UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark One) | ||
[X] | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
For the quarterly period ended: June 30, 2004 | ||
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: 000-50013 | ||
Originally New York, Inc. (Exact name of registrant as specified in its charter) | ||
Nevada (State or other jurisdiction of incorporation or organization) | 91-2107890 (I.R.S. Employer Identification No.) | |
2505 Anthem Village Dr., Suite E-404 Henderson, NV (Address of principal executive offices) | 89052 (Zip Code) | |
(702) 407-8222 (Registrant's telephone number, including area code) | ||
N/A (Former name, former address and former fiscal year, 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 [ ]
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS:
Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.
Yes [ ] No [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date: 7,112,018
ORIGINALLY NEW YORK, INC.
(A Development Stage Company)
Table of Contents
| Page |
PART I - FINANCIAL INFORMATION | |
Item 1. Financial Statements | 3 |
Balance Sheet | 7 |
Statements of Operations | 8 |
Statements of Cash Flows | 9 |
Notes | 11 |
Item 2. Management's Discussion and Plan of Operation | 12 |
PART II - OTHER INFORMATION | |
Item 4. Controls and Procedures | 14 |
Item 6. Exhibits | 14 |
SIGNATURES | 15 |
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PART I - FINANCIAL INFORMATION
Item 1. Unaudited Financial Statements
The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial reporting and pursuant to the rules and regulations of the Securities and Exchange Commission ("Commission"). While these statements reflect all normal recurring adjustments which are, in the opinion of management, necessary for fair presentation of the results of the interim period, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. For further information, refer to the financial statements and footnotes thereto, which are included in the Company's Annual Report on Form 10-KSB previously filed with the Commission on April 27, 2004, and subsequent amendments made thereto.
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Beckstead and Watts, LLP
Certified Public Accountants
3340 Wynn Road, Suite B
Las Vegas, NV 89102
702.257.1984 tel
702.362.0540 fax
INDEPENDENT ACCOUNTANTS' REVIEW REPORT
Board of Directors
Originally New York, Inc.
(a Development Stage Company)
We have reviewed the accompanying balance sheet of Originally New York, Inc. (a Nevada corporation) (a development stage company) as of June 30, 2004 and the related statements of operations for the three and six-months ended June 30, 2004 and 2003 and for the period March 12, 2001 (Inception) to June 30, 2004, and statements of cash flows for the six-months ended June 30, 2004 and 2003 and for the period March 12, 2001 (Inception) to June 30, 2004. These financial statements are the responsibility of the Company's management.
We conducted our reviews in accordance with standards established by the Public Company Accounting Oversight Board (United States). A review of interim financial information consists principally of applying analytical procedures to financial data, and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with generally accepted auditing standards, which will be performed for the full year with the objective of expressing an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.
Based on our reviews, we are not aware of any material modifications that should be made to the accompanying financial statements referred to above for them to be in conformity with generally accepted accounting principles in the United States of America.
The accompanying financial statements have been prepared assuming the Company will continue as a going concern. As discussed in Note 2 to the financial statements, the Company has had limited operations and has not commenced planned principal operations. This raises substantial doubt about its ability to continue as a going concern. Management's plans in regard to these matters are also described in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Beckstead and Watts, LLP has previously audited, in accordance with generally accepted auditing standards established by the Public Company Accounting Oversight Board (United States), the balance sheet of Originally New York, Inc. (a development stage company) as of December 31, 2003, and the related statements of operations, stockholders' equity, and cash flows for the year then ended (not presented herein) and in our report dated March 29, 2004, we expressed an unqualified opinion on those financial statements.
August 23, 2004
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Originally New York, Inc.
