As filed with the Securities and Exchange Commission
on February 11, 2004
REGISTRATION NO. 333-100803
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
==================================================
AMENDMENT NO. 8 TO
FORM SB-2
==================================================
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
RELOCATE411.COM
(Exact Name of Small Business Issuer in its Charter)
Delaware 9995 11-3462369
(State of Incorporation) (Primary Standard (IRS Employer ID No.)
Classification Code)
142 Mineola Avenue, Suite 2D
Roslyn Heights, New York 11577
(516) 773-3085
(Address and Telephone Number of Registrant's Principal
Executive Offices and Principal Place of Business)
Relocate411.com, Inc.
c/o United Corporate Services, Inc.
15 East North Street
Dover, Delaware 19901
(Name, Address and Telephone Number of Agent for Service)
Copies of communications to:
Richard I. Anslow, Esq.
Anslow & Jaclin, LLP
4400 Route 9, 2nd Floor
Freehold, New Jersey 07728
TELEPHONE NO.: (732) 409-1212
FACSIMILE NO.: (732) 577-1188
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after this registration statement dated February 5, 2004 becomes
effective.
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. |X|
If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act of 1933, 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 of 1933, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. |_|
If this Form is a post-effective amendment filed pursuant to Rule 462(d) under
the Securities Act of 1933, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. |_|
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. |_|
CALCULATION OF REGISTRATION FEE
Proposed
Maximum Proposed
Aggregate Maximum
Offering Aggregate Amount of
Title of Each Class Of Amount to be Price per Offering Registration
securities to be Registered Registered Share Price fee
- --------------------------- ---------- ----- ----- ---
Common Stock, par value
$0.0001 per share 1,250,000 (1) $.025 $ 31,250 $2.88
- -------------------------
The offering price has been estimated solely for the purpose of computing the
amount of the registration fee in accordance with Rule 457(c). Our common stock
is not traded on any national stock exchange. Represents shares owned by 35 of
our selling security holders which can be sold at a price of $.025 per share
until our shares of common stock are quoted on the OTC Bulletin Board, and
thereafter, at prevailing market prices or privately negotiated prices.
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. THE
SHAREHOLDERS 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 IT IS NOT SOLICITING AN OFFER TO
BUY THESE SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
PRELIMINARY PROSPECTUS SUBJECT TO COMPLETION DATED FEBRUARY 11, 2004.
THE REGISTRANT HEREBY AMENDS REGISTRATION STATEMENT DATED FEBRUARY 5, 2004 ON
SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE
REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THIS
REGISTRATION STATEMENT DATED FEBRUARY 11, 2004 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.
PROSPECTUS
RELOCATE411.COM, INC.
1,250,000 SHARES OF COMMON STOCK
Our selling stockholders are offering to sell 1,250,000 shares of our common
stock.
THE SECURITIES OFFERED IN THIS PROSPECTUS INVOLVE A HIGH DEGREE OF RISK. YOU
SHOULD CAREFULLY CONSIDER THE FACTORS DESCRIBED UNDER THE HEADING "RISK FACTORS"
BEGINNING ON PAGE 3. NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY
STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR
DETERMINED IF THIS PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
THE COMPANY DOES NOT BELIEVE THAT IT IS A BLANK CHECK COMPANY AS THAT TERM IS
DEFINED IN RULE 419 OF REGULATION C UNDER THE RULES OF THE SECURITIES ACT OF
1933.
Our common stock is presently not trading on any public market or securities
exchange. Our common stock is not traded on any national stock exchange.
Represents shares owned by 35 of our selling security holders which can be sold
at a price of $.025 per share until our shares of common stock are quoted on the
OTC Bulletin Board, and thereafter, at prevailing market prices or privately
negotiated prices.
