<PAGE>
GOURMET GIFTS, INC.
FORM 10-SB
TABLE OF CONTENTS
PART I
Page
Item 1. Description of Business 3
Item 2. Management's Discussion and Analysis or Plan of Operation 4
Item 3. Description of Property 6
Item 4. Security Ownership of Certain Beneficial Owners
and Management 6
Item 5. Directors, Executive Officers, Promoters
and Control Persons.........................................7
Item 6. Executive Compensation......................................8
Item 7. Certain Relationships and Related Transactions..............8
Item 8. Description of Securities...................................8
PART II
Item 1. Market Price of and Dividends on the Registrant's
Common Equity and other Shareholder Matters.................9
Item 2. Legal Proceedings...........................................9
Item 3. Changes in and Disagreements with Accountants...............9
Item 4. Recent Sales of Unregistered Securities.....................9
Item 5. Indemnification of Directors and Officers..................10
PART F/S
Financial Statements.......................................11
PART III
Item 1. Index to Exhibits..........................................11
Signatures.................................................12
<PAGE>
PART I
Item 1. Description of Business
General
Gourmet Gifts, Inc., a Nevada corporation (the "Company"), was originally
organized in Nevada on September 24, 1997, to engage in the catalog retail gift
business with the emphasis on the food and beverage area. On September 30, 1997,
the Company sold shares of it's common stock, par value $0.001 (the "Common
Stock") to certain investors to raise capital to fund it's proposed business
plan. Between August 25, 1998 and September 30, 1998, through the sale of the
shares of Common Stock, the Company raised $32,300 to fund the initial operation
of the Company.
The Company plans on a catalog to market unique "gourmet gifts" with a
seasonal theme or emphasis. These gifts may include foods such as fruits,
pastries, steaks, candies, nuts and other seasonal items targeting the various
holidays. In addition the Company plans to offer a variety of wines, liquors,
micro-brew beers and other libations if permits can be obtained. The Company is
also exploring the possibility of marketing prepaid certificates to
restaurants.
The Company plans on offering it's own products as well as products
manufactured by food and beverage companies that are consistent with theme of
the Company's name and it's business objective. It's only proprietary products
are already developed. The Company therefore does not foresee any of it's
resources being spent on product development.
The Company offered two products in it's first season, The "Coffee Lovers"
gift box offers truffles, biscotti, coffee and logo mugs. The "Champagne
Lovers" box includes champagne, flutes, truffles and flowers. Both boxes are
beautifully wrapped, presented and sell for $95 including delivery.
The industry is a growing and highly competitive industry. The size of the
industry is difficult to define because there are many new entries into the
market. Many catalogs offer some food products and some companies only offer a
limited number of specialty products on a seasonal basis. There are many giants
in the industry such as Harry and Davids and Hickory Farms as well as local and
regional companies that may offer only limited product lines such as Godiva
chocolates. The Company is offering a limited number of products each season
and will choose from items that are unique and personalized. The Company plans
on building a database of food and wine enthusiasts by purchasing lists of
subscribers to magazines such as Gourmet and Food and Wine. The Company
anticipates testing various products and will offer those products that produce
the greatest results in addition to adding new products as necessary. The
Company is currently exploring the possibility of establishing a web site to
market nationally but is currently focusing it's initial efforts in the areas
of Reno-Tahoe and Las Vegas, Nevada.
<PAGE>
During the 1998 holiday season the Company sold it's products through the
use of fold over brochures and filers. The flyer was mailed to personal contacts
of the Company's officers in addition to 1,500 other prospects including but not
limited to Realtors and insurance agents who have a need for client gifts. The
fliers have narrative descriptions of the items offered. The orders were either
mailed or hand delivered by the Company to it's customers.
Government Regulation
The Company may encounter some material regulation that would pertain to
the sale of alcoholic beverages. The company is observing all local laws and may
be prohibited from shipping some products to certain states or countries. The
Company is currently relying upon the various suppliers to abide by any such
regulations and the Company is familiarizing itself with such regulations.
Year 2000 Computer Problem
The year 2000, or Y2K problem concerns potential failure of certain
software to correctly process information because of the software's inability to
calculate dates. The Company is not currently dependent upon a computer to
handle it's marketing and fulfillment of orders and does not anticipate any Y2K
problems.
Employees
The Company relies on it's officers to handle all activities. The Company
will not hire outside employees until order fulfillment becomes a problem. At
such time the Company will hire appropriate personnel as need dictates and
finances allow. The Company has paid salary to Mr. Phelps, the Company's
president and Ms. Miller the Company's secretary/treasurer to handle the
marketing, procurement and fulfillment of orders. The Company currently has no
collective bargaining agreements and no other labor related problems. There are
currently no benefits being paid and the Company will pay employee benefits as
revenues allow.
Offices
The Company operates from the residence of it's president Mr. Phelps at no
cost to the Company until such a time when a larger facility is needed.
Item 2. Management's Discussion and Analysis or Plan of Operation
The Company was formed in September, 1997 to engage in the business of
catalog retail gift business with the emphasis on the food and beverage area.
The Company needed operating capital to effectively execute it's proposed
business plan. The Company engaged in an offering through the sale of it's
shares of common stock raising $32,300. The funds have been used to purchase
inventory and advertise the product. The Company generated revenue in the amount
of $6,428.51 during the 1998 Christmas Holiday Season however the Company
remains unprofitable and will need to increase the revenues in order to remain
in business.
<PAGE>
The following discussion and analysis should be read in conjunction with
the Company's Financial Statements and Notes thereto and other financial
information included elsewhere in this Form 10-SB. The character and holdings of
the Company has changed substantially since the preceding fiscal year. Since the
first quarter of the current fiscal year, the Company has sought to enter into
the business of selling gift items and packages of gourmet gifts under it's
private label. This is the primary business and focus of the Company. Readers of
the current unaudited statements are referred to the Company's annual Report as
filed for the fiscal year ending September 30, 1998, for a more in-depth view of
the Company's financial position, results of operations and changes in cash
flows. Accordingly, management's discussion as set forth below focuses primarily
on the quarter ending March 31, 1999.
Plan Of Operation
The Company will attempt to enter a highly competitive industry dominated
by established large national corporations. To effectively do so it must use
its' limited financial resources wisely. It is the intent of the Company to keep
costs to a minimum during it's initial operations and try to identify those
products that the market will accept. Towards this end the Company will target
only select holidays for production and sales of it's products. The Company will
not hire outside employees until sales justify doing so. The Company will depend
to a large extent on it's president Johne Phelps and it's secretary/treasurer
Lorrie Miller to generate business through marketing and mailings. The Company
is looking to upcoming seasonal gift sales such as Mother's Day and Father's Day
and fliers are currently being created for targeting the early holiday shopper.
Liquidity and Capital Resources
During the six months ending March 31, 1999, the Company's working capital
decreased by approximately $17,113. The Company may not have sufficient capital
in it's accounts, to continue it's planned operations. The Company is continuing
to pursue working capital and additional revenue through existing and new
clients, but there is no assurance that any of the planned activities will be
successful.
The Company may need to raise additional capital to meet it's current
obligations and fund the operating losses. The management of the Company may
seek additional private financing from outside parties to continue to pursue the
business activities for the Company. Though the obtaining of the additional
capital is not guaranteed, the management of the Company believes it will be
able to obtain the capital required to meet it's current obligations and pursue
it's business activities.
Result of the Operations
The Company has been unprofitable since it's inception in 1997. In the
previous year ending September 30, 1998, the Company sought and raised capital
to enter into the business of selling gourmet gift items to the retail and
wholesale market. During the quarter ending March 31, 1999, the company has been
negotiating with other businesses and existing clients to sell it's products on
a retail or wholesale level to continue it's business activities.
Until such time as the Company is able to obtain the revenues needed from
it's operations to meet it's obligations, the Company will be dependent upon
sources other than operating revenues to meet its operating and capital needs.
Operating revenues may never satisfy these needs
<PAGE>
The current market the Company operates under is a very competitive market
and there exists many other competitors with greater capital and contacts in the
industry seeking the same clients. The Company believes it will obtain a certain
percentage of such clients to generate the revenues needed to continue it's
business plan. Until then, the Company will need additional capital other than
that provided through it's operations.
Item 3. Description of Property
The Company does not own any real property. The Company is operating from
the residence of it's president Mr. Phelps at no cost to the Company until such
a time when a larger facility is needed.
Item 4. Security Ownership of Certain Beneficial Owners and Management
The following table set forth the number of shares of the Company as of
March 31, 1999, the outstanding Common Stock of the Company owned of record or
beneficially by each Officer and Director and by each person who owned of
record, or was know by the Company to own beneficially, more than 5% of the
Company's Common Stock, and the shareholdings of each officer and director as a
group.
