As filed on February 10, 2012, Commission File Number 333-172850
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SECURITIES ACT OF 1933
Unique Underwriters, Inc.
(Exact name of Registration as specified in its Charter)
UNIQUE UNDERWRITERS, INC.
5650 Colleyville Blvd,
Colleyville, Texas 76034
(Address, including zip code, and telephone number, including area code,
of registrant's principal executive Offices)
McMullen Associates LLC, Attorneys at Law
10701 McMullen Creek Parkway,
Charlotte, NC 28226 USA
Tel. No. 704.541.2649
Toll Free: 800.251.1525
Fax No. 704.541.4751
Approximate date of proposed sale to the public: From time to time after the effectiveness of the registration statement.
If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act of 1933, please 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 amendment filed pursuant to Rule 462(c) under the Securities Act of 1933, 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 amendment filed pursuant to Rule 462(d) under the Securities Act of 1933, 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 small reporting company. See the definition of large accelerated filer, accelerated filer,” and “small reporting company”:
(Do not check if a smaller reporting company)
CALCULATION OF REGISTRATION FEE
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 SAID SECTION 8(a), MAY DETERMINE.
The information contained in this preliminary prospectus is not complete and may be changed. These securities may not be sold until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.
Subject to completion February 10, 2012
UNIQUE UNDERWRITERS, INC.
The prospectus relate to the resale by certain selling security holders of Unique Underwriters, Inc. of up to 10,760,608shares of our common stock in connection with the resale of up to 10,760,608shares of common stock issued and outstanding; and upon the effectiveness of this prospectus, the selling security holders will sell at a price per share of $0.15 per share until our shares are quoted on the OTC Bulletin Board and thereafter at prevailing market prices or privately negotiated prices. Each of the selling stockholders may be deemed to be an "underwriter"; as such term is defined in the Securities Act of 1933. The selling stockholders may sell the shares from time to time at the prevailing market price or in negotiated transactions.
There has been no market for our securities and a public market may not develop, or, if any market does develop, it may not be sustained. As of December29, 2011, we had 75,760,608 shares of common stock that have been issued and outstanding. Our common stock is not traded on any exchange or in the over-the-counter market. After the date of this prospectus, we expect to have an application filed with the Financial Industry Regulatory Authority for our common stock to eligible for trading on the OTC Bulletin Board. Until our common stock becomes eligible for trading on the OTC Bulletin Board, the selling security holders will be offering our shares of common stock at a fixed price of $0.15 per common share. The company has filed the application Form 211 with Spartan Securities Group, LTD 100 2nd Avenue South, 300N St Petersburg, Florida 33701 and FINRA has responded by only asking for S-1 effective date.
OUR BUSINESS IS SUBJECT TO MANY RISKS AND AN INVESTMENT IN OUR SHARES OF COMMON STOCK WILL ALSO INVOLVE A HIGH DEGREE OF RISK. YOU SHOULD CAREFULLY CONSIDER THE FACTORS DESCRIBED UNDER THE HEADING RISK FACTORS BEGINNING ON PAGE 3 BEFORE INVESTING IN OUR SHARES OF COMMON STOCK.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
The information in this prospectus is not complete and may be changed. This prospectus is included in the registration statement that was filed by us with the Securities and Exchange Commission. The selling stockholders may not sell these securities until the registration statement becomes effective. This prospectus is not an offer to sell these securities and is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.
The date of this prospectus February 10, 2012
The following table of contents has been designed to help you find information contained in this prospectus. We encourage you to read the entire prospectus.
The following summary highlights selected information contained in this prospectus. This summary does not contain all the information you should consider before investing in the securities. Before making an investment decision, you should read the entire prospectus carefully, including the "Risk Factors" section, the Financial Statements and the Notes to the Financial Statements.
About Unique Underwriters, Inc.
Unique Underwriters, Inc. (the Company, we, us, our or UUI) was incorporated in the State of Texas on July 28, 2009. We are a national, independent, insurance sales and marketing company specializing in mortgage protection insurance, final expense insurance policies, annuities and all aspects of life insurance sales.
After its inception, on July 28, 2009, Unique Underwriters, Inc. spent the next 10 months of business as a development stage company, and in June 2010, UUI began generating revenues through commissions from insurance policies sold by our growing base of independent agents and selling leads and membership packages to the independent agents, however, has not yet made a profit. We are now a growth stage company, and as such, UUI has a limited history of operations.
We currently have 10 full-time employees and 4000 registered independent agents of which 606 are active. An active agent is defined by UUI as having sold insurance policies during the past six (6) months. The insurance carriers that UUI represents consider agents active until such time as the carrier terminates their independent agreement with the agent. We want to obtain additional financing to expedite the growth process. We plan to raise the capital necessary to fund our business through the sale of equity securities. We are currently principally engaged in the recruitment of independent agents who sell term, universal life, and whole life insurance policies, none of which are originated by Unique Underwriters or sold directly by Unique Underwriters, Inc.
Our agents are independent contractors, who are contractually obligated to sell insurance policies for UUI under an agency agreement. The agency agreement is executed by and between UUI and the independent agent upon the commencement of the relationship, and hence are not employees of UUI. Recruiting of independent agents is accomplished through advertisements on websites such as Career Builder, Monster, Craigslist, Facebook, and utilizing direct email, direct mail, and regional opportunity meetings. Each independent agent may recruit sub-agents to build their agencys business. This type of recruiting is normally accomplished through personal acquaintances and referrals. The approximate annual turnover in agents equates to 10%. Turnover is caused by a variety of reasons including but not limited to sluggish economy, relocation, inability to sell, inability to recruit sub-agents, insufficient leads in a geographic region and competitive offers from similar independent marketing organizations.
UUI generates revenue from three (3) sources: commissions from insurance carriers as a result of policies sold by our network of independent agents, renting leads to our network of independent agents, and the sales of annual membership packages to our agents that provide various levels of access to leads, training, personalized website, mentoring, customer support, company events and conventions, as well as a profit sharing plan and health plan benefits.
Commission agreements with the insurance carriers ensure that UUI shares in the commission on each policy sold by an independent, direct agent or a sub-agent. Commission overrides s received from the sales of insurance policies represent 59% of UUI total revenue.
Leads are crucial to the success of the agent. To maintain its competitive edge, UUI has established agreements to rent leads for its agent network from Senior Advisor Services (SAS) for final expense insurance leads and Equita Mortgage Group (Equita) for mortgage protection insurance leads. The information acquired from these sources is used to create direct mail campaigns with a return response card. Leads may be rented multiple times at decreasing rates due to the leads age and number of times it has been rented. Lead rental revenue from agents represents 36% of UUI total revenue. Lead Station is a technology licensed to UUI from Equita. Mr. Wolfe, the former President and Chief Marketing Officer of Equita, receives no financial benefit from the purchase of these leads, nor does UUI receive a discounted price based on his previous relationship with Equita. Mr. Wolfe does not have an equity ownership in Equita.
The campaigns are outsourced to Americas Recommended Mailers Inc. (ARM). UUI has an agreement with ARM to print and mail from their facility. Completed response cards are uploaded into a database (Lead Station) for rental by the network of agents.
Membership Plans were introduced in June of 2011 as a method of retaining agents and providing additional mentoring, training, healthcare, incentive-based profit sharing and web services at a reasonable cost for the agent. Currently there are five (5) levels of membership are available: basic, executive, entrepreneur, partner and founder. To date, 205 memberships have been sold representing 5% of current total revenue. This early success suggests that the Membership Plans provide another viable revenue stream for UUI.
The products described below are the primary commissionable insurance products that UUI agents market and offer. These products are underwritten by various third party insurance underwriters and UUI is not currently developing its own in-house products. The percentages mentioned below are intended to indicate the approximate portion of insurance commission-related revenues being generated by each of the products
UUI agents sell mortgage protection insurance in the form of term, universal life or whole life policies, which comprises the majority (84%) of our total revenues from insurance policy sales. These are forms of life insurance that will cover the cost of the policyholders mortgage in the event of policyholders death. Life insurance can be used for a variety of purposes, such as: providing for your spouse and children, paying off your mortgage and other debts, transferring wealth or business interests, accumulating cash on a tax advantaged basis, achieving estate tax liquidity, saving money for college expenses or retirement or other life events. Disability Insurance pays the insured a monthly benefit if he/she becomes disabled, as a result of an accident or disease, and cannot perform the duties of their own job.
Final expense insurance, approximately 7% of total revenue from insurance commissions, is an insurance policy that pays for funeral-related expenses and burial when the named insured dies. It is no different than a traditional life insurance policy with a smaller monetary value.
Annuities, approximately 2% of total revenue from insurance commissions, provide tax-deferred growth, liquidity, and income options, plus a death benefit that may bypass the costs and delays of probate. UUI offers an array of annuity products including fixed indexed annuities that are based on the performance of an Index.
The Use of Proceeds
The Company will not receive any proceeds from the sale of the shares by the selling security holder. All proceeds from the sale of the shares offered hereby will be for the account of the selling security holder, as described below in the sections entitled "Selling Security Holders" and "Plan of Distribution."
We are registering a total of 10,760,608shares for selling security holders common stock under the investment agreement. All of the proceeds from the sale of the shares of common stock offered herein will be received by the selling security holder.
With the exception of any brokerage fees and commission which are the obligation of the selling security holder, we are responsible for the fees, costs and expenses of this offering which are estimated to be $50,000 inclusive of our legal and accounting fees, printing costs and filing and other miscellaneous fees and expenses.
There are numerous and varied risks that may prevent us from achieving our goals. If any of these risks actually occur, our business, financial condition or results of operation may be materially adversely affected. In such case, the trading price of our Common Stock could decline and investors could lose all or part of their investment.
Risks Related to the Companys Business and Industry
INVESTING IN OUR SECURITIES INVOLVES A HIGH DEGREE OF RISK. IN ADDITION TO THE OTHER INFORMATION CONTAINED IN THIS PROSPECTUS, PROSPECTIVE PURCHASERS OF THE SECURITIES OFFERED HEREBY SHOULD CONSIDER CAREFULLY THE FOLLOWING FACTORS IN EVALUATING THE COMPANY AND ITS BUSINESS.
IF ANY OF THE FOLLOWING RISKS OCCUR, OUR BUSINESS, OPERATING RESULTS AND FINANCIAL CONDITION COULD BE SERIOUSLY HARMED. THE TRADING PRICE OF OUR SHARES OF COMMON STOCK COULD DECLINE DUE TO ANY OF THESE RISKS, AND YOU MAY LOSE ALL OR PART OF YOUR INVESTMENT.
THE SECURITIES WE ARE OFFERING THROUGH THIS PROSPECTUS ARE SPECULATIVE BY NATURE AND INVOLVE AN EXTREMELY HIGH DEGREE OF RISK AND SHOULD BE PURCHASED ONLY BY PERSONS WHO CAN AFFORD TO LOSE THEIR ENTIRE INVESTMENT. THE FOLLOWING RISK FACTORS COULD CAUSE OUR ACTUAL FUTURE OPERATING RESULTS TO DIFFER MATERIALLY FROM THOSE EXPRESSED ON BEHALF OF US. IN ASSESSING THESE RISKS, WE SUGGEST THAT YOU ALSO REFER TO OTHER INFORMATION CONTAINED IN THIS PROSPECTUS, INCLUDING OUR FINANCIAL STATEMENTS AND RELATED NOTES.
Risks related to the Companys Business and this Offering
THE COMPANY HAS LIMITED OPERATING HISTORY UPON WHICH WE EVALUATE OUR BUSINESS AND PROSPECTS. WE MAY NOT BE SUCCESSFUL IN OUR EFFORTS TO GROW OUR BUSINESS AND TO EARN INCREASED REVENUES. WE HAD ACCUMULATED DEFICIT OF $879,390 AS OF JUNE 30, 2011, AND HAD NET LOSSES OF $784,774 FOR THE YEAR ENDED JUNE 30, 2011. AN INVESTMENT IN OUR SECURITIES REPRESENTS SIGNIFICANT RISK AND YOU MAY LOSE ALL OR PART YOUR ENTIRE INVESTMENT.
We have a limited history of operations and we may not be successful in our efforts to grow our business and to earn revenues. Our business and prospects must be considered in light of the risks, expenses and difficulties frequently encountered by companies in their early stage of development, particularly companies providing services to a rapidly evolving market such as educational and digital materials. As a result, management may be unable to adjust its spending in a timely manner to compensate for any unexpected revenue shortfall. This inability could cause net losses in a given period to be greater than expected. An investment in our securities represents significant risk and you may lose all or part your entire investment.
OUR OPERATING RESULTS WILL BE VOLATILE AND DIFFICULT TO PREDICT, WHICH MAY CAUSE A SIGNIFICANT DECLINE IN THE MARKET PRICE OF OUR COMMON STOCK.
Management expects both quarterly and annual operating results to fluctuate significantly in the future because the operating results will be volatile and difficult to predict. If this occurs, the trading price of our common stock may decline significantly.
A number of factors will cause gross margins to fluctuate in future periods. Factors that may harm our business or cause our operating results to fluctuate include the following: the inability to obtain new customers at reasonable cost; the ability of competitors to offer new or enhanced services or products; price competition; the failure to develop marketing relationships with key business partners; increases in our marketing and advertising costs; increased labor costs that can affect demand for educational materials; the amount and timing of operating costs and capital expenditures relating to expansion of operations; a change to or changes to government regulations; a general economic slowdown. Any change in one or more of these factors could reduce our ability to earn and grow revenue in future periods.
WE ARE HEAVILY RELIANT ON OUR RECRUITMENT OF INDEPENDENT AGENTS BOTH TO MARKET THE INSURANCE PRODUCTS AND TO PURCHASE LEADS FROM US. THE LOSS OF OUR INDEPENDENT AGENTS COULD HAVE SIGNIFICANT MATERIAL ADVERSE EFFECT ON THE COMPANY.
We rely completely on our recruitment of independent agents both to market the insurance products that we have contracted with third party carriers to sell and to purchase leads from us. The percentage of revenue earned by the sale of insurance products by our agents is equal to 59% of our total revenue. The percentage of revenue earned by the sale of our leads is equal to 36% of our total revenue and the remaining 5% is composed of membership fees and Area Lead Request deposits (ALRD). The sale of insurance products and leads from these independent agents represents a majority of our revenues and a significant decrease in these revenues would be materially adverse to us.
WE HAVE INCURRED LOSSES FROM OPERATIONS AND LIMITED CASH, WHICH RAISES SUBSTANTIAL DOUBT AS TO WHETHER WE CAN CONTINUE AS A GOING CONCERN.
The Company has suffered recurring losses from operations since inception. In addition, the Company has yet to generate an internal cash flow from its business operations. These factors raise substantial doubt as to the ability of the Company to continue as a going concern. The Companys independent registered accounting firm has express substantial doubt in its report about our ability to continue as a going concern. If adequate funds are not available, we may be required to curtail operations or to obtain funds by entering into collaboration agreements on unattractive terms. As of June 30, 2011, we had accumulated deficit of $879,390, and had net losses of $784,774 for the year ended June 30, 2011.We currently have neither sufficient cash for continued business operations, nor have sufficient capital on hand to meet our working capital requirements for the next twelve months.
