UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
xQUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended: June 30, 2009
oTRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
| For the transition period from ________________ to __________________ |
| Commission File Number: 333-151517 |
TEEN GLOW MAKEUP, INC.
(Exact name of registrant as specified in its charter)
| (State of or other jurisdiction of incorporation or organization) | (IRS Employer Identification No.) |
| 112 North Curry Street, Carson City | 89703 |
| (Address of principal executive offices) | (Zip Code) |
702 508-4501
(Registrant’s telephone number, including area code)
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.
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.
Large accelerated filer o | Accelerated filer [ | ] |
Non-accelerated filer [ | ] (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). |
Indicate the number of shares outstanding of each of the issuer’s classes of common equity, as of the latest practicable date: As of June 30, 2009 the registrant had 8,627,000 shares of common stock, $0.001 par value, issued and outstanding.
Index
| Page Number |
PART I – FINANCIAL INFORMATION | |
Item 1. Financial Statements | 3 |
Item 2. Management`s Discussion and Analysis of Financial Condition and Results of Operations | 14 |
Item 3. Quantitative and Qualitative Disclosures About Market Risk | 15 |
Item 4. Controls and Procedures | 15 |
| |
PART II – OTHER INFORMATION | |
Item 1. Legal Proceedings | 17 |
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds | 17 |
Item 3. Defaults Upon Senior Securities | 17 |
Item 4. Submission of Matters to a Vote of Security Holders | 17 |
Item 5. Other Information | 17 |
Item 6. Exhibits | 17 |
TEEN GLOW MAKEUP, INC.
(A Development Stage Enterprise)
FINANCIAL STATEMENTS
JUNE 30, 2009
TEEN GLOW MAKEUP, INC.
(A Development Stage Enterprise)
BALANCE SHEETS
| June 30, 2009 (Unaudited) | September 30, 2008 (Audited) |
| | |
ASSETS | | |
| | |
CURRENT ASSETS | | |
Cash | $ 135 | $ 5,346 |
Total current assets | 135 | 5,346 |
| | |
Total assets | $ 135 | $ 5,346 |
| | |
LIABILITIES AND STOCKHOLDERS’ DEFICIT | | |
| | |
CURRENT LIABILITIES | | |
Accounts payable and accrued liabilities | $ 10,500 | $ 7,000 |
Due to related party | 8,451 | 1,525 |
Total current liabilities | 18,951 | 8,525 |
| | |
Total liabilities | 18,951 | 8,525 |
| | |
STOCKHOLDERS’ DEFICIT | | |
Common stock, $0.001 par value, | | |
Authorized 75,000,000 shares of common stock, | | |
Issued and outstanding 8,627,000 shares of common stock | 8,627 | 8,627 |
Additional paid-in capital | 3,683 | 3,683 |
Deficit accumulated during the development stage | (31,126) | (15,489) |
Total stockholders’ deficit | (18,816) | (3,179) |
| | |
Total liabilities and stockholders’ deficit | $ 135 | $ 5,346 |
The accompanying notes are an integral part of these financial statements
TEEN GLOW MAKEUP, INC.
(A Development Stage Enterprise)
STATEMENTS OF OPERATIONS
(Unaudited)
| For the three months ended June 30, 2009 | For the three months ended June 30, 2008 | For the nine months ended June 30, 2009 | For the nine months ended June 30, 2008 | From inception (August 7, 2007) through June 30, 2009 |
| | | | | |
REVENUE | $ - | $ - | $ - | $ - | $ - |
| | | | | |
EXPENSES | | | | | |
General and administrative | 11 | (2,494) | (54) | (2,494) | (4,042) |
Professional fees | (3,375) | (4,356) | (15,583) | (7,356) | (27,084) |
| | | | | |
NET LOSS | $ (3,365) | $ (6,850) | $ (15,637) | $ (9,850) | $ (31,126) |
| | | | |
BASIC NET LOSS PER SHARE | $ (0.00) | $ (0.00) | $ (0.00) | $ (0.00) |
| | | | |
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING | 8,627,000 | 8,500,000 | 8,466,957 | 8,627,000 |
The accompanying notes are an integral part of these financial statements
TEEN GLOW MAKEUP, INC.
