UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10 - SB
AMENDMENT NO. 4
GENERAL FORM FOR REGISTRATION OF SEURITIES
OF SMALL BUSINESS ISSUERS UNDER SECTION 12 (b)
or (g) OF THE SECURITIES EXCHANGE ACT OF 1934
INTERNET CULINARY CORPORATION
FKA CAPITOL SILVER MINES, INC
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(NAME OF SMALL BUSINESS ISSUER IN ITS CHARTER)
NEVADA 82-0277068
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(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
410 BROADWAY, 2ND FLOOR; LAGUNA BEACH, CA 92651
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(ADDRESS OF PRINCIPAL EXECUTIVE OFFICE)
(949) 376-8565 (949) 376-8389 FAX
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(ISSUER'S TELEPHONE NUMBER)
SECURITIES TO BE REGISTERED UNDER SECTION 12 (b) OF THE ACT:
TITLE OF EACH CLASS NAME OF EACH EXCHANGE ON WHICH
TO BE SO REGISTERED EACH CLASS IS TO BE REGISTERED
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SECURITIES TO BE REGISTERED UNDER SECTION 12 (g) OF THE ACT:
Common Stock - .001 Par Value
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(TITLE OF CLASS)
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FORWARD LOOKING STATEMENTS
Internet Culinary Corporation, a developmental stage company
("Internet Culinary Corporation," or the "Company") cautions
readers that certain important factors may affect the
Company's actual results and could cause such results to
differ materially from any forward-looking statements that may
be deemed to have been made in this Form 10-SB or that are
otherwise made by or on behalf of the Company. For this
purpose, any statements contained in the Form 10-SB that are
not statements of historical fact may be deemed to be forward-
looking statements. Without limiting the generality of the
foregoing, words such as "may," "expect," "believe,"
"anticipate," "intend," "could," "estimate," "plans," or
"continue" or the negative or other variations thereof or
comparable terminology are intended to identify forward-
looking statements. Factors that may affect the Company's
results include, but are not limited to, the Company's limited
operating history, its ability to produce additional products
and services, its dependence on a limited number of customers
and key personnel, its possible need for additional financing,
its dependence on certain industries, and competition from its
competitors. With respect to any forward-looking statements
contained herein, the Company believes that it is subject to a
number of risk factors, including: the Company's ability to
implement its product strategies to develop its business in
emerging markets; competitive actions; and, general economic
and business conditions. Any forward-looking statements in
this report should be evaluated in light of these important
risk factors. The Company is also subject to other risks
detailed herein or set forth from time to time in the
Company's filings with the Securities and Exchange Commission.
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INFORMATION REQUIRED IN REGISTRATION STATEMENT
TABLE OF CONTENTS
Part I 4
Item 1. Description of Business 4
Item 2. Management's Discussion and Analysis
or Plan of Operation 7
Item 3. Description of Property 16
Item 4. Security Ownership of Management and
Others and Certain Security Holders 16
Item 5. Directors, Executives, Officers and
Significant Employees 17
Item 6. Remuneration of Directors and
Executive Officers 19
Item 7. Interest of Management and Others in
Certain Transactions 20
Item 8. Legal Proceedings 20
Part II 22
Item 1. Market Price of and Dividends of the
Registrant's Common Equity and Other
Stockholder Matters 22
Item 2. Recent Sales of Unregistered Securities 22
Item 3. Description of Securities 22
Item 4. Indemnification of Directors and Officers 23
Part F/S 23
Item 1. Financial Statements 23
Item 2. Changes in and Disagreements With Accountants
on Accounting and Financial Disclosure 24
Part III 24
Item 1. Index to Exhibits 24
Item 2. Description of Exhibits 24
Signatures 24
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Part I
Item 1. Description of Business
Internet Culinary Corporation, a developmental stage company (hereinafter
referred to as "the Company" or "ICUL" ), is filing this Form 10-SB on a
voluntary basis in order to make Internet Culinary Corporation's financial
information equally available to any interested parties or investors. The
Company was organized under the laws of the State of Idaho, May 16, 1967, as
Capitol Silver Mines, Inc.
In September 1999 the Company changed its name to Internet Culinary
Corporation and changed corporate situs from Idaho to Nevada. A copy of the
Company's Articles of Incorporation is attached hereto and is incorporated
herein by reference. See Part III, Item 1. On September 9, 1999, the Company
acquired assets of Amazin Raisins through an asset purchase from
Pacific Standard Financial Group, ("PSFG"), an ongoing business. As a
corporate asset, Amazin Raisin, and its founder Jack Mazin, figures
prominently in ICUL'S new endeavor. Mr. Mazin is the owner of an exclusive
patent to flavor raisins and this exclusive right to use the patent is now
available for exclusive use by ICUL.
The Company changed its name to "Internet" Culinary Corporation because it
intends to market its food products to a retail market via the internet as
well as marketing to institutional and governmental clients in the more
traditional sales methods. At this time there is no website available to view,
however the domain name, internetculinary.com has been reserved from Internic,
the International Domain Name Registration Company, and a website is under
construction.
ICUL has been formed to manufacture and market a wide variety of food
products, the most prominent of which are nutritional, naturally flavored
raisin snack food products manufactured by utilizing a patented
process. While the Company has not yet had sales to date, Amazin Raisins
did manufacture its raisin products in 1997 and shut its operations down at
the end of 1997 due to a lack of equity capital required to meet its orders.
The company expects to begin manufacturing again in the first quarter of 2000,
specifically, March 1, 2000, and will manufacture flavored raisins through an
internationally patented, intrusive flavoring technology, that flavors the
fruit from the inside-out. There are no companies known to be manufacturing
this product at this time as there are no other companies authorized to use
the patented process.
ICUL, FKA Capital Silver Mines, changed its business from mining to
producing and marketing flavored raisins. This was done to switch the company
from the capital intensive commodities oriented business of mining to the less
capital intensive manufacture of flavored raisins. The company believes that
the change in its business will reduce risk and increase profitability a
manufacturing a low cost, easily marketed product.
Other companies are involved in creating similar types of fruit products
and offer competition in this area. Sun Maid, for example, a California-based
grower and marketer of raisins, presently produces several varieties of
flavored dried prunes (under the brand "Sun Sweet") which involves placing a
coating of flavor on the fruit. The management of ICUL believes that if the
original flavor can be removed before adding another flavor it is a better
product. Therefore, the coating processes are believed to be inferior as the
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flavor coating does not remove the flavor of the prune (fruit) and therefore
cannot completely mask the flavor of the original fruit .
The patented process of raisin flavoring involves the use of citric acid to
remove the raisin flavoring and inserts the substitute flavoring inside
the raisin through the tiny holes in the skin of the raisin created by the
citric acid process.
The Company believes that a raisin which has a different flavor will be
highly accepted by the market place. The product is a natural flavor, not
mixed with raisin taste, easy to package and ship. Consumers should want to
purchase "Amazin Raisins" as it is a natural alternative to sugar and glucose
products which are predominate on grocery and other retail food shelves.
The developer of this process is Mr. Jack Mazin, the founder of Amazin
Raisins. Mr. Mazin's involvement at this time is necessary to the growth and
profitability of this endeavor and to lose him would be a set back to the
company.
PSFG was the prior owner of the Amazin Raisin assets. Assets of Amazin
Raisin were purchased by the Company from PSFG in an asset purchase agreement
negotiated in September, 1999. Mr. Mazin owns 2,451,900 shares of rule 144
stock and will be the President of the Canadian subsidiary to be formed to
manufacture the Amazin Raisin products. The Company is negotiating a long term
employment and management contract with Mr. Mazin and he is expected to run
the day to day operations of the Canadian manufacturing facility where the
"Amazin Raisins" brand of products are to be manufactured. The employment
agreement is expected to be signed prior to the beginning of manufacturing in
March, 2000.
The patented process of flavoring the raisins (which was applied for and
received in 1993 and runs until February 23, 2010 and is renewable)
substantially removes the raisin flavor from raisins and substitutes the
natural flavor of other fruits. This flavoring can be of one fruit, or a
combination of fruits in each raisin.
Although other firms have processes to produce flavor-coated raisins, ICUL,
through this patented process, is the only known firm, at this time, that has
the use of the process to remove the raisin flavor, and replace it using all
natural ingredients. If a similar process is developed prior to the running of
the patent period, it might cause the Company to suffer some economic loss,
however, it is expected that the market could sustain additional
competition.
The management of ICUL plans to exploit the patented process to develop a
large portion of the worldwide fruit-flavored and chocolate-covered fruit-
flavored raisin market though an aggressive plan of advertisement, expansion,
and international licensing agreements.
With the use of the patented
process and production and marketing plan, ICUL has the expectation of
becoming a major snack food provider.
As a background, the process through which the raisins (and any dried
fruits) are flavored were developed by the founder of Amazin Raisins over a
decade ago who had an affinity for dried fruit products. He began his efforts
by investigating the prospect of producing dried cherries, a generally
unavailable commodity due to the high costs of removing the pits. The initial
product was exceptional, but the costs associated with producing large runs of
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dried cherries were prohibitive. The founder then began deliberating the
production of flavored raisins.
Mr. Mazin hired a food science research team to develop a process to produce
flavored raisins. Samples that had all the promising characteristics
(texture, moisture, sweetness) for consumer consumption were submitted to the
team for testing. A large-scale production process had to be developed because
such a facility had never been developed before with the express purpose of
turning out large quantities of flavored raisins. Without this large scale
production process, the company would be unable to produce the quality of
product necessary to make profit.
Mr. Mazin estimates that he has spent over Two Hundred Thousand
($200,000.00 CND) Canadian Dollars in research and development which has lead
to the development and patenting of a method to produce in volume, fruit
flavored raisins and chocolate-covered fruit flavored raisins, from which the
raisin taste has been substantially extracted and replaced with another
flavor. The company and its shareholders will benefit from this research and
the use of the patent.
While other companies have attempted to produce flavored raisins by coating
them with sugar or flavoring ICUL, in removing the original flavor rather than
merely "coating" the fruit with flavor is the only firm that has been
successful in removing the original flavor. The company is presently capable
of producing raisins with the following flavors: lemon. orange, pineapple,
strawberry, banana, peach, raspberry, and cherry
The raisin production facility, at present, employs 10 full time employees,
with no seasonal impact. The Company expects to employ 200 employees by
December 31, 2001.
The Company understands that there are certain risks specific to the snack
food industry. The success of the raisin product will rely heavily on consumer
acceptance of the new product. The Company is relying on the fact that
raisins, both natural and chocolate-covered, have been an accepted and well
bought snack food for a very long time and if consumer acceptance drops, the
product would suffer.
If the supply of raisins were to become unavailable, the raisin product would
suffer, although the patented process will work with other fruit. That would
cause the company to revamp its raisin process which might cause the company's
production to suffer until a substitute fruit could be developed.
There is always a threat of contamination to any product which is produced for
mass consumption in the manufacturing process or even in the packaging and
transportation process. However, ICUL believes it has a safe process to
produce the fruit and deliver it in an uncontaminated state. The Company's
products fall under the auspices of the Food and Drug Administration of Canada
and the United States and under the careful control of this powerful agency,
and the Company meets all standards of the industry .
At this time, the Company through its president, Tom Reichman, is
finalizing negotiations with the Province of New Brunswick wherein the
Province will finance Five Hundred Thousand ($500,000.00 CND) Canadian
Dollars to the Company and secure the loan with certain machinery and
equipment owned by the Company. The Company is also finalizing negotiations
with the Province of New Brunswick wherein the Province will fund a One
Million, Five Hundred Thousand ($1,500,000.00 CND) Canadian Dollars
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revolving line of credit to finance the growth of the Amazin Raisins line of
products. The Company must sign the Agreement with the Province and guarantee
the loans, or the loan will not be approved.
The funding will be used to
manufacture a fresh line of samples, stock the warehouse with inventory, hire
line employees and pay for advertising as well as to ramp up production.
On September 9, 1999, Amazin Raisins assets ("the Assets") were acquired by
the Company from PSFG who had previously acquired the assets of Amazin
Raisins. The acquired assets consist of a long term lease, raisin
manufacturing machinery and equipment, as well as sample inventory and
goodwill.
The company acquired the assets from PSFG for Five Million (5,000,000) shares
of Rule 144 stock, a One Million ($1,000,000 CND) Canadian Dollar credit
facility and an installment payment of Seven Hundred Fifty Thousand
($750,000.00 CND) Canadian Dollars. The Company additionally agreed to form a
subsidiary to manufacture flavored raisins in Canada and to hire Jack Mazin to
manage the operation. The $750,000.00 installment payment is due upon funding
of the credit facility which is expected to occur in March, 2000.
Item 2. Management's Discussion and Analysis
or Plan of Operation
The company recognizes that there is substantial doubt about its ability to
continue as a going concern. Later discussion in this disclosure statement
indicates that at this time there are no customers, no suppliers or outlets
and competition in the Snack Food Market. Further, the success of the Company
will be determined on its ability to obtain the finances necessary to acquire
the additional equipment and employees needed to make the Company a going
concern.
