UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-1
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
XTRASAFE, INC.
(Exact name of registrant as specified in its charter)
FLORIDA
(State or other jurisdiction of incorporation or organization)
3490
(Primary Standard Industrial Classification Code Number)
26-2780766
(I.R.S. Employer Identification Number)
600 Lexington Ave., 9th Floor, New York, NY, 10022
Phone (646) 340-9051, Fax (717) 313-0503
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
STATE AGENT AND TRANSFER SYNDICATE, INC.
David N. Williams, Agents and Corporations, Inc,
300 5TH Avenue South, Suite 101-330, Naples, FL 34102
(302) 575-0877
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
As soon as practicable after the effective date of this registration statement
(Approximate date of commencement of proposed sale to the public)
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: [ ]
If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, please check the following box and list
the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If 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. [ ]
Indicate by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting Company. See
the definitions of "large accelerated filer," "accelerated filer" and "smaller
reporting Company" in Rule 12b-2 of the Exchange Act. (Check one)
Large accelerated filer [ ] Accelerated filer [ ]
Non-accelerated filer [ ] Smaller reporting Company [X]
(Do not check if a smaller reporting Company)
CALCULATION OF REGISTRATION FEE
Title of Each Class Proposed Maximum Proposed Maximum Amount of
of Securities to be Amount to be Offering Price Aggregate Offering Registration
Registered Registered Per Unit(1) Price Fee(2)
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Common Stock by Company 3,000,000 $0.01 $30,000 $3.14
par value $0.001
(1) The offering price has been arbitrarily determined by the Company and bears
no relationship to assets, earnings, or any other valuation criteria. No
assurance can be given that the shares offered hereby will have a market value
or that they may be sold at this, or at any price.
(2) Estimated solely for the purpose of calculating the registration fee based
on Rule 457 (o).
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE 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.
XTRASAFE, INC.
3,000,000 SHARES OF COMMON STOCK
Prior to this registration, there has been no public trading market for the
common stock of XTRASAFE, INC. ("XtraSafe") and it is not presently traded on
any market or securities exchange. 3,000,000 shares of common stock are being
offered for sale by the Company to the public.
The price per share will be $0.01. XtraSafe intends to sell all shares and will
receive all proceeds from the sale. The Company may not sell these securities
until the registration statement filed with the Securities and Exchange
Commission is effective.
INVESTING IN OUR SECURITIES INVOLVES A HIGH DEGREE OF RISK. SEE "RISK FACTORS"
BEGINNING ON PAGE 9 OF THIS PROSPECTUS FOR A DISCUSSION OF INFORMATION THAT
SHOULD BE CONSIDERED IN CONNECTION WITH AN INVESTMENT IN OUR SECURITIES.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or passed upon the
adequacy or accuracy of the prospectus. Any representation to the contrary is a
criminal offense.
This offering is self-underwritten. No underwriter or person has been engaged to
facilitate the sale of shares of common stock in this offering. There are no
underwriting commissions involved in this offering.
The Company is not required to sell any specific number or dollar amount of
securities but will use its best efforts to sell the securities offered.
The information in this prospectus is not complete and may be changed. We may
not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an offer
to sell these securities and is not soliciting an offer to buy these securities
in any state where the offer or sale is not permitted.
The date of this prospectus is October __, 2008.
TABLE OF CONTENTS
Page No.
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Summary Information .................................................... 1
Risk Factors ........................................................... 3
Use of Proceeds ........................................................ 10
Determination of Offering Price ........................................ 11
Dilution ............................................................... 11
Plan of Distribution ................................................... 13
Description of Securities .............................................. 15
Interests of Named Experts and Counsel ................................. 16
Business Development ................................................... 16
Legal Proceedings ...................................................... 21
Market for Common Equity and Related Stockholder Matters ............... 21
Financial Statements ................................................... F-1
Management's Discussion and Analysis of Financial Condition and
results of Operations ................................................ 22
Changes in and Disagreements With Accountants on Accounting and
Financial Disclosure ................................................. 23
Code of Business Conduct and Ethics .................................... 23
Directors and Executive Officers ....................................... 23
Executive Compensation ................................................. 24
Security Ownership of Certain Beneficial Owners and Management ......... 26
Certain Relationships and Related transactions ......................... 27
Disclosure of Commission Position on Indemnification for Securities
Act Liabilities ...................................................... 27
DEALER PROSPECTUS DELIVERY OBLIGATION
Until , (90 days after the effective date of this prospectus) all dealers that
effect transactions in these securities, whether or not participating in this
offering, may be required to deliver a prospectus. This is in addition to the
dealers' obligation to deliver a prospectus when acting as underwriters and with
respect to their unsold allotments or subscriptions.
SUMMARY INFORMATION
This summary provides an overview of selected information contained elsewhere in
this prospectus. It does not contain all the information you should consider
before making a decision to purchase the shares we are offering. You should very
carefully and thoroughly read the more detailed information in this prospectus
and review our financial statements contained herein.
SUMMARY INFORMATION ABOUT XTRASAFE, INC.
XTRASAFE, INC. ("XtraSafe", "we", "the Company") was incorporated in the State
of Florida as a for-profit Company on June 5, 2008 and established a fiscal year
end of August 31. We are a development-stage Company. We intend to market and
sell an electronic safe system, and through wholesale distribution channels and
directly to institutional buyers (Hospitals, Colleges and Universities, and
Assisted Living Facilities) throughout the United States.
Xtrasafe intends to create an electronic modular safe system. The company
intends to modify individual electronic safes that can be joined together to
create banks of safes. Safes will be made of a steel construction; the entry
system for the safe will be imbedded into the door. There will be 5 types of
entry systems. These include the keyboard, the magnetic card, the electronic
key, the biometric key, or a solid door with an encrypted RFDI chip.
Our business and registered office is located at 600 Lexington Ave, 9th Floor,
New York, NY, 10022, our telephone number is (646) 340-9051.
As of August 31, 2008, XtraSafe had raised $9,000 through the sale of its common
stock. There is $8,880 of cash on hand in the corporate bank account. The
Company currently has liabilities of $0 represented by expenses accrued during
its start-up. In addition, the Company anticipates incurring costs associated
with this offering totaling approximately $5,500. As of the date of this
prospectus, we have not generated any revenue from our business operations. The
following financial information summarizes the more complete historical
financial information found in the audited financial statements of the Company
filed with this prospectus.
SUMMARY OF THE OFFERING BY THE COMPANY
XtraSafe has 9,000,000 shares of common stock issued and outstanding and is
registering an additional 3,000,000 shares for offering to the public. The
Company will endeavor to sell all 3,000,000 shares of common stock after this
registration statement becomes effective. The price at which the Company is
offering these shares is fixed at $0.01 per share for the duration of the
offering. There is no arrangement to address the possible effect of the offering
on the price of the stock. XtraSafe will receive all proceeds from the sale of
the common stock.
- --------------------------------------------------------------------------------
Securities being offered by the 3,000,000 shares of common stock are offered
Company, common stock, par value by the Company.
$0.001
- --------------------------------------------------------------------------------
Offering price per share by the A price, if and when the Company sells the
Company. shares of common stock, is set at $0.01.
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1
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Number of shares outstanding 9,000,000 common shares are currently issued
before the offering of common and outstanding.
shares.
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Number of shares outstanding 12,000,000 common shares will be issued and
after the offering of common outstanding after this offering is
shares. completed.
- --------------------------------------------------------------------------------
Minimum number of shares to be None.
sold in this offering
- --------------------------------------------------------------------------------
Market for the common shares There is no public market for the common
shares. The price per share is $0.01.
- --------------------------------------------------------------------------------
XtraSafe may not be able to meet the
requirement for a public listing or
quotation of its common stock. Further, even
if XtraSafe's common stock is quoted or
granted a listing, a market for the common
shares may not develop.
- --------------------------------------------------------------------------------
Use of proceeds XtraSafe will receive all proceeds from the
sale of the common stock. If all 3,000,000
common shares being offered are sold, the
total gross proceeds to the Company would be
$30,000. The Company intends to use the
proceeds from this offering (i) to develop
our products, creating the prototypes
$15,000, (ii) to initiate the Company's
sales and marketing campaign, estimated at
$2,000, (iii) cover the equipment, materials
and storage costs estimated to be $5,000
(iv) administrative expenses estimated to
cost $2,500. The expenses of this offering,
including the preparation of this prospectus
and the filing of this registration
statement, estimated at $5,500 are being
paid for by XtraSafe.
- --------------------------------------------------------------------------------
Termination of the offering The offering will conclude when all
3,000,000 shares of common stock have been
sold, or 90 days after this registration
statement becomes effective with the
Securities and Exchange Commission. XtraSafe
may at its discretion extend the offering
for an additional 90 days.
- --------------------------------------------------------------------------------
Terms of the offering The Company's president and sole director
will sell the common stock upon
effectiveness of this registration
statement.
- --------------------------------------------------------------------------------
2
You should rely only upon the information contained in this prospectus. XtraSafe
has not authorized anyone to provide you with information different from that
which is contained in this prospectus. The Company is offering to sell shares of
common stock and seeking offers only in jurisdictions where offers and sales are
permitted. The information contained herein is accurate only as of the date of
this prospectus, regardless of the time of delivery of this prospectus or of any
sale of the common stock.
SUMMARY OF FINANCIAL INFORMATION
The following summary financial information for the periods stated summarizes
certain information from our financial statements included elsewhere in this
prospectus. You should read this information in conjunction with Management's
Plan of Operations, the financial statements and the related notes thereto
included elsewhere in this prospectus.
BALANCE SHEET AS OF AUGUST 31, 2008
------------- ---------------------
Total Assets $8,880
Total Liabilities $ 0
Shareholder's Equity $8,880
OPERATING DATA JUNE 5, 2008 (INCEPTION) THROUGH AUGUST 31, 2008
-------------- ------------------------------------------------
Revenue $ 0.00
Net Loss $ 120
Net Loss Per Share $ 0.00
As indicated in the financial statements accompanying this prospectus, XtraSafe
has had no revenue to date and has incurred only losses since its inception. The
Company has had no operations and has been issued a "going concern" opinion from
their auditors, based upon the Company's reliance upon the sale of our common
stock as the sole source of funds for our future operations.
RISK FACTORS
Please consider the following risk factors and other information in this
prospectus relating to our business and prospects before deciding to invest in
our common stock.
This offering and any investment in our common stock involves a high degree of
risk. You should carefully consider the risks described below and all of the
information contained in this prospectus before deciding whether to purchase our
common stock. If any of the following risks actually occur, our business,
financial condition and results of operations could be harmed. The trading price
of our common stock could decline due to any of these risks, and you may lose
all or part of your investment.
The Company considers the following to be the material risks for an investor
regarding this offering. XtraSafe should be viewed as a high-risk investment and
speculative in nature. An investment in our common stock may result in a
complete loss of the invested amount. Please consider the following risk factors
before deciding to invest in our common stock.
