<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-KSB
[X] Annual report under Section 13 or 15(d) of the Securities Exchange Act of
1934.
For the fiscal year ended DECEMBER 31, 1999.
[ ] Transition report under Section 13 or 15(d) of the Securities Exchange Act
of 1934
For the transition period from _________________ to _________________
Commission file number 0-27313
BLINI HUT, INC.
(Name of Small Business Issuer in Its Charter)
NEVADA 88-0335902
(State or Other Jurisdiction of (IRS Employer
Incorporation or Organization) Identification No.)
47-39 49th Street
Woodside, New York 11377
(Address of Principal Executive Offices) (Zip Code)
(718) 784-3344
(Issuer's Telephone Number, Including Area Code)
Securities registered under Section 12(b) of the Exchange Act:
n/a
Securities registered under Section 12(g) of the Exchange Act:
Common Stock, $.01 par value
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Check whether the issuer: (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports, and (2)
has been subject to such filing requirements for the past 90 days.
Yes x No. ____
Check is there is no disclosure of delinquent filers in response to Item
405 of Regulation S-B is not contained in this form, and no disclosure will be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB. / /
Issuer's revenues for the year ended December 31, 1999 - $674,094.
ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS
DURING THE PAST FIVE YEARS
Check whether the issuer has filed all documents and reports required to be
filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of
securities under a plan confirmed by a court.
Yes X No. ____
As of March 31, 2000 there were 3,591,788 shares of Common Stock outstanding.
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ITEM 1 DESCRIPTION OF BUSINESS
GENERAL
Blini Hut, Inc., formerly Bargain Products, Inc. (the "Company" or "Blini
Hut") was organized as a Nevada corporation on April 6, 1995. The Company was
engaged in the business of selling low cost consumer products at the retail
level through its wholly-owned subsidiary, Dollar Mania, Inc., from June 1995
through September 1996. Dollar Mania was unable to financially support its rapid
expansion and in order to protect its assets filed chapter 11 bankruptcy on
March 28, 1996. Because the Company's obligations were far in excess of its
assets, after a number of months of review, examination, and discussions between
major creditors, the bankruptcy trustee, the Company's bankruptcy counsel, and
its corporate counsel, the Company decided to spin off its wholly-owned
subsidiary, Dollar Mania, by transferring all of the issued and outstanding
common stock of Dollar Mania to the Bankruptcy Trustee. The Company had been
inactive without operations since September 1996, but on May 18, 1999 the
Company changed its name to Blini Hut, Inc., and now engages in the marketing
and distribution of various specialty Eastern/European fast food restaurants.
On December 2, 1999 the Company acquired Troika Foods, Inc. ("Troika"), a
Delaware corporation engaged in the business of manufacturing and distributing a
line of ethnic gourmet food products to upscale gourmet stores and distributors
in the greater New York area. The Company issued to the shareholders of Troika
6,000,000 shares of the Company's common stock in exchange for all the
outstanding shares of Troika making Troika a wholly owned subsidiary of the
Company.
The Company proposes to develop specialty Eastern/European fast food
restaurants through creating company-owned restaurants and through franchising.
THE COMPANY'S RESTAURANT CONCEPT
The Blini Hut concept is designed to appeal to a broad spectrum of fast
food customers who are seeking a consistent and high quality dining experience
served in an efficient, distinctive atmosphere for a moderate price. Management
seeks to provide this experience by serving a limited selection of tasty and
interesting dishes that are prepared largely on site and through the use of the
Company's commissary kitchen, from fresh ingredients.
The Blini Hut restaurant currently operable at 132 Nassau Street, New York
City, provides an efficient fast-paced environment and well-trained enthusiastic
service to its customers. The Company has focused its efforts upon a menu of
well-prepared Eastern/European dishes served in generous portions at moderate
prices, which has attracted and expects to attract an acceptable share of the
fast food market. The Company believes that the
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Blini Hut restaurant concept and menu are designed to attract loyal clientele
who return with a high degree of frequency.
The Company emphasizes and intends to continue emphasizing highly
attentive, friendly service by closely supervising the restaurant's operations
and providing ongoing employee training and support. The Blini Hut restaurant is
open six days a week.
PRINCIPAL MARKETS AND PRODUCTS
The principal market at this time is proposed to be in the New York
Metropolitan area. The products are Eastern/European foods which will be sold
through fast food restaurants. The Company has no existing commitments related
to opening additional new restaurants nor has the Company sought to market its
proposed business to potential franchisees at this time.
METHODS OF DISTRIBUTION
The Company proposes to expand through the development of company-owned
stores and franchising in ethnic quick serve restaurants.
MENU
Blini Hut's menu features a well-rounded selection of high-quality
Eastern/European dishes. The Company's goal is to be known for its excellent
selection of ethnic dishes including, but not limited to, Chicken "Kiev,"
Chicken "Pojarskey," Salmon "Pojarskey," "Borscht," Russian teas and the
infamous "Blini." The restaurant's menu also includes a variety of breakfast
dishes, snacks, appetizers, authentic soups and beverages.
RESTAURANT LOCATIONS
The following table sets forth the location, month and year of opening and
approximate square footage of the Company's operating restaurant:
<TABLE>
<CAPTION>
LOCATION DATE OPENED APPROX. SQ. FT.
<S> <C> <C>
132 Nassau Street January 2000 1,800
New York, New York 10038
</TABLE>
MARKETING
Management has focused on providing its customers with superior quality,
service and perceived value in a distinctive atmosphere. The Company does not
currently have a budget for marketing the restaurant. Thus, the Company
presently relies primarily on customer satisfaction
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and word-of mouth to obtain repeat customers and attract new clientele. In an
effort to promote the restaurant, the Company placed limited advertisements on
Russian television and radio.
The Company also, as a means of advertising, established a web-site,
www.blinihut.com, in January 2000. The Company anticipates using the site to
provide patrons and stockholders with Company stock quotes, press and news
releases, corporate filing information, promotional materials and coupons,
wholesale online ordering, a description of the food sold at the restaurant and
a listing of food producers, a free Blini Hut cook book, and advertising space
for noncompeting companies.
