UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended March 31, 2012

 

OR

 

o TRANSITIONAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from ___________ to _____________

 

Commission file number 333-174874

 

GELTOLOGY INC.

 

A Delaware Corporation

I.R.S. Employer No. 35-2379917

 

 

c/o Ryan Goldstein

54 West 16th Street Suite 10b

New York, New York 10011

Phone number: 1-888-841-2841  

 

Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 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 x No o

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

 

Large accelerated filer ¨	Accelerated filer ¨
Non-accelerated filer ¨	Smaller reporting company x

(Do not check if a 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 x

 

As of May 7, 2012, 6,750,000 shares of Common Stock, par value $0.0001 per share, were outstanding.

 

 

 

Table of Contents 

 

Item	Description	Page
PART I - FINANCIAL INFORMATION		1
Item 1.	Financial Statements	1
Item 2.	Management's Discussion and Analysis or Plan of Operation	2
Item 4T	Controls and Procedures	5
PART II - OTHER INFORMATION
Item 1.	Legal Proceedings	6
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	6
Item 3.	Defaults Upon Senior Securities	6
Item 4.	Submission of Matters to a Vote of Security Holders	6
Item 5.	Other Information	6
Item 6.	Exhibits	6
Signatures		7
Exhibit Index

 

  

GELTOLOGY INC.

 

INDEX TO FINANCIAL STATEMENTS

MARCH 31, 2011

 

Financial Statements-
Balance Sheets as of March 31, 2012 and December 31, 2011	F-2
Statements of Operations for the Three Months Ended March 31, 2012 and 2011 and Cumulative from Inception	F-3
Statement of Stockholders’ Equity for the Period from Inception through March 31, 2012	F-4
Statements of Cash Flows for the Three Months Ended March 31, 2012 and 2011 and Cumulative from Inception	F-5
Notes to Financial Statements	F-6

 

 

GELTOLOGY INC.

(A DEVELOPMENT STAGE COMPANY)

BALANCE SHEETS

AS OF MARCH 31, 2012 AND DECEMBER 31, 2011

 

		As of				As of
		March 31,				December 31,
		2012				2011
		(Unaudited)				(Audited)
ASSETS
Current Assets:
Cash and cash equivalents		$	1,203			$	23,706
Total current assets			1,203				23,706
Total Assets		$	1,203			$	23,706
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable and accrued expenses		$	25,901			$	28,155
Total Current Liabilities			25,901				28,155
Commitments and Contingencies			-				-
Stockholders' Equity (Deficit):
Common stock, par value $0.0001 per share, 200,000,000 shares authorized; 6,750,000 shares issued and outstanding			675				675
Additional paid-in capital			17,978				17,977
Retained earnings (Deficit)			(43,351	)			(23,101	)
Total stockholders' equity (deficit)			(24,698	)			(4,449	)
Total Liabilities and Stockholders' Equity		$	1,203			$	23,706

 

The accompanying notes to financial statements are

an integral part of these statements.

 

  

GELTOLOGY INC.

(A DEVELOPMENT STAGE COMPANY)

STATEMENTS OF OPERATIONS

FOR THE THREE MONTHS ENDED MARCH 31, 2012 AND 2011,

AND CUMULATIVE FROM INCEPTION (MARCH 24, 2010) THROUGH MARCH 31, 2012

(Unaudited)

 

		Three Months				Three Months
		Ended				Ended				Cumulative
		March, 31				March, 31				From
		2012				2011				Inception
Revenues		$	65,700			$	45,430			$	143,130
Expenses:
General and administrative-
Professional fees			15,055				3,089				32,098
Consulting fees			68,738				25,510				141,648
Filing fees			1,276				-				6,146
Travel fees			-				-				3,216
Franchise tax expense			400				-				982
Other			481				1,272				2,391
Total general and administrative expenses			85,950				29,871				186,481
Income (Loss) from Operations			(20,250	)			15,559				(43,351	)
Provision for income taxes			-				(2,319	)			-
Net Income (Loss)		$	(20,250	)		$	13,240			$	(43,351	)
Earnings (Loss) Per Common Share:
Earnings (Loss) per common share - Basic and Diluted		$	(0.00	)		$	0.00
Weighted Average Number of Common Shares Outstanding - Basic and Diluted			6,750,000				4,750,000

 

The accompanying notes to financial statements are

an integral part of these statements.

