COVER PAGE
U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM SB-2
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
(File No. 333-6648)
Pre-effective Amendment Number One
RBP Meats, Inc.
Florida 2011 59-3427104
5713 Seminole Drive, Crestview, FL 32536 (850/682-5300)
(Same)
Kenneth Windsor
copies to: Mark Welton 1078 S. Ferdon Blvd., Suite B
Crestview, FL 32536 850/682-2120
Approximate date of proposed sale to the public: As soon as practicable
following effectiveness.
Title of each class of securities to be registered: Common Stock
Amount to be registered: 40,000 shares
Proposed maximum offering price per share: $50
Proposed maximum aggregate offering price: $2,000,000
Amount of registration fee:
THE COMPANY IS OFFERING THESE SECURITIES ON A "BEST EFFORTS" BASIS, SOLELY
THROUGH ITS OFFICERS AND DIRECTORS. THE COMPANY SEEKS A MINIMUM OF $250,000
(5,000 SHARES) AND A MAXIMUM OF $2,000,000 (OR 40,000 SHARES). INVESTORS MUST
PURCHASE A MINIMUM OF FIVE (5) SHARES, AND MAY THEN PURCHASE ADDITIONAL SHARES
IN SIMILAR FIVE-BLOCK LOTS. UNTIL THE MINIMUM NUMBER OF SHARES IS SOLD, THE
COMPANY WILL DEPOSIT ALL PROCEEDS INTO AN ESCROW ACCOUNT AT TO BE SUPPLIED BY
AMENDMENT (SEE, "PLAN OF DISTRIBUTION"). THE OFFERING WILL CONCLUDE NOT LATER
THAN TWENTY-FOUR MONTHS AFTER INITIATION.
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(Front of Registration Statement and Outside Front Cover of Prospectus)
RBP Meats, Inc.
40,000 shares of Common Stock (Stated Value-$50.00), Offered to the Public at
$50.00 per share.
PRIOR TO THIS OFFERING THERE HAS BEEN NO MARKET FOR THE SECURITIES OF RBP MEATS,
INC. (THE "COMPANY"), AND THERE IS NO ANTICIPATION THAT SUCH A MARKET WILL
DEVELOP SUBSEQUENT TO THIS OFFERING. THE PUBLIC OFFERING PRICE FOR THE STOCK WAS
ARBITRARILY DETERMINED BY COMPANY MANAGEMENT, AND DOES NOT NECESSARILY BEAR ANY
RELATIONSHIP TO ANY CRITERIA OF VALUE THAT MIGHT BE APPLIED TO THE COMPANY'S
SECURITIES. RESTRICTIONS ON STOCK TRANSFERS APPLY. SEE "RISK FACTORS". THESE
SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE
COMMISSION NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
THE COMPANY IS OFFERING THESE SECURITIES ON A "BEST EFFORTS" BASIS, SOLELY
THROUGH ITS OWN OFFICERS AND DIRECTORS. THE COMPANY SEEKS A MINIMUM OF $250,000
(5,000 SHARES) AND A MAXIMUM OF $2,000,000 (OR 40,000 SHARES). EACH INVESTOR
MUST PURCHASE A MINIMUM OF FIVE SHARES AND MAY THEREAFTER PURCHASE ADDITIONAL
FIVE-SHARE BLOCKS.
Underwriting Proceeds
Price to Discounts and to
Public (1) Commissions (2) Company(1)
Per Share $ 50 $ -0- $ 50
Total/Minimum Offering $ 250,000(3) $ -0- $ 250,000
Total/Maximum Offering $ 2,000,000(4) $ -0- $ 2,000,000
(1) Does not account for the Company's expenses in connection with this
offering, which are anticipated to be approximately $100,000. See "Use of
Proceeds."
2) The Company intends to market this offering on a "best efforts" basis,
exclusively through its officers and directors, none of whom shall receive sales
commissions based either directly or indirectly on transactions in these
securities. The Company will be registered as an "issuer/dealer" with the
Florida Department of Banking and Finance, and those officers and directors
participating in the distribution of the Company's securities will similarly be
registered as associated persons thereof with the same agency (see, "Plan of
Distribution".
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(3) Proceeds from the offering will be placed in an escrow account at TO BE
SUPPLIED BY AMENDMENT ("Escrow Agent") until subscriptions for two hundred fifty
thousand dollars ($250,000) have been received and accepted by the Company. If
subscriptions for such amount have not been accepted within one hundred eighty
(180) days from the date of this Prospectus, and if Management elects not to
extend the offering period, then the offering will terminate (with the
concomitant return of funds to investors). If Management elects not to extend,
then the Escrow Agent will promptly return all subscribed funds, plus any
interest earned, if the Company fails to receive the minimum subscription amount
and the offering is terminated.
(4) The Company may terminate this offering without reaching the maximum of Two
Million Dollars ($2,000,000). Otherwise, it is the intent of the Company to
terminate this offering twenty-four months after its onset.
SUBJECT TO COMPLETION JULY 15, 1998: INFORMATION CONTAINED HEREIN IS SUBJECT TO
COMPLETION OR AMENDMENT. A REGISTRATION STATEMENT RELATING TO THESE SECURITIES
HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY
NOT BE SOLD NOR MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION
STATEMENT BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO
SELL OR THE SOLICITATION OF AN OFFER TO BUY, NOR SHALL THERE BE ANY SALE OF
THESE SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY
SUCH STATE.
THE DATE OF THIS PROSPECTUS IS DRAFT____________1998
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(Inside Front and Outside Back Cover Pages of Prospectus
AVAILABLE INFORMATION. The Company is not currently a "reporting company" with
the Securities and Exchange Commission ("Commission") but expects to become
subject to reporting and other informational requirements of the Securities
Exchange Act of 1934 and, in accordance therewith, will be required in the
future to file reports, statements and other information with the Commission.
The public may read and copy any material filed by the Company at the
Commission's Public Reference Room at 450 Fifth St., N.W., Washington, D.C.,
20549, at prescribed rates, and at the Commission's Atlanta Regional Office,
3475 Lenox Road, N.E., Suite 1000, Atlanta, GA, 30326-1232. The public may
obtain information on the Public Reference Room by calling the Commission at
1-800-SEC-0330. The Company is an electronic filer with the Commission; and the
Commission maintains a Web site (http://www.sec.gov) that contains reports,
proxy and information statements and other information regarding issuers that
file electronically with the Commission. The Company's securities are not listed
on any national securities exchange.
REPORTS TO SECURITIES HOLDERS. Each stock holder will be provided a copy of the
Company's annual report, which will contain audited financial reports, within
thirty (30) days of the effective date of the same.
INCORPORATION BY REFERENCE. The Company has filed with the Commission a
Registration Statement under the Securities Act of 1933 with respect to the
securities offered hereby. This Prospectus does not contain all the information
set forth in the Registration Statement, certain items of which are omitted -
together with exhibits to the Registration Statement - as permitted by the rules
and regulations of the Commission. For further information with respect to the
securities offered hereby and the Company, reference is made to the Registration
Statement, including the exhibits thereto filed as a part thereof. Upon written
or oral request to Kenneth Windsor, 5713 Seminole Drive, Crestview, FL 32536
(850/682-5300), the Company will provide without charge to each person receiving
a Prospectus a copy of any information that was incorporated by reference in the
Prospectus.
