Attached files
| file | filename |
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| EX-32.2 - JOEY NEW YORK, INC. | ex32_2.htm |
| EX-32.1 - JOEY NEW YORK, INC. | ex32_1.htm |
| EX-31.2 - JOEY NEW YORK, INC. | ex31_2.htm |
| EX-31.1 - JOEY NEW YORK, INC. | ex31_1.htm |
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
☒ QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended August 31, 2016
☐ TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from ____________ to ____________
Commission file number: 333-180954
Joey New York Inc.
(Exact name of small business issuer as specified in its charter)
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Nevada
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68-0682410
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(State or other jurisdiction of
incorporation or organization)
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(IRS Employer
Identification No.)
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Trump Tower I, 16001 Collins Ave. #3202,
Sunny Isles Beach, FL 33160
(Address of principal executive offices)
(305) 948-9998
(Registrants telephone number, including area code)
_____________________________________________________________
(Former name, former address and former fiscal year, if changed since last report)
Indicate by check mark whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act 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 ☐ 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 ☐ 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; as defined within Rule 12b-2 of the Exchange Act.
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☐
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Large accelerated filer
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☐
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Accelerated filer
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☐
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Non-accelerated filer
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☒
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Smaller reporting company
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Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes ☒ No
The number of shares outstanding of each of the issuer's classes of common equity as of October 23, 2016 was 27,862,019 shares of common stock.
Contents
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Part 1
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FINANCIAL INFORMATION
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Item 1
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Consolidated Financial Statements (unaudited)
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Consolidated Balance Sheets at August 31, 2016 and February 29, 2016 (unaudited)
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4
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Consolidated Statements of Operations for the three and six month periods ending August 31, 2016 and 2015 (unaudited)
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5
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Consolidated Statements of Cash Flows for the three month periods ending August 31, 2016 and 2015 (unaudited)
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6
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Notes to Consolidated Financial Statements (unaudited)
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7
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Item 2.
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Management's Discussion and Analysis of Financial Condition and Results of Operations
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13
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Item 4.
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Controls and Procedures
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14
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Part II.
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OTHER INFORMATION
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Item 1
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Legal Proceedings
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15
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Item 1A
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Risk Factors
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15
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Item 2
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Unregistered Sales of Equity Securities and Use of Proceeds
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15
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Item 3
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Defaults Upon Senior Securities
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15
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Item 4
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Mine Safety Disclosures
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15
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Item 5
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Other Information
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15
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Item 6
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Exhibits
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15
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SIGNATURES
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17
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- 2 -
PART I - FINANCIAL INFORMATION
Item 1 - Financial Statements
Joey New York, Inc.
Financial Statements
For the Three and Six Months Ended August 31, 2016
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Page
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Financial Statements (Unaudited):
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Consolidated Balance Sheets
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4 |
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Consolidated Statements of Operations
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5 |
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Consolidated Statements of Cash Flows
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6 |
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Notes to Audited Consolidated Financial Statements
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7 |
- 3 -
Joey New York, Inc.
Consolidated Balance Sheets
As of August 31, 2016 and 2015
(Unaudited)
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August 31, 2016
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February 29, 2016
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Assets
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Current assets
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||||||||
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Cash and cash equivalents
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$
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18,929
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$
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7,903
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Accounts receivable, net
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275
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132
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Inventory
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75,690
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43,326
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Total current assets
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94,894
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51,361
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Goodwill
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75,588
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-
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Property and equipment, net
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21,178
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3,457
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Total assets
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$
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191,660
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$
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54,818
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Liabilities and stockholders' deficit
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Current liabilities
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Accounts payable
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$
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321,953
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$
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156,975
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Accrued liabilities
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508,142
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424,135
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Shareholder advances – related party
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628,570
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612,737
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Notes payable – related party
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3,000,000
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3,000,000
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Total current liabilities
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4,458,665
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4,193,847
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Total liabilities
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4,458,665
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4,193,847
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Commitments and Contingencies
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Stockholder's deficit
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Preferred stock, 100,000,000 shares authorized; no shares issued or outstanding
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-
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-
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Common stock, $0.001 par value; 500,000,000 shares
authorized; 27,862,019 and 351,926 shares issued and
outstanding
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27,862
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352
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Additional paid in capital
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(2,625,711
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)
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(2,740,864
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)
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Stock subscription receivable
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(1,000
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)
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-
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Accumulated deficit
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(1,668,156
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)
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(1,398,517
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)
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Total stockholder's deficit
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(4,267,005
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)
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(4,139,029
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)
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Total liabilities and stockholder's deficit
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$
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191,660
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$
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54,818
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The accompanying notes are an integral part of these financial statements
- 4 -
Joey New York, Inc.
