UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
FORM 10-KSB
[ X ] ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXHANGE ACT
OF 1934
For the Fiscal Year ended September 30, 2002
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXHANGE
ACT OF 1934 For the transition period from _____ to _____
Commission File Number:
333-85787
TRADING SOLUTIONS.COM, INC.
(Name of small business issuer as specified in its charter)
NEVADA 880425691
(State or other jurisdiction of (I.R.S.Employer Identification Number)
incorporation or organization)
2 RODEO COURT, TORONTO, ONTARIO CANADA M2M 4M3
(Address of principal executive offices)
416-512-2356
(Issuer's telephone number)
SECURITIES REGISTERED UNDER SECTION 12(B) OF THE EXCHANGE ACT:
Title of each class: Name of each exchange
on which registered:
NONE NONE
SECURITIES REGISTERED UNDER SECTION 12(G) OF THE EXCHANGE ACT:
COMMON STOCK, $0.01 PAR VALUE
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
[ ]
On September 30, 2002 the aggregate market value of the voting stock of Trading
Solutions.Com, Inc. held by non-affiliates of the registrant was approximately
$51,053 based upon the average bid and asked prices of such common stock on said
date as reported by PinkSheets. On such date, there were 18,523,500 shares of
common stock of the registrant outstanding.
Documents Incorporated by Reference: None.
Transitional Small Business Disclosure Format: Yes [ ] No [ X ]
FORM 10-KSB
TRADING SOLUTIONS.COM, INC.
INDEX
Page
PART I . Item 1. Description of Business 3
Item 2. Description of Property 4
Item 3. Legal Proceedings 4
Item 4. Submission of Matters to a Vote of Security Holders 4
PART II. Item 5. Market for Common Equity and Related Stockholder Matters 4
Item 6. Management's Discussion and Analysis or Plan of Operation 5
Item 7. Financial Statements 7
Item 8. Changes In and Disagreements with Accountants on Accounting and
Financial Disclosure 7
PART III Item 9. Directors, Executive Officers, Promoters and Control Persons; Compliance
with Section 16(a) of the Exchange Act 7
Item 10. Executive Compensation 8
Item 11. Security Ownership of Certain Beneficial Owners and Management 8
Item 12. Certain Relationships and Related Transactions 9
Item 13. Exhibits and Reports on Form 8-K 9
Item 14. Controls and Procedures 10
Signatures 10
(Inapplicable items have been omitted)
2
PART I
ITEM 1. DESCRIPTION OF BUSINESS
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.
GENERAL
Trading Solutions.com, Inc. was incorporated on May 14, 1999 in the state of
Nevada. The Company originally organized to develop a trading school designed
to educate people interested in online investing. Trading Solutions offered
courses for beginners as well as experienced traders, consisting of theory
sessions linked closely with practical hands-on training. The Company offered
individual training, small group sessions and seminars focusing on online
trading and various computer-related subjects.
The Company was not successful with its online trading school and on August 18,
2001, the Company entered into an exchange agreement with Springland Beverages,
Inc., an Ontario, Canada Corporation. Pursuant to the agreement, the Company
exchanged 15,542,500 shares of common stock for all of the issued and
outstanding shares of Springland Beverages, Inc., making Springland a wholly
owned subsidiary of Trading Solutions. Concurrent with the agreement, there was
a change in control of the Company and the Company changed its business plan to
focus on developing and marketing soft drinks.
Trading Solutions currently operates through Springland Beverages, Inc., our
wholly owned subsidiary. We intend to produce, market and distribute natural
spring water beverages, initially in the United States and eventually
internationally.
OUR BUSINESS
We are in the business of bottling and marketing natural spring water beverages
for distribution in the United States. According to the most recent statistics
from Beverage Marketing Corporation, bottled water represents the fastest
growing segment of the beverage industry and the United States is the largest
market. From 1992 to 2000, annual bottled water consumption in the United
States nearly doubled from 34.1 liters per person to 61.9 liters per person.
Total consumption of bottled water in the United States in 2000 reached five
billion gallons, an increase of 8.3% over 1999. Wholesale industry sales of
bottled water in 2000 climbed to $5.7 billion, an increase of 9.3% over the
previous year.
We do not currently own the rights to any water source for our products,
however, we have identified a potential source of spring water. The water
source is located in Ontario, Canada on approximately 62 acres with two major
springs. These springs appear to meet the United States Food and Drug
Administration's definition of natural spring water as evidenced by a reporting
letter from the Ontario Ministry of the Environment and other studies conducted
on the lands. The Ontario Ministry of the Environment has issued permits
allowing us to draw up to 150,000 imperial gallons of water per day from the
3
springs for 300 days on an annual basis. The permits were originally issued in
1984 and were subsequently renewed in 1993 through 2003. We hope to renew the
permits before they expire, and are currently exploring the possibility of
raising capital to purchase the land containing the springs.
OUR TRADEMARKS
We have registered the Springland and Aurora trademarks in both the United
States and Canada. We are currently seeking to acquire an operating beverage
plant to package our spring water products for distribution under the Springland
trademark.
COMPETITION
Beverage Marketing Corporation reports that the leading producer and distributor
of bottled water in the United States is Nestle Waters, the distributor of
Perrier and Calistoga mineral waters. Nestle holds approximately 30% of the
bottled water market. Other leading competitors include Danone, the distributor
of Evian mineral water with 15%, Suntory with 9% and Crystal Geyser with 3.2%.
The leading soft drink producers, Pepsi and Coca-Cola, control approximately 8%
and 3% of the bottled water market respectively. The remaining 33% of the
market is comprised of numerous independent producers and distributors of
bottled water with less than a 2% market share. Once we secure a source of
water and production facilities, we hope to establish our trademarks and
establish a foothold among these smaller producers and distributors.
