UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended August 31, 20202021
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________ to __________
Commission file number 333-229748
INKY INC.
(Exact name of registrant as specified in its charter)
| NV | 37-1904036 | 7371 | ||||||
|
|
| ||||||
(State or Other Jurisdiction of Incorporation or Organization) | (I.R.S. Employer Identification Number) | (Primary Standard Industrial Classification Code Number) | ||||||
Ioanna Kallidou, President and Chief Executive Officer 36 Aigyptou Avenue, Larnaca , 6030 Phone: | ||||||||
(Address, including Zip Code, and Telephone Number, including Area Code, of Registrant's Principal Executive Office) | ||||||||
Securities registered under Section 12(b) of the Exchange Act: None | ||||
|
|
| ||
|
|
| ||
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 [ ]
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 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 such files).
Yes [ ] No [X]
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated
filer,” ““large accelerated filer,” “smaller“accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.
| Large accelerated Filer | [ ] | Accelerated Filer | [ ] |
| [ |
|
|
|
| Smaller reporting company | [X] |
Emerging growth company | [ | ||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act. [ ]
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes [X] No [ ]
State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date: 4,255,500 common shares issued and outstanding as of October 9, 2020.6, 2021.
2
INKY
FORM 10-Q
Quarterly Period Ended August 31, 20202021
TABLE OF CONTENTS
| Page | ||
| ||
|
| |
Item 1. | Financial Statements (Unaudited) | 5 |
Condensed Balance Sheets as of August 31, | 6 | |
Condensed Statements of Operations for the three and nine months ended August 31, 2021 and 2020
| 7 | |
Condensed Statement of Stockholders' Deficit for the three and nine months ended August 31, 2021 and 2020 | 8 | |
Condensed Statements of Cash Flows for the nine months ended August 31, 2021 and 2020 | 9 | |
Notes to the Condensed Unaudited Financial Statements | 10 | |
Item 2. |
|
|
Item 3. | Quantitative and Qualitative Disclosures About Market Risk |
|
Item 4. | Controls and Procedures |
|
PART II | OTHER INFORMATION: | |
Item 1. | Legal Proceedings |
|
Item 1A | Risk Factors |
|
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds |
|
Item 3. | Defaults Upon Senior Securities |
|
Item 4. | Mine Safety Disclosures |
|
Item 5. | Other Information |
|
Item 6. | Exhibits |
|
Signatures |
|
3
3
Special Note Regarding Forward—Forward—Looking Statements
Statements made in this Form 10-Q that are not historical or current facts are "forward-looking statements" made pursuant to the safe harbor provisions of Section 27A of the Securities Act of 1933 (the “Act”“Act”) and Section 21E of the Securities Exchange Act of 1934. These statements often can be identified by the use of terms such as “may,“may,” “will,“will,” “expect,“expect,” “believe,“believe,” “anticipate,“anticipate,” “estimate,“estimate,”, “approximate”“approximate” or “continue”“continue”, or the negative thereof. We intend that such forward-looking statements be subject to the safe harbors for such statements. We wish to caution readers not to place undue reliance on any such forward-looking statements, which speak only as of the date made. Any forward-looking statements represent management's best judgment as to what may occur in the future. However, forward-looking statements are subject to risks, uncertainties and important factors beyond our control that could cause actual results and events to differ materially from historical results of operations and events and those presently anticipated or projected. We disclaim any obligation subsequently to revise any forward-looking statements to reflect events or circumstances after the date of such statement or to reflect the occurrence of anticipated or unanticipated events.
Financial information contained in this quarterly report and in our unaudited interim financial statements is stated in United States dollars and are prepared in accordance with United States generally accepted accounting principles.
4
4
PART I - FINANCIAL INFORMATION
Item 1. | Financial Statements. |
The accompanying interim condensed financial statements of Inky (“(“the Company,” “we,“we,” “us”“us” or “our”“our”), have been prepared without audit pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with United States generally accepted principles have been condensed or omitted pursuant to such rules and regulations. The interim financial statements are condensed and should be read in conjunction with the Company’sCompany’s latest annual financial statements.
In the opinion of management, the financial statements contain all material adjustments, consisting only of normal adjustments considered necessary to present fairly the financial condition, results of operations, and cash flows of the Company for the interim periods presented.
