FORM 10-QSB
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarter ended: September 30, 2000
Commission file number: 333-36522
Wholesale On The Net, Inc.
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(exact name of registrant as specified in its charter)
Nevada 75-2853946
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(State of Incorporation) (IRS ID No.)
1529 East Interstate 30, Suite 104, Garland, Texas 75043
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(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code: 972-303-0405
Check whether the registrant filed all documents and reports required to be
filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of
securities under a plan confirmed by a court. Yes [x ] No [ ].
Shares of common stock outstanding at September 30, 2000:
1,000,000
<PAGE>
TABLE OF CONTENTS
PART I - FINANCIAL INFORMATION Page Number
Item 1. Financial Statements 1 - 6
Item 2. Managements's Discussion and Analysis
of Financial Condition and Results of Operations 7
PART II - OTHER INFORMATION 8
<PAGE>
<TABLE>
<CAPTION>
WHOLESALE ON THE NET, INC.
(a Development Stage Company)
BALANCE SHEETS
September 30, 2000 and June 30, 2000
ASSETS
Sept 30, 2000 June 30, 2000
------------------ ------------------
<S> <C> <C>
CURRENT ASSETS:
Cash $651 $853
PROPERTY AND EQUIPMENT:
Equipment (net of accumulated depreciation of $15) 235 244
Website (net of accumulated amortization of $5,555) 14,445 16,111
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TOTAL ASSETS $15,331 $17,208
================== ==================
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Advances from officer $1,518 $1,518
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TOTAL CURRENT LIABILITIES 1,518 1,518
STOCKHOLDERS' EQUITY
Common stock, $0.001 par value 1,000 1,000
Additional paid-in-capital 24,000 23,400
Accumulated Deficit (11,187) (8,710)
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Total Stockholders' Equity 13,813 15,690
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $15,331 $17,208
================== ==================
</TABLE>
See accompanying notes 1
<PAGE>
<TABLE>
<CAPTION>
WHOLESALE ON THE NET, INC.
(a Development Stage Company)
STATEMENT OF OPERATIONS
Three months ended September 30, 2000 and 1999, and
Period from Inception (June 30, 1999) to September 30, 1999
Period from
Inception
Three months Three months (June 30, 1999)
ended ended to
Sept 30, 2000 Sept 30, 1999 Sept 30, 2000
------------------------------------ ------------------
<S> <C> <C> <C>
REVENUE:
Sales 0 0 $3,799
------------------------------------ ------------------
Total revenue $0 $0 $3,799
COST OF SALES: 0 0 2,938
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GROSS PROFIT 0 0 861
OPERATING EXPENSE:
Depreciation and amortization 1,676 0 5,571
Rent - related party 600 600 3,000
Consulting - related party 1,500 1,500
General and administrative 205 393 1,994
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Total Operating Expense 2,481 2,493 12,065
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INCOME FROM OPERATIONS (2,481) (2,493) (11,204)
OTHER INCOME:
Interest income 4 17
------------------------------------ ------------------
NET LOSS ($2,477) ($2,493) ($11,187)
==================================== ==================
Weighted average shares outstanding 1,000,000 1,000,000 1,000,000
==================================== ==================
LOSS PER SHARE ($0.00) ($0.00) ($0.00)
==================================== ==================
</TABLE>
See accompanying notes 2
<PAGE>
<TABLE>
<CAPTION>
WHOLESALE ON THE NET, INC.
