SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2013
OR
[ ] TRANSITION REPORT UNDER SECTION 13 OF 15(d) OF THE EXCHANGE ACT OF 1934
From the transition period from ___________ to ____________.
Commission File Number 333-138111
GLOBAL CONDIMENTS, INC.
(Exact name of small business issuer as specified in its charter)
Nevada | 27-1458154 | |
(State or other jurisdiction of incorporation or organization) | (IRS Employer Identification No.) |
415 East Calder Way, State College, Pennsylvania 16801
(Address of principal executive offices)
(814) 237-0134
(Issuer's telephone number)
N/A
(Former name, former address and former fiscal year, if changed since last report)
Indicate by check mark whether the registrant (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 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 [ ].
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:
Large Accelerated Filer [ ] | Accelerated Filer [ ] | |
Non-Accelerated Filer [ ] | Smaller Reporting Company [X] |
Indicate by a check mark whether the company is a shell company (as defined by Rule 12b-2 of the Exchange Act: Yes [ ] No [ X ].
Indicate by check mark whether the registrant has submitted electronically and posted on its website, if any, every Interactive File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (SS325.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files), Yes [ ] No [X ]
As of August 19, 2013, there were 7,581,736 shares of Common Stock of the issuer outstanding.
1 |
TABLE OF CONTENTS
PART I FINANCIAL STATEMENTS | ||
Item 1 | Consolidated Financial Statements | 3 |
Item 2 | Management’s Discussion and Analysis or Plan of Operation | 8 |
PART II OTHER INFORMATION | ||
Item 1 | Legal Proceedings | 11 |
Item 2 | Changes in Securities | 11 |
Item 3 | Default upon Senior Securities | 11 |
Item 4 | Submission of Matters to a Vote of Security Holders | 11 |
Item 5 | Other Information | 11 |
Item 6 | Exhibits | 11 |
2 |
GLOBAL CONDIMENTS, INC. | ||||||||
CONSOLIDATED BALANCE SHEETS | ||||||||
(Unaudited) | ||||||||
June 30, | December 31, | |||||||
ASSETS | 2013 | 2012 | ||||||
Current Assets |
| |||||||
Cash | $ | 63,785 | $ | 100,246 | ||||
Accounts Receivable, net | 3,873 | 6,712 | ||||||
Other Current Assets | 2,858 | — | ||||||
Total Current Assets | 70,516 | 106,958 | ||||||
Fixed Assets, net of accumulated depreciation of $7,304 and $6,898, respectively | — | 406 | ||||||
TOTAL ASSETS | $ | 70,516 | $ | 107,364 | ||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
Current Liabilities | ||||||||
Accounts Payable – Related Party | $ | 14,466 | $ | 5,895 | ||||
Accounts Payable – Trade | 1,929 | 9,841 | ||||||
Total Current Liabilities | 16,395 | 15,736 | ||||||
TOTAL LIABILITIES | 16,395 | 15,736 | ||||||
Stockholders’ Equity | ||||||||
Preferred Stock, $0.001 par value, 20,000,000 authorized, | ||||||||
-0- issued and outstanding at June 30, 2013 and December 31, 2012 | — | — | ||||||
Common Stock, $0.001 par value, 50,000,000 authorized, | ||||||||
7,581,736 issued and outstanding at June 30, 2013 and December 31, 2012 | 7,582 | 7,582 | ||||||
Additional Paid-in-capital | 336,320 | 336,320 | ||||||
Accumulated Deficit | (289,781 | ) | (252,274 | ) | ||||
Total Stockholders’ Equity | 54,121 | 91,628 | ||||||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | 70,516 | $ | 107,364 | ||||
See accompanying notes to unaudited consolidated financial statements. |
3 |
GLOBAL CONDIMENTS, INC. CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2013 AND 2012 (Unaudited) |
Three Months Ended | Six Months Ended | |||||||||||||||
June 30, 2013 | June 30, 2012 | June 30, 2013 | June 30, 2012 | |||||||||||||
Revenue | $ | 20,346 | $ | 28,829 | $ | 33,261 | $ | 49,659 | ||||||||
Cost of Revenues | 17,958 | 19,705 | 27,589 | 38,500 | ||||||||||||
Gross Profit | 2,388 | 9,124 | 5,672 | 11,159 | ||||||||||||
