Item 1. Business.
Rocky Mountain Fudge Company, Inc. was established in 1990 to engage in the business of manufacturing and retailing fudge candy. In December 1998, we completed an initial public offering of 50,000 shares of its common stock for the offering price of $1.00 per share, resulting in gross proceeds of $50,000. In 2005, we effected a forward stock split of our issued and outstanding shares of common stock on a five shares for one share basis. In January 2008, we effected a reverse stock split of our outstanding shares on a one share for five shares basis. As a result of these actions, we currently have outstanding 2,250,000 shares of common stock.
Since inception, we have manufactured and marketed candy products on a seasonal basis. Our principal product is fudge candy, which is produced and sold to retail consumers in northern Utah and surrounding areas. We also produce a brittle candy. All products are made using proprietary recipes contributed by one of our co-founders. Historically, we have used various facilities to produce our candy products and sold products through retail booths that the company would rent at various locations, such as established crafts boutiques, festivals and fairs. Management estimates that approximately 90% of our revenues historically have been realized during the Thanksgiving and Christmas periods.
In 2005, we focused on developing an Internet website to be used for the promotion and sale of our products. Management’s intent was that the website would eventually become our primary marketing focus, although we would continue selling products at local retail outlets and in booths located at special events, fairs and festivals. We experienced decreased sales during 2007 and 2008, which we attributed to being unable to locate an adequate permanent location from which to produce our candy products.
During 2010 we intend to search for a joint venture candidate with whom we can contract to sub-lease industrial-quality kitchen facilities for our fudge production processes. Ideally, we would like to find a joint venture partner that would accept a percentage of earnings as payment for the lease of the kitchen facility. This would minimize the amount of up-front capital required. In the alternative, we will attempt to locate a facility with adequate space and kitchen equipment such that we can rent the facility on a seasonal basis. If current available funds are not sufficient to complete the facilities as desired, we may need to seek funds from our directors or principal stockholders or from outside financing. We anticipate that any facility we locate will also be able to accommodate the packaging of products.
We are in the early stages of updating our website (www.greatestfudgeonearth.com) so as to accommodate online orders. It is our hope that this process will allow for minimal sales staff and minimal advertising expenses. We will also continue selling products at local retail outlets and in booths located at special events, fairs and festivals. If we are unable to increase revenues and attain profitability, it may become necessary for management to explore alternative business plans.
During 2010, we will focus on completing development of our Internet website and building a customer base for our products. We also plan to:
● search for adequate kitchen facilities or a joint venture candidate;
● increase revenues from sales of candy products;
● expand our marketing area to include communities outside the Salt Lake City metropolitan area;
● expand our Internet business to be able to attract new customers, regardless of location, which will create an expanded mail order business;
● hire additional employees and/or independent contractors if we are successful in expanding our business and adequate funds are available; and
● attain profitability.
Products
All of our candy products have been developed by recipes contributed by our co-founder, Vallerie Moulton. Presently, we offer fudge candy in the following varieties: Plain, Walnut, Almond, Rocky Road, Caramel Swirl and Virginia Cream. We also offer brittle candy in the following varieties: Peanut, Pecan and Cashew. We will continue to use temporary production facilities until such time as our business warrants expansion into permanent facilities and necessary funds are available. If current available funds are not sufficient to continue production, it may be necessary for us to seek funds from our directors or principal stockholders or from outside financing. We intend to continue to rent a facility with adequate space and equipment to handle anticipated production needs, without having to incur significant expense and capital expenditures. We also intend to package products in the same facility as they are produced.
Distribution
Historically, we have sold our products by way of rented booths at various special functions, fairs and other events, concentrating sales during the Thanksgiving and Christmas seasons. Most sales have been made in face-to-face transactions at one of our retail booths. To date, Internet sales have not been successful, although we continue to explore ways to increase our Internet business or possible alternative strategies.
Our fudge and other candies are generally sold in pre-packaged, ½ pound plastic containers or wrapped in airtight packages. In addition, our fudge is available in slices that are cut in the size or weight that the customer orders. We sell our fudge at a price of $13.00 per pound and brittle candy for $14.00 per pound, which price includes sales tax for mail orders. We typically add a flat $7.70 shipping and handling fee to each order. Management believes that our candy is priced competitively compared to other candy makers that charge between $8.50 to $23.00 per pound for their products. Also, unlike some competitors, we do not anticipate adjusting prices during holidays.
We intend to continue and expand marketing and distribution efforts only if management determines to remain in the candy business. Thus, any possible future expansion would be dependent on the availability of adequate funds.
New Products
We do not presently have any new products in development.
Competition
The candy and snack food industry is highly competitive and dominated by large national and international concerns, such as Nabisco, Hershey Foods and Nestle. There are literally hundreds of competitors existing in the candy market at any given time. Due to this large and very fragmented market, in addition to our status as a development stage company, management believes our competitive position in its industry to be extremely small. Even if we are successful in our future business plans, this will remain the case. There can be no assurance that we will be able to compete successfully in this industry.
Sources and Raw Materials and Supplies
The raw materials used in our products are widely available from distributors and at the retail level. These materials include butter, sugar, walnuts and other nuts, marshmallows, spices and other condiments. Management believes that we can readily purchase adequate supplies from local distributors or from large retail outlets. Management does not expect a scarcity of any ingredients to be a concern.
Patents and Copyrights
We do not presently have any patents, trademarks, licenses, franchises, concessions or royalty agreements and there are no plans to secure any such arrangements in the foreseeable future.
Governmental Regulations
Our operations and production of candy are subject to U.S. Department of Agriculture ("USDA") regulations requiring labeling of ingredients on its candy containers. Management believes that we are in compliance with this regulation. Our manufacturing facilities are also subject to periodic USDA inspections for cleanliness and scales, which are used for weighing quantities of product at retail, and are subject to periodic testing by the Division of Weights and Measures of the Utah Department of Agriculture. With the exception of periodic inspections by the USDA for cleanliness of facilities, management believes that we do not have to comply with any specific environmental laws.