(a Development Stage Company)
STATEMENT OF STOCKHOLDERS' EQUITY AND ACCUMULATED DEFICIT
Period from Inception(June 30, 1999) to September 30, 2000
Common Paid In Accumulated
Shares Amount Capital Deficit Total
------------------------------------------------------------------------ ------------------
<S> <C> <C> <C> <C> <C>
Balance,
June 30, 1999
(date of inception) -0- -0- -0- -0- -0-
Shares issued on July 1, 1999 for:
Cash 150,000 150 350 500
Services 450,000 450 1,050 1,500
August 27, 1999 for:
Cash 400,000 400 19,600 20,000
Paid in capital by officer (rent) 2,400 2,400
Net Loss (8,710) (8,710)
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Balance
June 30, 2000 1,000,000 $1,000 $23,400 ($8,710) $15,690
======================================================================== ==================
Paid in capital by officer (rent) 600 600
Net Loss (2,477) (2,477)
------------------------------------------------------------------------ ------------------
Balance
June 30, 2000 1,000,000 1,000 24,000 (11,187) 13,813
======================================================================== ==================
</TABLE>
See accompanying notes 3
<PAGE>
<TABLE>
<CAPTION>
WHOLESALE ON THE NET, INC.
(a Development Stage Company)
STATEMENT OF CASH FLOWS
Three months ended September 30, 2000 and 1999, and
Period from Inception (June 30, 1999) to September 30, 2000
Period from
Inception
Three months Three months (June 30, 1999)
ended ended to
Sept 30, 2000 Sept 30, 1999 Sept 30, 2000
------------------------------------ ------------------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss ($2,477) ($2,493) ($11,187)
Adjustments to reconcile net loss to net
cash (used) by operating activities:
Items not requiring cash - depreciation 1,676 5,570
Items not requiring cash - stock issued for services 1,500 1,500
Increase in current liabilities 70 1,518
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NET CASH (USED) BY OPERATING ACTIVITIES: (801) (923) (2,599)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of assets (20,000) (20,250)
CASH FLOWS FROM FINANCING ACTIVITIES:
Sale of common stock 20,500 20,500
Paid in capital by officer 600 600 3,000
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Total cash flows from financing activities 600 21,100 23,500
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NET INCREASE IN CASH ($201) $177 $651
CASH, BEGINNING OF PERIOD 852 0 0
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CASH, END OF PERIOD $651 $177 $651
==================================== ==================
</TABLE>
See accompanying notes 4
<PAGE>
WHOLESALE ON THE NET, INC.
NOTES TO FINANCIAL STATEMENTS
September 30, 2000
Note A - Nature of Business and Summary of Significant Accounting Policies:
---------------------------------------------------------------------------
History:
-------
The Company was organized June 30, 1999 under the name of Wholesale On The Net,
Inc. in the State of Nevada. The Company's business plan outlines its plan of
operations which is to sell products over the internet.
Basis of Accounting:
--------------------
It is the Company's policy to prepare its financial statements on the accrual
basis of accounting in conformity with generally accepted accounting principles.
Sales are recorded as income in the period in which they are earned and expenses
are recognized in the period in which the related liability is incurred.
Revenue Recognition:
--------------------
Revenue is recognized when goods are shipped and invoiced. The Company will
purchase goods and resell them; on these items revenue is booked at the full
sales price and the respective cost of sales recorded. On items that are drop
shipped by a manufacturer directly to a customer, the sale price less the cost
of the item is recorded as income.
Cash and Cash Equivalents:
--------------------------
For purposes of the statement of cash flows, the Company considers all highly
liquid debt instruments with a maturity of three months or less to be cash
equivalents.
Loss per Common Share:
----------------------
Loss applicable to common share is based on the weighted average number of
shares of common stock outstanding during the year.
Accounting Estimates:
---------------------
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make certain estimates and
assumptions that affect the amount reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.
Income Tax:
-----------
The Company is subject to the greater of federal income taxes computed under the
regular system or the alternative minimum tax (ATM) system. The Company uses an
asset and liability approach for the accounting and financial reporting of
income tax. Under this method, deferred tax assets and liabilities are
determined based on temporary differences between the financial carrying amounts
and the tax bases of assets and liabilities using enacted tax rates in effect in
the years in which the temporary differences are expected to reverse.
5
<PAGE>
WHOLESALE ON THE NET, INC.
