SECURITIES AND EXCHANGE COMMISSION
Washington, D C. 20549
FORM 10K
[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
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 For the transition period from _________ to
____________
Commission File No. 001-14889
-----------------------------
INTERNET FOOD COMPANY, INC.
---------------------------
(Exact name of Registrant as specified in its charter)
NEVADA 88-0390657
------ ----------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
631-A Cass Street, Suite 181, Monterey, California 93940
- -------------------------------------------------- -----
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (831) 647-8553
Securities registered pursuant to Section 12(b) of the Act:
None
----
Securities registered pursuant to Section 12 (g) of the Act:
Common Stock, $.001 par value
-----------------------------
Indicate by check mark whether the registrant (l) 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 registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. [X] Yes [ ] No
lndicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K (Section 229.405 of this chapter) is not contained herein, and
will not be contained, to the best of registrant's knowledge, in definitive
proxy or information statements incorporated by reference in Part III of this
Form 10-K or any amendment to this Form 10-K. [X]
As of March, 1996, there is no aggregate market value of the voting stock held
by non-affiliates of the registrant.
<PAGE>
Indicate the number of shares outstanding of each of the registrant's classes of
common stock, as of the latest practicable date.
Class Outstanding as of December 31, 1999
----- -----------------------------------
$0.001 Par Value, Common Stock 17,780,695 Shares
PART I
ITEM 1. Description of Business.
The Company is a development stage Company. The Company was incorporated in
Nevada on April 14, 1998 with authorized capital of ten million shares of common
stock, par value $0.001 per share. On July 23, 1998, the Company amended its
Articles of Incorporation to increase its authorized capital to fifty million
shares of common stock, par value $0.001 per share. As of December 31, 1999,
there were 17,780,695 shares of $0.001 Par Value Common Stock outstanding.
On August 10, 1998, the Company commenced an offering under Rule 504 of
Regulation D. This offering was for 1,200,000 shares of the Company's $0.001 par
value common stock at an offering price of $0.10 per share, for a total offering
of $120,000. The Company's officers and directors offered and sold the shares
and no commissions were paid. Proceeds from the offering were used for working
capital, inventory, consulting sales fees, product development, advertising and
labeling. The offering was completed with all shares being sold and issued for a
total of $120,000 less offering costs of $30,000 being received by the Company.
January 1 - March 31, 1999: Consumer purchasing of the Company's products
has continued to grow along with growth of Internet sales, for the year ending
1998.
April 1, 1999 - June, 1999: The Company began soliciting major hotels and
businesses for employee and customer promotions. During this period, the Company
completed its Internet site (http://www.calcheese.com/index.html) and began
using the site to educate consumers. The Company also created a Cheese of the
Month Club (http://www.calcheese.com/cheeseclub.html)
November - December 31, 1999: The Company's business is seasonal in nature.
During the holiday period, the Company shipped baskets from call-in orders,
hotel and motel orders, as well as Internet orders. The Company hosted a booth
at the San Francisco Fancy Food Show where significant new business
relationships were established.
ITEM 2. Description of Property
The Company maintains its sales office and inventories at its corporate
headquarters (631-A Cass Street, Suite 181, Monterey, California 93940). The
Company leases these premises and owns no real property. It does not have any
other properties.
ITEM 3. Legal Proceedings.
None.
<PAGE>
ITEM 4. Submission of Matters to a Vote of Security Holders.
None.
PART II
ITEM 5. Market for Registrant's Common Equity and Related Stockholders Matters.
None.
ITEM 6. Management's Discussion and Analysis of Financial Condition and Results
of Operation.
During the Year, the Company's financial condition was impacted by a
decline in revenues and total assets resulting, in part, from difficulties in
implementing its e-commerce website. The Company has received revenues of
$16,991 for the year ending December 31, 1999. This was a decrease of $8,800
from the year ending December 31, 1998. The Company hopes to reverse the revenue
trend following full implementation of the e-commerce site. At present, the
Company's major sources of liquidity include its cash, inventory, and accounts
receivable. The Company is in the process of applying for an SBA loan in the
amount of $100,000 to fund continued operations.