Until _____________, 1998, all dealers effecting transactions in the registered
securities, whether or not participating in this distribution, may be required
to deliver a Prospectus. This is in addition to the obligation of dealers to
deliver a Prospectus when acting as underwriters and with respect to their
unsold allotments or subscriptions.
No dealer, salesman or other person has been authorized to give any information
or to make any representations not contained in this Prospectus, and if given or
made, such information or representation must not be relied upon as having been
covered by this Prospectus.
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THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE
A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE
SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
-----------------------------
SUMMARY INFORMATION AND RISK FACTORS
SUMMARY - RBP Meats, Inc. ("RBP" or "Company") was incorporated in Florida in
January, 1997, to undertake the construction and operation of an animal
processing facility in the State of Florida (see, "Description of Business" and
"Plan of Operation"). To date, the Company has not commenced substantive
operations (see, "Risk Factors").
ADDRESS - The Company's executive office is located at 5713 Seminole Drive,
Crestview, Florida 32536/(850) 682-5300.
RISK FACTORS - The securities offered are speculative in nature and involve a
high degree of risk. The stock has not and will not be listed on any quotation
system and thus has limited investment value. The Company's Articles generally
restrict stock transfers (except to a spouse or to lineal heirs) without
offering the stock to the Company or to other shareholders (see, "Description of
Securities"). Each potential investor should carefully consider the following
risk factors regarding the Company.
DEVELOPMENT STAGE COMPANY - The Company is in its development phase, and has not
yet commenced any significant business activities. It is devoting substantially
all of its efforts to establishing its business; such activities consist of
raising capital, designing and constructing a facility for its operations, and
developing a business plan. Planned principal operations have not yet begun; the
Company has no operating history, and its future operations are subject to all
of the risks inherent in the establishment of any new business. The Company can
be expected to compete with similar, established facilities which have extensive
experience in this field, and greater financial resources. There is no assurance
that the Company will be able to become commercially viable, achieve future
earnings of significance, or be able to operate profitably. There can be no
assurance that the proposed plan of operations of the Company can be developed
in the manner contemplated; and, if planned operations are unsuccessful,
shareholders may lose all, or a significant part, of their investment.
ADDITIONAL CAPITAL REQUIREMENTS - Management has established a minimum number of
shares to be sold (5,000, or $250,000). However, if only this nominal amount of
stock is sold, the Company will have to substantially scale back anticipated
operations, purchasing used equipment and hiring a smaller number of employees
than planned,
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and would be forced to resort to external financial sources, for which no firm
commitment is in hand (see, "Use of Proceeds" and "Plan of Operation"). There is
no assurance that such funding can be arranged, and the lack thereof could
materially and adversely affect the Company.
LIMITED VOTING RIGHTS - The earliest vacancy on the Company's Board of Directors
("Board") is not expected to occur prior to January, 2003, at which time two (of
five) directors' terms will expire (see, "Directors, Executive Officers
Promoters & Control Persons"). Hence, until such date, at the earliest,
shareholders will not be able to effect any changes in Company management. The
Company's officers and directors currently have been issued six hundred (600)
shares of common stock, and the Company continues to accrue - but has not issued
- - additional shares of stock for them (see, "Security Ownership of Certain
Beneficial Owners and Management").
LIMITED EXPERIENCE OF MANAGEMENT - The business experience of Management lies in
related agricultural and business fields; however, Management has no experience
in starting or operating a processing facility similar to the one to be built
with the proceeds of this offering (see "Directors, Executive Officers,
Promoters & Control Persons").
GOVERNMENTAL REGULATION. The Company's proposed business depends upon obtaining
numerous permits and licenses. There can be no guarantee that all necessary
government licenses will be obtained. The meat processing industry is governed
by a multitude of rules, laws and regulations issued by various branches of
federal, state and local government. The operation of the Company will also be
subject to regulation normally incident to business operations (e.g., O.S.H.A.,
workmen's compensation statutes, unemployment insurance legislation and income
tax and social security related regulations). Although the Company will make
every effort to comply with applicable regulations, it can provide no assurance
of its ability to do so, nor can it predict the effect of these regulations on
its proposed activities. The failure of the Company to comply with applicable
laws, regulations or rules of sanctioning bodies could have a materially adverse
impact on its business.
DIVIDENDS - No dividends have been paid by the Company and no such payment can
be assured in the foreseeable future. Dividend payments, if any, are within the
discretion of the Board of Directors. Even if adequate funds should become
available for future cash dividends, the Board may determine to utilize all, or
a sizeable portion, of such surplus for business expansion, or for other
purposes.
LACK OF TRADING MARKET - There is no market for the Company's stock and none is
envisioned. The Company does not intend to have the stock listed on any exchange
or quoted on any quotation system. Consequently, stockholders may never be able
to resell their stock, and the stock may not be acceptable to a lending
institution as collateral for a personal loan. The Company's Articles generally
restrict stock transfers (except to a spouse or to lineal heirs) without
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offering the stock to the Company or to other shareholders (see, "Description of
Securities").
DETERMINATION OF OFFERING PRICE - The offering price of the stock was determined
by Management; but such price should not be considered an indication of the
actual value of the Company, since the price bears no direct relationship to the
assets, net worth, results of operations, or any other traditional and objective
criteria of value applicable to the Company (see, "Determination of Offering
Price").
DILUTION - Based on the Company's net book value at the date of this Prospectus,
computed on a cost basis, the offering price ($50) of the shares is greater than
the current book value per share. Therefore, to the extent that the new
investors in this offering will contribute more for their shares than the
current book value thereof, the new shareholder's interests will be subjected to
"dilution" which is a term referring to the difference which results when the
price of the stock being offered is compared to the current book value (see,
"Dilution").
LACK OF UNDERWRITER. The stock will be sold directly by Company Management,
without using an underwriter (see, "Plan of Distribution"). Because an
underwriter will not be involved, the services that an underwriter would
customarily render will not be available to stock purchasers. Such services
typically would include, among other duties, negotiation of the offering price
and the independent confirmation of the factual representations in this
Prospectus.
INDEMNIFICATION OF THE OFFICERS AND DIRECTORS. Provision has been made in the
Bylaws for indemnification of any officer, director or employee against all
expenses and liabilities (including counsel fees), reasonably incurred or
imposed against such person in connection with any proceeding to which such
person may become involved by reason of his being, or having been, a director,
officer, employee or agent of the corporation, except in cases where such person
is adjudged guilty of willful misfeasance or malfeasance in the performance of
his duties. Although the Board may, in its discretion, purchase liability
insurance against such events, to the extent that insurance is purchased or the
indemnification provisions of the Bylaws are invoked, the assets of the Company
would be reduced.
Insofar as indemnification for liabilities arising under the Securities Act of
1933 (the "Act") may be permitted to directors, officers, controlling persons
and employees of the Company pursuant to the foregoing provisions, or otherwise,
the Company has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable (see, "Indemnification").
