SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM SB-2/A
SECOND AMENDMENT TO REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
TRADING SOLUTIONS.com, INC.
(Exact name of registrant as specified in its charter)
NEVADA 88-0425691 6289
(State or other jurisdiction (IRS Employer (Primary Standard Industrial
of incorporation or Identification Number) Classification Code Number)
organization)
200 Camino Aguajito, Suite 200
Monterey, CA 93940
(831) 375-6229
--------------------------
Natalie Shahvaran
200 Camino Aguajito, Suite 200
Monterey, CA 93940
(831) 375-6229
Copies of all communications to:
Gary R. Blume, Esq.
Blume Law Firm, P.C.
11801 North Tatum Boulevard, Suite 108
Phoenix, Arizona 85028-1612
Approximate date of commencement of proposed public offering: As soon as
practicable after this registration statement is effective.
The registrant hereby amend this registration statement on any date or dates as
may be necessary to delay its effective date until the registrant shall file a
further amendment which specifically states that this registration statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the registration statement shall become
effective on any date as the Commission, acting pursuant to said Section 8(a),
may determine.
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. [ X ]
If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, please check the following box and list
the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
<TABLE>
The Offering
<CAPTION>
Price to Public Commissions Proceeds to Company
<S> <C> <C> <C>
Per Share $ 2.00 $0 $ 300,000
Total $ 2.00 $0 $ 300,000
</TABLE>
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<PAGE>
<TABLE>
CALCULATION OF REGISTRATION FEE
<CAPTION>
Title of each Proposed
class of Amount Maximum Proposed Amount of
Securities to to be Offering Price Maximum Registration
be registered Registered Per Share (1) Offering Price (1) Fee
<S> <C> <C> <C> <C>
Common Stock, 150,000 $2.00 $300,000.00 $88.50
$0.01 par value
Total 150,000 $2.00 $300,000.00 $88.50
</TABLE>
(1) Estimated solely for calculation of the amount of the registration fee
calculated pursuant to Rule 457(c).
The Exhibit Index appears on page 33 of the sequentially numbered pages of
this Registration Statement. This Registration Statement, including exhibits,
contains 63 pages.
2
<PAGE>
<TABLE>
TABLE OF CONTENTS
<CAPTION>
<S> <C>
Cover Page 4
Available Information 5
Prospectus Summary 5
The Company 5
The Offering 5
Summary Financial Information 6
Risk Factors 7
Use of Proceeds 9
Determination of Offering Price 10
Dilution 10
Plan of Distribution 10
Description of Business 11
Legal Proceedings 15
Directors, Executive Officers, Promoters and
Control Persons 15
Security Ownership of Beneficial Owners and Management 16
Description of Securities 16
Interest of Named Experts and Counsel 18
Disclosure of Commission Position on
Indemnification for Securities Act Liabilities 18
Management's Discussion and Analysis of
Results of Operations and Financial Condition 18
Description of Property 19
Certain Relationships and Related Transactions 19
Market for the Registrant's Common Equity and Related
Stockholder Matters 19
Executive Compensation 20
Summary Compensation Table 20
Financial Statements 21
Experts and Legal Matters 33
Indemnification of Directors and Officers 34
Other Expenses of Issuance and Distribution 34
Recent Sales of Unregistered Securities 34
Exhibit Index 35
Signatures 36-37
</TABLE>
3
<PAGE>
Initial Public Offering Prospectus
TRADING SOLUTIONS.COM, INC.
200 Camino Aguajito
Suite 200
Monterey, California 93940
150,000 Shares of Common Stock
$2.00 Per Share
We will be selling all of the 150,000 shares of common stock offered in
this offering andwill not use an underwriter nor pay a commission for the sale
of the shares. This is our initial public offering, and no public market
currently exists for our shares. The offering price may not reflect the market
price of our shares after the offering.
This Investment Involves a High Degree of Risk.
You Should Purchase Shares Only If You Can Afford a Complete Loss.
See "Risk Factors" beginning on page 6 for a discussion of factors that should
be considered by investors.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved these securities, or determined if this
Prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
<TABLE>
The Offering
<CAPTION>
Price to Public Commissions Proceeds to Company
<S> <C> <C> <C>
Per Share $ 2.00 $0 $ 300,000
Total $ 2.00 $0 $ 300,000
</TABLE>
You should rely only on the information contained in this document. We have
not authorized anyone to provide you with information that is different.
Application will be made to the NASDAQ OTC Bulletin Board Stock Market
under a symbol to be selected.
This is a best efforts offering with no minimum amount. No arrangements
have been made to place funds in escrow, trust or any similar account. Funds
will be immediately available to the Company.
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<PAGE>
AVAILABLE INFORMATION
The Company has filed with the Securities and Exchange Commission a
Registration Statement on Form SB-2 under the Securities Act of 1933 for the
Common Stock offered for sale in this document. The Company is not a reporting
company. This Prospectus contains all of the information set forth in the
Registration Statement and the exhibits and schedules to the Registration
Statement. The Registration Statement, including the attached exhibits and
schedules, as well as all future reports and other information filed by the
Company with the Securities and Exchange Commission, may be inspected without
charge at the Public Reference Room of the Securities and Exchange Commission's
principal office at Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C.
20549, and at the Securities and Exchange Commission's regional offices at 13th
Floor, Seven World Trade Center, New York, N.Y. 10048, and Suite 1400, Citicorp
Center, 500 West Madison Street, Chicago, Illinois 60661. Copies of these
materials can also be obtained at prescribed rates from the Public Reference
Section of the Securities Exchange Commission at Judiciary Plaza, 450 Fifth
Street, N.W., Washington, D.C. 20549. Electronic filings made through the
Electronic Data Gathering Analysis and Retrieval System are also publicly
available through the Securities and Exchange Commission's Web site
(http://www.sec.gov).
Investors are cautioned that this registration statement contains trend
analysis and other forward-looking statements that involve risks. Words such as
"expects," "anticipates," "intends," "plans," "believes," "seeks," "estimates,"
variations of these words and similar expressions are intended to identify these
forward-looking statements. These statements are based on current expectations
and projections about the online trading industry and assumptions made by
management and are not guarantees of future performance. Therefore, actual
events and results may differ materially from those expressed or forecasted in
the forward looking statements due to factors such as the effect of changing
economic conditions, material changes in currency exchange rates, conditions in
the overall online trading market, risks associated with product demand and
market acceptance risks, the impact of competitive products and pricing, delays
in new product development and technological risks and other risk factors.
PROSPECTUS SUMMARY
This summary highlights the material aspects of the offering that should be
considered by a prospective investor.
THE COMPANY
Trading Solutions.com, Inc. is an educational company instructing people in
online investing. The Company is currently offering classes in online investing.
The Company plans on developing an e-commerce business.
THE OFFERING
<TABLE>
<CAPTION>
<S> <C>
Securities Being Offered 150,000 Shares of Common Stock
Common Stock Outstanding
Before this Offering 2,700,000 Shares of Common Stock
Common Stock Outstanding
After this Offering 2,850,000 Shares
</TABLE>
Use of Proceeds
The Company will receive $300,000 in gross proceeds from this offering if
all securities are sold. This is a best-efforts offering with no minimum. The
Company will rely on the proceeds from this offering to pay legal and accounting
fees and obtain working capital. The principal purposes and priorities in which
proceeds are to be used, are as follows: $20,000 will be used to pay legal and
accounting fees. $30,000 will be used to develop and maintain the website,
$80,000 on advertising when website becomes operating, and $100,000 on new
school openings. The remaining proceeds will be used to develop the online store
and general business purposes. See "Use of Proceeds".
5
<PAGE>
SUMMARY FINANCIAL INFORMATION
The following tables set forth the summary financial information and other
equity information of the Company. The summary financial information in the
tables is derived from the financial statements of the Company and should be
read in conjunction with the financial statements, related notes and other
financial information included herein. See "Management's Discussion and Analysis
of Results of Operations and Financial Condition" and "Financial Statements."
Statement of Operations Data
<TABLE>
<CAPTION>
Period Ended
June 30, 1999
<S> <C>
Expenses
General and Administrative (31,476)
Total Expenses (31,476)
Other Income and Expenses
Interest Income (14)
Income Taxes 800
Net Loss (32,290)
Net Loss Available to
Common Stockholders
Net (Loss) Per Share of
Common Stock (0.012)
</TABLE>
<TABLE>
<CAPTION>
Period Ended
June 30, 1999
Balance Sheet Data:
<S> <C>
ASSETS
Current assets
Cash in bank $ 17,381
Prepaid rent 677
Total current assets 18,058
Furniture and equipment
Equipment 2,206
Furniture 600
2,806
Accumulated depreciation (44)
2,762
Total assets $ 20,820
LIABILITIES AND STOCKHOLDERS EQUITY
Current liabilities
Accounts payable $ 5,770
State corporate tax liability 800
Total current liabilities 6,570
Total liabilities 6,570
Stockholders' equity
Common stock, 20,000,000 shares authorized at a
par value of 0.01 (2,627,000 outstanding) 26,270
Paid in capital 20,270
Deficit incurred during development stage (32,290)
Total stockholder's equity 14,250
Total liabilities and
stockholder's equity $ 20,820
</TABLE>
6
<PAGE>
RISK FACTORS
The securities being offered in this registration statement involve a
substantial risk. If you are thinking about purchasing Shares, you should give
consideration to the following risk factors:
Success Dependant On Growth Of Internet Related Industries, But Failure Possible
Even With Growth
Our future growth will greatly depend upon continued growth in the use of
the Internet. Even though our online school and our e-commerce business will not
be the only sources of income for the Company, we do not know if the Company can
maintain the profit and growth level expected. Some of the issues concerning the
increased use of the Internet include reliability, cost, access, and security,
which may affect further development of online services and electronic commerce
in general, as well as the market for our services and products. Our business
may fail, however, even if Internet-related industries see substantial growth.
Going Concern Status
The Company is a Development Stage Company as defined in Financial
Accounting Standards Board Statement No. 7. The Company is devoting
substantially all of its present efforts in establishing a new business and,
although planned principal operations have commenced, there have been no
significant revenues. Management's plans regarding the matters which raise
doubts about the Company's ability to continue as a going concern are disclosed
in Note 1 to the financial statements. These factors raise substantial doubt
about its ability to continue as a going concern. The consolidated financial
statements do not include any adjustments that might result from the outcome of
this uncertainty.
Low Priced Shares
The Company has issued 2,700,000 shares of common stock at an average price
of approximately $0.03 per share. These shares were issued in reliance on
exemptions from registration and will be freely tradeable at various times. As
these shares are sold into the market, the price of the common stock will be
depressed. Persons who have acquired share for $0.03 will be able to profitably
sell their shares at much less than the $2.00 offering price of the shares under
this offering. This tendency may drive the market price of the shares less than
the $2.00 offering price.
Lack of Operating History and Accumulated Losses
The Company is a development stage company organized in 1999. Since the
Company has not proven the essential elements of profitable operations, you will
be furnishing venture capital to the Company and will bear the risk of complete
loss of your investment in the event the Company's business plan is
unsuccessful. The Company has only limited experience and is expanding its
operations, which may or may not provide profits to the Company. The Company had
no revenue as of June 30, 1999. The Company has also not been profitable, having
an accumulated loss of $32,290 through June 30, 1999.
7
<PAGE>
Potential Loss of Investment
As with an investment in any emerging growth company, ownership of common
shares of the Company may involve a high degree of risk, and this investment is
not recommended if you cannot reasonably bear the risk of a total loss of your
investment.
Dependance on Executive Officers
The Company is highly dependent on the services of its officers. Attracting
and retaining qualified personnel is critical to the Company's business plan. No
assurances can be given that the Company will be able to retain or attract
qualified personnel or agents, or to implement its business plan successfully.
Should the Company be unable to attract and retain the qualified personnel
necessary, the ability of the Company to implement its business plan
successfully would be limited.
Continued Control by Existing Management
The Company's management and directors currently owns 1,250,000 of shares
of common stock of the Company and Internet Finance.com, Inc. owns 1,210,000
shares. Robert A. Strahl is the beneficial owner of the stock attributed to
Internet Finance.com, Inc. Robert A. Strahl is Michael A. Strahl's father. This
represents 44% and 43% of the outstanding shares of the Company's common stock
if all shares are sold. If the officers and Internet Finance.com, Inc. vote in
the same manner, they will retain control over all affairs of the Company,
including the election of the directors and business transactions.
Immediate and Substantial Dilution to Shareholders
The securities currently held by investors will be diluted in market value
as more securities are issued. This dilution will be immediate and substantial.
