Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x
State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date: 2,120,000 common shares issued and outstanding as of September 20, 2018.
Item 1. Description of Business
Statements made in this Form 10-K that are not historical or current facts are "forward-looking statements" made pursuant to the safe harbor provisions of Section 27A of the Securities Act of 1933 (the "Act") and Section 21E of the Securities Exchange Act of 1934. These statements often can be identified by the use of terms such as "may," "will," "expect," "believe," "anticipate," "estimate," "approximate" or "continue," or the negative thereof. We intend that such forward-looking statements be subject to the safe harbors for such statements. We wish to caution readers not to place undue reliance on any such forward-looking statements, which speak only as of the date made. Any forward-looking statements represent management's best judgment as to what may occur in the future. However, forward-looking statements are subject to risks, uncertainties and important factors beyond our control that could cause actual results and events to differ materially from historical results of operations and events and those presently anticipated or projected. We disclaim any obligation subsequently to revise any forward-looking statements to reflect events or circumstances after the date of such statement or to reflect the occurrence of anticipated or unanticipated events.
Financial information contained in this report and in our financial statements is stated in United States dollars and are prepared in accordance with United States generally accepted accounting principles.
We were incorporated in the State of Nevada on May 19, 2014. We just recently started our operations. Our business is the application of various types and shapes of laser engravings onto glass billets and distribution thereof primarily in Bulgaria and neighboring countries.
Our products can be divided into three categories: 1) mass market tourist souvenirs; 2) corporate gifts, souvenirs and insignia; 3) individually designed laser engraved glass products for personal use as an element of interior design or memento. Success of our business plan will depend on the flow of tourists, business climate and economic progress of Bulgaria and the region. A downturn of tourism particularly and corporate sector in general can adversely affect our intended business.
We will distribute our laser engraved glass products in Bulgaria and neighboring countries. We plan to use various distribution channels for various types of customers. We plan to distribute mass-market souvenirs via supermarkets of large retail chains, tourist shops and kiosks; corporate clients and individual clients will be covered by our web page and targeted marketing exercises.
Unicobe Corp.s business is in applying standard and custom laser engravings on glass billets of various shapes to be sold to both mass-market consumers and individual clients. Individual customers may use either Unicobe-proposed designs or their own.
We plan that our production capacities will allow us to manufacture souvenirs, tourist-oriented products, up-market gifts and interior design items from glass based on advanced and unique designs and templates.
Unicobe Corp. has purchased two 3D Crystal Laser engraving machines from a Chinese vendor. This machine has more modern advanced functions and will serve for expediting the range of offered engraving products and increasing the quality level of engraving items. Unicobe Corp. has the ability to manufacture such original items as, for example:
Advertising or corporate glass souvenirs with brand identity of the customer;
High-end souvenir-like glass gifts and awards;
Custom designed nameplates.
However, first, we intend to launch a mass manufacture of inexpensive laser-engraved tourist souvenirs of various shapes.
Our President and Director, Anatoliy Kanev, will market our product and negotiate with potential customers and wholesale buyers. We intend to develop and maintain a database of potential corporate clients who may be interested in our products. We will follow up with these clients periodically and offer them free samples, presentations and special discounts from time to time. We plan to attend trade shows in our industry to exhibit our products with a view to find new customers.
Three main categories of our clients are:
Tourists coming to spend their vacations to Bulgaria and neighboring countries. First of all, we rely on the tourism potential of Bulgaria. In 2013, 9.2 million tourists visited Bulgaria. Tourists from Greece, Romania and Turkey comprise 40% of all persons attending the country. Tourism sector in Bulgaria constituted 13.6% of GDP, having provided for 111,856 workplaces in 2013. During the three summer months of 2013, the average amount of tourists in Bulgaria reached 1.5 million persons per month, 61% of whom came from the European Union, which, in turn, suggests serious potential solvent demand for our products. In the recent years, the average annual increment of tourists in Bulgaria has comprised 6%. When marketing our products to this segment of the market we plan to cooperate with both local retailers of tourist products (tourist shops, kiosks, tents etc.), and larger wholesalers (tourist agencies, retail chains etc.).
Individual customers will address us in order to get laser engravings on glass based on their individual preferences or designs or designs developed by us.
Corporate clients, representing large, medium and small-scale businesses, various associations etc. This is a rather substantial segment of the market, which grows and regularly generates demand for various corporate gifts, souvenirs; items that promote brand awareness etc.
