-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, DIMoGm9ef4+al/wfF8lvLghI2vwA/4oG7WzL44LNkMmxy/5WUeUgCj37JyWma5xK 7O5bMRMktypSVQhXw+kBVw== 0001013176-01-500059.txt : 20010524 0001013176-01-500059.hdr.sgml : 20010524 ACCESSION NUMBER: 0001013176-01-500059 CONFORMED SUBMISSION TYPE: SB-2 PUBLIC DOCUMENT COUNT: 12 FILED AS OF DATE: 20010523 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CACH FOODS INC CENTRAL INDEX KEY: 0001135264 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 820404220 STATE OF INCORPORATION: NV FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SB-2 SEC ACT: SEC FILE NUMBER: 333-61424 FILM NUMBER: 1645916 BUSINESS ADDRESS: STREET 1: PO BOX 4669 CITY: PECATELLO STATE: ID ZIP: 83205-4669 BUSINESS PHONE: 2082338001 MAIL ADDRESS: STREET 1: PO BOX 4669 CITY: PECATELLO STATE: ID ZIP: 83205-4669 SB-2 1 cfsb2.txt CACH FOODS SB-2 5-22-2001 As filed with the Securities and Exchange Commission May 22, 2001 File No. ___________________ SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM SB-2 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 Cach Foods, Inc. (Exact name of registrant as specified in its charter) Nevada 82-0505220 (State or Other Jurisdiction of (IRS Employer Incorporation or Organization) Identification No.) P.O. Box 4669 Pocatello, ID 83205-4669 (Address and telephone number of registrant's principal offices) Cornelius A. Hofman 216 South Sixteenth Avenue Pocatello ID 83201 (866) 922-8073 (866) 922-8074 fax (Name, address and telephone number of agent for service) Copies to: Cletha A. Walstrand, Esq. Lehman Walstrand & Associates 8 East Broadway, Suite 620 Salt Lake City, UT 84111-2204 (801) 532-7858 (801) 363-1715 fax Approximate date of commencement of proposed sale to the public: As soon as practicable after the 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, check the following box: [ ] If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ] If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ] If delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box. [ ] CALCULATION OF REGISTRATION FEE
Title of each class Amount to be Proposed offering Proposed maximum Amount of of securities to registered price per share aggregate offering registration be registered price fee Common Stock 250,000 shares $0.50 per share $125,000 $37.50
The number of shares to be registered is estimated solely for the purpose of calculating the registration fee. Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine. 2 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 is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted. PROSPECTUS Subject to completion, May 22, 2001 $75,000 Minimum/$125,000 Maximum CACH FOODS, INC. COMMON STOCK This is Cach's initial public offering. We are offering a minimum of 150,000 shares and a maximum of 250,000 shares of common stock. The public offering price is $0.50 per share. No public market currently exists for our shares. See "Risk Factors" beginning on page 2 for certain information you should consider before you purchase the shares. Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of the securities or passed upon the accuracy or adequacy of this prospectus. Any representation to the contrary is a criminal offense. The shares are offered on a minimum/maximum, best efforts basis directly through our officers and directors. No commission or other compensation related to the sale of the shares will be paid to any of our officers or directors. The proceeds of the offering will be placed and held in an escrow account at Professional Escrow Services, located at 920 Deon Drive, Pocatello, Idaho, 83201, until a minimum of $75,000 in cash has been received as proceeds from sale of shares. If we do not receive the minimum proceeds within 90 days from the date of this prospectus, unless extended by us for up to an additional 30 days, your investment will be promptly returned to you without interest and without any deductions. We may terminate this offering prior to the expiration date. Price to Public Commissions Proceeds to Company Per Share $0.50 $-0- $0.50 Minimum $75,000 $-0- $75,000 Maximum $125,000 $-0- $125,000 The date of this Prospectus is ________________, 2001. PROSPECTUS SUMMARY Summary of our company We formed as a Nevada corporation on May 4, 1998 originally as Llebpmac, Inc. We changed our name to Cach Foods, Inc. on November 1, 2000 with the intent to engage in the export and distribution of snack food products for resale in Asian markets. Initially, we will focus on selling a kettle style Idaho potato chip with the brand name Idaho Chips (TM). Our first target market will be Japanese convenience stores. If our Idaho Chips (TM) are successful, we intend to increase the variety of snack foods we offer and expand to other Asian markets. We will be competing with a large number of other snack food merchandisers. The snack food industry is highly competitive with some very large snack food merchandisers like Frito-Lay, Inc., as well as a large number of smaller independent businesses that fill niches in the Japanese and other Asian markets. We also intend to focus on a small niche with our gourmet Idaho Chips (TM). We have not commenced operations and are considered a development stage company. These factors raise substantial doubts about our ability to continue as a going concern. We intend to use the proceeds from this offering to begin operations and implement our growth and marketing plan. We further intend to act as a wholesale merchandiser by sub contracting the actual manufacturing, packaging, distributing and selling of our snack food products in Asian markets. Our principal executive offices and mailing address is 216 South 16th Avenue Pocatello ID 83201. Our telephone number is (866) 922-8073. About our offering We are offering a minimum of 150,000 and a maximum of 250,000 shares of common stock. Upon completion of the offering, we will have 12,152,000 shares outstanding if we sell the minimum number of shares or 12,252,000 shares outstanding if we sell the maximum number of shares. We will use the offering proceeds over the next twelve months to implement our business plan and initiate operations, which will consist of the following: * Purchase necessary equipment; * Establish production and distribution relationships; * Market and advertise our products; and * Provide working capital for the next twelve to eighteeen months. RISK FACTORS Investing in our stock is very risky and you should be able to bear a complete loss of your investment. Please read the following risk factors closely. We are a new business and our Management has very limited experience in marketing snack foods, making an investment in our company risky. It will be difficult for you to evaluate an investment in our stock since our operating history is limited to developing a business plan, contacting potential sub contractors, and establishing foreign contacts. With exception of one director, Brian Kramer, we have no experience marketing or selling snack foods. As a young company, we are especially vulnerable to the problems, delays, expenses and difficulties encountered by any company in the development stage. We cannot assure that we will ever be profitable. Since we have not proven the 2 essential elements of profitable operations, you will be furnishing venture capital to us and will bear the risk of complete loss of your investment in the event we are not successful. If we do not raise money through this offering, it is unlikely we can commence operations. We have extremely limited assets and need the proceeds from this offering to commence operations. If we cannot raise at least the minimum in this offering within 90 days from the date of this prospectus we will have to seek other sources of funding. If no other source is available, we may be forced to abandon our business plan. We cannot assure the completion of the offering. The shares are offered on a minimum-maximum best efforts basis by our officers and directors. No individual or firm is committed to purchase or take down any of the shares. There is no assurance we will sell any portion of the shares. The offering will be open for 90 days from the date of this prospectus. We may in our discretion extend that time an additional 30 days if the minimum of $75,000 has not been reached. If we do not reach the minimum, we will promptly return your entire investment without interest. Anytime after the minimum is received prior to termination of the offering, the escrowed funds will be transmitted to us, shares will be issued, and no refunds will be made. Our independent auditor has expressed doubts about our ability to continue as a going concern. We are a development stage company as defined in Financial Accounting Standards Board Statement No. 7. We are devoting substantially all of our present efforts in establishing a new business. Our operations to date have been limited to defining our business plan, contacting potential sub contractors, and establishing foreign contacts. We also have a working capital deficit at March 31, 2001 of $37. These factors raise substantial doubt about our ability to continue as a going concern. We will depend upon independent suppliers to provide high quality potatoes at market prices. We have not entered into any contracts, but intend to sub contract with independent third parties to supply potatoes to selected manufacturers. Since we will not supply our own potatoes, we will be limited in our ability to ensure availability, price and quality. If availability becomes limited, we will have to find other suppliers, who may charge higher prices. In addition, we must also depend on these suppliers to monitor the quality of the potatoes used in Idaho Chips (TM). The suppliers, however, may not act in our best interest and deliver a substandard potato. This would affect the ultimate quality of our product, which in turn could have a material adverse affect on our sales and revenues. We will depend upon independent manufacturers to produce and package high quality kettle style potato chips. We have not entered into any contracts, but intend to sub contract with independent third parties to manufacturer and package kettle style potato chips under the Idaho Chips (TM) brand name. Since we will not manufacture and package our own potato chips, we will be limited in our ability to ensure constant availability, price and quality. If the availability of our manufacturers becomes limited, we will have to find other independent manufacturers, who may charge higher prices. In addition, we must also depend on these manufacturers to monitor the quality of the potato chip packaged as Idaho Chips (TM). The manufacturers, however, may not act in our best interest and manufacture and package substandard potato chips. This would affect the ultimate quality of our product and have a material adverse affect on our revenues. Our manufacturing costs are subject to fluctuations in the prices of potatoes and oil. Idaho Chips (TM) will consist of two major ingredients, potatoes and oil. Potatoes are widely available year-round, either freshly harvested or from storage during winter months. Different types of oils may be used in preparing Idaho Chips (TM). We will be dependent on suppliers to provide our manufacturers with products and ingredients in adequate supply and on a timely basis. Although we believe such products and ingredients are readily available, the failure of a supplier to meet delivery schedules could have a 3 material adverse effect on our operations. In particular, the sudden scarcity, substantial price increase, or unavailability of product ingredients could have a materially adverse affect on our operations. There can be no assurance alternative ingredients would be available on commercially attractive terms, if at all. We will depend upon the sales efforts of independent importers and distributors. The success of our business will depend, in large part, upon the establishment of a strong distribution network of international importers and distributors. These importers and distributors will receive the Idaho Chips (TM) directly from the manufacturer and deliver them to Japanese wholesale distributors or convenience stores. We will further depend on these importers and distributors to negotiate favorable shelf space and placement. There is no assurance we can establish a strong distribution network, if any. The subsequent loss of an established importer or distributor may have a material adverse affect on our operations since there is no assurance we could obtain alternative arrangements on satisfactory terms or in a timely manner. The market for salty snack foods, primarily potato chips, is large and intensely competitive. In order to successfully compete in the snack food industry, a company must capitalize on certain competitive factors, which are: * product quality and taste; * brand awareness and name recognition; * access to shelf space; * price; * advertising and promotion; * varieties offered; * nutritional content; and * product packaging and design. We expect to compete in the snack food industry by capitalizing on the name recognition of Idaho potatoes as well as product quality and taste. The snack food industry in Japan is primarily dominated by large companies such as Calbee, Proctor & Gamble, and Frito-Lay, Inc., which have substantially greater resources and sell brands more widely recognized than other companies. There are also numerous other actual and potential competitors that have greater resources than we do. While we believe our Idaho Chips (TM) will compete successfully by filling a niche in the market, there can be no assurance of the ability to do so. Successful marketing of Idaho Chips (TM) will depend on our ability to obtain adequate retail shelf space for product display. Food manufacturers and distributors generally incur additional costs in order to obtain additional shelf space. Whether or not we incur such costs will depend on a number of factors, including whether Asian markets charge such costs, demand for our products, relative availability of shelf space and general competitive conditions. There can be no assurance that we will not incur costs associated with shelf space or other promotional costs as a necessary condition for competing in particular markets or stores. Such costs may materially affect our financial performance. Consumer preferences for snack foods are continually changing and extremely difficult to predict. Initial success will depend on customer acceptance of Idaho Chips (TM). There can be no assurance Idaho Chips (TM) will achieve a significant degree of market acceptance, and if accepted, sustained for any significant period. There is no assurance that product life cycles will be sufficient to recover our start-up and other associated costs. In addition, there is no assurance we will succeed in developing products other than Idaho Chips (TM) or that such products will achieve market acceptance or generate meaningful revenue. 4 As members of the snack food industry, we are subject to numerous risks outside our control. Profitability in the snack food industry is subject to numerous external risk factors such as: * adverse changes in general business and economic conditions; * oversupply of certain snack food products at the wholesale and retail levels; * seasonality of raw materials; * products banned, limited or declared unhealthful; * product tampering that requires a recall of certain products; * decline in sales due to perceived health concerns; and * changes in consumer tastes. We depend on our exclusive license to use the trademark of Idaho Chips (TM). We currently have an exclusive worldwide license to use the trademark of Idaho Chips (TM). If, by April 10, 2003, we do not generate a threshold amount of $500,000 in gross revenue, we will lose exclusivity under the license. If we generate the threshold amount, the agreement is automatically renewed for an additional 12-month period, and will be extended for each successive 12-month period if we generate gross revenue of $300,000 in the prior 12-month period. There is no assurance we will satisfy the terms of the license agreement. As a result, we could lose our exclusive right to use the trademark of Idaho Chips (TM), which could have a material adverse effect on our sales and revenues. As a distributor of packaged food we will be subject to national and international governmental regulation. The manufacturing, marketing, exporting, distribution and sale of Idaho Chips (TM) will be subject to various international, federal, state and local laws and regulations which govern production, sale, safety, advertising, labeling and ingredients. There is no assurance that we or our suppliers, manufacturers, importers and distributors will be able to comply with all such laws and regulations. New governmental laws and regulations may be introduced which could result in additional compliance costs, seizures, confiscation, recall or monetary fines. Any such regulation could inhibit or prevent the development, distribution and sale of Idaho Chips (TM) in the Japanese market causing a material adverse effect on our business, operating results and financial condition. As a wholesaler of food products we may be subjected to various product liability claims. Packaging, marketing and distributing food products has the inherent risk of product liability, recall and the resultant adverse publicity. We may be subject to significant liability if the consumption of our product causes injury, illness or death. We could be required to recall certain of our products in the event of contamination or damage. We intend to carry product liability insurance on terms we deem acceptable, which may not fully cover loss or exposure for product liability. Any product liability claim not fully covered by insurance, as well as any adverse publicity from a product liability claim, could have a material adverse effect on our financial condition or results of operation. We are currently investigating the availability and terms of product liability insurance. We arbitrarily determined our offering price. The offering price bears no relationship to our assets, book value, net worth or other economic or recognized criteria of value. In no event should the offering price be regarded as an indicator of any future market price of our securities. In determining the offering price, we considered such factors as the prospects for our products, our management's previous experience, our historical and anticipated results of operations and our present financial resources. 5 It is likely our stock will become subject to the Penny Stock rules which impose significant restrictions on the Broker- Dealers and may affect the resale of our stock. A penny stock is generally a stock that: - is not listed on a national securities exchange or Nasdaq; - is listed in "pink sheets" or on the NASD OTC Bulletin Board; - has a price per share of less than $5.00; and - is issued by a company with net tangible assets less than $5 million. The penny stock trading rules impose additional duties and responsibilities upon broker-dealers and salespersons effecting purchase and sale transactions in common stock and other equity securities, including: - determination of the purchaser's investment suitability; - delivery of certain information and disclosures to the purchaser; and - receipt of a specific purchase agreement from the purchaser prior to effecting the purchase transaction. Due to the Penny stock rules, many broker-dealers will not effect transactions in penny stocks except on an unsolicited basis. In the event our common stock becomes subject to the penny stock trading rules, - such rules may materially limit or restrict the ability to resell our common stock, and - the liquidity typically associated with other publicly traded equity securities may not exist. Shares of stock that are eligible for sale by our stockholders may decrease the price of our stock. Upon completion of the offering and if we sell the minimum number of shares, we will have 12,152,000 shares outstanding with 150,000 of those shares freely tradable. If we sell the maximum number of shares, we will have 12,252,000 shares outstanding with 250,000 of those shares freely tradable. Regardless of the number of shares we sell, we will have 12,002,000 shares that are restricted but may be sold under Rule 144. If the holders sell substantial amounts of our restricted stock, then the market price, if any, of our common stock could decrease. FORWARD-LOOKING STATEMENTS You should carefully consider the risk factors set forth above, as well as the other information contained in this prospectus. This prospectus contains forward-looking statements regarding events, conditions, and financial trends that may affect our plan of operation, business strategy, operating results, and financial position. You are cautioned that any forward-looking statements are not guarantees of future performance and are subject to risks and uncertainties. Actual results may differ materially from those included within the forward-looking statements as a result of various factors. Cautionary statements in this "Risk Factors" section and elsewhere in this prospectus identify important risks and uncertainties affecting our future, which could cause actual results to differ materially from the forward-looking statements made in this prospectus. 6 DILUTION AND COMPARATIVE DATA As of March 31, 2001, we had an unaudited net tangible book value, which is the total tangible assets less total liabilities, of a negative $37, or a net tangible book value per share of approximately ($0.00). The following table shows the dilution to your equity interest without taking into account any changes in our net tangible book value after March 31, 2001, except the sale of the minimum and maximum number of shares offered. Assuming Minimum Assuming Maximum Shares Sold Shares Sold Shares Outstanding 12,152,000 12,252,000 Public offering net $50,000 $100,000 proceeds at $0.50 per share Net tangible book value ($37) ($37) before offering ($0.00) ($0.00) Pro forma net tangible $49,963 $99,963 book value after offering $0.0041 $0.0082 Increase attributable to $0.0041 $0.0082 purchase of shares by new investors Dilution per share to new $0.4959 $0.4918 investors Percent dilution 99.18% 98.36% The following table summarizes the comparative ownership and capital contributions of existing common stock shareholders and investors in this offering as of March 31, 2001: Shares Owned Total Consideration Average Price Number % Amount % Per Share Present 12,002,000 100% $6,000 100% $0.0005 Shareholders New Investors Minimum Offering 150,000 1.23% $75,000 92.59% $.50 Maximum Offering 250,000 2.04% $125,000 95.42% $.50 The numbers used for Present Shareholders assumes that none of the Present Shareholders will purchase additional shares in this offering. However, it is possible that our Present Shareholders will purchase additional shares in the offering. The above table illustrates that as an investor in this offering, you will pay a price per share that substantially exceeds the price per share paid by current shareholders. You will also contribute a significantly higher percentage of the total amount to fund Cach Foods, Inc., but will own a small percentage of our shares. Investors will have contributed $75,000 if the minimum is raised and $125,000 if the maximum is raised, compared to $6,000 contributed by current shareholders. Further, investors will own 1.23% of the total shares if the minimum is raised, and 2.04% of the total shares if the maximum is raised. 7 USE OF PROCEEDS The net proceeds to be realized by us from this offering, after deducting $25,000 in estimated expenses related to this offering is: * $50,000 if the minimum number of shares is sold; and * $100,000 if the maximum number of shares is sold. The following table sets forth our best estimate of the use of proceeds from the sale of the minimum and maximum amount of shares offered. Since the dollar amounts shown in the table are estimates, actual use of proceeds may vary from the estimates shown. Description Assuming Sale of Assuming Sale of Minimum Offering Maximum Offering Total Proceeds $75,000 $125,000 Less Estimated Offering 25,000 25,000 Expenses Net Proceeds Available $50,000 $100,000 Use of Net Proceeds Initial Operating Expenses Establish Japanese $6,000 $6,000 Contracts $1,600 $1,600 Establish Potato $4,000 $4,000 Suppliers $11,600 $11,600 Establish Potato Chip Manufacturers $7,500 $7,500 TOTAL $5,000 $5,000 Supplies Marketing Working Capital $25,900 $75,900 TOTAL NET PROCEEDS $50,000 $100,000 The initial operating expense is an estimate of the amount necessary to establish contacts, contracts and agreements with importers and distributors in Japan, Idaho potato suppliers, and potato chip manufacturers. The supplies expense is an estimate of the amount necessary to purchase computer software, letterhead, copy paper, toner cartridges, business cards and other miscellaneous supplies specific to our needs. The amount designated for marketing is an estimate of the amount necessary to design an Idaho Chips web page, develop in- store displays, compile market research, design product packaging and literature as well as other miscellaneous marketing activities. The working capital reserve may be used for general corporate purposes to operate, manage and maintain the current and proposed operations including employee wages, professional fees, expenses and other administrative costs. 