UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K/A
AMENDMENT #1
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13
OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended November 30, 2008
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13
OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________ to ______________
Commission File Number 333-133347
ONLINE ORIGINALS, INC.
(Exact name of registrant as specified in its charter)
Nevada 98-0479983
- ------------------------------- ------------------------------
State or other jurisdiction of (I.R.S. Employer
incorporation or organization Identification No.)
57113 -2020 Sherwood Drive, Sherwood Park, Albert T8A 3H9
---------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (780) 668-7422
Securities registered under Section 12(b) Name of each exchange on
of the Exchange Act: which registered
Title of each class None
None
Securities registered under Section 12(g) of the Exchange Act:
Common Stock, $0.001 Par Value
(Title of class)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. [_] Yes [X] No
Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B is not contained in this form, and no disclosure will be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-K
or any amendment to this Form 10-K. [X]
Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act). Yes [_] No [X]
The Company recognized net revenues of $2,800 for its most recent fiscal year
Aggregate market value of the voting common equity held by non-affiliates
computed by reference to the price at which the common equity was sold as of
November 30, 2008: $70,000
Number of common voting shares outstanding as of November 30, 2008: 3,200,000
Transitional Small Business Disclosure Format: Yes [_] No [X]
1
DOCUMENTS INCORPORATED BY REFERENCE - Form 10-QSB filed on October 10,
2008, our Form 10-QSB filed on July 14, 2008, our Form 10-QSB filed on April 14,
2008 and as described in this Form 10-K annual report.
2
This 10-K is being amended to amend Exhibit 31.1 and 31.2 to comply with Item
601(b)(31) of Regulation S-K. No other revisions/changes have been made.
TABLE OF CONTENTS
Page
PART I
Item 1. Description of Business 4
Item 2. Description of Property 6
Item 3. Legal Proceedings 7
Item 4. Submission of Matters to a Vote of Security Holders 7
PART II
Item 5. Market For Common Equity and Related Stockholder Matters 7
Item 6. Management's Discussion and Analysis or Plan of Operation 9
Item 7. Financial Statements 12
Item 8. Changes in and Disagreements With Accountants on Accounting and
Financial Disclosure 24
Item 8A. Controls and Procedures 24
Item 8A(T). Controls and Procedures 24
Item 8B. Other Information 25
PART III
Item 9. Directors, Executive Officers, Promoters and Control Persons;
Compliance With Section 16(a) of the Exchange Act 25
Item 10. Executive Compensation 27
Item 11. Security Ownership of Certain Beneficial Owners and Management and
Related Stockholder Matters 27
Item 12. Certain Relationships and Related Transactions and Director
Independence 28
Item 13. Exhibits 28
Item 14. Principal Accountant Fees and Services 28
Signatures 30
3
FORWARD-LOOKING STATEMENTS
In addition to historical information, some of the information presented in
this Annual Report on Form 10-K contains "forward-looking statements" within the
meaning of the Private Securities Litigation Reform Act of 1995 (the "Reform
Act"). Although Online Originals, Inc. ("Online" or the "Company," which may
also be referred to as "we," "us" or "our") believes that its expectations are
based on reasonable assumptions within the bounds of its knowledge of its
business and operations: there can be no assurance that actual results will not
differ materially from our expectations. Such forward-looking statements are
subject to risks and uncertainties that could cause actual results to differ
materially from those anticipated, including but not limited to, our ability to
reach satisfactorily negotiated settlements with our outstanding creditors,
achieve a listing on the over the counter bulletin board, raise debt and/or
equity to fund negotiated settlements with our creditors and to meet our ongoing
operating expenses and merge with another entity with experienced management and
opportunities for growth in return for shares of our common stock to create
value for our shareholders. You are urged to carefully consider these factors,
as well as other information contained in this Annual Report on Form 10-K and in
our other periodic reports and documents filed with the SEC.
PART I
ITEM 1. DESCRIPTION OF BUSINESS.
Business Development
We incorporated as Online Originals, Inc. (hereinafter referred to as Online) on
November 18th, 2005 in the State of Nevada. Our principal executive offices are
located at 57113 -2020 Sherwood Drive, Sherwood Park, Alberta T8A 3H9. Telephone
number is (780) 668-7422. Our fiscal year end is November 30th.
Business of Issuer
We are developing an online art gallery/auction house that allows members and
customers to bid on and purchase pieces of art. The website will showcase
varieties of art ranging from paintings, drawings, prints, and sculptures. We
maintain our website at www.artbyonlineoriginals.com, which is not incorporated
in and is not a part of this report. Inventory pieces will be purchased at
wholesale prices in lots, to be sold at retail prices. Eventually the available
artwork will include paintings, drawings, prints, and sculptures from artists,
art owners and members of the site. Members of the site and one-time users will
offer art pieces for sale and we will facilitate the sale of these pieces. Fees
and commissions will be charged for the services we provide.
Our target clientele is the artistic community and those who enjoy purchasing,
learning, and discussing art. We are focusing on buyers and art collectors who
are using the internet to find what they are looking for. Members will be able
to enter the website, log into their account and see pieces that will be
featured for the week.
As we develop, we anticipate that we will have a dialogue on the pieces giving
the history and description which will act as an educational tool and encourage
individuals to visit the site frequently. Featured artists, periods of time, and
styles are planned to be part of these weekly features. We believe that having
these aspects on the site will boost participation and facilitate community.
As we continue to develop our site, we will also include a member's only area
where individuals will have access to educational material, special sales, and
useful information about what is happening in the art community. Members will
have the ability to interact with other members and sellers, giving a community
feel to the website. Monthly membership fees will be charged.
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Principal Products and Services
Currently, our available art are pieces from artists, art owners, and members of
the site, as well as one-time users looking to sell a single piece through our
gallery/auction website.
As we continue to develop, we will showcase original pieces of art from unknown
artists in the industry as well as established artists. Prints will also be
available for individuals looking for a piece that can otherwise only be found
in a gallery. We will continually add to our collection of art pieces, following
the demand of the members and listening to what they are looking for.
The Market
Our primary target market is North America, but we will be pleased to provide
service to members and clients around the world. The key demographic that we are
targeting will be art purchasers and art enthusiasts - individuals of all ages,
races and social structures. Internet marketing will be used as the primary
source to bring traffic to the website. We plan to offer programs for businesses
whereby advertising is based on a pay per click format rather than a weekly or
monthly bases. Print and direct mail make up the other area of marketing and
promotions.
Competition and Competitive Strategy
There are a number of social networking internet sites as well as auction sites,
but few, we believe, that are focused on the creative artist market. We intend
to be differentiated from the other websites by offering services specifically
to art purchasers and art enthusiasts. Members will be able to narrow their
searches by artist, style and/or year. Our competitive advantage will be gained
by providing a high service level and accommodating the wishes of the members
and guests to out website.
In addition, there are various shops and stores that sell art. Our strategy is
to make it as easy as possible for consumers to purchase art pieces without
having to leave the comfort of their home. Rather than spend time going to
different shops in search of a specific item, our members will have the ability
to view thousands of available art pieces from their home computer.
Distribution
As a start-up company, our competitive position within the industry is poor. The
challenge before us is to build our business and establish it as a viable going
concern.
