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 fiscal quarter ended October 31, 2011
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from ___________ to _____________
Commission File Number: 000-54342
ONLINE TELE-SOLUTIONS INC.
(Name of small business issuer as specified in its charter)
Nevada 98-0583175
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
Block 225, 02-213, Tampines St. 23
Singapore 521225
(Address of principal executive offices, including zip code)
(702) 553-3026
(Registrant's telephone number, including area code)
Indicate by check whether the registrant (1) filed all reports required to be
filed by Section 13 or 15(d) of the Exchange Act of 1934 during the past 12
months (or for such shorter period that the registrant was required to file such
reports), and (2) has been subject to such filing requirements for the past 90
days. Yes [X] No [ ]
Indicate by check mark whether the registrant has submitted electronically and
posted on its corporate Web site, if any, every Interactive Data File required
to be submitted and posted pursuant to Rule 405 of Regulation S-T (ss.232.405 of
this chapter) during the preceding 12 months (or for such shorter period that
the registrant was required to submit and post such files). Yes [X] No [ ]
Indicate by check mark whether the registrant is a large accelerated 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]
Indicate by check mark whether the Registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act). YES [X] NO [ ]
The issuer had 2,200,000 shares of its common stock issued and outstanding as of
December 15, 2011.
AVAILABLE INFORMATION
Our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports
on Form 8-K and all amendments to those reports that we file with the Securities
and Exchange Commission, or SEC, are available at the SEC's public reference
room at 100 F Street, N.E., Washington, D.C. 20549. The public may obtain
information on the operation of the public reference room by calling the SEC at
1-800-SEC-0330. The SEC also maintains a website at www.sec.gov that contains
reports, proxy, and information statements and other information regarding
reporting companies.
2
TABLE OF CONTENTS
Page
----
PART I
ITEM 1. Financial Statements 5
ITEM 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations 17
ITEM 3. Quantitative and Qualitative Disclosures about Market Risk 19
ITEM 4. Controls and Procedures 19
PART II
ITEM 1. Legal Proceedings 19
ITEM 1A. Risk Factors 19
ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds 20
ITEM 3. Defaults upon Senior Securities 20
ITEM 4. (Removed and Reserved) 20
ITEM 5. Other Information 20
ITEM 6. Exhibits 20
3
CAUTIONARY STATEMENT CONCERNING
FORWARD-LOOKING STATEMENTS
USE OF NAMES
In this quarterly report, the terms "Online Tele," "Company," "we," or "our,"
unless the context otherwise requires, mean Online Tele-Solutions, Inc.".
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q and other reports that we file with the SEC
contain statements that are considered forward-looking statements.
Forward-looking statements give the Company's current expectations, plans,
objectives, assumptions, or forecasts of future events. All statements other
than statements of current or historical fact contained in this Quarterly
Report, including statements regarding the Company's future financial position,
business strategy, budgets, projected costs and plans and objectives of
management for future operations, are forward-looking statements. In some cases,
you can identify forward-looking statements by terminology such as "anticipate,"
"estimate," "plans," "potential," "projects," "ongoing," "expects," "management
believes," "we believe," "we intend," and similar expressions. These statements
are based on the Company's current plans and are subject to risks and
uncertainties, and, as such, the Company's actual future activities and results
of operations may be materially different from those set forth in the
forward-looking statements. Any or all of the forward-looking statements in this
Quarterly Report may turn out to be inaccurate and, as such, you should not
place undue reliance on these forward-looking statements. The Company has based
these forward-looking statements largely on its current expectations and
projections about future events and financial trends that it believes may affect
its financial condition, results of operations, business strategy and financial
needs. The forward-looking statements can be affected by inaccurate assumptions
or by known or unknown risks, uncertainties, and assumptions due to a number of
factors.
These forward-looking statements speak only as of the date on which they are
made, and except to the extent required by federal securities laws, we undertake
no obligation to update any forward-looking statements to reflect events or
circumstances after the date on which the statement is made or to reflect the
occurrence of unanticipated events. In addition, we cannot assess the impact of
each factor on our business or the extent to which any factor, or combination of
factors, may cause actual results to differ materially from those contained in
any forward-looking statements. All subsequent written and oral forward-looking
statements attributable to the Company or persons acting on its behalf are
expressly qualified in their entirety by the cautionary statements contained in
this Quarterly Report.
4
PART I
ITEM 1. FINANCIAL STATEMENTS.