EMPLOYEES
Our president, Mr. Ralph Moyal is our only employee. We do not anticipate
hiring additional employees until we acquire an operating plant and begin
packaging and marketing our products. At such time, additional employees will be
hired as necessary. At the date of this report, we have not provided any salary
or other remuneration to Mr. Moyal.
ITEM 2. DESCRIPTION OF PROPERTY
We rent office space from our president under an informal agreement for
approximately $160 per month. Rental expense for 2002 was $1,905. We anticipate
that this arrangement will continue until such time as our operations demand
additional space.
ITEM 3. LEGAL PROCEEDINGS
Management is not aware of any other current or pending legal proceedings
involving Trading Solutions or our officers and directors.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITIES HOLDERS
No matters were submitted to a vote of security holders during the period
covered by this report.
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.OB.
4
As of September 30, 2002, there were approximately 59 shareholders of record
holding a total of 18,523,500 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.
A table of stock prices for the preceding two years is provided below.
YEAR. . . . . . . . . . . . BID BID ASK ASK
2000. . . . . . . . . . . . HIGH LOW HIGH LOW
Oct. 18 Thru Dec. 29. . . . 1.875 1.50 3 2.125
(First Available)
YEAR. . . . . . . . . . . . BID BID ASK ASK
2001. . . . . . . . . . . . HIGH LOW HIGH LOW
Quarter ended March 31. . . 2.125 .625 2.50 1.125
Quarter ended June 30 . . . 1.41 .46 1.50 1.06
Quarter ended September 30. 1.60 .31 2.40 .80
Quarter ended December 31 . .60 .25 1 .65
YEAR. . . . . . . . . . . . BID BID ASK ASK
2002. . . . . . . . . . . . HIGH LOW HIGH LOW
Quarter ended March 31. . . .30 .161 .75 .40
Quarter ended June 30 . . . .161 .02 .40 .025
Quarter ended September 30. .12 .001 .40 .02
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
RESULTS OF OPERATIONS
We have located a tract of land with two springs that could potentially provide
a source of spring water for our products. We formerly held an option to
purchase the land, however, the option expired this year before we could
generate sufficient funds to exercise the option. We are currently exploring
alternate means of purchasing the land or gaining access to the springs. If we
can secure legal access to the springs, the Ontario Ministry of the Environment
has issued permits allowing us to draw up to 150,000 imperial gallons of water
per day from the springs for 300 days per year. We hope to renew the permits
before they expire in 2003.
5
We have registered the Springland and Aurora trademarks in the United States and
Canada, and continue to seek an operating beverage plant to package our spring
water products. We may also explore the possibility of acquiring other soft
drink companies should a suitable opportunity arise. At the present time, we
have not identified any potential companies for acquisition and no agreements or
understandings to that effect are currently pending.
Following the acquisition of a plant and source of spring water, we plan to
initiate an aggressive marketing campaign to establish the Springland name. We
intend to develop brand identification by increasing our exposure within the
bottled water industry by developing sales literature, demonstration materials
and direct response promotions. In addition, we intend to use direct mail, fax
and telemarketing campaigns for sales generation. We recognize that advertising
and promotion must be done aggressively in order to accomplish our goals.
YEAR ENDED SEPTEMBER 30, 2002 AND SIX MONTHS ENDED SEPTEMBER 30, 2001
Total loss from continuing operations for the year ended September 30, 2002 were
$47,651 with expenses consisting of $47,016 in operating expenses and $635 in
interest expense. The largest portion of expenses consisted of professional fees
associated with the acquisition of our subsidiary in August of 2001 as well as
general administrative expenses, auditing and legal fees relating to the our
public reporting requirements. These professional expenses were $33,811,
constituting approximately 72% of all operating expenses. General business
expenses consisted of $1,905 in office rent, $1,600 in taxes and licensing fees
and $1,079 in telephone costs. We also had expenses relating to our proposed
products consisting of $765 in advertising, amortization expense of $367 and
$6,125 in travel and entertainment expenses associated with promoting and
developing a market for our trademarks.
There is no comparable data for the year ended September 30, 2001 as we changed
our fiscal year from March 31 to September 30 on August 28, 2001 when we
acquired our subsidiary. Operating expenses for the six months ended September
30, 2001 consisted of $18,734 in professional fees for auditing, legal costs and
consulting fees. We also recorded a loss of $63,407 in 2001 due to the
expiration of our option to purchase the land where our target springs are
located.
As a result of the foregoing factors, we have realized net losses after
adjusting for foreign currency exchange of $46,271 for the year ended September
30, 2002, and $83,989 for the six months ended September 30, 2001.
LIQUIDITY AND CAPITAL RESOURCES
At September 30, 2002 our total current assets consisted of $4,012 in
trademarks. Total assets at September 30, 2001 consisted of $1,745 in cash.
Current liabilities at September 30, 2002 are $110,181 consisting of $29,751 in
accounts payable, $11,290 in accrued expenses, $14,724 in a bank overdraft loan,
$49,916 in advances due to our president and $4,500 relating to our discontinued
activities. Current liabilities at September 30, 2001 were $61,643 consisting
of $9,251 in accounts payable, $6,733 in accrued expenses, $40,359 in advances
from our president and $5,300 in liabilities from discontinued operations.
Our auditors have expressed substantial doubt as to our ability to continue as a
going concern. Since inception on May 14, 1999, we have not generated any
revenue and have cumulative net losses of $369,702 after adjusting for income
tax and foreign currency exchange values. Our need for capital will change
dramatically if we locate an operating plant to purchase or secure a source of
spring water. In the past, we have relied on advances from officers and
6
shareholders to cover our operating costs. Management anticipates that we will
receive sufficient advances from our current president to meet our needs through
the next 12 months. However, there can be no assurances to that effect. Should
we require additional capital, we may seek additional advances from officers or
shareholders, sell equity of the Company or find other forms of debt financing.