Managements plans with regard to these matters encompass the following actions: 1) obtain funding from new investors to alleviate the Companys working deficiency, and 2) implement a plan to generate additional sales. The Companys continued existence is dependent upon its ability to resolve liquidity. However, the outcome of managements plans cannot be ascertained with any degree of certainty. The accompanying financial statements do not include any adjustments that might result from the outcome of these risks and uncertainties
Risks Associated with Management and Control Persons
THE COMPANY IS GOVERNED BY MR. SAMUEL WOLFE, CHIEF EXECUTIVE OFFICER, PRESIDENT AND DIRECTOR, AND MR. RALPH SIMPSON, CHIEF OPERATING OFFICER, CHAIRMAN, FOUNDER AND DIRECTOR, AND, AS SUCH, THERE MAY BE SIGNIFICANT RISK TO THE COMPANY FROM A CORPORATE GOVERNANCE PERSPECTIVE.
Mr. Samuel Wolfe, the Chief Executive Officer, President and Director, and Mr. Ralph Simpson, the Chief Operating Officer, Chairman, Founder and Director, make all major strategic and operating decisions, such as the approval of related party transactions, the compensation of Executive Officers, and the oversight of the accounting function. There will be no segregation of executive duties and there may not be effective disclosure and accounting controls to comply with applicable laws and regulations, which could result in fines, penalties and assessments against us. Accordingly, the inherent controls that arise from the segregation of executive duties may not prevail. In addition, Mr. Samuel Wolfe and Mr. Ralph Simpson will exercise full control over all matters that typically require the approval of a Board of Directors. Mr. Wolfe and Mr. Simpson are not subject to the review and approval of a Board of Directors and, as such, there may be a significant risk to the Company
Mr. Wolfe and Mr. Simpson exercises control over all matters requiring shareholder approval including the election of directors and the approval of significant corporate transactions. We have not voluntarily implemented various corporate governance measures, in the absence of which, shareholders may have more limited protections against the transactions implemented by Mr. Wolfe and Mr. Simpson.
THE COMPANY IS HEAVILY RELIANT ON MR. SAMUEL WOLFE, CHIEF EXECUTIVE OFFICER, PRESIDENT AND DIRECTOR, AND MR. RALPH SIMPSON, CHIEF OPERATING OFFICER, CHAIRMAN, FOUNDER AND DIRECTOR, AND, AS SUCH, THE LOSS OF THEIRSERVICES COULD HAVE SIGNIFICANT MATERIAL ADVERSE EFFECT ON THE COMPANY.
The Company is heavily dependent on the efforts of Mr. Samuel Wolfe, Chief Executive Officer, President and Director, and Mr. Ralph Simpson, Chief Operating Officer, Chairman, Founder and Director. The loss of their services could have a material adverse effect on the Company. The Company currently does not maintain key man life insurance on either individual. Both Mr. Wolfe and Mr. Simpson have experience and past expertise in the insurance industry. There can be no assurance that a suitable replacement could be found for either, or both, individuals upon retirement, resignation, inability to act on our behalf, or death.
Risks related to the Industry
THE INSURANCE INDUSTRY IS HIGHLY COMPETITIVE AND IS CHARACTERIZED BY LOW GROSS PROFIT MARGINS AND FIXED COSTS, A MINOR SHORTFALL FROM EXPECTED REVENUE COULD AFFECT THE DEMAND FOR OUR INSURANCE PRODUCTS, HAVE A SIGNIFICANT IMPACT ON OUR ABILITY TO GENERATE REVENUE, AND POSSIBLY CAUSE OUR BUSINESS TO FAIL.
The insurance industry is highly competitive and is characterized by a large number of competitors ranging from small to large companies with substantial resources. Many of our potential competitors have substantially larger customer bases, greater name recognition, greater reputation, and significantly greater financial and marketing resources than we do. In the future, aggressive marketing tactics implemented by our competitors could impact our limited financial resources and adversely affect our ability to compete in these markets.
We feel that our current and anticipated principal competitors are the following: AmeriLife, BayPlanning, Inc., EPIC Life Insurance Company, Consolidated Underwriters, Inc., ABL Insurance Services, Inc., National Agents Alliance, Insurance Wholesalers, as well as Life & Annuity Masters.
Price competition exists in the insurance business. Price decreases within the industry could adversely affect our operations. There are many insurance companies. Deeply discounted prices by a competitor could result in lower revenues for the entire industry, negatively affecting demand for our insurance products. A shortfall from expected revenue levels would have a significant impact on our potential to generate revenue and possibly cause our business to fail.
REGULATORY CHANGES COULD HAVE SIGNIFICANT MATERIAL ADVERSE EFFECTS ON THE COMPANY.
The insurance industry is heavily regulated. With changing economic and political environments regulations governing the insurance industry can change drastically. Regulatory changes could significantly impact our industry and cause significant material adverse effects on the company.
We are regulated under the Texas Insurance Department to be in full compliance with all laws and regulations. Should the insurance department change their acceptance of a particular carrier in one of our states in which our agents operate it could limit their production. However, they would be able to work in another state that was available as long as they obtained the necessary nonresident license. We current have active Life, Accident, and Health insurance licenses.
AN INVESTMENT IN OUR SECURITIES REPRESENTS SIGNIFICANT SEASONAL AND CYCLICAL RISK AND YOU MAY LOSE ALL OR PART OF YOUR ENTIRE INVESTMENT.
The Company did not start realizing true revenue generating until the last month of our first fiscal year. The material risk is in the cyclical housing market itself as more houses are typically sold from April to October time frame, thus resulting in a greater need for mortgage protection insurance during that time period.
Risks related to the Ownership of the Companys Securities and Risks related to this Offering
THE SALE OF OUR COMMON STOCK COULD CAUSE THE PRICE OF OUR COMMON STOCK TO DECLINE. THIS MAY RESULT IN SUBSTANTIAL LOSSES TO INVESTORS, IF INVESTORS ARE UNABLE TO SELL THEIR SHARES AT OR ABOVE THEIR PURCHASE PRICE.
A sale of shares under this offering at any given time could cause the trading price of our common stock to decline. The sale of our common stock under this offering could make it more difficult for us to sell equity securities in the future at a time and at a price that we might not otherwise want to affect sales.
THE TRADING PRICE OF OUR COMMON STOCK MAY DECREASE DUE TO FACTORS BEYOND OUR CONTROL. THESE FACTORS MAY RESULT IN SUBSTANTIAL LOSSES TO INVESTORS IF INVESTORS ARE UNABLE TO SELL THEIR SHARES AT OR ABOVE THEIR PURCHASE PRICE.
The trading price of our common stock is subject to significant fluctuations due to a number of factors, including:
* The status as a growth company with a limited operating history
* General and industry-specific economic conditions
* Actual or anticipated fluctuations in our operating results
* Our capital commitments
* The loss of any of our key management personnel
The sale or attempted sale of a large amount of common stock into the market may also have a significant impact on the trading price of our common stock.
Many of these factors are beyond our control and may decrease the market price of our common stock, regardless of our operating performance. In the past, securities class action litigation has often been brought against companies that experience volatility in the market price of their securities. Whether or not meritorious, litigation brought against us could result in substantial costs, divert managements attention and resources and harm our financial condition and results of operations.
WE DO NOT ANTICIPATE PAYING ANY DIVIDENDS IN THE FORESEEABLE FUTURE, WHICH MAY REDUCE THE RETURN ON YOUR INVESTMENT IN OUR COMMON STOCK.
To date, the Company has not paid any cash dividends on its Common Stock and does not anticipate paying any such dividends in the foreseeable future. Payment of future dividends will depend on earnings and the capital requirements of the Company, and the Companys debt facilities and other factors considered appropriate by the Company. We cannot guarantee that we will, at any time, generate sufficient profits or surplus cash that would be available for distribution as a dividend to the holders of our common stock. Therefore, any return on your investment would derive from an increase in the price of our stock, which may or may not occur.
WE MAY RAISE ADDITIONAL CAPITAL THROUGH A SECURITIES OFFERING THAT COULD DILUTE YOUR OWNERSHIP INTEREST AND VOTING RIGHTS.
The company intends to raise additional capital to fund the growth of our business. We plan raise additional funds through the issuance of equity, equity-related or convertible debt securities, these securities may have rights, preferences or privileges senior to those of the holder of our common stock. The issuance of additional common stock or securities convertible into common stock will also have the effect of diluting the proportionate equity interest and voting power of our shareholder of our common stock.
THE CONVERSION OF OUR SERIES A PREFERRED STOCK AND SERIES B PREFERRED STOCK COULD DILUTE YOUR OWNERSHIP INTEREST AND VOTING RIGHTS.
The company currently has 100,000,000 shares of Series A preferred stock and 50,000,000 shares of Series B preferred stock authorized. Each share of Series A preferred stock is entitled to 10 non-cumulative votes on all matters on which stockholders may vote and has the right to convert into 10 shares of common stock. Each share of Series B preferred stock is entitled to 1 non-cumulative vote on all matters on which stockholders may vote and has the right to convert into 1 share of common stock.
As a result of conversion, your ownership interest may be diluted, which means your percentage of ownership in the company decreasing.
AN ACTIVE TRADING MARKET FOR OUR COMMON SHARES MAY NOT DEVELOP.
Our common shares are new issues of securities with no established trading markets or prior trading histories, and there can be no assurance regarding the future development of markets for our common shares, the ability of holders of our common shares to sell or the prices for which holders may be able to sell their holdings of our common shares. Furthermore, the liquidity of, and trading markets for, our common shares may be adversely affected by changes in the insurance industry and in the overall economy, as well as by any changes in our financial condition or results of operations.
OUR PRINCIPAL STOCKHOLDER CONTROLS OUR BUSINESS AFFAIRS, SO YOU WILL HAVE LITTLE OR NO PARTICIPATION IN OUR BUSINESS AFFAIRS.
Together the Companys Chief Executive Officer and Chief Operating Officer own over 86% of the companys outstanding common stock and investors will have no ability to influence corporate actions.
OUR STOCK IS A PENNY STOCK. TRADING OF OUR STOCK MAY BE RESTRICTED BY THE SEC; PENNY STOCK REGULATIONS AND THE FINRA; SALES PRACTICE REQUIREMENTS, WHICH MAY LIMIT A STOCKHOLDERS LABILITY TO BUY AND SELL OUR STOCK.
The Companys common shares may be deemed to be "penny stock" as that term is defined in Regulation Section "240.3a51-1" of the Securities and Exchange Commission (the "SEC"). Penny stocks are stocks: (a) with a price of less than U.S. $5.00 per share; (b) that are not traded on a "recognized" national exchange; (c) whose prices are not quoted on the NASDAQ automated quotation system (NASDAQ - where listed stocks must still meet requirement (a) above); or (d) in issuers with net tangible assets of less than U.S. $2,000,000 (if the issuer has been in continuous operation for at least three years) or U.S. $5,000,000 (if in continuous operation for less than three years), or with average revenues of less than U.S. $6,000,000 for the last three years.
Section "15(g)" of the United States Securities Exchange Act of 1934, as amended, and Regulation Section "240.15g(c)2" of the SEC require broker dealers dealing in penny stocks to provide potential investors with a document disclosing the risks of penny stocks and to obtain a manually signed and dated written receipt of the document before effecting any transaction in a penny stock for the investors account. Potential investors in the Companys common shares are urged to obtain and read such disclosure carefully before purchasing any common shares that are deemed to be "penny stock".
Moreover, Regulation Section "240.15g-9" of the SEC requires broker dealers in penny stocks to approve the account of any investor for transactions in such stocks before selling any penny stock to that investor. This procedure requires the broker dealer to: (a) obtain from the investor information concerning his or her financial situation, investment experience and investment objectives; (b) reasonably determine, based on that information, that transactions in penny stocks are suitable for the investor and that the investor has sufficient knowledge and experience as to be reasonably capable of evaluating the risks of penny stock transactions; (c) provide the investor with a written statement setting forth the basis on which the broker dealer made the determination in (ii) above; and (d) receive a signed and dated copy of such statement from the investor confirming that it accurately reflects the investors financial situation, investment experience and investment objectives. Compliance with these requirements may make it more difficult for investors in the Companys common shares to resell their common shares to third parties or to otherwise dispose of them. Security holders should be aware that, according to Securities and Exchange Commission Release No. 34-29093, dated April 17, 1991, the market for penny stocks has suffered in recent years from patterns of fraud and abuse. Such patterns include:
(i) Control of the market for the security by one or a few broker-dealers that is often related to the promoter or issuer;
(ii) Manipulation of prices through prearranged matching of purchases, sales, and false or misleading press releases;
(iii) Boiler room practices involving high-pressure sales tactics and unrealistic price projections by inexperienced broker-dealers;
(iv) Excessive or undisclosed bid-ask differentials and mark-ups by selling broker-dealers;
(v) Wholesale dumping of the same securities by promoters and broker-dealers after prices have been manipulated to a desired level, along with the resulting inevitable collapse of those prices with a consequential investor loss.
Our management is aware of the abuses that have occurred historically in the penny stock market. Although we do not expect to be in a position to dictate the behavior of the market or of broker-dealers who participate in the market, management will strive
within the confines of practical limitations to prevent the described patterns from being established with respect to our securities.
OUR PRIOR ASSOCIATION WITH DONALD KLEIN AND KCM HOLDING CORPORATION NO LONGER REPRESENTS A RISK TO THE COMPANY
In April 2010, KCM Holdings and/or Mr. Klein contacted Messrs. Wolfe and Simpson while they were employed at Equita Mortgage Group (EMG). Mr. Klein approached Messrs. Wolfe and Simpson about the advantages of taking a company public and for a fee of $40,000 and a block of common stock, he could assist them with the process of going public. Mr. Simpson had previously worked with Mr. Klein at an insurance company in 2006. When Mr. Simpson accepted a position with another insurance company, Mr. Klein established his own insurance agency, KCM Insurance Services and KCM Holdings to incubate new companies that had an interest in becoming publicly traded. UUI was interested in creating their own IMO (Independent Marketing Organization), and Mr. Klein had made numerous representations and assurances to UUI regarding his knowledge and experience in the insurance industry, as well as successfully shepherding several companies through the process of going public. During this time, with Mr. Kleins personal assurances, UUI built a rapport with Mr. Klein, agreeing to contract solely with Mr. Klein and no other company was considered. Although Wolf and Simpson had already developed a business plan that included a marketing strategy and technology support, UUI would need assistance in capital formation. Based on Mr. Klein's and KCM Holdings representations about the advantages of going public and his knowledge of the process, it appeared that he would be able to assist UUI with going public at a reasonable cost that included polishing business and marketing plans and implementing the capital formation and technology support. At this point in time, UUI was a fledgling operation with limited resources. Hiring KCM Holdings to provide such a broad scope of services allowed Messrs. Wolf and Simpson to devote their time and attention to establishing and growing the business. The services listed below are the services that UUI contracted KCM Holdings to provide.
