Attached files
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EX-10.7 - LOUISIANA FOOD Co | v203250_ex10-7.htm |
EX-99.1 - LOUISIANA FOOD Co | v203250_ex99-1.htm |
EX-23.1 - LOUISIANA FOOD Co | v203250_ex23-1.htm |
EX-10.10 - LOUISIANA FOOD Co | v203250_ex10-10.htm |
As
filed with the Securities and Exchange Commission on November 18,
2010
|
Commission
File Number: 333-169924
|
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
Amendment
No. 1 to
FORM
S-1
REGISTRATION
STATEMENT UNDER THE SECURITIES ACT OF 1933
LOUISIANA
FOOD COMPANY
(Exact
name of registrant as specified in its charter)
Nevada
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2000
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27-3257760
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(State
or Other Jurisdiction
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(Primary
Standard Industrial
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(I.R.S.
Employer
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of
Incorporation or Organization)
|
Classification
Code Number)
|
Identification
No.)
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917
Third Street, Norco, Louisiana 70079
Telephone:
(877) 732-2143
(Address,
including zip code, and telephone number, including area code,
of
registrant’s principal executive offices)
David
Loflin, 917 Third Street, Norco, Louisiana 70079
(877)
732-2143
(Name,
address, including zip code, and telephone number, including area code, of agent
for service)
Copies of communications
to:
Eric
Newlan, Esq.
Newlan
& Newlan
800
Parker Square, Suite 205
Flower
Mound, Texas 75028
Telephone:
(972) 899-4070
Facsimile:
(877) 796-3934
Approximate
date of commencement of proposed sale to the public: From time to time after the
effective date of this registration statement.
If any of
the securities being registered on this Form are to be offered on a delayed or
continuous basis pursuant to Rule 415 under the Securities Act of 1933 check the
following box. ¨
If this
Form is filed to register additional securities for an offering pursuant to Rule
462(b) under the Securities Act, please check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. ¨
If this
Form is a post effective amendment filed under Rule 462(d) of the Securities
Act, check the following box and list the Securities Act registration statement
number of the earlier effective registration statement for the same offering.
¨
Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
the definitions of “large accelerated filer”, “accelerated filer’ and “smaller
reporting company” in Rule 12b-2 of the Exchange Act. (Check one):
Large
accelerated filer ¨
|
Accelerated
filer ¨
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Non-accelerated
filer ¨ (Do
not check if a smaller reporting company)
|
Smaller
reporting company x
|
CALCULATION
OF REGISTRATION FEE
Proposed
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Proposed
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|||||||||||||
Maximum
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Maximum
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|||||||||||||
Offering
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Aggregate
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Amount of
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||||||||||||
Title of Each Class of
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Amount to be
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Price
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Offering
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Registration
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||||||||||
Securities to be Registered
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Registered (1)
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Per Unit
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Price (2)
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Fee (2)
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||||||||||
Common
Stock,
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8,380,000
shares
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(3)
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$ | 0.80 | $ | 6,704,000 | $ | 478.00 | ||||||
$.001
par value per share
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1,000,000 shares
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(4)
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$ | 0.80 | 800,000 | 57.04 | ||||||||
TOTALS
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9,380,000
shares
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$ | 7,504,000 | $ | 535.04 | * |
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*
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$200.64
of this amount was previously
paid.
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(1)
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In
the event of a stock split, stock dividend or similar transaction
involving the common shares of the registrant, in order to prevent
dilution, the number of shares of common stock registered shall be
automatically increased to cover additional shares in accordance with Rule
416(a) under the Securities Act of 1933, as
amended.
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(2)
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The
offering price has been estimated solely for the purpose of computing the
amount of the registration fee in accordance with Rule
457(o). Our common stock is not traded on any national exchange
and, in accordance with Rule 457, the offering price was determined
arbitrarily by our Board of Directors. The non-affiliate selling
shareholders may sell shares of our common stock at a fixed price of $.80
per share until our common stock is quoted on the Over-the-Counter
Bulletin Board (OTCBB) and thereafter at prevailing market prices or
privately negotiated prices; the affiliate selling shareholders, one
officer and a promoter, who are considered underwriters, must offer their
shares at a fixed price of $.80 per share even if our shares are quoted on
the OTCBB. There can be no assurance that a market maker will
agree to file the necessary documents with the Financial Industry
Regulatory Authority (FINRA), which operates the OTCBB, nor can there be
any assurance that such an application for quotation will be
approved.
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(3)
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Existing
Shareholders.
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(4)
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Direct
Public Offering.
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The
Registrant hereby amends this Registration Statement on such date or dates as
may be necessary to delay its effective date until the Registrant shall file a
further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933, as amended, or until the Registration Statement shall
become effective on such date as the Securities and Exchange Commission, acting
pursuant to said Section 8(a), may determine.
THE
INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE
MAY NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS
NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY
THESE SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT
PERMITTED.
PROSPECTUS
Subject
to completion, dated November 18, 2010
LOUISIANA FOOD
COMPANY
9,380,000 Shares of Common Stock |
|
This
is the initial public offering of Louisiana Food Company. All costs
associated with the registration statement of which this Prospectus is a part
will be borne by us. Of the 9,380,000 shares of common stock offered
by this Prospectus, 1,000,000 shares are being sold by us and 8,380,000 shares
are being sold by the Selling Shareholders identified in this Prospectus. We
will not receive any proceeds from the sale of shares by the Selling
Shareholders.
Direct
Public Offering Prospectus
1,000,000
of the shares of common stock being offered under this Prospectus are being
offered by our company in a direct public offering without any involvement of
underwriters or broker-dealers, at a fixed price of $.80 per
share. Should all shares being offered by our company hereunder be
sold, we would receive proceeds in the aggregate amount of
$800,000.
There
has never been a market for our common stock and a public market may never
develop, or, if any market does develop, it may not be sustained. Our common
stock is not traded on any exchange or on the over-the-counter
market. We intend to have a market maker file an application with the
Financial Industry Regulatory Authority (“FINRA”) for our common stock to become
eligible for trading on the Over-the-Counter Bulletin Board (the
“OTCBB”). We do not yet have a market maker who has agreed to file
such an application. There can be no assurance that our common stock will ever
be quoted on a stock exchange or a quotation service or that any market for our
common stock will develop. The Direct Public Offering does not
require that we sell a minimum number of shares. The proceeds from
the sale of our shares in this Direct Public Offering will immediately be
payable to us and used in our operations. Funds will be deposited in
our corporate bank account. As a result, creditors could attach the
funds.
In
offering the common stock, our officers and directors will rely on the safe
harbor from broker-dealer registration contained in Rule 3a4-1 under the
Securities Exchange Act of 1934 (the “Exchange Act”). The shares will
be offered by us for a period of 180 days from the date of this Prospectus,
unless extended by our Board of Directors for an additional 90
days.
Offering Price Per Share
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Commissions
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Gross Proceeds
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|||||||
1,000,000
Shares of Common Stock
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$ | .80 |
Not
Applicable
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$ | 800,000 |
Resale
Offering Prospectus
8,380,000
of the shares of common stock being offered hereunder are being offered by the
Selling Shareholders (the “Resale Offering”). The Non-affiliate
Selling Shareholders may sell shares of our common stock at a fixed price of
$.80 per share until our common stock is quoted on the OTCBB and thereafter at
prevailing market prices or privately negotiated prices; the Affiliate Selling
Shareholders, one officer and a promoter, who are considered underwriters, must
offer their shares at a fixed price of $.80 per share even if our shares are
quoted on the OTCBB.
The
Resale Offering Prospectus is substantively identical to the Direct Public
Offering Prospectus, except for the following principal points:
|
·
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each
contains different outside front
covers;
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|
·
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each
contains different “Prospectus Summary”
sections;
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·
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each
contains different “Use of Proceeds”
sections;
|
|
·
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each
contains different “Plan of Distribution” sections, with the “Plan of
Distribution” section of the Resale Prospectus containing a description of
the Selling Shareholders; and
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|
·
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each
contains different “Dilution”
sections.
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We
have included herein, immediately following the financial statements, a set of
alternate pages to reflect the foregoing differences between the Direct Public
Offering Prospectus and the Resale Offering Prospectus, which alternate pages
will appear in the Resale Offering Prospectus.
INVESTING
IN OUR COMMON STOCK INVOLVES VERY HIGH RISKS. SEE "RISK FACTORS" BEGINNING ON
PAGE 5.
NEITHER
THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS
APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE ADEQUACY OR
ACCURACY OF THE PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
WE
HAVE NOT AUTHORIZED ANY DEALER, SALESPERSON OR OTHER PERSON TO GIVE ANY
INFORMATION OR REPRESENT ANYTHING NOT CONTAINED IN THIS PROSPECTUS. YOU SHOULD
NOT RELY ON ANY UNAUTHORIZED INFORMATION. THIS PROSPECTUS DOES NOT OFFER TO SELL
OR BUY ANY SHARES IN ANY JURISDICTION IN WHICH IT IS UNLAWFUL. THE INFORMATION
IN THIS PROSPECTUS IS CURRENT AS OF THE DATE ON THE COVER.
Dealer
Prospectus Delivery Obligation
Until
_________________ (90 days from the date of this Prospectus) all dealers that
effect transactions in these securities, whether or not participating in this
offering, may be required to deliver a Prospectus. This is in addition to the
dealers' obligation to deliver a Prospectus when acting as underwriters and with
respect to their unsold allotments or subscriptions.
The
date of this Prospectus is ____________, 2010.
AS
WORKS OF ART, OUR PRODUCT LABELS CAPTURE
|
THE MOVEMENT AND ENERGY THAT IS SOUTH
LOUISIANA
|
-2-
TABLE
OF CONTENTS
Page
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Prospectus
Summary
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3
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Summary
Financial Information
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5
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Risk
Factors
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5
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Determination
of Offering Price
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14
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Use
of Proceeds
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14
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Plan
of Distribution
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14
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State
Securities (Blue Sky) Laws
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16
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Dilution
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17
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Description
of Securities
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18
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Business
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20
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Management’s
Discussion and Analysis of Financial Condition and Results of
Operations
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27
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Directors,
Executive Officers, Promoters and Control Persons
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31
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Executive
Compensation
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32
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Security
Ownership of Certain Beneficial Owners and Management
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34
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Certain
Relationships and Related Transactions
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35
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Legal
Matters
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36
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Experts
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36
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Commission
Position on Indemnification for Securities Act
Liabilities
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36
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Where
You Can Find More Information
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36
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Index
to Financial Statements
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37
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You
should rely only on the information contained or incorporated by reference in
this Prospectus in deciding whether to purchase our common stock. We have not
authorized anyone to provide you with information different from that contained
or incorporated by reference in this Prospectus. Under no circumstances should
the delivery to you of this Prospectus or any sale made pursuant to this
Prospectus create any implication that the information contained in this
Prospectus is correct as of any time after the date of this Prospectus. To the
extent that any facts or events arising after the date of this Prospectus,
individually or in the aggregate, represent a fundamental change in the
information presented in this Prospectus, this Prospectus will be updated to the
extent required by law.
PROSPECTUS
SUMMARY
The
following summary highlights material information contained in this
Prospectus. This summary does not contain all of the information you
should consider before investing in our common stock. Before making
an investment decision, you should read this Prospectus carefully, including the
section entitled “Risk Factors” and the financial statements and the notes
thereto. You should also review the other available information
referred to under “Where You Can Find More Information”, as well as any
amendment or supplement hereto. Unless otherwise indicated, the terms
“we”, “us” and “our” refer and relate to Louisiana Food Company, a Nevada
corporation.
The
Issuer
Louisiana
Food Company was incorporated in the State of Nevada on August 17,
2010. It is our intention to focus on locating, developing and
commercializing food-related business opportunities in the State of
Louisiana.
We
have established three lines of “Certified” Louisiana specialty food products:
(1) packaged dry products, (2) sauce products and (3) coffee
products. We will market our packaged dry products under our
“Louisiana Food Company” brand name; we will market our sauce products under our
“The Quarter’s” brand name; we market our coffee products under our
“Tchoupitoulas Coffee Company” trade name (“Tchoupitoulas” is pronounced
“chop-uh-too-lus”). We will sell these specialty food product lines to
distributors, directly to retail grocery stores, directly to other retailers and
directly to consumers through our online store. (See
“Business”).
-3-
In
September 2010, we received the first purchase order for our specialty food
products. In November 2010, we completed our first sales to two
retail grocery stores and made our first sales directly to consumers through our
online store. By December 1, 2010, we expect to have fulfilled the
first orders of our packaged dry products and sauce products.
Our
continued operations are dependent on our ability to obtain financing and upon
our ability to achieve future profitable operations from our specialty food
product sales. Our independent registered public accounting firm (our
auditors) included in its audit report an explanatory paragraph as to an
uncertainty with respect to our ability to continue as a going
concern. If we are not able to continue as a going concern, it is
likely investors will lose their investments.
Our
corporate office is located at 917 Third Street, Norco, Louisiana 70079; our
telephone number is (877) 732-2143; our corporate web site is
www.lafoodco.com.
Securities
Offered
This
Prospectus relates to the sale of up to 1,000,000 shares of our common stock by
our company in a direct public offering without any involvement of underwriters
or broker-dealers, at a fixed price of $.80 per share. (See “Plan of
Distribution”).
No
Public Market
There is
no public market for our common stock. We cannot give any assurance
that the shares being offered will have a market value, or that they can be
resold at the offered price if and when an active secondary market might
develop, or that a public market for our securities may be sustained even if
developed. The absence of a public market for our common stock will
make it difficult to sell your shares. We intend to have a market
maker file an application with FINRA for our common stock to become eligible for
trading on the OTCBB.
Duration
of Offering
This
Direct Public Offering of common stock by our company will be made for a period
not to exceed 180 days, unless extended by our Board of Directors for an
additional 90 days.
Shares
Outstanding
Before
This Offering. There are 25,880,000 shares of our common stock
issued and outstanding as of the date of this Prospectus.
After
This Offering. Following this Direct Public Offering, if our
company sells all 1,000,000 shares offered, there will be 26,880,000 shares of
our common stock issued and outstanding.
Offering
Proceeds
We are
offering a total of 1,000,000 shares of common stock at an offering price of
$.80 per share, for a total of $800,000 in proceeds.
Use
of Proceeds
Proceeds
derived from this Direct Public Offering will be used for equipment purchases,
product development, marketing expenses, general and administrative expenses and
working capital. (See “Use of Proceeds”).
No
assurance can be given that the proceeds from this Direct Public Offering will
be sufficient to accomplish our goals. If proceeds from this Direct
Public Offering are insufficient, we may be required to seek additional
capital. No assurance can be given that we will be able to obtain
such additional capital or, if available, that such additional capital will be
available on terms acceptable to us.
-4-
Risk
Factors
An
investment in our common stock involves a high degree of risk. You
should carefully consider the information included in the “Risk Factors” section
of this Prospectus, as well as the other information contained in this
Prospectus, prior to making an investment decision regarding our common
stock.
SUMMARY
FINANCIAL INFORMATION
The
following summary financial data should be read in conjunction with
“Management’s Discussion and Analysis of Financial Condition and Results of
Operations”, as well as the financial statements and notes thereto, beginning on
page F-1of this Prospectus. The Balance Sheet Data and the Statement
of Operations Data presented below is derived from our audited financial
statements.
Balance
Sheet Data
|
Statement
of Operations Data
|
||||||||
As at 9/30/10
|
For the Period from Inception (8/17/10) through
9/30/10
|
||||||||
Current
assets
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$ | 27,987 |
Revenues
|
$ | — | ||||
Total
assets
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$ | 40,415 |
Cost
of goods
|
$ | — | ||||
Total
liabilities
|
$ | — |
Gross
profit
|
$ | — | ||||
Stockholders’
equity
|
$ | 40,415 |
Operating
expenses
|
$ | 35,361 | ||||
Net
loss
|
$ | (35,361 | ) | ||||||
Net
loss per share
|
$ | (0.00 | ) |
RISK
FACTORS
An
investment in our common stock involves a high degree of risk. You should
carefully consider the risks described below and the other information in this
Prospectus before investing in our common stock. The occurrence of
any of the following risks could have a material adverse effect on our business,
financial condition and results of operations.
Risks
Related to Our Business
Our
lack of operating history makes it difficult to predict our future operating
results.
We were
incorporated on August 17, 2010. For the period from our inception
through September 30, 2010, we had no revenues and incurred a net loss of
$(35,361). (See “Management’s Discussion and Analysis of Financial
Condition and Results of Operation”).
Because
we have a limited operating history, it is difficult to forecast our future
operating results. Additionally, our operations will continue to be
subject to risks inherent in the establishment of a new business, including,
among other factors, efficiently deploying our capital, developing new product
offerings, developing and implementing our marketing campaigns and strategies
and developing awareness and acceptance of our specialty food
products. Our ability to generate future revenues will be dependent
on a number of factors, including overall demand for our specialty food products
and market competition. As with any investment in a company with a
limited operating history, ownership of our common stock involves a high degree
of risk and is not recommended if an investor cannot reasonably bear the risk of
a total loss of his investment.
The
report of our independent auditors indicates uncertainty concerning our ability
to continue as a going concern and this may impair our ability to raise capital
to fund our business plan.
In its
opinion on our financial statements for the period ended September 30, 2010, our
independent auditors raised substantial doubt about our ability to continue as a
going concern. We cannot assure you that this will not impair our
ability to raise capital on attractive terms. Additionally, we cannot
assure you that we will ever achieve significant revenues and therefore remain a
going concern. Our financial statements do not include any adjustments that
might result from the outcome of this uncertainty.
-5-
If
we do not obtain additional funding for our operations, the value of our common
stock could be adversely affected.
As of
September 30, 2010, we had $27,987 in working capital and cash of
$22,353. Currently, we possess approximately $25,000 in
cash. Given the current structure of our business, we estimate that
our cash position is sufficient to support our operations for at least the next
six months. However, in order for us to expand our current operations
and implement our complete business plan, we will be required to obtain
additional capital, including through our Direct Public Offering hereunder, or
employ other financing alternatives. No assurance can be given that
we will be able to obtain additional funds. In addition, in the
absence of the receipt of additional funding, we may be required to scale back
current operations or cease operations completely.
Changes
in general economic and political conditions affect consumer spending and may
harm our revenues, operating results and/or liquidity.
The
United States is currently in a recession. Our management believes
that these weak general economic conditions will continue through 2010 and well
into 2011. The ongoing impacts of rising unemployment and financial
market weakness may further exacerbate current economic
conditions. As the economy continues to display weakness, customers
may reduce their level of discretionary spending. A decrease in
spending due to lower consumer discretionary income or consumer confidence in
the economy could impact the amount consumers spend on specialty food items,
like those produced by our company. These circumstances would likely
decrease our revenues and negatively affect our operating
results. Additionally, we believe there is a risk that, if the
current negative economic conditions persist for a long period of time and
become more pervasive, consumers might make long-lasting changes to their
spending behavior, including the purchase of fewer specialty food items, on a
more permanent basis.
We
may be unable to obtain sufficient capital to pursue our growth
strategy.
Currently,
we do not have sufficient financial resources to implement our complete business
plan. Specifically, we lack the capital to expand quickly our specialty food
product distribution channels, to locate and acquire rights to specialty food
products owned by third parties and to make acquisitions of existing food
companies, should circumstances permit. There is no assurance that we
will be able to generate revenues that are sufficient to sustain our operations,
nor can we assure you that we will be able to obtain additional sources of
financing in order to satisfy our working capital needs.
If
we are unable to retain key personnel, it will have an adverse affect on our
business; we do not maintain “key man” life insurance policies on key
personnel.
Our
operations have been, and will continue to be, dependent on the efforts of David
Loflin, our President, and Waddell D. Loflin, our Chief Financial Officer and
Corporate Secretary. The development of our business is dependent on
retaining the services of Messrs. Loflin and Loflin. As we cannot afford to hire
management personnel, the loss of these persons would adversely affect our
products and business and could have a materially adverse effect on our
business, operating results and financial condition.
We have
not purchased “key man” life insurance policies. Even if we were to
obtain “key man” insurance for Messrs. Loflin and Loflin, of which there is no
assurance, the amount of such policies may not be sufficient to cover losses
experienced by us as a result of the loss of these persons.
Our
management serves us on a part-time basis and conflicts may arise.
David
Loflin and Waddell D. Loflin perform employee-like services for us on a
part-time basis. Each of these persons has committed to working up to
30 hours per week for the benefit of our company. These persons have
not been compensated for their services to date and have agreed to work for no
cash remuneration, until such time as we generate sufficient revenues for the
payment of salaries to our management. We have not entered into
employment agreements with either of these persons; we expect to enter into
employment agreements with these persons at an as-yet determined time in the
future. These individuals have other work-related responsibilities
outside of our company. While each will seek to devote sufficient
time to allow us to operate on a basis that is beneficial to our shareholders,
this goal may not be accomplished and our operating results may be negatively
impacted by the unavailability of these key personnel.
-6-
Our
officers do not have employment agreements with us and could cease working for
us at any time, thereby causing us to cease our operations.
Our
officers do not have employment agreements with us. In the absence of
employment agreements with a restrictive covenant on their part, these persons
could leave us at any time and commence working for a competing
company. Accordingly, the continued services of our officers cannot
be assured. If any of our officers were to cease working for us, we might be
forced to cease operations.
Our
business plan is not based on independent market studies, so we cannot assure
you that our strategy will be successful.
We have
not commissioned any independent market studies concerning any facet of the
specialty food industry. Rather, our plans for implementing our business
strategy and achieving profitability are based on the experience, judgment and
assumptions of our management and upon other available information concerning
the specialty food industry in the U.S. If our management’s
assumptions prove to be incorrect, we will not be successful in our
efforts.
We
will need to attract additional management personnel.
We
believe our current officers will be able to satisfy our senior management needs
for the initial phase of our business plan. Thereafter, we will be required to
hire additional executive officers and other staff members with experience in
the food industry and in general business matters. Our inability to
hire or retain experienced personnel would severely limit our ability to develop
successfully our operations.
If
we are unable to manage future expansion effectively, our business may be
adversely impacted.
In the
future, we may experience rapid growth in operations, which could place a
significant strain on our operations, in general, and our internal controls and
other managerial, operating and financial resources, in particular. If we do not
manage future expansion effectively, our business will be harmed. There is, of
course, no assurance that we will experience rapid development in our
business.
Potential
future acquisitions could be difficult to locate and integrate, divert the
attention of key personnel, disrupt our business, dilute shareholder value and
adversely affect our financial results.
As
part of our business strategy, after we have better established the sales and
distribution channels of our current lines of specialty food products, we intend
to consider acquisitions of existing food-related businesses, as such
acquisition opportunities become available to us. However, we may not
find suitable acquisition opportunities. Acquisitions involve
numerous risks, any of which could harm our business,
including:
|
·
|
difficulties
in integrating the operations, technologies, products, existing contracts,
accounting processes and personnel of the target company and realizing the
anticipated synergies of the combined
businesses;
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|
·
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difficulties
in supporting customers of the target company or
assets;
|
|
·
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diversion
of financial and management resources from our then-existing
operations;
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|
·
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the
price we pay or other resources that we devote to an opportunity may
exceed the value we realize, or the value we could have realized, if we
had allocated the purchase price or other resources to another
opportunity;
|
|
·
|
potential
loss of key employees, customers and strategic alliances from either our
current business or the business of the target
company;
|
|
·
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assumption
of unanticipated problems or latent liabilities, such as problems with the
quality of the products of the target company;
and
|
|
·
|
inability
to generate sufficient revenue to offset acquisition
costs.
|
-7-
Acquisitions
also frequently result in the recording of goodwill and other intangible assets
which are subject to potential impairments in the future that could harm our
financial results. In addition, if we finance acquisitions by issuing
convertible debt or equity securities, our existing shareholders’ ownership may
be diluted. As a result, if we fail properly to evaluate acquisitions, we may
not achieve the anticipated benefits of any such acquisitions, and we may incur
costs in excess of those that we anticipate. The failure to evaluate and execute
successfully acquisitions or otherwise adequately address these risks could
materially harm our business and financial results and, in turn, the market
price for our common stock.
We
have only a single source for our packaged dry products and a single source for
our coffee products.
Currently,
we have only a single source for our packaged dry products and a single source
for our coffee products. This circumstance leaves us vulnerable to supply
interruptions that are beyond our control. While our management is
attempting to diversify our supply sources, there is no assurance that they will
be successful in these efforts. Prospective investors should
understand that any product supply interruption can be expected to have a
materially adverse effect on our operating results and, likely, an adverse
effect on the market price for our common stock.
We
rely on oral agreements with the suppliers of our packaged dry products and our
coffee products.
Because
we rely on oral agreements with the suppliers of our packaged dry products and
our coffee products, we are vulnerable to such suppliers’ refusing to sell us
needed products. While we do not anticipate that such a circumstance
would arise, should such circumstance, in fact, arise, we would be without legal
recourse against such suppliers. Any product supply interruption can
be expected to have a materially adverse effect on our operating results and,
likely, an adverse effect on the market price for our common
stock.
We
have no contractual right to inspect or monitor the third parties who produce
products on our behalf.
As we
rely on oral agreements with the suppliers of our package dry products and our
coffee products, we have no contractual right to inspect or monitor their
respective operations. Due to this circumstance, we will be unable to
compel these suppliers to utilize ingredients of the high quality we desire or
that these suppliers employ production techniques that would yield products of a
consistency we desire. It can be expected that a diminution in
ingredient quality and/or product consistency would have a materially adverse
effect on our operating results.
Our
company does not own its certified commercial kitchen facility.
For the
foreseeable future, we will not own a certified commercial kitchen
facility. Rather, we will rent a certified commercial kitchen
facility from a third party. Should this third party fail to maintain
the certification of its commercial kitchen facility, we would be forced to
secure the use of another facility. This circumstance could have a
materially adverse effect on our operating results for an indefinite period of
time.
