U. S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM SB-2
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Food And Beverage Masters (Kazakstan), Inc.,
(Exact name of registrant as specified in its charter)
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Delaware 5149 ---------
(State or other jurisdiction (Primary Standard Industrial (I.R.S. Employer
of incorporation or organization) Classification Code Number) Identification No.)
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13144 Lake Arrow Road S.E., Calgary, Alberta T2J 3H2
(Address of registrant's principal executive offices) (Zip Code)
403.278.8627
(Registrant's Telephone Number, Including Area Code)
Thomas E. Stepp, Jr.
Stepp & Beauchamp LLP
1301 Dove Street, Suite 460
Newport Beach, California 92660
949.660.9700
Facsimile 949.660.9010
(Name, Address and Telephone Number of Agent for Service)
Approximate date of proposed sale to the public: From time to time after this
Registration Statement becomes effective.
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ] _______
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ] _______
If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ] _______
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
CALCULATION OF REGISTRATION FEE
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Title of each class Amount Proposed maximum Proposed maximum Amount of
of securities to be offering price aggregate registration
to be registered registered per share offering price fee
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Common Stock, $.001 par value 4,000,000 $0.25 $1,000,000.00 $264.00
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The price per share for the selling security holders was estimated solely for
the purpose of calculating the registration fee pursuant to Rule 457 of
Regulation C.
The Registrant hereby amends this registration statement on such date or dates
as may be necessary to delay its effective date until the Registrant shall file
a further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933, as amended, or until this Registration Statement shall
become effective on such date as the Commission, acting pursuant to said Section
8(a), may determine.
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Preliminary Prospectus
Food And Beverage Masters (Kazakstan), Inc.,
a Delaware corporation
4,000,000 Shares of Common Stock
This prospectus relates to 4,000,000 shares of common stock of Food And Beverage
Masters (Kazakstan), Inc., a Delaware corporation, which are issued and
outstanding shares of our common stock, acquired by the selling security holders
in private placement transactions which were exempt from the registration and
prospectus delivery requirements of the Securities Act of 1933. No national
securities exchange or the Nasdaq Stock Market lists the common stock being
offered by the selling security holders, and we have not applied for listing or
quotation with any national securities exchange or automated quotation system.
The shares of common stock offered by the selling security holders have not been
registered for sale under the securities laws of any state as of the date of
this prospectus. Brokers or dealers effecting transactions in the shares of our
common stock should confirm the registration thereof under the securities laws
of the states in which transactions occur or the existence of any exemption from
registration.
See "Risk Factors" on Pages 4 to 8 for factors to be considered before investing
in the shares of our common stock.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or passed upon the
adequacy or accuracy of the prospectus. Any representation to the contrary is a
criminal offense.
The information in this prospectus is not complete and may be changed. The
selling security holders may not sell these securities until the registration
statement filed with the Securities and Exchange Commission is effective. This
prospectus is not an offer to sell these securities and it is not soliciting an
offer to buy these securities in any state where the offer or sale is not
permitted.
The date of this prospectus is August 24, 2000.
Subject to completion.
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TABLE OF CONTENTS
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Prospectus Summary ..............................................................................4
Risk Factors.....................................................................................4
Use of Proceeds..................................................................................8
Determination of Offering Price..................................................................8
Dilution.........................................................................................8
Selling Security Holder..........................................................................8
Plan of Distribution............................................................................ 9
Legal Proceedings...............................................................................10
Directors, Executive Officers, Promoters and Control Persons....................................10
Security Ownership of Certain Beneficial Owners and Management..................................11
Description of Securities.......................................................................12
Interest of Named Experts and Counsel...........................................................12
Disclosure of Commission Position on Indemnification for Securities Act Liabilities.............12
Organization Within Last Five Years.............................................................12
Description of Business.........................................................................12
Management' Discussion and Analysis of Financial Condition and Results of Operations............15
Description of Property.........................................................................15
Certain Relationships and Related Transactions..................................................15
Market for Common Equity and Related Stockholder Matters........................................16
Executive Compensation - Remuneration of Directors and Officers.................................17
Financial Statements............................................................................17
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure............17
Legal Matters...................................................................................17
Experts.........................................................................................18
Additional Information..........................................................................18
Indemnification of Directors and Officers.......................................................18
Other Expenses of Issuance and Distribution.....................................................18
Recent Sales of Unregistered Securities.........................................................19
Exhibits........................................................................................19
Undertakings....................................................................................20
Signatures ..................................................................................21
Power of Attorney...............................................................................22
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Outside Back Cover Page
Dealer Prospectus Delivery Obligation
Until _______, all dealers that effect transactions in these securities, whether
or not participating in this offering, may be required to deliver a prospectus.
This is in addition to the dealers' obligations to deliver a prospectus when
acting as underwriters and with respect to their unsold allotments or
subscriptions.
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Prospectus Summary
Our Business: Our principal business address is 13144 Lake Arrow
Road S.E., Calgary, Alberta Canada; our telephone
number is 403.278.8627.
We are a development stage company and we intend
to be a fully integrated processor of high quality
Canadian edible canola oil, packaged in
polyethylene terephthalate, or "PET", bottles
manufactured on site for distribution into the
domestic markets of Kazakstan. Canola oil is
regarded as the healthiest of all currently
manufactured vegetable oils. Since declaring
independence in 1991, Kazakstan has been the most
politically stable of the former states of the
Soviet Union. The current government has been
committed to developing a market economy and has
attracted $46 billion in foreign investment since
its independence, or $9.5 billion more than
Russia. Our market analysis reflects the Kazakstan
uses approximately 116 million liters of vegetable
oil each year, with the bulk of this oil imported
from various countries. The present oil used is
mostly sunflower oil and with a low-cost cotton
base. We anticipate distributing our products
through a joint venture with a company located in
Kazakstan. We also anticipate processing
additional products from vegetable oils, such as
margarine and shortening, primarily for the
Kazakstan domestic market but also for export.
Our State of Organization: We were incorporated in Delaware on July 18, 1997.
Number of Shares Being All of the shares being offered pursuant to this
Offered: Registration Statement on Form SB-2 are issued and
outstanding shares of common stock, acquired by
the selling security holders in private placement
transactions which were exempt from the
registration and prospectus delivery requirements
of the Securities Act of 1933.
Number of Shares 4,000,000 shares of our common stock are issued
Outstanding After the and outstanding. We have no other securities
Offering: issued.
Estimated use of proceeds: We will not receive any of the proceeds from the
sale of those shares being offered.
RISK FACTORS
In addition to the other information in this prospectus, the following risk
factors should be considered carefully in evaluating our business before
purchasing any of our shares of common stock. A purchase of our common stock is
speculative and involves a lot of risks. No purchase of our common stock should
be made by any person who is not in a position to lose the entire amount of his
investment.
Information in this prospectus contains "forward looking statements" which can
be identified by the use of forward-looking words such as "believes",
"estimates", "could", "possibly", "probably", "anticipates", "estimates",
"projects", "expects", "may", "will", or "should" or other variations thereon or
similar words. No assurances can be given that the future results anticipated by
the forward looking statements will be achieved. The following matters
constitute cautionary statements identifying important factors with respect to
those forward-looking statements, including certain risks and uncertainties,
that could cause actual results to vary materially from the future results
anticipated by those forward-looking statements. Among the key factors that have
a direct bearing on our results of operations are the effects of various
governmental regulations, the fluctuation of our direct costs and the costs and
effectiveness of our operating strategy. Other factors could also cause actual
results to vary materially from the future results anticipated by those
forward-looking statements.
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We have a limited operating history with losses since our formation and we
anticipate that we will lose money in the foreseeable future.
We were incorporated in July 1997, and we have a limited operating history. As
of June 30, 2000, our losses since inception were approximately $18,399. We have
not yet generated any revenues and we do not anticipate generating revenues in
our current fiscal year. Our prospects must be considered speculative,
considering the risks, expenses, and difficulties frequently encountered in the
establishment of a new business, specifically the risks inherent in the
distribution of food and beverage products in foreign markets. We can not
guaranty that unanticipated technical or other problems will not occur which
would result in material delays in future product and service commercialization
or that our efforts will result in successful product and service
commercialization. We can not guaranty that we will be able to achieve
profitable operations.
We may have difficulty distributing our products because Kazakstan has poor
distribution systems and transportation infrastructure.
Kazakstan's product distribution system is a complicated system of state and
private distributors, many lacking marketing experience or expertise. Foreign
firms are prohibited from establishing distribution and marketing networks,
which are reserved for Kazakstan citizens and state-run businesses. Foreign
firms' involvement in distribution networks are limited to goods that are
manufactured domestically. The infrastructure of Kazakstan is generally in a
state of disrepair. Distribution of products is complicated by poor roadways,
rail lines, and ports. State owned and operated power plants and
telecommunications systems are often inoperable or inefficient, which may impede
the orderly operation of our business in Kazakstan.
The Kazakstanian government, its taxation system and its general economic
conditions may significantly affect our ability to succeed.
Kazakstan is currently a Socialist Republic, and we could be affected by
differences in ideology. Bureaucratic delays, abrupt policy changes, and a
different legal system may present significant impediments to the operation of
our business. If the present regime changes, the current favorable attitude
toward foreign investment may also change, resulting in increased costs of
operation or even nationalization of our assets domiciled in Kazakstan.
Kazakstan's current taxation system is complex and may subject us to
unforeseeable tax liabilities. Inconsistent interpretation of the existing tax
laws, or the imposition of new taxes or tax laws, could have a material adverse
effect on the operation of our business.
