ITEM 1. BUSINESS
Forward Looking Statements
This Annual Report on Form 10-K (“Annual Report”) contains forward-looking statements. These statements relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as "may," "should," "expects," "plans," "anticipates," "believes," "estimates," "predicts," "potential," or "continue" or the negative of these terms or other comparable terminology.
Forward looking statements are made based on management’s beliefs, estimates and opinions on the date the statements are made and we undertake no obligation to update forward-looking statements if these beliefs, estimates and opinions or other circumstances should change. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results.
The safe harbors of forward-looking statements provided by Section 21E of the Exchange Act are unavailable to issuers of penny stock. As we issued securities at a price below $5.00 per share, our shares are considered penny stock and such safe harbors set forth under the Private Securities Litigation Reform Act of 1995 are unavailable to us.
Our financial statements are stated in United States dollars and are prepared in accordance with United States generally accepted accounting principles.
In this annual report, unless otherwise specified, all dollar amounts are expressed in United States dollars and all references to "common stock" refer to the common shares in our capital stock.
As used in this Annual Report, the terms “we,” “us,” “Company,” “our”, “VOS” and "Vet Online Supply" mean Vet Online Supply, Inc., unless otherwise indicated.
THERE IS SUBSTANTIAL UNCERTAINTY ABOUT OUR ABILITY TO CONTINUE OUR OPERATIONS AS A GOING CONCERN.
In their audit report dated
April
14, 2017
our
auditors have expressed an opinion that substantial doubt exists as to whether we can continue as an ongoing business. Because our officers may be unwilling or unable to loan or
advance
any additional capital to us, we believe that if we do not raise additional capital, we may be required to suspend or cease the implementation of our business plan. See the Audited Financial Statements - Auditors Report". Because our auditor has issued an opinion that substantial doubt exists as to whether we can continue as a going concern, it may be more difficult to attract investors.
Corporate Information
Vet Online Supply, Inc. (“VOS” or the “Company”) was incorporated in the State of Florida on May 31, 2014. We are an emerging growth company that engages in the sale of veterinary supplies for vet clinics of all sizes. We sell our products on the eCommerce web-based platform called OsCommerce, at our website
www.vetonlinesupplies.com
.
Our website gives our customers the ability to purchase veterinary supplies at affordable prices, making an order any time of the day, any day of the week.
The Company’s fiscal year end is December 31.
Company Overview
Vet Online Supply, Inc. is an emerging growth company that engages in the online sale of veterinary supplies to vet clinics and hospitals of all sizes. In 2014, we launched a web-based eCommerce platform with our products on the url
www.vetonlinesupply.com
. The website gives our potential clients the ability to purchase quality vet supplies placing their order any time of day at their convenience. Edward Aruda, who is currently our sole officer and aa member of our board of directors, has been with our Company since May 1, 2015 and manages our day-to-day operations. On April 1, 2017 the Company appointed Matthew Scott to the board of directors and entered into a one year consulting agreement to expand our business operations.
Vet Online Supply is an American reseller of veterinary supplies. We are a reseller for the products that are also sold by the Canadian company, Concord Veterinary Supplies, with whom we have entered into a contract to act as a Reseller.
Concord acts as the fulfillment center, drop shipping all orders for all VOS’s online sales. Concord invoices VOS for the product purchased, and we bill our customer’s direct via our website, accepting prepaid for all orders via Paypal. Concord acts solely as our fulfillment center, and does not engage with our customers, answers no phone calls for sales, and engages in none of VOS’s marketing.
Although selling veterinary supplies online is not entirely new, we anticipate that this medium will continue to grow as the popularity of Internet eCommerce continues to grow. We believe that by providing high quality supplies at competitive prices and to customers online, Vet Online Supply hopes to become a go to solution for veterinary hospitals and clinics. In addition, online vs. catalogue has the benefit of, among other things, search tools and accounts that remember previous purchases, and expedited ordering.
We hope to realize our full plan of operations by raising additional capital through the sale of our securities, and other financing strategies to fully implement our marketing plan. While we have designed a full marketing strategy to gain brand awareness, with a goal of developing a large opt-in customer base we have not yet raised sufficient capital to implement this strategy.
Our Market Opportunity
We have formed our initial marketing and business model. Manufacturers’ level pet health product demand is forecast to increase 4.6 percent annually to $5.6 billion. Advances in expenditures will be encouraged by the continuing trend of humanizing companion animals and their perception as family members, as well as by growth in the overall pet population. Veterinary technology will continue to adapt diagnostic and treatment techniques from human health care, stimulating value gains for newer, more costly procedures. Source:
http://www.reportlinker.com/p0254410-summary/Pet-Health-Products-Services.html
As today's world moves toward online eCommerce solutions, we believe veterinary clinics will be hard pressed to ignore the cost and quality benefit of online ordering. We realize there is a shift required, as some clinics and hospitals have been accustomed to the catalogue/representative method, and will take time to change behavior.