The Company anticipates that the loan it is negotiating with the Province of
New Brunswick will allow the Company to purchase the necessary inventory and
add the needed line employees. In depth analysis of the available market
outlets as well as the needed supply of raisins leads the Company to believe
that the customers and suppliers are available. Further, the size of the Snack
Food Industry is indicative that a product made with raisins will have the
market necessary to support the Company's projected sales. Elsewhere in this
statement are details outlining specific marketing and promotion ideas which
will assist the Company in overcoming its immediate lack of customers,
supplier, etc.
An in-depth production process has been developed to facilitate the
manufacture of flavored raisins, enabling an end product that is both
appealing to consumers and sufficiently durable for widespread distribution.
The following describes the basic process utilized by the Company to produce
the product.
Sun-dried raisins are bought from outside channels and enter into the
production process. The raisins are then moved into the Citric Acid Process,
which treats the raisins in a special manner to substantially remove the
raisin flavoring from the raisins. In addition, this process creates small
holes in the skin of the raisins. The materials are then moved into the next
phase: the Flavoring Process. The raisins are then coated by all natural fruit
flavoring. This flavoring coats the raisins, but unlike other competing
processes, it also enters the inside of the raisins through the small holes
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created by the Citric Acid Process. Once the raisins are flavored, they are
moved to the packaging phase, and then distributed to the various channels
cited later in this plan.
The basic raw materials needed to complete the finished boxes of the Company
are:
Seedless Sun-Dried Raisins
Citric Acid
All Natural Flavors
Webbing (Packets) for Individual packets
Cylindrical and ziplock-type containers for Family Packs
Cardboard Grocery Boxes / Display Boxes
Corrugate Cases
Glue Stretch Wrap
Packaging Tape
In order to facilitate the construction of this unique process
of production, the Company upgraded its facility
in many ways. The following is a summary of these upgrades:
Flavoring Lab
Plant Heating
Water Heating
Propane System
Electrical Modifications to Entrance and Electrical Room
Mechanical Shop Modifications
Air Compressor Room Modifications
Packaging Room Modifications
Various Tools Purchased to Build Custom Machines
Computer System
Quality Assurance Lab to Ensure Safety and Consistency in
Every Shipment
A computer drafting technician was hired in April of 1996 to aid Mr. Mazin in
designing the semi-automatic custom production line. This led to a new
computer system being purchased to facilitate the Computer Aided Design
software and algorithms. Through extensive testing, this system is
believed to be Y2K compliant.
Office management created specialized operating forms that are used by
operators on the production line to ensure that all production is being
performed under the required standards. All levels and stages of production
are scrutinized at all times and testing occurs at set intervals to greatly
facilitate the production of defect-free products. Quality control occurs on
both an internal and external basis: the process of production is constantly
being examined to further reinforce the production of a quality product, while
frequent testing allows for minimal returns of bad products and points the way
towards possible inadequacies in the production process- Production variables
are collected and stored in a database to aid in the research and development
of future products and processes.
The current facility has two manufacturing lines and one packaging machine to
service the product demand. For the purpose of capacity, the following
relationship is standard towards utilizing the equipment on a one-shift basis
(or eight hour day):
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[8 hour periods -2 lines] =25,400 packets per hour
[25,400 packets per hour] x 8 hours = 203,200 packets per day
[203,200 packets per day] x 22 days = 4470,400 packets per month
[4,470,400 packets per month] x 12 months =53,644,800 packets per year
For each additional two lines established, the capacity increases upon the
basis of the relationship mentioned above for the purposes of these
projections, it is assumed that the capacity of the plant will increase in
relation to the machinery and equipment purchases illustrated in the above
diagram.
Year 2000 Compliance
The Company has examined the upon coming potential problems associated with
the Year 2000 issues, or "Millenium Bug." In reviewing what types of problems
might arise at the turn of the century, it is speculated that the computers
used in the manufacturing process might be effected. However, the programs
which will run the computers are newer versions of software which are not
"time clock" sensitive and in testing, have proved to be compliant with the
millenium change. In the event any computers on hand might fail, and because
the operation is not expected to begin until the first quarter of 2000,
specifically, March 1, 2000, it is anticipated that any problems will be taken
care of by the purchase of new computers or reworking of the programs at a
date after the turn of the century. At the present time, 1/5/00, there has
been no recorded problem with Y2K.
One problem which would effect the Company's ability to produce the raisin
products might arise if the countries from which the fruit or chocolate
materials suffer from the Year 2000 problem. In this event, it is anticipated
that there would be enough product available through local providers to
produce the product. If the local providers were not able to provide the
natural product and the stock on hand ran out, the Company would suffer until
enough product could be procured.
Current and Pending Customers
The Company has no firm contracts at this time. Until such time as
production begins and samples become available there are no pending or current
customers.
The following list represents a current pool of potential customers who have
expressed some interest in receiving samples once they are available
Grocery and Convenience Stores: For example:
Seven-Eleven Stores
Ralphs
Lucky
Vons
Krogers
Safeway, etc.
Family Packs: For example:
Costco
Sam's Club
Wall-Mart
Sarah Lee
Entanmen's, etc
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Airlines:
There has been a conversation going with United Airlines who orally have
indicated they might be willing to place an order once samples are available
for market testing order.
Potential revenue from licensing and royalties is anticipated due to casual
inquires to Mexican and German(EEC) marketers. Management believes that
there are additional potential licensing opportunities in Japan, Hong Kong,
China, Taiwan, Central and South America, and other non EEC countries.
To support the management staff and to facilitate interaction between
management and front line operations, a number of office employees will be
hired to enhance the efficiency of the Company's operational structure.
The beginning date for sales and manufacturing is anticipated to be the
first quarter of 2000, and more specifically, March 1, 2000. It should be
noted that the production schedule calls for the addition of a chocolate
covered, flavored raisin to being in the 23rd week after production begins.
The following is a list of the required positions and the anticipated times at
which they will enter.
[At all times, "Year 1" will refer to the anticipated start date of March 1,
2000]:
Year l
Two Clerical Employees in Week 1
Repairs and Maintenance Department Manager in Week 9
Two Clerical Employees in Week 10
Two Repairs and Maintenance Workers in Week 23
Two Clerical Employees in Month 7
Year 2
Two Clerical Employees in Month 1
Year 3
Two Clerical Employees in Month 1
It is anticipated that ICUL will face considerable demand for its products
due to the nature and size of the snack food market which is reported by the
Snack Food Industry to be over Five Hundred Million ($500,000,000) Dollars
strong and the fact that the main product is a derivative of an already
popular food, Raisins. Therefore, the proper scaling-in of direct labor
employees and supervisors is crucial to the growth of the company. For each
shift on a pair of Production Lines, there is a need for ten employees and two
supervisors. Each pair of Production Lines are purchased three months in
advance of implementation. One week in advance of production, the required
employees are brought in for training. Two shifts will be implemented before
the purchase of additional Production lines. For every $302,768 in weekly
Original sales, ten employees and two supervisors are required per shift. For
every $355,600 in weekly Chocolate sales, an additional ten employees and two
supervisors are also required per shift. Monthly figures are $1,332,179 and
$1,564,640, respectively.
Year 1
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Week 1 - Five Line Employees and One Supervisor
Week 2- Five Line Employees and One Supervisor
Week 14- Ten Line Employees and Two Supervisors
Week 22- Ten Line Employees and Two Supervisors
Week 23 - Ten Line Employees and Two Supervisors
Month7- Ten Line Employees and Two Supervisors
Month 8 - Ten Line Employees and Two Supervisors
Month 9 - Ten Line Employees and Two Supervisors
Month 11 - Twenty Line Employees and Four Supervisors
Year 2
Month 2- Ten Line Employees and Two Supervisors
Month 4- Ten Line Employees and Two Supervisors
Month 6- Ten Line Employees and Two Supervisors
Month 8- Twenty Line Employees and Four Supervisors
Month 10- Ten Line Employees and Two Supervisors
Month 11- Ten Line Employees and Two Supervisors
Month 12- Ten Line Employees and Two Supervisors
Year 3
Month 2- Ten Line Employees and Two Supervisors
Month 3 - Ten Line Employees and Two Supervisors
Month 5 - Twenty Line Employees and Four Supervisors
Month 7 - Ten Line Employees and Two Supervisors
Month 8 - Ten Line Employees and Two Supervisors
Month 9 - Ten Line Employees and Two Supervisors
Month 11 - Twenty Line Employees and Four Supervisors
The production plant is now located in the town of Athoville, in the
Province of New Brunswick, Canada. The management of the Company plans to
employ a labor force from the local area as well as the surrounding
communities, to fill the necessary positions.
Additionally in the upper management and production sectors in the company,
the management will actively recruit individuals that will further the
management's already considerable knowledge and experience base in the food
products industry. As the plant evolves its production schedule, additional
employees will be needed to facilitate the marketing, manufacturing, shipping,
and management of the operations.
Market Information
According to figures available from the Snack Food Industry, the snack food
retail market is in the vicinity of Five Hundred Million ($500,000,000)
Dollars. It is anticipated that the market for flavored raisins will be a
percentage of this number and may well be a substantial amount, in that
raisins are a natural and healthy snack food, with fructose occurring
naturally in the fruit as compared to other types of snack food with
artificial flavoring and added sugar. At this time there is no other known
product which has the consistency of a raisin, the vitamins and nutrition
value of a raisin and the true flavor of any other fruit without the taste of
the raisin coming through. Because the company is the only one using the Mazin
patent to produce this product the company is of the opinion that it is
essentially creating its own industry. Because of the size of the Snack Food
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Market already in place, and the fact that the product is a derivative of an
already accepted fruit, management believes that there is an extensive
market for the products in North America.
The following is a list of some of the potential outlets for companies
sales :
Grocery stores - fruit snack category and Family Packs
Convenience stores - single unit packages and Family Packs
Vending machines - single unit packages
Institutional use - schools, universities, government
facilities, etc.
Airlines - single unit packages
Industrial - seasoning and flavoring processes
Management believes that the flavored raisin products provide a healthy
alternative to candies and sugar-added snacks. Raisins are naturally sweetened
with a naturally occurring sugar known as fructose. Removing the flavor from
the fruit does not remove the fructose and therefore, no additional sweeteners
or sugars are added to the product by the process. Possible competing
products could be fruit roll-ups, fruit-flavored snacks, raisins, and other
fruit products. Further, the companies chocolate-covered flavored raisins
would compete with the sugar-added products mentioned herein.
Suppliers
The Company has no direct suppliers at this time. In looking at where the
necessary raisins might come from, research indicates the following:
California produces between 500,000 and 600,000 tons of raisins per year.
Australia and Chile each produce approximately 400,000 tons of raisins
annually. The Mid-Eastern nations, particularly Turkey, are responsible for
the production of 200,OOO tons of raisins per year.
It is anticipated by Management that a majority of the raisins
purchased by the Company will originate from Australia and Chile. Due to the
large number of raisin producers, and the relative lack of consolidation
within the raisin industry, the Company will be able to obtain the raw
materials necessary to facilitate the fulfillment of the company's mission.
Customers
At this time, the Company has no customers. The segment of the market that
will be initially targeted is the Snack Food market. The next target will be
Family Pack sales to large-scale distribution channels, such as grocery
stores, retailers, and convenience stores, described above. The raisins will
be marketed as a healthy alternative to sweets, and are expected by management
to be extremely popular due to the nature of the flavored food which the
company will supply. ICUL intends to produce a high quality product through
its patented process and believes it is in a very favorably position in this
industry due to the fact that it is essentially the only supplier of this type
of product because of the exclusive patent held by the company.
In addition, another market for flavored raisins that will be vigorously
approached is the cereal and baked goods producers. These companies can
greatly diversify their product lines with flavored raisins with minimal
modifications to their current production processes.
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Competition
Although other companies have flavored fruit and/or raisin products, none
have been able to produce the results that the Company has accomplished via
the patented process. The competitors only coat the fruit with a flavor. Due
to the patent, and the effectiveness of its process (currently the only known
method which removes the raisin flavor and replaces it with fruit flavoring),
ICUL does not believe it has competitors that can produce a similar product.
This is not to say that the companies that are in this market don't compete
for the same consumer, only that the product the Company will produce is
different from that which is available from the competitors at this time.
External Variables
None
Governmental
The Company's products fall under the auspices of the Food and Drug
Administration of Canada and the United States (the "Agencies"). The
agencies require the Company to place a statement on the package regarding the
"Nutrition Facts" of the product. The agencies have approved the packaging
for Amazin Raisins which states,
Serving Size: 1oz (28g)
Servings: 1
Calories: 84
Fat Cal.: 0
Total Fat: 0g
Sat. Fat 0g,
Total Carbohydrate: 21g
Fiber: 2g
Sugars: 20g
Protein: 1g
*Vitamins: Vitamin A, 0%; Vitamin C, 0%; Calcium 2%; Iron 4%.
*Percentage of Daily Values (DV) are based on a 2,000 calorie diet.
Ingredients: Sun-dried seedless raisins, Citric Acid, Natural Flavors.
