U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-QSB
(Mark One)
[x] Quarterly Report under Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the quarterly period ended June 30, 2002
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[ ] Transition Report under Section 13 or 15(d)of the Exchange Act For
the Transition Period from ________ to ___________
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Commission File Number: 0-32795
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FOXY JEWLERY, INC.
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(Exact name of small business issuer as specified in its charter)
NEVADA 88-0442629
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2620 So. Maryland Parkway, #402, Las Vegas, Nevada 89109
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(Address of principal executive offices) (Zip Code)
Issuer's telephone number (702) 471-7106
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Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act of 1934 during the past 12
months (or such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing requirements
for the past 90 days.
Yes [x] No [ ]
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDING DURING THE PRECEDING FIVE YEARS
Check whether the Registrant filed all documents and reports required to
be filed by Section 12, 13 or 15(d) of the Exchange Act after the
distribution of securities under a plan confirmed by a court.
Yes [ ] No [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS
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The Registrant has 15,000,000 Common Stock, authorized, 2,027,000 shares
of Common stock issued and outstanding, par value $0.001 per share as of
June 30, 2002. Preferred Stock, $0.001 par value per share, 10,000,000
shares authorized, no Preferred Stock issued nor outstanding as of
June 30, 2002.
Traditional Small Business Disclosure Format (check one)
Yes [ ] No [X]
2
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements................................. 3
Balance Sheet (unaudited)............................ 4
Statements of Operations (unaudited)................. 5
Statements of Cash Flows (unaudited)................. 6
Notes to Financial Statements........................ 7-8
Item 2. Management's Discussion and Analysis of Plan
of Operation........................................ 9
PART II. OTHER INFORMATION
Item 1. Legal Proceedings.................................... 15
Item 2. Changes in Securities and Use of Proceeds............ 15
Item 3. Defaults upon Senior Securities...................... 15
Item 4. Submission of Matters to a Vote
of Security Holders................................. 15
Item 5. Other Information..................................... 15
Item 6. Exhibits and Reports on Form 8-K...................... 15
Signatures...................................................... 16
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS AND EXHIBITS
The unaudited financial statements of registrant for the six months ended
June 30, 2002, follow. The financial statements reflect all adjustments
which are, in the opinion of management, necessary to a fair statement of
the results for the interim period presented.
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FOXY JEWELRY, INC.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEETS
BALANCE SHEETS
(unaudited)
June 30, December 31,
2002 2001
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ASSETS
Current assets:
Cash $ 5 $ 21,286
Inventory 8,224 8,224
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Total current assets 8,229 9,510
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Web development costs, net 1,950 2,250
$ 10,179 $ 11,760
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Due to shareholder $ 500 $ -
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Total current liabilities 500 -
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Stockholders' Equity:
Preferred stock, $0.001 par value, 10,000,000
shares authorized, no shares issued and
outstanding - -
Common stock, $0.001 par value, 15,000,000
shares authorized, 2,027,700 shares
issued and outstanding 2,028 2,028
Additional paid-in capital 27,857 27,857
(Deficit) accumulated during development stage (20,206) (18,125)
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9,679 11,760
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$ 10,179 $ 11,760
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FOXY JEWELRY, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF OPERATIONS
(unaudited)
STATEMENT OF OPERATIONS
Three Months Ending Six Months Ending
June 30, June 30, Dec. 12, 1997
------------------- ------------------- (Inception) to
2002 2001 2002 2001 June 30, 2002
--------- --------- --------- --------- --------------
Revenue $ - $ 1,100 $ - $ 1,100 $ 1,850
--------- --------- --------- --------- --------------
Expenses:
General and
administrative
expenses 1,010 4,597 1,791 5,041 21,006
Amortization 150 150 300 350 1,050
--------- --------- --------- --------- --------------
Total expenses 1,160 4,737 2,091 5,391 22,056
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Net (loss) $ (1,160) $ (3,637) $ (2,091) $ (4,291) $ (20,206)
