U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED
MARCH 31, 2001
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM
______________ TO ______________
COMMISSION FILE NUMBER: 000-28177
EVERLERT, INC.
(Exact name of registrant as specified in its charter)
Nevada 91-1886117
(State or jurisdiction of incorporation (I.R.S. Employer
or organization) Identification No.)
1201 East Warner Avenue, Santa Ana, California 92705
(Address of principal executive offices) (Zip Code)
Registrant's telephone number: (714) 966-0710
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, $0.001 Par Value
Indicate by check mark whether the Registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the Registrant was required to
file such reports), and (2) been subject to such filing
requirements for the past 90 days. Yes X No .
As of March 31, 2001, the Registrant had 20,172,477 shares
of common stock issued and outstanding.
Transitional Small Business Disclosure Format (check one):
Yes No X.
TABLE OF CONTENTS
PART I - FINANCIAL INFORMATION PAGE
ITEM 1. FINANCIAL STATEMENTS
BALANCE SHEET AS OF MARCH 31, 2001 3
STATEMENTS OF OPERATIONS FOR THE THREE MONTHS ENDED
MARCH 31, 2001 AND MARCH 31, 2000, AND
FROM INCEPTION THROUGH MARCH 31, 2001 4
STATEMENTS OF CASH FLOWS FOR THE THREE MONTHS ENDED
MARCH 31, 2001 AND MARCH 31, 2000, AND
FROM INCEPTION THROUGH MARCH 31, 2001 5
NOTES TO FINANCIAL STATEMENTS 7
ITEM 2. PLAN OF OPERATION 9
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS 16
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS 16
ITEM 3. DEFAULTS UPON SENIOR SECURITIES 17
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS 17
ITEM 5. OTHER INFORMATION 17
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K 17
SIGNATURE 18
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCAL STATEMENTS.
EVERLERT, INC.
(A Development Stage Company)
BALANCE SHEET
MARCH 31, 2001
(Unaudited)
ASSETS
Current assets
Cash $ 8,177
Total current assets 8,177
Other assets
Acquired technology, net 136,176
Deposits 53,500
189,676
Total assets 197,853
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable 15,504
Accrued liabilities 73,526
Due to related parties 29,315
Notes payable - related party 246,930
Note payable 181,849
Total current liabilities 547,124
Total liabilities 547,124
Commitments and contingencies -
Stockholders' equity
8% cumulative preferred stock; $.001 par
value; 5,000,000 shares authorized, 16,000
shares issued and outstanding 16
Common stock; $.001 par value; 50,000,000
shares authorized, 20,172,477 shares
issued and outstanding 20,172
Additional paid-in capital 1,856,946
Common stock issued for prepaid consulting services (80,000)
Stock subscriptions receivable, net -
Accumulated deficit (2,146,405)
Total stockholders' equity (349,271)
Total liabilities and stockholders' equity 197,853
See Accompanying Notes to Financial Statements
EVERLERT, INC.
(A Development Stage Company)
STATEMENTS OF OPERATIONS
(Unaudited)
For the Three Months Period from
Ended March 31 February 3
1998
(Date of
Inception)
2001 2000 through
(RESTATED) March 31, 2001
Revenue - - -
Operating expenses
Amortization 33,578 34,044 272,352
Bad debt - - 917,625
Research and development - - 137,149
General and administrative 34,334 18,504 741,620
Total operating expenses 67,912 52,548 2,068,746
Net loss from operations (67,912) (52,548) (2,068,746)
Other expense
Interest expense 10,288 8,582 77,659
Loss before provision for income
taxes (78,200) (61,130) (2,146,405)
Provision for income taxes - - -
Net loss (78,200) (61,130) (2,146,405)
Basic and diluted loss per
common share (0.00) (0.00) (0.19)
Basic and diluted weighted
average common shares
outstanding 20,016,921 18,930,067 11,372,426
See Accompanying Notes to Financial Statements
EVERLERT, INC.