3
AUDITOR'S GOING CONCERN
- -----------------------
THERE IS SUBSTANTIAL UNCERTAINTY ABOUT THE ABILITY OF XTRASAFE TO CONTINUE ITS
OPERATIONS AS A GOING CONCERN
In their audit report dated August 31, 2008; our auditors have expressed an
opinion that substantial doubt exists as to whether we can continue as an
ongoing business. Because our officers may be unwilling or unable to loan or
advance any additional capital to XtraSafe, Inc. we believe that if we do not
raise additional capital within 12 months of the effective date of this
registration statement, we may be required to suspend or cease the
implementation of our business plans. Due to the fact that there is no minimum
investment and no refunds on sold shares, you may be investing in a Company that
will not have the funds necessary to develop its business strategies. As such we
may have to cease operations and you could lose your entire investment. See the
"August 31, 2008 Audited Financial Statements - Auditors Report". Because the
Company has been issued an opinion by its auditors that substantial doubt exists
as to whether it can continue as a going concern it may be more difficult to
attract investors.
RISKS RELATED TO OUR FINANCIAL CONDITION
- ----------------------------------------
SINCE XTRASAFE, INC. ANTICIPATES OPERATING EXPENSES WILL INCREASE PRIOR TO
EARNING REVENUE, IT MAY NEVER ACHIEVE PROFITABILITY
The Company anticipates an increase in its operating expenses, without realizing
any revenues from the sale of its products. Within the next 12 months, the
Company will have costs related to (i) creating a product line (prototypes),
(ii) initiation of the Company's sales and marketing campaign, (iii) purchase of
equipment, materials and storage, (iv) administrative expenses and (v) the
expenses of this offering.
There is no history upon which to base any assumption as to the likelihood that
the Company will prove successful. We cannot provide investors with any
assurance that our products will attract customers; generate any operating
revenue or ever achieve profitable operations. If we are unable to address these
risks, there is a high probability that our business can fail, which will result
in the loss of your entire investment.
OUR BUSINESS WILL FAIL IF WE DO NOT OBTAIN ADEQUATE FINANCING, RESULTING IN THE
COMPLETE LOSS OF YOUR INVESTMENT
If we are not successful in earning revenue once we have started our sale
activities, we may require additional financing to sustain our business
operations. Currently, we do not have any arrangements for financing and can
provide no assurances to investors that we will be able to obtain any when
required. Obtaining additional financing would be subject to a number of
factors, including the Company's sales results. These factors may have an affect
on the timing, amount, terms or conditions of additional financing and make such
additional financing unavailable to us. See "Description of Business."
No assurance can be given that the Company will obtain access to capital markets
in the future or that adequate financing to satisfy the cash requirements of
implementing our business strategies will be available on acceptable terms. The
inability of the Company to gain access to capital markets or obtain acceptable
financing could have a material adverse effect upon the results of its
operations and its financial conditions.
4
RISKS RELATED TO THIS OFFERING
- ------------------------------
BECAUSE THERE IS NO PUBLIC TRADING MARKET FOR OUR COMMON STOCK, YOU MAY NOT BE
ABLE TO RESELL YOUR STOCK
There is currently no public trading market for our common stock. Therefore,
there is no central place, such as a stock exchange or electronic trading
system, to resell your shares. If you do want to resell your shares, you will
have to locate a buyer and negotiate your own sale.
The offering price and other terms and conditions relative to the Company's
shares have been arbitrarily determined by the Company and do not bear any
relationship to assets, earnings, book value or any other objective criteria of
value. Additionally, as the Company was formed recently and has only a limited
operating history and no earnings, the price of the offered shares is not based
on its past earnings and no investment banker, appraiser or other independent
third party has been consulted concerning the offering price for the shares or
the fairness of the offering price used for the shares.
INVESTING IN THE COMPANY IS HIGHLY SPECULATIVE AND COULD RESULT IN THE ENTIRE
LOSS OF YOUR INVESTMENT
Purchasing the offered shares is highly speculative and involves significant
risk. The offered shares should not be purchased by any person who cannot afford
to lose their entire investment. The business objectives of the Company are also
speculative, and it is possible that we would be unable to accomplish them. The
Company's shareholders may be unable to realize a substantial or any return on
their purchase of the offered shares and may lose their entire investment. For
this reason, each prospective purchaser of the offered shares should read this
prospectus and all of its exhibits carefully and consult with their attorney,
business and/or investment advisor.
INVESTING IN OUR COMPANY MAY RESULT IN AN IMMEDIATE LOSS BECAUSE BUYERS WILL PAY
MORE FOR OUR COMMON STOCK THAN THE PRO RATA PORTION OF THE ASSETS ARE WORTH
The Company has only been recently formed and has only a limited operating
history and no earnings, therefore, the price of the offered shares is not based
on any data. The offering price and other terms and conditions regarding the
Company's shares have been arbitrarily determined and do not bear any
relationship to assets, earnings, book value or any other objective criteria of
value. No investment banker, appraiser or other independent third party has been
consulted concerning the offering price for the shares or the fairness of the
offering price used for the shares.
The arbitrary offering price of $0.01 per common share as determined herein is
substantially higher than the net tangible book value per share of the Company's
common stock. XtraSafe's assets do not substantiate a share price of $0.01. This
premium in share price applies to the terms of this offering and does not
attempt to reflect any forward looking share price subsequent to the Company
obtaining a listing on any exchange, or becoming quoted on the OTC Bulletin
Board.
5
BECAUSE THE COMPANY HAS 100,000,000 AUTHORIZED SHARES, MANAGEMENT COULD ISSUE
ADDITIONAL SHARES, DILUTING THE CURRENT SHARE HOLDERS' EQUITY
The Company has 100,000,000 authorized shares, of which only 9,000,000 are
currently issued and outstanding and only 12,000,000 will be issued and
outstanding after this offering terminates. The Company's management could,
without the consent of the existing shareholders, issue substantially more
shares, causing a large dilution in the equity position of the Company's current
shareholders. Additionally, large share issuances would generally have a
negative impact on the Company's share price. It is possible that, due to
additional share issuance, you could lose a substantial amount, or all, of your
investment.
AS WE DO NOT HAVE AN ESCROW OR TRUST ACCOUNT WITH SUBSCRIPTIONS FOR INVESTORS,
IF WE FILE FOR OR ARE FORCED INTO BANKRUPTCY PROTECTION, THEY WILL LOSE THE
ENTIRE INVESTMENT
Invested funds for this offering will not be placed in an escrow or trust
account and if we file for bankruptcy protection or a petition for involuntary
bankruptcy is filed by creditors against us, your funds will become part of the
bankruptcy estate and administered according to the bankruptcy laws. As such,
you will lose your investment and your funds will be used to pay creditors.
THE COMPANY DOES NOT ANTICIPATE PAYING DIVIDENDS IN THE FORESEEABLE FUTURE, SO
THERE WILL BE LESS WAYS IN WHICH YOU CAN MAKE A GAIN ON ANY INVESTMENT IN THIS
COMPANY
We do not anticipate paying dividends on our common stock in the foreseeable
future, but plan rather to retain earnings, if any, for the operation growth and
expansion of our business.
AS WE MAY BE UNABLE TO CREATE OR SUSTAIN A MARKET FOR OUR SHARES, THEY MAY BE
EXTREMELY ILLIQUID
If no market develops, the holders of our common stock may find it difficult or
impossible to sell their shares. Further, even if a market develops, our common
stock will be subject to fluctuations and volatility and the Company cannot
apply directly to be quoted on the NASD Over-The-Counter Bulletin Board (OTC).
Additionally, the stock may be listed or traded only to the extent that there is
interest by broker-dealers in acting as a market maker in the Company's stock.
Despite the Company's best efforts, it may not be able to convince any
broker/dealers to act as market-makers and make quotations on the OTC Bulletin
Board. The Company may consider pursuing a listing on the OTCBB after this
registration becomes effective and the Company has completed its offering.
IN THE EVENT THAT THE COMPANY'S SHARES ARE TRADED, THEY MAY TRADE UNDER $5.00
PER SHARE AND THUS WILL BE A PENNY STOCK. TRADING IN PENNY STOCKS HAS MANY
RESTRICTIONS AND THESE RESTRICTIONS COULD SEVERELY AFFECT THE PRICE AND
LIQUIDITY OF THE COMPANY'S SHARES
In the event that our shares are traded, and our stock trades below $5.00 per
share, our stock would be known as a "penny stock", which is subject to various
regulations involving disclosures to be given to you prior to the purchase of
any penny stock. The U.S. Securities and Exchange Commission (the "SEC") has
adopted regulations which generally define a "penny stock" to be any equity
security that has a market price of less than $5.00 per share, subject to
6
certain exceptions. Depending on market fluctuations, our common stock could be
considered to be a "penny stock". A penny stock is subject to rules that impose
additional sales practice requirements on broker/dealers who sell these
securities to persons other than established customers and accredited investors.
For transactions covered by these rules, the broker/dealer must make a special
suitability determination for the purchase of these securities. In addition, he
must receive the purchaser's written consent to the transaction prior to the
purchase. He must also provide certain written disclosures to the purchaser.
Consequently, the "penny stock" rules may restrict the ability of broker/dealers
to sell our securities, and may negatively affect the ability of holders of
shares of our common stock to resell them. These disclosures require you to
acknowledge that you understand the risks associated with buying penny stocks
and that you can absorb the loss of your entire investment. Penny stocks are low
priced securities that do not have a very high trading volume. Consequently, the
price of the stock is often volatile and you may not be able to buy or sell the
stock when you want to.
SINCE OUR SOLE OFFICER AND DIRECTOR CURRENTLY OWNS 100% OF THE OUTSTANDING
COMMON STOCK, INVESTORS MAY FIND THAT HIS DECISIONS ARE CONTRARY TO THEIR
INTERESTS
The Company's sole officer and director owns 100% of the outstanding shares and
will own 75% after this offering is completed. As a result, he may have control
of the Company and be able to choose all of our directors. His interests may
differ from the ones of other stockholders. Factors that could cause his
interests to differ from the other stockholders include the impact of corporate
transactions on the timing of business operations and his ability to continue to
manage the business given the amount of time he is able to devote to the
Company.
All decisions regarding the management of the Company's affairs will be made
exclusively by him. Purchasers of the offered shares may not participate in the
management of the Company and, therefore, are dependent upon his management
abilities. The only assurance that the shareholders of the Company, including
purchasers of the offered shares, have that the Company's sole officer and
director will not abuse his discretion in executing the Company's business
affairs, is his fiduciary obligation and business integrity. Such discretionary
powers include, but are not limited to, decisions regarding all aspects of
business operations, corporate transactions and financing. Accordingly, no
person should purchase the offered shares unless willing to entrust all aspects
of management to the sole officer and director, or his successors. Potential
purchasers of the offered shares must carefully evaluate the personal experience
and business performance of the Company's management.
