CONTENTS
BALANCE SHEETS
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43
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STATEMENTS OF OPERATIONS
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44
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STATEMENTS OF CASH FLOWS
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45
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NOTES TO THE AUDITED FINANCIAL STATEMENTS
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46
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UNIQUE UNDERWRITERS, INC.
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BALANCE SHEETS
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AS OF SEPTEMBER 30, 2012 AND JUNE 30, 2012
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September 30,
2012
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June 30,
2012
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(UNAUDITED)
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(AUDITED)
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ASSETS
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CURRENT ASSETS:
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Cash
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$
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—
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|
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$
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19,156
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|
TOTAL CURRENT ASSETS
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—
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19,156
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TOTAL ASSETS
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$
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—
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$
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19,156
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LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
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CURRENT LIABILITIES
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Accounts payable
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$
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31,574
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$
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63,995
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Accrued payroll taxes
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21,549
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16,700
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Checks in excess of bank balance
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742
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—
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Customer deposit
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1,500
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1,500
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Unsecured demand loan payable
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250,000
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250,000
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TOTAL CURRENT LIABILITIES
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305,365
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332,195
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STOCKHOLDERS' EQUITY (DEFICIT)
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Common stock ($0.001 par value, 1,000,000,000 shares authorized; 77,460,612 and 77,460,612 shares issued and outstanding at September 30, 2012 and June 30, 2012, respectively)
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77,461
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77,461
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Class A preferred stock ($0.001 par value with 10:1 conversion and voting rights, 100,000,000 shares authorized; - and - shares issued and outstanding at September 30, 2012 and June 30, 2012, respectively)
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—
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—
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Class B preferred stock ($0.001 par value with 1:1 conversion and voting rights, 50,000,000 shares authorized; - and - shares issued and outstanding at September 30, 2012 and June 30, 2012, respectively)
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—
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—
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Additional paid in capital
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10,918,611
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10,918,611
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Retained deficit
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(11,301,438
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)
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(11,309,111
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)
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TOTAL STOCKHOLDERS' EQUITY (DEFICIT)
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(305,365
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)
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(313,040
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)
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
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$
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—
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$
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19,156
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The accompanying notes are an integral part of these financial statements
UNIQUE UNDERWRITERS, INC.
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STATEMENTS OF OPERATIONS (UNAUDITED)
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FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2012 AND 2011
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For the three months ended
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September 30,
2012
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September30,
2011
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REVENUES
:
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Insurance sales commissions
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$
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447,102
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$
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384,187
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Lead sales commissions
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223,276
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160,135
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Total commission
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670,377
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544,322
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Cost of sales
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(304,700
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)
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(316,346
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)
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Gross profit
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365,677
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227,976
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EXPENSES:
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Consulting fees
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31,727
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37,185
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Contract labor
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61,486
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73,165
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Payroll and related taxes
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160,129
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89,379
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Computer/internet expenses
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4,755
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4,447
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Credit card processing fee
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6,026
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5,399
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Professional fees
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12,210
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9,620
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Insurance expenses
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19,343
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18,713
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Rent
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20,174
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14,574
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Other general and administrative expenses
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38,147
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48,390
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Total expenses
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353,998
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300,872
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Income (loss) from operations
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$
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11,680
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$
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(72,896
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)
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Interest income
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124
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13
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Loss before income taxes
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11,804
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(72,883
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)
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Provision for income taxes
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(4,131
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)
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—
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NET INCOME(LOSS)
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$
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7,673
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$
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(72,883
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)
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Basic and fully diluted net (loss) per common share:
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*
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*
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Weighted average common shares outstanding
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77,460,612
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75,192,642
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The accompanying notes are an integral part of these consolidated financial statements
UNIQUE UNDERWRITERS, INC.
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STATEMENTS OF CASH FLOWS (UNAUDITED)
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FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2012 AND 2011
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For the three months ended
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September 30,
2012
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September 30,
2011
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CASH FLOWS FROM OPERATING ACTIVITIES:
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Net income (loss)
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$
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7,673
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$
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(72,883
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)
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Adjustments to reconcile (net loss) to net cash
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(used in) operations:
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Increase (decrease) in operating liabilities
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Accounts payable
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(32,421
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)
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63,691
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Checks in excess of bank balance
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742
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Customer deposit
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—
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(8,665
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)
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Accrued payroll taxes
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4,850
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—
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NET CASH (USED IN) OPERATING ACTIVITIES
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(19,156
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)
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(17,857
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)
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CASH FLOWS FROM FINANCING ACTIVITIES:
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Stock redemption and cancellation
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—
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(8,001
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)
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NET CASH PROVIDED BY FINANCING ACTIVITIES
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—
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(8,001
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)
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NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
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(19,156
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)
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(25,858
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)
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CASH AND CASH EQUIVALENTS,
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BEGINNING OF THE YEAR
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19,156
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41,269
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END OF THE PERIOD
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$
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—
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$
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15,410
|
|
The accompanying notes are an integral part of these financial statements
Unique Underwriters, Inc.
Notes to unaudited financial statements
NOTE 1
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 holder’s death, so that his/her family doesn’t 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 a 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.
Funeral 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. Funeral 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 if: a) prefer to delay taxes to a later date; b) are already contributing all you can to your IRA or qualified plan; c) are comfortable that you won’t need extra money immediately; d) prefer a minimum guaranteed interest rate. The Company 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.
Management’s 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.
Reclassification
Certain amounts in the prior years' consolidated financial statements have been reclassified to conform with the current year presentation
Deferred Taxes
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.
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:
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(i)
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persuasive evidence of an arrangement exists,
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(ii)
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the services have been rendered and all required milestones achieved,
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(iii)
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the sales price is fixed or determinable, and
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(iv)
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collectability is reasonably assured.
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The approval from the Company’s insurance carriers, which occurs upon receipt of our commission check and the policy, is 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 rent leads and simultaneously their credit card is processed and the leads are distributed to them. The Company recognizes revenue when the agent submits an order to rent the leads for 30 days. After thirty days the leads become available for rental to another agent. Leads may be rented multiple times at decreasing rates due to the lead’s age and number of times it has been rented.
Membership revenue recognition occurs when an agent registers for one of the Company’s websites online and submits their payment information; the agent must give 30 days notice of request to cancel their membership. The Company recognizes revenue related to our various membership plans as income on a straight-line basis over the length of membership period.
The customer deposit is strictly related to Executive Membership Package. After submitting a $500 deposit, an Executive Member can request that the Company directly mail letters to new home owners and/or senior citizens to generate new direct mail response leads. The Company refunds these deposits back to Executive Members when they no longer request that the Company directly mail letters to new home owners and/or senior citizens to generate new direct mail response leads. However, the Executive Members may also apply these deposits towards the leads sale or membership fees in the future. After the Executive Member cancels his or her direct mail service, he or her has the choice to use these deposits for additional leads, request that the deposits be applied towards membership, or ask for refunds. If deposits are used for additional leads, revenue is recognized when services are realized or realizable and earned. If deposits are used for membership fees, revenue is recognized over the length of membership period. For the fiscal year ended June 30, 2010, the Company refunded $1,000 to Executive Members; for the fiscal year ended June 30, 2011, the Company refunded $28,354 to Executive Members; for the fiscal year ended June 30, 2012, the Company refunded $9,845 to Executive Members. For the three months ended September 30, 2012, the Company did not issue any refunds to Executive Members.
Cost of Sales
- The Company’s 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 include 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 periods 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 September 30 and June 30, 2012.
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.
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.
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:
Level 1
|
Quoted market prices available in active markets for identical assets or liabilities as of the reporting date.
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Level 2
|
Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date.
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Level 3
|
Pricing inputs that are generally observable inputs and not corroborated by market data.
|
The carrying amounts of the Company’s financial assets and liabilities, such as cash, accounts payable, deferred revenue, customer deposits and notes 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 September 30 and June 30, 2012 nor gains or losses are reported in the statements 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 three months ended September 30, 2012 and 2011.
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 IFRS”. The amendment results in a consistent definition of fair value and ensures the fair value measurement and disclosure requirements are similar between GAAP and International Financial Reporting Standards (“IFRS”). This amendment changes certain fair value measurement principles and enhances the disclosure requirements particularly for Level 3 fair value measurements. This amendment will be effective for the Company on January 1, 2012. Based on current operations, the adoption is not expected to have a material effect on our financial position or results of operations.