In June 2010, Mr. Klein spoke briefly to a small group of about 40 UUI agents about the benefits of becoming a publicly traded company and that UUI was in the process of going public. To our knowledge no other instruction took place. Messrs. Wolfe and Simpson have not been affiliated with nor have any equity interest in KCM Holdings. Below is a breakdown of the KCM entities and the services that KCM and its other affiliates were to perform in order to earn $40,000 and to receive common stock in compensation for all of the entities.
KCM HOLDINGS CORP. to provide corporate restructuring counseling to UUI and assist UUI in the sale and transfer of assets, assist in formation of capital structure, provide UUI with a legal and accounting team, as well as a market maker, getting the company stock traded on OTCBB and raising additional $500K to $1M once public.
MOONTAE HOLDINGS LLC - to provide strategic consulting, planning and development services in preparation of plans and supporting documents for areas of marketing, branding, design and business development.
UNDERDOG INVESTMENTS LLC to review the Company's business plan and corporate strategy, meet with company management and review long term and short term objectives, assist with market and investor relations.
CONNOR & KIRK CAPITAL, LLC - "to raise capital to finance the launch and operations of the Company."
KCM STRATEGIC MEDIA GROUP INC. - "to provide media design and internet technology consulting including social media tools and other applicable emerging technology support."
Mr. Klein, KCM and its related entities wholly failed to perform their obligations and UUI terminated all consulting agreements with KCM and its related entities and furthermore repudiated any agreement with KCM and its related entities regarding the issuance of stock. No UUI stock was ever issued to KCM or to any entity controlled by or working with KCM. Therefore, UUI should not be listed as part of KCMs portfolio. Neither UUI nor its executive officers have any relationship with KCM, Donald Klein or with any entity controlled by or working with KCM and/or Donald Klein. Although UUI was made aware of an SEC complaint against KCM and Donald Klein concerning securities fraud, UUI was not involved with the complaint, did not participate or aide KCM and/or Donald Klein in any of the activities described in the complaint nor did UUI benefit from any such activities described in the complaint. UUI has not violated any State or Federal Securities Laws nor has any individual
employed by or otherwise associated with UUI been implicated or charged with any criminal involvement or violation of law stemming from any of the activities described in the complaint against KCM and Donald Klein.
UUI terminated the agreements with the KCM entities because of two reasons: (1) Complete failure to achieve objectives and total lack of performance by all entities for all services that they represented they could accomplish for UUI, and (2) the revelation by Donnie Klein, CEO of KCM Holdings Corp. that he was personally "under investigation" by the SEC for securities fraud and other criminal/civil violations. At that point, UUI did not want to be tainted with the malfeasance being admitted by Mr. Klein. It just made it easier to terminate his agreements because he and his entities were not accomplishing any objectives and were such poor performers. On March 15, 2011, UUI terminated all contracts with all KCM entities and our General Counsel contacted KCM regarding this matter. On or about March 15, 2011, our General Counsel, Steve Dryzer, notified all of the KCM entities by regular and certified mail that all contracts were terminated for nonperformance. UUI is in favor of pursuing litigation to recover the $40,000 when funds are sufficient to pursue that course of action without impeding our daily operations and cash flow.
This prospectus contains references to risks and uncertainties. We use words such as "anticipate", "expect", "intend", "plan", "believe", "seek" and "estimate", and variations of these words and similar expressions to identify such statements. You should not place too much reliance on these statements. Our actual results are most likely to differ materially from those anticipated in these statements for many reasons, including the risks faced by us described in the preceding "Risk Factors" section and elsewhere in this prospectus. These statements address such issues as:
* Future earnings and cash flow
* Development projects
* Business strategy
* Expansion and growth of our business and operations
* Our estimated financial information
These statements are based on assumptions and analyses made by us in light of our experience and our perception of historical trends, current conditions and expected future developments, as well as other factors we believe are appropriate under the circumstances. However, whether actual results and developments will meet our expectations and predictions depend on a number of risks and uncertainties, which could cause our actual results, performance and financial condition to differ materially from our expectation.
Consequently, these cautionary statements qualify all of the statements made in this prospectus. We cannot assure you that the actual results or developments anticipated by us will be realized or, even if substantially realized, that they would have the expected effect on us or our business or operations.
USE OF PROCEEDS
The shares of common stock covered by this prospectus are issued and outstanding and owned by the selling stockholders. Each of the selling stockholders will receive all of the net proceeds from the sale of shares by that stockholder. We will not receive any of the proceeds from the sale or other disposition of the shares common stock covered by this prospectus. We are responsible for the fees, costs and expenses of this offering.
DETERMINATION OF OFFERING PRICE
The $0.15 offering price of our common stock was determined arbitrarily by UUI. There is no relationship whatsoever between this price and our assets, earnings, book value or any other objective criteria of value. We intend to apply to the Over-the-Counter Bulletin Board electronic quotation service for the trading of our common stock. If our common stock becomes quoted and a market for the stock develops, the actual price of stock will be determined by prevailing market prices at the time of sale or by private transactions negotiated by the selling shareholders named in this prospectus. The offering price would thus be determined by market factors and the independent decisions of the selling shareholders named in this prospectus.
The shares to be sold by the selling shareholders are shares of common stock that are currently issued and outstanding. Accordingly, there will be no dilution to our existing shareholders.
SELLING SECURITY HOLDERS
The selling shareholders named in the table titled Selling Shareholders are offering all of the shares of common stock offered through this prospectus. As of January 6, 2012, the company had raised $697,819.75 through the sale of its common stock. The company offer shares through two Regulation D 506 offerings. The first offering dated June 1, 2010 was for 5,000,000 common shares at $.02 per share, and the second offering, dated August 19, 2010, was for 3,985,465 at $0.15 per share. Other than the costs of preparing this prospectus and a registration fee to the SEC, we are not paying any costs relating to the sales by the selling security holders. None of the selling security holders is a registered broker-dealer or an affiliate of a registered broker-dealer.
The persons listed in the following table plan to offer the shares shown opposite their respective names by means of this prospectus. The owners of the shares to be sold by means of this prospectus are referred to as the selling shareholders. These shares may be sold by one or more of the following methods, without limitations
In competing sales, brokers or dealers engaged by the selling shareholders may arrange for other brokers or dealers to participate. Brokers or dealers may receive commissions or discounts from selling shareholders in amounts to be negotiated. As to any particular broker-dealer, this compensation might be in excess of customary commissions. Neither, we nor the selling stockholders can presently estimate the amount of such compensation.
The selling shareholders and any broker/dealers who act in connection with the sale of the shares will be deemed to be underwriters within the meaning of the Securities Acts of 1933, and any commissions received by them and any profit on any resale of the shares as a principal might be deemed to be underwriting discounts and commissions under the Securities Act.
If any selling shareholders enters into an agreement to sell his or her shares to a broker/dealer as principal and the broker/dealer is acting as an underwriter, we will file a post-effective amendment to the registration statement, of which this prospectus is a part, identifying the broker/dealer, providing required information concerning the plan of distribution, and otherwise revising the disclosures in this prospectus as needed. We will also file the agreement between the selling shareholder and the broker/dealer as an exhibit to the post-effective amendment to the registration statement.
We have advised the selling shareholders that they and any securities broker/dealers or others who will be deemed to be statutory underwriters will be subject to the prospectus delivery requirements under the Securities Act of 1933. We have advised each selling shareholder that in the event of a distribution of the shares owned by the selling shareholder, such selling shareholder, any affiliated purchasers, and any broker/dealer or other person who participates in the distribution may be subject to Rule 102 of Regulation M under the Exchange Act until their participation in that distribution is complete. Rule 102 makes it unlawful for any person who is participating in a distribution to bid for or purchase stock of the same class, as is the subject of the distribution. A distribution is defined in Rule 102 as an offering of securities that is distinguished from ordinary trading transaction by the magnitude of the offering and the presence of special selling efforts and selling methods. We have advised the selling shareholders that Rule 101 of Regulation M under the 1934 Act prohibits any stabilizing bid or
stabilizing purchase for purpose of pegging, fixing or stabilizing the price of the common stock in connection with this offering.
No selling shareholder has, or had, any material relationship with our officers or directors. To our knowledge, no selling shareholder is affiliated with a broker/dealer.
The shares of common stock owned by the selling shareholders may be offered and sold by means of this prospectus from time to time as market conditions permit at a fixed price of $0.15 per share. If and when our common stock becomes quoted on the OTCBB, the shares owned by the selling shareholders may be sold in public market or in private transactions for cash at prices to be determined at that time. We will not receive any proceeds from the sale of the shares by the selling shareholders.
Based upon information available to us as of January 6, 2012the following table sets forth the names of the selling shareholders, the number of shares owned, the number of shares registered by this prospectus and the number and percent of outstanding shares that the selling shareholders will own after the sale of the registered shares, assuming all of the shares are sold. The information provided in the table and discussions below has been obtained from the selling shareholders. The selling shareholders may have sold, transferred or otherwise disposed of, or may sell, transfer or otherwise dispose of, at any time or from time to time since the date on which it provided the information regarding the shares beneficially owned, all or a portion of the shares of common stock beneficially owned in transactions exempt from the registration requirements of the Securities Act of 1933. As used in this prospectus, "selling shareholder" includes donees, pledgees, transferees or other successors-in-interest selling shares received from the named selling shareholder as a gift, pledge, distribution or other non-sale related transfer.
Beneficial ownership is determined in accordance with Rule 13d-3(d) promulgated by the Commission under the Securities Exchange Act of 1934. Unless otherwise noted, each person or group identified possesses sole voting and investment power with respect to the shares, subject to community property laws where applicable.
Selling Security Holder Table
Note: The Company has issued an additional 1,401,817 shares per Oral Agreements with vendors and professional service providers.
Description of Oral Agreements:
Christine Butcher, as Chief Marketing Manager, directs the companys overall marketing strategic planning programs, and corporate communications. Ms. Butcher facilitates client development through marketing and client services programs. The criteria Management used to determine the actual amount of common shares to award Christine Butcher was based on her extensive experience in the business, selling life insurance, managing direct mail lead programs, as well as her past and current expertise in the insurance marketing profession. Agreed to services for 426,667 common shares of which the aggregate value is equal to $12,000.05.
(2) Tonya Copeland, as Operations Manager, is responsible for, but not limited to, managing all administrative duties and responsibilities for the office operations. Ms. Copeland oversees the processes, transactions, licensing, training, lead management, and carrier coordinator for commissions, licensing, contracting, new business, debt management, human resources and agent management. Tonya is also responsible for assisting, reviewing, and completing the necessary documents for all SEC compliance documents, including but not limited to, the S-1, the PCAOB audit, the 15c211 to FINRA, DTC and Transfer Agent application and all supporting documentation. Management believes it is appropriate, based on her salary, to provide her with the number of common shares previously agreed upon. Agreed to services for 125,000 common shares of which the aggregate value is equal to$18,750.
(3) Law Offices of Steve Dryzer, A Professional Corporation, as General Counsel for the Company, provides legal services to the Company including the preparation, analysis and review of all legal documentation, employment agreements, corporate and business agreements, shareholder agreements, agency agreements, leases and facilities agreements, web site development agreements, as well as all SEC documents, including but not limited to, the S-1, the PCAOB audit, 15c211 to FINRA, DTC and Transfer Agent applications and all supporting documentation. Mr. Dryzer also provides advice regarding all litigation and non-litigation matters involving the Company, including both internal and external issues, employee relations and SEC matters. The criteria Management used to determine the actual amount of common
shares to Steve Dryzer was based on his experience as a corporate lawyer with specialized experience in SEC compliance and securities law. Management believes it is appropriate based on his salary to provide him with the common shares that have been agreed upon. Agreed to services for 100,000 common shares of which the aggregate value is equal to $15,000.
(4) Marcia McGown, as Lead Manager, is responsible for all aspects of our lead system including ordering and organizing data to prepare it to be sent to our mail house for generating our lead letters to be mailed out to potential clients and once the letters are returned being responsible for entering and distributing the leads to our agents. Also responsible for lead management and evaluating and assessing the best sources and place of the leads and determine where we get the most productivity from our agents in regards to the leads. The criteria Management used to determine the actual amount of common shares to Marcia McGown was based on her experience with managing a lead generation department. Marcia has experience in managing a lead program and management believes it is appropriate based on her salary to provide her with the common shares that they agreed on. Agreed to services for 200,000 common shares of which the aggregate value is equal to $30,000.
(5)(6) Fred and Frances Potter, original incorporators and initial directors, assisted with the initial set up of the corporation. Fred was the initial registered agent for UUI and completed the initial Texas incorporation documents required to form a Texas corporation (Original Certificate of Formation and Articles of Incorporation). The criteria management used to determine the actual amount of common shares to Fred and Frances Potter was based on the extensive experience Fred and Frances Potter have had in the insurance business. Management took into account Freds experience with developing financing strategies and policies, and Francess experience with recruiting and working with agents. Management felt that it was appropriate to provide Mr. and Mrs. Potter with the common stock. Agreed to services for 150,150 common shares of which the aggregate value is equal to$23,501.
(7) David Raper provided consulting services to the Company on the state of the insurance industry and the availability, development and acceptability of products in the US and abroad. The criteria Management used to determine the actual amount of common shares to David Raper was based on his involvement with management at the inception of the Company. David researched different carriers that UUI should contract with once UUI launched its operations and provided management with the information that we needed in regards to contracting with carriers prior to the inception of UUI. Management believes it is appropriate for David to receive the common shares agreed on based on his involvement with the Company from inception. Agreed to services for 200,000 common shares of which the aggregate value is equal to $30,000.
(8) Rudolph J. Renda is an independent board member for Unique Underwriters, Inc. and serves on the Audit Committee, Compensation Committee, as well as the Nominating and Corporate Governance Committee. Mr. Renda is the founder and CEO of Oscar Renda Contracting, listed as one of the top 100 national utility water construction contractors engaged in the construction of environmental infrastructure, water and wastewater treatment plants, cross-country pipelines, tunneling and river crossings. Mr. Renda is also fifty percent owner of Renda Environmental, which engages in the recycling of bio-organics. Mr. Renda also owns a minority Interest in a medical research and diagnostics firm, True- Bios LLC, and a minority interest in an advertising agency, The Integrated Advertising Agency. Prior to the founding of Oscar Renda Construction, Mr. Renda was the majority owner of Landmark Banks Mid-cities, with three branches in Euless Texas, Colleyville, Texas, and Fort Worth, Texas, which were sold to Southtrust Bank. After graduating from college in 1974 with a major in accounting, Mr. Renda became a staff auditor with PricewaterhouseCoopers for two years. Agreed to services for 500,000 common shares of which the aggregate value is equal to $75,000.