Title of
Class Name and Address Shares Percent
- ----- ----------------- ------ ------
Common Johne Phelps(1)(2)(3) 50,000 5.8%
253 D"Emerald
Sparks, NV 89434
Common Kim Farran(3) 120,000 13.4%
253 D'Emerald
Sparks, NV 89434
Common Robert Deller (3) 100,000 11.2%
253 D'Emerald
Sparks, NV 89434
Common David Dorton 60,000 6.7%
2441 Tech Center Ct.
Las Vegas, NV 89128
Common Jeff W. Holmes 50,000 5.6%
P.O. Box 11207
Zephyr Cove, NV 89448
Common Stephen J.Nicolatus 60,000 6.7%
856 Peach Canyon Circle
Las Vegas, NV 89134
Common Stanley K. Stilwell 80,000 8.9%
7604 Delaware Bay Drive
Las Vegas, NV 89128
All Officers and Directors
As a Group 270,000 30.1%
(1) An Officer of the Company
(2) A Director of the Company
(3) Restricted Stock
<PAGE>
Item 5. Directors, Executive Officers, Promoters and Control Persons of the
Company
The following table sets forth the name, age and position of each Director
of the Company:
NAME AGE POSITION
Johne Phelps 51 President, Chief Executive
Officer and Director
Lorrie Miller 29 Chief Financial Officer,
Secretary/Treasurer and
Director
Executive Officers and Directors of the Company:
Johne Phelps- President, Chief Executive Officer and Director Mr. Phelps
attended the Utah State University in Logan, Utah from 1966-1973 majoring in
Natural Resource Management and Hopkins Institute in Phoenix, Arizona in 1986
majoring in Marketing and Sales. From 1977-1981 Mr. Phelps was the founder and
owner of Commercial Grounds Maintenance in Salt Lake City, Utah where he built
the second largest maintenance service offered to a variety of commercial
customers including Utah Power and Light, Mountain Bell and several condominium
developments, business parks and shopping centers. In 1981-1989 Mr. Phelps was
president of Inland Oceans, Inc. a Utah based resort development and property
management corporation. In addition to the normal duties of day to day
operations, Mr. Phelps provided guidance and direction for the company. During
his time with Inland Oceans, Inc. Mr. Phelps managed all of the properties for
Transport Insurance Company, oversaw the acquisition of Water Caye (Belize) for
the corporate portfolio, headed the team which prepared the master preliminary
architecture and engineering plans for resident resort development. In addition
he negotiated a complete tax and development concession package with the
government of Belize, managed real estate work out program for Bear lake West
(Bear Lake, Idaho) to satisfy a bankruptcy judgment. The corporation consulted
on several projects worldwide including American Samoa, Australia, French
Polynesia, the United States and for USAID and the Department of Commerce. In
1989-1995, Mr. Phelps became Chief Executive Officer for Meridian Resort
Development in Reno, Nevada where he oversaw the acquisition of options for
several project development sites in the Caribbean. In addition to resort
development work, he spearheaded the concept of development for residential
projects. Majors Bay Resort Project (St. Kitts) is eco-developed using renewable
energy and ecological sensitivity. The project was master planned and the
pre-funding site studies, market analysis and feasibility studies were
completed. Under the direction of Mr. Phelps, the project was actively seeking
funding when Mr. Phelps took a leave of absence. During this period he sat on
the Board of Directors for Pacific Waste Management, Innovative Power
Technologies and Northern Nevada Land Company. From 1995-1996 Mr. Phelps was
general manager for The Brasserie restaurant in Reno, Nevada. He assisted
Chef/Owner Jean Alberti with the daily operations of the restaurant and
marketing. Mr. Phelps developed a new product line for the restaurant to bolster
it's revenues. In this regard, he conceptualized Three Frogs Wine Bar and
Bistro, oversaw the remodel, set up a marketing team, implemented a marketing
program, hired and trained staff. He also reorganized the banquet and catering
and formulated a marketing agenda for that division. During this period, The
Brasserie had increased it's revenues from $30,000 per month to $110,000. When
Jean Alberti left, he found a buyer for the business. In 1996- 1997 Mr. Phelps
became the manager for The Men's Club of Reno in Reno, Nevada. He was originally
hired as an consultant to train the waitstaff and evaluate the kitchen
operations. He set-up and taught waitstaff training classes and completely
reorganized the kitchen. When the owner decided to expand the hours of
operations he was asked to become manager. In this capacity he hired and trained
both staff and entertainers, rewrote the employees manual, prepared job
descriptions and training outlines. In addition to daily operations, he oversaw
the kitchen, organized outside events such as the charity golf tournament, and
helped with marketing and promotions. He worked with both staff and entertainers
to proved the highest possible quality of service and experience for the
customers. In 1997 to current, Mr. Phelps became a independent consultant for
start-up businesses in the resort, club and restaurant sector with focus on
marketing, personnel, policy and compliance.
<PAGE>
Lorrie A. Miller - Chief Financial Officer, Secretary/Treasurer and
Director Ms. Miller graduated from Washoe High School in 1988 and in 1990
received Officer Administration Certification from Truckee Meadows Community
College and was the recipient of the Niel J. Redfield Scholarship and the Reno
Business Women's Scholarship. Ms. Miller is married with two children. Ms.
Miller is currently employed as office manager with NIC since it's formation in
1997. Prior to that she was with Stephen E. Wilson Financial, an insurance
agency as an office manager from 1996-1997. From 1992-1995, Ms. Miller was
employed with the Casmyn Vestor Group. From 1990 to 1992 Ms. Miller was employed
by Truckee Meadows Community College in the Single Parent Re-entry Program. Ms.
Miller has had a home based custom floral and wedding consulting business
providing reception and ceremony decorations, wedding keepsakes, silk bridal
bouquets and complete wedding party flowers and veils.
Item 6. Executive Compensation
Johne Phelps served as President and Chief Executive Officer and Director
of the Company for all of it's fiscal year ended September 30, 1998 without any
compensation. Since the beginning of the new fiscal year to March 31, 1999, Mr.
Phelps has received a total compensation of $10,000.
Lorrie A. Miller has served as Secretary/Treasurer and Director of the
company for all of it's fiscal year ended September 30, 1998 without
compensation. Since the beginning of the new fiscal year to March 31, 1999, Ms.
Miller has received a total compensation of $517.
Options/SAR Grants in Last Fiscal Year
The Company has never granted options or stock appreciation rights.
Bonuses and Deferred Compensation
There are no bonuses or deferred compensation.
Compensation Pursuant to Plans
The Company does not have any compensation or option plans.
Pension Table
Not Applicable.
Other Compensation
None
Compensation of Directors
Currently the only directors of the Company are Johne Phelps and Lorrie A.
Miller who receive no additional compensation for being directors of the
Company.
Termination of Employment and Change of Control Arrangement
The Company does not have an employment contract with Mr. Phelps or Ms.
Miller and it has no obligation to provide compensation to them in the event of
their resignation, retirement or termination. There are presently nor are there
anticipated any agreements regarding change of control of the Company.
Item 7. Certain Relationships and Related Transactions
Not Applicable
Item 8. Description of Securities
Description of Securities
General
The Company is authorized to issue twenty five million shares of capital
stock, par value of $0.001 per share designated as Common Stock. There are
896,000 fully paid and non-assessable shares of Common Stock currently issued
and outstanding as of March 31, 1999.
<PAGE>
Common Stock
The shareholders of Common Stock are entitled to one vote per share on each
matter submitted to a vote at any meeting of shareholders. Shares of Common
Stock do not carry cumulative voting rights and, therefore, a majority of the
shares of outstanding Common Stock will be able to elect the entire Board of
Directors and if they do so, minority shareholders would not be able to elect
any persons to the Board of Directors. The Company's bylaws provide that a
majority of the issued and outstanding shares of the Company constitutes a
quorum for shareholders meetings, except with respect to certain matters for
which a greater percentage quorum is required by statute or the bylaws.
Shareholders of the Company have no pre-emptive rights to acquire
additional shares of Common Stock or other securities. The Common Stock is not
subject to redemption and carries no subscription or conversion rights. In the
event of liquidation of the Company, the shares of Common Stock are entitled to
share equally in corporate assets after satisfaction of all liabilities.
Holders of the Common Stock are entitled to receive such dividends as the
Board of Directors may from time to time declare out of funds legally available
for the payment of dividends. The Company seeks growth and expansion of it's
business through the reinvestment of profits, if any, and does not anticipate
that it will pay dividends in the foreseeable future.
PART II
Item 1. Market Price of and Dividends on the Company's Common Equity and
Other Shareholder Matters.
The Company's Common Stock is currently not quoted or listed for trading
with any exchange or market.
Since it's inception, the Company has not paid any dividends on it's Common
Stock and the Company does not anticipate that it will pay dividends in the
foreseeable future.
As of March 31, 1999, the Company had 896,000 shares of it's Common Stock
issued and outstanding held by approximately 45 shareholders.
Item 2. Legal Proceedings
To the knowledge of the Company's Executive Officers and Directors, the
Company is not a party to any legal proceeding or litigation and none of it's
property is the subject of pending legal proceeding. Further, the Officers and
Directors know of no threatened or contemplated legal proceedings or litigation.
Item 3. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure
None
Item 4. Recent Sales of Unregistered Securities
The Company upon formation issued 100,000 shares to Kim Farran for
consideration of $2,000, 100,000 shares to Robert Deller for consideration of
$2,000 and 50,000 shares to Johne Phelps, the Company's founder and president
for consideration of $1,000. Subsequently, the Company sold 646,000 shares in an
offering under Rule 504 of Regulation D promulgated by the Securities and
Exchange Commission under the power granted in the Securities Act of 1933, as
amended. The Company filed a registration statement on in the State of Nevada
for offers and sales made to Nevada residents. The registration statement was
declared effective on August 25, 1998 by the Nevada Division of Securities.
These sales were made to approximately 45 persons. All sales were made in the
State of Nevada in 1998.
<PAGE>
Item 5. Indemnification of Directors and Officers
The following is a brief summary of certain indemnification provisions of
the Company's Certificate of Incorporation and the Nevada Revised Statutes. This
summary is qualified in it's entirety by reference to the text thereof Section
78.751 of the Nevada Revised Statutes confers on a director or officer an
absolute right to indemnification for expenses, including attorney's fees,
actually and reasonably incurred by him to the extent he is successful on the
merits or otherwise in defense of any action, suit or proceeding. This section
also entitles a director or officer to partial indemnification against expenses
to the extent that he has been successful in defending any claim, issue, or
matter asserted in such proceeding. The Nevada indemnification section further
permits the corporation to indemnify officers and directors in circumstances
where indemnification is not mandated by the statute and certain statutory
standards are satisfied. The Nevada statute expressly makes indemnification
contingent upon a determination that indemnification is proper in the
circumstances. Such determination must be made by the Board of Directors, the
shareholders, or independent legal counsel. Nevada law also permits a
corporation, in its Articles of Incorporation, Bylaws, or an agreement, to pay
attorney's fees and other disposition of the action upon receipt of an
undertaking by or on behalf of the corporate official to repay such expenses to
the corporation if it is ultimately determined that he is not entitled to be
indemnified by the corporation. The corporation may also purchase and maintain
insurance to provide indemnification. The Nevada statute also provides that
indemnification authorized by the statute is not exclusive of, but is in
addition to, indemnification rights granted under a corporation's Articles of
Incorporation, an agreement, or pursuant to a vote of shareholders or
disinterested directors.
The certificate of the Company specifically provides that no director or
officer is personally liable to the Company for damages for breach of fiduciary
duty involving certain acts. The company's Bylaws also contain a provision that
the Company will indemnify the officers and directors for any liability
occurring during the scope of their duties as an officer or director.
It is anticipated that the Company will indemnify its officers and
directors to the full extent permitted by the above reference statute. Insofar
as indemnification for liabilities arising under the Securities Act may be
permitted to directors, officers and controlling persons of the small business
issuer pursuant to the foregoing provisions, or otherwise the small business
issuer has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Securities Act and is therefore unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the small
business issuer of expenses incurred or paid by a director, officer or
controlling person in connection with the securities being registered), the
small business issuer will, unless in the opinion of its counsel the matter has
been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by the company is against
public policy as expressed in the Securities Act and will be governed by the
final adjudication of such issue.
The foregoing discussion of indemnification merely summarizes certain
aspects of indemnification provisions and is limited by reference to Section
78.751 of the Nevada Revised Statutes.
<PAGE>
PART F/S
Financial Statements and Supplemental Data
The Company's audited financial statements, as described below are attached
hereto.
1. Audited financial statements for the years ended September 30, 1998 and
September 30, 1997
- - Independent Auditors' Report
Balance Sheets
Statements of Cash Flows
Statement of Stockholders' Equity
Notes to Financial Statements
Unaudited financial statements June 30, 1998 and December 31, 1997
including:
Balance Sheet
Statement of Operations
Statement of Stockholders Equity
Statement of Cash Flows
Audited financial statements for the time of inception September 24, 1997
to September 30, 1997 including:
Independent Auditor's Report
Balance Sheet
Income Statement
Statement of Cash Flow
Statement of Stockholders' Equity
Notes to Financial Statement
Unaudited financial statements for six months September 30, 1998 to March
31, 1999 including:
Balance Sheets
Statement of Operations
Statement of Cash Flows
Statement of Stockholders' Equity
Unaudited financial statements for the three months ended December 31,
1998 including:
Balance sheets
Statements of Operations
Statements of Cash Flows
Statement of Stockholders' Equity
PART III
INDEX TO EXHIBITS
Exhibit 3.1 Articles of Incorporation
Exhibit 3.2 Bylaws
Exhibit 4.0 Specimen Stock Certificate
Exhibit 27 Financial Data Schedule
<PAGE>
SIGNATURES
In accordance with Section 12 of the Securities and Exchange Act of 1934, the
registrant caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized.
