<PAGE>2
As filed with the Securities and Exchange Commission on Feb. 17, 2000
Commission File Number 333-83231
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Amendment 2 to
FORM SB-2
REGISTRATION STATEMENT
Under The Securities Act of 1933
Global Foods Online, Inc.
Nevada 95-4741485
(State or other (Primary Standard Industrial (I.R.S. Employer
jurisdictions Classification Code Number) Identification number)
of incorporation
or organization
520 North Kings Road, Suite 214
Los Angeles, CA 90048
Telephone: 323-852-9877
(Address and telephone number of registrant's principal executive
offices and principal place of business.)
Resident Agents of Nevada
711 South Carson Street
Carson City Nevada 89701
(702) 882-4641
(Name, address and telephone number of agent for service.)
with copies to:
Jody M. Walker
Attorney At Law
7841 South Garfield Way
Littleton, Colorado 80122
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, check the following box: |x|
<TABLE>
CALCULATION OF REGISTRATION FEE
Title of each Proposed Proposed Amount of
class of Amount to be offering aggregate registration
securities registered price offering price fee
<S> <C> <C> <C> <C>
Common Stock(1) 2,000,000 $.50 $ 1,000,000 $ 312.50
Common Stock(2) 1,750,000 $.10 175,000 54.69
---------- ----- ----------- ---------
3,750,000 $ 1,175,000 $ 367.19
</TABLE>
(1)Represents common stock underlying the class A warrants.
(2)Represents common stock to be registered on behalf of selling
securityholders.
The registrant hereby amends this registration statement on such date
or dates as may be necessary to delay its effective date until the
registrant shall file a further amendment which specifically states
that this registration statement shall thereafter become effective in
accordance with Section 8(a) of the Securities Act of 1933 or until the
registration statement shall become effective on such date as the
Commission, acting pursuant to said Section 8(a), may determine.
<PAGE>3
PRELIMINARY PROSPECTUS DATED February 17, 2000
SUBJECT TO COMPLETION
2,000,000 Common Shares
underlying the Class A Warrants
on behalf of selling security holders
1,750,000 Common Shares being registered
on behalf of selling security holders
GLOBAL FOODS ONLINE, INC.
Selling security holders are offering all of the common shares to be
sold in the offering.
- - We will not receive any cash or other proceeds in connection
with the subsequent sale.
- - Each selling security holder may be deemed to be an
underwriter under the Securities Act of 1933.
- - Our common stock does not trade.
- - We will apply for the quotation of our common stock on the
NASD Electronic Bulletin Board.
- - We will terminate the offering on or before June 30, 2000.
We may extend the offering of common shares to September 30, 2000
Consider carefully the risk factors beginning on page 8 in the
prospectus.
Neither the SEC nor any state securities commission has approved these
certificates or determined that this prospectus is accurate or
complete. Any representation to the contrary is a criminal offense.
The date of the Prospectus is February 17, 2000
<PAGE>4
<TABLE>
TABLE OF CONTENTS
<S> <C>
PROSPECTUS SUMMARY 8
RISK FACTORS 10
SELLING SECURITY HOLDERS 14
TERMS OF THE OFFERING 15
THE DISTRIBUTIONS 17
SOURCE AND USE OF PROCEEDS 18
DILUTION 19
THE COMPANY 20
BUSINESS ACTIVITIES 21
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION 23
Trends and Uncertainties
Capital and Source of Liquidity
Results of Operations
MANAGEMENT 24
Officers and Directors
Remuneration
Indemnification
CERTAIN TRANSACTIONS 26
PRINCIPAL SHAREHOLDERS 28
SHARES ELIGIBLE FOR FUTURE SALE 31
MARKET FOR REGISTRANT'S COMMON EQUITY 32
DESCRIPTION OF SECURITIES 33
LEGAL MATTERS 34
LEGAL PROCEEDINGS 34
EXPERTS 34
INTERESTS OF NAMED EXPERTS AND COUNSEL 34
</TABLE>
<PAGE>5
PROSPECTUS SUMMARY
The following summary contains basic information about this offering.
It likely does not contain all the information that is important to
you. For a more complete understanding of this offering, we encourage
you to read this entire document and the documents we have referred you
to.
About Us
We publish the "International Food and Beverage Source Directory" on
the Internet and also provide a hard copy to food and beverage
manufacturers. The Source is an all-inclusive advertising, promotion
and marketing directory for the sale of foods, beverages and
confectionery from around the world to the U.S and Canadian
marketplace.
We are also developing a website that will have an extensive range of
consumer-oriented information and product sales including chat rooms,
recipes and other informative and entertaining data on ethnic and
specialty foods and beverages. Our website will also include help for
consumers looking to locate and purchase a specific product in their
area. The website will offer such features as paid "Wine of the
Month" club memberships, travel packages and cruises hosted by famous
chefs and cooking schools worldwide.
520 North Kings Road, Suite 214, Los Angeles, CA 90048
(323) 852-9877
<TABLE>
<S> <C>
Market for common shares
and class A warrants. Currently, we have no trading
market for our common shares or
class A warrants. We will apply
for our common stock's quotation
on the OTC Bulletin Board.
We cannot guarantees that
our common stock will be quoted,
that an active trading and/or a
liquid market will develop or,
if developed, that it will be
maintained.
Absence of Dividends;
Dividend Policy We do not currently
intend to pay regular cash
dividends on our common stock.
Our board of directors will
review this policy based upon our
earnings and financial position.
We do not anticipate
paying dividends on our common
stock in the near future.
Transfer Agent Our transfer agent is Fidelity
Transfer Company.
</TABLE>
<PAGE>6
- ----------------------------------------------------------
RISK FACTORS
- ----------------------------------------------------------
In analyzing this offering, prospective investors should read this
entire prospectus and carefully consider, among other things, the
following risk factors:
1. If we do not receive additional financing, we may not be able to
develop our business and you could lose your entire investment
Even if all of the class A warrants are exercised, we may require
additional financing for our operations and working capital. We cannot
be assured that additional funds will be available from any source. If
these funds are not available, we may not be able to develop our
business and you may lose your entire investment.
2. Our management has limited experience, may not run the company in
a profitable manner and you may lose your entire investment.
Our management has limited experience in the conduct of a public
corporation. Compared to other companies, we do not have depth of
managerial, administrative and technical personnel. See "Management".
We may not run the company in a profitable manner due to this
inexperience and you may lose your entire investment.
3. Customers may not view our products as being any different from
our competitors products and we may not be able to achieve significant
national, regional and local name recognition resulting in decreased
revenue.
Many of our competitors have achieved significant national, regional
and local name recognition. Many of our competitors have longer
operating histories and greater financial resources. We cannot
be assured that customers will regard our products as sufficiently
distinguishable from similar products offered by the competitors. Our
sales could decrease in the event of significant or sustained price
discounting in the industry.
4. Independent market research has not been conducted on the
potential demand for our products.
We have not had an independent organization conduct market research
providing us with independent assurance that there is a potential
demand for our business operations. We cannot be assured that we will
be successful even in the event a market demand is independently
identified. See "BUSINESS ACTIVITIES."
5. We have not had any significant revenues from the sale of our
product and may not be profitable in the near future.
Until our recent acquisition of IF&B media Corporation, our activities
were limited to organizational and capital formation. We will
experience higher than normal operating expenses during initial
operations. To date, we have had no revenues. We had an
accumulated deficit of (241,018) at October 31, 1999. We cannot
assure future revenues or profits.
- --------------------------------------
SELLING SECURITY HOLDERS
- --------------------------------------
Global is registering 1,750,000 common shares currently outstanding and
2,000,000 common shares underlying Warrants for the account of the
following individuals or entities. The percentage owned prior to and
after the offering reflects all of the then outstanding common shares.
The amount and percentage owned after the offering assumes the sale of
all of the common shares being registered on behalf of the selling
security holders.
<PAGE>7
<TABLE>
<CAPTION>
Name and Amount Total Number % Owned Number of % Owned
Being Registered Owned Prior to shares Owned After
Currently offering After offering offering
<S> <C> <C> <C> <C>
Joel R. Shine
40,000 62,963 1.0% 22,963 .36%
500,000(1) 500,000(1) 25%(2) 0 0%
Timothy Miles
360,000 502,865 7.95% 142,865 2.26%
500,000(1) 500,000(1) 25%(2) 0 0%
Phillip Fox
290,000 340,000 5.38% 50,000 .79%
Moody's Financial
Relations, Inc.
