Attached files
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EX-32.2 - EXHIBIT 32.2 - LOUISIANA FOOD Co | ex32-2.htm |
EX-31.1 - EXHIBIT 31.1 - LOUISIANA FOOD Co | ex31-1.htm |
EX-31.2 - EXHIBIT 31.2 - LOUISIANA FOOD Co | ex31-2.htm |
EX-32.1 - EXHIBIT 32.1 - LOUISIANA FOOD Co | ex32-1.htm |
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
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Form 10-Q
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(Mark one)
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[ X ]
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Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
for the quarterly period ended June 30, 2011
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OR
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[ ]
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Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
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Commission File No. 333-169924
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LOUISIANA FOOD COMPANY
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(Exact name of registrant as specified in its charter)
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NEVADA
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27-3257760
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(State or Other Jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification Number)
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917 Third Street, Norco, Louisiana 70079
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(Address of principal executive offices, including zip code)
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(877) 732-2143
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(Issuer’s telephone number, including area code)
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Indicate by check mark whether the registrant (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes [ X ] No [ ]
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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):
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Large accelerated filer [ ]
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Accelerated filer [ ]
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Non-accelerated filer [ ] (Do not check if a smaller
reporting company)
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Smaller reporting company [X]
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Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the
Exchange Act). Yes [ ] No [ X ]
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As of August 16, 2011, there were 28,280,000 shares of the issuer’s common stock outstanding.
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PART I - FINANCIAL INFORMATION
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Item 1. Financial Statements
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INDEX TO FINANCIAL STATEMENTS
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Page
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Louisiana Food Company
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Balance Sheets as of June 30, 2011 (unaudited) and September 30, 2010
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3
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Statements of Operations For the Three Months and Nine Months Ended June 30,
2011, and the Period from Inception (August 17, 2010) to June 30, 2011
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4
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Statements of Cash Flows For the Nine Months Ended June 30, 2011, and the Period
from Inception (August 17, 2010) to June 30, 2011
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5
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Notes to Financial Statements
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7
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LOUISIANA FOOD COMPANY
(A Development Stage Company)
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BALANCE SHEETS
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June 30, 2011, and September 30, 2010
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6/30/11
(unaudited)
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9/30/10
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ASSETS
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Current assets
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Cash and cash equivalents
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$479
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$22,353
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Accounts receivable
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9,230
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---
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Inventory
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3,389
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5,031
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Deposits
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603
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603
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Total current assets
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13,701
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27,987
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Equipment, net of accumulated depreciation of $550 and $55
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2,243
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1,945
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Intangible assets
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10,483
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10,483
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Total assets
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$26,427
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$40,415
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LIABILITIES AND STOCKHOLDERS’ EQUITY
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Current liabilities
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Accounts payable and accrued expenses
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$4,755
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$ ---
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Notes payable - shareholders
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15,300
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$ ---
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Total current liabilities
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20,055
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---
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Commitments and contingencies
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–
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–
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Stockholders’ equity
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Preferred stock, $.001 par value: 5,000,000 shares
authorized; no shares issued and outstanding as of June 30,
2011, and September 30, 2010
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---
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---
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Common stock, $.001 par value: 50,000,000 shares
authorized; 27,080,000 and 25,700,000 shares issued and
outstanding as of June 30, 2011, and September 30, 2010,
respectively
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27,080
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25,450
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Additional paid-in capital
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79,296
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65,326
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Subscription receivable
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---
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(15,000)
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Deficit accumulated during development stage
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(100,004)
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(35,361)
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Total stockholders’ equity
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6,372
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40,415
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Total liabilities and stockholders’ equity
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$26,427
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$40,415
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The accompanying notes are an integral part of these statements.
