U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-KSB
[X] Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934
For the fiscal year ended December 31, 1999 Commission File No. 333-83125
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the transition period from to .
FIRST GROWTH INVESTORS, INC.
(Name of small business issuer in its charter)
Nevada 87-0569467
State or other jurisdiction of (I.R.S. Employer
incorporation or organization Identification No.)
2508 South 1300 East, Salt Lake City, Utah 84106
(Address of principal executive offices) (zip code)
Issuer's telephone number, including area code: (801) 466-7808
Securities registered under Section 12(b) of the Exchange Act: None
Securities registered under Section 12(g) of the Act: None
Check whether the Issuer (1) has filed all reports required 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 Issuer was required
to file such reports) and (2) has been subject to such filing requirements for
the past 90 days. Yes X No
Check if no disclosure of delinquent filers in response to Item 405 of
Regulation S-B is contained in this form, and no disclosure will be contained,
to the best of the Issuer's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-KSB or any
amendment to this Form 10-KSB. (Not applicable) [ ]
The Issuer's revenues for its most recent fiscal year. $ 87,938.00
As of April 4, 2000, the aggregate market value of voting stock held by
non-affiliates was approximately $100,000.
The number of shares outstanding of the Issuer's common stock at December 31,
1999: 2,000,000
<PAGE>
PART I
ITEM 1. DESCRIPTION OF BUSINESS
(A) BUSINESS DEVELOPMENT.
First Growth Investors, Inc. (the "Company") was incorporated under the
laws of the State of Nevada on September 9, 1997. In connection with the
organization, the founders contributed $5,050 cash to initially capitalize
First Growth Investors in exchange for 1,750,000 shares of common stock.
On October 15, 1997, First Growth Investors commenced a public offering
of up to 250,000 shares of its common stock, in reliance upon Rule 504 of
Regulation D, promulgated by the U.S. Securities & Exchange Commission under
the Securities Act of 1933. The offering closed in November, 1997. We sold
250,000 shares of common stock, at $.20 per share, and raised gross proceeds
of $50,000 increasing the total issued and outstanding common stock to
2,000,000 shares.
The Company then registered a public offering of its securities. First
Growth Investors declared a distribution of 1,000,000 common stock purchase
warrants to shareholders of record as of September 30, 1999. The Company
filed with the Securities and Exchange Commission a registration statement on
Form SB-2, Commission File No. 333-83125, which became effective October 8,
1999. Pursuant thereto the Company then distributed 1,000,000 warrants. The
warrants are exercisable at $1.00 per share, on or before June 30, 2002.
(B) BUSINESS OF COMPANY.
First Growth Investors was formed to take advantage of what management
believes is a money making opportunity that can be realized through buying,
selling and investing in select vintages of wines. The philosophy is simple;
buy California's and France's premier red wines when they are first released
and hold them for investment, appreciation and later resale, then sell the
wines after a 12 to 24 month period. It is anticipated, but we cannot assure,
that the appreciation of the wines will be greatest within this period. We
will then take any proceeds from investment, roll it over, and reinvest in the
next release of the wines.
First Growth Investors purchases the actual wines directly from
suppliers rather than purchasing futures contracts, and will not be purchasing
futures contracts. Management is aware of companies that supply wines for
various purposes including investment, from which First Growth Investors
acquires the wines it holds for investment. These companies conduct research
regarding the world's top wines and will provide educated recommendations to
management about the specific wines that can be purchased for investment and
are likely to appreciate in value over time. These companies buy and sell
wines held for investment from collectors and charge a commission of 10% to
15% for the services. They also typically provide for a fee suitable
temperature controlled storage facilities in which to keep the wines while
they age.
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To date, First Growth Investors has purchased and sold all its wine
investments through Nevada Wine Company, using the brokerage and other
services provided by that company. Nevada Wine Company is not affiliated with
First Growth Investors or its principals. Nevada Wine Company is a six year
old Las Vegas based company that supplies wine for many large and small
businesses and also sells many of the world's finest wines to collectors or to
others who just want a good bottle of wine to drink. These wines range from
good inexpensive wine to wines worth hundreds of dollars.