Consolidated Statements of Operations
For the periods ended August 31, 2016 and 2015
(Unaudited)
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Three Months Ended
August 31,
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Six Months Ended
August 31,
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2016
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2015
(Restated)
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2016
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2015
(Restated)
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Revenues
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$
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45,570
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$
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17,306
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$
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45,713
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$
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54,291
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Cost of sales
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1,931
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19,377
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1,973
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42,662
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Gross margin
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43,639
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(2,071
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)
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43,740
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11,629
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Operating expenses
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178,578
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18,165
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223,059
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86,217
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Loss from operations
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(134,938
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)
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(20,236
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)
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(179,320
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)
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(74,587
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)
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Other (expense)
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Interest expense
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(46,206
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(44,227
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(90,319
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)
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(88,841
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)
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Loss before income taxes
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(181,144
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)
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(64,463
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)
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(269,639
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)
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(163,428
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)
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Provision (benefit) for income taxes
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-
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-
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-
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-
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Net loss
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$
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(181,144
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$
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(64,463
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$
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(269,639
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$
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(163,428
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)
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Basic and diluted loss per share
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$
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(0.03
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$
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(0.18
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$
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(0.07
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$
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(0.47
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Weighted average shares outstanding
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6,997,796
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350,471
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3,678,556
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349,948
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The accompanying notes are an integral part of these financial statements
- 5 -
Joey New York, Inc.
Consolidated Statements of Cash Flows
For the six months ended August 31, 2016 and 2015
(Unaudited)
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2016
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2015
(Restated)
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Cash flows from operating activities
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Net loss
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$
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(269,639
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$
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(163,428
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)
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Adjustments to reconcile net income to net cash provided
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by operating activities:
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Depreciation and amortization
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674
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327
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Changes in operating assets and liabilities:
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Accounts receivable
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(143
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(22,276
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Inventory
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(32,364
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)
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9,856
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Accounts payable
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164,978
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92,390
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Accrued expenses
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158,007
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-
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Net cash provided by (used in) operating activities
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21,513
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(83,130
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)
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Cash flows from investing activities
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Purchases of property and equipment
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(18,395
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)
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(1,219
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)
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Net cash used in investing activities
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(18,395
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)
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(1,219
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)
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Cash flows from financing activities
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Proceeds from the sale of common stock
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-
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50,005
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Proceeds from related party advances
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7,908
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30,681
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Net cash from financing activities
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7,908
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80,686
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Net change in cash and cash equivalents
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11,026
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(3,663
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)
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Cash and cash equivalents, beginning of period
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7,903
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5,063
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Cash and cash equivalents, end of period
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$
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18,929
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$
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1,400
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Supplemental disclosure of cash flow information
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Interest paid
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$
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-
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$
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-
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Income taxes paid
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$
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-
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$
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-
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Non-cash investing activities
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Common shares issued for acquisition of subsidiary
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$
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75,588
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$
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-
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Non-cash financing activities
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Accrued expenses waived for common shares
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$
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74,000
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The accompanying notes are an integral part of these financial statements
- 6 -
Joey New York, Inc.