A specific risk of doing business in Kazakstan occurs because the current
economic conditions in Kazakstan are difficult. Although the government is
currently undertaking reforms to restructure the economy through privatization
of state enterprises, the government's attempts to stabilize monetary policy may
not succeed, resulting in continued inflation and currency devaluation. These
general economic trends could have a material adverse effect upon our
operations.
Our ability to succeed will depend on whether we can adapt to Kazakstan's legal
and accounting systems and its cash-based economy.
Kazakstan's civil law and enforcement thereof are considerably different that
the laws codifying such rights and obligations of contract law and intellectual
property that are generally taken for granted in industrialized nations.
Financial statements are unreliable because of a resistance, or unfamiliarity,
to international accounting standards. Credit reports and other analytical
financial information are difficult to obtain from state-run businesses and may
be undependable for domestic operations. Many businesses are reluctant to
provide financial information or references. Levels of domestic savings are low
and hoarding of gold and hard currency is prevalent in Kazakstan. Purchases are
generally made on cash, as opposed to credit, and bartering and unrecorded
compensation of employees is generally accepted as the normal course of
business. This practice makes generally accepted business controls difficult to
implement at the business level and may fuel inflation. These general trends may
have a significant material adverse affect on the operation of our business.
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Our ability to succeed is dependent on market acceptance of our products.
There can be no assurance that our products will achieve a significant degree of
market acceptance, and that acceptance, if achieved, will be sustained for any
significant period or that product life cycles will be sufficient (or substitute
products developed) to permit us to recover start-up and other associated costs.
Failure of our products to achieve or sustain market acceptance could have a
material adverse effect on our business, financial conditions, and results of
operations.
We may not complete our development because we lack commercial manufacturing and
marketing experience.
We have not yet produced our products. No assurance can be given that we will be
able to make the transition from the design stage to commercial mass-production.
While we believe we will be able to produce our products on a scale commensurate
with market demands for our products, we have not yet demonstrated the
capability to produce our products in significant commercial quantities. There
can be no assurance that we will be able to establish sales, marketing and
distribution capabilities or make arrangements with collaborators, licensees or
others to perform such activities or that such efforts will be successful.
We may enter into arrangements with contract packaging and distribution
companies to expand our production capacities in order to satisfy requirements
for our products, or to attempt to improve production efficiency. If we choose
to contract for packaging and distribution services and encounters delays or
difficulties in establishing relationships with packagers and distribution
companies to package and distribute our finished products, market introduction
and subsequent sales of such products would be adversely affected.
We operate in a highly competitive market and we may not have adequate resources
to market our products in order to compete successfully.
Competition in the food and beverage products industry is intense. We compete
directly with other companies and businesses that have developed and are in the
process of developing technologies and products which will be competitive with
our products. There can be no assurance that other technologies or products
which are functionally equivalent or similar to our technologies and products
have not been developed or are not in development. We expect that companies or
businesses which may have developed or are developing such technologies and
products as well as other companies and businesses which have the expertise
which would encourage them to develop and market products directly competitive
with those developed and marketed by us. Many of these competitors have greater
financial and other resources, and more experience in research and development,
than us.
There can be no assurance that competitors have not or will not succeed in
developing technologies and products that are more effective than any which have
been or are being developed by us or which would render our products obsolete
and noncompetitive. Most of our competitors have substantially greater
experience, financial and technical resources and production, marketing and
development capabilities than we do. If we begin commercial sales of our
products, we will also be competing with respect to manufacturing efficiency and
sales and marketing capabilities. To the extent that customers exhibit loyalty
to the supplier that first supplies them with a particular service or
technology, our competitors may have an advantage over us with respect to
services and technologies first developed by such competitors. As a result of
their size and breadth of their service offerings, certain of these competitors
have been and will be able to establish managed accounts by which they seek to
gain a disproportionate share of users for their services and technologies. Such
managed accounts present significant competitive barriers to us. There can be no
assurance that competitors have not or will not succeed in developing
technologies and services that are more effective than any which have been or
are being developed by us or which would render our products obsolete and
noncompetitive.
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Our ability to succeed is uncertain because we currently have no sources of
revenue and minimal marketing activities due to the lack of capital.
We are currently engaged primarily in marketing the food and beverage products
developed and manufactured by third parties. In order to fund our marketing
activities, we anticipate that we will be required to raise additional funds. We
have not yet generated any revenues and we do not anticipate generating revenues
in our current fiscal year.
Our officers and directors are engaged in other activities that could have
conflicts of interest with us.
The persons serving as our officers and directors have existing responsibilities
and may have additional responsibilities to provide management and services to
other entities. As a result, conflicts of interest between us and the other
activities of those entities may occur from time to time, in that our officers
and directors shall have conflicts of interest in allocating time, services, and
functions between the other business ventures in which they may be or become
involved and our affairs. Wayne Johnson currently serves as President and a
director of Ethan Equities, Inc., an Alberta corporation. Arne Carlson currently
serves as the Vice President of Bluewater Capital Management.
Our officers, directors and principal security holders own approximately 57.25%
of our outstanding shares of common stock.
Our directors, officers and principal (greater than 5%) security holders, taken
as a group, together with their affiliates, beneficially own, in the aggregate,
approximately 57.25% of our outstanding shares of common stock. Certain
principal security holders are our directors or executive officers. As a result
of such ownership, these security holders may be able to exert significant
influence, or even control, matters requiring approval by our security holders,
including the election of directors. In addition, certain provisions of Delaware
law could have the effect of making it more difficult or more expensive for a
third party to acquire, or of discouraging a third party from attempting to
acquire, control of us.
We anticipate that we will need to raise additional capital to market and
distribute our products and complete our development.
To complete development of our products and services, we anticipate that we may
be required to raise additional funds. We believe that we may be able to acquire
additional financing at commercially reasonable rates. There can be no assurance
that we will be able to obtain additional financing at commercially reasonable
rates. We anticipate that we will spend a lot of funds on the marketing and
promotion of our products and services. Our failure to obtain additional funds
would significantly limit or eliminate our ability to fund our sales and
marketing activities. This would have a material adverse effect on our ability
to continue our operation and compete with other providers.
We anticipate that we may seek additional funding through public or private
sales of our securities. That could include equity securities, or through
commercial or private financing arrangements. Adequate funds may not be
available when needed or on terms acceptable to us. In the event that we are not
able to obtain additional funding on a timely basis, we may be required to limit
any proposed operations or eliminate certain or all of our marketing programs or
to license third parties to commercialize products or technologies that we would
otherwise seek to develop, manufacture or market ourselves, any of which could
have a material adverse effect on our results of operations.
We lack a public market for shares of our common stock, which may make it
difficult for investors to sell their shares.
There is no public market for shares of our common stock. We can not guaranty
that an active public market will develop or be sustained. Therefore, investors
may not be able to find purchasers for their shares of our common stock. Should
there develop a significant market for our shares, the market price for those
shares may be significantly affected by such factors as our financial results
and introduction of new products and services. Factors such as announcements of
new or enhanced products by us or our competitors and quarter-to-quarter
variations in our results of operations, as well as market conditions in the
high technology sector may have a significant impact on the market price of our
shares. Further, the stock market has experienced extreme volatility that has
particularly affected the market prices of stock of
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many companies and that often has been unrelated or disproportionate to the
operating performance of those companies.
Use of Proceeds
We will not receive any proceeds from the sale of shares of our common stock
being offered by the selling security holders.
Determination of Offering Price
Factors Used to Determine Share Price. The offering price of the shares being
offered by the selling security holders has no relationship to any established
criteria of value, such as book value or earnings per share. Additionally,
because we have no significant operating history and have not generated any
revenues to date, the price of our common stock is not based on past earnings,
nor is the price of the shares of our common stock indicative of current market
value for the assets owned by us. No valuation or appraisal has been prepared
for our business and potential business expansion.
Dilution
The shares offered for sale by the selling security holders are already
outstanding and, therefore, do not contribute to dilution.
Selling Security Holders
The following table sets forth the number of shares which may be offered for
sale from time to time by the selling security holders. The shares offered for
sale constitute all of the shares known to us to be beneficially owned by the
selling security holders. None of the selling security holders has held any
position or office with us, except as specified in the following table. Other
than the relationships described below, none of the selling security holders had
or have any material relationship with us.
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Name of Selling Security Holder Shares of Common Stock
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Wayne Johnson, President, Treasurer and a Director 360,000
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Ethan Equities, Inc., an Alberta corporation (1) 375,000
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Shannon Johnson(2) 320,000
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Phyllis Johnson 300,000
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Stan Johnson 20,000
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Advantage Investments Ltd. 55,000
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Mary Brownson 10,000
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Dennis Cressman 10,000
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Eurowest Financial Corporation 10,000
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Mark Franklin 365,000
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Paula Franklin 320,000
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Murray Hnatyshyn 365,000
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Tamara Hnatyshyn 320,000
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Murray Jackson 10,000
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Agnes Lee 10,000
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Daniel Lee 10,000
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Dennis Lee 10,000
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James Lee 10,000
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Joseph Lee 10,000
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Patrick Lee 10,000
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Richard Lee 10,000
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Robert Lee 10,000
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Ron Livingston 100,000
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Bruce Livinston 10,000
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L K B Capital Corp 200,000
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Beverly Mackenzie 360,000
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Shawn Rooney 20,000
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Madelyn Scannlon 10,000
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Sharron Scherger 360,000
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Valorie Tinney 10,000
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Michel Tremblay 10,000
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(1) The officers and directors of Ethan Equities, Inc., an Alberta corporation,
are Wayne Johnson and Shannon Johnson.
(2) Shannon Johnson is the spouse of Wayne Johnson, the President, Secretary,
Treasurer and a director of the company.
Plan of Distribution
The selling security holders may sell our common stock in the over-the-counter
market, or on any securities exchange on which our common stock is or becomes
listed or traded, in negotiated transactions or otherwise. The selling security
holders may sell our common stock at prices then prevailing or related to the
then current market price or at negotiated prices.
