UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
10-Q
(Mark
One)
x QUARTERLY REPORT
UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE
ACT OF 1934
For the
quarterly period ended: September 30, 2009
OR
o TRANSITION REPORT UNDER
SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the
transition period from _________ to _________
Commission
file number: 333-149036
TITLE
STARTS ONLINE, INC.
(Name of
small business issuer in its charter)
|
Nevada
|
26-1394771
|
|
(State
or other jurisdiction of
|
(I.R.S.
Employer
|
|
incorporation
or organization)
|
Identification
No.)
|
|
7007
College Boulevard, Suite 270
|
|
|
Overland
Park, KS
|
66211
|
|
(Address
of principal executive offices)
|
(Zip
code)
|
Issuer's
telephone number: 913.832.0072
Indicate
by check mark whether the registrant (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days. Yes x
No o
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 (§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 o No o
*The
registrant has not yet been phased into the interactive data
requirements.
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.
|
Large
accelerated filer o
|
|
Accelerated
filer o
|
|
Non-accelerated
filer o
|
|
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 Noo
Indicate
the number of shares outstanding of each of the issuer's classes of common
stock, as of the latest practicable date:
Common
Stock: 3,300,000 shares outstanding as of October 29,
2009.
TABLE OF
CONTENTS
|
PART
I - FINANCIAL INFORMATION
|
|
|
|
|
|
|
|
3
|
|
|
|
|
|
|
|
11
|
|
|
|
|
|
|
|
13
|
|
|
|
|
|
|
|
13
|
|
|
|
|
|
PART
II - OTHER INFORMATION
|
|
|
|
|
|
|
|
13
|
|
|
|
|
|
|
|
13
|
|
|
|
|
|
|
|
13
|
|
|
|
|
|
|
|
13
|
|
|
|
|
|
|
|
13
|
|
|
|
|
|
|
|
14
|
|
|
|
|
|
|
|
14
|
|
|
|
|
|
|
15
|
PART I - FINANCIAL
INFORMATION
In
addition to the accompanying unaudited consolidated financial statements for
Title Starts Online, Inc. (together with its subsidiaries, "Title Starts
Online," "the Company," "we" or "our"), we suggest that you read our 2008 Annual
Report on Form 10-K. The Company files electronically with the
Securities and Exchange Commission ("SEC") required reports on Form 8-K, Form
10-Q, Form 10-K. The public may read and copy any materials the
Company has filed with the SEC 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
(800) SEC-0330. The SEC maintains an Internet site (www.sec.gov) that
contains reports, proxy and information statements, and other information
regarding issuers that file electronically with the SEC. Copies may
also be obtained free of charge by writing to Title Starts Online, Inc., 7007
College Boulevard, Suite 270, Overland Park, KS
66211.
TITLE
STARTS ONLINE, INC.
(A
DEVELOPMENT STAGE COMPANY)
CONSOLIDATED
BALANCE SHEETS
|
|
|
September
30, 2009
|
|
|
December
31, 2008
|
|
|
|
|
(Unaudited)
|
|
|
(See
Note 1)
|
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CURRENT
ASSETS
|
|
|
|
|
|
|
|
Cash
|
|
$ |
8 |
|
|
$ |
72 |
|
|
Escrow
account with attorney
|
|
|
32,930 |
|
|
|
46,306 |
|
| |
|
|
|
|
|
|
|
|
|
Total
Current Assets
|
|
$ |
32,938 |
|
|
$ |
46,378 |
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES
AND STOCKHOLDERS' (DEFICIT)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES
|
|
|
|
|
|
|
|
|
|
Accounts
payable
|
|
$ |
93,307 |
|
|
$ |
60,288 |
|
|
Advances
payable related party
|
|
|
5,500 |
|
|
|
5,500 |
|
| |
|
|
|
|
|
|
|
|
|
Total
current liabilities
|
|
|
98,807 |
|
|
|
65,788 |
|
|
|
|
|
|
|
|
|
|
|
|
Commitments
and contingencies (Notes1,2,3,4,5,and 6)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders'
(Deficit)
|
|
|
|
|
|
|
|
|
|
75,000,000
Preferred Stock authorized at $0.001 per share, none
issued
|
|
|
— |
|
|
|
— |
|
|
425,000,000
shares Common Stock authorized at $0.001/par value
|
|
|
|
|
|
|
|
|
|
3,300,000
shares issued and outstanding
|
|
|
3,300 |
|
|
|
3,300 |
|
|
Additional
Paid-in Capital
|
|
|
3,566 |
|
|
|
3,566 |
|
|
Deficit
accumulated during development stage
|
|
|
(72,735 |
) |
|
|
(26,276 |
) |
|
|
|
|
|
|
|
|
|
|
|
Total
Stockholders' (Deficit)
|
|
|
(65,869 |
) |
|
|
(19,410 |
) |
|
|
|
|
|
|
|
|
|
|
|
TOTAL
LIABILITIES AND STOCKHOLDERS' (DEFICIT)
|
|
$ |
32,938 |
|
|
$ |
46,378 |
|
The
accompanying notes are an integral part of these financial
statements.