(A Development Stage Enterprise)
STATEMENT OF STOCKHOLDERS’ DEFICIT
FROM INCEPTION (AUGUST 7, 2007) TO JUNE 30, 2009
| Common Stock | | | Deficit Accumulated | |
Number of shares | Amount | Additional Paid-in Capital | Subscription Receivable | During Development Stage | Total stockholders’ deficit |
| | | | | | |
Balance, August 7, 2007 (Inception) | - | $ - | $ - | $ - | $ - | $ - |
| | | | | | |
Common stock issued for cash at $0.001 | | | | | | |
per share August 13, 2007 | 8,500,000 | 8,500 | - | - | - | 8,500 |
| | | | | | |
Subscription receivable | - | - | - | (8,500) | - | (8,500) |
| | | | | | |
Net loss | - | - | - | - | (2,525) | (2,525) |
| | | | | | |
Balance, September 30, 2007 | 8,500,000 | 8,500 | - | (8,500) | (2,525) | (2,525) |
| | | | | | |
Subscription received | - | - | - | 8,500 | - | 8,500 |
| | | | | | |
Common stock issued for cash at $0.03 per share July & August 2008 | 127,000 | 127 | 3,683 | - | - | 3,810 |
Net loss | - | - | - | - | (12,964) | (12,964) |
| | | | | | |
Balance, September 30, 2008 | 8,627,000 | 8,627 | 3,683 | - | (15,489) | (3,179) |
Net loss | - | - | - | - | (15,637) | (15,637) |
| | | | | | |
Balance, June 30, 2009 (Unaudited) | 8,627,000 | $ 8,627 | $ 3,683 | $ - | $ (31,126) | $ (18,816) |
| | | | | | | | | |
The accompanying notes are an integral part of these financial statements
TEEN GLOW MAKEUP, INC.
(A Development Stage Enterprise)
STATEMENTS OF CASH FLOWS
(Unaudited)
| For the nine months ended June 30, 2009 | For the nine months ended June 30, 2008 | From inception (August 7, 2007) through June 30, 2009 |
| | | |
| | | |
CASH FLOWS FROM OPERATING ACTIVITIES | | | |
Net loss | $ (15,637) | $ (9,850) | $ (31,126) |
Change in operating assets and liabilities | | | |
Increase in accrued expenses | 3,500 | 2,500 | 10,500 |
| | | |
NET CASH USED IN OPERATING ACTIVITIES | (12,137) | (7,350) | (20,626) |
| | | |
CASH FLOWS FROM FINANCING ACTIVITIES | | | |
Increase in due to related party | 6,926 | - | 8,451 |
Proceeds from sale of common stock | - | 8,500 | 12,310 |
| | | |
NET CASH PROVIDED BY FINANCING ACTIVITIES | 6,926 | 8,500 | 20,761 |
| | | |
NET INCREASE (DECREASE) IN CASH | (5,211) | 1,150 | 135 |
| | | |
CASH, BEGINNING OF PERIOD | 5,346 | - | - |
| | | |
CASH, END OF PERIOD | $ 135 | $ 1,150 | $ 135 |
| | | |
| | | |
Supplemental cash flow information:
Cash paid for:
The accompanying notes are an integral part of these financial statements
TEEN GLOW MAKEUP, INC.
(A Development Stage Enterprise)
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2009
(Unaudited)
NOTE 1 – NATURE OF OPERATIONS AND BASIS OF PRESENTATION
Teen Glow Makeup, Inc. (“Company”) is in the initial development stage and has incurred losses since inception totalling $31,126. The Company was incorporated on August 7, 2007 in the State of Nevada and established a fiscal year end of September 30. The Company is a development stage enterprise organized to create the ideal line of cosmetics for teenagers. The Company is currently in the development stage as defined in SFAS No. 7. All activities of the Company to date relate to its organization, initial funding and share issuances.
The accompanying unaudited financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions for Form 10-Q and Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments considered necessary for a fair presentation have been included. All such adjustments are of a normal recurring nature. Operating results for the three month period ended June 30, 2009, are not necessarily indicative of the results that may be expected for the fiscal year ending September 30, 2009. For further information refer to the financial statements and footnotes thereto included in the Company’s Annual Report on Form 10-K for the year ended September 30, 2008.
