Toga Ltd - Quarter Report: 2010 October (Form 10-Q)
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
DC 20549
FORM
10-Q
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x
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QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
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For
the quarterly period ended October 31, 2010
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o
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TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF
1934
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Commission
File Number: 333-138951
BLINK COUTURE,
INC.
(Exact
name of registrant as specified in its charter)
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Delaware
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98-0568153
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(State
of organization)
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(I.R.S.
Employer Identification No.)
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c/o Regent Private Capital,
LLC
152
West 57th Street,
9th
Floor
New
York, New York 10019
(Address
of principal executive offices)
(212)
792-5300
(Registrant’s
telephone number, including area code)
Not
Applicable
(Former
address if changed since last report)
Indicate
by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of
the Securities Exchange Act of
1934 during the preceding 12 months (or for such
shorter period that the registrant was required to file such reports), and
(2) has been subject to such filing requirements for the past 90
days. Yes x No o
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 o No o
Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer or a smaller reporting
company. See the definitions of “large accelerated filer,”
“accelerated filer” and “smaller reporting company” in Rule 12b-2 of the
Exchange Act.
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Large
Accelerated
Filer o
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Accelerated
Filer
o
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Non-Accelerated
Filer o
(Do not check if a smaller reporting company) |
Smaller
Reporting Company
x |
Indicate
by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act). Yes x No o
Indicate
the number of shares outstanding of each of the issuer’s classes of common
stock, as of the latest practicable date.
The
registrant had 393,169 shares of common stock, par value $0.0001 per share,
outstanding at December 13, 2010.
TABLE
OF CONTENTS
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PART
I - FINANCIAL INFORMATION
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ITEM
1.
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FINANCIAL
STATEMENTS
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3
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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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10
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ITEM
3.
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QUANTITATIVE
AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
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13
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ITEM
4.
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CONTROLS
AND PROCEDURES
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13
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PART
II - OTHER INFORMATION
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ITEM
1.
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LEGAL
PROCEEDINGS
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14
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ITEM
1A.
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RISK
FACTORS
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14
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ITEM
2.
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UNREGISTERED
SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
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14
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ITEM
3.
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DEFAULTS
UPON SENIOR SECURITIES
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14
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ITEM
4.
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REMOVED
AND RESERVED
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14
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ITEM
5.
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OTHER
INFORMATION
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14
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ITEM
6.
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EXHIBITS
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14
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SIGNATURES
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15 | |
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EXHIBIT
10.13
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EXHIBIT
31.1
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EXHIBIT
32.1
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2
PART
I – FINANCIAL INFORMATION
ITEM
1. FINANCIAL STATEMENTS
BLINK
COUTURE, INC.
BALANCE
SHEETS
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October
31,
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July
31,
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|||||||
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(in
US$)
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2010
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2010
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||||||
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(Unaudited)
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(Audited)
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|||||||
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Current
Assets
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||||||||
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Cash
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$ | - | $ | - | ||||
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Prepaid
Expense
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– | – | ||||||
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Inventory
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– | – | ||||||
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Total
Current Assets
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– | – | ||||||
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Property
and Equipment (net)
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– | – | ||||||
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TOTAL
ASSETS
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$ | - | $ | - | ||||
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Current
Liabilities
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||||||||
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Accounts
Payable
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$ | 5,000 | $ | 4,650 | ||||
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Accrued
Interest
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11,652 | 9,300 | ||||||
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Notes
Due to Related Parties
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173,301 | 156,502 | ||||||
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Total
Current Liabilities
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189,953 | 170,452 | ||||||
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Total
Liabilities
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189,953 | 170,452 | ||||||
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Stockholders
Deficiency
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||||||||
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Preferred
stock, ($.0001 par value, 20,000,000 shares authorized; none
issued and outstanding)
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– | – | ||||||
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Common
stock, ($.0001 par value, 100,000,000 shares authorized; 393,169 shares
outstanding as of October 31, 2010 and July 31, 2010)
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2,064 | 2,064 | ||||||
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Additional
Paid-in Capital
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71,662 | 71,662 | ||||||
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Retained
Deficit
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(263,679 | ) | (244,178 | ) | ||||
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Total
Stockholders Deficiency
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(189,953 | ) | (170,452 | ) | ||||
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Total
Liabilities & Stockholders Deficiency
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$ | - | $ | - | ||||
See
accompanying notes to financial statements
3
BLINK
COUTURE, INC.
