UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
(Mark One)
[X] Quarterly report pursuant Section 13 or 15(d) of the Securities Exchange
Act of 1934
For the quarterly period ended June 30, 2011
[ ] Transition report pursuant Section 13 or 15(d) of the Securities Exchange
Act of 1934
For the transition period from _________ to _________.
Commission file number 333-167227
WINECOM INC.
(Exact name of registrant as specified in its Charter)
Nevada 26-2944840
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
2 Duchifat Street, Kibbutz Dovrat, D.N Emek Yezreel Israel 19325
(Address of principal executive offices) (Zip Code)
011 (972) 57-946-2208
(Registrant's telephone number, including area code)
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 [ ] No [X]
Indicate by check mark whether the registrant has submitted electronically and
posted on its corporate Web site, if any, every Interactive Data File required
to be submitted and posted pursuant to Rule 405 of Regulation S-T (ss. 232.405
of this chapter) during the preceding 12 months (or for such shorter period that
the registrant was required to submit and post such files). Yes [ ] No [ ]
Indicate by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
the definitions of "large accelerated filer," "accelerated filer" and "smaller
reporting company" in Rule 12b-2 of the Exchange Act. (Check one):
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 [X] No [ ]
As of August 11, 2011 the Company had outstanding 5,000,000 shares of common
stock, par value $0.0001.
TABLE OF CONTENTS
Part I - FINANCIAL INFORMATION................................................ 3
Item 1. Financial Statements............................................ 3
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations...........................................11
Item 3. Quantitative and Qualitative Disclosures About Market Risk......14
Item 4. Controls and Procedures.........................................14
PART II - OTHER INFORMATION...................................................14
Item 1. Legal Proceedings...............................................14
Item 1A. Risk Factors....................................................14
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.....14
Item 3. Defaults Upon Senior Securities.................................14
Item 4. Removed and Reserved............................................15
Item 5. Other Information...............................................15
Item 6. Exhibits........................................................15
SIGNATURES....................................................................16
2
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
WINECOM INC
(A Development Stage Company)
Condensed Balance Sheets
June 30, December 31,
2011 2010
-------- --------
(Unaudited) (Audited)
ASSETS
CURRENT ASSETS:
Cash $ 24,275 $ 164
Deferred offering costs -- 27,253
-------- --------
TOTAL CURRENT ASSETS 24,275 27,417
-------- --------
TOTAL ASSETS $ 24,275 $ 27,417
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Loans payable - director $ 2,818 $ 2,818
Accounts payable 14,840 9,213
-------- --------
TOTAL CURRENT LIABILITIES 17,658 12,031
-------- --------
TOTAL LIABILITIES 17,658 12,031
-------- --------
STOCKHOLDERS' EQUITY:
Preferred Stock, 50,000,000 shares authorized, par value $0.0001,
no shares issued and outstanding
Common Stock, 100,000,000 shares authorized, par value $0.0001,
5,000,000 and 4,000,000 shares issued and outstanding, respectively 500 400
Additional paid in capital 31,713 19,600
Deficit accumulated during the development stage (25,596) (4,614)
-------- --------
TOTAL STOCKHOLDERS' EQUITY 6,617 15,386
-------- --------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 24,275 $ 27,417
======== ========
The accompanying notes are an integral part of these
condensed financial statements.
3
WINECOM INC
(A Development Stage Company)
Condensed Statements of Operations (Unaudited)
Three Months Ended Six Months Ended July 1, 2008
June 30, June 30, (Inception) to
------------------------- -------------------------- June 30,
2011 2010 2011 2010 2011
---------- ---------- ---------- ---------- ----------
REVENUE $ -- $ -- $ -- $ -- $ --
---------- ---------- ---------- ---------- ----------
EXPENSES:
General and administrative 15,091 732 20,982 776 25,596
---------- ---------- ---------- ---------- ----------
Loss before income taxes (15,091) (732) (20,982) (776) (25,596)
Provision for income taxes -- -- -- -- --
---------- ---------- ---------- ---------- ----------
Net loss $ (15,091) $ (732) $ (20,982) $ (776) $ (25,596)
========== ========== ========== ========== ==========
Basic and Diluted:
Loss per common share a a a a
---------- ---------- ---------- ----------
Weighted Average Number of Common Shares 5,000,000 4,000,000 4,651,934 4,000,000
========== ========== ========== ==========
----------
a = Less than ($0.01) per share
The accompanying notes are an integral part of these
condensed financial statements.