The Company is authorized to issue 20,000,000 shares of common stock. When this
offering is completed 2,850,000 shares will be outstanding. The Company will
have 17,172,500 shares remaining to be issued. You will have 5.3% of the
outstanding shares of the Company immediately after this offering. Should the
additional 17,172,500 shares be issued you will have 0.75% of the outstanding
shares of common stock.
No Market Studies
In formulating its business plan, the Company has relied on the judgment of
its officers, directors and consultants. No formal independent market studies
concerning the demand for the Company's proposed services have been conducted,
nor are any planned. The effect of the sale of the Securities has not been
analyzed for its effect on the operations of the Company, the ability of the
Company to obtain funds or financing or the variations in share price due to
additional shares being available for sale.
Arbitrary Offering Price
Before the offering made hereby, there has been no market for the Company's
Common Stock. The offering price of the Shares has been arbitrarily determined
by the Company and bears no relationship to assets, book value, net worth,
earnings, actual results of operations, or any other established investment
criteria. Among the factors considered in determining the offering price were
the Company's current financial condition, the degree of control which the
current shareholders desired to retain, and an evaluation of the prospects for
the Company's growth.
No Dividends Paid by Company
The Company's Board of Directors presently intends to cause the Company to
follow a policy of retaining earnings, if any, for the purpose of increasing the
net worth and reserves of the Company. As a result, there can be no assurance
that any holder of Common Stock will receive any cash, stock or other dividends
on his shares of Common Stock. Future dividends on Common Stock, if any, will
depend on future earnings, financing requirements and other factors. Since the
time of inception the Company has paid no dividends to shareholders.
8
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No Public Market
At this time no market exists for the sale or purchase of the common stock.
After this registration is effective, the Company will apply to list the common
stock on the NASD bulletin board exchange. Even when listed the number of shares
outstanding will not be enough to provide the large volume of trading that will
enable the share price to be stable.
NASDAQ Listed Securities - Low Priced Securities and Possible Complications from
Penny Stock Regulations
The Company is not listed on any stock exchange at this time. The Company
will make application to NASD to become a bulletin board listed company. These
are known as "penny stocks" and must follow various regulations involving
disclosures to be given to you prior to the purchase of any penny stocks. These
disclosures require you to acknowledge you understand the risk associated with
buying penny stocks and that you can absorb the entire loss of your investment.
Penny stocks are low-priced securities that do not have a very high trading
volume. Because of this the price of the stock is volatile and you may not be
able to buy or sell the stock when you want.
Uncertainty Due to Year 2000 Problem
The Year 2000 issue arises because many computerized systems use two digits
rather than four to identify a year. Date sensitive systems may recognize the
Year 2000 as 1900 or some other date, resulting in errors when information using
the year 2000 date is processed. Similar problems may arise in some systems
which use dates in 1999 to represent something other than a date. The effects of
the Year 2000 issue may be experienced before, on, or after January 1, 2000, and
if not addressed, the impact on operations and financial reporting may range
from minor errors to significant system failure which could affect the Company's
ability to conduct normal business operations. This creates potential risk for
all companies, even if their own computer systems are Year 2000 compliant. It is
not possible to be certain that all aspects of the Year 2000 issue affecting the
Company, including those related to the efforts of customers, suppliers, or
other third parties, will be fully resolved.
The Company currently believes that its systems are Year 2000 compliant in
all material respects. Its current systems and products may contain undetected
errors or defects with Year 2000 date functions that may result in material
costs. Although management is not aware of any material operational issues or
costs associated with preparing its internal systems for the Year 2000, the
Company may experience serious unanticipated negative consequences. Examples of
negative potential consequences include significant downtime for one or more of
its website properties, or material costs caused by undetected errors or defects
in the technology used in its internal systems. The purchasing patterns of
advertisers may be correct their current systems for Year 2000 compliance. The
Company does not currently have any information about the Year 2000 status of
its advertising customers. These expenditures may result in reduced funds
available for web advertising or sponsorship or web services, which could have a
material adverse effect on its business, operations and financial condition.
USE OF PROCEEDS
The Company will rely on the proceeds from this offering to open additional
schools, advertise, acquire an online store, and pay legal and accounting fees.
This is a best-efforts offering with no minimum. The principal purposes and
priorities in which proceeds are to be used, are as follows:
<TABLE>
<CAPTION>
<S> <C>
Legal and Accounting $ 20,000
Web Site Development $ 30,000
Advertising $ 80,000
Open and Maintain Schools (two to three) $ 100,000*
Online store development or acquisition $ 50,000
Working Capital $ 20,000
Total $ 300,000
</TABLE>
*This will include salaries paid to officers. This estimate is for three
schools.
Any funds not used for the purposes indicated will be used for general working
capital.
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DETERMINATION OF OFFERING PRICE
Because there has been no prior public trading market for our common stock,
the initial public offering price of the common stock has been determined by
management and is not necessarily related to our asset value, net worth or other
criteria of value. The factors considered in determining the offering price
include an evaluation by management of the history of and prospects for the
industry in which we compete and our earnings prospects. Factors such as our
financial results, announcements of developments related to our business, and
the introduction of products and product enhancements by ourselves or our
competitors may have a significant impact on the market price of our securities.
DILUTION
As of July 31, 1999, the Company had issued 2,700,000 shares of Common
Stock and the net tangible book value per share of the Common Stock was $.0078
per share of Common Stock. After giving effect to the receipt of the estimated
net proceeds from the sale of all of the Shares, and assuming that the offering
price of the Shares is $2.00 per Share, you will have paid a total of $300,000
for 150,000 shares of Common Stock and the net tangible book value of the
Company's presently outstanding shares will increase to $0.1135 per share. The
investors will experience a corresponding dilution of $1.8865 per share from the
offering price.
The following table illustrates the per share dilution to you:
<TABLE>
<CAPTION>
<S> <C>
Offering Price per share .................................................. $2.0000
Net tangible book value per share before offering ...................... $0.0078
Increase in net tangible book value per share attributable
to investors purchasing in this offering ............................ $0.1057
Pro forma net tangible book value per share after offering ................ $0.1135
Dilution per share ........................................................ $1.8865
</TABLE>
The following table summarizes the differences between existing
shareholders, as of July 31, 1999, and new investors with respect to the number
of Common Shares purchased from the Company, the total consideration paid and
the average price per share:
<TABLE>
<CAPTION>
Shares Purchased Total Consideration Paid Average Price
Number Percent Amount Percent Per Share
<S> <C> <C> <C> <C> <C>
Existing Shareholders 2,700,000 95% $ 70,995 19% $0.0263
New Investors 150,000 5% $300,000 81% $2.0000
Total 2,850,000 100% $370,995 100%
</TABLE>
PLAN OF DISTRIBUTION
The securities are being offered for sale by us through our officers and
directors. We intend to engage the services of a registered broker or dealer in
each state that requires that a registered broker or dealer act on behalf of a
company selling its own securities in that state. The offering is a
"best-efforts" offering and will conclude at the discretion of the Company, or
sooner if all the shares are sold. No underwriter has been engaged and no
commitment to provide the funds has been made. A subscription agreement will be
required to be submitted by all purchasers of the shares. Please see the table
below summarizing the offering.
10
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<TABLE>
The Offering
<CAPTION>
Price to Public Commissions Proceeds to Company
<S> <C> <C> <C>
Per Share $ 2.00 $0 $ 300,000
Total $ 2.00 $0 $ 300,000
</TABLE>
DESCRIPTION OF BUSINESS
The following discussion and analysis of our plan of operation should be
read in conjunction with the more detailed financial information contained in
our financial statements and the notes to the financial statements, all of which
is included elsewhere in this prospectus. This prospectus contains
forward-looking statements that involve risks . Our actual results may differ
materially from the results discussed in the forward-looking statements.
Overview
The Company is a development stage company, which is establishing an online
trading school along with several trading schools in California. The Company
will also sell services and products through its online store. Students and
shoppers will be able to purchase our services through our web site at
www.tradingsolutionsinc.com. Our web site is currently under development and is
expected to be operational by the end of 1999.
The Company was incorporated on May 14, 1999 by seven persons or entities
contributing $0.001 per share for 2,495,000 shares of common stock. The Company
also received funds from the exercise of options to purchase 85,000 shares of
common stock for $0.10 per share and the sale of a Regulation D private
placement of 120,000 shares for $0.50 per share. This provided the
capitalization of the Company.
The Company has not yet begun operating and has no revenue. Since
inception, the Company has been engaged in developing corporate structure,
planning operations, capital raising activities, and negotiating agreements with
prospective business affiliates. The Company has no operating revenue to date.
Cash Requirements and Additional Funding
Although management believes that the proceeds from this offering will
satisfy the Company's cash requirements for the next twelve months, we
anticipate an increase in capital expenditures consistent with anticipated
growth in operations, infrastructure and personnel. The Company will also
continue to expand marketing and development programs. The money needed will
depend on the market acceptance of the online training program and the costs to
maintain and upgrade the web site.
Additional Research and Development
The Company will not have significant research and development expenses
during the next 12 months. The development of the web site design will be
achieved through modifications of available technologies.
The Company will hire technical personnel to service the web site when
funds become available. Until then the Company will be required to engage the
services of a third party to develop the web site. The Company anticipates that
the total cost of the web site services will be $30,000.
Business
The Company intends to work on two projects.
1. Trading Solutions.com, Inc. trading school is designed to provide
education for people interested in online investing. The Company will offer
training for beginners as well as experienced traders. Courses will consist of a
combination of theory sessions linked closely with a practical hands-on
approach. The Company will provide online training, individual training, small
group sessions and seminars on various trading and computer-related subjects.
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2. The Company intends to establish or acquire an e-commerce business and
link it with the online trading school. The Company will offer a wide variety of
products for investors, including books, magazines, newspapers, online
newsletters and trading software packages.
Overview of Internet-Based Industry
Online trading is becoming more and more popular among people of different
ages, education, professions, and backgrounds. Trading Solutions.com, Inc. is
aiming at persons interested in investing but not familiar with computers or the
Internet, as well as existing traders who would like to improve their trading
techniques.
According to the Spring 1999 edition of Women In Touch magazine, "...there
are approximately 7 million online accounts registered with U.S. brokerages, and
about 350,000 trades taking place each and every day. By the end of year, the
number of online account is expected to top 10 million." The same magazine
states, according to National Foundation for Women Business Owners, a majority
of women entrepreneurs are looking into investing online. Trading Solutions.com,
Inc. intends to offer its services to this group of investors.
Financial Service Online May 1999 edition also mentions that, according to
a recent report from Credit Suisse First Boston Corp., the number of online
trades grew by almost 35% during the first quarter of 1999. This growth came
following a 34% growth in the fourth quarter of 1998.
Investment News from 5/17/99 says that as much as 19% of households with
$750,000 or more investment money will be trading online, up 5% from 1997.
According to the same magazine, the amount of American households investing
through online brokerage accounts will rise from 2.4 million at the end of 1998
to 4.3 million by the end of 2000.
By 2003 worldwide Internet Commerce will approach $3.2 trillion and
represent nearly 5% of all global sales, according to Small Business Computing,
"ABC's of E-Commerce", March, 1999. Another article, "Cyberspace Marketplace"
from Time Magazine, 7/20/98, says that by the year 2000, an estimated 1 in 4
families will be buying general merchandise online.
Marketing Strategies
Media Advertising
The Company's marketing strategy is directed towards beginners and
experienced traders. Management will work to establish a local market niche for
each one of its trading schools by advertising in local newspapers and radio.
Management will work to increase the public's awareness of the Company's name
and its services. This goal is to be achieved by carefully positioned editorials
regarding the Company's services. Special events will be sponsored from which
name affiliation and public familiarity with the services and products offered
can be achieved.
Radio and Television Advertising
The Company will optimize advertising dollars spent on radio by purchasing
air time from those radio stations whose demographics most closely resemble the
Company's clientele. Management will be responsible for contacting account
executives from various local stations and requesting proposals and statistics
regarding their station's listeners and advertising packages.
Internet and Print Advertising
The Company intends to advertise on the Internet through its web page,
which will be updated regularly. The Company will also maintain advertisements
in the local newspapers. The Company will also produce color catalogs to be
printed and distributed throughout the year.
Business Strategy
We want to become a leading online training school combined with an online
store for a one-stop learning experience. The Company will offer classes and
information with current technological information. We intend to affiliate with
professional traders to teach our online classes and seminars. Currently, the
information most in demand includes online trading, electronic trading, day
trading strategies, and the software applied in trading. We intend to offer as
many types of training and as great a variety within each subject category as
possible. We also intend to invest in our web site infrastructure. We will offer
our students access to our online store to make it easy for them to purchase
everything they need for trading and investing online. Through the online store
linked with the online school, we intend to offer products such as literature
and newspapers, books, newsletters and reader's digests, along with the trading
software packages that would specifically target online investors.
