U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
Mark One
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended September 30, 2011
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from ______ to _______
Commission File No. 333 - 165391
VICTORIA INTERNET SERVICES, INC.
(Name of small business issuer in its charter)
Nevada
(State or other jurisdiction of incorporation or organization)
2470 East 16th Street, Brooklyn, NY 11235
(Address of principal executive offices)
(718) 344-0866
(Issuer's telephone number)
Securities registered pursuant to Section Name of each exchange on which
12(b) of the Act: registered:
None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, $0.0000001
(Title of Class)
Indicate by checkmark whether the issuer: (1) has 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[ ]
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 [X] NO [ ]
Indicate by check mark whether the registrant is a large accelerated filed, an
accelerated filer, a non-accelerated filer, or a smaller reporting company.
Large accelerated filer [ ] Accelerated filer [ ]
Non-accelerated filer [ ] Smaller reporting company [X]
Indicate by checkmark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act). Yes [ ] No [X]
Applicable Only to Issuer Involved in Bankruptcy Proceedings During the
Preceding Five Years. N/A
Indicate by checkmark whether the issuer has filed all documents and reports
required to be filed by Section 12, 13 and 15(d) of the Securities Exchange Act
of 1934 after the distribution of securities under a plan confirmed by a court.
Yes [ ] No [ ]
Applicable Only to Corporate Registrants
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the most practicable date:
Class Outstanding as of September 30, 2011
----- ------------------------------------
Common Stock, $0.001 4,675,000
VICTORIA INTERNET SERVICES, INC.
FORM 10-Q
Part 1. FINANCIAL INFORMATION
Item 1. Financial Statements 3
Balance Sheets 3
Statements of Operations 4
Statement of Stockholders' Equity (Deficit) 5
Statements of Cash Flows 6
Notes to Financial Statements 7
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations 12
Item 3. Quantitative and Qualitative Disclosures About Market Risk 14
Item 4. Controls and Procedures 15
Part II. OTHER INFORMATION
Item 1. Legal Proceedings 15
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 15
Item 3. Defaults Upon Senior Securities 15
Item 4. Submission of Matters to a Vote of Security Holders 15
Item 5. Other Information 16
Item 6. Exhibits 16
2
VICTORIA INTERNET SERVICES, INC.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEETS
AS OF SEPTEMBER 30, 2011 AND DECEMBER 31, 2010
ASSETS
September 30, December 31,
2011 2010
-------- --------
(unaudited)
CURRENT ASSETS
Cash and cash equivalents $ 2,464 $ 68
-------- --------
TOTAL ASSETS $ 2,464 $ 68
======== ========
LIABILITIES AND STOCKHOLDER'S EQUITY
LIABILITIES
Current Liabilities
Accounts Payable $ 0 $ 0
Accrued expenses 0 6,590
Loan from shareholder 28,879 9,163
-------- --------
TOTAL LIABILITIES 28,879 15,753
-------- --------
STOCKHOLDER'S EQUITY
Common stock, par value $0.0000001; 100,000,000 shares
authorized, 4,675,000 shares issued and outstanding 1 1
Additional paid in capital 19,999 19,999
Deficit accumulated during the development stage (53,165) (42,435)
-------- --------
TOTAL STOCKHOLDER'S EQUITY (26,415) (15,685)
-------- --------
TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY $ 2,464 $ 68
======== ========
See accompanying notes to financial statements.
