UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended March 31, 2012

 

OR

 

¨ TRANSITIONAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from ___________ to _____________

 

Commission file number 333-174435

 

SUPER LIGHT INC.

 

A Delaware Corporation

I.R.S. Employer No. 68-0678429

 

 

23A HaMe’eri St

Givatayim, Israel 53332

Telephone: 011-972-54-659-6370

 

Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

 

Yes x No o

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

 

Large accelerated filer o	Accelerated filer o
Non-accelerated filer o	Smaller reporting company x

(Do not check if a smaller reporting company)

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x

 

As of May 7, 2012, 6,225,000 shares of Common Stock, par value $0.0001 per share, were outstanding.

 

 

Table of Contents 

 

Item	Description		Page
PART I - FINANCIAL INFORMATION			F-1
Item 1.	Financial Statements		F-1
Item 2.	Management's Discussion and Analysis or Plan of Operation		3
Item 4T	Controls and Procedures		9
PART II - OTHER INFORMATION			9
Item 1.	Legal Proceedings		9
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		9
Item 3.	Defaults Upon Senior Securities		9
Item 4.	Submission of Matters to a Vote of Security Holders		9
Item 5.	Other Information		9
Item 6.	Exhibits		10
Signatures			11
Exhibit Index

 

 

SUPER LIGHT INC.

(A DEVELOPMENT STAGE COMPANY)

 

INDEX TO FINANCIAL STATEMENTS

MARCH 31, 2012

Financial Statements-
Balance Sheets as of March 31, 2012 and December 31, 2011	F-2
Statements of Operations for the Three Months Ended
March 31, 2012 and 2011 and Cumulative from Inception	F-3
Statement of Stockholders’ Equity for the Period from Inception
through March 31, 2012	F-4
Statements of Cash Flows for the Three Months Ended March 31, 2012 and 2011 and Cumulative from Inception	F-5
Notes to Financial Statements	F-6

 

 

SUPER LIGHT INC.

(A DEVELOPMENT STAGE COMPANY)

BALANCE SHEETS

AS OF MARCH 31, 2012 AND DECEMBER 31, 2011

 

		As of				As of
		March 31,				December 31,
		2012				2011
		(Unaudited)				(Audited)
ASSETS
Current Assets:
Cash and cash equivalents		$	14,990			$	1,837
Total current assets			14,990				1,837
Total Assets		$	14,990			$	1,837
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable and accrued expenses		$	11,849			$	12,996
Due to shareholders			7,500				7,500
Total Current Liabilities			19,349				20,496
Commitments and Contingencies			-				-
Stockholders' Equity (Deficit):
Common stock, par value $0.0001 per share, 100,000,000 shares authorized; 6,225,000 shares issued and outstanding			623				623
Additional paid-in capital			44,278				44,278
(Deficit) accumulated during development stage			(49,259	)			(63,559	)
Total stockholders' equity (deficit)			(4,359	)			(18,659	)
Total Liabilities and Stockholders' Equity		$	14,990			$	1,837

 

The accompanying notes to financial statements are

an integral part of these statements.

 

 

SUPER LIGHT INC.

(A DEVELOPMENT STAGE COMPANY)

STATEMENTS OF OPERATIONS

FOR THE THREE MONTHS ENDED MARCH 31, 2012 AND 2011,

AND CUMULATIVE FROM INCEPTION (DECEMBER 27, 2007)

THROUGH MARCH 31, 2012

(Unaudited)

 

		Three Months				Three Months				Cumulative
		Ended				Ended
		March, 31				March, 31				From
		2012				2011				Inception
Revenues		$	85,300			$	-			$	94,180
Cost of goods sold		$	54,000			$	-			$	60,000
Gross profit			31,300				-				34,180
Expenses:
General and administrative-
Professional fees			16,455				12,000				64,009
Consulting fees			-				-				8,690
Filing fees			544				-				7,392
Franchise tax expense			400				-				985
Travel			-				-				3,753
Other			349				15				1,152
Total general and administrative expenses			17,748				12,015				85,982
(Loss) from Operations			13,552				(12,015	)			(51,802	)
Other Income (Expense)
Gain (Loss) due to currency exchange			748				601				2,543
Provision for income taxes			-				-				-
Net (Loss)		$	14,300			$	(11,414	)		$	(49,259	)
(Loss) Per Common Share:
(Loss) per common share - Basic and Diluted		$	0.00			$	(0.00	)
Weighted Average Number of Common Shares Outstanding - Basic and Diluted			6,225,000				6,225,000

 

The accompanying notes to financial statements are

an integral part of these statements.

