XOTC:ONIN Quarterly Report 10-Q/A Filing - 6/30/2012

Effective Date 6/30/2012

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.  20549

Form 10-Q/A
(Amendment No. 1)

x  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2012

¨  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number 000-54607


ONLINE INTERNET NETWORK, INC.
(Exact name of registrant as specified in its charter)

Nevada
 
27-3195252
(State or other jurisdiction of incorporation or organization)
 
(I.R.S. Employer Identification No.)

8589 Aero Drive, Suite 200, San Diego, CA
 
92123
(Address of principal executive offices)
 
(Zip Code)

(858) 634-6600
(Registrant’s telephone number, including area code)

Copies of Communications to:
Stoecklein Law Group, LLP
401 West A Street
Suite 1150
San Diego, CA 92101
(619) 704-1310
Fax (619) 704-1325

Indicate by check mark whether the issuer (1) 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 ¨

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 x    No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.  See definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Ruble 12b-2 of the Exchange Act.

Large accelerated filer  ¨
Accelerated filer  ¨
   
Non-accelerated filer  ¨ (Do not check if a smaller reporting company)
Smaller reporting company  x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes x    No ¨

The number of shares of Common Stock, $0.001 par value, outstanding on July 31, 2012 was 15,678,840 shares.

 
1

 

 
*EXPLANATORY NOTE –The Registrant is amending this Form 10-Q strictly to supplement the XBRL exhibit requirement. No other disclosure was changed.
  
ONLINE INTERNET NETWORK, INC.
QUARTERLY PERIOD ENDED JUNE 30, 2012

Index to Report on Form 10-Q



     
Page No.
   
PART I - FINANCIAL INFORMATION
 
Item 1.
 
Financial Statements
3
       
Item 2.
 
Management's Discussion and Analysis of Financial Condition and Results of Operations
11
       
Item 3.
 
Quantitative and Qualitative Disclosures About Market Risk
15
       
Item 4T.
 
Controls and Procedures
15
       
   
PART II - OTHER INFORMATION
 
       
Item 1.
 
Legal Proceedings
15
       
Item1A.
 
Risk Factors
15
       
Item 2.
 
Unregistered Sales of Equity Securities and Use of Proceeds
16
       
Item 3.
 
Defaults Upon Senior Securities
16
       
Item 4.
 
Mine Safety Disclosures
16
       
Item 5.
 
Other Information
16
       
Item 6.
 
Exhibits
16
       
   
Signatures
17

 
2

 

 
PART I – FINANCIAL INFORMATION

Item 1. Financial Statements.
 
 

ONLINE INTERNET NETWORK, INC. AND SUBSIDIARY
(FORMERLY SPORT TECH ENTERPRISES, INC.)
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED BALANCE SHEETS
(unaudited)
         
         
   
June 30,
 
March 31,
   
2012
 
2012
         
ASSETS
       
         
Current assets:
       
Cash
 
 $                  6,359
 
 $                          -
Total current assets
 
                    6,359
 
                      -
         
Other assets:
       
Trademark, net
 
                 1,416
 
                 1,457
Website, net
 
                      -
 
                      -
Total other assets
 
                 1,416
 
                 1,457
         
Total assets
 
 $                  7,775
 
 $                 1,457
         
         
LIABILITIES AND STOCKHOLDERS' DEFICIT
       
         
Current liabilities:
       
Bank overdraft
 
 $                          -
 
 $                 2,266
Accounts payable
 
               6,488
 
                 8,838
Accounts payable- related party
 
20,912
 
-
Total current liabilities
 
               27,400
 
               11,104
         
Long term liabilities:
       
Accrued interest payable - related party
 
                 5,158
 
                 3,638
Line of credit - related party
 
             116,281
 
               91,081
Total long term liabilities
 
             121,439
 
               94,719
         
Total liabilities
 
             148,839
 
             105,823
         
Stockholders' deficit:
       
Preferred stock, $0.001 par value, 10,000,000 shares
       
authorized, no shares issued and outstanding
       
as of June 30, 2012 and March 31, 2012
 
                      -
 
                      -
Common stock, $0.001 par value, 100,000,000 shares
       
authorized, 15,678,840 and 15,678,840 shares issued and
       
outstanding as of June 30, 2012 and March 31, 2012, respectively
 
               15,679
 
               15,679
Additional paid-in capital
 
               86,100
 
               86,099
Deficit accumulated during development stage
 
            (242,843)
 
            (206,144)
Total stockholders' deficit
 
            (141,064)
 
            (104,366)
         
Total liabilities and stockholders' deficit
 
 $                 7,775
 
 $                 1,457
         
See Accompanying Notes to Consolidated Financial Statements.
         
