ITEM 2. MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION / PLAN OF OPERATIONS

Forward Looking Statements

This report on Form 10-QSB contains certain forward-looking statements. All statements other than statements of historical fact are “forward-looking statements” for purposes of these provisions, including any projections of earnings, revenues, or other financial items; any statements of the plans, strategies, and objectives of management for future operation; any statements concerning proposed new products, services, or developments; any statements regarding future economic conditions or performance; statements of belief; and any statement of assumptions underlying any of the foregoing. Such forward-looking statements are subject to inherent risks and uncertainties, and actual results could differ materially from those anticipated by the forward-looking statements.

Overview

Blink Couture Inc. was incorporated as a Delaware company on October 23, 2003 with the former name Fashionfreakz International Inc. On December 2, 2005 we changed our name to Blink Couture Inc. We do not have any subsidiaries.

We are a development stage company. We have only recently begun our current operations. As of October 31, 2006, we have not yet earned any revenues, have had operational losses to date and we have an accumulated deficit. As of October 31, 2006, we had net losses since inception in the amount of $23,449.

We do not expect to generate revenues until Spring 2007. We intend to generate revenues from the sale of clothing, jewelry, and accessories sold on our website.

We are an online fashion business that specializes in retailing clothing, jewelry and accessories produced by independent designers to customers via the Internet. We have launched our website, www.blinkcouture.com, on January 3, 2007. Currently our website includes products of women and accessories. We are negotiating men’s and children’s products. We have secured one independent designer, Sweet Dream Tees Inc., which will allow us to produce custom designs.

Our auditors have issued a going concern opinion. This means that there is substantial doubt regarding our ability to continue as a going concern. The financial statements do not include any adjustments that might result from the uncertainty about our ability to continue in business. As such we may have to cease operations and you could lose your investment.

Description of Property

Our principal executive offices are located at 1199 Marinaside Crescent, Suite 1107, Vancouver, British Columbia, V6Z 2Y2, Canada. On March 1, 2006, we have entered a lease agreement with our President for use of 150 square feet of the premises at a cost of $100 for every 3 months.

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Results of Operations for the Three Months ended October 31, 2006 and for the Period from October 23, 2003 (Date of Inception) to October 31, 2006

Since our inception on October 23, 2003 to October 31, 2006, we did not generate any revenues. For the three months ended October 31, 2006 we incurred a net loss of $11,508, compared to a net loss of $700 for the three months ended October 31, 2005. From October 23, 2003 (Date of Inception) to October 31, 2006, we incurred a net loss of $23,449. Our net loss per share was nil for the three months ended October 31, 2006 and nil for the period from October 23, 2003 (Date of Inception) to October 31, 2006.

Our total expenses were $11,508 for the three months ended October 31, 2006, including $6,403 in professional fees, $600 in management fees, $657 in marketing, $100 for office rent, $3,480 in web development and $268 in other general and administrative fees. Our total expenses for the three months ended October 31, 2005 were $700. From October 23, 2003 (Date of Inception) to October 31, 2006, we incurred total expenses of $23,449.

Our professional fees of $6,403 for the three months ended October 31, 2006 consisted primarily of legal, accounting and auditing fees, compared to $nil for the same period ended October 31, 2005. From October 23, 2003 (Date of Inception) to October 31, 2006, our legal and accounting costs totaled $6,643.

Our management fees of $600 for the three months ended October 31, 2006 consisted of amounts paid to the President, same as the same period ended October 31, 2005. From October 23, 2003 (Date of Inception) to October 31, 2006, our management expenses were $8,000.

Our general and administrative fees for the three months ended October 31, 2006 were $4,505, compared to $100 for the same period ended October 31, 2005. Our general and administrative expenses consist of marketing and promotion, tradeshow costs, travel, meals and entertainment, rent, office maintenance, communication expenses (cellular, internet, fax, telephone), office supplies, courier and postage costs, web development and office supplies. From October 23, 2003 (Date of Inception) to October 31, 2006, we incurred general and administrative expenses of $8,806.

Plan of Operation

We plan to focus on custom wear and independent designers. Our target is men, women, children and dog wear. Our business will focus 80% of our clothing product line on women’s wear, 10% on men’s wear and the remaining 10% on children’s and pet wear. We may change our business plan according to the market trends and our management decisions.

Our corporate strategy for the next 12 months (beginning February 2007) includes the following:

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At present, our cash requirements for the next twelve months outweigh the funds available to maintain current operations. Our independent accountants, in their report accompanying our audited financial statements, have stated that there is substantial doubt about our ability to continue as a going concern.

In order to fully carry out the mentioned above steps, we need an additional $70,000 of financing for the next 12 months. The estimated financing costs will be approximately from $10,000 to $100,000. From April to June 2007, we intend to approach market makers and brokerages for additional financing. We plan to raise $80,000 - $1,000,000 by private placements from existing shareholders, a public offering or shareholder loans until more financing is available.

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There is no assurance we will be successful in our efforts to secure additional equity or debit financing. If we are unable to raise equity or obtain alternative financing, we may not be able to continue operations with respect to the continued development and marketing of our website and our products and then we may have to cease development activities.

If operations and cash flow improve through these efforts, management believes that we can continue to operate. However, no assurance can be given that management's actions will result in profitable operations or the resolution of our liquidity problems.

The threat of our ability to continue as a going concern will be removed only when revenues have reached a level that sustains our business operations.

Liquidity and Capital Resources

As of October 31, 2006, we had a working capital surplus of $26,641. Our accumulated deficit was $23,449 as at October 31, 2006. Our net loss of $23,449 from October 23, 2003 (Date of Inception) to October 31, 2006 was mostly funded by our equity financing. During the three months ended October 31, 2006, we raised $6,950 in equity finance, compared to $nil for the same period ended October 31, 2005. The decrease in cash during the three months ended October 31, 2006 was $6,124.