 

SUPER LIGHT INC.

(A DEVELOPMENT STAGE COMPANY)

STATEMENT OF STOCKHOLDERS' EQUITY

FOR THE PERIOD FROM INCEPTION (DECEMBER 27, 2007)

THROUGH MARCH 31, 2012

(Unaudited)

 

																		(Deficit)
																		Accumulated
										Stock				Additional				During the
		Common stock								Subscriptions				Paid-in				Development
Description		Shares				Amount				Receivable				Capital				Stage				Totals
Balance - at inception			-			$	-			$	-			$	-			$	-			$	-
Common stock issued for cash ($0.0001/share)			4,000,000				400				(400	)			-				-				-
Net (loss) for the period			-				-				-				-				(76	)			(76	)
Balance -December 31, 2009			4,000,000				400				(400	)			-				(76	)			(76	)
Common stock issued for cash ($ 0.02/share)			2,225,000				223				-				44,278				-				44,500
Stock subscription payments received			-				-				400				-				-				400
Net (loss) for the period			-				-				-				-				(13,902	)			(13,902	)
Balance -December 31, 2010			6,225,000				623				-				44,278				(13,978	)			30,922
Net (loss) for the period			-				-				-				-				(49,581	)			(49,581	)
Balance - December 31, 2011			6,225,000				623				-				44,278				(63,559	)			(18,659	)
Net income for the period			-				-				-				-				14,300				14,300
Balance - March 31, 2012			6,225,000				623				-				44,278				(49,259	)			(4,359	)

  

The accompanying notes to financial statements are

an integral part of these statements.

 

 

SUPER LIGHT INC.

(A DEVELOPMENT STAGE COMPANY)

STATEMENTS OF CASH FLOWS

FOR THE THREE MONTHS ENDED MARCH 31, 2012 AND 2011, AND

CUMULATIVE FROM INCEPTION (DECEMBER 27, 2007)

THROUGH MARCH 31, 2012

(Unaudited)

 

		Three Months				Three Months				Cumulative
		Ended				Ended				From
		March 31,				March 31,				Inception
		2012				2011
Operating Activities:
Net (loss)		$	14,300			$	(11,414	)		$	(49,259	)
Adjustments to reconcile net (loss) to net cash provided by operating activities:
Changes in net assets and liabilities-
Accounts payable and accrued liabilities			(1,147	)			4,500				11,849
Net Cash Used in Operating Activities			13,153				(6,914	)			(37,410	)
Investing Activities:
Cash provided by investing activities			-				-				-
Net Cash Provided by Investing Activities			-				-				-
Financing Activities:
Due to shareholders			-				7,500				7,500
Proceeds from common stock			-				-				44,900
Net Cash Provided by Financing Activities			-				7,500				52,400
Net (Decrease) Increase in Cash			13,153				586				14,990
Cash - Beginning of Period			1,837				30,922				-
Cash - End of Period		$	14,990			$	31,508			$	14,990
Supplemental Disclosure of Cash Flow Information:
Cash paid during the period for:
Interest		$	-			$	-			$	-
Income taxes		$	-			$	-			$	-

 

The accompanying notes to financial statements are an integral part of these statements.

 

 

SUPER LIGHT INC.

(A DEVELOPMENT STAGE COMPANY)

NOTES TO FINANCIAL STATEMENTS

 

1.  Summary of Significant Accounting Policies

 

Basis of Presentation and Organization

 

Super Light Inc. (the “Company”) is in the development stage, and has limited operations. The Company was incorporated under the laws of the State of Delaware on December 27, 2007. The business plan of the Company is to become a leading low cost disposable baby diaper brand in Israel. The accompanying financial statements of the Company were prepared from the accounts of the Company under the accrual basis of accounting.

 

Unaudited Interim Financial Statements

 

The interim financial statements of the Company as of March 31, 2012, and for the periods then ended, and cumulative from inception, are unaudited. However, in the opinion of management, the interim financial statements include all adjustments, consisting of only normal recurring adjustments, necessary to present fairly the Company’s financial position as of March 31, 2012, and the results of its operations and its cash flows for the periods ended March 31, 2012, and cumulative from inception. These results are not necessarily indicative of the results expected for the calendar year ending December 31, 2012. The accompanying financial statements and notes thereto do not reflect all disclosures required under accounting principles generally accepted in the United States. Refer to the Company’s audited financial statements as of December 31, 2011, filed with the SEC, for additional information, including significant accounting policies.