"Citric Acid" is a natural ingredient derived from food products.
Legislative
An external benefit is the North American Free Trade Agreement, which will
facilitate materials procurement and product distribution by the reduction of
tariff and other trade protocols that interfere with intercontinental trade
practices.
Economic
Raisins are a commodity and are a by-product of grapes. Grapes are utilized
first as wines, second as table grapes, and third to produce raisins. At the
completion of year three in the companies plan of production listed
above , an estimated cumulative total of 43,000 tons of raisins will have
been consumed for production purposes, with an average of 2,294 tons per month
during year three alone. Based on these significant demands, multinational
purchasing agreements will be a necessity for the company to ensure the growth
of the company and the viability of the company. As discussed elsewhere in
this document, the Company anticipates having purchase agreements with
specific suppliers. As soon as financing is complete, the Company anticipates
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meeting with suppliers and putting agreements into place. However, at this
time, there are no agreements in place.
Conclusion
ICUL's use of a unique and patented process has facilitated the creation of
a new division in the Snack Food industry. The company believes that flavored
Raisins will be in demand in large amounts, and the duration of the patent
which will be used by the Company gives it a key advantage in this arena. The
patented process of flavoring the raisins which was receive in 1993, runs
until February 23, 2010 and is renewable. An aggressive program of sales,
promotion, and licensing will reinforce ICUL's position at the forefront of
this dynamic new segment of the Snack Food industry.
Strategy
When Jack Mazin first began the development of the product as it exists today,
he recognized the multi-dimensional marketing potential that this product line
is capable of. The manufacturing process entails a high degree of custom-made
machinery, thereby enhancing the flavoring of the product. The company
envisions worldwide market penetration through its own marketing efforts in
conjunction with its licensing arid royalties efforts.
Marketing Strategy
It is the company's intent to market its products in North America within the
following distribution channels:
Individual Flavored Raisin Packets - a packet consists of one ounce of
flavored raisins. It is anticipated that these packets will be distributed
via the following channels:
Airlines
Airline Terminals
Convenience Stores
Grocery Stores
Theme Parks
These packets will be distributed in packs of ~ twelve, or twenty-four.
Family Packs - these Family Packs hold 1/2, 1, or 2 pound bundles of raisins.
Raisins will be packaged in cylindrical containers and Zip-lock-type bags.
Distribution is anticipated to be among the following channels:
Grocery Store Retailers, such as Sam's Club, Price/Costco, Wal-Mart
Convenience Stores, Seven Eleven, AM/PM, Pink Dot , and others to numerous
to mention .
Ancillary Markets
Flavored raisins are anticipated to be distributed in mass quantities
to the following channels:
Cereal Producers
Baked Goods Producers
Institutional Markets, such as:
Schools
Universities
14
<PAGE>
Government Facilities
Advertisement
The proposed operating budget of the company allocates 20% of gross revenues
for advertising. Effective the first quarter of operations, development of a
comprehensive strategy of consumer advertisements in the form of Grocery Tear
Sheets and Discount Coupons for selected retailers will commence to enhance
the name brand recognition of the flavored raisin product and the name of
ICUL.
Joint Ventures
There are none at this time.
Licensing Agreements
There are no Licensing Agreements at this time
Three Year Plan
The current and projected capacity for the first three years will incorporate
capital expenditures for machinery and equipment of approximately Seven
Million Sixty-five Thousand (7,065,000 CND) Canadian Dollars. According to
the companies projections, the first year's expenses should be approximately
Two Million ($2,000,000.00 CND) Canadian Dollars. The company anticipates that
the money received in the negotiations with New Brunswick, Canada, will be
sufficient to get the company up and running. An additional Four Hundred
Forty-seven Thousand Canadian Dollars is to be placed into the company by the
President of ICUL, Mr. Tom Reichman to assist with any new expenses in the
first year. The only outstanding indebtedness at this time is approximately
One Hundred Thousand Dollars Canadian, which was incurred at the time the
company was initially established.
At the completion of the second year, a determination will be made where to
build a supplemental facility; the leading choices are Canada or the central
United States. Sales volume and location of major customers will be among
several determining factors.
Future Products
Research and Development will begin within the first six months of operations
(First Quarter of 2000, or more specifically, March 1, 2000) and will
incorporate a number of findings from the studies garnered from the production
process. With the additional flavors that are under development and variations
upon the patented process an even more solid diversified product base
will be established. One of the many avenues that Research and Development
will target is a yogurt flavoring for the raisins. Yogurt products will
provide a product with a higher moisture content and high relative durability.
Since the company's current position is based upon technological innovations,
it will continue to support an aggressive Research and Development program to
remain ahead of the competition and in-step with consumer demands.
Conclusion
Internet Culinary Corporation has made the commitment to excellence in the
food products industry by utilizing a number of distinct advantages. The Mazin
15
<PAGE>
patented process is currently the only effective means of producing fruit
flavored raisins and the duration of the patent positions the company at the
forefront of this dynamic new industry. Anticipated widespread demand of fruit
flavored raisins is expected. The ability to increase capacity to meet demand
is enhanced by the expectation of future worldwide licensing and royalty
agreements that will positively impact the firm's profit structure, and
contribute to the establishment of Internet Culinary Corporation as a brand
name in the food products industry on a global scale into the next decade.
The Company will pay for a $2,000,000 key man insurance policy for Jack
Mazin, the beneficiaries of which are $1,000,000 for Mr. Mazin's wife and
$1,000,000 for the Company.
Item 3. Description of Property
The Company leases a 32,000 square foot raisin manufacturing facility located
in the town of Athoville, in the Providence of New Brunswick, Canada
for Four Thousand One Hundred Twenty-five ($4,125.00 CND) Canadian Dollars.
The lease is a "gross" lease with no rent increases. (A gross lease means the
landlord pays the taxes, maintenance and insurance.) The lease term is for
five years beginning October 30, 1999 and expires October 29, 2004 plus a five
year option to extend.
The Company also holds a lease, occupying 2,000 square feet of a 5,800 square
foot office building in Laguna Beach, California. The lease term is 3 years
beginning September 1, 1999 and expires August 31, 2002. The rent is $1.85
Triple Net (NNN), with a yearly increase of 4%. (NNN means the tenant pays
taxes, maintenance and insurance), as well as a 350 square foot Corporate
Headquarters Office in a new office building in south central Las Vegas,
Nevada .
Item 4. Security Ownership of Management and Others and
Certain Security Holders
The following table sets forth information, to the best knowledge of the
Company as of October 31, 1999, with respect to each person known by the
Company to own beneficially more than 5% of the Company's outstanding common
stock, and the officers and directors of the Company.
Name and Address of Amount of
Beneficial Owner Ownership
Brett Salter 5,000,000
Address unknown
Jack Mazin
36 German Mills Road
Thornhill, Ontario, Canada 2,451,900
Rule 144 Stock
Pacific Standard Financial Group, Inc.
711 S. Carson Street, #4
Carson City, Nevada 89701 2,501,800
Rule 144 Stock
The ultimate beneficial owner of PSFG is:
16
<PAGE>
Mark Roser
711 S. Carson Street, #4
Carson City, Nevada 89701
There may be other beneficial owners of PSFG not known to the Company,
however, the Company is informed by Mr. Roser that no one person at PSFG owns
5% or more of the ICUL stock.
Item 5. Directors, Executives, Officers and Significant Employees
POSITIONS HELD
NAME WITH THE CORPORATION
- -------------------- ----------------------
Tom Reichman President, CEO
Director
Stephen Reeder Vice President,
Secretary & Director
Bob Coberly Treasurer & Director
Scott Brake Assistant Vice
President & Director
Kevin Grace Director
Stacy Freidman Director
Resumes of Offices/Directors
Tom Reichman: President, CEO, and Director
Mr. Reichman brings 40 years of business experience to the Company. A former
Marine Captain and the founder and former president and CEO of Scandia Down
Corporation, where he oversaw the building of a $100,000,000 per year
international company. In addition, between 1994 and 1999, Mr. Reichman has
served in numerous corporate posts, including his post as special consultant
to Fortune 500's General Electric in its American Space Satellite Division.
Stephen Reeder: Vice President, Secretary and Director
Mr. Reeder brings 30 years of business experience to the Company. Mr. Reeder
is an expert in institutional financing and will concentrate his efforts in
finance and investor relations. From 1994 to 1999, and prior to joining the
company, Mr. Reeder owned Pacific Gold Mortgage, a financing company
specializing in real estate and business finance.
Bob Coberly: Treasurer and Director
From 1994 to 1999, Mr. Coberly specialized in the structuring of institutional
real estate investments for a diverse base of clients. Mr. Coberly's duties
will be the structuring and finance of the Company's ongoing acquisition of
companies.
Scott Brake: Assistant Vice President and Director
From 1994 to 1999, Mr. Brake has owned his own business that specializes in
the acquisition of international goods for sale throughout Southern
17
<PAGE>
California. Mr. Brake will consult to the Company on international issues and
the structure of corporate acquisitions.
Kevin Grace: Director
From 1994 to 1999, Mr. Grace served as a consultant to the Extreme Sports
industry and most recently as president of QUADX Sport. Mr. Grace will serve
in an advisory role to the Company and attend Board meeting, but will not
serve in any day to day functions.
Stacy Freidman: Director
To the best of the company's knowledge, Ms. Friedman has served as the
corporate secretary from 1994 to 1999 to Mr. Brett Salter. The Company and its
other officers and Directors are engaged in litigation with Mr. Salter and has
scant information on Ms. Friedman
Further, Internet Culinary Corporation's management team will be made up of
top-flight professionals in their respective job classifications. This
competent group will be responsible for the operations of ICUL and work toward
furthering the mission of the company.
"Amazin Raisins" was not a merger company. The certain assets of Amazin
Raisins, such as machinery and equipment were acquired by Pacific Standard
Financial Group, Inc., who sold these assets to Capital Silver Mine,
Inc.("CSVM"). CSVM changed its corporate base of operations to Nevada and
changed it's name to Internet Culinary Corporation ("ICUL"), to reflect the
new type of operation. "Amazin Raisin" was an important acquisition for the
company and as important was the management team who was to come with the
asset.
One of the important members of the team is Mr. Jack Mazin, whose patented
process makes the production of "Amazin Raisins" possible. For this reason, as
well as the fact that he is to be the president of the Canadian subsidiary
that manufactures the flavored raisins, his resume is herein included.
Jack Mazin: President, Canadian Subsidiary
Jack Mazin is the founder of Amazin Raisins. The Company is negotiating a long
term employment and management contract with Mr. Mazin, wherein Mr. Mazin will
run the day to day operations of the Canadian manufacturing facility where the
"Amazin Raisins" brand of products are manufactured. Mr. Mazin's
management experience began in 1978 when he was employed at Goldcrest
Furniture. Mr. Mazin, following an aggressive plan of sales expansion and grew
Goldcrest from a Nine Million (9,000,000 CND) Canadian Dollar company to a
Thirty Million (30,000,000 CND) Canadian Dollar company in less than ten
years. Mr. Mazin's offshore buying program in the Far East solidified
Goldcrest's position as the first Canadian manufacturer to successfully bind
melamine to particle board for case good production.
In 1988, Mr. Mazin left Goldcrest to establish the Canadian-Moroccan Chamber
of Commerce and facilitated a number of trade deals between the two countries
over the course of his employment at this location.
Also in 1988, Mr. Mazin formed RDI (Royal Domain Incorporated) and pioneered
the Internet Culinary Corporation Concept. Mr. Mazin's experience in the
18
<PAGE>
manufacturing industry as well as his background in international trade will
greatly benefit the company and its future endeavors.
While the company has not yet commenced producing amounts for commercial
sales, it has made trial production runs and has determined that a certain
number of people are necessary to perform the required management duties of
this operation. The following is a list of the required personnel, and
the times at which they will enter:
Year 1
President and Vice President of Sales in Week 1
Human Resources Director in Week 12
Lab Technician in Week 13
Advertising Manager in Week 23
Sales Manager, Comptroller, and Purchasing Manager in Month 7
Production Manager in Month 9
Vice President of Manufacturing in Month 10
Year 2
Senior Chemist in Month 3
Chief Operating Officer in Month 6
Chief Financial Officer in Month 6
To support the management staff and to facilitate interaction
between management and front line operations, a number of office employees
will be hired to enhance the efficiency of Internet Culinary Corporation
operational structure. The following is a list of the required positions and
the times at which they will enter:
Year l
Two Clerical Employees in Week 1
Repairs and Maintenance Department Manager in Week 9
Two Clerical Employees in Week 10
Two Repairs and Maintenance Workers in Week 23
Two Clerical Employees in Month 7
Year 2
Two Clerical Employees in Month 1
Year 3
Two Clerical Employees in Month 1
Item 6. Executive Compensation
The Company is currently (as of December, 1999) negotiating Jack Mazin for a
long term Employment Agreement. His annual salary is expected to be Ninety-
six Thousand ($96,000) Dollars plus an automobile allotment of Six Thousand
($6,000.00)Dollars per year.
