Description of Business
General Information
Organizational Structure
EOS Inc. (“we,” “us,” “our,” or the “Company”) was incorporated in the State of Nevada on April 3, 2015.
On or about November 18, 2016, the Company caused to be formed EOS INC. TAIWAN BRANCH, a Taiwanese corporation (“EITB”). To date, EITB has no shareholders.
During the year ended December 31, 2016, the Company paid the expenses of EITB, and the amount of those expenses is $1,870. Additionally, the Company will continue to pay the expenses of EITB.
The principal executive office of EITB is located at Room 519, 5F, No. 372, Linsen N. Road, Zhongshan District, Taipei City, 104, Taiwan (Republic of China). The Company reimburses EITB for the rent for that office, the amount of which is $500 per month.
Yu-Cheng Yang, the Company’s sole director, is the sole director of EITB.
Yu-Hsiang Chia is the branch manager of EITB. Mr. Chia, also, holds 2,700,000 shares of the Company’s common stock.
We have never been a party to any bankruptcy, receivership or similar proceeding, nor have we undergone any material reclassification, merger, consolidation, purchase or sale of a significant amount of assets not in the ordinary course of business.
General Business Overview
We plan to market and distribute in Taiwan skin care products manufactured by A.C. (USA), Inc., which is located in the City of Industry, California (“A.C.”). We intend to market and distribute those skin care products to resellers who will recognize the needs of their targeted customers. Our strategy will be to target spas, department stores and specialty stores that sell similar skin products.
The skin care products that we will distribute are designed to address various skin care needs. Those products include moisturizers, serums, cleansers, toners, body care, exfoliators, acne and oil correctors, facial masks, cleansing devices and sun care products. A number of those products are developed for use on particular areas of the body, such as the face or hands or around the eyes.
As of the date of this annual report, we, have had only limited start-up operations and have not generated revenues. We will not be profitable until we derive sufficient revenues and cash flows from sales of the various skin care products. We anticipate that we will receive revenue from the sale of those skin care products. As of the date of this annual report, the amounts of the prices for those skin care products have not been determined.
We will regularly evaluate the market response for our existing products and perform appropriate trend analysis for new products from suppliers other than A.C. We anticipate that such evaluation will be to review all sales to analyze which products are selling. Additionally, we anticipate that we may engage one or more local marketing or advertising companies which can assist us to understand the various trends and explore new business opportunities. Also, we will participate in certain exhibitions related to the skin care and cosmetic industry with the intent to meet and develop relationships with other suppliers to expand those products which we may market and distribute.
Distribution Agreement
On May 1, 2015, we entered into a written Distribution Agreement with A.C. pursuant to which we have an exclusive right to market and distribute in Taiwan certain skin care products manufactured by A.C. for a period of 5 years (the “Distribution Agreement”). Pursuant to the provisions of the Distribution Agreement, we will market and promote the therein defined Products in Taiwan, which is the therein defined as the “Territory.” Accordingly, we are the exclusive distributor for those Products in Taiwan.
Skin Care Products
Moisturizing Mask – contains highly concentrated hydrating and anti-wrinkle ingredients that are specifically targeted for anti-wrinkle effects. This product adds moisture to the skin and brings out a natural healthy glow. Key ingredients are collagen, glycerin, hyaluronic acid, purified water and silk hydrolyzed protein. Rose water contributes a relaxing effect.
Acne Mask – a special formula that penetrates into the skin to clean pores, remove dirt and help balance oil secretion. While purifying, Acne Mask, also, hydrates and moisturizes the skin, leaving the face feeling calm and luminous. Ingredients include aloe vera extract, eucalyptus, lemon extract, hydrogenated castor oil, chamomile extract and sorbitol.
Levo-H Serum – formulated to provide maximum hydration to the skin, as well as to reduce fine lines. After using this product, the skin feels moisturized and appears radiant.
Brightening Mask – contains concentrated L-ascorbic acid and natural botanical extracts that are good for evening skin tones and hydrating the skin. Application of the mask after exposure to sun can help minimize sun damage and clarify the skin. Ingredients include carbopol, perfume, diglycerin, hyaluronic acid, aloe vera extract, mulberry extract, ginseng extract, collagen, rose water, hydrogenated castor oil, kojic acid and berry extract.
Levo-C Serum – designed to diminish ultraviolet damage and even out overall skin tone. This product has a high concentrate L-ascorbic acid and can, also, clarify skin, leaving it with a healthy glow.
We believe our market will be resellers who recognize the needs of the targeted consumer. Our strategy will be to target spas, department stores and specialty stores that sell similar skin care products. We hope that our product positioning will assist in the marketing and distribution of those skin care products. We anticipate that we will reach our targeted reseller market by the following types of resellers:
Spas and Health Clubs – Most high quality day spas and health clubs (and many upscale spas at resort properties) use generic products. Our goal will be to develop affiliations with select spas in urban areas and vacation destinations to whom we will market and sell those skin care products.
