MAJOR LEAGUE FOOTBALL INC - Annual Report: 2012 (Form 10-K)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_____________________

FORM 10-K

For the fiscal year ended April 30, 2012

OR

Commission File Number 000-51132

Universal Capital Management, Inc.

(Exact name of registrant as specified in its charter)

Indicate by check mark if the Registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.   Yes  ¨    No  x

Indicate by check mark if the Registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act.    Yes      No  x

Indicate by check mark whether the registrant (1) has filed all reports to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days.                  Yes  ¨.    No ý.

Cover Page (continued)

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ý.    No  ¨.

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of the registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.                  ý

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large Accelerated Filer ¨    Accelerated Filer ¨    Non-Accelerated filer ý    Smaller reporting company ¨ 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act of 1934).    Yes ¨    No  ý

As of the last business day of the registrant’s most recently completed second fiscal quarter, the aggregate market value of the voting stock held by non-affiliates of the registrant was approximately $348,743.  Such aggregate market value was computed by reference to the closing price of $0.09 per share for the registrant’s common stock on the OTC on that date.  For purposes of making this calculation only, the registrant has defined affiliates as including all directors, executive officers and beneficial owners of more than five percent of the common stock of the Company.

The number of shares of the registrant’s common stock outstanding as of July 30, 2012 was 13,287,426.

Universal Capital Management, Inc. (the “Company”) is filing this Annual Report on Form 10-K for the year ended April 30, 2012 with the Securities and Exchange Commission without audit by the Company’s principal auditors.  As a result, the financial statements contained in this Annual Report may be subject to future adjustment.  The Company intends to file an amendment to this Annual Report upon the Company’s principal auditor’s audit of the Company’s financial statements and this Annual Report.

Table of Contents

PART I

Item 1.

Business.

Forward-Looking Statements

Some of the information presented in this report contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended.  These statements are included throughout the report, including the section titled “Risk Factors,” and relate to our business strategy, our prospects and our financial position.  These statements can be identified by the use of forward-looking terminology such as “believes,” “estimates,” “expects,” “intends,” “may,” “will,” “should” or “anticipates” or the negative or other variation of these or similar words, or by discussions of strategy or risks and uncertainties.  Specifically, forward-looking statements may include, among others, statements concerning:

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our expectations of future results of operations or financial condition;

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the timing, cost and expected impact on our market share and results of operations of our planned capital expenditures and;

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expectations of the continued availability of capital resources.

Although we believe that the expectations reflected in such forward-looking statements are reasonable, they are inherently subject to risks, uncertainties and assumptions about our Company, and accordingly, our forward-looking statements are qualified in their entirety by reference to the factors described below under the section titled “Risk Factors” and in the information incorporated by reference herein.

All subsequent written and oral forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the cautionary statements included in this document.  We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.  In light of these risks, uncertainties and assumptions, the forward-looking events discussed in this report may not occur.

Introduction

Universal Capital Management, Inc. (the “Company,” “we,” or “our”) is a publicly traded company.  Our company was originally engaged in the business of furnishing capital and making available managerial assistance to emerging companies with high growth potential that do not have ready access to capital through conventional financial channels. We referred to the companies that we invested in and provided management services for as “portfolio companies.”  We had two types of portfolio companies, portfolio holding company and active portfolio company.  

In exchange for our cash investment in a portfolio company, we received securities issued by the portfolio company, typically common stock or warrants to purchase common stock.  Upon providing management services to our portfolio company, we received securities issued by the portfolio company, typically common stock or warrants to purchase common stock.  

Our investment objective was to generate capital appreciation, primarily through investments in the equity securities, or warrants to purchase the equity securities, of our portfolio companies.  Our business model provided our stockholders with the ability to retain the liquidity of a publicly traded stock while sharing in the possible benefits, if any, as well as the risks, of investing in small, early-stage companies.

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Recently our business plan has evolved towards serving as a direct response management and marketing company that provides management, accounting and marketing services to our clients.  Our Company identifies, advises in development and markets consumer products. Our strategy employs three primary channels: Direct Response Television (Infomercials), Television Shopping Networks and Retail Outlets. We seek to assist and enable entrepreneurs to introduce products to the consumer market. Entrepreneurs can leverage our experience and valuable business contacts in functions such as product selection, marketing development, media buying and direct response television production. Inventors and entrepreneurs submit products or business concepts for our input and advice. We generate revenues from two primary sources (i) management of the entire business cycle of the consumer product and (ii) sales of consumer products, for which we receive a share of net profits of consumer products sold. We do not manufacture any of our products. As of the date of this filing we have generated limited revenues and do not rely on any principal products. While the Company has received nominal revenues from management fees generated from the sales of several products, none of these fees have generated material revenues. We currently do not sell any internally developed or Company owned products.

We operate as a direct response management and marketing organization. The direct response marketing industry is a large, fragmented and competitive industry. Direct response incorporates various marketing formats including direct mail, telemarketing, television, radio, newspaper, magazines and others. Typically direct response television programs incorporate an infomercial in either short form (30 seconds to 5 minutes) or long form (28.5 minutes) direct response programs. The formats discuss and demonstrate products and provide a toll-free number or website for viewers to purchase. We have been able to establish business relationships with key people/companies in the industry (such as QVC and Rite Aid) that allows us to act as a management team for entrepreneurs and inventors.  As a management team, we assume the day to day responsibilities of bringing a product to market from the manufacturing to the end sale to the consumer.  We believe the principal competitive factors include authenticity of information, unique content and distinctiveness and quality of product, brand recognition and price.  

Organization

Our Company was formed as a Delaware corporation on August 16, 2004.  Our offices are located at 2601 Annand Drive, Suite 16, Wilmington, DE 19808.  Our Internet website is located at: www.unicapman.com.

Our Company was formed in 2004 as a closed-end, non-diversified management investment company that had originally elected to be treated as a business development company under the Investment Company Act of 1940 (the “1940 Act”).  In early 2010, we launched our first product under our new venture into the direct response.  Upon the launch of this new venture, we subsequently ceased all of our operations as a business development company late in 2010, with the last of our management contracts expiring in December 2010.

On November 1, 2011, our Company filed Form N-54C notification of withdrawal of election to be regulated as a BDC. The withdrawal was effective upon receipt of the Form N-54C notification by the SEC, and our Company is no longer subject to regulation as a BDC. We have no intention to invest in securities or meet the definition of an investment company, as described in Section 3 of the 1940 Act. Our Company will be managed so it will not be deemed to be an investment company as defined in the 1940 Act. Our company will maintain its registration under the 1934 Act and we will continue to be obligated to file regular reports as required thereunder.

Since we made our election to file Form N-54C notification of withdrawal of election to be regulated as a BDC on November 1, 2011, this Annual Report on Form 10-K for the period ended April 30, 2012 reflects our operations during the first yearly period that we are not required to be regulated as a BDC.

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Management Services

Since early 2010, Our Company has provided management services to Innovation Industries. Innovation Industries (“Innovation”) is headquartered in Chester, Pennsylvania. The company’s Founder and President, William Wilkinson, is the largest inventor of fitness/exercise equipment and holds over 200 domestic and foreign patents. Innovation has an impressive history of developing and marketing exceptional consumer products and is a leader in fitness and exercise equipment products.

Mr. Wilkinson is the inventor of Step aerobics and co-founder of Step Reebok, which started the modern fitness movement. He was also the lead developer of products for NordicTrack and invented Total Body/dual action exercise machines popularized in the early 90s. In addition, he co-developed, with National Media of Philadelphia, PA, the Bruce Jenner line of fitness equipment which included the PowerWalk Plus treadmill. Will’s latest blockbusters, Twist and Tone TM and the GetAGrip®, are  first-to-market game changers that will redefine how we improve strength in hands, wrists, and forearms with virtually no competition in today’s marketplace.

The Twist and ToneTM was launched in July 2010 through an online marketing campaign and infomercials. The Twist and Tone TM was re-worked and re-tested during the first part of 2011 and was then re-launched in the fall of 2011.The Twist and Tone has reached a higher level of success when the product was advertised in the TV channel QVC and also sold in several Rite Aid stores countrywide.

