UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q/A
Amendment No. 1
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED NOVEMBER 30, 2011
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: 333-176098
ShopEye, Inc.
--------------
(Exact name of registrant as specified in its charter)
Florida 35-2411642
------- ----------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
Ethelinda Corpuz
108 Flying Mist Isle, Foster City, CA 94404
650-339-1077
-------------------------------------------
(Address of principal executive offices)
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes [X] No [ ]
Indicate by check mark whether the registrant has submitted electronically and
posted on its corporate Web site, if any, every Interactive Data File required
to be submitted and posted pursuant to Rule 405 of Regulation S-T (ss.232.405 of
this chapter) during the preceding 12 months (or for such shorter period that
the registrant was required to submit and post such files). Yes [X] No [ ]
Indicate by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
the definitions of "large accelerated filer," "accelerated filer" and "smaller
reporting company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer [ ] Accelerated filer [ ]
Non-accelerated filer [ ] Smaller reporting company [X]
(Do not check if smaller reporting company)
Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act) Yes [X] No [ ]
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date. 9,000,000 shares of common
stock are issued and outstanding as of November 30, 2011.
EXPLANATORY NOTE
The Company is amending the previously filed Form 10-Q for the period ended
November 30, 2011 for the purpose of including the Evaluation Disclosure
Controls and Procedures in Section 4T.
No other information has been changed from the original filing.
TABLE OF CONTENTS
Page
No.
----
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Balance Sheets at November 30, 2011 (unaudited) and May 31, 2011 .. 4
Statements of Operations .......................................... 5
Statements of Cash Flows .......................................... 6
Notes to Financial Statements (unaudited) ......................... 7
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations. ............................................ 13
Item 3. Quantitative and Qualitative Disclosures About Market Risk. ....... 13
Item 4T. Controls and Procedures. .......................................... 14
PART II - OTHER INFORMATION
Item 1. Legal Proceedings. ................................................ 16
Item 1A. Risk Factors. ..................................................... 16
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds. ...... 16
Item 3. Defaults Upon Senior Securities. .................................. 16
Item 4. Submission of Matters to a Vote of Security Holders. .............. 16
Item 5. Other Information. ................................................ 16
Item 6. Exhibits. ......................................................... 16
2
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION
Certain statements in this report contain or may contain forward-looking
statements. These statements, identified by words such as "plan", "anticipate",
"believe", "estimate", "should", "expect" and similar expressions include our
expectations and objectives regarding our future financial position, operating
results and business strategy. These statements are subject to known and unknown
risks, uncertainties and other factors which may cause actual results,
performance or achievements to be materially different from any future results,
performance or achievements expressed or implied by such forward - looking
statements. These forward-looking statements were based on various factors and
were derived utilizing numerous assumptions and other factors that could cause
our actual results to differ materially from those in the forward-looking
statements. These factors include, but are not limited to, our ability to secure
suitable financing to continue with our existing business or change our business
and conclude a merger, acquisition or combination with a business prospect,
economic, political and market conditions and fluctuations, government and
industry regulation, interest rate risk, U.S. and global competition, and other
factors. Most of these factors are difficult to predict accurately and are
generally beyond our control. You should consider the areas of risk described in
connection with any forward-looking statements that may be made herein. Readers
are cautioned not to place undue reliance on these forward-looking statements,
which speak only as of the date of this report. Readers should carefully review
this report in its entirety, including but not limited to our financial
statements and the notes thereto. We advise you to carefully review the reports
and documents we file from time to time with the Securities and Exchange
Commission (the "SEC"), particularly our quarterly reports on Form 10-Q and our
current reports on Form 8-K. Except for our ongoing obligations to disclose
material information under the Federal securities laws, we undertake no
obligation to release publicly any revisions to any forward-looking statements,
to report events or to report the occurrence of unanticipated events.
OTHER PERTINENT INFORMATION
When used in this report, the terms, "we," the "Company," "our," and "us" refers
to ShopEye, Inc., a Florida corporation.
3
SHOPEYE, INC.