Lifestyle Retailers – We anticipate that the skin care products will be lifestyle-based rather than the typical soaps and potions of natural product retailers. These retailers exist in almost every city and have developed loyal and sophisticated customer bases.
Additionally, we anticipate that we will market those skin care products to cosmetic specialty retailers and boutique department stores.
We believe that the targeted in users of those skin care products are between the ages of 20 and 65 and are predominantly female. We believe they are urban professionals with at least some college level education. The targeted in user has an active lifestyle and is concerned about social and environmental issues. Mind and body wellness are important to them. They belong to a health club; take yoga, pilates or taichi lessons. The effects of aging and maintenance of a youthful appearance are a part of their life.
Competition
The skin care business is characterized by vigorous competition throughout the world. Brand recognition, quality, performance, availability and price are some of the factors that impact consumers’ choices among competing products and brands. Advertising, promotion, merchandising, the pace and timing of new product introductions, line extensions and the quality of in-store demonstrations also have a significant impact on consumers’ buying decisions. We compete against a number of companies, some of which have substantially greater resources than we do.
Our principal competitors consist of large, well-known, multinational manufacturers and marketers of skin care products, most of which market and sell their products under multiple brand names. They include, among others, L’Oreal S.A.; Shiseido Company, Ltd.; Beiersdorf AG; LVMH Moet Hennessey Louis Vuitton; Coty, Inc.; The Procter & Gamble Company; Avon Products, Inc.; Chanel S.A.; and Groupe Clarins. We also face competition from a number of independent brands, as well as some retailers that have developed their own skin care brands. Certain of our competitors may also have ownership interests in retailers that are customers of ours.
Patents and Trademarks
At the present we do not have any patents or trademarks.
Need for any Government Approval
There is no approval required for the marketing and distribution of those skin care products in Taiwan; provided, however, pursuant to the Statute for the Control of Cosmetic Hygiene promulgated by the Ministry of Health and Welfare in Taiwan, we are required to file an application with the Ministry of Health and Welfare in Taiwan for reference purposes.
We have been informed by appropriate representatives of A.C. that the skin care products we plan to market and distribute pursuant to the Distribution Agreement are classified as cosmetics not containing any medical, poisonous or potent drugs under the Republic of China Statute for Control of Cosmetic Hygiene. Accordingly, those products are not necessarily subject to any inspection to obtain approval for their sales. The labeling of those packages will clearly indicate in Chinese the name and address of the manufacturer, the name of the product, the ingredients, the usage and directions, the weight, the manufacturing date, the expiration date, the name and address of the importer. We have been informed by those representatives that those skin care products are, currently, appropriate for marketing and distribution in Taiwan. Accordingly, we intend to market and distribute those products as soon as we receive the appropriate sales permit. In that regard, we will be required to obtain from the appropriate local authority, i.e., the Taipei City Office of Commerce, a permit similar to a business license required by most U.S. cities.
Research and Development Activities
Other than time spent researching our proposed business, we have not spent any funds on research and development activities to date.
Environmental Laws
Our operations are not subject to any environmental laws.
Employees and Employment Agreements of the Company
We have one employee. Our President (and sole director), Yu Cheng Yang, who, currently, devotes 40 or more hours a week to our business, is responsible for the primary operation of our business. There is no employment or similar agreement between the Company and any of its employees, including Mr. Yang.
Employees and Employment Agreements of EITB
Currently, EITB has one employee. EITB’s branch manager, Yu-Hsiang Chia, currently devotes up to 4 hours per week to EITB.
12 Month Growth Strategy
Our strategy is to maximize shareholder value by expanding operations and evaluating and cultivating new and alternative revenue generating opportunities. We are committed to marketing and distributing skin care products. While a strategic and wisely executed marketing campaign is key to expanding our operations; offering new, innovative skin care products should position us in the best possible way for long term success.
As a smaller reporting company, we are not required to provide this information required by this item.
None.
We do not own any real property. Our business is presently operated from offices provided by our President, Yu Cheng Yang at Room 519, 5F, No. 372, Linsen N. Road, Zhongshan District, Taipei City, 104, Taiwan (Republic of China), Mr. Yang provides those offices free of charge and pursuant to an oral license agreement. We consider our current office arrangement adequate and will reassess our needs based upon the future growth of the Company. EITB shares those offices with the Company and pays $500 a month. We reimburse EITB that amount.
Not applicable
No public market currently exists for shares of our common stock.
There were approximately 148 holders of record of our common stock as of April 7, 2017.
Common Stock
As the date of this annual report, the outstanding number of shares of our common stock was 64,122,997. All our outstanding common shares are fully paid and non-assessable.