Operating Expenses: | ||||||||||||||||
Depreciation and Amortization | — | 609 | 406 | 1,218 | ||||||||||||
Selling and Advertising Expenses | 3,859 | 585 | 10,550 | 2,610 | ||||||||||||
General and Administrative | 20,142 | 33,211 | 32,267 | 52,666 | ||||||||||||
Total Operating Expenses | 24,001 | 34,405 | 43,223 | 56,494 | ||||||||||||
Operating Loss | (21,613 | ) | (25,281 | ) | (37,551 | ) | (45,335 | ) | ||||||||
Other Income | ||||||||||||||||
Interest Income | 17 | 173 | 44 | 248 | ||||||||||||
Total Other Income | 17 | 173 | 44 | 248 | ||||||||||||
Net Loss | $ | (21,596 | ) | $ | (25,108 | ) | $ | (37,507 | ) | $ | (45,087 | ) | ||||
Basic and Diluted Loss per share | $ | (0.00 | ) | $ | (0.00 | ) | $ | (0.00 | ) | $ | (0.01 | ) | ||||
Weighted Average Shares Outstanding: | ||||||||||||||||
Basic and Diluted | 7,581,736 | 7,581,736 | 7,581,736 | 7,581,736 |
See accompanying notes to consolidated financial statements.
4 |
GLOBAL CONDIMENTS, INC. | ||||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||
FOR THE SIX MONTHS ENDED JUNE 30, 2013 and 2012 (Unaudited) | ||||||||
June 30, | June 30, | |||||||
2013 | 2012 | |||||||
CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||
Net Loss | $ | (37,507 | ) | $ | (45,087 | ) | ||
Adjustments to reconcile net loss to net cash | ||||||||
used by operating activities: | ||||||||
Depreciation Expense | 406 | 1,218 | ||||||
Changes in operating assets and liabilities: | ||||||||
Accounts Receivable, net | 2,839 | (3,814 | ) | |||||
Other Current Assets | (2,858 | ) | (13,549 | ) | ||||
Accounts Payable – Related Party | 8,571 | 2,569 | ||||||
Accounts Payable | (7,912 | ) | 5,569 | |||||
NET CASH USED IN OPERATING ACTIVITIES | (36,461 | ) | (53,094 | ) | ||||
NET CHANGE IN CASH AND CASH EQUIVALENTS | (36,461 | ) | (53,094 | ) | ||||
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD | 100,246 | 169,371 | ||||||
CASH AND CASH EQUIVALENTS AT END OF PERIOD | $ | 63,785 | $ | 116,277 | ||||
SUPPLEMENTAL DISCLOSURES | ||||||||
Cash Paid During the Period for Interest Expense | $ | — | $ | — | ||||
Cash Paid During the Period for Taxes | $ | — | $ | — | ||||
See accompanying notes to unaudited consolidated financial statements. |
5 |
GLOBAL CONDIMENTS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2013
(Unaudited)
NOTE 1 – NATURE OF ACTIVITIES
Nature of Activities, History and Organization:
Global Condiments, Inc. (The “Company” or "GLOBAL") operates as an internet wholesaler and retailer of mustard, salsa and other food products. The Company is located in State College, Pennsylvania and was incorporated on September 17, 2009 under the laws of the State of Nevada.
Global Condiments, Inc., is the parent company of Herlocher Foods Online, L.L.C., (“HFO”), a company incorporated under the laws of the State of Pennsylvania. HFO was established on March 2, 2007 and for the past two and a half years has been operating from their offices in State College, PA.
GLOBAL was formed in order to acquire 100% of the outstanding membership interests of HFO. On September 17, 2009, GLOBAL issued 7,000,000 shares of common stock in exchange for a 100% equity interest in HFO. As a result of the share exchange, HFO became the wholly owned subsidiary of GLOBAL, and the former members of HFO owned a majority of the voting stock of GLOBAL. The transaction was regarded as a reverse merger whereby HFO was considered to be the accounting acquirer as its members retained control of GLOBAL after the exchange, although GLOBAL is the legal parent company. The share exchange was treated as a recapitalization of GLOBAL. As such, HFO (and its historical financial statements) is the continuing entity for financial reporting purposes. The financial statements have been prepared as if HFO had always been the reporting company and, on the share exchange date, changed its name and reorganized its capital stock.
