Our administrative offices are located at 13601 Preston Road, Suite 317 East Tower, Dallas Texas 75240. We plan to use these offices until we require larger space.
Unique Underwriters, Inc. is a national Independent Marketing Organization that focuses exclusively on the sale of mortgage protection insurance policies, final expense insurance policies and life insurance policies. The Company provides sales and marketing assistance for its agents by utilizing direct-mail lead programs, insurance sales training and agency-building opportunities. The Company rents quality leads to its agents that allow the agent to generate sales of mortgage protection insurance policies, final expense insurance policies and life insurance policies. UUI generates revenue from three (3) sources: commissions from insurance carriers as a result of policies sold by our network of independent agents, renting leads to our network of independent agents, and the sales of annual membership packages to our agents that provide various levels of access to leads, training, personalized website, mentoring, customer support, company events and conventions.
(2) 	Newly designed web site to further aid our agents and streamline the order process for those individuals who submit inquiries through the site; and
3) 	Kramer Mailings (“Kramer”) continues to show a very high rate of return on leads which equates to more leads coming in for our agents to pursue, which in turn meant more lead revenue and ultimately more insurance policies being sold, which means even more revenue for the Company.
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 had revenue of $ 1,524,576 for the current fiscal year ended June 30, 2013, of which $811,136 was from commissions due to sales of insurance products, including mortgage life insurance and funeral expense insurance, and $713,440 from the sales of leads during the current fiscal year ended June 30, 2013.
Cost of sales includes the costs directly attributable to revenue recognition, such as marketing and leads generation costs, leads purchased costs, and payments to agents, which was $151,864, $173,949, and $323,348 for the current fiscal year ended June 30, 2013.
Comparatively, the cost of sales was $1,183,810, or 47% of revenues, for the year ended June 30, 2012, including Marketing/Leads Generation of $408,854, Leads Purchased Cost of $ 188,623 and agent expenses of $586,333 for the year ended June 30, 2012.
We had operating expenses of $914,255 during the current fiscal year ended June 30, 2013, compared to operating expenses of $1,933,593 during the fiscal year ended June 30, 2012. The decrease by $1,019,338 during the current fiscal year ended June 30, 2013 was due primarily to the decrease in consulting fees, contract labor, payroll and related taxes, stock issued for services rendered and other general and administrative expenses by $81,401, $113,553, $336,732, $345,000 and $138,715, respectively.
Net cash used in operating activities was $50,682 during the current fiscal year ended June 30, 2013. Negative cash flow from operation during the current fiscal year ended June 30, 2013 was due to the net loss of $48,715, the increase in accounts receivable by $1,780, the increase in rent deposit by 4,578, plus the decrease in accounts payable in amount of $31,987, offset by the increase in accrued payroll taxes by $25,892.
Net cash used in investing activities was $3,371 for the fiscal year ended June 30, 2013, due primarily to the purchase of furniture. Comparatively, we had no cash flow from investing activities during the fiscal year ended June 30, 2012.
No revenue is recognized prior to receipt of the commission check.
The lead sales revenue is recognized when one of our agents submits an order to rent leads and simultaneously their credit card is processed and the leads are distributed to them. The Company recognizes revenue when the agent submits an order to rent the leads for 30 days. After thirty days the leads become available for rental to another agent. Leads may be rented multiple times at decreasing rates due to the lead’s age and number of times it has been rented.
Membership revenue recognition occurs when an agent registers for one of the Company’s websites online and submits their payment information; the agent must give 30 days notice of request to cancel their membership. The Company recognizes revenue related to our various membership plans as income on a straight-line basis over the length of membership period.
We had cash of $10,586 on hand as of June 30, 2013, and the accumulated deficit as of June 30, 2013 was $11,357,862. The Company’s current cash on hand is not sufficient to meet our working capital requirements for the next twelve month period. Completion of our plan of operations is subject to attaining adequate revenue. We cannot assure investors that adequate revenues will be generated. Even without adequate revenues within the next twelve months, we still anticipate being able to continue with our present activities, but we may require financing to achieve operation and growth goals and to meet our working capital requirements. If we are able to conduct an equity offering, there will be dilution to the current stockholders of the Company and to the investors that acquire shares in the offering; and if we are able to conduct a debt offering, we will likely be subject to various covenants on our business operations and may be required to make payments during the term of the securities.
Management’s plans with regard to these matters encompass the following actions: 1) obtain funding from new investors to alleviate the Company’s working deficiency, and 2) implement a plan to generate sales. The Company’s continued existence is dependent upon its ability to resolve it liquidity problems and increase profitability in its current business operations. However, the outcome of management’s plans cannot be ascertained with any degree of certainty. The accompanying financial statements do not include any adjustments that might result from the outcome of these risks and uncertainties.
We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.
The Report of Independent Registered Public Accounting Firm issued by Bongiovanni & Associates, CPAs for the audited financial statements for current fiscal year ended June 30, 2013 is included herein immediately preceding the audited financial statements.