310,000 310,000 4.90% 0 0%
Elizabeth Gheen
50,000 62,500 .99% 12,500 .2%
500,000(1) 500,000(1) 25%(2) 0 0%
Mitsuo Tatsugawa
80,000 92,500 1.3% 12,500 .2%
500,000(1) 500,000(1) 25%(2) 0 0%
David Gordon(3)
25,000 1,950,000 30.84% 1,925,000 30.44%
John Harrison(4)
25,000 1,950,000 30.84% 1,925,000 30.44%
Tamie Aceves
200,000 200,000 3.16% 0 0%
Dennis Knepp
5,000 5,000 .08% 0 0%
John Poli
100,000 100,000 1.58% 0 0%
J.W. Kennedy
10,000 10,000 .16% 0 0%
John Schaeffer
10,000 10,000 .16% 0 0%
Neal Mark Friedfertig
15,000 15,000 .24% 0 0%
Lawrence Gordon
5,000 5,000 .08% 0 0%
Griff E. Stone
10,000 10,000 .16% 0 0%
David N. Cohen
5,000 5,000 .08% 0 0%
500010 BC LTD.
10,000 10,000 .16% 0 0%
391566 BC LTD.
10,000 10,000 .16% 0 0%
Russell H. Trager and
Edna Trager JT WROS
5,000 5,000 .08% 0 0%
Janet Gildersleeve
5,000 5,000 .08% 0 0%
Jeff Gordon
2,500 2,500 .04% 0 0%
Steve Loeb
2,500 2,500 .04% 0 0%
Peter S. Palmer
and Patricia Palmer
5,000 5,000 .08% 0 0%
Henry Gordon
5,000 5,000 .08% 0 0%
Bruce M. Yelder
5,000 5,000 .08% 0 0%
Laurence Gross
5,000 5,000 .08% 0 0%
George Inserra
5,000 5,000 .08% 0 0%
Bill Zupner
10,000 10,000 .16% 0 0%
Phillip and Sara Sunshine
10,000 10,000 .16% 0 0%
Richard E. Marks as Custodian
For Dempsey Marks
10,000 10,000 .16% 0 0%
Richard E. and Rebecca Marks JT
10,000 10,000 .16% 0 0%
<PAGE>8
Norman Chandler Fox
20,000 20,000 .32% 0 0%
Stanley Fox
10,000 10,000 .16% 0 0%
Mitchell H. Fox and Ruth Fox
10,000 10,000 .16% 0 0%
Mark and Anne Mansfield
10,000 10,000 .16% 0 0%
Andy Gordon
5,000 5,000 .08% 0 0%
Frederick & Alma Tudal
Family Trust 25,000 .40% 0 0%
</TABLE>
(1)Represents common shares underlying the class A warrants.
(2)Represents percent of class A warrants currently owned. There were
1,475,000 class A warrants issued and outstanding prior to this
offering.
(3)Mr. Gordon is an officer and a director of Global.
(4)Mr. Harrison is an officer and a director of Global.
- ----------------------------------------------------------
TERMS OF THE OFFERING
- ----------------------------------------------------------
Plan of Distribution.
We are not selling any common shares on behalf of selling security
holders. We have no control or affect on the common shares of these
selling security holders who are not subject to any lock-up agreement.
The selling security holders may sell their common shares in one or
more transactions (which may include "block" transactions in the over-
the-counter market, in negotiated transactions or in a combination of
such methods of sales, at fixed prices which may be changed, at market
prices prevailing at the time of sale, at prices related to the
prevailing market prices or at negotiated prices.
The selling security holders may sell their shares directly to
purchasers. They may also sell to or through agents, dealers or
underwriters designated from time to time. These agents, dealers or
underwriters may receive compensation in the form of discounts,
concessions or commissions from the selling security holders and/or the
purchaser(s) of the common shares for whom they may act as agent or to
whom they may sell as principals, or both.
The selling security holders and any agents, dealers or underwriters
that act in connection with the sale of the common shares might be
deemed to be "underwriters" within the meaning of Section 2(11) of the
Securities Act, and any discount or commission received by them and any
profit on the resale of the common shares as principal might be deemed
to be underwriting discounts or commissions under the Securities Act.
Global is not aware of any current or future plans, proposals,
arrangements or understandings by any selling security holders to
distribute their registered common shares of Global to their respective
outstanding shareholders or partners.
Global is not aware of any plans, arrangements or understandings by any
selling security holders to sell their registered common shares to any
particular individual(s) or to use such registered shares to satisfy
contractual obligations.
Global will receive no portion of the proceeds from the sale of the
common shares by the selling shareholder. Global will pay all of the
costs relating to the registration of this offering (other than any
fees and expenses of counsel for the selling security holders). The
selling security holders will pay any commissions, discounts or other
fees payable to a broker, dealer, underwriter, agent or market maker in
connection with the sale of their common shares.
Offering Period. This offering will terminate on or before June 30,
2000. In Global's sole discretion, the offering of common shares may
be extended to September 30, 2000.
<PAGE>9
- --------------------------------------------------------------
SOURCE AND USE OF PROCEEDS
- --------------------------------------------------------------
We shall not receive any cash proceeds from the sale of common shares
by the selling security holders.
We shall use any proceeds received from the subsequent exercise of the
class A warrants for working capital and to expand operations.
Due to the uncertainty of the timing and amount of actual funds, which
we may receive upon exercise of the class A warrants, we have
established the following breakdown of estimated uses.
Cost of sales $400,000
Overheads 300,000
Internet start-up
and development 150,000
Reserve 150,000
----------
$1,000,000
(1)Cost of sales includes directory printing, distribution,
commissions, shows, promotion, advertising and consultant fees.
(2)Overheads includes salaries, travel, telephone, insurance, office
costs and equipment.
(3)Internet start-up and development costs include serving and hosting,
website design, technical and implementation costs and established
sponsored deals.
If all of the class A Warrants are exercised, the proceeds shall be
utilized over a one year period.
- ------------------------------------------------------
DILUTION
- ------------------------------------------------------
Further Dilution. The Company may issue additional restricted common
shares pursuant to private business transactions. Any sales under Rule
144 after the applicable holding period may have a depressive effect
upon the market price of the Company's common shares and investors in
this offering.
We do not have any plans, proposals, arrangements or understandings
with respect to any private business transactions.
- -------------------------------------------------------
GLOBAL
- -------------------------------------------------------
Global's principal offices are located at 520 North Kings Road, Suite
214, Los Angeles, California 90048. Its telephone number at such
address is (323) 852-9877. These offices consist of 300 square feet
and are provided free of charge from Mr. Gordon, secretary, vice-
president and director of Global.
<PAGE>11
Employees. As of the date of this prospectus, Global has no full time
and no part time employees. See "RISK FACTORS."
Global employs the services of sub-contractors as needed.
Government Regulations. At the present time, there are no pervasive
regulations of Global's business.
Competition. Although Global does not know of any food and beverage
directory geared to the United States market which promotes foreign
food and beverage makers, there is significant competition in the food
and beverage promotion industry. Global competes with established
companies and other entities (many of which possess substantially
greater resources than the Company). Almost all of the companies with
which Global competes are substantially larger, have more substantial
histories, backgrounds, experience and records of successful
operations, greater financial, technical, marketing and other
resources, more employees and more extensive facilities than Global
now has, or will have in the foreseeable future. It is also likely
that other competitors will emerge in the near future. We cannot be
assured that we will compete successfully with other established
<PAGE>10
companies. Global shall compete on the basis of price and quality.
Inability to compete successfully might result in increased costs,
reduced yields and additional risks to the investors herein.
Reports to Security Holders
Global shall become subject to the informational requirements of the
Securities Exchange Act of 1934 and in accordance therewith will file
reports and other information with the Securities and Exchange
Commission. Global has not yet filed any reports with the Securities
and Exchange Commission.
The reports and other information filed by Global can be inspected and
copied at the public reference facilities maintained by the Commission
in :
- - Washington, D.C.;
- - Chicago Regional Office, Citicorp
Center, 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661-2511; and
- - the New York Regional Office, 7 World Trade
Center, New York, New York 10048.
Copies of such material can be obtained from the Public Reference
Section of the Commission, Washington, D.C. 20549 at prescribed rates.
We will furnish our shareholders:
- - an annual report containing financial
information examined and reported upon by its
certified public accountants;
- - unaudited financial statements for each of the
first three quarters of the fiscal year; and
- - additional information concerning the business
and operations of the Company deemed
appropriate by the Board of Directors.
- -------------------------------------------------
BUSINESS ACTIVITIES
- -------------------------------------------------
Through our internet website, Global Foods Online.com, and our printed
directories, Global will provide an effective forum for food, beverage
and confectionery manufacturers from around the world to sell their
products in the United States and Canada.
Global Foods Online. com. Our website is currently under development.
We anticipate that the website will be completed in the next sixty
days. Global's website will be accessible to both the food-industry
purchasing professionals and the millions of average consumers who shop
via the Internet through countless numbers of Internet browsers.
Global's website will have an extensive range of consumer-oriented
information and product sales including chat rooms, recipes and other
informative and entertaining data on ethnic and specialty foods and
beverages. It will also include help for consumers looking to locate
and purchase a specific product in their area. The website will offer
such features as paid "Wine of the Month" club memberships, travel
packages and cruises hosted by famous chefs and cooking schools
worldwide.
