UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM 10-Q/A
(Amendment No. 1)
(Mark One)
☒ QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
For the quarterly period ended November 30, 2016

  ☐ TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
 
For the transition period from ____________ to ____________
 
Commission file number:   333-180954
 
Joey New York Inc.
(Exact name of small business issuer as specified in its charter)

Nevada
 
68-0682410
(State or other jurisdiction of
incorporation or organization)
 
(IRS Employer
Identification No.)
 
Trump Tower I, 16001 Collins Ave. #3202,
          Sunny Isles Beach, FL 33160        
(Address of principal executive offices)
 
                                (305) 948-9998                               
(Registrants telephone number, including area code)
_____________________________________________________________
(Former name, former address and former fiscal year, if changed since last report)
 
Indicate by check mark whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  
☒ Yes     ☐ No
 
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).   ☒ Yes      ☐ No
 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company; as defined within Rule 12b-2 of the Exchange Act.
 
☐
Large accelerated filer
 
☐
Accelerated filer
 
☐
Non-accelerated filer
 
☒
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    ☒ No
 
The number of shares outstanding of each of the issuer's classes of common equity as of January 16, 2017 was  28,295,352 shares of common stock.
 
 



 Contents
 
 
 
 
 
Part 1   
FINANCIAL INFORMATION
 
 
 
 
Item 1
Consolidated Financial Statements (unaudited)
 
 
 
 
   
Consolidated Balance Sheets at  November 30 , 2016 and February 29, 2016 (unaudited)
4
 
 
 
      
Consolidated  Statements of Operations for the three  and nine  month periods ending  November 30 , 2016 and 2015 (unaudited)
5
 
 
 
 
Consolidated  Statements of Cash Flows for the nine month periods ending  November 30 , 2016 and 2015 (unaudited)
6
 
 
 
 
Notes to Consolidated Financial Statements (unaudited)
7
 
 
 
Item 2.   
Management's Discussion and Analysis of Financial Condition and Results of Operations
14
 
 
 
Item 4.
Controls and Procedures
15
 
 
 
 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      
Mine Safety Disclosures
16
 
 
 
 Item 5  
Other Information
16
 
 
 
 Item 6
Exhibits
17
 
 
 
 
SIGNATURES
18
 
 

 
 
- 2 -
 
 
 
EXPLANATORY NOTE
 
Joey New York, Inc. is filing this Amendment No. 1 to the Form 10-Q for the period ended November 30, 2016, previously filed on January 17 2017, to provide interactive data required by SEC rules and regulations.  The last two notes in the financials were renumbered for accuracy.

 
 
 
PART I - FINANCIAL INFORMATION

Item 1 - Financial Statements
 

Joey New York, Inc .
Consolidated Balance Sheets
For the periods ended November 30, 2016 and 2015
(Unaudited)
 

 
Page
Financial Statements (Unaudited):
 
   Consolidated Balance Sheets
 4
   Consolidated Statements of Operations
 5
   Consolidated Statements of Cash Flows
 6
   Notes to Unaudited Consolidated Financial Statements
 7




- 3 -


Joey New York, Inc .
Consolidated Balance Sheets
For the periods ended November 30, 2016 and 2015
(Unaudited)

 
 
   
November 30, 2016
   
February 29, 2016
 
Assets
           
Current assets
           
  Cash and cash equivalents
 
$
12,086
   
$
7,903
 
  Accounts receivable, net
   
275
     
132
 
  Inventory
   
157,346
     
43,326
 
 
Total current assets
   
169,707
     
51,361
 
Goodwill
   
180,150
     
-
 
Property and equipment, net
   
19,711
     
3,457
 
 
Total assets
 
$
369,568
   
$
54,818
 
                 
Liabilities and stockholders' deficit
               
Current liabilities
               
  Accounts payable
 
$
573,802
   
$
156,975
 
  Accrued liabilities
   
549,533
     
424,135
 
  Shareholder advances – related party
   
628,579
     
612,737
 
 Notes payable – related party
   
3,000,000
     
3,000,000
 
 
Total current liabilities
   
4,751,914
     
4,193,847
 
Total liabilities
   
4,751,914
     
4,193,847
 
                 
Commitments and Contingencies
               
                 
Stockholder's deficit
               
  Common stock, $0.001 par value; 500,000,000 shares
    authorized; 28,045,352 and 350,676 shares issued and
    outstanding
   
