Business Context and Reporting Period
Company: Fits My Style Inc. (Note: Request metadata listed "Rezolute, Inc.", but the filing text identifies the registrant as Fits My Style Inc.)
Reporting Period: Fiscal year ended June 30, 2011 (Inception: July 26, 2010)
Status: Development stage company with no revenue from operations.
Business Model: Developing a web service and smartphone application allowing buyers to visualize merchandise (furniture, decor) in their own locations via uploaded photos. The company plans to license this technology to online retailers.
Key Financial Metrics
| Metric | Value (USD) |
|---|---|
| Revenue | $0 |
| Net Loss | $(41,927) |
| Research & Development Expenses | $24,500 |
| General & Administrative Expenses | $17,427 |
| Cash and Cash Equivalents | $37,030 |
| Total Current Assets | $37,030 |
| Total Current Liabilities | $11,657 |
| Working Capital | $25,373 |
| Net Cash Used in Operating Activities | $(4,770) |
| Net Cash Provided by Financing Activities | $41,800 |
| Shares Outstanding | 3,836,000 |
Material Changes and Operational Status
- Revenue Generation: The company has generated no revenue since inception. All operations are focused on product development.
- Development Progress: A "Proof-of-Concept" website is being outsourced to beIT Visual Communications (affiliated with the CEO) for a fixed cost of $10,000. As of the filing date, $5,000 had been paid. Completion is expected by January 2012.
- Capital Structure: The company raised $38,800 via a private placement in late 2010 and issued shares for intellectual property and services. There are no debt obligations listed, only accounts payable of $11,657.
- Going Concern: The auditors have issued a "going concern" opinion, stating substantial doubt exists regarding the company's ability to continue operations without additional financing.
Guidance, Outlook, and Risks
Management Outlook:
- Short-term Plan: Focus on completing the "Proof-of-Concept" website and securing field trials with select website owners.
- Long-term Plan: Develop a Beta version (12-18 months post-concept) requiring in-house staff and significant additional funding.
- Capital Needs: Management estimates a need for approximately $40,000 to fund operations for the next 12 months. No formal agreements for future funding exist, though the CEO has orally agreed to lend funds if necessary.
- Liquidity Risk: Current cash resources are insufficient to sustain operations beyond one year without new equity or debt financing.
- Technology Dependency: The commercial product relies on Microsoft Photosynth technology, for which the company has no binding agreement.
- Related Party Transactions: Significant development work is outsourced to a company owned by the CEO. The agreement can be terminated by the contractor with 45 days' notice.
- Market Acceptance: No market research has been conducted to validate the demand for the proposed service.
- Management Concentration: The CEO is not required to work exclusively for the company and devotes only 15-20 hours per week.
Investor Verification Checklist
- Capital Sufficiency: Verify if the company has secured the estimated $40,000 needed for the next 12 months, given the "going concern" warning.
- Related Party Agreements: Review the terms of the $10,000 contract with beIT Visual Communications and the risk of termination.
- Technology Licensing: Confirm if a license for Microsoft Photosynth or comparable technology has been secured for the Beta version.
- Stock Liquidity: Note that shares are not yet traded on a public exchange; the company is seeking OTC Bulletin Board quotation.
- Intellectual Property: Confirm the status of the IP assignment from the CEO, which was valued at $24,500 but contributed at a historical cost of $0.