Document_and_Entity_Informatio
Document and Entity Information | 6 Months Ended | |
Nov. 30, 2013 | Jan. 20, 2014 | |
Document and Entity Information [Abstract] | ' | ' |
Entity Registrant Name | 'Romantique Ltd. | ' |
Entity Central Index Key | '0001574097 | ' |
Amendment Flag | 'false | ' |
Current Fiscal Year End Date | '--05-31 | ' |
Document Type | '10-Q | ' |
Document Period End Date | 30-Nov-13 | ' |
Document Fiscal Year Focus | '2014 | ' |
Document Fiscal Period Focus | 'Q2 | ' |
Entity Filer Category | 'Smaller Reporting Company | ' |
Entity Common Stock, Shares Outstanding | ' | 10,441,250 |
Condensed_Balance_Sheet
Condensed Balance Sheet (USD $) | Nov. 30, 2013 | 31-May-13 |
Current Assets: | ' | ' |
Cash and Cash Equivalents | $26,793 | $39,086 |
Accounts Receivable, Net | 2,684,243 | 752,923 |
Inventories | 1,550,234 | 1,789,394 |
Prepaid Expenses | 7,640 | 32,031 |
Deferred Taxes | 13,500 | 13,500 |
Total Current Assets | 4,282,410 | 2,626,934 |
Property and Equipment, Net | 10,514 | 10,967 |
Security Deposits | 2,000 | 2,000 |
Total Assets | 4,294,924 | 2,639,901 |
Current Liabilities: | ' | ' |
Accounts Payable | 1,884,367 | 1,679,891 |
Accrued Expenses | 22,320 | 75,526 |
Loans Payable - Factor | 978,480 | ' |
Loans Payable - Related Parties | 209,632 | ' |
Income Taxes Payable | 78,743 | 36,600 |
Total Current Liabilities | 3,173,543 | 1,792,017 |
Long-Term Debt: | ' | ' |
Convertible Note Payable - Related Party | 74,000 | 74,000 |
Total Liabilities | 3,247,542 | 1,866,017 |
Commitments and Contingencies | ' | ' |
Stockholders' Equity: | ' | ' |
Preferred Stock, $.0001 par value; 10,000,000 shares authorized, none issued and outstanding at November 30, 2013 and May 31, 2013 | ' | ' |
Common Stock, $.0001 par value; 50,000,000 shares authorized, 10,441,250 and 10,353,750 shares issued and outstanding at November 30, 2013 and May 31, 2013, respectively | 1,044 | 1,035 |
Additional Paid-In Capital | 845,558 | 685,567 |
Retained Earnings | 200,780 | 87,282 |
Total Stockholders' Equity | 1,047,382 | 773,884 |
Total Liabilities and Stockholders' Equity | $4,294,924 | $2,639,901 |
Condensed_Balance_Sheet_Parent
Condensed Balance Sheet (Parenthetical) (USD $) | Nov. 30, 2013 | 31-May-13 |
Balance Sheet [Abstract] | ' | ' |
Preferred Stock, par value | $0.00 | $0.00 |
Preferred Stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | ' | ' |
Preferred stock, shares outstanding | ' | ' |
Common Stock, par value | $0.00 | $0.00 |
Common Stock, shares authorized | 50,000,000 | 50,000,000 |
Common Stock, shares issued | 10,441,250 | 10,353,750 |
Common Stock, shares outstanding | 10,441,250 | 10,353,750 |
Condensed_Statement_of_Income
Condensed Statement of Income (USD $) | 3 Months Ended | 6 Months Ended | |
Nov. 30, 2013 | Nov. 30, 2012 | Nov. 30, 2013 | |
Income Statement [Abstract] | ' | ' | ' |
Sales - Net | $1,525,577 | $1,460,484 | $3,816,315 |
Costs and Expenses: | ' | ' | ' |
Cost of Sales | 1,192,704 | 1,191,505 | 2,817,163 |
Officer's Compensation | 6,001 | 44,250 | 78,556 |
Professional and Consulting Fees | 155,530 | 14,725 | 351,167 |
Selling, General and Administrative Expenses | 166,175 | 14,506 | 378,081 |
Provision for Bad Debts | ' | 14,600 | ' |
Total Costs and Expenses | 1,520,410 | 1,279,586 | 3,624,967 |
Income from Operations | 5,167 | 180,898 | 191,348 |
Other Income (Expense): | ' | ' | ' |
Interest Expense - Related Party | -740 | -600 | -1,480 |
Interest Expense - Accounts Receivable Financings | -13,470 | ' | -13,470 |
Total Other Income (Expense) | -14,210 | -600 | -14,950 |
Income (Loss) before Income Tax Provision | -9,043 | 180,298 | 176,398 |
Income Tax Provision | 3,700 | 61,000 | 62,900 |
Net Income (Loss) | ($12,743) | $119,298 | $113,498 |
Income (Loss) Per Common Share - Basic | $0 | $0.01 | $0.01 |
Basic Weighted Average Shares | 10,368,173 | 10,000,000 | 10,360,922 |
Income (Loss) Per Common Share - Diluted | $0 | $0.01 | $0.01 |
Diluted Weighted Average Shares | 10,405,173 | 10,023,639 | 10,397,922 |
Condensed_Statement_of_Stockho
Condensed Statement of Stockholders' Equity (Unaudited) (USD $) | Total | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] |
Beginning balance at May. 31, 2013 | $773,884 | $1,035 | $685,567 | $87,282 |
Beginning balance, Shares at May. 31, 2013 | ' | 10,353,750 | ' | ' |
Issuance of Common Stock for services | 175,000 | 9 | 174,991 | ' |
Issuance of Common Stock for services, Shares | ' | 87,500 | ' | ' |
Offering Costs | -15,000 | ' | -15,000 | ' |
Net Income for the Six Months Ended November 30, 2013 | 113,498 | ' | ' | 113,498 |
Ending balance at Nov. 30, 2013 | $1,047,382 | $1,044 | $845,558 | $200,780 |
Ending balance Shares at Nov. 30, 2013 | ' | 10,441,250 | ' | ' |
Condensed_Statement_of_Cash_Fl
Condensed Statement of Cash Flows (USD $) | 3 Months Ended | 6 Months Ended |
Nov. 30, 2012 | Nov. 30, 2013 | |
Cash Flows from Operating Activities: | ' | ' |
Net Income | $119,298 | $113,498 |
Adjustments to Reconcile Net Income to Net Cash (Used) in Operating Activities: | ' | ' |
Depreciation | 80 | 1,603 |
Common Stock Issued for Services | ' | 175,000 |
Deferred Taxes | -7,000 | ' |
Reserve for Doubtful Accounts and Sales Returns and Allowances | 28,600 | 1,824 |
Changes in Assets and Liabilities: | ' | ' |
(Increase) in Accounts Receivable | -1,462,379 | -1,965,228 |
Decrease in Inventories | ' | 239,160 |
Decrease in Prepaid Expenses | ' | 24,391 |
Increase in Accounts Payable | 1,172,358 | 204,476 |
Increase (Decrease) in Accrued Expenses | 54,090 | -21,122 |
Increase in Income Taxes Payable | 68,000 | 42,143 |
Net Cash (Used) in Operating Activities | -26,953 | -1,184,255 |
Cash Flows from Investing Activities: | ' | ' |
Capital Expenditures | -4,808 | -1,150 |
