PART II
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.
(a) There currently is no public market for our common stock.
(b) Holders. As of March 1, 2012, our Common Stock was held by 92 shareholders of record. Our transfer agent is Issuer Direct Corporation, with offices at 500 Perimeter Park Drive, Suite D, Morrisville, NC 27560, phone number 919-481-4000. The transfer agent is responsible for all record-keeping and administrative functions in connection with the common shares of stock.
(c) Dividends. We have never declared or paid a cash dividend. There are legal restrictions which preclude our ability to pay cash dividends on our common shares so long as we have an accumulated deficit. We do not anticipate declaring or paying any cash dividends in the foreseeable future.
(d) Securities Authorized for Issuance Under Equity Compensation Plans.
None.
Recent Issuances of Unregistered Securities
On February 16, 2012, the Company privately issued a total of 9,118,108 restricted shares of its Common Stock to Tangiers Partners, LP, in exchange for the sum of $50,000, paid in cash. These shares represent 7½% of the Company’s outstanding capital stock, calculated after issuance. The proceeds were used to pay the salary of the Chief Executive Officer, and for working capital.
Repurchase of Shares
The Company did not repurchase any of our shares during the year ended December 31, 2011.
ITEM 6. SELECTED FINANCIAL DATA.
Not applicable.
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION.
The following information should be read in conjunction with our consolidated financial statements and related notes thereto included elsewhere in our financial statements and notes thereto and the related "Management's Discussion and Analysis of Financial Condition and Results of Operations".
Summary and Outlook of the Business
The Company, an online retailer that operates in the food gift industry, was started in January 2009 and operates in a highly competitive industry. For fiscal years ended December 31, 2011 and 2010, the Company had net losses of $328,841 and $357,090 respectively. To date management has been able to finance the business via private placements of its common stock and the issuance of debt. We plan to grow the Company’s customer base with an aggressive marketing plan targeted at both consumer and business customers, provided we are able to obtain the necessary capital to do so.
Revenues
Revenues for the year ended December 31, 2011, were $50,998 compared to $101,624 for the year ended December 31, 2010. If we can obtain additional capital, we believe we can begin to increase revenues by investing heavily in marketing to build brand awareness and generate new customers. We estimate that our future marketing and sales costs over the next 12 months will be $75,000, if we are able to obtain the necessary capital to cover these expenditures.
Critical Accounting Policies
Revenue Recognition
In general, the Company records revenue when persuasive evidence of an arrangement exists, services have been rendered or product delivery has occurred, the sales price to the customer is fixed or determinable, and collectability is reasonably assured. The following policies reflect specific criteria for the various revenues streams of the Company:
Revenue is recognized at the time the product is delivered. Provision for sales returns will be estimated based on the Company's historical return experience. Revenue is presented net of returns.
Financial Instruments
Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as of December 31, 2011. The respective carrying value of certain on-balance sheet financial instruments approximated their fair values. These financial instruments include cash and accounts payable and accrued expenses. Fair values were assumed to approximate carrying values for these financial instruments because they are short term in nature and their carrying amounts approximate fair values.
Net Income (Loss) Per Common Share
Basic net (loss) income per common share is calculated using the weighted average common shares outstanding during each reporting period. Diluted net (loss) income per common share adjusts the weighted average common shares for the potential dilution that could occur if common stock equivalents (convertible debt and preferred stock, warrants, stock options and restricted stock shares and units) were exercised or converted into common stock. There were no common stock equivalents at December 31, 2011.
Income Taxes
Deferred income taxes are recognized for the tax consequences related to temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amounts used for tax purposes at each year end, based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. A valuation allowance is recognized when, based on the weight of all available evidence, it is considered more likely than not that all, or some portion, of the deferred tax assets will not be realized. Income tax expense is the sum of current income tax plus the change in deferred tax assets and liabilities.
ASC 740, Income Taxes, requires a company to first determine whether it is more likely than not (which is defined as a likelihood of more than fifty percent) that a tax position will be sustained based on its technical merits as of the reporting date, assuming that taxing authorities will examine the position and have full knowledge of all relevant information. A tax position that meets this more likely than not threshold is then measured and recognized at the largest amount of benefit that is greater than fifty percent likely to be realized upon effective settlement with a taxing authority.