TITLE
STARTS ONLINE, INC.
(A
DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENT OF
OPERATIONS
(UNAUDITED)
|
|
|
Three
Months
|
|
|
Three
Months
|
|
|
Nine
Months
|
|
|
Nine
Months
|
|
|
November
13, 2007
|
|
|
|
|
Ending
|
|
|
Ending
|
|
|
Ending
|
|
|
Ending
|
|
|
(Inception)
Through
|
|
|
|
|
September
30,
|
|
|
September
30,
|
|
|
September
30,
|
|
|
September
30,
|
|
|
September
30,
|
|
|
|
|
2009
|
|
|
2008
|
|
|
2009
|
|
|
2008
|
|
|
2009
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
Expense
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Administrative
Expense
|
|
$ |
741 |
|
|
$ |
2,789 |
|
|
$ |
4,094 |
|
|
$ |
2,789 |
|
|
$ |
10,069 |
|
|
Professional
Services
|
|
|
7,880 |
|
|
|
— |
|
|
|
42,365 |
|
|
|
920 |
|
|
|
62,666 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net(Loss)
|
|
$ |
(8,621 |
) |
|
$ |
(2,789 |
) |
|
$ |
(46,459 |
) |
|
$ |
(3,709 |
) |
|
$ |
(72,735 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
earnings per share
|
|
$ |
Nil |
|
|
$ |
Nil |
|
|
$ |
(0.01 |
) |
|
$ |
Nil |
|
|
$ |
(0.02 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted
average number of common shares outstanding
|
|
|
3,300,000 |
|
|
|
3,126,087 |
|
|
|
3,300,000 |
|
|
|
3,108,759 |
|
|
|
3,209,753 |
|
The
accompanying notes are an integral part of these financial
statements.
TITLE
STARTS ONLINE, INC.
(A
DEVELOPMENT STAGE COMPANY)
CONSOLIDATED
STATEMENT OF CHANGES IN STOCKHOLDERS' (DEFICIT)
FOR
THE PERIOD FROM NOVEMBER 13, 2007 (INCEPTION) TO SEPTEMBER 30, 2009
(UNAUDITED)
|
|
|
|
|
|
|
|
|
|
|
|
Deficit
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated
|
|
|
|
|
|
|
|
|
|
|
Common
|
|
|
Additional
|
|
|
During
|
|
|
|
|
|
|
|
Common
|
|
|
Stock
|
|
|
Paid-in
|
|
|
Development
|
|
|
|
|
|
|
|
Stock
|
|
|
Amount
|
|
|
Capital
|
|
|
Stage
|
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock
issued for cash December 1, 2007 at par value of $0.001 per
share
|
|
|
3,100,000 |
|
|
$ |
3,100 |
|
|
$ |
— |
|
|
|
|
|
$ |
3,100 |
|
|
Net(loss)
for the period 2007
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(1,800 |
) |
|
|
(1,800 |
) |
|
Balance
December 31, 2007
|
|
|
3,100,000 |
|
|
|
3,100 |
|
|
|
— |
|
|
|
(1,800 |
) |
|
|
1,300 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock
issued for cash September 30, 2008 at $0.25 per share less offering costs
of $46,234
|
|
|
200,000 |
|
|
|
200 |
|
|
|
3,566 |
|
|
|
— |
|
|
|
3,766 |
|
|
Net
(loss) for the year 2008
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(24,476 |
) |
|
|
(24,476 |
) |
|
Balance
December 31, 2008
|
|
|
3,300,000 |
|
|
|
3,300 |
|
|
|
3,566 |
|
|
|
(26,276 |
) |
|
|
(19,410 |
) |
|
Net
(loss) September 30, 2009
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(46,459 |
) |
|
|
(46,459 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance
September 30, 2009
|
|
|
3,300,000 |
|
|
$ |
3,300 |
|
|
$ |
3,566 |
|
|
$ |
(72,735 |
) |
|
$ |
(65,869 |
) |
The
accompanying notes are an integral part of these consolidated financial
statements
TITLE
STARTS ONLINE, INC.
