As filed with the Securities and Exchange Commission on August 20, 2001
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM SB-2/A
Amendment No. 2
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
eFoodSafety.com, Inc.
(Name of Small Business Issuer in its charter)
Nevada 2870 62-1772151
(State of Incorporation) (Primary Standard Industrial (I.R.S. Employer ID.)
Classification No.)
350 West Caldwell Avenue
Visalia, CA 93277
(559) 741-2065 Phone
(559) 741-2066 Fax
(Address and telephone number of Registrant's principal
executive offices and principal place of business)
Patricia Ross, President
eFoodSafety.com, Inc.
350 West Caldwell Avenue
Visalia, CA 93277
Michael J. Daniels
3350 Durango, Suite 1016
Las Vegas, Nevada 89129
(727) 384-1330
(Name, address, and telephone number of agent for service)
Copies to:
Daniels, McGowan & Associates Daniels, McGowan & Associates
1201 Allen Market Lane, Suite 200 Two Penn Center Plaza - Suite 200
St. Louis, MO 63104 Philadelphia, PA 19102
Richard E. Daniels, Esq. Richard E. Daniels, Esq.
314-621-2728 Phone 215-854-6396 Phone
314-621-3388 Fax 215-854-6334 Fax
APPROXIMATE DATE OF PROPOSED SALE TO THE PUBLIC: As soon as practicable after
this Registration Statement becomes effective.
i
If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, please check the following box and list
the Securities Act registration number of the earlier effective registration
statement for the same offering. /----/
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. /----/
If this Form is a post-effective amendment filed pursuant to Rule 462(d) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective Registration statement
for the same offering. /----/
If the delivery of the prospectus is expected to be made pursuant to Rule 434,
check the following box.
/----/
If any securities being registered on this Form are to be offered on a delayed
or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check
the following box. /----/
CALCULATION OF REGISTRATION FEE
Title of Each Dollar Proposed Proposed
Class of Amount Maximum Maximum Amount of
Securities to to be Price Aggregate Registration
be Registered Registered Per Share Price Fee
Common Stock 12,540,000 $.003 $37,620* $13
$0.0005 par value
* Estimated solely for the purpose of calculating the registration fee in
accordance with Rule 457 under the Securities Act of 1933, as amended.
The registrant hereby amends this registration on such date or dates as may be
necessary to delay its effective date until the registrant shall file a further
amendment which specifically states that this registration shall thereafter
become effective in accordance with section 8(A) of the Securities Act of 1933
or until the registration statement shall become effective on such date as the
Commission, acting pursuant to said Section 8(A), may determine.
ii
eFoodSafety.com, Inc.
CROSS REFERENCE SHEET
ITEM NUMBER IN FORM SB-2 AND TITLE OF ITEM LOCATION IN PROSPECTUS
PROSPECTUS
Item 1. Front of Registration Statement and
Outside Front Cover of Prospectus Cover Page
Item 2. Inside Front and Outside Back Cover
Pages of Prospectus Inside Front and Outside Cover Pages
of Prospectus
Item 3. Summary Information and Risk Factors Prospectus Summary; The Company;
Risk Factors
Item 4. Use of Proceeds Use of Proceeds
Item 5. Determination of Offering Price Determination of Re-sale Price
Item 6. Dilution Not Applicable
Item 7. Selling Shareholders Selling Shareholders
Item 8. Plan of Distribution Plan of Distribution
Item 9. Legal Proceedings Legal Proceedings
Item 10. Directors, Executive Officers,
Promoters and Control Persons Management
Item 11. Security Ownership of Certain Beneficial
Owners and Management Management-Principal Shareholders
Item 12. Description of Securities Description of Securities
Item 13. Interest of Named Experts and Counsel Interest of Named Experts and Counsel
Item 14. Disclosure of Commission Position on
Indemnification Indemnification of Officers and Directors
Item 15. Organization Within Last Five Years Description of Business and Plan of Operation
Item 16. Description of Business Description of Business and Plan of Operation
Item 17. Management's Discussion and Analysis or
Plan of Operation Description of Business and Plan of Operation
Item 18. Description of Property. Description of Property
Item 19. Certain Relationships and
Related Transactions Certain Relationships and Related Transactions
Item 20. Market for Common Equity and Related Plan of Distribution; Shares Eligible for Future
Stockholder Matters Use
Item 21. Executive Compensation Management, Executive Compensation
Item 22. Financial Statements Financial Statements
Item 23. Changes In and Disagreements
With Accountants on Accounting
and Financial Disclosure Not Applicable
PART II
Item 24. Indemnification of Directors and Officers Indemnification of Directors and Officers
Item 25. Other Expenses of Issuance and Distribution Other Expenses of Issuance and Distribution
Item 26. Recent Sales of Unregistered Securities Recent Sales of Unregistered Securities
Item 27. Exhibits Exhibits
Item 28. Undertakings Undertakings
iii
SUBJECT TO COMPLETION, DATED April , 2002
PROSPECTUS
EFOODSAFETY.COM, INC.
12,540,000 SHARES OF COMMON STOCK
This prospectus covers the resale, from time to time, of up to 12,540,000
shares of common stock of eFoodSafety.com, Inc. ("eFood") in the
over-the-counter market, at prevailing market prices, at negotiated prices, or
otherwise.
eFood will not be receiving any of the proceeds from the sale of the
shares by selling shareholders, but will bear all of the expenses of the
registration of the shares.
This investment involves a high degree of risk. You should purchase shares only
if you can afford a complete loss. See "Risk Factors" beginning on page 5.
Our common stock is not currently listed or quoted on any quotation
medium. There is no public trading market for our stock.
-----------------
Neither the SEC nor any state securities commission has approved or disapproved
these securities, or determined if this Prospectus is truthful or complete. Any
representation to the contrary is a criminal offense.
The information in this preliminary prospectus is not complete and may be
changed. We are not allowed to sell the common stock offered by this prospectus
until the registration statement we have filed with the SEC becomes effective.
This preliminary prospectus is not an offer to sell our stock nor does it
solicit offers to buy our stock in any state where the offer of sale is not
permitted.
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Per Share Total
Public offering price......................................... % $
Underwriting discount......................................... % $
Proceed, before expenses...................................... % $
It is currently estimated that the initial public offering price will be between
$1.00 and $2.00 per share. The selling group is not required to sell any
specific number or dollar amounts but will use their best efforts to sell the
securities offered by the selling shareholders.
The date of this Prospectus is April , 2002.
1
TABLE OF CONTENTS
Page
Prospectus Summary 3
Risk Factors 3
Forward-Looking Statements 6
Use of Proceed 6
Determination of Re-Sale Price 6
Selling Shareholders 7
Plan of Distribution 8
Legal Proceedings 8
Management 8
Executive Compensation 10
Recent Sales of Unregistered Securities 10
Principal Shareholders 11
Description of Securities 12
Shares Eligible for Future Sale 13
Description of Business and Plan of Operation 13
Description of Property 15
Interest of Named Experts and Counsel 15
Transfer Agent and Registrar 16
Disclosure of Commission Position on
Indemnification for Securities Act Liabilities 16
Certain Relationships and Related Transactions 16
Additional Information 17
Until 90 days after the effective date, all dealers that effect
transactions in these shares, whether or not participating in this re-sale, may
be required to deliver a prospectus. This is in addition to the dealers'
obligation to deliver a prospectus when acting as underwriters and with respect
to their unsold allotments or subscriptions.
No dealer, sales representative or any other person has been authorized to
give any information or to make any representations in connection with the
securities described in this prospectus other than those contained in this
prospectus, and, if given or made, such information or representations must not
be relied upon as having been authorized by eFood. Neither the delivery of this
prospectus nor any [re-sale] made pursuant to this prospectus shall, under any
circumstances, create any implication that there has been no change in the
affairs of eFood since the date of this prospectus or that the information
contained in it is correct as of any time subsequent to its date.