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
(Unaudited)
For the Three Months Period from
Ended March 31 February 3
1998
(Date of
Inception)
2001 2000 through
(RESTATED) March 31, 2001
Cash flows from operating
activities:
Net loss (78,200) (61,130) (2,146,405)
Adjustments to reconcile net
loss to net cash used by
operating activities:
Amortization 33,578 34,044 272,352
Bad debt - - 917,625
Interest and financing costs
Satisfied in exchange of
common stock - - 23,375
Stock based compensation 10,000 - 143,900
Changes in operating assets and
liabilities:
Increase in deposits - - (53,500)
Increase (decrease) in
accounts payable (13,540) (4,839) 15,504
Increase in accrued
liabilities 10,288 8,582 73,526
Increase in due to related
parties 11,915 29,315
Net cash used by operating
activities (25,959) (23,343) (724,308)
Cash flows from financing
activities:
Proceeds from issuance of notes
payable - related party - - 246,930
Proceeds from issuance of note
payable - - 217,849
Proceeds from issuance of
common stock 25,000 10,000 68,001
Proceeds from issuance of
preferred stock 5,000 - 121,932
Proceeds from issuance of stock
subscriptions payable - - 77,773
Net cash provided by
financing activities 30,000 10,000 732,485
Net increase (decrease) in cash 4,041 (13,343) 8,177
Cash, beginning of period 4,136 13,837 -
Cash, end of period 8,177 494 8,177
Supplemental disclosure of cash
flow:
Cash paid for interest - - -
Cash paid for income taxes - - -
Schedule of non-cash investing
and financing activities:
12,000,000 common shares issued
in exchange for acquired
technology - - 408,528
300,000 common shares issued
in exchange for stock
subscriptions receivable - - 450,000
300,000 common shares issued
in exchange for stock
subscriptions receivable - 525,000 520,000
Debt satisfied in exchange of
common stock - - 34,000
40,000 common shares issued
for payment of debt - - 2,000
200,000 common shares issued
in exchange for prepaid consulting
services - - 100,000
Subscriptions payable
satisfied through issuance of
15,000 common shares - 3,241 3,241
Subscriptions payable
satisfied through issuance of
344,992 common shares - - 74,532
See Accompanying Notes to Financial Statements
EVERLERT, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
1. BASIS OF PRESENTATION
The accompanying financial statements have been prepared in
accordance with Securities and Exchange Commission requirements
for interim financial statements. Therefore, they do not include
all of the information and footnotes required by generally
accepted accounting principles for complete financial statements.
The financial statements should be read in conjunction with the
Form 10-KSB as of and for the year ended December 31, 2000 of
Everlert, Inc. ("the Company").
The results of operations for the interim periods shown in this
report are not necessarily indicative of results to be expected
for the full year. In the opinion of management, the information
contained herein reflects all adjustments necessary to make the
results of operations for the interim periods a fair statement of
such operation. All such adjustments are of a normal recurring nature.
2. NOTES PAYABLE - RELATED PARTIES
Notes payable - related parties consist of the following at March 31, 2001:
Promissory note payable to Wyvern Technologies, Inc.
(an entity controlled by the president of the Company),
unsecured, bearing an interest rate of 10% and due on
demand. Holder has option to convert unpaid balances,
including accrued interest, into shares of the Company's
common stock at a price of $1.00 per share $ 173,670
Promissory note payable to a director of the Company,
unsecured, bearing an interest rate of 10% and due on
demand. Holder has option to convert unpaid balances,
including accrued interest, into shares of the Company's
common stock at a price of $1.00 per share 68,260
Promissory note payable to a stockholder of the Company,
unsecured, non-interest bearing and due on demand 5,000
$ 246,930
3. GOING CONCERN
The Company incurred a net loss of approximately $78,000 for the
three months ended March 31, 2001, and the Company's current
liabilities exceed its current assets by approximately $539,000
as of March 31, 2001. The Company plans to complete the
development of its voice record and playback smoke detector,
along with the heat sensor Christmas tree ornaments. The Company
will seek additional sources of capital through the issuance of
debt or equity financing, but there can be no assurance the
Company will be successful in accomplishing its objectives.
