Risk Factors Dashboard
Once a year, publicly traded companies issue a comprehensive report of their business, called a 10-K. A component mandated in the 10-K is the ‘Risk Factors’ section, where companies disclose any major potential risks that they may face. This dashboard highlights all major changes and additions in new 10K reports, allowing investors to quickly identify new potential risks and opportunities.
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Risk Factors - UNXP
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An investment in our common stock involves a high degree of risk. You should carefully consider the risks described below and the other information in this prospectus before investing in our common stock. If any of the following risks occur, our business, operating results and financial condition could be seriously harmed. Currently, shares of our common stock are publicly traded. The trading price of our common stock could decline due to any of these risks, and you may lose all or part of your investment.
Risks Related to Our Financial Condition and Business Model
We are an emerging growth company with limited historical performance to base an investment decision upon, and we may never become profitable.
We were formed on June 23, 2017. From July 1, 2023, to June 30, 2024, we have had revenues of $240,717. Cost of goods sold totaled $59,550 for a gross profit of $181,167 for the year ended June 30, 2024. Our operating expenses were $2,662,325 resulting in a net loss of $2,481,158 for the year ended June 30, 2024. To be successful and implement our planned activities we will likely need additional financing which we may not be able to obtain or obtain on terms that are acceptable to us.
Accordingly, before investing in our common stock, you should consider the challenges, expenses and difficulties that we will face as an early-stage logistic company, and whether we will ever become profitable.
Risks associated with operating in a high-competition industry
We face substantial competition in the industry. Due to our small size, it can be assumed that many of our competitors have significantly greater financial, technical, marketing and other competitive resources. These competitors already have a fleet of vehicles for processing shipments. Accordingly, these competitors may have already begun to establish brand-recognition with consumers. We will attempt to compete against these competitors by developing features that exceed the features offered by competitors. However, we cannot assure you that our shipment services will outperform competing products or those competitors will not develop new products that exceed what we provide. In addition, we may face competition based on price. If our competitors lower the prices on their services, then it may not be possible for us to market our services at prices that are economically viable.
As the small logistics company, we will evaluate whether or not we should buy and operate our own vans where the transportation expenses highly dependent on fuel prices, driver’s salary, maintenance, dispatch cost, insurance cost and others, therefore we can’t exactly predict the final expenses when we receive the order. There is a risk that our final expenses will be higher than other logistic companies and our customers can discontinue working with us. There is a risk that our final expenses will be higher than others logistic companies and our customers can discontinue work with us. As a result, we have to be flexible and keep reasonable prices for our customers. Accordingly, because our revenue source is limited to those fees, we may be unsuccessful in generating sufficient revenue to compete in our business or to become profitable.
Risk relating the possibility of not achieving expected revenue
If we are unable to generate sufficient revenues for our operations, we will need financing, which we may be unable to obtain or the terms with which the financing is available are not acceptable to us; should we fail to obtain sufficient financing, our potential revenues will be negatively impacted.
For the year ended June 30, 2024, our revenue totaled $240,717. Because we have small revenues, our future revenues are unpredictable. Operating as a public reporting company may incur costs between $40,000 - $70,000 annually. As of June 30, 2024, we only had $15,602 in cash. As of June 30, 2023, we had only $609 in cash. If we fail to generate sufficient revenues to meet our monthly operating costs and can’t get alternative sources of income, then we will not be able to continue our business. We intend to raise additional funds from an offering of our stock in the future; however, this offering may never occur, or if it occurs, we may be unable to raise the required funding.
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Our revenues from operations are likely to be insufficient to meet our projected expenses in the short term; therefore, we will need to raise additional funds, which may not be available to us on favorable terms, if at all, thereby potentially disrupting the growth of our business and our ability to generate revenues.
We expect that our revenues from operations will be insufficient to meet our projected expenses, unless we are able to increase our revenues through other sources, such as entering into a strategic alliance with a significant television broadcaster or sports or entertainment enterprise or exploiting our digital rights. Unless we can successfully increase our revenues through these other sources (in excess of the costs we incur to generate these revenues), we will likely be required to raise additional capital through equity or debt financing in the future. Such capital may not be available, or, if it is available, may not be available on terms that are acceptable to us. A future financing may be substantially dilutive to our existing stockholders and could result in significant financial and operating covenants that would negatively impact our business. If we are unable to raise sufficient additional capital on acceptable terms, we will likely have a cash shortage which would disrupt our operations, have a material adverse effect on our financial condition or business prospects and could result in insolvency.
Risk relating when revenue comes from the several groups of customers
During the year ended June 30, 2024, we provided dispatch services to a limited number of customers. If we are unable to expand our customer base, our revenues and results of operations will be negatively impacted.
Our business is difficult to evaluate because it represents a new business model for live fighting events. The Mixed Martial Arts market may not develop as we anticipate, and we may not successfully execute our business strategy.
Our MMA business model focuses on individuals fighting in live events that will generate ticket revenue and related merchandise revenue along with broadcast rights. We have a limited operating history upon which you can evaluate our business. Although we successfully operated a similarly focused company in Europe, there can be no assurances or guarantees that this form of entertainment will be successful in the United States. The MMA industry is also rapidly growing and evolving and may not develop in a way that is advantageous for our business model. You must consider the challenges, risks and difficulties frequently encountered by early-stage companies using new and unproven business models in new and rapidly evolving markets. Some of these challenges relate to our ability to:
Our business strategy may not successfully address these and the other challenges, risks and uncertainties that we face, which could adversely affect our overall success and delay or prevent us from achieving profitability.
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Our limited operating history makes forecasting our revenues and expenses difficult, and we may be unable to adjust our spending in a timely manner to compensate for unexpected revenue shortfalls.
As a result of our limited operating history, it is difficult to accurately forecast our future revenues. Current and future expense levels are based on our operating plans and estimates of future revenues. Revenues and operating results are difficult to forecast because they generally depend on our ability to promote events and the growth in popularity of our events. As a result, we may be unable to adjust our spending in a timely manner to compensate for any unexpected revenue shortfall, which would result in further substantial losses.
Our failure to develop creative and entertaining programs and events would likely lead to a decline in the popularity of our brand of entertainment.
The creation, marketing and distribution of our live and televised entertainment are at the core of our future business and are critical to our ability to generate revenues across our media platforms and product outlets. Our failure to create popular live events and televised programming would likely lead to a decline in our television ratings and attendance at our live events, which would likely harm our operating results.