Document/Exhibit Description Pages Size
1: 10KSB Form 10-Ksb 06/30/04 37 172K
2: EX-10.5 Letter Agreement Dated September 15, 2004... 2 9K
3: EX-31.1 Certification of CEO 2± 9K
4: EX-31.2 Certification of CFO 2± 9K
5: EX-32.1 Certification of CEO 1 7K
6: EX-32.2 Certification of CFO 1 7K
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-KSB
(Mark One)
X ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended June 30, 2004
TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
For the transition period from ______________ to________________
Commission file number 000-50104
JANE BUTEL CORPORATION
______________________________________________
(Name of small business issuer in its charter)
Florida 65-0327060
_______________________________ ___________________
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
400 Gold Ave, SW, Ste. 750
___________________________________________________
(Address of principal executive offices) (Zip Code)
(505) 314-0787
_________________________
Issuer's telephone number
Securities registered under Section 12(b) of the Exchange Act:
Name of each exchange
Title of each class on which registered
___________________ _____________________
None None
Securities registered under Section 12(g) of the Exchange Act:
Common Stock
________________
(Title of class)
Check whether the issuer (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 [ ]
Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B is not contained in this form, and no disclosure will be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB. [X]
State issuer's revenues for its most recent fiscal year. $189,237
State the aggregate market value of the voting and non-voting common equity held
by non-affiliates computed by reference to the price at which the common equity
was sold, or the average bid and asked price of such common equity, as of a
specified date within the past 60 days. $1,639,494 as of August 4, 2004.
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date. 22,720,750 shares of common stock are
outstanding as of 6/30/04.
DOCUMENTS INCORPORATED BY REFERENCE
None
Transitional Small Business Disclosure Format (Check one): Yes [ ]; No [X]
PART I
ITEM 1. DESCRIPTION OF BUSINESS.
History
We were incorporated in the State of Florida in April 1992 under the name
Institute for Strategic Business Development, Inc. to engage in the business of
providing business consulting, planning and counseling services to small and
medium sized businesses and as a resource center for business consultants. In
December 1996 we acquired Earth Labs, Inc., a health and beauty aid company, and
changed our name to Earth Labs, Inc. in January 1997. We cancelled the
acquisition of this company later in 1997 with the consent of the shareholders
of this company and the shares we issued were returned and cancelled. In January
1999 we acquired a majority interest in U'i Hawaii, Inc., a Hawaii corporation,
which was seeking to develop a line of skin care products. This company was
unable to bring any products to market due to insufficient working capital and
we sold it in 2002. In September 2002 we acquired Tex-Mex, Inc., a New Mexico
corporation. In October 2002 we changed our name to Jane Butel Corporation.
Our Business
Through our wholly-owned subsidiary, Tex-Mex, Inc., we offer products and
services promoting the cuisine and lifestyle of the Southwest, including the
Jane Butel Cooking School in Albuquerque, New Mexico and Jane Butel's
Southwestern Kitchen television show. We market Jane Butel's Southwestern
cookbooks and videos and are the exclusive distributor of Pecos Valley spices.
We plan to develop additional products and services such as a cooking club and
publishing division and to establish the Jane Butel brand as the premier source
of high quality information related to Southwestern cuisine and lifestyle.
We depend on the leisure travel market for a good portion of our revenues and do
not have a consistent record of profitable operations. We had a loss of $460,615
in the fiscal year ended June 30, 2004 compared to net loss of $167,603 for the
fiscal year ended June 30, 2003. Our independent auditor has modified its report
on our financial statements to express concern about our ability to survive as a
going concern.
Our corporate offices are located at 400 Gold Ave. SW, Suite 750, Albuquerque,
New Mexico 87102 and our telephone number is 505-314-0787.
Although mainstream Americans seeking new and different tastes have made a
number of ethnic or regional cuisines popular beyond their origins, in the late
1970's, the Southwestern taste was a distant third in popularity to Italian and
Oriental (now Asian) cooking. The signs of the increasing popularity of
Southwestern foods attracted Jane Butel's interest in the late 1970's while she
was Vice President of Corporate Marketing at American Express. At that time she
had already written the manuscript for her first Tex-Mex cookbook, which was
published in 1980. She had been frequently tapped by food makers Ortega and Old
El Paso for marketing assistance. She left her position with American Express in
1978 to establish Pecos Valley Spice Co. and to begin writing, consulting and
teaching Southwestern cooking. In 1983, she opened the first vacation
full-participation Southwestern cooking school in Santa Fe, New Mexico and moved
it to Albuquerque, New Mexico in 1993.
Jane has now written and published 16 Southwestern cookbooks and is currently
expanding Hotter Than Hell with a new publisher and starting a new regional
Mexican cookbook. The Jane Butel Cooking School has been cited as one of the
four best in the world by Bon Appetit magazine, with a circulation of 1,230,626
per month. As a result of frequent appearances on such national TV shows as The
Today Show, Good Morning America and Live! with Regis her status as an authority
on Southwestern lifestyles and cooking has been established. Jane now has her
own television series, "Jane Butel's Southwestern Kitchen", launched September
2002, with a three year distribution contract. One year contracts were signed to
start airing the show again on two additional networks, America One September 1,
2004 to August 31, 2005 and Altitude Sports Entertainment, September 1, 2004 to
August 31, 2005.
Southwestern foods are now reported to be the most popular taste in America,
according to Cahners Business Information in November 1999. In the U.S.,
tortillas now outsell all classes of breads--including muffins and bagels.
Margaritas outsell all other cocktails. The Grocery Manufactures of America
reported in December 1999 that salsa is the second most popular condiment
(ketchup is number one) and grossed $1.6 billion in 1999, an increase of 196%
over 1983. Part of this popularity can be attributed to the healthful aspects of
salsas, tortillas and Southwestern foods in general. The increased popularity of
Southwestern foods may not impact our revenues.
Our objective is to become a leading supplier of products, services and
information related to Southwestern cuisine and lifestyle. Principal elements of
our strategy include the following:
o Expand awareness of the "Jane Butel" brand name as the premiere
source of high quality information and products related to the
Southwestern lifestyle and cuisine.
o Leverage the "Jane Butel" brand name across a range of products and
services related to the Southwestern lifestyle.
o Expand our current services and products and introduce new ones on a
timely basis.
We currently generate revenues from the following sources:
o Tuition from our cooking school programs
o Sale of Jane Butel cookbooks and videos
o Sale of Pecos Valley Spice Co. products which include spices and
utensils for Southwestern recipes, cooking kits, and other
Southwestern cooking products.
Our product sales are made at the cooking school, on our web sites and through
our mail order catalog. We also sell Jane Butel cookbooks through commercials
and promotions associated with our television shows.
Our Cooking School Programs
The Jane Butel Southwestern Cooking School has a variety of programs to teach
Southwestern cuisine preparation. We have programs for both amateurs and the
more experienced cooks. However, we are not a professional culinary arts
training school and our programs are not designed to train professional chefs.
Our courses teach both the history and techniques of Southwestern cuisine.
Our cooking school is located in the La Posada Hotel in Albuquerque, New Mexico,
which has been designated as a National Historic Landmark. We also use our
cooking school location as the production studio for our television programs.
Our courses include a week long program which is ideal for those attending our
cooking school in conjunction with a vacation. The class meets six hours each
day for five days for hands on instruction and two evenings when the class dines
together at local restaurants in Albuquerque.
Luncheon consists of the dishes prepared by the students each morning. The class
includes preparation of classic dishes as well as newer innovations and low-fat
methods. The advanced week long class is designed for the more serious cook and
features preparation of more complicated recipes in subjects such as menu
planning, party presentation, Southwestern ingredients, low-fat versions of
Southwestern favorites, plating and presentation and recipe development and
construction.
Our weekend course begins with a cocktail reception Friday evening followed by a
four hour full participation class and six hour sessions on the following
Saturday and Sunday.
A satellite weekend school is contracted with the Fairmont Princess Resort in
Scottsdale, Arizona where regional Mexican cuisine will be taught. These schools
are scheduled starting November.
Single day classes are offered in such subjects as culinary techniques and more
specialized techniques covering a single subject such as sauces, meats and
vegetables. Traditional New Mexican cooking, Southwestern grilling, Quick and
Easy and Lite cooking are also offered. We also teach the University of New
Mexico Continuing Education full participation classes. We also offer "lunch and
learn" programs which are demonstration programs rather than full participation
programs.
The following table sets forth the fees for the major programs we offer:
Course Days Tuition
______ ____ _______
Full Participation week long 5 $2100, includes 5 nights lodging
based on double occupancy
Full Participation weekend 3 $1100, includes 3 nights lodging
based on double occupancy
Day class 1 $ 350
week long or weekend
Full participation session 1 $ 150
Demonstration classes 1 $40 to $55, depending on class
All of our programs require payment in full prior to taking the course. We do
not offer financial aid.
Our school features six cooking areas so we can accommodate up to 18 students in
each of our full participation courses. In our full participation courses each
student can produce each of our recipes since there are no more than three
students at each of our fully equipped cooking areas. Our demonstration programs
can accommodate up to 50 students.
Additional programs
Besides our regularly scheduled courses, we also offer private group courses,
team building classes, visiting chef demonstrations and culinary tours. Our week
long courses are particularly geared towards vacationers seeking both
instruction in Southwestern cooking and sightseeing in Albuquerque and Sante Fe.
Because our classes are offered in the morning, this leaves time for such
additional activities.