The Company is currently (as of December, 1999) negotiating with Mr. Reichman
for an employment agreement and his annual salary is expected to be Ninety-six
Thousand ($96,000) Dollars plus an automobile allotment of Six Thousand
($6,000.00)Dollars per year.
19
<PAGE>
No other officers or directors are to receive salaries.
Jack Mazin and Tom Reichman are negotiating a stock bonus incentive plan which
would pay them yearly bonuses in rule 144 stock equal to 1.4 times Amazin
Raisins Profits. Neither have yet to sign this stock bonus plan but are
expected to sign an agreement that incorporates the above referenced stock
incentive package some time in early 2000.
The other officers and Directors are either not compensated with stock or are
negotiating contracts.
Item 7. Interest of Management and Others in Certain Transactions
There are no conflicts of interest, self dealing, or contracts (other than
employment contracts) signed between the company and principals of the
company, and there are no loans made by the company to any officers or
directors.
Item 8. Legal Proceedings
Brett Salter as a shareholder in the corporation on November 22, 1999 filed
a personal suit and a derivative shareholder's action against the corporation
and its board of directors and officers in the matter of Brett Salter, an
individual, on his own behalf and derivatively on behalf of Capitol Silver
Mines, Inc. v. Mervyn Phelan, et al., United States District Court for the
Central District of California, Santa Ana Division, Case No. SA CV 99-912 AHS
(Eex) in which Salter alleged a violation of Section 10(b) of the Securities &
Exchange Act of 1933, as amended, [the Act] in that he claimed the defendants
caused 2,795,000 shares of stock in the corporation pursuant to Section 504 of
Regulation D of the Act to be issued that were illegally issued, and even if
they were legally issued, the corporation received no consideration when the
shares were sold, that thereafter, the defendants embarked upon a scheme to
manipulate the market in the shares by wrongfully exercising control of the
board of directors of the corporation, switching stock transfer agents,
changing the ticker symbol and selling additional shares into the market.
The complaint sought unspecified compensatory and exemplary damages against
all defendants including the individual members of the board of directors of
the corporation and its officers. It further sought an injunction to prohibit
the issuance, sale, transfer or other disposition of the disputed shares and
sequester of any proceeds from the sale of those shares.
The corporation denied any wrongdoing, and secured legal opinions that the
disputed shares were properly issued and counter-sued that the shares were
sold to investors for consideration with the proceeds initially being paid
into an escrow and then being disbursed to the corporation as required by law.
A portion of the shares were sold into the market by the original purchasers
and the proceeds from those sales went into an escrow. The escrow holder
filed an interpleader action and has paid a portion of the sale proceeds into
the Clerk of the District Court because Salter contended that rather then the
proceeds belonging to the shareholders, the proceeds belonged to him. The
shareholders whose proceeds were paid into the Court have likewise, filed an
interpleader action claiming ownership of the proceeds. The corporation
claims no interest in the proceeds.
20
<PAGE>
The corporation denied that it did anything improper when it changed stock
transfer agents or changed its name to more properly reflect its business
resulting in a change of the ticker symbol to reflect the name change to
Internet Culinary Corporation with a ticker symbol ICUL. No additional shares
have been sold into the market as charged in the complaint. The corporation
has issued securities which are restricted pursuant to Section 144 of the Act
as more fully and completely discussed in Part II, Item 2.
Background of the Dispute:
The dispute arose on June 4, 1999 when Salter, who then controlled two of
three members of the board of directors of the corporation caused its
executive committee of two of those members to meet and cancel the disputed
shares, caused the then corporate counsel to put an administrative hold on all
of the disputed shares with the then stock transfer agent and filed suit on
July 19, 1999 both individually and in the name of the corporation seeking an
injunction to prohibit the issuance, sale, transfer or other disposition of
the disputed shares and sequester of any proceeds from the sale of those
shares. The cancellation of the shares by the executive committee of the
board was accomplished, and the stock transfer agent informed of the
cancellation even though the executive committee was not authorized to make
such a determination under the by laws of the corporation as they then
existed, refused to honor the certificates. As a result, the corporation
contends that the action by the executive committee was without effect and the
information given to the stock transfer agent by then corporate counsel was
done in an attempt to improperly interfere with the regular transfer of shares
in the corporation.
On September 3, 1999, the chairman of the board of directors called a meeting
of the board and at that meeting, the board, pursuant to the bylaws, increased
the number of board members from 3 to 5, elected new board members and new
officers, resolved to dismiss the complaint brought by Capitol Silver Mines,
Inc., against all defendants and authorized the employment of a new stock
transfer agent. On November 22, 1999 the complaint of Capitol Silver Mines,
Inc. was deemed superseded by the amended complaint discussed above and
counter claims which had been filed by Tom Reichman and David Kagel against
Capitol Silver Mines, Inc. were dismissed.
Counter claims filed by Tom Reichman, President of the corporation, and David
Kagel, escrow holder for the shareholders who sold the disputed stock, against
Brett Salter remain at issue. It is anticipated that in due course, the
corporation will likewise file a counter claim against Salter for illegal
stock manipulation, naked short selling and entering into a pump and dump
scheme which unreasonably depressed the price in the stock of the corporation
in the over the counter market.
Also, on September 3, 1999, the board of directors voted to retain legal
counsel to defend and to indemnify all board members and officers from any
liability resulting from the lawsuit brought against them by Salter or
derivatively by Salter on behalf of Capitol Silver Mines, Inc.
The corporation denies that the disputed shares were illegally issued or that
they were sold without consideration. Salter previously attempted on an
emergency basis to obtain an injunction to prohibit the issuance, sale,
transfer or other disposition of the disputed shares and sequester of any
proceeds from the sale of those shares but that injunction was denied by the
Court on September 14, 1999.
21
<PAGE>
Part II
Item 1. Market Price of and Dividends of the Registrant's Common Equity and
Other Stockholder Matters
The Company has traded publicly on the OTCBB and has approximately over 600
round lot holders of their stock. There has been no dividends declared.
Item 2. Recent Sales of Unregistered Securities
While there were no recent "sales" of unregistered securities, there were rule
144 securities issued for services and in connection with the purchase of the
assets from PSFG. As stated elsewhere in this disclosure statement, PSFG
received Five Million (5,000,000) shares of Rule 144 stock for the Amazin
Raisin asset. 2,451,900 shares of common stock restricted under rule 144 were
issued to Jack Mazin, 2,501,800 shares of common stock restricted under rule
144 were issued to Pacific Standard Financial Group Inc.
Item 3. Description of Securities
There are 13,173,843 shares of common stock are issued and outstanding.
The company is authorized to issue Twenty Million (20,000,000) shares of
common stock. The company is also authorize to issue Five Million
(5,000,000).
Stock was issued as follows:
(i) There were 18,942,150 shares of common stock issued and outstanding as of
March 11, 1999, all of which was originally issued under rule 144 and all of
which subsequently had its restrictive legend removed. On March 12, 1999, a
50-to-1 reverse split was completed resulting in the total number of issued
and outstanding shares of common stock equaling 378,843 shares.
(ii) 2,795,000 shares of stock were issued under rule 504 in April 1999. (On
April 5, 1999, 5,000,000 shares of common stock were authorized for issuance
under rule 504, of which 2,795,000 have been paid for and issued, with the
balance paid for, authorized and not issued. The company expects to issue the
balance of the 504 shares by October 31, 1999)
(iii) On or about June 9, 1999, 5,000,000 shares of common stock restricted
from treasury stock was issued under rule 144 to Bret Salter in exchange for
$4700.00 which was for an option which he subsequently exercised.
(iv) On September 21, 1999, 2,451,900 shares of common stock restricted under
rule 144 were issued to Jack Mazin off the continuing obligation owed to by
PSFG from the acquisition of the Amazin Raisin asset by PSFG.
(v) On September 22, 1999, 2,501,800 shares of common stock restricted under
rule 144 were issued to PSFG to complete the purchase of the assets of that
company
Mr. Jack Mazin owns 2,451,900 shares of rule 144 stock for which he sold his
share of Amazin Raisins to the Company. PSFG owns 2,501,800 shares of rule 144
stock resultant from the sale of its assets to the Company. This is more than
5% Ownership of Stock.
22
<PAGE>
Mr. Brett Salter owns 5,000,000 shares of rule 144 stock for which he paid
$4,166.00 which is more than 5% of Ownership of the Company.
Under the Company's Articles of Incorporation in Nevada, the aggregate
number of shares which the Corporation shall have authority to issue shall
consist of 20,000,000 shares of Common Stock having a $.001 par value, and
5,000,000 shares of Preferred Stock having a $.001 par value. The Common
Stock and/or Preferred Stock of the Company may be issued from time to time
without prior approval by the stockholders. The Common Stock and/or
Preferred Stock may be issued for such consideration as may be fixed from
time to time by the Board of Directors. The Board of Directors may issue
such shares of Common and/or Preferred Stock in one or more series, with such
voting powers, designations, preferences and rights or qualifications,
limitations or restrictions thereof as shall be stated in the resolution of
resolutions.
Holders of Common Stock or Preferred Stock of the Corporation shall not have
any preference, preemptive right or right of subscription to acquire shares
of the Corporation authorized, issued, or sold, or to be authorized, issued
or sold, or to any obligations or shares authorized or issued or to be
authorized or issued or to be authorized or issued, and convertible into
shares of the Corporation, nor to any right of subscription thereto, other
than to the extent, if any, the Board of Directors in its sole discretion,
may determine from time to time.
Item 4. Indemnification of Directors and Officers
The Nevada Revised Statutes and the Company's Articles of Incorporation and
Bylaws authorize indemnification of a director, officer, employee or agent of
the Company against expenses incurred by him or her in connection with any
action, suit, or proceeding to which such person is named a party by reason of
having acted or served in such capacity, except for liabilities arising from
such person's own misconduct or negligence in performance of duty. In
addition, even a director, officer, employee or agent of the Company who was
found liable for misconduct or negligence in the performance of duty may
obtain such indemnification if, in view of all the circumstances in the case,
a court of competent jurisdiction determines such person is fairly and
reasonably entitled to indemnification. Insofar as indemnification for
liabilities arising under the Securities Act may be permitted to directors,
officers, or persons controlling the Company pursuant to the foregoing
provisions, the Company has been informed that in the opinion of the
Commission, such indemnification is against public policy as expressed in the
Act and is therefore unenforceable.
Part F/S
Item 1. Financial Statements
The audited financial statements of the Company and related notes which are
included in this offering have been examined by James E Slayton, CPA, and have
been so included in reliance upon the opinion of such accountants given upon
their authority as an expert in auditing and accounting.
The following documents are filed as part of this report:
a) Internet Culinary, Corporation
<PAGE>
Internet Culinary Corporation
(A DEVELOPMENT STAGE COMPANY)
FINANCIAL STATEMENTS
as at
September 15, 1999
<PAGE>
TABLE OF CONTENTS
PAGE
INDEPENDENT AUDITORS' REPORT F-1
BALANCE SHEET F-2-3
STATEMENT OF OPERATIONS F-4
STATEMENT OF STOCKHOLDERS' EQUITY F-5
STATEMENT OF CASH FLOWS F-6
NOTES TO FINANCIAL STATEMENTS F-7
<PAGE>
James E. Slayton, CPA
3867 WEST MARKET STREET
SUITE 208
AKRON, OHIO 44333
INDEPENDENT AUDITORS' REPORT
Board of Directors September 27, 1999
Internet Culinary Corporation (The Company)
I have audited the Balance Sheet of Internet Culinary Corporation (A
Development Stage Company), fka Capitol Silver Mines, Inc, as of September
30, 1999, and the related Statements of Operations, Stockholders' Equity and
Cash Flows for the period January 1, 1999 to September 30, 1999. These
financial statements are the responsibility of the Company's management. My
responsibility is to express an opinion on these financial statements based
on my audit. The financial statements of Internet Culinary Corporation as of
December 31, 1998, were audited by other auditors whose report dated April
21, 1999, included a paragraph expressing substantial doubt about the
Company's ability to continue as a going concern.
I conducted my audit in accordance with generally accepted auditing
standards. Those standards require that I plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis
evidence supporting the amounts and disclosures in the financial statement
presentation. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. I believe that my audit provides a
reasonable basis for my opinion.
In my opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Internet Culinary
Corporation, ( A Development State Company), at September 30, 1999, and the
results of its operations and cash flows for the period January 1, 1999 to
September 30, 1999, in conformity with generally accepted accounting
principles.
The accompanying financial statements have been prepared assuming the
Company will continue as a going concern. As discussed in Note 3 to the
financial statements, The Company has had limited operations and has not
established a long term source of revenue. This raises substantial doubt
about its ability to continue as a going concern. The financial statements
do not include any adjustments that might result from the outcome of this
uncertainty. Management's plan in regard to these matters are also described
in Note 3. The financial statements do not include any adjustments that
might result from the outcome of this uncertainty.