Research and Development
We do not conduct any research and development in connection with our business operations.
Employees
Currently, we have no full-time employees, and will add employees only if our current business and operations warrant such additions. Steven Moulton, our President and a director, devotes approximately 60 hours per month to the Company's business.
In April 2007, two of our co-founders and directors resigned. Ronald Moulton resigned as a director, President and CEO and Vallerie Moulton as a director and Secretary. Following their resignations, we entered into Consulting Agreements with each of them for a term of three years. Under the agreements, Mr. Moulton was to provide consulting services related to the production and marketing of our products and act as an advisor to management. He was to be compensated at the rate of $20.00 per hour for his services and reimbursed for expenses related to his services. Mrs. Moulton was to oversee production of products and consult with management in connection with marketing and strategic planning. She was to be compensated at the rate of $20.00 per hour for her services and reimbursed for expenses related to her services. Both agreements were subsequently terminated without any services being provided.
Presently, we use the services of both Mr. and Mrs. Moulton on an as-needed basis. During 2009, their services were contributed to the company and they did not receive any compensation.
Except as disclosed above, we have not entered into any other employment agreement with any officer, director or any other person and no such agreements are anticipated in the immediate future. It is intended that our directors will defer any compensation until such time as business operations provide sufficient cash flow to provide for salaries. As of the date hereof, no person has accrued any compensation.
Facilities
We currently use the personal residence of our former President and Secretary as our principal executive offices. These facilities that are owned by the former President and Secretary are provided at no charge. We also maintain a mail delivery location that is rented on a monthly basis for receiving correspondences and product orders. The address of this location is 4760 Highland Drive, #353, Salt Lake City Utah 84117. In the past, we have leased various commercial kitchen locations for the production of our candy products. We have been unable to locate a suitable permanent location for our candy production activities.
Industry Segments
No information is presented regarding industry segments. We are presently engaged in the production and marketing of candy products and have no current plans to participate in another business or industry. Reference is made to our financial statements and the statements of income included in this Form 10-K for a report of our operating history for the past two fiscal years.
Item 1A.
Item 1A. Risk Factors.
This item is not required for a smaller reporting company.
Item 1B.
Item 1B. Unresolved Staff Comments.
This item is not required for a smaller reporting company.
Item 2.
Item 2.
Description of Property.
We do not presently own any property.
Item 3.
Item 3.
Legal Proceedings.
There are no material pending legal proceedings to which the company or any subsidiary is a party, or to which any property is subject and, to the best of our knowledge, no such action against us is contemplated or threatened.
Item 4.
Item 4.
(Removed and Reserved)
PART II
Item 5.
Item 5.
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.
Our common shares are included on the OTC Bulletin Board under the symbol ”RMFI” (symbol prior to January 21, 2008 was “RMFD”), although currently there is not an active trading market for the shares and there can be no assurance that any such market will ever develop or be maintained. Set forth in the table below are the quarterly high and low prices of our common stock as obtained from the OTC Bulletin Board for the past two fiscal years and adjusted to reflect the one share for five shares reverse stock split effected in January 2008.
The above over-the-counter market quotations reflect inter-dealer prices, without retail mark-up, mark-down or commission and may not necessarily represent actual transactions. Because of the limited market for our common stock, investors and prospective investors should not presume that the above quotations represent the price at which our shares may be purchased or sold.
As of March 25, 2010, there were approximately 60 holders of record of our common stock, which figure does not take into account those shareholders whose certificates are held in the name of broker-dealers or other nominee accounts.
The ability of individual stockholders to trade their shares in a particular state may be subject to various rules and regulations of that state. A number of states require that an issuer's securities be registered in their state or appropriately exempted from registration before the securities are permitted to trade in that state. Presently, we have no plans to register our securities in any particular state.
Penny Stock Rule
It is unlikely that our securities will be listed on any national or regional exchange or The Nasdaq Stock Market in the foreseeable future. Therefore our shares most likely are subject to the provisions of Section 15(g) and Rule 15g-9 of the Exchange Act, commonly referred to as the "penny stock" rule. Section 15(g) sets forth certain requirements for broker-dealer transactions in penny stocks and Rule 15g-9(d)(1) incorporates the definition of penny stock as that used in Rule 3a51-1 of the Exchange Act.
The SEC generally defines a penny stock to be any equity security that has a market price less than $5.00 per share, subject to certain exceptions. Rule 3a51-1 provides that any equity security is considered to be a penny stock unless that security is:
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registered and traded on a national securities exchange meeting specified criteria set by the SEC;
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authorized for quotation on The Nasdaq Stock Market;
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issued by a registered investment company;
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excluded from the definition on the basis of price (at least $5.00 per share) or the issuer's net tangible assets; or
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exempted from the definition by the SEC.
A broker-dealer who sells penny stocks to a person other than an established customer or accredited investor is subject to additional sales practice requirements. An accredited investor is generally defined as a person with assets in excess of $1,000,000 or annual income exceeding $200,000, or $300,000 together with their spouse.
For transactions covered by these rules, a broker-dealer must make a special suitability determination for the purchase of such securities and must receive the purchaser's written consent to the transaction prior to the purchase. Additionally, for any transaction involving a penny stock, unless exempt, the rules require the delivery, prior to the first transaction, of a risk disclosure document relating to the penny stock market. A broker-dealer also must disclose the commissions payable to both the broker-dealer and the registered representative and current quotations for the securities. Finally, a monthly statement must be sent to the client disclosing recent price information for the penny stocks held in the account and information on the limited market in penny stocks. Consequently, these rules may restrict the ability of broker-dealers to trade and/or maintain a market in our common stock and may affect the ability of stockholders to sell their shares.