Net Cash (Used) In Investing Activities | -4,808 | -1,150 |
Cash Flows from Financing Activities: | ' | ' |
Proceeds from Sale of Common Stock | 1,000 | ' |
Proceeds of Convertible Note - Related Party | 74,000 | ' |
Proceeds of Loans Payable - Related Parties | ' | 354,632 |
Payments of Loans Payable - Related Parties | ' | -145,000 |
Payments of Offering Costs | -16,200 | -15,000 |
Proceeds from Loans Payable - Factor | ' | 978,480 |
Net Cash Provided by Financing Activities | 58,800 | 1,173,112 |
Increase (Decrease) in Cash and Cash Equivalents | 27,039 | -12,293 |
Cash and Cash Equivalents - Beginning of Period | ' | 39,086 |
Cash and Cash Equivalents - End of Period | 27,039 | 26,793 |
Supplemental Disclosure of Cash Flow Information | ' | ' |
Interest Paid | ' | 7,309 |
Income Taxes Paid | ' | $25,850 |
Summary_of_Significant_Account
Summary of Significant Accounting Policies | 6 Months Ended | ||||||||
Nov. 30, 2013 | |||||||||
Summary of Significant Accounting Policies [Abstract] | ' | ||||||||
Summary of Significant Accounting Policies | ' | ||||||||
NOTE 1 - Summary of Significant Accounting Policies | |||||||||
Organization and Basis of Presentation | |||||||||
Romantique Ltd. (“the Company”) was incorporated on September 6, 2012 under the laws of the State of New York. The Company is a wholesaler and manufacturer of jewelry including pendants, bracelets and earrings. Operations commenced on October 1, 2012 and the Company has selected May 31 as its fiscal year. | |||||||||
In the opinion of the Company’s management, the accompanying unaudited condensed financial statements contain all adjustments (consisting of only normal recurring adjustments) necessary to present fairly the information set forth therein. These financial statements are condensed and therefore do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. These condensed financial statements should be read in conjunction with the Company’s May 31, 2013 audited financial statements and notes included in the registration statement on Form S-1, Amendment No. 3 filed on September 3, 2013. | |||||||||
Results of operations for interim periods are not necessarily indicative of the results of operations for a full year. | |||||||||
Cash and Cash Equivalents | |||||||||
The Company considers all highly-liquid investments purchased with a maturity of three months or less to be cash equivalents. As of November 30, 2013 and 2012, the Company did not have any cash equivalents. | |||||||||
Inventories | |||||||||
Inventories are stated at the lower of cost or market, with cost determined using the first-in, first-out method. | |||||||||
Property and Equipment | |||||||||
Property and equipment is carried at cost less accumulated depreciation. Depreciation is computated by the straight-line method over the estimated useful lives of the related assets, which is five years. | |||||||||
Revenue Recognition | |||||||||
For revenue from product sales, the Company recognizes revenue in accordance with Staff Accounting Bulletin No. 104, “Revenue Recognition” (SAB No. 104), which superseded Staff Accounting Bulletin No. 101, “Revenue Recognition in Financial Statements” (SAB No. 101). SAB No. 104 requires that four basic criteria must be met before revenue can be recognized: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred; (3) the selling price is fixed and determinable; and (4) collectability is reasonably assured. Determination of criteria (3) and (4) are based on management’s judgment regarding the fixed nature of the selling prices of the products delivered and the collectability of those amounts. Provisions for discounts and rebates to customers, estimated returns and allowance, and other adjustments are provided for in the same period the related sales are recorded. Provision for sales returns and allowances that were netted against sales amounted to $30,190 for the six months ended November 30, 2013 and $14,000 for the period September 6, 2012 (inception) to November 30, 2012. | |||||||||
Advertising Costs | |||||||||
Advertising costs are charged to operations when incurred. Advertising costs during the six months ended November 30, 2013 was $2,100. There were no advertising costs incurred during the period September 6, 2012 (inception) through November 30, 2012. | |||||||||
Deferred Income Taxes | |||||||||
The Company accounts for deferred income taxes using the asset and liability method, the objective of which is to establish deferred tax assets and liabilities for the temporary differences between the financial reporting and the tax bases of the Company’s assets and liabilities at enacted tax rates expected to be in effect when such amounts are realized or settled. A valuation allowance related to deferred tax assets is recorded when it is more likely than not that some portion or all of the deferred tax assets will not be realized. | |||||||||
Net Income Per Share | |||||||||
Basic earnings per common share is computed by dividing net income by the weighted average number of common shares outstanding. Diluted earnings per common share is computed by dividing net income by the weighted average number of common shares and dilutive common share equivalents and convertible securities then outstanding. | |||||||||
The following provides a reconciliation of the shares used in calculating the per share amounts for the periods presented: | |||||||||
For the Six | For the Period | ||||||||
Months Ended | 6-Sep-12 | ||||||||
November 30, | (Inception) to | ||||||||
2013 | November 30, | ||||||||
2012 | |||||||||
(Unaudited) | |||||||||
Numerator: | |||||||||
Net income | $ | 113,498 | $ | 119,298 | |||||
Denominator: | |||||||||
Basic weighted-average shares | 10,360,922 | 10,000,000 | |||||||
Effect of dilutive securities: | |||||||||
