U. S. Securities and Exchange Commission
Washington, D. C. 20549
FORM 10-QSB
(Mark One)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarter ended March 31, 2001
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES
EXCHANGE ACT OF 1934
For the transition period from _______________________ to
_______________________
Commission File No. 000-32229
TEXAS E-SOLUTIONS INC.
(Name of Small Business Issuer in its Charter)
Nevada 76-0616474
(State or Other Jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No)
7720-74th Drive, NE
Marysville, WA USA 98270
(Address of Principal Executive Offices)
(360) 658-5566
Issuer's Telephone Number
N/A
(Former Name or Former Address, if changed since last Report)
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 Company was
required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
(1) Yes X No (2) Yes X No
(ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING
THE PAST FIVE YEARS)
Not applicable
(APPLICABLE ONLY TO CORPORATE ISSUERS)
State the number of shares outstanding of each of the Issuer's
classes of common equity, as of the latest practicable date:
May 10, 2001
Common - 4,500,000 shares
DOCUMENTS INCORPORATED BY REFERENCE
A description of any "Documents Incorporated by Reference" is
contained in Item 6 of this Report.
Transitional Small Business Yes X No
Issuer Format
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
The Financial Statements of the Company required to be filed with
this 10-QSB Quarterly Report were prepared by management and
commence on the following page, together with related Notes. In
the opinion of management, the Financial Statements fairly
present the financial condition of the Company.
TEXAS E-SOLUTIONS INC.
(A Development Stage Company)
INTERIM FINANCIAL STATEMENTS
MARCH 31, 2001
(Unaudited)
Texas E-Solutions Inc.
(A Development Stage Company)
Balance Sheets
(expressed in U.S. dollars)
March June
31, 30,
2001 2000
$ $
(unaudi (audi
ted) ted)
ASSET
License (Note 3) - -
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liability
Accounts payable 1,200 1,200
Due to related party 2,000 2,000
3,200 3,200
Contingent Liability (Note 1)
Stockholders' Equity
Common Stock, 25,000,000 shares authorized 4,500 4,500
with a par value of $0.001; 4,500,000 shares
issued and outstanding
Additional Paid-in Capital 75 75
4,575 4,575
Deficit Accumulated During the Development (7,775) (5,775)
Stage
(3,200) (1,200)
- -
Texas E-Solutions Inc.
(A Development Stage Company)
Statements of Operations
(expressed in U.S. dollars)
Accumulated From
August 19, Nine August 19,
1999 months 1999
(Date of Three months ended (Date of
Inception) ended Inception)
to March March 31 March 31 to March 31
31, 2001 2001 2000 2001 2000
$ $ $ $ $
(unaudited) (unau (unau (unaud (unaudited)
dited) dited) ited)
Revenue - - - - -
Expenses
Amortization of 500 - - - 500
license
Audit and 2,000 2,000 - 2,000 -
accounting
License written- 1,500 - - - 1,500
off
Organizational 2,575 - - - 2,575
expenses
Transfer agent 1,200 - - - 1,200
7,775 2,000 2,000 5,775
Net loss for the (7,775) (2,000) - (2,000) (5,775)
period
Texas E-Solutions Inc.
(A Development Stage Company)
Statements of Cash Flows
(expressed in U.S. dollars)
From August
Nine Months 19, 1999
Ended (Date of
March 31, Inception)
2001 to March 31,
$ 2000
(unaudited) $
(unaudited)
Cash Flows to Operating Activities
Net loss (2,000) (5,775)
Non-cash Items
Expenses not paid with cash - 2,575
Due to a related party 2,000 -
Accounts payable - 1,200
Amortization of license - 500
License written-off - 1,500
Net Cash Used by Operating - -
Activities
Cash Flows from Financing - -
Activities
Net Cash Provided by Financing - -
Activities
Cash Flows from Investing - -
Activities
Net Cash Provided by Investing - -
Activities
Change In Cash - -
Cash - Beginning of Period - -
Cash - End of Period - -
Non-Cash Financing Activities
A total of 2,500,000 shares were - 2,500
issued at a fair market value of
$0.001 per share for
organizational expenses
A total of 2,000,000 shares were - 2,000
issued at a fair market value of
$0.001 per share for the
acquisition of a License (Note 3)
Organization costs paid for by a 75
director for no consideration
treated as additional paid in
capital
- 4,575
Supplemental Disclosures
Interest paid - -
Income tax paid - -
Texas E-Solutions Inc.
