UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
X QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For quarterly period ended December 31, 2000
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
Commission file number -001-14889
TRADING SOLUTIONS.COM, INC.
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(Exact name of registrant as specified in its charter)
Nevada 880425691
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(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
200 Camino Aguajito, #200, Monterey, California 93940
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (831) 375-6229
Indicate by check mark whether the registrant: (1) has filed all reports
required by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing for the
past 90 days. __X__Yes No
The number of shares of the Registrant's Common Stock, $.001 par value, as of
December 31, 2000 was 2,861,000 outstanding.
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
TRADING SOLUTIONS.COM, INCORPORATED
BALANCE SHEET
December 31, 2000 and 1999
(See Accountant's Review Report)
2000 1999
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ASSETS
Current assets
Cash in bank $ 23,382 $ 15,312
Other receivable 1,695
Prepaid rent 78
Total current assets 25,077 15,390
Furniture and equipment
Equipment 2,606 2,206
Furniture 916 600
3,522 2,806
Accumulated depreciation (576) (132)
2,946 2,674
Total assets $ 28,023 $ 18,064
LIABILITIES AND STOCKHOLDER'S EQUITY
Current liabilities
Accounts payable $ 1,372 $ 2,500
State corporate tax liability 800
Total current liabilities 1,372 3,300
Total liabilities 1,372 3,300
Stockholders' equity
Common stock, 20,000,000 shares authorized at
a par value of .001. 2,861,000 outstanding 28,610 #REF!
Paid in capital 207,380 #REF!
Retained earnings (209,339) #REF!
Total stockholder's equity 26,651 #REF!
Total liabilities and stockholder's equity $ 28,023 $ #REF!
TRADING SOLUTIONS.COM, INCORPORATED
STATEMENT OF OPERATIONS
For the nine months ended December 30,2000
and from date of inception to December 31, 1999
(See Accountant's Review Report)
2000 1999
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Income $ 11,363 $ 1,625
Expenses
Advertising 6,931 3,740
Accounting fees 10,580 4,500
Bank charges 120 104
Consulting fees 43,600 39,504
Compensation expense 34,000
Depreciation 400 132
Education 1,995
Management fees 5,000
Miscellaneous 153 6,902
Office supplies 2,256 4,529
Postage 659 66
Promotions 514
License and taxes 180 1,765
Legal fees 6,560 11,981
Organizational costs 896
Rent 2,700 2,189
Telephone 2,490 1,639
Travel 15,209 2,581
Total expenses 91,838 122,037
Loss from operations (80,475) (120,412)
Other (expenses)
Interest 0 (14)
Loss prior to income taxes (80,475) (120,426)
Income taxes
State corporate tax 0 800
Net loss $ (80,475) $ (121,226)
Loss per common
share $ (0.03) $ (0.05)
Weighted average of shares outstanding 2,785,295 2,668,169
TRADING SOLUTIONS.COM, INCORPORATED
STATEMENT OF STOCKHOLDER'S EQUITY
December 31, 2000 and 1999
(See Accountant's Review Report)
Paid
Common Stock In Retained
Shares Amount Capital Earnings Total
------ ------ ------- -------- -----
September 30, 1999 #REF! $ #REF! $ #REF! (99,580) $ #REF!
November 23, 1999 2,000 20 980 1,000
November 29, 1999 2,000 20 980 1,000
December 3, 1999 20,000 200 9,800 10,000
December 9, 1999 2,000 20 980 1,000
December 13, 1999 10,000 100 4,900 5,000
December 20, 1999 20,000 200 9,800 10,000
December 21, 1999 6,000 60 2,940 3,000
Net loss per period #REF! #REF!
Total #REF! $ #REF! $ #REF! $ #REF! $ #REF!
