UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-KSB
ANNUAL REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended April 30, 2007 |
EFOODSAFETY.COM, INC.
(Exact name of small business issuer as specified in its charter)
NEVADA 62-1772151 |
7702 E DOUBLETREE RANCH ROAD SUITE 300 SCOTTSDALE AZ 85258
(Address of principal executive offices)
(480) 607-2606
(Issuer's telephone number, including area code)
Securities registered under Section 12(b) of the Exchange Act: None.
Securities registered under Section 12(g) of the Exchange Act: None.
Check whether the issuer is not required to file reports pursuant to
Section 13 or 15(d) of the Exchange Act. [ ]
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ]
Check if there is no disclosure of delinquent filers in response to Item 405 of Regulation S-B contained in this form, and no disclosure will be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-KSB or any amendment to this Form 10-KSB. [X ]
Indicate by check mark whether the registrant is a shell company (as defined by Rule 12b-2 of the Exchange Act). Yes [ ] No [X]
Issuer's revenues for its most recent fiscal year: $1,169,658
State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was sold, or the average bid and asked price of such common equity, as of a specified date within the past 60 days: As of July 9, 2007, the Company had 112,340,575 common shares held by non-affiliates with an aggregate market value of $35,387,281.
State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date: As of July 9, 2007, the Company had 163,698,330 common shares issued and outstanding.
Documents Incorporated By Reference: None
Transitional Small Business Disclosure Format: Yes [ ] No [X]
SPECIAL NOTE REGARDING FORWARD-LOOKING INFORMATION AND RISK FACTORS
Certain statements in this annual report constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements deal with our current plans, objectives, projections, expectations, assumptions, strategies, and future events. Words such as "may," "expects," "anticipates," "intends," "plans," "believes," "seeks," "estimates," "should," "could," and variations of such words and similar expressions are intended to identify such forward-looking statements. Similarly, statements that describe our plans, our strengths and weaknesses and other information that is not historical information also are forward-looking statements.
Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements, expressed or implied by such forward-looking statements. Such factors include, among others, the following: general economic and business conditions, which will, among other thing, impact the ability of the Company to implement its business strategy, and changes in, or failure to comply with, governmental regulations affecting health and nutraceutical products.
In addition to the other information contained in this annual report, the following risk factors, among others, make investment in shares of the Company's common stock speculative and risky should be carefully considered.
POOR FINANCIAL POSITION. For each of the fiscal years ended April 30, 2007 and 2006, we had net losses of $3,614,279 and $9,385,323, respectively. At April 30, 2007 the deficit accumulated since inception on October 16, 2000 was $19,658,110. As a result of our recurring losses from operations, we require considerable additional financing and /or profitable operations to continue as a going-concern. There can be no assurance that we will obtain profitable operations or continue to gain financial support in the future.
DEPENDENCE ON KEY PERSONNEL. The success of the Company is largely dependent upon the continued contributions of its key management personnel, particularly Patricia Gruden and Robert Bowker. The success of the Company also depends upon its ability to attract and retain additional qualified personnel. The process of locating personnel with the combination of skills and attributes required to implement our strategies is very competitive and there can be no assurance that we will be successful in attracting and retaining such personnel, particularly in view of our poor financial position. The loss of the services of our key management personnel or the inability to attract and retain additional qualified personnel could limit or disrupt our future business operations.
NO DIVIDENDS EXPECTED. We have not paid any cash or other dividends on our common shares since inception and we do not expect to pay any dividends in the future. We expect to use any earnings in our operations.
INTENSE COMPETITION IN THE HEALTH INDUSTRIES. There is intense competition among providers, both individuals and entities, of various technologies to improve health conditions. Many of these competitors have substantially greater financial and marketing resources than the Company, stronger name recognition, brand loyalty and long-standing relationships with our target customers. Our future success is dependent upon our ability to compete and our failure to do so could adversely affect our business, financial condition and results of operation.
LIMITED OR SPORADIC MARKET QUOTATIONS; POSSIBLE ILLIQUIDITY; PENNY STOCK RESTRICTIONS. Shares of our common stock are quoted and traded from time to time on the OTC Bulletin Board and in the so-called "Pink Sheets," but the quotations and trading activity are limited and sporadic. As a result, our shareholders may find it difficult to obtain accurate quotations concerning the market price of their shares. Our shareholders also may experience more difficulty in attempting to sell their shares than if the shares were listed on a national stock exchange or quoted on the NASDAQ Stock Market. Also, our common shares are classified as a "penny stock" because they are not traded on a national stock exchange or on the NASDAQ Stock Market and the market price is less than $5 per share. Rules of the Securities and Exchange Commission impose additional sales practice requirements on broker-dealers that recommend the purchase or sale of penny stocks to persons other than those who qualify as an "established customer" or an "accredited investor." Among other things, a broker-dealer must make a determination that investments in penny stocks are suitable for the customer and must make special disclosures to the customer concerning the risks of penny stocks. Application of the penny stock rules to our common shares could adversely affect the market liquidity of the shares, which in turn may adversely affect the ability of shareholders to sell their shares.
PART I
ITEM 1. DESCRIPTION OF BUSINESS.
