-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, KZh3+ILmZSPEEdQoyOBN+LF8wG3mCTVo6DyhH7GUCIbsARFjJCFCdjTF+zZ8lTe/ XabMbz86xLNLzpzIlJxcEg== 0001072588-09-000232.txt : 20090528 0001072588-09-000232.hdr.sgml : 20090528 20090528120827 ACCESSION NUMBER: 0001072588-09-000232 CONFORMED SUBMISSION TYPE: 10-K/A PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 20081130 FILED AS OF DATE: 20090528 DATE AS OF CHANGE: 20090528 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ONLINE ORIGINALS, INC CENTRAL INDEX KEY: 0001357878 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-BUSINESS SERVICES, NEC [7389] IRS NUMBER: 980479983 STATE OF INCORPORATION: NV FISCAL YEAR END: 1130 FILING VALUES: FORM TYPE: 10-K/A SEC ACT: 1934 Act SEC FILE NUMBER: 000-53230 FILM NUMBER: 09856548 BUSINESS ADDRESS: STREET 1: RPO 163 CITY: SORRENTO STATE: A1 ZIP: V0E 2W0 BUSINESS PHONE: 604 313 9781 MAIL ADDRESS: STREET 1: RPO 163 CITY: SORRENTO STATE: A1 ZIP: V0E 2W0 10-K/A 1 ooi10ka113008.txt UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K/A AMENDMENT #1 (Mark One) [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended November 30, 2008 OR [ ] 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 333-133347 ONLINE ORIGINALS, INC. (Exact name of registrant as specified in its charter) Nevada 98-0479983 - ------------------------------- ------------------------------ State or other jurisdiction of (I.R.S. Employer incorporation or organization Identification No.) 57113 -2020 Sherwood Drive, Sherwood Park, Albert T8A 3H9 --------------------------------------------------------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (780) 668-7422 Securities registered under Section 12(b) Name of each exchange on of the Exchange Act: which registered Title of each class None None Securities registered under Section 12(g) of the Exchange Act: Common Stock, $0.001 Par Value (Title of class) Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. [_] Yes [X] No Check if there is no disclosure of delinquent filers in response to Item 405 of Regulation S-B is not contained in this form, and no disclosure will be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [X] Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [_] No [X] The Company recognized net revenues of $2,800 for its most recent fiscal year Aggregate market value of the voting common equity held by non-affiliates computed by reference to the price at which the common equity was sold as of November 30, 2008: $70,000 Number of common voting shares outstanding as of November 30, 2008: 3,200,000 Transitional Small Business Disclosure Format: Yes [_] No [X] 1 DOCUMENTS INCORPORATED BY REFERENCE - Form 10-QSB filed on October 10, 2008, our Form 10-QSB filed on July 14, 2008, our Form 10-QSB filed on April 14, 2008 and as described in this Form 10-K annual report. 2 This 10-K is being amended to amend Exhibit 31.1 and 31.2 to comply with Item 601(b)(31) of Regulation S-K. No other revisions/changes have been made. TABLE OF CONTENTS Page PART I Item 1. Description of Business 4 Item 2. Description of Property 6 Item 3. Legal Proceedings 7 Item 4. Submission of Matters to a Vote of Security Holders 7 PART II Item 5. Market For Common Equity and Related Stockholder Matters 7 Item 6. Management's Discussion and Analysis or Plan of Operation 9 Item 7. Financial Statements 12 Item 8. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure 24 Item 8A. Controls and Procedures 24 Item 8A(T). Controls and Procedures 24 Item 8B. Other Information 25 PART III Item 9. Directors, Executive Officers, Promoters and Control Persons; Compliance With Section 16(a) of the Exchange Act 25 Item 10. Executive Compensation 27 Item 11. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 27 Item 12. Certain Relationships and Related Transactions and Director Independence 28 Item 13. Exhibits 28 Item 14. Principal Accountant Fees and Services 28 Signatures 30 3 FORWARD-LOOKING STATEMENTS In addition to historical information, some of the information presented in this Annual Report on Form 10-K contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 (the "Reform Act"). Although Online Originals, Inc. ("Online" or the "Company," which may also be referred to as "we," "us" or "our") believes that its expectations are based on reasonable assumptions within the bounds of its knowledge of its business and operations: there can be no assurance that actual results will not differ materially from our expectations. Such forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those anticipated, including but not limited to, our ability to reach satisfactorily negotiated settlements with our outstanding creditors, achieve a listing on the over the counter bulletin board, raise debt and/or equity to fund negotiated settlements with our creditors and to meet our ongoing operating expenses and merge with another entity with experienced management and opportunities for growth in return for shares of our common stock to create value for our shareholders. You are urged to carefully consider these factors, as well as other information contained in this Annual Report on Form 10-K and in our other periodic reports and documents filed with the SEC. PART I ITEM 1. DESCRIPTION OF BUSINESS. Business Development We incorporated as Online Originals, Inc. (hereinafter referred to as Online) on November 18th, 2005 in the State of Nevada. Our principal executive offices are located at 57113 -2020 Sherwood Drive, Sherwood Park, Alberta T8A 3H9. Telephone number is (780) 668-7422. Our fiscal year end is November 30th. Business of Issuer We are developing an online art gallery/auction house that allows members and customers to bid on and purchase pieces of art. The website will showcase varieties of art ranging from paintings, drawings, prints, and sculptures. We maintain our website at www.artbyonlineoriginals.com, which is not incorporated in and is not a part of this report. Inventory pieces will be purchased at wholesale prices in lots, to be sold at retail prices. Eventually the available artwork will include paintings, drawings, prints, and sculptures from artists, art owners and members of the site. Members of the site and one-time users will offer art pieces for sale and we will facilitate the sale of these pieces. Fees and commissions will be charged for the services we provide. Our target clientele is the artistic community and those who enjoy purchasing, learning, and discussing art. We are focusing on buyers and art collectors who are using the internet to find what they are looking for. Members will be able to enter the website, log into their account and see pieces that will be featured for the week. As we develop, we anticipate that we will have a dialogue on the pieces giving the history and description which will act as an educational tool and encourage individuals to visit the site frequently. Featured artists, periods of time, and styles are planned to be part of these weekly features. We believe that having these aspects on the site will boost participation and facilitate community. As we continue to develop our site, we will also include a member's only area where individuals will have access to educational material, special sales, and useful information about what is happening in the art community. Members will have the ability to interact with other members and sellers, giving a community feel to the website. Monthly membership fees will be charged. 4 Principal Products and Services Currently, our available art are pieces from artists, art owners, and members of the site, as well as one-time users looking to sell a single piece through our gallery/auction website. As we continue to develop, we will showcase original pieces of art from unknown artists in the industry as well as established artists. Prints will also be available for individuals looking for a piece that can otherwise only be found in a gallery. We will continually add to our collection of art pieces, following the demand of the members and listening to what they are looking for. The Market Our primary target market is North America, but we will be pleased to provide service to members and clients around the world. The key demographic that we are targeting will be art purchasers and art enthusiasts - individuals of all ages, races and social structures. Internet marketing will be used as the primary source to bring traffic to the website. We plan to offer programs for businesses whereby advertising is based on a pay per click format rather than a weekly or monthly bases. Print and direct mail make up the other area of marketing and promotions. Competition and Competitive Strategy There are a number of social networking internet sites as well as auction sites, but few, we believe, that are focused on the creative artist market. We intend to be differentiated from the other websites by offering services specifically to art purchasers and art enthusiasts. Members will be able to narrow their searches by artist, style and/or year. Our competitive advantage will be gained by providing a high service level and accommodating the wishes of the members and guests to out website. In addition, there are various shops and stores that sell art. Our strategy is to make it as easy as possible for consumers to purchase art pieces without having to leave the comfort of their home. Rather than spend time going to different shops in search of a specific item, our members will have