 

 

GELTOLOGY INC.

(A DEVELOPMENT STAGE COMPANY)

STATEMENT OF STOCKHOLDERS' EQUITY

FOR THE PERIOD FROM INCEPTION (MARCH 24, 2010)

THROUGH MARCH 31, 2012

(Unaudited)

  

										Additional				Retained
		Common stock								Paid-in				Earnings
Description		Shares				Amount				Capital				(Deficit)				Totals
Balance - at inception			-			$	-			$	-			$	-			$	-
Common stock issued for cash ($0.0001/share)			4,750,000				475								-				475
Net loss for the period			-				-				-				(98	)			(98	)
Balance -December 31, 2010			4,750,000				475				-				(98	)			377
Common stock issued for cash ($0.02/share)			2,000,000				200				17,978				-				18,178
Net loss for the period			-				-				-				(23,003	)			(23,003	)
Balance - December 31, 2011			6,750,000				675				17,978				(23,101	)			(4,449	)
Net loss for the period			-				-				-				(20,250	)			(20,250	)
Balance - March 31, 2012			6,750,000				675				17,978				(43,351	)			(24,698	)

 

The accompanying notes to financial statements are

an integral part of these statements.

 

  

GELTOLOGY INC.

(A DEVELOPMENT STAGE COMPANY)

STATEMENTS OF CASH FLOWS

FOR THE THREE MONTHS ENDED MARCH 31, 2012 AND 2011,

AND CUMULATIVE FROM INCEPTION (MARCH 24, 2010) THROUGH MARCH 31, 2012

(Unaudited)

 

		Three Months				Three Months
		Ended				Ended				Cumulative
		March, 31				March, 31				From
		2012				2011				Inception
Operating Activities:
Net (loss)		$	(20,250	)		$	13,240			$	(43,351	)
Adjustments to reconcile net (loss) to net cash provided by operating activities:
Changes in net assets and liabilities-
Deffered offering costs			-				(9,500	)			-
Advance payments to suppliers			-				(3,216	)			-
Accounts payable and accrued liabilities			(2,254	)			27,089				25,901
Provision for corporate income tax			-				2,319				-
Net Cash Provided by (Used in) Operating Activities			(22,504	)			29,932				(17,450	)
Investing Activities:			-				-				-
Net Cash Provided by Investing Activities			-				-				-
Financing Activities:
Proceeds from common stock			-				-				18,653
Net Cash Provided by Financing Activities			-				-				18,653
Net (Decrease) Increase in Cash			(22,504	)			29,932				1,203
Cash - Beginning of Period			23,706				377				-
Cash - End of Period		$	1,203			$	30,309			$	1,203
Supplemental Disclosure of Cash Flow Information:
Cash paid during the period for:
Interest		$	-			$	-			$	-
Income taxes		$	-			$	-			$	-

 

The accompanying notes to financial statements are an integral part of these statements.

 

  

GELTOLOGY INC.

(A DEVELOPMENT STAGE COMPANY)

NOTES TO FINANCIAL STATEMENTS

 

1.  Summary of Significant Accounting Policies

 

Basis of Presentation and Organization

 

Getlology Inc. (the “Company”) was incorporated under the laws of the State of Delaware on March 24, 2010. The Company provides consulting services to match factories in China with western companies looking to manufacture goods in China. The business plan of the Company is to expand and become a leading provider of promotion gift items and ideas with the health and wellness concept related to yoga. The accompanying financial statements of the Company were prepared from the accounts of the Company under the accrual basis of accounting.