In the fall 2011, a medical kit that includes the GetAGripPro® was introduced to the medical society as a therapeutic and rehabilitation tool for therapists and their clients. The medical kit is currently being advertised directly to hospitals and other medical centers.  

Competition

Direct Response

We face significant competition within each merchandise category. The markets for our merchandise are highly competitive, and the recent growth in these markets has encouraged the entry of many new competitors as well as increased competition from established companies. There are no significant barriers to entry in the direct marketing industry. Our competitors include large and small retailers, other direct marketing companies, including some with direct response television programs. Furthermore, established brick-and-mortar retail competitors have recently made efforts to sell products through direct response marketing methods. Many of these competitors are larger and have significantly greater financial, marketing and other resources. Increased direct response marketing programs may adversely affect response rates to our direct response television marketing efforts, which would directly affect margins. Our failure to compete successfully would materially and adversely affect our financial condition and results of operations.

Employees and Management Fees

Our Company is internally managed and, although it does not pay fees to an advisor, it pays salaries to officers and employees.  At such time, if ever, as our Company is externally managed, it shall comply with the requirements of Section 15 of the 1940 Act, including the requirement for stockholder approval of advisory fees.  As of April 30, 2012 our Company employed two full-time employees.

Determination of Net Asset Value

We determine the net asset value per share of our common stock at the end of each fiscal quarter and on such other dates as is necessary.  The net asset value per share of our common stock is equal to the value of our Company’s assets minus its liabilities divided by the total number of shares of common stock outstanding.

The net asset value and net asset value per share of common stock of our Company at the end of each fiscal quarter is as follows:

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At April 30, 2012, approximately all of our Company’s investments were recorded at fair value.

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Taxation

Our Company elected not to be taxed as a regulated investment company under subchapter M of the Internal Revenue Code.  As such, our Company is subject to corporate level income taxation on its income.  Taxable income generally differs from net income for financial reporting purposes due to temporary and permanent differences in the recognition of income and expenses, and generally excludes net unrealized appreciation or depreciation, as gains or losses are not included in taxable income until they are realized.  Taxable income includes non-cash income, such as changes in accrued and reinvested interest and dividends, and the amortization of discounts and fees.  Non-cash taxable income is reduced by non-cash expenses, such as realized losses and depreciation and amortization expense.

Item 1A.

Risk Factors

Investing in our common stock involves significant risks relating to our business and investment objective. You should carefully consider the risks and uncertainties described below before you purchase any of our common stock. These risks and uncertainties are not the only ones we face. Unknown additional risks and uncertainties, or ones that we currently consider immaterial, may also impair our business. If any of these risks or uncertainties materializes, our business, financial condition or results of operations could be materially adversely affected. In this event, the trading price of our common stock could decline, and you could lose all or part of your investment.

Risks Related to Our Company.

Our cash expenses are large relative to our cash resources and cash flow.  

As of April 30, 2012, we had cash resources of $9,435.  In the year ended April 30, 2012 we had revenues of $160,100 comprised of $344,632 of which $184,531 was accounts payable write-offs. Additionally, we have been required either to sell some of our investments in stocks to raise the cash necessary to pay ongoing expenses, pay outstanding loans and to make new investments. This practice is likely to continue through the fiscal year ending April 30, 2013 and could lead to continuing dilution in the interest of existing Company stockholders. Moreover, we cannot assure you the launch of any products will be successful and provide the necessary revenues to sustain the business.

There is generally no public market for the equity securities that we continue to hold.

We value all of the private equity securities in our portfolio at fair value as determined in good faith by our Board of Directors pursuant to valuation procedures established by the Board of Directors. As a result, determining fair value requires that judgment be applied to the specific facts and circumstances of each portfolio investment pursuant to specified valuation principles and processes. We value each individual investment on a quarterly basis and record unrealized depreciation for an investment that we believe has become impaired. Conversely, we must record unrealized appreciation if we believe that our securities have appreciated in value. Our valuations, although stated as a precise number, are necessarily within a range of values that vary depending on the significance attributed to the various factors being considered.

We use the Black-Scholes option pricing model to determine the fair value of warrants held in our portfolio. Option pricing models, including the Black-Scholes model, require the use of subjective input assumptions, including expected volatility, expected life, expected dividend rate, and expected risk-free rate of return. In the Black-Scholes model, variations in the expected volatility or expected term assumptions have a significant impact on fair value. Because the securities underlying the warrants in our portfolio are not publicly traded, many of the required input assumptions are more difficult to estimate than they would be if a public market for the underlying securities existed.

Without a readily ascertainable market value and because of the inherent uncertainty of valuation, the fair value that we assign to our investments may differ from the values that would have been used had an efficient market existed for the investments, and the difference could be material. Any changes in fair

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value are recorded in our consolidated statements of operations as a change in the "Net (decrease) increase in unrealized appreciation on investments."

We expect to continue to experience material headwinds in our retail penetration venture.

We are subject to the risks arising from adverse changes in general economic market conditions or any failure of the U.S. economy to recover from its recent recession. The U.S. economy remains extremely sluggish as it seeks to recover from a severe recession. The U.S. economy continues to suffer from market volatility, difficulties in the financial services sector, tight credit markets, softness in the housing markets, concerns of inflation, reduced corporate profits and capital spending, significant job losses, reduced consumer spending, and continuing economic uncertainties. The uncertainty about future economic conditions could negatively impact our current and prospective customers, including those in the direct response markets, adversely impact our expenses and ability to obtain financing of our operations, cause delays or other problems with key suppliers and increase the risk of counterparty failures. We cannot predict the timing, strength or duration of this severe global economic downturn or subsequent recovery. Consumer spending in the United States has been, and is expected to continue to be, negatively affected by these economic trends which, in turn, will negatively impact our results of operations. Furthermore, the uncertainly about future economic conditions could negatively affect our ability to obtain financing, which we will require to fund our operations in the event we do not increase our revenues.

The value of our investments is subject to high volatility.

Our company possesses shares of stock which are not diverse, and therefore may be more vulnerable to events affecting a single sector or industry and therefore our investments are subject to greater volatility. In addition, the majority of the securities are under a restriction period of 6 months. At April 30, 2012, approximately 42.92% of the Company's asset value consists of restricted stock and warrants that may not have a readily available market in the case our Company needed liquid assets to pay for its ongoing expenses.

Our operations are subject to the general risks of the direct response television industry including, but not limited to product liability claims, which could exceed our insurance coverage.

Our operations could be impacted by both genuine and fictitious claims regarding products we market. Although primarily all of the consumer products we market are not our property, we could potentially suffer losses from a significant product liability judgment against it. A significant product liability judgment could also result in a loss of consumer confidence in our products and furthermore an actual or perceived loss of value of our brand, materially impacting consumer demand. Although Innovation Industries carries a limited amount of product liability insurance, the amount of liability from product liability claims may exceed the amount of any insurance proceeds received by Innovation Industries.

Our business is subject to a variety of laws, rules and regulations that could subject us to claims or other harm to our business.

Government regulation of direct response, Internet and e-commerce is evolving and unfavorable changes could substantially harm our business and results of operations.  We are subject to a variety of laws, including the Mail or Telephone Order Merchandise Rule and related regulations of the Federal Trade Commission. These regulations prohibit unfair methods of competition and unfair or deceptive acts or practices in connection with mail and telephone order sales and require sellers of mail and telephone order merchandise to conform to certain rules of conduct with respect to shipping dates and shipping delays. We are also subject to regulations of the U.S. Postal Service and various state and local consumer protection agencies relating to matters such as advertising, order solicitation, shipment deadlines and customer refunds and returns. In addition, imported merchandise is subject to import and customs duties and, in some cases, import quotas.  The failure to comply with any of these laws, rules or regulations may subject us to consumer claims or result in delays in marketing products or changes in product marketing, which may reduce our revenues, increase our expenses and adversely affect our profitability.

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We operate in a heavily regulated environment, and changes to, or non-compliance with, regulations and laws could harm our business.

Securities and tax laws and regulations governing our activities may change in ways adverse to our and our shareholders’ interests, and interpretations of these laws and regulations may change with unpredictable consequences. Any change in the laws or regulations that govern our business could have an adverse impact on us or on our operations. Changing laws, regulations and standards relating to corporate governance, valuation and public disclosure, including the Sarbanes-Oxley Act of 2002, new SEC regulations, and new federal accounting standards, are creating additional expense and uncertainty for publicly held companies in general. These new or changed laws, regulations and standards are subject to varying interpretations in many cases because of their lack of specificity, and as a result, their application in practice may evolve over time, which may well result in continuing uncertainty regarding compliance matters and higher costs necessitated by ongoing revisions to disclosure and governance practices.   