the ability to view thousands of available art pieces from their home computer. Distribution As a start-up company, our competitive position within the industry is poor. The challenge before us is to build our business and establish it as a viable going concern. At this time, our focus is internet marketing through our website. When we have available cash from sales revenue, we will focus on alternate forms of marketing. They may include several key forms of internet advertising such as pay-per click and cross promotions with other websites who are targeting the same demographic groups. We believe these forms of advertising are much more specific and cost effective than a newspaper ad or other forms of advertising. By having a strong presence on the Internet, our marketing costs will remain low and cross promotions will allow our name and services to reach a wide audience. We also plan to participate in special interest mailing lists to gain visibility among targeted audiences as well as generate traffic for the website. Special interest mailing lists are not direct lists, but instead are similar to email newsletters or on-going dialogues dedicated to special interests. We plan to send E-mail messages to specific mailing lists targeting the individuals currently viewing art and showing a visible interest in art. We plan to participate in industry related newsgroups to gain visibility and develop relationships with targeted markets. Finally, we will seek to create a media presence and work towards establishing a name for itself in the artistic community. Print and direct mail of marketing and promotions and will be placed in art magazines, art stores, and art galleries and theaters. Sources and Availability of Products and Supplies We believe that we will have unlimited sources and availability of products and supplies. Our inventory will come from creative artists. These individuals will 5 supply original art. We intend to showcase the works of art on the website for sale to other artists and buyers and will offer advertising/promotional services for new works being introduced. Dependence on One or a Few Major Customers We are not dependant on one or a few major customers because our website will target all art purchasers and art enthusiasts who have access to the internet. Patent, Trademark, License & Franchise Restrictions and Contractual Obligations & Concessions There are no inherent factors or circumstances associated with this industry, or any of the products or services that we plan to provide that would give cause for any patent, trademark or license infringements or violations. We have not entered into any franchise agreements or other contracts that have given, or could give rise to obligations or concessions. This is original art and we will recognize the artists and copy rites if and when they are necessary. Governmental Controls and Approvals In regards to both the retail and the customer service aspects of our business, the major area for government control or need for government approval would be local business licensing. All of the products being offered for sale will be purchased from reputable artists and suppliers and will carry the necessary government and industry standard approvals. We do not intend to promote products or services of any business that are restricted in Canada and the United States. Existing or Probable Government Regulations Other than the licensing requirements discussed above, there are no other types of government regulations existing nor are we aware of any such regulations being contemplated that adversely affect our ability to operate. Research and Development Activities and Costs We have not incurred any costs to date relating to research and development and have no plans to undertake any research and development activities within the next twelve months. Compliance with Environmental Laws There are no environmental laws that have been enacted that would affect our business, nor are we aware of any such laws being contemplated in the future that address issues specific to our business. Facilities We do not own or rent facilities of any kind. At present operations are being conducted from the offices of our President, and she provides this space free of charge. We will continue to use this space for executive offices for the foreseeable future. Employees Our officers and directors are responsible for planning, developing and operational duties and will continue to do so throughout the early stages of our growth. We have no intentions in hiring any employees until our business has sufficient and reliable revenue from operations. Human resources planning will be part of an ongoing process that will include constant evaluation of operations and revenue realization. We do not expect to hire any employees during the next year of operations. ITEM 2. DESCRIPTION OF PROPERTY. We do not own or rent facilities of any kind. At present we are operating from our principal office that is located within the offices of our President, who provides this space free of charge. 6 We do not have any manufacturing plants and have minimal equipment for the operation of our business. Investment Policies We do not have any investments in real estate or interest in real estate or investments real estate mortgages. We also do not have any investments in any securities of or interests in persons primarily engaged in real estate activities. Description of Real Estate and Operating Data None ITEM 3. LEGAL PROCEEDINGS. We are not a party to any legal proceedings, nor are we aware of any contemplated or pending legal proceedings against us. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. We have not yet held our annual shareholders' meeting or submitted any matters to a vote of shareholders during the fiscal year to which this Annual Report pertains. PART II ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS. Market for Common Equity and Related Stockholder Matters (a) Market Information Our Common Stock is presently traded on the over-the-counter market on the OTC Bulletin Board maintained by the Financial Industry Regulatory Authority ("FINRA"). On August 7, 2008, we began trading on the over the counter bulletin board under the symbol "OLOI." During the period of August 7, 2008 through November 30, 2008, our shares have not traded. As of January 31, 2009, no trades for our stock have taken place on the OTC/BB. (b) Holders As of January 31, 2009, there were approximately forty-three (43) holders of record of our common stock. (c) Dividend Policy We have never declared or paid dividends on our common stock. We intend to retain earnings, if any, to support the development of our business and therefore do not anticipate paying cash dividends for the foreseeable future. Payment of future dividends, if any, will be at the discretion of our board of directors after taking into account various factors, including current financial condition, operating results and current and anticipated cash needs. (d) Securities authorized for issuance under equity compensation plans None. 7 RECENT SALES OF UNREGISTERED SECURITIES The following is a history of our sales of unregistered securities since our incorporation on November 18, 2005. On November 18, 2005, Gaye Adams, founder of our company and as a member of the board of directors, purchased by subscription, 1,800,000 shares of common stock from our company for $18,000. On November 28th, 2005, a private offering was completed, under which Greg Adams, a current member of the board of directors, purchased 700,000 shares of common stock by subscription at a price of $0.01 per share for $7,000. There were no promoters being used in relation to this offering. No person who may, in the future, be considered a promoter of this offering, will receive or expect to receive assets, services or other considerations from our company. No assets will be, nor expected to be, acquired from any promoter on behalf of the company. We have not entered into any agreements that require disclosure to the shareholders. We qualified for an exemption from registration under Rule 504 in both of these issuances since it is not subject to the reporting requirements of Section 13 or 15(d) of the Securities Act of 1933, is not an investment company, it had a specific business plan at the time it sold the securities, it was not a blank check company, as that term is defined in Rule 419(a)(2) of Regulation C or Rule 504 (a)(3) of Regulation D of the Securities Act of 1933. Neither our company nor any person acting on its behalf offered or sold any of the securities by any form of general solicitation or general advertising. The securities sold are restricted shares; the purchasers were informed that the securities cannot be resold without the securities being registered under the Securities Act of 1933 or an exemption there from. We exercised reasonable care to assure that the purchases were not underwritten within the meaning of section 2(a) (11) of this Act including but not limited to the placement of a restrictive legend on the certificates representing the shares, and the aggregate offering price was less than $1,000,000. SALE OF REGISTERED SECURITIES AND USE OF PROCEEDS As previously reported, on May 12, 2006 our Registration Statement on Form SB-2, commission file number 333-133347, became effective, and on July 21, 2006, we completed a maximum offering of 700,000 common shares at a price of $0.10 per