 

Unaudited Interim Financial Statements

 

The interim financial statements of the Company as of March 31, 2012, and for the periods then ended, and cumulative from inception, are unaudited. However, in the opinion of management, the interim financial statements include all adjustments, consisting of only normal recurring adjustments, necessary to present fairly the Company’s financial position as of March 31, 2012, and the results of its operations and its cash flows for the periods ended March 31, 2012, and cumulative from inception. These results are not necessarily indicative of the results expected for the calendar year ending December 31, 2012. The accompanying financial statements and notes thereto do not reflect all disclosures required under accounting principles generally accepted in the United States. Refer to the Company’s audited financial statements as of December 31, 2011, filed with the SEC, for additional information, including significant accounting policies.

 

Cash and Cash Equivalents 

 

For purposes of reporting within the statement of cash flows, the Company considers all cash on hand, cash accounts not subject to withdrawal restrictions or penalties, and all highly liquid debt instruments purchased with a maturity of three months or less to be cash and cash equivalents.

 

Revenue Recognition

 

The Company recognizes revenues when delivery of goods or completion of services has occurred provided there is persuasive evidence of an agreement, acceptance has been approved by its customers, the fee is fixed or determinable based on the completion of stated terms and conditions, and collection of any related receivable is probable. 

 

Earnings per Common Share

 

Basic earnings per share is computed by dividing the net income attributable to the common stockholders by the weighted average number of shares of common stock outstanding during the period. Fully diluted earnings per share is computed similar to basic earnings per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. There were no dilutive financial instruments issued or outstanding for the period ended March 31, 2012.

 

Income Taxes

 

The Company accounts for income taxes pursuant to FASB ASC 740. Deferred tax assets and liabilities are determined based on temporary differences between the bases of certain assets and liabilities for income tax and financial reporting purposes. The deferred tax assets and liabilities are classified according to the financial statement classification of the assets and liabilities generating the differences.

 

  

The Company maintains a valuation allowance with respect to deferred tax assets. The Company establishes a valuation allowance based upon the potential likelihood of realizing the deferred tax asset and taking into consideration the Company’s financial position and results of operations for the current period. Future realization of the deferred tax benefit depends on the existence of sufficient taxable income within the carryforward period under the Federal tax laws.

 

Changes in circumstances, such as the Company generating taxable income, could cause a change in judgment about the realizability of the related deferred tax asset. Any change in the valuation allowance will be included in income in the year of the change in estimate.

 

Fair Value of Financial Instruments

 

The Company estimates the fair value of financial instruments using the available market information and valuation methods. Considerable judgment is required in estimating fair value. Accordingly, the estimates of fair value may not be indicative of the amounts the Company could realize in a current market exchange. As of March 31, 2012 and 2011, the carrying value of accounts payable-trade and accrued liabilities approximated fair value due to the short-term nature and maturity of these instruments.

 

Deferred Offering Costs

 

The Company defers as other assets the direct incremental costs of raising capital until such time as the offering is completed. At the time of the completion of the offering, the costs are charged against the capital raised. Should the offering be terminated, deferred offering costs are charged to operations during the period in which the offering is terminated.

 

Common Stock Registration Expenses

 

The Company considers incremental costs and expenses related to the registration of equity securities with the SEC, whether by contractual arrangement as of a certain date or by demand, to be unrelated to original issuance transactions. As such, subsequent registration costs and expenses are reflected in the accompanying financial statements as general and administrative expenses, and are expensed as incurred.

 

Lease Obligations

 

All non cancellable leases with an initial term greater than one year are categorized as either capital leases or operating leases. Assets recorded under capital leases are amortized according to the methods employed for property and equipment or over the term of the related lease, if shorter.

 

Estimates

 

The financial statements are prepared on the basis of accounting principles generally accepted in the United States. 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, liabilities, and expenses. Actual results could differ from those estimates made by management.

 

Fiscal Year End

 

The Company has adopted a fiscal year end of December 31.

 

  

2.  Development Stage Activities and Going Concern

 

The Company is currently in the development stage, and has limited operations. The Company provides consulting services to match factories in China with western companies looking to manufacture goods in China. The business plan of the Company is to expand and become a leading provider of promotion gift items and ideas with the health and wellness concept related to yoga.