In November, 1997, First Growth Investors used the proceeds of its
recently completed offering to purchase several vintages of investment grade
wines. These were all sold during the first quarter of 1999. In July and
August of 1999, First Growth Investors reinvested the amounts received or to
be received from the initial sales in other vintages of investment grade
wines, which it is still holding.
The following table shows the wine investments First Growth Investors
has purchased and sold so far.
Qty Description Price Sale Price Profit
198 1994 Opus One 17,014.14 25,740.00 8,725.86
60 1994 Caymus Special Select 6,330.00 9,540.00 3,210.00
48 1994 Joseph Phelps Insignia 3,036.00 4,320.00 1,284.00
1 1994 Dalle Valle Maya 287.50 400.00 112.50
84 1994 Caymus Special Select 9,240.00 13,356.00 4,116.00
3 1993 Beringer Reserve 3.0 1 1,035.00 1,200.00 165.00
10 Turley Zinfandel & Petite 920.00 1,350.00 430.00
24 1994 Silverado Cabernet 1,440.00 1,728.00 288.00
126 1994 Robert Mondavi Res. Ca 7,560.00 10,080.00 2,520.00
36 1994 Opus One 3,105.00 4,680.00 1,575.00
24 1994 Hartwell 3,120.00 3,744.00 624.00
276 1990 Dom Perignon 35,880.00 Holding
174 1990 Dom Perignon 22,620.00 Holding
Wine investing, or using wines as an investment vehicle, is based on the
principle of aging. Some wines are believed by professional connoisseurs to
benefit from the aging process. As a result, these wines have the potential
to become more valuable with the passage of time. Most investment grade wines
are red wines, because white wines generally do not benefit from aging. Aging
allows a fine red wine, on the other hand, to develop distinctive traits which
are highly valued by connoisseurs. As a result of this aging process, the
vintages of wines that are sought after as investment grade wines may increase
several times in value as they are aged over a period of years, especially if
the wines achieve a "First Growth" or top ranked classification as they are
aged.
There is absolutely no assurance that First Growth Investors will be
successful in this venture. Management has no prior experience in this
business or industry and will have to rely on the advice
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<PAGE>
of others. However,
the initial purchase of wines, an investment costing about $50,000.00, was
subsequently sold for an amount which generated a gross profit in excess of
$20,000. Management believes that any additional funds that may be received
from exercise of warrants can similarly be used to increase the amounts of
purchases or investments First Growth Investors can make.
ITEM 2. PROPERTIES
First Growth Investors has no office facilities and does not presently
anticipate the need to lease commercial office space or facilities, but for
the time being uses the address of the President as the business address. We
may lease commercial office facilities at such time in the future as our
operations have developed to the point where the facilities are needed, but we
have no commitments or arrangements for any facilities, and there is no
assurance regarding the future availability of commercial office facilities or
terms on which we may be able to lease facilities in the future, nor any
assurance regarding length of time the present arrangement may continue. In
connection with the purchase of an inventory of wines to hold for investment
and resale, First Growth Investors has leased from third parties or otherwise
paid for the use of temperature controlled or otherwise suitable storage
facilities for the wines.
ITEM 3. LEGAL PROCEEDINGS.
The Company is not a party to any material pending legal proceedings
and, to the best of its knowledge, no action has been threatened by or against
the Company.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
No matter was submitted to a vote of security holders through the
solicitation of proxies or otherwise during the fourth quarter of the fiscal
year covered by this report.
PART II
ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.
(A) MARKET INFORMATION.
The Company's initial public offering was not closed until late
November, 1997. The Common Stock of the Company did not begin until October,
1998 to be quoted on the Electronic Bulletin Board maintained by the National
Association of Securities Dealers, Inc. Our common stock is quoted under the
symbol FGIV, but has not been traded in the over-the-counter market except on
a very limited and sporadic basis. The only bid quotation has been $.40. The
following sets forth high and low bid price quotations for each calendar
quarter during the last two fiscal years that trading occurred or quotations
were available. Such quotations reflect inter-dealer prices, without retail
mark-up, mark-down or commission and may not represent actual transactions.
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Quarter Ended High Low
March 31, 1998 (No shares traded)
June 30, 1998
September 30, 1998
December 31, 1998 $.40 $.40
March 31, 1999 $.40 $.40
June 30, 1999 $.40 $.40
September 30, 1999 $.40 $.40
December 31, 1999 $.40 $.40
(B) HOLDERS.