3
VICTORIA INTERNET SERVICES, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF OPERATIONS (unaudited)
THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2011 AND 2010
AND FOR THE PERIOD FROM OCTOBER 9, 2009 (INCEPTION) TO SEPTEMBER 30, 2011
For the period from
Three Months Three Months Nine Months Nine Months October 9, 2009
ended ended ended ended (Inception) to
September 30, September 30, September 30, September 30, September 30,
2011 2010 2011 2010 2011
---------- ---------- ---------- ---------- ----------
REVENUES $ 0 $ 0 $ 0 $ 0 $ 400
OPERATING EXPENSES 5,247 2,583 10,730 14,832 53,565
---------- ---------- ---------- ---------- ----------
NET LOSS FROM OPERATIONS (5,247) (2,583) (10,730) (14,832) (53,165)
PROVISION FOR INCOME TAXES 0 0 0 0 0
---------- ---------- ---------- ---------- ----------
NET LOSS $ (5,247) $ (2,583) $ (10,730) $ (14,832) $ (53,165)
========== ========== ========== ========== ==========
NET LOSS PER SHARE: BASIC AND DILUTED $ (0.00) $ (0.00) $ (0.00) $ (0.00)
---------- ---------- ---------- ----------
WEIGHTED AVERAGE NUMBER OF SHARES
OUTSTANDING: BASIC AND DILUTED 4,675,000 4,183,333 4,675,000 4,061,111
---------- ---------- ---------- ----------
See accompanying notes to financial statements.
4
VICTORIA INTERNET SERVICES, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF STOCKHOLDER'S EQUITY (DEFICIT) (unaudited)
FOR THE PERIOD FROM OCTOBER 9, 2009 (INCEPTION) TO SEPTEMBER 30, 2011
Deficit
Accumulated
Common Stock Additional During the
---------------------- Paid-in Development
Shares Amount Capital Stage Total
------ ------ ------- ----- -----
Inception, October 9, 2009 -- $ -- $ -- $ -- $ --
Shares issued for cash at
$0.005 per share 4,000,000 1 19,999 -- 20,000
Net loss for the period ended
December 31, 2009 -- -- -- (12,513) (12,513)
--------- --------- --------- --------- ---------
Balance, December 31, 2009 4,000,000 1 19,999 (12,513) 7,487
Shares issued for cash at
$0.01 per share 675,000 0 6,750 -- 6,750
Net loss for the year ended
December 31, 2010 -- -- -- (29,922) (29,922)
--------- --------- --------- --------- ---------
Balance, December 31, 2010 4,675,000 1 26,749 (42,435) (15,685)
Net loss for the nine months
ended September 30, 2011 -- -- -- (10,730) (10,730)
--------- --------- --------- --------- ---------
Balance, September 30, 2011 4,675,000 $ 1 $ 26,749 $ (53,165) $ (26,415)
========= ========= ========= ========= =========
See accompanying notes to financial statements.
5
VICTORIA INTERNET SERVICES, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CASH FLOWS (unaudited)
THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2011
AND FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2010
AND FOR THE PERIOD FROM OCTOBER 9, 2009 (INCEPTION) TO SEPTEMBER 30, 2011
Period from
Nine months Nine months October 9, 2009
ended ended (Inception) to
September 30, September 30, September 30,
2011 2010 2011
-------- -------- --------
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss for the period $(10,730) $(14,832) $(53,165)
Changes in assets and liabilities:
Increase (decrease) in accrued expenses (6,590) (5,397) 0
Increase (decrease) in accounts Payable 0 3,395 0
-------- -------- --------
CASH FLOWS USED IN OPERATING ACTIVITIES (17,320) (16,835) (53,165)
-------- -------- --------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from sale of common stock 0 4,000 26,750
Loan from shareholder 19,716 0 28,879
-------- -------- --------
CASH FLOWS PROVIDED BY FINANCING ACTIVITIES 19,716 4,000 55,629
-------- -------- --------
NET INCREASE (DECREASE) IN CASH 2,396 (12,835) 2,464
Cash, beginning of period 68 15,400 0
-------- -------- --------
CASH, END OF PERIOD $ 2,464 $ 2,565 $ 2,464
======== ======== ========
SUPPLEMENTAL CASH FLOW INFORMATION:
Interest paid $ 0 $ 0
======== ========
Income taxes paid $ 0 $ 0
======== ========
See accompanying notes to financial statements.
