| Delaware | N/A | ||
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | ||
| 1199 Marinaside Crescent, Suite 1107 | V6Z 2Y2 | ||
| Vancouver, British Columbia, Canada | (Zip Code) | ||
| (Address of principal executive offices) | |||
(604) 623 3309
(Registrant’s telephone number, including area code)
______________________________________________________
(Former name, former address and former fiscal year, if changed since last report)
Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was require 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 is a shell company (as defined in Rule 12b-2 of the Exchange Act). x Yes ¨ No
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS:
Check whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. ¨ Yes ¨ No
APPLICABLE ONLY TO CORPORATE ISSUERS
As of December 3, 2007, the registrant’s outstanding common stock consisted of 20,640,250 shares.
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PART I – FINANICAL INFORMATION
|
The unaudited financial statements of Blink Couture Inc. (the “Company”, “Blink”, “we”, “our”, “us”) follow. All currency references in this report are in US dollars unless otherwise noted.
Blink Couture Inc.
(A Development Stage Company)
(Unaudited)
(Expressed in US dollars)
| October 31, 2007 | |
| Index | |
| Balance Sheets | F-1 |
| Statements of Operations | F-2 |
| Statements of Cash Flows | F-3 |
| Notes to the Financial Statements | F-4 |
1
| F-1 |
(The accompanying notes are an integral part of these financial statements)
| F-2 |
(The accompanying notes are an integral part of these financial statements)
| F-3 |
(The accompanying notes are an integral part of these financial statements)
|
Blink Couture Inc.
(A Development Stage Company) (Unaudited) |
| 1. | Nature of Business and Continuance of Operations | |
| Fashionfreakz International Inc. (the “Company”) was incorporated on October 23, 2003 under the laws of the State of Delaware. On December 2, 2005, Fashionfreakz International Inc. changed its name to Blink Couture Inc. The Company is a Development Stage Company, as defined by Statement of Financial Accounting Standard (“SFAS”) No. 7 “ Accounting and Reporting by Development Stage Enterprises ”. The Company’s principal business is specializing online in retailing trendy clothing and accessories produced by independent designers. The Company is in the process of expanding its product line and developing its website. | ||
| These financial statements have been prepared on a going concern basis, which implies the Company will continue to realize its assets and discharge its liabilities in the normal course of business. The Company has never generated revenues since inception and has never paid any dividends and is unlikely to pay dividends or generate earnings in the immediate or foreseeable future. The continuation of the Company as a going concern is dependent upon the continued financial support from its shareholders, the ability of the Company to obtain necessary equity financing to continue operations, and the attainment of profitable operations. As at October 31, 2007, the Company has a working capital deficit of $18,963 and accumulated losses of $69,028 since inception. These factors raise substantial doubt regarding the Company’s ability to continue as a going concern. These financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. | ||
| 2. | Summary of Significant Accounting Policies | |
| a) | Basis of Presentation | |
| These financial statements and related notes are presented in accordance with accounting principles generally accepted in the United States, and are expressed in US dollars. The Company’s fiscal year-end is July 31. | ||
| b) | Interim Financial Statements | |
| These interim unaudited financial statements have been prepared on the same basis as the annual financial statements and in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary to present fairly the Company’s financial position, results of operations and cash flows for the periods shown. The results of operations for such periods are not necessarily indicative of the results expected for a full year or for any future period. | ||
| c) | Use of Estimates | |
| 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. | ||
| The Company regularly evaluates estimates and assumptions related to donated expenses, and deferred income tax asset valuations. The Company bases its estimates and assumptions on current facts, historical experience and various other facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by the Company may differ materially and adversely from the Company’s estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected. | ||
F-4
|
Blink Couture Inc.
