As filed with the Securities and Exchange Commission on _________________ , 2000
--------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------------
FORM SB-2
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
--------------
RELOCATE 411.COM, INC.
(formerly Stateside Fundings, Inc.)
(Exact Name of Registrant as Specified in its Charter)
--------------
Delaware 7372 11-3462369
(State or Other Jurisdiction (Primary Standard Industrial (I.R.S. Employer
of Incorporation or Classification Code Number) Identification
Organization Number)
--------------
1 Penn Plaza
New York, New York 10119
(212) 268-5132
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive office)
Darrell Lerner
President and Chief Executive Officer
Relocate 411.com, Inc.
1 Penn Plaza
New York, New York 10119
(212) 268-5132
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
-------------------
Copies of Communications to:
Barbara R. Mittman, Esq.
Grushko & Mittman, P.C.
551 Fifth Avenue, Suite 1601
New York, New York 10176
Phone: (212) 697-9500
Fax: (212) 697-3575
<PAGE>
Approximate date of commencement of proposed sale to the public: As soon as
practicable after the effective date of this Registration Statement.
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 statement number of the earlier effective
registration statement for the same offering. / /
If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering. / /
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act, check
the following box. /X/
<PAGE>
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
====================================================================================================================================
Title of each class of Amount to be registered Proposed maximum Proposed maximum Amount of registration
securities to be registered (2) offering price per Share aggregate offering fee
price (1)
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $.0001 par 10,230,000 $1.00 $10,230,000 $2,700.72
value per share
------------------------------------------------------------------------------------------------------------------------------------
10,230,000 $1.00 $10,230,000 $2,700.72
TOTALS
====================================================================================================================================
</TABLE>
(1) Estimated in accordance with Rule 457(i) solely for the purpose of
calculating the registration fee.
(2) Includes Common Stock issuable upon exercise of certain warrants and
options.
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 in accordance
with Section 8(a) of the Securities Act of 1933 or until the Registration
Statement shall become effective on such date as the Commission, acting
pursuant to said Section 8(a), may determine.
<PAGE>
TABLE OF CONTENTS
Page
----
Prospectus Summary 4
The Offering 4
Summary Financial Information 4
Risk Factors 5
Use of Proceeds 15
Dividend Policy 15
Capitalization 15
Selected Financial Data 16
Management's Discussion and Analysis of Financial
Condition and Results of Operations 16
Business 17
Management 27
Director Compensation 27
Executive Compensation 27
Certain Transactions 30
Principal and Selling Shareholders 31
Plan of Distribution 33
Description of Capital Stock 35
Legal Matters 37
Experts 37
Available Information 37
-------------------------
No dealer, sales representative or any other person has been
authorized to give any information or to make any representations in
connection with this offering 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 Relocate 411.com,
Inc. This Prospectus does not constitute an offer to sell, or a
solicitation of an offer to buy by any person in any jurisdiction in
which it is unlawful for such person to make such offering or
solicitation. Neither the delivery of this Prospectus nor any sale
made hereunder shall under any circumstances imply that the
information herein is correct as of any date subsequent to the date
hereof.
2
<PAGE>
SUBJECT TO COMPLETION, DATED ______________________
RELOCATE 411.COM, INC.
10,230,000 Shares of Common Stock
(par value $.0001 per share)
This Prospectus relates to an aggregate 10,230,000 shares of Common Stock,
$.0001 par value per share of Relocate 411.com, Inc. which may be offered and
sold from time to time, by the Selling Shareholders named in this Prospectus
consisting of 5,115,000 shares of Common Stock and 5,115,000 shares of Common
Stock issuable upon the exercise of Warrants issued to certain subscribers
pursuant to Subscription Agreements dated January 26, 2000.
Relocate 411.com, Inc. will not receive any of the proceeds from the sale
of shares by the Selling Shareholders. However, Relocate 411.com, Inc. may
receive up to $3,836,250 from the exercise of the Warrants.
The Securities offered hereby are speculative and involve a high degree of
risk and should not be purchased by investors who cannot afford the loss of
their entire investment. See "Risk Factors" beginning on page 5.
See "Risk Factors" beginning on page 5.
These securities have not been approved or disapproved by the Securities
and Exchange Commission or any state securities commission nor has the
Commission or any state securities commission passed upon the accuracy or
adequacy of this prospectus. Any representation to the contrary is a criminal
offense.
Relocate 411.com, Inc. has agreed to bear certain expenses in connection
with the registration of the Shares being offered by the Selling Shareholders.
Relocate 411.com, Inc. has also agreed to indemnify certain of the Selling
Shareholders against certain liabilities, including liabilities arising under
the Securities Act.
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these securities
in any statement in which such offer, solicitation or sale would be unlawful
prior to registration or qualification under the Securities Laws of any such
state.
The date of this Prospectus is _______________, 2000
3
<PAGE>
Relocate 411.com, Inc.
Relocate 411.com, Inc. is an Internet-based real estate company which will
provide a wide variety of information and tools for consumers, real estate
industry, professionals, advertisers and providers of real estate related
products and services.
Relocate 411.com, Inc. was incorporated in Delaware on December 19, 1997.
Its principal executive offices are located at 1 Penn Plaza, New York, New York
10119, and its telephone number is (212) 268-5132.
The Offering
Common Stock offered by the Selling Shareholders.......... 10,230,000 shares (1)
Common Stock outstanding as of July 31, 2000.............. 12,675,000 shares
Use of Proceeds - Relocate 411.com, Inc. will not receive any proceeds from the
sale of the shares by the Selling Shareholders. However, Relocate 411.com, Inc.
may receive up to $3,836,250 from exercise of the Warrants.
(1) Includes: (i) 5,115,000 shares of Common Stock issued to Subscribers
pursuant to the Subscription Agreements; and (ii) 5,115,000 shares of
Common Stock reserved for issuance pursuant to Warrants.
Summary Financial Information
<TABLE>
<CAPTION>
Balance Sheet Data: 7/31/2000 5/31/2000
--------- ---------
<S> <C> <C>
Total Assets $2,312,760 $2,347,898
Total Liabilities 1,153,546 1,129,851
Total Stockholders' Equity 1,159,160 1,218,047
Statement of Operations:
Revenues -0- -0-
Expenses 229,781 159,073
Income (loss) from operations (229,781) (159,073)
Net Income (loss) (196,359) (137,473)
Income (loss) per share (0.01)
Shares used in computing net income (loss) per share 10,186,885
</TABLE>
4
<PAGE>
RISK FACTORS
This Prospectus contains forward-looking statements which involve risks and
uncertainties. Such forward-looking statements include, but are not limited to,
statements regarding future events and our plans and expectations. Relocate
411.com, Inc.'s actual results could differ materially from those anticipated in
these forward-looking statements as a result of certain factors, including those
set forth in the following risk factors and elsewhere in this Prospectus. In
addition to the other information in this Prospectus, the following risk factors
should be considered carefully in evaluating Relocate 411.com, Inc. and our
business before purchasing the Common Stock offered by this Prospectus.
Risk Factors Related to Relocate 411.com, Inc.'s Operations
We Have Only Had Losses During Our Limited Operating History
We have had no revenues, only losses and we may never make a profit. We
cannot predict for how long we will be able to remain in business. See Report of
Independent Auditors and Note 7 of Notes to Financial Statements.
We must obtain listings from real estate agents, brokers, home builders,
Multiple Listing Services and property owners.
Our success will depend in large part on the number of real estate listings
received from agents, brokers, home builders, MLSs and residential, rental and
commercial property owners. Many of our agreements with MLSs, brokers and agents
to display property listings will have fixed terms, typically 12 to 30 months.
At the end of the term of each agreement, the other party may choose not to
continue to provide listing information to us on an exclusive basis or at all
and may choose to provide this information to one or more of our competitors
instead. If owners of large numbers of property listings, such as large brokers,
MLSs, or property owners in key real estate markets choose not to renew their
relationship with us, our web site could become less attractive to other real
estate industry participants or consumers.
We must dedicate significant resources to market our advertising products and
services to real estate professionals.
Because the annual fee for our services sold to real estate professionals
will be relatively low, we will depend on obtaining sales from a large number of
these customers. It is difficult to reach and enroll new subscribers
cost-effectively. A large portion of our sales force will target real estate
professionals who are widely distributed across the United States. This
hopefully, will result in relatively high fixed costs which will be associated
with our sales activities.
5
<PAGE>
We will depend on a third party to sell banner and sponsorship advertising on
some of our web sites.
To date, we have not developed an internal direct sales force to sell
banner and sponsorship advertising on our web site. If we are required to
develop a large advertising sales force, our overhead would increase
significantly. Therefore, we cannot estimate the amount or the timing of any
advertising or other payments we may receive.
We will depend on distribution agreements with a number of Internet portals to
generate traffic on our web site.
We believe that a significant portion of our consumer traffic will come
from the following Internet portal sites: America Online, @Home, Excite, Go
Network/Infoseek, Lycos and Teltran International Ltd. We intend to pursue
additional distribution relationships in the future although we may not succeed
in these efforts. To secure both exclusive and non-exclusive distribution
relationships, we will have to pay significant fees. However, we may not
experience sustained increases in user traffic from these distribution
relationships.
There is intense competition for placement on Internet portals. Our
distribution agreements will have terms ranging from one to four years. When
they expire, we may be unable to renew our existing agreements or enter into
replacement agreements. If any of these agreements terminates without our
renewing it, we could experience a decline in the number of our users and our
competitive position could be significantly weakened. Even if we renew our
agreements or enter into agreements with new providers, we may be required to
pay significant fees to do so and may be unable to retain any exclusivity that
we may have enjoyed under these agreements.
Our web site may not achieve the brand awareness necessary to succeed.
In an effort to obtain additional consumer traffic, increase usage by the
real estate community and increase brand awareness, we intend to continue to
pursue an aggressive online and off-line brand enhancement strategy. These
efforts will involve significant expense. If our brand enhancement strategy is
unsuccessful, we may fail to attract new or retain existing consumers or real
estate professionals, which would have an adverse impact on our revenues.
The market for web-based advertising products and services relating to real
estate is intensely competitive.
The barriers to entry for web-based services and businesses are low, making
it possible for new competitors to proliferate rapidly. In addition, parties
with whom we have listing and marketing agreements could choose to develop their
own Internet strategies or competing real estate sites upon the termination of
their agreements with us. Many of our existing and potential competitors have
longer operating histories in the Internet market, greater name recognition,
larger consumer bases and significantly greater financial, technical and
marketing resources than we do.
6
<PAGE>
We must attract and retain personnel while competition for personnel in our
industry is intense.
We may be unable to retain our key employees or to attract, assimilate or
retain other highly qualified employees. We may experience difficulty in hiring
and retaining highly skilled employees with appropriate qualifications as a
result of our rapid growth and expansion. Attracting and retaining qualified
personnel with experience in the real estate industry, a complex industry that
requires a unique knowledge base, is an additional challenge for us. In
addition, there is significant competition for qualified employees in the
Internet industry. If we do not succeed in attracting new personnel or retaining
and motivating our current personnel, our business will be adversely affected.
We need to continue to develop our content and our product and service
offerings.
To remain competitive we must continue to enhance and improve the ease of
use, responsiveness, functionality and features of our web site. These efforts
may require us to develop internally or to license increasingly complex
technologies. In addition, many companies are continually introducing new
Internet-related products, services and technologies, which will require us to
update or modify our technology. Developing and integrating new products,
services or technologies into our web site could be expensive and time
consuming. Any new features, functions or services may not achieve market
acceptance or enhance our brand loyalty. If we fail to develop and introduce or
acquire new features, functions or services effectively and on a timely basis,
we may not continue to attract new users and may be unable to retain our
existing users. Furthermore, we may not succeed in incorporating new Internet
technologies, or in order to do so, we may incur substantial expenses.
We rely on intellectual property and proprietary rights.
We regard substantial elements of our web site and underlying technology as
proprietary. Despite our precautionary measures, third parties may copy or
otherwise obtain and use our proprietary information without authorization or
develop similar technology independently. Any legal action that we may bring to
protect our proprietary information could be expensive and distract management
from day-to-day operations. Other companies may own, obtain or claim trademarks
that could prevent or limit or interfere with use of the trademarks we use. The
Relocate411.com web site address, or domain name are important to our business.
If we were to lose the Relocate411.com domain name, our business would be harmed
and we would need to devote substantial resources towards developing an
independent brand identity. Legal standards relating to the validity,
enforceability and scope of protection of proprietary rights in Internet-related
businesses are uncertain and evolving, and we can give no assurance regarding
the future viability or value of any of our proprietary rights.
We may not be able to protect the web site addresses that are important to our
business.
Our web site address, or domain name are important to our business. The
regulation of domain names is subject to change. Some proposed changes include
the creation of additional top-level domains in addition to the current
top-level domains, such as ".com," ".net" and ".org."
7
<PAGE>
It is also possible that the requirements for holding a domain name could
change. Therefore, we may not be able to obtain or maintain relevant domain
names for all of the areas of our business. It may also be difficult for us to
prevent third parties from acquiring domain names that are similar to ours, or
that otherwise decrease the value of our intellectual property.
We could be subject to litigation with respect to our intellectual property
rights.