The ability of the Company to continue as a going concern is
dependent on additional sources of capital and the success of the
Company's plan. The financial statements do not include any
adjustments that might be necessary if the Company is unable to
continue as a going concern.
ITEM 2. PLAN OF OPERATION.
Twelve Month Plan of Operation.
The operational period from February 3, 1998 to December
31, 2000, achieved two main goals for the Corporation: (a)
formation of the organization to pursue the Registrant's business
objective, and (b) obtain sufficient capital to commence initial
operations. The Registrant is a developmental stage enterprise,
and has not generated any revenues to date. The Registrant has
devoted substantially all of its present efforts to developing
its products to be manufactured and marketed and completing its
reporting requirements with the Securities Act of 1934 and its
commencement of trading on the Over-the-Counter Bulletin Board
(the Registrant was delisted from this exchange as of November
18, 1999). In order to qualify for relisting on the Bulletin
Board, the Registrant must comply with the new eligibility rules
of this exchange, which require that all listed companies be
reporting companies. Accordingly the Registrant filed its Form
10-SB Registration Statement with the Securities and Exchange
Commission on November 18, 1999; the Registrant must clear
comments on this Registration Statement to be eligible for relisting.
The Registrant currently has no working capital.
Realization of sales of the Registrant's products during the
fiscal year ending December 31, 2001 is vital to its plan of
operations. The Registrant believes that its initial revenues
will be primarily dependent upon the its ability to cost-
effectively and efficiently develop and market smoke and heat
detectors. The Registrant designates as its priorities for the
first next twelve months of operations as developing and
marketing its products to establish its operations by: (a)
implementing and successfully executing its business and
marketing strategy, including developing and marketing its
products to establish its business in the home safety industry
(this is presently on hold pending the receipt of further
financing for the Registrant; costs are estimated to be
approximately $500,000); (b) developing relationships with
strategic partners (this must await further funding for the
Registrant); (c) responding to competitive developments (the
Registrant has already accomplished this by designing its
detector products to offer features not found in competing
models); and (d) attracting, retaining and motivating qualified
personnel (this must await further funding for the Registrant).
Management of the Registrant believes that the need for
additional capital going forward will be derived somewhat from
earnings generated from the sale of its products. In such case,
it is the intent of the Registrant to seek to raise additional
capital via a private placement offering.
As a result, management of the Registrant plans to advance
funds to the Registrant on an as-needed basis although there is
no definitive or legally binding arrangement to do so. The
Registrant currently has no arrangements or commitments for
accounts and accounts receivable financing. There can be no
assurance that any such financing can be obtained or, if
obtained that it will be on reasonable terms. The Registrant
believes that its initial revenues will be primarily dependent
upon the Registrant's ability to cost effectively and
efficiently develop, manufacture and market smoke detectors and
related home safety products.
The Registrant incurred significant operating expenses for
the operating period February 3, 1998 to March 31, 2001, totaling
$2,068,746. Expenditures were primarily due to costs incurred
for amortization expenses, consulting fees, engineering, and
general and administrative expenses. The Registrant's
consulting expenses were incurred from its public listing process
on the Over-the-Counter Bulletin Board. Due to the significant
operating expenses, as well as interest expense in the amount of
$77,659, the Registrant experienced a net loss of $2,146,405 for
this period. The Registrant anticipated incurring this loss
during the initial commencement of operations until such time
that it will realize revenues from operations in the fiscal year 2001.
The Registrant's ability to distribute, and generate
awareness of, the Registrant's products must be considered in
light of the risks, expenses and difficulties frequently
encountered by companies in their early stage of development,
particularly companies in new markets. There can be no assurance
that the Registrant will be successful in establishing a base of
operations, and the failure to do so could have a material
adverse effect on the Registrant's business, prospects, financial
condition and results of operations.
Risk Factors Connected with Plan of Operation.
(a) Limited Prior Operations, History of Operating Losses, and
Accumulated Deficit May Affect Ability of Registrant to Survive.
The Registrant has had limited prior operations to date.
