MyGo Games Holding (MYGG) 10-Q 2011 Q3 Quarterly report

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 May 31, 2011

¨ 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     333-166064

Obscene Jeans Corp.

(Exact Name of Registrant as Specified in Charter)

Florida	27-1070374
(State or Other Jurisdiction of Incorporation or Organization)	(I.R.S. Employer Identification Number)

1522 Romallo Lane, Sarasota, FL 34232

(Address of Principal Executive Offices)

(941) 330-7648

(Registrant’s Telephone Number)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act 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 and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  ¨    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See definition of “accelerated filer, large accelerated filer and smaller reporting company“ in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer	¨	Accelerated filer	¨
Non-accelerated filer	¨	Smaller reporting company	x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ¨    No  x

There were 13,000,000 shares of the Registrant's common stock, $0.0001 par value outstanding as of June 30, 2011

Obscene Jeans Corp.

(A Development Stage Company)

Contents

Part I – Financial Information
Item 1.	Financial Statements	1
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operation	9
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	12
Item 4T.	Controls and Procedures	12
Part II – Other Information
Item 1.	Legal Proceedings	13
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	13
Item 3.	Defaults Upon Senior Securities	13
Item 4.	Removed and Reserved	13
Item 5.	Other Information	13
Item 6.	Exhibits	13
Signatures		14

PART I — FINANCIAL INFORMATION

Statements in this Quarterly Report on Form 10-Q may be “forward-looking statements.” Forward-looking statements include, but are not limited to, statements that express our intentions, beliefs, expectations, strategies, predictions or any other statements relating to our future activities or other future events or conditions. These statements are based on our current expectations, estimates and projections about our business based, in part, on assumptions made by our management. These assumptions are not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in the forward-looking statements due to numerous factors, including those risks discussed in this Quarterly Report on Form 10-Q, under “Management’s Discussion and Analysis of Financial Condition or Plan of Operation” and in other documents which we file with the Securities and Exchange Commission (“SEC”).

In addition, such statements could be affected by risks and uncertainties related to our financial condition, factors that affect our industry, market and customer acceptance, changes in technology, fluctuations in our quarterly results, our ability to continue and manage our growth, liquidity and other capital resource issues, competition, fulfillment of contractual obligations by other parties and general economic conditions. Any forward-looking statements speak only as of the date on which they are made, and we do not undertake any obligation to update any forward-looking statement to reflect events or circumstances after the date of this Form 10-Q Quarterly Report, except as required by law.

Item 1. Financial Statements

Obscene Jeans Corp.

(A Development Stage Enterprise)

Contents

Financial Statements:

Balance Sheets, as of May 31, 2011(Unaudited) and August 31, 2010 (Audited)	2
Statements of Operations, for the nine months and three months ended May 31, 2011 and 2010 and for the period from          September 21, 2009 (date of inception) through May 31, 2011 (Unaudited)	3
Statements of Changes in Stockholders’ Equity, for the period from September 21, 2009 (date of inception) through          May 31, 2011 (Unaudited)	4
Statements of Cash Flows, for the nine months ended May 31, 2011 and 2010 and for the period from September 21, 2009          (date of inception) through May 31, 2011 (Unaudited)	5
Notes to Unaudited Financial Statements	6

1

Obscene Jeans Corp.

(A Development Stage Enterprise)

Balance Sheets

	May 31, 2011 (unaudited)			August 31, 2010 (audited)
Assets
Current assets:
Cash	$	80,116		$	41,761
Prepaid expenses		3,753			9,167
Total current assets		83,869			50,928
Total assets	$	83,869		$	50,928
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	41,466		$	10,000
Advances payable		292,188			—
Total current liabilities		333,654			10,000
Stockholders’ equity:
Preferred stock; $0.0001 par value; 10,000,000 shares authorized; 0 shares issued and outstanding		—			—
Common stock; $0.0001 par value; 100,000,000 shares authorized; 13,000,000 and 12,000,000 shares issued and outstanding, respectively		1,300			1,200
Additional paid in capital		110,200			60,300
Deficit accumulated during development stage		(361,285	)		(20,572	)
Total stockholders’ equity		(249,785	)		40,928
Total liabilities and stockholders’ equity	$	83,869		$	50,928

The accompanying notes are an integral part of these financial statements.

