Attached files
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
______________________
FORM S-1/A2
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
______________________
DIXIE FOODS INTERNATIONAL, INC.
-------------------------------
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
______________________
FLORIDA 2030 80-0608195
------- ---- ----------
(STATE OR OTHER (PRIMARY STANDARD (IRS EMPLOYER
JURISDICTION OF INDUSTRIAL IDENTIFICATION
INCORPORATION OR CLASSIFICATION NUMBER)
ORGANIZATION) CODE NUMBER)
DIXIE FOODS INTERNATIONAL, INC.
115 N.E. 6TH BLVD
WILLISTON, FL 32696
800.366.5174
---------------------------------------------------
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
______________________
ROBERT E. JORDAN, PRESIDENT
DIXIE FOODS INTERNATIONAL, INC.
115 N.E. 6TH BLVD
WILLISTON, FL 32696
800.366.5174
---------------------------------------------------------
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF AGENT FOR SERVICE)
______________________
COPIES TO:
JOEL BERNSTEIN, ESQ.
2666 TIGERTAIL AVENUE, SUITE 104
MIAMI, FL 33133
305-409-4500
FAX: 786-513-8522
______________________
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after this registration statement becomes effective.
If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, as amended (the "Securities Act"), check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) 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(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. [ ]
Indicate by check mark whether the registrant is a large accelerated filer,
an accelerated filer, a non-accelerated filer, or a smaller reporting company.
See the definitions of "large accelerated filer," "accelerated filer" and
"smaller reporting company" in Rule 12b-2 of the Exchange Act. Rule 12b-2 of the
Exchange Act. (Check one):
Large accelerated filer [ ] Accelerated filer [ ]
Non-accelerated filer [ ] Smaller reporting company [X]
CALCULATION OF REGISTRATION FEE
--------------------------------------------------------------------------------
Proposed Proposed
Title of each class Amount of maximum maximum Amount of
of securities shares to be offer price aggregate registration
to be registered registered per unit (1) offering price fee
--------------------------------------------------------------------------------
SERIES A CONVERTIBLE 20,000 $15.00 $300,000 $21.39
PREFERRED STOCK
COMMON STOCK (2) 2,000,000 0 0 0(3)
--------------------------------------------------------------------------------
(1) Estimated solely for purposes of calculating the registration fee based upon
the proposed sale price of the shares.
(2) Represents the common stock issuable on the conversion of the Series A
Convertible Preferred Stock.
(3) No fee pursuant to Rule 457(i)
The Registrant hereby amends the 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 Acts of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8 (a),
may determine.
ii
The information in this prospectus is not complete and may be changed. We may
not sell these securities until the registration statement filed with the
Securities and Exchange Commission becomes effective. This prospectus is not an
offer to sell these securities and we are not soliciting an offer to buy these
securities in any jurisdiction where the offer or sale is not permitted.
Subject to Completion, dated __________
PROSPECTUS
DIXIE FOODS INTERNATIONAL, INC.
20,000 shares of Series A Convertible Preferred Stock
$15.00 per share
We are offering shares of our Series A Convertible Preferred Stock (the
"Preferred Stock"). The Preferred Stock may be converted by the holder into 100
shares of our common stock at any time. No additional payment is required in
connection with a conversion. We will not pay any dividend on the Preferred
Stock unless we pay a dividend on our common stock. In that event the holders
will be paid a dividend equivalent to the dividend which would be received on
the number of shares of common stock into which the Preferred Stock could be
converted. In the event that we are liquidated the Preferred Stock would be
entitled to receive the amount of $15 per share before any distribution to our
common stock.
This prospectus also relates to the offering of up to 2,000,000 shares of our
Common Stock which may be issued upon conversion of the Series A Convertible
Preferred Stock.
There is no minimum number of shares that must be sold in this offering. We will
retain all proceeds from sales of the shares irrespective of the number of
shares sold. Subscriptions for the shares are irrevocable.
The shares are being offered through our chief executive officer pursuant to an
exemption from registration as a broker/dealer under Rule 3a 4-1 of the
Securities Exchange Act. There is no minimum offering. Proceeds from the sale of
the shares, up to $300,000 if all the shares offered are sold, will not be
placed in an escrow account and may be used by us upon receipt. We are offering
the shares until 180 days from effective date but we may terminate the offering
earlier.
Prior to this offering there has been no public market for our preferred stock
or common stock and there can be no assurance that any such market will develop.
THE SHARES INVOLVE SUBSTANTIAL RISK. SEE "RISK FACTORS" ON PAGE 2.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES AGENCY NOR HAS THE COMMISSION OR ANY
SUCH AGENCY PASSED ON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
The information in this prospectus is not complete and may be changed. We 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 February __, 2011
PROSPECTUS SUMMARY
This summary does not contain all of the information you should
consider before making your investment decision. You should read the entire
prospectus carefully, including the section titled "Risk Factors" and the
financial statements and the notes relating to those statements.
We were incorporated in Florida in May 2010. All of our operations to
date have been related to the formation and development of our business. We
currently have minimal assets, no revenues and no operating history beyond
certain start-up activities. Our ability to commence commercial operations and
successfully implement our business plan depends on us obtaining adequate
financial resources, which cannot be assured.
We were formed to develop and market barbecue sauce and other
condiments. Since we are in the developmental stage and have not yet introduced
any products into the marketplace, we cannot assure you that we will have
profitable operations. Our initial product is a yellow mustard-based barbecue
sauce. The recipe for this product was contributed to us by our founder, Michael
H. Jordan.
Our principal executive offices are located at 115 NE 6th Blvd.,
Williston, FL 32696 our telephone number is (800)366-5174.
The Offering
Stock Offered: 20,000 shares of Series A Convertible
Preferred Stock
Offering price: $15.00 per share
Liquidation Preference: $15.00 per share
Dividends: In the event a dividend or distribution
is declared on the Common Stock of the
Company, in cash or other property
(other than a dividend of our Common
Stock), the holders of the Series A
convertible Preferred Stock will be
entitled to receive the amount of cash
or property equal to the cash or
property which would be received by the
holders of the number of shares of
Common Stock into which such shares of
Series A Convertible Preferred Stock
could be converted immediately prior to
such dividend or distribution.
Optional Conversion: Each share of convertible preferred
stock may be converted, at the option of
the holder, into 100 shares of our
common stock, subject to adjustment in a
number of circumstances described under
"Description of Series A Convertible
Preferred Stock--Conversion Rate
Adjustments." No additional payment is
required in connection with a
conversion.
Voting Rights: The Preferred Stock will vote, on an as
converted basis, with the Common Stock.
1
Series A Convertible Preferred None
Stock Outstanding:
Common Stock outstanding:
Prior to offering: 6,200,000 shares
Assuming sale of all preferred 8,200,000 shares
and conversion of convertible
preferred Stock into common stock:
Estimated Proceeds: Because this is a self underwritten
offering with no minimum, we may receive
from $0 up to $300,000 if all 20,000
shares offered are sold.
Use of Proceeds: Operations and development of our
business, acquire inventory,
advertising, marketing, and working
capital.
Risk Factors: Prospective Investors should carefully
evaluate the following matters,
including those under the heading "Risk
Factors".
RISK FACTORS
An investment in our shares involves a high degree of risk. In addition
to the other information in this prospectus, you should carefully consider the
following factors in evaluating us and our business before purchasing the
shares.
BUSINESS RISKS
BECAUSE WE WERE ORGANIZED IN MAY 2010 AND HAVE NOT CONDUCTED OPERATIONS OF OUR
BUSINESS BEYOND INITIAL START-UP OPERATIONS, OUR BUSINESS MAY NOT BE SUCCESSFUL.
Our company was incorporated in May 2010 and has only undertaken
activities related to its formation, initial planning of our business and
preparing for this offering. We have not begun to offer any products into the
marketplace. We have no history of operating such business upon which you can
rely in making an investment decision concerning this offering. Investing in a
business in the start-up phase is riskier than investing in a business that has
already begun selling products and has a history of operations.
OUR INDEPENDENT AUDITORS HAVE RAISED SUBSTANTIAL DOUBTS ABOUT OUR ABILITY TO
CONTINUE AS A GOING CONCERN.
Our independent auditors have raised substantial doubts about our
ability to continue as a going concern in their report on our financial
statements. If we are unable to continue as going concern we would experience
additional losses from the write-down of assets.
BECAUSE WE MAY NOT BE SUCCESSFUL IN DEVELOPING OUR PROPOSED BUSINESS, THIS IS A
RISKY INVESTMENT.
The establishment of any new business is difficult and there can be no
assurance that we will be able to enter the commercial marketplace with products
or that any products we introduce will be a commercial success.
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BECAUSE OUR PRODUCTS MAY NOT BE COMMERCIALLY SUCCESSFUL, WE MAY NOT BE ABLE TO
CONTINUE IN BUSINESS.
In order to achieve profitable operations we are dependent upon market
acceptance of our products, substantial sales and the ability to acquire and
distribute products at satisfactory cost levels, none of which can be assured.
We have not introduced any products into the marketplace.
WE MAY NOT RECEIVE ENOUGH CAPITAL FROM THIS OFFERING TO ENABLE US TO INTRODUCE
PRODUCTS INTO THE MARKETPLACE, WHICH MEANS WE MAY NOT BE ABLE TO CONTINUE
OPERATING OUR BUSINESS.
We are dependent on the availability of capital from this offering to
proceed with our plan to offer products in the commercial marketplace. Dixie
Foods International, Inc. is selling the shares directly to the public without
the use of a registered broker/dealer firm. There is no minimum amount of shares
which we have to sell in this offering so we may not sell a sufficient number of
shares to successfully implement our business plan. We have no current
arrangements with respect to, or sources of any additional capital, and there
can be no assurance that such additional capital will be available to us when
needed. If we are unable to obtain additional capital this would have a material
adverse effect on us and would cause us to be unable to enter the marketplace
with our first product. To the extent that any such financing involves the sale
of our equity securities, the interests of our then existing stockholders,
including the investors in this offering, could be substantially diluted.
Management believes that we will require a minimum of $50,000 of
available capital to enter the marketplace with our initial product. If such
capital does not become available from the proceeds of this offering or such
other sources we will continue development stage operations for the next 12
months from available cash on hand. We have no commitments for additional
capital as of the date of this prospectus and will not seek other capital until
the termination of this offering. Accordingly, investors are advised that the
proceeds of this offering may not be sufficient to enable us to enter the
commercial market place and if additional capital is not received within 12
months from the date of this prospectus we may have to curtail remaining
operations.
WE HAVE NO ARRANGEMENT OR RESOURCES OF ADDITIONAL CAPITAL AND MAY HAVE TO
CURTAIL OUR OPERATIONS IF ADDITIONAL CAPITAL IS NOT AVAILABLE WHEN WE NEED IT.
If we succeed in introducing our first product into the marketplace we
anticipate that sales of our product will generate sufficient cash flow to
support our operations for the next twelve months. However, this is based on our
assumption of achieving significant sales of our product and there can be no
assurance that such sales levels will be achieved. Therefore, we may require
additional financing through factoring of accounts receivable, loans and other
arrangements, including the sale of additional common stock or preferred stock.
There can be no assurance that such additional financing will be available, or
if available, can be obtained on satisfactory terms. To the extent that any such
financing involves the sale of our equity securities, the interests of our then
existing stockholders, including the investors in this offering, could be
substantially diluted. In the event that we do not have sufficient capital to
support our operations we may have to curtain our operations.
ONLY ONE OF OUR OFFICERS AND DIRECTORS HAS EXPERIENCE IN THE SAUCE AND CONDIMENT
BUSINESS, MAKING IT LESS LIKELY THAT OUR BUSINESS WILL BE SUCCESSFUL.
Only one of our officers and directors has any background or experience
in the sauce and condiment business. Investing in a business which is run by
persons who have less experience in the industry in which it will operate is
riskier than investing in a business that has a management team with more
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experience in its industry. Investing in a public company which is run by
persons who have no experience in operating public companies is riskier than
investing in a business that has a management team with experience in the
operation of public companies.
WE HAVE NO FULL TIME EMPLOYEES AND OUR OFFICERS ONLY WORK FOR US ON AN "AS
NEEDED" BASIS, WHICH MEANS OUR MANAGEMENT MAY BE INADEQUATE TO OPERATE OUR
BUSINESS.
We do not currently employ any full-time employees. All of our
activities to date have been undertaken by our officers who devote their time to
operating our business as needed. We cannot assure you that our management will
be able to devote sufficient time to our business in the future or that we will
be able to hire employees when needed to support our entry into the specialty
food business.
CONTINUED CONTROL BY OUR CURRENT STOCKHOLDERS MAY MAKE IT MORE DIFFICULT TO
CHANGE OUR MANAGEMENT.
After the completion of this offering, the current stockholders will
continue to own Common Stock sufficient to give them voting control over the
Company and be able to continue to determine and direct the affairs and policies
of the Company. If the maximum 20,000 shares offered herein are sold, the
current stockholders will own shares with approximately 76% of all the voting
rights of our shareholders. See "Principal Stockholders".
THIS IS A RISKY INVESTMENT BECAUSE THERE IS NO MINIMUM NUMBER OF SHARES THAT
MUST BE SOLD IN THIS OFFERING.
The funds raised in this offering may not be sufficient to defray the
costs associated with making this offering. The funds raised in this offering
may not be sufficient to enable us to proceed to introduce our first product
into the commercial marketplace.
