HOLMES HERBS INC
10QSB, 2000-11-22
FOOD STORES
Previous: WORLDBID CORP, 8-K/A, EX-16.1, 2000-11-22
Next: KENROY COMMUNICATIONS CORP, 10QSB, 2000-11-22




                          UNITED STATES
               SECURITIES AND EXCHANGE COMMISSION
                      Washington, DC 20549

                           FORM 10-QSB
 QUARTERLY REPORT FOR SMALL BUSINESS ISSUERS SUBJECT TO THE 1934
                   ACT REPORTING REQUIREMENTS

[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES
   EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2000
Commission File No. 000-31129






                       HOLMES HERBS, INC.
     (Exact name of registrant as specified in its charter)







Nevada                                            88-0412635
(State of organization) (I.R.S. Employer Identification No.)

3651 Lindell Road, Suite A, Las Vegas, NV 89103
(Address of principal executive offices)

Registrant's telephone number, including area code (702) 873-7404

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

There are 250,000 shares of common stock outstanding as of
September 30, 2000.

                 PART I - FINANCIAL INFORMATION

ITEM 1.   FINANCIAL STATEMENTS

The  Audited financial statements for the period ending September
30, 2000.
               TABLE OF CONTENTS


                                              Page Number

INDEPENDENT ACCOUNTANT'S REPORT               1

FINANCIAL STATEMENT

       Balance Sheets.                        2

       Statements of Operations
      and Deficit
          Accumulated During the              3
      Development Stage

       Statement of Changes in                4
      Stockholders' Equity

       Statements of Cash Flows               5

       Notes to the Financial Statements      6





INDEPENDENT ACCOUNTANT'S REPORT

To the Board of Directors and Stockholders
of Holmes Herbs, Inc.
Las Vegas, Nevada

I  have  audited the accompanying balance sheets of Holmes Herbs,
Inc. (a development stage company) as of September 30, 2000,  and
September  30,  1999, and the related statements  of  operations,
cash  flows, and changes in stockholders' equity for  the  period
from  December  3,  1998  (date of inception)  to  September  30,
2000.These  statements are the responsibility  of  Holmes  Herbs,
Inc.'s   management.  My responsibility is to express an  opinion
on these financial statements based on my audit.

I  conducted  my  audit  in  accordance with  generally  accepted
auditing  standards.  Those standards require  that  I  plan  and
perform  the  audit to obtain reasonable assurance about  whether
the  financial statements are free of material misstatement.   An
audit  includes  examining, on a test basis, evidence  supporting
the  amounts  and  disclosures in the financial  statements.   An
audit also includes  assessing the accounting principles used and
significant  estimates made by management, as well as  evaluating
the overall financial statement presentation.  I believe that  my
audit provides a reasonable basis for my opinion.

In  my  opinion,  the  accompanying financial statements  present
fairly,  in  all  material respects, the  financial  position  of
Holmes  Herbs,  Inc. as of September 30, 2000, and September  30,
1999,  and the results of operations, cash flows, and changes  in
stockholders' equity for the periods then ended, as well  as  the
cumulative  period  from  December 3, 1998,  in  conformity  with
generally accepted accounting principles.

David Coffey, C. P. A.
Las Vegas, Nevada
October 24, 2000

HOLMES HERBS, INC.
( A DEVELOPMENT STAGE COMPANY )
BALANCE SHEETS
<TABLE>
<S>                                       <C>            <C>
                                          September 30,  September 30,
                                               2000        1999
ASSETS                                       ----------  ---------

Cash                                        $   20,041     $     41
                                             ---------    ---------
   Total Assets                             $   20,041     $     41
                                             =========    =========

LIABILITIES & STOCKHOLDERS' EQUITY

Accounts payable                            $    5,400     $    400
                                             ---------    ---------
   Total Liabilities                             5,400          400

Stockholders' Equity
  Common stock, authorized
  50,000,000 shares at .001 par value,
  250,000 and 200,000 shares,
respectively,
  issued and outstanding                           250          200
  Additional paid-in capital                    23,600        3,650
  Deficit accumulated during the
  development stage                            (9,209)      (4,209)
                                             ---------    ---------
    Total Stockholders' Equity                  14,641        (359)


   Total Liabilities and Stockholders'      $   20,041     $     41
Equity
                                             =========   ==========
</TABLE>
The accompanying notes are an integral part of these financial
statements.