Nature of Business
The Company was organized as a vehicle to provide methods and products to ensure the safety of fruits and vegetables being marketed worldwide. With the sale of Ozone Safe Food, Inc. the Company changed direction to become a company dedicated to improving health conditions around the world through its innovative technologies. The Company's Knock-Out Technologies, Ltd. subsidiary has developed an environmentally safe sporicidal product formulated entirely of food-grade components that eradicates anthrax and a germicidal product, Big 6 Plus (EPA Reg. No 82723-1) that kills six major bacteria: E-coli, Listeria, Pseudomonas, Salmonella, Staphylococcus, and Streptococcus, Avian Influenza and Black Mold. The sporicidal product has completed its final efficacy laboratory study requisite for EPA registration. The Company's MedElite, Inc. subsidiary distributes clinically proven products to physicians who then prescribe the products for their patients. It is the owner and exclusive U.S. and worldwide distributor of the Talsyn(TM)-CI/bid Scar Cream that has been clinically proven to facilitate and improve the appearance, redness and strength of scars. The Company's Cinnergen, Inc. subsidiary owns and distributes Cinnergen(TM), a non-prescription liquid whole food nutritional supplement that promotes healthy glucose metabolism. The Company’s PurEffect, Inc. subsidiary owns PurEffect(TM), a 4-step, clinically-studied anti-acne formula.
The registrant, eFoodSafety.com, Inc. ("eFood" or the "Company"), is a holding company operating through wholly owned subsidiaries and dedicated to improving and health conditions around the world through its innovative technologies.
The Company, incorporated in Nevada on October 28, 1996 as DJH International, Inc., acquired Global Procurement Systems, Inc. on October 16, 2000 for shares of its common stock and changed its name to eFoodSafety.com, Inc. Ozone Safe Food, Inc. ("OSF") was acquired on October 29, 2003 for shares of the Company's common stock, Knock-Out Technologies, Ltd ("Knock-Out") was acquired on May 3, 2004 for shares of the Company's common stock and MedElite, Inc. was acquired on August 31, 2005 for shares of the Company's common stock.
The Company sold Ozone Safe Food, Inc. to Mark Taggatz, former President and Chief Executive Officer of the Company, on August 24, 2005 in exchange for 1.5 million shares of the Company's common stock, which were returned to the Company and cancelled.
Knock-Out is developing a variety of products based on a proprietary blend of organic, non-toxic and food-based substances. These products include an anthrax sporicidal, a germicidal cleaner, a wound care antiseptic, an herbicide and an insect repellent. Knock-Out has developed an all-natural and environmentally safe sporicidal formulated entirely of food-grade components that eradicates anthrax as well as a germicidal product that kills major bacteria: including E-coli, Listeria, Pseudomonas, Salmonella, Staphylococcus and Streptococcus and avian flu. Its anthrax sporicidal product eradicated with 100% efficacy Bacillus Subtilis and Clostridium Sporogenes bacteria on both hard and porous surfaces in an outside, third-party laboratory study that is a requisite for EPA licensure. As a result of these successful laboratory results, Knock-Out will seek EPA licensing for this product as both an anthrax sporicidal agent and a hospital sterilizing agent. Potential customers for Knock-Out's anthrax sporicidal product may include the U.S. government, which has expressed interest in products that kill the anthrax virus. Potential customers for the germicidal cleaner product include nursing homes, hospitals and food service facilities.
Knock-Out also has completed its product formulations on what it calls the "Total Solution" to the potential Bird Flu pandemic. The Citroxin formulation has proven in independent laboratory testing to eliminate the H9N2 virus, which is the surrogate organism used in all laboratory testing for the Bird Flu, on both hard and porous surfaces. The Citroxin formulation can be sprayed on bird cages and hen houses without its being harmful to animals or humans in surrounding areas if ingested. The EPA has issued Registration No. 82723-1 for the Big 6 Plus Germicidal product, currently marketed under then name "Citroxin."
Humans who have contracted the H5N1 virus, commonly known as Bird Flu, can rely on the Citroxin O2 formulation, an ingestible product that the Company believes will prove to have dramatic effects on the Bird Flu virus. Clinical trials are currently ongoing on the Influenza Viruses A and B, but testimonials from humans who have taken the product with influenza-like symptoms indicate very promising results.
The Citroxin formulation for the Bird Flu virus will undergo testing on live subjects in Thailand, a region that has been affected by the Bird Flu virus, after protocol testing on a wide range of infectious diseases. The Citroxin formulation tests will be conducted by the National Center for Genetic Engineering and Biotechnology, a branch of the National Science and Technology Development Agency (NSTDA) located in the greater Bangkok metropolitan area. The NSTDA was established in 1991 by the Royal Government of Thailand and officially commenced its operation in 1992. The establishment of NSTDA, unlike other public science and technology organizations in Thailand, was unique as it was aimed to "be the Agency with a high degree of autonomy and mobility unbound by the normal rules, procedures, and regulations of governmental bureaucracy" in order to "conduct, support, coordinate, and promote efforts in scientific and technological development between the public and private sectors towards maximal benefit for national development." Since its establishment, NSTDA has served as the hub where leading scientists and experts meet and work to tackle scientific and technological issues of imminent concern to both national and international communities.
MedElite, Inc. owns and distributes clinically proven products to physicians who then prescribe the products for their patients. It is the owner and exclusive U.S. and worldwide distributor of the Talsyn(TM)-CI/bid Scar Cream that has been clinically proven to facilitate and improve the appearance, redness and strength of scars (www.talsyn.com).
On November 27, 2006, the Company formed Cinnergen Inc. a wholly owned subsidiary, to own and distribute Cinnergen(TM), a non-prescription liquid whole food nutritional supplement that promotes healthy glucose metabolism (www.cinnergen.com).
On November 27, 2006, the Company formed PurEffect, Inc. a wholly owned subsidiary, to own PurEffect(TM), a 4-step, clinically-studied anti-acne formula
SALES AND MARKETING. Our products are marketed domestically and internationally through several non-exclusive distribution agreements and by our attending trade shows and industry-related events and seminars. We also plan to market all services and products through outside commissioned sales persons and through our websites, http://www.efoodsafety.com and http://www.cinnergen.com.