 
         


 
3

 


ONLINE INTERNET NETWORK, INC. AND SUBSIDIARY
 
(FORMERLY SPORT TECH ENTERPRISES, INC.)
 
(A DEVELOPMENT STAGE COMPANY)
 
CONSOLIDATED STATEMENTS OF OPERATIONS
 
(unaudited)
 
                   
                   
   
For the
   
For the
   
Inception
 
   
three months
   
three months
   
(July 28, 2010)
 
   
ended
   
ended
   
to
 
   
June 30,
   
June 30,
   
June 30,
 
   
2012
   
2011
   
2012
 
                   
Revenue
  $ -     $ -     $ -  
                         
Operating expenses:
                       
General and administrative
    988       444       8,025  
Amortization
    40       40       249  
Salaries and wages
    13,779       16,755       94,956  
Professional fees
    20,371       46,500       133,453  
Impairment of assets
    -       -       1,003  
                         
Total operating expenses
    35,178       63,739       237,686  
                         
Other income (expenses):
                       
Interest income
    -       1       1  
Interest expense - related party
    (1,521 )     (455 )     (5,158 )
                         
Total other income (expenses)
    (1,521 )     (454 )     (5,157 )
                         
Net loss
  $ (36,699 )   $ (64,193 )   $ (242,843 )
                         
                         
Net loss per common share - basic
  $ (0.00 )   $ (0.01 )        
                         
Weighted average number of common shares
    15,678,840       10,197,440          
outstanding - basic
                       
                         


See Accompanying Notes to Consolidated Financial Statements.
 

 
4

 


ONLINE INTERNET NETWORK, INC. AND SUBSIDIARY
 
(FORMERLY SPORT TECH ENTERPRISES, INC.)
 
(A DEVELOPMENT STAGE COMPANY)
 
CONSOLIDATED STATEMENTS OF CASH FLOWS
 
(unaudited)
 
                   
   
For the
   
For the
   
Inception
 
   
three months
   
three months
   
(July 28, 2010)
 
   
ended
   
ended
   
to
 
   
June 30,
   
June 30,
   
June 30,
 
   
2012
   
2011
   
2012
 
CASH FLOWS FROM OPERATING ACTIVITIES
                 
Net loss
  $ (36,699 )   $ (64,193 )   $ (242,843 )
Adjustments to reconcile net loss
                       
to net cash used in operating activities:
                       
Shares issued for services
    -       -       5,000  
Impairment of goodwill
    -       -       2,000  
Amortization
    40       40       249  
Impairment of assets
    -       -       1,003  
Changes in operating assets and liabilities:
                       
(Decrease)/Increase in accounts payable
    (2,348 )     6,569       29,148  
Increase in accounts payable- Related party
    20,912               20,912  
Increase in accrued interest payable - related party
    1,520       455       5,158  
                         
Net cash used in operating activities
    (16,575 )     (57,129 )     (179,373 )
                         
CASH FLOWS FROM INVESTING ACTIVITIES
                       
Payments for trademarks
    -       -       (2,425 )
Payments for website development
    -       -       (244 )
Net liabilities in acquisition of Squareroot, Inc.
    -       -       (800 )
                         
Net cash used in investing activities
    -       -       (3,469 )
                         
CASH FLOWS FROM FINANCING ACTIVITIES
                       
Bank overdraft
    (2,266 )     -       -  
Proceeds from line of credit - related party
    25,200       17,825       116,281  
Proceeds from sale of common stock, net of offering costs
    -       40,720       72,920  
                         
Net cash provided by financing activities
    22,934       58,545       182,201  
                         
NET CHANGE IN CASH
    6,359       1,416       6,359  
                         
CASH AT BEGINNING OF PERIOD
    -       682       -  
                         
CASH AT END OF PERIOD
  $ 6,359     $ 2,098     $ 6,359  
                         
                         
SUPPLEMENTAL INFORMATION:
                       
Interest paid
  $ -     $ -     $ -  
Income taxes paid
  $ -     $ -     $ -  
                         
Non-cash activities:
                       
Shares issued for services
  $ -     $ -     $ 5,000  
Shares issued for acquisition of Squareroot, Inc.
  $ -     $ -     $ 1,200  
Shares issued for settlement of debt
  $ -     $ -     $ 12,000  
Forgiveness of debt with related party
  $ -     $ -     $ 10,658  
                         
                         
See Accompanying Notes to Consolidated Financial Statements.
 