share. On August 7, 2008, we obtained regulatory approval to post our common shares for trading on the OTC/BB under the trading symbol "OLOI". All of the proceeds from our offering have been spent and have been used to fund our operations as described in the SB-2 offering document incorporated by reference herein. As of the date of this Form 10-K Annual Report, there are 3,200,000 issued and outstanding shares of common stock of which 2,500,000 shares are held by our officers and directors. DESCRIPTION OF SECURITIES Common Stock We are authorized to issue up to 75,000,000 shares of Common Stock, $.001 par value. At present, we are not authorized to issue any series or shares of preferred stock. The holders of our Common Stock are entitled to one vote per share held and have the sole right and power to vote on all matters on which a vote of stockholders is taken. Voting rights are non-cumulative. Common stockholders are entitled to receive dividends when, as, and if declared by the Board of Directors, out of funds legally available therefore and to share pro rata in any distribution to stockholders. Upon liquidation, dissolution, or the winding up of our Company, common stockholders are entitled to receive the net assets of our Company in proportion to the respective number of shares held by them after payment of liabilities which may be outstanding. The holders of Common Stock do not have any preemptive right to subscribe for or purchase any shares of any class of stock of the Company. The outstanding shares of Common Stock will not be subject to further call or redemption and are fully paid and non-assessable. To the extent that additional common shares are issued, the relative interest of existing stockholders will likely be diluted. 8 Stock Purchase Warrants None. Stock Purchase Options None. ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION. Cautionary and Forward-Looking Statements In addition to statements of historical fact, this Form 10-K contains forward-looking statements. The presentation of future aspects of Online Originals, Inc. (the "Company" or "Issuer") found in these statements is subject to a number of risks and uncertainties that could cause actual results to differ materially from those reflected in such statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which reflect management's analysis only as of the date hereof. Without limiting the generality of the foregoing, words such as "may," "will," "expect," "believe," "anticipate," "intend," or "could" or the negative variations thereof or comparable terminology are intended to identify forward-looking statements. These forward-looking statements are subject to numerous assumptions, risks and uncertainties that may cause the Company actual results to be materially different from any future results expressed or implied by the Company in those statements. Important facts that could prevent the Company from achieving any stated goals include, but are not limited to, the following: (a) volatility or decline of the Company's stock price; (b) potential fluctuation in quarterly results; (c) failure of the Company to earn revenues or profits; (d) inadequate capital to continue or expand its business, inability to raise additional capital or financing to implement its business plans; (e) failure to make sales on an increasing basis; (f) rapid and significant changes in markets; (g) litigation with or legal claims and allegations by outside parties; (h) insufficient revenues to cover operating costs. There is no assurance that the Company will be profitable, the Company may not be able to successfully develop, manage or market its products and services, the Company may not be able to attract or retain qualified executives and personnel, the Company's products and services may become obsolete, government regulation may hinder the Company's business, additional dilution in outstanding stock ownership may be incurred due to the issuance of more shares, warrants and stock options, or the exercise of warrants and stock options, and other risks inherent in the Company's businesses. The Company undertakes no obligation to publicly revise these forward-looking statements to reflect events or circumstances that arise after the date hereof. Readers should carefully review the factors described in other documents the Company files from time to time with the Securities and Exchange Commission, including the Quarterly Reports on Form 10-QSB and any Current Reports on Form 8-K filed by the Company. 9 Plan of Operation for the Next Twelve (12) Months The following discussion of the plan of operation, financial condition, results of operations, cash flows and changes in financial position of our Company should be read in conjunction with our most recent financial statements and notes appearing elsewhere in this Form 10-K; our Form 10-QSB filed on October 10, 2008, our Form 10-QSB filed on July 14, 2008, our Form 10-QSB filed on April 14, 2008, and our Form SB-2 Registration Statement filed on April 18, 2006. Our registered public accounting firm's audit report on our consolidated financial statements as of November 30, 2008, and for each of the years in the two-year period then ended, includes a "going concern" explanatory paragraph that describes substantial doubt about our ability to continue as a going concern. Management's plans in regard to the factors prompting the explanatory paragraph are discussed below. During the year ended November 30, 2008, we continued operations that earned revenue in the form of commission sales. We are continuing the management of our website which is our main source of promotion and facilitation for our members. It outlines the services, description of art pieces, artists, and ordering instructions. We are continuing to contact both experienced and unpublished artists in order to introduce our marketing plan. We will continue to develop our membership program and have contacted the local tourist bureau in order to market our products though their international contacts. In September 2008, a new president was appointed and third director was added to our Board of Directors. We are actively seeking to add new products and/or services that we can offer through our website. Mr. Adams, now having completed his academic studies, will endeavor to cultivate new members and corporate contacts. Ms. Saunders plans to assist us in putting together a new marketing strategy. We have no employees at the present time. We will continue to operate with very limited administrative support as our current officers continue to be responsible for developing and operational duties, without compensation, for at least the next 12 months. Our continuing operations are dependent upon the identification and successful completion of additional long-term or permanent equity financing, the support of creditors and shareholders, and, ultimately, the achievement of profitable operations. There can be no assurances that we will be successful, which would in turn significantly affect our ability to complete the roll-out of our business plan. If not, we will likely be required to reduce operations or liquidate assets. We will continue to evaluate our projected expenditures relative to our available cash and to seek additional means of financing in order to satisfy our working capital and other cash requirements. We believe we do not have sufficient cash resources to satisfy our needs through the end of February 2009. Our ability to satisfy cash requirements thereafter and the need for additional funding is dependent on our ability to generate revenue from our business in sufficient quantity and on a profitable basis. To the extent that we require additional funds to support our operations or the expansion of our business, we may attempt to sell additional equity shares or issue debt. Any sale of additional equity securities will result in dilution to our stockholders. Should we require additional cash in the future, there can be no assurance that we will be successful in raising additional debt or equity financing on terms acceptable to us, if at all. In addition, 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. Management's Discussion and Analysis of Financial Condition and Results of Operations Financial Condition At November 30, 2008, we had a working capital deficit of $6,068 compared to working capital of $19,490 at November 30, 2007. At November 30, 2008, our total 10 assets consisted of cash of $4,904, prepaid expenses of $93 and capital assets of $3,542. This compares with our total assets at November 30, 2007, which consisted of cash of $24,667, prepaid expenses of $93 and capital assets of $7,170. At November 30, 2008, our total current liabilities, consisting of accounts payable of $4,565 and accrued liabilities of $6,500, increased to $11,065 from $5,270 consisting of accounts payable of $270 and accrued liabilities of $5,000 at November 30, 2007. We recognized $2,800 in revenues during the fiscal year ending November 30, 2008, compared to revenues of $6,970 during the year ended November 30, 2007. The $4,170 decrease in revenue was a result of our decreased sales during the year ended November 30, 2008. During the year ended November 30, 2008, our gross margin was $2,800. During the year ended November 30, 2007, we had cost of goods sold of $5,269 resulting in a gross margin of $1,701. During the year ended November 30, 2008, there was no cost of goods sold