COMPETITION. There is intense competition among providers, both individuals and entities, of various technologies to improve health conditions. Many of these competitors have substantially greater financial and marketing resources than the Company, stronger name recognition, brand loyalty and long-standing relationships with our target customers. Our future success is dependent upon our ability to compete and our failure to do so could adversely affect our business.
GOVERNMENT REGULATION. Increased federal or state government regulation of the health industry could adversely affect our business, financial condition and results of operation, by requiring further testing of our products and imposing other or different licensing requirements.
INTELLECTUAL PROPERTY. We consider patent protection important for our business, particularly with respect to Knock-Out's products. However, we may not have any patent protection for any derivative uses of our products, or for any other products we may later acquire or develop. We also cannot assure that we will be able to obtain foreign patents to protect our products. Litigation may be required to enforce our intellectual property rights, protect our trade secrets or determine the validity and scope of proprietary rights of others. Any action we take to protect our intellectual property rights could be costly and could absorb significant management time and attention. In addition, as a result of any such litigation, we could lose any proprietary rights we have. If any of the foregoing occurs, we may be unable to execute on our business plan and you could lose your investment.
RESEARCH & DEVELOPMENT. We do not anticipate incurring significant research and development costs during the next 12 months.
EMPLOYEES. We have 4 employees, all of whom are officers and /or directors: Mrs. Gruden, Mr. Matula, Mr. Bowker and Dr. Goldfarb. Mrs. Gruden served as President and Chief Executive Officer during the fiscal year ended April 30, 2007 and received total compensation of $24,000 for her services. Mr. Bowker, President of Knock-Out Technologies, Inc. receives an annual salary of $90,000; Dr. Richard Goldfarb, President of MedElite, Inc. receives an annual salary of $156,000.
ITEM 2. DESCRIPTION OF PROPERTY. The Company has no real property. The principal executive offices in Scottsdale, Arizona are leased at $250 per month, with the lease expiring in August 2007. Knock-Out's principal offices in White Plains, New York, are leased at $250 per month, with the lease expiring in August 2007. Cinnergen’s principal offices in Scottsdale, Arizona are leased at $250 per month, with the lease expiring in December 2007. MedElite's principal offices in Langhorne, PA are leased at $1,000 per month. The Company considers all such facilities adequate for the foreseeable future.
ITEM 3. LEGAL PROCEEDINGS.
The Company is not a party to any material pending legal proceeding, nor is any of its property.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
None/Not applicable.
PART II
ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.
Shares of the Company's common stock are quoted and traded from time to time on the OTC Bulletin Board and the so-called "Pink Sheets," with the trading symbol "EFSF."
The following table sets forth the high and low bid prices for the Company's shares for each quarter during the two fiscal years ended April 30, 2007 and 2006. The prices reflect inter-dealer prices, without retail mark-up, mark-down or commission and may not represent actual transactions.
2006: HIGH LOW |
At July 9, 2007, the market price of the Company's common stock was $0.315 per share.
As of July 9, 2007, there were 163,698,330 issued and outstanding shares of common stock that were held of record by approximately 5,800 shareholders.
DIVIDEND POLICY. We have not paid and do not plan to pay dividends at this time or anytime soon. The board of directors will decide on any future payment of dividends, depending on our results of operations, financial condition, capital requirements, and any other relevant factors. However, we expect to use any future earnings for operations and in the business.
TRANSFER AGENT AND REGISTRAR. The transfer agent and registrar for our common stock is Signature Stock Transfer, Inc., 2301 Ohio Drive, Suite #100, Plano, Texas 75093; telephone (972) 612-4120.
RECENT SALES OF UNREGISTERED SECURITIES. As described more fully in Note 4 to the Notes to the Consolidated Financial Statements included as part of this annual report, during the past three years the Company has issued shares of its common stock for: acquisitions of Knock-Oct and MedElite (and Ozone Safe Foods, which since has been disposed of); cash; services; general, administrative and other expenses; compensation to directors, settlements of legal proceedings and repayment of loans, including accrued interest. Such shares were issued without registration under the Securities Act of 1933, in reliance upon the exemptions afforded by Section 4(2) and Rule 506 of Regulation D thereof. The persons who acquired the shares were either officers or directors of the Company, advisers and consultants or others who had access to material information about the Company; there were no underwriters involved in any of the transactions.
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.
Management's Discussion And Analysis Of Financial Condition And Results Of Operations
Year Ended April 30, 2007
Sales
Our revenues from operations for the year ended April 30, 2007 were $1,169,658. Our revenues from operations for the year ended April 30, 2006 were $537,038. The increase in our revenues of $632,620 was due to our increasing sales of Cinnergen, which are expected to continue to increase in 2008.
Research and Development
During the year ended April 30, 2007, we incurred research and development expenses of $133,835 compared to $119,008 as the Company continued to refine and develop its products related to Knock-Out Technologies and MedElite. We do not anticipate any material increase in such expenses in 2008.
Selling, General and Administrative Expenses
A summary of our Selling, General and Administrative expenses is as follows:
During the year ended April 30, 2007, the Company incurred sales and marketing expense of $1,409,645, compared to sales and marketing expense of $1,194,043 during the year ended April 30, 2006. The increase in sales and marketing expense is primarily due to the increasing marketing and promotion of our products. We expect such expense to increase in 2008 along with increasing revenues from sales as a result of continuing sales and marketing efforts.