========= ========== ========= ========= =============
Weighted average
number of common
shares outstanding -
basic and fully
diluted 2,027,700 2,027,700 2,027,700 2,027,700
========= ========= ========= =========
Net (loss) per share-
basic & fully diluted$ (0.00) $ (0.00) $ (0.00) $ (0.00)
========= ========= ========= =========
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FOXY JEWELRY, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CASH FLOWS
(unaudited)
STATEMENT OF CASH FLOWS
Six months ending Dec. 12, 1997
June 30, (inception) to
-------------------- June 30,
2002 2001 2002
--------- --------- -------------
CASH FLOWS FROM OPERATING ACTIVITIES
Net (loss) $ (2,081) $ (4,291) $ (20,206)
Amortization 300 350 1,050
Shares issued for services - - 1,500
Adjustments to reconcile net (loss)
to net cash (used) by operating
activities:
(Increase) in inventory - (4,924) (8,224)
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Net cash (used) by operating activities (1,781) (8,865) (25,880)
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CASH FLOWS FROM INVESTING ACTIVITIES
Web site development costs - - (3,000)
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Net cash (used) by investing activities - - (3,000)
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CASH FLOWS FROM FINANCING ACTIVITIES
Common stock - - 28,385
Increase in due from shareholder 500 - 500
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Net cash provided by financing activities 500 - 28,885
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Net increase (decrease) in cash (1,281) (8,865) 5
Cash - beginning 1,286 10,975 -
--------- --------- ------------
Cash - ending $ 5 $ 2,110 $ 5
========= ========= ============
Supplemental disclosures:
Interest paid $ - $ - $ -
========= ========= =============
Income taxes paid $ - $ - $ -
========= ========= =============
Non-cash investing and financing activities:
--------- --------- ------------
Number of shares issued for
services and inventory - - 1,400,000
========= ========= =============
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FOXY JEWELRY, INC.
(a Development Stage Company)
Notes
NOTE 1 - BASIS OF PRESENTATION
The interim financial statements included herein, presented in accordance with
United States generally accepted accounting principles and stated in US
dollars, have been prepared by the Company, without audit, pursuant to the
rules and regulations of the Securities and Exchange Commission. Certain
information and footnote disclosures normally included in financial statements
prepared in accordance with generally accepted accounting principles have been
condensed or omitted pursuant to such rules and regulations, although the
Company believes that the disclosures are adequate to make the information
presented not misleading.
These statements reflect all adjustments, consisting of normal recurring
adjustments, which, in the opinion of management, are necessary for fair
presentation of the information contained therein. It is suggested that these
interim financial statements be read in conjunction with the financial
statements of the Company for the period ended December 31, 2001 and notes
thereto included in the Company's Form 10-KSB. The Company follows the same
accounting policies in the preparation of interim reports.
Results of operations for the interim periods are not indicative of annual
results.
NOTE 2 - GOING CONCERN
These financial statements have been prepared in accordance with generally
accepted accounting principles applicable to a going concern, which
contemplates the realization of assets and the satisfaction of liabilities and
commitments in the normal course of business. As at June 30, 2002, the Company
has accumulated operating losses of approximately $20,206 since inception. The
Company's ability to continue as a going concern is contingent upon the
successful completion of additional financing arrangements and its ability to
achieve and maintain profitable operations. Management plans to raise equity
capital to finance the operating and capital requirements of the Company.
Amounts raised will be used to further development of the Company's products,
to provide financing for marketing and promotion, to secure additional property
and equipment, and for other working capital purposes. While the Company is
expending its best efforts to achieve the above plans, there is no assurance
that any such activity will generate funds that will be available for
operations.
These conditions raise substantial doubt about the Company's ability to
continue as a going concern. These financial statements do not include any
adjustments that might arise from this uncertainty.
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FOXY JEWELRY, INC.
(a Development Stage Company)
Notes
NOTE 3 - WEB DEVELOPMENT COSTS
The Company has developed a website costing $3,000 which is capitalizable
pursuant to EITF No. 00-2 "Accounting for Website Development Costs" as defined
therein. The Company has recorded amortization expense in the amount of $300
during the six months ending June 30, 2002 and $350 during the six months
ending June 30, 2001.
