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 August 31, 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.)
2470 East 16th Street Brooklyn, NY 11235
(Address of principal executive offices)
800-221-2972
(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: 75,133,132 shares as of October 20, 2014.

 

 

 

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

 

 

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 August 31, 2014 and May 31, 2014 (unaudited);
F-2	Statements of Operations for the three months ended August 31, 2014 and 2013 (unaudited);
F-3	Statements of Cash Flows for the three months ended August 31, 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 August 31, 2014 are not necessarily indicative of the results that can be expected for the full year.

 

 

PERK INTERNATIONAL INC.

BALANCE SHEETS (UNAUDITED)

AS OF AUGUST 31, 2014 AND MAY 31, 2014

 

		August 31, 2014				May 31, 2014
ASSETS
Current assets
Cash and cash equivalents		$	-			$	23
Other Assets
Website development, net			5,625				6,000
TOTAL ASSETS		$	5,625			$	6,023
LIABILITIES AND STOCKHOLDERS’ DEFICIT
Liabilities
Current Liabilities
Accounts payable and accrued expenses		$	17,085			$	22,355
Bank overdraft			25				-
Shareholder loans			3,949				3,752
Total Liabilities			21,059				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 August 31, 2014 and May 31, 2014, respectively			7,513				7,506
Additional paid in capital			48,672				38,665
Stock warrants			6,115				6,129
Accumulated deficit			(77,734	)			(72,384	)
Total Stockholders’ Deficit			(15,434	)			(20,084	)
TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT		$	5,625			$	6,023

 

See accompanying notes to financial statements.

 

 

PERK INTERNATIONAL INC.

STATEMENTS OF OPERATIONS (UNAUDITED)

FOR THE THREE MONTHS ENDED AUGUST 31, 2014 AND 2013

 

		Three months ended August 31, 2014				Three months ended August 31, 2013
REVENUES		$	-			$	-
OPERATING EXPENSES
Professional fees			6,030				8,394
Filing fees			(1,375	)			1,833
Amortization			375				375
Bank charges			245				115
Interest expense			75				6
TOTAL OPERATING EXPENSES			5,350				10,723
LOSS BEFORE INCOME TAXES			(5,350	)			(10,723	)
PROVISION FOR INCOME TAXES			-				-
NET LOSS		$	(5,350	)		$	(10,723	)
NET LOSS PER SHARE: BASIC AND DILUTED		$	(0.00	)		$	(0.00	)
WEIGHTED AVERAGE SHARES OUTSTANDING: BASIC AND DILUTED			75,103,514				45,000,000

 

See accompanying notes to financial statements.

 

 

PERK INTERNATIONAL INC.

STATEMENTS OF CASH FLOWS (UNAUDITED)

FOR THE THREE MONTHS ENDED AUGUST 31, 2014 AND 2013

 

		Three months ended August 31, 2014				Three months ended August 31, 2013
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss for the period		$	(5,350	)		$	(10,723	)
Adjustment to reconcile net loss to net cash used in operating activities:
Amortization			375				375
Changes in assets and liabilities:
Increase (decrease) in accounts payable and accrued expenses			(5,270	)			8,400
Net Cash Used in Operating Activities			(10,245	)			(1,948	)
CASH FLOWS FROM FINANCING ACTIVITIES
Increase in bank overdraft			25				-
Exercise of stock warrants			10,000				-
Shareholder loans			197				377
Net Cash Provided by Financing Activities			10,222				377
Net (Decrease) in Cash and Cash Equivalents			(23	)			(1,571	)
Cash and cash equivalents, beginning of period			23				1,577
Cash and cash equivalents, end of period		$	-			$	6
SUPPLEMENTAL CASH FLOW INFORMATION:
Interest paid		$	-			$	-
Income taxes paid		$	-			$	-

 

See accompanying notes to financial statements.

 

 

PERK INTERNATIONAL INC.

NOTES TO THE FINANCIAL STATEMENTS

AUGUST 31, 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 August 31, 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.

 

 

PERK INTERNATIONAL INC.

NOTES TO THE FINANCIAL STATEMENTS

AUGUST 31, 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 August 31, 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. 

 

 

 PERK INTERNATIONAL INC.

NOTES TO THE FINANCIAL STATEMENTS

AUGUST 31, 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 $77,734 as of August 31, 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 $284 on the outstanding balance as of August 31, 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.

 

 

PERK INTERNATIONAL INC.

NOTES TO THE FINANCIAL STATEMENTS

AUGUST 31, 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, 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.

 

There are 29,866,668 stock warrants remaining as of August 31, 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			29,333,334			$	0.15
Granted			-				-
Exercised			(66,666	)			(0.15	)
Cancelled or Expired			-				-
August 31, 2014			29,866,668			$	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.

 

NOTE 6 – SUBSEQUENT EVENTS

 

In accordance with ASC Topic 855-10, the Company has analyzed its operations subsequent to August 31, 2014 to the date these financial statements were issued, and has determined that it does not have any material subsequent events to disclose in these financial statements.

 

 

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

 

Perk International Inc. (“Perk” or the “Company”) was incorporated in the State of Nevada on April 10, 2013. We plan 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 in the Greater Toronto Area (GTA).