At this time, our focus is internet marketing through our website. When we have
available cash from sales revenue, we will focus on alternate forms of
marketing. They may include several key forms of internet advertising such as
pay-per click and cross promotions with other websites who are targeting the
same demographic groups. We believe these forms of advertising are much more
specific and cost effective than a newspaper ad or other forms of advertising.
By having a strong presence on the Internet, our marketing costs will remain low
and cross promotions will allow our name and services to reach a wide audience.
We also plan to participate in special interest mailing lists to gain visibility
among targeted audiences as well as generate traffic for the website. Special
interest mailing lists are not direct lists, but instead are similar to email
newsletters or on-going dialogues dedicated to special interests. We plan to
send E-mail messages to specific mailing lists targeting the individuals
currently viewing art and showing a visible interest in art.
We plan to participate in industry related newsgroups to gain visibility and
develop relationships with targeted markets.
Finally, we will seek to create a media presence and work towards establishing a
name for itself in the artistic community. Print and direct mail of marketing
and promotions and will be placed in art magazines, art stores, and art
galleries and theaters.
Sources and Availability of Products and Supplies
We believe that we will have unlimited sources and availability of products and
supplies. Our inventory will come from creative artists. These individuals will
5
supply original art. We intend to showcase the works of art on the website for
sale to other artists and buyers and will offer advertising/promotional services
for new works being introduced.
Dependence on One or a Few Major Customers
We are not dependant on one or a few major customers because our website will
target all art purchasers and art enthusiasts who have access to the internet.
Patent, Trademark, License & Franchise Restrictions and Contractual Obligations
& Concessions
There are no inherent factors or circumstances associated with this industry, or
any of the products or services that we plan to provide that would give cause
for any patent, trademark or license infringements or violations. We have not
entered into any franchise agreements or other contracts that have given, or
could give rise to obligations or concessions. This is original art and we will
recognize the artists and copy rites if and when they are necessary.
Governmental Controls and Approvals
In regards to both the retail and the customer service aspects of our business,
the major area for government control or need for government approval would be
local business licensing. All of the products being offered for sale will be
purchased from reputable artists and suppliers and will carry the necessary
government and industry standard approvals. We do not intend to promote products
or services of any business that are restricted in Canada and the United States.
Existing or Probable Government Regulations
Other than the licensing requirements discussed above, there are no other types
of government regulations existing nor are we aware of any such regulations
being contemplated that adversely affect our ability to operate.
Research and Development Activities and Costs
We have not incurred any costs to date relating to research and development and
have no plans to undertake any research and development activities within the
next twelve months.
Compliance with Environmental Laws
There are no environmental laws that have been enacted that would affect our
business, nor are we aware of any such laws being contemplated in the future
that address issues specific to our business.
Facilities
We do not own or rent facilities of any kind. At present operations are being
conducted from the offices of our President, and she provides this space free of
charge. We will continue to use this space for executive offices for the
foreseeable future.
Employees
Our officers and directors are responsible for planning, developing and
operational duties and will continue to do so throughout the early stages of our
growth. We have no intentions in hiring any employees until our business has
sufficient and reliable revenue from operations. Human resources planning will
be part of an ongoing process that will include constant evaluation of
operations and revenue realization. We do not expect to hire any employees
during the next year of operations.
ITEM 2. DESCRIPTION OF PROPERTY.
We do not own or rent facilities of any kind. At present we are operating from
our principal office that is located within the offices of our President, who
provides this space free of charge.
6
We do not have any manufacturing plants and have minimal equipment for the
operation of our business.
Investment Policies
We do not have any investments in real estate or interest in real estate or
investments real estate mortgages. We also do not have any investments in any
securities of or interests in persons primarily engaged in real estate
activities.
Description of Real Estate and Operating Data
None
ITEM 3. LEGAL PROCEEDINGS.
We are not a party to any legal proceedings, nor are we aware of any
contemplated or pending legal proceedings against us.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
We have not yet held our annual shareholders' meeting or submitted any matters
to a vote of shareholders during the fiscal year to which this Annual Report
pertains.
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.
Market for Common Equity and Related Stockholder Matters
(a) Market Information
Our Common Stock is presently traded on the over-the-counter market on the OTC
Bulletin Board maintained by the Financial Industry Regulatory Authority
("FINRA"). On August 7, 2008, we began trading on the over the counter bulletin
board under the symbol "OLOI." During the period of August 7, 2008 through
November 30, 2008, our shares have not traded. As of January 31, 2009, no trades
for our stock have taken place on the OTC/BB.
(b) Holders
As of January 31, 2009, there were approximately forty-three (43) holders of
record of our common stock.
(c) Dividend Policy
We have never declared or paid dividends on our common stock. We intend to
retain earnings, if any, to support the development of our business and
therefore do not anticipate paying cash dividends for the foreseeable future.
Payment of future dividends, if any, will be at the discretion of our board of
directors after taking into account various factors, including current financial
condition, operating results and current and anticipated cash needs.
(d) Securities authorized for issuance under equity compensation plans
None.
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RECENT SALES OF UNREGISTERED SECURITIES
The following is a history of our sales of unregistered securities since our
incorporation on November 18, 2005.
On November 18, 2005, Gaye Adams, founder of our company and as a member of the
board of directors, purchased by subscription, 1,800,000 shares of common stock
from our company for $18,000. On November 28th, 2005, a private offering was
completed, under which Greg Adams, a current member of the board of directors,
purchased 700,000 shares of common stock by subscription at a price of $0.01 per
share for $7,000.
There were no promoters being used in relation to this offering. No person who
may, in the future, be considered a promoter of this offering, will receive or
expect to receive assets, services or other considerations from our company. No
assets will be, nor expected to be, acquired from any promoter on behalf of the
company. We have not entered into any agreements that require disclosure to the
shareholders.
We qualified for an exemption from registration under Rule 504 in both of these
issuances since it is not subject to the reporting requirements of Section 13 or
15(d) of the Securities Act of 1933, is not an investment company, it had a
specific business plan at the time it sold the securities, it was not a blank
check company, as that term is defined in Rule 419(a)(2) of Regulation C or Rule
504 (a)(3) of Regulation D of the Securities Act of 1933. Neither our company
nor any person acting on its behalf offered or sold any of the securities by any
form of general solicitation or general advertising. The securities sold are
restricted shares; the purchasers were informed that the securities cannot be
resold without the securities being registered under the Securities Act of 1933
or an exemption there from. We exercised reasonable care to assure that the
purchases were not underwritten within the meaning of section 2(a) (11) of this
Act including but not limited to the placement of a restrictive legend on the
certificates representing the shares, and the aggregate offering price was less
than $1,000,000.
SALE OF REGISTERED SECURITIES AND USE OF PROCEEDS
As previously reported, on May 12, 2006 our Registration Statement on Form SB-2,
commission file number 333-133347, became effective, and on July 21, 2006, we
completed a maximum offering of 700,000 common shares at a price of $0.10 per
share. On August 7, 2008, we obtained regulatory approval to post our common
shares for trading on the OTC/BB under the trading symbol "OLOI".
All of the proceeds from our offering have been spent and have been used to fund
our operations as described in the SB-2 offering document incorporated by
reference herein.