Our efforts to comply with evolving laws, regulations and standards have and will continue to result in increased general and administrative expenses and a diversion of management time and attention from revenue-generating activities to compliance activities. Further, if our efforts to comply with new or changed laws, regulations and standards differ from the activities intended by regulatory or governing bodies, our reputation may be harmed. Also, as business and financial practices continue to evolve, they may render the regulations under which we operate less appropriate and more burdensome than they were when originally imposed. This increased regulatory burden is causing us to incur significant additional expenses and is time consuming for our management, which could have a material adverse effect on our financial performance.

We rely upon trademark, copyright and trade secret laws to protect our proprietary rights and those of our clients, which may not provide adequate protection.

Our success and ability to compete depends to a significant degree upon the protection of intellectual property rights, including without limitation our trademarks, trade names and trade secrets and those of our client.  We rely on trademark, copyright and trade secret laws, each of which affords only limited protection. To date we have not received any trademark protection. Our inability to protect intellectual property rights could seriously harm business, operating results and financial condition.

Litigation could become necessary in the future to enforce intellectual property rights.

Any litigation could be time consuming and expensive to prosecute or resolve, result in substantial diversion of management attention and resources, and materially harm our business, financial condition and results of operations.

From time to time, we may encounter disputes over rights and obligations concerning intellectual property. Such claims may be with or without merit. Any litigation to defend against claims of infringement or invalidity could result in substantial costs and diversion of resources. Furthermore, a party making such a claim could secure a judgment awarding substantial damages. A judgment could also include an injunction or other court order that could prevent us from selling products. Our business, operating results and financial condition would be harmed if any of these events occurred.

We could incur substantial costs in our defense against infringement claims. In the event of a claim of infringement, we might be required to obtain one or more licenses from third parties. We might be unable to obtain necessary licenses from third parties at a reasonable cost, if at all. Defense of any lawsuit or failure to obtain any such required licenses could harm our business, operating results and financial condition.

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We are dependent upon our chief executive officer for future success.

Our future success to a significant extent depends on the continued service of Michael Queen, our chief executive and financial officer.  The departure of Mr. Queen could materially adversely affect our ability to implement our business strategy. We do not maintain for our benefit any key-man life insurance on Mr. Queen or any of our other officers or employees.

Failure to retain and attract qualified personnel could harm our business.

Our success depends on our ability to attract, train and retain qualified personnel. Competition for qualified personnel is intense and we may not be able to hire sufficient personnel to support the anticipated growth of our business. If we fail to attract and retain qualified personnel, our business will suffer. Additionally, companies whose employees accept positions with competitors often claim that such competitors have engaged in unfair hiring practices. We may receive such claims in the future as we seek to hire qualified employees. We could incur substantial costs in defending against any such claims.

We may have difficulty managing any future growth.

For the implementation of our business objectives, we may need to grow rapidly; brisk growth would lead to increased responsibility for both existing and new management personnel. In an effort to manage such growth, we must maintain and enhance our financial and accounting systems and controls, hire and integrate new personnel and manage expanded operations. Despite systems and controls, growth is expected to place a significant strain on our management systems and resources. We will need to continue to improve our operational, managerial and financial controls, reporting systems and procedures, and will need to continue to expand, train and manage our work force. Failure to manage our future growth would have a material adverse effect on the quality of our operations, ability to retain customers and key personnel and operating results and financial condition.

We may not be successful in finding or marketing new products.

Our business operations and financial performance depends on the ability to attract and market new products on a consistent basis. In the direct marketing industry, the average product life cycle varies from six months to four years, based on numerous factors, including competition, product features, distribution channels utilized, cost of goods sold and effectiveness of advertising. Less successful products have shorter life cycles. The majority of products are submitted by inventors. There can be no assurance that we will be successful in acquiring rights to quality products. We select new products based upon management’s expertise and limited market studies. As a result, we need to acquire the rights to quality products with sufficient margins and consumer appeal to justify the acquisition costs. There can be no assurance that chosen products will generate sufficient revenues to justify the acquisition and marketing costs.

Our financial performance is dependent on the products that we do not produce or manufacture.

Our business and results of operations are dependent on the success of products that we do not produce or manufacture. It is likely that the majority of the products we market may fail to generate sufficient revenues. Furthermore it is likely we will market more products which fail to generate significant revenues as opposed to products which generate significant revenues. Our sales and profitability will be adversely affected if we are unable to develop a sufficient number of successful products.

Our financial performance may be harmed if unfavorable economic conditions adversely affect consumer spending.

Our success depends to a significant extent upon a number of factors relating to discretionary consumer spending, including economic conditions affecting disposable consumer income such as employment, business conditions, taxation and interest rates. Other events that adversely affect the economy may diminish consumer spending. There can be no assurance that consumer spending will not be

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affected by adverse economic conditions, thereby adversely affecting our business, financial condition and results of operations.

We face competition from many other types of companies for customers.

We face significant competition within each merchandise category. The markets for our merchandise are highly competitive, and the recent growth in these markets has encouraged the entry of many new competitors as well as increased competition from established companies. There are no significant barriers to entry in the direct marketing industry. Our competitors include large and small retailers, other direct marketing companies, including some with direct response television programs. Furthermore, established brick-and-mortar retail competitors have recently made efforts to sell products through direct response marketing methods. Many of these competitors are larger and have significantly greater financial, marketing and other resources. Increased direct response marketing programs may adversely affect response rates to our direct response television marketing efforts, which would directly affect margins. Our failure to compete successfully would materially and adversely affect our financial condition and results of operations.

We may not be able to respond in a timely and cost effective manner to changes in consumer preferences.

Our merchandise is subject to changing consumer preferences. A shift in consumer preferences away from the merchandise we offer could have a material adverse effect on our financial condition and results of our operations. Our future success depends in part on our ability to anticipate and respond to changes in consumer preferences and there can be no assurance that we will respond in a timely or effective manner. Failure to anticipate and respond to changing consumer preferences could lead to, among other things, lower sales of products, significant markdowns or write-offs of inventory, increased merchandise returns and lower margins, which would have a material adverse effect on our financial condition and results of operations.

Our business would be harmed if manufactures and service provides are unable to deliver products or provide services in a timely and cost effective manner.

We do not have any long term contracts with manufacturers, supplies or other service providers. We do not produce or manufacture products we market. In addition, we utilize third party companies to fulfill consumer orders and provide telemarketing services. If manufacturers or suppliers are unable, either temporarily or permanently, to manufacture or deliver products or provide services in a timely and cost effective manner, it could have an adverse effect on our financial condition and results of operations.

Disruption in our ability to fulfill orders would harm our financial performance.

Our ability to provide effective customer service and efficiently fulfill orders for merchandise depends, to a large degree, on the efficient and uninterrupted operation of the manufacturing and related call centers, distribution centers, and management information systems run by third parties. Furthermore we are dependent on the timely performance of other third party shipping companies. Any material disruption or slowdown in manufacturing, order processing or fulfillment systems resulting from strikes or labor disputes, telephone down times, electrical outages, mechanical problems, human error or accidents, fire, natural disasters, adverse weather conditions or comparable events could cause delays in our ability to receive and fulfill orders and may cause orders to be lost or to be shipped or delivered late. As a result, these disruptions could adversely affect our financial condition or results of operations.

We may experience merchandise returns or warranty claims in excess of our expectations.

Actual merchandise returns and warranty claims may exceed allowances. Any significant increase in merchandise returns or warranty claims would adversely affect our financial condition and results of operations.

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Ineffective media purchases may inhibit our ability to sell products, build customer awareness and brand loyalty.

We work with companies who purchase direct response television programming on cable and broadcast networks, network affiliates and local stations. Significant increases in the cost of media time or significant decreases in the available access to media could adversely affect our financial condition and results of operations.

Market prices of our common stock will continue to be volatile.