(9) Robert Wallace, as Chief Sales Manager, is responsible for the development of business strategies, policies, and marketing programs for mortgage and final expense insurance divisions. Michelle Wallace, as Chief Training Manager, is responsible for the development of training strategies, policies, and marketing programs for our mortgage and final expense insurance divisions. The criteria management used to determine the actual amount of common shares to Robert and Michelle Wallace was based on the extensive experience Robert and Michelle have had in the Insurance Marketing Profession. Management took into account their experience with developing business strategies, policies, and marketing programs, as well as successful careers selling life insurance, recruiting agents and building agencies in the past. Agreed to services for 300,000 common shares of which the aggregate value is equal to $6,000.
The service providers are not executive officers within UUI, as only the CEO and COO have been designated as such by the Board of Directors. In addition, all employment agreements and publicly disseminated information about these persons has been
so amended. The issuance of common shares for services rendered was for past performance. The amount of shares issued was based on the fair value of services rendered.
The time period of performance, the date of each issuance and values are as follows:
PLAN OF DISTRIBUTION
No underwriters or brokers are involved or are expected to be involved in the distribution. A copy of this prospectus will be mailed to each selling security holder upon effectiveness. We will also mail copies of this prospectus to brokers and dealers who may reasonably be expected in the future to trade or make a market in our common stock. However, we do not anticipate that an active market for its common stock will develop in the near future, and there can be no assurance that a trading market will develop at any time.
There is no trading market for our Common Stock. To be quoted on the OTCBB, a market maker must file an application on our behalf in order to make a market for our common stock. The company has filed the application Form 211 with Spartan Securities Group, LTD 100 2nd Avenue South, 300N St Petersburg, Florida 33701 and FINRA has responded by only asking for S-1 effective date. We are not obligated to register any shares under the Securities Act for sale by security holders, although we are hereby filing this registration statement for the registration of 10,760,608 shares of Common Stock on behalf of the selling stockholders.
As of the date of this Prospectus, there were 133 Shareholders of record of our common stock.
We have not declared or paid any cash dividends on our common stock nor do we anticipate paying any in the foreseeable future. Furthermore, we expect to retain any future earnings to finance its operations and expansion. The payment of cash dividends in the future will be at the discretion of our Board of Directors and will depend upon our earnings levels, capital requirements, any restrictive loan covenants and other factors the Board considers relevant.
The selling shareholders will act independently of us in making decisions with respect to the timing, manner and size of each sale. The selling shareholders may sell the shares from time to time:
At a price of $0.15 per share for the duration of the offering or until our shares are quoted on the OTCBB and thereafter at prevailing market prices or privately negotiated prices;
In transactions on the Pink Sheets, the OTCBB or on any national securities exchange or U.S. inter-dealer system of a
registered national securities association on which our common stock may be listed or quoted at the time of sale;
In private transactions and transactions otherwise than on these exchanges or systems or in the over-the-counter market;
In a combination of such methods of sale; or
Any other method permitted by law.
The selling shareholders may affect such transactions by offering and selling the shares directly to or through securities broker-dealers, and such broker-dealers may receive compensation in the form of discounts, concessions or commissions from the selling shareholders and/or the purchasers of the shares for whom such broker-dealers may act as agent or to whom the selling shareholders may sell as principal, or both, which compensation as to a particular broker-dealer might be in excess of customary commissions.
If our common stock becomes traded on the OTCBB electronic quotation service, then the sales price to the public will vary according to the selling decisions of each selling shareholder and the market for our stock at the time of resale. In these circumstances, the sales price to the public may be:
The market price of our common stock prevailing at the time of sale;
A price related to such prevailing market price of our common stock; or
Such other price as the selling shareholders determine from time to time.
We can provide no assurance that all or any of the common stock offered will be sold by the selling shareholders named in this prospectus.
We will cover all the expenses in connection with the registration of our common stock in this prospectus. The selling shareholders, however, will pay any commissions or other fees payable to brokers or dealers in connection with any sale of the common stock.
On or prior to the effectiveness of the registration statement to which this prospectus is a part, we will advise the selling shareholders that they and any securities broker-dealers or others who may be deemed to be statutory underwriters will be governed by the prospectus delivery requirements under the Securities Act. Under applicable rules and regulations under the Securities Exchange Act, any person engaged in a distribution of any of the shares may not simultaneously engage in market activities with respect to the common stock for the applicable period under Regulation M prior to the commencement of such distribution. In addition and without limiting the foregoing, the selling shareowners will be governed by the applicable provisions of the Securities and Exchange Act, and the rules and regulations there under, including without limitation Rules 10b-5 and Regulation M, which provisions may limit the timing of purchases and sales of any of the shares by the selling shareholders. All of the foregoing may affect the marketability of our securities.
On or prior to the effectiveness of the registration statement to which this prospectus is a part, we will advise the selling shareholders that the anti-manipulation rules under the Securities Exchange Act may apply to sales of shares in the market and to the activities of the selling security owners and any of their affiliates. We have informed the selling shareholders that they may not:
Engage in any stabilization activity in connection with any of the shares;
Bid for or purchase any of the shares or any rights to acquire the shares;
Attempt to induce any person to purchase any of the shares or rights to acquire the shares other than as permitted under the Securities Exchange Act; or
Effect any sale or distribution of the shares until after the prospectus shall have been appropriately amended or supplemented, if required, describing the terms of the sale or distribution.
We have informed the selling shareholders that they must affect all sales of shares in brokers transactions, through broker-dealers acting as agents, in transactions directly with market makers, or in privately negotiated transactions where no broker or other third party, other than the purchaser, is involved. The selling shareholders may indemnify any broker-dealer that participates in transactions involving the sale of the shares against certain liabilities, including liabilities arising under the
Securities Act. Any commissions paid or any discounts or concessions allowed to any broker-dealers, and any profits received on the resale of shares, may be deemed to be underwriting discounts and commissions under the Securities Act if the broker-dealers purchase shares as principal.
In the absence of the registration statement to which this prospectus is a part, certain of the selling shareholders would be able to sell their shares only pursuant to the limitations of Rule 144 promulgated under the Securities Act.
Penny Stock Regulations
Our shares are "penny stocks" covered by Section 15(g) of the Exchange Act, and Rules 15g-1 through 15g-6 and Rule 15g-9 promulgated there under. They impose additional sales practice requirements on broker/dealers who sell our securities to persons other than established customers and accredited investors (generally institutions with assets in excess of $5,000,000 or individuals with net worth in excess of $1,000,000 or annual income exceeding $200,000 or $300,000 jointly with their spouses). While Section 15(g) and Rules 15g-1 through15g-6 apply to brokers-dealers, they do not apply to us.
Rule 15g-1 exempts a number of specific transactions from the scope of the penny stock rules.
Rule 15g-2 declares unlawful broker/dealer transactions in penny stocks unless the broker/dealer has first provided to the customer a standardized disclosure document.
Rule 15g-3 provides that it is unlawful for a broker/dealer to engage in a penny stock transaction unless the broker/dealer first discloses and subsequently confirms to the customer current quotation prices or similar market information concerning the penny stock in question.
Rule 15g-4 prohibits broker/dealers from completing penny stock transactions for a customer unless the broker/dealer first discloses to the customer the amount of compensation or other remuneration received as a result of the penny stock transaction.
Rule 15g-5 requires that a broker/dealer executing a penny stock transaction, other than one exempt under Rule 15g-1, disclose to its customer, at the time of or prior to the transaction, information about the sales persons compensation.
Rule 15g-6 requires broker/dealers selling penny stocks to provide their customers with monthly account statements.
Rule 15g-9 requires broker/dealers to approved the transaction for the customers account; obtain a written agreement from the customer setting forth the identity and quantity of the stock being purchased; obtain from the customer information regarding his investment experience; make a determination that the investment is suitable for the investor; deliver to the customer a written statement for the basis for the suitability determination; notify the customer of his rights and remedies in cases of fraud in penny stock transactions; and, the FINRAs toll free telephone number and the central number of the North American Administrators Association, for information on the disciplinary history of broker/dealers and their associated persons. The application of the penny stock rules may affect your ability to resell your shares.
The FINRA has adopted rules that require that in recommending an investment to a customer, a broker/dealer must have reasonable grounds for believing that the investment is suitable for that customer. Prior to recommending speculative low priced securities to their non-institutional customers, broker-dealers must make reasonable efforts to obtain information about the customers financial status, tax status, investment objectives and other information. Under interpretations of these rules, the FINRA believes that there is a high probability that speculative low priced securities will not be suitable for at least some customers. The FINRA requirements make it more difficult for broker/dealers to recommend that their customers buy our common stock, which may have the effect of reducing the level of trading activity and liquidity of our common stock. Further, many brokers charge higher transactional fees for penny stock transactions. As a result, fewer broker/dealers may be willing to make a market in our common stock, reducing a stockholders ability to resell shares of our common stock
Again, the foregoing rules apply to broker/dealers. They do not apply to us in any manner whatsoever. Since our shares are covered by Section 15(g) of the Exchange Act, which imposes additional sales practice requirements on broker/dealers, many broker/dealers may not want to make a market in our shares or conduct any transactions in our shares. As such, your ability to dispose of your shares may be adversely affected.
Blue Sky Restrictions on Resale
If a selling security holder wants to sell shares of our common stock under this registration statement in the United States, the selling security holders will also need to comply with state securities laws, also known as "Blue Sky laws," with regard to secondary sales. All states offer a variety of exemption from registration for secondary sales. Many states, for example, have an exemption for secondary trading of securities registered under Section 12(g) of the Securities Exchange Act of 1934 or for securities of issuers that publish continuous disclosure of financial and non-financial information in a recognized securities manual, such as Standard & Poors. The broker for a selling security holder will be able to advise a selling security holder which states our common stock is exempt from registration with that state for secondary sales.
Any person who purchases shares of our common stock from a selling security holder under this registration statement who then wants to sell such shares will also have to comply with Blue Sky laws regarding secondary sales. When the registration statement becomes effective, and a selling security holder indicates in which state(s) he desires to sell his shares, we will be able to identify whether it will need to register or it will rely on an exemption there from.
DESCRIPTIONOF SECURITIES TO BE REGISTERED
The authorized capital stock consists of 1,000,000,000 shares of common stock, par value $0.001 per share, of which 75,760,608 shares were issued and outstanding as of December29, 2011.The holders of our common stock:
Have equal ratable rights to dividends from funds legally available if and when declared by our Board of Directors;
Are entitled to share ratably in all of our assets available for distribution to holders of common stock upon liquidation, dissolution or discontinuation of the Companys affairs;
Do not have preemptive, subscription or conversion rights and there are no redemption or sinking fund provisions or rights; and
Are entitled to one non-cumulative vote per share on all matters on which stockholders may vote.
Preferred Stock Not to be registered
Series A Preferred Stock
We are authorized to issue 100,000,000 shares of Series A Preferred stock, of which zero shares are issued and outstanding. The holders of our Series A Preferred Stock:
Have equal ratable rights to dividends from funds legal available and when declared by our Board of Directors;
Are entitled to share ratably in all of our assets available for distribution to holders of common stock upon liquidation, dissolution or winding up of our affairs;
Do not have preemptive, subscription or conversation rights and there are no redemption or sinking fund provisions or rights;
Are entitled to 10 non-cumulative votes per share on all matters on which stockholders may vote;
And have the right to convert each share of Series A preferred stock to 10 shares of common stock.
Series B Preferred Stock
We are authorized to issue 50,000,000 shares of Series B Preferred stock of which zero shares are issued and outstanding. The Series B Preferred Stock is planned to be issued for future acquisitions and a future employee stock option program. There are currently no specific plans to issue any shares of Series B Preferred Stock in the immediate or near future. The holders of our Series B Preferred Stock:
Have equal ratable rights to dividends from funds legal available, if and when declared by our Board of Directors;
Are entitled to share ratably in all of our assets available for distribution to holders of common stock upon liquidation, dissolution or winding up of our affairs;
Do not have preemptive, subscription or conversation rights and there are no redemption or sinking fund provisions or rights;
Are entitled to one (1) non-cumulative votes per share on all matters on which stockholders may vote;
And have the right to convert each share of Series B preferred stock to (one) 1 share of common stock.
No shares of preferred stock are currently being registered to be sold in the public markets. Our board of directors has the right, without shareholder approval, to issue preferred shares with rights superior to the rights of the holders of shares of common stock. As a result, preferred shares could be issued quickly and easily, negatively affecting the rights of holders of common shares and could be issued with terms calculated to delay or prevent a change in control or make removal of management more difficult. Because we may issue up to 150,000,000 shares of preferred stock your ownership interest may be diluted, which means your percentage of ownership in the company decreasing.
Donald Mitchell Brown Esq. of McMullen Associates LLC will opine upon the validity of the common stock offered by this prospectus.
INTEREST 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, direct or indirect, in the registrant or any of its parents or subsidiaries. Nor was any such person connected with the registrant or any of its parents or subsidiaries as a promoter, managing or principal underwriter, voting trustee, director, officer, or employee.
The consolidated financial statements of Unique Underwriters, Inc. as of and for the years ended June 30, 2011 and 2010 appearing in this prospectus have been audited by Bongiovanni & Associates, CPAs Independent Registered Public Accountants, as set forth in their report thereon appearing elsewhere herein, and are included in reliance upon such report given upon the authority of such firm as experts in accounting and auditing.
DESCRIPTION OF BUSINESS
UUI is a nationally recognized Independent Marketing Organization that specializes in brokering Mortgage Protection life insurance, Final Expense life insurance, and annuities, as well as lead generation.
The Company was incorporated as a shell company in the State of Texas on July 28, 2009, by Mr. and Mrs. Potter at the request of Messrs. Wolfe and Simpson. At the time of incorporation, Messrs. Wolfe and Simpson were actively employed at Equita. Each had projects to complete prior to exiting Equita. Wolfe and Simpson instructed Mr. and Mrs. Potter to assist with the start up by incorporating the company and obtaining the necessary licensing with insurance carriers, and prepare for transfer of agents. During the same period Mr. Wolfe was awaiting the settlement of a lawsuit between Equita and National American Agents (NAA), in which Mr. Wolfe was named regarding the right to receive insurance commissions. In the settlement of this lawsuit, NAA dismissed with prejudice any claims against Mr. Wolfe releasing him from any financial commitment. The delay while awaiting settlement provided Mr. Wolfe and Mr. Simpson the time to finish developing the UUI business plan, arrange
for financing, and recruit the core personnel who could be in place when business operations began. The litigation was settled on March 26, 2010 and two days later Mr. Wolf resigned from Equita. A confidentiality clause in the Settlement Agreement prevents Mr. Wolfe from discussing any other terms of the litigation and its settlement.
After creating key relationships and strategic partnerships to amass over 20 years of industry experience, Samuel Wolfe and Ralph Simpson decided to collectively start Unique Underwriters with a focus on capturing an even larger market share of the mortgage protection, life insurance and final expense insurance industry through quality lead generation and unequaled agent support programs. Please refer to the biographies of respective founders for previous experience and history.