RESTAURANT OPERATIONS AND MANAGEMENT
The restaurant employs one manager, one assistant manager and approximately
ten hourly employees. The Company required its manager to participate in a
training program which emphasized the Company's operating strategy, procedures
and standards.
The executive management of the Company daily visits the restaurant to
ensure that the Company's concept, strategy and standards of quality are being
adhered to in all aspects of restaurant operations. The Company's executive
management has developed the restaurants' operation and management systems based
upon their prior experience in the food services industry.
PURCHASING AND SUPPLIERS
The Company is supplied by food wholesalers through-out the continental
United States and Canada. The Company, through its Commissary kitchen,
negotiates directly with suppliers for food and beverage products to ensure
consistent quality and freshness of products and to obtain competitive prices.
Food and supplies are shipped directly to the Commissary kitchen where the food
is pre-cooked, packaged, stored and then shipped to the Company's restaurant.
All shipments of food and beverage are inspected for quality and freshness upon
receipt.
ACCOUNTING AND MANAGEMENT INFORMATION SYSTEMS
The Company does not maintain an in-store computer based management system.
However, the Company monitors the sale, labor and food cost of its restaurant,
including average customer check, customer count, and a breakdown of sales
between breakfast, lunch and dinner through the use of a cash register system.
This system allows management to, on a daily basis, evaluate trends in sales,
labor, and food costs.
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COMPETITION
The market for the establishment of specialty Eastern/European food is
expanding. The Company, however, has no knowledge of any other fast food
restaurant who specializes in Eastern/European fast food dishes. The Company
anticipates, however, that it will be at a disadvantage with other companies,
when established, having larger technical staffs and greater financial and
operational resources than the Company. There can be no assurance that the
Company will be able to successfully compete.
GOVERNMENT REGULATIONS
The Company's restaurant is subject to numerous federal, state and local
laws affecting health, sanitation and safety standards. The Company has food
service licenses from local health authority. The Company's restaurant operation
is also subject to federal and state minimum wage law governing such matters as
working conditions, overtime, and other employee matter.
SEASONALITY
The Company is not measurably affected by a seasonal trend.
EMPLOYEES
The Company has approximately 30 employees at this time. The Company has
one restaurant manager, one assistant manager, ten hourly restaurant employees,
nineteen Commissary kitchen staff. None of the Company's employees is covered by
a collective bargaining agreement. The Company considers its employee relations
to be good.
The Company anticipates opening four restaurants during mid-2001 and
expects that it will require eight to ten employees per restaurant. There is no
guarantee that the Company will successfully open these restaurants, however,
because the Company presently does not have sufficient capital. The Company
anticipates raising capital for its restaurant operations through public and /or
private financing either through stock offerings or loans from private
individuals.
ITEM 2 DESCRIPTION OF PROPERTY
The Company' restaurant is located at 132 Nassau Street, New York, New York
10038, Telephone No. (212) 233-3500, Fax No. (212) 233 2332. The space averages
approximately 1,800 square feet. The lease agreement is for a term of ten years.
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The Company's executive office and Commissary kitchen are located at 47-39
49th Street Woodside, New York 11377, Telephone No. (718) 784-3344, (877)
44-Blini, Fax No. (718) 433-4072.
ITEM 3 LEGAL PROCEEDINGS
The Company is not party to any material pending legal proceedings and, to
the best of its knowledge, no such action by or against the Company has been
threatened. None of the Company's officers, directors or beneficial owners of 5%
or more of the Company's outstanding securities is a party adverse to the
Company nor do any of the foregoing individuals have a material interest adverse
to the Company.
ITEM 4 SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not applicable.
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PART II
ITEM 5 MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
MARKET INFORMATION
The Company's common stock is traded on the Pink Sheet under the symbol
"BHUT." The 52-week high is 6-1/2 and the 52-week low is 4-3/4. The approximate
last 90 day period from October, 1999 to December 31, 1999 has a high of 6-1/2
and a low of 4-3/4.
HOLDERS
The Company's transfer agent, First American Stock Transfer, confirms that
as of December 31, 1999, there are approximately 300 shareholders of record for
the Company, including those shares held in street name.
DIVIDENDS
The payment by the Company of dividends, if any in the future, rests within
the discretion of its Board of Directors and will depend, among other things,
upon the Company's earnings , its capital requirements and its financial
condition, as well as other relevant factors. The Company has not paid or
declared any dividends to date due to its present financial status.
RECENT SALES OF UNREGISTERED SECURITIES; USE OF PROCEEDS FROM REGISTERED
SECURITIES
On March 25, 1999, the Company sold three million shares of common stock to
approximately thirty shareholders at $.03 per share, pursuant to an Offering
Memorandum dated March 25, 1999. The shares were offered pursuant to an
exemption from Registration under Regulation D Rule 504.
The following is a list of shareholders who purchased in this offering:
<TABLE>
<CAPTION>
Shareholder Date Type of Security Number of Shares
- - ----------- ---- ---------------- ----------------
<S> <C> <C> <C>
Alexandre Bardeev 4/6/99 Common Stock 76,666
Natalia Belogourova 4/6/99 Common Stock 103,333
</TABLE>
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<TABLE>
<S> <C> <C> <C>
Nataliy Bobkova 4/6/99 Common Stock 70,000
Lidiy Butova 4/6/99 Common Stock 42,667
Dana Fedrova 4/6/99 Common Stock 33,333
Nataliya Gerasina 4/6/99 Common Stock 60,000
Tanya Gerosimeko 4/6/99 Common Stock 53,333
Irina Goncharova 4/6/99 Common Stock 116,667
Vadim Gratchev 4/6/99 Common Stock 16,666
Tamara Gratcheva 4/6/99 Common Stock 116,000
Andrey Kagramanov 4/6/99 Common Stock 100,000
Andrey Kuvichinsky 4/6/99 Common Stock 93,333
Maria Kuznetsova 4/6/99 Common Stock 65,666
Tatiana Lapina 4/6/99 Common Stock 116,667
Maxim Lavrov 4/6/99 Common Stock 38,333
Dimitry Nazarov 4/6/99 Common Stock 63,333
Alexandr Obukov 4/6/99 Common Stock 96,666
Margo Petrunina 4/6/99 Common Stock 53,333
Galina Ratner 4/6/99 Common Stock 63,666
Mark Ratner 4/6/99 Common Stock 70,000
Irina Romanova 4/6/99 Common Stock 83,333
Kapitolina Smirnova 4/6/99 Common Stock 75,000
Max Tanner 4/6/99 Common Stock 495,000
Viarkov Valerity 4/6/99 Common Stock 80,000
Ivanov Viatchesiav 4/6/99 Common Stock 79,000
Total Number of Investors: 25
</TABLE>
On September 1, 1997, the Company sold Kristine Gornichec 50,000 shares of
common stock at $.01 per share pursuant to an exemption from Registration under
Section 4 (2) of the
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Securities Act of 1933. After taking into account a 1 for 10 reverse stock split
on April 10, 1998, these 50,000 shares are currently only 5,000 shares.
