SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM SB-2/A
AMENDMENT NO. 4
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
As filed with the Securities and Exchange Commission on February 3, 2003
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.)
2302 Shoreham Court, Suite E
Bel Air, MD 21015
(443) 512-0585 Phone
(443) 512-0585 Fax
(Address and telephone number of Registrant's principal
executive offices and principal place of business)
Patricia Ross, President
eFoodSafety.com, Inc.
2302 Shoreham Court, Suite E
Bel Air, MD 21015
Michael J. Daniels
3350 N. Durango
Suite 1016
Las Vegas, Nevada 89129
(702) 395-4528 Phone
(702) 395-2617 Fax
(Name, address, and telephone number of agent for service)
Copies to:
Daniels, McGowan & Associates
275 North Lindbergh Blvd.
St. Louis, MO 63141
Richard E. Daniels, Esq.
314-993-4261 Phone
314-993-3367 Fax
APPROXIMATE DATE OF PROPOSED SALE TO THE PUBLIC: As soon as practicable after
this Registration Statement becomes effective.
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. I---- /
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. I---- /
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. I---- /
If the delivery of the prospectus is expected to be made pursuant to Rule 434,
check the following box. I---- /
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. I---- /
CALCULATION OF REGISTRATION FEE
Title of Each Dollar Proposed Proposed
Class of Amount Maximum Maximum Amount of
Securities Securities to to be Price Aggregate Registration
be Registered Registered Per Share Price Fee
Common Stock 12,540,000 $.003 $37,620* $13
$.0005 par value
* Estimated solely for purposes of calculating the registration fee.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT 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 STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE INACCORDANCE 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 SECTION 8(A), MAY
DETERMINE.
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EFOODSAFETY.COM, INC.
CROSS REFERENCE SHEET
ITEM NUMBER IN FORM SB-2 AND TITLE OF ITEM LOCATION IN PROSPECTUS
Item 1. Front of Registration Statement and
Outside Front Cover of Prospectus Cover Page
Item 2. Inside Front and Outside Back Cover Inside Front and
Pages of Prospectus 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, Directors, Executive Officers,
Promoters and Control Persons Promoters and Control Persons
Item 11. Security Ownership of Certain Beneficial Security Ownership of Certain
Owners and Management Beneficial Owners and Management
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 Disclosure of Commission Position
of Officers and Directors on Indemnification of Officers and
Directors
Item 15. Organization within Last Five years Description of Business and Plan
of Operation
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Item 16. Description of Business Description of Business and Plan
of Operation
Item 17. Management's Discussion and Analysis Description of Business and
or Plan of Operation Plan of Operation
Item 18. Description of Property Description of Property
Item l9. Certain Relationships and Related Transactions Certain Relationships and Related
Transactions
Item 20. Market for Common Equity and Related Plan of Distribution; Shares
Stockholder Matters Eligible for Future Use
Item 21. Executive Compensation Executive Compensation
Item 22. Financial Statements Financial Statements
Item 23. Changes In and Disagreements with Accountants on Changes In and Disagreements with
Accounting and Financial Disclosure Accountants on Accounting and
Financial Disclosure
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
SUBJECT TO COMPLETION, DATED FEBRUARY 3, 2003
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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. The selling shareholders will sell at a price of $1.00
per share until our shares are quoted on the OTC Bulletin Board and thereafter
at prevailing market prices or privately negotiated prices. eFoodsafety.com 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 common stock.
-------------------------------------
Neither the SEC nor any state securities commission has approved or disapproved
these securities or determined if this Prospectus is truthful or compete. 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 offer to buy our stock in any state where the offer or sale is not
permitted.
-------------------------------------
The date of this Prospectus is February 3, 2003.
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TABLE OF CONTENTS
Page
Prospectus Summary 7
Risk Factors 7
Use of Proceeds 12
Determination of Re-Sale Price 12
Selling Shareholders 12
Plan of Distribution 14
Legal Proceedings 14
Directors, Executive Officers, Promoters
and Control Persons 14
Business Experience of Directors 15
Security Ownership of Certain
Beneficial Owners and Management 16
Description of Securities 17
Shares Eligible for Future Sale 18
Description of Business and Plan of Operation 18
Interest of Named Experts and Counsel 24
Transfer Agent and Registrar 24
Disclosure of Commission Position on Indemnification
for Securities Act Liabilities 24
Description of Property 25
Certain Relationships and Related Transactions 25
Executive Compensation 26
Additional Information 26
Until 90 days after the effective date, all dealers that effect transactions in
these shares, whether or not participating in this offering, 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 offering
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
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.
In this prospectus, references to the "company", "eFood", "we", "us", and "our"
refer to eFoodSafety.com, Inc.
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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 its 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 offered hereby 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. Our 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 YOU ENTIRE INVESTMENT.
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. Although we
expect to be profitable for the year ending December 31, 2002, we cannot assure
that a year-end profit will be realized or that profitability will continue in
the future. In addition we are in poor financial condition from lack of capital.