/s/ James E. Slayton
- -------------------------
James E. Slayton, CPA
Ohio License ID# 04-1-15582
<PAGE>
Internet Culinary Corporation
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEET
AS AT
<TABLE>
<CAPTION>
(Unaudited)
September 30 December 31 December 31
1999 1998 1997
<S> <C> <C> <C>
ASSETS
CURRENT ASSETS
Cash 100.00 23.00 178.00
Prepaid Expenses 0.00 0.00
------------- ------------- -------------
Total Current Assets 100.00 23.00 178.00
PROPERTY AND EQUIPMENT
Property and Equipment
(net of depreciation) 2,500,000.00 0.00
------------- ------------- -------------
Total Property and Equipment 2,500,000.00 0.00 0.00
OTHER ASSETS
Mining property (Note 1) 454,529.00 454,529.00 454,529.00
Less allowance for
unpatented claims (454,529.00) (454,529.00) (454,529.00)
------------- ------------- -------------
Total Other Assets 0.00 0.00 0.00
------------- ------------- -------------
TOTAL ASSETS $2,500,100.00 $23.00 $178.00
------------- ------------- -------------
------------- ------------- -------------
</TABLE>
See accompanying notes to financial statements
F-2
<PAGE>
Internet Culinary Corporation
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEET
AS AT
<TABLE>
<CAPTION>
(Unaudited)
September 30 December 31 December 31
1999 1998 1997
<S> <C> <C> <C>
LIABILITIES & EQUITY
CURRENT LIABILITES
Accounts Payable 35,762.00 35,762.00 10,750.00
Demand Notes 230,444.00 0.00 0.00
------------- ------------- -------------
Total Current Liabilities 266,206.00 35,762.00 10,750.00
OTHER LIABILITES
Due to Shareholder 0.00 0.00
------------- ------------- -------------
Total Other Liabilities 0.00 0.00
------------- ------------- -------------
Total Liabilities 266,206.00 35,762.00 10,750.00
EQUITY
Common Stock, $0.001 par value, 1,465,180.00 1,444,218.00 1,444,218.00
authorized 20,000,000 shares;
issued and outstanding at
September 30, 1999,
13,173,844 common shares;
issued and outstanding at
December 31, 1998, 288,844
common shares; issued and
outstanding at December 31,
1997, 288,844 common shares
Additional Paid in Capital 2,419,305.00 0.00
Retained Earnings (Deficit
accumulated during
development stage) (1,650,591.00) (1,479,957.00) (1,454,790.00)
------------- ------------- -------------
Total Stockholders' Equity 2,233,894.00 (35,739.00) (10,572.00)
TOTAL LIABILITIES
& OWNER'S EQUITY $2,500,100.00 $23.00 $178.00
------------- ------------- -------------
------------- ------------- -------------
</TABLE>
See accompanying notes to financial statements
F-3
<PAGE>
Internet Culinary Corporation
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF OPERATIONS
FOR PERIOD
<TABLE>
<CAPTION>
(Date of January 1
Inception) to (Unaudited)
to September 30 September 30 December 31 December 31
1999 1999 1998 1997
<S> <C> <C> <C> <C>
REVENUE
Services 0.00 0.00 0.00 0.00
COSTS AND EXPENSES
Selling, General and Administrative 1,085,112.00 120,134.00 10,137.00 13,886.00
Office Services 60,440.00 0.00 15,020.00 15,420.00
Officer and Director's Compensation 50,500.00 50,500.00 0.00 0.00
Write down in mining claims to
net realizable value 454,529.00 0.00 454,529.00
------------- ------------- ------------- -------------
Total Costs and Expenses 1,650,581.00 170,634.00 25,157.00 483,835.00
------------- ------------- ------------- -------------
Net Ordinary Income or (Loss)
before taxes (1,650,581.00) (170,634.00) (25,157.00) (483,835.00)
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------
Provision for Income Tax 10.00 0.00 10.00 0.00
------------- ------------- ------------- -------------
Net Ordinary Income or (Loss)
after taxes (1,650,591.00) (170,634.00) (25,167.00) (483,835.00)
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------
Weighted average number of common
shares outstanding 3,689,375 3,689,375 288,844 288,844
Net Loss Per Share ($0.45) ($0.05) ($0.09) ($1.68)
</TABLE>
See accompanying notes to financial statements
F-4
<PAGE>
Internet Culinary Corporation
(A Development Stage Company)
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
FOR PERIOD
May 16, 1967 (Date of Inception) to September 30, 1999
<TABLE>
<CAPTION>
Deficit
accumulated
Additional during Total
Common Stock paid-in development Stockholder's
Shares Amount capital stage Equity
------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
Balances as at December 31, 1996 288,844 1,444,218.00 (970,955.00) 473,263.00
------------- ------------- ------------- ------------- -------------
Net Loss
Year ended December 31, 1997 (483,835.00) (483,835.00)
------------- ------------- ------------- ------------- -------------
Balances as at December 31, 1997 288,844 1,444,218.00 0.00 (10,572.00)
Net Loss Year ended December 31, 1998 (25,167.00) (25,167.00)
------------- ------------- ------------- ------------- -------------
Balances as at December 31, 1998 288,844 1,444,218.00 0.00 (1,479,957.00) (35,739.00)
March 1, 1999 Issued for legal services 90,000 9,000.00 9,000.00
April 6, 1999 Issued for cash 2,795,000 2,795.00 2,795.00
April 6, 1999 Received cash-shares unissued 0.00 2,205.00 2,205.00
May 27, 1999 Issued for cash 5,000,000 4,167.00 0 4,167.00
September 9, 1999 Issued in asset
purchase agreement-restricted
shares 5,000,000 5,000.00 2,417,100.00 2,422,100.00
Net loss January 1, 1999 to
September 30, 1999 (170,634.00) (170,634.00)
------------- ------------- ------------- ------------- -------------
Balances as at September 30, 1999 13,173,844 $1,465,180.00 $2,419,305.00 ($1,650,591.00) $2,233,894.00
------------- ------------- ------------- ------------- -------------
------------- ------------- ------------- ------------- -------------
</TABLE>
See accompanying notes to financial statements
F-5
<PAGE>
Internet Culinary Corporation
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CASH FLOWS
FOR PERIOD
<TABLE>
<CAPTION>
(Date of January 1,
Inception) 1999 to (Unaudited)
to September 30 September 30 December 31 December 31
1999 1999 1998 1997
<S> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Cash received from customers 0.00 0.00 0.00 0.00
Cash paid to suppliers and employees 1,198,757.00 161,534.00 25,167.00 91,272.00
Cash disbursed for Operating
Activities 1,198,757.00 161,534.00 25,167.00 91,065.00
------------- ------------- ------------- -------------
Net cash flow provided by (1,198,757.00) (161,534.00) (25,167.00) (91,065.00)
operating activities
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of fixed assets 0.00 0.00 0.00 0.00
------------- ------------- ------------- -------------
Net cash used by investing activities (0.00) (0.00) (0.00) (0.00)
CASH FLOWS FROM FINANCING ACTIVITIES
Issuance of Capital Stock 1,010,651.00 9,167.00 0.00 80,700.00
Advances from shareholders 35,762.00 25,012.00 10,750.00
Demand Note 152,444.00 152,444.00 0.00 0.00
------------- ------------- ------------- -------------
Net cash provided by financing 1,198,857.00 161,611.00 25,012.00 91,450.00
activities
Balances as at beginning of period 0.00 23.00 178.00 207.00
Net increase (decrease) in cash 100.00 77.00) (155.00) 385.00
Balances as at end of period 100.00 100.00 23.00 (178.00)
</TABLE>
See accompanying notes to financial statements
F-6
<PAGE>
Internet Culinary Corporation
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - HISTORY AND ORGANIZATION OF THE COMPANY
The Company was organized May 16, 1967(Date of Inception) under the
laws of the State of Idaho as Capitol Silver Mines, Inc. (The Company) and
is authorized to issue 20,000,000 shares of $.001 par common stock. The
Company changed its state of incorporation and changed its name to Internet
Culinary Corporation (The Company) in September, 1999. The Company has had
limited operations and in accordance with SFAS #7, the Company is considered
a development stage company.
The Company acquired 10 unpatented mining claims as part of the
Company's organization in 1967. The claims were recorded at the Company's
par value of $.10 per share in the amount of $454,529.00. The fair value of
the stock and the mining claims was zero at December 31, 1997, accordingly,
these claims were written down to net realizable value in the year ended
December 31, 1997.
The Company had 288,844 shares of its common stock issued and
outstanding on December 31, 1998. The shareholder's equity section and the
footnotes reflects a 50 to 1 reverse split in April of 1999.
On March 1, 1999, the Company issued 90,000 shares of its common stock
in exchange for legal services.
On April 6, 1999, the Company pursuant to Rule 504 was authorized to
issue 5,000,000 shares of its common stock, of which 2,795,000 shares have
been issued for cash of $2,795.00.
On May 27, 1999, the Company received $4,166.50 for 5,000,000 shares of
restricted stock.
On September 9, 1999, the Company completed a purchase of certain
tangible personal property( such as machinery, equipment, inventories of raw
materials and supplies, manufactured and purchased parts, goods in process
and finished goods, furniture, automobiles, trucks, tractors, trailers,
tools, jigs, and dies), for 5,000,000 shares of its $.001 par value common
stock and an agreement that $450,000.00 of new capital be infused into the
Company and an asset based loan in the amount of $350,000.00 be obtained.
This requirement will be met by the line of credit mentioned in note 3. The
first distribution from the line of credit is planned for the first quarter
of the year 2000. The Company plans to utilize this equipment in operations
to be based in Atheville, Canada.
NOTE 2 - ACCOUNTING POLICIES AND PROCEDURES
Accounting polices and procedures have not been determined except as
follows:
1. The Company uses the accrual method of accounting.
F-7
<PAGE>
Internet Culinary Corporation
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
NOTE 2 - ACCOUNTING POLICIES AND PROCEDURES(continued)
2. Basic earnings per share are computed using the weighted average
number of shares of common stock outstanding.
3. The Company has not yet adopted any policy regarding payment of
dividends. No dividends have been paid since inception.
4. The Company's Statement of Cash Flows is reported utilizing
cash(currency on hand and demand deposits) and cash equivalents( short-term,
highly liquid investments). The Company's Statement of Cash Flows is
reported utilizing the indirect method of reporting cash flows.
5. The cost of equipment is depreciated over the estimated useful life
of the equipment utilizing the straight line method of deprecation. No
depreciation has been recorded at this time as there has not been a full
months operations or ownership of the equipment.
6. The Company will review its need for a provision for federal income
tax after each operating quarter and each period for which a statement of
operations is issued. The Company's marginal tax rate is 0, and its
effective tax rate is 0.
7. The Company has net operating losses which expire
$970,955.00 in the year 2012
483,835.00 in the year 2013
25,167.00 in the year 2014
The Company believes that these benefits will be less than likely be
utilized and therefore did reduced any deferred tax benefits to zero or its
recoverable amount. Any benefits to the Company would be considered
noncurrent.
8. The Company records its inventory at cost.
9. The preparation of financial statements in conformity with generally
accepted accounting principles requires that management make estimates and
assumptions which affect the reported amounts of assets and liabilities as at
the date of the financial statements and revenues and expenses for the period
reported. Actual results may differ from these estimates.
F-8
<PAGE>
Internet Culinary Corporation
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
NOTE 3 - GOING CONCERN
The Company's financial statements are prepared using the generally
accepted accounting principles applicable to a going concern, which
contemplates the realization of assets and liquidation of liabilities in the
normal course of business. The Province of New Brunswick has agreed up to
provide a $2,000,000 working capital line of credit in Canadian Dollars to
fund the company's growth. The line of credit with a three year term at 1/2%
over the Canadian Prime. There are no payments scheduled for the years 2000,
2001 or 2002 at this time. The first distribution of funds, approximately
$200,000.00, will be utilized to procure a fresh line of samples, inventory,
labor costs and other working capital needs. The balance of the line of
credit will be utilized for the company's long term expansion.
NOTE 4 - RELATED PARTY TRANSACTION
The officers and directors of the Company are involved in other business
activities and may, in the future, become involved in other business
opportunities. If a specific business opportunity becomes available, such
persons may face a conflict in selecting between the Company and their other
business interests. The Company has not formulated a policy for the
resolution of such conflicts. There have not been any payments made to
related parties.
NOTE 5 - WARRANTS AND OPTIONS
There are no warrants or options outstanding to acquire any additional
shares of common stock.
NOTE 6 - DEBT
American Auditors, LLC paid operational expenses in the amount of
$78,000 for the Company during the period January 1, 1999 to April 30, 1999.
A demand note in this amount was issued at 14% interest payable on or before
January 1, 2000. In addition, American Auditors, LLC, has advanced the
Company $152,444 for operational expenses from the period May 1, 1999 to
September 15, 1999 as the firm incurred operational expenses. The Company
has issued a demand note in this amount at 14% interest payable on or before
January 1, 2000.
There was accounts payable due to a significant stockholder in the
amount of $30,862.00. There has been no payment to this stockholder or other
related parties during the audit periods.