                         

 
5

 


NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of presentation
The interim consolidated financial statements included herein, presented in accordance with United States generally accepted accounting principles and stated in US dollars, have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures are adequate to make the information presented not misleading.
 
These statements reflect all adjustments, consisting of normal recurring adjustments, which in the opinion of management, are necessary for fair presentation of the information contained therein. It is suggested that these interim financial statements be read in conjunction with the financial statements of the Company as of and for the period ended March 31, 2012 and notes thereto included in the Company’s 10-K annual report and all amendments. The Company follows the same accounting policies in the preparation of interim reports.
 
Results of operations for the interim period are not indicative of annual results.

Organization
On May 24, 2012, the Company changed its name from Sport Tech Enterprises, Inc. to Online Internet Network, Inc.

Principles of consolidation
The consolidated financial statements include the accounts of Online Internet Network, Inc. (Nevada Corporation), and its wholly-owned subsidiary Squareroot, Inc. (Nevada Corporation).  All significant inter-company balances and transactions have been eliminated.  Online Internet Network, Inc. (Nevada Corporation) and Squareroot (Nevada Corporation) will be collectively referred herein as the “Company”.

Nature of operations
The Company will provide a complete internet solution for all service based businesses by supplying a platform to distribute correct business listing data while properly managing their online reputation through the majority of search engine directories and social media networks.

Cash and cash equivalents
For the purpose of the statements of cash flows, all highly liquid investments with an original maturity of three months or less are considered to be cash equivalents. The carrying value of these investments approximates fair value.

Use of estimates
The preparation of financial statements in conformity with generally accepted accounting principles 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 of revenue and expenses during the reporting period. Actual results could differ significantly from those estimates.

Trademarks
ASC 350 requires that goodwill and intangible assets with indefinite useful lives no longer be amortized, but instead tested for impairment at least annually in accordance with the provisions of ASC 350. This standard also requires that intangible assets with definite useful lives be amortized over their respective estimated useful lives to their estimated residual values, and reviewed for impairment. During the three months ended June 30, 2012, the Company recorded $0 impairment of its intangible assets.

 
6

 

NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Trademarks (continued)
The Company's intangible assets consist of the costs of filing and acquiring various trademarks. The trademarks are recorded at cost. The Company determined that the trademarks have an estimated useful life of 10 years and will be reviewed annually for impairment.  Amortization will be recorded over the estimated useful life of the assets using the straight-line method for financial statement purposes. The Company commenced amortization during April 2011.

Fair value of financial instruments
Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as of June 30, 2012. The respective carrying value of certain on-balance-sheet financial instruments approximated their fair values. These financial instruments include cash and accounts payable. Fair values were assumed to approximate carrying values for cash and payables because they are short term in nature and their carrying amounts approximate fair values or they are payable on demand.

Level 1: The preferred inputs to valuation efforts are “quoted prices in active markets for identical assets or liabilities,” with the caveat that the reporting entity must have access to that market.  Information at this level is based on direct observations of transactions involving the same assets and liabilities, not assumptions, and thus offers superior reliability. However, relatively few items, especially physical assets, actually trade in active markets.

Level 2: FASB acknowledged that active markets for identical assets and liabilities are relatively uncommon and, even when they do exist, they may be too thin to provide reliable information. To deal with this shortage of direct data, the board provided a second level of inputs that can be applied in three situations.

Level 3: If inputs from levels 1 and 2 are not available, FASB acknowledges that fair value measures of many assets and liabilities are less precise. The board describes Level 3 inputs as “unobservable,” and limits their use by saying they “shall be used to measure fair value to the extent that observable inputs are not available.” This category allows “for situations in which there is little, if any, market activity for the asset or liability at the measurement date”. Earlier in the standard, FASB explains that “observable inputs” are gathered from sources other than the reporting company and that they are expected to reflect assumptions made by market participants.