 

We plan to be an Internet-based company that provides daily deals/coupons to consumers within the Greater Toronto Area. Our goal is to utilize the business models of companies such as Groupon® and Living Social® to design and develop a daily deal e-commerce company that will focus on consumer goods, services and restaurant deals. The deals we will offer on www.usellisave.com will be discounts on family vacation packages, outdoor activities, restaurants, consumer services and more.

 

Our business operations will be divided into the following core functions to address the needs of our merchants and subscribers.

 

Website Development. The first step in realizing our business model is the design and development of our intended website platform. We have contracted with a website developer to build a custom daily deal website, as well as an in-depth back-end to our website that will allow us to store and view details about every merchant and subscriber easily upload new deals, track sales and much more. Our website platform has been developed based off of the initial design mockups that we have developed with the help of a designer. The website developer that we have engaged will also integrate an e-commerce platform into our website to process credit cards and post payments to different accounts. Our website is hosted by a website hosting company that will host our website and applications, as well as our back-end development and analytical platform. We have completed the development of our website at a cost of $7,500.

 

We also plan to begin the development of our mobile website and applications for smartphones and tablets within the next twelve months, and will begin to offer our Daily Deal whereby subscribers can receive exclusive, short-term deals via their mobile devices.

 

Sales Representatives. Mr. Gaudet will act as our sales representatives. He will help identify merchant leads and manage deal scheduling to maximize deal quality and variety within our market. In identifying merchant leads, sales representatives will be instructed to rank local merchants based on reviews and local feedback. We hope to employ sales representatives in about 18 months. We envision that our standard contractual arrangements will grant us the exclusive right to feature certain deals for a merchant’s products and services for a limited time period and provide us with the discretion as to whether or not to offer the deal during such period. In scheduling deals, sales representatives will review deals in our merchant pool and determine which deals to offer based on the viability and quality of the deal as well as gross profit and marketing goals. Sales representatives will be given sales quotas based on category performance in a particular area, such as addressable market size and scheduling diversity. Until such a time that we are able to hire editorial writers, our future sales representatives will also be responsible for creating content for each deal we offer.

 

Customer Service. Our future customer service department will be run by our President, Andrew Gaudet, and will be accessible to subscribers, merchants and the general public via telephone during normal business hours, five days a week, or via e-mail 24 hours a day, seven days a week. As of the date of this filing, we have not yet retained any customer service representatives, other than our President. We will hire additional customer service representatives, as needed, as our company grows.

 

 

Marketing. We believe that we can build a trusted and recognizable brand by delivering high deal quality to subscribers in a niche market, and by offering a payout structure to merchants that is greater than that of our competitors. After the beta testing of our website is complete, we plan to hire a professional marketing firm full-time to advertise our brand. Once we have initiated our marketing plan, we believe that a substantial portion of our subscribers and merchants will be acquired through word-of-mouth. Our brand awareness will be an ongoing process as we try to establish our company and grow to new markets.

 

We believe that with the help of the professional marketing firm we intend to engage, we will obtain subscribers after 3 to 4 months of Web marketing within the Greater Toronto Area.

 

Seek Strategic Acquisitions and Partnerships. If we are able to generate significant revenue, maintain steady business operations, and significantly increase the number of our sales representatives and employees, we will seek strategic acquisitions and partnerships with small companies throughout the United States and Canada that have a similar business model as we do, to help our company expand beyond the Greater Toronto Area. We believe that the benefit of these acquisitions and partnerships would be to provide us with localized management and access to subscribers and merchants that we might not otherwise reach.

 

Results of Operations for the three months and nine months ended August 31, 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 $5,350 for the three months ended August 31, 2014. Our operating expenses for the three months ended August 31, 2014 consisted of professional fees in the amount of $6,030, SEC filing costs of $(1,375), amortization of $375, bank fees of $245 and interest expense of $75.

 

We incurred operating expenses of $10,723 for the three months ended August 31, 2013. Our operating expenses for the three months ended August 31, 2013 consisted of professional fees in the amount of $8,394, SEC filing costs of $1,833, amortization of $375, bank fees of $115 and interest expense of $6.

 

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 $5,350 for the three months ended August 31, 2014. We incurred a net loss of $10,723 for the three months ended August 31, 2013.

 

Liquidity and Capital Resources

 

As of August 31, 2014, we had total current assets of $0. We had current liabilities of $21,059 as of August 31, 2014. Accordingly, we had a working capital deficit of $(21,059) as of August 31, 2014.

 

Operating activities used $10,245 in cash for the three months ended August 31, 2014. Our negative operating cash flow for August 31, 2014 was mainly a result of operating expenses and the payment of accounts payable and accrued expenses.

 

Financing activities provided $10,222 in cash for the three months ended August 31, 2014. Our positive cash flow from financing activities for the three months ended August 31, 2014 was the result of proceeds from the exercise of stock warrants.

 

 

As of August 31, 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 $77,734 as of August 31, 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 August 31, 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 August 31, 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 August 31, 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 August 31, 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.

 

 

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 three months ended August 31, 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 August 31, 2014 formatted in Extensible Business Reporting Language (XBRL).
		**Provided herewith

 

 

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:	October 20, 2014
	By:	/s/ Andrew Gaudet
		Andrew Gaudet
	Title:	President, Chief Executive Officer, Chief Financial Officer and Director

 

 

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