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(2) RISK OF ENTERING INTO TRANSACTIONS WITH PARTIES RELATED TO THE COMPANY
Our company intends to enter into an agreement with Clarence W. Karney, who is
our CEO and a Director of the Company, for the right to use the Global
Inspection Service (GIS) that is a concept created by Mr. Karney. The company
plans to negotiate an agreement whereby GIS can be implemented and offered as a
standard service. No contract has been entered into to date although a letter of
intent to contract has been signed. Failure to reach a definitive agreement with
Mr. Karney for the right to offer GIS could adversely affect the company's
ability to continue in business. Furthermore, no assurances can be given that a
contract entered into would be the product of arms length negotiations and
result in terms favorable to the Company.
Additionally, Mr. Karney has personally made offers to purchase property in both
Fresno County, California and Nogales, Arizona that are intended to be used by
the company for cold storage and processing. Mr. Karney has also agreed to make
earnest money deposits should any be required before a final agreement of sale
can be reached. Failure to reach an agreement of sale for these facilities, or
similar facilities, could adversely affect the company's ability to conduct
business. Furthermore, if the properties were to come under Mr. Karney's
ownership or control, no assurances can be given that a final sales contract
with the company would be the result of arms length negotiations with terms
favorable to the Company.
(3) 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 contracts and relationships,
especially within the fresh fruit and vegetable industry.
(4) 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. We have no operating history or any revenues from operations. We
have no assets or financial resources. We have 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.
(5) 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.
While the market for sanitation products for fruits and vegetables is intensely
competitive, the specific niche the company is entering also carries with it a
high degree of risk. We have no operating history or any revenues from
operations. We have no significant assets or financial resources. We have
operated at a loss and will continue to do so for some time or at least until
the company has obtained financing and can fully execute its business plan. The
success of the company will depend to a great extent on Patricia Ross and her
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select management team. There is no assurance that these individuals will remain
with the company due to the lack of employment contracts.
(6) RISK OF INCURRING HIGH LEGAL COST DUE TO LITIGATION.
While the company is not currently involved in any litigation, that is no
indication that the company will be precluded from being sued in the future. In
the past, especially during periods of market volatility, securities class
action litigation has often been instituted against companies similar to ours.
Such litigation, if instituted, could result in substantial costs and diversions
of management's attention and resources, which could have a material adverse
effect on our business, results of operations and financial condition.
(7) RISK OF EXTERNAL INFLUENCES
The price or our stock could be affected by external influences, which are
beyond our control. Examples of these influences are:
o An abrupt economic change resulting in an unexpected downturn
in demand;
o Governmental restrictions or excessive taxes on imports;
o Over-abundance of products and services related to the
sanitation industry;
(8) RISKS 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 imposes additional
sales practice requirements on broker-dealers effecting transactions in penny
stocks. In most instances, unless the purchaser a penny stock is (1) and
institutional accredited investor, (ii) the issuer, (iii) a director, officer,
general partner or beneficial owner of more than five per cent (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 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.
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(9) 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 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."
(10) RISK DUE TO LACK OF FUNDS
The company presently lacks sufficient funds to begin operations. No products or
services are presently being offered.
(11) RISKS DUE TO RESALE RESTRICTIONS IMPOSED BY STATE "BLUE SKY LAWS"
There are state regulations, which might affect the transferability of our
shares. We have not registered its shares for resale under the securities or
"blue sky" laws of any state and we have no plans to register or qualify its
shares in 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 restrictions upon the ability of new
investors to purchase the securities.
SEC and "blue sky" laws, regulations, orders, or interpretations place
limitations on offerings or sales of securities by development stage companies,
or if such securities represent "cheap stock" previously issued to promoters or
others. These limitations typically provide, in the form of one or more of the
following limitations, that such securities are:
o not eligible for sale under exemption provisions permitting
sales without registration to accredited investors or
qualified purchasers;
o not eligible for the transactional exemption from registration
for non-issuer transactions by a registered broker-dealer;
o not eligible for registration under the simplified small
corporate offering registration (SCOR) form available in many
states;
o required to be placed in escrow and the proceeds received held
in escrow subject to various limitations; or
o not permitted to be registered or exempted from registration,
and thus not permitted to be sold in the state under any
circumstances.
Virtually all 50 states have adopted one or more of these limitations, or other
limitations or restrictions affecting the sale or resale of stock of development
stage companies, or "cheap stock" issued to promoters or others.
Specific limitations on offerings by development stage companies have been
adopted in:
Alaska Maryland Rhode Island
Arkansas Nebraska South Carolina
California New Mexico South Dakota
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Delaware Ohio Tennessee
Florida Oklahoma Utah
Georgia Oregon Vermont
Idaho Pennsylvania Washington
Indiana
Any secondary trading market, which may develop, may only be conducted in those
jurisdictions where an applicable exemption is available or where the shares
have been registered.
FORWARD-LOOKING STATEMENTS
This prospectus contains statements that plan for or anticipate the future.
Forward-looking statements include statements about the future of the food
safety and sanitation industry, 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) changes in general economic and business conditions affecting the worldwide
food safety and sanitation industry;
(B) government restrictions or excessive taxes and tariffs on imports and
exports;
(C) technical developments that make our services obsolete;
(D) our costs in the pricing of our products and the economic resources to
support the retail and wholesale promotion of new products and services;
(E) the level of demand for our products, expansion plans and access to
potential clients and advances in technology; and
(F) a lack of working capital could hinder the promotion and distribution of
products and services to a broader wholesale population.