 

Cash and Cash Equivalents 

 

For purposes of reporting within the statement of cash flows, the Company considers all cash on hand, cash accounts not subject to withdrawal restrictions or penalties, and all highly liquid debt instruments purchased with a maturity of three months or less to be cash and cash equivalents.

 

Foreign Currency Transactions 

 

The functional currency of the Company is the.U.S. dollar. Monetary assets and liabilities denominated in foreign currencies are translated at period-end exchange rates. These translation adjustments are included in net income. Foreign exchange gains and losses arising from transactions denominated in a currency other than the functional currency of the entity are included in net income.

 

Revenue Recognition

 

The Company recognizes revenues when delivery of goods or completion of services has occurred provided there is persuasive evidence of an agreement, acceptance has been approved by its customers, the fee is fixed or determinable based on the completion of stated terms and conditions, and collection of any related receivable is probable. 

 

Loss per Common Share

 

Basic loss per share is computed by dividing the net loss attributable to the common stockholders by the weighted average number of shares of common stock outstanding during the period. Fully diluted loss per share is computed similar to basic loss per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. There were no dilutive financial instruments issued or outstanding for the period ended March 31, 2012.

 

 

Income Taxes

 

The Company accounts for income taxes pursuant to FASB ASC 740. Deferred tax assets and liabilities are determined based on temporary differences between the bases of certain assets and liabilities for income tax and financial reporting purposes. The deferred tax assets and liabilities are classified according to the financial statement classification of the assets and liabilities generating the differences.

 

The Company maintains a valuation allowance with respect to deferred tax assets. The Company establishes a valuation allowance based upon the potential likelihood of realizing the deferred tax asset and taking into consideration the Company’s financial position and results of operations for the current period. Future realization of the deferred tax benefit depends on the existence of sufficient taxable income within the carryforward period under the Federal tax laws.

 

Changes in circumstances, such as the Company generating taxable income, could cause a change in judgment about the realizability of the related deferred tax asset. Any change in the valuation allowance will be included in income in the year of the change in estimate.

 

Fair Value of Financial Instruments

 

The Company estimates the fair value of financial instruments using the available market information and valuation methods. Considerable judgment is required in estimating fair value. Accordingly, the estimates of fair value may not be indicative of the amounts the Company could realize in a current market exchange. The carrying value of accounts payable-trade and accrued liabilities approximated fair value due to the short-term nature and maturity of these instruments.

 

Deferred Offering Costs

 

The Company defers as other assets the direct incremental costs of raising capital until such time as the offering is completed. At the time of the completion of the offering, the costs are charged against the capital raised. Should the offering be terminated, deferred offering costs are charged to operations during the period in which the offering is terminated.

 

Common Stock Registration Expenses

 

The Company considers incremental costs and expenses related to the registration of equity securities with the SEC, whether by contractual arrangement as of a certain date or by demand, to be unrelated to original issuance transactions. As such, subsequent registration costs and expenses are reflected in the accompanying financial statements as general and administrative expenses, and are expensed as incurred.

 

Lease Obligations

 

All non cancellable leases with an initial term greater than one year are categorized as either capital leases or operating leases. Assets recorded under capital leases are amortized according to the methods employed for property and equipment or over the term of the related lease, if shorter.

 

Estimates

 

The financial statements are prepared on the basis of accounting principles generally accepted in the United States. The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, and expenses. Actual results could differ from those estimates made by management.

 

 

Fiscal Year End

 

The Company has adopted a fiscal year end of December 31.

 

2.  Development Stage Activities and Going Concern

 

The Company is currently in the development stage, and has limited operations. The business plan of the Company is to become a leading low cost disposable baby diaper brand in Israel.

 

The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States, which contemplate continuation of the Company as a going concern. The Company has not established any source of revenues to cover its operating costs, and as such, has incurred an operating loss since inception. Further, as of March 31, 2012 the cash resources of the Company were insufficient to meet its current business plan. These and other factors raise substantial doubt about the Company’s ability to continue as a going concern. The accompanying financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the possible inability of the Company to continue as a going concern.

 

3.  Common Stock

 

On January 8, 2008, the Company issued 3,000,000 shares of common stock to the director of the Company, for a $300 subscription receivable. Payment was received in 2010.