We know that there are a number of obstacles to entering the market of laser engravings on glass objects and the competition is rather high. There are several companies (Smartarts and Laser D) that offer similar services and products and we will have to compete with them. We see the main competitive advantage of our competitors in the established customer base and marketing outlets. But review of products of our competitors shows that our products are more exclusive, our assortment of products is wider, delivery times are faster, quality is better, approaches to business are more flexible and, very importantly, our equipment is more modern and efficient than that of the competitors, which gives us good chances for occupying a considerable market niche. Attracting new customers will be also supported by a client-oriented approach of Unicobe Corp., accentuating practical mutually beneficial cooperation with all the clients.
One of our biggest competitive advantages is that our engraving machines are modern and efficient. This means that we are able to produce more products at the same period of time using fewer resources such as electricity, accompanying raw materials and consumables for the machine. The modern machine that is at our disposal also provides a wider range of creative possibilities at creating laser-engraved products, therefore allowing for another serious competitive advantage. Faster delivery time by Unicobe Corp., first of all, means the way we see our interaction with individual clients. One of the business operations of Unicobe Corp. is the selling of glass products manufactured according to the unique designs submitted by individual clients dedicated to special occasions, events, memorable moments etc.
Some of the competitive factors that may affect our business are as follows:
1. Number of Competitors Increase: other companies may follow our business model of distributing laser engraved glass billets, which will reduce our competitive edge.
2. Price: Our competitors may be selling similar product at a lower price forcing us to lower our prices as well and possibly sell our product at loss.
3. Substitute Products: competitors may substitute laser engraved glass billets with similar products from plastic.
The sales strategy will be based on communicating that owning a product by Unicobe Corp., either a mass-market souvenir or a high-end customs-made model, is a source of pride and appreciation. Memorable products by Unicobe Corp. attracts attention, as a piece of interior design always staying in sight, be it an individual customer or large corporate client or a tourist. Our products may also be considered as a long-term investment since the life cycle of our products is rather lengthy and the design stays up-to-date almost infinitely. Especially, given the fact that we plan to affix every product, including those distributed via retail points, with a business card with information about Unicobe Corp., information about the product and contact details. And in order to enhance the feeling of uniqueness of our products, we may also indicate a unique reference number on the business card to accompany each Unicobe Corp. product.
We plan to distribute our products via several distribution channels simultaneously. As regards to the tourism segment, we plan to cooperate with retailers (kiosks, tourist souvenir shops etc.) and wholesalers (supermarkets, large retail chains, tourism agencies).
Individual and corporate clients will be brought in, first of all, thanks to our prospective webpage, advertising in crowded areas and online promotion of our Company. In case of large corporate clients we also plan to focus on personal contacts with PR departments of large companies, presentations of our products, distribution of promotional leaflets, free samples and other measures to facilitate brand awareness of Unicobe Corp.
Among others, we also intend to use such marketing strategies as web advertisements, direct mailing, and phone calls to acquire potential customers. We plan to develop a website to market and display our products. As of the date of this report we have already purchased a website (www.unicobecorp.com). Our website describes our product in detail, show our contact information, and include some general information and pictures of our laser engraved products, available designs, etc. We intend to attract traffic to our website by a variety of online marketing tactics such as registering with top search engines using selected key words and meta-tags, and utilizing link and banner exchange options. We intend to promote our website by displaying it on our promotion materials.
We also plan to attend some trade shows and souvenir exhibitions to show our products with a view to find new customers. We will intend to continue our marketing efforts during the life of our operations. There is no guarantee that we will be able to attract and more importantly retain enough customers to justify our expenditures. If we are unable to generate a significant amount of revenue and to successfully protect ourselves against those risks, then it would materially affect our financial condition and our business could be harmed.
Description of property
The Company has signed a Rental Agreement dated April 28, 2017 with Elica Valentinova for one-year term with the opportunity of expansion. The monthly rental fee is $150. The Company has reentered a rental agreement for a $230 monthly fee since August 1, 2017 till September 1, 2018.
We do not maintain any insurance and do not intend to maintain insurance in the future. Because we do not have any insurance, if we are made a party of a products liability action, we may not have sufficient funds to defend the litigation. If that occurs a judgment could be rendered against us that could cause us to cease operations.
Research and Development Expenditures
We have not incurred any research expenditures since our incorporation.
Bankruptcy or Similar Proceedings
There has been no bankruptcy, receivership or similar proceeding.