As of April 4, 2000, there were about 44 record holders of the Company's
Common Stock.
(C) DIVIDENDS.
First Growth Investors has not previously paid any cash dividends on
common stock and does not anticipate or contemplate paying dividends on common
stock in the foreseeable future. Our present intention is to utilize all
available funds for the development of our business. The only restrictions
that limit the ability to pay dividends on common equity or that are likely to
do so in the future, are those restrictions imposed by law. Under Nevada
corporate law, no dividends or other distributions may be made which would
render a company insolvent or reduce assets to less than the sum of
liabilities plus the amount needed to satisfy outstanding liquidation
preferences.
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.
PLAN OF OPERATIONS.
Management's plan of operation for the next twelve months is to continue
using existing capital and any funds from exercise of warrants in this
offering to acquire another inventory of select wines to hold for investment
and resale, and also to provide general working capital during the next twelve
months. Under this plan of operations First Growth Investors has no specific
capital commitments and the timing of capital expenditures will depend upon
the receipt of additional funds from warrant exercise or elsewhere, none of
which is assured. Cash flows will also depend upon the timing of sale of the
wines, which is also not assured, and receipt of the proceeds from these
sales. We have not determined how long existing capital can satisfy any cash
requirements, but we do not presently anticipate that we will have to raise
additional funds within the next twelve months. While we do not anticipate
any need to raise additional capital, we believe First Growth Investors will
have the opportunity to invest whatever additional funds may be received from
the exercise of warrants in purchasing additional vintages of investment grade
wines. We do not anticipate any capital commitments for product research and
development or significant purchases of plant or equipment, or any change in
the number of employees.
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Initially, we purchased eleven different vintages of investment grade
wines at a cost of $54,588. During the first quarter of 1999, we sold these
wines for $76,138. We made these purchases, and all purchases to date, from
non affiliated third parties. We did not purchase any of the inventory from,
or sell any of the inventory to, persons affiliated with First Growth
Investors.
ITEM 7. FINANCIAL STATEMENTS.
See attached Financial Statements and Schedules.
ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
There are not and have not been any disagreements between the Company
and their accountants on any matter of accounting principles or practices or
financial statement disclosure.
PART III
ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
(A) IDENTIFY DIRECTORS AND EXECUTIVE OFFICERS.
The following table sets forth the sole director and executive officer
of the Company, her age, and all offices and positions with the Company. A
director is elected for a period of one year and thereafter serves until her
successor is duly elected by the stockholders and qualifies. Officers and
other employees serve at the will of the Board of Directors.
<TABLE>
<S> <C> <C>
Term Served As Positions
Name of Director Age Director/Officer With Company
Pam Jowett 46 Since inception President &
Secretary/Treasurer
</TABLE>
A brief description of her background and business experience is as
follows:
PAM JOWETT serves as President, Secretary/Treasurer and Director of the
Company. Ms. Jowett has been self employed for many years as a nail
technician in the beauty industry. Ms. Jowett has no prior experience in the
business of buying, selling and investing in wines, and will have to rely on
the advice of other persons on the purchase of suitable wines.
The director holds no directorships in any other company subject to the
reporting requirements of the Securities Exchange Act of 1934.
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(B) IDENTIFY SIGNIFICANT EMPLOYEES.
None other than the person previously identified.
(C) FAMILY RELATIONSHIPS.
None
(D) INVOLVEMENT IN CERTAIN LEGAL PROCEEDINGS.
Except as described herein, no present officer or director of the
Company; 1) has had any petition filed, within the past five years, in Federal
Bankruptcy or state insolvency proceedings on such person's behalf or on
behalf of any entity of which such person was an officer or general partner
within two years of filing; or 2) has been convicted in a criminal proceeding
within the past five years or is currently a named subject of a pending
criminal proceeding; or 3) has been the subject, within the past five years,
of any order, judgment, decree or finding (not subsequently reversed,
suspended or vacated) of any court or regulatory authority involving violation
of securities or commodities laws, or barring, suspending, enjoining or
limiting any activity relating to securities, commodities or other business
practice.
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT The Issuer is not subject
to Section 16(a).
ITEM 10. EXECUTIVE COMPENSATION.
The Company has not paid any cash compensation to its executive officer
to date.
