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GELTOLOGY INC - 10-K - Managements's Discussion and Analysis or Plan of Operation
(Edgar Glimpses Via Acquire Media NewsEdge) RESULTS OF OPERATIONS
For the years ended December 31, 2011 and December 31, 2010
We have not generated any revenues since inception, including for the year ended
December 31, 2011, except for $77,430 in fees for outsourcing transactions. Our
operating activities during these periods consisted primarily of developingour
business plan.
General and administrative expenses were $100,433 for the year ended December
31, 2011, compared to $98 for the year ended December 31, 2010. The increase in
general and administrative expenses was due to an increase in our activity
level, and expenses relating to our initial public offering. General and
administrative expenses primarily consist of consulting fees, professionalfees
and filing fee expenses.
Our net loss for the year ended December 31, 2011, was $23,003 or $0.00 per
share, compared to $98 or $0.00 per share for the year ended December 31, 2010.
The weighted average number of shares outstanding was 4,821,233 at December 31,
2011, compared to 2,663,014 at December 31, 2010.
LIQUIDITY AND CAPITAL RESOURCES
As of December 31, 2011
As of December 31, 2011, our current assets were $23,706 and our current
liabilities were $28,155, resulting in negative working capital of $4,449.
As of December 31, 2011, our total liabilities were $28,155, compared to total
liabilities of $0 as of December 31, 2010,
Stockholders' equity decreased from $377 at December 31, 2010, to a deficit of
$4,449 at December 31, 2011. This was the result of the net loss for the year
ended December 31, 2011.
For the year ended December 31, 2011, net cash provided by operating activities
was $5,152, compared to net cash used in operating activities of $98 for the
year ended December 31, 2010. Net cash provided by operating activities for the
year ended December 31, 2011 was mainly the result of a net loss adjusted for
changes in liabilities.
For the year ended December 31, 2011, net cash used in investing activities was
$0, compared to net cash used in investing activities of $0 for the year ended
December 31, 2010.
Net cash flows from financing activities for the year ended December 31, 2011
was $18,177, compared to net cash flows from financing activities of $475 for
the year ended December 31, 2010.
Plan of Operation
Our initial marketing strategy will focus on corporations in the New York City
area that are looking to give promotional gifts to their employees, clients and
customers. We plan to schedule meetings with purchasing agents, human resources
professionals, corporate marketing officials and company fitness instructors (if
there are such personnel) in order for us to present our product. Our main focus
in these meetings will be to encourage companies to use our products when they
need to set up company special events where items are given away as promotional
gifts, such as:
· Company sales kickoffs
· Promotional award ceremonies
· Holiday party gifts
· Company fitness reward programs
We have started a grass-roots marketing campaign by contacting the heads of the
purchasing and marketing departments and the heads of human resources at New
York corporations. We intend to print a one-page, four-color flyer, which we
intend to mail to the appropriate persons at those corporations asking them to
meet with our directors to hear our sales pitch. We intend to order 100 units of
yoga mats, printed with the Geltology name and phone number, together with the
slogan "order yoga mats with your corporate logo as a promotional give away
item." We intend to hand out these free yoga mats to the department heads during
our sales meetings with them. We plan to convince these corporate clients to
give their employees products that are health-related, which will be embossed
with their own corporate logos. We plan to create an e-commerce website that
will allow our customers to upload their logo in commonly used formats, to pick
the color of their yoga mats, to pay for their orders via credit card, andto
track their shipments.
Eventually, we hope that our web site will include a large list of promotional
gift items, all focused on health-related products in the yoga field.
In the future, we intend to employ search engine optimization policy to promote
our site ranking, and to be able to attract customers from outside the New York
City area. Eventually we plan to use a variety of social media tools such as
Twitter, LinkedIn and Facebook. To increase coverage and minimize workloads, we
plan to use timed messages. These are messages that can be scheduled in advance
to appear at predetermined times that are intended give them maximum visibility
in various time zones.
We plan to locate New York City-based yoga instructors, whom we will ask to
write yoga related articles for our web site. We will offer these yoga
professionals exposure to the corporations to whom we market our products.
Eventually, we envision our site becoming a yoga resource, in which people can
find local yoga instructors, yoga studios, and yoga accessories. We hope that
this will promote traffic to our site, which may eventually allow us to sell our
products to individual retail customers.
The messages themselves include a variety of themes that are important to our
site and our business. These message themes include:
§ Focus on the health benefits of yoga.
§ The importance of using the right equipment while practicing yoga.
Each theme will be geared to the medium used. For example, for Twitter, these
will include short posts (limited by the platform to under 140 characters) using
our Twitter account @geltology.com.
Initially, our directors and Officers will be responsible for the social media
campaigns.