2
In this prospectus, references to the "company", "eFood", "we", "us", and "our"
refer to eFoodSafety.com, Inc.
PROSPECTUS SUMMARY
The following summary does not contain all the information that may be
important to you. You should read this entire prospectus carefully, especially
"Risk Factors" and the financial statements and related notes included elsewhere
in this prospectus, before deciding to invest in shares of our common stock.
This prospectus contains forward-looking statements that are based upon the
beliefs of our management, but involve risks and uncertainties. Our actual
results or experience could differ significantly from the results discussed in
the forward-looking statements.
The Company
We were incorporated in Nevada on October 28, 1996 as DJH International,
Inc., to wholesale products to businesses; and via the Internet to businesses
and the general public where applicable. While developing the business, a merger
with Global Procurement Systems was completed on October 16, 2000, and a name
change to eFoodSafety.com, Inc. was accomplished. Upon the merger, Ms. Patricia
Ross assumed the official duties as president of the corporation and brought the
corporation on its present path of developing sanitation services and products
in the fruit and vegetable market worldwide. Due to lack of financial resources,
no products or services are currently being offered.
Covered Securities
We previously issued 29,335,000 shares of our common stock. This
prospectus covers any resale of the following shares.
Common Stock Registered for Resale 12,540,000
Common Stock Outstanding prior to the Offering 29,335,000
Common Stock Outstanding after the Offering 29,335,000
RISK FACTORS
An investment in our common stock is speculative in nature and involves a
high degree of risk. In addition to the other information contained in this
prospectus, the following factors should be considered carefully before making
any investment decisions with respect to purchasing our common stock. This
prospectus contains, in addition to the lack of historical information,
forward-looking statements that involve risks and uncertainties. eFood's actual
results may differ materially from the results discussed in the forward-looking
statements. This Risk Factors section includes all risks that we consider to be
material.
(1) We are a development stage company, with no operating history, and you could
lose your entire investment.
3
Our business has not shown a profit. Since we commenced operations in
October of 1996, we have accumulated a negligible net loss through the present.
A year-end profit may not be realized in the year ending December 31, 2002 and
profitability may not be achieved in the future. In addition, we are in poor
financial condition from a lack of capital.
(2) Financial risk of dependence on key personnel.
The success of the company will depend to a great extent on Patricia Ross
and her management team. These individuals may not remain with the company due
to the lack of employment contracts. If we lose our key personnel, our business
may suffer. We depend substantially on the continued services and performance of
our senior management and, in particular, their contacts and relationships,
especially within the fresh fruit and vegetable industry.
(3) Risk of loss of investment due to highly competitive nature of our industry.
The market for sanitation products for fruits and vegetables is intensely
competitive, and the specific niche the company is entering also carries with it
a high degree of risk. eFood has no operating history or any revenues from
operations. eFood has no assets or financial resources. eFood has operated at a
loss and will continue to do so for some time.
We are smaller than our national competitors, and consequently lack the
financial resources to enter new markets or increase existing market share. In
fact, we compete with several companies that specialize in the $5 billion dollar
fruit and vegetable sanitation market. Most of these companies have longer
histories, greater name recognition, and more financial resources than we do.
(4) Risk of liquidity, as there is no public market for our shares, and no
assurance of a public trading market developing.
Purchasers of these shares are at risk of no liquidity for their
investment.
Prior to this offering, there has been no established trading market for
our securities. A regular trading market for the securities may not develop
after completion of this offering. If a trading market does develop for the
securities offered hereby, it may not be sustained.
(5) Risk due to possibility of highly volatile stock price.
Should a market develop for our shares, the trading price of the common
stock may be highly volatile and could be subject to wide fluctuations in
response to factors such as actual or anticipated variations in quarterly
operating results, announcements of technological innovations, new sales formats
or new services by us or our competitors, changes in financial estimates by
securities analysts, conditions or trends in Internet or traditional retail
markets, changes in the market valuations of other Internet or produce and
procurement oriented companies, announcements by us or our competitors of
significant acquisitions, strategic partnerships, joint ventures, capital
commitments, additions or departures of key personnel, sales of common stock and
other events or factors, many of which are beyond our control. In addition, the
stock market in general, and the market for produce and procurement companies in
particular, has experienced extreme price and volume fluctuations which have
often been unrelated or disproportionate to the operating performance of such
companies. These broad market and industry factors may materially adversely
affect the market price of the common stock, regardless of our operating
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performance. In the past, following periods of volatility in the market price of
a company's securities, securities class-action litigation has often been
instituted against such companies. Such litigation, if instituted, could result
in substantial costs and a diversion of management's attention and resources,
which could have a material adverse effect on our business, results of
operations, and financial condition.
(6) Risk of reduced liquidity of "penny stocks".
The Securities and Exchange Commission has adopted regulations that
generally define a "penny stock" as any equity security that has a market price
of less than $5.00 per share and that is not traded on a national stock
exchange, NASDAQ or the NASDAQ National Market System. Now, or sometime in the
future, penny stocks could be removed from NASDAQ or the NASDAQ National Market
System or the securities may become subject to rules of the Commission that
impose additional sales practice requirements on broker-dealers effecting
transactions in penny stocks. In most instances, unless the purchaser is either
(i) an institutional accredited investor, (ii) the issuer, (iii) a director,
officer, general partner or beneficial owner of more than five percent (5 %) of
any class of equity security of the issuer of the stock that is the subject of
the transaction, or (iv) an established customer of the broker-dealer, the
broker-dealer must make a special suitability determination for the purchase of
such securities and have received the purchaser's prior written consent to the
transaction. Additionally, on any transaction involving a penny stock, the rules
of the Commission require, among other things, the delivery, prior to the
transaction, of a disclosure schedule prepared by the Commission relating to the
penny stock market and the risks associated with investing in penny stocks. The
broker dealer also must disclose the commissions payable to both the
broker-dealer and registered representative and current quotations for the
securities. Finally, among other requirements, monthly statements must be sent
to the purchaser of the penny stock disclosing recent price information for the
penny stock held in the purchaser's account and information on the limited
market in penny stocks. Consequently, the penny stock rules may restrict the
ability of broker-dealers to sell the securities and may affect the ability of
purchasers in this Offering to sell the securities in the secondary market.
(7) Risk due to minority status of new investors.
Upon completion of this registration, our directors and executive officers
will beneficially own approximately 16,795,000 million common shares;
approximately 57.26% of the outstanding common stock if all the shares offered
are sold. As a result, these stockholders, if they act as a group, will have a
significant influence on all matters requiring stockholder approval, including
the election of directors and approval of significant corporate transactions.
Such control may have the effect of delaying or preventing a change in control
of the Company. See "Principal and Selling Stockholders".
(8) Risk due to lack of funds.
The company presently lacks sufficient funds to begin operations. No
products or services are presently being offered.
5
FORWARD-LOOKING STATEMENTS
This prospectus contains statements that plan for or anticipate the
future. Forward-looking statements include statements about the future of the
Internet and food safety and sanitation industries, statements about our future
business plans and strategies, and most other statements that are not historical
in nature. In this prospectus, forward-looking statements are generally
identified by the words "anticipate," "plan," "believe," "expect," "estimate,"
and the like. Because forward-looking statements involve future risks and
uncertainties, there are factors that could cause actual results to differ
materially from those expressed or implied. For example, a few of the
uncertainties that could affect the accuracy of forward-looking statements
include:
(A) an abrupt economic change resulting in an unexpected downturn in
demand;
(B) governmental restrictions or excessive taxes on imports and
exports;
(C) over-abundance of products and services related to the produce and
procurement industries;
(D) economic resources to support the retail and wholesale promotion of
new products and services;
(E) expansion plans, access to potential clients and advances in
technology; and
(F) lack of working capital that could hinder the promotion and
distribution of products and services to a broader based wholesale
population.
(G) the Company presently has insufficient funds to start operations.
