As filed with the Securities and Exchange Commission on May ___, 2000.
Registration No. 333-_______
------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
------------------
FORM SB-2
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
BE SAFE SERVICES, INC.
--------------------------------------------
(Name of small business issuer in its charter)
------------------
Delaware 7382 11-3479172
- ------------------------- ------------------ ----------
(State of Incorporation) (Primary SIC Code) (IRS Employer
ID Number)
62-45 Woodhaven Boulevard
Rego Park, NY 11374
(718) 651-5400
------------------------------------------------------------
(Address and telephone number of principal executive offices)
Jordan Erber, President
Be Safe Services, Inc.
62-45 Woodhaven Boulevard
Rego Park, NY 11374
(718) 651-5400
------------------------------------------
(Name, address and telephone number of agent for service)
Copies to:
Joel C. Schneider, Esq.
Sommer & Schneider LLP
595 Stewart Avenue, Suite 710
Garden City, NY 11530
(516) 228-8181
Approximate date of commencement of proposed sale to public: As soon
after the effective date of the Registration Statement as is practicable.
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 of 1933, check the following box: [X]
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act of 1933, 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 this form is a post-effective amendment filed pursuant to Rule
462(d) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering: [ ]
<PAGE>
If delivery of the prospectus is expected to be made pursuant to Rule
434, check the following box: [ ]
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 the 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.
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CALCULATION OF REGISTRATION FEE
Proposed
Title of Each Maximum Proposed
Class Amount Offering Maximum Amount of
Securities to to be Per Aggregate Registration
be Registered Registered Share(1) Price (1) Fee
- ------------- ---------- -------- --------- ---------
Common Stock,
$.0001 par value (2) 4,525,000 $1.00 $4,525,000 $1,194.60
- --------- ---------
Total $1,194.60
- --------- =========
(1) Estimated solely for the purposes of calculating the registration fee.
(2) To be offered by Selling Shareholders.
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 STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
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BE SAFE SERVICES, INC.
CROSS REFERENCE SHEET
Caption in
Item of Form SB-2 and Caption Prospectus
- ----------------------------- ----------
Part I - Information Required in Prospectus
1. Front of Registration Statement Front of Registration Statement;
and Outside Front Cover of Outside Front Cover Page
Prospectus
2. Inside Front and Outside Back Inside Front and Outside Back Cover
Cover Pages of Prospectus
3. Summary Information and Risk Summary; Risk Factors
Factors
4. Use of Proceeds Use of Proceeds
5. Determination of Offering Price Cover Page; Plan of Distribution
6. Dilution N/A
7. Selling Security Holders Selling Shareholders; Certain
Transactions
8. Plan of Distribution Cover Page; Selling Shareholders
9. Legal Proceedings N/A
10. Directors, Executive Officers, Management
Promoters and Control Persons
11. Security Ownership of Certain Principal Shareholders
Beneficial Owners and Management
12. Description of Securities Description of Securities
13. Interest of Names Experts and Experts; Legal Matters
Counsel
14. Disclosure of Commission Liabilities
position on Indemnification for
Securities Act
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15. Organization within Last Five Summary Business; Certain
Years Transactions
16. Description of Business Business
17. Management's Discussion and Management's Discussion and Analysis
Analysis or Plan of Operation of Results of Operations and
Financial Condition
18. Description of Property Business - Property
19. Certain Relationships and Certain Transactions
Related Transactions
20. Market for Common Equity and Cover Page; Risk Factors
Related Stockholder Matters
21. Executive Compensation Management
22. Financial Statements Financial Statements
23. Changes In and Disagreements Change in Accountants
With Accountants on Accounting
and Financial Disclosure
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SUBJECT TO COMPLETION, DATED MAY ___, 2000
PROSPECTUS
4,525,000 Shares
----------
BE SAFE SERVICES, INC.
Common Stock, $.0001 par value
This Prospectus relates to the offer and sale of up to 4,525,000 shares
of the common stock, $.0001 par value (the "Common Stock") of Be Safe Services,
Inc., a Delaware corporation (the "Company") by certain shareholders (the
"Selling Shareholders"). We will not receive proceeds from any sale of Common
Stock by the Selling Shareholders. We are paying all of the expenses of
registering the shares under the Securities Act of 1933, as amended, estimated
to be approximately $30,000 for filing, printing, legal, accounting and
miscellaneous expenses.
Our Common Stock does not presently trade on any exchange or electronic
medium. We intend to apply to have our Common Stock listed on the OTC Bulletin
Board once this Prospectus is effective.
THIS OFFERING INVOLVES A HIGH DEGREE OF RISK. SEE "RISK FACTORS".
----------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
This offering is not being underwritten. The shares of Common Stock
will be offered and sold by the Selling Shareholders and/or their registered
representatives from time to time during the next nine months from the date of
this Prospectus at prices to be determined at the time of such sales. As a
result of such activities, Selling Shareholders may be deemed "underwriters" as
that term is defined and utilized in the federal securities laws. There is no
minimum required purchase and there is no arrangement to have funds received by
such Selling Shareholders and/or their registered representatives placed in an
escrow, trust or similar account or arrangement. See "Selling Shareholders -
Plan of Distribution."
The sale of securities by Selling Shareholders when made, will be made
through customary brokerage channels either through broker-dealers acting as
agents or brokers for the sellers, or through broker-dealers acting as
principals who may then resell the shares in the over-the-counter market or
otherwise, or by private sales in the over-the-counter market or otherwise, at
negotiated prices related to the prevailing market prices at the time of the
sales, or by a combination of such methods of offering. Thus the period of
distribution of such securities may occur over an extended period of time. The
Selling Shareholders will pay or assume brokerage commissions or discounts
incurred in the sale of their securities, which commissions or discounts will
not be paid or assumed by the Company.
The Date of this Prospectus is May ___, 2000
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AVAILABLE INFORMATION
We are subject to the reporting requirements of the Securities Exchange
Act of 1934 by virtue of the fact that on June 2, 1999 we filed a Registration
Statement on Form 10-SB, together with all amendments and exhibits, with the
Commission. Our Form 10-SB became effective on August 2, 1999. This Prospectus,
together with all attached amendments and exhibits, is filed under the
Securities Act of 1933 with respect to the shares of common stock offered.
A copy of our filings with the Commission may be inspected by anyone
without charge at the public reference facilities maintained by the Commission
in Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549, and at the
regional offices of the Commission located at Seven World Trade Center, 13th
Floor, New York, New York 10048 and Citicorp Center, 500 West Madison Street,
Suite 1400, Chicago, Illinois 60661. Copies of all or any part of our filings
may be obtained from the Public Reference Section of the Commission at 450 Fifth
Street, N.W., Washington, D.C. 20549 and its public reference facilities in New
York, New York and Chicago, Illinois, upon the payment of the fees prescribed by
the Commission. Our filings are also available through the Commission's Web site
at the following address: http://www.sec.gov.
TABLE OF CONTENTS
PART 1 Page
INFORMATION REQUIRED IN PROSPECTUS
PROSPECTUS SUMMARY 8
CAUTIONARY STATEMENTS 9
RISK FACTORS 10
USE OF PROCEEDS 13
DETERMINATION OF OFFERING PRICE 13
SELLING SHAREHOLDERS 14
PLAN OF DISTRIBUTION 15
LEGAL PROCEEDINGS 15
DIRECTORS AND EXECUTIVE OFFICERS 16
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT 16
DESCRIPTION OF SECURITIES 18
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Page
LEGAL MATTERS AND EXPERTS 18
DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION
FOR SECURITIES ACT LIABILITIES 19
ORGANIZATION WITHIN LAST FIVE YEARS 19
DESCRIPTION OF BUSINESS 19
MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION 25
DESCRIPTION OF PROPERTY 27
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS 27
MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS 27
EXECUTIVE COMPENSATION 28
FINANCIAL STATEMENTS 28
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE 29
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
INDEMNIFICATION OF DIRECTORS AND OFFICERS 29
OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION 30
RECENT SALES OF UNREGISTERED SECURITIES 30
EXHIBITS 31
UNDERTAKINGS 31
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PART I
PROSPECTUS SUMMARY
The Company
Be Safe Services, Inc., which we sometimes refer to here as the Company
was organized in the State of Delaware on March 16, 1999. The Company, on a
limited basis, distributes, installs and services alarm, surveillance systems,
closed circuit televisions and intercom equipment. We also provide prospective
customers with enhanced services that include:
- extended service protection;
- patrol and alarm response;
- two-way voice communication;
- pager service;
- medical information service;
- cellular back-up; and
- mobile security service.
The Offering
Of the 4,525,000 shares being offering in this Prospectus, an aggregate
of 1,078,000 shares are owned by our founders and current board of directors,
Jordan Erber, our President and Chairman (778,000), Kathleen LaVeglia, our
Secretary and director (290,000) and Robert Dehmer, a director (10,000). Each of
these persons paid $.0001 per share. On March 26, 1999 we sold 3,432,000 shares
to 25 investors at $.0001 per share. These shares are also being offered in this
Prospectus. As part of this distribution 478,000 shares were sold to Harriet
Zahner, 300,000 shares to Randi Hagler, 300,000 shares to David Zahner, 615,000
shares to LNE Trading Corp., 300,000 shares to Lottie Smolar, 430,000 shares to
Elizabeth Rosenfeld and 435,000 shares to Beverly Pomerantz. Each of these
shareholders own in excess of 5% of the shares of the Company, otherwise none of
them are affiliates of the Company nor are they related to any of our officers
or directors. On April 6, 1999 we sold 15,000 shares to three investors for
$1.00 per share. These shares are being offered in this Prospectus.