We expect that the market price of our common stock price will continue to be volatile. The price of our common stock may be higher or lower than the price you pay for your shares, depending on many factors, some of which are beyond our control and may not be directly related to our operating performance. These factors include the following:

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stock market and capital markets conditions;

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internal developments in our Company with respect to our personnel, financial condition and compliance with all applicable regulations;

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capacity to find, manage and retain new clients for management services;

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general economic conditions and trends; and/or departures of key personnel.

We will not have control over many of these factors, but expect that our stock price may be influenced by them. As a result, our stock price may be volatile, and you may lose all or part of your investment.

Our quarterly results fluctuate and are not indicative of future quarterly performance.

Our quarterly operating results fluctuate as a result of a number of factors. These factors include, among others, variations in and the timing of the recognition of realized and unrealized gains or losses, the degree of success of our investments, management contract issuance and renewals and capital markets conditions. As a result of these factors, results for any one quarter should not be relied upon as being indicative of performance in future quarters.

Risks Related To The Illiquidity Of Our Investments.

We hold investments in illiquid securities and may not be able to dispose of them when it is advantageous to do so.   

Most of our investments are equity or equity-linked securities acquired directly from small companies. These equity securities are generally subject to restrictions on resale or otherwise have no established trading market. The illiquidity of most of our portfolio of equity securities may adversely affect our ability to dispose of these securities at times when it may be advantageous for us to liquidate these investments. We may never be able to dispose of these securities. In addition, if we are required to liquidate all or a portion of our portfolio quickly, we may realize values significantly less than the values recorded for such investments. If we are unable to sell our assets at opportune times, we might suffer a loss and/or reduce a gain. Restrictions on resale and limited liquidity are both factors our Board of Directors will consider in determining fair value of our investments. Moreover, even investments in publicly-traded securities are likely to be relatively illiquid because the market for companies of the type in which we invest tend to be thin and usually cannot accommodate large volume trades.

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Risks Related To The Companies Under Our Management.

The companies managed by our Company may not successfully develop, manufacture or market their products.

The products offered by the companies managed by our Company are oftentimes new and in many cases unproven. Their potential products require significant and lengthy product development, manufacturing and marketing efforts. In addition, these companies may not be able to manufacture successfully or to market their products in order to achieve commercial success. Further, the products may never gain commercial acceptance. If our clients are not able to develop, manufacture or market successful products, they will be unable to generate product revenue or build sustainable or profitable businesses.

Our clients working with proprietary technology may be particularly susceptible to intellectual property litigation.

The ownership of intellectual property of our clients may be subject to intellectual property disputes and litigation. Any litigation over the ownership of, or rights to, any of our client’s technologies or products could have a material adverse effect on those companies’ values.

Our revenues could be affected if the technologies utilized by our clients are found, or even rumored or feared, to cause health risks, or if legislation is passed that limits the commercialization of any of these technologies.

Debate regarding the production of materials that could cause harm to the environment or the health of individuals could raise concerns in the public’s perception of certain of our client companies, not all of which might be rational or scientifically based. Certain of our client’s product technologies may be the subject to health impact research. If health concerns about such technology were to arise, whether or not they had any basis in fact, our client companies might incur additional research, legal and regulatory expenses, and might have difficulty marketing their products. Government authorities could, for social or other purposes, prohibit or regulate the use of such technology. Legislation could be passed that could circumscribe the commercialization of any of these technologies.

Risks Related to Our Common Stock.

Rules related to low-priced equity securities may make it harder for you to sell our common stock.

The Securities and Exchange Commission has adopted rules that regulate broker-dealer practices in connection with transactions in “penny stocks.” Penny stocks are defined by law generally as equity securities with a price of less than $5.00 per share (other than securities registered on certain national securities exchanges or quoted on the Nasdaq system, provided that current price and volume information with respect to transactions in such securities is provided by the exchange or system). The penny stock rules place additional responsibilities on broker-dealers effecting transaction in such securities. These requirements may have the effect of reducing the level of trading activity in the secondary markets for a stock that is subject to the penny stock rules.

Our common stock trades on the OTC which may make it more difficult for you to sell your stock.

Our common stock trades over-the-counter under the symbol “UCMT,” and it has a limited trading market. Accordingly, we cannot assure you as to the liquidity of any markets that may be available for our common stock, your ability to sell your Company common stock, or the price at which you may be able to sell your Company common stock.

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Our Board of Directors may grant stock options to our employees pursuant to our Company's Equity Incentive Plan. When exercised, these options may have a dilutive effect on existing shareholders.

In accordance with our Company’s Equity Incentive Plan, our Board of Directors grants options from time to time to our employees. When options are exercised, net asset value per share will decrease if the net asset value per share at the time of exercise is higher than the exercise price. Alternatively, net asset value per share will increase if the net asset value per share at the time of exercise is lower than the exercise price. Therefore, existing shareholders will be diluted if the net asset value per share at the time of exercise is higher than the exercise price of the options. Even though issuance of shares pursuant to exercises of options increases our Company's capital, and regardless of whether such issuance results in increases or decreases in net asset value per share, such issuance results in existing shareholders owning a smaller percentage of the shares outstanding.

Item 1B.

Unresolved Staff Comments.

Not Applicable.

Item 2.

Properties.

Our Company leases on a month-to-month basis approximately 1,200 square feet of office space at 2601 Annand Drive, Suite 16, Wilmington, Delaware where we conduct our operations.  Monthly rent for the space is $1,500.

Item 3.

Legal Proceedings

The following is a brief description material pending legal proceedings, other than ordinary, routine litigation incidental to our business, to which our Company is a party.

MICCO World, Inc. Lawsuit

In July 2010, the Company filed a lawsuit against MICCO World, Inc. (formerly known as Constellation Group, Inc.) and its officers, Phil Lundquist, Steven Brisker and Tom Ridenour (collectively known as the “Defendants”).  This lawsuit was filed in the Superior Court of Delaware in New Castle County.  This lawsuit was filed in response to various activities by the Defendants that include misleading investors, making disparaging remarks about the Company, misrepresentation of capital structure, and misappropriation of funds. The Company sought judgment in the amount of $611,000 plus costs, legal fees, pre- and post-judgment interest, plus other amounts and relief to be determined. In March 2011, MICCO filed a motion to dismiss.  In June 2011, the courts denied this motion to dismiss. On June 25, 2012, the Company dismissed the suit against the defendants with prejudice.

Stradley Ronon Lawsuit

On May 9, 2009 the law firm of Stradley Ronon filed a lawsuit against the Company in the U.S. District Court for the District of Delaware for failure of the Company to pay legal fees owed in the amount of $166,129. On April 2, 2009, in order to avoid the cost of litigation, the Company agreed on entering into consent of Judgment against it in the amount of $166,129.

Item 4.

Mine Safety Disclosure

Not Applicable

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PART II

Item 5.

Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.

The Company’s common stock has been traded on the OTC Bulletin Board since June 15, 2006.  Through July 2012, the Company’s common stock was trading under the symbol “UCMT”.  

Market Information

The above quotations reflect inter-dealer prices, without mark-up, mark-down or commission, and may not represent actual transactions.

Holders

As of July 30, 2012, the Company had approximately 301 holders of record of its Common Stock.

Dividends

Our Company currently anticipates that it will retain all of its earnings to finance the operation and expansion of its business, and therefore does not intend to pay dividends on its Common Stock in the foreseeable future.  Since our inception, we have never declared or paid any cash dividends on its Common Stock.  Any determination to pay dividends in the future is at the discretion of our Company’s Board of Directors and will depend upon the Company’s financial condition, results of operations, capital requirements, limitations contained in loan agreements and such other factors as the Board of Directors deems relevant.

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Securities Authorized for Issuance under Equity Compensation Plans

Equity Compensation Plans as of April 30, 2012.

In May 8, 2006, our Company’s stockholders approved the 2006 Equity Incentive Plan for the benefit of our directors, officers, employees and consultants, and we have reserved 2,000,000 shares of our common stock for such persons pursuant to that plan.