Mr. and Mrs. Potter resigned on April 13, 2010 and on May 3, 2010 Mr. Samuel Wolfe became CEO, President and Director and appointed Mr. Ralph Simpson as COO, Chairman, Founder and Director of the Company. At that time, they established a fiscal year end of June 30. The objective of this corporation was to market and sell insurance policies, focusing primarily on mortgage protection policies, final expense, annuities and all aspects of life insurance sales.
In June 2010, the company commenced with selling insurance policies. Although Unique Underwriters started generating revenue in June 2010, it has not yet shown a profit and is presently a growth stage company with a limited history of operations.
Today, UUI is currently principally engaged in the recruitment of independent agents who will sell term, universal life, and whole life insurance policies, as well as Final Expense insurance policies and annuities, none of which are originated by UUI and none of which are sold directly by UUI.
Past Performance of Principals
Mr. Wolfe served as President and Chief Marketing Officer of Equita Mortgage Group (EMG), a mortgage protection insurance company and Independent Marketing Organization (IMO) for eight years, during which time Mr. Wolfe, led the design and implementation of all sales campaigns, marketing, and administrative procedures. Directing EMGs in-house mail center, Mr. Wolfe generated on average one million mailers per month to generate qualified leads for the independent agents. With eight years of experience developing and managing an IMO, Mr. Wolf realized the potential in the market, and collaborated with Mr. Ralph Simpson to co-found Unique Underwriters, Ind.
Mr. Simpson has over 12 years experience in the insurance industry. Mr. Simpson was first recruited into the mortgage protection insurance industry in 2001. His own agency, The Simpson Group produced over $100 million in life insurance sales in 2005, and was responsible for recruiting over 15,000 agents during its operational period. Mr. Simpson has significant experience with recruiting, training, supervising and managing agents to the proven success of The Simpson Group. As the principal at The Simpson Group, Mr. Simpson, developed successful, sustainable sales campaigns using direct mail, lead management, marketing, and administrative procedures.
When this Registration Statement becomes effective, Unique Underwriters will be a Registrant and subject to the reporting requirements of the Securities Exchange Act of 1934. Unique Underwriters will not become a publicly traded entity until our stock is traded on an exchange. At that time, Samuel Wolfe will be our CEO, President and Director and Ralph Simpson will be our COO, Chairman, and Director.
Unique Underwriters, Inc. (the "Company") is a national Independent Marketing Organization (IMO) that focuses exclusively on the sale of mortgage protection insurance policies, final expense insurance policies, annuities and life insurance policies. The Company provides sales and marketing assistance for its agents by utilizing direct-mail lead programs, insurance sales training and agency-building opportunities. The Company rents quality leads to its agents that to allow the agent to generate sales of mortgage protection insurance policies, final expense insurance policies, annuities and life insurance policies. The Company was formed as a corporation under the laws of the State of Texas on July 28, 2009. Its principal offices are presently located at 5650 Colleyville Blvd., Colleyville, Texas 76034. The Companys website is: WWW.UNIQUEUNDERWRITERS.COM. The Companys main telephone number is 817-281-3200. The CEO of the Company is Mr. Samuel Wolfe.
The Company is regulated by the Texas Insurance Department for all insurance products that we offer to our clients. We also currently hold active insurance licenses in the following states: CA, CT, FL, GA, KS, KY, LA, MS, MO, NM, NY, NC, ND, PA, RI, SD, UT, VT, VA, WV, WI.
Unique Underwriters, Inc. (UUI) is an independent marketing organization (IMO) with a simple mission to be the insurance agents first choice for leads and insurance products in the Mortgage Protection, Life and Final Expense markets by delivering outstanding quality and great service at a competitive cost through working faster, simpler and together with our agents. The corporate staff at UUI is charged with the responsibility of identifying markets, product niches and diversified services which best suit the needs of our agents while our one-on-one guidance and hands-on support of our agents produces a relationship where our agents can build their practices, develop expertise, and make more sales thereby allowing our profitable growth by both developing our existing business and through acquisitions within the insurance industry.
Keys to Success
The keys to UUIs future success are based on three major activities, 1) increased capitalization to support expand recruiting efforts, 2) increasing the frequency of lead generation for broader geographical coverage for the lead program, and 3) increasing support for the agent network through mentoring, training and support. The Company currently has the two of the three building blocks in place at a minimal level, however, with additional capitalization, UUI will be able to grow the agent network, provide more leads for larger geographical areas and provide additional personnel to mentor, train and support. Increased capitalization is the element that does not exist currently. Ultimately, the success of the business is geared around lead generation. The more leads generated, the more policies the independent agents are able to sell. By increasing the number of qualified leads, the independent agents have a better opportunity generate revenue and recruit subagents due to their own success, resulting in greater commissions for the agents and revenue for UUI. Currently, UUI must limit the lead purchases and mailing efforts to once every six weeks. Currently UUI employs four (4) managers that act as Agent Mentors and outsources training to a consultant. Ideally, with additional capitalization the ration of manager/mentors to agents would be 1:50 with a larger group of trainers to support a growing demand from the expanding agent network.
The Companys keys to success and critical operational factors are based on the following proven foundations:
Agent selection and retention.
High quality lead generation and distribution program which provides agents with Mortgage Protection and Final Expense leads.
Instruction and training to the independent agents on how to sell life insurance utilizing the direct mail leads provided to the agents by UUI.
Administrative support for the independent agents consisting of processing new agent contracts, new client applications, lead generation, lead distribution, and technical support.
Marketing support for the independent agents consisting of agency building support, agent mentorship, recruiting, and advertising.
The companys primary focus, upon inception, was to sell mortgage protection insurance policies, which are offered via term life, universal life or whole life insurance products. The percentages reflect where the majority of the business is currently earning revenue however the company has expanded its market to include final expense insurance and annuities.
The products described below are the life insurance products the Company offers to its clients. These products are underwritten by various third party insurance underwriters. See the Appointed Insurance Carrier list below. The company is not currently developing their own in-house products.
Term Insurance - A life insurance policy which provides a stated benefit upon the holders death, provided that the death occurs within a certain specified time period. However, the policy does not provide any returns beyond the stated
benefit, unlike an insurance policy which allows investors to share in returns from the insurance companys investment portfolio
Whole Life Insurance - Insurance on the life of the insured for a fixed amount at a definite premium that is paid each year in the same amount during the entire lifetime of the insured.
Universal Life Insurance (UL) - Universal Life is a type of permanent life insurance based on a cash value. That is, the policy is established with the insurer where premium payments above the cost of insurance are credited to the cash value.
Final Expense Insurance - Is an insurance policy used to pay for funeral services and a burial when the named insured dies.
Annuities - A fixed sum of money paid to someone each year, typically for the rest of their life or a form of insurance or investment entitling the investor to a series of annual sums.
The Company has agency agreements in place with insurance carriers through which commissions on the sale of insurance policies are paid for acceptable policies submitted within the state in which we are appointed and approved to conduct business. An acceptable insurance policy is a policy that meets the underwriters guidelines after first being submitted on an application for insurance, completed by the client with one of our agents. The agent first submits the application to our office. The application is then forwarded to the insurance carrier where the insurance carriers underwriters review the application to verify that it meets their underwriting guidelines. If the application is approved by the underwriter and all required documents have been submitted then both the agent and the Company are paid a commission for that policy. The Companys average override on direct agent commission is 50%, which is generated from the policies that are approved by the insurance carriers as described above. The carrier agrees to pay an override commission to the Company in an amount equal to the difference between the direct agents commission level and the companys commission level. The insurance carriers also agree to pay renewals on those approved policies, which remain active for at least two (2) years. Our compensation structure differs depending on our commission level versus the direct agents commission level, the product structure and any subagents.
In general, the level of commission is either a flat fee (possibly going up in stages according to the size of the deal) or a percentage based on the size of the deal. An important determinant of the amount of commission paid will be the kind of service and experience the agent provides. Our agreements will remain active as long as we are conducting good business practices and are actively submitting applications and in any event remain in full force and effect until terminated upon thirty (30) days prior written notice given by either party to the other. The Company is providing and attaching hereto an example agreement, the essence of which is used in all such agency agreements in place with insurance carriers. The Company currently has 27 such agreements with the insurance carriers that are currently in effect as of the date of filing. General Counsel for the company has represented to the undersigned that these agreements are fairly universal in nature. See Exhibit 10.2.
Appointed Insurance Carriers
The following is a current list of our carriers and contract dates:
UUI currently has 4000 agents and subagents in its network. Approximately 606 are active agents of which 29 are direct and 575 are subagents. Our agents are independent contractors. The agents are not employees, but are contractually obligated to work for UUI under an agency agreement executed by them upon the commencement of the relationship. UUI recruits independent agents to work with UUI by placing advertisements in Career Builder, Monster, Craigslist, Facebook, email blast, direct mail, opportunity meetings and word of mouth.
UUI recruits of independent agents who will sell term, universal life, and whole life insurance policies, as well as Final Expense insurance policies and annuities. The Company receives commission directly from the appointed insurance carriers on each policy sold. The average total commission on the annualized premium on each policy from a carrier is 153% of the first years premium. Both the agent and UUI earn a commission on each sale, due to the agency agreements UUI has with the insurance carriers.UUI has direct agents that report to the UUI group and indirect agents, those agents that are recruited by a direct agent to build that agents personal network. The amount of commission earned on each policy is dependent on the level attained by each direct agent. The average commission split between UUI and the direct agent is currently 50/50. Our outside carriers have agreed to compensate UUI for any difference between the commission paid to the agents and the commission paid to UUI. The agency agreements stay in place with the insurance carriers until either party decides to terminate the contract. The carriers may terminate contracts for lack of production, low placement of policies or for bad business.
UUI encourages agents to recruit other sub-agents, thereby creating a network of subagents from which the direct agent receives commission overrides on the subagents sale of life insurance policies. Each direct agent negotiates with the subagent regarding the percentage that will be paid to the sub-agent. UUI provides promotional guidelines for the recruiting agent; however the recruiting agent ultimately determines what rate the newly recruited sub-agents starting commission will be. UUI does not participate in the negotiations nor does it collect statistics on the average commission earned by a sub-agent. When an insurance policy is sold, a large portion of the first year's premium is paid to various people who were directly or indirectly involved in the sale of that policy. The writing agent receives the bulk of the compensation, and because our independent agents have an override agreement directly with the insurance carriers that UUI represents, the recruiting agent is often paid a smaller portion, called an override, for their role in facilitating the sale.
Agent Levels and Commissions Table
An agent may attain a higher level of commission when in the required amount of annualized premium is submitted to UUI insurance carriers for the required number of consecutive months. Production may be both personal production and include the production of the agents subagents.
As part of our screening process for signing new agents, UUI conducts phone interviews with prospective agents where we inquire into their background, experience, licenses and goals. Once the decision is made to work together, we forward them
contracting forms from one or more of our insurance carriers. The insurance carriers then conduct background checks, credit checks and verification of license(s).
When an agent recruits a sub-agent into his/her network, the agent is responsible for negotiating the beginning commission rate for the sub-agent based on the guidelines provided by UUI, managing, training, and mentoring the sub-agent. This structure and oversight responsibility generates the incentive to increase the sub-agents right to receive increased commissions as seen in the table above.UUI oversees this commission structure and UUI provides administrative and marketing support to all of its direct agents and subagents from our headquarters in Colleyville, Texas.
UUIs oversight of the agents includes compliance with all insurance regulations pertaining to the sale of insurance products, as well as compliance with the guidelines set forth in their agency agreements. UUIs management meets once a week to review and review all lead and insurance sales associated with the agents. Oversight of agent activity and production ensures quality and retention of business for the insurance carriers. UUI monitors its agents activity and the communications between agents and carriers utilizing online reports from the carrier which provides crucial statistics by agent regarding persistency, placement, approvals, declines and unaccepted policies. If an agent is not in compliance with insurance carrier requirements, UUI notifies them of the deficiency and assists with the agents to correct the issue. Should the deficiencies continue the agent is subject to a 30 day probationary period. If the issues are not corrected, then termination will occur.
UUIs mentoring program provides insurance expertise and experienced guidance to UUI agents. Agent Mentor provides personalized support to agents with questions regarding insurance products, sales processes/techniques, leads, regulations, guidelines, and technical support associated with the websites hosted by both UUI and the insurance carriers. Currently UUI employs four (4) managers that act as Agent Mentors, who are incentivized to assist the agents, as well as provide the agent with weekly support during national training. The Agent Mentor is a non-salaried position; the Mentors are paid a percentage (1.5%) on the value of the annualized premium of the agents monthly production.
Agents rent leads at various prices from UUI, which is our secondary source of revenue representing 36% of our total revenue. Agents pay varying prices for leads, depending on whether the leads are newly generated or aged inventory of leads.
UUI purchases data from two sources: home purchases and public information about senior citizens ages 55 70. This information is the basis of direct mail promotions for mortgage protection life insurance and senior citizens interested in final expense insurance. Respondents answer the personal information questionnaire, which includes date of birth, gender, smoker/non-smoker and contact information via a postage paid return mail. These response cards then become leads uploaded to the fulfillment platform, Lead Station, for rental and distribution as A leads to UUI agents. Mortgage Protection leads are rented to the independent agents at an average cost of $38 per lead and Final Expense leads are rented to the agents for an average cost of $26 per lead.
UUI outsources its mailing operation to a mail house called Americas Recommended Mailers Inc. (ARM). UUI has an agreement with ARM to mail from their facility.
UUI also purchases additional B leads from Equita Mortgage Group (Equita). UUI is a registered Agent for Equita Mortgage Group and as such, has the right to purchase and utilize Mortgage Protection Leads and Final Expense leads from Senior Advisor Services upon request from UUI.As the recruiting agent, Equita receives commissions and overrides on all UUI production. Mr. Wolfe, the current CEO of UUI, had previously been CMO of Equita Mortgage Group and Educator Group Plans. Equita Mortgage Group is a d/b/a of Educator Group Plans. Educator Group Plans, Insurance Services Inc., Equita Mortgage Group and Senior Advisor Services are entities owned by Richard Wolfe and Robert Myer. Despite this previous relationship, Mr. Wolfe receives no financial benefit from the purchase of these leads, nor does he receive a discounted price based on his previous relationship with Equita. Mr. Wolfe does not have any equity ownership in Equita. (See Exhibit 10.4)
UUI has a relationship with Senior Advisor Services Inc. (SAS), a subsidiary of Educator Group Plans that provides UUI with a continuous stream of information on potential prospects for Final Expense insurance. UUI purchases additional B leads from SAS, which has agreed to sell Final Expense Leads to UUI upon request from UUI. UUI utilizes direct mail campaigns to senior citizens advertising final expense insurance. Through a similar mechanism as the mortgage protection insurance response card, UUI then uploads qualified responses and rents and distributes these leads through the Lead Station.