In June 2011, the Financial Accounting Standards Board (“FASB”) issued ASU 2011-05, “Comprehensive Income (Topic 220), and Presentation of Comprehensive Income”. ASU 2011-05 amends the presentation of other comprehensive income and the Statements of Operations. Under this amendment, entities will be required to present the total of comprehensive income, the components of net income, and the components of other comprehensive income either in a single continuous statement of comprehensive income or in two separate but consecutive statements. Regardless of which reporting option is selected, the Company is required to present on the face of the financial statements, reclassification adjustments for items that are reclassified from other comprehensive income to net income in the statements where the components of net income and the components of other comprehensive income are presented. The current option to report other comprehensive income and its components in the statement of changes in equity has been eliminated. This amendment will be effective for the Company on January 1, 2012 and full retrospective application is required. We do not anticipate that this amendment will have a material impact on our financial statements.
Effecting certain sections covered under ASU 2011-05, in December, 2011, the FASB issued ASU 2011-12, “Comprehensive Income (Topic 220)”, Deferral of the Effective Date for Amendments to the Presentation of Reclassifications of Items out of Accumulated Other Comprehensive Income in ASU 2011-05”. The pronouncement is effective for fiscal years and interim periods beginning January 1, 2012 with retrospective application for all comparative periods presented. The Company’s adoption of the new standard is not expected to have a material effect on our financial position or results of operations.
In September 2011, the Financial Accounting Standards Board (“FASB”) issued ASU 2011-08, “Intangibles – Goodwill and Other (Topic 350), Testing Goodwill for Impairment”. ASU 2011-08 amends the required annual impairment testing of goodwill by providing an entity an option to first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If, after assessing the totality of events and circumstances, an entity determines it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, then performing the two-step impairment test under Topic 350-24 and Topic 350-20-35-9 is unnecessary. However, if an entity concludes otherwise, then it is required to perform the impairment testing under Topic 350-24 by calculating the fair value of the reporting unit and comparing the results with the carrying amount. If the fair value exceeds the carrying amount, then the entity must perform the second step test of measuring the amount of the impairment test under Topic 350-20-35-9.
An entity has the option to bypass the qualitative assessment and proceed directly to the two step goodwill impairment test. Additionally, the entity has the option to resume with the qualitative testing in any subsequent period. The amendment will be effective for the Company on January 1, 2012. Based on current operations, the adoption is not expected to have a material effect on our financial position or results of operations.
In December 2011, the FASB issued ASU 2011-11, “Balance Sheet (Topic 210), Disclosures about Offsetting Assets and Liabilities”. The guidance in this update requires us to disclose information about offsetting and related arrangements to enable users of our financial statements to understand the effect of those arrangements on our financial position. The pronouncement is effective for fiscal years and interim periods beginning on or after January 1, 2013 with retrospective application for all comparative periods presented. Our adoption of the new standard is not expected to have a material effect on our financial position or results of operations.
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.
NOTE 2
INCOME TAXES
At September 30, 2012, the Company had federal and state net operating loss carry forwards of approximately $996,000 that expire in various years through the year 2032.
Due to operating losses, there is no provision for current federal or state income taxes for the three months ended September 30, 2012 and 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 Company’s deferred tax asset at September 30, 2012 consists of net operating loss carry forwards calculated using federal and state effective tax rates equating to approximately $348,000 less a valuation allowance in the amount of approximately $348,000. Because of the Company’s lack of earnings history, the deferred tax asset has been fully offset by a valuation allowance. The valuation allowance increased (decreased) by approximately ($3,000) and $25,000 for the three months ended September 30, 2012 and 2011, respectively.
The Company’s total deferred tax asset as of September 30, 2012 and 2011 are as follows:
|
|
2012
|
|
2011
|
|
|
|
|
|
Total deferred tax asset
|
|
$
|
348,000
|
|
|
$
|
278,000
|
|
Valuation allowance
|
|
|
(348,000
|
)
|
|
|
(278,000
|
)
|
Net deferred tax asset
|
|
$
|
—
|
|
|
$
|
—
|
|
The reconciliation of income taxes computed at the federal and state statutory income tax rate to total income taxes for the three months ended September 30, 2012 and 2011 are as follows:
|
|
2012
|
|
2011
|
Income tax computed at the federal statutory rate
|
|
|
35
|
%
|
|
|
35
|
%
|
Valuation allowance
|
|
|
(35
|
%)
|
|
|
(35
|
%)
|
Total deferred tax asset
|
|
|
0
|
%
|
|
|
0
|
%
|
NOTE 3
CAPITAL STOCK
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 three months ended September 30, 2011, the Company repurchased and retired 226,670 shares of common stock from former shareholders for a total of $8,001.
No stock has been issued for the three months ended September 30, 2012.
NOTE 4
LEASE AND EMPLOYMENT COMMITMENTS AND RELATED PARTY TRANSACTION
The Company has a three year lease at $5,330 per month with an unrelated party. The lease expires 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:
2012
|
|
$
|
74,040
|
|
2013
|
|
|
74,040
|
|
2014
|
|
|
63,380
|
|
2015
|
|
|
10,080
|
|
2016
|
|
|
9,240
|
|
|
|
$
|
230,780
|
|
We have amended the Employment Agreement in order to clarify how the bonus payment is determined, among other things. This amendment is now included as part of Exhibit 10.5. With respect to the bonus payment, we have revised footnote 2 to the Summary Compensation Table to clarify that the bonus is in the amount of 5% of total annual revenue received by the Company and to state that this bonus payment is provided for through the Employment Agreement, as amended by the First Amendment thereto, filed as Exhibit 10.5. The amendment to the Employment Agreement includes, in relevant part, an amendment and restatement of Section 3.1 a. and b. of Article III of the Employment Agreement are hereby amended in their entireties to read as follows:
a. an annual salary of $130,000, payable to Employee on a weekly basis; and
b. an amount equal to 5% of Total Annual Revenue received by Employer, described below, determined on a cash basis during each fiscal year, provided and on the condition that Employee’s employment by Employer is not terminated by Employer pursuant to Article IV hereof. “
Total Annual Revenue
” shall be defined herein the total revenue received by Employer during its fiscal year from all sources, including but not limited to, insurance commissions, leads and sales of membership packages. All payments due under this Section 3.1 shall be paid within thirty (30) days after determination of the Total Annual Revenue by Employer.
|
1.
|
We have revised the language describing Mr. Wolfe’s employment agreement to remove the references to “Employer” and “Employee” and instead refer to “the Company” and “Mr. Wolfe” to remove any confusion. In addition, we have revised the description of the termination provision of Mr. Wolfe’s Employment Agreement to reflect a change made by the First Amendment, which is now included as part of Exhibit 10.5, to remove the implication that Mr. Wolfe may only voluntarily terminate his employment with Mr. Simpson’s consent.
|
|
2.
|
Employer hereby employs Employee, and Employee hereby accepts employment with Employer, for a period commencing on August 8, 2011 (the “commencement date”), and continuing until terminated as provided in this Agreement. This agreement has no fixed term and will terminate pursuant to the terms listed below.
|
The agreement shall
immediately terminate upon the occurrence of any one of the following events:
|
a.
|
Employee
’
s death;
|
|
|
|
|
b.
|
Employee
’
s permanent disability as determined by the Employer;
|
|
c.
|
Employee is convicted by a court of competent jurisdiction of fraud, misappropriation, embezzlement, dishonesty, or other similar act; or
|
The First Amendment includes, in relevant part, an amendment and restatement of Section 4.1 d. of Article IV of the Employment Agreement in its entirety, to read as follows:
“if Employee should voluntarily terminate his employment with Employer.”
NOTE 5
LOSS PER SHARE
Loss per share is computed by dividing the net loss by the weighted average number of common shares outstanding during the periods. Basic and diluted loss per share was the same for the three months ended September 30, 2012 and 2011.
NOTE 6
SUPPLEMENTAL CASH FLOW INFORMATION
Supplemental disclosures of cash flow information for the three months ended September 30, 2012 and 2011 are summarized as follows:
Cash paid during the period for interest and income taxes:
|
|
|
2012
|
|
|
|
2011
|
|
|
|
|
|
|
|
|
|
|
Income Taxes
|
|
$
|
-0-
|
|
|
$
|
-0-
|
|
Interest
|
|
$
|
-0-
|
|
|
$
|
-0-
|
|
NOTE 7
GOING CONCERN AND UNCERTAINTY
The Company has suffered recurring losses from operations since inception and has a negative working capital. In addition, the Company has yet to generate an internal cash flow from its business operations. The Company had no assets and were in a book overdraft position as a result of issuing more checks than cash available on hand at September 30, 2012. These factors raise substantial doubt as to the ability of the Company to continue as a going concern
Management’s plans with regard to these matters encompass the following actions: 1) obtain funding from new investors to alleviate the Company’s working deficiency, and 2) implement a plan to generate sales. The Company’s continued existence is dependent upon its ability to resolve it liquidity problems and increase profitability in its current business operations. However, the outcome of management’s 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.