Penny Stock Regulations and Restrictions on Marketability

The SEC has adopted rules that regulate broker-dealer practices in connection with transactions in penny stocks. Penny stocks are generally equity securities with a market price of less than $5.00, other than securities registered on certain national securities exchanges or quoted on the NASDAQ system, provided that current price and volume information with respect to transactions in such securities is provided by the exchange or system. The penny stock rules require a broker-dealer, prior to a transaction in a penny stock, to deliver a standardized risk disclosure document prepared by the SEC, that: (a) contains a description of the nature and level of risk in the market for penny stocks in both public offerings and secondary trading; (b) contains a description of the broker's or dealer's duties to the customer and of the rights and remedies available to the customer with respect to a violation of such duties or other requirements of the securities laws; (c) contains a brief, clear, narrative description of a dealer market, including bid and ask prices for penny stocks and the significance of the spread between the bid and ask price; (d) contains a toll-free telephone number for inquiries on disciplinary actions; (e) defines significant terms in the disclosure document or in the conduct of trading in penny stocks; and (f) contains such other information and is in such form, including language, type size and format, as the SEC shall require by rule or regulation.

The broker-dealer also must provide, prior to effecting any transaction in a penny stock, the customer with (a) bid and offer quotations for the penny stock; (b) the compensation of the broker-dealer and its salesperson in the transaction; (c) the number of shares to which such bid and ask prices apply, or other comparable information relating to the depth and liquidity of the market for such stock; and (d) a monthly account statement showing the market value of each penny stock held in the customer's account.

In addition, the penny stock rules require that prior to a transaction in a penny stock not otherwise exempt from those rules, the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser's written acknowledgment of the receipt of a risk disclosure statement, a written agreement as to transactions involving penny stocks, and a signed and dated copy of a written suitability statement.

These disclosure requirements may have the effect of reducing the trading activity for our common stock. Therefore, stockholders may have difficulty selling our securities.

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Recent Sales of Unregistered Securities

During the period covered by this report, our Company has sold the following securities without registering the securities under the Securities Act:

Securities issued for services

No underwriters were utilized and no commissions or fees were paid with respect to any of the above transactions. These persons were the only offerees in connection with these transactions. We relied on Section 4(2) and Rule 506 of Regulation D of the Securities Act since the transaction does not involve any public offering.

COMPARATIVE STOCK PERFORMANCE

The graph below compares the cumulative total return during the period from April 30, 2005 to April 30, 2012, for the Company’s common stock, the Company’s Peer Group and the Russell Microcap Index. This graph assumes the investment of $100 in the Company’s common stock, the Company’s Peer Group and the stock in the companies comprising the [index] on April 30, 2005 and the reinvestment of all dividends.  

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Item 6.

Selected Financial Information.

Reference is made to the Company’s financial statements included elsewhere in this Annual Report on Form 10-K.  The following selected information is taken from those financial statements:

Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Introduction

The following discussion contains forward-looking statements.  The words “anticipate,” “believe,” “expect,” “plan,” “intend,” “estimate,” “project,” “will,” “could,” “may” and similar expressions are intended to identify forward-looking statements.  Such statements reflect our Company’s current views with respect to future events and financial performance and involve risks and uncertainties.  Should one or more risks or uncertainties occur, or should underlying assumptions prove incorrect, actual results may vary materially and adversely from those anticipated, believed, expected, planned, intended, estimated, projected or otherwise indicated.  Readers should not place undue reliance on these forward-looking statements.

The following discussion is qualified by reference to, and should be read in conjunction with our Company’s financial statements and the notes thereto.

On February 18, 2005, our Company filed an election to become subject to the 1940 Act, such that it could commence conducting business as a business development company (“BDC”). The Company elected BDC status intending to primarily engage in the business of furnishing capital and making available managerial assistance to companies that do not have ready access to capital through conventional financial channels. Commensurate with those goals, the Company commenced its operations.

17

During 2010 our revenues began to decline and our cash position weakened. As a BDC, we were required to ensure that a majority of our directors are persons who are not “interested persons,” as that term is defined in section 56 of the 1940 Act. Since April 2010, we have not maintained a majority of directors who are not “interested persons”. During the quarterly period ending July 30, 2010 to the date hereof, we have been unable to pay our auditors to review our quarterly and annual reports that we file with the Securities and Exchange Commission (the “SEC”) pursuant to the Securities Exchange Act of 1934 (the “1934 Act”); in violation of both the 1934 Act and the 1940 Act. Consequently, for over twelve months, our Company has been non-compliant with certain of the rules and regulations governing the financial reporting items required of BDCs and reporting companies in general. Our Company's violations of the 1934 Act and the 1940 Act may cause our Company to incur certain liabilities, which our management cannot estimate as of this time. However, if these liabilities are incurred, they could have a significant impact on our Company's ability to continue as a going concern.

Our board conducted a review of our non-compliance issues and determined that the Company's significant compliance and remediation costs, in terms of both time and dollars, to continue to operate as a BDC have operated and will continue to operate as an encumbrance on the Company's limited resources. Additionally, another factor that the board considered was that since December 2010, we effectively ceased our operations as a business development company when the last of our management contracts expired and since that time, we have had no active portfolio companies in our portfolio. Since then, our Company’s business structure began to evolve due to economic factors and new opportunities and we now assist and enable entrepreneurs to introduce products to the consumer market.

Accordingly, after careful consideration of the 1940 Act requirements applicable to BDCs, an evaluation of the Company's ability to operate as a going concern in an investment company regulatory environment, the cost of 1940 Act compliance needs and a thorough assessment of potential alternative business models, our board determined that continuation as a BDC was not in the best interest of the Company and its stockholders.  On September 19, 2011, pursuant to a written consent, a majority of the voting power of our Company's outstanding common stock voted to approve the recommendation of our board that our Company withdraw its election to be registered as a BDC.

On November 1, 2011, our Company filed Form N-54C notification of withdrawal of election to be regulated as a BDC. The withdrawal was effective upon receipt of the Form N-54C notification by the SEC, and our Company is no longer subject to regulation as a BDC.

We have no intention to invest in securities or meet the definition of an investment company, as described in Section 3 of the 1940 Act. Our Company will be managed so it will not be deemed to be an investment company as defined in the 1940 Act. Our company will maintain its registration under the 1934 Act and we will continue to be obligated to file regular reports as required thereunder.

Our Company identifies, advises in development and markets consumer products. Our strategy employs three primary channels: Direct Response Television (Infomercials), Television Shopping Networks and Retail Outlets. We seek to assist and enable entrepreneurs to introduce products to the consumer market. Entrepreneurs can leverage our experience and valuable business contacts in functions such as product selection, marketing development, media buying and direct response television production. Inventors and entrepreneurs submit products or business concepts for our input and advice. We generate revenues from two primary sources (i) management of the entire business cycle of the consumer product and (ii) sales of consumer products, for which we receive a share of net profits of consumer products sold. We do not manufacture any of our products. As of the date of this Form 10-K, we have generated limited revenues and do not rely on any principal products. While the Company has received nominal revenues from management fees generated from the sales of several products, none of these fees have generated material revenues. We currently do not sell any internally developed or Company owned products.

Financial Condition

Our Company’s total assets, net assets, net asset value per share, unrealized appreciation or depreciation are set forth in the following table:

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The changes in total assets, net assets and net asset value per share for the year ended April 30, 2012 were primarily attributable to:

·

Vystar Corporation’s (“Vystar”) average valuation on restricted and unrestricted warrants decreased from $0.45 to $0.35 per share during the year ending April 30, 2012. A warrant to purchase 50,000 shares acquired on October 18, 2010 expired in April 2012. Our Company’s total investment in Vystar was $137,201 at April 30, 2012 compared to $290,185 at April 30, 2011.

·

Lightwave Logic, Inc. (“LWLG”), average valuation on restricted and unrestricted shares and warrants increased from $1.11 to $1.13 per share during the year ending April 30, 2012. A warrant to purchase 357,500 shares was exercised in April 2012. Our total investment in LWLG at April 30, 2012 was $387,025 compared to $398,707 at April 30, 2011.

·

iVolution Medical average valuation on restricted and unrestricted warrants decreased from $0.25 to $0 per share during the year ending April 30, 2012. Our total investment in iVolution Medical at April 30, 2012 was $0 compared to $276,000 at April 30, 2011.

·

The decrease in cash of $7,131.

·

The decrease in accounts payable and accrued expenses of $164,897.

·

The decrease in advances from shareholders and notes payable of $135,684.