NOTE 4 - RELATED PARTY TRANSACTIONS
On September 1, 1998, the Company exchanged 400,000 shares of its $0.001 par
value common stock for inventory purchased at a wholesale price of $500 by
Michael Fox, the Company's president and director.
The Company does not lease or rent any property. Office services are provided
without charge by a director. Such costs are immaterial to the financial
statements and, accordingly, have not been reflected therein. The officers and
directors of the Company are involved in other business activities and may, in
the future, become involved in other business opportunities. If a specific
business opportunity becomes available, such persons may face a conflict in
selecting between the Company and their other business interests. The Company
has not formulated a policy for the resolution of such conflicts.
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Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF PLAN OF OPERATIONS
The current business plan of Foxy Jewelry, Inc. ("Foxy") or ("Foxy Jewelry")
is to design, and market its jewelry products through its Internet Web Site
(http://www.foxyjewelry.com). The Company originally planned to design
jewelry pieces that the company would produce and then either sell through
personal contact, place in jewelry stores on consignment or market on the
Company's web site. Although the Company has not yet abandoned the original
business plan, Foxy is now in the process of developing a new business
strategy. The Company is currently assessing various options and strategies
to become a profitable corporation.
The Company has a limited operating history upon which an evaluation of
the Company, its current business and its prospects can be based, each
of which must be considered in light of the risks, expenses and
problems frequently encountered by all companies in the early stages
of development, and particularly by such companies entering new and
rapidly developing markets like the Internet. The Company's prospects
must be considered in light of the risks, uncertainties, expenses and
difficulties frequently encountered by companies in their early stages
of development, particularly companies in new and rapidly evolving
markets such as online commerce. Based on adverse market conditions and
the failure of many Internet "dot.com" companies, Foxy has reconsidered
its original business plan, and is currently developing other business
strategies.
The ability of the Company to manage its operations, including the amount and
timing of capital expenditures and other costs relating to the expansion of
the company's operations, the introduction and development of different or
more extensive communities by direct and indirect competitors of the Company,
including those with greater financial, technical and marketing resources,
the inability of the Company to attract, retain and motivate qualified
personnel and general economic conditions.
The Company has not achieved profitability to date, and the Company
anticipates that it will continue to incur net losses for the foreseeable
future. As of June 30, 2002, the Company had an accumulated deficit of
twenty thousand two hundred six ($20,206) dollars. The Company expects
that its operating expenses will increase, in the areas of accounting fees,
and legal fees in order to maintain its fully reporting status for the
remainder of the year. Thus, the Company will need to find additional
capital or generate revenues to improve its cash flows. There can be no
assurances that the Company can achieve or sustain positive cash flows or
that the Company's operating losses will not increase in the future.
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The Company is currently assessing various options and strategies to become
a profitable corporation. The analysis of new businesses opportunities and
evaluating new business strategies will be undertaken by or under the
supervision of the Company's President. In analyzing prospective businesses
opportunities, management will consider, to the extent applicable, the
available technical, financial and managerial resources of any given business
venture. Management will also consider the nature of present and expected
competition; potential advances in research and development or exploration;
the potential for growth and expansion; the likelihood of sustaining a profit
within given time frames; the perceived public recognition or acceptance of
products, services, trade or service marks; name identification; and other
relevant factors. The Company anticipates that the results of operations of
a specific business venture may not necessarily be indicative of the potential
for future earnings, which may be impacted by a change in marketing
strategies, business expansion, modifying product emphasis, changing or
substantially augmenting management, and other factors.
The Company will analyze all relevant factors and make a determination based
on a composite of available information, without reliance on any single
factor. The period within which the Company will decide to participate in a
given business venture cannot be predicted and will depend on certain
factors, including the time involved in identifying businesses, the time
required for the Company to complete its analysis of such businesses, the
time required to prepare appropriate documentation and other circumstances.