While online, website users can join live chats with famous chefs,
purchase diet programs and cookbooks as well as kitchenware and
cookware, join recipe exchange clubs and generally keep on top of
what's happening in the food industry around the world with food trend
updates. Also featured will be a guide to famous restaurants around
the world, including their menus and most popular recipes, sources for
food and beverage giftpacks, global food magazine subscriptions, audio
and video tapes on cooking and much more.
<PAGE>11
The focal point of the Company's website will be a frequently-updated
directory of specialty food and beverage manufacturers from around the
world who desire to sell to the United States and Canadian markets. A
full color version of this industry-focused directory will also be
available in print form.
Printed Directory. The "International Food and Beverage Source
Directory" will be printed quarterly, published in a magazine style and
sent, at no change, to an estimated 50,000 selected food buyers,
distributors, brokers, wholesalers, importers, supermarket buyers and
other decision-makers in the United States and Canada. Our management
believes that these food-industry professionals are constantly seeking
new products and trends to add to the array of ethnic specialty foods
available in supermarkets, independent retail stores, food service
groups and restaurants and are required by food manufacturers to
represent them for sales to retailers. We will include non-food
oriented advertisers, including airlines, financial and credit card
companies, hotels and a myriad of other related service industries.
We are doing preparatory work on the directory and are producing sales
and media kits and promotion literature. We have sent the initial
forms of these items to government agencies to obtain target audience
lists of USA specialty food, beverage and confectionery buyers. Our
in house expanded list will also detail food and beverage manufacturing
companies obtained through our contacts with over 80 countries.
Market. Currently, the United States market alone is valued in excess
of $49 billion annually for the sales of specialty, ethnic and gourmet
foods (Gourmet News 1997).
Marketing Strategy. Our business will initially come from our
production of a series of Source International: Food & Beverage
Directories sent free of charge to professional buyers in the United
States. The directories will contain small to medium emerging
companies throughout the world who will be offered paid advertising
space as full color entries describing and depicting their products
photographically. There will be six alternative sized ads at various
prices, available to pre-formatted layouts, country by country,
category by category, from the main sourcing areas. Global will
target the United States market first and then expand into the world-
wide market.
Once the core business has been established in printed form, we will
develop associated activities covering "Help in Exporting" which will
include seminars and how to publications and newsletters.
We may develop specific publications relating to major categories
during country and product promotional periods at the retail level.
These publications will target distributors, brokers, importers and
wholesalers of imported multi-cultural specialty foods and beverages
Revenue. The Company will receive revenue from the sale of
advertisements on the website and in the printed directory. The
advertising fees will be dependent upon the size and location of each
advertisement and will be determined on a per advertisement basis.
We hope to achieve financial sales once our initial mailing and other
additional sales methods have been carried out. We already have
received support of the appropriate government agencies related to the
export of food and beverage branded products in contacting their SME
food and beverage manufacturers and producers. Additional income will
come from corporate advertisers in associated services in the fields of
finance, shipping and distribution, insurance, travel and exhibition
organizers. No soliciting for income has been carried out to date.
Advertisers in Global's directories will be offered pages on our
website free of charge, but advertisers will pay a 5% brokerage fee of
gross sales value of any single sale that is carried out on our
website. Additional revenue will be received from banner advertising
on our website pages, celebrity chef chat room visits, ethnic cookery
books and utensil direct sales, cookery schools and gourmet holiday
promotions, sponsored specific products and country promotions.
<PAGE>12
- ----------------------------------------------------------------
MANAGEMENT'S DISCUSSION OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
- ----------------------------------------------------------------
Trends and Uncertainties. Demand for Global's services will be
dependent on, among other things, general economic conditions which are
cyclical in nature. Inasmuch as a major portion of Global's activities
is the directory publication solely niche marketed to food and beverage
manufacturers, Global's business operations may be adversely affected
by Global's competitors and prolonged recessionary periods.
Capital and Source of Liquidity. Global currently has no material
commitments for capital expenditures.
We recently completed an offering of our common shares pursuant to Rule
505 of the Securities Act of 1933. Pursuant to the offering, we sold
858,810 common shares for the aggregate purchase price of $.10 per
common share or $85,881. In April 1999, we advanced $30,000 of those
proceeds to our president for the purpose of establishing a sales
office in London, England.
Global expects that the net proceeds from our recent offering, and the
cash flow from future operations upon commencement, if any, will be
sufficient to allow us to meet the expected growth in demand for our
products and services. Additionally, Global expects to utilize
any proceeds received from the exercise of the class A warrants
to expand operations. However, there can be no assurance that
sufficient warrant exercise will occur or that future advertising sales
will meet Global's growth expectations. Should either of these
fail to occur, Global may elect to
- reduce the planned expansion of operations or
- pursue other financing alternatives such as a rights offering,
warrant exercise or borrowings.
Implementation of either of the foregoing options could delay or
diminish Global's planned growth and adversely affect our
profitability.
On a long-term basis, liquidity is dependent on increased revenues from
operations, additional infusions of equity and debt financing. Global
does not have sufficient moneys to carry on operations for the next 12
months. Global believes that additional capital and debt financing in
the next twelve months will allow Global to commence our marketing and
sales efforts and thereafter result in revenue and greater liquidity in
the long term. We will have to pursue other financing alternatives as
described above. However, we cannot be assured that we will be able
to obtain additional equity or debt financing in the future, if at all.
Results of Operations. Prior to March 1999, our activities have been
limited to organization and capital formation. During March 1999, we
acquired 100% of the stock of IB&F Media Corporation(Media) in exchange
for 4,000,000 shares of their common stock. At the merger date, Media
was an inactive company, which had no assets and had not begun business
operations. For the year ended April 30, 1999, Global had operating
expenses of $121,339 consisting primarily of consulting fees of
$99,355, printing of $11,000, professional fees of $4,928 and
miscellaneous expenses of $6,056.
For the six months ended October 31, 1999, we had no revenue and we had
operating expenses of $115,437. The operating expense consisted
primarily of consulting fees of $35,063, officers advances of $21,000,
printing of $16,500, professional fees of $3,785 with miscellaneous
expenses of $9,089.
Plan of Operation. Global, over the next twelve months intends to
distribute our directories in the United States and internationally and
to utilize the World Wide Web in the implementation of its planned
business operations. Global has no need of product research and
development. Management possesses the experience to implement our
business plan. No significant equipment purchases are planned over
the next twelve months.
<PAGE>13
Global shall seek to maintain low operating expenses while
commencing operations and increasing operating revenues. Global is
focusing on maintaining a low cost administrative approach. However,
increased marketing expenses will probably occur in future periods as
Global attempts to further increase its marketing and sales efforts.
Impact of Year 2000. The Year 2000 issue is the result of computer
programs being written using two digits rather than four to define the
applicable year. Any of the Company's computer programs that have
time-sensitive software could have recognized a date using 000 as the
year 1900 rather than the year 2000. We did not experience any impact
from the commencement of the year 2000.
- ---------------------------------------------------------
MANAGEMENT
- ---------------------------------------------------------
Officers and Directors. Pursuant to the Articles of Incorporation,
each director shall serve until the annual meeting of the stockholders,
or until his successor is elected and qualified. Global's basic
philosophy mandates the inclusion of directors who will be
representative of management, employees and the minority shareholders
of Global. Directors may only be removed for "cause". The term of
office of each officer of Global is at the pleasure of Global's Board.
The principal executive officers and directors of Global are as
follows:
<TABLE>
<CAPTION>
Name Position Term(s) of Office
<S> <C> <C>
John Harrison, age 68 President/Director April 6, 1999
To present
David Gordon, age 71 Secretary/Vice President April 6, 1999
Director To present
</TABLE>
Resumes:
David Gordon - Mr. Gordon was the co-founder of IF&G Media Corporation
from inception in November 1998 until its merger with the Company.
From 1994 to 1999, Mr. Gordon was self-employed as a public relations
consultant, marketing consultant and a publishing consultant.
John Harrison - Mr. Harrison was the co-founder of IF&G Media
Corporation from inception in November 1998 until its merger with the
Company. From March 1994 to present, Mr. Harrison has been the owner,
senior partner and designer of Harrison Consultancy, a design and
marketing consultancy. From March 1992 to present, Mr. Harrison has
been chief executive officer and 50% owner of Shamrock foods Exports
Ltd., a food export marketing to the United States.
Mr. Phillip Fox resigned as a director of the Company due to time
constraints in his other endeavors during the third quarter of 1999
Remuneration
To date, Global has not paid any remuneration to its officer other than
Phillip Fox who received 290,000 common shares for services rendered.