RISKS RELATED TO INVESTING IN OUR COMPANY
- -----------------------------------------
OUR LACK OF AN OPERATING HISTORY GIVES NO ASSURANCE THAT OUR FUTURE OPERATIONS
WILL RESULT IN PROFITABLE REVENUES, WHICH COULD RESULT IN THE SUSPENSION OR END
OF OUR OPERATIONS
We were incorporated on June 5, 2008 and we have not realized any revenues to
date. We have very little operating history upon which an evaluation of our
future success or failure can be made. Our ability to achieve and maintain
profitability and positive cash flow is dependent upon the completion of this
offering and our ability to generate revenues through sales of our products.
7
Based upon current plans, we expect to incur operating losses in future periods
because we will be incurring expenses and not generating revenues. We cannot
guarantee that we will be successful in generating revenues in the future.
Failure to generate revenues will cause us to go out of business.
OUR OPERATING RESULTS MAY PROVE UNPREDICTABLE
Our operating results are likely to fluctuate significantly in the future due to
a variety of factors, many of which we have no control. Factors that may cause
our operating results to fluctuate significantly include: our inability to
generate enough working capital from future equity sales; the level of
commercial acceptance by the public of our products; fluctuations in the demand
for electronic safes; the amount and timing of operating costs and capital
expenditures relating to expansion of our business, operations and
infrastructure and general economic conditions.
If realized, any of these risks could have a material adverse effect on our
business, financial condition and operating results.
BECAUSE WE ARE SMALL AND DO NOT HAVE MUCH CAPITAL, WE MUST LIMIT OUR MARKETING
ACTIVITIES. AS A RESULT, OUR SALES MAY NOT BE ENOUGH TO OPERATE PROFITABLY. IF
WE DO NOT MAKE A PROFIT, WE MAY HAVE TO SUSPEND OR CEASE OPERATIONS
Due to the fact we are small and do not have much capital, we must limit our
marketing activities to potential customers having the likelihood of purchasing
our products. We intend to generate revenue through the sale of our products.
Because we will be limiting the scope of our marketing activities, we may not be
able to generate enough sales to operate profitably. If we cannot operate
profitably, we may have to suspend or cease operations.
THE COMPANY'S SOLE OFFICER AND DIRECTOR MAY NOT BE IN A POSITION TO DEVOTE A
MAJORITY OF HIS TIME TO THE COMPANY, WHICH MAY RESULT IN PERIODIC INTERRUPTIONS
AND EVEN BUSINESS FAILURE
Mr. Zion, our sole officer and director, has other business interests and
currently devotes approximately 5-10 hours per week to our operations. Our
operations may be sporadic and occur at times which are not convenient to Mr.
Zion, which may result in periodic interruptions or suspensions of our business
plan. If the demands of the Company's business require the full business time of
our sole officer and director, he is prepared to adjust his timetable to devote
more time to the Company. However, he may not be able to devote sufficient time
to the management of the business, which may result in periodic interruptions in
implementing the Company's plans in a timely manner. Such delays could have a
significant negative effect on the success of the business.
KEY MANAGEMENT PERSONNEL MAY LEAVE THE COMPANY WHICH COULD ADVERSELY AFFECT THE
ABILITY OF THE COMPANY TO CONTINUE OPERATIONS
Because the Company is entirely dependent on the efforts of its sole officer and
director, his departure or the loss of other key personnel in the future, could
have a material adverse effect on the business. The Company believes that all
commercially reasonable efforts have been made to minimize the risks attendant
with the departure by key personnel from service. However, there is no guarantee
that replacement personnel, if any, will help the Company to operate profitably.
The Company does not maintain key person life insurance on its sole officer and
director.
8
IF THE COMPANY IS DISSOLVED, IT IS UNLIKELY THAT THERE WILL BE SUFFICIENT ASSETS
REMAINING TO DISTRIBUTE TO THE SHAREHOLDERS
In the event of the dissolution of the Company, the proceeds realized from the
liquidation of its assets, if any, will be used primarily to pay the claims of
the Company's creditors, if any, before there can be any distribution to the
shareholders. In that case, the ability of purchasers of the offered shares to
recover all or any portion of the purchase price for the offered shares will
depend on the amount of funds realized and the claims to be satisfied there
from.
RISKS RELATED TO THE COMPANY'S MARKET AND STRATEGY
- --------------------------------------------------
WE ARE A NEW COMPANY WITH NO OPERATING HISTORY AND WE FACE A HIGH RISK OF
BUSINESS FAILURE WHICH WOULD RESULT IN THE LOSS OF YOUR INVESTMENT
We are a development stage Company formed recently to carry out the activities
described in this prospectus and thus have only a limited operating history upon
which an evaluation of its prospects can be made. We were incorporated on June
5, 2008 and to date have been involved primarily in the design of our business
plan and we have no business operations. Thus, there is no internal or
industry-based historical financial data upon which to estimate our planned
operating expenses.
The Company expects that its results of operations may also fluctuate
significantly in the future as a result of a variety of market factors
including, among others, the entry of new competitors offering a similar
product; the availability of motivated and qualified personnel; the initiation,
renewal or expiration of our customer base; pricing changes by the Company or
its competitors, specific economic conditions in the security and electronic
safe industries and general economic conditions. Accordingly, our future sales
and operating results are difficult to forecast.
As of the date of this prospectus, we have earned no revenue. Failure to
generate revenue will cause us to go out of business, which could result in the
complete loss of your investment.
WE MAY BE UNABLE TO GAIN ANY SIGNIFICANT MARKET ACCEPTANCE FOR OUR PRODUCTS OR
ESTABLISH A SIGNIFICANT MARKET PRESENCE
The Company's growth strategy is substantially dependent upon its ability to
market its products successfully to prospective clients. However, its planned
services may not achieve significant acceptance. Such acceptance, if achieved,
may not be sustained for any significant period of time. Failure of the
Company's services to achieve or sustain market acceptance could have a material
adverse effect on our business, financial conditions and the results of our
operations.
MANAGEMENT'S ABILITY TO IMPLEMENT THE BUSINESS STRATEGY
Although the Company intends to pursue a strategy of marketing its products
throughout North America, our business success depends on a number of factors.
These include: our ability to establish a significant customer base and maintain
favorable relationships with customers and partners; obtain adequate business
financing on favorable terms in order to buy all the necessary equipment and
9
materials; development and maintenance of appropriate operating procedures,
policies and systems; hire, train and retain skilled employees. The inability of
the Company to manage any or all of these factors could impair its ability to
implement its business strategy successfully, which could have a material
adverse effect on the results of its operations and its financial condition.
XTRASAFE, INC. MAY BE UNABLE TO MANAGE ITS FUTURE GROWTH
The Company expects to experience continuous growth for the foreseeable future.
Its growth may place a significant strain on management, financial, operating
and technical resources. Failure to manage this growth effectively could have a
material adverse effect on the Company's financial condition or the results of
its operations.
RISKS RELATED TO INVESTING IN OUR BUSINESS
- ------------------------------------------
OUR PRODUCT MAY NOT BE ABLE TO DISTINGUISH ITSELF IN THE MARKET
Our product will target the electronic safe market in North America. If we are
unable to demonstrate clearly the concept that makes our products unique to
potential customers, they may think that it is only another electronic safe. If
the public doesn't acknowledge the singularity and innovation of our products,
we may be unable to attract enough clients.
THE COMPANY MAY BE UNABLE TO MAKE NECESSARY ARRANGEMENTS AT ACCEPTABLE COST
Because we are a small business, with limited assets, we are not in a position
to assume unanticipated costs and expenses. If we have to make changes in the
Company structure or are faced with circumstances that are beyond our ability to
afford, we may have to suspend operations or cease operations entirely which
could result in a total loss of your investment.
BECAUSE WE HAVEN'T BUILT A PROTOTYPE, OUR PRODUCTS MAY NOT WORK PROPERLY AND/OR
THE PRODUCTION COST CAN EXCEED EXPECTATIONS
We have not built a prototype of our modular safe system yet; therefore, we
don't know the exact cost of production. In the case of a higher than expected
cost of production, we won't be able to offer our products at a reasonable
price. Furthermore, we may find problems in the manufacturing process and/or
product function. If we are unable to develop our products, we will have to
cease our operations, resulting in the complete loss of your investment.
GENERAL COMPETITION
The Company has identified a market opportunity for our products. Competitors
may enter this sector with superior products, services, conditions and/or
benefits. This would infringe on our customer base, have an adverse affect upon
our business and the results of our operations.
USE OF PROCEEDS
Our offering is being made on a self-underwritten basis: no minimum number of
shares must be sold in order for the offering to proceed. The offering price per
share is $0.01. The following table sets forth the uses of proceeds assuming the
sale of 25%, 50%, 75% and 100%, respectively, of the securities offered for sale
by the Company.
10
IF 25% OF IF 50% OF IF 75% OF IF 100% OF
SHARES SOLD SHARES SOLD SHARES SOLD SHARES SOLD
----------- ----------- ----------- -----------
GROSS PROCEEDS FROM THIS OFFERING $ 7,500 $15,000 $22,500 $30,000
======= ======= ======= =======
LESS: OFFERING EXPENSES
Accounting fees 2,500 2,500 2,500 2,500
Legal fees 1,500 1,500 1,500 1,500
Printing 300 300 300 300
Transfer Agent 1,200 1,200 1,200 1,200
------- ------- ------- -------
TOTAL $ 5,500 $ 5,500 $ 5,500 $ 5,500
LESS: PRODUCT DEVELOPMENT
Prototype development: - - - -
------- ------- ------- -------
TOTAL $ 750 4,500 $10,250 $15,000
LESS: SALES & MARKETING
Website/Hosting/Online advertising: - - - -
Expositions/Trade shows: - - - -
Advertising: - - - -
------- ------- ------- -------
TOTAL $ 500 $ 1,000 $ 1,500 $ 2,000
LESS: STORAGE
Rent: - - - -
------- ------- ------- -------
TOTAL $ 250 $ 1,500 $ 3,750 $ 5,000
LESS: ADMINISTRATION EXPENSES
Office supplies, Stationery,
Telephone, Internet: - - - -
------- ------- ------- -------
TOTAL $ 500 $ 500 $ 1,500 $ 2,500
======= ======= ======= =======
TOTALS $ 7,500 $15,000 $22,500 $30,000
The above figures represent only estimated costs.
DETERMINATION OF OFFERING PRICE
As there is no established public market for our shares, the offering price and
other terms and conditions relative to our shares have been arbitrarily
determined by XtraSafe and do not bear any relationship to assets, earnings,
book value, or any other objective criteria of value. In addition, no investment
banker, appraiser, or other independent third party has been consulted
concerning the offering price for the shares or the fairness of the offering
price used for the shares.
DILUTION
The price of the current offering is fixed at $0.01 per share. This price is
significantly greater than the price paid by the Company's sole officer and
director for common equity since the Company's inception on June 5, 2008. The
Company's sole officer and director paid $0.001 per share, a difference of
$0.009 per share lower than the share price in this offering.
