U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2002
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
Commission File No. 333-85787
TRADING SOLUTIONS.COM, INC.
(Exact name of small business issuer as specified in its charter)
NEVADA 880425691
(State or Other Jurisdiction of (IRS Employer
Incorporation or Organization) Identification No.)
2 RODEO COURT, TORONTO, ONTARIO CANADA M2M 4M3
(Address of principal executive offices)
416-512-2356
(Issuer's telephone number)
(Former name, address and fiscal year, if changed since last report)
Check whether the issuer (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or for
such shorter period that the issuer was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days. Yes [X] No
[ ]
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE
PRECEDING FIVE YEARS:
Check whether the registrant has filed all documents and reports required to be
filed by Sections 12, 13, or 15(d) of the Exchange Act subsequent to the
distribution of securities under a plan confirmed by a court. Yes [ ]
No [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS:
State the number of shares outstanding of each of the issuer's classes of common
equity, as of March 31, 2002: 18,403,500 shares of common stock, par value
$0.001.
Transitional Small Business Format: Yes [ ] No [ X ]
FORM 10-QSB
TRADING SOLUTIONS.COM, INC.
INDEX
Page
PART I. Financial Information 3
Accountants' Review Report 4
Consolidated Balance Sheets as of March 31, 2002 and 2001 5
Consolidated Statements of Comprehensive Income (Loss) for
the Six Months Ended March 31, 2002 and for the Year Ended
March 31, 2001 6
Consolidated Statements of Stockholders' Equity (Deficit) From
the Date of Inception (May 14, 1999 through March 31, 2002) 8
Consolidated Statements of Cash Flows for the Six Months
Ended March 31, 2002 and for the Year Ended March 31, 2001 10
Notes to Consolidated Financial Statements 11
Management's Discussion and Analysis or
Plan of Operation 15
Other Information
Exhibits and Reports on Form 8K 16
PART II.
SIGNATURES 17
2
PART I.
FINANCIAL INFORMATION
In the opinion of management, the accompanying unaudited financial
statements included in this Form 10-QSB reflect all adjustments (consisting only
of normal recurring accruals) necessary for a fair presentation of the results
of operations for the periods presented. The results of operations for the
periods presented are not necessarily indicative of the results to be expected
for the full year.
3
To the Board of Directors
Trading Solutions.com Incorporated
Toronto, Ontario Canada
We have reviewed the accompanying consolidated balance sheet of Trading
Solutions.com Incorporated and Subsidiary (A Development Stage Enterprise) as of
March 31, 2002 and the related statements of income and retained earnings,
comprehensive income, and cash flows for the six months then ended, in
accordance with Statements on Standards for Accounting and Review Services
issued by the American Institute of Certified Public Accountants. All
information included in these financial statements is the representation of the
Company's management.
A review consists principally of inquiries of Company personnel and analytical
procedures applied to financial data. It is substantially less in scope than an
audit in accordance with generally accepted auditing standards, the objective of
which is the expression of an opinion regarding the financial statements taken
as whole. Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that should
be made to the accompanying financial statements in order for them to be in
conformity with generally accepted accounting principles.
The financial statements of Trading Solutions.com Incorporated for the year
ended March 31, 2001 were audited by other accountants and they expressed an
unqualified opinion on them in their report dated June 27, 2001, but they have
not performed any auditing procedures since that date.
Respectfully,
/s/ Freedman & Goldberg
- -------------------------
Freedman & Goldberg
Certified Public Accountants
Farmington Hills, Michigan
May 2, 2002
4
TRADING SOLUTIONS.COM INC. AND SUBSIDIARY
(A Development Stage Company)
CONSOLIDATED BALANCE SHEETS
March 31, 2002 and 2001
ASSETS
2002 2001
---------------------
Current Assets
Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 60 $ -0-
Net Current Assets of Discounted Operations. . . . . . . . . . . . . -0- 1,699
- -----------------------------------------------------------------------------------------------
Total Current Assets . . . . . . . . . . . . . . . . . . . . . 60 1,699
Property and Equipment
Net property and Equipment of Discounted Operations. . . . . . . . . -0- 2,863
Other Assets
Trademark, Net of Accumulated Amortization of $179 . . . . . . . . . 4,082 -0-
- -----------------------------------------------------------------------------------------------
Total Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 4,142 $ 4,562
===============================================================================================
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current Liabilities
... .Accounts Payable - Trade . . . . . . . . . . . . . . . . . . . . . . $ 11,452 $ -0-
... .Accrued Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . 32,852 -0-
... .Shareholder Advances . . . . . . . . . . . . . . . . . . . . . . . . 44,446 -0-
... .Net Current Liabilities of Discontinued Operations . . . . . . . . . 6,384 8,014
- -----------------------------------------------------------------------------------------------
Total Current Liabilities. . . . . . . . . . . . . . . . . . . . . . 95,134 8,014
- -----------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------
Total Liabilities. . . . . . . . . . . . . . . . . . . . . . . . . 95,134 8,014
- -----------------------------------------------------------------------------------------------
Stockholders' Equity (Deficit)
Common Stock, $.01 Par Value, 20,000,000 Shares Authorized, 18,403,500
and 2,861,000, Shares Issued and Outstanding, Respectively . . . . . .
