Quarterly Report (10-q)

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 10-Q

 

☒     Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

 

For the quarterly period ended November 30, 2014

 

☐     Transition Report pursuant to 13 or 15(d) of the Securities Exchange Act of 1934

 

For the transition period from __________ to__________

 

Commission File Number: 333-189540

 

Perk International Inc.

(Exact name of registrant as specified in its charter)

 

Nevada		46-2622704
(State or other jurisdiction of incorporation or organization)		(IRS Employer Identification No.)
5401 Eglinton Avenue West Suite 205 Toronto, Ontario Canada M9C 5K6
(Address of principal executive offices)
647-966-5156
(Registrant’s telephone number)
(Former name, former address and former fiscal year, if changed since last report)

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

☐ Yes ☒ 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.

 

☐  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

 

State the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: 100,133,132 shares as of January 6, 2015.

 

 

  

 

TABLE OF CONTENTS

 

		Page
PART I – FINANCIAL INFORMATION
Item 1:	Financial Statements	3
Item 2:	Management’s Discussion and Analysis of Financial Condition and Results of Operations	4
Item 3:	Quantitative and Qualitative Disclosures About Market Risk	6
Item 4:	Controls and Procedures	6
PART II – OTHER INFORMATION
Item 1:	Legal Proceedings	7
Item 1A:	Risk Factors	7
Item 2:	Unregistered Sales of Equity Securities and Use of Proceeds	7
Item 3:	Defaults Upon Senior Securities	7
Item 4:	Mine Safety Disclosures	7
Item 5:	Other Information	7
Item 6:	Exhibits	7

 

2

 

PART I - FINANCIAL INFORMATION

 

Item 1. Financial Statements

 

Our financial statements included in this Form 10-Q are as follows:

 

F-1	Balance Sheets as of November 30, 2014 and May 31, 2014 (unaudited);
F-2	Statements of Operations for the three and six months ended November 30, 2014 and 2013 (unaudited);
F-3	Statements of Cash Flows for the six months ended November 30, 2014 and 2013 (unaudited)
F-4	Notes to Financial Statements.

 

These financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and the SEC instructions to Form 10-Q. In the opinion of management, all adjustments considered necessary for a fair presentation have been included. Operating results for the interim period ended November 30, 2014 are not necessarily indicative of the results that can be expected for the full year.

 

3

 

PERK INTERNATIONAL INC.

BALANCE SHEETS (UNAUDITED)

AS OF NOVEMBER 30, 2014 AND MAY 31, 2014

 

		November 30, 2014				May 31, 2014
ASSETS
Current assets
Cash and cash equivalents		$	-			$	23
Receivable from Related Party			500
Website development, net			5,250				6,000
TOTAL ASSETS		$	5,750			$	6,023
LIABILITIES AND STOCKHOLDERS’ DEFICIT
Liabilities
Current Liabilities
Accounts payable and accrued expenses		$	24,786			$	22,355
Bank overdraft			-				-
Shareholder loans			3,949				3,752
Total Liabilities			28,735				26,107
Stockholders’ Deficit
Common stock, $.0001 par value, 250,000,000 shares authorized, 75,133,132 and 75,066,666 shares issued and outstanding at November 30, 2014 and May 31, 2014, respectively			7,513				7,506
Additional paid in capital			49,172				38,665
Stock warrants			6,115				6,129
Accumulated deficit			(85,785	)			(72,384	)
Total Stockholders’ Deficit			(22,985	)			(20,084	)
TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT		$	5,750			$	6,023

 

See accompanying notes to financial statements.

 

F-1

 

PERK INTERNATIONAL INC.

STATEMENTS OF OPERATIONS (UNAUDITED)

FOR THE THREE AND SIX MONTHS ENDED NOVEMBER 30, 2014 AND 2013

 

		Three months ended November 31, 2014				Three months ended November 31, 2013				Six months ended November 31, 2014				Six months ended November 31, 2013
REVENUES		$	-			$	-			$	-			$	-
OPERATING EXPENSES
Professional fees			3,800				10,938				9,830				19,331
Filing fees			3,819				3,634				2,444				5,467
Amortization			375				375				750				750
Bank charges			(25	)			345				220				460
Interest expense			82				69				157				75
TOTAL OPERATING EXPENSES			8,051				15,361				13,401				26,083
LOSS BEFORE INCOME TAXES			(8,051	)			(15,361	)			(13,401	)			(26,083	)
PROVISION FOR INCOME TAXES			-				-				-				-
NET LOSS		$	(8,051	)		$	(15,361	)		$	(13,401	)		$	(26,083	)
NET LOSS PER SHARE: BASIC AND DILUTED		$	(0.00	)		$	(0.00	)		$	(0.00	)		$	(0.00	)
WEIGHTED AVERAGE SHARES OUTSTANDING: BASIC AND DILUTED			75,136,665				45,000,000				75,120,363				45,000,000

 

See accompanying notes to financial statements.

