-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, UOGEIq4UhA+z2bFahurMp5M4eZxDcD9J3HVMeZNtk/JNBbItRb0U7uuJ5tyCGVkj BUV92VeyeDzaayo7Us2tWQ== 0001058985-99-000054.txt : 19990524 0001058985-99-000054.hdr.sgml : 19990524 ACCESSION NUMBER: 0001058985-99-000054 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19981231 FILED AS OF DATE: 19990521 FILER: COMPANY DATA: COMPANY CONFORMED NAME: INTERNET BUSINESS INTERNATIONAL INC CENTRAL INDEX KEY: 0000880584 STANDARD INDUSTRIAL CLASSIFICATION: MISCELLANEOUS FOOD PREPARATIONS & KINDRED PRODUCTS [2090] IRS NUMBER: 330307734 STATE OF INCORPORATION: DE FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 033-43621 FILM NUMBER: 99632432 BUSINESS ADDRESS: STREET 1: 30152 AVENTURA CITY: RANCHO SANTA MARGARI STATE: CA ZIP: 92688 BUSINESS PHONE: 7148588800 MAIL ADDRESS: STREET 1: 30152 AVENTURA CITY: RANCHO SANTA MARGARI STATE: CA ZIP: 92688 FORMER COMPANY: FORMER CONFORMED NAME: INTERNATIONAL FOOD & BEVERAGE INC /DE/ DATE OF NAME CHANGE: 19930328 10-Q 1 U.S. SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED DECEMBER 31, 1998 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM ______________ TO ______________ COMMISSION FILE NUMBER: 33-43621 INTERNATIONAL FOOD & BEVERAGE, INC. (1) (Exact name of registrant as specified in its charter) Delaware 33-0307734 (State or jurisdiction of incorporation (I.R.S. Employer or organization) Identification No.) 30152 Aventura, Rancho Santa Margarita, California (2) 92688(2) (Address of principal executive offices) (Zip Code) Registrants telephone number: (714) 858-8800 (2) Securities registered pursuant to Section 12(b) of the Act: None Securities registered pursuant to Section 12(g) of the Act: None Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) been subject to such filing requirements for the past 90 days. Yes X No . Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrants knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K [ ]. Not Applicable. The aggregate market value of the voting stock held by non- affiliates of the registrant as of May 10, 1999: Common Stock, par value $0.001 per share - $27,085,595. As of May 10, 1999, the registrant had 177,302,997 shares of common stock issued and outstanding. (1)As of February 17, 1999, the name was change to: Internet Businesss International, Inc. (2) As of March 1, 1999, the address and telephone number was changed to: 3900 Birch Street, Suite 111, Newport Beach, California 92660; (949) 833-0261. TABLE OF CONTENTS PART I. FINANCIAL INFORMATION PAGE ITEM 1. FINANCIAL STATEMENTS BALANCE SHEETS AS OF DECEMBER 31, 1998 AND JUNE 30, 1998 3 STATEMENTS OF OPERATIONS FOR THE THREE AND SIX MONTHS ENDED DECEMBER 31, 1998 AND DECEMBER 31, 1997 4 STATEMENTS OF CASH FLOWS FOR THE SIX MONTHS ENDED DECEMBER 31, 1998 AND DECEMBER 31, 1997 5 NOTES TO FINANCIAL STATEMENTS 6 ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 9 PART II ITEM 1. LEGAL PROCEEDINGS 11 ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS 11 ITEM 3. DEFAULTS UPON SENIOR SECURITIES 11 ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS 11 ITEM 5. OTHER INFORMATION 11 ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K 11 SIGNATURE 13 PART I. ITEM 1. FINANCAL STATEMENTS. INTERNATIONAL FOOD & BEVERAGE, INC. BALANCE SHEETS (Unaudited) June 30, 1998 December 31, 1998 ASSETS CURRENT ASSETS: Cash and cash equivalents $1,102 $ 0 Accounts Receivable 0 0 Inventories 0 0 Prepaid expenses 0 0 Total current assets 1,102 0 FIXED ASSETS: 0 0 OTHER ASSETS: Note Receivable: Iron Horse Holdings 2,500,000 Total Assets $ 1,102 $2,500,000 LIABILITIES AND SHAREHOLDERS EQUITY (DEFICIT) CURRENT LIABILITIES: Notes payable and current maturities of long-term debt $ 0 $ 0 Accounts payable 1,819,644 0 Accrued wages and benefits 0 0 Accrued commissions and marketing 0 0 Other accrued expenses 0 0 Total current liabilities 1,819,644 0 LONG TERM DEBT: 455,000 0 SHAREHOLDERS EQUITY (DEFICIT): Preferred Stock Issued 0 2,090,000 Preferred Stock Subscribed 0 300,000 Common Stock 428,000 462,224 Additional paid-in capital 1,000 111,000 Retained earnings (deficit) (2,702,542) (2,702,542) Current earnings (deficit) 2,239,318 Total Shareholders Equity (2,273,542) 2,500,000 Total Liabilities & Shareholders Equity $ 1,102 $2,500,000 INTERNATIONAL FOOD & BEVERAGE, INC. STATEMENTS OF OPERATIONS (Unaudited) Three Months Ended Six Months Ended December 31, December 31, December 31, December 31 1997 1998 1997 1998 REVENUES $374,566 $ 0 $2,304,000 $ 0 COST OF SALES 281,863 0 1,975,000 0 GROSS PROFIT 92,703 0 329,000 0 EXTRAORDINARY INCOME Debt forgiveness 2,274,644 2,274,644 OPERATING EXPENSES: Selling and distribution 65,381 0 417,998 0 General and administration 29,289 