corporation, a key employee of a non affiliated company and the
non affiliated company. These options are to be exercised at
$.10 a share and have an expiration date of December 31, 2002.
These options are callable at $.02 per share by the Company with
a 30 day notice. A total of 85,000 shares were voted on for the
options of which 85,000 shares of the options were exercised at
September 30, 1999. Total proceeds from these sales were $8,500.
The fair market value at the date the options were granted was
$.50 a share. Therefore, the Company has recognized $ 34,000 in
compensation expense for the period.
Public stock offering - During the period ended March 31, 2000
the Company sold solely to accredited and/or sophisticated
investors its common stock. Each share had a par value of $.001
a share and was offered to the investors at $.50 a share. The
stock was sold during various times during the period from date
of inception to March 31, 2000 to 37 different investors buying a
total of 180,000 shares of common stock. Total proceeds, from
the offering, as of the period ended March 31, 2000 were $90,000.
Initial Public Offering-During the year ended March 31, 2001, the
Company initiated a public stock offering of three hundred
thousand of its common shares. As of March 31, 2001 $101,000 was
raised from the sale of 101,000 shares. The Offering closed in
July 2000.
NOTE 5: INCOME TAXES
The benefit for income taxes from operations consisted of the
following components: current tax benefit of $35,916 and $19,480
for the years 2001 and 2000 resulting from a net loss before
income taxes, and a deferred tax expense of $35,916 and $19,480
resulting from a valuation allowance recorded against the
deferred tax asset resulting from net operating losses. Net
operating loss carryforward will expire in 2021 and 2020.
The valuation allowance will be evaluated at the end of each
year, considering positive and negative evidence about whether
the asset will be realized. At that time, the allowance will
either
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be increased or reduced; reduction would result in the complete
elimination of the allowance if positive evidence indicates that
the value of the deferred tax asset is no longer required.
NOTE 6: RELATED PARTY TRANSACTIONS
The Company entered into an agreement with one of its
shareholders to provide assistance to the Company in the
formation of its corporate structure and to use their contacts in
assisting with the development of a public market for the
Company's common stock. The agreement calls for the shareholder
to be paid a total of $22,000 of which $17,000 and $5,000 was
paid for the period ended March 31, 2001 and 2000. Two thousand
additionally was paid for additional services in 2001. The
Company is to further provide support services such as office
space and telephone services for which the Company will be billed
separately. Total cash paid for these additional services as of
March 31, 2001 and 2000 was $1000 and 1,615 respectively.
The Company also entered into an agreement with another
shareholder to provide consulting services to the Company. As of
March 31, 2001 and 2000 $30,500 and $11,300 was paid
respectively.
There is an agreement with one of the founders to provide support
services to the Company. The total amount paid, as of March 31,
2001 and 2000 was $4,700 and $9,500 respectively.
NOTE 7: GOING CONCERN
From the date of inception to March 31, 2001 the Company has net
losses from operating activities which raise substantial doubt
about its ability to continue as a going concern.
Management will work to establish a local market niche for each
one of its trading schools by advertising in local newspapers and
radio. This is intended to create public awareness of the
Company's name and its services.
Management also intends to affiliate with professional traders to
teach online classes and seminars in real-time broadcasting. The
Company also intends to continually invest in its web site
infrastructure as needed for upgrades, incorporation of new
features and keeping up with the changing internet technology.
The Company will establish an on line store that will offer
literature such as books, newspapers and newsletters that will
target online investors.
In order to attract and retain quality instructors the Company
plans to grant each participating instructor the opportunity to
be promoted on an exclusive basis by the Company's web site.
The Company's ability to continue as a going concern is dependent
upon a successful public offering and ultimately achieving
profitable operations.
There is no assurance that the Company will be successful in its
efforts to raise additional proceeds or achieve profitable
operations. The financial statements do not include any
adjustments that might result from the outcome of this
uncertainty.
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NOTE 8: SUBSEQUENT EVENT
On May 7, 2001 the Company entered into discussions with another
company to exchange stock to acquire this non public company.
The details of this transaction has not formalized as of the
audit date.
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