0001165527-12-000176.txt : 20120301
0001165527-12-000176.hdr.sgml : 20120301
20120301132013
ACCESSION NUMBER: 0001165527-12-000176
CONFORMED SUBMISSION TYPE: 10-12G
PUBLIC DOCUMENT COUNT: 10
FILED AS OF DATE: 20120301
FILER:
COMPANY DATA:
COMPANY CONFORMED NAME: Spicy Gourmet Manufacturing, Inc.
CENTRAL INDEX KEY: 0001543272
IRS NUMBER: 452282672
STATE OF INCORPORATION: DE
FISCAL YEAR END: 1231
FILING VALUES:
FORM TYPE: 10-12G
SEC ACT: 1934 Act
SEC FILE NUMBER: 000-54616
FILM NUMBER: 12656546
BUSINESS ADDRESS:
STREET 1: 7910 IVANHOE AVE.
STREET 2: NUMBER 414
CITY: LA JOLLA
STATE: CA
ZIP: 92037
BUSINESS PHONE: 858-459-1133
MAIL ADDRESS:
STREET 1: 7910 IVANHOE AVE.
STREET 2: NUMBER 414
CITY: LA JOLLA
STATE: CA
ZIP: 92037
10-12G
1
g5799.txt
FORM 10 OF SPICY GOURMET MANUFACTURING, INC.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
---------------------
FORM 10
---------------------
GENERAL FORM FOR REGISTRATION OF SECURITIES Pursuant
to Section 12(b) or (g) of The Securities Exchange Act of 1934
SPICY GOURMET MANUFACTURING, INC.
(Exact name of registrant as specified in its charter)
Delaware 45-2282672
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
7910 Ivanhoe Ave. #414
La Jolla, California 92037
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code: (858) 459-1133
Registrant's facsimile number, including area code: (858) 459-1103
Securities to be registered pursuant to Section 12(b) of the Act:
None
Securities to be registered pursuant to Section 12(g) of the Act:
Common Stock - $0.0001 Par Value
Indicate by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non accelerated filer, or a smaller reporting company.
Large accelerated filer [ ] Accelerated filer [ ]
Non-accelerated filer [ ] Smaller reporting company [X]
ITEM 1. DESCRIPTION OF BUSINESS
BACKGROUND OF THE ISSUER AND ITS PREDECESSOR
Spicy Gourmet Manufacturing, Inc. ("the Company" or "the Issuer") was
organized under the laws of the State of Delaware on December 30, 2010 as part
of the implementation of the Chapter 11 plan of reorganization of Spicy Gourmet
Organics, Inc. ("SGO"), a California corporation.
SGO was incorporated in the State of California in 2006 and was formed to
import specialty, organic spices from South Asia and sell them in the United
States. SGO was under capitalized and sales of its spice products were slow to
develop, possibly due to the current recession. As a result SGO lacked
sufficient cash flow to meet its current obligations and on October 1, 2010 SGO
filed a voluntary petition for bankruptcy under Chapter 11 in the U.S.
Bankruptcy Court for the Central District of California. SGO's plan of
reorganization was confirmed by the Court on November 19, 2010.
The plan of reorganization provided for the acquisition by SGO of a new,
unrelated, retail business and the spin off of all of the various elements of
SGO's spice business (importing, manufacturing, retail sales and wholesale
sales) to four different entities. The plan of reorganization called for the
spin off of SGO's manufacturing business to this Issuer, the incorporation of
this Issuer, and the distribution of shares in this Issuer to the bankruptcy
creditors. The plan required the Issuer to issue 1,180,000 shares of its common
stock and distribute these to SGO's general unsecured creditors, to its
administrative creditors, and to its shareholder. The shares were distributed
pursuant to section 1145 of the U.S. Bankruptcy Code. As stated in the Plan of
Reorganization ordered by the Court, these shares were issued "to enhance the
distribution to creditors," i.e. to enhance their opportunity to recover the
losses they sustained in the SGO bankruptcy. To this end, SGO, by and through
its President, agreed "to use its best efforts to have the shares... publicly
traded on the Over-The-Counter market in order to provide an opportunity for
liquidity to the creditors" (from the Court approved "Disclosure Statement"
describing the Plan of Reorganization). The present filing is a result of this
commitment.
DESCRIPTION OF CURRENT BUSINESS
Prior to the bankruptcy of SGO, the issuer's predecessor designed a hand
held spice mill and arranged for the manufacture of 1,000 of these mills at a
factory in China. The factory in China is not owned by the Issuer, nor is the
Issuer under any obligation to it. The mills were manufactured by the factory in
China and delivered to SGO on a simple contract basis. The Company hopes to
capitalize on this experience and manufacture and sell spice mills to other
retailers of spices and or spice related products. Depending upon the financial
requirements of any orders the Company may develop, the Company's three
directors may finance the order with interest free loans from their own funds to
the Company, or they may seek financing via advance payments from a buyer, loans
from the factory in China, or loans from another source such as a commercial
lender. As of the date hereof, we have not entered into any sales agreement nor
have we identified a potential buyer for our spice mills other than the
successor to SGO. The SGO successor is headed by one of our directors, Dinesh
Perera, and it has indicated a willingness to purchase mills from us when
needed, however its current inventory is such that it does not expect to order
additional mills for at least six months.
It is anticipated that we will incur only nominal expenses in the
implementation of the business plan described herein until such time as we have
an order for the manufacture of spice mills. Because we have limited capital
with which to pay these anticipated expenses, our three directors, Mr. Balaban,
Mr. Masters and Mr. Perera, will pay these charges with their personal funds, as
interest free loans to the Company or as capital contributions.
It is our present intent to continue to comply with all of the reporting
requirements under the 1934 Act. Our three directors, Ali Balaban, Daniel
Masters and Dinesh Perera, have orally agreed to provide the necessary funds,
without interest, for the Company to comply with the 1934 Act reporting
requirements, provided that they are officers and directors of the Company when
the obligation is incurred. These officers have not, as of the date hereof, set
a maximum dollar amount that they are willing to provide to the Company.
2
ITEM 1A. RISK FACTORS
Our business is subject to numerous risk factors, including the following:
1. We have no operating history and no revenues or earnings from operations.
We have no assets other than a small amount of cash. We will, in all
likelihood, sustain operating expenses without corresponding revenues, at least
until we obtain an order for the manufacture and delivery of our spice mills.
This may result in us incurring a net operating loss that will increase
continuously, at least until we negotiate a sale of our products. There is no
assurance that we can find a buyer or our products or, if we do, that the sales
price will be such that we can operate profitably.
2. We may not be able to continue to operate as a going concern.
Our auditor has expressed the opinion that we may not be able to continue
as a going concern. His opinion letter and the notation in the financial
statements indicate that we do not have revenues, significant cash reserves, or
other material assets and that we are relying on advances from stockholders,
officers and directors to meet our limited operating expenses. We may become
insolvent if we are unable to pay our debts in the ordinary course of business
as they become due.
3. Our proposed plan of operation is speculative.
The success of our proposed plan of operation is speculative. Although we
have arranged for the manufacture of products in the past, these products were
sold to a related entity, our former parent. There can be no assurance that we
will be successful in locating other buyers for our products, or that, if we do
find buyers, that we will be able to sell products at a price and in sufficient
quantity to earn a profit or to continue in operation.
4. We face intense competition from other sellers.
We are and will continue to be an insignificant participant in the business
of supplying small hand operated appliances such as spice mills. A large number
of established and well-financed entities are engaged in such sales. Nearly all
such entities have significantly greater financial resources, technical
expertise and managerial capabilities than we have. Many of them have their own
factories and so are able to control their costs when we cannot. There can be no
assurance that we will be able to successfully compete with these large
businesses.
5. We face intense competition from others seeking to have products
manufactured for them in China.
We are and will continue to be an insignificant participant in the business
of arranging the overseas manufacture, especially the Chinese manufacture, of
our products. Because of our small size and probably infrequent orders we will
not be in a position to negotiate especially low prices with a manufacturer.
This inability to insure that we obtain low prices could result in the prices we
charge customers being non-competitive, and this could lead to an inability to
sell our products.
6. Our success is dependent on our officers and directors who have other full
time employment, have limited experience, and will only devote limited time
(part time) to working for the Company, all of which makes our future even
more uncertain.
Ali Balaban is the President and a director of the Issuer, Daniel Masters
is the Secretary and Treasurer and a director of the Issuer, and Dinesh Perera
is a director of the Issuer. These are the only offices and directors of the
Company. All three will serve without pay while maintaining other employment. As
of the date hereof, each is devoting no more than two hours per week to the
affairs of the Company, however, each expects to increase that time commitment
from time to time as other obligations permit. Notwithstanding the limited
3
availability of our directors, loss of the services of any director could
adversely affect development of our business and its likelihood of continuing in
operation.
7. Our officers and directors have limited experience in arranging for the
manufacture of products such as spice mills, making our ability to compete
successfully more uncertain.
Although Dinesh Perera, one of our directors, is currently engaged in the
retail sale of spices and spice mills, our other directors have no similar
experience. Mr. Perera is currently president of Santa Barbara Organic Spice
Company, a company engaged in internet based retail sales of spices and spice
mills. Our President, Ali Balaban, has no direct experience with the spice
business although he has experience in management of consumer product sales
businesses, including business which sell primarily via television infomercials.
Our Secretary/Treasurer, Daniel Masters, is an attorney. This lack of extensive
experience makes our ability to compete more uncertain.
8. Our dependence upon foreign manufacture of our products may subject us to
currency risks.
Because we intend to have our products manufactured in China but sell them
here we are subject to certain risks based on the change in value of currencies
relative to each other. If, for example, the Chinese RMB were to rise in value
relative to the dollar it would increase the price of Chinese products, possibly
making our spice mills too costly to sell. If this were to happen after we had
entered a contract to sell products at a certain dollar price, and another
contract to purchase products at a certain RMB price, we could lose money on the
transaction. This could jeopardize our ability to continue in business.
9. One of our officers is also our principal shareholder and he will be able
to approve all corporate actions without shareholder consent and will
control our Company.
Our principal shareholder, Ali Balaban, currently owns approximately 53.7%
of our Common Stock. Because of this, he will have the controlling vote in all
matters requiring approval by our shareholders, but not requiring the approval
of the minority shareholders. In addition, he is now the Company's President and
one of its three directors. Because he is the majority shareholder, he will be
able to elect all of the members of our board of directors, allowing him to
exercise significant control of our affairs and management. In addition, he may
transact corporate business requiring shareholder approval by written consent,
without soliciting the votes of other shareholders.
10. Our Common Stock may never be publicly traded and holders may have no
ability to sell their shares.
There is no established public trading market for our shares of Common
Stock, and there is no assurance that our Common Stock will be accepted for
quotation on the OTC Bulletin Board or in any other trading system in the
future. There can be no assurance that a market for our Common Stock will be
established or that, if established, a market will be sustained. Therefore, if
you purchase our Common Stock you may be unable to sell the shares. Accordingly,
you should be able to bear the financial risk of losing your entire investment.
Only market makers can apply to quote securities. A market maker who
desires to initiate quotations in the OTC Bulletin Board system must complete an
application (Form 211) (unless an exemption is applicable) and by doing so, will
have to represent that it has satisfied all applicable requirements of the
Securities and Exchange Commission Rule 15c2-11 and the filing and information
requirements promulgated under the Financial Industry Regulatory Authority
("Finra") Bylaws. The OTC Bulletin Board will not charge us a fee for being
quoted on the service. Finra rules prohibit market makers from accepting any
remuneration in return for quoting issuers' securities on the OTC Bulletin Board
or any similar medium. Finra will review the market maker's application (unless
an exemption is applicable). If cleared, it cannot be assumed by any investor
that any federal, state or self-regulatory requirements other than certain Finra
rules and Rule 15c2-11 have been considered by Finra. Furthermore, the clearance
should not be construed by any investor as indicating that Finra, the Securities
and Exchange Commission, or any state securities commission has passed upon the
accuracy or adequacy of the documents contained in the submission.
4
The OTC Bulletin Board is a market maker or dealer-driven system offering
quotation and trading reporting capabilities - a regulated quotation service -
that displays real-time quotes, last-sale prices, and volume information in OTC
equity securities. The OTC Bulletin Board securities are not listed and traded
on the floor of an organized national or regional stock exchange. Instead, OTC
Bulletin Board securities transactions are conducted through a telephone and
computer network connecting market makers or dealers in stocks.
11. If our Common Stock does not meet blue sky resale requirements, certain
shareholders may be unable to resell our Common Stock.
The resale of Common Stock must meet the blue sky resale requirements in
the states in which the proposed purchasers reside. If we are unable to qualify
the Common Stock and there is no exemption from qualification in certain states,
the holders of the Common Stock or the purchasers of the Common Stock may be
unable to sell them.
12. Our shareholders may face significant restrictions on the resale of our
Common Stock due to state "blue sky" laws .
There are state regulations that may adversely affect the transferability
of our Common Stock. We have not registered our Common Stock for resale under
the securities or "blue sky" laws of any state. We may seek qualification or
advise our shareholders of the availability of an exemption. We are under no
obligation to register or qualify our Common Stock in any state or to advise the
shareholders of any exemptions.
Current shareholders, and persons who desire to purchase the Common Stock
in any trading market that may develop in the future, should be aware that there
might be significant state restrictions upon the ability of new investors to
purchase the Common Stock.
Blue sky laws, regulations, orders, or interpretations place limitations on
offerings or sales of securities by where such securities represent "cheap
stock" previously issued to promoters or others. Our officers received stock at
a price of $.0005 for each share, and may be deemed to hold "cheap stock." These
limitations typically provide, in the form of one or more of the following
limitations, that such securities are:
(a) Not eligible for sale under exemption provisions permitting sales
without registration to accredited investors or qualified purchasers;
(b) Not eligible for the transaction exemption from registration for
non-issuer transactions by a registered broker-dealer;
(c) Not eligible for registration under the simplified small corporate
offering registration (SCOR) form available in many states;
(d) Not eligible for the "solicitations of interest" exception to
securities registration requirements available in many states;
(e) Not permitted to be registered or exempted from registration, and thus
not permitted to be sold in the state under any circumstances.
Virtually all 50 states have adopted one or more of these limitations, or
other limitations or restrictions affecting the sale or resale of "cheap stock"
issued to promoters or others. Specific limitations on such offerings have been
adopted in:
Alaska Arkansas California Delaware Florida Georgia
Idaho Indiana Nebraska Nevada New Mexico Ohio
Oklahoma Oregon Pennsylvania Rhode Island South Carolina South Dakota
Tennessee Texas Utah Vermont Washington
5
Any secondary trading market which may develop, may only be conducted in
those jurisdictions where an applicable exemption is available or where the
shares have been registered.
13. Our Common Stock will be subject to significant restriction on resale due
to federal penny stock restrictions.
The Securities and Exchange Commission has adopted rules that regulate
broker or dealer practices in connection with transactions in penny stocks.
Penny stocks generally are equity securities with a price of less than $5.00
(other than securities registered on certain national securities exchanges or
quoted on the Nasdaq system, provided that current price and volume information
with respect to transactions in such securities is provided by the exchange
system). The penny stock rules require a broker or dealer, prior to a
transaction in a penny stock not otherwise exempt from the rules, to deliver a
standardized risk disclosure document prepared by the Securities and Exchange
Commission that provides information about penny stocks and the nature and level
of risks in the penny stock market. The broker or dealer also must provide the
customer with bid and offer quotations for the penny stock, the compensation of
the broker or dealer, and its salesperson in the transaction, and monthly
account statements showing the market value of each penny stock held in the
customer's account. The penny stock rules also require that prior to a
transaction in a penny stock not otherwise exempt from such rules, the broker or
dealer must make a special written determination that a penny stock is a
suitable investment for the purchaser and receive the purchaser's written
agreement to the transaction.
These disclosure requirements will have the effect of reducing the level of
trading activity in any secondary market for our stock, and accordingly,
shareholders of our Common Stock will find it difficult to sell their
securities, if at all.
ITEM 2. FINANCIAL INFORMATION
SELECTED FINANCIAL DATA
The Company was organized on December 30, 2010 and therefore no significant
historical financial information exists. The Company's statement of operations
for the period from December 30, 2010 (inception) through December 31, 2011
reflects the following:
Revenues $ 0
Expenses 118
-----
Profit (Loss) $(118)
=====
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
1) Liquidity: The Company had $5,000 in cash and no other liquid assets at
December 31, 2011. It is anticipated that we will incur nominal expenses in the
implementation of the business plan described herein. Because we have limited
cash with which to pay these anticipated expenses, the directors of the Company
have agreed to pay these charges with their personal funds, as interest free
loans to the Company or as capital contributions. However, this is a voluntary
agreement; our three directors are not contractually obligated to pay these
expenses. No loans have been made as of the date hereof.
2) Capital Resources: As noted above, the Company has limited capital
resources but will rely upon interest free loans or capital contributions from
our three directors to meet its needs.
3) Results of Operations: As noted above, the Company was recently
organized and has conducted no operations other than organizational efforts and
the preparation of this Form 10 and the audit of its financial statements.
4) Off-Balance Sheet Arrangements: The Company has no off balance sheet
arrangements.
6
INFORMATION ABOUT MARKET RISK
The Company is not currently subject to fluctuations in interest rates,
currency exchange rates, or other financial market risks, however, as noted in
Risk Factor 8 above, we may become subject to fluctuations in currency exchange
rates if we contract for manufacture or delivery of products in another currency
and carry this as a payable or receivable rather than paying or accepting
payment at the time the contract is entered. Our three directors have agreed to
extend loans to the Company as needed to meet obligations, however these will be
interest free. As of the date of this filing, the Company has not made any
sales, purchases, or commitments with foreign entities which would expose it to
currency risks.
ITEM 3. DESCRIPTION OF PROPERTY
We presently utilize minimal space at 7910 Ivanhoe Avenue, No. 414, La
Jolla, California. This space is provided to the Company by our Secretary on a
rent free basis, and it is anticipated that this arrangement will remain until
such time as the Company requires dedicated office space. Management believes
that this arrangement will meet the Company's needs for the foreseeable future.
ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
(A) SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table sets forth the security and beneficial ownership for
each class of our equity securities for any person who is known to be the
beneficial owner of more than five (5%) percent of the Company.
Amount and
Nature of
Title Name and Address of Beneficial Percent
of Class Beneficial Owner Owner of Class
-------- ---------------- ----- --------
Common Ali Balaban 6,000,000 53.7%
Ayazaga Maslak Yolu No: 5/A Kat: 3
Maslak, Sisli 34396 Istanbul-TURKEY
Common Daniel Masters 4,000,000 35.8%
7910 Ivanhoe Ave., #414
La Jolla, CA 92037
The remaining 1,180,000 shares of the Company's outstanding common stock are
held by 48 persons, no one of which is known to be the beneficial owner of five
percent (5%) or more of the Company's common shares. There are, as of the date
hereof, a total of 11,180,000 common shares issued and outstanding and no
preferred shares issued or outstanding.
(B) SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth the ownership for each class of equity
securities of the Company owned beneficially and of record by all of our
directors and officers.
