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EX-31 - RULE 13A-14(A) OR RULE 15D-14(A) CERTIFICATION - Preferred Restaurant Brands, Inc.ex_31-1.htm
EX-32 - CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350 - Preferred Restaurant Brands, Inc.ex_32-1.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-K /A

Amendment No. 1

(Mark One)

 

x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the fiscal year ended August 31, 2013

 

or

 

o  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from _______________ to _______________

 

Commission file number 000-54536

 

DIXIE FOODS INTERNATIONAL, INC.

(Exact name of registrant as specified in its charter)

 

Florida

  

80-0608195

State or other jurisdiction of

incorporation or organization

  

(I.R.S. Employer

Identification No.)

 

115 N.E. 6th Blvd. Williston, FL

  

32696

(Address of principal executive offices)

  

(Zip Code)

 

Registrant’s telephone number, including area code (800) 366-5174

 

Securities registered pursuant to Section 12(b) of the Act: None

 

Securities registered pursuant to section 12(g) of the Act:

 

Common Stock

(Title of class)

 

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

o Yes  x No

 

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act.

o Yes  x No

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

x Yes  o No

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

x Yes  o No

 

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of the registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.

o

 



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.

 

Large accelerated filer

o

Accelerated filer

o

Non-accelerated filer

o

Smaller reporting company

x

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act)

o Yes  x No

 

As of December 6, 2013 issuer had  8,006,000 shares of common stock issued and outstanding.

 

As of February 28, 2013 the aggregate market value of our common stock held by non-affiliates of registrant was $1,575,420 based on the last stock sale on February 28, 2013.

 

DOCUMENTS INCORPORATED BY REFERENCE

 

None.

 

EXPLANATORY NOTE

 

This Amendment No. 1 on Form 10-K/A to Form 10-K for the year ended August 31, 2013 is being filed to provide a revised accountants’ opinion covering all periods presented in the financial statements herein. This Amendment is not intended to update other information presented in this report as originally filed other than Item 8 which is included in this Amendment No. 1. This Amendment No. 1 also provides the Registrant’s correct Commission File Number on the cover page.

 

 

PART II

 

Item 8.  Financial Statements and Supplementary Data

 

Please see our Financial Statements beginning on page F-1 of this annual report

 

- 2 -



Dixie Foods International, Inc.

 

INDEX TO FINANCIAL STATEMENTS

 

  

 

Page Number

  

 

  

Report of Independent Registered Public Accounting Firm

 

F-2

  

 

 

Consolidated Balance Sheets at August 31, 2013 and 2012 

 

F-3

  

 

 

Consolidated Statements of Operations -

For the Years Ended August 31, 2013 and 2012

 

F-4

  

 

 

Consolidated Statements of Cash Flows -

For the Years Ended August 31, 2013 and 2012

 

F-5

  

 

 

Consolidated Statements of Changes in Shareholders’ Equity -

For the Years Ended August 31, 2013 and 2012

 

F-6

  

 

 

Notes to the Consolidated Financial Statements

 

F-7

 

F-1



 

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM


To the Board of Directors and Stockholders

Dixie Foods International, Inc.


We have audited the accompanying consolidated balance sheets of Dixie Foods International, Inc., as of August 31, 2013 and 2012, and the related consolidated statements of operations, stockholders’ deficit and cash flows for the years then ended and for the period from inception on May 11, 2010 through August 31, 2013 . These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated 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 audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, 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 consolidated financial statements referred to above present fairly, in all material respects, the financial position of Dixie Foods International, Inc., as of August 31, 2013 and 2012, and the results of their operations and cash flows for the years then ended and for the period from inception on May 11, 2010 through August 31, 2013 , in conformity with U.S. generally accepted accounting principles.


The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 9 to the consolidated financial statements, the Company had accumulated losses of $144,755 as of August 31, 2013 which raises substantial doubt about its ability to continue as a going concern. Management’s plans concerning these matters are also described in Note 9. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.