As of the date of this Form 10-K Annual Report, there are 3,200,000 issued and
outstanding shares of common stock of which 2,500,000 shares are held by our
officers and directors.
DESCRIPTION OF SECURITIES
Common Stock
We are authorized to issue up to 75,000,000 shares of Common Stock, $.001 par
value. At present, we are not authorized to issue any series or shares of
preferred stock. The holders of our Common Stock are entitled to one vote per
share held and have the sole right and power to vote on all matters on which a
vote of stockholders is taken. Voting rights are non-cumulative. Common
stockholders are entitled to receive dividends when, as, and if declared by the
Board of Directors, out of funds legally available therefore and to share pro
rata in any distribution to stockholders. Upon liquidation, dissolution, or the
winding up of our Company, common stockholders are entitled to receive the net
assets of our Company in proportion to the respective number of shares held by
them after payment of liabilities which may be outstanding. The holders of
Common Stock do not have any preemptive right to subscribe for or purchase any
shares of any class of stock of the Company. The outstanding shares of Common
Stock will not be subject to further call or redemption and are fully paid and
non-assessable. To the extent that additional common shares are issued, the
relative interest of existing stockholders will likely be diluted.
8
Stock Purchase Warrants
None.
Stock Purchase Options
None.
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.
Cautionary and Forward-Looking Statements
In addition to statements of historical fact, this Form 10-K contains
forward-looking statements. The presentation of future aspects of Online
Originals, Inc. (the "Company" or "Issuer") found in these statements is subject
to a number of risks and uncertainties that could cause actual results to differ
materially from those reflected in such statements. Readers are cautioned not to
place undue reliance on these forward-looking statements, which reflect
management's analysis only as of the date hereof. Without limiting the
generality of the foregoing, words such as "may," "will," "expect," "believe,"
"anticipate," "intend," or "could" or the negative variations thereof or
comparable terminology are intended to identify forward-looking statements.
These forward-looking statements are subject to numerous assumptions, risks and
uncertainties that may cause the Company actual results to be materially
different from any future results expressed or implied by the Company in those
statements. Important facts that could prevent the Company from achieving any
stated goals include, but are not limited to, the following:
(a) volatility or decline of the Company's stock price;
(b) potential fluctuation in quarterly results;
(c) failure of the Company to earn revenues or profits;
(d) inadequate capital to continue or expand its business, inability to raise
additional capital or financing to implement its business plans;
(e) failure to make sales on an increasing basis;
(f) rapid and significant changes in markets;
(g) litigation with or legal claims and allegations by outside parties;
(h) insufficient revenues to cover operating costs.
There is no assurance that the Company will be profitable, the Company may not
be able to successfully develop, manage or market its products and services, the
Company may not be able to attract or retain qualified executives and personnel,
the Company's products and services may become obsolete, government regulation
may hinder the Company's business, additional dilution in outstanding stock
ownership may be incurred due to the issuance of more shares, warrants and stock
options, or the exercise of warrants and stock options, and other risks inherent
in the Company's businesses.
The Company undertakes no obligation to publicly revise these forward-looking
statements to reflect events or circumstances that arise after the date hereof.
Readers should carefully review the factors described in other documents the
Company files from time to time with the Securities and Exchange Commission,
including the Quarterly Reports on Form 10-QSB and any Current Reports on Form
8-K filed by the Company.
9
Plan of Operation for the Next Twelve (12) Months
The following discussion of the plan of operation, financial condition, results
of operations, cash flows and changes in financial position of our Company
should be read in conjunction with our most recent financial statements and
notes appearing elsewhere in this Form 10-K; our Form 10-QSB filed on October
10, 2008, our Form 10-QSB filed on July 14, 2008, our Form 10-QSB filed on April
14, 2008, and our Form SB-2 Registration Statement filed on April 18, 2006.
Our registered public accounting firm's audit report on our consolidated
financial statements as of November 30, 2008, and for each of the years in the
two-year period then ended, includes a "going concern" explanatory paragraph
that describes substantial doubt about our ability to continue as a going
concern. Management's plans in regard to the factors prompting the explanatory
paragraph are discussed below.
During the year ended November 30, 2008, we continued operations that earned
revenue in the form of commission sales. We are continuing the management of our
website which is our main source of promotion and facilitation for our members.
It outlines the services, description of art pieces, artists, and ordering
instructions. We are continuing to contact both experienced and unpublished
artists in order to introduce our marketing plan. We will continue to develop
our membership program and have contacted the local tourist bureau in order to
market our products though their international contacts.
In September 2008, a new president was appointed and third director was added to
our Board of Directors. We are actively seeking to add new products and/or
services that we can offer through our website. Mr. Adams, now having completed
his academic studies, will endeavor to cultivate new members and corporate
contacts. Ms. Saunders plans to assist us in putting together a new marketing
strategy.
We have no employees at the present time. We will continue to operate with very
limited administrative support as our current officers continue to be
responsible for developing and operational duties, without compensation, for at
least the next 12 months.
Our continuing operations are dependent upon the identification and successful
completion of additional long-term or permanent equity financing, the support of
creditors and shareholders, and, ultimately, the achievement of profitable
operations. There can be no assurances that we will be successful, which would
in turn significantly affect our ability to complete the roll-out of our
business plan. If not, we will likely be required to reduce operations or
liquidate assets. We will continue to evaluate our projected expenditures
relative to our available cash and to seek additional means of financing in
order to satisfy our working capital and other cash requirements.
We believe we do not have sufficient cash resources to satisfy our needs through
the end of February 2009. Our ability to satisfy cash requirements thereafter
and the need for additional funding is dependent on our ability to generate
revenue from our business in sufficient quantity and on a profitable basis. To
the extent that we require additional funds to support our operations or the
expansion of our business, we may attempt to sell additional equity shares or
issue debt. Any sale of additional equity securities will result in dilution to
our stockholders. Should we require additional cash in the future, there can be
no assurance that we will be successful in raising additional debt or equity
financing on terms acceptable to us, if at all.
In addition, the United States and the global business community is experiencing
severe instability in the commercial and investment banking systems which is
likely to continue to have far-reaching effects on the economic activity in the
country for an indeterminable period. The long-term impact on the United States
economy and the Company's operating activities and ability to raise capital
cannot be predicted at this time, but may be substantial.
Management's Discussion and Analysis of Financial Condition and Results of
Operations
Financial Condition
At November 30, 2008, we had a working capital deficit of $6,068 compared to
working capital of $19,490 at November 30, 2007. At November 30, 2008, our total
10
assets consisted of cash of $4,904, prepaid expenses of $93 and capital assets
of $3,542. This compares with our total assets at November 30, 2007, which
consisted of cash of $24,667, prepaid expenses of $93 and capital assets of
$7,170.
At November 30, 2008, our total current liabilities, consisting of accounts
payable of $4,565 and accrued liabilities of $6,500, increased to $11,065 from
$5,270 consisting of accounts payable of $270 and accrued liabilities of $5,000
at November 30, 2007.
We recognized $2,800 in revenues during the fiscal year ending November 30,
2008, compared to revenues of $6,970 during the year ended November 30, 2007.
