UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13
OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
For the quarterly period ended: September 30, 2003
Or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13
OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
For the transition period from ____________ to _____________
Commission File Number: 000-50013
Originally New York, Inc.
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(Exact name of registrant as specified in its charter)
Nevada 91-2107890
----------------- -------------------
(State or other jurisdiction of (I.R.S. Employer Identification
incorporation or organization) No.)
500 N. Rainbow Blvd., Suite 300 89107
Las Vegas, NV --------
- -------------------------------- (Zip Code)
(Address of principal executive
offices)
(702) 407-8222
---------------------
(Registrant's telephone number, including area code)
N/A
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(Former name, former address and former fiscal year, if changed
since last report)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing requirements
for the past 90 days.
Yes [X] No [ ]
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS
DURING THE PRECEDING FIVE YEARS:
Indicate by check mark whether the registrant has filed all
documents and reports required to be filed by Sections 12, 13 or
15(d) of the Securities Exchange Act of 1934 subsequent to the
distribution of securities under a plan confirmed by a court.
Yes [ ] No [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date:
7,112,018
-1-
ORIGINALLY NEW YORK, INC.
(A Development Stage Company)
Table of Contents
Page
--------
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements 3
Balance Sheet 4
Statements of Operations 5
Statements of Cash Flows 6
Notes 7
Item 2. Management's Discussion and Plan of Operation 9
PART II - OTHER INFORMATION
Item 4. Controls and Procedures 11
Item 6. Exhibits 11
SIGNATURES 12
CERTIFICATION 12
-2-
PART I - FINANCIAL INFORMATION
Item 1. Unaudited Financial Statements
The accompanying unaudited consolidated financial statements
have been prepared in accordance with generally accepted accounting
principles for interim financial reporting and pursuant to the
rules and regulations of the Securities and Exchange Commission
("Commission"). While these statements reflect all normal
recurring adjustments which are, in the opinion of management,
necessary for fair presentation of the results of the interim
period, they do not include all of the information and footnotes
required by generally accepted accounting principles for complete
financial statements. For further information, refer to the
financial statements and footnotes thereto, which are included in
the Company's Registration Statement on Form 10-SB previously filed
with the Commission on September 26, 2002, and subsequent
amendments made thereto.
The accompanying notes are an integral part of these
consolidated financial statements.
-3-
Originally New York, Inc.
(a Development Stage Company)
Balance Sheet
(unaudited)
September 30,
2003
----------------
Assets
Current assets:
Cash $30,807
Inventory 1,714
Prepaid expense 3,099
----------------
Total current assets 35,620
----------------
Fixed assets, net 1,709
Website development, net 2,580
Intangible assets 650
----------------
$40,559
================
Liabilities and Stockholders' Equity
Current liabilities:
Due to shareholder $72
Accrued executive compensation 3,600
----------------
Total current liabilities 3,672
----------------
Stockholders' equity (deficit):
Preferred stock, $0.001 par value, 5,000,000 shares
authorized, no shares issued and outstanding -
Common stock, $0.001 par value, 20,000,000 shares
authorized, 7,112,018 shares issued and outstanding 7,112
Additional paid-in capital 145,729
(Deficit) accumulated during development stage (115,954)
----------------
36,887
----------------
$40,559
================
The accompanying notes are an integral part of these financial
statements.
-4-
Originally New York, Inc.
(a Development Stage Company)
Statements of Operations
(unaudited)
Three Months Ended Nine Months Ended March 12, 2001
September 30, September 30, (Inception) to
2003 2002 2003 2002 September 30, 2003
----------- ---------- --------- --------- ------------------
Revenues $- $- $- $81 $96
Cost of sales - - - 18 23
----------- ---------- --------- --------- ------------------
Gross profit - - - 63 73
----------- ---------- --------- --------- ------------------
Expenses:
General and administrative expenses 3,402 10,244 14,359 18,921 68,221
Commission expense - 1,566 - 9,294 9,294
Consulting expense - related party - 6,000 12,000 11,250 29,250
Executive compensation 1,800 - 5,400 - 6,600
Depreciation & amortization 348 300 1,022 899 2,662
----------- ---------- --------- --------- ------------------
Total expenses 5,550 18,110 32,781 40,364 116,027
----------- ---------- --------- --------- ------------------
Net (loss) $(5,550) $(18,110) $(32,781) $(40,301) $(115,954)
Weighted average number of common shares
outstanding - basic and fully diluted 7,112,018 7,112,018 7,112,018 6,198,403
========== ========== ========== ==========
Net (loss) per share - basic and fully diluted $(0.00) $(0.00) $(0.00) $(0.01)
========== ========== ========== ==========
The accompanying notes are an integral part of these financial
statements.