28,045
     
351
 
  Additional paid in capital
   
(2,471,369
)
   
(2,740,863
)
Equity attributable to non-controlling interest
   
(54,101
)
       
  Stock subscription receivable
   
(1,000
)
   
-
 
  Accumulated deficit
   
(1883,921
)
   
(1,398,517
)
    Total stockholder's deficit
   
(4,382,346
)
   
(4,139,029
)
Total liabilities and stockholder's equit y
 
$
369,568
   
$
54,818
 
 
The Accompanying Notes are an Integral Part of These Financial Statements
 
 
 

 
- 4 -
 

Joey New York, Inc.
Consolidated Statements of Operations
For the periods ended November 30, 2016 and 2015
(Unaudited)
 
 
   
Three Months Ended
November 30,
   
Nine Months Ended
November 30,
 
   
2016
   
2015
(Restated)
   
2016
   
2015
(Restated)
 
 
Revenues
 
$
178,181
   
$
305
   
$
223,894
   
$
54,596
 
Cost of sales
   
65,912
     
227
     
67,885
     
42,888
 
 
Gross margin
   
112,269
     
78
     
156,008
     
11,707
 
                                 
Operating expenses
   
352,327
     
62,898
     
559,500
     
149,115
 
                                 
Loss from operations
   
(240,058
)
   
(62,820
)
   
(403,492
)
   
(137,408
)
                                 
Other (expense)
                               
Interest expense
   
(45,694
)
   
(43,421
)
   
(136,013
)
   
(132,261
)
                                 
Loss before non-controlling interest
   
(285,752
)
   
(106,240
)
   
(539,505
)
   
(269,669
)
                                 
Non-controlling interest
   
(54,101
)     
-
     
(54,101
)     
-
 
                                 
Net loss attributable to Joey New York shareholders
 
$
(231,651
)
 
$
(106,240
)
 
$
(485,404
)
 
$
(269,669
)
 
Basic and diluted loss per share
 
$
(0.01
)
 
$
(0.30.
)
 
$
(0.19
)
 
$
(0.77
)
                                 
Weighted average shares outstanding
   
28,295,352
     
350,676
     
28,045,352
     
350,264
 
 
The Accompanying Notes are an Integral Part of These Financial Statements
 
 
 
 
- 5 -


Joey New York, Inc.
Consolidated Statements of Cash Flows
For the Nine Months ended November 30, 2016 and 2015
(Unaudited)
 
 
       
2015
 
   
2016
   
(Restated)
 
Cash flows from operating activities
           
Net loss attributable to shareholders of Joey New York
 
$
(485,404
)
 
$
(269,669
)
Adjustments to reconcile net income to net cash provided
               
  by operating activities:
               
     Non-controlling interest
   
(54,101
)
   
-
 
    Depreciation and amortization
   
3,856
     
491
 
  Changes in operating assets and liabilities:
               
    Accounts receivable
   
(143
)
   
531
 
    Inventory
   
(114,020
)
   
31,249
 
    Accounts payable
   
416,827
     
144,244
 
    Accrued expenses
   
125,398
     
-
 
     
(107,587
)
   
(93,153
)
Net cash used in operating activities
                 
Cash flows from investing activities
               
Purchases of property and equipment
   
(20,110
)
   
(1,219
)
     
(20,110
)
   