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USE OF PROCEEDS
The estimated net proceeds to be received from this offering will be $1,900,000,
assuming: 1., that all shares offered are, indeed, sold; and 2., that
organizational costs (consisting of costs incurred relevant to establishing
operations) will not exceed $100,000. The Company has previously sold shares
without benefit of registration, and will offer rescission to those purchasers.
Management estimates that no more than two hundred shares (or $10,000) may be
rescinded (see, "Recent Sales of Unregistered Securities").
Management intends to use these net proceeds to acquire the necessary site (if
it has not already done so), and to erect and equip the processing facility
(see, "Plan of Operation"). The Company has agreed to pay $35,000 to acquire the
necessary land, and has budgeted $40,000 for site design (and related costs) and
$1,200,000 to erect the facility (see, "Plan of Operation"). Equipment is
estimated to cost $500,000.
Payments will be made to unaffiliated parties.
If all available shares are not sold the Company may become dependent to varying
degrees upon the availability of external financing to adequately achieve its
goals, or it may scale back in certain areas. At the date of this Prospectus, no
contracts exist which will guarantee such additional financing (see, "Risk
Factors").
RBP has estimated that it will need a minimum of $250,000 from new stock sales;
with approximately $100,000 in existing cash, this will give the Company
$350,000. Depending on the amount of shares sold the Company may either purchase
new equipment (upon full funding), or it may acquire used equipment (at lesser
levels of funding). For example, if the maximum amount sought ($2,000,000) is
raised, the Company plans to spend approximately $500,000 on new equipment;
however, if only $800,000 is raised, the Company would purchase a mixture of new
and used equipment. If only $350,000 is available from existing cash resources
and investor contributions, Management would primarily purchase used equipment.
The Company may also - if full funding is not ultimately achieved from this
offering reduce the number of employees initially hired and would add employees
only as operations suggested: at full funding, the Company would hire
approximately thirty-three employees, while at $800,000 it would employ
twenty-five persons, and at $350,000 (existing resources plus new stock sales)
the number would be reduced to eighteen.
The above amounts and priorities for the use of proceeds represent Management's
best estimates based upon currently proposed plans and assumptions relating to
erecting, equipping and operating the planned facility, and does not take into
consideration receipt of revenue, if any, from operations. Although the Company
does not contemplate any changes in the proposed use of proceeds, to the extent
the Company finds that general economic and industry conditions or prevailing
business
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conditions vary from those which were assumed in arriving at the amounts set
forth above, the Company may find it necessary or advisable to reallocate such
amounts.
Proceeds from the offering will be placed in an escrow account at TO BE SUPPLIED
BY AMENDMENT ("Escrow Agent") until subscriptions for two hundred fifty thousand
dollars ($250,000) have been received and accepted by the Company. If
subscriptions for such amount have not been accepted within one hundred eighty
(180) days from the date of this Prospectus, and if Management elects not to
extend the offering period, then the offering will terminate (with the
concomitant return of funds to investors). If Management elects not to extend,
then the Escrow Agent will promptly return all subscribed funds, plus any
interest earned, if the Company fails to receive the minimum subscription amount
and the offering is terminated.
DETERMINATION OF OFFERING PRICE
There is no established public market for the stock being offered; the offering
price was arbitrarily determined by the Board and does not necessarily reflect
the estimated present value of the stock, and should not be considered an
indication of the actual value thereof since the offering price bears no direct
relationship to the assets, net worth, results of operations, or any other
traditional and objective criteria of value (see, "Risk Factors"). There is no
established public market for the stock being offered hereby and Management does
not anticipate that any secondary market will develop. Owing to the absence of
any re-sale market, investors may not be able to recover the offering price
should it become necessary to sell this stock.
DILUTION
The price per share ($50) of the stock in this offering is higher than the
current book value per share. This is because the Company has incurred a deficit
during its development stage which is largely attributable to expenses being
substantially greater than revenue during this period. All officers, directors,
promoters and affiliated persons have contributed in cash the same price as will
new investors.
The resulting difference between the offering price and the net tangible book
value per share after this offering constitutes what is known as "dilution" to
new investors; "dilution" is a term which refers to the difference which occurs
when the offering price per share is contrasted with the net tangible book value
per share of all the shares which will be outstanding immediately after this
offering. (Net tangible book value per share on any given date is computed by
dividing the Company's net tangible book value - total tangible assets, less
total liabilities - by the number of shares outstanding on the date selected.)
Dilution results because the net tangible book value per share of the shares
issued prior to this offering is lower - owing to the previously-noted loss from
development stage activities.
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At March 31, 1998, the Company had a net tangible book value (unaudited) of
$72,602, or $20.01 per share, calculated upon 3,629 shares issued and
outstanding at such date. Following the completion of this offering and assuming
that all shares offered are purchased, and without taking into account any
changes in net tangible book value after the above date (except to give pro
forma effect to the sale of the shares in this offering), the net tangible book
value of the Company will be $2,072,602 or $47.51 per share. The increase in
such net tangible book value per share, which will be solely attributable to the
offering price per share being paid by the investors in this offering, will be
$27.50, while the amount of immediate dilution from the offering price which
will be absorbed by such investors will be $2.49.
PLAN OF DISTRIBUTION
The shares will be sold only by the Company itself, which will be registered as
an Issuer/Dealer with the Florida Department of Banking and Finance
("Department"), utilizing Company officers and directors who also will be
registered with the Department. No independent underwriter will be utilized in
this offering (see, "Risk Factors"). The offering is being done on a "best
efforts" basis, which means that the Company has no firm commitments from any
source to purchase these shares and must rely on its employees to use their
"best efforts" to sell the stock. Until the minimum number of shares have been
sold, all proceeds will be deposited into an escrow account at TO BE SUPPLIED BY
AMENDMENT. Once the minimum number of shares have been sold, all proceeds will
be deposited directly into the Company's bank account. If the minimum number of
shares is not ultimately sold, all proceeds (plus interest, if any) will be
returned directly to the purchaser.
DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS & CONTROL PERSONS
DIRECTORS - The Company's Articles of Incorporation provide that members of the
Board of Directors are to be elected (should a vacancy occur) at the annual
meeting of shareholders, to serve for a designated term of years and until their
respective successors are duly elected and qualified, or until their earlier
resignation, removal from office, or death.
At the formation of the Company in 1997, the initial shareholders elected five
Directors; these individuals, who will serve varying terms of office, are
described below. Of the initial directors elected, two will serve six year
terms, two will serve seven year terms, and one will serve an eight year term.
Thereafter, each director elected in the future will serve three years from the
date of election. Hence, until at least January, 2003, the shareholders will be
unable to elect any directors at all (see, "Risk Factors").
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Should any directorship be vacated prior to the specified end of the director's
term, the remaining directors will select a replacement director for the balance
of the term. If a director dies, resigns, or is removed from office by an
appropriate vote of the shareholders, a new director will be elected by the
existing directors to fill the vacant seat for the balance of that term. A
director may be removed from office, with or without cause, at a special meeting
of the shareholders called for that purpose, by a vote of not less than
three-fourth's of the outstanding shares.