The $4,170 decrease in revenue was a result of our decreased sales during the
year ended November 30, 2008. During the year ended November 30, 2008, our gross
margin was $2,800. During the year ended November 30, 2007, we had cost of goods
sold of $5,269 resulting in a gross margin of $1,701. During the year ended
November 30, 2008, there was no cost of goods sold since the revenue was from
commission sales.
We have recognized $10,083 in revenue since our inception. Our short and long
term survival is dependent on funding from increased sales of products and
services, sales of securities as necessary or from shareholder loans.
Result of Operations
We recognized $2,800 in revenues during the fiscal year ending November 30,
2008, compared to revenues of $6,970 during the year ended November 30, 2007.
The $4,170 decrease in revenue was a result of our decreased sales during the
year ended November 30, 2008. During the year ended November 30, 2008, our gross
margin was $2,800. During the year ended November 30, 2007, we had cost of goods
sold of $5,269 resulting in a gross margin of $1,701. During the year ended
November 30, 2008, there was no cost of goods sold since the revenue was from
commission sales.
During the year ended November 30, 2008, we incurred expenses of $31,250
compared to expenses of $39,289 for the year ended November 30, 2007. The
decrease of $8,039 was a result of decreased operations over the prior year. The
principal component of losses in 2008 was professional fees of $24,318, office
and administration expenses of $3,304 and amortization costs of $3,628 compared
with the principal component losses in 2007 being professional fees of $18,656,
office and administration expenses of $2,145, marketing expenses of $8,461,
consulting expenses of $6,875 and amortization costs of $3,152.
We recognized a net loss of $28,450 for the year ended November 30, 2008
compared to a net loss of $37,588 for the year ended November 30, 2007. From
inception to November 30, 2008 we have incurred a net loss of $82,896. The
principal components of losses were professional fees of $55,012, office and
administration expenses of $8,572, marketing costs of $8,461, cost of goods sold
of $5,379, consulting fees of $7,550, organizational costs of $665, and
depreciation and amortization of $7,342.
As of January 31, 2009, our net cash balance is approximately $2,500. In
addition, we have prepaid expenses of $93. Cash on hand is currently our only
source of liquidity. We do not have any lending arrangements in place with
banking or financial institutions and we do not anticipate that we will be able
to secure these funding arrangements in the near future.
We believe our existing cash balance is not sufficient to carry our normal
operations for the next 12 months. To the extent that we require additional
funds to support our operations or the expansion of our business, we may attempt
to sell additional equity shares or issue debt. Any sale of additional equity
securities will result in dilution to our stockholders. There can be no
assurance that additional financing, if required, will be available to our
company or on acceptable terms.
QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
We believe our market risk exposures arise primarily from exposures to
fluctuations in interest rates and exchange rates. We presently only transact
business in Canadian and US Dollars. We believe that the exchange rate risk
surrounding the future transactions of the Company will not materially or
adversely affect our future earnings. We do not believe that we are subject to
any seasonal trends. We do not use derivative financial instruments to manage
risks or for speculative or trading purposes.
11
Off Balance Sheet Arrangements.
None.
ITEM 7. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
The financial statements required by this Item begin on Page F-12 of this Form
10-K, and include:
Report of Independent Registered Public Accounting Firm;
Balance Sheets;
Statements of Operations, Statements of Cash Flows, Statement of Stockholders'
Equity (Deficit); and
Notes to Financial Statements.
12
ONLINE ORIGINALS, INC.
(A Development Stage Company)
FINANCIAL STATEMENTS
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
November 30, 2008
Page
Report of Independent Registered Public Accounting Firm F-13
Financial Statements:
Balance Sheets F-14
Statements of Operations F-15 to F-16
Statements of Cash Flows F-17
Statement of Stockholders' Equity (Deficit) F-18
Notes to Financial Statements F-19 to F-23
F-13
Report of Independent Registered Public Accounting Firm
Board of Directors
Online Originals, Inc.
We have audited the accompanying balance sheets of Online Originals, Inc., as of
November 30, 2008 and 2007, and the related statements of operations,
stockholders' equity, and cash flows for the two years ended November 30, 2008
and 2007, and the period from November 18, 2005 (inception) to November 30,
2008. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States of America). Those standards require
that we plan and perform the audits to obtain reasonable assurance about whether
the financial statements are free of material misstatement. The company is not
required to have, nor were we engaged to perform an audit of its internal
control over financial reporting. Our audit included consideration of internal
control over financial reporting as a basis for designing audit procedures that
are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the company's internal control over financial
reporting. Accordingly, we express no such opinion. An audit includes examining,
on a test basis, evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Online Originals, Inc. as of
November 30, 2008 and 2007, and the results of its operations and cash flows for
the two years ended November 30, 2008 and 2007, and the period from November 18,
2005 (inception) to November 30, 2008, in conformity with accounting principles
generally accepted in the United States of America.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As described in Note 3, the Company
has minimal business operations to date and has losses to date of approximately
$82,900, which raise substantial doubt about its ability to continue as a going
concern. Management's plans in regard to this matter are also discussed in Note
3. The financial statements do not include any adjustments that might result
from the outcome of this uncertainty.
SCHUMACHER & ASSOCIATES, INC.
Denver, Colorado
February 25, 2009
F-14
ONLINE ORIGINALS, INC.
(A Development Stage Company)
BALANCE SHEETS
November 30, 2008 November 30, 2007
ASSETS
Current Assets
Cash $ 4,904 $ 24,667
Prepaid expense 93 93
------------------------------------------
Total Current Assets 4,997 24,760
Computer Equipment, net of depreciation of $4,081 and $1,802 2,755 5,034
Website Development Costs, net of amortization of $3,261 and $1,911
787 2,136
------------------------------------------
TOTAL ASSETS $ 8,539 $ 31,930
==========================================
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
LIABILITIES
Current Liabilities
Accounts payable $ 4,565 $ 270
Accrued liabilities 6,500 5,000
------------------------------------------
Total Liabilities, all current 11,065 5,270
------------------------------------------
Commitments and Contingencies (Notes 3, 5 and 6)
STOCKHOLDERS' EQUITY (DEFICIT)
Capital Stock
Authorized:
75,000,000 common shares, par value $0.001 per share
Issued and outstanding:
3,200,000 common shares 3,200 3,200
Additional paid-in capital 77,299 77,299
Accumulated comprehensive (loss) (129) 607
Deficit Accumulated During the Development Stage (82,896) (54,446)
------------------------------------------
Total Stockholders' Equity (Deficit) (2,526) 26,660
------------------------------------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) $ 8,539 $ 31,930
==========================================
The accompanying notes are an integral part of these statements.
15
ONLINE ORIGINALS, INC.
(A Development Stage Company)
STATEMENTS OF OPERATIONS
Cumulative amounts
from Date of Inception
Year Ended Year Ended on November 18 2005 to
November 30, November 30, 2007 November 30, 2008
2008
---------------------------------------------------------------------------
Revenue $ 2,800 $ 6,970 $ 10,083
---------------------------------------------------------------------------
Cost of Goods Sold - 5,269 5,379
---------------------------------------------------------------------------
2,800 1,701 4,704
---------------------------------------------------------------------------
Expenses
Amortization 3,628 3,152 7,342
Consulting - 6,875 7,550
Marketing - 8,461 8,461
Office and administration 3,304 2,145 8,572
Organizational costs - - 665
Professional fees 24,318 18,656 55,012
---------------------------------------------------------------------------
31,250 39,289 87,602
---------------------------------------------------------------------------
Net Loss From Operations (28,450) (37,588) (82,898)
---------------------------------------------------------------------------
Other Income
Interest Income - - 2
Net Loss For The Period $ (28,450) $ (37,588) $ (82,896)
===========================================================================
Basic And Diluted Loss Per Share $ (0.01) $ (0.01) $ (0.03)
===========================================================================
Weighted Average Number Of Shares
Outstanding 3,200,000 3,200,000 3,039,044
===========================================================================
The accompanying notes are an integral part of these statement.