Since the Registrant's principal activities to date have been
limited to organizational activities, research and development,
and prospect development, it has no record of any revenue-
producing operations. Consequently, there is only a limited
operating history upon which to base an assumption that the
Registrant will be able to achieve its business plans. In
addition, the Registrant has only limited assets. As a result,
there can be no assurance that the Registrant will generate
significant revenues in the future; and there can be no assurance
that the Registrant will operate at a profitable level. If the
Registrant is unable to obtain customers and generate sufficient
revenues so that it can profitably operate, the Registrant's
business will not succeed. Accordingly, the Registrant's
prospects must be considered in light of the risks, expenses and
difficulties frequently encountered in connection with the
establishment of a new business in a highly competitive industry,
characterized by new product introductions.
The Registrant incurred a net loss of $370,268 for the
fiscal year ended December 31, 1999, a net loss of $1,268,621 for
the fiscal year ended December 31, 2000, and a net loss for the
three months ended March 31, 2001 of $78,200. The Registrant's
current liabilities exceed its current assets by $538,947 as of
March 31, 2001. At March 31, 2001, the Registrant had an
accumulated deficit of $2,146,405.
(b) Need for Additional Financing May Affect Operations and Plan.
Since inception, the Registrant has financed operations
primarily through private placements of common stock, and
certain borrowings. In addition to two promissory notes between
the Registrant and its directors (see "Certain Relationships and
Related Transactions"), the Registrant has also borrowed $181,849
from an unrelated party. This promissory is unsecured, due on
demand and payable in one payment including principal and
interest at maturity, bearing an interest rate of 10%.
Additionally, the holder has the option to convert any unpaid
balances, including accrued interest, into shares of the
Registrant's common stock at a price of $1.00 per share.
Current funds available to the Registrant will not be
adequate for it to be competitive in the areas in which it
intends to operate. The Registrant's continued operations, as
well as the implementation of its business plan, therefore will
depend upon its ability to raise additional funds through bank
borrowings, equity or debt financing. The Registrant estimates
that it will need to raise approximately $1,000,000 over the next
twelve months for such purposes. However, adequate funds may not
be available when needed or may not be available on favorable
terms to the Registrant. The ability of the Registrant to
continue as a going concern is dependent on additional sources of
capital and the success of the Registrant's business plan.
Regardless of whether the Registrant's cash assets prove to be
inadequate to meet the Registrant's operational needs, the
Registrant might seek to compensate providers of services by
issuance of stock in lieu of cash.
If funding is insufficient at any time in the future, the
Registrant may not be able to take advantage of business
opportunities or respond to competitive pressures, any of which
could have a negative impact on the business, operating results
and financial condition. In addition, if additional shares were
issued to obtain financing, current shareholders may suffer a
dilutive effect on their percentage of stock ownership in the Registrant.
(c) No Assurance of Protection of Proprietary Rights May Affect
Ability to Manufacture Products.
The Registrant's success and ability to compete will be
dependent in part on the protection of its potential patents,
trademarks, trade names, service marks and other proprietary
rights. The Registrant intends to rely on trade secret and
copyright laws to protect the intellectual property that it
plans to develop, but there can be no assurance that such laws
will provide sufficient protection to the Registrant, that
others will not develop a service that are similar or superior
to the Registrant's, or that third parties will not copy or
otherwise obtain and use the Registrant's proprietary information
without authorization. In addition, certain of the Registrant's
know-how and proprietary technology may not be patentable.
The Registrant may rely on certain intellectual property
licensed from third parties, and may be required to license
additional products or services in the future, for use in the
general operations of its business plan. The Registrant
currently has no licenses for the use of any specific products.
There can be no assurance that these third party licenses will be
available or will continue to be available to the Registrant on
acceptable terms or at all. The inability to enter into and
maintain any of these licenses could have a material adverse
effect on the Registrant's business, financial condition or
operating results.
(d) No Assurance of Meeting Underwriters Laboratories Standard
May Affect Ability to Sell Products.