Additional Paid-In Capital. . . . . . . . . . . . . . . . . . . . . . . 44,153 28,610
Accumulated Deficit During The 207,380 207,380
Development Stage . . . . . . . . . . . . . . . . . . . . . . . . . .
Accumulated Other Comprehensive income. . . . . . . . . . . . . . . . . (344,133) (239,442)
1,608 -0-
- -----------------------------------------------------------------------------------------------
Total Stockholders' Equity (Deficit). . . . . . . . . . . . . . . . . ( 90,992) (3,452)
- -----------------------------------------------------------------------------------------------
Total Liabilities and Stockholders'
Equity (Deficit). . . . . . . . . . . . . . . . . . . . . . . . $ 4,142 $ 4,562
===============================================================================================
See accompanying accountants review report and notes to financial statements
5
TRADING SOLUTIONS.COM INC. AND SUBSIDIARY
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF INCOME (LOSS)
For the Six Months Ended March 31, 2002 and for the Year Ended March 31, 2001
Cumulative From
Inception
May 14, 1999 to
March 31, 2002 March 31, 2002 March 31, 2001
---------------- ---------------- ----------------
Income . . . . . . . . . . . . . . . . . . . . $ -0- $ -0- $ -0-
- ----------------------------------------------------------------------------------------------------
Expenses
Amortization . . . . . . . . . . . . . . . . 179 179 -0-
Auto Expense . . . . . . . . . . . . . . . . 944 944 -0-
Franchise taxes. . . . . . . . . . . . . . . 1,300 1,300 -0-
Office . . . . . . . . . . . . . . . . . . . 1,029 1,018 -0-
Professional Fees. . . . . . . . . . . . . . 32,976 26,253 -0-
Rent . . . . . . . . . . . . . . . . . . . . 944 944 -0-
Telephone. . . . . . . . . . . . . . . . . . 556 556 -0-
Travel and Entertainment . . . . . . . . . . 1,289 1,289 -0-
- ----------------------------------------------------------------------------------------------------
Total Expenses . . . . . . . . . . . . . . 39,217 32,483 -0-
- ----------------------------------------------------------------------------------------------------
Operating Loss . . . . . . . . . . . . . . . . ( 39,217) ( 32,483) -0-
- ----------------------------------------------------------------------------------------------------
Other Income (Expense) . . . . . . . . . . . . (219) (219) -0-
Interest Expense
Loss on Expiration of Land Options . . . . . ( 63,407) -0- -0-
- ----------------------------------------------------------------------------------------------------
Total Other Income (Expense). . . . . . . . ( 63,626) (219) -0-
- ----------------------------------------------------------------------------------------------------
Loss From Continuing Operations. . . . . . . . ( 102,843) ( 32,702) -0-
Loss on Sale of Discontinued
Operations, Net of Income Taxes. . . . . . . (2,674) -0- -0-
Income From Discontinued
Operations, Net of Income Taxes. . . . . . . (238,616) -0- ( 110,578)
- ----------------------------------------------------------------------------------------------------
Net Income (Loss). . . . . . . . . . . . . . . $ (344,133) $ ( 32,702) $ ( 110,578)
====================================================================================================
Weighted Average Number of Shares Outstanding. 5,652,086 18,403,500 2,828,334
====================================================================================================
Loss From Continuing Operation Per
Share. . . . . . . . . . . . . . . . . . . . $ (.02) $ (.00) $ (.00)
====================================================================================================
Net Loss Per Share . . . . . . . . . . . . . . $ (.06) $ (.00) $ (.04)
====================================================================================================
See accompanying accountants review report and notes to financial statements
6
TRADING SOLUTIONS.COM INC. AND SUBSIDIARY
