UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
For the quarterly period ended
or
Commission File Number
(Exact name of small business issuer as specified in its charter) |
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(State or other jurisdiction of incorporation or organization) |
| (I.R.S. Employer Identification No.) |
(Address of principal executive offices)
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(Company’s telephone number, including area code)
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.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 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 such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer | ☐ | Accelerated filer | ☐ |
☐ | Smaller reporting company | ||
(Do not check if a smaller reporting company) | Emerging growth company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes
The Company has
TABLE OF CONTENTS
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Management’s Discussion and Analysis of Financial Condition and Results of Operations |
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PART I – FINANCIAL INFORMATION
Condensed Financial Statements
of
BROOQLY, INC.
For the Three Months Ended March 31, 2022
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BROOQLY, INC
TABLE OF CONTENTS
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Unaudited Condensed Financial Statements |
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Unaudited Condensed Balance Sheets as of March 31, 2022, and December 31, 2021 |
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BrooqLy Inc.
Unaudited Condensed Balance Sheets
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ASSET |
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Current Assets |
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Cash |
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Prepaid Expenses |
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Total Current Assets |
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Long-term Assets |
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Intangible Assets, net |
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Total Long-term Assets |
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Total Assets |
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LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
Current Liabilities |
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Accounts Payable |
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Due to related party |
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Total Current Liabilities |
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Stockholders’ Equity |
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Common stock, par value $ |
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Additional paid in capital |
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Subscription Receivable |
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Accumulated deficit |
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Total Stockholders’ Equity |
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Total Liabilities and Stockholders’ Equity |
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The accompanying notes are an integral part of these unaudited condensed financial statements.
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| Table of Contents |
BrooqLy Inc.
Unaudited Condensed Statements of Operations
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Revenue |
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Total Revenue |
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Operating expenses |
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Professional fees |
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Other general and administrative costs |
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Total operating expenses |
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Loss from operations |
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Interest Expense |
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Other Income (expense) net |
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Loss before income tax |
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Net loss |
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Net Loss Per Common Stock - basic and fully diluted |
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Weighted-average number of shares of common stock outstanding - basic and fully diluted |
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The accompanying notes are an integral part of these unaudited condensed financial statements.
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| Table of Contents |
BrooqLy Inc.
Unaudited Condensed Statements of Cash Flows
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Cash Flows from Operating Activities |
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Net loss for the period |
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Adjustments to reconcile net loss to net cash used in operating activities |
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Amortization |
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Changes in assets and liabilities |
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Accounts Payable |
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Due to related party |
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Net cash used in operating activities |
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Cash Flows from Investing Activities |
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Software |
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Net cash used in investing activities |
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Cash Flows from Financing Activities |
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Shares issued for cash |
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Net cash provided by financing activities |
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Net decrease in Cash |
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Change in Cash |
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Cash at end of period |
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The accompanying notes are an integral part of these unaudited condensed financial statements.
| F-5 |
| Table of Contents |
BrooqLy Inc.
Unaudited Condensed of the Changes in Stockholder's Equity(Deficit)
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Balance, January 1, 2022 |
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Shares issued for Services |
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Subscription Receivable |
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Reversal of Warrants |
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Net Loss for the Three Months Ended March 31, 2022 |
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Balance, March 31, 2022 |
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Balance, February 19, 2021 (Inception) |
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Net Loss for the Three Months Ended March 31, 2021 |
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Balance, March 31, 2021 |
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The accompanying notes are an integral part of these unaudited condensed financial statements.
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| Table of Contents |
BROOQLY, INC
Notes to the Unaudited Condensed Financial Statements
NOTE 1 – DESCRIPTION OF BUSINESS
The Company is an early-stage company incorporated in Nevada on February 19, 2021, under the name “MyTreat, Inc”. On May 12, 2021, pursuant to an amendment to its Articles of Incorporation the Company filed with the state of Nevada, the Company changed its name to brooqLy, Inc.
The Company is a social networking platform that connects people using the practice of treating products via our Platform. The participants in our Platform include:
| · | Shops that register to use the Company’s Platform |
| · | Sending Consumers who order “treats” for Receiving Consumers who download our app and are registered on the Company’s Platform. |
| · | Receiving Consumers who receive the “treats” from Sending Consumers who have downloaded the Company’s r app and are registered on the Company’s Platform. |
The Company has created a technology infrastructure for the Shops, Sending and Receiving consumers, and Brands that wish to advertise with the Company, to interconnect, interact, and engage in what the Company has strived for, a “fun experience.” The Company’s Platform serves as the connection point and facilitator among its Platform participants, who are the Shops Sending Consumers, and Receiving Consumers.