The date of this prospectus is February 11, 2004
TABLE OF CONTENTS
ABOUT OUR COMPANY 1
SUMMARY FINANCIAL DATA 2
RISK FACTORS 3
USE OF PROCEEDS 6
LACK OF MARKET FOR OUR COMMON STOCK 6
MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OR OPERATION 7
BUSINESS 9
MANAGEMENT 18
PRINCIPAL STOCKHOLDERS 20
SELLING STOCKHOLDERS 21
PLAN OF DISTRIBUTION 24
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS 27
DESCRIPTION OF SECURITIES 29
INDEMNIFICATION OF DIRECTORS AND OFFICERS 31
WHERE YOU CAN FIND MORE INFORMATION 32
TRANSFER AGENT 32
LEGAL MATTERS 32
EXPERTS 33
INDEX TO FINANCIAL STATEMENTS f-1
Until ______, 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 dealer's obligation to deliver a prospectus when
acting as underwriters and with respect to their unsold allotments or
subscriptions.
i
ABOUT OUR COMPANY
Relocate 411.Com, Inc., formerly known as Stateside Fundings, Inc., was
organized under the laws of the State of Delaware on December 19, 1997. We are
considered to be in our development stage since we are devoting substantially
all of our efforts to establishing a new business. Our planned principal
operations have not yet commenced and there have been no revenues to date. We
are developing a web site to be utilized in various real estate services such as
relocation, listings of real estate sales or rentals, mortgage information and
other real estate related information or content.
We believe that we are not a blank company as that term is defined in Rule 419
of Regulation C under the Rules of the Securities Act of 1933. We do not have
any intention of merging with another company or allowing ourselves to be
acquired by another company, or to act as a blank check company as defined in
Regulation C.
We recently renewed our domain name www.Relocate411.com. We are in the process
of developing our website.
On January 26, 2000, the stockholders of Relocate411.com, Inc., a New York
Corporation, completed a merger and stock exchange with Stateside Fundings,
Inc., a Delaware Corporation. Pursuant to same, Stateside Fundings filed
Articles of Amendment changing our name to Relocate 411.com, Inc. None of the
promoters of the blanks check company, Stateside Fundings, Inc., were related in
any way to the officers, directors, affiliates or associates of our present
company.
We have not been involved in any bankruptcy, receivership or similar proceeding.
We have not been involved in any material reclassification, merger,
consolidation, or purchase or sale of a significant amount of assets not in the
ordinary course of business.
Where You Can Find Us
At present we have no real property and maintain an office at the office of our
President, Darrell Lerner, at 142 Mineola Avenue, Roslyn Heights, New York
11577. Our telephone number is (516)773-3085.
Summary Financial Data
The following summary financial data should be read in conjunction with
"Management's Discussion and Analysis or Plan of Operation" and the Financial
Statements and Notes thereto, included elsewhere in this Prospectus. The
statement of operations and balance sheet data for the years ended November 30,
2003 and 2002 are derived from our audited financial statements included
elsewhere in this Prospectus.
Inception
Year Ended Year Ended (December 19, 1997)
November 30, 2003 November 30, 2002 to November 30, 2003
----------------- ----------------- --------------------
Statement of Operations Data:
Revenue $ 0 $ 0 $ 0
Net Losses $(18,427) $(15,780) $ (265,925)
Total Operating Expenses $ 17,927 $ 15,280 $ 340,005
Research and Development $ 0 $ 0 $ 0
General and administrative $ 17,927 $ 15,280 $ 158,117
As of As of
November 30, 2003 November 30, 2002
--------------------- -----------------
Balance Sheet Data:
Cash $ 9,092 20,519
Total Current Assets $ 9,092 20,519
Total Assets $ 12,065 24,992
Total Liabilities $ 25,922 20,422
Stockholders Equity (deficit) $(13,857) 4,570
1
RISK FACTORS
You should carefully consider the following risk factors and other information
in this prospectus before deciding to become a shareholder of our common stock.
Your investment in our common stock is highly speculative and involves a high
degree of risk. You should not invest in our common stock unless you can afford
to lose your entire investment and you are not dependent on the funds you are
investing.
Please note that throughout this prospectus, the words "we", "our" or "us" refer
to Relocate411.com, Inc. and not to the selling stockholders.
We Will Require Additional Funds to Achieve Our Current Business Strategy and
Our Inability to Obtain Additional Financing Could Slow Down or Cease the
Development of the Website and the Hiring Of Additional Employees and Management
to Assist in Daily Operations.