These requirements may be considered cumbersome by broker-dealers and could impact the willingness of a particular broker-dealer to make a market in our shares, or they could affect the value at which our shares trade. Classification of the shares as penny stocks increases the risk of an investment in our shares.
Recent Sales of Unregistered Securities
On April 16, 2007, the board of directors authorized the issuance of 1,000,000 shares (post-split) of our authorized, but previously unissued common stock, to Steven D. Moulton, a director. The shares were issued in consideration for services provided to our company, for payments made on behalf of the company and for $25,000 in cash advanced to the company. The shares were certificated and issued to Mr. Moulton on April 19, 2007. The shares were issued in a private transaction that is exempt from registration under the Securities Act of 1933 pursuant to exemption provided by Section 4(2) of that Act.
Dividends Policy
We have never declared cash dividends on our common stock, nor do we anticipate paying any dividends on our common stock in the foreseeable future.
Item 6.
Item 6.
Selected Financial Data.
This item is not required for a smaller reporting company.
Item 7.
Item 7.
Management’s Discussion and Analysis of Financial Condition and Results of Operations.
The following information should be read in conjunction with the financial statements and notes thereto appearing elsewhere in this Form 10-K.
We are a development stage company with limited assets, operations and revenues. Ongoing operating expense, including the costs associated with the preparation and filing of our periodic reports with the SEC, have been paid for by advances from a stockholder. It is anticipated that we will require approximately $15,000 over the next 12 months to fund our operations and to maintain our corporate viability. We believe that necessary funds will most likely be provided by officers, directors or a stockholder in the immediate future. However, unless we are able to generate sufficient revenues or obtain significant outside financing, there is substantial doubt about our ability to continue as a going concern.
Forward-Looking and Cautionary Statements
This report contains forward-looking statements relating to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as “may,” “will” “should," “expect," "intend," "plan," anticipate," "believe," "estimate," "predict," "potential," "continue," or similar terms, variations of such terms or the negative of such terms. These statements are only predictions and involve known and unknown risks, uncertainties and other factors. Although forward-looking statements, and any assumptions upon which they are based, are made in good faith and reflect our current judgment, actual results could differ materially from those anticipated in such statements. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results.
Results of Operations
During the year ended December 31, 2009, we did not realize any revenues compared to $11,485 in revenues in 2008. This decrease was due to the Company electing to refrain from producing fudge during the year, due primarily to our lack of suitable industrial kitchen facilities. Cost of sales were $8,450 for 2008 compared to $0 for 2009 due to our lack of sales. General and administrative expenses were $25,509 in 2009, a 30% decrease from $36,682 in 2008 due to a decrease in professional fees.
For 2009, our net loss was $26,287, or $0.01 per share, compared to $33,876 in 2008. The decrease is attributed primarily to the decrease in cost of sales due to the lack of sales and the lower general and administrative expenses in 2009.
Liquidity and Capital Resources
The majority of our expenses incurred during 2009 were paid by a stockholder. Because of our limited revenues and cash reserves, we expect to continue to rely on our directors or a stockholder to pay our expenses until such time we realize adequate revenues from the production and sales of candy products. There is no assurance that we will be able to generate adequate revenues in the immediate future to satisfy our cash needs.
At December 31, 2009, we had total current assets consisting of cash of $5,476 compared to $8,484 in cash at December 31, 2008. Current liabilities increased from $2,641 at December 31, 2008 to $24,920 at December 31, 2009. This increase is primarily due to the increase in notes payable - related party from $2,413 at the 2008 year end to $22,413 at the 2009 year end, which reflects the increased borrowing from a stockholder. Working capital at December 31, 2009 was a negative $19,444 compared to a positive $5,843 at December 31, 2008, also reflecting the increase in notes payable - related party. At December 31, 2009 we had total assets of $5,476 and a stockholders’ deficit of $19,444, compared to total assets of $8,484 and a stockholders' equity of $5,843 at December 31, 2008.
Cash decreased from $8,484 at December 31, 2008 to $5,476, at December 31, 2009. Net cash used by operating activities was $23,008 for 2009 compared to net cash used by operating activities of $26,448 for 2008, which primarily reflects $7,200 that was recognized in 2008 as services contributed by officers and shareholders, compared to $1,000 in 2009. We also realized $20,000 in 2009 from financing activities that represents monies received under the terms of a related-party note payable, compared to $2,413 in 2008. In addition, $25,750 was contributed to the Company during the year ended December 31, 2008.
If 2010 revenues do not provide sufficient funds to continue operations, we will need to seek additional financing, most likely from directors or a stockholder, although no one is under any obligation to provide additional funding. Further, there can be no assurance that outside funding would be available on terms acceptable to us, or at all.
In the opinion of management, inflation has not and will not have a material effect on our ongoing operations.
Net Operating Loss
We have accumulated approximately $166,951 of net operating loss carryforwards as of December 31, 2009. This loss carry forward may be offset against taxable income and income taxes in future years and expires in the year 2029. The use of these losses to reduce future income taxes will depend on the generation of sufficient taxable income prior to the expiration of the net operating loss carryforwards. In the event of certain changes in control, there will be an annual limitation on the amount of net operating loss carryforwards
that can be used. No tax benefit has been reported in the financial statements for the year ended December 31, 2009 because it has been fully offset by a valuation reserve. The use of future tax benefit is undeterminable at this time.
Recent Accounting Pronouncements
In May 2009, the Financial Accounting Standards Board (“FASB”) issued SFAS 165 (ASC 855-10) entitled “Subsequent Events”. Companies are now required to disclose the date through which subsequent events have been evaluated by management. Public entities (as defined) must conduct the evaluation as of the date the financial statements are issued, and provide disclosure that such date was used for this evaluation. SFAS 165 (ASC 855-10) provides that financial statements are considered “issued” when they are widely distributed for general use and reliance in a form and format that complies with GAAP. SFAS 165 (ASC 855-10) is effective for interim and annual periods ending after June 15, 2009 and must be applied prospectively. The adoption of SFAS 165 (ASC 855-10) did not have a significant effect on our financial statements as of December 31, 2009.