We
have a small number of customers.
Only one
customer delivered a purchase order for our specialty food products during the
period from August 17, 2010 (inception), through September 30,
2010. Our failure to increase our customer base would have a material
adverse effect on our results of operations and financial
condition.
Our
specialty food products are new and do not enjoy name recognition and their
regional popularity may not extend beyond the region.
It will
be difficult to generate sales of our specialty food products, because they are
new and do not enjoy name recognition. In addition, our specialty
food products are versions of long-standing favorites of the South Louisiana
region and we cannot assure you that this same popularity will extend beyond
South Louisiana. Our business will fail, should we be unable to
attract a large number of purchasers of our new products.
-8-
Our
product liability insurance may not be adequate to pay a damage award against
our company.
While our
management believes our current product liability insurance coverage is
appropriate for our level of business operations, there can be no assurance that
such will be the case. It is possible that our company would be
unable to respond to an award of damages in excess of our policy’s coverage
limits. Should a situation arise, it could result in a materially
adverse impact to our then-financial condition.
Competition
from other purveyors of food products could adversely affect our revenues and
financial condition.
The food
business is highly competitive. We expect competition to intensify in
the future. Numerous brands and products compete for retail shelf
space and sales, with competition based primarily on price, quality and
convenience. We compete with a significant number of companies of
varying sizes, including divisions or subsidiaries of large, vertically
integrated, international companies. A vast majority of our
competitors feature broader product lines and possess substantially greater
financial and other resources than does our company. There can be no
assurance that we will be able to compete effectively. A failure to
compete effectively will result in diminished revenue and will have a materially
adverse effect on our business, operating results and financial
condition.
Changes
in food costs could negatively impact our results of operations.
The
profitability of our specialty food products business is dependent, in part, on
our ability to anticipate and react to changes in the cost of raw
products. Any disruption in the supply of needed items due to quality
or availability issues could cause our food costs to
fluctuate. Additional factors beyond our control, including adverse
weather conditions and governmental regulation, may affect our cost of raw
products. We may not be able to anticipate and react to these
changing costs through our purchasing practices and price adjustments, and the
failure to do so could negatively impact our operating results.
Risks
Related to this Offering
As
there is no minimum offering hereunder, should only a few persons purchase
shares, it is likely that they will lose their investments.
Our
business plan requires us to obtain $800,000 in order for us to implement our
full business growth strategy. Because there is no minimum under this Direct
Public Offering, we may not obtain enough capital to implement fully our
business plan. In such an event, it is highly likely that any investment in our
company would be lost. In such event, proceeds from this Direct
Public Offering may not be sufficient to meet the objectives we state in this
Prospectus, other corporate objectives that we may set or to avoid a “going
concern” modification in future reports of our auditors as to uncertainty with
respect to our ability to continue as a going concern. If we fail to
raise sufficient capital, it is expected that we would be forced to slow the
growth of our business.
Investing
in our company is a highly speculative investment and could result in the loss
of your entire investment.
A
purchase of our common stock is highly speculative and involves significant
risks. The common stock should not be purchased by any person who cannot afford
the loss of his entire purchase price. The business objectives of our company
are also speculative, and we may be unable to satisfy those
objectives. Our shareholders may be unable to realize a substantial,
or any, return on their investments and may lose their entire
investments.
-9-
Risks
Related to Our Common Stock
The
Selling Shareholders may compete with our company for buyers of shares, making
it potentially more difficult for us to raise money.
Simultaneously
with the Direct Public Offering, the Selling Shareholders are offering 8,380,000
shares of our common stock pursuant to a Resale Offering
Prospectus. As a result, the Selling Shareholders may compete with us
for buyers of shares, thereby making it potentially more difficult for our
company to obtain additional funds through sales of our common stock
hereunder. Our failure to raise additional funds could have an
adverse impact on our ability to continue as a going concern.
Currently,
there is no public market for our common stock; there can be no assurance that
any public market will ever develop or that our common stock will be quoted for
trading.
Prior to
the date of this Prospectus, there has not been any established trading market
for our common stock, and there is currently no public market whatsoever for our
securities. We intend to have a market maker file an application with
FINRA on our behalf for the quotation of our common stock on the OTCBB
maintained by FINRA commencing upon the effectiveness of the registration
statement of which this Prospectus is a part. There can be no
assurance as to whether a market maker will actually file the application or
that, if filed, such application will be accepted by FINRA. We are
not permitted to file such application on our own behalf. If the
application is accepted, there can be no assurances as to whether any market for
our shares will develop or the prices at which our common stock will
trade. If the application is accepted, we cannot predict the extent
to which investor interest in us will lead to the development of an active,
liquid trading market. Active trading markets generally result in
lower price volatility and more efficient execution of buy and sell orders for
investors.
The
market price for our common stock may be volatile.
Our
common stock is unlikely to be followed by any market analysts and it can be
expected that there may be few institutions that will act as market makers for
our common stock. The existence of either of these circumstances
could adversely affect the liquidity and trading price of our common
stock. Until our common stock is fully distributed and an orderly
market develops in our common stock, if ever, the price at which it trades is
likely to fluctuate significantly. Prices for our common stock will be
determined in the marketplace and may be influenced by many factors, including
the depth and liquidity of the market for shares of our common stock,
developments affecting our business, including the impact of the factors
referred to elsewhere in these Risk Factors, investor perception and general
economic and market conditions. No assurances can be given that an
orderly or liquid market will ever develop for the shares of our common
stock. Because of the anticipated low price of our common stock, many
brokerage firms may not be willing to effect transactions therein.
In
addition, the securities markets have, from time to time, experienced
significant price and volume fluctuations that are unrelated to the operating
performance of particular companies. These market fluctuations may
also materially and adversely affect the market price of our common
stock.
Our
Board of Directors is authorized to issue shares of preferred stock, which may
have rights and preferences detrimental to the rights of the holders of our
common stock.
We are
authorized to issue up to 5,000,000 shares of preferred stock, $.001 par
value. As of the date of this Prospectus, we have not issued any
shares of preferred stock. Our preferred stock may bear such rights
and preferences, including dividend and liquidation preferences, as the Board of
Directors may fix and determine from time to time. Any such
preferences may operate to the detriment of the rights of the holders of the
common stock being offered hereby.
We
do not intend to pay dividends on our common stock.
We intend
to retain earnings, if any, to provide funds for the implementation of our
business strategy. We do not intend to declare or pay any dividends
in the foreseeable future. Therefore, there can be no assurance that
holders of our common stock will receive any cash, stock or other dividends on
their shares of our common stock, until we have funds which our Board of
Directors determines can be allocated to dividends.
-10-
If
you purchase shares of our common stock hereunder, you will experience
substantial dilution of your investment.
Purchasers
of common stock hereunder will suffer substantial and immediate dilution, due to
the lower book value per share of our common stock compared to the purchase
price per share of our common stock hereunder. (See
“Dilution”).
Purchasers
of common stock hereunder will suffer dilution in their ownership, should our
currently outstanding warrants be exercised by their holders.
Currently,
we have outstanding 5,100,000 currently exercisable warrants to purchase a like
number of shares of our common stock. Purchasers of common stock
hereunder will suffer dilution in their ownership, to the extent any of these
warrants are exercised by their holders. However, the exact dilution
in ownership cannot be predicted by us.
As
a public company, we will incur audit fees and legal fees in connection with the
preparation of our required financial reporting under the Exchange Act, which
costs could reduce or eliminate our ability to earn a profit.
Following
the effective date of our registration statement of which this Prospectus is a
part, we will be required to file periodic reports with the SEC pursuant to the
Exchange Act, including the rules and regulations promulgated
thereunder. In order to comply with these requirements, our
independent registered public accounting firm will be required to review our
financial statements on a quarterly basis and audit our financial statements on
an annual basis. Moreover, our legal counsel will be required to review and
assist in the preparation of such reports. While the fees charged by
these professionals for their services cannot be accurately predicted at this
time, it can be expected that these fees will have a significant impact on our
ability to earn a profit. We may be exposed to potential risks resulting from
new requirements under Section 404 of the Sarbanes-Oxley Act of
2002. If we cannot provide reliable financial reports or prevent
fraud, our business and operating results could be harmed, investors could lose
confidence in our reported financial information and the trading price of our
common stock, if a market ever develops, could drop significantly.
FINRA
sales practice requirements may limit a shareholder’s ability to buy and sell
our common stock.
FINRA has
adopted rules that relate to the application of the SEC’s “penny stock” rules in
trading our securities and require that a broker-dealer have reasonable grounds
for believing that the investment is suitable for that customer, prior to
recommending the investment. Prior to recommending speculative, low-priced
securities to their non-institutional customers, broker-dealers must make
reasonable efforts to obtain information about the customer’s financial status,
tax status, investment objectives and other information.
Under
interpretations of these rules, FINRA believes that there is a high probability
that speculative, low-priced securities will not be suitable for at least some
customers. FINRA requirements make it more difficult for broker-dealers to
recommend that their customers buy our common stock, which may have the effect
of reducing the level of trading activity and liquidity of our common
stock. Further, many brokers-dealers charge higher transactional fees
for penny stock transactions. As a result, fewer broker-dealers may
be willing to make a market in our common stock, thereby reducing a
shareholder’s ability to resell shares of our common stock.
We
anticipate our common stock being quoted on the OTCBB, which may result in
limited liquidity and the inability of our shareholders to maintain accurate
price quotations of the common stock.
Until our
shares of common stock qualify for inclusion in the NASDAQ system, if ever, the
trading of our common stock, if any, will be in the over-the-counter market
which is commonly referred to as the OTCBB, as maintained by
FINRA. As a result, an investor may find it difficult to dispose of,
or to obtain accurate quotations as to, the price of our common
stock.
-11-
If
a market develops for our common stock, sales of our common stock in reliance
upon Rule 144 may depress prices in that market by a material
amount.
All of
the outstanding shares of our common stock are “restricted securities” within
the meaning of Rule 144 under the Securities Act of 1933, as amended (the
“Securities Act”). As restricted shares, these shares may be resold
only pursuant to an effective registration statement or under the requirements
of Rule 144 or other applicable exemptions from registration under the
Securities Act and as required under applicable state securities
laws. Rule 144 provides, in essence, that a person who has held
restricted securities for a prescribed period may, under certain conditions,
sell every three months, in brokerage transactions, a number of shares that does
not exceed 1% of a company’s outstanding common stock. The
alternative amount of permissible sales, average weekly trading volume during
the four calendar weeks prior to the sale, is not available to our shareholders
in that the OTCBB (if and when listed thereon) is not an “automated quotation
system”. Market based volume limitations are not available for
securities quoted only over the OTCBB. As a result of the 2008
revisions to Rule 144, there is no limit on the amount of restricted securities
that may be sold by a non-affiliate (i.e., a shareholder who has not been an
officer, director or control person for at least 90 consecutive days) after the
restricted securities have been held by the owner for a period of one
year. A sale under Rule 144 or under any other exemption from the
Securities Act, if available, or pursuant to registration of shares of common
stock of present shareholders, may have a depressive effect upon the price of
the common stock in any market that may develop.
Any
trading market that may develop for our common stock may be restricted by virtue
of state securities “Blue Sky” laws, which prohibit trading absent compliance
with individual state laws; these restrictions may make it difficult or
impossible to sell shares of our common stock in those states.
There is
no public market for our common stock and there can be no assurance that any
public market will develop in the foreseeable future. Transfer of our
common stock may also be restricted under the securities laws or securities
regulations promulgated by various states and foreign jurisdictions (commonly
referred to as “Blue Sky” laws). Absent compliance with such
individual state laws, our common stock may not be traded in such
jurisdictions. Because the securities registered hereunder have not
been registered for resale under the “Blue Sky” laws of any state, the holders
of such shares and persons who desire to purchase them in any trading market
that might develop in the future, should be aware that there may be significant
state “Blue Sky” law restrictions upon the ability of investors to sell the
securities and of purchasers to purchase the securities. These
restrictions prohibit the secondary trading of our common stock. We
currently do not intend and may not be able to qualify our common stock for
resale in the approximately 17 states which do not offer “manual exemptions” and
require shares to be qualified before they can be resold by our
shareholders. Accordingly, investors should consider the secondary
market for our securities to be a limited one.
Any
market that develops in shares of our common stock will be subject to the “penny
stock” restrictions which will create a lack of liquidity and make trading
difficult or impossible.
SEC Rule
15g-9 establishes the definition of a “penny stock”, for purposes relevant to
us, as any equity security that has a market price of less than $5.00 per share
or with an exercise price of less than $5.00 per share, subject to a limited
number of exceptions. It is likely that our common stock will be considered a
“penny stock” for the immediately foreseeable future. This classification
severely and adversely affects the market liquidity for our common stock. For
any transaction involving a penny stock, unless exempt, the penny stock rules
require that a broker-dealer approve a person’s account for transactions in
penny stocks and the broker-dealer receive from the investor a written agreement
to the transaction setting forth the identity and quantity of the penny stock to
be purchased.
In order
to approve a person’s account for transactions in penny stocks, the
broker-dealer must obtain financial information and investment experience and
objectives of the person and make a reasonable determination that the
transactions in penny stocks are suitable for that person and that the person
has sufficient knowledge and experience in financial matters to be capable of
evaluating the risks of transactions in penny stocks.
The
broker-dealer must also deliver, prior to any transaction in a penny stock, a
disclosure schedule prepared by the SEC relating to the penny stock market,
which, in highlight form, sets forth:
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the
basis on which the broker-dealer made the suitability determination;
and
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-12-
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that
the broker-dealer received a signed, written agreement from the investor
prior to the transaction.
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Disclosure
also must be made about the risks of investing in penny stocks in both public
offerings and in secondary trading and commissions payable to both the
broker-dealer and the registered representative, current quotations for the
securities and the rights and remedies available to an investor in cases of
fraud in penny stock transactions. Finally, monthly statements must be sent
disclosing recent price information for the penny stock held in the account and
information on the limited market in penny stocks.
Because
of these regulations, broker-dealers may not wish to engage in the
above-referenced necessary paperwork and disclosures and/or may encounter
difficulties in their attempt to sell shares of our common stock, which may
affect the ability of selling shareholders or other holders to sell their shares
in the secondary market and have the effect of reducing the level of trading
activity in the secondary market. These additional sales practice and disclosure
requirements could impede the sale of our common stock, if and when our common
stock becomes publicly traded. In addition, the liquidity for our
common stock may decrease, with a corresponding decrease in the price of our
common stock. Our common stock, in all probability, will be subject
to such penny stock rules for the foreseeable future and our shareholders will,
in all likelihood, find it difficult to sell their common stock. (See “Penny
Stock” under “Plan of Distribution”).
The
elimination of monetary liability against our directors, officers and employees
under Nevada law and the existence of indemnification rights in favor of our
directors, officers and employees may result in substantial expenditures by our
company and may discourage lawsuits against our directors, officers and
employees.
Our
Articles of Incorporation contain a specific provision that eliminates the
liability of directors for monetary damages to our company and our
shareholders. Further, we intend to give such indemnification to our
directors and officers to the extent provided by Nevada law. We may also have
contractual indemnification obligations under employment agreements with our
executive officers. The foregoing indemnification obligations could result in
our incurring substantial expenditures to cover the cost of settlement or damage
awards against directors and officers, which we may be unable to recoup. These
provisions and resultant costs may also discourage our company from bringing a
lawsuit against directors and officers for breaches of their fiduciary duties
and may similarly discourage the filing of derivative litigation by our
shareholders against our directors and officers, even though such actions, if
successful, might otherwise benefit our company and our
shareholders.
We have
been advised that, in the opinion of the SEC, indemnification for liabilities
arising under federal securities laws is against public policy as expressed in
the Securities Act, and is, therefore, unenforceable. In the event
that a claim for indemnification against these types of liabilities, other than
the payment by us of expenses incurred or paid by a director, officer or
controlling person in the successful defense of any action, suit or proceeding,
is asserted by a director, officer or controlling person in connection with the
securities being registered, we will (unless, in the opinion of our counsel, the
matter has been settled by controlling precedent) submit to a court of
appropriate jurisdiction, the question whether indemnification by us is against
public policy as expressed in the Securities Act and will be governed by the
final adjudication of such issue. The legal process relating to this
matter, if it were to occur, is likely to be very costly and may result in us
receiving negative publicity, either of which factors are likely to materially
reduce the market for, and price of, our common stock, if such a market ever
develops.
THE
FOREGOING LIST OF RISK FACTORS SETS FORTH ONLY THE MOST SIGNIFICANT FACTORS THAT
MAKE THIS OFFERING RISKY AND DOES NOT PURPORT TO BE A COMPLETE EXPLANATION OF
THE RISKS INVOLVED IN THIS OFFERING.
PROSPECTIVE
INVESTORS SHOULD READ THE ENTIRE PROSPECTUS BEFORE DECIDING TO INVEST IN
LOUISIANA FOOD COMPANY.
-13-
DETERMINATION
OF OFFERING PRICE
As a
result of there being no established public market for our common stock, the
offering price and other terms and conditions relative to our common stock have
been arbitrarily determined by our Board of Directors and do not bear any
relationship to assets, earnings, book value or any other objective criteria of
value. In addition, no investment banker, appraiser or other
independent third party has been consulted concerning the offering price for the
common stock or the fairness of the offering price used for the common
stock.
USE
OF PROCEEDS
This
offering is being made as a Direct Public Offering, without the involvement of
underwriters or broker-dealers. The table below sets forth the use of proceeds
from this Direct Public Offering, assuming (a) 25%, (b) 50%, (c) 75% and (d)
100% of the common stock offered in this Direct Public Offering is
sold.
Assuming
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Assuming
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Assuming
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Assuming
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Item of Expenditure
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25% Sold
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50% Sold
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75% Sold
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100% Sold
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Equipment
purchases (1)
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$ | 8,000 | $ | 20,000 | $ | 38,000 | $ | 80,000 | ||||||||
Product
development (2)
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30,000 | 60,000 | 90,000 | 120,000 | ||||||||||||
Marketing
expenses (3)
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40,000 | 80,000 | 120,000 | 160,000 | ||||||||||||
Inventory
purchases (4)
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25,000 | 50,000 | 75,000 | 100,000 | ||||||||||||
General
and administrative expenses (5)
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50,000 | 50,000 | 100,000 | 125,000 | ||||||||||||
Working
capital (6)
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47,000 | 140,000 | 177,000 | 215,000 | ||||||||||||
Total
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$ | 200,000 | $ | 400,000 | $ | 600,000 | $ | 800,000 |
(1)
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In
order of priority: a continuous tabletop band sealer, a bag filler, a
shrink wrapper, a vertical weigh fill and seal system, a console band
sealer, a coder, a converter, a van and a fork
lift.
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(2)
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Recipe
development and consumer
testing.
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(3)
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Internet
advertising, including Google AdSense®, and point-of-purchase
materials.
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(4)
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Inventory
purchases will be allocated among our products, depending on their
respective sales levels.
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(5)
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Professional
costs associated with being a public company, as well as additional rent
expense and increased employee expenses as our operations
expand.
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(6)
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Working
capital is to be held in reserve for use in our taking advantage of as-yet
unidentified business
opportunities.
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The
foregoing statement of anticipated use of proceeds is subject to change by our
management, depending on current market conditions and other
factors.
Assuming
50,000 shares (5%) of the common stock offered in this Direct Public Offering
are sold, we anticipate that the proceeds ($40,000) would permit us to sustain
our current level of operations for the next 12 months.
Assuming
all 1,000,000 shares of common stock offered in this Direct Public Offering are
sold, we anticipate that the proceeds ($800,000) would permit us to pursue our
complete business plan and to operate for at least the next 12
months. By “complete business plan”, we refer, in effect, to the
first phase of our corporate development, that is, the development of our
product distribution channels, including the development of our Charter
Independent Distributor program, and our online store.
There can
be no assurance that we will derive any funds through this Direct Public
Offering. If only a minimal amount of funds is derived, our
management will utilize any such funds in accordance with their best business
judgment.
PLAN
OF DISTRIBUTION
The
1,000,000 shares of common stock to be offered by us in this Direct Public
Offering will be offered for a period of 180 days from the date of this
Prospectus, unless extended by our Board of Directors for an additional 90
days.
-14-
There is
no minimum number of shares of common stock that must be sold by us for this
Direct Public Offering to proceed and, consequently, we will retain the proceeds
from the sale of any of the offered shares. The offering is being
conducted on a self-underwritten, best-efforts basis, which means our officers
and directors will attempt to sell the shares of common stock. This
Prospectus will permit our officers and directors to sell the shares directly to
the public; these persons will receive no commission or other remuneration for
sales of any shares of common stock sold by them.
After the
effective date of the registration statement of which this Prospectus is a part,
we intend to advertise, through print notices, and hold investment meetings in
various states where this Direct Public Offering will be
registered. We will not use the Internet to advertise this Direct
Public Offering. We will also distribute this Prospectus to potential
investors at meetings and to the friends, family members and business
acquaintances of our officers and directors.
In
connection with our company’s selling efforts in this Direct Public Offering,
our officers and directors will not register as broker-dealers pursuant to
Section 15 of the Exchange Act, but rather will rely upon the “safe harbor”
provisions of SEC Rule 3a4-1, promulgated under the Exchange
Act. Generally speaking, Rule 3a4-1 provides an exemption from the
broker-dealer registration requirements of the Exchange Act for persons
associated with an issuer that participate in an offering of the issuer’s
securities. None of our officers, directors or promoters is subject
to any statutory disqualification, as that term is defined in Section 3(a)(39)
of the Exchange Act. Our officers and directors will not be
compensated in connection with their participation in this Direct Public
Offering by the payment of commissions or other remuneration based either
directly or indirectly on transactions in our common stock. None of
our officers and directors is now, nor has been within the past 12 months, a
broker or dealer, and none has been, within the past 12 months, an associated
person of a broker or dealer. At the end of this Direct Public
Offering, our officers and directors will continue primarily to perform
substantial duties for our company or on its behalf otherwise than in connection
with transactions in securities. Neither of these persons will
participate in selling an offering of securities for any issuer more than once
every 12 months, other than in reliance on Exchange Act Rule 3a4-1(a)(4)(i) or
(iii).
In order
to comply with the applicable securities laws of certain states, our common
stock will be offered or sold in a state only if it has been registered or
qualified for sale, in which there is available an exemption from such
registration or in which our company has met the qualification
requirements. In addition, and without limiting the foregoing, our
company will be subject to applicable provisions, rules and regulations under
the Exchange Act with regard to securities transactions during the period of
time when the registration statement of which this Prospectus is a part is
effective.
As of
the date of this Prospectus, Louisiana Food Company has 25,880,000 shares of
common stock issued and outstanding. An additional 1,000,000 shares
of our common stock are being offered for sale hereunder by our company at a
fixed price of $.80 per share.
Procedures
for Subscribing. If you decide to subscribe for any shares of
our common stock in this Direct Public Offering, you must:
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execute
and deliver to us a subscription agreement for acceptance or rejection;
and
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deliver funds to us, in the
manner set forth in the subscription
agreement.
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The
subscription agreement requires you to disclose your name, address, telephone
number, the number of shares you are purchasing and the price you are paying for
your shares.
Right to
Reject Subscriptions. We have the right to accept or reject
subscriptions in whole or in part, for any reason or for no
reason. All monies from rejected subscriptions will be returned
immediately by us to the subscriber, without interest or
deductions. Subscriptions for shares of our common stock will be
accepted or rejected within 48 hours after we receive them.
-15-
Penny
Stock
SEC Rule
15g-9 establishes the definition of a “penny stock”, for purposes relevant to
us, as any equity security that has a market price of less than $5.00 per share
or with an exercise price of less than $5.00 per share, subject to a limited
number of exceptions. It is likely that our common stock will be considered to
be a “penny stock” for the immediately foreseeable future. For any
transaction involving a penny stock, unless exempt, the penny stock rules
require that a broker-dealer approve a person's account for transactions in
penny stocks and the broker-dealer receive from the investor a written agreement
to the transaction setting forth the identity and quantity of the penny stock to
be purchased.
In order
to approve a person's account for transactions in penny stocks, the
broker-dealer must obtain financial information, investment experience and
objectives of the investor and make a reasonable determination that the
transactions in penny stocks are suitable for that investor and that the
investor has sufficient knowledge and experience in financial matters to be
capable of evaluating the risks of transactions in penny stocks.
The
broker-dealer must also deliver, prior to any transaction in a penny stock, a
disclosure schedule prepared by the SEC relating to the penny stock market,
which, in highlight form, sets forth the basis on which the broker-dealer made
the suitability determination, and that the broker-dealer received a signed,
written agreement from the investor prior to the transaction.
Disclosure
also must be made about the risks of investing in penny stocks in both public
offerings and in secondary trading and commissions payable to both the
broker-dealer and the registered representative, current quotations for the
securities and the rights and remedies available to an investor in cases of
fraud in penny stock transactions. Finally, monthly statements must be sent
disclosing recent price information for the penny stock held in the account and
information on the limited market in penny stocks. The above-referenced
requirements may create a lack of liquidity, making trading difficult or
impossible, and accordingly, shareholders may find it difficult to dispose of
our common stock. (See “Risk Factors”).
STATE
SECURITIES (BLUE SKY) LAWS
There is
no public market for our common stock, and there can be no assurance that any
market will develop in the foreseeable future. Transfer of our common stock may
also be restricted under the securities laws and regulations of various states,
commonly referred to as "Blue Sky" laws. Absent compliance with such
individual state laws, our common stock may not be traded in such jurisdictions.
Because the securities registered hereunder have not been registered for resale
under the “Blue Sky” laws of any state, the holders of such shares and persons
who desire to purchase them in any trading market that might develop in the
future should be aware that there may be significant state “Blue Sky” law
restrictions upon the ability of investors to sell the common stock and of
purchasers to purchase the common stock. Accordingly, investors may
not be able to liquidate their investments and should be prepared to hold the
common stock for an indefinite period of time.
