UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
(Mark One)
[ X ] Quarterly report under Section 13 or 15(d) of the Securities Exchange
Act of 1934
For the quarterly period ended September 30, 2000
[ ] Transition report under Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the transition period from _________ to _________
Commission File No. 0-29015
SAF-T-HAMMER CORPORATION
(Name of Small Business Issuer in Its Charter)
NEVADA 87-0543688
(State or Other Jurisdiction of (IRS Employer
Incorporation or Organization) Identification Number)
14500 N. NORTHSIGHT, STE. 221
SCOTTSDALE, ARIZONA 85260
(Address of Principal Executive Offices) (Zip Code)
(480) 949-9700
(Issuer's Telephone Number)
SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:
(None)
SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT:
Common Stock, par value $0.001
(Title of Class)
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports); and (2)
has been subject to such filing requirements for the past 90 days.
Yes X No
----
Indicate the number of shares outstanding of each of the issuer's class of
common stock as of the latest practicable date:
Title of each class of Common Stock Outstanding as September 30, 2000
----------------------------------------- ---------------------------------
Common Stock, $0.001 par value 11,676,546
Transitional Small Business Disclosure Format (check one):
Yes No X
------
<PAGE>
TABLE OF CONTENTS
-----------------
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
Condensed Balance Sheets at September 30, 2000 (Unaudited).
Condensed Statements of Operations (Unaudited) for the three and nine
months ended September 30, 2000 and 1999 and for the period from
inception to September 30, 2000.
Condensed Statements of Cash Flows (Unaudited) for the nine months
ended September 30, 2000 and 1999 and for the period from inception to
September 30, 2000.
Notes to Interim Financial Statements (Unaudited) at September 30, 2000.
Item 2. Plan of Operations
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
Item 2. Changes in Securities.
Item 3. Defaults Upon Senior Securities.
Item 4. Submission of Matters to a Vote of Security Holders.
Item 5. Other Information.
Item 6. Exhibits and Reports on Form 8-K.
Page 1
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PART I - FINANCIAL INFORMATION
ITEM 1 - FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
SAF-T-HAMMER CORPORATION
(FORMERLY DE ORO MINES, INC.)
(A DEVELOPMENT STAGE ENTERPRISE)
BALANCE SHEET - September 30, 2000
(UNAUDITED)
ASSETS
<S> <C>
CURRENT ASSETS:
Cash $ 147,051
Prepaid expenses 36,563
------------
Total current assets 183,614
------------
PROPERTY AND EQUIPMENT, net of
accumulated depreciation 38,884
OTHER ASSETS:
Goodwill, net 415,624
Debt issue costs 45,079
Deposits 5,372
------------
Total other assets 466,075
------------
$ 688,573
============
LIABILITIES AND STOCKHOLDERS' DEFICIENCY
CURRENT LIABILITIES:
Accrued expenses $ 57,347
3% CONVERTIBLE NOTE PAYABLE, due March 28, 2002 and unsecured 304,000
10% NOTE PAYABLE, related party, due September 30, 2001 and unsecured 357,425
STOCKHOLDERS' EQUITY:
Common stock; $0.001 par value, 100,000,000 shares
authorized, 11,676,546 shares issued and outstanding 9,545
Additional paid-in capital 3,254,839
Accumulated deficit (3,294,583)
------------
Total stockholders' equity (30,199)
------------
$ 688,573
============
</TABLE>
See notes to unaudited financial statements.
Page 2
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<TABLE>
<CAPTION>
SAF-T-HAMMER CORPORATION
(FORMERLY DE ORO MINES, INC.)
(A DEVELOPMENT STAGE ENTERPRISE)
STATEMENTS OF OPERATIONS
For the period
Nine months ended Three months ended since inception to
September 30, September 30, September 30, September 30, September 30,
2000 1999 2000 1999 2000
------------------ -------------------- -------------------- ------------ ------------
(Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited)
------------------ -------------------- -------------------- ------------ ------------
<S> <C> <C> <C> <C> <C>
REVENUES $ - $ - $ - $ - $ -
COST OF REVENUES - - - - -
------------------ -------------------- -------------------- ------------ ------------
GROSS PROFIT - - - - -
GENERAL AND ADMINISTRATIVE 1,856,625 908,185 727,055 315,281 3,294,583
------------------ -------------------- -------------------- ------------ ------------
NET LOSS $ (1,856,625) $ (908,185) $ (727,055) $ (315,281) $(3,294,583)
================== ==================== ==================== ============ ============
WEIGHTED AVERAGE NUMBER OF
SHARES OUTSTANDING -
basic and diluted 10,104,284 8,372,269 11,195,303 8,578,610 10,104,284
================== ==================== ==================== ============ ============
NET LOSS PER SHARE -
basic and diluted (0.18) (0.11) $ (0.06) $ (0.04) $ (0.33)
================== ==================== ==================== ============ ============
</TABLE>
See notes to unaudited financial statements.