USE OF PROCEEDS
The principal purpose of this registration statement 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 registered for resale under the Securities Act. While we will bear the
expenses of the registration of the shares, we 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.
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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. Management has arbitrarily
established the re-sale price of $1.00 per share. The selling shareholders will
be required to sell their shares, if possible, at a price of $1.00 per share
until the shares are quoted on the OTC Bulletin Board and thereafter at
prevailing market prices or privately negotiated prices.
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.
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 DJH International, Inc. on October 29,
1996 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 Maximum No. Maximum No.
Name of Beneficially of Shares to be of Shares to be
Security Owned Prior % Owned Registered Pursuant Owned if All
Holder to Registration Prior to this Prospectus Shares are Sold
Regency
Financial
Services, Ltd. 2,347,500 8.00 2,347,500 0
Berkshire Capital
Management
Co., Inc. 2,292,500 7.81 2,292,500 0
Gina Della Femina 100,000 0.34 100,000 0
Steven A. Sanders 100,000 0.34 100,000 0
Laurence and
Elisabeth Paredes 15,000 0.05 15,000 0
Ronald Sparkman 2,040,000 6.95 2,040,000 0
Stone Castle
Keep, Inc. 2,040,000 6.95 2,040,000 0
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Shares Maximum No. Maximum No.
Name of Beneficially of Shares to be of Shares to be
Security Owned Prior % Owned Registered Pursuant Owned if All
Holder to Registration Prior to this Prospectus Shares are Sold
John M. Peragine 525,000 1.79 525,000 0
James Mylock, Jr. 525,000 1.79 525,000 0
Andreas Lintzeris 525,000 1.79 525,000 0
Jon Callahan 525,000 1.79 525,000 0
Daniel Grieco 10,000 0.03 10,000 0
Amanda E. Johnson 525,000 1.79 525,000 0
Milton Irizarry 525,000 1.79 525,000 0
John C. Sypek 325,000 1.10 325,000 0
Diane J. Harrison 500 0.001 500 0
William B. Harrison, II 500 0.001 500 0
Norman Davis 500 0.001 500 0
Sheryl Cerasani 500 0.001 500 0
Eileen Daniels 500 0.001 500 0
Daniel Terzo 500 0.001 500 0
Lynnette Sparks 500 0.001 500 0
Debra Lynn Hensen 500 0.001 500 0
Sandra Taunton 500 0.001 500 0
Wilma J. and
William B. Harrison 500 0.001 500 0
Donald and Cathy
Hejmanowski 500 0.001 500 0
Arthur Rigsby 500 0.001 500 0
Michael J. Daniels 114,000 0.389 114,000 0
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, if possible, at a price of $1.00 per
share until the shares are quoted on the OTC Bulletin Board and thereafter at
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prevailing market prices or privately negotiated prices, 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. We have been advised by the
Selling Shareholders that they presently intend to dispose of the shares at a
price of $1.00 per share until our shares are quoted on the OTC Bulletin Board,
and thereafter 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.
We have 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 our 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 our common stock for both initial sales 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.
DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS
AND CONTROL PERSONS
We currently have no paid full time employees. The management team consisting of
the following individuals is conducting the business of the company:
NAME POSITION AGE
Patricia Ross President/Treasurer/Director 60
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Clarence W. Karney CEO/Secretary/Director 59
Lindsey Lee CFO 41
Scott McFee VP Operations/Director 43
Raymond Klocke Director 57
Thomas Gunn Director 62
BUSINESS EXPERIENCE OF DIRECTORS
PATRICIA ROSS is the President/Treasurer and a Director and has served in those
capacities since the merger of DJH International, Inc. and Global Procurement
Systems now renamed eFoodSafety.com, Inc. Ms. Ross has been selected as one of
the ten most influential women in the transportation and travel industry and
honored as one of the 100 most influential women in Arizona.
Ms. Ross was Vice President of Food Safety Systems and an integral part of the
company's successful public offering in the summer of 1999. Ms. Ross was with
Prime World Travel, Inc. and succeeded in the turnaround of this net-deficit
organization by achieving a 375% turnaround in annual sales. Ms. Ross 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 President of the Board of Directors for the Arizona Small
Business Association.
WILLIAM KARNEY, Chairman and CEO, has over nineteen years experience with the
Federal Government Department of Defense and the USDA. He founded Karney &
Associates and spent fifteen years building the company as a leader in the
operations and inspections of fresh fruit and vegetables from Central America.
Mr. Karney is 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.
LINDSEY LEE, CFO is a licensed Attorney, CPA and Chartered Financial Analyst.
Mr. Lee was a founding partner in Bond, Taylor and Lee, LLP. Mr. Lee held
positions with Arthur Andersen and Kenneth Leventhal & Company.
SCOTT MCFEE, Director, has over ten years experience 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 Monte, Mr. McFee was employed at Sea-Land
Service for seven years in various supervisory and advisory positions.