In January 2000, the Company and a private investor entered into a stock
subscription agreement whereby the investor will purchase 235, 294 restricted
shares of the Company's $.01 par value common stock for a total of $1,000,000 or
approximately $4.25 per share. In January, the Company received the initial
deposit of $100,000 required by the agreement. The balance is due in December,
2000. If the agreement is not consummated, the Company retains the initial
$100,000 deposit. The common shares sold will be held in escrow until the
transaction is closed upon the receipt of the additional $900,000 due the
Company.
ITEM 6 MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
GENERAL
Blini Hut, Inc., formerly Bargain Products, Inc., was organized as a Nevada
corporation on April 6, 1995. The Company was engaged in the business of selling
low cost consumer products at the retail level through its wholly owned
subsidiary of Dollar Mania from June 1995 through September 1996. The Company
has been inactive without operations since September 1996. On May 18, 1999, the
Company changed its name to Blini Hut, Inc., and now intends to engage in the
marketing and distribution of various Eastern/European specialty food through
fast food restaurants. On December 2, 1999 the Company and Troika Food, Inc., a
Delaware Corporation ("Troika"), consummated an agreement making Troika a
wholly-owned subsidiary of the Company.
ACQUISITION
On April 10, 1999, the Company entered into an agreement with the
shareholders of Troika to issue them 6,000,000 shares of common stock in
exchange for all the outstanding shares of common stock of Troika. The
shareholders of Troika were Russian Chef, Inc., Simon Kublanov, President and
Director of the Company and Leonid Kuvykin, Vice President, Secretary and
Treasurer of the Company. This agreement was consummated on December 2, 1999.
The Blini Hut/Troika acquisition was negotiated by the shareholders and
management of Blini Hut and Troika, respectively. The consideration issued was
negotiated by the above parties based upon an arrangement whereby six Bargain
Products shares were to be issued for each of the Troika shares. The Troika
shares were valued higher based on the management expertise of Troika in the
Eastern/European fast food business.
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The principal shareholders of Troika were Russian Chef, Inc., Simon
Kublanov owning 300,000 shares and Leonid Kuvykin, owning 700,000 shares. At the
consummation of the agreement, Simon Kublanov owned 270,000 shares in the
Company, Leonid Kuvykin 630,000 and Russian Chef Inc., 5,100,000 respectively.
Blini Hut has not had any revenues from operations in each of the last two
fiscal years. Presently, the Company has one restaurant in operation and
anticipates opening four restaurants during mid-2001, at a cost of approximately
$200,000 per restaurant, which amount is anticipated to be expended in the
following manner:
<TABLE>
<S> <C>
Initial Lease Payments(1) ........ $ 40,000
(including 3 mo. security deposit)
Leasehold Improvements ........... 50,000
Equipment ........................ 80,000
Inventory ........................ 10,000
Advertising/Promotions ........... 20,000
--------
TOTAL $200,000
</TABLE>
The cost of opening a restaurant may vary depending on location, price of rent,
condition of structure, and existing equipment. Although one restaurant is
currently operational, the Company does not have sufficient capital at this time
to open any additional restaurants, but anticipates raising capital for its
restaurant operations through public and/or private financing either through
stock offerings or loans from private parties. There is no assurance that the
Company will be successful in raising capital for its additional restaurant
operations. The Company may also consider leasing its restaurant equipment. The
Company may also consider acquiring other quick-serve operations and covert them
to Eastern/European fast food speciality restaurants. Acquisitions may be made
through a combination of stock and cash. The Company has no agreements to
acquire other quick-serve restaurants at this time.
ITEM 7 FINANCIAL STATEMENTS
The information required by this item is incorporated by reference to the
financial statements set forth on pages F-1 through F-15.
- - --------
(1) Since the Company's anticipates opening restaurants in the New York
metropolitan area, the figure stated for initial lease payment is subject to
change based on the real estate market.
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ITEM 8 CHANGES IN AND DISAGREEMENT WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE
On November 12, 1999 and December 20, 1999, respectively, the Company filed
a Form 8-K with the Securities and Exchange Commission reporting the dismissal
of its former Independent Accountant, David Coffey, C.P.A. of Las Vegas, Nevada,
and retained a new Independent Accountant, Phil Kempisty, C.P.A. of New York,
New York on January 18, 2000. The decision to change independent accountants was
approved by the Board and shareholders of Blini Hut. The reports of David
Coffey, C.P.A. on the financial statements for the past two fiscal years
contained no adverse opinion or disclaimer of opinion and were not modified as
to uncertainty, audit scope or accounting principles. In connection with its
audits for the two most recent fiscal years and through January 14, 1999, there
have been no disagreements with David Coffey, C.P.A. on any matter of accounting
principles or practices, financial statement disclosure, or auditing scope or
procedure, which disagreements, if not resolved to the satisfaction of David
Coffey, C.P.A., would have caused them to make reference thereto in their report
on the financial statements for such years.
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PART III
ITEM 9 DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE
WITH SECTION 16 (A) OF THE EXCHANGE ACT.
The following table sets forth certain information with respect to each of
the Directors, Executive Officers of the Company, their ages, and all positions
with the Company.