Retail sales
Jane Butel has authored 16 books on Southwestern cooking which are available for
sale at our cooking school and our world wide website on the Internet. We
purchase these books at author's discount from the publishers who are
unaffiliated with Jane Butel Corporation. The retail area at the cooking school,
which we call the Pantry features pure Pecos Valley Spice Co., chiles, herbs,
spices, corn products, and hard-to-find equipment and gadgets for Southwestern
cooking. Native pottery, Southwestern serving dishes and ready to eat items such
as salsas are also stocked as well as the Jane Butel videos. Also we sell our
food products, cookbooks and cooking videos at our website www.janebutel.com and
www.pecosvalley.com.
Jane Butel Cooking Videos
We have produced and offer for sale 12 videos each of which features preparation
of Southwestern traditional menus. Information about Southwestern culture and
history is presented along with preparation of the featured recipes. Each video
is sold for $19.95 and the entire video collection is available for $199.95.
They can be purchased at the school or on our web site. We pay the production
company 10% of our revenues from sales of the videos until we have paid a total
of $12,000.
Jane Butel's Southwestern Kitchen TV Series
Cooking shows have proven to be a popular staple on television, particularly the
Public Broadcasting System stations, since the pioneering efforts of Julia
Child. More recently, cable television networks have begun to offer food related
programs, including at least one full time food channel and a number of
lifestyle channels which feature food programs along with other offerings.
Jane Butel's Southwestern Kitchen TV series was developed after requests from
public TV stations for Jane to do a show. The series features Jane's friendly,
approachable style - proven successful in the over 4 million cookbooks she has
sold and the reviews she received when the show was tested in Texas, Florida,
North Carolina and Pennsylvania. Thirty shows have been completed and are in
distribution.
The series was distributed first to America 1 Network, a 24 hour broadcast
network that provides western and equestrian lifestyle based programming to over
130 broadcast affiliate stations across the U.S. and streaming video on its
Internet site, starting December 1, 2001. PBS began airing the show September 7,
2002 and is currently availble to 14% of the U.S. population - with four of the
top 20 markets showing it.
We are responsible for the cost of producing the series and own all the rights
to the shows. Under our agreement with America 1 Network, we receive 50% of
revenues from advertising after payment of sales commissions and agency fees
from sale of five minutes of commercial time on each half-hour show. Two minutes
of commercial time are provided the affiliate station airing the show. We and
the America 1 Network can sell the commercial time to sponsors and we coordinate
bookings to avoid conflicts. We have not received any revenues from American 1
Network as of the date hereof.
For the PBS Network, we have signed a distribution agreement with Association
for Community Television on behalf of PBS station KUHT of Houston, Texas. KUHT
acts as the presenting station of our show and offers it to other PBS stations.
We are responsible for certain costs of promotion to the other PBS stations such
as press kits and station relations. Commercial time is not generally sold on
PBS stations. Rather, we offer a special edition of "Jane Butel's Southwestern
Kitchen" cookbook through a toll-free telephone number. We pay KUHT $3.00 for
each book sold until it has received $10,000 and then $1.50 until it has
received a total of $30,000. KUHT will also receive 5% of the per book price
which it remits to American Public Television. As of August 31, 2004, we have
sold 844 cookbooks through this program.Public television stations may show the
series for three years from the first release. We also pay $2.00 per book to a
non-affiliated lender to pay off a loan of $100,000 which we borrowed for
production of the TV series. We have agreed to pay an aggregate of $400,000 on
such loan. We also pay $5.00 per book to pay a total of two loans, a demand note
for $13,750 and a note for $13,250. To date, the Company has paid $30,000.
In February 2003, we filmed a single show for the Food Network, a cable TV
network. This show has aired on the Food Network a number of times.
Plans for the future
We have plans to introduce new products and services in an effort to leverage
the "Jane Butel" brand name across a range of products and services related to
the Southwestern lifestyle. Our ability to introduce the following products and
services is dependent upon our securing additional working capital. We have no
definitive financing arrangements to obtain working capital for such projects.
Even if we are successful in introducing one or more of the following projects
into the marketplace, there can be no assurance that they will result in
revenues or profits to us.
Proposed New PBS Television Series
We are negotiating a production contract for a new PBS series to feature more
history and Southwestern color with KNME, the largest New Mexico PBS station and
KUHT (PBS Houston), the presenting station. It is anticipated a new series will
be filmed in Spring, 2005, which would air Fall, 2005, with a target audience of
70% of US population.
Additional locations for our Cooking School
We are planning to offer our cooking school programs in Santa Fe, New Mexico and
other destination resorts.
We are initiating our first satellite cooking school in November, 2004, at the
Fairmont Princess Resort in Scottsdale, AZ, where their La Hacienda restaurant
is the only four diamond Mexican restaurant in the country. The format will be
changed to feature regional Mexican cuisine and will be a two-session school.
The first evening will feature a tasting of regional Mexican food as presented
in the La Hacienda.
Jane Butel's Southwestern Cooking Club
Our proposed Cooking Club will offer kits on a subscription basis to be sent
every other month. Kits will start with a Jane Butel Cooking Video and the
ingredients to create the recipes in a video. For example, the Bowl O' Red video
will be coupled with the hard-to-find chiles, comino and blue corn flour--enough
to feed a party of 30 or to create several meals at home. We believe that this
program can join other successful subscription-based clubs and kits which are
currently available in such areas as gardening, wine, coffee and other food
products.
Do-it-yourself kits are a growing business nationwide. Martha Stewart Omnimedia
is known to be successful at selling millions of home decorating kits.
Jane Butel's Southwestern Cooking Club will explore other venues such as,
children's cooking clubs, pet owner's clubs and clubs for other special interest
groups.
Publishing Division
We plan to establish a publishing division to secure publishing contracts from
major publishers, such as the Berkeley Publishing Group and Harmony, a division
of Random House, both of which have published Jane's books and have requested
more Jane Butel titles to publish. We are planning a series of cookbooks. Single
subject books as well as specialty and "favorites" cookbooks are being developed
from books and booklets Jane Butel has written but which are now out of print.
The cookbooks will take advantage of Butel's easy-to-follow style and
popularity. Six of Jane's cookbooks have sold over 100,000 (each) copies, which
confers "best-seller" status. The expanded visibility from the television show
and increased publicity from the overall expansion of the business is projected
to attract publishers and book buyers.
Pecos Valley Spice Co.
Pecos Valley Spice Co. founded in 1978 by Jane Butel offers pure, highest
quality chiles, herbs, spices and hard-to-find ingredients and tools for
Southwestern cooking. Products are offered for retail sale through "The Pantry"
at the Cooking School and by mail order through the "Cookalog" and on the
Internet. An exclusive distribution agreement has been developed between Jane
Butel Corporation and Pecos Valley Spice for the production and marketing of
Pecos Valley's products. Under such agreement, Jane Butel Corporation is the
exclusive distributor for Pecos Valley Spice Company and purchases products at
wholesale prices which we sell at the Pantry on the Internet and by catalog.
Consumer interest in Southwestern food products is strong and continues to grow
as evidenced by The Internet Food Channel report in 1999 that states, "The
continued national interest in bold, regional American flavors (such as
Southwest, Cajun and Creole) by chefs, cookbook authors and consumers has helped
the condiment and spicy-foods market to grow like wildfire in recent years." We
believe Pecos Valley Spice Co. will benefit from this shift in American food
habits. Pecos Valley plans a line of finished foods to include salsa and snack
items. Kits, gift baskets and Southwestern seasoning mixes are also in
development.
We operate three Internet websites. They are for the Jane Butel Southwestern
Cooking School, Jane Butel's Southwestern Cooking Television show and Pecos
Valley Spice Co. We plan to expand them to increase marketing and sales as well
as develop more hyperlinks to related businesses.
Advertising and promotion
Our main method of promoting our products and services is through the continuing
publicity generated by the cooking school, television show, and personal
appearances of Jane Butel. Each person who has inquired about the school, the
products or the show is maintained in a data base for continuous marketing, as
well as the cross promotion of our various divisions, such as the offering of
books, classes and spices in conjunction with our television show.
Competition
All of our current and proposed operations compete with numerous other similar
enterprises, including other cooking schools, food-related television shows and
cookbooks. We believe that we can successfully compete based on the interest in
Southwestern cuisine and Jane Butel's energy in promoting awareness of
Southwestern cuisine and our products and services.
Employees
We currently have six full-time employees and two part-time employees.
ITEM 2. DESCRIPTION OF PROPERTY
Our teaching facilities are at the La Posada Hotel, our five year lease expired
in July 2002 and we are currently occupying the premises on a month-to-month
basis at a rental of $1,553.26 per month. We are seeking a larger facility for
the school and television set, a laboratory for teaching techniques classes and
for recipe and product development and space for all management to be housed in
one centralized facility, but there can be no assurance that such larger
facility will be available within our budget. If we lose our space at La Posada,
we believe we could replace it in nearby facilities at comparable rental.
In March 2004, the Company entered into a three year lease with the Simms
building for corporate office space. The premises consists of 3,684 sq ft at
$4500 per month.
ITEM 3. LEGAL PROCEEDINGS.
None
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
None.
PART II
ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.
The Company's common stock began trading over the counter on July 14, 2004 and
is quoted on the OTC Bulletin Board under the symbol "JBTL". There was no public
trading market during the two fiscal years ended June 30, 2004.
There are no restrictions on the payment of dividends. However we have not paid
any dividends and there is no present plan to do so.
As of Setpember 1, 2004 there were approximately 82 holders of record of our
common stock.
Equity Compensation Plan Information as of June 30, 2004.