/s/ Sadler, Gibb & Associates, LLC


Salt Lake City, UT

December 16, 2013

 

office  801.783.2950

fax      801.783.2960

 

www.sadlergibb.com | 2455 East Parleys Way Suite 320, Salt Lake City, UT 84109

 

F-2



Dixie Foods International, Inc and Subsidiary

(A Development Stage Company)

Consolidated Balance Sheets

 

  

 

August 31, 2013

 

 

August 31, 2012

 

  

 

 

 

 

 

 

Assets

 

 

 

 

 

 

  

 

 

 

 

 

 

Current assets

 

 

 

 

 

 

Cash and cash equivalents

 

$

762

 

 

$

4,370

 

Inventories

 

 

8,781

 

 

 

9,565

 

Prepaid expenses

 

 

3,271

 

 

 

3,271

 

Total current assets

 

 

12,814

 

 

 

17,206

 

  

 

 

 

 

 

 

 

 

Property and equipment, net

 

 

2,049

 

 

 

2,722

 

  

 

 

 

 

 

 

 

 

Total assets

 

$

14,863

 

 

$

19,928

 

  

 

 

 

 

 

 

 

 

Liabilities and Stockholders’ Equity (Deficit)

 

 

 

 

 

 

 

 

  

 

 

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

 

 

Accounts payable

 

$

7,077

 

 

$

7,034

 

Accrued expenses

 

 

7,000

 

 

 

6,400

 

Due to shareholder

 

 

8,691

 

 

 

1,944

 

Total current liabilities

 

 

22,768

 

 

 

15,378

 

  

 

 

 

 

 

 

 

 

Stockholders’ equity (deficit)

 

 

 

 

 

 

 

 

  

 

 

 

 

 

 

 

 

Preferred stock, $.001 par value; authorized 15,000,000 shares; issued and outstanding 0 shares at August 31, 2013 and August 31, 2012

 

 

 

 

 

 

Common stock, $.001 par value; authorized 100,000,000 shares; issued and outstanding 7,506,000 shares at August 31, 2013, 6,671,000 shares at August 31, 2012

 

 

7,506

 

 

 

6,671

 

Additional paid-in capital

 

 

129,344

 

 

 

113,479

 

Deficit accumulated during the development stage

 

 

(144,755

)

 

 

(115,600

)

Total stockholders’ equity (deficit)

 

 

(7,905

)

 

 

4,550

 

Total liabilities and stockholders’ equity (deficit)

 

$

14,863

 

 

$

19,928

 

 

See accompanying notes to audited financial statements.

 

F-3



Dixie Foods International, Inc and Subsidiary

(A Development Stage Company)

Consolidated Statement of Operations

For the Years Ended August 31, 2013 and 2012 and

Period from May 11, 2010 (inception) through August 31, 2013


 

 

 

 

 

MAY 11, 2010

 

  

 

YEARS ENDED

 

 

(INCEPTION)

 

  

 

AUGUST 31,

 

 

THROUGH

 

  

 

2013

 

 

2012

 

 

AUGUST 31, 2013

 

  

 

 

 

 

 

 

 

 

 

Net sales

 

$

1,730

 

 

$

711

 

 

$

2,801

 

Cost of sales

 

 

785

 

 

 

176

 

 

 

1,461

 

Gross profit

 

 

945

 

 

 

535

 

 

 

1,340

 

  

 

 

 

 

 

 

 

 

 

 

 

 

Costs and expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Selling, general and administrative expenses

 

 

29,428

 

 

 

44,934

 

 

 

144,783

 

Depreciation

 

 

672

 

 

 

576

 

 

 

1,312

 

  

 

 

30,100

 

 

 

45,510

 

 

 

146,095

 

Loss from operations

 

 

(29,155

)

 

 

(44,975

)

 

 

(144,755

)

  

 

 

 

 

 

 

 

 

 

 

 

 

  

 

 

 

 

 

 

 

 

 

 

 

 

Loss before income taxes

 

 

(29,155

)

 

 

(44,975

)

 

 

(144,755

)

Income taxes

 

 

 

 

 

 

 

 

 

Net loss

 

$

(29,155

)

 

$

(44,975

)

 

$

(144,755

)

  

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted net loss per share

 

 

 

 

 

 

 

 

 

 

  

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding
Basic and diluted

 

 

7,272,291

 

 

 

6,603,295

 

 

 

 

 

 

See accompanying notes to audited financial statements.