(A Development Stage Enterprise)
BALANCE SHEETS
--------------------------------------------------------------------------------
ASSETS
------
NOVEMBER 30,
2011 MAY 31,
Unaudited 2011
------------ ------------
CURRENT ASSETS
Cash and cash equivalents ........................ $ 3,897 $ 9,000
Accounts receivable .............................. -- --
----------- -----------
Total current assets ........................... $ 3,897 $ 9,000
----------- -----------
----------- -----------
TOTAL ASSETS ..................................... $ 3,897 $ 9,000
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCY)
-------------------------------------------------
CURRENT LIABILITIES
Accounts payable & Accrued liabilities ........... $ 1,200 $ 3,600
----------- -----------
Total liabilities .............................. $ 1,200 $ 3,600
=========== ===========
STOCKHOLDERS' EQUITY (DEFICIENCY)
Capital Stock (Note 4)
Authorized:
20,000,000 preferred shares, $0.0001 par value,
480,000,000 common shares, $0.0001 par value
Issued and outstanding shares:
0 preferred shares and
9,000,000 common shares ......................... $ 900 $ 900
Additional paid-in capital ....................... 8,100 8,100
Stock Subscription Receivable .................... -- --
Deficit accumulated during the development stage . (6,303) (3,600)
----------- -----------
Total Stockholders' Equity (Deficiency) ........ 2,697 5,400
----------- -----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY ....... $ 3,897 $ 9,000
=========== ===========
The financial information presented herein has been prepared by management
without audit by independent certified public accountants.
The accompanying notes should be read in conjunction with
the financial statements
4
SHOPEYE, INC.
(A Development Stage Enterprise)
STATEMENTS OF OPERATIONS
--------------------------------------------------------------------------------
FOR THE PERIOD
THREE MONTHS SIX MONTHS FROM INCEPTION
ENDED ENDED MAY 11, 2011
NOVEMBER 30, NOVEMBER 30, TO NOVEMBER 30,
2011 2011 2011
------------ ------------ ---------------
REVENUES ........................ $ -- $ -- $ --
------------ ------------ ------------
EXPENSES
General & Administrative ...... $ 882 $ 882 $ 982
Professional Fees ............. 600 1,821 5,321
------------ ------------ ------------
1,482 2,703 6,303
Loss Before Income Taxes ........ $ (1,482) $ (2,703) $ (6,303)
------------ ------------ ------------
Provision for Income Taxes ...... -- -- --
------------ ------------ ------------
Net Loss ........................ $ (1,482) $ (2,703) $ (6,303)
============ ============ ============
PER SHARE DATA:
Basic and diluted loss per
common share ................. $ -- $ -- $ --
============ ============ ============
Basic and diluted weighted
average common shares
outstanding .................. 9,000,000 9,000,000 9,000,000
============ ============ ============
Nil = < $0.01
The financial information presented herein has been prepared by management
without audit by independent certified public accountants.
The accompanying notes should be read in conjunction with
the financial statements
5
SHOPEYE, INC.
(A Development Stage Enterprise)
STATEMENTS OF CASH FLOWS
--------------------------------------------------------------------------------
FOR THE PERIOD
SIX MONTHS FROM INCEPTION
ENDED MAY 11, 2011
NOVEMBER 30, TO NOVEMBER 30,
2011 2011
------------ ---------------
OPERATING ACTIVITIES
Net Loss ..................................... $ (2,703) $ (6,303)
------------ ------------
Changes in Operating Assets and Liabilities:
Increase (decrease) in accounts payable
and accrued liabilities ................... (2,400) 1,200
Accounts receivable ........................ -- --
------------ ------------
Net cash used in operating activities ........ (5,103) (5,103)
------------ ------------
FINANCING ACTIVITIES
Common stock issued for cash ................. -- 9,000
------------ ------------
Net cash provided by financing activities .... -- 9,000
------------ ------------
INCREASE IN CASH AND CASH EQUIVALENTS .......... (5,103) 3,897
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 9,000 --
------------ ------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD ..... $ 3,897 $ 3,897
============ ============
Supplemental Cash Flow Disclosures:
Cash paid for:
Interest expense ........................... $ -- $ --
============ ============
Income taxes ............................... $ -- $ --
============ ============
The financial information presented herein has been prepared by management
without audit by independent certified public accountants.
The accompanying notes should be read in conjunction with
the financial statements
6
SHOPEYE, INC.