In June 2009, the FASB issued FAS 166, “Accounting for Transfers of Financial Assets” an amendment of FAS 140. FAS 140 is intended to improve the relevance, representational faithfulness, and comparability of the information that a reporting entity provides in its financial statements about a transfer of financial assets: the effects of a transfer on its financial position, financial performance, and cash flows: and a transferor’s continuing involvement, if any, in transferred financial assets. This statement must be applied as of the beginning of each reporting entity’s first annual reporting period that begins after November 15, 2009. We do not expect the adoption of FAS 166 to have an impact on results of operations, financial condition or cash flows.
In June 2009, the FASB issued FAS 167, “Amendments to FASB Interpretation No. 46(R) ”. FAS 167 is intended to (1) address the effects on certain provisions of FASB Interpretation No. 46 (revised December 2003), Consolidation of Variable Interest Entities, as a result of the elimination of the qualifying special-purpose entity concept in FAS 166, and (2) constituent concerns about the application of certain key provisions of Interpretation 46(R), including those in which the accounting and disclosures under the Interpretation do not always provided timely and useful information about an enterprise’s involvement in a variable interest entity. This statement must be applied as of the beginning of each reporting entity’s first annual reporting period that begins after November 15, 2009. We do not expect the adoption of FAS 167 to have an impact on results of operations, financial condition or cash flows.
In June 2009, the FASB issued SFAS 168, The FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles. (“SFAS 168” or ASC 105-10) SFAS 168 (ASC 105-10) establishes the Codification as the sole source of authoritative accounting principles recognized by the FASB to be applied by all nongovernmental entities in the preparation of financial statements in conformity with GAAP. SFAS 168 (ASC 105-10) was prospectively effective for financial statements issued for fiscal years ending on or after September 15, 2009 and interim periods within those fiscal years. The adoption of SFAS 168 (ASC 105-10) on July 1, 2009 did not impact our results of operations or financial condition. The Codification did not change GAAP, however, it did change the way GAAP is organized and presented. As a result, these changes impact how companies reference GAAP in their financial statements and in their significant accounting policies. We implemented the Codification in this Report by providing references to the Codification topics alongside references to the corresponding standards. We do not expect the adoption of FAS 168 to have an impact on results of operations, financial condition or cash flows.
Item 7A.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk.
This item is not required for a smaller reporting company.
Item 8.
Item 8.
Financial Statements and Supplementary Data.
Financial statements for the fiscal years ended December 31, 2009 and 2008 have been examined to the extent indicated in their reports by Pritchett, Siler & Hardy, P.C., independent certified public accountants and have been prepared in accordance with accounting principles generally accepted in the United States of America and pursuant to regulations promulgated by the SEC. The aforementioned financial statements are included herein under Item 15.
Item 9.
Item 9.
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.
On August 7, 2009, we dismissed Moore & Associates Chartered as our independent registered public accountants. None of the reports of Moore & Associates on our financial statements for either of the past two years contained an adverse opinion or disclaimer of opinion, or was qualified or modified as to uncertainty, audit scope or accounting principles. During the two most recent fiscal years, there were no disagreements with Moore and Associates, whether or not resolved, on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which, if not resolved to Moore and Associates, Chartered's satisfaction, would have caused it to make reference to the subject matter of the disagreement in connection with its report on the registrant's financial statements.
On August 27, 2009, the PCAOB issued PCAOB Release No. 105-2009-006 revoking the registration of Moore & Associates, Chartered and barring Michael J. Moore, CPA, from being an associated person of a registered public accounting firm. The PCAOB imposed these sanctions on the basis of its findings concerning the alleged violations of Moore & Associates and Michael J. Moore of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, PCAOB rules and auditing standards in auditing the financial statements of three issuer clients from 2006 to 2008, PCAOB rules and quality controls standards, and noncooperation with a Board investigation. A copy of the PCAOB Release can be accessed at the PCAOB website at http://www.pcaobus.org.
On August 7, 2009, we engaged the accounting firm of Seale and Beers, CPAs as our new independent registered public accounting firm. Our board of directors approved the dismissal of Moore & Associates Chartered and the engagement of Seale and Beers, CPAs. During the two most recent fiscal years and the interim periods preceding the engagement, we did not consult Seale and Beers regarding any of the matters set forth in Item 304(a)(2)(i) or (ii) of Regulation S-B.
On September 28, 2009, we dismissed Seale and Beers, CPAs as our independent certifying accountants pursuant to the unanimous consent of our board of directors. We initially retained Seale and Beers on August 7, 2009, but the firm did not perform any auditing or accounting services nor has it issued any audit or other reports on our financial statements. Accordingly, since we retained Seale and Beers, we had no disagreements with the firm, whether or not resolved, on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which, if not resolved to Seale and Beers’ satisfaction, would have caused it to make reference to the subject matter of the disagreement in connection with its report on our financial statements.
On September 28, 2009, we engaged Pritchett, Siler & Hardy, P.C. as our new independent certifying accountants. Our board of directors unanimously approved the engagement of Pritchett, Siler & Hardy. During the two most recent fiscal years and the interim periods preceding the engagement, we have not consulted Pritchett, Siler & Hardy regarding any of the matters set forth in Item 304(a)(2)(i) or (ii) of Regulation S-K.
Item 9A(T).
Item 9A(T).
Controls and Procedures.