8 If less than the entire offering is received, we will apply the proceeds according to the priorities outlined above, with top priorities listed first. Pending the expenditure of proceeds of this offering, we may make temporary investments in short-term, investment grade, interest-bearing securities, money market accounts, and insured certificates of deposit and/or in insured banking accounts. We do not intend to use any of the proceeds from this offering to purchase key man insurance. Costs associated with being a public company, including compliance and audits of our financial statements will be paid from working capital and revenues generated from our operations. DETERMINATION OF OFFERING PRICE Our management arbitrarily determined the offering price of the shares. The offering price bears no relationship to our assets, book value, net worth or other economic or recognized criteria of value. In no event should the offering price be regarded as an indicator of any future market price of our securities. In determining the offering price, we considered such factors as the prospects for our products, our management's previous experience, our anticipated results of operations and our present financial resources. DESCRIPTION OF BUSINESS Our History and Business We were formed as a Nevada corporation on May 4, 1998 originally as Llebpmac, Inc., for the purpose of becoming a restaurant. Before our plan for Llebpmac to operate as a restaurant was inaugurated, we changed the company's name to Cach Foods, Inc. and we changed the purpose of the company to be a snack food wholesale merchandiser in direct response to our research and perceived demand for American snack foods in Japan. On October 2, 2000, the shareholders approved a two for one forward split of its outstanding common stock. On November 1, 2000, we changed our name to Cach Foods, Inc. and we changed our purpose to be a snack food wholesale merchandiser. Our initial focus will be on selling Idaho Chips (TM) in the Japanese market through convenience stores. If demand permits, we will expand production and sell Idaho Chips (TM) to larger supermarkets as well other Asian countries. We intend to act as a wholesale merchandiser by sub contracting the actual supplying, manufacturing, packaging, exporting and selling of Idaho Chips (TM). If successful in the Japanese market, we will increase the variety of snack foods we offer and expand to other Asian consumers. Target Market Overview Convenience stores have proliferated in Japan over the past 25 years since their debut in 1969, according to an article in the Nikkei Weekly titled "The Little Stores with the Big Ambitions: Convenience Store Chains Expand Into Services for Urban Lifestyle," and that more than 1,000 new outlets have opened every year since the 1980s. In "The Changing Face of Japanese Retail," The Japan Trade Organization states that from 1984 to 1993, the number of convenience stores in Japan grew from 25,500 stores to 43,510 stores - a 70 percent increase. As of April 1999, there were over 50,000 convenience stores throughout Japan according to the Nikkei Weekly. Japanese eating patterns are clearly shifting toward Western- style foods and habits. Much can be attributed to the economic and social advances made by women in Japan, which is leading more and more 9 people to purchase ready-to-eat foods. According to the Japan Statistics Bureau, Management and Coordination Agency: * annual rice purchased per household in 1980 was over Y70,000, but under Y50,000 in 1996; * Japanese people spent 7 percent less time in 1996 preparing meals in the home than in 1981; and * the average Japanese household, from 1987 to 1996, increased its spending on ready-to-eat foods by 43 percent. Consistent with this shift toward Western-style foods, the South African Food & Beverage Manufacturing Review reports that the volume of snack consumption in Japan increased 16.6 percent from 1988 through 1993. And according to the Euromonitor, Japan is second only behind the United States in per capita expenditure on snack foods. The U.S. potato chip has emerged as a favorite snack food in Japan. In "Export Markets Respond to Crispy Appeal of US Potato Chips," the AgExporter states that U.S. potato chip exports to Japan surged from $5 million in 1993 to $62 million in 1995, making Japan the largest U.S. export market for potato chips. This rapid growth has been fueled by moving U.S. potato chips from specialty stores to mainstream supermarkets and convenience stores. Frito-Lay is the leading U.S. snack food supplier in Japan, according to Seymour-Cooke Food Research International, but accounts for only 3 percent of the annual $1.5 to $2 billion potato chip market in Japan. Accordingly, U.S. potato chip exports represent a small portion of the Japanese potato chip market. Frito-Lay and Procter & Gamble are two major U.S. potato chip manufacturers, according to the AgExporter, that are reaping the benefits of blazing a trail into Japanese distribution channels and making U.S. potato chips mainstream throughout Japan. The AgExporter also states that many smaller U.S. companies are getting a "tasty" piece of the action in the Japanese potato chip market. We intend to follow this blazed trail by selling Idaho Chips (TM) in Japanese convenience stores. We further believe there is a niche in the Japanese market for a high quality kettle style potato chip made from world famous Idaho potatoes. Business Strategy Our objective is to become a leading U.S. exporter to the Asia Pacific of branded premium potato chips and other salty snack foods by providing high quality products at competitive prices that are superior in taste to comparable products. We will use a distribution channel comprised of intermediaries such as suppliers, manufacturers, wholesalers, importers and distributors to bring our products to market. The use of these intermediaries along with our contacts, experience, specialization, and scale of operations will enable us to be more efficient in making our goods available to target markets. Initially, we plan to penetrate the existing Japanese market with Idaho Chips (TM), a kettle-fried potato chip made from real Idaho potatoes. If successful in Japan, we will expand Idaho Chips (TM) into other Asian markets. Our strategy for market penetration and expansion will consist of creating consumer trial and acceptance of Idaho Chips (TM). We believe the key elements of creating consumer trial and acceptance to be packaging, placement, taste, and price. Packaging Getting consumers to try Idaho Chips (TM) will be important to our success. The Snack Food Association reports that approximately 70 percent of salty snack food purchases are made on impulse. We intend to expend a percent of the proceeds from this offering to research the best package design and color to trigger this impulse to buy Idaho Chips (TM). We believe that this may be accomplished, in part, 10 by clearly displaying the kettle-fried process and the Idaho origin on the package of Idaho Chips (TM). We also intend to create a unique brand image for Idaho Chips (TM) by further developing a package that communicates to consumers that we are a gourmet snack food company, which we believe will appeal to Japanese consumers. Placement Favorable shelf placement of Idaho Chips (TM) in relation to our competitors will be essential to capitalize on the impulse buyer. We will attempt to negotiate with Japanese retailers the placement of Idaho Chips (TM) in strategic locations. We believe such locations are at eye level and close to high traffic areas like the check out stand. We further believe that an aesthetically pleasing package promoting the kettle fried style and Idaho origin of our potato chip will distinguish Idaho Chips (TM) from the nearly placed products of our competitors. Accordingly, we increase the probability that Japanese consumers, when acting on impulse, will purchase Idaho Chips (TM). Taste We intend to sell only great tasting potato chips as Idaho Chips (TM) in order to achieve consumer acceptance and loyalty. We will accomplish this by using real Idaho potatoes and the kettle frying process. Potatoes are native to Peru. We believe the Idaho climate and soil to be similar to certain areas of Peru where potatoes are grown. As a result, Idaho grows great tasting potatoes. We also believe that kettle frying produces a potato chip that is thicker and crisper than other potato chips. These two elements combined with the careful selection of a potato chip manufacturer will provide, as we believe, a great tasting potato chip. Price We intend to offer Idaho Chips (TM) at a fair everyday price to maintain the initial impulse of the buyer. Our prices will be based upon a combination of manufacturing, packaging, distribution and marketing costs as well as the prices of closely related products of our competitors. Assuming we establish a level of market penetration and acceptance with Idaho Chips (TM), we intend, if needed, to increase brand awareness and acceptance through advertising and distribution efforts in existing and key regional markets. We may also add direct sales people to these targeted geographies to manage sales and promotional activities, which may include joint advertising with convenience stores and supermarkets, in-store product sampling, coupon distribution and in-store advertisements and displays of Idaho Chips (TM). Suppliers The principal raw materials used in our Idaho Chips (TM) are potatoes and oil. We will not supply our own raw materials, but depend on independent suppliers. We believe, however, that potatoes and oil are readily available from numerous suppliers on commercially reasonable terms. Idaho potatoes are widely available year-round, either freshly harvested or from storage during the winter months. Many manufacturers use sunflower oil to produce kettle style potato chips. We believe that sunflower oil is widely available year-round and that alternative cooking oils are abundant and readily available. We will choose our suppliers primarily on price, availability and quality and do not anticipate having any long-term arrangements with any one supplier. 11 Manufacturing We intend to sub contract with independent manufacturers to produce and package kettle-fried potato chips made from real Idaho potatoes. We will evaluate potential candidates thoroughly in our selection process. To be considered, candidates must be in compliance with all federal, state, and local government regulations. The candidate must also be well capitalized, possess the necessary production and packaging capacity, and have a strong reputation for quality production. We will expect selected manufacturers to maintain a lab staffed with trained quality control personnel, capable of performing any tests we may establish. Distribution We intend to sell Idaho Chips (TM) primarily in convenience stores in Japan. We plan to distribute our products through a select group of independent international importers and distributors since we believe it is the most efficient method for reaching our target market. Importers and distributors will be selected primarily on the basis of: * quality of service; * financial capability; and * established network of convenience stores. We intend to service both large convenience store chains and smaller independent convenience stores. Assuming Idaho Chips (TM) achieves a level of market penetration and customer acceptance among Japanese convenience stores, we intend to use our established distribution networks and/or sub contract with other international distributors to distribute Idaho Chips (TM) to super markets, delicatessens, and retailers as well as other Asian countries. Marketing We will target convenience store chains in markets that show a need and demand for snack foods. Product packaging, word-of- mouth, and shelf placement will be our marketing tools. We intend to position our product as a high quality specialty item with packaging, color, and name designed to capitalize on the impulse buyer. Word-of-mouth is a fast and cost-effective marketing tool. We believe consumers are willing to share with their personal acquaintances a satisfying experience with Idaho Chips (TM), and the recommendation of a personal acquaintance is credible. We will also attempt, if possible, to negotiate favorable shelf space in convenience stores, which may require additional marketing costs. As an additional marketing tool, we intend to use a variety of websites to promote our company and products. If Idaho Chips (TM) achieves a substantial level of consumer acceptance, and funding is available, we may launch a more aggressive marketing campaign, which might include advertising through all forms of media, coupons, in-store displays and sampling, and the hiring of regional representatives. License We do not own the trademark Idaho Chips (TM). On October 30, 2000, we entered into a license agreement with the owner of the trademark Idaho Chips (TM), Cornelius A. Hofman, our president and director. The license gives us the exclusive worldwide use of the brand name Idaho Chips (TM) for a 30-month period. In return, we pay five percent of our gross revenue to Mr. Hofman. If, by April 10, 2003, we do not generate a threshold amount of $500,000 in gross revenue, we will lose exclusivity under the license. If we generate the threshold amount, the agreement is automatically renewed for an additional 12-month period, and will be extended for each successive 12- month period if we generate gross revenue 12 of $300,000 in the prior 12-month period. There is no assurance we will satisfy the terms of the license agreement. As a result, we could lose our exclusive right to use the trademark of Idaho Chips (TM), which could have a material adverse effect on our sales and revenues. Competition Our Idaho Chips (TM) will compete against other salty snack foods, including potato chips, tortilla chips, popcorn and pretzels. The industry of exporting salty U.S. snack foods to Japan is highly competitive and dominated primarily by Calbee, Proctor & Gamble, and Frito-Lay, Inc., which is a subsidiary of PepsiCo, Inc. Calbee, Proctor & Gamble, and Frito-Lay possess substantially greater financial, production, marketing, distribution and other resources than many other companies. Calbee, Proctor & Gamble, and Frito-Lay brands are more widely recognized than the brands of other companies. Numerous other companies that are our actual or potential competitors have greater financial and other resources, including more employees and more extensive facilities, than we do. In addition, local or regional Japanese markets often have a significant number of smaller competitors, many of whom may offer products similar to our Idaho Chips (TM). If successful in Japan, we intend to expand our Idaho Chips (TM) into other areas of the Asia Pacific and will encounter significant competition from foreign, national, regional and local competitors that may be greater than that encountered in the Japanese market. While we believe that our Idaho Chips (TM) will fill a niche and compete successfully, there can be no assurance of the ability to do so. The principal competitive factors affecting the market of our Idaho Chips (TM) will include product quality and taste, brand awareness among Japanese consumers, supermarket shelf space, price, advertising and promotion, variety of snacks offered, nutritional content, product packaging and package design. We believe that our Idaho Chips (TM) will compete primarily upon their taste, kettle cooking method and real Idaho origin. Governmental Regulation Our operations are subject to various governmental regulations, such as those governing: * minimum wage regulations; * employment; * environmental protection; and * human health and safety. Although we intend to comply with all applicable laws and regulations, we cannot assure you that we are in compliance or that we will be able to comply with any future laws and regulations. Additional federal or state legislation, or changes in regulatory implementation, may limit our activities in the future or significantly increase the cost of regulatory compliance. If we fail to comply with applicable laws and regulations, criminal sanctions or civil remedies, including fines, injunctions, recalls, or seizures, could be imposed on us. This could have a material adverse effect on our operations. The United States Food and Drug Administration may regulate and inspect our products, suppliers and manufacturers. Every food manufacturer in the United States must meet the FDA's minimum standards relating to the preparation and packaging of food. Food manufacturers must also comply with state, local and federal laws regarding the disposition of property and leftover foodstuffs. We cannot assure you that our suppliers and manufacturers are in compliance with all applicable laws and 13 regulations or that they will be able to comply with any future laws and regulations. Furthermore, additional or amended regulations by the FDA may inhibit or prevent the development, distribution and sale of Idaho Chips (TM) in the Japanese market causing a material adverse effect on our business, operating results and financial condition. Employees We have no employees and no formal employment agreements with our officers. Nor do we intend to hire employees until our operations require expansion. Our officers have agreed to devote such time as necessary for the development of our business. It is anticipated that upon completion of the offering and prior to the commencement of production, Kelly McBride will devote approximately 20 hours per week as a part-time employee while maintaining outside employment. It is further anticipated that all other officers will maintain outside employment and devote a portion of their time to our business as needed. None of our officers will receive a regular salary or wage until operations have been developed to a point where such can be paid. However, officers and directors are entitled to reimbursement for reasonable out of pocket expenses incurred on our behalf. Facilities We own no real property, nor do we currently lease any office space or facilities. We use the home office of our President, Cornelius A. Hofman, rent free, as our principal executive offices. We intend to maintain our current office situation for the next twelve months, unless our operations require an upgrade, at which time we will relocate to a more suitable facility. Legal proceedings We are not a party to any bankruptcy, receivership or other legal proceeding, and to the best of our knowledge, no such proceedings by or against us have been threatened. PLAN OF OPERATION We will research and design the packaging for Idaho Chips (TM). We will also determine who will supply, manufacture and package our products, what products will be offered, how prices will be set, which convenience stores to target and how to promote our products to importers and/or distributors. Idaho Chips (TM) will be our first snack food product. If Idaho Chips (TM) are successful, we will investigate adding other snack foods to our product line. We also anticipate entering additional Asian markets as Idaho Chips (TM) are accepted in the Japanese market. Our plan of operation for the next 12 months consists of the following: * Select and design packaging and determine pricing for Idaho Chips (TM), including: o Purchase samples of chips sold in Japan of all varieties and packaging types; o Research packaging color and design to capitalize on impulse buying; o Determine shelf life of available packaging options; and o Investigate retail prices of potato chips in Japan's convenience stores. * Establish relations with Japanese importers, distributors and convenience stores, including: o Investigate and contact Japanese importers and/or distributors; o Negotiate contracts with Japanese importers and/or distributors; o Investigate, and if possible, negotiate shelf space with Japanese convenience stores; and o Establish quality control procedures with Japanese importers and/or distributors. 14 * Establish relations with suppliers of Idaho potatoes, including: o Investigate and negotiate prices with suppliers of Idaho potatoes; and o Investigate and negotiate the delivery of Idaho potatoes to potato chip manufacturers. * Establish relations with manufacturers to produce and package kettle style potato chips into Idaho Chips (TM) customized packaging, including: o Research possible kettle style chip manufacturers; o Investigate and negotiate production prices with manufacturers; and o Establish quality control procedures with manufacturers. * Begin manufacturing and distributing Idaho Chips (TM) to Japan. Should we receive the minimum offering of $75,000, we will realize net proceeds of $50,000. This amount will enable us to begin the above listed operations, plus, purchase necessary equipment and supplies, and will provide us with sufficient capital for the next twelve months. Should we receive the maximum amount of the offering, we will realize net proceeds of $100,000. Receiving the maximum amount of the offering will enable us to implement one of two operating strategies: (1) begin the above listed operations, plus, purchase necessary equipment and supplies, implement a more aggressive marketing plan, and operate with sufficient capital for twelve months; or (2) begin the above listed operations, plus, purchase necessary equipment and supplies, and operate with sufficient capital for eighteen months. If we are unable to raise the offering amount, it will be necessary for us to find additional funding in order to market our products and services. In this event, we may seek additional financing in the form of loans or sales of our stock and there is no assurance that we will be able to obtain financing on favorable terms or at all or that we will find qualified purchasers for the sale of any stock. We do not intend to staff offices in the markets we sell Idaho Chips (TM). While we may establish satellite offices in various locations, we will only staff our main office currently located in Pocatello, Idaho. Under this arrangement, we will provide customers with either a local number in the satellite location or a toll-free number so that all customers may contact us toll-free. All calls will be automatically forwarded to our principal office in Pocatello, Idaho. MANAGEMENT Our business will be managed by our officers and directors. Name Age Position Since Cornelius A. Hofman 33 Chief Executive Officer, May 1998 President & Director Kelly McBride 26 Secretary/ Treasurer & September Director 2000 Brian Kramer 32 Director April 2001 Directors hold office until the next annual shareholders meeting or until their successors are duly elected and qualified. Officers hold office at the discretion of the Directors. The following is a brief biography of our officers and directors. 15 Cornelius A. Hofman. Mr. Hofman received a B.A. in Asian Studies from Cornell University in 1991, a Masters in Japanese Studies from the University of Pennsylvania in 1992, and a MBA in Economics and Finance from the University of Chicago in 1994. Since 1995, Mr. Hofman has been president and economist for General Economic Consulting, Inc., which provides economic valuation services to governments, businesses and individuals. Mr. Hofman lived in Japan for two years and speaks fluent Japanese. Kelly O. McBride. Mr. McBride received his B.A. in Marketing from Idaho State University in 1999. Since September 2000, Mr. McBride has been working as a research analyst for General Economic Consulting, Inc., which provides economic valuation services to governments, businesses and individuals. From 1996 to 2000, Mr. McBride worked as a marketing research analyst for Idaho Central Credit Union where he researched, designed and promoted new products and services. Mr. McBride lived in Taiwan for two years and speaks fluent Mandarin Chinese. Brian J. Kramer. Mr. Kramer graduated magna cum laude with a major in Japanese and East Asian Languages from the University of Kansas in 1991. He was a Rotary Scholar in 1991 at the center for Japanese studies through Nanzan University in Nagoya, Japan. Mr. Kramer also graduated cum laude with a J.D. from the University of Michigan Law School in 1994. Beginning 2001, Mr. Kramer is a Managing Partner in a sports agency called Classic Sports Management. Since 2000, Mr. Kramer has worked as an attorney at O'Donnell & Shaeffer in Los Angeles, California. From 1997 to 2000, Mr. Kramer was an associate attorney at Seyfarth, Shaw, Fairweather & Geraldson. From 1995 to 1997, he was an associate attorney with Latham & Watkins. From 1993 to 2000, Mr. Kramer served as an officer of Ace Foods, Inc., which exported American snack foods to Japan. Mr. Kramer also lived in Japan as a law clerk at the Wakabayashi Law Office in Tokyo, and speaks fluent Japanese. Involvement in Certain Legal Proceedings To our knowledge, we are not a party to any legal proceeding or litigation and none of our property is the subject of pending legal proceeding. We do not know of any threatened or contemplated legal proceedings or litigation. COMPENSATION We do not have any formal employment agreements in place for our officers or directors. It is anticipated that upon completion of the offering and prior to the commencement of production, Kelly McBride will devote approximately 20 hours per week as a part-time employee. Mr. McBride will be compensated at an hourly rate of $15.00. All other officers will defer their salaries until such time as we generate sufficient revenue to pay the identified salary. The directors, Mr. McBride and Brian Kramer, received 1,000 shares of common stock each for services rendered on behalf of the Company. Any future compensation for services rendered by directors has not been determined. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS We have engaged in certain transactions with Cornelius A. Hofman, an affiliate of the Company, since its inception. The following table details the date and nature of each transaction. Date Transaction May 1998 In connection with our formation, we issued 2,000,000 shares of common stock to Mr. Hofman for $1,000. 