Notes to Consolidated Financial Statements
August 31, 2016
(Unaudited)
NOTE 1. NATURE OF BUSINESS
ORGANIZATION
Joey New York, Inc. ("the Company") was incorporated under the laws of the State of Nevada on December 22, 2011. Effective August 27, 2013, the Board of Directors approved a name change to Joey New York, Inc. On May 12, 2014, the Company merged with a Florida limited liability company, RAR Beauty, LLC, which distributes natural skin care and beauty products on the wholesale and retail levels and operates under the name of Joey New York and with Pronto Corp a registered company. The Company accounted for the acquisition as a reverse merger whereby, the operations of RAR Beauty, LLC is the continuing entity for financial reporting purposes and the former members of RAR Beauty, LLC owning approximately 75% of the Company. On May 12, 2014, RAR Beauty, LLC became a wholly owned subsidiary of the Company.
On February 26, 2016 Joey New York, Inc. ("JOEY" or the "Company") entered into an Agreement and Plan of Merger with its wholly-owned subsidiary, Joey Merger Subsidiary, Inc., a Nevada Corporation ("Merger Sub"), with Merger Sub being the surviving entity but with a name change to Joey New York, Inc.. As part of that merger, each 200 shares of our common stock were exchanged for one share in the surviving company. The officers and directors of JOEY remain the officers and directors subsequent to the merger. The reverse exchange ratio of 1 share for 200 shares became effective on August 1, 2016 on the stock market upon review by and approval by the Financial Industry Regulatory Authority ("FINRA").
The Company through its wholly owned subsidiary, RAR Beauty, LLC doing business under the name Joey New York, distributes natural skin care and beauty products on wholesale and retail levels.
The Company's headquarters is based in Sunny Isles Beach, Florida. The Company seeks to increase market share and introduce its product line through multiple channel markets. The Company faces competition from nationally recognized firms that may have greater resources of personnel, capitalization, and reputation. The Company has therefore concentrated its efforts on product quality and performance.
Joey New York product lines include skin care treatments and beauty enhancements that are health conscious, effective and affordable. In keeping with our beauty mission, we have utilized the water from tender young green coconuts, blended with Indian ginseng extract, into our new fast-acting QUICK RESULTS skincare collection.
NOTE 2. BASIS OF PRESENTATION
The accompanying financial statements have been prepared in accordance with generally accepted accounting principles of the United States of America ("GAAP") for interim financial statements pursuant to the rules and regulations of the Securities and Exchange Commission. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the three and six month period ended August 31, 2016, are not necessarily indicative of the results that may be expected for the year ending February 29, 2016. These financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the fiscal year ended February 29, 2016, as filed with the Securities and Exchange Commission ("SEC") on June 2, 2016.
- 7 -
Joey New York, Inc.
Notes to Consolidated Financial Statements
August 31, 2016
(Unaudited)
NOTE 3. SIGNIFICANT ACCOUNTING POLICIES
USE OF ESTIMATES
The preparation of financial statements in conformity with U.S. general 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 consolidated financial statements, and reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
NET INCOME (LOSS) PER COMMON SHARE
Net income (loss) per share is calculated in accordance with ASC 260, "Earnings Per Share." The weighted-average number of common shares outstanding during each period is used to compute basic earning or loss per share. Diluted earnings or loss per share is computed using the weighted average number of shares and diluted potential common shares outstanding. Dilutive potential common shares are additional common shares assumed to be exercised.
Basic net income (loss) per common share is based on the weighted average number of shares of common stock outstanding at August 31, 2016 and August 31, 2015. Due to net operating loss, there is no presentation of dilutive earnings per share, as it would be anti-dilutive. As of August 31, 2016, the Company had no dilutive potential common shares.
COMMITMENTS AND CONTINGENCIES
The Company follows ASC 450-20, "Loss Contingencies," to report accounting for contingencies. Liabilities for loss contingencies arising from claims, assessments, litigation, fines and penalties and other sources are recorded when it is probable that a liability has been incurred and the amount of the assessment can be reasonably estimated. There were no commitments or contingencies as of August 31, 2016.
