Attached files
As filed with the Securities and Exchange Commission on April 20, 2015
Registration No. 333-201037
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Amendment No. 3
FORM S-1/A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Tapioca Corp.
(Name of small business issuer in its charter)
Nevada 2013 35-2507568
(State or Other Jurisdiction of (Primary Standard Industrial (IRS Employer
Incorporation or Organization) Classification Number) Identification Number)
Lasi, Vasile Lupu nr. 83, bl. D1, sc. B, Suite 37
Romania
tapiocagroupcorp@gmail.com
+ 4 (0373) 78 12 42
(Address, including zip code, and telephone number, including area code,
of registrant's principal executive offices)
Business Filings Incorporation
8040 Excelsior Dr. Suite 200 Madison WI 53717
Tel: 1-800-981-7183
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
Copies to:
SCOTT D. OLSON ESQ.
274 BROADWAY
COSTA MESA, CA 92627
TEL: 310.985.1034
FAX: 310.564.1912
EMAIL: SDOESQ@GMAIL.COM
Approximate date of commencement of proposed sale to the public: As soon as
practicable after this Registration Statement becomes effective.
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, please check the following box: [X]
If this form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering: [ ]
If this form is a post-effective registration statement filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering: [ ]
If this form is a post-effective registration statement filed pursuant to Rule
462(d) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering: [ ]
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 [X]
(Do not check if a smaller reporting company)
CALCULATION OF REGISTRATION FEE
===========================================================================================================
Title of Each Class Proposed Maximum Proposed Maximum Amount of
of Securities to be Amount of Shares Offering Price Aggregate Offering Registration
Registered to be Registered (1) per Share (2) Price Fee
-----------------------------------------------------------------------------------------------------------
Common Stock 10,000,000 $ 0.01 $100,000 $11.62
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(1) In the event of a stock split, stock dividend or similar transaction
involving our common stock, the number of shares registered shall
automatically be increased to cover the additional shares of common stock
issuable pursuant to Rule 416 under the Securities Act of 1933, as amended
(the "Securities Act').
(2) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(a) of the Securities Act.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE
A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE
SECURITIES ACT OF 1933, OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SECTION 8(A), MAY
DETERMINE.
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PROSPECTUS
THE INFORMATION IN THIS PROSPECTUS MAY BE CHANGED. THESE SECURITIES MAY NOT BE
SOLD UNTIL THE REGISTRATION STATEMENT FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER TO SELL THESE
SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY THESE SECURITIES IN ANY
STATE WHERE THE OFFER OR SALE IS NOT PERMITTED. THERE IS NO MINIMUM PURCHASE
REQUIREMENT FOR THE OFFERING TO PROCEED.
TAPIOCA CORP.
10,000,000 SHARES OF COMMON STOCK
$0.01 PER SHARE
This is the initial offering of common stock of Tapioca Corp. and no public
market currently exists for the securities being offered. We are offering for
sale a total of 10,000,000 shares of common stock at a fixed price of $0.01 per
share. There is no minimum number of shares that must be sold by us for the
offering to proceed, and we will retain the proceeds from the sale of any of the
offered shares. The amount raised may be minimal and there is no assurance that
we will be able to raise sufficient amount to cover our expenses or at all and
may not even cover the costs of the offering.
The offering is being conducted on a self-underwritten, best efforts basis,
which means our President, Slav Serghei, will attempt to sell the shares. This
Prospectus will permit our President to sell the shares directly to the public,
with no commission or other remuneration payable to him for any shares he may
sell. The shares are being offered at a fixed price of $0.01 per share for a
period of one year from the effective date of this prospectus. The offering
shall terminate on the earlier of (i) the date when the sale of all 10,000,000
shares is completed, (ii) when the Board of Directors decides that it is in the
best interest of the Company to terminate the offering prior the completion of
the sale of all 10,000,000 shares registered under the Registration Statement of
which this Prospectus is part or (iii) one year after the effective date of this
prospectus. The Board of Directors may decide to terminate the offer prior to
the completion of the sale of all of the 10,000,000 shares being registered if
sufficient revenue is generated from operations to allow the company to further
its business plan without the need from outside funding. The offering will not
be extended beyond 360 days following the date of the prospectus.
THE SHARES WILL BE OFFERED AT A FIXED PRICE OF $0.01 PER SHARE FOR A PERIOD OF
240 DAYS FROM THE EFFECTIVE DATE OF THIS PROSPECTUS. THE COMPANY MAY ELECT TO
EXTEND THIS INITIAL OFFERING FOR FROM 240 DAYS FROM THE DATE OF THE DATE OF THE
PROSPECTUS TO A PERIOD OF 360 DAYS AFTER THE DATE OF THIS PROSPECTUS. FUNDS,
ONCE INVESTED BY AN INVESTOR, ARE IRREVOCABLE.
In the event the company sells 25% of the total offering, we will realize net
proceeds of approximately $15,000. In the event the company sells 50% of the
total offering, we will realize net proceeds of approximately $40,000. In the
event the company sells 75% of the total offering, we will realize net proceeds
of approximately $65,000. In the event the company sells 100% of the total
offering, we will realize net proceeds of approximately $90,000. There is no
guarantee that we will receive any proceeds from this offering.
We are an "emerging growth company" as defined in the Jumpstart Our Business
Startups Act ("JOBS Act"). Investing in our ordinary shares involves a high
degree of risk. Before buying any shares, you should carefully read the
discussion of material risks of investing in our ordinary shares in "Risk
Factors" beginning on page 5 of this prospectus.
Tapioca Corp. is a development stage company and currently has limited
operations. Any investment in the shares offered herein involves a high degree
of risk. You should only purchase shares if you can afford a loss of your
investment. Our independent registered public accountant has issued an audit
opinion for Tapioca Corp. which includes a statement expressing substantial
doubt as to our ability to continue as a going concern.
We are a development stage company with nominal operations and assets. As a
result, we are considered a shell company under Rule 405 of the Securities Act
and are subject to additional regulatory requirements as a result of this
status, including limitations on our shareholders' ability to re-sell their
shares in our company pursuant to Rule 144 of the Securities Act, as well as
additional disclosure requirements. Accordingly, investors should consider our
shares to be a high-risk and illiquid investment. See "Risk Factors" for the
risks of investing in a shell company.
We are a "shell company" within the meaning of Rule 405, promulgated pursuant to
Securities Act, because we have nominal assets and nominal operations. Because
we are a shell company, the Rule 144 safe harbor is not available for the resale
of any restricted securities issued by us in any subsequent unregistered
offering. This will likely make it more difficult for us to attract additional
capital through subsequent unregistered offerings because purchasers of
securities in such unregistered offerings will not be able to resell their
securities in reliance on Rule 144, a safe harbor on which holders of restricted
securities usually rely to resell securities.
SEE "RISK FACTORS" FOR A DISCUSSION OF CERTAIN INFORMATION THAT SHOULD BE
CONSIDERED IN CONNECTION WITH AN INVESTMENT IN THE COMMON STOCK OFFERED HEREBY.
There has been no market for our securities and a public market may never
develop, or, if any market does develop, it may not be sustained. Our common
stock is not traded on any exchange or on the over-the-counter market. After the
effective date of the registration statement relating to this prospectus, we
hope to have a market maker file an application with the Financial Industry
Regulatory Authority ("FINRA") for our common stock to be eligible for trading
on the Over-the-Counter Bulletin Board. We do not yet have a market maker who
has agreed to file such application. There can be no assurance that our common
stock will ever be quoted on a stock exchange or a quotation service or that any
market for our stock will develop.
Any funds received as a part of this offering will be immediately deposited into
the company's bank account and be available for our use. We have not made any
arrangements to place funds in an escrow, trust or similar account for general
business purposes as well as to continue our business and operations. If we fail
to raise enough capital to continue operations investors may lose their entire
investment and will not be entitled to a refund.
NEITHER THE SEC NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED
OF THESE SECURITIES OR PASSED UPON THE ADEQUACY OR ACCURACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE WILL
NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE U.S.
SECURITIES COMMISSION HAS BEEN CLEARED OF COMMENTS AND IS DECLARED EFFECTIVE.
THIS PROSPECTUS IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT
SOLICITING AN OFFER TO BUY THESE SECURITIES IN ANY STATE WHERE THE OFFER OF SALE
IS NOT PERMITTED.
SUBJECT TO COMPLETION, DATED APRIL 20, 2015
TABLE OF CONTENTS
PROSPECTUS SUMMARY 3
RISK FACTORS 7
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS 14
USE OF PROCEEDS 15
DETERMINATION OF OFFERING PRICE 16
DILUTION 16
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS 17
DESCRIPTION OF BUSINESS 31
DIRECTORS, EXECUTIVE OFFICERS, PROMOTER AND CONTROL PERSONS 36
EXECUTIVE COMPENSATION 38
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS 39
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT 39
PLAN OF DISTRIBUTION 40
DESCRIPTION OF SECURITIES 42
DISCLOSURE OF COMMISSION POSITION INDEMNIFICATION FOR SECURITIES
ACT LIABILITIES 45
LEGAL MATTERS 45
INTERESTS OF NAMED EXPERTS AND COUNSEL 45
EXPERTS 45
AVAILABLE INFORMATION 45
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE 46
INDEX TO THE FINANCIAL STATEMENTS 47
WE HAVE NOT AUTHORIZED ANY DEALER, SALESPERSON OR OTHER PERSON TO GIVE ANY
INFORMATION OR REPRESENT ANYTHING NOT CONTAINED IN THIS PROSPECTUS. YOU SHOULD
NOT RELY ON ANY UNAUTHORIZED INFORMATION. THIS PROSPECTUS IS NOT AN OFFER TO
SELL OR BUY ANY SHARES IN ANY STATE OR OTHER JURISDICTION IN WHICH IT IS
UNLAWFUL. THE INFORMATION IN THIS PROSPECTUS IS CURRENT AS OF THE DATE ON THE
COVER. YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED IN THIS PROSPECTUS.
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PROSPECTUS SUMMARY
AS USED IN THIS PROSPECTUS, UNLESS THE CONTEXT OTHERWISE REQUIRES, "WE," "US,"
"OUR," AND "TAPIOCA CORP." REFERS TO TAPIOCA CORP. THE FOLLOWING SUMMARY
PROVIDES A BRIEF OVERVIEW OF THE KEY ASPECTS OF THE OFFERING. YOU SHOULD READ
THE ENTIRE PROSPECTUS BEFORE MAKING AN INVESTMENT DECISION TO PURCHASE OUR
COMMON STOCK.
TAPIOCA CORP.
We are a development stage company in the business of selling Bubble Tea from
mobile stands in Romania. Bubble Tea, also called pearl milk tea, is brewed
black tea or green tea mixed with milk, sugar and chewy tapioca pearls, and
usually served cold with ice. Fruit-flavored Bubble Tea is also available in an
assortment of flavors such as mango, lychee, strawberry, honeydew and green
apple. Fruit purees (natural or sweetened), flavored syrups or fresh fruits are
added to the base tea for the fruity taste. Thanks to its natural components is
considered a beneficial drink, having a high content of calcium, phosphorus,
vitamin C and antioxidants and is a suitable alternative traditional tea and
coffee. It is a funky and unusual alternative to traditional tea that provides
the great taste of authentic fruit juice in an attractive and convenient
packaging. Our model is kiosk-based operations that rely heavily on pass-by
traffic. Because of it, we are looking for locations with existing traffic, such
as shopping malls, street corners, flea markets, schools, colleges,
universities, transportation hubs, such as bus, ferries, or train stations. At
the same time, mobility of our kiosks allows us to place them temporarily in
expo shows, sport games and concerts. The strategic role of Tapioca Corp. is
centered around three objectives:
* To stay at the forefront as the market leader in innovative product
introductions and successful product launches;
* To strengthen and satisfy the needs of the more adventurous Generation
Y consumers with a new eye-catching and FUNctional product;
* To become the market leader in the functional drinks segment with
increased market shares.
We placed our first Bubble Tea stand in Magurele, Bucharest -Ilfov, Muntenia,
Romania on March 1, 2015 and plan on placing additional Bubble Tea stands in
Romania major cities such as Bucharest, Ia?i and Cluj. It was purchased from the
loan provided by the Company's President. The locations that we believe will be
most suitable for our product are shopping malls, schools, colleges,
universities, streets, flea markets, expo shows, ferries, sport games and
concerts. We have purchased one Bubble Tea machine with stand and signed lease
agreement to place the unit in Magurele, Bucharest -Ilfov, Muntenia, Romania at
a cost of $6,000 for the first year, which will be covered by the loan promised
by the Company's President. Business at that Bubble Tea stand has yet to begin.
As a result, we have very limited operational revenues from operating our stand
at special events.
We are a company with limited revenues and have limited operations; we have
minimal assets and have incurred losses since inception. Our financial
statements for the period from April 18, 2014 (date of inception) to January 31,
2015, report revenues of $1,180 and a net loss of $(2,842). As of January 31,
2015, we had $2,120 in cash on hand. The limited revenue we have generated is
from operating our Bubble Tea Stand at special events. As of the date of this
prospectus we had $ 2,120 in cash on hand. Our independent registered public
accountant has issued an audit opinion for Tapioca Corp. which includes a
statement expressing substantial doubt about our ability to continue as a going
concern. If we are unable to obtain additional working capital our business may
fail. To date, the operations we have engaged in are (i) the development of a
business plan of purchasing and placing Bubble Tea stands throughout Romania in
major cities such as Bucharest, Ia?i and Cluj, (ii) the purchase and development
of one Bubble Tea machine with stand and (iii) the execution of a lease
agreement with Cristi Matache, at a cost of $6,000 for the first year, which
will be covered by the loan promised by the Company's President, to place it in
Magurele, Bucharest-Ilfov, Muntenia, Romania by March 1, 2015, which we have
done. We intend to use the net proceeds from this offering to develop our
business operations (See "Description of Business" and "Use of Proceeds"). Being
a development stage company, we have very limited operating history.
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Our principal executive office is located at Lasi, Vasile Lupu nr. 83, bl. D1,
sc. B, Suite 37, Romania. Our phone number is + (0373) 78 12 42. We do not have
a website.
We require a minimum funding of $25,000 to conduct our 12 months plan of
operation, and if we are unable to obtain this level of financing, our business
may fail.
Proceeds from this offering are required for us to proceed with our business
plan over the next twelve months. We require minimum funding of $25,000 to
conduct our proposed continuing operations and pay all expenses for a minimum
period of one year including expenses associated with maintaining a reporting
status with the SEC. If we are unable to obtain minimum funding of $25,000, our
business may fail. Even if we raise $100,000 from this offering or more, we may
need more funds to develop growth strategy and to continue maintaining a
reporting status.
As of the date of this prospectus, there is no public trading market for our
common stock and no assurance that a trading market for our securities will ever
develop.
Our president devotes approximately 20 hours/week to the business and he has no
prior experience managing a public company.
If necessary, Slav Serghei, our president, has verbally agreed to lend funds to
pay for the registration process and lend funds, up to $25,000, to further
follow our business plan and to help maintain a reporting status with the SEC in
the form of a non-secured loan for the next twelve months. On October 17, 2014,
he loaned the Company $5,000 of the $25,000, and on December 14, 2014, he loaned
the Company an additional $3,450. The loan is unsecured, non-interest bearing,
non-convertible and due on demand. However, the verbal agreement is not binding
and there is no guarantee that we will receive such loan.
Because we are a shell company, the Rule 144 safe harbor is not available for
the resale of any restricted securities issued by us in any subsequent
unregistered offering. This will likely make it more difficult for us to attract
additional capital through subsequent unregistered offerings because purchasers
of securities in such unregistered offerings will not be able to resell their
securities in reliance on Rule 144, a safe harbor on which holders of restricted
securities usually rely to resell securities.
There has been no market for our securities and a public market may never
develop, or, if any market does develop, it may not be sustained. Our common
stock is not traded on any exchange or on the over-the-counter market. After the
effective date of the registration statement relating to this prospectus, we
hope to have a market maker file an application with the Financial Industry
Regulatory Authority ("FINRA") for our common stock to be eligible for trading
on the Over-the-Counter Bulletin Board. We do not yet have a market maker who
has agreed to file such application. There can be no assurance that our common
stock will ever be quoted on a stock exchange or a quotation service or that any
market for our stock will develop.
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THE OFFERING
The Issuer: Tapioca Corp.
Securities Being Offered: 10,000,000 shares of common stock
Price Per Share: $0.01
Duration of the Offering: The offering shall terminate on the earlier of:
(i) the date when the sale of all 10,000,000
common shares is completed;
(ii) one year from the date of this prospectus; or
(iii) prior to one year at the sole determination
of the board of directors.
Securities Issued and
Outstanding: There are 3,500,000 shares of common stock issued
and outstanding as of the date of this prospectus,
held solely by our sole officer and director, Slav
Serghei.
Registration Costs We estimate our total offering registration costs
to be approximately $10,000.
Risk Factors: See "Risk Factors" and the other information in
this prospectus for a discussion of the factors
you should consider before deciding to invest in
shares of our common stock.
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SUMMARY FINANCIAL INFORMATION
The summarized financial data presented below is derived from, and should be
read in conjunction with, our audited financial statements and related notes
from April 18, 2014(date of inception) to October 31, 2014, included on Page F-1
in this prospectus.
FINANCIAL SUMMARY
October 31, 2014 ($)
--------------------
Cash and Deposits 1,425
Equipment 7,000
Total Assets 8,425
Total Liabilities 5,000
Total Stockholder's Equity 3,425
STATEMENT OF OPERATIONS
Accumulated From
April 18, 2014 to
October 31, 2014 ($)
--------------------
Total Expenses 75
Net Loss for the Period 75
Net Loss per Share (0.00)
The tables and information below are derived from our quarterly condensed
financial statements (unaudited) for the period from April 18, 2014 (Inception)
to January 31, 2015.
FINANCIAL SUMMARY
January 31, 2015 ($)
--------------------
Cash and Deposits 2,120
Equipment, net of accumulated amortization 6,988
Total Assets 9,108
Total Liabilities 8,450
Total Stockholder's Equity 658
STATEMENT OF OPERATIONS
Accumulated From
April 18, 2014 to
January 31, 2015 ($)
--------------------
Revenues 1,180
Cost of Goods Sold 200
Total Expenses 3,822
Net Loss for the Period (2,842)
Net Loss per Share (0.00)
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RISK FACTORS
An investment in our common stock involves a high degree of risk. You should
carefully consider the risks described below and the other information in this
prospectus before investing in our common stock. If any of the following risks
occur, our business, operating results and financial condition could be
seriously harmed. The trading price of our common stock, when and if we trade at
a later date, could decline due to any of these risks, and you may lose all or
part of your investment.
RISKS ASSOCIATED TO OUR BUSINESS
BECAUSE WE ARE CONSIDERED TO BE A "SHELL COMPANY" UNDER APPLICABLE SECURITIES
RULES, INVESTORS MAY NOT BE ABLE TO RELY ON THE RESALE EXEMPTION PROVIDED BY
RULE 144 OF THE SECURITIES ACT. AS A RESULT, INVESTORS MAY NOT BE ABLE TO
RE-SELL OUR SHARES AND COULD LOSE THEIR ENTIRE INVESTMENT.
We are considered to be a "shell company" under Rule 405 of Regulation C of the
Securities Act. A "shell company" is a company with either no or nominal
operations or assets, or assets consisting solely of cash and cash equivalents.
As a result, our investors are not allowed to rely on Rule 144 of the Securities
Act for a period of one year from the date that we cease to be a shell company.
Because investors may not be able to rely on an exemption for the resale of
their shares other than Rule 144, and there is no guarantee that we will cease
to be a shell company, they may not be able to re-sell our shares in the future
and could lose their entire investment as a result.
BECAUSE WE ARE CONSIDERED TO BE A "SHELL COMPANY" UNDER APPLICABLE SECURITIES
RULES, WE ARE SUBJECT TO ADDITIONAL DISCLOSURE REQUIREMENTS IF WE ACQUIRE OR
DISPOSE OF SIGNIFICANT ASSETS IN THE COURSE OF OUR BUSINESS. WE WILL INCUR
ADDITIONAL COSTS IN MEETING THESE REQUIREMENTS, WHICH WILL ADVERSELY IMPACT OUR
FINANCIAL PERFORMANCE AND, THEREFORE, THE VALUE OF YOUR INVESTMENT.
