Corporate Background and General Business Overview
Our Company was incorporated in the State of Nevada on July 8, 2014 to engage in the development and operation of a business engaged in the distribution of glass craft products produced in China. We are a development stage company and also considered an "Emerging Growth Company". Our fiscal year end is July 31st. Our executive offices are located at 8153 Finch Feather St., Las Vegas, NV 89143. Our phone number is (775) 572-8824. On July 28, 2014 we purchased an office and small shop for US$8,000, located at: Jaunciema gatve 40, Ziemeļu rajons, Rīga, LV-1023, Latvia. The primary activities at the Las Vegas location will be carried out by our sole employee and CEO, Andris Berzins. He will be working from this location as his schedule permits, to process sales, oversee company operations in US, make sure our business plan in implemented as it should – including verifying that orders are fulfilled properly, regular office work (processing incoming mail, making phone calls to customers and suppliers, etc.) and working on our website content. Mr. Berzins will also travel to Latvia, to work in the office in the shop there; to create a plan to reach out to potential customers in European Union (EU), to locate less expensive potential suppliers of our offered products, to process incoming mail in Latvia from local authorities, to keep all required paperwork in up to date state, working on content of our company website in Latvian language (for local customers) with the goal of reaching out to more customers to make our company more successful.
We require a minimum funding of $12,990 to conduct our business over the next 12 months, and if we are unable to obtain this level of financing, our business may fail.
We are in the early stages of developing our plan to distribute glass craft products, in forms including but not limited to glass crafts, novelties, knobs, trophies, vases, glasses, boxes, bowls, trays, plates. We currently have some operating history which includes revenues and cost of sales. Our plan of operations over the 12 month period following successful completion of our Offering is to develop and establish our glass craft products distribution business and hire three more salespeople (See "Business of the Company" and "Plan of Operations").
From inception until the date of this filing we have had limited operating activities, primarily consisting of the incorporation of our company and the initial equity funding by our sole officer and director. We have generated some revenues and our principal business activities to date have consisted of creating a business plan and entering into a Supply Agreement, dated July 10, 2014, with three Chinese companies, Xiamen Ebei Import & Export Co., Ltd. ("Xiamen Ebei"), Yangzhou Kanglong Glass Arts Co., Ltd. ("Yangzhou Kanglong"), and Yancheng Sunrise Import & Export Co.,Ltd. ("Yancheng Sunrise"). Xiamen Ebei, Yangzhou Kanglong and Yancheng Sunrise are large and well-established suppliers and distributors of glass craft products in China. The terms and conditions of the Supply Agreement provide that, among other things, we have the right to purchase a variety of glass craft products (including crafts, novelties, knobs, trophies, vases, glasses, boxes, bowls, trays and plates) produced by each of the companies. The agreements also outline the following basic terms (see Agreements as filed in the Company's Registration Statement on Form S-1 for the full terms):
| 1. | The term of each agreement began on August 1, 2014 and expires August 1, 2018. | |
| 2. | Summit will give the Supplier (Seller) 60 days' notice regarding the quantity requested for delivery. Supplier will arrange delivery through a carrier chosen by the Supplier, the cost of which shall be F.O.B. | |
| 3. | The agreement between Summit and the Supplier is non-exclusive. | |
| 4. | The prices to be paid by Summit under the Supply Agreements are fixed by agreement between Summit and the Supplier. Prices are exclusive of all taxes, insurance and shipping and handling charges which are Summit's responsibility. | |
| 5. | Summit (and its customers) has the right to inspect the goods upon receipt and notify the Supplier of any claim for damages. If any defect or damages is identified the Supplier will replace or repair the goods or refunds the purchase price at the Suppliers option. |
While we have entered into supply agreements with these three suppliers, we can make no assurance that we will be able to maintain these third-party relationships or establish additional relationships as necessary to support growth and profitability of our business on economically viable terms. As independent companies, these glass craft products suppliers make their own business decisions. Such suppliers may choose not to do business with us for a variety of reasons, including competition, brand identity, product standards and concerns regarding our economic viability. They may have the right to determine whether, and to what extent, they will produce and distribute the products we need for resale. In addition, their financial condition could also be adversely affected by conditions beyond our control and our business could suffer.