We do not intend to carry any inventory. We plan to order products from the
supplier in Asia after the clients order the products from us. This method of
operations is known as "just-in-time" inventory techniques. When properly
implemented, "just-in-time" inventory techniques ensure that orders are
processed without the need for inventory storage or a warehousing, and that
orders match supply requests one-to-one. In order to implement "just-in-time"
inventory, we must immediately purchase items ordered from one of our suppliers
and drop-ship to our client as soon as a purchase is made on our website and
payment is confirmed.
In the next 12 months of operations, we plan on targeting corporations in the
New York City area and offering our yoga mat as a promotional gift item. Until
our e-commerce web site is completed, which we anticipate will happen by the end
of the first quarter of 2012, we anticipate accepting orders by email. The next
12 months will be primarily devoted to creating a corporate customer base in the
New York City area, and to developing the infrastructure to eventually grow the
business throughout the continental United States. We anticipate being ready to
begin processing our first orders by the end of the second quarter of 2012 from
business generated by handing out or mailing our flyers to corporations in the
New York City area. In the second year of operations, we plan to promote our web
site outside the New York City area, thereby attracting customers in areas where
we are not physically present.
During 2011 and 2012, we will strive to reach the following milestones:
§ October-November 2011 - we raised $40,000 in our initial public offering
§ February 2012 - locate web designer, mail flyers and start sales cycle with
corporate decision makers in the New York metropolitan area. Continue source
manufacturing in asia for third party clients.
§ Second Quarter 2012 - design corporate flyer and order initial promotional
order of 100 yoga mats begin sales, identify e-commerce software, web site
programmer, and design and launch web site., identify and sign up local New
York City yoga instructors to write articles for our web-site and to act as
advisors to our company who will assist with future product ideas.
§ 3rd Quarter 2012 - locate suppliers of additional products for inclusion in our
future promotional gift product line. Promote our web site on various social
media tools. Reach out to additional yoga instructors throughout the country.
§ 4th quarter 2012 - start sales throughout the country via our web site.
We have not yet sold any yoga mats and our web site is not yet operational.Our sales price to our customers will be based on order quantity with the
minimum order quantity of 10 pieces.
Yoga Mat Pricelist
Cost/Mat Sales Price/Mat
Drop Ship From China 10-100 Pieces 101-500 501- 1000 1000- 4000 4000+
$2.48 + shipping $ 7.00+ shipping $ 6.75+ shipping $ 6.50+ shipping $ 6.00+ shipping $ 5.25+ shipping
Each yoga mat costs us $2.48 FOB China. We will contract with a shipping company
in order to deliver the mats to the customers' doors in the United States. We
anticipate shipping costs will be less than $1 per mat, and have held
discussions with two freight forwarding companies. We have not yet contracted
with a shipping company.
Assuming that the pricing above is correct, our profit margin per piece is as
follows:
· 10-100 pieces - $4.52 profit per unit
· 101-500 pieces - $4.27 profit per unit
· 501-1000 pieces - $4.02 profit per unit
· 1000-4000 pieces - $3.52 profit per unit
· 4000 or more pieces - $2.77 profit per unit
· As our second year commences we plan to offer further yoga products to
corporations as part of their promotional giveaways. We may also offer to hold
corporate yoga retreats in certain areas of the country. Our secretary Ryan
Goldstein will coordinate these retreats and we will market this to our
existing client base.
Additional Capital Formation Activities
On March 25, 2010, the Company issued 1,000,000 shares of common stock to a
director of the Company, for a $100 subscription receivable. Payment was
received in 2010.
On July 1, 2010, the Company issued 3,750,000 shares of common stock to a
director of the Company, for a $375 subscription receivable. Payment was
received in 2010.
We still do not have sufficient resources to effectuate our business plan. As
of February 6, 2012, we had approximately $51,247 in cash. As noted above, we
expect to incur a minimum of $40,000 in expenses during the next twelve months
of operations.
Between September and December 2011, we raised $40,000 in our initial public
offering.
Additionally, $15,000 will be needed for general working capital.
Accordingly, we will have to raise the funds to pay for these expenses. We may
have to borrow money from our officers, or issue debt or equity securities, or
seek to enter into a strategic arrangement with a third party. There can be no
assurance that additional capital will be available to us. We currently have no
agreements, arrangements or understandings with any person to obtain funds
through bank loans, lines of credit or any other sources. Unless we are able to
make arrangements to raise additional funds, our inability to raise funds will
have a severe negative impact on our ability to remain a viable company.
Going Concern Consideration
Our registered independent auditors included an explanatory paragraph in their
report on the accompanying financial statements regarding concerns about our
ability to continue as a going concern. Our financial statements contain
additional note disclosures describing the circumstances that lead to this
disclosure by our registered independent auditors.
Off-Balance Sheet Arrangements
We have no off-balance sheet arrangements.
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