(A Development Stage Enterprise)
NOTES TO INTERIM FINANCIAL STATEMENTS
NOVEMBER 30, 2011
NOTE 1. GENERAL ORGANIZATION AND BUSINESS
ShopEye, Inc. was founded in May 2011 to provide retailers the ability to
provide a consumer application to provide a consolidated real-time in store
product information service. This product service provides product information,
coupons, ratings, and opinions to enhance the shopping experience.
The application plans to provide the consumer the ability to scan a bar or QR
code (quick response)in order to return all the relevant product information,
receive coupons and offers, and store information to their mobile device to
allow them to make the best purchasing decisions. ShopEye plans to also provide
the consumer the ability to maintain a shopping list, wish-lists, obtain coupons
and offers real time when in the store. The extensive functionality provides the
user a rich experience when shopping in turn building the retailer's revenue and
brand.The Company's management has chosen May 31st for its fiscal year end.
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING PRACTICES
Basis of Presentation
---------------------
The accompanying financial statements have been prepared in accordance with
United States generally accepted accounting principles (US GAAP) for interim
financial information and in accordance with professional standards promulgated
by the Public Company Accounting Oversight Board (PCAOB). They reflect all
adjustments which are, in the opinion of management, necessary for a fair
presentation of the financial position and operating results for the six months
ended November 30, 2011, respectively along with the period May 11, 2011 (date
of inception) to November 30, 2011.
Accounting Basis
----------------
The Company is currently a development stage enterprise reporting under the
provisions of Accounting Standards Codification ("ASC") 915, Development Stage
Entity. These financial statements are prepared on the accrual basis of
accounting in conformity with accounting principles generally accepted in the
United States of America.
Cash and Cash Equivalents
-------------------------
Cash and cash equivalents are reported in the balance sheet at cost, which
approximates fair value. For the purpose of the financial statements cash
equivalents include all highly liquid investments with maturity of three months
or less.
Fair Value of Financial Instruments
-----------------------------------
The fair value of cash and cash equivalents and accounts payable approximates
the carrying amount of these financial instruments due to their short maturity.
7
SHOPEYE, INC.
(A Development Stage Enterprise)
NOTES TO INTERIM FINANCIAL STATEMENTS
NOVEMBER 30, 2011
Earnings (Loss) per Share
-------------------------
The Company adopted ASC 260, Earnings per Share. Basic earnings (loss) per share
are calculated by dividing the Company's net income available to common
shareholders by the weighted average number of common shares outstanding during
the year. The diluted earnings (loss) per share are calculated by dividing the
Company's net income (loss) available to common shareholders by the diluted
weighted average number of shares outstanding for the period. The diluted
weighted average number of shares outstanding is the basic weighted number of
shares adjusted as of the first of the year for any potentially dilutive debt or
equity. There are no diluted shares outstanding.
Dividends
---------
The Company has not adopted any policy regarding payment of dividends. No
dividends have been paid during the period shown
Income Taxes
------------
The Company adopted ASC 740, Income Taxes, at its inception. Under ASC 740,
deferred tax assets and liabilities are recognized for the future tax
consequences attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their respective tax
bases. Deferred tax assets, including tax loss and credit carryforwards, and
liabilities are measured using enacted tax rates expected to apply to taxable
income in the years in which those temporary differences are expected to be
recovered or settled. The effect on deferred tax assets and liabilities of a
change in tax rates is recognized in income in the period that includes the
enactment date. Deferred income tax expense represents the change during the
period in the deferred tax assets and deferred tax liabilities. The components
of the deferred tax assets and liabilities are individually classified as
current and non-current based on their characteristics. Deferred tax assets are
reduced by a valuation allowance when, in the opinion of management, it is more
likely than not that some portion or all of the deferred tax assets will not be
realized. No deferred tax assets or liabilities were recognized as of November
30, 2011.
Advertising
-----------
The Company will expense advertising as incurred. The advertising since
inception has been zero.
Use of Estimates
----------------
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenue and expenses during
the reporting period. Actual results could differ from those estimates.
8
SHOPEYE, INC.
(A Development Stage Enterprise)
NOTES TO INTERIM FINANCIAL STATEMENTS
NOVEMBER 30, 2011
Revenue and Cost Recognition
----------------------------
The Company has no current source of revenue; therefore the Company has not yet
adopted any policy regarding the recognition of revenue or cost.
