Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o Nox
State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date: 3,105,250 common shares issued and outstanding as of July 31, 2018.
Item 1. Description of Business
Statements made in this Form 10-K that are not historical or current facts are "forward-looking statements" made pursuant to the safe harbor provisions of Section 27A of the Securities Act of 1933 (the "Act") and Section 21E of the Securities Exchange Act of 1934. These statements often can be identified by the use of terms such as "may," "will," "expect," "believe," "anticipate," "estimate," "approximate" or "continue," or the negative thereof. We intend that such forward-looking statements be subject to the safe harbors for such statements. We wish to caution readers not to place undue reliance on any such forward-looking statements, which speak only as of the date made. Any forward-looking statements represent management's best judgment as to what may occur in the future. However, forward-looking statements are subject to risks, uncertainties and important factors beyond our control that could cause actual results and events to differ materially from historical results of operations and events and those presently anticipated or projected. We disclaim any obligation subsequently to revise any forward-looking statements to reflect events or circumstances after the date of such statement or to reflect the occurrence of anticipated or unanticipated events.
Financial information contained in this report and in our financial statements is stated in United States dollars and are prepared in accordance with United States generally accepted accounting principles.
We were incorporated on March 22, 2016 in the State of Nevada. We have never declared bankruptcy, have never been in receivership, and have never been involved in any legal action or proceedings. Since incorporation, we have made purchase of equipment and we rent our office in Cyprus. We have not had preliminary contact or discussions with, nor do we have any present plans, proposals, arrangements or understandings with, any representatives of the owners of any business or company regarding the possibility of an acquisition or merger.
We are not a «shell company» within the meaning of Rule 405, promulgated pursuant to Securities Act, because we do have hard assets and real business operations.
From inception until the date of this filing we have had limited operating activities, primarily consisting of the incorporation of our company, the initial equity funding by our sole officer and director, engaging in market research, rent of our office in Cyprus and entering into supply agreement. We received our initial funding of $2,000 from our sole officer and director who purchased 2,000,000 shares of common stock at $0.001 per share.
We have a goods sales contract between Clancy Corp. and Afrodita Co, Freskada Co, Omorfiá Co., OloToSóma Co. In accordance to this contracts Seller should receive from Buyer payment in accordance to the invoice to each order of Goods from the date of signing this Contract by the Parties. Buyer agreed to accept the Goods in Sellers office.
We intend to use the net proceeds from this offering to develop our business operations. To fully implement our plan of operations we require a minimum funding of $20,000 for the next twelve months. After twelve months period we may need additional financing. If we do not generate any revenue we may need a minimum of $9,000 of additional funding to pay for SEC filing requirements. Iryna Kologrim, our President and a Director, has agreed to loan the Company funds, however, she has no firm commitment, arrangement or legal obligation to advance or loan funds to the Company. The Company's principal offices are located at str. Vizantiou 28, Strovolos, Lefkosia, Cyprus, 2006. The monthly rent fee is $300 per month from 1st day of September 2016 till 1st day of September 2017.
INITIAL FOCUS OF OUR BUSINESS
We produce our product in Cyprus and we have signed a contract with Hodm Professionals Limited, based in China, and we are ordering from them our equipment and raw materials for handcrafted soap production. We are also considering other firms as well for this work. We decided to use natural ingredients as an alternative to the synthetic ingredients prevalent in personal care products today. We intend to establish formulations using fresh, pure, and safe ingredients that appeal to people.