Basis of Presentation and Consolidation:
The accompanying unaudited interim consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States and applicable Securities and Exchange Commission (“SEC”) regulations for interim financial information. These consolidated financial statements are unaudited and, in the opinion of management, include all adjustments (consisting of normal recurring accruals) necessary to make the consolidated financial statements not misleading, and to present fairly the balance sheets, statements of operations and statements of cash flows for the periods presented in accordance with accounting principles generally accepted in the United States. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States have been condensed or omitted pursuant to SEC rules and regulations. It is presumed that users of this interim consolidated financial information have read or have access to the audited consolidated financial statements and footnote disclosure for the preceding fiscal year. Operating results for the interim periods presented are not necessarily indicative of the results that may be expected for the year ending December 31, 2013. Notes to the consolidated financial statements which would substantially duplicate the disclosure contained in the audited consolidated financial statements for the most recent fiscal year ended December 31, 2012 as reported in form 10-K have been omitted.
Going Concern
At June 30, 2013, the Company has limited revenues and cash flows. As such, the accompanying financial statements have been prepared assuming that the Company will continue as a going concern. The Company does not have sufficient working capital for its planned activities, which raises substantial doubt about its ability to continue as a going concern.
Continuation of the company as a going concern is dependent upon obtaining additional working capital and the management of the Company will accomplish this objective through short-term loans from related parties and additional equity investments, if necessary, which will enable the Company to continue operations for the coming year.
Recently Issued Accounting Pronouncements:
The Company does not expect the adoption of recently issued accounting pronouncements to have a significant impact on the Company’s results of operations, financial position or cash flow.
6 |
GLOBAL CONDIMENTS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2013
(Unaudited)
NOTE 2 – RELATED PARTY TRANSACTIONS
Under a contract with the Company beginning January 1, 2008, Herlocher Foods, Inc. (a company that Mr. Herlocher is a part owner) provides general office space and administrative support at 2-6% of gross sales. For the six months ended June 30, 2013 and 2012 the amounts charged were $983 and $1,490, respectively.
The Company currently purchases all of their products from Herlocher Foods, Inc. In the six months ended June 30, 2013 and 2012 the amounts purchased were $27,055 and $38,493, respectively. The Company does not have a written supplier / distributor agreement with Herlocher Foods, Inc., nor is the Company an exclusive distributor.
On September 30, 2009 the Company signed a contract with Herlocher Foods, Inc. to provide management services at a cost of up to $5,000 per month, depending on activity, beginning October 1, 2009. This agreement can be cancelled by either party with a 30 day written notice. Total management services expenses for the six months ended June 30, 2013 and 2012 were $0 and $0.
During the six months ended June 30, 2013, the Company paid $12,679 to Yorkdale Capital, and its affiliates, who are related parties, for services provided.
NOTE 3 – MAJOR CUSTOMERS
The Company has over 150 customers and has one that is greater than 10% of the total revenue. For the six months ended June 30, 2013, the Company sold $19,167 to Giant Eagle Grocery Stores, or 58% of the Company’s revenues. For the six months ended June 30, 2012, the comparable sales to Giant Eagle were $33,843 or 68% of the Company’s revenues.
NOTE 4- SUBSEQUENT EVENTS
At the time of this filing there were no reportable subsequent events.
7 |
Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS
General
U.S. e-commerce sales in 2012 were $224.5 billion a 15%+ increase versus 2011 (source: U.S. Department of Commerce, http://www.census.gov/retail/mrts/www/data/pdf/ec_current.pdf). Global Condiments (GLOBAL) continues to try and tap this growing retail segment and although sales are down $16,398, or 33%, versus a year ago, the Company experienced an increase in sales Q2 versus Q1 and continues to aggressively market its products.
Employees
We currently employ one employee, the President, who is not compensated.
RESULTS FOR THE SIX MONTHS ENDED June 30, 2013 and 2012
Our quarter ended on June 30, 2013. Any reference to the end of the fiscal quarter refers to the end of the third quarter for the period discussed herein.