No material commitments for capital expenditures were made during the year.
There is no research and development underway or planned. Currently, the Company
knows of no events that will cause a material change in costs or revenues.
The Company plans to expand its market share by attending trade shows to
exhibit the products.
The Company's e-commerce problems negatively impacted reported income and
operations. Consumer purchases of products over the Internet have increased this
year and the Company forecasts increases in the coming years. With the increase
in consumer purchases, it will have a favorable impact on net sales and revenues
for the Company.
The Company has been a development stage company for the past 16 months
and, therefore, has not felt the effects of inflation. The primary concern
involves the price of milk. Should prices increase, the Company will have to
increase its cost of sales.
ITEM 7. Financial Statements and Supplementary Data.
INTERNET FOOD COMPANY, INC.
BALANCE SHEET
December 31, 1999 and 1998
<TABLE>
<CAPTION>
1999 1998
---- ----
<S> <C> <C>
Current assets
Cash and cash equivalents $ 572 $ 1,959
Accounts receivable-trade 416 2,135
Accounts receivable-barter 1,329 4,441
Accounts receivable-Home Web 100
Inventory 891 4,905
Total current assets 3,308 13,440
Equipment 550 700
Other assets
Trade name 6,050 6,050
Total assets $ 9,908 $ 20,190
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Bank overdraft $ 0 806
Accounts payable 2,630 13,814
Note payable-R. Strahl 2,650 2,500
Note payable-APC, Inc 0 3,000
Note payable-Internet Finance.Com 1,000
Note payable-Montery Ventures 9,113
Note payable-Richard Strahl 0 9,990
State corporate tax payable 400 800
Total current liabilities 15,793 30,910
Shareholders' equity
Capital stock, par value $ .10, 50,000,000 authorized
17,780,695 shares issued and outstanding 1,778,070 1,616,770
Paid in capital (1,645,670) (1,552,070)
Common stock offering costs (6,150) (6,150)
Retained earnings (132,135) (69,270)
Total shareholders' equity (5,885) (10,720)
Total liabilities and shareholders' equity $ 9,908 20,190
</TABLE>
See accompanying notes to the financial statements
<PAGE>
INTERNET FOOD COMPANY, INC.
STATEMENT OF SHAREHOLDERS'EQUITY
December 31, 1999
<TABLE>
<CAPTION>
Common Stock Paid in Offering Retained
Shares Amount Capital Costs Earnings
------ ------ ------- ----- --------
<S> <C> <C> <C> <C> <C>
Balance,
December 31, 1998 16,167,695 $ 1,616,770 $ (1,552,070) $ (6,150) $ (69,270)
Options issued 1,040,000 104,000 (93,600)
Stock issued 573,000 57,300
Net loss, for the period (62,865)
17,780,695 $ 1,778,070 $ (1,645,670) (6,150) $ (132,135)
</TABLE>
See accompanying notes and accountant's review report
<PAGE>
INTERNET FOOD COMPANY, INC.
STATEMENT OF OPERATIONS
For years ending December 31, 1999 and 1998 1998
<TABLE>
<CAPTION>
1999 1998
---- ----
<S> <C> <C>
Sales $ 16,991 $ 25,797
Cost of sales
Beginning invnetory 4,905 0
Purchases 7,069 22,967
Supplies 543 2,913
Total costs available 12,517 25,880
(Less) ending inventory (891) (4,905)
Total cost of goods sold 11,626 20,975
Gross profit 5,365 4,822
Operating expenses
Advertising 1,156 2,219
Bank charges 671 140
Consulting fees 26,946 15,036
Dues and subscriptions 842 5,512
Depreciation 150 0
Equipment lease 2,937 862
License and permits 456 80
Management fees 6,500 0
Miscellaneous 0 962
Office expense 1,203 3,346
Postage and delivery 1,977 6,842
Professional fees 12,885 0
Rent 6,900 3,625
Travel and entertainment 2,316 419
Telephone 1,332 1,119
Organizational and start up costs 33,031
Total operating expenses 66,271 73,193
Loss from operations (60,906) (68,371)
Other income and (expense)
Interest expense (660) (200)
Loss on sale of investments (499) 0
(1,159) (200)
Loss prior to income taxes (62,065) (68,571)
State corporate income tax 800 800
Net loss $ (62,865) $ (69,371)
Loss per common share $ ($0.0039) $ (0.0044)
Weighted average
of shares outstanding 16140289 15,710,539
</TABLE>
See accompanying notes to financial statements
<PAGE>
INTERNET FOOD COMPANY, INC.