Upon the effectiveness of this prospectus we will not be receiving any proceeds
from this offering and we will need to raise additional funds through public or
private debt or sale of equity to achieve our current business strategy of
completing a website to be utilized in various real estate services. This
financing may not be available when needed. Even if this financing is available,
it may be on terms that we deem unacceptable or are adverse to your interests
with respect to dilution of book value, dividend preferences, liquidation
preferences, or other terms. Our inability to obtain financing can possibly
hinder and prevent our ability to complete development of the website,
technically update and upgrade the website on a frequent basis, keep current the
information on the website on a regular basis and hire employees and management
to assist in daily operations, which can all culminate in preventing growth, and
as a result, could require us to possibly cease our operations.
If we are unable to obtain financing on reasonable terms, we could be forced to
delay, scale back or eliminate certain product and service development programs.
In addition, such inability to obtain financing on reasonable terms could have
an impact on our ability to further develop and expand our website which may
cause the disclosure on our website to become outdated. In addition, failure to
raise additional capital could affect our ability to hire new employees and
management which is necessary for us to expand our business operations.
Our Independent Auditors Have Issued a Report in Which They Expressed
Substantial Doubt about Our Ability to Continue as a Going Concern.
The report of our independent auditors on our financial statements for the year
ended November 30, 2003 contains an explanatory paragraph which indicates that
we have recurring losses from operations. The deficit accumulated in the
developmental stage of operation as of November 30, 2003 was $247,498. This
report states that, because of these losses, there may be a substantial doubt
about our ability to continue as a going concern. This report and the existence
of these recurring losses from operations may make it more difficult for us to
raise additional debt or equity financing needed to run our business and is not
viewed favorably by analysts or investors. We urge potential investors to review
this report before making a decision to invest in Relocate411.
We Have a Limited Operating History That You Can Use to Evaluate Us and the
Likelihood of Our Success Must Be Considered in Light of the Fact That We are a
Development Stage Company with Limited Assets at Financial Resources.
2
We have not generated any revenues to date. We have no significant assets or
financial resources. We have been engaged solely in start-up activities and have
not commenced material operations in our core business of providing real estate
services online. The likelihood of the our success must be considered in light
of the problems, expenses, difficulties, complications and delays frequently
encountered by a small developing company starting a new business enterprise and
the highly competitive environment in which we will operate. To address these
risks, we must, among other things, respond to competitive developments;
continue to attract, retain and motivate qualified persons, research and develop
new technology; and commercialize services incorporating such technologies.
There can be no assurance we will be successful in addressing these risks or any
other risks. We have not been in business long enough to make a reasonable
judgment as to our future performance. There can be no assurance that we will be
able to successfully implement our business plan, generate sufficient revenue to
meet our expenses, operate profitably or be commercially successful. Since we
have a limited operating history of marketing our services to the public over
the Internet, we cannot assure you that our business will be profitable or that
we will ever generate sufficient revenues to meet our expenses and support our
anticipated activities. Even if we do achieve profitability, we may be unable to
sustain or increase profitability on a quarterly or annual basis in the future.
We expect to have quarter to quarter fluctuations in revenues, expenses, losses
and cash flow, some of which could be significant. Results of operations will
depend upon numerous factors, some of which are beyond our control, including:
o regulatory actions;
o market acceptance of our products and services; and
o new product and service introductions.
These conditions raise substantial doubt about our ability to continue as a
going concern. As we have such a limited history of operation, you will be
unable to assess our future operating performance or our future financial
results or condition by comparing these criteria against our past or present
equivalents.
If We Are Unable to Obtain Listings from Real Estate Agents, Brokers, Home
Builders, Multiple Listing Services and Property Owners, Then we Our Website
Will Not Be a Resourceful Tool For Our Clients And We Will Not Be Able To
Establish A Strong Customer Base.
Our success will depend in large part on the number of real estate listings
received from agents, brokers, home builders, MLSs and residential, rental and
commercial property owners. Many of our agreements with MLSs, brokers and agents
to display property listings will have fixed terms, typically 12 to 30 months.
At the end of the term of each agreement, the other party may choose not to
continue to provide listing information to us on an exclusive basis or at all
and may choose to provide this information to one or more of our competitors
instead. If owners of large numbers of property listings, such as large brokers,
MLSs, or property owners in key real estate markets choose not to renew their
relationship with us, our web site could become less attractive to other real
estate industry participants or consumers. Consequently, by not obtaining
listings or renewals, our website will not be a resourceful tool and profitable.