COMPENSATION OF DIRECTORS None
EMPLOYMENT CONTRACTS AND TERMINATION OF EMPLOYMENT AND CHANGE-IN-CONTROL
ARRANGEMENTS
The Company has not entered into any contracts or arrangements with any
named executive officer which would provide such individual with a form of
compensation resulting from such individual's resignation, retirement or any
other termination of such executive officer's employment with the Company or
its subsidiary, or from a change-in-control of the Company or a change in the
named executive officer's responsibilities following a change-in-control.
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
The following table contains stock ownership information about officers
or directors, and other stockholders who we know to be beneficial owners of
more that 5% of our stock. A beneficial owner of stock is any person who has
or shares the power to decide how to vote or whether to dispose of the stock.
7
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<TABLE>
<S> <C> <C> <C>
Title of Amount & Nature of % of
Name and Address Class Beneficial Ownership Class
Pam Jowett Common 1,575,000 shares 79%
2508 S. 1300 E.
SLC, UT 84106
Lynn Dixon Common 175,000 shares 9%
311 S. State, #460
SLC, UT 84111
All officers and Common 1,575,000 shares 79%
directors as a
group (1 person)
</TABLE>
The foregoing amounts include all shares these persons are deemed to
beneficially own regardless of the form of ownership. See "Certain
Transactions."
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
The Company has entered into certain transactions with officers,
directors or affiliates of the Company which include the following:
In connection with our organization, initial stockholders paid an
aggregate of $5,050 cash to purchase 1,750,000 shares of Common Stock at a
price of $.0029 per share.
Except as disclosed in this item, in notes to the financial statements
or elsewhere in this report, the Company is not aware of any indebtedness or
other transaction in which the amount involved exceeds $60,000 between the
Company and any officer, director, nominee for director, or 5% or greater
beneficial owner of the Company or an immediate family member of such person;
nor any relationship in which a director or nominee for director of the
Company was also an officer, director, nominee for director, greater than 10%
equity owner, partner, or member of any firm or other entity which received
from or paid the Company, for property or services, amounts exceeding 5% of
the gross annual revenues or total assets of the Company or such other firm or
entity.
PART IV
ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K.
(A) EXHIBITS to this report are all documents previously filed which
are incorporated herein as exhibits to this report by reference to
registration statements and other reports previously filed by the Company
pursuant to the Securities Act of 1933 and the Securities Exchange Act of
1934.
(B) REPORTS ON FORM 8-K have not been filed during the last quarter of
the fiscal year ended December 31, 1999.
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SIGNATURES
In accordance with Section 12 of the Securities Exchange Act of 1934, the
registrant caused this registration statement to be signed on its behalf by
the undersigned, thereunto duly authorized.
FIRST GROWTH INVESTORS, INC.
By: /s/ Pam Jowett Date: April 4, 2000
Pam Jowett, President and Secretary/Treasurer
Chief Executive Officer and
Chief Financial Officer
In accordance with the Exchange Act, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and the
dates indicated.
By: /s/ Pam Jowett Date: April 4, 2000
Pam Jowett, President and Secretary/Treasurer
Chief Executive Officer and
Chief Financial Officer
<PAGE>
Supplemental Information to be Furnished With Reports Filed Pursuant to
Section 15(d) of the Exchange Act by Non Reporting Issuers
No annual report or proxy statement has been sent to security holders.
<PAGE>
FIRST GROWTH INVESTORS, INC.
(A Development Stage Company)
FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998
WITH
INDEPENDENT AUDITOR'S REPORT
<PAGE>
FIRST GROWTH INVESTORS, INC.
(A Development Stage Company)
CONTENTS
PAGE
Independent Auditor's Report 1
Balance Sheets 2
Statements of Operations 3
Statement of Stockholders' Equity 4
Statements of Cash Flows 5
Notes to Financial Statements 6-7
<PAGE>
Independent Auditor's Report
Board of Directors
FIRST GROWTH INVESTORS, INC.
Salt Lake City, Utah
I have audited the accompanying balance sheets of First Growth
Investors, Inc. (A development stage company) as of December 31, 1999
and 1998 and the related statements of operations, stockholders' equity
and cash flows for the years then ended and from inception (September 9,
1997) to December 31, 1999. These financial statements are the
responsibility of the Company's management. My responsibility is to
express an opinion on the financial statements based on my audits.