Because we are considered to be a "shell company" under Rule 405 of Regulation C
of the Securities Act, we are subject to additional disclosure requirements if
we entered into a transaction which results in a significant acquisition or
disposition of assets. In such a situation, we must provide prospectus-level,
detailed disclosure regarding the transaction, as well as detailed financial
information. In order to comply with these requirements, we will incur
additional legal and accounting costs, which will adversely impact our results
of operations. As a result, the value of an investment in our shares may decline
as a result of these additional costs.
RULE 144 SAFE HARBOR IS UNAVAILABLE FOR THE RESALE OF SHARES ISSUED BY US UNLESS
AND UNTIL WE CEASE TO BE A SHELL COMPANY AND HAVE SATISFIED THE REQUIREMENTS OF
RULE 144(I)(1)(2)
We are a "shell company" as defined by Rule 12b-2 promulgated under the Exchange
Act. Accordingly, the securities in this offering can only be resold through
registration under the Securities Act, meeting the safe harbor provisions of
paragraph (i) of Rule 144, or in reliance upon Section 4(1) of the Securities
Act of 1933 for non-affiliates.
RULE 144 SAFE HARBOR IS UNAVAILABLE FOR THE RESALE OF SHARES ISSUED BY US UNLESS
AND UNTIL WE HAVE CEASED TO BE A SHELL COMPANY AND HAVE SATISFIED THE
REQUIREMENTS OF RULE 144(I)(1)(2).
The SEC has adopted final rules amending Rule 144 which became effective on
February 15, 2008. Pursuant to Rule 144, one year must elapse from the time a
"shell company", as defined in Rule 405 of the Securities Act and Rule 12b-2 of
the Exchange Act, ceases to be a "shell company" and files Form 10 information
with the SEC, during which time the issuer must remain current in its filing
obligations, before a restricted shareholder can resell their holdings in
reliance on Rule 144.
The term "Form 10 information" means the information that is required by SEC
Form 10, to register under the Exchange Act each class of securities being sold
under Rule 144. The Form 10 information is deemed filed when the initial filing
is made with the SEC. Under Rule 144, restricted or unrestricted securities,
that were initially issued by a reporting or non-reporting shell company or a
7
company that was at anytime previously a reporting or non-reporting shell
company, can only be resold in reliance on Rule 144 if the following conditions
are met: (1) the issuer of the securities that was formerly a reporting or
non-reporting shell company has ceased to be a shell company; (2) the issuer of
the securities is subject to the reporting requirements of Section 13 or 15(d)
of the Exchange Act; (3) the issuer of the securities has filed all reports and
material required to be filed under Section 13 or 15(d) of the Exchange Act, as
applicable, during the preceding twelve months (or shorter period that the
issuer was required to file such reports and materials), other than Form 8-K
reports; and (4) at least one year has elapsed from the time the issuer filed
the current Form 10 type information with the SEC reflecting its status as an
entity that is not a shell company
WE HAVE A SOLE DIRECTOR AND OFFICER
Because our sole executive officer occupies all corporate positions, it may not
be possible to have adequate internal controls and that, because the sole
director and officer will determine his salary and perquisites, we may not have
funds available for net income.
BUBBLE TEA VENDING COPMANIES CONSIST OF MOSTLY NON-PUBLIC COMPANIES
Because Tapioca Bubble Tea companies consist of mostly non-public companies, a
small Tapioca Bubble Tea company with the added expenses of being a reporting
company might have a competitive disadvantage.
WE ARE A DEVELOPMENT STAGE COMPANY BUT HAVE LIMITED OPERATIONS IN OUR BUSINESS.
WE EXPECT TO INCUR OPERATING LOSSES FOR THE FORESEEABLE FUTURE.
We were incorporated on April 18, 2014 and to date have limited operations
consisting primarily of organizational activities, such as (i) the development
of a business plan of purchasing and placing Bubble Tea stands throughout
Romania in major cities such as Bucharest, Ia?i and Cluj, (ii) the purchase and
development of one Bubble Tea machine with stand, which was purchased from the
loan provided by the Company's President, and (iii) the execution of lease
agreement with Cristi Matache, at a cost of $6,000 for the first year, which
will be covered by the loan promised by the Company's President, to place it in
Magurele, Bucharest-Ilfov, Muntenia, Romania by March 1, 2015, which was done.
Accordingly, we have no way to evaluate the likelihood that our business will be
successful. We earned limited revenues as of the date of this prospectus.
Potential investors should be aware of the difficulties normally encountered by
new companies and the high rate of failure of such enterprises. The likelihood
of success must be considered in light of the problems, expenses, difficulties,
complications and delays encountered in connection with the operations that we
undertake. These potential problems include, but are not limited to,
unanticipated problems relating to the ability to generate sufficient cash flow
to operate our business, and additional costs and expenses that may exceed
current estimates. We expect to incur significant losses into the foreseeable
future. We recognize that if the effectiveness of our business plan is not
forthcoming, we will not be able to continue business operations. There is no
history upon which to base any assumption as to the likelihood that we will
prove successful, and it is doubtful that we will generate significant operating
revenues or ever achieve profitable operations. If we are unsuccessful in
addressing these risks, our business will most likely fail.
AS AN "EMERGING GROWTH COMPANY" UNDER THE JOBS ACT, WE ARE PERMITED TO RELY ON
EXEMPTIONS FROM CERTAIN DISCLOSURE REQUIREMENTS.
We qualify as an "emerging growth company" under the JOBS Act. As a result, we
are permitted to, and intend to, rely on exemptions from certain disclosure
requirements. For so long as we are an emerging growth company, we will not be
required to:
- have an auditor report on our internal controls over financial
reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act;
- comply with any requirement that may be adopted by the Public Company
Accounting Oversight Board regarding mandatory audit firm rotation or
a supplement to the auditor's report providing additional information
about the audit and the financial statements (i.e., an auditor
discussion and analysis);
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- submit certain executive compensation matters to shareholder advisory
votes, such as "say-on-pay" and "say-on-frequency;" and
- disclose certain executive compensation related items such as the
correlation between executive compensation and performance and
comparisons of the Chief Executive's compensation to median employee
compensation.
In addition, Section 107 of the JOBS Act also provides that an emerging growth
company can take advantage of the extended transition period provided in Section
7(a)(2)(B) of the Securities Act for complying with new or revised accounting
standards. In other words, an emerging growth company can delay the adoption of
certain accounting standards until those standards would otherwise apply to
private companies. We have elected to take advantage of the benefits of this
extended transition period. Our financial statements may therefore not be
comparable to those of companies that comply with such new or revised accounting
standards.
We will remain an "emerging growth company" for up to five years, or until the
earliest of (i) the last day of the first fiscal year in which our total annual
gross revenues exceed $1 billion, (ii) the date that we become a "large
accelerated filer" as defined in Rule 12b-2 under the Securities Exchange Act of
1934, which would occur if the market value of our ordinary shares that is held
by non-affiliates exceeds $700 million as of the last business day of our most
recently completed second fiscal quarter or (iii) the date on which we have
issued more than $1 billion in non-convertible debt during the preceding three
year period. Even if we no longer qualify for the exemptions for an emerging
growth company, we may still be, in certain circumstances, subject to scaled
disclosure requirements as a smaller reporting company. For example, smaller
reporting companies, like emerging growth companies, are not required to provide
a compensation discussion and analysis under Item 402(b) of Regulation S-K or
auditor attestation of internal controls over financial reporting.
Until such time, however, we cannot predict if investors will find our common
stock less attractive because we may rely on these exemptions. If some investors
find our common stock less attractive as a result, there may be a less active
trading market for our common stock and our stock price may be more volatile.
WE ARE SOLELY DEPENDENT UPON THE FUNDS TO BE RAISED IN THIS OFFERING TO START
OUR BUSINESS, THE PROCEEDS OF WHICH MAY BE INSUFFICIENT TO ACHIVE SIGNIFICANT
REVENUES. WE MAY NEED TO OBTAIN ADDITIONAL FINANCING WHICH MAY NOT BE AVAIALBLE.
We need the proceeds from this offering to advance operations. Our offering has
no minimum. Specifically, there is no minimum number of shares that needs to be
sold in this offering for us to access the funds. Given that the offering is a
best effort, self-underwritten offering, we cannot assure you that all or any
shares will be sold. We have no firm commitment from anyone to purchase all or
any of the shares offered. We may need additional funds to complete further
development of our business plan to achieve a sustainable sales level where
ongoing operations can be funded out of revenues. We anticipate that we must
raise or borrow the minimum capital of $25,000 to continue operations for the 12
month period and expenses for maintaining a reporting status with the SEC. There
is no assurance that any additional financing will be available or if available,
on terms that will be acceptable to us. We have not taken any steps to seek
additional financing.
IF WE RAISE PRICE OF OUR BUBBLE TEA THERE IS A POTENTIAL CHANCE OF REDUCTION IN
SALES
If we raise the price of our Bubble Tea, some of our customers may not be
willing or able to pay the increased prices causing a reduction in our sales
which may affect our business negatively. We intend to counteract rising
commodity prices by raising the price of our Bubble Tea and other products.
9
WE HAVE EARNED LIMITED REVENUE AND OUR ABILITY TO SUSTAIN OUR OPERATIONS IS
DEPENDENT ON OUR ABILITY TO RAISE FINANCING FROM THIS OFFERING. AS A RESULT,
THERE IS SUBSTANTIAL DOUBT ABOUT OUR ABILITY TO CONTINUE AS A GOING CONCERN.
We have accrued net losses of $2,842 for the period from our inception on April
18, 2014 to January 31, 2015, and have limited revenues to date of $1,180. This
operational revenues was generated from operating our Bubble Tea stand at
special events. Our future is largely dependent upon our ability to obtain
financing from this offering. Further, the finances required to fully develop
our plan cannot be predicted with any certainty and may exceed any estimates we
set forth. These factors raise substantial doubt that we will be able to
continue as a going concern. HARRIS & GILLESPIE CPA'S, PLLC, our independent
registered public accountant, has expressed substantial doubt about our ability
to continue as a going concern. This opinion could materially limit our ability
to raise funds. If we fail to raise sufficient capital when needed, we will not
be able to complete our business plan. As a result we may have to liquidate our
business and you may lose your investment. You should consider our independent
registered public accountant's comments when determining if an investment in
Tapioca Corp. is suitable.
IF WE DO NOT ATTRACT CUSTOMERS, WE WILL NOT MAKE A PROFIT, WHICH ULTIMATELY
WILL RESULT IN A CESSATION OF OPERATIONS.
We currently have no customers to purchase our product. We have not identified
any customers and we cannot guarantee we ever will have any customers. Even if
we obtain customers, there is no guarantee that we will generate a profit. If we
cannot generate a profit, we will have to suspend or cease operations. You are
likely to lose your entire investment if we cannot sell any of our services at
prices which generate a profit.
BECAUSE OUR SOLE OFFICER AND DIRECTOR OWNS 100% OF THE COMPANY'S SHARES AND WILL
OWN 26% OF THE COMPANY'S OUTSTANDING COMMON STOCK IF WE ARE SUCCESSFUL AT
COMPLETING THIS OFFERING, HE WILL MAKE AND CONTROL CORPORATE DECISIONS THAT MAY
BE DISADVANTAGEOUS TO MINORITY SHAREHOLDERS.
As of the date of this prospectus, Mr. Slav, our sole officer and director, owns
100% of the company's shares. The following table shows Mr. Slav' percentage
ownership assuming the sale of 25%, 50%, 75% and 100%, respectively, of the
securities offered:
Funding Level $ 25,000 $ 50,000 $ 75,000 $ 100,000
Offering price $ 0.01 $ 0.01 $ 0.01 $ 0.01
Shares being issued
through the offering 2,500,000 5,000,000 7,500,000 10,000,000
Mr. Slav's Shares 3,500,000 3,500,000 3,500,000 3,500,000
Total Shares Outstanding 6,000,000 8,500,000 11,000,000 13,500,000
Mr. Slav's percentage
ownership 58% 41% 32% 26%
10
Accordingly, he will have significant influence in determining the outcome of
all corporate transactions or other matters, including the election of
directors, issuance of additional shares, mergers, consolidations and the sale
of all or substantially all of our assets, and also the power to prevent or
cause a change in control. The interests of Mr. Slav may differ from the
interests of the other shareholders and may result in corporate decisions that
are disadvantageous to other shareholders.
BECAUSE OUR PRINCIPAL ASSETS WILL BE LOCATED IN BUCHAREST, ROMANIA, OUTSIDE OF
THE UNITED STATES, AND SLAV SERGHEI, OUR SOLE OFFICER AND DIRECTOR, RESIDES
OUTSIDE OF THE UNITED STATES IN ROMANIA, IT MAY BE DIFFICULT FOR AN INVESTOR TO
ENFORCE ANY RIGHT BASED ON U.S. FEDERAL SECURITIES LAWS AGAINST US AND/OR MR.
SLAV, OR TO ENFORCE A JUDGEMENT RENDERED BY A UNITED STATES COURT AGAINST US OR
MR. SLAV.
Our principal operations and assets are located in Bucharest, Romania outside of
the United States, and Slav Serghei, our sole officer and director, is a
non-resident of the United States. He is a resident of Romania. Therefore, it
may be difficult to effect service of process on Mr. Slav in the United States,
and it may be difficult to enforce any judgment rendered against Mr. Slav. As a
result, it may be difficult or impossible for an investor to bring an action
against Mr. Slav, in the event that an investor believes that such investor's
rights have been infringed under the U.S. securities laws, or otherwise. Even if
an investor is successful in bringing an action of this kind, the laws of
Romania may render that investor unable to enforce a judgment against the assets
of Mr. Slav. As a result, our shareholders may have more difficulty in
protecting their interests through actions against our management, director or
major shareholder, compared to shareholders of a corporation doing business and
whose officers and directors reside within the United States.
Additionally, because of our assets are located outside of the United States,
they will be outside of the jurisdiction of United States courts to administer,
if we become subject of an insolvency or bankruptcy proceeding. As a result, if
we declare bankruptcy or insolvency, our shareholders may not receive the
distributions on liquidation that they would otherwise be entitled to if our
assets were to be located within the United States under United States
bankruptcy laws.
WE ARTITRARILY DETERMINED THE PRICE OF THE SHARES OF OUR COMMON STOCK TO BE SOLD
PURSUANT TO THIS PROSPECTUS, AND SUCH PRICE DOES NOT REFLECT THE ACTUAL MARKET
PRICE FOR THE SECURITIES. CONSEQUENTLY, THERE IS AN INCREASED RISK THAT YOU MAY
NOT BE ABLE TO RE-SELL OUR COMMON STOCK AT THE PRICE YOU BOUGHT IT FOR.
The initial offering price of $0.01 per share of the common stock offered
pursuant to this prospectus was determined by us arbitrarily. The price is not
based on our financial condition or prospects, on the market prices of
securities of comparable publicly traded companies, on financial and operating
information of companies engaged in similar activities to ours, or on general
conditions of the securities market. The price may not be indicative of the
market price, if any, for our common stock in the trading market after this
offering. If the market price for our stock drops below the price which you
paid, you may not be able to re-sell out common stock at the price you bought it
for.
Our common stock may never be quoted on the OTC Bulletin Board. To be quoted on
the OTCBB a market maker must file an application on our behalf to make a market
for our common stock. As of the date of this Registration Statement, we have not
engaged a market maker to file such an application, and there is no guarantee
that a market marker will file an application on our behalf, and that even if an
application is filed, there is no guarantee that we will be accepted for
quotation. Our stock may become quoted, rather than traded, on the OTCBB.
When/if our shares of common stock commence trading on the OTC Bulletin Board,
the trading price will fluctuate significantly and shareholders may have
difficulty reselling their shares.
As of the date of this Registration Statement, our common stock does not yet
trade on the Over-the-Counter Bulletin Board. Our common stock may never be
quoted on the OTC Bulletin Board. When/if our shares of common stock commence
11
trading on the Bulletin Board, there is a volatility associated with Bulletin
Board securities in general and the value of your investment could decline due
to the impact of any of the following factors upon the market price of our
common stock: (i) disappointing results from our development efforts; (ii)
failure to meet our revenue or profit goals or operating budget; (iii) decline
in demand for our common stock; (iv) downward revisions in securities analysts'
estimates or changes in general market conditions; (v) technological innovations
by competitors or in competing technologies; (vi) lack of funding generated for
operations; (vii) investor perception of our industry or our prospects; and
(viii) general economic trends.
In addition, stock markets have experienced price and volume fluctuations and
the market prices of securities have been highly volatile. These fluctuations
are often unrelated to operating performance and may adversely affect the market
price of our common stock. As a result, investors may be unable to sell their
shares at a fair price and you may lose all or part of your investment.
BECAUSE WE DO NOT HAVE AN ESCROW OR TRUST ACCOUNT FOR YOUR SUBSCRIPTION, IF WE
FILE FOR BANKRUPTCY PROTECTION OR ARE FORCED INTO BANKRUPTCY, OR A CREDITOR
OBTAINS A JUDGMENT AGAINST US AND ATTACHES THE SUBSCRIPTION.
Your funds will not be placed in an escrow or trust account. All subscriptions
in this offering will be available for our immediate use, and will not be
returned regardless of how many shares are sold in this offering. Accordingly,
if we file for bankruptcy protection or a petition for involuntary bankruptcy is
filed by creditors against us, your funds will become part of the bankruptcy
estate and administered according to the bankruptcy laws. If a creditor sues us
and obtains a judgment against us, the creditor could garnish the bank account
and take possession of the subscriptions. As such, it is possible that a
creditor could attach your subscription which could preclude or delay the return
of money to you.
BECAUSE OUR CURRENT PRESIDENT AND EXECUTIVE OFFICER DEVOTE LIMITED AMOUNT OF
TIME TO THE COMPANY, HE MAY NOT BE ABLE OR WILLING TO DEVOTE A SUFFICIENT AMOUNT
OF TIME TO OUR BUSINESS OPERATIONS, CAUSING OUR BUSINESS TO FAIL.
Slav Serghei, our President, currently devotes approximately twenty hours per
week providing management services to us. He owes fiduciary duties to no other
companies. While he presently possesses adequate time to attend to our interest,
it is possible that the demands on his from other obligations could arise, with
the result that he would no longer be able to devote sufficient time to the
management of our business. The loss of Mr. Slav to our company could negatively
impact our business development.
OUR EXECUTIVE OFFICER AND DIRECTOR DOES NOT HAVE ANY PRIOR EXPERIENCE CONDUCTING
A BEST-EFFORT OFFERING, OR MANAGING A PUBLIC COMPANY
Our sole executive officer and director do not have any experience conducting a
best-effort offering or managing a public company. Consequently, we may not be
able to raise any funds or run our public company successfully. If we are not
able to raise sufficient funds, we may not be able to fund our operations as
planned, and our business will suffer and your investment may be materially
adversely affected. Also, our executive's officers' and director's lack of
experience of managing a public company could cause you to lose some or all of
your investment.
THERE IS NO MINIMUM NUMBER OF SHARES THAT HAS TO BE SOLD IN ORDER FOR THE
OFFERING TO PROCEED
We do not have a minimum amount of funding set in order to proceed with the
offering. If not enough money is raised to continue our operations, you might
lose your entire investment because we may not have enough funds to continue our
business plan.
THE TRADING IN OUR SHARES WILL BE REGULATED BY THE SECURITIES AND EXCHANGE
COMMISSION RULE 15G-9 WHICH ESTABLISHED THE DEFINITION OF A "PENNY STOCK."
The shares being offered are defined as a penny stock under the Securities and
Exchange Act of 1934, as amended (the "Exchange Act"), and rules of the
Commission. The Exchange Act and such penny stock rules generally impose
additional sales practice and disclosure requirements on broker-dealers who sell
12
our securities to persons other than certain accredited investors who are,
generally, institutions with assets in excess of $5,000,000 or individuals with
net worth in excess of $6,000,000 or annual income exceeding $200,000 ($300,000
jointly with spouse), or in transactions not recommended by the broker-dealer.