USE OF PROCEEDS
The principal purpose of this registration is to create a more liquid
public market for eFood's common stock. Upon the effectiveness of this
registration statement, a portion of eFood's outstanding shares of common stock
will be eligible for resale under the Securities Act. While eFood will bear the
expenses of the registration of the shares, eFood will not realize any proceeds
from any actual resale of the shares that might occur in the future. The selling
shareholders will receive all proceeds from any resale.
DETERMINATION OF RE-SALE PRICE
This is not an offering of securities, but a registration of existing
shares of common stock held by selling shareholders. Therefore, there is no
offering price. The re-sales of shares, if any, will take place at then current
market prices or, in the absence of an established market, at negotiated prices;
or both.
Our business is subject to compliance with various government regulations.
We are subject to regulation by numerous governmental agencies, the most active
of which is the Securities and Exchange Commission (the "SEC"), which will
regulate our status as a fully reporting company.
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SELLING SHAREHOLDERS
The following table sets forth certain information as of the date of this
prospectus, with respect to the selling shareholders for whom eFood is
registering shares for resale to the public. All of the shares listed in the
table were purchased from and issued by eFood Safety on October 9, 2000 for cash
at $0.0005 (par value) per share. There are no known relationships between any
of the shareholders, or eFood's management. The maximum number of shares that
could be offered by the selling shareholders is 12,540,000. The amount of stock
eligible for sale pursuant to Rule 144 is 16,795,000. The total number of
shareholders of our common stock is approximately 33.
No persons selling the company's stock are considered broker/dealers or
affiliates of broker/dealers.
Shares No. of Shares
Beneficially to be Registered % Owned
Name of Owned Prior to % Owned Pursuant to After
Security Holder Registration Prior this Prospectus Registration
Regency Financial
Services, Ltd. 2,347,500 8.0 2,347,500 8.0
Berkshire Capital
Management Co. Inc. 2,292,500 7.8 2,292,500 7.8
Gina Della Femina 100,000 0.034 100,000 0.034
Steven A. Sanders 100,000 0.034 100,000 0.034
Laurence and Elisabeth
Paredes 15,000 0.005 15,000 0.005
Ronald Sparkman 2,040,000 7.0 2,040,000 7.0
Stone Castle Keep, Inc. 2,040,000 7.0 2,040,000 7.0
John M. Peragine 525,000 1.8 525,000 1.8
James Mylock, Jr. 525,000 1.8 525,000 1.8
Andreas Lintzeris 525,000 1.8 525,000 1.8
Jon Callahan 525,000 1.8 525,000 1.8
Daniel Grieco 10,000 0.0034 10,000 0.0034
Amanda E. Johnson 525,000 1.8 525,000 1.8
Milton Irizarry 525,000 1.8 525,000 1.8
John C. Sypek 325,000 0.009 325,000 1.1
Diane J. Harrison 500 0.0002 500 0.0002
William B. Harrison, II 500 0.0002 500 0.0002
Norman Davis 500 0.0002 500 0.0002
Sheryl Cerasani 500 0.0002 500 0.0002
Eileen Daniels 500 0.0002 500 0.0002
Daniel Terzo 500 0.0002 500 0.0002
Lynnette Sparks 500 0.0002 500 0.0002
Debra Lynn Hensen 500 0.0002 500 0.0002
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Shares No. of Shares
Beneficially to be Registered % Owned
Name of Owned Prior to % Owned Pursuant to After
Security Holder Registration Prior this Prospectus Registration
Sandra Taunton 500 0.0002 500 0.0002
Wilma J. & William B.
Harrison 500 0.0002 500 0.0002
Donald & Cathy
Hejmanowski 500 0.0002 500 0.0002
Arthur Rigsby 500 0.0002 500 0.0002
Michael J. Daniels 114,000 0.4 114,000 0.4
All of the shares offered by this prospectus may be offered for resale,
from time to time, by the selling shareholders, pursuant to this prospectus, in
one or more private or negotiated transactions, in open market transactions in
the over-the-counter market, or otherwise, or by a combination of these methods,
at fixed prices that may be changed, at market prices prevailing at the time of
the sale, at prices related to such market prices, at negotiated prices, or
otherwise. The selling shareholders may effect these transactions by selling
their shares directly to one or more purchasers or to or through broker-dealers
or agents. The compensation to a particular broker-dealer or agent may be in
excess of customary commissions. Each of the selling shareholders may be deemed
an "underwriter" within the meaning of the Securities Act in connection with
each sale of shares. The selling shareholders will pay all commissions, transfer
taxes and other expenses associated with their sales.
PLAN OF DISTRIBUTION
To our knowledge, none of the selling shareholders has made any
arrangement with any brokerage firm for the sale of the shares. The selling
shareholders have advised us that they presently intend to dispose of the shares
through broker-dealers in ordinary brokerage transactions at market prices
prevailing at the time of sale.
Any broker-dealers or agents who act in connection with the sale of the
shares may be deemed to be underwriters. Any discounts, commissions or
concessions received by any broker-dealers or agents may be deemed to be
underwriting discounts and commissions under the Securities Act.
eFood has not registered its shares for resale under the securities or
"blue sky" laws of any state. Current shareholders and persons who desire to
purchase the shares in any trading market that may develop in the future, should
be aware that there may be significant state "blue sky" restrictions upon the
ability of new investors to purchase the securities. These restrictions could
reduce the size of any potential trading market. Under federal law, non-issuer
trading or resale of eFood's common stock may be exempt from most state
registration or qualification requirements. However, some states may continue to
restrict the ability to register or qualify eFood's common stock for both
initial sale and secondary trading by regulations prohibiting or imposing
limitations on the sale of securities of development stage issuers.
LEGAL PROCEEDINGS
We are not a party to any legal proceedings.
MANAGEMENT
We currently have no paid full time employees. The management team,
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consisting of the following individuals, is conducting the business of the
company:
NAME POSITION AGE
Patricia Ross President/Treasurer/Director 60
Clarence W. Karney CEO/Secretary/Director 60
Lindsey Lee CFO 42
Scott McFee VP Operations/Director 43
Raymond Klocke Director 58
Thomas Gunn Director 63
There are no family relationships among the officers and directors.
Patricia Ross, President, Treasurer, and director, was president of
Prime World Travel, Inc., a full service travel agency in Phoenix, Ariz., from
May 1995 to September 2000. From November 2000 to the present, she has been a
Managing Account Representative in the Executive Travel Department of American
Express. From April 1999 through September 1999, Ms. Ross also served as Vice
President of Food Safety Systems, a food processing company. Diversified Funds,
a publicly traded holding company, acquired Food Safety Systems in the summer of
1999.
Ms. Ross has served eFood as a director for one year of a three-year
term. She was elected the first woman president of the Chamber of Commerce in
Arizona, selected to represent Arizona at the White House Conference for Small
Business, and is currently a Trustee on the Board of Directors for the Arizona
Small Business Association.
Clarence W. Karney, CEO, Secretary, and director, founded Karney &
Associates, a consulting firm, in 1984. He is presently acting president of that
firm, which is located in Visalia, California. Previously, Mr. Karney spent over
nineteen years with the Federal Government Departments of Defense and the USDA.
Mr. Karney is currently a member of the United Fresh Fruit and Vegetable
Association, Western Growers Association, Institute of Food Technologists,
International Food Processors, Fresh Cut Produce Association, and the Produce
Marketing Association. He has also served one year of a three-year term as a
director of eFood.
A personal bankruptcy petition was filed by Mr. Karney on October 25,
2000, and was discharged on February 1, 2001.
Lindsey Lee, CFO, was a founding partner in Bond, Taylor and Lee, LLP, and
for the past five years has been practicing as a licensed attorney, CPA, and
Chartered Financial Analyst. Mr. Lee previously held positions with Arthur
Andersen and Kenneth Leventhal & Company.