A Leads. Mortgage protection leads are rented to the independent agents for 30 days for an average cost of $38 per lead. Final expense leads are rented to the agents for 30 days at an average cost of $26 per lead. These A leads have never been rented to an agent. These leads are considered the best quality leads, hence the A lead designation. The agents have the ability to reduce the cost of their A leads from $38 per lead to $2.00 per lead, if they sell a prescribed amount of insurance from the A leads. This incentive motivates the agents to sell more insurance policies. The agent has 30 days to generate an insurance sale from the A lead before it becomes an available B lead that is available to other agents.
B Leads. Pre-rented leads are designated as B leads, which are rented to the agents that work in the mortgage protection and final expense markets. B leads have been rented one time previously. There are three categories of B lead depending on the age of the lead and the number of times the lead has been rented.
Gold B leads have been rented one time previously as an A lead. The cost of a Gold B lead is $7.00.
Silver B leads have been rented as an A lead and again as a Gold B lead. It is rented to an agent for 30 days at a cost of $5.00 per lead.
Bronze B leads has been rented once as an A lead, once as a Gold B lead, and once as a Silver B lead and is rented to an agent at a cost of $3.00.
A lead, whether an A or B type, is rented to only one agent at a time and is distributed based on the agents geographic territory. This provides the agent with exclusive access to this data for a specified period of time. The agents have 30 days to convert a lead to a policy/application. After 30 days of having the proprietary access to the lead, the lead becomes available to other agents.
Aging Leads are defined as an A lead that has been in the Lead Station system for more than 12 months are available to agents at a cost of $1.00 per lead. All leads are proprietary for 30 days to any agent who licenses the lead. The average age of A leads is 15 days old. The average age of B leads is 365 days old.
After a policy has been generated from a lead, UUI permanently removes that lead from the Lead Station. It is no longer available for rental to any UUI agent. UUI charges the agent an Area Lead Request Deposit (ALRD) of $500 to cover the cost of the first two weeks mailings. The Area Lead Request Deposit allows UUI to hedge its financial risk associated with mailings for a new agent that is requesting for A leads.
In addition to renting leads, UUI also sells premium membership packages that will allow an agent to avoid paying the $500 ALR by subscribing to a monthly premium membership package. There are four packages that agents may select as outlined below.
Basic: The basic membership is free to the agent and the benefits are available in all subsequent upgraded membership packages. Automatic contracting with UUI carriers as outlined is included in the agents agreement to become part of the UUI organization, participation on Group Company calls, attendance to Company events and conventions, and access to Lead Station (B leads only).
Executive: At a monthly cost of /$24.99, the agent receives additional benefits in regard to training, training videos and premium resources (?), as well as access to all leads via Lead Station and centralized mailings with a deposit of $500 for the Area Lead Request (ALR).All A leads at full price, Travel lead request must have a minimum of 30, $500 Reserve Accounts, paying full rate for each lead as outlined in the Leads Generation (?) Personalized support in the form of Agent Hotline, a designated Agent Mentor and a customized web-site template as a UUI agent.
Entrepreneur: At a monthly rate of $59.99, the membership package includes all the basic and Executive benefits as well as the following: Waiving the $500 Area Lead Request deposit, incentive-based profit sharing, advanced Boot Camp training calls, and no reserve account requirement for Travel Lead Requests.
Partner: At a monthly rate of $99.99, the membership package includes the benefits from Basic and Executive as well as the following: discounted Area Lead Deposit at $59.99,10% discount on UUI events and conventions, incentive based profit sharing, UNIQUECARE discount health plan, commissionable income at $10 per month for the sale of each direct Partner Membership, all training offerings, access to all leads, lead alerts giving notification of lead special prior to general agent notification, 50% discount on Final expense B leads, 5 free leads for every 5 applications per month and a customized Life Insurance website.
Founder: At the monthly rate of $159.99, the founders package includes all of the benefits listed in Basic, Executive, Entrepreneur and Partner memberships with the following modifications or additions: ALR deposit $119.00 per month, commissionable income at $10 per month for the sale of each direct Partner Membership, and $12 per month for each direct Founder Membership, access to all leads with a discounted rate of $19 per A lead and a 10 day exclusive right to the lead, No override charge on direct agents, lead alerts, 50% discount on B leads, 5 free leads for every 5 applications per month, UNIQUECARE discount health plan, free access to Agent hotline and agent mentor, as well as the development of a custom corporate and life insurance websites.
The Company also provides an intense training program so the agent is better prepared to sell insurance products to prospective clients. Training is one of the key success factors for retaining productive agents and subagents. The approximate turnover in agents equates to 10%. There are several reasons an agent moves to another Independent Marketing Organization. Some of the reasons are attrition, inability to sell, inability to recruit, natural causes, economic reasons, relocation reasons, or higher commissions from a competitor.
UUI has a retention rate of 90% for recruited agents. This high retention rate is due to the high quality of leads, competitive commission levels and diversity of insurance carriers UUI offers them. Unique Underwriters is committed to providing professional sales and service for its insurance customers.
UUI agents have the opportunity to participate in an advanced training program which teaches them how to sell insurance products to prospective clients. UUI provides free basic training for all agents in the areas of Mortgage Protection and Final Expense insurance which consist of term, universal life, whole life and annuities. This training is done via webinars and conference calls hosted directly by UUI every two weeks.
UUI also promotes an advanced training two day course, Boot Camp. The average cost for the two day advanced training class is $250 per person. UUI does not receive any of this revenue. JD Butcher is the Boot Camp trainer and all proceeds go to him for conducting the class. Mr. Butcher is not an employee of UUI; he is an independent trainer that performs these intensive training sessions on behalf of UUI. Mr. Butcher is the father of Christine Butcher and no executive officers receive any financial or other benefit from this familial relationship.
UUIs current and anticipated principal competitors are the following: AmeriLife, Bay Planning Inc., EPIC Insurance Company, Consolidated Underwriters, ALB Insurance, National Agents Alliance, Insurance Wholesalers, as well as Life & Annuity Masters.
Unlike its competitors that provide a much broader scope of insurance products, UUI specializes in Mortgage Protection and Final Expense life insurance brokerage and generation of high quality leads that help our agents sell term, universal, whole life, and annuity products for our appointed. A rated insurance carriers. To differentiate itself, UUI also offers a wide variety of agent training, sales, marketing, and administrative support to its agents. These services provide to UUI agents an edge over its competition.
Strategy and Implementation Summary
Emphasize service and ongoing support, which greatly enhances client and agent retention.
Build strong partnerships. UUI concentrates on building long-term relationships with our clients and agents, emphasizing the value of UUIs customeroriented objectives to ensure a long-term relationship with both the client and the agent.
Focus on target markets. We must continue to focus on selected insurance market segments that UUI identifies as prime candidates, for which we have significant experience and knowledge.
UUIs marketing strategy consists of determining what products or services may be of interest to our agents and customers, and the strategy to use in sales, communications and business development. UUIs marketing strategy is an integrated process through which we build strong customer relationships and create value for our independent agents and clients. UUI focuses on developing its lead generation departments which will generate leads throughout the United States. With the customer and agent as the focus of our activities, marketing management is a major component of our overall business strategy. UUI realizes that in
order to satisfy its organizational objectives, our organization should anticipate the needs and wants of the independent agent and clients, and satisfy these more effectively than our competitors. Among strategic marketing methods we utilize to build our agent network are, our company website www.uniqueunderwriters.com, and leveraging cost-effective advertising on social networks such as www.Monster.com, www.Craigslist.com, www.careerbuilder.com, www.Facebook.com, www.Youtube.com and www.Twitter.com
As a future publicly traded company, the founders, management and board members will continue to seek to strategically advance market equity and shareholder value. This will be reviewed on a quarterly basis. Future services are constantly under review. Messrs. Wolfe, Simpson and Renda will be conducting the review described as Mr. Wolfe and Mr. Simpson are the sole founders and executive management, and Mr. Renda joins Messrs. Wolfe and Simpson as the sole board members.
There are no pending legal proceedings to which we are a party is or in which to our knowledge any director, officer or affiliate of the Company, any owner of record or beneficially of more than 5% of any class of voting securities of the Company, or security holder is a party adverse to the Company or has a material interest adverse to the Company. The Companys property is not the subject of any pending legal proceedings.
INDEX TO FINANCIAL STATEMENTS
Unique Underwriters, Inc.
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors
Unique Underwriters, Inc.
We have audited the accompanying balance sheet of Unique Underwriters, Inc. as of June 30, 2011 and 2010 and the related statements of operations, changes in stockholders equity (deficit), and cash flows for the year ended June 30, 2011 and for the period from inception (July 28, 2009) through June 30, 2010. These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on our audits.
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 audits 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 Companys 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 Unique Underwriters, Inc. as of June 30, 2011 and 2010, and the results of its operations, changes in stockholders equity (deficit) and cash flows for the year ended June 30, 2011 and for the period from inception (July 28, 2009) through June 30, 2010 in conformity with accounting principles generally accepted in the United States of America.
The accompanying financial statements have been prepared assuming the Company will continue as a going concern. The Company has suffered recurring losses, has negative working capital, and has yet to generate an internal cash flow that raises substantial doubt about its ability to continue as a going concern. Managements plans in regard to these matters are described in Note 7. The financial statements do not include any adjustments that might result from the outcome of this uncertainty
/s/ Bongiovanni & Associates, CPAs
Bongiovanni & Associates, CPAs
Cornelius, North Carolina
September 26, 2011
AUDITED AND UNAUDITED FINANCIAL STATEMENTS
UNIQUE UNDERWRITERS, INC.
JUNE 30, 2011 and DECEMBER 31, 2011
The accompanying notes are an integral part of these financial statements
NOTES TO THE AUDITED FINANCIAL STATEMENTS
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Unique Underwriters, Inc. (the Company) is a national, independent, mortgage protection insurance sales and marketing company located in the Dallas, Texas area. The Company was incorporated in the State of Texas on July 28, 2009.
Unique Underwriters, Inc. offers the following forms of insurance sales:
Mortgage life insurance is a form of life insurance that will cover the cost of the mortgage in the event of policy holders death, so that his/her family doesnt have to worry about paying it off without the aid of primary income. Life insurance can be used for a variety of purposes, such as: providing for your spouse and children, paying off your mortgage and other debts, transferring wealth or business interests, accumulating cash on a tax advantaged basis, achieving estate tax liquidity, saving money for college expenses or retirement or other life events. Disability Insurance pays the insured a monthly benefit if he/she becomes disabled, as a result of an accident or disease, and cannot perform the duties of their own job.
Final expense insurance is an insurance policy used to pay for funeral services and a burial when the named insured dies. Such a policy helps ease the financial burden placed on a family when a loved one dies. It is no different than a traditional life insurance policy with a small monetary value. Final expense insurance allows the named insured to feel safe knowing that funeral-related expenses are covered regardless of the status of their estate at the time of death.
Annuities provide tax-deferred growth, liquidity, and income options, plus a death benefit that may bypass the costs and delays of probate. An annuity could be right for you if: a) prefer to delay your taxes to a later date; b) are already contributing all you can to your IRA or qualified plan; c) are comfortable that you wont need extra money immediately; d) prefer a minimum guaranteed interest rate. We have an array of products that include fixed indexed annuities that are based on the performance of an Index, which provides you with all the upside potential and none of the downside risk of the market.
Basis of Presentation
The financial statements include the accounts of Unique Underwriters, Inc. under the accrual basis of accounting.
Managements Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. The financial statements above reflect all of the costs of doing business.
The Company accounts for income taxes under Section 740-10-30 of the FASB Accounting Standards Codification. Deferred income tax assets and liabilities are determined based upon differences between the financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance to the extent management concludes it is more likely than not that the assets will not be realized. 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. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the statements of operations in the period that includes the enactment date.
Notes to audited financial statements
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Cash and Cash Equivalents - For purposes of the Statements of Cash Flows, the Company considers highly liquid investments with an original maturity of three months or less to be cash equivalents.
Revenue Recognition The Company applies paragraph 605-10-S99-1 of the FASB Accounting Standards Codification for revenue recognition. The Company recognizes revenue when services are realized or realizable and earned less estimated future doubtful accounts. The Company considers revenue realized or realizable and earned when all of the following criteria are met:
(i) persuasive evidence of an arrangement exists,
(ii) services have been rendered and all required milestones achieved,
(iii) sales price is fixed or determinable, and
(iv) collection is reasonably assured.
The approval from the Companys insurance carriers, which occurs upon receipt of our commission check and the policy, can be reviewed online, and related completion of services to the client is an event that triggers revenue recognition.
No revenue is recognized prior to receipt of the commission check.
The lead sales revenue is recognized when one of our agents submits an order to purchase leads and simultaneously their credit card is processed and the leads are distributed to them.
Cost of Sales - The Company policy is to recognize cost of sales in the same manner in conjunction with revenue recognition, when the costs are incurred. Cost of sales includes the costs directly attributable to revenue recognition and includes marketing and leads generation costs, leads purchased costs and agent expenses. Selling, general and administrative expenses are charged to expense as incurred.
Comprehensive Income (Loss) - The Company reports comprehensive income and its components following guidance set forth by section 220-10 of the FASB Accounting Standards Codification which establishes standards for the reporting and display of comprehensive income and its components in the financial statements. There were no items of comprehensive income (loss) applicable to the Company during the period covered in the financial statements.
Loss Per Share - Net loss per common share is computed pursuant to section 260-10-45 of the FASB Accounting Standards Codification. Basic net loss per share is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the period. Diluted net loss per share is computed by dividing net loss by the weighted average number of shares of common stock and potentially outstanding shares of common stock during each period. There were no potentially dilutive shares outstanding as of December 31, 2011.
Risk and Uncertainties - The Company is subject to risks common to companies in the service industry, including, but not limited to, litigation, development of new technological innovations and dependence on key personnel.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Advertising Costs - Advertising costs are expensed as incurred. The Company does not incur any direct-response advertising costs.
Fair Value for Financial Assets and Financial Liabilities-The Company follows paragraph 825-10-50-10 of the FASB Accounting Standards Codification for disclosures about fair value of its financial instruments and paragraph 820-10-35-37 of the FASB Accounting Standards Codification (Paragraph 820-10-35-37) to measure the fair value of its financial instruments. Paragraph 820-10-35-37 establishes a framework for measuring fair value in accounting principles generally accepted in the United States of America (U.S. GAAP), and expands disclosures about fair value measurements. To increase consistency and comparability in fair value measurements and related disclosures, Paragraph 820-10-35-37 establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The three levels of fair value hierarchy defined by Paragraph 820-10-35-37 are described below:
The three levels of fair value hierarchy defined by Paragraph 820-10-35-37 are described below:
The carrying amounts of the Companys financial assets and liabilities, such as cash and accounts payable approximate their fair values because of the short maturity of these instruments.
The Company does not have any assets or liabilities measured at fair value on a recurring or a non-recurring basis, consequently, the Company did not have any fair value adjustments for assets and liabilities measured at fair value at December 31, 2011 nor gains or losses are reported in the statement of operations that are attributable to the change in unrealized gains or losses relating to those assets and liabilities still held at the reporting date for the for the six months ended December 31, 2011.