11
Dilution represents the difference between the offering price and the net
tangible book value per share immediately after completion of this offering. Net
tangible book value is the amount that results from subtracting total
liabilities and intangible assets from total assets. Dilution arises mainly as a
result of our arbitrary determination of the offering price of the shares being
offered. Dilution of the value of the shares you purchase is also a result of
the lower book value of the shares held by our existing stockholders. The
following tables compare the differences of your investment in our shares with
the investment of our existing stockholders.
EXISTING STOCKHOLDERS IF ALL OF THE SHARES ARE SOLD
- ---------------------------------------------------
Price per share ............................................... $ 0.01
Net tangible book value per share before offering ............. $ 0.0010
Potential gain to existing shareholders ....................... $ 30,000
Net tangible book value per share after offering .............. $ 0.0033
Increase to present stockholders in net tangible book value per
share after offering ........................................ $ 0.0022
Capital contributions ......................................... $ 30,000
Number of shares outstanding before the offering .............. 9,000,000
Number of shares after offering held by existing stockholders . 9,000,000
Percentage of ownership after offering ........................ 75.0%
PURCHASERS OF SHARES IN THIS OFFERING IF ALL SHARES SOLD
- --------------------------------------------------------
Price per share ............................................... $ 0.01
Dilution per share ............................................ $ 0.0067
Capital contributions ......................................... $ 30,000
Percentage of capital contributions ........................... 76.9%
Number of shares after offering held by public investors ...... 3,000,000
Percentage of ownership after offering ........................ 25.0%
PURCHASERS OF SHARES IN THIS OFFERING IF 75% OF SHARES SOLD
- -----------------------------------------------------------
Price per share ............................................... $ 0.01
Dilution per share ............................................ $ 0.0072
Capital contributions ......................................... $ 22,500
Percentage of capital contributions ........................... 71.4%
Number of shares after offering held by public investors ...... 2,250,000
Percentage of ownership after offering ........................ 18.75%
PURCHASERS OF SHARES IN THIS OFFERING IF 50% OF SHARES SOLD
- -----------------------------------------------------------
Price per share ............................................... $ 0.01
Dilution per share ............................................ $ 0.0079
Capital contributions ......................................... $ 15,000
Percentage of capital contributions ........................... 62.5%
Number of shares after offering held by public investors ...... 1,500,000
Percentage of ownership after offering ........................ 12.5%
PURCHASERS OF SHARES IN THIS OFFERING IF 25% OF SHARES SOLD
- -----------------------------------------------------------
Price per share ............................................... $ 0.01
Dilution per share ............................................ $ 0.0083
Capital contributions ......................................... $ 7,500
Percentage of capital contributions ........................... 45.5%
Number of shares after offering held by public investors ...... 750,000
Percentage of ownership after offering ........................ 5.8%
12
THE OFFERING BY THE COMPANY
XtraSafe is registering 3,000,000 shares of its common stock for offer and sale.
There is currently no active trading market for our common stock, and such a
market may not develop or be sustained. We currently plan to have our common
stock listing on the OTC Bulletin Board, subject to the effectiveness of this
Registration Statement. In addition, a market maker will be required to file a
Form 211 with the National Association of Securities Dealers Inc. before the
market maker will be able to make a market in our shares of common stock. At the
date hereof, we are not aware that any market maker has any such intention.
All of the shares registered herein will become tradable on the effective date
of this registration statement. The company will not offer the shares through a
broker-dealer or anyone affiliated with a broker-dealer.
NOTE: As of the date of this prospectus, our sole officer and director, Sidney
Zion, owns 9,000,000 common shares, which are subject to Rule 144 restrictions.
There is currently one (1) shareholder of our common stock.
The company is hereby registering 3,000,000 common shares. The price per share
is $0.01 and will remain so unless and until the shares are quoted on the
Over-The-Counter (OTC) Bulletin Board or an exchange.
In the event the company receives payment for the sale of their shares, XtraSafe
will receive all of the proceeds from such sales. XtraSafe, Inc. is bearing all
expenses in connection with the registration of the shares of the company.
PLAN OF DISTRIBUTION
We are offering the shares on a "self-underwritten" basis directly through
Sidney Zion our executive officer and director named herein, who will not
receive any commissions or other remuneration of any kind for selling shares in
this offering, except for the reimbursement of actual out-of-pocket expenses
incurred in connection with the sale of the common stock. This offering will
terminate upon the earlier to occur of (i) the second anniversary of the date of
this Prospectus, (ii) the date on which all 3,000,000 shares registered
hereunder have been sold, or (iii) the date on which we terminate this offering.
This offering is a self-underwritten offering, which means that it does not
involve the participation of an underwriter to market, distribute or sell the
shares offered under this prospectus. We will sell shares on a continuous basis.
We reasonably expect the amount of securities registered pursuant to this
offering to be offered and sold within two years from this initial effective
date of this registration.
In connection with their selling efforts in the offering, Mr. Zion will not
register as broker-dealers pursuant to Section 15 of the Exchange Act, but
rather will rely upon the "safe harbor" provisions of Rule 3a4-1 under the
Exchange Act. Generally speaking, Rule 3a4-1 provides an exemption from the
broker-dealer registration requirements of the Exchange Act for persons
associated with an issuer that participate in an offering of the issuer's
securities. Mr. Zion is not subject to any statutory disqualification, as that
term is defined in Section 3(a)(39) of the Exchange Act. Mr. Zion will not be
13
compensated in connection with their participation in the offering by the
payment of commissions or other remuneration based either directly or indirectly
on transactions in our securities. Mr. Zion is not and has not been within the
past 12 months, a broker or dealer, and is not within the past 12 months, an
associated person of a broker or dealer. At the end of the offering, Mr. Zion
will continue to primarily perform substantial duties for us or on our behalf
otherwise than in connection with transactions in securities. Mr. Zion has not
participated in selling an offering of securities for any issuer more than once
every 12 months other than in reliance on Exchange Act Rule 3a4-1(a)(4)(i) or
(iii).
9,000,000 common shares are issued and outstanding as of the date of this
prospectus. The Company is registering an additional of 3,000,000 shares of its
common stock for possible resale at the price of $0.01 per share. There is no
arrangement to address the possible effect of the offerings on the price of the
stock.
XtraSafe will receive all proceeds from the sale of those shares. The price per
share is fixed at $0.01 until our shares are quoted on the OTC Bulletin Board or
other exchange and thereafter at prevailing market prices or privately
negotiated prices. Prior to being quoted on the OTCBB, the Company may sell its
shares in private transactions to other individuals. Although our common stock
is not listed on a public exchange, we intend to seek a listing on the Over The
Counter Bulletin Board (OTCBB). In order to be quoted on the Bulletin Board, a
market maker must file an application on our behalf in order to make a market
for our common stock. There can be no assurance that a market maker will agree
to file the necessary documents with FINRA, which operates the OTC Electronic
Bulletin Board, nor can there be any assurance that such an application for
quotation will be approved. However, sales by the Company must be made at the
fixed price of $0.01 until a market develops for the stock.
The Company's shares may be sold to purchasers from time to time directly by and
subject to the discretion of the Company. Further, the Company will not offer
its shares for sale through underwriters, dealers, agents or anyone who may
receive compensation in the form of underwriting discounts, concessions or
commissions from the Company and/or the purchasers of the shares for whom they
may act as agents. The shares sold by the Company may be occasionally sold in
one or more transactions, either at an offering price that is fixed or that may
vary from transaction to transaction depending upon the time of sale. Such
prices will be determined by the Company or by agreement between both parts.
In order to comply with the applicable securities laws of certain states, the
securities will be offered or sold in those only if they have been registered or
qualified for sale; an exemption from such registration or if qualification
requirement is available and with which XtraSafe has complied.
In addition and without limiting the foregoing, the Company will be subject to
applicable provisions, rules and regulations under the Exchange Act with regard
to security transactions during the period of time when this Registration
Statement is effective.
XtraSafe will pay all expenses incidental to the registration of the shares
(including registration pursuant to the securities laws of certain states).
14
DESCRIPTION OF SECURITIES
COMMON STOCK
Our authorized capital stock consists of 100,000,000 shares of common stock, par
value $0.001 per share. The holders of our common stock:
* have equal ratable rights to dividends from funds legally available if and
when declared by our Board of Directors;
* are entitled to share ratably in all of our assets available for
distribution to holders of common stock upon liquidation, dissolution or
winding up of our affairs;
* do not have preemptive, subscription or conversion rights and there are no
redemption or sinking fund provisions or rights;
* and are entitled to one non-cumulative vote per share on all matters on
which stockholders may vote.
We refer you to the Bylaws of our Articles of Incorporation and the applicable
statutes of the State of Florida for a more complete description of the rights
and liabilities of holders of our securities.
NON-CUMULATIVE VOTING
Holders of shares of our common stock do not have cumulative voting rights,
which means that the holders of more than 50% of the outstanding shares, voting
for the election of directors, can elect all of the directors to be elected, if
they so choose and, in that event, the holders of the remaining shares will not
be able to elect any of our directors. After this offering is completed, present
stockholders will own approximately 75% of our outstanding shares.
CASH DIVIDENDS
As of the date of this prospectus, we have not declared or paid any cash
dividends to stockholders. The declaration of any future cash dividend will be
at the discretion of our Board of Directors and will depend upon our earnings,
if any, our capital requirements and financial position, our general economic
conditions and other pertinent conditions. It is our present intention not to
pay any cash dividends in the foreseeable future, but rather to reinvest
earnings in our business operations.
STOCK TRANSFER AGENT
We have not engaged the services of a transfer agent at this time. However,
within the next twelve months we anticipate doing so. Until such a time a
transfer agent is retained, XtraSafe will act as its own transfer agent.
15
INTERESTS OF NAMED EXPERTS AND COUNSEL
No expert or counsel named in this prospectus as having prepared or certified
any part of this prospectus or having given an opinion upon the validity of the
securities being registered or upon other legal matters in connection with the
registration or offering of the common stock was employed on a contingency
basis, or had, or is to receive, in connection with the offering, a substantial
interest, direct or indirect, in the registrant or any of its parents or
subsidiaries. Nor was any such person connected with the registrant or any of
its parents or subsidiaries as a promoter, managing or principal underwriter,
voting trustee, director, officer, or employee.
The financial statements included in this prospectus and the registration
statement have been audited by Moore & Associates, Chartered, 2675 S. Jones
Blvd, Ste 109, Las Vegas, Nevada 89146. To the extent and for the periods set
forth in their report appearing elsewhere herein and in the registration
statement. The financial statements are included in reliance on such report
given upon the authority of said firm as experts in auditing and accounting.
INFORMATION WITH RESPECT TO THE APPLICANT
This section of the Registration Statement includes a number of forward-looking
statements that reflect our current views with respect to future events and
financial performance. Forward-looking statements are often identified by words
like believe, expect, estimate, anticipate, intend, project and similar
expressions, or words which, by their nature, refer to future events. You should
not place undue certainty on these forward-looking statements. These
forward-looking statements are subject to certain risks and uncertainties that
could cause actual results to differ materially from our predictions.