5
INKY
CONDENSED BALANCE SHEETS
(Unaudited)
As of August 31, 2021
| As of November 30, 2020 | |||
| ASSETS | ||||
| CURRENT ASSETS | ||||
| Cash and cash equivalent | $ | 114 | $ | 11,312 |
| Prepaid expenses | 19,342 | 379 | ||
| Total Current Assets | 19,456 | 11,691 | ||
| TOTAL ASSETS | $ | 19,456 | $ | 11,691 |
| LIABILITIES AND STOCKHOLDERS’ DEFICIT | ||||
| LIABILITIES | ||||
| Current Liabilities | ||||
| Related-party loan | $ | 28,394 | $ | 27,545 |
| Total Current Liabilities | 28,394 | 27,545 | ||
| Total Liabilities | 28,394 | 27,545 | ||
| STOCKHOLDERS’ DEFICIT | ||||
| Common stock, $0.001 par value, 75,000,000 shares authorized; 5,092,023 and 4,654,200 shares issued and outstanding as of August 31, 2021 and November 30, 2020, respectively | 5,092 | 4,654 | ||
| Additional paid-in capital | 31,668 | 18,972 | ||
| Accumulated deficit | (45,698) | (39,480) | ||
| Total stockholders’ deficit | (8,938) | (15,854) | ||
| TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT | $ | 19,456 | $ | 11,691 |
INKY CONDENSED BALANCE SHEETS | ||||||
As of August 31, 2020 (Unaudited) | As of November 30, 2019 |
| ||||
ASSETS |
| |||||
|
|
|
| |||
CURRENT ASSETS |
|
|
| |||
Cash and cash equivalent | $ | | $ | 391 |
| |
Prepaid Expenses | 542 | |
| |||
Total Current Assets | 542 | 391 |
| |||
| ||||||
TOTAL ASSETS | $ | 542 | $ | 391 |
| |
|
|
|
| |||
LIABILITIES AND STOCKHOLDERS’ DEFICIT |
| |||||
|
|
|
| |||
LIABILITIES |
| |||||
Current Liabilities |
|
|
| |||
Accounts Payable | $ | 1,500 | $ | |
| |
Related-party loan | 27,545 | 16,676 |
| |||
Total Current Liabilities | 29,045 |
| 16,676 |
| ||
Total Liabilities | 29,045 | 16,676 |
| |||
|
| |||||
STOCKHOLDERS’ Deficit |
| |||||
Common stock, $0.001 par value, 75,000,000 shares authorized; 4,080,000 and 4,000,000 shares issued and outstanding as of August 31, 2020 and November 30, 2019, respectively | 4,080 | 4,000 |
| |||
Additional paid-in capital | 2,320 | |
| |||
Accumulated deficit | (34,903) | (20,285) |
| |||
Total stockholders’ deficit | (28,503) | (16,285) |
| |||
|
| |||||
TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT | $ | 542 | $ | 391 |
| |
The accompanying notes are an integral part of these condensed unaudited financial statements.
6
INKY
CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
For the three months ended August 31, 2021 | For the three months ended August 31, 2020 | For the nine months ended August 31, 2021 | For the nine months ended August 31, 2020 | |||||
| EXPENSES | ||||||||
| General and administrative expenses | $ | 1,679 | $ | 1,626 | $ | 6,218 | $ | 14,618 |
| Total expenses | 1,679 | 1,626 | 6,218 | 14,618 | ||||
| INCOME (LOSS) BEFORE TAX PROVISION | $ | (1,679) | $ | (1,626) | $ | (6,218) | $ | (14,618) |
| INCOME TAX EXPENSE | — | — | — | — | ||||
| NET LOSS | $ | (1,679) | $ | (1,626) | $ | (6,218) | $ | (14,618) |
| WEIGHTED AVERAGE SHARES OUTSTANDING, BASIC AND DILUTED | 5,092,023 | 4,080,000 | 5,001,838 | 4,049,051 | ||||
| BASIC AND DILUTED NET LOSS PER SHARE | $ | (0.00) | $ | (0.00) | $ | (0.00) | $ | (0.00) |
The accompanying notes are an integral part of these condensed unaudited financial statements.