Other companies may own or obtain patents or other intellectual property
rights that could prevent or limit or interfere with our ability to provide our
products and services. Companies in the Internet market are increasingly making
claims alleging infringement of their intellectual property rights. We could
incur substantial costs to defend against these or any other claims or
litigation. If a claim were successful, we could be required to obtain a license
from the holder of the intellectual property or redesign our advertising
products and services.
Risk Factors Related to Real Estate Industry
Our business is dependent on the strength of the real estate industry, which is
both cyclical and seasonal.
The real estate industry traditionally has been cyclical. Recently, sales
of real estate in the United States have been at historically high levels.
Economic swings in the real estate industry may be caused by various factors.
When interest rates are high or general national and global economic conditions
are or are perceived to be weak, there is typically less sales activity in real
estate. A decrease in the current level of sales of real estate and products and
services related to real estate could adversely affect demand for our web site
and our advertising products and services. In addition, reduced traffic on our
web site would likely cause our advertising revenues to decline, which would
materially and adversely affect our business. We may experience seasonality in
our business. The real estate industry experiences a decrease in activity during
the winter. However, because of our limited operating history under our current
business model, we do not know if or when any seasonal pattern will develop or
the size or nature of any seasonal pattern in our business.
We may particularly be affected by general economic conditions.
Purchases of real property and related products and services are
particularly affected by negative trends in the general economy. The success of
our operations depends to a significant extent upon a number of factors relating
to discretionary consumer and business spending, and the overall economy, as
well as regional and local economic conditions in markets where we operate,
including:
o perceived and actual economic conditions;
o interest rates;
8
<PAGE>
o taxation policies;
o availability of credit;
o employment levels; and
o wage and salary levels.
In addition, because a consumer's purchase of real property and related
products and services is a significant investment and is relatively
discretionary, any reduction in disposable income in general may affect us more
significantly than companies in other industries.
We have risks associated with changing legislation in the real estate industry.
Real estate is a heavily regulated industry in the U.S., including
regulation under the Fair Housing Act, the Real Estate Settlement Procedures Act
and state advertising laws. In addition, states could enact legislation or
regulatory policies in the future which could require us to expend significant
resources to comply. These laws and related regulations may limit or restrict
our activities. For instance, we are limited in the criteria upon which we may
base searches of our real estate listings such as age or race. As the real
estate industry evolves in the Internet environment, legislators, regulators and
industry participants may advocate additional legislative or regulatory
initiatives. Should existing laws or regulations be amended or new laws or
regulations be adopted, we may need to comply with additional legal requirements
and incur resulting costs, or we may be precluded from certain activities. To
date, we have not spent any resources on lobbying or related government issues.
Any need to spend resources on our lobbying or related activities could
substantially increase our operating costs.
Risk Factors Related to Internet Industry
We will depend on increased use of the Internet to expand our real estate
related advertising products and services.
If the Internet fails to become a viable marketplace for real estate
content and information, our business will not grow. Broad acceptance and
adoption of the Internet by consumers and businesses when searching for real
estate and related products and services will only occur if the Internet
provides them with greater efficiencies and improved access to information. In
addition to selling advertising products and services to real estate
professionals, we will depend on selling other types of advertisements on our
web site. Our business would be adversely affected if the market for web
advertising fails to develop or develops more slowly than expected. Our ability
to generate advertising revenues from selling banner advertising and
sponsorships on our web site will depend on, among other factors, the
development of the Internet as an advertising medium, the amount of traffic on
our web site and our ability to achieve and demonstrate user demographic
characteristics that are attractive to advertisers. Most potential advertisers
and their advertising agencies have only limited experience with the Internet
9
<PAGE>
as an advertising medium and have not devoted a significant portion of their
advertising expenditures to Internet-based advertising. No standards have been
widely accepted to measure the effectiveness of web advertising. If these
standards do not develop, existing advertisers might reduce their current levels
of Internet advertising or eliminate their spending entirely. The widespread
adoption of technologies that permit Internet users to selectively block out
unwanted graphics, including advertisements attached to web pages, could also
adversely affect the growth of the Internet as an advertising medium. In
addition, advertisers in the real estate industry including real estate
professionals have traditionally relied upon other advertising media, such as
newsprint and magazines, and have invested substantial resources in other
advertising methods. These persons may be reluctant to adopt a new strategy and
advertise on the Internet.
Government regulations and legal uncertainties could affect the growth of the
Internet.
A number of legislative and regulatory proposals under consideration by
federal, state, local and foreign governmental organizations may lead to laws or
regulations concerning various aspects of the Internet, including online
content, user privacy, access charges, liability for third-party activities and
jurisdiction. Additionally, it is uncertain as to how existing laws will be
applied to the Internet. The adoption of new laws or the application of existing
laws may decrease the growth in the use of the Internet, which could in turn
decrease the usage and demand for our services or increase our cost of doing
business. Some local telephone carriers have asserted that the increasing
popularity and use of the Internet have burdened the existing telecommunications
infrastructure, and that many areas with high Internet use have begun to
experience interruptions in telephone service. These carriers have petitioned
the Federal Communications Commission to impose access fees on Internet service
providers and online service providers. If access fees are imposed, the costs of
communicating on the Internet could increase substantially, potentially slowing
the increasing use of the Internet. This could in turn decrease demand for our
services or increase our cost of doing business.
Taxation of Internet transactions could slow the use of the Internet.
The tax treatment of the Internet and electronic commerce is currently
unsettled. A number of proposals have been made at the federal, state and local
level and by various foreign governments to impose taxes on the sale of goods
and services and other Internet activities. Recently, the Internet Tax
Information Act was signed into law placing a three-year moratorium on new state
and local taxes on Internet commerce. However, future laws may impose taxes or
other regulations on Internet commerce, which could substantially impair the
growth of electronic commerce.
We will depend on continued improvements to our computer network and the
infrastructure of the Internet.
Any failure of our computer systems that causes interruption or slower
response time of our web site or services could result in a smaller number of
users of our web site. If sustained or repeated, these performance issues could
reduce the attractiveness of our web site to consumers and our advertising
products and services to real estate professionals, providers of real estate
10
<PAGE>
related products and services and other Internet advertisers. Increases in the
volume of our web site traffic could also strain the capacity of our existing
computer systems, which could lead to slower response times or system failures.
This would cause the number of real property search inquiries, advertising
impressions, other revenue producing offerings and our informational offerings
to decline, any of which could hurt our revenue growth and our brand loyalty. We
may need to incur additional costs to upgrade our computer systems in order to
accommodate increased demand if our systems cannot handle current or higher
volumes of traffic.
The recent growth in Internet traffic has caused frequent periods of
decreased performance. Our ability to increase the speed with which we provide
services to consumers and to increase the scope of these services is limited by
and dependent upon the speed and reliability of the Internet. Consequently, the
emergence and growth of the market for our services is dependent on the
performance of and future improvements to the Internet.
Our internal network infrastructure could be disrupted.
Our operations will depend upon our ability to maintain and protect our
computer systems. Therefore, our systems are vulnerable to damage from
break-ins, unauthorized access, vandalism, fire, floods, earthquakes, power
loss, telecommunications failures and similar events. Although we will maintain
insurance against fires, floods, earthquakes and general business interruptions,
the amount of coverage may not be adequate in any particular case.
Experienced computer programmers, or hackers, may attempt to penetrate our
network security from time to time. A hacker who penetrates our network security
could misappropriate proprietary information or cause interruptions in our
services. We might be required to expend significant capital and resources to
protect against, or to alleviate, problems caused by hackers. We also may not
have a timely remedy against a hacker who is able to penetrate our network
security. In addition to purposeful security breaches, the inadvertent
transmission of computer viruses could expose us to litigation or to a material
risk of loss.
We could face liability for information on our web sites and for products and
services sold over the Internet.
We will provide third-party content on our web site, particularly real
estate listings. We could be exposed to liability with respect to this
third-party information. Persons might assert, among other things, that, by
directly or indirectly providing links to web sites operated by third parties,
we should be liable for copyright or trademark infringement or other wrongful
actions by the third parties operating those web sites. They could also assert
that our third party information contains errors or omissions, and consumers
could seek damages for losses incurred if they rely upon incorrect information.
We will enter into agreements with other companies under which we will
share with these other companies revenues resulting from advertising or the
purchase of services through direct links to or from our web site. These
arrangements may expose us to additional legal risks and uncertainties,
including local, state, federal and foreign government regulation and potential
11
<PAGE>
liabilities to consumers of these services, even if we do not provide the
services ourselves. We cannot assure you that any indemnification provided to us
in our agreements with these parties, if available, will be adequate.
Even if these claims do not result in liability to us, we could incur
significant costs in investigating and defending against these claims. Our
general liability insurance may not cover all potential claims to which we are
exposed and may not be adequate to indemnify us for all liability that may be
imposed.
We are uncertain of our ability to obtain additional financing for our future
capital needs.
We may need to raise additional funds in order to fund more rapid expansion, to
expand our marketing activities, to develop new or enhance existing services or
products, to respond to competitive pressures or to acquire complementary
services, businesses or technologies. We may also need to raise funds in the
future to meet our working capital needs. Additional financing may not be
available on terms favorable to us, or at all.
Risks Related to Offering
Control by Existing Shareholders May Effect All Decisions Requiring Shareholder
Approval.
Relocate 411.com, Inc.'s present directors and executive officers will own
approximately 37.22% of the outstanding Common Stock of Relocate 411.com, Inc.
after the issuance of the 10,230,000 common shares described hereinafter. As a
result, these shareholders, if they act as a group, will be able to
significantly influence the outcome of all matters requiring shareholder
approval, including the election of directors and approval of significant
corporate transactions.
Shares Eligible For Future Sale May Have Adverse Effect on Trading Market.
A substantial number of shares of Common Stock currently outstanding, or
issuable upon exercise of outstanding stock options and warrants, are or will
become eligible for future sale in the public market at prescribed times
pursuant to applicable regulations or registration rights held by certain
security holders. Sales of substantial amounts of Common Stock in the public
market, or the perception that such sales will occur, could have a material
negative effect on the market price of our Common Stock. This problem would be
excaserbated if we issue Common Stock in exchange for equipment and services.
Stock Option Plan May Dilute Shareholders.
The shareholders and Board of Directors of Relocate 411.com, Inc. adopted a
2000 Stock Option Plan with reference to 5,100,000 common shares. The issuance
of the 5,100,000 shares pursuant to the 2000 Stock Option Plan may be further
dilutive to shareholders.
12
<PAGE>
Office Rent May Increase.
We are currently leasing approximately 1,000 square feet for our executive
offices at 1 Penn Plaza, New York, New York, for $2,000 per month pursuant to a
Sublease Agreement. The term of the Sublease Agreement is one year beginning
January 1, 2000 through December 31, 2000 and renewable annually at Relocate's
option for up to ten years. In the future, we may have to rent other space at a
higher cost.
No Dividends Have Been Paid.
No dividends have been paid on any of our Common Stock and we do not expect
to pay any dividends in the foreseeable future.
Our Directors Have Certain Conflicts of Interest, Are Involved in Other Projects
and Therefore Have a Limited Amount of Time to Devote to Relocate 411.com, Inc.
Darrell Lerner, our President and Director, serves as director and as the
President, of Fantasy Sports Net, Inc., a New York corporation. Byron Lerner,
our Vice-President and Director, serves as director and President, of Teltran
International Group, Inc., provider of the internet portal to Relocate 411.com,
Inc. He may make decisions about the portal that are favorable to Teltran
International Group, Inc., but are not favorable to Relocate 411.com, Inc. These
other projects may affect their ability to devote sufficient time to their
duties.
Our Directors Have Limited Liability.
Under our Certificate of Incorporation, the directors cannot be held liable
to Relocate 411.com, Inc. or to the stockholders for monetary damages for breach
of fiduciary duties except under certain limited circumstances.
We May Not Be Able to Obtain a Trading Market for Your Shares.
Trading in our Common Stock, if any, is intended to be conducted on the OTC
Bulletin Board or the NASDAQ SmallCap Market, after we obtain a listing, if
ever. Because we may not be able to obtain or maintain a listing on the NASDAQ
SmallCap or the OTC Bulletin Board, your shares may be difficult or impossible
to sell. However, if we are unable to qualify for this listing, we believe that
our stock will trade on over-the-counter market in the so-called "pink sheets".
Consequently, selling your Common Stock would be more difficult because only
smaller quantities of stock could be bought and sold, transactions could be
delayed, and security analysts' and news media's coverage of Relocate 411.com,
Inc. may be reduced. These factors could result in lower prices and larger
spreads in the bid and ask prices for our stock.
We May Be Unable to Sell Stock in Some States Due to Blue Sky Regulations.
In order for our Common Stock to be resold, it must be registered with the
individual states. We cannot be assured that any or all stock registrations in
various states will be approved.
13
<PAGE>
If a registration is not approved, it will be more difficult for you to sell
your stock. Presently, we intend to file a blue sky application only in New York
State.
We May Not Be Able to Obtain Future Equity Financing.
Subsequent to the completion of this offering, the Company requires
substantial additional capital to implement our expansion plan and to support
future growth. We cannot be assured that additional capital will be available or
that, if available, such capital will be on satisfactory terms.
Broker-Dealers May Be Unable to Sell Our Stock.
