ITEM 1. BUSINESS
We were incorporated under the laws of the State of Nevada on December 15, 2014, at which time we acquired a business plan, various pieces of information technology, furniture and other office equipment, as well as industry resource materials and business relationships from our founder and CEO. As of March 1, 2016, we had one employee, our founder and CEO, Mr. Estus. For fiscal year 2016, Mr. Estus will devote at least 20 hours a week to us but may increase the number of hours as necessary.
The Company issued 6,000,000 shares of its common stock to Mr. Estus at inception in exchange for organizational services incurred upon incorporation. Following our formation, we issued an additional 3,000,000 shares of our common stock to Mr. Estus, in exchange for a business plan, office furniture, design equipment, computing equipment along with other related industry materials that he developed over a period exceeding 10 years. See also “Certain Relationships and Related Transactions”.
As a senior video game artist with Sony PlayStation of America, Mr. Estus was the third employee to be hired by the newly developed PlayStation division in Rancho Bernardo, California (located outside of San Diego). Mr. Estus experienced a significant amount of rudimentary development at Sony in his career there. Computer graphics in the 80s and early 90s were primarily two-dimensional (2D) with low resolution. Early in 1992 with the debut of the PlayStation system, this format changed forever.
The first platform developed with which Mr. Estus participated in was to support three-dimensional (3D) graphics with a higher pixel resolution. This became a completely new approach to video game graphics. The PlayStation moved game graphics from 2D, flat graphics, to 3D polygonal models and environment. While 3D had its inherent problems, unlike 2D graphics, 3D graphics allowed the user to move closer to the camera plane, feeling immersed. This requires the video game artist to control ‘texel density’, a major concern in the video game industry which caused pixilation of texture maps as they approached the foreground (texel density is the process by which the graphic artist ensures that meshes and textures are proper in height, width and depth for that ‘virtual experience’). Never before had the industry needed to consider texture maps in coming as close as they had to the viewing plane and of course pixilated. Mr. Estus through his role with Sony was on the cutting edge of game development and the new frontier which Sony and its PlayStation system invoked.
Another progressive development Mr. Estus was involved in was integrating movies (commercial media) into video games. Frame rate, resolution were all significant considerations, a balance needed to be struck to achieve the highest resolution possible while maintaining significant high frame rates within the game. Mr. Estus first visualized the idea of continuous wrap-around 3D posters for cubicles and various other wall spaces was while he was at Sony. Mr. Estus’ professional experience has provided him with keen insight to resolution and focal points, such as those needed for successful game products. Through experimentation and multiple manufacturing trial and error, Mr. Estus established the importance of focal point in the product. Focal point is the part of a photograph or digital image that is 100% in focus, whereas, less important elements are not focused. The focal point draws the viewer (or user) into specific viewing area (targets) in the pixilated space. Mr. Estus believes that anyone can take a picture, print it, and slap it on a cubicle wall panel, however that is not what CubeScape is all about. CubeScape will allow the user to actively choose a location within the pixilated space, drawing the viewer in, creating a cozy and comfortable place for the mind to achieve its desired result.
This we believe is a vital aspect of what will be the CubeScape experience. Mr. Estus will maximize his professional expertise in graphics and the gaming industry providing a supported background for CubeScape product offerings to transform the cube sphere. Mr. Estus believes the cubicle environment is stale, non-progressive and demotivating to the user of the cubicle (the cube jockey).
We are a development stage company and have no specific financial resources. We have not established or attempted to establish a source of equity or debt financing. Our independent registered public accounting firm has included an explanatory paragraph in their report emphasizing the uncertainty of our ability to remain a going concern. We are in the early stages of executing our business plan. We still have a significant amount of work that needs to be completed and funds that need to be raised in order to compete within this sophisticated marketplace. To date, we have not developed any finished products or services and cannot predict when a finished product or services will be developed or externally acquired. We believe that we have an advantage with our founder, and CEO and his industry relationships and the solicitation of their help with growing our business model.
As of December 31, 2015, we had limited assets which consisted of cash and prepaid expenses of $37,230, tangible assets valued at $3,700, net of depreciation expense of $1,773 and intangible assets relating to our business plan valued at $20,300, net of amortization expense of $9,727 and deferred offering costs of none. In order to fund the development of our business and our working capital needs for the next 12 months, we intend to attempt to secure funding from the sale of common stock, from stockholder or non-related party loans, or from funding provided by strategic joint ventures or partners. Furthermore, in order to be able to implement the foregoing plan of operations, we anticipate that we will need to secure financing between $100,000 and $150,000 during the third quarter of calendar year 2016. If we are unsuccessful in raising additional financing, we will not be able to proceed with execution of our business plan.