6
VICTORIA INTERNET SERVICES, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE FINANCIAL STATEMENTS
SEPTEMBER 30, 2011
NOTE 1 - ORGANIZATION AND NATURE OF BUSINESS
Victoria Internet Services, Inc. was incorporated in the State of Nevada on
October 9, 2009. The Company is in the development stage as defined under
Statement on Financial Accounting Standards No. 7, Development Stage Enterprises
("SFAS No.7") (ASC 915-10). As of September 30, 2011 we had $400 in revenues,
have minimal assets and have incurred losses since inception. We have yet to
implement our business model and are currently seeking financial alternatives to
finance operations.
We intend to commence operations in the business of online tax preparation in
the North American market. To date, the only operations we have engaged in are
the development of a business plan and the registration of the domain name
(www.victoriainternetservices.com) for our new website and provided services for
one client.
NOTE 2 - GOING CONCERN
The financial statements have been prepared on a going concern basis which
assumes the Company will be able to realize its assets and discharge its
liabilities in the normal course of business for the foreseeable future. The
Company has incurred losses since inception resulting in an accumulated deficit
of $47,918 as of September 30, 2011 and further losses are anticipated in the
development of its business raising substantial doubt about the Company's
ability to continue as a going concern. The ability to continue as a going
concern is dependent upon the Company generating profitable operations in the
future and/or to obtain the necessary financing to meet its obligations and
repay its liabilities arising from normal business operations when they come
due. Management intends to finance operating costs over the next twelve months
with existing cash on hand and loans from directors and or private placement of
common stock.
NOTE 3 - SUMMARY OF SIGNIFCANT ACCOUNTING POLICIES
BASIS OF PRESENTATION
The financial statements of the Company have been prepared in accordance with
generally accepted accounting principles in the United States of America and are
presented in U.S. dollars.
USE OF ESTIMATES AND ASSUMPTIONS
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States 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
reporting period. Actual results could differ from those estimates.
FINANCIAL INSTRUMENTS
The carrying value of the Company's financial instruments approximates their
fair value because of the short maturity of these instruments.
STOCK-BASED COMPENSATION
Stock-based compensation is accounted for at fair value in accordance with SFAS
No. 123 and 123 (R) (ASC 718). To date, the Company has not adopted a stock
option plan and has not granted any stock options.
7
VICTORIA INTERNET SERVICES, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE FINANCIAL STATEMENTS
SEPTEMBER 30, 2011
NOTE 3 - SUMMARY OF SIGNIFCANT ACCOUNTING POLICIES (CONTINUED)
INCOME TAXES
Income taxes are accounted for under the assets and liability method. Deferred
tax assets and liabilities are recognized for the estimated future tax
consequences attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their respective tax
bases and operating loss and tax credit carry forwards. Deferred tax assets and
liabilities are measured using enacted tax rates in effect for the year in which
those temporary differences are expected to be recovered or settled.
BASIC INCOME (LOSS) PER SHARE
Basic income (loss) per share is calculated by dividing the Company's net loss
applicable to common shareholders by the weighted average number of common
shares during the period. Diluted earnings per share is calculated by dividing
the Company's net income 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 for any potentially dilutive debt or equity. There are no such
common stock equivalents outstanding as of September 30, 2011.
ACCOUNTING BASIS
The Company uses the accrual basis of accounting and accounting principles
generally accepted in the United States of America ("GAAP" accounting). The
Company has adopted a December 31 fiscal year end.
DIVIDENDS
The Company has not adopted any policy regarding payment of dividends. No
dividends have been paid during any of the periods shown.
IMPAIRMENT OF LONG-LIVED ASSETS
The Company continually monitors events and changes in circumstances that could
indicate carrying amounts of long-lived assets may not be recoverable. When such
events or changes in circumstances are present, the Company assesses the
recoverability of long-lived assets by determining whether the carrying value of
such assets will be recovered through undiscounted expected future cash flows.