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To promote learning through Trading Solutions.com, we intend to incorporate
various features in the online school. We will update our web site to ensure
that the site is interesting and offers current information.
Sources of Revenue
Tuition
During the first stage of operations, revenues will be derived primarily
from the tuition paid by the students attending our schools, in person or
through the Internet.
The Company is planning to open three or four schools in the Bay Area in
California. Up to $100,000 of the funds raised through this offering will be
used to open these schools. This provides excess funds beyond the $20,000
estimate of the cost of opening the schools. We will know immediately if the
estimates are accurate and will modify the number of sites accordingly.
The number of training facilities which will actually open may be adjusted
in accordance with the amount of available funds. Once identified, the time to
develop a particular location varies, depending on the circumstances at each
site. A training facility can be completed in 30 to 60 days from the beginning
of the design phase. The Company's investment in a location will range from
$15,000 to $20,000 to acquire all the furniture, equipment, supplies, have some
advertising to bring the location to the point where it can be profitable. We
believe that our training facilities will not require additional funding after
the initial investment is made.
An online training school can begin operating as soon as the software and
the web site are developed for the Company. The Company is planning to establish
or acquire an Internet commerce business at an estimated cost of $50,000 to
$75,000. Profits generated from online sales are expected to be moderate and
provide additional capital for the Company's growth. The Company will be forced
to develop this software if an acquisition cannot be made or pay a third party
to develop the software.
One local web site development company which we may possible use for
development, Net-Clients.com, could develop a web site that will load to any
commercially available Internet browsers and have an e-commerce capability. Net-
Clients.com could develop software that would allow broadcasting of classes over
the Internet with existing technology. We will spend up to $30,000 of the funds
raised on our web site development.
Our goal is to become a profitable online trading school. We intend to
affiliate with professional traders and financial advisors to teach our classes.
We will offer books, video and audio learning courses by leading authors, and as
many types of products, and as wide a variety within each product category, as
possible. We will also adopt features that would attract and retain students by
offering different levels of training to address the needs of people with
different backgrounds and computer experience. We will offer basic computer
classes to prepare the students who are not familiar with the Internet.
Competition
While there are several experienced online traders who offer seminars, not
all operate in our target market segment. Developing strategies to take market
share away form these limited number of competitors will be our marketing
approach. Based on this marketing premise, we are not really competing with the
overpriced, short-term trading seminars. The strategy is to demonstrate a very
high perceived value-to-price ratio to a wide segment of potential customers
that are looking for personalized, professional instructing, without the
obstacle of a high price. We believe that the competition at this level is
limited. Some of the companies offering trading seminars are charging from $900
to $3,500 per seminar. Our basic computer and online trading courses for the
beginners will be priced at $120 to $175 per course. More advanced trading
seminars and classes will be offered to the public at $400 to $700 per course.
13
<PAGE>
HL Camp & Company offer trading seminars at $1,095 each, Legend Trading
Seminars cost $2,895 per seminar, ActiveTrade day trading classes are priced at
$3,500. Most of the seminars are oriented specifically to day trading and are of
no use to the people who would like to invest online. We are not aware of any
trading schools in the Bay area that would offer all or similar services to
students. The Company will provide its customers with choices, which span
different levels of readiness while also offering basic computer training and
possible online training.
The Company also faces competition from other web sites that provide online
investment training. We believe that by offering an all-in-one service and
providing students with the ability to purchase all the educational materials
through the web site, the Company can successfully compete in this market. We
believe the online trading education market is not saturated and has great
expansion potentials.
Government Regulation
We are not currently required to follow the regulations of any government
agency, other than regulations applicable to businesses generally or applicable
to electronic commerce. There is a chance that as the Internet becomes more
popular, new laws and regulations may be issued, which will affect companies
conducting business through the Internet. We believe that the new laws and
regulations covering consumer protection, security and privacy issues will
benefit the consumers and make people more comfortable receiving services
online. The Government may also impose additional taxes on the sales conducted
over the Internet, which will increase the cost of the operation.
Intellectual Property Rights
No licenses or patents are required for our business. The only
confidentiality is our trading system and portfolio positions, which are only
disclosed to the board members. The board of directors and secretarial staff
have all signed confidentiality and non-disclosure agreements.
Employees
As of June 29, 1999, the Company had no full time employees. Board Members
and Officers are devoting their time and effort to developing and promoting the
Company. Chief Executive Officer, Natalie Shahvaran is devoting 40 hours per
week to the affairs of the Company. Directors, Michael A. Strahl and Susan F.
Turner devote a minimum of 8 hours each per week. The Company is also using the
services of several consultants. Additional employees will be hired as required.
Year 2000 Issues
The Year 2000 issue arose because many existing computer programs use only
the last two digits to refer to a year. Therefore, these computer programs do
not properly recognize a year that begins with 20 instead of 19. If not
corrected, many computer applications could fail or create erroneous results.
Management has initiated a comprehensive program to prepare the Company's
systems for the year 2000. The Company is actively engaged in testing and fixing
applications to ensure they are Year 2000 ready. The Company does not separately
track the internal costs incurred for the Year 2000 project, but these costs are
principally the related payroll costs for corporate staff. The Company currently
does not expect remediation costs to be material nor does it expect any
significant interruption to its operations because of Year 2000 problems.
The Company is in the process of contacting all third parties with which it
has significant relationships, to determine the extent to which the Company
could be vulnerable to failure by any of them to obtain Year 2000 compliance.
Some of the Company's major suppliers and financial institutions have confirmed
that they anticipate being Year 2000 compliant on or before December 31, 1999,
although many have only indicated that they have Year 2000 readiness programs.
To date, the Company is not aware of any significant third parties with a Year
2000 issue that could materially impact the Company's operations, liquidity or
capital resources. The Company has no means, however, of ensuring that third
parties will be Year 2000 ready and the potential effect of third-party
non-compliance is currently not determinable.
14
<PAGE>
The Company has devoted and will continue to devote the resources necessary
to ensure that all Year 2000 issues are properly addressed. There can be no
assurance, however, that all Year 2000 problems are detected. Further, there can
be no assurance that the Company's assessment of its third party relationships
could be accurate. Some of the potential worst-case scenarios that could occur
include (1) corruption of data in the Company's internal systems and (2) failure
of government and insurance companies' reimbursement programs. If any of these
situations were to occur, the Company's operations could be temporarily
interrupted. The Company intends to develop Year 2000 contingency plans for
continuing operations in the event these problems arise.
The Company's executive offices are located at 200 Camino Aguajito, Suite
200, Monterey, CA, 93940. Its telephone number is (831) 375-6229.
LEGAL PROCEEDINGS
The Company is not a party to any pending legal proceedings.
DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS
The following information sets forth the names of the officers and
directors of the Company, their present positions with the Company and
biographical information.
Natalie Shahvaran (Age 22). President, Chief Executive Officer, Chief Operating
Officer, Director. Ms. Shahvaran graduated from Heald Business College with
honors and received her Associate's Degree in Computer Business Administration
in 1999. The associate's degree is a two year professional vocational degree.
She has been managing one of her family trading accounts with Datek Online
Brokerage for a period of eight months. Ms. Shahvaran worked as a computer
consultant for Monterey Ventures, Inc. from 1998 to 1999. Monterey Ventures is a
venture capital and financing company for small companies. Ms. Shahvaran was
employed by Heald College as a college algebra/business math tutor from January
1997 to December 1998.
Michael A. Strahl (Age 40). Secretary, Director. Mr. Strahl graduated from
Western State College and received his BA in Business Administration/Finance. He
was the Vice President and Director of Themiis Corporation, a merchant bank
specializing in environmental management from June 1997 to July 1999. He was
Vice President and Chief Operating Officer of Environmental Enzymes, Inc., an
enzyme manufacturing company from February 1999 to July 1999. He is currently on
the board of directors of Internet Finance.com, Inc. and Monterey Technologies,
Inc. Michael A. Strahl is also a part owner and board member since March of 1994
of the Environmental Business Network. Inc., an environmental solutions oriented
company. He was President of Environmental and Energy Group, Inc. (EEG),
consultant to the oil and gas industry from April 1992 to August 1993. Before
joining the environmental industry, Michael A. Strahl was a NASD Principal with
Corporate Securities Group from April 1998 to January 1999 and was a branch
manager for Oxford Financials from February 1990 to May 1990. An NASD Principal
must pass a series 24 Securities License which allows him to be a branch manager
of a stock brokerage form.
Susan Turner (Age 44). Chief Financial Officer, Treasurer, Director. Ms. Turner
attended the University of Michigan School of Business Administration and
received her BA in Business Administration in April 1975. She graduated with a
major in Accounting. Ms. Turner passed the CPA exam in November 1975 and
obtained a Michigan CPA license April 1978, a Georgia license September 1980 and
a California license December 1985. Ms. Turner is currently a Certified Public
Accountant. Ms. Turner started her professional career over 20 years ago with
Peat, Marwick, Mitchell, a national CPA firm from September 1975 to April 1977.
She was also audit manager for the Commercial Loan Department of General
Electric Credit Corporation in Palo Alto, CA from November 1978 to July 1981.
Ms. Turner previously managed the tax department of McGilloway & Elstob in
California from December 1984 to September 1987, and has been the proprietor of
her own CPA firm since 1987. Ms. Turner will handle the Corporation's financial
matters, including financial statement preparation, tax returns, budgeting and
forecasting.
15
<PAGE>
SECURITY OWNERSHIP OF BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of July 31, 1999, the beneficial
ownership of the Company's Common Stock by each person known by the Company to
beneficially own more than 5% of the Company's Common Stock outstanding as of
July 31, 1999 and by the officers and directors of the Company as a group.
Except as otherwise indicated, all shares are owned directly. The beneficial
ownership includes shares issued at the effective date of this offering. The
percent of class is before the offering.
After the offering Natalie Shavaran will have 44% and Internet Finance.com,
Inc. will have 46%. Robert Strahl, father of Michael Strahl, officer and
director of the Company is the beneficial owner of the shares of common stock
issued to Internet Finance.com, Inc.
<TABLE>
<CAPTION>
(1) (2) (3) (4)
Name and address of Amount and Nature Percent of
Title of Class beneficial owner Of Beneficial Ownership(1) Class(2)
<S> <C> <C> <C>
Common Stock Natalie Shahvaran 1,250,000 46%
P.O. Box 22851
Carmel, CA 93922
Common Stock Internet Finance.com, Inc.(2) 1,210,000 46%
200 Camino Aguajito
Number 200
Monterrey, CA 93940
Common Stock Monterrey Ventures, Inc.(2) 50,000
200 Camino Aguajito
Number 200
Monterrey, CA 93940
Common Stock Michael A. Strahl 20,000
814 Bel Air Way
Salinas, CA 93901
Common Stock Susan F. Turner 20,000
P.O. Box 3687
Carmel, CA 93921
Common Stock Directors and Officers 1,290,000 46%
as a group (3 persons)
</TABLE>
DESCRIPTION OF SECURITIES
Common Stock
- ------------
The Company is authorized to issue 20,000,000 shares of common stock with a
par value of $0.01 per share. Currently 2,700,000 shares are outstanding and no
options or warrants remain outstanding and no shares are reserved for any
options or warrants. Holders of the Common Stock are entitled to one vote for
each share held by them of record on the books of the Company in all matters to
be voted on by the stockholders. Holders of Common Stock are entitled to receive
dividends as may be declared from time to time by the Board of Directors out of
funds legally available, and in the event of liquidation, dissolution or winding
up of the Company, to share ratably in all assets remaining after payment of
liabilities. Any declaration of dividends on Common Stock will be at the
discretion of the Board of Directors and will depend upon a number of factors,
including the future earnings, capital requirements and financial condition of
the Company. The Company has not declared dividends on its Common Stock in the
past and the management currently anticipates that retained earnings, if any, in
the future will be applied to the expansion and development of the Company
rather than the payment of dividends.
16
<PAGE>
The holders of Common Stock have no preemptive or conversion rights and
there will not be further calls or assessments by the Company. There are no
redemption or sinking fund provisions applicable to the Common Stock. The Common
Stock currently outstanding is, and the Common Stock offered by the Company
hereby will, when issued, be validly issued, fully paid and nonassessable.
Voting Requirements
- -------------------
The Articles of Incorporation require the approval of the holders of a
majority of the Company's voting securities for the election of directors and
for fundamental corporate actions, such as mergers and sales of substantial
assets, or for an amendment to the Articles of Incorporation. There exists no
provision in the Articles of Incorporation or Bylaws that would delay, defer or
prevent a change in control of the Company.