since the revenue was from commission sales. We have recognized $10,083 in revenue since our inception. Our short and long term survival is dependent on funding from increased sales of products and services, sales of securities as necessary or from shareholder loans. Result of Operations We recognized $2,800 in revenues during the fiscal year ending November 30, 2008, compared to revenues of $6,970 during the year ended November 30, 2007. The $4,170 decrease in revenue was a result of our decreased sales during the year ended November 30, 2008. During the year ended November 30, 2008, our gross margin was $2,800. During the year ended November 30, 2007, we had cost of goods sold of $5,269 resulting in a gross margin of $1,701. During the year ended November 30, 2008, there was no cost of goods sold since the revenue was from commission sales. During the year ended November 30, 2008, we incurred expenses of $31,250 compared to expenses of $39,289 for the year ended November 30, 2007. The decrease of $8,039 was a result of decreased operations over the prior year. The principal component of losses in 2008 was professional fees of $24,318, office and administration expenses of $3,304 and amortization costs of $3,628 compared with the principal component losses in 2007 being professional fees of $18,656, office and administration expenses of $2,145, marketing expenses of $8,461, consulting expenses of $6,875 and amortization costs of $3,152. We recognized a net loss of $28,450 for the year ended November 30, 2008 compared to a net loss of $37,588 for the year ended November 30, 2007. From inception to November 30, 2008 we have incurred a net loss of $82,896. The principal components of losses were professional fees of $55,012, office and administration expenses of $8,572, marketing costs of $8,461, cost of goods sold of $5,379, consulting fees of $7,550, organizational costs of $665, and depreciation and amortization of $7,342. As of January 31, 2009, our net cash balance is approximately $2,500. In addition, we have prepaid expenses of $93. Cash on hand is currently our only source of liquidity. We do not have any lending arrangements in place with banking or financial institutions and we do not anticipate that we will be able to secure these funding arrangements in the near future. We believe our existing cash balance is not sufficient to carry our normal operations for the next 12 months. To the extent that we require additional funds to support our operations or the expansion of our business, we may attempt to sell additional equity shares or issue debt. Any sale of additional equity securities will result in dilution to our stockholders. There can be no assurance that additional financing, if required, will be available to our company or on acceptable terms. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK We believe our market risk exposures arise primarily from exposures to fluctuations in interest rates and exchange rates. We presently only transact business in Canadian and US Dollars. We believe that the exchange rate risk surrounding the future transactions of the Company will not materially or adversely affect our future earnings. We do not believe that we are subject to any seasonal trends. We do not use derivative financial instruments to manage risks or for speculative or trading purposes. 11 Off Balance Sheet Arrangements. None. ITEM 7. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA. The financial statements required by this Item begin on Page F-12 of this Form 10-K, and include: Report of Independent Registered Public Accounting Firm; Balance Sheets; Statements of Operations, Statements of Cash Flows, Statement of Stockholders' Equity (Deficit); and Notes to Financial Statements. 12 ONLINE ORIGINALS, INC. (A Development Stage Company) FINANCIAL STATEMENTS REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM November 30, 2008 Page Report of Independent Registered Public Accounting Firm F-13 Financial Statements: Balance Sheets F-14 Statements of Operations F-15 to F-16 Statements of Cash Flows F-17 Statement of Stockholders' Equity (Deficit) F-18 Notes to Financial Statements F-19 to F-23 F-13 Report of Independent Registered Public Accounting Firm Board of Directors Online Originals, Inc. We have audited the accompanying balance sheets of Online Originals, Inc., as of November 30, 2008 and 2007, and the related statements of operations, stockholders' equity, and cash flows for the two years ended November 30, 2008 and 2007, and the period from November 18, 2005 (inception) to November 30, 2008. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States of America). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. The company is not required to have, nor were we engaged to perform an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company's internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Online Originals, Inc. as of November 30, 2008 and 2007, and the results of its operations and cash flows for the two years ended November 30, 2008 and 2007, and the period from November 18, 2005 (inception) to November 30, 2008, in conformity with accounting principles generally accepted in the United States of America. The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As described in Note 3, the Company has minimal business operations to date and has losses to date of approximately $82,900, which raise substantial doubt about its ability to continue as a going concern. Management's plans in regard to this matter are also discussed in Note 3. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. SCHUMACHER & ASSOCIATES, INC. Denver, Colorado February 25, 2009 F-14
ONLINE ORIGINALS, INC. (A Development Stage Company) BALANCE SHEETS November 30, 2008 November 30, 2007 ASSETS Current Assets Cash $ 4,904 $ 24,667 Prepaid expense 93 93 ------------------------------------------ Total Current Assets 4,997 24,760 Computer Equipment, net of depreciation of $4,081 and $1,802 2,755 5,034 Website Development Costs, net of amortization of $3,261 and $1,911 787 2,136 ------------------------------------------ TOTAL ASSETS $ 8,539 $ 31,930 ========================================== LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) LIABILITIES Current Liabilities Accounts payable $ 4,565 $ 270 Accrued liabilities 6,500 5,000 ------------------------------------------ Total Liabilities, all current 11,065 5,270 ------------------------------------------ Commitments and Contingencies (Notes 3, 5 and 6) STOCKHOLDERS' EQUITY (DEFICIT) Capital Stock Authorized: 75,000,000 common shares, par value $0.001 per share Issued and outstanding: 3,200,000 common shares 3,200 3,200 Additional paid-in capital 77,299 77,299 Accumulated comprehensive (loss) (129) 607 Deficit Accumulated During the Development Stage (82,896) (54,446) ------------------------------------------ Total Stockholders' Equity (Deficit) (2,526) 26,660 ------------------------------------------ TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) $ 8,539 $ 31,930 ========================================== The accompanying notes are an integral part of these statements. 15
ONLINE ORIGINALS, INC. (A Development Stage Company) STATEMENTS OF OPERATIONS Cumulative amounts from Date of Inception Year Ended Year Ended on November 18 2005 to November 30, November 30, 2007 November 30, 2008 2008 --------------------------------------------------------------------------- Revenue $ 2,800 $ 6,970 $ 10,083 --------------------------------------------------------------------------- Cost of Goods Sold - 5,269 5,379 --------------------------------------------------------------------------- 2,800 1,701 4,704 --------------------------------------------------------------------------- Expenses Amortization 3,628 3,152 7,342 Consulting - 6,875 7,550 Marketing - 8,461 8,461 Office and administration 3,304 2,145 8,572 Organizational costs - - 665 Professional fees 24,318 18,656 55,012 --------------------------------------------------------------------------- 31,250 39,289 87,602 --------------------------------------------------------------------------- Net Loss From Operations (28,450) (37,588) (82,898) --------------------------------------------------------------------------- Other Income Interest Income - - 2 Net Loss For The Period $ (28,450) $ (37,588) $ (82,896) =========================================================================== Basic And Diluted Loss Per Share $ (0.01) $ (0.01) $ (0.03) =========================================================================== Weighted Average Number Of Shares Outstanding 3,200,000 3,200,000 3,039,044 =========================================================================== The accompanying notes are an integral part of these statement. F-16