GOURMET GIFTS, INC.
Date: April 23, 1999
By: /s/ Johne Phelps
JOHNE PHELPS, President,
Director and Chief Executive
Officer
<PAGE>
Albright, Persing & Associates, Ltd.
Certified Public Accountants
1025 Ridgeview Dr., Suite 300
Reno, Nevada 89509
Phone (702) 826-5432
FAX (702) 826-5510
INDEPENDENT AUDITORS'S REPORT
To the Shareholders and Board of Directors
Gourmet Gifts, Inc.
We have audited the accompanying balance sheets of Gourmet Gifts, Inc.(a
development stage Company) as of September 30, 1998 and 1997, and the related
statements of income, stockholders equity and cash flow for the year ended
September 30, 1998 and the periods from inception (September 24, 1997) to
September 30, 1998 and 1997. This financial statement is the responsibility of
the Company's management. Our responsibility is to express an opinion on this
financial statement based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. 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.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statement referred to above presents fairly,
in all material respects, the financial position of Gourmet Gifts, Inc. (a
development stage Company) as of September 30, 1998 and 1997, and the results
of its operations and its cash flow for the year ended September 30, 1998 and
the period from inception (September 24, 1997) to September 30, 1998 and 1997,
in conformity with generally accepted accounting principles.
/s/ Albright Persing & Associates, Ltd
Reno, Nevada
November 18, 1998
<PAGE>
GOURMET GIFTS, INC.
Balance Sheets
ASSETS
September 30, September 30,
1998 1997
------------- -------------
Current Assets $ 32,080 $ 5,000
Cash - -
------------- -------------
Total Assets $ 32,080 $ 5,000
============= =============
LIABILITIES AND STOCKHOLDER'S EQUITY
Current Liabilities
Accounts payable $ 2,315 $ -
------------- -------------
Total Current Liabilities $ 2,315 $ -
------------- -------------
Stockholders' Equity
Common stock par value $.001
authorized 25,000,000 shares,
issued and outstanding 896,000
and 250,000 shares at September
30, 1998 and 1997, respectively 896 250
Additional paid-in-capital 30,189 4,750
(Loss) accumulated during the development
stage (1,320) -
------------- -------------
Total Stockholders' Equity 29,765 5,000
------------- -------------
Total Liabilities and Stockholders'
Equity $ 32,080 $ 5,000
============= =============
The accompanying notes are an integral part of these financial statements
<PAGE>
<TABLE>
Gourmet Gifts, Inc.
(A Development Stage Company)
Income Statements
For the Year Ended September 30, 1998 and
From Inception (September 24, 1997) to September 30, 1998 and 1997
(See Independent Auditors' Report)
<CAPTION>
Inception to Inception to
September 30, September 30, September 30,
1998 1997 1998
------------ ------------- ------------
<S> <C> <C> <C>
Net Sales $ - $ - $ -
------------ ------------- ------------
Cost of Goods Sold - - -
------------ ------------- ------------
Gross Profits - - -
------------ ------------- ------------
Costs and expenses
Outside services 200 - 200
Professional services 500 - 500
Licenses and fees 455 - 455
Bank service charges 165 - 165
------------ ------------- ------------
1,320 - 1,320
------------ ------------- ------------
Net (loss) Before Income Taxes (1,320) - (1,320)
------------ ------------- ------------
Income Taxes (Note 4) - - -
------------ ------------- ------------
Net (Loss) $ (1,320) $ - $ (1,320)
============ ============= ============
Earnings Per Common Share-Basic and Diluted
Loss from continuing operations
before extraordinary items $ (.01) $ (.00) $ (.01)
============ ============= ============
Net Loss $ (.01) $ (.00) $ (.01)
============ ============= ============
Weighted average shares used
in computing basic and
diluted share data 251,770 250,000 251,741
============ ============= ============
</TABLE>
The accompanying notes are an integral part of these financial statements
<PAGE>
<TABLE>
Gourmet Gifts, Inc.
Statement of Cash Flow
For the Year Ended September 30, 1998 and
From Inception (September 24, 1997) to September 30, 1998 and 1997
(See Independent Auditors' Report)
<CAPTION>
Inception to Inception to
September 30, September 30, September 30,
1998 1997 1998
------------ ------------ -------------
<S> <C> <C> <C>
Cash Flows from Operating Activities:
Continuing operation
Net (loss) $ (1,320) $ - $ (1,320)
Increase in account payable 700 - 700
------------ ------------ -------------
Cash from Operating
Activities (620) - (620)
------------ ------------ -------------
Cash flows from Financing Activities:
Stock issued for cash 32,300 5,000 37,300
Deferred offering costs paid (4,600) - (4,600)
------------ ------------ -------------
Cash Provided by Financing
Activities 27,700 5,000 32,700
------------ ------------ -------------
Net change in cash 27,080 5,000 32,080
Cash at beginning of period 5,000 - -
------------ ------------ -------------
Cash at end of period $ 32,080 $ 5,000 $ 32,080
============ ============ =============
SUPPLEMENTAL DISCLOSURES
Amount Paid for interest $ - $ - $ -
============ ============ =============
Amount paid for income taxes $ - $ - $ -
============ ============ =============
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
<TABLE>
GOURMET GIFTS, INC.
STATEMENT OF STOCKHOLDERS EQUITY
FOR THE YEAR ENDED SEPTEMBER 30, 1998 AND
FROM INCEPTION (September 24, 1997) TO SEPTEMBER 30, 1998 AND 1997
(See Independent Auditors' Report)
<CAPTION>
Deficit
Accumulated
Common Stock Additional During the
------------------- Paid-in Development
Shares Amount Capital Stage Total
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Issuance of shares of common stock
for cash 250,000 $ 250 $ 4,750 $ - $ 5,000
Net loss for the period from
inception (September 24, 1997)
to September 30, 1997 - - - - -
-------- -------- -------- -------- --------
Balance-September 30, 1997 250,000 250 4,750 - 5,000
Issuance of shares of common stock
for cash in exempt public
offering, net of offering
costs of $6,215 646,000 646 25,439 - 26,085
Net loss for the year ended
September 30, 1998 - - - (1,320) (1,320)
-------- -------- -------- --------- -------
Balance-September 30, 1998 $ 896,000 $ 896 $ 30,189 $ (1,320) $29,765
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
GOURMET GIFTS, INC.
(A DEVELOPMENT STATE COMPANY)
NOTES TO FINANCIAL STATEMENTS
FROM INCEPTION (September 24, 1997) TO SEPTEMBER 30, 1998
(See Independent Auditor's Report)
NOTE 1- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND BUSINESS ACTIVITY
This summary of significant accounting policies of Gourmet Gifts, Inc.(the
Company) is presented to assist in understanding the Company's financial
statements. The financial statements and notes are representations of the
Company's management, which is responsible for their integrity and objectivity.
These accounting policies conform to generally accepted accounting principles
and have been consistently applied in the preparation of the financial
statements.
Business Activity
The Company, a Nevada corporation located in Reno, Nevada was incorporated
on September 24, 1997 and is currently in the development stage. The company
intends to be in the business of catalogue gift foods sales.
Accounting Method
The Company's financial statements are prepared using the accrual method
of accounting. Net (Loss) per Share
In February, 1997, the Financial Accounting Standards Board issued SFAS
No.128, Earnings per Share. SFAS No 128 simplifies the standards for computing
earnings per share ("EPS") and was effective for financial statements issued
for periods ending after December 15, 1997, with earlier application not per-
mitted. Upon adoption, all prior EPS data was reinstated.
Basic EPS is determined using net income divided by the weighted average
shares outstanding during the period. Diluted EPS is computed by dividing net
income by the weighted average shares outstanding, assuming all dilutive
potential common shares were issued.
Since the Company has no common shares that are potentially issuable, such
as stock options, convertible preferred stock, and warrants, basic and diluted
earnings per share are the same.
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 for purposed of the
statement of cash flows.
Income Taxes
Effective from inception Gourmet Gifts, Inc. adopted SFAS No. 109,
"Accounting for Income Taxes," which requires a liability approach to financial
accounting and reporting for income taxes. The differences between the finan-
cial statement and tax bases of assets and liabilities is determined annually.
Deferred income tax assets and liabilities are computed for those differences
that have future tax consequences using the currently enacted tax laws and rates
that apply to the period in which they are expected to affect taxable income.
Valuation allowances are established, if necessary, to reduce deferred tax
asset accounts to the amounts that will more likely than not be realized.
income tax expense is the current tax payable or refundable for the period,
plus or minus the net change in the deferred tax asset and liability accounts.
Comprehensive Income
In June, 1997, the Financial Accounting Standards Board issued SFAS No.
130, Reporting Comprehensive Income. SFAS No. 130 establishes standards for
reporting and presentation of comprehensive income and its components in a full
set of general-purpose financial statements. This statement does not, however,
require a specific format for the disclosure, but requires the Company to
display an amount representing total comprehensive income for the period in its
financial statements. Comprehensive income is determined by adjusting net income
by other items not included as a component of net income, such as the unrealized
loss on marketable securities. The company will be required to implement SFAS
No. 130 for its fiscal year beginning in October, 1998.
<PAGE>
Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires the Company to make estimates and
assumptions that affect (1) the reported amounts of assets and liabilities, (2)
disclosure of contingent assets and liabilities at the date of the financial
statements, and (3) reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
NOTE 2- DEVELOPMENT STAGE COMPANY
The Company is a development state company as defined in Financial
Accounting Standards Board Statement No. 7. It has been in the development stage
since its formation on September 24, 1997, and has yet to commence full-scale
operations. From inception through the date of these financial statements the
Company has incurred a net loss of $1,320. At the current time, the Company has
$32,080 in assets and $2,315 in liabilities.
NOTE 3- CONSIDERATIONS RELATED TO CONTINUED EXISTENCE
The Company has just commenced operations using funds raised through the
issuance of equity. The Company has yet to prove that it can operate profitably.
Should the Company fail to meet its sales projections, it is likely that the
Company will have need for additional financing. There can be no assurance that
the Company will be able to obtain additional funding, and if available, that
the Company will obtain the funding on favorable or affordable terms.
Ultimately, the Company will need to achieve profitable operations in order
to continue as a going concern.
NOTE 4- INCOME TAXES
Deferred income taxes arise from temporary differences resulting from
income and expense items reported for financial accounting and tax purposes in
different periods. Deferred taxes are classified as current or noncurrent,
depending on the classification of the assets and liabilities to which they
relate. Deferred taxes arising from temporary differences that are not related
to an asset or liability are classified as current or noncurrent depending on
the periods in which the temporary differences are expected to reverse.
Amounts for deferred tax assets are as follows:
Inception Through
September 30, September 30,
1998 1998 1997
------------- ------ -----
Deferred tax asset, net of valuation
allowance of $449 in 1998 and 1997 $ - $ - $ -
============= ====== =====
The following temporary differences gave rise to the deferred tax asset at
September 30, 1998 and 1997:
Year Ended Inception Through
September 30, September 30,
1998 1998 1997
------------- ------ -------
Tax benefit of net operating loss
carry forward $ 449 $ 449 $ -
Valuation allowance for judgment of
realizability of net operating loss
carry forward in future years (449) (449) -
Because the Company has not generated taxable income since its inception,
no provision for income taxes has been made. The Company can carry forward
$1,320 in net operating losses as follows:
Year Ended
September 30, $ 1,320
------------ ========
2013
NOTE 5- COMMON STOCK
During the period ended September 30, 1998, the Company commenced a private
offering, exempt from registration requirements under Rule 504 of Regulation D,
of 1,000,000 shares of common stock at $.05 per share. A total of 646,000 shares
were purchased, resulting in proceeds to the Company of 426,085, net of offering
costs of $6,215.