Transfer Agent
- --------------
The transfer agent and registrar for the Company's Common Stock is
Silverado Stock Transfer, Inc., 8170 S. Eastern Avenue, Suite 4, PMB 602, Las
Vegas, NV, 89123. Its telephone number is (702) 263-0920.
Shares Eligible for Future Sale
- -------------------------------
As of July 31, 1999, the Company had 2,700,000 shares of Common Stock
outstanding. Of the 2,700,000 shares of Common Stock outstanding, 2,500,000
shares of Common Stock are beneficially held by "affiliates" of the Company. All
shares of Common Stock registered pursuant to this Registration Statement will
be freely transferable without restriction or registration under the Securities
Act, except to the extent purchased or owned by "affiliates" of the Company as
defined for purposes of the Securities Act.
In general, under Rule 144 as currently in effect, a person who has
beneficially owned "restricted" securities for at least two years, including
persons who may be deemed to be "affiliates" of the Company, may sell publicly
without registration under the Securities Act, within any three-month period,
assuming compliance with other provisions of the Rule, a number of shares that
do not exceed the greater of (i) one percent of the Common Stock then
outstanding or, (ii) the average weekly trading volume in the Common Stock
during the four calendar weeks preceding the sale. A person who is not deemed an
"affiliate" of the Company and who has beneficially owned shares for at least
three years would be entitled to sell the shares under Rule 144 without regard
to the volume and other limitations described above.
Penny Stocks
- ------------
The Company's shares are "penny stocks" within the definition of that term
contained in Rules 15g-1 through 15g-9 promulgated under the Securities Exchange
Act of 1934, as amended, which imposes sales practices and disclosure
requirements on certain broker-dealers who engage in certain transactions
involving penny stocks. These additional sales practices and disclosure
requirements could impede the sale of the Company's securities, including
securities purchased herein, in the secondary market. In addition, the liquidity
for the Company's securities may be adversely affected, with concomitant adverse
effects on the price of the Company's securities.
Under the penny stock regulations, a broker-dealer selling penny stocks to
anyone other than an established customer or "accredited investor" (generally,
an individual with an net worth in excess of $1,000,000 or annual income
exceeding $200,000 or $300,000 together with his or her spouse) must make a
special suitability determination for the purchaser and must receive the
purchaser's written consent to the transaction prior to the sale, unless the
broker-dealer is otherwise exempt. In addition, unless the broker-dealer or the
transaction is otherwise exempt, the penny stock regulations require the
broker-dealer to deliver, prior to any transaction involving a penny stock, a
disclosure schedule prepared by the Securities and Exchange Commission relating
to the penny stock. A broker-dealer is also required to disclose commissions
payable to the broker-dealer and the Registered Representative and current
quotations for the securities. A broker dealer is additionally required to send
monthly statements disclosing recent price information with respect to the penny
stock held in a customer's account and information with respect to the limited
market in penny stocks.
17
<PAGE>
INTEREST OF NAMED EXPERTS AND COUNSEL
The Company's securities counsel, Blume Law Firm, P.C., of Phoenix, Arizona
currently holds 10,000 shares of our common stock.
DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION
FOR SECURITIES ACT LIABILITIES
The Company has indemnified all officers, directors and controlling persons
of the Company against all liabilities from the sale of securities which might
arise under the Securities Act of 1933 other than as stated under Nevada law.
Insofar as indemnification for liabilities arising under the Securities Act of
1933 may be permitted to these persons pursuant to the foregoing provisions, the
Company has been informed that, in the opinion of the Securities and Exchange
Commission, this indemnification is against public policy as expressed in the
Act and is therefore unenforceable.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS AND FINANCIAL CONDITION
When used in this discussion, the words "believes", "anticipates",
"expects" and similar expressions are intended to identify forward-looking
statements. Actual results could be substantially different from those projected
due to risks and uncertainties. Readers are cautioned not to place undue
reliance on these forward-looking statements, which speak only as of the date
hereof.
Results of Operations
- ---------------------
The Company had no revenues for the period ending July 31, 1999. To date
the Company has not relied on any revenues for funding its activities and it
does not expect to receive revenues from operations to be profitable for at
least six months following the receipt of the funds raised through this
offering. We believe that the proceeds from this offering will satisfy the
Company's cash requirements for the next twelve months. The Company is also
relying on revenues received from its business. The Company anticipates an
increase in capital expenditures consistent with anticipated growth in
operations, infrastructure and personnel. The Company will also continue to
expend marketing and development programs.
Liquidity and Capital Resources
- -------------------------------
The Company does not believe that there will be significant research and
development expenses during the next 12 months. Even though we have contracted
an independent company to develop our web site design, this development will be
achieved through modifications of available technologies. Expenditures on
activities of this type do not constitute research and development expenses.
The Company expects to hire technical personnel to service the web site as
soon as sufficient funds become available either as a result of this offering,
or from the profits gained through the Company's operations. Until then the
Company will be required to engage the services of a third party to develop the
web site. The Company anticipates that the total cost of these web site services
will be $30,000.
The Company does not anticipate purchasing or selling any plant or
significant equipment during the next twelve month. We also plan to hire up to
ten additional employees by the end of our first 12 months of operations. These
additional employees may serve in any of the following capacities: teaching;
marketing and promotion; administration; and web site technicians.
18
<PAGE>
DESCRIPTION OF PROPERTY
Presently, no equipment or properties except basic computer equipment are
owned. The Company anticipates purchasing additional computer equipment for
training and trading. In addition, office furniture and office equipment that
will be needed to conduct business instruction in trading will be purchased. The
funds will come from this offering.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
On May 13, 1999, Trading Solutions.com entered into an Investment Banking
Agreement with Internet Finance.com, Inc. Under this agreement, Internet
Finance.com, Inc. was to assist the Company in the corporate formation, business
and strategic plan, assist in the areas of management structure, line
projections and marketing. Internet Finance.com, Inc. has also provided the
Company with a $3,000 bridge loan, which was repaid by the Company on June 1,
1999. Internet Finance.com, Inc. purchased 1,200,000 shares of common stock at
$.001 per share. Trading Solutions.com has also agreed to pay Internet
Finance.com, Inc. a consulting fee of $22,000 for its services. Michael A .
Strahl is the director designee appointed by Internet Finance.com under the
terms of the agreement.
Internet Finance.com, Inc. is providing consulting services to the Company
on a continual basis. Internet Finance.com, Inc. assists the Company in its
corporate day-to-day responsibilities, helps prepare investor presentation
packages, and gives professional advice and assistance in the areas of corporate
structure, corporate finance, and management structure. Internet Finance.com,
Inc. will perform the aforementioned services for a fee of $22,000 for a period
of time needed for the Company to receive funding through its SB-2 filing.
The Company currently rents office space from Monterey Ventures, Inc.
Natalie Shahvaran, who is an executive officer and a director of Trading
Solutions.com, Inc., was issued 1,200,000 shares of common stock at $0.01 per
share.
In May 1999, the Company agreed to issue options to purchase 85,000 shares
of Common Stock, which are exercisable at $.10 per share. As of August 1999,
85,000 shares were exercised. The aggregate proceeds from the exercise of the
stock options was $8,500. The following table summarizes the number of stock
options issued.
<TABLE>
<CAPTION>
NAME EXERCISE PRICE No OF SHARES
<S> <C> <C>
Natalie Shahvaran $.10 50,000
Susan F. Turner $.10 5,000
Michael A. Strahl $.10 5,000
Melissa DeAnzo $.10 5,000
Monterey Ventures, Inc. $.10 10,000
Internet Finance.com, Inc $.10 10,000
Total 85,000
</TABLE>
MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS
Market Information
- ------------------
There is no public market for the Company's common stock.
Holders
- -------
As of July 31, 1999 there were approximately forty-four (44) stockholders
of record of the Company's Common Stock.
Dividend Policy
- ---------------
The Company has never paid a dividend and does not anticipate paying any
dividends in the foreseeable future. It is the present policy of the Board of
Directors to retain the Company's earnings, if any, for the development of the
Company's business.
19
<PAGE>
EXECUTIVE COMPENSATION
The board has adopted an executive compensation plan for its Executive
Officers and Directors as follows: the board members will receive no cash
compensation or reimbursement for the expenses incurred in connection with
attending board meetings. The Company reserves the right to pay consulting fees
to its board members and officers for the time and services they provide to the
Company. Our Chief Executive Officer will receive up to $30,000 in compensation
for her full time commitment to the development and promotion of the company.
The Board has agreed to the issuance of the Company's common stock to three of
its members.
<TABLE>
SUMMARY COMPENSATION TABLE
<CAPTION>
NAME AND OTHER RESTRICTED SECURITIES ALL
PRINCIPAL ANNUAL STOCK UNDERLYING LTIP OTHER
POSITION YEAR SALARY COMPENSATION AWARD OPTIONS/SAR's PAYOUTS COMPENSATION
<S> <C> <C> <C> <C> <C> <C> <C>
Natalie Shahvaran 1999 0 $ 30,000 0 0,000* 0
President/CEO/
Director
Michael A. Strahl 1999 0 0 0 5,000* 0
Secretary/Director
Susan F. Turner 1999 0 0 5,000* 0 0
Treasurer/CFO/
Director
</TABLE>
*The board also issued Stock Options to the officers and directors of the
Company. These options have been exercised and the above listed options reflect
those shares.
Employment and Change of Control Contracts
- ------------------------------------------
The Company does not currently have any employment agreements with its
employees or key personnel.
20
<PAGE>
FINANCIAL STATEMENTS
TRADING SOLUTIONS.COM, INCORPORATED
(A Development Stage Company)
Financial Statements
With
Independent Auditor's Report
Prepared by
HAWKINS ACCOUNTING
CERTIFIED PUBLIC ACCOUNTANT
SALINAS, CALIFORNIA
21
<PAGE>
TRADING SOLUTIONS.COM, INCORPORATED
(A Development Stage Company)
Index to Financial Statements
Page
----
Independent Auditor's Report 2
Balance Sheet 3
Statement of Operations, From date of
Inception to June 30, 1999 4
Statement of Shareholder's Equity 5
Statement of Cash Flows, From date of
Inception to June 30, 1999 6
Notes to Financial Statements 7
22
<PAGE>
HAWKINS ACCOUNTING
CERTIFIED PUBLICE ACCOUNTANT
341 MAIN STREET
SALINAS CA 93901
(831) 758-1694 FAX (831) 758-1699
To the Board of Directors and Shareholders
Trading Solutions.Com, Incorporated
Monterey, California
Independent Auditor's Report
I have audited the balance sheet of Trading Solutions.Com, Incorporated (a
development stage company) as of June 10, 1999 and the related statements of
operations, stockholders' equity and cash flows from the date of inception to
June 30, 1999. These financial statements are the responsibility of the
Company's management. My responsibility is to express an opinion on these
financial statements based on my audit.
I conducted my audit in accordance with generally accepted auditing standards.
Those standards require that I plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining on a test basis, evidence supporting
the amounts and assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. I believe that my audit provides reasonable basis for my
opinion.
In my opinion, the financial statements referred to in the first paragraph
present fairly, in all material respects, the financial position of Trading
Solutions.Com, Incorporated, as of June 30, 1999 and the results of operations
and its cash flows and the cumulative results of operations and cumulative cash
flows for the period from date of inception to June 30, 1999 in conformity with
generally accepted accounting principles.
The accumulated deficit during the development stage for the period from date of
inception to June 30, 1999 is $32,290.
The accompanying financial statements have been prepared assuming the Company
will continue as a going concern. As discussed in Note 7 to the financial
statements, the Company has incurred net losses from operations and has received
no revenue, which raises substantial doubt about its ability to continue as a
going concern. The financial statements do not include any adjustment that might
result from the outcome of this uncertainty.
