UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
X QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For quarterly period ended June 30, 2000
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from March 31, 2000 to June 30, 2000.
Commission file number -001-14889
TRADING SOLUTIONS.COM, INC.
---------------------------
(Exact name of registrant as specified in its charter)
Nevada 88-0425691
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(State or other jurisdiction (IRS Employer Identification No.)
of incorporation or organization)
200 Camino Aguajito, #200 Monterey, California 93940
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (831) 375-6229
Indicate by check mark whether the registrant: (1) has filed all reports
required by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing for the
past 90 days. __X__Yes No
The number of shares of the Registrant's Common Stock, $.001 par value, as of
June 30, 2000 was 2,795,000 outstanding.
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
HAWKINS ACCOUTNING
CERTIFIED PUBLIC ACCOUNTANT 341 MAIN STREET SALINAS, CA 93901
(831) 759-2480 FAX (831) 759-2482
To the Board of Directors
Trading Solutions.Com, Incorporated
Monterey, California
I have reviewed the accompanying balance sheet of Trading Solutions.Com, Inc (A
Development Stage Company) as of June 30, 2000 and the related statement of
income and Shareholders' Equity and the statement of cash flows for the three
months endfed, in accordance with Statements on Standards for Accounting and
Review Services issued by theAmerican Institute of Certified Public Accountants.
All information included in these fiancial statements is the representaiton of
the management of Trading Solution.Com, Inc.
A review consists principally of inquiries of company personnel and analytical
procedures applied to financial data. It is substantially less in scope than an
audit in accordance with generally accepted auditing standards, the objective of
which is the expression of an opinion regarding the financial statements taken
as a whole. Accordingly, I do not express such as opinion.
Based on my review, I am not aware of any material modifications that should be
made to the accompanying financial statements in order for them to be in
conformity with the generally accepted accounting principles.
The financial statements for the period ending June 30, 1999 were audited by me,
and I expressed an unqualified opinion except as referred to in note 8 in which
I raised the going concern principle.
/s/ Hawkins Accounting
----------------------
August 11, 2000
<PAGE>
TRADING SOLUTIONS,COM, INCORPORATED
(A Development Stage Company)
BALANCE SHEET
June 30, 2000 and 1999
See accountant's report
<TABLE>
<CAPTION>
2000 1999
---- ----
<S> <C> <C>
ASSETS
Current assets
Cash in bank $ 27,893 $ 17, 381
Other receivable 1,095
Prepaid rent 677
Total current assets 29,588 18,058
Furniture and cquiptnent
Equipment 2,206 2,206
Furniture 600 600
2,806 2,806
Accumulated depreciation (326) (44)
2,480 2,762
Total assets $ 32,068 $ 20,820
LIABILITIES AND STOCKHOLDER'S EQUITY
Current liabilities
Accounts payable 7,371 $ 5,770
State corporate tax liability 0 800
Total current liabilities 7,371 6,570
Total liabilities 7,371 6,570
Stockholders' equity
Common stock, 20,000,000 shares authorized at
a par value of.01. 2,795,000 outstanding 27,950 26,270
Paid in capital 142,040 54,270
Deficit incurred durinb development stage (145,293) (66,290)
Total stockholder's ctluity 24,697 14,250
Total liabilities and stockholder's equity $ 32,068 $ 20,820
</TABLE>
<PAGE>
TRADING SOLUTIONS.COM, INCORPORATED
(A Development Stage Company)
STATEMENT OF OPERATIONS
For the three months ended June 30, 2000 and
from date of inception to June 30, 1999
See accountant's report Deficit
<TABLE>
<CAPTION>
Accumulated
During
Three months ended Development
2000 1999 Stage
---- ---- -----
<S> <C> <C> <C>
Income $ 3,180 $ 0 $ 5,100
Expenses
Advertising, 5,605 0 10,185