Employees; Identification of Certain Significant Employees
We currently have no employees, other than our sole officer and director Anatoliy Kanev.
Item 1A. Risk Factors
Not applicable to smaller reporting companies.
Item 1B. Unresolved Staff Comments
Not applicable to smaller reporting companies.
Item 2. Description of Property
We do not own any real estate or other properties.
Item 3. Legal Proceedings
We know of no legal proceedings to which we are a party or to which any of our property is the subject which are pending, threatened or contemplated or any unsatisfied judgments against us.
Item 4. Mine Safety Disclosures
Item 5. Market for Common Equity and Related Stockholder Matters
There is no established public market for our common stock.
After the effective date of the registration statement, we intend to try to identify a market maker to file an application with the Financial Industry Regulatory Authority, Inc., or FINRA, to have our common stock quoted on the Over-the-Counter Bulletin Board. We will have to satisfy certain criteria in order for our application to be accepted. We do not currently have a market maker that is willing to participate in this application process, and even if we identify a market maker, there can be no assurance as to whether we will meet the requisite criteria or that our application will be accepted. Our common stock may never be quoted on the Over-the-Counter Bulletin Board, or, even if quoted, a liquid or viable market may not materialize. There can be no assurance that an active trading market for our shares will develop, or, if developed, that it will be sustained.
We have issued 2,120,000 shares of our common stock since our inception on May 19, 2014.
We have 9 shareholders of record of our common stock as of the date of this report.
Securities Authorized for Issuance under Equity Compensation Plans
We have not established any compensation plans under which equity securities are authorized for issuance.
No cash dividends were paid on our shares of common stock during the fiscal year ended June 30, 2018 and June 30, 2017. We have not paid any cash dividends since May 19, 2014 (inception) and do not foresee declaring any cash dividends on our common stock in the foreseeable future.
Recent Sales of Unregistered Securities
The Company has 75,000,000, $0.001 par value shares of common stock authorized.
In January 2017, the Company rescinded the offering of 320,000 shares sold to certain shareholders during March to June 2016. The shares were returned by twenty investors, and the Company refunded $12,800 invested. The Company rescinded the offering to these shareholders due to the discovery of forged identification provided by the investors.
During May 2018, the Company sold a total of 45,000 common shares, which have not yet been issued, for cash contribution of $1,800 at $0.04 per share.
During June 2018, the Company sold a total of 112,500 common shares, which have not yet been issued, for cash contribution of $4,500 at $0.04 per share.
There were 2,120,000 shares of common stock issued and outstanding as of June 30, 2018.
Other Stockholder Matters
Item 6. Selected Financial Data
Not applicable to smaller reporting companies.
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations
This annual report and other reports filed by Unicobe Corp. (we, us, our, or the Company), from time to time contain or may contain forward-looking statements and information that are based upon beliefs of, and information currently available to, the Companys management as well as estimates and assumptions made by Companys management. Readers are cautioned not to place undue reliance on these forward-looking statements, which are only predictions and speak only as of the date hereof. When used in the filings, the words anticipate, believe, estimate, expect, future, intend, plan, or the negative of these terms and similar expressions as they relate to the Company or the Companys management identify forward-looking statements. Such statements reflect the current view of the Company with respect to future events and are subject to risks, uncertainties, assumptions, and other factors. Should one or more of these risks or uncertainties materialize, or should the underlying assumptions prove incorrect, actual results may differ significantly from those anticipated, believed, estimated, expected, intended, or planned.
Although the Company believes that the expectations reflected in the forward-looking statements are reasonable, the Company cannot guarantee future results, levels of activity, performance, or achievements. Except as required by applicable law, including the securities laws of the United States, the Company does not intend to update any of the forward-looking statements to conform these statements to actual results.
Our financial statements are prepared in accordance with accounting principles generally accepted in the United States (GAAP). These accounting principles require us to make certain estimates, judgments, and assumptions. We believe that the estimates, judgments, and assumptions upon which we rely are reasonable based upon information available to us at the time that these estimates, judgments, and assumptions are made. These estimates, judgments, and assumptions can affect the reported amounts of assets and liabilities as of the date of the financial statements as well as the reported amounts of revenues and expenses during the periods presented. Our financial statements would be affected to the extent there are material differences between these estimates.
