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 September 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 [X] 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 November 14, 2011 the Company had outstanding 5,000,000 shares of common
stock, par value $0.0001.
TABLE OF CONTENTS
Part I - FINANCIAL INFORMATION
Item 1. Financial Statements................................................. 3
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations................................................10
Item 3. Quantitative and Qualitative Disclosures About Market Risk...........13
Item 4. Controls and Procedures..............................................13
PART II - OTHER INFORMATION
Item 1. Legal Proceedings....................................................13
Item 1A. Risk Factors.........................................................13
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds..........13
Item 3. Defaults Upon Senior Securities......................................13
Item 4. Removed and Reserved.................................................13
Item 5. Other Information....................................................14
Item 6. Exhibits.............................................................14
SIGNATURES....................................................................15
2
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
WINECOM INC
(A Development Stage Company)
Condensed Balance Sheets
September 30, December 31,
2011 2010
-------- --------
(Unaudited) (Audited)
ASSETS
CURRENT ASSETS
Cash $ 7,295 $ 164
Deferred offering costs -- 27,253
-------- --------
TOTAL CURRENT ASSETS 7,295 27,417
-------- --------
TOTAL ASSETS $ 7,295 $ 27,417
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES
Loans payable - director $ 2,818 $ 2,818
Accounts payable 15,634 9,213
-------- --------
TOTAL CURRENT LIABILITIES 18,452 12,031
-------- --------
TOTAL LIABILITIES 18,452 12,031
-------- --------
STOCKHOLDERS' EQUITY (DEFICIT)
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 (43,370) (4,614)
-------- --------
TOTAL STOCKHOLDERS' EQUITY (DEFICIT) (11,157) 15,386
-------- --------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) $ 7,295 $ 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 Nine Months Ended July 1, 2008
September 30, September 30, (Inception) to
--------------------------- ---------------------------- September 30,
2011 2010 2011 2010 2011
---------- ---------- ---------- ---------- ----------
REVENUE $ -- $ -- $ -- $ -- $ --
---------- ---------- ---------- ---------- ----------
EXPENSES
General and administrative 17,774 691 38,756 1,467 43,370
---------- ---------- ---------- ---------- ----------
Loss before income taxes (17,774) (691) (38,756) (1,467) (43,370)
Provision for income taxes -- -- -- -- --
---------- ---------- ---------- ---------- ----------
NET LOSS $ (17,774) $ (691) $ (38,756) $ (1,467) $ (43,370)
========== ========== ========== ========== ==========
Basic and Diluted:
Loss Per Common Share a a a a
---------- ---------- ---------- ----------
Weighted Average Number of
Common Shares 5,000,000 4,000,000 4,769,231 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 -- -- -- -- (38,756) (38,756)
--------- --------- --------- --------- --------- ---------
Balance September 30, 2011 5,000,000 $ 500 $ 31,713 $ -- $ (43,370) $ (11,157)
========= ========= ========= ========= ========= =========
The accompanying notes are an integral part of these
condensed financial statements.
5
WINECOM INC
(A Development Stage Company)
Condensed Statements of Cashflows
(Unaudited)
Nine Months Ended July 1, 2008
September 30, (Inception) to
--------------------------- September 30,
2011 2010 2011
-------- -------- --------
OPERATING ACTIVITIES
Net loss $(38,756) $ (1,467) $(43,370)
Adjustments To Reconcile Net Loss To Net Cash
Used By Operating Activities
Increase in accounts payable 6,421 1,038 15,634
-------- -------- --------
NET CASH USED BY OPERATING ACTIVITIES (32,335) (429) (27,736)
-------- -------- --------
INVESTING ACTIVITIES
NET CASH USED BY INVESTING ACTIVITIES -- -- --
-------- -------- --------
FINANCING ACTIVITIES
Proceeds from loans - director -- -- 2,818
Payment of offering costs (534) (9,887) (27,787)
Proceeds from issuance of common stock 40,000 20,000 60,000
-------- -------- --------
NET CASH PROVIDED BY FINANCING ACTIVITIES 39,466 10,113 35,031
-------- -------- --------
Net Increase in Cash 7,131 9,684 7,295
Cash, Beginning of Period 164 750 --
-------- -------- --------
Cash, End of Period $ 7,295 $ 10,434 $ 7,295
======== ======== ========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid during the period for
Interest $ -- $ -- $ --
======== ======== ========
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
NINE MONTHS ENDED SEPTEMBER 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 September 30, 2011 and
December 31, 2010 and its results of operations for the three and nine months
ended September 30, 2011 and 2010 and cash flows for the nine months ended
September 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 nine months ended September 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.
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.
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The Company's practice is to recognize interest accrued related to unrecognized
tax benefits in interest expense and penalties in operating expenses. As of
September 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 September 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.
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
8
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 September 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
$43,370 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 nine months ended September 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.
NOTE 5. RELATED PARTY TRANSACTIONS
As of December 31, 2010 and September 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 September 30, 2011 totaling
$43,370. The Company has cash of $7,295 as of September 30, 2011 and 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.
9
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 common stock is quoted on the OTC Bulletin Board under the
symbol "WNCM.OB".
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.
10
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 September 30, 2011, we have incurred
accumulated net losses of $43,370. As of September 30, 2011, we had $7,295 in
current assets and current liabilities of $18,452. 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
gross proceeds of $40,000 and incurred offering costs of $533. The Company
previously incurred an additional $27,253 of deferred offering costs during the
year ended December 31, 2010, resulting in net proceeds of $12,213.
During the nine months ended September 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. . We now support Google +1.
Our members can recommend our content and their content to their friends.
Additionally, if our members are sharing their +1s publicly, the content they
have shared will be viewable in Google+, to their Circles and on the +1 list.
RESULTS OF OPERATIONS
COMPARISON OF THE NINE MONTHS ENDED SEPTEMBER 30, 2011 AND 2010
OPERATING EXPENSES
The Company incurred $38,756 of operating expenses during the nine months ended
September 30, 2011 compared to $1,476 incurred during the nine months ended
September 30, 2010. The Company's expenses in 2011 included $14,976 of
professional fees related to the filing of financial reports with the SEC,
$20,354 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 SEPTEMBER 30, 2011 AND 2010
OPERATING EXPENSES
The Company incurred $17,774 of operating expenses during the three months ended
September 30, 2011 compared to $691 incurred during the three months ended
September 30, 2010. The Company's expenses in 2011 included $5,960 of
professional fees related to the filing of financial reports with the SEC,
$11,469 of consulting services related to various matters concerning the
Company's publicly company status, and $345 of general and administrative costs.
11
LIQUIDITY AND CAPITAL RESOURCES
At September 30, 2011, we had total current assets of $7,295 (consisting
entirely of cash), total current liabilities of $18,452, and a working capital
deficit of $11,157 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
$35,031 from July 1, 2008 (date of inception) to September 30, 2011, consisting
of $2,818 loaned to us by our President and Director, Mordechay David and
$32,213 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 nine months ended September 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, 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 $43,370 from our inception on July 1, 2008 to
September 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.
12
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
September 30, 2011. Based upon such evaluation, the Principal Executive Officer
and Principal Financial Officer have concluded that, as of September 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 September 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.
ITEM 4. RESERVED
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ITEM 5. OTHER INFORMATION
None.
ITEM 6. EXHIBITS
EXHIBIT DESCRIPTION
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
101 Interactive Data Files pursuant to Rule 405 of Regulation S-T.
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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: November 14, 2011 By: /s/ Merdechay David
-----------------------------------
Merdechay David,
President and Director
(Principal Executive Officer)
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