Item 1. Business.
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.
Market
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.