<PAGE>2
FORM 10-KSB
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
[X] 15,ANNUAL REPORT UNDER SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended: 4/30/00
OR
[ ]15,TRANSITION REPORT PURSUANT TO SECTION 13 OR
15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission file number - 333-83231
Global Foods Online, Inc.
Exact name of Registrant as specified in its charter)
NEVADA 95-4741485
(State or other jurisdiction of (I.R.S.
Employer
incorporation or organization Identification
Number)
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.)
Securities registered pursuant to
Section 12(b) of the Act: None
Securities registered pursuant to
Section 12(g) of the Act: Common Stock, $.001 par value
Check whether the Company (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act during the
preceding 12 months (or such shorter period that the Company was
required to file such reports), and (2) has been subject to such
filing requirements for at least the past 90 days.
Yes __x__ No _____
Check if there is no disclosure of delinquent filers in response to
Item 405 of Regulation S-B is not contained in this form, and no
disclosure will be contained, to the best of Company's knowledge, in
definitive proxy or information statements incorporated by reference
in Part III of this Form 10-KSB or any amendment to this Form 10-KSB.
[ x ]
The Company's revenues for its most recent fiscal year were $0.00. As
of April 30, 2000 the market value of the Company's voting $.00l par
value common stock held by non-affiliates of the Company was $0.00.
The number of shares outstanding of Company's only class of common
stock, as of April 30, 2000 was 6,780,260 shares of its $.001 par
value common stock. Check whether the Issuer has filed all documents
and reports required to be filed by Section 12, 13 or 15(d) of the
Exchange Act after the distribution of securities under a plan
confirmed by a court.
Yes __x__ No _____
No documents are incorporated into the text by reference.
Transitional Small Business Disclosure Format (check one)
Yes No x
-------- --------
<PAGE>3
PART I
ITEM 1. BUSINESS
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.
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.
<PAGE>4
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. Global 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.
Employees. Global has no full time and no part time employees.
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
Globalnow 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 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.
ITEM 2. PROPERTIES.
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.
ITEM 3. LEGAL PROCEEDINGS.
Global is not involved in any legal proceedings at this date.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
During the fourth quarter of the fiscal year ended April 30, 2000, no
matters were submitted to a vote of Global's security holders, through
the solicitation of proxies.
<PAGE>5
PART II
ITEM 5. MARKET FOR COMPANY'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 April 30, 2000 was 273.
Dividends. Holders of our common stock are entitled to receive such
dividends as may be declared by our Board of Directors.
Global was recently approved for quotation on the NASD Over the
Counter Bulletin Board under the symbol "GFDO".
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS 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.
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.
For the year ended April 30, 2000, Global purchased equipment of
$9,367 resulting in net cash used in investing activities of $9,367.
For the year ended April 30, 1999, Global pursued no investing
activities.
For the year ended April 30, 2000, Global received proceeds from notes
payable of $219,000 and proceeds from the sale of common stock for
cash of $95,000. As a result, Global had net cash provided by
financing activities of $314,000 for the year ended April 30, 2000.
For the year ended April 30, 1999,Global received proceeds from the
sale of common stock for cash of $46,050 and proceeds from the sale of
common stock warrants of $2,000. As a result, Global had net cash
provided by financing activities of $48,050 for the year ended April
30, 1999.
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
<PAGE>6
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, 2000, Global had operating expenses of
$312,455 consisting primarily of consulting fees of $108,520, travel
expense of $19,894, professional fees of $24,379, web site expenses of
$10,594, office expenses of $59,890, depreciation and amortization of
$1,561, printing of $21,973, outside services of $34,466, telephone
expense of $6,880 and other expenses of $24,298.
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.
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.
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.
ITEM 7. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Financial Statements
The response to this item is being submitted as a separate section of
this report beginning on page 20.
ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE
There have not been any changes in or disagreements with accountants
on accounting and financial disclosure.
<PAGE>7
PART III
ITEM 9. DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY
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
ITEM 10. EXECUTIVE COMPENSATION
To date, Global has not paid any remuneration to its officer other
than Phillip Fox who received 290,000 common shares for services
rendered.
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT
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.
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%
<PAGE>8
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.
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED 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. The full amount of the advance will be utilized for
authorized business purposes during the fiscal year ended April 30,
2000. During the year ended April 30, 2000, we opened a bank account
in London. All expended funds have been used for office expenses and
related travel expenses.
ITEM 13. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON
FORM 8-K
(A) FINANCIAL STATEMENTS AND SCHEDULES
The following financial statements and schedules are filed as part of
this report:
Report of Independent Public Auditors..........
Balance Sheet..................................
Statement of Operations........................
Statement of Stockholder's Equity..............
Statement of Comprehensive Loss
Statement of Cash Flows........................
Notes to Financial Statements..................
Schedules Omitted: All schedules other than those shown have been
omitted because they are not applicable, not required, or the required
information is shown in the financial statements or notes thereto.
<PAGE>9
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, 2000, 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, 2000. 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, 2000, 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, 2000, in conformity with generally accepted accounting
principles.