16 September 2000 Mr. Hofman purchased 10,000,000 shares of our common stock for $5,000. October 2000 We entered into a 30-month license agreement with Mr. Hofman, who owns the trademarks Idaho Chips (TM). The license gives us the exclusive worldwide use of the brand name Idaho Chips (TM). In return, we pay five percent of our gross revenue to Mr. Hofman. March 2001 Mr. Hofman loaned us $2,000 in exchange for a one- year promissory note payable in the amount of $2,000 plus 10% interest. May 1998 We use the home office of Mr. Hofman, rent free, as through our principal executive offices. We intend to April 2000 maintain our current office situation for the next twelve months, unless our operations require an upgrade, at which time we will relocate to a more suitable facility. In April 2000, we issued 1,000 shares of common stock to Kelly O. McBride and 1,000 shares of common stock to Brain Kramer in consideration for services rendered as directors. Our officer and director Kelly O. McBride is an employee at General Economic Consulting, Inc., which is owned and controlled by Cornelius A. Hofman, our president, director, and majority shareholder. PRINCIPAL STOCKHOLDERS The following table sets forth the beneficial ownership of our common stock as of the date of this prospectus, and as adjusted to reflect the sale of 150,000 shares should we sell the minimum amount and 250,000 should we sell maximum number of shares. The table includes: * each person known to us to be the beneficial owner of more than five percent of the outstanding shares * each director of Cach Foods * each named executive officer of Cach Foods Name & Address # of Shares % Before % After % After Beneficially Offering Minimum Maximum Owned Cornelius A. Hofman (1) 10,000,000 83.33 81.63 81.30 216 South 16th Avenue Pocatello, ID 83201 Laurilie Madsen 1,000,000 8.33 8.16 8.13 9025 Oakwood Place West Jordan, UT 84088 Bateman Dynasty, LLC 1,000,000 8.33 8.16 8.13 1065 W. 1150 S. Provo, UT 84601 17 Kelly McBride (1) 1,000 0.01 0.01 0.1 340 East Whitman Street Pocatello, ID 83201 Brian Kramer (1) 1,000 0.01 0.01 0.01 3439 Keystone Ave., # 5 Los Angeles, CA 90034 All directors and 10,002,000 83.34 81.64 81.30 executive officers as a group: 3 persons) (1) Officer and/or director. DESCRIPTION OF THE SECURITIES Common Stock We are authorized to issue up to 100,000,000 shares of common stock with a par value of $0.001. As of the date of this prospectus, there are 12,002,000 shares of common stock issued and outstanding. The holders of common stock are entitled to one vote per share on each matter submitted to a vote of stockholders. In the event of liquidation, holders of common stock are entitled to share ratably in the distribution of assets remaining after payment of liabilities, if any. Holders of common stock have no cumulative voting rights, and, accordingly, the holders of a majority of the outstanding shares have the ability to elect all of the directors. Holders of common stock have no preemptive or other rights to subscribe for shares. Holders of common stock are entitled to such dividends as may be declared by the board of directors out of funds legally available therefor. The outstanding common stock is, and the common stock to be outstanding upon completion of this offering will be, validly issued, fully paid and non-assessable. We anticipate that we will retain all of our future earnings, if any, for use in the operation and expansion of our business. We do not anticipate paying any cash dividends on our common stock in the foreseeable future. Preferred Stock We are authorized to issue up to 5,000,000 shares of preferred stock with a par value of $0.001. Our preferred stock may be issued in series, with such designations, preferences, stated values, rights, qualifications or limitations as determined solely by our board of directors. As of the date of this prospectus, we have issued no shares of our preferred stock Stock options We have reserved 2,000,000 shares of common stock for issuance to key employees, officers, directors and consultants upon the exercise of options available for grant under our 2001 Long-Term Stock Incentive Plan. The grant of an option under the Plan entitles the grantee to purchase shares of common stock at an exercise price established by our board of directors. We have granted no options under the plan. 18 Transfer Agent Interwest Transfer Company, Inc., 1981 East 4800 South, Salt Lake City, Utah 84124, is our transfer agent SHARES AVAILABLE FOR FUTURE SALE As of the date of this prospectus, there are 12,002,000 shares of our common stock issued and outstanding. Upon the effectiveness of this registration statement, 150,000 shares will be freely tradable if the minimum is sold and 250,000 shares will be freely tradeable if the maximum number of shares is sold. The remaining 12,002,000 shares of common stock will be subject to the resale provisions of Rule 144. Sales of shares of common stock in the public markets may have an adverse effect on prevailing market prices for the common stock. Rule 144 governs resale of restricted securities for the account of any person, other than an issuer, and restricted and unrestricted securities for the account of an affiliate of the issuer. Restricted securities generally include any securities acquired directly or indirectly from an issuer or its affiliates which were not issued or sold in connection with a public offering registered under the Securities Act. An affiliate of the issuer is any person who directly or indirectly controls, is controlled by, or is under common control with the issuer. Affiliates of the company may include its directors, executive officers, and person directly or indirectly owning 10% or more of the outstanding common stock. Under Rule 144 unregistered resales of restricted common stock cannot be made until it has been held for one year from the later of its acquisition from the company or an affiliate of the company. Thereafter, shares of common stock may be resold without registration subject to Rule 144's volume limitation, aggregation, broker transaction, notice filing requirements, and requirements concerning publicly available information about the company. Resales by our affiliates of restricted and unrestricted common stock are subject to the Applicable Requirements. The volume limitations provide that a person, or persons who must aggregate their sales, cannot, within any three-month period, sell more that the greater of one percent of the then outstanding shares, or the average weekly reported trading volume during the four calendar weeks preceding each such sale. A non-affiliate may resell restricted common stock which has been held for two years free of the Applicable Requirements. MARKET FOR COMMON STOCK AND RELATED STOCKHOLDER MATTERS We have 5 shareholders. Currently, there is no public trading market for our securities and there can be no assurance that any market will develop. If a market develops for our securities, it will likely be limited, sporadic and highly volatile. Presently, we are privately owned. This is our initial public offering. Most initial public offerings are underwritten by a registered broker-dealer firm or an underwriting group. These underwriters generally will act as market makers in the stock of a company they underwrite to help insure a public market for the stock. This offering is to be sold by our officers and directors. We have no commitment from any brokers to sell shares in this offering. As a result, we will not have the typical broker public market interest normally generated with an initial public offering. Lack of a market for shares of our stock could adversely affect a shareholder in the event a shareholder desires to sell his shares. The company does anticipate a market maker filing for listing on the Over the Counter Bulletin Board should the offering succeed. Currently the Shares are subject to Rule 15g-1 through Rule 15g-9, which provides, generally, that for as long as the bid price for the Shares is less than $5.00, they will be considered low priced securities under rules promulgated under the Exchange Act. Under these rules, broker-dealers 19 participating in transactions in low priced securities must first deliver a risk disclosure document which describes the risks associated with such stocks, the broker-dealer's duties, the customer's rights and remedies, and certain market and other information, and make a suitability determination approving the customer for low priced stock transactions based on the customer's financial situation, investment experience and objectives. Broker-dealers must also disclose these restrictions in writing to the customer and obtain specific written consent of the customer, and provide monthly account statements to the customer. Under certain circumstances, the purchaser may enjoy the right to rescind the transaction within a certain period of time. Consequently, so long as the common stock is a designated security under the Rule, the ability of broker-dealers to effect certain trades may be affected adversely, thereby impeding the development of a meaningful market in the common stock. The likely effect of these restrictions will be a decrease in the willingness of broker-dealers to make a market in the stock, decreased liquidity of the stock and increased transaction costs for sales and purchases of the stock as compared to other securities. PLAN OF DISTRIBUTION We are offering a minimum of 150,000 shares and a maximum of 250,000 shares on a best efforts basis directly to the public through our officers and directors. If we do not receive the minimum proceeds within 90 days from the date of this prospectus, unless extended by us for up to an additional 30 days, your investment will be promptly returned to you without interest and without any deductions. This offering will expire 30 days after the minimum offering is raised. We may terminate this offering prior to the expiration date. In order to buy our shares, you must complete and execute the subscription agreement and make payment of the purchase price for each share purchased either in cash or by check payable to the order of Professional Escrow Services, Inc. Until the minimum 150,000 shares are sold, all funds will be deposited in a non-interest bearing escrow account at Professional Escrow Services, located at 920 Deon Drive, Pocatello, Idaho, 83201. In the event that 150,000 shares are not sold during the 90-day selling period commencing on the date of this prospectus, and we have not extended the offering for up to an additional 30 days, all funds will be promptly returned to investors without deduction or interest. If 150,000 shares are sold, we may either continue the offering for the remainder of the 30-day selling period or close the offering at any time. Solicitation for purchase of our shares will be made only by means of this prospectus and communications with our officers and directors who are employed to perform substantial duties unrelated to the offering, who will not receive any commission or compensation for their efforts, and who are not associated with a broker or dealer. Our officers and directors will not register as a broker- dealer pursuant to Section 15 of the Securities Exchange Act of 1934, in reliance upon Rule 3a4-1, which sets forth those conditions under which a person associated with an issuer may participate in the offering of the issuer's securities and not be deemed to be a broker-dealer. We have the right to accept or reject subscriptions in whole or in part, for any reason or for no reason. All monies from rejected subscriptions will be returned immediately by us to the subscriber, without interest or deductions. Subscriptions for securities will be accepted or rejected within 48 hours after we receive them. 20 LEGAL MATTERS The legality of the issuance of the shares offered hereby and certain other matters will be passed upon for Cach Foods, Inc. by the law firm of Lehman Walstrand & Associates, Salt Lake City, Utah. EXPERTS The financial statements of Cach Foods, Inc. as of December 31, 2000 appearing in this Prospectus and Registration Statement have been audited by Pritchett, Siler & Hardy as set forth in their report appearing elsewhere herein, and are included in reliance upon such report given upon the authority of said firm as experts in accounting and auditing. ADDITIONAL INFORMATION We have filed a Registration Statement on Form SB-2 under the Securities Act of 1933, as amended (the "Securities Act"), with respect to the shares offered hereby. This Prospectus does not contain all of the information set forth in the Registration Statement and exhibits and schedules thereto. For further information with respect to Cach Foods, Inc. and the shares offered hereby, reference is made to the Registration Statement and the exhibits and schedules filed therewith. Statements contained in this Prospectus as to the contents of any contract or any other document referred to are not necessarily complete, and in each instance reference is made to the copy of such contract or other document filed as an exhibit to the Registration Statement, each such statement being qualified in all respects by such reference. A copy of the Registration Statement, and the exhibits and schedules thereto, may be inspected without charge at the public reference facilities maintained by the Securities and Exchange Commission in Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549, and at the regional offices of the Commission located at Seven World Trade Center, New York, New York 10048 and Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661, and copies of all or any part of the Registration Statement may be obtained from the Commission upon payment of a prescribed fee. This information is also available from the Commission's Internet website, http://www.sec.gov. 21 CACH FOODS, INC. [A Development Stage Company] INDEX TO FINANCIAL STATEMENTS PAGE - Independent Auditors' Report 23 - Balance Sheet, December 31, 2000 24 - Statement of Operations, for the period from inception on December 20, 2000 through December 31, 2000 25 - Statement of Stockholders' Equity, for the period from inception on December 20, 2000 through December 31, 2000 26 - Statement of Cash Flows, for the period from inception on December 20, 2000 through December 31, 2000 27 - Notes to Financial Statements 28 - Unaudited Balance Sheet, March 31, 2001 32 - Unaudited Statements of Operations, for the three months ended March 31, 2001 and 2000 and for the period from inception on May 4, 1998 through March 31, 2001 33 - Unaudited Statement of Stockholders' Equity, for the period from inception on May 4, 1998 through March 31, 2001 34 - Unaudited Statements of Cash Flows, for the three months ended March 31, 2001 and 2000 and for the period from inception on May 4, 1998 through March 31, 2001 35 - Notes to Unaudited Financial Statements 36 22 INDEPENDENT AUDITORS' REPORT Board of Directors CACH FOODS, INC. (Formerly Llebpmac, Inc.) Pocatello, Idaho We have audited the accompanying balance sheet of Cach Foods, Inc. (formerly Llebpmac, Inc.) [a development stage company] at December 31, 2000, and the related statements of operations, stockholders' equity and cash flows for the years ended December 31, 2000 and 1999 and for the period from inception on May 4, 1998 through December 31, 2000. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the financial statements audited by us present fairly, in all material respects, the financial position of Cach Foods, Inc. (formerly Llebpmac, Inc.) [a development stage company] as of December 31, 2000 and the results of its operations and its cash flows for the years ended December 31, 2000 and 1999 and for the period from inception on May 4, 1998 through December 31, 2000, in conformity with generally accepted accounting principles. The accompanying financial statements have been prepared assuming the Company will continue as a going concern. As discussed in Note 5 to the financial statements, the Company has incurred losses since its inception and has not yet been successful in establishing profitable operations, raising substantial doubt about its ability to continue as a going concern. Management's plans in regards to these matters are also described in Note 5. The financial statements do not include any adjustments that might result from the outcome of these uncertainties. PRITCHETT, SILER & HARDY, P.C. March 14, 2001 Salt Lake City, Utah 23 CACH FOODS, INC. (Formerly Llebpmac, Inc.) [A Development Stage Company] BALANCE SHEET ASSETS December 31, 2000 ___________ CURRENT ASSETS: Cash $ 6,046 ___________ Total Current Assets 6,046 ___________ $ 6,046 ___________ LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Loan payable - related party $ 1,076 ___________ Total Current Liabilities 1,076 ___________ STOCKHOLDERS' EQUITY: Preferred stock, $.001 par value, 5,000,000 shares authorized, no shares issued and outstanding - Common stock, $.001 par value, 100,000,000 shares authorized, 12,000,000 shares issued and outstanding 12,000 Capital in excess of par value (6,000) Deficit accumulated during the development stage (1,030) ___________ Total Stockholders' Equity 4,970 ___________ $ 6,046 ___________ The accompanying notes are an integral part of this financial statement. 24 CACH FOODS, INC. (Formerly Llebpmac, Inc.) [A Development Stage Company] STATEMENTS OF OPERATIONS For the From Inception Years Ended on May 4, December 31, 1998 through ____________________ December 31, 2000 1999 2000 _______________________________ REVENUE $ - $ - $ - EXPENSES: General and Administrative (261) (185) (1,076) _______________________________ LOSS FROM OPERATIONS (261) (185) (1,076) OTHER INCOME: Interest Income 18 20 46 _______________________________ LOSS BEFORE INCOME TAXES (243) (165) (1,030) CURRENT TAX EXPENSE - - - DEFERRED TAX EXPENSE - - - _______________________________ NET LOSS $ (243) $ (165) $(1,030) _______________________________ LOSS PER COMMON SHARE $ (.00) $ (.00) $ (.00) _______________________________ The accompanying notes are an integral part of these financial statements. 25 CACH FOODS, INC. (Formerly Llebpmac, Inc.) [A Development Stage Company] STATEMENT OF STOCKHOLDERS' EQUITY FROM THE DATE OF INCEPTION ON MAY 4, 1998 THROUGH DECEMBER 31, 2000
Deficit Accumulated Preferred Stock Common Stock Capital in During the _______________ ________________________ Excess of Development Shares Amount Shares Amount Par Value Stage ______ ________ __________ ____________ ______________ ___________ BALANCE, May 4, 1998 - $ - - $ - $ - $ - Issuance of 2,000,000 shares common stock for cash at $.0005 per share, August 31, 1998 - - 2,000,000 2,000 (1,000) - Net loss for the period ended December 31, 1998 - - - - - (622) ________ ________ ___________ ___________ _____________ ___________ BALANCE, December 31, 1998 - - 2,000,000 2,000 (1,000) (622) Net loss for the year ended December 31, 1999 - - - - - (165) _________ ________ ___________ ___________ ____________ ___________ BALANCE, December 31, 1999 - - 2,000,000 2,000 (1,000) (787) Issuance of 10,000,000 shares of common stock for cash at $.0005 per share, September 20, 2000 - - 10,000,000 10,000 (5,000) - Net loss for the year ended December 31, 2000 - - - - - (243) __________ _______ ____________ ____________ __________ ___________ BALANCE, December 31, 2000 - $ - 12,000,000 $ 12,000 $ (6,000) $ (1,030) ___________ _______ ____________ ____________ __________ ___________
The accompanying notes are an integral part of this financial statement. 26 CACH FOODS, INC. (Formerly Llebpmac, Inc.) [A Development Stage Company] STATEMENTS OF CASH FLOWS
For the From Inception Years Ended on May 4, December 31, 1998 through _______________________ December 31, 2000 1999 2000 ___________ __________ _________ Cash Flows From Operating Activities: Net loss $ (243) $ (165) $ (1,030) Adjustments to reconcile net loss to net cash used by operating activities: Non-cash expenses 261 185 1,076 ___________ __________ _________ Net Cash Provided (Used) by Operating Activities 18 20 46 ___________ __________ _________ Cash Flows From Investing Activities Net Cash Provided by Investing Activities - - - __________ __________ __________ Cash Flows From by Financing Activities: Proceeds from issuance of common stock 5,000 - 6,000 __________ __________ __________ Net Cash Provided by Financing Activities 5,000 - 6,000 __________ __________ __________ Net Increase in Cash 5,018 20 6,046 Cash at Beginning of Period 1,028 1,008 - __________ __________ __________ Cash at End of Period $ 6,046 $ 1,028 $ 6,046 __________ __________ __________ Supplemental Disclosures of Cash Flow Information: Cash paid during the period for: Interest $ - $ - $ - Income taxes $ - $ - $ -
Supplemental Schedule of Noncash Investing and Financing Activities: For the year ended December 31, 2000: An officer/shareholder of the Company paid $261 of expenses for the Company. For the year ended December 31, 1999: An officer/shareholder of the Company paid $185 of expenses for the Company. For the period from inception on May 4, 1998 through December 31, 1998: An officer/shareholder of the Company paid $630 of expenses for the Company. The accompanying notes are an integral part of these financial statements. 27 CACH FOODS, INC. (Formerly Llebpmac, Inc.) [A Development Stage Company] NOTES TO FINANCIAL STATEMENTS NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Organization - Cach Foods, Inc. (the Company) was organized under the laws of the State of Nevada on May 4, 1998 as Llebpmac, Inc. Effective November 2, 2000, the Company changed its name from Llebpmac, Inc. to Cach Foods, Inc. The Company has not commenced planned principal operations and is considered a development stage company as defined in SFAS No. 7. The Company plans to be a merchandiser of wholesale snack foods. The Company has, at the present time, not paid any dividends and any dividends that may be paid in the future will depend upon the financial requirements of the Company and other relevant factors. Organization Costs - Organization costs, which reflect amounts expended to organize the Company, amounted to $530 and were expensed during the period ended December 31, 1998. Loss Per Share - The computation of loss per share is based on the weighted average number of shares outstanding during the period presented in accordance with Statement of Financial Accounting Standards No. 128, "Earnings Per Share". [See Note 6] Cash and Cash Equivalents - For purposes of the financial statements, the Company considers all highly liquid debt investments purchased with a maturity of three months or less to be cash equivalents. Accounting Estimates - The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosures of contingent assets and liabilities at the date of the financial statements, and the reported amount of revenues and expenses during the reported period. Actual results could differ from those estimated. Recently Enacted Accounting Standards - Statement of Financial Accounting Standards (SFAS) No. 136, "Transfers of Assets to a not for profit organization or charitable trust that raises or holds contributions for others", SFAS No. 137, "Accounting for Derivative Instruments and Hedging Activities - deferral of the effective date of FASB Statement No. 133 (an amendment of FASB Statement No. 133)", SFAS No. 138 "Accounting for Certain Derivative Instruments and Certain Hedging Activities - and Amendment of SFAS No. 133", SFAS No. 139, "Recission of SFAS No. 53 and Amendment to SFAS No. 63, 89 and 21", and SFAS No. 140, "Accounting to Transfer and Servicing of Financial Assets and Extinguishment of Liabilities", were recently issued. SFAS No. 136, 137, 138, 139 and 140 have no current applicability to the Company or their effect on the financial statements would not have been significant. 28 CACH FOODS, INC. (Formerly Llebpmac, Inc.) [A Development Stage Company] NOTES TO FINANCIAL STATEMENTS NOTE 2 - CAPITAL STOCK Common Stock - On August 31, 1998, in connection with its organization, the Company issued 2,000,000 shares of its previously authorized, but unissued common stock. The shares were issued for cash of $1,000 ($.0005 per share). On September 20, 2000, the Company issued 10,000,000 shares of its previously authorized, but unissued common stock. The shares were issued for cash of $5,000 ($.0005 per share). On October 2, 2000, the Company effected a 2-for-1 common stock split. The financial statements for all periods presented have been restated to reflect the stock split. Preferred stock - The Company has authorized 5,000,000 shares of preferred stock, $.001 par value, with such rights, preferences and designations and to be issued in such series as determined by the Board of Directors. No shares were issued and outstanding at December 31, 2000. NOTE 3 - INCOME TAXES The Company accounts for income taxes in accordance with Statement of Financial Accounting Standards No. 109 "Accounting for Income Taxes". FASB 109 requires the Company to provide a net deferred tax asset/liability equal to the expected future tax benefit/expense of temporary reporting differences between book and tax accounting methods and any available operating loss or tax credit carryforwards. The Company has available at December 31, 2000, unused operating loss carryforwards of approximately $1,000 which may be applied against future taxable income and which expire in various years from 2018 through 2020. The amount of and ultimate realization of the benefits from the operating loss carryforwards for income tax purposes is dependent, in part, upon the tax laws in effect, the future earnings of the Company, and other future events, the effects of which cannot be determined. Because of the uncertainty surrounding the realization of the loss carryforwards the Company has established a valuation allowance equal to the amount of the loss carryforwards and, therefore, no deferred tax asset has been recognized for the loss carryforwards. The net deferred tax assets are approximately $350 and $300 as of December 31, 2000 and 1999, respectively, with an offsetting valuation allowance at each year end of the same amount resulting in a change in the valuation allowance of approximately $50 during 2000. NOTE 4 - RELATED PARTY TRANSACTIONS Management Compensation - As of December 31, 2000, the Company has not paid any compensation to any officer/director of the Company. Office Space - The Company has not had a need to rent office space. An officer/shareholder of the Company is allowing the Company to use his office as a mailing address, as needed, at no expense to the Company. Loan Payable - An officer/shareholder of the Company has paid expenses totaling $1,076 on behalf of the Company. At December 31, 2000 the Company owed the shareholder $1,076. No interest is being accrued on the advances. 29 CACH FOODS, INC. [A Development Stage Company] NOTES TO FINANCIAL STATEMENTS NOTE 5 - GOING CONCERN The accompanying financial statements have been prepared in conformity with generally accepted accounting principles, which contemplate continuation of the Company as a going concern. However, the Company has incurred losses since its inception and has not yet been successful in establishing profitable operations. These factors raise substantial doubt about the ability of the Company to continue as a going concern. In this regard, management is proposing to raise any necessary additional funds not provided by operations through loans or through additional sales of its common stock. There is no assurance that the Company will be successful in raising this additional capital or achieving profitable operations. The financial statements do not include any adjustments that might result from the outcome of these uncertainties. NOTE 6 - LOSS PER SHARE The following data shows the amounts used in computing loss per share: For the From Inception Years Ended on May 4, December 31, 1998 through _______________________December 31, 2000 1999 2000 __________ __________ __________ Loss from continuing operations available to common shareholders (numerator) $ (243) $ (165) $(1,030) ___________ __________ __ _______ Weighted average number of common shares outstanding used in loss per share for the period (denominator) 4,786,885 2,000,000 2,804,527 __________ __________ ___ _______ Dilutive loss per share was not presented, as the Company had no common stock equivalent shares for all periods presented that would affect the computation of diluted loss per share. NOTE 7 - CONTRACTS AND COMMITMENTS On October 10, 2000, the Company entered into a licensing agreement with an officer/shareholder of the Company for exclusive rights to use the brand name "Idaho Chips". The agreement is cancelable after April 10, 2003 by either party giving three months written notice to the other. The agreement requires payment of 5% of gross revenues produced from use of the brand name to the officer/shareholder of the Company for 30 months. At that point, if total gross revenues from use of the brand name are at least $500,000, the agreement will be renewed for an additional 12 months. The agreement will then be renewed for 12 month terms for each successive 12 month period of $300,000 in gross revenues from use of the brand name. The agreement is non-assignable and prohibits the Company from selling or transferring more than 50% of the outstanding stock. 30 CACH FOODS, INC. [A Development Stage Company] NOTES TO FINANCIAL STATEMENTS NOTE 8 - SUBSEQUENT EVENTS Note Payable - On March 5, 2001, the Company borrowed $2,000 from an officer/shareholder of the company. The underlying note payable is due March 5, 2002 and accrues interest at 10% per annum. Stock Issuance - On April 20, 2001, the Company issued 1,000 shares of previously authorized but unissued common stock to two directors for their services, totaling 2,000 new shares issued. Stock Split - On April 26, 2001, the Company amended its Articles of Incorporation. The amendment changed the par value of common stock to $.001 per share and the authorized number of shares to 100,000,000. The financial statements for all periods presented have been restated to reflect the amendment. Proposed Stock Offering - The Company is proposing to make a public offering of 250,000 shares of its previously authorized but unissued common stock. This offering is proposed to be registered with the Security and Exchange Commission on Form SB- 2. An offering price of $.50 per share has been arbitrarily determined by the Company. The Company will pay a 15% commission if brokers are used in the offering, otherwise the offering will be managed by the Company, who will receive no sales commissions or other compensation in connection with the offering, except for reimbursement of expenses actually incurred on behalf of the Company in connection with the offering. Offering costs are estimated to be approximately $25,000. 31 CACH FOODS, INC. [A Development Stage Company] BALANCE SHEET [Unaudited] ASSETS March 31, 2001 ___________ CURRENT ASSETS: Cash $ 3,046 ___________ Total Current Assets 3,046 ___________ $ 3,046 ____________ LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) CURRENT LIABILITIES: Loan payable - related party $ 1,076 Note payable - related party 2,000 Accrued interest payable - related party 7 ___________ Total Current Liabilities 3,083 ___________ STOCKHOLDERS' EQUITY (DEFICIT): Preferred stock, $.001 par value, 5,000,000 shares authorized, no shares issued and outstanding - Common stock, $.001 par value, 100,000,000 shares authorized, 12,000,000 shares issued and outstanding 12,000 Capital in excess of par value (6,000) Deficit accumulated during the development stage (6,037) ___________ Total Stockholders' Equity (Deficit) (37) ___________ $ 3,046 ____________ The accompanying notes are an integral part of this financial statement. 32 CACH FOODS, INC. [A Development Stage Company] STATEMENTS OF OPERATIONS [Unaudited] For the Three From Inception Months Ended on May 4, March 31, 1998 Through _________________________ March 31, 2001 2000 2001 ____________ __________ ___________ REVENUE $ - $ - $ - EXPENSES: General and Administrative 5,000 - 6,076 ____________ __________ ___________ LOSS FROM OPERATIONS (5,000) - (6,076) _____________ __________ __________ OTHER INCOME (EXPENSE): Interest income - 5 46 Interest expense (7) - (7) _____________ __________ __________ TOTAL OTHER INCOME (EXPENSE) (7) 5 39 _____________ __________ __________ INCOME (LOSS) BEFORE INCOME TAXES (5,007) 5 (6,037) CURRENT TAX EXPENSE - - - DEFERRED TAX EXPENSE - - - ____________ __________ ___________ NET INCOME (LOSS) $ (5,007) $ 5 $ (6,037) ____________ __________ ___________ INCOME (LOSS) PER COMMON SHARE $ (.00) $ .00 $ (.00) ____________ __________ ___________ The accompanying notes are an integral part of these financial statements. 33 CACH FOODS, INC. [A Development Stage Company] STATEMENT OF STOCKHOLDERS' EQUITY FROM THE DATE OF INCEPTION ON MAY 4, 1998 THROUGH MARCH 31, 2001 [Unaudited]