<PAGE>
GOURMET GIFTS, INC.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEET
JUNE 30, 1998 AND DECEMBER 31, 1997
(UNAUDITED)
ASSETS
June 30, December 31,
1998 1997
------------ ------------
CURRENT ASSETS:
Cash $ 3,380 $ 3,470
Prepaid expenses 900 900
------------ ------------
TOTAL ASSETS $ 4,280 $ 4,370
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ - -
------------ ------------
- -
Total Current Liabilities ------------ ------------
STOCKHOLDERS' EQUITY:
Capital stock, $.001 par value:25,000,000
shares authorized,
250,000 shares issued and outstanding 250 250
Additional paid-in capital 4,750 4,750
Deficit accumulated during the
development stage (720) (830)
------------- ------------
Total Stockholders Equity 4,280 4,370
------------- ------------
TOTAL LIABILITIES AND
STOCKHOLDERS EQUITY $ 4,280 $ 4,370
============= ============
<PAGE>
GOURMET GIFTS, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF OPERATIONS
(UNAUDITED)
For the
Six Months Inception
Ended Through
June 30, June 30,
1998 1998
------------ ------------
Sales, Net of Returns, Allowances and
Discounts $ - $ -
COSTS OF SALES - -
------------ ------------
Gross Margin - -
------------ ------------
EXPENSES:
General and administrative expenses 90 720
------------ ------------
TOTAL OPERATING EXPENSES 90 720
------------ ------------
NET (LOSS) BEFORE TAXES (90) (720)
PROVISIONS FOR INCOME TAXES - -
------------ ------------
NET (LOSS) $ (90) (720)
============ ============
EARNINGS (LOSS) PER SHARE $ (0.00) (0.00)
============ ============
<PAGE>
<TABLE>
GOURMET GIFTS, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF STOCKHOLDERS' EQUITY
FROM INCEPTION (September 24, 1997) to JUNE 30, 1998
(UNAUDITED)
<CAPTION>
Deficit
Accumulated
Capital Stock Additional During the
------------------- Paid-in Development
Shares Amount Capital Stage Total
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Balance,September 24, 1997 - $ - $ - $ - $ -
Common Stock issued
for cash 250,000 250 4,750 - 5,000
Net loss for the period
ended December 31, 1997 - - - (630) (630)
-------- -------- -------- -------- --------
Balance, December 31, 1997 250,000 250 4,750 (630) 4,370
Net loss for the six
months ended June 30, 1998 - - - (90) (90)
Balance, June 30, 1998 250,000 $ 250 $ 4,750 $ (720) $ 4,280
======== ======== ======== ======== ========
</TABLE>
<PAGE>
GOURMET GIFTS, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CASH FLOWS
(UNAUDITED)
For the
Six Months Inception
Ended Through
June 30, June 30,
1998 1998
---------- ----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (90) $ (720)
Adjustments to reconcile net loss
to net cash used in operating activities:
Changes in assets and liabilities:
(Increase) in prepaid expenses - (900)
---------- ----------
Net cash used in operating activities (90) (1,620)
---------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of common stock, net - 5,000
---------- ----------
Net cash provided by financing activities - 5,000
---------- ----------
Net Increase(decrease) in cash (90) 3,380
CASH AT BEGINNING PERIOD 3,470 -
---------- ----------
CASH AT END OF PERIOD $ 3,380 $ 3,380
========== ==========
SUPPLEMENTAL CASH FLOW INFORMATION
Stock issued in exchange for goods and
services $ - $ -
========== ==========
<PAGE>
Albright, Persing & Associates, Ltd.
Certified Public Accountants
1025 Ridgeview Dr., Suite 300
Reno, Nevada 89509
Phone (702) 826-5432
FAX (702) 826-5510
INDEPENDENT AUDITORS'S REPORT
To the Shareholders and
Board of Directors Gourmet Gifts, Inc.
We have audited the accompanying balance sheet of Gourmet Gifts, Inc. (a
development stage Company) as of September 30, 1997, and the related statement
of income, stockholders's equity and cash flow for the period from inception
(September 24, 1997) to September 30, 1997. This financial statement is the
responsibility of the Company's management. Our responsibility is to express
an opinion on this financial statement based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. 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. We believe that our audit provides a reasonable
basis for our opinion.
In our opinion, the financial statement referred to above presents fairly,
in all material respects, the financial position of Gourmet Gifts, Inc. (a
development stage Company) as of September 30, 1997, and the results of its
operations and its cash flows for the period from inception (September 24, 1997)
to September 30, 1997, in conformity with generally accepted accounting
principles.
/s/ Albright Persing & Associates, Ltd.
Reno, Nevada
October 30, 1997
<PAGE>
GOURMET GIFTS, INC.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEET
SEPTEMBER 30, 1997
(See Independent Auditors' Report)
ASSETS
Current Assets
Cash $ 5,000
-------
Total Assets $ 5,000
$ 5,000
LIABILITIES AND STOCKHOLDERS' EQUITY/DEFICIT
Stockholders' Equity/Deficit
Common stock, no par value
authorized 25,000,000,000 shares
issued and outstanding 250,000
shares at September 30, 1997 $ 250
Additional paid-in-capital 4,750
Earnings accumulated during
the development stage -
-------
Total Liabilities and Stockholders' Equity $ 5,000
=======
The accompanying notes are an integral part of these financial statements
<PAGE>
GOURMET GIFTS, INC.
(A DEVELOPMENT STAGE COMPANY)
INCOME STATEMENT
FROM INCEPTION (September 24, 1997) TO SEPTEMBER 30, 1997
(See Independent Auditors' Report)
Net Sales $ -
----------
Cost of Good Sold -
Gross Profit -
Costs and expenses
Professional Services -
Net (loss) before
income taxes -
Income Taxes (Note 4) -
Net (loss) $ -
==========
Net income (loss)per
common share
Continuing operations $ -
==========
Weighted average shares outstanding 250,000
The accompanying notes are an integral part of these financial statements
<PAGE>
GOURMET GIFTS, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CASH FLOW
FROM INCEPTION (September 24, 1997) TO SEPTEMBER 30, 1997
(See Independent Auditors' Report)
Cash Flows from Operating Activities:
Continuing operations
Net income $ -
Noncash items included in net income ---------
Cash from Operating Activities -
---------
Cash Flows from Financing Activities:
Stock issued for cash 5,000
---------
Cash Provided by Financing
Activities 5,000
---------
Net change in cash 5,000
Cash at beginning of period -
---------
Cash at end of period $ 5,000
=========
SUPPLEMENTAL DISCLOSURES
Amount paid for interest $ -
=========
Amount paid for income taxes $
=========
The accompanying notes are an integral part of these financial statements.
<PAGE>
<TABLE>
GOURMET GIFTS, INC
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF STOCKHOLDERS EQUITY
FROM INCEPTION (September 24, 1997) TO SEPTEMBER 30, 1997
(See Independent Auditors' Report)
<CAPTION>
Deficit
Accumulated
Common Stock Additional During the
---------------- Paid in Development
Shares Amount Capital Stage Total
-------- --------- --------- --------- -------
<S> <C> <C> <C> <C> <C>
Issuance of shares of
common stock for cash 100,000 $ 250 $ 4,750 $ - $ 5,000
Net loss for the period - - - - -
-------- --------- --------- --------- -------
Balance-September
30, 1997 100,000 $ 250 $ 4,750 $ - $ 5,000
======== ========= ========= ========= =======
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
GOURMET GIFTS, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
FROM INCEPTION (September 24, 1997) TO SEPTEMBER 30, 1997
(See Independent Auditors' Report)
NOTE 1- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND BUSINESS ACTIVITY
This summary of significant accounting policies of Gourmet Gifts, Inc.
(the Company) is presented to assist in understanding the Company's financial
statements. The financial statements and notes are representations of the
company's management, which is responsible for their integrity and objectivity.
These accounting policies conform to general accepted accounting principles and
have been consistently applied in the preparation of the financial statements.
Business Activity
The Company, a Nevada corporation located in Reno, Nevada was incorporated
on September 24, 1997 and is currently in the development stage. The Company
intends to be in the business of catalogue gift food sales.
Accounting Method
The Company's financial statements are prepared using the accrual method
of accounting.
Income (Loss) per Share
The computation of income (loss) per share of common stock is based on the
weighted average number of shares outstanding during the period presented.
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 for purposes of the
statement of cash flows.
Income Tax
Effective from inception, Gourmet Gifts, Inc. adopted SFAS No. 109,
"Accounting for Income Taxes," which requires a liability approach to financial
accounting and reporting for income taxes. The differences between the financial
statement and tax bases of assets and liabilities is determined annually.
Deferred income tax assets and liabilities are computed for those differences
that have future tax consequences using the current enacted tax laws and rates
that apply to the period in which they are expected to affect taxable income.
Valuation allowances are established, if necessary, to reduce deferred tax asset
accounts to the amounts that will more likely than not be realized. Income tax
expense is the current tax payable or refundable for the period, plus or minus
the net change in the deferred tax asset and liability accounts.
Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires the Company to make estimates and
assumptions that affect (1) the reported amounts of assets and liabilities, (2)
disclosure of contingent assets and liabilities at the date of the financial
statements, and (30 reported amounts of revenues and expenses during the
reporting period. Actual result could differ from those estimates.
NOTE 2- DEVELOPMENT STAGE COMPANY
The Company is a development stage company as defined in Financial
Accounting Standards Board Statement No. 7. It has yet to commence full- scale
operations. From inception through the date of these financial statements, the
Company did not have any revenues or earnings. At the current time, the Company
has $5,000 in assets and no liabilities.
<PAGE>
GOURMET GIFTS, INC.
BALANCE SHEETS
MARCH 31, 1999 AND SEPTEMBER 30, 1998
(UNAUDITED)
March 31 September 30
1999 1998
------------ ------------
CURRENT ASSETS:
Cash $ 9,387 $ 32,080
Inventories 4,265 -
------------ ------------
Total Current Assets $ 13,652 32,080
------------ ------------
TOTAL ASSETS $ 13,652 $ 32,080
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 1,000 $ 2,315
------------ ------------
Total Current Liabilities 1,000 2,315
------------ ------------
STOCKHOLDERS' EQUITY
Capital stock, $.001 par value;
25,000,000 shares authorized;
896,000 shares issued and outstanding 896 896
Additional paid-in capital 30,189 30,189
Retained earnings(deficit) (18,433) (1,320)
------------ ------------
Total Stockholders' Equity 12,652 29,765
------------ ------------
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $ 13,652 32,080
============ ============
<PAGE>
<TABLE>
GOURMET GIFTS, INC.