 

On July 20, 2009, the Company issued 1,000,000 shares of common stock to the secretary of the Company, for a $100 subscription receivable. Payment was received in 2010.

 

On November 20, 2009, the Company began a capital formation activity through a PPO, exempt from registration under the Securities Act of 1933, to raise up to $40,000 through the issuance of 2,000,000 shares of its common stock, par value $0.0001 per share, at an offering price of $0.02 per share. As of May 9, 2010, the Company raised $35,500 in proceeds with the issuance of 1,775,000 shares of its common stock.

 

On April 12, 2010, the Company issued 450,000 shares of common stock to the secretary of the Company, par value $0.0001 per share, at an offering price of $0.02 per share. Payment of $9,000 was received in April 2010.

 

The Company submitted a Registration Statement on Form S-1 to the Securities and Exchange Commission (“SEC”) to register 1,775,000 of its outstanding shares of common stock on behalf of selling stockholders. The Registration Statement was declared effective on November 10, 2011. The Company will not receive any of the proceeds of this registration activity once the shares of common stock are sold.

 

 

4.  Income Taxes

 

The provision (benefit) for income taxes for the periods ended March 31, 2012 and 2011 was as follows (assuming a 23% effective tax rate):

 

		2012				2011
Current Tax Provision:
Federal-
Taxable income		$	14,300			$	-
Less: prior net operating losses			(14,300	)			-
Total current tax provision		$	-			$	-
Deferred Tax Provision:
Federal-
Loss carryforwards		$	-			$	2,625
Change in valuation allowance			-				(2,625	)
Total deferred tax provision		$	-			$	-

 

 

The Company had deferred income tax assets as of March 31, 2012 and December 31, 2011 as follows:

 

		2012				2011
Loss carryforwards		$	11,330			$	14,619
Less - Valuation allowance			(11,330	)			(14,619	)
Total net deferred tax assets		$	-			$	-

 

The Company provided a valuation allowance equal to the deferred income tax assets for the period ended March 31, 2012 and for the year ended December 31, 2011 because it is not presently known whether future taxable income will be sufficient to utilize the loss carryforwards.

 

As of March 31, 2012, the Company had approximately $49,259 in tax loss carryforwards that can be utilized future periods to reduce taxable income, and expire by the year 2032.

 

The Company did not identify any material uncertain tax positions.  The Company did not recognize any interest or penalties for unrecognized tax benefits.

 

The federal income tax returns of the Company are subject to examination by the IRS, generally for three years after they are filed.

 

5. Related Party Loans and Transactions

On January 8, 2008, the Company issued 3,000,000 shares of common stock to the director of the Company, for a $300 subscription receivable. Payment was received in 2010.

 

On July 20, 2009, the Company issued 1,000,000 shares of common stock to the secretary of the Company, for $100 subscription receivable. Payment was received in 2010.

 

On April 12, 2010, the Company issued 450,000 shares of common stock to the secretary of the Company, par value $0.0001 per share, at an offering price of $0.02 per share. Payment of $9,000 was received in April 2010.

 

As of March 31, 2012, loans from related parties amounted to $7,500 and represented working capital advances from Directors who are also stockholders of the Company. The loans are unsecured, non-interest bearing, and due on demand.

 

 

The Company's president and director provides rent-free office space to the Company.

 

6.  Recent Accounting Pronouncements

 

In May 2011, the FASB issued ASU 2011-04, "Fair Value Measurement (Topic 820): Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and International Financial Reporting Standards ("IFRSs")." Under ASU 2011-04, the guidance amends certain accounting and disclosure requirements related to fair value measurements to ensure that fair value has the same meaning in U.S. GAAP and in IFRS and that their respective fair value measurement and disclosure requirements are the same. ASU 2011-04 is effective for public entities during interim and annual periods beginning after December 15, 2011. Early adoption is not permitted. The Company does not believe that the adoption of ASU 2011-04 will have a material impact on the Company's results of operation and financial condition.

 

In June 2011, the FASB issued ASU No. 2011-05, "Comprehensive Income (ASC Topic 220): Presentation of Comprehensive Income," ("ASU 2011-05") which amends current comprehensive income guidance. This accounting update eliminates the option to present the components of other comprehensive income as part of the statement of shareholders' equity. Instead, comprehensive income must be reported in either a single continuous statement of comprehensive income which contains two sections, net income and other comprehensive income, or in two separate but consecutive statements. ASU 2011-05 will be effective for public companies during the interim and annual periods beginning after Dec. 15, 2011 with early adoption permitted. The Company does not believe that the adoption of ASU 2011-05 will have a material impact on the Company's results of operation and financial condition.