Consulting expense decreased to $2,156,629 from $5,442,447 as a result of our issuing less stock for services. We do not anticipate any material increase in such expense in 2008.
General and administrative expenses increased to $398,044 from $291,691 primarily due to operations of having four subsidiaries in 2007 rather than three subsidiaries in 2006. We do not expect any material increase in such expenses in 2008.
Interest Expense
Interest expense of $35,088 and $62,674 were incurred during the years ended April 30, 2007 and 2006, respectively. The amount of interest expense decreased substantially as the company eliminated virtually all its debt by issuing stock. As a result, we do not expect any material increase in such expense in 2008.
Liquidity and Capital Resources
As of April 30, 2007, we had working capital of $3,314,325. As a result of our operating losses during the year ended April 30, 2007, we generated a cash flow deficit of $391,956 from operating activities. We utilized cash flows in connection with investing activities of $693,995 during the year ended April 30, 2007. We met our cash requirements for the year ended April 30, 2007 with sales of common stock for $1,085,750.
We have no off-balance sheet arrangements, special purpose entities, financing partnerships or guarantees.
ITEM 7. FINANCIAL STATEMENTS.
The financial statements of the Company and supplementary data are included beginning immediately before the signature page to this report.
ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.
In June 2007 the Board of Directors retained Gruber & Company LLC as their independent auditors. The change from Robison Hill was approved by the board of directors. There were no disagreements with the predecessor firm.
ITEM 8A. DISCLOSURE CONTROLS AND PROCEDURES; INTERNAL CONTROL OVER FINANCIAL REPORTING.
The Company's Chief Executive Officer and Chief Financial Officer are responsible for establishing and maintaining adequate internal controls over disclosure controls and procedures and financial reporting for the Company. This annual report does not include a report of management’s assessment regarding internal control over financial reporting or an attestation report of the Company’s registered public accounting firm due to a transition period established by the rules of the Securities and Exchange Commission for non-accelerated filers. However, during the fourth fiscal quarter of the fiscal year ended April 30, 2007, there was no change in the Company's internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, the small business issuer’s internal control over financial reporting.
ITEM 8B. OTHER INFORMATION.
None/Not applicable.
PART III
ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS, CONTROL PERSONS AND CORPORATE GOVERNANCE; COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT.
The following persons constitute the management team that is conducting the business of the company:
NAME POSITION AGE Executive Officer and Chief Financial Officer 65 Technologies, Ltd. 57 |
PATRICIA GRUDEN, President, Chief Executive Officer and Chief Financial Officer of the Company since August 2005 and a Director since October 2000, has extensive business experience in operations, training, finance, management, expansion of start-up and growth companies, and lobbying. Mrs. Gruden has been selected as one of the ten most influential women in the transportation and travel industry in Arizona and has been honored by Athena as one of the 100 most influential women in Arizona. Mrs. Gruden was also elected the first woman President of a Chamber of Commerce in Arizona and had been selected to represent Arizona at the White House Conference for Small Business.
ROBERT BOWKER, President of Knock-Out Technologies, Ltd. and a Director since May 2004, has extensive knowledge of and experience with herbs, natural supplements and natural healing. Mr. Bowker has been involved with exotic and domestic animals since childhood, finding himself challenged with various animal diseases and illnesses. The challenge was to effectively treat their viral, bacterial, and protozoan borne illnesses while doing no harm to the animals. Mr. Bowker began experimenting with an unorthodox approach on humans, using acquired knowledge, intuition and true passion for the work. Having traveled on three continents, Mr. Bowker's proficiency in holistic methods and natural healing properties was also broadened. He has been instrumental in the development of Knock-Out's environmentally safe products formulated entirely of food grade components.
TIMOTHY MATULA, Secretary since August 2005 and a Director since September 2004, joined Shearson Lehman Brothers as a financial consultant in 1992. In 1994 he joined Prudential Securities, which he left in 1997 as Associate Vice President, Investments, Quantum Portfolio Manager. Mr. Matula has served as a director of Eat at Joe's. Ltd. from 1996 to present and, the Topaz Group, from 2000 to 2003, and has served as a consultant to a wide range of businesses in the U.S and Asia.
RICHARD GOLDFARB, M.D. FACS, President of MedElite, Inc. and a Director since September 2005, is a Fellow of the American College of Surgeons. He is a board certified surgeon and a practicing surgeon in General and Trauma surgery. He also serves as Medical Director of Bucks County Clinical Research.
Compliance With Section 16(a) of the Exchange Act
The Company does not have a class of securities registered pursuant to Section 12 of the Securities Exchange Act of 1934. Accordingly, the Company's executive officers and directors and persons who own more than 10% of its equity securities are not subject to the beneficial ownership reporting requirements of Section 16(a) of that Act. However, although not required, certain of such persons voluntarily file beneficial ownership reports with the Securities and Exchange Commission. To the best of our knowledge and based solely upon our review of the reports filed with the Securities and Exchange Commission and submitted to the Company during the fiscal year ended April 30, 2007, the Company believes that all reports were timely filed by such persons.
Code of Ethics
The Company has not yet adopted a code of ethics applicable to it chief executive officer and chief financial officer, but expects to do so during the fiscal year ending April 30, 2008.
Nominating Committee, Audit Committee and Audit Committee Financial Expert
The board of directors does not have a nominating or audit committee or an audit committee financial expert, the functions of which are performed by the entire board.
ITEM 10. EXECUTIVE COMPENSATION.