For transactions covered by the penny stock rules, a broker dealer must make
certain mandated disclosures in penny stock transactions, including the actual
sale or purchase price and actual bid and offer quotations, the compensation to
be received by the broker-dealer and certain associated persons, and deliver
certain disclosures required by the Commission. Consequently, the penny stock
rules may make it difficult for you to resell any shares you may purchase, if at
all.
WE ARE SELLING THIS OFFERING WITHOUT AN UNDERWRITER AND MAY BE UNABLE TO SELL
ANY SHARES.
This offering is self-underwritten, that is, we are not going to engage the
services of an underwriter to sell the shares; we intend to sell our shares
through our President, who will receive no commissions. He will offer the shares
to friends, family members, and business associates; however, there is no
guarantee that he will be able to sell any of the shares. Unless he is
successful in selling all of the shares and we receive the proceeds from this
offering, we may have to seek alternative financing to further follow our
business plan. We do not have any plans where to seek this alternative financing
at present time.
WE WILL INCUR ONGOING COSTS AND EXPENSES FOR SEC REPORTING AND COMPLIANCE.
WITHOUT REVENUE WE MAY NOT BE ABLE TO REMAIN IN COMPLIANCE, MAKING IT DIFFICULT
FOR INVESTORS TO SELL THEIR SHARES, IF AT ALL.
Our business plan allows for the payment of the estimated $10,000 ongoing cost
and expenses for SEC reporting and compliances to be paid from existing cash on
hand and director loan. If necessary, Slav Serghei, our Chairman, has verbally
agreed to loan the company funds, up to $25,000, to complete the registration
process and implement operations. On October 17, 2014, he loaned the Company
$5,000 of the $25,000, and on December 14, 2014, he loaned the Company an
additional $3,450. The loan is unsecured, non-interest bearing, non-convertible
and due on demand. We plan to contact a market maker immediately following the
close of the offering and apply to have the shares quoted on the OTC Electronic
Bulletin Board. To be eligible for quotation, issuers must remain current in
their filings with the SEC. The management will be required to provide an annual
report on our internal controls over financial reporting regardless of our
status as an emerging growth company. In order for us to remain in compliance we
will require future revenues to cover the cost of these filings, which could
comprise a substantial portion of our available cash resources. If we are unable
to generate sufficient revenues to remain in compliance it may be difficult for
you to resell any shares you may purchase, if at all.
WE MAY BE EXPOSED TO POTENTIAL RISKS AND SIGNIFICANT EXPENSES RESULTING FROM THE
REQUIREMENTS OF SECTION 404 OF THE SARBANES-OXLEY ACT OF 2002.
When our S-1/A becomes effective, we will be required, pursuant to Section 404
of the Sarbanes-Oxley Act of 2002, to include in our annual report our
assessment of the effectiveness of our internal control over financial
reporting. We expect to incur significant continuing costs, including accounting
fees and staffing costs, in order to maintain compliance with the internal
control requirements of the Sarbanes-Oxley Act of 2002. Development of our
business will necessitate ongoing changes to our internal control systems,
processes and information systems. Currently, we have no employees. We do not
intend to develop or manufacture any products, and consequently have no products
in development, manufacturing facilities or intellectual property rights. As we
develop our business, obtain regulatory approval, hire employees and consultants
and seek to protect our intellectual property rights, our, our current design
for internal control over financial reporting will not be sufficient to enable
management to determine that our internal controls are effective for any period,
or on an ongoing basis. Accordingly, as we develop our business, such
development and growth will necessitate changes to our internal control systems,
processes and information systems, all of which will require additional costs
and expenses.
In the future, if we fail to complete the annual Section 404 evaluation in a
timely manner, we could be subject to regulatory scrutiny and a loss of public
confidence in our internal controls. In addition, any failure to implement
13
required new or improved controls, or difficulties encountered in their
implementation, could harm our operating results or cause us to fail to meet our
reporting obligations.
However, as an "emerging growth company," as defined in the JOBS Act, our
independent registered public accounting firm will not be required to comply
with the auditor attestation requirements of Section 404(b) of the
Sarbanes-Oxley Act but that management will be required to provide an annual
report on our internal control over financial reporting pursuant to Item 308 of
Regulation S-K in the year following our first annual report required to be
filed pursuant to Section 13(a) or 15(d) of the Exchange Act for the prior
fiscal year or the date we are no longer an emerging growth company. At such
time, our independent registered public accounting firm may issue a report that
is adverse in the event it is not satisfied with the level at which our controls
are documented, designed or operating.
WE MAY IN THE FUTURE ISSUE ADDITIONAL SHARES OF COMMON STOCK WHICH WILL DILUTE
SHARE VALUE OF INVESTORS IN THIS OFFERING.
Our Articles of Incorporation authorize the issuance of 75,000,000 shares of
common stock, par value $0.001 per share, of which 3,500,000 shares are issued
and outstanding. The future issuance of common stock may result in substantial
dilution in the percentage of our common stock held by our then existing
shareholders. We may value any common stock issued in the future on an arbitrary
basis. The issuance of common stock for future services or acquisitions or other
corporate actions may have the effect of diluting the value of the shares held
by investors in the offering, and might have an adverse effect on any trading
market for our common stock.
FORWARD LOOKING STATEMENTS
The information contained in this prospectus, including in the documents
incorporated by reference into this prospectus, includes some statements that
are not purely historical or do not relate to present facts or conditions which
may be considered as forward-looking statements." Such forward-looking
statements include, but are not limited to, statements regarding our Company and
management's expectations, hopes, beliefs, intentions or strategies regarding
the future, including our financial condition, results of operations, and the
expected impact of the offering on the parties' individual and combined
financial performance. In addition, any statements that refer to projections,
forecasts or other characterizations of future events or circumstances,
including any underlying assumptions, are forward-looking statements. The words
"anticipates," "believes," "continue," "could," "estimates," "expects,"
"intends," "may," "might," "plans," "possible," "potential," "predicts,"
"projects," "seeks," "should," "will," "would" and similar expressions, or the
negatives of such terms, may identify forward-looking statements, but the
absence of these words does not mean that a statement is not forward-looking.
The forward-looking statements contained in this prospectus are based on current
expectations and beliefs concerning future developments and the potential
effects on the parties and the transaction. There can be no assurance that
future developments actually affecting us will be those anticipated. These
forward-looking statements involve a number of risks, uncertainties (some of
which are beyond the parties' control) or other assumptions that may cause
actual results or performance to be materially different from those expressed or
implied by these forward-looking statements.
14
USE OF PROCEEDS
Our offering is being made on a self-underwritten basis: no minimum number of
shares must be sold in order for the offering to proceed. The offering price per
share is $0.01. The following table sets forth the uses of proceeds assuming the
sale of 25%, 50%, 75% and 100% of shares, respectively, of the securities
offered for sale by the Company. There is no assurance that we will raise the
full $100,000 as anticipated, or any funds at all.
25,000 50,000 75,000 100,000
------ ------ ------ -------
Legal and professional fees
(associated with maintaining
reporting status) $10,000 $10,000 $10,000 $10,000
Permits $ 20 $ 40 $ 80 $ 120
Additional Leases $ 5,400 $10,800 $21,600 $32,400
Developing website/hosting $ 650 $ 3,000 $ 3,000 $ 3,000
Number of Additional Locations 1 2 4 6
Additional Equipment and Stands $ 7,000 $14,000 $28,000 $42,000
Marketing and Advertising $ 1,680 $ 9,660 $ 9,320 $ 8,980
Office $ 0 $ 2,000 $ 2,000 $ 2,000
Supplies 250 500 1,000 1,500
Our current lease is $6,000 for the first year, which will be covered by the
loan promised by the Company's President.
We do not intend to use any of the proceeds from the offering to pay for the
cost of the offering. The cost of the offering shall be loaned to us from Mr.
Slav. On October 17, 2014, he loaned the Company $5,000 of the $25,000, and on
December 14, 2014, he loaned the Company an additional $3,450. The loan is
unsecured, non-interest bearing, non-convertible and due on demand.
The above figures represent only estimated costs. Slav Serghei, our president,
has verbally agreed to lend funds to pay for the registration process in order
to maintain a reporting status with the SEC and to lend us up to $25,000 to
implement the first phase of our business plan and to help maintain a reporting
status with the SEC in the form of a non-secured loan for the next twelve months
and after effectiveness of our registration statement until we complete our
offering as the expenses are incurred if no other proceeds are obtained by the
Company. Mr. Slav has agreed to lend up to $25,000, which is sufficient for us
to implement the first phase of our business plan. On October 17, 2014, he
loaned the Company $5,000 of the $25,000, and on December 14, 2014, he loaned
the Company an additional $3,450. The loan is unsecured, non-interest bearing,
non-convertible and due on demand. However, the verbal agreement is not binding
and that there is no guarantee that we will receive such loan. The amounts
actually spent by us for any specific purpose may vary and will depend on a
number of factors. Non-fixed cost, sales and marketing and general and
administrative costs may vary depending on the business progress, general
business conditions and market reception to our product. Accordingly, our
management has broad discretion to allocate the net proceeds to non-fixed costs.
An example of changes to this spending allocation for non-fixed costs include
management deciding to spend less of the allotment on leases by finding malls
with lower lease rates and spending more on marketing by placing ads in local
newspapers. Such changes to spending may occur due to seasonal variations in
market demand for our products and services relative to when the funds are
received.
15
DETERMINATION OF OFFERING PRICE
The offering price of the shares has been determined arbitrarily by us. It is
not based upon an independent assessment of the value of our shares and should
not be considered as such. The price does not bear any relationship to our
assets, book value, earnings, or other established criteria for valuing a
privately held company. In determining the number of shares to be offered and
the offering price, we took into consideration our cash on hand and the amount
of money we would need to continue with our business plan. Accordingly, the
offering price should not be considered an indication of the actual value of the
securities.
DILUTION
The price of the current offering is fixed at $0.01 per common share. This price
is significantly higher than the price paid by our sole director and officer for
common equity since the Company's inception on April 18, 2014. Mr. Slav, our
sole officer and director, paid $0.001 per share for the 3,500,000 common shares
Assuming completion of the offering, there will be up to 13,500,000 common
shares outstanding. The following table illustrates the per common share
dilution that may be experienced by investors at various funding levels.
Dilution represents the difference between the offering price and the net
tangible book value per share immediately after completion of this offering. Net
tangible book value is the amount that results from subtracting total
liabilities and intangible assets from total assets. Dilution arises mainly as a
result of our arbitrary determination of the offering price of the shares being
offered. Dilution of the value of the shares you purchase is also a result of
the lower book value of the shares held by our existing stockholders. The
following tables compare the differences of your investment in our shares with
the investment of our existing stockholders.
Funding Level $ 25,000 50,000 75,000 100,000
Offering price $ 0.01 0.01 0.01 0.01
Net tangible book value per
common share before offering $ 0.0002 0.0002 0.0002 0.0002
Increase per common share 0.0041
attributable to investors $ 0.0058 0.0067 0.0073
Pro forma net tangible value
per common share after
offering $ 0.0043 0.0060 0.0069 0.0075
Dilution to investors $ 0.0057 0.0040 0.0031 0.0025
Dilution as a percentage
of offering price 57% 40% 31% 25%
The numbers above were derived using the following formulas:
Book value before offering per share: shares at present divided by current stock
holder equity=$0.0002
Book value after offering per share: (amount of funding + stock holder equity)
divided by shares outstanding after offering
Increase per share: share book value after offering minus share book value
before offering
Dilution to investors: offering price minus book value after offering per share
16
Based on 3,500,000 common shares outstanding as of January 31, 2015 and total
stockholder's equity of $658 as of January 31, 2015. Since inception, the
officer, director, promoters and affiliated persons have paid an aggregate
average price of $.001 per common share in comparison to the offering price of
$.01 per common share.
The table below indicates the relative aggregate cash investment and stock
ownership of new investors in this offering:
Investment % Stock Ownership %
---------- ----- --------------- -----
25% Offering of 10,000,000 Shares
Current Stockholders $ 3,500 12.28% 3,500,000 58.33%
New Investors $ 25,000 87.72% 2,500,000 41.67%
Investment % Stock Ownership %
---------- ----- --------------- -----
50% Offering of 10,000,000 Shares
Current Stockholders $ 3,500 6.54% 3,500,000 41.18%
New Investors $ 50,000 93.46% 5,000,000 58.82%
Investment % Stock Ownership %
---------- ----- --------------- -----
75% Offering of 10,000,000 Shares
Current Stockholders $ 3,500 4.46% 3,500,000 31.82%
New Investors $ 75,000 95.54% 7,500,000 68.18%
Investment % Stock Ownership %
---------- ----- --------------- -----
Maximum Offering of 10,000,000 Shares
Current Stockholders $ 3,500 3.38% 3,500,000 25.93%
New Investors $100,000 96.62% 10,000,000 74.07%
MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
This section of the prospectus includes a number of forward-looking statements
that reflect our current views with respect to future events and financial
performance. Forward-looking statements are often identified by words like:
believe, expect, estimate, anticipate, intend, project and similar expressions,
or words which, by their nature, refer to future events. You should not place
undue certainty on these forward-looking statements, which apply only as of the
date of this prospectus. These forward-looking statements are subject to certain
risks and uncertainties that could cause actual results to differ materially
from historical results or our predictions.
We are a development stage corporation with limited operations. We have
generated limited revenues from our business operations. Our financial
statements for the period from April 18, 2014 (date of inception) to January 31,
2015, report a revenue of $1,180 and a net loss of $2,842. We have generated
such limited operational revenues from operating our Bubble Tea stand at special
events. As of the date of this prospectus we had $ 2,120 in cash on hand. Our
current cash balance will not be sufficient to fund our continued operations for
the next 12 months and to qualify our minimum cash requirements necessary to
fund 12 months of operations, if we are unable to successfully raise money in
this offering. We have been utilizing and may utilize funds from Slav Serghei,
our sole officer and director, who has verbally agreed to lend funds to pay for
the registration process and implement a minimum level of our business plan and
to help maintain a reporting status with the SEC in the form of a non-secured
loan for the next twelve months, up to $25,000, if no other proceeds are
obtained by the Company. On October 17, 2014, he loaned the Company $5,000 of
the $25,000, and on December 14, 2014, he loaned the Company an additional
$3,450. The loan is unsecured, non-interest bearing, non-convertible and due on
demand. However, the verbal agreement is not binding and that there is no
guarantee that we will receive such loan.
We are a development stage company with nominal operations and assets. As a
result, we are considered a shell company under Rule 405 of the Securities Act
and are subject to additional regulatory requirements as a result of this
status, including limitations on our shareholders' ability to re-sell their
17
shares in our company pursuant to Rule 144 of the Securities Act, as well as
additional disclosure requirements. Accordingly, investors should consider our
shares to be a high-risk and illiquid investment.
Our auditors have issued a going concern opinion. This means that our auditors
believe there is substantial doubt that we can continue as an on-going business
for the next twelve months unless we obtain additional capital to pay our bills.
This is because we have generated very limited revenues. If we are unable to
obtain additional working capital our business may fail. Accordingly, we must
raise cash from sources other than operations. Our only other source for cash at
this time is investments by shareholder in our company. We must raise cash to
continue our plan of operations.
No proceeds will be used as direct or indirect payments to Mr. Slav or his
affiliates.
We qualify as an "emerging growth company" under the JOBS Act. As a result, we
are permitted to, and intend to rely on exemptions from certain disclosure
requirements. For as long as we are an emerging growth company, we will not be
required to:
* have an auditor report on our internal controls over financial
reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act;
* comply with any requirement that may be adopted by the Public Company
Accounting Oversight Board regarding mandatory audit firm rotation or
a supplement to the auditor's report providing additional information
about the audit and the financial statements (i.e., an auditor
discussion and analysis);
* submit certain executive compensation matters to shareholder advisory
votes, such as "say-on-pay" and "say-on-frequency;" and
* disclose certain executive compensation related items such as the
correlation between executive compensation and performance and
comparisons of the CEO's compensation to median employee compensation
In addition, Section 107 of the JOBS Act also provides that an emerging growth
company can take advantage of the extended transition period provided in Section
7(a)(2)(B) of the Securities Act for complying with new or revised accounting
standards. In other words, an emerging growth company can delay the adoption of
certain accounting standards until those standards would otherwise apply to
private companies. We have elected to take advantage of the benefits of this
extended transition period. Our financial statements may therefore not be
comparable to those of companies that comply with such new or revised accounting
standards.
We will remain an "emerging growth company" for up to five years, or until the
earliest of (i) the last day of the first fiscal year in which our total annual
gross revenues exceed $1 billion, (ii) the date that we become a "large
accelerated filer" as defined in Rule 12b-2 under the Securities Exchange Act of
1934, which would occur if the market value of our ordinary shares that is held
by non-affiliates exceeds $700 million as of the last business day of our most
recently completed second fiscal quarter or (iii) the date on which we have
issued more than $1 billion in non-convertible debt during the preceding three
year period. Even if we no longer qualify for the exemptions for an emerging
growth company, we may still be, in certain circumstances, subject to scaled
disclosure requirements as a smaller reporting company. For example, smaller
reporting companies, like emerging growth companies, are not required to provide
a compensation discussion and analysis under Item 402(b) of Regulation S-K or
auditor attestation of internal controls over financial reporting.
You should read the following discussion and analysis of our financial condition
and results of operations together with our consolidated financial statements
and the related notes and other financial information included elsewhere in this
prospectus. Some of the information contained in this discussion and analysis or
set forth elsewhere in this prospectus, including information with respect to
18
our plans and strategy for our business and related financing, includes
forward-looking statements that involve risks and uncertainties. You should
review the "Risk Factors" section of this prospectus for a discussion of
important factors that could cause actual results to differ materially from the
results described in or implied by the forward-looking statements contained in
the following discussion and analysis.
12 MONTH PLAN OF OPERATION
Our sales and marketing strategy is to move as quickly as possible into the
Romanian market with Tapioca Bubble Tea stands and place them in major cities
and in as many locations as possible. The major cities we are planning to
operate are Bucharest, Ia?i and Cluj. The locations that we think will be most
suitable for our product are shopping malls, schools, colleges, universities,
streets, flea markets, expo shows, ferries, sport games and concerts. Our plan
is to set up small mobile Tapioca Bubble Tea stands. This will allow easy access
to selected locations. All the necessary supplies will be purchased locally in
Romania, and only Tapioca Bubble Tea stands will be brought from China.
Our sources of cash will be mainly the proceeds from public offering, and loan
from our director. Additionally, we have generated limited operational revenues
from operating our Bubble Tea stand at special events. It was purchased from the
loan provided by the Company's President. We expect to start generating
additional revenue by selling our products by the 8th month of our Plan of
Operations. But there is no guarantee that we will receive loan from our
director or raise funds from public offering. On October 17, 2014, he loaned the
Company $5,000 of the $25,000, and on December 14, 2014, he loaned the Company
an additional $3,450. The loan is unsecured, non-interest bearing,
non-convertible and due on demand.
We will not be conducting any product research or development. We plan to grow
our business as soon as funds become available. Our 12 month plan of operations
is as follows:
IF $25,000 RAISED
Completion of office set-up
Time frame: 1st month.
Our principal executive office is located at Lasi, Vasile Lupu nr. 83, bl. D1,
sc. B, Suite 37, Romania. Our phone number is + (0373) 78 12 42. At this stage
of our operations our office is provided by our President and director at no
charge, at his own location, so no budget required.
Obtaining Permits
Time frame: 2-3rd months
Permit cost $ 20
Number of additional locations 1
Total Additional Permits Cost $ 20
If we raise minimum amount of funds ($25,000) we will buy and equip only one
additional Tapioca Bubble Tea stand and will obtain only one additional permit.
The permit would allow us to set up our stand anywhere in the city where vending
business is permitted. Although we already purchased and placed one stand in
Magurele, Bucharest -Ilfov, Muntenia, Romania, on March 1, 2015, our first
location is not operational yet. We are in the process of renovating it for our
needs and still waiting for delivery of our permit.