Accounting fccs 7,000 3,000 13,000
Bank charges 90 60 194
Compensation expense 34,000 34,000
C011sulLing foes 900 9,150 42,007
Depreciation 150 44 326
Education 1,995
Management fees 5,000 5,000
Miscellaneous 25 554 7,909
Office supplies 337 833 4,871
Postage 194 66 283
Taxes and licenses 180 1,945
Promotions 271 514
Legal Ices 643 10,100 13,249
Organiational costs 896 896
Rent 900 600 4,066
Telephone 921 268 3,523
Travel 2,664 634 6,416
Total expenses 19,609 65,476 150,379
Loss from operations prior to
other expenses and taxes (16,429) (65,476) (145,279)
Other (expenses)
Interest 0 (14) (14)
Net loss $ (16,429) $ (65,490) $ (145,293)
Loss per common
share $ ($0.01) $ (0.02) $ ($0.02)
Weighted average of
shares outstanding 2,771,667 2,587,302 2,587,302
</TABLE>
The accompanying notes are an integral part of these financial statements
<PAGE>
TRADING SOLUTIONS.COM, INCORPORATED
(A Development Stage Company)
STATEMENT OF STOCKHOLDER'S EQUITY
June 30, 2000
See accountant's report Deficit
<TABLE>
<CAPTION>
Accutnulated
Paid During
Common Stock In Development
Shares Amount Capital Stage Total
------ ------ ------- ----- -----
<S> <C> <C> <C> <C> <C>
Founders stock 2,760,000 $ 27,600 $ 107,390 $ (128,864) $ 6,126
June 26, 2000 35,000 350 34,650 35,000
Net loss (16,429) (16,429)
Total 2,795,000 $ 27,950 $ 142,040 $ (145,293) $ 24,697
</TABLE>
The accompanying notes are an integral part of these financial statements
<PAGE>
TRADING SOLUTIONS.COM, INCORPORATED
(A Development Stage Company)
STATEMENT OF CASH FLOWS-INDIRECT METHOD
For the three months ended June 30, 2000 and
from date of inception to June 30, 1999
See accountant's report
<TABLE>
<CAPTION>
Deficit
Accumulated During
Three months ended Development
2000 1999 Stage
---- ---- -----
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net income $ (16,429) $ (66,290) $ (145,293)
Adjustment toy reconcile net income
to net provided by operating activities
Depreciation 150 44 326
Compensation expense 34,000 34,000
Increase in prepaid react (678)
Increase in other receivables (1,519) (1,695)
Increase in accounts payable 6,000 5,770 7,371
Increase in taxes payable 800 0
NET CASH PROVIDED BY
OPERATING ACTIVITIES (11,798) (26,354) (105,291)
INVESTING ACTVITIES
Purcbase of furniture and equipment 2,806 2,806
NFT CASH USED IN
INVESTING ACTIVITIES 0 2,806 2,806
FINANCINCG ACTIVTTIES
Sale of common stock 35,000 46,540 135,990
Short torn borrowing 3,000 3,000
Payment, of sbort tern borrowing (3,000) (3,000)
NET CASH REALIZED FROM
FINANCING ACTIVITIES 35,000 46,540 135,990
INCREASE IN CASH AND
CASH EQUIVALENTS 23,202 17,380 27,893
Cash and cash equivalents at the beginning
of the year 4,691 0 0
CASH AND CASH EQUIVALENTS $ 27,893 17,380 $ 27,893
Supplemental disclosure of financing 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
<PAGE>
Trading Solutions.Com, Incorporated
Notes to financial Statements
June 30, 2000 and 1999
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Nature of the business - Trading, Solutions.Com, Inc (the "Company) is
designed to provide education for people interested in on line investing'.
The Company also intends to establish a corporate trading account and
manage money. The Company further intends to establish or acquire an
ecommerce business to link with the trading school.
Development State Company - The Company is a devclopnnent stage company, as
defined 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, an immaterial amount of revenue has 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 continent assets and
liabilities at the date of the financial statements and the reported
amounts of revenues and expenses during the reporting period. Actual
results could differ from these estimates.
Cash and cash equivalents - For financial statement presentation purposes,
the Company considers all short term investments with a maturity date of
three months ox less to be cash equivalents.
Property and equipment - Property and equipment are; recorded at cost.
