BrewBilt Manufacturing Inc. - Quarter Report: 2016 September (Form 10-Q)
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, 2016
[ ] 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. 333-207001
Vet Online Supply Inc.
(Exact name of registrant as specified in its charter)
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Florida
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47-0990750
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5047
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(State or Other Jurisdiction of
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IRS Employer
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Primary Standard Industrial
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Incorporation or Organization)
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Identification Number
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Classification Code Number
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1401 Market Street, PMB 309
San Diego, California 92101
Tel. (503) 308-9178
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(Address and telephone number of principal executive offices)
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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.
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Yes
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[X]
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No
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[ ]
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Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§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
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Yes
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[X]
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No
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[ ]
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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.
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Large accelerated filer
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[ ]
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Accelerated filer
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[ ]
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Non-accelerated filer
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[ ]
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Smaller reporting company
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[X]
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(Do not check if a smaller reporting company)
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Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
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Yes
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[ ]
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No
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[ X]
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Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date.
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As of October 19, 2016 the Registrant had 7,553,250,000 shares of common stock outstanding.
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CONTENTS
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Page
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PART I – FINANCIAL INFORMATION
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Item 1.
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Financial Statements
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3
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Item 2.
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Management’s Discussion and Analysis of Financial Condition and Results of Operations
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4
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Item 3.
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Quantitative and Qualitative Disclosure about Market Risk
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5
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Item 4.
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Controls and Procedures
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5
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PART II – OTHER INFORMATION
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Item 1.
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Legal Proceedings
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6
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Item 1A.
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Risk Factors
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6
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Item 2.
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Unregistered Sales of Equity Securities and Use of Proceeds
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6
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Item 3.
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Defaults Upon Senior Securities
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6
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Item 4.
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Mine Safety Disclosures
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6
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Item 5.
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Other Information
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6
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Item 6.
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Exhibits
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7
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SIGNATURES
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8
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FORWARD LOOKING STATEMENTS
Statements made in this Form 10-Q that are not historical or current facts are "forward-looking statements.". 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.
2
PART I – FINANCIAL INFORMATION
The accompanying unaudited financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions for Form 10-Q and Article 210 8-03 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments considered necessary for a fair presentation have been included. All such adjustments are of a normal recurring nature. Operating results for the nine months ended September 30, 2016, are not necessarily indicative of the results that may be expected for the year ending December 31, 2016. For further information, refer to the financial statements and footnotes thereto included in our company’s Annual Report on Form 10-K for the year ended December 31, 2015 as filed with the Securities and Exchange Commission on April 14, 2016.
REPORTED IN UNITED STATES DOLLARS
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Page
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Balance Sheets
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F-1
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Statements of Operations and Comprehensive loss
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F-2
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Statements of Cash Flows
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F-3
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Notes to Financial Statements
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F-4 to F-8
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3
VET ONLINE SUPPLY INC.
BALANCE SHEETS
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September 30, 2016
(Unaudited)
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December 31, 2015
(Audited)
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ASSETS
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Current assets
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||||||||
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Cash and cash equivalents
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$
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4,610
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$
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1,870
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Deferred offering costs
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-
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12,500
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Other receivable
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177
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177
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Total current assets
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4,787
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14,547
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TOTAL ASSETS
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$
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4,787
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$
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14,547
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LIABILITIES & STOCKHOLDERS’ EQUITY (DEFICIT)
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Current liabilities
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Accounts payable
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$
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30,317
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$
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18,641
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Accounts payable, related parties
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-
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12,000
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Convertible notes payable
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50,000
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50,000
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Promissory notes payable - related party
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5,240
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7,736
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Total current liabilities
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85,557
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88,377
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Total liabilities
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85,557
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88,377
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Commitments and Contingencies
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Stockholders’ equity (deficit)
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Preferred stock, $0.001 par value:
Authorized: 10,000,000 Preferred shares, no shares issued and outstanding
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-
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-
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Common stock, $0.001 par value: shares authorized 8,000,000,000; 7,553,250,000 shares issued and outstanding as of September 30, 2016, 9,000,000,000 shares issued and 7,500,000,000 shares outstanding as of December 31, 2015*
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7,553,250
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9,000,000
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Treasury stock, at cost (1,500,000,000 shares)
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-
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(1,000
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)
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Additional paid in capital
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(7,441,100
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)
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(8,909,850
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)
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Accumulated deficit
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(192,920
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)
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(162,980
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)
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Total stockholder’s deficit
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(80,770)
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(73,830
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)
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TOTAL LIABILITIES & EQUITY
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$
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4,787
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$
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14,547
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*The retroactive impact of the 150 for 1 share split effective July 28, 2016 results in issued shares exceeding authorized capital as of December 31, 2015 due to the 1,500,000,000 issued shares held in treasury.