Our current operating plan is to handle the administrative and reporting
requirements of a public company, attempt to pay our debts, and to continue
searching for a bottling plant and a reliable source of spring water.
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 11.
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 September 30, 2002.
NAME . . . . . AGE POSITION DIRECTOR OR OFFICER SINCE
Ralph Moyal. . 67 President, Treasurer, Secretary and Director August 2001
Walter Perchal 50 Director August 2001
Mario DiGenova 47 Director August 2001
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:
RALPH MOYAL, President and Director. Mr. Moyal was the Chief Executive and then
later was the Chairman of Blue Mountain Beverages and founder of Distribution
Canada, Inc. In 1995 he retired as the President of Blue Mountain Beverages and
has been self employed since that time. He has over 30 years in the food and
beverage industry and was selected two years consecutively as Ontario's Top 100
Entrepreneurs by the Ontario Business Journal.
WALTER PERCHAL, Director. Since 1980, Professor Perchal has been employed at
York University in Toronto, Ontario. Professor Perchal has taught a variety of
classes at York University in the Faculty of Arts and The Schulich School of
Business. He is also a director of the following companies; Trimol Group, Inc.
since 2001, Aluminum Power, Inc. since 1999, Peter Mielzynski Agencies, Inc.
since 1996 and Wave Genetics, Inc. since 2000.
MARIO DIGENOVA, Director. For the past eleven years, Mr. DiGenova has been
co-owner of Brentview Construction and Toronto Concrete & Drain where he is
engaged in the residential construction business.
7
Our former Chairman, Mr. David Shaw, resigned in the first quarter of our most
recent fiscal year due to time conflicts with his other obligations.
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
September 30, 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
We have not paid any salaries or provided other compensation to our current
officers and/or directors. We do not anticipate providing salaries or
compensation at any time in the foreseeable future.
SUMMARY COMPENSATION TABLE
Name and Principal Position Year Salary ($) Bonus ($) Other Annual
Compensation
Ralph Moyal . . . . . . . . . . . . . . . . 2002 -0- -0- -0-
Chief Executive Officer and Director. . . . 2001 -0- -0- -0-
Natalie Shahvaran . . . . . . . . . . . . . 2001 30,500 -0- -0-
Former Chief Executive Officer and Director 2000 11,300 -0- -0-
Michael Strahl. . . . . . . . . . . . . . . 2001 22,500 -0- -0-
Former Secretary. . . . . . . . . . . . . . 2000 1,550 -0- -0-
Susan Turner. . . . . . . . . . . . . . . . 2001 1,000 -0- -0-
Former Treasurer. . . . . . . . . . . . . . 2000 -0- -0- -0-
No retirement, pension, profit sharing, stock option or insurance programs or
other similar programs have been adopted by the Company for the benefit of its
employees.
EMPLOYMENT CONTRACTS AND TERMINATION OF EMPLOYMENT AND CHANGE IN CONTROL
ARRANGEMENT.
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 September 30, 2002, the name and the number
of shares of the Registrant's Common Stock, par value $.01 per share, held of
record or beneficially by each person who held of record, or was known by the
Registrant to own beneficially, more than 5% of the 18,523,500 issued and
outstanding shares of the Registrant's Common Stock, and the name and
shareholdings of each director and of all officers and directors as a group.
Except as otherwise indicated, the persons named in the table have sole voting
and dispositive power with respect to all shares beneficially owned, subject to
community property laws where applicable.
8
Title of Class Name and Address of Beneficial Amount and Nature of Percentage of
Owner Beneficial Ownership Class
Common . . . . Ralph Moyal (1) 15,000,000 81%
2 Rodeo Court Toronto, Ontario Canada
M2M 4M3
Common . . . . Walter Perchal (1) -0- -0-
25 Holbrooke Ave. Toronto, Ontario
Canada M8Y 3B3
Common . . . . Mario DiGenova (1) -0- -0-
35 Oak Street, Suite 110 Westen,
Ontario Canada M9N 1A1
Common . . . . Officers and Directors as a Group: 3 people 15,000,000 81%
(1) Officer and/or director.
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.
As of September 30, 2002, the Company owed $49,916 to Ralph Moyal for various
advances made to our wholly owned subsidiary. The advances are unsecured and due
on demand.
Ralph Moyal provides office space to the Company under an informal rental
agreement. Total rents paid in the year ended September 30, 2002 were $1,905.
ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K.
EXHIBITS:
EXHIBIT NUMBER TITLE LOCATION
99.1 Certification of Chief Executive Officer Pursuant to Attached
Section 906 of the Sarbanes-Oxley Act of 2002
99.2 Certification of Chief Financial Officer Pursuant to Attached
Section 906 of the Sarbanes-Oxley Act of 2002
99.3 Certification of Chief Executive Officer Pursuant to Attached
Rule 13a-14 of the Securities Exchange Act of 1934
99.4 Certification of Chief Financial Officer Pursuant to Attached
Rule 13a-14 of the Securities Exchange Act of 1934
9
REPORTS ON FORM 8-K:
No reports on Form 8-K were filed by Trading Solutions.com during the last
quarter of the period covered by this report.
ITEM 14. CONTROLS AND PROCEDURES
Within the 90-day period prior to the date of this report, we evaluated the
effectiveness and operation of our disclosure controls and procedures pursuant
to Rule 13a-14 of the Securities Exchange Act of 1934. Based on that
evaluation, our Chief Executive Officer and Chief Financial Officer have
concluded that our disclosure controls and procedures are effective. There have
been no significant changes in internal controls or other factors that could
significantly affect internal controls subsequent to the date we carried out our
evaluation.