Based on the exact nature of our business and expected level of competition, we anticipate incurring operating losses into the foreseeable future. Because we currently do not have a fully developed and completed website system (design portal) for our wrap-around products for cubicles and other walls, and our resources are severely limited, we cannot predict if and when we will generate revenues or whether we will become a viable and sustainable business operations. Accordingly, due to our lack of assets, significant operations and for the foreseeable future the ability to generate revenues, our auditors have stated in their opinion that there currently exists substantial doubt about our ability to continue as a going concern.
General Overview
There is no way of accurately predicting when product development will progress to the point of generating any revenue. The timing of business development is a function of having sufficient working capital. There is no way of knowing when or if we will be able to raise the necessary funds. If we do, fully developed product offerings could be ready within three to six months following when the necessary funds have been secured. If we do not raise sufficient financing, revenue producing activities of any kind will most likely not commence until at least 18 months, if ever.
We are building a company that provides cubicle and office wall covering solutions. We are developing a proprietary website system (design portal) that provides customization using our extensive library of art and stock photography. Our design portal will enable the consumer to create custom wall coverings that create an atmosphere that transcends the normal cubicle environment. Users will have access to diverse and ever increasing categories of art, photography, and other graphic materials which they will be able utilize through the input of their cubicle dimension and layout, orient the art with a precise fit to their cubicle walls and/or office work space.
Our intended design portal, ecommerce system and drop ship services outline a three-step method for providing users with what we believe to be a comprehensive approach to office and cubicle design. We believe this approach will provide an experience in office design that will become the new way to empower cube jockeys with a sense of satisfaction from their work space, and will be valued by both employee and management. We believe this acceptance in office work space will provide rapid growth and popularity. We will create a system that easy to use and promotes creativity. This approach will additionally help us in creating long-lasting return customer relationships.
Our business operations will be comprised of two segments: a) design portal for internet users; and b) integration services for the office furnishings market. The design portal, middleware and back-office framework were developed with the assistance of an established software development firm. The Company developed its initial design of the design portal and web-management software through the efforts of its founder and CEO, and the software development firm with which the Company has been working with on an as “needed basis”.
The design portal development has been through the direct assistance of a software development firm (since early 2011) and the efforts of our founder, Mr. Estus. We developed an initial framework and design. The Company intends to seek the assistance of outside sales and marketing consultants to develop a professional sales and marketing strategy to capitalize on our product designs. We will seek to staff a management team (besides Mr. Estus) with the technical skills necessary in technology, software writing and a strong emphasis on graphics design and artwork. We intend to with further financing create and staff an in-house web development group, which we believe will develop new generations of the design portal and services of a similar nature to our business development in gaming software cubicle and office wall covering solutions.
The Company continues to work on the development of its design portal through the management and skills of its founder, and CEO, as well as through a web development firm which has been working with us on an as needed basis and as our budget allows. To date no commercial website or services has been developed through these efforts. The Company believes initially our customers will come primarily from social media advertising, word of mouth and specific technology shows and conventions.
Our plan to continue as a going concern is to reach the point where we begin generating sufficient revenues from our web based business or services to meet our obligations on a timely basis. The Company has not yet acquired or internally fully developed any services. We may not be able to acquire or internally develop any services in the future because of a lack of available funds or financing to do so. In order for us to develop or acquire any services, we must be able to secure the necessary financing, beyond the proceeds of the recently completed direct public offering. In the early stages of our operations, we will continue to keep costs to a minimum. The cost to develop our business plan as currently outlined will be in excess of $100,000. We have no established current sources of funds to undertake the business plan as outlined. Until we obtain funding, if ever, we will keep our operating costs as low as possible with our founder and CEO providing substantially all of the work on his own without any cash compensation. This methodology would result in our development stage extending for at least two to three years.
We believe that our web based division (once developed, if at all) may begin to generate revenues earlier than the corporate direct sales (once developed, if at all). If we are unable to obtain adequate funding or financing, the Company faces the ultimate likelihood of business failure. There are no assurances that we will be able to raise any funds or establish any financing program for the Company’s growth.