19
Website development/hosting
Time frame: 3-4th months
Annual website domain hosting $ 50.00
Website design $600.00
Total website development/hosting Cost $650.00
We will hire website developer to develop our website and register internet
domain. (Source: Consultation with website developer)
Purchasing Tapioca Bubble Tea Stand with equipment
Time frame: 5-6th month
Landed cost per Tapioca Bubble Tea Stand and equipment $7,000
Multiplied by : Number of additional locations 1
Total Additional Stand and Equipment Cost $7,000
Model: Tapioca Bubble Tea Stand MYSHINE MS3828.
If we raise $25,000 we will buy and equip one additional Tapioca Bubble Tea
stand, as we already have one Tapioca Bubble stand purchased and placed in
Magurele, Bucharest -Ilfov, Muntenia, Romania, on March 1, 2015. Although, our
first location is not operational yet. We are in the process of renovating it
for our needs and still waiting for delivery of our permit.
Finding local suppliers
Time frame: 6-7th months
Supplies estimated cost is $250.
Our supplies, such as teas, milk, tapioca balls, flavoring, cleaning kits and
packaging will be purchased from local suppliers, or suppliers located within
the European Union. We plan to keep minimal inventory on hands.
Hiring/Training sales personnel
Time frame: 7th months
Two sales people will be hired and trained. Salary remuneration will be
commission based, which is 15 percent of gross sales. Hiring and training will
be done by the Director.
Finding locations and placing Tapioca Bubble Tea stands
Time frame: 8-10th months
Estimate Annual Lease Cost per additional location $5,400
Multiplied by: Number of additional locations 1
Total Estimate Additional Lease costs $5,400
We already have one Tapioca Bubble stand purchased and placed in Magurele,
Bucharest -Ilfov, Muntenia, Romania, on March 1, 2015. Although, our first
location is not operational yet. We are in the process of renovating it for our
needs and still waiting for delivery of our permit. We will pay the $6,000 for
the first year for the lease on this property, from the loan promised by the
Company's President
20
Marketing and advertising
Time frame- 10-12th months
We will engage in the following promotional activities:
Stand Media Frequency Year 1 Budget
----- ----- --------- -------------
Print Flyers distributed in store 1,000 per month $ 800
Free Samples Free Samples Constant $ 240
Mall Advertising Commercials Malls advertising stands/
/Posters stations Constant $ 640
Word of Mouth Word of Mouth Constant Free
Total Marketing and Advertising
Costs $1,680
The stand operators will promote our teas by giving out free samples and
coupons. Our company will be placing ads in the mall advertising magazines, and
internal mall commercials.
Total Cost of all operations: $15,000
To advance our operations ($15,000) and pay ongoing legal fee associated with
public offering ($10,000) we require a minimum of $25,000 as described in our
Plan of Operations. Any funds raised beyond this amount will be spent on
purchasing additional Tapioca Bubble Tea stands and equipment.
IF $50,000 RAISED
Setting up an office
Time frame: 1st month.
Office furniture $ 800.00
Equipment (computer) $1,000.00
Supplies $ 200.00
Total Office Cost $2,000.00
Our principal executive office is located at Lasi, Vasile Lupu nr. 83, bl. D1,
sc. B, Suite 37, Romania. Our phone number is + (0373) 78 12 42. At this stage
of our operations, our office is provided by our President and director at no
charge, at his own location, so no budget required. Office furniture (chairs,
lamp and table), equipment (computer, printer, fax) and supplies (miscellaneous
office supplies) will be purchased locally.
Obtaining Permits
Time frame: 2-3rd months
Permit cost $ 20
Number of additional locations 2
Total Additional Permits Cost $ 40
If we raise $50,000, we will buy and equip two additional Tapioca Bubble Tea
stands and will obtain two permits. The permits would allow us to set up our
stands anywhere in the city where vending business is permitted. Although we
already bought and place one stand in Magurele, Bucharest -Ilfov, Muntenia,
Romania, on March 1, 2015, our first location is not operational yet. We are in
the process of renovating it for our needs and still waiting for delivery of our
permit.
21
Website development/hosting
Time frame: 3-4th months
Annual website domain hosting $ 50.00
Website design $ 2,950
Total Website development/hosting Cost $ 3,000
We will hire website developer to develop our website and register internet
domain. Website development will be done on the latest platforms for better
design.
(Source: Consultation with website developer)
Purchasing Tapioca Bubble Tea stands
Time frame: 5-6th month
Landed cost per Tapioca Bubble Tea Stand and equipment $ 7,000
Multiplied by : Number of additional locations 2
Total Additional Stand and Equipment Cost $14,000
Model: Tapioca Bubble Tea Stand MYSHINE MS3828.
If we raise $50,000 we will buy and equip two additional Tapioca Bubble Tea
stands, as we already have one Tapioca Bubble stand placed in Magurele,
Bucharest -Ilfov, Muntenia, Romania, on March 1, 2015. Although, our first
location is not operational yet. We are in the process of renovating it for our
needs and still waiting for delivery of our permit. .
Finding local suppliers
Time frame: 6-7th months
Estimated Costs (Other Expenses) is $500.
Our supplies, such as teas, milk, tapioca balls, flavoring, cleaning kits and
packaging will be purchased from the local suppliers. We plan to keep minimal
inventory on hands.
Hiring/Training sales personnel
Time frame: 7th months
Two sales people will be hired and trained. Their salary remuneration will be
commission based, which is 15 percent of gross sales.
Finding locations and placing Tapioca Bubble Tea stands
Time frame: 8-10th months
Estimate Annual Lease Cost per additional location $ 5,400
Multiplied by: Number of additional locations 2
Total Estimate Additional Lease costs $10,800
We already have one Tapioca Bubble stand purchased and placed in Magurele,
Bucharest -Ilfov, Muntenia, Romania, on March 1, 2015. Although, our first
location is not operational yet. We are in the process of renovating it for our
needs and still waiting for delivery of our permit. We will pay the $6,000 for
the first year for the lease on this property from the loan promised by the
Company's President.
22
Two Tapioca Bubble Tea stands will be placed in two different locations in
Bucharest.
Marketing and advertising
Time frame: 10-12th months
We will engage in the following promotional activities:
Stand Media Frequency Year 1 Budget
----- ----- --------- -------------
Print Coupons distributed in store 2,000 per month $1,660
Print Mailbox Mailer coupons 5,000 per month $4,500
Free Samples Free Samples Constant $1,000
Mall Advertising Commercials
/Posters Malls advertising stands/
stations Constant $2,500
Word of Mouth Word of Mouth Constant Free
Sub Total Marketing and Advertising
Costs $9,660
We will be hiring marketing company that does mailbox mailer. Mailbox mailer is
simply going around the area close to where our stands are and placing coupons
in the mail box. The stand operators will promote our teas by giving out free
samples and coupons. Our company will be placing ads in the mall advertising
magazines, and internal mall commercials.
Total Cost of all operations: $40,000
To advance our operations ($40,000) and pay ongoing legal fee associated with
public offering ($10,000) we require a minimum of $50,000 as described in our
Plan of Operations. Any funds raised beyond this amount will be spent on
purchasing additional Tapioca Bubble Tea stands.
IF $75,000 RAISED
Setting up an office
Time frame: 1st month.
Office furniture $ 800.00
Equipment (computer) $1,000.00
Supplies $ 200.00
Total Office Cost $2,000.00
Our principal executive office is located at Lasi, Vasile Lupu nr. 83, bl. D1,
sc. B, Suite 37, Romania. Our phone number is + (0373) 78 12 42 At this stage of
our operations, our office is provided by our President and director at no
charge, at his own location, so no budget required. Office furniture (chairs,
lamp and table), equipment (computer, printer, fax) and supplies (miscellaneous
office supplies) will be purchased locally.
Obtaining Permits
Time frame: 2-3rd months
Permit cost $ 20
Number of additional locations 4
Total Additional Permits Cost $ 80
23
If we raise $75,000, we will buy and equip four Tapioca Bubble Tea stands and
will obtain four permits. The permits would allow us to set up our stands
anywhere in the city where vending business is permitted. Although we already
bought and place one stand in Magurele, Bucharest -Ilfov, Muntenia, Romania, on
March 1, 2015, our first location is not operational yet. We are in the process
of renovating it for our needs and still waiting for delivery of our permit.
Website development/hosting
Time frame: 3-4th months
Annual website domain hosting $ 50.00
Website design $ 2,950
Total Website development/hosting Cost $ 3,000
We will hire website developer to develop our website and register internet
domain. Website development will be done on the latest platforms for better
design.
(Source: Consultation with website developer)
Purchasing Tapioca Bubble Tea stands
Time frame: 5-6th month
Landed cost per Tapioca Bubble Tea Stand and equipment $ 7,000
Multiplied by : Number of additional locations 4
Total Additional Stand and Equipment Cost $28,000
Model: Tapioca Bubble Tea Stand MYSHINE MS3828.
If we raise $75,000 we will buy and equip four additional Tapioca Bubble Tea
stands, as we already have one Tapioca Bubble stand purchased and placed into
service in Magurele, Bucharest -Ilfov, Muntenia, Romania, on March 1, 2015.
Although, our first location is not operational yet. We are in the process of
renovating it for our needs and still waiting for delivery of our permit.
Finding local suppliers
Time frame: 6-7th months
Estimated Costs (Other Expenses) is $1,000.
Our supplies, such as teas, milk, tapioca balls, flavoring, cleaning kits and
packaging will be purchased from local suppliers, or suppliers located within
the European Union. We plan to keep minimal inventory on hands.
Hiring/Training sales personnel
Time frame: 7th months
Four sales people will be hired and trained. Their salary remuneration will be
commission based, which is 15 percent of gross sales. Manager will be hired to
train and supervise the work of four people. Manager salary remuneration will be
commission based, which is 5% of gross sales.
24
Finding locations and placing Tapioca Bubble Tea stands
Time frame: 8-10th months
Estimate Annual Lease Cost per additional location $ 5,400
Multiplied by: Number of additional locations 4
Total Estimate Additional Lease costs $21,600
We already have one Tapioca Bubble stand purchased and placed in Magurele,
Bucharest -Ilfov, Muntenia, Romania, on March 1, 2015. Although, our first
location is not operational yet. We are in the process of renovating it for our
needs and still waiting for delivery of our permit. We pay the $6,000 for the
first year for the lease on this property from the loan promised by the
Company's President
Four Tapioca Bubble Tea stands will be placed in four different malls in
Bucharest.
Marketing and advertising
Time frame: 10-12th months
We will engage in the following promotional activities:
Stand Media Frequency Year 1 Budget
----- ----- --------- -------------
Print Mailbox Mailer coupons 5,000 per month $4,500
Free Samples Free Samples Constant $1,500
Mall Advertising Commercials Malls advertising stands/
/Posters stations Constant $3,320
Word of Mouth Word of Mouth Constant Free
Sub Total Marketing and Advertising
Costs $9,320
We will be hiring marketing company that does mailbox mailer. Mailbox mailer is
simply going around the area close to where our stands are and placing coupons
in the mail box. The stand operators will promote our teas by giving out free
samples and coupons. Our company will be placing ads in the mall advertising
magazines, and internal mall commercials.
Total Cost of all operations: $65,000
To advance our operations ($65,000) and pay ongoing legal fee associated with
public offering ($10,000) we require a minimum of $75,000 as described in our
Plan of Operations. Any funds raised beyond this amount will be spent on
purchasing additional Tapioca Bubble Tea stands.
IF $100,000 RAISED
Setting up an office
Time frame: 1st month.
Office furniture $ 800.00
Equipment (computer) $1,000.00
Supplies $ 200.00
Total Office Cost $2,000.00
25
Our principal executive office is located at Lasi, Vasile Lupu nr. 83, bl. D1,
sc. B, Suite 37, Romania. Our phone number is + (0373) 78 12 42. At this stage
of our operations, our office is provided by our President and director at no
charge, at his own location, so no budget required. Office furniture (chairs,
lamp and table), equipment (computer, printer, fax) and supplies (miscellaneous
office supplies) will be purchased locally.
Obtaining Permits
Time frame: 2-3rd months
Permit cost $ 20
Multiplied by: Number of additional Tapioca Bubble Tea stands 6
Total Additional Permits Cost $ 120
If we raise $100,000, we will buy and equip six additional Tapioca Bubble Tea
stands and will obtain six permits. The permits would allow us to set up our
stands anywhere in the city where vending business is permitted. Although we
already bought and place one stand in Magurele, Bucharest -Ilfov, Muntenia,
Romania, on March 1, 2015, our first location is not operational yet. We are in
the process of renovating it for our needs and still waiting for delivery of our
permit.
Website development/hosting
Time frame: 3-4th months
Annual website domain hosting $ 50.00
Website design $ 2,950
Total Website development/hosting Cost $ 3,000
We will hire website developer to develop our website and register internet
domain. Website development will be done on the latest platforms for better
design.
(Source: Consultation with website developer)
Purchasing Tapioca Bubble Tea stands
Time frame: 5-6th month
Landed cost per Tapioca Bubble Tea Stand and equipment $ 7,000
Multiplied by: Number of additional locations 6
Total Additional Stand and Equipment Cost $42,000
Model: Tapioca Bubble Tea Stand MYSHINE MS3828.
If we raise $100,000 we will buy and equip six additional Tapioca Bubble Tea
stands, as we already have one Tapioca Bubble stand purchased and placed into
service in Magurele, Bucharest -Ilfov, Muntenia, Romania, on March 1, 2015.
Although, our first location is not operational yet. We are in the process of
renovating it for our needs and still waiting for delivery of our permit. We pay
the $6,000 for the first year for the lease on this property from the loan
promised by the Company's President.
Finding local suppliers
Time frame: 6-7th months
Estimated Costs (Other Expenses) is $1,500.
Our supplies, such as teas, milk, tapioca balls, flavoring, cleaning kits and
packaging will be purchased from local suppliers, or suppliers located within
the European Union. We plan to keep minimal inventory on hands.
26
Hiring/Training sales personnel
Time frame: 7th months
Six sales people will be hired and trained. Their salary remuneration will be
commission based, which is 15% of gross sales. Manager will be hired to train
and supervise the work of six people. Manager salary remuneration will be
commission based, which is 5% of gross sales.
Finding locations and placing Tapioca Bubble Tea stands
Time frame- 8-10th months
Estimate Annual Lease Cost per additional location $ 5,400
Multiplied by: Number of additional locations 6
Estimate Total Additional Lease costs $32,400
We already have one Tapioca Bubble stand purchased and placed in Magurele,
Bucharest -Ilfov, Muntenia, Romania, on March 1, 2015. Although, our first
location is not operational yet. We are in the process of renovating it for our
needs and still waiting for delivery of our permit.
Six Tapioca Bubble Tea stands will be placed in six different locations in
Bucharest.
Marketing and advertising
Time frame- 10-12th months
We will engage in the following promotional activities:
Stand Media Frequency Year 1 Budget
----- ----- --------- -------------
Print Mailbox Mailer coupons 5,000 per month $4,580
Free Samples Free Samples Constant $ 980
Mall Advertising Commercials Malls advertising stands/
/Posters stations Constant $3,500
Word of Mouth Word of Mouth Constant Free
Sub Total Marketing and Advertising $8,980
Costs
We will be hiring marketing company that does mailbox mailer. Mailbox mailer is
simply going around the area close to where our stands are and placing coupons
in the mail box. The stand operators will promote our teas by giving out free
samples and coupons. Our company will be placing ads in the mall advertising
magazines, and internal mall commercials.
Total cost of all operations: $90,000
To advance our operations ($90,000) and pay ongoing legal fee associated with
public offering ($10,000) we require a minimum of $100,000 as described in our
Plan of Operations. Any funds raised beyond this amount will be spent on
purchasing additional Tapioca Bubble Tea stands.
27
We plan to further implement our business plan as soon as funds from public
offering become available. The following table sets forth our 12-month budgeted
costs assuming the sale of 25, 50, 75, and 100% of shares, respectively. There
is no assurance that we will raise the full $100,000 as anticipated, or any
funds at all.
25,000 50,000 75,000 100,000
------ ------ ------ -------
Legal and professional fees
(associated with maintaining
reporting status) $10,000 $10,000 $10,000 $10,000
Permits $ 20 $ 40 $ 80 $ 120
Additional Leases $ 5,400 $10,800 $21,600 $32,400
Developing website/hosting $ 650 $ 3,000 $ 3,000 $ 3,000
Number of Additional Locations 1 2 4 6
Additional Equipment and Stands $ 7,000 $14,000 $28,000 $42,000
Marketing and Advertising $ 1,680 $ 9,660 $ 9,320 $ 8,980
Office $ 0 $ 2,000 $ 2,000 $ 2,000
Supplies 250 500 1,000 1,500
Our current lease is $6,000 for the first year, which will be covered by the
loan promised by the Company's President.
COMPLETE OUR PUBLIC OFFERING
We expect to complete our public offering within one year after the
effectiveness of our registration statement by the Securities and Exchange
Commissions. We intend to concentrate our efforts on raising capital during this
period. Our operations are limited due to the limited amount of funds on hand.
OFF-BALANCE SHEET ARRANGEMENTS
We have no off-balance sheet arrangements that have or are reasonably likely to
have a current or future effect on our financial condition, changes in financial
condition, revenues or expenses, results of operations, liquidity, capital
expenditures or capital resources.
LIMITED OPERATING HISTORY
There is no historical financial information about us upon which to base an
evaluation of our performance. We are in early stage operations and have
generated limited revenues. We cannot guarantee we will be successful in our
continuing business operations. Our business is subject to risks inherent in the
establishment of a new business enterprise, including limited capital resources
and possible cost overruns due to price and cost increases in services and
products.
RESULTS OF OPERATIONS
FROM INCEPTION ON APRIL 18, 2014 TO OCTOBER 31, 2014
During the period we (i) incorporated the company, (ii) prepared a business plan
of purchasing and placing Bubble Tea stands throughout Romania in major cities
such as Bucharest, Ia?i and Cluj, (iii) purchased one Bubble Tea machine and
stand, which was purchased from the loan provided by the Company's President,
(iv) signed lease agreement, at a cost of $6,000 for the first year, to place
the Bubble Tea machine 10 (ten) square meters located on the first floor of the
building at Magurele, Bucharest-Ilfov, Muntenia, Romania by March 1, 2015.
We have accrued net losses of $75 for the period from our inception on April 18,
2014 to October 31, 2014, and have limited revenues to date. Our future is
dependent upon our ability to obtain financing from this offering. We have
generated limited revenue since inception due to the fact that we are a
development stage company and have not yet placed our Bubble Tea machine. Our
28
only revenue is from operating our Bubble Tea stand at special events, which was
purchased from the loan provided by the Company's President.
Since inception, we have sold 3,500,000 shares of common stock to our sole
officer and director for net proceeds of $3,500.
LIQUIDITY AND CAPITAL RESOURCES
As of January 31, 2015, we had cash in the amount of $2,120 and liabilities of
$8,450. As of the date of this prospectus, we have $2,120 in cash and $8,450 in
liabilities. We currently have limited operations and we have limited income. In
fact, we are realizing a negative cash flows from operating activities per month
equal to approximately $283. The cash we have on hand can sustain the company's
current operations for 7 months.
Since inception, we have sold 3,500,000 shares of common stock in one offer and
sale, which was to our sole officer and director, at a price of $0.001 per
share, for aggregate proceeds of $3,500.
To meet our need for cash we are attempting to raise money from this offering.
We cannot guarantee that we will be able to sell all or any of the shares
required. If we are successful, any money raised will be applied to the items
set forth in the Use of Proceeds section of this prospectus. We will attempt to
raise the necessary funds to proceed with all phases of our plan of operation.
The sources of funding we may consider to fund this work include a public
offering, a private placement of our securities or loan from our director or
others.
We are highly dependent upon the success of the public offerings of equity or
debt securities, as described herein. Therefore, the failure thereof would
result in the need to seek capital from other resources such as taking loan,
which would likely not even be possible for the Company. However, if such
financing were available, because we are a development stage company with
limited operations to date, we would likely have to pay additional costs
associated with high risk loan and be subject to an above market interest rate.