STATEMENT OF OPERATIONS
(Unaudited)
<CAPTION>
For the For the For the For the
Six Months Six Months Three Months Three Months
Ended Ended Ended Ended
March 31, March 31, March 31, March 31,
1999 1998 1999 1998
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
SALES $ 6,010 $ - $ - $ -
COST OF SALES 11,239 - 4,265 -
---------- ---------- ---------- ----------
Gross Profit (5,229) - (4,265) -
EXPENSES:
General and Administrative 11,884 575 3,951 45
---------- ---------- ---------- ----------
TOTAL OPERATING EXPENSES 11,884 575 3,951 45
NET (LOSS)BEFORE TAXES (17,113) (575) (8,216) (45)
PROVISIONS FOR INCOME TAXES - - - -
---------- ---------- ---------- ----------
NET (LOSS) $ (17,113) $ (575) $ (8,216) $ (45)
========== ========== ========== ==========
EARNINGS (LOSS)PER SHARE $ (0.02) $ - $ (O.O1) $ -
========== ========== ========== ==========
WEIGHTED AVERAGE SHARES
OUTSTANDING 896,000 250,000 896,000 250,000
========== ========== ========== ==========
</TABLE>
<PAGE>
<TABLE>
GOURMET GIFTS, INC.
STATEMENT OF CASH FLOWS
(Unaudited)
<CAPTION>
For the For the For the For the
Six Months Six Months Three Months Three Months
Ended Ended Ended Ended
March 31, March 31, March 31, March 31,
1999 1998 1999 1998
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net Loss $ (17,113) $ (575) $ (8,216) (45)
Adjustments to reconcile
net loss to net cash used
in operating activities:
Change in assets and
liabilities:
(Increase) decrease in
accounts receivable - - 3,050 -
(Increase)decrease in
inventories (4,265) - 4,265 -
(Increase)decrease in
accounts payable and
accrued liabilities (1,315) - (1,119) -
---------- ---------- ---------- ----------
Net cash used in
operating activities (22,693) (575) (2,020) (45)
---------- ---------- ---------- ----------
CASH FLOWS FROM FINANCING
ACTIVITIES:
Proceeds from issurance of
common stock - - - -
Deferred offering costs - (1,000) - -
---------- ---------- ---------- ----------
Net cash provided by
financing activities - (1,000) - -
---------- ---------- ---------- ----------
Net increase(decrease)
in cash (22,693) (1,575) (2,020) (45)
CASH AT BEGINNING PERIOD 32,080 5,000 11,407 3,470
---------- ---------- ---------- ----------
CASH AT END OF PERIOD $ 9,387 $ 3,425 $ 9,387 $ 3,425
========== ========== ========== ==========
SUPPLEMENTAL CASH FLOW
INFORMATION:
Interest expense $ - $ - $ - $ -
========== ========== ========== ==========
</TABLE>
<PAGE>
<TABLE>
GOURMET GIFTS, INC
STATEMENT OF STOCKHOLDERS' EQUITY
FOR THE SIX MONTHS ENDED MARCH 31, 1999 AND
SEPTEMBER 24, 1997 (inception) THROUGH SEPTEMBER 30, 1998
<CAPTION>
Capital Stock Additional
-------------------- Paid in Accumulated
Shares Amount Capital Deficit Total
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
BALANCE,
September 24,1997 - $ - $ - $ - $ -
Common Stock issued
for cash 250,000 250 4,750 - 5,000
Common Stock issued
for cash 646,000 646 31,654 - 32,300
Direct costs of stock
offering - - (6,215) - (6,215)
Net loss for the
period from inception
through
September 30, 1998 - - - (1,320) (1,320)
--------- --------- --------- --------- ---------
BALANCE,
September 30, 1998 896,000 896 30,189 (1,320) 29,765
Net loss for six
months ended
March 31, 1999 - - - (17,113) (17,113)
--------- --------- --------- --------- ---------
BALANCE,
March 31, 1999 896,000 $ 896 $ 30,189 $ (18,433) $ 12,652
========= ========= ========= ========= =========
</TABLE>
<PAGE>
GOURMET GIFTS,INC.
BALANCE SHEETS
DECEMBER 31, 1998 AND SEPTEMBER 30, 1998
(Unaudited)
ASSETS
December 31, September 30,
1998 1998
------------ ------------
CURRENT ASSETS:
Cash $ 11,407 $ 32,080
Accounts receivable 3,050 -
Inventories 8,530 -
------------ ------------
Total Current Assets 22,987 32,080
TOTAL ASSETS $ 22,987 $ 32,080
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 1,700 $ 2,315
Accrued liabilities 419 -
------------ ------------
Total Current Liabilities 2,119 2,315
------------ ------------
STOCKHOLDERS' EQUITY:
Capital stock, $.001 par value;
25,000,000 shares authorized; 896,000
shares issued and outstanding 896 896
Additional paid-in capital 30,189 30,189
Retained earnings(deficit) (10,217) (1,320)
------------ ------------
Total Stockholders' Equity 20,868 29,765
------------ ------------
TOTAL LIABILITIES AND
STOCKHOLDERS EQUITY $ 22,987 $ 32,080
============ ============
<PAGE>
GOURMET GIFTS, INC
STATEMENT OF OPERATIONS
(Unaudited)
For the For the
Three Months Three Months
Ended Ended
December 31, December 31
1998 1997
------------ ------------
SALES $ 6,010 $ -
COST OF SALES 6,974 -
------------ ------------
Gross profit (964) -
------------ ------------
EXPENSES:
General and administrative 7,933 530
------------ ------------
TOTAL OPERATING EXPENSES 7,933 530
------------ ------------
NET (LOSS) BEFORE TAXES (8,897) (530)
PROVISIONS FOR INCOME TAXES - -
------------ ------------
NET (LOSS) $ (8,897) $ (530)
============ ============
EARNINGS (LOSS) PER SHARE $ (0.01) $ -
============ ============
WEIGHTED AVERAGE SHARES OUTSTANDING 896,000 250,000
============ ============
<PAGE>
GOURMET GIFTS, INC.
STATEMENT OF CASH FLOWS
(Unaudited)
For the For the
Three Months Three Months
Ended Ended
December 31, December 31,
1998 1997
------------ ------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (8,897) $ (530)
Adjustments to reconcile net
loss to net cash used in operating
activities:
Changes in assets and liabilities:
(Increase)decrease in accounts receivable (3,050) -
(Increase)decrease in inventories (8,530) -
Increase (decrease) in accounts payable
and accrued liabilities (196) -
------------ ------------
Net cash used in operating activities (20,673) (530)
------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock - -
Deferred offering costs - (1,000)
------------ ------------
Net cash provided by financing activities - (1,000)
------------ ------------
Net increase(decrease) in Cash (20,673) (1,530)
CASH AT BEGINNING PERIOD 32,080 5,000
------------ ------------
CASH AT END OF PERIOD $ 11,407 3,470
============ ============
SUPPLEMENTAL CASH FLOW INFORMATION:
Interest expense $ - $ -
------------ ------------
<PAGE>
<TABLE>
GOURMET GIFTS, INC.
STATEMENT OF STOCKHOLDERS' EQUITY
FOR THE THREE MONTHS ENDED DECEMBER 31, 1998
AND SEPTEMBER 24,1997 (inception) THROUGH SEPTEMBER 30, 1998
<CAPTION>
Capital Stock Additional
------------------ Paid in Accumulated
Shares Amount Capital Deficit Total
-------- -------- -------- -------- ------
<S> <C> <C> <C> <C> <C>
BALANCE, September 24,1997 - $ $ - $ - $ -
Common stock issued
for cash 250,000 250 4,750 - 5,000
Common stock issued
for cash 646,000 646 31,654 - 32,300
Direct cots of stock
offering - - (6,215) - (6,215)
Net loss for the period
from inception through
September 30, 1998 - - - (1,320) (1,320
-------- -------- -------- -------- ------
BALANCE,
September 30, 1998 896,000 896 30,189 (1,320) 29,765
Net loss for the three
months ended
December 31, 1998 - - - (8,897) (8,897)
-------- -------- -------- -------- -------
BALANCE, December 31, 1998 896,000 $ 896 $ 30,189 $(10,217) $20,868
======== ======== ======== ======== =======
</TABLE>
ARTICLES OF INCORPORATION
OF
GOURMET GIFTS, INC.
FIRST. The name of the corporation is:
GOURMET GIFTS, INC.
SECOND. It's registered office in the State of Nevada is located at 1675
Van Ness, Reno, Nevada 89503, that this Corporation may maintain an office, or
offices, in such other place within or without the State of Nevada as may be
from time to time designated by the By-Laws of said Corporation, and that this
Corporation may conduct all Corporation business of every kind and nature,
including the holding of all meetings of Directors an Stockholders, outside the
State of Nevada as well as within the State of Nevada.
THIRD. The objects for which this Corporation is formed are: To engage in
any lawful activity, including, but not limited to the following:
(A) Shall have such rights, privileges and powers as may be
conferred upon corporations by any existing law..
(B) May at any time exercise such rights, privileges and powers,
when not inconsistent with the purposes and objects for which this corporation
is organized.
(C) Shall have power to have succession by it's corporate name
for the period limited in it's certificate or articles of incorporation, and
when no period is limited, perpetually, or until dissolved and it's affairs
wound up according to law.
(D) Shall have the power to effect litigation in it's own behalf
and interest in any court of law.
(E) Shall have power to make contracts.
(F) Shall have power to hold, purchase and convey real and
personal estate and mortgage or leased any such real and personal estate with
it's franchises. The power to hold real and legality of the document.
(G) Shall have power to appoint such officers an agents as the
affairs of the corporation shall require, and to allow them suitable
compensation.
(H) Shall have power to make By-Laws not inconsistent with the
constitution or laws of the United States, or of the State of Nevada, for the
management, regulation and government of it's affairs and property, the
transfer of it's stock, the transaction of it's business, and the calling and
holding of meetings of it's stockholders.
(I) Shall have power to dissolve itself.
(J) Shall have power to adopt and use a common seal or stamp,
and alter the same. The use of a seal or stamp by the corporation on any
corporate documents is not necessary. The corporation may use a seal or stamp,
if it desires, but such sue or nonuse shall not in any way affect the legality
of the document.
(K) Shall have power to borrow money and contract debts when
necessary for the transaction of it's business, or for the exercise of it's
corporate rights, privileges or franchises, or for any other lawful purpose of
it's incorporation; to issue bonds, promissory notes, bills of exchange,
debentures, and other obligations and evidences of indebtedness, payable at
a specified event or events, whether secured by mortgage, pledge or otherwise,
or unsecured, or for money borrowed, or in payment for property purchased or
acquired, of for any other lawful object .
<PAGE>
(L) Shall have power to guarantee, purchase, hold , sell, assign,
transfer, mortgage, pledge or otherwise dispose of the shares of the capital
stock of, or any bonds, securities or evidences of the indebtedness created by,
any other corporation or corporations of the State of Nevada, or any other
state or government, and, while owners of such stock, bonds, securities or
evidences of indebtedness, to exercise all the rights, powers and privileges of
ownership,including the right to vote, if any.
(M) Shall have power to purchase, hold, sell and transfer shares
of it's own capital stock and use therefor it's capital, capital surplus,
surplus, or other property or fund.
(N) Shall have power to conduct business, have one or more
offices, and hold, purchase mortgage and convey real and personal property in
the State of Nevada, and in any of the several states, territories, possessions
and dependencies of the United States, the District of Columbia, and foreign
countries.