-5-
Originally New York, Inc.
(a Development Stage Company)
Statements of Cash Flows
(unaudited)
Nine Months Ended March 12, 2001
September 30, (Inception) to
2003 2002 September 30, 2003
----------- ---------- ------------------
Cash flows from operating activities
Net (loss) $(32,781) $(40,301) $(115,954)
Shares issued for services - 5,250 5,250
Depreciation and amortization 1,022 899 2,662
Adjustment to reconcile net (loss) to
net cash (used) by operating activities:
(Increase) in inventory (691) (566) (1,714)
(Increase) in prepaid expense (3,099) - (3,099)
----------- ---------- ------------------
Net cash (used) by operating activities (35,549) (34,718) (112,855)
----------- ---------- ------------------
Cash flows from investing activities
Purchase of fixed assets (656) - (2,651)
Website development - - (4,300)
Intangible assets - - (650)
----------- ---------- ------------------
Net cash (used) by investing activities (656) - (7,601)
----------- ---------- ------------------
Cash flows from financing activities
Issuances of common stock - 92,591 147,591
Increase (decrease) in due to - (1,260) 72
Increase in accrued executive compensation 3,600 - 3,600
----------- ---------- ------------------
Net cash provided by financing activities 3,600 91,331 151,263
----------- ---------- ------------------
Net increase (decrease) in cash (32,605) 56,613 30,807
Cash - beginning 63,412 16,874 -
----------- ---------- ------------------
Cash - ending $30,807 $73,487 $30,807
=========== ========== ==================
Supplemental information:
Interest paid $ - $ - $ -
=========== ========== ==================
Income taxes paid $ - $ - $ -
=========== ========== ==================
Non-cash investing and financing activities:
Shares issued for services provided $ - $5,250 $5,250
=========== ========== ==================
Number of shares issued for services - 75,000 75,000
=========== ========== ==================
The accompanying notes are an integral part of these financial
statements.
-6-
Originally New York, Inc.
(a Development Stage Company)
Notes
Note 1 - Basis of presentation
The interim financial statements included herein, presented in
accordance with United States generally accepted accounting
principles and stated in US dollars, have been prepared by the
Company, without audit, pursuant to the rules and regulations of
the Securities and Exchange Commission. Certain information and
footnote disclosures normally included in financial statements
prepared in accordance with generally accepted accounting
principles have been condensed or omitted pursuant to such rules
and regulations, although the Company believes that the disclosures
are adequate to make the information presented not misleading.
These statements reflect all adjustments, consisting of normal
recurring adjustments, which, in the opinion of management, are
necessary for fair presentation of the information contained
therein. It is suggested that these interim financial statements
be read in conjunction with the financial statements of the Company
for the year ended December 31, 2002 and notes thereto included in
the Company's Form 10-KSB. The Company follows the same accounting
policies in the preparation of interim reports.
Results of operations for the interim periods are not indicative of
annual results.
Note 2 - Going concern
The Company's financial statements are prepared using the generally
accepted accounting principles applicable to a going concern, which
contemplates the realization of assets and liquidation of
liabilities in the normal course of business. However, the Company
has not commenced its planned principal operations and it has
generated minimal revenues. In order to obtain the necessary
capital, the Company raised funds via a securities offering.
Management believes that it has raised enough cash to sustain
business for a period of twelve months. If the equity financing
does not raise sufficient capital, it would be unlikely for the
Company to continue as a going concern.
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.
Note 3 - Prepaid expenses
During the nine month period ended September 30, 2003, the Company
had $3,099 in prepaid expenses which were from a retainer for legal
expenses as related to securing trademarks for the Company.
Note 4 - Fixed assets
The Company purchased $656 in fixed assets during the nine months
ended September 30, 2003. Depreciation expense was recorded in the
amount of $376 during the period ended September 30, 2003.