                             -  2  -

HOLMES HERBS, INC.
( A DEVELOPMENT STAGE COMPANY )
STATEMENTS OF OPERATIONS AND DEFICIT
ACCUMULATED DURING THE DEVELOPMENT STAGE
( With Cumulative Figures From Inception )
<TABLE>
<S>                              <C>              <C>              <C>
                                                                    From Inception,
                                Jan. 1, 2000, to  Jan. 1, 1999, to  Dec. 3, 1998 To
                                  Sept. 30, 2000  Sept. 30, 1999 Sept. 30, 2000
                                      -----------    -------------   ------------
Income                                $         0      $              $         0

Expenses
  Office and administrative                     0            3,809          3,809
expenses
  Professional fees                         5,000                0          5,000
  Organizational costs                          0                0            400
                                     ------------      -----------   ------------
Total expenses                              5,000            3,809          9,209

Net loss                                  (5,000)          (3,809)        (9,209)
                                                                      ============
Retained earnings,
beginning of period                       (4,209)            (400)
                                     ------------      -----------
Deficit accumulated during
the
development stage                     $   (9,209)       $  (4,209)
                                     ============      ===========


Earnings ( loss ) per share
assuming dilution:
Net loss                              $    (0.02)       $   (0.02)    $    (0.05)
                                     ============      ===========   ============

Weighted average shares                   232,222          177,778        193,182
outstanding
                                     ============      ===========   ============
</TABLE>
The accompanying notes are an integral part of these financial
statements.

                              - 3 -

HOLMES HERBS, INC.
( A DEVELOPMENT STAGE COMPANY )
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
FOR THE PERIOD FROM DECEMBER 3, 1998  ( Date of Inception )
TO SEPTEMBER 30, 2000
<TABLE>
<S>                          <C>           <C>         <C>           <C>
                                      Common Stock       Additional     Total
                                   Shares      Amount      Paid-in
                                                           Capital
                                  ---------   ---------   --------     --------
                                                 $         $           $
Balance,
December 3, 1998                      -----       -----        -----       -----

Issuance of common
stock for cash
December 31, 1998                   100,000         100            0         100

Less net loss                             0           0            0       (400)
                                  ---------    --------    ---------  ----------
Balance,
December 31, 1998                   100,000      $  100     $      0   $   (300)

Issuance of common
stock for cash
March 23, 1999                      100,000         100        9,900      10,000

Issuance of common
stock for cash Nov. 10,             30,000           30        2,970       3,000
1999

Less offering costs                       0           0      (9,250)     (9,250)

Less net loss                             0           0            0     (3,809)
                                   --------    --------    ---------  ----------
Balance,
December 31, 1999                   230,000         230        3,620       (359)

Issuance of common
stock for cash, August,            20,000            20       19,980      20,000
2000

Less net loss                             0           0            0     (5,000)
                                   --------    --------    ---------  ----------
Balance,
September 30, 2000                  250,000      $  250     $ 23,600    $ 14,641
                                   ========    ========    =========  ==========
</TABLE>
The accompanying notes are an integral part of these financial
statements
                              - 4 -
HOLMES HERBS, INC.
( A DEVELOPMENT STAGE COMPANY )
STATEMENTS OF CASH FLOWS
( With Cumulative Figures From Inception )
<TABLE>
<S>                                   <C>           <C>             <C>
                                                                     From Inception,
                                      Jan. 1, 2000, Jan. 1, 1999,    Dec. 3, 1998
                                          to            to                   to
                                     Sept. 30, 2000 Sept. 30, 1999  Sept. 30, 2000
                                      ------------  ------------    -----------
CASH FLOWS PROVIDED BY
OPERATING
ACTIVITIES
Net Loss                               $  (5,000)       $ (3,809)       $ (9,209)
Non-cash items included
in net loss
Adjustments to reconcile net
loss to cash used by
operating activity
  Accounts payable                          5,000               0           5,400
                                       ----------      ----------      ----------
   NET CASH PROVIDED BY
   OPERATING ACTIVITIES                         0         (3,809)         (3,809)