(O) Shall have power to do all and everything necessary and
proper for the accomplishment of the objects enumerated in it's certificate or
articles of incorporation, or any amendment thereof, or necessary or incidental
to the protection and benefit of the corporation, and, in general to carry on
any lawful business necessary or incidental to the attainment of the objects of
the corporation, whether or not such business is similar in nature to the
objects set forth in the certificate or articles of incorporation of the
corporation, or any amendment thereof.
(P) Shall have power to make donations for the public welfare or
for charitable scientific or educational purposes.
(Q) Shall have power to enter into partnerships, general or
limited, or joint ventures in connection with any lawful activities.
FOURTH. The aggregate number of shares the corporation shall have authority
to issue shall be TWENTY FIVE MILLION (25,000,000) shares of common stock, par
value one mil ($.001) per share, each share of common stock having equal rights
and preferences, voting privileges and preferences.
FIFTH. The governing board of this corporation shall be known as directors,
and the number of directors may from time to time be increased or decreased in
such manner as shall be provided by the By-Laws of this Corporation, providing
that the number of directors shall not be reduced to fewer than one (1).
The name and post office address of the first Board of Director(s) shall be
one(1) in number and listed as follows:
Name Address
Kim Farran 1675 Van Ness
Reno, Nevada 89503
SIXTH. The capital stock, after the amount of the subscription price, or
par value, has been paid in, shall not be subject to assessment to pay the debts
of the corporation.
SEVENTH. The name and post office address of the Incorporator signing the
Articles of Incorporation is as follows:
Name Address
Kim Farran 1675 Van Ness
Reno, Nevada 89503
EIGHTH. The resident agent for this corporation shall be:
KIM FARRAN
The address of said agent, and the registered or statutory address of this
corporation in the state of Nevada shall be:
1675 Van Ness
Reno, Nevada 89503
NINTH. The corporation is to have perpetual existence.
<PAGE>
TENTH. In furtherance and not in limitation of the powers conferred by
statute, the Board of Directors is expressly authorized: Subject to the By-
Laws, if any, adopted by the stockholders, to make, alter or amend the By-Laws
of the Corporation.
To fix the amount to be reserved as working capital over and above it's
capital stock paid in; to authorize and cause to be executed, mortgages and
liens upon the real and personal property of this Corporation.
By resolution passed by a majority of the whole Board, to designate one
(1) or more committees, each committee to consist of one (1) or more of the
Directors of the Corporation, which, to the extent provided in the resolution,
or in the By-Laws of the Corporation, shall have and may exercise the powers of
the Board of Directors in the management of the business and affairs of the
Corporation. Such committee, or committees shall have such name, or names as
may be stated in the By-Laws of the Corporation, or as may be determined from
time to time by resolution adopted by the Board of Directors.
When and as authorized by the affirmative vote of the stockholders holding
stock entitling them to exercise at least a majority of the voting power given
at a stockholders meeting called for that purpose, or when authorized by the
written consent of the holders of at least a majority of the voting stock
issued and outstanding, the Board of Directors shall have power and authority
at any meeting to sell, lease or exchange all of the property and assets of the
Corporation, including it's goodwill and it's franchises, upon such terms and
conditions as it's Board of Directors deems expedient and for the best
interests of the Corporation.
ELEVENTH. No shareholder shall be entitled as a matter of right to
subscribe for or receive additional shares of any class of stock of the
Corporation, whether now or hereafter authorized, or any bonds, debentures or
securities convertible into stock, but such additional shares of stock or other
securities convertible into stock may be issued or disposed of by the Board of
Directors to such persons and on such terms as in it's discretion it shall deem
advisable.
TWELFTH. No director or officer of the Corporation shall be personally
liable to the Corporation or any of it's stockholders for damages for breach of
fiduciary duty as a director or officer involving any act or omission of any
such director or officer; provided however, that the foregoing provision shall
not eliminate or limit the liability of a director or officer ( i ) for acts or
omissions which involve intentional misconduct, fraud or a knowing violation of
law, or ( ii ) the payment of dividends in violation of Section 78.300 of the
Nevada Revised Statutes. Any repeal or modification of this Articles by the
stockholders of the Corporation shall be prospective only and shall not
adversely affect any limitation on the personal liability of a director or
officer of the Corporation for acts or omissions to such repeal or
modification.
THIRTEENTH. This Corporation reserves the right to amend, alter, change or
repeal any provision contained in the Articles of Incorporation, in the manner
now or hereafter prescribed by statute, or by the Articles of Incorporation,
and all rights conferred upon stockholders herein are granted subject to this
reservation.
<PAGE>
I, THE UNDERSIGNED, being the Incorporator herein before named for the
purpose of forming a Corporation pursuant to the General Corporation Law of the
State of Nevada, do make and file these Articles of Incorporation, hereby
declaring and certifying that the facts herein stated are true, and accordingly
have hereunto set my hand this 24 day of September, 1997.
/s/Kim Farran
STATE OF NEVADA )
: ss.
COUNTY OF WASHOE )
On this the 24 day of September, 1997, Reno, Nevada, before me, the
undersigned, a Notary Public in and for Reno, State of Nevada personally
appeared KIM FARRAN, known to me to be the person whose name is subscribed to
the foregoing document and acknowledged to me that he executed the same.
/s/ Mary Lohnes
Notary Public-State of Nevada
Washoe County
Mary Lohnes
My Commission Expires March 12, 2001
I, Kim Farran , hereby accept as Resident Agent for the previously named
Corporation.
/s/Kim Farran
Date: 09/24/97 ------------------------------
BYLAWS
OF
GOURMET GIFTS, INC.
ARTICLE I
OFFICES
SECTION 1. PRINCIPAL OFFICE. The principal office of the Corporation
shall be located in the City of Reno, Nevada, Washoe County, State of Nevada.
SECTION 2. OTHER OFFICES. In addition to the principal office at 1675 Van
Ness, Reno, Nevada, other offices may also be maintained at such other place or
places, either within or without the State of Nevada, as may be designated from
time to time by the Board of Directors, where any and all business of the
Corporation may be transacted, and where meetings of the stockholders and of
the Directors may be held with the same effect as though done or held at said
principal office.
ARTICLE II
MEETING OF THE STOCKHOLDERS
SECTION 1. ANNUAL MEETINGS. The annual meeting of the shareholder,
commencing with the year 1997, shall be held at the registered office of the
corporation, or at such other place as may be specified or fixed in the notice
of said meetings in the month of or the month preceding the due date of the
annual list of the officers and directors of the corporation at such time as
the shareholders shall decide, for the election of directors and for the
transaction of such other business as may properly come before said meeting.
SECTION 2. NOTICE OF ANNUAL MEETING. The Secretary shall mail, in the
manner provided in Section 5 of Article II of these Bylaws, or deliver a
written or printed notice of each annual meeting to each stockholder of record,
entitled to vote thereat, or may notify by telegram, at least ten and not more
than sixty (60) days before the date of such meeting.
SECTION 3. PLACE OF MEETINGS. The Board of Directors may designate any
place either within or without the State of Nevada as the place of meeting for
annual meeting or for any special meeting called by the Board of Directors. A
waiver of notice signed by all stockholders may designate any place either
within or without the State of Nevada, as the place for holding of such
meeting. If no designation is made, or if a special meeting be otherwise
called, the place of meeting shall be the principal office of Corporation
in the State of Nevada, except as otherwise provided in Section 6, Article
II of these Bylaws, entitled "Meeting of All Stockholders".
SECTION 4. SPECIAL MEETINGS. Special meetings of the stockholders shall be
held at the principal office of the Corporation or at such other place as shall
be specified or fixed in a notice hereof. Such meetings of the stockholders may
be called at any time by the President or Secretary, or by a majority of the
Board of Directors then in office, and shall be called by the President with or
without Board approval on the written request of the holders of record of at
least fifty percent (50%) of the number of shares of the Corporation then
outstanding and entitled to vote, which written request shall state the object
of such meeting.
SECTION 5. NOTICE OF MEETING. Written or printed notice stating the place,
day and hour of the meeting and, in case of special meeting, the purpose for
which the meeting is called, shall be delivered not less than ten (10) nor more
than sixty (60) days before the date of the meeting, either personally or by
mail, by or at the direction of the President or the Secretary to each
stockholder of record entitled to vote at such meeting. If mailed, such notice
shall be deemed to be delivered when deposited in the United States mail,
addressed to the stockholder at his/her address as it appears on the records of
the Corporation, with postage prepaid.
Any stockholder may at any time, by duly signed statement in writing to
that effect, waive any statutory or other notice of any meeting, whether such
statement by signed before or after such meeting.
<PAGE>
SECTION 6. MEETING OF ALL STOCKHOLDERS. If all the stockholders shall meet
at any time and place, either within or without the State of Nevada, and consent
to the holding of the meeting at such time and place, such meeting shall be
valid without call or notice and at such meeting any corporate action may be
taken.
SECTION 7. QUORUM. At all stockholder's meetings, the presence in person or
by proxy of the holders of a majority of the outstanding stock entitled to vote
shall be necessary to constitute a quorum for the transaction of business, but a
lesser number may adjourn to some future time not less than seven (7) nor more
than twenty-one (21) days later, and the Secretary shall thereupon give at least
three (3) days' notice by mail to each stockholders entitled to vote who is
absent from such meeting.
SECTION 8. MODE OF VOTING. At all meetings of the stockholders the voting
may be voice vote, but any qualified voter may demand a stock vote whereupon
such stock vote shall be taken by ballot, each of which shall state the name of
the stockholder voting and the number of shares voted by him/her and, if such
ballot be cast by proxy, it shall also state the name of such proxy; provided,
however, that the mode of voting prescribed by statute for any particular case
shall be in such case followed.
SECTION 9. PROXIES. At any meeting of the stockholders, any stockholder may
be represented and vote by a proxy or proxies appointed by an instrument in
writing. In the event any such instrument in writing shall designate two or more
persons to act as proxies, a majority of such persons present at the meeting, or
if only one shall be present, then that one shall have and may exercise all of
the powers conferred by such written instrument upon all of the persons so
designated unless the instrument shall otherwise provide. No such proxy shall be
valid after the expiration of six (6) months from the date of its execution,
unless coupled with an interest, or unless the person executing it specified
therein the length of time for which it is to continue in force, which in no
case shall exceed seven (7) years from the date of its execution. Subject to the
above, any proxy duly executed is not revoked and continues in full force and
effect until any instrument revoking it or duly executed proxy bearing a later
date is filed with the Secretary of the Corporation. At no time shall any proxy
be valid which shall be filed less than ten (10) hours before the commencement
of the meeting.
SECTION 10. VOTING LISTS. The officer or agent in charge of the transfer
books for shares of the corporation shall make, at least three (3) days before
each meeting of stockholders, a complete list of the stockholders entitled to
vote at such meeting, arranged in alphabetical order with the number of shares
held by each, which list for a period of two (2) days prior to such meeting
shall be kept on file at the registered office of the corporation and shall be
subject to inspection by any stockholder at any time during the whole time of
the meeting. The original share ledger or transfer book, or duplicate thereof,
kept in this state, shall be prima facie evidence as to who are the stockholders
entitled to examine such list or share ledger or transfer book or to vote at any
meeting of stockholders.