NOTE 8
UNSECURED DEMAND LOAN PAYABLE
As of September 30, 212, the Company had unsecured demand loan payable in amount of $250,000, which was borrowed from an unrelated party during the year ended June 30, 2012. There is no written agreement between the Company and the party. The loan is unsecured, interest free and repayable currently. The effects of imputed interest are immaterial to the financial statements taken as a whole.
NOTE 9
SEGMENT REPORTING
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 September 30 and June 30, 2012.
AUDITED FINANCIAL STATEMENTS
UNIQUE UNDERWRITERS, INC.
JUNE 30, 2012
Bongiovann
i &
Associates, CPA’s
FL Office
7951 SW 6th St., Suite. 216
Plantation, FL 33324
Tel: 954-424-2345
Fax: 954-424-2230
NC Office
19720 Jetton Road, 3rd Floor
Cornelius, NC 28031
Tel: 704-892-8733
Fax: 704-892-6487
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors
Unique Underwriters, Inc.
We have audited the accompanying balance sheets of Unique Underwriters, Inc. (“the Company”) as of June 30, 2012 and 2011 and the related statements of operations, changes in stockholders’ deficit, and cash flows for the years ended June 30, 2012 and 2011. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our 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 audits 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 Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Unique Underwriters, Inc. as of June 30, 2012 and 2011, and the results of its operations, changes in stockholders’ deficit and cash flows for the years ended June 30, 2012 and 2011 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. Management’s 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, CPA’s
Bongiovanni & Associates, CPA’s
Cornelius, North Carolina
October 3, 2012
UNIQUE UNDERWRITERS, INC.
|
BALANCE SHEETS
|
AS OF JUNE 30, 2012 AND 2011
|
|
|
June 30, 2012
|
|
|
June 30, 2011
|
|
|
|
|
|
|
(Restated)
|
|
ASSETS
|
|
|
|
|
|
|
CURRENT ASSETS:
|
|
|
|
|
|
|
Cash
|
|
$
|
19,156
|
|
|
$
|
41,269
|
|
TOTAL CURRENT ASSETS
|
|
|
19,156
|
|
|
|
41,269
|
|
|
|
|
|
|
|
|
|
|
TOTAL ASSETS
|
|
$
|
19,156
|
|
|
$
|
41,269
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
|
|
|
|
|
|
|
|
|
CURRENT LIABILITIES
|
|
|
|
|
|
|
|
|
Accounts payable
|
|
$
|
63,995
|
|
|
$
|
37,587
|
|
Accrued payroll taxes
|
|
|
16,700
|
|
|
|
—
|
|
Customer deposit
|
|
|
1,500
|
|
|
|
28,997
|
|
Unsecured demand loan payable
|
|
|
250,000
|
|
|
|
—
|
|
TOTAL CURRENT LIABILITIES
|
|
|
332,195
|
|
|
|
66,584
|
|
|
|
|
|
|
|
|
|
|
STOCKHOLDERS' EQUITY (DEFICIT)
|
|
|
|
|
|
|
|
|
Common stock ($0.001 par value, 1,000,000,000 shares authorized; 77,460,612 and 75,387,282 shares issued and outstanding at June 30, 2012 and 2011, respectively)
|
|
|
77,461
|
|
|
|
75,387
|
|
Class A preferred stock ($0.001 par value with 10:1 conversion and voting rights, 100,000,000 shares authorized; - and - shares issued and outstanding at June 30, 2012 and 2011, respectively)
|
|
|
—
|
|
|
|
—
|
|
Class B preferred stock ($0.001 par value with 1:1 conversion and voting rights, 50,000,000 shares authorized; - and - shares issued and outstanding at June 30, 2012 and 2011, respectively)
|
|
|
—
|
|
|
|
—
|
|
Additional paid in capital
|
|
|
10,918,611
|
|
|
|
10,583,686
|
|
Retained deficit
|
|
|
(11,309,111
|
)
|
|
|
(10,684,387
|
)
|
TOTAL STOCKHOLDERS' EQUITY (DEFICIT)
|
|
|
(313,040
|
)
|
|
|
(25,315
|
)
|
|
|
|
|
|
|
|
|
|
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
|
|
$
|
19,156
|
|
|
$
|
41,269
|
|
The Report of Independent Registered Public Accounting Firm and accompanying notes are an integral part of these financial statements
UNIQUE UNDERWRITERS, INC.
|
STATEMENTS OF OPERATIONS
|
FOR THE YEARS ENDED JUNE 30, 2012 AND 2011
|
|
|
For the year ended
|
|
|
|
June 30, 2012
|
|
|
June 30, 2011
|
|
|
|
|
|
|
(Restated)
|
|
REVENUES:
|
|
|
|
|
|
|
Insurance sales commissions
|
|
$
|
1,741,975
|
|
|
$
|
1,225,497
|
|
Lead sales commissions
|
|
|
750,690
|
|
|
|
700,463
|
|
Total commission
|
|
|
2,492,664
|
|
|
|
1,925,960
|
|
|
|
|
|
|
|
|
|
|
Cost of sales
|
|
|
(1,183,810
|
)
|
|
|
(1,046,887
|
)
|
Gross profit
|
|
|
1,308,854
|
|
|
|
879,073
|
|
|
|
|
|
|
|
|
|
|
EXPENSES:
|
|
|
|
|
|
|
|
|
Consulting fees
|
|
|
144,698
|
|
|
|
102,457
|
|
Contract labor
|
|
|
324,622
|
|
|
|
836,187
|
|
Payroll and related taxes
|
|
|
551,449
|
|
|
|
200,692
|
|
Computer/internet expenses
|
|
|
23,606
|
|
|
|
46,425
|
|
Credit card processing fee
|
|
|
18,114
|
|
|
|
35,302
|
|
Stock issued for services rendered
|
|
|
345,000
|
|
|
|
9,961,251
|
|
Professional fees
|
|
|
48,523
|
|
|
|
23,250
|
|
Insurance expenses
|
|
|
62,458
|
|
|
|
37,070
|
|
Rent
|
|
|
67,357
|
|
|
|
80,737
|
|
Other general and administrative expenses
|
|
|
347,767
|
|
|
|
108,671
|
|
Total expenses
|
|
|
1,933,593
|
|
|
|
11,432,042
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from operations
|
|
$
|
(624,739
|
)
|
|
$
|
(10,552,969
|
)
|
|
|
|
|
|
|
|
|
|
Interest income
|
|
|
15
|
|
|
|
198
|
|
|
|
|
|
|
|
|
|
|
Loss before income taxes
|
|
|
(624,724
|
)
|
|
|
(10,552,771
|
)
|
|
|
|
|
|
|
|
|
|
Provision for income taxes
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
NET (LOSS)
|
|
$
|
(624,724
|
)
|
|
$
|
(10,552,771
|
)
|
|
|
|
|
|
|
|
|
|
Basic and fully diluted net (loss) per common share:
|
|
$
|
(0.01
|
)
|
|
$
|
(0.56
|
)
|
|
|
|
|
|
|
|
|
|
Weighted average common shares outstanding
|
|
|
75,681,505
|
|
|
|
18,795,185
|
|
The Report of Independent Registered Public Accounting Firm and accompanying notes are an integral part of these financial statements.