Stock-Based Compensation
The Company accounts for equity instruments issued to employees in accordance with ASC 718, Compensation - Stock Compensation. ASC 718 requires all share-based compensation payments to be recognized in the financial statements based on the fair value using an option pricing model. ASC 718 requires forfeitures to be estimated at the time of grant and revised in subsequent periods if actual forfeitures differ from initial estimates.
Equity instruments granted to non-employees are accounted for in accordance with ASC 505, Equity. The final measurement date for the fair value of equity instruments with performance criteria is the date that each performance commitment for such equity instrument is satisfied or there is a significant disincentive for non-performance.
Results of Operations for the Years Ended December 31, 2011 and 2010
Revenue. For the year ended December 31, 2011, revenues were $50,998 compared to $101,624 for the year ended December 31, 2010. If we are able to obtain additional capital, we plan to invest heavily in marketing and sales in order to build brand awareness and generate new customers. We estimate that our future marketing and sales costs will be $75,000 over the next 12 months, if we are able to obtain sufficient capital to support such an effort.
Gross Income. For the year ended December 31, 2011 gross income was $10,349 compared to $58,145 for the year ended December 31, 2010. Management believes that it will experience an increase in gross profits during 2012 as it continues to establish a market for its products and services.
Expenses. For the year ended December 31, 2011, total expenses were $331,049 compared to $403,512 for the year ended December 31, 2010. Management believes expenses will increase in 2012 as the Company attempts to grow, primarily in personnel and marketing costs.
Net Loss. For the year ended December 31, 2011, the Company’s net loss was $320,700 compared to $345,367 for the year ended December 31, 2010. The losses are primarily related to personnel costs.
For the year ended December 31, 2011, the Company’s accumulated deficit was $1,022,042 compared to $693,201 for the year ended December 31, 2010.
Financial Condition, Liquidity and Capital Resources
The Company is currently illiquid. The ability of the Company to continue as a going concern is dependent on the Company’s ability to raise additional capital, as well as successful implementation of its business plan which contemplates increasing revenues significantly. Since its inception, the Company has been funded by its Chairman, Chief Executive Officer, Board members and persons related to or acquainted with these. To remedy the current deficiency in our liquidity position, we plan to raise additional capital through additional private equity offerings, strategic agreements with partner companies, and private debt placement. Whether we will be successful in obtaining additional capital, or obtaining such capital on commercially reasonable terms, and whether we can significantly increase revenues, is uncertain.
As of December 31, 2011, total current assets were $6,473, which consisted of $540 in cash and $3,770 in prepaid expenses. As of December 31, 2010, total current assets were $5,092, which consisted of $1,409 of cash and $3,683 of prepaid expenses.
As of December 31, 2011, total current liabilities were $925,911, which consisted of $621,083 of accounts payable expenses, $45,000 of customer deposits, and $259,828 of loan payable obligations. As of December 31, 2010, total current liabilities were $600,002, which consisted of $427,602 of accounts payable expenses and $172,400 of loan payable obligations.
For the year ended December 31, 2011, net cash used by operating activities was $88,297 compared to $103,455 for the year ended December 31, 2010.
Cash flows from financing activities for the year ended December 31, 2011 were $87,428 consisting of proceeds from shareholder loans and notes payable. Cash flows from similar financing activities for the year ended December 31, 2010, were $95,000.
Off-Balance Sheet Arrangements
We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors.
Recent Accounting Pronouncements
In May 2011, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2011-04, “Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and International Financial Reporting Standards (IFRS).” This pronouncement was issued to provide a consistent definition of fair value and ensure that the fair value measurement and disclosure requirements are similar between U.S. GAAP and IFRS. ASU 2011-04 changes certain fair value measurement principles and enhances the disclosure requirements particularly for level three fair value measurements. This pronouncement is effective for reporting periods beginning on or after December 15, 2011. The adoption of ASU 2011-04 is not expected to have a significant impact on the Company’s consolidated financial position or results of operations.
In June 2011, the FASB issued guidance on the presentation of comprehensive income. This guidance eliminates the current option to report other comprehensive income and its components in the statement of changes in equity. The guidance allows two presentation alternatives; present items of net income and other comprehensive income in (1) one continuous statement, referred to as the statement of comprehensive income, or (2) in two separate, but consecutive, statements of net income and other comprehensive income. This guidance is effective as of the beginning of a fiscal year that begins after December 15, 2011. Early adoption is permitted, but full retrospective application is required under both sets of accounting standards. The Company is currently evaluating which presentation alternative it will utilize.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
Our financial statements and supplemental schedule and notes thereto as of December 31, 2011 and 2010, and for each of the two years then ended, together with the independent registered public accounting firm’s reports thereon, are set forth on pages F-1 to F-13 of this Annual Report.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.