If our Common Stock is not listed on the NASDAQ SmallCap Market and/or any
stock exchange, it may become subject to rules that impose sales practice
requirements on broker-dealers. Consequently, the rule may affect the ability of
broker-dealers to sell your stock.
14
<PAGE>
USE OF PROCEEDS
The net proceeds to Relocate 411.com, Inc. from the sale of Shares pursuant
to the subscription agreements is estimated to be $1,542,000. The following
represents Relocate 411.com, Inc.'s best estimate as to how the proceeds will be
expended. Relocate 411.com, Inc. reserves the right to redirect any portion of
the funds either amongst the items referred to below or to such other projects
of Relocate 411.com, Inc. as management considers being in the best interest of
Relocate 411.com, Inc. Relocate 411.com, Inc. anticipates that the net proceeds
of the offering will be utilized as follows:
Description of Use Amount Percent
------------------ ------ -------
Equipment $100,000 6.45%
Construction of Web Site 400,000 25.80%
Marketing and Advertising 500,000 32.35%
Working Capital 300,000 19.35%
Salaries 142,000 9.16%
General and Administrative 100,000 6.45%
The net proceeds will fund the capital expenditures required through
September, 2001.
DIVIDEND POLICY
Relocate 411.com, Inc. has never paid any cash dividends on its Common
Stock and does not anticipate paying any cash dividends in the foreseeable
future. Relocate 411.com, Inc. currently intends to retain future earnings, if
any, to fund the development and growth of its business.
CAPITALIZATION
The following table sets forth the capitalization of Relocate 411.com, Inc.
as of July 31, 2000. This section should be read in conjunction with Relocate
411.com, Inc.'s Financial Statements and Notes thereto appearing elsewhere in
this Prospectus.
Long Term Indebtedness........................................... $ -0-
-----------
Common Stock, $.0001 par value; 50,000,000 shares,
authorized; 12,675,000 shares issued and outstanding........ $ 1,268
Additional paid-in-capital.................................. 1,355,555
Deficit..................................................... (197,663)
Total Stockholders' equity.................................. 1,159,160
15
<PAGE>
SELECTED FINANCIAL DATA
The following selected financial data is derived from Relocate 411.com,
Inc.'s audited financial statements, which statements have been audited by
Liebman Goldberg & Drogin LLP, independent certified public accountants, and
appear elsewhere in this Prospectus. The results of operations for the period
ended July 31, 2000 are not necessarily indicative of the results for the full
year. The following data should be read in conjunction with "Management's
Discussion and Analysis of Financial Condition and Results of Operations" and
Relocate 411.com, Inc.'s Financial Statements and Notes thereto included
elsewhere in this Prospectus.
<TABLE>
<CAPTION>
Balance Sheet Data: 7/31/2000 5/31/2000
--------- ---------
<S> <C> <C>
Total Assets $2,312,760 $2,347,898
Total Liabilities 1,153,546 1,129,851
Total Stockholders' Equity 1,159,160 1,218,047
Statement of Operations:
Revenues -0- -0-
Expenses 229,781 159,073
Income (loss) from operations (229,781) (159,073)
Net Income (loss) (196,359) (137,473)
Income (loss) per share (0.01)
Shares used in computing net income (loss) per share 10,186,885
</TABLE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following Management's Discussion and Analysis of Financial Condition
and Results of Operations contains forward-looking statements which involve
risks and uncertainties. Relocate 411.com, Inc.'s actual results could differ
materially from those anticipated in these forward-looking statements as a
result of certain risk factors, including those set forth under "Risk Factors"
and elsewhere in this Prospectus. The following discussion also should be read
in conjunction with Relocate 411.com, Inc.'s Financial Statements and notes
thereto included elsewhere in this Prospectus.
Results of Operations - Inception (December 19, 1997) through July 31, 2000
Relocate 411.com, Inc. is considered to be in the development stage as
defined in Statement of Financial Accounting Standards No. 7. There have been no
operations since incorporation.
Plan of Operation
We anticipate that we will be able to satisfy our cash requirements through
September,
16
<PAGE>
2001 and then we will have to raise additional funds. We plan on hiring one
additional person.
Revenues/Expenses
Relocate 411.com, Inc. has not produced any revenues. As of July 31, 2000,
total expenses are $229,781. Cash and cash equivalents as of July 31, 2000 is
$1,153,185.
BUSINESS
Overview
Industry Background
The Real Estate Industry
The real estate industry accounts for approximately 15% of the gross
domestic product of the United States and is therefore one of the largest
sectors of the economy. The real estate industry is commonly divided into the
residential and commercial sectors. The residential sector includes the
purchase, sale, rental, remodeling and new construction of homes and represents
approximately $1 trillion per year. The commercial sector includes the lease,
resale, and new construction of property for businesses and represents
approximately $300 billion per year.
The Residential Real Estate Market
Buying a home is the largest financial decision, and represents one of the
most difficult and complex processes, most consumers will ever undertake. The
process of finding a home begins a lifelong cycle which most consumers will move
through once every seven to eleven years. This cycle tracks major life events
such as employment, marriage, children and retirement.
A significant portion of the United States economy has evolved around
helping consumers as they navigate through this home and real estate cycle. An
enormous network of support services and products exists to assist consumers in
finding a property, building a property, renting or buying a property, moving,
owning a property and selling a property.
Find a Property. The following real estate professionals and organizations
assist consumers in finding a property:
Real Estate Agents. Real estate agents are independent contractors that are
licensed to negotiate and transact the sale of real estate on behalf of
prospective buyers and sellers. There are over 1.0 million real estate agents in
the United States. Consumers spend in excess of $30 billion annually for
assistance with the finding, buying and selling of residential property.
Real Estate Brokers. Real estate brokers are paid a commission to bring
buyers and sellers together and assist in negotiating contracts. Real estate
brokers often have their own
17
<PAGE>
independent offices and may employ other licensed real estate agents. There are
over 100,000 real estate brokers in the United States.
Residential Franchisers. There are six major residential franchisers in the
United States: Century 21, Coldwell Banker and ERA, which collectively comprise
the Cendant franchise; RE/MAX; Prudential; and Better Homes & Gardens. These
franchisers together represent thousands of independently owned and operated
real estate offices and hundreds of thousands of real estate professionals in
the United States.
Multiple Listing Services. MLSs operate proprietary networks that provide
real estate professionals with listings of properties for sale, and are
regulated by a governing body of local brokers and/or agents.
There are approximately 800 MLSs nationwide that aggregate local property
listings by geographic location. We estimate that, as of June 30, 2000, MLSs
provided approximately 1.47 million resale home listings nationwide.
National Association of Realtors. The NAR is the largest trade association
in the United States that represents real estate professionals. The NAR consists
of residential and commercial realtors, including brokers, agents, property
managers, appraisers, counselors and others engaged in all aspects of the real
estate industry. The NAR has approximately 720,000 members.
Build a Property. In addition to the real estate professionals and
organizations involved in finding a home, the new home market is also served by
a large group of dedicated professionals including:
o Home Builders. New homes are built primarily by a limited number of
national home builders and a much larger number of local volume and
custom builders. In 1999, home builders built over 800,000 homes,
generating over $160 billion in sales.
o National Association of Home Builders. The NAHB is the second largest
real estate trade association in the United States. As of December 31,
1999, the NAHB's members include approximately 197,000 firms.
Approximately one-third of the NAHB's members are home builders and/or
remodelers, and the remainder work in closely related fields within
the residential real estate industry, such as mortgage, finance,
building products, and building services including subcontractors.
Rent a Property. Today, over 30 million households in the United States
reside in rental housing. In addition to real estate agents and brokers who
assist in the leasing of residential rental units, professionals serving this
segment of the market include the following:
o Property Owners. Property owners include owners of individual
apartment units, multi-family apartment complexes, individual single
family rental homes or other residential rental properties. Property
owners may lease and operate their rental properties
18
<PAGE>
themselves or outsource those functions to other real estate
professionals, such as property managers. The residential rental
ownership market is highly fragmented, with the 50 largest owners of
multi-family apartment complexes owning approximately 10% of all
apartment rental units in the United States.
o Property Managers. Property managers are typically responsible for
leasing available rental units, collecting rents, and maintaining the
property. Property managers typically manage a number of apartment
complexes, and will employ third party leasing agents to assist them
with the leasing function. The property manager market is also highly
fragmented, with the 50 largest property managers, many of whom also
own their properties, managing approximately 10% of all apartment
rental units in the United States.
Buy and Sell a Property. Because of the complexity and size of the purchase
or sale transaction, consumers buying or selling a home typically rely upon a
series of professionals, including real estate agents and ancillary service
providers, such as mortgage brokers, title agents, escrow agents, attorneys,
inspectors and appraisers. These professionals and ancillary service providers
offer products and services, such as mortgages, title insurance, credit reports,
appraisals and inspections, that generated in excess of $49 billion in
transactional fees in 1999.
Move. Every time consumers buy, sell or rent a home, they need assistance
with various relocation related services, such as insurance and moving supplies
and services. We estimate that consumers spend over $100 billion each year for
home and apartment moves including moving services and related product
purchases. In addition, real estate transactions often lead to significant
lifestyle changes for consumers, including changing neighborhoods, schools,
shopping malls, banks, grocers, cleaners and other retail relationships. As a
result, consumers need information about the wide range of available product and
service alternatives relating to all aspects of their relocation.
Maintain a Property. Ownership represents the longest portion of the home
and real estate life cycle. Homeowners purchase a large number of household and
home related products including furniture, appliances, hardware and supplies.
During this phase of the home and real estate life cycle, homeowners also
require a number of ancillary services, relating to such activities as home
maintenance and repairs, refinancing, remodeling and landscaping. As a result,
homeowners are continuously seeking sources of information to assist them in
locating providers of these products and services.
Challenges in the Real Estate Market
Every participant in the home and real estate life cycle faces a unique set
of challenges:
Home Buyers. In order to dispel the fear of purchasing the wrong home or
paying too much for a home, consumers must be assured that they have considered
all available options. Therefore, home buyers require an extensive amount of
information and several decision tools to help bolster confidence during the
home buying process. To make an informed decision,
19
<PAGE>
consumers need access to a comprehensive listing of homes for sale and require
information about specific neighborhoods and listed prices of comparable homes
for sale in a given geographic location.
Once a home has been selected, consumers must consider a broad range of
related services, including mortgage, title, escrow, insurance, moving and
relocation services as well as remodeling alternatives. As a result, consumers
are continually searching for additional information and resources to assist
them in every aspect of the real estate transaction and need a comprehensive,
convenient and integrated source of information that assists them in each step
of the process.
Real Estate Agents and Brokers. Real estate agents and brokers depend on
attracting and retaining customers in order to generate increasing numbers of
transactions. Due to its size and complexity, it is not uncommon for the real
estate transaction to take several months to complete. As a result, the job of
real estate agents and brokers is complicated by a variety of factors. Therefore
real estate agents and brokers are looking for additional opportunities to
market their services, become more productive and compete more effectively for
transactions. In addition, they seek greater efficiency in disseminating
information to their prospective clients and are looking for tools that can help
them streamline their current practices.
Home Builders. Home building and real estate professionals who focus on new
homes and new home developments also depend on attracting and retaining
customers in order to sell new properties in a timely manner. However, home
builders have not developed an infrastructure similar to an MLS to aggregate,
update and share data regarding available inventory. Nor do they have the
infrastructure to communicate this information to potential buyers. As a result,
home building and real estate professionals continue to seek new ways to market
their products and services and inform prospective home buyers of the
availability of new properties.
Renters, Property Managers and Owners. To make an informed decision,
renters need access to comprehensive information about available rental units,
specific neighborhoods and rental prices in a given geographic location. Because
of the high turnover rate in rental units, property managers and owners must
regularly attract new tenants to minimize their vacancy rates. We estimate that
approximately $1.8 billion was spent in 1999 to market apartments and rental
homes. The rental market has not developed a central repository for
comprehensive listings accessable by potential renters nationwide and property
managers and owners are continuously seeking to market their available units in
a cost-effective manner.
Ancillary Service Providers. Consumers require a variety of products and
services throughout the home and real estate life cycle. The real estate
transaction provides service providers and retailers the opportunity to target
consumers at a time when they are shifting their buying patterns. Providers and
retailers of these products or services need an effective mechanism to reach
consumers who are most interested in their offerings. Ideally, these providers
of products and services would have a centralized location where they could
advertise their offerings to a target group of consumers who are engaged in the
real estate process.
20
<PAGE>
The Internet and Real Estate
The emergence and acceptance of the Internet is fundamentally changing the
way that consumers and businesses communicate, obtain information, purchase
goods and services and transact business. Because of its size, fragmented nature
and reliance on the exchange of information, the real estate industry is
particularly well suited to benefit from the Internet. The real estate industry
currently spends $3.5 billion a year on advertising and print media. Traditional
sources of advertising and print media, including classifieds and other off-line
sources, are not interactive and are limited by incomplete and inaccurate data
that is local in scope and is typically disseminated on a weekly basis. These
traditional sources also lack content that can be searched based on specified
terms, a centralized database of information and the ability to conduct two-way
communications. The Internet offers a compelling means for consumers, real
estate professionals, home builders, renters, property managers and owners and
ancillary service providers to come together to improve the dissemination of
information and enhance communications.