I conducted my audits in accordance with generally accepted auditing
standards. Those standards require that I plan and perform the audit to
obtain reasonable assurance about whether the financial statements are
free of material misstatements. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating
the overall financial statement presentation. I believe that my audits
provide a reasonable basis for my opinion.
In my opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of First Growth
Investors, Inc. (A development stage company) as of December 31, 1999
and 1998, and the results of its operations and its cash flows for the
years then ended and from Inception (September 9, 1997) to December 31,
1998 in conformity with generally accepted accounting principles.
As discussed in Note 1 to the financial statements under organization
costs, the Company in 1999 changed it method of accounting for the costs
of organizing the Company.
Salt Lake City, Utah
March 27, 1998
<PAGE>
FIRST GROWTH INVESTORS, INC.
(A Development Stage Company)
BALANCE SHEETS
ASSETS
December 31, December 31,
1999 1998
CURRENT ASSETS:
Cash in bank $10,703 $1,234
Deferred costs - warrants registration 14,476 0
Inventory 45,500 54,588
________________________
Total Current Assets 70,679 55,822
___________ ____________
OTHER ASSETS:
Organization costs, net of amortization of 0 750
$-0- and $250 ___________ ____________
Total Other Assets 0 750
___________ ____________
TOTAL ASSETS $70,679 $56,572
=========== ============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $0 $0
Accrued interest payable 70 0
Income tax payable 1,905 0
Stockholder loan payable 3,000 0
Short term advance 6,100 11,000
___________ ____________
Total Current Liabilities 11,075 11,000
___________ ____________
STOCKHOLDERS' EQUITY:
Preferred stock; $.001 par value, 1,000,000 shares
authorized, no shares issued and outstanding 0 0
Common Stock; $.001 par value, 24,000,000 shares
authorized 2,000,000 shares issued and outstanding 2,000 2,000
Capital in excess of par value 47,362 47,362
Earnings (deficit) accumulated during the 10,242 (3,790)
development stage ___________ ____________
Total Stockholders' Equity 59,604 45,572
___________ ____________
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $70,679 $56,572
=========== ============
The accompanying notes are an integral part of these financial statements.
2
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FIRST GROWTH INVESTORS, INC.
(A Development Stage Company)
STATEMENTS OF OPERATIONS
Earnings
(Deficit)
For The For The Accumulated
Year Ended Year Ended During The
December 31, December 31, Development
1999 1998 Stage
REVENUE:
Sales $87,938 $0 $87,938
Costs of goods sold (70,268) 0 (70,268)
_________ _________ ___________
Gross profit 17,670 0 17,670
_________ _________ ___________
EXPENSES:
Professional fees 718 975 2,693
Fees and licenses 195 221 1,586
Amortization expense 0 200 250
_________ _________ ___________
913 1,396 4,529
_________ _________ ___________
INCOME (LOSS) FROM OPERATIONS 16,757 (1,396) 13,141
OTHER INCOME (EXPENSE)
Other income 0 1,000 1,000
Interest expense (70) (1,044) (1,244)
_________ _________ ___________
NET INCOME BEFORE INCOME TAXES 16,687 (1,440) 12,897
Provision for income taxes (1,905) 0 (1,905)
_________ _____________________
NET INCOME (LOSS) BEFORE CUMULATIVE
EFFECT OF ACCOUNTING CHANGE 14,782 (1,440) 10,992
Cumulative effect of accounting change (750) 0 (750)
for organization costs _________ _____________________
NET INCOME (LOSS) $14,032 $(1,440) $10,242
========= ========= ===========
EARNINGS (LOSS) PER SHARE BEFORE
ACCOUNTING CHANGE $0.01 $0.00 $0.01
========= ========= ===========
CUMULATIVE EFFECT OF ACCOUNTING CHANGE $0.00 $0.00 $0.00
========= ========= ===========
EARNINGS (LOSS) PER SHARE $0.01 $0.00 $0.01
========= ========= ===========
The accompanying notes are an integral part of these financial statements.
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FIRST GROWTH INVESTORS, INC.