SECTION 11. CLOSING TRANSFER BOOKS OR FIXING OR RECORD DATE. For the
purpose of determining stockholders entitled to notice or to vote for any
meeting of stockholders, the Board of Directors of the Corporation may provide
that the stock transfer books be closed for a stated period but not to exceed in
any case sixty (60) days before such determination. If the stock transfer books
be closed for the purpose of determining stockholders entitled to notice of a
meeting of stockholders, such books shall be closed for at least fifteen
(15)days immediately preceding such meeting. In lieu of closing the stock
transfer books, the Board of Directors may fix in advance a date in any case to
be not more than sixty (60) days, not less than ten (10) days prior to the date
on which the particular action, requiring such determination of stock- holders,
is to be taken. If the stock transfer books are not closed and no record date is
fixed for determination of stockholders entitled to notice of meeting of
stockholders, or stockholders entitled to receive payment of a dividend, the
date on which notice of the meeting is mailed or the date on which the
resolution of the Board of Directors declaring such dividend is adopted, as the
case may be, shall be the record of date for such determinations of
shareholders.
SECTION 12. VOTING OF SHARES BY CERTAIN HOLDERS. Shares standing in the
name of another corporation, domestic or foreign, may be voted by such officer,
agent or proxy as the Bylaws of such corporation by prescribe, or, in the
absence of such provisions, the Board of Directors of such corporation may
determine.
<PAGE>
Shares standing in the name of deceased person may be voted by his/her
administrator or executor, either in person or by proxy. Shares standing in the
name of the guardian, conservator or trustee may be voted by such fiduciary
either in person or by proxy, but no guardian, conservator, or trustee shall be
entitled, as such fiduciary, to vote shares held by him without a transfer of
such shares into his/her name.
Shares standing in the name of a receiver may be voted by such receiver,
and shares held by or under the control of a receiver may be voted by such
receiver without the transfer thereof into his name if authority so to do be
contained in an appropriate order of the court at which such receiver was
appointed.
A stockholder whose shares are pledged shall be entitled to vote such
shares until shares have been transferred into the name of the pledgee, and
thereafter the pledgee shall be entitled to vote the shares so transferred.
Shares of its' own stock belonging to this corporation shall not voted,
directly or indirectly, at any meeting and shall not be counted in determining
the total number of outstanding shares at any time, but shares of its own stock
held by it in a fiduciary capacity may be voted and shall be counted in
determining the total number of outstanding shares at any given time.
SECTION 13. INFORMAL ACTION BY STOCKHOLDERS. Any action is required to be
taken at a meeting of the stockholders or any other action which may be taken
at a meeting of the stockholders except the election of directors may be taken
without a meeting if a consent in writing setting forth the action so taken
shall be signed by all of the stockholders entitled to vote with respect to the
subject matter thereof.
SECTION 14. VOTING OF SHARES. Each outstanding share entitled to vote
shall be entitled to one (1) vote upon each matter submitted to vote at a
meeting of stockholders.
ARTICLE III
DIRECTORS
SECTION 1. GENERAL POWERS. The Board of Directors shall have the control
and general management of the affairs and business of the Corporation. Such
directors shall in all cases act as Board, regularly convened, by a majority,
and they may adopt such rules and regulations for the conduct of their meetings
and the management of the Corporation, as they may deem proper, not inconsist-
ent with these Bylaws, Articles of Incorporation and the laws of the State of
Nevada. The Board of Directors shall further have the right to delegate certain
other powers to the Executive Committee as provided in these Bylaws.
SECTION 2. NUMBER OF DIRECTORS. The affairs and business of this
Corporation shall be managed by a Board of Directors consisting of not less than
one (1) or more than seven (7), until changed by amendment to these Bylaws
adopted by the shareholders amending this Section 2, Article III, and except as
authorized by the Nevada Revised Statutes, there shall in no event be less than
one (1) Director.
SECTION 3. ELECTION. The Directors of the Corporation shall be elected at
the annual meeting of the stockholders except as hereinafter otherwise provided
for the filling of vacancies. Each Director shall hold office for a term of one
(1) year and until his successor shall have duly chosen and shall have
qualified, or until his death, or until he shall resign or shall have been
removed in the manner hereinafter provided.
SECTION 4. VACANCIES IN THE BOARD. Any vacancy in the Board of Directors
occurring during the year through death, resignation, removal or other cause,
including vacancies caused by an increase in the number of directors, shall be
filled for the unexpired portion they constitute a quorum, at any special
meeting of the Board called for that purpose, or at any regular meeting there-
of;provided, however, that in the event the remaining directors do not represent
a quorum of the number set forth in Section 2 hereof, a majority of such
remaining directors may elect directors to fill any vacancies.
SECTION 5. DIRECTORS MEETINGS. Annual meeting of the Board of Directors
shall be held each year immediately following the annual meeting of the
stockholders. Other regular meetings of the Board of Directors shall from time
to time by resolution be prescribed. No further notice of such annual or
regular meeting of the Board of Directors need be given.
<PAGE>
SECTION 6. SPECIAL MEETINGS. Special meetings of the Board of Directors may
be called by or at the request of the President or any Director. The person or
persons authorized to call meetings of the Board of Directors may fix any place,
either within or without the State of Nevada, as the place for holding any
special meeting of the Board of Directors called by them.
SECTION 7. NOTICE. Notice of any special meeting shall be given at least
twenty-four (24) yours previous thereto by written notice if personally
delivered, or five (5) days previous thereto if mailed to each Director at his
business address, or by telegram. If mailed, such notice shall be deemed to have
been delivered when deposited in the United States mail so addressed with
postage thereon prepaid. If notice is given by telegram, such notice shall be
deemed to be delivered when the telegram is delivered to the telegraph company.
Any Director may waive notice of any meeting. The attendance of a Director at
any meeting shall constitute a waive of notice of such meeting, except where a
Director attends a meeting for the express purpose of objecting to the
transaction of any business because the meeting is not lawfully called or
convened.
SECTION 8. CHAIRMAN. At all meetings of the Board of Directors, the
President shall serve as Chairman, or in the absence of the President, the
Directors present shall choose by majority vote a Director to preside as
Chairman.
SECTION 9. QUORUM AND MANNER OF ACTING. A majority of Directors, whose
number is designated in Section 2 herein, shall constitute a quorum for the
transaction of business at any meeting and the act of a majority of the
Directors present at any meeting at which a quorum is present shall be the act
of the Board of Directors. In the absence of a quorum, the majority of the
Directors present may adjourn any meeting from time to time until a quorum be
had. Notice of any adjourned meeting need not be given. The Directors shall act
only as a Board and the individual Directors shall have no power as such.
SECTION 10. REMOVAL OF DIRECTORS. Any one or more of the Directors may be
removed either with or without cause at any time by the vote or written consent
of the stockholders representing not less than two-thirds (2/3) of the issued
and outstanding capital stock entitled to voting power.
SECTION 11. VOTING. At all meetings of the Board of Directors, each
Director is to have one (1) vote, irrespective of the number of shares of stock
that he may hold.
SECTION 12. COMPENSATION. By resolution of the Board of Directors, the
Directors may be paid their expenses, if any of attendance of each meeting of
the Board, and may be paid a fixed sum for attendance at meetings or a stated
salary of Directors. No such payment shall preclude any Director from serving
the Corporation in any other capacity and receiving compensation therefor.
SECTION 13. PRESUMPTION OF ASSENT. A Director of the Corporation who is
present at a meeting of the Board of Directors at which action on any corporate
matter is taken, shall be conclusively presumed to have assented to the action
unless his/her dissent shall be entered in the minutes of the meeting or unless
he/she shall file his/her written dissent to such action with the person acting
as the Secretary of the meeting before the adjournment thereof or shall file
forward such dissent by certified or registered mail to the Secretary of the
Corporation immediately after the adjournment of the meeting. Such right to
dissent shall not apply to a Director who voted in favor of such action.
ARTICLE IV
EXECUTIVE COMMITTEE
SECTION 1. NUMBER AND ELECTION. The Board of Directors may, in its'
discretion, appoint from it's membership an Executive Committee of one (1) or
more Directors, each to serve at the pleasure of the Board of Directors.
SECTION 2. AUTHORITY. The Executive Committee is authorized to take any
action which the Board of Directors could take, except that the Executive
Committee shall not have the power either to issue or authorize the issuance of
shares of capital stock, to amend the Bylaws, or a resolution of the Board of
Directors. Any authorized action taken by the Executive Committee shall be as
effective as if it had been taken by the full Board of Directors.
SECTION 3. REGULAR MEETINGS. Regular meetings of the Executive Committee
may be held within or without the State of Nevada at such time and place as the
Executive Committee may provide from time to time.
<PAGE>
SECTION 4. SPECIAL MEETINGS. Special meetings of the Executive Committee
may be called by or at the request of the President or any member of the
Executive Committee.
SECTION 5. NOTICE. Notice of any special meeting shall be given at least
one (1) day previous thereto by written notice, telephone, telegram or in
person. Neither the business to be transacted, nor the purpose of a regular or
special meeting of the Executive Committee need be specified in the notice of
waiver of notice of such meeting. A member may waive notice of any meeting of
the Executive Committee. The attendance of a member at any meeting shall
constitute a waiver of notice of such meeting, except where a member attends a
meeting for the express purpose of objecting to the transaction of any business
because the meeting is not lawfully called or convened.
SECTION 6. QUORUM. A majority of the members of the Executive Committee
shall constitute a quorum for the transaction of business at any meeting of the
Executive Committee; provided that if fewer than a majority of the members are
present at said meeting a majority of the members present may adjourn the
meeting from time to time without further notice.
SECTION 7. MANNER OF ACTING. The act of the majority of the members present
at a meeting at which a quorum is present shall be the act of the Executive
Committee, and said Committee shall keep regular minutes of it's proceedings
which shall at all times be open for inspection by the Board of Directors.
SECTION 8. PRESUMPTION OF ASSENT. A member of the Executive Committee who
is present at a meeting of the Executive Committee at which action on any
corporate matter is taken, shall be conclusively presumed to have assented to
the action taken unless hi/her dissent shall be entered in the minutes of the
meeting or unless he/she shall file his written dissent to such action with the
person acting as Secretary of the meeting before the adjournment thereof, or
shall forward such dissent by certified or registered mail to the Secretary of
the Corporation immediately after the adjournment of the meeting. Such right to
dissent shall not apply to a member of the Executive Committee who voted in
favor of such action.
ARTICLE V
OFFICERS
SECTION 1. NUMBER. The officers of the Corporation shall be a President,
Vice President, a Treasurer and a Secretary and such other or subordinate
officers as the Board of Directors may from time to time elect. One (1) person
may hold the office and perform the duties of one or more of said officers. No
officer need to a member of the Board of Directors.
SECTION 2. ELECTION, TERM OF OFFICE, QUALIFICATIONS. The officers of the
Corporation shall be chosen by the Board of Directors and they shall be elected
annually at the meeting of the Board of Directors held immediately after each
annual meeting of the stockholders except as hereinafter otherwise provided for
filling vacancies. Each officer shall hold his/her office until his/her
successor has been duly chosen and has qualified, or until his/her death, or
until he/she resigns or has been removed in the manner hereinafter provided.
SECTION 3. REMOVALS. Any officer or agent elected or appointed by the Board
of Directors may be removed by the Board of Directors at any time when-ever in
its' judgment the best interests of the Corporation would be served thereby, and
such removal shall be without prejudice to the contract rights, if any, or the
person so removed.