James E. Scheifley & Associates, P.C.
Certified Public Accountants
Denver, Colorado
August 8, 2000
<PAGE>10
Global Foods Online, Inc.
(A Development Stage Company)
Balance Sheet
April 30, 2000
ASSETS
Current assets: 2000
Cash $ 174,433
--------
Total current assets 174,433
Equipment, at cost net of
accumulated depreciation of $1,561 7,806
Deposit 1,897
--------
Total assets $ 184,136
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 14,474
Accrued interest 2,950
--------
Total current liabilities 17,424
Notes payable - shareholders 219,000
Stockholders' equity:
Common stock, $.001 par value,
50,000,000 shares authorized, 6,780,260
shares issued and outstanding 6,780
Additional paid in capital 381,918
(Deficit) accumulated during
development stage (440,986)
--------
(52,288)
--------
$ 184,136
See accompanying notes to financial statements.
<PAGE>11
Global Foods Online, Inc.
(A Development Stage Company)
Statements of Operations
Years Ended April 30, 2000 and 1999
and Period From Inception (February 4, 1997) to April 30, 2000
<TABLE>
<CAPTION>
Year Year Period From
Ended Ended Inception To
April 30, April 30, April 30,
2000 1999 2000
<S> <C> <C> <C>
Operating expenses $ 312,455 $ 121,339 $ 433,794
---------- ---------- ----------
(Loss from operations) 312,455 121,339 433,794
Interest expense 2,950 - 2,950
---------- ---------- ----------
Net (loss) $ (315,405) $ (121,339) $ (436,744)
Per share information:
Basic and diluted (loss) per common share $ (0.05) $ (0.13) $ (0.17)
Weighted average shares outstanding 6,628,702 943,290 2,581,257
</TABLE>
See accompanying notes to financial statements.
<PAGE>12
Global Foods Online, Inc.
(A Development Stage Company)
Statement of Changes in Stockholders' Equity
For the Period From Inception (February 4, 1997) to April 30, 2000
<TABLE>
<CAPTION> Deficit
Additional 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 98 - (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 - 0 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
Common stock sold for cash in
June 1999 @ $.10 per share 265,000 265 22,735 23,000
Compensation value of discount shares 3,500 3,500
August 1999 @ $.50 per share 68,000 68 33,932 34,000
September 1999 @ $.50 per share 50,000 50 24,950 25,000
October 1999 @ $.10 per share 15,000 15 1,485 1,500
November 1999 @ $.50 per share 6,000 6 2,994 3,000
December 1999 @ $.50 per share 15,000 15 7,485 7,500
January 2000 @ $.50 per share 2,000 2 998 1,000
Common issued for services in
June 1999 @ $.10 per share 22,500 22 2,228 2,250
August 1999 @ $.50 per share 200,000 200 99,800 100,000
September 1999 @ $.50 per share 50,000 50 24,950 25,000
December 1999 @ $.50 per share 13,600 14 6,786 6,800
Net (loss) for the year
ended April 30, 2000 - - - (315,405) (315,405)
---------- ---------- --------- --------- -----------
Balance, April 30, 2000 6,780,260 $ 6,780 $ 381,918 $ (440,986) $ (52,288)
</TABLE>
See accompanying notes to financial statements.
<PAGE>13
Global Foods Online, Inc.
(A Development Stage Company)
Statements of Cash Flows
Years Ended April 30, 2000 and 1999
and Period From Inception (February 4, 1997) to April 30, 2000
<TABLE>
<CAPTION>
Year Year Period From
Ended Ended Inception To
April 30 April 30 April 30
2000 1999 2000
<S> <C> <C> <C>
Net income (loss) $ (315,405) $ (121,339) $ (436,744)
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation 1,561 - 1,561
Common stock issued for services 134,050 100,000 234,050
Compensation value of discounted shares 3,500 - 3,500
Charge off of goodwill - 8,000 8,000
Changes in assets and liabilities:
(Increase) in other assets (1,897) - (1,897)
(Increase) decrease in officer advance 30,000 (30,000) -
Increase in accounts payable and acrued expenses 10,896 2,384 13,280
-------- -------- ---------
Total adjustments 178,110 80,384 258,494
-------- -------- ---------
Net cash (used in) operating activities (137,295) (40,955) (178,250)
Investing activities:
Purchase of equipment (9,367) - (9,367)
-------- -------- ---------
Net cash used in investing activities (9,367) - (9,367)
Financing activities:
Sale of common stock for cash 95,000 46,050 141,050
Proceeds from notes payable 219,000 - 219,000
Sale of common stock warrants - 2,000 2,000
-------- -------- ---------
Net cash provided by financing activities 314,000 48,050 362,050
-------- -------- ---------
Increase (decrease) in cash 176,705 7,095 183,800
Cash and cash equivalents,
beginning of period 7,095 - -
-------- -------- ---------
Cash and cash equivalents,
end of period $ 174,433 $ 7,095 $ 174,433
</TABLE>
See accompanying notes to financial statements.
<PAGE>14
Global Foods Online, Inc.