STATEMENTS
OF OPERATIONS
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Three Months Ended
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October 23, 2003 thru
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|||||||||||
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October 31,
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October 31,
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October 31, 2010
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||||||||||
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(in US$)
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2010
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2009
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Since Inception
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(Unaudited)
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(Unaudited)
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(Unaudited)
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||||||||||
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Revenues
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$ | - | $ | - | $ | - | ||||||
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Operating
Expenses
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||||||||||||
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Amortization
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– | – | 741 | |||||||||
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General
and Administrative
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1,149 | 1,098 | 31,466 | |||||||||
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Management
Fees
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10,000 | 10,000 | 117,500 | |||||||||
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Marketing
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– | – | 11,192 | |||||||||
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Professional
Fees
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6,000 | 4,900 | 90,361 | |||||||||
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Rent
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– | – | 767 | |||||||||
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Total
Operating Expenses
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17,149 | 15,998 | 252,027 | |||||||||
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Other
Expenses
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||||||||||||
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Interest
Expense
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2,352 | 1,174 | 11,652 | |||||||||
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Total
Expenses
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19,501 | 17,172 | 263,679 | |||||||||
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Net
Loss
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$ | (19,501 | ) | $ | (17,172 | ) | $ | (263,679 | ) | |||
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Basic
Loss per share
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$ | (0.05 | ) | $ | (0.04 | ) | ||||||
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Weighted
Average Shares
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393,169 | 393,169 | ||||||||||
See
accompanying notes to financial statements
4
BLINK
COUTURE, INC.
STATEMENTS
OF CASH FLOWS
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Three Months Ended
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October 23, 2003 thru
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|||||||||||
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October 31,
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October 31,
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October 31, 2010
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||||||||||
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(in US$)
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2010
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2009
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Since Inception
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|||||||||
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(Unaudited)
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(Unaudited)
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(Unaudited)
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||||||||||
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Operating
Activities
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||||||||||||
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Net
Loss
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(19,501 | ) | (17,172 | ) | (263,679 | ) | ||||||
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Amortization
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– | – | 741 | |||||||||
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Change in Operating Assets and
Liabilities:
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||||||||||||
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Change
in Prepaid expense
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– | – | – | |||||||||
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Change
in Inventory
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– | – | – | |||||||||
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Change
in Accounts Payable
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350 | 3,198 | 5,000 | |||||||||
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Change
in Accrued Liabilities
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– | – | – | |||||||||
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Change in Accrued Interest
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2,352 | 1,174 | 11,652 | |||||||||
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Net
Cash from Operating Activities
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(16,799 | ) | (12,800 | ) | (246,286 | ) | ||||||
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Investing
Activities
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||||||||||||
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Purchase of Property &
Equipment
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– | – | (741 | ) | ||||||||
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Net
Cash from Investing Activities
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– | – | (741 | ) | ||||||||
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Financing
Activities
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||||||||||||
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Changes
in Notes Due to Related Parties
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16,799 | 12,800 | 173,301 | |||||||||
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Common
Stock Issued for Services
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– | – | 300 | |||||||||
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Donated
Capital
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– | – | 23,636 | |||||||||
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Proceeds from Common Stock
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– | – | 49,790 | |||||||||
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Net
Cash from Financing Activities
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16,799 | 12,800 | 247,027 | |||||||||
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Net
(decrease) increase in Cash
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– | – | – | |||||||||
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Cash Beginning of Period
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– | – | – | |||||||||
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Cash
End of Period
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$ | - | $ | - | $ | - | ||||||
See
accompanying notes to financial statements
5
BLINK
COUTURE, INC.
(A
Development Stage Company)
NOTES
TO THE FINANCIAL STATEMENTS
October
31, 2010
NOTE
1. ORGANIZATION AND DESCRIPTION OF BUSINESS
Business
description
Blink
Couture, Inc. (the “Company”) was originally incorporated as Fashionfreakz
International Inc. on October 23, 2003 under the laws of the State of Delaware.