OFFICERS - Executive officers are selected by the directors and serve until
their successors are duly elected and qualified, subject to earlier removal by
the Board. At the date of this Prospectus, the following individuals comprised
the Directors and Officers of the Company.
KENNETH WINDSOR (age 37) is currently RBP's Chairman of the Board, President and
Chief Executive Officer. From 1985 to the present, Mr. Windsor has been employed
by the United States Department of Agriculture where he has worked with farmers
and ranchers on the local level. He has owned and operated a tree removal
business for ten years and has been a partner in Windsor's Ratite Ranch since
1992. Other work experience has been in the civil engineering field. Mr. Windsor
will be employed full-time by RBP Meats, Inc. His initial term as a Director
will be for a period of eight years. Once construction commences, he will be
employed on a full-time basis.
JERRY MITCHEM (age 56) is a Director, Vice President, and will act as the
Company's Director of Sales and Marketing. He retired from GulfPower after
twenty-nine years of service. Mr. Mitchem has served in leadership positions of
various groups that promote the ratite industry. He has worked with the
University of Florida and the USDA-Food Safety Inspection Service to set
standards and train meat inspectors in the processing of ostrich and emu. Mr.
Mitchem resides in Crestview, Florida, and will work full-time, in charge of
sales and marketing. His initial term as a Director will be for a period of
seven years.
DENNIS COOPER (age 45) is a Director; he recently retired from the United States
Air Force after 25 years of military service in the medical field. His extensive
background in leadership and management included positions as Squadron First
Sergeant, Superintendent of Nursing Services at the Air Force's largest medical
facility, and Command Medical Service Manager. Mr. Cooper will be employed on a
full-time basis. Mr. Cooper resides in Crestview, Florida, and is married to a
niece of Marvin Sasser, another RBP director. Mr. Cooper's initial term as a
Director will be for a period of six years.
MARVIN SASSER (age 60) is the Company's Secretary/Treasurer and a Director. Mr.
Sasser is a retired United States Department of Labor Investigator and Auditor.
He has an accounting and finance background with over 30 years experience
conducting criminal and financial investigations and audits. During the past 16
years such
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investigations and audits were centered around reviews and audits of employee
pension and welfare benefit plans, corporate financial operations and
investments, and white collar crimes. Mr. Sasser resides in Chipley, Florida.
His initial term as a Director will be for a period of seven years. He will be
employed on a full-time basis.
B. N. ARMSTRONG (age 67) is a Director, and founded Armstrong Electric Company
in 1958, from which he retired in 1992. Prior to retirement, Mr. Armstrong
served on the Electric Board for the City of Pensacola (Florida), and the
Electric Board for Escambia County (Florida) for fifteen years. He has also
served on the Apprenticeship Committee for the State of Florida, and as
President of the Northwest Florida Electrical Contractor Association. He resides
in Cantonment, Florida. His initial term as a Director will be for a period of
six years.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
At the date of this Prospectus, the Company has issued one hundred (100) shares
to each of the following members of management: Kenneth Windsor, Dennis Cooper,
Marvin Sasser, and B. N. Armstrong. Jerry Mitchem has been issued two hundred
(200) shares. Each of the foregoing contributed $50 per share (the current
offering price), and each is entitled to be issued more shares of the Company -
at the offering price hereof - for their services to the Company during its
development stage (see, "Executive Compensation").
DESCRIPTION OF SECURITIES
The securities being offered are "Common Stock", the only class of stock
authorized. The Company's Articles of Incorporation ("Articles") permit it to
issue not more than 100,000 shares. At the date of this Prospectus, three
thousand seven hundred sixty-five (3,765) shares have been issued, at the
offering price of $50; six hundred of those shares have been issued to officers
and directors, and an additional block of shares has been accrued for their
benefit but not issued (see, "Security Ownership of Certain Beneficial Owners
and Management" and "Executive Compensation"). All holders of common stock will
be entitled to one vote per share in all voting matters required by law, or by
the Company's Articles or By-laws. The power to adopt alter or amend or repeal
the Articles shall be vested in the Board (by not less than a unanimous vote of
the existing Board), or by the shareholders holding not less than 3/5th's of the
shares issued. The power to adopt, amend or repeal the By-Laws shall be by a
majority of the Board or of the shareholders.
The Articles generally prohibit any shareholder from owning more than ten
percent (10%) of the issued stock. Subject to the foregoing limitation,
shareholders have "preemptive rights", allowing them to purchase additional
shares of stock in any future
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offering thereof (at the same price as offered to others), in order to maintain
their percentage of ownership. Share holders are entitled to dividends when and
as declared by the Board, from funds legally available for that purpose. The
Company has no plans to declare dividends in the foreseeable future (see, "Risk
Factors").
Except for transfers of stock to spouses or lineal heirs, the Articles restrict
the transfer of stock, providing that shares may not be resold or otherwise
transferred unless such shares are first offered to the Company or its
shareholders, with the Company having the first right of refusal. The price
shall be "book value" as determined by the Company's CPA firm and the time for
purchase shall be sixty days for purchase from the date of receipt by the
Company of the selling shareholder's written notice to it. If the Company fails
to meet the terms within the time and price then such failure shall be treated
as a waiver of the first right of refusal.
INTEREST OF NAMED EXPERTS AND COUNSEL
Two stockholders of the Company provide accounting and legal services,
respectively, to the Company. Transactions with these related parties since the
inception of the Company approximated $30,500 at March 31, 1998.
INDEMNIFICATION
Provision has been made in the Bylaws for indemnification of any officer,
director or employee against all expenses and liabilities (including counsel
fees), reasonably incurred or imposed against such person in connection with any
proceeding to which such person may become involved by reason of his being, or
having been, a director, officer, employee or agent of the corporation, except
in cases where such person is adjudged guilty of willful misfeasance or
malfeasance in the performance of his duties. Although the Board may, in its
discretion, purchase liability insurance against such events, to the extent that
insurance is purchased or the indemnification provisions of the Bylaws are
invoked, the assets of the Company would be reduced (see, "Risk Factors").
Insofar as indemnification for liabilities arising under the Securities Act of
1933 (the "Act") may be permitted to directors, officers, controlling persons
and employees of the Company pursuant to the foregoing provisions, or otherwise,
the Company has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable.
13
<PAGE>
DESCRIPTION OF BUSINESS
The Company was incorporated in Florida in January, 1997, to undertake the
construction and operation of an animal processing facility, to be located in
Marianna, Florida (see, "Plan of Operation"). To date, the Company has not
commenced any substantive operations (see, "Risk Factors").
From the proceeds of this offering, the Company plans to erect a multi-species,
red meat, slaughter and processing plant. Upon completion, the plant will
purchase, slaughter and process livestock, and provide meat products to retail
and wholesale markets and possibly to international markets as well. Depending
on the amount of funds raised from this offering (see, "Use of Proceeds"), the
Company may have to rely upon external financing for the facility to become
fully operational; at the date of this Prospectus, no binding contracts exist
for such financing (see, "Risk Factors").