·

The decrease in net deferred tax asset of $164,000.

Results of Operations

Our financial statements have been prepared in conformity with the United States generally accepted accounting principles.  On this basis, the principal measure of a Company’s financial performance is the increase in net assets. Net assets comprise (i) income from operations, (ii) net realized gain or loss on investment, which is the difference between the proceeds received from dispositions of portfolio securities and their stated cost, and (iii) increase (decrease) in unrealized appreciation on investments.

Our Company expenses include salaries and wages (but officer salaries did not accrue until November 15, 2004 and then were contributed as capital during the year ended April 30, 2007), professional fees, insurance expense, interest expense and depreciation. General and administrative costs include rent, office, travel and entertainment and other overhead costs.

Year ended April 30, 2012 compared to the year ended April 30, 2011 and April 30, 2010

For the year ended April 30, 2012 we had revenue for services in the amount of $160,101 compared to $14,658 for the year ended April 30, 2011 and $54,230 for the year ended April 30, 2010.  100% of our revenue for management and accounting services was received in the form of cash for the year ended April 30, 2012, April 30, 2011 and April 30, 2010.

 Total operating expenses for the year ended April 30, 2012 were $459,797, the principal components of which were professional fees of $1,013,983, Salaries and Wages of $966,030, insurance expense of $61,913, interest expense of $51,332, bad debt expense of $150,838 and $58,769 of general and administrative expense. By comparison, total operating expenses for the year ended April 30, 2011 were

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$536,203, the principal components of which were professional fees of $103,322, of which $49,561 represents audit fees and approximately $37,389 of legal expense.  Additionally, principal components of operating expenses include $252,373 for payroll which includes $7,634 of share based compensation expense, $94,096 of insurance expense, $31,554 of interest expense and $53,058 of general and administrative expense.  By comparison, total operating expenses for the year ended April 30, 2010 were $846,861, the principal components of which were professional fees of $138,769, payroll expense of $388,995 ($5,088 was share based compensation expense), bad debt expense of $98,667, insurance expense of $104,133, and general and administrative expenses of $81,274.We realized a loss from operations before taxes and interest of $169,559 for the year ended April 30, 2012 compared to a loss of $521,545 for the year ended April 30, 2011 and a loss from operations before taxes and interest of $792,631 for the year ended April 30, 2010.

Our Company had net unrealized appreciation of $295,898 for the year ended April 30, 2012, compared to a net unrealized depreciation of $2,308,692 for the year ended April 30, 2011 and a net unrealized depreciation of $218,492 at year end April 30, 2010.

For the year ending April 30, 2012, we had a recognized loss on disposal and sale of several of our investments of $596,163.For the year ending April 30, 2011, we had a recognized loss on disposal and sale of several of our investments of $504,576. For the year ending April 30, 2010, we had a recognized loss on disposal and sale of several of our investments of $153,277, which consists mainly of $119,986 of a net loss from the sale of various former portfolio companies’ common stock and $33,000 of loss from the write off of three former portfolio company investments.

Liquidity and Capital Resources

From inception, our Company has relied upon the infusion of capital through capital share transactions or the disposition of portfolio securities to obtain liquidity.  We had $9,435 of cash at April 30, 2012.   Consequently, payment of operating expenses will have to come similarly from equity capital to be raised from investors, from the disposition of portfolio securities, from borrowed funds or from the success of our direct response products we are managing. There is no assurance that we will be successful in raising such additional equity capital or additional borrowings or if we can, that we can do so at a price that management believes to be appropriate. Recently, it was necessary for us to dispose of some of our current portfolio securities to meet our operational needs. In the future, we may be forced to continue to dispose of portfolio securities if we ever become short of cash. Any such dispositions may have to be made at inopportune times.

Critical Accounting Policies

Stock-Based Compensation

On May 1, 2006, the Company adopted ASC 718 formerly, Statement of Financial Accounting Standard of Financial Accounting Standard No. 123(R) (“SFAS 123(R)”), Share-Based Payment (as amended), using the modified prospective method as permitted under SFAS 123(R).  Under this transition method, compensation cost recognized in the first quarter of fiscal 2007 includes compensation cost for all share-based payments granted prior to but not yet vested as of April 30, 2006, based on the grant-date fair value estimated in accordance with the provisions of SFAS 123.  In accordance with the modified prospective method of adoption, the Company’s results of operations and financial position for the prior periods have not been restated.

Item 7A.

Quantitative and Qualitative Disclosures About Market Risk

Our Company’s business activities contain elements of risk.  Neither our investments nor an investment in us is intended to constitute a balanced investment program.

A substantial portion of our assets is comprised of private development stage or start-up companies. These private businesses tend to be thinly capitalized, unproven, small companies that lack

20

management depth and have not attained profitability or have no history of operations. Because of the speculative nature and the lack of a public market for these investments, there is significantly greater risk of loss than is the case with traditional investment securities. We expect that some of our investments will be a complete loss or will be unprofitable and that some will appear to be likely to become successful but never realize their potential. Even when our private equity investments become publicly traded, the market for the unseasoned publicly traded securities may be relatively illiquid.

Because there is typically no public market for our interests in the small privately held companies in which we invest, the valuation of the equity interests in that portion of our portfolio is determined in good faith by or under the direction of our Board of Directors, in accordance with our valuation procedures. In the absence of a readily ascertainable market value, the determined value of our portfolio of equity interests may differ significantly from the values that would be placed on the portfolio if a ready market for the equity interests existed. Any changes in valuation are recorded in our consolidated statements of operations as “Net increase (decrease) in unrealized appreciation on investments.” Changes in valuation of any of our investments in privately held companies from one period to another may be volatile.

Item 8.

Financial Statements and Supplementary Data.

See attached Appendix A.

Item 9.  

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

Not Applicable.

Item 9A.  

Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

As of the end of the period covered by this report, our Company evaluated the effectiveness and design and operation of its disclosure controls and procedures. Our Company’s disclosure controls and procedures are the controls and other procedures that we designed to ensure that our Company records, processes, summarizes, and reports in a timely manner the information that it must disclose in reports that our Company files with or submits to the Securities and Exchange Commission. Our principal executive officer and principal financial officer reviewed and participated in this evaluation. Based on this evaluation, our Company made the determination that its disclosure controls and procedures were effective.

Management's Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rules 13a-15(f) and 15d-15(f). Under the supervision and with the participation of management, including our principal executive officer and principal financial officer, we conducted an evaluation of the effectiveness of our internal controls over financial reporting based on the framework in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission ("COSO"). Based on this evaluation, management has concluded that our internal control over financial reporting was effective as of April 30, 2012.

The Company's internal control over financial reporting includes policies and procedures that (1) pertain to maintenance of records that, in reasonable detail, accurately and fairly reflect transactions and dispositions of the assets of the Company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company's assets that could have a material effect on the financial statements.

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Our management, including our principal executive officer and principal financial officer, does not expect that our disclosure controls or our internal control over financial reporting will prevent or detect all errors and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system's objectives will be met. Internal control over financial reporting is a process that involves human diligence and compliance and is subject to lapses in judgment and breakdowns resulting from human failures. In addition, the design of any system of controls is based in part on certain assumptions about the likelihood of future events, and controls may become inadequate if conditions change. There can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.

This annual report does not include an attestation report of the Company’s independent registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by the Company’s registered public accounting firm pursuant to rules of the Securities and Exchange Commission that permit the Company to provide only management’s attestation in this annual report.

Changes in Company Internal Controls

No change in our Company’s internal control over financial reporting occurred during our fourth fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Item 9B.

Other Information.

None

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PART III

Item 10.

Directors, Executive Officers and Corporate Governance.

(a)  Identity of directors, executive officers and significant employees.

(b) Business experience of directors, executive officers, and significant employees.

Michael D. Queen. Mr. Queen has been the Chief Executive Officer and director of the Company since 2004 and Principal Financial Officer of the Company since December 2011. He served as the President of the Company from 2004 through February 2009.  Since founding UCM, Mr. Queen has worked with eighteen startup companies.  He assisted these companies with their funding and was responsible for helping seven of those companies enter the public marketplace.  Mr. Queen is considered an expert in the microcap arena with extensive knowledge of how these markets operate and has been extensively involved in the start-up businesses and initial capitalization plans. Prior to UCM, Mr. Queen was the President, CEO and a director at Pennexx Foods, Inc., a publicly traded company.  From 1994 to 1998, Mr. Queen was the President of Ocean King Enterprises, a start-up specialty food manufacturer.  From 1978 to 1999, Mr. Queen was an executive in the supermarket industry serving the greater New York, New Jersey and Delaware region. Mr. Queen’s qualifications to serve on our board of directors include his knowledge of our company and his years of management, marketing and financial experience.