The shares may be sold directly or through brokers or dealers. The methods by
which the shares may be sold include:
o purchases by a broker or dealer as principal and resale by such broker
or dealer for its account;
o ordinary brokerage transactions and transactions in which the broker
solicits purchasers; and
o privately negotiated transactions.
Brokers and dealers engaged by selling security holders may arrange for other
brokers or dealers to participate. Brokers or dealers may receive commissions or
discounts from selling security holders (or, if any such broker-dealer acts as
agent for the purchaser of such shares, from such purchaser) in amounts to be
negotiated. Broker-dealers may agree with the selling security holders to sell a
specified number of such shares at a stipulated price per share, and, to the
extent such broker-dealer is unable to do so acting as agent for a selling
security holder, to purchase as principal any unsold shares at the price
required to fulfill the broker-dealer commitment to such selling security
holder. Broker-dealers who acquire shares as principal may resell those shares
from time to time in the over-the-counter market or otherwise at prices and on
terms then prevailing or then related to the then-current market price or in
negotiated transactions and, in connection with such resales, may receive or pay
commissions.
The selling security holders and any broker-dealers participating in the
distributions of the shares may be deemed to be "underwriters" within the
meaning of Section 2(11) of the Securities Act of 1933. Any profit on the sale
of shares by the selling security holders and any commissions or discounts given
to any such broker-dealer may be deemed to be underwriting commissions or
discounts. The shares may also be sold pursuant to Rule 144 under the Securities
Act of 1933 beginning one year after the shares were issued.
We have filed the Registration Statement, of which this prospectus forms a part,
with respect to the sale of shares of our common stock owned by the selling
security holders. We will pay all of the expenses incident to the offering and
sale of the shares of our $.001 par value common stock, other than commissions,
discounts and fees of underwriters, dealers or agents.
Under the Securities Exchange Act of 1934 and the regulations thereunder, any
person engaged in a distribution of the shares of our $.001 par value common
stock offered by this prospectus may not simultaneously engage in market making
activities with respect to our common stock during the applicable "cooling off"
periods prior to the commencement of such distribution. Also, the selling
security holders are subject to applicable provisions which limit the timing of
purchases and sales of our common stock by the selling security holders.
We have informed the selling security holders that, during such time as they may
be engaged in a distribution of any of the shares we are registering by this
Registration Statement, they are required to comply with Regulation M. In
general, Regulation M precludes any selling security holder, any affiliated
purchasers and any broker-dealer or other person who
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participates in a distribution from bidding for or purchasing, or attempting to
induce any person to bid for or purchase, any security which is the subject of
the distribution until the entire distribution is complete. Regulation M defines
a "distribution" as an offering of securities that is distinguished from
ordinary trading activities by the magnitude of the offering and the presence of
special selling efforts and selling methods. Regulation M also defines a
"distribution participant" as an underwriter, prospective underwriter, broker,
dealer, or other person who has agreed to participate or who is participating in
a distribution.
Regulation M prohibits any bids or purchases made in order to stabilize the
price of a security in connection with the distribution of that security, except
as specifically permitted by Rule 104 of Regulation M. These stabilizing
transactions may cause the price of our common stock to be more than it would
otherwise be in the absence of these transactions. We have informed the selling
security holders that stabilizing transactions permitted by Regulation M allow
bids to purchase our common stock if the stabilizing bids do not exceed a
specified maximum. Regulation M specifically prohibits stabilizing that is the
result of fraudulent, manipulative, or deceptive practices. Selling security
holders and distribution participants are required to consult with their own
legal counsel to ensure compliance with Regulation M.
Legal Proceedings
There are no legal actions pending against us nor are any such legal actions
contemplated by us at this time.
Directors, Executive Officers, Promoters and Control Persons
Executive Officers and Directors. We are dependent on the efforts and abilities
of certain of our senior management. The interruption of the services of key
management could have a material adverse effect on our operations, profits and
future development, if suitable replacements are not promptly obtained. We
anticipate that we will enter into employment agreements with each of our key
executives. We can not guaranty that each executive will remain with us during
or after the term of his or her employment agreement. In addition, our success
depends, in part, upon our ability to attract and retain other talented
personnel. Although we believe that our relations with our personnel are good
and that we will continue to be successful in attracting and retaining qualified
personnel, we can not guaranty that we will be able to continue to do so. Our
officers and directors will hold office until their resignations or removal.
Our directors and principal executive officers are as specified on the following
table:
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Name Age Position
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Wayne Johnson 57 President, Secretary, Treasurer and a Director
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Arne Carlson 33 Secretary and a Director
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Wayne Johnson. Mr. Johnson is our President, Treasurer and a director since our
inception. Mr. Johnson has extensive experience in the food and beverage
industry. From 1960 to 1972, Mr. Johnson was the executive account manager for
Dominion Glass Co. Ltd, an Alberta corporation. From 1972 to 1985, Mr. Johnson
was the President of Mr. Soft Draink Ltd, an Alberta corporation. From 1985 to
1987, Mr. Johnson was the President of Sun Mountain Beverages Ltd. an Alberta
corporation. From 1987 to 1990, Mr. Johnson was the President of Cott Beverages
(West) Ltd. an Alberta corporation. From 1990 to 1997, Mr. Johnson was the
President of Viviant Group, Inc., an Alberta corporation. From 1997 to 1999, Mr.
Johnson was the President of International Construction Technologies, Inc. an
Alberta corporation. Mr. Johnson is currently the President of UsTech Building
Systems, Inc. and Ethan Equities, Inc. Mr. Johnson has not been a director of
any other reporting company.
Arne Carlson. Mr. Carlson is the Secretary and a director of the company since
June 2000. Prior to joining the company, Mr. Carlson has been the Vice President
of Bluewater Capital Management since 1995 and has been responsible for
overseeing the development and management of e-commerce and conventional
investment strategies. Mr. Carlson has over fifteen years of experience in
marketing and business management, working extensively with private and public
companies. Mr. Carlson has also played a direct role in raising capital for
private and public companies. From 1991 to 1993, Mr. Carlson was a director of
Rich Coast Environmental Services, Inc, a Delaware corporation and a reporting
company.
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There is no family relationship between any of our officers or directors. There
are no orders, judgments, or decrees of any governmental agency or
administrator, or of any court of competent jurisdiction, revoking or suspending
for cause any license, permit or other authority to engage in the securities
business or in the sale of a particular security or temporarily or permanently
restraining any of our officers or directors from engaging in or continuing any
conduct, practice or employment in connection with the purchase or sale of
securities, or convicting such person of any felony or misdemeanor involving a
security, or any aspect of the securities business or of theft or of any felony.
Nor are any of the officers or directors of any corporation or entity affiliated
with us so enjoined.
Security Ownership of Certain Beneficial Owners and Management
The following table sets forth certain information regarding the beneficial
ownership of our common stock as of August 24, 2000 by each person or entity
known by us to be the beneficial owner of more than 5% of the outstanding shares
of common stock, each of our directors and named executive officers, and all of
our directors and executive officers as a group.
<TABLE>
<CAPTION>
Title of Class Name and Address of Amount and Nature of Percent of Class
Beneficial Owner Beneficial Owner
--------------- ----------------------- --------------------------------- -----------------
<S> <C> <C> <C>
$.001 Par Value Mark Franklin(1) 685,000 shares, Shareholder 17.13%
Common Stock
$.001 Par Value Murray Hnatyshyn(2) 685,000 shares, Shareholder 17.13%
Common Stock
$.001 Par Value L K B Capital Corp., an 200,000 shares, Shareholder 5.0%
Common Stock Alberta corporation,
$.001 Par Value Beverly Mackenzie 360,000 shares, Shareholder 9.0%
Common Stock
$.001 Par Value Sharron Scherger 360,000 shares, Shareholder 9.0%
Common Stock
$.001 Par Value Wayne Johnson 955,000 shares(3) (4), President, 23.88%
Common Stock Secretary, Treasurer and a
director
$.001 Par Value All directors and named executive 23.88%
Common Stock officers as a group
</TABLE>
(1) Mark Franklin beneficially owns 320,000 shares held by his spouse Paula
Franklin.
(2) Murray Hnatyshyn beneficially owns 320,000 shares held by his spouse Tamara
Hnatyshyn.
(3) Wayne Johnson beneficially owns 375,000 shares held by Ethan Equities,
Inc., an Alberta corporation.
(4) Wayne Johnson beneficially owns 320,000 shares held by his spouse Shannon
Johnson.
Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission and generally includes voting or investment
power with respect to securities. In accordance with Securities and Exchange
Commission rules, shares of our common stock which may be acquired upon exercise
of stock options or warrants which are currently exercisable or which become
exercisable within 60 days of the date of the table are deemed beneficially
owned by the optionees. Subject to community property laws, where applicable,
the persons or entities named in the table above have sole voting and investment
power with respect to all shares of our common stock indicated as beneficially
owned by them.
11
<PAGE>
Changes in Control. Our management is not aware of any arrangements which may
result in "changes in control" as that term is defined by the provisions of Item
403(c) of Regulation S-B.
Description of Securities
We are authorized to issue 50,000,000 shares of $.001 par value common stock.
Each share of common stock has equal rights and preferences, including voting
privileges. We are authorized to issue 5,000,000 shares of $.001 par value
preferred stock. As of August 24, 2000, 4,000,000 shares of our common stock
were issued and outstanding.
Our shares of $.001 par value common stock constitute equity interests in us any
entitling each shareholder to a pro rata share of cash distributions made to
shareholders, including dividend payments. The holders of our common stock are
entitled to one vote for each share of record on all matters to be voted on by
shareholders. There is no cumulative voting with respect to the election of our
directors or any other matter, Therefore, the holders of more than 50% of the
shares voted for the election of those directors can elect all of the directors.