Amount and
Nature of
Title Name and Address of Beneficial Percent
of Class Beneficial Owner Owner of Class
-------- ---------------- ----- --------
Common Ali Balaban 6,000,000 53.7%
President & Director
Ayazaga Maslak Yolu No: 5/A Kat: 3
Maslak, Sisli 34396 Istanbul-TURKEY
7
Common Daniel Masters 4,000,000 35.8%
Secretary, Treasurer & Director
7910 Ivanhoe Ave., #414
La Jolla, CA 92037
Common Dinesh Perera 100,000 0.9%
Director
67 Alameda Padre Serra
Santa Barbara, CA 93103
Common All Officers and 10,100,000 90.34%
Directors as a Group
(three [3] individuals)
ITEM 5. DIRECTORS AND EXECUTIVE OFFICERS
Our directors and officers (and promoters, affiliates and control persons)
are as follows:
Name Age Position
---- --- --------
Ali Balaban 43 President/Director
Daniel Masters 66 Secretary/Treasurer/Director
Dinesh Perera 52 Director
The above listed officers and directors will serve until the next annual
meeting of the shareholders or until their death, resignation, retirement,
removal, or disqualification, or until their successors have been duly elected
and qualified. Vacancies in the existing Board of Directors are filled by
majority vote of the remaining Directors. Officers of the Company serve at the
will of the Board of Directors. There are no agreements or understandings for
any officer or director to resign at the request of another person and no
officer or director is acting on behalf of or will act at the direction of any
other person.
RESUMES
Ali Balaban, age 43, is President and a Director of the Company. Since 2010
he has been a Director of Yonja Group A.S., the acquirer of Spicy Gourmet
Organics, Inc. (SGO) under SGO's bankruptcy plan of reorganization. Yonja sells
European and U.S. food supplements and beauty products in Turkey. Mr. Balaban
oversees project development at Yonja. Since 2000 he has also been the Chief
Financial Officer of Homedrom Direct Response TV International, a retailer of
consumer products through direct response television advertising in several
European and Asian countries including Germany, Turkey, Ukraine, Kazakhstan,
Georgia, Azerbaijan, and Cyprus. Since 2009 he has also been the Managing
Director of Unite Technologies, a Ukraine based business which provides IT
management services to major GSM (cell phone) network operators and call centers
in Easter European countries. Mr. Balaban currently serves as a consultant on
European Union policies and programs for IT, especially the E-Content and Sixth
Framework Programs which offer grants and funds for European IT companies. Prior
to 2000 Mr. Balaban was an executive at a leading software outsourcing company
and at an apparel manufacturer. He earned his BA in Business Administration and
his MA in Strategy from Universite Paul Valery in Montpellier, France and an MBA
in International Business from UCLA.
Daniel Masters, age 66, is Secretary, Treasurer, and a Director of the
Company. He is also an attorney practicing business law with an emphasis on
corporate reorganizations. Before establishing his current law practice in 2002,
Mr. Masters served as an independent investment banker and corporate finance
consultant from 1990 to 2002. Between 1978 and 1989 he worked as an investment
banker with L.F. Thompson & Co. and at Capital Technology Group; as Vice
8
President for Finance with the Trilon Group, a private holding company with over
a billion dollars in assets; and as President of Golden Gate Capital, a venture
capital group. Prior to 1978 Mr. Masters held positions as a legislative aid on
the staff of the U.S. Congress and as executive assistant to the President of
the University of California. Mr. Masters received his Bachelor of Arts Degree
(A.B.) from Harvard University and a Juris Doctorate (J.D.) from Thomas
Jefferson School of Law where he served on the Editorial Board of the Law
Review.
Dinesh Perera, age 52, was the President of Spicy Gourmet Organics Inc.
(SGO) from 2006 until 2010. SGO filed a petition for bankruptcy under Chapter 11
in 2010 and the confirmed plan of reorganization provided for the incorporation
of this Issuer. He has been a Director of the Issuer since it was established on
December 30, 2010. He is also the President of Santa Barbara Organic Spice
Company, Inc., a retailer of organic spices, which he formed in December, 2010.
From 2000 to 2005 he was the manager of the Arati Store in New York, a retailer
of health foods, herbal supplements, books, and related products. From 1996 to
2000 he owned and managed a business which sold sunglasses wholesale to stores
in California, Hawaii, and Texas. From 1986 to 1996 he was an independent auto
insurance agent in California, and from 1978 to 1986 he worked as an engineer
with British Aerospace Corp. in London. Mr. Perera attended an aerospace trade
school in Britain and Santa Monica College in California.
OTHER OFFERINGS
Daniel Masters is currently President and a Director of MedBook World, Inc.
and of Three Shades For Everybody, Inc. MedBook World is currently a shell
company, and Three Shades For Everybody was formerly a shell company but is
currently in the business of selling art and collectibles. It's primary asset is
a collection of signed, numbered, lithographs by actor Red Skelton valued at
$9,885. Neither Mr. Balaban nor Mr. Perera are currently directors or officers
of any other publicly traded companies or SEC registrants.
CONFLICTS OF INTEREST
As noted above, Mr. Perera is in the business of selling organic spices and
related products including spice mills to the public via the internet. Because
the Company expects to manufacture spice mills for sale on a wholesale basis the
Company believes that no conflict of interest exists. Mr. Balaban also works
with companies which sell products to the public on a retail basis and the
Company believes that no conflict of interest exists. Mr. Masters is an officer
and director of two other companies and represents other businesses as an
attorney however these companies are in unrelated businesses and Mr. Masters
believes that there is no conflict of interest.
The officers and directors are, so long as they are officers or directors
of the Company, subject to the restriction that all opportunities contemplated
by the Company's plan of operation which come to their attention, either in the
performance of their duties or in any other manner, will be considered
opportunities of, and be made available to the Company. A breach of this
requirement will be a breach of the fiduciary duties of the officer or director.
However, all directors may still individually take advantage of opportunities if
the Company should decline to do so.
Also as noted above, all three of the Company's directors have other
employment and, therefore, there is a potential conflict of interest in the time
which the officers and directors devote to this Company and to their other
employment. We do not currently have an agreement as to the amount of time that
will be devoted to the Company's affairs, however our three directors have
stated that they will devote such time as they believe necessary to seeking out
potential buyers of the Company's products and arranging for their manufacture
and importation.
ITEM 6. EXECUTIVE COMPENSATION
None of our three directors has received any compensation for services
rendered to the Company since its inception, nor are there any agreements in
place or contemplated to provide compensation to any officer or director.
We have no retirement, pension, profit sharing, stock option or insurance
programs or other similar programs for the benefit of our officers and
directors, and we have no employees.
9
ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
There have been no related party transactions, or any other transactions or
relationships required to be disclosed. There are no promoters except to the
extent the three Directors of the Company may be considered to be promoters
because of their involvement with the bankruptcy plan of reorganization calling
for the creation of this Issuer and because of their ownership of shares in the
Issuer.
The two officers of the Company have agreed to provide the necessary funds,
without interest, for the Company to comply with the 1934 Act provided that the
lender is an officer of the Company when the obligation is incurred. All
advances are interest-free and there is no contractual obligation requiring the
two officers to provide these funds.
ITEM 8. LEGAL PROCEEDINGS
There is no litigation pending or threatened by or against the Company.
ITEM 9. MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT'S COMMON EQUITY AND
RELATED STOCKHOLDER MATTERS
(A) MARKET PRICE
There is no trading market for our Common Stock at present and there has
been no trading market to date. We do not have a trading symbol. There is no
assurance that a trading market will ever develop or, if such a market does
develop, that it will continue. The Company intends to request a broker-dealer
to make application to Finra to have the Company's securities traded on the OTC
Bulletin Board System or published, in print and electronic media, or either, in
the Pink Sheets, LLC ("Pink Sheets"), however there is no assurance that a
broker-dealer will agree to make such application or, if one does, that Finra
will provide us with a symbol.
The Securities and Exchange Commission adopted Rule 15g-9, which
established the definition of a "penny stock," for purposes relevant to the
Company, as any equity security that has a market price of less than $5.00 per
share or with an exercise price of less than $5.00 per share, subject to certain
exceptions. For any transaction involving a penny stock, unless exempt, the
rules require: (i) that a broker or dealer approve a person's account for
transactions in penny stocks; and (ii) the broker or dealer receive from the
investor a written agreement to the transaction, setting forth the identity and
quantity of the penny stock to be purchased. In order to approve a person's
account for transactions in penny stocks, the broker or dealer must (i) obtain
financial information and investment experience and objectives of the person;
and (ii) make a reasonable determination that the transactions in penny stocks
are suitable for that person and that person has sufficient knowledge and
experience in financial matters to be capable of evaluating the risks of
transactions in penny stocks. The broker or dealer must also deliver, prior to
any transaction in a penny stock, a disclosure schedule prepared by the
Commission relating to the penny stock market, which, in highlight form, (i)
sets forth the basis on which the broker or dealer made the suitability
determination; and (ii) that the broker or dealer received a signed, written
agreement from the investor prior to the transaction. Disclosure also has to be
made about the risks of investing in penny stock in both public offering and in
secondary trading, and about commissions payable to both the broker-dealer and
the registered representative, current quotations for the securities and the
rights and remedies available to an investor in cases of fraud in penny stock
transactions. Finally, monthly statements have to be sent disclosing recent
price information for the penny stock held in the account and information on the
limited market in penny stocks. It is likely that our stock, if it trades at
all, will be considered a penny stock, and the rules noted above will apply. As
a result, a shareholder may find it more difficult to dispose of, or to obtain
accurate quotations as to the market value of, the Company's securities.
10
(B) HOLDERS
There are fifty (50) shareholders of record of the Company's Common Stock.
Forty-eight (48) of these shareholders received their shares as a result of the
bankruptcy of Spicy Gourmet Organics, Inc. (SGO). In that case the Bankruptcy
Court for the Central District of California ordered certain shares of the
Company's stock to be distributed to the creditors of SGO. The shares were
distributed under an exemption from registration provided by Section 1145 of
Title 11 of the U.S. Code (the Bankruptcy Code).
(C) DIVIDENDS
The Company has not paid any cash dividends to date, and has no plans to do
so in the immediate future.
(D) SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS
The Company has not authorized the issuance of any securities under any
compensation plan.
ITEM 10. RECENT SALES OF UNREGISTERED SECURITIES
(A) SECURITIES ISSUED IN BANKRUPTCY
1,180,000 shares of our common stock were distributed to 48 shareholders by
order of the U.S. Bankruptcy Court for the Central District of California as
part of the confirmed Plan of Reorganization of Spicy Gourmet Organics, Inc.
(the "Debtor"). The Debtor was engaged in various phases of the spice business
including the import of spices from South Asia into the U.S. The Court ordered
the incorporation of the Issuer, the assignment to it of the spice import aspect
of the Debtor's business, and ordered the Issuer's securities to be distributed
to creditors of the Debtor in partial satisfaction of their claims against the
Debtor and in order to enhance the creditors' opportunity for recovery.
5,000,000 warrants to purchase shares of our common stock were also
distributed to creditors of the Debtor as part of the confirmed Plan of
Reorganization. The warrants consist of 1,000,000 "A Warrants" each convertible
into one share of common stock at an exercise price of $3.00; 1,000,000 "B
Warrants" each convertible into one share of common stock at an exercise price
of $4.00; 1,000,000 "C Warrants" each convertible into one share of common stock
at an exercise price of $5.00; 1,000,000 "D Warrants" each convertible into one
share of common stock at an exercise price of $6.00; and 1,000,000 "E Warrants"
each convertible into one share of common stock at an exercise price of $7.00.
All warrants are currently exercisable and may be exercised at any time prior to
November 19, 2015.
The issuance of the 1,180,000 shares of common stock and the 5,000,000
warrants to purchase a total of 5,000,000 shares of common stock were issued in
exchange for claims against the estate of the Debtor and were exempt from
registration under the Securities Act of 1933, as amended, because they were
issued under section 1145 of the Bankruptcy Code (Title 11 of the U.S. Code). In
addition, we may have also relied upon section 3(a)(7) of the Securities Act of
1933 as a transaction ordered by a court as part of a bankruptcy reorganization.
(B) SECURITIES ISSUED IN A PRIVATE PLACEMENT
On March 29, 2011 the Company issued 10,000,000 restricted shares of its
common stock to its two officers, 6,000,000 shares to its President, Ali
Balaban, and 4,000,000 shares to its Secretary/Treasurer, Daniel Masters, all at
$0.0005 per share, for total consideration of $5,000. We relied upon Section
4(2) of the Securities Act of 1933, as amended for the above issuance. We
believed that Section 4(2) was available because:
- The issuance involved no underwriter, underwriting discounts or
commissions;
- We placed restrictive legends on all certificates issued;
- No sales were made by general solicitation or advertising;
- Sales were made only to accredited investors.
11
In connection with the above transactions, we provided the following to the
investor:
- Access to all our books and records.
- Access to all material contracts and documents relating to our
operations.
- The opportunity to obtain any additional information, to the extent we
possessed such information, necessary to verify the accuracy of the
information to which the investors were given access.
ITEM 11. DESCRIPTION OF REGISTRANT'S SECURITIES TO BE REGISTERED
The Company's authorized capital stock consists of 100,000,000 Common
Shares, par value $0.0001 per share, and 20,000,000 Preferred Shares, par value
$0.0001 per share. We have no other class of equity securities authorized, and
we have no debt securities presently authorized. We have 11,180,000 Common
Shares issued and outstanding as of the date of this filing and no Preferred
Shares issued and outstanding as of the date of this filing. We also have
warrants outstanding which are convertible into an additional 5,000,000 Common
Shares. The warrants are currently exercisable and may be exercised at any time
prior to November 19, 2015.
All shares of our Common Stock have equal voting rights and, when validly
issued and outstanding, are entitled to one vote per share in all matters to be
voted upon by shareholders. The shares of Common Stock have no preemptive,
subscription, conversion or redemption rights and may be issued only as
fully-paid and non-assessable shares. Cumulative voting in the election of
directors is not permitted, which means that the holders of a majority of the
issued and outstanding shares of Common Stock represented at any meeting at
which a quorum is present will be able to elect the entire Board of Directors if
they so choose and, in such event, the holders of the remaining shares of Common
Stock will not be able to elect any directors. In the event of liquidation of
the Company, each shareholder is entitled to receive a proportionate share of
the Company's assets available for distribution to shareholders after the
payment of liabilities and after distribution in full of preferential amounts,
if any. All shares of the Company's Common Stock issued and outstanding are
fully-paid and non-assessable. Holders of the Common Stock are entitled to share
pro rata in dividends and distributions with respect to the Common Stock, as may
be declared by the Board of Directors out of funds legally available therefor.
Our Board of Directors is authorized to issue our Preferred Stock in series and
to fix the designation, powers, preferences, and rights of the shares of each
such series and the qualifications, limitations, or restrictions thereof.
In addition to the 11,180,000 Common Shares which we currently have
outstanding there are 5,000,000 warrants outstanding, each of which is
convertible into one share of our Common Stock. These consist of 1,000,000 "A
Warrants" each convertible in to one share of common stock at an exercise price
of $3.00; 1,000,000 "B Warrants" each convertible in to one share of common
stock at an exercise price of $4.00; 1,000,000 "C Warrants" each convertible in
to one share of common stock at an exercise price of $5.00; 1,000,000 "D
Warrants" each convertible in to one share of common stock at an exercise price
of $6.00; and 1,000,000 "E Warrants" each convertible in to one share of common
stock at an exercise price of $7.00. All of the warrants are currently
exercisable; they will expire if unexercised on November 19, 2015 unless
extended by vote of the Board of Directors. All of these warrants were issued to
creditors of Spicy Gourmet Organics, Inc. (SGO) by order of the Bankruptcy Court
as part of the Chapter 11 Plan of Reorganization of SGO. The warrants were
distributed under an exemption from registration provided by Section 1145 of
Title 11 of the U.S. Code.
ITEM 12. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Except for acts or omissions which involve intentional misconduct, fraud or
known violation of law, there shall be no personal liability of a director or
officer to the Company, or to its stockholders for damages for breach of
fiduciary duty as a director or officer. The Company may indemnify any person
for expenses incurred, including attorneys fees, in connection with their good
faith acts if they reasonably believe such acts are in and not opposed to the
best interests of the Company and for acts for which the person had no reason to
believe his or her conduct was unlawful. The Company may indemnify the officers
and directors for expenses incurred in defending a civil or criminal action,
suit or proceeding as they are incurred in advance of the final disposition of
the action, suit or proceeding, upon receipt of an undertaking by or on behalf
of the director or officer to repay the amount of such expenses if it is
ultimately determined by a court of competent jurisdiction in which the action
or suit is brought that such person is not fairly and reasonably entitled to
indemnification for such expenses.
12
Insofar as indemnification for liabilities arising under the Securities Act
of 1933, as amended, may be permitted to officers, directors or persons
controlling the Company pursuant to the foregoing, we have been informed that in
the opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Securities Act of 1933, as amended,
and is therefore unenforceable.
ITEM 13. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The Company's audited financial statements are attached hereto.
ITEM 14. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
There are no disagreements with the findings of our accountant.
ITEM 15. FINANCIAL STATEMENTS AND EXHIBITS
The Company's audited financial statements as of December 31, 2011 are
filed herewith.
Exhibit:
2.1 Plan of Reorganization Filed herewith
3.1 Articles of Incorporation Filed herewith
3.2 Bylaws Filed herewith
4.1 Form of "A" Warrant Agreement Filed herewith
4.2 Form of "B" Warrant Agreement Filed herewith
4.3 Form of "C" Warrant Agreement Filed herewith
4.4 Form of "D" Warrant Agreement Filed herewith
4.5 Form of "E" Warrant Agreement Filed herewith
23.1 Consent of Stan J. H. Lee, CPA Filed herewith
SIGNATURES
Pursuant to the requirements of Section 12 of the Securities Exchange Act
of 1934, the Registrant has duly caused this registration statement to be signed
on its behalf by the undersigned, thereunto duly authorized.
Date: March 1, 2012 SPICY GOURMET MANUFACTURING, INC.
By: /s/ Ali Balaban
---------------------------------------
Ali Balaban
President, CEO and Director
By: /s/ Daniel Masters
---------------------------------------
Daniel Masters
CFO, Secretary, and Director
13
SPICY GOURMET MANUFACTURING, INC.
(A DEVELOPMENT STAGE COMPANY)
FINANCIAL STATEMENTS
December 31, 2011
CONTENTS
Independent Auditors' Report F-2
Balance Sheet - Assets and Liabilities and Stockholders' Equity F-3
Statement of Operations F-4
Statement of Changes in Stockholders' Equity F-5
Statement of Cash Flows F-6
Notes to Financial Statements F-7
F-1
Stan J.H. Lee, CPA
2160 North Central Rd. Suite 203 * Fort Lee * NJ 07024
P.O. Box 436402 * San Diego * CA 92143-9402
619-623-7799 * Fax 619-564-3408 * E-mail) stan2u@gmail.com
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Stockholders
Spicy Gourmet Manufacturing, Inc.