Note 5 - Web development costs
The Company did not incur any additional web development costs
during the nine months ended September 30, 2003. Amortization
expense was recorded in the amount of $646 during the period ended
September 30, 2003.
Note 6 - Intangible assets
The Company did not incur any additional costs in trademark
application fees during the period ended September 30, 2003 and has
recorded no amortization for the period ended. The Company will
begin amortization upon completion of the process of applying for
multiple trademarks.
-7-
Originally New York, Inc.
(a Development Stage Company)
Notes
Note 7 - Warrants and options
On June 30, 2002, the Company issued 132,273 warrants to purchase
the Company's $0.001 par value common stock on a one-for-one basis.
The warrant exercise price is $0.077 per share of common stock and
substantially all warrants will expire on or before June 30, 2005.
During the nine-month period ended September 30, 2003, no warrants
have been exercised.
Note 8 - Related party transactions
As of September 30, 2003, a shareholder, officer and director of
the Company paid for various expenses of the Company and he is
currently owed $72. The total amount due to the individual is a
loan that bears zero interest and is due on demand.
On July 1, 2002, the Company hired a shareholder on a month-to-
month basis to perform various consulting services at a monthly
rate of $2,000. During the nine months ended September 30, 2003,
the Company paid this shareholder a total of $12,000.
On November 1, 2002, the Company agreed to compensate the president
on a month-to-month basis to perform various administrative
services at a monthly rate of $600. During the nine months ended
September 30, 2003, the Company paid this shareholder a total of
$1,800 and had accrued executive compensation of $3,600.
-8-
Item 2. Management's Discussion and Plan of Operation
Forward-Looking Statements
This Quarterly Report contains forward-looking statements
about Originally New York, Inc.'s business, financial condition and
prospects that reflect management's assumptions and beliefs based
on information currently available. We can give no assurance that
the expectations indicated by such forward-looking statements will
be realized. If any of our management's assumptions should prove
incorrect, or if any of the risks and uncertainties underlying such
expectations should materialize, ONY's actual results may differ
materially from those indicated by the forward-looking statements.
The key factors that are not within our control and that may
have a direct bearing on operating results include, but are not
limited to, acceptance of our services, our ability to expand our
customer base, managements' ability to raise capital in the future,
the retention of key employees and changes in the regulation of our
industry.
There may be other risks and circumstances that management may
be unable to predict. When used in this Quarterly Report, words
such as, "believes," "expects," "intends," "plans,"
"anticipates," "estimates" and similar expressions are intended to
identify forward-looking statements, although there may be certain
forward-looking statements not accompanied by such expressions.
Plan of Operation
We were incorporated in the State of Nevada on March 12, 2001,
under the name Originally New York, Inc. We market a proprietary
line of sports and athletic garments bearing our logo or a unique
City of New York Public School designation. For example, we sell
pre-shrunk cotton t-shirts with the "P.S 64, Bronx, N.Y."
embroidered logo, wrist watches with our company name on the
faceplate and hats with our abbreviated company name embroidered on
it. We currently have ten different items for sale on our web
site. Since our inception on March 12, 2001, we have generated $96
in revenue from sales of our products and incurred expenses in the
amount of $116,027.
We have entered into a verbal understanding with Norman
Silverman, Inc., to distribute wrist-watches that display our name
on the faceplate, which he produces for us. Under this arrangement
we market these watches on our web site. For each watch that sold
through our web site, we earn a sales commission. We have not sold
any watches, to date, and thus have not generated any commissions
from sales of Norman Silverman, Inc.'s watches.
Peter Young & Associates manufactures our logoed apparel on a
purchase order basis. As we require merchandise, we will place a
one-time order with that company. We have no agreements with Peter
Young & Associates to manufacture any product on an extended basis.
From our inception to September 30, 2003, we have devoted our
activities to the following:
1. Formation of the Company and obtaining start-up capital,
2. Developing our products and graphic designs,
3. Establishing and reworking our web site,
4. Seeking protection for our intellectual property and
5. Organizing our production and fulfillment capabilities.
We have established our web site, developed various designs
and logos for use on our merchandise and obtained working capital
through sales of our equity securities. Our website,
www.originallynewyork.com, serves as the core of our revenue
generating operations. All of our revenues to date have been
generated from sales through this Internet site. We continuously
evaluate possibilities to develop, refine or rework our web site to
attempt to generate increased traffic and resultant sales. The
development, refinement and working of our web site is being
contracted to third party web designers, who also provide marketing
assistance and web hosting services. We expect to incur fees for
the continuous refinement of our web site, which fees are
determined solely by our web designers.