Summary Financial Information
The summary financial information set forth below is derived from and
should be read in conjunction with the consolidated financial statements,
including the notes thereto, appearing elsewhere in this Prospectus. The
information set forth below should also be read in conjunction with
"Management's Discussion and Analysis of Operations." Results of operations for
the periods presented are not necessarily indicative of results of operations
for future periods.
Statements of Operations Data
For the Period For the Three
March 26 (Inception) Months Ended
through December 31, 1999 March 31, 2000
------------------------- --------------
Net Revenue $ 14,730 $ 8,030
General and Administrative Expenses 3,139 1,390
Income before Officers' Compensation 11,729 6,675
Net Income before income taxes 7,229 5,175
Income Taxes 2,415 1,372
Net Income 4,814 3,803
Balance Sheet Data
December 31, 1999 March 31, 2000
----------------- --------------
Working Capital $ 9,071 $ 11,400
Current Assets 28,382 30,953
Total Assets 38,291 40,367
Current Liabilities 19,311 19,553
Total Liabilities 19,311 19,553
Stockholders' Equity 18,980 20,814
Common shares outstanding 4,535,000 4,535,000
CAUTIONARY STATEMENT
All statements, trends, analyses and other information contained in
this Prospectus relative to trends in net sales, gross margin, anticipated
expense levels and liquidity and capital resources, as well as other statements,
including, but not limited to, words such as "anticipate," "believe," "predict,"
"plan," "intend," "expect," and other similar expressions constitute
forward-looking statements. These statements are not guarantees of future
performance and are subject to risks and uncertainties that are difficult to
predict. Potential risks and uncertainties include those set forth below in
"Risk Factors." Particular attention should be paid to the cautionary statements
involving our limited operating history, the unpredictability of our future
revenues, the unpredictable and evolving nature of its business model, the
intensely competitive online commerce industry and the risks associated with
capacity constraints, systems development, management of growth and business
expansion, as well as other factors described below.
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RISK FACTORS
An investment in our Common Stock involves risks. You should carefully
consider the risks described below and the other information in this Prospectus
before you decide to buy our common stock. You should also consider the
additional information set forth in our SEC report Form 10-KSB. See "Additional
Information." The trading price of our Common Stock could decline due to any of
these.
Risks Related to Our Business
We have a limited operating history of less than two years, making it difficult
to evaluate our future prospects.
We were incorporated in March 1999 to distribute, install and service
alarm and surveillance systems. We only have approximately $22,000 of sales to
date. Our extremely limited operating history makes it nearly impossible for an
investor to evaluate our business and prospects. Our potential for future
profitability must be considered in light of the risks, uncertainties, expenses
and difficulties frequently encountered by companies in their infancy stages of
development. We may not successfully address any of these risks. If we do not
successfully address these risks, our business will be seriously harmed.
Our quarterly financial results are subject to fluctuations which may make it
difficult to forecast our future performance.
We expect our revenue and operating results to vary significantly from
quarter to quarter making it difficult to formulate meaningful comparisons of
our results between quarters. Our very limited operating history and new and
unproven business model further contribute to the difficulty of making
meaningful comparisons. Factors that may affect our quarterly results include
those discussed throughout this "Risk Factors" section.
We need to obtain significant additional financing to roll out our business
In order for us to operate on a full scale basis, we need to raise
significant additional financing or otherwise obtain substantial working capital
through the next year. If we do not raise the necessary financing we will be
forced to terminate operations. We intend to raise funds for the expansion of
our business and possible business acquisitions. There can be no assurance as to
our ability to raise additional funds and there can be no assurances that we
will be able to continue as an ongoing concern.
We are dependent or certain key personnel
Our success depends to a significant degree upon the continued
contribution of our President and Chairman, Jordan Erber. Our operations could
be affected adversely if, for any reason, Mr. Erber cease to be active in our
management. We do not have key person life insurance on Mr. Erber. Should Mr.
Erber cease to be affiliated with the Company it could have
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<PAGE>
a material adverse effect on our business and prospects. In order for our
business to expand, we will need to hire, train and assimilate new qualified
sales representatives and installers. Our inability to retain and attract key
employees could have a material adverse effect on our business, operating
results and financial condition.
We have significant competition
There are many competitors marketing products similar to those being
marketed by us. Many of these companies have significantly greater financial
resources and marketing expertise that ours. Some of our larger competitors are
Slomins and ADT. Smaller entities are also significant competitors, particularly
through collaborative arrangements with larger companies. There is no assurance
that we can compete with any of these entities. There is no assurance that a
competitor will not introduce new products to the market, which would be in
direct competition to the products we market. Additionally, competitors may
introduce products which may cost less than those we offer.
We currently do not have insurance
The nature of the services we provide potentially exposes us to greater
risks of liability for employee acts or omissions, or system failure, than may
be inherent in other businesses. While all of our alarm monitoring agreements
and other agreements, pursuant to which we intend to sell our products and
services contain provisions limiting liability to customers in an attempt to
reduce the risk, we believe we will have liability as a result of any losses
incurred by a customer that relates to the proper installation of faulty alarm
equipment. While we believe that ultimate responsibility for faulty equipment is
with the manufacturer, there is no assurance that we will not also have
liability.
We intend on obtaining $1,000,000 in liability insurance, however,
there can be no assurance that such insurance would cover the amount of a
potential product liability damage award. Any award exceeding coverage limits
would have to be paid directly from our assets and operating revenues, which
could have a material adverse impact on our business. Should the award be large
enough, it could cause us to file for bankruptcy protection.
We have no public market
there is no public market for our common stock and there is no
assurance that such a market will ever develop or, if developed, that it will
continue. Therefore, you may have difficulty selling our common stock.
We have not had our common stock cleared to trade on the Over-The-Counter
Bulletin Board
A market maker has filed a Form 211 with NASD to have our common stock
quoted on the OTC-Bulletin Board. To date, the NASD has not cleared or common
stock to be quoted on the OTC-Bulletin Board and there is no assurance that our
common stock will ever be quoted on the OTC-Bulletin Board.
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Possible Limitations upon Trading Activities; Restrictions Imposed upon
Broker-Dealers Effecting Transactions in Certain Securities
While the Company has entered into discussions with various
broker-dealers regarding such broker-dealers taking the necessary action to make
a market in the Company's securities upon the effectiveness of this
registration, there can be no assurance that such activity will commence or that
it will be successful. Trading of the Company's securities is subject to
material limitations as a consequence of recently adopted amendments to the
Securities Exchange Act of 1934 which limit the activities of broker-dealers
effecting transactions in "designated securities" and "penny stocks".
Rule 15c2-6 promulgated under the Securities Exchange Act of 1934
restricts the solicitation or sales of "designated securities" by
brokers-dealers to persons other than established customers and accredited
investors (generally institutions with assets in excess of $5,000,000 or
individuals with net worth in excess of $1,000,000 or annual income exceeding
$200,000 or $300,000 jointly with their spouse). Pursuant to Rule 15c2-6, prior
to any sale of a "designated security", the broker-dealer must have first
received a written statement from the purchaser of the securities setting forth
certain personal information concerning the person's financial situation,
investment experience and investment objectives. Thereafter, the broker-dealer
must reasonably determine, based upon the information provided, that the
purchase is suitable for the person and that the person has sufficient knowledge
and experience in financial matters that the person reasonably may be expected
to be capable of evaluating the risks of transactions in "designated
securities."
"Designated securities" are defined as any equity securities other than
a security that is registered on a national exchange; included for quotation in
the NASDAQ system; or whose issuer has net tangible assets in excess of
$2,000,000. Securities are exempt from Rule 15c2-6 if the market price is at
least $5.00.
Since the Company's securities do not presently qualify for inclusion
in the NASDAQ system and for so long as the Company has net tangible assets of
$2,000,000 or less, or the market price of its securities are $5.00 or less, the
Company's securities will be subject to Rule 15c2-6. As a consequence,
brokers-dealers may find it more difficult to effectuate sales or trading
activities in the Company's securities. Thus, sales of securities in this
offering and trading of the Company's securities thereafter will be more
difficult than in the case of securities not defined as "designated securities".
This may have the effect of reducing the volume of trading which takes place
after the offering, thus possibly depressing the market for such securities, and
an investor may find it difficult to dispose of such securities.
Rules 15g-2 through 15g-6 promulgated under the Securities Exchange Act
of 1934 provide a series of additional rules requiring brokers-dealers engaging
in transactions in low-priced over-the-counter securities defined as "penny
stock" to first provide to their customers a series of disclosures and
documents, including: (i) a standardized risk disclosure document identifying
the risks inherent in investing in "Penny stocks"; (ii) all compensation
received by
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the broker-dealer in connection with the transaction; (iii) current quotation
prices and other relevant market data; and (iv) monthly account statements
reflecting the fair market value of the securities. The rule requiring provision
of a risk disclosure document became effective on July 15, 1992. The other
aspects of the rules became effective on January 1, 1993.
"Penny stock" are defined at Rule 3a51-1 in generally the same manner
as "designated securities" except the net tangible asset test is only satisfied
if the issuer has net tangible assets of more than $2,000,000 and has been in
continuous operation for greater than three (3) years. Issuers who have been in
operation less than three (3) years must have net tangible assets of at least
$5,000,000.
The Company's securities presently, and will likely for the foreseeable
future, constitute "penny stocks". Thus, trading activities for the Company's
securities will be made more difficult for broker-dealers than in the case of
securities not defined as "penny-stocks". This may have the result of depressing
the market for the Company's securities and an investor may find it difficult to
dispose of such securities.