 

The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States, which contemplate continuation of the Company as a going concern. The Company has incurred an operating loss since inception. Further, as of March 31, 2012 the cash resources of the Company were insufficient to meet its current business plan. These and other factors raise substantial doubt about the Company’s ability to continue as a going concern. The accompanying financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the possible inability of the Company to continue as a going concern.

 

3.  Common Stock

 

On March 25, 2010, the Company issued 1,000,000 shares of common stock to a director of the Company, for a $100 subscription receivable. Payment was received in 2010.

 

On July 1, 2010, the Company issued 3,750,000 shares of common stock to a director of the Company, for a $375 subscription receivable. Payment was received in 2010.

 

On September 19, 2009, the Company began a capital formation activity through a PPO, exempt from registration under the Securities Act of 1933, to raise up to $100,000 through the issuance of 5,000,000 shares of its common stock, par value $0.0001 per share, at an offering price of $0.02 per share. As of December 19, 2011, the Company had received $40,000 in proceeds from the PPO. The Company offset the proceeds by $21,823 of legal and audit offering costs related to this capital formation activity.

 

4.  Income Taxes

 

The provision for income taxes for the periods ended March 31, 2012 and 2011 (assuming a 15% effective tax rate) were as follows:

 

		2012				2011
Current Tax Provision:
Federal-
Taxable income		$	-			$	15,559
Total current tax provision		$	-			$	2,319
Deferred Tax Provision:
Federal-
Loss carryforwards		$	3,037			$	-
Change in valuation allowance			(3,037	)			-
Total deferred tax provision		$	-			$	-

 

 

The Company had deferred income tax assets as of March 31, 2012 and December 31, 2011, as follows:

 

		2012				2011
Loss carryforwards		$	6,503			$	3,465
Less - Valuation allowance			(6,503	)			(3,465	)
Total net deferred tax assets		$	-			$	-

 

The Company provided a valuation allowance equal to the deferred income tax assets for the periods ended March 31, 2012 and December 31, 2011 because it is not presently known whether future taxable income will be sufficient to utilize the loss carryforwards.

 

As of March 31, 2012, the Company had approximately $43,351 in tax loss carryforwards that can be utilized in future periods to reduce taxable income, and expire by the year 2032.

 

The Company did not identify any material uncertain tax positions.  The Company did not recognize any interest or penalties for unrecognized tax benefits.

 

The Company will file income tax returns in the United States. All tax years are closed by expiration of the statute of limitations.

 

5. Related Party Loans and Transactions

 

On March 25, 2010, the Company issued 1,000,000 shares of common stock to a director of the Company, for a $100 subscription receivable. Payment was received in 2010.

 

On July 1, 2010, the Company issued 3,750,000 shares of common stock to a director of the Company, for a $375 subscription receivable. Payment was received in 2010.

 

During the year ended December 31, 2011 consulting and management fees of $3,000 were paid to officers of the Company. As of March 31, 2012 accounts payable include consulting fees of $22,500 payable to an officer of the Company.

 

6.  Recent Accounting Pronouncements

 

In May 2011, the FASB issued ASU 2011-04, "Fair Value Measurement (Topic 820): Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and International Financial Reporting Standards ("IFRSs")." Under ASU 2011-04, the guidance amends certain accounting and disclosure requirements related to fair value measurements to ensure that fair value has the same meaning in U.S. GAAP and in IFRS and that their respective fair value measurement and disclosure requirements are the same. ASU 2011-04 is effective for public entities during interim and annual periods beginning after December 15, 2011. Early adoption is not permitted. The Company does not believe that the adoption of ASU 2011-04 will have a material impact on the Company's results of operation and financial condition.

 

In June 2011, the FASB issued ASU No. 2011-05, "Comprehensive Income (ASC Topic 220): Presentation of Comprehensive Income," ("ASU 2011-05") which amends current comprehensive income guidance. This accounting update eliminates the option to present the components of other comprehensive income as part of the statement of shareholders' equity. Instead, comprehensive income must be reported in either a single continuous statement of comprehensive income which contains two sections, net income and other comprehensive income, or in two separate but consecutive statements. ASU 2011-05 will be effective for public companies during the interim and annual periods beginning after Dec. 15, 2011 with early adoption permitted. The Company does not believe that the adoption of ASU 2011-05 will have a material impact on the Company's results of operation and financial condition.