The accompanying notes are an integral part of these Financial Statements.
F-1
VET ONLINE SUPPLY INC.
STATEMENTS OF OPERATIONS
(Unaudited)
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Three Months Ended
September 30,
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Nine Months Ended
September 30,
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2016
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2015
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2016
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2015
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Net sales
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$
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-
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$
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511
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$
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972
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$
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2,624
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Cost of goods sold
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-
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(492
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)
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(620
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)
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(1,977
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)
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Gross profit
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-
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19
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352
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647
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Selling, general and administrative expenses
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7,431
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5,494
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29,968
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106,629
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Total operating expense
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7,431
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5,494
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29,968
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106,629
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Income (loss) from operations
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(7,431
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)
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(5,475
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)
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(29,616
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)
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(105,982
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)
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Interest expenses
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(131
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)
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-
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(324
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)
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-
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Net (loss)
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$
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(7,562
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)
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$
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(5,475
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)
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$
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(29,940
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)
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$
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(105,982
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)
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Net (loss) per common shares (basic and diluted)
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$
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(0.00
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)
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$
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(0.00
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)
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$
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(0.00
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)
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$
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(0.00
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)
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Weighted average shares outstanding - Basic and diluted
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7,553,250,000
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7,500,000,000
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7,526,971,950
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4,840,659,300
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The accompanying notes are an integral part of these Financial Statements.
F-2
VET ONLINE SUPPLY INC.
STATEMENTS OF CASH FLOWS
(Unaudited)
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Nine Month Ended
September 30,
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2016
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2015
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Cash Flows From Operating Activities
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Net loss
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$
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(29,940
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)
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$
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(105,982
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)
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Adjustments to reconcile net income to net cash provided from operating activities:
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Shares issued for services
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-
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75,000
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Changes in operating assets and liabilities:
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Deferred offering costs
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-
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(12,500
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)
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Accounts payable
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11,676
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20,558
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Accounts payable – related party
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(12,000
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)
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5,000
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Other receivable
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-
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(177
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)
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|||||
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Net cash (used by) operating activities
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(30,264
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)
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(18,101
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)
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Cash Flows From Financing Activities
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Proceeds from private placement
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35,500
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-
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Convertible notes payable
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-
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19,480
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Repayment of promissory notes payable, related party
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(10,507
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)
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- | |||||
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Promissory notes payable, related party
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8,011
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-
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Net cash provided from financing activities
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33,004
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19,480
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Increase (decrease) in cash and cash equivalents
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2,740
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1,379
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Cash and cash equivalents at beginning of period
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1,870
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364
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Cash and cash equivalents at end of period
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$
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4,610
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$
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1,743
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Supplemental Disclosures of Cash Flow Information:
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Cash paid (received) during year for:
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Interest
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$
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193
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$
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-
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Income taxes
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$
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-
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$
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-
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The accompanying notes are an integral part of these Financial Statements.
F-3
VET ONLINE SUPPLY INC.
NOTES TO UNAUDITED FINANCIAL STATEMENTS
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1.
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BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
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Business Activity: Vet Online Supply Inc. (the "Company") is a Florida corporation incorporated on May 31, 2014. We are a US based reseller of premium veterinary supplies. The goal of "Vet Online Supply" is to provide the USA with value priced, superior quality products. Vet Online Supply sources our products through Concord Veterinary Supply. Concord, established in 1999, is now one of Canada’s largest, independent suppliers of veterinary surgical and dental instruments. Our headquarters are located at 9612 West Hawthorne Crystal River, Florida 34428.