(1,219
)
Net cash used in investing activities
                 
Cash flows from financing activities
               
  Proceeds from the sale of common stock
   
116,038
     
50,005
 
  Proceeds from related party advances
   
15,842
     
39,499
 
     
131,880
     
89,504
 
Net cash from financing activities
                 
Net change in cash and cash equivalents
   
4,183
     
(4,868
)
  Cash and cash equivalents, beginning of period
   
7,903
   
$
5,063
 
   
$
12,086
     
195
 
Cash and cash equivalents, end of period
                 
Supplemental disclosure of cash flow information
               
  Interest paid
 
$
-
   
$
-
 
  Income taxes paid
 
$
-
   
$
-
 
Common shares and warrants issued for acquisition of subsidiary
 
$
180,150
   
$
-
 
                 
The Accompanying Notes are an Integral Part of These Financial Statements
         
 

 
- 6 -
 

Joey New York, Inc.
Notes to Consolidated Financial Statements
(Unaudited)


NOTE 1 - NATURE OF BUSINESS
ORGANIZATION
Joey New York, Inc. ("the Company") was incorporated under the laws of the State of Nevada on December 22, 2011.  Effective August 27, 2013, the Board of Directors approved a name change to Joey New York, Inc.  On May 12, 2014, the Company merged with a Florida limited liability company, RAR Beauty, LLC, which distributes natural skin care and beauty products on the wholesale and retail levels and operates under the name of Joey New York and with Pronto Corp a registered company.  The Company accounted for the acquisition as a reverse merger whereby, the operations of RAR Beauty, LLC is the continuing entity for financial reporting purposes and the former members of RAR Beauty, LLC owning approximately 75% of the Company.
The Company doing business under the name Joey New York, distributes natural skin care and beauty products on wholesale and retail levels.
On August 11, 2016, the Company entered a purchase agreement for the acquisition of 100% of the common stock of Reflex Productions, Inc. (Reflex) Reflex provides clinical cosmetic procedures including Botox injections and other cosmetic procedures.
The financial statements include the consolidated accounts of Joey New York and Reflex.
The Company's headquarters is based in Sunny Isles Beach, Florida. The Company seeks to increase market share and introduce its product line through multiple channel markets. The Company faces competition from nationally recognized firms that may have greater resources of personnel, capitalization, and reputation. The Company has therefore concentrated its efforts on product quality and performance.
Joey New York product lines include skin care treatments and beauty enhancements that are health conscious, effective and affordable. In keeping with our beauty mission, we have utilized the water from tender young green coconuts, blended with Indian ginseng extract, into our new fast-acting QUICK RESULTS skincare collection.
 
NOTE 2 - BASIS OF PRESENTATION
The accompanying financial statements have been prepared in accordance with generally accepted accounting principles of the United States of America ("GAAP") for interim financial statements pursuant to the rules and regulations of the Securities and Exchange Commission.  Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the three and nine month periods ended November 30, 2016, are not necessarily indicative of the results that may be expected for the year ending February 29, 2017.  These financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the fiscal year ended February 29, 2016, as filed with the Securities and Exchange Commission ("SEC") on June 2, 2016.
The preparation of financial statements in conformity with GAAP 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 as well as the reported amount of revenues and expenses during the reporting period.  Actual results may differ from these estimates.


- 7 -



Joey New York, Inc.
Notes to Consolidated Financial Statements
(Unaudited)