UNIQUE UNDERWRITERS, INC.
|
STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT)
|
FOR THE YEARS ENDED JUNE 30, 2012 AND 2011
|
|
|
Common Stock
|
|
|
|
|
|
Additional
|
|
|
(Restated)
|
|
|
(Restated)Stockholders'
|
|
|
|
Shares
|
|
|
Amount
(Par value $0.001)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balances, June 30, 2010
|
|
|
1,000
|
|
|
$
|
—
|
|
|
$
|
(28,500
|
)
|
|
$
|
100,000
|
|
|
$
|
(131,616
|
)
|
|
$
|
(60,116
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock issued for services rendered
|
|
|
66,400,817
|
|
|
|
66,401
|
|
|
|
—
|
|
|
|
9,894,850
|
|
|
|
—
|
|
|
|
9,961,251
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock issued for cash
|
|
|
8,985,465
|
|
|
|
8,985
|
|
|
|
28,500
|
|
|
|
588,836
|
|
|
|
—
|
|
|
|
626,322
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss for the year ended June 30, 2011
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(10,552,771
|
)
|
|
|
(10,552,771
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balances, June 30, 2011
|
|
|
75,387,282
|
|
|
$
|
75,387
|
|
|
$
|
—
|
|
|
$
|
10,583,686
|
|
|
$
|
(10,684,387
|
)
|
|
$
|
(25,315
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock issued for services rendered
|
|
|
2,300,000
|
|
|
|
2,300
|
|
|
|
—
|
|
|
|
342,700
|
|
|
|
—
|
|
|
|
345,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock redemption and cancellations
|
|
|
(226,670
|
)
|
|
|
(227
|
)
|
|
|
|
|
|
|
(7,774
|
)
|
|
|
—
|
|
|
|
(8,001
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss for the year ended June 30, 2012
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(624,724
|
)
|
|
|
(624,724
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balances, June 30, 2012
|
|
|
77,460,612
|
|
|
$
|
77,461
|
|
|
$
|
—
|
|
|
$
|
10,918,611
|
|
|
$
|
(11,309,111
|
)
|
|
$
|
(313,040
|
)
|
The Report of Independent Registered Public Accoutning Firm and accompanying notes are an integral part of these financial statements.
UNIQUE UNDERWRITERS, INC.
|
STATEMENTS OF CASH FLOWS
|
FOR THE YEARS ENDED JUNE 30, 2012 AND 2011
|
|
|
For the year ended June 30,
|
|
|
|
2012
|
|
|
2011
|
|
|
|
|
|
|
(Restated)
|
|
CASH FLOWS FROM OPERATING ACTIVITIES:
|
|
|
|
|
|
|
Net (loss)
|
|
$
|
(624,724
|
)
|
|
$
|
(10,552,771
|
)
|
Adjustments to reconcile (net loss) to net cash
(used in) operations:
|
|
|
|
|
|
|
|
|
Stock issued for services rendered
|
|
|
345,000
|
|
|
|
9,961,251
|
|
Increase (decrease) in operating liabilities
|
|
|
|
|
|
|
|
|
Accounts payable
|
|
|
26,408
|
|
|
|
(8,703
|
)
|
Customer deposit
|
|
|
(27,497
|
)
|
|
|
(8,003
|
)
|
Accrued payroll taxes
|
|
|
16,700
|
|
|
|
—
|
|
NET CASH (USED IN) OPERATING ACTIVITIES
|
|
|
(264,113
|
)
|
|
|
(608,226
|
)
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM FINANCING ACTIVITIES:
|
|
|
|
|
|
|
|
|
Issuance of common shares to accredited investors
|
|
|
—
|
|
|
|
626,322
|
|
Incurrence of unsecured demand loan payable
|
|
|
250,000
|
|
|
|
—
|
|
Stock redemption and cancellation
|
|
|
(8,001
|
)
|
|
|
—
|
|
NET CASH PROVIDED BY FINANCING ACTIVITIES
|
|
|
242,000
|
|
|
|
626,322
|
|
|
|
|
|
|
|
|
|
|
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
|
|
|
(22,113
|
)
|
|
|
18,096
|
|
|
|
|
|
|
|
|
|
|
CASH AND CASH EQUIVALENTS,
|
|
|
|
|
|
|
|
|
BEGINNING OF THE YEAR
|
|
|
41,269
|
|
|
|
23,174
|
|
|
|
|
|
|
|
|
|
|
END OF THE YEAR
|
|
$
|
19,156
|
|
|
$
|
41,269
|
|
The Report of Independent Registered Public Accounting Firm and accompanying notes are an integral part of these financial statements
Unique Underwriters, Inc.
Notes to audited financial statements
June 30, 2012
NOTE 1
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 holder’s death, so that his/her family doesn’t 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 a 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.
Funeral 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. Funeral 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 if: a) prefer to delay taxes to a later date; b) are already contributing all you can to your IRA or qualified plan; c) are comfortable that you won’t need extra money immediately; d) prefer a minimum guaranteed interest rate. The Company 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.
Management’s 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.
Reclassification
Certain amounts in the prior years' consolidated financial statements have been reclassified to conform with the current year presentation
Deferred Taxes
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.
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. 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)
|
the services have been rendered and all required milestones achieved,
|
|
(iii)
|
the sales price is fixed or determinable, and
|
|
(iv)
|
collectability is reasonably assured.
|
The approval from the Company’s insurance carriers, which occurs upon receipt of our commission check and the policy, is 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 rent leads and simultaneously their credit card is processed and the leads are distributed to them. The Company recognizes revenue when the agent submits an order to rent the leads for 30 days. After thirty days the leads become available for rental to another agent. Leads may be rented multiple times at decreasing rates due to the lead’s age and number of times it has been rented.
Membership revenue recognition occurs when an agent registers for one of the Company’s websites online and submits their payment information; the agent must give 30 days notice of request to cancel their membership. The Company recognizes revenue related to our various membership plans as income on a straight-line basis over the length of membership period.
The customer deposit is strictly related to Executive Membership Package. After submitting a $500 deposit, an Executive Member can request that the Company directly mail letters to new home owners and/or senior citizens to generate new direct mail response leads. The Company refunds these deposits back to Executive Members when they no longer request that the Company directly mail letters to new home owners and/or senior citizens to generate new direct mail response leads. However, the Executive Members may also apply these deposits towards the leads sale or membership fees in the future. After the Executive Member cancels his or her direct mail service, he or she has the choice to use these deposits for additional leads, request that the deposits be applied towards membership, or ask for refunds. If deposits are used for additional leads, revenue is recognized when services are realized or realizable and earned. If deposits are used for membership fees, revenue is recognized over the length of membership period. For the fiscal year ended June 30, 2010, the Company refunded $1,000 to Executive Members; for the fiscal year ended June 30, 2011, the Company refunded $28,354 to Executive Members; for the fiscal year ended June 30, 2012, the Company refunded $9,845 to Executive Members.
Cost of Sales
- The Company’s 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 include 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 periods 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 June 30, 2012 and 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.
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 year ended June 30, 2012, the Company recorded $345,000 in compensation 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.
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:
Level 1
|
Quoted market prices available in active markets for identical assets or liabilities as of the reporting date.
|
|
|
Level 2
|
Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date.
|
|
|
Level 3
|
Pricing inputs that are generally observable inputs and not corroborated by market data.
|
The carrying amounts of the Company’s financial assets and liabilities, such as cash, accounts payable, deferred revenue, customer deposits and notes 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 June 30, 2012 and 2011 nor gains or losses are reported in the statements 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 year ended June 30, 2012 and 2011.
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 IFRS”. The amendment results in a consistent definition of fair value and ensures the fair value measurement and disclosure requirements are similar between GAAP and International Financial Reporting Standards (“IFRS”). This amendment changes certain fair value measurement principles and enhances the disclosure requirements particularly for Level 3 fair value measurements. This amendment will be effective for the Company on January 1, 2012. Based on current operations, the adoption is not expected to have a material effect on our financial position or results of operations.
In June 2011, the Financial Accounting Standards Board (“FASB”) issued ASU 2011-05, “Comprehensive Income (Topic 220), and Presentation of Comprehensive Income”. ASU 2011-05 amends the presentation of other comprehensive income and the Statements of Operations. Under this amendment, entities will be required to present the total of comprehensive income, the components of net income, and the components of other comprehensive income either in a single continuous statement of comprehensive income or in two separate but consecutive statements. Regardless of which reporting option is selected, the Company is required to present on the face of the financial statements, reclassification adjustments for items that are reclassified from other comprehensive income to net income in the statements where the components of net income and the components of other comprehensive income are presented. The current option to report other comprehensive income and its components in the statement of changes in equity has been eliminated. This amendment will be effective for the Company on January 1, 2012 and full retrospective application is required. We do not anticipate that this amendment will have a material impact on our financial statements.