USE OF PROCEEDS
We will not realize any proceeds from the sale of the shares by the
Selling Shareholders.
DETERMINATION OF OFFERING PRICE
All securities to be registered pursuant to this Prospectus will be
sold by the Selling Shareholders. See "Selling Shareholders." The Shares may be
offered and sold from time to time by any Selling Shareholder. Each Selling
Shareholder will act independently of us in making decisions with respect to
price or in negotiated transactions.
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<TABLE>
<CAPTION>
SELLING SHAREHOLDERS
Beneficial Ownership Beneficial Ownership
Prior to Offering After Offering
------------------------ Shares --------------------
Name of Selling Shareholder Shares Percentage Offered Shares Percentage
- --------------------------- ------ ---------- ------- ------ ----------
- --------------------------------------------- --------- -------------- ----------------- ----------------- -----------
<S> <C> <C> <C> <C> <C>
Jordan Erber(1) 778,000 17.15% 778,000 0 0%
- --------------------------------------------- --------- -------------- ----------------- ----------------- -----------
Kathleen LaVeglia(2) 290,000 6.39% 290,000 0 0%
- --------------------------------------------- --------- -------------- ----------------- ----------------- -----------
Robert Dehmer(3) 10,000 0.22% 10,000 0 0%
- --------------------------------------------- --------- -------------- ----------------- ----------------- -----------
Betsey Chutter 10,100 0.22% 10,000 100 *
- --------------------------------------------- --------- -------------- ----------------- ----------------- -----------
Catherine DiCaprio 10,000 0.22% 10,000 0 0%
- --------------------------------------------- --------- -------------- ----------------- ----------------- -----------
Clifton Erber 25,000 0.55% 25,000 0 0%
- --------------------------------------------- --------- -------------- ----------------- ----------------- -----------
Daniel Erber 25,100 0.55% 25,000 100 *
- --------------------------------------------- --------- -------------- ----------------- ----------------- -----------
Joan Erber 5,100 0.11% 5,000 100 *
- --------------------------------------------- --------- -------------- ----------------- ----------------- -----------
Michael Erber 25,100 0.55% 25,000 100 *
- --------------------------------------------- --------- -------------- ----------------- ----------------- -----------
Nealy Erber 25,100 0.55% 25,000 100 *
- --------------------------------------------- --------- -------------- ----------------- ----------------- -----------
Robin Erber 25,000 0.55% 25,000 0 0%
- --------------------------------------------- --------- -------------- ----------------- ----------------- -----------
Simon Erber & Alice Erber Jtwros(4) 10,000 0.22% 10,000 0 0%
- --------------------------------------------- --------- -------------- ----------------- ----------------- -----------
EZ Trading 15,000 0.33% 15,000 0 0%
- --------------------------------------------- --------- -------------- ----------------- ----------------- -----------
Sidney Gettenberg 10,000 0.22% 10,000 0 0%
- --------------------------------------------- --------- -------------- ----------------- ----------------- -----------
Randi Hagler 300,000 6.62% 300,000 0 0%
- --------------------------------------------- --------- -------------- ----------------- ----------------- -----------
Daniel Kaszovitz 4,000 * 4,000 0 0%
- --------------------------------------------- --------- -------------- ----------------- ----------------- -----------
David Kaszovita 4,000 * 4,000 0 0%
- --------------------------------------------- --------- -------------- ----------------- ----------------- -----------
Gabriel Kaszovitz 4,000 * 4,000 0 0%
- --------------------------------------------- --------- -------------- ----------------- ----------------- -----------
Jonah Kaszovitz 4,000 * 4,000 0 0%
- --------------------------------------------- --------- -------------- ----------------- ----------------- -----------
Saul Kaszovitz 4,000 * 4,000 0 0%
- --------------------------------------------- --------- -------------- ----------------- ----------------- -----------
Martin Kofman 10,000 0.22% 10,000 0 0%
- --------------------------------------------- --------- -------------- ----------------- ----------------- -----------
Miriam Lieber 50,100 1.10% 50,000 100 *
- --------------------------------------------- --------- -------------- ----------------- ----------------- -----------
LNE Trading Corp. 615,000 13.56% 615,000 0 0%
- --------------------------------------------- --------- -------------- ----------------- ----------------- -----------
Rabbi Ralph Pelcovitz 3,000 * 3,000 0 0%
- --------------------------------------------- --------- -------------- ----------------- ----------------- -----------
Beverly Pomerantz 435,000 9.59% 435,000 0 0%
- --------------------------------------------- --------- -------------- ----------------- ----------------- -----------
Rozann Pomerantz 218,000 4.81% 218,000 0 0%
- --------------------------------------------- --------- -------------- ----------------- ----------------- -----------
Elizabeth Rosenfeld 430,000 9.48% 430,000 0 0%
- --------------------------------------------- --------- -------------- ----------------- ----------------- -----------
Lottie Smolar 300,000 6.62% 300,000 0 0%
- --------------------------------------------- --------- -------------- ----------------- ----------------- -----------
Sommer & Schneider LLP 13,000 0.29% 13,000 0 0%
- --------------------------------------------- --------- -------------- ----------------- ----------------- -----------
Stuart Smolar 5,100 0.11% 5,000 100 *
- --------------------------------------------- --------- -------------- ----------------- ----------------- -----------
Rachel Weiner 50,100 1.10% 50,000 100 *
- --------------------------------------------- --------- -------------- ----------------- ----------------- -----------
Andrea Wellington 20,100 0.44% 20,000 100 *
- --------------------------------------------- --------- -------------- ----------------- ----------------- -----------
Saritt Wolkenstein 10,000 0.22% 10,000 0 0%
- --------------------------------------------- --------- -------------- ----------------- ----------------- -----------
David Zahner 300,000 6.62% 300,000 0 0%
- --------------------------------------------- --------- -------------- ----------------- ----------------- -----------
Harriet Zahner 478,000 10.54% 478,000 0 0%
- --------------------------------------------- --------- -------------- ----------------- ----------------- -----------
Stanley Zahner 5,000 0.11% 5,000 0 0%
- --------------------------------------------- --------- -------------- ----------------- ----------------- -----------
</TABLE>
* Less than 1%
(1) Jordan Erber is the Company's Chairman and President.
(2) Kathleen LaVeglia is the Company's Secretary and Director.
(3) Robert Dehmer is a Director of the Company.
(4) Does not include 100 shares owned by Simon Erber individually.
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PLAN OF DISTRIBUTION
All shares to be registered pursuant to this Prospectus will be sold by
the Selling Shareholders. See "Selling Shareholders." The shares may be offered
and sold from time-to-time by any Selling Shareholder. The Selling Shareholder
will act independently of us in making decisions with respect to the timing,
manner, and size of each sale. Such sale may be made on the Pink Sheets,
Over-the-Counter Bulletin Board, or otherwise, at prices and on terms then
prevailing or at prices related to the then market price, or in negotiated
transactions. In effecting sales, the Selling Shareholders may use the services
of broker-dealers. Such broker-dealers engaged by the Selling Shareholder may
arrange for other broker-dealers to participate.
Broker-dealers may receive commissions or discounts from the Selling
Shareholder in amounts to be negotiated.
In offering the shares, the Selling Shareholder and any broker-dealers
who execute sales for the Selling Shareholder may be deemed to be "underwriters"
within the meaning of the Securities Act in connection with such sales, and any
profits realized by the Selling Shareholder and the compensation of such
broker-dealer may be deemed to be underwriting discounts and commissions. We
have advised each Selling Shareholder that during the time they are engaged in
distribution of the securities covered by this Prospectus, they must comply with
Rule 10b-5 and Regulation M under the Exchange Act and pursuant thereto: (i)
each must not engage in any stabilization activity in connection with our
securities; (ii) each must furnish each broker through which securities covered
by this Prospectus may be offered the number of copies of this Prospectus which
are required by each broker; and (iii) each must not bid for or purchase any of
our securities or attempt to induce any person to purchase any of our securities
other than as permitted under the Exchange Act Release 34-38067 (December 20,
1996). The Selling Shareholders have been advised that they must coordinate
their sales under this Prospectus with each other and us for purposes of
Regulation M.
The Shares are being offered on a continuous basis pursuant to Rule 415
under the Securities Act of 1933, as amended. This offering will terminate on
the earlier of (a) the date on which such Selling Shareholder's shares may be
resold pursuant to Rule 144 under the Securities Act; or (b) the date on which
all shares offered have been sold by the Selling Shareholder. There can be no
assurance that the Selling Shareholder will sell any or all of the shares of
Common Stock offered.
LEGAL PROCEEDINGS
There is no litigation currently pending against us and we are not
aware of any disputes that may lead to litigation.
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DIRECTORS AND EXECUTIVE OFFICERS
This table describes our current directors and executive officers:
Name Age Title
---- --- -----
Jordan Erber 39 President, Treasurer and Chairman of
the Board
Kathleen LaVeglia 43 Secretary and Director
Robert Dehmer 26 Director
Jordan Erber - President & Chairman of the Board of Directors - Mr. Erber has
been the Company's President, Treasurer and Chairman of the Board since its
inception. Since 1983 Mr. Erber has been President of Around the Clock Locksmith
Inc. Mr. Erber has been a licensed locksmith since 1981 and he has a license
from the New York State Burglar & Fire organization. This license was issued to
Mr. Erber upon the completion of a 60 hour course in the installation, wiring
and diagnostics of alarm systems. This license is required in the State of New
York to install and service burglar and fire alarms.