<TABLE>
<CAPTION>
NAME AGE POSITION
- - ---- --- --------
<S> <C> <C>
Simon Kublanov 58 President & Director
40 Newport Parkway
Jersey City, New Jersey 07310
Leonid Kuvykin 49 Vice President/Secretary/Treasurer
1222 Avenue Y
Brooklyn, NY 11235
</TABLE>
Simon Kublanov, age 59, is President and Director of the Company. Mr.
Kublanov obtained a B.S. degree in economics and in Russian cuisine from the
University of Food Industry and Trade, St. Petersburg, Russia, in 1962. From
1993 to present, Mr. Kublanov was the founder of Da Pie, Russian Chief, and
Rush'n Express all of which have focused on Russian fast food. From 1984 to
1987, Mr. Kublanov founded "k's Fried Chicken." From 1962 to 1984 Mr. Kublanov
worked in a number of restaurants both in the U.S. and Russia in management and
chef capacities.
Leonid Kuvykin, age 49, is Vice President, Secretary and Treasurer of the
Company. Mr. Kuvykin received a B.S. in business administration and an
associates degree in Economics from the college of trade and marketing, Ukraine.
From October of 1997 to the present, Mr. Kuvykin also serves as a member of the
board to Russian Chef, Inc. Mr. Kuvykin from 1979 until 1987 has been involved
with several transportation businesses most of which were franchise based. In
1979, Mr. Kuvykin immigrated to the United States from Odessa, Ukraine where
from 1971 until 1978 he held several management positions in government owned
food businesses.
Effective December 10, 1999 Mont Tanner resigned as President and Director
of the Company. On the same, Simon Kublanov was elected President of the Company
by the Sole Director, and Leonid Kuvykin was elected Vice
President/Secretary/Treasurer by the Sole Director.
FAMILY RELATIONSHIPS
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Not applicable.
INVOLVEMENT IN CERTAIN LEGAL PROCEEDINGS
To the best of management's knowledge, during the past five years, no
present or former director or executive officer of the Company;
(1) Has filed a petition under federal bankruptcy laws or any state
insolvency law, had a receiver, fiscal agent or similar officer appointed by a
court for the business or property of such person, or any partnership in which
he was a general partner at or within two years before the time of such filing,
or any corporation or business association of which he was an executive officer
at or within two years before the time of such filing;
(2) Was convicted in a criminal proceeding or named the subject of a
pending criminal proceeding (excluding traffic violations and other minor
offences);
(3) Was the subject of any order judgment or decree, not subsequently
reversed, suspended or vacated, of any court of competent jurisdiction,
permanently or temporarily enjoining him from otherwise limiting his involvement
in any type of business, securities or banking activities; or
(4) Was found by a court of competent jurisdiction in a civil
action, by the Securities and Exchange Commodity Futures Trading Commission to
have violated any federal or state securities law.
ITEM 10 EXECUTIVE COMPENSATION
Any compensation received by officers or directors of the Company will be
determined from time to time by the Board of Directors.
<TABLE>
<CAPTION>
NAME AND PRINCIPAL POSITION ALL OTHER COMPENSATION YEAR
- - --------------------------- ---------------------- ----
<S> <C> <C>
Simon Kublanov 0 1999
Leonid Kuvykin 0 1999
</TABLE>
OPTION/SAR GRANTS
None.
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AGGREGATE OPTIONS/SAR EXERCISES AND
FISCAL YEAR END OPTION/SAR VALUE TABLE
None.
LONG TERM INCENTIVE PLANS
None.
COMPENSATION OF DIRECTORS
None.
EMPLOYMENT CONTRACTS AND TERMINATION OF EMPLOYMENT
AND CHANGE OF CONTROL ARRANGEMENTS
Effective December 10, 1999 Mont Tanner resigned as President and Director
of the Company. On the same, Simon Kublanov was elected President of the Company
by the Sole Director, and Leonid Kuvykin was elected Vice
President/Secretary/Treasurer by the Sole Director.
ITEM 11 SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of March 30, 2000, the outstanding
shares of common stock of the Company owned of record, or beneficially by each
person who owned of record, or was known by the Company to own beneficially,
more than 5% of the Company's common stock, and the name and share holding of
each officer and director and all officers and directors as a group.
<TABLE>
<CAPTION>
TITLE OF NAME & ADDRESS AMOUNT & NATURE PERCENTAGE
CLASS OF BENEFICIAL OF BENEFICIAL OF CLASS
OWNER OWNER
<S> <C> <C> <C>
Common Russian Chef Inc. (1) 5,200,000 56%
Common Leonid Kuvykin 630,000 7%
</TABLE>
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<TABLE>
<S> <C> <C> <C>
Common Simon Kublanov 270,000 3%
</TABLE>
- - -------------------------------------------------
(1) Represents shares held by Russian Chef Inc. of which Mr. Kublanov is
President and owner along with Mr. Kuvykin of 100% of the shares in the
corporation.
ITEM 12 CERTAIN RELATIONSHIP AND RELATED TRANSACTIONS
The Company had retained one of the shareholders as legal counsel in
connection with the preparation of the offering memorandum for the May, 1995
securities offering and paid him $24,000 for those services and $5,000 for other
legal services rendered to the Company.
The Company had also retained one of its shareholders as legal counsel in
connection with the ongoing legal services required by the Company. The total
amount due for those services was $21,561 for the years 1995 and 1996. In
December of 1996, the Company issued to its shareholder 1,000,000 shares of
common stock as payment for those services. Those services were valued at
$.021561 per share or $21,561.
Additionally, the Company retained one of its shareholders as legal counsel
in connection with a proposed securities offering and other legal matters during
1998. The proposed securities offering was abandoned. The legal fees incurred by
the Company of $49,500 for preparation of the offering memorandum and other
legal services was paid by issuing 495,000 shares of its common stock for these
services which were valued at $.10 per share or $49,500.
The Company will attempt to resolve any such conflicts of interest in favor
of the Company. An attempt will be made to resolve any conflicts by bringing
such conflicts to the attention of independent board members or advisors. In
addition, any such conflicts may be raised at any annual or special meeting of
the Shareholders.