 

There were various other updates recently issued, most of which represented technical corrections to the accounting literature or application to specific industries.  None of the updates are expected to a have a material impact on the Company's financial position, results of operations or cash flows.

 

  

Item 2. Management's Discussion and Analysis or Plan of Operations

 

As used in this Form 10-Q, references to the “Company,” “Super Light,” “we,” “our” or “us” refer to Super Light Inc. unless the context otherwise indicates.

 

This Management’s Discussion and Analysis or Plan of Operations should be read in conjunction with the financial statements and the notes thereto included elsewhere in this report and with the Management's Discussion and Analysis or Plan of Operations and the financial statements for the year ended December 31, 2010 and for the period ended September 30, 2011, and the notes thereto included in our Registration Statement on Form S-1, which became effective on November 10, 2011, and with the Management's Discussion and Analysis or Plan of Operations and the financial statements for the year ended December 31, 2011, and the notes thereto included in our Annual Report on Form 10-K.

 

Forward-Looking Statements

 

This Management’s Discussion and Analysis or Plan of Operations contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements are based on current expectations, estimates, forecasts and projections about us, our future performance, the industry in which we operate, our beliefs and our management’s assumptions. In addition, other written or oral statements that constitute forward-looking statements may be made by us or on our behalf. Words such as “expects,” “anticipates,” “targets,” “goals,” “projects,” “intends,” “plans,” “believes,” “seeks,” “estimates,” variations of such words and similar expressions are intended to identify such forward-looking statements. These statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions that are difficult to assess. Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in such forward-looking statements.

 

For a description of such risks and uncertainties refer to our Registration Statement on Form S-1 (Registration No. 333-174435) filed with the Securities and Exchange Commission, which became effective on November 10, 2011. Except as required under the federal securities laws and the rules and regulations of the Securities and Exchange Commission, we do not have any intention or obligation to update publicly any forward-looking statements or risk factors included herein, whether as a result of new information, future events, changes in assumptions or otherwise.

 

Plan of Operation

 

Results of Operations

 

For the period ended March 31, 2012, we had revenues of $85,300, as compared with $0 for the period ended March 31, 2011. The revenues came from the sale of diapers. Expenses increased from $12,015 in the period ended March 31, 2011 to $17,748 in the period ended March 31, 2012. The increase in expenses was mainly a result of an increase in professional fees.

 

For the period ended March 31, 2012, we earned a net profit of $14,300, as compared to a net loss of $11,414 in the period ended March 31, 2011. The change from loss to profit resulted from diaper sales. Our cumulative net loss during the period from December 27, 2007 (inception) through March 31, 2012 was $49,259.

 

Liquidity and Capital Resources

 

We estimate that we will require approximately $40,500 for the next 12 months of operations. We may not have sufficient resources to effectuate our current business plan. As of March 31, 2012, we had $14,990 available in cash. We expect to incur a minimum of $40,500 in expenses during the next 12 months of operations, and we will have to find those funds elsewhere if we do not succeed in making sufficient sales. Most of this money will be used for our market development and sales activities.

 

  

Additionally, $7,000 will be needed for general working capital.

 

Plan of Operation

 

The Product

 

We plan to market and sell a private label disposable diaper for babies. We intend to import these diapers from third party manufacturers in China. While we believe that the diapers we plan to resell will be similar to the diapers of some of our competitors, we intend to differentiate our private label diaper on the basis of price, packaging, and an advertising campaign that will be designed to reach the Orthodox Jewish community in Israel. We intend to have our own label affixed to each pack of diapers. We intend to build our brand name by being a high quality product available at affordable pricing.

 

We plan to initially target our private label products to supermarkets that serve the Orthodox Jewish community and intend to strengthen by advertising in newspapers that are read by the Orthodox Jewish communities in Israel. In the future, assuming a successful scale-up of our private label diapers to the Israeli Orthodox Jewish community, we intend to explore the possibility of selling our private label disposable diapers to the Israeli-Arab market in Israel in the third quarter of 2012, and thereafter to explore the possibility of selling our private label disposable diapers in Eastern European countries in the third quarter of 2013. With regard to Eastern Europe, we intend to initially focus on selling our private label diapers to the Baltic countries, Latvia, Estonia and Lithuania. We intend to initially focus our Eastern European selling to the Baltic countries as a result of our CEO's extensive business experience in the Baltic countries. Our CEO has held discussions with three supermarket chains in the Baltic countries (Riki, Maxima, and Iki) regarding the sale of our baby diapers to them.