NOTES TO FINANCIAL STATEMENTS
September 30, 2000
Note B - Web site:
------------------
The Company's primary asset is its web site which is the center of its
operational and income generating activities for which it paid $20,000. The cost
of the web site is being amortized over three years starting in December 1999
when it was completed.
Note C - Advances from officer:
-------------------------------
During the period from inception ( June 30, 1999) through September 30, 2000,
the President paid expenses ($1027 for product, $70 for domain registration,
$331 for shipping and $90 for office supplies) on behalf of the Company for
which he has not been repaid. The Company does not owe interest on these
advances, and the advances are to be repaid when the Company makes a profit from
operations. These amounts have been recorded as a current liability.
Note D - Stockholders' Equity:
------------------------------
Common Stock:
-------------
The Company is authorized to issue 25,000,000 common shares of stock at a par
value of $0.001 per share. These shares have full voting rights. At September
30, 2000 and June 30, 2000, there were 1,000,000 shares respectively.
The Company has not paid a dividend to its shareholders.
Note E - Income Taxes:
----------------------
The Company had a net operating loss of $11,187 for the period since inception.
No deferred tax asset has been recognized for the operating loss as any
valuation allowance would reduce the benefit to zero.
Note F - Going Concern:
-----------------------
The Company has minimal capital resources available to meet obligations expected
to be incurred given that it is a start up enterprise. Accordingly, the
Company's continued existence is dependent upon the successful operation of the
Company's plan of operations, selling common stock in the Company, or obtaining
financing. Unless these conditions among others are met, the Company may be
unable to continue as a going concern.
6
<PAGE>
Item 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS.
Results of Operations
The Registrant filed a registration statement on Form SB-1 with the Securities
and Exchange Commission to raise a minimum of $50,000 and a maximum of
$1,000,000 which became effective on September 20, 2000. The Registrant has
raised funds under that registration statement and as of September 30, 2000 had
not raised the minimum amount. On October 27, 2000, the Registrant broke escrow
by raising $53,200 by selling 212,800 shares at $0.25 per share. Under this
offering, the Registrant was authorized to sell a minimum of 200,000 shares and
a maximum of 4,000,000 shares at $0.25 per share.
As of the date of this filing, the Registrant is still soliciting funds under
its offering.
The Registrant is engaged in the sale of products over the internet. At this
time, art and water filters are sold.
Liquidity
The Registrant has liquid assets of $853 and total current assets of $853. This
amount does not include any funds raised in the offering described above since
the Registrant had not broken escrow and raised the minimum amount by September
30, 2000.
The Registrant has minimal expenses and no commitments.
Capital Resources
The Registrant's capital resources have been generated from the minimal sale of
products through its web site and since October 27, 2000, has capital resources
from the sale of stock under its registration statement that became effective
September 20, 2000.
There were no plans or requirements for purchase of capital items during the
quarter for company purposes. The Registrant does not foresee any material
capital purchase in the coming twelve months.
Subsequent events
The Registrant raised the minimum offering on October 27, 2000 under its SB-1
registration statement filed with the U.S. Securities and Exchange Commission.
The Registrant continues to raise funds under this offering.
7
<PAGE>
PART II. OTHER INFORMATION
Item 1. Legal Proceedings.
The Company is not involved in any legal proceedings.
Item 2. Changes in Securities.
Registrant has made no changes in its securities.
Item 3. Defaults Upon Senior Securities.
Registrant has no senior securities and accordingly no
defaults.
Item 4. Submission of Matters to a Vote of Security Holders.
Registrant submitted no matters to a vote of security holders.
Item 5. Other Information.
None.
Item 6. Exhibits and Reports on Form 8-K.
None.
8
<PAGE>
Pursuant to the requirements 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.
Wholesale On The Net, Inc.
----------------------------
(Registrant)
BY: /s/ Thomas Bieger
-----------------------
Thomas Bieger
Its: President and Secretary
DATE: November 12, 2000
Garland, Texas
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