Stock-based compensation
The Company records stock based compensation in accordance with the guidance in ASC Topic 505 and 718 which requires the Company to recognize expenses related to the fair value of its employee stock option awards.  This eliminates accounting for share-based compensation transactions using the intrinsic value and requires instead that such transactions be accounted for using a fair-value-based method. The Company recognizes the cost of all share-based awards on a graded vesting basis over the vesting period of the award. 

The Company accounts for equity instruments issued in exchange for the receipt of goods or services from other than employees in accordance with FASB ASC 718-10 and the conclusions reached by the FASB ASC 505-50. Costs are measured at the estimated fair market value of the consideration received or the estimated fair value of the equity instruments issued, whichever is more reliably measurable. The value of equity instruments issued for consideration other than employee services is determined on the earliest of a performance commitment or completion of performance by the provider of goods or services as defined by FASB ASC 505-50.

Earnings per share
The Company follows ASC Topic 260 to account for the earnings per share. Basic earnings per common share (“EPS”) calculations are determined by dividing net income by the weighted average number of shares of common stock outstanding during the year. Diluted earnings per common share calculations are determined by dividing net income by the weighted average number of common shares and dilutive common share equivalents outstanding. During periods when common stock equivalents, if any, are anti-dilutive they are not considered in the computation.

Recent pronouncements
The Company has evaluated the recent accounting pronouncements through August 2012 and believes that none of them will have a material effect on the company’s financial statements.

 
7

 


NOTE 2 – GOING CONCERN
 
The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the recoverability of assets and the satisfaction of liabilities in the normal course of business. As noted above, the Company is in the development stage and, accordingly, has not yet generated revenues from operations. Since its inception, the Company has been engaged substantially in financing activities, developing its business plan and incurring start up costs and expenses. As a result, the Company incurred accumulated net losses from Inception (July 28, 2010) through the period ended June 30, 2012 of ($242,843). In addition, the Company’s development activities since inception have been financially sustained through equity financing.
 
The ability of the Company to continue as a going concern is dependent upon its ability to raise additional capital from the sale of common stock and, ultimately, the achievement of significant operating revenues. These financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts, or amounts and classification of liabilities that might result from this uncertainty.

NOTE 3 – TRADEMARK

Trademark consisted of the following as of:

   
June 30,
   
March 31,
 
   
2012
   
2012
 
Trademark
  $ 1,500     $ 1,500  
Accumulated amortization
    (84 )     (43 )
    $ 1,416     $ 1,457  

During the three months ended June 30, 2012 and 2011, the Company recorded amortization expense of $40 and $40, respectively.

NOTE 4 – LINE OF CREDIT – RELATED PARTY

Line of credit consists of the following at:

   
March 31,
2012
   
March 31,
2012
 
Revolving credit line due to a former officer and director of the Company, unsecured, 6% interest, due in September 2013
  $ 46,381     $ 41,081  
                 
Revolving credit line due to a former officer and director of the Company, unsecured, 6% interest, due in November 2013
    50,000       50,000  
                 
Revolving credit line due to a shareholder of the Company, unsecured, 6% interest, due in April 2014
    11,200          
                 
Revolving credit line due to an officer and director of the Company, unsecured, 6% interest, due in June 2016
    8,700          
                 
                 
    $ 116,281     $ 91,081  

On September 29, 2010, the Company executed a line of credit in the amount of $100,000 with Andrew Widme. The line of credit carries an annual interest rate of 6% and has a term of three years, at which the entire outstanding balance of principal and interest is due in full. In the event of default, the line of credit will bear interest at 10% per annum. As of June 30, 2012, an amount of $46,381 had been used for general corporate purposes with a remaining balance of $53,619 available. Accrued interest payable as of June 30, 2012 was $1,607.

 
8

 


On November 29, 2010, the Company executed a line of credit in the amount of $50,000 with Andrew Widme. The line of credit carries an annual interest rate of 6% and has a term of three years, at which the entire outstanding balance of principal and interest is due in full. In the event of default, the line of credit will bear interest at 10% per annum. As of June 30, 2012, an amount of $50,000 had been used for general corporate purposes with a remaining balance of $0 available. Accrued interest payable as of June 30, 2012 was $3,469.

On April 2, 2012, the Company executed a line of credit in the amount of $50,000 with a shareholder of the Company. The line of credit carries an annual interest rate of 6% and has a term of two years, at which the entire outstanding balance of principal and interest is due in full. In the event of default, the line of credit will bear interest at 10% per annum. As of June 30, 2012, an amount of $11,200 had been used for general corporate purposes with a remaining balance of $38,800 available. Accrued interest payable as of June 30, 2012 was $64.