(A Development Stage Company) Notes to Financial Statements (Unaudited) |
| 2. | Summary of Significant Accounting Policies (continued) | |
| d) | Basic and Diluted Net Income (Loss) Per Share | |
| The Company computes net income (loss) per share in accordance with SFAS No. 128, " Earnings per Share ". SFAS No. 128 requires presentation of both basic and diluted earnings per share (EPS) on the face of the income statement. Basic EPS is computed by dividing net income (loss) available to common shareholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period using the treasury stock method and convertible preferred stock using the if-converted method. In computing Diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excludes all dilutive potential shares if their effect is anti dilutive. | ||
| e) | Comprehensive Loss | |
| SFAS No. 130, “ Reporting Comprehensive Income ,” establishes standards for the reporting and display of comprehensive loss and its components in the financial statements. As at October 31, 2007, the Company has no items that represent a comprehensive loss and, therefore, has not included a schedule of comprehensive loss in the financial statements. | ||
| f) | Cash and Cash Equivalents | |
| The Company considers all highly liquid instruments with maturity of three months or less at the time of issuance to be cash equivalents. | ||
| g) | Property and Equipment | |
| Property and equipment consists of equipment and is recorded at cost. Equipment is being amortized on the straight-line basis over the estimated life of five years. | ||
| h) | Inventory | |
| Inventory consists of jewellery and fashion accessories and is valued at the lower of cost and net realizable value. Cost is determined on a first in, first out basis. | ||
| i) | Advertising | |
| The Company expenses advertising costs as incurred. There have been no advertising expenses incurred by the Company since inception. | ||
| j) | Financial Instruments | |
| The fair value of financial instruments, which include cash, accounts payable, accrued liabilities, and amounts due to related parties were estimated to approximate their carrying values due to the immediate or short-term maturity of these financial instruments. Management is of the opinion that the Company is not exposed to significant interest, currency or credit risks arising from financial instruments. | ||
| k) | Income Tax | |
| Potential benefits of income tax losses are not recognized in the accounts until realization is more likely than not. The Company has adopted SFAS No. 109 “ Accounting for Income Taxes ” as of its inception. Pursuant to SFAS No. 109 the Company is required to compute tax asset benefits for net operating losses carried forward. Potential benefit of net operating losses have not been recognized in these financial statements because the Company cannot be assured it is more likely than not it will utilize the net operating losses carried forward in future years. | ||
F-5
|
Blink Couture Inc.
(A Development Stage Company) Notes to Financial Statements (Unaudited) |
| 2. | Summary of Significant Accounting Policies (continued) | |
| l) | Foreign Currency Translation | |
| The Company’s functional and reporting currency is the United States dollar. Monetary assets and liabilities denominated in foreign currencies are translated in accordance with SFAS No. 52 “ Foreign Currency Translation ”, using the exchange rate prevailing at the balance sheet date. Gains and losses arising on settlement of foreign currency denominated transactions or balances are included in the determination of income. Foreign currency transactions are primarily undertaken in Canadian dollars. The Company has not, to the date of these financials statements, entered into derivative instruments to offset the impact of foreign currency fluctuations. | ||
| m) | Website Development Costs | |
| The Company capitalizes website development costs in accordance wit the American Institute of Certified Public Accountants (“AICPA”) Statement of Position (“SOP”) No. 98-1, “Accounting for the Costs of Computer Software Developed or Obtained for Internal Use” and Emerging Issues Task Force (EITF) No. 00-2, “Accounting for Website Development Costs” , whereby costs related to the preliminary project stage of development are expensed and costs related to the application development stage are capitalized. Any additional costs for upgrades and enhancements which result in additional functionality will be capitalized. Capitalized costs will be amortized based on their estimated useful life over three years. Internal costs related to the development of website content are charged to operations as incurred. During the year ended July 31, 2007, the Company incurred $10,535 (2006 - $nil) of internal website development costs which has been recorded as marketing expense. | ||
| n) | Stock-based Compensation | |
| The Company records stock-based compensation in accordance with SFAS No. 123R, “Share-Based Payments”, using the fair value method. The Company also complies with the provisions of FASB Emerging Issues Task Force (“EITF”) Issue No. 96-18, Accounting for Equity Instruments That Are Issued to Other Than Employees for Acquiring, or in Conjunction with Selling, Goods or Services (“EITF 96-18”). 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. | ||
| o) | Recent Accounting Pronouncements | |
| In February 2007, the Financial Accounting Standards Board (FASB) issued SFAS No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities – Including an Amendment of FASB Statement No. 115” . This statement permits entities to choose to measure many financial instruments and certain other items at fair value. Most of the provisions of SFAS No. 159 apply only to entities that elect the fair value option. However, the amendment to SFAS No. 115 “Accounting for Certain Investments in Debt and Equity Securities” applies to all entities with available-for-sale and trading securities. SFAS No. 159 is effective as of the beginning of an entity’s first fiscal year that begins after November 15, 2007. Early adoption is permitted as of the beginning of a fiscal year that begins on or before November 15, 2007, provided the entity also elects to apply the provision of SFAS No. 157, “Fair Value Measurements” . The adoption of this statement is not expected to have a material effect on the Company’s financial statements. | ||
F-6
Blink Couture Inc.