Prior to becoming operational, the facility must be equipped to slaughter and
process under USDA-HACCP guidelines. ("HACCP" stands for "Hazard Analysis and
Critical Control Point", which is an internationally recognized inspection
system recently mandated to be implemented in all United States Department of
Agriculture ("USDA") inspected facilities by the year 2000.) While RBP can not
officially apply for such approval until the facility is completed, the process
can be done on a contemporaneous basis with construction, and Management expects
no "down time" from this process.
HACCP guidelines will require RBP to have a plan in place that prevents
biological, chemical, and physical hazards from becoming a problem. The plant
will be designed to operate under strict HACCP oversight from inception. Company
policy also will call for the purchase of livestock which has been properly
raised and fed, using sound, sanitary management practices.
Management believes that there are very few competitors in this type of
processing market, and knows of no new USDA/HACCP-approved slaughter and
processing facilities within a two hundred fifty mile radius. Nevertheless, the
Company is in its development stage; other competitors, if they exist, may be
better funded.
Management believes that the processing of healthy livestock in a new USDA-HACCP
facility can produce a safe and quality product. The Company also intends to
offer custom slaughtering and processing services to local livestock producers
who would be willing to pay a fee to have their animals slaughtered, cut and
wrapped, and further processed (ie., sausage, cured hams, ground meat, etc.).
This type of meat processing procedure does not involve a USDA meat inspector
and the meat cannot be resold.
Management has researched the environmental issues relative to the project, and
determined the cost and effect to the Company to be minimal. The plant will
produce no air-borne emissions, while effluent will be discharged directly into
a municipal wastewater treatment facility. Animal by-products such as hides,
fat, blood and bones
14
<PAGE>
will be sold to rendering companies. The Jackson County Planning Commission will
review architectural drawings and engineering plans for compliance with local
and state building codes and environmental regulations. Application for a
stormwater management permit will be made to the Florida Department of
Environmental Protection. The Florida Department of Community Affairs has
coordinated a review by numerous state agencies and has determined that the
project is consistent with the Florida Coastal Management Program.
Depending upon the amount of funds raised in this offering, the Company expects
to hire between eighteen and thirty-three employees (see, "Plan of Operation").
PLAN OF OPERATION
The Company plans to erect a multi-species, red meat, slaughter and processing
facility. As designed, the plant will have the capacity to process forty cows,
or eighty hogs or ostriches, during an eight-hour shift. Management estimates
that the facility may employ as many as thirty-three people during the initial
eight hour shift when the facility is fully operational. At this level, the
plant could produce products for all its intended resale markets and provide
custom slaughter and processing. Custom processing, smoking, curing, and retail
sales can be additional services offered. Whole carcasses, quarters, steaks,
hams, hamburger, sausage, jerky, and many other meat products will provide a
wide variety of choices. Diverse livestock, markets, services, and products
furnish RBP the opportunity to fill a niche perceived by Management in the meat
processing industry.
Research suggests that two favorable conditions exist in the vicinity of the
intended plant site - an abundance of livestock, coupled with a lack of new,
federally inspected meat processing plants. Management anticipates filling the
perceived gap between the producer and consumer with what Management intends to
evolve into a "pioneer meat packing company". Management further feels that
diversity of services and products will be fundamental to RBP, as it intends -
once operational - to provide a host of products and services. Beef, pork,
ostrich, emu, goats, deer and buffalo are expected to be processed, for local,
regional and international markets.
Management believes the Company can benefit from the community's designation as
a Federal Rural Enterprise Community and as a Florida Enterprise Zone. These
programs provide financial assistance to start-up companies in the form of
incentives, tax refunds, and tax credits. In Management's opinion, the Marianna
location (in the center of the Florida Panhandle) should draw abundant supplies
of livestock from Florida and the adjoining States of Alabama and Georgia.
Nearby, Interstate 10 and U. S. Highway 231 contribute excellent transportation
routes in each direction; the site offers excellent exposure and can provide
easy access for livestock haulers, distributors, shoppers, and the University of
Florida research center mentioned
15
<PAGE>
elsewhere herein. Seaports in Jacksonville, Savannah, Mobile and New Orleans are
within easy reach for export to worldwide markets.
The University of Florida, Institute of Food and Agriculture Sciences, has a
swine research center in the vicinity of the proposed plant location, and an
affiliated beef research center is under construction; when completed that
facility will comprise approximately 1,000 acres, with a capacity of five
hundred head of cattle. University officials have expressed a non-binding
interest in using the RBP facility, when completed, to obtain animal carcass
data.
Management believes that a significant change in the meat processing industry is
at hand, and that a potential exists in the United States for an emerging
"alternative meat" industry, such as the low-fat, low-cholesterol, high-protein
red meat of the ratite (ostrich and emu). European and Asian markets also seem
very receptive. Hides, oil, and other by-products also show potential for
spin-off industries to develop. Emerging markets for goat, buffalo and deer meat
may also push these products into the mainstream. Management feels that RBP has
the opportunity to produce and distribute its own specialty lines of alternative
red meat products not presently available. Whether or not these new markets
fully develop, Management feels that RBP will still have the "safety net" of
beef and pork sales and processing to make the endeavor viable.
Management feels that many challenges await the meat processing industry of the
21st century. Today's consumers demand quality, convenient, and healthy meat
products. America's diverse ethnic cultures and religious customs require the
special attention of meat processors. The ability of a local producer to
profitably raise quality livestock for the processor is also paramount. Finally,
the most important issue is safety. Processors must start with good animals;
process under the highest sanitation standards; and then properly package,
label, and store meat products for the consumer. RBP feels that the planned
facility will be equipped and ready for such a challenge.
Depending upon the amount of shares sold in this offering, the Company may be
dependent, to an undetermined extent, upon external sources of funds to fully
construct, equip and commence operations (see, "Risk Factors"). Management has
been exploring such financing arrangements, through both federally-funded and
state-funded programs, and is currently researching potential funding sources
such as "Rural Development", an agency of the USDA, as well as the United States
Small Business Administration. At the date of this Prospectus, none of these
potential sources has entered into any binding agreement to provide funding to
the Company.
DESCRIPTION OF PROPERTY
Management has negotiated with the City Commission, City of Marianna (Florida),
to acquire a undeveloped parcel (approximately seventeen and one-half acres) in
a proposed industrial park (the "Marianna Industrial Park"), near (FL) State
Highway 71,
16
<PAGE>
in Jackson County, Florida. RBP offered $2,000 per acre (or $35,000), which is
contingent upon the City of Marianna ("City") obtaining approval for a community
development block grant and providing a paved road, water, sewer and natural gas
to the site. The offer is also contingent upon RBP obtaining adequate financing
to cover the cost of the property and construction of the facility (from the
proceeds of this offering).
The City has accepted RBP's offer, with an additional proviso that the
conveyance to RBP would be subject to a reverter clause - meaning that the City
could re-claim the property - if RBP has not commenced construction of the
proposed facility within one year of the conveyance and completed said
construction within one year from the date of its commencement. The conveyance
will also contain restrictions applicable to all property in the proposed
industrial park. If RBP does not close within ninety (90) days of May 20, 1998,
the City reserves the right to convey this property to a different entity. If
RBP does not raise such amount from this offering, RBP intends to seek an
extension of the time frame or, as an option, it may purchase the property from
available funds if an extension is not possible.