 

Principal Markets and Marketing Strategy

 

Our specific goal is to provide disposable baby diapers at a competitive and affordable price. Assuming we raise the additional $40,500 that are necessary for us to operate our business (or make sufficient sales to generate that amount in profits that we can reinvest in our business), our plan of operation is as follows:

 

Initially we are seeking to market the Super Light brand exclusively in Israel. Eventually we envision selling our products in Eastern Europe as well.

 

We intend to market our products primarily on the basis of price – our products will be offered to consumers at the lower end of the retail price point for disposable diapers. We expect manufacturing of our products to take place in China. We have taken into consideration the 12% import duty imposed by Israeli customs on goods of this type manufactured in China.

 

Purchasing Strategy

 

We intend to purchase privately labeled disposable diapers from one or more manufacturers in China. We have not yet entered into a supply agreement with a manufacturer.

 

We have contacted the seven Chinese manufacturers listed below and have received initial price quotations from each of them.

· Jinjian Anting Sanitary Products Co. Ltd.

· Rockbrook Industrial Co. Ltd.

· Baron Co. Ltd.

· B&W Paper Products Co. Ltd.

  Dongguan White Swan Paper Products Co. Ltd.

· Guangzhou Suide Commodity Co., Ltd.

· Nan’an Hengyuan Women and Children Products Co., Ltd.

 

 

Based on the initial price quotations that we have received, we believe that our initial costs will be as follows:

 

A. Cost of Diapers FOB (Freight on Board) CHINA

  

Costs FOB CHINA
	Size				Diapers per pack				Cost/FOB
	2				52			$	3.48
	3				44			$	3.48
	4				40			$	3.56
	5				36			$	3.53

 

B. Other Costs

 

Inspection and Verification – We expect to incur costs in the range of $1,000 per 40 foot container for inspection and verification of goods, which costs we plan to pass along to the customer. Inspection will include:

 

· Verification of quantity

· Load/Item Integrity (inspect for damage)

· Item Verification (actual item to item label)

· Packaging Verification

· Shipping document verification

 

Regulatory Testing – We expect to incur costs in the range of $500 per container for regulatory testing in Israel, which costs we plan to pass along to the customer.

 

Import Costs – Importing the diapers into Israel will incur the following costs, which costs we plan to pass along to the customer.

 

Import Costs Per Pack Per 40 Foot Container
																								VAT				Inspection and
	Sizes				Shipping				IT				Testing				Surcharges				Import Duty				(Value Added Tax)				Verification				Total Costs
	2			$	0.42			$	0.0097			$	0.0812			$	0.0443			$	0.42			$	0.56			$	0.16			$	1.70
	3			$	0.36			$	0.0082			$	0.0687			$	0.0427			$	0.42			$	0.56			$	0.14			$	1.59
	4			$	0.33			$	0.0075			$	0.0625			$	0.0429			$	0.43			$	0.57			$	0.13			$	1.56
	5			$	0.29			$	0.0067			$	0.0562			$	0.0418			$	0.42			$	0.56			$	0.11			$	1.50

 

Sales Strategy

 

We have been in direct contact with numerous stores and distributors over the last year. All have expressed different levels of interest in our product, but we have not entered into any agreements with any of these potential customers and distributors. We made our first sale in November 2011, and we made two further sales in January 2012. However, these were one-time sales. We have not yet entered into long-term agreements with either suppliers or purchasers.

 

We plan to sell our private label disposable diapers via the following methods:

 

· Sales directly to retail chain stores located within the Orthodox Jewish community in Israel, such as Shefa Shuk, Yesh, Bar Kol, Hachi Kedai, Osher Ad Kolel Stores, Baby Michelle, and Co-op Israel.

  

 

 

· Utilization of distributors such as Amot Shivuk, Gal Hafatze, and Netiv Hachesed that distribute to mom and pop shops throughout Israel.

 

We currently envision two methods for selling our private label disposable diapers.

