UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For quarterly period ended July 31, 2009
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 000-53547
TRADEON, INC.
(Exact name of registrant as specified in its charter)
Nevada 26-1548693
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
30 Eliahu Miferrera st. Tel Aviv, Israel 69865
(Address of principal executive offices) (Zip Code)
Telephone: +1 (866) 261-2522
(Registrant's telephone number, including area code)
Not Applicable
(Former name, former address, and former fiscal year,
if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes [X] No [ ]
Indicate by checkmark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer or a smaller reporting company. See
definition of "large accelerated filer," "accelerated filer," and "smaller
reporting company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer [ ] Accelerated filer [ ]
Non-accelerated filer [ ] Smaller reporting company [X]
(Do not check if a smaller reporting company)
Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act). Yes [ ] No [X]
There were 6,794,880 shares of common stock $0.0001 par value per share,
outstanding on September 4, 2009.
TABLE OF CONTENTS
Page
----
PART I. Financial Information:
Item 1. Financial Statements 3
Balance Sheets
Statement of Operations
Statement of Changes in Stockholder's Equity
Statement of Cash Flows
Notes to Financial Statements July 31, 2009
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 8
Item 3. Quantitative and Qualitative Disclosures About
Market Risk 9
Item 4/4T. Controls and Procedures 9
PART II. Other Information:
Item 1. Legal Proceedings 11
Item 1A. Risk Factors 11
Item 2. Unregistered Sales of Equity Securities and Use
of Proceeds 11
Item 3. Defaults Upon Senior Securities 11
Item 4. Submission of Matters to a Vote of Security Holders 11
Item 5. Other Information 11
Item 6. Exhibits 11
Signatures 12
2
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
TradeOn, Inc.
(A Development Stage Company)
BALANCE SHEETS
July 31, October 31,
2009 2008
-------- --------
(Unaudited) (Audited)
ASSETS
CURRENT ASSETS:
Cash in bank $ 40,996 $ 63,847
Prepaid expenses -- --
-------- --------
Total current assets 40,996 63,847
-------- --------
TOTAL ASSETS $ 40,996 $ 63,847
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable and accrued liabilities $ 1,600 $ --
-------- --------
Total current liabilities 1,600 --
STOCKHOLDERS' EQUITY
Preferred stock, par value $0.0001per share,
50,000,000 shares authorized, none outstanding -- --
Common stock, par value $0.0001 per share, 100,000,000 shares
authorized; 6,794,880 shares issued and outstanding 679 679
Additional paid-in capital 70,111 70,111
(Deficit) accumulated during the development stage (31,394) (6,943)
-------- --------
Total stockholders' equity 39,396 63,847
-------- --------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 40,996 $ 63,847
======== ========
The Accompanying Notes Are an Integral Part of these Financial Statements
3
TradeOn, Inc.
(A Development Stage Company)
STATEMENTS OF OPERATIONS
(unaudited)
Cumulative
Three Months Three Months Nine Months Period from December 7, 2007
Ended Ended Ended December 7, 2007 to (Inception) to
July 31, July 31, July 31, July 31, July 31,
2009 2008 2009 2008 2009
---------- ---------- ---------- ---------- ----------
REVENUES $ -- $ -- $ -- $ -- $ --
---------- ---------- ---------- ---------- ----------
EXPENSES:
Organization costs -- -- -- 918 918
Filing fees 80 -- 1,361 -- 1,361
Professional fees 2,100 -- 22,745 -- 28,771
Bank service charges 30 -- 345 -- 345
---------- ---------- ---------- ---------- ----------
Total general and administrative expenses 2,210 -- 24,451 918 31,395
---------- ---------- ---------- ---------- ----------
(LOSS) FROM OPERATIONS (2,210) -- (24,451) (918) (31,395)
OTHER INCOME (EXPENSE) -- -- -- -- --
---------- ---------- ---------- ---------- ----------
INCOME BEFORE INCOME TAXES (2,210) -- (24,451) (918) (31,395)
PROVISION FOR INCOME TAXES -- -- -- -- --
---------- ---------- ---------- ---------- ----------
NET (LOSS) $ (2,210) $ -- $ (24,451) $ (918) $ (31,395)
========== ========== ========== ========== ==========
(LOSS) PER COMMON SHARE:
(Loss) per common share - Basic and Diluted $ -- $ -- $ -- $ --
========== ========== ========== ==========
WEIGHTED AVERAGE NUMBER OF COMMON SHARES
OUTSTANDING - BASIC AND DILUTED 6,794,880 4,000,000 6,794,880 4,000,000
========== ========== ========== ==========
The Accompanying Notes Are an Integral Part of these Financial Statements
4
TradeOn, Inc.