Management estimates the cost of erecting the facility will be $1,200,000 (see,
"Plan of Operation"). Once completed, the plant will be approximately 13,000
square feet in size and have 3,200 square feet of holding pens to accommodate a
two-day supply of livestock. Plans call for a metal shell for the plant
exterior, and paved driveways and parking lot, security fencing, and landscaped
areas around the plant are also planned. Included in the facility's plans are a
retail sales area, two large meat smokers, a curing room, new processing
equipment, rail systems, coolers, freezers, general office, locker-rooms and a
USDA Inspector's office.
MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
MARKET INFORMATION - There is no public trading market for the Company's common
stock, and none is expected to develop (see, "Risk Factors").
HOLDERS OF THE COMMON STOCK - At the date of this Prospectus, there are
approximately one hundred eighteen (118) holders of the issued common stock.
DIVIDENDS - No dividends have been paid on the stock, and none is anticipated in
the foreseeable future (see, "Risk Factors"). Dividend declaration, and payment,
is within the purview of the board of directors (see, "Directors, Executive
Officers, promoters and Control Persons"); however, the earliest vacancy on the
board is not anticipated prior to January, 2003 (see, "Risk Factors").
17
<PAGE>
EXECUTIVE COMPENSATION
DIRECT COMPENSATION - Until the facility is erected and commences to earn
revenue, and aside from cash payments which may be paid at an indeterminate time
in the future to certain directors or officers as a result of their agreeing to
personally guarantee corporate obligations (see below), directors and officers
will be compensated at the rate of twenty dollars ($20.00) per hour, plus
documented expenses, for work actually performed during the development phase.
Such individuals must account to the Board for time (and expenses) actually
spent on Company business during the development phase; and payment shall be in
common stock of the Company, at the rate of $50 per share. The actual number of
shares of stock issued to each officer/director will depend on the number of
hours worked and expenses incurred; however no director or officer may be issued
shares if the total earned by such individual would exceed ten percent (10%) of
the total shares to be outstanding at the end of this offering.
At March 31, 1998, the Company had accrued $47,838.22 in such compensation, owed
to the following individuals in the amounts noted: Kenneth Windsor ($20,085.78);
Marvin Sasser ($7,930.18); Jerry Mitchem ($9,374.01); B. N. Armstrong
($5,911.75); and Dennis Cooper ($4,538.50).
GUARANTEE OF CERTAIN OBLIGATIONS - As mentioned elsewhere (see, "Use of
Proceeds"), the Company may not raise the full amount necessary for the actual
cost of constructing and adequately equipping the facility, and may have to
resort to outside sources for the difference. Certain members of management have
currently indicated a willingness to personally guarantee such loan(s) if
necessary.
To reward those individuals, the Board has adopted a resolution implementing a
bonus-type "fund", of not more than two hundred thousand dollars ($200,000),
which will be divided equally among those directors/officers who may be required
to personally guarantee corporate debt in connection with obtaining start-up
financing for the facility. Payment from such fund - if made - shall be in
addition to any other compensation paid to such individuals, and it may be paid
in one lump sum or in installments, at the discretion of the Board of Directors;
however no disbursements shall be made prior to the opening of the facility -
but all payments shall be accomplished within five (5) years thereafter. Amounts
used to discharge these obligations will come from operational revenue, not from
the proceeds of this offering.
EMPLOYMENT AGREEMENTS - The Company currently has no employment agreements with
any of its officers or directors.
18
<PAGE>
RECENT SALES OF UNREGISTERED SECURITIES
Since incorporating, the Company has issued approximately 3,765 shares of its
stock without registration under the Securities Act of 1933 (the "Act"). Of such
amount, six hundred (600) shares were issued to Company management (see,
"Security Ownership of Certain Beneficial Owners and Management"). All shares
were issued and sold for cash, at the offering price of $50 per share. No
underwriter was utilized. The Company has been advised that the issuance of
these shares was in violation of the Act; and the Company will offer rescission
to all non-Management purchasers, plus interest at the applicable rate, when
this registration statement is declared effective. Rescission will be
accomplished by providing a copy of this Prospectus, together with a letter from
management advising share holders of their rights to rescind.
Management has estimated that not more than two hundred shares (or $10,000) may
be rescinded (see, "Use of Proceeds).
19
<PAGE>
RBP MEATS, INC.
(A DEVELOPMENT STAGE CORPORATION)
CRESTVIEW, FLORIDA
FINANCIAL STATEMENTS
MARCH 31, 1998 AND DECEMBER 31, 1997
<PAGE>
RBP MEATS, INC.
(A DEVELOPMENT STAGE CORPORATION)
CRESTVIEW, FLORIDA
FINANCIAL STATEMENTS
MARCH 31, 1998 AND DECEMBER 31, 1997
CONTENTS
PAGE
Accountant's Report 1
Balance Sheets 2
Statements of Operations and Deficit Accumulated in the Development Stage 3
Statements of Stockholders' Equity 4
Statements of Cash Flows 5
Notes to Financial Statements 6
<PAGE>
To the Board of Directors and Stockholders
RBP Meats, Inc.
We have compiled the accompanying balance sheets of RBP Meats, Inc. (a
corporation in the development stage) as of March 31, 1998, and the related
statement of operations and deficit accumulated in the development stage, and
cash flows for the quarter then ended and for the period from January 23, 1997
(inception) to March 31, 1998, in accordance with Statements on Standards for
Accounting and Review Services issued by the American Institute of Certified
Public Accountants.
A compilation is limited to presenting in the form of financial statements
information that is the representation of management. We have not audited or
reviewed the accompanying financial statements for the first quarter of 1998 and
the period from inception to March 31, 1998, and accordingly, do not express an
opinion or any other form of assurance on them.
The financial statements for the period from January 23, 1997 (inception) to
December 31, 1997 were audited by us, and we expressed an unqualified opinion on
them in our report dated May 5, 1998, but we have not performed any auditing
procedures since that date.
/s/
SALTMARSH, CLEAVELAND, & GUND
Fort Walton Beach, Florida
May 7, 1998
(except for Note 8, as to which the date is May 27, 1998)
-1-
<PAGE>
RBP MEATS, INC.
(A DEVELOPMENT STAGE CORPORATION)
BALANCE SHEETS
<TABLE>
<CAPTION>
December 31, March 31,
1997 1998
(AUDITED) (UNAUDITED)
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash $ 125,729 $ 114,028
----------- -----------
FIXED ASSETS:
Construction in progress 6,276 6,276
Property and equipment 935 935
----------- -----------
7,211 7,211
Accumulated depreciation (134) (187)
----------- -----------
Net property and equipment 7,077 7,024
----------- -----------
OTHER ASSETS:
Organization costs 44,535 51,303
----------- -----------
TOTAL ASSETS $ 177,341 $ 172,355
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accrued liabilities $ 41,682 $ 48,450
----------- -----------
COMMITMENTS AND CONTINGENCIES - -
STOCKHOLDERS' EQUITY:
Common stock, stated value $50 per share;
100,000 shares authorized, 3,765 shares
issued, 3,720 and 3,629 outstanding
respectively 188,250 188,250
Treasury stock, 45 and 136 shares at cost, respectively (2,250) (6,800)
Deficit accumulated during the development stage (50,341) (57,545)
----------- -----------
Total stockholders' equity 135,659 123,905
----------- -----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 177,341 $ 172,355
=========== ===========
</TABLE>
See accompanying notes and accountant's report.