STATEMENT OF CASH FLOWS - INDIRECT METHOD
For years ending December 31, 1999 and 1998
<TABLE>
<CAPTION>
<S> <C> <C>
Cash flows from operating activities
Net loss $ (62,865) $ (69,270)
Adjustments to reconcile net income to net cash
provided by operating activities
Depreciation 150
(increase) Decrease in current assets 8,746 (11,481)
Increase (Decrease) in current liabilities (15,793) 30,910
Net cash provided by operating activities (69,762) (49,841)
Investing activities
Purchase of equipment 700
Trade name 6,050
Net cash used in investing activities 0 6,750
Financing activities
Sale of common stock 67,700 64,700
Common stock issuance costs (6,150)
Short term borrowings 10,113
Repayment of short term borrowings (9,438)
Cash provided by financing activities 68,375 58,550
Increase (Decrease) in cash and cash equivalents (1,387) 1,959
Cash and cash equivalent at beginning of the year 1,959 0
Cash and cash equivalent at end of the year $ 572 $ 1,959
Supplemental schedule of noncas financing
activities
In 1998 the Company issued 15,385,000 shares of
common stock with a par value of $.10 and a market value
of $.10 for compensation of services. The Company
issued 135,695 shares of common stock with a par value
of $.10 and a market value of $.10 to individuals who
loaned the Company operating capital.
Interest paid during the year $ 660 200
Taxes paid during the year $ 1,200
</TABLE>
See accompanying notes to the financial statements
<PAGE>
INTERNET FOOD COMPANY
NOTES TO THE FINANCIAL STATEMENTS
December 31, 1999 and 1998
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Nature of the business
- ----------------------
Internet Food Company, Inc. was formed to sell retail gourmet and specialty
cheese on the internet and at a retail location. The Company was incorporated
under the laws of the State of Nevada on April 14, 1998. The Company is
currently doing business as California Cheese Connection. Operations did not
commence until July, 1998.
Pervasiveness 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.
Cash and cash equivalents
- -------------------------
For financial statement presentation purposes, the Company considers all short
term investments with a maturity date of three months or less to be cash
equivalents.
Inventories
- -----------
Inventories are recorded at the lower of cost or market, using the first-in,
first-out method. Inventories consist principally of cheeses and specialty food
items.
Bad debts and accounts receivable
- ---------------------------------
No allowance for doubtful accounts has been recorded as management believes all
amounts to be fully collectible.
<PAGE>
Equipment
- ---------
Equipment is recorded at cost. Maintenance and repairs are expensed as incurred;
major renewals and betterments are capitalized. As the equipment on the balance
sheet was purchased at year-end, a provision for depreciation is made in the
current year of $150. There was no provision for depreciation during 1998.
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 taxes
related primarily to differences between the recorded book basis and tax basis
of assets and liabilities for financial and income tax reporting. The deferred
tax assets and liabilities represent the future tax return consequences of those
differences, which will either be taxable or deductible when the assets and
liabilities are recovered or settled. Deferred taxes are also recognized for
operating losses that are available to offset future taxable income and tax
credits that are available to offset future federal income taxes.
NOTE 2: ACCOUNTS RECEIVABLE
Accounts receivable
- -------------------
Trade Accounts receivable trade consists primarily of sales to hotels and
corporations purchasing gift baskets. At December 31, 1999 and 1998 the total
was $416 and $2,135 respectively. Terms of all sales are net 30 days.
Accounts receivable-Barter
- --------------------------
The Company is involved with an exchange group whereby goods and services are
bartered. The individual members of this group purchase goods from another
member and a voucher is written for payment of the goods or services provided.