On December 2, 2005, Fashionfreakz International Inc. changed its name to Blink
Couture Inc. Until March 4, 2008, the Company’s principal business was the
online retail marketing of trendy clothing and accessories produced by
independent designers. On March 4, 2008, the Company discontinued its prior
business and changed its business plan. The Company’s business plan now consists
of exploring potential targets for a business combination through the purchase
of assets, share purchase or exchange, merger or similar type of transaction.
The Company has limited operations and in accordance with SFAS # 7, the Company
is considered a development stage company.
NOTE
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A.
BASIS OF ACCOUNTING
The
financial statements have been prepared using the accrual basis of accounting.
Under the accrual basis of accounting, revenues are recorded as earned and
expenses are recorded at the time liabilities are incurred. The Company has
adopted a July 31 year-end.
B.
CASH EQUIVALENTS
The
Company considers all highly liquid investments with a maturity of three months
or less when purchased to be cash equivalents.
C.
USE OF ESTIMATES
The
preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
D.
DEVELOPMENT STAGE
The
Company continues to devote substantially all of its efforts to exploring
potential targets for a business combination through the purchase of assets,
share purchase or exchange, merger or similar type of transaction.
E.
BASIC EARNINGS PER SHARE
In
February, 1997, the FASB issued SFAS No. 128, “Earnings Per Share”, which
specifies the computation, presentation and disclosure requirements for earnings
(loss) per share for entities with publicly held common stock. SFAS No. 128
supersedes the provisions of APB No. 15, and requires the presentation of basic
earnings (loss) per share and diluted earnings (loss) per share.
Basic net
loss per share amounts is computed by dividing the net income by the weighted
average number of common shares outstanding. Diluted earnings per share are the
same as basic earnings per share due to the lack of dilutive items in the
Company.
6
BLINK
COUTURE, INC.
(A
Development Stage Company)
NOTES
TO THE FINANCIAL STATEMENTS
October
31, 2010
F.
INCOME TAXES
Income
taxes are provided in accordance with Statement of Financial Accounting
Standards No. 109 (SFAS 109), Accounting for Income Taxes. A deferred tax asset
or liability is recorded for all temporary differences between financial and tax
reporting and net operating loss carryforwards. Deferred tax expense (benefit)
results from the net change during the year of deferred tax assets and
liabilities.
Deferred
tax assets are reduced by a valuation allowance when, in the opinion of
management, it is more likely than not that some portion or all of the deferred
tax assets will not be realized. Deferred tax assets and liabilities are
adjusted for the effects of changes in tax laws and rates on the date of
enactment.
G.
REVENUE RECOGNITION
The
Company has not recognized any revenues from its operations.
H.
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
Subsequent
Events
(Included
in ASC 855 “Subsequent Events”, previously SFAS No. 165 “Subsequent
Events”)
ASC 855
established general standards of accounting for and disclosure of events that
occur after the balance sheet date, but before the financial statements are
issued or available to be issued (“subsequent events”). An entity is required to
disclose the date through which subsequent events have been evaluated and the
basis for that date. For public entities, this is the date the financial
statements are issued. ASC 855 does not apply to subsequent events or
transactions that are within the scope of other GAAP and did not result in
significant changes in the subsequent events reported by the Company. ASC 855
became effective for interim or annual periods ending after June 15, 2009
and did not impact the Company’s consolidated financial statements. The Company
evaluated for subsequent events through December 13, 2010, the issuance date of
the Company’s financial statements.
NOTE
3. WARRANTS AND OPTIONS
There are
no warrants or options outstanding to acquire any additional shares of common or
preferred stock.
NOTE
4. GOING CONCERN
The
accompanying financial statements have been prepared assuming that the Company
will continue as a going concern. The Company generated net losses of $263,679
during the period of October 23, 2003 (inception) to October 31, 2010. This
condition raises substantial doubt about the Company’s ability to continue as a
going concern. The Company’s continuation as a going concern is dependent on its
ability to meet its obligations, to obtain additional financing as may be
required and ultimately to attain profitability. The financial statements do not
include any adjustments that might result from the outcome of this
uncertainty.