(A Development Stage Company)
Balance Sheet
as of
June 30, 2004
and
Statements of Operations
for the Three and Six Months Ended
June 30, 2004 and 2003,
and For the Period
March 12, 2001 (Inception) to June 30, 2004
and
Cash Flows
for the Six Months Ended
June 30, 2004 and 2003,
and For the Period
March 12, 2001 (Inception) to June 30, 2004
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TABLE OF CONTENTS
Page
Independent Accountants' Review Report
1
Balance Sheet
2
Statements of Operations
3
Statements of Cash Flows
4
Footnotes
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Originally New York, Inc. | |||||||
(a Development Stage Company) | |||||||
Balance Sheet | |||||||
(unaudited) | |||||||
June 30, | |||||||
2004 | |||||||
Assets | |||||||
Current assets: | |||||||
Cash | $ | 16,041 | |||||
Inventory | 1,431 | ||||||
Prepaid expense |
| 2,544 | |||||
Total current assets |
| 20,016 | |||||
Fixed assets, net | 1,870 | ||||||
Website development, net | 1,935 | ||||||
Intangible assets | 650 | ||||||
$ | 24,471 | ||||||
Liabilities and Stockholders' Equity | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 239 | |||||
Due to shareholder | 72 | ||||||
Accrued executive compensation | 9,000 | ||||||
Total current liabilities |
| 9,311 | |||||
Stockholders' equity: | |||||||
Preferred stock, $0.001 par value, 5,000,000 shares | |||||||
authorized, no shares issued and outstanding | - | ||||||
Common stock, $0.001 par value, 20,000,000 shares | |||||||
authorized, 7,112,018 shares issued and outstanding | 7,112 | ||||||
Additional paid-in capital | 160,729 | ||||||
(Deficit) accumulated during development stage |
| (152,681) | |||||
| 15,160 | ||||||
$ | 24,471 | ||||||
The accompanying notes are an integral part of these financial statements.
F1
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Originally New York, Inc. | |||||||||||||||||||
(a Development Stage Company) | |||||||||||||||||||
Statements of Operations | |||||||||||||||||||
(unaudited) | |||||||||||||||||||
Three Months Ending | Six Months Ending | March 12, 2001 | |||||||||||||||||
June 30, | June 30, | (Inception) to | |||||||||||||||||
| 2004 |
| 2003 | 2004 | 2003 | June 30, 2004 | |||||||||||||
Revenue | $ | - | $ | - | $ | - | $ | - | $ | 246 | |||||||||
Cost of sales |
| - |
| - |
| - |
| - |
| 173 | |||||||||
Gross profit |
| - |
| - |
| - |
| - |
| 73 | |||||||||
Expenses: | |||||||||||||||||||
General and administrative expenses | 4,261 | 5,504 | 9,915 | 10,957 | 83,433 | ||||||||||||||
Commission expense | - | - | - | - | 9,294 | ||||||||||||||
Consulting expense - related party | 15,000 | 6,000 | 15,000 | 12,000 | 44,250 | ||||||||||||||
Executive compensation | 1,800 | 1,800 | 3,600 | 3,600 | 12,000 | ||||||||||||||
Depreciation and amortization | 379 | 348 | 758 | 674 | 3,777 | ||||||||||||||
Total expenses |
| 21,440 |
| 13,652 |
| 29,273 |
| 27,231 |
| 152,754 | |||||||||
Net (loss) | $ | (21,440) | $ | (13,652) | $ | (29,273) | $ | (27,231) | $ | (152,681) | |||||||||
Weighted average number of | |||||||||||||||||||
common shares outstanding - basic and fully diluted |
| 7,112,018 |
| 7,112,018 |
| 7,112,018 |
| 7,112,018 | |||||||||||
Net (loss) per share - basic & fully diluted | $ | (0.00) | $ | (0.00) | $ | (0.00) | $ | (0.00) | |||||||||||
The accompanying notes are an integral part of these financial statements.