 
NOTE 3 - SIGNIFICANT ACCOUNTING POLICIES
CONSOLIDATIONS POLICY
These financial statements include the consolidated accounts of Joey New York and its wholly owned subsidiary. Intercompany accounts and transactions have been eliminated in consolidation.
USE OF ESTIMATES
The preparation of financial statements in conformity with U.S. general accepted accounting principles 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 consolidated financial statements, and reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
NET INCOME (LOSS) PER COMMON SHARE
Net income (loss) per share is calculated in accordance with ASC 260, " Earnings Per Share ."  The weighted-average number of common shares outstanding during each period is used to compute basic earning or loss per share.  Diluted earnings or loss per share is computed using the weighted average number of shares and diluted potential common shares outstanding.  Dilutive potential common shares are additional common shares assumed to be exercised.
Basic net income (loss) per common share is based on the weighted average number of shares of common stock outstanding at November 30, 2016 and 2015.  Due to net operating loss, there is no presentation of dilutive earnings per share, as it would be anti-dilutive. As of August 31, 2016, the Company had no dilutive potential common shares.
COMMITMENTS AND CONTINGENCIES
The Company follows ASC 450-20, "Loss Contingencies," to report accounting for contingencies.  Liabilities for loss contingencies arising from claims, assessments, litigation, fines and penalties and other sources are recorded when it is probable that a liability has been incurred and the amount of the assessment can be reasonably estimated.  There were no commitments or contingencies as of November 30, 2016.
RECENTLY ACCOUNTING PRONOUNCEMENTS
Recent accounting pronouncements issued by the FASB (Accounting Standards Update, including its Emerging Issues Task Force), the AICPA, and the SEC did not, or are not believed by management to, have a material impact on the Company's present or future consolidated financial statements.
 
 

- 8 -



Joey New York, Inc.
Notes to Consolidated Financial Statements
(Unaudited)

 
 
NOTE 4 - GOING CONCERN
The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and the liquidation of liabilities in the normal course of business.  For the nine months ended November 30, 2016 the Company has incurred a loss from operations of $539,505. The Company has a history of losses resulting in an accumulated deficit of $ 1,883,921 as of November 30, 2016.    The Company has negative working capital, in the amount of $ 4,582,207 , as of November 30, 2016.  The Company intends to fund operations and continuing product development through debt and equity financing arrangements, which efforts may be insufficient to fund its capital expenditures, working capital and other cash requirements.  The Company cannot be certain that it will be successful in its efforts to attain such capital or that the terms of capital will be at acceptable terms.
These factors, among others, raise substantial doubt about the Company's ability to continue as a going concern.  The accompanying consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.
NOTE 5 - PROPERTY AND EQUIPMENT
Property consists of equipment purchased for the production of revenues.  As of November 30, 2016 and February 29, 2016:
   
November 30, 2016
   
February 29, 2016
 
 
Property and equipment
 
$
30,568
   
$
10,459
 
Less accumulated depreciation
   
10,858
     
7,002
 
 
Property and equipment, net
 
$
19,711
   
$
3,457
 

Depreciation for the nine months ending November 30, 2016 and 2015 was $3,856 and $491, respectively.
NOTE 6 - RELATED PARTY TRANSACTIONS
The Company's management has advanced funds and has made payments on behalf of the Company for meeting obligations.  These accumulated advances have been formalized by demand notes payable and accrue interest at 2.6%.  The Company is indebted to its two majority shareholders for an aggregate amount of $628,579 and $612,737, as of November 30, 2016 and February 29, 2016, respectively.
Amounts advanced during the nine month periods ended November 30, 2016 and 2015 amounted to $15,842 and $39,499, respectively.
NOTE 7 - RELATED PARTY NOTES PAYABLE
On May 12, 2014, in accordance with the acquisition agreement, the Company issued promissory notes payable, amounting $3,000,000 to its two majority shareholders.  The terms of the notes (2, each at $1,500,000) are at a stated interest rate of 5% and mature on May 12, 2016.
On May 12, 2016, the promissory notes were renewed and are at a stated interest rate of 5% and mature on May 12, 2017.
NOTE 8 - EQUITY
The Company is authorized to issue 500,000,000 shares of $0.001 par value common stock.
On February 26, 2016 Joey New York, Inc. ("JOEY" or the "Company") entered into an Agreement and Plan of Merger with its wholly-owned subsidiary, Joey Merger Subsidiary, Inc., a Nevada Corporation ("Merger Sub"), with Merger Sub being the surviving entity but with a name change to Joey New York, Inc..   As part of that merger, each 200 shares of our common stock were exchanged for one share in the surviving company.  The officers and directors of JOEY remain the officers and directors subsequent to the merger.  The reverse exchange ratio of 1 share for 200 shares became effective on August 1, 2016 on the stock market upon review by and approval by the Financial Industry Regulatory Authority ("FINRA").
During the three months ended August 31, 2016, the company issued 25,500,000 shares of common stock, 25,000,000 of which were issued in order to acquire a 100% interest in The LABB, LLC. (see note 9).
 