 

F-4



Dixie Foods International, Inc and Subsidiary

(A Development Stage Company)

Consolidated Statement of Cash Flows

For the Years Ended August 31, 2013 and 2012 and

Period from May 11, 2010 (inception) through August 31, 2013

 

  

 

 

 

 

 

 

 

MAY 11, 2010

 

  

 

YEARS ENDED

 

 

(INCEPTION)

 

  

 

AUGUST 31,

 

 

THROUGH

 

  

 

2013

 

 

2012

 

 

AUGUST 31, 2013

 

  

 

 

 

 

 

 

 

 

 

Cash flows from operating activities

 

 

 

 

 

 

 

 

 

Net loss

 

$

(29,155

)

 

$

(44,975

)

 

$

(144,755

)

Adjustments to reconcile net (loss) to net cash provided by (used in) operating activities:

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation

 

 

672

 

 

 

576

 

 

 

1,312

 

Issuance of common stock for services

 

 

3,200

 

 

 

 

 

 

22,200

 

Change in assets and liabilities

 

 

 

 

 

 

 

 

 

 

 

 

Inventories

 

 

784

 

 

 

(9,565

)

 

 

(8,781

)

Prepaid expenses

 

 

 

 

 

(3,271

)

 

 

(3,271

)

Accounts payable

 

 

44

 

 

 

6,585

 

 

 

7,077

 

Accrued expenses

 

 

600

 

 

 

850

 

 

 

7,000

 

Due to shareholder

 

 

6,747

 

 

 

(3,000

)

 

 

8,691

 

Net cash (used in) operating activities

 

 

(17,108

)

 

 

(52,800

)

 

 

(110,527

)

  

 

 

 

 

 

 

 

 

 

 

 

 

Cash flows from investing activities

 

 

 

 

 

 

 

 

 

 

 

 

Purchases of property and equipment

 

 

 

 

 

(1,446

)

 

 

(3,361

)

Net cash (used in) investing activities

 

 

 

 

 

(1,446

)

 

 

(3,361

)

  

 

 

 

 

 

 

 

 

 

 

 

 

Cash flows from financing activities

 

 

 

 

 

 

 

 

 

 

 

 

Common stock issued for cash

 

 

13,500

 

 

 

 

 

 

61,500

 

Preferred stock issued for cash

 

 

 

 

 

4,200

 

 

 

70,650

 

Payment of offering costs

 

 

 

 

 

 

 

 

(17,500

)

Net cash provided by  financing activities

 

 

13,500

 

 

 

4,200

 

 

 

114,650

 

  

 

 

 

 

 

 

 

 

 

 

 

 

Net increase (decrease) in cash and cash equivalents

 

 

(3,608

)

 

 

(50,046

)

 

 

762

 

Cash and cash equivalents, beginning of year

 

 

4,370

 

 

 

54,416

 

 

 

 

Cash and cash equivalents, end of year

 

$

762

 

 

$

4,370

 

 

$

762

 

  

 

 

 

 

 

 

 

 

 

 

 

 

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

 

40,000 Shares issued for services to a related party @ .02 per share

 

$

800

 

 

$

 

 

$

800

 

20,000 Shares issued for services @.02 per share

 

$

400

 

 

$

 

 

$

400

 

100,000 Shares issued for services to directors @ .02 per share

 

$

2,000

 

 

$

 

 

$

2,000

 

 

See accompanying notes to audited financial statements.

 

F-5



Dixie Foods International, Inc and Subsidiary

(A Development Stage Company)

Consolidated Statements of Changes in Stockholders’ Deficit

Period from May 11, 2010 (inception) through August 31, 2013

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

Preferred stock issued for cash, net of costs

 

 

4,430

 

 

 

4

 

 

 

 

 

 

 

 

 

48,946

 

 

 

 

 

 

48,950

 

Net loss August 31, 2011

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(39,750

)

 

 

(39,750

)

Balance, August 31, 2011

 

 

4,430

 

 

$

4

 

 

 

6,200,000

 

 

$

6,200

 

 

$

109,746

 

 

$

(70,625

)

 

$

45,325

 

Preferred stock issued for cash, net of costs

 

 

280

 

 

 

1

 

 

 

 

 

 

 

 

 

4,199

 

 

 

 

 

 

4,200

 

Conversion of 4710 shares of preferred to common

 

 

(4,710

)

 

 

(5

)

 

 

471,000

 

 

 

471

 

 

 

(466

)

 

 

 

 

 

 

Net loss August 31, 2012

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(44,975

)

 

 

(44,975

)

Balance, August 31, 2012

 

 

 

 

$

 

 

 

6,671,000

 

 

$

6,671

 

 

$

113,479

 

 

$

(115,600

)

 

$

4,550

 

Common stock issued for cash

 

 

 

 

 

 

 

 

675,000

 

 

 

675

 

 

 

12,825

 

 