AS A PUBLIC COMPANY, WE WILL BE SUBJECT TO ADDITIONAL REPORTING AND CORPORATE
GOVERNANCE REQUIREMENTS THAT MAY BE DIFFICULT FOR US TO SATISFY, WILL RAISE OUR
COSTS AND MAY DIVERT RESOURCES AND MANAGEMENT ATTENTION FROM OPERATING OUR
BUSINESS.
We have historically operated as a private company. After this
offering, we will become subject to certain reporting and corporate governance
requirements, including the provisions of the Sarbanes-Oxley Act of 2002, or the
Sarbanes-Oxley Act, and the regulations promulgated thereunder, which will
impose significant new compliance obligations upon us. As a public company, we
will be required, among other things, to evaluate and maintain our system of
internal control over financial reporting, and report on management's assessment
thereof, in compliance with the requirements of Section 404 of the
Sarbanes-Oxley Act and related rules and regulations of the SEC and the Public
Company Accounting Oversight Board.
The adequacy of our internal control over financial reporting must be
assessed by management each year commencing with the year ending December 31,
2011. We do not currently have comprehensive documentation of our internal
control over financial reporting, nor do we document our compliance with these
controls on a periodic basis in accordance with Section 404 of the
Sarbanes-Oxley Act. Furthermore, we have not tested our internal control over
financial reporting in accordance with Section 404 and, due to our lack of
documentation, this testing would not be possible at this time. If we were
unable to implement the controls and procedures required by Section 404 in a
timely manner or otherwise to comply with Section 404, management might not be
able to certify, and our independent registered public accounting firm might not
be able to report on, the adequacy of our internal control over financial
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reporting. If we are unable to maintain adequate internal control over financial
reporting, we might be unable to report our financial information on a timely
basis and might suffer adverse regulatory consequences or violate Nasdaq Stock
Market listing standards. There could also be a negative reaction in the
financial markets due to a loss of investor confidence in us and the reliability
of our financial statements. In addition, if we are unable to implement the
controls and procedures required by Section 404 effectively or efficiently, it
could harm our operations, financial reporting or financial results and could
result in an adverse opinion on internal controls from our independent
registered public accounting firm.
The changes necessitated by becoming a public company will require a
significant commitment of additional resources and management oversight that
will increase our costs and might place a strain on our systems and resources.
As a result, our management's attention might be diverted from other business
concerns. In addition, we might not be successful in implementing and
maintaining controls and procedures that comply with these requirements. If we
fail to maintain an effective internal control environment or to comply with the
numerous legal and regulatory requirements imposed on public companies, we could
make material errors in, and be required to restate, our financial statements.
Any such restatement could result in a loss of public confidence in the
reliability of our financial statements and sanctions imposed on us by the SEC.
SECURITIES RISKS
THERE IS NO CURRENT PUBLIC MARKET FOR OUR PREFERRED OR COMMON STOCK, WHICH MEANS
YOU MAY HAVE TO HOLD OUR SHARES FOR AN INDEFINITE PERIOD OF TIME.
There is presently no public market for our shares of preferred or
common stock. There is no assurance that a trading market will develop or be
sustained. Accordingly, you may have to hold the shares indefinitely and may
have difficulty selling them if an active trading market does not develop.
Management's strategy is to seek to have our common stock, but not our preferred
stock, trade on the over-the-counter market and quoted on the OTC Bulletin Board
as soon as practicable after the termination of this offering. However, to date
we have not solicited any securities brokers to become market-makers of our
common stock. There can be no assurance that an active trading market for the
common stock will develop or be sustained or that the market price of the common
stock will not decline below the initial public trading price. The initial
public trading price will be determined by market makers independent of us.
STATE BLUE SKY LAWS MAY LIMIT YOUR ABILITY TO RESELL OUR STOCK.
We are registering the preferred stock for sale only in the State of
Florida. The "blue sky" laws of some states may impose restrictions upon the
ability of investors to resell our shares in those states without registration
or an exemption from the registration requirements. Accordingly, investors may
have difficulty selling our shares and should consider the secondary market for
our shares to be a limited one.
THE "PENNY STOCK" RULES AND REQUIREMENTS FOR DEALING IN PENNY STOCKS MAY MAKE IT
DIFFICULT FOR HOLDERS OF OUR STOCK TO RESELL THEIR SHARES.
The SEC has adopted rules that regulate broker-dealer practices in
connection with transactions in "penny stocks." These requirements may have the
effect of reducing the level of trading activity in the secondary market for our
stock if any such market develops. If our shares are subject to the penny stock
rules, you may find it more difficult to sell your shares.
5
Penny stocks generally are equity securities with a price of less than
$5.00, other than securities registered on certain national securities exchanges
or quoted on NASDAQ. Prior to a transaction in a penny stock, a broker-dealer is
required to:
o deliver a standardized risk disclosure document prepared by the SEC;
o provide the customer with current bid and offer quotation for the penny
stock;
o explain the compensation of the broker-dealer and its salesperson in
the transaction;
o provide monthly account statements showing the market value of each
penny stock held in the customer's account;
o make a special written determination that the penny stock is a suitable
investment for the purchaser and receive the purchaser's approval; and
o provide a written agreement for the transaction.
THE OFFERING PRICE OF $15.00 PER SHARE IS SPECULATIVE.
The offering price of $15.00 per share has been arbitrarily determined
by our management and does not bear any relationship to the assets, net worth or
actual or projected earnings of the Company or any other generally accepted
criteria of value.
PURCHASERS OF THE SHARES WILL EXPERIENCE IMMEDIATE AND SUBSTANTIAL DILUTION.
As of November 30, 2010, after giving effect to the sale of the maximum
of 20,000 shares of Preferred Stock offered hereby at an offering price of
$15.00 per share and deducting the estimated expenses of the offering, and after
giving pro forma effect to the conversion of the 20,000 shares of Preferred
Stock into 2,000,000 shares of common stock, the pro forma as adjusted net
tangible book value per share of our common stock would have been $0.033,
representing an immediate dilution of $.115 per share to investors. See
"Dilution" for additional information.
WE MAY ENGAGE IN ADDITIONAL EQUITY FINANCING THAT COULD LEAD TO DILUTION OF
EXISTING INVESTORS.
Any future equity financing by us may result in substantial dilution of
the holdings of existing stockholders. We cannot assure you that such future
financings will be possible.
WE DO NOT PAY ANY CASH DIVIDENDS.
The preferred stock will not be paid any dividends unless we pay
dividends on our common stock. We have not paid any cash dividends on our common
stock nor do we presently contemplate the payment of any cash dividends.
Accordingly, there can be no assurance that you will receive any return from an
investment in our convertible preferred stock. In the absence of the payment of
dividends, any return on your investment would be realized only upon your sale
of our stock. We are not making any representations that an investment in our
stock will be profitable or result in a positive return.
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USE OF PROCEEDS
Because this offering has no minimum, we may receive a small amount of
proceeds up to the maximum of $300,000 if all 20,000 shares offered by this
prospectus are sold. We plan to use the net proceeds of this offering as follows
based upon various levels of sales of shares after deducting estimated offering
expenses of $22,000.
Number of shares sold: 3,333 6,667 13,333 20,000
Percent of offering sold: 17% 33% 67% 100%
Offering proceeds: $50,000 $100,000 $200,000 $300,000
------- -------- -------- --------
Inventory ................... 7,500 33,000 83,000 133,000
Website ..................... 2,500 5,000 10,000 20,000
Promotion and Advertising ... 7,500 20,000 40,000 60,000
Legal and Accounting ........ 7,500 10,000 15,000 15,000
General and Administrative .. 1,500 5,000 15,000 25,000
Working Capital ............. 1,500 5,000 15,000 25,000
The foregoing represents our best estimate of the allocation of the
proceeds of this offering based on planned use of funds for the our operations
and current objectives. We may reallocate funds from time to time if we believe
such reallocation to be in our best interest for uses that may or may not have
been herein anticipated.
MARKET FOR THE SHARES
There is no public market for our preferred stock or our common stock.
There can be no assurance that a market will develop or be maintained.
We currently have 17 record holders of our Common Stock.
The Penny Stock Rules
The Securities and Exchange Commission has adopted regulations which
generally define a penny stock to be any equity security that has a market price
less than $5.00 per share, subject to certain exceptions. If our shares fall
within the definition of a penny stock they will become subject to rules that
impose additional sales practice requirements on broker-dealers who sell such
securities to persons other than established customers and accredited investors
(generally those with assets in excess of $1,000,000 or annual income exceeding
$200,000, or $300,000 together with their spouse). For transactions covered by
these rules, the broker-dealer must make a special suitability determination for
the purchase of such securities and have received the purchaser's written
consent to the transaction prior to the purchase. Additionally, for any
transaction involving a penny stock, unless exempt, the rules require the
delivery, prior to the transaction, of a risk disclosure document mandated by
the Commission relating to the penny stock market. The broker-dealer also must
disclose the commissions payable to both the broker-dealer and the registered
representative, current quotations for the securities and, if the broker- dealer
is the sole market-maker, the broker-dealer must disclose this fact and the
broker-dealer's presumed control over the market. Finally, monthly statements
must be sent disclosing recent price information for the penny stock held in the
account and information on the limited market in penny stocks. The penny stock
rules may restrict the ability of broker-dealers to sell our securities and may
affect the ability of our shareholders to sell our shares in the secondary
market.
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DIVIDEND POLICY
The convertible preferred stock being offered by this prospectus does
not carry a fixed periodic dividend. In the event a dividend or distribution is
declared on the Common Stock of the Company, in cash or other property (other
than a dividend of our Common Stock), the holders of the Series A convertible
Preferred Stock will be entitled to receive the amount of cash or property equal
to the cash or property which would be received by the holders of the number of
shares of Common Stock into which such shares of Series A Convertible Preferred
Stock could be converted immediately prior to such dividend or distribution. We
have not paid any dividends on our Common Stock, and it is not anticipated that
any dividends will be paid in the foreseeable future. The declaration and
payment of dividends in the future will be determined by the Board of Directors
in light of conditions then existing, including the company's earnings,
financial condition, capital requirements and other factors.
DETERMINATION OF OFFERING PRICE
Our management has arbitrarily determined the price of the shares we
are offering for sale under this prospectus and the conversion ratio of the
convertible preferred stock into common stock. In determining the offering price
and conversion ratio, our management considered the price paid for our shares by
our current shareholders, our business potential, and market valuation of
competing firms, but did not assign any relative or specific weights to any of
these factors in making such determinations.
DILUTION
As of November 30, 2010, we had net tangible book value of $11,761 or
approximately $.002 per share of Common Stock. Net book value per share means
our tangible assets less all liabilities divided by the number of shares of
Common Stock outstanding. After giving effect to the sale of the maximum 20,000
shares of Series A Convertible Preferred Stock at a price of $15.00 (less the
estimated expenses of this offering of $22,000) and conversion of such shares
into 2,000,000 shares of Common Stock, the adjusted net tangible book value
would have been approximately $289,761, or $.035 per share of Common Stock. The
result would be an immediate increase in net tangible book value of $.033 per
share of Common Stock to existing stockholders and an immediate dilution of
$.115 per share to new investors. The following table illustrates this dilution
to new investors on a per common share basis:
Pro-forma public price of Common Stock after conversion ................ $.15
Net tangible book value per share of Common Stock before the offering $.002
Increase per Common share attributable to the sale to new investors
of the shares in this offering ...................................... $.033
Net tangible book value per Common share after offering ................ $.035
-----
Dilution per Common share to new investors ............................. $.115
=====
The following table summarizes the investments of all existing
stockholders and new investors after giving effect to the sale of the maximum
shares of Series A Convertible Preferred Stock in this offering and conversion
of such stock into Common Stock, a comparison of the number of shares of Common
Stock acquired from the Company, the percentage of ownership of such shares, the
total consideration paid, the percentage of total consideration paid and the
average price per share.
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Shares Purchased Total Consideration Average
-------------------- ------------------- Price
Number Percent Amount Percent per Share
--------- ------- -------- ------- ---------
Existing stockholders 6,200,000 75.6% $ 67,000 18.3% $.01
New investors ....... 2,000,000 24.4% $300,000 81.7% $.15
--------- ------- -------- -------
Total ............... 8,200,000 100% $367,000 100%
The existing shareholder data in the table above are based on shares outstanding
as of February 15, 2011.
CAPITALIZATION
The following table sets forth our capitalization as of November 30,
2010.
November 30,
2010
------------
Stockholders' equity
Common Stock, $.001 par value: 100,000,000 shares authorized,
6,200,000 issued and outstanding ................................. $ 6,200
Preferred Stock $.001 par value: 15,000,000 authorized, 0 series A
convertible preferred shares issued and outstanding (actual) ..... --
Additional paid-in capital ....................................... $ 50,300
Deficit accumulated during the development stage ................. (44,739)
---------
Total stockholders' equity ....................................... $ 11,761
=========
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
Included in this prospectus are "forward-looking" statements, as well
as historical information. Although we believe that the expectations reflected
in these forward-looking statements are reasonable, we can give no assurance
that the expectations reflected in these forward-looking statements will prove
to be correct. Our actual results could differ materially from those anticipated
in forward-looking statements as a result of certain factors, including matters
described in the section titled "Risk Factors." Forward-looking statements
include those that use forward-looking terminology, such as the words
"anticipate," "believe," "estimate," "expect," "intend," "may," "project,"
"plan," "should," and similar expressions, including when used in the negative.