REVENUE. Revenue for the three months ended June 30, 2013 was $20,346 compared to $28,829 for the three month period ended June 30, 2012.
The decrease in revenue in the three month period ended June 30, 2013 of $8,483 is mainly due to decreased sales to Giant Eagle of about $8,100. The volume decrease was 26% and the revenue decrease was 29%. Mustard volume sales were down 25% and revenue 28%. Salsa volume sales were down 16% and revenue 26%. Mustard accounted for 99% of the sales for the three months ended June 30, 2013.
Revenue for the six months ended June 30, 2013 was $33,261 compared to $49,659 for the six month period ended June 30, 2012.
The decrease in revenue in the six month period ended June 30, 2013 of $16,398 is due to decreased sales to Giant Eagle of about $14,760. The volume decrease was 30% and the revenue decrease was 33%. Mustard volume sales were also down 30% and revenue 33%. Salsa volume sales were down 42% and revenue 52%. Mustard accounted for 99% of the sales for the six months ended June 30, 2013.
GROSS PROFIT. Gross profit for the three months ended June 30, 2013 was $2,388 compared to $9,124 for the three months ended June 30, 2012. Margins decreased in the three months ended June 30, 2013 versus 2012 from 32% to 12%. The decrease is attributable to unfavorable product mix.
Gross profit for the six months ended June 30, 2013 was $5,672 compared to $11,159 for the six months ended June 30, 2012. Margins decreased in the six months ended June 30, 2013 versus 2012 from 23% to 17%. The decrease is attributable to unfavorable product mix.
OPERATING EXPENSES. Total operating expenses for the three months ended June 30, 2013 were $24,001 compared to $34,405 for the three months ended June 30, 2012. Depreciation expense included in the operating expense was $0 and $609 for the three months ended June 30, 2013 and 2012, respectively.
The decrease of approximately $10,404 in the three months ended June 30, 2013 is attributed to lower professional fees of about $9,300.
Total operating expenses for the six months ended June 30, 2013 were $43,223 compared to $56,494 for the six months ended June 30, 2012. Depreciation expense included in the operating expense was $406 and $1,218 for the six months ended June 30, 2013 and 2012, respectively.
The decrease of approximately $13,271 in the six months ended June 30, 2013 is attributed to lower professional fees of $16,400, general office expenses of about $3,400 and partially offset by an increase in marketing and advertising of about $7,300.
NET LOSS. Net loss for the three months ended June 30, 2013 was $21,956 compared to a loss of $25,108 for the three month period ended June 30, 2012.
8 |
Net loss for the six months ended June 30, 2013 was $37,507 compared to a loss of $45,087 for the six month period ended June 30, 2012.
LIQUIDITY AND CAPITAL RESOURCES. The Company reviews its capital needs on both a short term and long term basis..
Trends, events or uncertainties impact on liquidity:
The Company expects revenue trends to improve toward the holiday and sports seasons. Off-peak periods will be financed, if needed, through shareholder advances.
In addition to the preceding, the Company plans for liquidity needs on a short term and long term basis as follows:
Short Term Liquidity:
We believe our cash balance affords us adequate short term liquidity. We anticipate we will need additional capital to continue our business operations. We have historically financed our operations through equity financing. We do not have any commitments for equity funding at this time. As such there is no assurance that we can raise additional capital from external sources, the failure of which could cause us to curtail operations.
Long Term Liquidity:
The long term liquidity needs of the Company are projected to be met primarily through the cash flow provided by operations.
Capital Resources
At the time of this filing the Company has no capital commitments.
Trends, events or uncertainties
The Company has not been in existence long enough and has limited sales data to determine whether sales fluctuations are truly a result of trends. The Company believes that sales will trend with promotions that typically follow the holiday and sports seasons. There are no other known events or uncertainties.
Material Changes in Financial Condition
WORKING CAPITAL: Working Capital for the six months ended June 30, 2013 decreased by $37,101 to $54,121, versus the year ended December 31, 2012 of $91,222. This decrease is primarily due the reduction of cash of approximately $36,500.