SIGNATURES
In accordance with 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: December 20, 2002 By: /s/Ralph Moyal
----------------------------
Ralph Moyal
CEO and Chief Financial Officer
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: December 20, 2002 By: /s/Ralph Moyal
-------------------------
Ralph Moyal
Director
Date: December 20, 2002 By: /s/Walter Perchal
-------------------------
Walter Perchal
Director
10
FINANCIAL STATEMENTS
TRADING SOLUTIONS.COM, INC.
(A DEVELOPMENT-STAGE COMPANY)
INDEX TO FINANCIAL STATEMENTS
PAGE
Independent Auditors' Report . . . . . . . . . . . . . . . . . . . . . . . . 12
Consolidated Balance Sheets September 30, 2002 and 2001. . . . . . . . . . . 13
Consolidated Statements of Income,
For the Year Ended September 30, 2002 and the Six Months Ended 2001
And Cumulative Since Inception on May 14, 1999 . . . . . . . . . . . . . . . 14
Consolidated Statements of Comprehensive Income (Loss)
For the Year Ended September 30, 2002 and the Six Months Ended 2001
And Cumulative Since Inception on May 14, 1999 . . . . . . . . . . . . . . . 15
Consolidated Statements of Stockholders' Equity (Deficit)
From Inception on May 14, 1999 through September 30, 2002. . . . . . . . . . 16
Consolidated Statements of Cash Flows for the Year Ended September 30, 2002
and the Six Months Ended September 30, 2001. . . . . . . . . . . . . . . . . 17
Notes to Financial Statements, September 30, 2002. . . . . . . . . . . . . . 18
11
INDEPENDENT AUDITORS' REPORT
----------------------------
To the Board of Directors
Trading Solutions.com Incorporated
Toronto, Ontario Canada
We have audited the accompanying consolidated balance sheets of Trading
Solutions.com Incorporated and Subsidiary (A Development Stage Enterprise) as of
September 30, 2002 and 2001 and the related consolidated statement of income,
stockholders' equity, and cash flows for the year ended September 30, 2002 and
for the six months ended September 30, 2001. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we 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 disclosures in the financial
statements. An audit also includes assessment of the accounting principles used
and significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion the financial statements referred to above present fairly, in all
material respects, the financial position of Trading Solutions.com Incorporated
and Subsidiary as of September 30, 2002 and 2001 and the results of its
operations and its cash flows for the year ended September 30, 2002 and for the
six months ended September 30, 2001 in conformity with accounting principles
generally accepted in the United States of America.
The accompanying financial statements have been prepared assuming the Company
will continue as a going concern. As discussed in Note 12 to the financial
statements, the Company has incurred net losses from operations and has received
minimal 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.
Respectfully,
/s/Freedman & Goldberg
- ------------------------------
Certified Public Accountants
Farmington Hills, Michigan
December 5, 2002
12
Trading Solutions.com, Inc. and Subsidiary
(A Development Stage Enterprise)
Consolidated Balance Sheets
As of September 30, 2002 and 2001
ASSETS
As Restated
2002 2001
------------- ----------
Current Assets
Cash. . . . . . . . . . . . . . . . . . . . . . . . . . $ -0- $ 1,745
- ----------------------------------------------------------------------------------------
Total Current Assets . . . . . . . . . . . . . . . . -0- 1,745
Other Assets
Trademark, Net of Accumulated
Amortization of $367 . . . . . . . . . . . . . . . . . . 4,012 -0-
- ----------------------------------------------------------------------------------------
Total Assets . . . . . . . . . . . . . . . . . . . . . . $ 4,012 $ 1,745
========================================================================================
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current Liabilities
Accounts Payable - Trade. . . . . . . . . . . . . . . . . . . $ 29,751 $ 9,251
Accrued Expenses. . . . . . . . . . . . . . . . . . . . . . . 11,290 6,733
Bank Overdraft Loan . . . . . . . . . . . . . . . . . . . . . 14,724 -0-
Shareholder Advances. . . . . . . . . . . . . . . . . . . . . 49,916 40,359
Net Current Liabilities of Discontinued Operations
4,500 5,300
- ----------------------------------------------------------------------------------------
Total Current Liabilities. . . . . . . . . . . . . . . . . 110,181 61,643
- ----------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------
Total Liabilities. . . . . . . . . . . . . . . . . . . . 110,181 61,643
- ----------------------------------------------------------------------------------------
Stockholders' Equity (Deficit)
Common Stock, $.001 Par Value, 20,000,000 Shares Authorized,
18,523,500 Shares Issued and Outstanding
Additional Paid-In Capital. . . . . . . . . . . . . . . . . . 56,153 56,153
Accumulated Deficit During The. . . . . . . . . . . . . . . . 207,380 207,380
Development Stage
Accumulated Other Comprehensive income. . . . . . . . . . . . (371,082) (323,431)
1,380 -0-
- ----------------------------------------------------------------------------------------
Total Stockholders' Equity (Deficit). . . . . . . . . . . . (106,169) (59,898)
- ----------------------------------------------------------------------------------------
Total Liabilities and Stockholders'
Equity (Deficit). . . . . . . . . . . . . . . . . . . $ 4,012 $ 1,745
========================================================================================
The accompanying notes are an integral part of the financial statements
13
Trading Solutions.com, Inc. and Subsidiary
(A Development Stage Enterprise)
Consolidated Statements of Income
For the Year Ended September 30, 2002 and
for the Six Months Ended September 30,2001
Cumulative From
Inception
May 14, 1999 to As Restated
September 30, 2002 2002 2001
----------------- ------------- -----------
Income. . . . . . . . . . . . . . . . $ -0- $ -0- $ -0-
- ------------------------------------------------------------------------------------
Expenses
Advertising . . . . . . . . . . . . 765 765 -0-
Amortization. . . . . . . . . . . . 367 367 -0-
Office Supplies . . . . . . . . . . 1,375 1,364 11
Professional Fees . . . . . . . . . 52,534 33,811 18,723
Rent. . . . . . . . . . . . . . . . 1,905 1,905 -0-
Taxes and Licenses. . . . . . . . . 1,600 1,600 -0-
Telephone . . . . . . . . . . . . . 1,079 1,079 -0-
Travel and Entertainment. . . . . . 6,125 6,125 -0-
- ------------------------------------------------------------------------------------
Total Expenses. . . . . . . . . . 65,750 47,016 18,734
- ------------------------------------------------------------------------------------
Operating Loss. . . . . . . . . . . . (65,750) (47,016) (18,734)
- ------------------------------------------------------------------------------------
Other Income (Expense)
Interest Expense. . . . . . . . . . (635) (635) -0-
Loss on Expiration of Land Options
(63,407) -0- (63,407)
- ------------------------------------------------------------------------------------
Total Other Income (Expense) . . . (64,042) (635) (63,407)
- ------------------------------------------------------------------------------------
Loss From Continuing Operations . . . (129,792) (47,651) (82,141)
Loss on Sale of Discontinued
Operations, Net of Income Taxes . . (2,674) -0- (2,674)
Income From Discontinued
Operations, Net of Income Taxes . . (238,616) -0- 826
- ------------------------------------------------------------------------------------
Net Income (Loss) . . . . . . . . . . $ (371,082) $ (47,651) $ (83,989)
====================================================================================
Weighted Average Number of Shares
Outstanding . . . . . . . . . . . . . 7,998,794 18,523,500 6,526,178
====================================================================================
Loss From Continuing Operation Per. .