July 21, 1999
23
<PAGE>
TRADING SOLUTIONS.COM, INCORPORATED
(A Development Stage Company)
BALANCE SHEET
June 30, 1999
<TABLE>
<CAPTION>
<S> <C>
ASSETS
Current assets
Cash in bank $ 17,381
Prepaid rent 677
Total current assets 18,058
Furniture and equipment
Equipment 2,206
Furniture 600
2,806
Accumulated depreciation (44)
2,762
Total assets $ 20,820
LIABILITIES AND STOCKHOLDERS EQUITY
Current liabilities
Accounts payable $ 5,770
State corporate tax liability 800
Total current liabilities 6,570
Total liabilities 6,570
Stockholders' equity
Common stock, 20,000,000 shares authorized at a
par value of .0 1. 2,627,000 outstanding 26,270
Paid in capital 20,270
Deficit incurred during development stage (32,290)
Total stockholder's equity 14,250
Total liabilities and
stockholder's equity $ 20,820
</TABLE>
The accompanying notes are an integral part of these financial statements
24
<PAGE>
TRADING SOLUTIONS.COM, INCORPORATED
(A Development Stage Company)
STATEMENT OF OPERATIONS
From date of inception to June 30, 1999
<TABLE>
<CAPTION>
Deficit
Accumulated
During
Development
Stage
<S> <C> <C>
Expenses
Accounting fees 3,000 $ 3,000
Bank charges 60 60
Consulting fees 9,150 9,150
Depreciation 44 44
Management fees 5,000 5,000
Miscellaneous 554 554
Office supplies 833 833
Postage 66 66
Promotions 271 271
Legal fees 10,100 10,100
Organizational costs 896 896
Rent 600 600
Telephone 268 268
Travel 634 634
--- ---
Loss from olierations prior to
other expenses and taxes (31,476) (31,476)
Other (expenses)
Interest (14) (14)
---- ----
Loss prior to income taxes (31,490) (31,490)
Income taxes
State corporate tax 800 800
--- ---
Net loss $ (32,290) $ (32,290)
-------- ----------
-------- ----------
Loss per common
share $ (0.012) $ ($0.012)
------- ----------
------- ----------
Weighted average of
shares outstanding 21,587,302 2,587,302
---------- ---------
---------- ---------
</TABLE>
The accompanying notes are an integral part of these financial statements
25
<PAGE>
TRADING SOLUTIONS.COM, INCORPORATED
(A Development Stage Company)
STATEMENT OF STOCKHOLDER'S EQUITY
June 30,1999
<TABLE>
<CAPTION>
Deficit
Accumulated
Paid During
Common Stock In Development
Shares Amount Capital Stage Total
<S> <C> <C> <C> <C> <C>
Founders stock 2,490,000 $ 24,900 (22,410) $ 2,490
Options 60,000 600 4,950 5,550
May 18,1999 14,000 140 6,860 7,000
May 21, 1999 2,000 20 980 1,000
May 24,1999 3,000 30 1,470 1,500
May 27,1999 2,000 20 980 1,000
June 2, 1999 10,000 100 4,900 5,000
June 3, 1999 2,000 20 980 1,000
June 4, 1999 4,000 40 1,960 2,000
June 7, 1999 2,000 20 980 1,000
June 13, 1999 2,000 20 980 1,000
June 16, 1999 3,000 30 1,470 1,500
June 17, 1999 10,000 100 4,900 5,000
June 22, 1999 2,000 20 980 1,000
June 25, 1999 1,000 10 490 500
June 27, 1999 6,000 60 2,940 3,000
June 29, 1999 12,000 120 5,880 6,000
June 30, 1999 2,000 20 980 1,000
(32,290) (32,290)
Total 2,627,000 $ 26,270 $ 20,270 $ (32,290) $ 14,250
</TABLE>
The accompanying notes are an integral part of these financial statements
26
<PAGE>
TRADING SOLUTIONS.COM, INCORPORATED
(A Development Stage Company)
STATEMENT OF CASH FLOWS-INDIRECT METHOD
From date of inception to June 30, 1999
<TABLE>
<CAPTION>
Deficit
Accumulated
During
Development
Stage
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ (32,290) $ (32,290)
Adjustment to reconcile net income to net cash
provided by operating activities
Depreciation 44 44
Increase in prepaid rent (678) -678
Increase in accounts payable 5,770 5770
Increase in taxes payable 800 800
NET CASH PROVIDED BY OPERATING ACTIVITIES (26,354) (26,354)
INVESTING ACTIVITIES
Purchase of furniture and equipment 2,806 2,806
NET CASH USED IN INVESTING ACTIVITIES 2,806 2,806
FINANCING ACTIVITIES
Sale of common stock 46,540 46,540
Short term borrowing 3,000 3,000
Payment of short term borrowing (3,000) (3,000)
NET CASH REALIZED FROM FINANCING ACTIVITIES 46,540 46,540
INCREASE IN CASH AND CASH EQUIVALENTS 17,380 17,380
Cash and cash equivalents at the beginning of the year 0 0
CASH AND CASH EQUIVALENTS $ 17,380 17,380
Supplemental disclosure of financiang activities
Interest paid during the period from date of
inception to June 30, 1999 $ 14 $ 14
</TABLE>
The accompanying notes are an integral part of these financial statements
27
<PAGE>
TRADING SOLUTIONS.COM, INCORPORATED
(A Development Stage Company)
Notes to Financial Statements
June 30, 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 ecommerce business to link with the trading
school.
Development Stage Company
- ---------------------------
The Company is a development stage company, as developed in the Financial
Accounting Standards Board No. 7. The Company is devoting substantially all of
its present efforts in securing and establishing a new business, and although
planned operations have commenced, no revenues have been realized.
Pervasiveness of estimates
- --------------------------
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets, liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from these estimates.
Cash and cash eguivalents
- -------------------------
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 eguipment
- ----------------------
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
28
<PAGE>
TRADING SOLUTIONS.COM, INCORPORATED
(A Development Stage Company)
Notes to Financial Statements
June 30, 1999
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
- -------------
The board of directors for the Company voted at its organizational meeting
to grant certain people and organizations the opportunity to purchase shares of
the Company's common stock at $. 10. These options are non-compensatory and are
recorded when exercised.
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 June 30, 1999.
<TABLE>
<CAPTION>
Useful life
Years Amount
<S> <C> <C>
Computer equipment 5 $2,206
Office ftu-niture 10 600
Total 2,806
Accumulated depreciation (44)
Net equipment and furniture $2,762
</TABLE>
Depreciation expense for the period from date of inception to June 30, 1999 was
$ 44.
NOTE 4: COMMON STOCK
Founders stock
- --------------
At incorporation the Company issued stock to the founders of the
corporation. These shares totaled 2,490,000 shares and were issued for
consideration of $.001 per share.
29
<PAGE>
TRADING SOLUTIONS.COM, INCORPORATED
(A Development Stage Company)
Notes to Financial Statements
June 30, 1999
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 at June
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 June 30,
1999 to 22 different investors buying a total of 77,000 shares of common stock.
Total proceeds, from the offering, as of the period ended June 30, 1999 were
$38,500.
NOTE 5: INCOME TAXES
The benefit for income taxes from operations consisted of the following
components: current tax benefit of $4,843 resulting from a net loss before
income taxes, and a deferred tax expense of $4,843 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.
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 $5,000 was paid for
30
<PAGE>
TRADING SOLUTIONS.COM, INCORPORATED
(A Development Stage Company)
Notes to Financial Statements
June 30, 1999
NOTE 6: RELATED PARTY TRANSACTIONS (con't)
the period ended June 30, 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 June
30, 1999 was $1,465. [NEED AGREEMENT;ATTACH AS EXHIBIT]
The Company also entered into an agreement with another shareholder to
provide consulting services to the Company. This agreement totals $30,000 of
which $6,000 was paid as of June 30, 1999.
There is an agreement with one of the founders to provide support services
to the Company. This agreement has a maximum of $6,000. The total amount paid as
of June 30, 1999 was $3,050. [NEED AGREEMENT; ATTACH AS EXHIBIT]
NOTE 7: GOING CONCERN
From the date of inception to June 30, 1999, the Company has yet to
commence receiving 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 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.
31
<PAGE>
TRADING SOLUTIONS.COM, INCORPORATED
(A Development Stage Company)
Notes to Financial Statements
June 30, 1999
NOTE 7: GOING CONCERN (con't)
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.
32
<PAGE>
EXPERTS AND LEGAL MATTERS
The financial statements of Trading Solutions.com, Inc. for the period from
February 1, 1999 to June 30, 1999 included in this prospectus and registration
statement have been audited by Richard Hawkins, CPA, an independent auditor, as
stated in his report and have been so included in reliance upon the report of
this CPA given upon his authority as expert in accounting and auditing.
Legal matters regarding this offering will be passed upon for the Company
by Gary R. Blume, Esq., Blume Law Firm, P.C., 11801 North Tatum Boulevard, Suite
108, Phoenix, Arizona 85028.
33
<PAGE>
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
ON ACCOUNTING AND FINANCIAL DISCLOSURE
The Company has had no changes in or disagreements with its accountants
from inception to the present time.
PART II
INDEMNIFICATION OF DIRECTORS AND OFFICERS
The officers and directors of the Company are indemnified as provided under
the Nevada Law and as detailed in the Bylaws.
The indemnification states that "the Corporation shall indemnify any and
all of its Directors and Officers, and its former Directors and Officers, or any
person who may have served at the Corporations request as a Director of Officer
of another Corporation in which it owns shares of capital stock or of which it
is a creditor, against expenses actually and necessarily incurred by them
connection with the defense of any action, suit or proceeding in which they, or
any of them, are made parties, or a party, by reason of being or having been
Director(s) or Officer(s) of the Corporation, or of such other Corporation,
except, in relation to matters as to which any such director or officer of
former director or of officer or person shall be adjudged in such action, suite
or proceeding to be liable for negligence or misconduct in the performance of
duty. Such indemnification shall not be deemed exclusive of any other rights to
which those indemnified may be entitled, under Bylaw, agreement, vote of
Stockholders or otherwise."
There are no indemnification provisions available to the Directors,
Officers and controlling persons of the Company under the Securities Act as
required by Item 510 of Regulation S-B.
OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The expenses of the Registration Statement are as follows:
<TABLE>
<CAPTION>
<S> <C>
Transfer Agent: $ 1000
Legal and Accounting: $ 10,500
TOTAL $ 11,500
</TABLE>
RECENT SALES OF UNREGISTERED SECURITIES
Upon incorporation, seven founders were issued common stock. Natalie
Shahvaran was issued 1,200,000 shares of common stock at $.001 on June 25, 1999,
Susan F. Turner was issued 15,000 shares of common stock at $.001 on June 7,
1999, Michael A. Strahl was issued 15,000 shares of common stock at $.001 on
June 2, 1999, Internet Finance.com, Inc. was issued 1,200,000 shares of common
stock at $.001 on May 19, 1999, Blume Law Firm, P.C. was issued 10,000 shares of
common stock at $.001 on June 27, 1999, Melissa DeAnzo was issued 5,000 shares
of common stock at $.001 on May 19, 1999, Monterey Ventures was issued 50,000
shares of common stock at $.001 on May 19, 1999. These were issuances of
securities from the Company not involving a public offering and were exempt from
the registration provisions of the Securities Act of 1933, as amended, pursuant
to section 4(2). The securities bear a restrictive legend permitting the
transfer thereof only upon registration of the securities or an exemption under
the Securities Act.
34
<PAGE>
Under the terms of a private placement done by the Company in reliance on
Regulation D, Rule 504, 120,000 shares of common stock of the Company was sold
to the investors listed below.
<TABLE>
<CAPTION>
Shareholder Date
<S> <C>
Nina Santa Cruz 5/12/99
Robert A. Strahl, trustee 5/12/99
Twin Rivers, L.L.C. 5/12/99
Deborah L. Flores 5/13/99
Deborah L. Flores 6/2/99
Maziar Roohbakhsh 5/21/99
Twin Rivers, L.L.C. 5/24/99
Robert A. Strahl, trustee 5/24/99
Christopher R. Heid 5/27/99
Florence G. Roberts 5/27/99
Jeffrey W. Leonard & Joni M. Leonard 6/2/99
Dan Weiss & Eileen Freeland 6/2/99
James E. MacArthur 6/4/99
MaryAnn Meza 6/7/99
Joe Scales 6/3/99
Jesus Jiminez & Kimberly Jiminez 6/13/99
Gary Russell 6/16/99
Aggie, Inc. 6/16/99
Harry Murray 6/17/99
David Varnes & Kathy Varnes 6/22/99
Greg Ludwa 6/25/99
T.E. Melnick 6/27/99
Lisa Komoroczy 6/27/99
James W. Silveria 6/29/99
Ned Opdyke & Ann Opdyke 6/30/99
Diane Fletcher 7/1/99
Robert C. Kramer 7/1/99
William D. Barry 7/1/99
Kenneth Green 7/1/99
Daniel Rich 7/1/99
Mary Rich 7/1/99
Michael Dowell 7/2/99
Dennis Barrickman 7/2/99
Denis E. Zambetti 7/5/99
George Richard Hogan 7/8/99
Sabina Skibinski 7/12/99
Neil Tucker & Nancy Tucker 7/14/99
</TABLE>
The offering was closed on August 18, 1999 and resulted in receipt by the
Company of $60,000. All shares were sold to a total on nine accredited and
twenty eight unaccredited investors. The proceeds from this offering were used
for working capital, legal, accounting and consulting fees.