2000
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March 31, 2000 2,760,000 $ 27,600 $ 107,390 $ (128,864) $ 6,126
June 26, 2000 35,000 350 34,650 35,000
July 18, 2000 21,000 210 20,790 21,000
July 19, 2000 3,000 30 2,970 3,000
July 21, 2000 25,000 250 24,750 25,000
August 1, 2000 13,000 130 12,870 13,000
August 4, 2000 2,000 20 1,980 2,000
November 21, 2000 2,000 20 1,980 2,000
Net loss per period (80,475) (80,475)
2,861,000 $ 28,610 $ 207,380 $ (209,339) $ 26,651
TRADING SOLUTIONS.COM, INCORPORATED
STATEMENT OF CASH FLOWS-INDIRECT METHOD
For the nine months ended December 31, 2000
and from date of inception to December 31, 1999
(See Accountant's Review Report)
2000 1999
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CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ (80,475) $ #REF!
Adjustment to reconcile net income to net cash
provided by operating activities
Depreciation 400 #REF!
Compensation expense 34,000
(Increase) Decrease in other receivable (1,519)
(Increase) Decrease in prepaid rent (78)
Increase (Decrease) in accounts payable 1 2500
Increase (Decrease) in taxes payable 800
NET CASH PROVIDED BY OPERATING ACTIVITIES (81,593) #REF!
INVESTING ACTIVITIES
Purchase of furniture and equipment 716 2,806
NET CASH USED IN INVESTING ACTIVITIES 716 2,806
FINANCING ACTIVITIES
Sale of common stock 101,000 101,990
Short term borrowing 3,000
Payment of short term borrowing (3,000)
NET CASH REALIZED FROM FINANCING ACTIVITIES 101,000 101,990
INCREASE IN CASH AND CASH EQUIVALENTS 18,691 #REF!
Cash and cash equivalents at the beginning of the period 4,691 0
CASH AND CASH EQUIVALENTS $ 23,382 $ 15,312
Supplemental disclosure of financing activities
Interest paid during the period from date of
inception to June 30, 1999 $ 14
Trading Solutions.Com, Incorporated
Notes to Financial Statements
September 30, 2000 and 1999
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Nature of the business - Trading Solutions.Com, Inc (the "Company") is
designed to provide education for people interested in on line investing.
The Company also intends to establish a corporate trading account and
manage money. The Company further intends to establish or acquire an
e-commerce business to link with the trading school.
Development Stage Company - In the prior fiscal year the Company was a
development stage company, as defined in the Financial Accounting Standards
Board No. 7. The Company devoted substantially all of its efforts in
securing and establishing a new business. During the first six months of
the current fiscal year, the Company commenced operations.
Persuasiveness of estimates - The preparation of financial statements in
conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the reported
amounts of assets, liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the reported
amounts of revenues and expenses during the reporting period. Actual
results could differ from these estimates.
Cash and cash equivalents - For financial statement presentation purposes,
the Company considers all short term investments with a maturity date of
three months or less to be cash equivalents.
Property and equipment - Property and equipment are recorded at cost.
Maintenance and repairs are expensed as incurred; major renewals and
betterments are capitalized. When items of property or equipment are sold
or retired, the related costs and accumulated depreciation are removed from
the accounts and any gain or loss is included in income.
Depreciation is provided using the straight-line method, over the useful
lives of the assets.
Income taxes - Income taxes are provided for the tax effects of
transactions reported in the financial statements and consist of taxes
currently due plus deferred taxes related primarily to differences between
the recorded book basis and the tax basis of assets and liabilities for
financial and income tax reporting. The deferred tax assets and liabilities
represent the future tax return consequences of those differences, which
will either be taxable or deductible when the assets and liabilities are
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NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (con't)
Income taxes (con't)
recovered or settled. Deferred taxes are also recognized for operating
losses that are available to offset future taxable income.
Stock options -Stock that is issued for services rendered are recorded at
the fair value of the stock in the year that the stock is given and
recorded as an expense in the same year.