STOCKHOLDER’S EQUITY: Stockholder’s Equity for the six months ended June 30, 2013 decreased by $37,507 to $54,121 due to the net loss for the nine month period. Please see the section on ‘Results for the Quarter Ended June 30, 2013’ that discusses in more detail the reasons for the loss.
GOING CONCERN: The Company has limited operations and has working capital of $54,121 and an accumulated deficit of $289,781 as of June 30, 2013. Because of this accumulated deficit and limited operations, the Company may require additional working capital to survive. The Company intends to raise additional working capital either through private placements or bank loans or loans from management if there is need for liquidity to alleviate the substantial doubt to continuing as a going concern. There are no assurances that the Company will be able to do any of these. 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 cannot be generated, the Company may not be able to continue its operations. These factors raise substantial doubt about the Company’s ability to continue as a going concern.
9 |
Item 3: Quantitative and Qualitative Disclosures About Market Risk
Not applicable.
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
We carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of June 30, 2013. This evaluation was accomplished under the supervision and with the participation of our chief executive officer / principal executive officer, and chief financial officer / principal financial officer who concluded that our disclosure controls and procedures are not effective.
Based upon an evaluation conducted for the period ended June 30, 2013, our Chief Executive and Chief Financial Officer as of June 30, 2013 and as of the date of this Report, has concluded that as of the end of the periods covered by this report, we have identified the following material weakness of our internal controls:
• Reliance upon third party financial reporting consultants for review of critical accounting areas and disclosures and material non-standard transaction.
• Lack of sufficient accounting staff which results in a lack of segregation of duties necessary for a good system of internal control.
In order to remedy our existing internal control deficiencies, as our finances allow, we will hire additional accounting staff.
Changes in Internal Controls over Financial Reporting
There were no changes in our internal controls over financial reporting that occurred during the period covered by this report on Form 10-Q that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
10 |
PART II
Items No. 1, 2, 3, 4, 5 - Not Applicable.
Item No. 6 - Exhibits
(a) None
(b) Exhibits
Exhibit Number | Name of Exhibit | |
31.1 | Certification of Chief Executive Officer, pursuant to Rule 13a-14(a) of the Exchange Act, as enacted by Section 302 of the Sarbanes-Oxley Act of 2002. | |
31.2 | Certification of Chief Financial Officer, pursuant to Rule 13a-14(a) of the Exchange Act, as enacted by Section 302 of the Sarbanes-Oxley Act of 2002. | |
32.1 | Certification of Chief Executive Officer and Chief Financial Officer, pursuant to 18 United States Code Section 1350, as enacted by Section 906 of the Sarbanes-Oxley Act of 2002. | |
101 | XBRL |
SIGNATURES
In accordance with the requirements 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.
Global Condiments, Inc.
By /s/ Charles C. Herlocher
Charles C. Herlocher, Chief Executive Officer
and Chief Financial Officer
Date: August 16, 2013
11 |
EXHIBIT 31.1
CHIEF EXECUTIVE OFFICER CERTIFICATION
I, Charles C. Herlocher, certify that:
1. I have reviewed this quarterly report on Form 10-Q of GLOBAL CONDIMENTS, INC.
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this amended report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15 (e) and 15d-15(e) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusion about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any change to the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):
a) | all significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b) | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: August 16, 2013
/s/ Charles C. Herlocher
Charles C. Herlocher
President and Chief Executive Officer
EXHIBIT 31.2
CHIEF FINANCIAL OFFICER CERTIFICATION
I, Charles C. Herlocher, certify that:
1. I have reviewed this quarterly report on Form 10-Q GLOBAL CONDIMENTS, INC.
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this amended report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15 (e) and 15d-15(e) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusion about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any change to the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):
a) | all significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b) | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: August 16, 2012
/s/ Charles C. Herlocher
Charles C. Herlocher
Chief Financial Officer
EXHIBIT 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the quarterly report of GLOBAL CONDIMENTS, INC. (the “Company”) on Form 10-Q for the period ended June 30, 2013 as filed with the Securities and Exchange Commission (the “Report”), each of the undersigned, in the capacities and on the dates indicated below, hereby certifies pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
1. the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
2. the information contained in the Report fairly presents, in all material respects, the financial condition and results of operation of the Company.