ONLINE TELE-SOLUTIONS INC.
(A Development Stage Company)
BALANCE SHEETS
October 31, January 31,
2011 2011
-------- --------
(Unaudited)
ASSETS
Current asset
Cash $ 15,384 $ 126
Prepaid expenses -- 2,400
-------- --------
Total assets $ 15,384 $ 2,526
======== ========
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities
Accounts payable and accrued expenses $ 5,801 $ 4,932
Due to stockholder 30,700 500
-------- --------
Total liabilities 36,501 5,432
-------- --------
Stockholders' deficit
Common stock: $0.001 par value; 50,000,000 shares authorized;
2,200,000 shares issued and outstanding 2,200 2,200
Additional paid-in capital 47,800 47,800
Deficit accumulated during the development stage (71,117) (52,906)
-------- --------
Total stockholders' deficit (21,117) (2,906)
-------- --------
Total liabilities and stockholders' deficit $ 15,384 $ 2,526
======== ========
See accompanying notes to the financial statements.
5
ONLINE TELE-SOLUTIONS INC.
(A Development Stage Company)
STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Three Months
Ended Ended
October 31, October 31,
2011 2010
---------- ----------
REVENUE $ -- $ --
---------- ----------
OPERATING EXPENSES
Professional fees 1,750 1,000
General and administrative 2,812 1,892
---------- ----------
Loss before income taxes (4,562) (2,892)
Provision for income taxes -- --
---------- ----------
Net loss $ (4,562) $ (2,892)
========== ==========
Net loss per common share -
basic and diluted $ (0.00) $ (0.00)
========== ==========
Weighted average common shares
outstanding - basic and diluted 2,200,000 2,200,000
========== ==========
See accompanying notes to the financial statements.
6
ONLINE TELE-SOLUTIONS INC.
(A Development Stage Company)
STATEMENTS OF OPERATIONS
(Unaudited)
For the
Period from
June 5, 2008
Nine Months Nine Months (Inception)
Ended Ended through
October 31, October 31, October 31,
2011 2010 2011
---------- ---------- ----------
REVENUE $ -- $ -- $ --
---------- ---------- ----------
OPERATING EXPENSES
Professional fees 12,817 8,341 41,871
General and administrative 5,394 3,964 29,246
---------- ---------- ----------
Loss before income taxes (18,211) (12,305) (71,117)
Provision for income taxes -- -- --
---------- ---------- ----------
Net loss $ (18,211) $ (12,305) $ (71,117)
========== ========== ==========
Net loss per common share -
basic and diluted $ (0.00) $ (0.00)
========== ==========
Weighted average common shares
outstanding - basic and diluted 2,200,000 2,200,000
========== ==========
See accompanying notes to the financial statements.
7
ONLINE TELE-SOLUTIONS INC.
(A Development Stage Company)
STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT)
For the Period from June 5, 2008 (Inception) Through October 31, 2011
(Unaudited)
Deficit
Accumulated Total
Common Stock Additional During the Stockholders'
---------------------- Paid in Development Equity
Shares Amount Capital Stage (Deficit)
------ ------ ------- ----- ---------
June 5, 2008 (inception) -- $ -- $ -- $ -- $ --
Shares issued to founder for cash on
August 1, 2008 at $0.0125 per share 1,500,000 1,500 13,500 -- 15,000
Shares issued from August 1, 2008 through
October 27, 2008 for cash at $0.05 per share 700,000 700 34,300 -- 35,000
Net loss -- -- -- (4,500) (4,500)
--------- --------- --------- --------- ---------
Balance, January 31, 2009 2,200,000 2,200 47,800 (4,500) 45,500
Net loss -- -- -- (17,410) (17,410)
--------- --------- --------- --------- ---------
Balance, January 31, 2010 2,200,000 2,200 47,800 (21,910) 28,090
Net loss -- -- -- (30,996) (30,996)
--------- --------- --------- --------- ---------
Balance, January 31, 2011 2,200,000 2,200 47,800 (52,906) (2,906)
Net loss -- -- -- (18,211) (18,211)
--------- --------- --------- --------- ---------
Balance, October 31, 2011 2,200,000 $ 2,200 $ 47,800 $ (71,117) $ (21,117)
========= ========= ========= ========= =========
See accompanying notes to the financial statements.
8
ONLINE TELE-SOLUTIONS INC.