BUSINESS DEVELOPMENT
INTRODUCTION
On June 5, 2008, Mr. Sidney Zion, president and sole director, incorporated the
Company in the State of Florida and established a fiscal year end of August 31.
The objective of this corporation is to enter into the electronic security safe
industry with its unique modular safe system.
XTRASAFE, INC. intends to distribute a modular electronic safe system, develop
the market and sell directly and through wholesale distribution channels and to
institutional buyers including Hospitals, Colleges and Universities, and
Assisted Living Facilities throughout the United States.
Our business office is located at 600 Lexington Ave., 9th Floor, New York, NY
10022; our telephone number is (646) 340-9051 our fax number is (717) 313-0503.
Our United States and registered statutory office is located at 600 Lexington
Ave., 9th Floor, New York, NY 10022.
The Company has not yet implemented its business model and to date has generated
no revenues.
XtraSafe has not made any material change in its mode of conducting business and
has no plans to change its business activities or to combine with another
business and is not aware of any circumstances or events that might cause this
plan to change. Since inception we have not been in receivership, bankruptcy or
similar proceeding. We have not made any significant purchase or sale of assets
or been involved in any merger, material reclassification, acquisition or
consolidation.
16
MARKET OPPORTUNITY
We will be offering a product to help prevent or reduce the loss of personal
property in Hospitals, Colleges and Universities, and Assisted Living
Communities. We intend to sell our products initially throughout the United
States.
We believe there is a unique opportunity in this market because a significant
market related to maintaining the security and safety of persons and loss
prevention of consumer's personal and work related property currently exists.
Further, consumers in the United States have become increasingly aware of the
vulnerabilities of their personal security, the security of their family and the
security of their property including identity theft and personal belongings.
In addition, the monetary value of property that people keep on their person has
increased because more people carry PDA's, Cell Phones, MP3 music devices,
Laptops and other devices. People also rely on this property to communicate with
work or family and to conduct business, school, or other tasks.
Over the past 5 years, in Cities and College Campuses across the United States
there has been a decrease in all crimes except Burglary.
UNDER THE CLEARY ACT, a federal statute codified at 20 U.S.C. ss. 1092(f), with
implementing regulations in the U.S. Code of Federal Regulations at 34 C.F.R.
668.46., all colleges and universities that participate in federal financial aid
programs are required to keep and disclose information about crime on and near
their respective campuses. Compliance is monitored by the United States
Department of Education.
According to the US department of Education, crime statistics and specifically
burglaries, defined as the unlawful entry of a structure to commit a felony or a
theft, on college campuses have increased by 8% each year over the past 4 years.
Burglars can destroy a sense of security not just in their targeted victims but
also in neighborhoods and communities. [Professor Bob Walsh, University of
Houston] The FBI reports a burglary occurs every 15 seconds.
In a College or University setting we intend to provide a solution for laptop
computers, portable electronic equipment, and other personal valuables to be
stored in a secure electronic safe.
In addition to providing a product for users, we believe that our safes will
also provide peace of mind for students and their parents, will also lower the
crime rate on campuses and ultimately reduce resources required from college or
universities administration or security personnel.
Traditionally in Hospital and Assisted Living Facilities when patients arrive,
the staff is responsible for registering and storing patients' property. The
hospital expends unnecessary resources when patients' personal property
disappears because the hospital staff is taken from their healthcare obligations
and dispatched to the complaining patients and the hospital bears the cost of
replacement for the property. An electronic room safe or Safe Bank will afford
peace of mind for the sick and elderly and as well as their families. When
leaving the room for treatment, patients rest assured that everything of value
is secure from unwanted visitors, dishonest staff, or plain human error.
17
DESCRIPTION OF OUR PRODUCTS AND SERVICES
Our product will consist of an individual electronic safe that can be joined
together to create an Electronic Modular Safe System. Safes will be made of a
steel construction; the entry system for the safe will be imbedded into the
door. There will be 5 types of entry systems. These include the keyboard, the
magnetic card, the electronic key, the biometric key, or a solid door with an
encrypted RFDI chip.
Safes will be sold as single safe units or as a multiple modular safe system
("safe banks"). The modular system allows individual safes to be joined together
to create safe banks. A safe bank consists of individual safes stacked on top of
and next to each other. This allows for maximum customization. The safes can be
individually operated using one of four types of entry options or with
one-of-the-four entry options or through a console which controls all safes in a
modular bank system.
There will be 4 types of entry system for safe users. These include the
keyboard, the magnetic card, the electronic key, or the biometric key. The
keyboard entry system is a raised keyboard on the door of the safe. A person is
equipped with a personal code that they enter whenever needing access to their
safe. The benefit of the keyboard system is that codes can be changed at will
and there are no keys or cards to lose or leave lying around. The Magnetic Card
system is where a user is locks or unlocks the safe using a card which they
swipe. The electronic key system locks with a convenient electronic key button.
The safe "recognizes" the key that locked it. Change the key and the old key
will no longer open the safe. The biometric key system provides entry by
recognizing a user's thumb print.
In the case of a Safe Bank using a main console entry system, the system will
automatically recognize and register new safes as they are added to the grid of
safes. Safes can be added or removed from a bank very easily and these safes can
also be repurposed to other safe banks or simply used as an individual safe.
COMPETITIVE ADVANTAGES
We believe that our competitive advantage exists because we will be able to have
our product produced in large quantities. We will benefit from volume discounts
which we can pass on to our customers. And even though we will be able to have
our products mass produced, our modular system will allow customers to receive a
custom product tailored to their needs.
MARKETING
We intend initially target markets in the United States.
Our distribution strategy includes direct selling and marketing, utilizing
commissioned independent sales representatives. We anticipate that we will
develop sales promotion and sales development activities which will be directed
towards giving selling assistance to the independent sales representatives
through aids such as brochures, product samples and demonstration products. We
will establish a Web site which will serve both as an additional marketing tool,
and will provide a platform from which we will be able to provide various
support services to our independent sales representatives. We also anticipate
that we will seek to motivate our independent sales representatives through the
use of special incentive programs that reward superior sales performance. We
also anticipate utilizing trade shows, both on a local and national level to
promote our products and to attract qualified sales representatives.
18
The Company intends to attend trade shows in North America that target our
audience of hospitals, assisted living facilities, colleges and universities.
We intend to create a website. Our website will be our online marketing tool. We
will provide, on the home page, all the information about our products and
advantages in a direct and easy way.
INTELLECTUAL PROPERTY AND PATENTS
We intend, in due course, subject to legal advice, to determine if we are able
to receive design protections for our products, in which case we will apply for
patent, trademark protection and/or copyright protection in the United States,
Canada and other jurisdictions.
We intend to aggressively assert our rights in patent, trademark and copyright
laws to protect our intellectual property, including product design, product
research and concepts and recognized trademarks. These rights are protected
through the acquisition of trademark registrations, the maintenance of
copyrights, and, where appropriate, litigation against those who are, in our
opinion, infringing these rights.
While there can be no assurance that registered patent, trademarks and
copyrights will protect our proprietary information, we intend to assert our
intellectual property rights against any infringer. Although any assertion of
our rights can result in a substantial cost to, and diversion of effort by, our
Company, if the management finds that that the company's intellectual property
can be protected, management believes that the protection of our intellectual
property rights would further support our competitive advantage and would be a
key component of our operating strategy.
REGULATORY MATTERS
We are unaware of and do not anticipate having to expend significant resources
to comply with any governmental regulations of the electronic safe industry. We
are subject to the laws and regulations of those jurisdictions in which we plan
to sell our product, which are generally applicable to business operations, such
as business licensing requirements, income taxes and payroll taxes. In general,
the development and operation of our business is not subject to special
regulatory and/or supervisory requirements.
EMPLOYEES AND EMPLOYMENT AGREEMENTS
As the date of this prospectus, XtraSafe has no permanent staff other than its
sole officer and director, Mr. Sidney Zion, who is the President and Chairman of
the Company. Mr. Zion is employed elsewhere and has the flexibility to work on
XtraSafe up to 10 hours per week. He is prepared to devote more time to our
operations as may be required. He is not being paid at present.
There are no employment agreements in existence. The Company presently does not
have pension, health, annuity, insurance, stock options, profit sharing or
similar benefit plans; however, the Company may adopt plans in the future.
Management does not plan to hire additional employees at this time. Our sole
officer and director will be responsible for the initial servicing. Once the
Company begins building its Internet website, it will hire an independent
consultant to build the site. The Company also intends to hire sales
representatives initially on a commission only basis to keep administrative
overhead to a minimum.
19
ENVIRONMENTAL LAWS
We have not incurred and do not anticipate incurring any expenses associated
with environmental laws.
PLAN OF OPERATION
During the 12 month period starting upon the effective date of this registration
statement, the Company must raise capital and start its sales activities. The
first stage of our operation over this period is to build a prototype of the
electronic modular safe system. We expect to complete this step, including time
to make the proper adjustments necessary, within 240 days of the effective date
of this registration statement.
Once we built the prototypes, we will find a suitable location to manufacture
our safes. We expect to complete this step within 300 days of the effective date
of this registration statement. We intend to secure manufacturing of our safes
in the United States and China.
In the third stage, we will create the Company's Internet website, which will
showcase our products and create a sales portal. We expect to complete this step
330 days of the effective date of this registration statement.
The fourth stage consists of a sales and marketing campaign. During this stage
we will: contact and negotiate partnerships with colleges and universities,
hospitals, and assisted living facilities, attend trade shows; place
advertisements in trade publications magazines. Marketing will be a constant
activity of this Company and we expect to be fully operational within 360 days
of the effective date of this registration statement.
AVAILABLE INFORMATION
We have filed with the SEC a registration statement on Form S-1 under the
Securities Act with respect to the common stock offered hereby. This prospectus,
which constitutes part of the registration statement, does not contain all of
the information set forth in the registration statement and the exhibits and
schedule thereto, certain parts of which are omitted in accordance with the
rules and regulations of the SEC. For further information regarding our common
stock and our Company, please review the registration statement, including
exhibits, schedules and reports filed as a part thereof. Statements in this
prospectus as to the contents of any contract or other document filed as an
exhibit to the registration statement, set forth the material terms of such
contract or other document but are not necessarily complete, and in each
instance reference is made to the copy of such document filed as an exhibit to
the registration statement, each such statement being qualified in all respects
by such reference.
We are also subject to the informational requirements of the Exchange Act which
requires us to file reports, proxy statements and other information with the
SEC. Such reports, proxy statements and other information along with the
registration statement, including the exhibits and schedules thereto, may be
inspected at public reference facilities of the SEC at 100 F Street N.E,
Washington D.C. 20549. Copies of such material can be obtained from the Public
Reference Section of the SEC. You may call the SEC at 1-800-SEC-0330 for further
information on the operation of the public reference room. Because we file
documents electronically with the SEC, you may also obtain this information by
visiting the SEC's Internet website at http://www.sec.gov.