RAYMOND KLOCKE, Director, is a former Vice-President of Sales, Marketing and
Business Development for Chiquita Tropical Products. Prior to this position, 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
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company. Preceding this position, Mr. Klocke was a Vice-President at Safeway,
one of the world's largest retailers. Mr. Klocke has held posts as Chairman of
the United Way and President of the Produce Marketing Association.
THOMAS GUNN, Director, is a former Chairman and Chief Executive Officer of
Adidas Southwest and a former President of Strohs 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 is the Executive Director of the
Arizona Small Business Association and is a founder of the Arizona Forum.
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
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
offering 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.
Percentage of Outstanding After Registration
Name and Shares Common
Address of Beneficially Stock Prior
Beneficial Owner Owned (1) to Registration Minimum Maximum
Joseph Fiore (2)
670 White Plains Rd.
Suite 120
Scarsdale, NY 10583 4,640,000 15.82 4,640,000 4,640,000
Ron Sparkman (3)
10616 Brown Fox Trail
Littleton, CO 80125 4,080,000 13.91 4,080,000 4,080,000
Clarence W. Karney
3244 Oakview Drive
Visalia, CA 93277 8,397,500 28.63 8,397,500 8,397,500
Patricia Ross
350 West Caldwell Ave.
Visalia, CA 9327 8,397,500 28.63 8,397,500 8,397,500
All Officers and
Directors as a group
(4 in number) 16,795,000 57.25 16,795,000 16,795,000
16
(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.
(2) Includes 2,292,500 shares owned by Berkshire Capital Management Co., Inc.
and 2,347,500 shares owned by Regency Financial Services, Ltd. Both companies
are located at the above address and are under the control of Mr. Fiore.
(3) Includes 2,040,000 shares owned by Stone Castle Keep Inc., a company under
the control of Mr. Sparkman. The address of Stone Castle Keep, Inc. is 10616
Brown Fox Trail, Littleton, Colorado, 80125.
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 33 shareholders. Upon the
effectiveness of this registration statement, we will have 12,540,000
outstanding common shares registered for resale by the selling shareholders in
accordance with the Securities Act of 1933.
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.
17
Dividends
We don't plan to pay dividends at this time. We don't expect to pay dividends on
common stock anytime soon. Our board will decide on any future payment of
dividends, depending on our results of operations, financial condition, capital
requirements, and any other relevant factors.
Presently in the by-laws there are no provisions 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, we will have 12,540,000
shares of common stock outstanding and registered for resale by the Selling
Shareholders in accordance with the Securities Act of 1933.
Prior to this offering, 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, 2996 as DJH
International, Inc. to market products through the Internet. The founder,
Michael J. Daniels, saw a 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.
18
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 our common stock.
The U.S. Department of Agriculture has estimated that less than 2% of all fruits
and vegetable 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 1600, 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 it
is growing in the field. The residue is left on the product under the normal
packing process. Pathogens are bacteria typically classified as Salmonella,
Listeria, and eColiH157. Please note that the Food Safe Process effectively
removes both pesticides and pathogens. The Food Safety Program is intended to be
a 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 (HACCP) requirements. The
data supplied by the monitoring device is sent to the USDA to insure compliance
with HACCP standards.
A "run-through" will be completed after the company has acquired a facility, set
up production lines, tested equipment, and insured that all FDA standards have
been met or exceeded. From the time the company is in receipt of the initial
(pre-opening) funding and it takes possession of the facility, the first test
run will be in thirty (30) days of that point. The company will be fully
operational, including equipment, labor, sales, and product testing,
approximately two (2) days after the test run. eFood's marketing plans will be
initiated immediately and those clients currently awaiting commencement will be
serviced.
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 company
has started the preliminary paperwork required for the patent application
submission.
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 parties in the fruit and vegetable industry, as well as
various government officials. The company sales staff will carry out its
marketing plan in the areas of produce sales, equipment sales, food safe audits,
and distribution center access. The local marketing areas are the states of
Arizona, California, Maryland, Nevada, Oregon and Washington.
The products and services provided by eFoodSafety are available in an array of
formats. Our customers would not have to seek a membership to join the food safe
19
program. We intend to supply machinery and materials to those patrons who will
be leasing/purchasing the equipment and performing the process at their own (the
vendor) facility. Please note that the equipment will be custom fabricated by
eFoodSafety.com, thus causing the company to require a portion of the desired
funding amount in order to outlay any initial manufacturing costs. By performing
the process in the vendor's facility, it will give an extended shelf life to the
produce, including a reduction in pathogens, and an impression of sanitization
to the end-customer, but the product will not meet any certification for
Government standards due to cross contamination in packing, shipping, delivery,
etc.
For the entire sanitization program to be deemed efficient, the process must be
completed at the company facility. The results of such process shall exceed any
FDA/USDA standards. As stated above, the company offers a variety of services
implemental in a multitude of environments.
Therefore, billing for the company's products and services must be determined on
a case-by-case basis further described below:
Outline of the sanitization process listed by service and cost if the
client brings the produce to the company-owned facility for processing.
This process exceeds any FDA, USDA Standards:
1. Inspection of Product Cost per unit $ .10
2. Handling Product before Processing Cost per unit $ .15
3. Food Safety Process/Packaging Cost per unit $2.50
4. Chemical Inspection Cost per unit $ .25
5. Sanitizing the Truck Cost per unit $ .15
6. Cost of Delivery of Product Cost per unit $1.75
Total Cost per unit $4.65
Please note that all prices are subject to change.