The officers and directors of the Company are accountable to it and its
shareholders as fiduciaries, which requires that such officers and directors
exercise good faith and integrity in handling the Company's affairs. A
Shareholder may be able to institute legal action on behalf of the Company or on
behalf of itself 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 the Company.
TRANSACTIONS BETWEEN THE COMPANY AND MANAGEMENT
None.
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ITEM 13 EXHIBITS AND REPORTS ON FORM 8-K
TO BE FILED BY AMENDMENT
(a) Exhibits:
<TABLE>
<S> <C>
3.0* Certificate of Incorporation of Bargain Products,
Incorporated consisting of Articles of Incorporation
filed with the Secretary of State of the State of
Nevada on April 6, 1995, filed with the SEC in Form
10SB12G/A - Amended Registration Statement.
3.1* Bylaws of Bargain Products, Incorporated, dated April
6, 1995 filed with the SEC in Form 10SB12G/A - Amended
Registration Statement.
3.2* Amendment to the Articles of Incorporation, dated July
15, 1997.
3.3* Amendment to the Articles of Incorporation, dated April
16, 1998.
3.4* Amendment to the Articles of Incorporation, dated May
11, 1999.
4.0* Common Stock certificate, filed with the SEC in Form
10SB12G/A - Amended Registration Statement.
10.0* Stock for Stock Agreement between Troika Food, Inc. &
Blini Hut, Inc.
10.1 Lease Agreement dated January 5, 1999 between 47-39 th
Realty Inc. and Troika Food, Inc.
10.2 Lease Agreement dated October 5, 1999 between J.W.
Realty Company and Russian Chef, Inc.
16.0* Letter on change in certifying accountant
23.0 Consent of experts and counsel
27.0 Financial Data Schedule for the period ending December
31, 1999 (shall be filed by electronic filer only)
</TABLE>
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<TABLE>
<S> <C>
* Incorporated by reference to the Company's Amended
Registration Statement on Form 10SB12G/A as filed with
the Securities and Exchange Commission on November 12,
1999.
</TABLE>
(b) Reports on Form 8-K:
A Form 8-K was filed with the Securities and Exchange Commission on
December 10, 1999. The Items reported were:
Item 1. Change in Control of Registrant
Item 2. Acquisition of Assets
Item 6. Resignation of President/Director - New Election
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SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the registrant
caused this Report to be signed on its behalf by the undersigned, thereunto duly
authorized.
BLINI HUT, INC.
Dated: April 14, 2000 BY: /s/ illegible
------------------------------
Treasurer
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In accordance with the Exchange Act, this Report has been signed below by
the following persons on behalf of the Registrant and in the capacities and on
the dates indicated:
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- - --------- ----- ----
<S> <C> <C>
/s/ Simon Kublanov President & Director 04/15/00
- - ---------------------------
Simon Kublanov
/s/ Leonid Kuvykin Vice President/Secretary 04/15/00
- - ---------------------------
Leonid Kuvykin
</TABLE>
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BLINI HUT, INC.
INDEX
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
INDEPENDENT AUDITORS' REPORT F2
BALANCE SHEETS F3
STATEMENTS OF OPERATIONS F4
STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY F5
STATEMENTS OF CASH FLOWS F6-F7
NOTES TO FINANCIAL STATEMENTS F8-F15
</TABLE>
F1
<PAGE> 22
[KEMPISTY & COMPANY LETTERHEAD]
INDEPENDENT AUDITORS' REPORT
The Board of Directors
Blini Hut, Inc.
We have audited the consolidated balance sheets of Blini Hut, Inc. as of
December 31, 1999 and 1998 and the related statements of operations,
shareholders' equity and cash flows for the years then ended. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these finnancial statements based on
our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Blini Hut, Inc. as of December
31, 1999 and 1998 and the results of its' operations and cash flows for the
years then ended 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 11 conditions
exist which raise substantial doubt about the Company's ability to continue as a
going concern unless it is able to generate sufficient cash flows to meet its
obligations and sustain its operations. Management's plan regarding these
matters is also described in Note 11. The financial statements do not include
any adjustments that might result from the outcome of this uncertainty.
/s/ Kempisty & Company CPA PC
Kempisty & Company
Certified Public Accountants PC
New York, New York
March 30, 2000
F2
<PAGE> 23
BLINI HUT, INC.
BALANCE SHEETS
<TABLE>
<CAPTION>
December 31, December 31,
1999 1998
<S> <C> <C>
ASSETS
Current Assets
Cash $ 3,896 $ 7,540
Accounts receivable (Note 4) 45,000 4,613
Inventory (Note 5) 30,000 20,000
Total Current Assets 78,896 32,153
Plant Property and Equipment-at cost 314,063 285,203
Less: Accumulated Depreciation (Note 6) 97,416 56,924
216,647 228,279
Other Assets
Security deposit 49,660 784
TOTAL ASSETS $ 345,203 $ 261,216
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
8% Demand note payable $ 50,000 $ --
Current portion of equipment loan (Note 7) 2,918 2,438
Current portion of capital leases payable 21,842 9,404
Accounts payable and accrued expenses 80,175 27,092
Payroll tax payable 2,095 3,701
Total Current Liabilities 157,030 42,635
Commitments and contingencies (Note 10) -- --
Long Term Liabilities
Equipment loan less current portion (Note 7) 6,282 9,200
Capitalized leases less current portion 25,786 16,847
TOTAL LIABILITIES 189,098 68,682
Stockholders' Equity
Capital stock (10,000,000 shares authorized, $0.01 par value,
9,508,461 and 508,461 issued and outstanding,
respectively) (Note 9) 95,085 5,085
Capital in excess of par value 773,288 603,488
Deficit (712,268) (416,039)
Total Stockholders' Equity 156,105 192,534
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 345,203 $ 261,216
</TABLE>
See Notes to Financial Statements.
F3
<PAGE> 24
BLINI HUT, INC.