RECENTLY ACCOUNTING PRONOUNCEMENTS
Recent accounting pronouncements issued by the FASB (Accounting Standards Update, including its Emerging Issues Task Force), the AICPA, and the SEC did not, or are not believed by management to, have a material impact on the Company's present or future consolidated financial statements.
- 8 -
Joey New York, Inc.
Notes to Consolidated Financial Statements
August 31, 2016
(Unaudited)
NOTE 4. GOING CONCERN
The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and the liquidation of liabilities in the normal course of business. For the six months ended August 31, 2016 the Company has incurred a loss from operations of $269,639. The Company has a history of losses resulting in an accumulated deficit of $1,668,156 as of August 31, 2016. The Company has negative working capital, in the amount of $(4,267,005), as of August 31, 2016. The Company intends to fund operations and continuing product development through debt and equity financing arrangements, which efforts may be insufficient to fund its capital expenditures, working capital and other cash requirements. The Company cannot be certain that it will be successful in its efforts to attain such capital or that the terms of capital will be at acceptable terms.
These factors, among others, raise substantial doubt about the Company's ability to continue as a going concern. The accompanying consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.
NOTE 5. PROPERTY AND EQUIPMENT
Property consists of equipment purchased for the production of revenues. As of August 31, 2016 and February 29, 2016:
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August 31, 2016
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February 29, 2016
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Property and equipment
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$
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29,250
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$
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10,459
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Less accumulated depreciation
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8,072
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7,002
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Property and equipment, net
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$
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21,178
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$
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3,457
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Depreciation for the six months ending August 31, 2016 and August 31, 2015 was $674 and $327, respectively.
NOTE 6. RELATED PARTY TRANSACTIONS
The Company's management has advanced funds and has made payments on behalf of the Company for the purpose of meeting obligations. These accumulated advances have been formalized by demand notes payable and accrue interest at 2.6%. The Company is indebted to its two majority shareholders for an aggregate amount of $628,570 and $612,738, as of August 31, 2016 and February 29, 2016, respectively.
Amounts advanced during the six month periods ended August 31, 2016 and 2015 amounted to $18,633 and $30,681, respectively.
Effective August 11, 2016 Joey New York, Inc. acquired Reflex Productions, Inc. from principals of the Joey New York in consideration for the issuance of 25,000,000 shares of common stock. See Note 9 for more details.
- 9 -
Joey New York, Inc.
Notes to Consolidated Financial Statements
August 31, 2016
(Unaudited)
NOTE 7. LONG-TERM DEBT
On May 12, 2014, in accordance with the acquisition agreement, the Company issued promissory notes payable, amounting $3,000,000 to its two majority shareholders. The terms of the notes (2, each at $1,500,000) are at a stated interest rate of 5% and mature on May 12, 2016.
On May 12, 2016, the promissory notes were renewed and are at a stated interest rate of 5% and mature on May 12, 2017.
NOTE 8. EQUITY
The Company is authorized to issue 500,000,000 shares of $0.001 par value common stock and 100,000,000 shares of preferred stock.
On February 26, 2016 the Company entered into an Agreement and Plan of Merger with its wholly-owned subsidiary, Joey Merger Subsidiary, Inc., a Nevada Corporation ("Merger Sub"), with Merger Sub being the surviving entity but with a name change to Joey New York, Inc.. As part of that merger, each 200 shares of our common stock were exchanged for one share in the surviving company. The officers and directors of JOEY remain the officers and directors subsequent to the merger. The reverse exchange ratio of 1 share for 200 shares will became effective on August 1, 2016 on the stock market upon review by and approval by the Financial Industry Regulatory Authority ("FINRA"). All share information in this report is presented on a post-exchange basis.
During the three months ended August 31, 2016, the Company issued 27,500,093 shares of common stock, 25,000,000 of which were issued in order to acquire a 100% interest in Reflex Productions, Inc. 2,500,000 shares were issued upon conversion of debt to an accredited investor.