We used net cash of $13,074 in operations for the three months ended October 31, 2006. During the three months ended October 31, 2006, our monthly cash requirement was approximately $4,385 in operating activities. We currently do not have any investing activities. For the period ended October 31, 2006, we had cash of $34,796, which we anticipate will cover our costs for approximately 8 months according to our current monthly burn rate.

We anticipate that after February 2007 our monthly expenses will increase to $6,700 -$14,000, which includes $10,000 monthly for general and administrative expenses and $10,000 – 100,000 for additional financing costs. We are anticipating an increase of $5,000 per month in expenses with the addition of consultants.

We anticipate that we will incur substantial losses over the next two years. We estimate that we will complete our website, purchase products, and promote our business over the next 12 months beginning February 2007. Total cash requirements to complete those steps will be approximately $70,000 set out as follows:

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Of the $70,000 we need for the next 12 months, we had $34,796 in cash or cash equivalents as of October 31, 2006. The balance of our cash requirements for the next 12 months (approximately $45,000 – $135,000) we intend to raise from private placements, shareholder loans or possibly a registered public offering (either self-underwritten or through a broker-dealer) within the next few months. At this time we do not have any commitments from any broker-dealer to provide us with financing.

If we are unsuccessful in raising enough money through future capital raising efforts, we may review other financing possibilities such as bank loans. If we cannot raise at least $45,000, we will not be able to carry out our full business plan and we may not be able to become profitable and we may have to cease operations.

Employees

As of January 23, 2007, we have no part time or full time employees. Both of our directors work part time as independent contractors and work in the areas of web development, business development and management. We currently engage independent contractors in the areas of accounting and legal services.

Limited operating history; need for additional capital

There is limited historical financial information about us upon which to base an evaluation of our performance. We are a development stage company and have generated no revenues. We cannot guarantee we will be successful in our business operations. Our business is subject to risks inherent in the establishment of a new business enterprise, including limited capital resources and possible cost overruns due to price and cost increases in services and products.

We have no assurance that future financing will be available to us on acceptable terms. Obtaining additional financing will be subject to a number of factors including market conditions, investor acceptance of our business plan and investor sentiment. These factors may make the timing, amount, terms and conditions of additional financing unattractive or unavailable to us. If financing is not available on satisfactory terms, we may be unable to continue, develop or expand our operations. If we are unable to raise additional financing, we will have to significantly reduce our spending, delay or cancel planned activities or substantially change our current corporate structure. In such an event, we intend to implement expense reduction plans in a timely manner. However, these actions would have material adverse effects on our business, revenues, operating results, and prospects, resulting in a possible failure of our business. If we raise funds through equity or convertible securities, our existing stockholders may experience dilution and our stock price may decline.

We have incurred operating losses from our inception and we are dependent upon our ability to raise capital from stockholders or other sources to sustain operations. These factors raise substantial doubt about our ability to continue as a going concern.

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Audit Committee

The functions of the audit committee are currently carried out by our Board of Directors. Our Board of Directors has determined that we do not have an audit committee financial expert on our Board of Directors carrying out the duties of the audit committee. Our Board of Directors has determined that the cost of hiring a financial expert to act as a director of Lexington and to be a member of the audit committee or otherwise perform audit committee functions outweighs the benefits of having a financial expert on the audit committee.

Certain Relationships and Related Party Transactions

We have not entered into any transactions with our officers, directors, persons nominated for these positions, beneficial owners of 5% or more of our common stock, or family members of these persons wherein the amount involved in the transaction or a series of similar transactions exceeded $60,000.

Known Material Trends and Uncertainties

As of October 31, 2006, we had no off balance sheet transactions that have or are reasonably likely to have a current or future effect on our financial condition, changes in our financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.

In view of the uncertainties concerning our continued existence as a going concern, our management plans to mitigate the effect of such conditions, management intends to take the following steps in the event that we are not able to raise sufficient funds to meet the needs of our business plans:

• negotiate with suppliers to delay deposit due dates;
• continue our equity financing; and
• negotiate with our management and consultants to pay parts of salaries and fees with stock and stock options instead of cash.

We believe that the above discussion contains a number of forward-looking statements. Our actual results and our actual plan of operations may differ materially from what is stated above. Factors which may cause our actual results or our actual plan of operations to vary include, among other things, decision of the Board of Directors not to pursue a specific course of action based on a re-assessment of the facts or new facts, or changes in general economic conditions.

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Critical Accounting Policies

The preparation of financial statements in conformity with U.S. generally 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 financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. An accounting policy is considered to be critical if it requires an accounting estimate to be made based on assumptions about matters that are highly uncertain at the time the estimate is made, and if different estimates that reasonably could have been used, or changes in the accounting estimates that are reasonably likely to occur periodically, could materially impact the financial statements. Financial Reporting Release No. 60 requires all companies to include a discussion of critical accounting policies or methods used in the preparation of financial statements. Note 2 to the financial statements, includes a summary of the significant accounting policies and methods used in the preparation of our financial statements. The following is a brief discussion of the more significant accounting policies and methods used by us.

Stock-based Compensation

We record stock-based compensation in accordance with SFAS No. 123, “Accounting for Stock-Based Compensation”. All transactions in which goods or services are the consideration received for the issuance of equity instruments are accounted for based on the fair value of the consideration received or the fair value of the equity instrument issued, whichever is more reliably measurable. Equity instruments issued to employees and the cost of the services received as consideration are measured and recognized based on the fair value of the equity instruments issued. We do not currently have a stock option plan.