7
INKY
CONDENSED STATEMENT OF CHANGES IN STOCKHOLDERS’ DEFICIT
For the Three and Nine Months Ended August 31, 2021 and 2020
(Unaudited)
| Common stock | Additional paid-in capital | Accumulated deficit | Total stockholders’ deficit | ||||||
| Shares | Amount | |||||||||
| Balance, November 30, 2019 | 4,000,000 | $ | 4,000 | $ | — | $ | (20,285) | $ | (16,285) | |
| Net income (loss) | — | — | — | (6,703) | (6,703) | |||||
| Balance, February 29, 2020 | 4,000,000 | $ | 4,000 | $ | — | $ | (26,988) | $ | (22,988) | |
| Issuance of common stock | 80,000 | 80 | 2,320 | — | 2,400 | |||||
| Net income (loss) | — | — | — | (6,289) | (6,289) | |||||
| Balance, May 31, 2020 | 4,080,000 | $ | 4,080 | $ | 2,320 | $ | (33,277) | $ | (26,877) | |
| Net income (loss) | — | — | — | (1,626) | (1,626) | |||||
| Balance, August 31, 2020 | 4,080,000 | $ | 4,080 | $ | 2,320 | $ | (34,903) | $ | (28,503) | |
| Balance, November 30, 2020 | 4,654,200 | $ | 4,654 | $ | 18,972 | $ | (39,480) | $ | (15,854) | |
| Issuance of common stock for cash | 370,156 | 370 | 10,734 | — | 11,104 | |||||
| Net income (loss) | — | — | — | (2,697) | (2,697) | |||||
| Balance, February 28, 2021 | 5,024,356 | $ | 5,024 | $ | 29,706 | $ | (42,177) | $ | (7,447) | |
| Issuance of common stock for cash | 67,667 | 68 | 1,962 | — | 2,030 | |||||
| Net income (loss) | — | — | — | (1,842) | (1,842) | |||||
| Balance, May 31, 2021 | 5,092,023 | $ | 5,092 | $ | 31,668 | $ | (44,019) | $ | (7,259) | |
| Net income (loss) | — | — | — | (1,679) | (1,679) | |||||
| Balance, August 31, 2021 | 5,092,023 | $ | 5,092 | $ | 31,668 | $ | (45,698) | $ | (8,938) | |
The accompanying notes are an integral part of these condensed unaudited financial statements.
8
INKY
CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
| August 31, 2021 | August 31, 2020 | |||
| CASH FLOWS FROM OPERATING ACTIVITIES | ||||
| Net (loss) | $ | (6,218) | $ | (14,618) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||||
| Prepaid expenses | (18,963) | (542) | ||
| Accounts payable | — | 1,500 | ||
| Net cash flows used in operating activities | (25,181) | (13,660) | ||
| CASH FLOWS FROM FINANCING ACTIVITIES | ||||
| Proceeds from sale of common stock | 13,134 | 2,400 | ||
| Related-party loan | 849 | 10,869 | ||
| Net cash flows provided by financing activities | $ | 13,983 | $ | 13,269 |
| NET DECREASE IN CASH | $ | (11,198) | $ | (391) |
| CASH, BEGINNING OF PERIOD | $ | 11,312 | $ | 391 |
| CASH, END OF PERIOD | $ | 114 | — | |
| SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | ||||
| Cash paid for interest | $ | — | $ | — |
| Cash paid for income tax | $ | — | $ | — |
The accompanying notes are an integral part of these condensed unaudited financial statements.
6
INKY CONDENSED STATEMENTS OF OPERATIONS (Unaudited) | |||||||||||
For the three months ended August 31, 2020 | For the three months ended August 31, 2019 | For the nine months ended August 31, 2020 | For the nine months ended August 31, 2019 | ||||||||
EXPENSES |
|
| |||||||||
General and administrative expenses | $ | 1,626 | $ | 3,510 | $ | 14,618 | $ | 13,784 | |||
Total expenses |
| 1,626 | 3,510 | 14,618 | 13,784 | ||||||
|
|
| |||||||||
INCOME (LOSS) BEFORE TAX PROVISION | $ | (1,626) | $ | (3,510) | $ | (14,618) | $ | (13,784) | |||
INCOME TAX PROVISION | | | | | |||||||
NET INCOME (LOSS) | $ | (1,626) | $ | (3,510) | $ | (14,618) | $ | (13,784) | |||
|
|
| |||||||||
WEIGHTED AVERAGE SHARES OUTSTANDING, BASIC AND DILUTED |
| 4,080,000 | 4,000,000 | 4,049,051 | 4,000,000 | ||||||
|
|
| |||||||||
BASIC AND DILUTED NET LOSS PER SHARE | $ | (0.00) | $ | (0.00) | $ | (0.00) | $ | (0.00) | |||
The accompanying notes are an integral part of these condensed unaudited financial statements.