The
Selling Shareholders may contact us directly to ascertain procedures necessary
for compliance with Blue Sky laws in the applicable states relating to sellers
and/or purchasers of our common stock.
We intend
to apply for listing in a nationally recognized securities manual which, once
published, would provide us with "manual" exemptions in 33 states, as indicated
in CCH Blue Sky Law Desk Reference at Section 6301 entitled "Standard Manuals
Exemptions".
-16-
33 states
have what is commonly referred to as a "manual exemption" for secondary trading
of securities, such as those to be resold by the Selling Shareholders pursuant
to this Prospectus. In these states, so long as we obtain and
maintain a listing in an acceptable manual, secondary trading of our common
stock can occur without any filing, review or approval by state regulatory
authorities in these states. These states are: Alaska, Arizona, Arkansas,
Colorado, Connecticut, District of Columbia, Florida, Hawaii, Idaho, Indiana,
Iowa, Kansas, Maine, Maryland, Massachusetts, Michigan, Mississippi, Missouri,
Nebraska, New Jersey, New Mexico, North Carolina, North Dakota, Ohio, Oklahoma,
Oregon, Rhode Island, South Carolina, Texas, Utah, Washington, West Virginia and
Wyoming. We cannot secure this listing, and, thus, this qualification, until
after the registration statement of which this Prospectus is a part is declared
effective. Once we secure this listing, secondary trading can occur in these
states without further action.
We
currently do not intend to and may not be able to qualify securities for resale
in other states which require shares to be qualified before they can be resold
by our shareholders.
DILUTION
If you
purchase shares of our common stock from us in this Direct Public Offering, your
investment will be diluted to the extent of the difference between the public
offering price of $.80 per share and the net tangible book value of our common
stock after this offering. Our net tangible book value as of
September 30, 2010, was $29,932, or $.001 per share. Net tangible
book value per share is equal to total assets minus the sum of total liabilities
and intangible assets divided by the total number of shares
outstanding.
Dilution
in net tangible book value per share to new investors represents the difference
between the amount per share paid by purchasers of shares of our common stock in
this Direct Public Offering and the net tangible book value per share
immediately after completion of this Direct Public Offering. Dilution
arises mainly as a result of our arbitrary determination of the offering price
of the common stock being offered.
The
tables below illustrate the dilution to new investors, on a pro forma basis,
assuming 100%, 75%, 50% and 25% of the common stock offered in our Direct Public
Offering is sold.
Assuming the Sale of 1,000,000 Shares of Common
Stock (100%)
|
||||
Direct
Public Offering price per share
|
$ | 0.80 | ||
Net
tangible book value per share as of September 30, 2010
|
$ | 0.001 | ||
Increase
in net tangible book value per share after giving effect to this Direct
Public Offering
|
$ | 0.03 | ||
Pro
forma net tangible book value per share as of September 30,
2010
|
$ | 0.031 | ||
Dilution
in net tangible book value per share to new investors
|
$ | 0.769 | ||
Assuming the Sale of 750,000 Shares of Common
Stock (75%)
|
||||
Direct
Public Offering price per share
|
$ | 0.80 | ||
Net
tangible book value per share as of September 30, 2010
|
$ | 0.001 | ||
Increase
in net tangible book value per share after giving effect to this Direct
Public Offering
|
$ | 0.023 | ||
Pro
forma net tangible book value per share as of September 30,
2010
|
$ | 0.024 | ||
Dilution
in net tangible book value per share to new investors
|
$ | 0.776 | ||
Assuming the Sale of 500,000 Shares of Common
Stock (50%)
|
||||
Direct
Public Offering price per share
|
$ | 0.80 | ||
Net
tangible book value per share as of September 30, 2010
|
$ | 0.001 | ||
Increase
in net tangible book value per share after giving effect to this Direct
Public Offering
|
$ | 0.015 | ||
Pro
forma net tangible book value per share as of September 30,
2010
|
$ | 0.016 | ||
Dilution
in net tangible book value per share to new investors
|
$ | 0.784 |
-17-
Assuming the Sale of 250,000 Shares of Common
Stock (25%)
|
||||
Direct
Public Offering price per share
|
$ | 0.80 | ||
Net
tangible book value per share as of September 30, 2010
|
$ | 0.001 | ||
Increase
in net tangible book value per share after giving effect to this Direct
Public Offering
|
$ | 0.008 | ||
Pro
forma net tangible book value per share as of September 30,
2010
|
$ | 0.009 | ||
Dilution
in net tangible book value per share to new investors
|
$ | 0.791 |
The
price of the current offering is fixed at $0.80 per share. This price is
significantly greater than the price paid by any of our current shareholders,
including one of our officers and a promoter. Our current
shareholders have paid an average of approximately $.003 per share, including
the value of shares issued in consideration of personal property, intellectual
property and services, which value is $.797 per share lower than the $.80 per
share fixed offering price in this Direct Public Offering.
DESCRIPTION
OF SECURITIES
General
Our
authorized capital stock consists of 50,000,000 shares of common stock, $.001
par value per share, and 5,000,000 shares of preferred stock, $.001 par value
per share. As of the date of this Prospectus, there were 25,880,000
shares of our common stock issued and outstanding, held by 37 holders of record;
a total of 5,100,000 shares are reserved for issuance upon the exercise of a
like number of currently exercisable warrants; and there are no shares of
preferred stock issued and outstanding.
Common
Stock
The
following is a summary of the material rights and restrictions associated with
our common stock. This description does not purport to be a complete
description of all of the rights of our shareholders and is subject to, and is
qualified in its entirety by, the provisions of our most current Articles of
Incorporation and Bylaws, which are included as exhibits to the registration
statement of which this Prospectus is a part.
The
holders of our common stock currently have (i) equal ratable rights to dividends
from funds legally available therefore, when, as and if declared by our Board of
Directors; (ii) are entitled to share ratably in all of our assets available for
distribution to holders of common stock upon liquidation, dissolution or winding
up of the affairs of our company; (iii) do not have preemptive, subscriptive or
conversion rights and there are no redemption or sinking fund provisions or
rights applicable thereto; and (iv) are entitled to one non-cumulative vote per
share on all matters on which shareholders may vote.
Our
Bylaws provide that, at all meetings of the shareholders for the election of
directors, a plurality of the votes cast shall be sufficient to
elect.
On all
other matters, except as otherwise required by Nevada law or our Articles of
Incorporation, a majority of the votes cast at a meeting of the shareholders
shall be necessary to authorize any corporate action to be taken by vote of the
shareholders.
A
“plurality” means the excess of the votes cast for one candidate over any
other. When there are more than two competitors for the same office,
the person who receives the greatest number of votes has a
plurality.
Please
refer to our Articles of Incorporation, Bylaws and the applicable statutes of
the State of Nevada for a more complete description of the rights and
liabilities of holders of our common stock.
-18-
Preferred
Stock
The
following is a summary of the material rights and restrictions associated with
our preferred stock. This description does not purport to be a complete
description of all of the rights of our shareholders and is subject to, and
qualified in its entirety by, the provisions of our most current Articles of
Incorporation and Bylaws, which are included as exhibits to the registration
statement of which this Prospectus is a part.
Our Board
of Directors is authorized to determine or alter any or all of the rights,
preferences, privileges and restrictions granted to or imposed upon any wholly
unissued series of preferred stock and, within the limitations or restrictions
stated in any resolution or resolutions of our Board of Directors originally
fixing the number of shares constituting any series, to increase or decrease
(but not below the number of shares of any such series then outstanding) the
number of shares comprising any such series subsequent to the issue of shares of
that series, to set the designation of any series, and to provide for rights and
terms of redemption, conversion, dividends, voting rights, and liquidation
preferences of the shares of any such series.
Anti-Takeover
Effects of Our Articles of Incorporation and Bylaws
Our
Articles of Incorporation and Bylaws contain certain provisions that may have
anti-takeover effects, making it more difficult for, or preventing, a third
party from acquiring control of our company or changing our Board of Directors
and management. According to our Articles of Incorporation and
Bylaws, the holders of our common stock do not have cumulative voting rights in
the election of our directors. The combination of the present
ownership by a few shareholders of a significant portion of our issued and
outstanding common stock and lack of cumulative voting makes it more difficult
for other shareholders to replace our Board of Directors or for a third party to
obtain control of our company by replacing our Board of Directors.
Anti-Takeover
Effects of Nevada Law
Business
Combinations. The “business combination” provisions of
Sections 78.411 to 78.444, inclusive, of the Nevada Revised Statutes, or NRS,
prohibit a Nevada corporation with at least 200 stockholders from engaging in
various “combination” transactions with any interested stockholder: for a period
of three years after the date of the transaction in which the person became an
interested stockholder, unless the transaction is approved by the board of
directors prior to the date the interested stockholder obtained such status; or
after the expiration of the three-year period, unless:
|
·
|
the
transaction is approved by the board of directors or a majority of the
voting power held by disinterested stockholders,
or
|
|
·
|
if
the consideration to be paid by the interested stockholder is at least
equal to the highest of: (a) the highest price per share paid by the
interested stockholder within the three years immediately preceding the
date of the announcement of the combination or in the transaction in which
it became an interested stockholder, whichever is higher, (b) the market
value per share of common stock on the date of announcement of the
combination and the date the interested stockholder acquired the shares,
whichever is higher, or (c) for holders of preferred stock, the highest
liquidation value of the preferred stock, if it is
higher.
|
A
“combination” is defined to include mergers or consolidations or any sale, lease
exchange, mortgage, pledge, transfer or other disposition, in one transaction or
a series of transactions, with an "interested stockholder" having: (a) an
aggregate market value equal to 5% or more of the aggregate market value of the
assets of the corporation, (b) an aggregate market value equal to 5% or more of
the aggregate market value of all outstanding shares of the corporation, or (c)
10% or more of the earning power or net income of the
corporation.
-19-
In
general, an “interested stockholder” is a person who, together with affiliates
and associates, owns (or within three years, did own) 10% or more of a
corporation’s voting stock. The statute could prohibit or delay mergers or other
takeover or change-in-control attempts and, accordingly, may discourage attempts
to acquire our company even though such a transaction may offer our stockholders
the opportunity to sell their stock at a price above the prevailing market
price. Our Articles of Incorporation state that we have elected not
to be governed by the “business combination” provisions, therefore such
provisions currently do not apply to us. The effect of this business
combination law is to potentially discourage parties interested in taking
control of Louisiana Food Company from doing so if our Board of Directors does
not approve.
Control
Share Acquisitions
The
“control share” provisions of Sections 78.378 to 78.3793, inclusive, of the NRS,
which apply only to Nevada corporations with at least 200 stockholders,
including at least 100 stockholders of record who are Nevada residents, and
which conduct business directly or indirectly in Nevada, prohibit an acquirer,
under certain circumstances, from voting its shares of a target corporation’s
stock after crossing certain ownership threshold percentages, unless the
acquirer obtains approval of the target corporation’s disinterested
stockholders. The statute specifies three thresholds: one-fifth or more but less
than one-third, one-third but less than a majority, and a majority or more, of
the outstanding voting power. Once an acquirer crosses one of the above
thresholds, those shares in an offer or acquisition and acquired within 90 days
thereof become “control shares” and such control shares are deprived of the
right to vote until disinterested stockholders restore the right. These
provisions also provide that if control shares are accorded full voting rights
and the acquiring person has acquired a majority or more of all voting power,
all other stockholders who do not vote in favor of authorizing voting rights to
the control shares are entitled to demand payment for the fair value of their
shares in accordance with statutory procedures established for dissenters’
rights.
Dividend
Policy
We have
never declared or paid any dividends on our common stock. We currently intend to
retain future earnings, if any, to finance the expansion of our business. As a
result, we do not anticipate paying any cash dividends in the foreseeable
future.
Warrants
We
currently have outstanding 5,100,000 warrants to purchase a like number of
shares our common stock at an exercise price $.10. These warrants are
exercisable for two years from their respective dates of issuance, variously
from August 2012 to September 2012.
BUSINESS
General
We
incorporated in the State of Nevada on August 17, 2010, under the name Louisiana
Food Company. Our corporate office is located at 917 Third Street,
Norco, Louisiana 70079; our telephone number is (877) 732-2143; our corporate
web site is www.lafoodco.com.
It is our
company’s objective to focus on developing and commercializing food-related
business opportunities in the State of Louisiana, whether eating establishments
or Louisiana-based specialty food products. Our company is committed
to locating and developing these business opportunities throughout Louisiana
and, when appropriate, expanding these business opportunities beyond Louisiana’s
borders.
Our
management believes there to be a multitude of small, locally-owned food
businesses throughout Louisiana, the products of which are worthy of national
distribution. Our management further believes that we have the
opportunity to bring to these locally produced and sold Louisiana-centric
specialty food products to the national market, by way of distribution
agreements, private label arrangements or acquisition.
-20-
As
part of our business strategy, after we have better established the sales and
distribution channels of our current lines of specialty food products, we intend
to consider acquisitions of existing food-related businesses, as such
acquisition opportunities become available to us. There is no current
arrangement or understanding between our company and any other company or person
with regard to a merger or acquisition transaction.
Background
South
Louisiana, where our company is based, more than any other part of the United
States, holds its cuisine near and dear to its heart. The region’s
cuisine is the embodiment of the cultures and traditions brought by its settlers
from Europe, Africa, the Caribbean and Canada and shared, neighbor to neighbor,
over hundreds of years.
It is in
this mysterious intertwining of cultures and traditions that our company’s
founder, David Loflin, finds his heritage – he is a Cajun, born and raised in
South Louisiana.
It seems
most have heard of Cajun and Creole cuisine, though few actually are able to
recite their respective origins. Simply put, Cajun cuisine is rooted
in the kitchens of rural Southern Louisiana and Creole cuisine is rooted in the
more sophisticated kitchens of New Orleans. Our company is dedicated
to bringing the best foods of Louisiana to the supermarkets and specialty shops
throughout the United States.
Current
Status
We
have established three lines of “Certified” Louisiana specialty food products:
(1) packaged dry products, (2) sauce products and (3) coffee
products. We will market our packaged dry products under our
“Louisiana Food Company” brand name; we will market our sauce products under our
“The Quarter’s” brand name; we market our coffee products under our
“Tchoupitoulas Coffee Company” brand name (“Tchoupitoulas” is pronounced
“chop-uh-too-lus”). We will sell these specialty food product lines to
distributors, directly to retail grocery stores, directly to other retailers and
directly to consumers through our online store.
Shortly
following our incorporation in August 2010, our management located a small
specialty food company, Cajun Fry Co., Inc., located in Pierre Part, Louisiana,
that produces authentic Louisiana specialty food products. We have
entered into an oral agreement pursuant to which Cajun Fry produces, on our
behalf, our packaged dry products in bulk. We will produce our own
sauce products in our Norco, Louisiana, commercial kitchen
facility. We have entered into an oral agreement with Covington,
Louisiana-based New Orleans Roast, LLC, whereby it produces, on our behalf, our
coffee products.
In
September 2010, we received the first purchase order for our specialty food
products. In November 2010, we completed our first sales to two
retail grocery stores and made our first sales directly to consumers through our
online store. By December 1, 2010, we expect to have fulfilled the
first orders of our packaged dry products and sauce products.
As
discussed below, we have secured one person who has become a Charter Independent
Distributor of our products. We have committed to deliver our
specialty food products to this person during the first week of December
2010. Due to the strong response from our first advertising efforts,
our management intends to continue to pursue additional persons who wish to
become Charter Independent Distributors. There is no assurance that
we will be successful in attracting person who wish to become Charter
Independent Distributors.
“Certified”
Louisiana
Because
each of our products is produced locally in Louisiana, we applied for, and have
been granted, a license by the Louisiana Department of Agriculture and Forestry
to affix, as appropriate, the Department’s “Certified” logos to our products, as
follows:
-21-
|
·
|
“A
Product of Louisiana: Certified”;
|
|
·
|
“A
Product of Louisiana: Certified Cajun”;
and
|
|
·
|
“A
Product of Louisiana: Certified
Creole”.
|
Our
Products
Under
our “Louisiana Food Company” brand name, we will offer the following packaged
dry products, which are available for purchase and are to begin to be shipped
prior to December 1, 2010:
Jammin’ Jambalaya (Mild, Hot,
Creole and Vegetarian)*
|
Acadiana
Dirty Rice*
|
|
A
delicious, authentic taste of South Louisiana.
|
A
gift from the Heart of Cajun country.
|
|
Bayou
Moon Jamasta (Mild and Hot)*
|
Fais
do-do Gumbo*
|
|
A
reflection of the cultural mix that is the French
Quarter.
|
It’ll
have you dancing by the bottom of the bowl!
|
|
Breaux
Bridge Etouffee*
|
Bon
Temps Lou’siana Fry (Mild and Hot)
|
|
Acadian
pioneer Firmin Breaux would be so proud.
|
Mardi
Gras anytime you feel like it!
|
|
*
When prepared according to package directions, makes four
servings.
|
Under
our “Louisiana Food Company” brand name, as soon as we have obtained approval of
our proposed product labels (expected prior to December 31, 2010), we will begin
to offer the following packaged dry products:
Red
Stick Red Beans*
|
Pirogue
Rice
|
|
A
worthy tribute to the State’s Capitol, Baton Rouge.
|
A
long-grain rice ideal for your favorite dishes.
|
|
Elysian
Fields Black-Eyed Peas*
|
||
A
memorable gourmet treat anytime you desire.
|
||
*
When prepared according to package directions, makes four
servings.
|
Under
our “The Quarter’s” brand name, we will offer the following sauce products as
soon as we have obtained approval of our proposed product labels (expected prior
to December 15, 2010)
The
Quarter’s Pasta Sauce
|
The
Quarter’s Creole Sauce
|
|
An
Italian marinara sauce with a dash of New Orleans.
|
A
faithful Creole-style sauce that’s great over
rice.
|
Under
our “Tchoupitoulas Coffee Company” brand name, we offer the following coffee
products, all of which are currently available:
Dark Roast
Coffee (Whole Bean, Ground)
|
|
Dark Roast
Decaffeinated Coffee (Whole Bean, Ground)
|
Medium
Roast Coffee (Whole Bean, Ground)
|
Chicory
Blend (Whole Bean,
Ground)
|
Our
Association with Edible Enterprises
In
September 2010, we entered into a lease for our corporate headquarters in Norco,
Louisiana. We selected this location for our headquarters, inasmuch
as the facility (the “Edible Facility”) is owned and operated by Edible
Enterprises, a food technology incubator established by the River Parish
Community Development Corporation (“RPCDC”). Our management believes
that the Edible Enterprises facility offers our company extremely economical
access to FDA-approved commercial kitchen facilities, as well as food packaging,
distribution and marketing consultation.
-22-
The Norco
Community Economic Development Foundation, in conjunction with the RPCDC,
supports Edible Enterprises. Edible Enterprises operates in
accordance with its Mission Statement: “Our mission is to provide culinary
entrepreneurs with all the tools necessary to develop and successfully market
specialty food products, thereby creating jobs and positively impacting the
economic development of the River Parishes [generally, the Parishes from Baton
Rouge and New Orleans] and Greater New Orleans regions.”
The
Edible Facility contains approximately 12,000 square feet and includes an
FDA-approved commercial kitchen, a processing kitchen and freezer, cooler and
dry storage. The Edible Facility also contains an adequate shipping
and receiving area. We rent the FDA-approved kitchen at the Edible
Facility at the rate of $20 per hour, for the packaging of our dry products and
coffee products and the production of our sauce products. We also
lease a small office at the Edible Facility.
Our
Competitive Strengths and Weaknesses
We
believe our company has the following competitive strengths:
|
·
|
Our
products are high-quality, good-tasting and
affordable;
|
|
·
|
We
have low overhead costs;
|
|
·
|
Our
product storage costs are included in our office
lease;
|
|
·
|
We
have implemented strong customer service and distributor relations
programs; and
|
|
·
|
Our
online store is easily navigated by our customers and our
distributors.
|
We
believe our company has the following competitive weaknesses:
|
·
|
Our
products are new and do not enjoy brand name
recognition;
|
|
·
|
Our
management does not possess experience in the specialty food
industry;
|
|
·
|
Our
lack of a customer base to which to sell our specialty food
products;
|
|
·
|
Our
limited operations;
|
|
·
|
Our
company possesses limited capital;
and
|
|
·
|
Our
company has limited personnel.
|
Industry
Overview
Packaged
Dry Goods and Sauces. According to National Association for
the Specialty Food Trade’s annual State of the Specialty Food Industry 2009, the
specialty food industry represented more than $60 billion in U.S. sales, with
80% of these sales being made through retailers, including supermarkets, natural
food stores and gourmet shops.
Coffee. We
believe that the specialty coffee industry will continue to enjoy strong demand
for its products. Several factors will contribute to this sustained
demand for specialty coffee, including: consumer awareness of specialty coffee,
due to its increasing availability; increased quality differentiation over
commercial-grade coffees by consumers; and ease of preparation of specialty
coffees resulting from the increased use of automatic drip coffee makers and
home espresso machines.
Product
Procurement and Production
Packaged
Dry Goods and Sauces. Shortly following our incorporation in
August 2010, our management located a small specialty food company, Cajun Fry
Co., Inc., located in Pierre Part, Louisiana, that produces authentic Louisiana
specialty food products. We have entered into an oral agreement
pursuant to which Cajun Fry produces, on our behalf, our packaged dry products
in bulk. We, then, package and sell these dry products under our
“Louisiana Food Company” brand name.
We
will produce our own sauce products in the Edible Facility and market them under
our “The Quarter’s” brand name.
-23-
Coffee. We
have entered into an oral agreement with Covington, Louisiana-based New Orleans
Roast, LLC, whereby this company produces, on our behalf, our coffee products in
bulk. We, then, package and sell these coffee products under our
“Tchoupitoulas Coffee Company” brand name.
Quality
Control
We use
only first quality ingredients for our specialty food products. Our
officers will assure strict adherence to our production procedures and quality
standards for all products manufactured by us. These persons intend
also to monitor production procedures and quality standards at each of the
facilities from which we purchase, in bulk, our specialty food products.
However, currently, we do not have a contractual right to inspect or monitor
these third-party production facilities.
Ingredients
Packaged
Dry Goods and Sauces. We use, and our suppliers use, only the
best available ingredients in manufacturing our packaged dry products and coffee
products. At this time, we do not anticipate any material
restrictions on availability or shortages of ingredients that would have a
significant impact on the production of our packaged dry
products.
While all
necessary ingredients are available from numerous independent suppliers locally,
these ingredients are subject to fluctuations in price attributable to a number
of factors, including weather conditions during the growing and harvesting
seasons. At this time, we do not anticipate any material restrictions
on availability or shortages of ingredients that would have a significant impact
on the production of our sauces.
Coffee. The
supplier of our bulk coffee products procures only the highest quality arabica
beans available from the world’s coffee-producing regions through wholesale
vendors. We believe this supplier and its sources of whole bean
coffee to be reliable, in terms of both availability of supply and consistency
of product quality.
Charter
Independent Distributor Program
With the
backdrop of today’s sluggish economy and with the knowledge that Americans are
resourceful, our management created our Charter Independent Distributor
Program. This program is designed to be a low-entry-cost opportunity
for individuals and small businesses to increase their monthly cash flow, by
owning and operating a Louisiana Food Company distributorship on either a
full-time or part-time basis.
Under
this program, for an initial, up-front investment of $500, an individual or
small business becomes a Charter Independent Distributor of our company’s
products. For this initial investment, the distributor will be
shipped enough product inventory, product displays and signage for the
establishment of three retail (display) locations. Distributors will
reorder our products through our company’s secure online store that is a part of
our website (www.lafoodco.com).
We
have secured one person who has become a Charter Independent Distributor of our
products. We have committed to deliver our specialty food products to
these persons during the first week of December 2010. Due to the
strong response from our first advertising efforts, our management intends to
continue to pursue persons who wish to become Charter Independent
Distributors. There is no assurance that we will be successful in
attracting person who wish to become Charter Independent
Distributors.
Online
Store
General. As
a part of our website (www.lafoodco.com), we have created an online store,
through which customers are able to purchase all of our available specialty food
products. Currently, our customers may purchase the following
products through our online store: Jammin’ Jambalaya, Breaux Bridge Etouffee,
Acadiana Dirty Rice, Bayou Moon Jamasta, Fais do-do Gumbo, Bon Temps Lou’siana
Fry and all of our coffee products. In addition, we have created a
password-protected section of our online store, through which our distributors
will reorder products.
-24-
Convenient
Shopping. Our online store is available 24 hours a day, seven
days a week to all Internet users. This online store enables us to market our
specialty food products in all areas. Through our planned
Internet-based advertising program, we hope to attract an ever-increasing number
of potential customers to our online store. We believe that the
convenience of our online shopping experience and the quality of our products
will cause first-time customers to become repeat customers.
Customer
Service. We have established an e-mail based customer service
program, by which customers are able to resolve order and product
questions. In addition, it is our company’s policy to make all of our
customers satisfied with their purchases.
Paying
for Orders. To pay for orders, a consumer must use a credit
card, which is authorized during the checkout process. Charges are
assessed against the card when the order is placed. Our online store
uses available security technologies, including 128-bit encoding encryption
technology, to assure our customers of transactional security.
Distribution
and Marketing
Promotion
of Products. We intend to distribute our specialty food
products throughout the United States. To achieve this objective, we have begun
to implement a multi-faceted distribution and marketing strategy with respect to
our lines of specialty food products. This distribution and marketing
strategy includes the methods discussed below.
Internet
Advertising. We have begun to expend funds in advertising our
products over the Internet via established Internet advertising systems,
including Google AdSense®. Our management anticipates that this
Internet advertising will drive customer traffic to our website, which, we
believe, will translate into sales of our specialty food products directly from
our online store. We have also begun to advertise over the Internet
for participants in our Charter Independent Distributor Program. To
date, we have only advertised our Charter Independent Distributor Program on
free web sites, including the popular Craig’s List web site. Due to
the strong response from potential distributors to this advertising strategy,
our management has determined to delay the use of for-pay advertising options,
which include local newspapers and established Internet advertising
systems.