F2
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Originally New York, Inc. | |||||||||||||
(a Development Stage Company) | |||||||||||||
Statements of Cash Flows | |||||||||||||
(unaudited) | |||||||||||||
Three months ended | March 12, 2001 | ||||||||||||
June 30, | (Inception) to | ||||||||||||
2004 | 2003 | June 30, 2004 | |||||||||||
Cash flows from operating activities | |||||||||||||
Net (loss) | $ | (29,273) | $ | (27,231) | $ | (152,681) | |||||||
Adjustments to reconcile net (loss) to | |||||||||||||
net cash (used) by operating activities: | |||||||||||||
Shares issued for services | - | - | 5,250 | ||||||||||
Depreciation and amortization | 758 | 674 | 3,777 | ||||||||||
Changes in operating assets and liabilities: | |||||||||||||
Decrease (increase) in inventory | 283 | (391) | (1,431) | ||||||||||
(Increase) in prepaid expense | - | (3,099) | (2,544) | ||||||||||
Increase in accounts payable | 239 | - | 239 | ||||||||||
Net cash (used) by operating activities |
| (27,993) |
| (30,047) |
| (147,390) | |||||||
Cash flows from investing activities | |||||||||||||
Purchase of fixed assets | - | (656) | (3,282) | ||||||||||
Website development | - | - | (4,300) | ||||||||||
Intangible assets | - | - | (650) | ||||||||||
Net cash (used) by investing activities |
| - |
| (656) |
| (8,232) | |||||||
Cash flows from financing activities | |||||||||||||
Issuances of common stock | - | - | 147,591 | ||||||||||
Increase in donated capital | 15,000 | - | 15,000 | ||||||||||
Increase in due to shareholder | - | - | 72 | ||||||||||
Increase in accured executive compensation |
| 3,600 |
| 1,800 |
| 9,000 | |||||||
Net cash provided by financing activities |
| 18,600 |
| 1,800 |
| 171,663 | |||||||
Net increase (decrease) in cash | (9,393) | (28,903) | 16,041 | ||||||||||
Cash - beginning |
| 25,434 |
| 63,412 |
| - | |||||||
Cash - ending | $ | 16,041 | $ | 34,509 | $ | 16,041 | |||||||
Supplemental disclosures: | |||||||||||||
Interest paid | $ | - | $ | - | $ | - | |||||||
Income taxes paid | $ | - | $ | - | $ | - | |||||||
The accompanying notes are an integral part of these financial statements.
F3
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Originally New York, Inc.
(a Development Stage Company)
Notes
Note 1 - Basis of presentation
The interim financial statements included herein, presented in accordance with United States generally accepted accounting principles and stated in US dollars, have been prepared by the Company, 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 generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures are adequate to make the information presented not misleading.
These statements reflect all adjustments, consisting of normal recurring adjustments, which, in the opinion of management, are necessary for fair presentation of the information contained therein. It is suggested that these interim financial statements be read in conjunction with the financial statements of the Company for the year ended December 31, 2003 and notes thereto included in the Company's Form 10-KSB. The Company follows the same accounting policies in the preparation of interim reports.
Results of operations for the interim periods are not indicative of annual results.
Note 2 - Going concern
The Company's financial statements are prepared using the generally accepted accounting principles applicable to a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. However, the Company has not commenced its planned principal operations and it has generated minimal revenues. The future of the Company is dependent upon its ability to obtain financing and upon future profitable operations from the development of its new business opportunities. Management plans to raise additional capital via an equity offering and an officer of the Company has agreed to loan the Company funds as needed to sustain business for a period of twelve months. However, the Company is dependent upon its ability to secure equity and/or debt financing and there are no assurances that the Company will be successful, without sufficient financing it would be unlikely for the Company to continue as a going concern.
These conditions raise substantial doubt about the Company's ability to continue as a going concern. These financial statements do not include any adjustments that might arise from this uncertainty.
Note 3 - Prepaid expenses
During the six month period ended June 30, 2004, the Company had $2,544 in prepaid expenses which were from a retainer for legal expenses as related to securing trademarks for the Company. During the six months ended June 30, 2004, the Company amortized $0 in legal fees.
Note 4 - Fixed assets
Fixed assets as of June 30, 2004 consisted of the following:
Computer equipment | $ 2,782 | |
Office equipment | 500 | |
Accumulated depreciation | (1,412) | |
$ 1,870 |
During the six months ended June 30, 2004, the Company recorded depreciation expense of $328.
F4
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Originally New York, Inc.
(a Development Stage Company)
Notes
Note 5 - Website development costs
Website development costs as of June 30, 2004 consisted of the following:
Website costs | $ 4,300 | |
Accumulated amortization | (2,365) | |
$ 1,935 |
During the six months ended June 30, 2004, the Company has recorded amortization expense in the amount of $430.
Note 6 - Intangible assets
The Company did not incur any additional costs in trademark application fees during the period ended June 30, 2004 and has recorded no amortization for the period ended. The Company will begin amortization upon completion of the process of applying for multiple trademarks.