Related Parties
---------------
Related parties, which can be a corporation, individual, investor or another
entity are considered to be related if the party has the ability, directly or
indirectly, to control the other party or exercise significant influence over
the Company in making financial and operating decisions. Companies are also
considered to be related if they are subject to common control or common
significant influence. The Company has these relationships.
Property
--------
The Company does not own any real estate or other properties. The Company's
office is located at 9866 Oakplace East, Folsom CA 95630.
Recently Issued Accounting Pronouncements
-----------------------------------------
In June 2009, the Financial Accounting Standards Board ("FASB") issued SFAS No.
168, "The FASB Accounting Standards Codification and the Hierarchy of Generally
Accepted Accounting Principles - a replacement of FASB Statement No. 162,"
("SFAS 168"). SFAS 168 establishes the FASB Accounting Standards Codification
("Codification") as the source of authoritative generally accepted accounting
principles ("GAAP") for nongovernmental entities. The Codification does not
change GAAP. Instead, it takes the thousands of individual pronouncements that
currently comprise GAAP and reorganizes them into approximately ninety
accounting topics, and displays all topics using a consistent structure.
Contents in each topic are further organized first by subtopic, then section and
finally paragraph. The paragraph level is the only level that contains
substantive content. Citing particular content in the Codification involves
specifying the unique numeric path to the content through the topic, subtopic,
section and paragraph structure. FASB suggests that all citations begin with
"FASB ASC," where ASC stands for Accounting Standards Codification. Changes to
the ASC subsequent to June 30, 2009 are referred to as Accounting Standards
Updates ("ASU").
In conjunction with the issuance of SFAS 168, the FASB also issued its first
Accounting Standards Update No. 2009-1, "Topic 105 - Generally Accepted
Accounting Principles" ("ASU 2009-1") which includes SFAS 168 in its entirety as
a transition to the ASC.
ASU 2009-1 is effective for interim and annual periods ending after September
15, 2009 and will not have an impact on the Company's financial position or
results of operations but will change the referencing system for accounting
standards.
9
SHOPEYE, INC.
(A Development Stage Enterprise)
NOTES TO INTERIM FINANCIAL STATEMENTS
NOVEMBER 30, 2011
In February 2010, the FASB issued ASU 2010-09 "Subsequent Events - Amendments to
Certain Recognition and Disclosure Requirements" ("ASU 2010-09"), which amends
FASB ASC Topic 855, Subsequent Events, so that SEC filers no longer are required
to disclose the date through which subsequent events have been evaluated in
originally issued and revised financial statements. ASU No. 2010-09 was
effective immediately and the Company adopted these new requirements in the
first quarter of 2010. The adoption did not have a material impact on the
disclosures of the Company's financial statements.
As of November 30, 2011, all citations to the various SFAS' have been eliminated
and will be replaced with FASB ASC as suggested by the FASB in future interim
and annual financial statements.
As of November 30, 2011, the Company does not expect any of the recently issued
accounting pronouncements to have a material impact on its financial condition
or results of operations.
The Company has adopted all recently issued accounting pronouncements. The
adoption of the accounting pronouncements, including those not yet effective, is
not anticipated to have a material effect on the financial position or results
of operations of the Company.
NOTE 3. INCOME TAXES
The Company provides for income taxes under ASC Topic 740 which requires the use
of an asset and liability approach in accounting for income taxes. Deferred tax
assets and liabilities are recorded based on the differences between the
financial statement and tax bases of assets and liabilities and the tax rates in
effect currently.
ASC Topic 740 requires the reduction of deferred tax assets by a valuation
allowance if, based on the weight of available evidence, it is more likely than
not that some or all of the deferred tax assets will not be realized. In the
Company's opinion, it is uncertain whether they will generate sufficient taxable
income in the future to fully utilize the net deferred tax asset.
The Company utilizes the asset and liability method for financial reporting of
income taxes. Deferred tax assets and liabilities are determined based on
temporary differences between financial reporting and the tax basis of assets
and liabilities, and are measured by applying enacted rates and laws to taxable
years in which such differences are expected to be recovered or settled. Any
changes in tax rates or laws are recognized in the period when such changes are
enacted.