On June 1, 2012, the Company executed a line of credit in the amount of $100,000 with an officer and director of the Company. The line of credit carries an annual interest rate of 6% and has a term of four years, at which the entire outstanding balance of principal and interest is due in full. In the event of default, the line of credit will bear interest at 10% per annum. As of June 30, 2012, an amount of $8,700 had been used for general corporate purposes with a remaining balance of $91,300 available. Accrued interest payable as of June 30, 2012 was $18.

During the three months ended June 30, 2012 and 2011, interest expense was $1,521 and $455, respectively.
 
 
NOTE 5 – STOCKHOLDERS’ EQUITY
 
The Company is authorized to issue 100,000,000 shares of its $0.001 par value common stock and 10,000,000 shares of its $0.001 par value preferred stock.  The Company did not authorize terms and rights of preferred shares as of June 30, 2012.

On September 7, 2010, the Company issued 60,000 founders’ shares of its $0.001 par value common stock at a price of $0.003 per share for cash of $200.  This transaction is the initial capitalization of the Company and the shares are considered founder shares.
 
 
On September 21, 2010, the Company issued an officer and director of the Company 7,200,000 founders’ shares of its $0.001 par value common stock at a price of $0.003 per share for cash of $24,000.  This transaction is the initial capitalization of the Company and the shares are considered founder shares.

On September 22, 2010, the Company issued 2,400,000 founders’ shares of its $0.001 par value common stock at a price of $0.003 per share for cash of $8,000.  This transaction is the initial capitalization of the Company and the shares are considered founder shares.

On October 1, 2010, the Company issued 360,000 shares of its $0.001 par value common stock at a price of $0.003 per share in exchange for 100% of SquareRoot, Inc. valued at $1,200.

On December 1, 2010, the Company issued 15,000 shares of its common stock toward legal fees at a value of $0.33 per share in exchange for $5,000 of services.  The shares were valued with the fair value of the services rendered.

On May 15, 2011, the Company issued 240 shares of its common stock at a price of $0.83 per share for cash of $200.

On June 28, 2011, the Company issued 4,923,600 shares of its common stock at a price of $0.009 per share for cash of $44,000.  The Company had direct offering costs totaling $3,480 which were netted against the offering proceeds.

On February 13, 2012, the Company issued 720,000 shares of common stock for settlement of debt totaling $12,000.


On February 13, 2012, various shareholders of the Company agreed to return and cancel a total of 33,128,172 shares of common stock.  For accounting purposes, this transaction was accounted for as a reverse stock split.  All shares and per share amounts below have been retroactively adjusted.

 
9

 


On February 14, 2012, the Company effectuated a 30-for-1 forward stock split.  All shares and per share amounts below have been retroactively adjusted.

Common Stock
 
During the three months ended June 30, 2012, there have been no other issuances of common stock.

NOTE 6 – WARRANTS AND OPTIONS

As of June 30, 2012, there were no warrants or options outstanding to acquire any additional shares of common stock.

NOTE 7 – AGREEMENTS

On June 7, 2012, the Company agreed to conduct a spin-off (the “Spin-Off”) of the Company, and SquareRoot.  Prior to the Spin-Off, SquareRoot was a wholly-owned subsidiary of the Company.  In connection with the Spin-Off, the Company entered into the following Agreements (collectively, the “Spin-Off Agreements”):
 
a.  
A Separation and Distribution Agreement that sets forth the arrangements among the Company and SquareRoot regarding the principal transactions to separation, and that governs the relationship of the Company and SquareRoot after the Spin-Off.
b.  
A Trademark License and Royalty Agreement that sets forth the arrangements among the Company and SquareRoot to assign the SquareRoot trademark to SquareRoot.

As of the date of this filing, the shares have not been distributed.

NOTE 8 – SUBSEQUENT EVENTS

During August 2012, the Company received an additional draw of $7,500 from the line of credit with an officer and director of the Company.





 
10

 

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

This Quarterly Report contains “forward-looking statements”.  All statements other than statements of historical fact are “forward-looking statements” for purposes of federal and state securities laws, including, but not limited to, any projections of earnings, revenue or other financial items; any statements of the plans, strategies and objections of management for future operations; any statements concerning proposed new services or developments; any statements regarding future economic conditions or performance; any statements or belief; and any statements of assumptions underlying any of the foregoing.