Share . . . . . . . . . . . . . . . $ (.01) $ (.01) $ (.02)
====================================================================================
Net Loss Per Share. . . . . . . . . . $ (.05) $ (.01) $ (.02)
====================================================================================
The accompanying notes are an integral part of the financial statements
14
Trading Solutions.com, Inc. and Subsidiary
(A Development Stage Enterprise)
Consolidated Statements of Comprehensive Income (Loss)
For the Year Ended September 30, 2002 and
for the Six Months Ended September 30, 2001
Commutative From
Inception
May 14, 1999 to As Restated
September 30, 2002 2002 2001
------------------ ------------- -----------
Net income (Loss) . . . . . . . . $ (371,082) $ (47,651) $(83,989)
Other Comprehensive Loss,
net of Tax:
Foreign currency translation
Adjustment. . . . . . . . . . 1,380 1,380 -0-
- -------------------------------------------------------------------------------
Comprehensive Income (Loss) . . . $ (369,702) $ (46,271) $(83,989)
===============================================================================
The accompanying notes are an integral part of the financial statements
15
Trading Solutions.com, Inc. and Subsidiary
(A Development Stage Enterprise)
Consolidated Statements of Sockholders' Equity (Deficit)
From the Date of Inception (May 14, 1999) through September 30, 2002
Accumulated
Common Common Additional Other
Stock Stock Paid-In Accumulated Comprehensive
Shares Amount Capital 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 31, 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
September 10, 2001 Shares
Issued for Services . . . 120,000 12,000 -0- -0- -0- 12,000
Net Loss for the Six Months
Ended September 30, 2001. -0- -0- -0- (83,989) -0- (83,989)
- ----------------------------------------------------------------------------------------------------------
Balance, September 30, 2001 18,523,500 56,153 207,380 (323,431) -0- (59,898)
Net Loss for the Year Ended
September 30, 2002. . . . -0- -0- -0- (47,651) 1,380 (46,271)
- ----------------------------------------------------------------------------------------------------------
Balance, September 30, 2002 18,523,500 $56,153 $ 207,380 $ (371,082) $ 1,380 $(106,169)
==========================================================================================================
The accompanying notes are an integral part of the financial statements
16
Trading Solutions.com, Inc. and Subsidiary
(A Development Stage Enterprise)
Consolidated Statements of Cash Flows (Loss)
For the Year Ended September 30, 2002
and for the Six Months Ended September 30, 2001
Cumulative From
Inception
May 14, 1999 to As Restated
September 30,2002 2002 2001
- ---------------------------------------------------------------------------------------------
Cash Flows From Operations
Net Loss From Continuing Operations . . . . . $ (129,792) $ (47,651) $(82,141)
Adjustments to Reconcile Net Income to Net
Cash Provided By Operating Activities
Depreciation and Amortization . . . . . 367 367 -0-
Land Option Acquired in Stock Exchange. 60,260 -0- 60,260
Foreign Currency Translation Adjustment 1,380 1,380 -0-
Increase (Decrease) In:
Other Assets. . . . . . . . . . . . . (4,379) (4,379) -0-
Accounts Payable and Accrued Expenses . . 30,947 25,057 5,890
- ---------------------------------------------------------------------------------------------
Net Cash Used In Continuing Operations . . (41,217) (25,226) (15,991)
Net Cash Used In Discontinued Operations . (198,911) (800) (4)
- ---------------------------------------------------------------------------------------------
Net Cash Used In Operating Activities . . . (240,128) (26,026) (15,995)
- ---------------------------------------------------------------------------------------------
Cash Flows From Investing Activities
Equipment Purchases . . . . . . . . . . . . . (3,879) -0- -0-
- ---------------------------------------------------------------------------------------------
Net Cash Used In Investing Activities . . (3,879) -0- -0-
- ---------------------------------------------------------------------------------------------
Cash Flows From Financing Activities
Proceeds From Shareholder Advances. . . . . 13,526 9,557 3,969
Short Term Borrowing. . . . . . . . . . . . 17,724 14,724 -0-
Payment of Short Term Borrowing . . . . . . (3,000) -0- -0-
Issuance of Common Stock. . . . . . . . . . 213,990 -0- 12,000
Cash From Subsidiary Acquired Via Stock
Exchange. . . . . . . . . . . . . . . . . 1,767 -0- 1,767
- ---------------------------------------------------------------------------------------------
Net Cash Provided By Financing
Activities. . . . . . . . . . . . . . 244,007 24,281 17,736
- ---------------------------------------------------------------------------------------------
Increase (Decrease) in Cash. . . . . . . . . . -0- (1,745) 1,741
Balance, Beginning of Period . . . . . . . . . -0- 1,745 4
- ---------------------------------------------------------------------------------------------
Balance, End of Period . . . . . . . . . . . . $ -0- $ -0- $ 1,745
=============================================================================================
The accompanying notes are an integral part of the financial statements
17
Trading Solutions.com, Inc. and Subsidiary
(A Development Stage Enterprise)
Notes to Consolidated Financial Statements
September 30, 2002 and 2001
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. During the six months
ended September 30, 2001, the company ceased its development of the
above business.