Deficit Accumulated Preferred Stock Common Stock Capital in During the _________________ _____________ Excess of Development Shares Amount Shares Amount Par Value Stage ________ ________ ________ ________ _________ _____________ BALANCE, May 4, 1998 - $ - - $ - $ - $ - Issuance of 2,000,000 shares of common stock for cash at $.0005 per share, August 31, 1998 - - 2,000,000 2,000 (1,000) - Net income (loss) for the period ended December 31, 1998 - - - - - (622) ________ ________ ________ ________ __________ ______________ BALANCE, December 31, 1998 - - 2,000,000 2,000 (1,000) (622) Net income (loss) for the year ended December 31, 1999 - - - - - (165) _________ _________ _________ _________ _________ _____________ BALANCE, December 31, 1999 - - 2,000,000 $ 2,000 $ (1,000) $ (787) Issuance of 10,000,000 shares of common stock for cash at $.0005 per share September 20, 2000 - - 10,000,000 10,000 (5,000) - Net income (loss) for the year ended December 31, 2000 - - - - - (243) _________ _______ _________ ______ ________ ___________ BALANCE, December 31, 2000 - - 12,000,000 12,000 (6,000) (1,030) Net income (loss ) for the period ended March 31, 2001 - - - - - (5,007) _________ ________ _________ _______ _________ ____________ BALANCE, March 31, 2001 - $ - 12,000,000 $12,000 $ (6,000) $ (6,037) _________ ________ _________ _______ _________ ___________
The accompanying notes are an integral part of this financial statement. 34 CACH FOODS, INC. [A Development Stage Company] STATEMENTS OF CASH FLOWS NET INCREASE (DECREASE) IN CASH [Unaudited]
For the Three From Inception Months Ended on May 4, March 31, 1998 Through _________________________ March 31, 2001 2000 2001 __________ __________ _____________ Cash Flows Provided by Operating Activities: Net income (loss) $ (5,007) $ 5 $(6,037) Adjustments to reconcile net loss to net cash used by operating activities: Noncash expenses - - 1,076 Changes in assets and liabilities: Increase (decrease) in notes payable - related party 2,000 - 2,000 Increase (decrease) in accrued interest payable - related party 7 - 7 __________ __________ _____________ Net Cash Provided (Used) by Operating Activities (3,000) 5 (2,954) __________ __________ _____________ Cash Flows Provided by Investing Activities - - - __________ __________ _____________ Net Cash Provided by Investing Activities - - - __________ __________ _____________ Cash Flows Provided by Financing Activities: Proceeds from issuance of common stock - - 6,000 __________ __________ _____________ Net Cash Provided by Financing Activities - - 6,000 __________ __________ _____________ Net Increase (Decrease) in Cash (3,000) 5 3,046 Cash at Beginning of Period 6,046 1,028 - _________________________________ Cash at End of Period $ 3,046 1,033 $ 3,046 _________________________________ Supplemental Disclosures of Cash Flow Information: Cash paid during the period for: Interest $ - $ - $ - Income taxes $ - $ - $ -
Supplemental Schedule of Noncash Investing and Financing Activities: For the period ended March 31, 2001: None For the period ended March 31, 2000: None For the period from inception on May 4, 1998 through March 31, 2001: An officer/shareholder of the Company paid $1,076 of expenses for the Company. The accompanying notes are an integral part of these financial statements. 35 CACH FOODS, INC. [A Development Stage Company] NOTES TO UNAUDITED FINANCIAL STATEMENTS NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Organization - Cach Foods, Inc. (the Company) was organized under the laws of the State of Nevada on May 4, 1998 as Llebpmac, Inc. Effective November 2, 2000, the Company changed its name from Llebpmac, Inc. to Cach Foods, Inc. The Company has not commenced planned principal operations and is considered a development stage company as defined in SFAS No. 7. The Company plans to be a merchandiser of wholesale snack foods. The Company has, at the present time, not paid any dividends and any dividends that may be paid in the future will depend upon the financial requirements of the Company and other relevant factors. Organization Costs - Organization costs, which reflect amounts expended to organize the Company, amounted to $530 and were expensed during the period ended December 31, 1998 Loss Per Share - The computation of loss per share is based on the weighted average number of shares outstanding during the period presented in accordance with Statement of Financial Accounting Standards No. 128, "Earnings Per Share". [See Note 6] Cash and Cash Equivalents - For purposes of the statement of cash flows, the Company considers all highly liquid debt investments purchased with a maturity of three months or less to be cash equivalents. Accounting Estimates - The preparation of Unaudited Financial Statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosures of contingent assets and liabilities at the date of the Unaudited Financial Statements, and the reported amount of revenues and expenses during the reported period. Actual results could differ from those estimated. Recently Enacted Accounting Standards - Statement of Financial Accounting Standards (SFAS) No. 136, "Transfers of Assets to a not for profit organization or charitable trust that raises or holds contributions for others", SFAS No. 137, "Accounting for Derivative Instruments and Hedging Activities - deferral of the effective date of FASB Statement No. 133 (an amendment of FASB Statement No. 133)", SFAS No. 138 "Accounting for Certain Derivative Instruments and Certain Hedging Activities - and Amendment of SFAS No. 133", SFAS No. 139, "Recission of SFAS No. 53 and Amendment to SFAS No. 63, 89 and 21", and SFAS No. 140, "Accounting to Transfer and Servicing of Financial Assets and Extinguishment of Liabilities", were recently issued. SFAS No. 136, 137, 138, 139 and 140 have no current applicability to the Company or their effect on the Unaudited Financial Statements would not have been significant. NOTE 2 - CAPITAL STOCK Preferred Stock - The Company has authorized 5,000,000 shares of preferred stock, $.001 par value, with such rights, preferences and designations and to be issued in such series as determined by the Board of Directors. No shares are issued and outstanding at March 31, 2001. Common Stock - On August 31, 1998, in connection with its organization, the Company issued 2,000,000 shares of its previously authorized, but unissued common stock. The shares were issued for cash of $1,000 or $.0005 per share. 36 CACH FOODS, INC. [A Development Stage Company] NOTES TO UNAUDITED FINANCIAL STATEMENTS NOTE 2 - CAPITAL STOCK [CONTINUED] On September 20, 2000, the Company issued 10,000,000 shares of its previously authorized but unissued common stock. The shares were issued for cash of $5,000 or $.0005 per share. On October 2, 2000, the Company effected a 2-for-1 common stock split. The financial statements for all periods presented have been restated to reflect the stock split. NOTE 3 - INCOME TAXES The Company accounts for income taxes in accordance with Statement of Financial Accounting Standards No. 109 "Accounting for Income Taxes". FASB 109 requires the Company to provide a net deferred tax asset/liability equal to the expected future tax benefit/expense of temporary reporting differences between book and tax accounting methods and any available operating loss or tax credit carryforwards. The Company has available at March 31, 2001, unused operating loss carryforwards of approximately $6,000 which may be applied against future taxable income and which expire in various years through 2021. The amount of and ultimate realization of the benefits from the operating loss carryforwards for income tax purposes is dependent, in part, upon the tax laws in effect, the future earnings of the Company, and other future events, the effects of which cannot be determined. Because of the uncertainty surrounding the realization of the loss carryforwards the Company has established a valuation allowance equal to the amount of the loss carryforwards and, therefore, no deferred tax asset has been recognized for the loss carryforwards. The net deferred tax asset is approximately $2,050 as of March 31, 2001, with an offsetting valuation allowance of the same amount resulting in a change in the valuation allowance of approximately $1,700 for the three months ended March 31, 2001. NOTE 4 - RELATED PARTY TRANSACTIONS Management Compensation - As of March 31, 2001, the Company has not paid any compensation to any officer or director of the Company. Office Space - The Company has not had a need to rent office space. An officer/shareholder of the Company is allowing the Company to use his offices as a mailing address, as needed, at no expense to the Company. Loan Payable - An officer/shareholder of the Company has paid expenses totaling $1,076 on behalf of the Company. At March 31, 2001, the Company owed the shareholder $1,076. No interest is being accrued on the advances. Note Payable - An officer/shareholder of the Company advanced $2,000 to the Company as a note payable. The note is due March 5, 2002 and accrues interest at 10% per annum. At March 31, 2001, accrued interest on the note was $7. 37 CACH FOODS, INC. [A Development Stage Company] NOTES TO UNAUDITED FINANCIAL STATEMENTS NOTE 5 - GOING CONCERN The accompanying Unaudited Financial Statements have been prepared in conformity with generally accepted accounting principles, which contemplate continuation of the Company as a going concern. However, the Company has incurred losses since inception and has not yet been successful in establishing profitable operations. Further, the Company has current liabilities in excess of current assets. These factors raise substantial doubt about the ability of the Company to continue as a going concern. In this regard, management is proposing to raise any necessary additional funds not provided by operations through loans or through additional sales of its common stock. There is no assurance that the Company will be successful in raising this additional capital or achieving profitable operations. The Unaudited Financial Statements do not include any adjustments that might result from the outcome of these uncertainties. NOTE 6 - INCOME (LOSS) PER SHARE The following data shows the amounts used in computing loss per share: For the Three From Inception Months Ended on May 4, March 31, 1998 Through _________________________ March 31, 2001 2000 2001 ____________ ____________ _________ Income (loss) from continuing operations available to common shareholders (numerator) $ (5,007) $ 5 $ (6,037) ____________ ____________ _________ Weighted average number of common shares outstanding used in income (loss) per share for the period (denominator) 12,000,000 2,000,000 3,583,804 ____________ ____________ _________ Dilutive income (loss) per share was not presented, as the Company had no common stock equivalent shares for all periods presented that would affect the computation of diluted income (loss) per share. NOTE 7 - CONTRACTS AND COMMITMENTS On October 10, 2000, the Company entered into a licensing agreement with an officer/shareholder of the Company for exclusive rights to use the brand name "Idaho Chips". The agreement is cancelable after April 10, 2003 by either party giving three months written notice to the other. The agreement requires payment of 5% of gross revenues produced from use of the brand name to the officer/shareholder of the Company for 30 months. At that point, if total gross revenues from use of the brand name are at least $500,000, the agreement will be renewed for an additional 12 months. The agreement will then be renewed for 12 month terms for each successive 12 month period of $300,000 in gross revenues from use of the brand name. The agreement is non-assignable and prohibits the Company from selling or transferring more than 50% of the outstanding stock. 38 CACH FOODS, INC. [A Development Stage Company] NOTES TO FINANCIAL STATEMENTS NOTE 8 - SUBSEQUENT EVENTS Stock Issuance - On April 20, 2001, the Company issued 1,000 shares of previously authorized but unissued common stock to two directors for their services, totaling 2,000 new shares issued. Stock Split- On April 26, 2001, the Company amended its Articles of Incorporation. The amendment changed the par value of common stock to $.001 per share and the authorized number of shares to 100,000,000. The financial statements for all periods presented have been restated to reflect the amendment. Proposed Stock Offering - The Company is proposing to make a public offering of 250,000 shares of its previously authorized but unissued common stock. This offering is proposed to be registered with the Security and Exchange Commission on Form SB- 2. An offering price of $.50 per share has been arbitrarily determined by the Company. The Company will pay a 15% commission if brokers are used in the offering, otherwise the offering will be managed by the Company, who will receive no sales commissions or other compensation in connection with the offering, except for reimbursement of expenses actually incurred on behalf of the Company in connection with the offering. Offering costs are estimated to be approximately $25,000. 39 =============================== =================================== Until _____________, 2001, all dealers that effect transactions in these securities, whether or not $75,000 Minimum participating in this offering, may be required to deliver a $125,000 Maximum prospectus. This is in addition to the dealers' obligation to deliver a prospectus when acting as underwriters and with respect Cach Foods, Inc. to their unsold allotments or subscriptions. - ------------------------------- 150,000 Shares Minimum TABLE OF CONTENTS 250,000 Shares Maximum - ------------------------------- Common Stock $0.001 Par Value Prospectus Summary 2 Risk Factors 2 Forward-Looking Statements 6 Dilution and Comparative Data 7 Use of Proceeds 8 Determination of Offering Price 9 Description of Business 9 Plan of Operation 14 -------------------- Management 15 P R O S P E C T U S Compensation 16 -------------------- Certain Relationships and Related Transactions 16 Principal Stockholders 17 Description of the Securities 18 Shares Available for Future Sale 19 Market for Common Stock 19 Plan of Distribution 20 Legal Matters 21 _________, 2001 Experts 21 Additional Information 21 Index to Financial Statements 22 No dealer, salesperson or other person has been authorized to give any information or to make any representations other than those contained in this Prospectus and, if given or made, such information or representations must not be relied upon as having been authorized by the Company. This Prospectus does not constitute an offer to sell or a solicitation of an offer to buy any of the securities offered hereby to whom it is unlawful to make such offer in any jurisdiction. Neither the delivery of this Prospectus nor any sale made hereunder shall, under any circumstances, create any implication that information contained herein is correct as of any time subsequent to the date hereof or that there has been no change in the affairs of the Company since such date. ==================================== 40 PART II. INFORMATION NOT REQUIRED IN PROSPECTUS ITEM 24. INDEMNIFICATION OF DIRECTORS AND OFFICERS Our company's charter provides that, to the fullest extent that limitations on the liability of directors and officers are permitted by the Nevada Revised Statutes, no director or officer of the company shall have any liability to the company or its stockholders for monetary damages. The Nevada Revised Statutes provide that a corporation's charter may include a provision which restricts or limits the liability of its directors or officers to the corporation or its stockholders for money damages except: (1) to the extent that it is provided that the person actually received an improper benefit or profit in money, property or services, for the amount of the benefit or profit in money, property or services actually received, or (2) to the extent that a judgment or other final adjudication adverse to the person is entered in a proceeding based on a finding in the proceeding that the person's action, or failure to act, was the result of active and deliberate dishonesty and was material to the cause of action adjudicated in the proceeding. Our charter and bylaws provide that the company shall indemnify and advance expenses to its currently acting and its former directors and officers to the fullest extent permitted by the Nevada Revised Business Corporations Act, except for liability for (i) breach of duty of loyalty, (ii) acts or omissions not in good faith that involve intentional misconduct or knowing violation of law, (iii) for the payment of distributions to stockholders in violation of section 78.300 of the Nevada Revised Statutes, or (iv) for any transaction from which the director or officer derived an improper personal benefit. The charter and bylaws provide that we will indemnify our directors and officers and may indemnify our employees or agents to the fullest extent permitted by law against liabilities and expenses incurred in connection with litigation in which they may be involved because of their offices with Cach Foods. However, nothing in our charter or bylaws of the company protects or indemnifies a director, officer, employee or agent against any liability to which he would otherwise be subject by reason of negligence or misconduct of the duties involved in the conduct of his office. To the extent that a director has been successful in defense of any proceeding, the Nevada Revised Statutes provide that he shall be indemnified against reasonable expenses incurred in connection therewith. Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the Company pursuant to the foregoing provisions, or otherwise, the Company has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy and is, therefore, unenforceable. ITEM 25. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION. The following table sets forth the expenses in connection with this Registration Statement. We will pay all expenses of the offering. All of such expenses are estimates, other than the filing fees payable to the Securities and Exchange Commission. Securities and Exchange $ 37.50 Commission Filing Fee Printing Fees and Expenses 500.00 Legal Fees and Expenses 15,000.00 Accounting Fees and Expenses 8,000.00 Blue Sky Fees and Expenses 500.00 Trustee's and Registrar's Fees 500.00 Miscellaneous 462.50 TOTAL $ 25,000.00 41 ITEM 26. RECENT SALES OF UNREGISTERED SECURITIES The following is a detailed list of securities sold within the past three years without registering under the Securities Act. The securities were sold to accredited investors since each recipient was an officer or director at the time of issuance. The sales were private transactions, without registration in reliance on the exemption provided by Section 4(2) of the Securities Act. Each purchaser had a pre-existing relationship with the Company and had access to all material information pertaining to the Company and its financial condition. No broker was involved and no commissions were paid in the transaction. In May 1998 and September 2000, we issued a total of 12,000,000 shares of restricted common stock to Cornelius A. Hofman in exchange for $6,000. In April 2001, we issued 1,000 shares of common stock to Kelly O. McBride and 1,000 shares of common stock to Brian Kramer in consideration for services rendered as directors. ITEM 27. EXHIBITS. Exhibits. SEC Ref. No. Title of Document Location 3.1 Articles of Incorporation E-1 3.2 Amendment No. 1 to Articles of E-8 Incorporation 3.3 Amendment No. 2 to Articles of E-9 Incorporation 3.4 By-laws E-11 5.1 Legal Opinion included in Exhibit 23.1 See E-34 10.1 2001 Stock Option Plan E-21 10.2 License Agreement Dated October 10, 2000 E-31 10.3 Promissory Note to Mr. Hofman Dated March E-33 5, 2001 23.1 Consent of Lehman Walstrand & Associates E-34 23.2 Consent of Pritchett, Siler & Hardy E-35 99.1 Subscription Agreement with Mr. Hofman E-36 99.2 Escrow Agreement E-42 ITEM 28. 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 provisions described in this Registration Statement or otherwise, we have been advised that in the opinion of the 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 us of expenses incurred or paid by a director, officer or controlling persons of Cach Foods in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, we will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question of 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. 42 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; 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. 