 

 

There were various other updates recently issued, most of which represented technical corrections to the accounting literature or application to specific industries.  None of the updates are expected to a have a material impact on the Company's financial position, results of operations or cash flows.

 

  

Item 2. Management's Discussion and Analysis or Plan of Operations

 

As used in this Form 10-Q, references to the “Company,” “Geltology,” “we,” “our” or “us” refer to Geltology Inc. unless the context otherwise indicates.

 

This Management’s Discussion and Analysis or Plan of Operations should be read in conjunction with the financial statements and the notes thereto included elsewhere in this report and with the Management's Discussion and Analysis or Plan of Operations and the financial statements for the year ended December 31, 2010 and for the period ended June 30, 2011, and the notes thereto included in our Registration Statement on Form S-1, which became effective on September 23, 2011, and with the Management's Discussion and Analysis or Plan of Operations and the financial statements for the year ended December 31, 2011, and the notes thereto included in our Annual Report on Form 10-K for the year 2011.

 

Forward-Looking Statements

 

This Management’s Discussion and Analysis or Plan of Operations contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements are based on current expectations, estimates, forecasts and projections about us, our future performance, the industry in which we operate, our beliefs and our management’s assumptions. In addition, other written or oral statements that constitute forward-looking statements may be made by us or on our behalf. Words such as “expects,” “anticipates,” “targets,” “goals,” “projects,” “intends,” “plans,” “believes,” “seeks,” “estimates,” variations of such words and similar expressions are intended to identify such forward-looking statements. These statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions that are difficult to assess. Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in such forward-looking statements.

 

For a description of such risks and uncertainties refer to our Registration Statement on Form S-1 (Registration No. 333-174874) filed with the Securities and Exchange Commission, which became effective on September 23, 2011. Except as required under the federal securities laws and the rules and regulations of the Securities and Exchange Commission, we do not have any intention or obligation to update publicly any forward-looking statements or risk factors included herein, whether as a result of new information, future events, changes in assumptions or otherwise.

 

Plan of Operation

 

Results of Operations

 

For the period ended March 31, 2012, we had revenues of $65,700, as compared with $45,430 for the period ended March 31, 2011. Expenses increased from $29,871 in the period ended March 31, 2011 to $85,950 in the period ended March 31, 2012. This increase was a result consulting fees relating to our outsourcing business

 

For the period ended March 31, 2012, we incurred a net loss of $20,250, as compared to a net profit of $13,240 in the period ended March 31, 2011. The increase in losses resulted from increases in consulting and professional fees. Our cumulative net loss during the period from March 24, 2010 (inception) through March 31, 2012 was $43,351.

 

Liquidity and Capital Resources

 

We estimate that we will require approximately $40,000 for the next 12 months of operations of our yoga mat business, including the costs of establishing our website. To the extent that we have clients in the outsourcing business, we will also incur the expenses of servicing those clients. We do not have sufficient resources to effectuate our current business plan. As of March 31, 2012, we had $1,203 available in cash.

 

 

The expenses we expect to incur for the yoga mat business during the next 12 months of operations, including the following expenses:

 

Legal and Accounting		$	25,000
Travel in China		$	4,000
Web Site Design		$	0
Web Site Development		$	0
E-Commerce software		$	0
Initial 100 yoga mats		$	330
Graphic Design		$	1,500
Printing of Flyer		$	2,000
Advertising/distributing flyers		$	2,300
Computer /Fax/		$	1,000
Travel in NYC -		$	3,800
Total Estimated Expenses		$	39,930

 

Additionally, $5,000 will be needed for general working capital.

 

PLAN OF OPERATION

 

OUR OUTSOURCING BUSINESS

 

Our outsourcing business is mostly a word-of-mouth business. Based upon Mr. Szender’s seven years of experience operating the business of matching Chinese manufacturers with customers in the United States and the European Union on his own, approximately 50% of the customer come from the United States and 50% come from the European Union.