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
(Unaudited)
For the
Period from
June 5, 2008
Nine Months Nine Months (Inception)
Ended Ended through
October 31, October 31, October 31,
2011 2010 2011
-------- -------- --------
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $(18,211) $(12,305) $(71,117)
Adjustments to reconcile net loss to net
cash used in operating activities:
Write off of deposit on software -- -- 15,000
Changes in operating assets and liabilities:
Prepaid expenses 2,400 (3,200) --
Accounts payable and accrued expenses 869 (4,800) 5,801
-------- -------- --------
Net cash used in operating activities (14,942) (20,305) (50,316)
-------- -------- --------
CASH FLOWS FROM INVESTING ACTIVITIES
Deposit on software purchase -- -- (15,000)
-------- -------- --------
Net cash used in investing activities -- -- (15,000)
-------- -------- --------
CASH FLOWS FROM FINANCING ACTIVITIES
Advance from stockholder 30,200 -- 30,700
Proceeds from issuance of common stock -- -- 50,000
-------- -------- --------
Net Cash provided by financing activities 30,200 -- 80,700
-------- -------- --------
Net change in cash 15,258 (20,305) 14,884
Cash, beginning of the period 126 20,590 --
-------- -------- --------
Cash, end of the period $ 15,384 $ 285 $ 15,384
======== ======== ========
Supplemental disclosure of cash flows information:
Cash paid for interest expense $ -- $ -- $ --
======== ======== ========
Cash paid for income taxes $ -- $ -- $ --
======== ======== ========
See accompanying notes to the financial statements.
9
ONLINE TELE-SOLUTIONS INC.
(A Development Stage Company)
October 31, 2011 AND 2010
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
NOTE 1 - NATURE OF OPERATIONS
Online Tele-Solutions, Inc. (a development stage company) ("Online
Tele-Solutions" or the "Company") was incorporated under the laws of the State
of Nevada on June 5, 2008. Initial operations have included organization and
incorporation, target market identification, marketing plans, and capital
formation. A substantial portion of the Company's activities has involved
developing a business plan and establishing contacts and visibility in the
marketplace. The Company has generated no revenues since inception.
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PRESENTATION - UNAUDITED INTERIM FINANCIAL INFORMATION
The accompanying unaudited interim financial statements and related notes have
been prepared in accordance with accounting principles generally accepted in the
United States of America ("U.S. GAAP") for interim financial information, and
with the rules and regulations of the United States Securities and Exchange
Commission ("SEC") to Form 10-Q and Article 8 of Regulation S-X. Accordingly,
they do not include all of the information and footnotes required by U.S. GAAP
for complete financial statements. The unaudited interim financial statements
furnished reflect all adjustments (consisting of normal recurring accruals)
which are, in the opinion of management, necessary to a fair statement of the
results for the interim periods presented. Interim results are not necessarily
indicative of the results for the full fiscal year. These financial statements
should be read in conjunction with the financial statements of the Company for
the fiscal year ended January 31, 2011 and notes thereto contained in the
Company's Annual Report on Form 10-K as filed with the SEC on May 15, 2011.
DEVELOPMENT STAGE COMPANY
The Company is a development stage company as defined by section 810-10-20 of
the FASB Accounting Standards Codification. The Company is still devoting
substantially all of its efforts on establishing the business and its planned
principal operations have not commenced. All losses accumulated since inception
have been considered as part of the Company's exploration stage activities.
USE OF ESTIMATES
The preparation of the Company's financial statements in conformity with
accounting principles generally accepted in the United States requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and liabilities at
the date of the financial statements and the reported amount of revenues and
expenses during the reporting period.
The Company's significant estimates include the fair value of financial
instruments; income tax provision and valuation allowance of deferred tax
assets; and the assumption that the Company will continue as a going concern.
Those significant accounting estimates or assumptions bear the risk of change
due to the fact that there are uncertainties attached to those estimates or
assumptions, and certain estimates or assumptions are difficult to measure or
value.
10
Management bases its estimates on historical experience and on various
assumptions that are believed to be reasonable under the circumstances, the
results of which form the basis for making judgments about the carrying values
of assets and liabilities that are not readily apparent from other sources.
Management regularly reviews its estimates utilizing currently available
information, changes in facts and circumstances, historical experience and
reasonable assumptions. After such reviews, and if deemed appropriate, those
estimates are adjusted accordingly. Actual results could differ from those
estimates.