Effecting certain sections covered under ASU 2011-05, in December, 2011, the FASB issued ASU 2011-12, “Comprehensive Income (Topic 220)”, Deferral of the Effective Date for Amendments to the Presentation of Reclassifications of Items out of Accumulated Other Comprehensive Income in ASU 2011-05”. The pronouncement is effective for fiscal years and interim periods beginning January 1, 2012 with retrospective application for all comparative periods presented. The Company’s adoption of the new standard is not expected to have a material effect on our financial position or results of operations.
In September 2011, the Financial Accounting Standards Board (“FASB”) issued ASU 2011-08, “Intangibles – Goodwill and Other (Topic 350), Testing Goodwill for Impairment”. ASU 2011-08 amends the required annual impairment testing of goodwill by providing an entity an option to first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If, after assessing the totality of events and circumstances, an entity determines it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, then performing the two-step impairment test under Topic 350-24 and Topic 350-20-35-9 is unnecessary. However, if an entity concludes otherwise, then it is required to perform the impairment testing under Topic 350-24 by calculating the fair value of the reporting unit and comparing the results with the carrying amount. If the fair value exceeds the carrying amount, then the entity must perform the second step test of measuring the amount of the impairment test under Topic 350-20-35-9.
An entity has the option to bypass the qualitative assessment and proceed directly to the two step goodwill impairment test. Additionally, the entity has the option to resume with the qualitative testing in any subsequent period. The amendment will be effective for the Company on January 1, 2012. Based on current operations, the adoption is not expected to have a material effect on our financial position or results of operations.
In December 2011, the FASB issued ASU 2011-11, “Balance Sheet (Topic 210), Disclosures about Offsetting Assets and Liabilities”. The guidance in this update requires us to disclose information about offsetting and related arrangements to enable users of our financial statements to understand the effect of those arrangements on our financial position. The pronouncement is effective for fiscal years and interim periods beginning on or after January 1, 2013 with retrospective application for all comparative periods presented. Our adoption of the new standard is not expected to have a material effect on our financial position or results of operations.
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.
NOTE 2
INCOME TAXES
At June 30, 2012, the Company had federal and state net operating loss carry forwards of approximately $1,003,000 that expire in various years through the year 2032. The $9,961,251 and $345,000 in Note 3 are disallowed for federal income tax deductions.
Due to operating losses, there is no provision for current federal or state income taxes for the years ended June 30, 2012 and 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 Company’s deferred tax asset at June 30, 2012 consists of net operating loss carry forwards calculated using federal and state effective tax rates equating to approximately $351,000 less a valuation allowance in the amount of approximately $351,000. Because of the Company’s lack of earnings history, the deferred tax asset has been fully offset by a valuation allowance. The valuation allowance increased by approximately $98,000 and $207,000 for the years ended June 30, 2012 and 2011, respectively.
The Company’s total deferred tax asset as of June 30, 2012 and 2011 are as follows:
|
|
2012
|
|
|
2011
|
|
|
|
|
|
|
|
|
|
|
Total deferred tax asset
|
|
$
|
351,000
|
|
|
$
|
253,000
|
|
Valuation allowance
|
|
|
(351,000
|
)
|
|
|
(253,000
|
)
|
Net deferred tax asset
|
|
$
|
—
|
|
|
$
|
—
|
|
The reconciliation of income taxes computed at the federal and state statutory income tax rate to total income taxes for the years ended June 30, 2012 and 2011 are as follows:
|
|
|
2012
|
|
|
|
2011
|
|
|
|
|
|
|
|
|
|
|
Income tax computed at the federal statutory rate
|
|
|
35
|
%
|
|
|
35
|
%
|
Valuation allowance
|
|
|
(35
|
%)
|
|
|
(35
|
%)
|
Total deferred tax asset
|
|
|
0
|
%
|
|
|
0
|
%
|
NOTE 3
CAPITAL STOCK
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 year ended June 30, 2011, the Company issued 8,985,465 common shares in exchange for $626,322 in cash collections pursuant to a private placement to accredited investors made under Regulation 504.
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 fair value of this issuance was $9,961,251, or approximately $.15 per share, determined by an arm’s length private placement with non-affiliate investors since there was no trading market for our common stock.
During the year ended June 30, 2012, the Company repurchased and retired 226,670 shares of common stock from former shareholders for a total of $8,001.
During the year ended June 30, 2012, the Company issued as compensation for services provided a total of 2,300,000 common shares with a market value of $345,000 to several parties. The market value of the shares approximated the fair market value of services received.
NOTE 4
LEASE AND EMPLOYMENT COMMITMENTS AND RELATED PARTY TRANSACTION
The Company has a three year lease at $5,330 per month with an unrelated party. The lease expires 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:
2012
|
|
$
|
74,040
|
|
2013
|
|
|
74,040
|
|
2014
|
|
|
63,380
|
|
2015
|
|
|
10,080
|
|
2016
|
|
|
9,240
|
|
|
|
$
|
230,780
|
|
We have amended the Employment Agreement in order to clarify how the bonus payment is determined, among other things. This amendment is now included as part of Exhibit 10.5. With respect to the bonus payment, we have revised footnote 2 to the Summary Compensation Table to clarify that the bonus is in the amount of 5% of total annual revenue received by the Company and to state that this bonus payment is provided for through the Employment Agreement, as amended by the First Amendment thereto, filed as Exhibit 10.5. The amendment to the Employment Agreement includes, in relevant part, an amendment and restatement of Section 3.1 a. and b. of Article III of the Employment Agreement are hereby amended in their entireties to read as follows:
|
a.
|
an annual salary of $130,000.00, payable to Employee on a weekly basis; and
|
|
|
|
|
b.
|
an amount equal to 5% of Total Annual Revenue received by Employer, described below, determined on a cash basis during each fiscal year, provided and on the condition that Employee’s employment by Employer is not terminated by Employer pursuant to Article IV hereof. “
Total Annual Revenue
” shall be defined herein the total revenue received by Employer during its fiscal year from all sources, including but not limited to, insurance commissions, leads and sales of membership packages. All payments due under this Section 3.1 shall be paid within thirty (30) days after determination of the Total Annual Revenue by Employer.
|
|
1.
|
We have revised the language describing Mr. Wolfe’s employment agreement to remove the references to “Employer” and “Employee” and instead refer to “the Company” and “Mr. Wolfe” to remove any confusion. In addition, we have revised the description of the termination provision of Mr. Wolfe’s Employment Agreement to reflect a change made by the First Amendment, which is now included as part of Exhibit 10.5, to remove the implication that Mr. Wolfe may only voluntarily terminate his employment with Mr. Simpson’s consent.
|
|
2.
|
Employer hereby employs Employee, and Employee hereby accepts employment with Employer, for a period commencing on August 8, 2011 (the “commencement date”), and continuing until terminated as provided in this Agreement. This agreement has no fixed term and will terminate pursuant to the terms listed below.
|
The agreement shall immediately terminate upon the occurrence of any one of the following events:
|
a.
|
Employee’s death;
|
|
|
|
|
b.
|
Employee’s permanent disability as determined by the Employer;
|
|
c.
|
Employee is convicted by a court of competent jurisdiction of fraud, misappropriation, embezzlement, dishonesty, or other similar act; or
|
The First Amendment includes, in relevant part, an amendment and restatement of Section 4.1 d. of Article IV of the Employment Agreement in its entirety, to read as follows:
“if Employee should voluntarily terminate his employment with Employer.”
During the year ended June 30, 2012, the Company paid $70,532 in corporate housing for one of its majority shareholders. This corporate housing payment was a one-time benefit.
Loss per share is computed by dividing the net loss by the weighted average number of common shares outstanding during the periods. Basic and diluted loss per share was the same for the year ended June 30, 2012 and 2011.
NOTE 6
SUPPLEMENTAL CASH FLOW INFORMATION
Supplemental disclosures of cash flow information for the years ended June 30, 2012 and 2011 are summarized as follows:
Cash paid during the period for interest and income taxes:
|
|
2012
|
|
|
2011
|
|
|
|
|
|
|
|
|
Income Taxes
|
|
$
|
-0-
|
|
|
$
|
-0-
|
|
Interest
|
|
$
|
-0-
|
|
|
$
|
-0-
|
|
NOTE 7
GOING CONCERN AND UNCERTAINTY
The Company has suffered recurring losses from operations since inception and has a negative working capital. 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.
Management’s plans with regard to these matters encompass the following actions: 1) obtain funding from new investors to alleviate the Company’s working deficiency, and 2) implement a plan to generate sales. The Company’s continued existence is dependent upon its ability to resolve it liquidity problems and increase profitability in its current business operations. However, the outcome of management’s 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.