Dated: August 16, 2013
/s/ Charles C. Herlocher
Name: Charles C. Herlocher
Title: Chief Executive Officer
Dated: August 16, 2013
/s/ Charles C. Herlocher
Name: Charles C. Herlocher
Title: Chief Financial Officer
Consolidated Statements of Operations (Unaudited) (USD $)
|
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2013
|
Jun. 30, 2012
|
Jun. 30, 2013
|
Jun. 30, 2012
|
|
Income Statement [Abstract] | ||||
Revenue | $ 20,346 | $ 28,829 | $ 33,261 | $ 49,659 |
Cost of Revenues | 17,958 | 19,705 | 27,589 | 38,500 |
Gross Profit | 2,388 | 9,124 | 5,672 | 11,159 |
Operating Expenses: | ||||
General and Administrative | 0 | 609 | 406 | 1,218 |
Selling and Advertising Expenses | 3,859 | 585 | 10,550 | 2,610 |
Depreciation and Amortization | 20,142 | 33,211 | 32,267 | 52,666 |
Total Operating Expenses | 24,001 | 34,405 | 43,223 | 56,494 |
Operating Loss | (21,613) | (25,281) | (37,551) | (43,335) |
Other Income | ||||
Interest Income | 17 | 173 | 44 | 248 |
Total Other Income | 17 | 173 | 44 | 248 |
Net Loss | $ (21,596) | $ (25,108) | $ (37,507) | $ (45,087) |
Basic and Diluted Loss per Share | $ 0.00 | $ 0.00 | $ 0.00 | $ (0.01) |
Weighted Average Shares Outsstanding: Basic and Diluted | 7,584,736 | 7,581,736 | 7,581,736 | 7,581,736 |
NOTE 2 Related Party Transactions (Details Narrative) (USD $)
|
6 Months Ended | |
---|---|---|
Jun. 30, 2013
|
Jun. 30, 2012
|
|
Notes to Financial Statements | ||
Admin Management Fees | $ 983 | $ 1,490 |
Related Party Purchases | 27,055 | 38,493 |
Management Fees | 0 | 0 |
Related Party Fees | $ 12,679 |
NOTE 1 Nature of Activities and Significant Accounting Policies
|
6 Months Ended |
---|---|
Jun. 30, 2013
|
|
Accounting Policies [Abstract] | |
NOTE 1 Nature of Activities and Significant Accounting Policies | Nature of Activities, History and Organization:
Global Condiments, Inc. (The Company or "GLOBAL") operates as an internet wholesaler and retailer of mustard, salsa and other food products. The Company is located in State College, Pennsylvania and was incorporated on September 17, 2009 under the laws of the State of Nevada.
Global Condiments, Inc., is the parent company of Herlocher Foods Online, L.L.C., (HFO), a company incorporated under the laws of the State of Pennsylvania. HFO was established on March 2, 2007 and for the past two and a half years has been operating from their offices in State College, PA.
GLOBAL was formed in order to acquire 100% of the outstanding membership interests of HFO. On September 17, 2009, GLOBAL issued 7,000,000 shares of common stock in exchange for a 100% equity interest in HFO. As a result of the share exchange, HFO became the wholly owned subsidiary of GLOBAL, and the former members of HFO owned a majority of the voting stock of GLOBAL. The transaction was regarded as a reverse merger whereby HFO was considered to be the accounting acquirer as its members retained control of GLOBAL after the exchange, although GLOBAL is the legal parent company. The share exchange was treated as a recapitalization of GLOBAL. As such, HFO (and its historical financial statements) is the continuing entity for financial reporting purposes. The financial statements have been prepared as if HFO had always been the reporting company and, on the share exchange date, changed its name and reorganized its capital stock.