(A Development Stage Company)
STATEMENT OF STOCKHOLDERS' EQUITY
Earnings
(Deficit)
Accumulated
Capital in During the
Common Stock Excess of Development
Shares Amount Par Value Stage
BALANCE, September 9, 1997 (inception) 0 $0 $0 $0
Shares issued to initial stockholders
for cash, September 18, 1997 at 1,750,000 1,750 3,300 0
approximately $.0029 per share
Shares issued upon completion of offering
of stock to the public at $.20 per 250,000 250 49,750 0
share, November 1997
Direct costs of the offering of common 0 0 (5,688) 0
stock to the public
Net income (loss) from September 9, 1997
(inception) to December 31, 1997 0 0 0 (2,350)
__________________________________
BALANCE, December 31, 1997 2,000,000 2,000 47,362 (2,350)
Net income (loss) for the year ended 0 0 0 (1,440)
December 31, 1998 __________________________________
BALANCE, December 31, 1998 2,000,000 2,000 47,362 (3,790)
Net income (loss) for the year ended 0 0 0 14,032
December 31, 1999 __________________________________
BALANCE, December 31, 1999 2,000,000$2,000 $47,362 $10,242
==================================
The accompanying notes are an integral part of these financial statements.
4
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FIRST GROWTH INVESTORS, INC.
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
Earnings
(Deficit)
For The For The Accumulated
Year Ended Year Ended During The
December 31, December 31, Development
1999 1998 Stage
CASH FLOWS FROM OPERATING ACTIVITIES:
Sales $87,938 $0 $87,938
Organization costs 0 0 (1,000)
Cash paid for inventory and related costs (61,110) 0 (115,698)
Cash paid to suppliers and others (913) (836) (3,289)
Cash paid for interest (70) (914) (984)
__________ ___________ ____________
Cash Flows (Used) by Operating 25,845 (1,750) (33,033)
Activities __________ ___________ ____________
CASH FLOW FROM INVESTING ACTIVITIES: 0 0 0
__________ ___________ ____________
CASH FLOWS FROM FINANCING ACTIVITIES:
Stockholder loan 3,000 0 3,000
Sale of common stock 0 0 55,050
Direct costs of common stock sale 0 (4,006) (5,688)
Direct costs of warrants registration (14,476) 0 (14,476)
Proceeds from short term advance and loan 6,100 11,000 27,100
Loan payment (11,000) (10,250) (21,250)
__________ ___________ ____________
Cash Flows Provided (Used) by (16,376) (3,256) 43,736
Financing Activities __________ ___________ ____________
NET INCREASE (DECREASE) IN CASH 9,469 (5,006) 10,703
CASH - BEGINNING OF PERIOD 1,234 6,240 0
__________ ___________ ____________
CASH - END OF PERIOD $10,703 $1,234 $10,703
========== =========== ============
RECONCILIATION OF NET INCOME(LOSS) TO NET
CASH PROVIDED(USED) BY OPERATING ACTIVITIES
NET INCOME (LOSS) $14,032 $(1,440) $10,242
__________ ___________ ____________
Adjustment to reconcile net income (loss)
to net cash provided(used) by operating
activities
Amortization of organization costs 0 200 250
Cumulative change in accounting principle 750 0 750
Changes in assets and liabilities
(Increase)decrease in inventory 9,088 0 (45,500)
Decrease in prepaid expenses 0 500 0
(Increase)in organization costs 0 0 (1,000)
(Decrease)in accounts payable 0 (880) 0
Increase(decrease) in accrued interest 70 (130) 70
Increase in income tax payable 1,905 0 1,905
Increase in note payable 0 0 250
__________ ___________ ____________
Total Adjustments 11,813 (310) (43,275)
__________ ___________ ____________
NET CASH PROVIDED(USED) BY OPERATING $25,845 $ (1,750) $ (33,033)
ACTIVITIES ========== =========== ============
The accompanying notes are an integral part of these financial statements.
5
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FIRST GROWTH INVESTORS, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization - The Company was organized under the laws of the
State of Nevada on September 9, 1997 and has elected a fiscal year
end of December 31st. The Company was formed for the purpose of
engaging in any lawful business practice. The Company has acquired
an inventory of select wines to hold for investment and resale.
The Company is considered a development stage company as defined
in SFAS No. 7. The Company, has at the present time, not paid any
dividends and any dividends that may be paid in the future will
depend upon the financial requirements of the Company and other
relevant factors.