In connection with the acquisition mentioned above, the Company also issued 42,000,000 warrants. Both the warrants and the 25,000,000 shares issued to the investor were discounted by 100% of the standard valuation methodology as the Company recently experienced a 100 to 1 stock split and the market had not had sufficient time to adjust to the post-split value of the additional shares issued. See Note 9 below. See See Note as the Company recently experienced a 100 to 1 stock split and the market had not had sufficient time to adjust to the post-split value of the additional shares issued.
- 10 -
Joey New York, Inc.
Notes to Consolidated Financial Statements
August 31, 2016
(Unaudited)
NOTE 9: ACQUISITION OF THE REFLEX PRODUCTIONS, INC.
On August 11, 2016, the Company entered into a purchase agreement for the acquisition of 100% of the common stock of Reflex Productions, Inc. (Reflex) Reflex provides clinical cosmetic procedures including Botox injections and other cosmetic procedures.
In exchange for the common stock of Reflex the Company issued 25,000,000 restricted shares of its common stock and 42,000,000 warrants to the owners of Reflex. The entirety of the value of the equity instruments issued was recorded as goodwill. Net assets acquired in the acquisition consisted of the following:
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Description
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Amount
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|||
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Cash
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$
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8,995
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||
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Other current assets
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4,460
|
|||
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Property and equipment, net
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15,893
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|||
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Accounts payable and accrued expenses
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(104,936
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)
|
||
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Net assets acquired (liabilities assumed)
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(75,588
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)
|
||
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Value of shares issued
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-
|
|||
|
Goodwill recorded on acquisition
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$
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(75,588
|
)
|
|
The Company has used an estimate of the shares and warrants issued for the ownership interest in Reflex as consideration for the acquisition. We do not feel as though there are significant enough operations to determine a fair value of the entity and management's assumptions as to projected revenue and costs have not been born out in initial operations.
Additionally, the shares and warrants issued have been discounted by approximately 100% of the standard valuation methodology as the Company recently experienced a 100 to 1 stock split and the market had not had sufficient time to adjust to the post-split value of the additional shares issued.
Reflex accounts are consolidated in these financial statements, in accordance with generally accepted accounting principles. Operations of Reflex have been consolidated from the date of acquisition or August 11, 2016.
- 11 -
Joey New York, Inc.
Notes to Consolidated Financial Statements
August 31, 2016
(Unaudited)
NOTE 10. COMMITMENTS AND CONTINGENCIES
Risks and Uncertainties
The Company's operations are subject to significant risks and uncertainties including financial, operational and regulatory risks, including the potential risk of business failure.
Related Party
The controlling members have pledged support to fund continuing operations; however there is no written commitment to this effect. The Company is dependent upon the continued support of these parties in the immediate future, in order to meet its current obligations, until such time that revenues are generated to meet all current obligations or until such time that adequate capital is raised for its growth plans.
The Company has limited needs for office administration and does not own or lease property or lease office space. The office space used by the Company was arranged by the officers and directors of the Company to use at no charge.
The Company does not have employment contracts with its key employees, including the controlling shareholders who are officers of the Company.
The amounts and terms of the above transactions may not necessarily be indicative of the amounts and terms that would have been incurred had comparable transactions been entered into with independent third parties.
Legal and other matters
In the normal course of business, the Company may become a party to litigation matters involving claims against the Company. The Company's management is unaware of any pending or threatened assertions and there are no current matters that would have a material effect on the Company's financial position or results of operations.
NOTE 11. SUBSEQUENT EVENTS
Effective October 11, 2016 the Company through its wholly-owned subsidiary Reflex Productions, Inc. entered into a Limited Liability Company Agreement with Smith & Popov, LLC for the formation of 4BG Beauty LLC. Reflex has a 51% interest in this joint venture limited liability company. The intention of this venture is to operate the Company's LABB operations.
