U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2002
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission File No. 333-61424
CACH FOODS, INC.
(Exact name of small business issuer as specified in its charter)
NEVADA 82-0505220
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
P.O. BOX 4669
POCATELLO, ID 83205-4669
(Address of principal executive offices)
(866) 922-8073
(Issuer's telephone number)
Not Applicable
(Former name, address and fiscal year, if changed since last report)
Check whether the issuer (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or for
such shorter period that the issuer was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days. Yes [ ] No [
x ]
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE
PRECEDING FIVE YEARS:
Check whether the registrant has filed all documents and reports required to be
filed by Sections 12, 13, or 15(d) of the Exchange Act subsequent to the
distribution of securities under a plan confirmed by a court. Yes [ ] No [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS:
State the number of shares outstanding of each of the issuer's classes of common
equity, as of June 30, 2002: 12,152,000 shares of common stock, par value $0.001
Transitional Small Business Format: Yes [ ] No [ X ]
FORM 10-QSB
CACH FOODS, INC.
(A Development Stage Company)
INDEX
Page
PART I.. Financial Information
Item I. Financial Statements (unaudited) 3
Unaudited Condensed Balance Sheet, June 30, 2002 and
December 31, 2001 4
Unaudited Condensed Statements of Operations, for the three and six
months ended June 30, 2002 and 2001 and for the period from inception
on May 4, 1998 through June 30, 2002 5
Unaudited Condensed Statements of Cash Flows, for the six months
ended June 30, 2002 and 2001 and for the period from inception on
May 4, 1998 through June 30, 2002 6
Notes to Unaudited Condensed Financial Statements 7
Item II. Management's Discussion and Analysis of Financial Condition
or Plan of Operation 11
PART II. Other Information
Item 2. Use of Proceeds from Registered Securities 14
Item 6. Exhibits and Reports on Form 8-K 15
Signatures 15
(Inapplicable items have been omitted)
2
PART I.
FINANCIAL INFORMATION
Item 1. Financial Statements (unaudited)
In the opinion of management, the accompanying unaudited financial statements
included in this Form 10-QSB reflect all adjustments (consisting only of normal
recurring accruals) necessary for a fair presentation of the results of
operations for the periods presented. The results of operations for the periods
presented are not necessarily indicative of the results to be expected for the
full year.
3
CACH FOODS, INC.
[A Development Stage Company]
UNAUDITED CONDENSED BALANCE SHEETS
ASSETS
June 30, December 31,
2002 2001
------------ --------------
CURRENT ASSETS:
Cash . . . . . . . . . . . . . . . . . . . . . . . $ 32,208 $ 1,749
------------ --------------
Total Current Assets . . . . . . . . . . . . . . 32,208 1,749
OTHER ASSETS:
Deferred stock offering costs. . . . . . . . . . . - 17,987
------------ --------------
$ 32,208 $ 19,736
============ =============
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES:
Accounts payable . . . . . . . . . . . . . . . . . $ 1,169 $ 16,820
Advance payable - related party. . . . . . . . . . - 1,404
Note payable - related party . . . . . . . . . . . - 2,000
Accrued interest payable - related party . . . . . - 165
------------ --------------
Total Current Liabilities. . . . . . . . . . . 1,169 20,389
------------ --------------
STOCKHOLDERS' EQUITY (DEFICIT):
Preferred stock $.001 par value, 5,000,000 shares
authorized, no shares issued and outstanding . . - -
Common stock, $.001 par value, 100,000,000 shares
authorized, 12,152,000 and 12,002,000 shares
issued and outstanding, respectively . . . . . . 12,152 12,002
Capital in excess of par value . . . . . . . . . . 51,057 (5,002)
Deficit accumulated during the development stage . (32,170) (7,653)
------------ --------------
Total Stockholders' Equity (Deficit) . . . . . . 31,039 (653)
------------ --------------
$ 32,208 $ 19,736
============ =============
Note: The balance sheet at December 31, 2001 was taken from the audited
financial statements at that date and condensed.
The accompanying notes are an integral part of these unaudited condensed
financial statements.