Although we believe that the expectations reflected in these forward-looking
statements are reasonable and achievable, these statements involve risks and
uncertainties and no assurance can be given that actual results will be
consistent with these forward-looking statements. Important factors that could
cause our actual results, performance or achievements to differ from these
forward-looking statements include the factors described in the "Risk Factors"
section and elsewhere in this prospectus.
All forward-looking statements attributable to us are expressly
qualified in their entirety by these and other factors. We undertake no
obligation to update or revise these forward-looking statements, whether to
reflect events or circumstances after the date initially filed or published, to
reflect the occurrence of unanticipated events or otherwise.
9
PLAN OF OPERATION
Our primary focus over the course of the next 12 months will be to
concentrate on introducing our initial products into the commercial marketplace
including acquiring inventory for sale and establishing channels of distribution
for the marketing of our products.
We were recently formed and all activity to date has been related to
our formation of our business, formulation of our business plan and initial
start-up operations such as formulating and testing recipes, investigating
sources of supply for raw materials and services, investigating potential
distribution channels for our products and development of our proposed
financing. Our ability to proceed with our plan to enter the commercial
marketplace with our initial product depends upon our obtaining adequate
financial resources through this offering. As of August 31, 2010, we had not
incurred any material costs or expenses other than those associated with the
formation and financing of our company.
MILESTONES TO IMPLEMENT OUR BUSINESS PLAN
Below is a brief description of the activities which we have
established to achieve the launch of our first product into the commercial
marketplace. These activities will be undertaken by our officers.
The following activities have already been accomplished:
o Finalized recipe, labels and packaging for our initial barbecue
sauce product.
o Selected and established sources of supply for ingredients and
packaging, including labels, bottles and cartons.
o Identified two contract packers qualified and willing to produce the
product, including blending, bottling, labeling, packing in cartons
and shipping to customers.
o Obtained nutritional analysis and stability testing of the product.
Although the foregoing activities have put us in the position to enter
the marketplace with our initial product, management believes that it would not
be prudent to enter into actual production and sale of product in commercial
quantities without the availability of a minimum of $50,000 of working capital.
We will take the following activities to market our initial product upon
achieving such working capital. We will complete these activities within 30 days
of achieving such capital position. If such capital does not become available
from the proceeds of this offering or such other sources we will continue
development stage operations for the next 12 months from available cash on hand
and continue to seek additional financing.
The following activities will take place within 30 days of the
availability of working capital:
o Purchase of at least $7,500 of initial product inventory. This will
enable us to distribute samples to potential customers and fulfill
anticipated orders for product.
o Initiate marketing activities including contacting potential
customers, distribution of samples, initiate promotions such as
in-store sampling and coupons, initiate advertising and other
promotional activities. Our budget for initial promotion and
advertising is a minimum of $7,500.
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o Publish a website for our company and to promote our product for a
price of $2,500.
If we succeed in introducing our initial products into the marketplace
we anticipate that sales of our products will generate sufficient cash flow to
support our operations for the next twelve months. However, this is based on our
assumption of achieving significant sales of our products and there can be no
assurance that such sales levels will be achieved. Therefore, we may require
additional financing through factoring of accounts receivable, loans and other
arrangements, including the sale of additional common stock or preferred stock.
There can be no assurance that such additional financing will be
available, or if available, can be obtained on satisfactory terms. To the extent
that any such financing involves the sale of our equity securities, the
interests of our then existing stockholders, including the investors in this
offering, could be substantially diluted. In the event that we do not have
sufficient capital to support our operations we may have to curtail our
operations.
Our officers will provide daily management of our company, including
administration, financial management, production, marketing and sale of product.
We will also engage other employees and service organizations to provide needed
services as the need for them arise. These could include services such as
computer systems, sales, marketing, advertising, public relations, cash
management, production, warehousing, shipping, collections, accounting, and
administration.
Upon the effective date of the registration statement of which this
prospectus is a part we will be subject to certain reporting and other
compliance requirements of a publicly reporting company. We will be subject to
certain costs for such compliance which private companies may not choose to
make. We have identified such costs as being primarily for audits, legal advice,
filing expenses and shareholder communications and estimate the cost to be
approximately $10,000 to $15,000 for the next twelve months. We expect to pay
such costs from a combination of cash on hand, the proceeds of this offering and
cash generated by product sales.
We expect our initial operating expenses will be paid for by
utilization of some of the proceeds of this offering and from cash flows
generated from product sales.
There can be no assurance that we will be able to successfully
introduce our initial products or any other products into the commercial
marketplace. We believe that we can control the operating and general and
administrative expenses of our operations to be within the cash available from
this offering and from the collections on the product sales which we may make.
If our initial operations indicate that our business can establish and fulfill a
demand for our initial product on a basis which will lead to establishment of a
profitable business we may seek additional sources of cash to grow the business.
We do not currently have any commitments for the sale of our proposed products
or for additional financing.
BUSINESS
"We are now living in the golden age of condiments."
Bloomberg Businessweek, October 11-17, 2010
Our business objective is to become a successful developer and supplier
of gourmet sauces and other condiments for distribution through retail stores of
all types. The key elements of the Company's strategy include the following:
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Create and introduce products which appeal to consumers looking for
something new and different from competing products already on the market.
Stimulate consumer awareness through introduction of our products at
specialty gourmet grocery stores.
Support our products through advertising and promotion to generate
brand awareness and repeat business.
Expand distribution into additional retail outlets.
The market opportunity
We believe that our entry into the condiment and sauce market is
timely. It fits into the current trend of budget-conscious consumers eating more
meals at home rather than at restaurants. The extra cost per serving of using
sauces and condiments in cooking is not very much. Furthermore, interest in more
exotic flavors is stimulated by the popularity of television shows and entire
cable networks with cooking themes.
The October 11-17, 2010 edition of Bloomberg Businessweek article,
"Spreading the Love", citing Mintel International Group market research,
reported that the U.S. market for condiments is $5.6 billion and that condiment
sales grew 9.4% from 2007 through 2009. Furthermore, it reported that new
products and flavors tend to be introduced by smaller companies and successful
products go from niche product to mass market in three to five years. This
article is available at
http://www.businessweek.com/magazine/content/10_42/b4199096744538.htm.
Our Marketing Plan
As a new entrant into a market with a number of established competitors
we will seek to differentiate our products by appealing to consumers to try our
products and building customer loyalty on the following bases:
(a) Brand positioning.
(b) Product ingredients and taste.
(c) Consumer education.
(d) Marketing approach.
Our initial product, a mustard-based yellow barbecue sauce, looks and
tastes different from the established national brands. We will seek to stress
the difference of our product, both in appearance and taste. We will also seek
to educate consumers about the proper way to use our products.
Distribution
Our target market for initial product distribution will be specialty
gourmet grocery stores. These retailers compete by selling products which are
not generally available at large supermarket chains and they are highly
selective in their merchandising. We believe that consumers choose to shop at
specialty gourmet food stores for a different shopping experience and that they
are open to try a new product not available at the chain supermarkets or
supported by large advertising budgets. We believe that gourmet food stores are
more willing to try a new product and will place initial orders in small
amounts.
In order to establish initial distribution we anticipate that we will
directly approach gourmet food stores to purchase our products through our
management and attend trade shows for the gourmet food trade. We will also seek
to establish our brand through public relations, an internet site and an
internet blog.
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Subject to a successful introduction of our initial product, we will
seek to engage food brokers to represent us in contacting distributors and
larger retailers. At that point we anticipate formulating a sales and marketing
presentation to aid the brokers in representing our products to retail and
distributor buyers. The key competitive factors in influencing a purchasing
decision on this level include the product quality, packaging, sales history,
profitability, and consumer demand. If a buyer decides to accept our product,
other issues such as the cost of acquiring shelf space (slotting fees)and our
specific commitments to marketing programs will be negotiated. Slotting fees can
take the form of cash payments and/or free product allowances.
We cannot assure you that we will be successful in establishing
distribution for our products or that our sales will be sufficient to enable us
to achieve positive cash flow and earnings.
Manufacturing
We anticipate using contract packers to manufacture our products
according to our specifications, which will include our products' recipes,
ingredients, labels and packaging. We will be responsible for having all the
components of the products shipped to the contract packer. Based on our initial
discussions with several contract packers we believe that we will be able to
engage one or more contract packers that could manufacture our products.
However, we have not engaged a contract packer at this time. We do not
anticipate entering into an exclusive or long term agreement with any packers.
Raw Materials and Suppliers
Based upon our initial investigations, we believe that there are a
number of sources available for product ingredients, packaging, and labels for
our products. We do not anticipate that it will be necessary to execute any
exclusive or long term agreements for such raw material and supplies.
Promotion and Advertising
We intend to initially rely upon point of purchase promotions, trade
magazines, public relations and the internet to promote our products. Point of
purchase promotional advertising will constitute the most significant portion of
our promotion and advertising activities. This will include sampling programs,
displays and brochures which we intend to provide to each retail outlet for our
products in an effort to get customers to try our product. We will rely on
public relations to trade publications to enhance retailer awareness of our
products. Internet will be utilized for consumer awareness and retailer
awareness purposes. We may also seek to establish brand awareness by advertising
and product placement on specialized television programs featuring cooking.
Trademarks, Patents and Intellectual Property
We expect to seek trademark protection for our products as soon as each
product trademark is selected, as well as trademark protection for any
advertising slogans we adopt. We will do a search of existing trademarks prior
to selecting trademarks for our products. We believe that trademark protection
will be important to brand name recognition and distributor and consumer loyalty
to our products. We intend to register our important trademarks in the United
States. We will use our best efforts to maintain the confidentiality of our
product recipes through confidentiality agreements and physical security but do
not anticipate that it will be possible to secure patents for our products.
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Our initial product is a yellow mustard based barbecue sauce formulated
in the tradition of the classic mustard based barbecue sauce popular in South
Carolina. Our sauce is made from all natural ingredients and contains no
cholesterol. It can be used on any food grilled on the barbecue grill as well as
on the table as a dipping sauce. Our founder, Michael H. Jordan, contributed the
recipe to the company.
Future products
We intend to develop and introduce new products including other unusual
barbecue sauces and other condiment products, including salad dressing. However,
there can be no assurance that any future products will be successfully
developed and marketed.
Government Regulation
The production, distribution and sale of food products are subject to
the Federal Food, Drug and Cosmetic Act, the Occupational Safety and Health Act
and various federal and state statutes regulating the production, sale, safety,
advertising, promotion, labeling and ingredients of such products. We intend to
comply with all such regulations.
We cannot predict the impact of possible changes that may be required
in response to future legislation, rules or regulations. Food and Drug
Administration regulations may, in certain circumstances, affect the ability of
the Company, as well as others in the industry, to develop and market new
products.
Although we expect to package our sauce and condiment products in glass
bottles, such bottles are not currently required to be in returnable containers
in compliance with recycling laws which are applicable to beverage containers.
If such recycling laws are extended to our products we may be required to make
material expenditures which may have a material adverse effect on our business.
Competition
The specialty foods business is highly competitive. We will compete
with products sold by established multi-line food companies such as Kraft as
well as a large number of smaller suppliers with products appealing to regional
and national tastes. Many of these competitors have established channels of
distribution of their products, greater financial and other resources than we
do. Competition can take many forms, including the product taste and other
attributes, pricing of products, discounts and promotions, advertising and
payments for access to store shelf space. We believe that we will be able to
compete based upon the unusual taste and appearance of our initial product and
our distribution and promotion plans designed to engage consumers to try our
product.
Employees
As of October 18, 2010, we have no full-time employees. All activities
to date have been undertaken by our officers as needed. Our officers do not
currently spend all of their time on our business and estimate they devote
approximately 10% of their business time on the business of the Company. We
anticipate that we will begin hiring employees as needed to support our entry
into specialty food business.
Facilities
Our company has office space which we lease on a month-to-month basis
from a non-affiliated landlord. We anticipate that we will rent additional
office and warehouse facilities when needed to support the growth of our
business.
14
MANAGEMENT
Our directors and executive officers are:
Name Position
---- --------
Robert E. Jordan President, Chief Executive Officer, director
Tony Joffe Vice President
Robert M. Snibbe, Jr. Director
Robert P. Bova Director
Steven Silberman Director
Robert E. Jordan, 56, has been our President, Chief Executive Officer
and a director since May 2010. Mr. Jordan was President of Southern Sauce
Company, Inc., a specialty food company, from December 2004 to February 2008.
Mr. Jordan retired from practicing law in 1998 and was not employed between
February 2008 and May 2010.
Tony Joffe, 69, has been our Vice President since September 2010. From
March 2005 until August 2006 he was President and CEO of Networth
Technologies,Inc., a global management consulting, technology services and
acquisition company. Mr. Joffe currently has been a director Creative Solutions
International Group, Inc., a business consulting company, since September 2009,
a director of Creative Brands International of Delaware, Inc., a business
consulting company, since September 2009 and a director of Internet Holding
Group, Inc., a boat financing company, since May 2005. He served as president of
USA Boating Sales, Inc., a boat sales company, from December 2001 to May 2007.
He has been president of Internet Holding Group, Inc., a boat financing company,
since May 2006. He served as a business and finance consultant to EM8 Financial,
a boat and recreational vehicle finance company, from October 2006 to December
2008. He served as specialty operations manager of Credit Law Group, a credit
and loan modification company, from December 2008 to May 2009. He served as a
business consultant to Select Debt and Select Health, a debt settlement and
health insurance company, from November 2009 to January 2010.