Forward-looking statements may include the words “may,” “could,” “estimate,” “intend,” “continue,” “believe,” “expect” or “anticipate” or other similar words.  These forward-looking statements present our estimates and assumptions only as of the date of this report.  Accordingly, readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the dates on which they are made.  Except for our ongoing securities laws, we do not intend, and undertake no obligation, to update any forward-looking statement.  You should, however, consult further disclosures we make in future filings of our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K.

Although we believe the expectations reflected in any of our forward-looking statements are reasonable, actual results could differ materially from those projected or assumed in any of our forward-looking statements.  Our future financial condition and results of operations, as well as any forward-looking statements, are subject to change and inherent risks and uncertainties.  The factors impacting these risks and uncertainties include, but are not limited to:
 
 
·  
our current lack of working capital;
·  
inability to raise additional financing;
·  
the fact that our accounting policies and methods are fundamental to how we report our financial condition and results of operations, and they may require our management to make estimates about matters that are inherently uncertain;
·  
deterioration in general or regional economic conditions;
·  
adverse state or federal legislation or regulation that increases the costs of compliance, or adverse findings by a regulator with respect to existing operations;
·  
inability to efficiently manage our operations;
·  
inability to achieve future sales levels or other operating results; and
·  
the unavailability of funds for capital expenditures.

For a detailed description of these and other factors that could cause actual results to differ materially from those expressed in any forward-looking statement, please see “Item 1A. Risk Factors” in this document.

Throughout this Annual Report references to “we”, “our”, “us”, “Online Internet Network”, “the Company”, and similar terms refer to Online Internet Network, Inc.

 
11

 

OVERVIEW AND OUTLOOK

Background

Online Internet Network, (the “Company”) is a company which was incorporated in the State of Nevada in July of 2010 as Sport Tech Enterprises, Inc. On May 24, 2012, the Company changed its name from Sport Tech Enterprises, Inc. to Online Internet Network, Inc.

On June 7, 2012, the company agreed to conduct a spin-off (the “Spin-Off’) of the Company, and SquareRoot. Prior to the Spin-Off, SquareRoot was a wholly-owned subsidiary of the Company. In connection with the Spin-Off, the Company entered into the following Agreements (collectively, the “Spin-Off Agreements”):

a)  
A Separation and Distribution Agreement that sets forth the arrangements among the Company and SquareRoot regarding the principal transactions to separation, and that governs the relationship of the Company and SquareRoot after the Spin-Off.

b)  
A Trademark License and Royalty Agreement that sets forth the arrangements among the Company and SquareRoot to assign the SquareRoot trademark to SquareRoot.

The above agreements were filed as Exhibits 2.1 and 2.2 to the Form 8-K filed June 19, 2012. The shares to be spun-off have not been distributed.

The company effectuated a symbol change effective June 19, 2012. The Company’s new trading symbol on the OTC Quotation Board is “ONIN.”

The Business of the Company



Mission Statement: We are dedicated to building what consumers want from every business, for every business – “The Future is Now”

 
12

 


Online Communications is at the dawn of a new era. Digital and traditional media is transforming the way information is produced and shared. Online Internet Network is a service that works on behalf of local and national business, searching the web to find search engine results, sponsored listings, user reviews, ratings, blogs, posts & mentions to provide a cost effective, comprehensive report showcasing the presence and reputation of the business. Based on the results and correlating score associated with the business, we take action to create, improve, and fix online business listings with a proactive approach and emphasis on reviews associated with each business. Our monthly reporting tool allows each business to track the improvement in their business listings and monitor all reviews, mentions, and ratings in one, easy to use platform. With our solution based reputation management feature, each business is provided with in-house QR coded review cards making review and rating feedback user friendly for each and every one of their customers.

1.  
Objectives:
 
a.  
To always provide a low-cost value added service to every service based business globally.
 
b.  
Increase profits for end-user within a “3 month timeframe”
 
c.  
Solidify the white-label version to provide to large affiliates
 
d.  
Establish mobile-search partnerships with all GPS and Navigation systems
 
2.  
Keys to Success
 
a.  
Communicating the Importance of Review Responses for each customer
 
b.  
Following trends in Rating Systems
 
c.  
Generating Social Media Content
 
3.  
Risks
 
a.  
Will the Best Business Practices for every business category be utilized?
 
b.  
Will there be Global demand for all services Online Internet Network provides?
 
c.  
Will reviews and ratings always determine potential customer decision process?
 