4
CACH FOODS, INC.
[A Development Stage Company]
UNAUDITED CONDENSED STATEMENTS OF OPERATIONS
For the Three For the Six From Inception
Months Ended Months Ended on May 4,
June 30, June 30, 1998 through
--------------------- ------------------------- June 30,
2002 2001 2002 2001 2002
---------- ---------- ---------- ------------- ----------------
REVENUE . . . . . . . $ - $ - $ - $ - $ -
---------- ---------- ---------- ------------- ----------------
EXPENSES:
Selling . . . . . . 899 - 899 - 899
General and
administrative. . 7,698 3,984 23,602 3,984 31,136
---------- ---------- ---------- ------------- ----------------
Total Expenses. . 8,597 3,984 24,501 3,984 32,035
---------- ---------- ---------- ------------- ----------------
LOSS FROM
OPERATIONS . . . . . (8,597) (3,984) (24,501) (3,984) (32,035)
---------- ---------- ---------- ------------- ----------------
OTHER INCOME
(EXPENSE):
Interest income . . - - - - 46
Interest expense -
related party . . - (50) (16) (57) (181)
---------- ---------- ---------- ------------- ----------------
Total Other
Income
(Expense) . . . - (50) (16) (57) (135)
---------- ---------- ---------- ------------- ----------------
LOSS BEFORE INCOME
TAXES . . . . . . . (8,597) (4,034) (24,517) (4,041) (32,170)
CURRENT TAX EXPENSE . - - - - -
DEFERRED TAX
EXPENSE . . . . . . - - - - -
---------- ---------- ---------- ------------- ----------------
NET LOSS. . . . . . . $ (8,597) $ (4,034) $ (24,517) $ (4,041) $ (32,170)
---------- ---------- ---------- ------------- ----------------
LOSS PER COMMON
SHARE . . . . . . . $ (.00) $ (.00) $ (.00) $ (.00) $ (.01)
---------- ---------- ---------- ------------- ----------------
The accompanying notes are an integral part of these unaudited condensed
financial statements.
5
CACH FOODS, INC.
[A Development Stage Company]
UNAUDITED CONDENSED STATEMENTS OF CASH FLOWS
For the Six From Inception
Months Ended on May 4,
June 30, 1998 through,
------------------------- June 30,
2002 2001 2002
---------- ------------- ----------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss . . . . . . . . . . . . . . . . . . . . . . . $ (24,517) $ (4,041) $(32,170)
Adjustments to reconcile net loss to net cash provided
(used) by operating activities:
Stock issued for services rendered . . . . . . . . . - 1,000 1,000
Changes in assets and liabilities:
Increase (decrease) in accounts payable. . . . . . (15,651) 2,540 1,169
Increase (decrease) in accrued interest payable -
related party. . . . . . . . . . . . . . . . . . (165) 57 -
---------- ------------- ----------------
Net Cash (Used) by Operating Activities. . . . . (40,333) (444) (30,001)
---------- ------------- ----------------
CASH FLOWS FROM INVESTING ACTIVITIES . . . . . . . . . . - - -
---------- ------------- ----------------
Net Cash Provided (Used) by Investing Activities . - - -
---------- ------------- ----------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock . . . . . . . . 75,000 - 81,000
Payments for stock offering costs. . . . . . . . . . . (804) (5,000) (18,791)
Proceeds from note payable - related party . . . . . . - 2,000 2,000
Payments on note payable - related party . . . . . . . (2,000) - (2,000)
Advances from (repayments to) related party. . . . . . (1,404) - -
---------- ------------- ----------------
Net Cash Provided (Used) by Financing Activities . 70,792 (3,000) 62,209
---------- ------------- ----------------
NET INCREASE (DECREASE) IN CASH. . . . . . . . . . . . . 30,459 (3,444) 32,208
CASH AT BEGINNING OF THE PERIOD. . . . . . . . . . . . . 1,749 6,046 -
---------- ------------- ----------------
CASH AT END OF THE PERIOD. . . . . . . . . . . . . . . . $ 32,208 $ 2,602 $ 32,208
---------- ------------- ----------------
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest . . . . . . . . . . . . . . . . . . . . . . $ - $ - $ -
Income taxes . . . . . . . . . . . . . . . . . . . . $ - $ - $ -
SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING AND FINANCING ACTIVITIES:
For the period from inception on May 4, 1998 through June 30, 2002:
On April 20, 2001, the Company issued 2,000 shares of common stock for
director's services valued at $1,000 or $.50 per share.