Our products are inspired by many growing trends. Most specifically consumers seeking new, intriguing formulations, which promote well-being either through the principles of natural therapy, or simply for the pleasure of natural aromas, which the product will bring. Moreover, there is an increasing awareness among consumers of the benefits in using organic and natural products. Unlike many other companies, our use of natural ingredients will not entail using a small portion of natural ingredients to tout the product as «natural». Our products are created to support optimal benefit to the users by containing ingredients that make a difference. We plan to advertise through handcrafted soap trade shows and marketing campaign at the stores of our future customers, distributors and related. We intend to develop and maintain a database of potential customers who may want to purchase handcrafted soap from us. We will follow up with these clients periodically, send them our new catalogues and offer them special discounts from time to time. In future we plan to print flyers and mail them to potential customers. We intend to use marketing methods, such as web advertisements, direct mailing, and phone calls to acquire potential customers
We intend for our products to have the following characteristics:
§ Moisturizing, non-irritating, softening, cleansing and nourishing
§ No synthetic preservatives, colors or fragrances
§ No Sodium Laureth (Lauryl) Sulfate to irritate skin (we use coconut oil to lather)
§ No Petro-chemicals, lanolin or mineral oil
Brief History of Our Products
Soap making history goes back many thousands years. The most basic supplies for soap making were those taken from animal and nature; many people made soap by mixing animal fats with lye. Today, soap is produce from fats and an alkali. The cold process method is the most popular soap making process today, while some soap makers use the historical hot process.
In the early beginnings of soap making, it was an exclusive technique used by small groups of soap makers. Over time, recipes for soap making became more widely known. Back then, plant byproducts and animal and vegetable oils were the main ingredients of soap. The price of soap was significantly reduced in 1791 when a Frenchman by the name of LeBlanc discovered a chemical process that allowed soap to be sold for significantly less money.
More than 20 years later, another Frenchman identified relationships between glycerin, fats and acid what marked the beginning of modern soap making. Since that time, there have been no major discoveries and the same processes are used for the soap making we use and enjoy today.
In the mid-nineteenth century, soap for bathing became a separate commodity from laundry soap, with milder soaps being packaged, sold and made available for personal use. Liquid hand soaps were invented in the 1970s and this invention keeps soaps in the public view.
Types of Handcrafted Soap
While the chemical reaction that creates soap is always the same, different types of soaps can be made by different methods, all still relying upon that basic chemical reaction that occurs.
Cold Process Soap
Cold process soap making is the method most often used by soap makers who make soap from scratch. It is called «cold» process because no additional heat is added during the soap making process; however the process itself does generate heat.
Handcrafted soap makers generally pride themselves on their unique recipes, developed to create their signature soaps. Soap ingredients are usually food-quality, natural ingredients starting with a variety of vegetable oils such as olive, coconut, or palm, or purified tallow or lard. To these the soap maker might add specialized oils, nut butters or seed extracts to bring the desired qualities to the finished bar.
Soaps produced via the cold process method are opaque and usually have a creamy feel to the bar. Without any additives that change the color, the soap ranges from white-white to creamy-tan, depending on the oils used in making the soap.
The feel of the lather varies, also dependent upon the oils used to make the soap. The lather can range from tiny, very slippery, long-lasting bubbles (as with pure olive oil soap), to big, fluffy, short-lived bubbles (as with pure coconut oil soap).
The hardness of the bar is determined by the selection of oils, the amount of water used and how long the soap was dried. Cold process soaps will continue to get harder as they age because additional water evaporates out of the soap.
Most cold process soaps are made with a combination of oils, in a recipe developed by the soap maker to create a good lather and hard bar, as well as to provide benefits with additional ingredients.
Hot Process Soap
In hot process soap making, additional heat is applied to the soap mixture. The chemical reaction is the same, but occurs faster than in cold process soap making. Because of the additional heat, the finished soap bar tends to feel smoother to the touch. The hardness of the bar again depends on the selection of oils, amount of water used in the process and length of time allowed for water to evaporate out of the finished bar.
As with cold process soap, the hot process soap is opaque and ranges from white-white to creamy-tan depending on the oils used, although clear soaps can be produced (see «Transparent Soap» below).
The oils determine the type and quality of the lather and other benefits of the soap and other ingredients selected to make the soap.
Transparent Soap is made by the hot process method, with some added ingredients and steps in the process to make the soap clear. There are a few highly skilled handcrafted soap makers who produce transparent soap from scratch, but a majority of handcrafted transparent soaps on the market are produced from a ready-made soap base.