If the total of the future cash flows is less than the carrying amount of those
assets, the Company recognizes an impairment loss based on the excess of the
carrying amount over the fair value of the assets. Assets to be disposed of are
reported at the lower of the carrying amount or the fair value less costs to
sell.
ADVERTISING COSTS
The Company's policy regarding advertising is to expense advertising when
incurred. The Company incurred advertising expense of $0 during the periods
ended September 30, 2011.
REVENUE RECOGNITION
The Company recognizes revenue when products are fully delivered or services
have been provided and collection is reasonably assured.
8
VICTORIA INTERNET SERVICES, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE FINANCIAL STATEMENTS
SEPTEMBER 30, 2011
NOTE 3 - SUMMARY OF SIGNIFCANT ACCOUNTING POLICIES (CONTINUED)
RECENT ACCOUNTING PRONOUNCEMENTS
In May 2009, the FASB issued SFAS 165 (ASC 855-10) entitled "Subsequent Events".
Companies are now required to disclose the date through which subsequent events
have been evaluated by management. Public entities (as defined) must conduct the
evaluation as of the date the financial statements are issued, and provide
disclosure that such date was used for this evaluation. SFAS 165 (ASC 855-10)
provides that financial statements are considered "issued" when they are widely
distributed for general use and reliance in a form and format that complies with
GAAP. SFAS 165 (ASC 855-10) is effective for interim and annual periods ending
after June 15, 2009 and must be applied prospectively.
In June 2009, the FASB issued SFAS 168, The FASB Accounting Standards
Codification and the Hierarchy of Generally Accepted Accounting Principles.
("SFAS 168" or ASC 105-10) SFAS 168 (ASC 105-10) establishes the Codification as
the sole source of authoritative accounting principles recognized by the FASB to
be applied by all nongovernmental entities in the preparation of financial
statements in conformity with GAAP. SFAS 168 (ASC 105-10) was prospectively
effective for financial statements issued for fiscal years ending on or after
September 15, 2009 and interim periods within those fiscal years. The adoption
of SFAS 168 (ASC 105-10) on July 1, 2009 did not impact the Company's results of
operations or financial condition. The Codification did not change GAAP,
however, it did change the way GAAP is organized and presented.
As a result, these changes impact how companies reference GAAP in their
financial statements and in their significant accounting policies. The Company
implemented the Codification in this Report by providing references to the
Codification topics alongside references to the corresponding standards.
With the exception of the pronouncements noted above, no other accounting
standards or interpretations issued or recently adopted are expected to have a
material impact on the Company's financial position, operations or cash flows.
STOCK-BASED COMPENSATION
As of September 30, 2011, the Company has not issued any stock-based payments to
its employees.
The Company uses the modified prospective method of accounting for stock-based
compensation. Under this transition method, stock compensation expense includes
compensation expense for all stock-based compensation awards granted on or after
January 1, 2006, based on the estimated grant-date fair value.
NOTE 4 - ACCRUED EXPENSES
Accrued expenses at December 31, 2010 consisted of amounts owed to the Company's
outside independent consultants and lawyers for services rendered for periods
reported on in these financial statements.
9
VICTORIA INTERNET SERVICES, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE FINANCIAL STATEMENTS
SEPTEMBER 30, 2011
NOTE 5 - COMMON STOCK
The authorized capital of the Company is 100,000,000 common shares with a par
value of $ 0.0000001 per share.
In November 2009, the Company issued 4,000,000 shares of common stock at a price
of $0.005 per share for total cash proceeds of $20,000.
During the year ended December 31, 2010, the Company issued 675,000 shares of
common stock for cash at $0.01 per share for total cash proceeds of $6,750.
There were 4,675,000 shares of common stock issued and outstanding as of
September 30, 2011.