The accompanying notes are an integral part of these unaudited condensed
financial statements.
6
CACH FOODS, INC.
[A Development Stage Company]
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
ORGANIZATION - Cach Foods, Inc. ("the Company") was organized under the
laws of the State of Nevada on May 4, 1998 as Llebpmac, Inc. Effective
November 2, 2000, the Company changed its name from Llebpmac, Inc. to Cach
Foods, Inc. The Company has not commenced planned principal operations and
is considered a development stage company as defined in Statement of
Financial Accounting Standards No. 7. The Company plans to be a
merchandiser of wholesale snack foods. The Company has, at the present
time, not paid any dividends and any dividends that may be paid in the
future will depend upon the financial requirements of the Company and other
relevant factors.
CONDENSED FINANCIAL STATEMENTS - The accompanying financial statements have
been prepared by the Company without audit. In the opinion of management,
all adjustments (which include only normal recurring adjustments) necessary
to present fairly the financial position, results of operations and cash
flows at June 30, 2002 and 2001 and for the periods then ended have been
made.
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting
principles in the United States of America have been condensed or omitted.
It is suggested that these condensed financial statements be read in
conjunction with the financial statements and notes thereto included in the
Company's December 31, 2001 audited financial statements. The results of
operations for the periods ended June 30, 2002 and 2001 are not necessarily
indicative of the operating results for the full year.
LOSS PER SHARE - The computation of loss per share is based on the weighted
average number of shares outstanding during the period presented in
accordance with Statement of Financial Accounting Standards No. 128,
"Earnings Per Share".
CASH AND CASH EQUIVALENTS - The Company considers all highly liquid debt
investments purchased with a maturity of three months or less to be cash
equivalents.
ACCOUNTING ESTIMATES - The preparation of financial statements in
conformity with generally accepted accounting principles in the United
States of America requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities, the disclosures
of contingent assets and liabilities at the date of the financial
statements, and the reported amount of revenues and expenses during the
reported period. Actual results could differ from those estimated.
RECENTLY ENACTED ACCOUNTING STANDARDS - Statement of Financial Accounting
Standards ("SFAS") No. 141, "Business Combinations", SFAS No. 142,
"Goodwill and Other Intangible Assets", SFAS No. 143, "Accounting for Asset
Retirement Obligations", SFAS No. 144, "Accounting for the Impairment or
Disposal of Long-Lived Assets", and SFAS No. 145, "Rescission of FASB
Statements No. 4, 44, and 64, Amendment of FASB Statement No. 13, and
Technical Corrections", were recently issued. SFAS No. 141, 142, 143, 144
and 145 have no current applicability to the Company or their effect on the
financial statements would not have been significant.
RESTATEMENT - In October 2000, the Company effected a 2-for-1 forward stock
split. The financial statements have been restated, for all periods
presented, to reflect this stock split [See Note 2].
7
CACH FOODS, INC.
[A Development Stage Company]
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
NOTE 2 - CAPITAL STOCK
PREFERRED STOCK - The Company has authorized 5,000,000 shares of preferred
stock, $.001 par value, with such rights, preferences and designations and
to be issued in such series as determined by the Board of Directors. No
shares were issued at June 30, 2002 and December 31, 2001.
COMMON STOCK - The Company has authorized 100,000,000 shares of common
stock, $.001 par value. On August 31, 1998, in connection with its
organization, the Company issued 2,000,000 shares of its previously
authorized, but unissued common stock. The shares were issued for cash of
$1,000 or $.0005 per share.
On September 20, 2000, the Company issued 10,000,000 shares of its
previously authorized but unissued common stock. The shares were issued for
cash of $5,000 or $.0005 per share.