At such time these funds are required, management would evaluate the terms of
such debt financing. If the Company cannot raise additional proceeds via a
private placement of its equity or debt securities, or secure a loan, the
Company would be required to cease business operations. As a result, investors
would lose all of their investment.
Our auditors have issued a "going concern" opinion, meaning that there is
substantial doubt if we can continue as an on-going business for the next twelve
months unless we obtain additional capital. No substantial revenues are
anticipated until we have completed the financing from this offering. Our only
source for cash at this time is investments by others in this offering. We must
raise cash to implement our strategy and stay in business. The amount of the
offering will likely allow us to operate for at least one year and have the
capital resources required to cover the material costs with becoming a publicly
reporting. The company anticipates over the next 12 months the cost of being a
reporting public company, including legal and professional fee, will be
approximately $10,000.
As of the date of this registration statement, the current funds available to
the Company will not be sufficient to continue maintaining a reporting status.
The company's sole officer and director, Slav Serghei, has verbally agreed to
lend funds to pay for the registration process and lend us funds in the amount
of up to $25,000 to further implement our business plan and to help maintain a
reporting status with the SEC in the form of a non-secured loan for the next
twelve months and after effectiveness of our registration statement until we
complete our offering as the expenses are incurred if no other proceeds are
obtained by the Company. On October 17, 2014, he loaned the Company $5,000 of
the $25,000, and on December 14, 2014, he loaned the Company an additional
$3,450. The loan is unsecured, non-interest bearing, non-convertible and due on
demand. However, the verbal agreement is not binding and that there is no
guarantee that we will receive such loan. Management believes if the company
cannot maintain its reporting status with the SEC it will have to cease all
efforts directed towards the company. As such, any investment previously made
would be lost in its entirety.
29
We need a minimum of $25,000 to continue our proposed operations and pay all
expenses associated with maintaining a reporting status with the SEC.
SIGNIFICANT ACCOUNTING POLICIES
Our financial statements have been prepared in accordance with generally
accepted accounting principles in the United States. Because a precise
determination of many assets and liabilities is dependent upon future events,
the preparation of financial statements for a period necessarily involves the
use of estimates which have been made using careful judgment. The financial
statements have, in our opinion, been properly prepared within reasonable limits
of materiality and within the framework of the significant accounting policies
summarized below:
BASIS OF PRESENTATION
The Company reports revenues and expenses use the accrual method of accounting
for financial and tax reporting purposes. The accounting and reporting policies
of the Company conform to U.S. generally accepted accounting principles (US
GAAP) applicable to development stage companies
USE OF ESTIMATES
Management uses estimates and assumption in preparing these financial statements
in accordance with generally accepted accounting principles. Those estimates and
assumptions affect the reported amounts of assets and liabilities, the
disclosure of contingent assets and liabilities, and the reported revenues and
expenses.
DEPRECIATION, AMORTIZATION AND CAPITALIZATION
The Company records depreciation and amortization when appropriate using both
straight-line and declining balance methods. Assets depreciated and amortized
over their estimated useful life. Expenditures for maintenance and repairs are
charged to expense as incurred. Additions, major renewals and replacements that
increase the property's useful life are capitalized. Property sold or retired,
together with the related accumulated depreciation is removed from the
appropriated accounts and the resultant gain or loss is included in net income.
INCOME TAXES
The Company accounts for income taxes under ASC 740 "INCOME TAXES" which
codified SFAS 109, "ACCOUNTING FOR INCOME TAXES" and FIN 48 "ACCOUNTING FOR
UNCERTAINTY IN INCOME TAXES - AN INTERPRETATION OF FASB STATEMENT NO. 109."Under
the asset and liability method of ASC 740, deferred tax assets and liabilities
are recognized for the future tax consequences attributable to differences
between the financial statements carrying amounts of existing assets and
liabilities and their respective tax bases. Deferred tax assets and liabilities
are measured using enacted tax rates expected to apply to taxable income in the
years in which those temporary differences are expected to be recovered or
settled. Under ASC 740, the effect on deferred tax assets and liabilities of a
change in tax rates is recognized in income in the period the enactment occurs.
A valuation allowance is provided for certain deferred tax assets if it is more
likely than not that the Company will not realize tax assets through future
operations.
FAIR VALUE OF FINANCIAL INSTRUMENTS
Financial Accounting Standards statements No. 107, "Disclosures About Fair Value
of Financial Instruments", requires the Company to disclose, when reasonably
attainable, the fair market values of its assets and liabilities which are
deemed to be financial instruments. The Company's financial instruments consist
primarily of cash.
PER SHARE INFORMATION
The Company computes per share information by dividing the net loss for the
period presented by the weighted average number of shares outstanding during
such period.
30
DESCRIPTION OF BUSINESS
1. GENERAL
COMPANY
We were incorporated in the State of Nevada on April 18, 2014
We are in the business of selling Bubble Tea from mobile stands in Romania. Our
model is kiosk-based operations that rely heavily on pass-by traffic. Because of
it, we are looking for locations with existing traffic, such as shopping malls,
street corners, flea markets, schools, colleges, universities, transportation
hubs, such as bus, ferries, or train stations. At the same time, mobility of our
kiosks allows us to place them temporarily in expo shows, sport games and
concerts. The strategic role of Tapioca Corp. is centered around three
objectives:
* To stay at the forefront as the market leader in innovative product
introductions and successful product launches;
* To strengthen and satisfy the needs of the more adventurous Generation
Y consumers with a new eye-catching and FUNctional product;
* To become the market leader in the functional drinks segment with
increased market shares.
We have begun by purchasing one Bubble Tea machine and stand placed in Magurele,
Bucharest-Ilfov, Muntenia, Romania on March 1, 2015. Our next planned phase is
to place our equipment in the malls in Bucharest and the Metropolitan area. We
plan to spread our operation throughout Romania's major cities: Bucharest, Ia?i
and Cluj. We have not decided on the future size or cost of our expansion at
this time. We will be following our business plan from one city to another. The
expansion will be funded from our future revenues and additional sale of our
shares. The time frame of the expansion will depend solely on the availability
of funding from the revenue.
The business steps are as follows:
a) Purchase additional equipment and Mall Customized Bubble Tea stands
from China
b) Buy necessary supplies locally or within the European Union.
c) Place stands
2. PRODUCT
Our product will be Tapioca Bubble Tea. Bubble tea is a mixture of iced or hot
sweetened tea, milk, and often other flavors. The distinctive characteristics of
Bubble Tea are the black gummy balls made of tapioca, or, more commonly in East
Asia, yam starch-, called "pearls" or "boba" or balls that sit at the bottom of
the cup. The pearls are larger than those found in tapioca pudding, with a
diameter of at least 6 millimeters, but smaller ones are occasionally used. They
are generally translucent brown with a darker brown center, although pearls of
other colors or `Jelly cubes' have also recently become available. The original
Bubble Tea consisted of a hot Taiwanese black tea, tapioca pearls, condensed
milk, and honey. As this drink became more popular, variations were created.
Initially iced versions with a hint of peach or plum flavors began to appear,
and then more fruit flavors were added. They usually contain colored pearls that
are chosen to match whatever fruit juice is used, in addition to brightly
colored oversize straws for sucking up the pearls.
Bubble tea is generally split into two types: fruit-flavored teas, and milk
teas. Milk teas may use dairy or non-dairy creamers. The mixtures that make up
Bubble Tea vary. Several examples of flavors are strawberry, passion fruit,
mango, chocolate, and coconut, and may be added in the form of powder, fruit
juice, pulp, or syrup to hot black or green tea, which is shaken in a cocktail
shaker or mixed in a blender with ice until chilled. The mixture is usually
combined with milk and cooked tapioca pearls.
31
These tapioca pearls are made mostly of tapioca starch, which comes from the
tapioca, or bitter-cassava plant. In other parts of the world, the
bitter-cassava plant may be called manioca or yucca. Cassava is native to South
America, and was introduced to Asia in the 1800s. The balls are prepared by
boiling for 25 minutes, until they are cooked thoroughly but have not lost
pliancy, and then cooled for 25 minutes. After cooking they last about 7 hours.
The pearls have little taste, and are usually soaked in sugar or honey
solutions.
3. TARGET MARKET
Customers are likely to be:
Younger and older people may consider Bubble Tea a novelty and luxury
alternative to the lunchtime or after-work coffee.
Although it contains sugar, Bubble Tea is a much healthier alternative to
carbonated fizzy drinks and may therefore appeal to health conscious consumers.
It is popular for people to hold meetings such as craft circles and book groups
in local cafes and coffee shops and a Bubble Tea cafe could appeal as an unusual
alternative.
Due to its fairly new status, Bubble Tea has a certain novelty value that might
appeal to people looking to try different tastes and flavors.
Office workers looking for a quick snack and drink or a relaxing meeting place.
4. MARKETS
The Romania Tapioca Bubble Tea is still a virgin market with very few existing
competitors.The dominant target market for Capital Bubble Tea Cafe is a regular
stream of local residents. Personal and expedient customer service at a
competitive price is a key for maintaining the local market share of this target
market. Our stands would be ideal anywhere with high foot traffic, such as
shopping malls, college or university campuses, bus or trains stations and
airports. And at the same time, mobility of our stands will allow as to be able
to operate on trade shows, conferences and festivals.
5. MARKETING
Initially we plan to place our stands in the shopping malls. Our company ads and
commercials will be placed in malls advertising magazines, and internal
commercials. We expect the facilities and signage to be a substantial portion of
our advertising. Word of mouth has always proven to be the greatest advertising
program a company can instill. In addition, we will be hiring marketing company
that does mailbox mailer. Mailbox mailer is simply going around the area close
to where our stands are and placing coupons in the mail box.
There will be several sales strategies put into place, including posting
specials on high, profit items at the window. The staff will also hand out free
drink coupons to those who have purchased a certain number of cups.
We plan to host tasting events for customers on a quarterly basis. Each quarter,
at the introduction of each season, Capital Bubble Tea Cafe will be adjusting
its menu to reflect the changes in the flavors served. Drink Coupons, This
encourages the person to come in for their free beverage and bring a friend.
Chamber of Commerce and Professional Memberships, Because of the need to sell
our services, we will be an active participant in the Regional Chamber, local
Chambers of Commerce, food service Associations, and Specialty Beverage
Associations. The exposure and education that these organizations provide is
outstanding, but equally important are the contacts and opportunities made
available.
32
STRATEGY AND IMPLEMENTATION
Bubble tea cafes shops are heavily reliant on impulse buying and passing trade.
Therefore they will benefit from a strong image that is attractive to clearly
identifiable types of customer. Issues to consider when developing a Bubble Tea
cafes client base include:
Visibility - location will be vital. However, high street sites may be difficult
to obtain due to high rent and intense competition, particularly from major
chains.
Ease of access - other locations to consider includes those close to transport,
e.g. near railway and bus stations.
Advertising in a variety of local publications will increase knowledge of our
locations and a favorable review in the local media will increase interest.
Promotional offers - most Bubble Tea cafes attract younger customers, therefore
promoting the business to older age groups may be worthwhile.
Word of mouth recommendation will also be important therefore it is important
that we offer good customer service. We will be offering high quality Bubble
Tea, with personal service at a competitive price. Our competitive edge is the
relatively low level of competition in the local area in this particular niche.
6. EQUIPMENT
EQUIPMENT DESCRIPTION:
MALL CUSTOMIZED BUBBLE TEA STAND MYSHINE MS3828
DIMENSIONS: 2.0m L x 0.8m W x 2.00m H
Operational space: 1.6 square meters
Weight: 250kg
Cost US $ 2,800
SK-300 BUBBLE TEA SHAKING MACHINE
Voltage: AC220/110V 50/60HZ,
Weight: 20kg
Dimension: 32cm W x25cm L x33cm H
Cost US $ 785.00
WCS-F07 AUTOMATIC CUP SEALING MACHINE
Voltage: AC220/110V 50/60HZ,
Weight: 31kg
Dimension: 29cm W x35cm L x52cm H
Cost $ 365.00
SINGLE DOOR GLASS DISPLAY CABINET BEVERAGE REFRIGERATOR
Voltage: AC220/110V 50/60HZ,
Weight: 70kg
Cost US $ 550
QUICK DETAIL
All devices in the stand will operate on a 10 amp circuit, it is ideal to use in
any environment because it doesn't require a dedicated circuit. This allows it
to be used in multiple locations and still produce 240 servings per hour. This
full-feature Tapioca Bubble Tea stand set uses an exterior laminate and glossy
stainless steel cover on the plywood. Countertop is made of stone covered
plywood.
33
Estimated landed cost is $7000
Product description: Tapioca Bubble Tea production
equipment and mobile stand
Importing from: China
Importing to: Romania
Total Product value: USD 4500.00
Country of manufacture: China
The cost of shipping and insurance of
importing Shipping costs: USD 1400.00
Insurance costs: USD 245.00
- VAT: USD 855.00
Total import duty. taxes due: USD 855.00
Total landed cost: USD 7,000.00
7. SUPPLIES
At the initial stage all our supplies, such as milk, tapioca pearls, salt,
flavoring, cleaning kits and packaging will be purchased from the local
suppliers. There is no need to invest in high inventory levels due to the
availability of required for production materials in regular stores around
Romania. We plan to keep minimal inventory on hands. At later stages of our
company development, when we will have high sales volumes, and will be required
to stock big inventory, negotiations might be done to get better pricing from
local suppliers, or suppliers located within the European Union.
8. FREIGHT
We plan to ship Tapioca Bubble Tea machines and Bubble Tea stands from the China
to Romania. All the supplies will be bought locally in Romania and will not
require shipping costs. At this stage we do not have written contract with any
of the shipment companies.
9. PERMITS AND OTHER GOVERNMENTAL REGULATIONS
At this stage of our company development, we have one permit pending. Vending
business operators required to have a permit in order to sell products to the
public. Permits will be obtained from government for the cost of $20 per stand.
We do not require any certification for product (Tapioca Bubble Tea) because all
direct materials will be purchased locally, certified for consumption.
Food Hygien Sertification. Employees who come into contact with food are needed
to participate in hygiene training, according to the Order MSnr.1225/2003, as
amended, to acquire the fundamentals of hygiene and nr.232/4.034 Order 2004 the
Minister of Health and Minister education and research on the modification and
completion methodology for organizing training and certification of staff on
teaching the fundamentals of hygiene, approved by Order of the Minister of
Health and Minister of Education, research and Youth no . 1.225/5.031/2003.
Food-purchase record storage and record keeping is required.
VAT Registration. Supplies of goods or services with the place of supply in
Romania are subject to Romanian value-added tax (VAT), where made by a taxable
person in the course of a business carried on by said person. Supplies includes
all forms of supplies.
34
10. TAPIOCA BUBBLE TEA STAND PLACMENT LOCATIONS
Initially we plan to place one Tapioca Bubble Tea stand in the malls in
Bucharest. Our future expansion will be based on the amount of finance obtained.
Tapioca Bubble Tea stands will be placed in major cities such as Bucharest, Ia?i
and Cluj, and in the following locations: malls, commercial centers, and sport
halls. We might be able to enter into revenue sharing agreement with the
owners/management for the taken space for the commission up to 20% of gross
margin in the future.
11. OFFICE
Our principal executive office is located at Lasi, Vasile Lupu nr. 83, bl. D1,
sc. B, Suite 37, Romania. Our phone number is + (0373) 78 12 42. The Director
provides our company with office space at no charge. Furniture, office
equipment, and supplies will be purchased locally.
12. LEASES
Our Tapioca Bubble Tea stand requires four square meters of operational space.
Lease terms and durations in Bucharest city area malls as follows:
Rate is ranging from $250 to $500 per months or $3000 to $6,000 per year. Taking
in to the account conservatism, our lease expense per location we will be $450
per month or $5,400 per year.
Duration of short term lease varies from 1 to 12 months. Taking in to the
account conservatism, our lease duration per location we will be 12th months.
Lease payment is due at the signing of the lease. Director will be a guarantor
for the leases. To remove Director's personal liability, full amount of the
lease term will be due on the singing of the lease. (Source: Personal visits to
six random malls located in Bucharest area: Unirea shopping City, Afi palace
Cotroceni, Plaza Romania, Baneasa Shopping City, Mall Vitan, Baneasa Shopping
City, Plaza Mall.
We already have one Tapioca Bubble stand purchased and placed in Magurele,
Bucharest -Ilfov, Muntenia, Romania, on March 1, 2015. Although, our first
location is not operational yet. We are in the process of renovating it for our
needs and still waiting for delivery of our permit. This lease costs $6,000 for
the first year, which will be covered by the loan promised by the Company's
President.
13. PRICING
Suggested Sale Price for 16-ounce clear plastic cup (1 US Dollar USD =~ 0.31601
Romanian New Leu )
Sale Price - $3.00 (0.95 RON)
Cost - $1.2 (24 RON)
14. PERSONNEL
We are going to hire locals for the positions of sales people. Sales personnel
salary remuneration will be commission based. Standard rate will be 15% of gross
sales. When we will have at least five stands managers will be hired from locals
or promoted from the sales people. Manager remuneration is commission of 5% of
gross sales. Managers and sales personnel shall not be entitled to any salary in
addition to commissions
35
Personnel will have to be trained to operate and service Tapioca Bubble Tea
equipment. At first, training will be done by Director. Managers will take over
this function when they will be hired.
15. COMPETITION
Bubble tea is a fairly new product, so there are very few direct competitors at
this moment. But at the same time we have to compete with other drink providers,
from low priced soft drinks to high priced juices and smoothies. Our main
advantage is that our Bubble Teas offer similar to smoothies and juices health
benefits, while being more affordable.
Larger stores carry a better selection of drinks in various sizes and types of
packaging, as well as accessories such as storage containers, travel tumblers
and mugs.
17. FINANCE
We are planning to raise $100,000 through public offering. There is no assurance
that full amount, or any amount, will be obtained. The following table sets
forth the uses of proceeds assuming the funding of 25%, 50%, 75%, and 100%,
respectively.
25,000 50,000 75,000 100,000
------ ------ ------ -------
Legal and professional fees
(associated with maintaining
reporting status) $10,000 $10,000 $10,000 $10,000
Permits $ 20 $ 40 $ 80 $ 120
Additional Leases $ 5,400 $10,800 $21,600 $32,400
Developing website/hosting $ 650 $ 3,000 $ 3,000 $ 3,000
Number of Additional Locations 1 2 4 6
Additional Equipment and Stands $ 7,000 $14,000 $28,000 $42,000
Marketing and Advertising $ 1,680 $ 9,660 $ 9,320 $ 8,980
Office $ 0 $ 2,000 $ 2,000 $ 2,000
Supplies 250 500 1,000 1,500
Our current lease is $6,000 for the first year, which will be covered by the
loan promised by the Company's President.
DIRECTORS, EXECUTIVE OFFICERS, PROMOTER AND CONTROL PERSONS
The following table sets forth as of October 31, 2014, the names, positions and
ages of our current executive officers and directors
Name and Address of Executive
Officer and/or Director Age Position
----------------------- --- --------
Slav Serghei 28 President, Director, Executive
Bucharest 28, Bucharest, 87-100 Officer, Treasurer, Secretary
Romania
The following is a brief description of the business experience of our executive
officer:
- graduated high school for animators 2002
- resort and condominium manager of Phoenicia Apartments Unirii, 2002 -
2011
- owner of an internet shopping and advertising company, Promotheus,
2011 - 2014
36
Slav Serghei has acted as our President, Secretary, Treasurer and sole Director
since our incorporation on April 18, 2014. His experience as a middle range
manager and director of a small company provided him with good knowledge of
successful business operations, employee training and time management. Plus it
gave him excellent experience in marketing and advertising. Our president will
be devoting approximately 20 hours/week of his business time to our operations.
Once we expand operations, and are able to attract more customers to purchase
our product, Slav Serghei has agreed to commit more time as required. Because
Slav Serghei will only be devoting limited time to our operations, our
operations may be sporadic and occur at times which are convenient to him. As a
result, operations may be periodically interrupted or suspended which could
result in a lack of revenues and a cessation of operations.
During the past ten years, Mr. Slav has not been the subject to any of the
following events:
Any bankruptcy petition filed by or against any business of which Mr.