Page 3
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<TABLE>
<CAPTION>
SAF-T-HAMMER CORPORATION
(FORMERLY DE ORO MINES, INC.)
(A DEVELOPMENT STAGE ENTERPRISE)
STATEMENTS OF CASH FLOWS
NET INCREASE(DECREASE) IN CASH AND CASH EQUIVALENTS
For the period
Nine months ended since inception to
September 30, September 30,
2000 1999 2000
(Unaudited) (Unaudited) (Unaudited)
------------- ---------- ---------
<S> <C> <C> <C>
CASH FLOWS PROVIDED BY (USED FOR)
OPERATING ACTIVITIES:
Net loss $(1,856,625) $(908,185) $(3,294,583)
ADJUSTMENTS TO RECONCILE NET LOSS TO NET CASH
PROVIDED BY (USED FOR) OPERATING ACTIVITIES:
Depreciation 28,947 1,776 38,235
Capital contribution - product development - - 74,046
Stock compensation for services rendered 358,950 77,458 496,408
Interest 256,201 - 256,201
CHANGES IN OPERATING ASSETS AND LIABILITIES:
(INCREASE) DECREASE IN ASSETS:
Deposits (5,372) - (5,372)
Prepaid expense (36,563) (4,150) (36,563)
INCREASE (DECREASE) IN LIABILITIES -
accrued expenses 23,308 (8,555) 57,349
------------ ---------- ------------
Total adjustments 625,471 66,529 880,304
------------ ---------- ------------
Net cash used for operating activities (1,231,154) (841,656) (2,414,279)
------------ ---------- ------------
CASH FLOWS USED FOR INVESTING ACTIVITIES:
Payments to acquire Lost Coast Ventures, Inc. (100,000) - (100,000)
Payments to acquire property and equipment (24,745) (1,145) (24,745)
------------ ---------- ------------
Net cash used for investing activities (124,745) (1,145) (124,745)
------------ ---------- ------------
CASH FLOWS PROVIDED BY (USED FOR) FINANCING ACTIVITIES:
Proceeds from notes payable, related parties 112,425 120,000 582,925
Payments on notes payable, related parties (95,000) (130,500) (225,500)
Proceeds from issuance of convertible debentures 1,000,000 - 1,000,000
Payments on debt issue costs (183,000) - (183,000)
Proceeds from issuance of common stock 667,525 844,125 1,511,650
------------ ---------- ------------
Net cash provided by financing activities 1,501,950 833,625 2,706,075
------------ ---------- ------------
NET INCREASE/(DECREASE) IN CASH 146,051 (9,176) 147,051
CASH, beginning of year/period 1,000 34,485 -
------------ ---------- ------------
CASH, end of period $ 147,051 $ 25,309 $ 147,051
============ ========== ============
SUPPLEMENTAL DISCLOSURE OF NON-CASH FINANCING AND INVESTING ACTIVITIES:
Issuance of common stock during reverse merger $ - $ - $ 74,046
============ ========== ============
Contribution of property and equipment $ - $ 30,500 $ 30,500
============ ========== ============
Issuance of stock for services $ 358,950 $ - $ 496,408
============ ========== ============
Acquisition of Lost Coast Ventures, Inc. $ 337,500 $ - $ 337,500
============ ========== ============
Conversion of debt $ 696,000 $ - $ 696,000
============ ========== ============
Convertibility feature related to debentures issued $ 118,280 $ - $ 118,280
============ ========== ============
</TABLE>
See notes to unaudited financial statements
Page 4
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SAF-T-HAMMER CORPORATION
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO FINANCIAL STATEMENTS
NINE MONTHS ENDED SEPTEMBER 30, 2000 AND 1999
(UNAUDITED)
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
ORGANIZATION AND BUSINESS ACTIVITY:
Prior to incorporation as Saf-T-Hammer Corporation in 1998, the Company existed
as De Oro Mines, Inc. De Oro Mines, Inc. was incorporated on June 17, 1991 in
the State of Nevada. Its original Articles of Incorporation provided for
1,000,000 shares of common stock with a par value of $0.01 per share.