During August 2015 the Company filed amended articles with the Florida Secretary of State to:
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-
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Set a series of preferred stock, each one share being convertible into one share of common stock and with no voting rights;
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-
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Set par value for each of the preferred and common stock at $0.001 per share.
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On July 25, 2016, the Company filed a Certificate of Amendment with the State of Florida to increase the authorized Common Stock, par value $0.001, to 8,000,000,000 common shares, and to effect a forward split of 150 shares for each 1 share of the Company’s issued Common Stock (“Forward Split”). The effective date of the Forward Split is July 28, 2016.
All share and per share data contained in these financial statements reflects the retroactive application of the aforementioned forward share split.
To date, our activities have been limited to formation, the raising of equity capital, and the initial stages of implementation of our business plan. We have filed a Form S-1 Registration Statement with the U.S. Securities and Exchange Commission, have received a notice of effect and trade on the OTC Markets, PINK under the symbol VTNL. We are continuing to explore additional sources of capital. We anticipate incurring operating losses as we continue to implement our business plan.
Unaudited Interim Financial Statements
The unaudited interim consolidated financial statements of the Company have been prepared in accordance with United States generally accepted accounting principles (“GAAP”) for interim financial information and the rules and regulations of the Securities and Exchange Commission (“SEC”). They do not include all information and footnotes required by GAAP for complete financial statements. Except as disclosed herein, there have been no material changes in the information disclosed in the notes to the financial statements for the period ended December 31, 2015, included in the Company’s Annual Report on Form 10-K, filed with the SEC. The interim unaudited consolidated financial statements should be read in conjunction with those audited financial statements included in Form 10-K. In the opinion of management, all adjustments considered necessary for fair presentation, consisting solely of normal recurring adjustments, have been made. Operating results for the nine months ended September 30, 2016 are not necessarily indicative of the results that may be expected for the year ending December 31, 2016.
Financial Statement Presentation: The audited financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP").
Fiscal year end: The Company has selected December 31 as its fiscal year end.
Use of Estimates: The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported therein. Due to the inherent uncertainty involved in making estimates, actual results reported in future periods may be based upon amounts that differ from these estimates.
Cash Equivalents: The Company considers all highly liquid investments with maturities of 90 days or less from the date of purchase to be cash equivalents.
F-4
VET ONLINE SUPPLY INC.
NOTES TO UNAUDITED FINANCIAL STATEMENTS
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1.
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BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont’d)
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Revenue recognition and related allowances: Revenue from the sale of goods is recognized when the risks and rewards of ownership have been transferred to the customer, which is usually when title passes. Revenue is measured at the fair value of the consideration received, net of trade discounts and sales taxes.
Accounts Receivable and Allowance for Doubtful Accounts: Accounts receivable are stated at the amount that management expects to collect from outstanding balances. Bad debts and allowances are provided based on historical experience and management’s evaluation of outstanding accounts receivable. Management evaluates past due or delinquency of accounts receivable based on the open invoices aged on due date basis. The allowance for doubtful accounts at September 30, 2016 and December 31, 2015 is Nil.
Inventories: The Company is a reseller of premium veterinary supply products and as such will not maintain inventory as all items are directly drop shipped to customers when ordered and no inventory is held on hand as a result.
Warranty: The Company is a reseller of products which are shipped to our customers directly from the manufacturer and as a result, there are no costs that may be incurred by the Company under the terms of the limited warranty provided by the manufacturers directly to the purchasers. We do not provide any provisions for obligations which may arise under manufacturer’s warranties and therefore at no time incur any warranty liabilities.
Advertising and Marketing Costs: Advertising and marketing costs are expensed as incurred and were $nil during the nine-month period ended September 30, 2016 ($15,000 – September 30, 2015)
Income taxes: The Company has adopted SFAS No. 109 – “Accounting for Income Taxes”. ASC Topic 740 requires the use of the asset and liability method of accounting for income taxes. Under the asset and liability method of ASC Topic 740, deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.