Charter Independent Distributor
Program. We expect this program will be the most dynamic of
our marketing strategies. As we attract Charter Independent
Distributors through our advertising, we expect our product sales to
increase. Each Charter Independent Distributor will pay $500 for the
first supply of products, retail displays and signage, then will reorder
products through our online store. These Charter Independent
Distributors will then utilize their existing contacts to place our specialty
food products in retail locations. These distributors have
non-exclusive rights to sell our products in their respective
territories. We have secured one person who has become a Charter
Independent Distributors of our products. We have committed to
deliver our specialty food products to these persons during the first week of
December 2010. Due to the strong response from our first advertising
efforts, our management intends to continue to pursue persons who wish to become
Charter Independent Distributors. There is no assurance that we will
be successful in attracting person who wish to become Charter Independent
Distributors.
National Retail
Accounts. We plan also to distribute our products directly to
national retail accounts based on purchase order relationships. These
accounts would include grocery stores, convenience stores, retail drug stores
and specialty food stores. We intend to pursue this mode of
distribution beginning in January 2011.
Point-of-Purchase (POP)
Materials. Initially, all of our specialty food products will
be placed in custom display stands and accompanied by signage intended to
attract the attention of shoppers and to promote further our “Louisiana Food
Company” packaged dry products, our “The Quarter’s” sauce products and our
“Tchoupitoulas Coffee Company” products. We intend to enhance our
current POP materials by developing new promotional items on a periodic
basis.
Transportation. To
transport our specialty food products, we will contract with independent
trucking companies to transport our products from our Edible Facility to
distributors and retailers. Distributors will then re-stock and
merchandise our products at their established retail outlets.
-25-
Future
Brands
Our
management has developed brand concepts that we intend to develop in the future,
as funds become available for such efforts. These brands
include Parkson FoodsTM, which
has been reserved for locally-produced Louisiana food products that we develop
or discover and that are not a match for the “Louisiana Food Company” brand
name.
Insurance
We have
purchased a product liability insurance policy that provides $1,000,000 in
coverage. Our management believes this policy amount to be
appropriate for our current level of operations.
Competition
Packaged
Dry Goods and Sauces. The food business is highly
competitive. We expect competition to intensify in the
future. In our chosen industry segments, numerous brands and products
compete for shelf space and sales, with competition based primarily on price,
quality and convenience. We compete with a significant number of
companies of varying sizes, including divisions or subsidiaries of large,
vertically integrated, international companies. A vast majority of
our competitors have broader product lines, as well as substantially greater
financial and other resources available to them. There can be no
assurance that we will be able to compete effectively. A failure to
compete effectively will result in diminished revenue and will have a material
adverse effect on our business, operating results and financial
condition.
Coffee. The
coffee market, in general, and the specialty coffee market, in particular, is
highly competitive. We believe the specialty coffee market niche is
one that depends heavily on brand presence for sustainable
success. We attempt to compete within the industry by promoting our
interesting brand name, Tchoupitoulas Coffee Company, as well as the superior
taste and quality of our coffee, rather than the price of our
products. In retail outlets, such as supermarkets, our products
compete directly with large purveyors of specialty and non-specialty coffees
that have established brand names and retail shelf presence. On the
Internet, at least initially, it will be difficult for us to attract a
significant number of purchasers. We may not be successful in
attracting retail customers for our coffee products.
Regulatory
Matters
The
production and marketing of our specialty food products are subject to the rules
and regulations of various Federal, state and local health agencies, including
the U.S. Food and Drug Administration (“FDA”). Regulations apply to
many aspects of our business, including our products and their ingredients,
manufacturing, safety, labeling, transportation, recycling, advertising and
sale. For example, our products, and their manufacturing, labeling,
marketing and sale in the U.S. are subject to various aspects of the Federal
Food, Drug, and Cosmetic Act, the Federal Trade Commission Act, the Lanham Act,
state consumer protection laws and state warning and labeling
laws. The FDA also regulates labeling of our
products. From time to time, we may receive notification of various
technical labeling or ingredient reviews with respect to our
products. Currently, we and, to our knowledge, our suppliers are in
compliance with all applicable laws and regulations as they relate to our
products. As our product offerings expand, we intend to establish a
compliance program to ensure compliance with production, marketing and labeling
regulations.
We are
also subject to the laws and regulations applicable to business operations, such
as business licensing requirements, health department standards, income taxes
and payroll taxes. In this regard, there are no regulatory
notifications or actions currently outstanding against us or, to our knowledge,
Edible Enterprises.
Intellectual
Property
We regard
our trademarks, service marks, business know-how and proprietary recipes as
having significant value and as being an important factor in the marketing of
our specialty food products. Our policy is to establish, enforce and protect our
intellectual property rights using the intellectual property
laws.
-26-
We are
the owner of the following trademarks: Louisiana Food CompanyTM, The
Quarter’sTM,
Tchoupitoulas Coffee CompanyTM and
Parkson FoodsTM. In
the near future, we intend to file for registration of these trademarks with the
U.S. Patent and Trademark Office.
We also
own an array of proprietary recipes that we use, or intend to use, in our
business.
Description
of Property
Our
approximately 400 square-foot leased offices are located within the Edible
Facility at 917 Third Street, Norco, Louisiana 70079. Our monthly
rent is $200, under a one-year lease expiring in October 2011. Should
additional space may be required as we expand our operations, we expect that
such space would be available within the Edible Facility. We
currently do not own any real property.
Employees
We
currently have no employees other than our President and Vice
President. Our business development, corporate administration and
business operations are overseen directly by our President. Our Vice
President oversees record keeping and financial reporting
functions. We intend to hire a small number of employees, at such
times as our business conditions warrant. We have used, and, in the
future, expect to use, the services of certain outside consultants and advisors
as needed, on a consulting basis.
Company
Website
Our
company’s corporate website can be found at www.lafoodco.com. As a
public company, we will make available free of charge at this website all of our
reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange
Act, including our annual reports on Form 10-K, our quarterly reports on Form
10-Q and our current reports on Form 8-K. These reports will be made
available on our website as soon as reasonably practicable after their filing
with, or furnishing to, the SEC.
MANAGEMENT’S
DISCUSSION AND ANALYSIS OF
FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Cautionary
Statement
The
following discussion and analysis should be read in conjunction with the balance
sheet as of September 30, 2010, and the financial statements for the period
August 17, 2010 (inception), to September 30, 2010, included elsewhere in this
Prospectus. The results shown herein are not necessarily indicative
of the results to be expected for any future periods.
This
discussion contains forward-looking statements. These forward-looking
statements are based on our management’s current expectations with respect to
future events, financial performance and operating results, which statements are
subject to risks and uncertainties, including, but not limited to, those
discussed below and elsewhere in this Prospectus. The risks and
uncertainties discussed herein could cause our actual results to differ from the
results contemplated by these forward-looking statements. We urge you
to consider carefully the information set forth in this Prospectus under “Risk
Factors”.
General
We are
a development-stage company incorporated in the State of Nevada on August 17,
2010. We are in the business of developing and exploiting
food-related business opportunities in the State of Louisiana. To
date, we have developed a line of packaged specialty food products, a line of
specialty sauces and a line of specialty coffee products. We will
sell these specialty food product lines to distributors, directly to retailers
and directly to consumers over the Internet.
-27-
Overview
While
we are a business in the early-stage of development, we have begun to derive
revenues from our operations, through sales to retail grocery stores and through
our online store. Our current focus is on (1) sales to established
food distributors, (2) direct sales to retail grocery stores, (3) developing our
Charter Independent Distributor Program and (4) sales through our web site,
www.lafoodco.com.
In order
to accelerate the growth of our business, we will need to obtain additional
capital from this Direct Public Offering or from another source or
sources. We intend to apply additional capital, as and if obtained,
to the expansion of our Charter Independent Distributor Program, the pursuit of
nation retail accounts and to the expansion of sales through our web site,
primarily through Internet advertising strategies.
Our
management believes there to be a multitude of small, locally-owned food
businesses throughout Louisiana, the products of which are worthy of national
distribution. Our management further believes that we have the
opportunity to bring to these locally produced and sold Louisiana-centric
specialty food products to the national market, by way of distribution
agreements, private label arrangements or acquisition.
As
part of our business strategy, after we have better established the sales and
distribution channels of our current lines of specialty food products, we intend
to consider acquisitions of existing food-related businesses, as such
acquisition opportunities become available to us. There is no current
arrangement or understanding between our company and any other company or person
with regard to a merger or acquisition transaction.
Recent
Developments
Since our
inception (August 17, 2010), we have sold a total of 5,380,000 shares of our
common stock for a total of $55,600 in cash. 5,200,000 of these
shares were sold for $.01 per share, for a total of $52,000; 180,000 of these
shares were sold for $.02 per share, for a total of $3,600.
Principal
Factors Affecting Our Financial Performance
Our
operating results are primarily affected by the following factors:
|
·
|
our
ability to maintain, on commercially reasonable terms, the supply of our
packaged dry products and our coffee
products;
|
|
·
|
our
ability to expand the channels of distribution for our specialty food
products;
|
|
·
|
our
ability to attract new and repeat customers to our online store;
and
|
|
·
|
our
ability to contain our costs of goods sold and maintain our law
overheard.
|
Based on
our current business plan, we expect to incur operating losses for at least the
first two quarters of Fiscal 2011. However, because our specialty
food products are new, we cannot predict the levels of our sales during Fiscal
2011.
To date,
we have sold our products to only a small number of customers. We do
not have a formal relationship with any of our customers and they may, in their
sole discretion and without penalty, cease purchasing our specialty food
products. Our only other channel of distribution is through our
website, which has generated only a small level of sales revenues.
We have a
single source for packaged food products and a single source for our coffee
products. Each of these suppliers is located within 60 miles of our
production, packaging and distribution location in Norco,
Louisiana. We have not entered into any formal supply agreements with
these suppliers. We are required to pay in full for inventory
purchased from these suppliers, upon our receipt of their
shipments. If the prices charged by these suppliers increase and we
are not able to pass on the increased prices to our customers, then our margins
would be reduced, which would, in turn, adversely affect our future
profitability.
-28-
Results
of Operations
For the
Period from August 17, 2010 (inception) to September 30,
2010. During the Period from August 17, 2010 (inception) to
September 30, 2010 (the “Current Period”), we generated no revenues from sales
of our specialty food products. During the Current Period, we
received the first purchase order for our specialty food
products. However, due to the fact that the Current Period ended
between the date of receipt of this purchase order and the date on which the
order shipped, the purchase order amount, $8,280, does not appear on our
September 30, 2010, statement of operations.
For the
Current Period, we incurred a net loss of $35,361. Of the $35,361 in
expenses for the Current Period, $2,500 is attributable to the issuance of
500,000 shares of our common stock to one of our officers as a retention bonus,
$20,000 is attributable to the issuance of shares of our common stock in payment
of services to third parties and $3,276 is attributable to the issuance of
warrants for services to an officer and a third party. A total of
2,000,000 shares of common stock, valued at $10,000 for financial reporting
purposes, were issued to third-party consultants and 5,000,000 shares of common
stock, valued at $10,000 for financial reporting purposes, were issued in
payment of legal services. By issuing common stock in payment of
these necessary services, we were able to preserve our available
cash. While we do not expect that we will issue common stock in
payment of services during the remainder of 2010, it is possible that, if we
lack the cash needed to obtain necessary services, we would issue shares of
common stock in payment thereof. Our cash expenses during the Current
Period related primarily to normal start-up costs and costs associated with the
development of our specialty food products, including label design
costs.
Plan
of Operations
Our Plan
of Operations, which is detailed in the following paragraphs, generally involves
the development of distribution channels for our specialty food products, as
well as our locating food-related business opportunities in the State of
Louisiana.
We have
developed the following specialty food products (each being described under
“Business” herein):
|
Packaged Dry
Products:
|
Our
Jammin’ Jambalaya, Acadiana Dirty Rice, Bayou Moon Jamasta, Breaux Bridge
Etouffee, Fais do-do Gumbo and Bon Temps Lou’siana Fry are currently
available to purchasers. We expect that our Red Stick Red
Beans, Elysian Fields Black-Eyed Peas and Pirogue Rice will be available
to purchasers prior to December 31,
2010.
|
|
Sauce
Products:
|
We
expect that our The Quarter’s Pasta Sauce and The Quarter’s Creole Sauce
will be available to purchasers prior to December 1,
2010.
|
|
Coffee
Products:
|
Our
Dark Roast, Medium Roast, Dark Roast (Decaf) and Chicory Blend products
are currently available to
purchasers.
|
A portion
of funds that we obtain in the future, including through this Direct Public
Offering, will be applied to the expansion of our distribution
channels. Specifically, we intend to expend funds in advertising for
participants in our Charter Independent Distributor Program. Our
advertising will be done in local newspapers around the United States and over
the Internet via one or more of the existing Internet advertising systems, such
as Google AdSense®. Additionally, we intend to use Internet
advertising to entice retail consumers to purchase our specialty food products
directly from our online store that is a part of our web site,
www.lafoodco.com.
As we
increase our sales, we will apply available funds to the expansion of our food
manufacturing capabilities. We currently produce our wet products at
a certified commercial kitchen housed in the same building as our corporate
headquarters and we expect that this kitchen will be adequate for at least the
next six months.
-29-
Our
management believes there to be a multitude of small, locally-owned food
businesses throughout Louisiana, the products of which are worthy of national
distribution. Our management further believes that we have the
opportunity to bring to these locally produced and sold Louisiana-centric
specialty food products to the national market, by way of distribution
agreements, private label arrangements or acquisition.
While our
level of future funding will determine the potential rate of growth for our
business, our Plan of Operations will be the same. Without additional
funding, we will expand our operations only to the extent that our operations
generate adequate funds. There is, of course, no assurance that our
operations will be successful, in this regard. With additional
funding, we believe that we will be able to increase sales of our products
through our aggressive advertising strategy. As with any start-up
company that offers unproven products, there is no assurance that our company
will be successful with any level of additional funding.
Liquidity
For the
Period from August 17, 2010 (inception), to September 30,
2010.
Working
Capital. At September 30, 2010, we had working capital of
$27,987, including cash on hand of $22,353. Since our inception, we
have raised a total of $55,600 from private sales of our common
stock. Currently, we possess approximately $25,000 in
cash. We have ceased our efforts in raising funds privately, due to
our management’s belief that current market conditions favor our efforts
pursuant to this offering to attract capital. There are no assurances
in this regard, however.
Cash Flows. For
the Period from August 17, 2010 (inception), to September 30, 2010, we used
$12,647 in our operating activities. Our investing activities used
$2,000 for equipment purchases. Our financing activities provided
$37,000 in cash, which we received from private sales of our common
stock.
Contractual
Obligations
To date,
we have not entered into any significant long-term obligations that require us
to make monthly cash payments. Our longest-lived obligation is the
lease agreement for our corporate headquarters, which expires in October
2011. Our monthly obligation under this lease is $200.
Critical
Accounting Policies
Our
critical accounting policies, including the assumptions and judgments underlying
them, are disclosed in the notes to our financial statements included in this
Prospectus. We have consistently applied these policies in all
material respects. We do not believe that our operations to date have
involved uncertainty of accounting treatment, subjective judgment or estimates,
to any significant degree.
Uncertainties
and Trends
Our
operations and revenues are dependent, now and in the future, upon the following
factors:
·
|
|
·
|
whether we compete
effectively in the severely competitive food industry;
and
|
·
|
whether the
continuing economic recession in the United States will adversely affect
our ability to attract customers to our specialty food
products.
|
There is
no assurance that our company will be able to accomplish our
objectives. Our failure to do so would likely cause purchasers of our
common stock to lose their entire investments in our company.
-30-
Inflation
Inflation
can be expected to have an impact on our operating costs. A prolonged
period of inflation could cause interest rates, wages and other costs to
increase which would adversely affect our results of operations. In the current
economic and political climate, no predictions can be made with respect to the
future effects of inflation on or business.
Off-Balance
Sheet Arrangements
We do not
have any off-balance sheet arrangements that would have any current or future
effect on our financial condition, changes in financial condition, revenues or
expenses, results of operations, liquidity, capital expenditures or capital
resources.
Capital
Expenditures
During
the period from August 17, 2010 (inception), to September 30, 2010, our capital
expenditures were for purchases of equipment in the amount of
$2,000. Should we obtain at least $30,000, we expect to purchase
selected items of equipment for use in the production of our specialty food
products, including product packaging equipment. However, we cannot
predict the exact amount of these potential capital expenditures.
DIRECTORS,
EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS
Directors
and Executive Officers
The
following table sets forth the names and ages of our current directors and
executive officers.
Name
|
Age
|
Position(s)
|
||
David
Loflin
|
53
|
President
and Director
|
||
Waddell
D. Loflin
|
61
|
Vice
President, Chief Financial Officer, Secretary and
Director
|
Our
current officers and directors serve until the next annual meeting of our Board
of Directors or until their respective successors are elected and qualified. All
officers serve at the discretion of our Board of Directors. Certain
information regarding the backgrounds of each of the officers and directors is
set forth below.
David
Loflin, from June 2003 through September 2010, served as an officer and
director of Santeon Group, Inc., a publicly-traded company (Symbol: SANT) (see
“Information Regarding Santeon Group, Inc.” below), with his last position
having been as a vice president.
Based
on Mr. Loflin’s experience as a director and chief executive officer of public
companies (USURF America, Inc. and Santeon, Inc.) since 1997 and his extensive
understanding of the restaurant business from his past ownership of restaurants
in the Baton Rouge, Louisiana, area, it was determined that Mr. Loflin is
qualified to serve in his current positions with our company.
Waddell D.
Loflin, has, since January 2009, operated as an independent business
consultant. From June 2003 through to January 2009, Mr. Loflin served
as an officer and director of Santeon Group, Inc. (see “Information Regarding
Santeon Group, Inc.” below).
Based
on Mr. Loflin’s experience as a director and executive officer, including acting
chief financial officer, of public companies (USURF America, Inc. and Santeon,
Inc.) since 1997 and his extensive understanding of the restaurant business from
his past ownership of restaurants in the Baton Rouge, Louisiana, area, it was
determined that Mr. Loflin is qualified to serve in his current positions with
our company.
-31-
Information Regarding Santeon Group,
Inc. From June 2003 through 2004, Santeon Group (under the
corporate name Air-Q Wi-Fi Corporation) engaged in the wireless Internet access
business. From January 2005 through 2008, Santeon Group (under the
corporate name Diamond I, Inc.) pursued the commercial placement of a hand-held
wireless gaming system for use primarily in casinos, opened several online
“casinos”, i.e., Internet web sites offering poker and other card games “for
entertainment purposes only”, with a plan to derive revenues from its
“click-through advertising” program, and pursued the development of an online
biofuels exchange. Following a change-in-control transaction,
occurring in January 2009, until June 2010, Santeon Group (under the corporate
name ubroadcast, inc.), operated an Internet broadcasting website,
www.ubroadcast.com. In June 2010, Santeon Group shifted its focus to
the development and sale of information management products.
Promoter
Our legal
counsel, Newlan & Newlan, is considered a promoter of our
company.
Corporate
Governance
Committees;
Meetings of the Board. We do not have a separate Compensation
Committee, Audit Committee or Nominating Committee. These functions
are to be conducted by our Board of Directors meeting as a whole.
To date,
our Board of Directors has been taken by unanimous written consent in lieu of a
meeting on 11 occasions; our Board of Directors has not yet held a
meeting.
Audit
Committee. Our Board of Directors has not established an audit
committee. The functions of an audit committee are currently
performed by our entire Board of Directors. We are under no legal
obligation to establish an audit committee and our Board of Directors has
elected not to do so. This decision was made so as to avoid the time
and expense of identifying independent directors willing to serve on the audit
committee. We may establish an audit committee in the future, if our
Board of Directors determines it to be advisable or we are otherwise required to
do so by applicable law, rule or regulation.
Independence
of Board of Directors
Neither
of our directors is “independent”, within the meaning of definitions established
by the SEC or any self-regulatory organization. We are not currently
subject to any law, rule or regulation requiring that all or any portion of our
Board of Directors include “independent” directors.
Shareholder
Communications with Our Board of Directors
Our
company welcomes comments and questions from our shareholders. Shareholders
should direct all communications to our President, David Loflin, at our
executive offices. However, while we appreciate all comments from
shareholders, we may not be able to respond individually to all
communications. We attempt to address shareholder questions and
concerns in our press releases and documents filed with the SEC, so that all
shareholders have access to information about us at the same
time. Mr. Loflin collects and evaluates all shareholder
communications. All communications addressed to our directors and
executive officers will be reviewed by those parties, unless the communication
is clearly frivolous.
Code
of Ethics
As of the
date of this Prospectus, our Board of Directors has not adopted a code of ethics
with respect to our directors, officers and employees.
EXECUTIVE
COMPENSATION
The
following table sets forth certain compensation information for our executive
officers since the inception of our company.
-32-
Summary
Compensation Table
Name and
Principal
Position
|
Year
|
Salary
($)
|
Bonus
($)
|
Stock
Awards
($)
|
Option
Awards
($)
|
Non-
Equity
Incentive
Plan
Compen-
sation
($)
|
Non-
qualified
Deferred
Compen-
sation
Earnings
($)
|
All
Other
Compen-
sation
($)
|
Total
($)
|
|||||||||||||||||||||||||
David
Loflin
|
2010
|
— | (1) | — | — | — | — | — | 1,638 | (2) | 1,638 | (2) | ||||||||||||||||||||||
President
|
||||||||||||||||||||||||||||||||||
Waddell
D. Loflin
|
2010
|
— | (3) | — | 2,500 | (4) | — | — | — | — | 2,500 | (4) | ||||||||||||||||||||||
Vice
President, Acting Chief Financial Officer, Secretary and
Treasurer
|
(1)
|
Mr.
David Loflin, our President, currently has committed to provide up to 30
hours per week providing management services to us. He has
agreed to work for no cash remuneration until such time as we generate
sufficient revenues for the payment of salaries to our
management.
|
(2)
|
As
part of our initial capitalization, we issued Mr. David Loflin 2,000,000
warrants to purchase a like number of shares of our common stock. $1,638
of the value of these warrants was recorded as compensation expense in our
financial statements.
|
(3)
|
Mr.
Waddell Loflin, our Vice President, Acting Chief Financial Officer and
Secretary, currently has committed to provide up to 30 hours per week
providing management services to us. He has agreed to work for
no cash remuneration until such time as we generate sufficient revenues
for the payment of salaries to our
management.
|
(4)
|
We
issued 500,000 shares of our common stock to Mr. Waddell Loflin as a
retention bonus, which shares were valued by our Board of Directors at
$2,500.
|
Currently,
our management is unable to estimate accurately when our company will generate
sufficient revenues for the payment of salaries to our
management. Also, our Board of Directors has yet to determine the
level of compensation that is to be paid to any of our management
personnel.
As of the
date of this Prospectus, there are no annuity, pension or retirement benefits
proposed to be paid to officers, directors or employees of our company, pursuant
to any presently existing plan provided or contributed to by our
company.
Outstanding
Equity Awards Since Inception
Option Awards
|
Stock Awards
|
|||||||||||||||||||||||||||||||||||
Name
|
Number of
Securities
Underlying
Unexercised
Options (#)
Exercisable
|
Number of
Securities
Underlying
Unexercised
Options (#)
Unex-
ercisable
|
Equity
Incentive
Plan
Awards:
Number of
Securities
Underlying
Unexercised
Unearned
Options (#)
|
Option
Exercise
Price ($)
|
Option
Expira-
tion Date
|
Number
of Shares
or Units
of Stock
That
Have
Not
Vested
(#)
|
Market
Value
of
Shares
or
Units
of
Stock
That
Have
Not
Vested
($)
|
Equity
Incentive
Plan
Awards:
Number of
Unearned
Shares,
Units or
Other
Rights
That Have
Not Vested
(#)
|
Equity
Incentive
Plan
Awards:
Market or
Payout
Value of
Unearned
Shares,
Units or
Other
Rights
That Have
Not Vested
($)
|
|||||||||||||||||||||||||||
None
|
— | — | — | — | n/a | — | n/a | — | — |
Long-Term
Incentive Plans
We
currently have no long-term incentive plans.
-33-
Director
Compensation
Our
directors receive no compensation for their serving as directors.
SECURITY
OWNERSHIP OF CERTAIN
BENEFICIAL
OWNERS AND MANAGEMENT
Ownership
of Common Stock
The
following table sets forth certain information as of the date of this
Prospectus, with respect to the beneficial ownership of shares of our common
stock by (i) each person known to us who owns beneficially more than 5% of the
outstanding shares of common stock, (ii) each of our directors, (iii) each of
our executive officers and (iv) all of our executive officers and directors as a
group. Unless otherwise indicated, each shareholder has sole voting and
investment power with respect to the shares shown. As of the date of
this Prospectus, we had 25,880,000 shares of common stock issued and
outstanding.
Name and Address
of
|
Prior to This Offering
|
After This Offering
|
||||||||||||||
Beneficial Owner
|
Shares Owned
|
% (1)
|
Shares Owned
|
% (2)
|
||||||||||||
David
Loflin
|
15,000,000 | (3) | 48.42 | % | 14,000,000 | (3) | 43.78 | % | ||||||||
Waddell
D. Loflin
|
500,000 | 1.61 | % | 500,000 | 1.56 | % | ||||||||||
Newlan
& Newlan (4)
|
7,000,000 | (3) | 22.60 | % | 6,000,000 | (3) | 18.76 | % | ||||||||
Officers
and directors as a group (2 persons)
|
15,500,000 | (3) | 50.03 | % | 14,500,000 | (3) | 45.34 | % |
(1)
|
Based
on 30,980,000 shares outstanding, including 5,100,000 shares underlying
currently exercisable warrants.
|
(2)
|
Based
on 31,980,000 shares outstanding, including 5,100,000 shares underlying
currently exercisable warrants and assuming the issuance of 1,000,000
shares in the Direct Public
Offering.
|
(3)
|
2,000,000
of these shares are unissued, but underlie currently exercisable
warrants.
|
(4)
|
The
law firm of Newlan & Newlan is our company’s legal counsel; the firm’s
address is 800 Parker Square, Suite 205, Flower Mound, Texas
75028.
|
Voting
Agreement
The
original terms of a pre-incorporation agreement among three of our shareholders,
David Loflin, Paul J. Goldman, M.D. and Newlan & Newlan, contained an
agreement for the parties to vote for David Loflin as a director of our
company. This voting agreement has been terminated by the
parties.