Board of Directors Compensation. Members of the Board of Directors
will receive a yet to be determined amount per meeting if these
directors are not separately compensated by Global and will be required
to attend a minimum of four meetings per fiscal year. All expenses for
meeting attendance or out of pocket expenses connected directly with
their Board representation will be reimbursed by Global. Director
liability insurance may be provided to all members of the Board of
Directors. Global has not yet obtained such insurance and does not
have any specifics for available cost and coverage. Global does not
have a specific time frame to obtain the insurance. No
differentiation is made in the compensation of "outside directors" and
those officers of Global serving in that capacity.
Conflicts of Interest Policy. Global has adopted a policy that any
transactions with directors, officers or entities of which they are
also officers or directors or in which they have a financial interest,
will only be on terms consistent with industry standards and approved
<PAGE>14
by a majority of the disinterested directors of Global's Board of
Directors. The Bylaws of Global provide that no such transactions by
Global shall be either void or voidable solely because of such
relationship or interest of directors or officers or solely because
such directors are present at the meeting of the Board of Directors of
Global or a committee thereof which approves such transactions, or
solely because their votes are counted for such purpose if:
- the fact of the common directorship or financial interest is
disclosed or known by the Board of Directors or committee and noted in
the minutes, and the Board or committee authorizes, approves or
ratifies the contract or transaction in good faith by a vote for that
purpose without counting the vote or votes of such interested
directors; or
- the fact of the common directorship or financial interest is
disclosed to or known by the shareholders entitled to vote and they
approve or ratify the contract or transaction in good faith by a
majority vote or written consent of shareholders holding a majority of
the common shares entitled to vote (the votes of the common or
interested directors or officers shall be counted in any such vote of
shareholders), or
- the contract or transaction is fair and reasonable to Global at
the time it is authorized or approved. In addition, interested
directors may be counted in determining the presence of a quorum at a
meeting of the Board of Directors of Global or a committee thereof
which approves such transactions.
Subject to the provisions of Nevada Revised Civil Statues and any
amendments thereto, a director of Global shall not be liable to Global
or our shareholders for monetary damages for an act or omission in the
director's capacity as a director, except that this provision does not
eliminate or limit the liability of a director to the extent the
director is found liable for:
- a breach of the director's duty of loyalty to Global or our
shareholders;
- an act or omission not in good faith that constitutes a breach
of duty of the Director to the Corporation or an act or omission that
involves intentional misconduct or a knowing violation of the law;
- A transaction from which the Director received an improper
benefit, whether or not the benefit resulted from an action taken
within the scope of the Director's office; or
- an act or omission for which the liability of a Director is
expressly provided by an applicable statute.
- ------------------------------------------------------
CERTAIN TRANSACTIONS
- ------------------------------------------------------
Officer Advance. On April 23, 1999, we advanced $30,000 to our
president for the purpose of establishing a sales office in London,
England. Global expects that the full amount of the advance will be
utilized for authorized business purposes during the fiscal year ended
April 30, 2000. We advanced an additional $21,000 during the six
months ended October 31, 1999. As of the date of this prospectus, no
further funds have been advanced. All expended funds have been used
for office expenses and related travel expenses.
- ----------------------------------------------------------------
PRINCIPAL SHAREHOLDERS
- ----------------------------------------------------------------
There are currently 6,931,960 common shares outstanding. The following
tabulates holdings of shares of Global by each person who, subject to
the above, at the date of this prospectus, holds of record or is known
by management to own beneficially more than 5.0% of the common shares
and, in addition, by all directors and officers of Global individually
and as a group.
<PAGE>15
Shareholdings at Date of
This Prospectus
<TABLE>
<CAPTION>
Percentage of
Outstanding
shares as
Adjusted
to Reflect
Percentage Conclusion
Number & Class Prior to of the
Name and Address of shares(1) offering offering(2)
<S> <C> <C> <C>
John Harrison
70 Alder Lodge
Stevenage Road
London SW6 6NR England 1,950,000 28.13% 21.55%
David Gordon
520 North Kings Road
Suite 214
Los Angeles, CA 90048 1,950,000 28.13% 21.55%
Timothy Miles
10 Office Park Road, Suite 222
Hilton Head Island, SC 29928 502,865 7.25% 1.60%
All Officers and Directors
as a Group (3 persons) 3,900,000 56.26% 43.10%
</TABLE>
(1) Pursuant to Rule 13d-3 under the Securities Exchange Act of 1934,
as amended, beneficial ownership of a security consists of sole or
shared voting power (including the power to vote or direct the voting)
and/or sole or shared investment power (including the power to dispose
or direct the disposition) with respect to a security whether through a
contract, arrangement, understanding, relationship or otherwise.
Unless otherwise indicated, each person indicated above has sole power
to vote, or dispose or direct the disposition of all shares
beneficially owned, subject to applicable community property laws.
(2) Assumes exercise of warrants and sale of underlying shares.
- ----------------------------------------------------------
MARKET FOR REGISTRANT'S COMMON EQUITY AND
RELATED STOCKHOLDER MATTERS
- ----------------------------------------------------------
Prior to this offering, there has been no market for Global's common
stock. Upon successful completion of this offering, Global intends to
apply to have its common stock traded on the OTC Bulletin Board. If we
are not accepted on the OTC Bulletin Board, we will apply for the
quotation of our common shares on the pink sheets.
Holders. The approximate number of holders of record of Global's .001
par value common stock, as of June 30, 1999 was 273.
Dividends. Holders of our common stock are entitled to receive such
dividends as may be declared by our Board of Directors.
Broker-Dealer Sales of Company Securities. Until we successfully
get our common shares quoted on the NASDAQ quotation system, if ever,
our securities may be covered by a rule imposes additional sales
practice requirements on broker-dealers who sell such securities to
persons other than established customers and accredited investors
(generally institutions with assets in excess of $5,000,000 or
individuals with net worth in excess of $1,000,000 or annual income
exceeding $200,000 or $300,000 jointly with their spouse).
For transactions covered by the rule, the broker-dealer must make a
special suitability determination of the purchaser and have received
the purchaser's written agreement to the transaction prior to the sale.
In order to approve a person's account for transactions in designated
securities, the broker or dealer must
<PAGE>16
- obtain information concerning the person's financial situation,
investment experience and investment objectives;
- reasonably determine that transactions in designated securities
are suitable for the person and that the person has sufficient
knowledge and experience in financial matters that the person
reasonably may be expected to be capable of evaluating the rights of
transactions in designated securities; and
- deliver to the person a written statement setting forth the
basis on which the broker or dealer made the determination stating in a
highlighted format that it is unlawful for the broker or dealer to
effect a transaction in a designated security unless the broker or
dealer has received, prior to the transaction, a written agreement to
the transaction from the person; and stating in a highlighted format
immediately preceding the customer signature line that the broker or
dealer is required to provide the person with the written statement and
the person should not sign and return the written statement to the
broker or dealer if it does not accurately reflect the
person's financial situation, investment experience and investment
objectives and obtain from the person a manually signed and dated copy
of the written statement.
A designated security means any equity security other than a security
- registered, or approved for registration upon notice of
issuance on a national securities exchange that makes transaction
reports available;
- authorized or approved for authorization upon notice of
issuance, for quotation in the NASDAQ system;
- that has a price of five dollars or more or . . .
- whose issuer has net tangible assets in excess of $2,000,000
demonstrated by financial statements dated less than fifteen months
previously that the broker or dealer has reviewed and has a reasonable
basis to believe are true and complete in relation to the date of the
transaction with the person.
Consequently, the rule may affect the ability of broker-dealers to sell
Global's securities and also may affect the ability of purchasers in
this offering to sell their shares in the secondary market.
The Company's securities will likely trade below $5.00 and such
securities will be covered by the penny stock rules discussed above.
- --------------------------------------------------------------
DESCRIPTION OF SECURITIES
- ---------------------------------------------------------------
Qualification. The following statements constitute brief summaries of
the Company's Certificate of Incorporation and Bylaws, as amended.
The Company's articles of incorporation authorize it to issue up to
50,000,000 common shares. Shares of common stock purchased in this
offering will be fully paid and non-assessable.
Common Stock. Holders of our common shares are entitled to cast one
vote for each share held at all shareholders meetings for all purposes.
There are no cumulative voting rights. Upon liquidation or
dissolution, each outstanding common share will be entitled to share
equally in the assets of Global legally available for distribution to
shareholders after the payment of all debts and other liabilities.
Common shares are not redeemable, have no conversion rights and carry
no preemptive or other rights to subscribe to or purchase additional
common shares in the event of a subsequent offering. All outstanding
common shares are, and the shares offered hereby will be when issued,
fully paid and non-assessable.
There are no limitations or restrictions upon the rights of the Board
of Directors to declare dividends out of any funds legally available
therefor. We have not paid dividends to date and we do not
anticipatedthat any dividends will be paid in the foreseeable future.
The Board of Directors initially may follow a policy of retaining
earnings, if any, to finance the future growth of Global. Accordingly,
future dividends, if any, will depend upon, among other considerations,
Global's need for working capital and our financial conditions at the
time.
Warrants. Global authorized the issuance of 2,000,000 class A
warrants. There are currently outstanding, 2,000,000 class A warrants.