Kathleen LaVeglia - Secretary & Director - Ms. LaVeglia has been Secretary and a
Director of the Company since its inception. Since 1992 Ms. LaVeglia has been a
teacher employed by the Board of Education, City of New York. Ms. LaVeglia had
been employed for eleven years as a Bookkeeper at Sieger & Smith Inc. Ms.
LaVeglia holds an Associates Degree from Queens Borough College in New York.
Robert Dehmer - Director - Mr. Dehmer has been a Director of the Company since
its inception. Since 1993 Mr. Dehmer has been an assistant teacher employed by
the Board of Education, City of New York. Mr. Dehmer is currently attending
Queensboro College in New York. Mr. Dehmer is a licensed real estate agent.
Our directors serve in their positions until the next annual meeting of
stockholders or until the director's successors have been elected and qualified.
Our executive officers are appointed by our Board of Directors and serve at the
discretion of the Board.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
This table describes the current ownership of our outstanding Common
Stock by (i) each of our officers and directors; (ii) each person who is known
by us to own more than 5% of the company's outstanding Common Stock; and (iii)
all of our officers and directors as a group:
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Amount and Nature
Name and Address of of Beneficial Percent of
Title of Class Beneficial Owner Owner Class
- -------------- ---------------- ----- -----
Common Stock Jordan Erber 778,000 17.16%
62-45 Woodhaven Blvd.
Rego Park, NY 11374
Common Stock Kathleen LaVeglia 290,000 6.39%
205-48 Brian Crescent
Bayside, NY 11360
Common Stock Robert Dehmer 10,000 .22%
171-31 21st Avenue
Whitestone, NY 11357
Common Stock Harriet Zahner 478,000 10.54%
571 Oak Drive
Far Rockaway, NY 11691
Common Stock Randi Hagler 300,000 6.62%
924 Northfield Road
Woodmere, NY 11598
Common Stock David Zahner 300,000 6.62%
848 Dickens Street
Woodmere, NY 11598
Common Stock LNE Trading Corp. (1) 615,000 13.56%
18 Weston Place
Lawrence, NY 11559
Common Stock Lottie Smolar 300,000 6.62%
63-04 108 Street, Apt. 3E
Forrest Hills, NY 11375
Common Stock Beverly Pomerantz 435,000 9.59%
28 Cedarhurst Avenue
Lawrence, NY 11559
Common Stock Elizabeth Rosenfeld 430,000 9.48%
330 Kenridge Road
Lawrence, NY 11559
All officers and Directors
as a group (3 persons) 1,078,000 23.77%
- -----------------
(1) Joan Erber is the sole shareholder of LNE Trading Corp.
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DESCRIPTION OF SECURITIES
Common Stock
We are authorized to issue 20,000,000 shares of Common Stock, $0.0001
par value per share, of which 4,535,000 shares were issued and outstanding. Each
outstanding share of Common Stock is entitled to one (1) vote, either in person
or by proxy, on all matters that may be voted upon the owners at meetings of the
stockholders.
The holders of our Common Stock (i) have equal ratable rights to
dividends from funds legally available therefor, when and if declared by the
Board of Directors of the Company; (ii) are entitled to share ratably in all of
the assets of the Company available for distribution to holders of Common Stock
upon liquidation, dissolution or winding up of the affairs of the Company; (iii)
do not have preemptive, subscription or conversion rights, or redemption or
sinking fund provisions applicable thereto; and (iv) are entitled to one
non-cumulative vote per share on all matters on which stockholders may vote at
all meetings of stockholders.
Holders of our Shares of Common Stock do not have cumulative voting
rights, which means that the individuals holding Common Stock with voting rights
to more than 50% of eligible votes, voting for the election of directors, can
elect all directors of the Company if they so choose and, in such event, the
holders of the remaining shares will not be able to elect any of the Company's
directors.
Transfer Agent
Our transfer agent is Executive Registrar & Transfer Agency, Inc., P.O.
Box 56517, Phoenix, AZ 85079.
LEGAL MATTERS
The validity of our Common Stock offered hereby will be passed upon for
us by Sommer & Schneider LLP, 595 Stewart Avenue, Suite 710, Garden City, NY
11530. The firm owns 13,000 shares of our Common Stock.
EXPERTS
Our financial statements as of December 31, 1999, included in this
Prospectus have been included in reliance upon the report of Weiss & Company,
independent certified public accountants, given on the authority of that Firm as
experts in auditing and accounting.
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DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION
FOR SECURITIES ACT LIABILITIES
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 small business issuer pursuant to the foregoing provisions, or
otherwise, the small business issuer has been advised 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.
ORGANIZATION WITHIN LAST FIVE YEARS
On March 26, 1999 we sold 3,432,000 shares at $.0001 per share to 25
persons. As part of this distribution, 478,000 shares were sold to Harriet
Zahner, 300,000 shares to Randi Hagler, 300,000 shares to David Zahner, 643,000
shares to LNE Trading Corp., 300,000 shares to Lottie Smolar, 430,000 shares to
Elizabeth Rosenfield and 435,000 shares to Beverly Pomerantz. Other than the
fact that each of the foregoing shareholders own in excess of 5% of the
Company's shares, non of them are affiliates of the Company, nor are they
related to any of the Company's officers or directors.
DESCRIPTION OF BUSINESS
HISTORY
Be Safe Services, Inc., which we sometimes refer to here as the Company
was organized in the State of Delaware on March 16, 1999. The Company, on a
limited basis, distributes, installs and services alarm, surveillance systems,
closed circuit televisions and intercom equipment. We also provide prospective
customers with enhanced services that include:
- extended service protection;
- patrol and alarm response;
- two-way voice communication;
- pager service;
- medical information service;
- cellular back-up; and
- mobile security service.
BUSINESS
Our principal activity is responding to the immediate security and
safety needs of our customers 24 hours a day. The Company expects that the
majority of its revenue will be generated from installing, maintaining and
monitoring alarm systems in our customers' homes and businesses.
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We provide our services to the residential (both single family and
multifamily residences), commercial and wholesale customers. We believe that the
residential customer is the most attractive segment of the alarm business
because of a lower percentage of residences currently having alarms versus
businesses and therefore this segment has the largest potential for growth and
higher gross margins.
In the New York metropolitan area a large percentage of the population
reside in multifamily dwellings. We intend to market our products and services
primarily to developers, building owners, cooperative boards and managers of
apartment complexes. We believe this targeted group is the most effective means
of generating sales in the multifamily dwelling market.
THE SECURITY ALARM INDUSTRY
The North American security industry is large, growing rapidly and
characterized by a lower percentage of residences having alarms versus
businesses. We believe that several favorable demographic trends, including the
aging population, two-income families, home officing, as well as a strong
economy and increased perception of crime have all contributed to an increased
demand for security alarms and related services.
OPERATIONS
Our operations consist principally of installing security alarms
systems, alarm monitoring and customer service functions.
Security alarm systems include many different types of devices
installed at customers' premises designed to detect or to react to various
occurrences or conditions, such as intrusion or the presence of fire or smoke.
In general, systems for multifamily and residential applications tend to be
smaller in size than those used by commercial customers, and also tend to
generate a lower level of alarm signals than in commercial applications. These
devices are connected to a computerized control panel that communicates through
the phone lines to a service center. In most systems, control panels can
identify the nature of the alarm and the areas within a building where the
sensor was activated, and can transmit that information to a central monitoring
station.
The basic system to be sold by us will include monitoring of the front
and back doors of a home, one keypad, an interior motion detection device, a
central processing unit with the ability to communicate signals to a central
monitoring station, a panic button, a siren, window decals and a yard sign. This
basic system often will be offered for little or no up-front price, but will be
sold to a customer with additional equipment customized to a customer's specific
needs. Such equipment add-ons include additional perimeter and interior
protection, fire protection devices (heat and smoke detectors), environmental
protection devices (freeze sensors and water detectors, additional panic buttons
and home automation devices (lighting or appliance controls). Our employees will
provide all services related to the installation of security alarm systems.
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Customer Contracts
Our alarm monitoring customer contracts will be entered into between
the Company and the customer and generally will have initial terms ranging from
one to five years in duration, and provide for automatic renewals for a fixed
period (typically one year) unless we or the customer elects to cancel the
contract at the end of its term.
Typically, the Company and the customers enter into alarm monitoring
contracts that include a bundled monthly charge for monitoring, extended service
protection and a rebate against the homeowners' insurance deductibles in the
event of a loss. All payments are made directly to the Company. In turn, the
Company will pay a monitoring company for monitoring a particular customer's
alarm system. The Company will retain approximately 65% of the customers annual
monitoring contract. This percentage differs depending upon the other service
items bundled in the contract. Extended service protection covers the normal
costs of repair of the security system after the expiration of the security
system's initial warranty period. A typical homeowners insurance policy carries
a deductible, usually between $100 and $1,000. Our proposed rebate program will
cover the customer for the deductible portion of their homeowner's insurance.
Although a customer may elect to sign an alarm monitoring contract that excludes
extended service protection, few customers choose to do so, and we believe the
bundling of monitoring and extended service protection provides additional value
to customers and allows us to provide more efficient field repair services.