 

F-2

 

PERK INTERNATIONAL INC.

STATEMENTS OF CASH FLOWS (UNAUDITED)

FOR THE SIX MONTHS ENDED NOVEMBER 30, 2014 AND 2013

 

		Six months ended November 30, 2014				Six months ended November 30, 2013
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss for the period		$	(13,401	)		$	(26,083	)
Adjustment to reconcile net loss to net cash used in operating activities:
Amortization			750				750
Changes in assets and liabilities:
(Increase) decrease in other receivable			(500	)
Increase (decrease) in accounts payable and accrued expenses			2,431				6,704
Net Cash Used in Operating Activities			(10,720	)			(18,629	)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from stock subscriptions			-				18,250
Exercise of stock warrants			10,500				-
Shareholder loans			197				3,377
Net Cash Provided by Financing Activities			10,697				21,627
Net (Decrease) in Cash and Cash Equivalents			(23	)			2,998
Cash and cash equivalents, beginning of period			23				1,577
Cash and cash equivalents, end of period		$	-			$	4,575
SUPPLEMENTAL CASH FLOW INFORMATION:
Interest paid		$	-			$	-
Income taxes paid		$	-			$	-

 

See accompanying notes to financial statements.

 

F-3

 

PERK INTERNATIONAL INC.

NOTES TO THE FINANCIAL STATEMENTS

NOVEMBER 30, 2014

(UNAUDITED)

 

NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Organization and Description of Business

Perk International Inc. (“the Company” or “Perk”) was incorporated under the laws of the State of Nevada on April 10, 2013. The Company plans to become an e-commerce marketplace that connects merchants to consumers by offering daily discounts on goods and services through our website located at www.usellisave.com . Our corporate headquarters are located at 2470 East 16th Street, Brooklyn, NY 11235, but we plan to launch our business throughout the Greater Toronto Area.

 

Basis of Presentation

The accompanying unaudited interim financial statements of Perk International, Inc. have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission (“SEC”), and should be read in conjunction with the audited financial statements and notes thereto contained in the Company’s Form 10-K filed with the SEC. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for the financial statements to be not misleading have been reflected herein. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year. Notes to the financial statements which would substantially duplicate the disclosure contained in the audited financial statements for the most recent fiscal year ended May 31, 2014 as reported in Form 10-K, have been omitted.

 

Cash and Cash Equivalents

The Company considers all highly liquid investments with original maturities of three months or less to be cash equivalents. The Company had $0 and $23 of cash as of November 30, 2014 and May 31, 2014, respectively.

 

Fair Value of Financial Instruments

The Company’s financial instruments consist of cash and cash equivalents, website development costs and accrued expenses. The carrying amount of these financial instruments approximates fair value due either to length of maturity or interest rates that approximate prevailing market rates unless otherwise disclosed in these financial statements.

 

Income Taxes

Income taxes are computed using the asset and liability method. Under the asset and liability method, deferred income tax assets and liabilities are determined based on the differences between the financial reporting and tax bases of assets and liabilities and are measured using the currently enacted tax rates and laws. A valuation allowance is provided for the amount of deferred tax assets that, based on available evidence, are not expected to be realized.

 

Use of Estimates

The preparation of financial statements in conformity with 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 the financial statements and the reported amount of revenues and expenses during the reporting period. Actual results could differ from those estimates.

 

Revenue Recognition

The Company recognizes revenue when products are fully delivered or services have been provided and collection is reasonably assured.

 

Stock-Based Compensation

Stock-based compensation is accounted for at fair value in accordance with ASC Topic 718. To date, the Company has not adopted a stock option plan and has not granted any stock options.

 

F-4

 

PERK INTERNATIONAL INC.