4
WINECOM INC
(A Development Stage Company)
Condensed Statements of Stockholders' Equity (Deficit) (Unaudited)
Deficit
Common Stock Accumulated Total
-------------------- Stock During the Stockholders'
Number of Paid in Subscriptions Development Equity
Shares Amount Capital Receivable Stage (Deficit)
------ ------ ------- ---------- ----- ---------
July 1, 2008 (Inception) -- $ -- $ -- $ -- $ -- $ --
Common stock issued to Directors
for cash ($0.005 per share) 4,000,000 400 19,600 (20,000) -- --
Net loss -- -- -- -- (818) (818)
--------- --------- --------- --------- --------- ---------
Balance December 31, 2008 4,000,000 400 19,600 (20,000) (818) (818)
Net loss -- -- -- -- (1,250) (1,250)
--------- --------- --------- --------- --------- ---------
Balance December 31, 2009 4,000,000 400 19,600 (20,000) (2,068) (2,068)
Stock subscriptions received -- -- -- 20,000 -- 20,000
Net loss -- -- -- -- (2,546) (2,546)
--------- --------- --------- --------- --------- ---------
Balance December 31, 2010 4,000,000 400 19,600 -- (4,614) 15,386
Common stock issued for cash, net of
offering costs ($0.04 per share) 1,000,000 100 12,113 -- -- 12,213
Net loss -- -- -- -- (20,982) (20,982)
--------- --------- --------- --------- --------- ---------
Balance June 30, 2011 5,000,000 $ 500 $ 31,713 $ -- $ (25,596) $ 6,617
========= ========= ========= ========= ========= =========
The accompanying notes are an integral part of these
condensed financial statements.
5
WINECOM INC
(A Development Stage Company)
Condensed Statements of Cashflows (Unaudited)
Six Months Ended July 1, 2008
June 30, (Inception) to
--------------------------- June 30,
2011 2010 2011
-------- -------- --------
OPERATING ACTIVITIES:
Net loss $(20,982) $ (776) $(25,596)
Adjustments To Reconcile Net Loss To Net Cash
Used By Operating Activities
Increase in accounts payable 5,627 -- 14,840
-------- -------- --------
NET CASH USED BY OPERATING ACTIVITIES (15,355) (776) (10,756)
-------- -------- --------
INVESTING ACTIVITIES:
NET CASH USED BY INVESTING ACTIVITIES -- -- --
-------- -------- --------
FINANCING ACTIVITIES:
Proceeds from loans - director -- -- 2,818
Payment of offering costs (534) (8,675) (27,787)
Proceeds from issuance of common stock 40,000 20,000 60,000
-------- -------- --------
NET CASH PROVIDED BY FINANCING ACTIVITIES 39,466 11,325 35,031
-------- -------- --------
Net Increase in Cash 24,111 10,549 24,275
Cash, Beginning of Period 164 750 --
-------- -------- --------
Cash, End of Period $ 24,275 $ 11,299 $ 24,275
======== ======== ========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid during the period for:
Interest $ 66 $ -- $ 66
======== ======== ========
Income Taxes $ -- $ -- $ --
======== ======== ========
The accompanying notes are an integral part of these
condensed financial statements.
6
WINECOM INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE CONDENSED FINANCIAL STATEMENTS
SIX MONTHS ENDED JUNE 30, 2011
NOTE 1. ORGANIZATION AND BASIS OF PRESENTATION
In the opinion of management, the accompanying unaudited condensed financial
statements of Winecom Inc. (the "Company") contain all adjustments necessary to
present fairly the Company's financial position as of June 30, 2011 and December
31, 2010 and its results of operations for the three and six months ended June
30, 2011 and 2010 and cash flows for the six months ended June 30, 2011 and
2010. The accompanying unaudited interim financial statements have been prepared
in accordance with instructions to Form 10-Q and therefore do not include all
information and footnotes required by accounting principles generally accepted
in the United States of America. The results of operations for the six months
ended June 30, 2011 are not necessarily indicative of the results to be expected
for the full year.
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
USE OF ESTIMATES
The preparation of financial statements in conformity with U.S. generally
accepted accounting principles requires management to make estimates and
assumptions that affect the amounts reported in the financial statements. The
Company bases its estimates on historical experience, management expectations
for future performance, and other assumptions as appropriate. The Company
re-evaluates its estimates on an ongoing basis; actual results may vary from
those estimates.
CASH AND CASH EQUIVALENTS
The Company considers all highly liquid investments with maturity of three
months or less when purchased to be cash equivalents.