Outline of a la carte services available at the company-owned facility
without utilizing the sanitization process:
1. Load Consolidation Cost per unit $ 1.00
2. Store Drop Delivery Cost per unit $ 1.50
3. Repacking Cost per unit $ 2.25
4. Storage Cost per unit $ .50
5. Sales/Marketing Cost per unit $ 1.00
6. Transportation Cost per load $250.00
Please note that all prices are subject to change.
Outline of services available at the customer's facility, not including
the cost for leasing/purchasing eFood approved equipment:
1. Process Cost per unit $ .30
Please note that a unit could be defined as follows: a) trays
(berries); b) cartons (oranges, peppers, bananas); c) lugs (grapes,
tomatoes); d) sacks (potatoes, cucumbers), etc.
20
The program will use common materials, as will the manufacture of equipment, so
that 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.
The commencement of operations is contingent upon receipt of funding. The
company requires approximately $1.8 million prior to the commencement of
operations.
These funds will enable our company to be fully operational and generate
revenues in forty-five days from the date of funding. However a specific plan of
operations for the next twelve (12) months has been outlined as follows:
First 45 Days (Pre-Opening)
Set Up West Coast Facility
Set Up All administrative operations for the west coast
facility including job descriptions, & hiring for positions
Set Up Safe Processing Room Start Food Safe Audit Program
Start Food Safe Audit Program Start Quality Condition
Inspection Program Write Contracts for all services Run
Through of Food Safe Process Begin Patent Process for Food
Safe Process Start equipment manufacturing of truck washers
Start writing the specifications for all government agencies
of Food Safe produce, eggs, poultry and meat
Month One
Food Safe Produce Process west coast facility in full
operation All services in operation at west coast facility Set
contracts for all food safe products Start selling Food Safe
Produce to government agencies Start retail, food service
sales of Food Safe Produce Open negotiations for Mexico
boarder facility Open truck washing facilities Open
negotiations for New York/ New Jersey facility
Month Two
Increase equipment sales Open three truck-washing facilities
Open first Mexico border facility Increase food safe audit
program
Increase our brand name Food Safe produce sales operations
21
Month Three
Open first facility in New York/ New Jersey Increase
government contracts Expand quality inspection program
Increase first operation on the Mexico border Open three more
truck washing facilities Increase equipment sales
Month Four
Increase volume of Food Safe produce sales of east and west
facilities Introduce seminars reference word food safety
Increase government services for food safety Open two
truck-washing facilities
Month Five
Start the process to open first port facility Open next
facility on the Mexico border Increase Food Safe audit program
Open five truck-washing facilities
Month Six
Increase contract client base Expand sales for the New
York/New Jersey facility Open four truck-washing facilities
Month Seven
Open first port facility on the east coast Expand Food Safe
audit program to Mexico and Canada Expand the government sales
program
Month Eight
Open a concentrated advertising program for our food safe
Increase client base for inspection, chemical inspection Open
five truck-washing facilities
Month Nine
Increase sales at all facilities
Look for join venture partners
Open three truck-washing facilities
Month Ten
Survey international market place Start international sale of
Food Safe Produce Open additional Mexico border facility Open
four truck-washing facilities Start first operation in New
Zealand
22
Month Eleven
Increase Sales at all facilities
Open the Health Food Produce Program
Open discussion with the Food Drug Administration, Customs and
United States
Department of Agriculture for Food Safe Audit Programs
Open seven truck-washing facilities
Month Twelve
Evaluate opening three facilities for the south, central and
northwest United States
Move into the South American markets
Increase international Food Safe Audit program Expand into the
organic produce market Open twelve truck-washing facilities
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 operating of
traditional sales and distribution outlets. We believe that on-line marketing
will be effective and that others will emulate our business model.
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 market place including, but not limited to:
. 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;
. Safeway, Albertons's, Winn Dixie, Publix, Kroger, Food Lion, Stop &
Shop, Wegman's, Giant Foods, Path Mart, Cash & Carry and Raley's;
. 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.
. Private inspection services such as McDonalds's Inspections and FBI
Inspections.
23
The only license 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. The company intends to apply for its PACA license upon the
successful completion of this registration and completing the application. No
other steps are necessary and the application process will take approximately 30
days before receipt of the license.
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. The company has no
payroll. Mr. Karney, his colleagues, and associates plan to devote one hundred
percent of their professional time to the success of the business upon the
effectiveness of this Registration Statement and receipt of funding for the
proposed plan of operations.
INTEREST OF NAMED EXPERTS AND COUNSEL
The law firm of Daniels, McGowan & Associates, c/o Richard E. Daniels, Esq., 275
North Lindbergh Blvd., St. Louis, MO 63141, telephone (314) 993-4261, 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
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., One Preston Park, 2301 Ohio Drive, Suite #100, Plano, Texas
75093; telephone (972) 612-4120.
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.
24
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.