NOTES TO THE FINANCIAL STATEMENTS

NOVEMBER 30, 2014

(UNAUDITED)

 

NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

 

Basic Income (Loss) Per Share

Basic income (loss) per share is calculated by dividing the Company’s net loss applicable to common shareholders by the weighted average number of common shares during the period. Diluted earnings per share is calculated by dividing the Company’s net income available to common shareholders by the diluted weighted average number of shares outstanding during the year. The diluted weighted average number of shares outstanding is the basic weighted number of shares adjusted for any potentially dilutive debt or equity. There are no such common stock equivalents outstanding as of November 30, 2014.

 

Comprehensive Income

The Company has which established standards for reporting and display of comprehensive income, its components and accumulated balances. When applicable, the Company would disclose this information on its Statement of Stockholders’ Equity. Comprehensive income comprises equity except those resulting from investments by owners and distributions to owners. The Company has not had any significant transactions that are required to be reported in other comprehensive income.

 

Recent Accounting Pronouncements

In June 2014, the Financial Accounting Standards Board issued Accounting Standards Update No. 2014-10, which eliminated certain financial reporting requirements of companies previously identified as "Development Stage Entities" (Topic 915). The amendments in this ASU simplify accounting guidance by removing all incremental financial reporting requirements for development stage entities. The amendments also reduce data maintenance and, for those entities subject to audit, audit costs by eliminating the requirement for development stage entities to present inception-to-date information in the statements of income, cash flows, and shareholder equity. Early application of each of the amendments is permitted for any annual reporting period or interim period for which the entity's financial statements have not yet been issued (public business entities) or made available for issuance (other entities). Upon adoption, entities will no longer present or disclose any information required by Topic 915. The Company has adopted this standard.

 

In August 2014, FASB issued Accounting Standards Update (ASU) No. 2014-15 Preparation of Financial Statements – Going Concern (Subtopic 205-40), Disclosure of Uncertainties about an Entity's Ability to Continue as a Going Concern. Under generally accepted accounting principles (GAAP), continuation of a reporting entity as a going concern is presumed as the basis for preparing financial statements unless and until the entity's liquidation becomes imminent. Preparation of financial statements under this presumption is commonly referred to as the going concern basis of accounting. If and when an entity's liquidation becomes imminent, financial statements should be prepared under the liquidation basis of accounting in accordance with Subtopic 205-30, Presentation of Financial Statements—Liquidation Basis of Accounting. Even when an entity's liquidation is not imminent, there may be conditions or events that raise substantial doubt about the entity's ability to continue as a going concern. In those situations, financial statements should continue to be prepared under the going concern basis of accounting, but the amendments in this Update should be followed to determine whether to disclose information about the relevant conditions and events. The amendments in this Update are effective for the annual period ending after December 15, 2016, and for annual periods and interim periods thereafter. Early application is permitted. The Company will evaluate the going concern considerations in this ASU, however, at the current period, management does not believe that it has met the conditions which would subject these financial statements for additional disclosure.

 

Management has considered all recent accounting pronouncements issued since the last audit of its financial statements. The Company's management believes that these recent pronouncements will not have a material effect on the Company's financial statements. 

 

F-5

 

PERK INTERNATIONAL INC.

NOTES TO THE FINANCIAL STATEMENTS

NOVEMBER 30, 2014

(UNAUDITED)

 

NOTE 2 – GOING CONCERN

 

The financial statements have been prepared on a going concern basis which assumes the Company will be able to realize its assets and discharge its liabilities in the normal course of business for the foreseeable future. The Company has negative working capital, has not yet received revenue from sales of products or services, and has incurred losses since inception resulting in an accumulated deficit of $85,785 as of November 30, 2014 and further losses are anticipated in the development of its business raising substantial doubt about the Company’s ability to continue as a going concern. The ability to continue as a going concern is dependent upon the Company generating profitable operations in the future and/or to obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due. Management intends to finance operating costs over the next twelve months with existing cash on hand, loans, and sales of common stock.

 

NOTE 3 – SHAREHOLDER LOANS

 

During the year ended May 31, 2014, a shareholder advanced the Company $3,752. During the quarter ended August 31, 2014, the shareholder advanced an additional $197. The loans are unsecured, bear interest at 8% and are due in one year. The Company has accrued interest of $366 on the outstanding balance as of November 30, 2014.

 

NOTE 4 – EQUITY

 

The Company has 250,000,000 shares of $0.0001 par value common stock authorized.