34,224 257,002 37,712 Interest expense, net _9,103 0 50,000 0 Total Operating Expenses 103,773 34,224 725,000 37,712 OTHER INCOME 2,386 NET INCOME (LOSS) $(11,070) $2,240,420 $ (396,000) $2,239,318 NET (INCOME) LOSS PER COMMON SHARE $(nil) $0.01 $(nil) $0.01 WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING 154,763,438 158,060,194 154,763,438 158,060,194 See Accompanying Notes to Financial Statements INTERNATIONAL FOOD & BEVERAGE, INC. STATEMENTS OF CASH FLOWS (Unaudited) Six Months Ended December 31, 1997 December 31, 1998 CASH FLOWS FROM OPERATING ACTIVITIES: Net Income (Loss) $(396,000) $2,239,318 Adjustments for non-cash items: Debt forgiveness (2,274,644) Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: Depreciation and amortization 75,000 0 Changes in assets and liabilities: Accounts receivable 134,000 0 Inventories 143,161 0 Prepaid expenses (2,417) 0 Accounts payable 105,001 34,224 Accrued wages and benefits (28,273) 0 Accrued commissions and marketing (44,792) 0 Other accrued expenses (37,839) 0 Net cash provided by (used in) operating activities (52,159) (1,102) CASH FLOWS FROM INVESTING ACTIVITIES: Additions to, and reduction of, fixed assets 0 0 Net cash provided by (used in) investing activities 0 0 CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from issuance of notes payable 0 0 Principal payments on notes payable 25,200 0 Net cash provided by (used in) financing activities 25,200 0 NET INCREASE (DECREASE) IN CASH (26,959) (1,102) CASH AND CASH EQUIVALENTS, beginning of period 28,000 1,102 CASH AND CASH EQUIVALENTS, end of period $ 1,041 $ 0 See Accompanying Notes to Financial Statement NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1998 Note 1. Description of the Business International Food & Beverage, Inc. (the Company) was in the business, of the manufacturing and marketing of fully prepared pizzas.. These operations ceased as of December 31, 1997. In December 1998, after new management was in place, a decision was made to change the company into an internet company offering E-commerce, internet access as an Internet Service Provider, hosting through our own server and other enhancements and service through and for the Internet. It was also determined to change the companies name to better reflect the companies operation: Internet Businesss International, Inc.. The management will, after January 1, 1999, begin looking for ways to implement the Companys plan of business. Note 2. Change in Control In November 1998 new stock holders bought majority control from Michael W. Hogarty, and other stock holders, in a private transaction. Immediately after the stock ownership changed Michael W. Hogarty resigned as the Chief Executive Officer and President of the Company, and Michael W. Hogarty who was also the sole director resigned after nominating and electing two new directors from the group that bought the controlling shares of stock. Note 3. Summary of Significant Accounting Policies Fiscal Year The Companys fiscal year was the 52-53 week period ending on the Saturday closest to June 30. For clarity of presentation, fiscal year end and period end dates in the accompanying financial statements and notes are referred to as June 30 and December 31 for the applicable periods presented. Accounts Receivable and Revenues With the new venture for the company into E-commerce, revenues will be generated though credit card sales over the Internet. minimizing the risk of bad debt. Inventories With this new line of business inventories will be kept to a minimum. . Fixed Assets All of the Companys fixed assets will be Internet related. The exact extent of what this will consist of will be determined with time. Other Assets Other assets will consists primarily of software for Internet programs and other related assets. Goodwill Due to the change in the new nature of the business the company will not include goodwill in its financial reports at this time. Income Taxes The Company follows Statement of Financial Accounting Standards (SPAS) No. 109, Accounting for Income Taxes. Under this method, deferred income taxed was recognized for the tax consequences in future years of difference between the tax bases of assets and liabilities, and their financial reporting amounts at each year-end based on enacted tax laws and statutory tax rates applicable to the periods in which the differences were expected to affect taxable income. Valuation allowances were established, when necessary, to reduce deferred tax assets to the amount expected to be realized. Under this standard the provision for income taxes represents the tax payable for the period and the change during the period in deferred tax assets and liabilities. Stockholders