(A
DEVELOPMENT STAGE COMPANY)
CONSOLIDATED
STATEMENTS OF CASH FLOWS
(UNAUDITED)
|
|
|
|
|
|
|
|
|
For
the Period
|
|
|
|
|
|
|
|
|
|
|
November
13, 2007
|
|
|
|
|
Nine
Months
|
|
|
Nine
Months
|
|
|
(Inception)
|
|
|
|
|
Ending
|
|
|
Ending
|
|
|
Through
|
|
|
|
|
September
30,
|
|
|
September
30,
|
|
|
September
30,
|
|
|
|
|
2009
|
|
|
2008
|
|
|
2009
|
|
|
CASH
FLOW FROM OPERATING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
|
Net (loss)
|
|
$ |
(46,459 |
) |
|
$ |
(3,709 |
) |
|
$ |
(72,735 |
) |
|
Adjustments
to reconcile net loss to net cash used by operating
activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Increase)
decrease in escrow account
|
|
|
13,376 |
|
|
|
— |
|
|
|
(32,930 |
) |
|
Increase
in accounts payable
|
|
|
33,019 |
|
|
|
12,521 |
|
|
|
93,307 |
|
|
Net
cash provided by (used in) operating activities
|
|
|
(64 |
) |
|
|
8,812 |
|
|
|
(12,358 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CASH
FLOW FROM INVESTING ACTIVITIES
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CASH
FLOW FROM FINANCING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Advance
from a related party
|
|
|
— |
|
|
|
5,000 |
|
|
|
5,500 |
|
|
Issuance
of Common Stock
|
|
|
— |
|
|
|
3,100 |
|
|
|
53,100 |
|
|
Offering
costs
|
|
|
— |
|
|
|
(16,801 |
) |
|
|
(46,234 |
) |
|
Net
cash provided by (used in) financing activities
|
|
|
— |
|
|
|
(8,701 |
) |
|
|
12,366 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
increase (decrease) in cash
|
|
|
(64 |
) |
|
|
111 |
|
|
|
8 |
|
|
Cash
at beginning of period
|
|
|
72 |
|
|
|
— |
|
|
|
— |
|
|
Cash
at end of period
|
|
$ |
8 |
|
|
$ |
111 |
|
|
$ |
8 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental
Cash Flow Disclosures:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
paid during period for interest
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
Cash
paid during period for taxes
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
The
accompanying notes are an integral part of these consolidated financial
statements
TITLE
STARTS ONLINE, INC.
(A
DEVELOPMENT STAGE COMPANY)
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER
30, 2009
(UNAUDITED)
1
ORGANIZATION AND BUSINESS OPERATIONS
Title
Starts Online, Inc. (the "Company") was incorporated in the State of Nevada on
November 13, 2007. On September 25, 2008 the Company formed a wholly-owned
subsidiary, Title Starts of Kansas City, LLC. The Company is a Development Stage
Company as defined by Statement of Financial Accounting Standards ("SFAS") No.
7. The Company plans to offer an online repository of title starts for
abstractors.
On August
11, 2008, the Company received a Notice of Effectiveness from the U.S.
Securities and Exchange Commission. On September 18, 2008, the Company closed
the public offering in which it accepted subscriptions for an aggregate of
200,000 shares of its common stock.
On June
19, 2009, the Company filed a Registration Statement on Form 8-A with the
Securities and Exchange Commission to register its common stock, par value
$0.001 per share, under Section 12(g) of the Securities and Exchange Act of
1934.
On July
14, 2009, the Company’s common stock was accepted for quotation, effective July
15, 2009, on the OTC Bulletin Board (“OTCBB”) under the trading symbol
“TTSO”.
2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The
unaudited consolidated financial statements and related notes for the three
months and nine months ended September 30, 2009 and September 30, 2008,
presented herein have been prepared by the management of the Company and its
subsidiary pursuant to the rules and regulations of the Securities and Exchange
Commission. Accordingly, certain information and footnote disclosures normally
included in financial statements prepared in accordance with generally accepted
accounting principles have been omitted pursuant to such rules and regulations.