On August 15, 1996, the shareholders of the Company authorized the
recapitalization of the Company and the amendment of its Articles of
Incorporation to allow the corporation to issue up to 100,000,000 shares of a
single class of Common Stock with a par value of $0.001. The amended Articles
were duly adopted as stated and were filed on October 16, 1996 with the State of
Nevada. From its inception, De Oro Mines, Inc. was in the development stage and
was primarily engaged in the business of developing mining properties. During
1992, De Oro lost its remaining assets and settled its liabilities, and from
that date forward remained dormant.
Effective October 20, 1998, the Company acquired the assets of Saf-T-Hammer,
Inc. and changed its name from De Oro Mines, Inc. to Saf-T-Hammer Corporation.
Prior to this agreement becoming effective, De Oro Mines, Inc. had a total of
532,788 shares of common stock issued and outstanding. Pursuant to the Asset
Acquisition Agreement, the Company issued 1,331,250 shares of common stock to
Saf-T-Hammer, Inc., which then resulted in a total of 1,864,038 shares of common
stock being issued and outstanding. The shareholders also approved a four share
for one share forward stock split. The majority of the shareholders of both
corporations approved this asset purchase agreement and related bill of sale.
The primary asset of Saf-T-Hammer Corporation is a childproof gun safety device
that the Company plans to manufacture and sell throughout the world. Currently,
the Company is in the product development stage and has a patent pending for
rights to the childproof gun safety device.
PRINCIPLES OF CONSOLIDATION:
The accompanying financial statements include the accounts of Saf-T-Hammer
Corporation and Lost Coast Ventures, Inc. All significant intercompany accounts
and transactions have been eliminated in consolidation.
USE OF ESTIMATES:
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect certain reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
Page 5
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SAF-T-HAMMER CORPORATION
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO FINANCIAL STATEMENTS
NINE MONTHS ENDED SEPTEMBER 30, 2000 AND 1999
(UNAUDITED)
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED):
NET LOSS PER SHARE:
The Company has adopted Statement of Financial Accounting Standard No. 128.
Earnings per Shares ("SFAS No. 128"), which is effective for annual and interim
financial statements issued for periods ending after December 15, 1997. SFAS
No. 128 was issued to simplify the standards for calculating earnings per share
("EPS") previously in APB No. 15, Earnings Per Share. SFAS No. 128 replaces the
presentation of primary EPS with a presentation of basic EPS. The new rules
also require dual presentation of basic and diluted EPS on the face of the
statement of operations.
GOING CONCERN:
The Company's consolidated financial statements are prepared using the generally
accepted accounting principles applicable to a going concern, which contemplates
the realization of assets and liquidation of liabilities in the normal course of
business. Without realization of additional capital, it would be unlikely for
the Company to continue as a going concern. This factor raises substantial
doubt about the Company's ability to continue as a going concern. Management
recognizes that the Company must generate additional resources to enable it to
continue operations. The Company intends to begin recognizing significant
revenues during year 2000. Management's plans also include the sale of
additional equity securities and debt financing from related parties. However,
no assurance can be given that the Company will be successful in raising
additional capital.
BASIS OF PREPARATION:
The accompanying unaudited condensed consolidated interim financial statements
have been prepared in accordance with the rules and regulations of the
Securities and Exchange Commission for the presentation of interim financial
information, but do not include all the information and footnotes required by
generally accepted accounting principles for complete financial statements. The
audited consolidated financial statements for the two years ended December 31,
1999 was filed on April 6, 2000 with the Securities and Exchange Commission and
is hereby referenced. In the opinion of management, all adjustments considered
necessary for a fair presentation have been included. Operating results for the
nine months period ended September 30, 2000 are not necessarily indicative of
the results that may be expected for the year ended December 31, 2000.