NOTE 8
UNSECURED DEMAND LOAN PAYABLE
During the year ended June 30, 2012, the Company borrowed $250,000 from an unrelated party. There is no written agreement between the Company and the party. The loan is unsecured, interest free and repayable currently. The effects of imputed interest are immaterial to the financial statements taken as a whole.
NOTE 9
SEGMENT REPORTING
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 June 30, 2012 and 2011.
NOTE 10
RESTATEMENT OF FINANCIAL STATEMENTS
On March 19, 2012, the Company’s management concluded that the Company’s audited financial statements for the year ended June 30, 2011 should no longer be relied upon. Specifically, the issuance of 65,000,000 shares to its founders on March 1, 2011 was re-valued at $.15 per share from $.001 per share, and the issuance of 400,000 shares and 300,000 shares to its services providers on February 8, 2011 and November 19, 2010, respectively, was re-valued at $.15 per share from $.02 per share. As a result, the Company’s net loss changed from $(784,774) to $(10,560,774) for the year ended June 30, 2011. The Company did not find any understatement in expenses for the comparative year ended June 30, 2010.
On August 22, 2012, the Company’s management found some of the Area Lead Request Deposits which should have been recorded as customer deposits has been mistakenly recorded as revenue. Specifically, for the year ended June 30, 2010, the Company received an aggregate of $38,000 the Area Lead Request Deposits, of which $1,000 was refunded to the clients in the same fiscal year, $15,149 turned into revenue in the next fiscal year, $16,506 was refunded to the clients in the fiscal year ended June 30, 2011, $4,845 was refunded to the clients in the fiscal year ended June 30, 2012 and $500 was refunded to a client in the third quarter in 2012. In the financial statements ending June 30, 2010, customer deposits in the amount of $37,000 was recorded in the balance sheet and $37,000 was deducted from revenue in the statement of operation. For the year ended June 30, 2011, the Company received an aggregate of $35,500 the Area Lead Request Deposits, of which $11,848 was refunded to the clients in the same fiscal year, $19,152 turned into revenue in the next fiscal year and $4,500 was refunded to the clients in the fiscal year ended June 30, 2012. In the financial statement ending June 30, 2011, customer deposits was reduced by $8,003 to $28,997 and revenue was increased by $8,003 to $1,925,960.
The following table sets forth all the accounts in the original amounts and restated amounts, respectively.
As of June 30, 2010
|
|
Original
|
|
|
Restated
|
|
|
|
|
|
|
|
|
Customer deposit
|
|
$
|
—
|
|
|
$
|
37,000
|
|
|
|
|
|
|
|
|
|
|
For the year ended June 30, 2010
|
|
Original
|
|
|
Restated
|
|
|
|
|
|
|
|
|
|
|
Total revenue
|
|
$
|
103,668
|
|
|
$
|
66,668
|
|
|
|
|
|
|
|
|
|
|
Statement of Retained Deficit
|
|
|
|
|
|
2010
(as restated
)
|
|
Balance, June 30
|
|
|
|
|
|
$
|
(94,616
|
)
|
Adjustment
|
|
|
|
|
|
$
|
(37,000
|
)
|
Adjusted balance, June 30
|
|
|
|
|
|
$
|
(131,616
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of June 30, 2011
|
|
Original
|
|
|
Restated
|
|
|
|
|
|
|
|
|
|
|
Customer deposit
|
|
$
|
—
|
|
|
$
|
28,997
|
|
Additional paid in capital
|
|
$
|
807,686
|
|
|
$
|
10,583,686
|
|
Retained deficit
|
|
$
|
(879,390
|
)
|
|
$
|
(10,684,387
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the year ended June 30, 2011
|
|
Original
|
|
|
Restated
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
$
|
1,917,957
|
|
|
$
|
1,925,960
|
|
Consulting fee
|
|
$
|
163,958
|
|
|
$
|
102,457
|
|
Stock issued for service rendered
|
|
$
|
143,750
|
|
|
$
|
9,961,251
|
|
|
|
|
|
|
|
|
|
|
NET LOSS
|
|
$
|
(784,774
|
)
|
|
$
|
(10,552,771
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Statement of Retained Deficit
|
|
|
|
|
|
2011
(as restated)
|
|
|
|
|
|
|
|
|
|
|
Balance, June 30
|
|
|
|
|
|
$
|
(879,390
|
)
|
Adjustment
|
|
|
|
|
|
$
|
(9,804,997
|
)
|
Adjusted balance, June 30
|
|
|
|
|
|
$
|
(10,684,387
|
)
|
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.
MANAGEMENT’S 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 Company’s efforts to successfully market the website and product matrix as scheduled;
|
|
·
|
The Company’s ability to attract, and build an agent base;
|
|
·
|
The Company’s 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.
Recent Developments
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 Company’s operations are subject to all business risks associated with new enterprises. The likelihood of the Company’s 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.
In addition, Section 107 of the JOBS Act also provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to take advantage of the benefits of this extended transition period. Our financial statements may therefore not be comparable to companies that comply with public company effective dates.
Results of Operations
For the three months ended September 30, 2012 and 2011
Revenues
We had revenue of $670,377 for the three months ended September 30, 2012, of which $447,102 from the commissions due to sales of insurance products, including Mortgage life insurance, Funeral expense insurance and annuities, and $223,276 from the sales of leads. Comparatively, we had revenue of $544,322 for the three months ended September 30, 2011, of which $384,187 from the commissions due to sales of insurance products, including Mortgage life insurance, Funeral expense insurance and annuities, and $160,135 from the sales of leads. The increase by $126,055, or 23.2%, during the three months ended September 30, 2012 was due to a continuation of the advertisement programs and marketing agreements implemented during the fiscal year ending June 30, 2012.
Our revenue figure increased during the year ended June 30, 2012 due to the implementation of the following new advertising programs and marketing agreements:
1) We began to run at least 30 advertisements per week on Monster.com and at least 15 advertisements per week on Craigslist.com in an effort to recruit new agents with a strong work ethic, a willingness to adapt to our proven sales processes and who were dedicated to providing excellent service.
2) We began to host a weekly national conference call, which is promoted to all licensed agents, to not only serve as a recruiting and marketing tool for the Company, but to inform agents of new direct mail areas of coverage, where the leads were coming in from and the benefits of our membership packages.
3) We reprogrammed our web site to send out a series of auto responders to those individuals who submit inquiries through the site. The auto responses are geared to a particular inquiry and are based on the status of the inquirer (e.g., licensed agent, non-licensed individual).
4) We added GWJ Company, a Texas corporation (“
GWJ
”), as a mailing service in addition to America’s Recommended Mailers Inc. (“
ARM
”). GWJ is cheaper than ARM which allowed us to increase the number of direct mail being sent out on a monthly basis.
All of the above allowed us to increase the number of agents working for the Company, which in turn increased our revenue which allowed us to increase the number of pieces of direct mail being sent out to prospective clients. In turn, more direct mail being sent out equates to more leads coming in for our agents to pursue, which in turn meant more lead revenue and ultimately more insurance policies being sold, which meant even more revenue for the Company. We estimate that these new programs and agreements led to the following increases:
|
1)
|
Direct Mail – For the
fiscal year ending June 30, 2012
, we sent out an additional 200,000 pieces of direct mail over what was sent out in 2011
|
|
2)
|
Lead Generation – For the
fiscal year ending June 30, 2012
, we obtained 28,873 leads, which was 1,932 leads greater than 2011 (7%)
|
|
3)
|
Lead revenue – For the
fiscal year ending June 30, 2012
, our lead revenue was equal to $750,690, which was $50,227 greater than 2011 (7%)
|
|
4)
|
Commissions from sales of new policies - For the
fiscal year ending June 30, 2012
, we earned sales commissions of $1,741,975 which was 30% greater than 2011.
|
Cost of Sales
The cost of sales was $304,700, or 45.5% of revenues, for the three months ended September 30, 2012, including Marketing/Leads Generation of $141,952, Leads Purchased Cost of $30,357 and agent expenses of $132,391. Comparatively, our cost of sales was $316,346, or 58.1% of revenues, for the three months ended September 30, 2011, including Marketing/Leads Generation of $147,696, Leads Purchased Cost of $25,874 and agent expenses of $142,776.
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.
Expenses
We had operating expenses of $353,998 and $300,872 for the three months ended September 30, 2012 and 2011, respectively. The increase by $53,126 during current period was due primarily to the increase in payroll and related taxes by $70,750.