Operating results for the nine months ended September 30, 2009 are not
necessarily indicative of the results that may be expected for the full year. It
is suggested that these unaudited consolidated financial statements be read in
conjunction with the December 31, 2008 audited consolidated financial
statements.
a) Basis
of Presentation
The
financial statements have been prepared on a going concern basis, which
contemplates the realization of assets and liquidation of liabilities in the
normal course of business. However, the Company has no business
operations and has negative working capital and stockholders’ deficits. These
conditions raise substantial doubt about the ability of the Company to continue
as a going concern.
In view
of these matters, continuation as a going concern is dependent upon the
continued operations of the Company, which in turn is dependent upon the
Company's ability to meet its financial requirements, raise additional capital,
and the success of its future operations. The financial statements do not
include any adjustments to the amount and classification of assets and
liabilities that may be necessary should the Company not continue as a going
concern.
The
Company completed a public offering and raised $50,000 less offering costs of
$46,234 as described in Note 6. If additional funding is required, the Company
plans to obtain working capital from equity financing from the sale of common
stock and/or advances from Mark DeFoor, the President and Chief Executive
Officer and sole director. The Company does not have any arrangements
in place for any future equity financing or loans. Management
believes that this plan provides an opportunity for the Company to continue as a
going concern.
b) Cash
and Cash Equivalents
The
Company considers all highly liquid instruments with a maturity of three months
or less at the time of issuance to be cash equivalents.
c) Use of
Estimates and Assumptions
The
preparation of financial statements in conformity with accounting principles
generally accepted in the United States requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts or revenues and expenses during the
reporting period. Actual results could differ from those estimates.
d) Fair
Value of Financial Instruments
Fair
value estimates discussed herein are based upon certain market assumptions and
pertinent information available to management as of September 30,
2009. The respective carrying value of certain on-balance-sheet
financial instruments approximate their fair values. These financial instruments
include cash, escrow account, stock subscriptions receivable, accounts payable
and advances payable related party. Fair values were assumed to approximate
carrying values for these financial instruments since they are short term in
nature and their carrying amounts approximate fair value, or they are receivable
or payable on demand.
The
Company has not generated any revenues since entering the development
stage. It is the Company's policy that revenues will be recognized when
persuasive evidence of an arrangement exists, delivery has occurred (or a
service has been performed), the sales price is fixed and determinable, and
collectability is reasonably assured.
Income
taxes are accounted for under the assets and liabilities method. Deferred tax
assets and liabilities are recognized for the estimated future tax consequences
attributable to differences between the financial statement carrying amounts of
existing assets and liabilities and their respective tax bases and operating
loss and tax credit carry forwards. Deferred tax assets and liabilities are
measured using enacted tax rates in effect for the year in which those temporary
differences are expected to be recovered or settled. A valuation allowance is
established when necessary to reduce deferred tax assets to the amount expected
to be realized.
g) Basic and Diluted Net Loss per
Share
Basic EPS
is computed by dividing net loss available to common shareholders (numerator) by
the weighted average number of shares outstanding (denominator) during the
period. Diluted earnings per share are not shown for periods in which the
Company incurs a loss because it would be anti-dilutive. At September 30, 2009,
the Company had no stock equivalents that were anti-dilutive and excluded in the
earnings per share computation.
h) Development Stage
Company
Based on
the Company's business plan, it is a development stage company since planned
principal operations have not yet commenced. Accordingly, the Company presents
its financial statements in conformity with the accounting principles generally
accepted in the United States of America that apply to developing enterprises.
As a development stage enterprise, the Company discloses its retained earnings
(or deficit accumulated) during the development stage and the cumulative
statements of operations and cash flows from commencement of development stage
to the current balance sheet date. The development stage began on November 13,
2007, when the Company was organized.
i) Concentrations
The
Company is not currently a party to any financial instruments that potentially
subject it to concentrations of credit risk.
j) Recent
Pronouncements
There
were various accounting standards and interpretations issued during 2009 and
2008, none of which are expected to have a material impact on the Company's
financial position, operations, or cash flows.
k) Principles of
Consolidation
The
consolidated financial statements include the accounts of both Title Starts
Online, Inc. and its subsidiary Title Starts of Kansas City, LLC. All
inter-company accounts have been eliminated in the consolidation.