20
REPORTS TO SECURITY HOLDERS
After we complete this offering, we will not be required to furnish you with an
annual report. Further, we will not voluntarily send you an annual report. We
will be required to file reports with the SEC under section 13 (a) or 15(d) of
the Securities Act. The reports will be filed electronically. The reports we
will be required to file are Forms 10-K, 10-Q, and 8-K. You may read copies of
any materials we file with the SEC at the SEC's Public Reference Room or
visiting the SEC's Internet website (see "Available Information" above).
LEGAL PROCEEDINGS
We are not a party to any material legal proceedings and to our knowledge; no
such proceedings are threatened or contemplated by any party.
MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
There is no trading market for XtraSafe Common Stock at present and there has
been no trading market to date. There is no assurance that a trading market will
ever develop, or, if such a market does develop that it will continue.
21
FINANCIAL STATEMENTS
FINANCIAL STATEMENTS Audited August 31, 2008
Auditors' Report .......................................................... F-2
Balance Sheet ............................................................. F-3
Statement of Operations ................................................... F-4
Statement of Stockholders' Equity (Deficit) ............................... F-5
Statement of Cash Flows ................................................... F-6
Notes to the Financial Statements ......................................... F-7
F-1
MOORE & ASSOCIATES, CHARTERED
ACCOUNTANTS AND ADVISORS
------------------------
PCAOB REGISTERED
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
-------------------------------------------------------
TO THE BOARD OF DIRECTORS
XTRASAFE, INC.
(A DEVELOPMENT STAGE COMPANY)
We have audited the accompanying balance sheet of Xtrasafe, Inc. (A Development
Stage Company) as of August 31, 2008, and the related statements of operations,
stockholders' equity and cash flows from inception on June 5, 2008 through
August 31, 2008. 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 audits.
We conduct our audits in accordance with standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audits 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
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Xtrasafe, Inc. (A Development
Stage Company) as of August 31, 2008, and the related statements of operations,
stockholders' equity and cash flows from inception on June 5, 2008 through
August 31, 2008, in conformity with accounting principles generally accepted in
the United States of America.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 6 to the
financial statements, the Company has an accumulated deficit of $120, which
raises substantial doubt about its ability to continue as a going concern.
Management's plans concerning these matters are also described in Note 6. The
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.
/S/ MOORE & ASSOCIATES, CHARTERED
Moore & Associates, Chartered
Las Vegas, Nevada
September 12, 2008
2675 S. Jones Blvd. Suite 109, Las Vegas, NV 89146
(702) 253-7499 Fax (702) 253-7501
--------------------------------------------------
F-2
XTRASAFE, INC.
(A Development Stage Company)
Balance Sheet
ASSETS
------
As of
August 31,
2008
----------
CURRENT ASSETS
Cash and Cash equivalents ....................................... $ 8,880
---------
Total Current Assets ......................................... 8,880
---------
TOTAL ASSETS ................................................. $ 8,880
=========
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
----------------------------------------------
CURRENT LIABILITIES
Accounts payable and accrued expenses ........................... $ -
Total Current Liabilities .................................... -
---------
STOCKHOLDERS' EQUITY (DEFICIT)
Capital Stock (Note 3)
Authorized:
100,000,000 common shares, $.001 par value
Issued and outstanding shares 9,000,000 ...................... 9,000
Additional paid-in capital ...................................... -
Deficit accumulated during the development stage ................ (120)
---------
Total Stockholders' Equity (Deficit) ......................... 8,880
---------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) ......... $ 8,880
=========
The accompanying notes are an integral part of these financial statements.
F-3
XTRASAFE, INC.
(A Development Stage Company)
Statement of Operations
June 05, 2008
(inception) to
August 31,
2008
--------------
REVENUES ................................................ $ -
OPERATING EXPENSES
General & Administrative ........................... 120
Total Operating Expenses ....................... 120
-------------
LOSS FROM OPERATIONS .................................... (120)
-------------
OTHER EXPENSES
Interest expense ................................... -
-------------
Total Other Expenses ........................... -
-------------
LOSS BEFORE INCOME TAXES ................................ (120)
PROVISION FOR INCOME TAXES .............................. -
-------------
NET LOSS ................................................ $ (120)
=============
PER SHARE DATA
BASIC LOSS PER COMMON SHARE ........................ $ (0.000)
=============
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING ....................... 9,000,000
=============
The accompanying notes are an integral part of these financial statements
F-4
XTRASAFE, INC.
(A Development Stage Company)
Statement of Stockholders' Equity (Deficit)
Deficit
Accumulated Total
Common Stock Additional During the Stockholders'
--------------------- Paid-In Development Equity
Shares Amount Capital Stage (Deficit)
--------- --------- ---------- ----------- -------------
Inception, June 05, 2008 ....... - $ - $ - $ - $ -
Common Shares issued to founders
for cash at $0.001 per share
on August 13, 2008 .......... 9,000,000 9,000 - - 9,000
Net loss since inception
through August 31, 2008 ..... - - - (120) (120)
--------- --------- ---------- ---------- ------------
BALANCE, AUGUST 31, 2008 ....... 9,000,000 $ 9,000 $ - $ (120) $ 8,880
========= ========= ========== ========== ============
The accompanying notes are an integral part of these financial statements
F-5
XTRASAFE, INC.
(A Development Stage Company)
Statement of Cash Flows
June 05, 2008
(inception) to
August 31,
2008
--------------
OPERATING ACTIVITIES
Net loss ................................................... $ (120)
Changes in Operating Assets and Liabilities:
(Increase) decrease in prepaid expenses ................. -
Increase (decrease) in accounts payable ................. -
Increase (decrease) in accrued liabilities .............. -
Increase in short-term note payable (leasehold) ......... -
-------------
Net Cash Used by Operating Activities ................ (120)
-------------
INVESTING ACTIVITIES .......................................... -
-------------
Net cash used in operating activities ................ -
-------------
FINANCING ACTIVITIES
Common stock issued for cash ............................... 9,000
-------------
Net Cash Provided by Financing Activities ............ 9,000
-------------
NET INCREASE IN CASH AND CASH EQUIVALENTS .................. 8,880
CASH & CASH EQUIVALENTS AT BEGINNING OF PERIOD ............. -
-------------
CASH & CASH EQUIVALENTS AT END OF PERIOD ................... $ 8,880
=============
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
CASH PAID FOR:
Interest ................................................ $ -
Income Taxes ............................................ $ -
The accompanying notes are an integral part of these financial statements.
F-6
XTRASAFE, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO AUDITED FINANCIAL STATEMENTS
NOTE 1. GENERAL ORGANIZATION AND BUSINESS
XTRASAFE, INC. (A Development Stage Company) was incorporated on June 5, 2008
under the laws of the State of Florida to develop and sell an electronic modular
safe system. It has no operations and in accordance with SFAS #7 is considered
to be in the development stage.
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING PRACTICES
Accounting Basis
- ----------------
These financial statements are prepared on the accrual basis of accounting in
conformity with accounting principles generally accepted in the United States of
America.
Cash and Cash Equivalents
- -------------------------
For the purpose of the financial statements cash equivalents include all highly
liquid investments with maturity of three months or less.
Earnings (Loss) per Share
- -------------------------
The basic earnings (loss) per share are calculated by dividing the Company's net
income available to common shareholders by the weighted average number of common
shares outstanding during the year. The diluted earnings (loss) per share are
calculated by dividing the Company's net income (loss) available to common
shareholders by the diluted weighted average number of shares outstanding during
the year. The diluted weighted average number of shares outstanding is the basic
weighted number of shares adjusted as of the first of the year for any
potentially dilutive debt or equity. There are no diluted shares outstanding.
Dividends
- ---------
The Company has not adopted any policy regarding payment of dividends. No
dividends have been paid during the period shown.
Income Taxes
- ------------
The Company provides for income taxes under Statement of Financial Accounting
Standards NO. 109, "Accounting for Income Taxes". SFAS No. 109 requires the use
of an asset and liability approach in accounting for income taxes.
The Company expenses advertising as incurred. The advertising since inception
has been $0.0
SFAS No. 109 requires the reduction of deferred tax assets by a valuation
allowance if, based on the weight of available evidence, it is more likely than
not that some or all of the deferred tax assets will not be realized. No
provision for income taxes is included in the statement due to its immaterial
amount, net of the allowance account, based on the likelihood of the Company to
utilize the loss carry-forward.
F-7
XTRASAFE, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO AUDITED FINANCIAL STATEMENTS
Use of Estimates
- ----------------
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenue and expenses during
the reporting period. Actual results could differ from those estimates.
Revenue and Cost Recognition
- ----------------------------
The Company has no current source of revenue; therefore the Company has not yet
adopted any policy regarding the recognition of revenue or cost.
Advertising Costs
- -----------------
The Company's policy regarding advertising is to expense advertising when
incurred. The Company had not incurred any advertising expense as of August 31,
2008.
NOTE 3. INCOME TAXES:
The Company provides for income taxes under Statement of Financial Accounting
Standards No. 109, Accounting for Income Taxes. SFAS No. 109 requires the use of
an asset and liability approach in accounting for income taxes. Deferred tax
assets and liabilities are recorded based on the differences between the
financial statement and tax bases of assets and liabilities and the tax rates in
effect currently.
SFAS No. 109 requires the reduction of deferred tax assets by a valuation
allowance if, based on the weight of available evidence, it is more likely than
not that some or all of the deferred tax assets will not be realized. In the
Company's opinion, it is uncertain whether they will generate sufficient taxable
income in the future to fully utilize the net deferred tax asset. Details for
the last three years follow:
Year Ended August 31 2008
- -------------------- ------
Deferred Tax Asset 18
Valuation Allowance (18)
Current Taxes Payable 0.00
------
Income Tax Expense $ 0.00
======
The Company has filed no income tax returns since inception.
F-8
XTRASAFE, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO AUDITED FINANCIAL STATEMENTS
NOTE 4. STOCKHOLDERS' EQUITY
Common Stock
- ------------
On August 13, 2008, the Company issued 9,000,000 of its $0.001 par value common
stock for $9,000 cash to the founders of the Company.
There are 100,000,000 Common Shares at $0.001 par value Authorized with
9,000,000 Issued and Outstanding as of August 13, 2008.
NOTE 5. RELATED PARTY TRANSACTIONS
The officers and directors of the Company are involved in other business
activities and may, in the future, become involved in other business
opportunities that become available. They may face a conflict in selecting
between the Company and other business interests. The Company has not formulated
a policy for the resolution of such conflicts.
The company does not own or lease property or lease office space. The office
space used by the company was arranged by the founder of the company to use at
no charge.
NOTE 6. GOING CONCERN
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. For the period June 5, 2008 (date of
inception) through August 31, 2008 the Company has had a net loss of $120. As of
August 31, 2008, the Company has not emerged from the development stage. In view
of these matters, recoverability of any asset amounts shown in the accompanying
financial statements is dependent upon the Company's ability to begin operations
and to achieve a level of profitability. Since inception, the Company has
financed its activities principally from the sale of equity securities. The
Company intends on financing its future development activities and its working
capital needs largely from loans and the sale of public equity securities with
some additional funding from other traditional financing sources, including term
notes, until such time that funds provided by operations are sufficient to fund
working capital requirements.