NOTE 6 - INCOME TAXES
As of September 30, 2011 the Company had net operating loss carry forwards of
approximately $47,900 which may be available to reduce future years' taxable
income through 2031. Future tax benefits which may arise as a result of these
losses have not been recognized in these financial statements, as their
realization is determined not likely to occur and accordingly, the Company has
recorded a valuation allowance for the deferred tax asset relating to these tax
loss carry-forwards.
The provision for Federal income tax consists of the following:
September 30, 2011
------------------
Federal income tax benefit attributable to:
Current Operations $ 18,076
Less: valuation allowance (18,076)
--------
Net provision for Federal income taxes $ 0
========
The cumulative tax effect at the expected rate of 34% of significant items
comprising our net deferred tax amount is as follows:
September 30, 2011
------------------
Deferred tax asset attributable to:
Net operating loss carryover $ 18,076
Less: valuation allowance (18,076)
--------
Net deferred tax asset $ 0
========
Due to the change in ownership provisions of the Tax Reform Act of 1986, net
operating loss carry forwards of $47,900 for federal income tax reporting
purposes are subject to annual limitations. Should a change in ownership occur
net operating loss carry forwards may be limited as to use in future years.
NOTE 7 - LOAN FROM SHAREHOLDER
On October 9, 2009, the sole Director and President Leon Golden loaned the
Company $413. The loan is unsecured, non-interest bearing, and due on demand.
The director loaned an additional $21,500 as of September 30, 2011. The new
loans are also unsecured, non-interest bearing and due on demand. The balance
due to the shareholder was $28,879 as of September 30, 2011.
10
VICTORIA INTERNET SERVICES, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE FINANCIAL STATEMENTS
SEPTEMBER 30, 2011
NOTE 8 - COMMITMENTS AND CONTINGENCIES
The Company neither owns nor leases any real or personal property. An officer
has provided office services without charge. There is no obligation for the
officer to continue this arrangement. Such costs are immaterial to the financial
statements and accordingly are not reflected herein. The officers and directors
are involved in other business activities and most likely will become involved
in other business activities in the future.
NOTE 9 - SUBSEQUENT EVENTS
On October 12, 2011, the Company and its CEO Leon Golden executed a letter of
intent (the "LOI") with Earn-a-Car (PTY) LTD, a South African corporation
("EARN-A-CAR"). The LOI contemplates, among other things, the Company acquiring
all of the issued and outstanding shares of Earn-a-Car from its shareholders, in
exchange for 1,575,000 shares held by Mr. Golden, the payment to Mr. Golden of
$150,000 and the cancellation of the balance of Mr. Golden's shares. The LOI is
subject to the parties' due diligence and the execution and delivery of a formal
agreement. These events have not yet occurred.
On October 26, 2011, the Company agreed to sell a $32,500 90-day note payable
for $25,000 which becomes effective on the occurrence of certain events. In
addition, the Company agreed to issue 1,000 pre-split free-trading common shares
(or 50,000 post-split free trading common shares) no later than 10 days of the
Effective Date.
In accordance with SFAS 165 (ASC 855-10) the Company has analyzed its operations
subsequent to September 30, 2011 through October 30, 2011, the date these
financial statements were issued, and has determined that it does not have any
other material subsequent events to disclose in these financial statements.
11
FORWARD LOOKING STATEMENTS
Statements made in this Form 10-Q that are not historical or current facts are
"forward-looking statements" made pursuant to the safe harbor provisions of
Section 27A of the Securities Act of 1933 (the "Act") and Section 21E of the
Securities Exchange Act of 1934. These statements often can be identified by the
use of terms such as "may," "will," "expect," "believe," "anticipate,"
"estimate," "approximate" or "continue," or the negative thereof. We intend that
such forward-looking statements be subject to the safe harbors for such
statements. We wish to caution readers not to place undue reliance on any such
forward-looking statements, which speak only as of the date made. Any
forward-looking statements represent management's best judgment as to what may
occur in the future. However, forward-looking statements are subject to risks,
uncertainties and important factors beyond our control that could cause actual
results and events to differ materially from historical results of operations
and events and those presently anticipated or projected. We disclaim any
obligation subsequently to revise any forward-looking statements to reflect
events or circumstances after the date of such statement or to reflect the
occurrence of anticipated or unanticipated events.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATION
GENERAL
VICTORIA INTERNET SERVICES, INC. was incorporated under the laws of the State of
Nevada on October 9, 2009. Our registration statement has been filed with the
Securities and Exchange Commission on June 18, 2010.