FAIR VALUE OF FINANCIAL INSTRUMENTS
The Company follows paragraph 825-10-50-10 of the FASB Accounting Standards
Codification for disclosures about fair value of its financial instruments and
paragraph 820-10-35-37 of the FASB Accounting Standards Codification ("Paragraph
820-10-35-37") to measure the fair value of its financial instruments. Paragraph
820-10-35-37 establishes a framework for measuring fair value in generally
accepted accounting principles (U.S. GAAP), and expands disclosures about fair
value measurements. To increase consistency and comparability in fair value
measurements and related disclosures, Paragraph 820-10-35-37 establishes a fair
value hierarchy which prioritizes the inputs to valuation techniques used to
measure fair value into three (3) broad levels. The fair value hierarchy gives
the highest priority to quoted prices (unadjusted) in active markets for
identical assets or liabilities and the lowest priority to unobservable inputs.
The three (3) levels of fair value hierarchy defined by Paragraph 820-10-35-37
are described below:
Level 1 Quoted market prices available in active markets for identical assets
or liabilities as of the reporting date.
Level 2 Pricing inputs other than quoted prices in active markets included in
Level 1, which are either directly or indirectly observable as of the
reporting date.
Level 3 Pricing inputs that are generally observable inputs and not
corroborated by market data.
Financial assets are considered Level 3 when their fair values are determined
using pricing models, discounted cash flow methodologies or similar techniques
and at least one significant model assumption or input is unobservable.
The fair value hierarchy gives the highest priority to quoted prices
(unadjusted) in active markets for identical assets or liabilities and the
lowest priority to unobservable inputs. If the inputs used to measure the
financial assets and liabilities fall within more than one level described
above, the categorization is based on the lowest level input that is significant
to the fair value measurement of the instrument.
The carrying amounts of the Company's financial assets and liabilities, such as
cash, prepaid expenses, accounts payable and accrued expenses, approximate their
fair values because of the short maturity of these instruments.
Transactions involving related parties cannot be presumed to be carried out on
an arm's-length basis, as the requisite conditions of competitive, free-market
dealings may not exist. Representations about transactions with related parties,
if made, shall not imply that the related party transactions were consummated on
terms equivalent to those that prevail in arm's-length transactions unless such
representations can be substantiated.
11
It is not however, practical to determine the fair value of advances from
stockholders due to their related party nature.
FISCAL YEAR END
The Company elected January 31 as its fiscal year ending date.
CASH EQUIVALENTS
The Company considers all highly liquid investments with maturities of three
months or less at the time of purchase to be cash equivalents.
RELATED PARTIES
The Company follows subtopic 850-10 of the FASB Accounting Standards
Codification for the identification of related parties and disclosure of related
party transactions.
Pursuant to Section 850-10-20 the Related parties include a. affiliates of the
Company; b. Entities for which investments in their equity securities would be
required, absent the election of the fair value option under the Fair Value
Option Subsection of Section 825-10-15, to be accounted for by the equity method
by the investing entity; c. trusts for the benefit of employees, such as pension
and profit-sharing trusts that are managed by or under the trusteeship of
management; d.principal owners of the Company; e. management of the Company; f.
other parties with which the Company may deal if one party controls or can
significantly influence the management or operating policies of the other to an
extent that one of the transacting parties might be prevented from fully
pursuing its own separate interests; and g. Other parties that can significantly
influence the management or operating policies of the transacting parties or
that have an ownership interest in one of the transacting parties and can
significantly influence the other to an extent that one or more of the
transacting parties might be prevented from fully pursuing its own separate
interests.
The financial statements shall include disclosures of material related party
transactions, other than compensation arrangements, expense allowances, and
other similar items in the ordinary course of business. However, disclosure of
transactions that are eliminated in the preparation of consolidated or combined
financial statements is not required in those statements. The disclosures shall
include: a. the nature of the relationship(s) involvedb. description of the
transactions, including transactions to which no amounts or nominal amounts were
ascribed, for each of the periods for which income statements are presented, and
such other information deemed necessary to an understanding of the effects of
the transactions on the financial statements; c. the dollar amounts of
transactions for each of the periods for which income statements are presented
and the effects of any change in the method of establishing the terms from that
used in the preceding period; and d. mounts due from or to related parties as of
the date of each balance sheet presented and, if not otherwise apparent, the
terms and manner of settlement.