(A Development Stage Company)
We have audited the accompanying balance sheet of Spicy Gourmet Manufacturing,
Inc. as of December 31, 2011, and the related statements of operation,
shareholders' deficit and cash flows for the period from December 30, 2010
(inception) to December 31, 2011. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audit.
We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. The Company is not required to
have, nor were we engaged to perform, an audit of its internal control over
financial reporting. Our audit included consideration of internal control over
financial reporting as a basis for designing audit procedures that are
appropriate in the circumstances, but not for the purposes of expressing an
opinion on the effectiveness of the Company's internal control over financial
reporting. Accordingly, we express no such opinion. An audit includes examining,
on a test basis, evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Spicy Gourmet Manufacturing,
Inc. as of December 31, 2011, and the results of its operation and its cash
flows for the aforementioned periods in conformity with U.S. generally accepted
accounting principles.
The financial statements have been prepared assuming that the Company will
continue as a going concern. As discussed in the note 3 to the financial
statements, the Company has not established any source of revenue to cover its
operating costs, and losses from operations raise substantial doubt about its
ability to continue as a going concern. The financial statements do not include
any adjustments that might result from the outcome of this uncertainty.
/s/ Stan J.H, Lee, CPA
----------------------------------
Stan J.H. Lee, CPA
February 15, 2012
Fort Lee, NJ
Registered with the Public Company Accounting Oversight Board
Member of New Jersey Society of Certified Public Accountants
Registered with Canadian Public Accountability Board
F-2
SPICY GOURMET MANUFACTURING, INC.
(A Development Stage Company)
BALANCE SHEET
As of
December 31, 2011
-----------------
ASSETS
Assets
Cash $ 5,000
--------
TOTAL ASSETS $ 5,000
========
LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)
TOTAL LIABILITIES $ --
STOCKHOLDERS' EQUITY (DEFICIT)
Preferred stock, $0.0001 par value:
20,000,000 shares authorized, no shares issued
and outstanding as of December 31, 2011 --
Common stock, $0.0001 par value:
100,000,000 shares authorized, 11,180,000 shares
issued and outstanding as of December 31, 2011 1,118
Additional paid in capital 4,000
Deficit accumulated during the development stage (118)
--------
TOTAL SHAREHOLDERS' EQUITY (DEFICIT) 5,000
--------
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY $ 5,000
========
See Notes to Financial Statements
F-3
SPICY GOURMET MANUFACTURING, INC.
(A Development Stage Company)
STATEMENT OF OPERATIONS
Period From
December 31, 2010
(Inception) to
December 31, 2011
-----------------
REVENUE $ --
-----------
Total Revenue --
EXPENSES
Organizational Expenses 118
General & Admin Expenses
-----------
Operating Expenses 118
-----------
OPERATING INCOME (LOSS) (118)
OTHER INCOME (EXPENSE)
Current Income Tax --
Income Tax Benefit --
-----------
NET INCOME (LOSS) $ (118)
===========
Basic & Diluted (Loss) per Share $ (0.00)
-----------
Weighted average number of common
shares outstanding - Basic 6,180,000
Weighted average number of common
shares outstanding - Diluted 11,180,000
See Notes to Financial Statements
F-4
SPICY GOURMET MANUFACTURING, INC.
(A Development Stage Company)
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
From inception, December 30, 2010, to December 31, 2011
Accumulated
Additional During the Total
Common Stock Paid-in Development Stockholders
Shares Amount Capital Stage Equity
------ ------ ------- ----- ------
Common Stock Issued Per Court
Order December 30, 2010 1,180,000 $ 118 $ 0 $ -- $ 118
Common Stock Issued to Officers
June 30, 2011 at $0.0005 per
share in cash 10,000,000 1,000 4,000 -- 5,000
Net loss for period Ended
December 31, 2011 -- -- -- (118) (118)
---------- ------- ------- ------- -------
Balance, December 31, 2011 11,180,000 $ 1,118 $ 4,000 $ (118) $ 5,000
========== ======= ======= ======= =======
See Notes to Financial Statements
F-5
SPICY GOURMET MANUFACTURING, INC.
(A Development Stage Company)
STATEMENT OF CASH FLOWS
Period From
December 31, 2010
(Inception) to
December 31, 2011
-----------------
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income (Loss) $ (118)
--------
Adjustments to reconcile net income (loss)
to net cash (used in) operations
Changes in operating assets and liabilities --
--------
NET CASH PROVIDED BY (USED IN) OPERATIONS (118)
--------
CASH FLOWS FROM INVESTING ACTIVITIES
NET CASH PROVIDED BY INVESTING ACTIVITIES --
--------
CASH FLOWS FROM FINANCING ACTIVITIES
Common stock issuance for cash 5,000
Common stock issued for expense 118
--------
NET CASH PROVIDED BY FINANCING ACTIVITIES 5,118
--------
Net increase (decrease) 5,000
--------
Cash beginning of period --
--------
Cash end of period $ 5,000
========
NON-CASH INVESTING & FINANCING ACTIVITIES
Common stock issued per Bankruptcy Court Order $ 118
========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Interest paid $ --
Income taxes paid $ --
See Notes to Financial Statements
F-6
SPICY GOURMET MANUFACTURING, INC.
(A Development Stage Company)
Notes to Financial Statements
December 31, 2011
NOTE 1. NATURE AND BACKGROUND OF BUSINESS
Spicy Gourmet Manufacturing, Inc. ("the Company" or "the Issuer") was organized
under the laws of the State of Delaware on December 30, 2010. The Company was
established as part of the Chapter 11 reorganization of Spicy Gourmet Organics,
Inc. ("SGO"). Under SGO's Plan of Reorganization, as confirmed by the U.S.
Bankruptcy Court for the Central District of California, the Company was
incorporated to: (1) receive and own any interest which SGO had in the
manufacturing of spice mills and similar products; and (2) issue shares of its
common stock to SGO's general unsecured creditors, to its administrative
creditors, and to its shareholder. The Company has been in the development stage
since its formation and has not yet realized any revenues from its planned
operations.
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
a. BASIS OF ACCOUNTING
The Company's financial statements are prepared using the accrual method of
accounting. The Company has elected a December 31 year-end.
BASIS OF PRESENTATION - DEVELOPMENT STAGE COMPANY
The Company is a development stage company as defined by ASC 915-10-05,
"Development Stage Entity." The Company is still devoting substantially all of
its efforts on establishing the business and its planned principal operations
have not commenced. All losses accumulated since inception have been considered
as part of the Company's development stage activities.
b. BASIC EARNINGS PER SHARE
The Company computes net income (loss) per share in accordance with the FASB
Accounting Standards Codification ("ASC"). The ASC specifies the computation,
presentation and disclosure requirements for earnings (loss) per share for
entities with publicly held common stock.
Basic net earnings (loss) per share amounts are computed by dividing the net
earnings (loss) by the weighted average number of common shares outstanding.
Diluted earnings (loss) per share are the same as basic earnings (loss) per
share due to the lack of dilutive items in the Company.
c. ESTIMATES
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
d. CASH and CASH EQUIVALENT
For the Balance Sheet and Statements of Cash Flows, all highly liquid
investments with maturity of three months or less are considered to be cash
equivalents.
F-7
e. REVENUE RECOGNITION
The Company recognizes revenues and the related costs when persuasive evidence
of an arrangement exists, delivery and acceptance has occurred or service has
been rendered, the price is fixed or determinable, and collection of the
resulting receivable is reasonably assured. Amounts invoiced or collected in
advance of product delivery or providing services are recorded as deferred
revenue. The Company accrues for warranty costs, sales returns, bad debts, and
other allowances based on its historical experience.
f. STOCK-BASED COMPENSATION
The Company records stock-based compensation in accordance with the FASB
Accounting Standards Classification using the fair value method. All
transactions in which goods or services are the consideration received for the
issuance of equity instruments are accounted for based on the fair value of the
consideration received or the fair value of the equity instrument issued,
whichever is more reliably measurable. Equity instruments issued to employees
and the cost of the services received as consideration are measured and
recognized based on the fair value of the equity instruments issued.
g. INCOME TAXES
Income taxes are provided in accordance with the FASB Accounting Standards
Classification. A deferred tax asset or liability is recorded for all temporary
differences between financial and tax reporting and net operating loss carry
forwards. Deferred tax expense (benefit) results from the net change during the
year of deferred tax assets and liabilities.
Deferred tax assets are reduced by a valuation allowance when, in the opinion of
management, it is more likely than not that some portion or all of the deferred
tax assets will not be realized. Deferred tax assets and liabilities are
adjusted for the effects of changes in tax laws and rates on the date of
enactment.
h. IMPACT OF NEW ACCOUNTING STANDARDS
The Company does not expect the adoption of recently issued accounting
pronouncements to have a significant impact on the Company's results of
operations, financial position, or cash flow.
NOTE 3. GOING CONCERN
The Company's financial statements are prepared in accordance with generally
accepted accounting principles applicable to a going concern. This contemplates
the realization of assets and the liquidation of liabilities in the normal
course of business. Currently, the Company does not have significant cash or
other material assets, nor does it have operations or a source of revenue
sufficient to cover its operation costs and allow it to continue as a going
concern. The officers and directors have committed to advancing certain
operating costs of the Company.
NOTE 4. STOCKHOLDERS' EQUITY COMMON STOCK
The authorized share capital of the Company consists of 100,000,000 shares of
common stock with $0.0001 par value, and 20,000,000 shares of preferred stock
also with $0.0001 par value. No other classes of stock are authorized.
COMMON STOCK: As of December 31, 2011, there were a total of 11,180,000 common
shares issued and outstanding.
The Company's first issuance of common stock, totaling 1,180,000 shares, took
place on December 30, 2010 pursuant to the Chapter 11 Plan of Reorganization
confirmed by the U.S. Bankruptcy Court in the matter of Spicy Gourmet Organics,
Inc. ("SGO"). The Court ordered the distribution of shares in Organic Spice
Imports, Inc. to all general unsecured creditors of SGO, with these creditors to
receive their PRO RATA share (according to amount of debt held) of a pool of
F-8
80,000 shares in the Company. The Court also ordered the issuance of 100,000
shares in the Company to the sole shareholder of SGO. The Court also ordered the
distribution of 1,000,000 shares in the Company to the administrative creditors
of SGO; these creditors received one share of common stock in the Company for
each $0.05 of SGO's administrative debt which they held.
The Court also ordered the distribution of warrants in the Company to all
administrative creditors of SGO, with these creditors to receive five warrants
in the Company for each $0.05 of SGO's administrative debt which they held.
These creditors received an aggregate of 5,000,000 warrants consisting of
1,000,000 "A Warrants" each convertible into one share of common stock at an
exercise price of $3.00; 1,000,000 "B Warrants" each convertible into one share
of common stock at an exercise price of $4.00; 1,000,000 "C Warrants" each
convertible into one share of common stock at an exercise price of $5.00;
1,000,000 "D Warrants" each convertible into one share of common stock at an
exercise price of $6.00; and 1,000,000 "E Warrants" each convertible into one
share of common stock at an exercise price of $7.00. All warrants are
exercisable at any time prior to November 19, 2015. This warrant distribution
also took place on December 30, 2010.
On June 30, 2011 the Company's two officers acquired a total of 10,000,000
common shares from the Issuer in a private placement. The shares were purchased
at the price of $0.0005 per share for a total of $5,000.
As a result of these issuances there were a total 11,180,000 common shares
issued and outstanding, and a total of 5,000,000 warrants to acquire common
shares issued and outstanding, at December 31, 2011.
PREFERRED STOCK: The authorized share capital of the Company includes 20,000,000
shares of preferred stock with $0.0001 par value. As of December 31, 2011 no
shares of preferred stock had been issued and no shares of preferred stock were
outstanding.
NOTE 5. INCOME TAXES
The Company has had no business activity and made no U.S. federal income tax
provision since its inception on December 30, 2010.
NOTE 6. RELATED PARTY TRANSACTIONS
The Company neither owns nor leases any real or personal property. An officer of
the corporation provides office services without charge. Such costs are
immaterial to the financial statements and accordingly, have not been reflected
therein. The officers and directors for the Company are involved in other
business activities and may, in the future, become involved in other business
opportunities. If a specific business opportunity becomes available, such
persons may face a conflict in selecting between the Company and their other
business interests. The Company has not formulated a policy for the resolution
of such conflicts.
NOTE 7. WARRANTS AND OPTIONS
On December 30, 2010 (inception), the Company issued 5,000,000 warrants
exercisable into 5,000,000 shares of the Company's common stock. These warrants
were issued per order of the U.S. Bankruptcy Court in the matter of Spicy
Gourmet Organics, Inc. ("SGO") to the administrative creditors of SGO. These
creditors received an aggregate of 5,000,000 warrants consisting of 1,000,000 "A
Warrants" each convertible into one share of common stock at an exercise price
of $3.00; 1,000,000 "B Warrants" each convertible into one share of common stock
at an exercise price of $4.00; 1,000,000 "C Warrants" each convertible into one
share of common stock at an exercise price of $5.00; 1,000,000 "D Warrants" each
convertible into one share of common stock at an exercise price of $6.00; and
1,000,000 "E Warrants" each convertible into one share of common stock at an
exercise price of $7.00. All warrants are exercisable at any time prior to
November 19, 2015. As of the date of this report, no warrants have been
exercised.
F-9
NOTE 8. COMMITMENT AND CONTIGENTCY
There is no commitment or contingency to disclose during the period ended
December 31, 2011.
NOTE 9. SUBSEQUENT EVENTS
The Company has performed an evaluation of subsequent events in accordance with
ASC Topic 855 and the Company is not aware of any subsequent events which would
require recognition or disclosure in the financial statements.
F-10
EX-2.1
2
ex2-1.txt
PLAN OF REORGANIZATION
EXHIBIT 2.1
Daniel C. Masters (SBN 220729)
P. O. Box 66
La Jolla, CA 92038
Telephone: (858) 459-1133
Facsimile: (858) 459-1103
ATTORNEY FOR DEBTOR
UNITED STATES BANKRUPTCY COURT
CENTRAL DISTRICT OF CALIFORNIA
In re: ) Case No.: 1:10-bk-22504-GM
)
)
) DEBTOR'S JOINT PLAN OF REORGANIZATION
)
SPICY GOURMET ORGANICS, INC., )
a CALIFORNIA corporation, )
) Plan Confirmation Hearing
DEBTOR. ) Date: November 16, 2010
) Time: 10:00 AM
) Place: 21041 Burbank Blvd. Room 303
) Woodland Hills, CA 91367
I. INTRODUCTION
Spicy Gourmet Organics, Inc., a California corporation (the "Debtor" or
"Proponent"), will be the Debtor in a Chapter 11 bankruptcy case which
management of the Debtor expects to file in the United States Bankruptcy Court
for the Central District of California (the "Court"). Chapter 11 allows the
Debtor and, under some circumstances, creditors and other parties in interest,
to propose a plan of reorganization (the "Plan"). This is a Joint Plan of
Reorganization being proposed jointly by six parties: the Debtor, its four
Subsidiaries, and one unrelated creditor.
THIS DOCUMENT IS THE JOINT PLAN OF REORGANIZATION
This is a reorganizing Plan. The Debtor seeks to satisfy its obligations to
Creditors by issuing to them a combination of cash ($40,000) and stock (80,000
1
shares) in this reorganized company in exchange for their respective claims and
interests. The Debtor's Equity Interest Holders will retain 5,000 common shares
in the reorganized company. Additionally, the Debtor will issue to its Creditors
and Equity Interest Holders stock in each of the Debtor's four subsidiaries and
will divest itself of all ownership in these companies.
II. DEFINITIONS
As used herein, the following terms shall have the following meanings:
1. "Administrative Claim" means a Claim entitled to priority pursuant to
Section 507(a)(1) or Section 507(b) of the Bankruptcy Code. Such Claims include,
without limitation, a Claim for payment of an administrative expense of the kind
specified in Section 503(b) of the Bankruptcy Code, including without
limitation, the actual and necessary costs and expenses of preserving and
operating the Debtor's Estate, compensation and reimbursement of expenses for
professional services awarded under Sections 330(a) and/or 331 of the Bankruptcy
Code, and all fees and charges assessed against the Debtor's Estates pursuant to
Chapter 123 of Title 23, United States Code.
2. "Administrative Claimant" means the holder of an Allowed Administrative
Claim.
3. "Allowed Claim" means a Claim against the Debtor to the extent that:
a. Proof of such Claim was:
(1) Timely filed;
(2) Deemed filed pursuant to Section 1111(a) of the Bankruptcy
Code; or
(3) Late filed with leave, and pursuant to Final Order, of the
Court; and
b. (1) No objection to such Claim is filed with the Court;
2
(2) The Court, pursuant to Final Order, allows such
Claim; or
(3) The Plan allows such Claim.
4. "Allowed Secured Claim" means a Secured Claim which is or has become an
Allowed Claim.
5. "Allowed Tax Claim" means a Tax Claim, which is or has become an Allowed
Claim, and does not include claims, held by Tax Claimants assessed on the basis
of taxable income of the Debtor earned or arising after the Petition Date.
6. "Allowed Unsecured Claim" means any Allowed Claim which is not an
Administrative Claim, a Secured Claim, a Tax Claim, a Priority Claim, or an
Insider Claim.
7. "Bankruptcy Code" means Title 11 of the United States Code, Section 101,
et seq., as amended.
8. "Bankruptcy Rules" means, collectively, the Federal Rules of Bankruptcy
Procedure and the Local Bankruptcy Rules for the Central District of California
as now in effect or hereafter amended.
9. "Bar Date" means the date set by the Bankruptcy Court as the last day to
file proofs of claim in this case.
10. "Business Day" means any day except Saturday, Sunday or any other day
on which state or federal law authorizes commercial banks in Santa Barbara,
California, to close.
11. "Case" means the Voluntary Chapter 11 Bankruptcy Case of Spicy Gourmet
Organics, Inc., after it is filed with the United States Bankruptcy Court for
the Central District of California. The case has not yet been filed.
12. "Chapter 11" means Chapter 11 of the Bankruptcy Code.
13. "Claim" means any right to payment from the Debtor that arose prior to
Confirmation, whether or not such right or demand is reduced to judgment,
3
liquidated, unliquidated, fixed, contingent, matured, un-matured, disputed,
undisputed, legal, equitable, secured or unsecured, or, any right or equitable
remedies for breach of performance, if such breach gives rise to a right to
payment, whether or not such right to an equitable remedy is reduced to
judgment, fixed, contingent, matured, un-matured, disputed, undisputed, legal,
equitable, secured or unsecured.
14. "Claimant" means the holder of any Allowed Claim.
15. "Class" means a class of Claims or Equity Interests described in this
Plan.
16. "Confirmation" means the entry of the Order of Confirmation confirming
the Plan pursuant to Section 1129 of the Bankruptcy Code.
17. "Court" means the United States Bankruptcy Court for the Central
District of California, or such other Court as has jurisdiction over the Case.
18. "Debtor" means Spicy Gourmet Organics, Inc., a California corporation,
the debtor in the Case.