Please note that throughout this Quarterly Report, and unless otherwise noted,
the words "we," "our," "us," the "Company," refers to VICTORIA INTERNET
SERVICES, INC.
CURRENT BUSINESS OPERATIONS
As of the date of this Quarterly Report, we have not started operations. The
Company is in the development stage as defined under Statement on Financial
Accounting Standards No. 7, Development Stage Enterprises ("SFAS No.7") (ASC
915-10). As of September 30, 2011 we had $400 in revenues, have minimal assets
and have incurred losses since inception. We have yet to implement our business
model and our current focus is to obtain effectiveness of our registration
statement from the Securities and Exchange Commission and apply to FINRA for
quotation on the OTC Bulletin Board.
We intend to commence operations in the business of online tax preparation in
the North American market. To date, the only operations we have engaged in are
the development of a business plan and the registration of the domain name
(www.victoriainternetservices.com) for our new website and provided services for
one client.
We have not begun operations and will not begin operations until we have
completed this offering. Our plan of operation is forward-looking and there is
no assurance that we will ever begin operations. We are a development stage
company and have not earned any revenue. It is likely that we will not be able
to achieve profitability and will have to cease operations due to the lack of
funding.
RESULTS OF OPERATION
Our financial statements have been prepared assuming that we will continue as a
going concern and, accordingly, do not include adjustments relating to the
recoverability and realization of assets and classification of liabilities that
might be necessary should we be unable to continue in operation. We expect we
will require additional capital to meet our long term operating requirements. We
expect to raise additional capital through, among other things, the sale of
equity or debt securities.
12
NINE MONTH PERIODS ENDED SEPTEMBER 30, 2011 AND 2010 COMPARED TO THE PERIOD FROM
INCEPTION (OCTOBER 9, 2009) TO SEPTEMBER 30, 2011
Our net loss for the nine-month period ended September 30, 2011 was
approximately ($5,247) compared to a net loss of ($14,832) for the nine-month
period ended September 30, 2011 and ($53,165) during the period from inception
(October 9, 2009) to September 30, 2011. During the nine-month period ended
September 30, 2011, we did not generate any revenue.
During the nine-month period ended September 30, 2011, we incurred general and
administrative, consulting, and professional expenses of approximately $5,247
compared to $14,832 from the nine-month period ended September 30, 2010 and
$53,165 incurred during the period from inception (October 9, 2009) to September
30, 2011. General and administrative expenses incurred during the nine-month
period ended September 30, 2011 were generally related to corporate overhead,
financial and administrative contracted services, such as legal and accounting
and developmental costs.
Our net loss during the nine-month period ended September 30, 2011 was ($5,247)
or ($0.00) per share compared to a net loss of ($14,832) or ($0.00) per share
during the nine-month period ending September 2010 and ($53,165) or ($0.01) per
share during the period from inception (October 9, 2009) to September 30, 2011.
The weighted average number of shares outstanding was 4,675,000 for the
nine-month period ended September 30, 2011.
THREE MONTH PERIODS ENDED SEPTEMBER 30, 2011 COMPARED THE THREE MONTH PERIOD
ENDED SEPTEMBER 30, 2010
Our net loss for the three-month period ended September 30, 2011 was
approximately ($5,247) compared to a net loss of ($2,583) for the three-month
period ended September 30. During the three-month period ended September 30,
2011, we did not generate any revenue.