Equity Common Share Stockholders equity common share is based on the reported net equity divided by the weighted average number of common shares outstanding. Cash Equivalents The Company considered highly liquid debt instruments purchased with a maturity of three months or less to be cash equivalents. Fair Value of Financial Instruments The carrying value of the Companys cash and cash equivalents, accounts receivable, accounts payable, accrues expenses and notes payable approximates fair value. Management Estimates The preparation of financial statements in conformity with generally accepted accounting principles required management to make estimates and assumptions that affect the reported amounts of 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. Additional Paid In Capital The additional paid in capital represented on the balance is from the difference of the Preferred Stock Issuance as noted in Note 5. Stock Issuance as per the agreement and actual amount issued which is $110,000. Note 4. Commitments Leases The company doesnt currently lease a corporate office facility. A more permanent base of operation will be determined after January 1, 1999. Note 5 - Stock Issuance Current stock authorized The company is currently authorized to issue up to 199,000,000 share of common stock and 1,000,000 of preferred stock. Issued and outstanding stock Common Stock: The company prior to this Quarter had issued 158,060,207 common shares of which 131,256,247 were restricted. Preferred Stock : There was no Preferred Stock issued prior to this Quarter Preferred Stock Issuance On December 15, 1998 the company entered into an agreement with Iron Horse Holdings, Inc. (IHHI) wherein IHHI agreed to buy up to 25,000 the Companys preferred shares at the price of at the price of $100.00 per share. Shares purchased under this agreement are to be issued to IHHI or its designee. Payment for shares sold under this agreement is to be in the form of a promissory note bearing interest at the rate of 9% per annum, and the obligation created thereby is to be secured by a blanket, or all inclusive security agreement executed by IHHI and perfected by filings as specified by law. Until such note is paid in full, IHHI shall pay the 3% coupon on such shares as are issued under this agreement directly to the shareholder(s) of record at the time such payment becomes due. Common Stock Issuance On December 15, 1998 the company agreed to issue common shares to Iron Horse Holdings, Inc. IHHI for IHHI to pay its bills in exchange for the issuance of restricted common stock. Under the terms to this agreement the company issued an additional 4,452,885 shares by December 31, 1998. On December 21, 1998 the company agreed to acquire several internet sites with issuance of common stock. Under to the terms of this agreement 8,000,000 shares were issued. As of December 31, 1998, the total common stock issued and outstanding was 170,513,092 shares. At year end the total preferred stock issued and outstanding was 20,900 shares Note 6. Extraordinary Income After review by legal consul about the collectability of previous unsecured debts, it was determined by management to show those debts as uncollectable. Therefore management has decided to write those debts off and according to the Internal Revenue Code that uncollectable debt has to be shown as extraordinary income. Note 7. Net Loss Carry Forward The Net Loss Carry Forward that incurred due to the prior companies operation will be used to offset the impact of the extraordinary income as indicated above. Note 8. Wages Payable The corporate officers are due wages for the months of November and December of 1998. In lieu of cash payments, the officers will take additional shares of stock at the higher of $.02 per share or market price of the stock at the end of each month, November 30, 1998 and December 31, 1998. These shares will not be issued until the Company is current with its filings as required by State, and Federal Governments. The wages are for $15,000.00 per month per officer. As of December 31, 1998, there were only two officers of the Company, Albert R. Reda and Louis Cherry. ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FIINANCIAL CONDITION AND RESULTS OF OPERATIONS. The following discussion should be read in conjunction with the financial statements of the Company and notes thereto contained elsewhere in this report. Results of Operations. Revenues for the six month period ended December 31, 1998 of $0 decreased 100% when compared with revenues of $2,304,000 in the prior year comparable period due to the shut down of operations of the Company on December 31, 1997. Liqiudity and Capital Resources. Net cash used by the Company was $1,102 for the six month period ended December 31, 1998 versus cash used in operating activities of $52,159 in the comparable prior year period. Capital Expenditures. No capital expenditures were made during the quarter ended on December 31, 1998. Year 2000 Issue. The Year 2000 issue arises because many computerized systems use two digits rather than four to identify a year. Date sensitive systems may recognize the year 2000 as 1900 or some other date, resulting in errors when information using the year 2000 date is processed. In addition, similar problems may arise in some systems which use certain dates in 1999 to represent something other than a date. The effects of the Year 2000 issue may be experienced before, on, or after January 1, 2000, and if not addressed, the impact on operations and financial reporting may range from minor errors to significant system failure which could affect the Companys ability to conduct normal business operations. This creates potential risk for all companies, even if their own computer systems are Year 2000 compliant. It is not possible to be certain that all aspects of the Year 2000 issue affecting the Company, including those related to the efforts of customers, suppliers, or other third parties, will be fully resolved. The Company, now under new management, is in the process of developing an ongoing program to determine the extent to which Year 2000 compliance issues will affect the Company. There can be no assurance that the Company will be able to develop a contingency plan that will adequately address issues that may arise in the Year 2000. The Companys Year 2000 plans are based on managements best estimates. Based on currently available information, management does not believe that the Year 2000 issues will have a material adverse impact on the Companys financial condition or results of operations; however, because of the uncertainties in this area, no assurances can be given in this regard. Forward Looking Statements. The foregoing Managements Discussion and Analysis contains forward looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Act of 1934, as amended, and as contemplated under the Private Securities Litigation Reform Act of 1995, including statements regarding, among other items, the Companys business strategies, continued growth in the Companys markets, projections, and anticipated trends in the Companys business and the industry in which it operates. The words believe, expect, anticipate, intends, forecast, project, and similar expressions identify forward-looking statements. These forward-looking statements are based largely on the Companys expectations and are subject to a number of risks and uncertainties, certain of which are beyond the Companys control. The Company cautions that these statements are further qualified by important factors that could cause actual results to differ materially from those in the forward looking statements, including, among others, the following: reduced or lack of increase in demand for the Companys products, competitive pricing pressures, changes in the market price of ingredients used in the Companys products and the level of expenses incurred in the Companys operations. In light of these risks and uncertainties, there can be no assurance that the forward-looking information contained herein will in fact transpire or prove to be accurate. The Company disclaims any intent or obligation to update forward looking statements. PART II. ITEM 1. LEGAL PROCEEDINGS. The Company is not a party to any material pending legal proceedings and, to the best of its knowledge, no such action by or against the company has been threatened. ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS. None. ITEM 3. DEFAULTS UPON SENIOR SECURITIES. Not Applicable. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. No matters were submitted to a vote of the Companys stockholders during the first quarter of the fiscal year covered by this report. ITEM 5. OTHER INFORMATION. None. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K. (a) Reports on Form 8-K. A report on Form 8-K has been filed during the second quarter of the fiscal year covered by this Form 10-Q report. This report, dated November 23, 1998, covered the following items: On November 23,1998, control of Registrant changed by virtue of the purchase of 90,119,431 shares of the common stock of Registrant by Arnold Sock, Albert Reda, Cherry Family Trust, Reda Family Trust, hereinafter the Control Group (Control Group), at private sale from Michael Hoggarty, (who, prior to the following transactions held control of Registrant) as follows: Purchaser No. Of Shares Percentage of Outstanding Shares Arnold Sock 32,867,259 21% Reda Family Trust 29,600,000 19% Cherry Family Trust 26,086,086 17% Albert Reda 1,566,086 1% In addition, on November 23, 1998 the following persons, not in the Control Group, purchased 18,132,791 shares, at private sale, from Michael Hoggarty (who, prior to the following transactions held control of Registrant) in the following amounts: Purchaser No. Of Shares Percentage of Outstanding Shares Michael Cherry 2,000,000 1% Roxanne Cherry 2,000,000 1% Iron Horse Trading, Inc. 14,132,791 8% Control Group members, Michael Cherry and Reda Family Trust are shareholders of Iron Horse Trading, Inc. On November 23,1998, Michael Hoggarty resigned from his capacity as Director of Registrant. In his oral resignation, Mr. Hoggarty cited no disagreement with the Registrant on any matter relating to the Registrants operations, policies or practices. (b) Reports on Form 8-K. A second report on Form 8-K has been filed during the second quarter of the fiscal year covered by this Form 10-Q report. This report, dated December 15, 1998, covered the following item: On December 15, 1998, Registrant entered into an agreement with Iron Horse Holdings, Inc. (IRON HORSE). Under the terms of this agreement, Registrant will sell, and IRON HORSE will buy up to 25,000 shares of Registrants preferred stock at the price of $100.00 per share. Shares purchased under this agreement are to be issued to IRON HORSE or its designee. Payment for shares sold under this agreement is to be in the form of a promissory note bearing interest at the rate of 9% per annum, and the obligation created thereby is to be secured by a blanket or all inclusive security agreement executed by IRON HORSE and perfected by filings as specified by law. Until such note is paid in full, IRON HORSE shall pay the 3% coupon on such shares as are issued under this agreement directly to the shareholder(s) of record at the time such payment becomes due. (b) Exhibits included or incorporated by reference herein: See Exhibit Index SIGNATURE Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. INTERNET BUSINESSS INTERNATIONAL, INC. (formerly known as International Food & Beverage, Inc.) Dated: May 10, 1999 By: /s/ Albert R. Reda Albert R. Reda Chief Executive Officer, Secretary EXHIBIT INDEX Exhibit No. Description 3.01 Certificate of Incorporation, as amended (incorporated by reference to Exhibit 3.01 of the Registrants Annual Report on Form 10-K for the fiscal year ended June 26, 1993). 3.02 Bylaws (incorporated by reference to Exhibit 3.02 to the Companys registration statement on Form S-1 filed with the Securities and Exchange Commission on October 29, 1991, the Registration Statement). 4.01 Specimen Common Stock Certificate (incorporated by reference to Exhibit 4.01 to the Registration Statement). 10.1 Employment Agreement, dated March 15, 1988, as amended January 5, 1989, and November 9, 1990 between Michael W. Hogarty and the Company (incorporated by reference to Exhibit 10.11 to the Registration Statement). 10.2 1988 Stock Option Plan for Key Employees of International Food & Beverage, Inc. (incorporated by reference to Exhibit 10.19 to the Registration Statement). 10.3 Promissory Note of the Company dated June 29, 1995, in the principal amount of $100,000 in favor of Michael W. Hogarty. Promissory Notes of the Company in substantially the same form as in Exhibit 10.5 herein were issued at various times between October 16, 995 and January 31, 1996 in the total principal amount of $355,000 in favor of Michael W. Hogarty (incorporated by reference to Exhibit 10.6 of the Registrants Annual Report on Form 10-K for the fiscal year ended June 30, 1995). 10.4 Loan and Security Agreement, dated June 29, 1995 between the Company and Michael W. Hogarty (incorporated by reference to Exhibit 10.7 of the Registrants Annual Report on Form 10-K for the fiscal year ended June 30, 1995). 10.5 Loan and Security Agreement, dated March 15, 1996 between Fremont Business Credit and the Company and related documents and agreements executed in connection therewith (incorporated by reference to Exhibit 10.7 of the Registrants Annual Report on Form 10-K for the fiscal year ended June 30, 1996). 22.1 Subsidiaries (incorporated by reference to Exhibit 22.1 to the Registration Statement). 27 Financial Data Schedule. EX-27 2 FINANCIAL DATA SCHEDULE WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE. THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE COMPANYS FORM 10-Q AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
5 1,000 6-MOS JUN-30-1998 JUL-01-1998 DEC-31-1998 0 0 2,500 0 0 2,500 0 0 2,500 0 0 0 2,090 462 2,500 2,500 0 2 0 38 0 0 0 2,239 0 2,239 0 2,275 0 2,239 .01 .01
-----END PRIVACY-ENHANCED MESSAGE-----