Management has evaluated subsequent events through the date of filing the consolidated financial statements with the Securities and Exchange Commission, the date the consolidated financial statements were available to be issued. Management is not aware of any significant events that occurred subsequent to the balance sheet date that would have a material effect on the consolidated financial statements thereby requiring adjustment or disclosure, other than as disclosed above.
On August 11, 2016, the Company entered into a purchase agreement for the acquisition of 100% of the common stock of Reflex Productions, Inc. (Reflex) Reflex provides clinical cosmetic procedures including Botox injections and other cosmetic procedures.
In exchange for the common stock of Reflex the Company issued 25,000,000 restricted shares of its common stock and 42,000,000 warrants to the owners of Reflex.
- 12 -
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION
GENERAL
Joey New York, Inc. was incorporated under the laws of the State of Nevada on December 22, 2011. Our registration statement has been filed with the Securities and Exchange Commission on April 26, 2012 and was declared effective on August 27, 2012. The Company completed the acquisition of an entity, RAR Beauty, LLC on May 12, 2014 and currently operates as a distributor of natural skin care and beauty products on the wholesale and retail levels.
Forward-Looking Statements
The following discussion should be read in conjunction with our consolidated financial statements, which are included elsewhere in this Form 10-Q (the "Report"). This Report contains forward-looking statements which 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. These statements are only predictions and involve known and unknown risks, uncertainties, and other factors that may cause our or our industry's actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements.
For a description of such risks and uncertainties refer to our Registration Statement on Form S-1, on our Annual Report on Form 10-K and on our filings of Form 8-K with the Securities and Exchange Commission. While these forward-looking statements, and any assumptions upon which they are based, are made in good faith and reflect our current judgment regarding the direction of our business, actual results will almost always vary, sometimes materially, from any estimates, predictions, projections, assumptions or other future performance suggested herein. 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.
RESULTS OF OPERATION
Six months ending August 31, 2016 and August 31, 2015:
Revenues were $45,713 and $54,291 for the six months ending August 31, 2016 and August 31, 2015, respectively. Our gross profit was 43,740 and $11,629 for the six months ending August 31, 2016 and 2015, respectively. Fluctuations in our profit margins will be due to product mix and minor increases in our product costs. The cost of goods sold for this period only include the results for Reflect Productions, Inc. form the date of acquisition (August 11, 2016) to August 31, 2016. Vendor rebates totaling $18,900 were received during this period resulting in a very low cost of goods sold.
During the six months ended August 31, 2016, we incurred $223,059 in operating expenses compared to $86,217 for the six months ended August 31, 2015. The increase primarily results from increased marketing expenses related to the opening of our new clinic.
Three months ending August 31, 2016 and August 31, 2015:
Revenues were $45,570 and $17,306 for the three months ending August 31, 2016 and 2015, respectively. The increase in sales was primarily due to clinic operations as a result of the acquisition of August 11, 2016. Our gross profit was $43,639 and $(2,071) for the three months ending August 31, 2016 and 2015, respectively. The increase resulted from clinic operations from August 11, 2016 as noted earlier.
During the three months ended August 31, 2016, we incurred $178,578 in operating expenses compared to $18,165 for the three months ended August 31, 2015. The increase was primarily due to increased marketing expense related to the clinic operations and professional fees.
LIQUIDITY AND CAPITAL RESOURCES
As of August 31, 2016, our current assets were $94,894, of which $18,929 was in cash. We do not believe that we have sufficient cash to meet our current obligations for the near term and will require additional advances from our majority shareholders or through traditional financial institutions or capital through the sale of our common stock. As of August 31, 2016, our working capital deficit was $4,267,005.
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Cash Flows
We have not generally generated positive cash flows from operating activities. For the six months ended August 31, 2016, net cash flows provided by operating activities was $21,513, as compared with net cash flows used in operating activities of ($83,130) in the six months ended August 31, 2015. The increase in 2016 was attributable largely to noncash settlement of accrued expenses.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Not applicable.
