Business Context and Reporting Period
This Form 10-Q covers the quarterly period ended September 30, 2009, for Title Starts Online, Inc. (Note: The input metadata referenced "Workhorse Group Inc.", but the filing text explicitly identifies the issuer as Title Starts Online, Inc., a Nevada corporation). The Company is classified as a Development Stage Company and a Shell Company. It plans to offer an online repository of title starts for abstractors. As of the reporting date, the Company had no employees and operated out of office space provided by its President at no cost.
Key Financial Metrics
| Metric | Three Months Ended Sep 30, 2009 | Nine Months Ended Sep 30, 2009 | Balance Sheet (Sep 30, 2009) |
|---|---|---|---|
| Revenues | $0 | $0 | N/A |
| Net Loss | $(8,621) | $(46,459) | N/A |
| Cash and Cash Equivalents | N/A | N/A | $8 |
| Escrow Account | N/A | N/A | $32,930 |
| Total Current Assets | N/A | N/A | $32,938 |
| Total Current Liabilities | N/A | N/A | $98,807 |
| Working Capital | N/A | N/A | $(65,869) |
| Stockholders' Deficit | N/A | N/A | $(65,869) |
| Shares Outstanding | 3,300,000 | 3,300,000 | 3,300,000 |
Material Changes vs. Prior Period
- Operating Expenses: Expenses for the three months ended September 30, 2009, increased to $8,621 from $2,789 in the same period in 2008. This increase was driven primarily by $7,880 in professional service fees, compared to $0 in the prior year quarter.
- Net Loss: The net loss for the nine months ended September 30, 2009, was $46,459, a significant increase from the $3,709 loss in the same period in 2008.
- Liquidity: Cash on hand decreased from $72 at December 31, 2008, to $8 at September 30, 2009. The escrow account balance decreased from $46,306 to $32,930.
- Liabilities: Accounts payable increased from $60,288 (Dec 31, 2008) to $93,307 (Sep 30, 2009).
Outlook, Risks, and Management Commentary
- Going Concern: The Company has negative working capital and no revenues. Management states that these conditions raise substantial doubt about the Company's ability to continue as a going concern. Continuation is dependent on raising additional capital.
- Revenue Outlook: Management believes the Company will begin receiving revenue in the first quarter of 2010. The website is operational, and the Company is actively seeking customers.
- Capital Needs: The Company has no arrangements in place for future equity financing or loans. If additional funding is required, plans include equity financing or advances from the President and CEO, Mark DeFoor.
- Risks: Risks include the inability to generate revenue, dependence on key personnel (the sole director/CEO), and general economic instability affecting the ability to raise capital.
Investor Verification Checklist
- Verify the cash balance of $8 and the ability to fund operations through Q1 2010 without immediate capital infusion.
- Confirm the status of the $32,930 escrow account and the conditions for its release.
- Assess the validity of the $93,307 accounts payable and whether these are disputed or due immediately.
- Review the related party advance of $5,500 from the CEO and any potential terms for repayment.
- Validate the claim that the website is fully operational and capable of generating revenue by Q1 2010.