 

On April 30, 2013, the Company issued 45,000,000 shares of common stock to its founders at $0.00027 per share for cash proceeds of $12,150.

 

The founders also contributed $150 during the period ended May 31, 2013.

 

In November and December 2013, the Company received cash and subscription agreements for the sale of 30,000,000 units consisting of one share of the Company’s common stock, and, one warrant for the purchase of one share of the Company’s common stock at a purchase price of $0.25 per share and expiring on September 30, 2017 (the Warrants), for gross proceeds of $30,000.   The relative allocated fair market value of the Warrants was $6,143 on the grant dates. 

 

Warrants and Options

 

The Company issued 30,000,000 stock warrants in connection with the issuance of common stock. The Company has accounted for these warrants as equity instruments in accordance with ASC 815-40, Accounting for Derivative Financial Instruments Indexed to, and Potentially Settled in, a Company’s Own Stock, and as such, will be classified in stockholders’ equity as they meet the definition of “indexed to the issuer’s stock” in ASC 815-40. The Company has estimated the allocated fair value of the warrants issued in connection with the private placement at $6,143 as of the grant dates using the Black-Scholes option pricing model. Each common stock purchase warrant has an exercise price of $0.25 and will expire on September 30, 2017.

 

On April 3, 2014 the exercise price for all the outstanding warrants was revised from $0.25 to $0.15 per share. The warrants were revalued on that date and the change in value was trivial and deemed immaterial so no adjustment was recorded.

 

F-6

 

PERK INTERNATIONAL INC.

NOTES TO THE FINANCIAL STATEMENTS

NOVEMBER 30, 2014

(UNAUDITED)

 

NOTE 4 – EQUITY (CONTINUED)

 

During the year ended May 31, 2014, 66,666 warrants were exercised at $0.15 per share, resulting in 66,666 shares of common stock being issued for $10,000 in cash.

 

During the fiscal quarter ended August 31, 2014, 46,666 warrants were exercised at $0.15 per share, resulting in 46,666 shares of common stock being issued for $7,000 in cash.

 

During the fiscal quarter ended November 30, 2014, 23,333 warrants were exercised at $0.15 per share, resulting in 23,333 shares of common stock being issued for $3,000 in cash and a receivable of $500.

 

There are 29,863,335 stock warrants remaining as of November 30, 2014. The remaining warrants will expire on September 30, 2017.

 

The following table presents warrant activity since inception:

 

		Number of Warrants				Weighted Average Exercise Price
April 10, 2013, Inception			-			$	0.00
Granted			-				-
Exercised			-				-
Cancelled or Expired			-				-
May 31, 2013			0			$	-
Granted			30,000,000				0.15
Exercised			(66,666	)			(0.15	)
Cancelled or Expired			-				-
May 31, 2014			29,933,334			$	0.15
Granted			-				-
Exercised			(69,999	)			(0.15	)
Cancelled or Expired			-				-
November 30, 2014			29,863,335			$	0.15

 

NOTE 5 – COMMITMENTS

 

The Company neither owns nor leases any real or personal property. An officer has provided office services without charge. There is no obligation for the officer to continue this arrangement. Such costs are immaterial to the financial statements and accordingly are not reflected herein. The officers and directors are involved in other business activities and most likely will become involved in other business activities in the future.

 

 

F-7

 

NOTE 6 – SUBSEQUENT EVENTS

 

In accordance with ASC Topic 855-10, the Company has analyzed its operations subsequent to November 30, 2014 to the date these financial statements were issued, and has determined that, aside from the following, it does not have any material subsequent events to disclose in these financial statements.

 

On January 8, 2015, the Company entered into a Share Exchange Agreement (the “Exchange Agreement”) with Tech 9 Inc., a privately held company incorporated under the laws of the Province of Ontario (“Tech 9”), and the shareholders of Tech 9. As a result of the transaction (the “Exchange”), Tech 9 became a wholly-owned subsidiary of the Company. In accordance with the terms of the Exchange Agreement, at the closing an aggregate of 70,000,000 shares of the Company’s common stock were issued to the holders of Tech 9’s common stock in exchange for their shares of Tech 9. Each of the Company, Tech 9 and the shareholders of Tech 9 provided customary representations and warranties, pre-closing covenants and closing conditions in the Exchange Agreement.