2

Obscene Jeans Corp.

(A Development Stage Enterprise)

Statements of Operations

(Unaudited)

	Nine months ended May 31,						Three months ended May 31,						Period from September 21, 2009 (Date of Inception) through May 31,
	2011			2010			2011			2010			2011
Expenses:
Selling, general and administrative	$	340,713		$	7,828		$	172,386		$	7,828		$	361,285
Net loss	$	(340,713	)	$	(7,828	)	$	(172,386	)	$	(7,828	)	$	(361,285	)
Net loss per share	$	(0.03	)	$	(0.00	)	$	(0.01	)	$	(0.00	)
Weighted average number of common shares outstanding		12,597,070			9,000,000			13,771,739			9,000,000

The accompanying notes are an integral part of these financial statements.

3

Obscene Jeans Corp.

(A Development Stage Enterprise)

Statement of Changes in Stockholders’ Equity

For the Period from September 21, 2009 (Date of Inception) through May 31, 2011

(Unaudited)

	Common Stock
	Shares	Amount		Additional Paid-in Capital		Accumulated Deficit			Total
Balance, September 21, 2009, Date of Inception	—	$	—	$	—	$	—		$	—
Issuance of common stock for cash, September 2009, $0.0001 per share	9,000,000		900		8,100		—			9,000
Issuance of common stock for cash, August 2010, $0.0175 per share	3,000,000		300		52,200		—			52,500
Net loss for the period	—		—		—		(20,572	)		(20,572	)
Balance, August 31, 2010	12,000,000	$	1,200	$	60,300	$	(20,572	)	$	40,928
Issuance of common stock for services, December 2010, $0.05 per share	1,000,000		100		49,900		—			50,000
Net loss for the nine months ended May 31, 2011 (unaudited)	—		—		—		(340,713	)		(340,713	)
Balance, May 31, 2011 (unaudited)	13,000,000	$	1,300	$	110,200	$	(361,285	)	$	(249,785	)

The accompanying notes are an integral part of these financial statements

4

Obscene Jeans Corp.

(A Development Stage Enterprise)

Statements of Cash Flows

(Unaudited)

	Nine Months Ended May 31, 2011			Period from September 21, 2009 (date of inception) through May 31, 2010			Period from September 21, 2009 (date of inception) through May 31, 2011
OPERATING ACTIVITIES:
Net loss	$	(340,713	)	$	(7,828	)	$	(361,285	)
Adjustments to reconcile net loss to net cash used in operating activities:
Common stock issued for services		50,000			—			50,000
Changes in operating assets and liabilities:
Prepaid expenses		5,414			—			(3,753	)
Accounts payable		31,466			—			41,466
Net cash used by operating activities		(253,833	)		—			(273,572	)
FINANCING ACTIVITIES:
Proceeds from advances		292,188			—			292,188
Proceeds from issuance of common stock		—			9,000			61,500
Net cash provided by financing activities		292,188			9,000			353,688
NET (DECREASE) INCREASE IN CASH		38,355	)		1,172			80,116
CASH, BEGINNING OF PERIOD		41,761			—			—
CASH, END OF PERIOD	$	80,116		$	1,172		$	80,116
Cash paid during the period for:
Interest	$	—		$	—		$	—
Taxes	$	—		$	—		$	—
Common stock issued for services	$	50,000		$	—		$	—

The accompanying notes are an integral part of these financial statements.

5

Obscene Jeans Corp.

(A Development Stage Corporation)

Notes to Unaudited Financial Statements

1. Background Information

Obscene Jeans Corp. (the "Company"), a Florida corporation, was formed to design, develop, wholesale, market, distribute and sell a woman's line of apparel using the name "Obscene Brand Jeans." Designer Rachel Stark-Cappelli has created a new collection of ladies’ jeans, shorts and denim designs highlighted by shiny metallic steel mesh details woven into elegant fabrics. The new line makes its runway debut this August in Las Vegas at WWDMAGIC, one of the world’s largest international fashion trade shows.  OBJE is working to build a worldwide distribution network in order to capitalize on the rapid growth of the global luxury fashion marketplace with our innovative denim designs.