 

Because the business operates on a word-of-mouth basis, we do not advertise this business and we do not anticipate advertising this business in the future.

 

We completed three outsourcing transactions during the first quarter of 2012.

 

OUR YOGA BUSINESS

 

Our initial marketing strategy will focus on corporations in the New York City area that are looking to give promotional gifts to their employees, clients and customers. We plan to schedule meetings with purchasing agents, human resources professionals, corporate marketing officials and company fitness instructors (if there are such personnel) in order for us to present our product. Our main focus in these meetings will be to encourage companies to use our products when they need to set up company special events where items are given away as promotional gifts, such as:

 

	£	Company sales kickoffs
	£	Promotional award ceremonies
	£	Holiday party gifts
	£	Company fitness reward programs

 

We have started a grass-roots marketing campaign by contacting the heads of the purchasing and marketing departments and the heads of human resources at New York corporations. We intend to print a one-page, four-color flyer, which we intend to mail to the appropriate persons at those corporations asking them to meet with our directors to hear our sales pitch. We intend to order 100 units of yoga mats, printed with the Geltology name and phone number, together with the slogan “order yoga mats with your corporate logo as a promotional give away item.” We intend to hand out these free yoga mats to the department heads during our sales meetings with them. We plan to convince these corporate clients to give their employees products that are health-related, which will be embossed with their own corporate logos. We plan to create an e-commerce website that will allow our customers to upload their logo in commonly used formats, to pick the color of their yoga mats, to pay for their orders via credit card, and to track their shipments. 

  

  

Eventually, we hope that our web site will include a large list of promotional gift items, all focused on health-related products in the yoga field.

 

In the future, we intend to employ search engine optimization policy to promote our site ranking, and to be able to attract customers from outside the New York City area. Eventually we plan to use a variety of social media tools such as Twitter, LinkedIn and Facebook. To increase coverage and minimize workloads, we plan to use timed messages. These are messages that can be scheduled in advance to appear at predetermined times that are intended to give them maximum visibility in various time zones.

 

We plan to locate New York City-based yoga instructors, whom we will ask to write yoga related articles for our web site. We will offer these yoga professionals exposure to the corporations to whom we market our products. Eventually, we envision our site becoming a yoga resource, in which people can find local yoga instructors, yoga studios, and yoga accessories. We hope that this will promote traffic to our site, which may eventually allow us to sell our products to individual retail customers.

 

The messages themselves include a variety of themes that are important to our site and our business. These message themes include:

 

£

Focus on the health benefits of yoga.

 

£

The importance of using the right equipment while practicing yoga.

 

Each theme will be geared to the medium used. For example, for Twitter, these will include short posts (limited by the platform to under 140 characters) using our Twitter account @geltology.com.

 

Initially, our directors and Officers will be responsible for the social media campaigns.

 

We do not intend to carry any inventory. We plan to order products from the supplier in Asia after the clients order the products from us. This method of operations is known as “just-in-time” inventory techniques. When properly implemented, “just-in-time” inventory techniques ensure that orders are processed without the need for inventory storage or a warehousing, and that orders match supply requests one-to-one. In order to implement “just-in-time” inventory, we must immediately purchase items ordered from one of our suppliers and drop-ship to our client as soon as a purchase is made on our website and payment is confirmed.

 

In the next 12 months of operations, we plan on targeting corporations in the New York City area and offering our yoga mat as a promotional gift item. Until our e-commerce web site is completed, which we anticipate will happen by the end of 2012, we anticipate accepting orders by email. Thus far, we have not accepted any orders. The next 12 months will be primarily devoted to creating a corporate customer base in the New York City area, and to developing the infrastructure to eventually grow the business throughout the continental United States. We anticipate being ready to begin processing our first orders by the end of 2012 from business generated by handing out or mailing our flyers to corporations in the New York City area. In the second year of operations, we plan to promote our web site outside the New York City area, thereby attracting customers in areas where we are not physically present.