Patricia Gruden served as President and Chief Executive Officer during the fiscal year ended April 30, 2007 and received an annual salary of $24,000 for her services. Robert Bowker, President of Knock-Out Technologies, Inc. receives an annual salary of $90,000; Dr. Richard Goldfarb, President of MedElite, Inc. receives an annual salary of $156,000. The Company did not pay or accrue any other compensation, in the form of either bonus, stock awards, option awards, incentive plan compensation or nonqualified deferred compensation earnings, to Mrs. Gruden, or to any other executive officer, for services as executive officer during the fiscal years ended April 30, 2007 and 2006; neither were there any perquisites or other personal benefits. The Company does not have any option plan or equity incentive plan or retirement plan.
Directors receive are not compensated for their services as directors.
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
There are no securities authorized for issuance under equity compensation plans.
The following table sets forth, as at July 9, 2007, certain information with respect to the beneficial ownership of our common stock by each person known by us to be the beneficial owner of more than five percent (5%) of our common stock; by each of our current directors and executive officers; and by all executive officers and directors as a group. The address of all beneficial owners is 7702 E. Doubletree Ranch Road, Suite 300, Scottsdale, Arizona 85258. Each person has sole voting and investment power with respect to the shares of common stock.
Name and Address |
Number of Shares Beneficially Owned |
Percentage of Common Stock |
Patricia Gruden |
25,192,500 |
15.38% |
Robert Bowker |
2,550,000 |
1.56 |
Timothy Matula |
1,500,000 |
* |
Dr. Richard Goldfarb |
10,000,000 |
6.11 |
All directors and executive officers (4 persons) |
39,242,500 |
24.00% |
*Denotes less than one percent (1%) |
We are not aware of any arrangement, the operation of which may, at a subsequent date, result in a change in control of the Company. There are no provisions in the governing instruments of the Company that could delay a change in control of the Company.
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE.
There have been no transactions with any related person since the beginning of the last fiscal year.
ITEM 13. EXHIBITS.
Exhibit No. | Description | Location |
3.1 | Articles of Incorporation | Incorporated by reference from the Company’s Registration Statement on Form SB-2 (File No. 333-68008), as amended February 4, 2003). |
3.2 | Corporate Bylaws | Incorporated by reference from the Company’s Registration Statement on Form SB-2 (File No. 333-68008), as amended February 4, 2003). |
31.1 | Certification of Patricia Gruden , Chief Executive Officer, pursuant to Section 302 of the Sarbanes-Oxley Act | Filed herewith |
32.1 | Certification of Patricia Gruden , Chief Executive Officer, pursuant to Section 906 of the Sarbanes-Oxley Act | Filed herewith |
ITEM 14. PRINCIPAL ACCOUNTANT FEES & SERVICES.
The following is a summary of the fees billed to us by Robison, Hill & Company, our former principal accountant, for professional services rendered for each of the last two fiscal years ended April 30, 2007 and 2006:
Service 2007 2006 |
AUDIT FEES consist of fees billed for professional services rendered for the audit of our consolidated financial statements included in our annual reports, reviews of our interim consolidated financial statements included in our quarterly reports, or other services that are normally provided by the principal accountant in connection with statutory and regulatory filings or engagements, such as financial reports filed with the Securities and Exchange Commission. There were no AUDIT-RELATED FEES.
TAX FEES consist of fees billed for professional services for tax compliance, tax advice and tax planning, including e assistance regarding compliance with federal, state and local tax rules and regulations and consultation in connection with various transactions and acquisitions.
ALL OTHER FEES consist of fees billed for products and services provided by the principal accountant other than Audit Fees, Audit-Related Fees and Tax Fees.
The Company does not have an Audit Committee, who functions are performed by the entire Board. The Board pre-approves all audit and non-audit services provided by the independent auditors. These services may include audit services, audit-related services, tax services and other services as allowed by law or regulation. Pre-approval is generally provided for up to one year and any pre-approval is detailed as to the particular service or category of services and is generally subject to a specifically approved amount. The independent auditors and management are required to periodically report to the Board/Audit Committee regarding the extent of services provided by the independent auditors in accordance with this pre-approval and the fees incurred to date. The Board/Audit Committee may also pre-approve particular services on a case-by-case basis.
The Board/Audit Committee pre-approved 100% of the Company's 2007 and 2006 audit fees, audit-related fees, tax fees, and all other fees to the extent the services occurred after May 6, 2003, the effective date of the Securities and Exchange Commission's final pre-approval rules. To the Company's knowledge, none (0%) of the hours expended on the principal accountant's engagement to audit the Company's financial statements for the fiscal years ended April 30, 2007 and 2006 were attributed to work performed by a person other than the principal accountant's full-time employees.
EFOODSAFETY.COM, INC.
CONTENTS
INDEPENDENT AUDITOR'S REPORT
eFoodSafety.com, Inc. & Subsidiaries
We have audited the accompanying balance sheet of eFoodSafety.com, Inc. & Subsidiaries as of April 30, 2007 and the related statements of operations, stockholders' equity, and cash flows for the year ended. 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 audit.
We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. 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. & Subsidiaries as of April 30, 2007 and the results of its operations and its cash flows for the year ended April 30, 2007 in conformity with accounting principles generally accepted in the United States of America.
The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern. As discussed in Note 1 to the consolidated financial statements, the Company has suffered recurring losses from operations. This raises substantial doubt about its ability to continue as a going concern. Management's plans in regard to these matters are described in Note 1. These consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Respectfully submitted
/s/ Gruber & Company LLC |
F - 1
EFOODSAFETY.COM, INC. & SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
April 30, Loan Receivable 100,000
- - |
F - 2
EFOODSAFETY.COM, INC. & SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(continued)
April 30, |
The accompanying notes are an integral part of these financial statements.