The Company was incorporated on September 21, 2009 (Date of Inception) with its corporate headquarters located in Sarasota, Florida and its year-end is August 31.

2. Financial Statements

BASIS OF PRESENTATION – The Company’s financial statements are presented in accordance with accounting principles generally accepted in the United States of America (“GAAP”).  In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the result of operations for the periods presented have been reflected herein.

INTERIM FINANCIAL STATEMENTS – These financial statements are prepared on the accrual basis of accounting in conformity with GAAP and the rules of the Securities and Exchange Commission ("SEC"), and should be read in conjunction with the audited financial statements for the period ended August 31, 2010 and notes thereto contained in the Company’s Annual Report filed with the SEC on Form 10-K on September 20, 2010. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim periods presented have been reflected herein.  The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year. Notes to the financial statements which would substantially duplicate the disclosures contained in the audited financial statements for the most recent fiscal year ended August 31, 2010, as reported in the Form 10-K filed on September 20, 2010, have been omitted.

DEVELOPMENT STAGE COMPANY – The Company is considered to be in the development stage as defined in ASC 915, “Accounting and Reporting by Development Stage Enterprises ”. The Company has devoted substantially all of its efforts to the corporate formation, the raising of capital and attempting to generate initial revenues.

USE OF ESTIMATES – The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ.

3. Going Concern

For the nine months ended May 31, 2011, the Company had a net loss of $340,713 and negative cash flow from operations of $253,833. As of May 31, 2011, the Company has negative working capital of $249,785.  The Company has not emerged from the development stage.

These factors raise a substantial doubt about the Company’s ability to continue as a going concern.  The accompanying financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classifications of liabilities that may result from the possible inability of the Company to continue as a going concern.

6

Obscene Jeans Corp.

(A Development Stage Corporation)

Notes to Unaudited Financial Statements

The Company does not have the resources at this time to repay its credit and debt obligations, make any payments in the form of dividends to its shareholders or fully implement its business plan. Without additional capital, the Company will not be able to remain in business.

Management has plans to address the Company’s financial situation as follows:

In the near term, management plans to continue to focus on raising the funds necessary to fully implement the Company’s business plan.  Management will continue to seek out debt financing to obtain the capital required to meet the Company’s financial obligations.  There is no assurance, however, that lenders will continue to advance capital to the Company or that the new business operations will be profitable.  The possibility of failure in obtaining additional funding and the potential inability to achieve profitability raise doubts about the Company’s ability to continue as a going concern.

In the long term, management believes that the Company’s projects and initiatives will be successful and will provide cash flow to the Company which will be used to finance the Company’s future growth.  However, there can be no assurances that the Company’s planned activities will be successful, or that the Company will ultimately attain profitability.  The Company’s long term viability depends on its ability to obtain adequate sources of debt or equity funding to meet current commitments and fund the continuation of its business operations, and the ability of the Company to ultimately achieve adequate profitability and cash flows from operations to sustain its operations.

4. Related Party Transactions

In September 2009, the Company sold 9,000,000 shares of common stock to Rachel Stark-Cappelli, its founder and sole director, for $0.001 per share.  On December 19, 2010, Ms. Stark-Cappelli sold the 9,000,000 shares of common stock to Kern Capital Corp, a Marshall Islands Corporation.  

The officers and directors of the Company are involved in other business activities and may, in the future, become involved in other business opportunities that become available. They may face a conflict in selecting between the Company and other business interests. The Company has not formulated a policy for the resolution of such conflicts.

5. Change in Management

On December 14, 2010, Ms. Stark-Cappelli resigned from all positions held with the Company, including resigning from Board service.  There was no disagreement between the Company and Ms. Stark-Cappelli at the time of her resignation from the Board of Directors.  Ms. Stark-Capelli is currently the Director of Operations for the Company.