Convertible Debt | 37,000 | 23,639 | |||||||
Diluted weighted-average shares | 10,397,922 | 10,023,639 | |||||||
Accounting Estimates | |||||||||
The preparation of financial statements in conformity with generally accepted accounting principles in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosures of contingent assets and liabilities at the date of the financial statements, and the reported amount of revenues and expenses during the reported period. Actual results could differ from those estimates. Management uses its best judgment in valuing these estimates, and may, as warranted, solicit external professional advice and other assumptions believed to be reasonable. | |||||||||
Fair Value Measurements | |||||||||
The authoritative guidance for fair value measurements defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or the most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Market participants are buyers and sellers in the principal market that are (i) independent, (ii) knowledgeable, (iii) able to transact, and (iv) willing to transact. The guidance describes a fair value hierarchy based on the levels of inputs, or which the first two are considered observable and the last unobservable, that may be used to measure fair value which are the following: | |||||||||
Level 1: Quoted prices in active markets for identical assets or liabilities. | |||||||||
Level 2: Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active, or other inputs that are observable or corroborated by observable market data or substantially the full term of the assets or liabilities. | |||||||||
Level 3: Unobservable inputs that are supported by little or no market activity and that are significant to the value of the assets or liabilities. | |||||||||
The Company's financial instruments include cash and cash equivalents, accounts receivable and accounts payable. These items are determined to be a Level 1 fair value measurement. | |||||||||
The carrying amounts of cash and cash equivalents, accounts receivable, accounts payable, accrued expenses, and loans payable approximates fair value because of the short maturity of these instruments. The recorded value of long-term debt approximates its fair value as the terms and rates approximate market rates. | |||||||||
Recent Accounting Pronouncements | |||||||||
Management does not believe there would have been a material effect on the accompanying financial statements had any recently issued, but not yet effective, accounting standards been adopted in the current period. |
Inventories
Inventories | 6 Months Ended | ||||||||
Nov. 30, 2013 | |||||||||
Inventories [Abstract] | ' | ||||||||
Inventories | ' | ||||||||
NOTE 2 - Inventories | |||||||||
Inventories consist of the following: | |||||||||
November 30, | May 31, | ||||||||
2013 | 2013 | ||||||||
(Unaudited) | |||||||||
Raw Materials | $ | 1,127,955 | $ | 1,508,981 | |||||
Finished Goods | 378,648 | 228,848 | |||||||
Sales Samples | 43,631 | 51,565 | |||||||
$ | 1,550,234 | $ | 1,789,394 | ||||||
Inventories are pledged as security for the Company’s Accounts Receivable Financing Agreement (see Note 8). |
Property_and_Equipment
Property and Equipment | 6 Months Ended | ||||||||
Nov. 30, 2013 | |||||||||
Property and Equipment [Abstract] | ' | ||||||||
Property and Equipment | ' | ||||||||
NOTE 3 - Property and Equipment | |||||||||
Property and equipment consists of the following: | |||||||||
November 30, | May 31, | ||||||||
2013 | 2013 | ||||||||
(Unaudited) | |||||||||
Office Equipment | $ | 8,066 | $ | 6,916 | |||||
Computers | 4,808 | 4,808 | |||||||
12,874 | 11,724 | ||||||||
Less: Accumulated Depreciation | 2,360 | 757 | |||||||
$ | 10,514 | $ | 10,967 | ||||||
Depreciation expense was $1,603 for the six months ended November 30, 2013 and $80 for the period September 6, 2012 (inception) through November 30, 2012. |
Convertible_Note_Payable_Relat
Convertible Note Payable - Related Party | 6 Months Ended | ||||||||
Nov. 30, 2013 | |||||||||
Convertible Note Payable - Related Party [Abstract] | ' | ||||||||
Convertible Note Payable - Related Party | ' | ||||||||
NOTE 4 - Convertible Note Payable – Related Party | |||||||||
Convertible note payable to the Company’s president is summarized as follows: | |||||||||
November 30, | May 31, | ||||||||
2013 | 2013 | ||||||||
(Unaudited) | |||||||||
Note Payable, bearing interest at 4% per annum, and due December 31, 2015. The note is Convertible into shares of the Company’s Common stock at a conversion rate of $2 per share, subject to adjustment upon the occurrence of certain events including stock dividends, stock split or combinations and reclassifications. | $ | 74,000 | $ | 74,000 |
Loans_Payable_Related_Parties
Loans Payable - Related Parties | 6 Months Ended | ||||||||
Nov. 30, 2013 | |||||||||
Loans Payable - Related Party [Abstract] | ' | ||||||||
Loans Payable - Related Parties | ' | ||||||||
NOTE 5 - Loans Payable – Related Parties | |||||||||
Loans payable to related parties is summarized as follows: | |||||||||
November 30, | May 31, | ||||||||
2013 | 2013 | ||||||||
(Unaudited) | |||||||||
Loans payable to the Company’s President and CEO. The loans are payable on demand and non-interest bearing, and are subordinated to the factor. | $ | 209,632 | $ | - |
Commitments_and_Contingencies
Commitments and Contingencies | 6 Months Ended |
Nov. 30, 2013 | |
Commitments and Contingencies [Abstract] | ' |
Commitments and Contingencies | ' |
NOTE 6 - Commitments and Contingencies | |