Net Earnings Per Share - The computation of net income (loss)
per share of common stock is based on the weighted average number
of shares outstanding during the period presented.
Organization Costs - The Company was amortizing its organization
costs, which reflect amounts expended to organize the Company,
over sixty (60) months using the straight-line method. In 1998,
the Accounting Standards Executive Committee (AcSEC) of the
American Institute of Certified Public Accountants issued
Statement of Position (SOP) 98-5, "Reporting on the Costs of
Start-up Activities." The SOP requires costs of start-up
activities and organization cost to be expensed as incurred.
During 1999, the Company adopted the SOP and recognized a charge
for the cumulative effect of accounting change of $750.
Income Taxes - Income tax expenses includes federal and state
taxes currently payable and deferred taxes arising from temporary
differences between income for financial reporting and income tax
purposes.
Cash and Cash Equivalents - For purposes of the statement of
cash flows, the Company considers all highly liquid debt
instruments purchased with a maturity of three months or less to
be cash equivalents. At December 31, 1999 and 1998 the Company did
not have non-cash investing and financing activities.
Use of 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 revenues and expenses
during the reporting period. Actual results could differ from
those estimates.
Inventory - Inventory consists of finished product purchased
for resale and is stated at the lower of cost determined by the
FIFO Method or Market.
NOTE 2 - COMMON STOCK TRANSACTIONS
The Company on September 18, 1997 sold 1,750,000 shares of common
stock to initial stockholders at approximately $.0029 per share
for $5,050.
During November 1997, the Company completed an offering of its
common stock wherein it sold shares of the Company's common stock
to the public at $.20 per share for a total of $50,000. Direct
costs of the offering were $5,688.
6
<PAGE>
FIRST GROWTH INVESTORS, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
NOTE 2 - COMMON STOCK TRANSACTIONS - CONTINUED
The Company, has completed a registration of common stock warrants
during 1999. The cost of registering the warrants was $ 14,476
and is shown on the balance sheet as a deferred cost. At December
31, 1999, the Company had outstanding warrants to purchase
1,000,000 shares of the Company's common stock, at $1.00 per
share. The warrants are exercisable prior to June 30, 2002. At
December 31, 1999, none of the warrants had been exercised.
NOTE 3 - RELATED PARTY TRANSACTIONS
An officer of the Company is providing a mailing address to the
Company without charge. This service has been determined by the
Company to have only nominal value. As of December 31, 1999 and
1998 no compensation has been paid or accrued to any officers or
directors of the Corporation.
NOTE 4 - INCOME TAXES
At December 31, 1999, the Company had income taxes payable of
$1,905 with no deferred taxes payable. At December 31, 1998, the
Company had no current or deferred income taxes due to an
operating loss for the year. Prior to 1999, the Company had net
operating losses (NOL) of $3,790 which were carried forward to
offset 1999 operating income. Use of the NOL carryover reduced
inome tax expense by $569.
NOTE 5 - NOTE PAYABLE AND SHORT TERM ADVANCES
During 1999, a business advance $6,100 to the Company. The
advance was unsecured and non interest bearing and was repaid in
February of 2000. Also during 1999, a stockholder has advance
$3,000 to the Company on an unsecured basis. The loan is due upon
demand and carries interest at 10% per annum.
On November 30, 1998, the Company borrowed $11,000 from a business
on a short term non interest bearing advance. The advance was
repaid January 22, 1999.
7
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF FIRST GROWTH INVESTORS, INC. AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> DEC-31-1999
<CASH> 10,703
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 45,500
<CURRENT-ASSETS> 70,679
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 70,679
<CURRENT-LIABILITIES> 11,075
<BONDS> 0
0
0
<COMMON> 2,000
<OTHER-SE> 47,362
<TOTAL-LIABILITY-AND-EQUITY> 70,679
<SALES> 87,938
<TOTAL-REVENUES> 87,938
<CGS> 70,268
<TOTAL-COSTS> 70,268
<OTHER-EXPENSES> 913
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 70
<INCOME-PRETAX> 16,687
<INCOME-TAX> 1,905
<INCOME-CONTINUING> 14,782
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 750
<NET-INCOME> 14,032
<EPS-BASIC> .01
<EPS-DILUTED> 0
</TABLE>