Market Opportunity

Online Internet Network understands the need to stay ahead of the curve in technology, but never loses sight of the current market and its trending in local search. We strive to provide up to date solution based, relevant, verified listing management and platform based network reputation management. We continue to envision the need for proprietary linking analytic technology, allowing our growth to potentially expand well beyond the US and Canada. With over 16 billion local searches performed each year and over 60 million navigation devices in the US alone, we feel the upward trend has just begun.

Going Concern

The Company’s financial statements are prepared using generally accepted accounting principles in the United States of America applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has not yet established an ongoing source of revenues sufficient to cover its operating costs and allow it to continue as a going concern. As of June 30, 2012, the Company had an accumulated deficit of $242,843. The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable. If the Company is unable to obtain adequate capital, it could be forced to cease operations.

The Company is currently contemplating an offering of its equity or debt securities to finance continuing operations. There are no agreements or arrangements currently in place or under negotiation to obtain such financing, and there are no assurances that the Company will be successful and without sufficient financing it would be unlikely for the Company to continue as a going concern.

The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plans described in the preceding paragraph and eventually secure other sources of financing and attain profitable operations.

RESULTS OF OPERATIONS

During the three months ended June 30, 2012 and 2011, we did not generate revenue.

Operating expenses during the three months ended June 30, 2012 were $35,178, all of which consisted of general and administrative expenses such as accounting, professional and miscellaneous office expenditures. In comparison, operating expenses for the period ended June 30, 2011 were $63,739, of which $46,500 was in professional fees.

 
13

 


We have not been profitable from our inception in 2010 through June 30, 2012, and our accumulated deficit amounts to $242,843. There is significant uncertainty projecting future profitability due to our history of losses and lack of revenues. In our current state we have no recurring or guaranteed source of revenues and cannot predict when, if ever, we will become profitable. There is significant uncertainty projecting future profitability due to our minimal operating history and lack of guaranteed ongoing revenue streams.

Liquidity and Capital Resources

As of June 30, 2012, we had $6,359 in cash and did not have any other cash equivalents. The following table provides detailed information about our net cash flow for all financial statement periods presented in this Quarterly Report. To date, we have financed our operations through the issuance of stock and borrowings.

The following table sets forth a summary of our cash flows for the three months ended June 30, 2012 and the period ending June 30, 2011:

 
Three Months Ended June 30, 2012
Three Months Ended
June 30, 2011
Net cash used in operating activities
($16,575)
($57,129)
Net cash used in investing activities
-
-
Net cash provided by financing activities
22,934
58,545
Net increase (decrease) in Cash
6,359
1416
Cash, beginning
-
682
Cash, ending
$       6,359
$      2,098

Since inception, we have financed our cash flow requirements through issuance of common stock. As we expand our activities, we may, and most likely will, continue to experience net negative cash flows from operations, pending receipt of listings or some form of advertising revenues. Additionally we anticipate obtaining additional financing to fund operations through additional common stock offerings, to the extent available, or to obtain additional financing to the extent necessary to augment our working capital.

We anticipate that we will incur operating losses in the next twelve months. Our lack of operating history makes predictions of future operating results difficult to ascertain. Our prospects must be considered in light of the risks, expenses and difficulties frequently encountered by companies in their early stage of development, particularly companies in new and rapidly evolving markets. Such risks for us include, but are not limited to, an evolving and unpredictable business model and the management of growth. To address these risks, we must, among other things, finalize the design of our website, obtain a customer base, implement and successfully execute our business and marketing strategy, continually develop and upgrade our website, provide national and regional businesses with an effective, efficient and accessible website on which we are able to promote our services through the Internet, respond to competitive developments, and attract, retain and motivate qualified personnel. There can be no assurance that we will be successful in addressing such risks, and the failure to do so can have a material adverse effect on our business prospects, financial condition and results of operations.

Operating activities

Net cash used in operating activities was $16,575 for the period ended June 30, 2012, as compared to $57,129 used in operating activities from inception through June 30, 2011. The decrease in net cash used in operating activities was primarily due to a decrease in professional fees, as a result of decreased legal work.

Investing activities

Net cash used in investing activities was $0 for the period ended June 30, 2012, as compared to $0 used in investing activities for the same period in 2011.