In July 2013 the Company entered into a three year consulting agreement with Sands Point Associates, LLC and its CEO, Robert McMullan. The compensation for the first year is $125,000, the second year is $200,000 and the third year is $200,000. The agreement calls for the Company to issue Mr. McMullan an aggregate of 500,000 shares of common stock of which 50,000 shares vested upon the commencement and 450,000 shares shall be subject to quarterly vesting over three years while the agreement is in full force and effect. In addition, the consultant may be eligible for performance bonuses and calls for reimbursement of out of pocket expenses. This consulting agreement may be terminated by either party, with or without cause, upon thirty days written notice. The Company recorded consulting fee expense of $226,900 for the six months ended November 30, 2013 of which $100,000 was in connection with the 50,000 shares vested. Additionally the Company issued 37,500 shares which were vested at $2 per share at November 1, 2013 for $75,000. | |
On October 9, 2013 the Company entered into a four month consultant agreement with a consultant. The consultant agreement calls for the issuance of 25,000 shares of the Company’s common stock as compensation. The shares are to be issued under a Form S-8 Registration to be undertaken by the Company as soon as practicable. No shares have been earned or issued under this agreement. |
Related_Party_Transactions
Related Party Transactions | 6 Months Ended |
Nov. 30, 2013 | |
Related Party Transactions [Abstract] | ' |
Related Party Transactions | ' |
NOTE 7 - Related Party Transactions | |
On October 1, 2012 the Company entered into a one-year consulting agreement with Isaac Gurary, under which he was to provide certain business and corporate marketing services to the Company for an annual consulting fee of 3% of net sales during the term of the agreement. As of November 30, 2013 the amount owed to Mr. Gurary was $78,556. As at May 31, 2013, the Company has recorded accrued compensation to Mr. Gurary in the amount of $64,531. These amounts are included in accounts payable and accrued expenses respectively at November 30, 2013 and May 31, 2013, respectively. Mr. Gurary serves as the Company’s President and is a significant stockholder of the Company. | |
During the six months ended November 30, 2013, the Company purchased approximately 59% of its merchandise from Classique Creations LLC (“Classique”), a company that is owned by the mother of the Company’s President. | |
Included in accounts payable at November 30, 2013 and May 31, 2013 are amounts owed to Classique totaling $1,650,428 and $656,002, respectively. | |
Included in cost of sales for the six months ended November 30, 2013 are amounts attributable to Classique of approximately $1,643,000. | |
Payment terms to Classique are one to twelve months and the manner of settlement is cash payment. | |
Pursuant to the Accounts Receivable Financing Agreement (See Note 8), accounts payable to Classique totaling $500,000 are subordinated to the finance company. | |
The Company rents office space from a Company affiliated with the Company’s president on a month to month basis. The agreement calls for rent at $2,060 per month. Rent expense was $14,360 for the six months ended November 30, 2013, and $4,000 for the period September 6, 2012 (Inception) to November 30, 2012. |
Financing_Agreement
Financing Agreement | 6 Months Ended | ||||
Nov. 30, 2013 | |||||
Financing Agreement [Abstract] | ' | ||||
Financing Agreement | ' | ||||
NOTE 8 - Financing Agreement | |||||
On September 30, 2013 the Company entered into an Account Receivable Financing Agreement with Rosenthal & Rosenthal, Inc. (“Rosenthal”) pursuant to which Rosenthal shall provide the Company with a line of credit up to $1,000,000. Loans made under the Accounts Receivable Financing Agreement bear interest at prime rate plus 3.5% and are subject to certain financial covenants. As security for these loans, Rosenthal has placed liens on the Company’s accounts receivable, inventories, and all other assets. In addition, the loans have been personally guaranteed by Yitzchok Gurary, and his parents, Mordechai Gurary and Leah Gurary. | |||||
The Accounts Receivable Financing Agreement calls for the subordination of certain of the Company’s debt as follows: | |||||
Accounts Payable – Classique Creations, LLC | $ | 500,000 | |||
Demand Loans Payable – Yitzchok Gurary | $ | 209,000 | |||
In addition, the Company has granted Rosenthal a Landlord Subordination agreement. | |||||
In connection with the Accounts Receivable Finance Agreement, the Company has borrowed $978,480 net as of November 30, 2013. The Accounts Receivable Financing Agreement expires September 30, 2015. |
Preferred_Stock
Preferred Stock | 6 Months Ended |
Nov. 30, 2013 | |
Preferred Stock [Abstract] | ' |
Preferred Stock | ' |
NOTE 9 - Preferred Stock | |
The Company’s Board of Directors may issue shares of preferred stock in series and at the time of issuance, determine the rights, preferences and limitation of each series. The holders of preferred stock may be entitled to receive a preference payment in the event of any liquidation, dissolution or winding-up of the Company before any payment is made to the holders of the common stock. Furthermore, the board of directors could issue preferred stock with voting and other rights that could adversely affect the voting power of the holders of the common stock. |
Major_Suppliers
Major Suppliers | 6 Months Ended |
Nov. 30, 2013 | |
Major Suppliers [Abstract] | ' |
Major Suppliers | ' |
NOTE 10 - Major Suppliers | |
During the six months ended November 30, 2013, the Company purchased approximately $1,643,000 (approximately 59%) of its merchandise from one manufacturer that is a related party (see Note 7). | |
In addition, the Company purchased merchandise from 1 vendor which amounted to approximately 18% of total purchases during the six months ended November 30, 2013. |
Income_Taxes
Income Taxes | 6 Months Ended | ||||||||