Scott McFee, Director, from September 1993 through March 2001, held
positions in various operational, distribution and production capacities with
Del Monte Fresh Produce. In his most recent position he was General Manager for
Production and Distribution for Del Monte in Sanger, California, a 250,000
square foot packing and cooling facility. As G.M., Mr. McFee was responsible for
a budget of approximately $14 million per year and 230 employees. Prior to Del
9
Monte, Mr. McFee was employed at Sea-Land Service for seven years in various
supervisory and advisory positions. Since March 2001 he has been Vice President
of Programming for American Ships in Tampa, Florida. American Ships is a
steamship/freight company with vessels that import and export container and
break-bulk shipments of produce, dry good, steel, etc. Mr. McFee has served as a
director of eFood for one year of a three-year term.
Raymond Klocke, Director, was Vice-President of Safeway from 1991 until
November, 1998. Since that time he has served as president of his own consulting
firm, Klocke Advantage, which specializes in services to the produce and
procurement industries. Prior to Safeway, Mr. Klocke was Vice-President of
Merchandising and Procurement for the Kroger Company in Cincinnati, Ohio. During
his twenty-six years at Kroger, he was held accountable for the procurement of
over two billion pounds of fresh produce and sales of $85 million while
providing leadership to fourteen divisions within the company. Mr. Klocke is a
professional speaker at seminars relating to the produce industry, and has held
posts as Chairman of the United Way and President of the Produce Marketing
Association. Mr.Klocke has served one year of a three-year term as an eFood
director.
Thomas Gunn, Director, is a former Chairman and Chief Executive Officer of
Adidas Southwest and a former President of Stroh's Beer of Dallas. He is
currently an Advisory Board member for the Republic Bank of Dallas and a board
member of Neuhoff Packing Company. Mr. Gunn has for the past ten years been
Executive Director of the Arizona Small Business Association and is a founder of
the Arizona Forum. He has served one year of a three-year term as a director of
eFood Safety.
EXECUTIVE COMPENSATION
No compensation is currently being paid by the company to any of the
executives. It is possible that upon completion of equity financing a
compensation package will be developed, however there is no time frame for the
foreseeable future. The board of directors will determine compensation of
executives and shareholders of the company will not have the opportunity to vote
on or approve such compensation. The board of directors will be developing a
compensation package that will be within industry standards for executives
similarly situated with other companies in the same industry.
RECENT SALES OF UNREGISTERED SECURITIES
We issued the following securities within the past two (2) years and
were not registered under the Securities Act of 1933. Rather, they were issued
pursuant to an exemption from a registration under Section 4 (2) of the Act.
Upon organizing the company, the Board of Directors approved a forward stock
split after which 12,540,000 shares of our common stock were issued. One Hundred
Twenty Thousand (120,000) shares were issued to former officers and directors
and 12,420,000 shares were issued to equity contributors. All of the shares were
issued on October 9, 2000 for cash consideration of $0.0005, the par value of
the stock.
We issued an additional 16,795,000 shares from out treasury pursuant to
the reorganization and assignment of assets of Global Procurement Systems to
eFoodsafety.com, Inc. This private placement of securities was also exempt under
Section 4(2) of the act and occurred on October 16, 2000.
10
PRINCIPAL SHAREHOLDERS
The following table sets forth certain information known to eFoodSafety.com,
Inc. regarding beneficial ownership of eFood's common stock at October 16, 2000
and as adjusted to reflect the sale of the shares of common stock in this
registration for re-sale by:
o each person known by eFood to be the beneficial owner of more than 5%
of eFood's common stock;
o each of eFood' s directors and executive officers; and
o all executive officers and directors as a group.
Outstanding Percentage Outstanding Percentage of
Common of shares Common shares beneficially
Name and Address of Stock Prior to Beneficially Stock After owned after
Beneficial Owner Registration Owned (1) Registration Registration
Joseph Fiore
Berkshire Capital
Management Co., Inc.
670 White Plains Rd
Suite 120
Scarsdale, NY 10583 n 2,292,500 7.81% 2,292,500 7.81%
Joseph Fiore
Regency Financial Services,
Ltd.
670 White Plains Rd,
Suite 120
Scarsdale, NY 10583 2,347,500 8% 2,347,500 8.0%
Ron Sparkman
10616 Brown Fox Trail
Littleton, CO 80125 2,040,000 6.95% 2,040,000 6.95%
Ron Sparkman
Stone Castle Keep, Inc.
10616 Brown Fox Trail
Littleton, CO 80125 2,040,000 6.95% 2,040,000 6.95%
Clarence W. Karney
3244 Oakview Drive
Visalia, CA 93277 8,397,500 28.63% 8,397,500 28.63%
11
Outstanding Percentage Outstanding Percentage of
Common of shares Common shares beneficially
Name and Address of Stock Prior to Beneficially Stock After owned after
Beneficial Owner Registration Owned (1) Registration Registration
Patricia Ross
350 West Caldwell Avenue
Visalia, CA 93277 8,397,500 28.63% 8,397,500 28.63%
All Officers and Directors as
a group (4 in number) 16,795,000 57.25% 16,795,000 57.25%
(1)The information contained in this table with respect to beneficial
ownership reflects "beneficial ownership" as defined in Rule 13d-3 under the
Exchange Act. All information with respect to the beneficial ownership of any
shareholder has been furnished by such shareholder and, except as otherwise
indicated or pursuant to community property laws, each shareholder has sole
voting and investment power with respect to shares listed as beneficially owned
by such shareholder. Pursuant to the rules of the Commission, in calculating
percentage ownership, each person is deemed to beneficially own shares subject
to options or warrants exercisable within 60 days of the date of this
Prospectus, but shares subject to options or warrants owned by others (even if
exercisable within 60 days) are deemed not to be outstanding.
DESCRIPTION OF SECURITIES
The Articles of Incorporation authorize capital stock consisting of
50,000,000 shares of common stock, $0.0005 par value.
Common Stock
As of October 16, 2000, there were 29,335,000 shares of common stock
issued and outstanding that were held of record by approximately 32
shareholders.
Each outstanding share of common stock is entitled to one vote on all
matters to be submitted to a vote of shareholders, except that, upon giving the
notice required by law, shareholders may cumulate their votes in the election of
directors. Holders do not have preemptive rights, so we may issue additional
shares that may reduce each holder's voting and financial interest in our
company. The right of holders of our common stock to receive dividends may be
restricted by the terms of any shares of our preferred stock issued in the
future. If we were to liquidate, dissolve, or wind up our affairs, holders of
common stock would share proportionately in our assets that remain after payment
of all of our debts and obligations and after any liquidation payments with
respect to preferred stock.
Preferred Stock
There is no provision in the Articles of Incorporation for preferred stock
at this time.
Dividends
We have no plans to pay dividends at this time, and we do not expect to
pay dividends on common stock anytime soon. Our board will decide on any future
payment of dividends, depending on the results of operations, financial
condition, capital requirements, and any other relevant factors.
12
At present, there are no provisions in the by-laws that could delay a
change in control of the company.
Convertible Notes
There are no convertible notes outstanding at this time.
SHARES ELIGIBLE FOR FUTURE USE
Upon the effectiveness of this registration statement, eFood will have
12,540,000 outstanding common shares registered for resale by the selling
shareholders in accordance with the Securities Act of 1933.
Prior to this registration, no public trading market has existed for
shares of eFood common stock. The sale, or availability for sale, of substantial
amounts of common stock in the public trading market could adversely affect the
market prices for eFood's common stock.
DESCRIPTION OF BUSINESS AND PLAN OF OPERATION
eFoodSafety.com, Inc., was incorporated in Nevada on October 28, 1996 as
DJH International, Inc., to market products through the Internet. The founder,
Michael J. Daniels, saw the need for good products and services to be marketed
traditionally and via the World Wide Web and sought opportunities through
companies that had the ability to sell and deliver in a timely fashion.