DEFERRED OFFERING COSTS
Direct costs incurred in connection with the issuance of equity are capitalized
and recorded in paid in capital during the period when proceeds are received.
FAIR VALUE OF FINANCIAL INSTRUMENTS
The carrying value of the Company's financial instruments, consisting of
accounts payable and loan payable - director 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.
INCOME TAXES
A deferred tax asset or liability is recorded for all temporary differences
between financial and tax reporting and net operating loss carry forwards.
Deferred tax expense (benefit) results from the net change during the year of
deferred tax assets and liabilities.
7
Deferred tax assets are reduced by a valuation allowance when, in the opinion of
management, it is more likely than not that some portion or all of the deferred
tax assets will not be realized. Deferred tax assets and liabilities are
adjusted for the effects of changes in tax laws and rates on the date of
enactment.
The Company's practice is to recognize interest accrued related to unrecognized
tax benefits in interest expense and penalties in operating expenses. As of June
30, 2011 and December 31, 2010, the Company had no accrued interest or
penalties.
EARNINGS PER SHARE
The basic earnings (loss) per share is calculated by dividing our net income
available to common shareholders by the weighted average number of common shares
during the year. The diluted earnings (loss) per share is calculated by dividing
our net income (loss) available to common shareholders by the diluted weighted
average number of shares outstanding during the year. The diluted weighted
average number of shares outstanding is the basic weighted number of shares
adjusted as of the first of the year for any potentially dilutive debt or
equity.
SOFTWARE DEVELOPMENT COSTS
Software development costs representing capitalized costs of design,
configuration, coding, installation and testing of the Company's website up to
its initial implementation. Upon implementation, the asset will be amortized to
expense over its estimated useful life of three years using the straight-line
method. Ongoing website post-implementation costs of operation, including
training and application maintenance, will be charged to expense as incurred. As
of June 30, 2011, the Company has yet to incur software development costs as all
development has been performed by the Company's officers.
RECENTLY ISSUED ACCOUNTING STANDARDS
In October 2009, the FASB issued guidance on "Multiple Deliverable Revenue
Arrangements," updating ASC 605 "Revenue Recognition." This standard provides
application guidance on whether multiple deliverables exist, how the
deliverables should be separated and how the consideration should be allocated
to one or more units of accounting. This update establishes a selling price
hierarchy for determining the selling price of a deliverable. The selling price
used for each deliverable will be based on vendor-specific objective evidence,
if available, third-party evidence if vendor-specific objective evidence is not
available, or estimated selling price if neither vendor-specific or third-party
evidence is available. The guidance is effective prospectively for revenue
arrangements entered into or materially modified in fiscal years beginning on or
after June 15, 2010. The Company's adoption of this guidance did not have an
impact on its financial statements and disclosures.
In October 2009, the FASB issued ASC 985-605, "Software Revenue Recognition."
This guidance changes the accounting model for revenue arrangements that include
both tangible products and software elements that are "essential to the
functionality," and scopes these products out of current software revenue
guidance. The new guidance will include factors to help companies determine what
software elements are considered "essential to the functionality." The
amendments will now subject software-enabled products to other revenue guidance
and disclosure requirements, such as guidance surrounding revenue arrangements
with multiple deliverables. The amendments in this guidance are effective
prospectively for revenue arrangements entered into or materially modified in
the fiscal years beginning on or after June 15, 2010. Early application is
permitted. The Company's adoption of this guidance did not have an impact on its
financial statements and disclosures.
8
In April 2010, the FASB issued ASU No. 2010-17, Revenue Recognition--Milestone
Method (Topic 605): Milestone Method of Revenue Recognition. This ASU codifies
the consensus reached in EITF Issue No. 08-9, "Milestone Method of Revenue
Recognition." The amendments to the Codification provide guidance on defining a
milestone and determining when it may be appropriate to apply the milestone
method of revenue recognition for research or development transactions.
Consideration that is contingent on achievement of a milestone in its entirety
may be recognized as revenue in the period in which the milestone is achieved
only if the milestone is judged to meet certain criteria to be considered
substantive. Milestones should be considered substantive in their entirety and
may not be bifurcated. An arrangement may contain both substantive and
nonsubstantive milestones, and each milestone should be evaluated individually
to determine if it is substantive. ASU 2010-17 is effective on a prospective
basis for milestones achieved in fiscal years, and interim periods within those
years, beginning on or after June 15, 2010. Early adoption is permitted. If a
vendor elects early adoption and the period of adoption is not the beginning of
the entity's fiscal year, the entity should apply 2010-17 retrospectively from
the beginning of the year of adoption. The Company's adoption of this guidance
did not have an impact on its financial statements.