During the three-month period ended September 30, 2011, we incurred general and
administrative, consulting, and professional expenses of approximately $5,247
compared to $2,583 from the three-month period ended September 30, 2010. General
and administrative expenses incurred during the three-month period ended
September 30, 2011 were generally related to corporate overhead, financial and
administrative contracted services, such as legal and accounting and
developmental costs.
Our net loss during the three-month period ended September 30, 2011 was ($5,247)
or ($0.00) per share compared to a net loss of ($2,583) or ($0.00) per share
during the nine-month period ending September 30, 2010. The weighted average
number of shares outstanding was 4,675,000 for the nine-month period ended
September 30, 2011.
LIQUIDITY AND CAPITAL RESOURCES
NINE-MONTH PERIOD ENDED SEPTEMBER 30, 2011
At September 30, 2011, our current assets were $2,464 and our current
liabilities were $28,879, which resulted in a working capital of ($26,415). At
September 30, 2011, current assets were comprised of $2,464 in cash compared to
$68 in current assets at fiscal year ended December 31, 2010. As at the
nine-month period ended September 30, 2011, current liabilities were comprised
of $28,879 in loan from director.
Stockholders' equity decreased from ($15,685) for fiscal year ended December 31,
2010 to ($26,415) for the nine-month period ended September 30, 2011.
CASH FLOWS FROM OPERATING ACTIVITIES
We have not generated positive cash flows from operating activities. For the
nine-month period ended September 30, 2011, net cash flows used in operating
activities was ($17,320) consisting primarily of a net loss of ($10,730) and
reduction in accrued expenses. Net cash flows used in operating activities was
($47,918) for the period from inception (October 9, 2009) to September 30, 2011.
13
CASH FLOWS FROM FINANCING ACTIVITIES
We have financed our operations primarily from either advancements or the
issuance of equity and debt instruments. For the nine-month period ended
September 30, 2011, we did not generate net cash from financing activities. For
the period from inception (October 9, 2009) to September 30, 2011, net cash
provided by financing activities was $55,629 received from sale of common stock
and loans from Director.
PLAN OF OPERATION AND FUNDING
We expect that working capital requirements will continue to be funded through a
combination of our existing funds and further issuances of securities. Our
working capital requirements are expected to increase in line with the growth of
our business.
Existing working capital, further advances and debt instruments, and anticipated
cash flow are expected to be adequate to fund our operations over the next six
months. We have no lines of credit or other bank financing arrangements.
Generally, we have financed operations to date through the proceeds of the
private placement of equity and debt instruments. In connection with our
business plan, management anticipates additional increases in operating expenses
and capital expenditures relating to: (i) acquisition of inventory; (ii)
developmental expenses associated with a start-up business; and (iii) marketing
expenses. We intend to finance these expenses with further issuances of
securities, and debt issuances. Thereafter, we expect we will need to raise
additional capital and generate revenues to meet long-term operating
requirements. Additional issuances of equity or convertible debt securities will
result in dilution to our current shareholders. Further, such securities might
have rights, preferences or privileges senior to our common stock. Additional
financing may not be available upon acceptable terms, or at all. If adequate
funds are not available or are not available on acceptable terms, we may not be
able to take advantage of prospective new business endeavors or opportunities,
which could significantly and materially restrict our business operations.
MATERIAL COMMITMENTS
As of the date of this Quarterly Report, we have a material commitment for
fiscal year 2010/2011. During the period from inception (October 9, 2009) to
September 30, 2011, Leon Golden, our Chief Executive Officer and a director,
loaned us $28,879.
The loans are non-interest bearing and payable upon demand.
PURCHASE OF SIGNIFICANT EQUIPMENT
We do not intend to purchase any significant equipment during the next twelve
months.
OFF-BALANCE SHEET ARRANGEMENTS
As of the date of this Quarterly Report, we do not have any off-balance sheet
arrangements that have or are reasonably likely to have a current or future
effect on our financial condition, changes in financial condition, revenues or
expenses, results of operations, liquidity, capital expenditures or capital
resources that are material to investors.