 

· Method 1: Sell directly to retail chain stores. In this case, we would seek to sell the products on a FOB (freight on board) basis from the country of origin (on a container full load basis -either a 20 or 40 foot container). We would seek to be paid via a letter of credit, so that we would have guaranteed payment when paying the manufacturer for the disposable diapers. The customer will be responsible for costs relating shipping, duties, VAT and customs.

 

· Method 2: Sell our disposable diapers to chain stores via distributors who would offer us a guarantee for payment upon the arrival of the goods in Israel. In this method, we would sell the goods on a landed costs basis, meaning that we would pay for costs relating to shipping, duties, VAT and customs. Under this method, we would have to seek bank financing to pay our manufacturer, and the bank would have to be satisfied with the retail chain store/distributor guarantee. We cannot provide any assurances that we will be able to obtain such financing.

 

Inspection/Verification and Regulatory Testing

 

We intend to hire a company, such as SGS SA, a global inspection, verification, testing, and certification company, to inspect the goods at the port of export in China. SGS SA would inspect random samples and test for product defects.

 

We expect to incur costs in the range of $1,000 per 40 foot container for inspection and verification of goods, which costs we plan to pass along to the customer. Inspection will include:

 

· Verification of quantity

· Load/Item Integrity (inspect for damage)

· Item Verification (actual item to item label)

· Packaging Verification

· Shipping document verification

 

In addition, regulatory testing costs in Israel are estimated to be $500 per container, each time a container arrives in the Israeli Port, with such regulatory testing to be performed by the Israel Standards Institute, which costs we plan to pass along to the customer.

 

Marketing/Advertising Strategy

 

We plan to advertise our private label disposable diapers via conventional marketing techniques. We intend to hire an advertising agency that specializes in marketing to our initial target market, which will be the Orthodox Jewish community in Israel, a market comprised of large families that are price conscious. Although we have not held any preliminary discussions with any advertising agency, our officers have conducted market research into the adverting costs associated with this strategy.

 

Since a majority of Orthodox Jewish households do not have TVs or Internet access, our advertising will be focused on outdoor billboards and on newspaper advertisements in newspapers that serve the Orthodox Jewish community, such as Ha’Modia (daily newspaper), Makor Rishon (weekly newspaper), and Mishpacha (weekly magazine).

 

The following are the advertising rates for print advertisements:

 

Ha’Modia

½ Weekend Page - $1708 (advertise 5 get one free)

Whole weekend page – $2617 (advertise 5 get one free)

½ Weekday Page – $1322 (advertise 5 get one free)

Whole Weekday Page – $1928 (advertise 5 get one free)

 

  

Makor Rishon

 

½ Weekend Page (Weekend Magazine “Dyokan”) - $2480.

Whole weekend page (Weekend Magazine “Dyokan”) – $3500.

 

Mishpacha

 

½ Page - $2480 (advertise 4 get one free)

Whole weekend page – $745 (advertise 4 get one free)

 

We anticipate that our advertising budget will be approximately $10,000 over the next year.

 

Operations to date

 

We were incorporated under the laws of the State of Delaware on December 27, 2007. We are a development stage company. We currently have no employees. From our inception to date, we have only generated $94,180 in revenues, from one transaction in November 2011 and two transactions in January 2012. Otherwise, our operations have been limited to organizational and start-up activities.

 

We have conducted market research into the disposable diaper market in Israel, and the costs related to purchasing private label disposable diapers from manufactures in China, and selling such products in Israel. Our research covered:

 

· the different types and brands of disposable diapers currently available on the local market;

· the costs of using manufacturers in China;

· the costs of shipping, warehousing, and distributing goods in Israel;

· target customers for disposable diapers in Israel; and

· the advertising methods of the dominant manufacturers in the Israeli market.

 

Expenditures

Subject to our raising additional capital, the following chart provides an overview of our budgeted expenditures by significant area of activity over the next 12 months :

 

Legal		$	12,000
Accounting		$	10,500
Advertising		$	10,000
Travel		$	5,000
Misc		$	3,000
Total		$	40,500

 

Going Concern Consideration

 

Our registered independent auditors included an explanatory paragraph in their report on the accompanying consolidated financial statements regarding concerns about our ability to continue as a going concern. Our consolidated financial statements contain additional note disclosures describing the circumstances that lead to this disclosure by our registered independent auditors.

 

Off-Balance Sheet Arrangements

 

We have no off-balance sheet arrangements.