Maintenance and repairs are expensed as incurred; major renewals and
betterments are capitalized. When items of property or equipment are sold
or retired, the related costs and accumulated depreciation are removed from
the accounts and any gain or loss is included in income.
Depreciation is provided using the straight-line method, over the useful
lives oCthe 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 anal income tax reporting. The deferred tax assets and
liabilities rci)rescnt the fixture tax return consequences of those
differences, which will either be taxable or deductible when the assets and
liabilities are
<PAGE>
Trading Solutions.Com, Incorporated
Notes to Financial Statements
June 30, 2000 and 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-Stock that is issued for services rendered are recorded at
the fair value of the stock in the year that the stock is given and
recorded as an expense in the same year.
NOTE 2: BACKGROUND
The Company was incorporated under the laws of the State of Nevada on May
14,1999.The principal activities of the Company, from the beginning of fe
development stage, have been organizational matters acid 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, 2000.
<TABLE>
<CAPTION>
Useful life
Years Amount
----- ------
<S> <C> <C>
Computer equipment 5 $ 2,206
Office furniture 10 600
Total 2,806
Accumulated depreciation (326)
Net equipment and furniture $ 2,480
</TABLE>
Depreciation expense for the three months ended June 30, 2000 was $150 and
1999 the expense was $44.
NOTE 4: COMMON STOCK
Founders stock - At incorporation the Company issued stock to the founders
of the corporation. These shares totaled 2,495,000 shares and were issued
liar consideration of $.001 per share. Procecds from these sales were
$2,495.
<PAGE>
Trading Solutions.Com, Incorporated
Notes to Financial Statements
June 30, 2000 and 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 conumon stock to
certain officers of the corporation, a key employee of a non affiliated
company and the non affiliated company. These options arc 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. Total proceeds from
these sales were $5,500. The fair market value at the date the options were
granted was $.50 a share. Therefore, the; Company has recognized $ 34,000
in compensation expense for the period.
Public stock offering- During the period ended June 30, 1999 the Company
sold solely to accredited and/or sopWsticated investors its common stock.
Each share .bad 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 .rune 30, 1999 were $38,500.
Initial Public Offering - During the three-month period ended June 30,
20()0, the Company initiated a public stock offering of three hundred
thousand of its common shares. As of June 30, 2000 $35,000.00 had been
raised.
NOTE 5: INCOME TAXES
The benefit for income taxes from operations consisted of the following
components: current tax benefit of $21,794 resulting from a net loss before
incorrie taxes, and a deferred tax expense of $21,794 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 he
realised. At that time, the allowance will either be increased car reduced;
reduction would result. in the complete elimination of- the allowance if
positive evidence indicates that the value of the de;Ccrrcd tax asset is no
longer required.
<PAGE>
Trading Solutions.Com, Incorporated
Notes to Financial Statements
June 30, 2000 and 1999
NOTE 6: RELATED PARTY TRANSACTIONS
The Company entered into an agreement with one of its shareholders to
provide assistance to the Company in the fon-nation 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 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. There were no amounts paid to this shareholder
for the period ended June 30, 2000.
The Company also entered into an agreement with another shareholder to
provide consulting services to the Company. This agreement totals $30,000
of which $6,000 was paid as of June 30, 1999. No consulting fees fox the
period ending June 30, 2000 were paid.
There is an agreement with one of the founders to provide support services
to the Company. This agreement has a maximum of $10,000. The total amount
paid, as of June 30, 1999 was $3,050. At June 30, 2000 a total of $900 was
paid.
NOTE 7: MATERIAL ADJUSTMENTS
Management has made all material adjustments to the financial statements to
be conformity with generally accepted accounting principles.
NOTE 8: GOING CONCERN
From the date of inception the Company has yet to commence receiving a
material amount of revenue and has net losses from operating activities
which raise substantial doubt about its ability to continue as a going
concern.
Management will work to establish a local market niche for each one of its
trading schools by advertising in local newspapers and radio. This is
intended to create public awareness of the Company'; name arid its
.services.