Glycerin is a by-product of the chemical reaction of the soap making process. In commercial soaps, the glycerin is typically removed, purified and then sold for other uses including food, cosmetics, various industrial production and explosive manufacturing. The method for removing the glycerin from soap is complex and requires considerable equipment and skill. As a result, all handcrafted soaps made from scratch retain the glycerin (and all its beneficial properties) and so are all technically «glycerin soap».
Subsequently, the term «glycerin soap» is somewhat of a misnomer. Most people using the term «glycerin soap» are, in fact, referring to transparent soap.
Ready-Made Soap Bases
Rather than make soap from scratch, some soap makers choose to purchase ready-made soap bases which are melted down, have color, scent or other ingredients added and are then poured into molds.
The benefit to using a ready-made soap base is that the chemical reaction which produces soap has already occurred, making it easier for the handcrafter to craft elegantly and uniquely shaped and colored soaps. Many of the artistic presentations of handcrafted soap can only be created with a ready-made soap base.
A ready-made soap base may be a «true soap» (made via the chemical reaction referred to above) or could include synthetic detergents as all or a portion of its ingredients.
There are some basic recipes we used for production our handcrafted soap:
Development, Production and Distribution
Our officer and director, Iryna Kologrim, has developed a number of handcrafted soap products, based in part on the above ingredients, using a unique blend of different raw materials. We consider these formulations unique; however, we have no patents pending for our formulations. Our products, while largely formulated with the base of unique ingredients, are still in the development phase. We are currently in the process of finalizing our product formulations. We intend to sample each finalized product and complete the process of choosing all the peripheral items involved in the production and marketing process, including: the shape and size of the product containers; the types of caps; the packaging; the logo and label designs; and unit cartons. We intend to use Hodm Professionals Limited to handle our packaging design. In prestige markets, more than any other, the package is the product. We are in negotiations with Hodm Professionals Limited for various pricing and decorative options for product presentation.
We are planning to develop our online store for distribution the soap. We are in the process of defining the launch schedule and the promotional events that will surround it. We expect our products to be available on the website once we start our significant operations and obtain customers, although a definitive launch date has yet to be determined. Following our online launch, we intend to locate and negotiate with distributors to develop additional channels for our product.
Among all the brands found in this industry, we consider our closest competitors to be Vegenero and Trifillaris is a natural line that reflects our product concept and closely resembles our proposed product line. The concept and creation of the Vegenero and Trifillaris product line, like ours, is an extrapolation on the benefits of the antioxidants, polyphenols, and organic and natural ingredients. The advantage of Vegenero and Trifillaris over our proposed product in the marketplace at this time is twofold: (a) they have been on the market for over a decade and have grown to be a global brand with distribution outlets all over the world; and (b) they serve a larger target audience with a lower price point than we anticipate.
The prime difference between Vegenero or Trifillaris and our proposed product line is expected to be based on the market segment and Certified Organic quality of ingredients that will be included in our products. Therefore, the containers are key to our products' success as well. Further, our brand will use only the highest quality USDA Certified Organic ingredients available, including extracts, producing a highly concentrated preparation of antioxidant polyphenols. We are also using our own uniquely innovative raw materials derived from Certified Organic farmers in China, to process as opposed to only using commercially available raw materials. Our product line will also be packaged in high quality containers with inviting labels, versus the lesser quality plastic tubes and bottles used by Hodm Professionals Limited. We believe these same characteristics, Certified Organic, quality ingredients, and decorative containers, will also help us stand out in the prestige market.
RESEARCH AND DEVELOPMENT EXPENDITURES
We have not incurred any research expenditures since our incorporation.
BANKRUPTCY OR SIMILAR PROCEEDINGS
There has been no bankruptcy, receivership or similar proceeding.
REORGANIZATIONS, PURCHASE OR SALE OF ASSETS
There have been no material reclassifications, mergers, consolidations, or purchase or sale of a significant amount of assets not in the ordinary course of business.
COMPLIANCE WITH GOVERNMENT REGULATION
We will be required to comply with all regulations, rules and directives of governmental authorities and agencies applicable to the construction and operation of any facility in any jurisdiction which we would conduct activities.