The agency testing required for Registrant products is
Underwriters Laboratories ("UL"), which is a private testing
organization. The Registrant's products have not yet been
submitted to UL for testing pending final tooling of the
products. Although Registrant management believes that the
Registrant's products meet applicable UL Standard 217, there is a
risk that they may not. This testing is of importance since many
state fire marshals recognize UL testing and listing. The
Registrant's products would not be available to sale in any state
which requires such certification; although they would be in a
number of foreign countries which do not require such certification.
(e) No Assurance of Successful Manufacturing May Affect Ability
of Registrant to Survive.
The Registrant has no experience manufacturing commercial
quantities of products, but management has had experience in this
area. The Registrant presently has no plans for developing an
in-house manufacturing capability. Accordingly, the Registrant
will be dependent upon securing a contract manufacturer or other
third party to manufacture the circuit boards and plastic housing
of the detectors (the final assembly and testing will be done in-
house). There can be no assurance that the terms of any such
arrangement would be favorable enough to permit the products to
compete effectively in the marketplace.
(f) Dependence on Outsourced Manufacturing May Affect Ability to
Bring Products to Market.
The risks of association with outsourced manufacturers are
related to aspects of these firms' operations, finances and
suppliers. The Registrant may suffer losses if the outside
manufacturer fails to perform its obligations to manufacture and
ship the product manufactured. These manufacturers' financial
affairs may also affect the Registrant's ability to obtain
product from these firms in a timely fashion should they fail to
continue to obtain sufficient financing during a period of
incremental growth. The Registrant intends to maintains a strong
relationship with these manufacturers to ensure that any issues
they may face are dealt with in a timely manner.
(g) No Assurance of Market Acceptance May Affect Ability to Sell Products.
There can be no assurance that any products successfully
developed by the Registrant or its corporate collaborators, if
approved for marketing, will ever achieve market acceptance. The
Registrant's products, if successfully developed, may compete
with a number of traditional products manufactured and marketed
by major e-commerce and technology companies, as well as new
products currently under development by such companies and
others. The degree of market acceptance of any products
developed by the Registrant or its corporate collaborators will
depend on a number of factors, including the establishment and
demonstration of the efficacy of the product candidates, their
potential advantage over alternative methods and reimbursement
policies of government and third party payors. There can be no
assurance that the marketplace in general will accept and utilize
any products that may be developed by the Registrant or its
corporate collaborators.
(h) Substantial Competition May Affect Ability to Sell Products.
The Registrant may experience substantial competition in its
efforts to locate and attract customers for its products. Many
competitors in the smoke detector industry have greater
experience, resources, and managerial capabilities than the
Registrant and may be in a better position than the Registrant to
obtain access to attract customers. There are a number of larger
companies which will directly compete with the Registrant. Such
competition could have a material adverse effect on the
Registrant's profitability or viability.
(i) Other External Factors May Affect Viability of Registrant.
The smoke detector industry in general is a speculative
venture necessarily involving some substantial risk. There is no
certainty that the expenditures to be made by the Registrant will
result in commercially profitable business. The marketability of
its products will be affected by numerous factors beyond the
control of the Registrant. These factors include market
fluctuations, and the general state of the economy (including the
rate of inflation, and local economic conditions), which can
affect peoples' spending. Factors which leave less money in the
hands of potential customers of the Registrant will likely have
an adverse effect on the Registrant. The exact effect of these
factors cannot be accurately predicted, but the combination of
these factors may result in the Registrant not receiving an
adequate return on invested capital.
(j) Control by Officers and Directors Over Affairs of
Registrant May Override Wishes of Other Stockholders.
The Registrant's officers and directors beneficially own
approximately 61% of the outstanding shares of the Registrant's
common stock. As a result, such persons, acting together, have
the ability to exercise significant influence over all matters
requiring stockholder approval. Accordingly, it could be
difficult for the investors hereunder to effectuate control over
the affairs of the Registrant. Therefore, it should be assumed
that the officers, directors, and principal common shareholders
who control these voting rights will be able, by virtue of their
stock holdings, to control the affairs and policies of the Registrant.
(k) Loss of Any of Current Management Could Have Adverse Impact
on Business and Prospects for Registrant.