DESCRIPTION OF PROPERTY
The Issuer has office and equipment that are provided at no charge until the
corporation is able to raise its first round of financing. Karney and Associates
provides the space at Bel Air, Maryland, formally Visalia, California. The
company has located two supply point / distribution sites, Houston, Texas and
Mesa, Arizona that will be secured on a lease basis upon funding. Mr. Karney has
selected and made an offer of $1.7 million for a 50,000 square foot
packaging/cold storage facility for sale in Fresno County, CA. Mr. Karney has
agreed to make an earnest money payment of $25,000 personally should such a
payment be required prior to the time the company becomes operational. Mr.
Karney has also negotiated a lease for a 31,000 square foot facility in Nogales,
Arizona. As with the Fresno facility, Nogales is ready in its current condition
to function in accordance with the company's Food Safe Process guidelines, which
includes the availability of gas, refrigeration, and processing rooms, office
space and equipment, truck bays and open acreage for truck parking. Along with
the 31,000 sq. ft. Nogales facility, eFood acquired a 5-year packing line lease
automatically securing revenue for the company upon taking over the facility.
Mr. Karney has agreed to make earnest money deposits should any be required
before final agreements of sale can be reached. Failure to reach an agreement of
sale for these facilities, or similar facilities, could adversely affect the
company's ability to conduct business. Furthermore, if the properties were to
come under Mr. Karney's ownership or control, no assurances can be given that a
final sales contract with the company would be the result of arms length
negotiations with terms favorable to the Company.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
To the best of the company's 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. The Global Inspection Service (GIS) concept was created by
Mr. Karney in l997 to provide time-sensitive information on the availability,
grade, and location of fresh fruit and vegetables in the worldwide market place.
This information is designed to be provided to companies, organizations and
25
individuals involved in sales, purchase, transportation or distribution segments
of the industry. GIS is a sole proprietorship owned by Mr. Karney, however no
definitive agreement has been reached to date regarding the purchase of the GIS
rights by eFoodSafety.com, Inc. The company plans to negotiate an agreement
whereby GIS can be implemented and made a standard service offered by
eFoodSafety.com, Inc. This concept would provide the company the ability to
offer key data to growers, buyers, and sellers in a cost effective manner giving
a uniformity of grading for all markets. Failure to reach a definitive agreement
with Mr. Karney for the right to offer GIS could adversely affect the company's
ability to continue in business. Furthermore, no assurances can be given that a
contract entered into would be the product of arms length negotiations and
result in terms favorable to the Company. International Fumigators, Inc. is a
fumigation company based in Houston, Texas. There is no definitive agreement
between eFood and International Fumigators, however a letter of intent does
exist whereby the companies intend to contract for services including; a.)
Fumigation services at company plant facilities; b.) Distribution of food safe
produce processed at company facilities for distribution to customers in Texas
and Mexico; c.) Export and import fumigation on all eFood produce; and d.)
Purchase of three truck washers for use in a joint operation in the Houston,
Texas area.
EXECUTIVE COMPENSATION
No compensation is currently being paid by the company to any of the executives.
It is possible that upon completion of an 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.
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
ON ACCOUNTING AND FINANCIAL DISCLOSURE
To the best of the company's knowledge, there has been no disagreement with the
independent auditors regarding the method(s) used in the preparation of the
financials for this filing.
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
26
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.
27
INDEX TO FINANCIAL STATEMENTS
PAGE
Independent Auditor's Report...............................................................................F - 1
Balance Sheets
October 31, 2002 (Unaudited) and
April 30, 2002 and 2001,.................................................................................F - 2
Statements of Operations for the
Six Months Ended October 31, 2002 (Unaudited) and
Years Ended April 30, 2002 and 2001,.....................................................................F - 3
Statement of Stockholders' Equity
Six Months Ended October 31, 2002 (Unaudited) and
Since January 28, 1998 (Inception) to April 30, 2002.....................................................F - 4
Statements of Cash Flows for the
Six Months Ended October 31, 2002 (Unaudited) and
Years Ended April 30, 2002 and 2001......................................................................F - 5
Notes to Financial Statements..............................................................................F - 7
INDEPENDENT AUDITOR'S REPORT
eFoodSafety.com, Inc.
(A Development Stage Company)
We have audited the accompanying balance sheets of eFoodSafety.com,
Inc. (a development stage company) as of April 30, 2002 and 2001, and the
related statements of operations and cash flows for the years ended April 30,
2002 and 2001, and the statement of stockholders' equity from January 28, 1998
(inception) to April 30, 2002. 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 auditing standards generally
accepted in the United States of America. 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. (a development stage company) as of April 30, 2002 and 2001, and the
results of its operations and its cash flows for the years ended April 30, 2002
and 2001 in conformity with accounting principles generally accepted in the
United States of America.
Respectfully submitted
/S/ ROBISON, HILL & CO.