(A Development Stage Company)
Notes to Financial Statements
(Unaudited)
2. Summary of Significant Accounting Policies (continued)
| (o) | Recent Accounting Pronouncements |
| In September 2006, the FASB issued SFAS No. 157, “ Fair Value Measurements ”. The objective of SFAS 157 is to increase consistency and comparability in fair value measurements and to expand disclosures about fair value measurements. SFAS 157 defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles, and expands disclosures about fair value measurements. SFAS 157 applies under other accounting pronouncements that require or permit fair value measurements and does not require any new fair value measurements. The provisions of SFAS No. 157 are effective for fair value measurements made in fiscal years beginning after November 15, 2007. The adoption of this statement is not expected to have a material effect on the Company's future reported financial position or results of operations. | |
F-7
|
Blink Couture Inc.
(A Development Stage Company) Notes to Financial Statements (Unaudited) |
| 3. | Accrued Liabilities | |
| As at October 31, 2007, the Company had $8,927 (July 31, 2007 - $nil) of accrued liabilities consisting of amounts owing for professional fees. | ||
| 4. | Related Party Transactions | |
| a) | At October 31, 2007, the Company is indebted to the President of the Company for $Nil (July 31, 2007 - $161) for cash advances made to the Company and expenses incurred on behalf of the Company. The amount is unsecured, non-interest bearing and has no stated terms of repayment. | |
| b) | At October 31, 2007, the former President of the Company is owed $8,667 (July 31, 2007 - $8,567) for management fees and rent. The amount is unsecured, non-interest bearing and has no stated terms of repayment. | |
| c) | For the three months ended October 31, 2007, the Company recognized donated capital of $600 (October 31, 2006 - $nil) for management fees provided by the President of the Company. | |
F-8
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
We were 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. Our principal executive offices are located at 1199 Marinaside Crescent, Suite 1107, Vancouver, British Columbia, V6Z 2Y2, Canada.
We are a “shell company” defined in Rule 405 under the Securities Act of 1933 and Rule 12b-2 under the Securities Exchange Act of 1934, since we have only conducted nominal operations and have only nominal assets.
We are an online fashion business that specializes in retailing clothing, jewelry and accessories produced by independent designers to customers via the Internet. We launched our website, www.blinkcouture.com, on January 3, 2007. Currently our website includes products for men, women and children as well as accessories.
To date, we have secured a distribution arrangement with two designers: Vancouver-based Sweet Dream Tees, and Sofia Bozikis Handbags. We have also purchased costume jewelry designed by several independent French designers. We also intend to develop our own fashion line and to co-develop a fashion line with Sweet Dream Tees. We will not start a Blink Couture fashion line until 2009. We intend that the products in the Blink Couture fashion line will be custom designed and will prominently feature our logo. Our fashion and accessory line will be targeted towards men, women, children and dog wear. We will focus 80% of our business on women’s wear, 10% on men’s wear and the remaining 10% on children’s wear and pet wear.