Robert M. Snibbe, Jr., 66, has been a director since August 2010. He
has been a Clearwater, Florida based financial consultant and real estate and
business broker specializing in corporate development and renewals and
commercial and investment real estate since 1978. He is a Florida licensed real
estate broker.
Robert P. Bova, 52, has been a director since September 2010. Since
2005 he has been CEO and a director of Vangard Voice Systems, Inc., a mobile
voice recognition software provider.
Steven Silberman, 57, has been a director since September 2010. He has
been a real estate appraiser since 1999. He was an associate appraiser for
Applied Economics Group, Gainesville, Florida in 2005. He established his own
appraisal firm in 2005 which was incorporated in September 2006 as North Florida
Investor Services, Inc. which does business as SRS Appraisal Services, Inc. He
is an associate member of the Appraisal Institute, a Florida State Certified
General Appraiser and a realtor member of the Gainesville/Alachua County Board
of Realtors.
Our directors are elected yearly and hold office until the next annual
meeting of shareholders and the election and qualification of their successors.
Our officers are elected annually by the board of directors and may be
replaced or removed by the board at any time. Our directors are elected by our
shareholders annually and serve until the election and qualification of their
successors or their earlier resignation or removal.
15
Director Independence
The following information concerning director independence is based on
the director independence standards of The NASDAQ Stock Market Corporate
Governance Rules, although our common stock is not listed on The NASDAQ Stock
Market.
The Board has determined that directors Robert M. Snibbe, Jr, Robert P.
Bova and Steven Silberman are independent directors within The NASDAQ Stock
Market's director independence standards. Director Robert E. Jordan is not
independent. In determining independence, the Board reviews and seeks to
determine whether directors have any material relationship with the Company,
direct or indirect, which would interfere with the exercise of independent
judgment in carrying out the responsibilities of a director. The Board reviews
business, professional, charitable and familial relationships of the directors
in determining independence. The Board has not designated a separate
compensation or nominating committee.
Board of Director Committees
Our board of directors also serves as our audit committee. We do not
have any executive, compensation or any other committee of our board of
directors.
Code of Ethics
We have adopted a code of ethics that applies to all of our employees,
officers and directors, including those officers responsible for financial
reporting. The code of ethics is filed as Exhibit 14.1 to the registration
statement of which this Prospectus is part.
Director Compensation
We issued 50,000 shares of our common stock, valued at $1,000, to each
of our non-executive directors in consideration of their serving as directors.
We do not have any other arrangements for compensating our directors.
SUMMARY COMPENSATION TABLE
The table below sets forth information relating to the compensation
paid by us during the fiscal year ended August 31, 2010 to our president and
chief executive officer. No executive officer received compensation in excess of
$5,600 for such year.
Name and
Principal Position Year Salary Total
------------------ ---- ---------- ------
Robert E. Jordan 2010 $5,600 (1) $5,600
President and CEO
(1) Represents the value of 280,000 shares of common stock issued to Mr. Jordan.
EXECUTIVE COMPENSATION
At present, all of our operations are conducted by our executive
officers for shares of our common stock. The board of directors and our officers
will seek to agree upon employment arrangements providing a compensation package
which will fairly compensate them for their future services and be within our
available financial resources. We do not anticipate that any officer will
receive a written employment agreement or compensation in excess of $50,000
until our business develops the ability to do so.
16
Other Compensation Arrangements
None of our executive officers have any written employment agreements
or any arrangements for employee benefits, severance payments or change of
control payments. We have not established any long term compensation plans,
stock based compensation plans, incentive compensation plans or other
compensation or benefit plans. We anticipate that such plans will be established
as our business develops.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of February 15, 2011, the beneficial
ownership of our 6,200,000 outstanding shares of Common Stock, our only
outstanding equity security, by (1) the only persons who own of record or are
known to own beneficially, more than 5% of our Common Stock; (2) each director
and executive officer; and (3) all directors and officers as a group and the
percentage owned as of such date and to be owned after completion of this
offering on the assumption that all shares offered will be sold and converted
into 2,000,000 shares of common stock.
Percent Beneficially Owned
--------------------------------
Number of After Offering
Name Shares Before Offering and Conversion
---- --------- --------------- --------------
Robert E. Jordan ............... 280,000 4.5% 3.4%
Tony Joffe ..................... 240,000 3.9% 2.9%
Michael H. Jordan .............. 3,000,000 48.4% 36.6%
Robert M. Snibbe, Jr ........... 50,000 * *
Robert P. Bova ................. 50,000 * *
Steven Silberman ............... 50,000 * *
All directors and officers
as a group (6 persons) ........ 3,670,000 59.2% 49.8%
* less than 2%
Promoters
We were founded in May 2010. Robert E. Jordan and Michael H. Jordan
were instrumental in our organization and may be considered promoters of our
company. They received no consideration for their services in connection with
our organization, but Robert E. Jordan received 280,000 shares of common stock
for serving as our president and CEO. Michael H. Jordan purchased 3,000,000
shares of our common stock for $3,000 in April 2010 and contributed a barbecue
sauce recipe to us.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Since April 2010, we have been party to the following transactions in
which a director, executive officer or holder of five percent or more of our
common stock or any member of their immediate family had a direct or indirect
material interest.
ISSUANCE OF COMMON STOCK TO OUR OFFICERS, DIRECTORS AND FOUNDER
We have compensated our officers and directors for their services
solely by issuance of our common stock which we valued at $.02 per share, as
follows:
o Robert E. Jordan, president, CEO and director, 280,000 shares valued
at $5,600.
17
o Tony Joffe, vice president, 240,000 shares valued at $4,800.
o Robert M. Snibbe, Jr, director, 50,000 shares valued at $1,000.
o Robert P. Bova, director, 50,000 shares valued at $1,000.
o Steven Silberman, director, 50,000 shares valued at $1,000.
We sold 3,000,000 shares of our common stock to Michael H. Jordan, a
founder, for $3,000. Mr. Jordan also contributed a barbecue sauce recipe to us
for which we have not established any value.
The forgoing transactions with our founders, Robert E. Jordan and
Michael H. Jordan, were agreed upon between them as in connection with the
formation of the company. The issuances to Messrs. Joffe, Snibbe, Bova and
Silberman were entered into by negotiation in connection with their recruitment
to serve as directors or officers.
In the quarter ended November 30, 2010 Michael H. Jordan, a founder,
paid expenses of $732 on our behalf and is entitled to reimbursement at any time
without interest.
Our Board of Directors requires that all related party transactions be
reviewed and approved by an independent body of the Board of Directors.
DESCRIPTION OF SECURITIES
Common Stock
We are authorized to issue 100,000,000 shares of Common Stock, $.001
par value. The holders of our Common Stock are entitled to one vote for each
share held of record on all matters to be voted on by stockholders. There is no
cumulative voting with respect to the election of directors, with the result
that the holders of more than 50% of the shares voting for the election of
directors can elect all of the directors then up for election. The holders of
our Common Stock are entitled to receive dividends when, as and if declared by
the Board of Directors out of funds legally available therefor. In the event of
liquidation, dissolution or winding up of the Company, the holders of Common
Stock are entitled to share ratably in all assets remaining which are available
for distribution to them after payment of liabilities and after provision has
been made for each class of stock, if any, having preference over the Common
Stock. Holders of shares of our Common Stock, as such, have no conversion,
preemptive or other subscription rights, and there are no redemption provisions
applicable to the Common Stock. All of the outstanding shares of Common Stock
are fully paid and nonassessable.
Preferred Stock
Our board of directors has the authority, without stockholder approval,
to issue up to 15,000,000 shares of preferred stock, $.001 par value. 500,000
shares of our Preferred Stock have been designated as Series A Convertible
Preferred Stock. The balance of our 14,500,000 shares of authorized preferred
stock may be issued by the Board of Directors in one or more series and with the
rights, privileges and limitations of the preferred stock determined by the
Board of Directors. The rights, preferences, powers and limitations on different
series of preferred stock may differ with respect to dividend rates, amounts
payable on liquidation, voting rights, conversion rights, redemption provisions,
sinking fund provisions, and other matters. As of the date of this prospectus we
have no preferred stock outstanding.
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Stock Certificates
We intend to issue our common stock and preferred stock in book entry
form without stock certificates. Within a reasonable time after the issue or
transfer of stock without certificates, we shall send the registered stockholder
a written statement containing the information required to be set forth or
stated on a certificate pursuant to the applicable provisions of the Business
Corporation Act of the State of Florida.
Description of Series A Convertible Preferred Stock
Pursuant to its authority, our board of directors has designated
500,000 shares of the preferred stock that we now have authority to issue as the
Series A convertible preferred stock. You will not have any preemptive rights if
we issue other series of preferred stock. The convertible preferred stock is not
subject to any sinking fund. We have no right or obligation to redeem the
convertible preferred stock. The convertible preferred stock has a perpetual
maturity and may remain outstanding indefinitely, subject to the stockholders
right to convert the convertible preferred stock into common stock. Any
convertible preferred stock converted or acquired by us will, upon cancellation,
have the status of authorized but unissued shares of preferred stock of no
designated series. We will be able to reissue these cancelled shares of
preferred stock.
Dividends
In the event any dividend or other distribution payable in cash or
other property (other than shares of our Common Stock) is declared on our Common
Stock, each Holder of shares of Series A Convertible Preferred Stock on the
record date for such dividend or distribution shall be entitled to receive per
share on the date of payment or distribution of such dividend or other
distribution the amount of cash or property equal to the cash or property which
would be received by the Holders of the number of shares of Common Stock into
which such share of Series A Convertible Preferred Stock would be converted
pursuant immediately prior to such record date.
Conversion into Common Stock
You may convert the convertible preferred stock at a conversion rate of
100 shares of common stock for each share of convertible preferred stock. No
payment is required in connection with a conversion. We will not make any
adjustment to the conversion price for accrued or unpaid dividends upon
conversion. We will not issue fractional shares of common stock upon conversion.
However, we will instead pay cash for each fractional share based upon the
market price of the common stock on the last business day prior to the
conversion date.
In order to convert your shares of convertible preferred stock, you
must deliver a duly signed and completed notice of conversion to us. If your
convertible preferred stock is represented by a stock certificate you must also
deliver your stock certificate to us.
The conversion date will be the date you deliver your duly signed and
completed notice of conversion to us (and your stock certificate for your
convertible preferred stock if issued in certificated form). You will not be
required to pay any U.S. federal, state or local issuance taxes or duties or
costs incurred by us on conversion, but will be required to pay any tax or duty
payable as a result of the common stock upon conversion being issued other than
in your name. We will not issue common stock unless all taxes and duties, if
any, have been paid by the holder.
No commission or other remuneration will be paid or given, directly or
indirectly, for soliciting a conversion.
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Conversion Rate Adjustment
The conversion rate of 100 shares of common stock will be
proportionately adjusted if:
(1) we dividend or distribute common stock on shares of our common stock;
(2) we subdivide or combine our common stock.
If we are involved in a transaction in which shares of our common stock
are converted into the right to receive other securities, cash or other
property, or a sale or transfer of all or substantially all of our assets under
which the holders of our common stock shall be entitled to receive other
securities, cash or other property, then appropriate provision shall be made so
that your convertible preferred stock will convert into the kind and amount of
the securities, cash or other property that would have been receivable upon the
recapitalization, reclassification, consolidation, merger, sale, transfer or
share exchange by a holder of the number of shares of common stock issuable upon
conversion of the convertible preferred stock immediately prior to the
recapitalization, reclassification, consolidation, merger, sale, transfer or
share exchange.
The company formed by the consolidation, merger, asset acquisition or
share acquisition shall provide for this right in its organizational document.
This organizational document shall also provide for adjustments so that the
organizational document shall be as nearly practicably equivalent to adjustments
in this section for events occurring after the effective date of the
organizational document.
The following types of transactions, among others, would be covered by
this adjustment:
(1) we consolidate or merge into any other company, or any merger of
another company into us, except for a merger that does not result in a
reclassification, conversion, exchange or cancellation of common stock,
(2) we sell, transfer or lease all or substantially all of our assets and
holders of our common stock become entitled to receive other securities, cash or
other property, or
(3) we undertake any compulsory share exchange.
Ranking
The convertible preferred stock will rank, with respect to dividend
rights and upon liquidation, winding up and dissolution:
- junior to all our existing and future debt obligations;
- junior to "senior stock", which is each other class or series of our
capital stock other than (a) our common stock and any other class or series of
our capital stock the terms of which provide that class or series will rank
junior to the preferred stock and (b) any other class or series of our capital
stock the terms of which provide that class or series will rank on a parity with
the convertible preferred stock;
- on a parity with "parity stock", which is each other class or series
of our capital stock that has terms which provide that that class or series will
rank on a parity with the convertible preferred stock;
- senior to "junior stock", which is our common stock and each class or
series of our capital stock that has terms which provide that class or series
will rank junior to the convertible preferred stock.
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We do not currently have any outstanding capital stock which is senior
to or on parity with the convertible preferred stock.