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The financial statements present the balance sheet, statements of operations, stockholders’ deficit and cash flows of the Company. These financial statements are presented in United States dollars and have been prepared in accordance with accounting principles generally accepted in the United States.
Going Concern
The Company’s financial statements are prepared in accordance with generally accepted accounting principles applicable to a going concern. This contemplates the realization of assets and the liquidation of liabilities in the normal course of business. Currently, the Company does not have cash nor material assets, nor does it have operations or a source of revenue sufficient to cover its operation costs and allow it to continue as a going concern. The Company has a deficit accumulated since inception (August 7, 2007) through June 30, 2009, of ($31,126).The Company will be dependent upon the raising of additional capital through placement of our common stock in order to implement its business plan, or merge with an operating company. There can be no assurance that the Company will be successful in either situation in order to continue as a going concern. The Company is funding its initial operations by way of issuing Founder’s shares. As of June 30, 2009, the Company had issued 8,627,000, of which 8,500,000 were Founder’s shares sold at $0.001 per share and 127,000 shares were issued at $0.03 for net funds to the Company of $12,310.
The officers and directors have committed to advancing certain operating costs of the Company.
TEEN GLOW MAKEUP, INC.
(A Development Stage Enterprise)
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2009
(Unaudited)
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Use of Estimates and Assumptions
Preparation of the financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates.
Income Taxes
The Company follows the liability method of accounting for income taxes in accordance with Statements of Financial Accounting Standards (“SFAS”) No.109, “Accounting for Income Taxes” and clarified by FIN 48 “Accounting for Uncertainty in Income Taxes – an interpretation of FASB Statement No. 109.” Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax balances. Deferred tax assets and liabilities are measured using enacted or substantially enacted tax rates expected to apply to the taxable income in the years in which those differences are expected to be recovered or settled. 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. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the date of enactment or substantive enactment.
Net Loss per Share
Basic loss per share includes no dilution and is computed by dividing loss available to common stockholders by the weighted average number of common shares outstanding for the period. Dilutive loss per share reflects the potential dilution of securities that could share in the losses of the Company. Because the Company does not have any potentially dilutive securities, the accompanying presentation is only of basic loss per share.
Foreign Currency Translation
The financial statements are presented in United States dollars. In accordance with SFAS No. 52, "Foreign Currency Translation", foreign denominated monetary assets and liabilities are translated to their United States dollar equivalents using foreign exchange rates which prevailed at the balance sheet date. Non-monetary assets and liabilities are translated at exchange rates prevailing at the transaction date. Revenue and expenses are translated at average rates of exchange during the periods presented. Related translation adjustments are reported as a separate component of stockholders’ equity (deficit), whereas gains or losses resulting from foreign currency transactions are included in results of operations.
Stock-based Compensation
The Company has not adopted a stock option plan and has not granted any stock options. Accordingly, no stock-based compensation has been recorded to date.
TEEN GLOW MAKEUP, INC.
(A Development Stage Enterprise)
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2009
(Unaudited)
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Share Based Expenses
In December 2004, the Financial Accounting Standards Board (“FASB”) issued SFAS No. 123R, “Share Based Payment.” This statement is a revision to SFAS 123 and supersedes Accounting Principles Board (APB) Opinion No. 25, “Accounting for Stock Issued to Employees,” and amends FASB Statement No. 95, “Statement of Cash Flows.” This statement requires a public entity to expense the cost of employee services received in exchange for an award of equity instruments. This statement also provides guidance on valuing and expensing these awards, as well as disclosure requirements of these equity arrangements. The Company adopted SFAS No. 123R upon creation of the company and expenses share based costs in the period incurred.
Fair value of Financial Instruments
In accordance with the requirements of SFAS No. 107 and SFAS No. 157, the Company has determined the estimated fair value of financial instruments using available market information and appropriate valuation methodologies. The fair value of financial instruments classified as current assets or liabilities approximate their carrying value due to the short-term maturity of the instruments.
Recent Accounting Pronouncements
In May 2008, the Financial Accounting Standards Board (“FASB”) issued SFAS No. 163, “Accounting for Financial Guarantee Insurance Contracts-an interpretation of FASB Statement No. 60”. SFAS No. 163 clarifies how Statement 60 applies to financial guarantee insurance contracts, including the recognition and measurement of premium revenue and claims liabilities. This statement also requires expanded disclosures about financial guarantee insurance contracts. SFAS No. 163 is effective for fiscal years beginning on or after December 15, 2008, and interim periods within those years. SFAS No. 163 is not expected to have an effect on the Company’s financial position, statements of operations, or cash flows.