COMMITMENT AND CONTINGENCIES
The Company follows subtopic 450-20 of the FASB Accounting Standards
Codification to report accounting for contingencies. Certain conditions may
exist as of the date the financial statements are issued, which may result in a
loss to the Company but which will only be resolved when one or more future
events occur or fail to occur. The Company assesses such contingent liabilities,
and such assessment inherently involves an exercise of judgment. In assessing
loss contingencies related to legal proceedings that are pending against the
Company or unasserted claims that may result in such proceedings, the Company
evaluates the perceived merits of any legal proceedings or unasserted claims as
well as the perceived merits of the amount of relief sought or expected to be
sought therein.
If the assessment of a contingency indicates that it is probable that a material
loss has been incurred and the amount of the liability can be estimated, then
the estimated liability would be accrued in the Company's financial statements.
If the assessment indicates that a potentially material loss contingency is not
12
probable but is reasonably possible, or is probable but cannot be estimated,
then the nature of the contingent liability, and an estimate of the range of
possible losses, if determinable and material, would be disclosed.
Loss contingencies considered remote are generally not disclosed unless they
involve guarantees, in which case the guarantees would be disclosed. Management
does not believe, based upon information available at this time, that these
matters will have a material adverse effect on the Company's financial position,
results of operations or cash flows. However, there is no assurance that such
matters will not materially and adversely affect the Company's business,
financial position, and results of operations or cash flows.
REVENUE RECOGNITION
The Company applies paragraph 605-10-S99-1 of the FASB Accounting Standards
Codification for revenue recognition. The Company recognizes revenue when it is
realized or realizable and earned. The Company considers revenue realized or
realizable and earned when all of the following criteria are met: (i) persuasive
evidence of an arrangement exists, (ii) the product has been shipped or the
services have been rendered to the customer, (iii) the sales price is fixed or
determinable, and (iv) collectability is reasonably assured.
INCOME TAXES
The Company follows Section 740-10-30 of the FASB Accounting Standards
Codification, which requires recognition of deferred tax assets and liabilities
for the expected future tax consequences of events that have been included in
the financial statements or tax returns. Under this method, deferred tax assets
and liabilities are based on the differences between the financial statement and
tax bases of assets and liabilities using enacted tax rates in effect for the
year in which the differences are expected to reverse. Deferred tax assets are
reduced by a valuation allowance to the extent management concludes it is more
likely than not that the assets will not be realized. 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. The effect on deferred tax assets and liabilities of a
change in tax rates is recognized in the Statements of Operations in the period
that includes the enactment date.
The Company adopted section 740-10-25 of the FASB Accounting Standards
Codification ("Section 740-10-25"). Section 740-10-25 addresses the
determination of whether tax benefits claimed or expected to be claimed on a tax
return should be recorded in the financial statements. Under Section 740-10-25,
the Company may recognize the tax benefit from an uncertain tax position only if
it is more likely than not that the tax position will be sustained on
examination by the taxing authorities, based on the technical merits of the
position. The tax benefits recognized in the financial statements from such a
position should be measured based on the largest benefit that has a greater than
fifty percent (50%) likelihood of being realized upon ultimate settlement.
Section 740-10-25 also provides guidance on de-recognition, classification,
interest and penalties on income taxes, accounting in interim periods and
requires increased disclosures. The Company had no material adjustments to its
liabilities for unrecognized income tax benefits according to the provisions of
Section 740-10-25.
The estimated future tax effects of temporary differences between the tax basis
of assets and liabilities are reported in the accompanying consolidated balance
sheets, as well as tax credit carry-backs and carry-forwards. The Company
periodically reviews the recoverability of deferred tax assets recorded on its
consolidated balance sheets and provides valuation allowances as management
deems necessary.
Management makes judgments as to the interpretation of the tax laws that might
be challenged upon an audit and cause changes to previous estimates of tax
liability. In addition, the Company operates within multiple taxing
jurisdictions and is subject to audit in these jurisdictions. In management's
opinion, adequate provisions for income taxes have been made for all years. If
actual taxable income by tax jurisdiction varies from estimates, additional
allowances or reversals of reserves may be necessary.
13
NET LOSS PER COMMON SHARE
Net loss per common share is computed pursuant to section 260-10-45 of the FASB
Accounting Standards Codification. Basic net loss per common share is computed
by dividing net loss by the weighted average number of shares of common stock
outstanding during the period to reflect the potential dilution that could occur
from common shares issuable through contingent shares issuance arrangement,
stock options or warrants. Diluted net loss per common share is computed by
dividing net loss by the weighted average number of shares of common stock and
potentially outstanding shares of common stock during each period.