Note 7 - Warrants and options
On June 30, 2002, the Company issued 132,273 warrants to purchase the Company's $0.001 par value common stock on a one-for-one basis. The warrant exercise price is $0.077 per share of common stock and substantially all warrants will expire on or before June 30, 2005. During the six-month period ended June 30, 2004, no warrants have been exercised.
Note 8 - Related party transactions
As of June 30, 2004, a shareholder, officer and director of the Company paid for various expenses of the Company and he is currently owed $72. The total amount due to the individual is a loan that bears zero interest and is due on demand.
On July 1, 2002, the Company hired a shareholder on a month-to-month basis to perform various consulting services at a monthly rate of $2,000. During the six months ended June 30, 2004, the Company paid this shareholder a total of $0.
On November 1, 2002, the Company agreed to compensate the president on a month-to-month basis to perform various administrative services at a monthly rate of $600. During the six months ended June 30, 2004, the Company paid this shareholder a total of $0 and had accrued executive compensation of $3,600. As of June 30, 2004, the accrued executive compensation was $9,000.
During the six month period ended June 30, 2004, the Company paid a total of $15,000 to three of the Company's directors for services rendered.
F5
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Item 2. Management's Discussion and Plan of Operation
Forward-Looking Statements
This Quarterly Report contains forward-looking statements about Originally New York, Inc.'s business, financial condition and prospects that reflect management’s assumptions and beliefs based on information currently available. We can give no assurance that the expectations indicated by such forward-looking statements will be realized. If any of our management’s assumptions should prove incorrect, or if any of the risks and uncertainties underlying such expectations should materialize, ONY’s actual results may differ materially from those indicated by the forward-looking statements.
The key factors that are not within our control and that may have a direct bearing on operating results include, but are not limited to, acceptance of our services, our ability to expand our customer base, managements’ ability to raise capital in the future, the retention of key employees and changes in the regulation of our industry.
There may be other risks and circumstances that management may be unable to predict. When used in this Quarterly Report, words such as, "believes," "expects," "intends," "plans," "anticipates," "estimates"and similar expressions are intended to identify forward-looking statements, although there may be certain forward-looking statements not accompanied by such expressions.
Plan of Operation
We were incorporated in the State of Nevada on March 12, 2001, under the name Originally New York, Inc. We market a proprietary line of sports and athletic garments bearing our logo or a unique City of New York Public School designation. For example, we sell pre-shrunk cotton t-shirts with the “P.S 64, Bronx, N.Y.” embroidered logo, wrist watches with our company name on the faceplate and hats with our abbreviated company name embroidered on it. We currently have ten different items for sale on our web site. Since our inception on March 12, 2001, we have generated $246 in revenue from sales of our products and incurred expenses in the amount of $152,754.
We have entered into a verbal understanding with Norman Silverman, Inc., to distribute wrist-watches that display our name on the faceplate, which he produces for us. Under this arrangement we market these watches on our web site. For each watch that sold through our web site, we earn a sales commission.
Peter Young & Associates manufactures our logoed apparel on a purchase order basis. As we require merchandise, we will place a one-time order with that company. We have no agreements with Peter Young & Associates to manufacture any product on an extended basis.
Since our inception, we have devoted our activities to the following:
1.
Formation of the Company and obtaining start-up capital,
2.
Developing our products and graphic designs,
3.
Establishing and reworking our web site,
4.
Seeking protection for our intellectual property and
5.
Organizing our production and fulfillment capabilities.
We have established our web site, developed various designs and logos for use on our merchandise and obtained working capital through sales of our equity securities. Our website, www.originallynewyork.com, serves as the core of our revenue generating operations. All of our revenues to date have been generated from sales through this Internet site. We continuously evaluate possibilities to develop, refine or rework our web site to attempt to generate increased traffic and resultant sales. The development, refinement and working of our web site is being contracted to third party web designers, who also provide marketing assistance and web hosting services. We expect to incur fees for the continuous refinement of our web site, which fees are determined solely by our web designers.
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Our current revenues are significantly dependent upon sales of our proprietary products. To alleviate our dependence upon sales of our products, we entered into an affiliate program, whereby we would earn a fee from sales derived from customers who link to the affiliate’s site. We have since terminated our participation in this affiliate program due to a lack of success in this venture. The affiliate program did not cost us anything to participate. We have not experienced any revenues through this affiliate program.