Slav was a general partner or executive
1. Any bankruptcy petition filed by or against any business of which Mr.
Slav was a general partner or executive officer either at the time of
the bankruptcy or within two years prior to that time.
2. Any conviction in a criminal proceeding or being subject to a pending
criminal proceeding.
3. An order, judgment, or decree, not subsequently reversed, suspended or
vacated, or any court of competent jurisdiction, permanently or
temporarily enjoining, barring, suspending or otherwise limiting Mr.
Slav 's involvement in any type of business, securities or banking
activities.
4. Found by a court of competent jurisdiction (in a civil action), the
Securities and Exchange Commission or the Commodity Future Trading
Commission to have violated a federal or state securities or
commodities law, and the judgment has not been reversed, suspended or
vacated.
5. Was the subject of any order, judgment or decree, not subsequently
reversed, suspended or vacated, of any Federal or State authority
barring, suspending or otherwise limiting for more than 60 days the
right to engage in any activity described in paragraph (f)(3)(i) of
this section, or to be associated with persons engaged in any such
activity;
6. Was found by a court of competent jurisdiction in a civil action or by
the Commission to have violated any Federal or State securities law,
and the judgment in such civil action or finding by the Commission has
not been subsequently reversed, suspended, or vacated;
7. Was the subject of, or a party to, any Federal or State judicial or
administrative order, judgment, decree, or finding, not subsequently
reversed, suspended or vacated, relating to an alleged violation of:
i. Any Federal or State securities or commodities law or regulation;
or
ii. Any law or regulation respecting financial institutions or
insurance companies including, but not limited to, a temporary or
permanent injunction, order of disgorgement or restitution, civil
money penalty or temporary or permanent cease-and-desist order,
or removal or prohibition order; or
iii. Any law or regulation prohibiting mail or wire fraud or fraud in
connection with any business entity; or
8. Was the subject of, or a party to, any sanction or order, not
subsequently reversed, suspended or vacated, of any self-regulatory
organization (as defined in Section 3(a)(26) of the Exchange Act (15
U.S.C. 78c(a)(26))), any registered entity (as defined in Section
1(a)(29) of the Commodity Exchange Act (7 U.S.C. 1(a)(29))), or any
equivalent exchange, association, entity or organization that has
disciplinary authority over its members or persons associated with a
member.
37
AUDIT COMMETEE FINANCIAL EXPERT
We do not have an audit committee financial expert. We do not have an audit
committee financial expert because we believe the cost related to retaining a
financial expert at this time is prohibitive. Further, because we just recently
started our operations, at the present time, we believe the services of a
financial expert are not warranted.
CONFLICT OF INTEREST
The only conflict that we foresee are that our sole officer and director will
devote time to projects that do not involve us.
TERM OF OFFICE
Each of our directors is appointed to hold office until the next annual meeting
of our stockholders or until his respective successor is elected and qualified,
or until he resigns or is removed in accordance with the provisions of the
Nevada Revised Statues. Our officers are appointed by our Board of Directors and
hold office until removed by the Board or until their resignation.
DIRECTOR INDEPENDENCE
Our board of directors is currently composed of one member, Slav Serghei, who
does not qualify as an independent director in accordance with the published
listing requirements of the NASDAQ Global Market. The NASDAQ independence
definition includes a series of objective tests, such as that the director is
not, and has not been for at least three years, one of our employees and that
neither the director, nor any of his family members has engaged in various types
of business dealings with us. In addition, our board of directors has not made a
subjective determination as to each director that no relationships exists which,
in the opinion of our board of directors, would interfere with the exercise of
independent judgment in carrying out the responsibilities of a director, though
such subjective determination is required by the NASDAQ rules. Had our board of
directors made these determinations, our board of directors would have reviewed
and discussed information provided by the directors and us with regard to each
director's business and personal activities and relationships as they may relate
to us and our management.
COMMITTEES OF THE BOARD OF DIRECTORS
Our Board of Directors has no committees. We do not have a standing nominating,
compensation or audit committee.
SIGNIFICANT EMPLOYEES
We are a development stage company and currently have no employees.
EXECUTIVE COMPENSATION
MANAGEMENT COMPENSATION
The following tables set forth certain information about compensation paid,
earned or accrued for services by our President, and Secretary and all other
executive officers (collectively, the "Named Executive Officers") from inception
on April 18, 2014 January 31, 2015:
38
SUMMARY COMPENSATION TABLE
Non-Equity Nonqualified
Name and Incentive Deferred
Principal Stock Option Plan Compensation All Other
Position Year Salary($) Bonus($) Awards($) Awards($) Compensation($) Earnings($) Compensation($) Totals($)
-------- ---- --------- -------- --------- --------- --------------- ----------- --------------- ---------
Slav Serghei, April 8, -0- -0- -0- -0- -0- -0- -0- -0-
President, 2014
Treasurer and January 31
Secretary 2015
There are no current employment agreements between the company and its officer.
Mr. Slav currently devotes approximately twenty hours per week to manage the
affairs of the Company. He has agreed to work with no remuneration until such
time as the company receives sufficient revenues necessary to provide management
salaries. At this time, we cannot accurately estimate when sufficient revenues
will occur to implement this compensation, or what the amount of the
compensation will be.
No retirement, pension, profit sharing, stock option or insurance programs or
other similar programs have been adopted by us for the benefit of our officer or
director or employees.
DIRECTOR COMPENSATION
The following table sets forth director compensation as of January 31, 2015:
Fees Nonqualified
Earned Non-Equity Deferred
Paid in Stock Option Incentive Plan Compensation All Other
Name Cash($) Awards($) Awards($) Compensation($) Earnings($) Compensation($) Total($)
---- ------- --------- --------- --------------- ----------- --------------- --------
Slav Serghei -0- -0- -0- -0- -0- -0- -0-
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Slav Serghei will not be paid for any underwriting services that he performs on
our behalf with respect to this offering.
Since our incorporation, we issued a total of 3,500,000 shares of restricted
common stock to Slav Serghei, our sole officer and director in consideration of
$3,500.
On October 17, 2014, he loaned the Company $5,000 of the $25,000, and on
December 14, 2014, he loaned the Company an additional $3,450. The loan is
unsecured, non-interest bearing, non-convertible and due on demand.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information concerning the number of
shares of our common stock owned beneficially as January 31, 2015 by: (i) each
person (including any group) known to us to own more than five percent (5%) of
any class of our voting securities, (ii) our director, and or (iii) our officer.
Unless otherwise indicated, the stockholder listed possesses sole voting and
investment power with respect to the shares shown.
39
Name and Address of Amount and Nature of
Title of Class Beneficial Owner Beneficial Ownership Percentage
-------------- ---------------- -------------------- ----------
Common Stock Slav Serghei 3,500,000 shares of 100%
Bucharest 28, common stock (direct)
Bucharest, 87-100
Romania
(1) A beneficial owner of a security includes any person who, directly or
indirectly, through any contract, arrangement, understanding, relationship, or
otherwise has or shares: (i) voting power, which includes the power to vote, or
to direct the voting of shares; and (ii) investment power, which includes the
power to dispose or direct the disposition of shares. Certain shares may be
deemed to be beneficially owned by more than one person (if, for example,
persons share the power to vote or the power to dispose of the shares). In
addition, shares are deemed to be beneficially owned by a person if the person
has the right to acquire the shares (for example, upon exercise of an option)
within 60 days of the date as of which the information is provided. In computing
the percentage ownership of any person, the amount of shares outstanding is
deemed to include the amount of shares beneficially owned by such person (and
only such person) by reason of these acquisition rights. As a result, the
percentage of outstanding shares of any person as shown in this table does not
necessarily reflect the person's actual ownership or voting power with respect
to the number of shares of common stock actually outstanding on January 31,
2015.
As of January 31, 2015, there were 3,500,000 shares of our common stock issued
and outstanding.
FUTURE SALES BY EXISTING STOCKHOLDERS
A total of 3,500,000 shares of common stock were issued to our sole officer and
director, all of which are restricted securities, as defined in Rule 144 of the
Rules and Regulations of the SEC promulgated under the Securities Act. Under
Rule 144, the shares can be publicly sold, subject to volume restrictions and
restrictions on the manner of sale, commencing one year after their acquisition.
Our investors are not allowed to rely on Rule 144 of the Securities Act for a
period of one year from the date that we cease to be a shell company. Shares
purchased in this offering, which will be immediately resalable, and sales of
all of our other shares after applicable restrictions expire, could have a
depressive effect on the market price, if any, of our common stock and the
shares we are offering.
There is no public trading market for our common stock. To be quoted on the
OTCBB a market maker must file an application on our behalf to make a market for
our common stock. As of the date of this Registration Statement, we have not
engaged a market maker to file such an application, that there is no guarantee
that a market marker will file an application on our behalf, and that even if an
application is filed, there is no guarantee that we will be accepted for
quotation. Our stock may become quoted, rather than traded, on the OTCBB.
There are no outstanding options or warrants to purchase, or securities
convertible into, our common stock. There is one holder of record for our common
stock. The record holder is our sole officer and director who owns 3,500,000
restricted shares of our common stock.
PLAN OF DISTRIBUTION; TERMS OF THE OFFERING
Tapioca Corp. has 3,500,000 shares of common stock issued and outstanding as of
the date of this prospectus. The Company is registering an additional of
10,000,000 shares of its common stock for sale at the price of $0.01 per share.
There is no arrangement to address the possible effect of the offering on the
price of the stock.
In connection with the Company's selling efforts in the offering, Slav Serghei
will not register as a broker-dealer pursuant to Section 15 of the Exchange Act,
but rather will rely upon the "safe harbor" provisions of SEC Rule 3a4-1,
promulgated under the Securities Exchange Act of 1934, as amended (the "Exchange
Act"). Generally speaking, Rule 3a4-1 provides an exemption from the
broker-dealer registration requirements of the Exchange Act for persons
associated with an issuer that participate in an offering of the issuer's
40
securities. Mr. Slav is not subject to any statutory disqualification, as that
term is defined in Section 3(a)(39) of the Exchange Act. Mr. Slav will not be
compensated in connection with his participation in the offering by the payment
of commissions or other remuneration based either directly or indirectly on
transactions in our securities. Mr. Slav is not, nor has he been within the past
12 months, a broker or dealer, and he is not, nor has he been within the past 12
months, an associated person of a broker or dealer. At the end of the offering,
Mr. Slav will continue to primarily perform substantial duties for the Company
or on its behalf otherwise than in connection with transactions in securities.
Mr. Slav will not participate in selling an offering of securities for any
issuer more than once every 12 months other than in reliance on Exchange Act
Rule 3a4-1(a)(4)(i) or (iii).
Tapioca Corp. will receive all proceeds from the sale of the 10,000,000 shares
being offered. The price per share is fixed at $0.01 for the duration of this
offering. Although our common stock is not listed on a public exchange or quoted
over-the-counter, we intend to seek to have our shares of common stock quoted on
the Over-the Counter Bulletin Board. In order to be quoted on the OTC Bulletin
Board, a market maker must file an application on our behalf in order to make a
market for our common stock. There can be no assurance that a market maker will
agree to file the necessary documents with FINRA, nor can there be any assurance
that such an application for quotation will be approved. However, sales by the
Company must be made at the fixed price of $0.01 per share.
The Company will not offer its shares for sale through underwriters, dealers,
agents or anyone who may receive compensation in the form of underwriting
discounts, concessions or commissions from the Company and/or the purchasers of
the shares for whom they may act as agents. The shares of common stock sold by
the Company may be occasionally sold in one or more transactions; all shares
sold under this prospectus will be sold at a fixed price of $0.01 per share.
We are a "shell company" within the meaning of Rule 405, promulgated pursuant to
Securities Act, because we have nominal assets and nominal operations. Because
we are a shell company, the Rule 144 safe harbor is not available for the resale
of any restricted securities issued by us in any subsequent unregistered
offering. This will likely make it more difficult for us to attract additional
capital through subsequent unregistered offerings because purchasers of
securities in such unregistered offerings will not be able to resell their
securities in reliance on Rule 144, a safe harbor on which holders of restricted
securities usually rely to resell securities.
STATE SECURITIES - BLUE SKY LAWS
There is no established public market for our common stock, and there can be no
assurance that any market will develop in the foreseeable future. Transfer of
our common stock may also be restricted under the securities or securities
regulations laws promulgated by various states and foreign jurisdictions,
commonly referred to as "Blue Sky" laws. Absent compliance with such individual
state laws, our common stock may not be traded in such jurisdictions. Because
the securities registered hereunder have not been registered for resale under
the blue sky laws of any state, the holders of such shares and persons who
desire to purchase them in any trading market that might develop in the future,
should be aware that there may be significant state blue-sky law restrictions
upon the ability of investors to sell the securities and of purchasers to
purchase the securities. Accordingly, investors may not be able to liquidate
their investments and should be prepared to hold the common stock for an
indefinite period of time.
In order to comply with the applicable securities laws of certain states, the
securities will be offered or sold in those only if they have been registered or
qualified for sale; an exemption from such registration or if qualification
requirement is available and with which Tapioca Corp. has complied.
In addition and without limiting the foregoing, the Company will be subject to
applicable provisions, rules and regulations under the Exchange Act with regard
to security transactions during the period of time when this Registration
Statement is effective.
Our shares of common stock are subject to the "penny stock" rules of the
Securities and Exchange Commission. The SEC has adopted rules that regulate
broker-dealer practices in connection with transactions in "penny stocks". Penny
41
stocks generally are equity securities with a price of less than $5.00 (other
than securities registered on certain national securities exchanges or quoted on
the NASDAQ system, provided that current price and volume information with
respect to transactions in such securities is provided by the exchange or
system). Penny stock rules require a broker-dealer, prior to a transaction in a
penny stock not otherwise exempt from those rules, to deliver a standardized
risk disclosure document prepared by the SEC, which specifies information about
penny stocks and the nature and significance of risks of the penny stock market.
A broker-dealer must also provide the customer with bid and offer quotations for
the penny stock, the compensation of the broker-dealer, and sales person in the
transaction, and monthly account statements indicating the market value of each
penny stock held in the customer's account. In addition, the penny stock rules
require that, prior to a transaction in a penny stock not otherwise exempt from
those rules, the broker-dealer must make a special written determination that
the penny stock is a suitable investment for the purchaser and receive the
purchaser's written agreement to the transaction. These disclosure requirements
may have the effect of reducing the trading activity in the secondary market for
stock that becomes subject to those penny stock rules. If a trading market for
our common stock develops, our common stock will probably become subject to the
penny stock rules, and shareholders may have difficulty in selling their shares.
Tapioca Corp. will pay all expenses incidental to the registration of the shares
(including registration pursuant to the securities laws of certain states) which
we expect to be $10,000.
OFFERING PERIOD AND EXPIRATION DATE
This offering will start on the date that this registration statement is
declared effective by the SEC and continue for a period of one year. The
offering shall terminate on the earlier of (i) the date when the sale of all
10,000,000 shares is completed, (ii) when the Board of Directors decides that it
is in the best interest of the Company to terminate the offering prior the
completion of the sale of all 10,000,000 shares registered under the
Registration Statement of which this Prospectus is part or (iii) one year after
the effective date of this prospectus. We will not accept any money until this
registration statement is declared effective by the SEC.
PROCEDURES FOR SUBSCRIBING
If you decide to subscribe for any shares in this offering, you must
- execute and deliver a subscription agreement; and
- deliver a check or certified funds to us for acceptance or rejection.
All checks for subscriptions must be made payable to "Tapioca Corp."
RIGHT TO REJECT SUBSCRIPTIONS
We have the right to accept or reject subscriptions in whole or in part, for any
reason or for no reason. All monies from rejected subscriptions will be returned
immediately by us to the subscriber, without interest or deductions.
Subscriptions for securities will be accepted or rejected within 48 hours after
we receive them.
DESCRIPTION OF SECURITIES
GENERAL
Our authorized capital stock consists of 75,000,000 shares of common stock, par
value $0.001 per share. Our Articles of Incorporation do not authorized us to
issue and preferred stock. As of January 31, 2015, there were 3,500,000 shares
of our common stock issued and outstanding that was held by one registered
stockholder of record, and no shares of preferred stock issued and outstanding.
COMMON STOCK
The following description of our common stock is a summary and is qualified in
its entirety by the provisions of our Articles of Incorporation and Bylaws which
have been filed as exhibits to our registration statement of which this
prospectus is a part.
42
The holders of our common stock currently have (i) equal ratable rights to
dividends from funds legally available therefore, when, as and if declared by
the Board of Directors of the Company; (ii) are entitled to share ratably in all
of the assets of the Company available for distribution to holders of common
stock upon liquidation, dissolution or winding up of the affairs of the Company
(iii) do not have preemptive, subscription or conversion rights and there are no
redemption or sinking fund provisions or rights applicable thereto; and (iv) are
entitled to one non-cumulative vote per share on all matters on which
stockholders may vote.
PREFERRED STOCK
We are not authorized to issue preferred shares.
SHARE PURCHASE WARRANTS
We have not issued and do not have any outstanding warrants to purchase shares
of our common stock.
OPTIONS
We have not issued and do not have any outstanding options to purchase shares of
our common stock.
CONVERTIBLE SECURITIES
We have not issued and do not have any outstanding securities convertible into
shares of our common stock or any rights convertible or exchangeable into shares
of our common stock.
NON-CUMULATIVE VOTING
Holders of shares of our common stock do not have cumulative voting rights,
which means that the holders of more than 50% of the outstanding shares, voting
for the election of directors, can elect all of the directors to be elected, if
they so choose, and, in that event, the holders of the remaining shares will not
be able to elect any of our directors. After this offering is completed,
assuming the sale of all of the shares of common stock, present stockholders
will own approximately 26% of our outstanding shares.
CASH DIVIDENDS
As of the date of this prospectus, we have not paid any cash dividends to
stockholders. The declaration of any future cash dividend will be at the
discretion of our board of directors and will depend upon our earnings, if any,
our capital requirements and financial position, our general economic
conditions, and other pertinent conditions. It is our present intention not to
pay any cash dividends in the foreseeable future, but rather to reinvest
earnings, if any, in our business operations.
NEVADA ANTI-TAKEOVER LAWS
Currently, we have no Nevada shareholders and since this offering will not be
made in the State of Nevada, no shares will be sold to its residents. Further,
we do not do business in Nevada directly or through an affiliate corporation and
we do not intend to do so. Accordingly, there are no anti-takeover provisions
that have the affect of delaying or preventing a change in our control.
The Nevada Business Corporation Law contains a provision governing "Acquisition
of Controlling Interest." This law provides generally that any person or entity
that acquires 20% or more of the outstanding voting shares of a publicly-held
Nevada corporation in the secondary public or private market may be denied
voting rights with respect to the acquired shares, unless a majority of the
disinterested stockholders of the corporation elects to restore such voting
rights in whole or in part. The control share acquisition law provides that a
43
person or entity acquires "control shares" whenever it acquires shares that, but
for the operation of the control share acquisition act, would bring its voting
power within any of the following three ranges: (1) 20 to 33 1/3%, (2) 33 1/3 to
50%, or (3) more than 50%. A "control share acquisition" is generally defined as
the direct or indirect acquisition of either ownership or voting power
associated with issued and outstanding control shares. The stockholders or board
of directors of a corporation may elect to exempt the stock of the corporation
from the provisions of the control share acquisition act through adoption of a
provision to that effect in the Articles of Incorporation or Bylaws of the
corporation. Our Articles of Incorporation and Bylaws do not exempt our common
stock from the control share acquisition law. The control share acquisition law
is applicable only to shares of "Issuing Corporations" as defined by the act. An
Issuing Corporation is a Nevada corporation, which; (1) has 200 or more
stockholders, with at least 100 of such stockholders being both stockholders of
record and residents of Nevada; and (2) does business in Nevada directly or
through an affiliated corporation.
At this time, we do not have 100 stockholders of record resident of Nevada.
Therefore, the provisions of the control share acquisition law do not apply to
acquisitions of our shares and will not until such time as these requirements
have been met. At such time as they may apply to us, the provisions of the
control share acquisition law may discourage companies or persons interested in
acquiring a significant interest in or control of the Company, regardless of
whether such acquisition may be in the interest of our stockholders.