None.
ITEM 9A. CONTROLS AND PROCEDURES.
Evaluation of Disclosure Controls and Procedures.
It is management's responsibility to establish and maintain adequate internal control over all financial reporting pursuant to Rule 13a-15 under the Securities Exchange Act of 1934 (the "Exchange Act"). Our management has reviewed and evaluated the effectiveness of our disclosure controls and procedures as of December 31, 2011. Following this review and evaluation, management determined that our disclosure controls and procedures are not effective to ensure that information required to be disclosed by us in reports that we file or submit under the Exchange Act (i) is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, and (ii) is accumulated and communicated to management as appropriate to allow timely decisions regarding required disclosure.
The deficiency in our disclosure controls and procedures is related to a lack of segregation of duties due to the lack of an accounting department and the fact that we only have one employee at present due to the limited financial resources of the Company. We continue to actively search for additional capital in order to be in position to remediate this lack of segregation of duties.
Changes in Internal Control over Financial Reporting
There were no significant changes in the Company's internal controls over financial reporting or in other factors that could significantly affect these internal controls subsequent to the date of their most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.
Management’s Report on Internal Control over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over our financial reporting (as defined in Rule 13a-15(f) and 15d-15(f) of the Exchange Act). Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America.
Our internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets, (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with accounting principles generally accepted in the United States of America, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors, and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
We assessed the effectiveness of our internal control over financial reporting as of December 31, 2011. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in Internal Control-Integrated Framework.
Based upon management’s assessment using the criteria contained in COSO, and for the reasons discussed below, our management has concluded that, as of December 31, 2011, our internal control over financial reporting was not effective.
Based on its evaluation, the Company's Chief Executive Officer identified a major deficiency that existed in the design or operation of our internal control over financial reporting that it considers to be a “material weakness”. The Public Company Accounting Oversight Board has defined a material weakness as a “significant deficiency or combination of significant deficiencies that results in more than a remote likelihood that a material misstatement of the annual or interim financial statements will not be prevented or detected.”
The deficiency in our internal control is related to a lack of segregation of duties due to our lack of an accounting department and the lack of experienced in-house accountants due to the limited financial resources of the Company. We continue to actively search for additional capital in order to be in position to add the necessary staff to address this material weakness.
ITEM 9A(T) CONTROLS AND PROCEDURES.
Not applicable.
ITEM 9B. OTHER INFORMATION.
None.
PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.
The following table sets forth the names and positions of our executive officer and directors as of March 1, 2012. Our directors are elected at our annual meeting of stockholders and serve for one year or until successors are elected and quality. Our Board of Directors elects our officer, and the term of office is at the discretion of the Board, except to the extent governed by an employment contract.
Our directors’ and executive officers’ ages and positions are as follows:
| Name | | Age | | Position with the Company |
| Matthew Schissler | | 40 | | Chairman |
| John Berkeridge, Jr. | | 34 | | Director |
| Jonathan Irwin | | 41 | | Chief Executive Officer |
Matthew L. Schissler is the Chairman of the Board and a founder of the Company. Mr. Schissler has served with the Company since its inception. He also serves as the Chairman of the Board and Chief Executive Officer of Cord Blood America, Inc. and has done so since January 2003. Cord Blood America is a public company listed on the Over-the-Counter-Bulletin Board. From April 2001 until January 2003, Mr. Schissler was the President and Chief Executive Officer of RainMakers International, an advertising agency that he founded. He earned a Bachelor of Arts in Biology from St. Mary’s College of Maryland in 1993. As a result of Mr. Schissler’s experience with public companies and management, the Board of Directors concluded that Mr. Schissler would be an excellent addition to the Board of Directors.
John J. Berkeridge, Jr. is employed by Penske Truck Leasing as an Executive National Account Manager, where he has worked since February 2000. Mr. Berkeridge has served as a director of the Company from November 2009 to the present. Mr. Berkeridge’s duties at Penske Truck Leasing include the management of corporate relationships of large companies with headquarters in the Mid-Atlantic region of the US, in addition to managing new business acquisition for national accounts in the same geographic footprint. As a result of Mr. Berkeridge’s sales and product marketing experience, the Board of Directors concluded that Mr. Berkeridge would be an excellent addition to the Board of Directors.