Evaluation of Disclosures and Procedures
As of the end of the period covered by this annual report, our President, acting as both our chief executive officer and principal accounting officer, carried out an evaluation of the effectiveness of “disclosure controls and procedures,” as defined in the Securities Exchange Act of 1934, Rules 13a-15(e) and 15-d-15(e). Based upon that evaluation, it was concluded that as of December 31, 2009, our disclosure controls and procedures are effective to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is:
(i) recorded, processed, summarized and reported, within the time periods specified in the SEC's rules and forms; and
(ii) accumulated and communicated to management, including our chief executive officer and principal accounting officer, as appropriate, to allow timely decisions regarding required disclosure.
Management’s Annual Report on Internal Control Over Financial Reporting
Management is responsible for establishing and maintaining adequate internal control over financial reporting for our company. Our control system is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. generally accepted accounting principals. Our internal control over financial reporting includes those policies and procedures that :
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pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and disposition of our assets;
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provide reasonable assurance that the transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles and that receipts and expenditures are being made only with proper authorizations of management and directors; and
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provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of company assets that could have a material effect on the financial statements.
All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. Because of the inherent limitations of internal control, there is a risk that material misstatements may not be prevented or detected on a timely basis by internal control over financial reporting. However, these inherent limitations are known features of the financial reporting process. Therefore, it is possible to design into the process safeguards to reduce, though not eliminate, this risk.
Because of inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Management, including our President acting as both chief executive officer and principal accounting officer, assessed the effectiveness of our internal control over financial reporting as of December 31, 2009. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control Over Financial Reporting - Guidance for Smaller Public Companies. Based on our assessment and those criteria, management concluded that during the period covered by this report, our internal control and procedures over financial reporting was effective as of December 31, 2009.
This annual report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by our registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit us to provide only management’s report in this annual report.
Changes in Internal Control over Financial Reporting
During the period covered by this report, there was no significant change in our internal controls over financial reporting or in other factors that materially affected, or is reasonably likely to materially affect, our internal controls over financial reporting.
Item 9B.
Item 9B.
Other Information.
Not applicable.
PART III
Item 10.
Item 10.
Directors, Executive Officers and Corporate Governance.
Our executive officers and directors are as follows:
Name
Age
Position
Steven D. Moulton
President, Secretary / Treasurer and Director
Jacob Colby
Director
Claudia Moulton
Director
All directors hold office until the next annual meeting of stockholders and until their successors have been duly elected and qualified. There are no agreements with respect to the election of directors. We have not compensated directors for service on the board of directors or any committee thereof, but directors are entitled to be reimbursed for expenses incurred for attendance at meetings of the board and any committee of the board. However, directors may defer their expenses and/or take payment in shares of our common stock. As of the date hereof, no director has accrued any expenses or compensation. Officers are appointed annually by the board and each executive officer serves at the discretion of the board. We do not have any standing committees.
No director, officer, affiliate or promoter has, within the past five years, filed any bankruptcy petition, been convicted in or been the subject of any pending criminal proceedings, or is any such person the subject or any order, judgment, or decree involving the violation of any state or federal securities laws.
Our current directors have other employment and sources of income and will routinely devote only such time to our business as deemed necessary. It is estimated that our President will devote approximately 20 to 60 hours per month to corporate activities.
Currently, there is no arrangement, agreement or understanding between management and non-management stockholders under which non-management stockholders may directly or indirectly participate in or influence the management of our affairs. Present management openly accepts and appreciates any input or suggestions from stockholders. However, the board of directors is elected by the stockholders and the stockholders have the ultimate say in who represents them on the board. There are no agreements or understandings for any officer or director to resign at the request of another person and no current offer or director is acting on behalf of, or will act at the direction of any other person.
The business experience of the directors listed above during the past five years is as follows:
Steven D. Moulton became a director and Vice President of the company in January 1990 and became President and Secretary in April 2007. From August 1999 to March 2004, he served as Secretary/Treasurer and a director of Draco, Inc. and from September 2000 to the present, he has been Secretary/Treasurer of Jump' Jax, Inc., a subsidiary of Draco that was spun out to stockholders in December 2004 and was engaged in the childhood entertainment business of leasing inflatable balloon bounce houses in Southern Utah. Mr. Moulton graduated from Olympus High School in Salt Lake City, Utah in 1980. From 1984 to 1990, he served as a director and executive officer of several publicly-held development stage companies including Safron, Inc. (director and Vice President); Sagitta Ventures (director and President); Jasmine Investments (director and President); Java, Inc. (Secretary/Treasurer and director); and Onyx Holdings Corporation (director and President). From 1991 to 1994, Mr. Moulton was a director and President of Omni International Corporation, which is currently known as "Beachport Entertainment Corporation." From 1987 until 1991 he was President and director of Icon Systems, Inc. and served as Secretary/Treasurer of the same company until his resignation on December 24, 1998. From 1995 to July 1996, he served as director and Vice President of Wasatch International Corporation, formerly Java, Inc. From February 1996 until November, 1999 he served as the President and director of InsiderStreet.com, formerly Sierra Holding Group, Inc. Also since 1998, Mr. Moulton has managed his personal real estate properties through Excel Properties, LLC.
Jacob Colby, age 21, graduated from Olympus High School in Salt Lake City, Utah, in 2005. Mr. Colby worked for Excel Properties in Salt Lake City doing property management from June of 2005 until January 2006. He also worked at Hartvigsen School in Salt Lake City from January 2006 to June 2006. Mr. Colby spent two years in Switzerland doing Ecclesiastical work and is currently enrolled as a student at Salt Lake Community College. Mr. Colby is the stepson of the company’s President, Steven D. Moulton, and is Claudia Moulton’s son.
Claudia Moulton, age 48. Graduated from Highland High School in Salt Lake City, Utah, in 1980. She received a B.S. in Elementary Education from the University of Utah in 1987. Ms. Moulton was employed by Granite School District in Salt Lake City as an Elementary Teacher from 1987 to 1999. In 1999, she left her teaching position and has been a homemaker since that time. Ms. Moulton is the wife of our President, Steven D. Moulton.