ONLINE ORIGINALS, INC. (A Development Stage Company) STATEMENTS OF CASH FLOWS Cumulative amounts from Year ended Year ended Date of Inception on November 30 2008 November 30, 2007 November 18, 2005 to November 30, 2008 - ----------------------------------------------------------------------------------------------------------------------------- Cash Flows from Operating Activities Net loss $ (28,450) $ (37,588) $ (82,896) Adjustments to Reconcile Net Loss to Net Cash Used by Operating Activities: Depreciation and amortization 3,628 3,152 7,342 Inventory - 2,660 - Prepaid expenses - 6,875 (93) Accounts payable and accrued liabilities 5,795 (28) 11,065 ---------------------------------------------------------------------------- Cash (Used in) Operating Activities (19,027) (24,929) (64,582) ---------------------------------------------------------------------------- Cash Flows from Investing Activities Additions to capital assets - (6,836) (6,836) Additions to intangibles - - (4,048) ---------------------------------------------------------------------------- Net Cash (Used in) Investing Activities - (6,836) (10,884) ---------------------------------------------------------------------------- Cash Flows From Financing Activities Issuance of common shares - - 95,000 Offering costs - - (14,501) Foreign currency translation adjustment (736) 1,836 (129) ---------------------------------------------------------------------------- Net Cash Provided by (Used in) Financing Activities (736) 1,836 80,370 ---------------------------------------------------------------------------- (Decrease) Increase in Cash during the Period (19,763) (29,929) 4,904 Cash, Beginning Of Period 24,667 54,596 - ---------------------------------------------------------------------------- Cash, End Of Period $ 4,904 $ 24,667 $ 4,904 ============================================================================ Supplemental Disclosure Of Cash Flow Cash paid for: Interest $ - $ - $ - Income taxes $ - $ - $ - ============================================================================ The accompanying notes are an integral part of these statements. F-17
ONLINE ORIGINALS, INC. (A Development Stage Company) STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT) For the Period from November 18, 2005 (Inception) through November 30, 2008 DEFICIT ACCUMULATED CAPITAL STOCK ACCUMULATED ------------------------------------------- ADDITIONAL DURING THE COMPRE- PAID-IN DEVELOPMENT HENSIVE SHARES AMOUNT CAPITAL STAGE INCOME (LOSS) TOTAL ----------------------------------------------------------------------------------------------------- November 18, 2005 - Shares issued for cash at $0.01 1,800,000 $ 1,800 $ 16,200 $ - $ - $ 18,000 November 28, 2005 - Shares issued for cash at $0.01 700,000 700 6,300 - - 7,000 Net loss for the period ended November 30, 2005 - - - (2,680) (2,680) ----------------------------------------------------------------------------------------------------- Balance, November 30, 2005 2,500,000 2,500 22,500 (2,680) - 22,320 July 21, 2006 - Shares issued for cash at 0.10, 700,000 700 54,799 - - 55,499 net of offering costs of $14,501 Foreign currency translation Net loss for the year ended November 30, 2006 - - - (14,178) (14,178) ----------------------------------------------------------------------------------------------------- Balance, November 30, 2006 3,200,000 3,200 77,299 (16,858) (1,229) 62,412 Foreign currency translation Net loss for the year ended November 30, 2007 - - - (37,588) - (37,588) ----------------------------------------------------------------------------------------------------- Balance, November 30, 2007 3,200,000 $ 3,200 $ 77,299 $ (54,446) $ 607 $ 26,660 Foreign currency translation Net loss for the year ended November 30, 2008 - - - (28,450) - (28,450) ----------------------------------------------------------------------------------------------------- Balance, November 30, 2008 3,200,000 $ 3,200 $ 77,299 $ (82,896) $ (129) $ (2,526) ===================================================================================================== The accompanying notes are an integral part of these statements. F-18
ONLINE ORIGINALS, INC. (A Development Stage Company) NOTES TO FINANCIAL STATEMENTS November 30, 2008 1. NATURE AND CONTINUENCE OF OPERATIONS a) Organization Online Originals ("The Company") was incorporated in the State of Nevada, United States of America, on November 18, 2005. The Company's year end is November 30th. b) Development Stage Activities The company is in the development stage and has realized minimal revenues. The Company's business plan is to develop a membership based website art gallery/auction house specifically focused on displaying and selling original artwork. Based upon their business plan, the Company is a development stage enterprise. Accordingly, financial statements are presented in conformity with the accounting principles generally accepted in the United States of America that apply in establishing operating enterprises. As a development stage enterprise, the Company discloses the deficit accumulated during the development stage and the cumulative statements of operations and cash flows from inception to the current balance sheet date. 2. SIGNIFICANT ACCOUNTING POLICIES This summary of significant accounting policies is presented to assist in understanding the Company's financial statements. The financial statements and notes are representations of management who is responsible for their integrity and objectivity. These accounting policies conform to generally accepted accounting principles in the United States of America and have been consistently applied in the preparation of the financial statements. The financial statements are stated in United States of America dollars. a) Organizational and Start-up Costs Costs of start-up activities, including organizational costs, are expensed as incurred in accordance with SOP 98-5. b) Income Taxes The Company adopted the Statement of Financial Accounting Standards No. 109 - "Accounting for Income Taxes" (SFAS 109). SFAS 109 requires the use of the asset and liability method of accounting of income taxes. Under the asset and liability method of SFAS 109, deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statements 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. A valuation allowance is established when necessary to reduce deferred tax assets to the amount expected to be realized. c) Basic and Diluted Loss per Share In accordance with SFAS No. 128 - "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. Diluted earnings per share is not shown for periods in which the Company incurs a loss because it would be anti-dilutive. At November 30, 2008, the Company had no stock equivalents that were anti-dilutive and excluded in the earnings per share computation. F-19 ONLINE ORIGINALS, INC. (A Development Stage Company) NOTES TO FINANCIAL STATEMENTS November 30, 2008 d) Estimated Fair Value of Financial Instruments The carrying value of the Company's financial instruments, consisting of cash, prepaid expense, accounts payable and accrued liabilities approximate their fair value due to the short-term maturity of such instruments. Unless otherwise noted, it is management's opinion that the Company is not exposed to significant interest, currency or credit risks arising from these financial statements. e) Revenue Recognition It is the Company's policy that revenue is recognized in accordance with SEC Staff Accounting Bulletin (SAB) No. 104, "Revenue Recognition." Under SAB 104, product revenues (or service revenues) are recognized when persuasive evidence of an arrangement exists, delivery has occurred (or service has been performed), the sales price is fixed and determinable and collectability is reasonably assured. Revenue recognition from consignment inventory consists of commission income. f) Inventory Inventory is stated at the lower of cost or market. We generally determine the costs by the first-in first-out or average cost methods. Cost includes all costs of purchase, cost of conversion and other costs incurred in bringing the inventory to its present location and condition. g) Foreign Currency Translations The Company uses the Canadian dollar and the U.S. dollar as its functional currency. The Company's reporting currency is the U.S. dollar. All transactions initiated in other currencies are re- measured into the functional currency as follows: Monetary assets and liabilities at the rate of exchange in effect at the balance sheet date, ii) Non-monetary assets and liabilities, and equity at historical rates, and iii) Revenue and expense items at the average rate of exchange pre -vailing during the period. Gains and losses on re-measurement are included in determining net income for the period. Translation of balances from the functional currency into the reporting currency is conducted as follows: Assets and liabilities at the rate of exchange in effect at the balance sheet date, ii) Equity at historical rates, and iii) Revenue and expense items at the average rate of exchange prevailing during the period. Translation adjustments resulting from translation of balances from functional to reporting currency are accumulated as a separate component of shareholders' equity as a component of comprehensive income or loss. h) Comprehensive Income (Loss) The Company adopted Statement of Financial Accounting Standards (SFAS) No. 130, "Reporting Comprehensive Income." SFAS 130 requires that the components and total amounts of comprehensive income be displayed in the financial statements beginning in 1998. Comprehensive income includes net income and all changes in equity during a period that arises from non-owner sources, such as foreign currency items and unrealized gains and losses on certain investments in equity securities. i) Use of Estimates The preparation of the Company's financial statements are in conformity with generally accepted accounting principles which F-20 ONLINE ORIGINALS, INC. (A Development Stage Company) NOTES TO FINANCIAL STATEMENTS November 30, 2008 requires management to make estimates and assumptions that affect the