On October 14, 2021, the Company applied to the EU Intellectual Property Office for the trademark "BROOQLY", which application was accepted on February 2, 2022.
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING AND BENEFICIAL CONVERSION FEATURES POLICIES
Basis of Presentation
The condensed financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America and are presented in US dollars, unless indicated otherwise. The company believes that the disclosures in these condensed financial statements are adequate and not misleading. In the opinion of management, the condensed financial statements and notes contain all adjustments necessary for a fair presentation of the Company’s financial position as of March 31, 2022, and statements of operations and cash flows for the three months ended March 31, 2022. The results of operations for the three months ended March 31, 2022 are not necessarily indicative of results for the entire year ending December 31, 2022.
The accompanying condensed financial statements reflect the application of certain significant accounting policies as described below and elsewhere in these notes to the condensed financial statements.
Accounting Basis
The Company uses the accrual basis of accounting and accounting principles generally accepted in the United States of America (“GAAP”). The Company has adopted a December 31 fiscal year end.
Use of Estimates
The preparation of condensed 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, revenue and expenses and disclosure of contingent assets and liabilities at the date the condensed financial statements and the reported amount of revenues and expenses during the reporting period. Actual results could differ from those estimates.
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Cash and Cash Equivalents
Company considers all cash on hand and in banks, certificates of deposit and other highly liquid investments with maturities of three months or less, when purchased, to be cash and cash equivalents.
Intangible Assets
Intangible assets are measured at cost less accumulated amortization and impairment losses, if any. They are amortized on a straight-line basis over their estimated useful lives. The company has amortized their software application over the useful life of
Fair Value of Financial Instruments
The Company’s financial instruments consist of cash and cash equivalents. 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 condensed 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.
Revenue Recognition
The Company recognizes revenue in accordance with FASB ASC 606 upon the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The company has three types of revenues; a) fees charged to shops for registering with the company’s app, b) treats sent from receiving and/or sending consumers, and c) advertising from other company brands on the app.
All services are recorded at the time that control of the products is transferred to the Receiving consumers upon their redemption of their treat. In evaluating the timing of the transfer of control of products to customers, we consider several indicators, including, our right to payment, and the legal title of the products. Based on the assessment of control indicators, sales are generally recognized when products are delivered to consumers.
Revenue recognized from contracts with customers is disclosed separately from other sources of revenue. ASC 606 includes guidance on when revenue should be recognized on a Gross (Principal) or Net (Agent) basis. The Company’s revenue is recognized primarily as performance obligations are satisfied. For all fixed-price contracts, revenue is recognized based on the actual service provided to the end of the reporting period.
Stock-Based Compensation
The measurement and recognition of stock - based compensation expense is based on estimated fair values for all share-based awards made to employees and directors, including stock options and for non-employee equity transactions as per ASC 718 rules.
For transactions in which we obtain certain services of employees, directors, and consultants in exchange for an award of equity instruments, we measure the cost of the services based on the grant date fair value of the award. We recognize the cost over the vesting period.
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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 March 31, 2022.
Recent Accounting Pronouncements
In December 2019, the FASB issued ASU 2019-12: Simplifying the Accounting for Income Taxes (Topic 740), which removes certain exceptions to the general principles in Topic 740 and improves consistent application of and simplifies GAAP for other areas of Topic 740 by clarifying and amending existing guidance. This ASU is effective for fiscal years beginning after December 15, 2020, and interim periods within those fiscal years, with early adoption permitted. The Company will be adopting this new accounting guidance this year, that may result in tax payable for the foreign subsidiary.
Foreign Currency Translation
The Company considers the U.S. dollar to be its functional currency as it is the currency of the primary economic environment in which the Company operates. Accordingly, monetary assets and liabilities denominated in foreign currencies are translated into U.S. dollars at the exchange rate in effect at the balance sheet date and non-monetary assets and liabilities are translated at the exchange rates in effect at the time of acquisition or issue. Revenues and expenses are translated at rates approximating the exchange rates in effect at the time of the transactions. All exchange gains and losses are included in operations.
NOTE 3 – GOING CONCERN
The accompanying condensed financial statements have been prepared in conformity with generally accepted accounting principles, which contemplates the continuation of the Company as a going concern. The Company recorded $
Management anticipates that the Company will be dependent, for the near future, on additional investment capital to fund operating expenses. The Company intends to position itself so that it may be able to raise additional funds through the capital markets. In light of management’s efforts, there are no assurances that the Company will be successful in this or any of its endeavors or become financially viable and continue as a going concern. If the company is unable to raise additional funds, there is substantial doubt about its ability to continue as a going concern.