Also on December 14, 2010, the Company appointed Robert Federowicz as Director, CEO and President to replace Ms. Stark-Cappelli.  Mr. Federowicz will serve as a director until his successor has been elected at the next annual meeting of the Company's shareholders or until his earlier resignation, removal, or death, and Mr. Federowicz has not been appointed to any committees of the Board as the Board does not presently have any committees.  

Mr. Federowicz does not have any employment agreement or other compensatory agreement in place with the Company.  He is being paid $10,000 per month for his services to the Company.

6. Advances from Third Parties

During the nine months ended May 31, 2011, the Company received net, non-interest bearing advances from certain third parties totaling $292,188.  The total amount due under these advances as of May 31, 2011 was $292,188.  These advances are not collateralized and are due on demand.  Interest was not imputed on these advances due to immateriality.

7

Obscene Jeans Corp.

(A Development Stage Corporation)

Notes to Unaudited Financial Statements

7. Common Stock

On December 20, 2010, the Company issued 1,000,000 shares of common stock to Kern Capital Corp. for services.  The shares were valued at $50,000 based on the value of the services received.  There was no readily determinable market value for the shares, as they were not traded on any exchanges during that time period.

8. Recently Issued Accounting Pronouncements

In April 2010, the FASB issued ASU No. 2010-18 regarding improving comparability by eliminating diversity in practice about the treatment of modifications of loans accounted for within pools under Subtopic 310-30 – Receivable – Loans and Debt Securities Acquired with Deteriorated Credit Quality (“Subtopic 310-30”). Furthermore, the amendments clarify guidance about maintaining the integrity of a pool as the unit of accounting for acquired loans with credit deterioration.  Loans accounted for individually under Subtopic 310-30 continue to be subject to the troubled debt restructuring accounting provisions within Subtopic 310-40, Receivables—Troubled Debt Restructurings by Creditors. The amendments in this Update are effective for modifications of loans accounted for within pools under Subtopic 310-30 occurring in the first interim or annual period ending on or after July 15, 2010. The amendments are to be applied prospectively. Early adoption is permitted. We are currently evaluating the impact of this ASU; however, we do not expect the adoption of this ASU to have a material impact on our financial statements.

Other recent accounting pronouncements issued by the FASB (including its EITF), the AICPA, and the SEC did not or are not believed by management to have a material impact on the Company's present or future financial statements.

9. Subsequent Event – Acquisition of Beijing Beautyfresh International Trade Company

On April 26, 2011, the Company signed a Global Strategic Profit Alliance Agreement (the “Alliance Agreement”) with Beijing Beautyfresh International Trade Company, a company registered and operated under the laws of the People’s Republic of China (“Beautyfresh”).  Under the terms of the Alliance Agreement, the Company would fund Beautyfresh’s efforts to import, market and distribute all Obscene Jeans-branded products throughout mainland China and export and market beauty products in Greece.  In exchange, the Company would receive a percentage of Beautyfresh’s net profits as will be set out in an operating agreement to be negotiated.

On June 14, 2011, the Company signed a Purchase Agreement (the “Purchase Agreement”) with Beautyfresh.  Under the terms of the Purchase Agreement, the Company has agreed to purchase all assets of Beautyfresh for the purchase price of $25,000 cash.  Beautyfresh is one of a limited number of import/export entities authorized by the Chinese government to service and distribute foreign products within the emerging Chinese marketplace, giving OBJE not only an existing brand of luxury products but all of the necessary infrastructure to capitalize on the exploding Chinese market for all-natural beauty supplies and cosmetics.  