F - 3
EFOODSAFETY.COM, INC. & SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
For the Years Ended Cost of Sales 171,007
- - |
The accompanying notes are an integral part of these financial statements.
F - 4
EFOODSAFETY.COM, INC. & SUBSIDIARIES
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
FOR THE YEARS ENDED APRIL 30, 2007 AND 2006
Common Stock Treasury Paid-In Retained |
F - 5
EFOODSAFETY.COM, INC. & SUBSIDIARIES
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
FOR THE YEARS ENDED APRIL 30, 2007 AND 2006
(continued)
Common Stock Treasury Paid-In Retained June 2006 –Shares issued for settlement 1,500,000 150 - 389,850 - July 2006- shares issued for product development 2,000,000 200 - 499,800 - July 2006- Shares issued for cash 100,000 10 - 12,490 - August 2006-Shares issued for cash 2,800,000 280 - 349,720 - November 2006-Shares cancelled by court order (30,192,500) (3,019) - 3,019 - November 2006-Shares issued for product rights 1,000,000 100 - 169,900 - January 2007-shares issued for cash 1,600,000 160 - 224,840 - January 2007-Shares issued for cash 1,000,000 100 - 99,900 - February 2007-Shares issued for cash 450,000 45 - 98,205 - March 2007-Shares issued for services 60,000 6 - 20,649 - April 2007 Shares issued for services 67,500 7 - 27,938 - April 2007-Shares issued for cash 1,200,000 120 - 299,880 - April 2007-Shares issued for debt reduction 3,798,850 380 - 1,291,459 (3,614,278) Balance April 30, 2007 161,898,330 $ 16,190 $ - $23,925,643 $(19,658,110) |
The accompanying notes are an integral part of these financial statements.
F - 6
EFOODSAFETY.COM, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Years Ended (Increase) in Accounts Receivable (231,471) - (Increase) in Shareholder Advances (58,405) - (Decrease) in Due to nutralab (28,265) - (Increase) in loan receivable (100,000) - Increase in Comprehensive 2,524 - |
F - 7
EFOODSAFETY.COM, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(continued)
For the Years Ended |
The accompanying notes are an integral part of these financial statements.
F-8
EFOODSAFETY.COM, INC.
(Formerly A Development Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
This summary of accounting policies for eFoodSafety.com, Inc. & Subsidiaries is presented to assist in understanding the Company's consolidated financial statements. The accounting policies conform to generally accepted accounting principles and have been consistently applied in the preparation of the consolidated financial statements.
Organization and Basis of Presentation
The Company was incorporated in Nevada on October 28, 1996 as DJH International, Inc. to market products through the Internet. 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 issued 37,620,000 shares of common stock in exchange for the outstanding shares of GPS and changed its name to eFoodSafety.com, Inc.
On October 29, 2003, the Company issued 1,500,000 restricted shares of common stock to acquire Ozone Safe Food, Inc. As of October 29, 2003, Ozone Safe Food, Inc. was a wholly owned subsidiary of the Company. On August 24, 2005, the Company sold Ozone Safe Food, Inc.
In May 2004, the Company issued 1,000,000 restricted shares of common stock to acquire Knock-Out Technologies, Ltd. ("Knock-Out") as a wholly-owned subsidiary of the Company. Knock-Out is to be a manufacturer of all-natural, non-toxic, food-grade products.
On August 31, 2005, the Company issued 10,000,000 restricted shares of common stock to acquire MedElite, Inc. as a wholly-owned subsidiary of the Company. MedElite distributes clinically proven products to physicians who then prescribe the products for their patients. It is the exclusive US distributor of the Talsyn product line.
In November 2006, the Company formed Cinnergen, Inc. and manufactures a non-prescription liquid whole food nutritional supplement that promotes healthy glucose metabolism.
In November 2006, the Company formed PurEffect, Inc. for its PurEffect(TM) 4-step anti-acne formula.
Nature of Business
The Company was organized as a vehicle to provide methods and products to ensure the safety of fruits and vegetables being marketing worldwide. With the sale of Ozone Safe Food, Inc. the Company changed direction to become a company dedicated to improving food and health conditions around the world through its innovative technologies. The Company's Knock-Out Technologies, Ltd. subsidiary has developed an environmentally safe sporicidal product formulated entirely of food-grade components that eradicates anthrax and a germicidal product, Big 6 Plus - EPA Reg. No 82723-1 that kills six major bacteria: E-coli, Listeria, Pseudomonas, Salmonella, Staphylococcus, and Streptococcus, Avian Influenza and Black Mold. The sporicidal product has completed its final efficacy laboratory study requisite for EPA registration. The Company's MedElite, Inc. subsidiary distributes clinically proven products to physicians who then prescribe the products for their patients. It is the exclusive U.S. and worldwide distributor of the Talsyn(TM)-CI/bid Scar Cream that has been clinically proven to facilitate and improve the appearance, redness and strength of scars. The Company manufactures Cinnergen(TM), a non- prescription liquid whole food nutritional supplement that promotes healthy glucose metabolism and is the owner of PurEffect(TM), a 4-step anti-acne formula.
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 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.
F-9
EFOODSAFETY.COM, INC. & SUBSIDIARIES
(Formerly A Development Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Business Condition
These accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities and commitments in the normal course of business. As of April 30, 2007, the Company has accumulated operating losses of $19,658,110 since its inception. The continuation of the Company is dependent upon the continuing financial support of directors and stockholders as well as becoming profitable.
These conditions raise substantial doubt about the Company's ability to continue as a going concern. These financial statements do not include any adjustments that might arise from this uncertainty.