Going Concern - The Company experienced operating losses for the period ended
June 30, 2002. The financial statements have been prepared assuming the
Company will continue to operate as a going concern which contemplates the
realization of assets and the settlement of liabilities in the normal course
of business. No adjustment has been made to the recorded amount of assets or
the recorded amount or classification of liabilities which would be required
if the Company were unable to continue its operations. As discussed in Note 2,
"the Company's ability to continue as a going concern is contingent upon the
successful completion of additional financing arrangements and its ability to
achieve and maintain profitable operations. Management plans to raise equity
capital to finance the operating and capital requirements of the Company."
Loss Per Share - The Company adopted the provisions of Statement of Financial
Accounting Standards ("SFAS") No. 128, "Earnings Per Share" that established
standards for the computation, presentation and disclosure of earnings per
share ("EPS"), replacing the presentation of Primary EPS with a presentation
of Basic EPS. It also requires dual presentation of Basic EPS and Diluted
EPS on the face of the income statement for entities with complex capital
structures. The Company did not present Diluted EPS since it has a simple
capital structure.
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Results of Operations
During the Second Quarter ended June 30, 2002, the Company did not
generate any revenues. In addition, the Company does not expect to
generate any profit for the remainder of the fiscal year.
In its most recent six month operating period ended June 30, 2002, the
Company did not generate any revenues, and compared to $1,100 in revenues
for the same period last year. For the most recent six month period, the
Company incurred a net loss of $2,091 as compared to net loss of $4,291 for
the same period last year, this net loss included general and administrative
expenses of $1,791 and amortization costs of $300. During the Second Quarter,
the Company continued to seek new strategies for its website. The majority
of the Company's expenses for the Quarter included administrative fees, which
mainly included accounting fees to fulfill SEC fully reporting requirements.
Since the Company's inception the Company has lost $22,056.
Plan of Operation
Management does not believe that the Company will be able to generate
revenues during the coming year, unless the company can define a better
strategy to market products through its website. Management does not
believe the company will generate any profit in the near future, as
developmental and marketing costs will most likely exceed any anticipated
revenues.
Liquidity and Capital Resources
On December 12, 1997, the Company issued 1,000,000 shares of it $0.001 par
value common stock to its director and incorporator in exchange for
services valued at $1,000. These services included incorporating the
Company in the State of Nevada and paying the relevant fees.
On June 7, 1998 the incorporator, sold 600,000 shares of his personally
owned common stock to Mr. Fox.
On September 1, 1998 the Company issued 400,000 shares of it $0.001 par
value common stock to Mr. Fox in exchange for inventory valued at $500.
On December 1, 1999 the company sold 100,000 shares of common stock for
$2,000 to two individuals. Each party received 50,000 shares at $0.02 per
share. These shares were sold in a private transaction not involving a
public offering pursuant to Section 4(2) of the Securities Act (the "Act").
11
On July 28, 2000 the Company completed a Nevada registered Regulation D,
Rule 504, public offering, where is sold five hundred twenty-seven
thousand seven hundred (527,700) shares of it $0.001 par value common
stock to approximately 90 shareholders at $0.05 per share for total cash
of $26,385.
There have been no other issuances of common or preferred stock. These
are the Company's only significant capitalization events to date.
As of June 30, 2002, the Company has 2,027,700 shares of common stock
issued and outstanding held by approximately 90 shareholders of record.
The Company has limited financial resources available, which has had an
adverse impact on the Company's liquidity, activities and operations.
These limitations have adversely affected the Company's ability to obtain
certain projects and pursue additional business. Without realization of
additional capital, it would be unlikely for the Company to continue as a
going concern. In order for the Company to remain a Going Concern it will
need to find additional capital. Additional working capital may be sought
through additional debt or equity private placements, additional notes
payable to banks or related parties (officers, directors or stockholders),
or from other available funding sources at market rates of interest, or a
combination of these. The ability to raise necessary financing will depend
on many factors, including the nature and prospects of any business to be
acquired and the economic and market conditions prevailing at the time
financing is sought. No assurances can be given that any necessary
financing can be obtained on terms favorable to the Company, or at all.
Therefore, management is currently assessing options, so that the Company
can remain a Going Concern. These options include, but are not limited to:
management advancing the Company funding; a 505/506 Offering; or developing
a strategic alliance with a better funded company.