-9-
Our current revenues are significantly dependent upon sales of
our proprietary products. To alleviate our dependence upon sales
of our products, we entered into an affiliate program, whereby we
would earn a fee from sales derived from customers who link to the
affiliate's site. We have since terminated our participation in
this affiliate program due to a lack of success in this venture.
The affiliate program did not cost us anything to participate. We
have not experienced any revenues through this affiliate program.
To further diversify our revenue generating capacity, we
intend to contract independent sales representatives to sell our
merchandise directly to retail stores. These representatives will
be paid on a commission basis and will not be paid a salary, thus
our cash on hand will not be affected. However, we have not
engaged such individuals as of the date of this registration
statement. We will continue to attempt to engage agents to sell
our products by contacting acquaintances and associates of our
officers and directors. However, we cannot assure you that we will
be able to entice such persons to work with us in the future.
Our management does not anticipate the need to hire additional
full- or part- time employees over the next 12 months, as the
services provided by our officers and directors appear sufficient
at this time. We believe that our operations are currently on a
small scale that is manageable by a few individuals. We outsource
for the manufacture of our products, as well as the hosting and
maintenance of our web site, thus our responsibilities are related
predominantly to graphic design and administrative duties.
Additionally, our marketing and advertising efforts are mainly
conducted via the Internet, and can be designed by our current
staff or our third-party Internet services firm. While we believe
that the addition of employees is not required over the next 12
months, we intend to contract sales representatives to market our
products for us on an independent contractor basis. These
representatives are not intended to be employees of our company.
We currently do not own any significant plant or equipment
that we would seek to sell in the near future.
We have not paid for expenses on behalf of any of our
directors. Additionally, we believe that this fact shall not
materially change.
As of September 30, 2003, we had $30,807 of cash on hand and
$1,714 in inventory. Our current assets are sufficient to meet our
current liabilities of $3,672. Our management believes that
current cash resources are sufficient to satisfy our cash
requirements over the next 12 months. However, our independent
auditors have expressed substantial doubt about our ability to
continue as a going concern because we have limited operations and
have not commenced planned principal operations. If our costs of
operations increase unexpectedly, we may need to raise additional
capital by issuing equity or debt securities in exchange for cash.
Notwithstanding this, there can be no assurance that we will be
able to secure additional funds in the future to stay in business.
-10-
Item 3. Controls and Procedures
Within 90 days prior to the date of filing of this report, we
carried out an evaluation, under the supervision and with the
participation of our management, including the Chief Executive
Officer and our Chief Financial Officer, of the design and
operation of our disclosure controls and procedures. Based on this
evaluation, our Chief Executive Officer and Chief Financial Officer
have concluded that our disclosure controls and procedures are
effective for gathering, analyzing and disclosing the information
we are required to disclose in the reports we file under the
Securities Exchange Act of 1934, within the time periods specified
in the SEC's rules and forms. There have been no significant
changes in our internal controls or in other factors that could
significantly affect internal controls subsequent to the date of
this evaluation.
PART II - OTHER INFORMATION
Item 6. Exhibits
Exhibit Name and/or Identification of Exhibit
Number
3 Articles of Incorporation & By-Laws
(a) Articles of Incorporation (1)
(b) By-Laws (1)
31 Rule 13a-14(a)/15d-14(a) Certifications
(a) Leonard H. Luner
(b) Stuart S. Luner
32 Certification under Section 906 of the Sarbanes-Oxley Act
(18 U.S.C. Section 1350)
(1) Incorporated by reference to the exhibits to the Company's
General Form for Registration of Securities of Small Business
Issuers on Form 10-SB, filed on September 26, 2002.
-11-
SIGNATURES
Pursuant to the requirements of the Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.
ORIGINALLY NEW YORK, INC.
---------------------------
(Registrant)
By: /s/ Leonard H. Luner
------------------------
Leonard H. Luner, President
-12-