The
Company is dependent on advances from its principal shareholders for continued
funding. There are no commitments or guarantees from any third party to provide
such funding nor is there any guarantee that the Company will be able to access
the funding it requires to continue its operations.
7
BLINK
COUTURE, INC.
(A
Development Stage Company)
NOTES
TO THE FINANCIAL STATEMENTS
October
31, 2010
NOTE
5. RELATED PARTY TRANSACTIONS
On
December 29, 2009, pursuant to that certain Stock Purchase Agreement (the
“Purchase Agreement”) between Fountainhead Capital Management Limited
(“Fountainhead”) and Regent Private Capital, LLC (“Regent”), Fountainhead sold
an aggregate of 312,383 shares (the “Fountainhead Shares”) of common stock, par
value $0.0001 of the Registrant (the “Common Stock”) to Regent in consideration
for (i) Regent’s payment of $200,000 and (ii) Regent’s assignment to
Fountainhead of all of Regent’s right, title and interest in a certain third
party promissory note in the principal amount of $150,000. The
Fountainhead Shares represent approximately 79.45% of the issued and outstanding
shares of Common Stock of the Registrant. Additionally, and also included in the
consideration paid by Regent, Fountainhead assigned to Regent all of
Fountainhead’s right, title and interest in a certain promissory note of the
Registrant having an outstanding principal balance of $90,453, along with
accrued interest in the amount of $3,937.
On
January 1, 2010, Regent amended and extended the promissory note in the amount
of $90,453 bearing simple interest at 6% per annum to be due and payable on
January 30, 2011 (the “Note”). On January 31, 2010, the parties further amended
the Note increasing the principal balance to $123,946 representing amounts
advanced to the Company by the payee during the period November 1, 2009 through
January 31, 2010. At January 31, 2010, the Company had loans and notes
outstanding from a shareholder in the aggregate amount of $123,946, which
represents amounts loaned to the Company to pay the Company’s expenses of
operation.
Effective
as of January 1, 2010, the Company entered into a Services Agreement
with Regent Private Capital, LLC (“Regent”). The term of the Services
Agreement is one year and the Company is obligated to pay Regent a quarterly fee
in the amount of $10,000, in cash or in kind, on the first day of each calendar
quarter commencing November 1, 2009. During the fiscal quarter ended October 31,
2010, the Company paid a total of $10,000 in fees to Regent.
On April
30, 2010, the parties further amended the Note increasing the principal balance
to $141,125 representing amounts advanced to the Company by the payee during the
period February 1, 2010 through April 30, 2010. At April 30, 2010, the Company
had loans and notes outstanding from a shareholder in the aggregate amount of
$141,125, which represents amounts loaned to the Company to pay the Company’s
expenses of operation.
On July
31, 2010, the parties further amended the Note increasing the principal balance
to $156,502 representing amounts advanced to the Company by the payee during the
period May 1, 2010 through July 31, 2010. At July 31, 2010, the Company had
loans and notes outstanding from a shareholder in the aggregate amount of
$156,502, which represents amounts loaned to the Company to pay the Company’s
expenses of operation.
On
October 31, 2010, the parties further amended the Note increasing the principal
balance to $173,301 representing amounts advanced to the Company by the payee
during the period August 1, 2010 through October 31, 2010. At October 31, 2010,
the Company had loans and notes outstanding from a shareholder in the aggregate
amount of $173,301, which represents amounts loaned to the Company to pay the
Company’s expenses of operation.
8
BLINK
COUTURE, INC.
(A
Development Stage Company)
NOTES
TO THE FINANCIAL STATEMENTS
October
31, 2010
NOTE
6. INCOME TAXES
The
Company recognizes deferred income tax liabilities and assets for the expected
future tax consequences of events that have been recognized in the financial
statements or tax returns. Under this method, deferred tax liabilities and
assets are determined based on the differences between the financial statement
carrying amounts and the tax basis of assets and liabilities using enacted tax
rates in effect in the years in which the differences are expected to reverse.