On April 20, 2001, the Company issued 2,000 shares of its previously
authorized but unissued common stock. The shares were issued for director
services valued at $1,000 or $.50 per share.
On January 25, 2002, the Company issued 150,000 shares of its previously
authorized but unissued common stock. The shares were registered on Form
SB-2 and were issued for cash of $75,000 or $.50 per share. Stock offering
costs of $18,791 were offset against the proceeds of the offering in
capital in excess of par value.
STOCK SPLIT - On October 2, 2000, the Company effected a 2-for-1 forward
stock split. The financial statements for all periods presented have been
restated to reflect the stock split.
NOTE 3 - INCOME TAXES
The Company accounts for income taxes in accordance with Statement of
Financial Accounting Standards No. 109 "Accounting for Income Taxes". SFAS
No. 109 requires the Company to provide a net deferred tax asset/liability
equal to the expected future tax benefit/expense of temporary reporting
differences between book and tax accounting methods and any available
operating loss or tax credit carryforwards.
The Company has available at June 30, 2002, unused operating loss
carryforwards of approximately $32,200 which may be applied against future
taxable income and which expire in various years through 2022. The amount
of and ultimate realization of the benefits from the operating loss
carryforwards for income tax purposes is dependent, in part, upon the tax
laws in effect, the future earnings of the Company, and other future
events, the effects of which cannot be determined. Because of the
uncertainty surrounding the realization of the loss carryforwards, the
Company has established a valuation allowance equal to the amount of the
loss carryforwards and, therefore, no deferred tax asset has been
recognized for the loss carryforwards. The net deferred tax assets are
approximately $4,800 and $2,600 as of June 30, 2002 and December 31, 2001,
respectively, with an offsetting valuation allowance at each year end of
the same amount, resulting in a change in the valuation allowance of
approximately $2,200 during the six months ended June 30, 2002.
8
CACH FOODS, INC.
[A Development Stage Company]
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
NOTE 4 - RELATED PARTY TRANSACTIONS
MANAGEMENT COMPENSATION - As of April 19, 2001, the Company had not paid
any compensation to any officer or director of the Company. However, on
April 20, 2001, the Company issued to two of its directors 2,000 shares of
common stock, or 1,000 shares each, for services valued at $1,000 or $.50
per share.
OFFICE SPACE - As of December 31, 2001, the Company had not had a need to
rent office space. On January 1, 2002, the Company signed a lease agreement
with an officer/shareholder of the Company. The Company pays $200 per month
for office space and equipment on a month-to-month basis. Total lease
payments for the six months ended June 30, 2002 and 2001 were $1,200 and
$0, respectively.
ADVANCE PAYABLE - An officer/shareholder of the Company has directly paid
expenses totaling $1,404 on behalf of the Company. In March 2002, the
Company repaid the advances.
NOTE PAYABLE - An officer/shareholder of the Company advanced $2,000 to the
Company as a note payable. The note was due March 5, 2002 and accrued
interest at 10% per annum. In January 2002, the Company repaid the note
payable and the related accrued interest of $181.
NOTE 5 - GOING CONCERN
The accompanying financial statements have been prepared in conformity with
generally accepted accounting principles in the United States of America,
which contemplate continuation of the Company as a going concern. However,
the Company has incurred losses since inception and has not yet commence
planned principal operations. These factors raise substantial doubt about
the ability of the Company to continue as a going concern. In this regard,
management is proposing to raise any necessary additional funds not
provided by operations through loans or through additional sales of its
common stock. There is no assurance that the Company will be successful in
raising this additional capital or in achieving profitable operations. The
financial statements do not include any adjustments that might result from
the outcome of these uncertainties.
9
CACH FOODS, INC.