On August 15, 2007 Susanne Milka resigned from her positions as our President, Chief Executive Officer, Treasurer, Chief Accounting Officer and director. Following Ms. Milka’s resignations, our Board of Directors appointed Penny Green, our sole remaining director, to hold the officer positions relinquished by Ms. Milka.
2
We anticipate that our business will incur significant operating losses in the short term. At this time, we believe that our success depends on our ability sustain operations and to expand the market for our products.
The following factors raise substantial doubt regarding the ability of our business to continue as a going concern: (i) the losses we incurred since our inception; (ii) no revenues we generated since our inception; and (iiI) our dependence on sale of equity securities and receipt of capital from outside sources to continue in operation. Our auditors have issued a going concern opinion. 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.
Results of Operations for the Three Months ended October 31, 2007
Lack of Revenues
Since our inception on October 23, 2003 to October 31, 2007, we had not yet earned any revenues. As of October 31, 2007, we had an accumulated deficit of $69,028. We do not expect to generate revenues until early 2008. We intend to generate revenues from the sale of clothing, jewelry, and accessories sold on our website. At this time, our ability to generate any significant revenues continues to be uncertain.
Net Loss
We incurred net loss of $14,323 for the three months ended October 31, 2007 compared to $11,508 for the three months ended October 31, 2006. Since our inception on October 23, 2003 to October 31, 2007, we incurred net loss of $69,028. The net loss was incurred due to our lack of revenues.
Expenses
Our total expenses from our date of inception to October 31, 2007 were $69,028 and consisted of $32,210 in professional fees, $14,443 in general and administrative fees, $11,192 in marketing fees, $10,400 in management fees, $116 in amortization and $667 in rent. Our total expenses for the three months ended October 31, 2007 were $14,323, compared to total expenses of $11,508 for the three months ended October 31, 2006. The increase of $2,815 in total expenses was due to the costs for increased professional fees due to the increase in our day-to-day operating activities.
Our general and administrative expenses decreased slightly from $3,748 for the three months ended October 31, 2006 to $3,580 for the three months ended October 31, 2007. Our general and administrative expenses consist of salaries, office supplies, travel expenses, rent, communication expenses (cellular, internet, fax and telephone), office maintenance, courier and postage costs and office equipment. On March 1, 2006, we entered a lease agreement with our former President for use of 150 square feet of the premises at a cost of $100 for every 3 months. The agreement was cancelled on August 15, 2007.
3
Our professional fees increased $3,603 from $6,403 for the three months ended October 31, 2006 to $10,006 for the same period in 2007. Our professional fees consisted primarily of legal, accounting and auditing fees. The increase in professional fees was due to the increased auditing services provided.
Plan of Operations
We intend to spend approximately $68,000 over the next 12 months (beginning December 2007). We estimate that our expenses over the next 12 months will be approximately as follows:
| Description | Target | Estimated |
| Completion | Expenses | |
| Date | ||
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| Add additional exclusive shirt designs and other products | January 2008 | 2,000 |
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| Additional photo and video shoots for our products | January 2008 | 10,000 |
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| Publicity launch through a publicity agent | January 2008 | 7,000 |
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| Add additional items to kids product offering | March 2008 | 5,000 |
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| Obtain at least one distribution license for pets accessories | March 2008 | 1,000 |
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| Launch grass roots marketing campaign – including e-cards and funky emails that can be voluntarily sent | April 2008 | 2,000 |
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| Put ads in newspapers | June 2008 | 1,000 |
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| Accounting and legal fees | 12 months | 20,000 |
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| General and administrative expenses (including office expenses, telephone and travel expenses) | 12 months | 10,000 |
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| Financing costs | 12 months | 10,000 |
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| Total | 68,000 | |
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As of October 31, 2007, we had cash of $34, and we believe that we need approximately an additional $68,000 to meet our capital requirements over the next 12 months. We intend to approach market makers and brokerages for additional financing. We plan to initially raise $70,000 by private placements from existing shareholders, a public offering or shareholder loans until more financing is available.