Shares
Eligible for Future Sale
As of the
date of this Prospectus, there were 25,880,000 shares of our common stock issued
and outstanding.
Shares
Covered by this Prospectus. As of the date of this Prospectus,
all 8,380,000 shares being offered hereunder by the Selling Shareholders may be
sold without restriction under the Securities Act.
Rule
144. A person who has beneficially owned restricted shares of
our common stock or warrants for at least six months would be entitled to sell
their common stock provided that (1) such person is not deemed to have been one
of our affiliates at the time of, or at any time during the three months
preceding, a sale, (2) we had been subject to the Exchange Act reporting
requirements for at least 90 days before the sale and, (3) if the sale occurs
prior to satisfaction of a one-year holding period, we provide current
information at the time of sale.
-34-
Persons
who have beneficially owned restricted shares of our common stock or warrants
for at least six months, but who are our affiliates at the time of, or at any
time during the three months preceding, a sale, would be subject to additional
restrictions, by which such person would be entitled to sell within any
three-month period only a number of common stock that does not exceed the
greater of:
|
·
|
1%
of the total number of shares of common stock then outstanding, which, as
of the date of this Prospectus, equals approximately 258,800 shares;
and
|
|
·
|
the
average weekly trading volume of such securities during the four calendar
weeks preceding the filing of a notice on Form 144 with respect to such
sale;
|
provided,
in each case, that we are subject to the Exchange Act periodic reporting
requirements for at least three months before the sale.
However,
since we anticipate that our shares will be quoted on the OTC Bulletin Board,
which is not an “automated quotation system”, our shareholders will not be able
to rely on the market-based volume limitation described in the second item
above. If, in the future, our common stock is listed on an exchange or quoted on
NASDAQ, then our shareholders would be able to rely on the market-based volume
limitation. Unless and until our common stock is so listed or quoted,
our shareholders are able to rely only on the percentage-based volume limitation
described in the first item above.
Such
sales by affiliates must also comply with the manner of sale, current public
information and notice provisions of Rule 144. The Selling
Shareholders will not be governed by the foregoing restrictions when selling
their shares pursuant to this Prospectus.
CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS
Pre-incorporation
Agreement
In August
2010, three of our shareholders, David Loflin, our President, Paul J. Goldman,
M.D. and Newlan & Newlan, our legal counsel, entered into a
pre-incorporation agreement. This agreement contained the following
provisions:
|
·
|
Securities
Issuances. Mr. Loflin, Dr. Goldman and Newlan &
Newlan purchased securities of our company, as
follows:
|
|
·
|
David
Loflin purchased 13,000,000 shares of Common Stock and 2,000,000 warrants
to purchase a like number of shares of Common Stock at an exercise price
of $.10 per share, for items of personal property and intellectual
property valued by our Board of Directors at
$13,000.
|
|
·
|
Paul
J. Goldman, M.D. purchased 600,000 shares of Common Stock and 180,000
warrants to purchase a like number of shares of Common Stock at an
exercise price of $.10 per share, for $6,000 in
cash.
|
|
·
|
Newlan
& Newlan, our legal counsel, was issued 5,000,000 shares of Common
Stock and 2,000,000 warrants to purchase a like number of shares of Common
Stock at an exercise price of $.10 per share, in payment of $10,000 in
legal services.
|
|
·
|
Voting
Agreement. The original terms of this agreement required
the parties to vote for David Loflin as a director of our
company. This voting agreement has been terminated by the
parties.
|
-35-
Retention
Bonus
In August
2010, we issued 500,000 shares of our common stock to one of our officers,
Waddell D. Loflin, as a retention bonus, which shares were valued by our Board
of Directors at $2,500, in the aggregate.
LEGAL
MATTERS
The
validity of the shares to be sold by us under this Prospectus will be passed
upon for us by Newlan & Newlan, Flower Mound, Texas. Newlan &
Newlan owns 5,000,000 shares of our common stock and 2,000,000 warrants to
purchase a like number of shares.
EXPERTS
Our
financial statements for the period from August 17, 2010 (inception), to
September 30, 2010, included in this Prospectus have been audited by PMB Helin
Donovan, LLP, as set forth in its report of independent registered public
accounting firm included in this Prospectus. Its report is given upon
its authority as an expert in accounting and auditing.
COMMISSION
POSITION ON INDEMNIFICATION
FOR
SECURITIES ACT LIABILITIES
Our
Articles of Incorporation provide that we shall indemnify our directors and
officers to the fullest extent permitted by Nevada law and that none of our
directors will be personally liable to our company or our shareholders for
monetary damages for breach of fiduciary duty as a director, except for
liability:
·
|
for
any breach of the director’s duty of loyalty to our company or our
shareholders;
|
·
|
for
acts or omissions not in good faith or that involve intentional misconduct
or a knowing violation of the
law;
|
·
|
under
Nevada law for the unlawful payment of dividends;
or
|
·
|
for
any transaction from which the director derives an improper personal
benefit.
|
These
provisions require us to indemnify our directors and officers unless restricted
by Nevada law and eliminate our rights and those of our shareholders to recover
monetary damages from a director for breach of his fiduciary duty of care as a
director except in the situations described above. The limitations summarized
above, however, do not affect our ability or that of our shareholders to seek
non-monetary remedies, such as an injunction or rescission, against a director
for breach of his fiduciary duty.
Insofar
as indemnification for liabilities arising under the Securities Act may be
permitted to our directors, officers and controlling persons pursuant to the
foregoing provisions, we have been advised that, in the opinion of the SEC, such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable.
WHERE
YOU CAN FIND MORE INFORMATION
We
have filed with the SEC a registration statement on Form S-1, including this
Prospectus, exhibits, schedules and amendments, under the Securities Act, with
respect to the shares of common stock to be offered and sold in this
offering. This Prospectus does not contain all of the information
included in the registration statement. For further information about
us and the shares of our common stock to be offered and sold in this offering,
please refer to this registration statement (Commission File No.:
333-169924).
As of the
date of this Prospectus, we became subject to the informational requirements of
the Exchange Act. Accordingly, we will file annual, quarterly and
special reports and other information with the SEC. You may read and
copy any document we file at the SEC's public reference room at 100 F Street, N.
E., Washington, D.C. 20549. You should call the SEC at 1-800-SEC-0330
for further information on the public reference rooms. Our SEC
filings will also be available to the public at the SEC's web site located at
http:/www.sec.gov.
-36-
INDEX
TO FINANCIAL STATEMENTS
Page
|
|
Louisiana
Food Company
|
|
Report
of Independent Registered Public Accounting Firm
|
F-1
|
Balance
Sheet as of September 30, 2010
|
F-2
|
Statement
of Operations for the Period from Inception (August 17, 2010) to September
30, 2010
|
F-3
|
Statement
of Changes in Stockholders’ Equity for the Period from Inception (August
17, 2010) to September 30, 2010
|
F-4
|
Statement
of Cash Flows for the Period from Inception (August 17, 2010) to September
30, 2010
|
F-5
|
Notes
to Financial Statements
|
F-6
|
-37-
Report
of Independent Registered Public Accounting Firm
The Board
of Directors and Shareholders
Louisiana
Food Company:
We have
audited the accompanying balance sheet of Louisiana Food Company (the Company)
(a development stage company) as of September 30, 2010, and the related
statements of operations, shareholders' equity(deficit), and cash flows for the
period from inception (August 17, 2010) through September 30, 2010. These
financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We
conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. The Company is not required to
have, nor were we engaged to perform, an audit of its internal control over
financial reporting. Our audit included consideration of internal
control over financial reporting as a basis for designing audit procedures that
are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Company's internal control over financial
reporting. Accordingly, we express no such opinion. An audit also includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audit provides a reasonable basis for our opinion.
In our
opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Louisiana Food Company as of
September 30, 2010, and the results of its operations and its cash flows for the
period from inception (August 17, 2010) through September 30, 2010, in
conformity with generally accepted accounting principles in the United States of
America.
The
accompanying financial statements have been prepared assuming that the Company
will continue as a going concern. As discussed in Note 1 to the
financial statements the Company has sustained a net loss from operations and
has an accumulated deficit during the development stage. These
factors raise substantial doubt about the Company’s ability to continue as a
going concern. Management’s plans in this regard are also described
in Note 1. The financial statements do not include any adjustments
that might result from the outcome of this uncertainty.
The
accumulated equity (deficit) during the development stage for the period from
date of inception (August 17, 2010) through September 30, 2010, is
$40,415.
PMB
Helin Donovan, LLP
|
/s/
PMB HELIN DONOVAN, LLP
|
October
13, 2010
|
Dallas,
Texas
|
F-1
LOUISIANA
FOOD COMPANY
(A
Development Stage Company)
BALANCE
SHEET
September
30, 2010
ASSETS
|
||||
Current
assets
|
||||
Cash
and cash equivalents
|
$ | 22,353 | ||
Inventory
|
5,031 | |||
Deposits
|
603 | |||
Total
current assets
|
27,987 | |||
Equipment,
net of accumulated depreciation of $55
|
1,945 | |||
Intangible
assets
|
10,483 | |||
Total
assets
|
$ | 40,415 | ||
LIABILITIES
AND STOCKHOLDERS’ EQUITY (DEFICIT)
|
||||
Commitments
and contingencies
|
– | |||
Stockholders’
equity
|
||||
Preferred
stock, $.001 par value: 5,000,000 shares authorized; zero shares issued
and outstanding
|
$ | — | ||
Common
stock, $.001 par value: 50,000,000 shares authorized; 25,700,000 shares
issued and outstanding
|
25,450 | |||
Additional
paid-in capital
|
65,326 | |||
Subscription
receivable
|
(15,000 | ) | ||
Deficit
accumulated during development stage
|
(35,361 | ) | ||
|
||||
Total
stockholders’ equity
|
40,415 | |||
Total
liabilities and stockholders’ equity
|
$ | 40,415 |
The
accompanying notes are an integral part of these statements.
F-2
LOUISIANA
FOOD COMPANY
(A
Development Stage Company)
STATEMENT
OF OPERATIONS
For
the Period from Inception (August 17, 2010) to September 30, 2010
Revenues
|
$ | — | ||
Cost
of sales
|
— | |||
Gross
profit
|
— | |||
Expenses:
|
||||
Compensation
|
4,138 | |||
Consulting
|
10,860 | |||
Legal
and professional
|
16,638 | |||
Depreciation
and amortization
|
55 | |||
Corporate
expenses
|
1,056 | |||
Rent
|
469 | |||
General
and administrative
|
2,145 | |||
Total
operating expenses
|
35,361 | |||
Loss
before income taxes
|
(35,361 | ) | ||
Provision
for income taxes
|
— | |||
Net
loss
|
$ | (35,361 | ) | |
Income
(loss) per share:
|
||||
Basic
and diluted
|
$ | (0.00 | ) | |
Weighted
average number of shares outstanding:
|
||||
Basic
and diluted
|
22,134,883 |
The
accompanying notes are an integral part of these statements.
F-3
LOUISIANA
FOOD COMPANY
(A
Development Stage Company)
STATEMENT
OF STOCKHOLDERS’ (DEFICIT) EQUITY
For
the Period From Inception (August 17, 2010) to September 30,
2010
Deficit
|
||||||||||||||||||||||||
Accumulated
|
||||||||||||||||||||||||
during
|
Stockholders’
|
|||||||||||||||||||||||
Common
Stock, $.001 par value
|
Additional
|
Subscription
|
Development
|
(Deficit)
|
||||||||||||||||||||
Shares
|
Amount
|
Paid-in
Capital
|
Receivable
|
Stage
|
Equity
|
|||||||||||||||||||
Balance,
August 17, 2010
|
—
|
$ |
—
|
$ |
—
|
$ |
—
|
$ |
—
|
$ |
—
|
|||||||||||||
Stock
issued for property at $.001 per share
|
13,000,000 | 13,000 |
—
|
—
|
—
|
13,000 | ||||||||||||||||||
Stock
issued for services at $.002 per share
|
5,000,000 | 5,000 | 5,000 |
—
|
—
|
10,000 | ||||||||||||||||||
Stock
issued for cash at $.01 per share
|
3,700,000 | 3,700 | 33,300 |
—
|
—
|
37,000 | ||||||||||||||||||
Stock
issued for cash at $.01 per share
|
1,500,000 | 1,500 | 13,500 | (15,000 | ) |
—
|
— | |||||||||||||||||
Stock
issued for bonus at $.01 per share
|
500,000 | 500 | 2,000 |
—
|
—
|
2,500 | ||||||||||||||||||
Stock
issued for services
|
2,000,000 | 2,000 | 8,000 |
—
|
—
|
10,000 | ||||||||||||||||||
Warrants
issued for services
|
—
|
—
|
132,850 |
—
|
—
|
3,276 | ||||||||||||||||||
Net
loss
|
—
|
—
|
—
|
—
|
(35,361 | ) | (35,361 | ) | ||||||||||||||||
Balance,
September 30, 2010
|
25,700,000 | $ | 25,700 | $ | 61,800 | $ | (15,000 | ) | $ | (35,361 | ) | $ | 40,415 |
The
accompanying notes are an integral part of these statements.
F-4
LOUISIANA
FOOD COMPANY
(A
Development Stage Company)
STATEMENT
OF CASH FLOWS
For
the Period from Inception (August 17, 2010) to September 30, 2010
CASH
FLOWS FROM OPERATING ACTIVITIES
|
||||
Net
loss
|
$ | (35,361 | ) | |
Adjustments
to reconcile net loss to cash used for operating
activities:
|
||||
Depreciation
and amortization
|
55 | |||
Non-cash
operating expenses
|
25,776 | |||
(Increase)
in deposits
|
(603 | ) | ||
(Increase)
in inventory
|
(2,514 | ) | ||
Net
cash used for operating activities
|
(12,647 | ) | ||
CASH
FLOWS FROM INVESTING ACTIVITIES
|
||||
Purchase
of equipment
|
(2,000 | ) | ||
Net
cash used in investing activities
|
(2,000 | ) | ||
CASH
FLOWS FROM FINANCING ACTIVITIES
|
||||
Proceeds
from sale of common stock for cash
|
52,000 | |||
Subscription
receivable
|
(15,000 | ) | ||
Net
cash provided by financing activities
|
37,000 | |||
NET
CHANGE IN CASH
|
22,353 | |||
Cash,
beginning of period
|
— | |||
Cash,
end of period
|
$ | 22,353 | ||
Supplemental disclosure:
|
||||
Interest
paid
|
$ | — | ||
Income
taxes paid
|
$ | — | ||
Non-cash
financing and investing activities
|
||||
Stock
issued for services
|
$ | 20,000 | ||
Stock
issued for inventory and intangible asset
|
$ | 13,000 | ||
Stock
issued for bonus
|
$ | 2,500 | ||
Warrants
issued for services
|
$ | 3,276 |
The
accompanying notes are an integral part of these statements.
F-5
LOUISIANA
FOOD COMPANY
(A
Development Stage Company)
NOTES
TO FINANCIAL STATEMENTS
September
30, 2010
NOTE
1. THE COMPANY
Louisiana
Food Company (the “Company”) was incorporated in the State of Nevada on August
17, 2010 (Inception). The Company’s focus is on the development and
commercial exploitation of food-related business opportunities in the State of
Louisiana. To date, the Company has developed a line of packaged specialty
food products, a line of specialty pasta sauces and a line of specialty coffee
products, and sells these specialty food product lines to distributors,
retailers and over the Internet. Because each of the Company’s products is
produced locally in Louisiana, the Louisiana Department of Agriculture and
Forestry has granted the Company a license to affix the Department’s “Certified”
logos on the Company’s products. The Company’s leased headquarters and
kitchen facilities are located within a food technology incubator established by
the River Parish Community Development Corporation which offers the Company
extremely economic access to FDA-approved commercial kitchen
facilities.
Liquidity
and Management Plans
At
September 30, 2010, the Company had cash and cash equivalents of $22,353,
working capital of $27,987 and an accumulated deficit during the development
stage of $35,361. Management has taken several actions to ensure that the
Company will have sufficient cash for its working capital needs through
September 30, 2011, including minimization of discretionary expenditures,
maintenance of no debt liabilities, commitment to a minimal office lease of $200
per month for one year, and use of health code compliant kitchen facilities on
an hourly basis to handle its sales orders on an as needed basis. The Company
plans to seek an additional equity infusion to support operations through a
stock offering. Management believes that these actions will enable the
Company to meet its working capital needs through September 30,
2010.
Going
Concern
The
Company has incurred losses totaling $35,361 from its Inception through
September 30, 2010, and had limited working capital at September 30, 2010.
Because of these conditions, the Company will require additional working capital
to continue operations and develop its business. The Company intends to raise
additional working capital either through private placements, public offerings
and/or bank financing.
There are
no assurances that the Company will be able to achieve a level of revenues
adequate to generate sufficient cash flow from operations or obtain additional
financing through private placements, public offerings and/or bank financing
necessary to support the Company’s working capital requirements. To the extent
that funds generated from any private placements, public offerings and/or bank
financing are insufficient, the Company will have to raise additional working
capital. No assurance can be given that additional financing will be available,
or if available, will be on terms acceptable to the Company. If adequate working
capital is not available, the Company may not continue its operations or execute
its business plan.
These
conditions raise substantial doubt about the Company’s ability to continue as a
going concern. The financial statements do not include any adjustments relating
to the recoverability and classification of asset carrying amounts or the amount
and classification of liabilities that might be necessary should the Company be
unable to continue as a going concern.
F-6
NOTE
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis
of Presentation
The
Company presents its financial statements in accordance with generally accepted
accounting principles in the United States (“GAAP”). In June 2009, the Financial
Accounting Standards Board (“FASB”) completed its accounting guidance
codification project. The FASB Accounting Standards Codification (“ASC”) is the
single source of authoritative accounting principles recognized by the FASB to
be applied by non-governmental entities in the preparation of financial
statements in conformity with GAAP. The Company refers to the ASC
Codification as the sole source of authoritative literature.
Development
Stage Company
The
Company has not generated revenue since Inception. The accompanying
financial statements have, therefore, been prepared using the accounting format
prescribed for a development stage company in ASC 915.
Use
of Estimates
The
preparation of financial statements in conformity with U.S. GAAP requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and liabilities at
the date of the financial statements and the reporting of amounts of revenues
and expenses during the reported period. Significant estimates include valuation
of receivables, inventory and stock warrants. Actual results could differ
from those estimates.
Fiscal
Year End
The
Company elected September 30 as its fiscal year ending date.
Cash
and Cash Equivalents
The
Company considers all highly liquid investments with maturities of three months
or less at the time of purchase to be cash equivalents.
Revenue
Recognition
The
Company derives its revenue from sales of its food and coffee products.
The Company recognizes revenue in accordance with ASC 605, Revenue
Recognition. Under the authoritative guidance, revenue is recognized when
there is persuasive evidence of an arrangement, delivery has occurred and
services have been rendered, the sales price is determinable and collectability
is reasonable assured. Sales are recorded net of discounts, rebates and
returns.
Accounts
Receivable
Accounts
receivable are recorded at the invoiced amount, net of an allowance for doubtful
accounts. The allowance for doubtful accounts is the Company’s best
estimate of the amount of probable credit losses in the Company’s existing
accounts receivable. The Company determines the allowance based on historical
write-off experience, customer specific facts and economic conditions.
Outstanding account balances are reviewed individually for collectability.
Bad debt expense is included in general and administrative expenses. To
date, the Company has not charged off any balances, as all of its accounts
receivable are currently not of an “aged” nature.
The
Company does not have any off-balance-sheet credit exposure to its
customers.
Inventory
Inventory
is composed of coffee and food items needed to formulate the Company’s branded
products and are stated at lower of cost (first in, first out) or market through
the use of a valuation allowance. In order to assess the ultimate
realization of inventories, the Company makes judgments as to future demand
compared to current inventory levels. No such allowance is currently
established at September 30, 2010.
F-7
Property
and Equipment
Property
and equipment are carried at cost. Depreciation and amortization is
computed on the straight-line method over the estimated useful lives of the
assets. The estimated useful life of the Company’s equipment is three
years. Depreciation expense for the period from Inception to September 30, 2010,
was $55.
Intangible
Assets
Intangibles
consist of trade names, trademarks, brand names and recipes. Purchased
trademarks are initially measured based on their fair values. Trademarks
include purchased trademarks, brand names, logos or other recognizable symbols
associated with the Company's products. Trademarks are not amortized
because they have indefinite lives. Assets determined to have indefinite
lives are no longer amortized in accordance with ASC 350, Goodwill and other
Intangibles, but are tested for impairment on an annual basis. The
carrying amount of intangibles not subject to amortization is $10,483 as of
September 30, 2010.
The
Company evaluates the recoverability of identifiable intangible assets annually
or whenever events or changes in circumstances indicate that an intangible
asset's carrying amount may not be recoverable. Such circumstances could
include, but are not limited to: (1) a significant decrease in the market value
of an asset, (2) a significant adverse change in the extent or manner in which
an asset is used, or (3) an accumulation of costs significantly in excess of the
amount originally expected for the acquisition of an asset. The Company
measures the carrying amount of the asset against the estimated undiscounted
future cash flows associated with it. If the sum of the expected future
net cash flows are less than the carrying value of the asset being evaluated, an
impairment loss would be recognized. The impairment loss would be
calculated as the amount by which the carrying value of the asset exceeds its
fair value. The fair value is measured based on quoted market prices, if
available. If quoted market prices are not available, the estimate of fair
value is based on various valuation techniques, including the discounted value
of estimated future cash flows. The evaluation of asset impairment
requires the Company to make assumptions about future cash flows over the life
of the asset being evaluated. These assumptions require significant
judgment and actual results may differ from assumed and estimated amounts.
During the period from Inception through September 30, 2010, the Company
recorded no impairment losses related to an intangible asset.
Fair
Value of Financial Instruments
The
Company adopted ASC 820, Fair
Value Measurements and Disclosures (ASC 820) for nonfinancial assets and
nonfinancial liabilities measured on a nonrecurring basis in August 2010, and
such adoption did not have a material impact on the Company’s financial
statement disclosures. ASC 820 defines fair value as the exchange price
that would be received for an asset or paid to transfer a liability (an exit
price) in the principle or most advantageous market for the asset or liability
in an orderly transaction between market participants on the measurement date.
ASC 820 also establishes a fair value hierarchy which requires an entity to
maximize the use of observable inputs and minimize the use of unobservable
inputs when measuring fair value.
The
levels of the fair value hierarchy established by ASC 820 are:
Level
1:
|
inputs
are quoted prices, unadjusted, in active markets for identical assets or
liabilities that the reporting entity has the ability to access at the
measurement date.
|
Level
2:
|
inputs
are other than quoted prices included within Level 1 that are observable
for the asset or liability, either directly or indirectly. A Level 2 input
must be observable for substantially the full term of the asset or
liability.
|
Level
3:
|
inputs
are unobservable and reflect the reporting entity’s own assumptions about
the assumptions that market participants would use in pricing the asset or
liability.
|
At
September 30, 2010, the Company does not have any assets or liabilities which
are recorded at fair value on a recurring basis.
F-8
The
Company considers the recorded value of certain of its financial assets and
liabilities, which consist primarily of cash and cash equivalents and other
current assets, to approximate the fair value of the respective assets at
September 30, 2010, based upon the short-term nature of the assets. The
carrying value of certain of the financial instruments, of other current assets,
approximate fair value due to their short maturities.
Equity
Instruments Issued to Parties Other than Employees for Acquiring Goods or
Services
The
Company accounts for equity instruments issued to parties other than employees
for acquiring goods or services under guidance of ASC 505-50-30. Pursuant
to ASC 505-50-30, all transactions in which goods or services are the
consideration received for the issuance of equity instruments are accounted for
based on the fair value of the consideration received or the fair value of the
equity instrument issued, whichever is more reliably measurable. The
measurement date used to determine the fair value of the equity instrument
issued is the earlier of the date on which the performance is complete, the date
on which it is probable that performance will occur or the date of issuance of
the equity instrument.
Provision
for Income Taxes
Income
taxes are calculated based upon the liability method of accounting in accordance
with ASC 750-10-60, Income
Taxes. In accordance with ASC 750-10-60, deferred income taxes are
recorded to reflect the tax consequences in future years of differences between
the tax basis of assets and liabilities and their financial reporting amounts at
each year-end. A valuation allowance is recorded against deferred tax
assets if management does not believe the Company has met the “more likely than
not” standard to allow for recognition of such an asset. In addition,
realization of an uncertain income tax position must be estimated as “more
likely than not” (i.e., greater than 50% likelihood of receiving a benefit)
before it can be recognized in the financial statements. Further, the
recognition of tax benefits recorded in the financial statements to be based on
the amount most likely to be realized assuming a review by tax authorities
having all relevant information. The Company had minimal impact from
adoption of this Interpretation.
Net
Income (Loss) per Common Share
The
Company is required to provide basic and dilutive earnings (loss) per common
share information. The basic net loss per common share is computed by
dividing the net loss applicable to common stockholders by the weighted average
number of common shares outstanding.