[A Development Stage Company]
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
NOTE 6 - LOSS PER SHARE
The following data shows the amounts used in computing loss per share:
For the Three For the Six From Inception
Months Ended Months Ended on May 4,
June 30, June 30, 1998 through
------------------------ ----------------------------- June 30,
2002 2001 2002 2001 2002
------------ ----------- ------------- -------------- -----------------
Loss from operations available to
common shareholders (numerator). $ (8,597) $ (4,034) $ (24,517) $ (4,041) $ (32,170)
------------ ----------- ------------- -------------- -----------------
Weighted average number of common
shares outstanding (denominator) 12,152,000 12,001,560 12,131,282 12,000,785 6,127,979
------------ ----------- ------------- -------------- -----------------
Dilutive loss per share was not presented, as the Company had no common
stock equivalent shares for all periods presented that would affect the
computation of diluted loss per share.
NOTE 7 - CONTRACTS AND COMMITMENTS
On October 10, 2000, the Company entered into a licensing agreement with an
officer/shareholder of the Company for exclusive rights to use the brand
name "Idaho Chips". The agreement is cancelable after April 10, 2003 by
either party giving three months written notice to the other. The agreement
requires payment of 5% of gross revenues produced from use of the brand
name to the officer/shareholder of the Company for 30 months. At that
point, if total gross revenues from use of the brand name are at least
$500,000, the agreement will be renewed for an additional 12 months. The
agreement will then be renewed for 12-month terms for each successive
12-month period of $300,000 in gross revenues from use of the brand name.
The agreement is assignable only with prior written consent of the licensor
and the agreement states that selling or transferring more than 50% of the
outstanding stock constitutes an assignment.
10
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION OR PLAN OF OPERATION
FORWARD-LOOKING STATEMENT NOTICE
When used in this report, the words "may," "will," "expect," "anticipate,"
"continue," "estimate," "project," "intend," and similar expressions are
intended to identify forward-looking statements within the meaning of Section
27a of the Securities Act of 1933 and Section 21e of the Securities Exchange Act
of 1934 regarding events, conditions, and financial trends that may affect the
Company's future plans of operations, business strategy, operating results, and
financial position. Persons reviewing this report are cautioned that any
forward-looking statements are not guarantees of future performance and are
subject to risks and uncertainties and that actual results may differ materially
from those included within the forward-looking statements as a result of various
factors. Such factors are discussed under the "Item 2. Management's Discussion
and Analysis of Financial Condition or Plan of Operations," and also include
general economic factors and conditions that may directly or indirectly impact
the Company's financial condition or results of operations.
OUR HISTORY AND BUSINESS
We were formed as a Nevada corporation on May 4, 1998 originally as
Llebpmac, Inc., for the purpose of becoming a restaurant. Before our plan for
Llebpmac to operate as a restaurant was inaugurated, we changed the company's
name to Cach Foods, Inc. and we changed the purpose of the company to be a snack
food wholesale merchandiser in direct response to our research and perceived
demand for American snack foods in Japan. On October 2, 2000, our shareholders
approved a two for one forward split of our outstanding common stock. On
November 1, 2000, we changed our name to Cach Foods, Inc. and we changed our
purpose to be a snack food wholesale merchandiser. Our initial focus will be on
selling Idaho Chips (TM) in the Japanese market through convenience stores. If
demand permits, we will expand production and sell Idaho Chips (TM) to larger
supermarkets as well other Asian countries. We intend to act as a wholesale
merchandiser by sub contracting the actual, manufacturing, packaging, exporting
and selling of Idaho Chips (TM). If successful in the Japanese market, we will
increase the variety of snack foods we offer and expand to other Asian markets.
Cach Foods, Inc. became a public company on October 17, 2001. Since our
initial public offering, we have conducted research and explored design
possibilities for Idaho Chips (TM). We have also began the process of
determining who will manufacture and package our products, what products will be
offered, how prices will be set, which Japanese convenience stores to target and
how to promote our products to importers and distributors.
BUSINESS STRATEGY
Our objective is to become a U.S. exporter to the Asia Pacific of branded
premium kettle style potato chips and other salty snack foods by providing high
quality products at competitive prices. We will use a distribution channel
comprised of intermediaries such as suppliers, manufacturers, wholesalers,
importers and distributors to bring our products to market.
Since our initial public offering have taken steps to achieve these goals.