Nov. 30, 2013 | |||||||||
Income Taxes [Abstract] | ' | ||||||||
Income Taxes | ' | ||||||||
NOTE 11 - Income Taxes | |||||||||
Income tax provision consists of the following: | |||||||||
For the Six | For the Period | ||||||||
Months Ended | 6-Sep-12 | ||||||||
November 30, | (Inception) to | ||||||||
2013 | November 30, | ||||||||
2012 | |||||||||
(Unaudited) | |||||||||
Current: | |||||||||
Federal | $ | 57,400 | $ | 63,000 | |||||
State and Local | 5,500 | 5,000 | |||||||
62,900 | 68,000 | ||||||||
Deferred: | |||||||||
Federal (Benefit) | - | (5,000 | ) | ||||||
State and Local (Benefit) | - | (2,000 | ) | ||||||
- | (7.000 | ) | |||||||
$ | 62,900 | $ | 61,000 | ||||||
Deferred tax assets consist of the following: | |||||||||
November 30, | May 31, | ||||||||
2013 | 2013 | ||||||||
(Unaudited) | |||||||||
Reserve for Bad Debts | $ | 7,000 | $ | 7,000 | |||||
Reserves for Sales Returns and Allowances | 6,500 | 6,500 | |||||||
13,500 | 13,500 | ||||||||
The federal statutory income tax rate is reconciled to the effective rate as follows: | |||||||||
For the Six | For the Period | ||||||||
Months Ended | 6-Sep-12 | ||||||||
November 30, | (Inception) to | ||||||||
2013 | November 30, | ||||||||
2012 | |||||||||
(Unaudited) | |||||||||
Tax provision at Federal Statutory rate | 34 | % | 34 | % | |||||
State and local income taxes, net of federal tax benefit | (2.1 | ) | 1.7 | ||||||
Provision for bad debts and allowances for sales returns | - | (1.9 | ) | ||||||
Effective tax rate | 31.9 | % | 33.8 | % | |||||
Subsequent_Events
Subsequent Events | 6 Months Ended |
Nov. 30, 2013 | |
Subsequent Events [Abstract] | ' |
Subsequent Events | ' |
Note 12 - Subsequent Events | |
On December 3, 2013, Sands Point Associates, LLC, a consultant for the company, notified the company of its intent to terminate the consulting agreement dated July 26, 2013. Pursuant to the terms of the consulting agreement, the termination took effect January 2, 2014. There is no additional compensation due Sands Point Associates, LLC. | |
Summary_of_Significant_Account1
Summary of Significant Accounting Policies (Policies) | 6 Months Ended | ||||||||
Nov. 30, 2013 | |||||||||
Summary of Significant Accounting Policies [Abstract] | ' | ||||||||
Organization and Basis of Presentation | ' | ||||||||
Organization and Basis of Presentation | |||||||||
Romantique Ltd. (“the Company”) was incorporated on September 6, 2012 under the laws of the State of New York. The Company is a wholesaler and manufacturer of jewelry including pendants, bracelets and earrings. Operations commenced on October 1, 2012 and the Company has selected May 31 as its fiscal year. | |||||||||
In the opinion of the Company’s management, the accompanying unaudited condensed financial statements contain all adjustments (consisting of only normal recurring adjustments) necessary to present fairly the information set forth therein. These financial statements are condensed and therefore do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. These condensed financial statements should be read in conjunction with the Company’s May 31, 2013 audited financial statements and notes included in the registration statement on Form S-1, Amendment No. 3 filed on September 3, 2013. | |||||||||
Results of operations for interim periods are not necessarily indicative of the results of operations for a full year. | |||||||||
Cash and Cash Equivalents | ' | ||||||||
Cash and Cash Equivalents | |||||||||
The Company considers all highly-liquid investments purchased with a maturity of three months or less to be cash equivalents. As of November 30, 2013 and 2012, the Company did not have any cash equivalents. | |||||||||
Inventories | ' | ||||||||
Inventories | |||||||||
Inventories are stated at the lower of cost or market, with cost determined using the first-in, first-out method. | |||||||||
Property and Equipment | ' | ||||||||
Property and Equipment | |||||||||
Property and equipment is carried at cost less accumulated depreciation. Depreciation is computated by the straight-line method over the estimated useful lives of the related assets, which is five years. | |||||||||
Revenue Recognition | ' | ||||||||
Revenue Recognition | |||||||||
For revenue from product sales, the Company recognizes revenue in accordance with Staff Accounting Bulletin No. 104, “Revenue Recognition” (SAB No. 104), which superseded Staff Accounting Bulletin No. 101, “Revenue Recognition in Financial Statements” (SAB No. 101). SAB No. 104 requires that four basic criteria must be met before revenue can be recognized: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred; (3) the selling price is fixed and determinable; and (4) collectability is reasonably assured. Determination of criteria (3) and (4) are based on management’s judgment regarding the fixed nature of the selling prices of the products delivered and the collectability of those amounts. Provisions for discounts and rebates to customers, estimated returns and allowance, and other adjustments are provided for in the same period the related sales are recorded. Provision for sales returns and allowances that were netted against sales amounted to $30,190 for the six months ended November 30, 2013 and $14,000 for the period September 6, 2012 (inception) to November 30, 2012. | |||||||||
Advertising Costs | ' | ||||||||
Advertising Costs | |||||||||
Advertising costs are charged to operations when incurred. Advertising costs during the six months ended November 30, 2013 was $2,100. There were no advertising costs incurred during the period September 6, 2012 (inception) through November 30, 2012. | |||||||||
Deferred Income Taxes | ' | ||||||||
Deferred Income Taxes | |||||||||