Diluted
net loss per common share is computed by dividing the net loss applicable to
common stockholders, adjusted on an “as if converted” basis, by the weighted
average number of common shares outstanding plus potential dilutive
securities. At September 30, 2010, there were potentially dilutive
securities outstanding consisting of warrants convertible into 5,100,000 shares
of common stock.
Basic
loss per share has been calculated based on the weighted average number of
shares of common stock outstanding during the period.
Subsequent
Events
The
Company evaluates events that occur subsequent to the balance sheet date of
periodic reports, but before financial statements are issued for periods ending
on such balance sheet dates, for possible adjustment to such financial
statements or other disclosure. This evaluation generally occurs through the
date at which the Company’s financial statements are electronically prepared for
filing.
Concentrations
of Risk
The
Company currently has only a single source for its packaged dry products and
coffee products. The Company’s market is currently concentrated in the
State of Louisiana and, through the Internet and its distributor program, is
attempting to broaden its market to other states. At September 30, 2010,
the Company has a very small established customer base.
F-9
Property
The
Company does not own any real property. The Company currently leases
corporate office space and FDA-approved commercial kitchen facilities in Norco,
Louisiana.
Recently
Issued Accounting Pronouncements
Accounting Standards
Codification: In June 2009, the Financial Accounting Standards Board
(“FASB”) issued Statement of Financial Accounting Standard (“SFAS”) No. 168,
The FASB Accounting Standards
Codification and the Hierarchy of Generally Accepted Accounting Principles – a
replacement of FASB Statement No. 162 (“SFAS 168”). The guidance
establishes the FASB Accounting Standards Codification (“ASC”) as the source of
authoritative accounting principles recognized by the FASB. The guidance is
effective for financial statements issued for interim and annual periods ending
after September 15, 2009. The Company adopted this guidance for its fiscal
year ended September 30, 2010. There was no change to the Company’s financial
statements due to the implementation of this guidance.
Fair
Value Measurements: In August 2009, the FASB issued Accounting Standards Update
(“ASU”) No. 2009-05, Measuring
Liabilities at Fair Value (“ASU 2009-05”). ASU 2009-05 provides
clarification that in circumstances in which a quoted price in an active market
for the identical liability is not available, a reporting entity is required to
measure fair value of such liability using one or more of the techniques
prescribed by the update. ASU 2009-05 is effective for the first reporting
period beginning after issuance. The Company adopted ASU 2009-05 for its fiscal
year ended September 30, 2010. There was no change to its financial statements
due to the implementation of this guidance.
In
January 2010, the FASB issued ASU No. 2010-06, Fair Value Measurements and
Disclosures (Topic 820): Improving Disclosures about Fair Value
Measurements (“ASU 2010-06”). Reporting entities will have to
provide information about movements of assets among Levels 1 and 2; and a
reconciliation of purchases, sales, issuance, and settlements of activity valued
with a Level 3 method, of the three-tier fair value hierarchy established by
SFAS No. 157. The ASU 2010-06 also clarifies the existing guidance to
require fair value measurement disclosures for each class of assets and
liabilities. ASU 2010-06 is effective for interim and annual reporting periods
beginning after December 15, 2009, for Level 1 and 2 disclosure requirements and
after December 15, 2010, for Level 3 disclosure requirements. The Company
will adopt the guidance in its fiscal quarter ending March 31, 2010. The
Company does not anticipate this adoption will have a material impact on its
financial statements.
Transfers of Financial
Assets: In December 2009, the FASB issued ASU No. 2009-16,
Transfers and Servicing (Topic
860)—Accounting for Transfers of Financial Assets (“ASU 2009-16”). ASU
2009-16 codifies SFAS No. 166, Accounting for Transfers of
Financial Assets – an amendment of FASB Statement No. 140
(“SFAS 166”), issued in June 2009. The guidance eliminates the concept of a
“qualifying special-purpose entity” and changes the requirements for
derecognizing financial assets. The guidance is effective as of the beginning of
the first annual reporting period that begins after November 15, 2009.
Earlier adoption is prohibited. The Company will adopt the guidance in the first
quarter of fiscal 2011. The Company does not anticipate this adoption will have
a material impact on its financial statements.
Amendments to Accounting Standards
Codification: In February 2010, the FASB issued ASU
No. 2010-08, Technical
Corrections to Various Topics (“ASU 2010-08”). ASU 2010-08 makes various
non-substantive amendments to the FASB Codification that does not fundamentally
change existing GAAP; however, certain amendments could alter the application of
GAAP relating to embedded derivatives and the income tax aspects of
reorganization. The amended guidance is effective beginning in the first interim
or annual period beginning after the release of the ASU, except for certain
amendments. The Company will adopt the guidance in the first quarter of
2011. The Company does not anticipate this adoption will have a material impact
on its financial statements.
Subsequent Events: On
February 24, 2010, the FASB issued ASU No. 2010-09, Subsequent Events (Topic 855) –
Amendments to Certain Recognition and Disclosure Requirements (“ASU
2010-09”). ASU 2010-09 removes the requirement that SEC filers disclose the date
through which subsequent events have been evaluated. This amendment alleviates
potential conflicts between Subtopic 855-10 and the SEC’s requirements. The
guidance became effective with the issuance of ASU 2010-09 and the Company has
adopted this guidance.
F-10
In
January 2010, the FASB issued Accounting Standards Update 2010-04, Accounting for Various Topics –
Technical Corrections for SEC Paragraphs (“Update”). Included in
the Update is clarification as to the date of issuance of a financial statement
including clarification of subsequent events issues in relation to the issuance
of such financial statements (FASB ASC 855-10-S99). The Company does not
believe that this update will have a material impact on its financial
statements.
In
January 2010, the FASB issued Accounting Standards Update 2010-06, Fair Value Measurements and
Disclosures (“FV Update”), requiring disclosures for transfers in and out
of Level 1 and 2 fair value measurements and descriptions for the reasons for
the transfers, as well as increased disclosure requirements for activity in
Level 3 fair value measurements. The FV Update was issued to amend current
disclosure requirements for such valuations. The Company does not believe
that this update will have a material impact on its financial
statements.
NOTE
3. RELATED-PARTY TRANSACTIONS
The
Company was formed pursuant to a pre-incorporation agreement. The
Company’s President was a party to this agreement and was, upon formation of the
Company and in accordance with the pre-incorporation agreement, issued
13,000,000 shares of Company common stock and 2,000,000 warrants to purchase a
like number of shares at an exercise price of $.10 per share. The Company
received items of personal and intellectual property in exchange for its shares
of common stock. The Company’s Board of Directors determined that the
aggregate value of the items of property was $13,000, of which $2,517 has been
recorded as inventory and $10,483 has been recorded as an intangible
asset. The value of the warrants of $1,638 has been included in
compensation expense.
The
Company’s legal counsel was also a party to the pre-incorporation agreement and
is considered a promoter of the Company. Upon formation of the Company and
in accordance with the pre-incorporation agreement, the Company’s legal counsel
was issued 5,000,000 shares of Company common stock and 2,000,000 warrants to
purchase a like number of shares at an exercise price of $.10 per share, in
payment of $10,000 in legal services. The value of the warrants of $1,638
has been included in professional fees.
NOTE
4. INCOME TAXES
At
September 30, 2010, the Company had deferred tax assets principally arising from
net operating loss carry-forwards for income tax purposes. The Company
calculates its deferred tax assets using the federal tax rate of 35% and the
following state tax rates: Louisiana (from 4-8%). Due to its net
operating loss and the uncertainty of future profitability and limitations on
the utilization of net operating loss carry-forwards under IRC Section 382, a
valuation allowance has been recorded to fully offset the Company’s deferred tax
asset.
The
actual Federal income tax provision differs from the amount computed by applying
the Federal corporate income tax rate of 35% to income before taxes as follows
for the years ended September 30, 2010:
2010
|
||||
Expected
federal tax benefit
|
$ | 12,376 | ||
States
and local taxes
|
0 | |||
Non-deductible
expenses
|
3,276 | |||
Change
in valuation allowance
|
(12,376 | ) | ||
Income
tax expense
|
$ | 0 |
The tax
effect of temporary differences that give rise to the deferred tax assets at
September 30, 2010, are as follows:
F-11
2010
|
||||
Net
operating loss carryforwards
|
$ | (32,085 | ) | |
Intangible
assets
|
10,483 | |||
Depreciation
|
(1,995 | ) | ||
Valuation
allowance
|
(23,597 | ) | ||
Net
deferred tax assets
|
$ | 0 |
In
assessing the realization of deferred tax assets, management determines whether
it is more likely than not some, or all, of the deferred tax asset will not be
realized. The ultimate realization of deferred tax assets is dependent
upon the generation of future taxable income during the periods in which those
temporary differences become deductible. Management considers projected future
taxable income. Management considers projected taxable income and tax
planning strategies in making this assessment. Based upon the level of
historical taxable losses and projected taxable losses over the periods that the
deferred tax assets are deductible, management believes it is more likely than
not that the Company will not realize the benefits of these deductible
differences and thus recorded a valuation allowance against the entire deferred
tax asset balance.
At
September 30, 2010, the Company had net operating loss carry-forwards of
approximately $32,085 for federal income tax purposes. The net operating
loss carry-forwards are available to be utilized against future taxable income
through fiscal year 2030, subject to the Tax Reform Act of 1986, which imposed
substantial restrictions on the utilization of net operating losses and tax
credits in the event of an “ownership change” as defined by the Internal Revenue
Code. Federal and state net operating losses are subject to limitations as
a result of these restrictions. Under such circumstances, the Company’s
ability to utilize its net operating losses against future income may be
reduced.
A
reconciliation of the statutory of federal and state tax rates to the Company’s
effective tax rates is as follows:
2010
|
||||
Statutory
regular federal income tax rate
|
35 | % | ||
Statutory
regular state income tax rate
|
4-8 | % | ||
Change
in valuation allowance
|
(100 | )% | ||
Net
deferred tax assets
|
0 | % |
Reconciliation
of the statutory federal income tax rate to the Company's effective tax rate is
as follows:
2010
|
||||
Net
loss before taxes
|
$ | 35,361 | ||
U.S.
statutory rate
|
35 | % | ||
Increase
in deferred tax asset
|
12,376 | |||
Change
in deferred tax asset valuation account
|
(12,376 | ) | ||
Total
tax expense
|
$ | 0 | ||
Effective
tax rate
|
0.0 | % |
F-12
The
valuation allowance has been estimated in an amount equal to the projected
future benefit of the loss carryforward because there is no assumption that the
Company will generate sufficient income to utilize the tax benefit. The
losses incurred to date may be limited due to changes in control of the Company
and limitations on the deductibility of fees for services paid through the
issuance of common stock. The Company will have unused net operating
losses available for carry-forwards of approximately $32,085 that will start to
expire in 2030 in the United States of America.
NOTE
5. DEPOSITS
At
September 30, 2010, deposits, comprised entirely of a utility security deposit,
were $603.
NOTE
6. INTANGIBLE ASSETS
The
Company’s intangible assets include trademarks, brand names and recipes of its
food and coffee products acquired in exchange for the issuance of common
stock.
NOTE
7. CAPITAL STOCK
Common
Stock Issued for Property
During
the period from Inception through September 30, 2010, the Company issued
13,000,000 shares of its common stock for items of personal and intangible
property. Specifically, the Company received goods and recipes useful in
its specialty food business. The Company’s Board of Directors determined
that the aggregate value of the items of property was $13,000, of which $2,517
was determined to be inventory and $10,483 was determined to be recipes and
brand names.
Common
Stock Issued for Services
The
holders of the Company’s common stock currently have (i) equal ratable rights to
dividends from funds legally available therefore, when, as and if declared by
the Board of Directors; (ii) are entitled to share ratably in all of the
Company’s assets available for distribution to holders of common stock upon
liquidation, dissolution or winding up of the affairs of the Company; (iii) do
not have preemptive, subscriptive or conversion rights and there are no
redemption or sinking fund provisions or rights applicable thereto; and (iv) are
entitled to one non-cumulative vote per share on all matters on which
shareholders may vote.
The
Company’s Board of Directors is authorized to determine or alter any or all of
the rights, preferences, privileges and restrictions granted to or imposed upon
any wholly unissued series of preferred stock and, within the limitations or
restrictions stated in any resolution or resolutions of the Board of Directors
originally fixing the number of shares constituting any series, to increase or
decrease (but not below the number of shares of any such series then
outstanding) the number of shares comprising any such series subsequent to the
issue of shares of that series, to set the designation of any series, and to
provide for rights and terms of redemption, conversion, dividends, voting
rights, and liquidation preferences of the shares of any such
series.
During
the period from Inception through September 30, 2010, the Company issued a total
of 7,000,000 shares of its common stock for services to third-party consultants
for services, resulting in $20,000 in non-cash compensation expense included in
professional and legal expenses and consulting fees in the accompanying
statement of operations. The value of the transactions was determined
based on value of shares of common stock issued as determined by the board of
directors. As there are no performance commitments or penalties for
non-performance, the Company recorded the expense at the date of
issuance.
Common
Stock Issued for Cash
During
the period from Inception through September 30, 2010, the Company issued a total
of 5,200,000 shares of its common stock for cash in the total amount of
$52,000.
F-13
Subscription
Receivable
At
September 30, 2010, the Company had not received a total of $15,000 in payment
of common stock sold. This is amount appears as a subscription receivable
on the accompanying balance sheet and statement of stockholders’ equity
(deficit).
NOTE
8. WARRANTS TO PURCHASE COMMON STOCK
Outstanding
Stock Warrants
In August
and September 2010, the Company issued stock warrants to two
related-parties. The President, Mr. David Loflin, was issued 2,000,000
warrants for services rendered in establishing the Company. The law firm
of Newlan & Newlan, Counsel to the Company, was issued 2,000,000 warrants
for professional services rendered for organizing the Company.
Additionally, 1,100,000 warrants were issued to purchasers of common
shares during the period from Inception (August 17, 2010) through September 30,
2010. The warrants allow the warrant holders to purchase, in aggregate,
5,100,000 shares of common stock at a price of $0.10 per share. The
two-year warrants expire during August 2012 and September 2012. All
warrants are fully vested and exercisable at September 30, 2010. For the
period from Inception through September 30, 2010, $1,638 and $1,638 of
compensation expense and professional fees, respectively, related to the
issuance of the warrants was recognized. A summary of the status and
changes of the warrants issued during the period from Inception through
September 30, 2010, are as follows:
Shares
|
Weighted Average
Exercise Price
|
|||||||
Outstanding
at beginning of period
|
-0- | $ | -0- | |||||
Issued
|
5,100,000 | $ | 0.10 | |||||
Exercised
|
-0- | -0- | ||||||
Forfeited
|
-0- | -0- | ||||||
Expired
|
-0- | -0- | ||||||
Outstanding
at end of period
|
5,100,000 | $ | 0.10 | |||||
Exercisable
at end of period
|
5,100,000 | $ | 0.10 |
A summary
of the status of the warrants outstanding at September 30, 2010, is presented
below:
Warrants Outstanding
|
Warrants Exercisable
|
||||||||||||||||||
Exercise
Price
|
Number
Outstanding
|
Weighted Average
Remaining Contractual Life
|
Weighted
Average
Exercise
Price
|
Number
Exercisable
|
Weighted
Average
Exercise
Price
|
||||||||||||||
$ | 0.10 | 5,100,000 |
2
years
|
$ | 0.10 | 5,100,000 | $ | 0.10 |
At
September 30, 2010, vested warrants of 5,100,000 had an aggregate intrinsic
value of $0.
The fair
value of each of the Company’s stock warrants is estimated on the date of grant
using a Black-Scholes option-pricing model that uses the assumptions noted in
the table below. Expected volatility is based on an average of historical
volatility of the Company’s common stock. The risk-free interest rate for
periods within the contractual life of the stock warrant award is based on the
yield curve of a zero-coupon U.S. Treasury bond on the date the award is granted
with a maturity equal to the expected term of the award. The Company uses
historical data to estimate forfeitures within its valuation
model.
F-14
The
significant weighted average assumptions relating to the valuation of the
Company’s options for the period ended September 30, 2010, were as
follows:
2010
|
||||
Grant
price
|
$ | 0.01 | ||
Strike
price
|
$ | 0.10 | ||
Dividend
yield
|
0 | % | ||
Expected
life
|
2
years
|
|||
Expected
volatility
|
100 | % | ||
Risk-free
interest rate (2 YR U.S. Treasury)
|
0.37%
to 0.58
|
% |
NOTE
9. COMMITMENTS AND CONTINGENCIES
Operating
Leases
The
Company’s corporate office is located in Norco, Louisiana, under a one year
lease that expires September 30, 2011, and requires monthly rental payments of
$200 per month. The Company has no future minimum rental commitments
beyond September 30, 2011. The Company had rental expense under operating
leases of $200 for the period ended September 30, 2010.
NOTE
10. EARNINGS (LOSS) PER SHARE
The
Company has adopted ASC 260-10-45-60, which provides for calculation of “basic”
and “diluted” earnings per share. The computation of earnings (loss) per
share of common stock is based on the weighted average number of shares
outstanding at the date of the financial statements. The computation of
diluted earnings per common share is based on the weighted average number of
shares outstanding during the year plus the common stock equivalents that would
arise from the exercise of stock options and warrants outstanding under the
treasury method and the average market price per share during the year.
Common stock equivalents at September 30, 2010, consisted of 5,100,000 in
warrants. Common stock equivalents at September 30, 2010, were considered
but were not included in the computation of loss per share at September 30,
2010, because they would have been anti-dilutive.
Net Loss
(Numerator)
|
Shares
(Denominator)
|
Per-Share
Amount
|
||||||||||
Earnings
for the period from Inception (August 17, 2010) through September 30,
2010:
|
||||||||||||
Basic
EPS
|
||||||||||||
Net
loss to common shareholders
|
$ | (35,361 | ) | 22,134,883 | $ | (0.00 | ) |
NOTE
11. SUBSEQUENT EVENTS
Subscription
Receivable
In
October 2010, the Company received $15,000 in cash in payment of the $15,000
subscription receivable that appears on the accompanying balance
sheet.
Private
Offering of Common Stock
In
October 2010, the Company completed a private offering of its common
stock. In this private offering, the Company sold 180,000 shares of its
common stock for cash in the aggregate amount of $3,600, or $.02 per
share.
F-15
(RESALE
OFFERING PROSPECTUS COVER PAGE)
PROSPECTUS
LOUISIANA
FOOD COMPANY
|
||
8,380,000
Shares By Existing Shareholders
|
||
We are
registering for resale 8,380,000 shares of our common stock by Selling
Shareholders (the “Resale Offering”). Our company will not derive any
funds from sales of common stock by the Selling Shareholders.
Non-affiliate Selling Shareholders
|
Affiliate Selling Shareholders
|
|
Non-affiliate
Selling Shareholders are offering a total of 6,380,000 shares and will
sell such shares at a fixed price of $.80 per share, until our common
stock is quoted on the OTCBB and, thereafter, at prevailing market prices
or privately negotiated prices. Each of the Non-affiliate Selling
Shareholders may be deemed to be an “underwriter”.
|
Affiliate
Selling Shareholders (one of our officers and a promoter) are offering a
total of 2,000,000 shares at a fixed price of $.80 per share. As
these Affiliate Selling Shareholders are considered underwriters, they are
required to offer their shares at the fixed price of $.80 per share, even
after our common stock is quoted on the
OTCBB.
|
There
has never been a market for our common stock and a public market may never
develop, or, if any market does develop, it may not be sustained. Our common
stock is not traded on any exchange or on the over-the-counter market. We
intend to have a market maker file an application with the Financial Industry
Regulatory Authority (“FINRA”) for our common stock to become eligible for
trading on the Over-the-Counter Bulletin Board (the “OTCBB”). We do not
yet have a market maker who has agreed to file such an application. There can be
no assurance that our common stock will ever be quoted on a stock exchange or a
quotation service or that any market for our common stock will
develop.
INVESTING
IN OUR COMMON STOCK INVOLVES VERY HIGH RISKS. SEE "RISK FACTORS" BEGINNING ON
PAGE 5.
NEITHER
THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS
APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE ADEQUACY OR
ACCURACY OF THE PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
WE
HAVE NOT AUTHORIZED ANY DEALER, SALESPERSON OR OTHER PERSON TO GIVE ANY
INFORMATION OR REPRESENT ANYTHING NOT CONTAINED IN THIS PROSPECTUS. YOU SHOULD
NOT RELY ON ANY UNAUTHORIZED INFORMATION. THIS PROSPECTUS DOES NOT OFFER TO SELL
OR BUY ANY SHARES IN ANY JURISDICTION IN WHICH IT IS UNLAWFUL. THE INFORMATION
IN THIS PROSPECTUS IS CURRENT AS OF THE DATE ON THE COVER.
Dealer
Prospectus Delivery Obligation
Until
_________________ (90 days from the date of this Prospectus) all dealers that
effect transactions in these securities, whether or not participating in this
offering, may be required to deliver a Prospectus. This is in addition to the
dealers' obligation to deliver a Prospectus when acting as underwriters and with
respect to their unsold allotments or subscriptions.
The
date of this Prospectus is ___________, 2010.
-38-
(RESALE
OFFERING PROSPECTUS ALTERNATE PAGE)
PROSPECTUS
SUMMARY
The
following summary highlights material information contained in this
Prospectus. This summary does not contain all of the information you
should consider before investing in our common stock. Before making an
investment decision, you should read this Prospectus carefully, including the
section entitled “Risk Factors” and the financial statements and the notes
thereto. You should also review the other available information referred
to under “Where You Can Find More Information”, as well as any amendment or
supplement hereto. Unless otherwise indicated, the terms “we”, “us” and
“our” refer and relate to Louisiana Food Company, a Nevada
corporation.
The
following summary highlights material information contained in this
Prospectus. This summary does not contain all of the information you
should consider before investing in our common stock. Before making an
investment decision, you should read this Prospectus carefully, including the
section entitled “Risk Factors” and the financial statements and the notes
thereto. You should also review the other available information referred
to under “Where You Can Find More Information”, as well as any amendment or
supplement hereto. Unless otherwise indicated, the terms “we”, “us” and
“our” refer and relate to Louisiana Food Company, a Nevada
corporation.
The
Issuer
Louisiana
Food Company was incorporated in the State of Nevada on August 17, 2010.
It is our intention to focus on locating, developing and commercializing
food-related business opportunities in the State of Louisiana.
We
have established three lines of “Certified” Louisiana specialty food products:
(1) packaged dry products, (2) sauce products and (3) coffee products. We
will market our packaged dry products under our “Louisiana Food Company” brand
name; we will market our sauce products under our “The Quarter’s” brand name; we
market our coffee products under our “Tchoupitoulas Coffee Company” trade name
(“Tchoupitoulas” is pronounced “chop-uh-too-lus”). We will sell these specialty
food product lines to distributors, directly to retail grocery stores, directly
to other retailers and directly to consumers through our online store.
(See “Business”).
In
September 2010, we received the first purchase order for our specialty food
products. In November 2010, we completed our first sales to two retail
grocery stores and made our first sales directly to consumers through our online
store. By December 1, 2010, we expect to have fulfilled the first orders
of our packaged dry products and sauce products.
Our
continued operations are dependent on our ability to obtain financing and upon
our ability to achieve future profitable operations from our specialty food
product sales. Our independent registered public accounting firm (our
auditors) included in its audit report an explanatory paragraph as to an
uncertainty with respect to our ability to continue as a going concern. If
we are not able to continue as a going concern, it is likely investors will lose
their investments.
Our
corporate office is located at 917 Third Street, Norco, Louisiana 70079; our
telephone number is (877) 732-2143; our corporate web site is
www.lafoodco.com.
Securities
Offered
This
Prospectus relates to the resale of 8,380,000 shares of our common stock by the
Selling Shareholders. (See “Plan of Distribution”).
Non-affiliate Selling
Shareholders. Non-affiliate Selling Shareholders are offering a
total of 6,380,000 shares and will sell such shares at a fixed price of $.80 per
share, until our common stock is quoted on the OTCBB and, thereafter, at
prevailing market prices or privately negotiated prices.
-39-
PROSPECTUS SUMMARY – continued
Affiliate Selling
Shareholders. Affiliate Selling Shareholders (one of our officers
and a promoter) are offering a total of 2,000,000 shares at a fixed price of
$.80 per share. As these Affiliate Selling Shareholders are considered
underwriters, they are required to offer their shares at the fixed price of $.80
per share, even after our common stock is quoted on the OTCBB.
No
Public Market
There
is no public market for our common stock. We cannot give any assurance
that the shares being offered will have a market value, or that they can be
resold at the offered price if and when an active secondary market might
develop, or that a public market for our securities may be sustained even if
developed. The absence of a public market for our common stock will make
it difficult to sell your shares. We intend to have a market maker file an
application with FINRA for our common stock to become eligible for trading on
the OTCBB.
Duration
of Offering
This
offering by the Selling Shareholders will terminate on the earlier of the date
on which the shares are eligible for resale without restrictions pursuant to
Rule 144 under the Securities Act and the date on which all shares offered by
this Prospectus have been sold by the Selling Shareholders.
Shares
Outstanding
Before
This Offering. There are 25,880,000 shares of our common stock
issued and outstanding as of the date of this Prospectus.
After
This Offering. Following this offering, including the Direct Public
Offering if our company sells all 1,000,000 shares offered thereunder, there
will be 26,880,000 shares of our common stock issued and
outstanding.
Offering
Proceeds
Our
company will not derive any funds from sales of common stock by the Selling
Shareholders.
Use
of Proceeds
Our
company will not derive any funds from sales of common stock by the Selling
Shareholders.
Risk
Factors
An
investment in our common stock involves a high degree of risk. You should
carefully consider the information included in the “Risk Factors” section of
this Prospectus, as well as the other information contained in this Prospectus,
prior to making an investment decision regarding our common
stock.