43 SIGNATURES In accordance with the requirements of the Securities Act of 1933, Cach Foods, Inc., certifies that it has reasonable ground to believe that it meets all of the requirements of filing on Form SB-2 and authorizes this Registration Statement to be signed on its behalf, in the City of Pocatello, State of Idaho, on May 9, 2001. Cach Foods, Inc. Dated: May 9, 2001 By: /s/Cornelius A. Hofman Cornelius A. Hofman President Dated: May 9, 2001 By: /s/Kelly McBride Kelly McBride Secretary & Treasurer 44 POWER OF ATTORNEY Know all men by these present, that each person whose signature appears below constitutes and appoints Cornelius A. Hofman and Kelly McBride (with full power to each of them to act alone) as his true and lawful attorney-in-fact and agent, with full power of substitution, for him and in his name, place and stead in any and all capacities to sign any or all amendments or post-effective amendments to this Registration Statement, including registration statements filed or amendments made pursuant to Rule 462 under the Securities Act of 1933, as amended, and to file the same with all exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, to sign any and all applications, registration statements, notices or other document necessary or advisable to comply with the applicable state securities laws, and to file the same, together with all other documents in connection therewith, with the appropriate state securities authorities, granting unto said attorneys-in-fact and agents or any of them, or their or his substitute or substitutes, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he might or could do in person, thereby ratifying and confirming all that said attorneys-in-fact and agents or any of them, or their or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Act of 1933, this registration statement or Amendment has been signed below by the following persons in the capacities and on the dates indicated. Dated: May 1, 2001 /s/Brian Kramer Brian Kramer Director 45 Pursuant to the requirements of the Securities Act of 1933, this registration statement or Amendment has been signed below by the following persons in the capacities and on the dates indicated. Dated: May 9, 2001 /s/Cornelius A. Hofman Cornelius A. Hofman Director Dated: May 9, 2001 /s/Kelly McBride Kelly McBride Director 46 EX-3 2 ex31.txt Exhibit 3.1 Cach Foods, Inc. Form SB-2 ARTICLES OF INCORPORATION OF LLEBPMAC, INC. ARTICLE I The name of the corporation (which is hereinafter referred to as the "Corporation") is Llebpmac, Inc. ARTICLE II The address of the registered office of the Corporation in the State of Nevada is 3230 East Flamingo Road, Suite #156, Las Vegas, Nevada 89121. The name of the registered agent of the Corporation is Gateway Enterprises, Inc. ARTICLE III The purpose of the Corporation is to be a restaurant. Also, to acquire develop, explore, and otherwise deal in and with all kinds of real and personal property and all related activities, and for any and all other lawful acts or activities for which corporations may be organized under the provisions of Chapter 78 of the Nevada Revised Statutes. ARTICLE IV (a) Common Stock. The aggregate number of shares of Common Stock which the Corporation shall have authority to issue is 50,000,000 shares at a par value of $.001 per share. All stock when issued shall be fully paid and non-assessable, shall be of the same class and have the same rights and preferences. Each share of Common Stock shall be entitled to one vote at a stockholders meetings, either in person or by proxy. Cumulative voting in elections of Directors and all other matters brought before stockholders meeting, whether they be annual or special, shall not be permitted. The holders of the capital stock of the Corporation shall not be personally liable for the payment of the Corporation's debts and the private property of the holders of the capital stock of the Corporation shall not be subject to the payment of debts of the Corporation to any extent whatsoever. Stockholders of the Corporation shall not have any preemptive rights to subscribe for additional issues of stock of the Corporation except as may be agreed from time to time by the Corporation and any such stockholder. E-1 (b) Preferred Stock. The aggregate number of share of Preferred Stock which the Corporation shall have authority to issue is 5,000,000 shares, par value $.001, which may be issued in series, with such designations, preferences, stated values, rights, qualifications or limitations as determined solely by the Board of Directors of the Corporation. ARTICLE V The amount of the authorized stock of the Corporation of any class or classes may be increased or decreased by the affirmative vote of the holders of a majority of the voting power of all shares of the Corporation entitled to vote generally in the election of directors, voting together as a single class. ARTICLE VI SECTION 1. Number. Election and Terms of Directors. The members of the governing board of the Corporation shall be styled Directors of the Corporation. The number of the Directors of the Corporation shall be fixed from time to time by or pursuant to the By-Laws of the Corporation, and shall initially be one. SECTION 2. Newly Created Directorships and Vacancies. Newly created directorships resulting from any increase in the number of Directors and any vacancies on the Board of Directors resulting from death, resignation, disqualification, removal or other cause shall be filled only by the affirmative vote of a majority of the remaining Directors then in office, even though less than a quorum of the Board of Directors. No decrease in the number of Directors constituting the Board of Directors shall shorten the term of any incumbent Director. SECTION 3. Removal of Directors. Any Director may be removed from office, with or without cause, only by the affirmative vote of the holders of 75 % of the voting power of all shares of the Corporation entitled to vote generally in the election of Directors, voting together as a single class. ARTICLE VII Any action required or permitted to be taken by the stockholders of the Corporation may be effected by any consent in writing by such holders, signed by holders of not less than that number of shares of Common Stock required to approve such action. ARTICLE VIII Subject to any express provision of the laws of the State of Nevada or these Articles of Incorporation, the Board of Directors shall have the power to make, alter, amend and repeal the By-Laws of the Corporation (except so far as By-Laws of the Corporation adopted by the stockholders shall otherwise provide). Any By-Laws made by the Directors under the powers conferred hereby may be altered, amended or repealed by the Directors or by the stockholders. ARTICLE IX Election of Directors need not be by ballot unless the By- laws of the Corporation shall so provide. E-2 ARTICLE X SECTION 1. Elimination of Certain Liability of Directors. A Director of the Corporation shall not be personally liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a director, except for liability (i) for any breach of the Director's duty of loyalty to the Corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) for the payment of distributions to stockholders in violation of Section 78.300 of the Nevada Revised Statutes, or (iv) for any transaction from which the Director derived an improper personal benefit. SECTION 2. Indemnification and Insurance. (a) Action, etc.. Other Than by or in the Right of the Corporation. The Corporation shall indemnify and hold harmless, to the fullest extent permitted by applicable law as it presently exists or may hereafter be amended, any Agent (as hereinafter defined) against costs, charges and Expenses (as hereinafter defined), judgments, fines and amounts paid in settlement actually and reasonably incurred by the Agent in connection with such action, suit or proceeding, and any appeal therefrom, if the Agent acted in good faith and in a manner the Agent reasonably believed to be in or not opposed to the best interests of the Corporation, and with respect to any criminal action or proceeding, had no reasonable cause to believe such conduct was unlawful. The termination of any action, suit or proceeding--whether by judgment, order, settlement conviction, or upon a plea of nolo contendere or its equivalent--shall not, of itself, create a presumption that the Agent did not act in good faith and in a manner which the Agent reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal action or proceeding, that the Agent had reasonable cause to believe that the Agent's conduct was unlawful. (b) Action, etc., by or in the Right of the Corporation. The Corporation shall indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed judicial action or suit brought by or in the right of the Corporation to procure a judgment in its favor by reason of the fact that such person is or was an Agent, against costs, charges and Expenses actually and reasonably incurred by the Agent in connection with the defense or settlement of such action or suit and any appeal therefrom if the Agent acted in good faith and in a manner such person reasonably believed to be in or not opposed to the best interests of the Corporation, except that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable for gross negligence or wilful misconduct in the performance of the Agent's duty to the Corporation unless and only to the extent that the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such costs, charges and Expenses which such court shall deem proper. (c) Determination of Right of Indemnification. Any indemnification under Paragraphs (a) and (b) of this Section (unless ordered by a court) shall be paid by the Corporation unless a determination is reasonably and promptly made (i) by the Board of Directors by a majority vote of a quorum consisting of Directors who were not parties to such action, suit E-3 or proceeding, or (ii) if such a quorum is not obtainable, or, even if obtainable, if a quorum of disinterested Directors so directs, by independent legal counsel in a written opinion, or (iii) by the stockholders, that such person acted in bad. faith and in a manner that such person did not believe to be in or not opposed to the best interests of the Corporation, or, with respect to any criminal proceeding, that such person believed or had reasonable cause to believe that his conduct was unlawful. (d) Indemnification Against Expenses of Successful Party. Notwithstanding the other provisions of this Section, to the extent that an Agent has been successful on the merits or otherwise, including, without limitation, the dismissal of an action without prejudice, the settlement of an action without admission of liability, or the defense of any claim, issue or matter therein, or on appeal from any such proceeding, action, claim or matter, such Agent shall be indemnified against all costs, charges and Expenses incurred in connection therewith. (e) Advances of Expenses. Except as limited by Paragraph (f) of this Section, costs, charges, and Expenses incurred by an Agent in any action, suit, proceeding or investigation or any appeal therefrom shall be paid by the Corporation in advance of the final disposition of such matter if the Agent shall undertake to repay such amount in the event that it is ultimately determined as provided herein that such person is not entitled to indemnification. Notwithstanding the foregoing, no advance shall be made by the Corporation if a determination is reasonably and promptly made by the Board of Directors by a majority vote of a quorum of disinterested Directors, or (if such a quorum is not obtainable or, even if obtainable, a quorum of disinterested Directors so directs) by independent legal counsel in a written opinion, that, based upon the facts known to the Board of Directors or counsel at the time such determination is made, the Agent acted in bad faith and in a manner that such person did not believe to be in or not opposed to the best interests of the Corporation, or, with respect to any criminal proceeding, that such person believed or had reasonable cause to believe his conduct was unlawful. In no event shall any advance be made in instances where the Board of Directors or independent legal counsel reasonably determines that the Agent deliberately breached such persons's duty to the Corporation or its stockholders. (f) Right of Agent to Indemnification upon Application: Procedure upon Application. Any indemnification under Paragraphs (a), (b) and (d) or advance under Paragraph (e) of this Section, shall be made promptly, and in any event within 60 days, upon the written request of the Agent, unless with respect to applications under Paragraphs (a), (b) or (e), a determination is reasonably and promptly made by the Board of Directors by a majority vote of a quorum of disinterested Directors that such Agent acted in a manner set forth in such Paragraphs as to justify the Corporation's not indemnifying or making an advance to the Agent. In the event no quorum of disinterested Directors is obtainable, the Board of Directors shall promptly direct that independent legal counsel shall decide whether the Agent acted in the manner set forth in such Paragraphs as to justify the Corporation's not indemnifying or making an advance to the Agent. The right to indemnification or advances as granted by this Section shall be enforceable by the Agent in any court of competent jurisdiction if the Board of Directors or independent legal counsel denies the claim in whole or in part or if no disposition of such claim is made within 60 days. The Agent's costs, charges and Expenses incurred in connection with successfully establishing such E-4 person's right to indemnification, in whole or in part, in any such proceeding shall also be indemnified by the Corporation. (g) Other Rights and Remedies. The indemnification provided by this Section shall not be deemed exclusive of, and shall not affect, any other rights to which an Agent seeking indemnification may be entitled under any law, By-law, or charter provision, agreement, vote of stockholders or disinterested Directors or otherwise, both as to action in such person's official capacity and as to action in another capacity while holding such office, and shall continue as to a person who has ceased to be an Agent and shall inure to the benefit of the heirs, executors and administrators of such a person. All rights to indemnification under this Section shall be deemed to be contract between the Corporation and the Agent who serves in such capacity at any time while these Articles and other relevant provisions of the general corporation law and other applicable law, if any, are in effect. Any repeal or modification thereof shall not affect any rights or obligations then existing. (h) Insurance. The Corporation may purchase and maintain insurance on behalf of any person who is or was an Agent against any liability asserted against such person and incurred by him or her in any such capacity, or arising out of such persons's status as such, whether or not the Corporation would have the power to indemnify such person against such liability under the provisions of this Section. The Corporation may create a trust fund, grant a security interest or use other means (including, without limitation, a letter of credit) to ensure the payment of such sums as may become necessary to effect indemnification as provided herein. (i) Other Enterprises. Fines and Serving at Corporation's Request. For purposes of this Section, references to "other enterprise" in Paragraph (a) shall include employee benefit plans; references to "fines" shall include any excise taxes assessed on a person with respect to any employee benefit plan; and references to "serving at the request of the Corporation" shall include any service by Agent as Director, officer, employee, agent or fiduciary of the Corporation which imposes duties on, or involves services by, such Agent with respect to any employee benefit plan, its participants, or beneficiaries; and a person who acted in good faith and in a manner such person reasonably believed to be in the interest of the participants and beneficiaries of an employee benefit plan shall be deemed to have acted in a manner "not opposed to the best interests of the Corporation" as referred to in this Section. (J) Savings Clause. If this Section or any portion thereof shall be invalidated on any ground by any court of competent jurisdiction, then the Corporation shall nevertheless indemnify each Agent as to costs, charges and Expenses, judgments, fines and amounts paid in settlement with respect to any action, suit, proceeding or investigation, and any appeal therefrom, whether civil, criminal or administrative, and whether internal or external, including a grand jury proceeding and an action or suit brought by or in the right of the Corporation, to the full extent permitted by any applicable portion of this Section that shall not have been invalidated, and to the fullest extent permitted by applicable law. (k) Common Directors - Transactions between Corporations. No contract or other transaction between this corporation and any on or more of its directors or any other E-5 corporation, firm, association, or entity in which one or more of its directors or officers are financially interested, shall be either void or voidable because of such relationship or interest, or because such director or directors are present at the meeting of the Board of Directors, or a committee thereof, which authorizes, approves, or ratifies such contract or transaction, or because his or their votes are counted for such purpose if. (a) the fact of such relationship or interest is disclosed or known to the Board of Directors or committee which authorizes, approves, or ratifies the contract or transaction by vote or consent sufficient for the purpose without counting the votes or consents of such interested director; or (b) the fact of such relationship or interest is disclosed or known to the stockholders entitled to vote and they authorize, approve, or ratify such contract or transaction by vote or written consent, or (c) the contract or transaction is fair and reasonable to the corporation. Common or interested directors may be counted in determining the presence of a quorum at a meeting of the Board of Directors or committee there of which authorizes, approves or ratifies such contract or transaction. (1) Definitions. For the purposes of this Article: (1) "Agent" means any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding or investigation, whether civil, criminal or administrative, and whether external or internal to the Corporation (other than a judicial action or suit brought by or in the right of the Corporation) by reason of the fact that he or she is or was or has agreed to be a Director, officer, employee, agent or fiduciary of the Corporation, or that, being or having been such a Director, officer, employee, agent or fiduciary, he or she is or was serving at the request of the Corporation as a Director, officer, employee, agent or fiduciary of another corporation, partnership, joint venture, trust or other enterprise. (2) "Expenses" shall include all reasonable attorneys' fees, retainers, court costs, transcript costs, fees of experts, witness fees, travel expenses, duplicating costs, printing and binding costs, telephone charges, postage, delivery service fees, and all other disbursements or expenses of the types customarily incurred in connection with prosecuting, defending, preparing to prosecute or defend, investigating, or being or preparing to be a witness in a proceeding. ARTICLE XI The Corporation reserves the right at any time and from time to time to amend, alter, change or repeal any provision contained in these Articles of Incorporation, and other provisions authorized by the laws of the State of Nevada at the time in force may be added or inserted, in the manner now or hereafter prescribed by law; and all rights, preferences and privileges of whatsoever nature conferred upon stockholders, Directors or any other persons whomsoever by and pursuant to these Articles of Incorporation in its present form or as hereafter amended are granted subject to the right reserved in this Article. E-6 ARTICLE XII The name and address of each incorporator of the Corporation is: Name Address Cornelius A. Hofman 227 South Ninth Ave., Pocatello, ID 83201 ARTICLE XIII The name and address of each member of the Board of Directors of the Corporation is: Name Address Cornelius A. Hofman 227 South Ninth Ave., Pocatello, ID 83201 ARTICLE XIV The Corporation shall exist in perpetuity, from and after the date of filing of its original Articles of Incorporation with the Secretary of State of the State of Nevada unless dissolved according to law. IN WITNESS WHEREOF, this certificate has been executed by Cornelius A. Hofman, Director of Llebpmac, Inc., on this 20 day of April, 1998. /s/ Cornelius A. Hofman Cornelius A. Hofman Director STATE OF IDAHO ) ) ss, COUNTY OF BANNOCK ) On the 20 day of April, 1998, personally appeared before me Cornelius A. Hofman who, being by me first duly sworn, declared that he is the person who signed the foregoing document as Director of Llebpmac, Inc. and that the statements therein contained are true. IN WITNESS THEREOF, I have hereunto set my hand and seal this 20 day of April, 1998. /s/ Julie A. Stone NOTARY PUBLIC Residing at Pocatello, Idaho My commission expires: 8/29/2003 E-7 EX-3 3 ex32.txt Exhibit 3.2 Cach Foods, Inc. Form SB-2 2 The Articles have been amended as follows (provide article numbers if available): Article I: The name of the corporation (which is hereinafter referred to as the "Corporation") is Cach Foods, Inc. Article III: The purpose of the Corporation is to be a snack food wholesale merchandiser. Also, to acquire, develop, explore and otherwise deal in and with all kinds of real and personal property and all related activities, and for any and all other lawful acts or activities for which corporations may be organized under the provisions of Chapter 78 of the Nevada Revised Statutes. Article IV: The shareholders and Board of Directors voted on and approved a 2-for-1 forward split of the common stock. Following the forward split of the common stock, there will be 12,000,000 common shares issued and outstanding at a par value of $0.0005 per share, and the number of shares of Common Stock which the Corporation shall have authority to issue will be 100,000,000 shares at a par value of $0.0005 per share. Article XII: The name and address of each incorporator of the Corporation is: Name Address Cornelius A. Hofman PO Box 4669, Pocatello, ID 83205 Article XIII: The name and address of each member of the Board Of Directors of the Corporation is: Name Address Cornelius A. Hofman PO Box 4669, Pocatello, ID 83205 Kelly O. McBride 340 East Whitman Street, Pocatello, ID 83201 E-8 EX-3 4 ex33.txt Exhibit 3.3 Cach Foods, Inc. Form SB-2 AMENDED ARTICLES OF INCORPORATION OF CACH FOODS, INC. Pursuant to NRS 78.403 of the Nevada Business Corporations Act, Cach Foods, Inc., hereinafter the "Corporation," adopts the following Amendment of its Articles of Incorporation: ARTICLE IV (a) Common Stock. The aggregate number of shares of Common Stock which the Corporation shall have authority to issue is 100,000,000 shares at par value of $0.001 per share. All stock when issued shall be fully paid and non-assessable, shall be of the same class and have the same rights and preferences. Each share of Common Stock shall be entitled to one vote at a stockholders meeting, wither in person or by proxy. Cumulative voting in elections of Directors and all other matters brought before a stockholders meeting, whether they be annual or special, shall not be permitted. The holders of the capital stock of the Corporation shall not be personally liable for the payment of the Corporation's debts and the private property of the holders of the capital stock of the Corporation shall not be subject to the payment of debts of the Corporation to any extent whatsoever. Stockholders of the Corporation shall not have any preemptive rights to subscribe for additional issued of stock of the Corporation except as may be agreed from time to time by the Corporation or any such stockholder. (b) Preferred Stock. The aggregate number of shares of Preferred Stock which the Corporation shall have authority to issue is 5,000,0000 shares, par value $0.001, which may be issued in series, with such designations, preferences, stated valued, rights, qualifications or limitations as determined solely by the Board of Directors of the Corporation. ARTICLE XIV The Corporation elects not to be governed by the terms and provisions of Acquisition of Controlling Interest found under Sections 78.378 through 78.3793, inclusive, of the Nevada Revised Statutes, as the same may be amended, superseded, or replaced by any successor section, statute, or provision. No amendment to these Articles of Incorporation, directly or indirectly, by merger or consolidation or otherwise, having the effect of amending or repealing any of the provisions of this paragraph shall apply to or have any effect on any transaction involving acquisition of control by any person or any transaction with an interested stockholder occurring prior to such amendment or repeal. The Corporation elects not to be governed by the terms and provisions of Combinations with Interested Stockholders found under Sections 78.411 through 78.444, inclusive, of the Nevada Revised Statutes, as the same may be amended, superseded, or replaced by any successor section, statute, or provision. E-9 ARTICLE XV The Corporation shall exist in perpetuity, from and after the date of filing of its original Articles of Incorporation with the Secretary of State of the State of Nevada unless dissolved according to law. The foregoing Amendment was adopted by the Board of Directors and Stockholders of the Corporation. The Amendment was adopted by separate written consents of the Board of Directors and Stockholders dated April 20, 2001, in accordance with Nevada Revised Statutes 78.315 and 78.320. One Stockholder owning 10,000,000 shares of Common Stock voted in favor of the Amendment, which represented a majority of the 12,000,000 issued and outstanding shares. Accordingly, the Amendment was approved. IN WITNESS WHEREOF, these Articles of Amendment are executed for and on behalf of the Corporation by the undersigned officers hereunto duly authorized, who certify that the facts herein stated are true this 26th day of April 2001. CACH FOODS, INC. /s/ Cornelius A. Hofman Cornelius A. Hofman President /s/ Kelly O. McBride Kelly O. McBride Secretary E-10 EX-3 5 ex34.txt Exhibit 3.4 Cach Foods, Inc. Form SB-2 BY-LAWS of LLEBPMAC, INC. A NEVADA CORPORATION ARTICLE I OFFICES Section I. The principal office of the Corporation shall be at 227 South Ninth Avenue, Pocatello, ID 83201. The Corporation may have such other offices, either within or without the State of Idaho as the Board of Directors may designate or as the business of the Corporation may require from time to time. The registered office of the Corporation required by the Nevada Business Corporation Act to be maintained in the State of Nevada may be, but need not be, identical with the principal offices in the State of Nevada, and the address of the registered office may be changed, from time to time, by the Board of Directors. ARTICLE II STOCKHOLDERS Section 1. Annual Meeting. The annual meeting of stockholders shall be held at the principal office of the Corporation, at 227 South Ninth Avenue; Pocatello, ID 83201 or at such other places on the third Monday of May, or at such other times as the Board of Directors may, from time to time, determine. If the day so designated falls upon a legal holiday then the meeting shall be held upon the first business day thereafter. The Secretary shall serve personally or by mail a written notice thereof, not less than ten (10) nor more than fifty (50) days previous to such meeting, addressed to each stockholder at his address as it appears on the stock book; but at any meeting at which all stockholders shall be present, or of which all stockholders not present have waived notice in writing, the giving of notice as above required may be dispensed with. Section 2. Special Meetings. Special meetings of stockholders other than those regulated by statute, may be called at any time by a majority of the Directors. Notice of such meeting stating the place, day and hour and the purpose for which it is called shall be served personally or by mail, not less than ten (10) days before the date set for such meeting. If mailed, it shall be directed to a stockholder at his address as it appears on the stock book; but at any meeting at which all stockholders shall be present, or of which stockholders not present have waived notice in writing, the giving of notice as above described may be dispensed with. The Board of Directors shall also, in like manner, call a special meeting of stockholders whenever so requested in writing by stockholders representing not less than ten percent (10%) of the capital stock of the Corporation entitled to vote at the meeting. The President may in his discretion call a special meeting of stockholders upon ten (10) days notice. No business other than that specified in the call for the meeting shall be transacted at any special meeting of the stockholders, except upon the unanimous consent of all the stockholders entitled to notice thereof. E-11 Section 3. Closing of Transfer Books or fixing of Record Date. For the purpose of determining stockholders entitled to receive notice of or to vote at any meeting of stockholders or any adjournment thereof, or stockholders entitled to receive payment of any dividend; or in order to make a determination of stockholders for any other proper purpose, the Board of Directors of the Corporation may provide that the stock transfer books shall be closed for a stated period not to exceed, in any case, fifty (50) days. If the stock transfer books shall be closed for the purpose of determining stockholders entitled to notice of or to vote at a meeting of stockholders, such books shall be closed for a least ten (10) days immediately preceding such meeting. In lieu of closing the stock transfer books, the Board of Directors may fix in advance a date as the record date for any such determination of stockholders, such date in any case to be not more than fifty (50) days, and in case of a meeting of stockholders, not less than ten (10) days prior to the date on which the particular action, requiring such determination of stockholders, is to be taken. If the stock transfer books are not closed, and no record date is fixed for the determination of stockholders entitled to receive notice of or to vote at a meeting of stockholders, or stockholders