UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-K
[X] Annual Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the fiscal year ended March 31, 2019
[ ] Transition Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the transition period from __________ to __________
Commission file number: 333-225433
Vilniaus g.31, Vilnius, LT-01402, Lithuania
(Address of principal executive offices and Zip Code)
+15404950016
(Registrant’s telephone number, including area code)
headoffice@free-cook.com
(Registrant’s email)
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes [ ] No [X]
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act. Yes [ ] No [X]
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ]
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [ ] No [X]
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date: 5,014,080 common shares issued and outstanding as of July 09, 2019.
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TABLE OF CONTENTS
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Item 1. Description of Business
Forward-looking statements
Statements made in this Form 10-K that are not historical or current facts are "forward-looking statements" made pursuant to the safe harbor provisions of Section 27A of the Securities Act of 1933 (the "Act") and Section 21E of the Securities Exchange Act of 1934. These statements often can be identified by the use of terms such as "may," "will," "expect," "believe," "anticipate," "estimate," "approximate" or "continue," or the negative thereof. We intend that such forward-looking statements be subject to the safe harbors for such statements. We wish to caution readers not to place undue reliance on any such forward-looking statements, which speak only as of the date made. Any forward-looking statements represent management's best judgment as to what may occur in the future. However, forward-looking statements are subject to risks, uncertainties and important factors beyond our control that could cause actual results and events to differ materially from historical results of operations and events and those presently anticipated or projected. We disclaim any obligation subsequently to revise any forward-looking statements to reflect events or circumstances after the date of such statement or to reflect the occurrence of anticipated or unanticipated events.
Financial information contained in this report and in our financial statements is stated in United States dollars and are prepared in accordance with United States generally accepted accounting principles.
General
FreeCook is a newly-developed web platform that aims to connect food lovers with culinary craftsmen of their communities. We create a network between people who cook at home and are willing to sell their meals online and those looking for homemade delicacies. We aim not to let the passion of artisan chefs stay undiscovered by the rest of the world, encourage home cooks to keep developing their talents, by attracting clients to our marketplace. Anyone can shop online with FreeCook where new meals, cuisines and dish presentations are daily offered by artisan cooks and will win any gourmet’s heart. We are building and developing the web platform with functions to inform, provide contacts and the list of meals offered by and to our online users.
Our principal office address is located at Vilniaus g.31, Vilnius, LT-01402, Lithuania. The phone number of the Company is +370.5251.2561 available Monday to Friday from 10:00am to 5:00pm EET (Lithuanian time). The direct phone line of Natalija Tunevic is +15404950016. Our plan of operation is forward-looking, however, there is no assurance that we will ever reach profitable operations.
Our Business
Our company aims at businesses operating in instantly growing and changing market of food delivery. By developing our website, FreeCook has a goal to help culinary amateurs as well as professional chefs impress neighbors with their fantasy, creativity and true passion for cooking. Being a hopeless foodaholic, the developer lets like-minded people discover new original recipes prepared “next door” as well as get an unforgettable experience for all their senses. We plan to build and develop the web platform with functions to inform the users and provide contacts and the list of meals delivered by the registered home-cooks. All meals are listed on the menu from a wide variety of chefs, that are to be identified by their location (city) and online/offline status. The meals are split into categories depending on the type of product it is, in order to make customers’ search as smooth as it can possibly be. Our website visitors are expected to navigate through the platform by search inquiries or by browsing the full list of offered meals, depending on their choice, as well as they may switch between browsing a certain category, such as type of product or the location of the chef and sorting the dishes by popularity/price. Once a visitor chooses a meal, they may move back to menu section by clicking the initial menu button, or see other recipes of the chef, read other customers’ reviews regarding the chef and his/her meals, send the chef a message, add to favorites etc. The meals can be delivered personally by the cook to the client or shipped across the country of Lithuania by courier delivery services. Initially, the website is absolutely free but over the time the brand recognition increases, the company’s revenue is to be generated by users' sales, we expect to charge 5% off each sale made through our web site. Payment methods acceptable for sales made through the platform are MasterCard, Visa, PayPal and Cash (clients personally to chefs).
We are planning to release the web-platform in Lithuania and, in perspective, attract other European countries to use our platform.
We plan to conduct different sorts of promotional campaigns to demonstrate versatility of customers included in our database. We have already started to work on upgrading our web platform and the codes, web-design and software.
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Marketing
We are likely to choose online marketing as our key strategy to promote and attract the customers, hence we are about to represent an online business entity, which works for the company offering a possibility of online order. At the initial stage of development, we are likely first to invest into advertising via Google AdWords and optimize Google Search Engine. It helps us to appear in customer’s search inquiries on the Internet. Thus, we expect to get into the attention of both our potential customers and their clients. (to whom we might refer as “platform users” or “users). Alongside, we plan to represent our business on the variety of popular social networks pages, where we plan to provide with detailed information both our potential customers and the potential web platform users. We also plan to use direct calls and mailing with our business proposals, providing references to our platform and social web pages. We might also consider other sites related to food consuming, such as sites of recipes and food retailers, for instance. With more advanced investment we might shoot promotional videos related to cooking, for advertising purposes. As the business grows, we might set up TV channel built-in the web platform itself, where chefs will demonstrate their skills teaching how to cook different meals available for order on the platform. To attract potential customers, we plan to elaborate a program of free promotional periods, or promotional period devoted to a particular cuisine or other promo-campaigns.