 

- 9 -




Joey New York, Inc.
Notes to Consolidated Financial Statements
(Unaudited)


In connection with the acquisition mentioned above, the Company also issued 42,000,000 warrants, each valued at $.009. These warrants were valued using a Black-Scholes model, with the following inputs:

Description
 
Input
 
 
Stock price
 
$
0.01
 
Exercise price
 
$
0.01
 
Term
 
10 years
 
Discount rate
   
2.28
%
Volatility
   
100
%

The stock price of $0.01 was used because with no active market for the Company's stock, the best evidence for its value on the grant date was the exercise price of the warrants.
On October 4, 2016, the Company issued 100,000 restricted shares to an investor for $30,000 cash.
On October 14, 2016, the Company issued 33,333 restricted shares to an investor for $10,000 cash.
On October 17, 2016, the Company issued 50,000 restricted shares to an investor for $15,000 cash.
NOTE 9 - ACQUISITION OF REFLEX PRODUCTIONS, INC.
On August 11, 2016, the Company entered a purchase agreement for the acquisition of 100% of the common stock of Reflex Productions, Inc. (Reflex) At the time of the acquisition, Reflex owned a fifty-one percent interest in the LABB, Inc.(LABB). LABB provides clinical cosmetic procedures including Botox injections and other cosmetic procedures.
In exchange for the common stock of Reflex the Company issued 25,000,000 restricted shares of its common stock and 42,000,000 warrants to the owners of Reflex. A business combination accounted for as an acquisition is generally required to be valued at whichever value is more readily determinable, the value of the consideration received or the value of the net assets acquired. At the date of acquisition Joey New York shares were very thinly traded and due to the proximity of the reverse stock split, prices quoted on national exchanges had not properly taken the impact of the reverse split into consideration. We concluded that the value of the shares and warrants issued in exchange for the assets was not readily determinable as of that date. Likewise, Reflex was a startup entity and although it has significant operations from inception, the determination was made that general and administrative expenses, as well as marketing and business development expense could not adequately be projected. Accordingly, the value of the entity was determined to be zero and the acquisition was recorded and its net asset value as described below.

The entirety of the value of the equity instruments issued was recorded as goodwill. Net assets acquired in the acquisition consisted of the following:
Description
 
Amount
 
 
Cash
 
$
8,995
 
Other current assets
   
4,460
 
Property and equipment, net
   
15,893
 
Accounts payable and accrued expenses
   
(209,498
)
 
Net assets acquired
 
$
(180,150
)
         
 
 

- 10 -

 
Joey New York, Inc.
Notes to Consolidated Financial Statements
(Unaudited)
 
Reflex accounts are consolidated in these financial statements, in accordance with generally accepted accounting principles. Operations of Reflex have been consolidated from the date of acquisition or August 11, 2016.
NOTE 10 – SEGMENT DISCLOSURES
Management evaluates operations in terms of three separate segments, sales of cosmetics, medical procedures and general corporate overhead. Medical procedures are further segmented by geographical location although for the three and nine-month periods ended November 30, 2016 there was only one significant location through which medical facilities were provided.
Prior to the acquisition of the LABB or August 11, 2016 there was only one operating segment.
Revenue, cost of revenue and general and administrative expenses for the three month period ended November 30, 2016 are detailed as follows:
Description
 