F-9
<PAGE>
Internet Culinary Corporation
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
NOTE 7 - YEAR 2000 ISSUE
The Year 2000 issue arises because many computerized systems use two digits
rather than four to identify a year. Date-sensitive systems may recognize
the year 2000 as 1900 or some other date, resulting in errors when
information using year 2000 dates is processed. In addition, similar
problems may arise in systems which use certain dates in 1999 to represent
something other than a date. The effects of the Year 2000 issue may be
experienced before on, or after January 1, 2000 and if not addressed, the
impact on operations and financial reporting may range from minor errors to
significant systems failure which could affect an entity's ability to conduct
normal business operations. It is not possible to be certain that all
aspects of the Year 2000 issue affecting the entity, including those related
to the efforts of customers, suppliers, or other third parties will be fully
resolved.
F-10
23
<PAGE>
Item 2. Changes in and Disagreements With Accountants on Accounting and
Financial Disclosure
There was a change in accountants when the prior accountant, Mr. Semmons
voluntarily removed himself to allow an accountant with more experience to
complete the certified audit.
Signatures
In accordance with Section 12 of the Securities Exchange Act of 1934, the
registrant caused this registration statement to be signed on its behalf by
the undersigned, thereunto duly authorized.
Internet Culinary Corporation
(Registrant)
Date: January 5, 2000 BY: /s/ Tom Reichman
--------------------------
Tom Reichman, President
Part III
Item 1. Index to Exhibits
Exhibit
Number Title
- -------- ------
3.1 Article of Incorporation
3.2 By Laws
10 Agreement and Plan of Merger
16 Letter on change in certifying accountant
Item 2. Description of Exhibits
ARTICLES OF INCORPORTATION
OF
INTERNET CULINARY CORPORATION
KNOW ALL MEN BY THESE PRESENTS:
That the undersigned, for the purpose of forming a corporation under and by
virtue of the laws of the State of Nevada, do hereby adopt the following
Articles of Incorporation.
1. Name of Company:
INTERNET CULINARY CORPORATION
2. Resident Agent:
The Resident Agent of the company is:
Brian Dvorak
500 N. Rainbow Blvd., Suite 300
Las Vegas, NV 89107
3. Board of Directors:
The company shall initially have one (1) director. He is: David L. Kagel.
This individual shall serves as director until his successor or successors have
been elected and qualified. The number of directors may be increased or
decreased by a duly adopted amendment to the By-Laws of the Corporation.
4. Authorized Shares:
The aggregate number of shares which the Corporation shall have authority
to issue shall consist of 20,000,000 shares of Common Stock having a $.01 par
value, and 5,000,000 shares of Preferred Stock having a $.01 par value. The
Common Stock and/or Preferred Stock of the Company may be issued from time to
time without prior approval by the stockholders. The Common Stock and/or
Preferred Stock may be issued for such consideration as may be fixed from time
to time by the Board of Directors. The Board of Directors may issue such shares
of Common and/or Preferred Stock in one or more series, with such voting powers,
designations, preferences and rights or qualifications, limitations or
restrictions thereof as shall be stated in the resolution of resolutions.
5. Preemptive Rights and Assessment of Shares:
Holders of Common Stock or Preferred Stock of the Corporation shall not
have any preference, preemptive right or right of subscription to acquire shares
of the Corporation authorized, issued, or sold, or to be authorized, issued or
sold, or to any obligations or shares authorized or issued or to be authorized
or issued or to be authorized or issued, and convertible into shares of the
Corporation, nor to any right of subscription thereto, other
<PAGE>
than to the extent, if any, the Board of Directors in its sole discretion, may
determine from time to time.
6. Director's and Officer's Liability:
A director or officer of the Corporation shall not be personally liable to
this Corporation or its stockholders for damages for breach of fiduciary duty as
a director or officer, but this Article shall not eliminate or limit the
liability of a director or officer for (i) acts or omissions which involve
intentional misconduct, fraud or a knowing violation of the law or (ii) the
unlawful payment of dividends. Any repeal or modification of the Article by
stockholders of the Corporation shall be prospective only, and shall not
adversely affect any limitation on the personal liability of a director or
officer of the Corporation for acts of omissions prior to such repeal of
modification.
7. Indemnity:
Every person who was or is a party to, or is threatened to be made a party
to, or is involved in any such action, suit or proceeding, whether civil,
criminal, administrative or investigative, by the reason of the fact that he or
she or a person with whom he or she is a legal representative, is or was a
director of the Corporation, or who is serving at the request of the Corporation
as a director or officer of another corporation, or is a representative in a
partnership, joint venture, trust or other enterprise, shall be indemnified and
held harmless to the fullest extent legally permissible under the laws of the
State of Nevada from time to time against all expenses, liability and loss
(including attorney's fees, judgments, fines, and amounts paid or to be paid in
a settlement) reasonably incurred or suffered by him or her in connection
therewith. Such right of indemnification shall be a contract right and which may
be enforced in any manner desired by such person. The expenses of officers and
directors incurred in defending a civil suit or proceeding must be paid by the
Corporation as incurred and in advance of the final disposition of the action,
suit, or proceeding, under receipt of an undertaking by or on behalf of the
director or officer to repay the amount if it is ultimately determined by a
court of competent jurisdiction that he or she is not entitled to be indemnified
by the Corporation. Such right of indemnification shall not be exclusive of any
other right of such directors, officers or representatives may have or hereafter
acquire, and without limiting the generality of such statement, they shall be
entitled to their respective rights of indemnification under any bylaw,
agreement, vote of stockholders, provision of law, or otherwise, as well as
their rights under this article
Without limiting the application of the foregoing, the Board of Directors
may adopt By-Laws from time to time without respect to indemnification, to
provide at all times the fullest indemnification permitted by the laws of the
State of Nevada, and may cause the Corporation to purchase or maintain insurance
on behalf of any person who is or was a director or officer.
8. Amendments:
This Corporation reserves the right to amend, alter, change, or repeal any
provision contained in these Articles of Incorporation or its By-Laws, in the
manner now or hereafter prescribed by statute or the Articles of Incorporation
or said By-Laws, and all rights conferred upon shareholders are granted subject
to this reservation.
<PAGE>
9. Power of Directors:
In furtherance, and not in limitation of those powers conferred by statute,
the Board of Directors is expressly authorized:
(a) Subject to the By-Laws, if any adopted by the shareholders, to make, alter
or repeal the By-Laws of the corporation;
(b) To authorize and cause to be executed mortgages and liens, with our without
limitations as to the amount, upon the real and personal property of the
corporation.
(c) To authorize the guaranty by the Corporation of the securities, evidences
of indebtedness and obligations of other persons, corporations or business
entities;
(d) To set apart out of any funds of the Corporation available for dividends a
reserve or reserves for any proper purpose and to abolish any such reserve;
(e) By resolution adopted by the majority of the whole Board, to designate one
or more committees to consist of one or more Directors or the Corporation,
which, to the extent provided on the resolution or in the By-Laws of the
Corporation, shall have and may authorize the seal of the Corporation to be
affixed to all papers which may require it. such committee or committees shall
have name and names as may be stated in the By-Laws of the Corporation or as may
be determined from time to time by resolution adopted by the Board of Directors
All the corporate powers of the Corporation shall be exercised by the Board
of Directors except as otherwise herein or in the By-Laws or by law.
IN WITNESS WHEREOF, I hereby set my hand on this 31 day of August, 1999,
hereby declaring and certifying that the facts stated hereinabove are true.
Signature of Incorporator:
Name: Brian Dvorak
Address: 500 N. Rainbow, Suite 300
Las Vegas, NV 89107
/s/ Brian Dvorak
- --------------------
State of Nevada )
) SS:
County of Clark )
The foregoing instrument was acknowledged before me this 31
day of August, 1999.
/s/ Tina M McCombs
- ---------------------
Notary Public of
said county and state
<PAGE>
Certificate of Acceptance of Appointment of Resident Agent:
I, Brian Dvorak, hereby accept appointment as Resident
Agent for the above-named corporation.
/s/ Brian Dvorak
- --------------------------
Brian Dvorak
Resident Agent
BYLAWS
OF
INTERNET CULINARY CORPORATION
ARTICLE ONE
OFFICES
The principal office of the Corporation in the State of Nevada shall be
located in Las Vegas, County of Clark. The Corporation may have such other
offices, either within or without the State of Nevada, as the Board of
Directors may designate or as the business of the Corporation may require
from time to time.
ARTICLE TWO
SHAREHOLDERS
SECTION 1. Annual Meeting The annual meeting of the shareholders shall be
held on the first day in the month of November in each year, beginning with
the year 1999, at the hour of one o'clock p.m., for the purpose of electing
Directors and for the transaction or such other business as may come before
the meeting. If the day fixed for the annual meeting shall be a legal
holiday, such meeting shall be held on the next business day. If the election
of Directors shall not be held on the day designated herein for any annual
meeting of the shareholders, or at any adjournment thereof the Board of
Directors shall cause the election to be held at a special meeting of the
shareholders as soon thereafter as soon as conveniently may be.
SECTION 2. Special Meetings. Special meetings of the shareholders, for any
purpose or purposes, unless otherwise prescribed by statute, may be called by
the President or by the Board of Directors, and shall be called by the
<PAGE>
President at file request of the holders of not less than fifty percent (50%)
of all the outstanding shares of the Corporation entitled to vote at the
meeting.
SECTION 3. Place of Meeting. The Board of Directors may designate any place,
either within or without the State of Nevada, unless otherwise prescribed by
statute, as the place of meeting for any annual meeting or for any special
meeting. A waiver of notice signed by all shareholders entitled to vote at a
meeting may designate any place, either within or without the State of
Nevada, unless otherwise prescribed by statute, as the place for the holding
of such meeting. If no designation is made, the place of the meeting will be
the principal office of the Corporation.
SECTION 4. Notice of Meeting, Written notice stating the place, day and hour
of the meeting and, in case of a special meeting, the purpose or purposes for
which the meeting is called, shall unless otherwise prescribed by statute, be
delivered not less than ten (10) days nor more than sixty (60) days before
the date of the meeting, to each shareholder of record entitled to vote at
such meeting. If mailed, such notice shall be deemed to be delivered when
deposited in the United States mail, addressed to the shareholder at his/her
address as it appears on the stock transfer books of the Corporation, with
postage thereon prepaid.
SECTION 5. Closing of Transfer Books or Fixing of Record. For the purpose of
determining shareholders entitled to notice of or to vote at any meeting of
shareholders or any adjournment thereof, or shareholders entitled to receive
payment of any dividend, or in order to make a determination of shareholders
for any other proper purpose, the Board of Directors of the Corporation may
provide that the stock transfer books shall be closed for a stated period,
but not to exceed in any case fifty (50) days. If the stock transfer books
shall be closed for the purpose of determining shareholders entitled to
notice of or to vote at a meeting of shareholders, such books shall be closed
<PAGE>
for at least ten (10) days immediately preceding such meeting. in lieu of
closing the stock transfer books, the Board of Directors may fix in advance a
date as the record date for any such determination of shareholders, such date
in any case to be not more than fifty (50) days and, in case of a meeting of
shareholders, not less than ten (10) days prior to the date on which. the
particular action requiring such determination of shareholders is to be taken
if the stock transfer books are not closed and no record date is fixed for
determination of shareholders entitled to notice of or to vote at a meeting
of shareholders, or shareholders entitled to receive payment of a dividend,
the date on which notice of the meeting is mailed or the date on which the
resolution of the Board of Directors declaring such dividend is adopted, as
the case may be, shall be the record date for such determination of
shareholders when a determination of shareholders entitled to vote at any
meeting of shareholders has been made as provided in this section, such
determination shall apply to any adjournment thereof.
SECTION 6. Voting Lists. The officer or agent having charge of the stock
transfer books for shares of the Corporation shall make a complete list of
the shareholders entitled to vote at each meeting of shareholders or at any
adjournment thereof, arranged in alphabetical order, with the address of and
the number of shares held by each. Such list shall be produced and kept open
at the time and place of the meeting and shall be subject to the inspection
of any shareholder during the whole time of the meeting for the purposes
thereof.
SECTION 7. Quorum. A majority of the outstanding shares of the Corporation
entitled to vote, represented in person or by proxy, shall constitute a
quorum at a meeting of shareholders. If less than a majority of the
outstanding shares are represented at a meeting, a majority of the shares so
represented may adjourn the meeting from time to time without further notice.
At such adjourned meeting at which a quorum shall be present or represented,
any business may be transacted which might have been transacted at the
meeting as originally
<PAGE>
noticed. The shareholders present at a duly organized meeting may continue
to transact business until adjournment, notwithstanding the withdrawal of
enough shareholders to leave less than a quorum.
SECTION 8. Proxies. At all meetings of shareholders, a shareholder may vote
in person or by proxy executed in writing by the shareholder by his/her duly
authorized attorney-in-fact. Such proxy shall be filed with the secretary of
the Corporation before or at the time of the meeting.
SECTION 9. Voting of Shares. Each outstanding share entitled to vote shall be
entitled to one vote upon each matter submitted to a vote at a meeting of
shareholders.