As we expand in the future, and if we are successful in attracting a large number of customers, we will incur additional costs for personnel. In order to attract and retain quality personnel, our management anticipates it will need to offer competitive salaries, issue common stock to consultants or employees and grant stock options to future employees. We anticipate that we may need approximately $40,000 per year beginning in 2009 to pay salaries to employees or consultants working in the areas of marketing, client relations and accounting. We do not have any material commitments for capital expenditures as of December 3, 2007.
4
Liquidity and Capital Resources
We do not expect to generate any significant revenues over the next twelve months. We intend to continue making financial investments in marketing and website development and expect to incur substantial additional losses over the next year.
As of October 31, 2007, we had a working capital deficit of $18,963. We had cash of $34 in our bank accounts as of October 31, 2007. Our total assets were $2,141, with $1,516 in total current assets, and $625 in property and equipment. Our total liabilities and total current liabilities were the same, at $20,479. Our net loss of $69,028 from October 23, 2003 (date of inception) to October 31, 2007 was mostly funded by our equity financing and related parties’ loans. We expect to incur substantial losses over the next two years.
During the three months ended October 31, 2007, we did not have any financing and investing activities. We used net cash of $2,570 in operating activities. The decrease in cash was $2,570 during the three months ended October 31, 2007.
We believe that we need approximately $68,000 to meet our capital requirements over the next 12 months (beginning December 2007). We intend to raise the balance of our cash requirements approximately $68,000 from private placements, loans, or possibly a registered public offering (either self-underwritten or through a broker-dealer) within the next few months. We also intend to seek consultants willing to accept our common stock as partial or full consideration for service.
We have been negotiating with web based companies to build marketing and other strategic alliances. In some instances we may use shares to compensate strategic partners for their services or participation in our activities. The introduction of new strategic partners could further affect our operating results over the next several fiscal periods.
Expenses incurred which cannot be paid in stock, such as auditors fees, will be paid through cash. If we are unable to raise the necessary capital to meet our requirements, we may not be able to pay our internet hosting fees, which may mean our website and services would no longer be available to the public. In addition, we may not be able to pay our auditor which could result in a failure to comply with accounting disclosure requirements.
We are currently out of funds, and if this does not change within the next month, we will seek companies as potential reverse merger partners. In order to improve our liquidity, we are currently pursuing additional equity financing through discussion with investment bankers and private investors. There can be no assurance we will be successful in our efforts to secure additional equity financing. If operations and cash flow improve through these efforts, management believes that we can continue to operate. At this time we do not have any commitments from any broker-dealer to provide us with financing. There is no guarantee that we will be successful in raising any capital. If we fail in raising capital, our business may fail. Also, no assurance can be given that management's actions will result in profitable operations or the resolution of our liquidity problems.
5
Employees
As of December 3, 2007, we have no part time or full time employees. Our sole director work part time as independent contractor and works in the areas of web development, business development and management. We currently engage independent contractors in the areas of website design (where necessary), accounting and legal services.
Limited operating history; need for additional capital
There is limited historical operating 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.
Known Material Trends and Uncertainties
As of October 31, 2007, 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 by taking the following steps in the event that we are not able to raise sufficient funds to meet the needs of our business plans:
6
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.
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 discussion of critical 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.
ITEM 3. Control and Procedures
(a) Evaluation of disclosure controls and procedures
Our Chief Executive Officer and Chief Financial Officer evaluated our “disclosure controls and procedures” (as defined in Rule 13a-14 (c) of the Securities Exchange Act of 1934 (the “Exchange Act”) as of a date within 90 days before the filing date of this report and has concluded that as of the evaluation date, our disclosure controls and procedures are effective to ensure that information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms.