Liquidation Preference
Upon any voluntary or involuntary liquidation, dissolution or winding
up of Dixie Foods International, Inc. or a reduction or decrease in our capital
stock resulting in a distribution of assets to the holders of any class or
series of our capital stock, each holder of shares of convertible preferred
stock will be entitled to payment out of our assets available for distribution
of an amount equal to $15.00 per share of convertible preferred stock held by
that holder, plus all accumulated and unpaid dividends on those shares to the
date of that liquidation, dissolution, winding up or reduction or decrease in
capital stock, before any distribution is made on any junior stock, including
our common stock, but after any distributions on any of our indebtedness or
shares of our senior stock. After payment in full of the liquidation preference
and all accumulated and unpaid dividends to which holders of shares of
convertible preferred stock are entitled, the holders will not be entitled to
any further participation in any distribution of our assets. If, upon any
voluntary or involuntary liquidation, dissolution or winding up of Dixie Foods
International, Inc. or a reduction or decrease in our capital stock, the amounts
payable with respect to shares of convertible preferred stock and all other
parity stock are not paid in full, the holders of shares of convertible
preferred stock and the holders of the parity stock will share equally and
ratably in any distribution of our assets in proportion to the full liquidation
preference and all accumulated and unpaid dividends to which each such holder is
entitled.
Neither the voluntary sale, conveyance, exchange or transfer, for cash,
shares of stock, securities or other consideration, of all or substantially all
of our property or assets nor the consolidation, merger or amalgamation of Dixie
Foods International, Inc. with or into any corporation or the consolidation,
merger or amalgamation of any corporation with or into Dixie Foods
International, Inc. will be deemed to be a voluntary or involuntary liquidation,
dissolution or winding up of Dixie Foods International, Inc. or a reduction or
decrease in our capital stock.
We are not required to set aside any funds to protect the liquidation
preference of the shares of preferred stock, although the liquidation preference
will be substantially in excess of the par value of the shares of the
convertible preferred stock.
SHARES ELIGIBLE FOR FUTURE SALE
All of the 6,200,000 shares of Common Stock issued and outstanding
prior to this offering are "restricted securities," as that term is defined
under Rule 144 ("Rule 144"), promulgated under the Securities Act.
In general, under Rule 144 as currently in effect, an affiliate of the
Company (or persons whose shares are aggregated with those of an affiliate), who
has beneficially owned restricted shares of Common Stock for at least one year
is entitled to sell, within any three-month period, a number of shares that does
not exceed the greater of 1% of the total number of outstanding shares of the
same class or the average weekly trading volume during the four calendar weeks
preceding the sale as reported on NASDAQ, all exchanges and the consolidated
transaction reporting system.
21
A person who has not been an affiliate of the Company for at least the
three months immediately preceding the sale and who has beneficially owned
restricted shares of Common Stock for at least six months is entitled to sell
such shares under Rule 144 without regard to any of the limitations described
above as long as the Company is up to date in filing its periodic reports under
the Securities Exchange Act of 1934. If the Company is not up to date in such
Exchange Act filings preceding such sale, non-affiliate stockholders may sell
their shares without regard to any of the limitations described above after they
have held their shares for at least one year.
No prediction can be made as to the effect, if any, that sales of
"restricted" shares of Common Stock or the availability of such shares for sale
will have on the market prices prevailing from time to time. Nevertheless, the
possibility that substantial amounts of Common Stock may be sold in the public
market may adversely affect prevailing market prices for the Common Stock and
could impair the Company's ability to raise capital through the sale of its
equity securities.
INDEMNIFICATION
The Florida Business Corporation Act provides that a person who is
successful on the merits or otherwise in defense of an action because of service
as an officer or director of a corporation, such person is entitled to
indemnification of expenses actually and reasonably incurred in such defense.
F.S. 607.0850(3).
Such act also provides that the corporation may indemnify an officer or
director, advance expenses, if such person acted in good faith and in a manner
the person reasonably believed to be in, or not opposed to, the best interests
of the corporation and, with respect to a criminal action, had no reasonable
cause to believe his conduct was unlawful. F.S. 607.0850(1)(2).
A court may order indemnification of an officer or director if it
determines that such person is fairly and reasonably entitled to such
indemnification in view of all the relevant circumstances. F.S. 607.0850(9).
Our Articles of Incorporation and By-laws provide that we must
indemnify our officers, directors, employees and agents to the fullest extent
allowed by the Florida Business Corporation Act.
Indemnification Against Public Policy
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to our directors, officers or person controlling
us, we have been informed 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.
PLAN OF DISTRIBUTION
We are offering up to 20,000 shares of series A convertible preferred
stock at a price or $15.00 per share. We are offering the shares directly to the
public until 180 days from the date of this prospectus, however, we may
terminate the offering prior to that date. There is no minimum amount of shares
that must be sold before we use the proceeds. Proceeds will not be returned to
investors if we sell less than all of the 20,000 shares being offered in this
prospectus. The proceeds from the sales of the shares will be paid directly to
us by a subscriber for our shares and will not be placed in an escrow account.
22
The offering will be conducted by our President, Robert E. Jordan.
Under Rule 3a 4-1 of the Securities Exchange Act an issuer may conduct a direct
offering of its securities without registration as a broker/dealer. Such
offering may be conducted by officers who perform substantial duties for or on
behalf of the issuer otherwise then in connection with securities transactions
and who were not brokers or dealers or associated persons of brokers or dealers
within the preceding 12 months and who have not participated in selling an
offering of securities for any issuer more than once every 12 months, with
certain exceptions.
Furthermore, such persons may not be subject to a statutory
disqualification under Section 3(a)(39) of the Securities Exchange Act and may
not be compensated in connection with securities offerings by payment of
commission or other remuneration based either directly or indirectly on
transactions in securities and are not at the time of offering our shares are
associated persons of a broker or dealer. Mr. Jordan will meet these
requirements.
How to invest
Subscriptions for purchase of shares offered by this prospectus can be
made by completing, signing and delivering to us, the following:
o an executed copy of the Subscription Agreement; and
o a check payable to the order of Dixie Foods International, Inc. in the
amount of $15.00 for each share you want to purchase.
RESALE OF OUR SHARES
There is presently no public market for our shares of preferred or
common stock. There is no assurance that a trading market will develop or be
sustained. Accordingly, you may have to hold the shares indefinitely and may
have difficulty selling them if an active trading market does not develop.
Management's strategy is to seek to have our common stock, but not our
preferred stock, trade on the over-the-counter market and quoted on the OTC
Bulletin Board as soon as practicable after the termination of this offering.
However, to date we have not solicited any securities brokers to become
market-makers of our common stock. There can be no assurance that an active
trading market for the common stock will develop or be sustained or that the
market price of the common stock will not decline below the initial public
trading price. The initial public trading price will be determined by market
makers independent of us. You may convert our preferred stock into common stock
at any time. See, "Description of Securities - Description of Series A
Convertible Preferred Stock.".
Even if a market develops for our common stock you may have difficulty
selling our shares due to the operation of the SEC's penny stock rules. These
rules regulate broker-dealer practices in connection with transactions in "penny
stocks." These requirements may have the effect of reducing the level of trading
activity in the secondary market for our stock.
We are registering the preferred stock for sale only in the State of
Florida. The "blue sky" laws of some states may impose restrictions upon the
ability of investors to resell our shares in those states without registration
or an exemption from the registration requirements. Accordingly, investors may
have difficulty selling our shares and should consider the secondary market for
our shares to be a limited one.
23
LEGAL MATTERS
The validity of the shares offered hereby is being passed upon for the
Company by Joel Bernstein Esq., Miami, Florida.
EXPERTS
The financial statements appearing in this prospectus and registration
statement have been audited by Lake and Associates CPA's, LLC, an independent
registered public accounting firm, as set forth in their report thereon
appearing elsewhere in this prospectus and in the registration statement, and
such report is included in reliance upon such report given upon the authority of
such firm as experts in accounting and auditing.
ADDITIONAL INFORMATION
We have filed with the Securities and Exchange Commission a
registration statement on Form S-1 under the Securities Act of 1933 with respect
to the securities we are offering. This prospectus, filed as a part of the
registration statement, does not contain certain information contained in or
annexed as exhibits to the registration statements. We refer you to the exhibits
to the registration statement for the complete text. For further information
with respect to our company and the securities we are offering by this
prospectus, we refer you to the registration statement and to the exhibits filed
as part of it. We will also file other reports with the SEC, including annual
reports containing audited financial statements, quarterly reports containing
unaudited interim financial statements and other information.
Such material can be read and copied at the Public Reference Room of
the SEC at 100 F Street, N.E., Washington, D.C. 20549. You may obtain
information on the Public Reference Room by calling the SEC at 1-800-SEC-0330.
The SEC also maintains an Internet site that contains the reports, proxy and
information statements and other information which we will file with the SEC
which are available on the World Wide Web at: http://www.sec.gov.
24
DIXIE FOODS INTERNATIONAL, INC.
(A DEVELOPMENT STAGE COMPANY)
Index to Financial Statements
Page
----
AUDITED FINANCIAL STATEMENTS AUGUST 31, 2010
Report of Independent Registered Public Accounting Firm ................. F-2
Balance Sheet ........................................................... F-3
Statements of Operations ................................................ F-4
Statements of Changes in Stockholders' Equity ........................... F-5
Statements of Cash Flows ................................................ F-6
Notes to the Financial Statements ....................................... F-7
UNAUDITED FINANCIAL STATEMENTS FOR THE THREE MONTHS ENDED NOVEMBER 31, 2010
Balance Sheet ........................................................... F-12
Statements of Operations ................................................ F-13
Statements of Changes in Stockholders' Equity ........................... F-14
Statements of Cash Flows ................................................ F-15
Notes to the Financial Statements ....................................... F-16
F-1
LAKE & ASSOCIATES, CPA'S
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and
Stockholders of Dixie Foods International, Inc.
We have audited the accompanying interim balance sheet of Dixie Foods
International, Inc. as of August 31, 2010, and the related statements of
operations, stockholders' equity, and cash flows for the period from May 11,
2010 (Inception) through August 31, 2010. Dixie Foods International Inc.'s
management is responsible for these financial statements. Our responsibility is
to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Dixie Foods International, Inc.
as of August 31, 2010, and the results of its operations and its cash flows for
the period from May 11, 2010 (Inception) through August 31, 2010 in conformity
with accounting principles generally accepted in the United States of America.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed further in Note 9, the
Company is in the development stage and has incurred a significant loss. The
Company's viability is dependent upon its ability to obtain future financing and
the success of its future operations. These factors raise substantial doubt as
to the Company's ability to continue as a going concern. Management's plan in
regard to these matters is described in Note 8. The financial statements do not
include any adjustments that might result from the outcome of this uncertainty.
/s/ Lake & Associates, CPA's LLC
Schaumburg, Illinois
October 20, 2010
1905 Wright Boulevard
Schaumburg, IL 60193
Phone: 847.524.0800
Fax: 847.524.1655
F-2
DIXIE FOODS INTERNATIONAL, INC
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEET
AUGUST 31, 2010
ASSETS
CURRENT ASSETS
Cash and cash equivalents .................................... $ 44,261
-------------
Total current assets ........................................... 44,261
-------------
Total assets ................................................... $ 44,261
=============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable ............................................. $ 2,936
Accrued expenses ............................................. 5,200
-------------
Total current liabilities ...................................... 8,136
-------------
STOCKHOLDERS' EQUITY
Preferred stock, $.001 par value; authorized 15,000,000 shares --
Common stock, $.001 par value; authorized 100,000,000 shares;
issued and outstanding 6,200,000 shares ..................... 6,200
Additional paid-in capital ................................... 60,800
Deficit accumulated during the development stage ............. (30,875)
-------------
Total stockholders' equity ..................................... 36,125
-------------
Total liabilities and stockholders' equity ..................... $ 44,261
=============
See accompanying notes to financial statements.
F-3
DIXIE FOODS INTERNATIONAL, INC
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF OPERATIONS
PERIOD FROM MAY 11, 2010 (INCEPTION) THROUGH AUGUST 31, 2010
MAY 11, 2010
(INCEPTION)
THROUGH
AUGUST 31, 2010
---------------
NET SALES ..................................................... $ --
Cost of sales ................................................. --
--------------
Gross profit .................................................. --
COSTS AND EXPENSES:
Selling, general and administrative expenses ................ 30,875
--------------
30,875
--------------
Loss from operations .......................................... (30,875)
INCOME (LOSS) BEFORE INCOME TAXES ............................. (30,875)
INCOME TAXES .................................................. --
--------------
NET INCOME (LOSS) ............................................. $ (30,875)
==============
BASIC AND DILUTED NET LOSS PER SHARE .......................... **
WEIGHTED AVERAGE SHARES OUTSTANDING
BASIC AND DILUTED ........................................... 4,029,027
==============
** LESS THAN .01
See accompanying notes to financial statements.
F-4
DIXIE FOODS INTERNATIONAL, INC
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
PERIOD FROM MAY 11, 2010 (INCEPTION) THROUGH AUGUST 31, 2010
Deficit
Accumulated
Additional during the Total
Preferred Stock Common Stock Paid-in Development Stockholders'
Shares Par Value Shares Par Value Capital Stage Equity
------ --------- --------- --------- ---------- ----------- -------------
BALANCE, MAY 11, 2010
(INCEPTION) ................. -- -- -- $ -- $ -- $ -- $ --
Common stock issued for
services .................... -- -- 520,000 520 9,880 -- 10,400
Common stock issued for
services - related party .... -- -- 280,000 280 5,320 -- 5,600
Common stock issued for cash
to an initial investor ...... -- -- 3,000,000 3,000 -- -- 3,000
Common stock issued to
directors for services ...... -- -- 150,000 150 2,850 -- 3,000
Common stock issued for cash . -- -- 2,250,000 2,250 42,750 -- 45,000
Net loss August 31, 2010 ... -- -- -- -- -- (30,875) (30,875)
------ --------- --------- --------- ---------- ----------- -------------
BALANCE, August 31, 2010 ..... -- $ -- 6,200,000 $ 6,200 $ 60,800 $ (30,875) $ 36,125
------ --------- --------- --------- ---------- ----------- -------------
See accompanying notes to financial statements.