The Company may make individual grants of its common stock or options or
warrants to purchase its common stock to pay employees, officers, directors,
consultants and advisors for services to the Company. The following table
summarizes information about outstanding equity compensation plans as of June
30, 2004.
[Enlarge/Download Table]
Number of Number of securities
securities to be remaining available for
issued upon Weighted-average future issuance under equity
exercise of exercise price of compensation plans
outstanding outstanding (excluding securities
options/warrants options/warrants reflected in column(a))
Plan Category (a) (b) (c)
_________________________ ________________ _________________ ____________________________
Equity compensation plans
approved by security
holders -0- -0- -0-
Equity compensation plans
not approved by
security holders 1,000,000 $.05 -0-
_________ ____
Total 1,000,000 $.05 -0-
__________________
Individual grants
Individual Grants
On November 1, 2003 we entered into a consulting agreement with James B.
Terrell, an affiliate of 21st Century Technologies, Inc., a shareholder. Under
the agreement, Mr. Terrell is to provide us with consulting services until
November 1, 2004. We agreed to pay Mr. Terrell for such services by issuing him
a warrant to purchase 1,000,000 shares of our common stock for $.05 per share,
which warrant will expire on November 1, 2004.
In 2004 we issued 100,000 shares of our common stock to our legal counsel as
compensation for legal services.
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.
The following discussion of our results of operations and liquidity and capital
resources should be read in conjunction with our Financial Statements and
related notes thereto appearing elsewhere.
Overview
Our major source of revenue is from our cooking school. The sale of books,
videos, and food products is a small portion of our revenue at the current time.
These additional revenue sources do serve to promote the cooking school and the
image of Jane Butel. We have not received any revenues from syndication or
licensing rights for broadcast of our television series but it is an important
promotional tool.
RESULTS OF OPERATIONS
YEAR ENDED JUNE 30, 2004 COMPARED TO JUNE 30, 2003
We had revenues of $220,748 during the fiscal year ended June 30, 2003 compared
to $189,237 for the fiscal year ended June 30, 2004. While revenue was
essentially flat, cost of sales increased from 38% of revenues in 2003 to 50% of
revenues in 2004.
Operating expenses increase 63% from $327,186 in 2003 to $534,275 in 2004.
Increased and other expenses included new office facilities. Payroll expenses
increased 205% from $53,583 in fiscal 2003 to $163,315 in fiscal 2004 due to
increased employee count in anticipation of growth initiatives. As a result we
had a net loss of $460,615 in fiscal 2004 compared to a net loss of $167,603 in
fiscal 2003.
LIQUIDITY AND CAPITAL RESOURCES
We have not had a consistent record of earnings and positive cash flow due to
several factors, including the general reduction in travel after 9/11/01 and the
investments we made in production of our videos, websites and television show
and additional overhead for facilities and personnel.
As of June 30, 2004, our liabilities were $613,246 and our assets were $304,140.
21st Century Technologies, Inc. is a closed end investment company which is
treated as a business development company under the Investment Company Act of
1940. 21st Century has provided us with working capital in the form of debt and
equity and we have also entered into business relationships with affiliates of
21st Century, including a consulting agreement with their Acting Chairman of the
Board.
We had an arrangement with 21st Century Technologies, Inc. under which we
received $215,489 in working capital between April 23 to September 4, 2004. We
issued them warrants convertible into our common stock on a formula based on the
market price 6 months from each advance. On Setpember 15, 2004, we entered into
an additional warrant purchase agreement with 21st Century.They are not
obligated to purchase any warrants under such agreement. We have no other
definitive financing arrangements and there can be no assurance that any new
capital would be available to us or that adequate funds for our operations
wither whether from our revenue or from new investors will be available when
needed or on terms satisfactory to us. The failure to obtain adequate additional
financing may require us to curtail or scale back some or all of our current
operations, and delay or eliminate our ability to introduce proposed new
products and services.
OBLIGATIONS AND COMMITMENTS
The following table reflects our contractual obligations and other commercial
commitments as of June 30, 2004. This table does not include trade payables and
other operating expenses not subject to written commitments such as salaries.
Payments Due By Period as of June 30, 2004
__________________________________________
Less Than
Total 1 Year 1-3 Years 4-5 Years
________________________________________________________________________________
Short-Term Debt $ 91,000 $ 91,000
________________________________________________________________________________
Long-Term Debt-
Related Party(1) $252,739 $252,739
Notes Payable $106,455
________________________________________________________________________________
Total Contractual
Obligations $450,194 $ 91,000 $106,455 $252,739
________________________________________________________________________________
(1) represents a note in the amount of $240,850 due to Jane Butel plus interest
RELATED PARTY TRANSACTIONS
We have a ten year agreement to be exclusive distributor of food and other
products produced by Pecos Valley Spice Co., which is owned by Jane Butel and
others. We are not required to purchase any minimum amount of product from Pecos
Valley and purchase only what we believe necessary to meet anticipated demand.
We pay Pecos Valley a fixed price for the products we purchase from them at a
level of 50% of our sales price. We hold a promissory note from Pecos Valley in
the amount of $12,894 which is due on demand or on June 30, 2003. We do not
charge interest on this note.
We owe Jane Butel $240,850 for money we borrowed from her. We issued a
promissory note payable on July 1, 2007 with interest at 6.97%.
Jane Butel and her spouse have each guaranteed $113,250 of our loans from
unaffiliated lenders which have been restructured after a default.
CRITICAL ACCOUNTING POLICIES AND ESTIMATES
The SEC has recently issued Financial Reporting Release No. 60, "Cautionary
Advice Regarding Disclosure About Critical Accounting Policies" ("FRR 60"),
suggesting companies provide additional disclosure and commentary on those
accounting policies considered most critical. A critical accounting policy is
one that is both very important to the portrayal of our financial condition and
results, and requires management's most difficult, subjective or complex
judgments. Typically, the circumstances that make these judgments difficult,
subjective and/or complex have to do with the need to make estimates about the
effect of matters that are inherently uncertain. We believe the accounting
policies below represent our critical accounting policies as contemplated by FRR
60.
Allowances for refunds and product returns. We may grant our customers the right
to return products which they do not find satisfactory. Upon sale, we evaluate
the need to record a provision for product returns based on our historical
experience, economic trends and changes in customer demand.
Allowances for doubtful accounts receivable. We maintain allowances for doubtful
accounts to cover uncollectible accounts receivable, and we evaluate our
accounts receivable to determine if they will ultimately be collected. This
evaluation includes significant judgments and estimates, including an analysis
of receivables aging and a customer-by-customer review for large accounts. If,
for example, the financial condition of our customers deteriorates resulting in
an impairment of their ability to pay, additional allowances may be required.
Provisions for inventory obsolescence. We may need to record a provision for
estimated obsolescence and shrinkage of inventory. Our estimates would consider
the cost of inventory, the estimated market value, the shelf life of the
inventory and our historical experience. If there are changes to these
estimates, provisions for inventory obsolescence may be necessary.
Value of long lived assets. We capitalize and amortize the costs incurred in
developing our television show and cooking videos. We also carry other long
lived assets on our balance sheet. We evaluate the carrying values of such
assets and may be required to reduce the value in the event we determine if the
value is impaired from the current carrying among.
Risk Factors
We have identified the following as the major risks facing our business.
WE HAVE NO FIRM ARRANGEMENTS OR SOURCES OF ADDITIONAL CAPITAL AND MAY HAVE
TO CURTAIL OUR OPERATIONS IF ADDITIONAL CAPITAL IS NEEDED BUT IS NOT AVAILABLE.
Although we had net income in fiscal 2002 we lost money in fiscal 2003 and
2004. If we were to continue to lose money due to reduced attendance at our
cooking school or increased expenses we would require additional capital to
maintain operations. There can be no assurance that we can obtain additional
capital if this pattern continues. We may have to curtail our operations if we
do not have sufficient funds to pay for the expenses of operating our business.
DEPENDENCE ON THE SERVICES AND IMAGE OF JANE BUTEL
Our operations are substantially reliant on the availability of the
services and image of Jane Butel. In the event she were unable to continue to
provide her services to us, we may not be able to continue our operations. We
have no employment contract with Jane Butel and do not have a life insurance
policy on her.
WE ARE DEPENDENT ON THE LEISURE TRAVEL MARKET
A number of our students attend our cooking school in conjunction with a
vacation. If the leisure travel market were to be disrupted due to economic
conditions or reluctance of people to travel due to hostilities or renewed
terrorism, our revenues would be reduced.
ITEM 7. FINANCIAL STATEMENTS.
JANE BUTEL CORPORATION
June 30, 2004
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Board of Directors
Jane Butel Corporation
I have audited the accompanying balance sheet of Jane Butel Corporation
("Company") as of June 30, 2004 and 2003 and the related statement of
operations, statement of stockholders' equity, and the statement of cash flows
for the twelve month period ended June 30, 2004 and 2003. These financial
statements are the responsibility of the Company's management. My responsibility
is to express an opinion on these statements based on my audit.
I conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that I plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. I believe that my audit provides a reasonable
basis for my opinion.
In my opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of the Company as of June 30, 2004 and
2003 and the results of its operations and its cash flows for the twelve month
period ended June 30, 2004 and 2003 in conformity with accounting principles
generally accepted in the United States.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. The Company has suffered recurring
losses from operations and negative working capital that raise substantial doubt
about its ability to continue as a going concern. This is further explained in
the notes to financial statements. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
Clyde Bailey P.C.