The class A warrants are exercisable into one common share at the
<PAGE>17
purchase price of $.50. The class A warrants shall be exercisable for
a period of two years. We can redeem the class A warrants at $.001
per class A warrant upon thirty days notice.
Transfer Agent. Fidelity Transfer Company acts as our transfer agent.
- -----------------------------------------------------------
LEGAL MATTERS
- -----------------------------------------------------------
The validity of the securities being offered hereby will be passed upon
for Global by Jody M. Walker, Attorney At Law, located in Littleton,
Colorado.
- --------------------------------------------------------
LEGAL PROCEEDINGS
- --------------------------------------------------------
Global is not involved in any legal proceedings as of the date of this
prospectus.
- --------------------------------------------------------
EXPERTS
- --------------------------------------------------------
The audited financial statements included in this prospectus have been
so included in reliance on the report of James E. Scheifley and
Associates, P.C., Certified Public Accountants, on the authority of
such firm as experts in auditing and accounting.
- --------------------------------------------------------
INTERESTS OF NAMED
EXPERTS AND COUNSEL
- --------------------------------------------------------
None of the experts or counsel named in the prospectus are affiliated
with Global.
- ---------------------------------------------------------
AVAILABLE INFORMATION
- ----------------------------------------------------------
Global has filed with the Securities and Exchange Commission a
registration statement under the Act with respect to the securities
being offered. This prospectus does not contain all of the information
set forth in the registration statement, certain parts of which are
omitted in accordance with the Rules and Regulations of the Commission.
Copies of such materials may be examined without charge at, or obtained
upon payment of prescribed fees from,
- the Public Reference Section of the Commission at Room 1024,
Judiciary Plaza, 450 Fifth Street, N.W., Washington, DC 20549,
- the Chicago Regional Office, Citicorp Center, 500 West Madison
Street, Suite 1400, Chicago, Illinois 60661-2511 and
- the New York Regional Office, 7 World Trade Center, New York,
New York 10048.
The Commission maintains a Web site -- //www.sec.gov -- that contains
reports, proxy and information statements and other information
regarding issuers that file electronically with the Commission.
Until , 2000 (90 days after the date of the prospectus, all
persons effecting transactions in our registered common shares, whether
or not participating in the offering, may be required to deliver a
prospectus. This is in addition to the obligation of such persons to
deliver a prospectus when acting as underwriters and with respect to
their unsold allotments or subscriptions.
<PAGE>18
No dealer, salesman, agent or any other person has been authorized to
give any information or to make any representation other than those
contained in this prospectus. If given or made, you must not rely on
this information or representation as having been authorized by us,
or the underwriter, if an underwriter assists in the sale of the
securities. This prospectus does not constitute an offer or a
solicitation by any person in any state, territory or possession of the
United States in which such offer or solicitation is not authorized by
the laws thereof, or to any person to whom it is unlawful to make such
offer or solicitation.
Neither the delivery of this prospectus or any sale made hereunder
shall under any circumstances, create an implication that there has not
been any change in the facts set forth in this prospectus or in our
affairs since the date hereof.
- --------------------------------------------------------
FINANCIAL STATEMENTS
- --------------------------------------------------------
Index to Financial Statements
Independent Auditor's Report dated May 21, 1999
Balance Sheet for the year ended April 30, 1999
Statement of Operations for Year Ended April 30, 1999 and April 30,
1998
Statement of Changes in Stockholders' Equity For the Years ended April
30, 1999 and 1998
Statements of Cash Flows For the Years Ended April 30, 1999 and 1998
Notes to Financial Statements
Unaudited Balance Sheet as of October 31, 1999
Statement of Operations for the six months ended October 31, 1999 and
1998
Statement of Cash Flows for the six months ended October 31, 1999 and
1998
Notes to Financial Statements
<PAGE>19
INDEPENDENT AUDITOR'S REPORT
Board of Directors and shareholders
Global Foods Online, Inc.
(a Development Stage Company)
We have audited the balance sheet of Global Foods Online, Inc. as of
April 30, 1999, and the related statements of operations, changes in
stockholders' equity, and cash flows for each of the years in the two
year period then ended and for the period from inception (February 4,
1997) to April 30, 1999. These financial statements are the
responsibility of the Company's management. Our responsibility is to
express an opinion on these financial statements based on our audits.
We conducted our audits 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 audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above, present
fairly, in all material respects, the financial position of Global
Foods Online, Inc. as of April 30, 1999, and the results of its
operations and cash flows each of the years in the two year period then
ended and for the period from inception (February 4, 1997) to April 30,
1999, in conformity with generally accepted accounting principles.
James E. Scheifley & Associates, P.C.
Certified Public Accountants
Denver, Colorado
May 21, 1999
<PAGE>20
Global Foods Online, Inc.
(A Development Stage Company)
Balance Sheet
April 30, 1999
ASSETS
Current assets: 1999
Cash $ 7,095
Officer advance 30,000
Total current assets 37,095
---------
Total assets $ 37,095
STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 6,528
---------
Total current liabilities 6,528
Stockholders' equity:
common stock, $.001 par value,
50,000,000 shares authorized, 6,073,160 shares
issued and outstanding 6,073
Additional paid in capital 150,075
(Deficit) accumulated during
development stage (125,581)
---------
30,567
---------
$ 37,095
See accompanying notes to financial statements.
<PAGE>21
Global Foods Online, Inc.
(A Development Stage Company)
Statements of Operations
Years Ended April 30, 1999 and 1998
<TABLE>
<CAPTION>
Year Year Period From
Ended Ended Inception To
April 30, April 30, April 30,
1999 1998 1999
<S> <C> <C> <C>
Operating expenses $ 121,339 $ - $ 121,339
----------- ----------- -----------
(Loss from operations) and net (loss) $ (121,339) $ - $ (121,339)
Per share information:
Basic and diluted (loss) per common share $ - $ - $ -
Weighted average shares outstanding 1,000,000 97,594 1,000,000
</TABLE>
See accompanying notes to financial statements.
<PAGE>22
Global Foods Online, Inc.
(A Development Stage Company)
Statement of Changes in Stockholders' Equity
For the Period From Inception to April 30, 1999
<TABLE>
Deficit
Additiona Accumulated
Common Stock Paid-in During Develop-
ACTIVITY shares Amount Capital ment Stage Total
<S> <C> <C> <C> <C> <C> <C>
Post bankruptcy shares outstanding
on February 4, 1997 98,160 $ 98 $ - $ (4,242) $
(4,144)
---------- ----------- ----------- ----------- ---------
- --
Balance April 30, 1997 through
April 30, 1998 98,160 (4,242)
(4,144)
Common stock sold for cash in
February 1999 @ $.002 per share 525,000 525 525
1,050
Shares issued to complete merger
during March 1999 @ $.002 per share 4,000,000 4,000 4,000
8,000
Common stock sold for cash in
April 1999 @ $.10 per share 450,000 450
44,550 45,000
Common issued for services in
April 1999 @ $.10 per share 1,000,000 1,000 99,000
100,000
Sale of common stock warrants in
February 1999 @ $.001 per warrant 2,000
2,000
Net (loss) for the year
ended April 30, 1999 - - - (121,339)
(121,339)
---------- ----------- ----------- ----------- ---------
- --
Balance, April 30, 1999 6,073,160 $ 6,073 $ 150,075 $ (125,581) $
30,567
</TABLE>
See accompanying notes to financial statements.
<PAGE>23
Global Foods Online, Inc.
(A Development Stage Company)
Statements of Cash Flows
Years Ended April 30, 1999 and 1998
<TABLE>
Year Year Period From
Ended Ended Inception To
April 30 April 30 April 30
1999 1998 1999
<S> <C> <C>
Net income (loss) $ (121,339) $ - $ (125,581)
Adjustments to reconcile net income to net
cash provided by operating activities:
common stock issued for services 100,000 100,098
Charge off of goodwill 8,000 8,000
Changes in assets and liabilities:
(Increase in officer advance) (30,000) (30,000)
Increase in accounts payable 2,384 - 6,528
----------- ----------- ------------
Total adjustments 80,384 - 84,626
----------- ----------- ------------
Net cash
provided by (used in)
operating activities (40,955) (40,955)
Financing activities:
Sale of common stock for cash 46,050 46,050
Sale of common stock warrants 2,000 - 2,000
----------- ----------- ------------
Net cash provided by financing activities 48,050 - 48,050
----------- ----------- ------------
Increase (decrease) in cash 7,095 - 7,095
Cash and cash equivalents,
beginning of period - - -
----------- ----------- ------------
Cash and cash equivalents,
end of period $ 7,095 $ - $ 7,095
</TABLE>
See accompanying notes to financial statements.
<PAGE>24
Global Foods Online, Inc.