The Company then has a credit to purchase goods and services from other members
of the barter group. At December 31, 1999 the balance that the Company is owed
in goods and services was $1,329. The Company uses the barter to purchase goods
and services. For the period ending December 31, 1999 the total amount recorded
as sales was $ 5,000 and $8,111 was recorded as purchase of goods and services.
For the period ending December 31, 1998 the total amount recorded as sales was $
8,573 and $ 4,132 was recorded as purchase of inventory.
<PAGE>
NOTE 3: NOTES PAYABLE
The notes payable are from shareholders of the Company. The notes are for
working capital until the Company becomes profitable. The notes will be repaid
from operations when there is sufficient working capital. Interest is being
charged at 1% a month. Total amount of borrowings for the period ended December
31, 1999 was $ 10,113. The Company paid off prior year borrowings of $ 9,438. .
Total amount of borrowings for the period ended December 31, 1998 were $15,490.
NOTE 4: COMMON STOCK
Common stock
- ------------
During the period ended December 31, 1999 and December 31, 1998, pursuant to an
exemption under Rule 504 of Regulation D of the Securities Act of 1933, as
amended (the Act), the Company sold solely to accredited and/or sophisticated
investors, its common stock. Each share has a par value of $.10. There were
twenty different transactions to different investors raising a total of $ 67,700
during the year period ended December 31, 1999 and thirty nine transactions to
different investors raising a total of $ 64,700 during the year period ended
December 31, 1998.
Paid in capital
- ---------------
At incorporation the Company issued 15,385,000 shares of common stock with a
fair value of $0.1 in payment of services. This amount is shown as a negative
paid in capital amount since consideration was given in the form of services at
the time of incorporation and no amount was reflected on the Companys books for
the consideration.
The Company also issued 135,695 shares of common stock with a fair value of $.10
to three individuals. The shares were given to these individuals for advancing
the Company money for working capital purposes. These transactions occurred
during the prior year.
<PAGE>
NOTE 5: RELATED PARTY TRANSACTIONS
On August 1, 1998 the Company entered into an agreement with a shareholder to
provide investment-banking services. During the period ending December 31, 1999
the shareholder advanced the Company $10,133 for operations. There were no
repayments on the advances.
As previously discussed, the Company entered into agreements with some of its
shareholders to provide bridge loans for continuing operations of the Company.
Total proceeds from the borrowings were $ 15,490 during the prior year. The
Company repaid $9,438 of the loans during the period ending December 31, 1999.
Various shareholders of the Company have performed consulting services for which
the Company has paid them consulting fees. For the period ending December 31,
1999 this amount paid to the shareholders amounted to $ 22,946. Services include
clerical support, rent, office supplies etc. Total amount paid the company for
these services was $ 21,237 for the period ending December 31, 1998.
NOTE 6: INCOME TAXES
The benefit for income taxes from operations consisted of the following
components. Current tax benefit of $20,000 resulting from a net loss before
income taxes, and deferred tax expense $20,000 resulting from the valuation
allowance recorded against the deferred tax asset resulting from the net
operating loss. The change in the valuation allowance for the period ending
December 31, 1999 was $20,000. Net operating loss carryforward will expire 2014.
The valuation allowance will be evaluated at the end of each year, considering
positive and negative evidence about whether the asset will be realized. At the
time the allowance will either be increased or reduced; Reduction could result
in the complete elimination of the allowance if positive evidence indicates that
the value of the deferred tax asset is no longer required. It is managements
position that the deferred tax asset be recorded when there is positive evidence
it will be realized.
<PAGE>
NOTE 7: STOCK OPTIONS
On January 1, 1999 and January 28, 1999 the Board of Directors voted to issue
stock options to various individuals. The options are to be exercised at a price
of $.01 per share. There were a total of 1,040,000 options to be exercised. All
options were exercised by the due date. The options were granted for services
rendered.
NOTE 8: GOING CONCERN
As of December 31, 1999, the Company has net losses since inception, which
raises substantial doubt about its ability to continue as a going concern.
Management has subsequently been able to get its internet site up and running.
This is expected to provide additional sales. Also, management has stepped up
its efforts to increase its sales to hotels and other businesses.