F-16
ONLINE ORIGINALS, INC.
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
Cumulative amounts from
Year ended Year ended Date of Inception on
November 30 2008 November 30, 2007 November 18, 2005 to
November 30, 2008
- -----------------------------------------------------------------------------------------------------------------------------
Cash Flows from Operating Activities
Net loss $ (28,450) $ (37,588) $ (82,896)
Adjustments to Reconcile Net Loss to Net Cash
Used by Operating Activities:
Depreciation and amortization 3,628 3,152 7,342
Inventory - 2,660 -
Prepaid expenses - 6,875 (93)
Accounts payable and accrued liabilities 5,795 (28) 11,065
----------------------------------------------------------------------------
Cash (Used in) Operating Activities (19,027) (24,929) (64,582)
----------------------------------------------------------------------------
Cash Flows from Investing Activities
Additions to capital assets - (6,836) (6,836)
Additions to intangibles - - (4,048)
----------------------------------------------------------------------------
Net Cash (Used in) Investing Activities - (6,836) (10,884)
----------------------------------------------------------------------------
Cash Flows From Financing Activities
Issuance of common shares - - 95,000
Offering costs - - (14,501)
Foreign currency translation adjustment (736) 1,836 (129)
----------------------------------------------------------------------------
Net Cash Provided by (Used in) Financing
Activities (736) 1,836 80,370
----------------------------------------------------------------------------
(Decrease) Increase in Cash during the Period (19,763) (29,929) 4,904
Cash, Beginning Of Period 24,667 54,596 -
----------------------------------------------------------------------------
Cash, End Of Period $ 4,904 $ 24,667 $ 4,904
============================================================================
Supplemental Disclosure Of Cash Flow
Cash paid for:
Interest $ - $ - $ -
Income taxes $ - $ - $ -
============================================================================
The accompanying notes are an integral part of these statements.
F-17
ONLINE ORIGINALS, INC.
(A Development Stage Company)
STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT)
For the Period from November 18, 2005 (Inception) through November 30, 2008
DEFICIT ACCUMULATED
CAPITAL STOCK ACCUMULATED
-------------------------------------------
ADDITIONAL DURING THE COMPRE-
PAID-IN DEVELOPMENT HENSIVE
SHARES AMOUNT CAPITAL STAGE INCOME (LOSS) TOTAL
-----------------------------------------------------------------------------------------------------
November 18, 2005 - Shares
issued for cash at $0.01 1,800,000 $ 1,800 $ 16,200 $ - $ - $ 18,000
November 28, 2005 - Shares
issued for cash at $0.01 700,000 700 6,300 - - 7,000
Net loss for the period
ended November 30, 2005 - - - (2,680) (2,680)
-----------------------------------------------------------------------------------------------------
Balance, November 30, 2005 2,500,000 2,500 22,500 (2,680) - 22,320
July 21, 2006 - Shares
issued for cash at 0.10, 700,000 700 54,799 - - 55,499
net of offering costs
of $14,501
Foreign currency translation
Net loss for the year ended
November 30, 2006 - - - (14,178) (14,178)
-----------------------------------------------------------------------------------------------------
Balance, November 30, 2006 3,200,000 3,200 77,299 (16,858) (1,229) 62,412
Foreign currency translation
Net loss for the year ended
November 30, 2007 - - - (37,588) - (37,588)
-----------------------------------------------------------------------------------------------------
Balance, November 30, 2007 3,200,000 $ 3,200 $ 77,299 $ (54,446) $ 607 $ 26,660
Foreign currency translation
Net loss for the year ended
November 30, 2008 - - - (28,450) - (28,450)
-----------------------------------------------------------------------------------------------------
Balance, November 30, 2008 3,200,000 $ 3,200 $ 77,299 $ (82,896) $ (129) $ (2,526)
=====================================================================================================
The accompanying notes are an integral part of these statements.
F-18
ONLINE ORIGINALS, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
November 30, 2008
1. NATURE AND CONTINUENCE OF OPERATIONS
a) Organization
Online Originals ("The Company") was incorporated in the State of
Nevada, United States of America, on November 18, 2005. The Company's
year end is November 30th.
b) Development Stage Activities
The company is in the development stage and has realized minimal
revenues. The Company's business plan is to develop a membership based
website art gallery/auction house specifically focused on displaying
and selling original artwork.
Based upon their business plan, the Company is a development stage
enterprise. Accordingly, financial statements are presented in
conformity with the accounting principles generally accepted in the
United States of America that apply in establishing operating
enterprises. As a development stage enterprise, the Company discloses
the deficit accumulated during the development stage and the cumulative
statements of operations and cash flows from inception to the current
balance sheet date.
2. SIGNIFICANT ACCOUNTING POLICIES
This summary of significant accounting policies is presented to assist
in understanding the Company's financial statements. The financial
statements and notes are representations of management who is
responsible for their integrity and objectivity. These accounting
policies conform to generally accepted accounting principles in the
United States of America and have been consistently applied in the
preparation of the financial statements. The financial statements are
stated in United States of America dollars.
a) Organizational and Start-up Costs
Costs of start-up activities, including organizational costs, are
expensed as incurred in accordance with SOP 98-5.
b) Income Taxes
The Company adopted the Statement of Financial Accounting
Standards No. 109 - "Accounting for Income Taxes" (SFAS 109). SFAS
109 requires the use of the asset and liability method of
accounting of income taxes. Under the asset and liability method
of SFAS 109, deferred tax assets and liabilities are recognized
for the future tax consequences attributable to temporary
differences between the financial statements carrying amounts of
existing assets and liabilities and their respective tax bases.
Deferred tax assets and liabilities are measured using enacted tax
rates expected to apply to taxable income in the years in which
those temporary differences are expected to be recovered or
settled. A valuation allowance is established when necessary to
reduce deferred tax assets to the amount expected to be realized.
c) Basic and Diluted Loss per Share
In accordance with SFAS No. 128 - "Earnings per Share", the basic
loss per common share is computed by dividing net loss available
to common stockholders by the weighted average number of common
shares outstanding. Diluted loss per common share is computed
similar to basic loss per common share except that the denominator
is increased to include the number of additional common shares
that would have been outstanding if the potential common shares
had been issued and if the additional common shares were dilutive.
Diluted earnings per share is not shown for periods in which the
Company incurs a loss because it would be anti-dilutive. At
November 30, 2008, the Company had no stock equivalents that were
anti-dilutive and excluded in the earnings per share computation.