Managements Discussion and Analysis of Financial Condition and Results of Operations
Results of Operations for the years ended June 30, 2018 and June 30, 2017:
Revenue and cost of goods sold
For the years ended June 30, 2018 and June 30, 2017 the Company generated total revenue of $20,189 and $35,426 respectively, from selling laser engravings products to its customers. Decrease in sales is due to change in customers demand. The cost of goods sold for the years ended June 30, 2018 and June 30, 2017 was $4,642 and $3,763 respectively, which represent the cost of raw materials and overhead. Such decrease in gross profit is due to reduction in the number of orders and sales.
Total operating expenses for the years ended June 30, 2018 and June 30, 2017, were $20,577 and $26,628, respectively. The operating expenses included accounting fees of $9,750 for the year ended June 30, 2018 and $8,750 for the year ended June 30, 2017; bank charges of $773 for the year ended June 30, 2018 and $1,917 for the year ended June 30, 2017; depreciation expense of $1,345 for the year ended June 30, 2018 and $1,344 for the year ended June 30, 2017; regulatory filings of $1,360 for the year ended June 30, 2018 and $6,200 for the year ended June 30, 2017; computer and internet expenses of $19 for the year ended June 30, 2018 and $15 for the year ended June 30, 2017; professional fees of $650 for the year ended June 30, 2018 and $0 for the year ended June 30, 2017; legal fees of $4,000 for the year ended June 30, 2018 and $6,500 for the year ended June 30, 2017 and rent expense of $2,680 for the year ended June 30, 2018 and $1,902 for the year ended June 30, 2017.
The net loss/income for the year ended June 30, 2018 and June 30, 2017 was loss of $5,030 and income of $5,035, respectively.
Liquidity and Capital Resources and Cash Requirements
At June 30, 2018, the Company had cash of $3,448 ($1,555 as of June 30, 2017). Furthermore, the Company had a working capital deficit of $11,310 ($13,925 as of June 30, 2017). The decrease in working capital deficit is due to decrease in operating expenses.
During the year ended June 30, 2018, the Company used $4,407 of cash in operating activities due to its net loss and decrease in raw material inventory of $4,642, decrease in prepaid rent of $1,530, increase in accounts receivable of $6,894 and depreciation of $1,345.
During the year ended June 30, 2018, the Company used no cash in investing activities.
During the year ended June 30, 2018, the Company generated $6,300 cash in financing due to common stock proceeds recorded in liability for unissued shares.
During the year ended June 30, 2017, the Company used $1,398 of cash in operating activities due to its net income and increase in raw material inventory of $4,428, increase in prepaid rent of $2,150, decrease in deferred revenue of $1,200 and depreciation of $1,345.
During the year ended June 30, 2017, the Company used no cash in investing activities.
During the year ended June 30, 2017, the Company generated $990 cash in financing due to loan from director and return of common stock proceeds.
Anatoliy Kanev, our sole officer and director, will be devoting approximately 75% of his time to our operations. Once we expand operations, and are able to attract more and more customers to buy our product, Mr. Kanev has agreed to commit more time as required. Because Mr. Kanev 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 which could result in a lack of revenues.
There is no assurance that our company will be able to obtain further funds required for our continued working capital requirements.
There is substantial doubt about our ability to continue as a going concern as the continuation of our business is dependent upon public offering and achieving a profitable level of operations. The issuance of additional equity securities by us could result in a significant dilution in the equity interests of our current stockholders. Obtaining commercial loans, assuming those loans would be available, will increase our liabilities and future cash commitments.
Due to the uncertainty of our ability to meet our current operating and capital expenses, in their report on our audited financial statements, our independent auditors included an explanatory paragraph regarding substantial doubt about our ability to continue as a going concern. Our financial statements have been prepared assuming that we will continue as a going concern, which contemplates that we will realize our assets and satisfy our liabilities and commitments in the ordinary course of business.
Critical Accounting Policies
The Company recognizes revenue in accordance with Accounting Standards Codification (ASC) 606, Revenue from Contracts with Customers. The core principle of ASC 606 is that an entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. An entity recognizes revenue in accordance with that core principle by applying the following steps: Step 1: Identify the contract(s) with a customer Step 2: Identify the performance obligations in the contract Step 3: Determine the transaction price Step 4: Allocate the transaction price to the performance obligations in the contract Step 5: Recognize revenue when (or as) the entity satisfies a performance obligation. Our customers have a right of return of the products for one month from the invoice date.
Off-Balance Sheet Arrangements
The Company does not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on the Company's financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.
Item 7A. Quantitative and Qualitative Disclosures about Market Risk
Not applicable to smaller reporting companies.
Item 8. Financial Statements and Supplementary Data