Since We must Dedicate Significant Resources to Marketing and Advertising our
Products and Services to Real Estate Professionals We May Not Have the Resources
to Develop Other Areas of Our Operations.
3
Because the annual fee for our services sold to real estate professionals is
expected to be relatively low, we will depend on obtaining sales from a large
number of these customers. It may be difficult to reach and enroll new
subscribers cost-effectively. A large portion of our sales force will target
real estate professionals who are widely distributed across the United States.
This hopefully, will result in relatively high fixed costs which will be
associated with our sales activities. However, since we intend to devote a
significant amount of our resources to marketing and advertising, we may not
have the funds necessary to continually develop our website and hire additional
management and employees.
We Will Require Additional Management Personnel with Expertise in the Real
Estate Industry in Order to Achieve Our Business Objectives and Our Failure to
Hire Such Personnel Will Slow Our Development.
We will require additional management, middle management and technical personnel
who have previous expertise in real estate in order to achieve our business
objectives. We may be unable to attract, assimilate or retain other highly
qualified employees. There is significant competition for qualified employees in
the computer programming and Internet industries. If we do not succeed in
attracting new personnel or retaining and motivating our current personnel, we
will be unable to provide all of the services such as relocation, listings of
real estate sales or rentals, mortgage information and other real estate related
information or content. We may be forced to limit our operations to only a
portion of our current business strategy which may limit our ability to become
successful. This may force our current management to handle such
responsibilities which would affect their ability to undertake their roles in
our business.
Future Sales of Shares by Darrell Lerner or Byron Lerner Could Cause the Price
of Our Common Stock to Drop Which Could Affect Our Ability to Enter Into
Agreements with Other Businesses in the Industry As Well as our Employees.
There are approximately 11,200,000 shares of our common stock outstanding, of
which approximately 8,600,000 (or 76.7%) are held beneficially by Darrell Lerner
and Byron Lerner. The Lerners will be able to sell these shares in the public
markets from time to time, subject to certain limitations on the timing, amount
and method of such sales imposed by SEC regulations. If Darrell Lerner or Byron
Lerner were to sell a large number of shares, the market price of our common
stock could decline significantly. Moreover, the perception in the public
markets that such sales by Darrell Lerner might occur could also drive down the
price of our common stock. If our stock price drops due to sales by Byron or
Darrell Lerner, it could affect our ability to enter into agreements with
companies in our industries as well as our employees. A lower stock price may
cause us to issue more shares than should be required as payment for certain
products and will cause our current shareholders to suffer significant dilution
to their shares.
We Do Not Expect to Pay Dividends, Investors Should Not Buy Our Common Stock
Expecting to Receive Dividends and Therefore Our Investors Can Only Profit From
Their Investment Is If The Price of Our Common Stock Increases.
We have not paid any dividends on our common stock in the past, and do not
anticipate that we will declare or pay any dividends in the foreseeable future.
Consequently, you will only realize an economic gain on your investment in our
common stock if the price appreciates. You should not purchase our common stock
expecting to receive cash dividends.
There Is No Assurance of a Public Market and that the Common Stock Will Ever
Trade on a Recognized Exchange.
4
There is no established public trading market for our securities. We currently
intend to seek a market maker to apply for a listing on the OTC Electronic
Bulletin Board in the United States. Our shares are not and have not been listed
or quoted on any exchange or quotation system. There can be no assurance that a
market maker will agree to file the necessary documents with the National
Association of Securities Dealers, which operates the OTC Electronic Bulletin
Board, nor can there be any assurance that such an application for quotation
will be approved or that a regular trading market will develop or that if
developed, will be sustained. In the absence of a trading market, an investor
may be unable to liquidate its investment.
USE OF PROCEEDS
The selling stockholders are selling shares of common stock covered by this
prospectus for their own account. We will not receive any of the proceeds from
the resale of these shares. We have agreed to bear the expenses relating to the
registration of the shares for the selling security holders.
LACK OF MARKET FOR OUR COMMON STOCK
There is no established public trading market for our securities. We intend to
seek a market maker to apply for a listing on the OTC Electronic Bulletin Board
in the United States. Our shares are not and have not been listed or quoted on
any exchange or quotation system.