Industry Overview
Privacy-challenged office workers may find it hard to believe, but open-plan offices and cubicles were invented by architects and designers trying to make the wok space world a better place—who thought that to break down the social walls that divide people, you had to break down the real walls, as well. Early 20th century modernist architects such as Frank Lloyd Wright saw walls and rooms as downright fascist in their presentation. The spaciousness and flexibility of an open plan, they thought, would liberate homeowners and office dwellers from the confines of their boxes. Businesses took up the idea less out of a democratic ideology than a desire to pack in as many workers as they could. The typical open-plan office during the first half of the 20th century contained long rows of desks occupied by office clerks in a white-collar assembly line.
Cubicles were interior designers’ attempt to bring some soul back in to the office space. In the 50s a German design firm broke up the rows of desks (assembly line) into organic groupings with partitions for privacy—what it called the Bürolandschaft, or “office landscape”. In 1964 famous furniture design company Herman Miller introduced the Action Office system. This offered such improvements as greater surfaces and multiple desk heights. In 1968 Herman Miller began to sell its system in modular components, with the unfortunate consequence of businesses cherry-picking the space-saving aspects of these designs, leaving out the humanizing touch. Herman Miller designer Robert Probst was tasked to "find problems outside the furniture industry and conceive solutions for them". Propst’s nickname the "Father of the Cubicle" is a misnomer. When Propst designed the Action Office system, "cubicle farms" or the very notion of it were not his intent. His own research into developing the ‘action office’ philosophically was contrary to the actual cubicle in many ways. The Action Office system was designed to promote productivity, privacy, and health at the expense of inefficient use of space. Cubicles are now typically designed to maximize the efficient use of space.
The efficient "cubicle" became popular in office design. Mostly because of the movable wall in the Action Office II system. This saved money in construction and development costs. After their introduction into the marketplace, the Action Office II and other office furniture systems were modified to pack in as many employees as possible into an office space. This progression was contrary to Probst’s vision. Probst stated that "The cubiclizing of people in the modern corporation is monolithic insanity”. During this era businesses began to shift their employees, not only clerks, but all into open-plan offices which maximized space. Today, companies are reverting to pre-cubicle rows of desks, now called “pods” to make them sound vaguely futuristic, which will still need our individualist wrap-around wall coverings.
Although open plans foster ambient awareness and teamwork, an article published in a major Asian health journal found that open plans cause conflict, high blood pressure and increased staff turnover. The next wave of idealistic office furniture planning will be rather more successful in achieving aesthetically pleasing and healthy alternatives for cube jockeys who spend 8-10 hours per day ‘living’ in.
Based on industry reports, online sales of graphic wall coverings (of which cubicle work spaces are a large part of) in the United States may surpass $10 million per annum. Over the next five years this represents more than $50 million in sales; a significant increase to current spending of wall covering graphics and other by-products.
Direct sales we believe has historically served corporate industrial design and growth is hard to predict, year over year. We believe the confluence of a need for large non-permanent graphic art in combination with the recent advances of printing, printing substrates, adhesives and online customization present an opportunity for us to position our business in introducing product and services.
Office space planning and design are vital components to achieving optimal office space plans. To achieve desired goals, most planners work with professionals that are both knowledgeable in the art and science of Computer Aided Design (CAD). These skills are an invaluable asset and an effective tool. Office space planning consultants with whom we plan to work with should be able to assist us in need and planning of our products to be integrated in successful office space projects which we will make available to them. This relationship building with office planning and design professionals should be helpful in suggesting our products and services for aesthetically pleasing cubicle design coverings.
Competitive Focus
We believe the following will assist us in exploiting the expected growth in custom designed wrap-around cubicle and wall covering market:
(1)
Scalability. We believe our design portal and services will become scalable, a solution designed to serve the underserved, fragmented office cubicle design market.
(2)
“Sticky” Consumer Relationships. Our business model will provide a solution that is designed to act as a competitive barrier and keep the user engaged with our design portal.
(3)
Expertise in Aesthetics. Our founder has extensive experience art and aesthetics which comes from his vast experience in the game development industry. We will seek to capitalize on that expertise.
(4)
Speed to Implementation. We believe that a fully-developed design portal and vertical distribution system will provide immediate insight into the usage (and behavior) of our customers’ assets.