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LOUISIANA FOOD COMPANY
(A Development Stage Company)
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STATEMENTS OF OPERATIONS
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For the Three Months and Nine Months Ended June 30, 2011, and
the Period from Inception (August 17, 2010) to June 30, 2011
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Three
Months
Ended
6/30/11
(unaudited)
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Nine
Months
Ended
6/30/11
(unaudited)
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Period
from
Inception
(8/17/10) to
6/30/11
(unaudited)
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Revenues
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$863
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$10,092
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$10,092
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Cost of sales
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(246)
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(3,532)
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(3,532)
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Gross profit
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617
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6,560
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6,560
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Expenses:
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Compensation
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1,809
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18,202
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33,200
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Legal and professional
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6,010
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14,510
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31,148
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Depreciation and
amortization
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162
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495
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550
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Corporate expenses
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6,986
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11,071
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12,127
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Rent
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600
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2,720
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3,189
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Interest expense
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155
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155
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155
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General and
administrative
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455
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24,050
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26,195
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Total operating
expenses
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16,177
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71,203
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106,564
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Loss before income taxes
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(15,560)
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(64,643)
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(100,004)
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Provision for income taxes
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---
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---
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---
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Net loss
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$(15,560)
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$(64,643)
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$(100,004)
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Loss per share:
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Basic and diluted
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$(0.00)
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$(0.00)
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Weighted average number of shares
outstanding:
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Basic and diluted
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27,080,000
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26,314,222
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The accompanying notes are an integral part of these statements.
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LOUISIANA FOOD COMPANY
(A Development Stage Company)
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STATEMENTS OF CASH FLOWS
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For the Nine Months Ended June 30, 2011, and the Period from
Inception (August 17, 2010) to June 30, 2011
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Nine Months
Ended
6/30/11
(unaudited)
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Period from
Inception
(8/17/10) to
6/30/11
(unaudited)
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CASH FLOWS FROM OPERATING ACTIVITIES
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Net loss
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$(64,643)
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$(100,004)
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Adjustments to reconcile net loss to
cash used for operating activities:
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Depreciation and amortization
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495
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550
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Non-cash operating expenses
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---
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25,776
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Changes in operating assets and liabilities:
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Accounts receivable
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(9,230)
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(9,230)
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Deposits
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---
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(603)
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Inventory
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1,642
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(872)
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Accounts payable
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4,755
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4,755
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Net cash used for operating activities
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(66,981)
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(79,628)
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CASH FLOWS FROM INVESTING ACTIVITIES
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Purchase of equipment
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(793)
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(2,793)
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Net cash used in investing activities
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(793)
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(2,793)
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CASH FLOWS FROM FINANCING ACTIVITIES
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Proceeds from sale of common stock for cash
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15,600
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67,600
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Proceeds from note payable - shareholder
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15,300
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15,300
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Subscription receivable
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15,000
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---
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Net cash provided by financing activities
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45,900
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82,900
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NET CHANGE IN CASH
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(21,874)
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479
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Cash, beginning of period
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22,353
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---
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Cash, end of period
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$479
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$479
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The accompanying notes are an integral part of these statements.
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LOUISIANA FOOD COMPANY
(A Development Stage Company)
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STATEMENTS OF CASH FLOWS
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For the Nine Months Ended June 30, 2011, and the Period from
Inception (August 17, 2010) to June 30, 2011
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Nine Months
Ended
6/30/11
(unaudited)
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Period from
Inception
(8/17/10) to
6/30/11
(unaudited)
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Supplemental disclosure:
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Interest paid
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$155
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$155
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Income taxes paid
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$---
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$ ---
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Non-cash financing and investing
activities
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$---
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Stock and warrants issued for services
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$---
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$20,000
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Stock issued for inventory and
intangible asset
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$---
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$13,000
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Stock issued for bonus
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$---
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$2,500
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Warrants issued for services
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$---
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$3,276
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The accompanying notes are an integral part of these statements.
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LOUISIANA FOOD COMPANY
(A Development Stage Company)
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NOTES TO FINANCIAL STATEMENTS
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June 30, 2011
(unaudited)
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NOTE 1. THE COMPANY
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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 specialty packaged dry 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 economical
access to FDA-approved commercial kitchen facilities.