SECTION 10. Voting of Shares by Certain Holders. Shares standing in the name
of another corporation may be voted by such officer's agent or proxy as the
Bylaws of such corporation may prescribe or, in the absence of such
provision, as the Board of Directors of such corporation may determine.
Shares held by an administrator, executor, guardian or conservator may be
voted by him, either in person or by proxy, without a transfer of such shares
into his name. Shares standing in the name of a trustee may be voted by him,
either in person or by proxy, but no trustee shall be entitled to vote shares
held by him without a transfer of such shares into his name. Shares standing
in the name of a receiver may be voted by such receiver, and the shares held
by or under the control of a receiver may be voted by such receiver without
the transfer thereof into his name, if authority to do so be contained in an
appropriate order of the court by which such receiver was appointed.
A shareholder whose shares are pledged shall be entitled to vote such shares
until the shares have been transferred into the name of the pledgee, and
thereafter the pledgee shall be entitled to vote the shares so transferred.
<PAGE>
Shares of its own stock belonging to the Corporation shall not be voted,
directly or indirectly, at any meeting, and shall not be counted in
determining the total number of outstanding shares at any given time.
SECTION 11. Informal Action By Shareholders. Unless otherwise provided by
law, any action required to be taken at a meeting of the shareholders, or any
other action which may be taken at a meeting of the shareholders, may be
taken without a meeting if a consent in writing, setting forth the action so
taken, shall be signed by all of the shareholders entitled to vote with
respect to the subject matter thereof.
ARTCLE III
BOARD OF DIRECTORS
SECTION 1. General Powers. The Board of Directors shall be responsible for
the control and management of the affairs, property and interests of the
Corporation and may exercise all powers of the Corporation, except as are in
the Articles of Incorporation or by statute expressly conferred upon or
reserved to the shareholders.
SECTION 2. Number, Tenure and Qualifications. The number of directors of the
Corporation shall be fixed by the Board of Directors, but in no event shall
be less than one (1). Each director shall hold office until the next annual
meeting of shareholders and until his/her successor shall have been elected
and qualified.
SECTION 3. Regular Meeting. A regular meeting of the Board of Directors shall
be held without other notice than this Bylaw immediately after, and at the
same place as, the annual meeting of shareholders. The Board of Directors
<PAGE>
may provide, by resolution, the time and place for the holding of additional
regular meetings without notice other than such resolution.
SECTION 4. Special Meetings. Special meetings of the Board of Directors may
be called by or at the request of the President or any two directors. The
person or persons authorized to call special meetings of the Board of
Directors may fix the place for holding any special meeting of the Board of
Directors called by them.
SECTION 5. Notice. Notice of any special meeting shall be given at least one
(1) day previous thereto by written notice delivered personally or mailed to
each director at his business address, or by telegram, if mailed, such notice
shall be deemed to be delivered when deposited in the United States mail so
addressed, with postage thereon prepaid. If notice be given by telegram, such
notice shall be deemed to be delivered when the notice be given to the
telegraph company. Any directors may waive notice of any meeting. The
attendance of a director at a meeting shall constitute a waiver of notice of
such meeting, except where a director attends a meeting for the express
purpose of objecting to the transaction of any business because the meeting
is not lawfully called or convened.
SECTION 6. Quorum. A majority of the number of directors fixed by Section 2
of this Article shall constitute a quorum for the transaction of business at
any meeting of the Board of Directors, but if less than such majority is
present at a meeting, a majority of the directors present may adjourn the
meeting from time to time without further notice.
SECTION 7. Telephonic Meeting. A meeting of the Board of Directors may be had
by means of a telephone conference or similar communications equipment by
which all persons participating in the meeting can hear each other, and the
<PAGE>
participation in a meeting under such circumstances shall constitute presence
at the meeting.
SECTION 8. Manner of Action. The act of the majority of the directors present
at a meeting at which a quorum is present shall be the act of the Board of
Directors.
SECTION 9. Action Without a Meeting. Any action that may be taken by the
Board of Directors at a meeting may be taken without a meeting if a consent
in writing, setting forth the action so to be taken, shall be signed before
such action by all of the directors.
SECTION 10. Vacancies. Any vacancy occurring in the Board of Directors may be
filled by the affirmative vote of a majority of the remaining directors
though less than a quorum of the Board of Directors, unless otherwise
provided by law. A director elected to fill a vacancy shall be elected for
the unexpired term of his/her predecessor in office. Any directorship to be
filled by reason of an increase in the number of directors may be filled by
election by the Board of Directors for a term of office continuing only until
the next election of directors by the shareholders.
SECTION 11. Resignation. Any director may resign at any time by giving
written notice to the Board of Directors, the President or the Secretary of
the Corporation. Unless otherwise specified in such written notice, such
resignation shall take effect upon receipt thereof by the Board of Directors
or such officer, and the acceptance of such resignation shall not be
necessary to make it effective.
SECTION 12. Removal. Any director may be removed with or without cause at
anytime by the affirmative vote of shareholders holding of record, in the
<PAGE>
aggregate, at least a majority of the outstanding shares of stock of the
Corporation, at a special meeting of the shareholders called for that
purpose, and may be removed for cause by action of the Board.
SECTION 13. Compensation. By resolution of the Board of Directors, each
director may be paid for his/her expenses, if any, of attendance at each
meeting of the Board of Directors, and may be paid a stated salary as
director or a fixed sum for attendance at each meeting of the Board of
Directors or both. No such payment shall preclude any director from serving
the Corporation in any other capacity and receiving compensation therefor,
SECTION 14. Contracts. No contract or other transaction between this
Corporation and any other corporation shall be impaired, affected or
invalidated, nor shall any director be liable in any way by reason of the
fact that one or more of the directors of this Corporation is or are
interested in, or is a director or officer, or are directors or officers of
such other corporations, provided that such facts are disclosed or made known
to the Board of Directors, prior to their authorizing such transaction. Any
director, personally and individually, may be a party to or may be interested
in any contract or transaction of this Corporation, and no directors shall be
liable in any way by reason of such interest, provided that the fact of such
interest be disclosed or made known to the Board of Directors prior to their
authorization of such contract or transaction, and provided that the Board of
Directors shall authorize, approve or ratify such contract or transaction by
the vote (not counting the vote of any such Director) of a majority of a
quorum, notwithstanding the presence of any such director at the meeting at
which such action is taken. Such director or directors may be counted in
determining the presence of a quorum at such meeting. This Section shall not
be construed to impair, invalidate or in any way affect any contract or other
transaction which would otherwise be valid under the law (common, statutory
or otherwise) applicable thereto.
<PAGE>
SECTION 15. Committees. The Board of Directors, by resolution adopted by a
majority of the entire Board, may from time to time designate from among its
members an executive committee and such other committees, and alternate
members thereof, as they may deem desirable, with such powers and authority
(to the extent permitted by law) as may be provided in such resolution. Each
such committee shall serve at the pleasure of the Board.
SECTION 16. Presumption of Assent. A director of the Corporation who is
present at a meeting of the Board of Directors at which action on any
corporate mailer is taken shall be presumed to have assented to the action
taken unless his/her dissent shall be entered into the minutes of the meeting
or unless he/she shall file written dissent to such action with the person
acting as the Secretary of the meeting before the adjournment thereof; or
shall forward such dissent by registered mail to the Secretary of the
Corporation immediately after the adjournment of the meeting. Such right to
dissent shall not apply to a director who voted in favor of such action.
ARTICLE IV
OFFICERS
SECTION ONE. Number. The officers of the Corporation shall be a President,
one or more Vice Presidents, a Secretary, and a Treasurer, each of whom shall
be elected by the Board of Directors. Such other officers and assistant
officers as may be deemed necessary may be elected or appointed by the Board
of Directors, including a Chairman of the Board. In its discretion, the Board
of Directors may leave unfilled for any such period as it may determine any
office except those of President and Secretary. Any two or more offices may
be held by the same person. Officers may be directors or shareholders of the
Corporation.
<PAGE>
SECTION 2. Election and Term of Office. The officers of the Corporation to be
elected by the Board of Directors shall be elected annually by the Board of
Directors at the first meeting of the Board of Directors held after each
annual meeting of the shareholders. If the election of officers shall not be
held at such meeting, such election shall be held as soon thereafter as
conveniently may be. Each officer shall hold office until his/her successor
shall have been duly elected and shall have qualified, or until his/her
death, or until he/she can resign or shall have been removed in the manner
hereinafter provided.
SECTION 3. Resignation. Any officer may resign at any time by giving written
notice of such resignation to the Board of Directors, or to the President or
the Secretary of the Corporation. Unless otherwise specified in such written
notice, such resignation shall take effect upon receipt thereof by the Board
of Directors or by such officer, and the acceptance of such resignation shall
not be necessary to make it effective.
SECTION 4. Removal. Any officer or agent may be removed by the Board of
Directors whenever, in its judgment, the best interests of the Corporation
will be served thereby, but such removal shall be without prejudice to the
contract rights, if any, of the create contract rights, and such appointment
shall be terminable at will.
SECTION 5. Vacancies. A vacancy in any office because of death,
resignation, removal, disqualification or otherwise, may be filled by the
Board of Directors for the unexpired portion of the term.
SECTION 6. President. The President shall be the principal executive officer
of the Corporation and, subject to the control of the Board of Directors,
shall in general supervise and control all of the business and affairs of the
<PAGE>
Corporation. He/she shall, when present, preside at all meetings of the
shareholders and of the Board of Directors, unless there is a Chairman of the
Board, in which case the Chairman will preside. The President may sign, with
the Secretary or any other proper officer of the Corporation thereunto
authorized by the Board of Directors, certificates for shares of the
Corporation, any deeds, mortgages, bonds, contracts, or other instruments
which the Board of Directors has authorized to be executed, except in cases
where the signing and execution thereof shall be expressly delegated by the
Board of Directors or by these Bylaws to some other officer or agent of the
Corporation, or shall be required by law to be otherwise signed or executed;
and in general shall perform all duties incident to the office of President
and such other duties as may be prescribed by the Board of Directors from
time to time.
SECTION 7. Vice President. In the absence of the President or in the event of
his/her death, inability or refusal to act, the Vice President shall perform
the duties of the President, and when so acting, shall have all the powers of
and be subject to all the restrictions upon the President. The Vice President
shall perform such other duties as from time to time may be assigned by the
President or by the Board of Directors. If there is more than one Vice
President, each Vice President shall succeed to the duties of the President
in order of rank as determined by the Board of Directors, if no such rank has
been determined, then each Vice President shall succeed to the duties of the
President in order of date of election, the earliest date having first rank.
SECTION 8. Secretary. The Secretary shall: (a) keep the minutes of the
proceedings of the shareholders and of the Board of Directors in one or more
minute book provided for that purpose; (b) see that all notices are duly
given in accordance with the provisions of these Bylaws or as required by
law; (c) be custodian of the corporate records and of the seal of the
Corporation and see that the seal of the Corporation is affixed to all
documents, the execution of which
<PAGE>
on behalf of the Corporation under its seal is duly authorized; (d) keep a
register of the post office address of each shareholder which shall be
furnished to the Secretary by such shareholder; (e) sign with the president
certificates for shares of the Corporation, the issuance of which shall have
been authorized by resolution of the Board of Directors; (f) have general
charge of the stock transfer books of the Corporation; and (g) in general
perform all duties incident to the office of the Secretary and such other
duties as from time to time may be assigned by the President or by the Board
of Directors.
SECTION 9. Treasurer. The Treasurer shall; (a) have charge and custody of and
be responsible for all bonds and securities of the Corporation; (b) receive
and give receipts for moneys due and payable to the Corporation from any
source whatsoever, and deposit all such moneys in the name of the Corporation
in such banks, trust companies or other depositories as shall be selected in
accordance with the provisions of Article VI of these Bylaws; and (c) in
general perform all of the duties incident to the office of Treasurer and
such other duties as from time to time may be assigned to him by the
President or by the Board of Directors.
SECTION 10. Salaries. The salaries of the officers shall be fixed from time
to time by the Board of Directors, and no officer shall be prevented from
receiving such salary by reason of the fact that he/she is also a director of
the corporation.
SECTION 11. Sureties and Bonds. In case the Board of Directors shall so
require any officer, employee or agent of the Corporation shall execute to
the Corporation a bond in such sum, and with such surety or sureties as the
Board of Directors may direct, conditioned upon the faithful performance of
his/her duties to the Corporation, including responsibility for negligence
for the accounting for
<PAGE>
all property, finds or securities of the Corporation which may come into
his/her hands.
SECTION 12. Shares of Stock of Other Corporations. Whenever the Corporation
is the holder of shares of stock of any other corporation, any right of power
of the Corporation as such shareholder (including the attendance, acting and
voting at shareholders' meetings and execution of waivers, consents, proxies
or other instruments) may be exercised on behalf of the Corporation by the
President, any Vice President or such other person as the Board of directors
may authorize.