Recent Accounting Pronouncements - The Company has reviewed all recently issued, but not yet effective, accounting pronouncements and do not believe the future adoption of any such pronouncements may be expected to cause a material impact on its financial condition or the results of its operations.
FASB Accounting Standards Codification
(Accounting Standards Update (ASU) 2009-01)
In June 2009, FASB approved the FASB Accounting Standards Codification (the Codification) as the single source of authoritative nongovernmental GAAP. All existing accounting standard documents, such as FASB, American Institute of Certified Public Accountants, Emerging Issues Task Force and other related literature, excluding guidance from the Securities and Exchange Commission (SEC), have been superseded by the Codification. All other non-grandfathered, non-SEC accounting literature not included in the Codification has become non-authoritative. The Codification did not change GAAP, but instead introduced a new structure that combines all authoritative standards into a comprehensive, topically organized online database. The Codification is effective for interim or annual periods ending after September 15, 2009, and impacts the Companys financial statements as all future references to authoritative accounting literature will be referenced in accordance with the Codification. There have been no changes to the content of the Companys financial
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
statements or disclosures as a result of implementing the Codification during the six months December 31, 2011.
As a result of the Companys implementation of the Codification during the six months ended December 31, 2011, previous references to new accounting standards and literature are no longer applicable. In the current annual financial statements, the Company will provide reference to both new and old guidance to assist in understanding the impacts of recently adopted accounting literature, particularly for guidance adopted since the beginning of the current fiscal year but prior to the Codification.
(Included in Accounting Standards Codification (ASC) 855 Subsequent Events, previously SFAS No. 165 Subsequent Events)
ASC 855 established general standards of accounting for and disclosure of events that occur after the balance sheet date, but before the consolidated financial statements are issued or available to be issued (subsequent events). An entity is required to disclose the date through which subsequent events have been evaluated and the basis for that date. For public entities, this is the date the consolidated financial statements are issued. ASC 855 does not apply to subsequent events or transactions that are within the scope of other GAAP and did not result in significant changes in the subsequent events reported by the Company. ASC 855 became effective for interim or annual periods ending after June 15, 2009 and did not impact the Companys consolidated financial statements. The Company evaluated for subsequent events through the issuance date of the Companys consolidated financial statements. No recognized or non-recognized subsequent events were noted.
Determination of the Useful Life of Intangible Assets
(Included in ASC 350 Intangibles Goodwill and Other, previously FSP SFAS No. 142-3 Determination of the Useful Lives of Intangible Assets)
ASC 350 amended the factors that should be considered in developing renewal or extension assumptions used to determine the useful life of a recognized intangible asset under previously issued goodwill and intangible assets topics. This change was intended to improve the consistency between the useful life of a recognized intangible asset and the period of expected cash flows used to measure the fair value of the asset under topics related to business combinations and other GAAP. The requirement for determining useful lives must be applied prospectively to intangible assets acquired after the effective date and the disclosure requirements must be applied prospectively to all intangible assets recognized as of, and subsequent to, the effective date. ASC 350 became effective for consolidated financial statements issued for fiscal years beginning after December 15, 2008, and interim periods within those fiscal years. The adoption of ASC 350 did not impact the Companys consolidated financial statements.
(Included in ASC 810 Consolidation, previously SFAS No. 160 Non-controlling Interests in Consolidated Financial Statements an amendment of ARB No. 51)
ASC 810 changed the accounting and reporting for minority interests such that they will be re-characterized as non-controlling interests and classified as a component of equity. ASC 810 became effective for fiscal years beginning after December 15, 2008 with early application prohibited. The adoption of ASC 810 did not have any other material impact on the Companys financial statements.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Consolidation of Variable Interest Entities Amended
(To be included in ASC 810 Consolidation, SFAS No. 167 Amendments to FASB Interpretation No. 46(R))
ASC 810 amends FASB Interpretation No. 46(R) Consolidation of Variable Interest Entities regarding certain guidance for determining whether an entity is a variable interest entity and modifies the methods allowed for determining the primary beneficiary of a variable interest entity. The amendments include: (1) the elimination of the exemption for qualifying special purpose entities, (2) a new approach for determining who should consolidate a variable-interest entity, and (3) changes to when it is necessary to reassess who should consolidate a variable-interest entity. ASC 810 is effective for the first annual reporting period beginning after November 15, 2009, with earlier adoption prohibited. The Company adopted ASC 810 in fiscal 2010 and there was no material impact on the Companys financial statements.
At December 31, 2011, the Company had federal and state net operating loss carry forwards of approximately $1,194,000 that expire in various years through the year 2024.
Due to operating losses, there is no provision for current federal or state income taxes for the six months ended December 31, 2011.
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amount used for federal and state income tax purposes.
The Companys deferred tax asset at December 31, 2011 consists of net operating loss carry forwards calculated using federal and state effective tax rates equating to approximately $418,000 less a valuation allowance in the amount of approximately $418,000. Because of the Companys lack of earnings history, the deferred tax asset has been fully offset by a valuation allowance. The valuation allowance increased by approximately $111,000 and $274,000 for the six months ended December 31, 2011 and December 31, 2010, respectively.
The Companys total deferred tax asset as of December 31, 2011 is as follows:
The reconciliation of income taxes computed at the federal and state statutory income tax rate to total income taxes for the six months ended December 31, 2011 is as follows:
The Company is currently authorized to issue 1,000,000,000 common shares at $.001 par value per share.
The Company is currently authorized to issue 100,000,000 Class A preferred shares at $.001 par value per share with 10:1 conversion and voting rights.
The Company is currently authorized to issue 50,000,000 Class B preferred shares at $.001 par value per share with 1:1 conversion and voting rights.
During the period from inception (July 28, 2009) through June 30, 2010, the Company subscribed to 4,900,000 common shares in exchange for $71,500 in cash collections during the period from inception (July 28, 2009) through June 30, 2010 and $28,500 was received subsequent thereto from the sale thereof pursuant to a private placement to accredited investors made under Regulation 504.The 100 and 50 shares issued to Fred and Frances Potter on Aug 6, 2009 and April 15, 2010, respectively, are valued at $0.02 per share. The average value of shares was $0.02 per share.
During the six months ended December 31, 2010, the Company issued common shares in exchange for $473,990in cash collections pursuant to a private placement to accredited investors made under Regulation 504.A block of 400,000 shares issued to Christine Butcher and 300,000 shares to Robert and Michelle Wallace on November 19, 2010 were thus valued at $0.02 per share from the Companys recent private placement. The average value of shares issued in a private placement transaction was $0.07 per share.
During the year ended June 30, 2011, the Company issued as compensation for services a total of 66,400,817 common shares, out of which 65,000,000 common shares were issued to its founders. The 65,000,000 common shares issued to its founders were for their services of forming the company in May of 2010; the services not being long term in nature. In addition there is no current market for the common stock, and as such, the stock price was arbitrarily set having no relation to the assets or book value to the company. As a result, $0.07 per share price was not indicative of the market price of the stock. At inception, these shares had no or nominal intrinsic value so they were valued at $0.001 par value. The rest of the service stocks were valued at $0.15 per share from the companys most recent private placement.
During the six months ended December 31, 2011, the Company issued as compensation for services a total of 500,000 common shares to Rudolph Renda in exchange for $75,000 worth of services rendered.
Stock-Based Compensation- The Company accounts for stock-based compensation using the fair value method following the guidance set forth in section 718-10 of the FASB Accounting Standards Codification for disclosure about Stock-Based Compensation. This section requires a public entity to measure the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award (with limited exceptions). That cost will be recognized over the period during which an employee is required to provide service in exchange for the award- the requisite service period (usually the vesting period). No compensation cost is recognized for equity instruments for which employees do not render the requisite service. For the six months ended December 31, 2011, the Company recorded $75,000 in professional fees expense based on the fair value of services rendered in exchange for common shares issued to the vendors. These approximated the fair value of the shares at the dates of issuances.
LEASE COMMITMENTS AND RELATED PARTY TRANSACTIONS
The Company has a three year lease at $5,330 per month with an unrelated party. The lease expired on April 30, 2014. The Company assumed and renewed a shopping center lease from a party related through common ownership. The lease is for five years at $840 per month and expires on May 31, 2016. Future minimum rental payments under the leases for the next five years are as follows:
LOSS PER SHARE
Loss per share is computed by dividing the net loss by the weighted average number of common shares outstanding during the period. Basic and diluted loss per share was the same for the six months ended December 31, 2011.
SUPPLEMENTAL CASH FLOW INFORMATION
Supplemental disclosures of cash flow information for the six months ended December 31, 2011are summarized as follows:
Cash paid during the period for interest and income taxes:
GOING CONCERN AND UNCERTAINTY
The Company has suffered recurring losses from operations since inception. In addition, the Company has yet to generate an internal cash flow from its business operations. These factors raise substantial doubt as to the ability of the Company to continue as a going concern.
Managements plans with regard to these matters encompass the following actions: 1) obtain funding from new investors to alleviate the Companys working deficiency, and 2) implement a plan to generate sales. The Companys continued existence is dependent upon its ability to resolve it liquidity problems and increase profitability in its current business operations. However, the outcome of managements plans cannot be ascertained with any degree of certainty. The accompanying financial statements do not include any adjustments that might result from the outcome of these risks and uncertainties.
The Company follows paragraph 280 of the FASB Accounting Standards Codification for disclosures about segment reporting. This Statement requires companies to report information about operating segments in interim and annual financial statements. It also requires segment disclosures about products and services, geographic areas, and major customers. The Company determined that it did not have any separately reportable operating segments as of December 31, 2011.
AGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
UUI engaged Bongiovanni & Associates, Certified Public Accountants of Cornelius, NC, as our principal independent registered public accountants as of February 28, 2011. We did not consult with Bongiovanni & Associates, regarding the application of accounting principles to a specific transaction, completed or proposed, or the type of audit opinion that might be rendered on our financial statements. Neither a written report nor oral advice was provided to the Company by Bongiovanni & Associates that they concluded was an important factor considered by us in reaching a decision as to the accounting, auditing or financial reporting issue. We did not consult Bongiovanni & Associates regarding any matter that was either the subject of a disagreement (as defined in Item 304(a)(1)(iv) of Regulation S-K and the related instructions) or any of the reportable events set forth in Item 304(a)(1)(v) of Regulation S-K and related instructions.
MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS STATEMENTS
There are factors that could affect our future financial performance. These factors that could cause the actual results to differ from our estimates or underlie such statements are set forth in various sections of this Prospectus. These factors include, but are not limited to:
· The success or failure of the Companys efforts to successfully market the website and product matrix as scheduled;
· The Companys ability to attract, and build an agent base;
· The Companys ability to attract and retain quality employees;
· The effect of changing economic conditions;
· The ability of the Company to obtain adequate debt financing if only a fraction of this offering is sold; and other risks, which are described under RISK FACTORS and which may be described in future communications to shareholders. The Company makes no representation and undertakes no obligation to update the information to reflect actual results or changes in assumptions or other factors that could affect those statements.
You are cautioned not to place undue reliance on these statements, which are valid only as of the date they were made. We undertake no obligation to update or revise any statements to reflect new information or the occurrence of unanticipated events or otherwise.
UNIQUE UNDERWRITERS, INC. was founded on July 28, 2009 and is organized as a C corporation under the laws of the State of Texas. Accordingly, the Company has only a limited history upon which an evaluation of its prospects and future performance can be made. The Companys operations are subject to all business risks associated with new enterprises. The likelihood of the Companys success must be considered in light of the problems, expenses, difficulties, complications, and delays frequently encountered in connection with the expansion of a business, operation in a competitive industry, and the continued development of advertising, promotions and a corresponding customer base. There is a possibility that the Company may incur losses in the future. There can be no assurances that Unique Underwriters, Inc. will continue to sustain operations.
Results of Operations
For the six months ended December 31, 2011 and 2010
We had revenue of $1,040,211 for the six months ended December 31, 2011, of which $736,421 from the commissions due to sales of insurance products, including Mortgage life insurance, Final expense insurance and annuities, and $303,790 from the sales of leads. Comparatively, we had revenue of $960,520 for the six months ended December 31, 2010, of which $597,245 from the commissions due to sales of insurance products, and $363,275 from the sales of leads. The revenue figure in 2011 grew as business increased as a result of getting our advertising and marketing program increased.
We recognized our commission as revenues upon the approval from our insurance carriers and related completion of services to the client, and recognized the lead sales revenue when one of our agents submitted an order to purchase leads and simultaneously their credit card was processed and the leads were distributed to them.
Cost of Sales
The cost of sales was $499,358, or 47.9% of revenues, for the six months ended December 31, 2011, including Marketing/Leads Generation of $166,957, Leads Purchased Cost of $105,017and agent expenses of $227,384. Comparatively, our cost of sales was $465,571 for the six months ended through December 31, 2010, including Marketing/Leads Generation of $392,660 and Leads Purchased Cost of $72,911. The cost of sales figure in the six months ended December 31, 2010 was 48.4% of revenue which is comparable to 2011.
We recognized cost of sales in the same manner in conjunction with revenue recognition, when the costs were incurred. Cost of sales includes the costs directly attributable to revenue recognition, marketing and leads generation costs and leads purchased costs. Payments to agents would be examples of cost of sales items.
Contract labor expenses were not directly related to the generation of sales, rather were involved in the selling, general and administrative expenses of the business.
We had operating expenses of $856,293 for the six months ended December 31, 2011, resulting in a loss of $315,426 during the period. We had operating expenses of $776,871 for the six months ended December 31, 2010, resulting in a loss of $281,922 during the period. Our operating expenses in the six months ended December 31, 2010 was lower compared to the six months ended December 31, 2011 because we had fewer sales activities during that period.
Our operating expenses included consulting fee, contract labor, payroll and related taxes, rent and other administrative expenses.
Included in other administrative expenses in the accompanying statement of operations are miscellaneous and sundry expenses pertaining to office expenses and office supplies that are immaterial to be presented separately on the face of the statement of operations.
Liquidity and Capital Resources
For the six months ended December 31, 2011 and 2010
Net cash used in operating activities was ($244,507) for the six months ended December 31, 2011 due primarily to the net loss of ($315,426), plus the decrease in accounts payable in the amount of $4,081, offset by the non-cash expenses of $75,000 resulting from the stock issuance as compensation. Net cash used in operating activities was $287,691 for the six months ended December 31, 2010 due primarily to the net loss of $281,922, offset by the decrease in accounts payable in the amount of $29,071.
Net cash provided by financing activities was $250,000 for the six months ended December 31, 2011 due primarily to the proceeds from incurrence of an unsecured loan payable. Comparatively, we had net cash provided by financing activities of $473,990 for the six months ended December 31, 2010, which also included the proceeds from sales of common stock to accredited investors.