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Liquidity and Management Plans
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At June 30, 2011, the Company had a cash balance of $479, a working capital deficit of $6,354
and an accumulated deficit during the development stage of $100,004. 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, minimization,
to the extent possible, of 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. As discussed in Note 8, the Company has borrowed approximately
$15,000 from certain shareholders, in order to pay for certain corporate and operating expenses.
The Company is seeking additional equity funds to support operations through private
transactions. Management believes that these actions will enable the Company to meet its
working capital needs through September 30, 2011.
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Going Concern
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The Company has incurred losses totaling $100,004 from its Inception through June 30, 2011, and
a working capital deficit at June 30, 2011. 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 through a direct public offering.
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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 to support the
Company’s working capital requirements. To the extent that funds generated from a direct public
offering 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.
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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.
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NOTE 2. BASIS OF PRESENTATION
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Basis of Presentation
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The accompanying unaudited interim financial statements of the Company have been prepared
by the Company in accordance with accounting principles generally accepted in the United States
of America, pursuant to the Securities and Exchange Commission rules and regulations. In
management’s opinion, all adjustments necessary for a fair presentation of the results for interim
periods have been reflected in the interim financial statements. The results of operations for any
interim period are not necessarily indicative of the results for a full year. All adjustments to the
financial statements are of a normal recurring nature.
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Certain information and footnote disclosures normally included in financial statements prepared
in accordance with generally accepted accounting principles have been condensed or omitted.
Such disclosures are those that would substantially duplicate information contained in the most
recent audited financial statements of the Company, such as significant accounting policies and
stock options. Management presumes that users of the interim statements have read or have access
to the audited financial statements and notes thereto included in the Company’s Registration
Statement on Form S-1 (SEC File No. 333-169924).
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Revenue Recognition
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The Company derives its revenue from sales of its food and coffee products. 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.
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Accounts Receivable
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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. Of the Company’s $9,230 in accounts receivable at June 30, 2011,
$8,280 of such amount is of an “aged” nature and is due from a single customer. The Company
expects that it will receive payment of this entire account receivable during fiscal year 2011, but
is unable to predict the timing of such payment.
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The Company does not have any off-balance-sheet credit exposure to its customers.
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NOTE 3. RELATED-PARTY TRANSACTIONS
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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 $0.10 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, during the period from Inception to June 30, 2011.
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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 $0.10 per share, in payment of $10,000 in legal services. The value of the
warrants of $1,638 has been included in professional fees, during the period from Inception to
June 30, 2011.
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NOTE 4. DEPOSITS
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At June 30, 2011, and September 30, 2010, deposits, comprised entirely of a utility security
deposit, were $603.
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NOTE 5. INTANGIBLE ASSETS
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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. The Company’s
intangible assets are not amortized because they have indefinite lives.
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Impairment of Long-lived Assets
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Long-lived assets are continually monitored and are reviewed for impairment whenever events
or changes in circumstances indicate that the carrying amount of any such asset may not be
recoverable. The determination of recoverability is based on an estimate of undiscounted cash
flows expected to result from the use of an asset and its eventual disposition. The estimate of
undiscounted cash flows is based upon, among other things, certain assumptions about expected
future operating performance, growth rates and other factors. The Company’s estimates of
undiscounted cash flows may differ from actual cash flows due to, among other things,
technological changes, economic conditions, changes to its business model or changes in its
operating performance. If the sum of the undiscounted cash flows is less than the carrying value
of the asset, an impairment charge is recognized, measured as the amount by which the carrying
value exceeds the fair value of the asset. During the nine months ended June 30, 2011, the
Company did not record an impairment of the Company’s long-lived assets.
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NOTE 6. CAPITAL STOCK
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Common Stock Issued for Property
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During the nine months ended June 30, 2011, the Company did not issue shares of its common
stock 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.