On October 2, 2000, the company declared a 6 to 1 stock split of its
shares of common stock. Subsequently, on October 16, 2000, we entered into an
agreement and plan of reorganization with Global Procurement Systems, Inc.
whereby we acquired Global. As a result of the acquisition, we issued 16,795,000
shares of common stock in exchange for the outstanding shares of Global and
changed our name to eFoodSafety.com, Inc. Upon the merger, Ms. Patricia Ross
assumed the official duties as president and brought us to our present path
toward development of sanitation services and products in the fruit and
vegetable market worldwide.
We have undergone no bankruptcy, receivership, or similar proceedings.
We were organized for the purpose of creating a corporate vehicle to seek,
investigate and, if such investigation warrants, acquire an interest in one or
more business opportunities presented to it. At this time, we have completed a
merger as per above, and have identified a specific business that we have
targeted for operations. This plan of operation assumes that we will be able to
raise the necessary funds, through equity and/or debt financing, to finance our
food safety products and services business. We presently have no cash on hand
and management serves without compensation.
The company is still considered to be a development stage company. The
company has no revenue and is dependent upon the raising of capital through
placement of its common stock. There can be no assurance that we will be
successful in raising the capital required through the sale of its common stock.
The U.S. Department of Agriculture has estimated that less than 2% of all
13
fruits and vegetables are pathogen, or "germ", free, at the initial packing
point, and less still are provided with a way to continue to eliminate the
growth of pathogens during the distribution cycle. Our research, covering the
past two years and, along with our process development has demonstrated that our
Food Safe Program, utilizing chlorine in conjunction with Food Safe 2600, ozone,
or electronic pasteurization virtually eliminated all pesticides and pathogens,
including E. Coli, Salmonella, and Listeria, at the packing house or
distribution center. Pesticides are chemical sprays used on a product while
growing in the field; pathogens are bacteria.
The Food Safety Program is intended to be complete process that
incorporates an application and monitoring system utilizing either existing or
custom designed spray applications of Food Safe materials to fresh fruit and
vegetables after the initial chlorine bath. A monitoring device will
continuously monitor water quality, Oxidation Reduction Potential (ORP), ph,
chlorine concentration, and maintains continuous records, that satisfy Hazard
Analysis Critical Control Point [HAACP] requirements. The data supplied by the
monitoring device is sent to the USDA to insure compliance with HAACP Standards.
Patent protection will be sought immediately after operations commence.
The management has decided to wait until after the Food Safety Program has had a
thorough "run-through" in an eFood-approved facility. If any improprieties in
their process are detected, although they believe this to be highly unlikely,
certain changes will be made with a patent application to follow.
The program will be marketed locally prior to receiving patent protection.
In order to set up a potential customer base, the company will introduce its
program to various fruit and vegetable industry players. In addition, the
program has been presented to various government officials in order to seek
governmental support.
There will be no up-front cost to the customer involved in the program. We
intend to supply machinery and materials. Charges for usage of the program will
be based on each unique situation and will be determined on a case-by-case
basis.
The program will use common materials, as will the manufacture of
equipment, so we will have a multitude of vending sources from which to choose.
In addition, we plan to market our products and services so as not to become
dependent on any one customer.
We plan to market all services, products, and produce from our off-line
supply/distribution facilities through outside sales persons and through a web
site, http://www.e-foods-safety.com, which is currently under construction.
Competition
The on-line food-safe products and services marketplace is in its
infancy, with no dominant business-to-business leader.
The fresh fruits, vegetables, and produce industries are extremely
competitive and have become highly fragmented over the years. Operators have
been attempting to hold or increase market share through the development and
operation of traditional sales and distribution outlets. We believe that on-line
marketing will be effective, and that others will emulate our business model.
14
There are presently, to the best of our knowledge, no companies that
provide complete inspection services, processes, and equipment. There are,
however, competitors that do provide partial food-safe programs.
We will compete with many different companies regarding certain
commodities in the marketplace including, but not limited to:
o Dole, Castle & Cook, Del Monte, Baskovitch, Redi Pack,
Grimmway Farms, Tony Vitrano, Fresh Express, T & A, Fresh
America, Sysco, Wal-Mart, K Mart, Costco, Cub Stores, Super
Value, Fresh Point, AmeriServ, Kraft, and Monarch Foods;
o Safeway, Albertson's, Winn Dixie, Publix, Kroger, Food Lion,
Stop & Shop, Wegman's, Giant Foods, Path Mart, Cash & Carry,
and Raley's;
o Burger King, Wendy's, McDonald's, In and Out Burger, Chili's,
Subway, Hardee's, Jack-in-the-Box, White House, What-a-Burger,
PepsiCo, Hyatt Hotels, Marriott Hotels, and Hilton Hotels.
o Private inspection services such as McDonald's Inspections and
FBI Inspections.
The only licenses required will be a PACA (Perishable Agricultural
Commodities Act) License and a State's License issued by the State Department in
each state the company is conducting its business. The Company has not applied
for any licenses to date.
Our Chairman, Mr. Clarence Karney has three decades of experience in this
industry, and the processes developed comply with all present governmental and
industry standards. There are no applicable environmental laws that require
compliance.
The management team will eventually consist of approximately ten officers
and/or directors. Six supervisors will oversee the operations divisions at each
distribution center. The employees at each facility will be contracted through
local vendors. The company currently has no paid employees. All work contributed
by Mr. Karney and his colleagues and associates are on a pro bono basis. The
company has no payroll.
DESCRIPTION OF PROPERTY
We have office facilities and equipment that are provided at no charge
until we are able to complete our first round of financing. Karney and
Associates provides the space at Visalia, California.
INTEREST OF NAMED EXPERTS AND COUNSEL
The law firm of Daniels, McGowan & Associates, c/o Richard E. Daniels,
Esq., 1201 Allen Market Lane, Suite 200, St. Louis, Missouri 63104, telephone
(314) 621-2728, has been retained to advise the company regarding this filing.
The audited financial statements of eFoodSafety.com, Inc. included in this
Prospectus and elsewhere in the Registration Statement have been audited by
Robison, Hill & Co., 1366 East Murray Holladay Road, Salt Lake City, Utah 84117,
telephone (801) 272-8045, independent public accountants, as indicated in their
reports with respect thereto, and are included herein in reliance given upon
15
their authority of said firm as experts in accounting and auditing.
TRANSFER AGENT AND REGISTRAR
The transfer agent and registrar for our common stock is Signature Stock
Transfer, Inc., 14675 Midway Road, Suite 221, Addison, Texas 75001; telephone
(972) 788-4193.
DISCLOSURE OF COMMISSION POSITION ON
INDEMNIFICATION FOR SECURITIES ACT LIABILITIES
Section 78(1 )(2)(3) & (4) of the Nevada Revised Statutes (the "NRS")
permits corporations to indemnify a director, officer or control person of the
corporation or its stockholders for any liability asserted against him and
liability and expenses incurred by him in his capacity as a director, officer,
employee or agent, or arising out of his status as such, whether or not the
corporation has the authority to indemnify him against such liability and
expense. Our Articles of Incorporation and By-laws do not include such a
provision automatically indemnifying a director, officer, or control person of
the corporation, or its stockholders for any liability asserted against him and
liability and expenses incurred by him in his capacity as a director, officer,
employee or agent, or arising out of his status as such.
Our By-laws, Article X Section 3, do permit us to secure insurance on
behalf of any director, officer, employee or other agent for any liability
arising out of his or her actions in such capacity, regardless of whether or not
Nevada law would permit indemnification.
We are not obligated to indemnify the indemnitee with respect to (a) acts,
omissions or transactions from which the indemnitee may not be relieved of
liability under applicable law, (b) claims initiated or brought voluntarily by
the indemnitee and not by way of defense, except in certain situations, (c)
proceedings instituted by the indemnitee to enforce the Indemnification
Agreements which are not made in good faith or are frivolous, or (d) violations
of Section 16(b) of the Securities Exchange Act of 1934 or any similar statute.