Basis of Presentation and Consolidation:
The accompanying unaudited interim consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States and applicable Securities and Exchange Commission (SEC) regulations for interim financial information. These consolidated financial statements are unaudited and, in the opinion of management, include all adjustments (consisting of normal recurring accruals) necessary to make the consolidated financial statements not misleading, and to present fairly the balance sheets, statements of operations and statements of cash flows for the periods presented in accordance with accounting principles generally accepted in the United States. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States have been condensed or omitted pursuant to SEC rules and regulations. It is presumed that users of this interim consolidated financial information have read or have access to the audited consolidated financial statements and footnote disclosure for the preceding fiscal year. Operating results for the interim periods presented are not necessarily indicative of the results that may be expected for the year ending December 31, 2013. Notes to the consolidated financial statements which would substantially duplicate the disclosure contained in the audited consolidated financial statements for the most recent fiscal year ended December 31, 2012 as reported in form 10-K have been omitted.
Going Concern
At June 30, 2013, the Company has limited revenues and cash flows. As such, the accompanying financial statements have been prepared assuming that the Company will continue as a going concern. The Company does not have sufficient working capital for its planned activities, which raises substantial doubt about its ability to continue as a going concern.
Continuation of the company as a going concern is dependent upon obtaining additional working capital and the management of the Company will accomplish this objective through short-term loans from related parties and additional equity investments, if necessary, which will enable the Company to continue operations for the coming year.
Recently Issued Accounting Pronouncements:
The Company does not expect the adoption of recently issued accounting pronouncements to have a significant impact on the Companys results of operations, financial position or cash flow.
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NOTE 3 Major Customers
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6 Months Ended |
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Jun. 30, 2013
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Accounting Policies [Abstract] | |
NOTE 4 Major Customers | The Company has over 150 customers and has one that is greater than 10% of the total revenue. For the six months ended June 30, 2013, the Company sold $19,167 to Giant Eagle Grocery Stores, or 58% of the Companys revenues. For the six months ended June 30, 2012, the comparable sales to Giant Eagle were $33,843 or 68% of the Companys revenues. |
NOTE 3 Major Customers (Details Narrative) (USD $)
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6 Months Ended |
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Jun. 30, 2013
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Notes to Financial Statements | |
Giant Eagle Sales | $ 19,167 |
Giant Eagle percent | 58 |
NOTE 1 Nature of Activities and Significant Accounting Policies (Policies)
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6 Months Ended |
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Jun. 30, 2013
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Accounting Policies [Abstract] | |
Basis of Presentation and Consolidation: | Basis of Presentation and Consolidation:
The accompanying unaudited interim consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States and applicable Securities and Exchange Commission (SEC) regulations for interim financial information. These consolidated financial statements are unaudited and, in the opinion of management, include all adjustments (consisting of normal recurring accruals) necessary to make the consolidated financial statements not misleading, and to present fairly the balance sheets, statements of operations and statements of cash flows for the periods presented in accordance with accounting principles generally accepted in the United States. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States have been condensed or omitted pursuant to SEC rules and regulations. It is presumed that users of this interim consolidated financial information have read or have access to the audited consolidated financial statements and footnote disclosure for the preceding fiscal year. Operating results for the interim periods presented are not necessarily indicative of the results that may be expected for the year ending December 31, 2013. Notes to the consolidated financial statements which would substantially duplicate the disclosure contained in the audited consolidated financial statements for the most recent fiscal year ended December 31, 2012 as reported in form 10-K have been omitted. |
Recently Issued Accounting Pronouncements: | Recently Issued Accounting Pronouncements:
The Company does not expect the adoption of recently issued accounting pronouncements to have a significant impact on the Companys results of operations, financial position or cash flow. |