F-5
DIXIE FOODS INTERNATIONAL, INC
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CASH FLOWS
PERIOD FROM MAY 11, 2010 (INCEPTION) THROUGH AUGUST 31, 2010
MAY 11, 2010
(INCEPTION)
THROUGH
AUGUST 31, 2010
---------------
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss ...................................................... $ (30,875)
Adjustments to reconcile net (loss) to net
cash provided by (used in) operating activities:
Issuance of common stock for services ....................... 19,000
Change in assets and liabilities
Accounts payable .......................................... 2,936
Accrued expenses .......................................... 5,200
--------------
Net cash provided by (used in) operating activities ........... (3,739)
--------------
CASH FLOWS FROM INVESTING ACTIVITIES
--------------
Net cash from investing activities ............................ --
--------------
CASH FLOWS FROM FINANCING ACTIVITIES
Common stock issued for cash ................................ 48,000
--------------
Net cash provided by financing activities ..................... 48,000
--------------
NET INCREASE IN CASH AND CASH EQUIVALENTS ..................... 44,261
CASH AND CASH EQUIVALENTS, beginning of period ................ --
--------------
CASH AND CASH EQUIVALENTS, end of period ...................... $ 44,261
==============
Supplementary information:
--------------------------
280,000 Shares issued for services to a related party
@ .02 per share .............................................. $ 5,600
==============
520,000 Shares issued for services @.02 per share ............. $ 10,400
==============
150,000 Shares issued for services to directors
@ .02 per share .............................................. $ 3,000
==============
See accompanying notes to financial statements.
F-6
DIXIE FOODS INTERNATIONAL, INC.
(A DEVELOPMENT STAGE COMPANY)
AUGUST 31, 2010
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - DESCRIPTION OF BUSINESS AND DEVELOPMENT STAGE RISK
-----------------------------------------------------------
Dixie Foods International, Inc. (The Company) was formed to operate a specialty
food business for salad dressing, sauces and condiments. The Company was
organized under the laws of the State of Florida. The Company's year end is
August 31. We operate from our office at 115 NE 6th Boulevard, Williston, FL
32696.
Management has evaluated subsequent events, and the impact on the reported
results and disclosures, through October 20, 2010, which is the date these
financial statements were approved by management.
The Company has a limited operating history upon which to base an evaluation of
the current business and future prospects and has yet to fully launch its
services. The Company will continue to be considered a development stage until
it has begun significant operations and is generating significant revenues.
The Company has no revenues to date. Since its inception, the Company has been
dependent upon the receipt of capital investment to fund its continuing
activities. In addition to the normal risks associated with a new business
venture, there can be no assurance that the Company's business plan will be
successfully executed. Our ability to execute our business model will depend on
our ability to obtain additional financing and achieve a profitable level of
operations. There can be no assurance that sufficient financing will be
obtained, or can we give any assurance that we will generate substantial
revenues or that our business operations will prove to be profitable.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
---------------------------------------------------
BASIS OF PRESENTATION
The accompanying financial statements and notes are prepared in accordance with
accounting principles generally accepted in the United States of America.
The accompanying financial statements were prepared assuming that the Company
will continue as a going concern. This basis of accounting contemplates the
recovery of the Company's assets and the satisfaction of its liabilities in the
normal course of operations.
The Company's independent accountants issued a "going concern" opinion on the
Company's August 31, 2010 financial statements, since the Company has
experienced losses from operations from May 11, 2010 (inception) through August
31, 2010. This matter raises substantial doubt about the Company's ability to
continue as a going concern
A summary of the significant accounting policies consistently applied in the
preparation of the accompanying financial statements is as follows:
CASH AND CASH EQUIVALENTS
The Company considers all highly liquid debt instruments with original
maturities of three months or less to be cash equivalents. The Company has no
cash equivalents.
F-7
DIXIE FOODS INTERNATIONAL, INC.
(A DEVELOPMENT STAGE COMPANY)
AUGUST 31, 2010
NOTES TO FINANCIAL STATEMENTS
USE OF ESTIMATES
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect certain reported amounts and disclosures. Accordingly, actual results
could differ from those estimates.
INCOME TAXES
Under the asset and liability method prescribed under ASC 740, Income Taxes, The
Company uses the liability method of accounting for income taxes. The liability
method measures deferred income taxes by applying enacted statutory rates in
effect at the balance sheet date to the differences between the tax basis of
assets and liabilities and their reported amounts on the financial statements.
The resulting deferred tax assets or liabilities are adjusted to reflect changes
in tax laws as they occur. A valuation allowance is provided when it is more
likely than not that a deferred tax asset will not be realized.
The Company recognizes the financial statement benefit of an uncertain tax
position only after considering the probability that a tax authority would
sustain the position in an examination. For tax positions meeting a
"more-likely-than-not" threshold, the amount recognized in the financial
statements is the benefit expected to be realized upon settlement with the tax
authority. For tax positions not meeting the threshold, no financial statement
benefit is recognized. As of August 31, 2010, the Company has had no uncertain
tax positions. The Company recognizes interest and penalties, if any, related to
uncertain tax positions as general and administrative expenses. The Company
currently has no federal or state tax examinations nor has it had any federal or
state examinations since its inception. All of the Company's tax years are
subject to federal and state tax examination.
REVENUE RECOGNITION
The Company recognizes revenue when:
o Persuasive evidence of an arrangement exists;
o Shipment has occurred;
o Price is fixed or determinable; and
o Collectability is reasonably assured
The Company closely follows the provisions of Staff Accounting Bulletin No. 104
as described above. For the period from May 11, 2010 (inception) through August
31, 2010 the Company has recognized no revenues.
EARNINGS (LOSS) PER COMMON SHARE
Basic income (loss) per share is calculated using the weighted-average number of
common shares outstanding during each reporting period. Diluted income per share
includes potentially dilutive securities such as outstanding options and
warrants, using various methods such as the treasury stock or modified treasury
stock method in the determination of dilutive shares outstanding during each
reporting period. Common equivalent shares are excluded from the computation of
net loss per share since their effect is anti-dilutive.
F-8
DIXIE FOODS INTERNATIONAL, INC.
(A DEVELOPMENT STAGE COMPANY)
AUGUST 31, 2010
NOTES TO FINANCIAL STATEMENTS
FAIR VALUE OF FINANCIAL INSTRUMENTS
The Company adopted ASC topic 820, "Fair Value Measurements and Disclosures"
(ASC 820), formerly SFAS No. 157 "Fair Value Measurements," effective January 1,
2009. ASC 820 defines "fair value" as the price that would be received for an
asset or paid to transfer a liability (an exit price) in the principal or most
advantageous market for the asset or liability in an orderly transaction between
market participants on the measurement date. There was no impact relating to the
adoption of ASC 820 to the Company's financial statements.
ASC 820 also describes three levels of inputs that may be used to
measure fair value:
o Level 1: Observable inputs that reflect unadjusted quoted prices for
identical assets or liabilities traded in active markets.
o Level 2: Inputs other than quoted prices included within Level 1 that are
observable for the asset or liability, either directly or indirectly.
o Level 3: Inputs that are generally unobservable. These inputs may be used
with internally developed methodologies that result in management's best
estimate of fair value.
Financial instruments consist principally of cash, prepaid expenses, accounts
payable, and accrued liabilities. The carrying amounts of such financial
instruments in the accompanying balance sheets approximate their fair values due
to their relatively short-term nature. It is management's opinion that the
Company is not exposed to any significant currency or credit risks arising from
these financial instruments.
BUSINESS SEGMENTS
The Company operates in one segment and therefore segment information is not
presented.
RECENT AUTHORITATIVE ACCOUNTING PRONOUNCEMENTS
The Company has adopted all recently issued accounting pronouncements. The
adoption of the accounting pronouncements, including those not yet effective, is
not anticipated to have a material effect on the financial position or results
of operations of the Company.
SUBSEQUENT EVENTS
We have evaluated subsequent events through the date our financial statements
were available to be issued.
F-9
DIXIE FOODS INTERNATIONAL, INC.
(A DEVELOPMENT STAGE COMPANY)
AUGUST 31, 2010
NOTES TO FINANCIAL STATEMENTS
NOTE 3 - EQUITY TRANSACTIONS
----------------------------
COMMON STOCK
On May 11, 2010, the Company issued 3,000,000 shares of common stock to an
initial investor for cash of $3,000.
On June 1, 2010, the Company issued 280,000 shares of common stock for services
rendered at $0.02 per share, for a total of $5,600.
On August 1, 2010, the Company issued 280,000 shares of common stock for
services rendered to a related party at $0.02 per share, for a total of $5,600
(Note 4).
On August 1, 2010, the Company issued 240,000 shares of common stock for
services rendered at $0.02 per share, for a total of $4,800.
On August 1, 2010, the Company issued 2,250,000 shares of common stock at $.02
per share, for a total of $45,000.
On August 1, 2010, the Company issued 150,000 shares of common stock to
directors for services rendered at $0.02 per share, for a total of $3,000.
NOTE 4 - RELATED PARTY
----------------------
On August 1, 2010, the Company issued 280,000 shares of common stock at $0.02 to
its President for services, for a total of $5,600.
NOTE 5 - INCOME TAXES
---------------------
For income tax purposes, the Company has elected to capitalize start-up costs
incurred during the period from May 11, 2010 (inception) through August 31, 2010
totaling $30,875. The start-up costs are being amortized over sixty months
beginning in the year of initial operations.
NOTE 6 - CONCENTRATION OF CREDIT RISK
-------------------------------------
Financial instruments that potentially subject the Company to concentrations of
credit risk consist principally of cash deposits. Accounts at each institution
are insured by the Federal Deposit Insurance Corporation (FDIC) up to $250,000.
At August 31, 2010, the Company had no amounts in excess of FDIC insured limit.
While the Company periodically evaluates the credit quality of the financial
institutions in which it holds deposits, it cannot reasonably alleviate the risk
associated with the sudden possible failures of such institutions.
F-10
DIXIE FOODS INTERNATIONAL, INC.
(A DEVELOPMENT STAGE COMPANY)
AUGUST 31, 2010
NOTES TO FINANCIAL STATEMENTS
NOTE 7 - NET LOSS PER SHARE
---------------------------
Basic loss per common share has been calculated based on the weighted average
number of shares outstanding during the period after giving retroactive effect
to stock splits. There are no dilutive securities at August 31, 2010 for
purposes of computing fully diluted earnings per share. The following reconciles
amounts reported in the financial statements:
Period from
May 11, 2010
(inception) to
August 31, 2010
---------------
Net loss ................................. $ (30,875)
==============
Denominator for basic loss per share -
Basic Weighted average shares ............ 4,029,027
Basic loss per common share .............. Less than .01 per share
NOTE 8 - MANAGEMENT PLAN
------------------------
For the next 12 months, the Company's Plan of Operations is as follows:
The Company's business plan is to raise additional working capital through a
preferred stock offering and to introduce its initial products into the
commercial market.
NOTE 9 - GOING CONCERN
----------------------
As reflected in the accompanying financial statements, the Company had a net
loss for the period from May 11, 2010 (inception) through August 31, 2010 of
$30,875, At August 31, 2010, the Company has no operating revenues. The ability
of the Company to continue as a going concern is dependent on the Company's
ability to further implement its business plan and raise capital. The financial
statements do not include any adjustments that might be necessary if the Company
is unable to continue as a going concern.
The Company is currently a development stage company and its continued existence
is dependent upon the Company's ability to resolve its liquidity problems,
principally by obtaining additional debt financing and/or equity capital. The
Company has yet to generate a significant internal cash flow, and until sales of
products commence, the Company is highly dependent upon debt and equity funding,
should continuing debt and equity funding requirements not be met the Company's
operations may cease to exist.
F-11
DIXIE FOODS INTERNATIONAL, INC.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEETS
NOVEMBER 30, AUGUST 31,
2010 2010
(UNAUDITED) AUDITED
------------- -------------
ASSETS
CURRENT ASSETS
Cash and cash equivalents .................... $ 16,743 $ 44,261
------------- -------------
Total current assets ........................... 16,743 44,261
------------- -------------
Total assets ................................... $ 16,743 $ 44,261
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable ............................. $ 500 $ 2,936
Accrued expenses ............................. 3,750 5,200
Due to shareholder ........................... 732 --
------------- -------------
Total current liabilities ...................... 4,982 8,136
------------- -------------
STOCKHOLDERS' EQUITY
Preferred stock, $.001 par value;
authorized 15,000,000 shares ................ -- --
Common stock, $.001 par value;
authorized 100,000,000 shares;
issued and outstanding 6,200,000 shares ..... 6,200 6,200
Additional paid-in capital ................... 50,300 60,800
Deficit accumulated during the development
stage ....................................... (44,739) (30,875)
------------- -------------
Total stockholders' equity ..................... 11,761 36,125
------------- -------------
Total liabilities and stockholders' equity ..... $ 16,743 $ 44,261
============= =============
See accompanying notes to unaudited financial statements.