DETERMINATION OF OFFERING PRICE
Our common stock is not traded on any national stock exchange and in accordance
with Rule 457, the offering price was determined by the price selling
shareholders (except Anslow & Jaclin, LLP) purchased shares in our July 2002
private placement memorandum. Represents shares owned by 35 of our selling
security holders which can be sold at a price of $.025 per share until our
shares of common stock are quoted on the OTC Bulletin Board, and thereafter, at
prevailing market prices or privately negotiated prices. The offering price is
not an indication of and is not based upon the actual value of Relocate411. The
offering price bears no relationship to the book value, assets or earnings of
Relocate411 or any other recognized criteria of value. The offering price should
not be regarded as an indicator of the future market price of the securities.
DIVIDENDS
To date, we have not declared or paid any dividends on our common stock. We
currently do not anticipate paying any cash dividends in the foreseeable future
on our common stock, when issued pursuant to this offering. Although we intend
to retain our earnings, if any, to finance the development and growth of our
business, our Board of Directors will have the discretion to declare and pay
dividends in the future. Payment of dividends in the future will depend upon our
earnings, capital requirements, and other factors, which our Board of Directors
may deem relevant.
PENNY STOCK CONSIDERATIONS
Broker-dealer practices in connection with transactions in "penny stocks" are
regulated by certain penny stock rules adopted by the Securities and Exchange
Commission. Penny stocks generally are equity securities with a price of less
than $5.00. Penny stock rules require a broker-dealer, prior to a transaction in
a penny stock not otherwise exempt from the rules, to deliver a standardized
risk disclosure document that provides information about penny stocks and the
risks in the penny stock market.
5
The broker-dealer also must provide the customer with current bid and offer
quotations for the penny stock, the compensation of the broker-dealer and its
salesperson in the transaction, and monthly account statements showing the
market value of each penny stock held in the customer's account. In addition,
the penny stock rules generally require that prior to a transaction in a penny
stock, the broker-dealer make a special written determination that the penny
stock is a suitable investment for the purchaser and receive the purchaser's
written agreement to the transaction.
MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
The following discussion and analysis provides information which management
believes is relevant to an assessment and understanding of our results of
operations and financial condition. The discussion should be read in conjunction
with our financial statements and notes thereto appearing in this prospectus.
The following discussion and analysis contains forward-looking statements, which
involve risks and uncertainties. Our actual results may differ significantly
from the results, expectations and plans discussed in these forward-looking
statements.
Overview
During the past year, our operations have been devoted primarily to developing a
business plan, developing and designing our website, preparing to bring the
website online and raising capital for future operations and administrative
functions. We currently have constructed an introductory webpage at
www.relocate411.com which outlines the products and services that we company
expect to offer and includes phone and email information. Currently, this
website is not complete and not does not provide any service to us. Once the
website is complete it will be utilized in various real estate services such as
relocation, listings of real estate sales or rentals, mortgage information and
other real estate related information or content. We have not spent any money
for research and development. Development stage expenses during the twelve
months ended November 30, 2002 and November 30, 2003 were $17,927 and $15,280
respectively. The expenses incurred were primarily due to salaries and benefits
as well as various consulting, managerial and professional services in
connection with our development of a business plan and the corporate formation.
On-going increases to development stage expenses are anticipated. As of
January 1, 2004 we have $9,074 in cash available to us.
Plan of Operation
During the next twelve months, we expect to take the following steps in
connection with the development of our business and the implementation of our
plan of operations:
* Initiate substantive construction of our corporate website. We currently
have constructed an introductory webpage at www.relocate411.com which
outlines the products and services that we expect to offer and such website
includes our phone and email information. We anticipate that within thirty
to ninety days, a comprehensive and well designed site will be in place
including additional sub-pages, navigational tools and a more detailed
description of our products and services. At this time, the site will be
used as a business tool and showcase for potential partners and
affiliations. In addition, we anticipate that links to the partners that we
have established affiliations with will go live within this time period.
Based on initial proposals and discussions, we anticipate that we can
achieve this preliminary stage of our website for under $500.
The next stage of web development will include the introduction of detailed
statistical information, town profiles, crime rates etc. We anticipate
completing this stage in the first quarter of 2004 for between $1,000 and
$3,000. In mid 2004 we anticipate adding the first real estate listings to
the site subject to agreements reached with partners and real estate
agencies.