NOTE 7. THE EFFECT OF RECENTLY ISSUED ACCOUNTING STANDARDS
Below is a listing of the most recent accounting standards and their effect on
the Company.
F-9
XTRASAFE, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO AUDITED FINANCIAL STATEMENTS
In June 2006, the FASB issued Interpretation No. 48 ("FIN No. 48"), Accounting
for Uncertainty in Income Taxes--an interpretation of FASB Statement No. 109,
which clarifies the accounting for uncertainty in income taxes recognized in an
enterprise's financial statements in accordance with SFAS No. 109, Accounting
for Income Taxes. The Interpretation provides a recognition threshold and
measurement attribute for the financial statement recognition and measurement of
a tax position taken or expected to be taken in a tax return. Under FIN No. 48,
the Company may recognize the tax benefit from an uncertain tax position only if
it is more likely than not that the tax position will be sustained on
examination by the taxing authorities, based on the technical merits of the
position. The tax benefits recognized in the financial statements from such a
position should be measured based on the largest benefit that has a greater than
50% likelihood of being realized upon ultimate settlement. FIN No. 48 also
provides guidance on de-recognition, classification, interest and penalties,
accounting in interim periods, disclosure, and transition. FIN No. 48 was
effective July 1, 2007.
In June 2006, the FASB ratified the Emerging Issues Task Force ("EITF")
consensus on EITF Issue No. 06-2, "Accounting for Sabbatical Leave and Other
Similar Benefits Pursuant to FASB Statement No. 43." EITF Issue No. 06-2
requires companies to accrue the costs of compensated absences under a
sabbatical or similar benefit arrangement over the requisite service period.
EITF Issue No. 06-2 was effective July 1, 2007.
Staff Accounting Bulletin ("SAB") No. 108, Considering the Effects of Prior Year
Misstatements when Quantifying Current Year Misstatements. SAB No. 108 requires
companies to quantify misstatements using both a balance sheet (iron curtain)
and an income statement (rollover) approach to evaluate whether either approach
results in an error that is material in light of relevant quantitative and
qualitative factors, and provides for a one-time cumulative effect transition
adjustment.
In September 2006, the FASB issued SFAS No. 157, Fair Value Measurements, which
defines fair value, establishes a framework for measuring fair value in
generally accepted accounting principles, and expands disclosures about fair
value measurements. SFAS No. 157 does not require any new fair value
measurements, but provides guidance on how to measure fair value by providing a
fair value hierarchy used to classify the source of the information. This
statement is effective May 1, 2008.
In February 2007, the FASB issued SFAS No. 159, The Fair Value Option for
Financial Assets and Financial Liabilities. SFAS No. 159 gives us the
irrevocable option to carry many financial assets and liabilities at fair
values, with changes in fair value recognized in earnings. SFAS No. 159 is
effective July 1, 2008, although early adoption is permitted.
The FASB has replaced SFAS No. 141 with a new statement on Business Combinations
that changes the way that minority interest is recorded and modified as a
parent's interest in a subsidiary changes.
The adoption of these new Statements is not expected to have a material effect
on the Company's current financial position, results of operations, or cash
flows.
F-10
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
For the period from inception through August 31, 2008, we had no revenue.
Expenses for the period totaled $120 resulting in a Net loss of $120.
CAPITAL RESOURCES AND LIQUIDITY
As of August 31, 2008 we had $8880 in cash.
Our auditors have issued a "going concern" opinion, meaning that there is
substantial doubt if we can continue as an on-going business for the next twelve
months unless we obtain additional capital. No substantial revenues are
anticipated until we have completed the financing from this offering and
implemented our plan of operations. Our only source for cash at this time is
investments by others in this offering. We must raise cash to implement our
strategy and stay in business. The amount of the offering will likely allow us
to operate for at least one year.
Management believes that if subsequent private placements are successful, we
will generate sales revenue within the following twelve months thereof. However,
additional equity financing may not be available to us on acceptable terms or at
all, and thus we could fail to satisfy our future cash requirements.
We are highly dependent upon the success of the anticipated private placement
offering described herein. Therefore, the failure thereof would result in need
to seek capital from other resources such as debt financing, which may not even
be available to the Company. However, if such financing were available, because
we are a development stage Company with no operations to date, it would likely
have to pay additional costs associated with high risk loans and be subject to
an above market interest rate. At such time these funds are required, management
would evaluate the terms of such debt financing. If the Company cannot raise
additional proceeds via a private placement of its common stock or secure debt
financing, it would be required to cease business operations. As a result,
investors would lose all of their investment.
We do not anticipate researching any further products or services nor the
purchase or sale of any significant equipment. We also do not expect any
significant additions to the number of employees.
As of the date of this registration statement, the current funds available to
the Company will not be sufficient to continue maintaining a reporting status.
The Company's sole officer and director, Mr. Zion has indicated that he may be
willing to provide funds required to maintain the reporting status in the form
of a non-secured loan for the next twelve months as the expenses are incurred if
no other proceeds are obtained by the Company. However, there is no contract in
place or written agreement securing this agreement. Management believes if the
Company cannot maintain its reporting status with the SEC it will have to cease
all efforts directed towards the Company. As such, any investment previously
made would be lost in its entirety.
22
OFF-BALANCE SHEET ARRANGEMENTS
Other than the above described situation, the Company has no off-balance sheet
arrangements that have or are reasonably likely to have a current or future
effect or change on the Company's financial condition, revenues or expenses,
results of operations, liquidity, capital expenditures or capital resources that
are material to investors. The term "off-balance sheet arrangement" generally
means any transaction, agreement or other contractual arrangement to which an
entity unconsolidated with the Company is a party, under which the Company has
(i) any obligation arising under a guarantee contract, derivative instrument or
variable interest; or (ii) a retained or contingent interest in assets
transferred to such entity or similar arrangement that serves as credit,
liquidity or market risk support for such assets.
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE
There have been no changes in or disagreements with accountants regarding our
accounting, financial disclosures or any other matter.
CODE OF BUSINESS CONDUCT AND ETHICS
In August 2008 we adopted a Code of Ethics and Business Conduct which is
applicable to our employees and which also includes a Code of Ethics for our CEO
and principal financial officers and persons performing similar functions. A
code of ethics is a written standard designed to deter wrongdoing and to promote
o honest and ethical conduct,
o full, fair, accurate, timely and understandable disclosure in
regulatory filings and public statements,
o compliance with applicable laws, rules and regulations,
o the prompt reporting violation of the code, and
o accountability for adherence to the code.
A copy of our Code of Business Conduct and Ethics has been filed with the
Securities and Exchange Commission as an exhibit to our S-1 filing.
DIRECTORS AND EXECUTIVE OFFICERS
IDENTIFICATION OF DIRECTORS AND EXECUTIVE OFFICERS
Our sole director serves until his successor is elected and qualified. Our sole
officer is elected by the Board of Directors to a term of one (1) year and
serves until his successor is duly elected and qualified, or until he is removed
from office. The Board of Directors has no nominating or compensation
committees. The Company's current Audit Committee consists of our sole officer
and director.
23
The name, address, age and position of our present sole officer and director is
set forth below:
NAME AGE POSITION(S)
- ---- --- -----------
Sidney Zion 75 President, Secretary/ Treasurer, Chief Financial
215 W. 90th St., Officer and Chairman of the Board of Directors.
New York, NY 10024
The person named above has held his offices/positions since inception of our
Company and is expected to hold his offices/positions at least until the next
annual meeting of our stockholders.
BUSINESS EXPERIENCE
SIDNEY ZION, PRESIDENT, CEO, DIRECTOR, SECRETARY/TREASURER
Mr. Zion is the founder of XtraSafe, Inc. and has served since inception.
Mr. Zion practiced law as a trial lawyer from 1958 until 1961. In 1961, Mr. Zion
became Assistant U.S. Attorney for New Jersey until 1963. In 1963, Mr. Zion
became a reporter for the New York Post, and then moved to the New York Times in
1965 to work as a Legal Correspondent. In 1970 Mr. Zion became Editor of
Scalan's Magazine until 1977. From 1977 to 1994 Mr. Zion worked at the New York
Post as a columnist. From 1994 to 2000 Mr. Zion worked at the New York Daily
News as a columnist, and then in August, 2000 he returned as a bi-weekly
columnist for the New York Post. Mr. Zion has won numerous awards, including the
Zionist Organization of America "Ben Hecht Journalism Award," the Overseas Press
Club Award for "Inside Story of the Middle East Peace Talks," and the New York
State Bar Association Award for Outstanding Journalism.
Mr. Zion has appeared on CNBC's John McLaughlin Show, Good Morning America, the
Today show, the Charlie Rose Show, Firing Line, 60 Minutes, David Letterman, ABC
Eyewitness News and the History Channel. Mr. Zion has written numerous magazine
articles and several books, including THE AUTOBIOGRAPHY OF ROY COHN, and LOYALTY
AND BETRAYAL: THE STORY OF THE AMERICAN MOB, and two books which are collections
of his columns, READ ALL ABOUT IT and TRUST YOUR MOTHER BUT CUT THE CARDS. Mr.
Zion holds a degree in Economics from the University of Pennsylvania, and a J.D.
from Yale Law School.
Mr. Zion is not an officer or director of any reporting company.
CONFLICTS OF INTEREST
At the present time, the Company does not foresee any direct conflict between
Mr. Zion other business interests and his involvement in XtraSafe.
EXECUTIVE COMPENSATION
XtraSafe has made no provisions for paying cash or non-cash compensation to its
sole officer and director. No salaries are being paid at the present time, and
none will be paid unless and until our operations generate sufficient cash
flows.
The table below summarizes all compensation awarded to, earned by, or paid to
our named executive officer for all services rendered in all capacities to us
for the period from inception (June 5, 2008) through August 31, 2008.
24
SUMMARY COMPENSATION TABLE
Name Non-Equity Nonqualified
and Stock Option Incentive Plan Deferred All Other
principal Salary Bonus Awards Awards Compensation Compensation Compensation Total
position Year ($) ($) ($) ($) ($) Earnings ($) ($) ($)
- ----------- ---- ------ ----- ------ ------ -------------- ------------ ------------ -----
Sidney Zion 2008 0 0 0 0 0 0 0 0
President
We did not pay any salaries in 2008. We do not anticipate beginning to pay
salaries until we have adequate funds to do so. There are no other stock option
plans, retirement, pension, or profit sharing plans for the benefit of our
officers and director other than as described herein.
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
The table below summarizes all unexercised options, stock that has not vested,
and equity incentive plan awards for each named executive officer as of August
31, 2008.