 

Immediately subsequent to the Exchange, the Company entered into an Agreement of Conveyance, Transfer and Assignment of Assets and Assumption of Obligations (the “Conveyance Agreement”) with our prior officers and directors, Messrs. Andrew Gaudet and Leon Golden. Pursuant to the Conveyance Agreement, we transferred all assets and business operations associated with our daily deals/coupons business to Messrs. Gaudet and Golden. In exchange, Messrs. Gaudet and Golden agreed to cancel their collective 45,000,000 shares in our company and to assume and cancel all liabilities relating to our former business.

 

Upon the closing of the Exchange, Mr. Golden resigned as an officer and director of the Company and Mr. Gaudet resigned as President, CEO and a director of the Company, but was appointed as Vice President. Robert J. Oswald was appointed as Chief Executive Officer and President, Louis Isabella was appointed Chief Financial Officer, Secretary and Treasurer, and Matthew J. O’Brien was appointed as Chief Technology Officer. Simultaneous with the closing, Messrs. Oswald and O’Brien were appointed as members of the Company’s board of directors.

 

As a result of the Exchange Agreement and Conveyance Agreement, the Company is no longer pursuing its former business plan. Under the direction of its newly appointed officers and directors, as set forth above, the Company is in the business of deploying, installing and managing “Digital Place-Based Networks” (“DPN’s”) that are designed for healthcare, automotive, institutional, financial and high traffic C-store and retail locations.

 

 

F-8

 

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

Forward-Looking Statements

 

Certain statements, other than purely historical information, including estimates, projections, statements relating to our business plans, objectives, and expected operating results, and the assumptions upon which those statements are based, are “forward-looking statements.” These forward-looking statements generally are identified by the words “believes,” “project,” “expects,” “anticipates,” “estimates,” “intends,” “strategy,” “plan,” “may,” “will,” “would,” “will be,” “will continue,” “will likely result,” and similar expressions. Forward-looking statements are based on current expectations and assumptions that are subject to risks and uncertainties which may cause actual results to differ materially from the forward-looking statements. Our ability to predict results or the actual effect of future plans or strategies is inherently uncertain. Factors which could have a material adverse effect on our operations and future prospects on a consolidated basis include, but are not limited to: changes in economic conditions, legislative/regulatory changes, availability of capital, interest rates, competition, and generally accepted accounting principles. These risks and uncertainties should also be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements.

 

Company Overview

 

On January 8, 2014, we entered into a Share Exchange Agreement (the “Exchange Agreement”) with Tech9 Inc., a privately held company incorporated under the laws of the Province of Ontario (“Tech9”), and the shareholders of Tech9. As a result of the transaction (the “Exchange”), Tech9 became a wholly-owned subsidiary of our company. In accordance with the terms of the Exchange Agreement, at the closing an aggregate of 70,000,000 shares of our common stock were issued to the holders of Tech9's common stock in exchange for their shares of Tech9.

 

Immediately subsequent to the Exchange, we entered into an Agreement of Conveyance, Transfer and Assignment of Assets and Assumption of Obligations (the “Conveyance Agreement”) with our prior officers and directors, Messrs. Andrew Gaudet and Leon Golden. Pursuant to the Conveyance Agreement, we transferred all assets and business operations associated with our daily deals/coupons business to Messrs. Gaudet and Golden. In exchange, Messrs. Gaudet and Golden agreed to cancel their collective 45,000,000 shares in our company and to assume and cancel all liabilities relating to our former business.

 

As a result of the above transactions, we are no longer pursuing our former business plan. We are now in the business of deploying, installing and managing “Digital Place-Based Networks” (“DPN's”) that are designed for healthcare, automotive, institutional, financial and high traffic C-store and retail locations. 

 

4

  

Results of Operations for the three months and six months ended November 30, 2014

 

Revenues

 

We have generated no revenue since our inception. We are a development stage company and there is no guarantee that we will be able to execute on our business. We have incurred losses since our inception.

 

Operating Expenses

 

We incurred operating expenses of $8,051 for the three months ended November 30, 2014, compared to $15,361 for the comparable period ended November 30, 2013, for a $7,310 decrease. Our operating expenses for the three months ended November 30, 2014 consisted of professional fees in the amount of $3,800, SEC filing costs of $3,819, amortization of $375, bank fees of $(25) and interest expense of $82. The decrease of $7,310 is due to a reduction in professional fees of $7,138, an increase in filing fees of $185, a decrease in bank charges of $370 and an increase in interest expense of $15.