The holders of our common stock are entitled to receive dividends when, as and
if declared by our Board of Directors from funds legally available therefor.
Cash dividends are at the sole discretion of our Board of Directors. In the
event of our liquidation, dissolution or winding up, the holders of common stock
are entitled to share ratably in all assets remaining available for distribution
to them after payment of our liabilities and after provision has been made for
each class of stock, if any, having any preference in relation to our common
stock. Holders of shares of our common stock have no conversion, preemptive or
other subscription rights, and there are no redemption provisions applicable to
our common stock.
Dividend Policy. We have never declared or paid a cash dividend on our capital
stock. We do not expect to pay cash dividends on our common stock in the
foreseeable future. We currently intend to retain our earnings, if any, for use
in our business. Any dividends declared in the future will be at the discretion
of our Board of Directors and subject to any restrictions that may be imposed by
our lenders.
Interest of Named Experts and Counsel.
No "expert", as that term is defined pursuant to Regulation Section 228.509(a)
of Regulation S-B, or our "counsel", as that term is defined pursuant to
Regulation Section 228.509(b) of Regulation S-B, was hired on a contingent
basis, or will receive a direct or indirect interest in us, or was a promoter,
underwriter, voting trustee, director, officer, or employee of the company, at
any time prior to the filing of this Registration Statement.
Disclosure of Commission Position on Indemnification for Securities Act
Liabilities
Insofar as indemnification for liabilities arising under the Securities Act of
1933 may be permitted to our directors, officers and controlling persons
pursuant to the foregoing provisions, or otherwise, we have been advised that in
the opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in that act and is, therefore, unenforceable.
Organization Within Last Five Years
Transactions with Promoters. Wayne Johnson was issued 360,000 shares of our
common stock in exchange for his services as our promoter.
Description of Business
Our Background. Food and Beverage Masters (Kazakstan), Inc. was incorporated in
Delaware on July 18, 1997.
Our Business. We are a development stage company and we intend to be a fully
integrated processor of high quality Canadian edible canola oil, packaged in
polyethylene terephthalate, or "PET", bottles manufactured on site for
distribution into the domestic markets of Kazakstan. Canola oil is regarded as
the healthiest of all currently
12
<PAGE>
manufactured vegetable oils. Since declaring independence in 1991, Kazakstan has
been the most politically stable of the former states of the Soviet Union. The
current government has been committed to developing a market economy and has
attracted $46 billion in foreign investment since its independence, or $9.5
billion more than Russia. Our market analysis reflects the Kazakstan uses
approximately 116 million liters of vegetable oil each year, with the bulk of
this oil imported from various countries. The present oil used is mostly
sunflower oil and with a low-cost cotton base. We anticipate distributing our
products through a joint venture with a company located in Kazakstan. We also
anticipate processing additional products from vegetable oils, such as margarine
and shortening, primarily for the Kazakstan domestic market but also for export.
We contemplate that we will enter into various joint ventures will provide us
access to utilize existing distribution networks to market our products. We
believe we will enter into joint venture agreements with a food and beverage
manufacturing and marketing company and a distribution company in Kazakstan. The
manufacturing and marketing company will provide the technical and managerial
expertise for the establishment of a plant in Kazakstan including the
acquisition and set-up of the equipment and technology, and the development of
technical, marketing, and operating plans for the joint venture.
Our Products. The products, which will be produced by us through the joint
venture, will consist of high quality vegetable oil-based consumer food
products. The joint venture will be producing a family of products beginning
with cooking oil and PET preforms (bottling components). Initially, we will
produce cooking oil in one-liter bottles, packaged and labeled with our brands
and logos. The products will be produced from refined canola crude oil imported
from Canada, and from other lower quality oils such as cottonseed, sunflower,
and rapeseed oils. The refining process is designed to produce high-quality
products directly from pure Canadian canola oil or in blends of oil maintaining
a minimum quantity of canola. In addition, flavored oils will be processed to
ensure product differentiation and provide added value and diversity to our
product line.
The PET preforms which are surplus to the needs of the joint venture will be
sold in the regional marketplace. We anticipate a surplus of between 15 and 20
million preforms annually when the plant is at full capacity. We anticipate
additional product development, including the production of value added
vegetable oil products such as margarine and shortening.
The refining process for vegetable oils is separated into three stages:
o the neutralization stage;
o the combined bleaching and filtration stage; and
o the deodorization stage.
Crude oils have a number of impurities which must be removed, typically through
the addition of small amounts of phosphoric acid or caustic soda. These react
with the oil and form a precipitate containing the impurities, which is separate
from the oil using a centrifuge under a vacuum. The bleaching and filtration
process is a continuous process utilizing absorbent materials such as bleaching
earth. The bleached oil is filtered through a stainless leaf filter, used in
conjunction with a polish filter. Finally, through a process of heating the oil,
the final impure vapors are removed from the oil. This process is essentially a
distillation process whereby the oil is vaporized and the components are
separated in a distillation cylinder. This process also occurs under vacuum.
Our Target Markets and Marketing Strategy. Cooking oil is a fundamental consumer
commodity used by essentially every household in countries such as Kazakstan.
Kazakstan had a population of approximately 16.6 million people in 1996. The per
capita consumption of cooking oil has varied from 5 liters to 9 liters over the
past five years. In 1995, consumption of cooking oil fell to 5 liters per
person, according to the United States Department of Agriculture, Foreign
Agriculture Service. We believe this will be a short-term event due to general
economic conditions of the period. Based on an average per capita consumption of
7 liters, the annual oil requirements for Kazakstan are in the range of 116
million liters per year.
13
<PAGE>
Over 75% of the vegetable oil requirements of Kazakstan are currently met
through imports. A major reason for the high percentage of imports is the
limited historical ability to grow oilseed crops. Kazakstan has historically
produced cotton and sunflowers as a source of oil. Production of sunflowers has
varied between 97,000 and 299,000 tons over the past five years. This is a
projected yield of between 30,000 and 100,000 tons of oil. The production of
cotton in the region is marginally less than that of sunflowers.
Retail price surveys have been completed throughout the different regions in
Kazakstan. The retail prices of vegetable oil vary significantly from a low of
$1.19 (USD) per liter in some of the more southern regions, to a high of $2.38
(USD) per liter in the northern regions of the country. Part of the reason for
lower prices in the southern regions of the country is the existence of an
oil-processing plant at Chimkent which is processing low cost cotton seed oil.
For most of the country, the primary source of oil is from imported oil. As
such, the world price of vegetable oils and related products has a major impact
on the domestic prices of vegetable oil inside Kazakstan. We contemplate
initiating a market development program to ensure that its products are properly
priced, that the correct distribution and marketing outlets are used, and that
the production from our plant can be immediately sold.
We are operated and managed by professionals with experience in the marketing
and commercial exploitation of various products. Our management's knowledge of
industries and markets have caused them to conclude that operations of a
start-up company must be based on the realization of almost immediate and
predictable revenue. Our management has decided to implement our business
strategy for the purpose of achieving independence from outside funding as soon
as commercially practicable.
Competition. Competition in the food products markets is significant.
Additionally, many of our competitors have, and will continue to have, greater
marketing, financial and other resources than us and, therefore, represent and
will continue to represent significant competition in our anticipated markets.
Although there is presently limited competition to our proposed oil refining
plant, the existing plant at Chimkent is currently in production and has
established customers. While we believe that the Chimkent plant produces a
lower-quality oil than we will produce, there can be no assurance that we will
produce products equal to, or superior to, the refined vegetable oil products
currently being produced at Chimkent and accepted in the Kazakstan market.
Moreover, Kazakstan has been targeted by most of the major international food
processing companies. We anticipate competition from foreign joint ventures to
increase significantly in the next five years. There can be no assurance that
the existing approaches of our competitors or new approaches or production
technology developed by those competitors will not be more effective than ours.
Our Research and Development. We are not currently conducting any research and
development activities and do not anticipate conducting such activities in the
near future. If we generate significant revenues, we may expand our product line
by entering into relationships with third parties.
Government Regulation. Kazakstan currently has apparent political stability and
leaders that rank foreign investment as a priority. However, there can be no
assurance that the current political leadership will continue to pass and
enforce legislation and regulations which permit us to effectively and
profitably operate our business. If governmental regulations change, the cost of
compliance with the various laws and regulations could have a material adverse
effect on our business, financial condition, and results of operation. Moreover,
the world-wide food products industries are subject to substantial government
controls, including the practice of restrictive duties and tariffs designed to
give domestic producers in various countries a competitive advantage over
foreign producers. The imposition of such duties by various governments could
have a material adverse effect on our business, financial condition, and results
of operation.
Employees. As of August 24, 2000, we have two (2) employees. We anticipate that
we will hire employees to provide such services as marketing and sales. From
time-to-time, we anticipate that we will use the services of independent
contractors and consultants to support product research and development,
marketing and sales and business development. We believe our future success
depends in large part upon the continued service of our key technical and senior
management personnel and our ability to attract and retain highly qualified
technical and managerial personnel.
14
<PAGE>
Facilities. Our executive, administrative and operating offices are located at
13144 Lake Arrow Road S.E., Calgary, Alberta Canada and are provided to us, at
no charge, by our President, Wayne Johnson.
Management's Discussion and Analysis of Financial Condition and Results of
Operations
Liquidity and Capital Resources. We have cash of $0.00 as of June 30, 2000. Our
President and director, Wayne Johnson, has paid our expenses since our inception
and we anticipate that Mr. Johnson will continue to pay our expenses in the
event that we do not generate revenues or obtain additional working through the
sale of common stock or other securities.