The Nevada "Combination with Interested Stockholders Statute" may also have an
effect of delaying or making it more difficult to effect a change in control of
the Company. This statute prevents an "interested stockholder" and a resident
domestic Nevada corporation from entering into a "combination," unless certain
conditions are met. The statute defines "combination" to include any merger or
consolidation with an "interested stockholder," or any sale, lease, exchange,
mortgage, pledge, transfer or other disposition, in one transaction or a series
of transactions with an "interested stockholder" having; (1) an aggregate market
value equal to 5 percent or more of the aggregate market value of the assets of
the corporation; (2) an aggregate market value equal to 5 percent or more of the
aggregate market value of all outstanding shares of the corporation; or (3)
representing 10 percent or more of the earning power or net income of the
corporation. An "interested stockholder" means the beneficial owner of 10
percent or more of the voting shares of a resident domestic corporation, or an
affiliate or associate thereof. A corporation affected by the statute may not
engage in a "combination" within three years after the interested stockholder
acquires its shares unless the combination or purchase is approved by the board
of directors before the interested stockholder acquired such shares. If approval
is not obtained, then after the expiration of the three-year period, the
business combination may be consummated with the approval of the board of
directors or a majority of the voting power held by disinterested stockholders,
or if the consideration to be paid by the interested stockholder is at least
equal to the highest of: (1) the highest price per share paid by the interested
stockholder within the three years immediately preceding the date of the
announcement of the combination or in the transaction in which he became an
interested stockholder, whichever is higher; (2) the market value per common
share on the date of announcement of the combination or the date the interested
stockholder acquired the shares, whichever is higher; or (3) if higher for the
holders of preferred stock, the highest liquidation value of the preferred
stock. The effect of Nevada's business combination law is to potentially
discourage parties interested in taking control of the Company from doing so if
it cannot obtain the approval of our board of directors.
REPORTS
After we complete this offering, we will not be required to furnish you with an
annual report. Further, we will not voluntarily send you an annual report. We
will be required to file reports with the SEC under section 15(d) of the
Securities Act. The reports will be filed electronically. The reports we will be
required to file are Forms 10-K, 10-Q, and 8-K. You may read copies of any
materials we file with the SEC at the SEC's Public Reference Room at 100 F
Street, N.E., Washington, D.C. 20549. You may obtain information on the
operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. The
SEC also maintains an Internet site that will contain copies of the reports we
file electronically. The address for the Internet site is www.sec.gov.
44
STOCK TRANSFER AGENT
We do not have a Transfer Agent.
INDEMNIFICATION FOR SECURITIES ACT LIABILITIES
Our Articles of Incorporation provide that we will indemnify an officer,
director, or former officer or director, to the full extent permitted by law. We
have been advised that, in the opinion of the SEC, indemnification for
liabilities arising under the Securities Act is against public policy as
expressed in the Securities Act, and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment of expenses incurred or paid by a director, officer or controlling
person in the successful defense of any action, suit or proceeding) is asserted
by one of our director, officers, or controlling persons in connection with the
securities being registered, we will, unless in the opinion of our legal counsel
the matter has been settled by controlling precedent, submit the question of
whether such indemnification is against public policy to a court of appropriate
jurisdiction. We will then be governed by the court's decision.
LEGAL MATTERS
LEGAL COUNSEL PROVIDING LEGAL OPINION
The validity of the issuance of the shares of common stock will be passed upon
for the company by Scott D. Olson, Esq. Counsel has additionally consented to
his opinion being included as an exhibit to this filing. Additionally, counsel
has consented to being named in the prospectus.
The legal counsel that passed their opinion on the legality of these securities
is:
Scott D. Olson, Esq.
274 Broadway
Costa Mesa, CA 92627
INTERESTS OF NAMED EXPERTS AND COUNSEL
No expert or counsel named in this prospectus as having prepared or certified
any part of this prospectus or having given an opinion upon the validity of the
securities being registered or upon other legal matters in connection with the
registration or offering of the common stock was employed on a contingency basis
or had, or is to receive, in connection with the offering, a substantial
interest, directly or indirectly, in the registrant or any of its parents or
subsidiaries. Nor was any such person connected with the registrant or any of
its parents, subsidiaries as a promoter, managing or principal underwriter,
voting trustee, director, officer or employee.
EXPERTS
HARRIS & GILLESPIE CPA'S, PLLC, our independent registered public accountant,
has audited our financial statements included in this prospectus and
registration statement to the extent and for the periods set forth in their
audit report. HARRIS & GILLESPIE CPA'S, PLLC, has presented its report with
respect to our audited financial statements.
AVAILABLE INFORMATION
We have not previously been required to comply with the reporting requirements
of the Securities Exchange Act. We have filed with the SEC a registration
statement on Form S-1/A to register the securities offered by this prospectus.
For future information about us and the securities offered under this
prospectus, you may refer to the registration statement and to the exhibits
filed as a part of the registration statement. In addition, after the effective
date of this prospectus, we will be required to file annual, quarterly and
current reports, or other information with the SEC as provided by the Securities
45
Exchange Act. You may read and copy any reports, statements or other information
we file at the SEC's public reference facility maintained by the SEC at 100 F
Street, N.E., Washington, D.C. 20549. You can request copies of these documents,
upon payment of a duplicating fee, by writing to the SEC. Please call the SEC at
1-800-SEC-0330 for further information on the operation of the public reference
room. Our SEC filings are also available to the public through the SEC Internet
site at www.sec.gov.
FINANCIAL STATEMENTS
The financial statements of Tapioca Corp. for the period ended October 31, 2014,
and related notes, included in this prospectus have been audited by, and have
been so included in reliance upon the opinion of such accountants given upon
their authority as an expert in auditing and accounting.
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE
We have had no changes in or disagreements with our independent registered
public accountant.
46
TAPIOCA CORP.
(A DEVELOPMENT STAGE COMPANY)
TABLE OF CONTENTS
FOR THE PERIOD FROM APRIL 18, 2014 (INCEPTION) TO OCTOBER 31, 2014
Report of Independent Registered Public Accounting Firm F-1
Balance Sheet as of October 31, 2014 F-2
Statement of Operations for the period April 18, 2014 (inception) to
October 31, 2014 F-3
Statement of Changes in Stockholder's Equity for the period from
April 18, 2014 (inception) to October 31, 2014 F-4
Statement of Cash Flows for the period April 18, 2014 (inception) to
October 31, 2014 F-5
Notes to the Audited Financial Statements F-6
47
HARRIS & GILLESPIE CPA'S, PLLC
CERTIFIED PUBLIC ACCOUNTANT'S
3901 STONE WAY N., SUITE 202
SEATTLE, WA 98103
206.547.6050
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors
Tapioca, Corp.
We have audited the accompanying balance sheets of Tapioca Corp. (A Development
Stage Company) as of October 31, 2014 and the related statements of operations,
stockholders' equity and cash flows for the period then ended, and for the
period from April 18, 2014 (inception) to October 31, 2014. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.
We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. The company is not required to
have, nor were we engaged to perform, an audit of its internal control over
financial reporting. Our audit included consideration of internal control over
financial reporting as a basis for designing audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the company's internal control over financial
reporting. Accordingly, we express no such opinion. An audit also includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Tapioca Corp. (A Development
Stage Company) as of October 31, 2014 and the results of its operations and cash
flows for the period then ended and for the period from April 18, 2014
(inception) to October 31, 2014 in conformity with generally accepted accounting
principles in the United States of America.
The accompanying financial statements have been prepared assuming the Company
will continue as a going concern. As discussed in Note #2 to the financial
statements, although the Company has limited operations it has yet to attain
profitability. This raises substantial doubt about its ability to continue as a
going concern. Management's plan in regard to these matters is also described in
Note #2. The financial statements do not include any adjustments that might
result from the outcome of this uncertainty.
/s/ HARRIS & GILLESPIE CPA'S, PLLC
--------------------------------------------
Seattle, Washington
November 26, 2014
F-1
TAPIOCA CORP.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEET
AS OF OCTOBER 31, 2014
October 31, 2014
----------------
ASSETS
Current Assets
Cash and cash equivalents $ 1,425
-------
Total Current Assets 1,425
Fixed Assets
Equipment 7,000
-------
Total Fixed Assets 7,000
-------
Total Assets $ 8,425
=======
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities
Current Liabilities
Loan from director $ 5,000
-------
Total Current Liabilities 5,000
-------
Total Liabilities 5,000
Commitments and Contingencies
Stockholder's Equity
Common stock, par value $0.001; 75,000,000 shares authorized,
3,500,000 shares issued and outstanding 3,500
Additional paid in capital --
Deficit accumulated during the development stage (75)
-------
Total Stockholder's Equity 3,425
-------
Total Liabilities and Stockholder's Equity $ 8,425
=======
See accompanying notes to financial statements.
F-2
TAPIOCA CORP.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF OPERATIONS
FOR THE PERIOD FROM APRIL 18, 2014 (INCEPTION) TO OCTOBER 31, 2014
For the period from
April 18, 2014
(Inception) to
October 31, 2014
----------------
REVENUES $ --
OPERATING EXPENSES
General and Administrative Expenses 75
---------
TOTAL OPERATING EXPENSES 75
---------
NET LOSS FROM OPERATIONS (75)
PROVISION FOR INCOME TAXES --
---------
NET LOSS $ (75)
=========
NET LOSS PER SHARE: BASIC AND DILUTED $ (0.00)
=========
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING:
BASIC AND DILUTED 250,000
=========
See accompanying notes to financial statements.
F-3
TAPIOCA CORP.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CHANGES IN STOCKHOLDER'S EQUITY
FOR THE PERIOD FROM APRIL 18, 2014 (INCEPTION) TO OCTOBER 31, 2014
Deficit
Accumulated
Common Stock Additional during the Total
------------------- Paid-in Development Stockholders'
Shares Amount Capital Stage Equity
------ ------ ------- ----- ------
Inception, April 18, 2014 -- $ -- $ -- $ -- $ --
Shares issued for cash at $0.001 per
share on October 17, 2014 3,500,000 3,500 -- -- 3,500
Net loss for the period ended
October 31, 2014 -- -- -- (75) (75)
--------- ------- ------- ------- -------
Balance, October 31, 2014 3,500,000 $ 3,500 $ -- $ (75) $ 3,425
========= ======= ======= ======= =======
See accompanying notes to financial statements.
F-4
TAPIOCA CORP.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CASH FLOWS
FOR THE PERIOD FROM APRIL 18, 2014 (INCEPTION) TO OCTOBER 31, 2014
For the period from
April 18, 2014
(Inception) to
October 31, 2014
----------------
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss for the period $ (75)
Adjustments to reconcile net loss to net
cash (used in) operating activities:
-------
CASH FLOWS USED IN OPERATING ACTIVITIES (75)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of Equipment (7,000)
-------
CASH FLOWS USED IN INVESTING ACTIVITIES (7,000)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from sale of common stock 3,500
Loan from director 5,000
-------
CASH FLOWS PROVIDED BY FINANCING ACTIVITIES 8,500
NET INCREASE IN CASH 1,425
Cash, beginning of period --
-------
Cash, end of period $ 1,425
=======
SUPPLEMENTAL CASH FLOW INFORMATION:
Interest paid $ 0
=======
Income taxes paid $ 0
=======
See accompanying notes to financial statements.
F-5
TAPIOCA CORP.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE AUDITED FINANCIAL STATEMENTS
OCTOBER 31, 2014
NOTE 1 - ORGANIZATION AND NATURE OF BUSINESS
TAPIOCA CORP. ("the Company", "we", "us" or "our") was incorporated in the State
of Nevada on April 18, 2014. We are a development-stage company formed to sell
Bubble Tea from mobile stands in Romania.
NOTE 2 - GOING CONCERN
The accompanying financial statements have been prepared in conformity with
generally accepted accounting principles, which contemplate continuation of the
Company as a going concern. However, the Company had no revenues and incurred
losses from April 18, 2014 through October 31, 2014. The Company currently has
capital working capital deficit, has not completed its efforts to establish a
stabilized source of revenues sufficient to cover operating costs over an
extended period of time and currently does not have the funding available to
further develop its business plan. Accordingly, there is substantial doubt about
the Company's ability to continue as a going concern.
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 will 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.
NOTE 3 - SUMMARY OF SIGNIFCANT ACCOUNTING POLICIES
Basis of presentation
The accompanying financial statements have been prepared in accordance with
generally accepted accounting principles in the United States of America. The
Company's year end is October 31.
Development Stage Company
The Company is a development stage company as defined by section 915-10-20 of
the FASB Accounting Standards Codification and among the additional disclosures
required as a development stage company are that its financial statements were
identified as those of a development stage company, and that the statements of
operations, stockholders' deficit and cash flows disclosed activity since the
date of its inception (April 18, 2014) as a development stage company Although
the Company has recognized nominal amounts of revenue, it is still devoting
substantially all of its efforts on establishing the business. All losses
accumulated since Inception (April 18, 2014) have been considered as part of the
Company's development stage activities. Effective June 10, 2014 FASB changed its
regulations with respect to Development Stage Entities and these additional
disclosures are no longer required for annual reporting periods beginning after
December 15, 2014 with the option for entities to early adopt these new
provisions. The Company has not elected to early adopt these provisions and
consequently these additional disclosures are included in these financial
statements.
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.
F-6
TAPIOCA CORP.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE AUDITED FINANCIAL STATEMENTS
OCTOBER 31, 2014
NOTE 3 - SUMMARY OF SIGNIFCANT ACCOUNTING POLICIES (CONTUNUED)
Cash and Cash Equivalents
The Company considers all highly liquid investments with the original maturities
of three months or less to be cash equivalents. The Company had $1,425 of cash
as of October 31, 2014.
Fair Value of Financial Instruments
ASC 820 "Fair Value Measurements and Disclosures" establishes a three-tier fair
value hierarchy, which prioritizes the inputs in measuring fair value. The
hierarchy prioritizes the inputs into three levels based on the extent to which
inputs used in measuring fair value are observable in the market.
These tiers include:
Level 1: defined as observable inputs such as quoted prices in active markets;
Level 2: defined as inputs other than quoted prices in active markets that are
either directly or indirectly observable; and
Level 3: defined as unobservable inputs in which little or no market data
exists, therefore requiring an entity to develop its own assumptions.
The carrying value of cash and the Company's loan from shareholder approximates
its fair value due to their short-term maturity.
Property and Equipment
Property and equipment are stated at cost and depreciated on the straight line
method over the estimated life of the asset, which is 5 years.
No depreciation was charged during the period from April 18, 2014 to October 31,
2014 as the equipment purchased by the Company during this period was not used
during the period.
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.
F-7
TAPIOCA CORP.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE AUDITED FINANCIAL STATEMENTS
OCTOBER 31, 2014
Revenue Recognition
The Company will recognize revenue in accordance with Accounting Standards
Codification No. 605, "Revenue Recognition" ("ASC-605"), ASC-605 requires that
four basic criteria must be met before revenue can be recognized: (1) persuasive
evidence of an arrangement exists; (2) delivery has occurred; (3) the selling
price is fixed and determinable; and (4) collectibility is reasonably assured.
Determination of criteria (3) and (4) are based on management's judgments
regarding the fixed nature of the selling prices of the products delivered and
the collectibility of those amounts. Provisions for discounts and rebates to
customers, estimated returns and allowances, and other adjustments are provided
for in the same period the related sales are recorded. The Company will defer
any revenue for which the product has not been delivered or is subject to refund
until such time that the Company and the customer jointly determine that the
product has been delivered or no refund will be required.
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.
Basic Income (Loss) Per Share
The Company computes income (loss) per share in accordance with FASB ASC 260,
"Earnings per Share" which requires presentation of both basic and diluted
earnings per share on the face of the statement of operations. Basic loss per
share is computed by dividing net income (loss) available to common shareholders
by the weighted average number of outstanding common shares during the period.
Diluted income (loss) per share gives effect to all dilutive potential common
shares outstanding during the period. Dilutive loss per share excludes all
potential common shares if their effect is anti-dilutive.
For the period from April 18, 2014 (inception) to October 31, 2014 there were no
potentially dilutive debt or equity instruments issued or outstanding and any
such shares would have been excluded from the computation because they would
have been anti-dilutive as the Company incurred losses in these periods.
Comprehensive Income
Comprehensive income is defined as all changes in stockholders' equity
(deficit), exclusive of transactions with owners, such as capital investments.
Comprehensive income includes net income or loss, changes in certain assets and
liabilities that are reported directly in equity such as translation adjustments
on investments in foreign subsidiaries and unrealized gains (losses) on
available-for-sale securities. From our inception there were no differences
between our comprehensive loss and net loss.
Recent Accounting Pronouncements
We have reviewed all the recently issued, but not yet effective, accounting
pronouncements and we do not believe any of these pronouncements will have a
material impact on the Company other than those relating to Development Stage
Entities as discussed above.
F-8
TAPIOCA CORP.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE AUDITED FINANCIAL STATEMENTS
OCTOBER 31, 2014
NOTE 4 - LOAN FROM DIRECTOR
In support of the Company's efforts and cash requirements, it may rely on
advances from related parties until such time that the Company can support its
operations or attains adequate financing through sales of its equity or
traditional debt financing. There is no formal written commitment for continued
support by shareholders. Amounts represent advances or amounts paid in
satisfaction of liabilities. The advances are considered temporary in nature and
have not been formalized by a promissory note.
During the period from April 18, 2014 (Inception) to October 31, 2014, our sole
director has loaned to the Company $5,000.
The loan is unsecured, non-interest bearing and due on demand.
The balance due to the director was $5,000 as of October 31, 2014.
NOTE 5 - COMMON STOCK
The Company has 75,000,000, $0.001 par value shares of common stock authorized.
On October 17, 2014, the Company issued 3,500,000 shares of common stock to a
director for cash proceeds of $3,500 at $0.001 per share.
There were 3,500,000 shares of common stock issued and outstanding as of October
31, 2014.
NOTE 6 - COMMITMENTS AND CONTINGENCIES
None
NOTE 7 - INCOME TAXES
As of October 31, 2014, the Company had net operating loss carry forwards of
approximately $75 that may be available to reduce future years' taxable income
in varying amounts through 2031. Future tax benefits which may arise as a result
of these losses have not been recognized in these financial statements, as their
realization is determined not likely to occur and accordingly, the Company has
recorded a valuation allowance for the deferred tax asset relating to these tax
loss carry-forwards.
F-9
TAPIOCA CORP.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE AUDITED FINANCIAL STATEMENTS
OCTOBER 31, 2014
NOTE 7 - INCOME TAXES (CONTUNUED)
The provision for Federal income tax consists of the following:
October 31, 2014
----------------
Federal income tax benefit attributable to:
Current Operations $ 26
Less: valuation allowance (26)
--------
Net provision for Federal income taxes $ 0
========
The cumulative tax effect at the expected rate of 34% of significant items
comprising our net deferred tax amount is as follows:
October 31, 2014
----------------
Deferred tax asset attributable to:
Net operating loss carryover $ 26
Less: valuation allowance (26)
--------
Net deferred tax asset $ 0
========
Due to the change in ownership provisions of the Tax Reform Act of 1986, net
operating loss carry forwards of approximately $75 for Federal income tax
reporting purposes are subject to annual limitations. Should a change in
ownership occur net operating loss carry forwards may be limited as to use in
future years.
NOTE 8 - SUBSEQUENT EVENTS
In accordance with ASC 855-10 the Company has analyzed its operations from
October 31, 2014 to the date these financial statements were issued, November
26, 2014 and has determined that it does not have any material subsequent events
to disclose in these financial statements.
F-10
TAPIOCA CORP.
TABLE OF CONTENTS
JANUARY 31, 2015
Balance Sheet as of January 31, 2015 (Unaudited) and
October 31, 2014 (Audited) F-12
Statement of Operations for the three months period ended
January 31, 2015 (Unaudited) F-13
Statement of Cash Flows for the three months period ended
January 31, 2015 (Unaudited) F-14
Notes to the Unaudited Financial Statements F-15
F-11
TAPIOCA CORP.