We intend to contract with several independent companies to provide
central station monitoring for our customers. These centers operate 24 hours per
day, seven days a week, including all holidays. Each operator within a service
center monitors a computer screen that presents real-time information concerning
the nature of the alarm signal, the customer whose alarm has been activated, and
the premises on which such alarm is located. The Company does not intend on
becoming a monitoring company, therefore, the Company will be relying on
employees of the several independent monitoring companies the Company intends to
contract with. Each operator receives training that includes familiarization
with substantially every type of alarm system in our customer base. This enables
the operator to tell customers how to turn off their systems in the event of a
false alarm, thus reducing the instances in which a field service person must be
dispatched. All telephone conversations are automatically recorded. Other
non-emergency administrative signals are generated by low battery status,
deactivation and reactivation of the alarm monitoring system, and test signals,
and are processed automatically by computer.
Enhanced Services
As a means to increase revenues and to enhance customer satisfaction,
we will offer customers an array of enhanced security services, including
extended service protection and several different types of alarm verification.
These services position us as a full service provider and give dealers more
features to sell in their solicitation of new customers. Once we commence full
operations we intend to actively solicit our customers for interest in these
services. The following provides additional detail on enhanced services:
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- Extended Service Protection, which covers the normal costs of
repairing the system during normal business hours, after the
expiration of the initial warranty period. A typical security
system comes with an initial one(1) year warranty which covers
parts and labor. The extended service protection provides the
customer with a warranty beyond the initial warranty and it
typically costs $200 per year and provides for the repair or
replacement of all parts and equipment installed as part of the
security system, including window contacts, battery replacements
for wireless devices, and motion detectors. It also includes
normal maintenance on all wiring. The extended services protection
on multi-family dwellings is considerably more expensive ranging
on equipment used and size of installation.
- Two-Way Voice Communication (Remote Audio Verification), which
consists of the ability, in the event of an alarm activation, to
listen and to talk to persons at the monitored premises from the
service center through speakers and microphones located within the
premises. Among other things, such remote audio verification helps
us to determine whether an alarm activation is a false alarm.
- Supervised Monitoring Service, which allows the alarm system to
send various types of signals containing information on the use of
the system, such as which users armed or disarmed the system and
at what time of the day. This information is supplied to customers
for use in connection with the management of their households or
businesses. Supervised monitoring service can also include a daily
automatic test feature.
- Pager Service, which provides the customer with standard pager
services that also enables us to reach the customer in the event
of an alarm activation.
- Wireless Back-Up, which permits the alarm system to send signals
over a cellular telephone or dedicated radio system, in the event
that regular telephone service is interrupted.
- Alarm Response and Patrol Service, which provides customers in
selected markets with rapid, on-premises response to and
verification of alarms by armed officers.
- Medical Information Service, which provides a responder with our
customers' specific medical needs, as well as emergency contacts
whether home or away.
ADVERTISING AND MARKETING
We intend to use local radio, local newspaper and direct mail with
promotional messages to create sales leads and general brand awareness.
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<PAGE>
COMPETITION
The security alarm industry is highly competitive. Management believes
that the following companies are the top five alarm companies in the New York
metropolitan area. This belief is based on these companies market share in the
United States.
- ADT Security Services, a subsidiary of Tyco International,
Inc. ("ADT");
- Protection One;
- Security Link from Ameritech, Inc., a subsidiary of Ameritech
Corporation;
- Brinks Home Security Inc., a subsidiary of The Pittston
Services Group of North America; and
- Honeywell Inc.
Competition in the security alarm industry is based primarily on
reliability of equipment, market visibility, services offered, reputation for
quality of service, price and the ability to identify and to solicit prospective
customers as they move into homes. We believe that we will compete effectively
with other national, regional and local security alarm companies due to
management's reputation for being reliable locksmiths, our prominent presence in
the areas in which we intend to do business due to the fact that the Company is
centrally located in the New York area, approximately 20 minutes from all five
boroughs of New York City, and our marketing alliances with developers, building
owners, cooperative boards and managers of apartment complexes. Presently Mr.
Erber provides these entities with the best price available for locks and
similar devices, and in exchange these entities list Mr. Erber's locksmith
business as a preferred vendor. The Company intends to utilize the alliances in
the same manner. The Company will provide developers, building managers and
cooperative boards with alarm systems for the building complexes common areas at
the best rates possible. In exchange, Mr. Erber believes that based on his past
experience as a locksmith these entities will list the Company as a preferred
vendor to be used by their building tenants and coop and condominium owners.
None of these alliances are subject to written agreements nor at this time are
there any oral agreements. At present, Mr. Erber's locksmith business provides
locksmith services to an aggregate of approximately fifty (50) developers,
building managers and cooperative boards.
REGULATORY MATTERS
A number of local governmental authorities have adopted or are
considering various measures aimed at reducing the number of false alarms. Such
measures include:
- subjecting alarm monitoring companies to fines or penalties
for transmitting false alarms;
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- permitting of individual alarm systems and the revocation of
such permits following a specified number of false alarms;
- imposing fines on alarm customers for false alarms;
- imposing limitations on the number of times the police will
respond to alarms at a particular location after a specified
number of false alarms; and
- requiring further verification of an alarm signal before the
police will respond.
Our operations are subject to a variety of other laws, regulations and
licensing requirements of both domestic and foreign federal, state, and local
authorities. In certain jurisdictions, we are required to obtain license or
permits, to comply with standards governing employee selection and training, and
to meet certain standards in the conduct of our business. Many jurisdictions
also require certain of our employees to obtain licenses or permits. Those
employees who serve as patrol officers are often subject to additional licensing
requirements, including firearm licensing and training requirements in
jurisdictions in which they carry firearms.
The alarm industry is also subject to requirements imposed by various
insurance, approval, listing, and standards organizations. Depending upon the
type of customer served, the type of security service provided, and the
requirements of the applicable local governmental jurisdiction, adherence to the
requirements and standards of such organizations is mandatory in some instances
and voluntary in others.
Our advertising and sales practices are regulated in the United States
by both the Federal Trade Commission and state consumer protection laws. In
addition, certain administrative requirements and laws of the foreign
jurisdictions in which we operate also regulate such practices. Such laws and
regulations include restrictions on the manner in which we promote the sale of
our security alarm systems, the obligation to provide purchasers of our alarm
systems with certain rescission rights and certain foreign jurisdictions'
restrictions on a company's freedom to contract.
Our alarm monitoring business utilizes telephone lines and radio
frequencies to transmit alarm signals. The cost of telephone lines and the type
of equipment which may be used in telephone line transmission are currently
regulated by both federal and state governments. The Federal Communications
Commission and state public utilities commissions regulate the operation and
utilization of radio frequencies. In addition, the laws of certain of the
foreign jurisdictions in which we operate regulate the telephone communications
with the local authorities.
At present we are in compliance with all of the above discussed
regulations. We do not anticipate any difficulties peculiar to our operations in
complying with future governmental regulations.
24
<PAGE>
RISK MANAGEMENT
The nature of the services provided by us potentially exposes us to
greater risks of liability for employee acts or omissions, or system failure,
than may be inherent in other businesses. Substantially all of our alarm
monitoring agreements and other agreements, pursuant to which we intend to sell
our products and services contain provisions limiting liability to customers in
an attempt to reduce this risk. Management believes that the Company will have
legal liability as a result of any losses incurred by a customer that relates to
the installation of an alarm system including losses related to properly
installed faulty equipment. In the case of faulty equipment, management believes
that the manufacturer will also have liability. Dangers related to problems
occurring at the monitoring level will probably expose the Company and its
independent monitoring company to legal liability.
We intend to carry insurance of various types, including general
liability and errors and omissions insurance in amounts management considers
adequate and customary for our industry and business. Management has contacted
several insurance brokers regarding insuring the Company's intended business and
has received quotes of insurance policies. Management believes it will be able
to obtain the kinds and amounts of insurance customary for the industry. Our
loss experience, and the loss experiences at other security service companies,
may affect the availability and cost of such insurance. Certain insurance
policies, and the laws of some states, may limit or prohibit insurance coverage
for punitive or certain other types of damages or liability arising from gross
negligence.
EMPLOYEES
At December 31, 1999 we employed two individuals on a full time basis,
of which one is an executive officer. Ultimately, we expect to maintain a
staffing level of at least 15 to 20 employees.
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL STATEMENTS
Results of Operations
We commenced operations on a limited basis in December 1999. Our total
revenue for the year ended December 31, 1999 was $14,730. Our net income for
that period was $4,814. Our revenues for the three months ended March 31, 2000
was $8,030 compared to no sales for the period of March 26, 1999 (date of
inception) to March 31, 1999. Our net income for the period ended March 31, 2000
was $3,803 compared to $0 for the period ended March 31, 1999. The future
success of the Company will depend to a great extent on management's abilities
to implement our business plan.
25
<PAGE>
CAPITAL NEEDS AND FUTURE REQUIREMENTS
As of March 31, 2000 we raised an aggregate of approximately $14,000.
We have also borrowed approximately $6,900 from third parties. While these
monies have allowed us to commence minimal operations, it is not enough to
sustain our business plan. In order for us to begin full operations we will need
to raise cash immediately. We do not have enough funds to sustain our business
for the next twelve months, accordingly, we will need to raise cash during the
next twelve months. We intend to raise funds for the expansion of our business
and possible business acquisitions. There can be no assurance as to our ability
to raise additional funds and there can be no assurances that we will be able to
continue as an ongoing concern.
Inflation
The Company believes that there has not been a significant impact from
inflation on the Company's operations during the past three fiscal years.
Additional Factors That May Affect Future Results
Future Operating Results Future operating results may be impacted by a number of
factors that could cause actual results to differ materially from those stated
herein, which reflect management's current expectations. These factors include
worldwide economic and political conditions, industry specific factors, the
Company's ability to maintain access to external financing sources and its
financial liquidity, the acceptance of the BusinessMall by small and mid-sized
businesses, and the Company's ability to manage expense levels.