F-12
DIXIE FOODS INTERNATIONAL, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF OPERATIONS
FOR THE THREE MONTHS ENDED NOVEMBER 30, 2010 AND
PERIOD FROM MAY 11, 2010 (INCEPTION) THROUGH NOVEMBER 30, 2010
THREE MONTH MAY 11, 2010
PERIOD ENDED (INCEPTION) THROUGH
NOVEMBER 30, 2010 NOVEMBER 30, 2010
----------------- -------------------
NET SALES .......................... $ -- $ --
Cost of sales ...................... -- --
---------------- ------------------
Gross profit ....................... -- --
COSTS AND EXPENSES:
Selling, general and
administrative expenses ......... 13,864 44,739
---------------- ------------------
13,864 44,739
---------------- ------------------
Loss from operations ............... (13,864) (44,739)
INCOME (LOSS) BEFORE INCOME TAXES .. (13,864) (44,739)
INCOME TAXES ....................... -- --
---------------- ------------------
NET INCOME (LOSS) .................. $ (13,864) $ (44,739)
================ ==================
BASIC AND DILUTED NET LOSS PER SHARE (0.00) (0.01)
================ ==================
WEIGHTED AVERAGE SHARES OUTSTANDING
BASIC AND DILUTED ................ 6,200,000 4,997,451
================ ==================
See accompanying notes to unaudited financial statements.
F-13
DIXIE FOODS INTERNATIONAL, INC
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
PERIOD FROM MAY 11, 2010 (INCEPTION) THROUGH NOVEMBER 30, 2010
Deficit
Accumulated
Additional during the Total
Preferred Stock Common Stock Paid-in Development Stockholders'
Shares Par Value Shares Par Value Capital Stage Equity
------ --------- --------- --------- ---------- ----------- -------------
BALANCE, MAY 11, 2010
(INCEPTION) ................. -- -- -- $ -- $ -- $ -- $ --
Common stock issued for
services .................... -- -- 520,000 520 9,880 -- 10,400
Common stock issued for
services - related party .... -- -- 280,000 280 5,320 -- 5,600
Common stock issued for cash
to an initial investor ...... -- -- 3,000,000 3,000 -- -- 3,000
Common stock issued to
directors for services ...... -- -- 150,000 150 2,850 -- 3,000
Common stock issued for cash . -- -- 2,250,000 2,250 42,750 -- 45,000
Net loss August 31, 2010 ... -- -- -- -- -- (30,875) (30,875)
------ --------- --------- --------- ---------- ----------- -------------
BALANCE, August 31, 2010 ..... -- $ -- 6,200,000 $ 6,200 $ 60,800 $ (30,875) $ 36,125
Costs of offering ............ -- -- -- -- (10,500) -- (10,500)
Net loss November 30, 2010 . -- -- -- -- -- (13,864) (13,864)
------ --------- --------- --------- ---------- ----------- -------------
BALANCE, November 30, 2010 ... -- $ -- 6,200,000 $ 6,200 $ 50,300 $ (44,739) $ 11,761
====== ========= ========= ========= ========== =========== =============
See accompanying notes to financial statements.
F-14
DIXIE FOODS INTERNATIONAL, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CASH FLOWS
FOR THE THREE MONTHS ENDED NOVEMBER 30, 2010 AND
PERIOD FROM MAY 11, 2010 (INCEPTION) THROUGH NOVEMBER 30, 2010
THREE MONTH MAY 11, 2010
PERIOD ENDED (INCEPTION) THROUGH
NOVEMBER 30, 2010 NOVEMBER 30, 2010
----------------- -------------------
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss .......................................... $ (13,864) $ (44,739)
Adjustments to reconcile net (loss) to net
cash provided by (used in) operating activities:
Issuance of common stock for services ........... -- 19,000
Change in assets and liabilities
Accounts payable .............................. (2,436) 500
Accrued expenses .............................. (1,450) 3,750
Due to shareholder ............................ 732 732
----------------- -------------------
Net cash provided by (used in) operating activities (17,018) (20,757)
----------------- -------------------
CASH FLOWS FROM INVESTING ACTIVITIES
----------------- -------------------
Net cash from investing activities ................ -- --
----------------- -------------------
CASH FLOWS FROM FINANCING ACTIVITIES
Common stock issued for cash, net of costs ...... (10,500) 37,500
----------------- -------------------
Net cash provided by financing activities ......... (10,500) 37,500
----------------- -------------------
NET INCREASE IN CASH AND CASH EQUIVALENTS ......... (27,518) 16,743
CASH AND CASH EQUIVALENTS, beginning of period .... 44,261 --
----------------- -------------------
CASH AND CASH EQUIVALENTS, end of period .......... $ 16,743 $ 16,743
================= ===================
Supplementary information:
--------------------------
Cash paid for:
Interest ...................................... $ -- $ --
================= ===================
Income taxes .................................. $ -- $ --
================= ===================
280,000 Shares issued for services to a related
party @ .02 per share ............................ $ -- $ 5,600
================= ===================
520,000 Shares issued for services @.02 per share . $ -- $ 10,400
================= ===================
150,000 Shares issued for services to directors
@ .02 per share .................................. $ -- $ 3,000
================= ===================
See accompanying notes to unaudited financial statements.
F-15
DIXIE FOODS INTERNATIONAL, INC.
(A DEVELOPMENT STAGE COMPANY)
NOVEMBER 30, 2010
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - DESCRIPTION OF BUSINESS AND DEVELOPMENT STAGE RISK
-----------------------------------------------------------
Dixie Foods International, Inc. (The Company) was formed to operate a specialty
food business for salad dressing, sauces and condiments. The Company was
organized under the laws of the State of Florida. The Company's year end is
August 31. We operate from our office at 115 N.E. 6th Blvd., Williston, Florida
32696.
Management has evaluated subsequent events, and the impact on the reported
results and disclosures, through February 6, 2011, which is the date these
financial statements were approved by management.
The Company has a limited operating history upon which to base an evaluation of
the current business and future prospects and has yet to fully launch its
services. The Company will continue to be considered a development stage until
it has begun significant operations and is generating significant revenues.
The Company has no revenues to date. Since its inception, the Company has been
dependent upon the receipt of capital investment to fund its continuing
activities. In addition to the normal risks associated with a new business
venture, there can be no assurance that the Company's business plan will be
successfully executed. Our ability to execute our business model will depend on
our ability to obtain additional financing and achieve a profitable level of
operations. There can be no assurance that sufficient financing will be
obtained, or can we give any assurance that we will generate substantial
revenues or that our business operations will prove to be profitable.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
---------------------------------------------------
BASIS OF PRESENTATION
The unaudited financial statements included in this report have been prepared by
the Company pursuant to the rules and regulations of the Securities and Exchange
Commission for interim reporting and include all adjustments (consisting only of
normal recurring adjustments) that are, in the opinion of management, necessary
for a fair presentation. These financial statements have not been audited.
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting principles
have been omitted pursuant to such rules and regulations for interim reporting.
The Company believes that the disclosures contained herein are adequate to make
the information presented not misleading. These financial statements should be
read in conjunction with the financial statements and notes thereto for the year
ended August 31, 2010 included in the Company's Registration Statement on Form
S-1. The financial data for the three month period presented may not necessarily
reflect the results to be anticipated for the complete year ended August 31,
2011.
The accompanying financial statements and notes are prepared in accordance with
accounting principles generally accepted in the United States of America.
F-16
DIXIE FOODS INTERNATIONAL, INC.
(A DEVELOPMENT STAGE COMPANY)
NOVEMBER 30, 2010
NOTES TO FINANCIAL STATEMENTS
The accompanying financial statements were prepared assuming that the Company
will continue as a going concern. This basis of accounting contemplates the
recovery of the Company's assets and the satisfaction of its liabilities in the
normal course of operations.
The Company's independent accountants issued a "going concern" opinion on the
Company's August 31, 2010 financial statements, since the Company has
experienced losses from operations from May 11, 2010 (inception) through
November 30, 2010. This matter raises substantial doubt about the Company's
ability to continue as a going concern
A summary of the significant accounting policies consistently applied in the
preparation of the accompanying financial statements is as follows:
CASH AND CASH EQUIVALENTS
The Company considers all highly liquid debt instruments with original
maturities of three months or less to be cash equivalents. The Company has no
cash equivalents.
USE OF ESTIMATES
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect certain reported amounts and disclosures. Accordingly, actual results
could differ from those estimates.
INCOME TAXES
Under the asset and liability method prescribed under ASC 740, Income Taxes, The
Company uses the liability method of accounting for income taxes. The liability
method measures deferred income taxes by applying enacted statutory rates in
effect at the balance sheet date to the differences between the tax basis of
assets and liabilities and their reported amounts on the financial statements.
The resulting deferred tax assets or liabilities are adjusted to reflect changes
in tax laws as they occur. A valuation allowance is provided when it is more
likely than not that a deferred tax asset will not be realized.
The Company recognizes the financial statement benefit of an uncertain tax
position only after considering the probability that a tax authority would
sustain the position in an examination. For tax positions meeting a
"more-likely-than-not" threshold, the amount recognized in the financial
statements is the benefit expected to be realized upon settlement with the tax
authority. For tax positions not meeting the threshold, no financial statement
benefit is recognized. As of November 30, 2010, the Company has had no uncertain
tax positions. The Company recognizes interest and penalties, if any, related to
uncertain tax positions as general and administrative expenses. The Company
currently has no federal or state tax examinations nor has it had any federal or
state examinations since its inception. All of the Company's tax years are
subject to federal and state tax examination.
F-17
DIXIE FOODS INTERNATIONAL, INC.
(A DEVELOPMENT STAGE COMPANY)
NOVEMBER 30, 2010
NOTES TO FINANCIAL STATEMENTS
REVENUE RECOGNITION
The Company recognizes revenue when:
o Persuasive evidence of an arrangement exists;
o Shipment has occurred;
o Price is fixed or determinable; and
o Collectability is reasonably assured
The Company closely follows the provisions of Staff Accounting Bulletin No. 104
as described above. For the three month period ended November 30, 2010 and the
period from May 11, 2010 (inception) through November 30, 2010 the Company has
recognized no revenues.
EARNINGS (LOSS) PER COMMON SHARE
Basic income (loss) per share is calculated using the weighted-average number of
common shares outstanding during each reporting period. Diluted loss per share
includes potentially dilutive securities such as outstanding options and
warrants, using various methods such as the treasury stock or modified treasury
stock method in the determination of dilutive shares outstanding during each
reporting period. Common equivalent shares are excluded from the computation of
net loss per share since their effect is anti-dilutive.
FAIR VALUE OF FINANCIAL INSTRUMENTS
The Company adopted ASC topic 820, "Fair Value Measurements and Disclosures"
(ASC 820), formerly SFAS No. 157 "Fair Value Measurements," effective January 1,
2009. ASC 820 defines "fair value" as the price that would be received for an
asset or paid to transfer a liability (an exit price) in the principal or most
advantageous market for the asset or liability in an orderly transaction between
market participants on the measurement date. There was no impact relating to the
adoption of ASC 820 to the Company's financial statements.
ASC 820 also describes three levels of inputs that may be used to
measure fair value:
o Level 1: Observable inputs that reflect unadjusted quoted prices for
identical assets or liabilities traded in active markets.
o Level 2: Inputs other than quoted prices included within Level 1 that
are observable for the asset or liability, either directly or
indirectly.
o Level 3: Inputs that are generally unobservable. These inputs may be
used with internally developed methodologies that result in
management's best estimate of fair value.
Financial instruments consist principally of cash, prepaid expenses, accounts
payable, and accrued liabilities. The carrying amounts of such financial
instruments in the accompanying balance sheets approximate their fair values due
to their relatively short-term nature. It is management's opinion that the
Company is not exposed to any significant currency or credit risks arising from
these financial instruments.
F-18
DIXIE FOODS INTERNATIONAL, INC.
(A DEVELOPMENT STAGE COMPANY)
NOVEMBER 30, 2010
NOTES TO FINANCIAL STATEMENTS
RECLASSIFICATIONS
Certain prior period balances have been reclassified to conform to the current
year's presentation. These reclassifications had no impact on previously
reported results of operations or stockholders' equity.
BUSINESS SEGMENTS
The Company operates in one segment and therefore segment information is not
presented.
RECENT AUTHORITATIVE ACCOUNTING PRONOUNCEMENTS
The Company has adopted all recently issued accounting pronouncements. The
adoption of the accounting pronouncements, including those not yet effective, is
not anticipated to have a material effect on the financial position or results
of operations of the Company.
NOTE 3 - EQUITY TRANSACTIONS
----------------------------
COMMON STOCK
On May 11, 2010, the Company issued 3,000,000 shares of common stock to an
initial investor for cash of $3,000.
On June 1, 2010, the Company issued 280,000 shares of common stock for services
rendered at $0.02 per share, for a total of $5,600.
On August 1, 2010, the Company issued 280,000 shares of common stock for
services rendered to a related party at $0.02 per share, for a total of $5,600
(Note 4).
On August 1, 2010, the Company issued 240,000 shares of common stock for
services rendered at $0.02 per share, for a total of $4,800.
On August 1, 2010, the Company issued 2,250,000 shares of common stock at $.02
per share, for a total of $45,000.
On August 1, 2010, the Company issued 150,000 shares of common stock to
directors for services rendered at $0.02 per share, for a total of $3,000.
During the three months ended November 30, 2010 the Company incurred costs to
file its registration statement of $10,500. These costs are offset against
additional paid in capital.
NOTE 4 - RELATED PARTY
----------------------
On August 1, 2010, the Company issued 280,000 shares of common stock at $0.02 to
its President for services, for a total of $5,600.