(A Development Stage Company)
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
FOR THE PERIOD FROM INCEPTION (DECEMBER 7, 2007)
THROUGH JULY 31, 2009
(unaudited)
(Deficit)
Accumulated
Common Stock Additional During the
--------------------- Paid-in Development
Shares Amount Capital Stage Totals
------ ------ ------- ----- ------
BALANCE AT INCEPTION -- $ -- $ -- $ -- $ --
Common stock issued for cash 4,000,000 400 518 -- 918
Common stock issued for cash 2,794,880 279 69,593 -- 69,872
Net (loss) for the period -- -- -- (6,943) (6,943)
--------- ------ -------- --------- --------
BALANCE - OCTOBER 30, 2008 6,794,880 $ 679 $ 70,111 $ (6,943) $ 63,847
Net (loss) for the period -- -- -- (24,451) (24,451)
--------- ------ -------- --------- --------
BALANCE - JULY 31, 2009 6,794,880 $ 679 $ 70,111 $ (31,394) $ 39,396
========= ====== ======== ========= ========
The Accompanying Notes Are an Integral Part of these Financial Statements
5
TradeOn, Inc.
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
(unaudited)
Cumulative
Nine Months Period from December 7, 2007
Ended December 7, 2007 to (Inception) to
July 31, July 31, July 31,
2009 2008 2009
-------- -------- --------
OPERATING ACTIVITIES:
Net (loss) $(24,451) $ (918) $(31,395)
Adjustments to reconcile net (loss) to net
cash (used in) operating activities:
Changes in net assets and liabilities-
Prepaid expenses -- -- --
Accounts payable and accrued liabilities 1,600 -- 1,600
-------- -------- --------
NET CASH USED IN OPERATING ACTIVITIES (22,851) (918) (29,794)
-------- -------- --------
INVESTING ACTIVITIES:
NET CASH USED IN INVESTING ACTIVITIES -- -- --
-------- -------- --------
FINANCING ACTIVITIES:
Issuance of common stock -- 26,000 70,790
-------- -------- --------
NET CASH PROVIDED BY FINANCING ACTIVITIES -- 26,000 70,790
-------- -------- --------
NET (DECREASE) INCREASE IN CASH (22,851) 25,082 40,996
CASH - BEGINNING OF PERIOD 63,847 -- --
-------- -------- --------
CASH - END OF PERIOD $ 40,996 $ 25,082 $ 40,996
======== ======== ========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest $ -- $ -- $ --
======== ======== ========
Income taxes $ -- $ -- $ --
======== ======== ========
The Accompanying Notes Are an Integral Part of these Financial Statements
6
TradeOn, Inc.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
July 31, 2009
NOTE 1 - ORGANIZATION AND DESCRIPTION OF BUSINESS
The Company was incorporated under the laws of the state of Nevada on December
7, 2007. The Company has limited operations and in accordance with SFAS #7, is
considered a development stage company and has not yet realized any revenues
from its planned operations.
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.
We have evaluated subsequent events, as defined by Statement of Financial
Accounting Standards (SFAS) No. 165, "Subsequent Events," through the date that
the financial statements were issued on September 4, 2009.
NOTE 2 - CONDENSED FINANCIAL STATEMENTS
The accompanying financial statements have been prepared by the Company without
audit. In the opinion of management, all adjustments (which include only normal
recurring adjustments) necessary to present fairly the financial position,
results of operations, and cash flows at July 31, 2009, and for all periods
presented herein, have been made.
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with accounting principles generally accepted
in the United States of America have been condensed or omitted. It is suggested
that these condensed financial statements be read in conjunction with the
financial statements and notes thereto included in the Company's October 31,
2008 audited financial statements. The results of operations for the period
ended July 31, 2009 is not necessarily indicative of the operating results for
the full year.
NOTE 3 - GOING CONCERN
The Company's financial statements are prepared using generally accepted
accounting principles in the United States of America applicable to a going
concern which contemplates the realization of assets and liquidation of
liabilities in the normal course of business. The Company has not yet
established an ongoing source of revenues sufficient to cover its operating
costs and allow it to continue as a going concern. The ability of the Company to
continue as a going concern is dependent on the Company obtaining adequate
capital to fund operating losses until it becomes profitable. If the Company is
unable to obtain adequate capital, it could be forced to cease operations.