7
INKY CONDENSED STATEMENT OF CHANGES IN STOCKHOLDERS’ DEFICIT For the Three and Nine Months Ended August 31, 2020 and 2019 (Unaudited) | |||||||||
| Common stock | Additional | Accumulated deficit | Total | |||||
| paid-in | stockholder’s | |||||||
| Shares | Amount | capital | deficit | |||||
Balance, November 30, 2018 | 4,000,000 | $ | 4,000 | $ | — | $ | (4,901) | $ | (901) |
|
|
|
|
|
|
|
|
|
|
Net income (loss) | — |
| — |
| — |
| (6,308) |
| (6,308) |
|
|
|
|
|
| ||||
Balance, February 28, 2019 | 4,000,000 | $ | 4,000 | $ | — | $ | (11,209) | $ | (7,209) |
|
|
|
|
|
| ||||
Net income (loss) | — |
| — |
| — |
| (3,966) |
| (3,966) |
|
|
|
|
|
| ||||
Balance, May 31, 2019 | 4,000,000 | $ | 4,000 | $ | — | $ | (15,175) | $ | (11,175) |
|
|
|
|
|
| ||||
Net income (loss) | — |
| — |
| — |
| (3,510) |
| (3,510) |
|
|
|
|
|
| ||||
Balance, August 31, 2019 | 4,000,000 | $ | 4,000 | $ | — | $ | (18,685) | $ | (14,685) |
Balance, November 30, 2019 | 4,000,000 | $ | 4,000 | $ | — | $ | (20,285) | $ | (16,285) |
|
|
|
|
|
|
|
|
|
|
Net income (loss) | — |
| — |
| — |
| (6,703) |
| (6,703) |
|
|
|
|
|
| ||||
Balance, February 29, 2020 | 4,000,000 | $ | 4,000 | $ | — | $ | (26,988) | $ | (22,988) |
|
|
|
|
|
|
|
|
|
|
Issuance of common stock | 80,000 | 80 | 2,320 | — | 2,400 | ||||
Net income (loss) | — |
| — |
| — |
| (6,289) |
| (6,289) |
|
|
|
|
|
| ||||
Balance, May 31, 2020 | 4,080,000 | $ | 4,080 | $ | 2,320 | $ | (33,277) | $ | (26,877) |
Net income (loss) | — |
| — |
| — |
| (1,626) |
| (1,626) |
|
|
|
|
|
| ||||
Balance, August 31, 2020 | 4,080,000 | $ | 4,080 | $ | 2,320 | $ | (34,903) | $ | (28,503) |
The accompanying notes are an integral part of these condensed unaudited financial statements.
8
INKY CONDENSED STATEMENTS OF CASH FLOWS (Unaudited)
| ||||
| August 31, 2020 | August 31, 2019 | ||
CASH FLOWS FROM OPERATING ACTIVITIES |
|
| ||
Net (loss) | $ | (14,618) | $ | (13,784) |
Adjustments to reconcile net loss to net cash used in operating activities: |
|
| ||
Prepaid rent |
| — | 1,949 | |
Prepaid Expenses | (542) | — | ||
Accounts payable | 1,500 | (2,000) | ||
Net cash flows used in operating activities |
| (13,660) | (13,835) | |
|
|
| ||
CASH FLOWS FROM FINANCING ACTIVITIES |
|
| ||
Proceeds from sale of common stock | 2,400 | — | ||
Related-party loan |
| 10,869 | 8,811 | |
Net cash flows provided by financing activities | $ | 13,269 | $ | 8,811 |
|
|
| ||
NET INCREASE (DECREASE) IN CASH | $ | (391) | $ | (5,024) |
|
|
| ||
CASH, BEGINNING OF PERIOD | $ | 391 | $ | 5,150 |
|
|
| ||
CASH, END OF PERIOD | $ | — | $ | 126 |
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | ||||
Cash paid for interest | $ | — | $ | — |
Cash paid for income tax | $ | — | $ | — |
The accompanying notes are an integral part of these condensed unaudited financial statements.
9
INKY
INKY
NOTES TO THE CONDENSED UNAUDITED FINANCIAL STATEMENTS
For the nine months ended August 31, 20202021
Note 1 —Description of Organization and Business Operations
Inky is a startup corporation, registered under the laws in the State of Nevada on June 12, 2018. Inky (“The company (“we,” “us,“us,” or the “Company”“Company”) develops, publishesplans to develop, publish and marketsmarket mobile software application for smartphones and tablet devices (“Apps”(“Apps”). Inky is engaged in the mobile applications development area. InkyIt is an Augmented Reality (“AR”),‘augmented reality’ (AR) app aiming to help users decide what and where to ink without having to regret the tattoo after the fact. The app includes a selection of designstattoo sketches by different tattoo artists that can be tested virtually placed via the automation of smartphone-powered augmented reality placing pixelsAR. A user gets to try on your flesha virtual tattoo on their body in real-time.
Our principal executive office is located at 24 Penteliss, Limassol 4102, Cyprus.
The Company’sCompany’s functional and reporting currency is the U.S. dollar.
Note 2 –Going Concern
The accompanying unaudited condensed financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America,accounting principles, which contemplate continuation of the Company as a going concern. As a startup company, the Company had no revenues and incurred losses as of August 31, 2020.2021. The Company currently has limited working capital and has not completed its efforts to establish a stabilized source of revenues sufficient to cover operating costs over an extended period of time. These conditions raise substantial doubt about the Company’sCompany’s ability to continue as a going concern.
Management anticipates that the Company will be dependent, for the near future, on additional investment capital to fund operating expenses. The Company intends to position itself so that it will be able to raise additional funds through the capital markets. In light of management’smanagement’s efforts, there are no assurances that the Company will be successful in this or any of its endeavors or become financially viable and continue as a going concern.