There were no potentially dilutive shares outstanding as of October 31, 2011 or
2010.
CASH FLOWS REPORTING
The Company adopted paragraph 230-10-45-24 of the FASB Accounting Standards
Codification for cash flows reporting, classifies cash receipts and payments
according to whether they stem from operating, investing, or financing
activities and provides definitions of each category, and uses the indirect or
reconciliation method ("Indirect method") as defined by paragraph 230-10-45-25
of the FASB Accounting Standards Codification to report net cash flow from
operating activities by adjusting net income to reconcile it to net cash flow
from operating activities by removing the effects of (a) all deferrals of past
operating cash receipts and payments and all accruals of expected future
operating cash receipts and payments and (b) all items that are included in net
income that do not affect operating cash receipts and payments. The Company
reports the reporting currency equivalent of foreign currency cash flows, using
the current exchange rate at the time of the cash flows and the effect of
exchange rate changes on cash held in foreign currencies is reported as a
separate item in the reconciliation of beginning and ending balances of cash and
cash equivalents and separately provides information about investing and
financing activities not resulting in cash receipts or payments in the period
pursuant to paragraph 830-230-45-1 of the FASB Accounting Standards
Codification.
SUBSEQUENT EVENTS
The Company follows the guidance in Section 855-10-50 of the FASB Accounting
Standards Codification for the disclosure of subsequent events. The Company will
evaluate subsequent events through the date when the financial statements are
issued. Pursuant to ASU 2010-09 of the FASB Accounting Standards Codification,
the Company as an SEC filer considers its financial statements issued when they
are widely distributed to users, such as through filing them on EDGAR.
RECENTLY ISSUED ACCOUNTING STANDARDS
In May 2011, the FASB issued the FASB Accounting Standards Update No. 2011-04
"Fair Value Measurement" ("ASU 2011-04"). This amendment and guidance are the
result of the work by the FASB and the IASB to develop common requirements for
measuring fair value and for disclosing information about fair value
measurements in accordance with U.S. GAAP and International Financial Reporting
Standards (IFRSs).
This update does not modify the requirements for when fair value measurements
apply; rather, they generally represent clarifications on how to measure and
disclose fair value under ASC 820, Fair Value Measurement, including the
following revisions:
* An entity that holds a group of financial assets and financial
liabilities whose market risk (that is, interest rate risk, currency
risk, or other price risk) and credit risk are managed on the basis of
the entity's net risk exposure may apply an exception to the fair
value requirements in ASC 820 if certain criteria are met. The
exception allows such financial instruments to be measured on the
basis of the reporting entity's net, rather than gross, exposure to
those risks.
14
* In the absence of a Level 1 input, a reporting entity should apply
premiums or discounts when market participants would do so when
pricing the asset or liability consistent with the unit of account.
* Additional disclosures about fair value measurements.
The amendments in this Update are to be applied prospectively and are effective
for public entity during interim and annual periods beginning after December 15,
2011.
In June 2011, the FASB issued the FASB Accounting Standards Update No. 2011-05 "
Comprehensive Income ("ASU 2011-05"), which was the result of a joint project
with the IASB and amends the guidance in ASC 220, Comprehensive Income, by
eliminating the option to present components of other comprehensive income (OCI)
in the statement of stockholders' equity. Instead, the new guidance now gives
entities the option to present all nonowner changes in stockholders' equity
either as a single continuous statement of comprehensive income or as two
separate but consecutive statements. Regardless of whether an entity chooses to
present comprehensive income in a single continuous statement or in two separate
but consecutive statements, the amendments require entities to present all
reclassification adjustments from OCI to net income on the face of the statement
of comprehensive income.
The amendments in this Update should be applied retrospectively and are
effective for public entity for fiscal years, and interim periods within those
years, beginning after December 15, 2011.
Management does not believe that any other recently issued, but not yet
effective accounting pronouncements, if adopted, would have a material effect on
the accompanying consolidated financial statements.
NOTE 3 - GOING CONCERN
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As reflected in the accompanying
financial statements, the Company had a deficit accumulated during the
development stage of $71,117 at October 31, 2011, a net loss of $18,211 and net
cash used in operating activities of $14,942 for the interim period then ended,
respectively, with no revenues earned since inception.