19. "Disbursinq Agent" means Debtor or such other party as the Court may
designate.
20. "Disclosure Statement" means the Disclosure Statement describing the
Plan and containing adequate information thereon in conformity with Section 1125
of the Bankruptcy Code.
21. "Disputed Claim" means a Claim either: (a) scheduled by the Debtor as
disputed, contingent or unliquidated in the Schedules to be filed with the
Court, as may be amended or modified; or (b) as to which an objection has been
filed and which objection either (i) has not been withdrawn or (ii) has not been
determined by a Final Order.
22. "Effective Date" means that date which is eleven (11) days after the
entry of the Order of Confirmation.
4
23. "Estate" means the estate in the Case created pursuant to Section
541(a) of the Bankruptcy Code.
24. "Final Order" means an order, judgment, or other decree of the Court or
any court of competent jurisdiction as to which: (a) the operation or effect has
not been reversed, stayed, modified or amended; (b) any appeal that has been or
may be taken has been resolved; or (c) the time for appeal, review or rehearing
has expired.
25. "The Yonja Group, A.S." or "Yonja" means The Yonja Group, A.S., a
corporation formed under the Laws of Turkey and based in Istanbul, Turkey which
is engaged in the retail and wholesale sales of products in Turkey.
26. "Interest" means: (a) the common or preferred stock of the Debtor; and
(b) any right, warrant or option, however arising, to acquire the common or
preferred stock or any other equity interest, or any rights therein, of the
Debtor.
27. "Order of Confirmation" means the Order of the Court confirming the
Plan pursuant to Section 1129 of the Bankruptcy Code.
28. "Petition Date" means the date on which Debtor's voluntary petition for
bankruptcy is filed.
29. "Plan" means the Debtor's "Plan of Reorganization" as may be further
amended.
30. "Post-Consolidated Common" means the shares of the Debtor's common
stock after all shares currently issued and outstanding as of the date hereof
have been consolidated into a total of approximately 5,000 shares.
31. "Pre-Consolidated Common" means the 1,000,000 shares of Debtor's common
stock, which are issued and outstanding as of the date hereof.
32. "Priority Claim" means a claim entitled to priority under section
507(a) of the Bankruptcy Code, other than an Administrative Claim or a Tax
Claim.
5
33. "Pro Rata" means the ratio that the amount of a particular Allowed
Claim or Interest bears to the total amount of Allowed Claims or Interests of
the same Class.
34. "Reorganized Debtor" means the Debtor after Confirmation of the Plan.
35. "Schedules" means the Schedules of Assets and Liabilities to be filed
by the Debtor with the Court, including any amendments thereto.
36. "Secured Claim" means a claim which is secured by a properly perfected
lien on, or security interest in, any property of the Debtor's Estate, only to
the extent provided in Section 506(a) and 506(b) of the Bankruptcy Code.
37. "Securities Act" means the Securities Act of 1933, as amended.
38. "Subsidiaries" means the four business divisions currently owned and
operated by the Debtor and their incorporated successors: Retail Sales,
Wholesale Sales, Importing, and Manufacturing.
39. "Tax Claim" means a claim entitled to priority pursuant to Section
507(a)(8) of the Bankruptcy Code.
40. "Tax Claimant" means the holder of an Allowed Tax Claim.
41. "Unit" means one (1) share of Post-Consolidated Common Stock and one
(1) Class A Warrant, one (1) Class B Warrant, one (1) Class C Warrant, one (1)
Class D Warrant, and one (1) Class E Warrant.
42. "Unit Holder" means the holder of a Unit issued pursuant to the Plan.
43. "Warrant" means a right to purchase a share of stock of the Reorganized
Debtor to be issued pursuant to the Plan. One (1) Warrant shall entitle the
holder thereof to acquire one (1) share of Post-Consolidation Common Stock upon
payment of the stated exercise price. The exercise price for the Class A Warrant
will be $3.00; for the Class B Warrant it will be $4.00; for the Class C Warrant
6
it will be $5.00; for the Class D Warrant it will be $6.00; for the Class E
Warrant it will be $7.00. The exercise price for a Warrant may be reduced, but
not increased, by vote of the Board of Directors of the Corporation. All
Warrants shall expire, if not previously exercised, five years after the
Effective Date, defined supra, unless extended or called by vote of the Board of
Directors of the Corporation. If called, the Directors shall give holders of the
Warrants a period of not less than thirty (30) days following notice of the call
during which they may exercise their Warrants.
TERMS DEFINED IN THE BANKRUPTCY CODE.
A term not otherwise defined here, but used in the Bankruptcy Code, shall
have the definition assigned to such term in the Bankruptcy Code.
RULES OF INTERPRETATION, COMPUTATION OF TIME AND GOVERNING LAW.
1. Rules of Interpretation.
For purposes of the Plan: (a) whenever from the context it is appropriate,
each term, whether stated in the singular or the plural, shall include both the
singular and the plural; (b) any reference in the Plan to a contract,
instrument, release or other agreement or document being in a particular form or
on particular terms and conditions means that such agreement or document shall
be substantially in such form or substantially on such terms and conditions; (c)
any reference in the Plan to an existing document or exhibit filed or to be
filed means such document or exhibit, as it may have been or may be amended,
modified or supplemented; (d) unless otherwise specified, all references in the
Plan to Sections, Articles and Exhibits are references to Sections, Articles and
Exhibits of or to the Plan or Disclosure Statement as the case may be; (e) the
words "herein" and "hereto" refer to the Plan in its entirety rather than to a
particular portion of the Plan; (f) any reference in this Plan to the word
7
"including" shall mean "including without limitation"; and (g) captions and
headings to Articles and Sections are inserted for convenience of reference only
and are not intended to be a part of, or to affect, the interpretation of the
Plan.
2. Computation of Time.
In computing any period of time prescribed or allowed by the Plan or
Disclosure Statement, the provisions of Bankruptcy Rule 9006(a) shall apply.
3. Governing Law.
Except to the extent that the Bankruptcy Code or Bankruptcy Rules are
applicable, and subject to the provisions of any contract, instrument, release
or other agreement or document entered into in connection with the Plan, the
rights and obligations arising under the Plan shall he governed by, and
construed and enforced in accordance with, the laws of the State of California,
without giving effect to the principles of conflict of the laws of the State of
California.
III. CLASSIFICATION AND TREATMENT OF CLAIMS & EQUITY INTERESTS
A. GENERAL OVERVIEW
As required by the Bankruptcy Code, the Plan classifies claims and equity
interests in various classes according to their right to priority. The Plan
states whether each class of claims or equity interests is impaired or
unimpaired. The Plan provides the treatment each class will receive.
1. UNCLASSIFIED CLAIMS
Certain types of claims are not placed into voting classes; instead they
are unclassified. They are not considered impaired and they do not vote on the
Plan because they are automatically entitled to specific treatment provided for
them in the Bankruptcy Code. As such, the Proponent has not placed the following
claims in a class.
8
(a) Administrative Expenses
Administrative expenses are claims for costs or expenses of administering
the Debtor's Chapter 11 case which are allowed under Code section 507(a)(2). The
Bankruptcy Code requires that all administrative claims be paid on the Effective
Date of the Plan, unless a particular claimant agrees to a different treatment.
The following chart lists all of the Debtor's ss. 507(a)(2)
administrative claims and their treatment under the Plan:
Name Amount Owed Treatment
---- ----------- ---------
Administrative Up to To be paid on or before June 30,
Lenders $50,000 2015, with interest at an annual
(no more than if not converted rate of 6%, with the option to
ten persons) convert the debt to Units (defined
above) in the Reorganized Debtor
and in each of the four
Subsidiaries at a ratio of one Unit
per five cents ($0.05) of loan
principal within two years of the
Effective Date of the Plan.
Daniel C. Masters Subject to Court Subject to approval by the Court,
Attorney for approval, an fee to be paid upon entry of a
Debtor estimated fee of final order approving fee
$40,000 (1) application.
Clerk's Office Unknown Paid in full on Effective Date
Fees
Office of the $3,000 (estimated) Paid in full on Effective Date
U.S. Trustee Fees
TOTAL $43,000 (ESTIMATED)
----------
1. This figure is an estimate. The amount paid will be based on an hourly fee
of $400 and must be approved by the Court.
Court Approval of Fees Required:
The Court must rule on all fees paid to professionals employed by the
estate before the professional will be entitled to receive such fees.
(b) Priority Tax Claims
Priority tax claims include certain unsecured income, employment and other
taxes described by Code Section 507(a)(8). The Bankruptcy Code requires that
9
each holder of such a Section 507(a)(8) priority tax claim receive the present
value of such claim in deferred cash payments, over a period not exceeding six
years from the date of the assessment of such tax. The Debtor is not aware of
any priority tax claims.
2. CLASSIFIED CLAIMS AND EQUITY INTERESTS
(a) Classes of Secured Claims
Secured Claims are claims secured by liens on property of the estate. The
Debtor is not aware of any Secured Claims.
(b) Classes of Priority Unsecured Claims
Certain priority claims that are referred to in Code Sections 507(a)(1),
(4), (5), (6), and (7) are required to be placed in classes. The Debtor is not
aware of any claim that would qualify as an unsecured priority claim pursuant to
Sections 507(a)(1), (4), (5), (6), or (7) of the Bankruptcy Code under this
Plan.
(c) Class of General Unsecured Claims
General unsecured claims are unsecured claims not entitled to priority
under Code Section 507(a). The Debtor has identified one class of holders of
general unsecured claims. The following chart identifies this Plan's treatment
of the class containing all of the Debtor's general unsecured creditor claims:
IMPAIRED
CLASS # DESCRIPTION (Y/N) TREATMENT
------- ----------- ----- ---------
1 General Yes In full satisfaction of their
Unsecured respective Allowed Unsecured Claims,
Claims of each Holder of an Allowed Class 1
Creditors Claim shall receive, immediately
following the Effective Date:
Total amount (A) the Holder's PRO RATA share of a
of claims = cash pool of Forty Thousand Dollars
$851,628 ($40,000); and
(estimated) (B) the Holder's PRO RATA share of a
pool of Eighty Thousand (80,000)
Post-Consolidation Shares of Common
Stock in the Reorganized Debtor; and
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(C) the Holder's PRO RATA share of a
pool of Eighty Thousand (80,000)
Shares of Common Stock in each of the
Debtor's Subsidiaries.
(D) the Holder's PRO RATA share of 25%
of gross profits (defined as gross
sales minus the cost of goods sold)
derived from all sales of spices and
related products made by the
Subsidiaries during the three years
following confirmation of the Plan, or
until aggregate distributions to
Creditors made under the Plan (all
cash payments and total value of
Stock) shall equal the total amount of
Creditor Claims, whichever occurs
first.
No fractional shares shall be issued.
All calculations of shares in the
Reorganized Debtor and its
Subsidiaries to be issued to Holders
of Unsecured Claims shall be rounded
up or down to the nearest whole share.
(d) Class of Equity Interest Holders
Equity Interest Holders are the parties who hold ownership interest (i.e.,
equity interest) in the Debtor. In this case the Debtor is a corporation,
therefore entities holding preferred or common stock in the Debtor are equity
interest holders. The following chart identifies the Plan's treatment of all
equity interest holders:
IMPAIRED
CLASS # DESCRIPTION (Y/N) TREATMENT
------- ----------- ----- ---------
2 Equity Interest Yes This class consists of the
Holders Pre-Consolidation Common Stock
(holders of Interests in Debtor. This class holds,
Shares of as of the date hereof, a total of
Debtor's 1,000,000 shares of Debtor's common
Common Stock) stock. Debtor's Common Stock will be
consolidated such that Holders of
Class 2 Equity Interests shall receive
the following in full satisfaction of
all Claims, Debts, Management Fees,
Dividends and Interests:
(A) The Holder's PRO RATA share of a
pool of Five Thousand (5,000)
Post-Consolidation Shares of Common
Stock in the Reorganized Debtor; and
11
(B) Dinesh Perera, the principal
shareholder of the Debtor, will
receive 100,000 shares of Common Stock
in each of the Debtor's Subsidiaries
as partial compensation for his
continued management of them.
No fractional shares shall be issued.
All calculations of shares in the
Reorganized Debtor and its
Subsidiaries shall be rounded up or
down to the nearest whole share.
IV. MEANS OF EFFECTUATING THE PLAN
A. FUNDING FOR THE PLAN
The Debtor will file a Motion to borrow funds pursuant to Bankruptcy Code
ss. 364(c) and (f). The Debtor's Motion to borrow funds is an integral part of
this Plan. The Motion calls for authorization for the Debtor to borrow up to
$50,000. These funds will be used to pay the administrative expenses of the
bankruptcy. In return for these funds the Debtor will issue notes which shall be
due and payable on June 30, 2015 and will bear interest at the rate of 6%,
payable annually. The Notes will be issued to no more than ten persons. Anytime
within two years after the Effective Date of the Plan, holders of the Debtor's
Notes may elect to convert such notes to Units in the Debtor and in the Debtor's
Subsidiaries at a ratio of one (1) Unit per five cents ($0.05) of loan
principal. Each such Unit will consist of one (1) share of the Debtor's common
stock and one (1) "A" Warrant allowing the holder to purchase one share of
Debtor's common stock at an exercise price of $3.00, one (1) "B" Warrant
allowing the holder to purchase one share of Debtor's common stock at an
exercise price of $4.00, one (1) "C" Warrant allowing the holder to purchase one
share of Debtor's common stock at an exercise price of $5.00, one (1) "D"
Warrant allowing the holder to purchase one share of Debtor's common stock at an
exercise price of $6.00, and one (1) "E" Warrant allowing the holder to purchase
one share of Debtor's common stock at an exercise price of $7.00. All warrants
12
are exercisable at any time during the five year period immediately following
the Effective Date.
Notwithstanding any other provision governing the Warrants, if as of the
date of exercise, the Debtor or one of its Subsidiaries, as the case may be, has
registered its Common Stock under Section 12 of the Securities Exchange Act of
1934, as amended, a Warrant Holder may not exercise Warrants in that company to
the extent that immediately following such exercise the Holder would
beneficially own more than 4.99% of the outstanding Common Stock of the
registered company. For this purpose, a representation of the Holder that
following such exercise it would not beneficially own more than 4.99% of the
outstanding Common Stock of the company shall be conclusive and binding upon the
company.
The exercise price for a Warrant may be reduced, but not increased, by vote
of the Board of Directors of the Corporation. All Warrants shall expire, if not
previously exercised or cancelled, five years after the Effective Date, unless
extended or called by vote of the Board of Directors of the Corporation. If
called, the Directors shall give holders of the Warrants a period of not less
than thirty (30) days following notice of the call during which they may
exercise their Warrants. A holder of Warrants may convert the Warrants, in whole
or in part, to Common Stock without paying the cash exercise price. In that case
the number of shares of Common Stock to be issued will be determined by dividing
(a) the aggregate fair market value, as of the date of conversion, of the shares
of Common Stock of the Company which would be issuable upon exercise of the
Warrants to be converted minus the aggregate Warrant Exercise Price of the
shares of Common Stock of the Company which would be issuable upon exercise of
the Warrants by (b) the said fair market value of one share of the Common Stock
of the Company.
13
Assuming the Motion to borrow funds is approved, the Debtor will have
sufficient cash on hand on the Effective Date to make the payments required
under the Plan.
B. PROPOSED FUNDING BY YONJA
Management of Yonja has agreed to provide additional funding, up to a
maximum of $40,000, to supplement the Debtor's cash and to ensure that there
will be sufficient funds on hand at the Effective Date to make the payments
required under the Plan. Yonja earned a net profit of approximately $461,439 in
the year ending December 31, 2009 and will provide the proposed $40,000 funding
from its cash on hand. Because the Debtor will acquire Yonja, effectively
merging Yonja's operations into the Debtor, no repayment of these funds by the
Debtor to Yonja need be made.
C. THE DEBTOR'S BUSINESS OPERATIONS & MANAGEMENT AFTER PLAN CONFIRMATION
After the Effective Date of the Plan, the Reorganized Debtor will continue
its business and manage its affairs without the supervision of the Bankruptcy
Court. The Reorganized Debtor will immediately acquire The Yonja Group, A.S.
(hereafter "Yonja") by issuing to Yonja's owner, Yuksel Pisik, 4,000,000 shares
of the Reorganized Debtor's Common Stock.
The CEO and COO of Yonja, Yuksel Pisik and Okan Torun, will become the
Directors and the CEO and COO respectively of the Reorganized Debtor.
Thereafter, the Reorganized Debtor will be managed by Mr. Pisik and Mr. Torun.
The Board of Directors of the Reorganized Debtor shall have all of the powers
granted to any board of directors by the California codes and other applicable
state or federal laws, and it may act pursuant to any and all powers granted to
it under the California Corporation Code including entering into agreements to
transfer, convey, encumber, use, license and lease any and all of its assets,
issue securities, and/or acquire companies or assets for securities or debt. The
Board of Directors of the Reorganized Debtor may also reincorporate the Debtor
14
in another U.S. jurisdiction. Information concerning the background and
qualifications of Mr. Pisik and Mr. Torun is set forth in the Disclosure
Statement.
To implement this Plan, the Board of Directors of the Reorganized Debtor
shall take all steps required by the Code and other state and federal laws and
all steps desirable in furtherance of its business plan and, in order to perform
such implementation in a cost effective manner, the Board of Directors shall
have the authority to vary, alter or revise any of the steps outlined in this
Plan or necessary to its business without shareholder approval so long as such
change does not negatively affect any of the distributions provided for by the
Plan.
After implementing the proposed Plan of Reorganization, the Reorganized
Debtor will have the following share structure: 80,000 Common Shares will be
held, PRO RATA according to amount owed them by the Debtor, by the Class 1
Unsecured Creditors, and 5,000 Common Shares will be held, PRO RATA according to
number of shares they now hold in the Debtor, by the Class 2 Equity Interest
Holders / Shareholders. An additional 4,000,000 Common Shares will be held by
the former owner of Yonja, Yuksel Pisik, paid to him in exchange for his
interests in Yonja. Thus there will be a total of approximately 4,085,000 shares
issued and outstanding in the Reorganized Debtor immediately after the Effective
Date.
In addition, up to 1,000,000 Units, including 1,000,000 Common Shares, will
be held by administrative lenders if these lenders choose to convert their Notes
to Units. In that event, there would be a total of approximately 5,085,000
shares issued and outstanding in the Debtor. Further, there would be 5,000,000
warrants outstanding convertible into an additional 5,000,000 Common Shares.
Conversion of all of these Warrants at the stated exercise price would require
15
an investment totaling $25,000,000 and would increase the total number of shares
issued and outstanding to 10,085,000.
All securities issued to creditors (including administrative claimants) and
equity interest holders under the Plan will be issued exempt from any and all
state and federal securities registration requirements pursuant to Section 1145
of the Bankruptcy Code.
D. THE DIVESTITURE AND MANAGEMENT OF THE SUBSIDIARIES AFTER CONFIRMATION
In support of the Debtor's Plan of Reorganization, and in order to enhance
the Debtor's distribution to its Creditors, all of the Debtor's Subsidiaries
will become independent operating companies, owned by the Debtor's creditors and
its President, Dinesh Perera, and, potentially, by its administrative lenders.