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Common Stock Issued for Services
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During the nine months ended June 30, 2011, the Company did not issue shares of its common
stock for services. 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 an expense of $20,000 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.
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Common Stock Issued for Cash
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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 $0.02 per share.
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In December 2010, the Company issued 1,200,000 shares of its common stock for cash in the total
amount of $12,000.
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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.
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Subscription Receivable
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At September 30, 2010, the Company had not received a total of $15,000 in payment of 1,500,000
shares of common stock sold. During October 2010, the Company received all $15,000 in cash
associated with such subscription receivable.
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NOTE 7. WARRANTS TO PURCHASE COMMON STOCK
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Outstanding Stock Warrants
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In December 2010, the Company issued 240,000 stock warrants to a purchaser of common stock.
The warrants allow the warrant holder to purchase 240,000 shares of common stock at a price of
$0.10 per share. The two-year warrants expire in December 2012.
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In August and September 2010, the Company issued 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 June 30, 2011.
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A summary of the status and changes of the warrants issued during the period from September 30,
2010, through June 30, 2011, are as follows:
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Shares
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Weighted Average
Exercise Price
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Outstanding at beginning of period
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5,100,000
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$0.10
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Issued
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240,000
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$0.10
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Exercised
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-0-
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-0-
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Forfeited
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-0-
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-0-
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Expired
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-0-
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-0-
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Outstanding at end of period
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5,340,000
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$0.10
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Exercisable at end of period
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5,340,000
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$0.10
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A summary of the status of the warrants outstanding at June 30, 2011, is presented below:
|
Warrants Outstanding
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Warrants Exercisable
|
Exercise
Price
|
Number
Outstanding
|
Weighted Average
Remaining Contractual Life
|
Weighted
Average
Exercise
Price
|
Number
Exercisable
|
Weighted
Average
Exercise
Price
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$0.10
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5,340,000
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2 years
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$0.10
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5,340,000
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$0.10
|
At June 30, 2011, vested warrants of 5,340,000 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.
|
The significant weighted average assumptions relating to the valuation of the Company’s options
for the period ended June 30, 2011, were as follows:
|
Stock 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 8. LOANS FROM SHAREHOLDERS
|
During the three months ended June 30, 2011, the Company obtained unsecured loans from two
shareholders in the aggregate amount of $15,000. Each of these loans is evidenced by a
promissory note, bears interest at the rate of 8% per annum and is due, as to $10,000, on June 30,
2011, and, as to $5,000, on September 30, 2011. At June 30, 2011, the Company had $155 in
accrued interest. Since June 30, 2011, the Company has repaid $1,000 of the $10,000 loan, the
balance of which remains due and payable. The proceeds of these loans were used for corporate
purposes.
|
NOTE 9. COMMITMENTS AND CONTINGENCIES
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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 $2,720 for the nine months ended June 30, 2011.
|
NOTE 10. DIRECT PUBLIC OFFERING
|
In January 2011, the Company’s Registration Statement on Form S-1 (SEC File No. 333-169924)
was declared effective. Pursuant to such Registration Statement, the Company originally
registered for sale 1,000,000 shares of its common stock at an offering price of $0.80 per share.
In March 2011, the Company withdrew such shares from registration, without having sold any of
such shares.
|
NOTE 11. SUBSEQUENT EVENT
|
Securities Issued for Cash
|
In July 2011, the Company issued units of its securities for cash in the amount of $14,950.
Included in such units were a total of 1,200,000 shares of the Company’s common stock and
120,000 warrants to purchase a like number of shares of common stock at an exercise price of
$.10 per share.
|
Item 2. 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 June 30, 2011, and the financial statements for the three months and nine months ended June 30, 2011, included elsewhere herein. 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 herein. The risks and uncertainties discussed herein could cause our actual results to differ from the results contemplated by these forward-looking statements.
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 specialty packaged dry 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.
Overview