 

We incurred operating expenses of $13,401 for the six months ended November 30, 2014, compared to $26,083 for the comparable period ended November 30, 2013, for a $12,682 decrease. Our operating expenses for the six months ended November 30, 2014 consisted of professional fees in the amount of $9,830, SEC filing costs of $2,444, amortization of $750, bank fees of $220 and interest expense of $157. The decrease of $12,682 is due to a decrease in professional fees of $9,501, a decrease in filing fees of $3,023, a decrease in bank charges of $240 and an increase in interest expense of $82.

 

We anticipate our operating expenses will increase as we undertake our plan of operations. The increase will be attributable to administrative and operating costs associated with the implementation of our business and the professional fees associated with being a reporting company under the Securities Exchange Act of 1934.

 

Net Loss

 

We incurred a net loss of $8,051 and $13,401 for the three and six months ended November 30, 2014, respectively, compared to a net loss of $15,361 and $26,083 for the three and six months ended November 30, 2013. The decreases of $7,310 and $12,682 for the three and six months ended November 30, 2014, respectively, are due to decreases in operating expenses.  

  

Liquidity and Capital Resources

 

As of November 30, 2014, we had total current assets of $0. We had current liabilities of $28,735 as of November 30, 2014. Accordingly, we had a working capital deficit of $28,735 as of November 30, 2014.

 

Operating activities used $10,720 in cash for the six months ended November 30, 2014. Our negative operating cash flow for November 30, 2014 was mainly a result of operating expenses and the payment of accounts payable and accrued expenses.

 

Financing activities provided $10,697 in cash for the six months ended November 30, 2014. Our positive cash flow from financing activities for the six months ended November 30, 2014 was the primarily the result of proceeds from the exercise of stock warrants.

 

5

 

As of November 30, 2014, we had $0 in cash. Until we are able to sustain our ongoing operations through revenue, we intend to fund operations through debt and/or equity financing arrangements, which may be insufficient to fund our capital expenditures, working capital, or other cash requirements. We do not have any formal commitments or arrangements for the sales of stock or the advancement or loan of funds at this time. There can be no assurance that such additional financing will be available to us on acceptable terms, or at all.

 

Going Concern

 

These financial statements have been prepared on a going concern basis which assumes we will be able to realize our assets and discharge our liabilities in the normal course of business for the foreseeable future. We have incurred losses since inception resulting in an accumulated deficit of $85,785 as of November 30, 2014 and further losses are anticipated in the development of our business raising substantial doubt about our ability to continue as a going concern. The ability to continue as a going concern is dependent upon generating profitable operations in the future and/or to obtain the necessary financing to meet our obligations and repay our liabilities arising from normal business operations when they come due. Management anticipates financing operating costs over the next twelve months with loans and/or private placement of common stock. These financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts, or amounts and classification of liabilities that might result from this uncertainty.

 

Critical Accounting Policies

 

In December 2001, the SEC requested that all registrants list their most “critical accounting polices” in the Management Discussion and Analysis. The SEC indicated that a “critical accounting policy” is one which is both important to the portrayal of a company’s financial condition and results, and requires management’s most difficult, subjective or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain. We do not believe that any accounting policies currently fit this definition.

 

Recently Issued Accounting Pronouncements

 

We do not expect the adoption of recently issued accounting pronouncements to have a significant impact on our results of operations, financial position or cash flow.

 

Off Balance Sheet Arrangements

 

As of November 30, 2014, there were no off balance sheet arrangements.

 

Item 3. Quantitative and Qualitative Disclosures About Market Risk

 

A smaller reporting company is not required to provide the information required by this Item.

 

Item 4. Controls and Procedures

 

Disclosure Controls and Procedures

 

We carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of November 30, 2014. This evaluation was carried out under the supervision and with the participation of our Chief Executive Officer and our Chief Financial Officer. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of November 30, 2014, our disclosure controls and procedures were not effective due to the presence of material weaknesses in internal control over financial reporting.

 

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the company’s annual or interim financial statements will not be prevented or detected on a timely basis. Management has identified the following material weaknesses which have caused management to conclude that, as of November 30, 2014, our disclosure controls and procedures were not effective: (i) inadequate segregation of duties and effective risk assessment; and (ii) insufficient written policies and procedures for accounting and financial reporting with respect to the requirements and application of both US GAAP and SEC guidelines.