-2-
<PAGE>
RBP MEATS, INC.
(A DEVELOPMENT STAGE CORPORATION)
STATEMENTS OF OPERATIONS AND DEFICIT ACCUMULATED
DURING THE DEVELOPMENT STAGE
<TABLE>
<CAPTION>
Cumulative
For the Period from For the Three from Inception
January 23, 1997 to Months Ended January 23, 1997 to
December 31, 1997 March 31, 1998 March 31, 1998
(AUDITED) (UNAUDITED) (UNAUDITED)
------------------- -------------- -------------------
<S> <C> <C> <C>
REVENUE:
Interest income $ 3,807 $ 1,344 $ 5,151
----------- ----------- ------------
EXPENSES:
Depreciation 134 53 187
Legal and professional fees 20,117 2,986 23,103
Office expense 5,985 604 6,589
Organization expense 23,605 -0- 23,605
Postage 799 -0- 799
Printing and publications 2,501 -0- 2,501
Taxes and licenses -0- 4,620 4,620
Telephone and utilities 1,007 285 1,292
----------- ----------- ------------
Total expenses 54,148 8,548 62,696
----------- ----------- ------------
LOSS FROM DEVELOPMENT STAGE ACTIVITIES $ (50,341) $ (7,204) $ (57,545)
=========== =========== ============
LOSS PER COMMON STOCKHOLDER $ (21.27) $ (1.96) $ (15.66)
=========== =========== ===========
SHARES USED IN COMPUTING LOSS
PER SHARE AMOUNTS 2,367 3,675 3,675
=========== =========== ============
</TABLE>
See accompanying notes and accountant's report.
-3-
<PAGE>
RBP MEATS, INC.
(A DEVELOPMENT STAGE CORPORATION)
STATEMENTS OF STOCKHOLDERS' EQUITY
FOR THE PERIOD ENDED MARCH 31, 1998 AND THE PERIOD
FROM INCEPTION TO DECEMBER 31, 1997
<TABLE>
<CAPTION>
NUMBER OF COMMON TREASURY ACCUMULATED
SHARES STOCK STOCK DEFICIT
---------- ---------- ----------- -----------
<S> <C> <C> <C> <C>
COMMON STOCK ISSUED FOR CASH
THROUGH 1997 3,760 $ 188,000 $ -0- $ -0-
COMMON STOCK ISSUED FOR SERVICES
THROUGH 1997 5 250 -0- -0-
PURCHASE OF TREASURY STOCK
THROUGH 1997 (45) -0- (2,250) -0-
NET LOSS FROM DEVELOPMENT STAGE
ACTIVITIES THROUGH 1997 -0- -0- -0- (50,341)
---------- ---------- ----------- -----------
BALANCE AT DECEMBER 31, 1997 3,720 188,250 (2,250) (50,341)
PURCHASE OF TREASURY STOCK
FOR THE THREE MONTHS
ENDED MARCH 31, 1998 (91) -0- (4,550) -0-
NET LOSS FROM DEVELOPMENT STAGE
ACTIVITIES FOR THE THREE MONTHS
ENDED MARCH 31, 1998 -0- -0- -0- (7,204)
---------- ---------- ----------- -----------
BALANCE AT MARCH 31, 1998 3,629 $ 188,250 $ (6,800) $ (57,545)
========== ========== =========== ===========
</TABLE>
See accompanying notes and accountant's report.
-4-
<PAGE>
RBP MEATS, INC.
(A DEVELOPMENT STAGE CORPORATION)
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Cumulative
For the Period from For the Three from Inception
January 23, 1997 to Months Ended January 23, 1997 to
December 31, 1997 March 31, 1998 March 31, 1998
(AUDITED) (UNAUDITED) (UNAUDITED)
------------------- -------------- -------------------
<S> <C> <C> <C>
CASH FLOWS FROM DEVELOPMENT
STAGE ACTIVITIES:
Net loss $ (50,341) $ (7,204) $ (57,545)
----------- ----------- ------------
Adjustments to reconcile net loss to net
cash used for development stage activities:
Depreciation 134 53 187
Changes in liabilities-
Accrued liabilities 41,682 6,768 48,450
----------- ----------- ------------
Net cash used for development
stage activities (8,525) (383) (8,908)
----------- ----------- ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Organization costs (44,535) (6,768) (51,303)
Payments for construction in progress (6,276) -0- (6,276)
Purchase of equipment (935) -0- (935)
----------- ----------- ------------
Net cash used for investing activities (51,746) (6,768) (58,514)
----------- ----------- ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from the sale of common stock 188,250 -0- 188,250
Purchase of treasury stock (2,250) (4,550) (6,800)
----------- ----------- ------------
Net cash provided by (used for)
financing activities 186,000 (4,550) 181,450
----------- ----------- ------------
NET INCREASE (DECREASE) IN CASH 125,729 (11,701) 114,028
CASH, AT BEGINNING OF PERIOD -0- 125,729 -0-
----------- ----------- ------------
CASH, AT END OF PERIOD $ 125,729 $ 114,028 $ 114,028
=========== =========== ============
</TABLE>
See accompanying notes and acc ountant's report.
-5-
<PAGE>
RBP MEATS, INC.
(A DEVELOPMENT STAGE CORPORATION)
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 1998 AND DECEMBER 31, 1997
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
NATURE OF BUSINESS
RBP Meats, Inc. (the "Company") is a development stage corporation in the
process of developing plans for constructing and operating a United States
Department of Agriculture-Hazard Analysis and Critical Control Points
("USDA-HACCP") inspected and approved meat processing facility. The Company
will process beef, pork, ratites (ostrich and emu), and other alternative
livestock. The Company was incorporated in the State of Florida in January
1997, and its principal place of business is currently located in
Crestview, Florida. The Company's processing facility will be located near
the City of Marianna, Florida.
ACCOUNTING ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenue and expenses
during the reporting period. Actual results could differ significantly from
those estimates.
CASH AND CASH EQUIVALENTS
For purposes of the statement of cash flows, the Company considers all cash
deposits and highly liquid investments with original maturity dates of
three months or less to be cash equivalents.
PROPERTY AND DEPRECIATION
Property and equipment is recorded at cost. Depreciation of property and
equipment is calculated using the straight line method over the estimated
useful lives of the assets.
Estimated useful lives are generally as follows:
Office equipment 5 years
Machinery and equipment 10 years
ORGANIZATION COSTS
Organization costs consist of costs incurred by the Company relevant to
establishing operations. Costs will be amortized over five years once
principal operations are initiated.
-6-
<PAGE>
RBP MEATS, INC.