While the Company is attempting to commence operations and generate revenues,
the Company's cash position may not be sufficient enough to support the
Company's daily operations. Management intends to raise additional funds by way
of a public or private offering. Management believes that the actions presently
being taken to further implement its business plan and generate revenues provide
the opportunity for the Company to continue as a going concern. While the
Company believes in the viability of its strategy to generate revenues and in
its ability to raise additional funds, there can be no assurances to that
effect. The ability of the Company to continue as a going concern is dependent
upon the Company's ability to further implement its business plan and generate
revenues.
The financial statements do not include any adjustments that might be necessary
if the Company is unable to continue as a going concern.
NOTE 4 - RELATED PARTY TRANSACTIONS
FREE OFFICE SPACE
The Company has been provided office space by its Chief Executive Officer at no
cost. The management determined that such cost is nominal and did not recognize
the rent expense in its financial statements.
DUE TO STOCKHOLDER
The amount owing to stockholder is unsecured, non-interest bearing and due on
demand.
15
NOTE 5 - STOCKHOLDERS' DEFICIT
COMMON STOCK
On August 1, 2008 the Company issued 1,500,000 of its common stock at $0.05 to
the company's president for $15,000.
For the period from August 1, 2008 to October 27, 2008 the Company sold 700,000
shares of its common stock at $0.05 per share for $35,000.
CONTRIBUTION TO CAPITAL
During the quarter ended a stockholder of the Company advanced $200 for working
capital.
NOTE 6 - SUBSEQUENT EVENTS
Management performed an evaluation of the Company's activity that occurred after
the balance sheet date through the date when the financial statements were
issued to determine if they must be reported. The Management of the Company
determined that there are no reportable subsequent events to be disclosed.
16
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.
OVERVIEW
We were incorporated in the state of Nevada on June 5, 2008. Our offices are
currently located at Block 225, 02-213, Tampines St 23, Singapore 521225. Our
U.S.-based telephone number is (702) 553-3026. Our website, which is currently
being developed, is www.online-tele-solutions.com. The information that is or
will be contained on our website does not form a part of this quarterly report.
We are a development-stage company that has not generated any revenue and has
had limited operations to date. From June 5, 2008 (inception) to October 31,
2011, we have incurred accumulated net losses of $71,117. As of October 31,
2011, we had total assets of $15,384, and total liabilities of $36,501. Based on
our financial history since inception, our independent auditor has expressed
substantial doubt as to our ability to continue as a going concern.
We intend to develop and offer Internet-based hosted call center services for
small-to-medium- sized companies, or companies with between 10 - 500 employees,
that are seeking to establish their own internal support and telemarketing
divisions. We intend to provide call-center software to our customers which will
enable them to handle outbound calls, inbound calls and a combination of both
from their own locations. We intend to host our customers' calling data on our
servers, so that our customers can access the functionality of our software via
a web browser such as Internet Explorer. We expect our product will blend
together features of Voice over Internet Protocol ("VoIP") technology and
customer relationship management ("CRM") software. To date, we have secured
office space, taken steps to retain a transfer agent, and have been in contact
with professional advisors regarding legal compliance, accounting disclosure
statements and financial reporting. We also have begun our planning for
developing a website and searching for a contractor to develop that website. We
intend to launch our "information only" web site early in calendar year 2012.
During the 12-month period following the date of this quarterly report, we
intend to focus on product development and execution of the initial stage of our
marketing efforts. We do not expect to earn any sales revenue during this
initial 12-month period of operations. We anticipate that our revenue will come
from two primary sources: first, from direct sales to small and medium business
owners that subscribe to our online call center services and, second, from our
network of resellers. We anticipate that our operations will begin to generate
revenue approximately 12 to 24 months following the date of this quarterly
report.
We can offer no assurance that we will be successful in developing and offering
our products and services. Any number of factors may impact our ability to
develop our products and services, including our ability to obtain financing if
and when necessary; the availability of skilled personnel; market acceptance of
our products, if and when such are developed; and our ability to gain market
share. Our business will fail if we cannot successfully implement our business
plan or if we cannot develop or successfully market our products and services.
17
RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED OCTOBER 31, 2011 AND 2010
REVENUES
We had no revenues for the period from June 5, 2008 (date of inception) through
October 31, 2011.