San Antonio, Texas
August 20, 2004
F-1
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JANE BUTEL CORPORATION
BALANCE SHEET
AS OF JUNE 30 2004
As of June 30
__________________________
2004 2003
_________ _________
A S S E T S
CURRENT ASSETS
Cash $ - $ 1,011
Inventory 17,456 27,044
Accounts Receivable net of allowance for bad debt 13,889 5,156
Accounts Receivable - related party - 12,894
_________ _________
Total Current Assets 31,345 46,105
FIXED ASSETS
Equipment 144,225 114,095
Leasehold Improvements 97,159 97,159
Accumulated Depreciation (209,015) (191,778)
_________ _________
Total Fixed Assets 32,369 19,476
OTHER ASSETS
Television Film Costs 170,633 240,862
Websites, net of amortization 22,178 48,252
Other Assets 5,900 -
Videos, net of amortization 41,715 59,593
_________ _________
Total Other Assets 240,426 348,707
_________ _________
Total Assets $ 304,140 $ 414,288
========= =========
L I A B I L I T I E S
CURRENT LIABILITIES
Cash Overdraft 636 -
Accounts Payable 77,511 72,745
Deferred Income 45,257 16,656
Other Current Liabilities 26,048 52,162
Notes Payable 91,000 155,000
Accrued Settlements Payable 13,600 30,199
_________ _________
Total Current Liabilities 254,052 326,762
LONG-TERM LIABILITIES
Notes Payable 106,455 -
Notes Payable - Related Party 252,739 244,098
_________ _________
Total Long-Term Liabilities 359,194 244,098
-
_________ _________
Total Liabilities 613,246 570,860
Commitments and Contingencies - -
S T O C K H O L D E R S ' E Q U I T Y
Preferred Stock - -
2,500,000 authorized shares, $1.00 par value
none issued
Common Stock 22,721 22,621
50,000,000 authorized shares, $.001 par value
22,720,750 and 22,620,750 shares issued and outstanding
Additional Paid-in-Capital 355,549 47,568
Accumulated Deficit (687,376) (226,761)
_________ _________
Total Stockholders' Equity (Deficit) (309,106) (156,572)
_________ _________
Total Liabilities and Stockholders' Equity 304,140 414,288
========= =========
The accompanying notes are integral part of the consolidated financial statements.
F-2
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JANE BUTEL CORPORATION
STATEMENT OF OPERATIONS
For the Year Ending June 30
______________________________
2004 2003
___________ ___________
REVENUES:
Revenues $ 189,237 $ 220,748
___________ ___________
Total Revenues $ 189,237 $ 220,748
EXPENSES:
Cost of Sales 111,749 83,670
Payroll Expenses 163,315 53,583
Occupancy Costs 42,680 19,713
Professional Fees 51,002 36,852
Interest Expense 29,472 32,193
Impairment Loss 17,878 24,199
Depreciation and Amortization Expense 117,410 102,722
Operating Expenses 133,002 57,924
___________ ___________
Total Expenses 666,508 410,856
Net Loss from Operations $ (477,271) $ (190,108)
OTHER INCOME AND EXPENSES:
Barter Revenue $ 16,656 $ 39,104
Other Expenses - (16,599)
___________ ___________
Total Other Income and Expenses $ 16,656 $ 22,505
Net loss before taxes $ (460,615) $ (167,603)
=========== ===========
PROVISION FOR INCOME TAXES:
Income Tax Benefit/(Expense) - -
___________ ___________
Net Loss $ (460,615) $ (167,603)
Basic Loss Per Common Share (0.02) (0.01)
___________ ___________
Diluted Loss Per Common Share (0.02) (0.01)
___________ ___________
Weighted Average number of Common Shares 22,670,750 22,168,335
used in basic per share calculations =========== ===========
The accompanying notes are integral part of the consolidated financial statements.
F-3
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JANE BUTEL CORPORATION
STATEMENT OF STOCKHOLDERS' EQUITY
$.001 par value Paid-In Deficit Stockholders'
Shares Common Stock Capital Accumulated Equity
__________ _______________ ________ ___________ _____________
Balance, June 30, 2001 21,820,750 21,821 (13,821) (71,130) (63,130)
__________ ________ ________ _________ __________
Issuance of Shares for Services 100,000 100 61,389 - 61,489
Net Income (Loss) 11,972 11,972
__________ ________ ________ _________ __________
Balance, June 30 2002 21,920,750 21,921 47,568 $ (59,158) $ 10,331
Stock Issued 700,000 700 700
Net Loss (167,603) (167,603)
__________ ________ ________ _________ __________
Balance, June 30 2003 22,620,750 $ 22,621 $ 47,568 $(226,761) $ (156,572)
========== ======== ======== ========= ==========
Warrants Issued 103,081 103,081
Contribution to Capital 200,000 200,000
Stock Issued 100,000 100 4,900 5,000
Net Loss (460,615) (460,615)
__________ ________ ________ _________ __________
Balance, June 30 2003 22,720,750 $ 22,721 $355,549 $(687,376) $ (309,106)
========== ======== ======== ========= ==========
The accompanying notes are integral part of the consolidated financial statements.
F-4
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JANE BUTEL CORPORATION
STATEMENT OF CASH FLOWS
For the Year Ended June 30
_______________________________
2004 2003
__________ __________
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Loss $ (460,615) $ (167,603)
Changes in operating assets and liabilities:
Depreciation Expense 17,237 26,582
Amortization Expense 96,303 76,140
Impairment Loss 17,878 24,199
Stock Issued for Services 5,000 700
(Increase)/Decrease Account Receivable (8,733) 3,661
(Increase)/Decrease Account Receivable Related Party 12,894 -
Increase in Inventory 9,587 (3,662)
(Increase)/Decrease Prepaid Expenses (5,900) -
Television Film Costs - (13,095)
Accrued Settlements Payable (16,599) 16,599
Deferred Revenue 28,601 (39,104)
increase/(Decrease) Accounts Payable 4,765 46,871
Increase/(Decrease) in Other Current Liablities (26,114) 7,413
__________ __________
Total Adjustments 134,919 146,304
__________ __________
Net Cash Used in Operating Activities $ (325,696) $ (21,299)
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital Expenditures (30,130) -
__________ __________
Net Cash Used in Investing Activities $ (30,130) $ -
CASH FLOWS FROM FINANCING ACTIVITIES:
Note Payable (4,301) 25,000
Notes Payable Related Parties 8,647
Contribution to Capital 200,000
Warrants Sold 153,081
Notes Payabl Related Parties (3,248) -
__________ __________
Net Cash Provided from Financing Activities $ 354,179 $ 25,000
__________ __________
Net Increase (Decrease) in Cash $ (1,647) $ 3,701
Cash Balance, Begin Period 1,011 $ (2,690)
__________ __________
Cash Balance, End Period $ (636) $ 1,011
========== ==========
Supplemental Disclosures:
Cash Paid for interest $ 13,787 $ 17,190
Cash Paid for income taxes $ - $ -
Non Cash Transactions:
Reduction in Other Current Liabilities - Stock Issuance $ - $ 61,389
Barter Revenue 16,656 22,560
Stock Issued for Services 700 100
$ 17,356 $ 84,049
The accompanying notes are integral part of the consolidated financial statements.
F-5
JANE BUTEL CORPORATION
NOTES TO FINANCIAL STATEMENTS
AS OF JUNE 30, 2004
NOTE 1- BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
ORGANIZATION
Jane Butel Corporation ("the Company") (formerly Earth Labs Inc.) was
incorporated under the laws of the State of Florida in April 1992 as the
Institute for Strategic Business Development, Inc. for the purpose of promoting
and carrying on any lawful business for which a corporation may be incorporated
under the laws of the State of Florida. The company has a total of 52,500,000
authorized shares with a par value of $.001 per share and with 22,720,750 common
shares issued and outstanding as of June 30, 2004. The Company has designated
2,500,000 as preferred stock and 50,000,000 as common stock. There is no
preferred stock outstanding as of June 30, 2004. Both classes of stock have a
par value of $.001. The fiscal year-end will be June 30.
BASIS OF PRESENTATION
On August 26, 2002, the Company entered into a Share Exchange Agreement with
Tex-Mex Inc. (Tex-Mex), a New Mexico Corporation whereby Jane Butel exchanged
all of her shares in Tex-Mex Inc. for 13,512,450 shares of the Company. Jane
Butel now owns 60% of the Company. The exchange agreement will be accounted for
in a recapitalization of a subsidiary for accounting purposes and the assets and
liabilities being recorded at their net equity value. Although the Share
Exchange Agreement did not occur until August 26, 2002, these financial
statements have been retroactively restated to reflect the merger in the June
30, 2004 financial statements.
USE OF ESTIMATES
The preparation of financial statements in conformity with generally accepted
accounting principles 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.
PRINCIPLES OF CONSOLIDATION
The consolidated financial statements include the accounts of the Company and
its sister company Jane Butel Corporation a New Mexico corporation
(incorporation date: March 17, 2000). All significant inter-company transactions
have been eliminated in consolidation.
TELEVISION SERIES PRODUCTION
The company incurred costs in the production and the development of a television
series. These costs, including costs of production, have been capitalized in
accordance with Statement of Position 00-2 "Accounting by Producers or
Distributors of Films." These capitalized costs are amortized using the
individual film forecast method whereby capitalized costs are amortized in the
proportion that the current year's revenues from the series bears to
management's estimated revenues to be received from all sources for the series.