Certified Public Accountants
Salt Lake City, Utah
June 10, 2002
F - 1
EFOODSAFETY.COM, INC.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEETS
(Unaudited)
October 31 April 30
----------------- --------------------------------------
2002 2002 2001
----------------- ------------------ ------------------
Assets $ - $ - $ -
================= ================== ==================
Liabilities $ 11,153 $ 7,855 $ -
----------------- ------------------ ------------------
Stockholders' Equity:
Common Stock, $.0005 Par Value
Authorized 50,000,000 shares, Issued
29,335,000 at April 30, 2002 and 2001 14,667 14,667 14,667
Paid-In Capital 605,234 590,999 569,007
Deficit Accumulated During the
Development Stage (631,054) (613,521) (583,674)
----------------- ------------------ ------------------
Total Stockholders' Equity (11,153) (7,855) -
----------------- ------------------ ------------------
Total Liabilities and
Stockholders' Equity $ - $ - $ -
================= ================== ==================
The accompanying notes are an integral part of these financial statements.
F - 2
EFOODSAFETY.COM, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF OPERATIONS
Cumulative
since
January 28,
(Unaudited) 1998 For The Six For the
year inception
Months Ended ended of
October 31, April 30, development
----------------- ---------------------------------------
2002 2002 2001 stage
----------------- ------------------- ------------------ ------------------
Revenues: $ - $ - $ - $ -
Expenses: 17,533 29,847 23,101 631,054
----------------- ------------------- ------------------ ------------------
Net Loss $ (17,533) $ (29,847) $ (23,101) $ (631,054)
----------------- ------------------- ------------------ ------------------
Basic & Diluted loss per share $ - $ - $ -
================= =================== ==================
The accompanying notes are an integral part of these financial statements.
F - 3
EFOODSAFETY.COM, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF STOCKHOLDERS' EQUITY
SINCE JANUARY 28, 1998 (INCEPTION) TO APRIL 30, 2002
Deficit
Accumulated
Since
January 28,
1998
Inception of
Common Stock Paid-In Development
Shares Par Value Capital Stage
------------------ ------------------ ----------------- -----------------
Balance at January 28, 1998 (inception) - $ - $ - $ -
February 9, 1998 Issuance of
Stock for cash 16,795,000 8,397 (4,487) -
Capital contributed by shareholder - - 44,154 -
Net Loss - - - (48,064)
------------------ ------------------ ----------------- -----------------
Balance at April 30, 1998 16,795,000 8,397 39,667 (48,064)
Capital contributed by shareholder - - 265,612 -
Net Loss - - - (265,612)
------------------ ------------------ ----------------- -----------------
Balance at April 30, 1999 16,795,000 - 305,279 (313,676)
Capital contributed by shareholder - - 246,897 -
Net Loss - - - (246,897)
------------------ ------------------ ----------------- -----------------
Balance at April 30, 2000 16,795,000 - 552,176 (560,573)
October 16, 2000 Shares issued for
Acquisition of GPS 12,540,000 6,270 (6,270) -
Capital contributed by shareholder - - 23,101 -
Net Loss - - - (23,101)
------------------ ------------------ ----------------- -----------------
Balance at April 30, 2001 29,335,000 6,270 569,007 (583,674)
Capital contributed by shareholder - - 21,992 -
Net Loss - - - (29,847)
------------------ ------------------ ----------------- -----------------
Balance at April 30, 2002 29,335,000 6,270 590,999 (613,521)
Capital contributed by shareholder - - 14,235 -
Net Loss - - - (17,533)
------------------ ------------------ ----------------- -----------------
Balance October 31, 2002 (Unaudited) 29,335,000 $ 6,270 $ 605,234 $ (631,054)
================== ================== ================= =================
The accompanying notes are an integral part of these financial statements.
F - 4
EFOODSAFETY.COM, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CASH FLOWS
Cumulative
Since
(Unaudited) January 28,
For The Six For the year 1998
Months Ended ended Inception of
October 31, April 30, Development
------------------- --------------------------------------
2002 2002 2001 Stage
------------------- ------------------ ------------------ -----------------
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net Loss $ (17,533) $ (29,847) $ (23,101) $ (631,054)
Increase in Accounts Payable 3,298 7,855 - 11,153
------------------- ------------------ ------------------ -----------------
Net Cash Used in operating activities (14,235) (21,992) (23,101) (619,901)
------------------- ------------------ ------------------ -----------------
CASH FLOWS FROM INVESTING
ACTIVITIES:
Net cash provided by
investing activities - - - -
------------------- ------------------ ------------------ -----------------
CASH FLOWS FROM FINANCING
ACTIVITIES:
Proceeds from sale of stock - - - 3,910
Capital contributed by shareholder 14,235 21,992 23,101 615,991
------------------- ------------------ ------------------ -----------------
Net Cash Provided by
Financing Activities 14,235 21,992 23,101 619,901
------------------- ------------------ ------------------ -----------------
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 - 5
EFOODSAFETY.COM, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CASH FLOWS
(CONTINUED)
Cumulative
Since
(Unaudited) January 28,
For The Six For the year 1998
Months Ended ended Inception of
October 31, April 30, Development
------------------ -------------------------------------
2002 2002 2001 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 issued approximately 29,334,640 shares
of common stock, par value $.0005, to acquire Global Procurement Systems.
The accompanying notes are an integral part of these financial statements.