 

To date, we have not had sufficient financing to reach the milestones that we anticipated reaching in 2012.

 

Our sales price to our customers will be based on order quantity with the minimum order quantity of 10 pieces.

 

Yoga Mat Pricelist
Cost/Mat		Sales Price/Mat
Drop Ship From China		10-100 Pieces		101-500		501-1000		1000-4000		4000+
$2.48 + shipping		$7.00+ shipping		$6.75+ shipping		$6.50+ shipping		$6.00+ shipping		$5.25+ shipping

  

 

Each yoga mat costs us $2.48 FOB China. We will contract with a shipping company in order to deliver the mats to the customers’ doors in the United States. We anticipate shipping costs will be less than $1 per mat, and have held discussions with two freight forwarding companies. We have not yet contracted with a shipping company.

 

Assuming that the pricing above is correct, our profit margin per piece is as follows:

 

• 10-100 pieces - $4.52 profit per unit

• 101-500 pieces - $4.27 profit per unit

• 501-1000 pieces - $4.02 profit per unit

• 1000-4000 pieces - $3.52 profit per unit

• 4000 or more pieces - $2.77 profit per unit

 

As our second year commences we plan to offer further yoga products to corporations as part of their promotional giveaways. We may also offer to hold corporate yoga retreats in certain areas of the country. Our secretary Ryan Goldstein will coordinate these retreats and we will market this to our existing client base.

 

Additional Equity Raises

 

On March 25, 2010, the Company issued 1,000,000 shares of common stock to a director of the Company, for a $100 subscription receivable. Payment was received in 2010.

 

On July 1, 2010, the Company issued 3,750,000 shares of common stock to a director of the Company, for a $375 subscription receivable. Payment was received in 2010.

 

We still do not have sufficient resources to effectuate our business plan. As of March 31, 2012, we had approximately $1,203 in cash. As noted above, we expect to incur a minimum of $40,000 in expenses related to our yoga mat business during the next twelve months of operations.

 

Off-Balance Sheet Arrangements

 

We have no off-balance sheet arrangements.

 

Item 4T. Controls and Procedures

 

Evaluation of Disclosure Controls and Procedures

 

Our disclosure controls and procedures are designed to ensure that information required to be disclosed in reports that we file or submit under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the United States Securities and Exchange Commission. Our principal executive officer and principal financial officer have reviewed the effectiveness of our “disclosure controls and procedures” (as defined in the Securities Exchange Act of 1934 Rules 13a-14(c) and 15d-14(c)) as of the end of the period covered by this report and have concluded that the disclosure controls and procedures are not effective to ensure that material information relating to the Company is recorded, processed, summarized, and reported in a timely manner.

 

Changes in Internal Controls

 

There have been no changes in the Company's internal control over financial reporting during the last quarterly period covered by this report that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.

 

  

PART II

OTHER INFORMATION

 

Item 1.     Legal Proceedings

 

There are no pending legal proceedings to which the Company is a party or in which any director, officer or affiliate of the Company, any owner of record or beneficially of more than 5% of any class of voting securities of the Company, or security holder is a party adverse to the Company or has a material interest adverse to the Company. The Company’s property is not the subject of any pending legal proceedings.

 

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

 

None

 

Item 3. Defaults upon Senior Securities

 

None.

 

Item 4. Submission of Mattes to a Vote of Security Holders

 

There was no matter submitted to a vote of security holders during the fiscal quarter ended March 31, 2012.

 

Item 5. Other Information

 

None.

 

Item 6. Exhibits

 

Exhibit
Number		Description
31.1		Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2		Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1		Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

 

  

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this quarterly report on Form 10-Q to be signed on its behalf by the undersigned thereunto duly authorized.

 

	GELTOLOGY INC.
Date: May 14, 2012	By:	/s/ Yehuda Smaya Szender
		Name: Yehuda Smaya Szender Title: President, Chief Executive Officer, Treasurer and Director (Principal Executive Officer and Principal Financial and Accounting Officer)

 

Date: May 14, 2012		By:	/s/ Ryan Goldstein
		Name: Ryan Goldstein Title: Secretary and Director