The Company is using these television series masters for a public television
series as well as airing on America One. The Contract for PBS was signed in
April 2002 for a three year period and started running on public television
stations September 7, 2002. The Company will track sales from the television
series of books and other items. The America One Contract began on December 1,
2001 and extends for two years. Revenue and costs forecasts for television
series are regularly reviewed by management and revised when warranted by
changing market conditions. Unamortized production costs are compared to fair
value for each reporting period. If estimated gross revenue is not sufficient to
recover the unamortized production costs, the unamortized production costs are
written down to their fair values. Amortization expenses have been recorded
F-6
JANE BUTEL CORPORATION
NOTES TO FINANCIAL STATEMENTS
AS OF JUNE 30, 2004
since the series began airing in September 2002. Accordingly, these costs will
be amortized in related future periods with revenues that are generated in
accordance with SOP 00-2. Since the current contract for exhibition with PBS is
for three years, management's estimate of ultimate revenues (which represents
the net present value of the ulitmate revenues ) is based upon a three year
forecast of the book sales, and other sales (i.e. classes, spices and pantry
items,) attributable to the series. The ratio of increased sales to management's
estimate of ultimate revenues will be applied to the remaining unamortized TV
series production costs. Management has estimated the ultimate revenues to be
three hundred and sixty seven dollars ($367,944). The ultimate revenues are
calculated based on expected increase of revenues in the amount of $503,432 over
a three year period and has been discounted at the rate of 15%. Based upon this
estimate of ultimate revenues the company will recognize amortization of
television production costs in future periods as follows:
Year Ended June 30: 2005
______________________ ______
Projected Amortization 65,393
Unamortized Balance 74,117
Per SOP 00-2.53, if the accumulative amortization at the end of the three year
period fails to meet the 80 percent requirement, the company will increase its
amortization expense in the fourth year to meet an amortization level of eighty
percent.
The company has adopted an impairment policy which identifies two events which
would trigger the recognition of an impairment loss: (1) the cancellation of the
PBS Contract, or (2) the projected sales falls significantly below (more than
25%) management projections. Given the occurrence of either event management
will considered this asset impaired and will recognize an impairment loss of the
unamortized production cost.
PBS CONTRACT
On April 1 2002 the Company entered into an agreement with the Association for
Community Television (ACT) on behalf of KUHT/Houston PBS in which KUHT will act
as the exclusive presenting station for the distribution of thirty (30)
thirty-minute (30:00) videotaped television programs on southwestern cooking. As
producer, the company is responsible for the timely production and delivery to
KUHT of each program in the series in the form of final master tapes and the
securing of releases including but not limited to talent music, location,
photographic or footage releases in a form satisfactory to KUHT. The Company has
met all these requirements and the shows started airing on September 7, 2002.
The company is required to pay to KUHT (presenter) a thirty thousand dollar fee
($30,000) fee based upon the sale of the special version of "Jane Butel's
Southwestern Kitchen" cookbook. The company is obligated to pay three dollars
($3.00) per cookbook until KUHT receives ten thousand dollars ($10,000) and one
dollar and fifty cents ($1.50) per cookbook until KUHT has received the balance
of the thirty thousand ($30,000) presenter fee. The company is also obligated to
pay an additional five percent (5%) of the net cost of each cookbook or 5% of
$22.00 or $1.10 to KUHT which will then be remitted to American Public
Television (APT). The series started running in September 2002.
AMERICA ONE Contract
On December 1, 2002, a distribution contract went into effect enabling the
network to run the 30 shows of Jane Butel's Southwestern Kitchen for a period of
F-7
JANE BUTEL CORPORATION
NOTES TO FINANCIAL STATEMENTS
AS OF JUNE 30, 2004
two years on a joint venture basis. They were to supply 50% of all advertising
revenue. To date they have sold none and have been put on notice that the
contract will not be renewed if no revenue is realized before the contract
renewal 90 days prior to December 1, 2003, or by August 1, 2003.
VIDEOS
The company has capitalized costs associated with the production of 12 cooking
video's averaging 40 minutes in length and has amortized these costs using the
individual film forecast method whereby expense is recognized in proportion to
the current years in accordance with Statement of Position 00-2 "Accounting by
Producers or Distributors of Films". The Company has evaluated the carrying
value of these assets and has determined that the fair value of the film is less
than the unamortized film cost and a 30% reduction should be recorded based on
the statement of operations. The Company has also evaluated the net realizable
value and obsolescence exposure of the videos. There are no participation costs
associated with these videos.
The company has adopted its impairment and amortization policy based upon SOP
00-2 and has estimated the ultimate revenue based upon cooking club video sales
for future periods (five years). Management has estimated the ultimate revenue
resulting from video sales for a five year period to be approximately six
hundred and eighty nine thousand dollars ($689,238 i.e. the net present value
discounted at 15% for future cash flows).The ratio of actual sales to the
ultimate estimated revenue will then be applied to the unamortized balance of
video costs. If actual sales fall below expected amounts, the company will
adjust the amount of amortized video expense to meet the 80% requirement as
specified in SOP 00-2. The following table presents the expected amortization to
recognize in future periods:
Year Ended June 30: 2005 2006 2007
___________________ ______ ______ ______
Amortization 12,638 11,061 9,010
Unamortized Bal. 44,803 33,742 24,732
Management recognized an impairment loss of $17,878 and $24,199 for the year
ending June 30, 2004 and 2003, respectively which was based upon sales not
meeting projected sales figures for 2002. Management's impairment policy has
identified three events that would trigger an additional impairment loss: (1)
the cancellation of the current PBS contract, (2) failure to meet projected
sales figures from the sale of videos, (3) higher attrition of cooking club
membership than the projected 25% rate. Given the occurrence of any of these
three events, management will recognize an impairment loss of the unamortized
balance of the production costs.
IMPAIRMENT OF LONG-LIVED ASSETS
The Company follows SFAS No. 144, "Accounting for Impairment or Disposal of
Long-Lived Assets for the fiscal year ended June 30, 2003. The Statement
requires that an impairment loss be recognized when the carrying value of long
lived assets (asset group) exceeds its fair value for long-lived assets,
liabilities and certain identifiable intangibles to be held and used by an
entity be reviewed for impairment whenever events or changes in circumstances
indicate that the carrying amount of an asset may not be recoverable.
F-8
JANE BUTEL CORPORATION
NOTES TO FINANCIAL STATEMENTS
AS OF JUNE 30, 2004
Under SFAS No 144, the Company considered long-lived assets consisting primarily
of property and equipment and note receivable, website, videos, and other
assets. The assets not covered by SFAS 144 that are included in an asset group
are adjusted in accordance with other applicable accounting standards prior to
testing the asset group for recoverability. The recoverability of long-lived
assets is evaluated at the operating unit level by an analysis of operating
results and consideration of other significant events or changes in the business
environment. If an operating unit has indications of impairment, such as current
operating losses, the Company will evaluate whether impairment exists on the
basis of undiscounted expected future cash flows from operations before interest
for the remaining amortization period. If impairment exists, the carrying amount
of the long-lived assets is reduced to its estimated fair value.
In August 2001, the FASB issued Statement of Financial Accounting Standards No.
144, Accounting for the Impairment or Disposal of Long-Lived Assets which
addresses financial accounting and reporting for the impairment or disposal of
long-lived assets and supersedes SFAS No. 121, Accounting for the Impairment of
Long-Lived Assets and Long-Lived Assets to be Disposed of, and the accounting
and reporting provisions of APB Opinion No. 30, Reporting the Results of
Operations for a Disposal of a Segment of a Business. The Company was required
to adopt SFAS 144 in the first quarter of 2002 and the Company does not expect
the adoption SFAS 144 to have a material effect on the Company's financial
statements. The asset groups not covered by SFAS 144 that are included in an
asset group are adjusted in accordance with other applicable accounting
standards prior to testing the asset group for recoverability. The Company has
categorized all of its long-lived assets as being held and used and not to be
sold.
ACCOUNTING METHOD
The Company's financial statements are prepared using the accrual method of
accounting. Revenues are recognized when services and products have been
completed and delivered and expenses when incurred on the related services and
products. The major sources of revenue are the three and five day schools. The
Company requires an advance registration and payment prior to the start of the
school. If the student wants to cancel the school then a $150 cancellation fee
is charged. The Company records the payment received in advance as deferred
revenue until the classes are held. As of June 30, 2004, there were no advance
payments recorded. The other smaller components of revenue are the spice sales
and book and video sales. These sales are received from the web site and phone
orders. The Company replaces any problems with the orders, but does not have a
cancellation policy for these sale items. The Company is the primary obligor in
the transactions and it is responsible for fulfillment of the order and for the
customer's acceptance of the goods or services sold, the general industry risk,
and has reasonable latitude to establish the selling price and follows the
guidance of EITF 99-19 relating to the "gross" method of reporting revenue on
the cooking classes, sales of videos, books and spices. Also, relating to SOP
00-2 the company has not entered and does not plan to enter into any agreement
with the license arrangements with the sale of television show masters.
The contract with the Production Company for the videos has been revised. The
Production Company is not related in any way to Jane Butel or any of the
principals of the company. The production was completed in January, 1995, and it
is recognized that the remaining amount to be paid the production company is
$12,000 reduced from $60,000 which will be paid at a royalty rate of 10% of the
gross sales of videos until this amount is paid, at which time the Agreement is
considered complete and no further financial responsibility is due to the
Production Company. The fees will be accrued and paid quarterly.