 

6

 

Remediation Plan to Address the Material Weaknesses in Internal Control over Financial Reporting

 

Our company plans to take steps to enhance and improve the design of our internal controls over financial reporting. During the period covered by this quarterly report on Form 10-Q, we have not been able to remediate the material weaknesses identified above. To remediate such weaknesses, we plan to implement the following changes during our fiscal year ending May 31, 2015: (i) appoint additional qualified personnel to address inadequate segregation of duties and ineffective risk management; and (ii) adopt sufficient written policies and procedures for accounting and financial reporting. The remediation efforts set out are largely dependent upon our securing additional financing to cover the costs of implementing the changes required. If we are unsuccessful in securing such funds, remediation efforts may be adversely affected in a material manner.

 

We are unable to remedy our controls related to the inadequate segregation of duties and ineffective risk management until we receive financing to hire additional employees.

 

Changes in Internal Control over Financial Reporting

 

There were no changes in our internal control over financial reporting during the six months ended November 30, 2014 that have materially affected, or are reasonable likely to materially affect, our internal control over financial reporting. 

 

PART II – OTHER INFORMATION

 

Item 1. Legal Proceedings

 

We are not a party to any pending legal proceeding. We are not aware of any pending legal proceeding to which any of our officers, directors, or any beneficial holders of 5% or more of our voting securities are adverse to us or have a material interest adverse to us.

 

Item 1A: Risk Factors

 

A smaller reporting company is not required to provide the information required by this Item.

 

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

 

None

 

Item 3. Defaults upon Senior Securities

 

None

 

Item 4. Mine Safety Disclosures

 

N/A

 

Item 5. Other Information

 

None

 

Item 6. Exhibits

 

Exhibit Number		Description of Exhibit
31.1		Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2		Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1		Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101**		The following materials from the Company’s Quarterly Report on Form 10-Q for the quarter ended November 30, 2014 formatted in Extensible Business Reporting Language (XBRL).
		** Provided herewith

 

7

 

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.

 

	Perk International Inc.
	Date:	January 14, 2015
	By:	/s/ Robert Oswald
		Robert Oswald
	Title:	President, Chief Executive Officer, and Director

 

 

8

 

 

Exhibit 31.1

 

CERTIFICATIONS

 

I, Robert Oswald, certify that;

 

1.

I have reviewed this quarterly report on Form 10-Q for the quarter ended November 30, 2014 of Perk International, Inc. (the “registrant”);

 

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 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 registrant as of, and for, the periods presented in this report;

 

4.

The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant 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 registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

b.

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

c.

Evaluated the effectiveness of the registrant’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

 

d.

Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

5.

The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 

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 registrant’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 registrant’s internal control over financial reporting.

 

Date: January 14, 2015
/s/ Robert Oswald
By:    Robert Oswald
Title: Chief Executive Officer

 

Exhibit 31.2

 

CERTIFICATIONS

 

I, Louis Isabella, certify that;

 

1.

I have reviewed this quarterly report on Form 10-Q for the quarter ended November 30, 2014 of Perk International, Inc. (the “registrant”);

 

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 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 registrant as of, and for, the periods presented in this report;

 

4.

The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant 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 registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

b.

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

c.

Evaluated the effectiveness of the registrant’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

 

d.

Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

5.

The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 

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 registrant’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 registrant’s internal control over financial reporting.

 

Date: January 14, 2015
/s/ Louis Isabella
By: Louis Isabella
Title: Chief Financial Officer

Exhibit 32.1

 

CERTIFICATION OF CHIEF EXECUTIVE OFFICER AND

CHIEF FINANCIAL OFFICER

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 Perk International, Inc. (the “Company”) on Form 10-Q for the quarter ended November 30, 2014 filed with the Securities and Exchange Commission (the “Report”), I, Robert Oswald, Chief Executive Officer of the Company, and I, Louis Isabella, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

 

1.

The Report fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934; and

 

2.

The information contained in the Report fairly presents, in all material respects, the consolidated financial condition of the Company as of the dates presented and the consolidated result of operations of the Company for the periods presented.

 

By:	/s/ Robert Oswald
Name:	Robert Oswald
Title:	Principal Executive Officer and Director
Date:	January 14, 2015

  

By:	/s/ Louis Isabella
Name:	Louis Isabella
Title:	Principal Financial Officer and Director
Date:	January 14, 2015

 

This certification has been furnished solely pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.