entitled to receive payment of a dividend, the date on which notice of the meeting is mailed or the date on which the resolution of the Board of Directors declaring such dividend is adopted, as the case may be, shall be the record date for such determination as to stockholders. When a determination of stockholders entitled to vote at any meeting of stockholders has been made as provided in this section, such determination shall apply to any adjournment thereof. Section 4. Voting. At all meetings of the stockholders of record having the right to vote, subject to the provisions of Section 3, each stockholder of the Corporation is entitled to one (1) vote for each share of stock having voting power standing in the name of such stockholder on the books of the Corporation. Votes may be cast in person or by written authorized proxy. Section 5. Proxy. Each proxy must be executed in writing by the stockholder of the Corporation or his duly authorized attorney. No proxy shall be valid after the expiration of eleven (11) months from the date of its execution unless it shall have specified therein its duration. Every proxy shall be revocable at the discretion of the person executing it or of his personal representatives or assigns. Section 6. Voting of Shares by certain Holders. Shares standing in the name of another corporation may be voted by such officer, agent or proxy as the by-laws of such corporation may prescribe, or, in the absence of such provision, as the Board of Directors of such corporation may determine. Shares held by an administrator, executor, guardian or conservator may be noted by him either in person or by proxy without a transfer of such shares into his name. Shares standing in the name of a trustee may be voted by him either in person or by proxy, but no trustee shall be entitled to vote shares held by him without a transfer of such shares into his name. Shares standing in the name of a receiver may be voted by such receiver, and shares held by or under the control of a receiver may be voted by such receiver without the transfer thereof into his name if authority so to do be contained in an appropriate Order of the Court by which such receiver was appointed. E-12 A stockholder whose shares are pledged shall be entitled to vote such shares until the shares have been transferred into the name of the pledge, and thereafter the pledgee shall be entitled to vote the shares so transferred. Shares of its own stock belonging to the Corporation or held by it in a fiduciary capacity shall not be voted, directly or indirectly, at any meeting, and shall not be counted in determining the total number of outstanding shares at any given time. Section 7. Election of Directors. At each election for Directors every stockholder entitled to vote at such election shall have the right to vote, in person or by proxy, the number of shares owned by him for as many persons as there are Directors to be elected and for whose election he has a right to vote. There shall be no cumulative voting. Section 8. Quorum. A majority of the outstanding shares of the Corporation entitled to vote, represented in person or by proxy, shall constitute a quorum at a meeting of the stockholders. If a quorum shall not be present or represented, the stockholders entitled to vote thereat, present in person or by proxy, shall have the power to adjourn the meeting, from time to time, until a quorum shall be present or represented. At such rescheduled meeting at which a quorum shall be present or represented any business or any specified item of business may be transacted which might have been transacted at the meeting as originally notified. The number of votes or consents of the holders of stock having voting power which shall be necessary for the transaction of any business or any specified item of business at any meeting of stockholders, or the giving of any consent, shall be a majority of the outstanding shares of the Corporation entitled to vote. Section 9. Informal Action by Stockholders. Any action required or permitted to be taken by the stockholders of the Corporation may be effected by any consent in writing by such holders, signed by holders of not less than that number of shares of Common Stock required to approve such action. ARTICLE III DIRECTORS Section 1. Number. The affairs and business of this Corporation shall be managed by a Board of Directors. The present Board of Directors shall consist of one (1) member. Thereafter the number of Directors may be increased to not more than nine (9) by resolution of the Board of Directors. Directors need not be residents of the State of Nevada and need not be stockholders of the Corporation. Section 2. Election . The Directors shall be elected at each annual meeting of the stockholders, but if any such annual meeting is not held, or the Directors are not elected thereat, the Directors may be elected at any special meeting of the stockholders held for that purpose. E-13 Section 3. Term of Office. The term of office of each of the Directors shall be one (1) year, which shall continue until his successor has been elected and qualified. Section 4. Duties. The Board of Directors shall have the control and general management of the affairs and business of the Corporation. Such Directors shall in all cases act as a Board, regularly convened, and may adopt such rules and regulations for the conduct of meetings and the management of the Corporation, as may be deemed proper, so long as it is not inconsistent with these By-Laws and the laws of the State of Nevada. Section 5. Directors' Meetings.. Regular meetings of the Board of Directors shall be held immediately following the annual meeting of the stockholders, and at such other time and places as the Board of Directors may determine. Special meetings of the Board of Directors may be called by the President or the Secretary upon the written request of one (1) Director. Section 6. Notice of Meetings. Notice of meetings other than the regular annual meeting shall be given by service upon each Director in person, or by mailing to him at his last known address, at least three (3) days before the date therein designated for such meeting, of a written notice thereof specifying the time and place of such meeting, and the business to be brought before the meeting, and no business other than that specified in such notice shall be transacted at any special meeting. At any Directors' meeting at which a quorum of the Board of Directors shall be present (although held without notice), any and all business may be transacted which might have been transacted if the meeting had been duly called if a quorum of the Directors waive or are willing to waive the notice requirements of such meeting. Any Directors may waive notice of any meeting under the provisions of Article XII. The attendance of a Director at a meeting shall constitute a waiver of notice of such meeting except where a Director attends a meeting for the express purpose of objecting to the transaction of any business because the meeting is not lawfully convened or called. Section 7. Voting. At all meetings of the Board of Directors, each Director is to have one (1) vote. The act of a majority of the Directors present at a meeting at which a quorum is present shall be the act of the Board of Directors. Section 8. Newly Created Directorships and Vacancies. Newly created directorships resulting from any increase in the number of Directors and any vacancies on the Board of Directors resulting from death, resignation, disqualification, removal or other cause shall be filled only by the affirmative vote of a majority of the remaining Directors then in office, even though less than a quorum of the Board of Directors. No decrease in the number of Directors constituting the Board of Directors shall shorten the term of any incumbent Director. Section 9. Removal of Directors. Any Director may be removed from office, with or without cause, only by the affirmative vote of the holders of 51 % of the voting power of all shares of the Corporation entitled to vote generally in the election of Directors, voting together as a single class. E-14 Section 10. Quorum. The number of Directors who shall be present at any meeting of the Board of Directors in order to constitute a quorum for the transaction of any business or any specified item of business shall be a majority. The number of votes of Directors that shall be necessary for the transaction of any business of any specified item of business at any meeting of the Board of Directors shall be a majority. If a quorum shall not be present at any meeting of the Board of Directors, those present may adjourn the meeting, from time to time, until a quorum shall be present. Section 11. Compensation. By resolution of the Board of Directors, the Directors may be paid their expenses, if any, of attendance at each meeting of the Board of Directors or each may be paid a stated salary as Director. No such payment shall preclude any Director from serving the Corporation in any other capacity and receiving compensation therefore. Section 12. Presumption of Assent. A Director of the Corporation who is present at a meeting of the Board of Directors at which action on any corporate matter is taken shall be presumed to have assented to the action taken unless his dissent is entered in the minutes of the meeting or unless he shall file his written dissent to such action with the person acting as the Secretary of the meeting before the adjournment thereof or shall forward such dissent by registered or certified mail to the Secretary of the Corporation immediately after the adjournment of the meeting. Such right to dissent shall not apply to a Director who voted in favor of such action. ARTICLE IV OFFICERS Section 1. Number. The officers of the Corporation shall be: President, Vice-President, Secretary, and Treasurer, and such assistant Secretaries as the President shall determine. Any officer may hold more than one (1) office. Section 2. Election. All officers of the Corporation shall be elected annually by the Board of Directors at its meeting held immediately following the meeting of stockholders, and shall hold office for the term of one (1) year or until their successors are duly elected. Officers need not be members of the Board of Directors. The Board may appoint such other officers, agents and employees as it shall deem necessary who shall have such authority and shall perform such duties as, from time to time, shall be prescribed by the Board. Section 3. Duties of Officers . The duties and powers of the officers of the Corporation shall be as follows: PRESIDENT The President shall preside at all meetings of the stockholders. He shall present at each annual meeting of the stockholders and Directors a report of the condition of the business of the E-15 Corporation. He shall cause to be called regular and special meetings of these stockholders and Directors in accordance with these By-Laws. He shall appoint and remove, employ and discharge, and fix the compensation of all agents, employees, and clerks of the Corporation other than the duly appointed officers, subject to the approval of the Board of Directors. He shall sign and make all contracts and agreements in the name of the Corporation, subject to the approval of the Board of Directors. He shall see that the books, reports, statements and certificates required by the statutes are properly kept, made and filed according to law. He shall sign all certificates of stock, notes, drafts, or bills of exchange, warrants or other orders for the payment of money duly drawn by the Treasurer; and he shall enforce these By-Laws and perform all the duties incident to the position and office, and which are required by law. VICE-PRESIDENT During the absence or inability of the President to render and perform his duties or exercise his powers, as set forth in these By-Laws or in the statutes under which the Corporation is organized, the same shall be performed and exercised by the Vice- President; and when so acting, he shall have all the powers and be subject to all the responsibilities hereby given to or imposed upon such President. SECRETARY The Secretary shall keep the minutes of the meetings of the Board of Directors and of the stockholders in appropriate books. He shall give and serve all notices of the Corporation. He shall be custodian of the records and of the corporate seal and affix the latter when required. He shall keep the stock and transfer books in the manner prescribed by law, so as to show at all times the amount of capital stock issued and outstanding; the manner and the time compensation for the same was paid; the names of the owners thereof, alphabetically arranged; the number of shares owned by each; the time at which each person became such owner; and the amount paid thereon; and keep such stock and transfer books open daily during the business hours of the office of the Corporation, subject to the inspection of any stockholder of the Corporation, and permit such stockholder to make extracts from said books to the extent prescribed by law. He shall sign all certificates of stock. He shall present to the Board of Directors at their meetings all communications addressed to him officially by the President or any officer or stockholder of the Corporation; and he shall attend to all correspondence and perform all the duties incident to the office of Secretary. TREASURER The Treasurer shall have the care and custody of and be responsible for all the funds and securities of the Corporation, and deposit all such funds in the name of the Corporation in such bank or banks, trust company or trust companies or safe deposit vaults as the Board of Directors may designate. He shall exhibit at all reasonable times his books and accounts to any Director or stockholder of the Corporation upon application at the office of the Corporation during business hours. He shall render a statement of the conditions of the finances of the Corporation at each regular meeting of the Board of Directors, and at such other times as shall be required of him, and a full financial report at the annual meeting of the stockholders. He shall keep, at the office of the E-16 Corporation, correct books of account of all its business and transactions and such other books of account as the Board of Directors may require. He shall do and perform all duties appertaining to the office of Treasurer. The Treasurer shall, if required by the Board of Directors, give to the Corporation such security for the faithful discharge of his duties as the Board may direct. Section 4. Bond. The Treasurer shall, if required by the Board of Directors, give to the Corporation such security for the faithful discharge of his duties as the Board may direct. Section 5. Vacancies. How Filled. All vacancies in any office shall be filled by the Board of Directors without undue delay, either at its regular meeting or at a meeting specifically called for that purpose. In the case of the absence of any officer of the Corporation or for any reason that the Board of Directors may deem sufficient, the Board may, except as specifically otherwise provided in these By-Laws, delegate the power or duties of such officers to any other officer or Director for the time being; provided, a majority of the entire Board concur therein. Section 6. Compensation of Officers. The officers shall receive such salary or compensation as may be determined by the Board of Directors. Section 7. Removal of Officers. The Board of Directors may remove any officer, by a majority vote, at any time with or without cause. ARTICLE V CERTIFICATES OF STOCK Section 1. Description of Stock Certificates. The certificates of stock shall be numbered and registered in the order in which they are issued. They shall be bound in a book and shall be issued in consecutive order therefrom, and in the margin thereof shall be entered the name of the person owning the shares therein represented, with the number of shares and the date thereof. Such certificates shall exhibit the holder's name and number of shares. They shall be signed by the President or Vice President, and countersigned by the Secretary or Treasurer and sealed with the Seal of the Corporation. Section 2. Transfer of Stock. The stock of the Corporation shall be assignable and transferable on the books of the Corporation only by the person in whose name it appears on said books, his legal representatives or by his duly authorized agent. In case of transfer by attorney, the power of attorney, duly executed and acknowledged, shall be deposited with the Secretary. In all cases of transfer the former certificate must be surrendered up and canceled before a new certificate may be issued. No transfer shall be made upon the books of the Corporation within ten (10) days next preceding the annual meeting of the stockholders. Section 3. Lost Certificates. If a stockholder shall claim to have lost or destroyed a certificate or certificates of stock issued by the Corporation, the Board of Directors may, at its discretion, direct a new certificate or certificates to be issued, upon the making of an affidavit of that fact by the person claiming the certificate of stock to be lost or destroyed, and upon the deposit of a bond or other indemnity in such form and with such sureties if any that the Board may require. E-17 ARTICLE VI SEAL Section 1, Seal. The seal of the Corporation shall be as follows: NO SEAL IN USE AT THIS TIME ARTICLE VII DIVIDENDS Section 1. When Declared. The Board of Directors shall by vote declare dividends from the surplus profits of the Corporation whenever, in their opinion, the condition of the Corporation's affairs will render it expedient for such dividends to be declared. Section 2. Reserve. The Board of Directors may set aside, out of the net profits of the Corporation available for dividends, such sum or sums (before payment of any dividends) as the Board, in their absolute discretion, think proper as a reserve fund, to meet contingencies, or for equalizing dividends, or for repairing or maintaining any property of the Corporation, or for such other purpose as the Directors shall think conducive to the interest of the Corporation, and they may abolish or modify any such reserve in the manner in which it was created. ARTICLE VIII INDEMNIFICATION Section 1. Any person made a party to or involved in any civil, criminal or administrative action, suit or proceeding by reason of the fact that he or his testator or intestate is or was a Director, officer, or employee of the Corporation, or of any corporation which he, the testator, or intestate served as such at the request of the Corporation, shall be indemnified by the Corporation against expenses reasonably incurred by him or imposed on him in connection with or resulting from the defense of such action, suit, or proceeding and in connection with or resulting from any appeal thereon, except with respect to matters as to which it is adjudged in such action, suit or proceeding that such officer, Director, or employee was liable to the Corporation, or to such other corporation, for negligence or misconduct in the performance of his duty. As used herein the term "expense" shall include all obligations incurred by such person for the payment of money, including without limitation attorney's fees, judgments, awards, fines, penalties, and amounts paid in satisfaction of judgment or in settlement of any such action, suit, or proceedings, except amounts paid to the Corporation or such other corporation by him. A judgment of conviction whether based on plea of guilty or nolo contendere or its equivalent, or after trial, shall not of itself be deemed an adjudication that such Director, officer or employee is liable to the Corporation, or such other corporation, for negligence or misconduct in the performance of his duties. Determination of the rights of such indemnification and the amount thereof may be made at the option of the person to be indemnified pursuant to procedure set forth, from time to time, in the By- Laws, or by any of the following procedures: (a) order of the Court or administrative body or agency having jurisdiction of the action, suit, or proceeding; (b) resolution adopted by a majority of the quorum of the Board of Directors of the Corporation without counting in such majority any E-18 Directors who have incurred expenses in connection with such action, suit or proceeding; (c) if there is no quorum of Directors who have not incurred expense in connection with such action, suit, or proceeding, then by resolution adopted by a majority of the committee of stockholders and Directors who have not incurred such expenses appointed by the Board of Directors; (d) resolution adopted by a majority of the quorum of the Directors entitled to vote at any meeting; or (e) Order of any Court having jurisdiction over the Corporation. Any such determination that a payment by way of indemnity should be made will be binding upon the Corporation. Such right of indemnification shall not be exclusive of any other right which such Directors, officers, and employees of the Corporation and the other persons above mentioned may have or hereafter acquire, and without limiting the generality of such statement, they shall be entitled to their respective rights of indemnification under any By-Law, Agreement, vote of stockholders, provision of law, or otherwise in addition to their rights under this Article. The provision of this Article shall apply to any member of any committee appointed by the Board of Directors as fully as though each person and been a Director, officer or employee of the Corporation. ARTICLE IX AMENDMENTS Section 1. How Amended. These By-Laws may be altered, amended, repealed or added to by the vote of the Board of Directors of the Corporation at any regular meeting of said Board, or at a special meeting of Directors called for that purpose provided a quorum of the Directors as provided by law and by the Articles of Incorporation, are present at such regular meeting or special meeting. These By-Laws and any amendments thereto and new By-Laws added by the Directors may be amended, altered or replaced by the stockholders at any annual or special meeting of the stockholders. ARTICLE X FISCAL YEAR Section 1. Fiscal Year The fiscal year shall end on the 3 1st day of DECEMBER. ARTICLE XI WAIVER OF NOTICE Section 1. Whenever any notice is required to be given to any shareholders or directors of the Corporation under the provisions of these By-Laws, under the Articles of Incorporation or under the provisions of the Nevada Business Corporation Act, a waiver thereof in writing, signed by the person or persons entitled to such notice, whether before or after the time stated therein, shall be deemed equivalent to the giving of such notice. ADOPTED this 13th day of May, 1998. LLEBPMAC, INC.. A Nevada Corporation, /s/ Cornelius A. Hofman Cornelius A. Hofman, President E-19 CERTIFICATE OF SECRETARY 1, the undersigned, do hereby certify: 1. That I am the duly elected and acting Secretary\Treasurer of LLEBPMAC, INC., A Nevada Corporation: and 2. That the foregoing By-Laws, comprising Nine (9) pages, constitute the By-Laws of said Corporation as duly adopted at a meeting of the Board of Directors thereof duly held on the 13th day of May, 1998. /s/ Cornelius A. Hofman Cornelius A. Hofman, Secretary\Treasurer (SEAL) E-20 EX-10 6 ex101.txt Exhibit 10.1 Form SB-2 Cach Foods, Inc. CACH FOODS, INC. 2001 LONG-TERM STOCK INCENTIVE PLAN SECTION 1 GENERAL 1.1. Purpose. The Cach Foods, Inc., Long-Term Stock Incentive Plan (the "Plan") has been established by Cach Foods, Inc. (the "Company") to (i) attract and retain persons eligible to participate in the Plan; (ii) motivate Participants, by means of appropriate incentives, to achieve long-range goals; (iii) provide incentive compensation opportunities that are competitive with those of other similar companies; and (iv) further identify Participants' interests with those of the Company's other shareholders through compensation that is based on the Company's common stock; and thereby promote the long-term financial interest of the Company and the Subsidiaries, including the growth in value of the Company's equity and enhancement of long- term shareholder return. 1.2. Participation. Subject to the terms and conditions of the Plan, the Committee shall determine and designate, from time to time, from among the Eligible Persons (including transferees of Eligible Persons to the extent the transfer is permitted by the Plan and the applicable Award Agreement), those persons who will be granted one or more Awards under the Plan, and thereby become "Participants" in the Plan. In the discretion of the Committee, a Participant may be granted any Award permitted under the provisions of the Plan, and more than one Award may be granted to a Participant. Awards may be granted as alternatives to or replacement of awards outstanding under the Plan, or any other plan or arrangement of the Company or a Subsidiary (including a plan or arrangement of a business or entity, all or a portion of which is acquired by the Company or a Subsidiary). 1.3. Operation, Administration, and Definitions. The operation and administration of the Plan, including the Awards made under the Plan, shall be subject to the provisions of Section 4 (relating to operation and administration). Capitalized terms in the Plan shall be defined as set forth in the Plan (including the definition provisions of Section 6 of the Plan). E-21 SECTION 2 OPTIONS AND SARS 2. 1. Definitions. (a) The grant of an "Option" entitles the Participant to purchase shares of Stock at an Exercise Price established by the Committee. Options granted under this Section 2 may be either Incentive Stock Options ("ISOs") or Non-Qualified Options ("NQOs"), as determined in the discretion of the Committee. An "ISO" is an Option that is intended to satisfy the requirements applicable to an "incentive stock option" described in section 422(b) of the Code. An "NQO" is an Option that is not intended to be an "incentive stock option" as that term is described in section 422(b) of the Code. (b) A stock appreciation right (an "SAR") entitles the Participant to receive, in cash or Stock (as determined in accordance with subsection 2.5), value equal to (or otherwise based on) the excess of: (a) the Fair Market Value of a specified number of shares of Stock at the time of exercise; over (b) an Exercise Price established by the Committee. 2.2. Exercise Price. The "Exercise Price" of each Option and SAR granted under this Section 2 shall be established by the Committee or shall be determined by a method established by the Committee at the time the Option or SAR is granted; except that the Exercise Price shall not be less than 100% of the Fair Market Value of a share of Stock on the date of grant. 2.3. Exercise. An Option and an SAR shall be exercisable in accordance with such terms and conditions and during such periods as may be established by the Committee. 