Consolidated Balance Sheets (Parenthetical) (USD $)
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Jun. 30, 2013
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Jun. 30, 2012
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Statement of Financial Position [Abstract] | ||
Preferred Stock Par Value | $ 0.001 | $ 0.001 |
Preferred Stock, Shares Authorized | 20,000,000 | 20,000,000 |
Preferred Stock, Shares Outstanding | 0 | 0 |
Common Stock Par Value | $ 0.001 | $ 0.001 |
Common Stock, Shares Authorized | 50,000,000 | 50,000,000 |
Common Stock, Shares Outstanding | 7,581,736 | 7,581,736 |
Consolidated Statements of Cash Flows (Unaudited) (USD $)
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6 Months Ended | |
---|---|---|
Jun. 30, 2013
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Jun. 30, 2012
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Statement of Cash Flows [Abstract] | ||
Net Loss | $ (37,507) | $ (45,087) |
Adjustments to reconcile net loss to net cash used by operating activities: | ||
Depreciation Expense | 406 | 1,218 |
Changes in Assets and Liabilities: | ||
Accounts Receivable | 2,839 | (3,814) |
Other Current Assets | (2,858) | (13,549) |
Accounts Payable - Related Party | 8,571 | 2,569 |
Accounts Payable - Trade | (7,912) | 5,569 |
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES | (36,461) | (53,094) |
NET CHANGE IN CASH AND CASH EQUIVALENTS | (36,461) | (53,094) |
CASH AND CASH EQUIVALENTS, BEGINING OF YEAR | 100,246 | 169,371 |
CASH AND CASH EQUIVALENTS, END OF PERIOD | 63,785 | 116,277 |
SUPPLEMENTAL DISCLOSURES | ||
Cash paid during the period for Interest Expense | 0 | 0 |
Cash paid during the period for Taxes | $ 0 | $ 0 |
Consolidated Balance Sheets (Unaudited) (USD $)
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Jun. 30, 2013
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Jun. 30, 2012
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ASSETS | ||
Cash | $ 63,785 | $ 100,246 |
Accounts Receivable, net | 3,873 | 6,712 |
Other Current Assets | 2,858 | 0 |
Total Current Assets | 70,516 | 106,958 |
Fixed Assets, net | 0 | 406 |
TOTAL ASSETS | 70,516 | 107,364 |
Current Liabilities | ||
Accounts Payable - Related Party | 14,466 | 5,895 |
Accounts Payable - Trade | 1,929 | 9,841 |
Total Current Liabilities | 16,395 | 15,736 |
TOTAL LIABILITIES | 16,395 | 15,736 |
Stockholder's Equity | ||
Preferred Stock, par value $0.001, 20,000,000 authorized, 0 issued and outstanding at March 31, 2012 and December 31, 2011 | 0 | 0 |
Common Stock, par value $0.001, 50,000,000 authorized, 7,581,736 and 7,581,736 issued and outsstanding at March 31, 2012 and December 31, 2011, respectively | 7,582 | 7,582 |
Additional Paid-in-Capital | 336,320 | 336,320 |
Accumulated Deficit | (289,781) | (252,274) |
Total Stockholder's Equity | 54,121 | 91,628 |
TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY | $ 70,516 | $ 107,364 |
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NOTE 2 Related Party Transactions
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6 Months Ended |
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Jun. 30, 2013
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Related Party Transactions [Abstract] | |
Related Party Transactions |
Under a contract with the Company beginning January 1, 2008, Herlocher Foods, Inc. (a company that Mr. Herlocher is a part owner) provides general office space and administrative support at 2-6% of gross sales. For the six months ended June 30, 2013 and 2012 the amounts charged were $983 and $1,490, respectively.
The Company currently purchases all of their products from Herlocher Foods, Inc. In the six months ended June 30, 2013 and 2012 the amounts purchased were $27,055 and $38,493, respectively. The Company does not have a written supplier / distributor agreement with Herlocher Foods, Inc., nor is the Company an exclusive distributor.
On September 30, 2009 the Company signed a contract with Herlocher Foods, Inc. to provide management services at a cost of up to $5,000 per month, depending on activity, beginning October 1, 2009. This agreement can be cancelled by either party with a 30 day written notice. Total management services expenses for the six months ended June 30, 2013 and 2012 were $0 and $0.
During the six months ended June 30, 2013, the Company paid $12,679 to Yorkdale Capital and its affiliates, who are related parties, for services provided. |
Document and Entity Information (USD $)
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6 Months Ended | |
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Jun. 30, 2013
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Aug. 19, 2013
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Document And Entity Information | ||
Entity Registrant Name | Global Condiments, Inc. | |
Entity Central Index Key | 0001478974 | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2013 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Is Entity a Well-known Seasoned Issuer? | No | |
Is Entity a Voluntary Filer? | No | |
Is Entity's Reporting Status Current? | Yes | |
Entity Filer Category | Smaller Reporting Company | |
Entity Public Float | $ 7,581,736 | |
Entity Common Stock, Shares Outstanding | 7,581,736 | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2013 |