We do not believe that any existing or probable government regulation on our business, including any applicable export or import regulation or control imposed by China or Cyprus will have a material impact on the way we conduct our business.
PATENTS, TRADEMARKS AND COPYRIGHTS
We do not own, either legally or beneficially, any patents or trademarks. We intend to protect our website with copyright laws. Beyond our trade name, we do not hold any other intellectual property.
We currently rent our physical property in Cyprus: our office. Our current business address is str. Vizantiou 28, Strovolos, Lefkosia, Cyprus, 2006. Our telephone number is +35722000341. This location serves as our primary office for planning and implementing our business plan. Management believes the current premises arrangements are sufficient for its needs for at least the next 12 months.
EMPLOYEES AND EMPLOYMENT AGREEMENTS
We have no employees as of the date of this prospectus. Our sole officer and director, Iryna Kologrim, is an independent contractor to the Company and currently devotes approximately from 10 to 20 hours per week to company matters. After receiving funding, Iryna Kologrim plans to devote as much time to the operation of the Company as she determines is necessary for her to manage the affairs of the Company. As our business and operations increase, we will assess the need for full time management and administrative support personnel.
Item 1A. Risk Factors
Not applicable to smaller reporting companies.
Item 1B. Unresolved Staff Comments
Not applicable to smaller reporting companies.
Item 2. Description of Property
We do not own any real estate or other properties.
Item 3. Legal Proceedings
We know of no legal proceedings to which we are a party or to which any of our property is the subject which are pending, threatened or contemplated or any unsatisfied judgments against us.
Item 4. Mine Safety Disclosures
Item 5. Market for Common Equity and Related Stockholder Matters
There is a limited public market for our common shares. Our common shares are not quoted on the OTC Bulletin Board at this time. Trading in stocks quoted on the OTC Bulletin Board is often thin and is characterized by wide fluctuations in trading prices due to many factors that may be unrelated to a companys operations or business prospects. We cannot assure you that there will be a market in the future for our common stock.
OTC Bulletin Board securities are not listed or traded on the floor of an organized national or regional stock exchange. Instead, OTC Bulletin Board securities transactions are conducted through a telephone and computer network connecting dealers in stocks. OTC Bulletin Board issuers are traditionally smaller companies that do not meet the financial and other listing requirements of a regional or national stock exchange.
As of July 31, 2018, no shares of our common stock have traded
Number of Holders
As of July 31, 2018, the 3,105,250 issued and outstanding shares of common stock were held by a total of 39 shareholder of record.
o cash dividends were paid on our shares of common stock during the fiscal year ended July 31, 2018and 2017.
Recent Sales of Unregistered Securities
The Company has 75,000,000, $0.001 par value shares of common stock authorized.
On July 25, 2016, the Company issued 2,000,000 shares of common stock to a director for cash proceeds of $2,000 at $0.001 per share.
In May 2017, the Company issued 137,500 shares of common stock for cash proceeds of $5,500 at $0.04 per share.
In June 2017, the Company issued 137,500 shares of common stock for cash proceeds of $5,500 at $0.04 per share.
In August 2017, the Company issued 96,500 shares of common stock for cash proceeds of $3,860 at $0.04 per share.
In September 2017, the Company issued 233,750 shares of common stock for cash proceeds of $9,350 at $0.04 per share.
In October 2017, the Company issued 425,000 shares of common stock for cash proceeds of $17,000 at $0.04 per share.
In November 2017, the Company issued 75,000 shares of common stock for cash proceeds of $3,000 at $0.04 per share.
There were 3,105,250 shares of common stock issued and outstanding as of July 31, 2018.
Purchase of our Equity Securities by Officers and Directors
On July 25, 2016, the Company offered and sold 2,000,000 restricted shares of common stock to our president and director, Iryna Kologrim, for a purchase price of $0.001 per share, for aggregate offering proceeds of $2,000, pursuant to Section 4(2) of the Securities Act of 1933 as he is a sophisticated investor and is in possession of all material information relating to us. Further, no commissions were paid to anyone in connection with the sale of these shares and general solicitation was not made to anyone.