The Company accounts for deferred income taxes using the asset and liability method, the objective of which is to establish deferred tax assets and liabilities for the temporary differences between the financial reporting and the tax bases of the Company’s assets and liabilities at enacted tax rates expected to be in effect when such amounts are realized or settled. A valuation allowance related to deferred tax assets is recorded when it is more likely than not that some portion or all of the deferred tax assets will not be realized. | |||||||||
Net Income Per Share | ' | ||||||||
Net Income Per Share | |||||||||
Basic earnings per common share is computed by dividing net income by the weighted average number of common shares outstanding. Diluted earnings per common share is computed by dividing net income by the weighted average number of common shares and dilutive common share equivalents and convertible securities then outstanding. | |||||||||
The following provides a reconciliation of the shares used in calculating the per share amounts for the periods presented: | |||||||||
For the Six | For the Period | ||||||||
Months Ended | 6-Sep-12 | ||||||||
November 30, | (Inception) to | ||||||||
2013 | November 30, | ||||||||
2012 | |||||||||
(Unaudited) | |||||||||
Numerator: | |||||||||
Net income | $ | 113,498 | $ | 119,298 | |||||
Denominator: | |||||||||
Basic weighted-average shares | 10,360,922 | 10,000,000 | |||||||
Effect of dilutive securities: | |||||||||
Convertible Debt | 37,000 | 23,639 | |||||||
Diluted weighted-average shares | 10,397,922 | 10,023,639 | |||||||
Accounting Estimates | ' | ||||||||
Accounting Estimates | |||||||||
The preparation of financial statements in conformity with generally accepted accounting principles in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosures of contingent assets and liabilities at the date of the financial statements, and the reported amount of revenues and expenses during the reported period. Actual results could differ from those estimates. Management uses its best judgment in valuing these estimates, and may, as warranted, solicit external professional advice and other assumptions believed to be reasonable. | |||||||||
Fair Value Measurements | ' | ||||||||
Fair Value Measurements | |||||||||
The authoritative guidance for fair value measurements defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or the most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Market participants are buyers and sellers in the principal market that are (i) independent, (ii) knowledgeable, (iii) able to transact, and (iv) willing to transact. The guidance describes a fair value hierarchy based on the levels of inputs, or which the first two are considered observable and the last unobservable, that may be used to measure fair value which are the following: | |||||||||
Level 1: Quoted prices in active markets for identical assets or liabilities. | |||||||||
Level 2: Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active, or other inputs that are observable or corroborated by observable market data or substantially the full term of the assets or liabilities. | |||||||||
Level 3: Unobservable inputs that are supported by little or no market activity and that are significant to the value of the assets or liabilities. | |||||||||
The Company's financial instruments include cash and cash equivalents, accounts receivable and accounts payable. These items are determined to be a Level 1 fair value measurement. | |||||||||
The carrying amounts of cash and cash equivalents, accounts receivable, accounts payable, accrued expenses, and loans payable approximates fair value because of the short maturity of these instruments. The recorded value of long-term debt approximates its fair value as the terms and rates approximate market rates. | |||||||||
Recent Accounting Pronouncements | ' | ||||||||
Recent Accounting Pronouncements | |||||||||
Management does not believe there would have been a material effect on the accompanying financial statements had any recently issued, but not yet effective, accounting standards been adopted in the current period. |
Summary_of_Significant_Account2
Summary of Significant Accounting Policies (Tables) | 6 Months Ended | ||||||||
Nov. 30, 2013 | |||||||||
Summary of Significant Accounting Policies [Abstract] | ' | ||||||||
Schedule of reconciliation of the shares used in calculating the per share amounts | ' | ||||||||
For the Six | For the Period | ||||||||
Months Ended | 6-Sep-12 | ||||||||
November 30, | (Inception) to | ||||||||
2013 | November 30, | ||||||||
2012 | |||||||||
(Unaudited) | |||||||||
Numerator: | |||||||||
Net income | $ | 113,498 | $ | 119,298 | |||||
Denominator: | |||||||||
Basic weighted-average shares | 10,360,922 | 10,000,000 | |||||||
Effect of dilutive securities: | |||||||||
Convertible Debt | 37,000 | 23,639 | |||||||
Diluted weighted-average shares | 10,397,922 | 10,023,639 | |||||||
Inventories_Tables
Inventories (Tables) | 6 Months Ended | ||||||||
Nov. 30, 2013 | |||||||||
Inventories [Abstract] | ' | ||||||||
Schedule of Inventories | ' | ||||||||
November 30, | May 31, | ||||||||
2013 | 2013 | ||||||||
(Unaudited) | |||||||||
Raw Materials | $ | 1,127,955 | $ | 1,508,981 | |||||
Finished Goods | 378,648 | 228,848 | |||||||
Sales Samples | 43,631 | 51,565 | |||||||
$ | 1,550,234 | $ | 1,789,394 |
Property_and_Equipment_Tables
Property and Equipment (Tables) | 6 Months Ended | ||||||||
Nov. 30, 2013 | |||||||||
Property and Equipment [Abstract] | ' | ||||||||
Schedule of property and equipment | ' | ||||||||
November 30, | May 31, | ||||||||
2013 | 2013 | ||||||||
(Unaudited) | |||||||||
Office Equipment | $ | 8,066 | $ | 6,916 | |||||
Computers | 4,808 | 4,808 | |||||||
12,874 | 11,724 | ||||||||