(A Development Stage Company)
Notes to the Financial Statements
(expressed in U.S. dollars)
1.Development Stage Company
Texas E-Solutions Inc. herein (the "Company") was incorporated
in the State of Nevada, U.S.A. on August 19, 1999. The Company
acquired a license to market and distribute a product in the
States of New Hampshire and Vermont. As discussed in Note 3,
this license is in jeopardy and the Company has retained the
right to sue the vendor. As a replacement for this license,
the Company was granted additional rights to market and
distribute vitamins, minerals, nutritional supplements, and
other health and fitness products for North Texas. The grantor
of the license offers these products for sale from various
suppliers on their Web Site. See Note 4 regarding related
party transactions.
In a development stage company, management devotes most of its
activities in investigating business opportunities. Planned
principal activities have not yet begun. The ability of the
Company to emerge from the development stage with respect to
any planned principal business activity is dependent upon its
successful efforts to raise additional equity financing and
find an appropriate merger candidate. There is no guarantee
that the Company will be able to raise any equity financing or
find an appropriate merger candidate. There is substantial
doubt regarding the Company's ability to continue as a going
concern.
A 10SB Registration Statement was filed on January 17, 2001
which automatically went effective on March 18, 2001.
2.Summary of Significant Accounting Policies
(a) Year end
The Company's fiscal year end is June 30.
(b) Licenses
Costs to acquire licenses are capitalized as incurred. The
carrying value of the License is evaluated in each reporting
period to determine if there were events or circumstances
which would indicate a possible inability to recover the
carrying amount. Such evaluation is based on various
analyses including assessing the Company's ability to bring
the commercial applications to market, related profitability
projections and undiscounted cash flows relating to each
application which necessarily involves significant
management judgment.
(c) Cash and Cash Equivalents
The Company considers all highly liquid instruments with a
maturity of three months or less at the time of issuance to
be cash equivalents.
(d) Use 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 and liabilities and disclosure of
contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues
and expenses during the periods. Actual results could differ
from those estimates.
(e) Interim Financial Statements
These interim unaudited financial statements have been
prepared on the same basis as the annual financial
statements and in the opinion of management, reflect all
adjustments, which include only normal recurring
adjustments, necessary to present fairly the Company's
financial position, results of operations and cash flows for
the periods shown. The results of operations for such
periods are not necessarily indicative of the results
expected for a full year or for any future period.
3. Licenses
(a) On August 20, 1999 the Company acquired a license for a
product. The Company has the exclusive right to distribute
and market the product under a private label in the States
of New Hampshire and Vermont for a period of three years
expiring August 20, 2002. The Company issued 2,000,000
shares at a fair market value of $.001 or $2,000. The shares
were issued to the licensor who are members of a partnership
and whose general partner is also a spouse of a director and
officer of the Company.
The license was to be amortized to operations over one year
starting September 1, 1999.
The Company's right to use this license was in jeopardy due
to a lawsuit between the vendor of the license and the
original owner. As a result, the unamortized balance of
$1,500 has been written-off to operations. The Company and
its shareholder have the right to sue for breach of
contract.
(b) As a replacement for the above license, at no additional
cost, the Company was granted additional rights to market
vitamins, minerals, nutritional supplements and other health
and fitness products through the Grantor's Web Site. The
Company desires to market these products to medical
practitioners, alternative health professionals, martial
arts studios and instructors, sports and fitness trainers,
other health and fitness practitioners, school and other
fund raising programs and other similar types of customers
for North Texas. The license was acquired on February 14,
2000 for a term of three years. The Company must pay an
annual fee of $500 for maintenance of the Grantor's Web Site
commencing on the anniversary date. The Grantor of the
license retains 50% of the profits.
4.Related Party Transactions
The Licenses referred to in Note 3 were sold to the Company by
a partnership whose general manager is the spouse of the
Secretary/Treasurer of the Company and a director for
consideration of 2,000,000 shares having a total fair market
value of $2,000, being the transferor's cost of such license.
These shares were paid evenly to the ten partners. The
replacement license was also owned by the same partnership.
A director paid $2,000 in audit and accounting fees on behalf
of the Company. This amount is unsecured, non-interest bearing
and due on demand.
Item 2. Management's Discussion and Analysis or Plan of
Operation.
The following discussion and analysis of Texas E-Solutions,
Inc.'s financial condition and results of operations should be
read in conjunction with the Financial Statements and
accompanying notes and the other financial information appearing
elsewhere in this Form 10-QSB. This Form 10-QSB contains, in
addition to historical information, forward-looking statements
that involve risks and uncertainties. Texas E-Solutions, Inc.'s
actual results could differ materially from the results discussed
in the forward-looking statements. Factors that could cause or
contribute to such differences include those discussed below, as
well as those discussed elsewhere in this Form 10-QSB.
