Joey New York, Inc. was incorporated under the laws of the State of Nevada 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. The Company completed the acquisition of an entity, RAR Beauty, LLC on May 12, 2014 and currently operates as a distributor of natural skin care and beauty products on the wholesale and retail levels.
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
Six months ending August 31, 2016 and August 31, 2015:
Revenues were $45,713 and $54,291 for the six months ending August 31, 2016 and August 31, 2015, respectively. Our gross profit was 43,740 and $11,629 for the six months ending August 31, 2016 and 2015, respectively. Fluctuations in our profit margins will be due to product mix and minor increases in our product costs. The cost of goods sold for this period only include the results for Reflect Productions, Inc. form the date of acquisition (August 11, 2016) to August 31, 2016. Vendor rebates totaling $18,900 were received during this period resulting in a very low cost of goods sold.
During the six months ended August 31, 2016, we incurred $223,059 in operating expenses compared to $86,217 for the six months ended August 31, 2015. The increase primarily results from increased marketing expenses related to the opening of our new clinic.
Three months ending August 31, 2016 and August 31, 2015:
Revenues were $45,570 and $17,306 for the three months ending August 31, 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 $43,639 and $(2,071) for the three months ending August 31, 2016 and 2015, respectively. The increase resulted from clinic operations from August 11, 2016 as noted earlier.
During the three months ended August 31, 2016, we incurred $178,578 in operating expenses compared to $18,165 for the three months ended August 31, 2015. The increase was primarily due to increased marketing expense related to the clinic operations and professional fees.
LIQUIDITY AND CAPITAL RESOURCES
As of August 31, 2016, our current assets were $94,894, of which $18,929 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 August 31, 2016, our working capital deficit was $4,267,005.