The Registrant's success is dependent upon the hiring and
retention of key personnel. None of the officers or directors
has any employment or non-competition agreement with the
Registrant. Therefore, there can be no assurance that these
personnel will remain employed by the Registrant. Should any of
these individuals cease to be affiliated with the Registrant for
any reason before qualified replacements could be found, there
could be material adverse effects on the Registrant's business and prospects.
In addition, all decisions with respect to the management of
the Registrant will be made exclusively by the officers and
directors of the Registrant. Investors will only have rights
associated with minority ownership interest rights to make
decision which effect the Registrant. The success of the
Registrant, to a large extent, will depend on the quality of the
directors and officers of the Registrant. Accordingly, no person
should invest in the Shares unless he is willing to entrust all
aspects of the management of the Registrant to the officers and directors.
(l) Conflicts of Interest May Affect Ability of Officers and
Directors to Make Decisions in the Best Interests of Registrant.
The officers and directors have other interests to which
they devote time, either individually or through partnerships and
corporations in which they have an interest, hold an office, or
serve on boards of directors, and each will continue to do so
notwithstanding the fact that management time may be necessary to
the business of the Registrant. As a result, certain conflicts of
interest may exist between the Registrant and its officers and/or
directors which may not be susceptible to resolution.
In addition, conflicts of interest may arise in the area of
corporate opportunities which cannot be resolved through arm's
length negotiations. All of the potential conflicts of interest
will be resolved only through exercise by the directors of such
judgment as is consistent with their fiduciary duties to the
Registrant. It is the intention of management, so as to minimize
any potential conflicts of interest, to present first to the
Board of Directors to the Registrant, any proposed investments
for its evaluation.
(m) Limitations on Liability, and Indemnification, of Directors
and Officers May Result in Expenditures by Registrant.
The Registrant's Articles of Incorporation include
provisions to eliminate, to the fullest extent permitted by the
Nevada Revised Statutes as in effect from time to time, the
personal liability of directors of the Registrant for monetary
damages arising from a breach of their fiduciary duties as
directors. The By-Laws of the Registrant include provisions to
the effect that the Registrant may, to the maximum extent
permitted from time to time under applicable law, indemnify any
director, officer, or employee to the extent that such
indemnification and advancement of expense is permitted under
such law, as it may from time to time be in effect. Any
limitation on the liability of any director, or indemnification
of directors, officer, or employees, could result in substantial
expenditures being made by the Registrant in covering any
liability of such persons or in indemnifying them.
(n) Absence of Cash Dividends May Affect Investment Value of
Registrant's Stock.
The Board of Directors does not anticipate paying cash
dividends on the common stock for the foreseeable future and
intends to retain any future earnings to finance the growth of
the Registrant's business. Payment of dividends, if any, will
depend, among other factors, on earnings, capital requirements
and the general operating and financial conditions of the
Registrant as well as legal limitations on the payment of
dividends out of paid-in capital.
(o) No Cumulative Voting May Affect Ability of Some Shareholders
to Influence Mangement of Registrant.
Holders of the shares of common stock of the Registrant are
not entitled to accumulate their votes for the election of
directors or otherwise. Accordingly, the holders of a majority of
the shares present at a meeting of shareholders will be able to
elect all of the directors of the Registrant, and the minority
shareholders will not be able to elect a representative to the
Registrant's board of directors.
(p) No Assurance of Continued Public Trading Market and
Risk of Low Priced Securities May Affect Market Value of
Registrant's Stock.
Since August 25, 1998, there has been only a limited public
market for the common stock of the Registrant. The common stock
of the Registrant is currently quoted on the National Quotation
Bureau's Pink Sheets; the Registrant intends to reapply for
relisting on the Over the Counter Bulletin Board after clearing
comments on this registration statement. As a result, an
investor may find it difficult to dispose of, or to obtain
accurate quotations as to the market value of the Registrant's
securities. In addition, the common stock is subject to the low-
priced security or so called "penny stock" rules that impose
additional sales practice requirements on broker-dealers who sell
such securities. The Securities Enforcement and Penny Stock
Reform Act of 1990 ("Reform Act") requires additional disclosure
in connection with any trades involving a stock defined as a
penny stock (generally, according to recent regulations adopted
by the U.S. Securities and Exchange Commission, any equity
security that has a market price of less than $5.00 per share,
subject to certain exceptions), including the delivery, prior to
any penny stock transaction, of a disclosure schedule explaining
the penny stock market and the risks associated therewith. The
regulations governing low-priced or penny stocks sometimes limit
the ability of broker-dealers to sell the Registrant's common
stock and thus, ultimately, the ability of the investors to sell
their securities in the secondary market.