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF INCOME (LOSS) CONTINUED
For the Six Months Ended March 31, 2002 and for the Year Ended March 31, 2001
Commutative From
Inception
May 14, 1999 to
March 31, 2002 2002 2001
----------------- ------ -------
Net income (Loss) . . . . . . . . $(344,133) $(32,702) $(110,578)
Other Comprehensive Loss,
net of Tax:
Foreign currency translation
adjustment. . . . . . . . . . 1,608 1,608 -0-
- ----------------------------------------------------------------------------
Comprehensive Income (Loss) . . . $(342,525) $(31,094) $(110,578)
============================================================================
See accompanying accountants review report and notes to financial statements
7
TRADING SOLUTIONS.COM INC. AND SUBSIDIARY
(A Development Stage Company)
CONSOLIDATED STATEMENTS STOCKHOLDERS' EQUITY (DEFICIT)
From the date of Inception (May 14, 1999 through March 31, 2002)
Accumulated
Common Common Additional Other
Stock Stock Paid-In Capital Accumulated Comprehensive
Shares Amount Deficit Income Total
Shares Issued
May 14, 1999 Founders. . . 2,495,000 $24,950 $ (22,455) $ -0- -0- $ 2,495
May 14, 1999 Options . . . 85,000 850 41,645 -0- -0- 42,495
May 18, 1999 . . . . . . . 14,000 140 6,860 -0- -0- 7,000
May 21, 1999 . . . . . . . 2,000 20 980 -0- -0- 1,000
May 24, 1999 . . . . . . . 3,000 30 1,470 -0- -0- 1,500
May 27, 1999 . . . . . . . 2,000 20 980 -0- -0- 1,000
June 2, 1999 . . . . . . . 10,000 100 4,900 -0- -0- 5,000
June 3, 1999 . . . . . . . 2,000 20 980 -0- -0- 1,000
June 4, 1999 . . . . . . . 4,000 40 1,960 -0- -0- 2,000
June 7, 1999 . . . . . . . 2,000 20 980 -0- -0- 1,000
June 13, 1999. . . . . . . 2,000 20 980 -0- -0- 1,000
June 16, 1999. . . . . . . 3,000 30 1,470 -0- -0- 1,500
June 17, 1999. . . . . . . 10,000 100 4,900 -0- -0- 5,000
June 22, 1999. . . . . . . 2,000 20 980 -0- -0- 1,000
June 25, 1999. . . . . . . 1,000 10 490 -0- -0- 500
June 27, 1999. . . . . . . 6,000 60 2,940 -0- -0- 3,000
June 29, 1999. . . . . . . 12,000 120 5,880 -0- -0- 6,000
June 30, 1999. . . . . . . 2,000 20 900 -0- -0- 1,000
July 1, 1999 . . . . . . . 15,000 150 7,350 -0- -0- 7,500
July 2, 1999 . . . . . . . 14,000 140 6,860 -0- -0- 7,000
July 5, 1999 . . . . . . . 3,000 30 1,470 -0- -0- 1,500
July 8, 1999 . . . . . . . 6,000 60 2,940 -0- -0- 3,000
July 12, 1999. . . . . . . 2,000 20 980 -0- -0- 1,000
July 14, 1999. . . . . . . 3,000 30 1,470 -0- -0- 1,500
November 23, 1999. . . . . 2,000 20 980 -0- -0- 1,000
November 29, 1999. . . . . 2,000 20 980 -0- -0- 1,000
December 3, 1999 . . . . . 20,000 200 9,800 -0- -0- 10,000
December 9, 1999 . . . . . 2,000 20 980 -0- -0- 1,000
December 13, 1999. . . . . 10,000 100 4,900 -0- -0- 5,000
December 20, 1999. . . . . 20,000 200 9,800 -0- -0- 10,000
December 21, 1999. . . . . 4,000 40 1,960 -0- -0- 2,000
Net Loss for the Period
Ended March 31, 2000. . . . -0- -0- -0- (128,864) -0- (128,864)
- ---------------------------------------------------------------------------------------------------------------
Balance, March 31, 2000. . . 2,760,000 27,600 107,390 (128,864) -0- 6,126
Shares Issued
June 26, 2000. . . . . . . 35,000 350 34,650 -0- -0- 35,000
July 18, 2000. . . . . . . 21,000 210 20,790 -0- -0- 21,000
July 19, 2000. . . . . . . 3,000 30 2,970 -0- -0- 3,000
July 21, 2000. . . . . . . 25,000 250 24,750 -0- -0- 25,000
August 1, 2000 . . . . . . 13,000 130 12,870 -0- -0- 13,000
August 4, 2000 . . . . . . 2,000 20 1,980 -0- -0- 2,000
November 21, 2000. . . . . 2,000 20 1,980 -0- -0- 2,000
Net Loss for the Year Ended
March 31, 2001 . . . . . . -0- -0- -0- (110,578) -0- (110,578)
- ---------------------------------------------------------------------------------------------------------------
Balance, March 31, 2001. . . 2,861,000 28,610 207,380 (239,442) -0- (3,452)
August 18, 2001 Exchange
Of Shares for Springland
Beverages, Inc.. . . . . 15,542,500 15,543 -0- -0- -0- 15,543
Net Loss For the Six Months
Ended September 30, 2001. . -0- -0- -0- ( 71,989) -0- (71,989)