The Company has not incurred any income tax liabilities since its inception due
to operating losses of approximately $264,000. The expected income tax benefit
for the net operating loss carryforwards is approximately $73,000. The
difference between the expected income tax benefit and non-recognition of an
income tax benefit in each period is the result of a valuation allowance applied
to deferred tax assets.
This
results in a net deferred tax asset, assuming an effective tax rate of 28% or
approximately $73,000 at October 31, 2010. A valuation allowance in the same
amount has been provided to reduce the deferred tax asset, as realization of the
asset is not assured.
NOTE
7. STOCKHOLDERS’ EQUITY
The
stockholders’ equity section of the Company contains the following classes of
capital stock as of October 31, 2010:
|
|
*
|
Preferred stock, $0.0001 par
value: 20,000,000 shares authorized; -0- shares issued and
outstanding.
|
|
|
*
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Common stock, $0.0001 par value:
100,000,000 shares authorized; 393,169 shares issued and
outstanding.
|
NOTE
8. REVERSE SPLIT
On
November 23, 2009, the Company completed a one for fifty-two and one-half shares
reverse split. All per share data in this report reflect the impact of this
reverse split.
9
|
MANAGEMENT’S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
|
The
following discussion should be read in conjunction with our unaudited financial
statements and the notes thereto.
Forward-Looking
Statements
This
quarterly report contains forward-looking statements and information (within the
meaning of the Private Securities Litigation Reform Act of 1995) relating to
Blink Couture, Inc. (“we,” “us,” “our” or the “Company”) that are based on the
beliefs of our management as well as assumptions made by, and information
currently available to, our management. When used in this report, the words
“believe,” “anticipate,” “expect,” “estimate,” “intend,” “plan” and similar
expressions, as they relate to us or our management, are intended to identify
forward-looking statements. These statements reflect management’s current view
of us concerning future events and are subject to certain risks, uncertainties
and assumptions, including among many others: a general economic downturn; a
downturn in the securities markets; federal or state laws or regulations having
an adverse effect on proposed transactions that we desire to effect; Securities
and Exchange Commission (“SEC”) regulations which affect trading in the
securities of “penny stocks,” and other risks and uncertainties. Although
the Company believes its assumptions underlying the forward-looking statements
are reasonable, any of the assumptions could prove inaccurate and, therefore,
there can be no assurance the forward-looking statements included in this
quarterly report will prove to be accurate. In light of the significant
uncertainties inherent in the forward-looking statements included herein, the
inclusion of such information should not be regarded as a representation by the
Company or any other person that the objectives and plans of the Company will be
achieved.
Description
of the Business
The
Company was incorporated in the State of Delaware on October 23, 2003, under the
name Fashionfreakz International Inc. On December 2, 2005, the Company changed
its name to Blink Couture, Inc. Until March 4, 2008, the Company’s principal
business was the online retail marketing of trendy clothing and accessories
produced by independent designers. On March 4, 2008, the Company discontinued
its prior business and changed its business plan. The Company’s business plan
now consists of exploring potential targets for a business combination through
the purchase of assets, share purchase or exchange, merger or similar type of
transaction.
The
Company is currently considered to be a “blank check” company. The SEC defines
those companies as “any development stage company that is issuing a penny stock,
within the meaning of Section 3(a)(51) of the Securities Exchange Act of 1934,
as amended (the “Exchange Act”), and that has
no specific business plan or purpose, or has indicated that its business plan is
to merge with an unidentified company or companies.” Many states have enacted
statutes, rules and regulations limiting the sale of securities of “blank check”
companies in their respective jurisdictions. The Company is also a “shell
company,” defined in Rule 12b-2 under the Exchange Act as a company with no or
nominal assets (other than cash) and no or nominal operations.
We will
not be restricted in our search for business combination candidates to any
particular geographical area, industry or industry segment, and may enter into a
combination with a private business engaged in any line of business, including
service, finance, mining, manufacturing, real estate, oil and gas, distribution,
transportation, medical, communications, high technology, biotechnology or any
other. Management’s discretion is, as a practical matter, unlimited in the
selection of a combination candidate. Management will seek combination
candidates in the United States and other countries, as available time and
resources permit, through existing associations and by word of mouth. This plan
of operation has been adopted in order to attempt to create value for our
stockholders.