In March 2008, the Financial Accounting Standards Board, or FASB, issued SFAS No. 161, “Disclosures about Derivative Instruments and Hedging Activities—an amendment of FASB Statement No. 133.” This standard requires companies to provide enhanced disclosures about (a) how and why an entity uses derivative instruments, (b) how derivative instruments and related hedged items are accounted for under Statement 133 and its related interpretations, and (c) how derivative instruments and related hedged items affect an entity’s financial position, financial performance, and cash flows. This Statement is effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008, with early application encouraged. The Company has not yet adopted the provisions of SFAS No. 161, but does not expect it to have a material impact on its financial position, results of operations or cash flows.
In December 2007, the SEC issued Staff Accounting Bulletin (SAB) No. 110 regarding the use of a "simplified" method, as discussed in SAB No. 107 (SAB 107), in developing an estimate of expected term of "plain vanilla" share options in accordance with SFAS No. 123 (R), Share-Based Payment. In particular, the staff indicated in SAB 107 that it will accept a company's election to use the simplified method, regardless of whether the company has sufficient information to make more refined estimates of expected term. At the time SAB 107 was issued, the staff believed that more detailed external information about employee exercise behaviour (e.g., employee exercise patterns by industry and/or other categories of
TEEN GLOW MAKEUP, INC.
(A Development Stage Enterprise)
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2009
(Unaudited)
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
companies) would, over time, become readily available to companies. Therefore, the staff stated in SAB 107 that it would not expect a company to use the simplified method for share option grants after December 31, 2007. The staff understands that such detailed information about employee exercise behaviour may not be widely available by December 31, 2007. Accordingly, the staff will continue to accept, under certain circumstances, the use of the simplified method beyond December 31, 2007. The Company currently uses the simplified method for “plain vanilla” share options and warrants, and will assess the impact of SAB 110 for fiscal year 2009. It is not believed that this will have an impact on the Company’s financial position, results of operations or cash flows.
In December 2007, the FASB issued SFAS No. 160, “Non-controlling Interests in Consolidated Financial Statements—an amendment of ARB No. 51.” This statement amends ARB 51 to establish accounting and reporting standards for the non-controlling interest in a subsidiary and for the deconsolidation of a subsidiary. It clarifies that a non-controlling interest in a subsidiary is an ownership interest in the consolidated entity that should be reported as equity in the consolidated financial statements. Before this statement was issued, limited guidance existed for reporting non-controlling interests. As a result, considerable diversity in practice existed. So-called minority interests were reported in the consolidated statement of financial position as liabilities or in the mezzanine section between liabilities and equity. This statement improves comparability by eliminating that diversity. This statement is effective for fiscal years, and interim periods within those fiscal years, beginning on or after December 15, 2008 (that is, January 1, 2009, for entities with calendar year-ends). Earlier adoption is prohibited. The effective date of this statement is the same as that of the related Statement 141 (revised 2007). The Company will adopt this Statement beginning October 1, 2009. It is not believed that this will have an impact on the Company’s consolidated financial position, results of operations or cash flows.
In December 2007, the FASB, issued FAS No. 141 (revised 2007), “Business Combinations.” This Statement replaces FASB Statement No. 141, “Business Combinations”, but retains the fundamental requirements in Statement 141. This Statement establishes principles and requirements for how the acquirer: (a) recognizes and measures in its financial statements the identifiable assets acquired, the liabilities assumed, and any non-controlling interest in the acquire; (b) recognizes and measures the goodwill acquired in the business combination or a gain from a bargain purchase; and (c) determines what information to disclose to enable users of the financial statements to evaluate the nature and financial effects of the business combination. This statement applies prospectively to business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2008. An entity may not apply it before that date. The effective date of this statement is the same as that of the related FASB Statement No. 160, “Non-controlling Interests in Consolidated Financial Statements.” The Company will adopt this statement beginning October 1, 2009. It is not believed that this will have an impact on the Company’s financial position, results of operations or cash flows. In May 2009, the FASB issued SFAS No. 165, Subsequent Events (“SFAS 165”). SFAS 165 provides authoritative accounting literature related to evaluating subsequent events that was previously addressed only in the auditing literature, and is largely similar to the current guidance in the auditing
TEEN GLOW MAKEUP, INC.