Other Stockholder Matters
Item 6. Selected Financial Data
Not applicable to smaller reporting companies.
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations
The following discussion should be read in conjunction with our financial statements, including the notes thereto, appearing elsewhere in this annual report. The following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward-looking statements. Our audited financial statements are stated in United States Dollars and are prepared in accordance with United States Generally Accepted Accounting Principles.
Results of Operations for the year ended July 31, 2018 and July 31, 2017:
Revenue and cost of goods sold
For the year ended July 31, 2018 and July 31, 2017 the Company generated total revenue of $14,308 and $20,020 from selling products to the customer. The cost of goods sold for the year ended July 31, 2018 and July 31, 2017 was $495 and $804, which represent the cost of raw materials.
Total operating expenses for the year ended July 31, 2018 and July 31, 2017 were $61,518 and $19,778. The operating expenses for the year ended July 31, 2018 included bank charges of $1,509; computer and internet expenses of $3,075; depreciation expense of $3,369; business filing expenses of $650; professional fees of $14,458; audit fees of $7,220; legal fees of $2,000; rent expense of $8,460; repairs and maintenance of $19,626; utilities of $1,151. The operating expenses for the year ended July 31, 2017 included bank charges of $1,337; foreign exchange loss of $153; computer and internet expenses of $280; depreciation expense of $663; audit fees of $5,350; legal fees of $4,427; rent expense of $3,300.
The net loss for the year ended July 31, 2018 and July 31, 2017 was $47,705 and $562 accordingly.
Liquidity and Capital Resources and Cash Requirements
At year ended July 31, 2018, the Company had cash of $876 ($3,491 as of July 31, 2017). Furthermore, the Company had a working capital deficit of $11,211 (of $67 as of July 31, 2017). The increase in working capital is attributed to sale of stock.
During the year ended July 31, 2018, the Company used $35,812 of cash in operating activities due to its net loss and decrease in prepaid expenses of $3,600, increase in inventory of $1,071, increase in accounts payable of $6,000 and depreciation of $3,368.
During the year ended July 31, 2018 the Company used no cash in investing activities.
During the year ended July 31, 2018, the Company generated $33,197 of cash in financing activities.
We cannot guarantee that we will manage to sell all the shares required. We will attempt to raise the necessary funds to proceed with all phases of our plan of operation.
As of the date of this report, the current funds available to the Company will not be sufficient to continue maintaining a reporting status. The Companys sole officer and director, Iryna Kologrim, has concluded a verbal agreement with the Clancy Corp. in order to fund completion of the registration process and to maintain the reporting status with SEC.
Our auditors have issued a going concern opinion, meaning that there is substantial doubt we can continue as an on-going business for the next twelve months unless we obtain additional capital. Our only sources for cash at this time are investments by others in this offering, selling our paper dung products and loans from our director. We must raise cash to implement our plan and stay in business.
Management believes that current trends toward lower capital investment in start-up companies pose the most significant challenge to the Companys success over the next year and in future years. Additionally, the Company will have to meet all the financial disclosure and reporting requirements associated with being a publicly reporting company. The Companys management will have to spend additional time on policies and procedures to make sure it is compliant with various regulatory requirements, especially that of Section 404 of the Sarbanes-Oxley Act of 2002. This additional corporate governance time required of management could limit the amount of time management has to implement is business plan and impede the speed of its operations.
Limited operating history; need for additional capital
There is no historical financial information about us upon which to base an evaluation of our performance. We are in a start-up stage of operations and have generated limited revenues since inception. We cannot guarantee that we will be successful in our business operations. Our business is subject to risks inherent in the establishment of a new business enterprise, including limited capital resources and possible cost overruns due to price and cost increases in services and products.
Off-Balance Sheet Arrangements
The Company does not have any off balance sheet arrangements that have or are reasonably likely to have a current or future effect on the Company's financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.
Item 7A. Quantitative and Qualitative Disclosures about Market Risk
Not applicable to smaller reporting companies.
Item 8. Financial Statements and Supplementary Data