EXPENSES
Our expenses for the nine months ended October 31, 2011 and 2010 were $18,211
and $12,305. Our expenses since our inception were $71,117. These expenses were
comprised primarily of general and administrative, and legal and accounting
expenses.
NET INCOME (LOSS)
Our net loss for the nine months ended October 31, 2011 and 2010 was $18,211 and
$12,305. During the period from June 5, 2008 (date of inception) through October
31, 2011, we incurred a net loss of $71,117. This loss consisted primarily of
administrative expenses and professional fees. Since inception, we have sold
2,200,000 shares of common stock.
LIQUIDITY AND CAPITAL RESOURCES
Our balance sheet as of October 31, 2011 reflects assets of $15,384. Cash and
cash equivalents from inception to date have been insufficient to provide the
working capital necessary to operate to date.
We anticipate generating losses and, therefore, may be unable to continue
operations in the future. If we require additional capital, we would have to
issue debt or equity or enter into a strategic arrangement with a third party.
There can be no assurance that additional capital will be available to us. We
currently have no agreements, arrangements or understandings with any person to
obtain funds through bank loans, lines of credit or any other sources.
GOING CONCERN CONSIDERATION
The financial statements contained herein for the fiscal quarter ended October
31, 2011, have been prepared on a "going concern" basis, which contemplates the
realization of assets and the satisfaction of liabilities in the normal course
of business. There is a significant risk that we will be unable to continue as a
going concern.
Management continues to seek funding from its shareholders and other qualified
investors to pursue its business plan. In the alternative, the Company may be
amenable to a sale, merger or other acquisition in the event such transaction is
deemed by management to be in the best interests of the shareholders.
18
OFF-BALANCE SHEET ARRANGEMENTS
We have no off-balance sheet arrangements.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
None.
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 (who is acting as our
principal executive officer, principal financial officer and principle
accounting officer) to allow for timely decisions regarding required disclosure.
As of October 31, 2011, the end of our quarter covered by this report, we
carried out an evaluation, under the supervision and with the participation of
our president (who is acting as our principal executive officer, principal
financial officer and principle accounting officer), of the effectiveness of the
design and operation of our disclosure controls and procedures. Based on the
foregoing, our president (who is acting as our principal executive officer,
principal financial officer and principle accounting officer) concluded that our
disclosure controls and procedures were effective as of the end of the period
covered by this quarterly report.
CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING
There have been no changes in our internal controls over financial reporting
that occurred during our quarter ended October 31, 2011 that have materially
affected, or are reasonably likely to materially affect, our internal controls
over financial reporting.
PART II
ITEM 1. LEGAL PROCEEDINGS.
None.
ITEM 1A. RISK FACTORS.
There have been no material changes from the risk factors disclosed in our S-1
filed on October 29, 2009, as amended.
19
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
None.
ITEM 4. (REMOVED AND RESERVED)
ITEM 5. OTHER INFORMATION.
None.
ITEM 6. EXHIBITS.
Exhibit No. Description
----------- -----------
3.1 Articles of Incorporation. (Attached as an exhibit to our
Registration Statement on Form S-1 originally filed with the SEC
on October 29, 2009, and incorporated herein by reference.)
3.2 Bylaws. (Attached as an exhibit to our Registration Statement on
Form S-1 originally filed with the SEC on October 29, 2009, and
incorporated herein by reference.)
31 Certification of Mario Jakiri Tolentino, Chief Executive Officer
and Chief Financial Officer of the Company pursuant to Rule
13a-14(a).
32 Certification of Mario Jakiri Tolentino, Chief Executive Officer
and Chief Financial Officer of the Company pursuant to 18 U.S.C
Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.
101* Interactive Data Files pursuant to Rule 405 of Regulation S-T.
----------
* To be filed by Amendment
20
In accordance with Section 13 or 15(d) of the Securities Exchange Act of
1934, the Registrant caused this Report to be signed on its behalf by the
undersigned, thereunto duly authorized.
ONLINE TELE-SOLUTIONS, INC.
Dated December 15, 2011 By: /s/ Mario Jakiri Tolentino
-----------------------------------------
Mario Jakiri Tolentino,
President, Treasurer and Director
Principal Executive and Financial Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended,
this Report has been signed below by the following persons on behalf of the
Registrant and in the capacities indicated.
Signatures Title Date
---------- ----- ----
/s/ Mario Jakiri Tolentino President, Treasurer and Director December 15, 2011
--------------------------------
Mario Jakiri Tolentino
21