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
OPTION AWARDS STOCK AWARDS
------------------------------------------------------------- -----------------------------------------------
Equity Equity
Incentive Incentive
Equity Plan Plan
Incentive Awards: Awards:
Plan Market Number of Market or
Awards: Value of Unearned Payout Value
Number of Number of Number of Number of Shares or Shares, of Unearned
Securities Securities Securities Shares or Units of Units or Shares,
Underlying Underlying Underlying Units of Stock Other Units or
Unexercised Unexercised Unexercised Option Stock That That Have Rights Other Rights
Options Options Unearned Exercise Option Have Not Not That Have That Have
(#) (#) Options Price Expiration Vested Vested Not Vested Not Vested
Name Exercisable Unexercisable (#) ($) Date (#) ($) (#) (#)
- ----------- ----------- ------------- ----------- -------- ---------- ---------- --------- ---------- ------------
Sidney Zion - - - - - - - - -
There were no grants of stock options since inception to the date of this
Prospectus.
We do not have any long-term incentive plans that provide compensation intended
to serve as incentive for performance.
The Board of Directors of XtraSafe has not adopted a stock option plan. The
Company has no plans to adopt it but may choose to do so in the future. If such
a plan is adopted, this may be administered by the board or a committee
appointed by the board (the "Committee"). The committee would have the power to
modify, extend or renew outstanding options and to authorize the grant of new
options in substitution therefore, provided that any such action may not impair
any rights under any option previously granted. XtraSafe may develop an
incentive based stock option plan for its officers and directors and may reserve
up to 10% of its outstanding shares of common stock for that purpose.
25
STOCK AWARDS PLAN
The Company has not adopted a Stock Awards Plan, but may do so in the future.
The terms of any such plan have not been determined.
DIRECTOR COMPENSATION
The table below summarizes all compensation awarded to, earned by, or paid to
our directors for all services rendered in all capacities to us for the period
from inception (June 5, 2008) through August 31, 2008.
DIRECTOR COMPENSATION
Fees
Earned Non-Equity Non-Qualified
or Option Incentive Deferred All
Paid in Stock Awards Plan Compensation Other
Cash Awards ($) Compensation Earnings Compensation Total
Name ($) ($) ($) ($) ($) ($)
- ----------- ------- ------ ------ ------------ ------------- ------------ -----
Sidney Zion 0 0 0 0 0 0 0
At this time, XtraSafe has not entered into any employment agreements with its
sole officer and director. If there is sufficient cash flow available from our
future operations, the Company may enter into employment agreements with our
sole officer and director or future key staff members.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of the date of this prospectus, the total
number of shares owned beneficially by our sole officer and director, and key
employees, individually and as a group, and the present owners of 5% or more of
our total outstanding shares. The table also reflects what this ownership will
be assuming completion of the sale of all or partial shares in this offering.
The stockholder listed below has direct ownership of his shares and possesses
sole voting and dispositive power with respect to the shares.
Percentage Percentage Percentage Percentage
of of of of
Name and Address Amount and Ownership Ownership Ownership Ownership
Title of of Beneficial Nature of Percent Assuming Assuming Assuming Assuming
Class Owner [1] Beneficial of Class all of the 75% of the 50% of the 25% of the
Ownership Shares are Shares are Shares are Shares are
Sold Sold Sold Sold
- -------- ------------------ ---------- -------- ---------- ---------- ---------- ----------
Common Sidney Zion, 9,000,000 100% 68.6% 74.5% 81.4% 89.8%
Stock 215 W. 90th St.,
New York, NY 10024
All Officers and 9,000,000 100% 68.6% 74.5 % 81.4% 89.7%
Directors as a
Group (1 person)
(1) The person named above may be deemed to be a "parent" and "promoter" of our
Company, within the [1] meaning of such terms under the Securities Act of
1933, as amended, by virtue of his direct and indirect stock holdings. Mr.
Zion is the only "promoter" of our Company.
26
Our sole officer and director will continue to own the majority of our common
stock after the offering, regardless of the number of shares sold. Since he will
continue control the Company after the offering, investors will be unable to
change the course of the operations. Thus, the shares we are offering lack the
value normally attributable to voting rights. This could result in a reduction
in value of the shares you own because of their ineffective voting power. None
of our common stock is subject to outstanding options, warrants, or securities
convertible into common stock.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
On August 31, 2008 we issued a total of 9,000,000 shares of common stock to Mr.
Sidney Zion, our sole officer and director, for total cash consideration of
$9,000. This was accounted for as a purchase of common stock, all of which are
restricted securities, as defined in Rule 144 of the Rules and Regulations of
the SEC promulgated under the Securities Act. Under Rule 144, the shares can be
publicly sold, subject to volume restrictions and restrictions on the manner of
sale, commencing one year after their acquisition. Under Rule 144, a shareholder
can sell up to 1% of total outstanding shares every three months in brokers'
transactions. Shares purchased in this offering, which will be immediately
resalable, and sales of all of our other shares after applicable restrictions
expire, could have a depressive effect on the market price, if any, of our
common stock and the shares we are offering.
DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION FOR
SECURITIES ACT LIABILITIES
Under our Articles of Incorporation and Bylaws of the corporation, we may
indemnify an officer or director who is made a party to any proceeding,
including a lawsuit, because of his position, if he acted in good faith and in a
manner he reasonably believed to be in our best interest. We may advance
expenses incurred in defending a proceeding. To the extent that the officer or
director is successful on the merits in a proceeding as to which he is to be
indemnified, we must indemnify him against all expenses incurred, including
attorney's fees. With respect to a derivative action, indemnity may be made only
for expenses actually and reasonably incurred in defending the proceeding, and
if the officer or director is judged liable, only by a court order. The
indemnification is intended to be to the fullest extent permitted by the laws of
the State of Florida.
Insofar as indemnification for liabilities arising under the Securities Act of
1933 may be permitted to directors, officers or persons controlling the
registrant pursuant to the foregoing provisions, we have been informed that in
the opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Act and is therefore unenforceable.
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PART II - INFORMATION NOT REQUIRED IN THE PROSPECTUS
OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The estimated costs of this offering are as follows:
Securities and Exchange Commission registration fee ............ $ 3.14
Federal Taxes .................................................. $ 0.00
State Taxes and Fees ........................................... $ 0.00
Listing Fees ................................................... $ 0.00
Printing Fees .................................................. $ 300.00
Transfer Agent Fees ............................................ $ 1,200.00
Accounting fees and expenses ................................... $ 2,500.00
Legal fees and expenses ........................................ $ 1,500.00
----------
TOTAL .......................................................... $ 5,503.14
==========
All amounts are estimates other than the Commission's registration fee. We are
paying all expenses of the offering listed above.
INDEMNIFICATION OF DIRECTORS AND OFFICERS
See "Disclosure of Commission Position of Indemnification for Securities" above.
RECENT SALES OF UNREGISTERED SECURITIES
XtraSafe is authorized to issue up to 100,000,000 shares of common stock with a
par value of $0.001.The Company is not listed for trading on any securities
exchange in the United States and there has been no active market in the United
States or elsewhere for the common shares.
During the past year, the Company has sold the following securities which were
not registered under the Securities Act of 1933, as amended:
We have issued 9,000,000 common shares to our sole officer and director for
total consideration of $9,000, or $0.001 per share.
We have spent a portion of the above proceeds to pay for costs associated with
this prospectus and expect the balance of the proceeds to be mainly applied to
further costs of this prospectus and administrative costs.
We shall report the use of proceeds on our first periodic report filed pursuant
to sections 13(a) and 15(d) of the Exchange Act after the effective date of this
Registration Statement and thereafter on each of our subsequent periodic reports
through the later of disclosure of the application of all the offering proceeds,
or disclosure of the termination of this offering.
EXHIBITS
EXHIBIT NO. DOCUMENT DESCRIPTION
- ----------- --------------------
3.1 Articles of Incorporation
3.1.1 Amended Articles of Incorporation
3.2 By-Laws
4.1 Specimen Stock Certificate
14 Code of Business Conduct and Ethics
23.1 Consent of Accountants
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DESCRIPTION OF EXHIBITS
EXHIBIT 3.1
- -----------
Articles of Incorporation of XtraSafe, Inc., dated June 5, 2008 and approved
June 5, 2008.
EXHIBIT 3.1.1
- -------------
Amended Articles of Incorporation of XtraSafe, Inc., dated August 13, 2008 and
approved August 13, 2008.
EXHIBIT 3.2
- -----------
Bylaws of XtraSafe, Inc., approved and adopted on June 5, 2008.
EXHIBIT 4.1
- -----------
Specimen Stock Certificate of XtraSafe, Inc.
EXHIBIT 14
- ----------
Code of Business Conduct and Ethics document of XtraSafe, Inc.
EXHIBIT 23.1
- ------------
Consent of Accountants, regarding the use in this Registration Statement of
their auditors' report on the financial statements of XtraSafe, Inc., for the
period ending August 31, 2008.
UNDERTAKINGS
The undersigned registrant hereby undertakes:
1. To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
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(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) and any deviation from the low or high end of the
estimated maximum offering range 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 change to such information in the registration statement.
2. That, for the purpose of determining any liability under the Securities
Act of 1933, each such post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
3. To remove from registration by means of a post-effective amendment any of
the securities being registered which remain unsold at the termination of
the offering.
4. For the purpose of determining liability of the registrant under the
Securities Act of 1933 to any purchaser in the initial distribution of the
securities: the undersigned registrant undertakes that in a primary
offering of the securities of the undersigned registrant pursuant to this
registration statement, regardless of the underwriting method used to sell
the securities to the purchaser, if the securities are offered or sold to
such purchaser by means of any of the following communications, the
undersigned registrant will be a seller to the purchaser and will be
considered to offer or sell such securities to such purchaser:
(i) Any preliminary prospectus or prospectus of the undersigned
registrant relating to the offering required to be filed pursuant to
Rule 424;
(ii) Any free writing prospectus relating to the offering prepared by or
on behalf of the undersigned registrant or used or referred to by
the undersigned registrant;
(iii) The portion of any other free writing prospectus relating to the
offering containing material information about the undersigned
registrant or its securities provided by or on behalf of the
undersigned registrant; and
(iv) Any other communication that is an offer in the offering made by the
undersigned registrant to the purchaser.
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5. Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers, and controlling
persons of the registrant pursuant to the foregoing provisions, or
otherwise, the registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities (other
than the payment by the registrant of expenses incurred or paid by a
director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities
being registered, the registrant will, unless in the opinion of its
counsel the matter has been settled by controlling precedent, submit to a
court of appropriate jurisdiction the question whether such
indemnification by itself is against public policy as expressed in the Act
and will be governed by the final adjudication of such issue.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant has
duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized in the City of New York in New York on
this 1st day of October, 2008
XTRASAFE, INC.
/s/ SIDNEY ZION
----------------------------
SIDNEY ZION
President and Director
Principal Executive Officer
Principal Financial Officer
Principal Accounting Officer
Pursuant to 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 indicated:
/s/ SIDNEY ZION
----------------------------
SIDNEY ZION
President and Director
Principal Executive Officer
Principal Financial Officer
Principal Accounting Officer
October 1, 2008
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