-40-
(RESALE
PROSPECTUS ALTERNATE PAGE)
USE
OF PROCEEDS
We
will not receive any of the proceeds from the sale of the common stock offered
by the Selling Shareholders. We are registering 8,380,000 of our 25,880,000
currently outstanding shares for resale to provide the holders thereof with
freely tradable securities, but the registration of such shares does not
necessarily mean that any of such shares will be offered or sold by the holders
thereof.
-41-
(RESALE
OFFERING PROSPECTUS ALTERNATE PAGE)
PLAN
OF DISTRIBUTION
In
August 2010, we issued a total of 18,600,000 shares pursuant to a
pre-incorporation agreement, as follows:
|
·
|
13,000,000
shares were issued to our President, David Loflin, for certain items of
personal and intangible property, which property was valued by our Board
of Directors at $13,000 ($.001 per
share);
|
|
·
|
5,000,000
shares were issued to our company’s legal counsel and promoter, Newlan
& Newlan, in payment of $10,000 ($.002 per share) of legal services;
and
|
|
·
|
600,000
shares were issued to Paul J. Goldman, M.D., for $10,000 ($.01 per share)
in cash.
|
Also
in August 2010, we issued an additional 4,500,000 shares of our common stock, as
follows:
|
·
|
2,000,000
shares were issued to five persons for a total of $20,000 ($.01 per
share), in cash. These shares were issued under five separate
securities purchase agreements;
|
|
·
|
2,000,000
shares were issued to a third party consultant under a consulting
agreement, in payment of $10,000 ($.005 per share) of consulting services;
and
|
|
·
|
500,000
shares were issued to one of our officers, Waddell D. Loflin, as a
retention bonus, which shares were valued by our Board of Directors at
$2,500 ($.005 per share), in the
aggregate.
|
In
September 2010, we issued an additional 2,600,000 shares of our common stock to
four persons for a total of $26,000 ($.01 per share), in cash. These
shares were issued under a four separate securities purchase
agreements.
In
October 2010, 180,000 shares were issued to 24 persons for a total of $3,600 in
cash, or $.02 per share. These shares were issued in a private offering
pursuant to Rule 506 of Regulation D under the Securities Act. Each
investor therein represented in writing that he was acquiring the shares for his
own account and for investment.
No
underwriter participated in the foregoing transactions, and no underwriting
discounts or commissions were paid, nor was any general solicitation or general
advertising conducted. The securities bear a restrictive legend and stop
transfer instructions are noted on our stock transfer records.
The
common stock offered under this Prospectus by the Selling Shareholders may be
sold from time to time for the account of the Selling Shareholders named in the
following table. The table also contains information regarding each
Selling Shareholder’s beneficial ownership of shares of our common stock as of
the date of this Prospectus, and as adjusted to give effect to the sale of the
shares offered hereunder.
Other
than the relationships described below, none of the Selling Shareholders had or
has any material relationship with our company. None of the Non-affiliate
Selling Shareholders is a family member of the current officers and directors of
our company.
The
following table sets forth certain information regarding the beneficial
ownership of shares of common stock by the Selling Shareholders as of the date
of this Prospectus, as well as the number of shares of common stock covered by
this Prospectus.
-42-
PLAN OF DISTRIBUTION – continued
Prior to this Offering
|
After this Offering
|
||||||||||||||||||||||
Name of Selling Shareholder
|
Position, Office
or Other
Material
Relationship
|
# of Shares
Beneficially
Owned
|
%
Beneficially
Owned
(1)
|
# of Shares
to be Offered
for the
Account
of the Selling
Shareholder
|
# of Shares
to be
Beneficially
Owned
|
%
to be
Beneficially
Owned
(2)
|
|||||||||||||||||
David
Loflin
|
Officer/Director
|
15,000,000 | (7) | 48.42 | % | 1,000,000 | 14,000,000 | (7) | 43.78 | % | |||||||||||||
Newlan
& Newlan (3)
|
Promoter
|
7,000,000 | (7) | 22.60 | % | 1,000,000 | 6,000,000 | (7) | 18.76 | % | |||||||||||||
Paul
J. Goldman, M.D.
|
N/A
|
780,000 | (8) | 2.52 | % | 600,000 | 180,000 | (8) | * | ||||||||||||||
Brad
A. Kinder
|
|
N/A
|
600,000 | (9) | 1.94 | % | 500,000 | 100,000 | (9) | * | |||||||||||||
Douglas
V. Martin
|
N/A
|
600,000 | (9) | 1.94 | % | 500,000 | 100,000 | (9) | * | ||||||||||||||
Roy
M. Brumbaugh
|
N/A
|
600,000 | (9) | 1.94 | % | 500,000 | 100,000 | (9) | * | ||||||||||||||
William
Huff
|
N/A
|
300,000 | (10) | * | 250,000 | 50,000 | (10) | * | |||||||||||||||
Clarence
Farmer
|
N/A
|
300,000 | (10) | * | 250,000 | 50,000 | (10) | * | |||||||||||||||
Rage
Marketing, Inc. (4)
|
N/A
|
2,000,000 | 6.46 | % | 1,000,000 | 1,000,000 | 3.13 | % | |||||||||||||||
James
D. Luneau
|
N/A
|
120,000 | (11) | * | 100,000 | 20,000 | (11) | * | |||||||||||||||
L.
E. Arnold
|
N/A
|
1,200,000 | (12) | 3.87 | % | 1,000,000 | 200,000 | (12) | * | ||||||||||||||
FLL
Shamrock, LP(5)
|
N/A
|
1,200,000 | (12) | 3.87 | % | 1,000,000 | 200,000 | (12) | * | ||||||||||||||
Blayne
G. St. James
|
N/A
|
600,000 | (9) | 1.94 | % | 500,000 | 100,000 | (9) | * | ||||||||||||||
Marcos
Villegas
|
N/A
|
15,000 | * | 15,000 | -0- | 0 | % | ||||||||||||||||
Lacey
M. Luneau
|
N/A
|
10,000 | * | 10,000 | -0- | 0 | % | ||||||||||||||||
Teresa
Guerin
|
N/A
|
20,000 | * | 20,000 | -0- | 0 | % | ||||||||||||||||
Peggy
Ojea
|
N/A
|
5,000 | * | 5,000 | -0- | 0 | % | ||||||||||||||||
Chris
Villnurve
|
N/A
|
5,000 | * | 5,000 | -0- | 0 | % | ||||||||||||||||
Cheryl
Villnurve
|
N/A
|
5,000 | * | 5,000 | -0- | 0 | % | ||||||||||||||||
Martha
Rayburn
|
N/A
|
5,000 | * | 5,000 | -0- | 0 | % | ||||||||||||||||
Donald
Rayburn
|
N/A
|
5,000 | * | 5,000 | -0- | 0 | % | ||||||||||||||||
Angela
Hasty
|
N/A
|
5,000 | * | 5,000 | -0- | 0 | % | ||||||||||||||||
Stephanie
Smith
|
N/A
|
5,000 | * | 5,000 | -0- | 0 | % | ||||||||||||||||
Rebeca
Villnurve
|
N/A
|
5,000 | * | 5,000 | -0- | 0 | % | ||||||||||||||||
Jenifer
Cole
|
N/A
|
25,000 | * | 25,000 | -0- | 0 | % | ||||||||||||||||
Harrison
Cole
|
N/A
|
5,000 | * | 5,000 | -0- | 0 | % | ||||||||||||||||
Lily
Cole
|
N/A
|
5,000 | * | 5,000 | -0- | 0 | % | ||||||||||||||||
Alyson
Huff
|
N/A
|
10,000 | * | 10,000 | -0- | 0 | % | ||||||||||||||||
Jason
Huff
|
N/A
|
10,000 | * | 10,000 | -0- | 0 | % | ||||||||||||||||
Chris
Olson
|
N/A
|
5,000 | * | 5,000 | -0- | 0 | % | ||||||||||||||||
Shelly
Scott
|
N/A
|
5,000 | * | 5,000 | -0- | 0 | % | ||||||||||||||||
Mary
Scott
|
N/A
|
5,000 | * | 5,000 | -0- | 0 | % | ||||||||||||||||
Billy
C. Lawrence
|
N/A
|
5,000 | * | 5,000 | -0- | 0 | % | ||||||||||||||||
Jodi
Lawrence
|
N/A
|
5,000 | * | 5,000 | -0- | 0 | % | ||||||||||||||||
T.J.
Haines
|
N/A
|
5,000 | * | 5,000 | -0- | 0 | % | ||||||||||||||||
Jacke
Haines
|
N/A
|
5,000 | * | 5,000 | -0- | 0 | % | ||||||||||||||||
Fort
Worth Diagnostic
|
N/A
|
5,000 | * | 5,000 | -0- | 0 | % | ||||||||||||||||
Clinic,
LLC (6)
|
|||||||||||||||||||||||
TOTALS
|
30,480,000 | 98.39 | % | 8,380,000 | 22,100,000 | 69.11 | % |
|
*
|
Less
than 1%.
|
|
(1)
|
Based
on 30,980,000 shares outstanding, including a total of 5,100,000 unissued
shares that underlie currently exercisable
warrants.
|
-43-
PLAN OF DISTRIBUTION – continued
|
(2)
|
Based
on 31,980,000 shares outstanding, assuming the sale by us of 1,000,000
shares under the Direct Public Offering Prospectus and including a total
of 5,100,000 unissued shares that underlie currently exercisable
warrants.
|
|
(3)
|
Newlan
& Newlan is our corporate counsel and a promoter; Newlan & Newlan,
including its partners, Lee Newlan and Eric Newlan, are deemed to be
affiliates, who possess voting and investment control with regard to the
securities owned by this
entity.
|
|
(4)
|
Heriberto
Cruz possesses voting and investment control with regard to the shares
owned by this entity.
|
|
(5)
|
Vern
C. Moter possesses voting and investment control with regard to the shares
owned by this entity.
|
|
(6)
|
This
entity is owned by Paul J. Goldman, M.D., one of the other Selling
Shareholders, who possesses voting and investment control with regard to
the securities owned by this
entity.
|
|
(7)
|
2,000,000
of these shares are unissued, but underlie currently exercisable
warrants.
|
|
(8)
|
180,000
of these shares are unissued, but underlie currently exercisable
warrants.
|
|
(9)
|
100,000
of these shares are unissued, but underlie currently exercisable
warrants.
|
|
(10)
|
50,000
of these shares are unissued, but underlie currently exercisable
warrants.
|
|
(11)
|
20,000
of these shares are unissued, but underlie currently exercisable
warrants.
|
|
(12)
|
200,000
of these shares are unissued, but underlie currently exercisable
warrants.
|
None
of the Selling Shareholders is a broker-dealer or an affiliate of a
broker-dealer.
David
Loflin, one of our officers and directors, and Newlan & Newlan, our
corporate counsel and a promoter, are Affiliate Selling Shareholders and will be
considered to be underwriters for purposes of this offering; the Non-affiliate
Selling Shareholders may be deemed to be underwriters. Mr. Loflin’s
and Newlan & Newlan’s intentions are to remain associated with our company
regardless of whether or not they sell all or a substantial portion of their
holdings in our company. Mr. Loflin is, nevertheless, offering 7.70%
of his shareholder interest (1,000,000 shares out of his holdings of 13,000,000
shares) in this offering, and Newlan & Newlan is offering 20% of its
shareholder interest (1,000,000 shares out of its holdings of 5,000,000
shares). In the aggregate, 7.73% of all outstanding shares of common
stock is being offered by the Affiliate Selling Shareholders, since sales by Mr.
Loflin and Newlan & Newlan would otherwise be restricted to 1% (or
approximately 258,800 shares) of all outstanding shares every three months in
accordance with Rule 144. As officers, control persons, promoters or
affiliates of Louisiana Food Company, Mr. Loflin and Newlan & Newlan may not
avail themselves of the provisions of Rule 144(d) which otherwise would permit a
non-affiliate to sell an unlimited number of restricted shares provided that
Rule 144’s one-year holding period requirement is met.
The
Selling Shareholders will sell their shares of common stock at a fixed price of
$.80 per share until our common stock is quoted on the OTCBB or another
quotation medium and, thereafter, at prevailing market prices, or privately
negotiated prices, with the exception of Mr. Loflin and Newlan & Newlan, who
are underwriters, and, as affiliates, must offer their shares at a fixed price
of $.80 per share even if our shares become quoted on the OTCBB or another
quotation medium.
The
Selling Shareholders may offer their shares at various times in one or more of
the following transactions:
·
|
in
any market that might develop;
|
·
|
in
transactions other than market
transactions;
|
·
|
by
pledge to secure debts or other
obligations;
|
·
|
purchases
by a broker-dealer as principal and resale by the broker-dealer for its
account; or
|
·
|
in
a combination of any of the
above.
|
-44-
PLAN OF DISTRIBUTION – continued
The
Selling Shareholders may use broker-dealers to sell shares. Should
this occur, a broker-dealer would either receive discounts or commissions from
Selling Shareholders or receive commissions from purchasers of shares for whom
they shall have acted as agents. To date, no discussions have been
held or agreements reached with any broker-dealer. No broker–dealer
participating in the distribution of the shares covered by this Prospectus may
charge commissions in excess of 8% on any sales made hereunder.
The
Affiliate Selling Shareholders who are offering their shares for resale
hereunder and any broker-dealers who act in connection with the sale of the
shares hereunder will be considered underwriters of this offering, within the
meaning of the Securities Act, and any commissions they receive and proceeds of
any sale of the shares may be deemed to be underwriting discounts and
commissions under the Securities Act.
The
Selling Shareholders and any purchasers of our common stock should be aware that
any market that develops in our common stock will be subject to “penny stock”
restrictions.
We
will pay all expenses incident to the registration, offering and sale of our
common stock, other than commissions or discounts of underwriters,
broker-dealers or agents. We have also agreed to indemnify the
Selling Shareholders against certain liabilities, including liabilities under
the Securities Act.
This
offering by the Selling Shareholders will terminate on the earlier of
the:
|
·
|
date
on which the shares are eligible for resale without restrictions pursuant
to Rule 144 under the Securities Act;
and
|
|
·
|
date
on which all shares offered by this Prospectus have been sold by the
Selling Shareholders.
|
Insofar
as indemnification for liabilities arising under the Securities Act may be
permitted to our directors, officers and controlling persons, we have been
advised that, in the opinion, of the SEC, such indemnification is against public
policy as expressed in the Securities Act and is, therefore,
unenforceable.
If any
of the Selling Shareholders enter into an agreement after the effectiveness of
the registration statement of which this Prospectus is a part to sell all or a
portion of their shares to a broker-dealer as principal and the broker-dealer is
acting as underwriter, we will file a post-effective amendment to our
registration statement of which this Prospectus is a part identifying the
broker-dealer, providing the required information on the plan of distribution,
revising disclosures in the registration statement as required and filing the
agreement as an exhibit to the registration statement.
Until
our shares of common stock qualify for inclusion in the NASDAQ system, if ever,
the trading of our common stock, if any, will be in the over-the-counter
markets, including the OTCBB, as maintained by FINRA. As a result,
investors may find it difficult to dispose of, or to obtain accurate quotations
as to the price of, our common stock.
Penny
Stock
SEC
Rule 15g-9 establishes the definition of a “penny stock”, for purposes relevant
to us, as any equity security that has a market price of less than $5.00 per
share or with an exercise price of less than $5.00 per share, subject to a
limited number of exceptions. It is likely that our common stock will be
considered to be a “penny stock” for the immediately foreseeable
future. For any transaction involving a penny stock, unless exempt,
the penny stock rules require that a broker-dealer approve a person's account
for transactions in penny stocks and the broker-dealer receive from the investor
a written agreement to the transaction setting forth the identity and quantity
of the penny stock to be purchased.
-45-
PLAN OF DISTRIBUTION – continued
In
order to approve a person's account for transactions in penny stocks, the
broker-dealer must obtain financial information, investment experience and
objectives of the investor and make a reasonable determination that the
transactions in penny stocks are suitable for that investor and that the
investor has sufficient knowledge and experience in financial matters to be
capable of evaluating the risks of transactions in penny
stocks.
The
broker-dealer must also deliver, prior to any transaction in a penny stock, a
disclosure schedule prepared by the SEC relating to the penny stock market,
which, in highlight form, sets forth the basis on which the broker-dealer made
the suitability determination, and that the broker-dealer received a signed,
written agreement from the investor prior to the transaction.
Disclosure
also must be made about the risks of investing in penny stocks in both public
offerings and in secondary trading and commissions payable to both the
broker-dealer and the registered representative, current quotations for the
securities and the rights and remedies available to an investor in cases of
fraud in penny stock transactions. Finally, monthly statements must be sent
disclosing recent price information for the penny stock held in the account and
information on the limited market in penny stocks. The above-referenced
requirements may create a lack of liquidity, making trading difficult or
impossible, and accordingly, shareholders may find it difficult to dispose of
our common stock. (See “Risk Factors”).
-46-
(RESALE
OFFERING PROSPECTUS ALTERNATE PAGE)
DILUTION
With
respect to the common stock offered and sold by the Affiliate Selling
Shareholders hereunder, purchasers of common stock will incur substantial
dilution. This dilution is due to the Affiliate Selling Shareholders’
being required to sell their shares of common stock at the fixed price of
$.80.
With
respect to the common stock offered and sold by the Non-affiliate Selling
Shareholders hereunder, purchasers of common stock will likely incur substantial
dilution. This dilution is due to the Non-affiliate Selling
Shareholders’ being required to sell their shares of common stock the fixed
price of $.80, until our common stock is quoted on the OTCBB and, thereafter, at
prevailing market prices or privately negotiated prices.
The
table below illustrates the dilution to purchasers of common stock, assuming a
purchase price of $.80 per share and (A) no shares of our common stock are sold
under the Direct Public Offering Prospectus, (B) 1,000,000 shares (100%) of our
common stock are sold under the Direct Public Offering Prospectus, (C) 750,000
shares (75%) of our common stock are sold under the Direct Public Offering
Prospectus, (D) 500,000 shares (50%) of our common stock are sold under the
Direct Public Offering Prospectus and (E) 250,000 shares (25%) of our common
stock are sold under the Direct Public Offering Prospectus
Assuming the Sale of No Shares in the Direct
Public Offering
|
||||
Assumed
offering price per share
|
$ | 0.80 | ||
Net
tangible book value per share as of September 30, 2010
|
$ | 0.001 | ||
Dilution
in net tangible book value per share to purchasers (See NOTE
below)
|
$ | 0.799 | ||
Assuming the Sale of 1,000,000 Shares in the
Direct Public Offering (100%)
|
||||
Assumed
offering price per share
|
$ | 0.80 | ||
Net
tangible book value per share as of September 30, 2010
|
$ | 0.001 | ||
Increase
in net tangible book value per share after giving effect to this Direct
Public Offering
|
$ | 0.03 | ||
Pro
forma net tangible book value per share as of September 30,
2010
|
$ | 0.031 | ||
Dilution
in net tangible book value per share to new investors (See NOTE
below)
|
$ | 0.769 | ||
Assuming the Sale of 750,000 Shares in the
Direct Public Offering (75%)
|
||||
Assumed
offering price per share
|
$ | 0.80 | ||
Net
tangible book value per share as of September 30, 2010
|
$ | 0.001 | ||
Increase
in net tangible book value per share after giving effect to this Direct
Public Offering
|
$ | 0.023 | ||
Pro
forma net tangible book value per share as of September 30,
2010
|
$ | 0.024 | ||
Dilution
in net tangible book value per share to new investors (See NOTE
below)
|
$ | 0.776 | ||
Assuming the Sale of 500,000 Shares in the
Direct Public Offering (50%)
|
||||
Assumed
offering price per share
|
$ | 0.80 | ||
Net
tangible book value per share as of September 30, 2010
|
$ | 0.001 | ||
Increase
in net tangible book value per share after giving effect to this Direct
Public Offering
|
$ | 0.015 | ||
Pro
forma net tangible book value per share as of September 30,
2010
|
$ | 0.016 | ||
Dilution
in net tangible book value per share to new investors (See NOTE
below)
|
$ | 0.784 | ||
Assuming the Sale of 250,000 Shares in the
Direct Public Offering (25%)
|
||||
Assumed
offering price per share
|
$ | 0.80 | ||
Net
tangible book value per share as of September 30, 2010
|
$ | 0.001 | ||
Increase
in net tangible book value per share after giving effect to this Direct
Public Offering
|
$ | 0.008 | ||
Pro
forma net tangible book value per share as of September 30,
2010
|
$ | 0.009 | ||
Dilution
in net tangible book value per share to new investors (See NOTE
below)
|
$ | 0.791 |
-47-
DILUTION – continued
NOTE: The
dilution to be incurred by purchasers who acquire their shares after our
common stock becomes quoted on the OTCBB will vary and, therefore, cannot
be
predicted.
|
The
$.80 fixed offering price is significantly greater than the price paid by any of
our current shareholders, including one of our officers and a
promoter. Our current shareholders have paid an average of
approximately $.003 per share, including the value of shares issued in
consideration of personal property, intellectual property and services, which
value is $.797 per share lower than the $.80 per share fixed offering
price.
-48-
PART
II – INFORMATION NOT REQUIRED IN PROSPECTUS
Item
13. Other Expenses of Issuance and Distribution.
The
following table sets forth estimated expenses expected to be incurred in
connection with the issuance and distribution of the securities being
registered. All such expenses will be paid by us.
SEC
Registration Fee
|
$ | 535.04 | ||
Blue
Sky Fees and Expenses
|
750.00 | * | ||
Audit
Fees and Expenses
|
5,000.00 | |||
Legal
Fees and Expenses
|
7,000.00 | |||
Miscellaneous
Expenses
|
1,000.00 | * | ||
TOTAL
|
$ | 14,285.04 | * | |
*
Estimate.
|
Item
14. Indemnification of Directors and Officers.
The officers and directors of the
Company are indemnified as provided by the Nevada Revised Statutes and the
Bylaws of the Company. Unless specifically limited by a corporation’s Articles
of Incorporation, Nevada law automatically provides directors with immunity from
monetary liabilities. The Company’s Articles of Incorporation do not contain any
such limiting language. Excepted from that immunity are:
|
A.
|
willful
failure to deal fairly with the corporation or its shareholders in
connection with a matter in which the director has a material conflict of
interest;
|
|
B.
|
a
violation of criminal law unless the director had reasonable cause to
believe that his or her conduct was lawful or no reasonable cause to
believe that his or her conduct was
unlawful;
|
|
C.
|
a
transaction from which the director derived an improper personal profit;
and
|
|
D.
|
willful
misconduct.
|
The Articles of Incorporation provide
that the Company will indemnify its officers, directors, legal representative,
and persons serving at the request of the Company as a director or officer of
another corporation, or as its representative in a partnership, joint venture,
trust or other enterprise to the fullest extent legally permissible under the
laws of the State of Nevada against all expenses, liability and loss (including
attorney’s fees, judgments, fines and amounts paid or to be paid in settlement)
reasonably incurred or suffered by that person as a result of that connection to
the Company. This right of indemnification under the Articles is a contract
right which may be enforced in any manner by such person and extends for such
persons benefit to all actions undertaken on behalf of the Company.
The Bylaws of the Company provide that
the Company will indemnify its directors and officers to the fullest extent not
prohibited by Nevada law; provided, however, that the Company may modify the
extent of such indemnification by individual contracts with its directors and
officers; and, provided, further, that the Company shall not be required to
indemnify any director or officer in connection with any proceeding (or part
thereof) initiated by such person unless (i) such indemnification is expressly
required to be made by law, (ii) the proceeding was authorized by our Board of
Directors of the Company, (iii) such indemnification is provided by the Company,
in its sole discretion, pursuant to the powers vested in the Company under
Nevada law or (iv) such indemnification is required to be made pursuant to the
Bylaws.
II-1
The Bylaws of the Company provide that
the Company will advance to any person who was or is a party or is threatened to
be made a party to any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or investigative, by reason
of the fact that he is or was a director or officer, of the Company, or is or
was serving at the request of the Company as a director or executive officer of
another Company, partnership, joint venture, trust or other enterprise, prior to
the final disposition of the proceeding, promptly following request therefore,
all expenses incurred by any director or officer in connection with such
proceeding upon receipt of an undertaking by or on behalf of such person to
repay said amounts if it should be determined ultimately that such person is not
entitled to be indemnified under the Bylaws of the Company or
otherwise.
The Bylaws of the Company provide that
no advance shall be made by the Company to an officer of the Company (except by
reason of the fact that such officer is or was a director of the Company in
which event this paragraph shall not apply) in any action, suit or proceeding,
whether civil, criminal, administrative or investigative, if a determination is
reasonably and promptly made (i) by our Board of Directors by a majority vote of
a quorum consisting of directors who were not parties to the proceeding, or (ii)
if such quorum is not obtainable, or, even if obtainable, a quorum of
disinterested directors so directs, by independent legal counsel in a written
opinion, that the facts known to the decision-making party at the time such
determination is made demonstrate clearly and convincingly that such person
acted in bad faith or in a manner that such person did not believe to be in or
not opposed to the best interests of the Company.
Item
15. Recent Sales of Unregistered Securities.
1. (a) Securities Sold. On
August 17, 2010, 13,000,000 shares of common stock were issued; (b) Underwriter
or Other Purchasers. Such shares of common stock were issued to David
Loflin; (c) Consideration. Such shares of common stock were issued
for items of personal and intangible property valued at $13,000; and (d)
Exemption from Registration Claimed. These securities are exempt from
registration under the Securities Act of 1933, as amended, pursuant to the
provisions of Section 4(2) thereof and Rule 506 thereunder, as a transaction not
involving a public offering. This purchaser was a sophisticated investor capable
of evaluating an investment in our company.