- ---------------------------------------------------------------------------------------------------------------
Balance, September 30, 2001. 18,403,500 44,153 207,380 (311,431) -0- (59,898)
Net Loss For the Six Months
Ended March 31,2002. . . . -0- -0- -0- ( 32,702) 1,608 (31,094)
- ---------------------------------------------------------------------------------------------------------------
Balance, March 31, 2002. . . 18,403,500 $44,153 $ 207,380 $ (344,133) $ 1,608 $ (90,992)
===============================================================================================================
See accompanying accountants review report and notes to financial statements
8
TRADING SOLUTIONS.COM INC. AND SUBSIDIARY
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Six Months Ended March 31, 2002 and the Year Ended March 31, 2001
Cumulative From
Inception
May 14, 1999 to
March 31, 2002 March 31, 2002 March 31, 2001
- ---------------------------------------------------------------------------------------------------
Cash Flows From Operations
Net Loss From Continuing Operations. . . . . $ (102,843) $ ( 32,702) $ -0-
Adjustments to Reconcile Net Income to Net
Cash Provided By Operating Activities. .
Amortization . . . . . . . . . . . . . 179 179 -0-
Land Option Acquired in Stock Exchange 60,260 -0- -0-
Foreign Currency Translation Adjustment 1,608 1,608
(Increase) Decrease.)
Other Assets . . . . . . . . . . .. ( 4,261) ( 4,261)
Increase (Decrease) In:. . . . . . . . -0-
Accounts Payable and Accrued Expenses. . 35,294 29,404
- ----------------------------------------------------------------------------------------------------
Net Cash Used In Continuing Operations. . ( 9,763) ( 5,772) -0-
Net Cash Used In Discontinued Operations. (198,111) -0- ( 104,614)
- ----------------------------------------------------------------------------------------------------
Net Cash Used In Operating Activities. . . (207,874) ( 5,772) ( 104,614)
Cash Flows From Investing Activities
Equipment Purchases. . . . . . . . . . . . . ( 3,879) -0- ( 1,073)
- ----------------------------------------------------------------------------------------------------
Net Cash Used In Investing Activities. . ( 3,879) -0- ( 1,073)
Cash Flows From Financing Activities
Proceeds From Shareholder Advances . . . . . 8,056 4,087 -0-
Short Term Borrowing . . . . . . . . . . . 3,000 -0- -0-
Payment of Short Term Borrowing. . . . . . (3,000) -0- -0-
Issuance of Common Stock . . . . . . . . . 201,990 -0- 101,000
Cash From Subsidiary Acquired Via Stock
Exchange . . . . . . . . . . . . . . . . 1,767 -0- -0-
- ----------------------------------------------------------------------------------------------------
Net Cash Provided By Financing
Activities . . . . . . . . . . . . . 211,813 4,087 101,000
- ----------------------------------------------------------------------------------------------------
Increase (Decrease) in Cash . . . . . . . . . 60 ( 1,685) ( 4,687)
Balance, Beginning of Period. . . . . . . . . -0- 1,745 4,691
- ----------------------------------------------------------------------------------------------------
Balance, End of Period. . . . . . . . . . . . $ 60 $ 60 $ 4
====================================================================================================
See accompanying accountants review report and notes to financial statements
9
TRADING SOLUTIONS.COM INC. AND SUBSIDIARY
(A Development Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
This summary of significant accounting policies of Trading Solutions.com
Incorporated and Subsidiary (the Company) is presented to assist in
understanding the Company's financial statements. The financial statements and
notes are representations of the Company's management who is responsible for
their integrity and objectivity. These accounting policies conform to generally
accepted accounting principles and have been consistently applied in the
preparation of the financial statements.