Results
of Operations
The
Company has not conducted any active operations since March 4, 2008, except for
its efforts to locate suitable acquisition candidates. No revenue has been
generated by the Company from October 23, 2003 (Inception) to October 31, 2010.
It is unlikely the Company will have any revenues unless it is able to effect an
acquisition or merger with an operating company, of which there can be no
assurance. It is management’s assertion that these circumstances may hinder the
Company’s ability to continue as a going concern. The Company’s plan of
operation for the next twelve months shall be to continue its efforts to locate
suitable acquisition candidates.
10
Three Months ended
October 31, 2010 Compared to Three Months ended October 31, 2009.
For the
three months ended October 31, 2010, the Company had a net loss of
$19,501compared to a net loss of $17,172 for the three months ended October 31,
2009. This increase in net loss of $2,329 (approximately 13.6%) between the
comparable periods was primarily attributable to an increase in legal fees and
other professional fees and expenses from $4,900 for the three months ended
October 31, 2009 to $6,000 for the three months ended October 31, 2010 and an
increase in interest expense from $1,174 for the three months ended October 31,
2009 to $2,352 for the same quarter in 2010. The increase in legal
fees and other professional fees and expenses for the three months ended October
31, 2010, was incurred in connection with a change of professional service
providers, which was initiated as a result of the change of control of the
Company effective as of December 29, 2009. The increase in interest
expense between the comparable periods reflects additional interest payable by
the Company with respect to additional loans made by Regent Private Capital,
LLC, the Company’s principal stockholder (“Regent”), since December 29, 2009, to
pay all expenses incurred by the Company.
Plan
of Operation
The
Company currently does not engage in any business activities that provide cash
flow. During the next twelve months we anticipate incurring costs
related to:
|
|
(i)
|
filing
Exchange Act reports, and
|
|
|
(ii)
|
investigating,
analyzing and consummating an
acquisition.
|
We
believe we will be able to meet these costs through use of funds in our
treasury, through deferral of fees by certain service providers and additional
amounts, as necessary, to be loaned to or invested in us by our stockholders,
management or other investors.
The
Company may consider acquiring a business which has recently commenced
operations, is a developing company in need of additional funds for expansion
into new products or markets, is seeking to develop a new product or service, or
is an established business which may be experiencing financial or operating
difficulties and is in need of additional capital. In the alternative, a
business combination may involve the acquisition of, or merger with, a company
which does not need substantial additional capital but which desires to
establish a public trading market for its shares while avoiding, among other
things, the time delays, significant expense, and loss of voting control which
may occur in a public offering.
Any
target business that is selected may be a financially unstable company or an
entity in its early stages of development or growth, including entities without
established records of sales or earnings. In that event, we will be subject to
numerous risks inherent in the business and operations of financially unstable
and early stage or potential emerging growth companies. In addition, we may
effect a business combination with an entity in an industry characterized by a
high level of risk, and, although our management will endeavor to evaluate the
risks inherent in a particular target business, there can be no assurance that
we will properly ascertain or assess all significant risks.
The
Company anticipates that the selection of a business combination will be complex
and extremely risky. Because of general economic conditions, rapid technological
advances being made in some industries and shortages of available capital, our
management believes that there are numerous firms seeking even the limited
additional capital which we will have and/or the perceived benefits of becoming
a publicly traded corporation. Such perceived benefits of becoming a publicly
traded corporation include, among other things, facilitating or improving the
terms on which additional equity financing may be obtained, providing liquidity
for the principals of and investors in a business, creating a means for
providing incentive stock options or similar benefits to key employees, and
offering greater flexibility in structuring acquisitions, joint ventures and the
like through the issuance of stock. Potentially available business combinations
may occur in many different industries and at various stages of development, all
of which will make the task of comparative investigation and analysis of such
business opportunities extremely difficult and complex.
11
Liquidity
and Capital Resources
We had no
cash on hand at October 31, 2010 and had no other assets to meet ongoing
expenses or debts that may accumulate. Since inception, we have accumulated a
deficit of $263,679. As of October 31, 2010 we had total liabilities of
$189,953.