Financing activities

Net cash provided by financing activities for the period ended June 30, 2012 was $22,934, as compared to $58,545 for the same period of 2011. The decrease of net cash provided by financing activities was mainly attributable to an offering of common stock for cash and the capital provided through previously executed line of credit.

 
14

 


We believe that cash flow from operations will not meet our present and near-term cash needs and thus we will require additional cash resources, including the sale of equity or debt securities, to meet our planned capital expenditures and working capital requirements for the next 12 months. We will require additional cash resources due to changed business conditions, finalization and launch of our website, implementation of our strategy to expand our sales and marketing initiatives, increase brand and services awareness. If our own financial resources and then current cash-flows from operations are insufficient to satisfy our capital requirements, we may seek to sell additional equity or debt securities or obtain additional credit facilities. The sale of additional equity securities will result in dilution to our stockholders. The incurrence of indebtedness will result in increased debt service obligations and could require us to agree to operating and financial covenants that could restrict our operations or modify our plans to grow the business. Financing may not be available in amounts or on terms acceptable to us, if at all. Any failure by us to raise additional funds on terms favorable to us, or at all, will limit our ability to expand our business operations and could harm our overall business prospects.

Off-Balance Sheet Arrangements

We did not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.

Item 3. Quantitative and Qualitative Disclosure About Market Risk

This item is not applicable as we are currently considered a smaller reporting company.

Item 4T. Controls and Procedures
 
Evaluation of Disclosure Controls and Procedures

Our Principal Executive Officer and Chief Financial Officer evaluated the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act) as of the period covered by this Report. Based on that evaluation, it was concluded that our disclosure controls and procedures are designed to operate at a reasonable assurance level which is effective in providing reasonable assurance that information we are required to disclose in the reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our principal executive and principal financial officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

Changes in Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting that occurred during our most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Limitations on Effectiveness of Controls and Procedures

In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply its judgment in evaluating the benefits of possible controls and procedures relative to their costs.

PART II—OTHER INFORMATION

Item 1. Legal Proceedings.

We are not a party to any material legal proceedings.

Item 1A. Risk Factors

The risk factors listed in our 2011 Form 10-K on pages 6 to 12, filed with the Securities Exchange Commission on July 3, 2012, are hereby incorporated by reference.

 
15

 


Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

Common Stock Issuances

During the quarter ended June 30, 2012, there have been no issuances of common stock.

Issuer Purchases of Equity Securities

We did not repurchase any of our equity securities from the time of our inception through the period ended June 30, 2012.

Item 3. Defaults Upon Senior Securities.

None.
 
Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information.

Subsequent to period ended June 30, 2012, on August 2, 2012 the Company’s Board of Directors adopted a Code of Ethics, Insider Trading Policy and a Corporate Disclosure Policy. A copy of each policy is attached hereto.

Item 6. Exhibits.

Exhibit No.
 
Description
     
31.1
 
Certification of Principal Executive Officer & Principal Financial Officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
     
32.1
 
Certifications of Principal Executive Officer & Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
     
EX-14
 
Code of Ethics
     
EX-99.1
 
Insider Trading Policy
     
EX- 99.2
 
Corporate Disclosure Policy
     
101.INS*
 
XBRL Instance Document
     
101.SCH*
 
XBRL Taxonomy Extension Schema
     
101.CAL*
 
XBRL Taxonomy Extension Calculation Linkbase
     
101.DEF*
 
XBRL Taxonomy Extension Definition Linkbase
     
101.LAB*
 
XBRL Taxonomy Extension Label Linkbase
     
101.PRE*
 
XBRL Taxonomy Extension Presentation Linkbase
*XBRL (Extensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.

 

 
16

 


SIGNATURE
 

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
 

   
ONLINE INTERNET NETWORK, INC.
       
       
Date: August 22, 2012
 
By:
/S/ Jeanette Lucas
     
Jeanette Lucas
     
President
     
(Principal Executive Officer and duly authorized signatory)





 
 
17




XOTC:ONIN Quarterly Report 10-Q/A Filling

XOTC:ONIN Stock - Get Quarterly Report SEC Filing of XOTC:ONIN stocks, including company profile, shares outstanding, strategy, business segments, operations, officers, consolidated financial statements, financial notes and ownership information.

XOTC:ONIN Quarterly Report 10-Q/A Filing - 6/30/2012
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