CASH FLOWS FROM INVESTING                       0               0               0
ACTIVITIES

CASH FLOWS FROM FINANCING
ACTIVITIES
  Sale of common stock                         20             100             250
  Paid-in capital                          19,980           9,900          32,850
  Less offering costs                           0         (6,250)         (9,250)
                                       ----------      ----------      ----------
   NET CASH PROVIDED BY
   FINANCING ACTIVITIES                    20,000           3,750          23,850

   NET INCREASE IN CASH                    20,000            (59)        $ 20,041
                                                                       ==========
CASH AT BEGINNING OF PERIOD                    41             100
                                       ----------      ----------
   CASH AT END OF PERIOD                $  20,041        $     41
                                       ==========      ==========
</TABLE>
The accompanying notes are an integral part of these financial
statements.

                              - 5 -
HOLMES HERBS, INC.
( A DEVELOPMENT STAGE COMPANY )
NOTES TO THE FINANCIAL STATEMENTS
SEPTEMBER 30, 2000, AND SEPTEMBER 30, 1999

NOTE A    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

          The Company was incorporated on December 3, 1998, under
          the  laws of the State of Nevada.  The business purpose
          of   the  Company  is  to  procure  and  resell  herbal
          remedies.

          The   Company   will  adopt  accounting  policies   and
          procedures   based   upon   the   nature   of    future
          transactions.

NOTE B    OFFERING COSTS

          Offering costs were deducted from the proceeds  of  the
          public offering.

NOTE C    EARNINGS (LOSS) PER SHARE

          Basic EPS is determined using net income divided by the
          weighted average shares outstanding during the  period.
          Diluted EPS is computed by dividing net income  by  the
          weighted  average  shares  outstanding,  assuming   all
          dilutive  potential common shares were  issued.   Since
          the  Company  has no common shares that are potentially
          issuable, such as stock options, convertible securities
          or warrants, basic and diluted EPS  are the same.

NOTE D    COMMON STOCK ISSUES

          On  March 23, 1999, the Company completed the  sale  of
          100,000  shares of it's common stock at $.10 per  share
          for  total proceeds of $10,000.  The net proceeds  were
          to be used for marketing of herbal remedies.

          On  November  10,  1999, the Company  sold  by  private
          placement 30,000 common shares at $.10 per share for  a
          total  of  $3,000.  The proceeds were to  be  used  for
          working  capital.

          On  August  24, 2000, the Company completed  a  private
          placement offering and sold 20,000 shares of its common
          stock  at $1.00 per share for a total of $20,000.   The
          proceeds  are to be used to purchase and resell  herbal
          remedies.
                              - 6 -

ITEM 2.   MANAGEMENT'S PLAN OF OPERATION

NOTE REGARDING PROJECTIONS AND FORWARD LOOKING STATEMENTS

This  statement  includes  projections  of  future  results   and
"forward-looking statements" as that term is defined  in  Section
27A  of  the  Securities Act of 1933 as amended (the  "Securities
Act"), and Section 21E of the Securities Exchange Act of 1934  as
amended (the "Exchange Act"). All statements that are included in
this  Registration Statement, other than statements of historical
fact,   are   forward-looking  statements.  Although   Management
believes that the expectations reflected in these forward-looking
statements  are  reasonable, it can give no assurance  that  such
expectations  will prove to have been correct. Important  factors
that  could  cause actual results to differ materially  from  the
expectations are disclosed in this Statement, including,  without
limitation,   those  expectations  reflected  in  forward-looking
statements contained in this Statement.