amounts reported in these financial statements and accompanying notes. Actual results could differ from those estimates. j) Cash and Cash Equivalents All highly liquid debt instruments with an original maturity of three months or less are considered to be cash equivalents. k) Equipment Property and equipment are recorded at cost and depreciated over their estimated useful lives. The Company uses the straight-line method of depreciation. A summary of the estimated useful lives follows: Computer equipment 3 years l) Website Development Costs Website development costs representing capitalized costs of design, configuration, coding, installation and testing of the Company's website is capitalized until initial implementation. Upon implementation, the asset is amortized to expense over its estimated useful life of three years using the straight-line method. Accumulated amortization at November 30, 2008 was $3,261 and amortization expense for the year ended November 30, 2008 was $1,349. Estimated future amortization for the website is estimated to be $788 for the year ending November 30, 2009. Ongoing website post-implementation costs of operation, including training and application maintenance, will be charged to expense as incurred. m) Concentrations Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents. At November 30, 2008, approximately $4,904 of cash or cash equivalents was not insured by agencies of the U.S. Government. n) Recent Accounting Pronouncements There were various accounting standards and interpretations issued during 2008 and 2007, none of which are expected to have a material impact on the Company's financial position, operations or cash flows. o) Other The Company consists of one reportable business segment. The Company paid no dividends during the periods presented. 3. BASIS OF PRESENTATION - GOING CONCERN The accompanying financial statements have been prepared in conformity with generally accepted accounting principles in the United States of America, which contemplates continuation of the Company as a going concern. However, the Company has minimal business operations to date and has losses at November 30, 2008 of approximately $82,900. These matters raise substantial doubt about its ability to continue as a going concern. In view of these matters, realization of certain of the assets in the accompanying balance sheet is dependent upon its ability to meet its financing requirements, raise additional capital, and the F-21 ONLINE ORIGINALS, INC. (A Development Stage Company) NOTES TO FINANCIAL STATEMENTS November 30, 2008 success of its future operations. There is no assurance that future capital raising plans will be successful in obtaining sufficient funds to assure its eventual profitability. Management is actively seeking to add new products and/or services in order to show profitability. In addition, one of the members of the board of directors has agreed to loan funds to the Company if needed. To date, due to the continued economic conditions, they have not yet been able to find products and services that would contribute to their business. We believe that actions planned and presently being taken to revise its operating and financial requirements will provide the opportunity for the Company to continue as a going concern. The financial statements do not include any adjustments that might result from these uncertainties 4. COMMON STOCK The Company's authorized common stock consists of 75,000,000 shares with a par value of $0.001 per share. On November 18, 2005, the Company issued 1,800,000 shares of common stock at a price of $0.01 for cash totalling $18,000. On November 28, 2005, the Company issued 700,000 shares of common stock at a price of $0.01 for cash totalling $7,000. On July 21, 2006, the Company issued 700,000 shares of common stock at a price of $0.10 for cash totalling $70,000. The Company incurred offering costs of $14,501 related to this offering, resulting in net proceeds of $55,499. 5. INCOME TAXES The Company is subject to foreign and domestic income taxes. The Company has had no income, and therefore has paid no income tax. 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 from net operating loss (NOL) carry-forwards. The NOL carry forwards expire in various years through 2028. The Company's deferred tax assets are offset by a valuation allowance due to the uncertainty of the realization of the NOL carry-forwards. NOL carry-forwards may be further limited by a change in company ownership and other provisions of the tax laws. The Company's deferred tax assets, valuation allowance, and change in valuation allowance are as follows:
Estimated Tax Change in Estimated NOL Benefit from Valuation Valuation Net Tax Period Ending Carry-forward NOL Expires NOL Allowance Allowance Benefit November 30, 2007 54,446 Various 13,612 (9,397) - November 30, 2008 28,450 2028 7,112 (7,112) -
Income taxes at the statutory rate are reconciled to the Company's actual income taxes as follows: Income tax benefit at statutory rate resulting from net operating loss carry forward (25%) Deferred income tax valuation allowance 25% ----------- ----------- Actual tax rate 0% =========== F-22 ONLINE ORIGINALS, INC. (A Development Stage Company) NOTES TO FINANCIAL STATEMENTS November 30, 2008 6. RELATED PARTY TRANSACTIONS The Company uses the offices of its President for minimal office facility needs for no consideration. No provision for these costs has been provided since it has been determined that they are immaterial. F-23 ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None. ITEM 8A. Controls and procedures Disclosure Controls and Procedures The Company, under the supervision and with the participation of the Company's management, including the Company's President and Chief Financial Officer, performed an evaluation of the effectiveness of the design and operation of the Company's disclosure controls and procedures as of December 14, 2008. Based on that evaluation, the Company's management concluded that the Company's disclosure controls and procedures were effective as of November 30, 2008. ITEM 8(A)T. INTERNAL CONTROLS AND PROCEDURES Management's Report on Internal Control over Financial Reporting Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act). Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States. Because of its inherent limitations, internal controls over financial reporting may not prevent or detect misstatements. Therefore, even those systems determined to be effective can provide only reasonable assurance of achieving their control objectives. Furthermore, smaller reporting companies face additional limitations. Smaller reporting companies employ fewer individuals and find it difficult to properly segregate duties. Smaller reporting companies tend to utilize general accounting software packages that lack a rigorous set of software controls. Our management, with the participation of the President and Chief Financial Officer, evaluated the effectiveness of the Company's internal control over financial reporting as of November 30, 2008. In making this assessment, our management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control -- Integrated Framework. Based on that evaluation, our management concluded that, as of November 30 2008, our internal control over financial reporting was not effective due to material weaknesses in the system of internal control. Specifically, management identified the following control deficiency: - The Company has installed accounting software that does not prevent erroneous or unauthorized changes to previous reporting periods and does not provide an adequate audit trail of entries made in the accounting software. Accordingly, while the Company has identified certain material weaknesses in its system of internal control over financial reporting, it believes that it has taken reasonable steps to ascertain that the financial information contained in this report is in accordance with generally accepted accounting principles. Management has determined that current resources would be appropriately applied elsewhere and when resources permit, they will alleviate material weaknesses through various steps. This Annual Report does not include an attestation report of the Company's registered public accounting firm regarding internal control over financial reporting. Management's report was not subject to attestation by the Company's registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit the Company to provide only management's report in this Annual Report. 