Page 6
<PAGE>
SAF-T-HAMMER CORPORATION
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO FINANCIAL STATEMENTS
NINE MONTHS ENDED SEPTEMBER 30, 2000 AND 1999
(UNAUDITED)
(2) ACQUISITION OF LOST COAST VENTURES, INC.:
On March 31, 2000, the Company entered into a Stock Exchange Agreement with MRC
Legal Services LLC to acquire 800,000 shares (approximately 80%) of Lost Coast
Ventures, Inc., a Delaware Corporation, in exchange for 200,000 shares of its
restricted common stock. Pursuant to this Stock Exchange Agreement, immediately
following the close of this Agreement, the shareholders will cause Lost Coast
Ventures, Inc. to complete a reverse stock split and acquire the remaining 20%
of outstanding shares of Lost Coast Ventures, Inc. for nominal cash. In
relation to the Stock Exchange Agreement with MRC Legal Services LLC, the
Company also entered into a consulting agreement to negotiate and close the
Agreement with certain individuals. Pursuant to this Agreement, the Company
will pay $100,000 cash and issue 250,000 shares of its common stock immediately
upon the execution of the stock exchange with the Lost Coast shareholders. This
business combination was accounted using the purchase method of accounting and
accordingly, the purchase price ($437,500) in excess of the fair value of the
assets acquired and liabilities assumed has been recorded as goodwill on the
accompanying balance sheet. Proforma operating results as if the acquisition
had occurred at the beginning of the earliest period presented is not presented
as the amounts are not material. The management of the Company will amortize
the goodwill straight line over the estimated useful life of 10 years.
(3) DEBENTURES:
During April 2000, the Company entered into an agreement to issue 3% convertible
debentures with a face value of $1,000,000 under Rule 504 of Regulation D.
The debentures are convertible into common stock at the discretion of the holder
at 75% of the average common stock bid price for the 5 days preceding the date
of conversion. Net proceeds of $950,000 from this offering were received in May
2000. As of September 30, 2000, $696,000 of the debentures have been converted
into 1,176,399 restricted common shares of the Company. During April 2000, the
Company recorded interest expense of $118,280 with guidance under Emerging
Issues Task Force 98-5: Accounting for Convertible Securities with Beneficial
Conversion Features or Contingently Adjustable Conversion Ratios. Pursuant to
this EITF, the beneficial conversion feature of $118,280 is calculated at its
intrinsic value at the commitment date and charged to expense at the date of
issuance inasmuch as the debentures are immediately convertible into equity.
The Company also paid debt issue costs of $133,000, of which, $87,921 has been
charged to interest expense using the interest method as of September 30, 2000.
In the event of conversion of debt to equity, the proportionate share of the
unamortized discount will be charged to expense.
(4) STOCKHOLDERS' EQUITY:
During the first quarter of 2000, the Company initiated a Private Placement of
$1,250,000 of its restricted Common Stock pursuant to Rule 506 of Regulation D
of the Securities Act of 1933. As of September 30, 2000, the Company sold and
issued a total of 773,037 shares resulting in net proceeds of $667,525.
Page 7
<PAGE>
ITEM 2. PLAN OF OPERATION
CAUTIONARY STATEMENTS:
This Quarterly Report on Form 10-QSB contains certain forward-looking statements
within the meaning of Section 27A of the Securities Act of 1933 and Section 21E
of the Securities Exchange Act of 1934. The Company intends that such
forward-looking statements be subject to the safe harbors created by such
statutes. The forward-looking statements included herein are based on current
expectations that involve a number of risks and uncertainties. Accordingly, to
the extent that this Quarterly Report contains forward-looking statements
regarding the financial condition, operating results, business prospects or any
other aspect of the Company, please be advised that the Company's actual
financial condition, operating results and business performance may differ
materially from that projected or estimated by the Company in forward-looking
statements. The differences may be caused by a variety of factors, including
but not limited to adverse economic conditions, intense competition, including
intensification of price competition and entry of new competitors and products,
adverse federal, state and local government regulation, inadequate capital,
unexpected costs and operating deficits, increases in general and administrative
costs, lower sales and revenues than forecast, loss of customers, customer
returns of products sold to them by the Company, termination of contracts, loss
of supplies, technological obsolescence of the Company's products, technical
problems with the Company's products, price increases for supplies, inability to
raise prices, failure to obtain new customers, litigation and administrative
proceedings involving the Company, the possible acquisition of new businesses
that result in operating losses or that do not perform as anticipated, resulting
in unanticipated losses, the possible fluctuation and volatility of the
Company's operating results, financial condition and stock price, inability of
the Company to continue as a going concern, losses incurred in litigating and
settling cases, adverse publicity and news coverage, inability to carry out
marketing and sales plans, loss or retirement of key executives, changes in
interest rates, inflationary factors and other specific risks that may be
alluded to in this Quarterly Report or in other reports issued by the Company.