Basic and Diluted Loss Per Share: In accordance with ASC Topic 280 – “Earnings Per Share”, the basic loss per common share is computed by dividing net loss available to common stockholders by the weighted average number of common shares outstanding. Diluted loss per common share is computed similar to basic loss per common share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive.
New Accounting Pronouncements:
The Company has implemented all new accounting pronouncements that are in effect and that may impact its financial statements and does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.
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2.
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GOING CONCERN
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The Company has experienced net losses to date, and it has not generated revenue from operations, we will need additional working capital to service debt and for ongoing operations, which raises substantial doubt about its ability to continue as a going concern. Management of the Company has developed a strategy to meet operational shortfalls which may include equity funding, short term or long term financing or debt financing, to enable the Company to reach profitable operations.
F-5
VET ONLINE SUPPLY INC.
NOTES TO UNAUDITED FINANCIAL STATEMENTS
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3.
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DEFERRED OFFERING COSTS
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The Company has filed a Form S-1 Registration Statement to offer to the public up to 900,000,000 common shares at $0.000667 per share. The $12,500 in costs relating to such Registration Statement was applied to additional paid in capital as at March 31, 2016.
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4.
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RESELLER AGREEMENT AND PROMISSORY NOTE
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On June 1, 2014 the Company entered into a Reseller Agreement with Concord Veterinary Supplies Inc., (“Concord”), where under Concord has authorized the non-exclusive right to Vet Online Supply, Inc. to market, promote, advertise, sell, distribute and deliver, veterinary products carried by Concord Veterinary Supply, which are listed on www.concord-surgical.com, for a one-time fee of $50,000. The fee payable has been secured by an interest free convertible promissory note (the “Note”) due within ninety (90) days of the Company getting notice of effect from its S-1 Registration Statement as filed with the Securities and Exchange Commission, which occurred December 22, 2015. At any time prior to maturity of the Note, Concord Veterinary Supply may elect to convert the debt amount into shares of the common stock of the Company at a fixed price of $0.000667 per share.
There is no beneficial conversion feature resulting from the conversion price compared to market price.
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5.
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COMMON AND PREFERRED STOCK
|
The Company has authorized 10,000,000 shares of preferred stock with par value of $0.001 and 8,000,000,000 shares of common stock, with par value of $0.001. Each one share of preferred stock is convertible into one share of common stock, and preferred stock carries no voting rights. As of September 30, 2016 and December 31, 2015, no preferred shares were issued and outstanding.
Common Shares issued during the nine months ended September 30, 2016:
During the nine months ended September 30, 2016, the Company has received proceeds totaling $35,500 from various parties subscribing for a total of 53,250,000 shares at $0.000667 per share under our Form S-1 registration statement. 53,250,000 shares of the Company’s common stock were issued in respect of these subscriptions.
On July 25, 2016, 1,500,000,000 shares of treasury stock were returned.
Common Shares issued during the year ended December 31, 2015:
On May 1, 2015, Mr. Minsky returned 1,500,000,000 shares of the Company issued for services provided during fiscal 2014 in exchange for $1,000. The shares were returned to treasury and the Company posted as treasury stock in the amount of $1,000 using the cost method.
On May 1, 2015 a signing bonus in the amount of $75,000 payable by way of 7,500,000,000 shares of the Company’s common stock as determined by the Company’s board of directors, was issued to our sole officer and director, Mr. Edward Aruda.
As at September 30, 2016, there were 7,553,250,000 shares issued and outstanding.
F-6
VET ONLINE SUPPLY INC.
NOTES TO UNAUDITED FINANCIAL STATEMENTS
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6.
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RELATED PARTY TRANSACTIONS
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(1) Mr. Harold Minsky, Former President and director
On May 1, 2015, the Company received the resignation of the President and sole director, Mr. Harold Minsky. In addition, Mr. Minsky concurrently agreed to return 1,500,000,000 shares of the Company issued for services provided in exchange for $1,000 effective as of the date of his resignation.