The significant components consisting of our operating expenses also included consulting fee, contract labor, rent and other administrative expenses, which were set forth in the following table.
|
|
For the three
months ended
September 30,
2012
|
|
|
For the three
months ended
September 30,
2011
|
|
Consulting fee
|
|
|
31,727
|
|
|
|
37,185
|
|
Contract labor
|
|
|
61,486
|
|
|
|
73,165
|
|
Payroll and related taxes
|
|
|
160,129
|
|
|
|
89,379
|
|
Rent
|
|
|
20,174
|
|
|
|
14,574
|
|
Other general and administrative expenses
|
|
|
80,482
|
|
|
|
86,569
|
|
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.
For the years ended June 30, 2012 and 2011
Revenues
We had revenue of $2,492,664 for the year ended June 30, 2012, of which $1,741,975 from the commissions due to sales of insurance products, including Mortgage life insurance, Funeral expense insurance and annuities, and $750,690 from the sales of leads including $2,950 membership revenue. Comparatively, we had revenue of $1,925,960 for the year ended June 30, 2011, of which $1,225,497 from the commissions due to sales of insurance products, including Mortgage life insurance, Funeral expense insurance and annuities, and $700,463 from the sales of leads.. Our revenue figure increased during the year ended June 30, 2012 due to the implementation of the following new advertising programs and marketing agreements:
1) We began to run at least 30 advertisements per week on Monster.com and at least 15 advertisements per week on Craigslist.com in an effort to recruit new agents with a strong work ethic, a willingness to adapt to our proven sales processes and who were dedicated to providing excellent service.
2) We began to host a weekly national conference call, which is promoted to all licensed agents, to not only serve as a recruiting and marketing tool for the Company, but to inform agents of new direct mail areas of coverage, where the leads were coming in from and the benefits of our membership packages.
3) We reprogrammed our web site to send out a series of auto responders to those individuals who submit inquiries through the site. The auto responses are geared to a particular inquiry and are based on the status of the inquirer (e.g., licensed agent, non-licensed individual).
4) We added GWJ Company, a Texas corporation (“
GWJ
”), as a mailing service in addition to America’s Recommended Mailers Inc. (“
ARM
”). GWJ is cheaper than ARM which allowed us to increase the number of direct mail being sent out on a monthly basis.
All of the above allowed us to increase the number of agents working for the Company, which in turn increased our revenue which allowed us to increase the number of pieces of direct mail being sent out to prospective clients. In turn, more direct mail being sent out equates to more leads coming in for our agents to pursue, which in turn meant more lead revenue and ultimately more insurance policies being sold, which meant even more revenue for the Company. We estimate that these new programs and agreements led to the following increases:
|
1)
|
Direct Mail – For the year 2012, we sent out an additional 200,000 pieces of direct mail over what was sent out in 2011
|
|
2)
|
Lead Generation – For the year 2012, we obtained 28,873 leads, which was 1,932 leads greater than 2011 (7%)
|
|
3)
|
Lead revenue – For the year 2012, our lead revenue was equal to $750,690, which was $50,227 greater than 2011 (7%)
|
|
4)
|
Commissions from sales of new policies - For the year 2012, we earned sales commissions of $1,741,975 which was 30% greater than 2011.
|
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 $1,183,810, or 47.5% of revenues, for the year ended June 30, 2012, including Marketing/Leads Generation of $408,854, Leads Purchased Cost of $ 188,623 and agent expenses of $586,333. Comparatively, our cost of sales was $1,046,887, or 54.4% of revenues, for the year ended June 30, 2011, including Marketing/Leads Generation of $707,492, Leads Purchased Cost of $136,495 and agent expenses of $202,900.
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.
Expenses
We had operating expenses of $1,933,593 for the year ended June 30, 2012, resulting in a loss of $624,724 from operations during the year. We had operating expenses of $11,432,042 for the year ended June 30, 2011, resulting in a loss of $10,552,771 from operations during the year. The significant decrease in operating expenses during the year ended June 30, 2012 was due primarily to the decrease in non-cash services expenses by $9,616,251. We had non-cash services expenses of $345,000 during the year ended June 30, 2012 due to the issuance of 2,300,000 shares of our Common Stock to the consultants for services rendered. The fair value of the shares was approximately $.15 per share determined by the fair value of services received. Comparatively, we had non-cash services expenses of $9,961,251 during the year ended June 30, 2011 due to the issuance of 66,400,817 shares of our Common Stock to the consultants for services rendered. The fair value of the shares was approximately $.15 per share determined by an arm’s length private placement with non-affiliate investors since there was no trading market for our common stock.
The significant components consisting of our operating expenses also included consulting fee, contract labor, payroll and related taxes, rent and other administrative expenses, which were set forth in the following table.
|
|
For the year ended
June 30, 2012
|
|
|
For the year ended
June 30, 2011
|
|
Consulting fee
|
|
|
144,698
|
|
|
|
102,457
|
|
Contract labor
|
|
|
324,622
|
|
|
|
836,187
|
|
Payroll and related taxes
|
|
|
551,449
|
|
|
|
200,692
|
|
Rent
|
|
|
67,357
|
|
|
|
80,737
|
|
Professional fees paid with common stock
|
|
|
345,000
|
|
|
|
9,961,251
|
|
Other general and administrative expenses
|
|
|
347,767
|
|
|
|
108,671
|
|
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 three months ended September 30, 2012 and 2011
Operating Activities
Net cash used in operating activities was $19,156 and $17,857 during the three months ended September 30, 2012 and 2011, respectively. Negative cash flow from operation during the three months ended September 30, 2012 was due to the decrease in accounts payable in amount of $32,421, offset by the net income of $7,673 and the increase in accrued payroll taxes by $4,850. Negative cash flow from operation during the three months ended September 30, 2011 was due primarily to the net loss of $72,883, plus the decrease in customer deposit in the amount of $8,665, offset by the increase in accounts payable by $63,691.
Financing Activities
We had no cash flow from financing activities during the three months ended September 30, 2012. Comparatively, cash flow of $8,001 used in financing activities during the three months ended September 30, 2011 was solely due to stock redemption.
The Company had no assets and were in a book overdraft position as a result of issuing more checks than cash available on hand at September 30, 2012.
For the years ended June 30, 2012 and 2011
Operating Activities
Net cash used in operating activities was $264,113 and $608,226 during the years ended June 30, 2012 and 2011, respectively. Negative cash flow from operation during the year ended June 30, 2012 was due to the net loss of $624,724, plus the decrease in customer deposit and deferred revenue by $9,345 and $18,152, respectively, offset by the increase in accounts payable and accrued payroll taxes in amount of $26,408 and $16,700, respectively, and the non-cash expenses of $345,000 resulting from the stock issuance of 2,300,000 shares as compensation. Negative cash flow from operation for the year ended June 30, 2011 due primarily to the net loss of $10,552,771, plus the decrease in accounts payable in the amount of $8,703, offset by the non-cash expenses of $9,961,251 resulting from the stock issuance of 66,400,817 shares as compensation.
Financing Activities
Net cash provided by financing activities was $242,000 and $626,322 for the years ended June 30, 2012 and 2011, respectively. Positive cash flow from financing activities during the year ended June 30, 2012 was due primarily to the proceeds of $250,000 from unsecured loan payable, offset by stock redemption in amount of $8,001. Comparatively, positive cash flow from financing activities during the year ended June 30, 2011 was due primarily to 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 no cash on hand as of September 30, 2012, the most readily available recent date. The accumulated deficit as of September 30, 2012 was $11,301,438. The Company’s 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
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)
|
the services have been rendered and all required milestones achieved,
|
|
(iii)
|
the sales price is fixed or determinable, and
|
|
(iv)
|
collectability is reasonably assured.
|
The approval from the Company’s insurance carriers, which occurs upon receipt of our commission check and the policy, is 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 rent leads and simultaneously their credit card is processed and the leads are distributed to them. The Company recognizes revenue when the agent submits an order to rent the leads for 30 days. After thirty days the leads become available for rental to another agent. Leads may be rented multiple times at decreasing rates due to the lead’s age and number of times it has been rented.
Membership revenue recognition occurs when an agent registers for one of our websites online and submits their payment information; the agent must give 30 days notice of request to cancel their membership. We recognize revenue related to our various membership plans as income on a straight-line basis over the length of membership period.