Compliance With Section 16(a) of the Exchange Act
Section 16(a) of the Exchange Act requires our directors and executive officers, and persons who own more than 10% of our common stock, to file with the SEC initial reports of ownership and reports of changes in ownership of our common stock and other equity securities. Based on a review of filings made with the SEC, we believe that the requisite reports have been filed during the fiscal year 2009.
Code of Ethics
We currently do not have a code of ethics. During the current fiscal year, we do intend to adopt a code of ethics that applies to our principal executive officer, principal financial officer, principal accounting officer or controller or persons performing similar functions.
Item 11.
Item 11. Executive Compensation.
We have not had a bonus, profit sharing, or deferred compensation plan for the benefit of employees, officers or directors. We have not paid any salaries or other compensation to officers, directors or employees for the years ended December 31, 2009 and 2008. We expect that directors will defer any compensation until such time as we realize sufficient revenues to pay such compensation. As of the date hereof, no person has accrued any compensation.
On April 16, 2007, following the resignations of Ronald Moulton as a director, President and CEO, and of Vallerie Moulton as a director and Secretary, we entered into Consulting Agreements with each person for a term of three years each. Under the agreements, Mr. Moulton was to provide consulting services related to the production and marketing of our products and act as an advisor to our management. He was to be compensated at the rate of $20.00 per hour for his services and be reimbursed for expenses related to his services. Mrs. Moulton was to oversee production of products and consult with management in connection with marketing and strategic planning. She was to be compensated at the rate of $20.00 per hour for her services and be reimbursed for expenses related to her services. Both agreements were subsequently terminated without any services being provided. Presently, we use the services of both Mr. and Mrs. Moulton on an as-needed basis. During 2009, their services were contributed to the company and they did not receive any compensation.
Except as disclosed above, we have not entered into any other employment agreement with any officer, director or any other person and no such agreements are anticipated in the immediate future. It is intended that directors will defer any compensation until such time as business operations provide sufficient cash flow to provide for salaries. As of the date hereof, no person has accrued any compensation.
Item 12.
Item 12.
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.
The following table sets forth information, to the best of our knowledge, as of April 14, 2010, with respect to each person known by us to own beneficially more than 5% of the outstanding common stock, each director and all directors and officers as a group.
* Director and/or executive officer
Note:
Unless otherwise indicated, we have been advised that each person above has sole voting power over the shares indicated above.
(1) Based upon 2,250,000 shares of common stock outstanding on April 14, 2010.
Item 13.
Item 13. Certain Relationships and Related Transactions, and Director Independence.
There have been no material transactions during the past two fiscal years between our company and any officer, director, nominee for election as director, or any stockholder owning greater than five percent (5%) of our outstanding shares, nor any member of the above referenced individuals' immediate families.
None of our directors are deemed to be independent directors. We do not have a compensation, audit or nominating committee, rather those functions are carried out by the board as a whole.
Item 14.
Item 14.
Principal Accounting Fees and Services.
We do not have an audit committee and as a result our entire board of directors performs the duties of an audit committee. Our board of directors will approve in advance the scope and cost of the engagement of an auditor before the auditor renders audit and non-audit services. As a result, we do not rely on pre-approval policies and procedures.
Audit Fees
The aggregate fees billed by our former independent auditors, Moore & Associates, Chartered, for professional services rendered for the audit of our annual financial statements included in our annual report for the year ended December 31, 2008 and for the review of quarterly financial statements included in our quarterly reports during 2008, were $5,500. Moore & Associates also billed $1,500 for the review of our quarterly financial statements included in our quarterly reports during 2009. Our other former independent auditors Seal and Beers, CPAs did not bill us for services in 2009.
Pritchett, Siler & Hardy, P.C., our new auditors as of October 2009, billed us $1,500 for the review of quarterly financial statements included in our quarterly report for September 30, 2009.
Audit Related Fees
For the year ended December 31, 2009 and 2008, there were no fees billed for assurance and related services by our former auditors, Moore & Associates and Seale and Beers, or our current auditors Pritchett, Siler & Hardy, relating to the performance of the audit of our financial statements which are not reported under the caption "Audit Fees" above.
Tax Fees
For the years ended December 31, 2009 and 2008, no fees were billed by our former auditors, Moore & Associates and Seale and Beers, or our current auditors Pritchett, Siler & Hardy, for tax compliance, tax advice and tax planning.
We do not use Pritchett, Siler & Hardy for financial information system design and implementation. These services, which include designing or implementing a system that aggregates source data underlying the financial statements or generates information that is significant to our financial statements, are provided internally or by other service providers. We do not engage Pritchett, Siler & Hardy to provide compliance outsourcing services.
The board of directors has considered the nature and amount of fees billed by Pritchett, Siler & Hardy and believes that the provision of services for activities unrelated to the audit is compatible with maintaining Pritchett, Siler & Hardy’s independence.
PART 1V
Item 15.
Item 15. Exhibits, Financial Statement Schedules
(a)
Exhibits
*
Previously filed as an Exhibit to the Form 10-SB filed December 19, 2005.
**
Filed previously as exhibit to Form 8-K filed April 20,
ROCKY MOUNTAIN FUDGE COMPANY, INC.
(A Development Stage Company)
FINANCIAL STATEMENTS
December 31, 2009
CONTENTS
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Board of Directors
Rocky Mountain Fudge Company, Inc.
Salt Lake City, Utah
We have audited the accompanying balance sheets of Rocky Mountain Fudge Company, Inc. [a development stage company] as of December 31, 2009 and 2008 and the related statements of operations, stockholders' equity (deficit) and cash flows for each of the years in the two-year period ended December 31, 2009 and for the period from inception on January 4, 1990 through December 31, 2009. Rocky Mountain Fudge Company, Inc.’s management is responsible for these financial statements. 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 includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide 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 Rocky Mountain Fudge Company, Inc. as of December 31, 2009 and 2008 and the results of its operations and its cash flows for each of the years in the two-year period ended December 31, 2009 and for the period from inception on January 4, 1990 through December 31, 2009, in conformity with accounting principles generally accepted in the United States of America.