7
(b) Changes in internal controls
Subsequent to the date of their evaluation, there were no significant changes in our internal controls over financial reporting or in other factors that could significantly affect these controls. There were no significant deficiencies or material weaknesses in our internal controls so no corrective actions were taken.
PART II – OTHER INFORMATION
ITEM 1. Legal Proceedings
Management is not aware of any legal proceedings contemplated by any governmental authority or any other party against us. None of our directors, officers or affiliates are (i) a party adverse to us in any legal proceedings, or (ii) have an adverse interest to us in any legal proceedings. Management is not aware of any other legal proceedings that have been threatened against us.
ITEM 2. Unregistered Sales of Equity Securities
During the three months ended October 31, 2007, we did not make any sales of unregistered securities.
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
8
| SIGNATURES |
In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| Blink Couture Inc. | ||||
| (Registrant) | ||||
| /s/ Penny Green | ||||
| Date: December 14, 2007 | Penny Green | |||
| Director , President, Chief Executive Officer | ||||
| Chief Financial Officer | ||||
| Principal Accounting Officer | ||||
9
DISTRIBUTION AGREEMENT
THIS AGREEMENT (“the Agreement”) effective as of the 7 th day of June, 2007.
| BETWEEN | ||||
| BLINK COUTURE INC. | ||||
| 1107-1199 Marinaside Crescent | ||||
| Vancouver British Columbia V6Z 2Y2 | ||||
| (“ Blink ”) | ||||
| AND |
| Sofia Bozikis dba Sofia Bozikis Handbags | ||
| Vancouver, British Columbia, Tel: 604 261 9149 | ||
| (“ Designer ”) |
WHEREAS :
A. Blink is in the business of selling fashion merchandise on the internet.
B. Designer is in the business of designing and making clothes.
C. Blink and Designer (together “ the Parties ”) have agreed to terms dated in order that Blink will sell some of Designer’s products through its internet site.
D. The terms of this Agreement replaces any other agreement reached between the Parties.
THIS AGREEMENT WITNESSES that, in consideration of the matters referred to, the Parties have agreed that the terms and conditions of the relationship shall be as follows:
1 Term
1.1 The term of this Agreement shall commence on the date of execution and shall continue until cancelled on 60 days written notice by either party.
Obligations of the Parties
2 General
2.1 Within fourteen (14) days of the execution of this Agreement, Designer will send to Blink a list of all products that they currently design and make (the “ Products ”), together with a list of the cost price of the Products. The cost price shall be the price to be paid by Blink for the product and shall identify all PST, GST or other taxes payable by Blink (“Cost Price”).
2.2 Each month Designer will send to Blink an updated list Products which will list: (a) new products, (b) out of stock products, and (c) discontinued products.