Management does not believe that any other recently issued, but not yet
effective, accounting standards if currently adopted would have a material
effect on the accompanying consolidated financial statements.
NOTE 3. INCOME TAXES
The Company uses the liability method, where deferred tax assets and liabilities
are determined based on the expected future tax consequences of temporary
differences between the carrying amounts of assets and liabilities for financial
and income tax reporting purposes. Since its inception through June 30, 2011,
the Company has incurred net losses and, therefore, has no tax liability. The
net deferred tax asset generated by the loss carry-forward has been fully
reserved. The cumulative net operating loss carry-forward is approximately
$25,596 and will expire 20 years from the date the loss was incurred.
NOTE 4. STOCKHOLDER'S EQUITY
AUTHORIZED
The Company is authorized to issue 100,000,000 shares of $0.0001 par value
common stock and 50,000,000 shares of preferred stock, par value $0.0001. All
shares of common stock have equal voting rights, are non-assessable and have one
vote per share. Voting rights are not cumulative and, therefore, the holders of
more than 50% of the common stock could, if they choose to do so, elect all of
the directors of the Company.
ISSUED AND OUTSTANDING
On July 1, 2008, the Company issued 4,000,000 shares of common stock to its
directors for cash consideration of $20,000. The cash proceeds were received
during the year ended December 31, 2010.
During the six months ended June 30, 2011, the Company sold 1,000,000 shares of
common stock for proceeds of $39,467, net of transaction costs of $533. The
Company offset these amounts by $27,253 included in deferred offering costs on
the consolidated balance sheet as of December 31, 2010.
9
NOTE 5. RELATED PARTY TRANSACTIONS
As of December 31, 2010 and June 30, 2011 the Company owed its officers $2,818
for amounts advanced by the officers. These amounts are non-interest bearing and
due on demand.
During 2008, the Company issued 4,000,000 shares of common stock to its
directors for cash consideration. See Note 4.
NOTE 6. GOING CONCERN
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. The Company has incurred net losses
for the period from inception (July 1, 2008) through June 30, 2011 totaling
$25,596. While the Company has cash of $24,275 as of June 30, 2011, it has never
generated revenues, there can be no assurance that revenues will ever be
generated, and the Company does not have sufficient working capital to implement
its business plan to its fullest potential. This condition raises substantial
doubt about the Company's ability to continue as a going concern. The Company's
continuation as a going concern is dependent on its ability to meet its
obligations, to obtain additional financing as may be required and ultimately to
attain profitability. The financial statements do not include any adjustments
that might result from the outcome of this uncertainty.
10
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
This discussion and analysis should be read in conjunction with the accompanying
Condensed Financial Statements and related notes. Our discussion and analysis of
our financial condition and results of operations are based upon our condensed
financial statements, which have been prepared in accordance with accounting
principles generally accepted in the United States. The preparation of financial
statements in conformity with accounting principles generally accepted in the
United States of America requires us to make estimates and assumptions that
affect the reported amounts of assets and liabilities, disclosure of any
contingent liabilities at the financial statement date and reported amounts of
revenue and expenses during the reporting period. On an on-going basis we review
our estimates and assumptions. Our estimates are based on our historical
experience and other assumptions that we believe to be reasonable under the
circumstances. Actual results are likely to differ from those estimates under
different assumptions or conditions. Our critical accounting policies, the
policies we believe are most important to the presentation of our financial
statements and require the most difficult, subjective and complex judgments, are
outlined below in "Critical Accounting Policies," and have not changed
significantly.
FORWARD-LOOKING STATEMENTS
Certain statements made in this report may constitute "forward-looking
statements on our current expectations and projections about future events".
These forward-looking statements involve known or unknown risks, uncertainties
and other factors that may cause the actual results, performance, or
achievements of the Company to be materially different from any future results,
performance or achievements expressed or implied by the forward-looking
statements. In some cases you can identify forward-looking statements by
terminology such as "may," "should," "potential," "continue," "expects,"
"anticipates," "intends," "plans," "believes," "estimates," and similar
expressions. These statements are based on our current beliefs, expectations,
and assumptions and are subject to a number of risks and uncertainties. Although
we believe that the expectations reflected-in the forward-looking statements are
reasonable, we cannot guarantee future results, levels of activity, performance
or achievements. These forward-looking statements are made as of the date of
this report, and we assume no obligation to update these forward-looking
statements whether as a result of new information, future events, or otherwise,
other than as required by law. In light of these assumptions, risks, and
uncertainties, the forward-looking events discussed in this report might not
occur and actual results and events may vary significantly from those discussed
in the forward-looking statements.