F-19
ONLINE ORIGINALS, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
November 30, 2008
d) Estimated Fair Value of Financial Instruments
The carrying value of the Company's financial instruments,
consisting of cash, prepaid expense, accounts payable and accrued
liabilities approximate their fair value due to the short-term
maturity of such instruments. Unless otherwise noted, it is
management's opinion that the Company is not exposed to
significant interest, currency or credit risks arising from these
financial statements.
e) Revenue Recognition
It is the Company's policy that revenue is recognized in
accordance with SEC Staff Accounting Bulletin (SAB) No. 104,
"Revenue Recognition." Under SAB 104, product revenues (or service
revenues) are recognized when persuasive evidence of an
arrangement exists, delivery has occurred (or service has been
performed), the sales price is fixed and determinable and
collectability is reasonably assured. Revenue recognition from
consignment inventory consists of commission income.
f) Inventory
Inventory is stated at the lower of cost or market. We generally
determine the costs by the first-in first-out or average cost
methods. Cost includes all costs of purchase, cost of conversion
and other costs incurred in bringing the inventory to its present
location and condition.
g) Foreign Currency Translations
The Company uses the Canadian dollar and the U.S. dollar as its
functional currency. The Company's reporting currency is the U.S.
dollar. All transactions initiated in other currencies are re-
measured into the functional currency as follows:
Monetary assets and liabilities at the rate of exchange in effect
at the balance sheet date,
ii) Non-monetary assets and liabilities, and equity at historical
rates, and
iii) Revenue and expense items at the average rate of exchange pre
-vailing during the period.
Gains and losses on re-measurement are included in determining net
income for the period.
Translation of balances from the functional currency into the
reporting currency is conducted as follows:
Assets and liabilities at the rate of exchange in effect at the
balance sheet date,
ii) Equity at historical rates, and
iii) Revenue and expense items at the average rate of exchange
prevailing during the period.
Translation adjustments resulting from translation of balances
from functional to reporting currency are accumulated as a
separate component of shareholders' equity as a component of
comprehensive income or loss.
h) Comprehensive Income (Loss)
The Company adopted Statement of Financial Accounting Standards
(SFAS) No. 130, "Reporting Comprehensive Income." SFAS 130
requires that the components and total amounts of comprehensive
income be displayed in the financial statements beginning in 1998.
Comprehensive income includes net income and all changes in equity
during a period that arises from non-owner sources, such as
foreign currency items and unrealized gains and losses on certain
investments in equity securities.
i) Use of Estimates
The preparation of the Company's financial statements are in
conformity with generally accepted accounting principles which
F-20
ONLINE ORIGINALS, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
November 30, 2008
requires management to make estimates and assumptions that affect
the amounts reported in these financial statements and
accompanying notes. Actual results could differ from those
estimates.
j) Cash and Cash Equivalents
All highly liquid debt instruments with an original maturity of
three months or less are considered to be cash equivalents.
k) Equipment
Property and equipment are recorded at cost and depreciated over
their estimated useful lives. The Company uses the straight-line
method of depreciation. A summary of the estimated useful lives
follows:
Computer equipment 3 years
l) Website Development Costs
Website development costs representing capitalized costs of
design, configuration, coding, installation and testing of the
Company's website is capitalized until initial implementation.
Upon implementation, the asset is amortized to expense over its
estimated useful life of three years using the straight-line
method. Accumulated amortization at November 30, 2008 was $3,261
and amortization expense for the year ended November 30, 2008 was
$1,349. Estimated future amortization for the website is estimated
to be $788 for the year ending November 30, 2009. Ongoing website
post-implementation costs of operation, including training and
application maintenance, will be charged to expense as incurred.
m) Concentrations
Financial instruments that potentially subject the Company to
concentrations of credit risk consist principally of cash and cash
equivalents. At November 30, 2008, approximately $4,904 of cash or
cash equivalents was not insured by agencies of the U.S.
Government.
n) Recent Accounting Pronouncements
There were various accounting standards and interpretations issued
during 2008 and 2007, none of which are expected to have a
material impact on the Company's financial position, operations or
cash flows.
o) Other
The Company consists of one reportable business segment. The
Company paid no dividends during the periods presented.
3. BASIS OF PRESENTATION - GOING CONCERN
The accompanying financial statements have been prepared in conformity
with generally accepted accounting principles in the United States of
America, which contemplates continuation of the Company as a going
concern. However, the Company has minimal business operations to date
and has losses at November 30, 2008 of approximately $82,900. These
matters raise substantial doubt about its ability to continue as a
going concern. In view of these matters, realization of certain of the
assets in the accompanying balance sheet is dependent upon its ability
to meet its financing requirements, raise additional capital, and the
F-21
ONLINE ORIGINALS, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
November 30, 2008
success of its future operations. There is no assurance that future
capital raising plans will be successful in obtaining sufficient funds
to assure its eventual profitability. Management is actively seeking to
add new products and/or services in order to show profitability. In
addition, one of the members of the board of directors has agreed to
loan funds to the Company if needed. To date, due to the continued
economic conditions, they have not yet been able to find products and
services that would contribute to their business. We believe that
actions planned and presently being taken to revise its operating and
financial requirements will provide the opportunity for the Company to
continue as a going concern. The financial statements do not include
any adjustments that might result from these uncertainties
4. COMMON STOCK
The Company's authorized common stock consists of 75,000,000 shares
with a par value of $0.001 per share.
On November 18, 2005, the Company issued 1,800,000 shares of common
stock at a price of $0.01 for cash totalling $18,000.
On November 28, 2005, the Company issued 700,000 shares of common stock
at a price of $0.01 for cash totalling $7,000.
On July 21, 2006, the Company issued 700,000 shares of common stock at
a price of $0.10 for cash totalling $70,000. The Company incurred
offering costs of $14,501 related to this offering, resulting in net
proceeds of $55,499.
5. INCOME TAXES
The Company is subject to foreign and domestic income taxes. The
Company has had no income, and therefore has paid no income tax.
Deferred income taxes arise from temporary timing differences in the
recognition of income and expenses for financial reporting and tax
purposes. The Company's deferred tax assets consist entirely of the
benefit from net operating loss (NOL) carry-forwards. The NOL carry
forwards expire in various years through 2028. The Company's deferred
tax assets are offset by a valuation allowance due to the uncertainty
of the realization of the NOL carry-forwards. NOL carry-forwards may be
further limited by a change in company ownership and other provisions
of the tax laws.
The Company's deferred tax assets, valuation allowance, and change in
valuation allowance are as follows:
Estimated Tax Change in
Estimated NOL Benefit from Valuation Valuation Net Tax
Period Ending Carry-forward NOL Expires NOL Allowance Allowance Benefit
November 30, 2007 54,446 Various 13,612 (9,397) -
November 30, 2008 28,450 2028 7,112 (7,112) -
Income taxes at the statutory rate are reconciled to the Company's
actual income taxes as follows:
Income tax benefit at statutory rate resulting from net operating
loss carry forward (25%)
Deferred income tax valuation allowance 25%
-----------
-----------
Actual tax rate 0%
===========
F-22
ONLINE ORIGINALS, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
November 30, 2008
6. RELATED PARTY TRANSACTIONS
The Company uses the offices of its President for minimal office facility
needs for no consideration. No provision for these costs has been provided
since it has been determined that they are immaterial.