A. Nature of Operations - Trading Solutions.com Incorporated was
incorporated under the laws of the State of Nevada on May 14, 1999. The
Company was established to provide educational services for people
interested in on-line investing. The Company also intended to establish a
corporate trading account and manage money. The Company further intended to
establish or acquire an e-commerce business to link with the trading
school. Since its inception, the Company has been in a developmental stage.
The only activities have been organizational matters and the sale of stock.
The company ceased its development of the above business on August 18,
2001.
In August 2001, the Company acquired Springland Beverages, Inc., a wholly
owned subsidiary. Springland Beverages, Inc. is also in a developmental
stage and is pursuing the bottled water and related beverage market. The
only activities of Springland Beverages, Inc. has been the acquisition of a
option to purchase land and the registration of trademarks in the United
States and Canada.
B. Basis of Consolidation - The consolidated financial statements include
the accounts of Springland Beverages, Inc., a wholly owned subsidiary
located in Toronto, Ontario. All significant intercompany accounts and
transactions have been eliminated in consolidation.
C. Revenues - The Company recognizes revenue at time services are rendered
for educational services and upon shipment for beverage sales.
E. For purposes of the statement of cash flows, the Company considers all
short-term debt securities purchased with a maturity of three months or
less to be cash equivalents.
F. Property, Equipment and Related Depreciation - Property and equipment
are recorded at cost. Depreciation is computed by the straight-line method
for financial reporting purposes and accelerated methods for tax reporting
purposes. Estimated lives range from five to ten years. Depreciation
charged to discontinued operations was $-0- and $840 for the periods ended
March 31, 2002 and 2001, respectively. When properties are disposed of, the
related costs and accumulated depreciation are removed from the respective
accounts and any gain or loss on disposition is recognized currently.
Maintenance and repairs which do not improve or extend the lives of assets
are expensed as incurred.
G. In accordance with SFAS No. 121, the Company reviews its long-lived
assets, including property and equipment, goodwill and other identifiable
intangibles for impairment whenever events or changes in circumstances
indicate that the carrying amount of the assets may not be fully
recoverable. To determine recoverability of its long-lived assets, the
Company evaluates the probability that future undiscounted net cash flows,
without interest charges, will be less than the carrying amount of the
assets. Impairment is measured at fair value. The Company had no impairment
of assets during the periods ended December 31, 2001 and 2000.
H. Use 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 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.
I. Income Taxes - The Company accounts for income taxes under the
provisions of SFAS No. 109, "Accounting for Income Taxes," which requires
recognition of deferred tax assets and liabilities for the expected future
tax consequences of events that have been included in the Company's
consolidated financial statements or tax returns. Under this method,
deferred tax assets and liabilities are determined based on the differences
between the financial accounting and tax basis of assets and liabilities
using enacted tax rates in effect for the year in which the differences are
expected to reverse.
10
J. Foreign Currency Translation - The income statements of foreign
operations are translated into U.S. dollars at rates of exchange in effect
each month. The balance sheets of these operations are translated at
period-end exchange rates, and the differences from historical exchange
rates are reflected in stockholders' equity as cumulative other
comprehensive income. During the periods ended March 31, 2002 and 2001,
there was $1,608, and $-0- unrealized currency translation adjustments.
K. Change in Fiscal Year - On August 28, 2001, the Board of Directors
determined it is in the Company's best interest to change its fiscal year
to be the same as its wholly owned subsidiary. Therefore, the Company has
changed its fiscal year from March 31 to September 30.
NOTE 2. PROPERTY AND EQUIPMENT
The major components of property and equipment are as follows:
March 31, 2002 March 31, 2001
--------------- ---------------
Computer Equipment. . . . . . . $ -0- $ 2,606
Office Furniture. . . . . . . . -0- 1,273
- -----------------------------------------------------------------
-0- 3,879
Less: Accumulated Depreciation -0- 1,016
- -----------------------------------------------------------------
Net Property and Equipment. . . $ -0- $ 2,863
================================
The above property and equipment were all used in the education services
business segment which was discontinued on August 18, 2001. (See Note 11)
NOTE 3. SHAREHOLDER ADVANCES
As of March 31, 2002 the Company owed $44,446 to an officer/stockholder for
various advances made to the Company's wholly owned subsidiary. The
advances are unsecured and due on demand.