At this time any results of financial impact of the COVID-19 pandemic cannot be reasonably estimated now but it may have a material adverse impact on our business, financial condition and results of operations.
Note 3 —Summary of Significant Accounting Policies
Basis of Presentation
The accompanying unaudited condensed financial statements of the Company have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (the "SEC"), including the instructions to Form 10-Q and Regulation S-X. Certain information and note disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles in the United States of America ("U.S. GAAP"), have been condensed or omitted from these statements pursuant to such rules and regulations and, accordingly, they do not include all the information and notes necessary for comprehensive financial statements and should be read in conjunction with our audited financial statements included in our Annual Report on Form 10-K for the year ended November 30, 2019.2020.
In the opinion of management, all adjustments (consisting of normal accruals) considered for a fair presentation have been included. The Company’sCompany’s year-end is November 30.
10
10
INKY
INKY
NOTES TO THE CONDENSED UNAUDITED FINANCIAL STATEMENTS
Note 3 — Summary of Significant Accounting Policies (cont.)For the nine months ended August 31, 2021
The Company complies with accounting and disclosure requirements of FASB ASC Topic 260, “Earnings“Earnings Per Share.” Net loss per share is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the period. As of August 31, 20202021 and 2019,2020, the Company did not have any dilutive securities and other contracts that could, potentially, be exercised or converted into shares of common stock and then share in the earnings of the Company. As a result, diluted loss per share is the same as basic loss per share for the periods presented.
Use of Estimates
The preparation of financial statements in conformity with U.S. GAAP requires the Company’sCompany’s 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.
Cash and Cash Equivalents
The Company considers all highly liquid investments with the original maturities of three months or less to be cash equivalents. The Company had $0$114 of cash and cash equivalents as of August 31, 20202021 ($39111,312 as of November 30, 2019)2020).
Income Taxes
The Company follows the asset and liability method of accounting for income taxes under FASB ASC 740, “Income“Income Taxes.” Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statements carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that included the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.
FASB ASC 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities. There were no unrecognized tax benefits as of August 31, 2020.2021. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. As of August 31, 20202021, and November 30, 2019,2020, no amounts have been accrued for the payment of interest and penalties. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position. The Company is subject to income tax examinations by major taxing authorities since inception.
11
INKY
INKY
NOTES TO THE CONDENSED UNAUDITED FINANCIAL STATEMENTS
Note 3 — Summary of Significant Accounting Policies (cont.)For the nine months ended August 31, 2021
Research and Development Policy
ASC 730, “Research“Research and Development”Development”, addresses the proper accounting and reporting for research and development costs. It identifies those activities that are to be identified as research and development, the elements of costs that shall be identified with research and development activities, the accounting for these costs, and the financial statement disclosures related to them. Costs and expenses that can be clearly identified as research and development are charged to expense as incurred.
Software Development Policy
The Company follows the provisions of ASC 985, “Software”“Software”, which requires that all costs relating to the purchase or internal development and production of software products to be sold, leased or otherwise marketed, be expensed in the period incurred unless the requirements for technological feasibility have been established.
Recent Accounting Pronouncements
The Company reviews new accounting standards as issued. Management has not identified any new standards that it believes will have a significant impact on the Company’s consolidatedCompany’s financial statements.
Note 4 – Stockholders’Stockholders’ Equity
Upon formation the total number of shares of all classes of stock which the Company is authorized to issue is Seventy-Five Million (75,000,000) shares of Common Stock, par value $0.001 per share.
During the nine months periodyear ended August 31,November 30, 2020, the Company issued 80,000654,200 shares of common stock for cash proceeds of $2,400$19,626 at $0.03 per share.
During the nine months ended August 31, 2021, the Company issued 437,823 shares of common stock for cash proceeds of $13,134 at $0.03 per share.
There were 4,080,0005,092,023 and 4,000,0004,654,200 shares of common stock issued and outstanding as of August 31, 20202021, and November 30, 2019,2020, respectively.
Note 5 —Related Party Transactions
During the year ended November 30, 2019,2020, the Company’sCompany’s director loaned to the Company $16,676. $10,869.
During the nine months period ended August 31, 2020,2021, the Company’sCompany’s director loaned to the Company $10,869. $849.
As of August 31, 2020,2021, our sole director has loaned to the Company $27,545.$28,394. This loan is unsecured, non-interest bearing and due on demand.