Our shareholders are entitled to one vote for each share of our common stock owned on any and all matter brought forth at a shareholders’ meeting. There are no cumulative voting rights, which mean that the shareholder or shareholders owning 50% of the issued and outstanding shares in our capital stock can elect the entire board of directors. Therefore, any shareholder or shareholders, cumulatively, with less than 50% cannot elect any director to the board of directors on their won. Pursuant to the provisions of Section 78.320 if the Nevada Revised Statues (the “NRS”) at least one percent of the outstanding shares of stock entitled to vote must be present, in person or by proxy, at any meeting in favor of the action exceeds the number of votes cast in opposition to the action, provided, however, that directors are elected by a plurality of the votes of the shares present at the meeting and entitled to vote. Certain fundamental corporate changes such as the liquidation of all our assets, mergers or amendments to our Articles of Incorporation require the approval of holders of a majority of the outstanding shares entitled to vote.
Holders of our common stock have no pre-emptive rights, no conversion rights and no subscription rights. There are no redemption or sinking fund provisions applicable to our common stock.
Preferred Stock
At present, we have no preferred stock authorized.
Rule 144 Share Restrictions
Under Rule 144, an individual who is not an affiliate of our Company and has not been an affiliate at any time during the 3 months preceding a contemplated sale and has been the beneficial owner of our shares for at least 6 months would be entitled to sell them without restriction. This is subject to the continued availability of current public information about us for the first year that can be eliminated after a one-year hold period.
Whereas an individual who is deemed to be our affiliate and has beneficially owned our common shares for at least 6 months can sell his or her shares in a given 3 month period as follows:
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One percent of the number of shares of our common stock then outstanding, or | |
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The average weekly trading volume of our common stock during the four calendar weeks preceding the filing of a notice on Form 144 with respect to such sale. |
As of the date of this Form 10-K, we are a shell company. Rule 144 is not available for securities initially issued by a shell company, whether reporting or non-reporting, or a company that was at any time previously a shell company, unless that company:
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has ceased to be a shell company; | |
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is subject to the Securities Exchange Act of 1934 (the “Exchange Act”) reporting obligations; | |
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has filed all required Exchange Act reports during the preceding 12 months; and | |
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at least one year has elapsed from the time that company filed with the SEC current Form 10 type information specifying its status as an entity that is not a shell company. |
As a result, any person initially issued shares of our common stock, excluding those shares registered in our effective registration statement, may not be entitled to sell such shares until the above conditions have been satisfied. Upon satisfaction of these conditions, such sales by our affiliates would be limited by manner of sale provisions and notice requirements and the availability of current public information, about us as set forth above.
Dividends
The holders of our common stock are entitled to receive dividends on a pro rata based on the number of shares held, when and if declared by our Board of Directors, from funds legally available for that purpose. Section 78.288 of Chapter 78 of the NRS prohibits us from declaring dividends where, after giving effect to the distribution of the dividend we would not be able to pay our debts as they become due in the normal course of business; or except as may be allowed by our Articles of Incorporation, our total assets would be less than the sum of our total liabilities plus the amount that would be needed, if we were to be dissolved at the time of the distribution, to satisfy the preferential rights upon dissolution of stockholders who may have preferential rights and whose preferential rights are superior to those receiving the distribution. We do not, however, intend to pay any dividends in the foreseeable future and currently intend to retain all future earnings to finance our business.
Our shareholders are not entitled to preference as to dividends or interest; pre-emptive rights to purchase new issues of shares; preference upon liquidation; or any other special rights or preferences.
There are no restrictions on dividends under any loan or other financing arrangements.
We paid no dividends on our common stock in 2016. We do not have a policy of paying regular dividends and do not expect to pay any dividends on our common stock in the foreseeable future. We currently intend to retain any future earnings for our business. The payment of any future dividends on our common stock will be determined by our Board of Directors and will depend on business conditions, our financial earnings and other factors.
Outstanding Stock Options, Purchase Warrants and Convertible Securities
We have no outstanding stock options, purchase warrants or convertible securities.
Equity Compensation Plans, Bonus Plans
We have no such plans. None have been approved. We have no Compensation Committee.
Pension Benefits
We do not have any defined benefit pension plans.
Nonqualified Deferred Compensation
We do not maintain any nonqualified deferred compensation plans.
Debt Securities
We have no debt securities outstanding.
Repurchase Programs
There is currently no share repurchase program pending.
Recent Transactions Involving Unregistered Securities
As a smaller reporting company, we are not required to provide the information required by this item.
Forward Looking Statements
Some of the statements contained in this Form 10-K that are not historical facts are "forward-looking statements" which can be identified by the use of terminology such as "estimates," "projects," "plans," "believes," "expects," "anticipates," "intends," or the negative or other variations, or by discussions of strategy that involve risks and uncertainties. We urge you to be cautious of the forward-looking statements, that such statements, which are contained in this Form 10-K, reflect our current beliefs with respect to future events and involve known and unknown risks, uncertainties, and other factors affecting our operations, market growth, services, products, and licenses. No assurances can be given regarding the achievement of future results, as actual results may differ materially as a result of the risks we face, and actual events may differ from the assumptions underlying the statements that have been made regarding anticipated events. Factors that may cause actual results, our performance or achievements, or industry results, to differ materially from those contemplated by such forward-looking statements include without limitation:
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Our ability to attract and retain management and key employees; |