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
For the Year Ended
December 31,
1999 1998
<S> <C> <C>
Sales revenues $ 674,094 $ 452,586
Cost of sales 529,843 199,590
---------- ----------
Gross profit 144,251 252,996
General selling and administrative expenses 440,480 353,053
---------- ----------
Loss from operations (296,229) (100,057)
Other income and expenses -- --
Loss before income tax (296,229) (100,057)
---------- ----------
Provision for income tax (Note 8) -- --
========== ==========
Net loss $ (296,229) $ (100,057)
Basic and diluted loss per common share $ (0.09) $ (0.41)
========== ==========
Basic and diluted weighted average shares outstanding 3,294,762 242,653
========== ==========
</TABLE>
See Notes to Financial Statements.
F4
<PAGE> 25
BLINI HUT, INC.
STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
Common Stock Capital In
($0.01) Par Value Excess Of
Shares Amount Par Value Deficit Total
------ ------ --------- ------- -----
<S> <C> <C> <C> <C> <C>
Balance January 1, 1998 13,461 $ 135 $ 558,938 $(315,982) $ 243,091
Shares issued for legal
services to Related Party 495,000 4,950 44,550 -- 49,500
Loss for year ended
December 31, 1998 -- -- -- (100,057) (100,057)
--------- --------- --------- --------- ---------
Balance December 31, 1998 508,461 5,085 603,488 (416,039) 192,534
Sale of common stock 3,000,000 30,000 60,000 -- 90,000
Offering cost -- -- (10,200) -- (10,200)
Shares issued for merger with
Troika Food, Inc. 6,000,000 60,000 120,000 -- 180,000
Loss for year ended
December 31, 1999 -- -- -- (296,229) (296,229)
--------- --------- --------- --------- ---------
Balance December 31, 1999 9,508,461 $ 95,085 $ 773,288 $(712,268) $ 156,105
========= ========= ========= ========= =========
</TABLE>
See Notes to Financial Statements.
F5
<PAGE> 26
BLINI HUT, INC.
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
For the Year Ended
December 31,
1999 1998
<S> <C> <C>
Operating Activities
Net (loss) $(296,229) $(100,057)
Adjustments to reconcile net loss
to net cash provided (used) by operating activities:
Depreciation and amortization 40,492 36,499
Expenses not requiring the use of cash 168,605 10,863
Common stock issued for services-related party -- 49,500
(Increase) decrease in accounts receivable (40,387) 6,595
(Increase) in inventory (10,000) (5,000)
Increase in accounts payable and accruals 51,477 7,765
--------- ---------
Net cash provided (used) by operating activities (86,042) 6,165
Investing Activities
Purchase of fixed assets (28,860) (27,056)
(Increase) in security deposits (48,876) (784)
--------- ---------
Net cash (used) by investing activities (77,736) (27,840)
Financing Activities
Increase in capitalized leases 28,860 26,936
Sale of common stock 90,000 --
Increase in demand notes payable 50,000 --
(Payment) for equipment loans (2,438) (2,036)
(Payment) for capitalized leases (6,288) (685)
--------- ---------
Net cash provided by financing activities 160,134 24,215
--------- ---------
Increase (decrease) in cash (3,644) 2,540
Cash at beginning of period 7,540 5,000
--------- ---------
Cash at end of period $ 3,896 $ 7,540
========= =========
Supplemental Disclosures of Cash Flow Information:
Cash paid during year for:
Interest $ 10,569 $ 3,045
========= =========
Income taxes $ 2,073 $ --
========= =========
</TABLE>
See Notes to Financial Statements.
F6
<PAGE> 27
BLINI HUT, INC.
STATEMENTS OF CASH FLOWS (continued)
<TABLE>
<CAPTION>
For the Year Ended
December 31,
1999 1998
<S> <C> <C>
Supplemental Disclosures of Cash Flow Information
Non-cash investing and financing activities:
Issuance of common stock to a shareholder
for legal services $ -- $ 49,500
Issuance of common stock for Troika Food, Inc. $180,000 $ --
</TABLE>
See Notes to Financial Statements.
F7
<PAGE> 28
BLINI HUT, INC.
NOTES TO FINANCIAL STATEMENTS
December 31, 1999 and 1998
Note 1- ORGANIZATION AND OPERATIONS
The Company was incorporated as Bargain Products, Inc. in the State of
Nevada on April 6, 1995. The Company was engaged in the business of
selling low cost consumer products at the retail level through a wholly
owned subsidiary until September, 1996. On March 28, 1996 the wholly
owned subsidiary filed for the protection of Chapter 11 of the
Bankruptcy Code. In September, 1996 the Company spun off its wholly
owned subsidiary to the wholly owned subsidiary's creditors as part of
the bankruptcy settlement.
On May 18, 1999 the Company changed its name to Blini Hut, Inc.
On December 2, 1999 the Company merged with Troika Food, Inc. ("Troika")
in exchange for 6,000,000 shares of the Company's common stock.
Troika Food, Inc. operates a wholesale Eastern European food preparation
business selling to gourmet food stores and delicatessens.
In January, 2000 the Company opened a quick serve restaurant to sell its
Eastern European foods.
Note 2- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The consolidated financial statements include the accounts of the
Company and its subsidiary, Troika Food, Inc. All significant
intercompany transactions and balances have been eliminated in
consolidation.
For accounting purposes, the acquisition has been treated as an
acquisition of the Company by Troika and as a recapitalization of
Troika. The historical financial statements prior to December 2, 1999
are those of Troika giving effect to the acquisition as if the
acquisition took place on May 1, 1997.
Revenue Recognition
Revenues are recorded at the time of shipment of products or performance
of services.
Reverse Stock Split
The Company's Board of Directors effected a 1 for 10 reverse stock split
of its common stock $0.01 par value on April 10, 1998. All shares and
per share amounts in the accompanying financial statements have been
retroactively adjusted to reflect the stock splits.
F8
<PAGE> 29
BLINI HUT, INC.
NOTES TO FINANCIAL STATEMENTS
December 31, 1999 and 1998
Note 2- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Cash and Cash Equivalents
For purposes of the statement of cash flows, the Company considers all
highly liquid investments with a maturity of three months or less at
acquisition to be cash equivalents.