NOTE 4 – STOCKHOLDERS’ EQUITY
Issuance of Common Stock
The Company has
For the year ended December 31, 2021, the Company issued
| F-9 |
| Table of Contents |
For the three months ended March 31, 2022, the Company cancelled
Warrants
From September 17, 2021, to December 31, 2021, the company sold
Under ASC 480 “Distinguishing Liabilities from Equity” the management has determined that these warrants are freestanding instruments issued by the Company to a shareholder giving them the right to purchases additional equity shares, thereby they are classified as equity. The warrants meet the underling factors that determine if they fall under the scope of ASC 480-10 to be classified as equity. The share purchase warrants are classified as equity instruments because a fixed amount of cash is exchanged for a fixed amount of equity.
On February the 23, 2022 with the Unanimous Board Resolution, the Company cancelled
Changes in Equity
For the year beginning January 1, 2022, the company had a stockholders’ equity balance of $
For the period beginning from inception, February 19, 2021, the company had a stockholders’ deficit balance of $
NOTE 5 – COMMITMENTS AND CONTINGENCIES
The Company neither owns nor leases any real or personal property. Such costs are immaterial to the condensed 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.
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| Table of Contents |
NOTE 6 – INCOME TAXES
The Company’s has an overall net loss and as a result there exists doubt as to the ultimate realization of the deferred tax assets. Accordingly, a valuation allowance equal to the total deferred tax assets has been recorded.
The components of net deferred tax assets are as follows:
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The Company had federal net operating loss carry forwards for tax purposes of $
NOTE 7 – SUBSEQUENT EVENTS
The Company has analyzed its operations subsequent to March 31, 2022, through the date of this filing, and has determined that there are no following material subsequent events to these condensed financial statements.
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| Table of Contents |
Item 2 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Going Concern
At March 31, 2022, we had a working capital deficit of approximately $52,665 and we have yet to commence our plan of operations. Our current liquidity resources are not sufficient to fund its anticipated level of operations for at least the next 12 months from the date these condensed financial statements were issued. As a result, there is substantial doubt regarding the Company’ ability to continue as a going concern.
Our ability to continue operations depends on its ability to generate and grow revenue and results of operations as well as its ability to access capital markets when necessary to accomplish its strategic objectives. We expect that we will continue to incur losses for the immediate future and will need additional equity or debt financing until we can achieve profitability and positive cash flows from operating activities. Our future capital requirements for its operations will depend on many factors, including the ability to generate revenues and its ability to obtain capital. There is no assurance that we will be successful in any capital-raising efforts that it may undertake to fund operations and implement its business plan in the future.
Our plans to implement our Plan of Operations include the following:
| · | Continual upgrading, development and integration of platform |
| · | Secure international local partner contracts and create new markets |
The foregoing goals will increase expenses and lead to possible net losses. There is no assurance that we will ever be profitable or that debt or equity financing will be available to us. The condensed financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classifications of liabilities that may result should we be unable to continue as a going concern. There is no assurance we will be successful in any of these goals.
Results of Operations
The following information should be read in conjunction with the condensed financial statements and notes appearing elsewhere in this Report. We have generated minimal revenues from inception to date. We anticipate that we may not receive any significant revenues from operations until we begin our planned operations
For the Three Months Ended March 31, 2022 and 2021
Revenues
We had $115 in revenues for the three months ended March 31, 2022 and $0 for the three months ended March 31, 2021.
Operating Expenses
Our operating expenses totaled $66,827 and $4,925 for the three months ended March 31, 2022 and March 31, 2021 respectively.
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| Table of Contents |
Other Income and Expenses
Net Loss
For the three months ended March 31, 2022 and 2021, we recognized net losses of $66,712 and $4,925 respectively The net losses are due to the $66,827 and $4,925 in operating expenses.
We anticipate losses from operations will increase during the next twelve months due to anticipated $76,000 in legal and accounting expenses associated with maintaining a reporting company. We expect that we will continue to have net losses from operations until revenues become sufficient to offset operating expenses.
Liquidity and Capital Resources
We have generated minimal revenues since inception. We have obtained cash for operating expenses mainly through advances and/or loans from affiliates and stockholders.
At March 31, 2022, we had a working capital deficit of $52,665 and have yet to procure additional investment capital. Our current liquidity resources are not sufficient to fund our anticipated level of operations. As a result, there is substantial doubt regarding our ability to continue as a going concern. Our ability to continue operations depends on our ability to generate and grow revenue as well as access capital markets when necessary to fund strategic objectives. We expect to continue to incur losses for the immediate future and will need additional equity or debt financing until we can achieve profitability and positive cash flows from operating activities. There is no assurance that the Company will be successful in any capital-raising efforts that it may undertake to fund operations and implement our business plan in the future.