Jonathan F. Irwin is the Chief Executive Officer and a founder of the Company. Mr. Irwin also serves as the Company’s Principal Financial Officer and Principal Accounting Officer. Mr. Irwin has served with the Company since its inception. Prior to joining the Company, from June 2004 to July 2009, he was the President of RoadRunner Advertising, Inc., an advertising agency that he founded. Primary responsibilities included sales, marketing and creative oversight. From April 1996 to June 2004, Mr. Irwin was the President of UR Media Group, a collegiate marketing firm that he founded. Mr. Irwin has 14 years of experience in finance and accounting, in addition to earning a Masters in Business Administration from Loyola University of Maryland in 2003, and a Bachelor of Arts in Economics from St. Mary’s College of Maryland in 1992. As a result of Mr. Irwin’s experience with marketing and management of companies, the Board of Directors concluded that Mr. Irwin would be an excellent addition to the Board of Directors.
Involvement in Certain Legal Proceedings
None of our officers, directors, promoters or control persons has been involved in the past five years in any of the following:
| (1) | Any bankruptcy petition filed by or against any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time; |
| (2) | Any conviction in a criminal proceeding or being subject to a pending criminal proceeding (excluding traffic violations and other minor offenses); |
| (3) | Being subject to any order, judgment or decree, not subsequently reversed, suspended or vacated, or any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his involvement in |
| (4) | Any type of business, securities or banking activities; or |
| (5) | Being found by a court of competent jurisdiction (in a civil action), the Commission or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended, or vacated. |
Committees; Audit Committee Financial Expert.
Our board does not have an Audit Committee or other committees.
Compliance with Section 16(a) of the Exchange Act
Section 16(a) of the Securities Exchange Act of 1934 requires that our officers and directors, and persons who own more than ten percent of a registered class of our equity securities, file reports of ownership and changes in ownership with the Securities and Exchange Commission and with any exchange on which the Company's securities are traded. Officers, directors and persons owning more than ten percent of such securities are required by Commission regulation to file with the Commission and furnish the Company with copies of all reports required under Section 16(a) of the Exchange Act. To our knowledge, based solely upon our review of the copies of such reports furnished to us, during the fiscal year ended December 31, 2011, Section 16(a) filing requirements applicable to our officers and directors were not complied with.
Code of Ethics
We do not currently have a Code of Ethics.
Changes in Nominating Procedures
None.
ITEM 11. EXECUTIVE COMPENSATION.
The Company accrued or paid compensation to the executive officers as a group for services rendered to the Company in all capacities during the 2011 and 2010 fiscal years as shown in the following table.
SUMMARY COMPENSATION TABLE
Overview
The following is a discussion of our program for compensating our named executive officer(s) and directors. Currently, we do not have a compensation committee, and as such, our Board of Directors is responsible for determining the compensation of our named executive officer(s).
Compensation Program Objectives and Philosophy
The primary goals of our policy of executive compensation are to attract and retain the most talented and dedicated executives possible, to assure that our executives are compensated effectively in a manner consistent with our strategy and competitive practice and to align executive compensation with the achievement of our short- and long-term business objectives.
The board of directors considers a variety of factors in determining compensation of executives, including their particular background and circumstances, such as their training and prior relevant work experience, their success in attracting and retaining savvy and technically proficient managers and employees, increasing our revenues, broadening our product line offerings, managing our costs and otherwise helping to lead our Company through a period of rapid growth.
In the near future, we expect that our board of directors will form a compensation committee charged with the oversight of executive compensation plans, policies and programs of our Company and with the full authority to determine and approve the compensation of our Chief Executive Officer and make recommendations with respect to the compensation of any other executive officers. We expect that our compensation committee will continue to follow the general approach to executive compensation that we have followed to date, rewarding superior individual and company performance with commensurate cash compensation.
Elements of Compensation
Our compensation program for the named executive officer(s) consists primarily of base salary. The base salary we provide is intended to equitably compensate the named executive officer(s) based upon their level of responsibility, complexity and importance of role, leadership and growth potential, and experience.