The accompanying financial statements have been prepared assuming Rocky Mountain Fudge Company, Inc. will continue as a going concern. As discussed in Note 2 to the financial statements, Rocky Mountain Fudge Company, Inc. has incurred losses since its inception and has not yet established profitable operations. These factors raise substantial doubt about the ability of the Company to continue as a going concern. Management’s plans in regards to these matters are also described in Note 2. The financial statements do not include any adjustments that might result from the outcome of these uncertainties.
PRITCHETT, SILER & HARDY, P.C.
Salt Lake City, Utah
April 15,
ROCKY MOUNTAIN FUDGE COMPANY, INC.
(A Development Stage Company)
Consolidated Balance Sheets
The accompanying notes are an integral part of these consolidated financial statements.
ROCKY MOUNTAIN FUDGE COMPANY, INC.
(A Development Stage Company)
Consolidated Statements of Operations
The accompanying notes are an integral part of these consolidated financial statements.
ROCKY MOUNTAIN FUDGE COMPANY, INC.
(A Development Stage Company)
Consolidated Statements of Stockholders' Equity (Deficit)
The accompanying notes are an integral part of these consolidated financial statements.
ROCKY MOUNTAIN FUDGE COMPANY, INC.
(A Development Stage Company)
Consolidated Statements of Stockholders' Equity (Deficit)
The accompanying notes are an integral part of these consolidated financial statements.
ROCKY MOUNTAIN FUDGE COMPANY, INC.
(A Development Stage Company)
Consolidated Statements of Cash Flows
The accompanying notes are an integral part of these consolidated financial statements.
ROCKY MOUNTAIN FUDGE COMPANY, INC.
(A Development Stage Company)
Notes to the Consolidated Financial Statements
December 31, 2009 and 2008
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
a. Business and Organization
Rocky Mountain Fudge Company, Inc. (The Company) was organized on January 4, 1990, under the laws of the State of Utah to engage in the business of making and selling fudge candy (dba Vallerie's Country Candy, Inc.) Pursuant to Statement of Accounting Standards Codification (ASC) Topic 915, "Accounting and Reporting by Development Stage Enterprises," the Company is classified as a development stage company. On August 9, 1992, the Company changed its name to RV&S Enterprises, Inc. On July 28, 1998, the Company again changed its name to Rocky Mountain Fudge Company, Inc. and commenced sales of candy products over the internet and through direct sales.
In order to relocate its domicile, the Company created a new wholly-owned subsidiary in the State of Nevada under the name of Rocky Mountain Fudge Company, Inc. The Nevada corporation has the same capitalization as the Company; 50 million shares of common stock, par value $0.001 per share. The Company and the newly formed Nevada entity then executed an Agreement and Plan of Merger for the sole purpose of changing the Company's domicile to Nevada. As a result of the merger transaction, the Utah corporation was merged with and into the Nevada corporation, with the Nevada entity being the survivor. Each Company stockholder was entitled to exchange their shares of common stock in the Utah entity for the same number of shares in the Nevada entity, adjusted for the five-for-one forward stock-split.
Following the change of domicile, the Company incorporated a new wholly-owned subsidiary in the State of Utah under the name of Wasatch Candy Company, Inc., d.b.a. Vallerie's Country Candy, into which the Company transferred certain cash and assets and through which the Company will operate its candy business.
The Company's financial statements are prepared using the accrual method of accounting. The Company has elected a December 31 year-end.
b. Revenue Recognition
Revenues from the sale of candy products are recognized upon delivery and acceptance by the customer, and when collectability is reasonably assured.
c. Basic Loss Per Share
The computation of basic loss per share of common stock is based on the weighted average number of shares outstanding during the period.
ROCKY MOUNTAIN FUDGE COMPANY, INC.
(A Development Stage Company)
Notes to the Consolidated Financial Statements
December 31, 2009 and 2008
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
d. Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America 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 reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
e. Income Taxes
Deferred taxes are provided on a liability method whereby deferred tax assets are recognized for deductible temporary differences and operating loss and tax credit carryforwards and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.
Net deferred tax assets consist of the following components as of December 31, 2009 and 2008:
The income tax provision differs from the amount of income tax determined by applying the U.S. federal and state income tax rates of 39% to pretax income from continuing operations for the years ended December 31, 2009 and 2008 due to the following:
At December 31, 2009, the Company had net operating loss carryforwards of approximately $166,951 that may be offset against future taxable income through 2029. No tax benefit has been reported in the December 31, 2009 financial statements since the potential tax benefit is offset by a valuation allowance of the same amount. Due to the change in ownership provisions of the Tax Reform Act of 1986, net operating loss carry forwards for Federal income tax reporting purposes are subject to annual limitations. Should change in ownership occur, net operating loss carryforwards may be limited as to use in future years.
ROCKY MOUNTAIN FUDGE COMPANY, INC.
(A Development Stage Company)
Notes to the Consolidated Financial Statements
December 31, 2009 and 2008
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
f. Principles of Consolidation
The accompanying financial statements include the accounts of Rocky Mountain Fudge Company, Inc. and its wholly-owned subsidiary, Wasatch Candy Company, Inc. All inter-company transactions have been eliminated in the consolidation.
g. Advertising Costs
The Company’s policy regarding advertising is to expense advertising when incurred. The Company had not incurred any advertising expense as of December 31, 2009 and 2008.
h. Inventory
The Company accounts for inventory of raw materials and finished goods on a cost basis. The inventory is maintained on a first in- first out (FIFO) basis. The Company’s inventory was $-0- as of December 31, 2009 and 2008.
i. Stock-based Compensation
As of December 31, 2009, the Company has not issued any share-based payments to its employees.