(A Development Stage Company)
Statements of Cash Flows
Years Ended April 30, 2000 and 1999
and Period From Inception (February 4, 1997) to April 30, 2000
<TABLE>
<CAPTION>
Year Year Period From
Ended Ended Inception To
April 30 April 30 April 30
2000 1999 2000
<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>15
Global Foods Online, Inc.
Notes to Financial Statements
April 30, 2000
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.
Principles of Consolidation
The consolidated financial statements include the accounts of the
Company and its wholly owned, inactive 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. At April 30, 2000 the
Company has computer equipment and related software valued at $7,806
and has recorded depreciation amounting to $1,561 thereon.
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 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 institutions in excess of the $100,000 limit covered by the
<PAGE>16
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
Foreign Currency Translation
The financial statements are presented in United States dollars. The
Company has significant United Kingdom operations, however United
States dollars are considered its functional currency.
Monetary assets and liabilities are translated into United States
dollars at the balance sheet date rate of exchange and non-monetary
assets and liabilities at historical rates. Revenues and expenses are
translated at appropriate transaction date rates. Net gains or losses
arising on translation are reflected a separate component of
stockholders' equity.
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 that would result in any
significant difference between its reported net loss and comprehensive
net loss as defined in the statement and therefore comprehensive
income is considered to be the same as net income.
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 that 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 that would require
disclosure under the statement.
<PAGE>17
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
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 that
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
full amount of the advance was utilized for authorized business
purposes during the fiscal year ended April 30, 2000.
Note 4. Notes payable - shareholders
During the period from January through April 2000, the Company sold
short-term notes to certain of its shareholders. The notes are due
after six months and include interest at 10% per annum. The Company
received gross proceeds from the notes amounting to $219,000 through
April 30, 2000. The Company expects that the notes will be converted
into common stock during the next fiscal year.
Note 5. 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
<PAGE>18
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.
During the year ended April 2000 the Company sold an aggregate of
421,000 shares of its common for gross proceeds of $95,000. Certain
of the shares were sold to persons who provide advisory services to
the Company at a price of $.07 per share at a time when other
shareholders paid $.10 per share. The Company has recognized
compensation expense related to the shares sold at the discounted
price amounting to $3,500 for the year ended April 30, 2000.
During the year ended April 30, 2000 the Company issued an aggregate
of 286,100 shares of its common stock for financial advisory services
and management services provided to the Company by independent
consultants. The fair value of the shares issued for the services
amounted to $.50 per share and such value is consistent with the cash
amount paid by the Company's investors during the comparable period.
Note 6. 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 $436,000 that expire $121,000 in 2014 and
$315,000 in 2015. 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 precipitated by the merger with Media. The deferred tax asset
resulting from the operating loss carryforward described above
(approximately $148,500) has been fully reserved as the Company
cannot predict future profitable operations which would generate the
taxable income necessary for its utilization. The reserve increased
by approximately $107,000 during the year ended April 30, 2000.
Note 7. Commitments
The Company has entered into an operating lease for a motor vehicle
that calls for annual rental payments aggregating $5,709. The lease
term extends through the year 2003. Minimum annual rental payments
under the lease are as follows for the years ended April 30, 2001
through 2003: 2001 - $5,709; 2002 - $5,709: 2003 - $4,282.
Rent expense amounted to $1,428 and $-0- for the years ended April
30, 2000 and 1999, respectively.
Note 8. Foreign Operations
During the year ended April 30, 2000 the Company established
marketing and sales operations in London, England. Assets employed
at this location consist of equipment valued at $2,656. Sales have
not commenced at either of the Company's locations. General and
administrative expenses incurred by the London operation amounted to
approximately $91,200 during the year ended April 30, 2000.
Note 9. Supplemental Statement of Operations Information.
During the years ended April 30, 2000 and 1999, the Company incurred
$312,455 and $121,339 of general and administrative expenses
respectively, the components of which are as follows:
2000 1999
Consulting expense 108,520 99,355
Travel expense 19,894 -
Professional fees 24,379 4,928
Web site expenses 10,594 -
Office expenses 59,890 -
Depreciation & amortization 1,561 -
Printing 21,973 11,000
Outside services 34,466 -
<PAGE>19
Telephone expense 6,880 240
Other expenses 24,298 5,816
-------- --------
$ 312,455 $ 121,339
(b) List of Exhibits
The following exhibits are filed with this report:
(27) Financial Data Schedule
(B) REPORTS ON FORM 8-K
None
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, as amended, the Company has duly caused this
Report to be signed on its behalf by the undersigned duly authorized
person.
Date: August 30, 2000 GLOBAL FOODS ONLINE, INC.
/s/ John Harrison
------------------------------------
By: John Harrison, President
Pursuant to the requirements of the Securities Exchange Act of 1934,
as amended, this report has been signed below by the following persons
on behalf of the Company and in the capacities and on the dates
indicated.
<TABLE>
<S> <C>
/s/John Harrison Principal Executive Officer August 30, 2000
------------------- Principal Financial Officer
Controller/Director
/s/David Gordon Principal Financial Officer
Controller/Director August 30, 2000
-------------------
</TABLE>