To further diversify our revenue generating capacity, we intend to contract independent sales representatives to sell our merchandise directly to retail stores. These representatives will be paid on a commission basis and will not be paid a salary, thus our cash on hand will not be affected. However, we have not engaged such individuals as of the date of this registration statement. We will continue to attempt to engage agents to sell our products by contacting acquaintances and associates of our officers and directors. However, we cannot assure you that we will be able to entice such persons to work with us in the future.
Our management does not anticipate the need to hire additional full- or part- time employees over the next 12 months, as the services provided by our officers and directors appear sufficient at this time. We believe that our operations are currently on a small scale that is manageable by a few individuals. We outsource for the manufacture of our products, as well as the hosting and maintenance of our web site, thus our responsibilities are related predominantly to graphic design and administrative duties. Additionally, our marketing and advertising efforts are mainly conducted via the Internet, and can be designed by our current staff or our third-party Internet services firm. While we believe that the addition of employees is not required over the next 12 months, we intend to contract sales representatives to market our products for us on an in dependent contractor basis. These representatives are not intended to be employees of our company.
We currently do not own any significant plant or equipment that we would seek to sell in the near future.
We have not paid for expenses on behalf of any of our directors. Additionally, we believe that this fact shall not materially change.
As of June 30, 2004, we had $16,041 of cash on hand and $1,431 in inventory. Our current assets are sufficient to meet our current liabilities of $9,311. Our management believes that current cash resources are sufficient to satisfy our cash requirements over the next 12 months. However, our independent auditors have expressed substantial doubt about our ability to continue as a going concern because we have limited operations and have not commenced planned principal operations. If our costs of operations increase unexpectedly, we may need to raise additional capital by issuing equity or debt securities in exchange for cash. Notwithstanding this, there can be no assurance that we will be able to secure additional funds in the future to stay in business.
On April 27, 2004, Len Luner entered into a private sales transaction for the sale common stock of the registrant as held by Mr. Luner,. (the "Agreement"),. This transaction is more fully described in Exhibit 10.1, filed with Form 8-K on May 13, 2004.
Under the terms of the Agreement, Mr. Luner sold 5,000,000 shares of common stock of the Registrant to Shawn Wright, an individual, in accordance with Rule 144. Mr. Luner shall remain as President and CEO of the Registrant.
Taking into account the consummation of this Agreement the following table reflects the present beneficial ownership of the Company as affected by this transaction.
Name of Beneficial Owner | No. Shares (Common) | Percent of Class |
Shawn Wright | 5,000,000 | 86.37% |
Total | 5,789,286 | 100% |
The address of each beneficial owner is the Company's Corporate Address
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Item 3. Controls and Procedures
Within 90 days prior to the date of filing of this report, we carried out an evaluation, under the supervision and with the participation of our management, including the Chief Executive Officer and our Chief Financial Officer, of the design and operation of our disclosure controls and procedures. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures are effective for gathering, analyzing and disclosing the information we are required to disclose in the reports we file under the Securities Exchange Act of 1934, within the time periods specified in the SEC’s rules and forms. There have been no significant changes in our internal controls or in other factors that could significantly affect internal controls subsequent to the date of this evaluation.
PART II - OTHER INFORMATION
Item 6. Exhibits
Exhibit Number | Name and/or Identification of Exhibit |
3 | Articles of Incorporation & By-Laws |
(a) Articles of Incorporation (1) | |
(b) By-Laws (1) | |
31 | Rule 13a-14(a)/15d-14(a) Certifications |
(a) Leonard H. Luner | |
32 | Certification under Section 906 of the Sarbanes-Oxley Act (18 U.S.C. Section 1350) |
(1) Incorporated by reference to the exhibits to the Company's General Form for Registration of Securities of Small Business Issuers on Form 10-SB, filed on September 26, 2002.
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SIGNATURES
Pursuant to the requirements of the Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
ORIGINALLY NEW YORK, INC. |
(Registrant) |
| Date: August 24, 2004 |
By:/s/ Leonard H. Luner |
Leonard H. Luner CEO and CFO |
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