As of November 30, 2011, the Company has $2,458 in gross deferred tax assets
resulting from net operating loss carry-forwards. A valuation allowance has been
recorded to fully offset these deferred tax assets because the Company's
management believes future realization of the related income tax benefits is
uncertain. Accordingly, the net provision for income taxes is zero for the
period May 11, 2011 (inception) to November 30, 2011. As of November 30, 2011,
the Company has federal net operating loss carry forwards of approximately
$6,303 available to offset future taxable income through 2030. The difference
between the tax provision at the statutory federal income tax rate on November
30, 2011 and the tax provision attributable to loss before income taxes is as
follows:
10
SHOPEYE, INC.
(A Development Stage Enterprise)
NOTES TO INTERIM FINANCIAL STATEMENTS
NOVEMBER 30, 2011
For the period
May 11, 2011
(Date of Inception)
through
November 30, 2011
-------------------
Statutory federal income taxes ........ 34.0%
State taxes, net of federal benefits .. 5.0%
Valuation allowance ................... -39.0%
-------------------
Income tax rate ....................... -
===================
The Company has not been required to file income tax returns since the date of
inception.
As of November 30, 2011, the Company had estimated net loss carry forwards of
approximately $6,303 which expires through its tax year ending 2031. Utilization
of these net operating loss carry forwards may be limited in accordance with
IRC D Section 382 in the event of certain shifts in ownership.
NOTE 4. STOCKHOLDERS' EQUITY
Preferred Stock
---------------
As of November 30, 2011, the Company did not have any preferred stock
authorized, issued nor outstanding.
Common Stock
------------
On May 19, 2011, the Company issued 9,000,000 of its $0.0001 par value common
stock for $9,000 cash to the founder of the Company. The issuance of the shares
was made to the sole officer and director of the Company and an individual who
is a sophisticated and accredited investor, therefore, the issuance was exempt
from registration of the Securities Act of 1933 by reason of Section 4 (2) of
that Act.
As of November 30, 2011, there are 20,000,000 Preferred Shares at $0.0001 par
value authorized, none issued and 480,000,000 Common Shares at $0.0001 par value
authorized with 9,000,000 issued and outstanding.
NOTE 5. RELATED PARTY TRANSACTIONS
As of November 30, 2011, the sole officer and sole director of the Company is
involved in other business activities and may, in the future, become involved in
other business opportunities that become available. He may face a conflict in
selecting between the Company and other business interests. The Company has not
formulated a policy for the resolution of such conflicts.
11
SHOPEYE, INC.
(A Development Stage Enterprise)
NOTES TO INTERIM FINANCIAL STATEMENTS
NOVEMBER 30, 2011
NOTE 6. GOING CONCERN
As of November 30, 2011, the accompanying financial statements have been
presented on the basis that it is a going concern in the development stage,
which contemplates the realization of assets and the satisfaction of liabilities
in the normal course of business.
For the period May 11, 2011 (date of inception) through November 30, 2011 the
Company has had a net loss of $6,303 consisting of SEC audit and review fees,
California state taxes, and incorporation fees for the Company to initiate its
SEC reporting requirements.
As of November 30, 2011, the Company has not yet emerged from the development
stage. In view of these matters, recoverability of any asset amounts shown in
the accompanying audited financial statements is dependent upon the Company's
ability to begin operations and to achieve a level of profitability. Since
inception, the Company has financed its activities principally from the sale of
equity securities. The Company intends on financing its future development
activities and its working capital needs largely from loans and the sale of
public equity securities with some additional funding from other traditional
financing sources, including term notes, until such time that funds provided by
operations are sufficient to fund working capital requirements.
NOTE 7. CONCENTRATION OF RISKS
Cash Balances
-------------
The Company maintains its cash in institutions insured by the Federal Deposit
Insurance Corporation (FDIC). All other deposit accounts at FDIC-insured
institutions were insured up to at least $250,000 per depositor. The Company had
no deposits in excess of insured amounts as of November 30, 2011.
NOTE 8. SUBSEQUENT EVENTS
The Company has evaluated events and transactions that occurred subsequent to
November 30, 2011 through January 6, 2011, the date the interim financial
statements were available to be issued, for potential recognition or disclosure
in the accompanying financial statements. Other than the disclosures above, the
Company did not identify any events or transactions that should be recognized or
disclosed in the accompanying financial statements.
12
ITEM 2. MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATION
Overview
ShopEye, Inc. is a development stage company and was incorporated in Florida on
May 11, 2011, ShopEye intends to develop software with the goal to provide
retailers the ability to provide a consumer application with consolidated
real-time in store product information. The Company plans to develop the
application to provide product information, coupons, ratings, and opinions to
enhance the shopping experience.