In May 1999, the Company also voted to grant options to its directors,
officers, key personnel, and to Internet Finance.com, Inc., Monterey Ventures,
Inc., and Melissa DeAnzo. These options are exercisable at $.10 per share and
consist of a total of 85,000 options with an expiration date of 12/31/2002. The
options are not compensatory, nor do they represent services rendered. The
options were issued in reliance upon Section 4(2) of the Securities Act of 1993.
To date, all options have been exercised.
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit Description
<S> <C>
3. Articles of Incorporation and Bylaws
3a. Articles of Incorporation and Amendments
3b. Bylaws
23. Consent of Experts and Counsel
23a. Consent of Independent Auditor
27. Financial Data Schedule
99. Investment Banking Agreement
99.1 Investment Letter
99.2 Stock Subscription Agreement
CORRESPONDENCE Letter from Hawkins Accounting
COVER LETTER Response Letter to Comment Letter dated
November 2, 1999
</TABLE>
35
<PAGE>
UNDERTAKINGS
To the extent that our directors, officers and controlling persons may be
indemnified for liabilities arising under the Securities Act of 1933 pursuant to
the foregoing provisions, or otherwise, we have been advised that, in the
opinion of the Securities and Exchange Commission, this indemnification is
against public policy as expressed in the Act and is, therefore, unenforceable.
If a claim for indemnification against these liabilities is asserted by the
director, officer or controlling person in connection with the securities being
registered, we will submit the question of whether the indemnification by it is
against public policy as expressed in the Act to a court of appropriate
jurisdiction and will be governed by the court's decision. We will not litigate
if, in the opinion of our attorney, the question has already been decided by a
court in the relevant jurisdiction. Claims asking us to pay expenses incurred or
paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding will not be submitted to a
court.
The issuer will file, during any period in which it offers or sells
securities, a post-effective amendment to this registration statement to include
any prospectus required by section 10(a)(3) of the Securities Act, to reflect in
the prospectus any facts or events which represent a fundamental change in the
information in the registration statement and to include any additional or
changed material information on the plan of distribution.
For determining liability under the Securities Act, the issuer will treat
each post-effective amendment as a new registration statement of the securities
offered, and the offering of the securities at that time to be the initial bona
fide offering.
The issuer will file a post-effective amendment to remove from registration
any of the securities that remain unsold at the end of the offering.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized in the City of Naperville, State of
Illinois.
TRADING SOLUTIONS.COM, INC.
/s/ Susan Turner
----------------
Susan Turner, Chief Financial Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Gary R. Blume, Esq. as true and lawful
attorneys-in-fact with full power of substitution and resubstitution, for him
and in his name, place and stead, in any and all capacities, to sign any or all
amendments (including post-effective amendments) to this Registration Statement,
and to file the same, with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange Commission, granting unto
said attorneys-in-fact full power and authority to do and perform each and every
act and thing requisite and necessary to be done in and about the premises, as
fully to all intents and purposes as he might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact or their or his
substitute or substitutes, may lawfully do or cause to be done by virtue hereon.
36
<PAGE>
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the date indicated.
/s/ Natalie Shahvaran Chief Executive Officer 11/24/99
- --------------------- ----------------------- --------
Natalie Shahvaran Date
/s/ Susan Turner Chief Financial Officer 11/24/99
- ---------------- ----------------------- --------
Susan Turner Date
/s/ Michael A. Strahl Secretary 11/24/99
- --------------------- --------- --------
Michael A. Strahl Date
37
Articles of Incorporation
of
TRADING SOLUTIONS.COM, INC.
FIRST. The name of the corporation is:
TRADING SOLUTIIONS.COM, INC.
SECOND. Its principle office hi. the State of Nevada is located at 251
Jeanell Dr. Suite 3, Carson City, NV 89703, although this Corporation may
maintain an office, or offices, in such other place within or without the state
of Nevada as may from time to time be designated by the Board of Directors, or
by the by-laws of said Corporation, and that this Corporation may conduct all
Corporation business of every kind and nature, including the holding of all
meetings of Directors and Stockholders, outside the State of Nevada as well as
within the State of Nevada.
THIRD. The objects for which. this Corporation is formed are: To engage in
any lawful activity, including, "but not limited to the following:
(A) Shall have such rights, privileges and powers as may be conferred upon
corporations by any existing law.
(B) may at any time exercise sucb rights, privileges and powers, when not
inconsistent with the purposes and objects for which this corporation is
organized.
(C) Shall have power to have succession by its corporate name for the
period limited in its certificate or articles of Micorporation, and when no
period is limited, perpetually, or until dissolved, and its affairs wound up
according to law.
(D) Shall have power to sue and be sued in any court of law or equity.
(E) Shall have power to make contracts.
(F) Shall have power to hold, purchase and convey real and personal estate
and to mortgage or lease any such real and personal estate with its franchises.
The power to hold real and personal estate shall include the power to take the
same devise or bequest in the State of Nevada, or any other state, territory or
country.
<PAGE>
(G) Shall have power to appoint such officers and agents as the affairs of
the corporation shall require, and to aRow them suitable compensation.
(H) Shall have power to make by-laws not inconsistent with the constitution
of the United States, or of the State of Nevada, for the management, regulation
and government of its affairs and property, the transfer of its, stock the
transaction of its business, and the calling and holding of meetings of its
stockholders.
(I) Shall have power to wind up and dissolve itself, or be wound up or
dissolved.
(J) Shall have power to adopt and use a common seal or stamp by the
corporation on any corporate documents is not necessary. The corporation may use
a seal or stamp, if it desires, but such non-use shall not in any way affect the
legality of the document.
(K) Shall have power to borrow money and contract debts when necessary for
the transaction of its business, or for the exercise of its corporate rights,
privileges or franchises, or for any other lawful purpose of its incorporation;
to issue bonds, promissory notes, bills of exchange, debentures, and other
obligations and evidences of indebtedness, payable upon the happening of a
specified event or events, whether secured by mortgage, pledge, or otherwise, or
unsecured, for money borrowed, or in payment for property purchased, or
acquired, or for any other lawful object.
(L) Shall have power to guarantee, purchase, hold, sell, assign, transfer,
mortgage, pledge or otherwise dispose of the shares of the capital stock or any
bonds, securities or evidences of the indebtedness created by, any other
corporation or corporations of the State of Nevada, or any other state or
government and while owners ofsuch stock, bonds, securities or evidences of
indebtedness, to exercise all the rights, powers and privileges of ownership,
including the right to vote, if any.
(M) Shall have power to purchase, hold, sell and transfer shares of its own
capital. stock, and use therefor its capital, capital surplus, surplus, or other
p-roperty or fund.
(N) Shall, have power to conduct business, have one or more offices, and
hold, purchase, mortgage and convey real and personal property in the State of
Nevada, and in any of the states, territories, possessions and dependencies of
the United States, the District of Columbia, and any foreign countries.
<PAGE>
(0) Shall have power to do all and everything necessary and. proper for the
accomplishment of the objects enumerated in its certificate or articles of
incorporation, or any amendment thereof or necessary or incidental to the
protection and benefit of the corporation, and, in general, to carry on any
lawful business necessary or incidental to the attainment of the objects of the
corporation, or any amendment thereof.
(P) Shall have the power to make donations, for the public welfare or for
charitable, scientific or educational purposes.
(Q) Shall have the power to enter into partnerships, general or limited, or
joint ventures, in connection with any lawful activities.
FOURTH. That the voting common stock authorized may be issued by the
corporation is TWENTY MILLION (20,000,000) shares of stock with a nominal or par
value of . 0 1 and no other class of stock shall be authorized. Said shares with
a nominal or par value may be issued by the corporation from time to time for
such considerations as may be fixed from time to time by the Board of Directors.
FIFTH. The governing body of the corporation shall be known as directors,
and the number of directors may from time to time be increased or depreased in
such manner as shall be provided by the By-Laws of this Corporation, providing
that the number of directors shall be reduced to no less than one (1). The name
and post office address of the first Board of Directors shall be one (1) in
number and listed as follows:
NAME POST OFFICE ADDRESS
Michael D. Taylor 251 Jeanell Dr. Suite 3
Carson City, NV 89703
SIXTH. The capital stock, after the amount of the subscription price, or
par value, has been paid in, shallnot be subject to assessment to pay the debts
of the corporation.
<PAGE>
SEVENTH. The name and post office address of the incorporator(s) signing
the Articles of Incorporation is as follows:
NAME ADDRESS
Michael D. Taylor 251 Jeanell Dr. Suite 3
Carson City, Nevada 89703
EIGHTH. The resident agent for this corporation shall be:
CORPORATE ADVISORY SERVICE, INC.
The address of said agent, and, the principle or statutory address of this
corporation in the State of Nevada is.
251 Jeanell Dr. Suite 3,
Carson City, Nevada 89703
NINTH. The corporation is to have perpetual existence.
TENTH. In furtherance and, not in limitation of the powers conferred by
statute, the Board of Directors is expressly authorized:
Subject to the By-Laws, if any, adopted by the stockholders, to make, alter
or amend the By-Laws of the Corporation.
To fix the amount to be served as working capital over and above its
capital stock paid in; to authorize and cause to be executed, mortgages and
liens upon the real and personal property of this corporation.
By resolution passed by a majority of the whole Board, to consist of one
(1), or more committees, each committee to consist of one or more directors of
the corporation, which, to the extent provided in the resolution, or in the
By-Laws of the Corporation, shall have and may exercise the powers of the Board
of Directors in the management of the business and affairs of the Corporation.
Such committee, or committees, shall have such name, or names, as may be
stated in the By-Laws of the Corporation, or as may be determined from time to
time by resolution adopted by the Board of Directors.
<PAGE>
When and as authorized by the affirmative vote of the Stockholders holding
stock entitling them to exercise at least a majority of the voting power given
at a Stockholders meeting called for the purpose, or when authorized by written
consent of the holders of at least a majority of the voting stock is'sued and
outstanding, the Board of Directors shall have power and authority at any
meeting to sell, lease, or exchange all of the property and assets of the
Corporation, including its good will and its corporate franchises, upon such
terms and conditions as its Board of Directors deems expedient and for the best
interests, of the Corporation.
ELEVENTH. No shareholder shall be entitled as a matter of right to
subscribe for, or receive additional shares of any class of stock of the
Corporation, whether now or hereafter authorized, or any bonds, debentures or
securities convertible into stock may be issued or disposed of by the Board of
Directors to such persons and on such terms as is in its discretion it shall
deem advisable.
TWELFTH. No director or officer of the Corporation shall be personally
liable to the Corporation or any of its stockbolders, for damages for breach of
fiduciary duty as a director or officer involving any act of omission of any
such director or officer; provided, however, that the foregoing provision shall
not eliminate or limit the liability of a director or officer (i) for acts or
omissions which involve intentional misconduct; fraud or a knowing violation of
the law, or (ii) the payment of dividends in violation of Section 78.300 of the
Nevada Revised Statutes. Any repeal or modification of this Article by the
stockholders of the Corporation shall be prospective only, and shall not
adversely affect any limitation on the personal liability of a director or
officer of the Corporation for acts or omissions prior to such repeal or
modification.
THIRTEENTH. This Corporation reserves the rigbt to amend, alter, change, in
any manner now or hereafter prescribed by statute, or by the Articles of
Incorporation, and all rights conferred upon Stockholders herein are granted
subject to this reservation.
<PAGE>
I, THE UNDERSIGNED, being the Incorporator Herein before named for the
purpose of forming a Corporation pursuant to the General Corpbration Law of the
State Of Nevada, do make and file these Articles of Incorporation, hereby
declaring and certifying that the facts herein are true, and accordingly have
hereunto set my hand this 10th. day of May,, 1999.
/s/ Michael D. Taylor
---------------------
Michael D. Taylor
STATE OF NEVADA )
) ss.
CARSON CITY )
On this 10th. day of May, 1999, in Carson City, Nevada, before me, the
undersigned, a Notary Public in and for Carson City, State of Nevada,
personally appeared:
Michael D. Taylor
Known to be the person whose name is subscribed to the foregoing document and
acknowledged to me that he executed the same.
/s/ Deanna K. Kelly
- -------------------
Notary Public
Corporate Advisory Service, Inc. does hereby accept as Resident Agent for
thepreviously named Corporation.
Corporate Advisory Service, Inc.
/s/ Michael D. Taylor 5/10/99
- --------------------- -------
By Mchael D. Taylor, President Date
TRADING SOLUTIONS.COM, INC.
---------------------------
By-Laws
-------
ARTICLE I MEETINGS OF STOCKHOLDERS
- --------- ------------------------
1. Stockholders meetings shall be held in the office of the Corporation, at
Carson City, NV, or at such other place or places as the directors shall from
time to time determine.
2. The annual meeting of the Stockholders of this Corporation shall be held
at 11 A.M., on the 14th. day of May of each year beginning in 2000, at which
time there shall be elected by the Stockholders of the Corporation a Board of
Directors for the ensuing year, and the Stockholders shall transact such other
bus m*ess as shall properly come before them.