(A Development Stage Company)
Statements of Cash Flows
Years Ended April 30, 1999 and 1998
<TABLE>
<CAPTION>
Year Year Period From
Ended Ended Inception To
April 30 April 30 April 30
1999 1998 1999
<S> <C> <C> <C>
Supplemental cash flow information:
Cash paid for interest $ - $ - $ -
Cash paid for income taxes $ - $ - $ -
</TABLE>
See accompanying notes to financial statements.
<PAGE>25
Global Foods Online, Inc.
Notes to Financial Statements
April 30, 1999
Note 1. Organization and Summary of Significant Accounting Policies.
The Company was incorporated in Nevada on September 14, 1990. The
Company is in its development stage and to date its activities have
been limited to organization and capital formation. The Company's
development stage began on February 4, 1997 upon the issuance by the
United States Bankruptcy Court, District of Idaho of an order approving
Trustee's report of no distribution and closing estate with the respect
to the Company's filing under Chapter 7 of the Bankruptcy Code. The
Company was formerly known as Valley Fish Products, Inc. The Company
plans to distribute domestic and international food products in the
United States and internationally and to utilize the World Wide Web in
the implementation of its planned business operations.
During February 1999, the Company's Board of Directors authorized
reverse stock splits aggregating 1 share for 200 shares. All share and
per share information included in these financial statements has been
restated to reflect the results of the reverse stock splits.
Principles of Consolidation
The consolidated financial statements include the accounts of the
Company and its wholly owned subsidiary, IF&B Media Corporation. All
significant inter-company balances and transactions have been
eliminated.
Property, Plant and Equipment:
Property, plant and equipment are recorded at cost and are depreciated
based upon estimated useful lives using the straight-line method.
Estimated useful lives range from 3 to 5 years.
Loss per share:
Basic Earnings per share ("EPS") is computed by dividing net income
available to common stockholders by the weighted average number of
common stock shares outstanding during the year. Diluted EPS is
computed by dividing net income available to common stockholders by
the weighted-average number of common stock shares outstanding during
the year plus potential dilutive instruments such as stock options
and warrants. The effect of stock options on diluted EPS is
determined through the application of the treasury stock method,
whereby proceeds received by the Company based on assumed exercises
are hypothetically used to repurchase the Company's common stock at
the average market price during the period. Loss per share is
unchanged on a diluted basis since the assumed exercise of common stock
equivalents would have an anti-dilutive effect.
Intangible Assets:
The Company makes reviews for the impairment of long-lived assets and
certain identifiable intangibles whenever events or changes in
circumstances indicate that the carrying amount of an asset may not be
recoverable. Under SFAS No. 121, an impairment loss would be
recognized when estimated future cash flows expected to result from the
use of the asset and its eventual disposition is less than its carrying
amount. No such impairment losses have been identified by the Company
to date.
Cash:
For purposes of the statement of cash flows, the Company considers all
highly liquid debt instruments purchased with a maturity of three
months or less to be cash equivalents.
Estimates:
The preparation of the Company's financial statements requires
management to make estimates and assumptions that affect the amounts
reported in the financial statements and accompanying notes. Actual
results could differ from these estimates
Fair value of financial instruments
The Company's short-term financial instruments consist of cash and cash
equivalents and accounts payable. The carrying amounts of these
financial instruments approximates fair value because of their short-
term maturities. Financial instruments that potentially subject the
Company to a concentration of credit risk consist principally of cash.
During the year the Company did not maintain cash deposits at financial
<PAGE>26
institutions in excess of the $100,000 limit covered by the Federal
Deposit Insurance Corporation. The Company does not hold or issue
financial instruments for trading purposes nor does it hold or issue
interest rate or leveraged derivative financial instruments
Stock-based Compensation
The Company adopted Statement of Financial Accounting Standard No. 123
(FAS 123), Accounting for Stock-Based Compensation beginning with the
Company's first quarter of 1996. Upon adoption of FAS 123, the Company
continued to measure compensation expense for its stock-based employee
compensation plans using the intrinsic value method prescribed by APB
No. 25, Accounting for Stock Issued to Employees. Stock based
compensation paid by the Company during the period ended April 30, 1999
is disclosed in Note 4.
New Accounting Pronouncements
SFAS No. 130, "Reporting Comprehensive Income", establishes guidelines
for all items that are to be recognized under accounting standards as
components of comprehensive income to be reported in the financial
statements. The statement is effective for all periods beginning after
December 15, 1997 and reclassification financial statements for earlier
periods will be required for comparative purposes. To date, the
Company has not engaged in transactions which would result in any
significant difference between its reported net loss and comprehensive
net loss as defined in the statement.
In March 1998, the American Institute of Certified Public Accountants
issued Statement of Position 98-1, Accounting for the Costs of
Computer Software Developed or Obtained for Internal Use ("SOP 98-
1"). SOP 98-1 provides authoritative guidance on when internal-use
software costs should be capitalized and when these costs should be
expensed as incurred.
Effective in 1998, the Company adopted SOP 98-1, however the Company
has not incurred costs to date which would require evaluation in
accordance with the SOP.
Effective December 31, 1998, the Company adopted SFAS No. 131,
Disclosures about Segments of an Enterprise and Related Information
("SFAS 131"). SFAS 131 superseded SFAS No. 14, Financial Reporting
for Segments of a Business Enterprise. SFAS 131 establishes standards
for the way that public business enterprises report information about
operating segments in annual financial statements and requires that
those enterprises report selected information about operating
segments in interim financial reports. SFAS 131 also establishes
standards for related disclosures about products and services,
geographic areas, and major customers. The adoption of SFAS 131 did
not affect results of operations or financial position. To date, the
Company has not operated in its one planned business activity.
Effective December 31, 1998, the Company adopted the provisions of
SFAS No. 132, Employers' Disclosures about Pensions and Other Post-
retirement Benefits ("SFAS 132"). SFAS 132 supersedes the disclosure
requirements in SFAS No. 87, Employers' Accounting for Pensions, and
SFAS No. 106, Employers' Accounting for Post-retirement Benefits
Other Than Pensions. The overall objective of SFAS 132 is to improve
and standardize disclosures about pensions and other post-retirement
benefits and to make the required information more understandable.
The adoption of SFAS 132 did not affect results of operations or
financial position.
The Company has not initiated benefit plans to date which would
require disclosure under the statement.
In June 1998, the Financial Accounting Standards Board issued SFAS
No. 133, Accounting for Derivative Instruments and Hedging Activities
("SFAS 133"), which is required to be adopted in years beginning
after June 15, 1999. SFAS 133 will require the Company to recognize
all derivatives on the balance sheet at fair value. Derivatives that
are not hedges must be adjusted to fair value through income. If the
derivative is a hedge, depending on the nature of the hedge, changes
in the fair value of derivatives will either be offset against the
change in fair value of hedged assets, liabilities, or firm
commitments through earnings or recognized in other comprehensive
income until the hedged item is recognized in earnings. The
ineffective portion of a derivative's change in fair value will be
immediately recognized in earnings. The Company has not yet
<PAGE>27
determined what the effect of SFAS 133 will be on earnings and the
financial position of the Company, however it believes that it has
not to date engaged in significant transactions encompassed by the
statement.
Note 2. Business Acquisition
During March 1999, the Company acquired 100% of the stock of IB&F
Media Corporation (Media) in exchange for 4,000,000 shares of its
common stock. At the Merger date Media was an inactive company which
was incorporated in California on November 24, 1998. At the merger
date, Media had no assets and had not begun business operations.
The fair value of the shares issued to effect the merger aggregated
$8,000 and was based on the price paid by individual investors ($.002
per share) for shares sold by the Company during February 1999. Had
the merger been completed at the beginning of the 1999 fiscal year,
the results of operations for the year ended April 30, 1999 would
remain unchanged.
Note 3. Officer advance.
On April 23, 1999, the Company advanced $30,000 to its president for
the purpose of establishing a sales office in London, England. At
April 30, 1999 the funds had not been deposited into a bank account
owned by the Company and none of the funds had been expended. The
Company expects that the full amount of the advance will be utilized
for authorized business purposes during the fiscal year ended April
30, 2000.
Note 4. Stockholders' equity.
During February 1999 the Company completed a private placement of its
common stock whereby 525,000 shares of restricted common stock were
sold for gross proceeds of $1,050.
During March 1999, the Company completed the merger with Media
whereby 4,000,000 shares of its restricted common stock were
exchanged for all of the outstanding common stock of Media (see Note
2.).
During April 1999 the Company completed a private placement of its
common stock whereby 450,000 shares of restricted common stock were
sold for gross proceeds of $45,000.
During February 1999, warrants to purchase an aggregate of 2,000,000
shares of restricted common stock at an exercise price of $.50 per
share were authorized by the Company's Board of Directors. The
warrants are exercisable for a period of three years. During
February 1999, the Company sold warrants the warrants for gross
proceeds of $2,000. There is no compensation effect associated with
the sale of the warrants.