LABB
   
RAR
   
Total
 
 
Revenue
 
$
178,818
   
$
-
   
$
178,181
 
Cost of revenue
   
65,011
     
901
     
65,912
 
General and administrative expenses
   
226,974
     
125,354
     
352,327
 
Interest expense
   
-
     
45,694
     
45,694
 
 
Net loss
 
$
(113,804
)
 
$
(171,949
)
 
$
(285,752
)

Revenue, cost of revenue and general and administrative expenses for the nine-month month period ended November 30, 2016 are detailed as follows:
Description
 
LABB
   
RAR
   
Total
 
 
Revenue
 
$
223,751
   
$
143
   
$
223,894
 
Cost of revenue
   
66,919
     
967
     
67,885
 
General and administrative expenses
   
267,242
     
292,259
     
559,500
 
Interest expense
   
-
     
136,013
     
136,013
 
 
Net loss
 
$
(110,410
)
 
$
(429,095
)
 
$
(539,505
)

Assets, liabilities and equity accounts by segment as of November 30, 2016 are detailed as follows:
Description
 
LABB
   
RAR
   
Total
 
 
Asset
 
$
141,407
   
$
194,845
   
$
265,006
 
Liability
   
323,289
     
4,509,581
     
4,657,062
 
 
Equity
 
$
(181,882
)
 
$
(4,314,736
)
 
$
(4,392,056
)

Operations of LABB which are the medical procedures segment included for the period from acquisition to November 30, 2016 include revenue of $223,751, cost of sales of $66,919 and operating expenses of $267,242.

 
- 11 -

 
 
Joey New York, Inc.
Notes to Consolidated Financial Statements
(Unaudited)
 
 
Total operations of LABB for the period from inception to November 30, 2016 amounted to revenues of $343,865, cost of sales of $126,080 and operating expenses of $430,582. Of these amounts, revenue of $120,114 and cost of goods sold of $59,161 have been excluded from the statement of operations as they were incurred prior to the date of acquisition.
NOTE 11 - COMMITMENTS AND CONTINGENCIES
Risks and Uncertainties
The Company's operations are subject to significant risks and uncertainties including financial, operational and regulatory risks, including the potential risk of business failure.
Related Party
The controlling members have pledged support to fund continuing operations; however there is no written commitment to this effect.  The Company is dependent upon the continued support of these parties in the immediate future, in order to meet its current obligations, until such time that revenues are generated to meet all current obligations or until such time that adequate capital is raised for its growth plans.
The Company has limited needs for office administration and does not own or lease property or lease office space. The office space used by the Company was arranged by the officers and directors of the Company to use at no charge.
The Company does not have employment contracts with its key employees, including the controlling shareholders who are officers of the Company.
The amounts and terms of the above transactions may not necessarily be indicative of the amounts and terms that would have been incurred had comparable transactions been entered into with independent third parties.
Legal and other matters
In the normal course of business, the Company may become a party to litigation matters involving claims against the Company.   The Company's management is unaware of any pending or threatened assertions and there are no current matters that would have a material effect on the Company's financial position or results of operations.
NOTE 12 - SUBSEQUENT EVENTS
Management has evaluated subsequent events through the date of filing the consolidated financial statements with the Securities and Exchange Commission, the date the consolidated financial statements were available to be issued.  Management is not aware of any significant events that occurred subsequent to the balance sheet date that would have a material effect on the consolidated financial statements thereby requiring adjustment or disclosure, other than those noted below:
On December 23, 2016, the Company issued 83,333 restricted shares to an investor for $10,000 cash.
On December 28, 2016, the Company issued 166,667 restricted shares to an investor for $50,000 cash.
 