Results of Operations
During the period from August 19, 1999 (date of inception)
through March 31, 2001, Texas E-Solutions, Inc. has engaged in no
significant operations other than filing required documents to be
a reporting issuer under the Securities Act and, acquisition of
the rights to market Vitamineralherb products. No revenues were
received by Texas E-Solutions, Inc. during this period.
For the current fiscal year, Texas E-Solutions, Inc. anticipates
incurring a loss as a result of expenses associated with
registration under the Securities Act of 1934, and expenses
associated with setting up a company structure to begin
implementing its business plan. Texas E-Solutions, Inc.'s
business plan is to determine the feasibility of marketing the
Vitamineralherb products in various markets, and, if the products
prove to be in demand, begin marketing and selling
Vitamineralherb products.
Liquidity
Texas E-Solutions, Inc. remains in the development stage and,
since inception, has experienced no significant change in
liquidity or capital resources or shareholders' equity.
Consequently, Texas E-Solutions, Inc.'s balance sheet as of March
31, 2001, reflects total assets of $0.00.
Texas E-Solutions, Inc. expects to carry out its plan of business
as discussed above. Texas E-Solutions, Inc. has no immediate
expenses, other than costs associated with filing required
documents to be a reporting issuer under the Securities Act and
the $3,775 of organizational and transfer agent expenses incurred
and paid by the initial shareholders on behalf of the Company.
Mr. Stephen Holmes will serve in his capacity as an officer and
director of Texas E-Solutions, Inc. without compensation until a
market is developed for the Vitamineralherb products.
Texas E-Solutions, Inc.'s business plan is to determine the
feasibility of selling Vitamineralherb.com products to targeted
markets. Should Texas E-Solutions, Inc. determine that its
business plan is feasible, it intends to employ sales people to
call on medical professionals, alternative health professionals,
martial arts studios and instructors, sports and fitness
trainers, other health and fitness professionals, school and
other fund raising programs and other similar types of customers
to interest these professionals in selling to their clients high-
quality, low-cost vitamins, minerals, nutritional supplements,
and other health and fitness products. These professionals would
sell the products to their clients via the Internet.
In order to determine the feasibility of its business plan, Texas
E-Solutions, Inc. plans, during the next six to twelve months, to
conduct research into these various potential target markets.
Should Texas E-Solutions, Inc. determine that the exploitation of
the license is feasible, it will engage salespeople to market the
products. Based primarily on discussions with the licensor, Texas
E-Solutions, Inc. believes that during its first operational
quarter, it will need a capital infusion of approximately $90,000
to achieve a sustainable sales level where ongoing operations can
be funded out of revenues. This capital infusion is
intended to cover costs of advertising, hiring and paying two
salespeople, and administrative expenses. In addition, Texas E-
Solutions, Inc. will need approximately $260,000 in the event it
determines that its market will not pay in advance and it will
have to extend credit.
In addition, Texas E-Solutions, Inc. may engage in a combination
with another business. Texas E-Solutions, Inc. cannot predict the
extent to which its liquidity and capital resources will be
diminished prior to the consummation of a business combination or
whether its capital will be further depleted by the operating
losses (if any) of the business entity with which Texas E-
Solutions, Inc. may eventually combine. Texas E-Solutions, Inc.
has engaged in no discussions concerning potential business
combinations, and has not entered into any agreement for such a
combination.
Texas E-Solutions, Inc. will need additional capital to carry out
its business plan. No commitments to provide additional funds
have been made by management or other shareholders. Accordingly,
there can be no assurance that any additional funds will be
available on terms acceptable to Texas E-Solutions, Inc. or at
all. Texas E-Solutions, Inc. has no commitments for capital
expenditures.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
None; not applicable.
Item 2. Changes in Securities.
None; not applicable.
Item 3. Defaults Upon Senior Securities.
None; not applicable.
Item 4. Submission of Matters to a Vote of Security Holders.
None; not applicable.
Item 5. Other Information.
None; not applicable.
Item 6. Exhibits and Reports on Form 8-K.
None.
DOCUMENTS INCORPORATED BY REFERENCE
None.
SIGNATURES
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.
Texas E-Solutions Inc.
Date: May 10, 2001 By /s/ Stephen D.Holmes
Stephen D.Holmes,
President