The President of each Subsidiary will be Dinesh Perera, the current President of
the Debtor and the Subsidiaries. Information concerning the background and
qualifications of Mr. Perera is set forth in the Disclosure Statement.
The Debtor will distribute Shares and Units in each of its Subsidiaries as
follows: 80,000 Common Shares will be held, PRO RATA according to amount owed
them by the Debtor, by the Class 1 General Unsecured Creditors, and 100,000
Common Shares will be held by Dinesh Perera, the President of each Subsidiary.
Thus there will be a total of 180,000 shares issued and outstanding in each of
the Subsidiaries.
In addition, up to 1,000,000 Units (including 1,000,000 Common Shares) will
be held by administrative lenders in each Subsidiary if these lenders choose to
convert their Notes to Units. In that event, there would be a total of
approximately 1,180,000 shares issued and outstanding in each of the
Subsidiaries. Further, there would be 5,000,000 warrants outstanding convertible
into an additional 5,000,000 Common Shares. Conversion of all of these Warrants
16
would require an investment totaling $25,000,000 in each Subsidiary in which the
Warrants were exercised.
Any shares held by the Reorganized Debtor in any of the Subsidiaries
following the above distributions will be cancelled and there will be no further
relationship between or among the Debtor and its former Subsidiaries. The
Debtor's Subsidiaries will emerge from the proceedings as independent companies.
The Directors of the Subsidiaries shall take all steps required or
desirable in reorganizing and revitalizing the Subsidiaries, including
incorporating or reincorporating them in another jurisdiction or under another
name.
E. DISBURSING AGENT AND METHOD OF DISTRIBUTION
The Reorganized Debtor shall act as the Disbursing Agent for the purpose of
making all distributions provided for under the Plan which are required to be
made on or immediately following the Effective Date. This Disbursing Agent shall
serve without bond and shall receive no compensation for distribution services
rendered and expenses incurred pursuant to the Plan. The Reorganized Debtor
shall hold any checks paid to Creditors by the Reorganized Debtor which are
returned as undeliverable for a period of six months after the date the check
was first mailed. Any checks not claimed or cashed after six months will revest
in the Reorganized Debtor.
One or more of the Subsidiaries shall act as the Disbursing Agent for the
purpose of making all quarterly distributions from the gross profits on sales of
spices and related products earned by the Subsidiaries. The Subsidiary shall
hold any checks returned as undeliverable for a period of six months after the
date the check was first mailed. Any checks not claimed or cashed after six
months will be held by the Subsidiary. If funds are still owed to creditors
three years after the Effective Date, funds from checks not previously claimed
17
or cashed will be distributed to the remaining creditors. However, if funds are
not owed to creditors three years after the effective date, funds from checks
not previously claimed or cashed will revest in the issuing Subsidiary.
The Reorganized Debtor shall retain the services of a bonded stock
transfer agent to prepare stock certificates and maintain records of stock
ownership in the Reorganized Debtor and in each Subsidiary. Evidence of stock
ownership will be distributed to all Class 1 general unsecured creditors and all
Class 2 equity interest holders, and, if they convert their loans to equity, to
the administrative lenders. All creditors and interest holders will be informed
of the information they must provide to the transfer agent and the procedure
they must follow to obtain their certificates. Any certificates not claimed
after six months will revest in the issuer corporation.
F. RETENTION OF CLAIMS
The following claims shall be retained by the bankruptcy estate
post-confirmation or, if owned by the Debtor's Subsidiaries, shall be vested in
the bankruptcy estate on the Effective Date: (1) all avoidance actions arising
under the Bankruptcy Code or under state law, (2) all claims by the Debtor
and/or its Subsidiaries against officers, directors, or insiders, (3) all
contract, tort or other claims of any kind held by the Debtor and/or its
Subsidiaries against third parties, and (4) all claims for equitable
subordination. Any net proceeds from the prosecution of such claims shall be
deposited into a bank account for the benefit of Unsecured Creditors and shall
be distributed PRO RATA to them.
G. UNITED STATES TRUSTEE QUARTERLY FEES
The Reorganized Debtor shall be responsible for timely payment of fees
incurred pursuant to 28 U.S.C. ss. 1930(a)(6). After confirmation, the
18
Reorganized Debtor shall file with the Court and serve on the United States
Trustee a quarterly financial report regarding all income and disbursements,
including all plan payments, for each quarter (or portion thereof) the case
remains open.
H. OTHER PROVISIONS OF THE PLAN
Executory Contracts and Unexpired Leases
(1) Assumptions
The Debtor will not assume any pre-petition executory contracts or
unexpired leases as obligations under this Plan.
(2) Rejections
Every contract not specifically assumed is hereby rejected. The Order
Confirming the Plan shall constitute an Order approving the rejection of the
lease or contract. If you are a party to a contract or lease to be rejected and
you object to the rejection of your contract or lease, you must file and serve
your objection to the Plan within the deadline for objecting to the confirmation
of the Plan. Any such objections not timely filed and served shall be
disallowed.
THE BAR DATE FOR FILING A PROOF OF CLAIM BASED ON A CLAIM ARISING FROM THE
REJECTION OF A LEASE OR CONTRACT HAS NOT YET BEEN SET BY THE COURT. You will be
notified as soon as a Claims Bar Date is set. Any claim based on the rejection
of a contract or lease will be barred if the proof of claim is not timely filed,
unless the Court later orders otherwise.
I. RETENTION OF JURISDICTION
The Court will retain jurisdiction to the extent provided by law.
19
V. EFFECT OF CONFIRMATION OF THE PLAN
A. DISCHARGE
This Plan provides that upon confirmation of the Plan, the Debtor shall be
discharged of liability for payment of debts incurred before confirmation of the
Plan to the extent specified in 11 U.S.C. ss. 1141. However, the discharge will
not discharge any liability imposed by the Plan.
B. REVESTING OF PROPERTY IN THE DEBTOR
Except as provided elsewhere in the Plan, the confirmation of the Plan
revests all of the property of the estate in the Debtor.
C. MODIFICATION OF PLAN
The Proponent of the Plan may modify the Plan at any time before
confirmation. However, the Court may require a new disclosure statement and/or
new vote on the Plan.
The Proponent of the Plan may also seek to modify the Plan at any time
after confirmation only if (1) the Plan has not been substantially consummated
and (2) the Court authorizes the proposed modifications after notice and a
hearing.
D. POST-CONFIRMATION QUARTERLY REPORTS
Quarterly after entry of the order confirming the Plan, the Plan Proponent
shall file Quarterly Post-Confirmation Reports with the Court and pay Trustee's
fees in accordance with the United States Trustee's Operating and Reporting
Requirements. The report shall be served on the United States Trustee, the
members of the Official Committee of Creditors (if any), and those parties who
have requested special notice.
E. POST-CONFIRMATION CONVERSION/DISMISSAL
A creditor or party in interest may bring a motion to convert or dismiss
the case under ss. 1112(b), after the Plan is confirmed, if there is a default
in performing the Plan. A default shall be deemed to have occurred if the Debtor
20
or any party in interest fails to take any action required of that party under
the Plan or Confirmation Order. If the Court orders the case converted to
Chapter 7 after the Plan is confirmed, then all property that had been property
of the Chapter 11 estate, and that has not been disbursed pursuant to the Plan,
will revest in the Chapter 7, estate. The automatic stay will be reimposed upon
the revested property, but only to the extent that relief from stay was not
previously authorized by the Court during this case.
F. FINAL DECREE
Once the estate has been fully administered as referred to in Bankruptcy
Rule 3022, the Plan Proponent, or such other party as the Court shall designate
in the Plan Confirmation Order, shall file a motion with the Court to obtain a
final decree to close the case.
Dated: October 7, 2010
Spicy Gourmet Organics, Inc.
By: Dinesh Perera
President
Spicy Gourmet Retail, Spicy Gourmet Wholesale, Spicy Gourmet Imports, and Spicy
Gourmet Manufacturing, Co-Proponents
By: Dinesh Perera
Manager
By: Erich Fock
Co-Proponent
SUBMITTED BY:
Daniel C. Masters
Attorney for Spicy Gourmet Organics, Inc.
21
EX-3.1
3
ex3-1.txt
ARTICLES OF INCORPORATION
EXHIBIT 3.1
State of Delaware
Secretary of State
Division of Corporations
Delivered 05:08 PM 12/30/2010
FILED 05:08 PM 12/30/2010
SRV 101252463 - 4920929 FILE
CERTIFICATE OF INCORPORATION
OF
SPICY GOURMET MANUFACTURING, INC.
FIRST: The name of the corporation shall be: Spicy Gourmet Manufacturing,
Inc.
SECOND: The address of its registered office in the State of Delaware is
1521 Concord Pike, Suite 303, in the City of Wilmington, County of New Castle,
19803. The name of its registered agent at such address is A Registered Agent,
Inc.
THIRD: The purpose of the corporation is to engage in any lawful act or
activity for which corporations may be organized under the General Corporation
Law of Delaware.
FOURTH: The corporation shall have the authority to issue one hundred
million shares of common stock with a par value of $0.0001 and twenty million
shares of preferred stock with a par value of $0.0001. The preferred stock may
be issued in series, each of which may have such voting powers and such
designations, preferences and relative, participating, optional or other special
rights, and qualifications, or restrictions thereof, as shall be stated in the
resolutions providing for the issue of such stock adopted by the board of
directors pursuant to authority expressly vested in it by this provision of its
certificate of incorporation.
FIFTH: The name and mailing address of the incorporator is Daniel C.
Masters, Attorney at Law, P. O. Box 66, La Jolla, California 92038.
SIXTH: The Board of Directors is expressly authorized to adopt, amend or
repeal the By-Laws of the corporation.
SEVENTH: No director of the corporation shall be personal liable to the
corporation or its shareholders for monetary damages for any breach of fiduciary
duty by such director as a director. Notwithstanding the foregoing, a director
shall be liable to the extent provided by applicable law, (a) for breach of the
director's duty of loyalty to the corporation or its stockholders, (b) for acts
or omissions not in good faith or which involve intentional misconduct or a
knowing violation of law, (c) pursuant to Section 174 of the Delaware General
Corporation Law, or (d) for any transaction from which the director derived an
improper personal benefit. No amendment to or repeal of this Article Seventh
shall apply to or have any effect on the liability or alleged liability of any
director of the corporation for or with respect to any acts or omissions of such
director occurring prior to such amendment.
IN WITNESS WHEREOF, the undersigned, being the incorporator herein before
named, has executed and signed and acknowledged this certificate of
incorporation this 30th day of December, 2010.
BY: /s/ Daniel C. Masters
---------------------------------------
Incorporator
NAME: Daniel C. Masters
Attorney at Law
EX-3.2
4
ex3-2.txt
BYLAWS
EXHIBIT 3.2
CORPORATE BY-LAWS
OF
SPICY GOURMET MANUFACTURING, INC.
OFFICES
1. The registered office of the corporation shall be in the State of Delaware.
The resident agent in charge thereof shall be appointed by the Board of
Directors. The corporation may also have offices at such other places both
within and without the State of Delaware as the Board of Directors may from time
to time determine or the business of the corporation may require.
CORPORATE SEAL
2. The corporation may transact any and all business without the need for a
corporate seal. If a seal is required by law, the corporation may use a
facsimile where inscribed therein is the name of the corporation, the year of
its incorporation, and the words "Corporate Seal, Delaware". In its discretion,
the Board is permitted to acquire and use a true seal setting forth the
information noted above.
MEETING OF STOCKHOLDERS
3. The annual meeting of stockholders for the election of directors shall be
held on a day during the first six months of each fiscal year, at a time, and at
a place all as set by the Board of Directors. At said meeting the stockholders
shall elect by plurality vote, a Board of Directors, and may transact such other
business as may come before the meeting.
4. Special meetings of the stockholders may be called at any time by the
President, and shall be called by the President or Secretary on the request in
writing of a majority of the directors or at the request in writing of a
majority in voting interest of stockholders entitled to vote.
5. All meetings of the stockholders for the elections of directors shall be held
at the office of the corporation in the State of Delaware, or at such other
place as may be fixed by the Board of Directors, provided that at least ten
days' notice be given to the stockholders of the place so fixed. All other
meetings of the stockholders shall be held at such place or places, within or
without the State of Delaware, as may from time to time be fixed in the notices
or waivers of notice thereof.
6. Stockholders of the corporation entitled to vote shall be such persons as are
registered on the stock transfer books of the corporation as owners of stock.
The Board of Directors may set a record date for annual meetings, but such
record date may not be more than 45 days prior to the annual meeting.
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7. A complete list of stockholders entitled to vote, arranged in alphabetical
order, shall be prepared by the Secretary or Transfer Agent and shall be open to
the examination of any stockholder at the place of election during the whole
time of the election.
8. Each stockholder entitled to vote shall, at every meeting of the
stockholders, be entitled to one vote for each share held. Each stockholder
entitled to vote may vote in person or by proxy signed by the stockholder, but
no proxy shall be voted on or after three years from its date, unless it
provides for a longer period. Such right to vote shall be subject to the right
of the Board of Directors to fix a record date for stockholders as provided by
these By-Laws.
9. The holders of 30% of the stock issued and outstanding and entitled to vote
at a meeting of the stockholders, present in person or represented by proxy,
shall constitute a quorum at all meetings of the stockholders for the
transaction of business except as otherwise provided by statute or by the
Certificate of Incorporation. If such quorum shall not be present or represented
at any meeting of the stockholders, the stockholders entitled to vote at the
meeting, present in person or represented by proxy, shall have the power to
adjourn the meeting from time to time, without notice other than announcement at
the meeting, until a quorum shall be present or represented. At such adjourned
meeting at which a quorum shall be present or represented, any business may be
transacted which might have been transacted at the meeting as originally
notified. If the adjournment is for more than 30 days, or if after the
adjournment a new record date is fixed for the adjourned meeting, a notice of
the adjourned meeting shall be given to each stockholder of record entitled to
vote at the meeting.
10. When a quorum is present at any meeting, the vote of the holders of a
majority of the stock having voting power, present in person or represented by
proxy, shall decide any question properly brought before such meeting, unless
the question is one which by express provision of the statutes of the State of
Delaware or of the Certificate of Incorporation, a different vote is required,
in which case such express provision shall govern and control the decision of
such question.
11. Notice of all meetings shall be mailed by the Secretary to each stockholder
of record entitled to vote at his last known post office address, for annual
meetings fifteen days and for special meetings ten days prior thereto.
12. Business transacted at any special meeting of stockholders shall be limited
to the purposes stated in the notice.
13. Unless otherwise provided in the Certificate of Incorporation, any action
required to be taken at any annual or special meeting of stockholders of the
corporation, or any action which may be taken at any annual or special meeting
of such stockholders, may be taken without a meeting, without prior notice and
without a vote, if consent in writing, setting forth the action so taken, shall
be signed by the holders of outstanding stock having not less than the minimum
number of voters that would be necessary to authorize or take such action at a.
2
meeting at which all shares entitled to vote thereon were present and voted.
Prompt notice of the taking of the corporate action without a meeting by less
than unanimous written consent, shall be given to those stockholders who have
not consented in writing.
DIRECTORS
14. The property and business of the corporation shall be managed and controlled
by the Board of Directors.
15. The directors shall hold office until the next annual election and until
their successors are elected and qualified. Directors shall be elected by the
stockholders, except that if there be any vacancies on the Board of Directors by
reason of death, resignation, or otherwise, or if there be any newly created
directorships resulting from any increase in the number of directors, such
vacancies or newly created directorships may be filled for the unexpired term by
a majority of the directors then in office, though less than a quorum.
POWERS OF DIRECTORS
16. The Board of Directors shall have all such powers as may be exercised by
directors of a Delaware corporation, subject to the provisions of the statutes
of Delaware, the Certificate of Incorporation, and the By-Laws.
MEETINGS OF DIRECTORS
17. After each annual election of directors, the newly elected directors may
meet for the purpose of organization, the election of officers, and the
transaction of other business, at such time and place as shall be fixed by the
stockholders at the annual meeting, and, if a majority of the directors be
present at such place and time, no prior notice of such meeting will be required
to be given to the directors. The place and time of such meeting may also be
fixed by written consent of the directors.
18. Regular meetings of the Board of Directors may be held without notice at
such time and at such place as shall from time to time be determined by the
Board.
19. Special meetings of the directors may be called by the president on two
days' notice in writing or on one days notice by telegram to each director and
shall be called by the president in like manner on the written request of two
directors.
20. Special meetings of the directors may be held within or without the State of
Delaware at such place as is indicated in the notice or waiver of notice
thereof.
21. A majority of the directors in office at the time of any regular or special
meeting shall constitute a quorum.
3
22. Any action required or permitted to be taken at any meeting of the Board of
Directors may be taken without a meeting, if all members of the Board consent
thereto in writing, and the writing or writings are filed with the minutes of
proceedings of the Board.
23. Members of the Board of Directors may participate in a meeting of the Board
of Directors by means of a conference telephone or similar communications
equipment by means of which all persons participating in the meeting may hear
one another, and such participation in a meeting shall constitute presence in
person at the meeting.
COMMITTEES
24. The Board of Directors may, by resolution, create committees from time to
time, which committees shall have and may exercise all the powers and authority
of the Board of Directors to manage the business and affairs of the corporation.
However, the committees shall not have the power to amend the Certificate of
Incorporation, adopt an agreement of merger or consolidation, recommend to the
stockholders the sale, lease or exchange of all or substantially all of the
corporation's property and assets, recommend to the stockholders a dissolution
of the corporation or a revocation of a dissolution, amend the By-Laws of the
corporation; and, unless a resolution or the Certificate of Incorporation
expressly so provides, no such committee shall have the power to declare a
dividend or authorize the issuance of stock.
INDEMNIFICATION
25. The personal liability of the directors of the corporation is hereby
eliminated to the fullest extent permitted by the provisions of paragraph (7) of
subsection (b) of Section 102 of the General Corporation Law of the State of
Delaware, as the same may be amended and supplemented.
OFFICERS OF THE CORPORATION
26. The officers of the corporation shall be a president, a secretary, a
treasurer, and such other officers as may from time to time be chosen by the
Board of Directors. All offices may be held by the same person.
27. The officers of the corporation shall hold office until their successors are
chosen and qualify in their stead. Any officer chosen or appointed by the Board
of Directors may be removed either with or without cause at any time by the
affirmative vote of a majority of the whole Board of Directors. If the office of
any officer or officers becomes vacant for any reason, the vacancy shall be
filled by the affirmative vote of a majority of the whole Board of Directors.
28. In case of the absence or disability of any officer of the corporation, or
for any other reason deemed sufficient by a majority of the Board of Directors,
the duties of that officer may be delegated by the Board of Directors to any
other officer or to any director.