Results of Operations
---------------------
The following discussion should be read in conjunction with the condensed
financial statements and segment data and in conjunction with the Company's Form
S-1 and amendments on Form S-1/A. Results or interim periods may not be
indicative of results for the full year.
During the first quarter of the fiscal year 2011, the Company was focused on
preparing the documentation required to be filed with the Securities and
Exchange Commission (SEC) and with the Financial Industry Regulatory Authority
(FINRA). On August 5, 2011 the Company filed a Registration Form S-1 and also
filed S-1/A Amendment on September 9, 2011, October 3, 2011, October 12, 2011,
October 19, 2011. The registration statement was declared effective on November
1, 2011.
Results of Operations
The Company did not generate any revenue during the six months ended November
30, 2011.
Total expenses for the six (6) months ending November 30, 2011 were $2,703
resulting in an operating loss for the period of $2,703. Basic net loss per
share amounting to $.0001 for the six (6) months ending November 30, 2011.
General and Administrative expenses fees for the six (6) months ending November
30, 2011 were $882. Professional fees were $1,821 for accounting and legal
services.
Total expenses for the three (3) months ended November 30, 2011 were $1,482
resulting in an operating loss for the period of $1,482 as compared to total
expenses of $1,221 for the period ended August 31, 2011. The increase in
expenses was due primarily to professional fees in the quarter ended November
30, 2011.
Liquidity and Capital Resources
-------------------------------
At November 30, 2011 we had working capital of $2,697 consisting of cash on hand
of $3,897,and $1,200 in current liabilities as compared to working capital of
$5,400 at May 31, 2011 and cash of $9,000.
Net cash used in operating activities for the six months ended November 30, 2011
was $5,103 as compared to $0 for the period from inception on May 11, 2011
through May 31, 2011.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
Not applicable to a smaller reporting company.
13
ITEM 4T. CONTROLS AND PROCEDURES
EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES. We maintain "disclosure
controls and procedures" as such term is defined in Rule 13a-15(e) under the
Securities Exchange Act of 1934. In designing and evaluating our disclosure
controls and procedures, our management recognized that disclosure controls and
procedures, no matter how well conceived and operated, can provide only
reasonable, not absolute, assurance that the objectives of disclosure controls
and procedures are met. Additionally, in designing disclosure controls and
procedures, our management necessarily was required to apply its judgment in
evaluating the cost-benefit relationship of possible disclosure controls and
procedures. The design of any disclosure controls and procedures also is based
in part upon certain assumptions about the likelihood of future events, and
there can be no assurance that any design will succeed in achieving its stated
goals under all potential future conditions. Based on her evaluation as of the
end of the period covered by this Quarterly Report on Form 10-Q, our President,
who serves as both our principal executive officer and principal financial and
accounting officer, concluded that our disclosure controls and procedures were
not effective such that the information relating to our company, required to be
disclosed in our Securities and Exchange Commission reports (i) is recorded,
processed, summarized and reported within the time periods specified in SEC
rules and forms, and (ii) is accumulated and communicated to our management,
including our President, to allow timely decisions regarding required disclosure
as a result of the material weaknesses in our internal control over financial
reporting described below.
Management's Report On Internal Control Over Financial Reporting
----------------------------------------------------------------
Our management is responsible for establishing and maintaining adequate internal
control over financial reporting. Internal control over financial reporting is
defined in Rule 13a-15(f) or 15d-15(f) promulgated under the Securities Exchange
Act of 1934 as a process designed by, or under the supervision of, the company's
principal executive and principal financial officers and effected by the
company's board of directors, management and other personnel, to provide
reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with
accounting principles generally accepted in the United States of America and
includes those policies and procedures that:
- Pertain to the maintenance of records that in reasonable detail accurately
and fairly reflect the transactions and dispositions of the assets of the
company;
- Provide reasonable assurance that transactions are recorded as necessary
to permit preparation of financial statements in accordance with
accounting principles generally accepted in the United States of America
and that receipts and expenditures of the company are being made only in
accordance with authorizations of management and directors of the company;
and
- Provide reasonable assurance regarding prevention or timely detection of
unauthorized acquisition, use or disposition of the company's assets that
could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting
may not prevent or detect misstatements. Projections of any evaluation of
effectiveness to future periods are subject to the risk that controls may become
inadequate because of changes in conditions, or that the degree of compliance
with the policies or procedures may deteriorate. All internal control systems,
no matter how well designed, have inherent limitations. Therefore, even those
systems determined to be effective can provide only reasonable assurance with
respect to financial statement preparation and presentation. Because of the
inherent limitations of internal control, there is a risk that material
misstatements may not be prevented or detected on a timely basis by internal
control over financial reporting. However, these inherent limitations are known
features of the financial reporting process. Therefore, it is possible to design
into the process safeguards to reduce, though not eliminate, this risk.