The Company does not receive revenue from the airing of the television shows and
the production costs have been capitalized in the balance sheet. The television
shows produce sales of books, videos, classes, and pantry items. The Company is
using these masters for the public television series masters. The Contract was
F-9
JANE BUTEL CORPORATION
NOTES TO FINANCIAL STATEMENTS
AS OF JUNE 30, 2004
signed in April 2002 for a three year period and started running on public
television stations. The Company is tracking sales resulting from the television
series. These assets are classified as being held and used and will be reviewed
by management for impairment purposes on a quarterly basis per the requirement
of SOP 00-2.
The Company adopted the U.S. Securities and Exchange Commission's ("SEC") Staff
Accounting Bulletin 101, "Revenue Recognition" ("SAB 101"), which provides
guidance on the recognition, presentation, and disclosure of revenue in
financial statements filed with the SEC. The adoption of SAB 101 did not have a
material effect on the Company's business, financial condition, results of
operations or cash flows. The Company believes that SAB 101 has been followed in
the recognition of revenues.
Fixed assets are stated at cost. Depreciation and amortization using the
straight-line method for financial reporting purposes and accelerated methods
for income tax purposes. The periods of depreciation for each major class of
depreciable assets are as follows:
Equipment 5 Years
Leasehold Improvements 5 Years
Websites 3 Years
Inventory is valued at cost and charged to expense as sales are made at a unit
cost per item and carried at the lower of cost or market.
BARTER TRANSACTIONS
In August 2000 the Company entered into an agreement with an unrelated
contractor under which the Company received web site development services in
exchange for the Company running promotional mentions on its America One
television series. The Company began broadcasting the promotional mentions in
December 2001 and they will continue to run on the remaining shows of the series
through November 2003. The contractor completed its website development in the
spring of 2002. The Company consulted APB 29 which provides that such
transactions be recorded at the fair value of the assets or services given or
received, whichever is more clearly evident. Since the Company had no method of
determining the value of the promotional mentions it provided, it did not
recognize any income or expense from this transaction until the promotional
mentions began running and the website was substantially completed. The Company
is amortizing the $78,320 from December 1, 2001 to November 30, 2003 at the rate
of $188 per promotional mention. A total of $16,656 and $22,560 is being
recognized as other income in the section of the Statement of Operations for the
period ended June 30, 2004 and 2003, respectively. The Company amortized $26,074
and $26,967 of the website cost in fiscal 2003 and 2002 leaving a net asset
value of $22,178 as of June 30, 2004.
STOCK-BASED COMPENSATION PLANS
The Company accounts for all transactions under which employees, officers and
directors receive shares of stock or options in the Company in accordance with
the provisions of Accounting Principles Board Opinion No. 25, "Accounting for
Stock Issued to Employees," ("APB 25"), under which no compensation cost is
recognized. The Company adopted Statements of Financial Accounting Standards No.
123 ("SFAS No. 123"), "Accounting for Stock-Based Compensation," for disclosure
purposes, and has adopted the proforma disclosure requirements of SFAS 123.
Accordingly, no compensation has been recognized in the results of operations
for the employee, officers and directors stock plan other than for options
issued at an exercise price below market price, to non- employees for consulting
F-10
JANE BUTEL CORPORATION
NOTES TO FINANCIAL STATEMENTS
AS OF JUNE 30, 2004
services or to debt providers that had stock or options attached with the
exception for transactions with employees that are within the scope of APB 25,
all transactions in which goods or services are the consideration received for
the issuance of equity instruments are accounted for based on the fair value or
the consideration received or the fair value of the equity instruments issued,
whichever is a more reliable measure.
EARNINGS PER SHARE
The Company adopted Financial Accounting Standards (SFAS) No. 128, "Earnings Per
Share," which simplifies the computation of earnings per share requiring the
restatement of all prior periods.
Basic earnings per share are computed on the basis of the weighted average
number of common shares outstanding during each year.
Diluted earnings per share are computed on the basis of the weighted average
number of common shares and dilutive securities outstanding. Dilutive securities
having an anti-dilutive effect on diluted earnings per share are excluded from
the calculation. The Company does not have any dilutive securities as of June
30, 2004.
RECENT ACCOUNTING PRONOUNCEMENTS
SHARE-BASED PAYMENT, AN AMENDMENT OF FASB STATEMENTS NO. 123 AND 95
In March 2004 the Financial Accounting Standard Board ("FASB") issued an
exposure draft entitled "SHARE-BASED PAYMENT, AN AMENDMENT OF FASB STATEMENTS
NO. 123 AND 95." This exposure draft would require stock-based compensation to
employees to be recognized as a cost in the financial statements and that such
cost be measured according to the fair value of the stock options. In the
absence of an observable market price for the stock awards, the fair value of
the stock options would be based upon a valuation methodology that takes into
consideration various factors, including the exercise price of the option, the
expected term of the option, the current price of the underlying shares, the
expected volatility of the underlying share price, the expected dividends on the
underlying shares and the risk-free interest rate. The proposed requirements in
the exposure draft would be effective for the first fiscal year beginning after
December 15, 2004. The FASB intends to issue a final Statement in late 2004. The
Company will continue to monitor communications on this subject from the FASB in
order to determine the impact on the Company's consolidated financial
statements.
CONSOLIDATION OF VARIABLE INTEREST ENTITIES. FIN 46R
In December 2003, the FASB issued Interpretation 46R (FIN 46R), a revision to
Interpretation 46 (FIN 46), CONSOLIDATION OF VARIABLE INTEREST ENTITIES. FIN
46R, which clarifies some of the provisions of FIN 46 and exempts certain
entities from its requirements, sets forth criteria to be used in determining
whether an investment in a variable interest entity should be consolidated.
These provisions are based on the general premise that if a company controls
another entity through interests other than voting interests, that company
should consolidate the controlled entity. The provisions of FIN 46R were
effective on March 31, 2004. The Company has evaluated whether the provisions of
FIN 46R are applicable to its investment, as well as other arrangements, which
may meet the criteria of the interpretation, and concluded that S.R.F.A., a
joint venture owned 50% by the Company that commenced operations in April 2004,
meets the definition of a variable interest entity and, based on the provisions
of FIN 46R, has been included in the Company's consolidated financial
statements.
F-11
JANE BUTEL CORPORATION
NOTES TO FINANCIAL STATEMENTS
AS OF JUNE 30, 2004
NOTE 2 - COMMON STOCK
When the company was originally incorporated, the Company issued 100,000 shares
to Jane Butel. The shares were recorded at $8,000 for services rendered to the
Company.
In March of 2002, the Company issued another 100,000 shares to Jane Butel that
was recorded at $61,489. The amount recorded was for services rendered in the
development of the television programs that had been accrued in previous years.
The $61,489 was deducted from the accrued amount due Jane Butel. The services
rendered by Jane Butel in the production and development of the television
programs were reviewed and were considered to be general and administrative and
were not capitalized as television production costs. Per SOP 00-2, production
overhead should not include general and administrative expenses.
In February of 2004, the Company agreed to issue 100,000 shares of its common
stock for legal services. The stock was valued at $.05 per share since the
Company's stock was not trading th the time. A total of $5,000 was recorded
under professional fees in the statement of operations.
A principal shareholder agreed to provide a total of $150,000 as a contribution
to capital in January and February 2004.
On November 1, 2003, the Company agreed to a consulting agreement with James
Terrell for services to the Company for professional services. The consulting
agreement calls for a total of $1,000,000 warrants to be issued to Mr. Terrell
allowing him to purchase shares of the Company's common stock at $.05 per share.
The Company's stock was not trading at the time of the consulting agreement.
On April 23, 2004, the Company signed a "Warrant Agreement" with 21st Century
Technologies Inc. "21st Century" for a total of $200,000 to be advanced to the
Company for one warrant for each dollar advanced. As of June 30, 2004 a total of
$103,081 had been advanced. At the option of 21st Century, the warrants can be
converted to common stock based upon a conversion formula contained in the
agreement. The warrant agreement was amended on September 15, 2004 to reflect
the expiration date of three years from the date of issuance and to add a
provision that no additional stock, warrant, or options be issued without the
approval of 21st Century in writing for a period of one year.
NOTE 3 - NOTE PAYABLE - RELATED PARTIES
The Company entered into a promissory note payable with Jane Butel,
individually, on June 28, 2002 in the amount of $244,098. The note is for funds
loaned to the Company by the principal shareholder, Jane Butel. The note matures
on July 1, 2007 with accrued interest at the rate of 6.97% in the amount of
$25,215 as of June 30, 2004.
The balance of the note is $252,739 as of June 30, 2004
Pecos Valley Spice Co. produces all of the products which the Company purchases
at the Distributor Cost, which is 25% below wholesale. (Wholesale price is 50%
or half of the cost of retail.) The revenues for the sale of the product are
included in the June 30, 2003 Profit and Loss under Spice Division Internet
sales, Mail Order or Pantry sales. Pecos Valley Spice Co. records its costs
separately in its own accounting. Pecos Valley Spice Co. operates as its own
entity, creating its products and pricing. The Company operates as the exclusive
or Master Distributor. The Company is not the agent because the Company pays for
the product and then resells product to the public. Per EITF 99-19 the Company
reports these transactions under the "gross reporting" of revenues. The Company
supplies the marketing and distribution system for the products.
F-12
JANE BUTEL CORPORATION
NOTES TO FINANCIAL STATEMENTS
AS OF JUNE 30, 2004
NOTE 4 - NOTES PAYABLE
The company executed a note payable on February 9, 2001 for one hundred thousand
dollars ($100,000) payable to James and Lila Dickey at six percent (6%) per
annum. Interest on the note is due in monthly installments and the principal
matures on March 25, 2003. The note is secured by receivables from the direct
sale of cookbooks, from the TV Series, Jane Butel's Southwestern Kitchen .