 

 

 

 

13,500

 

Common stock issued for services - related party

 

 

 

 

 

 

 

 

40,000

 

 

 

40

 

 

 

760

 

 

 

 

 

 

800

 

Common stock issued for services

 

 

 

 

 

 

 

 

20,000

 

 

 

20

 

 

 

380

 

 

 

 

 

 

400

 

Common stock issued to directors for services

 

 

 

 

 

 

 

 

100,000

 

 

 

100

 

 

 

1,900

 

 

 

 

 

 

2,000

 

Net loss August 31, 2013

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(29,155

)

 

 

(29,155

)

Balance, August 31, 2013 

 

 

 

 

$

 

 

 

7,506,000

 

 

$

7,506

 

 

$

129,344

 

 

$

(144,755

)

 

$

(7,905

)

 

See accompanying notes to audited financial statements.

 

F-6



DIXIE FOODS INTERNATIONAL, INC. AND SUBSIDIARY

(A DEVELOPMENT STAGE COMPANY)

YEARS ENDED AUGUST 31, 2013 AND 2012

NOTES TO CONSOLIDATED AUDITED 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.


On January 6, 2012, the Company formed Dixie Sauce Co, Inc. (Dixie Sauce) a corporation as a wholly owned subsidiary of the Company and transferred all assets and liabilities related to its specialty foods business to this subsidiary.


The Company has a limited operating history upon which to base an evaluation of the current business and future prospects and has yet to achieve substantial commercial sales of its initial products. The Company will continue to be considered a development stage entity until it has begun significant operations and is generating significant revenues.


The Company has minimal 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 have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”).


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, 2013 and 2012 financial statements, since the Company has experienced losses from operations from May 11, 2010 (inception) through August 31, 2013. 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:


Principles of Consolidation


The accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiary Dixie Sauce. All significant intercompany balances have been eliminated in consolidation.


Cash and Cash equivalents


For purposes of reporting within the consolidated statements of cash flows, the Company and its subsidiary considers all cash on hand, cash accounts not subject to withdrawal restrictions or penalties and all highly liquid debt instruments purchased with a maturity of three months or less to be cash and cash equivalents.

 

F-7



DIXIE FOODS INTERNATIONAL, INC. AND SUBSIDIARY

(A DEVELOPMENT STAGE COMPANY)

YEARS ENDED AUGUST 31, 2013 AND 2012

NOTES TO CONSOLIDATED AUDITED FINANCIAL STATEMENTS

 

Use of Estimates


The preparation of financial statements in conformity with generally accepted accounting principles accepted in the United States of America requires Management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.


Inventories


Inventories are valued at the lower of cost (first-in, first-out) or market, and include finished goods.

 

  

 

August 31, 2013

 

 

August 31, 2012

 

Inventories

 

$

8,781

 

 

$

9,565

 

  

 

$

8,781

 

 

$

9,565

 


Property and equipment


The Company records property, equipment at historical cost. Expenditures for maintenance and repairs are recorded to expense; additions and improvements are capitalized. The Company generally provides for depreciation using the straight-line method at rates that approximate the estimated useful lives of the assets.


Asset Classification

 

Estimated Useful Life (years)

 

Computers and software

 

 

5

 


 

  

 

August 31, 2013

 

 

August 31, 2012

 

Computer Equipment

 

$

3,361

 

 

$

3,361

 

Less: Accumulated depreciation

 

 

(1,312

)

 

 

(639

)

Property and Equipment, net

 

$

2,049

 

 

$

2,722

 


Depreciation for the fiscal year end periods ended August 31, 2013 and 2012 was $672 and $576, respectively.


Preferred Stock


At August 31, 2013 and August 31, 2012, the Company had 0 shares outstanding, respectively of its Series A Convertible Preferred Stock (“Series A”). Series A has a stated liquidation preference value of $15 per share, and each preferred share is convertible to 100 shares of the Company’s common stock upon written notice of the record holder to the Company at any time.


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.

 

F-8



DIXIE FOODS INTERNATIONAL, INC. AND SUBSIDIARY

(A DEVELOPMENT STAGE COMPANY)

YEARS ENDED AUGUST 31, 2013 AND 2012

NOTES TO CONSOLIDATED AUDITED FINANCIAL STATEMENTS

 

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, 2013, 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 years ended August 31, 2013 and 2012 the Company has recognized $1,730 and $711, respectively of revenues and for the period from May 11, 2010 (inception) through August 31, 2013 the Company has recognized $2,801 in revenues.