24 Changes in Internal Control over Financial Reporting There were no changes in internal control over financial reporting that occurred during the last fiscal quarter covered by this report that have materially affected, or are reasonably likely to affect, the Company's internal control over financial reporting. ITEM 8B. Other Information None. PART III ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS, CONTROL PERSONS AND CORPORATE GOVERNANCE; COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT Directors and Executive Officers Effective September 12, 2008, Gaye Adam resigned from the Company Board of Directors. She also resigned as the Company's President and Chief Executive Officer, at that time. On September 12, 2008, Shari Sookarookoff was appointed as a director and as President and Chief Executive Officer of the Company. Ruth Saunders was also appointed as a director of the Company. Greg Adams was reappointed as a director and as Secretary/Treasurer and Chief Financial Officer of the Company. The following table sets forth the names, ages and positions of the current directors and executive officers of the Company, as of the date of this filing: Name Age Offices Held Shari Sookarookoff 30 Director, CEO, President Greg Adams 26 Director, CFO, Secretary, Treasurer Ruth Saunders 33 Director SHARI SOOKAROOKOFF, CEO, PRESODENT, MEMBER OF THE BOARD Shari Sookarookoff has served as President and Director since September 12, 2008. The term of her office is for two years and is thereafter renewable on an annual basis. Since 1994, Ms. Sookarookoff has been employed by Alberta Forest Products Shippers Association, a freight broker located in Edmonton, Alberta, Canada that is dedicated to facilitate the freight requirements of numerous lumber mills in the Province of Alberta, Canada. In June 1999, she was promoted to traffic coordinator. In July 2002, Ms. Sookarookoff left Alberta Forest Products Shippers Association for her present position with Spruce Land Millworks (located in Spruce Grove, Alberta, Canada) as manager of the shipping department. Resourcing her accumulated knowledge within the truck brokerage industry. Ms. Sookarookoff is not an officer or director of any other reporting company that files annual, quarterly or periodic reports with the United States Securities and Exchange Commission. GREGORY ADAMS, CFO, SECRETARY/TREASURER, MEMBER OF THE BOARD Greg Adams has served as CFO, Secretary/Treasurer, and Director since November 28, 2005. The term of his office is for two years and is thereafter renewable on an annual basis. Mr. Adams has been an independent contractor in the field of animation since April 2006. In April 2006, he graduated with a Diploma in Commercial Animation from Capilano University (Formerly Capilano College) .in British Columbia, Canada. The focus of his course was commercial animation. Prior to registering at Capilano College in January 2003, he received diplomas for life drawing and portraiture courses at Vancouver Academy of Art in 2002, and completed part time 25 drawing courses at Capilano College, in December 2001. Mr. Adams completed his senior secondary education in Salmon Arm, British Columbia in June 2001. Mr. Adams has computer experience using Windows 98/ME/XP, Adobe After Effects, Adobe Photoshop CS 2, Kinetix 3D Studio Max 3.0+, Macromedia Flash MX & Flash MX 2004, and Adobe Premiere 6.0. As part of his curriculum at Capilano College, Mr. Adams developed a Flash based website to showcase his portfolio. RUTH SAUNDERS, MEMBER OF THE BOARD Ruth Saunders has served as Director since September 12, 2008. The term of her office is for two years and is thereafter renewable on an annual basis. Since graduating in the spring of 2008 with a Diploma in Public Relations from Grant MacEwan College in Edmonton, Ms. Saunders has been employed by Alberta Health and Wellness in their public relations department. After having received a Journalism Diploma in 1997 from Grant MacEwan College, Ms. Saunders was a Journalist for ten (10) years. She worked first with the Hinton Parklander in Hinton, Alberta, for 3 years and then with the Wetaskiwin Times Advertiser in Wetaskiwin, Alberta, from 2001 though 2007. Ms. Saunders is not an officer or director of any other reporting company that files annual, quarterly, or periodic reports with the United States Securities and Exchange Commission. GAYE ADAMS Ms. Adams served as CEO, President, and Director from November 18, 2005 until her resignation on September 12, 2008. Ms. Adams also served as the Secretary/Treasurer from November 18th, 2005 until her resignation date of November 28th, 2005. Her son, Gregory Adams is presently serving as Secretary/Treasurer and is also a member of the Board. Ms. Adams has been self-employed for the last twenty years. She is an artist and business woman with experience in motivational speaking, teaching, sales and marketing. In 2003 Ms. Adams was given the designation of Senior Signature status with the Federation of Canadian Artists. In 2002 she was given Associate status with the Federation of Canadian Artists, and in 1998 given Signature status with the Federation of Canadian Artists. Significant Employees None. Family Relationships Gaye Adams and Gregory Adams are mother and son. Involvement in Certain Legal Proceedings None. Section 16(a) Beneficial Ownership Reporting Compliance Section 16(a) of the Securities and Exchange Act of 1934 requires any person who is a director or executive officer or who beneficially holds more than ten percent (10%) of any class of our securities which have been registered with the Securities and Exchange Commission, to file reports of initial ownership and changes in ownership with the Securities and Exchange Commission. These persons are also required under the regulations of the Securities and Exchange Commission to furnish us with copies of all Section 16(a) reports they file. To our knowledge, based solely on our review of the copies of the Section 16(a) reports furnished to us and a review of our shareholders of record for the fiscal year ended November 30, 2008, there were no filing delinquencies. 26 Code of Ethics We have not yet prepared a written code of ethics and employment standards. We have only recently commenced operations. We expect to implement a Code of Ethics during the current fiscal year. Corporate Governance; Audit Committee Financial Expert We currently do not have an audit committee financial expert or an independent audit committee expert due to the fact that our Board of Directors currently does not have an independent audit committee. Our Board of Directors currently has only one (1) independent member, and thus, does not have the ability to create a proper independent audit committee. ITEM 10. EXECUTIVE COMPENSATION The Executive Officers have not received any compensation since the date of incorporation of our Company, and we did not accrue any compensation. There are no securities authorized for issuance under any equity compensation plan, or any options, warrants, or rights to purchase our common stock. Compensation of Directors We do not compensate our directors for their time spent on behalf of our Company, but they are entitled to receive reimbursement for all out of pocket expenses incurred for attendance at our Board of Directors meetings. Pension and Retirement Plans Currently, we do not offer any annuity, pension or retirement benefits to be paid to any of our officers, directors or employees, in the event of retirement. There are also no compensatory plans or arrangements with respect to any individual named above which results or will result from the resignation, retirement or any other termination of employment with our company, or from a change in the control of our Company. Employment Agreements We do not have written employment agreements with any of our key employees. Audit Committee Presently the Board of Directors is performing the duties that would normally be performed by an audit committee. We intend to form a separate audit committee, and are seeking potential independent directors. We are seeking experienced business people and plan to appoint an individual qualified as an audit committee financial expert. ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS The following table sets forth certain information, as of January 31, 2009 with respect to any person (including any "group." as that term is used in Section 13(d)(3) of the Securities Exchange Act of 1934, as amended (the "Exchange Act")) who is known to the Company to be the beneficial owner of more than five percent of any class of the Company's voting securities, and as to those shares of the Company's equity securities beneficially owned by each its director, the executive officers of the company and all of its directors and executive officers of the Company and all of its directors and executive officers as a group. Unless otherwise specified in the table below, such information, other than information with respect to the directors and officers of the Company, is based on a review of statements filed, with the Securities and Exchange commission (the "Commission") pursuant to Sections 13 (d), 13 (f), and 13 (g) of the Exchange Act with respect to the Company's Common Stock. As of November 30, 2008, there were 3,200,000 shares of Common Stock outstanding. The number of shares of Common Stock beneficially owned by each person is determined under the rules of the Commission and the information is not necessarily indicative of beneficial ownership for any other purpose. Under such rules, beneficial ownership includes any shares as to which such person has sole or shared voting power or investment power and also any shares which the 27 individual has the right to acquire within 60 days after the date hereof, through the exercise of any stock option, warrant or other right. Unless otherwise indicated, each person has sole investment and voting power (or shares such power with his or her spouse) with respect to the shares set forth in the following table. The inclusion herein of any shares deemed beneficially owned does not constitute an admission of beneficial ownership of those shares. The table also shows the number of shares beneficially owned as of November 30, 2008 by each of the individual directors and executive officers and by all directors and executive officers as a group.