 
- 13 -
 
 
 
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION
 GENERAL
Joey New York, Inc. was incorporated under the laws of the State of Nevada as Pronto Corp. on December 22, 2011.  Our registration statement has been filed with the Securities and Exchange Commission on April 26, 2012 and was declared effective on August 27, 2012.  Effective August 27, 2013, the Board of Directors approved a name change to Joey New York, Inc.  On May 12, 2014, the Company merged with a Florida limited liability company, RAR Beauty, LLC, which distributes natural skin care and beauty products on the wholesale and retail levels and operates under the name of Joey New York and with Pronto Corp a registered company.  The Company accounted for the acquisition as a reverse merger whereby, the operations of RAR Beauty, LLC is the continuing entity for financial reporting purposes and the former members of RAR Beauty, LLC own approximately 75% of the Company.
On August 11, 2016, the Company entered a purchase agreement for the acquisition of 100% of the common stock of Reflex Productions, Inc. (Reflex) Reflex provides clinical cosmetic procedures including Botox injections and other cosmetic procedures.
  Forward-Looking Statements
The following discussion should be read in conjunction with our consolidated financial statements, which are included elsewhere in this Form 10-Q (the "Report"). This Report contains forward-looking statements which relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as "may," "should," "expects," "plans," "anticipates," "believes," "estimates," "predicts," "potential" or "continue" or the negative of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties, and other factors that may cause our or our industry's actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements.
For a description of such risks and uncertainties refer to our Registration Statement on Form S-1, on our Annual Report on Form 10-K and on our filings of Form 8-K with the Securities and Exchange Commission. While these forward-looking statements, and any assumptions upon which they are based, are made in good faith and reflect our current judgment regarding the direction of our business, actual results will almost always vary, sometimes materially, from any estimates, predictions, projections, assumptions or other future performance suggested herein.  Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results.
 RESULTS OF OPERATION
Nine months ended November 30, 2016 & 2015:
Revenues were $223,894 and $54,596 for the nine month periods ending November 30, 2016 and 2015, respectively.  Our gross profit was $156,008 and $11,707 for the nine months ended November 30, 2016 and 2015, respectively.  Fluctuations in our profit margins will be due to product mix and minor increases in our product costs.
During the nine month periods ended November 30, 2016, we incurred $695,513 in operating expenses compared to $149,115 for the nine-month period ended November 30, 2015.  The increase primarily results from increased marketing expenses related to the opening of our new clinic.
Three months ending November 30, 2016 and 2015:
Revenues were $178,181 and $305 for the three months ended November 30, 2016 and 2015, respectively.  The increase in sales was primarily due to clinic operations as a result of the acquisition of August 11, 2016.    Our gross profit was $112,269 and $78 for the three-month periods ended November 30, 2016 and 2015, respectively.  The increase resulted from clinic operations from August 11, 2016 as noted earlier.
 