While not requiring the maintenance of directors' and officers' liability
insurance, if there is such insurance, the indemnitee must be provided with the
maximum coverage afforded to Directors, Officers, key employees, agents or
fiduciaries, if indemnitee is a director, officer, key employee, agent or
fiduciary, respectively. Any award of indemnification to an agent would come
directly from our assets, thereby affecting a stockholder's investment.
These indemnification provisions may be broad enough to permit
indemnification of our directors and officers for liabilities (including
reimbursement of expenses) arising under the Securities Act.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
To the best of our knowledge there are no transactions involving any
director, executive officer, any nominee for election as a director or officer
or any security holder who is a beneficial owner or any member of the immediate
family of the same.
16
ADDITIONAL DISCLOSURES - MARKET FOR COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS
There is no market for our stock. None of our common stock is subject
to outstanding options or warrants to purchase or securities convertible into
common equity. No dividend for our common stock has been declared in the past
two fiscal years or for any other period. Since we presently have no earnings
the company does not have the ability to pay dividends and cannot anticipate
paying any in the future. There are approximately thirty-one shareholders of our
common stock. For a list of all of the shareholders and the percentage of our
stock that they each own see page 7, supra.
ADDITIONAL INFORMATION
This prospectus is part of a registration statement on Form SB-2 filed
under the Securities Act of 1933, as amended (which is referred to later as the
"Securities Act"). This prospectus does not contain all of the information in
the Registration Statement and its exhibits. Statements in this prospectus about
any contract or other document are just summaries. You may be able to read the
complete document as an exhibit to the Registration Statement.
eFoodSafety.com, Inc., when it becomes a fully reporting company, will
have to file reports under the Securities Exchange Act of 1934, as amended
(which is referred to later as the "Exchange Act"). You may read and copy the
Registration Statement and our report at the Securities and Exchange
Commission's (which is referred to later as the "Commission") public reference
rooms at 450 Fifth Street, N.W. Washington, D.C. 20549, Seven World Trade
Center, 13th Floor, New York, New York 10048. (You may telephone the
Commission's Public Reference Branch at 800-SEC-0330.) Our Registration
Statement and reports will also be available on the Commission's Internet site
at http ://www. sec.gov.
We intend to furnish our stockholders with annual reports containing
financial statements audited by an independent public accounting firm after the
end of each fiscal year.
17
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
Page
Independent Auditor's Report...........................................................F - 1
Balance Sheets
April 30, 2001 and 2000,
and October 31, 2001 (unaudited).....................................................F - 2
Statements of Operations for the
Years Ended April 30, 2001 and 2000,
and the Six Months Ended October 31, 2001 (unaudited)................................F - 3
Statement of Stockholders' Equity
Since October 28, 1996 (Inception) to April 30, 2001
and to October 31, 2001 (unaudited)..................................................F - 4
Statements of Cash Flows for the
Years Ended April 30, 2001 and 2000,
and the Six Months Ended October 31, 2001 (unaudited)................................F - 5
Notes to Financial Statements..........................................................F - 6
INDEPENDENT AUDITOR'S REPORT
eFoodSafety.com, Inc.
(Formerly DJH International, Inc.)
(A Development Stage Company)
We have audited the accompanying balance sheets of eFoodSafety.com, Inc.
(formerly DJH International, Inc.) (a development stage company) as of April 30,
2001 and 2000, and the related statements of operations and cash flows for the
years ended April 30, 2001 and 2000, and the statement of stockholders' equity
since October 28, 1996 (inception) to April 30, 2001. These financial statements
are the responsibility of the Company's management. Our responsibility is to
express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we 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.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of eFoodSafety.com,
Inc. (formerly DJH International, Inc.) (a development stage company) as of
April 30, 2001 and 2000, and the results of its operations and its cash flows
for the years ended April 30, 2001 and 2000 in conformity with generally
accepted accounting principles.
Respectfully submitted
/s/Robison, Hill & Co.
-----------------------------
Certified Public Accountants
Salt Lake City, Utah
May 8, 2001
F - 1
EFOODSAFETY.COM, INC.
(Formerly DJH International, Inc.)
(A Development Stage Company)
BALANCE SHEETS
(Unaudited)
October 31, April 30
-------------------------------
2001 2001 2000
--------------- --------------- --------------
Assets $ - $ - $ -
=============== =============== ==============
Liabilities $ 4,389 $ - $ -
--------------- --------------- --------------
Stockholders' Equity:
Common Stock, $.0005 Par Value
Authorized 50,000,000 shares, Issued
29,335,000 at October 31, 2001 and April 30,
2001 and 12,540,000 at April 30, 2000 14,668 14,668 6,270
Paid-In Capital 37,097 19,002 630
Deficit Accumulated During the
Development Stage (56,154) (33,670) (6,900)
--------------- --------------- --------------
Total Stockholders' Equity (4,389) - -
--------------- --------------- --------------
Total Liabilities and
Stockholders' Equity $ - $ - $ -
=============== =============== ==============
The accompanying notes are an integral part of these financial
statements.
F - 2
EFOODSAFETY.COM, INC.
(Formerly DJH International, Inc.)
(A Development Stage Company)
STATEMENTS OF OPERATIONS
Cumulative
since
(Unaudited) October 28,
For the 1996
Six Months For the year inception
Ended ended of
October 31, April 30, development
--------------------------------
2001 2001 2000 stage
--------------- ---------------- --------------- --------------
Revenues: $ - $ - $ - $ -
Expenses: 22,484 26,770 - 56,154
--------------- ---------------- --------------- --------------
Net Loss $ (22,484)$ (26,770)$ - $ (56,154)
--------------- ---------------- --------------- --------------
Basic & Diluted loss per share$ - $ - $ -
=============== ================ ===============
The accompanying notes are an integral part of these financial
statements.
F - 3
EFOODSAFETY.COM, INC.
(Formerly DJH International, Inc.)
(A Development Stage Company)
STATEMENT OF STOCKHOLDERS' EQUITY
SINCE OCTOBER 28, 1996 (INCEPTION) TO OCTOBER 31, 2001
Deficit
Accumulated
Since
October 28,
1996
Inception of
Common Stock Paid-In Development
Shares Par Value Capital Stage
--------------- -------------- -------------- --------------
Balance at October 28, 1996
(inception) - $ - $ - $ -
October 29, 1996 Issuance of
Stock for cash 2,090,000 1,045 5,455 -
Net Loss - - - (6,500)
--------------- -------------- -------------- --------------
Balance at April 30, 1997 as
originally reported 2,090,000 1,045 5,455 (6,500)
Retroactive adjustment for 6 to 1
stock split October 2, 2000 10,450,000 5,225 (5,225) -
--------------- -------------- -------------- --------------
Restated Balance at April 30, 1997 12,540,000 6,270 230 (6,500)
Net Loss - - - -
--------------- -------------- -------------- --------------
Balance at April 30, 1998 12,540,000 6,270 230 (6,500)
Capital contributed by shareholder - - 400 -
Net Loss - - - (400)
--------------- -------------- -------------- --------------
Balance at April 30, 1999 12,540,000 6,270 630 (6,900)
Net Loss - - - -
--------------- -------------- -------------- --------------
Balance at April 30, 2000 12,540,000 $ 6,270 $ 630 $ (6,900)
F - 4
EFOODSAFETY.COM, INC.
(Formerly DJH International, Inc.)