Management also intends to affiliate with professional traders to tcach
online classes and seminars in real-time broadcasting. The Compaai.y also
intends to continually invest in its web site infrastructure; as needed
for
<PAGE>
Trading Solutions.Com, Incorporated
Notes to Financial Statements
June 30, 2000 and 1999
NOTE 8: GOING CONCERN (con't)
upgrades, incorporation of new features and keeping up with the changing
internet technology. The Company will establish an on line store that will
offer literature such as books, newspapers arid 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 concem is dependent upon. a
successful public offering and ultimately achieving profitable operations.
There is no assurance that the Company will be successful in its efforts to
raise additional proceeds or achieve profitable operations. The financial
statements do not include any adjustments that might result from the
outcome of this uncertainty.
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations.
During the first quarter, net sales for the first three months that ended
June 30, 2000 were $3,180, which represents an increase of 100% from the
corresponding period of the prior year.
The company is in the process of introducing its services to the local
community at its first location in Monterey, CA.
The company will continue providing its services through its trading
school, and will begin the process of developing its web based operations when
funding is available.
Loss from operations prior to other expenses and taxes for the first
quarter amounted to $16,429, compared to $65,476 for the corresponding period in
1999. The increase in the gross margin from the corresponding period of the
prior year is principally attributable to the company's marketing efforts.
Advertisement, general and administrative expenses were $19,609 for the
first quarter, compared to $65,476 for the corresponding period in 1999. These
expenses increased due to the company rapid development.
The company is in the process of completing an SB-2 filing with the SEC,
proposing to sell 300,000 shares of common stock at $1.00. The Form SB-2 was
deemed effective on April 14, 2000. As of June 30, 2000, 35,000 shares have been
sold and $35,000 received. The sale of these securities will provide a working
capital to expand the Company's business and pay legal and accounting fees 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. If less than the entire offering is received, funds will be
applied according to the priorities outlined above. For example, if $75,000 is
received, $20,000 will be used to pay legal and accounting fees, $30,000 will be
used to develop and maintain the website and the remaining $25,000 will be spent
on advertising when the website becomes operational. The Company plans on
meeting its obligations from future revenue and from the proceeds of the
offering. If no proceeds are received, the Company will not incur any additional
legal and accounting expenses. There is no research and development underway or
planned at this time.
There were no changes in the mix of sources between equity, debt and
off-balance sheet financing arrangements.
The company is in the process of adding new services, locations, and
product lines and revamping its marketing efforts. The company would also
consider a joint venture with another company on co-brand with other companies.
The company anticipates that its marketing and operating costs will
increase because of changes to its marketing and business development. There
have been no material increases in net sales or revenue.
The company has been a development stage company for the past year and
therefore has not felt the effect of inflation. The Company provides services
and fells inflationary pressure is minimal.
Item 3. Liquidity and Capital Resources.
As of June 30, 2000, the company had a cash equivalence of $29,588. The
capital resource available would come from the company's proposed sale of
securities.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
There has been no legal proceedings during the period ended June 30, 2000.
Item 2. Changes in Securities.
On August 26, 1999, the Company filed a registration statement on Form SB-2
to register for sale 300,000 shars of common stock for $1.00 per share. The
registration was effective April 14, 2000. As of June 30, 2000, 35,000 shares
have been sold and $35,000 in proceeds have been received. The funds have been
used to cover the Company's legal and accounting expenses, as well as on its
website development.
Item 3. Defaults Upon Senior Securities.
There has been no material default in the payment of principal, interest, a
sinking or purchase fund installment, or any other material default not cured
within 30 days. There has been no other material delinquency that has occurred
within 30 days.
Item 4. Submission of Matters to a Vote of Security Holders.
No matter has been submitted to a vote of shareholders.
Item 5. Other Information.
Reporting Persons, as that term is defined in the Securities Exchange Act
of 1934 have not filed the appropriate forms with the commission.
Item 6. Exhibits and Reports on Form 8-K
There are no exhibits attached and no Form 8K notices have been filed for
the quarter ending June 30, 2000.
Signature Page
Pursuant to the requirements of section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
TRADING SOLUTIONS.COM, INC.
/S/ Natalie Shahvaran
---------------------
Natalie Shahvaran
President
Dated: August 18, 2000