================================================================================================== Title of Name and Address of Beneficial Owner Amount and Class Nature of Percent of Beneficial Class(1) Ownership - -------------------------------------------------------------------------------------------------- Common Shari Sookarookoff 1,800,000 56.25% CEO, President & member of the Board of Directors 328 Twin Brooks Dr NW Edmonton AB, Canada, T6J 6S5 - -------------------------------------------------------------------------------------------------- - -------------------------------------------------------------------------------------------------- Common Greg Adams 700,000 21.875% CEO, President & member of the Board of Directors 328 Twin Brooks Dr NW Edmonton AB, Canada, T6J 6S5 - -------------------------------------------------------------------------------------------------- - -------------------------------------------------------------------------------------------------- Common Ruth Saunders 0 0.00% Director 3508 - 48 Street Edmonton, AB, Canaca, T6L 3R4 - -------------------------------------------------------------------------------------------------- - -------------------------------------------------------------------------------------------------- Common Directors and officers as a group (3 individuals) 2,500,000 78.125% ==================================================================================================
(1) Percent of Ownership is calculated in accordance with the Securities and Exchange Commission's Rule 13(d) - 13(d)(1). Based on 3,200,000 shares of common stock issued and outstanding. ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE. We have not entered into any transaction nor are there any proposed transactions in which any founder, director, executive officer, shareholder of our company or any member of the immediate family of any of the foregoing had or is to have a direct or indirect material interest. ITEM 13. EXHIBITS. The following is a complete list of exhibits filed as part of this Form 10K. Exhibit number corresponds to the numbers in the Exhibit table of Item 601 of Regulation S-B. Exhibit Index 3.1 Articles of Incorporation(1) 3.2 Bylaws(1) 31.1 Section 302 Certification - Chief Executive Officer.* 31.2 Section 302 Certification - Chief Financial Officer.* 32.1 Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 - Chief Executive Officer.* 32.2 Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 - Chief Financial Officer.* * Filed herewith. (1)Incorporated by reference to our SB-2 Registration Statement, file number 333-133347, filed on April 18, 2006. 28 ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES Audit Fees. The aggregate fees billed by our auditors, for professional services rendered for the audit of our annual financial statements, and for the reviews of the financial statements included in our Quarterly Reports on Form 10-QSB during the fiscal years ended November 30, 2008 and 2007, were $8,050 and $6,750 respectively. Audit Related Fees. We incurred nil fees to auditors for audit related fees during the fiscal year ended November 30, 2008 and 2007. Tax Fees. We incurred nil fees to auditors for tax compliance, tax advice or tax compliance services during the fiscal year ended November 30, 2008 and 2007. All Other Fees. We did not incur any other fees billed by auditors for services rendered to our Company, other than the services covered in "Audit Fees" for the fiscal year ended November 30, 2008 and 2007. The Board of Directors has considered whether the provision of non-audit services is compatible with maintaining the principal accountant's independence. Since there is no audit committee, there are no audit committee pre-approval policies and procedures. 29 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, on this 6th day of March, 2009. ONLINE ORIGINALS, INC. Date: May 26, 2009 By: /s/ Shari Sookarookoff ---------------------- Name: Shari Sookarookoff Title: President/CEO, principal executive officer, & Director Date: May 26, 2009 By: /s/ Gregory Adams ----------------- Name: Gregory Adams Title: Chief Financial Officer, principal financial officer and principal accounting officer, & Director Date: May 26, 2009 By: /s/ Ruth Saunders -------------------- Name: Ruth Saunders Title: Director 30 EX-31.1 2 ex31-1a.txt EXHIBIT 31.1 CERTIFICATION PURSUANT TO 18 U.S.C. ss. 1350, AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002 I, Shari Sookarookoff, certify that: 1. I have reviewed this 10-K of Online Originals, Inc.; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; (b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; (c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and (d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: May 26, 2009 /s/ Shari Sookarookoff - ----------------------------------------- Shari Sookarookoff President and Chief Executive Office EX-31.2 3 ex31-2a.txt EXHIBIT 31.2 CERTIFICATION PURSUANT TO 18 U.S.C. ss. 1350, AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002 I, Gregory Adams, certify that: 1. I have reviewed this 10-K of Online Originals, Inc.; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; (b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; (c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and (d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: May 26, 2009 /s/ Gregory Adams - ----------------------------------------- Gregory Adams Chief Financial Officer, principal financial officer and principal accounting officer EX-32.1 4 ex32-1.txt EXHIBIT 32.1 CERTIFICATION PURSUANT TO 18 U.S.C. 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 In connection with the Annual Report of ONLINE ORIGINALS, INC. (the "Company") on Form 10-K for the period ended November 30, 2008, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Shari Sookarookoff, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that: The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. Date: May 26, 2009 By: /s/ Shari Sookarookoff Shari Sookarookoff Chief Executive Officer, principal executive officer EX-32.2 5 ex32-2.txt EXHIBIT 32.2 CERTIFICATION PURSUANT TO 18 U.S.C. 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 In connection with the Annual Report of ONLINE ORIGINALS, INC. (the "Company") on Form 10-K for the period ended November 30, 2008, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Gregory Adams, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that: The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. Date: May 26, 2009 By: /s/ Gregory Adams Gregory Adams Chief Financial Officer, principal financial officer and principal accounting officer -----END PRIVACY-ENHANCED MESSAGE-----