Specifically, we have accomplished the following:
- Explored design packaging and pricing for Idaho Chips(TM), including:
o Purchased samples of kettle style potato chips sold in the United
States to determine packaging design and manufacturing
possibilities
11
o Purchased a variety of packaging ideas and samples of chips sold
in Japan
o Researched packaging color and design to capitalize in impulse
buying
o Attended the SnaxPo Convention in Chicago, IL to research product
samples, varieties of packaging and potato chip styles
o Researched potential shelf life of canisters and foil containers
o Investigated retail prices of potato chips in Japan's convenience
stores.
- Explored relations with manufacturers to produce kettle style potato
chips using Idaho Chips(TM) customized packaging, including:
o Researching possible kettle style chip manufacturers
o Attending the SnaxPo Convention in Chicago, IL and meeting
potential manufacturing clients and canister suppliers
o Researching co-packing opportunities and packaging alternatives
o Researching production costs and alternatives in product
packaging
o Researching nitrogen flushing capabilities with manufacturers
- Explored relations with Japanese importers, distributors and
convenience stores, including:
o Traveling to Japan to meet with potential Japanese importers and
snack food distributors
o Establishing contact opportunities with Japanese importers and
distributors
o Attending a national food trade show in Japan.
PRODUCTION AND DISTRIBUTION STRATEGIES
Suppliers
The principal raw materials used in our Idaho Chips(TM) are potatoes and
oil. We will not supply our own raw materials, but depend on our manufacturers
to acquire raw materials from independent suppliers. We believe that potatoes
and oil will be readily available to our manufacturers from numerous suppliers
on commercially reasonable terms. Idaho potatoes are available year-round,
either freshly harvested or from storage during the winter months. Many
manufacturers use sunflower oil to produce kettle style potato chips. We believe
that sunflower oil is widely available year-round and that alternative cooking
oils are abundant and readily available. As a result, we do not foresee
manufacturers experiencing substantial difficulties obtaining raw materials for
the production of Idaho Chips(TM).
Manufacturers
We intend to subcontract with independent manufacturers to produce and
package kettle-fried potato chips made from Idaho potatoes. We will evaluate
potential candidates thoroughly in our selection process. To be considered,
candidates must be in compliance with all federal, state, and local government
regulations. In order to be considered, the candidate must have the capacity to
produce kettle style chips. The candidate must also be well capitalized, possess
the necessary production and packaging capacity, and have a strong reputation
for quality production. The candidate must be able to package in foil bags or
canisters in order to ensure long shelf life. We will expect selected
manufacturers to maintain a lab staffed with trained quality control personnel,
capable of performing any tests we may establish. We further intend for the
manufacturer to assume all costs and risks associated with producing and
packaging Idaho Chips(TM). In turn, we will pay a fixed amount for the finished
product.
12
Importers and Distributors
We intend to sell Idaho Chips(TM) primarily in convenience stores in Japan.
We plan to distribute our products through independent international importers
and distributors since we believe it is the most efficient method for reaching
our target market. Importers and distributors will be selected primarily on the
basis of:
- quality of service;
- financial capability; and
- established network of convenience stores.
We intend to service both large convenience store chains and smaller
independent convenience stores. Assuming Idaho Chips (TM) achieves a level of
market penetration and customer acceptance among Japanese convenience stores, we
intend to use our established distribution networks and/or sub contract with
other international distributors to distribute Idaho Chips (TM) to super
markets, delicatessens, and retailers in Japan as well as other Asian countries.
We will consider seeking additional outlets for our products at such time as we
determine our initial target markets are profitable and we have sufficient
revenue or profits to justify expansion.
THREE MONTH AND SIX MONTH PERIODS ENDED JUNE 30, 2002 AND 2001
The Company had no revenue from continuing operations for the three month
and six month periods ended June 30, 2002 and 2001 respectively. This is the
result of the Company's ongoing efforts in developing a market for their
trademark. During the three months ended June 30, 2002, Cach Foods has continued
to implement its business plan. In the past 90 days, the Company has:
- Retained legal counsel to explore registering the Idaho Chips
trademark throughout the United States and in Japan
- Continued to develop relationships with Japanese importers,
distributors and retailers
- Worked towards setting up a sales and distribution network for kettle
chips in Japan
- Continued to research production, packaging and distribution options
- Identified a potential potato chip manufacturer for the Company's
products
The Company does not anticipate generating any revenue until a
manufacturing, marketing and distribution network is established.