| 2.3 | Blink will select, in its absolute discretion, which Products it wishes to advertise, market, promote and sell through its website at www.blinkcouture.com , and any other websites owned or operated by Blink or its subsidiaries (“ the Website ”). |
| Blink shall be under no obligation to consult with Designer regarding (a) which Products it chooses to advertise, market, promote and sell on the Website, or (b) the retail price at which the Products are advertised, marketed, promoted and sold to customers through the Website, regardless of any markup in value. | |
| 3 | Delivery |
| 3.1 | When a sale is made of Products through the Website, Blink will be responsible for organizing the delivery of the Products to the customer. |
| 3.2 | As sales of Products through the Website increase, Blink may request that Designer provide inventory on consignment for popular Products so as to facilitate faster delivery of the Products to the customers. |
| 4 | Price and Payment |
| 4.1 | The Parties agree that all products that Designer sells to Blink pursuant to this Agreement will be at Cost Price. |
| 4.2 | For non consignment items, Blink agrees to pay Designer on delivery of the Product. |
| 4.3 | For Consignment Items, Blink shall pay Designer at the end of the month in which the sale is made. Blink shall also provide an updated list of items on consignment together with a break down of all sales made in that period. |
| 5 | Obligations Relating to Consignment Items |
| 5.1 | Designer assumes all liability for the loss, damage to, or destruction of Products consigned to Blink (“Consigned Item”). |
| 5.2 | Consigned Items shall remain the property of Designer, and title to the Consigned Items shall remain with Designer until such time as Blink has paid for the Consigned Items in full. |
| 5.3 | At any time until Blink has paid Designer in full for the Consigned Items, Designer may elect to remove the Consigned Items. Designer shall notify Blink at least seven days prior to electing to remove the Consigned Items under this paragraph. |
| 5.4 | Blink may return Consigned Items to Designer at its own discretion. If Blink initiates a return, Blink shall notify Designer at least seven days prior to returning the items. Blink is responsible to Designer for delivery of the returned items under this paragraph and shall provide a list of all returned items. |
| 6 | Return Policy |
| 6.1 | The wholesale return policy: within 90 days upon receipt of merchandise, merchandise may be returned if a manufacturing defect is attributed to garment construction. If a Product is returned because of a defect, Designer will replace the Product or refund the cost price to Blink. |
| 7 | Loss, Non Delivery or Damage in Transit |
| 7.1 | Blink shall be responsible for any losses or damages occurring to Consignment Items in transit. |
| 8 | Promotion of Products |
| 8.1 | For the purpose of advertising, marketing, promoting and selling the Products on the Website, Blink shall have the right to produce photographs and fashion video segments of Products to be used on the Website, in other promotional materials and for press distribution purposes. Blink shall be under no obligation to consult with Designer as regards the use or otherwise of any promotional materials. Blink shall own the copyright in the photo (except that the copyright of Designers logo and designs shall be owned by Designer). Designer may not use Blink produced promotional items without the express written consent of Blink. |
| 8.2 | Designer will retain the exclusive copyright of the Designer logo and all associated designs. However, Designer will grant to Blink a limited license to reproduce such logo’s and designs on the Website for the purpose of advertising, marketing, promoting and selling the Products. |
| 8.3 | The Parties agree to negotiate the possibility of creating some products in the future which will be advertised, promoted, marketed and sold exclusively by Blink for Designer and which will be created by Designer exclusively for Blink. |
| 9 | Discontinuance of Products by Designer |
| 9.1 | Designer reserves the right either (i) upon three month written notice to Designer, or (ii) immediately if Blink is in breach of any terms of this Agreement, including but not limited to payment, in Designer’s absolute discretion, without incurring any liability to Blink, to discontinue or to limit its production of Products, to terminate or limit deliveries of any Products, the production of which is so discontinued or limited. Designer agrees to notify Blink as soon as reasonably practical if it chooses to exercise its right under this paragraph. |
| 10 | Remedies |
| 10.1 | Upon default by either party under any terms of this Agreement (“the Defaulting Party”), and at any time after the default, the other party (“Non Defaulting Party”) shall have all rights and remedies provided by law and by this Agreement. |
| 10.2 | No delay or omission by the Non Defaulting Party in exercising any right or remedy shall operate as a waiver of them or of any other right or remedy, and no single or partial exercise of a right or remedy shall preclude any other or further exercise of them or the exercise of any other right or remedy. Furthermore, the Non Defaulting Party may remedy any default by the Defaulting Party in any reasonable manner without waiving the default remedied and without waiving any other prior or subsequent default by the Defaulting Party. All rights and remedies of the Non Defaulting Party granted or recognized in this Agreement are cumulative and may be exercised at any time and from time to time independently or in combination. |