GOING CONCERN
The independent auditors' report accompanying our September 30, 2011 financial
statements contained an explanatory paragraph expressing substantial doubt about
our ability to continue as a going concern. The financial statements have been
prepared "assuming that we will continue as a going concern," which contemplates
that we will realize our assets and satisfy our liabilities and commitments in
the ordinary course of business.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
Market risk represents the risk of loss that may impact our financial position,
results of operations or cash flows due to adverse change in foreign currency
and interest rates.
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EXCHANGE RATE
Our reporting currency is United States Dollars ("USD").
INTEREST RATE
Any future loans will relate mainly to trade payables and will be mainly
short-term. However our debt may be likely to rise in connection with expansion
and if interest rates were to rise at the same time, this could become a
significant impact on our operating and financing activities. We have not
entered into derivative contracts either to hedge existing risks of for
speculative purposes.
ITEM 4. CONTROLS AND PROCEDURES
Our management is responsible for establishing and maintaining a system of
disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e)
under the Exchange Act) that is designed to ensure that information required to
be disclosed by us in the reports that we file or submit under the Exchange Act
is recorded, processed, summarized and reported, within the time periods
specified in the Commission's rules and forms. Disclosure controls and
procedures include, without limitation, controls and procedures designed to
ensure that information required to be disclosed by an issuer in the reports
that it files or submits under the Exchange Act is accumulated and communicated
to the issuer's management, including its principal executive officer or
officers and principal financial officer or officers, or persons performing
similar functions, as appropriate to allow timely decisions regarding required
disclosure.
An evaluation was conducted under the supervision and with the participation of
our management of the effectiveness of the design and operation of our
disclosure controls and procedures as of September 30, 2010. Based on that
evaluation, our management concluded that our disclosure controls and procedures
were effective as of such date to ensure that information required to be
disclosed in the reports that we file or submit under the Exchange Act, is
recorded, processed, summarized and reported within the time periods specified
in SEC rules and forms. Such officer also confirmed that there was no change in
our internal control over financial reporting during the nine-month period ended
September 30, 2010 that has materially affected, or is reasonably likely to
materially affect, our internal control over financial reporting.
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
Management is not aware of any legal proceedings contemplated by any
governmental authority or any other party involving us or our properties. As of
the date of this Quarterly Report, no director, officer or affiliate is (i) a
party adverse to us in any legal proceeding, or (ii) has an adverse interest to
us in any legal proceedings. Management is not aware of any other legal
proceedings pending or that have been threatened against us or our properties.
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
On June 18, 2010, we filed a registration statement on Form S-1 with the
Securities and Exchange Commission pursuant to which we registered 4,000,000
shares of our restricted common stock to be issued to certain shareholders and
5,000,000 shares were registered in the initial offering.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
No report required.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No report required.
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ITEM 5. OTHER INFORMATION
No report required.
ITEM 6. EXHIBITS
Exhibits:
31.1 Certification of Chief Executive Officer pursuant to Securities
Exchange Act of 1934 Rule 13a-14(a) or 15d-14(a).
31.2 Certification of Chief Financial Officer pursuant to Securities
Exchange Act of 1934 Rule 13a-14(a) or 15d-14(a).
32.1 Certifications pursuant to Securities Exchange Act of 1934 Rule
13a-14(b) or 15d- 14(b) and 18 U.S.C. Section 1350, as adopted pursuant
to Section 906 of the Sarbanes- Oxley Act of 2002.
101 Interactive Data Files pursuant to Rule 405 of Regulation S-T.
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SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
VICTORIA INTERNET SERVICES, INC.
Dated: November 7, 2011
By: /s/ Leon Golden
-------------------------------------
Leon Golden,
President and Chief Executive Officer
Dated: November 7, 2011
By: /s/ Leon Golden
-------------------------------------
Leon Golden,
Chief Financial Officer
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