6
Incorporation of these listings could run from $2,500 to $100,000 depending
upon the level of detail in these listings and the nature of the
partnerships reached. If we reach partnerships whereby we incorporate other
companies listings into our site and co-brand with partners, programming
will be far simpler and thereby cheaper than if we have to offer users the
ability to design their own listings.
Further website expansion in 2004 will be in various phases subject to
revenue and capital availability.
* within 30 days of effectiveness of this prospectus seek a listing for
quotation on the NASD OTC Bulletin Board. We anticipate that the date of
the application for listing of quotation will be by the end of the year and
there are no fees to us for such filing. At such time we will also begin
discussions with various potential real estate consultants to assist us, as
well as companies within the industry to partner with. We have already
commenced the process of searching for consultants and partners and will
continue to do so in an ongoing manner and we believe that such consultants
will also be secured by the end of year. Our preference would be to
structure deals that have little cash outlays and reward consultants with
stock and percentages of revenue and profits, however, consultants could
require monthly fees of $2,000 to $8,000 a month. We do not anticipate any
costs being involved with our initial partnership as we will attempt to
strike partnership deals that are revenue and profit-sharing arrangements;
* within 60 days of effectiveness of this prospectus, identify funding
options to raise additional capital for the company and key geographic
markets to target during our first phase of operations. We intend to seek
funding options such as equity or debt financing. However, currently we
have had no preliminary discussions with any group regarding such
financing. As we develop and the overall economic climate improves, we
expect to be in a better position to raise outside capital in early 2004.
The only associated costs for such funding may be the due diligence costs
or expenses associated with putting a financing deal together. The costs
would be as much as 5%-6% of the funding raised, but any such fees would be
taken out of the closing of the funding transaction. Searching for capital
will likely be an ongoing process even if we raise an initial amount of
funds. We expect to begin focusing on which markets to initially target
during the fourth quarter of 2003. The only potential expenses would be if
we decide to pay for outside research or if business trips are required.
There are presently no plans for either, however, should a business trip be
necessary, we anticipate that our budget for any such trip would be about
$1,000; and
* hire and train additional staff, including management, marketing staff, and
administrative personnel; We anticipate hiring at a minimum 10 employees in
the next twelve months. We anticipate hiring additional employees beginning
in early 2004. The number of employees hired will be dependent upon a
variety of factors including our progress in implementing our business plan
and available capital. Ultimately, we expect to require approximately
$50,000 per month for payroll. We will need additional capital to meet
these expenses and will scale down accordingly until we are in such a
position. The hiring of employees will be an ongoing process during the
company's existence.
Each of these steps present significant risks with respect to our ability to
implement our plan of operations, which are discussed in the "Risk Factors"
section of this prospectus. You should carefully review these risks prior to
participating in the offering.
We intend to grow through internal development and strategic alliances.
Because of uncertainties surrounding our development and limited operating
history, we anticipate incurring development stage losses in the foreseeable
future. Our ability to achieve our business objectives is contingent upon its
success in raising additional capital until adequate revenues are realized from
operations.
7
Capital Resources and Liquidity.
As of January 1, 2004, we had approximately $9,074 in cash. Our general and
administrative expenses are expected to average $1,500 per month for the next 12
months. We believe we have sufficient cash to meet our minimum development and
operating costs for the next six to seven months. Unless we decrease our
overhead, we will need to raise additional capital to continue our operations
past this time, and there is no assurance we will be successful in raising the
needed capital. Our expenses of $15,000 for legal and accounting fees for this
offering have been paid in full and we do not anticipate any other fees with
regard to this offering.
On May 25, 2000, we loaned $1,117,602 to Teltran International Group, Ltd.