Cost of Goods Sold


Cost of goods sold includes cost of inventories sold.


Earnings (loss) Per Common Share


The Company adopted FASB ASC 260, Earnings Per Share. Basic earnings (loss) per share is based on the weighted effect of all common shares issued and outstanding and is calculated by dividing net income (loss) available to common stockholders by the weighted average shares outstanding during the period. Diluted earnings per share is calculated by dividing net income available to common stockholders by the weighted average number of common shares used in the basic earnings per share calculation plus the number of common shares, if any, that would be issued assuming conversion of all potentially dilutive securities outstanding. For the periods ended August 31, 2013 and August 31, 2012, no potentially issuable shares were reflected in a diluted calculation as the inclusion of potentially issuable shares would be anti-dilutive.


Fair value of Financial Instruments


The Company has adopted FASB – ASC Topic 825, Financial Instruments, and ASC Topic 820, Fair Value Measurements and Disclosures, which establishes a framework for measuring fair value in U.S. GAAP and expands disclosures about fair value measurements. To increase consistency and comparability in fair value measurements and related disclosures, it establishes a three-level valuation hierarchy of valuation techniques based on observable and unobservable inputs, which may be used to measure fair value and include the following:

 

F-9



DIXIE FOODS INTERNATIONAL, INC. AND SUBSIDIARY

(A DEVELOPMENT STAGE COMPANY)

YEARS ENDED AUGUST 31, 2013 AND 2012

NOTES TO CONSOLIDATED AUDITED FINANCIAL STATEMENTS

 

Level 1  Quoted market prices available in active markets for identical assets or liabilities as of the reporting date.


Level 2  Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date.


Level 3  Pricing inputs that are generally observable inputs and are not corroborated by market data.


The carrying amounts of the Company’s financial assets and liabilities, such as cash, accounts payable, and accrued expenses, approximate their fair values because of the short maturity of these instruments.


The Company does not have any assets or liabilities measured at fair value on a recurring or a non-recurring basis. Consequently, the Company did not have any fair value adjustments for assets and liabilities measured at fair value as of August 31, 2013 or 2012, nor gains or losses are reported in the statements of operations that are attributable to the change in unrealized gains or losses related to those assets and liabilities still held at the reporting date for the years ended August 31, 2013 and 2012.


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 - STOCKHOLDERS’ EQUITY


Our authorized capital stock consists of 100,000,000 shares of common stock, $0.001 par value per share, and 15,000,000 shares of preferred stock, par value $0.001 per share.  As of August 31, 2013 and 2012, there are 7,506,000 and 6,671,000 shares of common stock issued and outstanding, respectively and 0 shares of preferred stock issued and outstanding, respectively.


Common Stock


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 therefore. 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 non-assessable.


During the twelve month period ended August 31, 2013, the Company sold 675,000 shares of Common Stock to four private investors at $0.02 per share, for a total of $13,500.


In June 2012 our Board of Directors approved the issuance of 20,000 shares of common stock to each of our five directors, 100,000 shares in total, 40,000 shares of our common stock to our Vice President as compensation and 20,000 shares of our common stock for legal services rendered. Such issuances were subject to our common stock being approved for broker dealer market making by FINRA and initiation of trading. Such conditions were met as of December 12, 2012.

 

F-10



DIXIE FOODS INTERNATIONAL, INC. AND SUBSIDIARY

(A DEVELOPMENT STAGE COMPANY)

YEARS ENDED AUGUST 31, 2013 AND 2012

NOTES TO CONSOLIDATED AUDITED FINANCIAL STATEMENTS


On December 12, 2012, the Company issued 20,000 shares of common stock for legal services rendered at $0.02 per share, for a total of $400.


On December 12, 2012, the Company issued 40,000 shares of common stock for services rendered to the Company’s Vice President a related party at $0.02 per share, for a total of $800.


On December 12, 2012, the Company issued 100,000 shares of common stock to directors for services rendered at $0.02 per share, for a total of $2,000.


Subsequently, On October 1, 2013 the Company sold 500,000 shares of its common stock to a private investor at $0.08 per share, for a total of $40,000.


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.


During the fiscal year ended August 31, 2012, the Company sold 280 shares of Series A Convertible Preferred Stock at $15.00 per share, for a total of $4,200. Each share of Series A Convertible Preferred Stock may be converted into 100 shares of our common stock.