(A Development Stage Company)
STATEMENT OF STOCKHOLDERS' EQUITY
SINCE OCTOBER 28, 1996 (INCEPTION) TO OCTOBER 31, 2001
(continued)
Deficit
Accumulated
Since
October 28,
1996
Inception of
Common Stock Paid-In Development
Shares Par Value Capital Stage
--------------- -------------- -------------- --------------
Balance at April 30, 2000 12,540,000 $ 6,270 $ 630 $ (6,900)
October 16, 2000 Shares issued for
Acquisition of Global Procurement 16,795,000 8,398 - -
Capital contributed by shareholder - - 18,372 -
Net Loss - - - (26,770)
--------------- -------------- -------------- --------------
Balance at April 30, 2001 29,335,000 14,668 19,002 (33,670)
Capital contributed by shareholder - - 18,095 -
Net Loss - - - (22,484)
--------------- -------------- -------------- --------------
Balance at October 31, 2001
(unaudited) 29,335,000 $ 14,668 $ 37,097 $ (56,154)
=============== ============== ============== ==============
The accompanying notes are an integral part of these financial
statements.
F - 5
EFOODSAFETY.COM, INC.
(Formerly DJH International, Inc.)
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
Cumulative
(Unaudited) Since
For the October 28,
Six Months For the year 1996
Ended ended Inception of
October 31, April 30, Development
------------------------------
2,001 2001 2000 Stage
---------------- -------------- -------------- --------------
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net Loss $ (22,484)$ (26,770) $ - $ (56,154)
Non-Cash Operating Activities:
Stock issued for Acquisition of
Global Procurement Systems - 8,398 - 8,398
Increase in Accounts Payable 4,389 - - 4,389
---------------- -------------- -------------- --------------
Net Cash Used in operating activities (18,095) (18,372) - (43,367)
---------------- -------------- -------------- --------------
CASH FLOWS FROM INVESTING
ACTIVITIES:
Net cash provided by
investing activities - - - -
---------------- -------------- -------------- --------------
CASH FLOWS FROM FINANCING
ACTIVITIES:
Issuance of Common Stock - - - 6,500
Capital contributed by shareholder 18,095 18,372 - 36,867
---------------- -------------- -------------- --------------
Net Cash Provided by
Financing Activities 18,095 18,372 - 43,367
---------------- -------------- -------------- --------------
Net (Decrease) Increase in
Cash and Cash Equivalents - - - -
Cash and Cash Equivalents
at Beginning of Period - - - -
---------------- -------------- -------------- --------------
Cash and Cash Equivalents
at End of Period $ - $ - $ - $ -
================ ============== ============== ==============
F - 6
EFOODSAFETY.COM, INC.
(Formerly DJH International, Inc.)
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
(continued)
Cumulative
(Unaudited) Since
For the October 28,
Six Months For the year 1996
Ended ended Inception of
October 31, April 30, Development
------------------------------
2001 2001 2000 Stage
--------------- -------------- -------------- --------------
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the year for:
Interest $ - $ - $ - $ -
Franchise and income taxes $ - $ - $ - $ -
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:
- -----------------------------------------------------------------------
On October 16, 2000, the Company purchased Global Procurement Systems,
Inc. ("GPS"). The purchase price was 16,795,000 shares of common stock in
exchange for assets valued at $8,398 .
The accompanying notes are an integral part of these financial
statements.
F - 7
EFOODSAFETY.COM, INC.
(Formerly DJH International, Inc.)
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED APRIL 30, 2001 AND 2000
AND THE SIX MONTHS ENDED OCTOBER 31, 2001 (UNAUDITED)
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
This summary of accounting policies for eFoodSafety.com, Inc. (formerly
DJH International, Inc.) (a development stage company) is presented to assist in
understanding the Company's financial statements. The accounting policies
conform to generally accepted accounting principles and have been consistently
applied in the preparation of the financial statements.
Interim Reporting
The unaudited financial statements as of October 31, 2001 and for the
six month period then ended reflect, in the opinion of management, all
adjustments (which include only normal recurring adjustments) necessary to
fairly state the financial position and results of operations for the six
months. Operating results for interim periods are not necessarily indicative of
the results which can be expected for full years.
Organization and Basis of Presentation
The Company was incorporated under the laws of the State of Nevada on
October 28, 1996. Since October 28, 1996 the Company is in the development
stage, and has not commenced planned principal operations.
Nature of Business
The company has no products or services as of April 30, 2001. The
Company was organized as a vehicle to provide methods and products to ensure the
safety of fruits and vegetables being marketed worldwide.
Cash and Cash Equivalents
For purposes of the statement of cash flows, the Company considers all
highly liquid debt instruments purchased with a maturity of three months or less
to be cash equivalents to the extent the funds are not being held for investment
purposes.
Pervasiveness of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles required management to make estimates and
assumptions that affect the reported amounts
F - 8
EFOODSAFETY.COM, INC.
(Formerly DJH International, Inc.)
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED APRIL 30, 2001 AND 2000
AND FOR THE SIX MONTHS ENDED OCTOBER 31, 2001 (UNAUDITED)
(Continued)
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(Continued)
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.
Loss per Share
The reconciliations of the numerators and denominators of the basic loss
per share computations are as follows:
Per-Share
Income Shares Amount
------ ------ ------
(Numerator) (Denominator)
For the six months ended October 31, 2001 (unaudited)
------------------- ----------------- --------------
Basic Loss per Share
Loss to common shareholders $ (22,484) 29,335,000 $ -
==================== ================= ==============
For the year ended April 30, 2001
Basic Loss per Share
Loss to common shareholders $ (26,770) 21,604,699 $ -
==================== ================= ==============
For the year ended April 30, 2000
Basic Loss per Share
Loss to common shareholders $ - 12,540,000 $ -
==================== ================= ==============
The effect of outstanding common stock equivalents would be
anti-dilutive for April 30, 2001 and 2000, and for October 31, 2001 and are thus
not considered.
Concentration of Credit Risk
The Company has no significant off-balance-sheet concentrations of
credit risk such as foreign exchange contracts, options contracts or other
foreign hedging arrangements. The Company maintains the majority of its cash
balances with one financial institution, in the form of demand deposits.
F - 9
EFOODSAFETY.COM, INC.
(Formerly DJH International, Inc.)
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED APRIL 30, 2001 AND 2000
AND FOR THE SIX MONTHS ENDED OCTOBER 31, 2001 (UNAUDITED)
(Continued)
NOTE 2 - INCOME TAXES
As of April 30, 2001, the Company had a net operating loss carryforward
for income tax reporting purposes of approximately $33,000 that may be offset
against future taxable income through 2020. Current tax laws limit the amount of
loss available to be offset against future taxable income when a substantial
change in ownership occurs. Therefore, the amount available to offset future
taxable income may be limited. No tax benefit has been reported in the financial
statements, because the Company believes there is a 50% or greater chance the
carryforwards will expire unused. Accordingly, the potential tax benefits of the
loss carryforwards are offset by a valuation allowance of the same amount.
NOTE 3 - DEVELOPMENT STAGE COMPANY - GOING CONCERN
The Company has not begun principal operations and as is common with a
development stage company, the Company has had recurring losses during its
development stage. 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, nor does it have an established source of revenues
sufficient to cover its operating costs and to allow it to continue as a going
concern. In the interim, shareholders of the Company have committed to meeting
its minimal operating expenses.
NOTE 4 - COMMITMENTS
As of April 30, 2001 all activities of the Company have been conducted
by corporate officers from either their homes or business offices. Currently,
there are no outstanding debts owed by the company for the use of these
facilities and there are no commitments for future use of the facilities.
NOTE 5 - COMMON STOCK TRANSACTIONS
On October 29, 1996, the Company issued approximately 2,090,000 shares
of common stock to its officers and directors for payments made on the Company's
behalf during its formation in the amount of approximately $6,500.
On October 2, 2000, the Company declared a 6 to 1 stock split of its
shares of common stock, par value $.0005 per share. As a result of the split,
10,450,000 shares were issued and Paid-In
F - 10
EFOODSAFETY.COM, INC.
(Formerly DJH International, Inc.)