NOTE 4. COMMON STOCK
On August 18, 2001, the company exchanged 15,542,500 shares of its common
stock in exchange for 100% of the outstanding stock of Springland
Beverages, Inc. (See Note 9)
During the year ended March 31, 2001, the Company initiated a public stock
offering of 300,000 shares of its common stock. The offering was closed in
July 2000 and raised $101,000 from the sale of 101,000 shares of common
stock.
NOTE 5. PER SHARE COMPUTATION
Earnings per share have been calculated based on the weighted average
number of shares outstanding.
NOTE 6. INCOME TAXES
The provision for income taxes consists of the following components:
March 31, 2002 March 31, 2001
---------------- ----------------
Current:
Current Tax Benefit. $ 868 $ 35,843
Deferred Tax Expense (868) (35,843)
- ---------------------------------------------------------
Net Tax Expense. . $ -0- $ -0-
=========================================================
11
Deferred taxes are detailed as follows:
March 31, 2002 March 31, 2001
-------------- --------------
Deferred Income Tax Assets
Net Operating Loss Available. $ 81,091 $ 79,997
Valuation Allowance . . . . . 81,091 79,997
- ---------------------------------------------------------------
Net Deferred Income Tax Asset $ -0- $ -0-
===============================================================
The valuation allowance is 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 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 assets is no longer
required.
NOTE 7. RELATED PARTY TRANSACTION
During the year ended March 31, 2001, the Company paid $17,000 to a shareholder
for assistance in the formation of its corporate structure and for the use of
their contacts in assisting with the development of a public market for the
Company's common stock. The Company also paid $2,000 to the same shareholder
for additional services.
During the year ended March 31, 2001, the Company paid $30,500 to another
shareholder for consulting services.
During the year ended March 31, 2001, the Company paid $4,700 to one of the
Company's founders for support services.
NOTE 8. CASH FLOW DISCLOSURES
On August 18, 2001, the Company issued 15,542,500 shares of its common stock in
exchange for 100% of the outstanding stock on Springland Beverages, Inc. in a
non-cash transaction. (See Note 9).
NOTE 9. ACQUISITION OF SUBSIDIARY
On August 18, 2001, the Company acquired 100% of the outstanding stock of
Springland Beverages, Inc., a Canadian corporation, via the issuance of
15,542,500 shares of its common stock valued at par value ($.001 per share) or
$15,543. Springland Beverages, Inc. is in a developmental stage and is pursuing
the bottled water and related beverage market. The only activities of
Springland Beverages, Inc. has been the acquisition of a option to purchase land
and the registration of trademarks in the United States and Canada. The
exchange created a change in control of the Company. As a result, the majority
shareholder of Springland Beverages, Inc. became the majority shareholder and
also became the sole director and officer of the company. The Company accounted
for this acquisition using the purchase method of accounting. The purchase
price was allocated as follows:
Cash. . . . . . . . . $ 1,767
Land Option . . . . . 60,260
- ------------------------------
Total Assets. . . 62,027
- ------------------------------
Accounts Payable. . . 5,881
Accrued Expenses. . . 4,213
Shareholder Advances. 36,390
- ------------------------------
Total Liabilities 46,484
- ------------------------------
Net Assets Acquired . $15,543
==============================
On a pro-forma basis, reflecting this acquisition as if it had taken place at
the beginning of the respective periods, net revenues, net earnings (loss) and
earnings (loss) per share for the six months ended March 31, 2002 and for the
year ended March 31, 2001 would have been as follows:
12
March 31, 2002 March 31, 2001
---------------- ----------------
Net Revenues . . . $ -0- $ -0-
======================================================
Net Loss . . . . . (32,702) $ (126,782)
======================================================
Net Loss per Share $ ( .00) $ (.01)
======================================================
NOTE 10. SEGMENTAL DATA
The Company's operations are classified into two principal reportable segments
that provide different products or services. Separate management of each
segment is required because each business unit is subject to different marketing
strategies. Below is summarized segmental data for the six months ended March
31, 2002 and for the year ended March 31, 2001.