The Company has no material commitments for capital expenditures nor
does it foresee the need for such expenditures over the next year.
Employees
The Company currently has 2 employees who are both officers and
directors of the Company. These employees received no compensation
through June 30, 2002.
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Market Information
On November 30, 2001, the Company's common stock was cleared for trading on
the OTC Bulletin Board system under the symbol FXYJ. A very limited market
exists for the trading of the Company's common stock.
There is currently no Common Stock which subject to outstanding options or
warrants to purchase, or securities convertible into, the Company's common
stock.
Dividends
Holders of common stock are entitled to receive such dividends as the board of
directors may from time to time declare out of funds legally available for the
payment of dividends. No dividends have been paid on our common stock, and we
do not anticipate paying any dividends on our common stock in the foreseeable
future.
Forward-Looking Statements
This Form 10-QSB includes "forward-looking statements" within the meaning
of Section 27A of the Securities Act of 1933, as amended, and Section 21E of
the Securities Exchange Act of 1934, as amended. All statements, other than
statements of historical facts, included or incorporated by reference in this
Form 10-QSB which address activities, events or developments which the Company
expects or anticipates will or may occur in the future, including such things
as future capital expenditures (including the amount and nature thereof),
finding suitable merger or acquisition candidates, expansion and growth of
the Company's business and operations, and other such matters are forward-
looking statements. These statements are based on certain assumptions and
analyses made by the Company in light of its experience and its perception
of historical trends, current conditions and expected future developments as
well as other factors it believes are appropriate in the circumstances.
However, whether actual results or developments will conform with the
Company's expectations and predictions is subject to a number of risks and
uncertainties, general economic market and business conditions; the business
opportunities (or lack thereof) that may be presented to and pursued by the
Company; changes in laws or regulation; and other factors, most of which
are beyond the control of the Company.
This Form10-QSB contains statements that constitute "forward-looking
statements." These forward-looking statements can be identified by the use of
predictive, future-tense or forward-looking terminology, such as "believes,"
"anticipates," "expects," "estimates," "plans," "may," "will," or similar
terms. These statements appear in a number of places in this Registration and
include statements regarding the intent, belief or current expectations of
the Company, its directors or its officers with respect to, among other
things: (i) trends affecting the Company's financial condition or results of
13
operations for its limited history; (ii) the Company's business and growth
strategies; and, (iii) the Company's financing plans. Investors are
cautioned that any such forward-looking statements are not guarantees of
future performance and involve significant risks and uncertainties, and that
actual results may differ materially from those projected in the forward-
looking statements as a result of various factors. Factors that could
adversely affect actual results and performance include, among others, the
Company's limited operating history, potential fluctuations in quarterly
operating results and expenses, government regulation, technological change
and competition.
Consequently, all of the forward-looking statements made in this Form 10-QSB
are qualified by these cautionary statements and there can be no assurance
that the actual results or developments anticipated by the Company will be
realized or, even if substantially realized, that they will have the expected
consequence to or effects on the Company or its business or operations. The
Company assumes no obligations to update any such forward-looking statements.
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PART II OTHER INFORMATION
ITEM 1. Legal Proceedings
The Company is not a party to any legal proceedings.
ITEM 2. Changes in Securities and Use of Proceeds
None.
ITEM 3. Defaults upon Senior Securities
None.
ITEM 4. Submission of Matters to a Vote of Security Holders
During the quarter ended June 30, 2002, no matters were submitted to
the Company's security holders.
ITEM 5. Other Information
None.
ITEM 6. Exhibits and Reports on Form 8-K
(a) Exhibits
99.1 Certification Pursuant to Section 1350 to Chapter 63 of Title 18
of the United States Code as Adopted Pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002.
(b) Reports on Form 8-K
The Company filed a Current Report dated February 15, 2002, pursuant to
Item 5 ("Other Events and Regulation FD Disclosure") entitled "Change of
Company Address."
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SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.
Foxy Jewelry, Inc.
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(Registrant)
Dated: August 17, 2002
By: /s/ Mike Fox
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Michael Fox,
Chairman of the Board
President,
Chief Financial Officer
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