Base Salary
Our named executive officer(s) receive base salaries commensurate with their roles and responsibilities. Base salaries and subsequent adjustments, if any, are reviewed and approved by our board of directors annually, based on an informal review of relevant market data and the executive’s performance for the prior year, as well as each executive’s experience, expertise and position. The base salaries paid to our named executive officer(s) in 2011 are reflected in the Summary Compensation Table below.
Stock-Based Awards under the Equity Incentive Plan
We do not provide equity awards as a component of compensation.
Employment Agreements
The Company does not currently have any employment agreements.
Retirement Benefits
We have not adopted a tax-qualified employee savings and retirement plan.
Perquisites
Historically, we have not provided our named executive officer(s) with any perquisites and other personal benefits. We do not view perquisites as a significant element of our compensation structure, but do believe that perquisites can be useful in attracting, motivating and retaining the executive talent for which we compete. It is expected that our historical practices regarding perquisites will continue and will be subject to periodic review by our by our board of directors.
The following table sets forth the compensation paid to our Chief Executive Officer for each of our last two completed fiscal years. No other officer received compensation greater than $100,000 for either fiscal year.
Summary Compensation Table
| Name and Position | | Year | | Salary ($)(1) | | | Bonus ($) | | | Option Awards ($) | | | All Other Compensation ($) | | | Total ($) | |
| Jonathan Irwin | | 2011 | | | 120,000 | (2) | | | 0 | | | | 0 | | | | 0 | | | | 120,000 | |
| Chief Executive Officer | | 2010 | | | 105,000 | (3) | | | 0 | | | | 0 | | | | 0 | | | | 105,000 | |
___________
| (1) | The values shown in this column represent the dollar amount recognized for financial statement reporting purposes with respect to the 2011 and 2010 fiscal years. |
| (2) | In 2011, Mr. Irwin received $24,500 in cash compensation and $95,500 of deferred compensation. Deferred compensation is to be paid to Mr. Irwin by January 1, 2013, in cash payments and/or shares of stock in the Company. |
(3)
| Mr. Irwin received $58,500 in cash compensation and $46,500 of deferred compensation for the year ended December 31, 2010. Deferred compensation is to be paid to Mr. Irwin by December 31, 2013, in cash payments and/or shares of stock in the Company. |
Outstanding equity awards at fiscal year end.
None.
COMPENSATION OF DIRECTORS
Director Compensation for year ending December 31, 2011
The following table sets forth with respect to the named director, compensation information inclusive of equity awards and payments made in the year ended December 31, 2011.
| Name | | Fees Earned or Paid in Cash ($)(1) | | | Stock Awards ($) | | | Option Awards ($) | | | Non-Equity Incentive Plan Compensation ($) | | | Nonqualified Deferred Compensation Earnings ($) | | | All Other Compensation ($) | | | Total ($) | |
| (a) | | (b) | | | (c) | | | (d) | | | (e) | | | (f) | | | (g) | | | (h) | |
| Matthew Schissler | | | 90,000 | (2) | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | 0 | |
| John Berkeridge | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | 0 | |
| Joseph Vicente(3) | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | 0 | |
| Jonathan Irwin | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | 0 | |
___________
| (1) | The values shown in this column represent the dollar amount recognized for financial statement reporting purposes with respect to the 2011 fiscal year. |
| (2) | Mr. Schissler received no cash compensation and $90,000 of deferred compensation. Deferred compensation is to be paid to Mr. Schissler by January 1, 2013, in cash payments and/or shares of stock in the Company. |
| (3) | Mr. Vicente resigned from the Company’s board on January 26, 2012, for personal reasons. There was no disagreement with the Registrant on any matter in connection with his departure. Mr. Vicente did not serve on any of the Committees of the Board of Directors. |
Compensation Committee Interlocks and Insider Participation
We did not have a compensation committee during the year ended December 31, 2011. During the fiscal year ended December 31, 2011, None of our executive officers served on the Board of Directors of any entities whose directors or officers serve on our Board of Directors.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.