Target market
We primarily plan to target the market of home cooks aged between 50 and 60 years old and clients of 25 to 35 years old who would be interested in buying homemade food online. We target cooks of the above-mentioned age because these are the people to have achieved their professional goals and at this stage have the time, experience and willingness to cook at home and get some extra money to their pockets. The age of their customers is expected to vary between 25 and 35 years old for the reason that by this age people tend to realize the advantages of home food over fast food, however, are busy with their jobs and do not have the time or energy for cooking after work.
Competition and Industry overview
The Food Delivery industry of Lithuania accounted over $47,000,000 in the year of 2018 and is expected to continue growing by 21.6% during the next four years, thus, bringing a promising opportunity for online restaurants and home cooks selling their meals online to accumulate great revenues. In addition, data indicates that the vast majority of the revenue gathered in the year of 2018 was Take Away services, meaning people currently are willing to pick up their meals by themselves rather than wait for couriers, and the segment is expected to grow significantly by 2022.
We expect to face strong competition from the online restaurants industry that nowadays is very well-developed and popular. The most competitive service providers are ChiefPizza, Meniu.lt and Rekvizitai.lt. Though these companies are well-known, none of them offers homemade original food with a great diversity of choices at very competitive prices. These points are positioned to be our strengths and opportunities.
Revenue
Currently we see the following sources of our income:
- The company’s revenue is to be generated by users' sales. We plan to change 5% off every sale made through our platform.
- From selling the advertising slots on the pages of our web platform.
Employees Identification of Certain Significant Employees.
We are a start-up company and currently have one employee only - Natalija Tunevic, our president, treasurer, secretary and director. We intend to outsource any additional services if the business requires so.
Offices
The Company rents an office at Vilniaus g.31, Vilnius, LT-01402, Lithuania. The phone number of the Company is +37052512561 available Monday to Friday from 10:00am to 5:00pm EET (Lithuanian time). The direct phone line of Natalija Tunevic is +15404950016.
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Government Regulation
We will be required to comply with all regulations, rules, and directives of governmental authorities including the US Securities and Exchange Commission and agencies applicable to our business in any jurisdiction with which we would conduct activities. We do not believe that governmental regulations will have a material impact on the way we conduct our business.
Item 1A. Risk Factors
Not applicable to smaller reporting companies.
Item 1B. Unresolved Staff Comments
Not applicable to smaller reporting companies.
Item 2. Description of Property
We do not own any real estate or other properties.
Item 3. Legal Proceedings
We know of no legal proceedings to which we are a party or to which any of our property is the subject which are pending, threatened or contemplated or any unsatisfied judgments against us.
Item 4. Mine Safety Disclosures
Not applicable.
Item 5. Market for Common Equity and Related Stockholder Matters
Market Information
There is a limited public market for our common shares. Our common shares are not quoted on the OTC Bulletin Board at this time. Trading in stocks quoted on the OTC Bulletin Board is often thin and is characterized by wide fluctuations in trading prices due to many factors that may be unrelated to a company’s operations or business prospects. We cannot assure you that there will be a market in the future for our common stock.
OTC Bulletin Board securities are not listed or traded on the floor of an organized national or regional stock exchange. Instead, OTC Bulletin Board securities transactions are conducted through a telephone and computer network connecting dealers in stocks. OTC Bulletin Board issuers are traditionally smaller companies that do not meet the financial and other listing requirements of a regional or national stock exchange.
As of March 31, 2019, no shares of our common stock have traded.
Number of Holders
As of July 09, 2019, the 5,014,080 issued and outstanding shares of common stock were held by a total of 33 shareholders of record.
Dividends
No cash dividends were paid on our shares of common stock during the fiscal year ended March 31, 2019 and from November 6, 2017 (inception) to March 31, 2018.
Recent Sales of Unregistered Securities
The Company has 75,000,000, $0.001 par value shares of common stock authorized.
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On December 27, 2017, the Company issued 2,000,000 shares of common stock to a director for cash proceeds of $2,000 at $0.001 per share and on January 16, 2018 the Company issued 2,000,000 shares of common stock to a director for cash proceeds of $2,000 at $0.001 per share.
In August 2018 the Company issued 1,014,080 shares of common stock for cash proceeds of $25,352.
There were 5,014,080 shares of common stock issued and outstanding as of July 09, 2019.