We plan on pioneering the use of the Internet to bring the real estate
industry online and to enable real estate industry participants to benefit from
the Internet.
Our Strategy
Our objective is to provide people who are unfamiliar with a new city with
the resources they need to make an informal decision on where exactly they want
to move to. The key elements of our strategy will include connecting consumers
and professional service providers by increasing the content and relevant data
available on our web site.
Increase Usage of Our Web Site. We will seek to increase the number of
people using our web site as well as the amount of time they will spend there.
We plan to develop distribution arrangements with Internet portals. We intend to
pursue distribution relationships with high traffic web sites and web sites
offering real estate related services. We also expect to increase our marketing
efforts in traditional media, such as newspaper advertisements, radio and
television promotions. We also intend to add features and content to our web
site designed to encourage users to spend more time on our web site.
Industry Professionals. We plan on developing relationships with key real
estate industry participants, such as the NAR, the NAHB, MLSs, brokers and
builders in order to provide us with a distinct competitive advantage. These
relationships will provide us with opportunities to market our services to their
members. These relationships also allow us to provide consumers with
comprehensive information and resources related to all aspects of the home and
real estate life cycle, such as real estate listings and neighborhood
information, directories of REALTORS and real estate news. We plan to pursue
additional or broader listing and marketing relationships with key industry
participants.
Develop and Extend Our Brand Recognition. As more consumers and real estate
professionals utilize the Internet for their real estate needs, we believe that
brand awareness will
21
<PAGE>
provide us with a significant competitive advantage. We plan to expand our
marketing efforts with advertising campaigns in traditional media as well as on
the Internet in order to build greater recognition for our web site.
Incorporate Emerging Internet Technologies. We believe the evolution of the
Internet will provide us with the opportunity to move more real estate related
information and activities onto the Internet.
Products and Services
Our site will enable potential home buyers to browse, free of charge, from
our searchable database. We plan to have content arrangements with Multiple
Listing Services across the United States to provide the listings. Our property
listings will typically provide information that is significantly more detailed
and timely than that included in alternative media channels, such as newspaper
classified advertisements. A Multiple Listing Service operates proprietary
networks that provide real estate professionals with listings of properties for
sale and are regulated by a governing body of local brokers and/or agents. We
will receive the balance of our listings from real estate brokers. We will also
provide "for sale by owner" listings.
We plan on providing decision support tools, such as mortgage calculators
and finance worksheets, information concerning the home buying and selling
process and features such as city profiles that aid users in evaluating the
attributes of particular neighborhoods or geographic locations, including but
not limited to school district ratings, neighborhood profiles, restaurant
ratings, information on places of worship and local social events.
Our Find a Home feature will allow potential home buyers to search our
database of home listings. The user will select a geographic region or a
specific MLS property identification number. The user can refine their home
search by selecting neighborhood and home characteristics. Our search engine
will return a list of homes ranked by their conformity to the users' search
criteria. The search results will provide pictures of the homes, if available,
descriptions of the properties, the name and contact information of the agent
that represents the home seller and, for certain homes, virtual tours. For
agents, the consumer's search results will also provide a direct link to their
personalized web site displaying each property listed by the agent.
Our Find a Realtor feature allows a user to contact a realtor to buy or
sell a home in a given geographic area. The user can search for realtors who
specialize in the cities or zip codes specified by the user. Users can also
search by keyword and/or by office name or name of the realtor. We will provide
a list of realtors meeting the search criteria, which includes a link to each
realtor's home page, their office name, phone and fax numbers, their e-mail
address and a brief description of their specialty.
We intend to create a separate area of the site that will cater
specifically to college students by compiling an extensive list of off-campus
housing listings at major universities throughout the country. This particular
area of the real estate market is one of constant turnover
22
<PAGE>
and large demand. Students move into new off-campus housing on a year to year
basis and we feel we can fill the demand that exists among both the students
seeking housing and the owners trying to rent their properties. Access to these
listings will be free to site visitors and those who place the listings online
will be charged a small listing fee. We anticipate advertising in college
newspapers and publications as well as through word of mouth.
Our Find a Neighborhood feature will enable users to locate desired
neighborhoods by searching information such as quality of schools, crime rate,
average home cost, and urban/rural profiles. Once a profile has been
established, our search engine returns a map ranking geographic areas according
to the user's criteria.
Real Estate Agents. This search enables users desiring to find a realtor to
assist them in their new home search in a specified geographic area. After
entering search criteria, the results display a list of agents by real estate
office. By clicking on the agent's name, users go to the selected agent's home
page. Links to real estate office are also available. Properties listed on our
web site will include large multi-family apartment complexes as well as smaller,
single family homes.
Multi-Family Apartment Complexes. We will offer property owners and
managers of multi-family apartment complexes the opportunity to list basic
rental information free of charge. Basic listing information is a text-based
presentation of information which will summarize rental listings in a manner
similar to that which might be found in a local listing publication. We will
also offer enhanced features to owners and managers for a monthly subscription
fee. These enhanced features can include:
o color photos and detailed property and rental unit descriptions for
all unit types, including monthly rental ranges;
o premium placement of listings at the top of rental search results
returned, as well as links to an owner's or manager's web page;
o maps and driving instructions to the property;
o inquiries from renters inquiring about specific properties sent by
electronic e-mail; and
o detailed monthly reports of web page and lead activity.
Single Family Homes. Owners of individual units or small buildings listed
with a realtor, and in some areas other real estate professionals, can list
their available rental units with the individual unit listing service. The owner
completes a form which contains up to 24 standard features about the unit and
its amenities. The owner can also designate special amenities about the unit and
have a photo of the unit posted for an additional fee.
23
<PAGE>
We plan on offering these services to real estate professionals on a
subscription basis. We plan on selling Internet banner advertising and
sponsorships on our web site to advertisers other than property owners and
property managers, and plan to offer a fee-based consumer service. The consumer
service allows consumers to receive access to less widely disseminated rental
listings in markets where vacancies are very low, such as in New York City, San
Francisco and Seattle.
Property Listings. The property listings feature will provide access to
commercial property listings by linking to a comprehensive collection of web
sites containing commercial property listings. By providing access to a
centralized resource for commercial property links, we will enable commercial
real estate professionals to connect quickly and easily to web sites containing
listings that were not previously accessible from a single source.
Real Estate Industry Relationships
We plan on establishing relationships with a number of important
participants in the real estate industry. These will include relationships with
the NAR and the NAHB, our content relationships with brokers, homebuilders and
MLSs and our marketing relationships with major real estate franchises.
Sales and Marketing
An important element of our business strategy is to build brand recognition
around our web site and our products and services.
Competition
We believe that the principal competitive factors in attracting consumers
to our web site will be:
o the total number of listings and the number of listings for the
consumer's specific geographic area of interest available on our web
site;
o the parties with which web site operators have listing, marketing or
distribution relationships;
o the quality and comprehensiveness of general real estate related,
particularly home-buying, information available on our web site;
o the availability and quality of other real estate related products and
services available through our web site; and
o the ease of use of our web site.
24
<PAGE>
We believe that the principal competitive factors in attracting
advertisers, content providers and real estate professionals to our web site
will be:
o the number of visitors to our web site;
o the average length of time these visitors spend viewing pages on our
web site;
o our relationships with, and support for our services by, the NAR and
the NAHB; and
o our relationships and national contracts with the major home builders
and rental property owners and managers in the United States.
Our main existing and potential competitors for home buyers, sellers and
renters and related content include:
o web sites offering real estate listings together with other related
services, such as Apartments.com, CyberHomes, HomeHunter.com,
HomeSeekers, iOwn, LoopNet, Microsoft's HomeAdvisor,
NewHomeNetwork.com and RentNet;
o web sites offering real estate related content and services such as
mortgage calculators and information on the home buying, selling and
renting processes;
o general purpose consumer web sites, such as AltaVista and Yahoo^ that
also offer real estate-related content; and
o traditional print media such as newspapers and magazines.
Our main existing and potential competitors for advertisements may include:
o general purpose consumer web sites such as AltaVista, America Online,
Excite, Lycos, Netscape's Netcenter and Yahoo;
o general purpose online services that may compete for advertising
dollars;
o online ventures of traditional media, such as Classified Ventures; and
o traditional media such as newspapers, magazines and television.
The barriers to entry for web-based services and businesses are low, making
it possible for new competitors to proliferate rapidly. In addition, parties
with whom we plan to have listing and marketing agreements could choose to
develop their own Internet strategies or competing real estate sites upon the
termination of their agreements with us. Many of our existing and potential
competitors have longer operating histories in the Internet market, greater name
recognition, larger consumer bases and significantly greater financial,
technical and marketing resources than we do.
25
<PAGE>
Operations
We will maintain our computer system at our corporate headquarters. Our
operations are dependent upon our ability to protect our systems against damage
from fire, hurricanes, power loss, telecommunications failure, break-ins,
computer viruses and other events beyond our control. We will maintain access to
the Internet through third-party providers. Any disruption in our Internet
access, failure of our third party providers to handle higher volumes of users
or damage or failure that causes system disruptions or other significant
interruptions in our operations could have an adverse effect on our business.
Facilities
We currently lease approximately 1,000 square feet for our executive
offices at 1 Penn Plaza, New York, New York, for $2,000 per month pursuant to a
Sublease Agreement whose term is one year beginning January 1, 2000 through
December 31, 2000, and renewable at Relocate's option for up to ten (10) years,
from Teltran International, Inc. Byron Lerner, Vice-President and Director of
Relocate 411.com, Inc. is also the president of Teltran International, Inc. We
believe that the terms of such leasing arrangement are no less favorable than
those that we could have obtained from an independent third party.
Legal Proceedings
We are not currently nor have ever been a party to any legal proceedings,
the adverse outcome of which, individually or in the aggregate, would have a
material adverse effect on our financial position or results of operations.
26
<PAGE>
MANAGEMENT
Directors and Executive Officers
The directors and executive officers of Relocate 411.com, Inc. are as
follows:
Name Age Position
---- --- --------
Darrell Lerner 26 President, Chief Executive
Officer, Treasurer and Director
Byron R. Lerner 56 Vice-President, Secretary and
Director
Darrell Lerner (age 26) has been Relocate 411.com, Inc.'s President and
Director since its inception. From April, 1998 to the present, Mr. Lerner has
been the president and director of Fantasy Sports Net, Inc., an internet company
which provides interactive fantasy sports games and sports related information.
Mr. Lerner is a Cum Laude graduate of Hofstra University and a agraduate of
Hofstra Law School. Mr. Lerner has a degree in business administration/finance
and extensive experience in tele-communications and journalism.
Byron R. Lerner (age 56) has been Relocate 411.com, Inc.'s Vice-President
and Director since its inception. From June, 1997 to the present, Mr. Lerner has
been the president and chief executive officer of Teltran International, a
public company on the NASDAQ Bulletin Board. From April, 1998 to the present,
Mr. Lerner has been the vice-president, secretary and director of Fantasy Sports
Net, Inc., an internet company which provides interactive fantasy sports games
and sports related information. Between 1993 and 1995, Mr. Lerner was president
of International of GlobalCom, a firm he founded which engaged in the resale of
domestic and international long distance phone time. From 1990 to 1993, Mr.
Lerner was president of L&S Communications, a reseller of domestic and
international long distance telephone time. Mr. Lerner brings over twenty-five
years of sales and general management experience to Relocate 411.com, Inc.
Director Compensation
We reimburse our directors for out-of-pocket expenses incurred in
connection with their rendering of services as directors. We currently do not
intend to pay cash fees to our directors for attendance at meetings.
Executive Compensation
The following table sets forth compensation earned by our Chief Executive
Officer and our other executive officers (the "Named Executive Officers") to
date:
27
<PAGE>
Name Principal Position Year Salary
---- ------------------ ---- ------
Darrell Lerner President, Chief Executive 2000 $52,000
Officer, Treasurer and
Director
Byron R. Lerner Vice-President, Secretary 2000 $52,000
and Director
All directors hold office until the next annual meeting of stockholders and
the election and qualification of their successors. Executive officers are
elected annually by the Board of Directors to hold office until the first
meeting of stockholders and until their successors are chosen and qualified.
2000 Stock Option Plan
Effective January, 2000, Relocate 411.com, Inc.'s shareholders approved the
Stock Plan. The purpose of the 2000 Stock Plan is to promote the interests of
the Company and its stockholders by providing its officers and employees with an
incentive to continue service with the Company. Accordingly, the Company may
grant to selected officers and employees Stock Options and/or Stock Appreciation
Rights in an effort to attract and retain in its employ qualified individuals
and to provide such individuals with incentives to devote their best efforts to
the Company through ownership of the Company's stock, thus enhancing the value
of the Company for the benefit of stockholders.
Relocate 411.com, Inc.'s 2000 Stock Option Plan was adopted by the Board of
Directors in January, 2000. The 2000 Plan provides for the grant of "incentive
stock options," within the meaning of the Internal Revenue Code, to employees
and officers of Relocate 411.com, Inc., and non-qualified stock options to
employees, consultants, directors and officers of Relocate 411.com, Inc. Up to
5,100,000 shares of Common Stock are authorized for issuance under the 2000
Plan. As of July 31, 2000, no stock options have been exercised.