Growth Strategy
Key elements of our growth strategy shall include:
Core Products. We plan to enhance our core products through user interface and functionality with our design portal as well as progressive and relevant new features and offerings as soon as reasonably practicable.
Focus. We intend to organically grow market penetration by: (a) securing contracts with office designers in various markets, (b) exploiting social networks, (c) leveraging development opportunities, and (d) adding solutions to professionals in the market.
Strategic Alliances. We plan to team with other businesses that have complementary features to our products, when fully developed, thereby reducing our development cost and introducing us to consumers and end-users.
International Expansion. We intend to expand internationally through partnerships and alliances.
Business Objective
Our objective is to become a provider of cubicle panel and non-permanent wall coverings. We are pursuing the following strategies to achieve this object:
Initiating website development and ecommerce function, identifying service offerings, promoting, and advertising through social media campaigns.
Create a national media presence through social media – We will seek to create and enhance a national awareness and aggressively market our products through social media outlets.
Identify and develop strategic relations with our Drop Ship partners – utilize partners, high volume distribution facility to create highly efficient low cost production model.
Aesthetically pleasing cubicle environments we believe contribute to an employee’s overall productivity and sense of well-being. Cubicle environments can convey a sense of mission reinforcing a business culture that an employer worked hard to develop. CubeScape will provide a comprehensive selection of coverings that can be themed oriented or business branded enhancing that culture and productivity. Every cubicle may not have a spectacular window view, but with CubeScape’s product offerings we can provide a view to vistas for the occupant.
CubeScape products we believe will transform any neutral cubicle space into a truly inspirational branded for all to enjoy, not just the occupants. Clients and contractors visiting offices decked out in CubeScape products will instantly recognize your business mission. Depictions of communities you serve are displayed in a variety of graphic form. Printed wall murals, large photographic panels, along with artistic window graphics reinforce what a business is all about. Prompt questions immediately by illustrating your business mission and vision through our product offering. We will assist you in branding your organization with in a cohesive and aesthetically pleasing CubeScape product.
This prospectus includes very limited market and industry data and forecasts that we obtained from internal research, publicly available information and industry publications and surveys. The industry in which we operate is subject to a high degree of uncertainty and risk due to a variety of factors, including those described in the section entitled “Risk Factors”.
The following timeline outlines the steps that we intend to take. Each step outlines the metrics or performance that we must accomplish in order to move forward with our business plan.
Step One (Q1/Q2) ($10,000 est. costs)-Website development: Work with established webhosting businesses and web developer to stand up Cubescape.biz website. Test EDI functionality to drop ship partners and financial institutions.
Step Two (Q2/Q3) ($5,000 est. costs)-Ecommerce: Finalize strategic relations with ecommerce provide to integrate back office functionality between website selected ecommerce system servers.
Step Three (Q3/Q4) ($5,000 est. costs)-Drop ship partners: Establish ordering system between website and drop ship partners. Verify system functionality with ecommerce solution providers. Test entire order process through to shipment verification.
Step Four (Q5) ($5,000 est. costs)-Direct Sales: Develop direct sales strategy with consultants. Work with consultants to identify and approach manufacturers and corporate design specialist.
As mentioned above, our steps are predicated upon the Company obtaining financing either through additional equity or debt beyond the recently completed direct public offering. If we are not able to obtain the financing as determined by the above steps, we will not be able to meet or achieve any of the time-line objectives. If we complete 75%, 50%, 25% or even 10% of our additional financing objectives, we will not be able to pursue any of our action steps. In that case, the Company will be forced to proceed on a piecemeal basis using the services of our founder, and CEO and the very limited use of outside contractors when and if limited funds are obtained. Our founder and CEO currently devotes in excess of 20 hours a week to our continued business efforts. There is no realistic way to predict the timing or completion in that scenario.
Without additional financing we will not be able to pursue our business plan or its time-line objectives, and the Company may fail entirely.
It is our plan to seek additional financing from either equity financing or through debt instruments. Our management has, through relationships and partnerships, begun the necessary work on some of our intended products. Our founder and CEO has primarily provided these services through the date of this prospectus. Our business plan requires further completion of these tasks which require the hiring of employees and/or outside contractors. With the level of sophistication and expertise of our founder and CEO, as well as other various professionals that he knows, the Company should make progress in its development planned product, but currently no specific timeframe can be provided. Most if not all of these actions will be predicated on the Company obtaining the necessary financing to accomplish these steps. If financing is not available on terms reasonable to the Company and its shareholders, then the progression steps of this business plan will not occur as planned and may never occur.