Results of Operations. We have not yet realized any revenue from operations. Our
expenses of approximately $18,399 consist of start-up costs from formation
through June 30, 2000.
Our Plan of Operation for the Next Twelve Months. Our success is materially
dependent upon our ability to satisfy additional financing requirements. We do
not anticipate that we will begin to realize positive gross revenue in our
current fiscal year.
In the opinion of management, available funds will not satisfy our working
capital requirements through the current fiscal year. Our President and
director, Wayne Johnson, has paid our expenses since our inception and we
anticipate that Mr. Johnson will continue to pay our expenses in the event that
we do not generate revenues or obtain additional working capital through the
sale of common stock or other securities. No assurances can be given that such
proceeds will satisfy our working capital needs for the period estimated, or;
that we can obtain additional working capital through the sale of common stock
or other securities, the issuance of indebtedness or otherwise or on terms
acceptable to us. Further, no assurances can be given that any such equity
financing will not result in a further substantial dilution to the existing
shareholders or will be on terms satisfactory to us.
Our forecast for the period for which our financial resources will be adequate
to support our operations involves risks and uncertainties and actual results
could fail as a result of a number of factors. We anticipate that we will need
to raise additional capital to develop, promote and conduct our operations. Such
additional capital may be raised through public or private financing as well as
borrowings and other sources.
We cannot guaranty that additional funding will be available on favorable terms.
If adequate funds are not available, we believe that our officers and directors
will contribute funds to pay for our expenses. In the alternative, we may be
required to obtain funds through entering into arrangements with collaborative
partners or others that may require us to relinquish rights to certain products
and services that we would not otherwise relinquish.
Description of Property
Our Property. As of the date specified in the following table, we held the
following property:
================================================================================
Property June 30, 2000
--------------------------------------------------------------------------------
Cash $0.00
--------------------------------------------------------------------------------
Property and Equipment $0.00
================================================================================
Our Facilities. At this time, we occupy facilities provided by Wayne Johnson,
our President and a director. The office space is located at 13144 Lake Arrow
Road S.E., Calgary, Alberta Canada.
Certain Relationships and Related Transactions
Conflicts Related to Other Business Activities. The persons serving as our
officers and directors have existing responsibilities and, in the future, may
have additional responsibilities, to provide management and services to other
entities in addition to us. As a result, conflicts of interest between us and
the other activities of those persons may occur from time to time.
15
<PAGE>
We will attempt to resolve any such conflicts of interest in our favor. Our
officers and directors are accountable to us and our shareholders as
fiduciaries, which requires that such officers and directors exercise good faith
and integrity in handling our affairs. A shareholder may be able to institute
legal action on our behalf or on behalf of that shareholder and all other
similarly situated shareholders to recover damages or for other relief in cases
of the resolution of conflicts in any manner prejudicial to us.
Related Party Transactions. There have been no related party transactions,
except for the following:
Wayne Johnson, our President, Secretary, Treasurer and director, has paid our
expenses since our inception and currently provides office space to us at no
charge.
Market for Common Equity and Related Stockholder Matters
Reports to Security Holders. Our securities are not listed for trading on any
exchange or quotation service. We are not required to comply with the timely
disclosure policies of any exchange or quotation service. The requirements to
which we would be subject if our securities were so listed typically include the
timely disclosure of a material change or fact with respect to our affairs and
the making of required filings. Although we are not required to deliver an
annual report to security holders, we intend to provide an annual report to our
security holders, which will include audited financial statements.
When we become a reporting company with the Securities and Exchange Commission,
the public may read and copy any materials filed with the Securities and
Exchange Commission at the Securities and Exchange Commission's Public Reference
Room at 450 Fifth Street N.W., Washington, D.C. 20549. The public may also
obtain information on the operation of the Public Reference Room by calling the
Securities and Exchange Commission at 1-800-SEC-0330. The Securities and
Exchange Commission maintains an Internet site that contains reports, proxy and
information statements, and other information regarding issuers that file
electronically with the Securities and Exchange Commission. The address of that
site is http://www.sec.gov.
There have been no cash dividends declared on our common stock. Dividends are
declared at the sole discretion of our Board of Directors.
Penny Stock Regulation. The Securities and Exchange Commission has adopted rules
that regulate broker-dealer practices in connection with transactions in "penny
stocks". Penny stocks are generally equity securities with a price of less than
$5.00 (other than securities registered on certain national securities exchanges
or quoted on the Nasdaq system, provided that current price and volume
information with respect to transactions in those securities is provided by the
exchange or system). The penny stock rules require a broker-dealer, prior to a
transaction in a penny stock not otherwise exempt from those rules, deliver a
standardized risk disclosure document prepared by the Securities and Exchange
Commission, which contains the following:
o a description of the nature and level of risk in the market for penny
stocks in both public offerings and secondary trading;
o a description of the broker's or dealer's duties to the customer and
of the rights and remedies available to the customer with respect to
violation to such duties or other requirements of securities' laws;
o a brief, clear, narrative description of a dealer market, including
"bid" and "ask" prices for penny stocks and the significance of the
spread between the "bid" and "ask" price;
o a toll-free telephone number for inquiries on disciplinary actions;
o definitions of significant terms in the disclosure document or in the
conduct of trading in penny stocks; and
o such other information and is in such form (including language, type,
size and format), as the Securities and Exchange Commission shall
require by rule or regulation.
Prior to effecting any transaction in penny stock, the broker-dealer also must
provide the customer the following:
o the bid and offer quotations for the penny stock;
16
<PAGE>
o the compensation of the broker-dealer and its salesperson in the
transaction;
o the number of shares to which such bid and ask prices apply, or other
comparable information relating to the depth and liquidity of the
market for such stock; and
o monthly account statements showing the market value of each penny
stock held in the customer's account.
In addition, the penny stock rules require that prior to a transaction in a
penny stock not otherwise exempt from those rules, the broker-dealer must make a
special written determination that the penny stock is a suitable investment for
the purchaser and receive the purchaser's written acknowledgment of the receipt
of a risk disclosure statement, a written agreement to transactions involving
penny stocks, and a signed and dated copy of a written suitably statement. These
disclosure requirements may have the effect of reducing the trading activity in
the secondary market for a stock that becomes subject to the penny stock rules.
If any of our securities become subject to the penny stock rules, holders of
those securities may have difficulty selling those securities.
Executive Compensation - Remuneration of Directors and Officers
Any compensation received by our officers, directors, and management personnel
will be determined from time to time by our Board of Directors. Our officers,
directors, and management personnel will be reimbursed for any out-of-pocket
expenses incurred on our behalf.
Summary Compensation Table. The table set forth below summarizes the annual and
long-term compensation for services in all capacities to us payable to our Chief
Executive Officer and our other executive officers whose total annual salary and
bonus are anticipated to exceed $50,000 during the year ending December 31,
2000. Our Board of Directors may adopt an incentive stock option plan for our
executive officers which would result in additional compensation.
<TABLE>
<CAPTION>
============================================================================================================
Name and Principal Position Year Annual Bonus ($) Other Annual All Other
Salary ($) Compensation ($) Compensation
------------------------------------------------------------------------------------------------------------
Wayne Johnson President,
<S> <C> <C> <C> <C> <C>
Secretary, Treasurer, Director 2000 None None None None
------------------------------------------------------------------------------------------------------------
Arne Carlson, Secretary, 2000 None None None None
Director
============================================================================================================
</TABLE>
Compensation of Directors. Our directors who are also our employees receive no
extra compensation for their service on our Board of Directors.
Compensation of Officers. As of June 30, 2000, our officers have received no
compensation for their services provided to us.
Employment Contracts. We do not anticipate that we will enter into employment
contracts with Wayne Johnson or Arne Carlson.
Financial Statements
<PAGE>
Food and Beverage Masters (Kazakstan), Inc.
(A Development Stage Company)
Financial Statements
(Unaudited)
As of June 30, 2000 and
For the Six Month Periods Ended June 30, 2000 and 1999 and
For the Period from July 18, 1997 (Inception) to June 30, 2000
<PAGE>
Food and Beverage Masters (Kazakstan), Inc.
(A Development Stage Company)
Index to the Financial Statements
(Unaudited)
As of June 30, 2000 and
For the Six Month Periods Ended June 30, 2000 and 1999 and
For the Period from July 18, 1997 (Inception) to June 30, 2000
(Unaudited)
--------------------------------------------------------------------------------
Financial Statements of Food and Beverage Masters (Kazakstan), Inc.:
Balance Sheets (Unaudited), June 30, 2000 1
Statements of Operations (Unaudited) for the Six Month
Periods Ended June 30, 2000 and 1999 and for the Period from
July 18, 1997 (Inception) to June 30, 2000 2
Statements of Shareholders' Deficit (Unaudited) for the Six
Month Periods Ended June 30, 2000 and 1999 and for the
Period from July 18, 1997 (Inception) to June 30, 2000 3
Statements of Cash Flows (Unaudited) for the Six Month
Periods Ended June 30, 2000 and 1999 and for the Period from
July 18, 1997 (Inception) to June 30, 2000 4
Notes to the Financial Statements (Unaudited) 5
<PAGE>
Food and Beverage Masters (Kazakstan), Inc.
(A Development Stage Company)
Balance Sheets
(Unaudited)
June 30, 2000
--------------------------------------------------------------------------------
ASSETS
Prepaid expenses $ 500
--------
Total assets $ 500
========
LIABILITIES AND SHAREHOLDERS' DEFICIT
Due to related party $ 14,899
--------
Total liabilities 14,899
--------
Shareholders' deficit:
Preferred stock, $.001 par value; 5,000,000
shares authorized; none issued and
outstanding at June 30, 2000 --
Common stock, $.001 par value; 50,000,000
shares authorized; 4,000,000 shares
issued and outstanding at June 30, 2000 4,000
Additional paid-in capital --
Deficit accumulated during development stage (18,399)
--------
Total shareholders' deficit (14,399)
--------
Total liabilities and shareholders' deficit $ 500
========
The accompanying notes are an integral part of the financial statements.