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 $189 for the periods ended September 30, 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. Intangible Assets - The Company has capitalized certain costs
related to registering a trademark. These costs are being amortized on
a straight-line basis over its useful life of twelve years.
Amortization charged to continuing operations was $367 and $-0- for
the periods ended September 30, 2002 and 2001, respectively.
18
Trading Solutions.com, Inc. and Subsidiary
(A Development Stage Enterprise)
Notes to Consolidated Financial Statements
September 30, 2002 and 2001
H. 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
September 30, 2002 and 2001.
I. 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.
J. 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.
K. 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
unrealized currency translation adjustments. During the periods ended
September 30, 2002 and 2001, there were no unrealized currency
translation adjustments.
L. 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:
2002 2001
- ---------------------------------------------
Computer Equipment. . . . . . . $ -0- $ -0-
Office Furniture. . . . . . . . -0- -0-
- ---------------------------------------------
-0- -0-
Less: Accumulated Depreciation -0- -0-
- ---------------------------------------------
Net Property and Equipment. . . $ -0- $ -0-
=============================================
The above property and equipment were all used in the education services
business segment which was discontinued during the six months ended
September 30, 2001. (See Note 11)
19
Trading Solutions.com, Inc. and Subsidiary
(A Development Stage Enterprise)
Notes to Consolidated Financial Statements
September 30, 2002 and 2001
NOTE 3. BANK OVERDRAFT LOAN
The Company's subsidiary has a line-of-credit facility with its bank to
fund bank overdrafts up to $15,750 U.S. ($25,000 $CDN). Interest is payable
monthly at prime plus 2 3/4% per annum. The facility is guaranteed by an
officer/stockholder.
NOTE 4. SHAREHOLDER ADVANCES
As of September 30, 2002 and 2001 the Company owed $49,916 and $40,359,
respectively to an officer/stockholder for various advances made to the
Company's wholly owned subsidiary. The advances are unsecured and due on
demand.
NOTE 5. 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)
On September 10, 2001, the Company issued 120,000 shares of its common
stock to an individual as payment for consulting services performed for the
benefit of the company. The value of these services were $12,000.
NOTE 6. PER SHARE COMPUTATION
Earnings per share have been calculated based on the weighted average
number of shares outstanding.
NOTE 7. INCOME TAXES
The provision for income taxes consists of the following components:
2002 2001
------- --------
Current:
Current Tax Benefit. . . . . . . . . . $ -0- $ 566
Deferred Tax Expense . . . . . . . . . -0- (566)
- ----------------------------------------------------------
Net Tax Expense. . . . . . . . . . . $ -0- $ -0-
==========================================================
Deferred taxes are detailed as follows:
2002 2001
------- --------
Deferred Income Tax Assets
Net Operating Loss Available. . . . . . $90,784 $55,962
Valuation Allowance . . . . . . . . . . 90,784 55,962
- ----------------------------------------------------------
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.
20
Trading Solutions.com, Inc. and Subsidiary
(A Development Stage Enterprise)
Notes to Consolidated Financial Statements
September 30, 2002 and 2001
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).
On September 10, 2001, the Company issued 120,000 of its common stock for
payment of consulting services. (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 year ended September 30, 2002
and for the six months ended September 30, 2001 would have been as follows:
2002 2001
--------- ---------
Net Revenues . . . $ -0- $ -0-
========================================
Net Loss . . . . . $(47,651) $(80,030)
========================================
Net Loss per Share $ (.01) $ (.01)
========================================
The above pro-forma results are not indicative of either future financial
performance or actual results which would have occurred had the acquisition
taken place at the beginning of the respective periods.
21
Trading Solutions.com, Inc. and Subsidiary
(A Development Stage Enterprise)
Notes to Consolidated Financial Statements
September 30, 2002 and 2001
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
year ended September 30, 2002 and for the six months ended September 30,
2001.