As of August 31, 2012 all Series A Convertible Preferred Stock has been converted to our Common Stock.


NOTE 4 - RELATED PARTY


A shareholder of the Company has paid expenses on behalf of the Company in exchange for a payable note bearing no interest and due on demand. The balances payable to the shareholder at August 31, 2013 and August 31, 2012 were $8,691 and $1,944 respectively.


NOTE 5 - INCOME TAXES


For income tax purposes, the Company has elected to capitalize start-up costs incurred during the period from May 11, 2011 (inception) through August 31, 2013 totaling $144,755. 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, 2013, 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-11



DIXIE FOODS INTERNATIONAL, INC. AND SUBSIDIARY

(A DEVELOPMENT STAGE COMPANY)

YEARS ENDED AUGUST 31, 2013 AND 2012

NOTES TO CONSOLIDATED AUDITED 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.

 

The following reconciles amounts reported in the financial statements:


  

 

YEAR ENDED

 

 

YEAR ENDED

 

  

 

AUGUST 31,

 

 

AUGUST 31,

 

  

 

2013

 

 

2012

 

  

 

 

 

 

 

 

Net loss

 

$

(29,155

)

 

$

(44,975

)

  

 

 

 

 

 

 

 

 

Denominator for basic loss per share -
Basic and diluted weighted average shares

 

 

7,272,291

 

 

 

6,603,295

 

  

 

 

 

 

 

 

 

 

Basic loss per common share

 

 

 

 

 

 

 

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 increasing sales of our initial products in the commercial marketplace and establishing additional channels of distribution for the marketing of our products.

 

NOTE 9 - GOING CONCERN

 

As reflected in the accompanying financial statements, the Company had a net loss for the twelve month  period ended August 31, 2013 of $29,155 and a net loss for the period from May 11, 2010 (inception) through August 31, 2013 of $144,755, At August 31, 2013, the Company has minimal 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 increase beyond current levels, 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.

 

NOTE 10 - SUBSEQUENT EVENTS


The Company has evaluated events and transactions that occurred subsequent to August 31, 2013 through December 6, 2013, the date the financial statements were issued, for potential recognition or disclosure in the accompanying financial statements. On October 1, 2013 the Company sold 500,000 shares of its common stock to a private investor at $0.08 per share, for $40,000. Other than the disclosures shown, the Company did not identify any events or transactions that should be recognized or disclosed in the accompanying financial statements.

 

F-12



PART IV

 

Item 15. Exhibits

 

3.1

Articles of Incorporation. (Incorporated by Reference to Exhibit 3.1 to Registrant’s Registration Statement on Form S-1 filed November 17, 2010)

  

  

3.2

By-laws. (Incorporated by Reference to Exhibit 3.2 to Registrant’s Registration Statement on Form S-1 filed November 17, 2010)

  

  

10.1

Contribution to capital letter agreement. (Incorporated by Reference to Exhibit 10.1 to Registrant’s Registration Statement on Form S-1/A-3 filed March 17, 2011)

  

  

14.1

Code of Ethics. (Incorporated by Reference to Exhibit 14.1 to Registrant’s Registration Statement on Form S-1 filed November 17, 2010)

  

  

21

Subsidiaries of the Registrant. (Incorporated by Reference to Exhibit 21 to Registrant’s Annual Report on Form 10-K filed December 16, 2013)

  

  

31.1

Certification pursuant to Rule 13a-14(a) or Rule 15d-14(a)

  

  

32.1

Certification pursuant to 18 U.S.C. Section 1350

  

  

101.INS

XBRL Instance Document.**

  

  

101.SCH

XBRL Taxonomy Extension Schema Document.**

  

  

101.CAL

XBRL Taxonomy Extension Calculation Linkbase Document.**

  

  

101.DEF

XBRL Taxonomy Extension Definition Linkbase Document.**

  

  

101.LAB

XBRL Taxonomy Extension Labels Linkbase Document.**

  

  

101.PRE

XBRL Taxonomy Extension Presentation Linkbase Document.**

 

**    No changes made to XBRL data. Previously submitted with Registrant’s Annual Report on Form 10-K filed December 16, 2013.

 

- 3 -



SIGNATURES

 

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


 

DIXIE FOODS INTERNATIONAL, INC.

 

 

February 3, 2014

By: /s/ Robert E. Jordan

 

Robert E. Jordan

 

President (principal executive and accounting officer)

 

- 4 -