In order to continue as a going concern, the Company will need, among other
things, additional capital resources. Management's plan is to obtain such
resources for the Company by obtaining capital from management and significant
shareholders sufficient to meet its minimal operating expenses and seeking
equity and/or debt financing. However management cannot provide any assurances
that the Company will be successful in accomplishing any of its plans.
The ability of the Company to continue as a going concern is dependent upon its
ability to successfully accomplish the plans described in the preceding
paragraph and eventually secure other sources of financing and attain profitable
operations. The accompanying financial statements do not include any adjustments
that might be necessary if the Company is unable to continue as a going concern.
NOTE 4 - RELATED PARTY TRANSACTIONS
Since December 7, 2007 (Inception) through April 30, 2009, the company paid
$5,510 to its Director, Amit Sachs for consulting services.
7
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
FORWARD LOOKING STATEMENTS
This quarterly report on Form 10-Q contains certain forward-looking statements.
Forward-looking statements may include our statements regarding our goals,
beliefs, strategies, objectives, plans, including product and service
developments, future financial conditions, results or projections or current
expectations. In some cases, you can identify forward-looking statements by
terminology such as "may," "will," "should," "expect," "plan," "anticipate,"
"believe," "estimate," "predict," "potential" or "continue," the negative of
such terms, or other comparable terminology. Such forward-looking statements
appear in this Item 2 - "Management's Discussion and Analysis of Financial
Condition and Results of Operations," and include statements regarding our
expectations regarding our short - and long-term capital requirements and our
business plan and estimated expenses for the coming 12 months. These statements
are subject to known and unknown risks, uncertainties, assumptions and other
factors that may cause actual results to be materially different from those
contemplated by the forward-looking statements. The business and operations of
TradeOn, Inc. are subject to substantial risks, which increase the uncertainty
inherent in the forward-looking statements contained in this report. We
undertake no obligation to release publicly the result of any revision to these
forward-looking statements that may be made to reflect events or circumstances
after the date hereof or to reflect the occurrence of unanticipated events.
Further information on potential factors that could affect our business is
described under the heading "Risks Related To Our Business" in "Risk Factors" in
our registration statement on Form S-1 (File no. 333-156418), which was declared
effective on January 5, 2009. Readers are also urged to carefully review and
consider the various disclosures we have made in this report.
OVERVIEW
We are a development stage company with limited operations and no revenues from
our business operations. We were incorporated under the laws of the state of
Nevada on December 7, 2007.
We are developing and plan to offer a mobile price comparison service for use by
the general public. Our service will enable consumers while out shopping in a
store to compare or look up prices of a certain product by sending a text
message from their cell phone to our system. We have named our system
TradeOnSMS. Our planned system will accept text messages from mobile phones
containing the name or part number of a certain product. Once the message is
received, TradeOnSMS will search the Internet for the best price and retailer
and send back a text message to the mobile phone with the results.
In our management opinion, the Internet has transformed the way consumers buy
goods. Consumers shop online to take advantage of convenience, selection and the
ability to compare prices between different stores. However, consumers have
difficulty making informed purchase decisions while out shopping and being away
from their computer and Internet access.
Our goal is to help consumers make informed purchase decisions by enabling them
to compare products, prices and stores while out shopping. We will generate
revenues from consumers that will subscribe to our service.
Our offices are currently located at 30 Eliahu Miferrera St. Tel Aviv 69865
Israel, which has been donated free of charge from our President and director,
Mr. Amit Sachs.
During the third quarter of 2009, Mr. Sachs continued to develop our TradeOnSMS
system. This process is expected to be an ongoing interactive process for the
next several months.
RESULTS OF OPERATIONS
THREE AND NINE MONTHS ENDED JULY 31, 2009 AND COMPARED TO THREE MONTHS ENDED
JULY 31, 2008 AND THE PERIOD FROM INCEPTION TO JULY 31, 2008 AND THE PERIOD FROM
INCEPTION TO JULY 31, 2009
We incurred operating expenses of $2,210 and $24,451 for the three and nine
months ended July 31, 2009 and compared to $0 and $918 for the three months
ended July 31, 2008 and the period from Inception to July 31, 2008. From
inception to July 31, 2009 we have incurred operating expenses of $31,395.
8
Operating expenses increased during the three months and nine months ended July
31, 2009 from the comparative period due to an overall increase in our activity
and increased expenses as a result of being a reporting company.