                        Plan of Operation

The  Company  plans  to  engage  in  both  wholesale  and  retail
distribution  of herbal products beginning in Las Vegas,  Nevada.
The  Company will rely on newspaper advertisements and later will
use  e-commerce  to  implement  its  marketing  objectives.   The
Company  also  intends to utilize direct mailing  and  e-mail  to
solicit manufacturers and retailers of products.

The  company  has not yet introduced any products,  and  has  not
entered  into  agreements with any suppliers.  Once  the  Company
begins offering products for sale, it will face competition  from
existing  suppliers. Competition in these products  is  primarily
centered  on quality, price, brand recognition and service,  with
an   emphasis  on  the  service.  To  be  competitive  in   these
marketplaces, the Company must effectively maintain  and  promote
the  quality of both the products and service among consumers and
establish  strong marketing relationships with manufacturers  and
distributors of the products.  While the Company believes that it
will   compete   effectively,  many  of  the   competitors   have
substantially  greater  resources and  well  recognized  business
names.  The Company believes it can take advantage of its smaller
size to attract customers seeking more personalized service.  The
Company expects to attract customers via various internet  search
engines upon completion of various web pages.

                       Marketing Strategy

The  Company intends to engage in both the wholesale  and  retail
distribution  of  herbal  products.   The  Company   intends   to
initially  rely  on  newspaper advertisements  and  later  on  e-
commerce  to  implement the Company's marketing objectives.   The
Company  also  intends to utilize direct mailing, and  e-mail  to
solicit  manufacturers and Retailers of products  which  will  be
sold by the Company.

The   Company's  marketing  and  licensing  strategy  is  to  (i)
establish  and  expand  a clientele; (ii) expand  the  number  of
advertisements; and (iii) acquire or establish relationships with
major   manufacturers   businesses,  companies,   properties   or
technologies.

The   Company   will   purchase  most  of  its   inventory   from
manufacturers  principally in North America and the  Orient.   To
date,  no  contracts have been executed and the Company does  not
anticipate  entering into any contracts due to lack  of  funding.
Upon funding, letters of credit may be sought.

The   need  for  herbal  products  increases  as  the  increasing
population  has  begun returning to nature (herbs)  to  heal  any
ailments.  The Company does not anticipate being dependent on one
major  or  a  few major customers.  The business will  supply  to
major herbal retailers and the general public.  Also listing  the
web  page(s) throughout various search engines should provide the
Company with numerous business opportunities.

As  of  the date of this Registration Statement, the Company  has
one part time employee, who to this date has not entered into  an
employment  arrangement with the Company.  Due  to  the  lack  of
funding,  the  Company  has no collective  bargaining  agreements
covering  its  only  employee, has not experienced  any  material
labor  disruption  and  is unaware of any  efforts  or  plans  to
organize  its future employees.  The Company considers  relations
with its employee to be good.

Other  than  the early design stages of its website, the  Company
has no intellectual property rights.

                            Liquidity

The  Company  will have to raise additional capital in  the  next
twelve  months.  As of December 31, 1999, the Company had nominal
working  capital and results.  In order to satisfy the  liquidity
needs of the Company for the following twelve months, the Company
will  be primarily dependent upon proceeds from the sale  of  the
Company's  common and/or preferred stock and possible  cash  flow
from operations.  Historically, revenues from existing operations
have not been adequate to fund the operations of the Company.  If
the  Company is unable to obtain adequate funds from the sale  of
its stock in public offerings, private placements, or alternative
financing  arrangements,  it may be  necessary  to  postpone  any
additional  acquisitions  or  the  Company's  ability  to  obtain
Letters of Credit.  The Company, under such circumstances,  would
resort to using cash flow for internal growth.

While  the Company has raised capital to meet its working capital
and financing needs, additional financing is required in order to
complete  the  planned improvements necessary  to  the  Company's
acquisitions.  The Company is seeking financing, in the  form  of
equity  and debt in order to make the necessary improvements  and
provide  working  capital.  There are no assurances  the  Company
will be successful in raising the funds required.