In addition, the business and operations of the Company are subject to
substantial risks that increase the uncertainty inherent in the forward-looking
statements. The inclusion of forward-looking statements in this Quarterly
Report 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.
COMPANY OVERVIEW
Saf-T-Hammer Corp. ("Saf-T-Hammer" or the "Company"), is a Nevada corporation
headquartered in Scottsdale, Arizona. The Company was initially formed in June
1991. The Company's principal asset are two unique products in development and
the patent pending rights to two childproof gun safety devices known as the
"Saf-T-Hammer" and "Saf-T-Trigger". Both devices are easily removable,
external devices that enable safe storage of weapons, including loaded firearms.
A gun owner can easily engage either the Saf-T-Hammer or Saf-T-Trigger in
approximately one second, thereby relieving the fear of death or injury to a
child or other person due to an accidental discharge of the weapon. Upon the
gun owner's return, he or she can easily disengage either device in about a
second, as well. Thus, the Saf-T-Hammer and Saf-T-Trigger allows both safety
and protection while the weapon remains loaded. The unique and salient
features of the Saf-T-Hammer and Saf-T-Trigger are as follows:
- Saf-T-Hammer & Saf-T-Trigger, unlike conventional trigger locks, can
be used with a loaded weapon;
- Saf-T-Hammer & Saf-T-Trigger cannot be fired when in safety mode;
- Saf-T-Hammer & Saf-T-Trigger can be removed and re-armed in less than
a second;
- Saf-T-Hammer requires no keys;
- Saf-T-Hammer & Saf-T-Trigger requires no codes to remember;
- Saf-T-Hammer & Saf-T-Trigger requires no appreciable level of
mechanical ability to operate;
- Saf-T-Hammer & Saf-T-Trigger cannot be broken, twisted or cut-off;
- Saf-T-Hammer & Saf-T-Trigger are cheaper than other similar gun
safety devices to produce; and
- Saf-T-Hammer & Saf-T-Trigger are currently patent pending.
As a direct result of the Company's emphasis upon internal development, it has
fostered two gun safety products, Saf-T-Hammer and Saf-T-Trigger that will be
marketed and distributed through standard firearms industry distribution
channels, catalogue outlets and direct sales. The Company has also identified a
unique proprietary marketing plan for one of its divisions, an Internet safety
mall. This Internet based "mall" concept will feature products and services
incidental to home and family safety issues and should serve as a secondary
profit center to the Company's core business. The Company's web site is
www.saf-t-hammer.com.
CURRENT PLAN OF OPERATIONS
To date, Saf-T-Hammer Corporation has generated no revenue and has had a limited
prior operating history. For the most part, the Company's operations have been
narrowly confined to research and development, infrastructure and market
planning, and cultivation of its sales and marketing network. Since inception,
the Company has focused its efforts on the development of its two primary
products, the Saf-T-Hammer and Saf-T-Trigger.
The Company's plan of operations for fiscal 2000 is to begin production and
distribution of its firearms related safety devices. The Company has contracted
with Zoltrix International, a company based in Hong Kong for the initial
manufacturing of its products and has recently received its first shipment of
manufactured products. The Company has completed the testing of the first
production models to ensure that they were manufactured according to the
Company's specifications and has shipped samples to various law enforcement
agencies, marketing representatives, and firearm manufacturers who have
expressed interest in the Company's product for independent testing. The
Company is currently ramping up to begin retail and wholesale sales of its
products in fourth quarter of the year 2000. In furtherance of this, the Company
has begun print and radio advertising in major firearm and law enforcement
magazines and is currently sponsoring the syndicated radio talk show "Gun
Talk".
Additionally, the Company has entered into agreements with approximately seventy
sales representatives on a commission basis. These sales agents currently sell
other firearms related products from companies such as Browning, Winchester,
Bushnell, Zebco, and others. The Company's sales strategy will be to market its
products on a national basis to firearm dealers, gunsmiths, law enforcement
agencies, and end users. The Company intends to market its products through
media campaigns, including magazines, radio and television.