Purchase of our Equity Securities by Officers and Directors
On December 27, 2017, the Company offered and sold 2,000,000 restricted shares of common stock to our president and director, Natalija Tunevic, for a purchase price of $0.001 per share, for aggregate offering proceeds of $2,000 and on January 16, 2018, the Company offered and sold 2,000,000 restricted shares of common stock to our president and director, Natalija Tunevic, for a purchase price of $0.001 per share, for aggregate offering proceeds of $2,000, pursuant to Section 4(2) of the Securities Act of 1933 as she is a sophisticated investor and is in possession of all material information relating to us. Further, no commissions were paid to anyone in connection with the sale of these shares and general solicitation was not made to anyone.
Other Stockholder Matters
None.
Item 6. Selected Financial Data
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis of our financial condition and results of operations for the years ended March 31, 2019 and 2018 should be read in conjunction with the Financial Statements and corresponding notes included in this Annual Report on Form 10-K. Our discussion includes forward-looking statements based upon current expectations that involve risks and uncertainties, such as our plans, objectives, expectations, and intentions. Actual results and the timing of events could differ materially from those anticipated in these forward-looking statements as a result of a number of factors, including those set forth under the Risk Factors and Special Note Regarding Forward-Looking Statements in this report. We use words such as “anticipate,” “estimate,” “plan,” “project,” “continuing,” “ongoing,” “expect,” “believe,” “intend,” “may,” “will,” “should,” “could,” “target”, “forecast” and similar expressions to identify forward-looking statements.
RESULTS OF OPERATIONS
We have incurred recurring losses to date. Our financial statements have been prepared assuming that we will continue as a going concern and, accordingly, do not include adjustments relating to the recoverability and realization of assets and classification of liabilities that might be necessary should we be unable to continue in operation.
We expect we will require additional capital to meet our long-term operating requirements. We expect to raise additional capital through, among other things, the sale of equity or debt securities.
FISCAL YEAR ENDED MARCH 31, 2019 COMPARED TO FISCAL YEAR ENDED MARCH 31, 2018.
Our net losses for the fiscal years ended March 31, 2019 and 2018 were $78,225 and $739. During fiscal years ended March 31, 2019 and 2018 the Company did not generate any revenue.
During the fiscal year ended March 31, 2019, we incurred general and administrative expenses of $78,225 compared to $739 incurred during fiscal year ended March 31, 2018.
General and administrative expenses generally include legal fees, auditor and accounting expenses.
The weighted average number of shares outstanding was 4,637,288 for the fiscal year ended March 31, 2019 and 4,000,000 for the fiscal year ended March 31, 2018.
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LIQUIDITY AND CAPITAL RESOURCES AND CASH REQUIREMENTS
FISCAL YEAR ENDED MARCH 31, 2019 and 2018
As of March 31, 2019, our total assets were $30,523 comprised of $102 in current assets, $25,363 in other current assets and $5,059 in fixed assets and our total liabilities were $80,135.
As of March 31, 2018, our total assets were $8,311 comprised of $5,691 in current assets and $2,621 in other current assets and total liabilities were $5,050.
Stockholders’ equity decreased from $3,261 as of March 31, 2018 to $(49,612) as of March 31, 2019.
CASH FLOWS FROM OPERATING ACTIVITIES
For the fiscal year ended March 31, 2019, net cash flows used in operating activities was $84,165. As of March 31, 2018, net cash flows used in operating activities was $3,359.
CASH FLOWS FROM INVESTING ACTIVITIES
As of March 31, 2019, net cash flows used in investing activities was $9,861.
CASH FLOWS FROM FINANCING ACTIVITIES
For the fiscal year ended March 31, 2019, net cash from financing activities was $88,437 consisting of capital stock issued and loan from related parties. As of March 31, 2018, net cash from financing activities was $9,050 consisting of loan from related parties of $5,050 and capital stock of $4,000.
There is no assurance that our company will be able to obtain further funds required for our continued working capital requirements.
There is substantial doubt about our ability to continue as a going concern as the continuation of our business is dependent upon public offering and achieving a profitable level of operations. The issuance of additional equity securities by us could result in a significant dilution in the equity interests of our current stockholders. Obtaining commercial loans, assuming those loans would be available, will increase our liabilities and future cash commitments.
Due to the uncertainty of our ability to meet our current operating and capital expenses, in their report on our audited consolidated financial statements, our independent auditors included an explanatory paragraph regarding substantial doubt about our ability to continue as a going concern. Our financial statements have been prepared assuming that we will continue as a going concern, which contemplates that we will realize our assets and satisfy our liabilities and commitments in the ordinary course of business.
Limited operating history; need for additional capital
There is no historical financial information about us upon which to base an evaluation of our performance. We are in a start-up stage of operations and have generated limited revenues since inception. We cannot guarantee that we will be successful in our business operations. Our business is subject to risks inherent in the establishment of a new business enterprise, including limited capital resources and possible cost overruns due to price and cost increases in services and products.