 

 

Additional Capital Formation Activities

 

On January 8, 2008, we issued 3,000,000 shares of common stock to Mr. Zeev Joseph Kiper, our President, Chief Executive Officer, Treasurer and Director, in an exempt transaction under Section 4(2) of the Securities Act, for a $300 subscription receivable, which has since been paid.

 

On July 20, 2009, we issued 1,000,000 shares of our common stock to Ms. Hana (Hani) Abu, our Secretary and Director, in an exempt transaction under Section 4(2) of the Securities Act for cash payment to us of $100.

 

On April 12, 2010, we issued 450,000 shares of our common stock to Ms. Hana (Hani) Abu, our Secretary and Director, in an exempt transaction under Section 4(2) of the Securities Act for cash payment to us of $9.000.

 

Between November, 2009 and April 2010, the Company began a capital formation activity through a Private Placement Offering, exempt from registration under the Securities Act of 1933, to raise up to $40,000 through the issuance of 1,775,000 shares of its common stock, par value $0.0001 per share, at an offering price of $0.02 per share. The $0.02 per share price was determined arbitrarily by the Company. It did not necessarily bear any relationship to the Company's assets' value, net worth, revenues, or other established criteria of value, and should not be considered indicative of the actual value of the shares. As of May 9, 2010, the Company had received $35,500 in proceeds from the Private Placement Offering.

 

As of March 31, 2012, we had $7,500 in loans from related parties, which represent working capital advances from Directors who are also stockholders of the Company. The loans are unsecured, non-interest bearing, and due on demand.

 

Despite this, we still do not have sufficient resources to effectuate our business plan. As of March 31, 2012 we had approximately $14,990 in cash. As noted above, we expect to incur a minimum of $40,500 in expenses during the next twelve months of operations. We estimate that this will be comprised of at least the following expenses:

 

Legal		$	12,000
Accounting		$	10,500
Advertising		$	10,000
Travel		$	5,000
Misc		$	3,000
Total		$	40,500

 

Additionally, $7,000 will be needed for general working capital.

 

Accordingly, if we do not succeed in making sufficient sales, we will have to raise the funds to pay for these expenses. We may have to borrow money from our officers, or issue debt or equity securities, or seek to enter into a strategic arrangement with a third party. There can be no assurance that additional capital will be available to us. We currently have no agreements, arrangements or understandings with any person to obtain funds through bank loans, lines of credit or any other sources. Unless we are able to make arrangements to raise additional funds, our inability to raise funds will have a severe negative impact on our ability to remain a viable company.

 

 

Off-Balance Sheet Arrangements

 

We have no off-balance sheet arrangements.

 

Item 4T. Controls and Procedures

 

Evaluation of Disclosure Controls and Procedures

 

Our disclosure controls and procedures are designed to ensure that information required to be disclosed in reports that we file or submit under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the United States Securities and Exchange Commission. Our principal executive officer and principal financial officer have reviewed the effectiveness of our “disclosure controls and procedures” (as defined in the Securities Exchange Act of 1934 Rules 13a-14(c) and 15d-14(c)) as of the end of the period covered by this report and have concluded that the disclosure controls and procedures are not effective to ensure that material information relating to the Company is recorded, processed, summarized, and reported in a timely manner.

 

Changes in Internal Controls

 

There have been no changes in the Company's internal control over financial reporting during the last quarterly period covered by this report that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.

 

PART II

OTHER INFORMATION

 

Item 1.     Legal Proceedings

 

There are no pending legal proceedings to which the Company is a party or in which 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 Company’s property is not the subject of any pending legal proceedings.

 

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

 

None

 

Item 3. Defaults upon Senior Securities

 

None.

 

Item 4. Submission of Mattes to a Vote of Security Holders

 

There was no matter submitted to a vote of security holders during the fiscal quarter ended March 31, 2012.

 

Item 5. Other Information

 

None.

 

 

Item 6. Exhibits

 

Exhibit
Number		Description
31.1		Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2		Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1		Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this quarterly report on Form 10-Q to be signed on its behalf by the undersigned thereunto duly authorized.

 

		SUPER LIGHT INC.
Date: May 14, 2012	By:	/s/ Zeev Joseph Kiper
		Name:  Zeev Joseph Kiper
		Title:  President, Chief Executive Officer, Treasurerer and OfficerOfficer,Treuaryand
		Treasurer and Director
		(Principal Executive Officer and Principal
Date: May 14, 2012	By:	/s/ Hana (Hani) Abu
		Name:  Hana (Hani) Abu
		Title:  Secretary and Director