(q) Failure to Maintain Market Makers May Affect Value of
Registrant's Stock.
If the Registrant is unable to maintain a National
Association of Securities Dealers, Inc. member broker/dealers as
market makers, the liquidity of the common stock could be
impaired, not only in the number of shares of common stock which
could be bought and sold, but also through possible delays in the
timing of transactions, and lower prices for the common stock
than might otherwise prevail. Furthermore, the lack of market
makers could result in persons being unable to buy or sell shares
of the common stock on any secondary market. There can be no
assurance the Registrant will be able to maintain such market
makers.
(r) The Price per Share for Sales of Unregistered
Securities by Registrant Less Than Then Current Market Price.
The price per share of all sales of unregistered securities
by the Registrant, except for 2,000 shares issued in December
1998, have been much lower than the then current market price.
Thus, the Registrant is not receiving cash, assets, or services
which are equivalent to the market price of the stock at the time
it is issued. However, the Board of Directors has made a
determination that the consideration received by the Registrant
in each instance is adequate. The factors that the Board of
Directors considers when determining the price when shares are
issued above are: (a) low liquidity of the common stock on the
trading exchange (low volume and infrequent execution of trades)
and (b) the restricted nature of the shares issued.
Forward Looking Statements.
The foregoing Plan of Operation contains "forward looking
statements" within the meaning of Rule 175 of the Securities Act
of 1933, as amended, and Rule 3b-6 of the Securities Act of 1934,
as amended, including statements regarding, among other items,
the Registrant's business strategies, continued growth in the
Registrant's markets, projections, and anticipated trends in the
Registrant's business and the industry in which it operates. The
words "believe," "expect," "anticipate," "intends," "forecast,"
"project," and similar expressions identify forward-looking
statements. These forward-looking statements are based largely
on the Registrant's expectations and are subject to a number of
risks and uncertainties, certain of which are beyond the
Registrant's control. The Registrant cautions that these
statements are further qualified by important factors that could
cause actual results to differ materially from those in the
forward looking statements, including, among others, the
following: reduced or lack of increase in demand for the
Registrant's products, competitive pricing pressures, changes in
the market price of ingredients used in the Registrant's products
and the level of expenses incurred in the Registrant's
operations. In light of these risks and uncertainties, there can
be no assurance that the forward-looking information contained
herein will in fact transpire or prove to be accurate. The
Registrant disclaims any intent or obligation to update "forward
looking statements."
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
The Registrant is not a party to any material pending legal
proceedings and, to the best of its knowledge, no such action by
or against the Registrant has been threatened.
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS.
Sales of Unregistered Securities.
During the quarter ended March 31, 2001, the Registrant sold
the following securities without registration:
(a) On January 12, 2001, the Registrant sold 1,667 shares
of its preferred stock to one investor, for a total
consideration of $5,000 ($3.00 per share).
(b) On February 26, 2001, the Registrant sold 250,000
shares of common stock to one investor, for a total
consideration of $25,000 ($0.10 per share).
No commissions or fees were paid in connection with these
sales. All of the these sales were undertaken pursuant to the
limited offering exemption from registration under the Securities
Act of 1933 as provided in Regulation D as promulgated by the
U.S. Securities and Exchange Commission. In addition, all the
sales were made only to accredited investors
Use Proceeds.
Not applicable.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
Not Applicable.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
None
ITEM 5. OTHER INFORMATION.
None.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
Exhibits.
Exhibits included or incorporated by reference herein are
set forth in the attached Exhibit Index.