We received our initial funding of $4,000 through the sale of common stock to our sole officer and director, who purchased 4,000,000 shares at $0.001 per share.
Our financial statements from inception on July 8, 2014 through our second fiscal year ended July 31, 2015 reported $149,176 in revenues and a net loss of $17,812. Our financial statements from inception on July 8, 2014 through our first fiscal year ended July 31, 2014 reported $30,100 in revenues and a net income of $5,090.
Our independent registered public accountant has issued an audit opinion for our Company which includes a statement expressing substantial doubt as to our ability to continue as a going concern.
We closed our recent Offering pursuant to a Registration Statement on Form S-1. The Offering was for the sale of a total of 2,000,000 shares of common stock at a fixed price of $.04 per share. We were only able to sell 50% of the offering, 1,000,000 shares for proceeds of $40,000. Proceeds from the sale of the shares are being used to fund the initial stages of our business development.
The Company qualifies as an "emerging growth company" as defined in the Jumpstart our Business Startups Act (the "JOBS Act"). We intend to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved. As well, our election allows us to delay the adoption of new or revised accounting standards that have different effective dates for public and private companies until they apply to private companies. Therefore, as a result of our election, our financial statements may not be comparable to companies that comply with public company effective dates.
Our Product
Brief History of Glass
Glass is an inorganic solid material that is usually clear or translucent with different colors. It is hard, brittle, and stands up to the effects of wind, rain or sun.
Glass has been used for various kinds of bottles and utensils, mirrors, windows and more. It is thought to have been first created around 3000 BC, during the Bronze Age. Egyptian glass beads date back to about 2500 BC.
A very important advance in glass manufacture was the technique of adding lead oxide to the molten glass; this improved the appearance of the glass and made it easier to melt using sea-coal as a furnace fuel. This technique also increased the "working period" of the glass, making it easier to manipulate. The process was first discovered by George Ravenscroft in 1674, who was the first to produce clear lead crystal glassware on an industrial scale.
The mass production of glass was developed in 1887 by the firm Ashley in Castleford, Yorkshire. This semi-automatic process used machines that were capable of producing 200 standardized bottles per hour, many times quicker than the traditional methods of manufacture.
Our Products
Glass craft's unique designs in glass artwork and the superior products created from this magnificent glass have made it popular around the world. As well as traditional glass products, new, modern designs are developed by the factories and workshops to ensure glass craft products maintain their appeal. Handmade glass appears in many forms, including vases, wine and champagne glasses, plates, trays, baskets, fruit bowls and decanters. These beautiful items are perfect for wedding gifts, anniversary gifts or corporate gift or house décor item.
Glass craft products are known for their clarity, sparkle and transparency as well as for thin, shining, liquid-like quality and expert craftsmanship. Our mission is to bring our customers high quality glass craft products at a competitive price. Our suppliers, who represent the most advanced glass craft product manufacturers, agreed to supply us with many kinds of glass craft products. We transmit any orders received to our supplier for shipment. Our customers are responsible to cover the shipping costs. Shipping costs are added automatically to a customer's final bill.
Potential customers
We currently sell our products to wholesale customers; we may in the future sell in the retail market. Our President and sole director, Mr. Andris Berzins markets our products and negotiates agreements with potential customers in the USA. We use marketing strategies, such as web advertisements, direct mailing, and phone calls to market our products and acquire potential customers. We plan to attend trade shows in our industry to showcase our product with a goal to find new customers.
Competition
There are many well-established manufacturing, distribution and retail sales companies selling glass craft products, such as HOBBY LOBBY (http://shop.hobbylobby.com/crafts-hobbies-and-fabric-crafts/glass-crafts/), JO ANN STORE (http://www.joann.com/crafts/basics/craft-supplies/glass-art/), D&L ART GLASS SUPPLY (http://www.dlartglass.com/), and DELPHI GLASS (http://www.delphiglass.com/more-crafts/), to name a few of the larger competitors.
We expect to face medium to high level of resistance in the market, where it will be up to our marketing efforts and negotiation skills to acquire new customers. Substantially all of our competitors have greater financial resources and may be able to withstand sales or price decreases better than we can. We also expect to continue to face competition from new market entrants. We may be unable to continue to compete effectively with these existing or new competitors, which could have a material adverse effect on our financial condition and results of operations.