12
INKY
NOTES TO THE CONDENSED UNAUDITED FINANCIAL STATEMENTS
For the nine months ended August 31, 2021
Note 6 — Prepaid Expenses
As of August 31, 2021, the prepaid balance was as follows:
| As of August 31,2021 | ||
| Application development | $ | 18,800 |
| Prepaid business license fees | 542 | |
| Total prepaid expenses | $ | 19,342 |
Note 6 7 –Subsequent Events
The Company has evaluated all subsequent events through the date when the financial statements were issued to determine if they must be reported. The Company determined that there were no reportable subsequent events to disclose in these financial statements other than those described below.statements.
During September 2020 the Company issued 130,000 shares of common stock for cash proceeds of $3,705 at $0.03 per share. As of October 9, 2020 the Company issued 45,500 shares of common stock for cash proceeds of $1,363 at $0.03 per share.
12
13
|
|
DESCRIPTION OF BUSINESS
Overview
Inky is a company,was incorporated in the State of Nevada on June 12, 2018. Inky (“The Company (“we,” “us,“us,” or the “Company”“Company”) develops, publishes and markets mobile software application for smartphones and tablet devices (“Apps”). Inky is engaged in mobile applications development. Inky facilitateshelps the User decidingdecide what and where they want to ink without having to actually commence the tattoo procedure. Theget an actual tattoo. User simply utilizes Inky to have preview of a proposed tattoo. Then the tattoo technician utilizes the User phone’sphone’s camera to position and overlay the proposed tattoo. Users will be able to download our ApplicationApp through direct-to-consumer digital storefronts, such as the Apple App Store and Google Play Market.
We plan to generate revenue from sales, or downloads, of our App and from advertisements published on our ad supported app titles.
The member of our management has accumulated significant experience, knowledge and contacts across the key disciplines in the digital and mobile industries. This encompasses digital and social media sales, advertising, operations, and technology and product development and deployment. We expect to leverage management’smanagement’s industry experience and contacts to our advantage.
Industry Background and Trends
An App is a type of application software designed to run on a mobile device, such as a smartphone or tablet device. Inky is an App that facilitates the user deciding what and where to ink without having to actually commence the tattoo procedure.
Over the last several years, mobile devices, including smartphones and tablets, have proliferated extensively around the world across a wide range of demographic groups, which is demonstrated in the following statistics published by the noted sources:
· As of August 2017, there are over 3.5 billion unique mobile internet users. Source: Statista
· Users spend on average 69% of their media time on smartphones. Source: comScore
· Mobile devices will drive 80% of global internet usage. Source: Zenith
· 50% of the time individuals spend on digital media is on mobile apps. Source: Comscore
· The total number of Android app downloads in 2016 was 90 billion. Source: App Annie
· Despite the sea of choice for mobile apps available for both iOS and Android, in real life people tend to use only a few on a daily basis. The average number of apps people use is 9 apps daily, and 30 apps monthly. Source: TechCrunch
· Mobile websites get more visitors than native apps. But those people spend a lot less time on mobile websites than they do on apps. Source: comScore
· There are about 8 million apps in the Google Play store, 2.2 million in the Apple App Store, 669K in the Windows Store, and 600K in the Amazon Appstore. Source: Statista
13
As mobile devices have become more prevalent, the mobile Apps industry has experienced corresponding growth in the number of Apps published and the niches they serve, as well as the revenues they generate. We believe that there will continue to be an increase in the number of smartphones and tablets sold. In addition, Apple, Samsung and other mobile device manufacturers have introduced new, larger and more powerful smartphones and tablets that enable more complex Apps and that allow app developers to create apps that are optimized for larger screen sizes and designed to take advantage of these devices’ advanced capabilities and functionality. We believe that the proliferation of and technological developments to mobile devices will continue to drive growth in our industry for the foreseeable future.
Our App
Inky is engaged in mobile applications development area.
The app includes a selection of designs by different tattoo artists that you can try out virtually via the automation of smartphone-powered augmented reality placing pixels on your flesh in real-time.
There are two profiles: User and Master in our application. If you want to share your sketches and your work with others, you need to sign up as Master. If you just want to try the tattoo via our application on your body you should sign up as User. You can change your account mode to the other without any problem, just sign out from the current mode and sign up as the other as needed. As Master, you can upload your own sketches to the app to see whether your pen skills are sharp enough to merit leaving a permanent mark on your person.
The app asks you to put a little ink on your skin — think of that as part of the try before you buy process — because you need to draw an inky sign in the form of an octopus on your person in the place where you’re considering the real deal.
Then the Augmented Reality (“AR”) tech uses your phone’s camera, combined with your three ink marks, to position and overlay what might be your future tattoo. So you’re peeking through your smartphone screen at an alternative tattooed you. Which is about as useful as AR gets right now.