The Stock Plan is administered by the Board of Directors. The Board of
Directors has authority to determine when and to whom to make grants of awards,
the number of shares to be covered by the grants, the types and terms of options
and other stock-related awards granted and the exercise price of options and
stock appreciation rights, provided that the exercise price of an option and the
appreciation base of a stock appreciation right may not be less than the fair
market value of the shares of the Common Stock on the date of grant, except
that, in the case of an incentive stock option granted to an individual who, at
the time such incentive stock option is granted, owns shares possessing 10% or
more of the total combined voting power of all classes of stock of Relocate
411.com, Inc., the option exercise price may not be less than 110% of such fair
market value on the date of grant.
28
<PAGE>
Employees and Employment Agreement
Our business will be managed by Darrell Lerner, who shall serve as our
President, Chairman of the Board of Directors, Chief Executive Officer and
Treasurer, Byron R. Lerner, who shall serve as our Vice-President and Secretary,
and Barry Manko, who is employed as Vice-President of Marketing and Development.
We do not maintain key man life insurance covering any of our personnel. In
January, 2000, we entered into employment agreements with Darrell Lerner, Byron
R. Lerner, and Barry Manko, for annual salaries of $52,000, $52,000, and
$67,000, respectively, subject to increases whether or not we have revenues. We
also intend to grant bonuses based on profits to senior management and other
employees, if any.
Our future success depends in large part upon our ability to attract and
retain highly qualified employees. Competition for such personnel is intense,
and we cannot assure that we will be able to retain our senior management or
other key employees or that we will be able to attract and retain additional
qualified personnel in the future.
Limitation of Liability of Directors and Officers
As permitted by the Business Corporation Law of the State of New York, our
Articles of Incorporation provide that directors and officers of Relocate
411.com, Inc. will not be personally liable to us or our shareholders for
monetary damages for breach of fiduciary duty as a director or officer, except
for liability for breach of a director's or officer's duty of loyalty to us or
our shareholders, for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, for acts relating to
unlawful distributions or for any transaction from which the director or officer
derived an improper personal benefit. Our Articles of Incorporation also
provide, subject to certain exceptions, that we shall, to the maximum extent
permitted from time to time under the law of the State of New York, indemnify,
and upon request shall advance expenses to, any director or officer to the
extent permitted under such law as it may from time to time be in effect. Our
bylaws require us to indemnify, to the full extent permitted by law, any
director, officer, employee or agent of Relocate 411.com, Inc. for acts which
such person reasonably believes are not in violation of our corporate purposes
as set forth in the Articles of Incorporation. As a result of these provisions,
shareholders may be unable to recover damages against our directors and officers
for actions taken by them which constitute negligence, gross negligence, or a
violation of their fiduciary duties, which may reduce the likelihood of
shareholders instituting derivative litigation against directors and officers
and may discourage or deter shareholders from suing directors, officers,
employees and agents of Relocate 411.com, Inc. for breaches of their duty of
care, even though such an action, if successful, might otherwise benefit us and
our shareholders. However, we have been informed that in the opinion of the
Securities and Exchange Commission, such indemnification is against public
policy as expressed in the Act and is therefore unenforceable. In the event that
a claim for indemnification against such liabilities, other than the payment by
us of expenses incurred or paid by a director, officer or controlling person 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, we will, unless in the opinion of our counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against
29
<PAGE>
public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
CERTAIN TRANSACTIONS
On January 26, 2000, we entered into subscription agreements with each of
the Subscribers. Pursuant to the Agreements, Relocate 411.com, Inc. was entitled
to aggregate proceeds of up to $1,550,000 in the Private Placement. The
Agreements provide for the issuance by Relocate 411.com, Inc. of 5,115,000
shares of Common Stock and 5,115,000 Warrants for $1,550,000. The Warrants are
exercisable for $.75 per share until January 26, 2003.
In July, 2000, Relocate 411.com, Inc. issued to Barbara R. Mittman, 60,000
shares of Common Stock for legal services.
If Relocate 411.com, Inc. seeks to sell shares of its Common Stock to
prospective investors for 240 days after the effective date of a registration
statement covering the Securities, Relocate 411.com, Inc. must give the
Subscribers (i) prior written notice of such sale and (ii) an opportunity to
purchase an amount of Common Stock to maintain their respective proportionate
interests in Relocate 411.com, Inc. The Right of First Refusal must be on the
same terms and conditions offered to the prospective investors.
Although we have no present intention to do so, we may, in the future,
enter into other transactions and agreements relating to our business with our
directors, officers, principal stockholders and other affiliates. Relocate
411.com, Inc. intends for all such transactions and agreements to be on terms no
less favorable to Relocate 411.com, Inc. than those obtainable from unaffiliated
third parties on an arm's-length basis. In addition, the approval of a majority
of Relocate 411.com, Inc.'s disinterested directors will be required for any
such transactions or agreements.
Contemporaneously with the closing of the subscriptions, we entered into a
Plan and Agreement of Merger with Relocate 411.com, Inc., a New York
corporation. We acquired all of the issued and outstanding stock of Relocate in
exchange for 6,600,000 shares of the 12,615,000 shares issued and outstanding of
Stateside Fundings, Inc. Stateside Fundings, Inc. acquired all of the assets and
liabilities of Relocate.
Under the terms of the Merger Agreement, each share of Relocate common
stock converted into one hundred thousand (100,000) shares of Stateside common
stock representing approximately 54.32% of the shares outstanding upon
completion of the Merger.
On January 27, 2000, we (the surviving entity) filed a Certificate of
Amendment to our Articles of Incorporation changing our name to Relocate
411.com, Inc.
On the effective date of the Merger, Nachum Blumenfrucht, the sole officer
and director of Stateside resigned from the Board of Directors and a new Board
of Directors was appointed. The new Board of Directors consists of Darrell
Lerner, President, Chief Executive Officer, and
30
<PAGE>
Treasurer, and Byron R. Lerner, Vice-President and Secretary.
As of the effective date of the Merger, we had an aggregate of 12,615,000
shares issued and outstanding. As a result of the Merger, our largest
shareholders are Darrell Lerner, our President, Chief Executive Officer, and
Treasurer, Byron R. Lerner, our Vice-President and Secretary, and Barry Manko,
our Vice-President of Business Development, each owning 17.44% of the issued and
outstanding common stock.
The Merger was approved by the Board of Directors of Stateside and Relocate
and by written consent of all of the shareholders of Stateside and Relocate
entitled to vote. Stateside redeemed 4,100,000 shares of common stock from
Nachum Blumenfrucht, Stateside's sole officer, director and principal
shareholder for $150,000.
On May 25, 2000, Relocate loaned $1,117,602 to Teltran International Group,
Ltd. Teltran is a publicly held company presently trading on the NASD OTC
Bulletin Board, and some of its stockholders and officers own approximately 42%
of relocate. The loan matures November 25, 2000 with interest at 9-1/2% annually
and is secured by a promissory note. The note has been secured by 600,000 shares
each of common stock of Teltran and Antra Holdings Group, Inc. Antra is also a
publicly held company traded on the NASD OTC Bulletin Board. Teltran owns the
Antra shares which were acquired in April, 1999 when each company originally
exchanged 2,000,000 shares of their common stock. Additionally, Teltran pledged
its one share of Teltran Web Factory, Ltd., a wholly owned foreign subsidiary of
Teltran.
Teltran also issued to Relocate 250,000 warrants exercisable from May 25,
2000 to May 24, 2005 to purchase Teltran common stock at a price of $1.10 per
share.
PRINCIPAL AND SELLING SHAREHOLDERS
The following table sets forth, as of July 31, 2000, certain transactions
with respect to the beneficial ownership of Relocate 411.com, Inc.'s Common
Stock by:
(a) each person who beneficially owns more than five percent of Relocate
411.com, Inc.'s outstanding Common Stock;
(b) each director of Relocate 411.com, Inc.;
(c) each of the executive officers named in the Summary Compensation
Table;
(d) all directors and executive officers of Relocate 411.com, Inc. as a
group; and
(e) each Selling Shareholder.
31
<PAGE>
<TABLE>
<CAPTION>
===================================== ======================= ======================= ======================= ======================
Identity of Stockholder or Group Shares Beneficially Percent of Shares Shares Offered (2) Shares Beneficially
Owned (Before the Outstanding (Before Owned (After the
Offering) the Offering)(1) Offering) (3)
------------------------------------- ----------------------- ----------------------- ----------------------- ----------------------
<S> <C> <C> <C> <C>
Darrell Lerner 2,200,000 -0- -0-
------------------------------------- ----------------------- ----------------------- ----------------------- ----------------------
Byron R. Lerner 2,200,000 -0- -0-
------------------------------------- ----------------------- ----------------------- ----------------------- ----------------------
Barry Manko 2,200,000 -0- -0-
------------------------------------- ----------------------- ----------------------- ----------------------- ----------------------
Austost Anstalt Schaan 1,500,000 3,000,000 -0-
------------------------------------- ----------------------- ----------------------- ----------------------- ----------------------
Balmore Funds, S.A. 1,500,000 3,000,000 -0-
------------------------------------- ----------------------- ----------------------- ----------------------- ----------------------
Amro International, S.A. 791,250 1,582,5000 -0-
------------------------------------- ----------------------- ----------------------- ----------------------- ----------------------
ICT N.V. 150,000 300,000 -0-
------------------------------------- ----------------------- ----------------------- ----------------------- ----------------------
Leval Trading, Inc. 450,000 900,000 -0-
------------------------------------- ----------------------- ----------------------- ----------------------- ----------------------
Nesher, Ltd. 150,000 300,000 -0-
------------------------------------- ----------------------- ----------------------- ----------------------- ----------------------
Talbiya B. Investments Ltd. 166,500 333,000 -0-
------------------------------------- ----------------------- ----------------------- ----------------------- ----------------------
Libra Finance S.A. 198,000 396,000 -0-
------------------------------------- ----------------------- ----------------------- ----------------------- ----------------------
J. Hayut 139,500 279,000 -0-
------------------------------------- ----------------------- ----------------------- ----------------------- ----------------------
Hyett Capital Ltd. 69,750 139,500 -0-
------------------------------------- ----------------------- ----------------------- ----------------------- ----------------------
James Tubbs 900,000 900,000 -0-
------------------------------------- ----------------------- ----------------------- ----------------------- ----------------------
Barbara R. Mittman 60,000 60,000 -0-
------------------------------------- ----------------------- ----------------------- ----------------------- ----------------------
All Officer and Directors as a 6,600,000 -0- -0-
Group (3 persons)
===================================== ======================= ======================= ======================= ======================
</TABLE>
-------------------------------------------
(1) Represents those shares of Common Stock held by the current shareholders,
together with those shares that such shareholders have the right to acquire
within 60 days from the date of this Prospectus.
(2) Assumes all of the Shares being offered will be sold.
32
<PAGE>
(3) Because the Selling Shareholders may sell all, some or none of the Shares
that he, she or it holds, and because the offering contemplated by this
Prospectus is not now a "firm commitment" underwritten offering, the actual
number of Shares that will be held by the Selling Shareholders upon or prior to
termination of this offering may vary. See "Plan of Distribution."
Relationship of Selling Shareholders with Relocate 411.com, Inc.
None of the Selling Shareholders currently has, or within the past three
years has had, any position, office, or other material relationship with
Relocate 411.com, Inc. or any predecessor or affiliate of Relocate 411.com, Inc.
There can be no assurance that any of the Selling Shareholders will offer
for sale any or all of the Common Stock offered by them pursuant to this
Prospectus.
PLAN OF DISTRIBUTION
The Shares covered by this Prospectus may be offered and sold from time to
time by the Selling Shareholders. The Selling Shareholders will act
independently of Relocate 411.com, Inc. in making decisions with respect to the
timing, manner and size of each sale. The Selling Shareholders may sell the
Shares offered hereby in the over-the-counter market, on the Nasdaq National
Market, in privately negotiated transactions, or by a combination of such
methods of sale, at market prices prevailing at the time of sale, at prices
related to such prevailing market prices or at negotiated market prices, only if
the securities are trading on over-the-counter market or on the NASDAQ National
Market. The Shares may be sold by one or more of the following means of
distribution:
(a) a block trade in which the broker-dealer so engaged will attempt to
sell Shares as agent, but may position and resell a portion of the block as
principal to facilitate the transaction;
(b) purchases by a broker-dealer as principal and resale by such
broker-dealer for its own account pursuant to this Prospectus;
(c) an over-the-counter distribution in accordance with the rules of the
Nasdaq National Market;
(d) ordinary brokerage transactions and transactions in which the broker
solicits purchasers; and
(e) in privately negotiated transactions.
In connection with distributions of the Shares or otherwise, the Selling
Shareholders may enter into hedging transactions with broker-dealers or other
financial institutions. In connection with such transactions, broker-dealers or
other financial institutions may engage in short sales of the Shares in the
course of hedging the positions they assume with Selling Shareholders. The
33
<PAGE>
Selling Shareholders may also sell the Shares short and redeliver the Shares to
close out such short positions. The Selling Shareholders may also enter into
option or other transactions with broker-dealers or other financial institutions
which require the delivery to such broker-dealer or other financial institution
of Shares offered hereby, which Shares such broker-dealer or other financial
institution may resell pursuant to this Prospectus. The Selling Shareholders may
also pledge Shares to a broker-dealer or other financial institution, and, upon
a default, such broker-dealer or other financial institution may effect sales of
the pledged Shares pursuant to this Prospectus. In addition, any Shares that
qualify for sale pursuant to Rule 144 may be sold under Rule 144 rather than
pursuant to this Prospectus.