1
<PAGE>
Food and Beverage Masters (Kazakstan), Inc.
(A Development Stage Company)
Statements of Operations
(Unaudited)
For the Six Month Periods Ended June 30, 2000 and 1999 and
For the Period from July 18, 1997 (Inception) to June 30, 2000
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Period from
For the Six Month For the Six Month July 18, 2997
Period Ended Period Ended (Inception) to
June 30, 2000 June 30, 1999 June 30, 2000
----------------- ----------------- -------------
<S> <C> <C> <C>
Revenue -- -- --
Cost of sales -- -- --
-------- -------- --------
Gross profit -- -- --
Legal and professional fees $(12,466) -- $(14,399)
Other operating costs and expenses -- $ (2,732) (4,000)
-------- -------- --------
Net loss $(12,466) $ (2,732) $(18,399)
======== ======== ========
Loss per common share -- -- $ (0.01)
======== ======== ========
</TABLE>
The accompanying notes are an integral part of the financial statements.
2
<PAGE>
Food and Beverage Masters (Kazakstan), Inc.
(A Development Stage Company)
Statements of Shareholders' Deficit
(Unaudited)
For the Six Month Periods Ended June 30, 2000 and 1999 and
For the Period from July 18, 1997 (Inception) to June 30, 2000
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Deficit
Accumulated
Additional During the
Common Price Common Paid-in Development
Shares Per Share Stock Capital Stage Total
------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Balance, July 18,
1997 (inception) -- -- -- -- --
Net loss -- -- -- $ (447) (447)
------------ ------------ ------------ ------------ ------------ ------------
Balance, December
31, 1997 -- -- -- (447) (447)
Net loss -- -- -- (821) (821)
------------ ------------ ------------ ------------ ------------ ------------
Balance, December
31, 1998 -- -- -- (1,268) (1,268)
Shares issued in private placement
offering 4,000,000 $ 0.001 $ 4,000 -- -- 4,000
Net loss -- -- -- (4,665) (4,665)
------------ ------------ ------------ ------------ ------------ ------------
Balance, December
31, 1999 4,000,000 4,000 -- (5,933) (1,933)
Net loss -- -- -- (12,466) (12,466)
------------ ------------ ------------ ------------ ------------ ------------
Balance, June 30,
2000 4,000,000 $ 4,000 -- $ (18,399) $ (14,399)
============ ============ ============ ============ ============ ============
</TABLE>
The accompanying notes are an integral part of the financial statements.
3
<PAGE>
Food and Beverage Masters (Kazakstan), Inc.
(A Development Stage Company)
Consolidated Statements of Cash Flows
(Unaudited)
For the Six Month Periods Ended June 30, 2000 and 1999 and
For the Period from July 18, 1997 (Inception) to June 30, 2000
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Period from
For the Six Month For the Six Month July 18, 2997
Period Ended Period Ended (Inception) to
June 30, 2000 June 30, 1999 June 30, 2000
----------------- ----------------- --------------
<S> <C> <C> <C>
Cash flows from operating activities:
Net loss $(12,466) $ (2,732) $(18,399)
Adjustments to reconcile net loss to net cash
provided by operation activities
Increase in assets:
Preapid expenses (500) -- (500)
Increase (decrease) in liabilities:
Decrease in accounts payable (1,933) (1,268) --
Increase in due to related party 14,899 -- 14,899
-------- -------- --------
Cash used in operating activities -- (4,000) (4,000)
-------- -------- --------
Cash flows provided by financing activities:
Common shares issued in private
placement -- 4,000 4,000
-------- -------- --------
Cash provided by financing activities -- 4,000 4,000
-------- -------- --------
Net increase (decrease) in cash -- -- --
Cash at beginning of period -- -- --
-------- -------- --------
Cash at end of period -- -- --
======== ======== ========
Supplemental Disclosure of Cash Flow Information
Interest paid -- -- --
Income taxes paid -- -- --
</TABLE>
The accompanying notes are an integral part of the financial statements.
4
<PAGE>
Food and Beverage Masters (Kazakstan), Inc.
(A Development Stage Company)
Notes to Financial Statements
(Unaudited)
As of June 30, 2000 and
For the Six Month Periods Ended June 30, 2000 and 1999 and
For the Period from July 18, 1997 (Inception) to June 30, 2000
--------------------------------------------------------------------------------
1. Basis of Presentation
In the opinion of the management of Food and Beverage Masters (Kazakstan),
Inc. (a development stage company) (the "Company"), the accompanying
unaudited condensed financial statements contain all adjustments,
consisting of only normal recurring adjustments, necessary to present
fairly its financial position as of June 30, 2000, and the related
statements of operations, shareholders' equity, and cash flows for the six
month periods ended June 30, 2000 and 1999 and for the period from July 18,
1997 (inception) to June 30, 2000.
2. Development Stage Operations
The Company was incorporated in the state of Delaware on July 18, 1997 and
has a limited history with no revenues, products, or technology identified
or ready for market. As such, the Company is subject to the risks and
uncertainties associated with a new business. The success of the Company's
future operations is dependent, in part, upon the Company's ability to
identify and successfully market its yet to be developed products and
obtain the necessary capital during its development stage and until it
achieves profitability.
3. Summary of Significant Accounting Policies
Revenue Recognition
Revenue will be recognized when the Company's goods are shipped or services
are provided.
Earnings per Common Share
Basic earnings per common share ("EPS") is computed by dividing income or
loss available to common shareholders by the weighted average number of
common shares outstanding for the year. Diluted EPS is similar to basic EPS
except that the weighted average of common shares outstanding is increased
to include the number of additional common shares that would have been
outstanding if potentially dilutive common shares had been issued.
Income Taxes
The Company accounts for income taxes under the liability method. Under the
liability method, deferred income taxes are determined based on differences
between the financial reporting and tax bases of assets and liabilities.
They are measured using the enacted tax rates and laws that will be in
effect when the differences are expected to reverse. The Company is
required to adjust
5
<PAGE>
Food and Beverage Masters (Kazakstan), Inc.
(A Development Stage Company)
Notes to Financial Statements
(Unaudited)
As of June 30, 2000 and
For the Six Month Periods Ended June 30, 2000 and 1999 and
For the Period from July 18, 1997 (Inception) to June 30, 2000
--------------------------------------------------------------------------------
3. Summary of Significant Accounting Policies, Continued
Income Taxes, Continued
its deferred tax liabilities in the period when tax rates or the provisions
of the income tax laws change. Valuation allowances are established to
reduce deferred tax assets to the amounts expected to be realized.
Management Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses
during the reporting periods. Actual results could differ from those
estimates.
4. Income Taxes
The components of the provision for income taxes are as follows:
Current tax expense:
Federal --
State --
---------
--
---------
Deferred tax expense:
Federal --
State --
---------
--
---------
Total provision --
=========
6
<PAGE>
Food and Beverage Masters (Kazakstan), Inc.
(A Development Stage Company)
Notes to Financial Statements
(Unaudited)
As of June 30, 2000 and
For the Six Month Periods Ended June 30, 2000 and 1999 and
For the Period from July 18, 1997 (Inception) to June 30, 2000
--------------------------------------------------------------------------------
4. Income Taxes, Continued
Significant components of the Company's deferred income tax assets and
liabilities at June 30, 1999 are as follows:
Deferred income tax asset:
Capitalized start-up expenses $ 4,896
----------
Total deferred income tax asset 4,896
Valuation allowance (4,896)
----------
Net deferred income tax liability --
==========
The Company, based upon its history of losses and management's assessment
of when operations are anticipated to generate taxable income, has
concluded that is is more likely than not that none of the net deferred
income tax assets will be realized through future taxable earnings and has
established a valuation allowance for them.
Reconciliation of the effective tax rate to the U.S. statutory rate is as
follows:
Tax expense at U.S. statutory rate (34.0)%
Change in the valuation allowance 34.0
---------
Effective income tax rate -- %
=========
5. Loss Per Common Share
The loss per common share has been computed by dividing the loss available
to common shareholders by the weighted-average number of common shares for
the period.
The computations of loss per common share for the six month periods ended
June 30, 2000 and 1999, and for the period from July 18, 1997 (inception)
to June 30, 2000 follow.
The Company does not have any potentially dilutive securities.
7
<PAGE>
Food and Beverage Masters (Kazakstan), Inc.
(A Development Stage Company)
Notes to Financial Statements
(Unaudited)
As of June 30, 2000 and
For the Six Month Periods Ended June 30, 2000 and 1999 and
For the Period from July 18, 1997 (Inception) to June 30, 2000
--------------------------------------------------------------------------------
5. Loss Per Common Share, Continued
<TABLE>
<CAPTION>
Period from
For the Six Month For the Six Month July 18, 2997
Period Ended Period Ended (Inception) to
June 30, 2000 June 30, 1999 June 30, 2000
----------------- ----------------- --------------
<S> <C> <C> <C>
Net loss available to common stockholders $ (12,466) $ (2,732) $ (18,399)
Weighted-average shares 4,000,000 4,000,000 2,000,000
------------- ------------ -------------
Loss per common share -- -- $ (0.01)
============= ============ =============
</TABLE>
8
<PAGE>
Food and Beverage Masters (Kazakstan), Inc.
