Joey New York, Inc.
Financial Statements
For the Three Months Ended May 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 Unaudited Consolidated Financial Statements
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7
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Joey New York, Inc.
Consolidated Balance Sheets
May 31, 2016 and February 28, 2016
(Unaudited)
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May 31, 2016
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February 29, 2016
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Assets
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Current assets
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Cash and cash equivalents
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$
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2,382
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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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Due from common shareholder entity- related party
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42,613
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-
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Inventory
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432,83
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43,326
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Total current assets
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88,553
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51,361
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Property and equipment, net of $7,464 and $7,002 of depreciation, respectively
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5,470
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3,457
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Total assets
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$
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94,023
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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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156,975
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$
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156,975
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Accrued liabilities
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501,586
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424,135
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Shareholder advances – related party
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623,987
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612,737
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Current portion of long-term debt
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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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4,282,547
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4,193,847
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Total liabilities
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4,282,547
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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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Common stock $0.001 par value; 1,500,000,000 shares
authorized; ,72,385,134 and 70,385,134 shares issued and
outstanding
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72,385
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70,385
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Additional paid in capital
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(2,772,897
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)
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(2,810,897
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)
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Stock subscription receivable
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(1,000
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)
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-
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Accumulated deficit
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(1,487,012
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)
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(1,398,517
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)
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Total stockholder's deficit
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(4,188,524
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)
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(4,139,029
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)
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Total liabilities and stockholder's equity
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$
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94,023
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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
Joey New York, Inc.
Consolidated Statements of Operations
For the three months ended May 31, 2016 and 2015
(Unaudited)
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2016
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2015
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Revenues
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$
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143
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$
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36,804
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Cost of sales
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43
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23,104
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Gross margin
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100
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13,700
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Operating expenses
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Selling and marketing
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3,043
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590
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Professional fees
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21,242
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18,793
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General and administrative
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19,735
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48,505
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Depreciation and amortization
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462
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164
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Total operating expenses
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44,382
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68,052
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Loss from operations
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(44,382
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)
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(54,352
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)
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Interest expense
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(44,114
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)
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(44,614
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)
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Loss before income taxes
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(88,495
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)
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(98,966
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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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Net loss
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$
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(88,495
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)
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$
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(989,66
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Basic and diluted loss per share
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$
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(0.00
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)
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$
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(0.00
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)
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Weighted average shares outstanding
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71,863,395
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69,885,134
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The accompanying notes are an integral part of these financial statements
Joey New York, Inc.
Consolidated Statements of Cash Flows
For the three months ended May 31, 2016 and 2015
(Unaudited)
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2016
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2015
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Cash flows from operating activities:
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Net loss
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$
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(88,495
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)
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$
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(98,966
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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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462
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164
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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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)
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(20,733
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)
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Inventory
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43
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23,104
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Due from related party
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(42,613
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)
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-
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Accounts payable
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-
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59,891
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Accrued liabilities
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77,451
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-
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Net cash used in operating activities
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(53,296
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)
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(36,539
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Cash flows from investing activities:
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Purchases of property and equipment
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(2,475
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)
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(1,219
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Net cash used in investing activities
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(2,475
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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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39,000
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-
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Proceeds from related party advances
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11,250
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33,685
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Net cash from financing activities
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50,250
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33,685
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Net change in cash and cash equivalents
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(5,521
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)
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(4,073
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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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2,382
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$
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990
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Supplemental disclosure of cash flow information
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2,631
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-
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Interest paid
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$
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$
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-
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Income taxed paid
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$
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-
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$
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-
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Supplemental disclosures of non-cash transactions:
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Stock subscription receivable
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$
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1,000
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$
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-
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The accompanying notes are an integral part of these financial statements
Joey New York, Inc.
Notes to Consolidated Financial Statements May 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.
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 month period ended May 31, 2016, are not necessarily indicative of the results that may be expected for the year ending February 28, 2017. 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.
The preparation of financial statements in conformity with GAAP 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 as well as the reported amount of revenues and expenses during the reporting period. Actual results may differ from these estimates.
Joey New York, Inc.
Notes to Consolidated Financial Statements May 31, 2016
(Unaudited)
NOTE 3. SIGNIFICANT ACCOUNTING POLICIES
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 three months ended May 31, 2016 the Company has incurred a loss from operations of $88,495. The Company has a history of losses resulting in an accumulated deficit of $1,487,012. The Company has negative working capital, in the amount of $4,192,994, as of May 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.
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 May 31, 2016 and May 31, 2015. Due to net operating loss, there is no presentation of dilutive earnings per share, as it would be anti-dilutive. As of May 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 May 31, 2016.
Joey New York, Inc.
Notes to Consolidated Financial Statements May 31, 2016
(Unaudited)
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.
NOTE 4. 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 $623,987 and $612,738 as of May 31, 2016 and February 29, 2016, respectively.
From April 2016, the company has occasionally paid portion of operation fund behalf its common shareholder related party entity. The aggregate amount of due from the related party is $42,613 and $0 as of May 31, 2016 and February 29, 2016, respectively.
NOTE 5. 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 two notes (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 6. EQUITY
The Company is authorized to issue 1,500,000,000 shares of $0.001 par value common stock.
During the three months ended May 31, 2016, the company issued 2,000,000 shares of common stock at $0.02 per share to one investor. The sold stock price is based on fair market value.
There are no warrants or options outstanding.