Principles of Consolidation
The consolidated financial statements for the years ended April 30, 2007 and 2006 include the accounts of eFoodSafety.com, Inc. and its subsidiaries Ozone Safe Food, Inc., Knock-Out Technologies, Ltd., and MedElite, Inc and Cinnergen, inc. Ozone Safe Food, Inc. was acquired by the Company on October 29, 2003 and disposed of on August 24, 2005. Knock-Out Technologies, Ltd. was acquired by the Company in May 2004. MedElite, Inc. was acquired by the Company on August 31, 2005. Cinnergen, Inc. was formed as a wholly owned subsidiary on November 27, 2006.
The results of subsidiaries acquired or sold during the year are consolidated from their effective dates of acquisition through their effective dates of disposition.
All significant intercompany balances and transactions have been eliminated.
Revenue Recognition
The Company reports revenues on a net basis. Revenues are from net gross sales of Cinnergen.
Concentration of Risk
As of April 30, 2007, the Company's revenues are from the sale of Cinnergen. The loss of this product would have an adverse effect on the Company's operations.
Depreciation
Office furniture and equipment are stated at cost. Depreciation and amortization are computed using the straight-line method over the estimated economic useful lives of the related assets as follows:
Furniture & Fixtures 5-10 years Equipment 5- 7 years Computers 3- 5 years
Maintenance and repairs are charged to operations; betterments are capitalized. The cost of property sold or otherwise disposed of and the accumulated depreciation thereon are eliminated from the property and related accumulated depreciation accounts, and any resulting gain or loss is credited or charged to income.
Total depreciation expense for the years ended April 30, 2007 and 2006 was $1,352 and $488, respectively.
Earnings (Loss) per Share
Basic loss per share has been computed by dividing the loss for the year applicable to the common stockholders by the weighted average number of common shares outstanding during the years. There were no common equivalent shares outstanding at April 30, 2007 and 2006.
F-10
EFOODSAFETY.COM, INC. & SUBSIDIARIES
(Formerly A Development Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(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.
Comprehensive Income
The Company recognizes as a component of equity unrealized gains or losses on securities.
Investment in Marketable Securities
The Company's securities investments that are bought and held for an indefinite period of time are classified as available-for-sale securities. Available-for-sale securities are recorded at fair value on the balance sheet in current assets, with the change in fair value during the period excluded from earnings and recorded net of tax as a component of other comprehensive income.
Investments in securities are summarized as follows:
April 30, 2007 |
Realized gains and losses are determined on the basis of specific identification. During the years ended April 30, 2007 and 2006, sales proceeds and gross realized gains and losses on securities classified as available-for-sale securities were:
For the Years Ended |
F-11
EFOODSAFETY.COM, INC. & SUBSIDIARIES
(Formerly A Development Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
NOTE 2 - INCOME TAXES
As of April 30, 2007, the Company had a net operating loss carryforward for income tax reporting purposes of approximately $19,000,000 that may be offset against future taxable income through 2025 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 – ACCOUNTS RECEIVABLE
The company recognizes a receivable on sales of its Cinnergen product which commenced in the fourth quarter of the fiscal year. The company’s experience has been that all receivable have been collected and therefore a reserve for doubtful accounts has not been established.
NOTE 4 - COMMON STOCK TRANSACTIONS
For the year ended April 30, 2006 the Company issued 41,194,617 shares of its common stock. 3,400,000 for cash, 6,267,617 for debt reduction and 31,527,000 for product development, services and lawsuit settlements.
For the year ended April 30, 2007, the Company issued 15,576,350 shares and cancelled 30,192,500 shares. Of the shares issued, 127,500 were for services, 7,150,000 was for cash, 3,798,850 was for debt reduction and 4,500,000 for product rights, settlements and development.
NOTE 5 - RENT AND LEASE EXPENSE
In August 2005, MedElite, Inc., a subsidiary of the Company, entered into a lease agreement for office space at 668 Woodbourne Road, Suite 109, Middletown, Pennsylvania. The lease is effective October 31, 2005 and expires on October 31, 2008. The lease payments are $1,033 for the first year, $1,064 for the second year, and $1,096 for the third year. The Company’s three other leases total $750 per month and are leased on a month-to-month basis.
The minimum future lease payments under these leases are:
Year Ended April 30, Real Property |
The lease generally provides that insurance, maintenance and tax expenses are obligations of the Company. It is expected that in the normal course of business, leases that expire will be renewed or replaced by leases on other properties.
NOTE 6- RELATED PARTY TRANSACTIONS
During the year ended April 30, 2006, $825,000 in notes payable due to shareholders was waived by the shareholders. These amounts of notes payable that were forgiven have been reclassified to paid-in capital.
During the year ended April 30, 2007, the company has advanced to an officer amounts greater than contributed in the amount of $58,405. The officer intends to repay this amount during the fiscal second quarter of 2008.
F-12
EFOODSAFETY.COM, INC. & SUBSIDIARIES
(Formerly A Development Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
NOTE 7 - ACQUISITIONS.
On August 24, 2005, the Company sold its Ozone Safe Food, Inc. subsidiary to Mark Taggatz, former President and Chief Executive Officer of the Company, in exchange for 1.5 million shares of the Company's common stock and an agreement to receive royalty payments on equipment sales up to $60 million through December 31, 2008. The shares were used to eliminate $300,000 of the Company's debt.