Each Director of the Company holds such position until the next annual meeting of shareholders and until his successor is duly elected and qualified.  The officers hold office until the first meeting of the board of directors following the annual meeting of shareholders and until their successors are chosen and qualified, subject to early removal by the board of directors.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Securities Exchange Act of 1934 requires that our executive officers and directors, and persons who own more than ten percent of a registered class of our equity securities, file reports of ownership and changes in ownership with the SEC.  Executive officers, directors and greater-than-ten percent stockholders are required by SEC regulations to furnish us with all Section 16(a) forms they file.  To the best of our knowledge, based solely upon a review of Forms 3 and 4 and amendments thereto furnished to our Company during its most recent fiscal year and Forms 5 and amendments thereto furnished to our Company with respect to its most recent fiscal year, and any written representation referred to in paragraph (b)(1) of Item 405 of Regulation S-K, all of our executive officers, directors and greater-than-ten percent stockholders complied with all Section 16(a) filing requirements other than Mr. Michael Queen who did not timely file a Form 4 to report one transaction.

Audit Committee

Our Company does not have a separately designated standing audit committee in place; our Company’s entire board of directors has served, and currently serves, in that capacity. This is due to the small number of executive officers involved with the Company and the fact that the Company operates with few employees. Our board of directors will continue to evaluate, from time to time, whether a separately designated standing audit committee should be put in place. We do not have an audit committee financial expert as that term is defined by the rules promulgated by the Securities and Exchange Commission.  We currently have limited working capital and limited revenues.  Management does not

23

believe that it would be in our best interests at this time to retain independent directors to sit on an audit committee.  If we are able to generate sufficient revenues in the future, then we will likely seek out and retain independent directors and form an audit, compensation committee and other applicable committees.

Nominating Committee

Our Board of Directors does not have a nominating committee. This is due to the small number of executive officers involved with the Company, and the fact that the Company operates with few employees.  Instead of having such a committee, our Board of Directors historically has searched for and evaluated qualified individuals to become nominees for membership on our Board of Directors. The directors recommend candidates for nomination for election or reelection for each annual meeting of shareholders and, as necessary, to fill vacancies and newly created directorships.  

Code of Ethics

The Company has adopted a Code of Ethics that also applies to its principle executive officer and principal financial officer.  The text of the Code of Ethics is available on the Company’s website at http://www.unicapman.com.  Upon the written request to the Company mailed to the Company’s principal office, the Company shall provide to any person without charge a copy of our code of ethics.

Item 11.

Executive Compensation.

Compensation Discussion and Analysis

The Company does not have a compensation committee.  The entire board of directors is responsible for reviewing and establishing compensation for senior executives. The Company has no independent directors.

The Company’s executive compensation program is designed to achieve the following objectives: (i) provide direct compensation and rewards program that are externally competitive to attract and retain the talent needed, (ii) motivate and reward executive officers whose knowledge, skills, performance and business relationships are critical to the Company’s success, (iii) motivate executive officers to increase stockholder value and reward executive officers when stockholder value increases, (iv) compensate the Company’s executive officers to manage the Company’s business to meet its long-range goals and (v) provide compensation that aligns with business objectives and shareholders’ interests.

For the fiscal year ended April 30, 2012, the principal components of compensation for the Company’s executive officers were annual base salary and long-term equity compensation.  The board of directors subjectively apportion total compensation among these elements in such proportions as they determine are appropriate in the circumstances and, therefore, such apportionment may vary from time to time and among executives.  The board of directors retains the flexibility to consider various factors when making compensation decisions, including external market forces, individual circumstances and performance.

Base salaries for executives, including the Chief Executive Officer, are set according to the responsibilities of the position, the specific skills and experience of the individual, the individual’s performance, the competitive market for executive talent and the Company’s liquidity position.  The board of directors review salaries annually and adjust them as appropriate to reflect changes in market conditions, individual performance and responsibilities and the Company’s liquidity position.  The Chief Executive Officer of the Company participates in the determination of salaries of other executive officers.

The Company may award long-term equity incentive awards to executive officers, including the named executive officers, as part of its total compensation package.  The board of directors reviews and approves the amount of each award to be granted to each named executive officer.  Long-term equity incentive awards may be made pursuant to the 2006 Equity Incentive Plan originally adopted in 2006 (the “2006 Plan”) or from authorized but not issued shares.

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The Company’s long-term equity incentive is currently in the form of options to acquire its common stock or grants of common stock.  Stock option awards provide the Company’s executive officers with the right to purchase shares of its common stock at a fixed exercise price for a period of up to ten years under the 2006 Plan.  Stock options are granted under the 2006 Plan at a price not less than the prevailing market price at the time of the grant and will have realizable value only if the Company’s stock price increases.

The board of directors determines the amount and features of the stock options, if any, to be awarded to executive officers.  They evaluate a number of criteria, including the past service of such executive officer to the Company, the present and potential contributions of such executive officer to the Company’s success and such other factors as they shall deem relevant in connection with accomplishing the purposes of the 2006 Plan, including the executive officer’s current stockholdings, years of service, position with the Company and other factors.  However, they will not apply a formula assigning specific weights to any of these factors when making such determination.  

The executive officers are also eligible to participate in a health insurance program offered by the Company to its employees. None of the Company’s executive officers have employment, severance or change-of-control agreements.  The Company’s executive officers serve at the will of the board of directors, which enables the Company to terminate their employment with discretion as to the terms of any severance arrangement.

The base salaries paid to the Company’s named executive officers during the Company’s prior three fiscal years are set forth below in the “Summary Compensation Table”.

 The table below summarizes all compensation awarded to, earned by, or paid to our executive officers for the fiscal years ended April 30, 2012, 2011 and 2010.

(1)

Mr. Queen has been the Chief Executive Officer and director of the Company since 2004 and Principal Financial Officer of the Company since December 2011. He served as the President of the Company from 2004 through February 2009. There are no written or unwritten employment arrangements between the Company and Mr. Queen. On August 11, 2008, Mr. Queen received an option to purchase 300,000 shares of the Company’s common stock at an exercise price of $0.87 per share, exercisable immediately and expiring on August 11, 2018.  In February 2009, Mr. Queen rescinded all rights to his options. In March 2012, the Company issued 3,600,000 shares of common stock for payment of services he rendered to the Company. The amount of shares issued to Mr. Queen was determined in accordance with FASB ASC 718.

(2)

Mrs. Hoffmann was appointed Vice President of Finance (Principal Financial Officer) on March 11, 2009. She resigned from this position in December 2011.

We grant stock awards and stock options to our executive officers based on their level of experience and contributions to our Company. The aggregate fair value of awards and options are

25

computed in accordance with FASB ASC 718 and are reported in the Summary Compensation Table above in the columns (e) and (f).

At no time during the last fiscal year was any outstanding option otherwise modified or re-priced, and there was no tandem feature, reload feature, or tax-reimbursement feature associated with any of the stock options we granted to our executive officers or otherwise.

Grants of Plan Based Awards

There were no grants of plan based awards during the year ending April 30, 2012.

Outstanding Equity Awards at Fiscal Year-End

The following table sets forth information concerning unexercised options for each named officer outstanding as of April 30, 2012:

1.

In February 2009, Ms. Hoffmann received an option to purchase 300,000 shares of the Company’s common stock at an exercise price of $0.20, exercisable immediately and expiring February 2019.  Ms. Hoffmann resigned as our Principal Financial Officer in December 2011.

Option Exercises and Stock Vested

There were no exercises or vesting during the year ending April 30, 2012.

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Compensation of Directors

Set forth below is a summary of the compensation of our directors during our April 30, 2012 fiscal year.

 (1)

Serves as an executive officer and a director but receives no additional compensation for serving as a director.