Education Services Beverage Market Total
3/31/02 3/31/01 3/31/02 3/31/01 3/31/02 3/31/01
---------------------- ------------------ --------------------
External Revenue. . . . . . . . . . -0- 22,963 -0- -0- 8,000 22,963
Intersegment Revenue. . . . . . . . -0- -0- -0- -0- -0- -0-
Interest Revenue. . . . . . . . . . -0- -0- -0- -0- -0- -0-
Interest Expense. . . . . . . . . . -0- -0- 219 -0- 219 -0-
Depreciation and Amortization . . . -0- 840 179 -0- 179 840
Profit (Loss) . . . . . . . . . . . -0- (110,578) (32,702) -0- (32,702) (110,578)
Total Assets. . . . . . . . . . . . -0- 4,562 4,142 -0- 4,142 4,562
Expenditures for Long-Lived
Assets -0- 1,073 -0- -0- -0- 1,073
NOTE 10. SEGMENTAL DATA (CONTINUED)
The education services segment derives its revenues from the service fees charge
for educational services relating to on-line investing. Upon acquisition of its
subsidiary in August 2001, the Company discontinued the development of this
business.
The beverage market segment will derive its revenues from the sale of bottled
water to distributors initially in the United States. As of March 31, 2002, the
Company has not begun any operations for this segment.
The Company maintains separate records for each segment. The accounting
policies applied by each of the segments are the same as those used by the
Company in general.
NOTE 11. DISCONTINUED OPERATIONS
In August 18, 2001, the Company discontinued the development of its educational
service business segment. This disposal has been accounted for as a
discontinued operation and, accordingly, its net assets (liabilities) have been
segregated from continuing operations in the accompanying consolidated balance
sheets, and its operating results are segregated and reported as discontinued
operations in the accompanying consolidated statement of income and cash flows.
Information relating to the discontinued operations of the educational service
business segment for the six months ended March 31, 2002 and the year ended
March 31, 2001 is as follows:
13
March 31, 2002 March 31, 2001
Income. . . . . . . . . . $ -0- $ 22,963
- ------------------------------------------------------------
Expenses
Advertising . . . . . . -0- 17,975
Bank Charges. . . . . . -0- 149
Consulting Fees . . . . -0- 63,984
Depreciation. . . . . . -0- 840
Dues and Subscriptions. -0- 453
Office Supplies . . . . -0- 5,808
Postage . . . . . . . . -0- 1,424
Professional Fees . . . -0- 13,722
Rent. . . . . . . . . . -0- 3,600
Tax and Licenses. . . . -0- 180
Telephone . . . . . . . -0- 3,292
Travel. . . . . . . . . -0- 21,314
- ------------------------------------------------------------
Total Expenses. . . . -0- 132,741
- ------------------------------------------------------------
Net Income (Loss) . . $ -0- $ (109,778)
============================================================
NOTE 11. DISCONTINUED OPERATIONS (CONTINUED)
The net assets and liabilities of the discontinued operations of the education
services business segment included in the accompanying consolidated balance
sheets as of March 31, 2002 and 2001 are as follows:
March 31, 2002 March 31, 2001
---------------- ----------------
Current Assets
Cash . . . . . . . . . $ -0- $ 4
Other Receivables. . . -0- 1,695
Property and Equipment, Net. -0- 2,863
Current Liabilities
Accounts Payable . . . (4,500) (7,214)
Accrued Expenses . . . (1,884) (800)
- ----------------------------------------------------------------
Net Assets (Liabilities) . . $ (6,384) $ (3,452)
================================================================
NOTE 12. GOING CONCERN
From the date of inception to March 31, 2002, the Company has net losses from
operations which raise substantial doubt about its ability to continue as a
going concern.
Management has discontinued its efforts to develop an educational service
business.
Through the acquisition of its subsidiary, the Company is looking to develop a
business in the bottled water and related beverage market. The Company is
seeking to acquire an operating plant and source of natural spring water. Upon
location of a plant and water source, the Company will need to raise capital to
finance such acquisition and begin marketing its product.
The Company's ability to continue as a going concern is dependent upon the
Company ability to raise capital and acquire or establish a profitable operation
in the bottled water market.
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.
14
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION OR PLAN OF OPERATION
FORWARD-LOOKING STATEMENT NOTICE
When used in this report, the words "may," "will," "expect," "anticipate,"
"continue," "estimate," "project," "intend," and similar expressions are
intended to identify forward-looking statements within the meaning of Section
27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act
of 1934 regarding events, conditions, and financial trends that may affect the
Company's future plans of operations, business strategy, operating results, and
financial position. Persons reviewing this report are cautioned that any
forward-looking statements are not guarantees of future performance and are
subject to risks and uncertainties and that actual results may differ materially
from those included within the forward-looking statements as a result of various
factors.
DESCRIPTION OF THE BUSINESS
The Company operates through its wholly owned subsidiary, Springland
Beverages, Inc., an Ontario, Canada corporation. Springland intends to supply
natural spring water and water related beverages, initially in the U.S. market
but eventually as a global operation.