Inventories
Inventories are stated at the lower of cost determined by the FIFO
method, or market.
Depreciation and Amortization
The cost of furniture and equipment and capitalized leased assets is
depreciated over the estimated useful lives of the related assets. The
cost of leasehold improvements is amortized over the lesser of the
length of the related lease (10 years) or the estimated useful life of
the assets. Depreciation is computed on a straight line basis (7 years)
for financial reporting purposes and on an accelerated basis for income
tax purposes. For income tax purposes, leasehold improvements are
amortized in accordance with Internal Revenue Service regulations.
Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires the Company's 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 revenue and
expenses during the reporting period. Actual results could differ from
those estimates.
Fair Value of Financial Instruments
Cash and cash equivalents, accounts receivable, demand notes payable,
accounts payable and accrued liabilities are reflected in the financial
statements at fair value because of the short-term maturity of these
instruments.
Comprehensive Income
Effective January 1, 1998 the Company adopted Statement of Financial
Accounting Standards No. 130, "Reporting Comprehensive Income" ("SFAS
No. 130"). SFAS No. 130 requires an entity to report comprehensive
income and its components and increases financial reporting disclosures.
This standard has no impact on the Company's financial position, cash
flows or results of operations since the Company's comprehensive income
is the same as its reported net income for 1999 and 1998.
F9
<PAGE> 30
BLINI HUT, INC.
NOTES TO FINANCIAL STATEMENTS
December 31, 1999 and 1998
Note 2- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Income Taxes
The Company previously adopted Statement of Financial Accounting
Standards No. 109, "Accounting for Income Taxes", ("SFAS No.109") which
requires the asset and liability method of accounting for income taxes.
Enacted statutory tax rates are applied to temporary differences arising
from the differences in financial statement carrying amounts and the tax
basis of existing assets and liabilities. Due to the uncertainty of the
realization of income tax benefits, (Note 8), the adoption of SFAS No.
109 had no effect on the financial statements of the Company.
Concentration of Credit Risk
Financial instruments that potentially subject the Company to
concentration of credit risk consist primarily of cash and cash
equivalents, most of which are maintained in high-quality financial
institutions. The Company extends credit to various customers and
establishes an allowance for doubtful accounts for specific customers
that it determines to have significant credit risk. The Company provides
allowances for potential credit losses when necessary.
Net (Loss) Per Share
During 1998 the Company adopted SFAS No. 128, "Earnings Per Share",
which requires the reporting of both basic and diluted earnings per
share. Net income per share-basic is computed by dividing income
available to common shareholders by the weighted average number of
common shares outstanding for the period. Fully diluted loss per share
has not been disclosed as it is anti-dilutive. The weighted average
number of common shares outstanding used in the computation of net loss
per share has been adjusted to give effect for the 1 for 10 reverse
stock split of April 10, 1998.
Note 3- RELATED PARTY TRANSACTIONS
The Company rents space from a corporation owned by the officers of the
Company. The rent was $102,000 for 1999 and $102,000 for 1998.
In 1998, the Company issued 495,000 shares of its common stock $0.01 par
value per share for legal services to a shareholder. The value of the
common stock issued was $49,500.
In 1999, the Company paid $35,200 to a shareholder for legal services of
which $10,200 was charged to offering cost which is a reduction of
capital in excess of par value.
F10
<PAGE> 31
BLINI HUT, INC.
NOTES TO FINANCIAL STATEMENTS
December 31, 1999 and 1998
Note 4- ACCOUNTS RECEIVABLE
<TABLE>
<CAPTION>
December 31,
1999 1998
---- ----
<S> <C> <C>
Trade receivables $47,647 $ 4,613
Less allowance for uncollectable accounts 2,647 --
------- -------
$45,000 $ 4,613
======= =======
</TABLE>
Note 5- INVENTORY
<TABLE>
<CAPTION>
December 31,
1999 1998
---- ----
<S> <C> <C>
Work in progress $ -- $ --
Raw materials 6,409 4,145
Finished goods 36,295 24,425
-------- --------
42,704 28,570
Provision for obsolete inventory (12,704) (8,570)
-------- --------
$ 30,000 $ 20,000
======== ========
</TABLE>
Note 6- PROPERTY AND EQUIPMENT
Equipment and leasehold consists of the following:
<TABLE>
<CAPTION>
December 31,
1999 1998
---- ----
<S> <C> <C>
Equipment $181,738 $181,738
Capitalized leases 55,916 27,056
Leasehold improvements 76,409 76,409
-------- --------
314,063 285,203
-------- --------
</TABLE>
Less: Accumulated depreciation and amortization:
<TABLE>
<S> <C> <C>
Equipment 70,457 43,531
Capitalized leases 7,859 1,933
Leasehold improvements 19,100 11,460
-------- --------
97,416 56,924
-------- --------
$216,647 $228,279
======== ========
</TABLE>
Note 7- EQUIPMENT LOANS - LONG TERM
Long term debt consists of the following:
<TABLE>
<CAPTION>
December 31,
1999
----
<S> <C>
Installment loan $ 9,200
Less current portion 2,918
--------
$ 6,282
========
</TABLE>
F11
<PAGE> 32
BLINI HUT, INC.
NOTES TO FINANCIAL STATEMENTS
December 31, 1999 and 1998
Note 7- EQUIPMENT LOAN - LONG TERM (continued)
The installment loan payable to a finance company is secured by
equipment and is payable in monthly installments of $360, which include
principal and interest through September 2004. The interest rate on the
loan is 17.4%.