8

PART I — FINANCIAL INFORMATION

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operation

THIS FILING CONTAINS FORWARD-LOOKING STATEMENTS. THE WORDS “ANTICIPATED,” “BELIEVE,” “EXPECT,” “PLAN,” “INTEND,” “SEEK,” “ESTIMATE,” “PROJECT,” “WILL,” “COULD,” “MAY,” AND SIMILAR EXPRESSIONS ARE INTENDED TO IDENTIFY FORWARD-LOOKING STATEMENTS. THESE STATEMENTS INCLUDE, AMONG OTHERS, INFORMATION REGARDING FUTURE OPERATIONS, FUTURE CAPITAL EXPENDITURES, AND FUTURE NET CASH FLOW. SUCH STATEMENTS REFLECT THE COMPANY’S CURRENT VIEWS WITH RESPECT TO FUTURE EVENTS AND FINANCIAL PERFORMANCE AND INVOLVE RISKS AND UNCERTAINTIES, INCLUDING, WITHOUT LIMITATION, GENERAL ECONOMIC AND BUSINESS CONDITIONS, CHANGES IN FOREIGN, POLITICAL, SOCIAL, AND ECONOMIC CONDITIONS, REGULATORY INITIATIVES AND COMPLIANCE WITH GOVERNMENTAL REGULATIONS, THE ABILITY TO ACHIEVE FURTHER MARKET PENETRATION AND ADDITIONAL CUSTOMERS, AND VARIOUS OTHER MATTERS, MANY OF WHICH ARE BEYOND THE COMPANY’S CONTROL. SHOULD ONE OR MORE OF THESE RISKS OR UNCERTAINTIES OCCUR, OR SHOULD UNDERLYING ASSUMPTIONS PROVE TO BE INCORRECT, ACTUAL RESULTS MAY VARY MATERIALLY AND ADVERSELY FROM THOSE ANTICIPATED, BELIEVED, ESTIMATED, OR OTHERWISE INDICATED. CONSEQUENTLY, ALL OF THE FORWARD-LOOKING STATEMENTS MADE IN THIS FILING ARE QUALIFIED BY THESE CAUTIONARY STATEMENTS AND THERE CAN BE NO ASSURANCE OF THE ACTUAL RESULTS OR DEVELOPMENTS.

The following discussion and analysis of our financial condition and plan of operations should be read in conjunction with our financial statements and related notes appearing elsewhere herein. This discussion and analysis contains forward-looking statements including information about possible or assumed results of our financial conditions, operations, plans, objectives and performance that involve risk, uncertainties and assumptions. The actual results may differ materially from those anticipated in such forward-looking statements. For example, when we indicate that we expect to increase our product sales and potentially establish additional license relationships, these are forward-looking statements. The words expect, anticipate, estimate or similar expressions are also used to indicate forward-looking statements.

OVERVIEW OF THE COMPANY

We are a development-stage company, incorporated in the State of Florida on September 21, 2009, as a for-profit company, and an established fiscal year of August 31. We have not yet generated or realized any revenues from business operations. Our auditor has issued a going concern opinion. This means there is substantial doubt that we can continue as an on-going business for the next eighteen (18) months unless we obtain additional capital to pay our bills. Accordingly, we must raise cash from sources other than loans we undertake.

From inception through the ending date of the period covered by this Quarterly Report, May 31, 2011, our business operations have primarily been focused on implementing our business plan by designing collection sketches, and researching contractors, sales agents, distributors and website designers. We have spent a total of approximately $361,000 since inception on start-up costs (legal, accounting and administrative) and the initial stages of our business plan. Based upon this, we believe that we have never been a shell company as defined by the SEC’s Rule 144(i)(1).  We have not generated any revenue from business operations.

In June 2011, OBJE went international, purchasing the Chinese luxury importer Beijing Beautyfresh International Trade Co. (“Beautyfresh”).  One of a limited number of import/export entities authorized by the Chinese government to service and distribute foreign products within the emerging Chinese marketplace, Beautyfresh is a key acquisition in OBJE’s global growth strategy.  After opening this door to the massive Chinese luxury market, the company expanded its business focus to include Beautyfresh’s line of luxury beauty products, establishing the Obscene Beauty brand.  In June 2011, OBJE signed an option to sell all-natural SEBA brand hair care products as part of the new brand.

As of May 31, 2011, we had $80,116 cash on hand.  We believe that this cash will satisfy our operating requirements for approximately one month.  

9

Plan of Operations

We believe we do not have adequate funds to satisfy our working capital requirements for the next twelve months. We will need to raise additional capital to continue our operations. During the next 18 months, we intend to continue implementing our business and marketing plan. We believe we must raise an additional $500,000 to pay for expenses associated with our development over the next 18 months. Of this amount, $150,000 will be used to finance anticipated activities during Phase One of our development plan as described below, and $350,000 will be used to finance anticipated activities during Phase Two of our development plan as described below.