3
CAPITAL STOCK
Preferred Stock. The Company
has authorized 75,000,000 shares of preferred stock with a par value of $.001
per share. These shares may be issued in series with such rights and preferences
as may be determined by the Board of Directors. The Company has not issued any
preferred shares.
Common Stock. The Company has
authorized 425,000,000 shares of common stock with a par value of $.001 per
share. As of September 30, 2009, there were 3,300,000 shares issued and
outstanding
On
November 13, 2007, (inception), the Company issued 3,100,000 shares of common
stock to a director of the Company at $.001 per share, for a total of $3,100 in
stock subscriptions receivable. Subsequent to December 31, 2007, the Company
collected the remaining balance of the stock subscriptions
receivable.
On
September 18, 2008, the Company issued 200,000 shares of common stock to forty
individuals at $0.25 per share for a total $50,000 in stock subscriptions
receivable. The proceeds less certain expenses are being held in an escrow
account with the Company's attorney. Offering costs totaling $46,234 related to
the offering have been offset to the proceeds.
4
INCOME TAXES
Deferred
income taxes arise from temporary timing differences in the recognition of
income and expenses for financial reporting and tax purposes. The Company's
deferred tax assets consist entirely of the benefit form operating loss (NOL)
carry forwards. The net operating loss carry forward, if not used, will expire
in various years through 2029, and is severely restricted as per the Internal
Revenue code, if there is a change in ownership. The Company's deferred tax
assets are offset by a valuation allowance due to the uncertainty of the
realization of the net operating loss carry forwards. Net operating loss carry
forwards may be further limited by other provisions of the tax
laws.
The
Company's deferred tax assets, valuation allowance, and change in valuation
allowance are as follows:
|
Period
Ending:
|
|
|
Estimated
NOL
Carry-
Forward
|
|
NOL
Expires
|
|
Estimated
Tax
Benefit
from
NOL
|
|
Valuation
Allowance
|
|
Change
in
Valuation
Allowance
|
|
Net
Tax
Benefit
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31,
2008
|
|
|
26,276
|
|
Various
|
|
|
3,941
|
|
(3,941)
|
|
|
(3,671)
|
|
|
|
September
30, 2009
|
|
|
72,735
|
|
Various
|
|
|
10,910
|
|
(10,910)
|
|
|
(6,969)
|
|
|
Income
taxes at the statutory rate are reconciled to the Company's actual income taxes
as follows:
|
Income
tax
|
|
|
(15.00)
|
%
|
|
Deferred
income
|
|
|
15.00
|
%
|
|
Actual
tax rate
|
|
|
0
|
%
|
5
RELATED PARTY TRANSACTIONS
The
Company uses the offices of its President for its minimal office facility needs
for no consideration. No provision for these costs has been provided since it
has been determined that they are immaterial.
The
Company's President has advanced $5,500 to the Company during the year ended
December 31, 2008. The advances are uncollateralized, bear no interest, and are
due on demand.
6
DEFERRED OFFERING COSTS
The
Company had incurred in prior periods $46,234 in costs related to a public
offering of its securities. The offering was completed in September 2008 and the
costs were offset to the proceeds.
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The
following discussion should be read in conjunction with our financial statements
and the notes thereto which appear elsewhere in this report. The results shown
herein are not necessarily indicative of the results to be expected in any
future periods. This discussion contains forward-looking statements based on
current expectations, which involve uncertainties. Actual results and the timing
of events could differ materially from the forward-looking statements as a
result of a number of factors.
Forward-Looking
Statements
The
following discussion and analysis is provided to increase the understanding of,
and should be read in conjunction with, the financial statements of the Company
and notes thereto included elsewhere in this report. Historical results and
percentage relationships among any amounts in these financial statements are not
necessarily indicative of trends in operating results for any future period. The
statements, which are not historical facts contained in this report constitute
"forward-looking statements" within the meaning of the Private Securities
Litigation Reform Act of 1995. Such statements are based on currently available
operating, financial and competitive information, and are subject to various
risks and uncertainties. Future events and the Company's actual results may
differ materially from the results reflected in these forward-looking
statements. Factors that might cause such a difference include, but are not
limited to, dependence on existing and future key strategic and strategic
end-user customers, limited ability to establish new strategic relationships,
ability to sustain and manage growth, variability of operating results, the
Company's expansion and development of new service lines, marketing and other
business development initiatives, the commencement of new engagements,
competition in the industry, general economic conditions, dependence on key
personnel, the ability to attract, hire and retain personnel who possess the
technical skills and experience necessary to meet the service requirements of
its clients, the potential liability with respect to actions taken by its
existing and past employees, risks associated with international sales, and
other risks described herein and in the Company's other SEC
filings.