The Company adopted SFAS No. 123-R (ASC Topic 718) effective January 1, 2006 using the modified prospective method. Under this transition method, stock compensation expense includes compensation expense for all stock-based compensation awards granted on or after January 1, 2006, based on the grant-date fair value estimated in accordance with the provisions of SFAS No. 123-R.
j. Recent Accounting Pronouncements
During the year ended December 31, 2009, the Company adopted the following accounting pronouncements:
In May 2009, the FASB issued FAS 165, “Subsequent Events” (ASC Topic 855). This pronouncement establishes standards for accounting for and disclosing subsequent events (events which occur after the balance sheet date but before financial statements are issued or are available to be issued). FAS 165 requires an entity to disclose the date subsequent events were evaluated and whether that evaluation took place on the date financial statements were issued or were available to be issued. It is effective for interim and annual periods ending after June 15, 2009. The adoption of FAS 165 did not have a material impact on the Company’s financial condition or results of operation.
ROCKY MOUNTAIN FUDGE COMPANY, INC.
(A Development Stage Company)
Notes to the Consolidated Financial Statements
December 31, 2009 and 2008
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
j. Recent Accounting Pronouncements
In June 2009, the FASB issued FAS 166, “Accounting for Transfers of Financial Assets” an amendment of FAS 140 (ASC Topic 860). FAS 140 is intended to improve the relevance, representational faithfulness, and comparability of the information that a reporting entity provides in its financial statements about a transfer of financial assets: the effects of a transfer on its financial position, financial performance , and cash flows: and a transferor’s continuing involvement, if any, in transferred financial assets. This statement must be applied as of the beginning of each reporting entity’s first annual reporting period that begins after November 15, 2009. The Company does not expect the adoption of FAS 166 to have an impact on the Company’s results of operations, financial condition or cash flows.
In June 2009, the FASB issued FAS 167, “Amendments to FASB Interpretation No. 46(R)” (ASC Topic 810). FAS 167 is intended to (1) address the effects on certain provisions of FASB Interpretation No. 46 (revised December 2003), Consolidation of Variable Interest Entities, as a result of the elimination of the qualifying special-purpose entity concept in FAS 166, and (2) constituent concerns about the application of certain key provisions of Interpretation 46(R), including those in which the accounting and disclosures under the Interpretation do not always provided timely and useful information about an enterprise’s involvement in a variable interest entity. This statement must be applied as of the beginning of each reporting entity’s first annual reporting period that begins after November 15, 2009. The Company does not expect the adoption of FAS 167 to have an impact on the Company’s results of operations, financial condition or cash flows.
In June 2009, the FASB issued FAS 168, “The FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles” (ASC Topic 105). FAS 168 will become the source of authoritative U.S. generally accepted accounting principles (GAAP) recognized by the FASB to be applied by nongovernmental entities. Rules and interpretive releases of the Securities and Exchange Commission (SEC) under authority of federal securities laws are also sources of authoritative GAAP for SEC registrants. On the effective date of this Statement, the Codification will supersede all then-existing non-SEC accounting and reporting standards. All other nongrandfathered non-SEC accounting literature not included in the Codification will become nonauthoritative. This statement is effective for financial statements issued for interim and annual periods ending after September 15, 2009.The Company does not expect the adoption of FAS 168 to have an impact on the Company’s results of operations, financial condition or cash flows.
ROCKY MOUNTAIN FUDGE COMPANY, INC.
(A Development Stage Company)
Notes to the Consolidated Financial Statements
December 31, 2009 and 2008
NOTE 2 - GOING CONCERN
The Company's financial statements are prepared using accounting principles generally accepted in the United States of America applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has not yet established an ongoing source of revenues sufficient to cover its operating costs and allow it to continue as a going concern. The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable. If the Company is unable to obtain adequate capital, it could be forced to cease operations.
In order to continue as a going concern, the Company will need, among other things, additional capital resources. Management's plans to obtain such resources for the Company include (1) obtaining capital from management and significant shareholders sufficient to meet its minimal operating expenses, and (2) seeking out and completing a merger with an existing operating company. However, management cannot provide any assurances that the Company will be successful in accomplishing any of its plans.
The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plans described in the preceding paragraph and eventually secure other sources of financing and attain profitable operations. The accompanying financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.
NOTE 3 - EQUITY TRANSACTIONS
As of December 2007, the Board of Directors of the Company voted in favor of a five-for-one reverse stock split of the Company’s common stock. The reverse stock split became effective in February 2008. All references to common stock presented within these financial statements have been retroactively restated so as to reflect this reverse stock split as if it had occurred at Company’s inception.
NOTE 4 - RELATED PARTY TRANSACTIONS
During the year ended December 31, 2009, the Company received cash advances from an officer and director totaling $20,000. The advances accrue interest at 10% per annum, are unsecured and due upon demand. The Company owes $1,007 and $228 in accrued interest on the advances at December 31, 2009 and 2008, respectively.
The Company’s officers contribute their services without compensation. The Company has recorded an expense of $1,000 and $32,950 for these services contributed to the Company during the years ended December 31, 2009 and 2008, respectively.
NOTE 5 - SUBSEQUENT EVENTS
The Company has evaluated subsequent events from the balance sheet date through the date the financial statements were issued and has determined that there are no items to disclose.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
Signature
Title
Date
April 15, 2010
/S/ Steven D. Moulton
President, C.E.O. and director
Steven D. Moulton
Principal Financial Officer
Principal Accounting Officer
April 15, 2010
/S/ Jacob Colby
Director
Jacob Colby
April 15, 2010
/S/ Claudia. Moulton
Director
Claudia Moulton