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During the three months ended November 30, 2016, we incurred $352,327 in operating expenses compared to $62,898 for the three months ended November 30, 2015.  The increase was primarily due to increased marketing expense related to the clinic operations and professional fees.
Although operations of the cosmetics line of business is currently limited, the Company's plans are to maintain this line of business and increase operations in the future and therefor those operations have not been discontinued.
LIQUIDITY AND CAPITAL RESOURCES
As of November 30, 2016, our current assets were $169,707, of which $12,086 was in cash.   We do not believe that we have sufficient cash to meet our current obligations for the near term and will require additional advances from our majority shareholders or through traditional financial institutions or capital through the sale of our common stock.   As of November 30, 2016, our working capital deficit was $4,382,207.
Cash Flows
We have not generated positive cash flows from operating activities.  For the three months ended November 30, 2016, net cash flows used in operating activities was $107,587, which was financed by proceeds from shareholder advances of $15,842 and proceeds from the sale of common stock of $116,038.
We also used cash for financing activities of $20,110 for the nine-month period ended November 30, 2016 compared to $1,219 for the comparable period of the prior year.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Not applicable.
ITEM 4. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
The Company's Principal Executive Officer and Principal Financial Officer have evaluated the effectiveness of our disclosure controls and procedures as of the end of the period covered by this report pursuant to Rule 13a-15(b) under the Securities Exchange Act of 1934 (the "Exchange Act").  Based on that evaluation, the Company's Chief Executive Officer and Principal Financial Officer have concluded that, as of the end of the period covered by this report, our disclosure controls and procedures are effective in ensuring that information required to be disclosed in the reports that we file or submit under the Exchange Act reports is (1) recorded, processed, summarized and reported within the periods specified in the Commission's rules and forms, and (2) accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.
The ineffective control over financial reporting resulted from a general lack of resources directed to our accounting and financial reporting functions and a lack of internal proficiency on matters of financial reporting. We are addressing this issue by entering into a contract with a competent outside contractor to outsource all of these functions and dedicating a significant amount of resources to enter into that agreement.
Changes in Internal Control over Financial Reporting
We have not made a change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the fiscal quarter ended August 31, 2016 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
 Internal control systems, no matter how well designed and operated, have inherent limitations. Therefore, even a system which is determined to be effective cannot provide absolute assurance that all control issues have been detected or prevented. Our systems of internal controls are designed to provide reasonable assurance with respect to financial statement preparation and presentation.
 
 
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PART II - OTHER INFORMATION

Item 1 - Legal Proceedings

We are not aware of any legal proceedings contemplated by any governmental authority or any other party involving us or our properties.  As of the date of this report, no director, officer or affiliate is (i) a party adverse to us in any legal proceeding, or (ii) has an adverse interest to us in any legal proceedings.  We are not aware of any other legal proceedings pending or that have been threatened against us or our properties.
From time to time the Company may be named in claims arising in the ordinary course of business. Currently, no legal proceedings or claims, other than those disclosed above, are pending against or involve the Company that, in the opinion of management, could reasonably be expected to have a material adverse effect on its business and financial condition.
Item 1A – Risk Factors
Not required for Smaller Reporting Companies.
Item 2 – Unregistered Sales of Equity Securities and Use of Proceeds
None
Item 3 – Defaults Upon Senior Securities
No disclosure required.
Item 4 – Mine Safety Disclosure
No disclosure required.
Item 5 – Other Information
No disclosure required.
 
 

 
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Item 6. EXHIBITS
 
Exhibits:
 
Number
Description
 
 
31.1
Certification of Principal Executive Officer, pursuant to SEC Rules 13a-14(a) and 15d-14(a), adopted pursuant Section 302 of the Sarbanes Oxley Act of 2002
 
 
31.2
Certification of Principal Financial Officer, pursuant to SEC Rules 13a-14(a) and 15d-14(a), adopted pursuant Section 302 of the Sarbanes Oxley Act of 2002
 
 
32.1
Certification of Chief Executive Officer and Principal Financial Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
 
 
32.2
 
Certification of Chief Executive Officer and Principal Financial Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
 
 
101.INS
XBRL Instance Document
 
 
101.SCH
XBRL Taxonomy Extension Schema Document
 
 
101.CAL
XBRL Taxonomy Extension Calculation Linkbase Document
 
 
101. DEF
XBRL Taxonomy Extension Definition Linkbase Document
 
 
101.LAB
XBRL Taxonomy Extension Label Linkbase Document
 
 
101.PRE
XBRL Taxonomy Extension Presentation Linkbase Document
 
 
 
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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.
 
 
Joey New York, Inc.
 
 
 
 
 
Date:        January 23, 2017
By:
/s/ Joey Chancis
 
 
 
Joey Chancis, CEO
 
 
 
Principal Executive Officer
 
 
 
 
 
Date:       January 23, 2017
By:
/s/ Richard Roer
 
 
 
Richard Roer, President
 
 
 
Principal Financial Officer
 
 
 
 
 
 
 
 
 
 
 
 
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