Our app is designed to appeal to a variety of age groups ranging from younger teens to adults. We offer our app in both a free advertisement-supported version and a paid version that does include the tattoo base from Inky, as Inky Master. We believe that by offering free ad supported versions we can build a significantly larger customer base more quickly than we could if we charged users an up-front fee to download our apps since they may be reluctant to purchasing an app without first playing it. If the users enjoy a title, they may purchase the app and try Inky tattoo base.
In the future, we intend to broaden the scope of our App to include piercing, scarring, tunnels, microdermabrasion, tattoos on the white of the eye, microdermabrasion (silicone implants).
In the future, we also plan to develop our application in the application-profile for the Masters who will fill in information about themselves and users will choose the real tattoo Master according to the tattoo works and their geolocation.
Sales, Marketing and Distribution
We plan to market, sell and distribute our Inky Apps exclusively through Apple’sApple’s App Store and through the Google Play Store, the largest direct-to-consumer digital storefronts. We expect that a majority of our revenues will be derived from sales on the Apple App Store.
14
We plan to generate revenue from downloads of our paid App mode and from advertisements published on our ad supported app and game titles. We are planning to enter into agreements with each of Apple and Google that govern our relationship as developers / distributors on their respective storefronts.
We will complete the process of migrating the Apps into our corporate structure. We recently retained a new ad network that we believe employs a more effective technology platform and a more aggressive direct sales team. We also are integrating into our existing app and will incorporate into our new apps lucrative ad models and in-app purchasing.
We may partner with other App publishers to develop and market new titles. These types of arrangements will allow us to defray development and marketing costs among a wider range of titles and increase our chances of publishing a successful title.
We will employ advanced analytics, a means of analyzing data we collect about users of our Apps, to develop and publish more appealing titles and features in our apps.
Our ability to market our Apps successfully on direct-to-consumer digital storefronts will depend on a number of factors, including our ability to build relationships with storefront owners and educate them about our title roadmap so that they feature or otherwise prominently place them within the storefront. If we are able to achieve these ends, we believe that consumers are more likely to find our Apps, which may result in greater downloads and more revenue. We believe that a number of factors may influence the featuring or placement of an App, including:
· the perceived attractiveness of the title;
· the level of critical or commercial success of the App or of other Apps previously introduced by a publisher;
· incorporation of the storefront owner’s latest technology in the publisher’s title;
· how strong the consumer experience is on all of the devices that discover titles using any given digital storefront;
· the publisher’s relationship with the applicable storefront owner and future pipeline of quality titles for it; and
· the current market share of the publisher.
We also expect to undertake a number of marketing initiatives designed to attract consumers to download our Apps, including:
· using social networking websites, such as Facebook and Twitter, focused directly at the target users of our Apps;
· paying third parties to advertise or incentivize consumers to download our Apps through offers or recommendations;
· using “push” notifications to alert existing and prospective users of updates to our Apps and new product offerings;
· cross-promoting our Apps through banner advertisements in our other Apps, as well as advertising our Apps in our competitors’ product offerings; and
· undertaking outreach efforts with video app websites and related media outlets, such as providing reviewers with access to our apps prior to launch.
15
Competition
Developing and distributing Apps is a highly competitive business, characterized by frequent product introductions and rapidly emerging new platforms, technologies and storefronts. With respect to competing for consumers of our app, we will compete primarily on the basis of app quality, brand and customer reviews. We will compete for promotional and digital storefront placement based on these factors, as well as our relationship with the storefront owner, historical performance, perception of sales potential and relationships with licensors of brands, properties and other content.
We believe that our small size will provide us a competitive edge for the time being and allow us to make quick decisions as to product development to take advantage of consumer preferences at a particular point in time.
With respect to our App, we compete with a continually increasing number of companies, including industry leaders such as Activision, DeNA, Electronic Arts (EA Mobile), Apploft, GREE, GungHo Online Entertainment, King Digital Entertainment, Nexon, Warner Brothers and Zynga and many well-funded private companies, including Kabam, Machine Zone, Rovio, Storm 8/Team Lava and Supercell. We could also face increased competition if large companies with significant online presences such as Apple, Google, Amazon, Facebook or Yahoo, choose to enter or expand in the apps space or develop competing apps. One of the main competitors is the InkHunter, whose prototype application is similar to ours. But we believe we are also a good competitor.
14
In addition, given the open nature of the development and distribution for smartphones and tablets, we also compete or will compete with a vast number of small companies and individuals in all of our segments who are able to create and launch Apps and other content for these devices using relatively limited resources and with relatively limited start-up time or expertise.
Most of our competitors and our potential competitors have one or more advantages over us, including:
· significantly greater financial and personnel resources;
· stronger brand and consumer recognition;
· the capacity to leverage their marketing expenditures across a broader portfolio of mobile and non-mobile products;
· more substantial intellectual property of their own;
· lower labor and development costs and better overall economies of scale; and
· broader distribution and presence.