In April 1999 the Company issued an aggregate of 1,000,000 shares of
its common stock for financial advisory services, and accounting and
management services provided to the Company by two independent
consultants. The fair value of the shares issued for the services
amounted to $.10 per share and such value is consistent with the cash
amount paid by the Company's investors during the comparable period.
Note 5. Income taxes.
Deferred income taxes may 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 non-current, depending on the classifications 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 non-current depending on the
periods in which the temporary differences are expected to reverse.
The Company currently has net operating loss carryforwards
aggregating approximately $121,000 which expire beginning in 2014.
Operating losses incurred by the Company prior to its emergence from
bankruptcy may not be available to the Company to offset future
taxable income due to the change in ownership of the Company
<PAGE>28
precipitated by the merger with Media. The deferred tax asset
resulting from the operating loss carryforward described above
(approximately $30,500) has been fully reserved as the Company cannot
predict future profitable operations which would generate the taxable
income necessary for its utilization.
<PAGE>29
Global Foods Online, Inc.
(A Development Stage Company)
Balance Sheet
October 31, 1999
(Unaudited)
ASSETS
<TABLE>
<CAPTION>
Current assets: 1999
<S> <C>
Cash $ 10,740
Officer advance -
Total current assets 10,740
---------
Total assets $ 10,740
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 9,729
---------
Total current liabilities 9,729
Stockholders' equity:
Common stock, $.001 par value,
50,000,000 shares authorized, 6,931,960 shares
issued and outstanding 6,932
Additional paid in capital 235,097
(Deficit) accumulated during
development stage (241,018)
---------
1,011
---------
$10,740
</TABLE>
See accompanying notes to financial statements.
<PAGE>30
Global Foods Online, Inc.
(A Development Stage Company)
Statements of Operations
Six Months Ended October 31, 1999 and 1998
(Unaudited)
<TABLE>
<CAPTION>
Six Months Six Months Period From
Ended Ended Inception To
October 31, October 31, October 31,
1999 1998 1999
<S> <C> <C> <C>
Operating expenses $ 115,437 $ - $ 236,776
----------- ------------- -----------
(Loss from operations) and net (loss) $ (115,437) $ - $ (236,776)
Per share information:
Basic and diluted (loss) per common share $ - $ - $ -
Weighted average shares outstanding 6,620,827 98,160 2,203,263
</TABLE>
See accompanying notes to financial statements.
<PAGE>31
Global Foods Online, Inc.
(A Development Stage Company)
Statements of Cash Flows
Six Months Ended October 31, 1999 and 1998
(Unaudited)
<TABLE>
<CAPTION>
Six Months Six Months Period From
Ended Ended Inception To
October 31, October 31, October 31,
1999 1998 1999
<S> <C> <C> <C>
Net income (loss) $ (115,437) $ - $ (241,018)
Adjustments to reconcile net income to net
cash provided by operating activities:
Common stock issued for services - - 100,098
Charge off of goodwill - - 8,000
Changes in assets and liabilities:
Decrease in officer advance 30,000 - -
Increase in accounts payable 3,201 - 9,729
--------- ----------- ----------
Total adjustments 33,201 - 117,827
--------- ----------- ----------
Net cash provided by (used in)
operating activities (82,236) - (123,191)
Financing activities:
Sale of common stock for cash 85,881 - 131,931
Sale of common stock warrants - - 2,000
--------- ----------- ----------
Net cash provided by financing activities 85,881 - 133,931
--------- ----------- ----------
Increase (decrease) in cash 3,645 - 10,740
Cash and cash equivalents,
beginning of period 7,095 - -
--------- ----------- ----------
Cash and cash equivalents,
end of period $ 10,740 $ - $ 10,740
</TABLE>
See accompanying notes to financial statements
<PAGE>32
Global Foods Online, Inc.
Notes to Financial Statements
Basis of presentation
The accompanying unaudited financial statements have been prepared in
accordance with generally accepted accounting principles for interim
financial information and with the instructions incorporated in Regulation
10-SB of the Securities and Exchange Commission. Accordingly, they do not
include all of the information and footnotes required by generally accepted
accounting principles for complete financial statements. In the opinion of
management, all adjustments (consisting of normal recurring adjustments and
accruals) considered necessary for a fair presentation have been included.
The results of operations for the periods presented are not necessarily
indicative of the results to be expected for the full year. The
accompanying financial statements should be read in conjunction with the
Company's financial statements for the year ended April 30, 1999.
Basic loss per share was computed using the weighted average number of
common shares outstanding.
During the six months ended October 31, 1999, the Company received gross
proceeds of $85,881 from the continued sale of common stock at an offering
price of $.10 per share.
During the six months ended October 31, 1999, $51,500 of advances to an
officer, of which $30,000 had been outstanding at April 30, 1999, were
utilized by the officer to establish an office in London, England. The
advances were charged to operations during the six months ended October 31,
1999
<PAGE>33
PART II
INFORMATION NOT REQUIRED BY PROSPECTUS
Item 24. Indemnification of Officers and Directors.
Indemnification. Global shall indemnify to the fullest extent
permitted by, and in the manner permissible under the laws of the State
of Nevada, any person made, or threatened to be made, a party to an
action or proceeding, whether criminal, civil, administrative or
investigative, by reason of the fact that he is or was a director or
officer of Global, or served any other enterprise as director, officer
or employee at the request of Global. The Board of Directors, in its
discretion, shall have the power on behalf of Global to indemnify any
person, other than a director or officer, made a party to any action,
suit or proceeding by reason of the fact that he/she is or was an
employee of Global.
Pursuant to our bylaws, Global shall have the right to indemnify , to
purchase indemnity insurance for, and to pay and advance expenses to,
directors, officers and other persons who are eligible for, or entitled
to, such indemnification, payments or advances, in accordance with and
subject to the provisions of the Nevada Revised Statutes and any
amendments thereto, to the extent such indemnification, payments or
advances are either expressly required by such provisions or are
expressly authorized by the Board of Directors within the scope of such
provisions. The right of Global to indemnify such persons shall
include, but not be limited to, the authority of Global to enter
into written agreements for indemnification with such persons.
Insofar as indemnification for liabilities arising under the Act may
be permitted to our directors, officers and controlling persons, we
have been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities
(other than the payment by Global of expenses incurred or paid by a
director, officer or controlling person of Global in the successful
defense of any action, suit or proceedings) is asserted by such
director, officer, or controlling person in connection with any
securities being registered, Global 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 it is against public policy as expressed in the Act
and will be governed by the final adjudication of such issues.
Indemnification of officers or persons controlling Global for
liabilities arising under the Securities Act of 1933, is held to be
against public policy by the Securities and Exchange Commission and is
therefore unenforceable.
Item 25. Other Expenses of Issuance and Distribution.
Other expenses in connection with this offering which will be paid
by Global Foods Online, Inc. (hereinafter in this Part II referred to
as the "Global") are estimated to be substantially as follows:
<TABLE>
Amount
Payable
Item By Company
<S> <C>
S.E.C. Registration Fees 367.19
Printing and Engraving Fees 7,500.00
Legal Fees 20,000.00
Accounting Fees and Expenses 5,000.00
Transfer Agent's Fees 1,500.00
Miscellaneous 2,500.00
Total $36,867.19
</TABLE>
Item 26. Recent Sales of Unregistered Securities.
During February 1999 Global completed a private placement of its
common stock whereby 525,000 shares of restricted common stock were
sold at $.001 in cash and services (see list below).
<PAGE>34
Name Total Number Cash
of common shares Payment
Steven M. Scott 930 1.86
Michael D. Muffet 609 1.22
Mickey O'Brian 630 1.26
David Crisci 3,255 6.51
Harold D. Wiebold 45,718 91,44
Val C. Jensen 56,500 113.00
Kenneth Hobbs 1,102 2.20
Michael Taylor 1,750 3.50
Maurlin Mickelson 53 .11
Lori Mickelson 53 .11
Barbara Mickelson 53 .11
James and Amelia Arana 641 1.28
Louis and Christy Mendoza 33,250 66.50
Sarah Maria Mendoza 67 .13
Bradley D. King 875 1.75
The following shares were issued at $.001 per common share for services
rendered.
Name Total Number
of common shares
Mary Ann King 98,663
Jeffery W. King 67,523
Timothy Miles 142,865
Colin Moody 12,500
Mitsue Tatsugawa 12,500
Elizabeth Gheen 12,500
Joel R. Shine 22,963
Robert Hinchley 10,000
All of these sales were made pursuant to an exemption from registration
under Section 4(2) of Regulation D. The sales were made to
sophisticated investors with an ongoing relationship with the Company.
During March 1999, Global completed the merger with Media
whereby 4,000,000 shares of its restricted common stock were
exchanged for all of the outstanding common stock of Media.
Name Total Number
of common shares
Phillip Fox 50,000
David Gordon 1,950,000
John Harrison 1,950,000
Douglas Weil 50,000
During April and May 1999 Global completed a private placement of its
common stock whereby 700,000 shares of restricted common stock were
sold for gross proceeds of $70,000.