A shareholder of the Company has paid expenses on behalf of the Company in
exchange for a payable bearing no interest and due on demand. The balance
payable to the shareholder at November 30, 2010 and August 30, 2010 were $732
and $0, respectively.
F-19
DIXIE FOODS INTERNATIONAL, INC.
(A DEVELOPMENT STAGE COMPANY)
NOVEMBER 30, 2010
NOTES TO FINANCIAL STATEMENTS
NOTE 5 - INCOME TAXES
---------------------
For income tax purposes, the Company has elected to capitalize start-up costs
incurred during the period from May 11, 2010 (inception) through November 30,
2010 totaling $44,739. The start-up costs are being amortized over sixty months
beginning in the year of initial operations.
NOTE 6 - CONCENTRATION OF CREDIT RISK
-------------------------------------
Financial instruments that potentially subject the Company to concentrations of
credit risk consist principally of cash deposits. Accounts at each institution
are insured by the Federal Deposit Insurance Corporation (FDIC) up to $250,000.
At November 30, 2010, the Company had no amounts in excess of FDIC insured
limit. While the Company periodically evaluates the credit quality of the
financial institutions in which it holds deposits, it cannot reasonably
alleviate the risk associated with the sudden possible failures of such
institutions.
NOTE 7 - NET LOSS PER SHARE
---------------------------
Basic loss per common share has been calculated based on the weighted average
number of shares outstanding during the period after giving retroactive effect
to stock splits. There are no dilutive securities at November 30, 2010 for
purposes of computing fully diluted earnings per share. The following reconciles
amounts reported in the financial statements:
THREE MONTH MAY 11, 2010
PERIOD ENDED (INCEPTION) THROUGH
NOVEMBER 30, 2010 NOVEMBER 30, 2010
----------------- -------------------
Net loss .............................. $ (13,864) $ (44,739)
================ ==================
Denominator for basic loss per share -
Basic weighted average shares ......... 6,200,000 4,997,451
Basic loss per common share ........... (0.00) (0.01)
NOTE 8 - MANAGEMENT PLAN
------------------------
For the next 12 months, the Company's Plan of Operations is as follows:
Our primary focus over the course of the next 12 months will be to concentrate
on introducing our initial products into the commercial marketplace including
acquiring inventory for sale and establishing channels of distribution for the
marketing of our products.
F-20
DIXIE FOODS INTERNATIONAL, INC.
(A DEVELOPMENT STAGE COMPANY)
NOVEMBER 30, 2010
NOTES TO FINANCIAL STATEMENTS
We were recently formed and all activity to date has been related to our
formation of our business, formulation of our business plan and initial start-up
operations such as formulating and testing recipes, investigating sources of
supply for raw materials and services, investigating potential distribution
channels for our products and development of our proposed financing. Our ability
to proceed with our plan to enter the commercial marketplace with our initial
product depends upon our obtaining adequate financial resources through this
offering. As of November 30, 2010, we had not incurred any material costs or
expenses other than those associated with the formation and financing of our
company.
NOTE 9 - GOING CONCERN
----------------------
As reflected in the accompanying financial statements, the Company had a net
loss for the three month period ended November 30, 2010 of $13,864, and net loss
for the period from May 11, 2010 (inception) through November 30, 2010 of
$44,739, At November 30,2010, the Company has no operating revenues. The ability
of the Company to continue as a going concern is dependent on the Company's
ability to further implement its business plan and raise capital. The financial
statements do not include any adjustments that might be necessary if the Company
is unable to continue as a going concern.
The Company is currently a development stage company and its continued existence
is dependent upon the Company's ability to resolve its liquidity problems,
principally by obtaining additional debt financing and/or equity capital. The
Company has yet to generate a significant internal cash flow, and until sales of
products commence, the Company is highly dependent upon debt and equity funding,
should continuing debt and equity funding requirements not be met the Company's
operations may cease to exist.
F-21
No dealer, salesman or other person is authorized to give any information or to
represent anything not contained in this prospectus. You must not rely on any
unauthorized information or representations. This Prospectus is an offer to sell
only the shares offered hereby, but only under circumstances and in
jurisdictions where it is lawful to do so. The information contained in this
prospectus is current only as of its date.
20,000 Shares of Series A Convertible Preferred Stock
DIXIE FOODS INTERNATIONAL, INC.
PROSPECTUS
__________, 2011
TABLE OF CONTENTS
Prospectus Summary ............................................................1
Risk Factors ..................................................................2
Use of Proceeds ...............................................................7
Market for the Shares .........................................................7
Dividend Policy ...............................................................8
Determination of Offering Price ...............................................8
Dilution ......................................................................8
Capitalization ................................................................9
Special Note Regarding Forward Looking Statements .............................9
Plan of Operation ............................................................10
Business .....................................................................11
Management ...................................................................15
Executive Compensation .......................................................16
Security Ownership of certain Beneficial Owners and Management ...............17
Certain Relationships and Related Transactions ...............................17
Description of Securities ....................................................18
Shares Eligible for Future Sale ..............................................21
Indemnification ..............................................................22
Plan of Distribution .........................................................22
Resale of our Shares .........................................................23
Legal Matters ................................................................24
Experts ......................................................................24
Additional Information .......................................................24
Subscription Agreement ....................................................EX-99
Financial Statements ........................................................F-1
Until _____________, the 90th day after the date of this prospectus,
all dealers effecting transactions in these securities, whether or not
participating in this offering, may be required to deliver a prospectus. This is
in addition to a dealer's obligation to deliver a prospectus when acting as an
underwriter and with respect to an unsold allotment or subscription.
PART II - INFORMATION NOT REQUIRED IN PROSPECTUS
Item 13. Other Expenses of Issuance and Distribution.
The following table sets forth the expenses in connection with the
issuance and distribution of the securities offered hereby.
Registration Fee ................................. $ 21
Printing Expenses* ............................... 500
Legal Fees and Expenses* ......................... 17,000
Accounting Fees and Expenses* .................... 1,500
Blue Sky Fees and Expenses* ...................... 1,500
Transfer Agent Fees and Expenses* ................ 1,000
Misc.* ........................................... 479
-------
Total ............................................ $22,000
* Estimated
Item 14. Indemnification of Directors and Officers.
The Florida Business Corporation Act provides that a person who is successful on
the merits or otherwise in defense of an action because of service as an officer
or director or a corporation, such person is entitled to indemnification of
expenses actually and reasonably incurred in such defense. F.S. 607.0850(3)
Such act also provides that the corporation may indemnify an officer or
director, advance expenses, if such person acted in good faith and in a manner
the person reasonably believed to be in, or not opposed to, the best interests
of the corporation and, with respect to a criminal action, had no reasonable
cause to believe his conduct was unlawful. F.S. 607.0850(1)(2).
A court may order indemnification of an officer or director if it determines
that such person is fairly and reasonably entitled to such indemnification in
view of all the relevant circumstances. F.S. 607.0850(9).
Reference is hereby made to Article IV of Registrant's By-laws which is filed as
Exhibit 3.2 and Article 5 of the Articles of Incorporation which is filed as
Exhibit 3.1. Under such provisions the Registrant is required to indemnify its
officers and directors to the fullest extent such indemnification may be made
under the provisions of the Florida Business Corporation Act.
Item 15. Recent Sales of Unregistered Securities.
The following provides information concerning all sales of our
securities which we made within the last three years which were not registered
under the Securities Act of 1933.
In April 2010 we issued 3,000,000 shares of our common stock to our founder,
Michael H. Jordan for $3,000. We believe that the sale was exempt from
registration under Section 4(2) of the Securities Act of 1933. The securities
were not offered publicly but only to our founder. We believe the shareholder
was knowledgeable and sophisticated in investment matters. The shareholder
acknowledged that the shares were not registered under the Securities Act of
1933 and agreed to not sell or transfer the shares without complying with the
registration requirements of the said Act or pursuant to an exemption from such
registration requirements. The certificate or confirmation for such shares
contains a legend restricting transfer of the shares without registration under
the Securities Act of 1933 or an exemption from such registration and a stop
transfer order has been lodged against such shares.
II-1
In July and August 2010 we issued shares of our common stock for services as
follows. We believe that the sales were exempt from registration under Section
4(2) of the Securities Act of 1933. The securities were not offered publicly but
only to identified persons who provided the specific consideration referred to
herein. We believe the shareholders were knowledgeable and sophisticated in
investment matters. Each stockholder acknowledged that the shares were not
registered under the Securities Act of 1933 and agreed to not sell or transfer
the shares without complying with the registration requirements of the said Act
or pursuant to an exemption from such registration requirements. The
certificates or confirmation for such shares contains a legend restricting
transfer of the shares without registration under the Securities Act of 1933 or
an exemption from such registration and a stop transfer order has been lodged
against such shares.
Stockholder Shares Consideration
----------- ------- -------------
Robert E. Jordan 280,000 Services as officer valued at $5,600.
Tony Joffe 240,000 Services as officer valued at $4,800.
Joel Bernstein 280,000 Legal services valued at $5,600.
Robert M. Snibbe, Jr. 50,000 Services as a director valued at $1,000.
Robert P. Bova 50,000 Services as a director valued at $1,000.
Steven Silberman 50,000 Services as a director valued at $1,000.
In July and August 2010 we sold 2,250,000 shares of our common stock to 9
accredited investors for $45,000. No broker dealer was involved in the sale of
the shares and no commissions or other remuneration was paid in connection with
these sales. The shares were issued in a private placement to accredited
investors pursuant to an exemption from registration under the Securities Act of
1933 pursuant to Section 4(2) thereof. The shareholders who received the
forgoing shares signed a subscription agreement acknowledging that the shares
were not registered under the Securities Act of 1933, and could only be sold
under a registration or exemption from registration. Each certificate or
confirmation for such shares contains a restrictive legend concerning the
foregoing restrictions on transfer and a stop transfer order has been lodged
against such shares. Each investor was offered access to our books and records
and the opportunity to ask our officers questions and receive answers concerning
the terms and condition of the offering and the company.
Item 26. Exhibits.
The following Exhibits are filed:
NUMBER DESCRIPTION
------ -----------
3.1* Articles of Incorporation
3.2* By-laws
5.1* Legal Opinion of Joel Bernstein, Esq. regarding the legality of the
securities being issued
14.1* Code of Ethics
23.1* Consent of Joel Bernstein, Esq. is included in Exhibit 5.1
23.2 Consent of registered independent public accounting firm
99.1* Subscription Agreement
_________
* Previously filed
II-2
Item 17. Undertakings.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel, the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the questions whether such indemnification by it is
against public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
The undersigned registrant hereby undertakes to:
(1) File, during any period in which it offers or sells securities, a post
effective amendment to this registration statement to:
(i) Include any prospectus required by Section 10(a)(3) of the
Securities Act;
(ii) Reflect in the prospectus any facts or events which, individually or
together, represent a fundamental change in the information 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 Commission pursuant to Rule 424(b) if, in
the aggregate, the changes in volume and price represent no more
than a 20 percent change in the maximum aggregate offering price set
forth in the "Calculation of Registration Fee" table in the
effective registration statement; and
(iii) Include any additional or changed material information on the plan
of distribution.
(2) For determining liability under the Securities Act, treat each
post-effective amendment as a new registration statement of the securities
offered, and the offering of the securities at that time to be the initial
bona fide offering.
(3) File a post-effective amendment to remove from registration any of the
securities that remain unsold at the end of the offering.
(4) That, for the purpose of determining liability of the registrant under the
Securities Act of 1933 to any purchaser in the initial distribution of the
securities: The undersigned registrant undertakes that in a primary
offering of securities of the undersigned registrant pursuant to this
registration statement, regardless of the underwriting method used to sell
the securities to the purchaser, if the securities are offered or sold to
such purchaser by means of any of the following communications, the
undersigned registrant will be a seller to the purchaser and will be
considered to offer or sell such securities to such purchaser:
II-3
i. Any preliminary prospectus or prospectus of the undersigned
registrant relating to the offering required to be filed pursuant to
Rule 424;
ii. Any free writing prospectus relating to the offering prepared by or
on behalf of the undersigned registrant or used or referred to by
the undersigned registrant;
iii. The portion of any other free writing prospectus relating to the
offering containing material information about the undersigned
registrant or its securities provided by or on behalf of the
undersigned registrant; and
iv. Any other communication that is an offer in the offering made by the
undersigned registrant to the purchaser.
II-4
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has
duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Williston, State of
Florida on February 18, 2011.
DIXIE FOODS INTERNATIONAL, INC.
By: /s/ Robert E. Jordan
------------------------
Robert E. Jordan
President
In accordance with the requirements of the Securities Act of 1933, this
registration statement was signed by the following persons in the capacities and
on the dates stated.
Signature Title Date
--------- ----- -----
/s/ Robert E. Jordan President (principal executive February 18, 2011
-------------------- officer and principal accounting
Robert E. Jordan officer) and director
/s/ Robert M. Snibbe, Jr. * Director February 18, 2011
-------------------------
Robert M. Snibbe, Jr.
/s/ Robert P. Bova * Director February 18, 2011
------------------
Robert P. Bova
/s/ Steven Silberman * Director February 18, 2011
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Steven Silberman
* By /s/ Robert E. Jordan
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Robert E. Jordan
Attorney-in-Fact
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* Robert E. Jordan, pursuant to powers of attorney dated November 17, 2010,
filed in Registrant's initial registration statement on Form S-1 on
November 17, 2010.
II-