2.4. Payment of Option Exercise Price. The payment of the Exercise Price of an Option granted under this Section 2 shall be subject to the following: (a) Subject to the following provisions of this subsection 2.4, the full Exercise Price for shares of Stock purchased upon the exercise of any Option shall be paid at the time of such exercise (except that, in the case of an exercise arrangement approved by the Committee and described in paragraph 2.4(c), payment may be made as soon as practicable after the exercise). (b) The Exercise Price shall be payable in cash or by tendering, by either actual delivery of shares or by attestation, shares of Stock acceptable to the Committee (including Shares deemed issued for purposes of exercising a conversion right under an Award), and valued at Fair Market Value as of the day of exercise, or in any combination thereof, as determined by the Committee. (c) The Committee may permit a Participant to elect to pay the Exercise Price upon the exercise of an Option by irrevocably authorizing a third party to sell shares of Stock (or a sufficient portion of the shares) acquired upon exercise of the Option and remit to the E-22 Company a sufficient portion of the sale proceeds to pay the entire Exercise Price and any tax withholding resulting from such exercise. 2.5. Settlement of Award. Shares of Stock delivered pursuant to the exercise of an option or SAR shall be subject to such conditions, restrictions and contingencies as the Committee may establish in the applicable Award Agreement. Settlement of SARs may be made in shares of Stock (valued at their Fair Market Value at the time of exercise), in cash, or in a combination thereof, as determined in the discretion of the Committee. The Committee, in its discretion, may impose such conditions, restrictions and contingencies with respect to shares of Stock acquired pursuant to the exercise of an Option or an SAR as the Committee determines to be desirable. SECTION 3 OTHER STOCK AWARDS 3.1. Definitions. (a) A "Stock Unit" Award is the grant of a right to receive shares of Stock in the future. (b) A "Performance Share" Award is a grant of a right to receive shares of Stock or Stock Units which is contingent on the achievement of performance or other objectives during a specified period. (c) A "Restricted Stock" Award is a grant of shares of Stock, and a "Restricted Stock Unit" Award is the grant of a right to receive shares of Stock in the future, with such shares of Stock or right to future delivery of such shares of Stock subject to a risk of forfeiture or other restrictions that will lapse upon the achievement of one or more goals relating to completion of service by the Participant, or achievement of performance or other objectives, as determined by the Committee. 3.2. Restrictions on Stock Awards. Each Stock Unit Award, Restricted Stock Award, Restricted Stock Unit Award and Performance Share Award shall be subject to the following: (a) Any such Award shall be subject to such conditions, restrictions and contingencies as the Committee shall determine. The Committee may designate whether any such Award being granted to any Participant are intended to be " performance-based compensation" as that term is used in section 162(m) of the Code. Any such Awards designated as intended to be "performance-based compensation" shall be conditioned on the achievement of one or more Performance Measures. For Awards intended to be "performance-based compensation," the grant of the Awards and the establishment of the Performance Measures shall be made during the period required under Code section 162(m). The "performance measures" that may be used by the Committee for such Awards shall be based on one or more of the following, as selected by the Committee: E-23 (i) operating profits (including EBITDA), net profits, earnings per share, profit returns and margins, revenues, shareholder return and/or value, stock price, or working capital, which may be measured on a Company, Subsidiary, or business unit basis; or (ii) any one or more of the performance criteria set forth in the next preceding paragraph (i) measured on the basis of a relative comparison of entity performance to the performance of a peer group of entities or other external measure of the selected performance criteria; provided, that profit, earnings, and revenues used for any performance measure shall exclude: gains or losses on operating asset sales or dispositions; litigation or claim judgments or settlements; accruals for historic environmental obligations; effect of changes in tax law or rate on deferred tax liabilities; accruals for reorganization and restructuring programs; uninsured catastrophic property losses; the cumulative effect of changes in accounting principles; and any extraordinary non- recurring items as described in Accounting Principles Board Opinion No. 30. SECTION 4 OPERATION AND ADMINISTRATION 4.1. Effective Date. Subject to the approval of the shareholders of the Company in the manner required by the laws of the state of Nevada, the Plan shall be effective as of April 15, 2001 (the "Effective Date"); provided, however, that to the extent that Awards are granted under the Plan prior to its approval by shareholders, the Awards shall be contingent on approval of the Plan by the shareholders of the Company. The Plan shall be unlimited in duration and, in the event of Plan termination, shall remain in effect as long as any Awards under it are outstanding; provided, however, that, to the extent required by the Code, no ISO may be granted under the Plan on a date that is more than ten years from the date the Plan is adopted or, if earlier, the date the Plan is approved by shareholders. 4.2. Shares Subject to Plan. The shares of Stock for which Awards may be granted under the Plan shall be subject to the following: (a) Subject to the following provisions of this subsection 4.2, the maximum number of shares of Stock that may be delivered to Participants and their beneficiaries under the Plan shall be 2,000,000. (b) To the extent that any shares of Stock covered by an Award are not delivered to a Participant or beneficiary because the Award is forfeited or canceled, or the shares of Stock are not delivered because the Award is settled in cash or used to satisfy the applicable tax withholding obligation, such shares shall not be deemed to have been delivered for purposes of determining the maximum number of shares of Stock available for delivery under the Plan. E-24 (c) If the exercise price of any stock option granted under the Plan or any Prior Plan is satisfied by tendering shares of Stock to the Company (by either actual delivery or by attestation), only the number of shares of Stock issued net of the shares of Stock tendered shall be deemed delivered for purposes of determining the maximum number of shares of Stock available for delivery under the Plan. (d) Subject to paragraph 4.2(e), the following additional maximums are imposed under the Plan. (i) The maximum number of shares of stock that may be issued by Options intended to be ISOs shall be 2,000,000 shares. (ii) The maximum number of shares of Stock that may be issued in conjunction with Awards granted pursuant to Section 3 (relating to Stock Awards) shall be 500,000 shares. (iii) The maximum number of shares that may be covered by Awards granted to any one individual pursuant to Section 2 (relating to Options and SARs) shall be 500,000 shares during any one-calendar year period. (iv) No more than 500,000 shares of Stock may be subject to Stock Unit awards, Restricted Stock Awards, Restricted Stock Unit Awards and Performance Share Awards that are intended to be "performance-based compensation" (as that term is used for purposes of Code section 162(m)) granted to any one individual during any one-calendar-year period (regardless of when such shares are deliverable). (e) In the event of a corporate transaction involving the Company (including, without limitation, any stock dividend, stock split, extraordinary cash dividend, recapitalization, reorganization, merger, consolidation, split-up, spin-off, combination or exchange of shares), the Committee may adjust Awards to preserve the benefits or potential benefits of the Awards. Action by the Committee may include: (i) adjustment of the number and kind of shares which may be delivered under the Plan; (ii) adjustment of the number and kind of shares subject to outstanding Awards; (iii) adjustment of the Exercise Price of outstanding Options and SARs; and (iv) any other adjustments that the Committee determines to be equitable. 4.3. General Restrictions. Delivery of shares of Stock or other amounts under the Plan shall be subject to the following: (a) Notwithstanding any other provision of the Plan, the Company shall have no liability to deliver any shares of Stock under the Plan or make any other distribution of benefits under the Plan unless such delivery or distribution would comply with all applicable laws (including, without limitation, the requirements of the Securities Act of 1933), and the applicable requirements of any securities exchange or similar entity. E-25 (b) To the extent that the Plan provides for issuance of stock certificates to reflect the issuance of shares of Stock, the issuance may be effected on a non-certificated basis, to the extent not prohibited by applicable law or the applicable rules of any stock exchange. 4.4. Tax Withholding. All distributions under the Plan are subject to withholding of all applicable taxes, and the Committee may condition the delivery of any shares or other benefits under the Plan on satisfaction of the applicable withholding obligations. The Committee, in its discretion, and subject to such requirements as the Committee may impose prior to the occurrence of such withholding, may permit such withholding obligations to be satisfied through cash payment by the Participant, through the surrender of shares of Stock which the Participant already owns, or through the surrender of shares of Stock to which the Participant is otherwise entitled under the Plan. 4.5. Use of Shares. Subject to the overall limitation on the number of shares of Stock that may be delivered under the Plan, the Committee may use available shares of Stock as the form of payment for compensation, grants or rights earned or due under any other compensation plans or arrangements of the Company or a Subsidiary, including the plans and arrangements of the Company or a Subsidiary assumed in business combinations. 4.6. Dividends and Dividend Equivalents. An Award (including without limitation an Option or SAR Award) may provide the Participant with the right to receive dividend payments or dividend equivalent payments with respect to Stock subject to the Award (both before and after the Stock subject to the Award is earned, vested, or acquired), which payments may be either made currently or credited to an account for the Participant, and may be settled in cash or Stock as determined by the Committee. Any such settlements, and any such crediting of dividends or dividend equivalents or reinvestment in shares of Stock, may be subject to such conditions, restrictions and contingencies as the Committee shall establish, including the reinvestment of such credited amounts in Stock equivalents. 4.7. Payments. Awards may be settled through cash payments, the delivery of shares of Stock, the granting of replacement Awards or combination thereof as the Committee shall determine. Any Award settlement, including payment deferrals, may be subject to such conditions, restrictions and contingencies, as the Committee shall determine. The Committee may permit or require the deferral of any Award payment, subject to such rules and procedures as it may establish, which may include provisions for the payment or crediting of interest, or dividend equivalents, including converting such credits into deferred Stock equivalents. Each Subsidiary shall be liable for payment of cash due under the Plan with respect to any Participant to the extent that such benefits are attributable to the services rendered for that Subsidiary by the Participant. Any disputes relating to liability of a Subsidiary for cash payments shall be resolved by the Committee. 4.8 Transferability. Except as otherwise provided by the Committee, Awards under the Plan are not transferable except as designated by the Participant by will or by the laws of descent and distribution. E-26 4.9 Form and Time of Elections. Unless otherwise specified herein, each election required or permitted to be made by any Participant or other person entitled to benefits under the Plan, and any permitted modification, or revocation thereof, shall be in writing filed with the Committee at such times, in such form, and subject to such restrictions and limitations, not inconsistent with the terms of the Plan, as the Committee shall require. 4.10 Agreement With Company. An Award under the Plan shall be subject to such terms and conditions, not inconsistent with the Plan, as the Committee shall, in its sole discretion, prescribe. The terms and conditions of any Award to any Participant shall be reflected in such form of written document as is determined by the Committee. A copy of such document shall be provided to the Participant, and the Committee may, but need not require that the Participant shall sign a copy of such document. Such document is referred to in the Plan as an "Award Agreement" regardless of whether any Participant signature is required. 4.11 Action by Company or Subsidiary. Any action required or permitted to be taken by the Company or any Subsidiary shall be by resolution of its board of directors, or by action of one or more members of the board (including a committee of the board) who are duly authorized to act for the board, or (except to the extent prohibited by applicable law or applicable rules of any stock exchange) by a duly authorized officer of such company. 4.12. Gender and Number. Where the context admits, words in any gender shall include any other gender, words in the singular shall include the plural and the plural shall include the singular. 4.13. Limitation of Implied Rights. (a) Neither a Participant nor any other person shall, by reason of participation in the Plan, acquire any right in or title to any assets, funds or property of the Company or any Subsidiary whatsoever, including, without limitation, any specific funds, assets, or other property which the Company or any Subsidiary, in their sole discretion, may set aside in anticipation of a liability under the Plan. A Participant shall have only a contractual right to the Stock or amounts, if any, payable under the Plan, unsecured by any assets of the Company or any Subsidiary, and nothing contained in the Plan shall constitute a guarantee that the assets of the Company or any Subsidiary shall be sufficient to pay any benefits to any person. (b) The Plan does not constitute a contract of employment, and selection as a Participant will not give any participating person the right to be retained in the employ of the Company or any Subsidiary, nor any right or claim to any benefit under the Plan, unless such right or claim has specifically accrued under the terms of the Plan. Except as otherwise provided in the Plan, no Award under the Plan shall confer upon the holder thereof any rights as a shareholder of the Company prior to the date on which the individual fulfills all conditions for receipt of such rights. E-27 4.14. Evidence. Evidence required of anyone under the Plan may be by certificate, affidavit, document or other information, which the person acting on it considers pertinent and reliable, and signed, made or presented by the proper party or parties. SECTION 5 COMMITTEE 5.1. Administration. The authority to control and manage the operation and administration of the Plan shall be vested in a committee (the "Committee") in accordance with this Section 5. The Committee shall be selected by the Board, and shall consist solely of one or more members of the Board who are not employees. If the Committee does not exist, or for any other reason determined by the Board, the Board may take any action under the Plan that would otherwise be the responsibility of the Committee. 5.2. Powers of Committee. The Committee's administration of the Plan shall be subject to the following: (a) Subject to the provisions of the Plan, the Committee will have the authority and discretion to select from among the Eligible Persons those persons who shall receive Awards, to determine the time or times of receipt, to determine the types of Awards and the number of shares covered by the Awards, to establish the terms, conditions, performance criteria, restrictions, and other provisions of such Awards, and (subject to the restrictions imposed by Section 6) to cancel or suspend Awards. (b) To the extent that the Committee determines that the restrictions imposed by the Plan preclude the achievement of the material purposes of the Awards in jurisdictions outside the United States, the Committee will have the authority and discretion to modify those restrictions as the Committee determines to be necessary or appropriate to conform to applicable requirements or practices of jurisdictions outside of the United States. (c) The Committee will have the authority and discretion to interpret the Plan, to establish, amend, and rescind any rules and regulations relating to the Plan, to determine the terms and provisions of any Award Agreement made pursuant to the Plan, and to make all other determinations that may be necessary or advisable for the administration of the Plan. (d) Any interpretation of the Plan by the Committee and any decision made by it under the Plan is final and binding on all persons. (e) In controlling and managing the operation and administration of the Plan, the Committee shall take action in a manner that conforms to the articles and by-laws of the Company, and applicable state corporate law. 5.3. Delegation by Committee. Except to the extent prohibited by applicable law or the applicable rules of a stock exchange, the Committee may allocate all or any portion of its E-28 responsibilities and powers to any one or more of its members and may delegate all or any part of its responsibilities and powers to any person or persons selected by it. Any such allocation or delegation may be revoked by the Committee at any time. 5.4. Information to be Furnished to Committee. The Company and Subsidiaries shall furnish the Committee with such data and information as it determines may be required for it to discharge its duties. The records of the Company and Subsidiaries as to a Participant's employment, termination of employment, leave of absence, reemployment and compensation shall be conclusive on all persons unless determined to be incorrect. Participants and other persons entitled to benefits under the Plan must furnish the Committee such evidence, data or information as the Committee considers desirable to carry out the terms of the Plan. SECTION 6 AMENDMENT AND TERMINATION The Board may, at any time, amend or terminate the Plan, provided that no amendment or termination may, in the absence of written consent to the change by the affected Participant (or, if the Participant is not then living, the affected beneficiary), adversely affect the rights of any Participant or beneficiary under any Award granted under the Plan prior to the date such amendment is adopted by the Board; provided that adjustments pursuant to subject to subsection 4.2(e) shall not be subject to the foregoing limitations of this Section 6. SECTION 7 DEFINED TERMS In addition to the other definitions contained herein, the following definitions shall apply: (a) Award. The term "Award" shall mean any award or benefit granted under the Plan, including, without limitation, the grant of Options, SARs, Stock Unit Awards, Restricted Stock Awards, Restricted Stock Unit Awards and Performance Share Awards. (b) Board. The term "Board" shall mean the Board of Directors of the Company. (c) Code. The term "Code" means the Internal Revenue Code of 1986, as amended. A reference to any provision of the Code shall include reference to any successor provision of the Code. (d) Eligible Person. The term "Eligible Person" shall mean any director, officer, employee or consultant of the Company or a Subsidiary. An Award may be granted to a person in connection with hiring, retention or otherwise prior to the date the person first performs services for the Company or the Subsidiaries, provided that such Award shall not become vested prior to the date the person first performs such services. E-29 (e) Fair Market Value. For purposes of determining the "Fair Market Value" of a share of Stock as of any date, the following rules shall apply: (i) If the principal market for the Stock is a national securities exchange or the Nasdaq stock market, then the "Fair Market Value" as of that date shall be the mean between the lowest and highest reported sale prices of the Stock on that date on the principal exchange which the Stock is then listed or admitted to trading. (ii) If sale prices are not available or if the principal market for the Stock is not a national securities exchange and the Stock is not quoted on the Nasdaq stock market, the average between the highest bid and lowest asked prices for the Stock on such day as reported on the NASDAQ OTC Bulletin Board Service or by the National Quotation Bureau, Incorporated or a comparable service. (iii) If the day is not a business day, and as a result, paragraphs (i) and (ii) next above are inapplicable, the Fair Market Value of the Stock shall be determined as of the last preceding business day. If paragraphs (i) and (ii) next above are otherwise inapplicable, then the Fair Market Value of the Stock shall be determined in good faith by the Committee. (f) Subsidiaries. The term "Subsidiary" means any company during any period in which it is a "subsidiary corporation" (as that term is defined in Code section 424(f)) with respect to the Company. (g) Stock. The term "Stock" shall mean shares of common stock of the Company. E-30 EX-10 7 ex102.txt Exhibit 10.2 Cach Foods, Inc. Form SB-2 LICENSE AGREEMENT This License Agreement ("Agreement") is made and entered into this 10th day of October, 2000 (the "Effective Date"), by and between Cornelius A. Hofman, an individual residing in Idaho ("Licensor") and Cach Foods, Inc., a Nevada corporation, with its principal place of business at 216 South Sixteenth Avenue, Pocatello, ID 83201, ("Licensee"). WHEREAS, the Licensor has expended time, effort and money to develop "Idaho ChipsTM", a brand name for potato chips that is recognized as being a valuable sales tool; and WHEREAS, the Licensee desires to distribute potato chips with the brand name "Idaho ChipsTM." NOW, THEREFORE, the parties hereto agree as follows: 1. Grant of Rights. The License granted by this Agreement is exclusive and world-wide to Licensee and authorizes Licensee to utilize the brand name "Idaho ChipsTM". Licensor grants Licensee the exclusive right to utilize the brand name "Idaho ChipsTM" for 30 months from the Effective Date. Thereafter, Licensee will have the exclusive right to utilize the brand name "Idaho ChipsTM" only if the conditions under "License Fee" are met. 2. License Fee. Licensee will pay Licensor 5 percent of gross revenue earned by Licensee. If after 30 months, Licensee has not generated a minimum of $500,000 in gross revenue, the Licensee will lose its exclusive right to the brand name "Idaho ChipsTM." If Licensee has generated gross revenue of $500,000 or more during the initial 30 month period, this Agreement will be automatically renewed for an additional 12 month period. This Agreement shall be extended for each 12 month period thereafter so long as Licensee averages a monthly gross revenue of atleast $25,000 for the prior twelve month period. 3. Quality Control. Licensee agrees to implement a reasonable quality control program to ensure the quality and protect the integrity of any product bearing the brand "Idaho ChipsTM" and that any such program be first approved by Licensor. 4. Books and records. Licensor may examine at any time Licensee's books and records that reasonably relate to the bookkeeping and accounting information of gross revenues generated by Licensee. 5. Confidentiality. Licensor and Licensee agree that any information identified by either as confidential or proprietary information will be used solely for the purposes contemplated and will not be disclosed to any third party. 6. Indemnification. Licensee will indemnify, defend and hold harmless Licensor from any and all claims or liabilities arising from Licensee's use of the brand "Idaho ChipsTM." 7. Termination and Default. This Agreement may be terminated by either party on or after April 10, 2003 upon three months' prior written notice to the other party. This Agreement may also be terminated by the non-defaulting party if any of the following events of default occur: (1) If a party materially fails to perform or comply with the terms of this Agreement; (2) If a party fails to strictly E-31 comply with the provisions of 5 (Confidentiality) or makes an assignment in violation of 8 (non-assignability); (3) If a party becomes insolvent or admits in writing its inability to pay its debts as they mature, or makes an assignment for the benefit of creditors; (4) If a petition under any foreign state or United States Bankruptcy Act, Receiverships Statute, or the like, as they now exist or as they may be amended, is filed by a party; or (5) If such petition is filed by any third party or an application for a receiver is made by anyone and such petition or application is not resolved favorably within 90 days. 8. Non-assignability. This Agreement and the rights provided herein may not be assigned by Licensee without the prior written consent of Licensor. Any sale or transfer of more than fifty-percent of the outstanding stock of Cach Foods, Inc. will constitute an assignment of this Agreement. 