In effecting sales, brokers, dealers or agents engaged by the Selling
Shareholders may arrange for other brokers or dealers to participate. Such
broker-dealers or agents may receive compensation in the form of discounts,
concessions or commissions from the Selling Shareholders and/or the purchasers
of the Shares for whom they act as agent or to whom they sell Shares as
principal or both which compensation to a particular broker-dealer might be in
excess of customary commissions. Under certain circumstances, the Selling
Shareholders and any broker-dealers or agents that participate in the
distribution of the Shares may be deemed to be "underwriters" within the meaning
of Section 2(11) of the Securities, and any profit on the sale of the Shares by
them and any commissions, discounts or concessions received by any such
broker-dealers or agents may be deemed to be underwriting commissions or
discounts under the Securities Act.
Relocate 411.com, Inc. has agreed to bear certain expenses in connection
with the registration of the Shares being offered by the Selling Shareholders.
In addition, Relocate 411.com, Inc. has agreed to indemnify certain of the
Selling Shareholders against certain liabilities, including liabilities arising
under the Securities Act, or to contribute to payments they may be required to
make in respect thereof.
To comply with the securities laws of certain jurisdictions, if applicable,
the Shares must be offered or sold in such jurisdictions only through registered
or licensed brokers or dealers. In addition, in certain jurisdictions the Shares
may not be offered or sold unless they have been registered or qualified for
sale in such jurisdiction or an exemption from the registration or qualification
requirement is available and is complied with.
Relocate 411.com, Inc. has advised the Selling Shareholders that the
anti-manipulation rules under the Exchange Act may apply to their sales of
Shares in the market and to the activities of the Selling Shareholders and their
affiliates. Relocate 411.com, Inc. has also informed the Selling Shareholders of
the need for delivery of a copy of this Prospectus to purchasers at or prior to
the time of any sale of the Shares offered hereby, and Relocate 411.com, Inc.
will make copies of this Prospectus available to the Selling Shareholders for
such purpose. The Selling Shareholders may indemnify any broker-dealer that
participates in transactions involving the sale of the Shares against certain
liabilities, including liabilities arising under the Securities Act.
34
<PAGE>
There can be no assurance that the Selling Shareholders will sell all or
any of the Shares offered hereunder. Relocate 411.com, Inc. has agreed with
certain of the Selling Shareholders to use its best efforts to maintain the
effectiveness of the Registration Statement of which this Prospectus is a part
for a period of not less than two years following the effective date of the
registration statement. No sales may be made pursuant to this Prospectus after
such date unless Relocate 411.com, Inc. amends or supplements this Prospectus to
indicate that it has agreed to extend such period of effectiveness.
DESCRIPTION OF CAPITAL STOCK
Common Stock
As of July 31, 2000, there were 12,675,000 shares of Common Stock
outstanding and held of record by approximately 15 stockholders.
Holders of Common Stock are entitled to one vote for each share owned on
all matters submitted to stockholders to vote on. Holder of a majority of the
shares of Common Stock are able to elect all of the directors. Holders of Common
Stock are entitled to receive a proportionate amount of the dividends declared
by the Board of Directors out of funds legally available therefor, subject to
any preferential dividend rights of outstanding preferred stock. Upon the
liquidation, dissolution or winding up of Relocate 411.com, Inc., the holders of
Common Stock are entitled to receive a proportionate share of the net assets of
Relocate 411.com, Inc. available after the payment of all debts and other
liabilities and subject to the prior rights of any outstanding preferred stock.
Holders of the Common Stock have no preemptive, subscription, redemption or
conversion rights. The outstanding shares of Common Stock are fully paid and
nonassessable. The rights, preferences and privileges of holders of Common Stock
are subject to, and may be adversely affected by, the rights of the holders of
shares of any series of preferred stock which Relocate 411.com, Inc. may
designate and issue in the future. There are no shares of preferred stock
outstanding.
Registration Rights
Certain securityholders of Relocate 411.com, Inc. are entitled to require
Relocate 411.com, Inc. to register under the Securities Act of 1933, as amended,
up to a total of approximately 10,230,000 shares of Common Stock including
5,115,000 shares of Common Stock issuable upon the exercise of Warrants pursuant
to the terms of the Agreements. The Agreements provide that in the event
Relocate 411.com, Inc. proposes to register any of its securities under the
Securities Act at any time or times, the securityholders, subject to certain
exceptions, shall be entitled to include Registrable Shares in such
registration. In addition, certain securityholders have additional rights,
subject to certain conditions and limitations, to require Relocate 411.com, Inc.
to prepare and file a registration statement under the Securities Act with
respect to their Registrable Shares. Relocate 411.com, Inc. is generally
required to bear the expenses of all such registrations.
35
<PAGE>
Warrants
Each Warrant issued pursuant to the Agreements entitles the holder thereof
to purchase one share of Common Stock. The Warrants are exercisable at a price
of $.75 per share until January 26, 2003. The Warrants are not redeemable by us.
The exercise price and number of shares of Common Stock issuable on
exercise of the Warrants are subject to adjustment to prevent dilution, in
certain circumstances, including in the event of a stock dividend,
recapitalization, reorganization, merger or consolidation of Relocate 411.com,
Inc. Reference is made to the Warrant which has been filed as an exhibit to this
Registration Statement for a complete description of the terms and conditions
therein the description herein contained herein qualified in its entirety by
reference thereto. The Warrant Holders do not have the right or privileges of
holders of Common Stock.
Shares Eligible For Future Sale
Presently, Relocate 411.com, Inc. will have outstanding 12,675,000 shares
of Common Stock, not including 5,115,000 of Common Stock issuable upon exercise
of the Warrants, all of which including the Shares being registered hereby are
"restricted securities" as defined under Rule 144, substantially all of which
are available for sale in the public market, subject to the provisions of Rule
144 under the Securities Act, or pursuant to this Registration Statement. In
addition, certain holders of the Restricted Shares are entitled to certain
registration rights. See "--Registration Rights."
In general, under Rule 144 as currently in effect, a person or persons
whose shares are aggregated, including an Affiliate, who has beneficially owned
Restricted Shares for at least one year is entitled to sell, within any
three-month period, a number of such shares that does not exceed the greater of:
(i) one percent of the outstanding shares of Common Stock; or
(ii) the average weekly trading volume in the Common Stock during the four
calendar weeks preceding the date on which notice of such sale is filed with the
Securities and Exchange Commission.
Sales under Rule 144 are also subject to certain manner of sale provisions and
notice requirements and to the availability of current public information about
Relocate 411.com, Inc. In addition, a person who is not an Affiliate and has not
been an Affiliate for at least three months prior to the sale and who has
beneficially owned Restricted Shares for at least two years may resell such
shares without regard to the requirements described above. Relocate 411.com,
Inc. is unable to estimate the number of Restricted Shares that ultimately will
be sold under Rule 144 because the number of shares will depend in part on the
market price for the Common Stock, the personal circumstances of the sellers and
other factors. See "Risk Factors--Shares Eligible for Future Sale" and "Risk
Factors--Possible Volatility of Stock Price."
36
<PAGE>
Transfer Agent and Registrar
The transfer agent and registrar for the Common Stock is Olde Monmouth
Stock Transfer & Trust Company, 77 Memorial Parkway, Suite 101, Atlantic
Highlands, New Jersey 07716.
LEGAL MATTERS
The validity of the shares of Common Stock offered hereby will be passed
upon for Relocate 411.com, Inc. by Grushko & Mittman, P.C., 551 Fifth Avenue,
Suite 1601, New York, New York 10176.
EXPERTS
The audited balance sheet of Relocate 411.com, Inc. as of May 31, 2000,
unaudited balance sheet as of July 31, 2000, and the related statement of
operations for the period ended July 31, 2000 included in this Prospectus and
Registration Statement to the extent indicated in their report, have been
prepared by Liebman Goldberg & Drogin LLP, independent certified public
accountants, and are included herein in reliance upon the authority of said firm
as experts in giving said report.
AVAILABLE INFORMATION
Relocate 411.com, Inc. has filed with the Commission a registration
statement on Form SB-2 together with all amendments and exhibits thereto, under
the Securities Act, with respect to the Common Stock offered hereby. This
Prospectus does not contain all of the information set forth in the Registration
Statement, certain parts of which have been omitted in accordance with the rules
and regulations of the Commission. Statements contained in this Prospectus as to
the contents of any contract or other document referred to are not necessarily
complete and, in each instance, reference is made to the copy of such contract
or other document filed as an exhibit, each such statement being qualified in
all respects by such reference. For further information with respect to Relocate
411.com, Inc. and the Common Stock offered hereby, reference is made to the
Registration Statement and the exhibits and schedules thereto. Copies of the
Registration Statement and the exhibits and schedules thereto may be inspected,
without charge, at the offices of the Commission, or obtained at prescribed
rates from the Public Reference Section of the Commission at 450 Fifth Street,
N.W., Washington, D.C. 20549. Relocate 411.com, Inc. is also required to file
electronic versions of these documents with the Commission through the
Commission's Electronic Data Gathering, Analysis and Retrieval System ("EDGAR").
The Commission maintains a World Wide Web site (http://www.sec.gov) that
contains reports, proxy and information statements and other information
regarding registrants that file electronically with the Commission.
37
<PAGE>
Index to Financial Statements
Page
----
For the period from December 19, 1997 (date of inception)
To May 31, 2000
Independent Auditors' Report F-1
Balance Sheet F-2
Statement of Operations F-3
Statement of Stockholders' Equity F-4
Statements of Cash Flows F-5
Notes to Financial Statements F6-F10
For the Eight Months Ended July 31, 2000
Balance Sheet F-11
Statement of Operations F-12
Statement of Cash Flows F-13
Notes to Financial Statements F-14
<PAGE>
[LETTERHEAD OF LIEBMAN GOLDBERG & DROGAN LLP]
The Board of Directors and Stockholders
Relocate 411.Com, Inc.
(A Development Stage Company)
We have audited the accompanying balance sheet of Relocate 411.Com, Inc. (A
Development Stage Company) as of May 31, 2000, and the related statements of
operations, stockholders' equity and cash flows for the six months then ended
and the period from December 19, 1997 (date of inception) to May 31, 2000. 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 generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides 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 Relocate 411.Com, Inc. (A
Development Stage Company) as of May 31, 2000 and the results of its operations
and cash flows for the six month period then ended and from December 19, 1997
(date of inception) to May 31, 2000 in conformity with generally accepted
accounting principles.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. The Company is in its development
stage and is not generating cash from operations. As discussed in Note 7, it is
necessary for the Company to meet its financing requirements on a continuing
basis and to succeed in its future operations. These matters raise substantial
doubt about the Company's ability to continue as a going concern. Management's
plans in regard to these matters are also described in Note 7. The financial
statements do not include any adjustments that might result from the outcome of
this uncertainty.
/s/ LIEBMAN GOLDBERG & DROGAN LLP
Garden City, New York
July 12, 2000
F-1
<PAGE>
RELOCATE 411.COM, INC
FORMERLY KNOWN AS STATESIDE FUNDINGS, INC.
(A Development Stage Company)
BALANCE SHEET
May 31, 2000
ASSETS
Current Assets:
Cash and cash equivalents $ 1,216,238
Note receivable 1,117,602
Other current assets 4,084
-----------
Total current assets 2,337,924
-----------
Fixed Assets:
Computers and equipment 11,465
Less: accumulated depreciation 1,771
-----------
9,694
-----------
Other Assets:
Organization expense - net of amortization 280
-----------
Total other assets 280
-----------
Total assets $ 2,347,898
===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Bank loan payable $ 1,117,602
Accounts payable, accrued expenses and taxes 11,624
Corporation taxes payable 625
-----------
Total current liabilities 1,129,851
-----------
Stockholders' Equity:
Preferred stock, $.0001 par value per share, 10,000,000
shares authorized and -0- issued and outstanding --
Common stock, $.0001 par value per share, 50,000,000
shares authorized and 12,675,000 shares issued and
outstanding 1,268
Additional paid in capital in excess of par value 1,355,555
Deficit accumulated during the development stage (138,776)
-----------
Total stockholders' equity 1,218,047
-----------
Total liabilities and stockholders' equity $ 2,347,898
===========
See notes to financial statements.
F-2
<PAGE>
RELOCATE 411.COM, INC
FORMERLY KNOWN AS STATESIDE FUNDINGS, INC.