PHASE ONE

ANTICIPATED MILESTONES	BUDGET
Complete OJC Design Collection Including Patterns, Cutting Plans Fabric and Ornaments	$	25,000
Complete OJC Initial Samples of Design Jean Collection and Complements	$	50,000
Complete OJC Final Samples of Design Jean Collection and Complements Including Specifications	$	25,000
Interview Sales Agents and Distributors and Sign Territorial Agreements	$	5,000
Complete the Operational Website of Obscenejeans.com including Hosting	$	20,000
Interview USA Jean Contractors and Sign Agreements	$	2,500
Complete Selection of OJC Consulting Team to Execute Business Plan	$	2,500
Additional Working Capital Including Professional Fees	$	20,000
TOTAL PHASE ONE	$	150,000

Note: This table above does not include costs related to commencing sales and marketing of our products.

PHASE TWO

ANTICIPATED MILESTONES	BUDGET
PRODUCTION:  Complete OJC Finished Goods Inventory of Jeans and Complement Collection and Contracted Warehousing	$	190,000
MARKETING & SALES:  Complete Sales Literature, Displays and Advertising Website Operational “obscenejeans.com”	$	60,000
MANAGEMENT & ADMINISTRATION:  Consultants, Operational CFO, Production, Marketing	$	50,000
ADDITIONAL WORKING CAPITAL	$	50,000
TOTAL PHASE TWO	$	350,000

Many of the developments enumerated in Phase Two are dependent on the completion of objectives in Phase One and both phases are dependent on us securing additional financing. If we are able to raise some, but not all funds required to undertake the developments in Phase 1 and Phase 2, our management will re-examine our proposed business activities to use our resources most efficiently. In this event, our focus will likely be on spending available funds on assuring that we retain our reporting status with the SEC and developing our product designs to attract investors.

10

If we are unable to raise additional funds we will not be able to complete any of the milestones in either Phase One or Phase Two. Due to the fact that many of the milestones are dependent on each other, if we do not raise any additional capital we will not be able to implement any facets of our business plan.

We intend to pursue capital through public or private financing as well as borrowings and other sources, such as our officer and director, in order to finance our businesses activities. We cannot guarantee that additional funding will be available on favorable terms, if at all. If adequate funds are not available, then our ability to continue our operations may be significantly hindered.

We have not yet begun the development of any of our anticipated products and even if we do secure adequate financing, there can be no assurance that our products will be accepted by the marketplace and that we will be able to generate revenues.

Our management does not plan to hire any employees at this time. Our sole officer and director will be responsible for implementing our business plan. We intend to hire independent consultants and sales representatives to carry out sales, marketing and distribution activities.

RESULTS OF OPERATIONS

There is no historical financial information about us upon which to base an evaluation of our performance. We have incurred expenses of $361,285 on our operations from inception through November 30, 2010 on selling, general and administrative expenses and our only other activity consisted of stock sales of 12,000,000 shares of our common stock to third parties and our sole director and officer for aggregate proceeds of $61,500.

We have not generated any revenues from our operations. We cannot guarantee we will be successful in our business operations. Our business is subject to risks inherent in the establishment of a new business enterprise, including the financial risks associated with the limited capital resources currently available to us for the implementation of our business strategies. To become profitable and competitive, we must successfully execute our business and marketing plan. Our management will attempt to secure financing through various means including borrowing and investment from institutions and private individuals.

Since inception, the majority of our management’s time has been spent refining the Company’s business plan and collection design sketches, and preparing for the Company’s initial public offering (which took place in August 2010).

LIQUIDITY AND CAPITAL RESOURCES

As of the date of this filing, we have yet to generate any revenues from our business operations. From inception through May 31, 2011, we issued 12,000,000 shares of common stock for cash proceeds of $61,500.