NOTE 2: BACKGROUND
The Company was incorporated under the laws of the State of Nevada on May
14,1999. The principal activities of the Company, from the beginning of the
development stage, have been organizational matters and the sale of stock.
NOTE 3: EQUIPMENT AND FURNITURE
The following is a summary of fixed asset classifications, accumulated
depreciation and depreciable lives for the Company at September 30, 2000
and 1999.
Useful life
Years 2000 1999
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Computer equipment 5 $ 2,606 $ 2,206
Office furniture 10 916 600
Total 3,522 2,806
Accumulated depreciation (526) (88)
Net equipment and furniture $ 2,996 $ 2,718
Depreciation expense for the six months ended September 30, 2000 was $350 and
1999 the expense was $88.
NOTE 4: COMMON STOCK
Founders stock - At incorporation the Company issued stock to the founders
of the corporation. These shares totaled 2,495,000 shares and were issued
for consideration of $.001 per share. Proceeds from these sales were
$2,495.
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NOTE 4: COMMON STOCK (con't)
Stock options - At the organizational meeting of the board of directors it
was voted on to issue stock options of the Company's common stock to
certain officers of the corporation, a key employee of a non affiliated
company and the non affiliated company. These options are to be exercised
at $.10 a share and have an expiration date of December 31, 2002. These
options are callable at $.02 per share by the Company with a 30 day notice.
A total of 85,000 shares were voted on for the options of which 60,000
shares of the options were exercised Prior to September 30, 1999. Total
proceeds from these sales were $5,500. The fair market value at the date
the options were granted was $.50 a share. Therefore, the Company has
recognized $ 34,000 in compensation expense for the period ended September
30, 1999.
Public stock offering - During the period ended June 30, 1999 the Company
sold solely to accredited and/or sophisticated investors its common stock.
Each share had a par value of $.01 a share and was offered to the investors
at $.50 a share. The stock was sold during various times during the period
from date of inception to September 30, 1999 to 30 different investors
buying a total of 120,000 shares of common stock. Total proceeds, from the
offering, as of the period ended September 30, 2000 were $60,000.
Initial Public Offering - During the six-month period ended September 30,
2000, the Company initiated a public stock offering of three hundred
thousand of its common shares. As of September 30, 2000 $99,000.00 had been
raised.
NOTE 5: INCOME TAXES
The benefit for income taxes from operations consisted of the following
components: current tax benefit of $26,250 resulting from a net loss before
income taxes, and a deferred tax expense of $26,250 resulting from a
valuation allowance recorded against the deferred tax asset resulting from
net operating losses. Net operating loss carryforward will expire in 2014.
The valuation allowance will be evaluated at the end of each year,
considering positive and negative evidence about whether the asset will be
realized. At that time, the allowance will either be increased or reduced;
reduction would result in the complete elimination of the allowance if
positive evidence indicates that the value of the deferred tax asset is no
longer required.
9
NOTE 6: RELATED PARTY TRANSACTIONS
The Company entered into an agreement with one of its shareholders to
provide assistance to the Company in the formation of its corporate
structure and to use their contacts in assisting with the development of a
public market for the Company's common stock. The agreement calls for the
shareholder to be paid a total of $22,000 of which $2,000 and $5,000 was
paid for the periods ended September 30, 2000 and 1999. The Company is to
further provide support services such as office space and telephone
services for which the Company will be billed separately. Total cash paid
for these additional services as of September 30, 1999 was $1,465. There
were no amounts paid to this shareholder for the period ended September 30,
2000.
The Company also entered into an agreement with another shareholder to
provide consulting services to the Company. This agreement totals $30,000
of which $13,000 and $10,300 was paid as of September 30, 2000 and 1999
respectively.
There is an agreement with one of the founders to provide support services
to the Company. This agreement has a maximum of $10,000. The total amount
paid, as of September 30, 2000 and 1999 was 3000 and $6,500 respectively.