Teltran was a publicly held company presently trading on the NASD OTC Bulletin
Board, and some of its stockholders and officers own approximately 42% of
Relocate. The related stockholders and officers were Jimmy Tubbs and Byron
Lerner who was the President and Chief Executive Officer of Teltran. The loan
matured November 25, 2000 with interest at 9-1/2% annually and is secured by a
promissory note. The reason we made this investment was that we had extra funds
at such time and we believed this note was a strong investment and would provide
a good return on our investment In addition, the note was secured by 600,000
shares each of common stock of Teltran and Antra Holdings Group, Inc. Antra was
also a publicly held company traded on the NASD OTC Bulletin Board and therefore
we believed that we had enough security for this loan. Teltran owns the Antra
shares which were acquired in April, 1999 when each company originally exchanged
2,000,000 shares of their common stock. Additionally, Teltran pledged its one
share of Teltran Web Factory, Ltd., a wholly owned foreign subsidiary of
Teltran. Neither Teltran International Group, Ltd. or Antra Holdings Group, Inc.
trade on the OTC Bulletin Board. The Teltran shares are currently trading on the
Pink Sheets with a market price of $.004 per share and Antra Holdings Group
shares are trading on the Pink Sheets with a market price of $.005. As a result
of the default on this loan we suffered a total loss of $1,117,602 plus
interest.
Teltran also issued to Relocate 250,000 warrants exercisable from May 25, 2000
to May 24, 2005 to purchase Teltran common stock at a price of $1.10 per share.
Teltran defaulted on the loan. As settlement for such default, Teltran agreed to
sell its interest in Teltran Web Factory, Ltd to the NCT Group Ltd., a
Connecticut company, for preferred stock in NCT (Note that at the time of the
transaction, NCT Group, Inc., the consolidated public company, had a common
stock trading value of $0.2475 per share, but a negative book value. NCT Group,
Inc. subsequently retired its preferred stock during the year ended December 31,
2001.). Such preferred stock was transferred to us as consideration for
settlement for repayment of the loan and our agreement to tender our interest in
Teltran Web Factory, Ltd. We then used all of such preferred NCT shares to buy
out all common stock and warrants in Relocate 411.com belonging to the original
investors as follows:
Name Dollars Shares Warrants
- -------------------- --------- --------- ---------
Austost Anstalt Schaan $ 500,000 1,500,000 1,500,000
Balmore Funds, S.A $ 500,000 1,500,000 1,500,000
Amro International, S.A $ 250,000 791,250 791,250
ICT N.V $ 50,000 150,000 150,000
Leval Trading, Inc. $ 150,000 450,000 450,000
Nesher, Inc. $ 50,000 150,000 150,000
Talbiya B. Investments $ 50,000 166,500 166,500
Libra Finance, S.A -- 198,000 198,000
J. Hayut -- 139,500 139,500
Hyett Capital Ltd. -- 69,750 69,750
8
None of these entities set forth above are affiliated to us or either Byron and
Darrell Lerner. Although we lost money on this loan to Teltran, as part of the
settlement for this default we received preferred shares in NCT which we were
able to use to cancel the 5,115,000 outstanding shares and 5,115,000 outstanding
warrants set forth above. Based on the last filing undertaken by NCT, the
following sets forth the officers, directors and principal shareholders of NCT:
Michael J. Parrella
John J. McCloy
Sam Oolie
Irene Lebovics
Cy E. Hammond
Jonathan M. Charry
Mark Melnick
Carole Salkind
Crammer Road LLC
Alpha Capital Aktiengesellschaft
Acme Associates, Inc.
Libra Finance S.A.
Austost Anstalt Schaan
Balmore S.A.
To summarize the above related party transaction, Relocate411.Com loaned 1.2
million dollars to Teltran in 2000. Teltran and Relocate had common investors.
Relocate received stock in Teltran and Antra as security for such loan. An
additional part of the security was Teltran's 1 share ( representing full
ownership) of the Web Factory Ltd., a UK company. Teltran proceeded to sell the
Web Factory to NCT Group Ltd (NCTI) for about 10 million dollars in NCT
preferred stock in a pending NCT offering in the UK (The Artera Group was the
name of the UK subsidiary being created by NCT).
Teltran was subsequently unable to pay back the loan and it was agreed that
Relocate would receive several million pounds of the preferred stock in this
offering in return for Teltran defaulting on the loan as full settlement, and in
return for Relocate relinquishing the collateral (the Web Factory ownership).
That full amount of NCT preferred stock was then used to buy out the original
investors at which point their shares were returned and cancelled. The stock in
Teltran and Antra has no real market value. The related stockholders and
officers were Jimmy Tubbs and Byron Lerner who was the President and Chief
Executive Officer of Teltran.