During the year ended December 31, 2015 a total of $11,000 has been accrued in respect of fees payable to our former President and director, and a total of $12,000 is reflected on the Company’s balance sheet as accounts payable, related party as at December 31, 2015.
During the nine months ended September 30, 2016, the Company paid $12,000 in full to Mr. Harold Minsky.
(2) Mr. Edward Aruda, President, CEO and director
On May 1, 2015 Mr. Edward Aruda was appointed to serve as President, CEO and Director of the Company to manage the affairs of the Company for a one (1) year period (the “Term”) under a management agreement beginning on the Effective Date, and thereafter the Term may be renewable for six months unless and until such time as either Mr. Edward Aruda or the Company shall give written notice to the other at least 30 days prior to the expiration of the then current Term that no such automatic extension shall occur. In exchange, a signing bonus in the amount of $75,000 payable by way of 7,500,000,000 shares of the Company’s common stock was issued as fully paid and non assessable to Mr. Aruda effective as of the date of the agreement.
On December 31, 2015, the Company issued a Promissory Note in the principal amount of $7,736 to Mr. Aruda, to evidence various funds previously advanced by Mr. Aruda to the Company during the year ended December 31, 2015 in order to settle certain accounts as they came due. The Promissory Note bears interest at 10% per annum and is due and payable on December 1, 2016.
On March 31, 2016 and June 30, 2016, the Company issued further Promissory Notes in the principal amounts of $2,771 and $5,240, respectively, to Mr. Aruda, to evidence various funds advanced by Mr. Aruda to the Company during the nine months ended September 30, 2016 in order to settle certain accounts as they came due. The Promissory Notes bear interest at 10% per annum and are due and payable March 31, 2017 and June 30, 2017, respectively.
During the nine months ended September 30, 2016, the Company repaid $10,700 to Mr. Aruda in respect of funds previously advanced, including $10,507 in principal and $193 in accrued interest to settle the December 31, 2015 and March 31 2015 notes in full.
As of September 30, 2016, $5,240 is reflected on the Company’s balance sheet as promissory notes payable – related party (December 31, 2015 - $7,736) in respect of amounts which remain payable to Mr. Aruda.
|
7.
|
INCOME TAXES
|
Deferred income taxes are determined using the liability method for the temporary differences between the financial reporting basis and income tax basis of the Company’s assets and liabilities. Deferred income taxes are measured based on the tax rates expected to be in effect when the temporary differences are included in the Company’s tax return. Deferred tax assets and liabilities are recognized based on anticipated future tax consequences attributable to differences between financial statement carrying amounts of assets and liabilities and their respective tax bases.
Operating loss carry-forwards generated during the period from May 25, 2014 (date of inception) through September 30, 2016 of approximately $192,920, will begin to expire in 2034. The Company applies a statutory income tax rate of 34%. Accordingly, deferred tax assets related to net operating loss carry-forwards total approximately $65,590 at September 30, 2016. For the nine months ended September 30, 2016, the valuation allowance increased by approximately $10,180.
F-7
VET ONLINE SUPPLY INC.
NOTES TO UNAUDITED FINANCIAL STATEMENTS
|
8.
|
SUBSEQUENT EVENTS
|
The Company has evaluated subsequent events from the balance sheet date through the date that the financial statements were issued and determined that there are no additional subsequent events to disclose.
F-8
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION
This quarterly report contains forward-looking statements relating to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as "may", "should", "intends", "expects", "plans", "anticipates", "believes", "estimates", "predicts", "potential", or "continue" or the negative of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties and other factors which may cause our or our industry's actual results, levels of activity or performance to be materially different from any future results, levels of activity or performance expressed or implied by these forward-looking statements.
Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity or performance. You should not place undue reliance on these statements, which speak only as of the date that they were made. These cautionary statements should be considered with any written or oral forward-looking statements that we may issue in the future. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results, later events or circumstances or to reflect the occurrence of unanticipated events.
In this report unless otherwise specified, all dollar amounts are expressed in United States dollars and all references to “common shares” refer to the common shares of our capital stock.