We planned to raise a minimum of $100,000 and a maximum of $600,000 in order to continue our marketing plan and build a customer base. The company was successful in achieving $697,819, which will go toward achieving our goals. A large portion
of the funds raised will be invested in advertising, marketing, and consulting fees. Our success is contingent upon having enough capital to build enough customers to support the business.
We had cash of $46,762 on hand as of December 31, 2011, the most readily available recent date. Our losses for the six months ended December 31, 2011 was $315,426. The Companys current cash on hand is not sufficient to meet our working capital requirements for the next twelve month period. Completion of our plan of operations is subject to attaining adequate revenue. We cannot assure investors that adequate revenues will be generated. Even without adequate revenues within the next twelve months, we still anticipate being able to continue with our present activities, but we may require financing to achieve operation and growth goals and to meet our working capital requirements. We will not receive any proceeds from the sale of common stock in this offering. If we are able to conduct an equity offering, there will be dilution to the current stockholders of the Company and to the investors that acquire shares in the offering; and if we are able to conduct a debt offering, we will likely be subject to various covenants on our business operations and may be required to make payments during the term of the securities.
We anticipate that our operational, and general and administrative expenses for the next 12 months will total approximately $1,500,000. We also do not expect any significant additions to the number of employees, unless financing is raised. The foregoing represents our best estimate of our cash needs based on current planning and business conditions. The exact allocation, purposes and timing of any monies raised in subsequent private financings may vary significantly depending upon the exact amount of funds raised and our progress with the execution of our business plan.
Critical Accounting Policies
New Accounting Pronouncements
In January 2010, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update No. 2010-06, Improving Disclosures about Fair Value Measurements (ASU 2010-06). ASU 2010-06 amends ASC 820, Fair Value Measurements ("ASC 820") to require a number of additional disclosures regarding fair value measurements. The amended guidance requires entities to disclose the amounts of significant transfers between Level 1 and Level 2 of the fair value hierarchy and the reasons for these transfers, the reasons for any transfers in or out of Level 3, and information in the reconciliation of recurring Level 3 measurements about purchases, sales, issuances and settlements on a gross basis. The ASU also clarifies the requirement for entities to disclose information about both the valuation techniques and inputs used in estimating Level 2 and Level 3 fair value measurements. The amended guidance was effective for financial periods beginning after December 15, 2009, except the requirement to disclose Level 3 transactions on a gross basis, which becomes effective for financial periods beginning after December 15, 2010. ASU 2010-06 did not have a significant effect on the Companys consolidated financial position or results of operations.
Off Balance Sheet Arrangements
We have no off-balance sheet arrangements.
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
ON ACCOUNTING AND FINANCIAL DISCLOSURE
There have been no changes in or disagreements with accountants regarding our accounting, financial disclosures or any other matter.
Directors and Executive Officers
The following table sets forth certain information regarding the members of our board of directors and our executive officers as of the date of this Prospectus:
None of our directors or officers is a director in any other U.S. reporting companies. We are not aware of any proceedings to which any of our officers or directors, or any associate of any such officer or director is a party adverse to us or has a material interest adverse to us.
Director and Executive Biographies
Samuel Wolfe, Co-founder, Chief Executive Officer/President and Director.
Mr. Wolfe has served as Chief Executive Officer, President, and Director since May of 2010 when he co-founded Unique Underwriters, Inc. Prior thereto, from 2003 to 2009, Mr. Wolfe served as Chief Marketing Officer and eventually President for Equita Mortgage Group (EMG), a mortgage protection insurance company. While employed at EMG, Mr. Wolfe was responsible for managing the Mortgage Protection insurance business, including providing leads for agents nationwide specializing in the mortgage protection market, where he led the design and implementation of all sales and marketing strategies. Since 2002, his primary focus has been the Mortgage Protection, Final Expense, Tax Shelter Annuities, 403b, and Annuity markets. Over the years, Mr. Wolfe aspired to create a more distinctive independent marketing organization that brokered insurance and licensed leads to agents in a mentor-network environment. Using his experience and innovative designs for networking organizations, Mr. Wolfe aligned his organizational and lead generation experience with Mr. Simpsons experience in the areas of recruiting, training and marketing in the insurance business.
Ralph Simpson, Chief Operating Officer, Chairman, Director
Mr. Simpson has more than 20 years in the real estate industry and over 10 years in the insurance industry. He serves as the co-founder, Chairman, Chief Operating Officer and Director of UUI. Ralph purchased his first income producing property at the age of 18. After graduating college, Mr. Simpson built and sold several businesses, and in 2001 after being recruited into the mortgage protection insurance market, Ralph realized the need for standardized training for new agents and established an insurance pre-licensing training institute Simpson Sales Academy in Bedford Texas. In May of 2010, Mr. Simpson, in conjunction with Sam Wolfe, co-founded Unique Underwriters, Inc. The Simpson Sales Academy continues to support pre-licensing training for insurance agents, however, does not conflict with nor compete with Unique Underwriters, Inc. The Simpson Group was previously affiliated with National Agents Alliance prior to the formation of Unique Underwriters Inc., however, is the company is now used only for his personal real estate investments.
Mr. Wolfe and Mr. Simpson are also co-owners of Teflon Holdings, LLC, which is a shell corporation formed as an LLC which has not been utilized as of this date nor do Messrs. Wolfe and Simpson have any immediate plans to develop any company under this shell corporation.
Rudolph J. Renda, Director
Mr. Renda is an independent board member for Unique Underwriters, Inc. and serves on the Audit Committee, Compensation Committee, as well as the Nominating and Corporate Governance Committee since November of 2011. Mr. Renda is the founder and CEO of Oscar Renda Contracting, listed as one of the top 100 national utility water construction contractors engaged in the construction of environmental infrastructure, water and wastewater treatment plants, cross-country pipelines, tunneling and river crossings. Renda is also fifty percent owner of Renda Environmental, which engages in the recycling of bio-organics. Mr. Renda also owns a minority Interest in a medical research and diagnostics firm, True- Bios LLC, and a minority interest in an advertising agency, The Integrated Advertising Agency. Prior to the founding of Oscar Renda Construction, Mr. Renda was the majority owner of Landmark Banks Mid-cities, with three branches in Euless Texas, Colleyville, Texas, and Fort Worth, Texas, which were sold to Southtrust Bank. After graduating from college in 1974 with a major in accounting, Mr. Renda became a staff auditor with PricewaterhouseCoopers for two years.
In light of the business and structure of Unique Underwriters, it was important to choose directors with the particular experience, qualifications and skills in order to serve as directors of the Company. The two persons affiliated with UUI who have the most experience in the insurance industry are Samuel Wolfe and Ralph Simpson. In the case of Mr. Wolfe, he has previously co-founded a mortgage protection insurance company and an independent marketing organization which focused on mortgage protection insurance. In the case of Mr. Simpson, he has worked in the mortgage protection insurance industry since
2001 and previously founded his own insurance agency. In addition, both Mr. Wolfe and Mr. Simpson have experience with developing, managing and supervising marketing, administrative and sales departments for insurance marketing companies. The addition of Mr. Renda provides an unbiased, objective view to the Companys business, planning and governance. With over 35 years of successful business ownership, management and accounting experience, Mr. Renda is well qualified to serve on the committees to which he has been appointed.
The table below sets forth information concerning compensation paid, earned or accrued by our chief executive officer and chief operating officer (Named Executive Officers) for the last two fiscal years.
The shares awarded to Messrs. Wolfe and Simpson are fully vested. The fair value of the shares awarded was based on their service of forming the Company. These shares were issued later because there were not an adequate number of authorized shares in the Companys treasury at the foundation of the company. No stock options or stock appreciation rights were outstanding with respect to any of our directors or executive officers as of February 10, 2012.
Compensation of Directors
No compensation has been paid to any of our directors in consideration for their services rendered in their capacity as directors during our fiscal year ended June 30, 2011.
Director and Officer Liability Insurance
We currently have directors and officers liability insurance insuring our directors and officers against liability for acts or omissions in their capacities as directors or officers, subject to certain exclusions. Such insurance also insures us against losses which we may incur in indemnifying our officers and directors.
Code of Ethics
We intend to adopt a code of ethics that applies to our officers, directors and employees, but have not done so to date due to our relatively small size.
Our board of directors has established an audit committee, a compensation committee and a corporate governance committee and staffed these three committees with the individuals best suited to accomplish the duties and responsibilities associated with audit, compensation and governance within UUI. Those individuals are Samuel Wolfe, Ralph Simpson and Rudolph Renda.
Audit Committee. Our audit committee oversees our corporate accounting and financial reporting process and assists the board of directors in monitoring our financial systems and our legal and regulatory compliance. Our audit committee is responsible for, among other things:
Appointing, compensating and overseeing the work of our independent auditors;
Approving engagements of the independent auditors to render any audit or permissible non-audit services;
Reviewing the qualifications and independence of the independent auditors;
Monitoring the rotation of partners of the independent auditors on our engagement team as required by law;
Reviewing our financial statements and reviewing our critical accounting policies and estimates;
Reviewing the adequacy and effectiveness of our internal controls; and
Reviewing and discussing with management and the independent auditors the results of our annual audit, our quarterly financial statements and our publicly filed reports.
Compensation Committee. Our compensation committee oversees our corporate compensation policies, plans and programs. The compensation committee is responsible for, among other things:
Reviewing and recommending policies, plans and programs relating to compensation and benefits of our directors, officers and employees;
Reviewing and approving compensation and the corporate goals and objectives relevant to compensation of our Chief Executive Officer;
Evaluating the performance of our executive officers in light of established goals and objectives ; and
Administering our equity compensation plans for our employees and directors.
Nominating and Corporate Governance Committee. Our nominating and corporate governance committee oversees and assists our board of directors in reviewing and recommending corporate governance policies and nominees for election to our board of directors. The nominating and corporate governance committee is responsible for, among other things:
Evaluating and making recommendations regarding the organization and governance of the board of directors and its committees;
Assessing the performance of members of the board of directors and making recommendations regarding committee and chair assignments;
Recommending desired qualifications for board of directors membership and conducting searches for potential members of the board of directors; and
Reviewing and making recommendations with regard to our corporate governance guidelines.
Our board of directors may from time to time establish other committees.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table lists, as of January 6, 2012, the number of shares of our common stock that are beneficially owned by (i) each person or entity known to us to be the beneficial owner of more than 5% of our common stock; (ii) each executive officer and director of our company; and (iii) all executive officers and directors as a group. Information relating to beneficial ownership of Common Stock by our principal shareholders and management is based upon information furnished by each person using beneficial ownership concepts under the rules of the Securities and Exchange Commission. Under these rules, a
person is deemed to be a beneficial owner of a security if that person has or shares voting power, which includes the power to vote or direct the voting of the security, or investment power, which includes the power to vote or direct the voting of the security. The person is also deemed to be a beneficial owner of any security of which that person has a right to acquire beneficial ownership within 60 days. Under the Securities and Exchange Commission rules, more than one person may be deemed to be a beneficial owner of the same securities, and a person may be deemed to be a beneficial owner of securities as to which he or she may not have any pecuniary beneficial interest. Except as noted below, each person has sole voting and investment power.
The percentages below are calculated based on 75,760,608 shares of our common stock were issued and outstanding as of the date of this Prospectus. Unless otherwise indicated, the address of each person listed is Unique Underwriters, Inc. 5650 Colleyville Blvd, Colleyville, Texas 76034 817-281-3200, website: WWW.UNIQUE UNDERWRITER.COM
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
AND DIRECTOR INDEPENDENCE
Although, we are not subject to listing requirements of any national securities exchange or national securities association and, as a result, are not at this time required to have our board comprised of a majority of non-independent directors, the Company has appointed Rudolph J. Renda, as of November 2011, to serve as an independent director. Members serve on these committees until their resignation or until otherwise determined by our board of directors.
INDEMNIFICATION FOR SECURITIES ACT LIABILITIES
Our Certificate of Incorporation and Bylaws provide that we will indemnify our directors, officers, employees and agents subject to any permissible expansion or limitation of such indemnification, as may be set forth in any stockholders or directors resolution or by contract. We believe that these indemnification provisions are necessary to attract and retain qualified persons as directors and officers. Insofar as indemnification for liabilities arising under the Securities Act of 1933 (the "Act" or "Securities Act") may be permitted to directors, officers or persons controlling us pursuant to the foregoing provisions, or otherwise, we have 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.
WHERE YOU CAN FIND ADDITIONAL INFORMATION
We will file reports, proxy statements, and other information with the SEC. We have also filed a registration statement on Form S-1 (Commission file No. 333-132165), including exhibits, with the SEC with respect to the shares being offered in this offering. This prospectus is part of the registration statement, but it does not contain all of the information included in the registration statement or exhibits. You may read and copy the registration statement and our other filed reports, proxy statements, and other information at the SECs Public Reference Room at Room 1580, 100 F Street, N.E., Washington, D.C. 20549. You can obtain information about operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. The SEC also maintains an Internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC at http://www.sec.gov. Copies of the materials filed with the SEC can be obtained from the public reference section of the SEC at prescribed rates. Statements contained in this prospectus as to the contents of any contract or other document filed as an exhibit to the registration statement are not necessarily complete and in each instance
reference is made to the copy of the document filed as an exhibit to the registration statement, each statement made in this prospectus relating to such documents being qualified in all respect by such reference.
For further information about us and the securities being offered under this prospectus, reference is hereby made to the registration statement, including the exhibits thereto and the financial statements, notes, and schedules filed as a part thereof.
PART II - INFORMATION NOT REQUIRED IN PROSPECTUS
OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the expenses in connection with the issuance and distribution of the securities being registered hereby. All such expenses will be borne by the registrant; none shall be borne by any selling stockholders.
INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Our articles of incorporation and Bylaws 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 Securities and Exchange Commission indemnification for liabilities arising under the Securities Act of 1933 is against public policy as expressed in the Securities Act of 1933, and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities is asserted by one of our directors, 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 courts decision.
RECENT SALES OF UNREGISTERED SECURITIES.
Unique Underwriters, Inc. is authorized to issue up to 1,000,000,000 shares of common stock with a par value of $0.001. The company is not listed for trading on any securities exchange in the United States and there has been no active market in the United States or elsewhere for the common shares.
During the current year, the company has sold the following securities which were not registered under the Securities Act of 1933, as amended:
5,000,000 common shares through Regulation D 506 offering dated June 1, 2010
3,985,465 common shares through Regulation D 506 offering dated August 19, 2010
Accredited Investors were identified by completing the companys Accredited Investor Questionnaire (see Exhibit 10.3)
EXHIBITS AND FINANCIAL SCHEDULES.
The undersigned Company hereby undertakes to:
Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the Company pursuant to the foregoing provisions, or otherwise, the Company has been advised that in the opinion of the Securities and Exchange Commission such indemnification 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 by the Company of expenses incurred or paid by a director, officer or controlling person of the Company 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 Company 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 Securities Act and will be governed by the final adjudication of such issue.
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.
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 Colleyville, the State of Texas, in the United States of America, on the 10th day of February, 2012.
UNIQUE UNDERWRITERS, INC
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 indicated.