F-23
ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
ITEM 8A. Controls and procedures
Disclosure Controls and Procedures
The Company, under the supervision and with the participation of the Company's
management, including the Company's President and Chief Financial Officer,
performed an evaluation of the effectiveness of the design and operation of the
Company's disclosure controls and procedures as of December 14, 2008. Based on
that evaluation, the Company's management concluded that the Company's
disclosure controls and procedures were effective as of November 30, 2008.
ITEM 8(A)T. INTERNAL CONTROLS AND PROCEDURES
Management's Report on Internal Control over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal
control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) of
the Exchange Act). Our internal control over financial reporting is a process
designed to provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external purposes in
accordance with accounting principles generally accepted in the United States.
Because of its inherent limitations, internal controls over financial reporting
may not prevent or detect misstatements. Therefore, even those systems
determined to be effective can provide only reasonable assurance of achieving
their control objectives. Furthermore, smaller reporting companies face
additional limitations. Smaller reporting companies employ fewer individuals and
find it difficult to properly segregate duties. Smaller reporting companies tend
to utilize general accounting software packages that lack a rigorous set of
software controls.
Our management, with the participation of the President and Chief Financial
Officer, evaluated the effectiveness of the Company's internal control over
financial reporting as of November 30, 2008. In making this assessment, our
management used the criteria set forth by the Committee of Sponsoring
Organizations of the Treadway Commission (COSO) in Internal Control --
Integrated Framework. Based on that evaluation, our management concluded that,
as of November 30 2008, our internal control over financial reporting was not
effective due to material weaknesses in the system of internal control.
Specifically, management identified the following control deficiency:
- The Company has installed accounting software that does not
prevent erroneous or unauthorized changes to previous reporting
periods and does not provide an adequate audit trail of entries
made in the accounting software.
Accordingly, while the Company has identified certain material weaknesses in its
system of internal control over financial reporting, it believes that it has
taken reasonable steps to ascertain that the financial information contained in
this report is in accordance with generally accepted accounting principles.
Management has determined that current resources would be appropriately applied
elsewhere and when resources permit, they will alleviate material weaknesses
through various steps.
This Annual Report does not include an attestation report of the Company's
registered public accounting firm regarding internal control over financial
reporting. Management's report was not subject to attestation by the Company's
registered public accounting firm pursuant to temporary rules of the Securities
and Exchange Commission that permit the Company to provide only management's
report in this Annual Report.
24
Changes in Internal Control over Financial Reporting
There were no changes in internal control over financial reporting that occurred
during the last fiscal quarter covered by this report that have materially
affected, or are reasonably likely to affect, the Company's internal control
over financial reporting.
ITEM 8B. Other Information
None.
PART III
ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS, CONTROL PERSONS AND CORPORATE
GOVERNANCE; COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
Directors and Executive Officers
Effective September 12, 2008, Gaye Adam resigned from the Company Board of
Directors. She also resigned as the Company's President and Chief Executive
Officer, at that time.
On September 12, 2008, Shari Sookarookoff was appointed as a director and as
President and Chief Executive Officer of the Company. Ruth Saunders was also
appointed as a director of the Company.
Greg Adams was reappointed as a director and as Secretary/Treasurer and Chief
Financial Officer of the Company.
The following table sets forth the names, ages and positions of the current
directors and executive officers of the Company, as of the date of this filing:
Name Age Offices Held
Shari Sookarookoff 30 Director, CEO, President
Greg Adams 26 Director, CFO, Secretary, Treasurer
Ruth Saunders 33 Director
SHARI SOOKAROOKOFF, CEO, PRESODENT, MEMBER OF THE BOARD
Shari Sookarookoff has served as President and Director since September 12,
2008. The term of her office is for two years and is thereafter renewable on an
annual basis.
Since 1994, Ms. Sookarookoff has been employed by Alberta Forest Products
Shippers Association, a freight broker located in Edmonton, Alberta, Canada that
is dedicated to facilitate the freight requirements of numerous lumber mills in
the Province of Alberta, Canada. In June 1999, she was promoted to traffic
coordinator.
In July 2002, Ms. Sookarookoff left Alberta Forest Products Shippers Association
for her present position with Spruce Land Millworks (located in Spruce Grove,
Alberta, Canada) as manager of the shipping department. Resourcing her
accumulated knowledge within the truck brokerage industry.
Ms. Sookarookoff is not an officer or director of any other reporting company
that files annual, quarterly or periodic reports with the United States
Securities and Exchange Commission.
GREGORY ADAMS, CFO, SECRETARY/TREASURER, MEMBER OF THE BOARD
Greg Adams has served as CFO, Secretary/Treasurer, and Director since November
28, 2005. The term of his office is for two years and is thereafter renewable on
an annual basis.
Mr. Adams has been an independent contractor in the field of animation since
April 2006. In April 2006, he graduated with a Diploma in Commercial Animation
from Capilano University (Formerly Capilano College) .in British Columbia,
Canada. The focus of his course was commercial animation. Prior to registering
at Capilano College in January 2003, he received diplomas for life drawing and
portraiture courses at Vancouver Academy of Art in 2002, and completed part time
25
drawing courses at Capilano College, in December 2001. Mr. Adams completed his
senior secondary education in Salmon Arm, British Columbia in June 2001.
Mr. Adams has computer experience using Windows 98/ME/XP, Adobe After Effects,
Adobe Photoshop CS 2, Kinetix 3D Studio Max 3.0+, Macromedia Flash MX & Flash MX
2004, and Adobe Premiere 6.0. As part of his curriculum at Capilano College, Mr.
Adams developed a Flash based website to showcase his portfolio.
RUTH SAUNDERS, MEMBER OF THE BOARD
Ruth Saunders has served as Director since September 12, 2008. The term of her
office is for two years and is thereafter renewable on an annual basis.
Since graduating in the spring of 2008 with a Diploma in Public Relations from
Grant MacEwan College in Edmonton, Ms. Saunders has been employed by Alberta
Health and Wellness in their public relations department.
After having received a Journalism Diploma in 1997 from Grant MacEwan College,
Ms. Saunders was a Journalist for ten (10) years. She worked first with the
Hinton Parklander in Hinton, Alberta, for 3 years and then with the Wetaskiwin
Times Advertiser in Wetaskiwin, Alberta, from 2001 though 2007.
Ms. Saunders is not an officer or director of any other reporting company that
files annual, quarterly, or periodic reports with the United States Securities
and Exchange Commission.
GAYE ADAMS
Ms. Adams served as CEO, President, and Director from November 18, 2005 until
her resignation on September 12, 2008. Ms. Adams also served as the
Secretary/Treasurer from November 18th, 2005 until her resignation date of
November 28th, 2005. Her son, Gregory Adams is presently serving as
Secretary/Treasurer and is also a member of the Board.
Ms. Adams has been self-employed for the last twenty years. She is an artist and
business woman with experience in motivational speaking, teaching, sales and
marketing. In 2003 Ms. Adams was given the designation of Senior Signature
status with the Federation of Canadian Artists. In 2002 she was given Associate
status with the Federation of Canadian Artists, and in 1998 given Signature
status with the Federation of Canadian Artists.
Significant Employees
None.
Family Relationships
Gaye Adams and Gregory Adams are mother and son.