Need for Additional Capital As of March 31, 2000, the Company had approximately
$8,700 of cash and short term investments. The Company has experienced negative
cash flows since inception and expects the negative cash flow to continue until
significant revenue is generated by the Company's subsidiaries. The Company
expects that the monthly negative cash flow will decrease as a result of
increased activities related to BusinessMall.Com. The Company's future success
is highly dependent upon its continued access to sources of financing which it
believes are necessary for the continued advertising and marketing of the
Company's internet websites. In the event the Company is unable to maintain
access to its existing financing sources, or obtain other sources of financing,
there would be a material adverse effect on the Company's business, financial
position and results of operations.
Forward Looking Statements This report contains certain forward-looking
statements that are based on current expectations. In light of the important
factors that can materially affect results, including those set forth above and
elsewhere in this report, the inclusion of forward-looking information herein
should not be regarded as a representation by the Company or any other person
that the objectives or plans of the Company will be achieved. The Company may
encounter competitive, technological, financial and business challenges making
it more difficult than expected to continue to market its products and services;
competitive conditions within the industry may change adversely; the Company may
be unable to retain existing key management personnel; the Company's forecasts
may not accurately anticipate market demand; and there may
26
<PAGE>
be other material adverse changes in the Company's operations or business.
Certain important factors affecting the forward looking statements made herein
include, but are not limited to (i) accurately forecasting capital expenditures
and (ii) obtaining new sources of external financing. Assumptions relating to
budgeting, marketing, product development and other management decisions are
subjective in many respects and thus susceptible to interpretations and periodic
revisions based on actual experience and business developments, the impact of
which may cause the Company to alter its capital expenditure or other budgets,
which may in turn affect the Company's financial position and results of
operations.
DESCRIPTION OF PROPERTY
Our corporate offices are located at 62-45 Woodhaven Boulevard, Rego
Park, New York 11375. We occupy approximately 500 square feet at a rental of
$200.00 per month from Mr. Jordan Erber, our Chairman and CEO. We believe that
the rental rate is fair and reasonable. We occupy this space on a month to month
basis. Our management believes the space is adequate to satisfy our customers
need at present. As we grow, the current space will be insufficient, however,
there is adequate space available in the area and management believes a move can
be accomplished with minimal or no disruption to its operations.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
We were incorporated on March 16, 1999 with a total authorized shares
of 20,000,000, $0.0001 par value shares. On March 26, 1999 we issued an
aggregate of 1,078,000 restricted shares of our Common Stock to the founders of
the Company, Jordan Erber, the Company's President (778,000), Kathleen LaVeglia,
the Company's Secretary (290,000) and Robert Dehmer, a director of the Company
(10,000), at par value. As part of this distribution, 478,000 shares were sold
to Harriet Zahner, 300,000 shares to Randi Hagler, 300,000 shares to David
Zahner, 643,000 shares to LNE Trading Corp., 300,000 shares to Lottie Smolar,
430,000 shares to Elizabeth Rosenfeld and 435,000 shares to Beverly Pomerantz.
Other than the fact that each of the foregoing shareholders own in excess of 5%
of the shares of the Company, none of them are affiliates of the Company nor are
they related to any of the Company's officers or directors. On March 26, 1999 we
sold 3,432,000 shares to 25 investors at par value. On March 31, 1999 we sold
10,000 shares to 100 investors for $0.10 per Share. On April 6, 1999 we sold
15,000 shares to three investors for $1.00 per Share.
MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDERS MATTERS
There is no public market for our Common Stock and there is no
assurance that a market for our common stock will ever develop. While we intend
on applying with the NASD to have our Common Stock quoted on the OTC-Bulletin
Board, there can be no assurance that the NASD will approve such listing.
As of April 28, 2000 we had 4,535,000 shares of Common Stock
outstanding. At that date the number of holders of record of our Common Stock
was 127.
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The Company has not declared any dividends. The payment by the Company
of dividends, if any, in the future, rest within the discretion of our Board of
Directors and will depend, among other things, upon our earnings, capital
requirements and our financial condition, as well as other relevant factors. We
have not declared any cash dividends since inception and we have no present
intention of paying any cash dividends in the foreseeable future, as we intend
to use earnings, if any, to generate growth.
EXECUTIVE COMPENSATION
Our President, Mr. Jordan Erber is currently compensated at the rate of
$500 per month. As we begin to generate revenues it is anticipated that Mr.
Erber will be paid the salary of $60,000 annually. Additionally, Mr. Erber will
receive a 5% commission on gross sales initiated by him.
No retirement, pension, profit sharing, stock option or insurance
programs or other similar programs have been adopted by us for the benefit of
our employees.
Each Director will receive $500 for attending no less than 50% of the
Board meetings in that year.
FINANCIAL STATEMENTS
CONTENTS
Page
Report of Independent Certified Public Accountants F-1
Financial Statements
Balance Sheet at December 31, 1999 F-2
Statement of Income and Retained Earnings
at December 31, 1999 F-3
Statement of Changes in Stockholders' Equity
at December 31, 1999 F-4
Statement of Cash Flows at December 31, 1999 F-5
Notes to Financial Statements F-6 - F-7
Balance Sheet at March 31, 2000 F-8
Statement of Income and Retained Earnings
at March 31, 2000 F-9
Statement of Changes in Stockholders' Equity
at March 31,2000 F-10
Statement of Cash Flows at March 31, 2000 F-11
Notes to Financial Statements F-12 - F-13
28
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WEISS & COMPANY
CERTIFIED PUBLIC ACCOUNTANTS
22 WEST 38TH STREET
NEW YORK, NEW YORK 10018-6204
TELEPHONE: (212) 302-3400 TELECOPIER: (212) 764-3269
http://www.weissandco.com
INDEPENDENT AUDITORS' REPORT
To the Board of Directors
Be Safe Services, Inc.
We have audited the accompanying balance sheet of Be Safe Services, Inc. (a
development stage company) as of December 31, 1999, and the related statements
of income, retained earnings, shareholders' equity, and cash flows for the
period March 26, 1999 (inception) through December 31, 1999. 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 Be Safe Services, Inc. (a
development stage company) as of December 31, 1999, and the results of its
operations and its cash flows for the period March 26, 1999 (inception) through
December 31, 1999, in conformity with generally accepted accounting principles.
New York, New York
March 2, 2000
F-1
<PAGE>
BE SAFE SERVICES, INC.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEET
DECEMBER 31, 1999
ASSETS
Cash $13,652
Accounts receivable 14,730
-------
Total current assets 28,382
Intangible assets 9,909
-------
$38,291
LIABILITIES AND SHAREHOLDERS' EQUITY
Accrued expenses and taxes $ 8,715
Loans from officers 687
Loans from others 9,909
-------
Total liabilities 19,311
-------
Common stock, par value $.0001; 20,000,000 shares
authorized, 4,535,000 shares issued and outstanding 454
Additional paid-in capital 13,712
Retained earnings 4,814
-------
Total shareholders' equity 18,980
-------
$38,291
See accountants' audit report and notes.
F-2
<PAGE>
BE SAFE SERVICES, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF INCOME AND RETAINED EARNING
FOR THE PERIOD MARCH 26, 1999 (INCEPTION)
THROUGH DECEMBER 31, 1999
Revenues $ 14,730
General and administrative expenses 3,139
-----------
Operating income 11,591
Interest income 138
-----------
Income before officer's compensation 11,729
Officer's compensation 4,500
-----------
Net income before provision for income taxes 7,229
Provision for income taxes 2,415
-----------
Net income and retained earnings $ 4,814
===========
Weighted average number of common shares outstanding 4,535,000
===========
Net income per share (basic and diluted) $ 0.00
===========
See accountants' audit report and notes.
F-3
<PAGE>
BE SAFE SERVICES, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
FOR THE PERIOD MARCH 26, 1999 (INCEPTION)
THROUGH DECEMBER 31, 1999
<TABLE>
<CAPTION>
Common Paid-in Retained
Stock Capital Earnings Total
----- ------- -------- -----
<S> <C> <C> <C> <C>
Shareholders' equity, March 26, 1999 $ - $ - $ - $ -
Sale of common stock, 4,510,000
shares on March 26,1999 451 - - 451
Sale of common stock, 10,000 Shares
on March 30,1999 1 999 - 1,000
Sale of common stock, 10,000 Shares
On April 6,1999 1 14,999 - 15,000
Cost of stock offering - (2,285) (2,285)
Net income - - 4,814 4,814
-------- ------------- ------- ---------
Shareholders' equity, December 31, 1999 $ 453 $ 13,713 $ 4,814 $ 18,980
======== ============= ======= =========
</TABLE>
See accountants' audit report and notes.
F-4
<PAGE>
BE SAFE SERVICES, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CASH FLOWS
FOR THE PERIOD MARCH 26, 1999 (INCEPTION)
THROUGH DECEMBER 31, 1999
Operating activities
Net income $ 4,814
Adjustment to reconcile net income to
cash used in operating activities
Accounts receivable (14,730)
Accrued expenses and taxes 8,715
----------
Net cash used in operating activities (1,201)
----------
Investing activities
Acquisition of intangible assets (9,909)
----------
Net cash used in investing activities (9,909)
----------
Financing activities
Proceeds from officers' loans 687
Proceeds from other loans 9,909
Proceeds from issuance of common stock 16,451
Cost of stock offering (2,285)
----------
Net cash provided by financing activities 24,762
----------
Net increase in cash and cash at end of period $ 13,652
==========
See accountants' audit report and notes.