Education Beverage Market Total
Services
2002 2001 2002 2001 2002 2001
---- -------- -------- -------- -------- --------
External Revenue . . . . . . . -0- 8,000 -0- -0- -0- 8,000
Intersegment Revenue . . . . . -0- -0- -0- -0- -0- -0-
Interest Revenue . . . . . . . -0- -0- -0- -0- -0- -0-
Interest Expense . . . . . . . -0- -0- 635 -0- 635 -0-
Depreciation and Amortization. -0- 189 367 -0- 367 189
Profit (Loss). . . . . . . . . -0- ( 1,848) (47,651) (82,141) (47,651) (83,989)
Total Assets . . . . . . . . . -0- -0- 4,012 1,745 4,012 1,745
Expenditures for Long-Lived
Assets . . . . . . . . . . . . -0- -0- -0- -0- -0- -0-
The education services segment derives its revenues from the service fees
charge for educational services relating to on-line investing. During the
period ended September 30, 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
September 30, 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 year ended September 30, 2002 and for the
six months ended September 30, 2001 is as follows:
22
Trading Solutions.com, Inc. and Subsidiary
(A Development Stage Enterprise)
Notes to Consolidated Financial Statements
September 30, 2002 and 2001
NOTE 11. DISCONTINUED OPERATIONS (CONTINUED)
2002 2001
----- ------
Income. . . . . . . . . . . . . $ -0- $8,000
- ----------------------------------------------
Expenses
Advertising . . . . . . . . . -0- -0-
Bad Debts . . . . . . . . . . -0- 1,695
Bank Charges. . . . . . . . . -0- -0-
Consulting Fees . . . . . . . -0- -0-
Depreciation. . . . . . . . . -0- 189
Dues and Subscriptions. . . . -0- -0-
Office Supplies . . . . . . . -0- 141
Postage . . . . . . . . . . . -0- -0-
Professional Fees . . . . . . -0- 5,000
Rent. . . . . . . . . . . . . -0- -0-
Tax and Licenses. . . . . . . -0- -0-
Telephone . . . . . . . . . . -0- -0-
Travel. . . . . . . . . . . . -0- 149
- ----------------------------------------------
Total Expenses. . . . . . . -0- 7,174
- ----------------------------------------------
Operating Income (Loss) . . . . -0- 826
- ----------------------------------------------
Other Income (Expense)
State Franchise Tax . . . . . -0- -0-
- ----------------------------------------------
Total Other Income (Expense) -0- -0-
- ----------------------------------------------
Operating Income (Loss) . . . . $ -0- $ 826
==============================================
The net assets and liabilities of the discontinued operations of the
education services business segment included in the accompanying
consolidated balance sheets as of September 30, 2002 and 2001 are as
follows:
2002 2001
-------- --------
Current Assets
Cash . . . . . . . . . $ -0- $ 4
Other Receivables. . . -0- 1,695
Property and Equipment, Net. -0- 2,863
Current Liabilities
Accounts Payable . . . (4,500) (4,500)
Accrued Expenses . . . -0- (800)
- ------------------------------------------------
Net Assets (Liabilities) . . $(4,500) $(5,300)
================================================
23
Trading Solutions.com, Inc. and Subsidiary
(A Development Stage Enterprise)
Notes to Consolidated Financial Statements
September 30, 2002 and 2001
NOTE 12. GOING CONCERN
From the date of inception to September 30, 2002, the Company has net
losses from operations with 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 a new 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.
NOTE 13. RESTATEMENT OF FINANCIAL STATEMENTS
The financial statements for September 30, 2001 have been restated to
reflect the issuance of 120,000 shares of common stock for consulting
services as discussed in Note 9.
24
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Annual Report of Trading Solutions.com, Inc. (the
"Company") on Form 10-KSB for the period ended September 30, 2002 as filed with
the Securities and Exchange Commission on the date hereof (the "Report"), I,
Ralph Moyal, Chief Executive Officer of the Company, certify, pursuant to 18
U.S.C. section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley
Act of 2002, that to the best of my knowledge:
(1) The Report fully complies with the requirements of section 13(a) or
15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all
material respects, the financial condition and result of operations of the
Company.
/s/Ralph Moyal
-------------------------
Chief Executive Officer
December 20, 2002
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Annual Report of Trading Solutions.com, Inc. (the
"Company") on Form 10-KSB for the period ended September 30, 2002 as filed with
the Securities and Exchange Commission on the date hereof (the "Report"), I,
Ralph Moyal, Chief Financial Officer of the Company, certify, pursuant to 18
U.S.C. section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley
Act of 2002, that to the best of my knowledge:
(1) The Report fully complies with the requirements of section 13(a) or
15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all
material respects, the financial condition and result of operations of the
Company.
/s/ Ralph Moyal
-------------------------
Chief Financial Officer
December 20, 2002
Freedman and Goldberg, C.P.A., P.C.
32255 Northwestern Hwy, Ste. 298
Farmington Hills, MI 48334
In connection with your audit of the consolidated financial statements of
Trading Solutions.com Incorporated and Subsidiary, as of September 30, 2002 and
for the year then ended, for the purpose of expressing an opinion as to whether
the financial statements present fairly, the financial position, results of
operations, and cash flow of Trading Solutions.com Incorporated and Subsidiary
in conformity with generally accepted accounting principles, we confirm, to the
best of our knowledge and belief, the following representations made to you
during your examination.
1. We are responsible for the fair presentation in the consolidated financial
statements of financial position, results of operations, and cash flows in
conformity with generally accepted accounting principles. We are also
responsible for adopting sound accounting policies, establishing and
maintaining internal control, and preventing and detecting fraud.
2. We have made available to you all -
a. Financial records and related data.
b. Minutes of the meetings of stockholders, directors, and committees of
directors, or summaries of actions of recent meetings for which
minutes have not yet been prepared.
3. There have been no -
a. Irregularities involving management or employees who have significant
roles in the system of internal accounting control.
b. Irregularities involving other employees that could have a material
effect on the financial statements.
c. Communications from regulatory agencies concerning noncompliance with,
or deficiencies in, financial reporting practices that could have a
material effect on financial statements.
4. We have no plans or intentions that could materially affect the carrying
value or classification of assets and liabilities in the financial
statement.
5. The following have been properly recorded or disclosed in the financial
statements:
a. Related party transactions and related accounts receivable or payable,
including sales, purchases, loans, transfers, leasing arrangements,
and guarantees.
b. Guarantees, whether written or oral, under which the Company is
liable.
c. Capital stock repurchase options or agreements or capital stock
reserved for options, warrants, conversions, or other requirements.
d. Arrangements with financial institutions involving compensating
balances or other arrangements involving restrictions on cash balances
and line-of-credit or similar arrangements.
e. Agreements to repurchase assets previously sold.