The Company has registered the trademarks "Springland" and "Aurora" in both
the United States and Canada. The Company is in the process of negotiating the
purchase of an operating beverage plant. The Company intends to identify
operating beverage and beverage related companies for future acquisitions.
Natural spring water is defined by the U. S. Food and Drug Administration
as "bottled water derived from an underground formation from which water flows
naturally to the surface of the earth." Springland's potential source of water
meets this definition as evidenced by studies conducted on the lands including a
reporting letter from the Ontario Ministry of the Environment. The water source
the is under the option held by Springland is located on approximately 62 acres
with two major spings. The Ontario Ministry of the Environment has issued
permits allowing for 150,000 imperial gallons per day for 300 days on an annual
basis. The permits were originally issued in 1984 and subsequently renewed in
1993 until the year 2003.
In the realm of nonalcoholic drinks, consumers spend more money on
carbonated soft drinks than anything else. The sector is dominated by three
major competitors that together control nearly 80% of the global market.
Coca-Cola controls approximately 50% of the market, followed by Pepsi at about
21% and Cadbury Schweppes at 7%. For many years the nonalcoholic sector has
engaged in a power struggle between the Cola War principals, Coke and Pepsi.
The industry giants have begun looking to the non-carbonated beverage sector and
relying on new product introduction for growth.
World wide consumption of natural spring water is a $35 billion market. In
the U.S. water sales rose 13.9% in 1999 to $5.2 billion according to Beverage
Marketing Corporation. The bottled water market is divided into two distinct
categories: non-carbonated which accounts for approximately 91% of bottled water
sales and carbonated which accounts for approximately 9% of bottled water sales.
Bottled water continues to have increased sales. In 2000, the segment rose some
28%. Sales volume rose 8.3% to 5 billion gallons, twice what it was in 1992.
Wholesale dollars increased 9.3%. Currently, per capita consumption of bottled
water is at an all time high of 18.2 gallons.
Following the acquisition of an operating plant, the Company plans to
initiate an aggressive marketing campaign to establish the Springland name. The
Company will strive for corporate brand identification by increasing exposure
within the water and water related industry. The Company intends to develop
sales literature, demonstration materials and direct response promotions. In
addition, the Company intends to use direct mail, fax and telemarketing
campaigns for sales generation. The Company recognizes that advertising and
promotion must be done aggressively in order to accomplish sales goals. Along
with ad campaigns, the Company will release key press releases and reports to
appropriate journals and market specific trade shows. Trade show marketing may
include informational brochures and giveaways.
15
THREE MONTH PERIODS ENDED MARCH 31, 2002 AND MARCH 31, 2001
The Company generated no revenue from operations for the three-month
periods ended March 31, 2002 and March 31, 2001. This is attributable to the
Company ceasing all operations in the online trading school and initiating
activity in the beverage business.
SIX MONTH PERIOD ENDED MARCH 31, 2002
The Company had operating expenses of $32,483 for the six month period
ended March 31, 2002 and interest loss of $219. There is no comparable data for
six month period for March 31, 2001 as the Company changed its fiscal year from
March 31 to September 30 on August 28, 2001. The Company had no expenses during
the year ended March 31, 2001. Expenses in 2002 are attributable to
professional fees and costs associated with changing the Company's focus and
complying with the duties of a publicly held and fully reporting company
pursuant to Section 13 of the Securities Exchange Act of 1934.
As a result of the foregoing, the Company realized a net loss of $31,702
for the six months ended March 31, 2002, compared to a net loss of $0.00 for the
year ended March 31, 2001.
LIQUIDITY AND CAPITAL RESOURCES
At March 31, 2002, the Company had assets consisting of $60 cash and $4,142
in trademark. The Company had total current liabilities of $95,134. The
Company is not currently generating any revenue and depends upon advances from
officers and directors to continue operations. The Company anticipates
acquiring an operating plant and spring water source to begin marketing
Springland Beverages in Canada and the United States. As of the date of this
report, the Company has not identified any such acquisition.
PART II. OTHER INFORMATION
EXHIBITS AND REPORTS ON FORM 8-K
EXHIBITS.
None.
REPORTS ON FORM 8-K
None
16
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned thereunto duly
authorized.
TRADING SOLUTIONS.COM, INC.
Date: May 11, 2002 By:/s/ Ralph Moyal
-------------------
Ralph Moyal
President and Chief Financial Office
17