We currently have no sources of financing and no commitments for financing. There are no assurances that we will obtain sufficient financing or the necessary resources to enter into contractual agreements with outside developers or sales/marketing firms. We currently do not have any cash or other resources to commence the use of outside service providers. If we do not receive any funding or financing, our business is likely to be maintained with limited operations for at least the next 12 months because our founder and CEO will continue to provide his services without consideration. We have no formal agreement in place with our founder and CEO covering his services, our founder’s and CEO’s plan will be to do all of the administrative and planning work as well as programming and marketing work on his own without consideration while he continues to seek other sources of funding for the Company.
Intellectual Property
We have no patents or trademarks, except for the following: On April 17, 2007, Mr. Estus, our founder applied for the standard trademark ‘CUBESCAPES’ which was given the following serial number by the USPTO #78/830910. The trademark is for the following use and application according to the USPTO - Continuous Wrap-Around Banner Art Posters Made of Paper for Office Space Cubicles.
Each state has its own laws regarding registration of a trademark, including the requirements for keeping the registration valid. Although these laws are similar in many respects, variations exist regarding the time period for renewing the registration. For example a trademark registered in California is valid for only five years and is renewable for successive five-year periods.
Although not required to validate a trademark, federal registration does provide additional benefits for the trademark owner. Included in these benefits are the right to use the symbol “®” and the right to file a trademark infringement lawsuit in federal court. To maintain these benefits, the owner of a federally registered trademark must make additional periodic filings to keep the registration valid. The first filing must be made between the fifth and sixth years after the trademark's registration date, and is called a "declaration of use" or "section 8 filing." This informs the USPTO that the trademark is still in use. The second filing is made between the ninth and 10th years after the trademark's registration date, and includes another declaration of use along with an application for renewal. The third and subsequent filings will also include a declaration of use and application for renewal, and must be done between the ninth and 10th year anniversary after the last filing. We have not registered our trademark.
Failing to file the required renewal applications for a registered trademark will result in the registration being cancelled, but as long as the trademark is still in use, the owner's common law trademark rights are still valid and a new registration application can be filed. Even common law trademark rights become invalid if the owner has abandoned use of the trademark. Non-use of a trademark for three consecutive years is generally considered proof that the owner has abandoned the trademark. We have continued to use our trademark and intend on re-registering and applying for all applicable protections available under the law along with the right to transfer.
Government Regulation and Industry Standards
There are an increasing number of laws and regulations in the United States and abroad pertaining to communications and commerce on the Internet. In addition, a number of legislative and regulatory proposals are under consideration by federal, state, local and foreign governments. Laws or regulations may be adopted with respect to the Internet relating to liability for information retrieved from or transmitted over the Internet, user privacy, taxation and the quality of services and services. Moreover, the application to the Internet of existing laws governing issues such as intellectual property ownership and infringement, pornography, obscenity, libel, gaming, employment and personal privacy is uncertain and developing. Any such legislation or regulation, or the application or interpretation of existing laws, may decrease the growth in the use of the Internet in general, prevent us from delivering our content in different parts of the world and increase our costs of selling services or otherwise operating our business.
Furthermore, legislation regulating online content could limit the growth in use of the Internet generally and decrease the overwhelming acceptance of the Internet as an advertising and e-commerce medium.
Websites typically place identifying data, or cookies, on a user's hard drive without the user's knowledge or consent. Many Internet companies use cookies for a variety of different reasons, including the collection of data derived from the user's Internet activity. Any reduction or limitation in the use of cookies could limit the effectiveness of our sales and marketing efforts utilizing these Internet based companies. Most currently available Web browsers allow users to remove cookies at any time or to prevent cookies from being stored on their hard drive.
Some privacy advocates and governmental bodies have suggested limiting or eliminating the use of cookies. In addition, the European Union (the “EU”) and many countries within have adopted privacy directives or laws that strictly regulate the collection and use of information regarding Internet users that is identifiable to particular individuals. Privacy legislation has been proposed in the United States as well, and the Federal Trade Commission has taken action against website operators that do not comply with state privacy policies. These and other governmental efforts may limit our ability to target advertising or collect and use information regarding the use of our websites. Fears relating to a lack of privacy could also result in a reduction in the number of users or customers which could harm our business and financial results.