Reports on Form 8-K.
The Registrant filed two reports on Form 8-K were filed
during the first quarter of the fiscal year covered by this Form
10-QSB, on January 25, 2001 and February 7, 2001. Both of these
were amended Form 8-K's which deal with the same subject matter:
(a) The change in certifying accountants for the Registrant
effective on May 11, 2000.
(b) A disagreement with the former accountant with regard
to the valuation assigned by the current accountants for the
Registrant to certain assets purchased from Safe at Home, Inc.
The resolution of this issue is explained in Note 9 to the
audited financial statement of the Registrant contained in the
Form 10-KSB for the fiscal year ended December 31, 2000.
SIGNATURE
Pursuant to the requirements of Section 13 or 15(d) 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.
Everlert, Inc.
Dated: May 18, 2000 By: /s/ James J. Weber
James J. Weber, President
EXHIBIT INDEX
Number Exhibit Description
2 Share Exchange Agreement between the Registrant and
Safe at Home Products, Inc., dated April 1, 1999
(incorporated by reference to Exhibit 2 of the Form 10-
SB/A filed on October 24, 2000).
3.1 Articles of Incorporation (incorporated by reference to
Exhibit 3.1 of the Form 10-SB/A filed on October 24, 2000).
3.2 Certificate of Amendment of Articles of Incorporation
(incorporated by reference to Exhibit 3.2 of the Form
10-SB/A filed on October 24, 2000).
3.3 Bylaws (incorporated by reference to Exhibit 3.3 of the
Form 10-SB/A filed on October 24, 2000).
4 Form of Subscription Agreement used by the Registrant
(incorporated by reference to Exhibit 4 of the Form 10-
SB/A filed on April 6, 2001).
10.1 Convertible Promissory Note between the Registrant and
James T. Marsh, dated March 22, 1999 (incorporated by
reference to Exhibit 10.1 of the Form 10-SB/A filed on
October 24, 2000).
10.2 Convertible Promissory Note between the Registrant and
Wyvern Technologies, Inc., dated March 22, 1999
(incorporated by reference to Exhibit 10.2 of the Form
10-SB/A filed on October 24, 2000).
10.3 Technology Transfer Agreement between NuCo, Inc. and
Safe at Home Products, Inc. (including Non-Competition
Agreement), dated April 1, 1999 (incorporated by
reference to Exhibit 10.3 of the Form 10-SB/A filed on
April 12, 2001).
10.4 Class A Note issued by Rich Bourg Financial, Ltd. in
favor of the Registrant, dated April 5, 1999
(incorporated by reference to Exhibit 10.4 of the Form
10-SB/A filed on April 12, 2001).
10.5 Class A Note issued by Noved Holdings, Inc. in favor of
the Registrant, dated April 5, 1999 (incorporated by
reference to Exhibit 10.5 of the Form 10-SB/A filed on
April 12, 2001).
10.6 Class B Note issued by Rich Bourg Financial, Ltd. in
favor of the Registrant, dated April 5, 1999
(incorporated by reference to Exhibit 10.6 of the Form
10-SB/A filed on April 12, 2001).
10.7 Class B Note issued by Noved Holdings, Inc. in favor of
the Registrant, dated April 5, 1999 (incorporated by
reference to Exhibit 10.7 of the Form 10-SB/A filed on
April 12, 2001).
10.8 Convertible Promissory Note between the Registrant and
Jerry G. Hilbert, dated July 14, 2000 (incorporated by
reference to Exhibit 10.3 of the Form 10-SB/A filed on
October 24, 2000).
16.1 Letter on change in certifying accountant, dated
January 11, 2001 (incorporated by reference to Exhibit
16.1 of the Form 10-SB/A filed on April 12, 2001).
16.2 Letter on change in certifying accountant, dated
January 31, 2001 (incorporated by reference to Exhibit
16 of the Form 8-K filed on February 7, 2001).
21 Subsidiaries of the Registrant (incorporated by
reference to Exhibit 21 of the Form 10-KSB/A filed on
September 8, 2000).