The  Company has issued shares of its Common Stock from  time  to
time  in  the past to satisfy certain obligations and expects  in
the future to also acquire certain services, satisfy indebtedness
and/or  make  acquisitions  utilizing authorized  shares  of  the
capital stock of the Company.  If operations and cash flow can be
improved  through  these efforts, management  believes  that  the
Company's  liquidity  problems will  be  resolved  and  that  the
Company  can continue to operate.  However, no assurance  can  be
given   that  management's  actions  will  result  in  profitable
operations.

The plan of the Company is to raise more financing as soon as the
Company's  shares are approved for trading to enable the  Company
to  enter into purchase and supply contracts.  An overall  budget
of  $650,000  for  the  first year should achieve  the  Company's
goals.  The Company does not anticipate that there will be a need
to  dramatically increase the number of employees over  the  next
twelve months.

                           Competition

The  Company  is an insignificant participant among  firms  which
engage  in  wholesale and retail distribution of herbal products.
In   view  of  the  Company's  limited  financial  resources  and
management  availability, the Company  will  continue  to  be  at
significant  competitive  disadvantage  vis-a-vis  the  Company's
competitors.

Once  the Company begins offering products for sale, it will face
competition  from  existing  suppliers.  Competition   in   these
products   is   primarily  centered  on  quality,  price,   brand
recognition and service, with an emphasis on the service.  To  be
competitive  in these marketplaces, the Company must  effectively
maintain and promote the quality of both the products and service
among consumers and establish strong marketing relationships with
manufacturers  and  distributors  of  the  products.   While  the
Company  believes that it will compete effectively, many  of  the
competitors  have  substantially  greater  resources   and   well
recognized  business  names.  The Company believes  it  can  take
advantage  of its smaller size to attract customers seeking  more
personalized  service., the Company expects to attract  customers
via  various internet search engines upon completion  of  various
web pages.

                            Employees

The  Company's  only employee at the present  time  is  its  sole
officer  and director, who will devote as much time as the  Board
of  Directors determine is necessary to carry out the affairs  of
the Company.

                   PART II - OTHER INFORMATION

ITEM 1.   LEGAL PROCEEDINGS

The  Company  is  not  a  party  to any  material  pending  legal
proceedings and, to the best of its knowledge, no such action has
been threatened by or against the Company.

ITEM 2.   CHANGES IN SECURITIES AND USE OF PROCEEDS

On  August  24,  2000, the Company completed a private  placement
offering and sold 20,000 shares of its common stock at $1.00  per
share  for  a total of $20,000.  The proceeds are to be  used  to
purchase  and resell herbal remedies. At the end of  the  quarter
there were 250,000 shares issued and outstanding.

ITEM 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

No such matters were submitted during the most

ITEM 6.   EXHIBITS AND REPORTS ON FORM 8-K

EXHIBITS

a)     The  exhibit  consisting  of  the  Company's  Articles  of
  Incorporation is attached to the Company's Form 10-SB, filed on
  July 24, 2000. This exhibit is incorporated by reference to that
  Form.

b)    The  exhibit consisting of the Company's Bylaws is attached
  to the Company's Form 10-SB, filed on July 24, 2000. This exhibit
  is incorporated by reference to that Form.

Reports on Form 8-K:  None

27   Financial Data Schedule

                           SIGNATURES

Pursuant  to  the  requirements of Section 12 of  the  Securities
Exchange  Act  of  1934,  the Registrant  has  duly  caused  this
registration  statement  to  be  signed  on  its  behalf  by  the
undersigned, thereunto duly authorized.



                           Holmes Herbs, Inc.



                           By: /s/ Patricia Wiate
                              Patricia Wiate,
                              President/Secretary/Treasurer



                           Date: November 21, 2000


© 2022 IncJournal is not affiliated with or endorsed by the U.S. Securities and Exchange Commission