The Companys ability to continue as a going concern is dependent upon successful
public offering and ultimately achieving profitable operations. There is no
assurance that the Company will be successful in its efforts to raise additional
proceeds or achieve profitable operations. The financial statements do not
include any adjustments that might result from the outcome of this uncertainty.
<PAGE>
ITEM 8. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure.
None.
PART III
ITEM 9. Directors, Executive Officers, Promoters and Control Persons.
The management of the Company is committed to producing strong and diverse
financial results, concentrating on increasing sales revenues and profits.
<TABLE>
<CAPTION>
Name Position
- ---- --------
<S> <C>
Janice M. Demianew President, Chairperson of the Board of Directors
Diane Button Secretary, Treasurer, Director
Melissa DeAnzo Director
</TABLE>
Directors are elected for one-year terms at the annual stockholders meeting.
The following is a biographical summary of the experience of the directors and
officers of the Company:
Janice M. Demianew, 52, is the President, Chief Executive Officer and Chair
of the board of directors. From September, 1998 to present, she has been
Director of Administration for Themiis, Inc. Previously, Ms. Deminanew was
operations manager for Monterey Ventures, Inc., an investment banking firm from
March, 1997 to September, 1998. She has more than 20 years of experience in the
legal field, having worked as legal assistant/secretary for sole practitioners
and law firms such as Brobeck, Phleger & Harrison in San Francisco and San
Diego.
Diane Button, 50, is the Secretary, Treasurer, and a Director of the
Company and has been since October, 1998. Prior to joining the Company, she held
the position of vice president of California Seasons, Inc. in its commercial and
wholesale division (April, 1997 - October, 1998). In such capacity, Ms. Button
established the policies and procedures for the wholesale distribution of the
company's gourmet and specialty foods products. From September, 1989 to March,
1997, Ms. Button worked for the Viad Corp. (formerly, the Dial Corp) in the law,
tax, and shareholders' services department. She was primarily responsible for
communications with shareholders, registered representatives and transfer
agents.
Melissa DeAnzo, 36, is a director of the Company. From 1993 until present,
Ms. DeAnzo has been a consultant who specializes in providing bookkeeping,
accounts receivable, and accounts payable services. She also provides assistance
in audit and tax preparation. Ms. DeAnzo's primary focus is on marketing small
businesses that have needs that would otherwise be more costly for smaller
entrepreneurs. Ms. DeAnzo gained her experience through employment with major
corporations, including Lawrence Paper Company and Household Credit Services.
ITEM 10. Executive Compensation.
None.
ITEM 11. Security Ownership of Certain Beneficial Owners and Management.
As of December 31, 1999, there were 17,780,695 in outstanding shares issued
compared to 16,160,770 that were outstanding as of December 31, 1998.
The following table sets forth, as of December 31, 1999, the beneficial
ownership of the Company's Common Stock by each person known by the Company to
beneficially own more than 5% of the Company's Common Stock, including options,
outstanding as of such date and by the officers and directors of the Company as
a group. Except as otherwise indicated, all shares are owned directly.
<TABLE>
<CAPTION>
(1) (2) (3) (4)
Title Of Class Name And Address Of Amount and Nature Percent
Beneficial Owner of Beneficial Ownership Of Class
<S> <C> <C> <C>
Common Stock Janice M. Demianew 12,025,000 68.0%
809 Bautista Drive
Salinas, CA 93901
Common Stock Diane S. Button 3,150,000 17.7%
430 Casa Verde
Monterey, CA 93940
Common Stock Monterey Ventures 900,695 5.1%
200 Camino Aguajito
Monterey, CA 93940
Common Stock Melissa DeAnzo 90,000 0.5%
26 Anna Street
Salinas, CA 93901
Common Stock Directors and Officers
as a group (3 persons) 15,265,000 86.2%
</TABLE>
<PAGE>
ITEM 12. Certain Relationships and Related Transactions.
None.
ITEM 13. Exhibits, Financial Statement Schedules and Reports on Form 8-K.
None.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
HOME.WEB, INC.
Date: March 31, 2000 /s/ Jan Demianew
- -------------------- ----------------
Jan Demianew, President