3. A notice setting out the time and place of such annual meeting shall be
mailed postage prepaid to each of the Stockholders of record, at his address and
as the same appears on the stock book of the company, or if no such address
appears, at his last known place of business, at least ten (10) days prior to
the annual meeting.
4. If a quorum is not present at the annual meeting, the Stockholders
present, in person or by proxy, may adjourn to such future time as shall be
agreed upon by them, and notice of such adjournment shall be mailed, postage
prepaid, to each Stockholder of record at least ten (10) days before such date
to which the meeting was adjourned; but if a quorum is present, they may adjourn
from day to day as they see fit, and no notice of such adjournment need be
given.
5. Special meetings of the Stockholders may be called at any time by the
President; by all of the Directors provided there are no more than three, or if
more than three, by any three Directors; or by the holder of a majority share of
the capital stock of the Corporation. The Secretary shall send a notice of such
called meeting to each Stockholder of record at least ten (10) days before such
meeting, and such notice shall state the time and place of the meeting, and the
object thereof No business shall be transacted at a special meeting except as
stated in the notice to the Stockholders, unless by unanimous consent of all the
Stockholders present, either in person or by proxy, all such stock being
represented at the meeting.
<PAGE>
6. A majority of the stock issued and outstanding, either in person or by
proxy, shall constitute a quorum for the transaction of business at any meeting
of the Stockholders.
7. Each Stockholder shall be entitled to one vote for each share of stock
in his own name on the books of the company, whether represented in person or by
proxy.
8. All proxies shall be in writing and signed.
9. The following order of business shall be observed at all meetings of the
Stockholders so far as is practicable:
a. Call the roll;
b. Reading, correcting, and approving of the minutes of the previous meeting;
c. Reports of Officers;
d. Reports of Committees;
e. Election of Directors;
f. Unfinished business; and
g. New business
ARTICLE II STOCK
- ---------- -----
1 . Certificates of stock shall be in a form adopted by the Board of
Directors and shall be signed by the President and Secretary of the Corporation.
2. . All certificates shall be consecutively numbered; the name of the
person owning the shares represented thereby, with the number of shares and the
date of issue shall be entered on the company's books.
3. All certificates of stock transferred by endorsement thereon shall be
surrendered by cancellation and new certificates issued to the purchaser or
assignee.
<PAGE>
ARTICLE III DIRECTORS
- ----------- ---------
1. A Board of Directors, consisting of at least one (1) person shall be
chosen annually by the Stockholders at their meeting to manage the affairs of
the company. The Directors'terrn of office shall be one year, and Directors may
be re-elected for successive annual terms.
2. Vacancies on the Board of Directors by reason of death, resignation or other
causes shall be filled by the remaining Director or Directors choosing a
Director or Directors to fill the unexpired term.
3. Regular meetings of the Board of Directors shall be held at 1 P.M., on the
14th. day of May of each year beginning in 2000 at the office of the company at
Carson City, NV, or at such other time or place as the Board of Directors shall
by resolution appoint; special meetings may be called by the President or any
Director giving ten (10) days notice to each Director. Special meetings may also
be called by execution of the appropriate waiver of notice and call when
executed by a majority of the Directors of the company. A majority of the
Directors shall constitute a quorum.
4. The Directors have the general management and control of the business and
affairs of the company and shall exercise all the powers that may be exercised
or performed by the Corporation, under the statutes, the Articles of
Incorporation, and the By-Laws. Such management will be by equal vote of each
member of the Board of Directors with each board member having an equal vote.
5. A resolution, in writing, signed by all or a majority of the members of
the Board of Directors, shall constitute action by the Board of Directors to
effect therei expressed, with the same force and effect as though such
resolution has been passed at a duly convened meeting; and it shall be the duty
of the Secretary to record every such resolution in the Minute Book of the
Corporation under its proper date.
<PAGE>
ARTICLE IV OFFTCFRS
- ---------- --------
1. The officers of this company shall consist of. a President, one or more
Vice President(s), Secretary, Treasurer, Resident Agent, and such other officers
as shall, from. time to time, be elected or appointed by the Board of Directors.
2. The PRESIDENT shall preside at all meetings of the Directors and the
Stockholders and shall have general charge and control over the affairs of the
Corporation subject to the Board of Directors. He shall sign or countersign 0
certificates, contracts and other instruments of the Corporation as authorized
by the Board of Directors and shall perform all such other duties as are
incident to his office or are required by him by the Board of Directors.
3. The VICE PRESIDENT shall exercise the functions of the President during
the absence or disability of the President and shall have such powers and such
duties as may be assigned to him from time to time by the Board of Directors.
4. The SECRETARY shall issue notices for all meetings as renuired bv the
Bv-Laws shall keen a record of the minutes of the proceedings of the meetings of
the Stockholders and Directors, shall have charge of the corporate books, and
shall make such reports and perforin such other duties as are incident to his
office, or properly required of him by the Board of Directors. He shall be
responsible that the corporation complies with Section 78.105 of the Nevada
Corporation laws and supplies to the Nevada Resident Agent or Registered Office
in Nevada, and maintain, any and all amendments or changes to the By-Laws of the
Corporation. In compliance with Section 78.105, he will also supply to the
Nevada Resident Agent or registered Office in Nevada, and maintain, a current
statement setting out the name of the custodian of the stock ledger or duplicate
stock ledger, and the present and complete Post Office address, including street
and number, if any, where such stock ledger or duplicate stock ledger specified
in the section is kept.
5. The TREASURER shall have the custody of all monies and secunties of the
Corporation and shall keep regular books of account. He shall disburse the funds
of the Corporation in payment of the just demands against the Corporation, or
as may be ordered by the Board of Directors, making proper vouchers for such
disbursements and shall render to the Board of Directors, from time to time, as
may be required of him, an account of a his transactions as Treasurer and of the
financial condition of the Corporation. He shall perform all duties incident to
his office or which are property required of him by the Board of Directors.
<PAGE>
6. The RESIDENT AGENT shall be in charge of the Corporation's registered
office in the State of Nevada, upon whom process against the Corporation may be
served and shall perform all duties required of him by statute.
7. The salaries of all offices shall be fixed by the Board of Directors and
may be changed from time to time by a majority vote of the board.
8. Each such officer shall serve for a term of one (1) year or until their
successors are chosen and qualified. Officers may be re-elected or appointed for
successive annual terms.
9. The Board of Directors may appoint such other officers and agents, as it
shall deem necessary or expedient, who shall hold their offices for such terms
and shall exercise such powers and perform such duties as shall be determined
from time to time by the Board of Directors.
ARTICLE V INDEMNIFICATION OF OFFICERS AND DIRECTORS
- --------- -----------------------------------------
1 . The Corporation shall indemnify any and all of its Directors and
Officers, and its former Directors and Officers, or any person who may have
served at the Corporations request as a Director or Officer of another
Corporation in which it owns shares of capital stock or of which it is a
creditor, against expenses actually and necessarily incurred by them connection
with the defense of any action, suit or proceeding in which they, or any of
them, are made parties, or a party, by reason of being or having been
Director(s) or Officer(s) of the Corporation, or of such other Corporation.,
except, in relation to matters as to which any such director or officer or
former Director or Officer or person shall be adjudged in such action, suit or
proceeding to be liable for negligence or misconduct in the performance of duty.
Such indemnification shall not be deemed exclusive of any other rights to which
those indemnified may be entitled, under By-Law, agreement, vote of Stockholders
or otherwise.
<PAGE>
ARTICLE VI AMENDMENTS
- ---------- ----------
1 . Any of these By-Laws may be amended by a majority vote of the
Stockholders at any meeting or at any special meeting called for that purpose.
2. The Board of Directors may amend the By-Laws or adopt additional
By-Laws, but shall not alter or repeal any By-Law adopted by the Stockholders of
the company.
CERTIFIED TO BE THE BY-LAWS OF:
TRADING SOLUTIONS.COM, INC.
BY:/s/ Michael A. Strahl
------------------------
Secretary
HAWKINS ACCOUNTING
CERTIFIED PUBLIC ACCOUNTANT 341 MAIN STREET SALINAS, CA 93901
(831) 759-1694 FAX (831) 759-1699
August 16, 1999
CONSENT OF INDEPENDENT AUDITOR
As the independent auditor for Trading Solutions.Com, Inc., I hereby
consent to the incorporation by reference in this Form SB-2 Statement and any
amendments thereto of my report, relating to the financial statements and
financial statement schedules of Trading Solutions.Com, Inc. for the period
ended June 30, 1999 included on Form SB-2 and amendments. Reports are dated June
30, 1999.
/s/ Hawkins Accounting
----------------------
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> JUN-30-1999
<CASH> 17,381
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 17,381
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 20,820
<CURRENT-LIABILITIES> 5,770
<BONDS> 0
0
0
<COMMON> 26,270
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 20,820
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> (31,476)
<LOSS-PROVISION> (31,490)
<INTEREST-EXPENSE> (14)
<INCOME-PRETAX> 0
<INCOME-TAX> 800
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (32,290)
<EPS-BASIC> 0
<EPS-DILUTED> 0
</TABLE>
INVESTMENT BANKING AGREEMENT
This Agreement is made on the 13th day of May 1999, by and between Internet
Finance.com, Inc. (hereafter referred to as IF.COM) who's offices are located at
380 Foam Street, Suite 210, Monterey, California 93940 and Trading
Solutions.com, Inc. (hereafter referred to as TS.COM) who's address is 380 Foam
Street, Suite 210, Monterey, California 93940.
IF.COM's management and staff have a background in investment banking, corporate
finance, bridge -loans, sales and marketing and is willing to provide services
to TS.COM based on this background. TS.COM desires to have services provided by
IF.COM.
Therefore, the parties agree as follows:
1. DESCRIPTION OF SERVICES. Beginning on the date of this agreement IF.COM will
provide the following services, (collectively the "Services"):
Assist in the formation of the proposed corporation, including assistance
in all state and federal filings as well as all state and federal
filings that might be necessary for the proposed Private Placement
Offering.
Assist in the formulation and production of a business plan which shall
include the development of pro forma statements, break even analysis,
spreadsheets, graphs, charts and cost projections.
Produce an investor presentation package to include tools that range from
presentation folders to the most sophisticated audiovisual and
interactive computer technologies.
Prepare a Private Placement Offering Memorandum (in accordance with federal
exemption from registration in reliance upon the exemption from
registration provided by Section 4(2) of "The Act" and Regulation D
promulgated pursuant to Section 3(b) of "The Act") allowing the
company to raise additional capital (as outlined in Schedule A).
Act in the capacity as TS.COM's "Investment Banker" and assisting in the
placement of the companies securities to raise the money needed for
IF.COM to follow-Ahrough with their business plan.
Give professional advice and assistance in the areas of corporate
structure, corporate finance, management structure, time line
projections, future funding and marketing.
<PAGE>
2. OTHER SERVICES. TS.COM has agreed for IF.COM to buy 1,200,000 shares of
founders stock at $.01 per share. TS.COM has also agreed to repay the bridge
loan within the 6 month time frame of $3,000 + interest due. TS.COM has agreed
to allow IF.COM to name one board member at any time that it may be needed.
TS.COM has agreed to allow IF.COM to receive any options that may be issued to
them.
3. PERFORMANCE OF SERVICES. The manner in which the services are to be performed
and the specific hours to be worked by IF.COM shall be determined by IF.COM.
TS.COM will rely on IFCOM to work as many hours as reasonably necessary to
fulfill IF.COM's obligations under this Agreement.
4. PAYMENT. TS.COM will pay a fee to IFCOM in the amount of $22,000.00
S. FINDERS FEE. Trading Solutions. com, Inc. will pay to Robert A. Strahl a
finders fee of $1,000.00 per month for the first $499,000.00 raised. He will
then be paid $4,000.00 per month, which will be accumulative from the beginning
after raising $500,000.00 or more.
6. EXPENSES. IFCOM shall be entitled to reimbursement from TS.COM for all
reasonable "out-of-pocket" expenses including, but not limited to: travel,
meals, postage, copying and phone.
6. TERM/TERMINATION. This Agreement shall automatically terminate upon
consultant's completion of the services required by this Agreement.
7. RELATIONSHIP OF PARTIES. It is understood by both parties that IF.COM is an
independent contractor with respect to TS.COM and not an employee of TS.COM.
TS.COM will not provide fringe benefits for the benefit of IF.COM This includes
health insurance benefits, paid vacation or any other employee benefit.