Name Total Number Cash
of common shares Payment
Tamie Aceves 200,000 $20,000
Elizabeth Gheen 50,000 5,000
Mitsuo Tatsugawa 80,000 8,000
Dennis Knepp 5,000 500
John Poli 100,000 10,000
J.W. Kennedy 10,000 1,000
John Schaeffer 10,000 1,000
Neal Mark Friedfertig 15,000 1,500
Lawrence Gordon 5,000 500
Griff E. Stone 10,000 1,000
David N. Cohen 5,000 500
500010 BC LTD. 10,000 1,000
391566 BC LTD. 10,000 1,000
Russell H. Trager and
Edna Trager JT WROS 5,000 5,000
Janet Gildersleeve 5,000 500
Jeff Gordon 2,500 250
Steve Loeb 2,500 250
Peter S. Palmer and Patricia Palmer 5,000 500
Henry Gordon 5,000 500
Bruce M. Yelder 10,000 1,000
Laurence Gross 5,000 500
George Inserra 5,000 500
<PAGE>35
Bill Zupner 10,000 1,000
Phillip and Sara Sunshine 10,000 1,000
Richard E. Marks as Custodian
For Dempsey Marks 20,000 2,000
Richard E. and Rebecca Marks JT 10,000 1,000
Norman Chandler Fox 20,000 2,000
Stanley Fox 10,000 1,000
Mitchell H. Fox and Ruth Fox 10,000 1,000
Mark and Anne Mansfield 10,000 1,000
Andy Gordon 5,000 500
Sharon Miles 15,000 1,500
Frederick & Alma Tudal Family Trust 25,000 2,500
These sales were made pursuant to an exemption from registration
pursuant to Section 505 of Regulation D. No commissions were paid and
no general solicitation was utilzied. The offering was approved
and/or exempted by the required states and the appropriate Form D was
filed with the Securities and Exchange Commission.
During February 1999, warrants to purchase an aggregate of 2,000,000
shares of restricted common stock at an exercise price of $.50 per
share were authorized by the Company's Board of Directors. The
warrants are exercisable for a period of three years. During
February 1999, Global sold warrants the warrants for gross
proceeds of $2,000 in cash and services.
Name Total Number Cash Payment/
of Warrants Services
Joel Shine 500,000 $500/Services
Timothy Miles 500,000 $500/Services
Mitsuo Tatsugawa 500,000 $500/Services
Elizabeth Gheen 500,000 $500/Services
These sales were made pursuant to an exemption from registration under
Section 4(2) of Regulation D. The sales were made to sophisticated
investors with an ongoing relationship with Global.
In April 1999 Global issued an aggregate of 1,000,000 shares of
its common stock for financial advisory services, and accounting and
management services provided to Global by two independent
consultants. The fair value of the shares issued for the services
amounted to $.10 per share and such value is consistent with the cash
amount paid by Global's investors during the comparable period.
Name Total Number
of common shares
Joel R. Shine 40,000
Timothy Miles 360,000
Phillip Fox 290,000
Moody's Financial Relations, Inc. 310,000
These sales were made pursuant to an exemption from registration under
Section 4(2) of Regulation D. The sales were made to sophisticated
investors with an ongoing relationship with Global.
<PAGE>36
Item 27. Exhibit Index.
<TABLE>
<S> <C>
(1) Not Applicable
(2) Not Applicable
(3) Articles of Incorporation incorporated by reference
to Form SB-2, file no. 333-83231
(3.2) Amendment to Articles of Incorporation incorporated
by reference to Form SB-2, file no. 333-83231
(3.3) Bylaws incorporated by reference to Form SB-2, file
no. 333-83231
(3.4) Articles of Merger between Global and IF&G Media
Corporation incorporated by reference to Form SB-2,
file no. 333-83231
(4) Specimen certificate for common stock incorporated by
reference to Form SB-2, file no. 333-83231
(4.1) Specimen Warrant certificate incorporated by
reference to Form SB-2, file no. 333-83231
(5) Consent and Opinion of Jody M. Walker regarding
legality of securities registered under this
Registration Statement and to the
references to such attorney in the prospectus filed
as part of this Registration Statement
(6) Not Applicable
(7) Not Applicable
(8) Not Applicable
(9) Not Applicable
(10.1) Consulting Agreement with Moody's Financial Services
incorporated by reference to Form SB-2, file no.
333-83231
(10.2) Consulting Agreement with Joel Shine incorporated by
reference to Form SB-2, file no. 333-83231
(11) Not Applicable
(12) Not Applicable
(13) Not Applicable
(14) Not Applicable
(15) Not Applicable
(16) Not Applicable
(17) Not Applicable
(18) Not Applicable
(19) Not Applicable
(20) Not Applicable
(21) Not Applicable
(22) Not Applicable
(23) Not Applicable
(24) Consent of James E. Scheifley & Associates, P.C.
(25) Not Applicable
(26) Not Applicable
(27) Financial Data Schedule
(28) Not Applicable
</TABLE>
Item 28. Undertaking.
The undersigned registrant hereby undertakes:
(a)(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
(I) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after the
effective date of the Registration Statement (or the most recent post-
effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the formation set forth in the
registration statement.
(iii) To include any additional or changed material information on the
plan of distribution.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall
be deemed to be the initial bona fide offering thereof.
<PQGE>37
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at
the termination of the offering.
(b) Delivery of Certificates. The undersigned registrant hereby
undertakes to provide to the Transfer Agent at the closing,
certificates in such denominations and registered in such names as are
required by the Transfer Agent to permit prompt delivery to each
purchaser.
(c) Indemnification. Insofar as indemnification for liabilities
arising under the Securities Act of 1933 may be permitted to directors,
officers and controlling persons of the registrant pursuant to the
provisions set forth in the Company's Articles of Incorporation or
otherwise, the registrant has been advised that in the opinion of the
Securities and Exchange Commission, such indemnification is against
public policy as expressed in the Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities
(other than the payment by the registrant of expenses incurred or paid
by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by
such director, officer or controlling person in connection with the
securities being registered, the registrant 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 it is against public policy as expressed in the Act
and will be governed by the final adjudication of such issue.
<PAGE>38
SIGNATURES
In accordance with the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it
meets all of the requirements of filing on Form SB-2 and authorized
this registration statement to be signed on its behalf by the
undersigned, in the City of London, Country of England on the 17th day
of February, 2000.
Global Foods Online, Inc.
/s/ John Harrison
-------------------------------
- -
By John Harrison, President
In accordance with the requirements of the Securities Act of 1933, this
registration statement was signed by the following persons in the
capacities and on the dates stated.
<TABLE>
Signature Capacity Date
<S> <C> <C>
/s/John Harrison Principal Executive Officer February 17, 2000
- ------------------- Principal Financial Officer
Controller/Director
/s/David Gordon Principal Financial Officer
Controller/Director February 17, 2000
- -------------------
</TABLE>
<PAGE>39
Jody M. Walker
7841 South Garfield Way
Littleton, Colorado 80122
Telephone (303) 850-7637
Facsimile (303) 220-9902
February 17, 2000
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Dear Sirs:
Re: OPINION RE: LEGALITY AND CONSENT OF COUNSEL TO USE OF NAME IN
THE REGISTRATION STATEMENT ON FORM SB-2 OF GLOBAL FOODS ONLINE, INC.
I am securities counsel for the above mentioned Company and I have
prepared the registration statement on Form SB-2. I hereby
consent to the inclusion and reference to my name in the
Registration Statement on Form SB-2 and any amendments for Global
Foods Online, Inc.
It is my opinion that the securities of Global Foods Online, Inc. and
those which are registered with the Securities and Exchange Commission
pursuant to Form SB-2 Registration Statement of Global Foods Online,
Inc. have been legally issued and will be, when sold, legally issued,
fully paid and non-assessable.
Yours very truly,
/s/ Jody M. Walker
---------------------
Jody M. Walker
<PAGE>40
INDEPENDENT AUDITOR'S CONSENT
We do hereby consent to the use of our report dated May 21, 1999 on the
financial statements of Global Foods Online, Inc. included in
and made part of the registration statement of Global Foods Online,
Inc. dated February 17, 2000.
February 17, 2000
/s/ James E. Scheifley & Associates, P.C.
Certified Public Accountant
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> APR-30-2000
<PERIOD-END> OCT-31-1999
<CASH> 10,740
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 10,740
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 10,740
<CURRENT-LIABILITIES> 9,729
<BONDS> 0
<COMMON> 6,032
0
0
<OTHER-SE> (5,921)
<TOTAL-LIABILITY-AND-EQUITY> 10,740
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 115,437
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (115,437)
<INCOME-TAX> 0
<INCOME-CONTINUING> (115,437)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (115,437)
<EPS-BASIC> 0
<EPS-DILUTED> 0
</TABLE>