9. Arbitration. Should any dispute arise regarding the terms and conditions of this Agreement, the parties agree to arbitrate that dispute before an arbitrator appointed by the American Arbitration Association, located in Salt Lake City, Utah. The arbitration will be performed pursuant to the rules of the American Arbitration Association and the decision rendered thereunder shall be final and conclusive upon the parties. The parties agree to share the expenses of arbitration, including travel and lodging expenses of Licensor reasonably incurred by participating in and attending the arbitration proceedings. The laws of the state of Utah will govern the arbitration proceedings. IN WITNESS WHEREOF, the parties have caused their duly- authorized representative to execute this Agreement as of the date set forth above. LICENSOR LICENSEE Cach Foods, Inc. /s/Cornelius A. Hofman /s/Cornelius A. Hofman Cornelius A. Hofman By: Cornelius A. Hofman President E-32 EX-10 8 ex103.txt Exhibit 10.3 Cach Foods, Inc. Form SB-2 Loan Agreement Between Cornelius A. Hofman and Cach Foods, Inc. March 5, 2001 On March 5, 2001, Cornelius Hofman loaned Cach Foods, Inc. (CFI) $2,000 (two thousand dollars). CFI will repay this loan in full (principal and interest) within one year (on or before March 5, 2002). The annual interest rate on this loan is 10 percent. /s/ Cornelius A. Hofman /s/ Cornelius A. Hofman Cornelius A. Hofman Cach Foods, Inc. Cornelius A. Hofman President E-33 EX-23 9 ex231.txt Exhibit 23.1 Cach Foods, Inc. Form SB-2 May 22, 2001 The Board of Directors Cach Foods, Inc. 216 South Sixteenth Avenue Pocatello, Idaho 83201 Gentlemen: We have been retained by Cach Foods, Inc. (the "Company"), in connection with the Registration Statement on Form SB-2 filed by the Company with the Securities and Exchange Commission (the "Registration Statement") relating to 250,000 shares of common stock, par value $0.001 per share. You have requested that we render an opinion as to whether the common stock as proposed to be issued on the terms set forth in the Registration Statement will be validly issued, fully paid and non- assessable. In connection with this engagement, we have examined the following: 1. the articles of incorporation of the Company, as amended; 2. the Registration Statement; 3. the bylaws of the Company; 4. unanimous consents of the board of directors; and 5. majority consents of the shareholders. We have examined such other corporate records and documents and have made such other examinations as we deemed relevant. Based upon the above examination, we are of the opinion that the shares of common stock proposed to be issued pursuant to the Registration Statement, are validly authorized and, when issued in accordance with the terms set forth in the Registration Statement, will be validly issued, fully paid, and nonassessable. We hereby consent to being named in the Prospectus included in the Registration Statement as having rendered the foregoing opinion and as having represented the Company in connection with the Registration Statement. Sincerely yours, /s/ Lehman Walstrand & Associates LEHMAN WALSTRAND & ASSOCIATES E-34 EX-23 10 ex232.txt Exhibit 23.2 Cach Foods, Inc. Form SB-2 CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS We hereby consent to the use in the Prospectus constituting part of this Registration Statement on Form SB-2 for Cach Foods, In., of our report dated March 14, 2001, relating to the December 31, 2000 financial statements of Cach Foods, Inc., which appears in such Prospectus. We also consent to the reference to us under the heading "Experts". /s/Pritchett, Siler & Hardy, P.C. PRITCHETT, SILER & HARDY, P.C. Salt Lake City, Utah May 15, 2001 E-35 EX-99 11 ex991.txt Exhibit 99.1 Cach Foods, Inc. Form SB-2 SUBSCRIPTION AGREEMENT Llebpmac, Inc. 227 South Ninth Avenue Pocatello, ID 83201 THIS SUBSCRIPTION AGREEMENT made this 1st day of September, 1998 by and between Llebpmac, Inc., a Nevada corporation (the "Company"), and Cornelius A. Hofman (the "Subscriber"), who, for and in consideration of the mutual promises and covenants set forth herein, do hereto agree as follows: 1. Subscription. The Subscriber hereby subscribes for $1,000,000 Shares (each Share comprising one share of $.001 pare value Common Stock of the Company), and herewith tenders a subscription to the Company in the amount of One Thousand Dollars ($1,000) which the Subscriber has tendered herewith as payment for the Shares. This Subscription Agreement ("Subscription") is an irrevocable offer by the Subscriber to subscribe for the securities offered by the Company, and, subject to the terms hereof, shall become a contract for the sale of said securities upon acceptance thereof by the Company. 2. Acceptance. This Subscription Agreement is made subject to the Company's discretionary right to accept or reject the subscription herein, and the Subscriber will be notified upon closing of the offering (the "Acceptance Date") whether the subscription has been accepted. If the Company shall for any reason reject this Subscription, the Subscription will be refunded in full, without interest, and this Subscription Agreement shall be null, void and of no effect. Acceptance of this subscription by the Company will be evidenced by the execution hereof by an officer of the Company. 3. Subscriber Representations. The Subscriber hereby represents and warrants that: (a) The Subscriber's representations in this Agreement are complete and accurate to the best of the Subscriber's knowledge, and the Company and any sales agent may rely upon them. The Subscriber will notify the Company and any such agent immediately if any material change occurs in any of this information before the sale of the Shares. (b) The Subscriber is [check which of the following apply]: [_] an "accredited investor" as defined under Rule 501 of Regulation D; or [_] has, either alone or in conjunction with Subscriber's purchaser representative(s) if any, such knowledge and experience in financial and business matters as to be able to evaluate the merits and risks of an investment herein. E-36 (c) The Subscriber is able to bear the economic risk of an investment in the securities for an indefinite period of time, can afford to risk the loss of the entire investment in the securities, and will, after making an investment in the securities, have sufficient means of providing for current needs and possible future contingencies without reliance upon this investment. Additionally, the Subscriber's overall commitment to investments which are not readily marketable is not disproportionate to the Subscriber's net worth and this Subscription will not cause such overall commitment to become excessive. (d) The securities subscribed for herein will no be sol by the Subscriber without registration under applicable securities acts or a proper exemption from such registration. Further, the Subscriber shall, in the event any of the securities subscribed for herein are to be sold without registration, supply the Company with satisfactory opinion of counsel, if requested, that an exemption from such registration is available. (e) The Subscriber understands and acknowledges that although the securities being offered are being acquired for the Subscriber's own account and risk, for investment purposes, and not on behalf of any other person or with, or for resale in connection with, any distribution thereof within the meaning of the Act, unless the resale or other transfer of the securities has been registered under the Act, or, in the opinion of counsel satisfactory to the Company, if requested, is exempt from registration under the Act. The Subscriber is aware that although there are substantial restrictions on the transferability of the securities, there is presently no public market for the securities and no assurance of a future public market for the securities, and, accordingly, it is unlikely that the Subscriber will be readily able to liquidate an investment in the securities quickly in the event of an emergency. (f) The Subscriber hereby agrees that he does not have the right to cancel this Subscription Agreement, which shall survive the death, disability, or the cessation of existence as a legal entity, of the Subscriber. Further, the Subscriber agrees that he does not have the right, and will not attempt, to transfer his interest herein. (g) The Subscriber has had access to any and all information concerning the Company which the Subscriber and the Subscriber's financial, tax and legal advisors required or considered necessary to make a proper evaluation of this investment. In making the decision solely upon their own independent investigations, and fully understand that there are no guarantees, assurances or promises in connection with any investment hereunder and understand that the particular tax consequences arising from this investment in the Company will depend upon the Subscriber's individual circumstances. The Subscriber further understands that no opinion is being given as to any securities matters involving the Offering. E-37 (h) The Subscriber shall indemnify and hold the Company harmless from all costs and expenses, including reasonable attorney's fees, incurred by the Company as a result of a breach hereof by the Subscriber. Further, all of the representations and warranties of the Subscriber contained herein and all information furnished by the Subscriber to the Company are true, correct and complete in all respects, and the Subscriber agrees to notify the Company immediately of any change in any representation, warranty or other information set forth herein. (i) The Subscriber also understands and agrees that stop transfer instructions relating to the securities will be placed in the Company's stock transfer ledger, and that the certificates evidencing the securities sold will bear the legend in substantially the following form: "No sale, offer to sell, or transfer of the shares represented by this certificate shall be made unless a registration statement under the Federal Securities Act of 1933, as amended, with respect to such shares is then in effect or an exemption from the registration requirements of said act is then in fact applicable to said shares" (j) The Subscriber has been given the unrestricted opportunity to ask questions of, and receive answers from the Company, or persons acting on its behalf, concerning the terms and conditions of, and all other matters relating to the offering, and has been given the unrestricted opportunity to obtain such additional information with respect to the offering as he has desired, including, but not limited to, any additional information necessary to verify the accuracy of the information set forth in the attached documentation. The undersigned has carefully read all material identified as being attached hereto and has no further questions with respect thereto. (k) The Subscriber knows that the securities subscribed for herein are offered and sold pursuant to exemptions from registration and the Securities Act of 1933, and state securities law based, in part, on these warranties and representatives, which are the very essence of this Subscription Agreement, and constitute a material part of the bargained-for consideration without which this Agreement would not have been executed. (l) By reason of the Subscriber's business or financial experience or the business or financial experience of professional advisors who are unaffiliated with and who are not compensated by the Company or any affiliate or selling agent of the Company, directly or indirectly, the Subscriber has the capacity to protect his own interest in connection with this transaction or has a pre- existing personal or business relationship with the Company or one or more of its officers, directors or controlling persons consisting of personal or business contacts of a nature and duration such as would enable a E-38 reasonably prudent purchaser to be aware of the character, business acumen and general business and financial circumstances of such person with whom such relationship exists. (m) This Agreement when fully executed and delivered to the Company will constitute a valid and legally binding obligation of the Subscriber, enforceable in accordance with its terms. The Subscriber, if it is a partnership, joint venture, corporation, trust or other entity, was not formed or organized for the specific purpose of acquiring the Shares. The purchase of the Shares by the Subscriber, if it is an entity investor, is a permissible investment, declaration of trust or other similar charter document, and has been duly approved by all requisite action by the entity's owners, directors, officers or other authorized managers. The person signing this document and all documents necessary to consummate the purchase of the Shares has all requisite authority to sign such document on behalf of the Subscriber, if it is an entity investor. (n) The Subscriber has not duplicated or distributed this information to anyone other than his Purchaser Representative or other personal advisors, and will not do so in the future. (o) The Shares offered hereby were not offered to the Subscriber by way of general solicitation or general advertising and at no time was the Subscriber presented with or solicited by means of any leaflet, public promotional meeting, circular, newspaper or magazine article, radio or television advertisement. 4. Governing Law. This Subscription shall be governed by the laws of the state of Nevada. 5. Entire Agreement. This Subscription Agreement together with the other documents executed contemporaneously herewith, constitute the entire agreement between the parties with respect to the matters covered thereby, and may only be amended by a writing executed by all parties hereto. 6. Survival of Representations. The representations, warranties, acknowledgments and agreements made by the Subscriber shall survive the acceptance of this Subscription and run in favor of, and for the benefit of, the Company. 7. Power of Attorney of Spouse. If the Subscriber is a married person, the Subscriber agrees to cause the Subscriber's spouse to execute this Agreement at the space provided for that spouse's signature immediately following the signature of the Subscriber, and by such signature hereto said spouse certifies that said spouse is the spouse of the person who signed this Agreement, that said spouse has read and approves the provisions hereof and hereby consents and agrees to this Agreement and agrees to be bound by and accept such provision of this Agreement in lieu of all other interests said spouse may have in the Company, whether such interests be community property or otherwise. Said spouse grants to the Subscriber irrevocable power of attorney to represent said spouse in all matters connected with the Company to the end that, in al cases, the Company may rely on any E-39 approval, direction, vote or action taken by the Subscriber, as said spouse's attorney-in-fact. Such power of attorney is, and shall be deemed to be, coupled with an interest so that the authority granted hereby may be continue during the entire period of the Company and regardless of the death or incapacity of the spouse granting the same. Said spouse further agrees to execute, acknowledge and deliver such other further instruments and documents as may be required to evidence such power of attorney. 8. Waiver. No waiver or modification of any of the terms of this Agreement shall be valid unless in writing. No waiver of a breach of, or default under, any provision hereof shall be deemed a waiver of such provision or of any subsequent breach or default of the same or similar nature or of any other provision or condition of this Agreement. 9. Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. 10. Notices. Except as otherwise required in this Agreement, any notice required or permitted under this Agreement shall be given in writing and shall be deemed effectively given upon personal delivery or upon deposit with the United States Post Office, by registered or certified mail, postage prepaid, addressed to the last known address of the party. 11. Non-Assignability. The obligations of the Subscriber hereunder shall not be delegated or assigned to any other party without the prior written consent of the Company. 12. Expenses. Each party shall pay all of its costs and expenses that it incurs with respect to the negotiation, execution and delivery of this Agreement. 13. Form of Ownership. Please indicate the form of ownership that the Subscriber desires for the Shares: _X_ Individual ____ Joint Tenants with Right of Survivorship ____ Tenants in Common ____ Community Property ____ Trust ____ Corporation ____ Partnership ____ Other:_____________________________ E-40 INDIVIDUAL(S) SIGN HERE: SUBSCRIBER: /s/ Cornelius A. Hofman 9/1/98 Signature Date Cornelius A. Hofman Print Name 227 South 9th Ave. Address Pocatello ID 83201 City State Zip ###-##-#### 1,000,000 Social Security No. Number of Shares Subscribed for Purchase SPOUSE OF SUBSCRIBER: _____________________________________ ORGANIZATION(S) SIGN HERE: SUBSCRIBER: ________________________ __________ Print name of organization Date By _____________________ Title ____________________ ________________________ Address ________________________________________________ City State Zip ____________________ _____________________________ Federal ID Number (EIN) Number of Shares Subscribed for Purchase ACCEPTED: Llebpmac, Inc. By: /s/ Cornelius A. Hofman 9/1/98 Cornelius A. Hofman, President Date E-41 EX-99 12 ex992.txt Exhibit 99.2 Cach Foods, Inc. Form SB-2 PROCEEDS ESCROW AGREEMENT PROCEEDS ESCROW AGREEMENT ("Agreement") dated as of ___________, 2001, by and between Cach Foods, Inc., a Nevada corporation (the "Company") and Professional Escrow Services, Inc. (the "Escrow Agent") W I T N E S S E T H WHEREAS, the Company intends to engage in a public offering of certain of its securities (the "Offering"), which Offering contemplates minimum aggregate offering proceeds of $75,000 and maximum aggregate offering proceeds of $125,000; WHEREAS, there will be deposited into an escrow account with Escrow Agent from time to time funds from prospective investors who wish to subscribe for securities offered in connection with the Offering ("Subscribers"), which funds will be held in escrow and distributed in accordance with the terms hereof; and WHEREAS, the Escrow Agent is willing to act as an escrow agent in respect of the Escrow Funds (as hereinafter defined) upon the terms and conditions set forth herein; NOW, THEREFORE, for good and valuable considerations, the receipt and adequacy of which are hereby acknowledged by each of the parties hereto, the parties hereto hereby agree as follows: 1. Appointment of Escrow Agent. The Company hereby appoints the Escrow Agent as escrow agent in accordance with the terms and conditions set forth herein, and the Escrow Agent hereby accepts such appointment. 2. Delivery of Escrow Funds. (a) The Company shall deliver to the Escrow Agent checks or wire transfers made payable to the order of "Professional Escrow Services, Inc." together with the Subscribers mailing address. The funds delivered to the Escrow Agent shall be deposited by the Escrow Agent into a non-interest- bearing account designated "Professional Escrow Services, Inc. Reserve Account" and shall be held and distributed by the Escrow Agent in accordance with the terms hereof. The collected funds deposited into the Escrow Account are referred to herein as the "Escrow Funds." The Escrow Agent shall acknowledge receipt of all Escrow Funds by notifying the Company of deposits into the Escrow Account in the Escrow Agent's customary manner no later than the next business day following the business day on which the Escrow Funds are deposited into the Escrow Account. (b) The Escrow Agent shall have no duty or responsibility to enforce the collection or demand payment of any funds deposited into the Escrow Account. If, for any reason, any check deposited into the Escrow Account shall be returned unpaid to the Escrow Agent, the sole duty of the Escrow Agent shall be to return the check to the Company. E-42 3. Investment of the Escrow Funds. The Escrow Account shall not bear interest and no other investment of the Escrow Funds shall be made while held by the Escrow Agent. 4. Release of Escrow Funds. The Escrow Funds shall be paid by the Escrow Agent in accordance with the following: (a) provided that the Escrow Funds total at least $75,000 at or before 4:00 p.m., Mountain Standard Time, on _________, 2001, (or ___________, 2001 if extended by the Company by written notice to the Escrow Agent given on or before _________, 2001), or on any date prior thereto, the Escrow Funds (or any portion thereof) shall be paid to the Company or as otherwise instructed by the Company, within one (1) business day after the Escrow Agent receives a written release notice in substantially the form of Exhibit A attached hereto (a "Release Notice") signed by an authorized person of the Company and thereafter, the Escrow Account will remain open for the purpose of depositing therein the subscription price for additional securities sold by the Company in the Offering, which additional Escrow Funds shall be paid to the Company or as otherwise instructed by the Company upon receipt by the Escrow Agent of a Release Notice as described above; and (b) if the Escrow Agent has not received a Release Notice from the Company at or before 4:00 p.m., Mountain Standard Time, on __________, 2001, (or ____________, 2001 if extended by the Company by written notice to the Escrow Agent given on or before _________________, 2001), and the Escrow Funds do not total at least $75,000 at such time and date, then the Escrow Funds shall be returned to Subscribers. In the event that at any time the Escrow Agent shall receive from the Company written instructions signed by an individual who is identified on Exhibit B attached hereon as a person authorized to act on behalf of the Company, requesting the Escrow Agent to refund to a Subscriber the amount of a collected check or other funds received by the Escrow Agent, the Escrow Agent shall make such refund to the Subscriber within one (1) business day after receiving such instructions. 5. Limitation of Responsibility and Liability of the Escrow Agent. The Escrow Agent: (a) shall not be liable for any error of judgment or for any act done or step taken or omitted by it in good faith, or for any mistake of fact or law, or for anything which it may do or refrain from doing in connection herewith, except its own gross negligence and willful misconduct; (b) shall be authorized to rely upon all written instructions and/or communications of the non-bank Party which appear to be valid on their face; (c) shall have no implied obligations or responsibilities hereunder, nor shall it have any obligation or responsibility to collect funds or seek the deposit of money or property; (d) may consult with legal counsel of its choice with regard to any legal question arising in connection with its duties or responsibilities hereunder, and shall have no E-43 liability or responsibility by reason of any action it may take or fail to take in accordance with the opinions of such counsel; (e) acts hereunder as a depository only, and is not responsible or liable in any manner whatsoever for the sufficiency, correctness, genuineness, or validity of any instrument deposited with it, or with respect to the form or execution of the same, or the identity, authority, or rights of any person executing or depositing the same; and (f) shall be entitled to comply with any final order, judgment or decree of a court of competent jurisdiction, and/or with the consistent written instructions from the non-bank Party. 6. Costs and Expenses. The fee of the Escrow Agent is $50.00 setup fee, receipt of which is hereby acknowledged, and an additional $5.00 fee per subscriber check deposited by Escrow Agent. In addition, if the Escrow Funds are returned to subscribers under 4(b), above, the Escrow Agent shall receive a fee of $5.00 per check for such service. The fee agreed on for services rendered hereunder is intended as full compensation for the Escrow Agent's services as contemplated by this Agreement; however, in the event that the conditions of this Agreement are not fulfilled, the Escrow Agent renders any material service not contemplated by this Agreement, there is any assignment of interest in the subject matter of this Agreement, there is any material modification hereof, any material controversy arises hereunder, or the Escrow Agent is made a party to or justifiably intervenes in any litigation pertaining to this Agreement or the subject matter hereof, the Escrow Agent shall be reasonably compensated for such extraordinary expenses, including reasonable attorneys' fees, occasioned by any delay, controversy, litigation, or event and the same may be recoverable only from the Company. 7. Notices. All notices and communications shall be deemed to have been duly given: at the time delivered by hand, if personally delivered; when received, if deposited in the mail, postage prepaid, addressed as provided below; when transmission is verified, if telecopied; and on the next business day, if timely delivered to an air courier guaranteeing overnight delivery; To the Company: Cach Foods, Inc. P.O. Box 4669 Pocatello, ID 83205-4669 Attn: Cornelius A. Hofman, President To Escrow Agent: Professional Escrow Services, Inc. 920 Deon Drive Pocatello, ID 83201 Attn: Ron Bitton Any party may change its address by providing written notice of such change to the other parties hereto. E-44 8. Resignation by Escrow Agent. Upon thirty (30) calendar days' prior written notice to the non-bank Party delivered or sent as required above, the Escrow Agent shall have the right to resign as escrow agent hereunder and to thereby terminate its duties and responsibilities hereunder, and shall thereupon be released from these instructions. Upon resignation by the Escrow Agent, the Escrow Agent shall provide the non-bank Party with sufficient information concerning the status of the Escrow Fund to enable the non-bank parties to provide the same to a successor escrow agent. 9. Termination of Escrow Agreement. The Escrow Agent's responsibilities thereunder shall terminate at such time as the Escrow Fund shall have been fully disbursed pursuant to the terms hereof, or upon earlier termination of this escrow arrangement pursuant to written instructions executed by the non-bank Party. Such written notice of earlier termination shall include instruction to the Escrow Agent for the distribution of the Escrow Fund. 10. Entire Agreement. This Agreement contains the entire understanding by and among the parties hereto; there are no promises, agreements, understandings, representations or warranties, other than as herein set forth. No change or modification of this Agreement shall be valid or effective unless the same is in writing and is signed by all of the parties hereto. 11. Applicable Law, Successors and Assigns. This Agreement shall be governed in all respects by the laws of the state of Idaho, and shall be binding upon and shall inure to the benefit of the parties hereto, and their respective heirs, executors, administrators, legal representatives, successors and assigns. IN WITNESS WHEREOF, the parties hereto have caused their respective hands to be set hereto with the intention of being bound effective in all respects as of the date and year first hereinabove written. Cach Foods, Inc. /s/Cornelius A. Hofman By: Cornelius A. Hofman Its: President Professional Escrow Services, Inc. /s/Ron Bitton By: Ron Bitton Its: President E-45 EXHIBIT A Release Notice Professional Escrow Services, Inc. 920 Deon Drive Pocatello, ID 83201 Gentlemen: The undersigned hereby authorize and instruct Professional Escrow Services, Inc., escrow agent, to release all funds of the Escrow Funds from the Escrow Account and to deliver such funds as follows: Mr. Cornelius A. Hofman will personally visit Professional Escrow Services, Inc., escrow agent, and receive the funds in the form of a check once notice had been given that all subscriber checks have cleared and funds are available. IN WITNESS WHEREOF, this release has been executed on ________________, 2001. Cach Foods, Inc. /s/ Cornelius A. Hofman By: Cornelius A. Hofman Its: President E-46 EXHIBIT B Authorized Personnel The Escrow Agent is authorized to accept instructions and notices signed or believed by the Escrow Agent to be signed by any one of the following each of whom is authorized to act on behalf of the Company: On Behalf of Cach Foods, Inc. Name Title Signature Cornelius A. Hofman President /s/Cornelius A. Hofman E-47 -----END PRIVACY-ENHANCED MESSAGE-----