S. CONFIDENTIALITY. IFCOM recognizes that has and will have the following
information and or trade secrets including, but not limited to: inventions,
apparatus, future plans, business affairs, process information, customer lists,
product design information and other proprietary information (collectively,'
"Information") which are valuable, special and unique assets of IFCOM agrees
that IF.COM will not at any time or in any manner, either directly or
indirectly, use any information for IFCOM's own benefit or will IRCOM divulge,
disclose or communicate in any manner, any information to any third party
without the prior written consent of TS.COM. IF.COM win protect the Information
and treat it as strictly confidential. A violation of this paragraph shall be a
material violation of this Agreement.
<PAGE>
9. RETURN OF RECORDS. Upon termination of this Agreement, IF.COM shall return
all records, notes, data, memorandum, models and equipment of any nature that
are in IF.COM's possession or under IF.COM's control that are property or relate
to's business.
10. NOTICES. All notices required or permitted under this Agreement shall be in
writing and shall be deemed delivered when delivered in person or deposited in
the United States mail, postage prepaid, and addressed as follows:
Internet Finance.com, Inc.
380 Foam Street, Suite 2 10
Monterey, CA 93940
Trading Solutions.com, Inc.
380 Foam Street, Suite 2 10
Monterey, CA 93940
Such address may be changed from time to time by either party by providing
written notice to the other in the manner set forth above.
11. ENTIRE AGREEMENT. This Agreement contains the entire agreement of both
parties and there are no other promises or conditions in any other agreement
whether oral or written. This Agreement supersedes any prior written or oral
agreements made between the parties.
12. AMENDMENT. This Agreement may be modified or amended if the amendment is
made in writing and is signed by both parties.
13. SEVERABILITY. If any provision of this Agreement shall be held to be invalid
or unenforceable for any reason, the remaining provisions shall continue to be
valid and enforceable. If a court finds that any provision of this Agreement is
invalid or unenforceable but that by limiting such provision it would become
valid and enforceable, then such provision shall be deemed to be written,
construed and enforced as so limited.
14. WAIVER OF CONTRACTUAL RIGHT. The failure of either party to enforce any
provision of this Agreement shall not be construed as a waiver or limitation of
that party's right to subsequently enforce and compel strict compliance with
every provision of this Agreement.
15. APPLICABLE LAW. This Agreement shall be governed by the laws of the State of
California.
TRADING SOLUTIONS.COM, INC.
By:/s/ Natalie Shahvaran
- ------------------------
Natalie Shahvaran, President
INTERNET FINANCE.COM, INC.
By:/s/ Robert A. Strahl
- -----------------------
Robert A. Strahl, President
INVESTMENTLETTER
AND
NMMORANDUM OF SUBSRIPTION/PURCHASE AGREEMENT
May 15, 1999
Trading Solutions.com, Inc.
380 Foam Street, Suite 210
Monterey, Californla 93940
In connection with the acquisition by the undersigned ______ shares of
common stock at $.50 per share of (the "Company"), the undersigned wishes to
advise you of his understanding of, agreement with and/or representation of, the
following:
These securities are not being registered under the Securities Act of 1933,
as amended (the "Act"), on the ground that this sale is exempt from registration
under Section 4(l) or Section 4(2) of the Act and the Rules and Regulations
promulgated thereunder as not involving any public offering. The Company's
reliance on such exemption is predicated in part on the representation of the
undersigned that he, she or it is acquiring such securities for investment for
her own account, with no present intention of dividing her participation with
others or reselling or otherwise distributing the same. These securities which
the undersigned is acquiring are "restricted securities" as that term is defined
in Rule 144 of the General Rules and Regulations under the Act. The undersigned
acknowledges that he, she or it understands that the securities covered hereby
are unregistered and must be held indefinitely, unless they are subsequently
registered under the Act or an exemption from such registration is available.
The undersigned agrees that any and all certificates, which may be issued
representing the securities acquired hereunder, shall contain substantially the
following legend, whidh the undersigned has read and understands:
The shares represented by this certificate have not been registered under
the Securities Act of 1933 (the "Act"), and are "restricted securities" as the
term is defined in Rule 144 under the Act. The share may not be offered for
sale, sold or otherwise transferred except, pursuant to an effective
registration statement under the Act, or pursuant to an exemption from
registration under the Act, the availability of which is to be established to
the satisfaction of the Company.
<PAGE>
May 15,1999
Page Two
The undersigned understands that the above legend on the certificates
would limit their value, including their value as collateral:
The undersigned further acknowledges that he, she or it understands that,
if the securities have been held for a period of at least two years and if Rule
144 adopted under the Act is applicable (there being no representation by the
Company that this rule will be applicable), then he, she or it may make only
routine sales of the securities in limited amounts in a specified manner in
accordance with the terms and conditions of the Rule. The undersigned further
acknowledges that he, she or it understands that, if Rule 144 is applicable (no
assurance of which can be made), he, she or it may sell the securities without
quantity limitation in sales not involving a market maker or through brokerage
transactions only if he, she or it has held the securities for at least three
years. In case the Rule is not applicable, any sales made by the undersigned may
be made only pursuant to other available exemption from registration under the
Act, or an effective registration statement.
The undersigned further acknowledges that he, she or it is aware that
only.the Company can file a registration statement or an offering statement
pursuant to Regulation A under the Act and that the Company has no obligation to
do so or to take steps necessary to make Rule 144 available to them. The
undersigned also has been advised and acknowledges that he, she or it
understands that, in the event Rule 144 is not available, the circumstances
under which he, she or it can sell the securities, absent registration or
compliance with Regulation A, are extremely limited.
The undersigned further acknowl6dges and represents to the Company that he,
she or it is purchasing the securities for her own account and not as a trustee
or nominee for any other person or persons, and that the funds or consideration
invested are her own. The undersigned further acknowledges aRd represents that
there are no existing legal restrictions applicable to her which would preclude
her acquisition of the securities for investment purposes, as described
hereinabove. The undersigned further represents that he, she or it has no
present plans to enter into any contract, undertaking, agreement or arrangement
for resale, distribution, subdivision or fractionalization of the securities
purchased hereby.
The undersigned further acknowledges that he, she or it understands that an
investment in the Company is extremely speculative and subject to a high degree
of risk.
<PAGE>
May 15,1999
Page Three
In this connection, the undersigned understands that he, she or it may lose her
entire investment in the Company.
The undersigned further acknowledges and represents to the Company that he,
she or it is able to bear the economic risk of losing her entire investment. The
undersigned ftirther acknowledges and warrants that her overall commitment to
investments which are not readily marketable is not disproportionate to her net
worth and her investment in the securities will not cause such overall
commitment to become excessive. The undersigned further represents that he, she
or it has adequate means of providing for her current needs and personal
contingencies and that he, she or it has no need for liquidity in connection
with her investment in the securities.
The undersigned further acknowledges that he, she or it fully understands
and agrees that the price of the Company's securities acquired by her was
arbitrarily determined without regard to any value of the securities. The
undersigned understands, additionally, that the price of the securities bears no
relation to the value of the assets or net worth of the Company or any other
criteria of value. The undersigned is aware that no independent evaluation has
been made with respect to the value of the securities. The undersigned further
understands and agrees that share of the preferred stock of the Company have
been or may in the future be issued to certain other persons for a cons.*
deration which may be less than the price paid by them for the securities.
The undersigned further acknowledge and represent to the Company that he,
she or it is knowledgeable and ex erienced in venture capital investments in
general and, in p particular, with respect to investments similar in nature to
an investment in the Company. The frequency of the undersigned's prior
investments in stocks (including restricted stocks), in general, and in
development-stage companies, in particular, and other investments, of whatever
kind, is as follows (check one in each column):
Restricted Development-Stage
Stocks Stocks Companies Other
------ ------ --------- -----
Frequently ______ __________ ________________ _____
Occasionally ______ __________ ________________ _____
Never ______ __________ ________________ _____
The undersigned further acknowledges that he, she or it is capable of
evaluating the merits -and risks of the Company.
<PAGE>
May 15, 1999
Page Four
The undersigned further acknowledges that he, she or it has such knowledge
and experience in financial and business matters that he, she or it is capable
of evaluating the merits and risks of an investment in the Company; that he, she
or it has been advised by the Company to consult with counsel regarding this
investment; and that he, she or it has relied upon the advice of such counsel,
accountants or other consultants as he, she or it deems necessary with regard to
tax aspects, risks and other considerations involved in the investment. The
undersigned's educational and occupational background which renders her capable
of evaluating the merits and risks of this investment is as follows:
_______________________________________________________________
_______________________________________________________________
_______________________________________________________________
The undersigned has made, or caused to be made, such investigation of the
Company, its management and its operations as he, she or it considers necessary
and appropriate to enable her to make an informed decision regarding her
investment.
Prior to making his, her or its investment, the undersigned was presented
with and acted upon the opportunity to ask questions of and receive answers from
the Company and its management relating to the Company and to obtain any
additional information necessary to verify the accuracy of the information made
available to them.
Prior to making his, her or its investment, the undersigned made
arrangements to conduct such inspection as he, she or it deems necessary of the
books, records, contracts, instruments and other data relating to the Company.
Before acquiring these securities, the undersigned was presented with and
understood the Company's business plan,'including, among other things, the
nature of the Company, fmancial reports and management.
The undersigned agrees that, upon the delivery of certificates for his, her
or its shares, the undersigned will execute and deliver to and for the benefit
of the Company any instruments the Company may require to evidence that the
purchase of her shares is for investment purposes only.
<PAGE>
May 15,1999
Page Five
On the date the undersigned acquired the securities, he, she or it had a
net worth (exclusive of home, furnishings and personal automobile) of:
(___) Less than $500,000
(___) $500,000 - $1,000,000
(___) $1,000,000 - $3,000,000
(___) $3,0,00,000 - $5,000,000
(___) More than $5,000,000
Liquid assets constituted the following percentage of the undersigned's net
worth on the date of acquisition of the securities:
(___) Less than 1%
(___) 1%-10%
(___) 10%-20%
(___) 20%-50%
(___) More than 50%
The undersigned's approximate net taxable income (after regular deductions)
in each of the two most recent calendar years was:
(___) Less than $ 100,000
(___) $100,000 - $200,000
(___) $200,000 - $500,000
(___) $500,000 - $1,000,000
(___) More than $1,000,000
Based upon the foregoing, the undersigned hereby acknowledges and
understands that high risk and speculative nature of t1fe share of preferred
stock of the Company which he, s4e or it is acquiring and the nature of the
management, financial condition and all other pertinent factors regarding the
Company and this investment. The undersigned further represents and warrants
that he, she or it is aware that the Company may be considered to be a
"development stage" company and he, she or it has fully satisfied herself with
respect to the nature of this investment. The undersigned further warrants and
represents that he, she or it has received no assurances of any kind relative
to, nor have there been any representations made by the Company or any of its
principals or affiliates regarding any potential appreciation in value of the
securities being acquired by her. The undersigned hereby represents and warrants
that he, she or it has sufficient knowledge and experience in business and
financial matters to evaluate the merits and risks of an investment of this
type. The undersigned further represents and acknowledges
<PAGE>
May 15,1999
Page Six
that he, she or it has made other investments in speculative businesses and is
generally familiar with "restricted" securities and he, she or it is otherwise
knowledgeable with respect to the Company and its proposed operations. Based
upon the foregoing understandings, the undersigned hereby reaff=s his, her or
its acquisition of the securities described in this Investment Letter and
Memorandum of Subscription/Purchase Agreement.
The foregoihg correctly expresses the intent, understanding and
acknowledgements of the undersigned.
________________________________
Signature
Current Address: Current Telephone Number:
_____________________ ____________________________
_____________________
Taxpayer Identification Number: Current Business:
_____________________ ____________________________
____________________________ ____________________________
Name of person connected with Relationship, if any, with the
______________, with whom above mentioned company
conferred concerning this representative:
investment:
____________________________
Length of relationship, if any,
with the above mentioned
company representative
/s/ Natalie Shahvaran
- ---------------------
ACCEPTING OFFICER OF COMPANY
STOCK SUBSCRIPTION
DATED: _______________
SECTION 1. SUBSCRIPTION
The undersigned hereby subscribes to ______ shares of common stock (Shares)
of Trading Solutions, Inc., a Nevada corporation (Corporation) and agrees to
transfer to the Corporation in consideration for the Shares cash in the amount
of $______.
SECTION 2. PAYMENT OF CONSIDERATION
The consideration for the Shares shall be paid to the Corporation upon the
acceptance of this subscription and a call for payment of consideration. After
payment of the consideration, a certificate for the Shares shall be issued to
the undersigned as fully paid and nonassessable.
_____________________________
[Signature]
The foregoing Stock Subscription is hereby accepted by Trading Solutions,
Inc.
DATED:___________________
_________________________________
[Signature]
Title: ____________________________