F - 6
EFOODSAFETY.COM, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED APRIL 30, 2002 AND 2001
AND THE SIX MONTHS ENDED OCTOBER 31, 2002 (UNAUDITED)
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
This summary of accounting policies for eFoodSafety.com, 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 FINANCIAL STATEMENTS
The unaudited financial statements as of October 31, 2002 and for the
six months 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
January 28, 1998. Since January 28, 1998 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, 2002. 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.
F - 7
EFOODSAFETY.COM, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED APRIL 30, 2002 AND 2001
AND THE SIX MONTHS ENDED OCTOBER 31, 2002 (UNAUDITED)
(CONTINUED)
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES (CONTINUED)
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 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, 2002 (UNAUDITED)
BASIC LOSS PER SHARE
Loss to common shareholders $ (17,533) 29,335,000 $ -
======================== ===================== ==================
FOR THE YEAR ENDED APRIL 30, 2002
BASIC LOSS PER SHARE
Loss to common shareholders $ (29,847) 29,335,000 $ -
======================== ===================== ==================
FOR THE YEAR ENDED APRIL 30, 2001
BASIC LOSS PER SHARE
Loss to common shareholders $ (23,101) 15,833,029 $ -
======================== ===================== ==================
The effect of outstanding common stock equivalents would be
anti-dilutive for all periods presented and are thus not considered.
F - 8
EFOODSAFETY.COM, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED APRIL 30, 2002 AND 2001
AND THE SIX MONTHS ENDED OCTOBER 31, 2002 (UNAUDITED)
(CONTINUED)
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(CONTINUED)
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.
NOTE 2 - INCOME TAXES
As of April 30, 2002, the Company had a net operating loss carryforward
for income tax reporting purposes of approximately $614,000 that may be offset
against future taxable income through 2022. 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
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, 2002 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.
F - 9
EFOODSAFETY.COM, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED APRIL 30, 2002 AND 2001
AND THE SIX MONTHS ENDED OCTOBER 31, 2002 (UNAUDITED)
(CONTINUED)
NOTE 5 - COMMON STOCK TRANSACTIONS
On February 9, 1998, the Company issued approximately 360 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 $3,910.
On October 16, 2000, the Company issued approximately 29,334,640 shares
of common stock, par value $.0005, to acquire Global Procurement Systems.
NOTE 6 - RELATED PARTY TRANSACTIONS
During the six months ended October 31, 2002 and the years ended April
30, 2002 and 2001, shareholders have paid general and administrative expenses on
behalf of the Company. These payments have been recorded as expenses and as
paid-in capital to the Company. The amount of paid-in capital contributed by
shareholders totaled $14,235 for the six months ended October 31, 2002 and
$21,992 and $23,101 for the years ended April 30, 2002 and 2001 respectively.
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 reverse merger
with GPS being the surviving entity for financial reporting purposes. As a
result of the acquisition, the Company changed its name to eFoodSafety.com, Inc.
The merger was recorded as a recapitalization. In connection with this
recapitalization, the number of shares outstanding prior to the merger have been
restated to their post merger equivalents (increased from 360 shares to
16,795,000) and the par value of the Common Stock changed from no par value to
$.0005. All references in the accompanying financial statements to the number of
Common shares and per-share amounts since inception have been restated to
reflect the equivalent number of post merger shares.
F - 10
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 $ 11,000*
Legal Fees and Expenses $ 15,000*
Blue Sky Fees and Expenses $ 5,000*
Registrar and Transfer Agent Fees $ 500
Miscellaneous $ 1,000*
Total $ 34,513
*Estimated Amounts
All expenses of the registration will be borne by eFood. Mr. Bill Karney will
personally pay any cash requirements that are to be incurred by the company as
required during these developmental stages, including the estimated $34,513.00
expense of this offering. These payments will not be considered as debt, but as
equity contributions made to the company.
28
ITEM 26. RECENT SALES OF UNREGISTERED SECURITIES
The securities of eFoodSafety.com, Inc. were issued by the company within the
past two (2) years upon incorporation and a Board of Directors-approved
retroactive forward stock split of 6 to 1. There were 12,540,000 shares of
common stock existing, all of which were issued pursuant to the exemption from
registration contained within Section 4(2) of the Securities Act of 1933 to
former officers and directors of DJH International, Inc. (120,000 shares) and
equity contributors (12,420,000). A Reorganization and Assignment of Assets of
Global Procurement Systems to eFoodSafety.com, Inc., formerly known as DJH
International, Inc., occurred on October 16, 2000. An additional 16,795,000
shares were issued from treasury for due consideration from the merging
corporation.
In reference to Item 701(b) of Regulation S-B, eFood has not publicly offered
any securities to date. Upon the effectiveness of this registration statement,
12,540,000 shares of common stock will be outstanding and registered for resale
by the Selling Shareholders as listed herein in accordance with the Securities
Act of 1933.
All of the shares listed in the Selling Shareholders table were purchased from
and issued by DJH International, Inc. on October 29, 1996 for cash at $0.0005
(par value) per share.
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 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");
29
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.
30
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 Bel Air,
Maryland on February 3, 2003.
EFOODSAFETY.COM, INC.
BY: /s/ 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 February 3, 2003
/s/ Clarence W. Karney CEO, Secretary, Director February 3, 2003
/s/ Lindsey Lee Chief Financial Officer February 3, 2003
31