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED APRIL 30, 2001 AND 2000
AND FOR THE SIX MONTHS ENDED OCTOBER 31, 2001 (UNAUDITED)
(Continued)
NOTE 5 - COMMON STOCK TRANSACTIONS (continued)
Capital was decreased by $5,225. All references in the accompanying financial
statements to number of common shares and per-share amounts for 2001 and 2000
have been restated to reflect the stock split.
NOTE 6 - RELATED PARTY TRANSACTIONS
During the years ended April 30, 2001 and 2000, and the six months ended
October 31, 2001, shareholders have paid general and administrative expenses on
behalf of the Company. These payments have been treated as paid-in capital to
the Company. The amount of paid-in capital contributed by shareholders totaled
$18,372 and $-0- for the years ended April 30, 2001 and 2000 respectively, and
$18,095 for the six months ended October 31, 2001.
NOTE 7 - ACQUISITION
On October 16, 2000, the Company entered into an agreement and plan of
reorganization with Global Procurement Systems, Inc. ("GPS") whereby the Company
acquired GPS. This business combination was accounted for as a purchase with the
operations of GPS being included in the income statement from October 16, 2000.
As a result of the acquisition, the Company issued 16,795,000 shares of common
stock in exchange for the outstanding shares of GPS and changed its name to
eFoodSafety.com, Inc.
These unaudited pro forma condensed combined statements of operations
are based on the April 30, 2001 and 2000 historical financial statements of the
Company and the unaudited financial statements of GPS, with the Company treated
as the acquiring entity for financial reporting purposes. The unaudited pro
forma condensed combined statement of operations presents the results of
operations of the Surviving Corporation, assuming the acquisitions were
completed on May 1, 2000 (for the Year ended April 30, 2001) and May 1, 1999
(for the Year ended April 30, 2000).
The unaudited pro forma condensed combined financial statements have
been prepared by management of the Company and GPS. These pro forma statements
may not be indicative of the results that actually would have occurred if the
combination had been in effect on the dates indicated or which may be obtained
in the future. These pro forma financial statements should be read in
conjunction with the accompanying notes and the historical financial information
of the Company.
F - 11
EFOODSAFETY.COM, INC.
(Formerly DJH International, Inc.)
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED APRIL 30, 2001 AND 2000
AND FOR THE SIX MONTHS ENDED OCTOBER 31, 2001 (UNAUDITED)
(Continued)
NOTE 7 - ACQUISITION (continued)
Unaudited Pro Forma Statements of Operations
for the Year Ended April 30, 2001
Pro Forma
(Unaudited) Pro Forma Combined
eFoodSafety GPS Adjustments Balance
--------------- ---------------- --------------- -------------
Revenues: $ - $ - $ - $ -
Expenses: 26,770 41,374 (8,398) A 59,746
--------------- ---------------- --------------- -------------
Net Loss $ (26,770)$ (41,374)$ 8,398 $ (59,746)
--------------- ---------------- --------------- -------------
Unaudited Pro Forma Statements of Operations
for the Year Ended April 30, 2000
Pro Forma
(Unaudited) Pro Forma Combined
eFoodSafety GPS Adjustments Balance
--------------- ---------------- --------------- --------------
Revenues: $ - $ - $ - $ -
Expenses: - 127,041 - 127,041
--------------- ---------------- --------------- --------------
Net Loss $ - $ (127,041)$ - $ (127,041)
--------------- ---------------- --------------- --------------
The adjustments to the unaudited pro forma condensed combined statements
of operations are described below:
(A) Reduction of costs which had been expensed by the Company and prior
to the acquisition had also been expensed by GPS.
F - 12
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 24. INDEMNIFICATION OF OFFICERS AND DIRECTORS
Section 78(1)(2)(3) & (4) of the Nevada Revised Statutes (the "NRS")
permits corporations to indemnify a director, officer or control person of the
corporation or its stockholders for any liability asserted against him and
liability and expenses incurred by him in his capacity as a director, officer,
employee or agent, or arising out of his status as such, whether or not the
corporation has the authority to indemnify him against such liability and
expense. Our Articles of Incorporation and By-laws do not include such a
provision automatically indemnifying a director, officer or control person of
the corporation or its stockholders for any liability asserted against him and
liability and expenses incurred by him in his capacity as a director, officer,
employee or agent, or arising out of his status as such.
Our By-laws, Article X Section 3, do permit us to secure insurance on
behalf of any officer, director, employee or other agent for any liability
arising out of his or her actions in such capacity, regardless of whether or not
Nevada law would permit indemnification.
ITEM 25. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The estimated expenses of the offering, all of which are to be borne by
the Registrant, are as follows:
SEC Filing Fee $ 13*
Printing Expenses $ 2,000*
Accounting Fees and Expenses $ 3,000*
Legal Fees and Expenses $ 15,000*
Blue Sky Fees and Expenses $ 5,000*
Registrar and Transfer Agent Fees $ 500
Miscellaneous $ 1,000*
Total $ 26,513
*Estimated Amounts
All expenses of the registration will be borne by eFood.
ITEM 26. RECENT SALES OF UNREGISTERED SECURITIES
The following securities of eFoodSafety.com, Inc. were issued by eFood
within the past two (2) years and were not registered under the Securities Act
of 1933. Upon incorporation there were 2,090,000 shares of common stock issued
pursuant to the exemption from registration contained within Section 4(2) of the
Securities Act of 1933, to company officers and directors. Pursuant to a Board
resolution of the corporation a forward split of 6 to 1 was completed and a
reorganization occurred on October 16, 2000 and an additional 27,245,000 shares
were issued from treasury for due consideration from the merging corporation.
ITEM 27. EXHIBITS.
The following Exhibits are filed as part of this Registration Statement pursuant
to Item 601 of Regulation S-B:
EXHIBIT NUMBER DESCRIPTION
- ------- ------ -----------
3.1 Articles of Incorporation
3.2 Corporate By-Laws
4.1 Form of Common Stock Certificate
5.1 Consent and Opinion of Counsel
23.1 Consent of Robison, Hill & Co.
23.2 Consent of Richard E. Daniels, Esq. (See 5.1)
ITEM 28. UNDERTAKINGS.
(a) The undersigned Company hereby undertakes to:
(1) File, during any period in which it offers or sells securities, a post
effective amendment to this Registration Statement to:
i. Include any prospectus required by Section I (a)(3) of the
Securities Act of 1933 (the "Securities Act");
ii. Reflect in the prospectus any facts or events which,
individually or together, represent a fundamental change in
the information in the Registration Statement.
iii. Include any additional or changed material information on the
plan of distribution.
(2) For determining liability under the Securities Act, each
post-effective amendment shall be treated as a new registration statement
of the securities offered, and the offering of the securities at that time
shall be deemed to be the initial bona fide offering.
(3) File a post-effective amendment to remove from registration any of the
securities that remain unsold at the end of the offering.
b) Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to Directors, Officers and controlling persons of
eFood pursuant to the foregoing provisions, or otherwise, eFood has been
advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Securities
Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities
(other than the payment by eFood of expenses incurred or paid by a Director,
Officer or a controlling person of eFood in the successful defense of any
action, suit or proceeding) is asserted by such Director, Officer or controlling
person in connection with the securities being registered, eFood will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of competent jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Securities
Act and will be governed by the final adjudication of such issue.
SIGNATURES
In accordance with the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
the requirements for filing on Form SB-2 and authorized this registration
statement to be signed on its behalf by the undersigned, in the city of Visalia,
California, on April 24, 2002.
EFOODSAFETY.COM, INC.
BY: /s/ Patricia Ross
Patricia Ross
President/Treasurer/Director
In accordance with the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons in the
capacities and on the dates stated.
SIGNATURE TITLE DATE
/s/ Patricia Ross President, Treasurer, Director April 24, 2002
----------------
/s/ Clarence W. Karney CEO, Secretary. Director April 24, 2002
---------------------
/s/ Lindsey Lee Chief Financial Officer April 24, 2002
--------------