4
INDEMNIFICATION
29. The corporation shall, to the fullest extent permitted by the provisions of
Section 145 of the General Corporation Law of the State of Delaware, as the same
may be amended and supplemented, indemnify any and all persons whom it shall
have power to indemnify under said section from and against any and all of the
expenses, liabilities, or other matters referred to in or covered by said
section. The indemnification provided for herein shall not be deemed exclusive
of any other rights to which those indemnified may be entitled under any
agreement, vote of stockholders or disinterested directors, or otherwise. Such
indemnification shall apply both as to action in his official capacity of one
holding office, and shall continue as to a person who has ceased to be a
director, officer, employee, or agent and shall inure to the benefit of the
heirs, executors, and administrators of such a person."
SECRETARY
30. The secretary shall attend all meetings of the corporation, the Board of
Directors, and its committees. He shall act as clerk thereof and shall record
all of the proceedings of such meetings in a book kept for that purpose. He
shall have custody of the corporate seal of the corporation and shall have
authority to affix the seal to any instrument requiring it and when so affixed,
it may be attested by his signature. He shall give proper notice of meetings of
stockholders and directors and shall perform other such duties as shall be
assigned to him by the president or the Board of Directors.
TREASURER
31. The treasurer shall have custody of the funds and securities of the
corporation and shall keep full and accurate accounts of receipts and
disbursements in books belonging to the corporation. He shall deposit all monies
and other valuable effects in the name and to the credit of the corporation in
such depositories as may be designated by the Board of Directors.
32. The treasurer shall disburse such funds of the corporation as may be ordered
by the Board or the president, taking proper vouchers for such disbursements,
and shall render to the president and directors, whenever they may require it,
an account of all his transactions as treasurer and of the financial condition
of the corporation, and at the regular meeting of the Board next preceding the
annual members meeting, a like report for the preceding year.
33. The treasurer shall keep an account of stock registered and transferred in
such manner subject to such regulations as the Board of Directors may prescribe.
34. The treasurer shall give the corporation a bond if required by the Board of
Directors in such sum and with security satisfactory to the Board of Directors
for the faithful performance of the duties of his office and the restoration to
the corporation, in the case of his death, resignation, or removal from office,
of all books, paper, vouchers, money and other property of whatever kind in his
5
possession, belonging to the corporation. He shall perform such other duties as
the Board of Directors or executive committee may from time to time prescribe or
require.
PRESIDENT
35. The president shall be the chief executive officer of the corporation. He
shall preside at all meetings of the stockholders and the Board of Directors,
and shall have general and active management of the business of the corporation,
and shall see that all orders and resolutions of the Board of Directors are
carried into effect.
36. The president shall execute bonds, mortgages, and other contracts requiring
a seal, under the seal of the corporation, except where required or permitted by
law to be otherwise signed and executed, and except where the signing and
execution thereof shall be expressly delegated by the Board of Directors to some
other officer or agent of the corporation.
STOCKS
37. Every holder of stock in the corporation shall be entitled to have a
certificate, signed by, or in the name of the corporation by, the president or
secretary of the corporation, certifying the number of shares owned by him in
the corporation. Certificates may be issued for partly paid shares, and in such
case upon the face or back of the certificates issued to represent any such
partly paid shares, the total amount of the consideration to be paid therefore,
and the amount paid thereon, shall be specified.
38. Any or all of the signatures on the certificates may be facsimile.
39. The Board of Directors may direct a new certificate or certificates to be
issued in place of any certificate or certificates theretofore issued by the
corporation alleged to have been lost, stolen, or destroyed, upon the making of
an affidavit of that fact by the person claiming their certificate of stock to
be lost, stolen or destroyed. The Board of Directors may, in its discretion and
as a condition precedent to the issuance thereof; require the owner of such
lost, stolen, or destroyed certificate or certificates to give the corporation a
bond in such sum as it may direct as indemnity against any claim that may be
made against the corporation with respect to the certificate alleged to have
been lost, stolen, or destroyed.
CHECKS
40. All checks, drafts, or orders for the payment of money shall be signed by
the treasurer or by such other officer or officers as the Board of Directors may
from time to time designate. No check shall be signed in blank.
6
BOOKS AND RECORDS
41 The Books, accounts, and records of the corporation, except as otherwise
required by the laws of the State of Delaware, may be kept within or without the
State of Delaware, at such place or places as may from time to time be
designated by the By-Laws or by the resolutions of the directors.
NOTICES
42 Notice required to be given under the provisions of these By-Laws to any
director, officer or stockholder, shall not be construed to mean personal
notice, but may be given in writing by depositing the same in a post office or
letter box, in a post-paid sealed wrapper, addressed to such stockholder,
officer, or director at such address as appears on the books of the corporation,
and such notice shall be deemed to be given at the time when the same shall thus
be mailed. Any stockholder, officer, or director, may waive, in writing, any
notice required to be given under these By-Laws, whether before or after the
time stated therein.
DIVIDENDS
43. Dividends upon the capital stock of the corporation, subject to the
Certificate of incorporation, may be declared by the Board of Directors at any
regular or special meeting, pursuant to law. Dividends may be paid in cash, in
property, or in shares of the capital stock of the corporation, subject to the
provisions of the Certificate of Incorporation.
44. Before payment of any dividend, there may be set aside out of any funds of
the corporation available for dividends such sum or sums as the directors from
time to time, in their absolute discretion, think proper as a reserve or
reserves to meet contingencies or for equalizing dividends, or for repairing or
maintaining any property of the corporation, or for such other purposes as the
directors shall think conducive to the best interest of the corporation. The
directors may modify or abolish any such reserve in the manner by which it was
created.
FISCAL YEAR
45. The fiscal year of the corporation shall be determined by the Board of
Directors.
AMENDMENT OF BY-LAWS
46. These By-Laws may be amended, altered, repealed, or added to at any regular
meeting of the stockholders or of the Board of Directors, or at any special
meeting called for that purpose, by affirmative vote of a majority of the
stockholders entitled to vote, or by affirmative vote of a majority of the whole
board, as the case may be.
7
47. Any and all disputes and controversies by and between the shareholders or
the directors arising out of or with respect to the business of or affecting the
affairs of the corporation, which disputes and controversies cannot be resolved
under the terms of the corporate By-Laws or Certificate of Incorporation,
because of a tie vote or deadlock between the directors and shareholders shall
be settled by arbitration in the following manner. Each side of the dispute
shall be entitled to name one arbitrator and both arbitrators so named shall
together agree upon a third arbitrator, with the findings of the arbitration
panel to be binding upon all parties to the dispute. Unless otherwise mutually
agreed by the parties the arbitration shall take place in accordance with and
subject to the provisions of the Delaware Uniform Arbitration Act., 10 Del. C.
"5701 et.seq.
8
EX-4.1
5
ex4-1.txt
FORM OF "A" WARRANT AGREEMENT
EXHIBIT 4.1
SPICY GOURMET MANUFACTURING, INC.
(A DELAWARE CORPORATION)
"A" WARRANT CERTIFICATE
WARRANT NUMBER _______ NUMBER OF WARRANTS: ______________
CLASS "A" WARRANT CERTIFICATE FOR THE PURCHASE OF SHARES OF THE COMMON STOCK
OF SPICY GOURMET MANUFACTURING, INC. THESE SECURITIES WERE ISSUED EXEMPT
FROM REGISTRATION UNDER TITLE 11, SECTION 1145, OF THE U.S. CODE.
FOR VALUE RECEIVED, Spicy Gourmet Manufacturing, Inc. (the "Company"), a
Delaware corporation, hereby certifies that _________________________________
the registered holder hereof, or registered assigns, (the "Holder") subject to
the terms and conditions hereinafter set forth, and at any time during the
period beginning on the date hereof and ending on November 19, 2015, is entitled
to:
1. Purchase shares of the Common Stock of the Company for each of the within
Warrants exercised at a price of $3.00 per share of such Common Stock (the
"Warrant Price") or
2. Purchase shares of the Common Stock of the Company for each of the within
Warrants exercised at such price as may be determined by vote of the Board
of Directors, provided that such price is not higher than $3.00 per share
of such Common Stock.
3. Convert these Warrants, in whole or in part, into that number of shares of
Common Stock of the Company determined by dividing (a) the aggregate fair
market value, as of the date of conversion, of the shares of Common Stock
of the Company which would be issuable upon exercise of the Warrants to be
converted minus the aggregate Warrant Price of the shares of Common Stock
of the Company which would be issuable upon exercise of the Warrants by (b)
the said fair market value of one share of the Common Stock of the Company.
For the purposes of conversion of these Warrants, fair market value shall
be the value determined in accordance with the following provisions:
a. If the Common Stock of the Company is not at the time listed or
admitted on any stock exchange but is traded on the Nasdaq National
Market System or SmallCap Market or is quoted on the OTC Bulletin
Board, the fair market value shall be the closing selling price per
share of such common stock on the date in question, as such price is
reported by the National Association of Securities Dealers through, in
order of preference, the Nasdaq National Market System, the SmallCap
Market, or the OTC Bulletin Board, or any successor system. If there
is not a closing selling price for such common stock on the date in
question, then the fair market value shall be the closing selling
price on the last preceding date for which such a quotation exists.
b. If the common stock is at the time listed or admitted to trading on
any stock exchange, the fair market value shall be the closing selling
price per share of such common stock on the date in question on the
stock exchange determined by the Board of Directors of the Company to
be the primary market for such common stock, as such price is
officially quoted in the composite tape of transactions on the
exchange. If there is no closing selling price for such common stock
on the date in question then the fair market value shall be the
closing selling price on the last preceding date for which such a
quotation exists.
c. If the common stock is at the time neither listed nor admitted to
trading on any exchange nor traded on the Nasdaq National Market
System nor the SmallCap Market, nor traded on the OTC Bulletin board,
then such fair market value shall be determined by the Board of
Directors of the Company after taking into account such factors as the
Board of Directors of the Company shall deem appropriate.
4. Upon exercise or conversion of these Warrants, the registered Holder hereof
shall surrender to the stock transfer agent of the Company this Warrant
Certificate together with a letter identifying the number of warrant shares
1
being exercised or converted, the address to which the share certificate
should be sent, and a certified check or bank draft payable to the order of
the Company.
5. In the case of exercise or conversion of the Warrants, no fractional shares
of the Common Stock of the Company shall be issued.
6. The Company covenants and agrees that shares of Common Stock which may be
delivered upon the exercise or conversion of this Warrant will, upon
delivery, be free from all taxes, liens and charges with respect to the
purchase thereof hereunder.
7. This Warrant shall not be exercised or converted by Holder in any state
where such exercise or conversion would be unlawful.
8. The Company agrees at all times to reserve or hold available a sufficient
number of shares of its Common Stock to cover the number of shares issuable
upon the exercise or conversion of this and all other Warrants of like
tenor then outstanding.
9. This Warrant does not entitle the Holder to any voting rights or other
rights as a shareholder of the Company, or to any other rights whatsoever
except the rights herein set forth, and no dividend shall be payable or
accrue in respect of this Warrant or the interest represented hereby, or
the shares which may be acquired hereunder, until or unless, and except to
the extent that this Warrant shall be exercised or converted, and the
Common Stock which may be acquired upon exercise or conversion thereof
shall become deliverable.
10. The Warrants are not redeemable nor cancellable by the Company.
11. This Warrant is exchangeable upon the surrender hereof by the Holder to the
Company for new Warrants of like tenor and date representing in the
aggregate the right to acquire the number of shares which, may be acquired
hereunder, each of such new Warrants to represent the right to acquire such
number of shares as may be designated by the registered Holder at the time
of such surrender.
12. The Company may deem and treat the Holder at any time as the absolute owner
hereof for all purposes and shall not be affected by any notice to the
contrary.
13. Notwithstanding any other provision governing the Warrants, if as of the
date of exercise, the Company has registered its Common Stock under Section
12 of the Securities Exchange Act of 1934, as amended, the Holder may not
exercise these Warrants to the extent that immediately following such
exercise the Holder would beneficially own more than 4.99% of the
outstanding Common Stock of the Company. For this purpose, a representation
of the Holder that following such exercise it would not beneficially own
more than 4.99% of the outstanding Common Stock of the Company shall be
conclusive and binding upon the Company.
14. The number of shares of Common Stock which may be acquired upon exercise or
conversion of these Warrants and the Warrant Price shall be subject to
adjustment from time to time as follows:
a. If the Company shall at any time subdivide its outstanding shares of
Common Stock by recapitalization, reclassification or split-up
thereof, or if the Company shall declare a stock dividend or
distribute shares of Common Stock to its stockholders, the number of
shares of Common Stock which may be acquired upon exercise of this
Warrant immediately prior to such subdivision shall be proportionately
increased in each instance, and if the Company shall at any time
combine the outstanding shares of Common Stock by recapitalization,
reclassification or combination thereof the number of shares of Common
Stock which may be acquired upon exercise of this Warrant immediately
prior to such combination shall be proportionately decreased in each
instance.
b. If the Company shall distribute to all of the holders of its shares of
Common Stock any security (except as provided in the preceding
paragraph) or other assets (other than a distribution made as a
dividend payable out of earnings or out of any earned surplus legally
available for dividends under the laws of the jurisdiction of
incorporation of the Company), the Board of Directors shall be
required to make such equitable adjustment in the Warrant Price in
2
effect immediately prior to the record date of such distribution as
may be necessary to preserve to the Holder of this Warrant rights
substantially proportionate to those enjoyed hereunder by such Holder
immediately prior to the happening of such distribution. Any such
adjustment shall become effective as of the day following the record
date for such distribution.
c. Whenever the number of shares of Common Stock which may be acquired
upon the exercise of this Warrant is required to be adjusted as
provided herein, the Warrant Price shall be adjusted (to the nearest
cent) in each instance by multiplying such Warrant Price immediately
prior to such adjustment by a fraction the numerator of which shall be
the number of shares of Common Stock which may be acquired hereunder
upon the exercise of the Warrants immediately prior to such
adjustment, and the denominator of which shall be the number of shares
of Common Stock which may be acquired hereunder immediately
thereafter.
d. In case of any reclassification of the outstanding shares of Common
Stock, other than a change covered by paragraph (14a) above or which
solely affects the par value of such shares of Common Stock, or in the
case of any merger or consolidation of the Company with or into
another corporation (other that a consolidation merger in which the
Company is the continuing corporation and which does not result in any
reclassification or capital reorganization of the outstanding shares
of Common Stock), or in the case of any sale or conveyance to another
corporation of the property of the Company as an entirety or
substantially as an entirety in connection with which the Company is
dissolved, the Holder of this Warrant shall have the right thereafter
(until the expirations of the respective rights of exercise of the
Warrant) to receive upon the exercise thereof using the same aggregate
Warrant Price applicable hereunder immediately prior to such event,
the kind and amount of shares of stock or other securities or property
receivable upon such reclassification, capital reorganization, merger
or consolidation, or upon the dissolution following any sale or other
transfer, which a holder of the number of shares of Common Stock of
the Company would obtain upon exercise of the Warrants immediately
prior to such event; and if any classification also results in a
change in shares of Common Stock covered by paragraph (14a) above,
then such adjustment shall be made pursuant to both paragraph (14a)
above and this paragraph (14d). The provisions of this paragraph (14d)
shall similarly apply to successive reclassifications, or capital
reorganizations, mergers or consolidations, sales or other transfers.
e. In case of the dissolution, liquidation or winding-up of the Company,
all rights under any of the Warrants not theretofore exercised nor
converted nor expired by their terms shall terminate on a date fixed
by the Company, such date so fixed to be not earlier than the date of
the commencement of the proceedings for such dissolution, liquidation
or winding-up and not later than thirty (30) days after such
commencement date. Notice of the termination of purchase rights shall
be given to the registered Holder of this Warrant as the same shall
appear on the books of the Company, by certified or registered mail at
least thirty (30) days prior to such termination date.
f. In case the Company shall, at any time prior to the Expiration Date of
the Warrants, and prior to the exercise or conversion thereof, offer
to the holders of its Common Stock any right to subscribe for
additional shares of any class of the Company, then the Company shall
give written notice thereof to the registered Holder of this Warrant
not less than thirty (30) days prior to the date on which the books of
the Company are closed or a record date fixed for the determination of
stockholders entitled to such subscription rights. Such notice shall
specify the date as to which the books shall be closed or record date
be fixed with respect to such offer or subscription, and the right of
the registered Holders hereof to participate in such offer or
subscription shall terminate if this Warrant shall not be exercised or
converted on or before the date of such closing of the books or such
record date.
IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by its
duly authorized officer effective this day, ______________________.
By ___________________________
Its Secretary
3
EX-4.2
6
ex4-2.txt
FORM OF "B" WARRANT AGREEMENT
EXHIBIT 4.2
SPICY GOURMET MANUFACTURING, INC.
(A DELAWARE CORPORATION)
"B" WARRANT CERTIFICATE
WARRANT NUMBER _______ NUMBER OF WARRANTS: ______________
CLASS "A" WARRANT CERTIFICATE FOR THE PURCHASE OF SHARES OF THE COMMON STOCK
OF SPICY GOURMET MANUFACTURING, INC. THESE SECURITIES WERE ISSUED EXEMPT
FROM REGISTRATION UNDER TITLE 11, SECTION 1145, OF THE U.S. CODE.
FOR VALUE RECEIVED, Spicy Gourmet Manufacturing, Inc. (the "Company"), a
Delaware corporation, hereby certifies that _________________________________
the registered holder hereof, or registered assigns, (the "Holder") subject to
the terms and conditions hereinafter set forth, and at any time during the
period beginning on the date hereof and ending on November 19, 2015, is entitled
to:
1. Purchase shares of the Common Stock of the Company for each of the within
Warrants exercised at a price of $4.00 per share of such Common Stock (the
"Warrant Price") or
2. Purchase shares of the Common Stock of the Company for each of the within
Warrants exercised at such price as may be determined by vote of the Board
of Directors, provided that such price is not higher than $4.00 per share
of such Common Stock.
3. Convert these Warrants, in whole or in part, into that number of shares of
Common Stock of the Company determined by dividing (a) the aggregate fair
market value, as of the date of conversion, of the shares of Common Stock
of the Company which would be issuable upon exercise of the Warrants to be
converted minus the aggregate Warrant Price of the shares of Common Stock
of the Company which would be issuable upon exercise of the Warrants by (b)
the said fair market value of one share of the Common Stock of the Company.
For the purposes of conversion of these Warrants, fair market value shall
be the value determined in accordance with the following provisions:
a. If the Common Stock of the Company is not at the time listed or
admitted on any stock exchange but is traded on the Nasdaq National
Market System or SmallCap Market or is quoted on the OTC Bulletin
Board, the fair market value shall be the closing selling price per
share of such common stock on the date in question, as such price is
reported by the National Association of Securities Dealers through, in
order of preference, the Nasdaq National Market System, the SmallCap
Market, or the OTC Bulletin Board, or any successor system. If there
is not a closing selling price for such common stock on the date in
question, then the fair market value shall be the closing selling
price on the last preceding date for which such a quotation exists.
b. If the common stock is at the time listed or admitted to trading on
any stock exchange, the fair market value shall be the closing selling
price per share of such common stock on the date in question on the
stock exchange determined by the Board of Directors of the Company to
be the primary market for such common stock, as such price is
officially quoted in the composite tape of transactions on the
exchange. If there is no closing selling price for such common stock
on the date in question then the fair market value shall be the
closing selling price on the last preceding date for which such a
quotation exists.
c. If the common stock is at the time neither listed nor admitted to
trading on any exchange nor traded on the Nasdaq National Market
System nor the SmallCap Market, nor traded on the OTC Bulletin board,
then such fair market value shall be determined by the Board of
Directors of the Company after taking into account such factors as the
Board of Directors of the Company shall deem appropriate.