ITEM 4. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
The Company's Principal Executive Officer and Principal Financial Officer have evaluated the effectiveness of our disclosure controls and procedures as of the end of the period covered by this report pursuant to Rule 13a-15(b) under the Securities Exchange Act of 1934 (the "Exchange Act"). Based on that evaluation, the Company's Chief Executive Officer and Principal Financial Officer have concluded that, as of the end of the period covered by this report, our disclosure controls and procedures are effective in ensuring that information required to be disclosed in the reports that we file or submit under the Exchange Act reports is (1) recorded, processed, summarized and reported within the periods specified in the Commission's rules and forms, and (2) accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.
The ineffective control over financial reporting resulted from a general lack of resources directed to our accounting and financial reporting functions and a lack of internal proficiency on matters of financial reporting. We are addressing this issue by entering into a contract with a competent outside contractor to outsource all of these functions and dedicating a significant amount of resources to enter into that agreement.
Changes in Internal Control over Financial Reporting
We have not made a change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the fiscal quarter ended August 31, 2016 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
Internal control systems, no matter how well designed and operated, have inherent limitations. Therefore, even a system which is determined to be effective cannot provide absolute assurance that all control issues have been detected or prevented. Our systems of internal controls are designed to provide reasonable assurance with respect to financial statement preparation and presentation.
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PART II - OTHER INFORMATION
Item 1 - Legal Proceedings
We are not aware of any legal proceedings contemplated by any governmental authority or any other party involving us or our properties. As of the date of this report, no director, officer or affiliate is (i) a party adverse to us in any legal proceeding, or (ii) has an adverse interest to us in any legal proceedings. We are not aware of any other legal proceedings pending or that have been threatened against us or our properties.
From time to time the Company may be named in claims arising in the ordinary course of business. Currently, no legal proceedings or claims, other than those disclosed above, are pending against or involve the Company that, in the opinion of management, could reasonably be expected to have a material adverse effect on its business and financial condition.
Item 1A – Risk Factors
Not required for Smaller Reporting Companies.
Item 2 - Unregistered Sales of Equity Securities and Use of Proceeds
Effective August 1, 2016 the Company issued 25,000,000 shares of its common stock in consideration for the acquisition of Reflex Productions, Inc.
On August 12, 2016 the Company issued 2,500,000 shares of its common stock upon conversion of the Company's note dated May 12, 2014.
Item 3 - Defaults Upon Senior Securities
No disclosure required.
Item 4 – Mine Safety Disclosures
No disclosure required.
Item 5 - Other Information
No disclosure required.
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Item 6. EXHIBITS
Exhibits:
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Number
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Description
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31.1
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Certification of Principal Executive Officer, pursuant to SEC Rules 13a-14(a) and 15d-14(a), adopted pursuant Section 302 of the Sarbanes Oxley Act of 2002
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31.2
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Certification of Principal Financial Officer, pursuant to SEC Rules 13a-14(a) and 15d-14(a), adopted pursuant Section 302 of the Sarbanes Oxley Act of 2002
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32.1
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Certification of Chief Executive Officer and Principal Financial Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
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32.2
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Certification of Chief Executive Officer and Principal Financial Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
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101.INS
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XBRL Instance Document
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101.SCH
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XBRL Taxonomy Extension Schema Document
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101.CAL
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XBRL Taxonomy Extension Calculation Linkbase Document
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101. DEF
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XBRL Taxonomy Extension Definition Linkbase Document
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101.LAB
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XBRL Taxonomy Extension Label Linkbase Document
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101.PRE
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XBRL Taxonomy Extension Presentation Linkbase Document
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SIGNATURES
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.
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Joey New York, Inc.
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Date: October 24, 2016
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By:
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/s/ Joey Chancis
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Joey Chancis, CEO
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Principal Executive Officer
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Date: October 24, 2016
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By:
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/s/ Richard Roer
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Richard Roer, President
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Principal Financial Officer
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