The polyurethane foam market is projected to reach USD 79.77 billion by 2023, at a CAGR of 8.0% between 2018 and 2023. The growth of the polyurethane foam market can be attributed to the increasing demand for polyurethane foam from the bedding & furniture and building & construction end-use industries. Significant investments in new infrastructure development, new housing projects, and renovation of non-residential buildings in the US, China, India, and Brazil have also influenced the growth of the polyurethane foam market.
UMAX Group Corp.(OTC: UMAX), a Nevada corporation, has one operational subsidiary, Home Foam Corporation (Nevada Corporation), which specializes in architectural foam (EPS) design products. This includes columns, caps, bases, medallions, railings, balconies, balustrades, shutters, window trims and sills, crown moldings and interior & exterior moldings. Additionally, they provide ornamental foam pop-outs such as window treatments for outside of new homes for stucco subcontractors and plaster companies. Additionally, Home Foam cuts foam for packaging inserts for shipping companies as well as geo-foam for highway and road development. The company also manufactures shutters for some of the largest regional home building companies for newly constructed residential homes. The company currently operates a 12,500 square foot warehouse located in Las Vegas, Nevada. The warehouse provides services for over 50 customer and currently has 13 full-time employees. Home Foam has plans to participate in the home building market in the Southwest Unites States during calendar year 2021. The company will eventually develop its own patented building system using EPS Foam products and a patented stucco-based coating. The coating insures higher R-values factors than traditional wood-built residences thus lower energy monthly cost. The company is also continually searching for companies that would expand the footprint in the home building industry for partnerships of acquisition.
UMAX and its wholly-owned subsidiary, Home Foam Corporation, recently announced it is moving to a new facility. The facility is almost twice the size of its current operational footprint. The move is anticipated during the first quarter of calendar year 2021.
Mr. Fletcher (President and CEO of the Company), states…”Home Foam initially moved into its current 12,500 square foot facility off Pecos and Cheyenne, in the industrial corridor of the Las Vegas Valley, during the last quarter of 2019. Home Foam expected this facility would meet its operational needs for several years. It became evident in the middle of 2020, less than nine months into since its formation, that Home Foam would need a much larger facility to meet the growing needs of its current client base as well as potential new client contracts that are being negotiated. These new contracts, which are to be announced in the coming weeks and months, will be a macro change in the top line revenue of Home Foam Corporation. As such, UMAX and Home Foam have signed the necessary lease agreement for the new facility and has a planned move in date on April 1, 2020. This brand-new facility is state of the art and encompasses in excess of 24,000 square feet of office and warehouse space. The new location, which is on Cheyenne Road, right of the busy I-15 industrial corridor, will meet the needs of UMAX and Home Foam for the next couple of years based upon its forecasted revenue growth. It has been a genuinely exciting initial year and a half of operations for the Home Foam management and employees as we strive to meet the increasing demands of our current client base and land new clients moving forward.”
The performance of the Las Vegas new housing market in 2020, and the predicted substantial increase in demand for new homes in the Las Vegas Valley in 2021, has driven the increased demand for the products of Home Foam Corporation leading to its need to move to a larger facility. In the Las Vegas Review Journal on December 24, 2020, the byline was “Las Vegas Housing Market Expected to Stay Hot in 2021″. In this article, it stated that the National Association of Realtors expected national home sales to rise 7 to 10 percent in 2021. The article went on to suggest that the Las Vegas market should outpace this national forecast and specifically states that Las Vegas has also long been a popular spot for people to move from higher-priced areas, especially Southern California. The article went on to say that: (1) home sales growth was accelerated during the pandemic as exiled office staffers work remotely and buy bigger more affordable homes in Southern Nevada; (2) the Las Vegas’ housing market was initially hit with turbulence after the pandemic upended daily life, as the valley’s sales pipeline shrank rapidly, but the real estate market recovered and is now at its most frenzied level in years; (3) new home sales by the end of 2020 may have reached the most since 2007; and (4) local home builders predict that the Las Vegas new home market will be strong in 2021 which is being mainly driven by out of state buyers, mostly Californians, which is driving the predicted increased sales in 2021 and beyond. The expected increase in new home starts in the Las Vegas market is being driven by historically low interest rates, low than normal home inventory for sale, first time home buyers, and new residents moving to the valley from high price áreas like California and New York. This is an economic trend that should last for several years to come. UMAX and Home Foam plan to take full advantage of this predicted economic growth.
Mr. Fletcher (President and CEO of UMAX) further stated…”The continued and ongoing strength of the Las Vegas real estate market has been a boon to UMAX and Home Foam Corporation. In recent discussions with one of our largest clients, a major home building subcontractor which specializes in stucco applications, they expect calendar year 2021 to bring significant increases in new home demand in the Las Vegas, Nevada real estate market in the neighborhood of 20% to 40%. This client provides turnkey stucco subcontract solutions for some of the largest well known home builders in Southern Nevada. We provide this client with all their required pre-designed glass reinforced gypsum shutters (which are fabricated on site at Home Foam). Home Foam also provides this client with EPS foam window pop outs to provide the finishing touches to these new homes.”
UMAX expects 2021 to be a year of significant growth in revenue from not only Home Foam’s current client base but new large contract clients that are now being finalized. This increased revenue from Home Foam’s current client base will have a large impact on its gross margin. Home Foam completed calendar year 2020 as a cash flow positive operation. As such, these anticipated increase in top line revenue for Home Foam will go almost all singularly towards bottom line financial performance of its parent company, UMAX.
On December 28, 2020, UMAX announced the plan to engage a PCAOB qualified auditor, the subsequent completion of an audit of its financial statements, and an up listing to the OTCQB once completed. UMAX is currently set to receive several engagement letters in the next ten days at which such time, we will execute and engagement letter to move forward with the preparation of our audited financial statements. As such, once a PCAOB auditor is engaged in the next two weeks or less, that is will take between sixty (6) and Ninety (90) days to complete the FYE 2020 and 2019 audited financial statements and notes thereto at which such time the application to OTC Market Groups, Inc. will be completed for UMAX to move to the OTCQB.