4. Upon exercise or conversion of these Warrants, the registered Holder hereof
shall surrender to the stock transfer agent of the Company this Warrant
Certificate together with a letter identifying the number of warrant shares
1
being exercised or converted, the address to which the share certificate
should be sent, and a certified check or bank draft payable to the order of
the Company.
5. In the case of exercise or conversion of the Warrants, no fractional shares
of the Common Stock of the Company shall be issued.
6. The Company covenants and agrees that shares of Common Stock which may be
delivered upon the exercise or conversion of this Warrant will, upon
delivery, be free from all taxes, liens and charges with respect to the
purchase thereof hereunder.
7. This Warrant shall not be exercised or converted by Holder in any state
where such exercise or conversion would be unlawful.
8. The Company agrees at all times to reserve or hold available a sufficient
number of shares of its Common Stock to cover the number of shares issuable
upon the exercise or conversion of this and all other Warrants of like
tenor then outstanding.
9. This Warrant does not entitle the Holder to any voting rights or other
rights as a shareholder of the Company, or to any other rights whatsoever
except the rights herein set forth, and no dividend shall be payable or
accrue in respect of this Warrant or the interest represented hereby, or
the shares which may be acquired hereunder, until or unless, and except to
the extent that this Warrant shall be exercised or converted, and the
Common Stock which may be acquired upon exercise or conversion thereof
shall become deliverable.
10. The Warrants are not redeemable nor cancellable by the Company.
11. This Warrant is exchangeable upon the surrender hereof by the Holder to the
Company for new Warrants of like tenor and date representing in the
aggregate the right to acquire the number of shares which, may be acquired
hereunder, each of such new Warrants to represent the right to acquire such
number of shares as may be designated by the registered Holder at the time
of such surrender.
12. The Company may deem and treat the Holder at any time as the absolute owner
hereof for all purposes and shall not be affected by any notice to the
contrary.
13. Notwithstanding any other provision governing the Warrants, if as of the
date of exercise, the Company has registered its Common Stock under Section
12 of the Securities Exchange Act of 1934, as amended, the Holder may not
exercise these Warrants to the extent that immediately following such
exercise the Holder would beneficially own more than 4.99% of the
outstanding Common Stock of the Company. For this purpose, a representation
of the Holder that following such exercise it would not beneficially own
more than 4.99% of the outstanding Common Stock of the Company shall be
conclusive and binding upon the Company.
14. The number of shares of Common Stock which may be acquired upon exercise or
conversion of these Warrants and the Warrant Price shall be subject to
adjustment from time to time as follows:
a. If the Company shall at any time subdivide its outstanding shares of
Common Stock by recapitalization, reclassification or split-up
thereof, or if the Company shall declare a stock dividend or
distribute shares of Common Stock to its stockholders, the number of
shares of Common Stock which may be acquired upon exercise of this
Warrant immediately prior to such subdivision shall be proportionately
increased in each instance, and if the Company shall at any time
combine the outstanding shares of Common Stock by recapitalization,
reclassification or combination thereof the number of shares of Common
Stock which may be acquired upon exercise of this Warrant immediately
prior to such combination shall be proportionately decreased in each
instance.
b. If the Company shall distribute to all of the holders of its shares of
Common Stock any security (except as provided in the preceding
paragraph) or other assets (other than a distribution made as a
dividend payable out of earnings or out of any earned surplus legally
available for dividends under the laws of the jurisdiction of
incorporation of the Company), the Board of Directors shall be
required to make such equitable adjustment in the Warrant Price in
2
effect immediately prior to the record date of such distribution as
may be necessary to preserve to the Holder of this Warrant rights
substantially proportionate to those enjoyed hereunder by such Holder
immediately prior to the happening of such distribution. Any such
adjustment shall become effective as of the day following the record
date for such distribution.
c. Whenever the number of shares of Common Stock which may be acquired
upon the exercise of this Warrant is required to be adjusted as
provided herein, the Warrant Price shall be adjusted (to the nearest
cent) in each instance by multiplying such Warrant Price immediately
prior to such adjustment by a fraction the numerator of which shall be
the number of shares of Common Stock which may be acquired hereunder
upon the exercise of the Warrants immediately prior to such
adjustment, and the denominator of which shall be the number of shares
of Common Stock which may be acquired hereunder immediately
thereafter.
d. In case of any reclassification of the outstanding shares of Common
Stock, other than a change covered by paragraph (14a) above or which
solely affects the par value of such shares of Common Stock, or in the
case of any merger or consolidation of the Company with or into
another corporation (other that a consolidation merger in which the
Company is the continuing corporation and which does not result in any
reclassification or capital reorganization of the outstanding shares
of Common Stock), or in the case of any sale or conveyance to another
corporation of the property of the Company as an entirety or
substantially as an entirety in connection with which the Company is
dissolved, the Holder of this Warrant shall have the right thereafter
(until the expirations of the respective rights of exercise of the
Warrant) to receive upon the exercise thereof using the same aggregate
Warrant Price applicable hereunder immediately prior to such event,
the kind and amount of shares of stock or other securities or property
receivable upon such reclassification, capital reorganization, merger
or consolidation, or upon the dissolution following any sale or other
transfer, which a holder of the number of shares of Common Stock of
the Company would obtain upon exercise of the Warrants immediately
prior to such event; and if any classification also results in a
change in shares of Common Stock covered by paragraph (14a) above,
then such adjustment shall be made pursuant to both paragraph (14a)
above and this paragraph (14d). The provisions of this paragraph (14d)
shall similarly apply to successive reclassifications, or capital
reorganizations, mergers or consolidations, sales or other transfers.
e. In case of the dissolution, liquidation or winding-up of the Company,
all rights under any of the Warrants not theretofore exercised nor
converted nor expired by their terms shall terminate on a date fixed
by the Company, such date so fixed to be not earlier than the date of
the commencement of the proceedings for such dissolution, liquidation
or winding-up and not later than thirty (30) days after such
commencement date. Notice of the termination of purchase rights shall
be given to the registered Holder of this Warrant as the same shall
appear on the books of the Company, by certified or registered mail at
least thirty (30) days prior to such termination date.
f. In case the Company shall, at any time prior to the Expiration Date of
the Warrants, and prior to the exercise or conversion thereof, offer
to the holders of its Common Stock any right to subscribe for
additional shares of any class of the Company, then the Company shall
give written notice thereof to the registered Holder of this Warrant
not less than thirty (30) days prior to the date on which the books of
the Company are closed or a record date fixed for the determination of
stockholders entitled to such subscription rights. Such notice shall
specify the date as to which the books shall be closed or record date
be fixed with respect to such offer or subscription, and the right of
the registered Holders hereof to participate in such offer or
subscription shall terminate if this Warrant shall not be exercised or
converted on or before the date of such closing of the books or such
record date.
IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by its
duly authorized officer effective this day, ______________________.
By ___________________________
Its Secretary
3
EX-4.3
7
ex4-3.txt
FORM OF "C" WARRANT AGREEMENT
EXHIBIT 4.3
SPICY GOURMET MANUFACTURING, INC.
(A DELAWARE CORPORATION)
"C" WARRANT CERTIFICATE
WARRANT NUMBER _______ NUMBER OF WARRANTS: ______________
CLASS "A" WARRANT CERTIFICATE FOR THE PURCHASE OF SHARES OF THE COMMON STOCK
OF SPICY GOURMET MANUFACTURING, INC. THESE SECURITIES WERE ISSUED EXEMPT
FROM REGISTRATION UNDER TITLE 11, SECTION 1145, OF THE U.S. CODE.
FOR VALUE RECEIVED, Spicy Gourmet Manufacturing, Inc. (the "Company"), a
Delaware corporation, hereby certifies that _________________________________
the registered holder hereof, or registered assigns, (the "Holder") subject to
the terms and conditions hereinafter set forth, and at any time during the
period beginning on the date hereof and ending on November 19, 2015, is entitled
to:
1. Purchase shares of the Common Stock of the Company for each of the within
Warrants exercised at a price of $5.00 per share of such Common Stock (the
"Warrant Price") or
2. Purchase shares of the Common Stock of the Company for each of the within
Warrants exercised at such price as may be determined by vote of the Board
of Directors, provided that such price is not higher than $5.00 per share
of such Common Stock.
3. Convert these Warrants, in whole or in part, into that number of shares of
Common Stock of the Company determined by dividing (a) the aggregate fair
market value, as of the date of conversion, of the shares of Common Stock
of the Company which would be issuable upon exercise of the Warrants to be
converted minus the aggregate Warrant Price of the shares of Common Stock
of the Company which would be issuable upon exercise of the Warrants by (b)
the said fair market value of one share of the Common Stock of the Company.
For the purposes of conversion of these Warrants, fair market value shall
be the value determined in accordance with the following provisions:
a. If the Common Stock of the Company is not at the time listed or
admitted on any stock exchange but is traded on the Nasdaq National
Market System or SmallCap Market or is quoted on the OTC Bulletin
Board, the fair market value shall be the closing selling price per
share of such common stock on the date in question, as such price is
reported by the National Association of Securities Dealers through, in
order of preference, the Nasdaq National Market System, the SmallCap
Market, or the OTC Bulletin Board, or any successor system. If there
is not a closing selling price for such common stock on the date in
question, then the fair market value shall be the closing selling
price on the last preceding date for which such a quotation exists.
b. If the common stock is at the time listed or admitted to trading on
any stock exchange, the fair market value shall be the closing selling
price per share of such common stock on the date in question on the
stock exchange determined by the Board of Directors of the Company to
be the primary market for such common stock, as such price is
officially quoted in the composite tape of transactions on the
exchange. If there is no closing selling price for such common stock
on the date in question then the fair market value shall be the
closing selling price on the last preceding date for which such a
quotation exists.
c. If the common stock is at the time neither listed nor admitted to
trading on any exchange nor traded on the Nasdaq National Market
System nor the SmallCap Market, nor traded on the OTC Bulletin board,
then such fair market value shall be determined by the Board of
Directors of the Company after taking into account such factors as the
Board of Directors of the Company shall deem appropriate.
4. Upon exercise or conversion of these Warrants, the registered Holder hereof
shall surrender to the stock transfer agent of the Company this Warrant
Certificate together with a letter identifying the number of warrant shares
1
being exercised or converted, the address to which the share certificate
should be sent, and a certified check or bank draft payable to the order of
the Company.
5. In the case of exercise or conversion of the Warrants, no fractional shares
of the Common Stock of the Company shall be issued.
6. The Company covenants and agrees that shares of Common Stock which may be
delivered upon the exercise or conversion of this Warrant will, upon
delivery, be free from all taxes, liens and charges with respect to the
purchase thereof hereunder.
7. This Warrant shall not be exercised or converted by Holder in any state
where such exercise or conversion would be unlawful.
8. The Company agrees at all times to reserve or hold available a sufficient
number of shares of its Common Stock to cover the number of shares issuable
upon the exercise or conversion of this and all other Warrants of like
tenor then outstanding.
9. This Warrant does not entitle the Holder to any voting rights or other
rights as a shareholder of the Company, or to any other rights whatsoever
except the rights herein set forth, and no dividend shall be payable or
accrue in respect of this Warrant or the interest represented hereby, or
the shares which may be acquired hereunder, until or unless, and except to
the extent that this Warrant shall be exercised or converted, and the
Common Stock which may be acquired upon exercise or conversion thereof
shall become deliverable.
10. The Warrants are not redeemable nor cancellable by the Company.
11. This Warrant is exchangeable upon the surrender hereof by the Holder to the
Company for new Warrants of like tenor and date representing in the
aggregate the right to acquire the number of shares which, may be acquired
hereunder, each of such new Warrants to represent the right to acquire such
number of shares as may be designated by the registered Holder at the time
of such surrender.
12. The Company may deem and treat the Holder at any time as the absolute owner
hereof for all purposes and shall not be affected by any notice to the
contrary.
13. Notwithstanding any other provision governing the Warrants, if as of the
date of exercise, the Company has registered its Common Stock under Section
12 of the Securities Exchange Act of 1934, as amended, the Holder may not
exercise these Warrants to the extent that immediately following such
exercise the Holder would beneficially own more than 4.99% of the
outstanding Common Stock of the Company. For this purpose, a representation
of the Holder that following such exercise it would not beneficially own
more than 4.99% of the outstanding Common Stock of the Company shall be
conclusive and binding upon the Company.
14. The number of shares of Common Stock which may be acquired upon exercise or
conversion of these Warrants and the Warrant Price shall be subject to
adjustment from time to time as follows:
a. If the Company shall at any time subdivide its outstanding shares of
Common Stock by recapitalization, reclassification or split-up
thereof, or if the Company shall declare a stock dividend or
distribute shares of Common Stock to its stockholders, the number of
shares of Common Stock which may be acquired upon exercise of this
Warrant immediately prior to such subdivision shall be proportionately
increased in each instance, and if the Company shall at any time
combine the outstanding shares of Common Stock by recapitalization,
reclassification or combination thereof the number of shares of Common
Stock which may be acquired upon exercise of this Warrant immediately
prior to such combination shall be proportionately decreased in each
instance.
b. If the Company shall distribute to all of the holders of its shares of
Common Stock any security (except as provided in the preceding
paragraph) or other assets (other than a distribution made as a
dividend payable out of earnings or out of any earned surplus legally
available for dividends under the laws of the jurisdiction of
incorporation of the Company), the Board of Directors shall be
required to make such equitable adjustment in the Warrant Price in
2
effect immediately prior to the record date of such distribution as
may be necessary to preserve to the Holder of this Warrant rights
substantially proportionate to those enjoyed hereunder by such Holder
immediately prior to the happening of such distribution. Any such
adjustment shall become effective as of the day following the record
date for such distribution.
c. Whenever the number of shares of Common Stock which may be acquired
upon the exercise of this Warrant is required to be adjusted as
provided herein, the Warrant Price shall be adjusted (to the nearest
cent) in each instance by multiplying such Warrant Price immediately
prior to such adjustment by a fraction the numerator of which shall be
the number of shares of Common Stock which may be acquired hereunder
upon the exercise of the Warrants immediately prior to such
adjustment, and the denominator of which shall be the number of shares
of Common Stock which may be acquired hereunder immediately
thereafter.
d. In case of any reclassification of the outstanding shares of Common
Stock, other than a change covered by paragraph (14a) above or which
solely affects the par value of such shares of Common Stock, or in the
case of any merger or consolidation of the Company with or into
another corporation (other that a consolidation merger in which the
Company is the continuing corporation and which does not result in any
reclassification or capital reorganization of the outstanding shares
of Common Stock), or in the case of any sale or conveyance to another
corporation of the property of the Company as an entirety or
substantially as an entirety in connection with which the Company is
dissolved, the Holder of this Warrant shall have the right thereafter
(until the expirations of the respective rights of exercise of the
Warrant) to receive upon the exercise thereof using the same aggregate
Warrant Price applicable hereunder immediately prior to such event,
the kind and amount of shares of stock or other securities or property
receivable upon such reclassification, capital reorganization, merger
or consolidation, or upon the dissolution following any sale or other
transfer, which a holder of the number of shares of Common Stock of
the Company would obtain upon exercise of the Warrants immediately
prior to such event; and if any classification also results in a
change in shares of Common Stock covered by paragraph (14a) above,
then such adjustment shall be made pursuant to both paragraph (14a)
above and this paragraph (14d). The provisions of this paragraph (14d)
shall similarly apply to successive reclassifications, or capital
reorganizations, mergers or consolidations, sales or other transfers.
e. In case of the dissolution, liquidation or winding-up of the Company,
all rights under any of the Warrants not theretofore exercised nor
converted nor expired by their terms shall terminate on a date fixed
by the Company, such date so fixed to be not earlier than the date of
the commencement of the proceedings for such dissolution, liquidation
or winding-up and not later than thirty (30) days after such
commencement date. Notice of the termination of purchase rights shall
be given to the registered Holder of this Warrant as the same shall
appear on the books of the Company, by certified or registered mail at
least thirty (30) days prior to such termination date.
f. In case the Company shall, at any time prior to the Expiration Date of
the Warrants, and prior to the exercise or conversion thereof, offer
to the holders of its Common Stock any right to subscribe for
additional shares of any class of the Company, then the Company shall
give written notice thereof to the registered Holder of this Warrant
not less than thirty (30) days prior to the date on which the books of
the Company are closed or a record date fixed for the determination of
stockholders entitled to such subscription rights. Such notice shall
specify the date as to which the books shall be closed or record date
be fixed with respect to such offer or subscription, and the right of
the registered Holders hereof to participate in such offer or
subscription shall terminate if this Warrant shall not be exercised or
converted on or before the date of such closing of the books or such
record date.
IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by its
duly authorized officer effective this day, ______________________.
By ___________________________
Its Secretary
3
EX-4.4
8
ex4-4.txt
FORM OF "D" WARRANT AGREEMENT
EXHIBIT 4.4
SPICY GOURMET MANUFACTURING, INC.
(A DELAWARE CORPORATION)
"D" WARRANT CERTIFICATE
WARRANT NUMBER _______ NUMBER OF WARRANTS: ______________
CLASS "A" WARRANT CERTIFICATE FOR THE PURCHASE OF SHARES OF THE COMMON STOCK
OF SPICY GOURMET MANUFACTURING, INC. THESE SECURITIES WERE ISSUED EXEMPT
FROM REGISTRATION UNDER TITLE 11, SECTION 1145, OF THE U.S. CODE.
FOR VALUE RECEIVED, Spicy Gourmet Manufacturing, Inc. (the "Company"), a
Delaware corporation, hereby certifies that _________________________________
the registered holder hereof, or registered assigns, (the "Holder") subject to
the terms and conditions hereinafter set forth, and at any time during the
period beginning on the date hereof and ending on November 19, 2015, is entitled
to:
1. Purchase shares of the Common Stock of the Company for each of the within
Warrants exercised at a price of $6.00 per share of such Common Stock (the
"Warrant Price") or
2. Purchase shares of the Common Stock of the Company for each of the within
Warrants exercised at such price as may be determined by vote of the Board
of Directors, provided that such price is not higher than $6.00 per share
of such Common Stock.
3. Convert these Warrants, in whole or in part, into that number of shares of
Common Stock of the Company determined by dividing (a) the aggregate fair
market value, as of the date of conversion, of the shares of Common Stock
of the Company which would be issuable upon exercise of the Warrants to be
converted minus the aggregate Warrant Price of the shares of Common Stock
of the Company which would be issuable upon exercise of the Warrants by (b)
the said fair market value of one share of the Common Stock of the Company.