We have
no commitment for any capital expenditure and foresee none. However, we will
incur routine fees and expenses incident to our reporting duties as a public
company, and we will incur expenses in finding and investigating possible
acquisitions and other fees and expenses in the event we make an acquisition or
attempt but are unable to complete an acquisition. Our cash requirements for the
next twelve months are relatively modest, principally accounting expenses and
other expenses relating to making filings required under the Exchange Act, which
should not exceed $50,000 in the fiscal year ending July 31, 2011. Any travel,
lodging or other expenses which may arise related to finding, investigating and
attempting to complete a combination with one or more potential acquisitions
could also amount to thousands of dollars.
We will
only be able to pay our future obligations and meet operating expenses by
raising additional funds, acquiring a profitable company or otherwise generating
positive cash flow. As a practical matter, we are unlikely to generate positive
cash flow by any means other than acquiring a company with such cash flow. We
believe that management members or stockholders will lend funds to us as needed
for operations prior to completion of an acquisition. Management and the
stockholders are not obligated to provide funds to us, however, and it is not
certain they will always want or be financially able to do so. Our stockholders
and management members who advance funds to us to cover operating expenses will
expect to be reimbursed, either by us or by the company acquired, prior to or at
the time of completing a combination. We have no intention of borrowing money to
reimburse or pay salaries to any of our officers, directors or stockholders or
their affiliates. There currently are no plans to sell additional securities to
raise capital, although sales of securities may be necessary to obtain needed
funds. Our current management has agreed to continue their services to us and to
accrue sums owed them for services and expenses and expect payment reimbursement
only.
Should
existing management or stockholders refuse to advance needed funds, however, we
would be forced to turn to outside parties to either lend funds to us or buy our
securities. There is no assurance whatsoever that we will be able to raise
necessary funds, when needed, from outside sources. Such a lack of funds could
result in severe consequences to us, including among others:
|
·
|
failure
to make timely filings with the SEC as required by the Exchange Act, which
may also result in suspension of trading or quotation of our stock and
could result in fines and penalties to us under the Exchange
Act;
|
|
·
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curtailing
or eliminating our ability to locate and perform suitable investigations
of potential acquisitions; or
|
|
·
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inability
to complete a desirable acquisition due to lack of funds to pay legal and
accounting fees and acquisition-related
expenses.
|
It is our
intention to seek reimbursement from potential acquisition candidates for
professional fees and travel, lodging and other due diligence expenses incurred
by our management, in connection with our investigation, negotiation and
consummation of a business combination with such acquisition candidates. There
is no assurance that any potential candidate will agree to reimburse us for such
costs.
Going
Concern
Our
independent auditors have added an explanatory paragraph to their
audit issued in connection with the financial statements for the period ended
July 31, 2010, relative to our ability to continue as a going concern. We had a
working capital deficit of $189,953 at October 31, 2010; we had an accumulated
deficit of $263,679 incurred through October 31, 2010; and recorded losses of
$19,501 for the three months ended October 31, 2010. The going concern opinion
issued by our auditors means that there is substantial doubt that we can
continue as an ongoing business for the twelve month period ending July 31, 2011
and thereafter. The financial statements do not include any adjustments that
might result from the uncertainty about our ability to continue our
business.
12
Off-Balance
Sheet Arrangements
We do not
have any off-balance sheet arrangements that have or are reasonably likely to
have a current or future effect on our financial condition, changes in financial
condition, revenues or expenses, results of operations, liquidity, capital
expenditures or capital resources that is material to investors.
Contractual
Obligations
As a
“smaller reporting company” as defined by Item 10 of Regulation S-K, the Company
is not required to provide this information.
ITEM 4. CONTROLS
AND PROCEDURES
Evaluation
of Disclosure Controls and Procedures
The
Company’s management is responsible for establishing and maintaining a system of
disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e)
under the Exchange Act) that is designed to ensure that information required to
be disclosed by the Company in the reports that the Company files or submits
under the Exchange Act is recorded, processed, summarized and reported, within
the time periods specified in the Commission’s rules and
forms. Disclosure controls and procedures include, without
limitation, controls and procedures designed to ensure that information required
to be disclosed by an issuer in the reports that it files or submits under the
Exchange Act is accumulated and communicated to the issuer’s management,
including its principal executive officer or officers and principal financial
officer or officers, or persons performing similar functions, as appropriate to
allow timely decisions regarding required disclosure.