Less: Accumulated Depreciation | 2,360 | 757 | |||||||
$ | 10,514 | $ | 10,967 |
Convertible_Note_Payable_Relat1
Convertible Note Payable - Related Party (Tables) | 6 Months Ended | ||||||||
Nov. 30, 2013 | |||||||||
Convertible Note Payable - Related Party [Abstract] | ' | ||||||||
Schedule of Convertible note payable | ' | ||||||||
November 30, | May 31, | ||||||||
2013 | 2013 | ||||||||
(Unaudited) | |||||||||
Note Payable, bearing interest at 4% per annum, and due December 31, 2015. The note is Convertible into shares of the Company’s Common stock at a conversion rate of $2 per share, subject to adjustment upon the occurrence of certain events including stock dividends, stock split or combinations and reclassifications. | $ | 74,000 | $ | 74,000 |
Loans_Payable_Related_Parties_
Loans Payable - Related Parties (Tables) | 6 Months Ended | ||||||||
Nov. 30, 2013 | |||||||||
Loans Payable - Related Party [Abstract] | ' | ||||||||
Schedule of loans payable to related parties | ' | ||||||||
November 30, | May 31, | ||||||||
2013 | 2013 | ||||||||
(Unaudited) | |||||||||
Loans payable to the Company’s President and CEO. The loans are payable on demand and non-interest bearing, and are subordinated to the factor. | $ | 209,632 | $ | - |
Financing_Agreement_Tables
Financing Agreement (Tables) | 6 Months Ended | ||||
Nov. 30, 2013 | |||||
Financing Agreement [Abstract] | ' | ||||
Schedule of financing agreement calls for the subordination of company's debt | ' | ||||
Accounts Payable – Classique Creations, LLC | $ | 500,000 | |||
Demand Loans Payable – Yitzchok Gurary | $ | 216,000 |
Income_Taxes_Tables
Income Taxes (Tables) | 6 Months Ended | ||||||||
Nov. 30, 2013 | |||||||||
Income Taxes [Abstract] | ' | ||||||||
Schedule of Income tax provision | ' | ||||||||
For the Six | For the Period | ||||||||
Months Ended | 6-Sep-12 | ||||||||
November 30, | (Inception) to | ||||||||
2013 | November 30, | ||||||||
2012 | |||||||||
(Unaudited) | |||||||||
Current: | |||||||||
Federal | $ | 57,400 | $ | 63,000 | |||||
State and Local | 5,500 | 5,000 | |||||||
62,900 | 68,000 | ||||||||
Deferred: | |||||||||
Federal (Benefit) | - | (5,000 | ) | ||||||
State and Local (Benefit) | - | (2,000 | ) | ||||||
- | (7.000 | ) | |||||||
$ | 62,900 | $ | 61,000 | ||||||
Schedule of Deferred tax assets | ' | ||||||||
November 30, | May 31, | ||||||||
2013 | 2013 | ||||||||
(Unaudited) | |||||||||
Reserve for Bad Debts | $ | 7,000 | $ | 7,000 | |||||
Reserves for Sales Returns and Allowances | 6,500 | 6,500 | |||||||
13,500 | 13,500 | ||||||||
Schedule of Federal statutory income tax rate reconciled to effective rate | ' | ||||||||
For the Six | For the Period | ||||||||
Months Ended | 6-Sep-12 | ||||||||
November 30, | (Inception) to | ||||||||
2013 | November 30, | ||||||||
2012 | |||||||||
(Unaudited) | |||||||||
Tax provision at Federal Statutory rate | 34 | % | 34 | % | |||||
State and local income taxes, net of federal tax benefit | (2.1 | ) | 1.7 | ||||||
Provision for bad debts and allowances for sales returns | - | (1.9 | ) | ||||||
Effective tax rate | 31.9 | % | 33.8 | % | |||||
Summary_of_Significant_Account3
Summary of Significant Accounting Policies (Details) (USD $) | 3 Months Ended | 6 Months Ended | |
Nov. 30, 2013 | Nov. 30, 2012 | Nov. 30, 2013 | |
Numerator: | ' | ' | ' |
Net Income | ($12,743) | $119,298 | $113,498 |
Denominator: | ' | ' | ' |
Basic weighted-average shares | 10,368,173 | 10,000,000 | 10,360,922 |
Effect of dilutive securities: | ' | ' | ' |
Convertible Debt | ' | 23,639 | 37,000 |
Diluted weighted-average shares | 10,405,173 | 10,023,639 | 10,397,922 |
Summary_of_Significant_Account4
Summary of Significant Accounting Policies (Details Textual) (USD $) | 3 Months Ended | 6 Months Ended |
Nov. 30, 2012 | Nov. 30, 2013 | |
Summary of Significant Accounting Policies (Textual) | ' | ' |
Estimated useful lives of the assets | ' | '5 years |
Provision for sales returns and allowances | $14,000 | $30,190 |
Advertising costs | $0 | $2,100 |
Inventories_Details
Inventories (Details) (USD $) | Nov. 30, 2013 | 31-May-13 |
Schedule of Inventory | ' | ' |
Raw Materials | $1,127,955 | $1,508,981 |
Finished Goods | 378,648 | 228,848 |
Sales Samples | 43,631 | 51,565 |
Total | $1,550,234 | $1,789,394 |
Property_and_Equipment_Details
Property and Equipment (Details) (USD $) | Nov. 30, 2013 | 31-May-13 |
Schedule of property and equipment | ' | ' |
Property and equipment, gross | $12,874 | $11,724 |
Less: Accumulated Depreciation | 2,360 | 757 |
Property and equipment, net | 10,514 | 10,967 |
Office Equipment [Member] | ' | ' |
Schedule of property and equipment | ' | ' |
Property and equipment, gross | 8,066 | 6,916 |
Computers [Member] | ' | ' |
Schedule of property and equipment | ' | ' |
Property and equipment, gross | $4,808 | $4,808 |
Property_and_Equipment_Details1
Property and Equipment (Details Textual) (USD $) | 3 Months Ended | 6 Months Ended |
Nov. 30, 2012 | Nov. 30, 2013 | |
Property and Equipment (Textual) | ' | ' |
Depreciation expense | $80 | $1,603 |
Convertible_Note_Payable_Relat2
Convertible Note Payable - Related Party (Details) (USD $) | Nov. 30, 2013 | 31-May-13 |
Summary of convertible notes payable | ' | ' |
Convertible Note Payable - Related Party | $74,000 | $74,000 |
Convertible_Note_Payable_Relat3
Convertible Note Payable - Related Party (Details Textual) (USD $) | Nov. 30, 2013 |
Convertible Notes Payable - Related Party (Textual) | ' |
Note Payable, bearing interest | 4.00% |
Note Payable, bearing interest due date | 31-Dec-15 |
Convertible common stock conversion | $2 |
Loans_Payable_Related_Parties_1
Loans Payable - Related Parties (Details) (USD $) | Nov. 30, 2013 | 31-May-13 |
Summary of loans payable related parties | ' | ' |