GENERAL
The following discussion and analysis should be read in conjunction with our
financial statements and related footnotes for the year ended December 31, 2010
included in our Form 10-K/A filed with the Securities and Exchange Commission on
March 16, 2011. The discussion of results, causes and trends should not be
construed to imply any conclusion that such results or trends will necessarily
continue in the future.
OVERVIEW
Winecom Inc. was incorporated under the laws of the state of Nevada on July 1,
2008 and is engaged in the development of an Internet social website that caters
to wine lovers.
Our offices are currently located at 2 Duchifat Street, Kibbutz Dovrat, D.N Emek
Yezreel 19325, Israel. Our telephone number is Tel: 011 (972) 57-946-2208. We
have a website at www.winecom.ning.com,. From our inception on July 1, 2008 to
October 2008, we focused primarily on organizational matters. Due to the
continuing financial crisis in 2008 we suspended our operations in October 2008,
resuming them in September 2009. Since September 2009 we have been developing
our website.
11
We are developing and plan to offer a social networking website that focuses on
building online communities of wine lovers. Our website will allow wine lovers
to chat, post pictures/videos, share wine expertise and experiences, create and
share events, and manage their wine collections. Our website, available at
winecom.ning.com, is accessible but is still a work-in-progress and in the
development stage..
In our management's opinion the emerging alternatives to general social
networking websites are niche social networking sites which are social networks
targeted at a specific audience. By targeting a specific audience, niche social
networks will be able to create a strong and lasting bond among their users. We
believe, although no assurance can be given, that our plan to offer a niche
social networking website for wine lovers is timely given the current market
conditions.
From July 1, 2008 (inception) to June 30, 2011, we have incurred accumulated net
losses of $25,596. As of June 30, 2011, we had $24,276 in current assets and
current liabilities of $17,658. Our auditors' report on the financial statements
for the year ended December 31, 2010 included a going concern opinion. This
means that our auditors believe there is substantial doubt as to whether we can
continue as an ongoing business for the next twelve months. We do not anticipate
that we will generate revenues at least until we have completed and launched our
website.
During the first quarter of 2011, we sold 1,000,000 shares of common stock for
net proceeds of $39,466. The Company previously incurred and additional $27,253
of deferred offering costs during the year ended December 31, 2010, resulting in
net proceeds of $12,213.
During the six months ended June 30, 2011 we completed the integration of
Facebook and Twitter into our user sign-up process, delivering to existing
Facebook or Twitter users a streamlined method of website registration. Users
with Facebook or Twitter accounts will now be able to join the Winecom community
without the need to register separately through the Winecom site. We have also
set up photo importing from Flickr, which allows members to easily import any
public photos they have on Flickr to our website.
RESULTS OF OPERATIONS
COMPARISON OF THE SIX MONTHS ENDED JUNE 30, 2011 AND 2010
OPERATING EXPENSES
The Company incurred $20,982 of operating expenses during the six months ended
June 30, 2011 compared to $776 incurred during the six months ended June 30,
2010. The Company's expenses in 2011 included $10,507 of professional fees
related to the filing of financial reports with the SEC, $7,500 of consulting
services related to various matters concerning the Company's publicly company
status, and $1,950 of travel expenses.
COMPARISON OF THE THREE MONTHS ENDED JUNE 30, 2011 AND 2010
OPERATING EXPENSES
The Company incurred $15,091 of operating expenses during the three months ended
June 30, 2011 compared to $732 incurred during the three months ended June 30,
2010. The Company's expenses in 2011 included $4,588 of professional fees
related to the filing of financial reports with the SEC, $7,500 of consulting
services related to various matters concerning the Company's publicly company
status, and $1,950 of travel expenses.
12
LIQUIDITY AND CAPITAL RESOURCES
At June 30, 2011, we had total current assets of $24,276 (consisting entirely of
cash), total current liabilities of $17,658, and working capital of $6,617
compared to total current assets of $27,417 (consisting of cash of $164 and
deferred offering costs of $27,253), total current liabilities of $12,031, and
working capital of $15,386 as of December 31, 2010.