On August 31, 2005, the Company acquired MedElite, Inc. from Dr. Richard Goldfarb in exchange for 10,000,000 shares of the Company's common stock, plus potential bonuses of restricted shares if certain sales/revenue benchmarks are achieved. MedElite distributes clinically proven products to physicians who then prescribe the products for their patients. It is the owner and exclusive U.S. distributor of the Talsyn(TM) product line that has been clinically proven to facilitate and improve the appearance, redness and strength of scars. The shares were value at $.17 per share, which was the market value of the stock on the date of the acquisition. In the acquisition, the Company acquired net assets of $831. The Company recognized goodwill of $1,699,169 in connection with the acquisition, which was subsequently written off to expense.
NOTE 8-LOAN RECEIVABLE
On August 7, 2006, the Company loaned Diamond Ranch Foods, Ltd. $100,000. Per the terms of the loan agreement, the loan carries an interest rate of 7.5% per annum is has a maturity date of December 31, 2007. At the maturity date, the Company can elect to either convert the outstanding principal and interest due to restricted stock of Diamond Ranch Foods, Ltd. at a fixed price of $.10 per share, or have Diamond Ranch Foods, Ltd. make monthly payments of $5,000 per month for twenty months and issue the Company 200,000 restricted shares of stock to satisfy the interest amount.
NOTE 9-INTANGIBLE ASSETS
The Company has adopted the Financial Accounting Standards Board SFAS No., 142, "Goodwill and Other Intangible Assets." SFAS 142 requires, among other things, that companies no longer amortize goodwill, but instead test goodwill for impairment at least annually. In addition, SFAS 142 requires that the Company identify reporting units for the purposes of assessing potential future impairments of goodwill, reassess the useful lives of other existing recognized intangible assets, and cease amortization of intangible assets with an indefinite useful life. An intangible asset with an indefinite useful life should be tested for impairment in accordance with the guidance in SFAS 142.
Intangible Assets consisted of the following at April 30, 2007 and 2006:
April 30, |
On December 20, 2006, the Company acquired U.S. Trademark Reg. No. 2,434,013 for the mark "Immune Boost". The Company has determined that the trademark has a useful life of fifteen years and is being amortized over that useful like.
On November 22, 2006, the Company, through its wholly-owned subsidiary Cinnergen, Inc. acquired the product rights of Cinnergen from NutraLab, Inc. In exchange for the product rights, the Company paid $100,000 and issued 1,000,000 shares of common stock valued at $170,000 to NutraLab, Inc. As part of the purchase agreement, the Company also assumed liabilities of NutraLab, Inc. of $955,826 that was offset by liabilities of the Company of $63,801 that was due to NutraLab, Inc. The Company also agreed to make additional payments totaling $175,000 to NutraLab, Inc. The total purchase price of the product rights was $1,337,025. The Company then negotiated the payables that it assumed, resulting in a reduction of the liabilities of $480,000. The aforementioned product rights were subsequently reduced representing the forgiveness of debt, to $857,025. The Company has determined that the product rights have an indefinite useful life.
F-13
EFOODSAFETY.COM, INC. & SUBSIDIARIES
(Formerly A Development Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
NOTE 9-INTANGIBLE ASSETS (continued)
The estimated amortization of the trademark for the next five years is as follows:
2008 467 2012 467 |
NOTE 10 - DISCONTINUED OPERATIONS
On August 24, 2005, Ozone Safe Food, Inc., a wholly owned subsidiary of the Company, was sold, and is no longer a subsidiary of the Company.
The assets and liabilities of Ozone Safe Food, Inc. consisted of the following:
April 30, |
On August 24, 2005, the Company sold its Ozone Safe Food, Inc. subsidiary to Mark Taggatz, former President and Chief Executive Officer of the Company, in exchange for 1.5 million shares of the Company's common stock and an agreement to receive royalty payments on equipment sales up to $60 million through December 31, 2008. No gain or loss has been recognized in connection with the disposal.
Operating results of this discontinued operation for the year ended April 30, 2006 are shown separately in the accompanying consolidated statement of operations. The operating results of this discontinued operation for the year ended 2006 consist of:
For the Year Ended |
F-14
SIGNATURES
In accordance with the requirements of Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
EFOODSAFETY.COM, INC.
|
By: /s/ Patricia Gruden |
|
|
In accordance with the Exchange Act, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
By: /s/Patricia Gruden |
EXHIBIT 31.1
SECTION 302 CERTIFICATION
I, Patricia Ross-Gruden, certify that:
1. I have reviewed this annual report on Form 10-KSB of eFoodSafety.com, Inc.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the small business issuer as of, and for, the periods presented in this report;
4. I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the small business issuer and have:
a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the small business issuer, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b. Designed such disclosure control over financial reporting, or caused such internal control over financial reporting got be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c. Evaluated the effectiveness of the small business issuer's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d. Disclosed in this report any change in the small business issuer's internal control over financial reporting that occurred during the small business issuer's fourth fiscal quarter that has materially affected, or is reasonably likely to materially affect, the small business issuer's internal control over financial reporting; and
5. I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the small business issuer's auditors and the audit committee of the small issuer's board of directors (or persons performing the equivalent functions):
a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the small business issuer's ability to record, process, summarize and report financial information; and
b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the small business issuer's internal control over financial reporting
Date: August 7, 2007
By: /s/Patricia Ross-Gruden
Patricia Ross-Gruden, Director, Chief
Executive Officer and Chief Financial Officer
EXHIBIT 32.1
SECTION 906 CERTIFICATION
In connection with the Annual Report of eFoodSafety.com, Inc. on Form 10-KSB for the period ending April 30, 2007, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Patricia Ross-Gruden, Chief Executive Officer and Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge and belief:
(1) the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2) the information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.
By: /s/Patricia Ross-Gruden |