14
As of November 30, 2011 management assessed the effectiveness of our internal
control over financial reporting based on the criteria for effective internal
control over financial reporting established in Internal Control--Integrated
Framework issued by the Committee of Sponsoring Organizations of the Treadway
Commission ("COSO") and SEC guidance on conducting such assessments. Based on
that evaluation, they concluded that, during the period covered by this report,
such internal controls and procedures were not effective to detect the
inappropriate application of US GAAP rules as more fully described below. This
was due to deficiencies that existed in the design or operation of our internal
controls over financial reporting that adversely affected our internal controls
and that may be considered to be material weaknesses.
The matters involving internal controls and procedures that our management
considered to be material weaknesses under the standards of the Public Company
Accounting Oversight Board were: (1) lack of a functioning audit committee due
to a lack of a majority of independent members and a lack of a majority of
outside directors on our board of directors, resulting in ineffective oversight
in the establishment and monitoring of required internal controls and
procedures; (2) inadequate segregation of duties consistent with control
objectives; and (3) ineffective controls over period end financial disclosure
and reporting processes. The aforementioned material weaknesses were identified
by our Chief Executive Officer in connection with the review of our financial
statements as of November 30, 2011.
Management believes that the material weaknesses set forth in items (2) and (3)
above did not have an effect on our financial results. However, management
believes that the lack of a functioning audit committee and the lack of a
majority of outside directors on our board of directors results in ineffective
oversight in the establishment and monitoring of required internal controls and
procedures, which could result in a material misstatement in our financial
statements in future periods.
Management's Remediation Initiatives
------------------------------------
In an effort to remediate the identified material weaknesses and other
deficiencies and enhance our internal controls, we have initiated, or plan to
initiate, the following series of measures:
We will create a position to segregate duties consistent with control objectives
and will increase our personnel resources and technical accounting expertise
within the accounting function when funds are available to us. And, we plan to
appoint one or more outside directors to our board of directors who shall be
appointed to an audit committee resulting in a fully functioning audit committee
who will undertake the oversight in the establishment and monitoring of required
internal controls and procedures such as reviewing and approving estimates and
assumptions made by management when funds are available to us.
Management believes that the appointment of one or more outside directors, who
shall be appointed to a fully functioning audit committee, will remedy the lack
of a functioning audit committee and a lack of a majority of outside directors
on our Board.
We anticipate that these initiatives will be at least partially, if not fully,
implemented by May 31, 2012. Additionally, we plan to test our updated controls
and remediate our deficiencies by February 28, 2012.
Changes in internal controls over financial reporting
-----------------------------------------------------
There was no change in our internal controls over financial reporting that
occurred during the period covered by this report, which has materially
affected, or is reasonably likely to materially affect, our internal controls
over financial reporting.
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PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
None.
ITEM 1A. RISK FACTORS.
Not applicable to a smaller reporting company.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
ITEM 5. OTHER INFORMATION.
None.
ITEM 6. EXHIBITS.
31.1 Rule 13(a)-14(a)/15(d)-14(a) Certification of principal executive
officer
31.2 Rule 13(a)-14(a)/15(d)-14(a) Certification of principal financial and
accounting officer
32.1 Section 1350 Certification of principal executive officer and principal
financial and accounting officer
101* Interactive Data Files of Financial Statements and Notes.
* Previously filed. No changes were made.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
ShopEye, Inc.
BY: /s/ Ethelinda Corpuz
--------------------
Ethelinda Corpuz
President, Secretary, Treasurer,
Principal Executive Officer,
Principal Financial and Accounting
Officer and Sole Director
Dated: August 7, 2013
16