(A Development Stage Company)
STATEMENTS OF OPERATIONS
December 19,
Six Months 1997
Ended (inception) to
May 31, May 31,
2000 2000
------------ ------------
Expenses:
Salaries 105,479 105,479
Professional fees 12,183 13,228
Rent 10,000 10,000
Office 8,998 8,998
Payroll taxes 7,078 7,078
Automobile expenses 704 704
Contributions 100 100
Insurance 6,382 6,382
Miscellaneous 3,930 4,188
Outside services 924 924
Telephone 429 429
Travel and entertainment 1,055 1,055
Depreciation and amortization 1,811 1,811
------------ ------------
Total expenses 159,073 160,376
------------ ------------
(Loss) during development stage (159,073) (160,376)
------------ ------------
Other income (expense):
Interest income 23,970 23,970
(Interest expense) (1,745) (1,745)
------------ ------------
Total other income 22,225 22,225
------------ ------------
(Loss) before income taxes (136,848) (138,151)
Income tax expense 625 625
------------ ------------
Net (loss) $ (137,473) $ (138,776)
============ ============
See notes to financial statements.
F-3
<PAGE>
RELOCATE 411.COM, INC
FORMERLY KNOWN AS STATESIDE FUNDINGS, INC.
(A Development Stage Company)
STATEMENT OF STOCKHOLDERS' EQUITY
For the six months ended May 31, 2000
<TABLE>
<CAPTION>
Deficit
Accumulated
Common Stock Capital During
-------------------------------- in Excess Development
Shares Amount Par Value Stage
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
Balance - December 1, 1998 5,000,000 $ 500 $ 2,073 $ --
Net (loss) for the year (1,303)
-------------- -------------- -------------- --------------
Balance - December 1, 1999 5,000,000 500 2,073 (1,303)
Issuance of shares - private
placement 5,175,000 518 1,503,732
Relocate 411.Com, Inc.
pre-merger shares 66 250
Redemption of original shares (4,100,000) (150,000)
Conversion in merger to (250)
6,600,000 shares 6,599,934
Net (loss) for the period (137,473)
-------------- -------------- -------------- --------------
Balance - May 31, 2000 12,675,000 $ 1,268 $ 1,355,555 $ (138,776)
============== ============== ============== ==============
</TABLE>
See notes to financial statements.
F-4
<PAGE>
RELOCATE 411.COM, INC
FORMERLY KNOWN AS STATESIDE FUNDINGS, INC.
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
December 19,
Six Months 1997
Ended (inception) to
May 31, May 31,
2000 2000
-------------- --------------
<S> <C> <C>
Cash Flows from Operating Activities:
Net loss $ (137,473) $ (138,776)
Adjustment to reconcile net (loss) to net cash
(used in) operating activities:
Depreciation and Amortization expense 1,811 1,891
(Increase) in interest receivable (2,884) (2,884)
Increase in accounts payable and accrued expenses 11,849 11,849
-------------- --------------
Net cash (used in) operating activities (126,697) (127,920)
-------------- --------------
Cash Flows from Investing Activities:
Purchase of fixed assets (11,465) (11,465)
-------------- --------------
Net cash (used in) investing activities (11,465) (11,465)
-------------- --------------
Cash Flows from Financing Activities:
Cash received from issuance of common stock 1,504,250 1,504,250
Additional paid in capital contributed by a former officer 2,000
Redemption of original shareholder (150,000) (150,000)
Write off of deferred offering costs (927)
(Increase) in loan receivable (1,121,686) (1,121,686)
Proceeds from loan payable 1,117,602 1,117,602
-------------- --------------
Net cash provided by financing activities 1,350,166 1,351,239
-------------- --------------
Net increase in cash 1,212,004 1,211,854
Cash - December 1, 1,350 1,500
-------------- --------------
Cash - May 31, $ 1,213,354 $ 1,213,354
============== ==============
Supplemental Disclosures:
Non cash issuance of 6,600,000 common shares of
stock @ $.0001 par value per merger agreement $ -- $ --
============== ==============
Income tax $ 625 $ --
============== ==============
Interest paid $ -- $ --
============== ==============
</TABLE>
See notes to financial statements.
F-5
<PAGE>
RELOCATE 411.COM, INC.
FORMERLY KNOWN AS STATESIDE FUNDINGS, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
May 31, 2000
Note 1 - Organization and Description of Business:
Relocate 411.Com, Inc., formerly known as Stateside Fundings, Inc.,
was organized under the laws of the State of Delaware on December 19,
1997 and has adopted a fiscal year ending November 30th. The Company
is considered a development stage company since it is devoting
substantially all of its efforts to establishing a new business. Its
planned principal operations have not yet commenced and there have
been no revenues to date. The Company is developing a web site to be
utilized in various real estate services such as relocation, listings
of real estate sales or rentals, mortgage information and other real
estate related information or content.
On January 26, 2000, the stockholders of Relocate 411.Com, Inc., a New
York Corporation completed a merger and stock exchange with Stateside
Fundings, Inc., a Delaware Corporation. Contemporaneously, with the
merger, Stateside issued 5,175,000 shares of its common stock in a
private placement transaction, receiving net proceeds of $1,354,250.
The net proceeds received were after a payment of $150,000 to redeem
4,100,000 shares of common stock from the founder of Stateside. As
part of the merger, Stateside then issued 6,600,000 common shares to
Relocate 411.Com, Inc. in exchange for the 66 shares held by the
stockholders of Relocate.
On January 27, 2000, Stateside (the surviving entity) filed a
Certificate of Amendment changing their name to Relocate 411.Com, Inc.
Note 2 - Summary of Significant Accounting Policies:
Development Stage Activities and Operations:
All costs incurred in development activities are charged to operations
as incurred. The Company has not produced any revenues from
operations.
Use of Estimates:
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the
date of the financial statements and the reported amounts of revenues
and expenses during the reporting period. Actual results could differ
from those amounts.
F-6
<PAGE>
RELOCATE 411.COM, INC.
FORMERLY KNOWN AS STATESIDE FUNDINGS, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
May 31, 2000
Note 2 - Summary of Significant Accounting Policies (Continued):
Fair Value of Financial Instruments:
SFAS No. 107, "Disclosures About Fair Value of Financial Instruments",
requires disclosure of the fair value information, whether or not
recognized in the balance sheet, where it is practicable to estimate
that value. The carrying value of cash, cash equivalents, accounts
receivable and notes payable approximates fair value.
Impairment of Long-Lived Assets:
The Company has not completed its evaluation of the adoption of SFAS
121, "Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to be Disposed of." However, management believes any
such effect will not be material.
Fixed Assets:
Property and equipment are stated at cost, less accumulated
depreciation. Depreciation is computed on a straight-line basis over
the estimated useful lives of the related assets, which range from
five to ten years. Depreciation expense for the six months ended May
31, 2000 is $ 1,811.
Loss Per Common Share:
The Company is authorized to issue 50,000,000 common shares with a par
value of $.0001, and 10,000,000 preferred shares with a par value of
$.0001.
The Company has adopted Financial Accounting Standards Board (FASB)
Statement No. 128, "Earnings per Share". The Statement establishes
standards for computing and presenting earnings per share (EPS). It
replaced the presentation of primary EPS with a presentation of basic
EPS and also requires dual presentation of basic and diluted EPS on
the face of the income statement. The statement was retroactively
applied to the prior loss per share but did not have any effect.
Basic loss per share was computed by dividing the Company's net loss
by the weighted average number of common shares outstanding during the
period. There is no presentation of diluted loss per share as the
effect of common stock options, warrants and convertible debt amount
are antidilutive. The weighted average number of common shares used to
calculate loss per common share during the six months ended May 31,
2000 was
F-7
<PAGE>
RELOCATE 411.COM, INC.
FORMERLY KNOWN AS STATESIDE FUNDINGS, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
May 31, 2000
Note 2 - Summary of Significant Accounting Policies (Continued):
Income Taxes:
At May 31, 2000, the Company had approximately $139,000 of net
operating loss carryforwards. The Company's deferred tax asset at May
31, 2000 relating to net operating loss carryforwards was
approximately $61,000. A valuation allowance for this asset has been
recorded. Accordingly, no tax benefit is reflected in the statements
of operations.
Concentration of Credit Risk:
Financial instruments that potentially subject the Company to
significant concentrations of credit risk consist primarily of cash
and cash equivalents and a loan receivable. The Company's investment
policy is to invest in low risk, highly liquid investments. However,
it presently maintains cash balances that exceed federally insured
limits. The Company has not experienced any losses in such account and
does not believe it is exposed to any significant credit risk in its
cash investment. Additionally, a significant portion of its assets
represent a note receivable from a Company that has some common
ownership. See Note 4 for a discussion regarding the note receivable
and its collateralization.
Organization Costs:
Expenses incurred in connection with the formation of the Company have
been capitalized and are being amortized over a period of five years
on the straight-line method. The asset is shown net of amortization.
Note 3 - Cash and Cash Equivalents:
Cash includes a jumbo certificate of deposit in the amount of
$1,117,602, which earns interest at the rate of 6.2% per annum. The
Certificate of deposit has a maturity date of August 24, 2000.
The Certificate of Deposit was used as collateral to borrow the same
amount, which was then loaned to a Company with some common ownership.
F-8
<PAGE>
RELOCATE 411.COM, INC.
FORMERLY KNOWN AS STATESIDE FUNDINGS, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
May 31, 2000
Note 4 - Note Receivable:
On May 25, 2000, the Company loaned $1,117,602 to Teltran
International Group, Ltd. Teltran is a publicly held company presently
trading on the NASD OTC Bullentin Board, and some of its stockholders
and officers own approximately 42% of Relocate. The loan matures
November 25, 2000 with interest at 9 1/2% annually and is secured by a
promissory note. The note has been secured by 600,000 shares each of
common stock of Teltran and Antra Holdings Group, Inc. Antra is also a
publicly held company traded on the NASD OTC Bullentin Board. Teltran
owns the Antra shares which were acquired in April, 1999 when each
company originally exchanged 2,000,000 shares of their common stock.
Additionally, Teltran pledged its one share of Teltran Web Factory,
Ltd. a wholly owned foreign subsidiary of Teltran.
Teltran also issued 250,000 warrants exercisable from May 25, 2000 to
May 24, 2005 to purchase Teltran common stock at a price of $1.10 per
share.
Note 5 - Bank Loan Payable:
The bank loan consists of a short term loan due to Chase Manhattan
Bank and is due August 25, 2000. Interest is payable at 9.5% per
annum. The loan is collateralized by a jumbo CD. Reference is made to
Notes 3 and 4.
Note 6 - Commitments and Contingencies:
The Company subleases office space, from a Company that has some
common shareholders/officers expiring December 31, 2000. The sublease
agreement renews automatically each year but there is no guarantee or
requirement that the lease be renewed. Rent expense for the six months
ended May 31, 2000 amounted to $10,000. The annual rental commitments
for the year ended November 30 are as follows:
2004 $ 12,000
2004 24,000
2004 24,000
2004 24,000
2004 through 2011 170,000
--------
$254,000
========
F-9
<PAGE>
RELOCATE 411.COM, INC.
FORMERLY KNOWN AS STATESIDE FUNDINGS, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
May 31, 2000
Note 7 - Going Concern:
The accompanying financial statements have been prepared assuming that
the Company will continue as a going concern. As a development stage
company, the Company has no revenue from operations and limited
financing. The Company's continued existence is dependent upon its
ability to meet its financing requirements on a continuing basis, and
to succeed in its future operations. The financial statements do not
include any adjustments that might result from this uncertainty.
Management is in the process of finalizing the development of its
websites and other operating plans.
Note 8 - Stock Option Plan:
In January, 2000, the Board of Directors adopted a stock option plan
whereby the Company is authorized to issue up to 5,100,000 incentive
stock options and non-qualified stock options to purchase common stock
to be granted to employees, consultants to the Company and board of
directors of the Company who provide services to the Company. To date,
no options have been granted. The future exercise price is 110% of the
fair market value on the date of grant.
F-10
<PAGE>
RELOCATE 411.COM, INC
FORMERLY KNOWN AS STATESIDE FUNDINGS, INC.
(A Development Stage Company)
BALANCE SHEET
July 31, 2000
ASSETS
(UNAUDITED)
Current Assets:
Cash and cash equivalents $ 1,153,185
Interest receivable 12,688
Loan receivable 1,137,042
Loan receivable - employee 400
-----------
Total current assets 2,303,315
-----------
Fixed Assets:
Machinery and equipment 11,465
Less: accumulated depreciation (2,341)
-----------
9,124
-----------
Other Assets:
Organization expense - net of amortization 267
-----------
Total other assets 267
-----------
Total assets $ 2,312,706
===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Bank loan payable $ 1,117,602
Accounts payable, accrued expenses and taxes 35,319
Corporation taxes payable 625
-----------
Total current liabilities 1,153,546
-----------
Stockholders' Equity:
Preferred stock, $.0001 par value per share, 10,000,000
shares authorized and -0- issued and outstanding --
Common stock, $.0001 par value per share, 50,000,000
shares authorized and 12,675,000 shares issued and
outstanding 1,268
Additional paid in capital in excess of par value 1,355,555
Deficit accumulated during the development stage (197,663)
-----------
Total stockholders' equity 1,159,160
-----------
Total liabilities and stockholders' equity $ 2,312,706
===========
See notes to financial statements.
F-11
<PAGE>
RELOCATE 411.COM, INC
FORMERLY KNOWN AS STATESIDE FUNDINGS, INC.