LIQUIDITY & CAPITAL RESOURCES
As of September 30, 2000 the Company had no revenue and $688,573 in total
assets. The Company incurred a net loss of $727,055 during the three month
period ended September 30, 2000 and $315,281 for the three month period ended
June 30, 1999. On March 28, 2000, the Company issued 3% Convertible Debentures
with a face amount of $1,000,000, resulting in net proceeds of $950,000.
Pursuant to the terms of the Debentures, the Debentures are convertible into
common stock at the discretion of the holder at a 25% discount. As of September
30, 2000, $696,000 of the Debentures have been converted into 1,176,399 shares
of common stock at an average of $0.592 per share. The Company anticipates that
it has sufficient working capital through the end of November 2000. The Company
intends to raise additional working capital through either debt or equity
financing. There can be no assurances that the Company will be successful in
raising additional funds. Failure to raise additional funds will have a
material adverse effect on the Company's results of operations.
In May 2000, the Company initiated a Private Placement of $1,250,000 of its
restricted Common Stock. As of July 31, 2000, the Company has sold a total of
773,037 shares resulting in net proceeds of $667,525. However, there can be no
assurances that the Company will be able to complete the Private Offering.
Failure to complete the Private Offering may have a material adverse effect on
the Company's plan of operations.
Additionally, a slower than expected rate of acceptance of the Company's planned
products, when available to the public, or lower than expected revenues
generated from the Company's products, would materially adversely affect the
Company's liquidity. The Company would need additional capital sooner than
anticipated. The Company has no commitments for additional financing, and there
can be no assurances that any such additional financing would be available in a
timely manner or, if available, would be on terms acceptable to the Company.
Furthermore, any additional equity financing could be dilutive to our
then-existing shareholders and any debt financing could involve restrictive
covenants with respect to future capital raising activities and other financial
and operational matters.
Capital Expenditures
The Company's anticipated capital expenditures for the period ended December 31,
2000 is expected to consist of development and manufacturing costs for the
Company's proposed products. The Company expects to expend approximately
$200,000 towards initial inventory and samples of its products, $25,000 in
marketing materials, $150,000 in print advertising through fiscal year 2000 in
the development and initial production of its products. Currently, the
Company has insufficient funds for its planned capital expenditures and will
need to raise additional funds either through additional debt or equity
financing. Failure to raise additional funds will adversely affect the
Company's plan of operations.
Page 8
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PART II - OTHER INFORMATION
ITEM 1 - LEGAL PROCEEDINGS
The Company may from time to time be involved in various claims, lawsuits,
disputes with third parties, actions involving allegations of discrimination, or
breach of contract actions incidental to the operation of its business. The
Company is not currently involved in any such litigation that it believes could
have a materially adverse effect on its financial condition or results of
operations.
ITEM 2 - CHANGES IN SECURITIES
In March 2000, the Company issued convertible debentures with a face value
of $1,000,000 under Rule 504 of Regulation D. The debentures are
convertible into common stock at the discretion of the holder at a 25%
discount. As of September 30, 2000, $696,000 of the Debentures have been
converted into 1,176,399 shares of common stock at an average price of $0.592
per share.
In May 2000, the Company initiated a Private Placement of $1,250,000 of its
restricted Common Stock. As of July 31, 2000, the Company has sold a total of
773,037 shares resulting in net proceeds of $667,525. The shares were offered
without general solicitation or advertisement pursuant to Rule 506 of Regulation
D of the Securities Act of 1933.
In July 2000, the Company issued 7,500 shares of its "restricted" Common Stock
to its legal counsel, an accredited investor, in exchange for legal services
rendered. The issuance was conducted without general advertisement or
solicitation pursuant Section 4(2) of the Securities Act of 1933.
In September 2000, the Company issued 380,000 shares of its "restricted" Common
Stock to four accredited consultants in exchange for services rendered. The
issuance was an isolated issuance not involving a public offering and was
conducted without general advertisement or solicitation pursuant Section 4(2)
of the Securities Act of 1933.
ITEM 3 - DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted to the security holders for a vote during the period
covered by this report
ITEM 5 - OTHER INFORMATION
None.
ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K
(A) EXHIBITS
27.1 Financial Data Schedule
(B) REPORTS ON FORM 8-K
None
Page 9
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SIGNATURES
In accordance with the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this Report to be signed on its behalf by the
undersigned, thereunto duly authorized.
SAF-T-HAMMER CORPORATION
By /s/ Mitchell A. Saltz
----------------------------------
Mitchell A. Saltz
President & CFO
Dated: November 15, 2000
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