(A DEVELOPMENT STAGE CORPORATION)
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 1998 AND DECEMBER 31, 1997
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
INCOME TAXES
Income taxes are provided for the tax effects of transactions reported in
the financial statements and consist of taxes currently due plus deferred
tax assets or liabilities based on taxable effects of certain temporary
differences. Temporary differences are differences between the book and tax
bases of assets and liabilities and their reported amounts in the financial
statements that will result in taxable or deductible amounts in future
years when the reported amounts of the assets or liabilities are recovered
or settled, respectively.
NOTE 2 - DEVELOPMENT STAGE ACTIVITIES
As a development stage corporation, the Company is devoting substantially
all of its efforts to establishing its business. Those activities consist
of raising capital, designing and constructing a facility for its
operations, and developing a business plan. Planned principal operations
have not yet begun.
NOTE 3 - INCOME TAXES
Deferred taxes are classified as current or noncurrent, depending on the
classification of the assets and liabilities to which they relate. As of
March 31, 1998 and December 31, 1997, the Company has recognized a deferred
tax asset of $10,300. Since the Company has not yet begun operations, and
it is uncertain whether the Company will realize the benefit of the
deferred tax asset in the foreseeable future, the Company has recorded a
valuation allowance equal to the deferred tax asset. Temporary differences
giving rise to the deferred tax asset relate to differences in the
recognition of expenses for development stage activities for financial and
tax reporting.
The Company has a net operating loss carryforward of approximately $3,150
which is available to offset future taxable income. The loss carryforward
expires in 2017.
NOTE 4 - COMMON STOCK
The Company is authorized to issue a total of 100,000 shares of no par
common stock with a stated value of $50 per share. Shares will be sold
through direct sales by the issuer without using an underwriter. Shares
held by any stockholder may not be resold or transferred to another person
unless such shares are first offered to the Company and then to the
remaining stockholders. The price at which the shares will be purchased is
the book value of the shares at the time of the resale. As a result of a
stock offering (see Note 7), the Company issued 3,765 shares of stock, and
as of March 31, 1998 and December 31, 1997, 3,629 and 3,720 shares were
outstanding, respectively.
-6-
(Sheet II)
<PAGE>
RBP MEATS, INC.
(A DEVELOPMENT STAGE CORPORATION)
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 1998 AND DECEMBER 31, 1997
NOTE 5 - EARNINGS PER SHARE
Basic earnings per share are computed by dividing the net loss by the
weighted average number of common shares outstanding during the period.
Diluted earnings per share are calculated using per share amounts that
would have resulted if dilutive potential common stock had been converted
to common stock. During the period from inception to March 31, 1998 and
December 31, 1997 the Company accrued directors' compensation (See Note 6)
that is to be paid through issuance of common stock. This method of payment
results in potential common stock of approximately 960 and 820 shares,
respectively. Since the Company is reporting an operating loss, the effect
of the conversion is antidilutive; therefore, diluted earnings per share is
the same as basic earnings per share.
NOTE 6 - RELATED PARTY TRANSACTIONS
The Company's Board of Directors and corporate officers are to be
compensated with common stock for the services and out-of-pocket expenses
incurred during the development stage. Compensation is calculated by the
number of hours spent at a rate of $20 per hour. Amounts accrued as
compensation to directors as of March 31, 1998 and December 31, 1997 under
this agreement were $47,837 and $41,069 respectively.
Two stockholders of the corporation provide accounting and legal services
to the Company. Transactions with these related parties approximated $300
and $30,500 for the quarter ended March 31, 1998 and for the period from
inception to December 31, 1997, respectively. There were no outstanding
related payables as of March 31, 1998 and December 31, 1997.
NOTE 7 - COMMITMENTS AND CONTINGENCIES
ECONOMIC DEPENDENCY
The viability of the Company is dependent upon attracting and retaining
entrepreneurs interested in investing in this type business. The Company's
success also depends on establishing a sufficient network of suppliers of
marketable livestock to sustain its operations.
PLANT DEVELOPMENT
The Company is committed to constructing a meat processing facility in
which to carry out its business. While the project is still in the planning
stages, the estimated cost of acquiring the property and constructing and
equipping the facility is $1,775,000.
BROKERAGE AGREEMENT
On September 30, 1997, the Company entered into a "Capital Funding
Brokerage Agreement" with Prime Mortgage Company ("Prime") in order to
secure the additional financing to build and equip the meat processing
facility. According to the terms of the agreement, if the Company secures a
loan transaction as a result of Prime's efforts, then the Company must pay
5% of the total committed loan proceeds plus out-of-pocket expenses if the
annual percentage rate of the loan is 6% or less, and 2.5% of the total
committed loan proceeds plus out-of-pocket expenses if the annual
percentage rate of the loan is over 6%.
-6-
(Sheet III)
<PAGE>
RBP MEATS, INC.
(A DEVELOPMENT STAGE CORPORATION)
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 1998 AND DECEMBER 31, 1997
NOTE 7 - COMMITMENTS AND CONTINGENCIES (CONTINUED)
CONCENTRATION OF CREDIT RISK
Financial instruments which potentially expose the Company to
concentrations of credit risk consist of temporary cash deposits. Cash in
banks exceeded the federally insured limit by $14,578 and $26,114 as of
March 31, 1998 and December 31, 1997, respectively.
UNASSERTED CLAIMS AND ASSESSMENTS
The Company filed its registration with the Securities and Exchange
Commission ("SEC") on March 18, 1997, and as of the date of the financial
statements, has not yet received approval of the registration. Pursuant to
Section 5 of the Securities Act of 1933, no stock is to be sold prior to
receiving an "effective date" issued by the SEC. The Company sold stock to
the general public from March 1997 to August 1997. The Florida Division of
Securities conducted an investigation of the Company. As a result of the
investigation, the Company is required to provide full disclosure of the
investigation to the stockholders and offer a refund of their investment.
As of March 31, 1998 and December 31, 1997, $6,800 and $2,250,
respectively, has been returned to investors and recorded by the Company as
treasury stock.
NOTE 8 - SUBSEQUENT EVENTS
In April 1998, the board of directors approved a resolution that authorizes
the Company to pay a bonus to officers and directors who guarantee
corporate debt instruments used to obtain start-up financing for the
Company. The aggregate bonus will be $200,000 divided equally between the
officers and directors who guarantee the loans. The bonus will be paid no
later than five years from commencement of the processing facility and may
be paid in one lump sum or several smaller payments at the discretion of
the board of directors.
Subsequent to the date of the balance sheet, the City Commission of the
City of Marianna, Florida (the "City") approved the sale of approximately
17 1/2 acres of lanD to the Company for $2,000 per acre. The purchase is
contingent upon the Company obtaining adequate financing to cover the cost
of the property and approval of the registration with the SEC. It is also
contingent upon the City providing a paved road, water, sewer, and natural
gas to the site, and the area being confirmed as an industrial park. The
City's acceptance of the sale also stipulates that the land will revert
back to the City if the Company has not commenced construction of the
proposed facility within one year of the conveyance and completed
construction within one year from the date of its commencement.
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(Sheet IV)