(2)

In March 2012, the Company issued 1,000,000 shares of common stock to Mr. Oberosler for payment of services rendered to the Company as directors. The shares vest immediately.  

(3)

In March 2012, the Company issued 50,000 shares of common stock to each director for payment of services rendered to the Company as directors. The shares vest immediately.  

Compensation Committee

Our Board of Directors currently has no standing compensation committee or committee performing similar functions. This is due to the small number of executive officers involved with the Company, and the fact that the Company operates with few employees. The Company’s entire Board of Directors currently participates in the consideration of executive officer and director compensation. Our Board of Directors will continue to evaluate, from time to time, whether it should appoint standing compensation committee.

Compensation Committee Interlocks and Insider Participation

Our Company has no compensation committee (or other board committee performing equivalent functions).  Michael Queen, the Company’s sole director and sole executive officer, solely participated in deliberations of the Company’s board of directors concerning executive officer compensation during the last completed fiscal year.

Compensation Committee Report

Our board of directors, who serves as the compensation committee has reviewed and discussed the Compensation Discussion and Analysis described above and based upon such review and discussions recommends to the board of directors that the Compensation Discussion and Analysis be included in the Company’s annual report on Form 10–K. Michael D. Queen is the sole member of the board of directors.

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Compensation Policies and Practices As They Relate To Our Risk Management

No risks arise from our Company’s compensation policies and practices for our employees that are reasonably likely to have a material adverse effect on our Company.

Item 12.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

Security Ownership of Certain Beneficial Owners

The following table sets forth, as of August 10, 2012, the names, addresses, amount and nature of beneficial ownership and percent of such ownership of each person or group known to our Company to be the beneficial owner of more than five percent (5%) of our common stock.  The address of each person in the table is c/o Universal Capital Management, Inc., 2601 Annand Drive, Suite 16, Wilmington, DE 19808.

(1)

This table is based on information supplied by officers, directors and principal stockholders of the Company and on any Schedules 13D or 13G filed with the SEC.  On that basis, the Company believes that each of the stockholders named in this table has sole voting and dispositive power with respect to the shares indicated as beneficially owned and except as otherwise indicated in the footnotes to this table.

(2)

Applicable percentages are based on 13,287,426 shares outstanding on August 14, 2012, adjusted as required by rules promulgated by the SEC.

(3)

Includes 355,500 shares held directly and indirectly by Mr. Queen’s wife, as to which he disclaims beneficial ownership.

Security Ownership of Management

The following table sets forth, as of August 14, 2012, the names, addresses, amount and nature of beneficial ownership and percent of such ownership of our common stock of each of our officers and directors, and officers and directors as a group:

(1)

This table is based on information supplied by officers, directors and principal stockholders of the Company and on any Schedules 13D or 13G filed with the SEC.  On that basis, the Company believes that each of the stockholders named in this table has sole voting and dispositive power with respect to the shares indicated as beneficially owned and except as otherwise indicated in the footnotes to this table.

(2)

Applicable percentages are based on 13,287,426 shares outstanding on August 14, 2012, adjusted as required by rules promulgated by the SEC.

(3)

Includes 355,500 shares held directly and indirectly by Mr. Queen’s wife, as to which he disclaims beneficial ownership.

(4)

Consists of an option to purchase 300,000 shares of common stock exercisable within 60 days from the date hereof. Ms. Hoffmann resigned as our Principal Financial Officer in December 2011.

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We are not aware of any arrangements that could result in a change of control.

Securities Authorized for Issuance under Equity Compensation Plans

Information regarding our compensation plans under which our equity securities are authorized for issuance can be found in Part II –Item 5 of this report.

Item 13.

 Certain Relationships and Related Transactions, Director Independence

Related Transactions

On November 1, 2008 the Company entered into a promissory note with Barbara Queen, Michael Queen’s wife, in the amount of $294,000.  This amount was the total that was loaned to the Company over a period of two years prior, beginning in November 2006, on behalf of Mrs. Queen to fund Company operations.  The promissory note calls for interest of eight percent (8%) annum beginning on November 2008.  Subsequent loans were made by Mrs. Queen. The principal balance outstanding as of April 30, 2011 was $332,068. This promissory note was partially repaid in the amount of $94,373 during the fiscal year ended April 30, 2012. The outstanding balance as of April 30, 2012 is $237,695.

On March 16, 2012, the Company compensated Mr. Robert Oberosler with 1,000,000 shares of its common stock valued at $260,000 for services rendered as a Director of the Company. These shares vest immediately.

Review and Approval of Transactions with Related Persons

We do not have a formal, written policy solely for the review and approval of transactions with related parties. However, our Code of Ethics provides guidelines for reviewing and handling conflict of interest transactions with our directors, officers and employees. The entire Board of Directors is responsible for reviewing all related party transactions. Before approving any such transaction, the Board of Directors would take into account all relevant facts and circumstances that it deems appropriate, including, but not limited to, the risks, costs and benefits to the Company, the terms of the transaction, the availability of other sources for comparable services or products, and if applicable, the impact on a director’s independence. Only those transactions that, in light of known circumstances, are fair as to, and in the best interests of the Company and its shareholders, as the Board of Directors determines in the good faith exercise of its discretion, shall be approved.

Director Independence

Although we currently trade on the Over-the-Counter quotation system, our board of directors has reviewed each of the directors’ relationships with our Company in conjunction with Section 121 of the listing standards of the NYSE Amex and has affirmatively determined that none of our directors are independent directors in that they are independent of management and free of any relationship that would interfere with their independent judgment as members of our board of directors.

We do not have a separately designated audit, nominating or compensation committee or committee performing similar functions.  Our sole director, Michael Queen serves in such capacities and is not independent as defined herein.

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Item 14.

Principal Accountant Fees and Services.

Audit and Related Fees

Salberg & Company, P.A. has been the independent accounting firm and has audited the financial statements of the Company for the fiscal year ended April 30, 2010. The financial statements of the Company for the fiscal year ended April 30, 2011 and 2012 have not been audited due to our inability to pay Salberg & Company, P.A.

The following table shows the aggregate fees billed to the Company by Salberg & Company, P.A. for professional services rendered during the fiscal years ended April 30, 2012:

Audit Fees

Represents fees for professional services provided for the audit of the Company’s annual financial statements and review of the Company’s financial statements included in the Company’s quarterly reports.

Audit-Related Fees

Represents fees for assurance and related services that are reasonably related to the performance of the audit or review of the Company’s financial statements.

Tax Fees

Represents fees related to the tax audit and other advisory services, tax compliance and tax return preparation.

Audit Committee Pre-Approval Policies

The Audit Committee pre-approves all work done by its outside auditors.

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PART IV

Item 15.

Exhibits and Financial Statement Schedules.

(a)(1)

The following financial statements are filed as part of this Form 10-K Report:

Balance Sheet

Statements of Operations

Statements of Cash Flows

Statement of Changes in Net Assets

Financial Highlights

Notes to Financial Statements

(2)

Schedules

None required.  

(3)

Exhibits

The exhibits to this Annual Report on Form 10-K are listed on the accompanying Index to Exhibits and are incorporated herein by reference or are filed as part of this Annual Report on Form 10-K.

*

Compensation Plans and arrangements for executives and others.

#

Filed herewith

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Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

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UNIVERSAL CAPITAL MANAGEMENT, INC.

FINANCIAL STATEMENTS

APRIL 30, 2012, 2011 AND 2010

CONTENTS

F-1

UNIVERSAL CAPITAL MANAGEMENT, INC.

BALANCE SHEET

(UNAUDITED)

See accompanying notes to these financial statements.

F-2

UNIVERSAL CAPITAL MANAGEMENT, INC.

STATEMENT OF OPERATIONS

(UNAUDITED)

See accompanying notes to these financial statements.

F-3

UNIVERSAL CAPITAL MANAGEMENT, INC.

STATEMENTS OF CASH FLOWS

(UNAUDITED)

See accompanying notes to these financial statements.

F-4

UNIVERSAL CAPITAL MANAGEMENT, INC.

STATEMENT OF CHANGES IN NET ASSETS

(UNAUDITED)

See accompanying notes to these financial statements.

F-5

UNIVERSAL CAPITAL MANAGEMENT, INC.

NOTES TO FINANCIAL STATEMENTS

AS OF APRIL 30, 2012