Net Cash Used in Operating Activities.
During the three months ended March 31, 2022, and March 31, 2021, our net cash used in operating activities was $31,600 and $0, respectively. The increase is mainly due to accounts payable and receipt of Subscriptions Receivable. Our primary uses of funds in operations were payments made for legal and professional costs.
Net Cash Used in Investing Activities.
For the three months ended March 31, 2022, our net cash used from investment activities was $8,250 and $0, respectively.
Net Cash Provided by Financing Activities.
As of March 31, 2022, net cash provided by financing activities was $12,999 and $0, respectively.
Cash Position and Outstanding Indebtedness.
Our total indebtedness at March 31, 2022 was $56,053, all of which are considered current liabilities. Current liabilities consist primarily of accounts payable and due to related party.
At March 31, 2022, we had $3,388 of current assets and our working capital deficit was $52,665.
Off-Balance Sheet Arrangements
We have not and do not have any relationships with unconsolidated entities or financial partnerships, such as entities often referred to as structured finance or special purpose entities, which would have been established for the purpose of establishing off-balance sheet arrangements or other contractually narrow or limited purposes. Therefore, we do not believe we are exposed to any financing, liquidity, market or credit risk that could arise if we had engaged in such relationships.
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| Table of Contents |
The above discussion should be read in conjunction with our consolidated financial statements and the related notes. The following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward-looking statements.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.
ITEM 4. CONTROLS AND PROCEDURES
EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES
We maintain disclosure controls and procedures that are designed to ensure the information required to be disclosed in our reports filed pursuant to the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission rules and forms and that such information is accumulated and communicated to our principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure.
As of March 31, 2022, we carried out an evaluation, under the supervision and with the participation of our principal executive officer and our principal financial officer of the effectiveness of the design and operation of our disclosure controls and procedures. Based on this evaluation, our principal executive officer and our principal financial officer concluded that our disclosure controls and procedures were not effective as of the end of the period covered by this report.
The determination that our disclosure controls and procedures were not effective as of March 31, 2022 is a result of not having adequate staffing and supervision within the accounting operations of our Company. The Company plans to expand its accounting operations as the business of the Company expands.
MANAGEMENT’S QUARTERLY REPORT ON INTERNAL CONTROLS OVER FINANCIAL REPORTING CHANGES IN INTERNAL CONTROLS OVER FINANCIAL REPORTING
There have been no changes in our internal controls over financial reporting during the quarter ended March 31, 2022 that have materially affected or are reasonably likely to materially affect our internal controls.
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PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None
ITEM 1A RISK FACTORS
As a smaller reporting company, we are not required to include risk factors; however, our Form 10-K for the FY ending December 31, 2021, contains various risk factors at the following link:
https://www.sec.gov/ix?doc=/Archives/edgar/data/1854526/000147793222001710/brooqly_10k.htm
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
None.
ITEM 4. MINING SAFETY DISCLOSURE
None.
ITEM 5. OTHER INFORMATION
None.
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ITEM 6. Exhibits.
EXHIBIT INDEX
Exhibit Number |
| Description |
| ||
| ||
| ||
| ||
101.INS |
| Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document). |
101.SCH |
| Inline XBRL Taxonomy Extension Schema Document |
101.CAL |
| Inline XBRL Taxonomy Extension Calculation Linkbase Document |
101.LAB |
| Inline XBRL Taxonomy Extension Labels Linkbase Document |
101.PRE |
| Inline XBRL Taxonomy Extension Presentation Linkbase Document |
101.DEF |
| Inline XBRL Taxonomy Extension Definition Linkbase Document |
104 |
| Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |
____________
* Pursuant to Rule 406T of Regulation S-T, these interactive data files are deemed not filed or part of the registration statement or prospectus for purposes of Sections 11 and 12 of the Securities Act of 1933 or Section 18 of the Securities Act of 1934 and otherwise are not subject to liability.
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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.
| BROOQLY, INC. |
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Date: May 16, 2022 | By: | /s/ Panagiotis Lazaretos |
|
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| Chief Executive Officer |
|
|
| (Principal Executive Officer Chief Executive Officer) |
|
| By: | /s/ Helen Maridakis |
|
|
| Chief Financial Officer |
|
|
| (Chief Financial Officer/Chief Accounting Officer) |
|
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