(A Development Stage Company)
(UNAUDITED)
STATEMENTS OF OPERATIONS
December 19,
Eight Months 1997
Ended (inception) to
July 31, July 31,
2000 2000
------------- -------------
Expenses:
Amortization expense $ 53 $ 133
Automobile expenses 704 704
Contributions 100 100
Depreciaiton 2,340 2,340
Insurance 6,901 6,901
Travel and entertainment 5,562 5,562
Miscellaneous 1,105 1,286
Office 8,969 8,969
Outside services 924 924
Payroll taxes 9,387 9,387
Postage 29 29
Professional fees 44,988 46,031
Rent 14,000 14,000
Salaries 134,179 134,179
Telephone 540 540
------------- -------------
Total expenses 229,781 231,085
------------- -------------
(Loss) during development stage (229,781) (231,085)
------------- -------------
Other income (expense):
Interest income 53,487 53,487
(Interest expense) (19,440) (19,440)
------------- -------------
Total other income (expense) 34,047 34,047
------------- -------------
(Loss) before provision for income taxes (195,734) (197,038)
Provision for income taxes 625 625
------------- -------------
Net (loss) $ (196,359) $ (197,663)
============= =============
Net (loss) per common share based upon
10,186,885 (weighted average) shares $ (0.01) $ (0.01)
============= =============
See notes to financial statements.
F-12
<PAGE>
RELOCATE 411.COM, INC
FORMERLY KNOWN AS STATESIDE FUNDINGS, INC.
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
December 19,
Eight Months 1997
Ended (inception) to
July 31, July 31,
2000 2000
------------ ------------
<S> <C> <C>
Cash Flows from Operating Activities:
Net loss $ (196,359) $ (197,663)
Adjustment to reconcile net (loss) to net cash
(used in) operating activities:
Depreciation and Amortization expense 2,393 2,474
(Increase) in interest receivable (12,688) (12,688)
Increase in accounts payable and accrued expenses 35,544 35,544
------------ ------------
Net cash (used in) operating activities (171,110) (172,333)
------------ ------------
Cash Flows from Investing Activities:
Purchase of fixed assets (11,465) (11,465)
------------ ------------
Net cash (used in) investing activities (11,465) (11,465)
------------ ------------
Cash Flows from Financing Activities:
Cash received from issuance of common stock 1,504,250 1,504,250
Additional paid in capital contributed by a former officer -- 2,000
Redemption of original shareholder (150,000) (150,000)
Write off of deferred offering costs -- (927)
(Increase) in loan receivable (1,137,442) (1,137,442)
Proceeds from loan payable 1,117,602 1,117,602
------------ ------------
Net cash provided by financing activities 1,334,410 1,335,483
------------ ------------
Net increase in cash 1,151,835 1,151,685
Cash - December 1, 1,350 1,500
------------ ------------
Cash - July 31, $ 1,153,185 $ 1,153,185
============ ============
Supplemental Disclosures:
Income tax $ 625 $ 625
============ ============
Interest paid $ 19,440 $ 19,440
============ ============
</TABLE>
See notes to financial statements.
F-13
<PAGE>
RELOCATE 411.COM, INC.
FORMERLY KNOWN AS STATESIDE FUNDINGS, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
July 31, 2000
Note 1 - Basis of Presentation:
The accompanying unaudited condensed financial statements have been
prepared in accordance with generally accepted accounting principles
for interim financial information and with the instructions to Form
10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not
include all the information and footnotes required by generally
accepted accounting principles for complete financial statements. In
the opinion of Management, all adjustments considered necessary for a
fair presentation have been included. These adjustments were
considered usual and normal in nature. For the period ended July 31,
2000, the Company had no operational activities other than the
preparation of the information that will appear on the website and the
development of that website. For further information, refer to the
financial statements and footnotes included in the Company's
registration statement on Form 10-SB.
Note 2 - Note Receivable:
On May 25, 2000. the Company loaned $1,117,602 to Teltran
International Group, Ltd. Teltran is a publicly held company presently
trading on the NASD OTC Pink Sheets, and some of its stockholders and
officers own approximately 42% of Relocate. The loan matures November
25, 2000 with interest at 9 1/2% annually and is secured by a
promissory note. The note has been secured by 600,000 shares each of
common stock of Teltran and Antra Holdings Group, Inc. Antra is also a
publicly held company traded on the NASD OTC Pink Sheets. Teltran owns
the Antra shares which were acquired in April 1999 when each company
originally exchanged 2,000,000 shares of their common stock.
Additionally, Teltran pledged its one share of Teltran Web Factory,
Ltd. a wholly owned foreign subsidiary of Teltran.
Teltran also issued 250,000 warrants exercisable from May 25, 2000 to
May 24, 2005 to purchase Teltran commons tock at a price of $1.10 per
share.
Note 3 - Bank Loan Payable:
The bank loan consists of a short term loan due to Chase Manhattan
Bank and is due August 25, 2000. Interest is payable at 9.5% per
annum. The loan is collateralized by a jumbo CD.
F-14
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 24. Other Expenses of Issuance and Distribution.
Relocate 411.com, Inc. estimates that expenses payable by it in connection
with the offering described in this registration statement (other than
underwriting discounts and commissions) will be as follows:
Securities and Exchange Commission registration fee ........... $2,700.72
Blue Sky fees and expenses (including legal and filing fees) .. $
Printing Expenses (other than stock certificates).............. $
Legal fees and expenses ....................................... $
Accounting fees and expenses .................................. $
Miscellaneous expenses ........................................ $
Total ................................................ $
(1) All amounts except the Securities and Exchange Commission registration fee
are estimated.
Relocate 411.com, Inc. will pay all expenses of registration of the shares
being sold by the Selling Shareholders, excluding fees and expenses of counsel,
if any, to the Selling Shareholders, any commissions, discounts or concessions,
and transfer or other taxes, which shall be borne by the Selling Shareholders.
Item 25. Indemnification of Directors and Officers
Articles VII of Relocate 411.com, Inc.'s Articles of Incorporation provides
that Relocate 411.com, Inc. may, to the fullest extent permitted by Section 721
through 726 of the Business Corporation Law of New York, indemnify any and all
directors and officers whom it shall have power to indemnify under the said
sections from and against any and all of the expenses, liabilities or other
matters referred to in or covered by such sections, and the indemnification
provided for herein shall not be deemed exclusive of any other rights to which
the persons so indemnified may be entitled under any By-Law, agreement, vote of
shareholders or disinterested directors or otherwise, both as to action in his
or her official capacity and as to action in another capacity by holding such
office, and shall continue as to a person who has ceased to be a director or
officer and shall inure to the benefits of the heirs, executors and
administrators of such a person.
A director of Relocate 411.com, Inc. shall not be personally liable to
Relocate 411.com, Inc. or its shareholders for damages for any breach of duty in
his or her capacity as a director, unless a judgment or other final adjudication
adverse to him or her establishes that (x) his or her acts or omissions were in
bad faith or involved intentional misconduct or a knowing violation of law, or
(y) he or she personally gained in fact a financial or other advantage to which
he or she was not legally entitled or (z) his or her acts violated Section 719
of the Business Corporation Law.
<PAGE>
Articles VII of Relocate 411.com, Inc.'s Articles of Incorporation provides
that a director or officer of Relocate 411.com, Inc. shall not, in the absence
of fraud, be disqualified from his or her office by dealing with or contracting
with the Company as vendor, purchaser or otherwise. In the absence of fraud, no
transaction, contract or act of Relocate 411.com, Inc., the Board of Directors,
the Executive Committee of the Board of Directors, or any other duly constituted
committee, shall be void, voidable or affected by reason of the fact that any
director or officer of Relocate 411.com, Inc., or any firm of which any director
or officer of Relocate 411.com, Inc. is a member, or any corporation of which
any director or officer of Relocate 411.com, Inc. is an officer, director, or
shareholder, is in any way interested in the transaction, contract or act, if
either: (i) the fact of such common directorship, officership, or financial or
other interest is disclosed or known to the Board of Directors or the Executive
Committee, and the Board of Directors or the Executive Committee approves the
transaction, contract or act by a vote sufficient for such purposes without the
vote of such interested director, if any; provided that any such director may be
counted in determining the presence of a quorum at any such meeting of the Board
of Directors or the Executive Committee; or (ii) the fact of such common
directorship, officership or financial or other interest is disclosed or known
to the shareholders entitled to vote on the transaction, contract or act and the
transaction, contract or act is approved by vote of the shareholders entitled to
vote thereon, whether or not the Board of Directors or the Executive Committee
has approved the transaction, contract or act. Any such transaction, contract or
act which is ratified by a majority in interest of a quorum of the shareholders
of Relocate 411.com, Inc. having voting power at any annual or special meeting
called for such purpose, shall, if such common ownership or financial or other
interest is disclosed in the notice of the meeting, be valid and as binding as
though approved or ratified by every shareholder of Relocate 411.com, Inc.,
except as otherwise provided by the laws of the State of New York.
Item 26. Recent Sales of Unregistered Securities
In January, 2000, Relocate 411.com, Inc. issued (i) 5,115,000 shares of
Common Stock to 10 "accredited investors" and (ii) 5,115,000 Warrants to
purchase 5,115,000 shares of Common Stock at an exercise price of $.75 per share
(the "Private Placement").
In issuing such securities, Relocate 411.com, Inc. relied on the exemption
provided by Rule 506 of Regulation D promulgated under the Securities Act.
Item 27. Exhibits
Exhibit
Number Description of Exhibit
------ ----------------------
3.3 Bylaws
4.1* Specimen Certificate of Relocate 411.com, Inc.'s Common Stock
4.2 Form of Warrant
4.3 2000 Employees and Consultants Stock Option Plan
5.1 Opinion of Grushko & Mittman as to the legality of the securities
being registered
<PAGE>
10.1 Employment Agreement between Relocate 411.com, Inc. and Darrell
Lerner effective as of January, 2000
10.2 Employment Agreement between Relocate 411.com, Inc. and Byron R.
Lerner effective as of January, 2000
10.3 Employment Agreement between Relocate 411.com, Inc. and Barry Manko
effective as of January, 2000
10.4 Loan and Securities Purchase Agreement between Relocate 411.com,
Inc. and Teltran International Group, Ltd.
10.5 Secured Note made by Teltran International Group, Ltd. to Relocate
411.com, Inc.
10.6 Stock Pledge Agreement between Relocate 411.com, Inc. and Teltran
International Group, Ltd.
10.7 Charge Over Share Agreement between Relocate 411.com, Inc. and
Teltran International Group, Ltd.
23.1 Consent of Liebman Goldberg & Drogin, LLP, Independent Certified
Public Accountants
23.2 Consent of Grushko & Mittman (included in Exhibit 5.1)
27.1 Financial Date Schedule
----------
* To be filed by amendment
Item 28. Undertakings
(a) The undersigned registrant hereby undertakes:
(1) to file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
<PAGE>
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement.
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the registration
statement or any material change to such information in the
registration statement.
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if
the registration statement is on Form S-3, Form S-8 or Form F-3, and the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the Registrant
pursuant to Section 13 or Section 15(d) of the Securities Exchange Act that
are incorporated by reference in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(b) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 (the "Act") may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or otherwise,
the Registrant has been advised that in the opinion of the 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 the Registrant of expenses
incurred or paid by a director, officer or controlling person of the Registrant
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, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
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.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this SB-2 Registration Statement to be signed on its behalf by
the undersigned, thereunto duly authorized, in the City of New York, State of
New York, on September 21, 2000.
RELOCATE 411.COM, INC.
By: /s/ Darrell Lerner
--------------------------------
Darrell Lerner
President and Director
POWER OF ATTORNEY
Pursuant to the requirements of the Securities Act of 1933, this SB-2
Registration Statement has been signed by the following persons in the
capacities and on the date indicated.
/s/ Darrell Lerner 9/21/00
------------------------------- --------------- President and Director
DARRELL LERNER Date
/s/ Byron R. Lerner 9/21/00
------------------------------- --------------- Vice-President
BYRON R. LERNER Date and Director
<PAGE>
INDEX TO EXHIBITS
Exhibit
Number Description of Exhibit
------ ----------------------
3.3 Bylaws
4.1* Specimen Certificate of Relocate 411.com, Inc.'s Common Stock
4.2 Form of Warrant
4.3 2000 Employees and Consultants Stock Option Plan
5.1 Opinion of Grushko & Mittman as to the legality of the securities
being registered
10.1 Employment Agreement between Relocate 411.com, Inc. and Darrell
Lerner effective as of January, 2000
10.2 Employment Agreement between Relocate 411.com, Inc. and Byron R.
Lerner effective as of January, 2000
10.3 Employment Agreement between Relocate 411.com, Inc. and Barry Manko
effective as of January, 2000
10.4 Loan and Securities Purchase Agreement between Relocate 411.com,
Inc. and Teltran International Group, Ltd.
10.5 Secured Note made by Teltran International Group, Ltd. to Relocate
411.com, Inc.
10.6 Stock Pledge Agreement between Relocate 411.com, Inc. and Teltran
International Group, Ltd.
10.7 Charge Over Share Agreement between Relocate 411.com, Inc. and
Teltran International Group, Ltd.
23.1 Consent of Liebman Goldberg & Drogin, LLP, Independent Certified
Public Accountants
23.2 Consent of Grushko & Mittman (included in Exhibit 5.1)
27.1 Financial Date Schedule
----------
* To be filed by amendment