Industry Overview
Having veterinary supplies available for sale online opens the door to every clinic and hospital (who has access to the Internet) to have access to tools, supplies, and instruments. Our website does not require a special account, or a qualification process. An account can be made if the user so chooses. Compared to a representative sales force that travels to vet clinics, there is a lower cost to reach an unlimited number of veterinarians across the USA and world using the Internet; travel costs of representatives are eliminated. There is no time lag between the offering of a new product, and its availability online. Email blasts allow the companies to maintain constant, inexpensive communication with their customers, and to provide specials and discounts that motivate purchasing.
Current Operations
Since inception, our operations have primarily consisted of the organization of our business and the development of our business plan. To date we have experienced limited sales from our eCommerce platform launched in fiscal 2014 as we have not yet been available to fully implement our marketing strategy to expand our sales due to lack of available funds.
Products
Vet Online Supply for Veterinarians:
Our company will offer veterinary products. We source all our supplies from Concord Veterinary Supply.
http://www.concord-surgical.com/index.php
. Concord sources quality German stainless steel surgical instruments, which include orthopedic, general surgery, ophthalmic, and cruciate repair for large and small animals. The line of veterinarian dental instruments are supplied by Medesy, an Italian company with 600 years experience in instrument manufacture. Concord also sources the products from other suppliers, including, but not limited to, Cislak, Integra-Miltex, Eli-medical, Crosstex, Barber of Sheffield, KVP (Kong Veterinary Products).
We offer on our website over 2000 items for use in veterinary clinics. We hope to provide clients with a competitive cost, quality product. Individuals, clinics and hospitals of all sizes will be able to order online 24/7, from our website, with a minimum order of $100. Our products offered on our site will enjoy the benefit of eCommerce, compared to companies providing veterinary supplies using catalogue options, thus reducing costs, as the sale of products through us will not include catalogue design fees, printing fees, or any postage costs.
It is our hope that our eCommerce website will attract new customers with the ability to go to our website and create an account at no cost and order supplies as needed any hour of the day any day of the week.
Advertising Solutions Platform
Once a business has signed up for our emails, we send them offers on our vet supplies related to their specific specialty. We update via email on any new product or supply that comes available, real time. Subscribing customers can use this information to stay updated on the industry’s newest offerings.
Marketing
During fiscal 2015 we engaged Separation Degrees – One, Inc. to assist with the construction of our eCommerce website and ongoing site marketing efforts. Separation Degrees specialize in marketing for ecommerce websites. This contract was terminated during fiscal 2016. To date we have not been able to raise sufficient funds to implement the proposed marketing strategies prepared by Separation Degrees in order to grow our eCommerce site. Recently we have retained a new firm, Warm Media operating out of Oregon, as part of our ongoing efforts to improve our online retail purchase program with resources available to us. We expect our new program to be launched on May 1, 2017. The Company will replace its existing website with a new website consisting of the same products concurrently as part of this initiative.
Growth Strategy
Initially, our target customers have been predominant vet clinics within the large cities of the United States. As we are able to implement our full marketing strategy and grow our client and end-user base, we hope to gain the attention of universities, as well as the general public in need of vet supplies at home, or at their ranch. However, until such time as we have begun substantive marketing efforts we will not be able to adequately assess what portions of our strategy for growth will be most appropriate. However, we envision our success being attributable to our ability to:
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attract new clients with our competitive costs and quality products, and by providing customers with a free, login account to manage all orders.
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sustain lower operating costs per customer compared to other vet supply companies by having all marketing and materials Internet based.
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deploy our capital more effectively by hiring a successful firm that specializes in the search engine optimization and social media marketing of eCommerce websites.
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Competition
We compete for the sales of veterinary supplies with existing websites that sell similar products. Our principal competitors include, but are not limited to: Drs. Foster and Smith which is being purchased by Petco; MWI Veterinary Supply; California Veterinary Supply; Lampert Vet Supply; Valley Vet Supply; and Miller Vet Supply, all of which offer online products. Numerous other second tier resellers are also in the marketplace.
Most, if not all, of our competitors have greater name and brand recognition and access to greater amounts of capital and established relationships with a larger base of current and potential customers. Because of their size and bargaining power, our competitors may be able to purchase supplies and products at lower prices than us in the initial stages of our development. As a result, our operations may be significantly and negatively impacted by our larger, more established competitors. In particular, once we are able to fund our full marketing program, if we are not able to generate enough revenue by attracting new and businesses and/or by enticing our customers to buy our products, we may be forced to cease operations.