Significant elements include:
* $1,500 and $5,000 in professional fees related to accounting for the
three and nine months ended July 31, 2009, which increased from $0 as
a result of activities related to becoming a reporting company with
the SEC;
NET LOSS
We incurred a net loss of $2,210and $24,451 for the three and nine months ended
July 31, 2009 and compared to $0 and $918 for the three months ended July 31,
2008 and the period from Inception to July 31, 2008. From inception to July 31,
2009 we have incurred losses of $31,395.
LIQUIDITY AND CAPITAL RESOURCES
To date, we have had negative cash flows from operations and we have been
dependent on sales of our equity securities to meet our cash requirements. We
expect this continue for the foreseeable future. We anticipate that we will have
negative cash flows from operations in the next twelve months period.
As of July 31, 2009, we had working capital of $39,396 compared to $63,847 as of
October 31, 2008. As of July 31, 2009, our total assets consisted of cash of
$40,996, representing a net decrease in cash of 22,851 since October 31, 2008.
There were no financing activities during the three and nine months ended July
31, 2009. Cash used in operating activities during the nine months ended July
31, 2009 amounted to $22,851, mainly represented by net loss of $24,451 adjusted
by changes in accounts payable and accrued liabilities of $1,600. During the
period from December 7, 2007 to July 31, 2008 cash used in operating activities
amounted to $918, cash generated by financing activities amounted to $26,000 and
related to proceeds from issuance of common stock. Cash used in operating
activities during the period from inception to July 31, 2009amounted to $29,794,
represented by a net loss of $31,395, adjusted by changes in accounts payable
and accrued liabilities of $1,600.
How long TradeOn will be able to satisfy its cash requirements depends on how
quickly our company can generate revenue and how much revenue can be generated.
We estimate that our current cash balances will be extinguished prior to the end
of December 2009, provided we do not have any unanticipated expenses. Although
there can be no assurance at present, we plan to be in a position to generate
revenues prior to the end of the year. We must generate at least $15,900 in
revenues in order to fund all expenditures under our 12-months budget.
If we fail to generate sufficient revenues, we will need to raise additional
funds for the future development of our business, or to respond to unanticipated
requirements or expenses. We do not currently have any arrangements for
financing and we can provide no assurance to investors we will be able to find
such financing. There can be no assurance that additional financing will be
available to us, or on terms that are acceptable. Consequently, we may not be
able to proceed with our intended business plans or complete the development and
commercialization of our product.
There are also no plans or expectations to purchase or sell any significant
equipment in the first year of operations.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Not applicable.
ITEM 4T. CONTROLS AND PROCEDURES
As required by Rule 13a-15/15d-15 under the Securities and Exchange Act of 1934,
as amended (the "Exchange Act"), as of July 31, 2009, we have carried out an
evaluation of the effectiveness of the design and operation of our Company's
disclosure controls and procedures.
9
Under the supervision and with the participation of our management, including
our Chief Executive Officer and Chief Financial Officer, we conducted an
assessment of the effectiveness of our internal control over financial reporting
as of July 31, 2009. In making this assessment, our management used the criteria
set forth by the Committee of Sponsoring Organizations of the Treadway
Commission in Internal Control - Integrated Framework, as supplemented by the
COSO publication, Internal Control over Financial Reporting - Guidance for
Smaller Public Companies. Based on this evaluation, our management concluded
that our internal control over financial reporting was effective as of July 31,
2009 based on these criteria.
There have been no changes in the Company's internal control over financial
reporting identified in connection with the evaluation required by paragraph (d)
of Rule 240.15d-15 that occurred during the Company's last fiscal quarter that
has materially affected, or is reasonable likely to materially affect, the
Company internal control over financial reporting.
10
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None.
ITEM 1A. RISK FACTORS
Not applicable.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
None.
ITEM 5. OTHER INFORMATION.
None.
ITEM 6. EXHIBITS
Pursuant to Item 601 of Regulation S-K, the following exhibits are included
herein.
Exhibit Description
------- -----------
31.1 Certification of Principal Executive Officer pursuant to Section 302
of the Sarbanes-Oxley Act of 2002.
31.2 Certification of Principal Financial Officer pursuant to Section 302
of the Sarbanes-Oxley Act of 2002.
32.1 Certification of Principal Executive Officer Pursuant to 18 U.S.C.
Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002.
32.2 Certification of Principal Financial Officer Pursuant to 18 U.S.C.
Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002.
11
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.
TRADEON, INC.
(the Registrant)
Date: September 4, 2009 By: /s/ Amit Sachs
--------------------------------------
Name: Amit Sachs
Title: President and Director
Date: September 4, 2009 By: /s/ Moshe Basson
--------------------------------------
Name: Moshe Basson
Title: Secretary, Treasurer and Director
12