On November 28, 2001 the company entered into a note for $27,000 payable to
James Dickey. This note is a demand note. The company agreed to pay $5.00 per
cookbook of the Jane Butel's Southwestern Kitchen until the full amount has been
paid.
On August 19, 2003, a "Settlement and Mutual Release" was signed between the
parties in the suit that was filed January 24, 2003 in Second Judicial District
Court, Bernalillo County, New Mexico by James Allen Dickey and Lila Dickey
seeking a judgment in the amount of $127,000 plus interest. The Company borrowed
such sums in 2001.
A summary of the settlement is as follows:
1. Total of $137,500 is due with attorney fees and past due interest.
2. Interest to accrue at 6% on the original debt of $100,000, 10% on
$19,500, and no interest on the attorney fees and past due interest.
3. The Company owes $2 per book royalty until $300,000 is paid.
4. Monthly payment of $610 per month beginning September 15, 2003 and
continuing until August 15, 2005 when all remaining debt is due.
5. Mutual release of any and all other claims.
The balance of the debt to James & Lila Dickey is $106,455 as of June 30, 2004.
The Company entered in a note with Janet E Freeman Trust in August 2002 in the
amount of $25,000. The note carries interest at the rate of 10% and matured in
February 2003.
The Company signed a promissory note with James Terrell in October 2003 for
$50,000. The note is a demand note and carries an interest rate of 6%. The note
is expected to be retired through a warrant agreement sign with Mr. Terrell.
As of June 30, 2004, the company is also indebted to two unrelated individuals
for a total of $16,000. .
NOTE 5 - RELATED PARTIES
There exist related party relationships with Jane Butel, principal stockholder
and officer, in the form of a Note Payable in the amount of $252,739.
Also, there exists a related party relationship with Pecos Valley Spice Company
in the form of a Note Receivable in the amount of $12,894 where the Company is
owed that amount from Pecos Valley for funds advanced to the Company. Jane
Butel, individually, owns 18.75% of Pecos Valley Spice Company. The note has a
zero balance as of June 30, 2004.
F-13
JANE BUTEL CORPORATION
NOTES TO FINANCIAL STATEMENTS
AS OF JUNE 30, 2004
NOTE 6 - LEASE
The Company entered into a lease agreement with the La Posada Hotel in
Albuquerque, New Mexico for 2,900 square feet office and cooking school space.
The lease was originally signed in June 1997 and covered the term from July 1,
1997 to June 30, 2002 at the rate of $1,500 per month. Since the lease has
expired, the Company is currently extending the lease on a month to month basis.
On January 12, 2004 the company entered into a three year lease agreement with
Simms Building, Inc. for corporate office space at 400 Gold Ave., SW, Suite 750,
Albuquerque, NM 87109. The premises consist of approximately 3,684 square feet
of usable office space. The lease commenced March 1, 2004 and ends February 28,
2007. Monthly rent is $4,500.
The lease is subject to annual adjustment indexed to the CPI.
Future minimum rentals under this lease is as follows:
2005 $54,000
2006 $54,000
2007 $40,500
NOTE 7 - INCOME TAXES
The components of the provision for income tax benefits(expense) are as follows:
Year Ended June 30,
________________________
2004 2003
_________ ________
Current:
Federal $ 149,561 $ 54,128
State 20,728 7,510
Valuation Allowance (170,289) (61,638)
_________ ________
$ -0- $ (-0-)
_________ ________
The above provision has been calculated based on Federal and State statutory
rates in the adjusted rates of 34% for Federal and 4.5% for State tax rates
adjusted by a valuation allowance of deferred tax assets bringing the effective
rate to zero.
Significant components of the Company's deferred tax assets and liabilities as
of June 30, 2004 and 2003 are a result of temporary differences related to the
items as described as follows:
[Download Table]
2003 2002
_____________________________ _____________________________
Deferred Tax Deferred Tax Deferred Tax Deferred Tax
Assets Liabilities Assets Liabilities
____________ ____________ ____________ ____________
Impairment Loss $ 6,606 -0- $ 8,8936 -0-
Net Operating Loss 163,683 -0- 52,701 -0-
Valuation allowance on
Deferred tax assets (170,289) -0- ( 65,608) -0-
_________ ___ _________ ___
-0- -0- -0- -0-
SFAS 109 specifies that deferred tax assets are to be reduced by a valuation
allowance if it is more likely than not that some portion of the deferred tax
assets will not be realized.The Company considered its historic lack of taxable
profits in 2002, its internal projections concerning future taxable profits, its
assumptions underlying such projections and the likelihood of achieving such
future taxable profits. Based on such considerations the Company determined that
because of its historic lack of substantial operating profits, there is
sufficient uncertainty with respect to its ability to achieve profitable
operations in future periods that the Company cannot justify the recording of an
income tax asset and, accordingly, the Company established a valuation reserve
in the full amount of the deferred tax assets in the fiscal years ended June 30,
F-14
JANE BUTEL CORPORATION
NOTES TO FINANCIAL STATEMENTS
AS OF JUNE 30, 2004
2004 and 2003. As of June 30, 2004, the Company had approximately $627,000 in
net operating loss carry forwards for federal income tax purposes. The loss
carry forwards expire beginning in 2013. The net operating loss carry forwards
will be available to affect taxable income within the carry forward period,
subject to limitations of the tax code.
NOTE 8 - COMMITMENT AND CONTINGENCIES
The Company reached a settlement agreement with Peppercreek Farms Inc. in a
court case in Oklahoma City, Oklahoma. The settlement agreement calls for a
payment of $13,600 to be paid by January 5, 2003.
On January 24, 2003 a suit was filed against us in Second Judicial District
Court, Bernalillo County, New Mexico by James Allen Dickey and Lila Dickey
seeking a judgement in the amount of $127,000 plus interest. The Company
borrowed such sums in 2001. The Company agreed to repay a $100,000 loan on
February 10, 2003 and to pay an additional $300,000 based on $2.00 per cookbook
sold on our TV programs. The Company agreed to pay a $13,750 loan on demand and
pay an additional $13,250 based on $5.00 per cookbook sold. Jane Butel and
Gordon McMeen guaranteed payment up to $113,250 each and were also named as
defendants. The additional liability is solely contingent upon the Company
selling cookbooks and has not been recorded in the financial statements as of
June 30, 2003. A settlement was reached on August 19, 2003 whereby a stipulated
judgment which is held in escrow for the total debt including the $300,000.
NOTE 10 - WEBSITES
Costs are capitalized when it is probable that a website will be completed and
will be used to perform the function intended. When it is probable that upgrades
and enhancements will result in additional functionality such costs are
capitalized. Websites will be considered to be impaired when it no longer
provides substantial service potential, or significant changes occur in the
extent or manner in which the website is used. Impairment write off will be
recognized in the period when impairment is deemed by management to have
occurred.
The company capitalized its website development. It was engaged in the following
types of activities: creation of initial graphics, entering the initial content
of the website, creation of hypertext links to other websites and installation
of developed websites on web servers. These costs are to be capitalized as per
the guidance provided by SOP 98-1. The company has adopted the policy of
recording as expense in future period's activities such as; registering with web
site engines, creation of new links, backup costs, user administration.
The Company is actively pursuing web-site development. The Company has adopted
"Financial Accounting Standards Board Emerging Task Force Consensus 00-2 (FASB
EITF 00-2): Accounting for Website Development Costs." The adoption of this
procedure relates to the accounting for costs of internal software, requires
that costs of developing web applications and infrastructure, as well as cost of
graphic development, be capitalized, rather than the historical common practice
of same period expense. Costs of website planning and operation continue to be
expensed as normal. The website is being set up to be amortized over a three
year period on a straight line basis unless the website becomes impaired under
SFAS 144. Management has reviewed this long lived asset as being held and used
and noted no events that would indicate any impairment such as significant value
of the market value or a significant change in the extent or manner it was used.
F-15
JANE BUTEL CORPORATION
NOTES TO FINANCIAL STATEMENTS
AS OF JUNE 30, 2004
NOTE 10 - GOING CONCERN
The Company's financial statements are prepared using generally accepted
accounting principles applicable to a going concern, which contemplates the
realization of assets and liquidation of liabilities in the normal course of
business. However, the Company does not have significant cash or other material
assets to cover its operating costs and liabilities that raise substantial doubt
about its ability to continue as a going concern. The stockholders/officers and
or directors have committed to advancing operating costs of the Company interest
free to insure that the Company has enough operating capital over the next
twelve months.
F-16
ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
None.
ITEM 8A. CONTROLS AND PROCEDURES
The Company maintains disclosure controls and procedures that are designed to
ensure that information required to be disclosed in the Company's Exchange Act
reports is recorded, processed, summarized and reported within the time periods
specified in the SEC's rules and forms, and that such information is accumulated
and communicated to the Company's management, including its Chief Executive
Officer and Chief Financial Officer, as appropriate, to allow timely decisions
regarding required disclosure based closely on the definition of "disclosure
controls and procedures" in Rule 13a-14(c). In designing and evaluating the
disclosure controls and procedures, management recognized that any controls and
procedures, no matter how well designed and operated, can provide only
reasonable assurance of achieving the desired control objectives, and management
necessarily was required to apply its judgment in evaluating the cost-benefit
relationship of possible controls and procedures.