(A Development Stage Company)
Financial Statements
As of December 31, 1999 and 1998 and
For Each of the Two Years in the Period Ended December 31, 1999 and
For the Period from July 18, 1997 (Inception) to December 31, 1999
<PAGE>
Food and Beverage Masters (Kazakstan), Inc.
(A Development Stage Company)
Index to the Financial Statements
As of December 31, 1999 and 1998 and
For Each of the Two Years in the Period Ended December 31, 1999 and
For the Period from July 18, 1997 (Inception) to December 31, 1999
--------------------------------------------------------------------------------
Report of Independent Auditors 1
Financial Statements of Food and Beverage Masters (Kazakstan), Inc.:
Balance Sheets, December 31, 1999 and 1998 2
Statements of Operations for each of the two years in the
period ended December 31, 1999 and for the period from
July 18, 1997 (inception) to December 31, 1999 3
Statements of Shareholders' Equity for each of the two
years in the period ended December 31, 1999 and for the
period from July 18, 1997 (inception) to December 31, 1999 4
Statements of Cash Flows for each of the two years in the
period ended December 31, 1999 and for the period from
July 18, 1997 (inception) to December 31, 1999 5
Notes to the Financial Statements 6
<PAGE>
REPORT OF INDEPENDENT AUDITORS
To the Board of Directors
Food and Beverage Masters (Kazakstan), Inc.
We have audited the accompanying balance sheets of Food and Beverage Masters
(Kazakstan), Inc. (a development stage company) as of December 31, 1999 and
1998, and the related statements of operations, shareholders' equity, and cash
flows for each of the two years in the period ended December 31, 1999 and for
the period from July 18, 1997 (inception) to December 31, 1999. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above, present fairly, in
all material respects, the financial position of Food and Beverage Masters
(Kazakstan), Inc. (a development stage company) as of December 31, 1999 and
1998, and the results of its operations and cash flows for each of the two years
in the period ended December 31, 1999 and for the period from July 18, 1997
(inception) to December 31, 1999, in conformity with generally accepted
accounting principles.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 1 to the
financial statements, the Company has no operations, products, or facilities,
and significant resources will be required to implement its plan of operations,
thereby raising substantial doubt about its ability to continue as a going
concern. Management's plan in regard to these matters is also described in Note
1. The financial statements do not include any adjustments that might result
from the outcome of this uncertainty.
/s/ Kelly & Company
Kelly & Company
Newport Beach, California
July 12, 2000
<PAGE>
Food and Beverage Masters (Kazakstan), Inc.
(A Development Stage Company)
Balance Sheets
December 31, 1999 and 1998
--------------------------------------------------------------------------------
ASSETS
1999 1998
------- -------
Total assets -- --
======= =======
LIABILITIES AND SHAREHOLDERS' EQUITY
Accounts payable $ 1,933 $ 1,268
------- -------
Total liabilities 1,933 1,268
------- -------
Shareholders' equity:
Preferred stock, $.001 par value; 5,000,000
shares authorized; none issued and
outstanding at December 31, 1999 and
1998 -- --
Common stock, $.001 par value; 50,000,000
shares authorized; 4,000,000 shares and
no shares issued and outstanding at
December 31, 1999 and 1998, respectively 4,000 --
Additional paid-in capital -- --
Deficit accumulated during development stage (5,933) (1,268)
------- -------
Total shareholders' equity $(1,933) $(1,268)
------- -------
Total liabilities and shareholders' equity -- --
======= =======
The accompanying notes are an integral part of the financial statements.
2
<PAGE>
Food and Beverage Masters (Kazakstan), Inc.
(A Development Stage Company)
Statements of Operations
For Each of the Two Years in the Period Ended December 31, 1999 and
For the Period from July 18, 1997 (Inception) to December 31, 1999
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Period from
July 18, 1997
For the Year Ended For the Year Ended (Inception) to
December 31, 1999 December 31, 1998 December 31, 1999
----------------- ----------------- -----------------
<S> <C> <C> <C>
Revenue -- -- --
Cost of sales -- -- --
Gross profit -- -- --
Legal and professional fees $1,933 -- $1,933
Other operating costs and expenses 2,732 $ 821 4,000
------ ------ ------
Net loss $4,665 $ 821 $5,933
====== ====== ======
Loss per common share -- -- --
====== ====== ======
</TABLE>
The accompanying notes are an integral part of the financial statements.
3
<PAGE>
Food and Beverage Masters (Kazakstan), Inc.
(A Development Stage Company)
Statements of Shareholders' Equity
For Each of the Two Years in the Period Ended December 31, 1999 and
For the Period from July 18, 1997 (Inception) to December 31, 1999
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Deficit
Accumulated
Additional During the
Common Price Common Paid-in Development
Shares Per Share Stock Capital Stage Total
------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Balance, July 18,
1997 (inception) -- -- -- -- --
Net loss -- -- -- $ (447) (447)
---------- ---------- ---------- ---------- ----------
Balance, December
31, 1997 -- -- -- (447) (447)
Net loss -- -- -- (821) (821)
---------- ---------- ---------- ---------- ----------
Balance, December
31, 1998 -- -- -- (1,268) (1,268)
Shares issued in private placement
offering 4,000,000 $ 0.001 $ 4,000 -- -- 4,000
Net loss -- -- -- (4,665) (4,665)
---------- ---------- ---------- ---------- ----------
Balance, December
31, 1999 4,000,000 4,000 -- (5,933) (1,933)
========== ========== ========== ========== ==========
</TABLE>
The accompanying notes are an integral part of the financial statements.
4
<PAGE>
Food and Beverage Masters (Kazakstan), Inc.
(A Development Stage Company)
Consolidated Statements of Cash Flows
For Each of the Two Years in the Period Ended December 31, 1999 and
For the Period from July 18, 1997 (Inception) to December 31, 1999
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
July 18, 1997
For the Year Ended For the Year Ended (inception) to
December 31, 1999 December 31, 1998 December 31, 1999
------------------ ------------------ -----------------
<S> <C> <C> <C>
Cash flows from operating activities:
Net loss $ (4,665) $ (821) $ (5,933)
Adjustments to reconcile net loss to net cash
provided by operation activities
Increase in accounts payable 665 821 1,933
-------- -------- --------
Cash used in operating activities (4,000) -- (4,000)
-------- -------- --------
Cash flows provided by financing activities:
Common shares issued in private placement 4,000 -- 4,000
-------- -------- --------
Cash provided by financing activities 4,000 -- 4,000
-------- -------- --------
Net increase (decrease) in cash -- -- --
Cash at beginning of period -- -- --
-------- -------- --------
Cash at end of period -- -- --
======== ======== ========
<CAPTION>
Supplemental Disclosure of Cash Flow Information
July 18, 1997
For the Year Ended For the Year Ended (inception) to
December 31, 1999 December 31, 1998 December 31, 1999
------------------ ------------------ -----------------
<S> <C> <C> <C>
Interest paid -- -- --
Income taxes paid -- -- --
</TABLE>
The accompanying notes are an integral part of the financial statements.
5
<PAGE>
Food and Beverage Masters (Kazakstan), Inc.
(A Development Stage Company)
Notes to Financial Statements
For Each of the Two Years in the Period Ended December 31, 1999 and
For the Period from July 18, 1997 (Inception) to December 31, 1999
--------------------------------------------------------------------------------
1. Development Stage Operations
Food and Beverage Masters (Kazakstan), Inc. (a development stage company)
(the "Company") was incorporated in the state of Delaware on July 18, 1997
and has a limited history with no revenues, products, or technology
identified or ready for market. As such, the Company is subject to the
risks and uncertainties associated with a new business. The success of the
Company's future operations is dependent, in part, upon the Company's
ability to identify and successfully market its yet to be developed
products and obtain the necessary capital during its development stage and
until it achieves profitability.
2. Summary of Significant Accounting Policies
Revenue Recognition
Revenue will be recognized when the Company's goods are shipped or services
are provided.
Earnings per Common Share
Basic earnings per common share ("EPS") is computed by dividing income or
loss available to common shareholders by the weighted average number of
common shares outstanding for the year. Diluted EPS is similar to loss per
common share except that the weighted average of common shares outstanding
is increased to include the number of additional common shares that would
have been outstanding if potentially dilutive common shares had been
issued.
Income Taxes
The Company accounts for income taxes under the liability method. Under the
liability method, deferred income taxes are determined based on differences
between the financial reporting and tax bases of assets and liabilities.
They are measured using the enacted tax rates and laws that will be in
effect when the differences are expected to reverse. The Company is
required to adjust its deferred tax liabilities in the period when tax
rates or the provisions of the income tax laws change. Valuation allowances
are established to reduce deferred tax assets to the amounts expected to be
realized.
Management Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses
during the reporting periods. Actual results could differ from those
estimates.
6
<PAGE>
Food and Beverage Masters (Kazakstan), Inc.
(A Development Stage Company)
Notes to Financial Statements
For Each of the Two Years in the Period Ended December 31, 1999 and
For the Period from July 18, 1997 (Inception) to December 31, 1999
--------------------------------------------------------------------------------
3. Income Taxes
The components of the provision for income taxes are as follows:
1999 1998
--------- ---------
Current tax expense:
Federal -- --
State -- --
--------- ---------
-- --
--------- ---------
Deferred tax expense:
Federal -- --
State -- --
--------- ---------
-- --
--------- ---------
Total provision -- --
========= =========
Significant components of the Company's deferred income tax assets and
liabilities at December 31, 1999 and 1998 are as follows:
1999 1998
------- --------
Deferred income tax asset:
Capitalized start-up expenses $ 2,017 $ 431
------- --------
Total deferred income tax asset 2,017 431
Valuation allowance (2,017) (431)
------- --------
Net deferred income tax liability -- --
======= ========
The Company, based upon its history of losses and management's assessment
of when operations are anticipated to generate taxable income, has
concluded that is is more likely than not that none of the net deferred
income tax assets will be realized through future taxable earnings and has
established a valuation allowance for them.