In
accordance with Exchange Act Rules 13a-15 and 15d-15, an evaluation was
completed under the supervision and with the participation of the Company’s
management, including the Company’s Principal Executive Officer and Principal
Financial Officer, of the effectiveness of the design and operation of the
Company’s disclosure controls and procedures as of the end of the period covered
by this quarterly report. Based on that evaluation, the Company’s
management including the Principal Executive Officer and Principal Financial
Officer, concluded that the Company’s disclosure controls and procedures were
effective in providing reasonable assurance that information required to be
disclosed in the Company’s reports filed or submitted under the Exchange Act was
recorded, processed, summarized, and reported within the time periods specified
in the SEC’s rules and forms.
Changes
in Internal Control Over Financial Reporting
There
have been no significant changes to the Company’s internal controls
over financial reporting that occurred during the quarter ended October 31, 2010
that has materially affected, or is reasonably likely to materially affect, our
internal control over financial reporting.
13
PART
II - OTHER INFORMATION
ITEM
1. LEGAL PROCEEDINGS
There are
no legal proceedings which are pending or have been threatened against us or any
of our officers, directors or control persons of which management is
aware.
ITEM
1A. RISK FACTORS.
ITEM
2. UNREGISTERED SALES OF EQUITY SECURITIES
ITEM
3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM
4. REMOVED AND RESERVED
Supplement No. 3 to Fourth
Amendment and Restatement of Loan Agreement and Promissory
Note
Effective
as of October 31, 2010, we executed Supplement No. 3 (the “Third Supplement”) to
the Fourth Amendment and Restatement of Loan Agreement and Promissory Note (the
“Fourth Loan Restatement”) with Regent. The Fourth Loan Restatement was filed as
Exhibit 10.9 to the Registrant’s Quarterly Report on Form 10-Q filed with the
Securities and Exchange Commission (“SEC”) on March 17, 2010, and supplemented
by Supplement to Fourth Amendment and Restatement of Loan Agreement, filed as
Exhibit 10.11 to the Registrant’s Quarterly Report on Form 10-Q filed with the
SEC on June 14, 2010, and further supplemented by Supplement No. 2 to Fourth
Amendment and Restatement of Loan Agreement, filed as Exhibit 10.12 to the
Registrant’s Annual Report on Form 10-K filed with the SEC on October 29, 2010.
The Third Supplement further supplements and amends the Fourth Loan Restatement,
by including, in the aggregate principal amount outstanding thereunder,
additional advances made by Regent to the Company to pay operating expenses from
August 1, 2010, through and until October 31, 2010, increasing the outstanding
principal amount by $16,799 to $173,301. All other terms of the Fourth Loan
Restatement were unchanged and continued in full force and effect, unless and
until further supplemented or amended thereafter.
The
foregoing description of the Third Supplement is only a summary and is qualified
in its entirety by reference to Supplement No. 3 to Fourth Amendment and
Restatement of Loan Agreement and Promissory Note, a copy of which is attached
as an exhibit to this Quarterly Report on Form 10-Q.
ITEM
6. EXHIBITS
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Exhibit
No.
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Description
|
|
|
10.13
|
Supplement
No. 3 to Fourth Amendment and Restatement of Loan Agreement and Promissory
Note, dated as of October 31, 2010.
|
|
|
31.1
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Certification
of Principal Executive Officer and Principal Financial Officer filed
pursuant to Section 302 of the Sarbanes-Oxley Act of
2002.
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|
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32.1
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Certification
of Principal Executive Officer and Principal Financial Officer furnished
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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14
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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BLINK
COUTURE, INC.
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||
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Date:
December 14, 2010
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By:
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/s/ Lawrence
D. Field
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Lawrence
D. Field
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||
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President,
Chief Executive Officer, Chief Financial Officer and
Secretary
(Principal
Executive Officer and Principal Financial
Officer)
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15