The following table sets forth information as of March 1, 2012 , except as otherwise noted, with respect to the beneficial ownership of our common stock and is based on 121,574,774 shares of common stock issued and outstanding and entitled to vote as of said date as to:
| ● | Each person known by the Company to own beneficially more than five percent of our issued and outstanding common stock; |
| ● | Each director and prospective director of the Company; |
| ● | The Company’s Chief Executive Officer and each person who serves as an executive officer of the Company; and all executive officers and directors of the Company as a group. |
Except as otherwise indicated, each of the stockholders listed below has sole voting and investment power over the shares beneficially owned.
| Stock Class | | Name/Address | | Number of Shares | | | Percent | |
| Officers and Directors | | | | | | | | |
| Common | | Matthew L. Schissler, Chairman | | | 46,592,000 | | | | 38.30 | % |
| Common | | Jonathan F. Irwin, CEO | | | 46,592,000 | | | | 38.30 | % |
| Common | | John J. Berkeridge, Jr., Director | | | 1,000,000 | | | | 0.80 | % |
| Officers and Directors as a Group | | | | | 94,184,000 | | | | 78 | % |
| | | | | | | | | | | |
| 5% or More Shareholders | | | | | | | | | | |
| Common | | ANP Industries, Inc. | | | 11,231,424 | | | | 9.20 | % |
| Common | | Tangiers Partners, LP | | | 9,118,108 | | | | 7.50 | % |
__________
* Less than 1% of the outstanding common stock.
(1) Except as noted above, the address for the above identified officer and directors of the Company is c/o Frozen Food Gift Group, Inc., 7514 Girard Avenue, Suite 1705, La Jolla, California, 92037. Beneficial Ownership is determined in accordance with the rules of the Securities and Exchange Commission and generally includes voting or investment power with respect to securities. Shares of common stock subject to options, warrants, or convertible debt currently exercisable or convertible, or exercisable or convertible within 60 days of March 1, 2012 are deemed outstanding for computing the percentage of the person holding such option or warrant. Percentages are based on a total of 121,574,774 shares of common stock outstanding on March 1, 2012.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE.
Certain Relationships and Related Transactions
None.
Director Independence
Mr. Schissler is independent as that term is defined under the NASDAQ Marketplace Rules.
ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES.
David A. Aronson, CPA, P.A., serves as our independent registered public accounting firm and audited our financial statements for the years ended December 31, 2011 and 2010.
| | | 2011 | | | 2010 | |
| Audit fees | | $ | 11,250 | | | $ | 9,500 | |
| | | | | | | | | |
| Tax Fees | | $ | 0 | | | $ | 0 | |
| | | | | | | | | |
| Total | | $ | 11,250 | | | $ | 9,500 | |
The board of directors pre-approves all audit and non-audit services performed by the Company’s auditor and the fees to be paid in connection with such services in order to assure that the provision of such services does not impair the auditor’s independence.
PART IV
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES.
| The following documents are filed as a part of this report or incorporated herein by reference: |
| (1) | Our Consolidated Financial Statements are listed on page F-1 of this Annual Report. |
| (2) | Financial Statement Schedules. |
| | None. |
| (3) | Exhibits: |
The following documents are included as exhibits to this Annual Report:
| EXHIBIT | | DESCRIPTION |
| | Form of Common Stock Share Certificate of Frozen Food Gift Group, Inc. (Filed herewith) |
| 3.0 | | Articles of Incorporation of Frozen Food Gift Group, Inc. (1) |
| 3.1 | | Amendment to Articles of Incorporation (1) |
| 3.2 | | Bylaws of Frozen Food Gift Group, Inc. (1) |
| 10.1 | | Resignation of Director from Company’s Board (previously filed on Form 8-K on January 31, 2012) (1) |
| 10.2 | | Private Issuance of Common Shares (previously filed on Form 8-K filed on February 20, 2012) (1) |
| 23.1 | | Consent of Independent Registered Public Accounting Firm (Filed herewith) |
| 31.1 | | Certification of the registrant’s Principal Executive Officer and Principal Financial Officer pursuant to Securities Exchange Act Rules 13a-14(a) and 15d-14(a) as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (Filed herewith) |
| 32.1 | | Certification of the Company’s Principal Executive Officer and Principal Financial Officer pursuant to pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Filed herewith) |
______
(1) Previously filed and incorporated by reference.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| | FROZEN FOOD GIFT GROUP, INC. | |
| | | | |
| By: | /s/ JONATHAN IRWIN | |
| | | JONATHAN IRWIN | |
| | | Chief Executive Officer | |
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
| Signature | | Title | | Date |
| JONATHAN IRWIN | | Chief Executive Officer | | 3/29/12 |