Our ability to compete successfully will depend, in part, on the quality of our products, size of our database of customers, as well as our marketing efforts and our ability to anticipate and respond to various competitive factors affecting the industry. These factors include the introduction of new products and technologies, changes in consumer preferences, demographic trends, economic conditions, and pricing strategies of competitors. As a result of competition, we may be required to:
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increase overall spending to ensure we are offering the best quality products and pricing to our customers;
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continually assess and evaluate our specials and other offers to ensure that we are offering the most compelling and affordable products
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increase our advertising, promotional spending, commissions and other customer acquisition costs.
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Employees and Consultants
As of the date of this filing, the Company has no full time or part time employees other than our sole officer and director, Mr. Edward Aruda and Mr. Matthew Scott, who recently entered into a consulting agreement with the Company. We currently rely on Mr. Scott and Mr. Aruda to manage all aspects of our business. Mr. Aruda has committed to devote up to 20 hours per week to our Company. We intend to add further staff as the Company grows. Any such additions will be made at the judgment of management and to meet the Company's then current needs. In addition, we have hired a consultant to assist us with implementation of our marketing strategy, although to date we have not been successful in raising the proceeds to implement this marketing plan.
Legal Proceedings
We know of no material, existing or pending legal proceedings against our Company, nor are we involved as a plaintiff in any material proceeding or pending litigation. There are no proceedings in which our director, officer or any affiliates, or any registered or beneficial shareholder, is an adverse party or has a material interest adverse to our interest.
Recent Developments.
On March 28, 2017, the Company filed an amendment to its articles of incorporation reducing the number of authorized common shares from 8,000,000,000 to 1,000,000,000 par value $0.001, and designating 20,000 shares of its authorized preferred stock, par value $0.001 as Series B Voting Preferred Stock. The Series B Voting Preferred Stock shall have the right to vote the shares on any matter requiring shareholder approval on the basis of 4 times the votes of all the issued and outstanding shares of common stock, as well as any issued and outstanding preferred stock.
On April 1, 2017, the Company expanded its board of directors to include Matthew C. Scott, in order to assist with development of our internet marketing efforts with a goal of growing our business. Mr. Scott. has more than 15 years’ experience in business operations, financing and acquisitions, with specific experience working with companies such as Solstice Capital Group, a subsidiary of HSBC Holdings. Mathew has held executive management positions with various lending firms based in Southern California, where he was the Regional Vice President of Acquisitions for Landmark Dividend and oversaw their billboard and ground lease transactions for various large customers through mid-2016. Upon leaving Landmark, he is in an independent consultant for businesses. As a graduate of the University of Southern California where he has earned his Poly Science degree, Mathew will assist and advise Vet Online Supply in expanding revenues, and oversight for planning.
Mr. Scott was appointed to our Board of Directors on April 1, 2017. Concurrently we entered into a consulting agreement with Mr. Scott for a term of one year, where under Mr. Scott shall receive an annual fee of $100,000 payable in quarterly installments. Further effective April 1, 2017 the Company agreed to issue Mr. Scott 2,000,000 shares of restricted common stock for his services as a director. The shares upon issue will be held by the Company for a term of six months and are cancelable should Mr. Scott not serve in his capacity as director for a minimum term of six months.
On April 7, 2017, the Company issued 20,000 shares of Series B Voting Preferred Stock to Edward Aruda.
The Company has engaged Warm Media as part of a new online retail purchase program expected to be launched on May 1, 2017. The Company will replace its existing website with a new website consisting of the same products concurrently.
The Company is a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and is not required to provide the information under this item.
ITEM 1B. UNRESOLVED STAFF COMMENTS
None.
ITEM 2. PROPERTIES
Office Space and Plants
We have a virtual office located at 1041 Market Street, PMB 389, San Diego, CA, 92101 on a one year term. Mr. Edward Aruda also has a primary residence and office location in Califormia and often conducts business for VOS from this secondary location. The use of the space is offered to us free of charge by Mr. Aruda. As of the date of this filing, we have not sought to locate an independent office space to lease as we do not yet have the available resources. Additional space may be required as we expand our operations. We do not foresee any significant difficulties in obtaining any required additional space. We currently do not own any real property.
ITEM 3. LEGAL PROCEEDINGS
In the ordinary course of business, the Company may become involved in legal proceedings from time to time. The Company is not currently party to any legal proceedings, nor is it aware of any material pending legal proceedings.
ITEM 4. MINE SAFTEY DISCLOSURES
Not applicable to our operations.