Involvement in Certain Legal Proceedings
None.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities and Exchange Act of 1934 requires any person who
is a director or executive officer or who beneficially holds more than ten
percent (10%) of any class of our securities which have been registered with the
Securities and Exchange Commission, to file reports of initial ownership and
changes in ownership with the Securities and Exchange Commission. These persons
are also required under the regulations of the Securities and Exchange
Commission to furnish us with copies of all Section 16(a) reports they file.
To our knowledge, based solely on our review of the copies of the Section 16(a)
reports furnished to us and a review of our shareholders of record for the
fiscal year ended November 30, 2008, there were no filing delinquencies.
26
Code of Ethics
We have not yet prepared a written code of ethics and employment standards. We
have only recently commenced operations. We expect to implement a Code of Ethics
during the current fiscal year.
Corporate Governance; Audit Committee Financial Expert
We currently do not have an audit committee financial expert or an independent
audit committee expert due to the fact that our Board of Directors currently
does not have an independent audit committee. Our Board of Directors currently
has only one (1) independent member, and thus, does not have the ability to
create a proper independent audit committee.
ITEM 10. EXECUTIVE COMPENSATION
The Executive Officers have not received any compensation since the date of
incorporation of our Company, and we did not accrue any compensation. There are
no securities authorized for issuance under any equity compensation plan, or any
options, warrants, or rights to purchase our common stock.
Compensation of Directors
We do not compensate our directors for their time spent on behalf of our
Company, but they are entitled to receive reimbursement for all out of pocket
expenses incurred for attendance at our Board of Directors meetings.
Pension and Retirement Plans
Currently, we do not offer any annuity, pension or retirement benefits to be
paid to any of our officers, directors or employees, in the event of retirement.
There are also no compensatory plans or arrangements with respect to any
individual named above which results or will result from the resignation,
retirement or any other termination of employment with our company, or from a
change in the control of our Company.
Employment Agreements
We do not have written employment agreements with any of our key employees.
Audit Committee
Presently the Board of Directors is performing the duties that would normally be
performed by an audit committee. We intend to form a separate audit committee,
and are seeking potential independent directors. We are seeking experienced
business people and plan to appoint an individual qualified as an audit
committee financial expert.
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED STOCKHOLDER MATTERS
The following table sets forth certain information, as of January 31, 2009 with
respect to any person (including any "group." as that term is used in Section
13(d)(3) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act")) who is known to the Company to be the beneficial owner of more than five
percent of any class of the Company's voting securities, and as to those shares
of the Company's equity securities beneficially owned by each its director, the
executive officers of the company and all of its directors and executive
officers of the Company and all of its directors and executive officers as a
group. Unless otherwise specified in the table below, such information, other
than information with respect to the directors and officers of the Company, is
based on a review of statements filed, with the Securities and Exchange
commission (the "Commission") pursuant to Sections 13 (d), 13 (f), and 13 (g) of
the Exchange Act with respect to the Company's Common Stock. As of November 30,
2008, there were 3,200,000 shares of Common Stock outstanding.
The number of shares of Common Stock beneficially owned by each person is
determined under the rules of the Commission and the information is not
necessarily indicative of beneficial ownership for any other purpose. Under such
rules, beneficial ownership includes any shares as to which such person has sole
or shared voting power or investment power and also any shares which the
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individual has the right to acquire within 60 days after the date hereof,
through the exercise of any stock option, warrant or other right. Unless
otherwise indicated, each person has sole investment and voting power (or shares
such power with his or her spouse) with respect to the shares set forth in the
following table. The inclusion herein of any shares deemed beneficially owned
does not constitute an admission of beneficial ownership of those shares.
The table also shows the number of shares beneficially owned as of November 30,
2008 by each of the individual directors and executive officers and by all
directors and executive officers as a group.
==================================================================================================
Title of Name and Address of Beneficial Owner Amount and
Class Nature of Percent of
Beneficial Class(1)
Ownership
- --------------------------------------------------------------------------------------------------
Common Shari Sookarookoff 1,800,000 56.25%
CEO, President & member of the Board of Directors
328 Twin Brooks Dr NW
Edmonton AB, Canada, T6J 6S5
- --------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------
Common Greg Adams 700,000 21.875%
CEO, President & member of the Board of Directors
328 Twin Brooks Dr NW
Edmonton AB, Canada, T6J 6S5
- --------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------
Common Ruth Saunders 0 0.00%
Director
3508 - 48 Street
Edmonton, AB, Canaca, T6L 3R4
- --------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------
Common Directors and officers as a group (3 individuals) 2,500,000 78.125%
==================================================================================================
(1) Percent of Ownership is calculated in accordance with the Securities and
Exchange Commission's Rule 13(d) - 13(d)(1). Based on 3,200,000 shares of common
stock issued and outstanding.
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR
INDEPENDENCE.
We have not entered into any transaction nor are there any proposed transactions
in which any founder, director, executive officer, shareholder of our company or
any member of the immediate family of any of the foregoing had or is to have a
direct or indirect material interest.
ITEM 13. EXHIBITS.
The following is a complete list of exhibits filed as part of this Form 10K.
Exhibit number corresponds to the numbers in the Exhibit table of Item 601 of
Regulation S-B.
Exhibit Index
3.1 Articles of Incorporation(1)
3.2 Bylaws(1)
31.1 Section 302 Certification - Chief Executive Officer.*
31.2 Section 302 Certification - Chief Financial Officer.*
32.1 Certification Pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 -
Chief Executive Officer.*
32.2 Certification Pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 -
Chief Financial Officer.*
* Filed herewith.
(1)Incorporated by reference to our SB-2 Registration Statement, file number
333-133347, filed on April 18, 2006.
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ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
Audit Fees.
The aggregate fees billed by our auditors, for professional services rendered
for the audit of our annual financial statements, and for the reviews of the
financial statements included in our Quarterly Reports on Form 10-QSB during the
fiscal years ended November 30, 2008 and 2007, were $8,050 and $6,750
respectively.
Audit Related Fees.
We incurred nil fees to auditors for audit related fees during the fiscal year
ended November 30, 2008 and 2007.
Tax Fees.
We incurred nil fees to auditors for tax compliance, tax advice or tax
compliance services during the fiscal year ended November 30, 2008 and 2007.
All Other Fees.
We did not incur any other fees billed by auditors for services rendered to our
Company, other than the services covered in "Audit Fees" for the fiscal year
ended November 30, 2008 and 2007.
The Board of Directors has considered whether the provision of non-audit
services is compatible with maintaining the principal accountant's independence.
Since there is no audit committee, there are no audit committee pre-approval
policies and procedures.
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SIGNATURES
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, on this 6th day of March,
2009.
ONLINE ORIGINALS, INC.
Date: May 26, 2009 By: /s/ Shari Sookarookoff
----------------------
Name: Shari Sookarookoff
Title: President/CEO, principal executive
officer, & Director
Date: May 26, 2009 By: /s/ Gregory Adams
-----------------
Name: Gregory Adams
Title: Chief Financial Officer, principal
financial officer and principal
accounting officer, & Director
Date: May 26, 2009 By: /s/ Ruth Saunders
--------------------
Name: Ruth Saunders
Title: Director
30