Government Regulation
We are subject to various federal, state and international laws and regulations that affect our business, including those relating to the privacy and security of customer and employee personal information and those relating to the Internet, behavioral tracking, mobile applications, advertising and marketing activities, and sweepstakes and contests. Additional laws in all of these areas are likely to be passed in the future, which could result in significant limitations on or changes to the ways in which we can collect, use, host, store or transmit the personal information and data of our customers or employees, communicate with our customers, and deliver products and services, may significantly increase our compliance costs. As our business expands to include new uses or collection of data that are subject to privacy or security regulations, our compliance requirements and costs will increase and we may be subject to increased regulatory scrutiny.
Employees
We are a start-up company and currently have one employee only - Ioanna Kallidou, our president, treasurer, secretary and director. We intend to outsource any additional services if the business requires.
16
Results of Operations for the Three Months Ended August 31, 20202021 and 2019:2020:
During the three months ended August 31, 20202021 and 2019,2020, we have not generated any revenues.
Our net loss for the three-month period ended August 31, 2021 and 2020, were $1,679 and 2019, were $1,626 and $3,510 accordingly. This was due to our general and administrative expenses related to operations of the Company.
Results of Operations for the Nine Months Ended August 31, 20202021 and 2019:2020:
During the nine months ended August 31, 20202021 and 2019,2020, we have not generated any revenues.
Our net loss for the nine-month period ended August 31, 2021 and 2020, were $6,218 and 2019, were $14,618 and $13,784 accordingly. This was due to our general and administrative expenses related to operations of the Company.The decrease in operating expenses is due to a decrease in audit fees.
15
Liquidity and Capital Resources
Net cash flows used in operating activities for the nine months ended August 31, 2020,2021, consisted of a net loss of ($14,618), accounts payable $1,500 6,218) and prepaid expenses ($542)18,963). Net cash flows used in operating activities for the nine months ended August 31, 2019,2020, consisted of a net loss ($13,784)14,618), prepaid rent $1,949expenses $(542) and accounts payable ($2,000).$1,500.
Net cash flows provided by financing activities for the nine months ended August 31, 2021, consisted of related-party loans for $849 and sale of common stock for $13,134. Net cash flows provided by financial activities for the nine months ended August 31, 2020, consisted of related-party loans for $10,869 and sale of common stock for $2,400. Net cash flows provided by financial activities for the nine months ended August 31, 2019, consisted of related-party loans for $8,811.
Off-Balance Sheet Arrangements
As of August 31, 2020,2021, we did not have any off-balance sheet arrangements that have or are reasonably likely to have a material current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations liquidity, capital expenditures or capital resources.
Limited Operating History and Need for Additional Capital
There is no historical financial information about us upon which to base an evaluation of our performance. We are in start-up stage operations and have generated limited revenues. Our business is subject to risks inherent in the establishment of a new business enterprise, including limited capital resources and possible cost overruns due to price and cost increases in services and products.
We have no assurance that future financing will be available to us on acceptable terms. If financing is not available on satisfactory terms, we may be unable to continue, develop or expand our operations. Equity financing could result in additional dilution to existing shareholders.
Item 3. | Quantitative and Qualitative Disclosures About Market Risk. |
Not Applicable.
17
Item 4. | Controls and Procedures. |
Evaluation of Disclosure Controls and Procedures
We carried out an evaluation as of August 31, 2020,2021, under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, who are one and the same, of the effectiveness of our disclosure controls and procedures (as defined in Exchange Act Rules 13a–13a–15(f) and 15d–15d–15(e)). Based upon that evaluation, our principal executive officer and principal financial officer concluded that, as of the end of the period covered in this report, our disclosure controls and procedures were not effective to ensure that information required to be disclosed in reports filed under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the required time periods and is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.
16
Changes in Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting during our most recent quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
PART II. OTHER INFORMATION
Item 1. | Legal Proceedings. |
During the period ending August 31, 2020,2021, there were no pending or threatened legal actions against us.
Item 1A. | Risk Factors. |
As a smaller reporting company, we are not required to provide the information required by this Item.
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds. |
Not Applicable.
Item 3. | Defaults Upon Senior Securities. |
Not Applicable.
Item 4. | Mine Safety Disclosures. |
Not Applicable.
Item 5. | Other Information. |
There is no other information required to be disclosed under this item that has not previously been reported.
18
| Item 6. | Exhibits. |
| Exhibit No. | Description | |
|
|
|
| |
| ||
32.1 |
17
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.
| INKY | ||||
| ||||
Date: October | By: | /s/ Ioanna Kallidou | ||
Ioanna Kallidou Chief Executive Officer (Principal Executive Officer) and Chief Financial Officer (Principal Financial and Accounting Officer) | ||||
19
18