The management’s discussion and analysis of our financial condition and results of operations are based upon our financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP").
As used in this quarterly report, the terms "we", "us", "our", and "our company" means Vet Online Supply, Inc., unless otherwise indicated.
Corporate Information
Vet Online Supply, Inc. was incorporated in the State of Florida on May 31, 2014. We are a company that engages in the sale of veterinary supplies for vet clinics of all sizes. We sell our products on the eCommerce web-based platform called OsCommerce, at our website www.vetonlinesupply.com. Our website gives our customers the ability to purchase veterinary supplies at affordable prices, making an order any time of the day, any day of the week. The Company’s fiscal year end is December 31. Our shares are listed for trading on OTC Markets, PINK under the symbol VTNL.
Other than as set out herein, we have not been involved in any bankruptcy, receivership or similar proceedings, nor have we been a party to any material reclassification, merger, consolidation or purchase or sale of a significant amount of assets not in the ordinary course of our business.
Liquidity and Capital Resources
The following discussion of our financial condition and results of operations should be read in conjunction with our unaudited financial statements for the nine months ended September 30, 2016 and audited financial statements for the year ended December 31, 2015, along with the accompanying notes.
At September 30, 2016 we had cash on hand totaling $4,610 (December 31, 2015 - $1,870), total assets of $4,787 (December 31, 2015 - $14,547) and liabilities of $85,557 (December 31, 2015 - $88,377). We must secure additional funds in order to continue our business. We continue to receive advances from our sole officer and director in order to pay expenses related to meeting our public reporting obligations including legal, accounting and filing fees. While we have raised $35,500 under our Form S-1 Registration Statement, we will need to secure additional financing to fund future filings. To date loans when required have been able to be secured from management of the Company, however we cannot provide any assurance that we will be able to raise additional proceeds or secure additional loans in the future to cover our expenses related to maintaining our reporting company status (estimated at $25,000 for the upcoming 12 months). Furthermore, there is no guarantee we will receive the required financing to complete our business strategies; we cannot provide any assurance that future financing will be available to us on acceptable terms. If financing is not available on satisfactory terms, we may be unable to continue, develop or expand our operations. If we are unable to accomplish raising adequate funds, then it would be likely that any investment made into the Company would be lost in its entirety.
Results of Operations
For the three months ended September 30, 2016 and 2015
We have generated minimal gross profit since inception, and an amount totaling $0 in gross profit during the three months ended September 30, 2016 as compared to $19 in gross profit during the three months ended September 30, 2015. Additionally, we continue to incur general and administrative costs related to our business plan and the filing requirements as a public reporting issuer. Such general and administrative costs totaled $7,431 during the three months ended September 30, 2016 ($5,494 – September 30, 2015). The increase to costs is primarily related to an increase in professional fees associated with our ongoing public reporting requirements and Edgar and XBRL filings. Our net loss for the three months ended September 30, 2016 totaled $7,562, as compared to $5,475 at September 30, 2015.
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For the Nine Months ended September 30, 2016 and 2015
We have generated minimal gross profit since inception, and an amount totaling $352 in gross profit during the nine months ended September 30, 2016 as compared to $647 in gross profit during the nine months ended September 30, 2015. Additionally, we continue to incur general and administrative costs related to our business plan and the filing requirements as a public reporting issuer. Such general and administrative costs totaled $29,968 during the nine months ended September 30, 2016 ($106,629 – September 30, 2015). The reduction to costs is primarily related to a reduction in legal fees and other professional fees associated with the initial filing of our Registration Statement on Form S-1. Our net loss for the nine months ended September 30, 2016 totaled $29,940, including interest expenses of $324 in the period, as compared to $105,982 at September 30, 2015 with no comparative charges for interest expenses.
Off-Balance Sheet Arrangements
We have no 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 stockholders.
Critical Accounting Policies and Estimates
The preparation of our financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the 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. On an on-going basis, management evaluates its estimates and judgments which are based on historical experience and on various other factors that are believed to be reasonable under the circumstances. The results of their evaluation form the basis for making judgments about the carrying values of assets and liabilities. Actual results may differ from these estimates under different assumptions and circumstances. Our significant accounting policies are more fully discussed in the Notes to our Financial Statements, included herein.