We anticipate needing a minimum of $150,000 for Phase One and an additional $350,000 for Phase Two, totaling $500,000 in order to effectively execute our business plan over the next eighteen months. Currently available cash is not sufficient to allow us to commence full execution of our business plan. Our business expansion will require significant capital resources that may be funded through the issuance of common stock or of notes payable or other debt arrangements that may affect our debt structure. Despite our current financial status, we believe that we may be able to issue notes payable or debt instruments in order to start executing our business plan. However, there can be no assurance that we will be able to raise money in this fashion and have not entered into any agreements that would obligate a third party to provide us with capital.

For the nine months ended May 31, 2011, we spent approximately $341,000 on general operating expenses. We raised the cash amounts to be used in these activities from the sale of common stock and through non-interest bearing advances.

As of May 31, 2011, we had $80,116 of cash on hand.

As of the date of this filing, the current funds available to the Company may not be sufficient to continue maintaining its reporting status with the SEC.  Management believes that if the Company cannot maintain its reporting status with the SEC, it will have to cease all business activity. As such, any investment previously made would be lost in its entirety.

The Company currently has no external sources of liquidity such as arrangements with credit institutions or off-balance sheet arrangements that will have or are reasonably likely to have a current or future effect on our financial condition or immediate access to capital.

11

The Company intends to seek additional financing through means such as borrowings from institutions or private individuals. There can be no assurance that the Company will be able to keep costs from being more than these estimated amounts or that the Company will be able to raise such funds. The Company may not be able to obtain additional capital or generate sufficient revenues to fund our operations. If we are unsuccessful at raising sufficient funds, for whatever reason, to fund our operations, the Company may be forced to seek a buyer for our business or another entity with which we could create a joint venture. If all of these alternatives fail, we expect that the Company will be required to seek protection from creditors under applicable bankruptcy laws.

Our independent auditor has expressed substantial doubt about our ability to continue as a going concern and believes that our ability is dependent on our ability to implement our business plan, raise capital and generate revenues. See Note 2 of our financial statements.

OFF-BALANCE SHEET ARRANGEMENTS

We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Not applicable.

Item 4T. Controls and Procedures

The Company’s Chief Executive Officer and Chief Financial Officer have evaluated the effectiveness of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of and for the period covered by this Quarterly Report on Form 10-Q. Based upon such evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of such period, the Company’s disclosure controls and procedures were not effective. The controls were determined to be ineffective due to the lack of segregation of duties. Currently, management contracts with an outside CPA to perform certain crucial accounting and financial reporting activities. However, the Company will be unable to remediate this weakness until it has received additional funding to hire additional administrative personnel.

Changes in Internal Control Over Financial Reporting

No change in the Company’s internal control over financial reporting occurred during the three months ended May 31, 2011, that materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

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PART II — OTHER INFORMATION

Item 1. Legal Proceedings

As of the date of this Quarterly Report, neither we nor any of our officers or directors is involved in any litigation either as plaintiffs or defendants. As of this date, there is not any threatened or pending litigation against us or any of our officers or directors.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

During the three month period ended May 31, 2011, there was no modification of any instruments defining the rights of holders of the Company’s common stock and no limitation or qualification of the rights evidenced by the Company’s common stock as a result of the issuance of any other class of securities or the modification thereof.

Item 3. Defaults upon Senior Securities

There have been no defaults in any material payments during the covered period.

Item 4. Removed and Reserved

Item 5. Other Information

The Company does not have any other material information to report with respect to the three month period ended May 31, 2011.

Item 6. Exhibits

3.1	Articles of Incorporation (incorporated by reference to our Form S-1 filed on April 14, 2010)
3.2	Bylaws (incorporated by reference to our Form S-1 filed on April 14, 2010)
31.1	Certification of the Chief Executive Officer and Chief Financial Officer
32.1	Certification of the Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350

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SIGNATURES

Pursuant to the requirements of the Securities and Exchange Act of 1934, the registrant has caused this report to be signed on its behalf by the undersigned, thereto duly authorized.

	OBSCENE JEANS CORP.
Dated: July 13, 2011	By:	/s/ Robert Federowicz
		Robert Federowicz President, Chief Executive Officer, Chief Financial Officer, Principal Accounting Officer, Secretary, Treasurer and Director

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