NOTE 7: MATERIAL ADJUSTMENTS
Management has made all material adjustments to the financial statements to
be conformity with generally accepted accounting principles.
NOTE 8: GOING CONCERN
From the date of inception the Company has yet to commence receiving a
material amount of revenue and has net losses from operating activities
which raise substantial doubt about its ability to continue as a going
concern.
Management will work to establish a local market niche for each one of its
trading schools by advertising in local newspapers and radio. This is
intended to create public awareness of the Company's name and its services.
Management also intends to affiliate with professional traders to teach
online classes and seminars in real-time broadcasting. The Company also
intends to continually invest in its web site infrastructure as needed for
10
NOTE 8: GOING CONCERN (con't)
upgrades, incorporation of new features and keeping up with the changing
internet technology. The Company will establish an on line store that will
offer literature such as books, newspapers and newsletters that will target
online investors.
In order to attract and retain quality instructors the Company plans to
grant each participating instructor the opportunity to be promoted on an
exclusive basis by the Company's web site.
The Company's ability to continue as a going concern is dependent upon a
successful public offering and ultimately achieving profitable operations.
There is no assurance that the Company will be successful in its efforts to
raise additional proceeds or achieve profitable operations. The financial
statements do not include any adjustments that might result from the
outcome of this uncertainty.
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Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations.
The Net sales for the third quarter that ended December 31, 2000 were
$11,363, compare to $1,625 from the corresponding period of the prior year. For
the nine month period ended December 31, 2000, the company has experienced a
599% increase in net sales from the corresponding period of the prior year.
The company is in the process of introducing its services to the local
community at its first location in Monterey, CA. The management has been
actively exploring a possible opportunity of opening a location in San Diego,
CA. The Company believes that a central city location will promote better name
recognition and will increase sales.
The company will continue providing its services through its trading
school, and will continue developing its web based operations.
Loss from operations prior to other expenses and taxes for the nine months
ended December 31, 2000 was $80,475 compared to $120,426 for the corresponding
period in 1999. The increase in the gross margin from the corresponding period
of the prior year is principally attributable to the company's marketing
efforts.
Advertising, general and administrative expenses were $91,838 for the for
the nine months ended December 31, 2000, compared to $122,037 for the
corresponding period in 1999. These expenses decreased due to the Company
getting further along in its development.
The company is in the process of adding new services and product lines. The
company will continue to sell its services in Monterey, California and evaluate
possible new locations.
The company anticipates that its marketing and operating costs will
increase because of changes to its marketing and business development.
The company has been a development stage company for the past year and
therefore has not felt the effect of inflation. Should prices increase the
company will have to increase its cost of sales. There is a question as to the
Company's viability. It is classified as a development stage company and has yet
to demonstrate profitable operations.
Item 3. Liquidity and Capital Resources.
As of December 31, 2000, the company had a cash equivalence of $25,077. The
capital resource available came from the company's IPO offering. The Company
sold 101,000 shares for total proceeds of $101,000.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
As of December 31, there has been no legal proceedings taking place, nor do
we foresee anything like that in the fourth quarter.
Item 2. Changes in Securities.
As of December 31, there has been no change in securities since September
30, 2000.
Item 3. Defaults Upon Senior Securities.
There has been no material default in the payment of principal, interest, a
sinking or purchase fund installment, or any other material default not cured
within 30 days. There has been no other material delinquency that has occurred
within 30 days.
Item 4. Submission of Matters to a Vote of Security Holders.
There was no meeting held in the third quarter of 2000. There will be a
board meeting called in March of 2001.
Item 5. Other Information.
There is no other information to report at this time.
Item 6. Exhibits and Reports on Form 8-K
There are no exhibits or forms to submit at this time.
Signature Page
Pursuant to the requirements of section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
Trading Solutions.com, Inc.
Dated: February 12, 2001
/s/ Natalie Shahvaran
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NAME: Natalie Shahvaran
TITLE: President