F-5
<PAGE>
BE SAFE SERVICES, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
Note 1 - General
The Company was incorporated in the State of Delaware on March 26,
1999, to distribute, install, and service alarm and surveillance
systems. As of December 31, 1999, the Company had not yet engaged in
significant business operations.
Note 2 - Significant accounting policies
Development stage
At December 31, 1999, the Company was a development-stage entity since
it had not produced any significant revenues from planned principal
operations.
Intangible assets
This consists of organizational costs which are amortized over a period
of five years using the straight-line method.
Use of estimates
Generally accepted accounting principles require management to make
estimates and assumptions that affect the reported amounts of assets
and liabilities, 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. The Company utilizes
estimates in measuring and projecting revenue, in providing for an
allowance for doubtful accounts and in recording accrued liabilities.
Actual results could differ from those estimates.
Earnings per share
On March 3, 1997, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standard No. 128, "Earnings Per
Share," which provides for the calculation of Basic and Diluted
earnings per share. Basic earnings per share includes no dilution and
is computed by dividing income available to common shareholders by the
weighted average number of common shares outstanding for the period.
Diluted earnings per share reflects the potential dilution of
securities that could share in the earnings of the entity. The Company
adopted this pronouncement during the period ended December 31, 1999,
and it had no effect on earnings per share.
F-6
<PAGE>
BE SAFE SERVICES, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
Note 3 - Loans from officers
This consists of non-interest-bearing demand loans.
Note 4 - Loans from others
This consists of non-interest-bearing demand loans.
Note 5 - Shareholders' equity
On March 26, 1999, the Company issued 4,510,000 shares of common stock
for $451. 1,078,000 of said shares were issued to officers of the
Company.
On March 30, 1999, the Company issued 10,000 shares of common stock for
$1,000.
On April 6, 1999, the Company issued 15,000 shares of common stock for
$15,000.
F-7
<PAGE>
BE SAFE SERVICES, INC.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEET
(UNAUDITED)
MARCH 31, 2000
ASSETS
Current assets
Cash $ 8,677
Accounts receivable 22,276
-------
Total current assets 30,953
Intangible assets, net of accumulated amortization of $495 9,414
-------
$40,367
LIABILITIES AND SHAREHOLDERS' EQUITY
Accrued expenses and taxes $11,957
Loans from officers 687
Loans from others 6,909
-------
Total liabilities 19,553
-------
Shareholders' equity
Common stock, par value $.0001; 20,000,000 shares
authorized, 4,535,000 shares issued and outstanding 454
Additional paid-in capital 11,743
Retained earnings 8,617
-------
Total shareholders' equity 20,814
-------
$40,367
See accountants' audit report and notes.
F-8
<PAGE>
BE SAFE SERVICES, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF INCOME AND RETAINED EARNINGS
(UNAUDITED)
THREE MONTHS ENDED MARCH 31, 2000
Revenues $ 8,030
General and administrative expenses (excluding
officer's compensation) 1,390
-----------
Operating income 6,640
Interest income 35
-----------
Income before officer's compensation 6,675
Officer's compensation 1,500
-----------
Net income before provision for income taxes 5,175
Provision for income taxes 1,372
-----------
Net income 3,803
Retained earnings, beginning of period 4,814
-----------
Retained earnings, end of period $ 8,617
===========
Weighted average number of common shares outstanding 4,535,000
===========
Net income per share (basic and diluted) $ 0.00
===========
See accountants' audit report and notes.
F-9
<PAGE>
BE SAFE SERVICES, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
(UNAUDITED)
THREE MONTHS ENDED MARCH 31, 2000
<TABLE>
<CAPTION>
Common Paid-in Retained
Stock Capital Earnings Total
----- ------- -------- -----
<S> <C> <C> <C> <C>
Shareholders' equity, January 1, 2000 $454 $13,712 $4,814 $18,980
Cost of stock offering - (1,969) - (1,969)
Net income - - 3,803 3,803
---- ------- ------ -------
Shareholders' equity, March 31, 2000 $454 $11,743 $8,617 $20,814
==== ======= ====== =======
</TABLE>
See accountants' audit report and notes.
F-10
<PAGE>
BE SAFE SERVICES, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CASH FLOWS
(UNAUDITED)
THREE MONTHS ENDED MARCH 31, 2000
Operating activities
Net income $ 3,803
Adjustment to reconcile net income to
cash used in operating activities
Amortization 495
Changes in operating assets and liabilities
Accounts receivable (7,546)
Accrued expenses and taxes 3,242
--------
Net cash used in operating activities (6)
--------
Financing activities
Repayment of loans from others (3,000)
Cost of stock offering (1,969)
--------
Net cash used in financing activities (4,969)
--------
Net decrease in cash (4,975)
Cash at beginning of period 13,652
--------
Cash at end of period $ 8,677
========
Supplementary information:
Income taxes paid on a cash basis $ 2,199
========
Interest paid on a cash basis $ -
========
See accountants' audit report and notes.
F-11
<PAGE>
BE SAFE SERVICES, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
Note 1 - General
The Company was incorporated in the State of Delaware on March 26,
1999, to distribute, install, and service alarm and surveillance
systems. As of March 31, 2000, the Company had not yet engaged in
significant business operations.
Note 2 - Significant accounting policies
Basis of presentation
The accompanying consolidated financial statements are unaudited but,
in the opinion of management of the Company, contain all adjustments,
which include normal recurring adjustments necessary to present fairly
the financial position at March 31, 2000, and the results of operations
and cash flows for the three months ended March 31, 2000.
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 at the date of the financial statements and the reported
amounts of revenues and expense during the reporting period. Actual
results could differ from those estimates. The results of operations
for the three months ended March 31, 2000, are not necessarily
indicative of the results of operations to be expected for the full
year ending December 31, 2000.
Development stage
At March 31, 2000, the Company was a development-stage entity since it
had not produced any significant revenues from planned principal
operations.
Intangible assets
This consists of organizational costs which are amortized over a period
of five years using the straight-line method.
Earnings per share
On March 3, 1997, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standard No. 128, "Earnings Per
Share," which provides for the calculation of Basic and Diluted
earnings per share. Basic earnings per share includes no dilution and
is computed by dividing income available to common shareholders by the
weighted average number of common shares outstanding for the period.
Diluted earnings per share reflects the potential dilution of
securities that could share in the earnings of the entity. The Company
adopted this pronouncement during the period ended December 31, 1999,
and it had no effect on earnings per share.
F-12
<PAGE>
BE SAFE SERVICES, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
Note 3 - Loans from officers
This consists of non-interest-bearing demand loans.
Note 4 - Loans from others
This consists of non-interest-bearing demand loans.
Note 5 - Shareholders' equity
On March 26, 1999, the Company issued 4,510,000 shares of common stock
for $451. Of said shares, 1,078,000 were issued to officers of the
Company.
On March 30, 1999, the Company issued 10,000 shares of common stock for
$1,000.
On April 6, 1999, the Company issued 15,000 shares of common stock for
$15,000.
The costs of the stock offering, $1,969 in 2000, and $2,286 in 1999,
were charged to paid-in capital in their respective years.
F-13
<PAGE>
CHANGES IN AND DISAGREEMENTS WITH
ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
We have had no disagreements with our auditors, Weiss & Company. Weiss
& Company has been our auditors since our inception.
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
INDEMNIFICATION OF DIRECTORS AND OFFICERS
Delaware law sets forth our powers to indemnify officers, directors,
employees and agents. Our Articles of Incorporation provide as follows:
"A director of the Corporation shall not be personally liable to the
Corporation or its stockholders for monetary damages for breach of
fiduciary duty as a director, except for liability (i) for any breach
of the director's duty of loyalty to the Corporation or its
stockholders, (ii) for acts or omissions not in good faith or which
involve intentional misconduct or a knowing violation of the law, (iii)
under Section 174 of the Delaware General Corporation Law, or (iv) for
any transaction from which the director derived any improper personal
benefit. If the Delaware General Corporation Law is amended after the
date of incorporation of the Corporation to authorize corporate action
further eliminating or limiting the personal liability of directors,
then the liability of a director of the Corporation shall be eliminated
or limited to the fullest extent permitted by the Delaware General
Corporation Law as so amended.
Any repeal or modification of the foregoing paragraph by the
stockholders of the Corporation shall not adversely affect any right or
protection of a director of the Corporation existing at the time of the
repeal or modification.
The Corporation shall, to the fullest extent permitted by Section 145
(or any other provision) of the Delaware General Corporation Law, as
the same may be amended and supplemented, or by any successor thereto,
indemnify any and all officers and directors of the corporation from
and against any and all of the expenses, liabilities or other matters
referred to in or converted by said Section. Such right to
indemnification provided for herein shall not be deemed exclusive of
any other rights to which those seeking indemnification may be entitled
under any By-law, agreement, vote of stockholders or disinterested
directors or otherwise."
Except as mentioned above, there is no charter provision, bylaw,
contract, arrangement or statute pursuant to which any director or officer is
indemnified in any manner against any
29
<PAGE>
liability which he may incur in his capacity as such. We do not maintain
director and officer liability policy to fund our obligations as stated herein
above.
OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following expenses in connection with the issuance and distribution
of the securities being registered will be borne by us and are estimated to be
as follows:
Filing Fee .................................... $ 1,194.60
Legal Fees .................................... $ 15,000.00
Transfer Agent ................................ $ 1,000.00
Accounting Fees ............................... $ 5,000.00
Printing Fee .................................. $ 3,000.00
Miscellaneous ................................. $ 2,000.00
-----------
Total ............................... $ 27,194.60
===========
RECENT SALES OF UNREGISTERED SECURITIES
On March 26, 1999, we issued an aggregate of 1,078,000 shares of our
Common Stock to Jordan Erber (778,000), Kathleen LaVeglia (290,000) and Robert
Dehmer (10,000) for $107.80. We relied on the exemption from registration at
Section 4(2) of the Securities Act of 1933 for non-public offerings.
On March 26, 1999, we sold an aggregate of 3,432,000 shares of our
Common Stock to 25 purchasers for $343.20. The offering was conducted under
Regulation D, Rule 504 of the Securities Act of 1933.
On March 31, 1999, we sold an aggregate of 10,000 shares of our Common
Stock to 100 purchasers for $1,000. The offering was conducted under Regulation
D, Rule 504 of the Securities Act of 1933.
On April 6, 1999, we sold 15,000 shares of our Common Stock to three
purchasers for $15,000. The offering was conducted under Regulation D, Rule 504
of the Securities Act of 1933.
All of the shares sold by the Company pursuant to Rule 504 were sold by
the Company's officers and directors. Rule 504 allows a company to raise up to
$1 million in a twelve month period, if the company is not subject to the
reporting requirements of the Securities and Exchange Act of 1934 (the "Exchange
Act") and the company is not a "blank check" company. The Company has not raised
more than $1 million during the last twelve months. The Company is not subject
to the reporting requirements of the Exchange Act and it is not a blank check
company, therefore, the exemption under Rule 504 is available for all such
sales. Additionally,
30
<PAGE>
all offers and sales were made to New York residents and the Company filed all
necessary documents within the State of New York.
EXHIBITS
3.1* Certificate of Incorporation
3.2* By-Laws of Registrant
4.1* Specimen of Stock Certificate
5. Opinion of Sommer & Schneider LLP as to the validity of the securities
registered hereunder
23.1 Consent of Weiss & Company
23.2 Consent of Sommer & Schneider LLP (included as part of Exhibit 5)
27 Financial Data Schedule
* Incorporated by reference from our Registration Statement filed on Form 10-SB
on June 2, 1999.
UNDERTAKINGS
(a) We undertake 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; (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;
notwithstanding the foregoing, any increase or decrease in volume of securities
offered (if the total dollar value of securities offered would not exceed that
which was registered) may be reflected in the form of Prospectus filed with the
Commission pursuant to Rule 424 (b) if, in the aggregate, the changes in volume
and price represent no more than a 20% change in the maximum aggregate offering
price set forth in the "Calculation of Registration Fee" table in the effective
Registration Statement; and (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.
(b) We undertake that, for the purpose of determining any liability
under the Securities Act of 1933, each post-effective amendment shall be deemed
to be a new registration
31
<PAGE>
statement relating to the securities offered therein, and the offering of these
securities at that time shall be deemed to be the initial bona fide offering
thereof.
(c) We undertake 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.
(d) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to our directors, officers, and
controlling persons, we have been advised that in the opinion of the Commission
this 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 the company of expenses incurred or
paid by one of our directors, officers or controlling persons 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 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 of 1933 and will be governed by the final
adjudication of such issue.
(e) For purposes of determining any liability under the Securities Act
of 1933, the information omitted from the form of Prospectus filed as part of
this Registration Statement in reliance upon Rule 430A and contained in a form
of Prospectus filed by the registrant pursuant to Rule 424 (b) (1) or (4) or 497
(h) under the Securities Act shall be deemed to be part of this Registration
Statement as of the time it was declared effective.
(f) For the purpose of determining any liability under the Securities
Act of 1933, each post-effective amendment that contains a form of Prospectus
shall be deemed to be a new registration statement relating to the securities
offered, and the offering of these securities at that time shall be deemed to be
the initial bona fide offering.
32
<PAGE>
SIGNATURES
In accordance with the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on form SB-2 and authorized this registration
statement to be signed on its behalf by the undersigned in the city of New York,
State of New York, on May 18, 2000.
BE SAFE SERVICES, INC.
By: /s/ Jordan Erber
----------------
Jordan Erber, Chairman,
President and Treasurer
In accordance with the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates stated.
Signature Capacity Date
- --------- -------- ----
/s/ Jordan Erber President, Treasurer May 18, 2000
- ----------------------- and Director
Jordan Erber
/s/ Kathleen LaVeglia Secretary and Director May 18, 2000
- -----------------------
Kathleen LaVeglia
/s/ Robert Dehmer Director May 18, 2000
- -----------------------
Robert Dehmer
33
<PAGE>
----------------
4,525,000 Shares
BE SAFE SERVICES, INC.
Common Stock, $.0001 par value
----------------
No dealer, salesman or other person has been authorized to give any
information or to make any representations 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 the Company or the Underwriters.
This Prospectus does not constitute an offer to sell or solicitation of an offer
to buy any securities other than the Common Stock to which it relates or an
offer or solicitation to any person in any jurisdiction in which such offer or
solicitation would be unlawful or to any person to whom it is unlawful. Neither
the delivery of this Prospectus nor any offer or sale made hereunder shall,
under any circumstances, create any implication that there has been no change in
the affairs of the Company or that information contained herein is correct as of
any time subsequent to the date hereof.
Until ____________, 2000 (25 days after the date of this Prospectus),
all dealers effecting transactions in the Common Stock, whether or not
participating in this distribution, may be required to deliver a Prospectus.
This is in addition to the obligation of dealers to deliver a Prospectus when
acting as Underwriters and with respect to their unsold allotments or
subscriptions.
----------------
34
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We hereby consent to the incorporation by reference in this
Registration Statement on Form SB-2 of our report dated March 2, 2000 relating
to the financial statements, which appears in Be Safe Services, Inc.'s Annual
Report on Form 10-KSB for the year ended December 31, 1999. We also consent to
the reference to us under the heading "Experts" in this Registration Statement.
/s/ Weiss & Company
Weiss & Company
New York, New York
May 17, 2000
SOMMER & SCHNEIDER LLP
595 STEWART AVENUE, SUITE 710
GARDEN CITY, NEW YORK 11530
------------
Herbert H. Sommer Telephone (516) 228-8181
Joel C. Schneider Facsimile (516) 228-8211
May 17, 2000
Board of Directors
Be Safe Services, Inc.
62-45 Woodhaven Boulevard
Rego Park,, NY 11374
Gentlemen:
I am Securities Counsel to Be Safe Services, Inc. (the "Corporation"),
a Delaware corporation. This opinion letter has been prepared in connection with
the Corporation's registration statement on Form SB-2 (the "Registration
Statement") filed with the Securities and Exchange Commission relating to the
proposed offering of an aggregate of 4,525,000 shares of the Corporation's
common stock, par value $.0001 per share, all of which shares (the "Shares")
were issued by the Corporation in private offerings on March 26, 1999 and April
6, 1999. This opinion letter is furnished to you at your request to enable you
to fulfill the requirements of Item 601(b)(5) of Regulation S-K, 17 C.F.R. (s)
229.601 (b)(5) in connection with the Registration Statement.
For purposes of this opinion letter, I have examined copies of the
following documents:
1. An executed copy of the Registration Statement;
2. Executed copies of Subscription Agreement;
3. Certificate of Incorporation;
4. The By-laws of the Corporation; and
5. Resolutions of the Board of Directors.
In my examination of the aforesaid documents, I have assumed the
genuineness of all signatures, the legal capacity of natural persons, the
authenticity, accuracy and completeness of all documents submitted to me, and
the conformity with the original documents of all documents submitted to me as
certified, telecopies, photostatic, or reproduced copies. This opinion letter is
given, and all statements herein are made, in the context of the foregoing.
This opinion letter is based as to matters of law solely on the
Delaware General Corporation Law. I express no opinion herein as to any other
laws, statutes, regulations or ordinances.
<PAGE>
Board of Directors
Be Safe Services, Inc.
May 17, 2000
Page 2
Based upon the foregoing, I am of the opinion that the Shares were
validly issued, fully paid and nonassessable under the Delaware General
Corporation Law.
I assume no obligation to advise you of any changes in the foregoing
subsequent to the delivery of this opinion letter. This opinion letter has been
prepared for your use in connection with the filing of the Registration
Statement on the date of this opinion letter and should not be quoted in whole
or in part or otherwise be referred to, nor filed with or furnished to any
governmental agency or other person or entity, without my prior written consent.
I hereby consent to the filing of this opinion letter as Exhibit 5 to
the Registration Statement. In giving this consent, I do not hereby admit that I
am an "expert" within the meaning of the Securities Act of 1933, as amended.
Very truly yours,
SOMMER & SCHNEIDER LLP
/s/ Joel C. Schneider
Joel C. Schneider
JCS/md
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0001084904
<NAME> BE SAFE SERVICES, INC.
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-END> MAR-31-2000
<CASH> 8,677
<SECURITIES> 0
<RECEIVABLES> 22,276
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 30,953
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 40,367
<CURRENT-LIABILITIES> 19,553
<BONDS> 0
0
0
<COMMON> 454
<OTHER-SE> 20,360
<TOTAL-LIABILITY-AND-EQUITY> 40,367
<SALES> 8,030
<TOTAL-REVENUES> 8,065
<CGS> 1,390
<TOTAL-COSTS> 1,390
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 5,175
<INCOME-TAX> 1,372
<INCOME-CONTINUING> 3,803
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3,803
<EPS-BASIC> 0
<EPS-DILUTED> 0
</TABLE>