6. There are no -
a. Violations or possible violations of laws or regulations whose effects
should be considered for disclosure in the financial statements or as
a basis for recording a loss contingency.
b. Other material liabilities or gain or loss contingencies that are
required to be accrued or disclosed by Statement of Financial
Accounting Standards No 5.
7. There are no unasserted claims that our lawyer has advised us are probable
of assertion and must be disclosed in accordance with Statement of
Financial Accounting Standards No. 5.
8. There are no material transactions that have not been properly recorded in
the accounting record underlying the financial statements.
9. The company has satisfactory title to all owned assets, and there are no
liens or encumbrances on such assets nor has any asset been pledged.
10. We have complied with all aspects of contractual agreements that would have
a material effect on the financial statements in the event of
noncompliance.
11. We have identified all accounting estimates that could be material to the
financial statements, including the key factors and significant assumptions
underlying those estimates, and we believe the estimates are reasonable in
the circumstances.
12. There are no such estimates that may be subject to material change in the
near term that have not been properly disclosed in the financial
statements. We understand that near term means the period within one year
of the date of the financial statements.
13. We have no knowledge of concentrations existing at the date of the
financial statements that make the Company vulnerable to the risk of a
near-term severe impact that have not been properly disclosed in the
financial statements. We understand that concentrations include individual
or group concentrations of customers, suppliers, lenders, products,
services, sources of labor or materials, licenses or other rights, or
operating areas or markets. We further understand that severe impact means
a significant financially disruptive effect on the normal functioning of
the Company.
14. No events have occurred subsequent to the balance sheet date that would
require adjustments to, or disclosure in, the financial statements.
15. We are not aware of any violation of environmental laws and or
contingencies resulting there from.
/s/Ralph Moyal
- ---------------------------
Chief Executive Officer
December 20, 2002
Freedman and Goldberg, C.P.A., P.C.
32255 Northwestern Hwy, Ste. 298
Farmington Hills, MI 48334
In connection with your audit of the consolidated financial statements of
Trading Solutions.com Incorporated and Subsidiary, as of September 30, 2002 and
for the year then ended, for the purpose of expressing an opinion as to whether
the financial statements present fairly, the financial position, results of
operations, and cash flow of Trading Solutions.com Incorporated and Subsidiary
in conformity with generally accepted accounting principles, we confirm, to the
best of our knowledge and belief, the following representations made to you
during your examination.
1. We are responsible for the fair presentation in the consolidated financial
statements of financial position, results of operations, and cash flows in
conformity with generally accepted accounting principles. We are also
responsible for adopting sound accounting policies, establishing and
maintaining internal control, and preventing and detecting fraud.
2. We have made available to you all -
a. Financial records and related data.
b. Minutes of the meetings of stockholders, directors, and committees of
directors, or summaries of actions of recent meetings for which
minutes have not yet been prepared.
3. There have been no -
a. Irregularities involving management or employees who have significant
roles in the system of internal accounting control.
b. Irregularities involving other employees that could have a material
effect on the financial statements.
c. Communications from regulatory agencies concerning noncompliance with,
or deficiencies in, financial reporting practices that could have a
material effect on financial statements.
4. We have no plans or intentions that could materially affect the carrying
value or classification of assets and liabilities in the financial
statement.
5. The following have been properly recorded or disclosed in the financial
statements:
a. Related party transactions and related accounts receivable or payable,
including sales, purchases, loans, transfers, leasing arrangements,
and guarantees.
b. Guarantees, whether written or oral, under which the Company is
liable.
c. Capital stock repurchase options or agreements or capital stock
reserved for options, warrants, conversions, or other requirements.
d. Arrangements with financial institutions involving compensating
balances or other arrangements involving restrictions on cash balances
and line-of-credit or similar arrangements.
e. Agreements to repurchase assets previously sold.
6. There are no -
a. Violations or possible violations of laws or regulations whose effects
should be considered for disclosure in the financial statements or as
a basis for recording a loss contingency.
b. Other material liabilities or gain or loss contingencies that are
required to be accrued or disclosed by Statement of Financial
Accounting Standards No 5.
7. There are no unasserted claims that our lawyer has advised us are probable
of assertion and must be disclosed in accordance with Statement of
Financial Accounting Standards No. 5.
8. There are no material transactions that have not been properly recorded in
the accounting record underlying the financial statements.
9. The company has satisfactory title to all owned assets, and there are no
liens or encumbrances on such assets nor has any asset been pledged.
10. We have complied with all aspects of contractual agreements that would have
a material effect on the financial statements in the event of
noncompliance.
11. We have identified all accounting estimates that could be material to the
financial statements, including the key factors and significant assumptions
underlying those estimates, and we believe the estimates are reasonable in
the circumstances.
12. There are no such estimates that may be subject to material change in the
near term that have not been properly disclosed in the financial
statements. We understand that near term means the period within one year
of the date of the financial statements.
13. We have no knowledge of concentrations existing at the date of the
financial statements that make the Company vulnerable to the risk of a
near-term severe impact that have not been properly disclosed in the
financial statements. We understand that concentrations include individual
or group concentrations of customers, suppliers, lenders, products,
services, sources of labor or materials, licenses or other rights, or
operating areas or markets. We further understand that severe impact means
a significant financially disruptive effect on the normal functioning of
the Company.
14. No events have occurred subsequent to the balance sheet date that would
require adjustments to, or disclosure in, the financial statements.
15. We are not aware of any violation of environmental laws and or
contingencies resulting there from.
/s/Ralph Moyal
- -------------------------
Chief Financial Officer
December 20, 2002