Historically, we have financed our operations from the sale of common stock and
advances from our director. Net cash provided by financing activities was
$35,032 from July 1, 2008 (date of inception) to June 30, 2011, consisting of
$2,818 loaned to us by our President and Director, Mordechay David and $32,214
of net proceeds from the sale of common stock. The loans from Mr. David are
unsecured, non-interest bearing and due upon demand. Net cash provided by
financing activities during the six months ended June 30, 2011 was $39,467
consisting of $40,000 received from the sale of common stock, reduced by
offering costs of $533. We have no external sources of liquidity from financial
institutions.
We have not yet generated any revenue from our operations. We will require
additional funds to implement our plans. These funds may be raised through
equity financing, debt financing, or other sources, which may result in the
dilution in the equity ownership of our shares. We will also need more funds if
the costs of the development of our website costs greater than we have budgeted.
We will also require additional financing to sustain our business operations if
we are not successful in earning revenues. We currently do not have any
arrangements for financing and we may not be able to obtain financing when
required. Our future is dependent upon our ability to obtain financing, the
successful development of our website, a successful marketing and promotion
program, attracting and, further in the future, achieving a profitable level of
operations. The issuance of additional equity securities by us could result in a
significant dilution in the equity interests of our current stockholders.
Obtaining commercial loans, assuming those loans would be available, will
increase our liabilities and future cash commitments. If we are not able to
raise any funds, we will not have sufficient capital to carry out our business
plan as planned and will likely lack the funds to operate our business at all.
We will require additional funds to maintain our reporting status with the SEC
and remain in good standing with the state of Nevada.
There are no assurances that we will be able to obtain further funds required
for our continued operations. As widely reported, the global and domestic
financial markets have been extremely volatile in recent months. If such
conditions and constraints continue, we may not be able to acquire additional
funds either through credit markets or through equity markets. Even if
additional financing is available, it may not be available on terms we find
favorable. At this time, there are no anticipated sources of additional funds in
place. Failure to secure the needed additional financing will have an adverse
effect on our ability to remain in business.
GOING CONCERN
We have incurred net losses of $25,596 from our inception on July 1, 2008 to
June 30, 2011 and have completed only the preliminary stages of our business
plan. We anticipate incurring additional losses before realizing any revenues
and will depend on additional financing in order to meet our continuing
obligations and ultimately, to attain profitability. Our ability to obtain
additional financing, whether through the issuance of additional equity or
through the assumption of debt, is uncertain. Accordingly, our independent
auditors' report on our financial statements for the year ended December 31,
2010 include an explanatory paragraph regarding concerns about our ability to
continue as a going concern, including additional information contained in the
notes to our financial statements describing the circumstances leading to this
disclosure. The financial statements do not include any adjustments that might
result from the uncertainty about our ability to continue our business.
13
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
We do not expect the adoption of any recently issued accounting pronouncements
to have a significant impact on our net results of operations, financial
position, or cash flows.
OFF-BALANCE SHEET ARRANGEMENTS
We have no off-balance sheet arrangements.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
N/A
ITEM 4. CONTROLS AND PROCEDURES
EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES
The Company's Principal Executive Officer and Principal Financial Officer have
evaluated the effectiveness of the Company's disclosure controls and procedures
(as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of June
30, 2011. Based upon such evaluation, the Principal Executive Officer and
Principal Financial Officer have concluded that, as of June 30, 2011, the
Company's disclosure controls and procedures were effective.
CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING
No change in the Company's internal control over financial reporting occurred
during the quarter ended June 30, 2011, that materially affected, or is
reasonably likely to materially affect, the Company's internal control over
financial reporting.
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
The Company knows of no material, existing or pending legal proceedings against
it. There are no proceedings in which any of the Company's directors, officers
or affiliates, or any registered or beneficial stockholder, is an adverse party
or has a material interest adverse to the Company.
ITEM 1A. RISK FACTORS
This item is not applicable to smaller reporting companies.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
14
ITEM 4. RESERVED
ITEM 5. OTHER INFORMATION
None.
ITEM 6. EXHIBITS
Exhibit
Number Description
------ -----------
31.1 Certification of CEO Pursuant to 18 U.S.C. ss. 1350, Section 302
31.2 Certification of CFO Pursuant to 18 U.S.C. ss. 1350, Section 302
32.1 Certification Pursuant to 18 U.S.C. ss.1350, Section 906
32.2 Certification Pursuant to 18 U.S.C. ss. 1350, Section 906
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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.
WINECOM INC.
Date: August 11, 2011 By: /s/ Merdechay David
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Merdechay David,
President and Director
(Principal Executive Officer)
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