Loans payable to the Company's President and CEO. The loans are payable on demand and non-interest bearing, and are subordinated to the factor. | $209,632 | ' |
President and CEO [Member] | ' | ' |
Summary of loans payable related parties | ' | ' |
Loans payable to the Company's President and CEO. The loans are payable on demand and non-interest bearing, and are subordinated to the factor. | $209,632 | ' |
Commitments_and_Contingencies_
Commitments and Contingencies (Details) (USD $) | Nov. 30, 2013 | 31-May-13 | Oct. 09, 2013 | Oct. 01, 2012 | Nov. 01, 2013 | Nov. 30, 2013 | Jul. 31, 2013 | Nov. 30, 2013 |
Compensation fee [Member] | Issac Gurary [Member] | Sands Point Associates [Member] | Sands Point Associates [Member] | Robert McMullan [Member] | Robert McMullan [Member] | |||
Compensation fee [Member] | Compensation fee [Member] | |||||||
Commitments and contingencies (Textual) | ' | ' | ' | ' | ' | ' | ' | ' |
Compensation fee for the first year | ' | ' | ' | ' | ' | ' | $125,000 | ' |
Compensation fee for the second year | ' | ' | ' | ' | ' | ' | 200,000 | ' |
Compensation fee for the third year | ' | ' | ' | ' | ' | ' | 200,000 | ' |
Consulting agreement period | ' | ' | ' | '1 year | ' | ' | '3 years | ' |
Aggregate shares of common stock | 10,441,250 | 10,353,750 | 25,000 | ' | ' | ' | ' | 500,000 |
Shares of common stock vested | ' | ' | ' | ' | ' | ' | ' | 50,000 |
Number of shares subject to quarterly vesting | ' | ' | ' | ' | ' | ' | ' | 450,000 |
Consulting Fees | ' | ' | ' | ' | ' | ' | ' | 226,900 |
Common stock issued to Robert McMullan, Value | ' | ' | ' | ' | $37,500 | $100,000 | ' | ' |
Common stock issued to Robert McMullan, Shares | ' | ' | ' | ' | 75,000 | 50,000 | ' | ' |
Common stock, per share | $0.00 | $0.00 | ' | ' | $2 | ' | ' | ' |
Related_Party_Transactions_Det
Related Party Transactions (Details) (USD $) | 3 Months Ended | 6 Months Ended | 0 Months Ended | |||||
Nov. 30, 2012 | Nov. 30, 2013 | 31-May-13 | Nov. 30, 2013 | Nov. 30, 2013 | Oct. 01, 2012 | Nov. 30, 2013 | 31-May-13 | |
Financing Agreement [Member] | Related Party Transaction [Member] | Issac Gurary [Member] | Issac Gurary [Member] | Issac Gurary [Member] | ||||
Financing Agreement [Member] | ||||||||
Related Party Transactions (Textual) | ' | ' | ' | ' | ' | ' | ' | ' |
Consulting agreement period | ' | ' | ' | ' | ' | '1 year | ' | ' |
Percentage of annual consulting fee | ' | ' | ' | ' | ' | 3.00% | ' | ' |
Amount owed to Mr.Gurary | ' | ' | ' | ' | ' | ' | $78,556 | ' |
Accrued compensation expenses | ' | ' | ' | ' | ' | ' | ' | 64,531 |
Purchase of its merchandise from Classique Creations LLC (Percentage) | ' | 59.00% | ' | ' | ' | ' | ' | ' |
Accounts payable to Classique Creations LLC | ' | 1,650,428 | 656,002 | ' | ' | ' | ' | ' |
Cost of sales to Classique Creations LLC | ' | 1,643,000 | ' | ' | ' | ' | ' | ' |
Cash payment terms to Classique Creations LLC | ' | 'one to twelve months | ' | ' | ' | ' | ' | ' |
Rent expenses per month | ' | 2,060 | ' | ' | ' | ' | ' | ' |
Rent expense | 4,000 | 14,360 | ' | ' | ' | ' | ' | ' |
Borrowings | ' | ' | ' | $978,480 | $500,000 | ' | ' | ' |
Financing_Agreement_Details
Financing Agreement (Details) (Financing Agreement [Member], USD $) | Nov. 30, 2013 |
Financing Agreement [Member] | ' |
Subordinated Borrowing [Line Items] | ' |
Accounts Payable - Classique Creations, LLC | $500,000 |
Demand Loans Payable - Yitzchok Gurary | $216,000 |
Financing_Agreement_Details_Te
Financing Agreement (Details Textual) (Financing Agreement [Member], USD $) | 1 Months Ended | 6 Months Ended |
Sep. 30, 2013 | Nov. 30, 2013 | |
Financing Agreement [Member] | ' | ' |
Financing Agreement (Textual) | ' | ' |
Line of credit | $1,000,000 | ' |
Line of credit interest description | 'Interest at prime rate plus 3.5 | ' |
Borrowings | ' | $978,480 |
Finance agreement Expiration Date | ' | 30-Sep-15 |
Major_Suppliers_Details
Major Suppliers (Details) (USD $) | 6 Months Ended |
Nov. 30, 2013 | |
Major Suppliers (Textual) | ' |
Purchase of merchandise from one manufacturer that is a related party, Percentage | 59.00% |
Purchase of merchandise from one manufacturer that is a related party | $1,643,000 |
Vendor 1 [Member] | ' |
Major Suppliers (Textual) | ' |
Percentage of merchandise from vendors | 18.00% |
Income_Taxes_Details
Income Taxes (Details) (USD $) | 3 Months Ended | 6 Months Ended | |
Nov. 30, 2013 | Nov. 30, 2012 | Nov. 30, 2013 | |
Current: | ' | ' | ' |
Federal | ' | $63,000 | $57,400 |
State and Local | ' | 5,000 | 5,500 |
Income tax provision, Current | ' | 68,000 | 62,900 |
Deferred: | ' | ' | ' |
Federal (Benefit) | ' | -5,000 | ' |
State and Local (Benefit) | ' | -2,000 | ' |
Income tax provision, Deferred | ' | -7,000 | ' |
Income tax provision, Total | $3,700 | $61,000 | $62,900 |
Income_Taxes_Details_1
Income Taxes (Details 1) (USD $) | Nov. 30, 2013 | 31-May-13 |
Summary of deferred tax assets | ' | ' |
Reserve for Bad Debts | $7,000 | $7,000 |
Reserves for Sales Returns and Allowances | 6,500 | 6,500 |
Deferred tax assets, Total | $13,500 | $13,500 |
Income_Taxes_Details_2
Income Taxes (Details 2) | 3 Months Ended | 6 Months Ended |
Nov. 30, 2012 | Nov. 30, 2013 | |
Summary of federal statutory income tax rate is reconciled to the effective rate | ' | ' |
Tax provision at Federal Statutory rate | 34.00% | 34.00% |
State and local income taxes, net of federal tax benefit | 1.70% | -2.10% |
Provision for bad debts and allowances for sales returns | -1.90% | ' |
Effective tax rate | 33.80% | 31.90% |
Subsequent_Events_Details
Subsequent Events (Details) | 6 Months Ended |
Nov. 30, 2013 | |
Subsequent Events (Textual) | ' |
Effective termination date under consulting agreement | 'Pursuant to the terms of the consulting agreement, the termination took effect January 2, 2014. |