Overview
Company
Overview
Title
Starts Online, Inc. is a corporation, incorporated in the State of Nevada on
November 13, 2007. The Company's principal offices are currently located at 7007
College Boulevard, Suite 270, Overland Park, KS 66211. Our telephone number
there is 913.832.0072. Our fax number is 866.681.3091. All
operations, from administration to product development, take place at this
location. The Company occupies space within a customer facility owned by our
President and Chief Executive Officer, Mark DeFoor, for which it currently pays
no rent.
The
Company is in the early stage of operations with no current revenues to
date. From inception through August 11, 2008, the date on which the
Company’s securities offering was declared effective by the SEC, the majority of
the Company’s activities revolved around defining requirements from residential
title abstractors in the Kansas City area to determine the value proposition of
a consolidated title start website and beginning the development of the
website. From August 11, 2008 through September 17, 2008, the Company
conducted its securities offering and obtained subscriptions for its
securities. On September 25, 2008, the Company formed a wholly-owned
subsidiary, Title Starts of Kansas City, LLC, a Missouri limited liability
company. During the remainder of the fiscal year ended December 31,
2008 and during the six months ended June 30, 2009, the Company has continued to
develop its website and has begun to identify title searchers and abstractors
with whom it plans to establish, through its subsidiary, contractual
relationships for the use of the Company’s website.
The
Company’s common stock is registered under Section 12(g) of the Securities
Exchange Act of 1934 and is listed for quotation on the OTC Bulletin Board
(“OTCBB”) under the trading symbol “TTSO.”
Organizational
Structure
Our
President and Chief Executive Officer is Mark DeFoor. Mr. DeFoor
handles the operational business functions including corporate administration
and development responsibility with respect to the title starts
business. We have no employees.
Basis
of Presentation
Our
financial statements are prepared in accordance with the rules and regulations
of the Securities and Exchange Commission. Certain information and disclosures
in our unaudited condensed consolidated interim financial statements have been
condensed or omitted as permitted by such rules and
regulations.
Significant
Accounting Estimates
We review
all significant estimates affecting our consolidated financial statements on a
recurring basis and record the effect of any necessary adjustment prior to their
publication. Uncertainties with respect to such estimates and assumptions are
inherent in the preparation of financial statements; accordingly, it is possible
that actual results could differ from those estimates and changes to estimates
could occur in the near term. The preparation of our financial statements
requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of the contingent assets and
liabilities at the date of the financial statements and the reported amounts of
revenue and expenses during the reporting period. Estimates and judgments are
used when accounting for revenue, stock-based compensation, accounts receivable
and allowance for doubtful accounts, impairment of long-lived assets,
depreciation and amortization, deferred income taxes, and contingencies among
others.
Management
has discussed the development and selection of these significant accounting
estimates with our Board of Directors and our Board of Directors has reviewed
our disclosures relating to them.
Results
of Operations
Comparison
of Three Month Periods Ended September 30, 2009 and 2008
Overview
Our
general activity in the quarter ended September 30, 2009 has been focused on
launching our title starts web site and identifying title searchers and
abstractors with whom the Company plans to establish relationships to use the
website. Management believes the Company is poised for growth since
our web site is now operational. The Company’s web site offers a
central repository for title starts for the purpose of delivering two categories
of products: title starts and a title search template.
The
United States and the global business community is experiencing severe
instability in the commercial and investment banking systems which is likely to
continue to have far-reaching effects on the economic activity in the country
for an indeterminable period. The long-term impact on the United States economy
and the Company's operating activities and ability to raise capital cannot be
predicted at this time, but may be substantial.
Revenue
For the
quarters ended September 30, 2009 and 2008, the Company had no
revenue.
Operating
Expenses
Operating
expenses were $8,621 for the quarter ended September 30, 2009 as compared with
operating expenses of $2,789 for the quarter ended September 30,
2008.
Our
expenses are categorized as administrative expenses and professional service
fees. During the quarter ended September 30, 2009, we incurred $741
in administrative expenses, whereas $2,789 were incurred in administrative
expenses for the quarter ended September 30, 2008. During the quarter
ended September 30, 2009, we incurred $7,880 in professional service fees,
whereas no professional service fees were incurred during the quarter ended
September 30, 2008.