2. (a) Securities Sold. On
August 17, 2010, 2,000,000 common stock purchase warrants to purchase a like
number of shares of common stock were issued; (b) Underwriter or Other
Purchasers. Such common stock purchase warrants were issued to David Loflin; (c)
Consideration. Such common stock purchase warrants were issued as part of a
securities unit, there being no consideration assigned to such common stock
purchase warrants; and (d) Exemption from Registration Claimed. These securities
are exempt from registration under the Securities Act of 1933, as amended,
pursuant to the provisions of Section 4(2) thereof and Rule 506 thereunder, as a
transaction not involving a public offering. This purchaser was a sophisticated
investor capable of evaluating an investment in our company; (e) Terms of
Conversion or Exercise. The exercise price of the common stock purchase warrants
is $.10 per share. All of the common stock purchase warrants are
exercisable until August 16, 2012.
3. (a) Securities Sold. On
August 17, 2010, 5,000,000 shares of common stock were issued; (b) Underwriter
or Other Purchasers. Such shares of common stock were issued to Newlan &
Newlan, Attorneys at Law; (c) Consideration. Such shares of common
stock were issued in payment of $10,000 in legal services; and (d) Exemption
from Registration Claimed. These securities are exempt from registration under
the Securities Act of 1933, as amended, pursuant to the provisions of Section
4(2) thereof and Rule 506 thereunder, as a transaction not involving a public
offering. This purchaser was a sophisticated investor capable of evaluating an
investment in our company.
4. (a) Securities Sold. On
August 17, 2010, 2,000,000 common stock purchase warrants to purchase a like
number of shares of common stock were issued; (b) Underwriter or Other
Purchasers. Such common stock purchase warrants were issued to Newlan &
Newlan, Attorneys at Law; (c) Consideration. Such common stock purchase warrants
were issued as part of a securities unit, there being no consideration assigned
to such common stock purchase warrants; and (d) Exemption from Registration
Claimed. These securities are exempt from registration under the Securities Act
of 1933, as amended, pursuant to the provisions of Section 4(2) thereof and Rule
506 thereunder, as a transaction not involving a public offering. This purchaser
was a sophisticated investor capable of evaluating an investment in our company;
(e) Terms of Conversion or Exercise. The exercise price of the common stock
purchase warrants is $.10 per share. All of the common stock purchase
warrants are exercisable until August 16, 2012.
II-2
5. (a) Securities Sold. On
August 19, 2010, 500,000 shares of common stock were issued; (b) Underwriter or
Other Purchasers. Such shares of common stock were issued to Roy
Brumbaugh; (c) Consideration. Such shares of common stock were issued
for $5,000 in cash; and (d) Exemption from Registration Claimed. These
securities are exempt from registration under the Securities Act of 1933, as
amended, pursuant to the provisions of Section 4(2) thereof and Rule 506
thereunder, as a transaction not involving a public offering. This purchaser was
a sophisticated investor capable of evaluating an investment in our
company.
6. (a) Securities Sold. On
August 19, 2010, 100,000 common stock purchase warrants to purchase a like
number of shares of common stock were issued; (b) Underwriter or Other
Purchasers. Such common stock purchase warrants were issued to Roy Brumbaugh;
(c) Consideration. Such common stock purchase warrants were issued as part of
units of securities, there being no consideration assigned to such common stock
purchase warrants; and (d) Exemption from Registration Claimed. These securities
are exempt from registration under the Securities Act of 1933, as amended,
pursuant to the provisions of Section 4(2) thereof and Rule 506 thereunder, as a
transaction not involving a public offering. This purchaser was a sophisticated
investor capable of evaluating an investment in our company; (e) Terms of
Conversion or Exercise. The exercise price of the common stock purchase warrants
is $.10 per share. All of the common stock purchase warrants are
exercisable until August 18, 2012.
7. (a) Securities Sold. On
August 19, 2010, 500,000 shares of common stock were issued; (b) Underwriter or
Other Purchasers. Such shares of common stock were issued to Brad A. Kinder; (c)
Consideration. Such shares of common stock were issued for $5,000 in cash; and
(d) Exemption from Registration Claimed. These securities are exempt from
registration under the Securities Act of 1933, as amended, pursuant to the
provisions of Section 4(2) thereof and Rule 506 thereunder, as a transaction not
involving a public offering. This purchaser was a sophisticated investor capable
of evaluating an investment in our company.
8. (a) Securities Sold. On
August 19, 2010, 100,000 common stock purchase warrants to purchase a like
number of shares of common stock were issued; (b) Underwriter or Other
Purchasers. Such common stock purchase warrants were issued to Brad A. Kinder;
(c) Consideration. Such common stock purchase warrants were issued as part of
units of securities, there being no consideration assigned to such common stock
purchase warrants; and (d) Exemption from Registration Claimed. These securities
are exempt from registration under the Securities Act of 1933, as amended,
pursuant to the provisions of Section 4(2) thereof and Rule 506 thereunder, as a
transaction not involving a public offering. This purchaser was a sophisticated
investor capable of evaluating an investment in our company; (e) Terms of
Conversion or Exercise. The exercise price of the common stock purchase warrants
is $.10 per share. All of the common stock purchase warrants are
exercisable until August 18, 2012.
9. (a) Securities Sold. On
August 19, 2010, 500,000 shares of common stock were issued; (b) Underwriter or
Other Purchasers. Such shares of common stock were issued to Douglas V. Martin;
(c) Consideration. Such shares of common stock were issued for $5,000 in cash;
and (d) Exemption from Registration Claimed. These securities are exempt from
registration under the Securities Act of 1933, as amended, pursuant to the
provisions of Section 4(2) thereof and Rule 506 thereunder, as a transaction not
involving a public offering. This purchaser was a sophisticated investor capable
of evaluating an investment in our company.
10. (a) Securities Sold. On
August 19, 2010, 100,000 common stock purchase warrants to purchase a like
number of shares of common stock were issued; (b) Underwriter or Other
Purchasers. Such common stock purchase warrants were issued to Douglas V.
Martin; (c) Consideration. Such common stock purchase warrants were issued as
part of units of securities, there being no consideration assigned to such
common stock purchase warrants; and (d) Exemption from Registration Claimed.
These securities are exempt from registration under the Securities Act of 1933,
as amended, pursuant to the provisions of Section 4(2) thereof and Rule 506
thereunder, as a transaction not involving a public offering. This purchaser was
a sophisticated investor capable of evaluating an investment in our company; (e)
Terms of Conversion or Exercise. The exercise price of the common stock purchase
warrants is $.10 per share. All of the common stock purchase warrants
are exercisable until August 18, 2012.
II-3
11. (a) Securities Sold. On
August 31, 2010, 250,000 shares of common stock were issued; (b) Underwriter or
Other Purchasers. Such shares of common stock were issued to William Huff; (c)
Consideration. Such shares of common stock were issued for $2,500 in cash; and
(d) Exemption from Registration Claimed. These securities are exempt from
registration under the Securities Act of 1933, as amended, pursuant to the
provisions of Section 4(2) thereof and Rule 506 thereunder, as a transaction not
involving a public offering. This purchaser was a sophisticated investor capable
of evaluating an investment in our company.
12. (a) Securities Sold. On
August 19, 2010, 50,000 common stock purchase warrants to purchase a like number
of shares of common stock were issued; (b) Underwriter or Other Purchasers. Such
common stock purchase warrants were issued to William Huff; (c) Consideration.
Such common stock purchase warrants were issued as part of units of securities,
there being no consideration assigned to such common stock purchase warrants;
and (d) Exemption from Registration Claimed. These securities are exempt from
registration under the Securities Act of 1933, as amended, pursuant to the
provisions of Section 4(2) thereof and Rule 506 thereunder, as a transaction not
involving a public offering. This purchaser was a sophisticated investor capable
of evaluating an investment in our company; (e) Terms of Conversion or Exercise.
The exercise price of the common stock purchase warrants is $.10 per
share. All of the common stock purchase warrants are exercisable
until August 30, 2012.
13. (a) Securities Sold. On
August 31, 2010, 250,000 shares of common stock were issued; (b) Underwriter or
Other Purchasers. Such shares of common stock were issued to Clarence Farmer;
(c) Consideration. Such shares of common stock were issued for $2,500 in cash;
and (d) Exemption from Registration Claimed. These securities are exempt from
registration under the Securities Act of 1933, as amended, pursuant to the
provisions of Section 4(2) thereof and Rule 506 thereunder, as a transaction not
involving a public offering. This purchaser was a sophisticated investor capable
of evaluating an investment in our company.
14. (a) Securities Sold.
On August 19, 2010, 50,000 common stock purchase warrants to purchase a like
number of shares of common stock were issued; (b) Underwriter or Other
Purchasers. Such common stock purchase warrants were issued to Clarence Farmer;
(c) Consideration. Such common stock purchase warrants were issued as part of
units of securities, there being no consideration assigned to such common stock
purchase warrants; and (d) Exemption from Registration Claimed. These securities
are exempt from registration under the Securities Act of 1933, as amended,
pursuant to the provisions of Section 4(2) thereof and Rule 506 thereunder, as a
transaction not involving a public offering. This purchaser was a sophisticated
investor capable of evaluating an investment in our company; (e) Terms of
Conversion or Exercise. The exercise price of the common stock purchase warrants
is $.10 per share. All of the common stock purchase warrants are
exercisable until August 30, 2012.
15. (a) Securities Sold. On
August 26, 2010, 2,000,000 shares of common stock were issued; (b) Underwriter
or Other Purchasers. Such shares of common stock were issued to Rage Marketing,
Inc.; (c) Consideration. Such shares of common stock were issued in
payment of $10,000 in consulting services; and (d) Exemption from Registration
Claimed. These securities are exempt from registration under the Securities Act
of 1933, as amended, pursuant to the provisions of Section 4(2) thereof and Rule
506 thereunder, as a transaction not involving a public offering. This purchaser
was a sophisticated investor capable of evaluating an investment in our
company.
16. (a) Securities Sold. On
August 27, 2010, 500,000 shares of common stock were issued; (b) Underwriter or
Other Purchasers. Such shares of common stock were issued to Waddell D.
Loflin; (c) Consideration. Such shares of common stock were issued as
a retention bonus and were valued at $2,500; and (d) Exemption from Registration
Claimed. These securities are exempt from registration under the Securities Act
of 1933, as amended, pursuant to the provisions of Section 4(2) thereof and Rule
506 thereunder, as a transaction not involving a public offering. This purchaser
was a sophisticated investor capable of evaluating an investment in our
company.
17. (a) Securities Sold. On
September 10, 2010, 600,000 shares of common stock were issued; (b) Underwriter
or Other Purchasers. Such shares of common stock were issued to Paul J. Goldman,
M.D.; (c) Consideration. Such shares of common stock were issued for
$6,000 in cash; and (d) Exemption from Registration Claimed. These securities
are exempt from registration under the Securities Act of 1933, as amended,
pursuant to the provisions of Section 4(2) thereof and Rule 506 thereunder, as a
transaction not involving a public offering. This purchaser was a sophisticated
investor capable of evaluating an investment in our company.
II-4
18. (a) Securities Sold. On
September 10, 2010, 180,000 common stock purchase warrants to purchase a like
number of shares of common stock were issued; (b) Underwriter or Other
Purchasers. Such common stock purchase warrants were issued to Paul J. Goldman,
M.D.; (c) Consideration. Such common stock purchase warrants were issued as part
of a securities unit, there being no consideration assigned to such common stock
purchase warrants; and (d) Exemption from Registration Claimed. These securities
are exempt from registration under the Securities Act of 1933, as amended,
pursuant to the provisions of Section 4(2) thereof and Rule 506 thereunder, as a
transaction not involving a public offering. This purchaser was a sophisticated
investor capable of evaluating an investment in our company; (e) Terms of
Conversion or Exercise. The exercise price of the common stock purchase warrants
is $.10 per share. All of the common stock purchase warrants are
exercisable until September 9, 2012.
19. (a) Securities Sold. On
September 27, 2010, 100,000 shares of common stock were issued; (b) Underwriter
or Other Purchasers. Such shares of common stock were issued to James D.
Luneau; (c) Consideration. Such shares of common stock were issued
for $1,000 in cash; and (d) Exemption from Registration Claimed. These
securities are exempt from registration under the Securities Act of 1933, as
amended, pursuant to the provisions of Section 4(2) thereof and Rule 506
thereunder, as a transaction not involving a public offering. This purchaser was
a sophisticated investor capable of evaluating an investment in our
company.
20. (a) Securities Sold. On
September 27, 2010, 20,000 common stock purchase warrants to purchase a like
number of shares of common stock were issued; (b) Underwriter or Other
Purchasers. Such common stock purchase warrants were issued to James D. Luneau;
(c) Consideration. Such common stock purchase warrants were issued as part of a
securities unit, there being no consideration assigned to such common stock
purchase warrants; and (d) Exemption from Registration Claimed. These securities
are exempt from registration under the Securities Act of 1933, as amended,
pursuant to the provisions of Section 4(2) thereof and Rule 506 thereunder, as a
transaction not involving a public offering. This purchaser was a sophisticated
investor capable of evaluating an investment in our company; (e) Terms of
Conversion or Exercise. The exercise price of the common stock purchase warrants
is $.10 per share. All of the common stock purchase warrants are
exercisable until September 26, 2012.
21. (a) Securities Sold. On
September 28, 2010, 1,000,000 shares of common stock were issued; (b)
Underwriter or Other Purchasers. Such shares of common stock were issued to L.
E. Arnold; (c) Consideration. Such shares of common stock were issued
for $10,000 in cash; and (d) Exemption from Registration Claimed. These
securities are exempt from registration under the Securities Act of 1933, as
amended, pursuant to the provisions of Section 4(2) thereof and Rule 506
thereunder, as a transaction not involving a public offering. This purchaser was
a sophisticated investor capable of evaluating an investment in our
company.
22. (a) Securities Sold. On
September 28, 2010, 200,000 common stock purchase warrants to purchase a like
number of shares of common stock were issued; (b) Underwriter or Other
Purchasers. Such common stock purchase warrants were issued to L. E. Arnold; (c)
Consideration. Such common stock purchase warrants were issued as part of a
securities unit, there being no consideration assigned to such common stock
purchase warrants; and (d) Exemption from Registration Claimed. These securities
are exempt from registration under the Securities Act of 1933, as amended,
pursuant to the provisions of Section 4(2) thereof and Rule 506 thereunder, as a
transaction not involving a public offering. This purchaser was a sophisticated
investor capable of evaluating an investment in our company; (e) Terms of
Conversion or Exercise. The exercise price of the common stock purchase warrants
is $.10 per share. All of the common stock purchase warrants are
exercisable until September 27, 2012.
23. (a) Securities Sold. On
September 28, 2010, 1,000,000 shares of common stock were issued; (b)
Underwriter or Other Purchasers. Such shares of common stock were issued to FLL
Shamrock, LP; (c) Consideration. Such shares of common stock were
issued for $10,000 in cash; and (d) Exemption from Registration Claimed. These
securities are exempt from registration under the Securities Act of 1933, as
amended, pursuant to the provisions of Section 4(2) thereof and Rule 506
thereunder, as a transaction not involving a public offering. This purchaser was
a sophisticated investor capable of evaluating an investment in our
company.
II-5
24. (a) Securities Sold. On
September 28, 2010, 200,000 common stock purchase warrants to purchase a like
number of shares of common stock were issued; (b) Underwriter or Other
Purchasers. Such common stock purchase warrants were issued to FLL Shamrock, LP;
(c) Consideration. Such common stock purchase warrants were issued as part of a
securities unit, there being no consideration assigned to such common stock
purchase warrants; and (d) Exemption from Registration Claimed. These securities
are exempt from registration under the Securities Act of 1933, as amended,
pursuant to the provisions of Section 4(2) thereof and Rule 506 thereunder, as a
transaction not involving a public offering. This purchaser was a sophisticated
investor capable of evaluating an investment in our company; (e) Terms of
Conversion or Exercise. The exercise price of the common stock purchase warrants
is $.10 per share. All of the common stock purchase warrants are
exercisable until September 27, 2012.
25. (a) Securities Sold. On
September 28, 2010, 500,000 shares of common stock were issued; (b) Underwriter
or Other Purchasers. Such shares of common stock were issued to Blayne G. St.
James; (c) Consideration. Such shares of common stock were issued for
$5,000 in cash; and (d) Exemption from Registration Claimed. These securities
are exempt from registration under the Securities Act of 1933, as amended,
pursuant to the provisions of Section 4(2) thereof and Rule 506 thereunder, as a
transaction not involving a public offering. This purchaser was a sophisticated
investor capable of evaluating an investment in our company.
26. (a) Securities Sold. On
September 28, 2010, 100,000 common stock purchase warrants to purchase a like
number of shares of common stock were issued; (b) Underwriter or Other
Purchasers. Such common stock purchase warrants were issued to Blayne G. St.
James; (c) Consideration. Such common stock purchase warrants were issued as
part of a securities unit, there being no consideration assigned to such common
stock purchase warrants; and (d) Exemption from Registration Claimed. These
securities are exempt from registration under the Securities Act of 1933, as
amended, pursuant to the provisions of Section 4(2) thereof and Rule 506
thereunder, as a transaction not involving a public offering. This purchaser was
a sophisticated investor capable of evaluating an investment in our company; (e)
Terms of Conversion or Exercise. The exercise price of the common stock purchase
warrants is $.10 per share. All of the common stock purchase warrants
are exercisable until September 27, 2012.
27. (a) Securities Sold. On
October 13, 2010, 180,000 shares of common stock were issued; (b) Underwriter or
Other Purchasers. Such shares of common stock were issued to 24
persons; (c) Consideration. Such shares of common stock were issued
for a total of $3,600 in cash, or $.02 per share; and (d) Exemption from
Registration Claimed. These securities are exempt from registration under the
Securities Act of 1933, as amended, pursuant to the provisions of Section 4(2)
thereof and Rule 506 thereunder, as a transaction not involving a public
offering, which private offering was terminated prior to the filing of this
Registration Statement. These purchasers were investors capable of evaluating an
investment in our company.
Item
16. Exhibits.
The following is a list of exhibits
filed as part of this registration statement. Where so indicated by footnote,
exhibits which were previously filed are incorporated herein by reference. Any
statement contained in an Incorporated Document shall be deemed to be modified
or superseded for purposes of this Registration Statement to the extent that a
statement contained herein or in any other subsequently filed Incorporated
Document modifies or supersedes such statement. Any such statement so modified
or superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Registration Statement.
Exhibit Number
|
Description
|
|
3.1
†
|
Articles
of Incorporation of Louisiana Food Company.
|
|
3.2
†
|
Bylaws
of Louisiana Food Company.
|
|
4.1
†
|
Specimen
Common Stock Certificate.
|
|
4.2
†
|
Common
Stock Purchase Warrant issued to Roy Brumbaugh.
|
|
4.3
†
|
|
Common
Stock Purchase Warrant issued to Brad A.
Kinder.
|
II-6
Exhibit Number
|
Description
|
|
4.4
†
|
Common
Stock Purchase Warrant issued to Douglas V. Martin.
|
|
4.5
†
|
Common
Stock Purchase Warrant issued to William Huff.
|
|
4.6
†
|
Common
Stock Purchase Warrant issued to Clarence Farmer.
|
|
4.7
†
|
Common
Stock Purchase Warrant issued to David Loflin.
|
|
4.8
†
|
Common
Stock Purchase Warrant issued to Paul J. Goldman,
M.D.
|
|
4.9
†
|
Common
Stock Purchase Warrant issued to Newlan &
Newlan.
|
|
4.10
†
|
Common
Stock Purchase Warrant issued to James D. Luneau.
|
|
4.11
†
|
Common
Stock Purchase Warrant issued to L. E. Arnold.
|
|
4.12
†
|
Common
Stock Purchase Warrant issued to FLL Shamrock, LP.
|
|
4.13
†
|
Common
Stock Purchase Warrant issued to Blayne G. St.
James.
|
|
5.1
†
|
Opinion
of Newlan & Newlan, re: legality of the securities being
registered.
|
|
10.1
†
|
Pre-incorporation
Agreement and Subscription among between David Loflin, Paul J. Goldman,
M.D. and Newlan & Newlan.
|
|
10.2
†
|
Securities
Purchase Agreement between Louisiana Food Company and Roy
Brumbaugh.
|
|
10.3
†
|
Securities
Purchase Agreement between Louisiana Food Company and Brad A.
Kinder.
|
|
10.4
†
|
Securities
Purchase Agreement between Louisiana Food Company and Douglas V.
Martin.
|
|
10.5
†
|
Securities
Purchase Agreement between Louisiana Food Company and William
Huff.
|
|
10.6
†
|
Securities
Purchase Agreement between Louisiana Food Company and Clarence
Farmer.
|
|
10.7
*
|
Consulting
Agreement between Louisiana Food Company and Rage Marketing,
Inc.
|
|
10.8
†
|
Securities
Purchase Agreement between Louisiana Food Company and James D.
Luneau.
|
|
10.9
†
|
Securities
Purchase Agreement between Louisiana Food Company and L. E.
Arnold.
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10.10
*
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Securities
Purchase Agreement between Louisiana Food Company and FLL Shamrock,
LP.
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|
10.11
†
|
Securities
Purchase Agreement between Louisiana Food Company and Blayne G. St.
James.
|
|
10.12
†
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Lease
Agreement between Louisiana Food Company and Edible
Enterprises.
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23.1
*
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Auditor
Consent.
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II-7
Exhibit Number
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Description
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23.2
†
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Consent
of Newlan & Newlan (included in Exhibit 5.1).
|
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99.1
*
|
|
Form
of Subscription Agreement.
|
* Filed herewith. | ||
† Filed previously. |
Item
17. Undertakings.
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(a)
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The
undersigned registrant hereby undertakes
to:
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|
(1)
|
File,
during any period in which offers or sales are being made, a
post-effective amendment to this registration statement
to:
|
|
(i)
|
Include
any prospectus required by Section 10(a)(3) of the Securities Act of 1933,
as amended (the “Securities Act”);
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(ii)
|
Reflect
in the prospectus any facts or events which, individually or in the
aggregate, represent a fundamental change in the information in the
registration statement.
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Notwithstanding
the foregoing, any increase or decrease in volume of securities offered (if the
total dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated maximum
offering range may be reflected in the form of prospectus filed with the
Securities and Commission (the “Commission”) pursuant to Rule 424(b) if, in the
aggregate, the changes in volume and price represent no more than 20 percent
change in the maximum aggregate offering price set forth in the “Calculation of
Registration Fee” table in the effective registration statement.
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(iii)
|
Include
any additional or changed material information on the plan of
distribution.
|
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(2)
|
For
determining liability under the Securities Act, treat each such
post-effective amendment as a new registration statement relating to the
securities offered, and the offering of such securities at that time shall
be deemed to be the initial bona fide
offering.
|
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(3)
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File
a post-effective amendment to remove from registration by means of a
post-effective amendment any of the securities that remain unsold at the
end of the offering.
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(4)
|
For
determining liability of the undersigned registrant under the Securities
Act to any purchaser in the initial distribution of the securities, the
undersigned registrant undertakes that in a primary offering of securities
of the undersigned registrant pursuant to this registration statement,
regardless of the underwriting method used to sell the securities to the
purchaser, if the securities are offered or sold to such purchaser by
means of any of the following communications, the undersigned registrant
will be a seller to the purchaser and will be considered to offer or sell
such securities to such
purchaser:
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|
(i)
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Any
preliminary prospectus or prospectus of the undersigned registrant
relating to the offering required to be filed pursuant to Rule
424;
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(ii)
|
Any
free writing prospectus relating to the offering prepared by or on behalf
of the undersigned registrant or used or referred to by the undersigned
registrant;
|
II-8
|
(iii)
|
The
portion of any other free writing prospectus relating to the offering
containing material information about the undersigned registrant or its
securities provided by or on behalf of the undersigned registrant;
and
|
|
(iv)
|
Any
other communication that is an offer in the offering made by the
undersigned registrant to the
purchaser.
|
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(b)
|
Provide
to the underwriters at the closing specified in the underwriting
agreements, certificates in such denominations and registered in such
names as required by the underwriters to permit prompt delivery to each
purchaser.
|
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(c)
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Insofar
as indemnification for liabilities arising under the Securities Act may be
permitted to directors, officers and controlling persons of the registrant
pursuant to the foregoing provisions, or otherwise, the registrant has
been advised that in the opinion of the Commission such indemnification is
against public policy as expressed in the Securities Act and is,
therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of
expenses incurred or paid by a director, officer or controlling person of
the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will,
unless in the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public policy as
expressed in the Securities Act and will be governed by the final
adjudication of such issue.
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(d) (1)
|
For
determining any liability under the Securities Act, treat the information
omitted from the form of prospectus filed as part of this registration
statement in reliance upon Rule 430A and contained in a form of prospectus
filed by the registrant under Rule 424(b)(1), or (4), or 497(h) under the
Securities Act as part of this registration statement as of the time the
Commission declared it
effective.
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(2)
|
For
determining any liability under the Securities Act, treat each
post-effective amendment that contains a form of prospectus as a new
registration statement for the securities offered in the registration
statement, and that offering of the securities at that time as the initial
bona fide offering of those
securities.
|
II-9
SIGNATURES
Pursuant to the requirements of the
Securities Act of 1933, as amended, the registrant certifies that it has
reasonable grounds to believe that it meets all of the requirements for filing
on Form S-1 and has duly caused this registration statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Norco,
State of Louisiana, on the 18th day of November, 2010.
LOUISIANA
FOOD COMPANY
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|||
By:
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/s/
DAVID LOFLIN
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||
David
Loflin, President
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|||
(Principal
Executive Officer)
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In accordance with the requirements of
the Securities Act of 1933, this Registration Statement has been signed below by
or on behalf of the following persons in the capacities and on the dates
stated.
Signature
|
Title(s)
|
Date
|
||
/s/ DAVID
LOFLIN
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November
18, 2010
|
|||
David
Loflin
|
President
(Principal Executive Officer)
and
Director
|
|||
/s/ WADDELL D.
LOFLIN
|
November
18, 2010
|
|||
Waddell
D. Loflin
|
|
Vice
President, Acting Chief Financial
Officer
(Principal Financial and
Accounting
Officer), Secretary, Treasurer
and
Director
|
|
II-10