As of the end of the period covered by this report, the Company carried out an
evaluation, under the supervision and with the participation of the Company's
management, including the Company's Chief Executive Officer and the Company's
Chief Financial Officer, of the effectiveness of the design and operation of the
Company's disclosure controls and procedures. Based on the foregoing, the
Company's Chief Executive Officer and Chief Financial Officer concluded that the
Company's disclosure controls and procedures were effective.
There have been no significant changes in the Company's internal controls or in
other factors that could significantly affect the internal controls subsequent
to the date the Company completed its evaluation.
PART III
ITEM 9. DIRECTORS, EXECUTIVE OFFICERS
The following table sets forth the directors and executive officers of the
Company and their respective ages and positions:
NAME AGE POSITION
Jane Butel 66 President and Director
Steven A. Jackson 57 Director
Sidney B. Kramer 89 Director
Bette Clemens 80 Director
Paul D. Butt 70 Director
Jane Butel has been President, CEO and Director of Tex-Mex, Inc. since June 1991
and has been President and Director of Jane Butel Corporation since September
2002.
Steven A. Jackson has been a Director of Jane Butel Corporation since 11/06/03.
Mr. Jackson has been CEO and President of Digital Information and Network,
Albuquerque, NM since October 1995.
Sidney B. Kramer has been a Director of Jane Butel Corporation since 1/20/03.
During the last five years, Mr. Kramer has been a practicing attorney and has
been President of various real estate ventures, a literary agency and a
bookseller.
Bette Clemens has been a Director of Jane Butel Corporation since 1/17/03. Ms.
Clemens has been retired during the last five years.
Paul D. Butt has been a Director of Jane Butel Corporation since 9/22/03. During
the last five years Mr. Butt has been a consultant based in Scottsdale, Arizona.
Our Directors are elected yearly and hold office until the next annual meeting
of shareholders and the election and qualification of their successors.
Board of Director Committees
Our board has not yet established any committees.
Section 16(a) Beneficial Ownership Reporting Compliance.
Based solely upon a review of the copies of Forms 3 and 4 and 5 thereto
furnished to the Company, or written representations that no annual Form 5
reports were required, the Company believes that all filing requirements under
Section 16(a) of the Securities Act of 1934, as amended (the "EXCHANGE ACT")
applicable to its directors, officers and any persons holding tenpercent (10%)
or more of the Company's Common Stock were made with respect to the Company's
fiscal year ended June 30, 2004, except that Steven A. Jackson, Sidney B.
Kramer, Bette Clemens and Paul D. Butt did not file Form 3 required upon their
election as directors.
ITEM 10. EXECUTIVE COMPENSATION.
Summary Compensation Table
The following table sets forth the total compensation paid to the persons who
served as our chief executive officer for the last three completed fiscal years.
No executive officer of the Company received compensation of $100,000 or more
during any such year.
[Enlarge/Download Table]
Long Term Compensation
___________________________________________________________
Awards Payouts
______________________________ _______
Annual Compensation Securities
_________________________________ Underlying LTIP All Other
Name and Other Annual Restricted Options/SAR's Payouts Compensation
Principal Position Year Salary Bonus Compensation Stock Awards # ($) (*)
____________________________________________________________________________________________________________________________________
Jane Butel, President 2004 $55,000 -0- -0- -0- -0- -0- -0-
Tex-Mex, Inc. 2003 -0- -0- -0- -0- -0- -0- -0-
2002 -0- $61,489(1) -0- -0- -0- -0- -0-
<FN>
(1) paid in the form of 100,000 shares of common stock.
</FN>
Director Compensation
We have agreed to pay each of our outside directors 5,000 shares of common stock
for services for fiscal 2005.
Executive Employment Agreements
We have no written employment agreements with our executive officer.
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED STOCKHOLDER MATTERS.
The following table sets forth, as of September 2, 2004, the beneficial
ownership of our common stock by (i) the only persons who own of record or are
known to own beneficially, more than 5% of our common stock; (ii) each of our
directors and executive officers; and (iii) all directors and officers as a
group.
Percent of
Number of Outstanding
Name Shares Common Stock
__________________________ __________ ____________
Jane Butel 13,712,450 60 %
Steven A. Jackson -0-
Sidney B. Kramer -0-
Bette Clemens -0-
Paul D. Butt -0-
All directors and officers
as a group (5 persons) 13,712,450 60 %
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
We purchase the cookbooks authored by Jane Butel from the various publishers of
such books at standard author's discount prices. Jane Butel receives royalties
from the publishers from the sales of such books to Jane Butel Corporation and
other purchasers from the publishers.
Pecos Valley Spice Co. is owned by Jane Butel and other persons. Pecos Valley
Spice Co. provides specialized ingredients for Southwestern cooking which Jane
Butel Corporation sells as exclusive distributor. We have signed an exclusive
distribution agreement with Pecos Valley Spice Co. Such agreement has a term of
10 years from October 5, 2002. Under the terms of this agreement, we purchase
products of Pecos Valley Spice Co. for specified prices. We also pay Pecos
Valley Spice Co. 5% of the revenues we receive from sales of their products.
Accordingly, Ms. Butel may benefit from her ownership in Pecos Valley Spice Co.
which does business with Jane Butel Corporation as discussed above. In addition
Jane Butel Corporation holds a promissory note from Pecos Valley Spice Co. in
the amount of $12,894.00 which is payable on demand or on June 30, 2003 which
occurs earlier. We do not charge Pecos Valley Spice Co. any interest on any such
promissory note.
In September 2002 we issued 13,612,450 shares of our common stock to Jane Butel
in exchange for all the issued and outstanding shares of Tex-Mex, Inc. Jane
Butel's shares in Tex Mex, Inc. were received for services to the Corporation
valued at $69,489.00 and 10 years work in lieu of salary for periods prior to
the issuance of such shares.
We owe Jane Butel $240,850 for borrowed money. We issued a note to Jane Butel on
June 22, 2002. The note is payable on July 1, 2007 with interest at 6.97%.
We believe that all transactions with Jane Butel, Pecos Valley Spice Co., and
the publisher of Jane Butel's cookbooks were made on terms no less favorable to
us than those available from unaffiliated parties.
ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K.
(a) The following exhibits are furnished in this report.
Exhibit No. Description
3.1 Amended and Restated Articles of Incorporation of registrant.
(1)
3.2 By-laws of registrant. (2)
10.1 Share exchange agreement between Jane Butel
and Earth Labs, Inc. (3)
10.2 Indemnification Agreement between Earth Labs, Inc. and
certain shareholders. (4)
10.3 Distribution Agreement with Pecos Valley Spice Co. (5)
10.4 Revised Video Agreement (6)
10.5 Letter Agreement dated September 15, 2004 with 21st Century
Technologies, Inc.
10.6 Warrant Agreement dated April 23, 2004 between Registrant and
21st Century Technologies, Inc. (6)
10.7 Office Lease for premises located at 400 Gold SW,
Albaquerque, NM (7)
31.1 Certification by CEO pursuant to Section 302 of Sarbanes
Oxley Act of 2002.
31.2 Certification by CFO pursuant to Section 302 of Sarbanes-
Oxley Act of 2002.
32.1 Certification of CEO pursuant to Section 906 of Sarbanes-
Oxley Act of 2002.
32.2 Certification by CFO pursuant to Section 906 of Sarbanes-
Oxley Act of 2002.
(1) Incorporated by reference to Exhibit 3.1 to the Company's registration
statement on Form 10-SB (file no. 000-50104).
(2) Incorporated by reference to Exhibit 3.2 to the Company's registration
statement on Form 10-SB (file no. 000-50104).
(3) Incorporated by reference to Exhibit 10.1 to the Company's registration
statement on Form 10-SB (file no. 000-50104).
(4) Incorporated by reference to Exhibit 10.2 to the Company's registration
statement on Form 10-SB (file no. 000-50104).
(5) Incorporated by reference to Exhibit 10.3 to the Company's registration
statement on Form 10-SB (file no. 000-50104). (6) Incorporated by reference
to Exhibit 10.4 to the Company's registration statement on Form 10-SB (file
no. 000-50104).
(6) Incorporated by reference to Exhibit 10.1 to the Registrant's Quarterly
Report on Form 10-QSB filed May 10, 2004.
(7) Incorporated by reference to Exhibit 10.2 to the Registrant's Quarterly
Report on Form 10-QSB filed May 10, 2004.
We will furnish a copy of any of these exhibits to a shareholder upon written
request to Jane Butel, President, Jane Butel Corporation 400 Gold Ave SW, Suite
750, Albuquerque, NM 87102
(B) Reports on Form 8-K
There were no reports filed on Form 8-K during the quarter ended June 30, 2004.
ITEM 15. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Not applicable.
SIGNATURES
In accordance with the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the registrant caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized, in the City of
Albuquerque, New Mexico on September 27, 2004.
JANE BUTEL CORPORATION
(Registrant)
/s/ JANE BUTEL
______________________
Jane Butel
President
In accordance with the requirements of the Exchange Act, this report
has been signed by the following persons on behalf of the registrant and in the
capacities and on the dates indicated:
Signature Title Date
______________ _____________________________ _______________
/s/ JANE BUTEL President and Director September 27, 2004
______________ (Principal Executive Officer)
Jane Butel (Principal Financial Officer)
/s/ SIDNEY KRAMER Director September 27, 2004
_________________
Sidney Kramer
/s/ BETTE CLEMENS Director September 27, 2004
_________________
Bette Clemens
/s/ STEVEN JACKSON Director September 27, 2004
__________________
Steven Jackson
/s/ PAUL BUTT Director September 27, 2004
_____________
Paul Butt
Dates Referenced Herein and Documents Incorporated by Reference
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