ARTICLE V
INDEMNITY
The Corporation shall indemnify its directors, officers and employees as
follows:
Every director, officer, or employee of the Corporation shall be indemnified
by the Corporation against all expenses and liabilities, including legal
fees, reasonably incurred by or imposed upon him/her in connection with any
proceeding to which he/she may be made a party, or in which he/she may become
involved, by reason of being or having been a director, officer, employee or
agent of the Corporation or is or was serving at the request of the
Corporation as a director, officer, employee or agent of the Corporation,
partnership, joint venture, trust or enterprise, or any settlement thereof,
whether or not he/she is a director, officer, employee or agent at the time
such expenses are incurred, except in such cases wherein the director,
officer, employee or agent is adjudged guilty of willful misfeasance or
malfeasance in the performance of his/her dutties; provided that in the event
of a settlement the indemnification herein shall apply only when the
<PAGE>
Board of Directors approves such settlement and reimbursement as being for
the best interests of the Corporation.
The Corporation shall provide to any person who is or was a director,
officer, employee or agent of the Corporation or is or was serving at the
request of the Corporation as a director, officer, employee or agent of the
corporation, partnership, joint venture, trust or enterprise, the indemnity
against expenses of a suit, litigation or other proceedings which is
specifically permissible under applicable law.
The Board of Directors may, in its discretion, direct the purchase of
liability insurance by way of implementing the provisions of this Article.
ARTICLE VI
CONTRACTS, LOANS, CHECKS AND DEPOSITS
SECTION 1. Contracts. The Board of Directors may authorize any officer or
officers, agent or agents, to enter into any contract or execute and deliver
any instrument in the name of and on behalf of the Corporation, and such
authority may be general or confined to specific instances.
SECTION 2. Loans. No loans shall be contracted on behalf of the Corporation
and no evidences of indebtedness shall be issued in its name unless
authorized by a resolution of the Board of Directors. Such authority may be
general or confined to specific instances,
SECTION 3. Checks, Drafts, etc. All checks drafts or other orders for the
payment of money, notes or other evidences of indebtedness issued in the name
of the Corporation, shall be signed by such officer or officers, agent or
agents of the Corporation and in such manner as shall from time to time be
determined by resolution of the Board of Directors.
<PAGE>
SECTION 4. Deposits. All funds of the Corporation not otherwise employed
shall be deposited from time to time to the credit of the Corporation in such
banks, trust companies or other depositories as the Board of Directors may
select.
ARTICLE VII
SHARES OF STOCK
SECTION 1. Certificates for Shares. Certificates representing shares of the
Corporation shall be in such a form as shall be determined by the Board of
Directors. Such certificates shall be signed by the President and by the
Secretary or by such other officers authorized by law and by the Board of
Directors to do so, and sealed with the corporate seal All certificates for
shares shall be consecutively numbered or otherwise identified. The name and
address of the person to whom the shares represented thereby are issued, with
the number of shares and date of issue, shall be entered on the stock
transfer books of the Corporation. All certificates surrendered to the
Corporation for transfer shall be canceled arid no new certificate shall be
issued until the former certificate for a like number of shares shall have
been surrendered and canceled, except that in the case of a lost, destroyed
or mutilated certificate, a new one may be issued therefor upon such terms
and indemnity to the Corporation as the Board of Directors may prescribe.
SECTION 2. Transfer of Shares. Transfer of shares of the Corporation shall be
made only on the stock transfer books of the Corporation by the holder of
record thereof or by his/her legal representative, who shall furnish proper
evidence: of authority to transfer, or by his/her attorney thereunto
authorized by power of attorney duly executed and filed with the Secretary of
the Corporation, and on surrender for cancellation of the certificate for
such shares. The person in
<PAGE>
whose name shares stand on the books of the Corporation shall be deemed by
the Corporation to be the owner thereof for all purposes. Provided, however,
that upon any action undertaken by the shareholders to elect S Corporation
status pursuant to Section 1362 of the Internal Revenue Code and upon any
shareholders' agreement thereto restricting the transfer of said shares so as
to disqualify said S Corporation status, said restriction on transfer shall
be made a part of the Bylaws so long as said agreement is in force arid
effect.
ARTICLE VIII
FISCAL YEAR
The fiscal year of the Corporation shall begin on the first day of January
and end on the thirty-first day of December of each year.
ARTICLE IX
DIVIDENDS
The Board of Directors may from time to time declare, and the corporation may
pay, dividends on its outstanding shares in the manner and upon the terms and
conditions provided by law and its Articles of Incorporation.
ARTICLE X
CORPORATE SEAL
The Board of Directors shall provide a corporate seal, which shall be
circular in form and shall have inscribed thereon the name of the Corporation
and the state of incorporation and the words "Corporate Seal".
ARTICLE XI
WAIVER OF NOTICE
<PAGE>
Unless otherwise provided by law, whenever any notice is required to be given
to any shareholder or director of the Corporation under the provisions of
these Bylaws or under the provisions of the Articles of Incorporation or
under the provisions of the applicable Business Corporation Act, a waiver
thereof in writing, signed by the person or persons entitled to such notice,
whether before or after the time stated therein, shall be deemed equivalent
to the giving of such notice.
ARTICLE XI
AMENDMENTS
These Bylaws may be altered, amended or repealed and new Bylaws may be
adopted by the Board of Directors at any regular or special meeting of the
Board of Directors.
The above Bylaws are certified to have been adopted by the Board of Directors
of the Corporation on the 8 day of Septmber, 1999.
AGREEMENT AND PLAN OF MERGER
This Agreement and Plan of Merger (the "Plan and Merger Agreement"), is
made as of August 31, 1999 by and between Capitol Silver Mines, Inc., an Idaho
corporation ("Capitol") and Internet Culinary Corporation, a Nevada corporation
("Internet").
RECITALS
A) Capitol is a corporation duly organized and existing under the laws of
the State of Idaho.
B) Internet is a corporation duly organized and existing under the laws
of the State of Nevada. One share of common stock of Internet has been issued
and that share of common stock is held by Capitol. Thus Internet is a wholly-
owned subsidiary of Capitol. No shareholder approval of this Plan and Merger
Agreement is required.
C) Capitol and Internet (the "Constituent Corporations") have approved
this Plan and Merger Agreement by resolutions duly adopted by their respective
Boards of Directors in accordance with the laws of their respective
jurisdictions of incorporation; and
D) The constituent Corporations desire to adopt a plan of reorganization
pursuant to the provisions of Section 368 (a) (1) (f) of The Internal Revenue
Code of l986, as amended, a Plan of Merger complying with section 30-1-1105 of
the Idaho Code and
NOW THEREFORE, in consideration of the mutual covenants and agreements
contained herein, the parties hereto agree as follows:
1) Surviving Corporation. Capitol shall be merged with and into Internet
(the "Merger") with Internet being the surviving corporation (the "Surviving
Corporation") of the Merger. At the Effective Time (as hereinafter defined),
the corporate existence of Capitol shall cease and the Surviving corporation,
to the fullest extent permitted by applicable law, shall succeed to all the
business, properties, assets and liabilities of the Constituent Corporations.
At the Effective Time, the name of the Surviving Corporation shall remain
Internet Culinary Corporation.
2) Authorized Shares. The authorized capital stock of the Surviving
Corporation consists of 20,000,00 shares of Common Stock, par value .001 per
share, and 5,000,000 shares of Preferred Stock, par value .001 per share.
Page 1 of 4
<PAGE>
3) Certificate of Incorporation and Bylaws.
a) The Certificate of Incorporation of Internet as in effect at the
Effective Time shall be the Certificate of Incorporation of the Surviving
Corporation.
b) The Bylaws of Internet as in effect at the Effective Time shall
be the Bylaws of the Surviving Corporation.
4) Directors and Officers.
a) The directors of Capitol immediately prior to the Effective Time
shall be the directors of the Surviving Corporation, to hold office in
accordance with the Bylaws of the Surviving Corporation until their successors
are duly appointed or elected and qualified.
b) The officers of Capitol immediately prior to the Effective Time
shall be the officers of the Surviving Corporation to hold office in accordance
with the Bylaws of the Surviving Corporation until their successors are duly
appointed or elected and qualified.
5) Principal Office. The principal office of the Surviving Corporation
in the State of Nevada shall be at 3450 E Russell Rd., Las Vegas, Nevada
89120.
6) Consent to Service of Process. The Surviving Corporation hereby
consents to be sued and served with process in the State of Idaho in any
proceeding in the State of Idaho and the Surviving Corporation hereby
irrevocably appoints the Secretary of state of Idaho as its agent to accept
service of process in such proceeding in the State of Idaho to enforce against
the Constituent Corporations any obligations of Capitol and the rights of
dissenting shareholders of Capitol.
7) Corporate Purpose. The purposes for which the Surviving Corporation
has been formed are to engage in any lawful act or activity for which
corporations may be formed under the laws of the State of Nevada.
8) Term of Merger.
a) At the Effective Time, each issued and outstanding share of
Common Stock of Capitol shall, automatically and without further act of either
of the Constituent Corporations or of the holders thereof, be extinguished and
converted into one issued and outstanding share of Common Stock of the
Surviving Corporation. The holder of each share so extinguished and converted
(of record on the shareholder records of Capitol at the Effective Time) shall
be recorded on the books of the Surviving Corporation as the holder of the
number of shares of Common Stock of the Surviving Corporation which
Page 2 of 4
<PAGE>
such holder is entitled to receive; and each certificate theretofore
representing one or more shares of Common Stock of Capitol shall be deemed, for
all corporate purposes, to evidence ownership of the same number of shares of
Common Stock of the Surviving Corporation which the holder of such certificate
is entitled to receive.
b) Each person who, as a result of the Merger, holds one or more
certificates which theretofore represented one or more shares of Common stock
of Capitol shall surrender any such certificates to the Surviving Corporation
(or to any agent designated for such purpose by the Surviving Corporation) and
upon such surrender, the Surviving Corporation shall, within a reasonable
time, deliver to such person in substitution and exchange therefor (i) one or
more certificates evidencing the number of shares of Common Stock of the
Surviving Corporation which such person is entitled to receive in accordance
with the terms of this Plan and Merger Agreement in substitution for the number
of shares of Common Stock of Capitol theretofore represented by each
certificate so surrendered; provided however, that such holders shall not be
required to surrender any such certificates until such certificates would
normally be surrendered for transfer on the books of the issuing corporation in
the ordinary course of business.
c) At and after the Effective time, all of the issued and
outstanding shares of Common Stock of Capitol held immediately prior to the
Effective Time shall be cancelled and cease to exist, without any consideration
being payable therefor.
d) At the Effective Time, each option to purchase shares of Common
Stock of the Company outstanding immediately prior to the Effective Time shall
become an option to purchase shares of Common Stock of the Surviving
Corporation, subject to the same terms and conditions and at the same option
price applicable to each such option immediately prior to the Effective Time.
9) Termination and Abandonment. At any time prior to the Effective Time
and for any reason, this Plan and Merger Agreement may be terminated and
abandoned by the Board of Directors of either of the Constituent Corporations,
without notice of such action to the other Constituent Corporation,
notwithstanding approval of this Plan and Merger Agreement by the shareholders
of one or both of the Constituent Corporations.
10) Amendment. At any time prior to the Effective Time, this Plan and
Merger Agreement may be amended, by an agreement in writing executed in the
same manner as this Plan and Merger Agreement, after due authorization of such
action by the Board of Directors of the Constituent Corporations; provided,
however, that this Plan and Merger Agreement may not be amended if such
amendment would (a) alter or change the amount or kind of shares or other
consideration to be received by the shareholders of either of the Constituent
Corporations in the Merger, (b) alter or change any term of the Certificate of
Incorporation of the corporation which will be the Surviving Corporation, (c)
alter or change any of the terms and conditions of this Plan and Merger
Agreement if such alteration or change would adversely affect the shareholders
of either at the Constituent Corporations, or (d) otherwise violate applicable
law.
Page 3 of 4
<PAGE>
11) Effective Time of Merger. The Effective Time of Merger shall be the
later of the date on which the (i) Certificate of Ownership and Merger shall
have been duly filed in the office of the Secretary or State of Nevada, and
(ii) this Plan and Agreement of Merger shall have been duly filed in the office
of the Secretary of State of Idaho (the Effective Time").
CAPITOL SILVER MINES, INC.
By: /s/ Tom Reichman
--------------------------
Tom Reichman, President
By: /s/ Stephen Reeder
--------------------------
Stephen Reeder, Secretary
INTERNET CULINARY CORPORATION
By: /s/ Tom Reichman
--------------------------
Tom Reichman, President
By: /s/ Stephen Reeder
--------------------------
Stephen Reeder, Secretary
August 3, 1999
Mr. Tomas Reichman
Capitol Silver Mines
410 Broadway, Suite 204
Laguna Beach, Ca 92651
Dear Mr. Reichman:
Please be advised that our firm will not perform the audit on Internet
Culinary Corporation. we recently lost a key member of our accounting staff
and presently not adequately staffed to perform an audit of your company (to
SEC standards) in a timely fashion. We are interviewing staff and should
expect to be available to you in the future should your company need our
accounting services.
If you have any further questions regarding the above, please do not hesitate
to contract me.
Sincerely,
/s/ John P Semmens
- ------------------
John P Semmens CPA