The customer deposit is strictly related to the Executive Membership Package. After submitting a $500 deposit, an Executive Member can request that the Company directly mail letters to new home owners and/or senior citizens to generate new direct mail response leads. The Company refunds these deposits back to Executive Members when they no longer request that the Company directly mail letters to new home owners and/or senior citizens to generate new direct mail response leads. However, the Executive Members may also apply these deposits towards the leads sale or membership fees in the future. After the Executive Member cancels his or her direct mail service, he or she has the choice to use these deposits for additional leads, request that the deposits be applied towards membership, or ask for refunds. If the deposits are used for additional leads, revenue is recognized when services are realized or realizable and earned. If the deposits are used for membership fees, revenue is recognized over the length of membership period. If the deposits are refunded then no revenue is recognized. For the fiscal year ended June 30, 2010, the Company refunded $1,000 to Executive Members; for the fiscal year ended June 30, 2011, the Company refunded $28,354 to Executive Members; for the fiscal year ended June 30, 2012, the Company refunded $9,845 to Executive Members.
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 include marketing and leads generation costs, leads purchased costs and agent expenses. Selling, general and administrative expenses are charged to expense as incurred.
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.
MANAGEMENT
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:
Name
|
|
Age
|
|
Title
|
|
|
|
|
|
Samuel Wolfe
|
|
31
|
|
Chief Executive Officer, President, Director
|
Ralph Simpson
|
|
50
|
|
Chief Financial Officer and Controller, Chairman, Founder, Director,
|
Rudolph J. Renda
|
|
60
|
|
Director
|
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. Simpson’s 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. Mr. Simpson was a licensed insurance agent for Conseco from 2001 to 2003, with National Agents Alliance from 2003 – December of 2008, and Equita through April of 2010. 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 companyf 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 Company’s 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.
EXECUTIVE COMPENSATION
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 three fiscal years.
SUMMARY COMPENSATION TABLE*
|
Name and principal
position
|
Year
|
|
Salary
($)
|
|
|
Bonus
($)
|
|
|
Stock Awards
($)
|
|
|
Option
Awards
($)
|
|
|
Non-Equity
Incentive Plan
Compensation
($)
|
|
|
Non-qualified
Deferred
Compensation
Earnings ($)
|
|
|
All Other
Compensation
($)
|
|
|
Total
($)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Samuel Wolfe, CEO/
|
2012
|
|
|
130,000
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
120,795
|
(1)
|
|
|
250,795
|
|
President
|
2011
|
|
|
106,000
|
|
|
|
0
|
|
|
|
4,875,000
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
4,981,000
|
|
|
2010
|
|
|
100,000
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
100,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ralph Simpson,
|
2012
|
|
|
130,000
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
70,532
|
(2)
|
|
|
200,532
|
|
COO/
|
2011
|
|
|
106,000
|
|
|
|
0
|
|
|
|
4,875,000
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
4,981,000
|
|
Chairman
|
2010
|
|
|
100,000
|
|
|
|
0
|
|
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0
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0
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0
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0
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0
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100,000
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(1)
The chief executive officer is entitled to compensation in the amount of 5% of total annual revenue received by the Company.
(2)
Compensation for corporate housing for respective officer. This corporate housing payment was as a one-time benefit.
*The fair value of the stock awards was $9,750,000, or approximately $.15 per share, determined by the most recent private placement with non-affiliate investors since there was no trading market for our common stock.
Employment Agreements
We currently do not have an employment agreement with our chief financial officer and chief operation officer, Ralph Simpson.
We currently do have an employment agreement with our chief executive officer, Samuel Wolfe. The Company, as Employer, agreed to employ Samuel Wolfe, as Employee, and
Employee accepted employment with Employer, for a period commencing August 8, 2011 and continuing until terminated as provided in the Employment Agreement. The
Employment Agreement was amended effective June 30, 2012. The material terms of Mr. Wolfe’s Employment Agreement, as amended, are as follows:
1.
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an annual salary of $130,000.00, shall be payable to Employee on a weekly basis;
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2.
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an amount equal to 5% of Total Annual Revenue received by Employer, described below, shall be payable to Employee, and determined on a cash basis during each
fiscal
year, provided and on the condition that Employee’s employment by Employer is not terminated by Employer. “Total Annual Revenue” shall be defined herein
as
the total revenue received by Employer during its fiscal year from all sources, including but not limited to, insurance commissions, leads and sales of membership
packages.
All payments due and payable hereunder shall be paid within thirty (30) days after determination of the Total Annual Revenue by Employer.
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3.
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The Employment Agreement shall immediately terminate upon the occurrence of any one of the following events:
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b.
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Employee’s permanent disability as determined by the Employer;
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c.
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Employee is convicted by a court of competent jurisdiction of fraud, misappropriation, embezzlement, dishonesty, or other similar act; or
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d.
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if Employee should voluntarily terminate his employment with Employer.
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Equity Awards
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 Company’s 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, 2012.
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.
Board Committees
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.
Directors/Members
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Audit
Committee
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Compensation Committee
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Nominating and Corporate
Governance
Committee
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Samuel Wolfe
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X
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X
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X
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Ralph Simpson
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X
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X
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X
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Rudolph J. Renda
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X
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X
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X
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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:
·
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Appointing, compensating and overseeing the work of our independent auditors;
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·
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Approving engagements of the independent auditors to render any audit or permissible non-audit services;
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·
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Reviewing the qualifications and independence of the independent auditors;
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·
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Monitoring the rotation of partners of the independent auditors on our engagement team as required by law;
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·
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Reviewing our financial statements and reviewing our critical accounting policies and estimates;
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·
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Reviewing the adequacy and effectiveness of our internal controls; and
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·
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Reviewing and discussing with management and the independent auditors the results of our annual audit, our quarterly financial statements and our publicly filed reports.
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Compensation Committee
. Our compensation committee oversees our corporate compensation policies, plans and programs. The compensation committee is responsible for, among other things:
·
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Reviewing and recommending policies, plans and programs relating to compensation and benefits of our directors, officers and employees;
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·
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Reviewing and approving compensation and the corporate goals and objectives relevant to compensation of our Chief Executive Officer;
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·
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Evaluating the performance of our executive officers in light of established goals and objectives ; and
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·
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Administering our equity compensation plans for our employees and directors.
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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:
·
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Evaluating and making recommendations regarding the organization and governance of the board of directors and its committees;
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·
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Assessing the performance of members of the board of directors and making recommendations regarding committee and chair assignments;
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·
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Recommending desired qualifications for board of directors membership and conducting searches for potential members of the board of directors; and
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·
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Reviewing and making recommendations with regard to our corporate governance guidelines.
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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 October 10, 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 77,460,612 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.
Name of Beneficial Owner
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Number of Shares of Common Stock
Beneficially Owned
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Percent of
Common
Stock
Beneficially
Owned
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Samuel Wolfe,
|
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32,500,000
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42.90
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%
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Ralph Simpson,
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32,500,000
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42.90
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%
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CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
AND DIRECTOR INDEPENDENCE
Certain Relationships and Related Transactions
Educator Group Plans, Insurance Services Inc. d/b/a Equita Mortgage Group and its affiliates, including Senior Advisor Services, are owned and operated by Richard Wolfe and Robert Myer. Mr. Robert Wolfe is also the step-father of the co-founder of UUI, Samuel Wolfe. The Agency Agreement between Equita and UUI contains the identical agreement terms and conditions as the agency agreements in place with other Equita agents. UUI does not have or gain any competitive or monetary advantage as an agent for Equita. The agency agreement is summarized on page 9 of this filing. The milestones for continuing the agency agreement require that $3,000,000 in paid annual premium are maintained within any 12 month period which is the equivalent of $1.5 million in annual revenue. Equita receives 10-15% of the any commissions paid to Unique Underwriters from the carriers. Richard Wolfe and Educator Group Plans et al, have no personal or beneficial interests in UUI other than its participation in the Equita agency program. Since Educator Group Plans is paid their override commission directly from the carriers the Company does not have any knowledge of the aggregate amount of revenue that the Company has generated that was paid to Educator Group Plans. The company has paid Educator Group Plans $230,253 for the rental of leads from inception through September 30 , 2012. The total amount of revenue that was derived through our agreement with Educator Group Plans d/b/a Equita Mortgage Group was $276,066 during the three months ended September 30, 2012, and $1,383,722.76 and $311,961
in the years ended June 30, 2012 and 2011, respectively.
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 SEC’s 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.
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