Recent Accounting Pronouncements
The Company has implemented all new accounting pronouncements that are in effect and that may impact its financial statements and does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.
A smaller reporting company is not required to provide the information required by this Item.
ITEM 4. CONTROLS AND PROCEDURES
Management’s Report on Disclosure Controls and Procedures
We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports filed under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms, and that such information is accumulated and communicated to our management, including our president and chief financial officer (our principal executive officer, principal financial officer and principal accounting officer) to allow for timely decisions regarding required disclosure.
As of the end of the quarter covered by this report, we carried out an evaluation, under the supervision and with the participation of our president and chief financial officer (our principal executive officer, principal financial officer and principal accounting officer), of the effectiveness of the design and operation of our disclosure controls and procedures. Based on the foregoing, our president and chief financial officer (our principal executive officer, principal financial officer and principal accounting officer) concluded that our disclosure controls and procedures were not effective as of the end of the period covered by this quarterly report. Our company is in the process of adopting specific internal control mechanisms to ensure effectiveness as we grow. We have engaged an outside consultant to assist in adopting new measures to improve upon our internal controls. Future controls, among other things, will include more checks and balances and communication strategies between the management and the board, once we are able to secure additional board members, to ensure efficient and effective oversight over company activities as well as more stringent accounting policies to track and update our financial reporting.
Changes in Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting during the quarterly period covered by this report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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PART II – OTHER INFORMATION
We know of no material, existing or pending legal proceedings against us, nor are we involved as a plaintiff in any material proceeding or pending litigation. There are no proceedings in which any of our directors, officers or affiliates, or any registered or beneficial shareholder, is an adverse party or has a material interest adverse to our company.
A smaller reporting company is not required to provide the information required by this Item.
None.
None.
Not Applicable.
On July 25, 2016, the Company filed a Certificate of Amendment with the State of Florida to increase the authorized Common Stock, par value $0.001, to 8,000,000,000 common shares, and to effect a forward split of 150 shares for each 1 share of the Company’s issued Common Stock (the “Forward Split”). The effective date of the Forward Split is July 28, 2016.
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ITEM 6. EXHIBITS
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Exhibit Number
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Description
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3.1
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Articles of Incorporation of Vet Online Supply, Inc.
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3.2
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Bylaws of Vet Online Supply, Inc.
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3.3
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Amendment to Articles of Incorporation
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3.4
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Amendment to Articles of Incorporation to increase authorized common shares*
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10.1
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Management Agreement between the Company and Edward Aruda dated May 1, 2015
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10.2
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March 1, 2015 Consulting Engagement Separation Degrees-One, Inc.
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10.3
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Reseller Agreement with Concord Veterinary Supply
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10.4
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Convertible Promissory note between the Company and Concord Veterinary Supply dated June 1, 2014
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10.5
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Promissory Note between the Company and Edward Aruda dated June 30, 2016*
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31.1
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Certification of the Chief Executive Officer required under Rule 13a-14(a)/15d-14(a) of the Exchange Act*
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31.2
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Certification of the Chief Financial Officer required under Rule 13a-14(a)/15d-14(a) of the Exchange Act*
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32.1
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Certification of the Chief Executive Officer and Chief Financial Officer required under Section 1350 of the Exchange Act*
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101.INS
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XBRL Instance Document*
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101.SCH
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XBRL Taxonomy Extension Schema*
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101.CAL
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XBRL Taxonomy Extension Calculation Linkbase*
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101.DEF
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XBRL Taxonomy Extension Definition Linkbase*
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101.LAB
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XBRL Taxonomy Extension Label Linkbase*
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101.PRE
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XBRL Taxonomy Extension Presentation Linkbase*
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*Filed herewith
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
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VET ONLINE SUPPLY, INC.
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Date:
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October 20, 2016
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By:
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/s/ Edward Aruda
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Name:
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Edward Aruda
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Title:
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President, Chief Executive Officer, Chief Financial Officer, Director
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