For the purposes of conversion of these Warrants, fair market value shall
be the value determined in accordance with the following provisions:
a. If the Common Stock of the Company is not at the time listed or
admitted on any stock exchange but is traded on the Nasdaq National
Market System or SmallCap Market or is quoted on the OTC Bulletin
Board, the fair market value shall be the closing selling price per
share of such common stock on the date in question, as such price is
reported by the National Association of Securities Dealers through, in
order of preference, the Nasdaq National Market System, the SmallCap
Market, or the OTC Bulletin Board, or any successor system. If there
is not a closing selling price for such common stock on the date in
question, then the fair market value shall be the closing selling
price on the last preceding date for which such a quotation exists.
b. If the common stock is at the time listed or admitted to trading on
any stock exchange, the fair market value shall be the closing selling
price per share of such common stock on the date in question on the
stock exchange determined by the Board of Directors of the Company to
be the primary market for such common stock, as such price is
officially quoted in the composite tape of transactions on the
exchange. If there is no closing selling price for such common stock
on the date in question then the fair market value shall be the
closing selling price on the last preceding date for which such a
quotation exists.
c. If the common stock is at the time neither listed nor admitted to
trading on any exchange nor traded on the Nasdaq National Market
System nor the SmallCap Market, nor traded on the OTC Bulletin board,
then such fair market value shall be determined by the Board of
Directors of the Company after taking into account such factors as the
Board of Directors of the Company shall deem appropriate.
4. Upon exercise or conversion of these Warrants, the registered Holder hereof
shall surrender to the stock transfer agent of the Company this Warrant
Certificate together with a letter identifying the number of warrant shares
1
being exercised or converted, the address to which the share certificate
should be sent, and a certified check or bank draft payable to the order of
the Company.
5. In the case of exercise or conversion of the Warrants, no fractional shares
of the Common Stock of the Company shall be issued.
6. The Company covenants and agrees that shares of Common Stock which may be
delivered upon the exercise or conversion of this Warrant will, upon
delivery, be free from all taxes, liens and charges with respect to the
purchase thereof hereunder.
7. This Warrant shall not be exercised or converted by Holder in any state
where such exercise or conversion would be unlawful.
8. The Company agrees at all times to reserve or hold available a sufficient
number of shares of its Common Stock to cover the number of shares issuable
upon the exercise or conversion of this and all other Warrants of like
tenor then outstanding.
9. This Warrant does not entitle the Holder to any voting rights or other
rights as a shareholder of the Company, or to any other rights whatsoever
except the rights herein set forth, and no dividend shall be payable or
accrue in respect of this Warrant or the interest represented hereby, or
the shares which may be acquired hereunder, until or unless, and except to
the extent that this Warrant shall be exercised or converted, and the
Common Stock which may be acquired upon exercise or conversion thereof
shall become deliverable.
10. The Warrants are not redeemable nor cancellable by the Company.
11. This Warrant is exchangeable upon the surrender hereof by the Holder to the
Company for new Warrants of like tenor and date representing in the
aggregate the right to acquire the number of shares which, may be acquired
hereunder, each of such new Warrants to represent the right to acquire such
number of shares as may be designated by the registered Holder at the time
of such surrender.
12. The Company may deem and treat the Holder at any time as the absolute owner
hereof for all purposes and shall not be affected by any notice to the
contrary.
13. Notwithstanding any other provision governing the Warrants, if as of the
date of exercise, the Company has registered its Common Stock under Section
12 of the Securities Exchange Act of 1934, as amended, the Holder may not
exercise these Warrants to the extent that immediately following such
exercise the Holder would beneficially own more than 4.99% of the
outstanding Common Stock of the Company. For this purpose, a representation
of the Holder that following such exercise it would not beneficially own
more than 4.99% of the outstanding Common Stock of the Company shall be
conclusive and binding upon the Company.
14. The number of shares of Common Stock which may be acquired upon exercise or
conversion of these Warrants and the Warrant Price shall be subject to
adjustment from time to time as follows:
a. If the Company shall at any time subdivide its outstanding shares of
Common Stock by recapitalization, reclassification or split-up
thereof, or if the Company shall declare a stock dividend or
distribute shares of Common Stock to its stockholders, the number of
shares of Common Stock which may be acquired upon exercise of this
Warrant immediately prior to such subdivision shall be proportionately
increased in each instance, and if the Company shall at any time
combine the outstanding shares of Common Stock by recapitalization,
reclassification or combination thereof the number of shares of Common
Stock which may be acquired upon exercise of this Warrant immediately
prior to such combination shall be proportionately decreased in each
instance.
b. If the Company shall distribute to all of the holders of its shares of
Common Stock any security (except as provided in the preceding
paragraph) or other assets (other than a distribution made as a
dividend payable out of earnings or out of any earned surplus legally
available for dividends under the laws of the jurisdiction of
incorporation of the Company), the Board of Directors shall be
required to make such equitable adjustment in the Warrant Price in
2
effect immediately prior to the record date of such distribution as
may be necessary to preserve to the Holder of this Warrant rights
substantially proportionate to those enjoyed hereunder by such Holder
immediately prior to the happening of such distribution. Any such
adjustment shall become effective as of the day following the record
date for such distribution.
c. Whenever the number of shares of Common Stock which may be acquired
upon the exercise of this Warrant is required to be adjusted as
provided herein, the Warrant Price shall be adjusted (to the nearest
cent) in each instance by multiplying such Warrant Price immediately
prior to such adjustment by a fraction the numerator of which shall be
the number of shares of Common Stock which may be acquired hereunder
upon the exercise of the Warrants immediately prior to such
adjustment, and the denominator of which shall be the number of shares
of Common Stock which may be acquired hereunder immediately
thereafter.
d. In case of any reclassification of the outstanding shares of Common
Stock, other than a change covered by paragraph (14a) above or which
solely affects the par value of such shares of Common Stock, or in the
case of any merger or consolidation of the Company with or into
another corporation (other that a consolidation merger in which the
Company is the continuing corporation and which does not result in any
reclassification or capital reorganization of the outstanding shares
of Common Stock), or in the case of any sale or conveyance to another
corporation of the property of the Company as an entirety or
substantially as an entirety in connection with which the Company is
dissolved, the Holder of this Warrant shall have the right thereafter
(until the expirations of the respective rights of exercise of the
Warrant) to receive upon the exercise thereof using the same aggregate
Warrant Price applicable hereunder immediately prior to such event,
the kind and amount of shares of stock or other securities or property
receivable upon such reclassification, capital reorganization, merger
or consolidation, or upon the dissolution following any sale or other
transfer, which a holder of the number of shares of Common Stock of
the Company would obtain upon exercise of the Warrants immediately
prior to such event; and if any classification also results in a
change in shares of Common Stock covered by paragraph (14a) above,
then such adjustment shall be made pursuant to both paragraph (14a)
above and this paragraph (14d). The provisions of this paragraph (14d)
shall similarly apply to successive reclassifications, or capital
reorganizations, mergers or consolidations, sales or other transfers.
e. In case of the dissolution, liquidation or winding-up of the Company,
all rights under any of the Warrants not theretofore exercised nor
converted nor expired by their terms shall terminate on a date fixed
by the Company, such date so fixed to be not earlier than the date of
the commencement of the proceedings for such dissolution, liquidation
or winding-up and not later than thirty (30) days after such
commencement date. Notice of the termination of purchase rights shall
be given to the registered Holder of this Warrant as the same shall
appear on the books of the Company, by certified or registered mail at
least thirty (30) days prior to such termination date.
f. In case the Company shall, at any time prior to the Expiration Date of
the Warrants, and prior to the exercise or conversion thereof, offer
to the holders of its Common Stock any right to subscribe for
additional shares of any class of the Company, then the Company shall
give written notice thereof to the registered Holder of this Warrant
not less than thirty (30) days prior to the date on which the books of
the Company are closed or a record date fixed for the determination of
stockholders entitled to such subscription rights. Such notice shall
specify the date as to which the books shall be closed or record date
be fixed with respect to such offer or subscription, and the right of
the registered Holders hereof to participate in such offer or
subscription shall terminate if this Warrant shall not be exercised or
converted on or before the date of such closing of the books or such
record date.
IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by its
duly authorized officer effective this day, ______________________.
By ___________________________
Its Secretary
3
EX-4.5
9
ex4-5.txt
FORM OF "E" WARRANT AGREEMENT
EXHIBIT 4.5
SPICY GOURMET MANUFACTURING, INC.
(A DELAWARE CORPORATION)
"E" WARRANT CERTIFICATE
WARRANT NUMBER _______ NUMBER OF WARRANTS: ______________
CLASS "A" WARRANT CERTIFICATE FOR THE PURCHASE OF SHARES OF THE COMMON STOCK OF
SPICY GOURMET MANUFACTURING, INC. THESE SECURITIES WERE ISSUED EXEMPT
FROM REGISTRATION UNDER TITLE 11, SECTION 1145, OF THE U.S. CODE.
FOR VALUE RECEIVED, Spicy Gourmet Manufacturing, Inc. (the "Company"), a
Delaware corporation, hereby certifies that _________________________________
the registered holder hereof, or registered assigns, (the "Holder") subject to
the terms and conditions hereinafter set forth, and at any time during the
period beginning on the date hereof and ending on November 19, 2015, is entitled
to:
1. Purchase shares of the Common Stock of the Company for each of the within
Warrants exercised at a price of $7.00 per share of such Common Stock (the
"Warrant Price") or
2. Purchase shares of the Common Stock of the Company for each of the within
Warrants exercised at such price as may be determined by vote of the Board
of Directors, provided that such price is not higher than $7.00 per share
of such Common Stock.
3. Convert these Warrants, in whole or in part, into that number of shares of
Common Stock of the Company determined by dividing (a) the aggregate fair
market value, as of the date of conversion, of the shares of Common Stock
of the Company which would be issuable upon exercise of the Warrants to be
converted minus the aggregate Warrant Price of the shares of Common Stock
of the Company which would be issuable upon exercise of the Warrants by (b)
the said fair market value of one share of the Common Stock of the Company.
For the purposes of conversion of these Warrants, fair market value shall
be the value determined in accordance with the following provisions:
a. If the Common Stock of the Company is not at the time listed or
admitted on any stock exchange but is traded on the Nasdaq National
Market System or SmallCap Market or is quoted on the OTC Bulletin
Board, the fair market value shall be the closing selling price per
share of such common stock on the date in question, as such price is
reported by the National Association of Securities Dealers through, in
order of preference, the Nasdaq National Market System, the SmallCap
Market, or the OTC Bulletin Board, or any successor system. If there
is not a closing selling price for such common stock on the date in
question, then the fair market value shall be the closing selling
price on the last preceding date for which such a quotation exists.
b. If the common stock is at the time listed or admitted to trading on
any stock exchange, the fair market value shall be the closing selling
price per share of such common stock on the date in question on the
stock exchange determined by the Board of Directors of the Company to
be the primary market for such common stock, as such price is
officially quoted in the composite tape of transactions on the
exchange. If there is no closing selling price for such common stock
on the date in question then the fair market value shall be the
closing selling price on the last preceding date for which such a
quotation exists.
c. If the common stock is at the time neither listed nor admitted to
trading on any exchange nor traded on the Nasdaq National Market
System nor the SmallCap Market, nor traded on the OTC Bulletin board,
then such fair market value shall be determined by the Board of
Directors of the Company after taking into account such factors as the
Board of Directors of the Company shall deem appropriate.
4. Upon exercise or conversion of these Warrants, the registered Holder hereof
shall surrender to the stock transfer agent of the Company this Warrant
Certificate together with a letter identifying the number of warrant shares
1
being exercised or converted, the address to which the share certificate
should be sent, and a certified check or bank draft payable to the order of
the Company.
5. In the case of exercise or conversion of the Warrants, no fractional shares
of the Common Stock of the Company shall be issued.
6. The Company covenants and agrees that shares of Common Stock which may be
delivered upon the exercise or conversion of this Warrant will, upon
delivery, be free from all taxes, liens and charges with respect to the
purchase thereof hereunder.
7. This Warrant shall not be exercised or converted by Holder in any state
where such exercise or conversion would be unlawful.
8. The Company agrees at all times to reserve or hold available a sufficient
number of shares of its Common Stock to cover the number of shares issuable
upon the exercise or conversion of this and all other Warrants of like
tenor then outstanding.
9. This Warrant does not entitle the Holder to any voting rights or other
rights as a shareholder of the Company, or to any other rights whatsoever
except the rights herein set forth, and no dividend shall be payable or
accrue in respect of this Warrant or the interest represented hereby, or
the shares which may be acquired hereunder, until or unless, and except to
the extent that this Warrant shall be exercised or converted, and the
Common Stock which may be acquired upon exercise or conversion thereof
shall become deliverable.
10. The Warrants are not redeemable nor cancellable by the Company.
11. This Warrant is exchangeable upon the surrender hereof by the Holder to the
Company for new Warrants of like tenor and date representing in the
aggregate the right to acquire the number of shares which, may be acquired
hereunder, each of such new Warrants to represent the right to acquire such
number of shares as may be designated by the registered Holder at the time
of such surrender.
12. The Company may deem and treat the Holder at any time as the absolute owner
hereof for all purposes and shall not be affected by any notice to the
contrary.
13. Notwithstanding any other provision governing the Warrants, if as of the
date of exercise, the Company has registered its Common Stock under Section
12 of the Securities Exchange Act of 1934, as amended, the Holder may not
exercise these Warrants to the extent that immediately following such
exercise the Holder would beneficially own more than 4.99% of the
outstanding Common Stock of the Company. For this purpose, a representation
of the Holder that following such exercise it would not beneficially own
more than 4.99% of the outstanding Common Stock of the Company shall be
conclusive and binding upon the Company.
14. The number of shares of Common Stock which may be acquired upon exercise or
conversion of these Warrants and the Warrant Price shall be subject to
adjustment from time to time as follows:
a. If the Company shall at any time subdivide its outstanding shares of
Common Stock by recapitalization, reclassification or split-up
thereof, or if the Company shall declare a stock dividend or
distribute shares of Common Stock to its stockholders, the number of
shares of Common Stock which may be acquired upon exercise of this
Warrant immediately prior to such subdivision shall be proportionately
increased in each instance, and if the Company shall at any time
combine the outstanding shares of Common Stock by recapitalization,
reclassification or combination thereof the number of shares of Common
Stock which may be acquired upon exercise of this Warrant immediately
prior to such combination shall be proportionately decreased in each
instance.
b. If the Company shall distribute to all of the holders of its shares of
Common Stock any security (except as provided in the preceding
paragraph) or other assets (other than a distribution made as a
dividend payable out of earnings or out of any earned surplus legally
available for dividends under the laws of the jurisdiction of
incorporation of the Company), the Board of Directors shall be
required to make such equitable adjustment in the Warrant Price in
2
effect immediately prior to the record date of such distribution as
may be necessary to preserve to the Holder of this Warrant rights
substantially proportionate to those enjoyed hereunder by such Holder
immediately prior to the happening of such distribution. Any such
adjustment shall become effective as of the day following the record
date for such distribution.
c. Whenever the number of shares of Common Stock which may be acquired
upon the exercise of this Warrant is required to be adjusted as
provided herein, the Warrant Price shall be adjusted (to the nearest
cent) in each instance by multiplying such Warrant Price immediately
prior to such adjustment by a fraction the numerator of which shall be
the number of shares of Common Stock which may be acquired hereunder
upon the exercise of the Warrants immediately prior to such
adjustment, and the denominator of which shall be the number of shares
of Common Stock which may be acquired hereunder immediately
thereafter.
d. In case of any reclassification of the outstanding shares of Common
Stock, other than a change covered by paragraph (14a) above or which
solely affects the par value of such shares of Common Stock, or in the
case of any merger or consolidation of the Company with or into
another corporation (other that a consolidation merger in which the
Company is the continuing corporation and which does not result in any
reclassification or capital reorganization of the outstanding shares
of Common Stock), or in the case of any sale or conveyance to another
corporation of the property of the Company as an entirety or
substantially as an entirety in connection with which the Company is
dissolved, the Holder of this Warrant shall have the right thereafter
(until the expirations of the respective rights of exercise of the
Warrant) to receive upon the exercise thereof using the same aggregate
Warrant Price applicable hereunder immediately prior to such event,
the kind and amount of shares of stock or other securities or property
receivable upon such reclassification, capital reorganization, merger
or consolidation, or upon the dissolution following any sale or other
transfer, which a holder of the number of shares of Common Stock of
the Company would obtain upon exercise of the Warrants immediately
prior to such event; and if any classification also results in a
change in shares of Common Stock covered by paragraph (14a) above,
then such adjustment shall be made pursuant to both paragraph (14a)
above and this paragraph (14d). The provisions of this paragraph (14d)
shall similarly apply to successive reclassifications, or capital
reorganizations, mergers or consolidations, sales or other transfers.
e. In case of the dissolution, liquidation or winding-up of the Company,
all rights under any of the Warrants not theretofore exercised nor
converted nor expired by their terms shall terminate on a date fixed
by the Company, such date so fixed to be not earlier than the date of
the commencement of the proceedings for such dissolution, liquidation
or winding-up and not later than thirty (30) days after such
commencement date. Notice of the termination of purchase rights shall
be given to the registered Holder of this Warrant as the same shall
appear on the books of the Company, by certified or registered mail at
least thirty (30) days prior to such termination date.
f. In case the Company shall, at any time prior to the Expiration Date of
the Warrants, and prior to the exercise or conversion thereof, offer
to the holders of its Common Stock any right to subscribe for
additional shares of any class of the Company, then the Company shall
give written notice thereof to the registered Holder of this Warrant
not less than thirty (30) days prior to the date on which the books of
the Company are closed or a record date fixed for the determination of
stockholders entitled to such subscription rights. Such notice shall
specify the date as to which the books shall be closed or record date
be fixed with respect to such offer or subscription, and the right of
the registered Holders hereof to participate in such offer or
subscription shall terminate if this Warrant shall not be exercised or
converted on or before the date of such closing of the books or such
record date.
IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by its
duly authorized officer effective this day, ______________________.
By ___________________________
Its Secretary
3
EX-23.1
10
ex23-1.txt
CONSENT OF AUDITOR
Exhibit 23.1
Stan J.H. Lee, CPA
2160 North Central Rd. Suite 203 * Fort Lee * NJ 07024
P.O. Box 436402 * San Diego * CA 92143-9402
619-623-7799 * Fax 619-564-3408 * E-mail) stan2u@gmail.com
To Whom It May Concern:
The firm of Stan J.H. Lee, Certified Public Accountants, consents to the
inclusion of our report of February 15, 2012, on the audited financial
statements of Spicy Gourmet Manufacturing Inc. as of December 31, 2011 and for
the period from December 30, 2010 ( inception) to December 31, 2011 in any
filings that are necessary now or in the near future with the U.S. Securities
and Exchange Commission. The firm also consents to being deemed as expert in
connection with this filing.
Very truly yours,
/s/ Stan J.H. Lee, CPA
--------------------------------
Stan J.H. Lee, CPA
February 15, 2012
Registered with the Public Company Accounting Oversight Board
Member of New Jersey Society of Certified Public Accountants
Registered with Canadian Public Accountability Board