As of December 31, 1999 the maturities for long term debt are as
follows:
<TABLE>
<CAPTION>
Year Amount
---- ------
<S> <C>
2000 $ 2,918
2001 3,492
2002 2,790
-------
$ 9,200
=======
</TABLE>
Note 8- INCOME TAXES
The provision (benefit) for income taxes consists of the following:
<TABLE>
<CAPTION>
Year ended December 31,
1999 1998
---- ----
<S> <C> <C>
Current:
Federal tax expense $(56,800) $(11,600)
State tax expense (8,400) (1,700)
Deferred:
Federal tax expense 56,800 11,600
State tax expense 8,400 1,700
-------- --------
$ 0 $ 0
======== ========
</TABLE>
A reconciliation of differences between the statutory U.S. federal
income tax rate and the Company's effective tax rate are as follows:
<TABLE>
<CAPTION>
Year ended December 31,
1999 1998
---- ----
<S> <C> <C>
Statutory federal income tax 34% 34%
State income tax-net of federal benefit 5% 5%
Valuation allowance -39% -39%
--- ---
0% 0%
=== ===
</TABLE>
The components of deferred tax assets and liabilities were as follows:
<TABLE>
<CAPTION>
December 31,
1999 1998
---- ----
<S> <C> <C>
Deferred tax assets:
Net operating loss carryforward $ 55,400 $ 0
-------- --------
Total deferred tax assets 55,400 0
Valuation allowance (55,400) 0
-------- --------
Net deferred tax assets $ 0 $ 0
======== ========
</TABLE>
F12
<PAGE> 33
BLINI HUT, INC.
NOTES TO FINANCIAL STATEMENTS
December 31, 1999 and 1998
Note 8- INCOME TAXES (continued)
SFAS No. 109 requires a valuation allowance to be recorded when it is
more likely than not that some or all of the deferred tax assets will
not be realized. At December 31, 1999, a valuation allowance for the
full amount of the net deferred tax asset was recorded because of
continuing losses and uncertainties regarding the amount of taxable
income that would be generated in future years.
The Company recognized losses for the years December 31, 1999 and 1998.
The amount of available net operating loss carryforwards is
approximately $138,000 for 1999. If the net operating loss carryforwards
are not utilized, they will expire in the year 2014. The use of these
carryforwards is subject to limitations imposed by the Internal Revenue
Service in the event of a change in control of the Company.
Note 9- COMMON STOCK
On April 10, 1998, the Company effected a one for ten reverse stock
split of its $.001 par value common stock, decreasing the authorized
common stock from 10,000,000 shares, to 1,000,000 shares and changed the
par value of the common stock from $.001 per share to $.10 per share.
All references to number of shares, and to per share information in the
financial statements have been adjusted to reflect the stock split.
On May 2, 1998, the Company increased the authorized common stock $.10
par value to 10,000,000 shares. On March 24, 1999, the Company amended
its articles of incorporation to change the par value of its common
stock from $0.10 to $0.01 per share.
During 1998, the Company issued 495,000 shares of its common stock to a
shareholder for legal services in connection with the preparation of an
offering memorandum and other corporate matters. These shares were
valued at $.10 per share for a total of $49,500 that was charged to
operations.
On March 25, 1999, the Company sold to unrelated third parties, under
Rule 504 of the Securities and Exchange Act of 1933, as amended,
3,000,000 shares of $.01 par value common stock for $.03 per share for
net proceeds of $90,000. The Company paid $10,200 to a shareholder for
legal fee which was charged to Capital in excess of par as offering
cost.
On December 2, 1999, the Company exchanged 6,000,000 shares of its
common stock, $0.01 par value for 100% of the common stock of Troika
Food, Inc. The Company valued the 6,000,000 shares of its common stock
at $0.03 per share. Troika business assets and liabilities were recorded
at carryover basis except that equipment and leasehold improvements as
well as accumulated depreciation and amortization were restated. The
value of the common stock was based upon both current market prices at
the time the shares were issued and whether the shares were restricted.
(No discount for restricted common stock was taken).
F13
<PAGE> 34
BLINI HUT, INC.
NOTES TO FINANCIAL STATEMENTS
December 31, 1999 and 1998
Note 10- COMMITMENTS AND CONTINGENCIES
In 1998, the Company entered into a lease agreement with a related party
for office, warehouse and kitchen space which expires in the year 2004.
In addition in 1999 the Company entered into a store lease agreement
which expires in the year 2010. Rent expense for the Company for both
leases for 1999 and 1998 was approximately $110,000 and $102,000,
respectively.
The Company entered into capitalized leases in 1999 and 1998 which
require future minimum lease payments.
The remaining commitments under the operating and capitalized leases are
approximately as follows:
<TABLE>
<CAPTION>
Capitalized
Operating Equipment
Year Leases Leases
<S> <C> <C>
2000 $ 204,000 $ 10,000
2001 207,000 13,000
2002 210,000 13,000
2003 213,000 4,000
2004 220,000 2,000
Next five years 628,000 --
Balance to maturity 22,000 --
---------- ----------
$1,704,000 $ 42,000
========== ==========
</TABLE>
Note 11- GOING CONCERN MATTERS
The accompanying financial statements have been prepared on a going
concern basis, which contemplates the realization of assets and the
satisfaction of liabilities in the normal course of business. As shown
in the financial statements for the years ended December 31, 1999 and
1998, the Company incurred losses of $296,229 and $100,057,
respectively, and has not made a profit in any year since its inception.
These factors among others may indicate that the Company will be unable
to continue as a going concern for a reasonable period of time.
The financial statements do not include any adjustments relating to the
recoverability and classification of liabilities that might be necessary
should the Company be unable to continue as a going concern. The
Company's continuation as a going concern is dependent upon its ability
to generate sufficient cash flow to meet its obligations on a timely
basis and to obtain additional financing as may be required to
ultimately attain profitability. The Company is also actively pursuing
additional equity financing through stock sales. (See Note 12)
F14
<PAGE> 35
BLINI HUT, INC.
NOTES TO FINANCIAL STATEMENTS
December 31, 1999 and 1998
Note 12- SUBSEQUENT EVENTS
In January 2000, the Company and a private investor entered into a stock
subscription agreement whereby the investor will purchase 235,294
restricted shares of the Company's $.01 par value common stock for a
total of $1,000,000 or approximately $4.25 per share. In January, 2000
the Company received the initial deposit of $100,000 required by the
agreement. The balance is due in December, 2000. The common shares sold
will be held in escrow until the transaction is closed upon the receipt
of the additional $900,000 due the Company.
On January 24, 2000, the Company opened its first quick-serve
Eastern/European restaurant in New York City.
F15