General and administrative expenses for the three month periods ended June
30, 2002 and 2001, consisted of general and administrative corporate expenses,
and selling costs. These expenses were $8,597 and $3,984 respectively. The
Company had interest expenses of $50 for the three months ended June 30, 2001
with no interest expenses during the three months ended June 30, 2002. Increased
overall expenses for the period ended June, 2002 were due to increased legal and
professional costs associated with a being a public company.
As a result of the foregoing factors, the Company realized a net loss of
$8,597 for the three months ended June 30, 2002 as compared to a net loss of
$4,034 for the same period in 2001.
General and administrative expenses for the six month periods ended June
30, 2002 and 2001, consisted of general and administrative corporate expenses,
and selling costs. These expenses were $24,501 and $3,984 respectively. The
Company had interest expenses of $16 for the six months ended June 30, 2002
compared to interest expenses of $57 during the six months ended June 30, 2002.
Increased overall expenses for the six months ended June, 2002 were due to legal
and professional costs associated with a public offering of stock on January 25,
2002.
13
As a result of the foregoing factors, the Company realized a net loss of
$24,517 for the six months ended June 30, 2002 as compared to a net loss of
$4,041 for the same period in 2001.
LIQUIDITY AND CAPITAL RESOURCES
At June 30, 2002 the Company had assets consisting of $32,208 cash in hand
and total current liabilities of $1,169 in accounts payable. At December 31,
2001, the Company had assets consisting of $1,749 cash in hand and $17,987 in
deferred stock offering costs for total assets of $19,736 with liabilities of
$20,389. The increase in assets for the period ended June 30, 2002 is due to
proceeds from an issuance of common stock that went effective in January of
2002.
The Company believes that its current cash needs can be met with the cash
on hand from the proceeds of its initial public offering. However, should the
Company find it necessary to raise additional capital, the Company may sell
common stock of the Company or enter into debt financing agreements.
PART II. OTHER INFORMATION
ITEM 2. USE OF PROCEEDS FROM REGISTERED SECURITIES
On January 25, 2002, the Company sold 150,000 shares of its previously
authorized, but unissued common stock for cash of $75,000 or $.50 per share in a
public offering registered with the Security and Exchange Commission on Form
SB-2. The Company has closed the offering. As of June 30, 2002, proceeds have
been allocated as follows:
TOTAL PROCEEDS OF OFFERING 75,000
USE OF PROCEEDS: Total at Total at
3/31/02 6/30/02
------- --------
Less Offering Expenses . . . . . 18,660 18,660
Net Proceeds . . . . . . . . . . 56,340 56,340
Establishing Japanese Contracts. 1,555 2,293
Researching Manufacturers. . . . 1,360 1,585
Supplies . . . . . . . . . . . . 1,586 1,820
Marketing. . . . . . . . . . . . 684 899
Payments to Related Party. . . . 3,404 3,316
Working Capital. . . . . . . . . 6,101 15,969
Funds Available. . . . . . . . . 41,590 32,208
TOTAL EXPENDITURES FROM PROCEEDS 42,732
------
REMAINING PROCEEDS . . . . . . . 32,208
======
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ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
EXHIBIT NUMBER TITLE LOCATION
99.1 Certification of Chief Executive Officer Attached
99.2 Certification of Chief Financial Officer Attached
Reports on Form 8-K: No reports on Form 8-K were filed by the Company
during the quarter ended June 30, 2002
SIGNATURES
In accordance with the Exchange Act, the registrant caused this report to
be signed on its behalf by the undersigned thereunto duly authorized.
CACH FOODS, INC.
Date: August 9, 2002 /s/ Cornelius A. Hofman
-------------------------
Cornelius A. Hofman
President
Date: August 9, 2002 /s/ Kelly McBride
--------------------------
Kelly McBride
Chief Financial Officer
15