BALANCE SHEET
AS OF JANUARY 31, 2015
January 31, 2015 October 31, 2014
---------------- ----------------
(Unaudited) (Audited)
ASSETS
Current Assets
Cash and cash equivalents $ 2,120 $ 1,425
-------- --------
Total Current Assets 2,120 1,425
Fixed Assets
Equipment 7,000 7,000
Accumulated Amortization 12 --
-------- --------
Total Fixed Assets 6,988 7,000
-------- --------
Total Assets $ 9,108 $ 8,425
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities
Current Liabilities
Loan from director $ 8,450 $ 5,000
-------- --------
Total Current Liabilities 8,450 5,000
-------- --------
Total Liabilities 8,450 5,000
Commitments and Contingencies
Stockholder's Equity
Common stock, par value $0.001; 75,000,000 shares authorized,
3,500,000 shares issued and outstanding 3,500 3,500
Additional paid in capital -- --
Deficit accumulated during the development stage (2,842) (75)
-------- --------
Total Stockholder's Equity 658 3,425
-------- --------
Total Liabilities and Stockholder's Equity $ 9,108 $ 8,425
======== ========
See accompanying notes to financial statements.
F-12
TAPIOCA CORP.
STATEMENT OF OPERATIONS
FOR THE THREE MONTHS PERIOD ENDED JANUARY 31, 2015
(UNAUDITED)
Three months period
January 31, 2015
----------------
REVENUES $ 1,180
Cost of Goods Sold (200)
----------
GROSS PROFIT 980
OPERATING EXPENSES
General and Administrative Expenses 3,747
----------
TOTAL OPERATING EXPENSES 3,747
----------
NET INCOME (LOSS) FROM OPERATIONS (2,767)
PROVISION FOR INCOME TAXES --
----------
NET INCOME(LOSS) $ (2,767)
==========
NET LOSS PER SHARE: BASIC AND DILUTED $ (0.00)
==========
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING:
BASIC AND DILUTED 3,500,000
==========
See accompanying notes to financial statements.
F-13
TAPIOCA CORP.
STATEMENT OF CASH FLOWS
FOR THE THREE MONTHS PERIOD ENDED JANUARY 31, 2015
(UNAUDITED)
Three months period
January 31, 2015
----------------
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income (loss) for the period $ (2,767)
Adjustments to reconcile net loss to net
cash (used in) operating activities:
Amortization 12
--------
CASH FLOWS USED IN OPERATING ACTIVITIES (2,755)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of Equipment --
--------
CASH FLOWS USED IN INVESTING ACTIVITIES --
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from sale of common stock --
Loans from director 3,450
--------
CASH FLOWS PROVIDED BY FINANCING ACTIVITIES 3,450
NET INCREASE IN CASH 695
Cash, beginning of period 1,425
--------
Cash, end of period $ 2,120
========
SUPPLEMENTAL CASH FLOW INFORMATION:
Interest paid $ 0
========
Income taxes paid $ 0
========
See accompanying notes to financial statements.
F-14
TAPIOCA CORP.
NOTES TO THE FINANCIAL STATEMENTS
JANUARY 31, 2015
(UNAUDITED)
NOTE 1 - ORGANIZATION AND NATURE OF BUSINESS
The accompanying financial statements have been prepared in accordance with
generally accepted accounting principles in the United States of America, and
pursuant to the rules and regulations of the Securities and Exchange Commission
(the "SEC") and reflect all adjustments, consisting of normal recurring
adjustments, which management believes are necessary to fairly present the
financial position, results of operations and cash flows of the Company as of
January 31, 2015
TAPIOCA CORP. ("the Company", "we", "us" or "our") was incorporated in the State
of Nevada on April 18, 2014. We are a development-stage company formed to sell
Bubble Tea from mobile stands in Romania.
NOTE 2 - GOING CONCERN
The accompanying financial statements have been prepared in conformity with
generally accepted accounting principles, which contemplate continuation of the
Company as a going concern. The Company currently has capital working capital
deficit, has not completed its efforts to establish a stabilized source of
revenues sufficient to cover operating costs over an extended period of time and
currently does not have the funding available to implement its business plan.
Accordingly, there is substantial doubt about the Company's ability to continue
as a going concern.
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 will 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.
NOTE 3 - SUMMARY OF SIGNIFCANT ACCOUNTING POLICIES
Basis of presentation
The accompanying financial statements have been prepared in accordance with
generally accepted accounting principles in the United States of America. The
Company's yearend is October 31.
Recent Accounting Pronouncements
In June 2014, the Financial Accounting Standards Board ("FASB") issued
Accounting Standards Update ("ASU") 2014-10, "Development Stage Entities". The
amendments in this update remove the definition of a development stage entity
from the Master Glossary of the ASC thereby removing the financial reporting
distinction between development stage entities and other reporting entities from
U.S. GAAP. In addition, the amendments eliminate the requirements for
development stage entities to (1) present inception-to-date information in the
statements of income, cash flows, and shareholder equity, (2) label the
financial statements as those of a development stage entity, (3) disclose a
description of the development stage activities in which the entity is engaged,
and (4) disclose in the first year in which the entity is no longer a
development stage entity that in prior years it had been in the development
stage. The amendments in this update are applied retrospectively. The adoption
of ASU 2014-10 removed the development stage entity financial reporting
requirements for the Company.
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.
F-15
TAPIOCA CORP.
NOTES TO THE FINANCIAL STATEMENTS
JANUARY 31, 2015
(UNAUDITED)
NOTE 3 - SUMMARY OF SIGNIFCANT ACCOUNTING POLICIES (CONTUNUED)
Cash and Cash Equivalents
The Company considers all highly liquid investments with the original maturities
of three months or less to be cash equivalents. The Company had $2,120 of cash
as of January 31, 2015.
Fair Value of Financial Instruments
ASC 820 "Fair Value Measurements and Disclosures" establishes a three-tier fair
value hierarchy, which prioritizes the inputs in measuring fair value. The
hierarchy prioritizes the inputs into three levels based on the extent to which
inputs used in measuring fair value are observable in the market.
These tiers include:
Level 1: defined as observable inputs such as quoted prices in active markets;
Level 2: defined as inputs other than quoted prices in active markets that are
either directly or indirectly observable; and
Level 3: defined as unobservable inputs in which little or no market data
exists, therefore requiring an entity to develop its own assumptions.
The carrying value of cash and the Company's loan from shareholder approximates
its fair value due to their short-term maturity.
Property and Equipment
Property and equipment are stated at cost and depreciated on the straight line
method over the estimated life of the asset, which is 5 years.
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 will recognize revenue in accordance with Accounting Standards
Codification No. 605, "Revenue Recognition" ("ASC-605"), ASC-605 requires that
four basic criteria must be met before revenue can be recognized: (1) persuasive
evidence of an arrangement exists; (2) delivery has occurred; (3) the selling
price is fixed and determinable; and (4) collectibility is reasonably assured.
Determination of criteria (3) and (4) are based on management's judgments
regarding the fixed nature of the selling prices of the products delivered and
the collectibility of those amounts. Provisions for discounts and rebates to
customers, estimated returns and allowances, and other adjustments are provided
for in the same period the related sales are recorded. The Company will defer
any revenue for which the product has not been delivered or is subject to refund
until such time that the Company and the customer jointly determine that the
product has been delivered or no refund will be required.
Stock-Based Compensation
Stock-based compensation is accounted for at fair value in accordance with ASC
Topic 718. To date, the Company has not adopted a stock option plan and has not
granted any stock options.
F-16
TAPIOCA CORP.
NOTES TO THE FINANCIAL STATEMENTS
JANUARY 31, 2015
(UNAUDITED)
NOTE 3 - SUMMARY OF SIGNIFCANT ACCOUNTING POLICIES (CONTUNUED)
Basic Income (Loss) Per Share
The Company computes income (loss) per share in accordance with FASB ASC 260,
"Earnings per Share" which requires presentation of both basic and diluted
earnings per share on the face of the statement of operations. Basic loss per
share is computed by dividing net income (loss) available to common shareholders
by the weighted average number of outstanding common shares during the period.
Diluted income (loss) per share gives effect to all dilutive potential common
shares outstanding during the period. Dilutive loss per share excludes all
potential common shares if their effect is anti-dilutive.
For the three months period ended January 31, 2015 there were no potentially
dilutive debt or equity instruments issued or outstanding and any such shares
would have been excluded from the computation because they would have been
anti-dilutive as the Company incurred losses in these periods.
Comprehensive Income
Comprehensive income is defined as all changes in stockholders' equity
(deficit), exclusive of transactions with owners, such as capital investments.
Comprehensive income includes net income or loss, changes in certain assets and
liabilities that are reported directly in equity such as translation adjustments
on investments in foreign subsidiaries and unrealized gains (losses) on
available-for-sale securities. From our inception there were no differences
between our comprehensive loss and net loss.
Recent Accounting Pronouncements
We have reviewed all the recently issued, but not yet effective, accounting
pronouncements and we do not believe any of these pronouncements will have a
material impact on the Company other than those relating to Development Stage
Entities as discussed above.
NOTE 4 - LOAN FROM DIRECTOR
In support of the Company's efforts and cash requirements, it may rely on
advances from related parties until such time that the Company can support its
operations or attains adequate financing through sales of its equity or
traditional debt financing. There is no formal written commitment for continued
support by shareholders. Amounts represent advances or amounts paid in
satisfaction of liabilities. The advances are considered temporary in nature and
have not been formalized by a promissory note.
On October 17, 2014, he loaned the Company $5,000 of the $25,000, and on
December 14, 2014, he loaned the Company an additional $3,450. The loan is
unsecured, non-interest bearing, non-convertible and due on demand.
The balance due to the director was $8,450 as of January 31, 2015.
NOTE 5 - COMMON STOCK
The Company has 75,000,000, $0.001 par value shares of common stock authorized.
On October 17, 2014, the Company issued 3,500,000 shares of common stock to a
director for cash proceeds of $3,500 at $0.001 per share.
There were 3,500,000 shares of common stock issued and outstanding as of January
31, 2015.
F-17
TAPIOCA CORP.
NOTES TO THE FINANCIAL STATEMENTS
JANUARY 31, 2015
(UNAUDITED)
NOTE 6 - COMMITMENTS AND CONTINGENCIES
None
NOTE 7 - INCOME TAXES
As of October 31, 2014, the Company had net operating loss carry forwards of
approximately $75 that may be available to reduce future years' taxable income
in varying amounts through 2031. As of January 31, 2015, the Company had net
operating loss carry forwards of approximately $940 that may be available to
reduce future years' taxable income in varying amounts through 2031. Future tax
benefits which may arise as a result of these losses have not been recognized in
these financial statements, as their realization is determined not likely to
occur and accordingly, the Company has recorded a valuation allowance for the
deferred tax asset relating to these tax loss carry-forwards.
The provision for Federal income tax consists of the following:
January 31, 2015
----------------
Federal income tax benefit attributable to:
Current Operations $ 941
Less: valuation allowance (941)
--------
Net provision for Federal income taxes $ 0
========
The cumulative tax effect at the expected rate of 34% of significant items
comprising our net deferred tax amount is as follows:
January 31, 2015
----------------
Deferred tax asset attributable to:
Net operating loss carryover $ 941
Less: valuation allowance (941)
--------
Net deferred tax asset $ 0
========
Due to the change in ownership provisions of the Tax Reform Act of 1986, net
operating loss carry forwards of approximately $75 for Federal income tax
reporting purposes are subject to annual limitations. Should a change in
ownership occur net operating loss carry forwards may be limited as to use in
future years.
NOTE 8 - SUBSEQUENT EVENTS
In accordance with ASC 855-10 the Company has analyzed its operations from
January 31, 2015 to the date these financial statements were issued, March 5,
2015 and has determined that it does not have any material subsequent events to
disclose in these financial statements.
F-18
[Back Page of Prospectus]
PROSPECTUS
10,000,000 SHARES OF COMMON STOCK
TAPIOCA CORP.
DEALER PROSPECTUS DELIVERY OBLIGATION
UNTIL JUNE ___, 2015, ALL DEALERS THAT EFFECT TRANSACTIONS IN THESE SECURITIES
WHETHER OR NOT PARTICIPATING IN THIS OFFERING, MAY BE REQUIRED TO DELIVER A
PROSPECTUS. THIS IS IN ADDITION TO THE DEALERS' OBLIGATION TO DELIVER A
PROSPECTUS WHEN ACTING AS UNDERWRITERS AND WITH RESPECT TO THEIR UNSOLD
ALLOTMENTS OR SUBSCRIPTIONS.
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The estimated costs (assuming all shares are sold) of this offering are as
follows:
SEC Registration Fee $ 11.62
Printing Expenses $ 88.38
Accounting Fees and Expenses $ 1,100.00
Auditor Fees and Expenses $ 3,500.00
Legal Fees and Expenses $ 3,000.00
Transfer Agent Fees $ 2,300.00
----------
TOTAL $10,000.00
==========
----------
(1) All amounts are estimates, other than the SEC's registration fee.
ITEM 14. INDEMNIFICATION OF DIRECTOR AND OFFICERS
Section 78.7502 of the Nevada Corporate Law provides, in part, that a
corporation shall have the power to indemnify any person who was or is a party
or is threatened to be made a party to any threatened, pending or completed
action, suit or proceeding (other than an action by or in the right of the
corporation) by reason of the fact that such person is or was a director,
officer, employee or agent of another corporation or other enterprise, against
expenses (including attorneys' fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by him in connection with such
action, suit or proceeding if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
corporation, and with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful.
Similar indemnity is authorized for such persons against expenses (including
attorneys' fees) actually and reasonably incurred in defense or settlement of
any threatened, pending or completed action or suit by or in the right of the
corporation, if such person acted in good faith and in a manner he reasonably
believed to be in or not opposed to the best interests of the corporation, and
provided further that (unless a court of competent jurisdiction otherwise
provides) such person shall not have been adjudged liable to the corporation.
Any such indemnification may be made only as authorized in each specific case
upon a determination by the stockholders or disinterested directors that
indemnification is proper because the indemnity has met the applicable standard
of conduct. Where an officer or a director is successful on the merits or
otherwise in the defense of any action referred to above, we must indemnify him
against the expenses which such offer or director actually or reasonably
incurred. Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or otherwise,
the registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
II-1
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES
Set forth below is information regarding the issuance and sales of securities
without registration since inception.
Set forth below is information regarding the issuance and sales of securities
without registration since inception. On October 17, 2014, Tapioca Corp. offered
and sold 3,500,000 share of common stock to our sole officer and director, Slav
Serghei, for a purchase price of $0.001 per share, for aggregate offering
proceeds of $3,500. Tapioca Corp. made the offer and sale in reliance on the
exemption from registration afforded by Section 4(a)(2) to the Securities Act of
1933, as amended (the "Securities Act"), on the basis that the securities were
offered and sold in a non-public offering to a "sophisticated investor" who had
access to registration-type information about the Company. No commission was
paid in connection with the sale of any securities an no general solicitations
were made to any person.
Exhibit
Number Description of Exhibit
------ ----------------------
3.1* Articles of Incorporation of the Registrant
3.2* Bylaws of the Registrant
5.1 Opinion re: Legality and Consent of Counsel
10.1* Lease agreement, by and between Slav Serghei and Cristi Matache,
dated September 14, 2014.
10.2# Written description of loan provided by Slav Serghei
23.1 Consent of Legal Counsel (contained in exhibit 5.1)
23.2 Consent of HARRIS & GILLESPIE CPA'S, PLLC
99.1* Subscription agreement
----------
* Filed as exhibits to the Form S-1, filed on December 18, 2014.
# Filed as Exhibit 10.2 to the form S-1 filed on April 3, 2015.
ITEM 17. UNDERTAKINGS
The undersigned Registrant hereby undertakes:
1. To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement to:
(a) Include any prospectus required by Section 10(a) (3) of the Securities Act;
(b) To reflect in the prospectus any facts or events arising after the effective
date of the registration statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate, represent a fundamental change
in the information set forth in the registration statement. Notwithstanding the
foregoing, any increase or decrease in volume of securities offered (if the
total dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated maximum
offering range may be reflected in the form of prospectus filed with the
Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume
and price represent no more than 20% change in the maximum aggregate offering
price set forth in the "Calculation of Registration Fee" table in the effective
registration statement.
(c) To include any material information with respect to the plan of distribution
not previously disclosed in the registration statement or any material change to
such information in the registration statement;
II-2
Provided however, that:
A. Paragraphs (a)(1)(i) and (a)(1)(ii) of this section do not apply if the
registration statement is on Form S-8, and the information required to be
included in a post-effective amendment by those paragraphs is contained in
reports filed with or furnished to the Commission by the registrant pursuant to
section 13 or section 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in the registration statement; and
B. Paragraphs (a)(1)(i), (a)(1)(ii) and (a)(1)(iii) of this section do not apply
if the registration statement is on Form S-3 or Form F-3 and the information
required to be included in a post-effective amendment by those paragraphs is
contained in reports filed with or furnished to the Commission by the registrant
pursuant to section 13 or section 15(d) of the Securities Exchange Act of 1934
that are incorporated by reference in the registration statement, or is
contained in a form of prospectus filed pursuant to Rule 424(b) that is part of
the registration statement.
2. That, for the purpose of determining any liability under the Securities Act
of 1933, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
3. To remove from registration, by means of a post-effective amendment, any of
the securities being registered hereby that remains unsold at the termination of
the offering.
4 That, for the purpose of determining liability of the registrant under the
Securities Act of 1933 to any purchaser in the initial distribution of the
securities: The undersigned registrant undertakes that in a primary offering of
securities of the undersigned registrant pursuant to this registration
statement, regardless of the underwriting method used to sell the securities to
the purchaser, if the securities are offered or sold to such purchaser by means
of any of the following communications, the undersigned registrant will be a
seller to the purchaser and will be considered to offer or sell such securities
to such purchaser:
i. Any preliminary prospectus or prospectus of the undersigned registrant
relating to the offering required to be filed pursuant to Rule 424;
ii. Any free writing prospectus relating to the offering prepared by or on
behalf of the undersigned registrant or used or referred to by the
undersigned registrant;
iii. The portion of any other free writing prospectus relating to the
offering containing material information about the undersigned
registrant or its securities provided by or on behalf of the
undersigned registrant; and
iv. Any other communication that is an offer in the offering made by the
undersigned registrant to the purchaser.
Insofar as indemnification for liabilities arising under the Securities Act of
1933 may be permitted to the directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act, and is,
therefore, unenforceable.
In the event that a claim for indemnification against such liabilities (other
than the payment by the registrant of expenses incurred or paid by a director,
officer, or controlling person of the registrant in the successful defense of
any action, suit or proceeding) is asserted by such director, officer, or
controlling person in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification is against public policy as expressed
in the Act, and will be governed by the final adjudication of such issue.
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For the purposes of determining liability under the Securities Act for any
purchaser, each prospectus filed pursuant to Rule 424(b) as part of a
registration statement relating to an offering, other than registration
statements relying on Rule 430B or other than prospectuses filed in reliance on
Rule 430A, shall be deemed to be part of and included in the registration
statement as of the date it is first used after effectiveness. Provided,
however, that no statement made in a registration statement or prospectus that
is part of the registration statement or made in a document incorporated or
deemed incorporated by reference into the registration statement or prospectus
that is part of the registration statement will, as to a purchaser with a time
of contract of sale prior to such first use, supersede or modify any statement
that was made in the registration statement or prospectus that was part of the
registration statement or made in any such document immediately prior to such
date of first use.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant has
duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized in the City of Romania, Country of
Bucharest on April 20, 2015.
TAPIOCA CORP.
By: /s/ Slav Serghei
--------------------------------------------
Name: SLAV SERGHEI
Title: President
(Principal Executive, Financial and
Accounting Officer)
Pursuant to the requirements of the Securities Act of 1933, this registration
statement has been signed by the following persons in the capacities and on the
dates stated.
Signature Title Date
--------- ----- ----
/s/ Slav Serghei
---------------------------- Principal Executive, Financial and April 20, 2015
SLAV SERGHEI Accounting Officer and Director
(Principal Executive, Financial and
Accounting Officer)
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