(A Development Stage Enterprise)
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2009
(Unaudited)
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
literature with some exceptions that are not intended to result in significant changes in practice. SFAS 165 defines subsequent events and also requires the disclosure of the date through which an entity has evaluated subsequent events and the basis for that date. SFAS 165 is effective on a prospective basis for interim or annual financial periods ending after June 15, 2009. We plan to adopt SFAS 165 in the fourth quarter of Fiscal 2009 and do not expect it to have a material impact on our financial statements.
In June 2009 the FASB issued two statements that amended the guidance for off-balance-sheet accounting of financial instruments: SFAS No. 166, Accounting for Transfers of Financial Assets, and SFAS No. 167, Amendments to FASB Interpretation No. 46(R).
SFAS No. 166, Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities (“SFAS 166”), revises SFAS No. 140 and will require entities to provide more information about sales of securitized financial assets and similar transactions, particularly if the seller retains some risk to the assets, the FASB said. The statement eliminates the concept of a qualifying special-purpose entity, changes the requirements for the de-recognition of financial assets, and calls upon sellers of the assets to make additional disclosures about them.
SFAS No. 167, Consolidation of Variable Interest Entities (“SFAS 167”), which amends FASB Interpretation (FIN) No. 46(R), by altering how a company determines when an entity that is insufficiently capitalized or not controlled through voting should be consolidated, the FASB said. A company has to determine whether it should provide consolidated reporting of an entity based upon the entity's purpose and design and the parent company's ability to direct the entity's actions.
The standards will be effective at the start of the first fiscal year beginning after November 15, 2009, which will mean January 2010 for companies that are on calendar years. The guidance will have to be applied for first-quarter filings.
In June 2009, the FASB issued SFAS No. 168, The FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles (“SFAS 168”) and in doing so, authorized the Codification as the sole source for authoritative U.S. GAAP. SFAS No. 168 will be effective for financial statements issued for reporting periods that end after September 15, 2009. Once it's effective, it will supersede all accounting standards in U.S. GAAP, aside from those issued by the SEC. SFAS No. 168 replaces SFAS No. 162 to establish a new hierarchy of GAAP sources for non-governmental entities under the FASB Accounting Standards Codification.
TEEN GLOW MAKEUP, INC.
(A Development Stage Enterprise)
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2009
(Unaudited)
NOTE 3 – CAPITAL STOCK
The Company’s capitalization is 75,000,000 common shares with a par value of $0.001 per share. No preferred shares have been authorized or issued.
As of June 30, 2009, the Company has not granted any stock options and has not recorded any stock-based compensation.
On August 13, 2007, the sole Director purchased 8,500,000 shares of the common stock in the Company at $0.001 per share for $8,500. During July and August 2008, the Company sold 127,000 shares for $0.03.
NOTE 4 – RELATED PARTY TRANSACTIONS
As of June 30, 2009 and September 30, 2008, the Company received advances from a Director in the amount of $8,451 and $1,525, respectively to pay for incorporation costs and filing fees. The amounts due to the related party are unsecured, non-interest bearing, and due on demand.
Item 2. Management`s Discussion and Analysis of Financial Condition and Results of Operations
This section of this report includes a number of forward-looking statements that reflect our current views with respect to future events and financial performance. Forward looking statements are often identified by words like: believe, expect, estimate, anticipate, intend, project and similar expressions or words which, by their nature, refer to future events. You should not place undue certainty on these forward-looking statements, which apply only as of the date of this report. These forward looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from historical results or our predictions.
Teen Glow MakeUp, Inc’s ticker symbol for its common stock quoted on the Over-the-Counter Bulletin Board is “TGMP”.
Overview
Teen Glow MakeUp, Inc. ("Teen Glow MakeUp", "the Company", “our” or "we") was incorporated in the State of Nevada as a for-profit company on August 7, 2007. Teen Glow MakeUp is a development-stage company that intends to create the ideal line of teen makeup, at an affordable price, for girls ranging from 13 to 19 years old.