Reconciliation of the effective tax rate to the U.S. statutory rate is as
follows:
1999 1998
------- --------
Tax expense at U.S. statutory rate (34.0) % (34.0) %
Change in the valuation allowance 34.0 34.0
------- --------
Effective income tax rate -- % -- %
======= ========
7
<PAGE>
Food and Beverage Masters (Kazakstan), Inc.
(A Development Stage Company)
Notes to Financial Statements
For Each of the Two Years in the Period Ended December 31, 1999 and
For the Period from July 18, 1997 (Inception) to December 31, 1999
--------------------------------------------------------------------------------
4. Loss Per Common Share
Loss per common share has been calculated in accordance with SFAS No. 128,
"Earnings per Share".
The loss per common share has been computed by dividing the loss available
to common shareholders by the weighted-average number of common shares for
the period.
The computations of loss per common share for the years ended December 31,
1999 and 1998 and for the period from July 18, 1997 (inception) to December
31, 1999 follow.
The Company does not have any potentially dilutive securities.
<TABLE>
<CAPTION>
July 18, 1997
For the Year Ended For the Year Ended (inception) to
December 31, 1999 December 31, 1998 December 31, 1999
------------------ ------------------ -----------------
<S> <C> <C> <C>
Net loss available to common stockholders $ 4,665 $ -- $ 5,933
Weighted-average shares 4,000,000 -- 1,600,000
---------- ---------- ----------
Loss per common share -- -- --
========== ========== ==========
</TABLE>
5. Stock Transactions
Private Placement Offering
In January 1999, the Company sold, in a private placement offering,
4,000,000 shares of its common stock at $.001 per share and received as
total proceeds $4,000.
8
<PAGE>
Changes in and Disagreements with Accountants on Accounting and Financial
Disclosure
There have been no changes in or disagreements with our accountants since our
formation required to be disclosed pursuant to Item 304 of Regulation S-B.
LEGAL MATTERS
The validity of the issuance of the shares of common stock offered hereby has
been passed upon by the law firm of Stepp & Beauchamp LLP, located in Newport
Beach, California.
17
<PAGE>
EXPERTS
The audited financial statements of Food and Beverage Masters (Kazakstan), Inc.
included herein and elsewhere in this Registration Statement have been audited
by Kelly and Company, independent certified public accountants, for the periods
and to the extent set forth in their report (which describes an uncertainty as
to the ability to continue as a going concern) appearing herein and elsewhere in
this Registration Statement. Such financial statements have been so included in
reliance upon the reports of such firm given upon their authority as experts in
accounting and auditing.
ADDITIONAL INFORMATION
We have filed a Registration Statement with the Commission pursuant to the
Securities Act of 1933 with respect to the shares of our $.001 common stock
offered hereby. This prospectus does not contain all of the information set
forth in the Registration Statement and the exhibits and schedules to the
Registration Statement on Form SB-2. For further information regarding us and
our common stock offered hereby, reference is made to the Registration Statement
and the exhibits and schedules filed as a part of the Registration Statement.
Information in this prospectus concerning the contents of any contract or any
other document referred to is not necessarily complete. Reference is made in
each instance to the copy of such contract or document filed as an exhibit to
the Registration Statement. All of that information is qualified in all respects
by such reference to such exhibit.
PART II - INFORMATION NOT REQUIRED IN PROSPECTUS
Indemnification of Directors and Officers
Our Certificate of Incorporation provides, among other things, that our
directors shall not be personally liable to us or our shareholders for monetary
damages for breach of fiduciary duty as a director, except for:
o any breach of such director's duty of loyalty to us or our security
holders;
o acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law;
o liability for unlawful payments of dividends or unlawful stock
purchase or redemption by us; or
o any transaction from which such director derived any improper personal
benefit.
Accordingly, our directors may have no liability to our shareholders for any
mistakes or errors of judgment or for any act of omission, unless such act or
omission involves intentional misconduct, fraud, or a knowing violation of law
or results in unlawful distributions to our shareholders.
Indemnification Agreements. We anticipate that we will enter into
indemnification agreements with each of our executive officers pursuant to which
we will agree to indemnify each such officer for all expenses and liabilities,
including criminal monetary judgments, penalties and fines, incurred by such
person in connection with any criminal or civil action brought or threatened
against such person by reason of such person being or having been our officer or
director or employee. To be entitled to indemnification by us, such officer must
have acted in good faith and in a manner such officer believed to be in our best
interests and, with respect to criminal actions, such person must have had no
reasonable cause to believe his or her conduct was unlawful.
Insofar as indemnification for liabilities arising under the Securities Act of
1933 may be permitted to our directors, officers and controlling persons
pursuant to the foregoing provisions, or otherwise, we have been advised that in
the opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Act and is, therefore, unenforceable.
Other Expenses of Issuance and Distribution
We will pay all expenses in connection with the registration and sale of the
common stock. The estimated expenses of issuance and distribution are set forth
below.
18
<PAGE>
================================================================================
Registration Fees Approximately $264.00
--------------------------------------------------------------------------------
Transfer Agent Fees Approximately $500.00
--------------------------------------------------------------------------------
Costs of Printing and Engraving Approximately $500.00
--------------------------------------------------------------------------------
Legal Fees Approximately $15,000.00
--------------------------------------------------------------------------------
Accounting Fees Approximately $2,500.00
================================================================================
Recent Sales of Unregistered Securities
There have been no sales of unregistered securities within the last three (3)
years which would be required to be disclosed pursuant to Item 701 of Regulation
S-B, except for the following:
On or about July 18, 1997, we sold 4,000,000 shares of $.001 par value common
stock for $0.001 per share. The shares were issued in a transaction which we
believe satisfies the requirements of that exemption from the registration
requirements of the Securities Act of 1933, specified by the provisions of
Section 3(a) of the Act and Rule 504 of Regulation D promulgated by the
Securities and Exchange Commission pursuant to that Section 3(a). The offering
price for the shares was arbitrarily established by us and had no relationship
to our assets, book value, revenues or other established criteria of value. We
realized proceeds of $4,000.00. The proceeds of the offering were used to
provide us with working capital.
Exhibits
Copies of the following documents are filed with this Registration
Statement, Form SB-2, as exhibits:
Exhibit No.
-----------
1. Underwriting Agreement (not applicable)
3.1 Certificate of Incorporation (Charter Document)
3.2 Bylaws
5. Opinion Re: Legality
8. Opinion Re: Tax Matters (not applicable)
11. Statement Re: Computation of Per Share Earnings*
15. Letter on unaudited interim financial information (not applicable)
23.1 Consent of Auditors
23.2 Consent of Counsel**
24. Power of Attorney is included on the Signature Page of the
Registration Statement
27. Financial Data Schedule
* Included in Financial Statements
** Included in Exhibit 5
19
<PAGE>
Undertakings
A. Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to our directors, officers and controlling persons
pursuant to the foregoing provisions, or otherwise, we have been advised that in
the opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Securities Act of 1933 and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by us of expenses incurred or paid by
our director, officer or controlling person in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, we will, unless in
the opinion of our counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Securities
Act of 1933 and will be governed by the final adjudication of such issue.
B. We hereby undertake:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To specify in the prospectus any facts or events arising after
the effective date of the Registration Statement (or most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set
forth in the Registration Statement. Notwithstanding the
foregoing, any increase or decrease in volume of securities
offered (if the total dollar value of securities offered would
not exceed that which was registered) and any deviation from the
low or high end of the estimated maximum offering range may be
reflected in the form of prospectus filed with the Securities
and Exchange Commission pursuant to Rule 424(b) (Section
230.424(b) of Regulation S-B) if, in the aggregate, the changes
in volume and price represent no more than a 20% change in the
maximum aggregate offering price set forth in the "Calculation
of Registration Fee" table in the effective Registration
Statement; and
(iii) To include any additional or changed material information with
respect to the plan of distribution not previously disclosed in
the Registration Statement or any material change to such
information in the Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new Registration Statement relating to the securities
offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the
termination of the offering.
20
<PAGE>
SIGNATURES
In accordance with the requirements of the Securities Act of 1933, as amended,
we certify that we have reasonable grounds to believe that we meet all of the
requirements of filing on Form SB-2 and authorized this Registration Statement
to be signed on our behalf by the undersigned, in the city of Calgary, Alberta,
on August 23, 2000.
Food and Beverage Masters (Kazakstan), Inc.,
a Delaware corporation
By: /s/ Wayne Johnson
---------------------------------------
Wayne Johnson
Its: President, Treasurer and Director
In accordance with the requirements of the Securities Act of 1933, this
Registration Statement was signed on this _____ day of August, 2000, the
following persons in the capacities and on the dates stated:
/s/ Wayne Johnson August 23, 2000
---------------------------------
Wayne Johnson
President, Treasurer and Director
/s/ Arne Carlson August 23, 2000
---------------------------------
Arne Carlson
Secretary, Director
21
<PAGE>
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints and hereby
authorizes Wayne Johnson with the full power of substitution, as
attorney-in-fact, to sign in such person's behalf, individually and in each
capacity stated below, and to file any amendments, including post-effective
amendments to this Registration Statement.
In accordance with the requirements of the Securities Act of 1933, this
Registration Statement was signed by the following persons in the capacities and
on the dates stated.
Food and Beverage Masters (Kazakstan), Inc.,
/s/ Wayne Johnson August 23, 2000
---------------------------------
Wayne Johnson
President, Treasurer and Director
/s/ Arne Carlson August 23, 2000
---------------------------------
Arne Carlson
Secretary, Director
22