SECTION 4. VACANIES. All vacancies in any of office shall be filled by the
Board of Directors without undue delay, at any regular meeting, or at a meeting
specially called for that purpose.
<PAGE>
SECTION 5. PRESIDENT. The President shall be the Chief Executive Officer of
the Corporation and shall have general supervision over the business of the
Corporation and over its' several officers, subject, however, to the control of
the Board of Directors. He/she may sign, with the Treasurer or with the
Secretary or any other proper officer of the Corporation thereunto authorized by
the Board of Directors, certificates for shares of the capital stock of the
Corporation; may sign and execute in the name of the Corporation deeds,
mortgages, bonds, contracts or other instruments authorized by the Board of
Directors, except in cases where signing and execution thereof shall be
expressly delegated by the Board of Directors or by these Bylaws to some other
officer or agent of the Corporation; and in general shall perform all duties
incident to the duties of the President, and such other duties as from time to
time may be assigned to him/her by the Board of Directors.
SECTION 6. VICE PRESIDENT. The Vice President shall in the absence or
incapacity of the President, or as ordered by the Board of Directors, perform
the duties of the President, or such other duties or functions as may be given
to him by the Board of Directors from time to time.
SECTION 7. TREASURER. The Treasurer shall have the care and custody of all
the funds and securities of the Corporation and deposit the same in the name of
the Corporation in such bank or trust company as the Board of Directors may
designate; he may sign or countersign all checks, drafts and orders for the
payment of money and may pay out and dispose of same under the direction of the
Board of Directors, and may sign or countersign all notes or other obligations
of indebtedness of the Corporation; he/she; may sign with the President or Vice
President, certificates for shares of stock of the Corporation; he/she shall at
all reasonable times exhibit the books and accounts to any director or
stockholder of the Corporation under application at the office of the Company
during business hours; and he/she shall, in general, perform all duties as from
time to time may be assigned to him/her by the President or by the Board of
Directors. The Board of Directors may at its discretion require that each
officer authorized to disburse the funds of the Corporation be bonded in such
amount as it may deem adequate.
SECTION 8. SECRETARY. The Secretary shall keep the minutes of the meetings
of the Board of Directors and also the minutes of the meetings of the
stockholders; he/she shall attend to the giving and serving of all notices of
the Corporation and shall affix the seal of Corporation to all certificates of
stock, when signed and countersigned by the duly authorized officers; he/she may
sign certificates for shares of stock of the Corporation; he/she may sign or
countersign all checks, drafts and orders for the payment of money; he/she shall
have charge of the certificate book and such other books and papers as the Board
may direct; he/she shall keep a stock book containing the names alphabetically
arranged, of all persons who are stockholders of the Corporation, showing their
places of residence, the number of shares held by them respectively, the time
when they respectively became the owners thereof, and the amount paid thereof;
and he/she shall in general, perform all duties incident to the office of
Secretary and such other duties as from time to time may be assigned to him/her
by the President or by the Board of Directors.
SECTION 9. OTHER OFFICERS. The Board of Directors may authorize and empower
other persons or other officers appointed by it to perform the duties and
functions of the officers specifically designated above by special resolution in
each case.
SECTION 10. ASSISTANT TREASURERS AND ASSISTANT SECRETARIES. The Assistant
Treasurers shall respectively, as may be required by the Board of Directors,
give bonds for the faithful discharge of their duties in such sums and with such
sureties as the Board of Directors shall determine. The Assistant Secretaries as
thereunto authorized by the Board of Directors may sign with the President or
Vice President certificates for shares of the capital stock of the Corporation,
issued of which shall have been authorized by resolution of the Board of
Directors. The Assistant Treasurers and Assistant Secretaries shall, in general,
perform such duties as may be assigned to them by the Treasurer or the Secretary
respectively, or by the President or by the Board of Directors.
<PAGE>
ARTICLE VI
INDEMNIFICATION OF OFFICERS AND DIRECTORS
Except as hereinafter stated otherwise, the Corporation shall indemnify all
of its' officers and directors, past, present and future, against any and all
expenses incurred by them, and each of them including but not limited to legal
fees, judgments and penalties which may be incurred, rendered or levied in any
legal action brought against any or all of them for or on account of any act or
omission alleged to have been committed while acting within the scope of their
duties as officers or directors of this Corporation.
ARTICLE VII
CONTRACTS, LOANS, CHECKS AND DEPOSITS
SECTION 1. CONTRACTS. The Board of Directors may authorize any officer or
officers, agent or agents to enter into any contract or execute and deliver any
instrument in the name of and on behalf of the Corporation, and such authority
may be general or confined to specific instances.
SECTION 2. LOANS. No loans shall be contracted on behalf of the Corporation
and no evidence of indebtedness shall be issued in its' name unless authorized
by the Board of Directors or approved by loan committee appointed by the Board
of Directors and charged with the duty of supervising investments. Such
authority may be general or confined to specific instances.
SECTION 3. CHECKS, DRAFTS, ETC. A check, draft or other orders for payment
of money, notes or other evidences of indebtedness issued in the name of the
Corporation shall be signed by such officer or officers, agent or agents of the
Corporation and in such manner as shall from time to time be determined by
resolutions of the Board of Directors.
SECTION 4. DEPOSITS. All funds of the Corporation not otherwise employed
shall be deposited from time to time to the credit of the Corporation in such
banks, trust companies or other depositories as the Board of Directors may
select.
ARTICLE VIII
CAPITAL STOCK
SECTION 1. CERTIFICATE FOR SHARES. Certificates for shares of stocks of the
Corporation shall be in such form as shall be approved by the incorporators or
by the Board of Directors. The certificates shall be numbered in the order of
their issue, shall be signed by the President or Vice President and by the
Secretary or the Treasurer, or by such other person or officer as may be
designed by the Board of Directors; and the seal of the Corporation shall be
affixed thereto, which said signatures of the duly designated officers and of
the seal of the Corporation. Every certificate authenticated by a facsimile of
such signatures and seal must be countersigned by a Transfer Agent to be
appointed by the Board of Directors, before issuance.
SECTION 2. TRANSFER OF STOCK. Shares of the stock of the Corporation may be
transferred by the delivery of the certificate accompanied either by an
assignment in writing on the back of the certificate or by written power of
attorney to sell, assign, and transfer the same on the books of the Corpora-
tion, signed by the person appearing by the certificate to the owner of the
shares represented thereby, together with all necessary federal and state
transfer tax stamps affixed and shall be transferable on the books of the
Corporation upon surrender thereof so signed or endorsed. The person registered
on the books of the Corporation as the owner of any shares of stock shall be
entitled to all rights of ownership with respect to such shares.
SECTION 3. REGULATIONS. The Board of Directors may make such rules and
regulations as it may deem expedient not inconsistent with the Bylaws or with
the Articles of Incorporation, concerning the issue, transfer and registration
of the certificates for shares of stock of the Corporation. If may appoint a
transfer agent or registrar of transfers, or both, and it may require all
certificates to bear the signature of either or both.
<PAGE>
SECTION 4. LOST CERTIFICATES. The Board of Directors may direct a new
certificate or certificates to be issued in place of any certificate or
certificates theretofore issued by the Corporation alleged to have been lost or
destroyed, upon the making of an affidavit of that fact by the person claiming
the certificate of stock to be lost or destroyed. When authorizing such issue of
a new certificate or certificates, the Board of Directors may, in its discretion
and as a condition precedent to the issue thereof, require the owner of such
lost or destroyed certificate or certificates, or his/her legal representative,
to advertise the same in such manner as it shall require and/or give the
Corporation a bond in such sum as it may direct as indemnity against any claim
that may be made against the Corporation with respect to the certificate alleged
to have been lost or destroyed.
ARTICLE IX
DIVIDENDS
SECTION 1. The Corporation shall be entitled to treat the holder of any
share or shares of stock as the holder in fact thereof and, accordingly, shall
not be bound to recognize any equitable or other claim to or interest in such
shares on the part of any other person, whether or not it shall have express or
other notice thereof, except as expressly provided by the laws of Nevada.
SECTION 2. Dividends on the capital stock of the Corporation, subject to
the provisions of the Articles of Incorporation, if any, may be declared by the
Board of Directors at any regular or special meeting, pursuant to law.
SECTION 3. The Board of Directors may close the transfer books in its
discretion for a period not exceeding fifteen (15) days preceding the date fixed
for holding any meeting, annual or special of the stockholders, or the day
appointed for the payment of a dividend.
SECTION 4. Before payment of any dividend or making any distribution of
profits, there may be set aside out of funds of the Corporation available for
dividends, such sum or sums as the Directors may from time to time, in their
absolute discretion think proper as a reserve fund to meet contingencies, or for
equalizing dividends, or for repairing or maintaining any property of the
Corporation, or for any such other purpose as the Directors shall think
conducive to the interest of the Corporation, and the Directors may modify or
abolish any such reserve in the manner in which it was created.
ARTICLE X
SEAL
The Board of Directors shall provide a Corporate Seal which shall be in the
form of a circle and shall bear the full name of the Corporation, the year of
its' incorporation and the words "Corporate Seal, State of Nevada".
ARTICLE XI
FISCAL YEAR
The fiscal year of the Corporation shall end on the 30th day of September
of each year.
ARTICLE XII
WAIVER OF NOTICE
Whenever any notice whatever is required to be given under the provisions
of these Bylaws, or under the laws of the State of Nevada, or under the
provisions of the Articles of Incorporation, a waiver in writing signed by the
person or persons entitled to such notice, whether before or after the time
stated therein, shall be deemed equivalent to the giving of such notice.
ARTICLE XIII
AMENDMENTS
These Bylaws may be altered, amended or repealed and new Bylaws may be
adopted at any regular or special meeting of the stockholders by a vote of the
stockholders owning a majority of the shares and entitled to vote thereat. These
Bylaws may also be altered, amended or repealed and new Bylaws may be adopted at
any regular or special meeting of the Board of Directors of the Corporation (if
notice of such alteration or repeal be contained in the notice of such special
meeting) by a majority vote of the Directors present at the meeting at which a
quorum is present, but any such amendment shall not be inconsistent with or
contrary to the provision of any amendment adopted by the stockholders.
<PAGE>
KNOW ALL MEN BY THESE PRESENTS that the undersigned, being the Secretary of
GOURMET GIFTS, INC., a Nevada corporation hereby acknowledges that the above and
foregoing Bylaws were duly adopted as the Bylaws of said Corporation on
September 30th, 1997.
IN WITNESS WHEREOF, I hereunto subscribe my name this 30th day of
September, 1997.
/s/ Kim Farran
KIM FARRAN, PRES/SEC/TRES/DIRECTOR
Number Shares
Incorporated Under the Laws of the State of Nevada September 24, 1997
GOURMET GIFTS, INC.
Common Stock 25,000,000 authorized .001 Par Value
CUSIP 38356R 10 0
This Certifies that ---------------SPECIMEN-----------------------is the
registered holder of --------------VOID---------------------------shares
transferable only on the books of the Corporation by the holder in person
of by Attorney upon surrender of this Certificate properly endorsed.
In Witness Whereof, the said Corporation has caused this Certificate to
be signed by its duly authorized officers and its Corporate Seal be
hereunto affixed
this----------day of ------------A.D. 19xx
/s/---------------------- /s/--------------------------
Secretary President
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