We plan to, initially, sell our cosmetics in gift bags using the internet, through our website and Ebay. When finances allow, we intend to advertise in the Home Shopping Channel on TV. Then, when our products get more recognition by the public, we plan to sell them through retail stores all over America.
Plan of Operation
The Company has not yet generated any revenue from its operations. As of the fiscal quarter ended June 30, 2009 we had $135 of cash on hand. We incurred operating expenses in the amount of $3,365 in the quarter ended June 30, 2009. These operating expenses were comprised of professional fees and office and general expenses.
Our current cash holdings will not satisfy our liquidity requirements and we will require additional financing to pursue our planned business activities. We have registered 4,000,000 shares of our common stock for sale to the public. Our registration statement became effective on June 27, 2008 and we are in the process of seeking equity financing to fund our operations over the next 12 months. As of June 30, 2009, we have raised $12,310 from the sales of our common stock.
Management believes that if subsequent private placements are successful, we will generate sales revenue within the following twelve months thereof. However, additional equity financing may not be available to us on acceptable terms or at all, and thus we could fail to satisfy our future cash requirements.
If Teen Glow MakeUp is unsuccessful in raising the additional proceeds through a private placement offering it will then have to seek additional funds through debt financing, which would be very difficult for a new development stage company to secure. Therefore, the company is highly dependent upon the success of the anticipated private placement offering described herein and failure thereof would result in Teen Glow MakeUp having to seek capital from other resources such as debt financing, which may not even be available to the company. However, if such financing were available, because Teen Glow MakeUp is a development stage company with no operations to date, it would likely have to pay additional costs associated with high risk loans and be subject to an above market interest rate. At such time these funds are required, management would evaluate the terms of such debt financing and determine whether the business could sustain operations and growth and manage the debt load. If Teen Glow MakeUp cannot raise additional proceeds via a private placement of its common stock or secure debt financing it would be required to cease business operations. As a result, investors in Teen Glow MakeUp common stock would lose all of their investment.
Over the 12 month period after after we have raised enough funds to start our business activities, we expect to have raised enough capital in order to successfully complete the following Plan of Operations in order to start our sales. The first stage of our operations over this period would be to travel to China in order to find the proper factory for our products and packages. Our logo may also be developed during this stage. We expect to complete this step within 120 days after the sale of our stock.
During the second stage, we intend to send our products to Lab Analysis to assure the quality and make any modifications if necessary. We expect to completely develop the products within 6 months.
The third stage consists of the development of the Company’s website with pictures of all our cosmetics. The website will allow the client to choose the color and type of cosmetic that will compose the gift bag. We expect to complete this stage within 8 months.
The fourth stage is our Marketing and Sales campaign: intensive online marketing, attendance and exposition of Cosmetics Trade Shows. We expect to be fully operational within 12 months.
We do not currently have any employees and management does not plan to hire employees at this time. We do not expect the purchase or sale of any significant equipment and have no current material commitments.
Off Balance Sheet Arrangement
The company is dependent upon the sale of its common shares to obtain the funding necessary to carry its business plan. Our President, Pamela Hutchinson, has undertaken to provide the Company with operating capital to sustain its business over the next twelve month period, as the expenses are incurred, in the form of a non-secured loan. However, there is no contract in place or written agreement securing these agreements. Investors should be aware that Mrs. Hutchinson’s expression is neither a contract nor agreement between her and the company.
Other than the above described situation the Company does not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on the Company's financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors.
Item 3. Quantitative and Qualitative Disclosures about Market Risk
Not required.
Item 4. Controls and Procedures
The management of the Company is responsible for establishing and maintaining adequate internal control over financial reporting, as required by Sarbanes-Oxley (SOX) Section 404 A. The Company’s internal control over financial reporting is a process designed under the supervision of the Company’s Chief Executive Officer and Chief Financial Officer to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the Company’s financial statements for external purposes in accordance with U.S. generally accepted accounting principles.
As of June 30, 2009, management assessed the effectiveness of the Company’s internal control over financial reporting based on the criteria for effective internal control over financial reporting established in SEC guidance on conducting such assessments. Based on that evaluation, they concluded that, during the period covered by this report, such internal controls and procedures were not effective to detect the inappropriate application of US GAAP rules as more fully described below. This was due to deficiencies that existed in the design or operation of our internal control over financial reporting that adversely affected our internal controls and that may be considered to be material weaknesses.