| 11 | Limitation of Actions |
| 11.1 | No action, regardless of form, arising out of this Agreement may be brought by either party more than two years after the cause of action has arisen or, in the case of non payment, more than two years from the date of the last payment. |
| 12 | No Partnership Created |
| 12.1 | Nothing in this Agreement shall be deemed in any way or for any purpose to constitute the parties hereto partners in the conduct of any business or otherwise. |
| 13 | Enurement |
| 13.1 | This Agreement shall be binding upon and enure to the benefit of the successors and assigns of both parties and all persons or corporations succeeding to or acquiring the business now carried on by Innovative. |
| 14 | Amendment |
| 14.1 | No change or modification of this Agreement shall be valid unless it be in writing and signed by each party. |
| 15 | Entirety |
| 15.1 | This Agreement shall constitute the entire agreement between the Parties to this Agreement pertaining to the subject matter hereof and supersede all prior and contemporaneous agreements, undertakings, negotiations and discussions, whether oral or written, of the Parties and there are no warranties, representations or other agreements between the Parties in connection with the subject matter of this Agreement. |
| 15.2 | Acceptance of this Agreement is strictly limited to the terms and conditions stated herein or specifically incorporated by reference. Any additions, deletions or differences in the terms and conditions of this Agreement proposed by either party must be agreed to in writing and incorporated by written addendum to this Agreement. |
| 16 | Severability |
| 16.1 | In the event that any provision or part of this Agreement shall be deemed void or invalid by a court of competent jurisdiction, the remaining provisions or parts shall be and remain in full force and effect. |
| 17 | Countersignature |
| 17.1 | This Agreement may be signed in counterparts, each of which so signed shall be deemed to be an original (and each signed copy sent by electronic facsimile transmission shall be deemed to be an original), and such counterparts together shall constitute one and the same instrument and notwithstanding the date of execution, shall be deemed to bear the date as set forth above. |
IN WITNESS WHEREOF this Agreement has been executed by the parties to it, on the day, month and year first written.
Blink Couture Inc.
by its authorized signatory
/s/ Susanne Milka
Susanne Milka, President
Sofia Bozikis dba Sofia Bozikis Handbags
by its authorized signatory
/s/ Sofia Bozikis
Sofia Bozikis
| EXHIBIT 31.1 |
Certification of the Chief Executive Officer and Chief Financial Officer Pursuant to Rule 13A-14 or 15D-14 of the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes – Oxley Act of 2002
I, Penny Green, certify that:
| 1. | I have reviewed this report on Form 10-QSB for the period ended October 31, 2007 of Blink Couture Inc. | |
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; | |
| 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the small business issuer as of, and for, the periods presented in this report; | |
| 4. | I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the small business issuer and have: | |
| a) | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the small business issuer, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which the quarterly or annual report is being prepared; | |
| b) | evaluated the effectiveness of the small business issuer’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | |
| c) | disclosed in this report any change in the small business issuer’s internal control over financial reporting that occurred during the small business issuer’s most recent fiscal quarter (the small business issuer’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect the small business issuer’s internal control over financial reporting; | |
| 5. | I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the small business issuer’s auditors and the audit committee of small business issuer’s board of directors (or persons performing the equivalent function): | |
| a) | all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the small business issuer’s ability to record, process, summarize and report financial information; and | |
| b) | any fraud, whether or not material, that involves management or other employees who have a significant role in the small business issuer’s control over financial reporting. | |
| Date: December 14, 2007 | By: /s/ Penny Green | |
| Penny Green | ||
| Director, President, Chief Executive Officer, | ||
| Chief Financial Officer, Principal Accounting | ||
| Officer |
| Exhibit 32.1 |
CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350 AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Blink Couture Inc. (the "Company") on Form 10-QSB for the period ended October 31, 2007 as filed with the Securities and Exchange Commission (the "Report"), the undersigned, in the capacities and on the dates indicated below, hereby certifies pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:
| 1. | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
| 2. | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
| Dated: December 14, 2007 | /s/ Penny Green | |
| Penny Green | ||
| Director, President, Chief Executive Officer, | ||
| Chief Financial Officer, Principal Accounting Officer |