Operating
Loss and Net Loss
Our net
loss for the quarter ended September 30, 2009 was $8,621 due primarily to
continuing expenses as described above, with no generation of revenue, whereas
our net loss for the quarter ended September 30, 2008 was $2,789.
Comparison
of Nine Month Periods ended September 30, 2009 and 2008
We had a
net loss of $46,459 from operating activities in the nine months ended September
30, 2009, compared with a net loss of $3,709 from operating activities in the
nine months ended September 30, 2008. Cash provided from (used in)
operations will be generated primarily from net income (loss) and the timing of
accounts receivable collections and disbursements of accounts payable and
accrued expenses. For the nine months ending September 30, 2009,
there was net cash used in operating activities of $64 compared to net cash
provided by operating activities of $8,812 for the nine months ending September
30, 2008. There was no cash flow from investing activities during
either period. There was no cash provided by or used in financing
activities for the nine months ended September 30, 2009, compared to net cash
provided by financing activities of $8,701 for the nine months ended September
30, 2008. We ended the third quarter of 2009 with cash of
$8.
Liquidity
and Capital Resources
Management
believes that we will begin receiving revenue in the first quarter of 2010.
Based on our anticipated level of revenues, we believe that funds generated from
operations, together with existing cash and cash available from financing
activities in 2008, will be sufficient to finance our operations and planned
capital expenditures through the first quarter of 2010.
We will
continue to pursue traffic to our web site and actively seek new
customers. We believe these actions will position us to capitalize on
opportunities as they arise in the industry. However, there can be no assurance
that these actions will be successful. Should volumes and revenues decline to a
level significantly below our current expectations, we would reduce capital
expenditures and implement cost-reduction initiatives which we believe would be
sufficient to ensure that funds generated from operations, together with
existing cash and available borrowings under our credit agreement, would be
sufficient to finance our current operations through the first quarter of
2010. If additional funding is required, the Company plans to obtain
working capital from equity financing from the sale of common stock and/or
advances from Mark DeFoor, our President and Chief Executive Officer and sole
director. We do not have any arrangements in place for any future
equity financing or loans.
Off-Balance-Sheet
Arrangements
As of
September 30, 2009, we did not have any significant off-balance-sheet
arrangements, as defined in section 303(a)(4)(ii) of Regulation S-K of
the SEC.
Item
3. QUANTITATIVE AND QUALITATIVE ANALYSIS ABOUT MARKET
RISK
Not
applicable.
Item
4. CONTROLS AND PROCEDURES
Under the
supervision and with the participation of our management, we have conducted an
evaluation of the effectiveness of the design and operation of our disclosure
controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the
Securities and Exchange Act of 1934, as of the end of the period covered by this
report. Based on this evaluation, our chief executive officer concluded as of
the evaluation date that our disclosure controls and procedures were effective
such that the material information required to be included in our Securities and
Exchange Commission reports is recorded, processed, summarized and reported
within the time periods specified in SEC rules and forms relating to our
Company, particularly during the period when this report was being
prepared.
Additionally,
there were no significant changes in our internal controls or in other factors
that could significantly affect these controls subsequent to the evaluation
date. We have not identified any significant deficiencies or material weaknesses
in our internal controls, and therefore there were no corrective actions
taken.
PART
II - OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS
None
Not
applicable.
Item 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF
PROCEEDS
None.
Item 3. DEFAULTS UPON SENIOR SECURITIES.
None.
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY
HOLDERS.
None.
Item 5. OTHER INFORMATION.
None.
Exhibits
required by Item 601 of Regulation S-K
|
No.
|
|
Description |
|
| |
|
|
|
3.1
|
|
Articles
of Incorporation of the Company1
|
|
|
|
|
|
3.2
|
|
Bylaws
of the Company1
|
|
|
|
|
|
31
|
|
|
|
|
|
|
|
32
|
|
|
1
Incorporated herein by reference from the Company’s Registration Statement on
Form SB-2 filed with the Securities and Exchange Commission on February 4,
2008.
In
accordance with the requirements of the Securities Exchange Act of 1934, the
registrant caused duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
|
|
TITLE STARTS ONLINE,
INC.
|
|
|
(Registrant)
|
|
|
|
|
|
|
|
Date:
October 29, 2009
|
/s/
Mark DeFoor
|
|
|
Mark
DeFoor
|
|
|
President
and Chief Executive Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|