The matters involving internal controls and procedures that the Company’s management considered to be material weaknesses under the standards of the Public Company Accounting Oversight Board were: (1) lack of a functioning audit committee and lack of a majority of outside directors on the Company's board of directors, resulting in ineffective oversight in the establishment and monitoring of required internal controls and procedures; (2) inadequate segregation of duties consistent with control objectives; (3) insufficient written policies and procedures for accounting and financial reporting with respect to the requirements and application of US GAAP and SEC disclosure requirements; and (4) ineffective controls over period end financial disclosure and reporting processes. The aforementioned material weaknesses were identified by the Company's Chief Financial Officer in connection with the review of our financial statements as of June 30, 2009 and communicated the matters to our management.
Management believes that the material weaknesses set forth in items (2), (3) and (4) above did not affect the Company's financial results. However, management believes that the lack of a functioning audit committee and lack of a majority of outside directors on the Company's board of directors, resulting in ineffective oversight in the establishment and monitoring of required internal controls and procedures can affect the Company's results and its financial statements for the future years.
We are committed to improving our financial organization. As part of this commitment, we will create a position to segregate duties consistent with control objectives and will increase our personnel resources and technical accounting expertise within the accounting function when funds are available to the Company: i) Appointing one or more outside directors to our board of directors who shall be appointed to the audit committee of the Company resulting in a fully functioning audit committee who will undertake the oversight in the establishment and monitoring of required internal controls and procedures; and ii) Preparing and implementing sufficient written policies and checklists which will set forth procedures for accounting and financial reporting with respect to the requirements and application of US GAAP and SEC disclosure requirements.
Management believes that the appointment of one or more outside directors, who shall be appointed to a fully functioning audit committee, will remedy the lack of a functioning audit committee and a lack of a majority of outside directors on the Company's Board. In addition, management believes that preparing and implementing sufficient written policies and checklists will remedy the following material weaknesses (i) insufficient written policies and procedures for accounting and financial reporting with respect to the requirements and application of US GAAP and SEC disclosure requirements; and (ii) ineffective controls over period end financial close and reporting processes. Further, management believes that the hiring of additional personnel who have the technical expertise and knowledge will result proper segregation of duties and provide more checks and balances within the department. Additional personnel will also provide the cross training needed to support the Company if personnel turn over issues within the department occur. This coupled with the appointment of additional outside directors will greatly decrease any control and procedure issues the company may encounter in the future.
We will continue to monitor and evaluate the effectiveness of our internal controls and procedures and our internal controls over financial reporting on an ongoing basis and are committed to taking further action and implementing additional enhancements or improvements, as necessary and as funds allow.
There have been no changes in our internal control over financial reporting identified in connection with the evaluation required by paragraph (d) of Rules 13a-15 or 15d-15 under the Exchange Act that occurred during the small business issuer's last fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
The Company is not a party to any pending legal proceedings, and no such proceedings are known to be contemplated.
No director, officer, or affiliate of the issuer and no owner of record or beneficiary of more than 5% of the securities of the issuer, or any security holder is a party adverse to the small business issuer or has a material interest adverse to the small business issuer.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Item 3. Defaults Upon Senior Securities
Item 4. Submission of Matters to a Vote Security Holders
Item 5. Other Information
Item 6. Exhibits
3.1 | Articles of Incorporation [1] |
31.1 | Rule 13(a)-14(a)/15(d)-14(a) Certification of Chief Executivel Officer |
31.2 | Rule 13(a)-14(a)/15(d)-14(a) Certification of Chief Financial Officer * |
32.1 | Section 1350 Certification of Chief Executive Officer |
32.2 | Section 1350 Certification of Chief Financial Officer ** |
[1] | Incorporated by reference from the Company’s filing with the Commission on June 9, 2008. |
* | Included in Exhibit 31.1 |
** | Included in Exhibit 32.1 |
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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.
TEENGLOW MAKEUP, INC.
Pamela Hutchinson
President, Secretary Treasurer, Principal Executive Officer,
Principal Financial Officer and sole Director
/s/ Andrea Mizushima
Andrea Mizushima
Director
Dated: August 4, 2009