Cash Requirements and Additional Funding
The only cash requirements we presently have are for professional fees. We
estimate this amount to be approximately $1,500 per month. Our present cash
available should be able to satisfy this for the next six to seven month period.
Due to difficult market conditions, we are focusing on growing through strategic
alliances without the necessity of outlaying cash.
PERIOD FROM DECEMBER 19, 1997 (DATE OF INCEPTION) THROUGH NOVEMBER 30, 2003
Our cumulative net losses since the inception are attributable to the fact that
we have not derived any revenue from operations to offset our business
development expenses.
Net loss since inception has amounted to $(265,925), primarily consisting of
salaries, accounting and legal fees, website development fees, rent and general
administrative expenses. The accounting and legal expenses were in connection
with our annual and quarterly regulatory filings.
TWELVE MONTHS ENDED NOVEMBER 30, 2003 AND NOVEMBER 30, 2002
Development stage income during the twelve months ended November 30, 2003 was $0
as compared to $0 for the twelve months ended November 30, 2002. Expenses for
the twelve months ended November 30, 2003 were $17,927 primarily consisting of
accounting and legal fees which were related to our quarterly regulatory
filings. Expenses for the twelve months ended November 30, 2002 were $15,280
primarily consisting of accounting and legal fees in connection with our daily
operations and quarterly regulatory filings.
9
BUSINESS - OUR COMPANY
A Summary Of What We Do
We are a development stage Internet based company whose goal is to develop a web
site to be utilized in various real estate services such as relocation, listings
of real estate sales or rentals, mortgage information and other real estate
related information or content.
At present we have no real property and we maintain an office at the officer of
our President, Darrell Lerner, at 142 Mineola Avenue, Roslyn Heights, New York
11577. Our corporate staff consists of three part time people with experience in
the real estate industry. Our telephone number is (516) 773-3085.
Predecessor
On December 19, 1997, we were organized in the State of Delaware under the name
of Stateside Fundings, Inc. We initially adopted a fiscal year ending November
30. On January 26, 2000, the stockholders of Relocate411.com, Inc, a New York
corporation, completed a merger and stock exchange with us. At the same time as
the merger, we issued 5,175,000 shares of our common stock pursuant to a private
placement offering and received net proceeds of 1,354,250.
The net proceeds received were after a payment of $150,000 to redeem 4,100,000
shares of our common stock from our founder. As part of the merger and stock
exchange, we issued 6,600,000 shares of our common stock to the shareholders of
Relocate411.com, Inc, (New York corporation) in exchange for receiving all of
the shares (66 shares) of Relocate411.com, Inc. Relocate411.com, Inc. became our
wholly owned subsidiary. On January 27, 2000, we filed a certificate of
amendment changing our name to Relocate411.com, Inc.
Relocate411.com, Inc., the New York corporation was a predecessor of our company
as that term is defined by Item 405 of Regulation C. Relocate 411.com, Inc, the
New York corporation, which was incorporated in August 1999, had the same
business plan as us in that it was a are a development stage Internet based
company whose goal is to develop a web site to be utilized in various real
estate services such as relocation, listings of real estate sales or rentals,
mortgage information and other real estate related information or content. As
set forth the merger between us and Relocate411.com, Inc., New York corporation,
was completed in January 2000. Prior to such time the business plan of Stateside
Fundings, Inc. was to function as a "blank check company" as that term is
defined in Rule 419 of Regulation C. None of the promoters of the blanks check
company, Stateside Fundings, Inc., were related in any way to the officers,
directors, affiliates or associates of our present company.
Industry Background
The Real Estate Industry
The real estate industry accounts for approximately 15% of the gross domestic
product of the United States and is therefore one of the largest sectors of the
economy. The real estate industry is commonly divided into the residential and
commercial sectors. The residential sector includes the purchase, sale, rental,
remodeling and new construction of homes and represents approximately $1
trillion per year. The commercial sector includes the lease, resale, and new
construction of property for businesses and represents approximately $300
billion per year.
The Residential Real Estate Market
Buying a home is the largest financial decision, and represents one of the most
difficult and complex processes, most consumers will ever undertake. The process
of finding a home begins a lifelong cycle which most consumers will move through
once every seven to eleven years. This cycle tracks major life events such as
employment, marriage, children and retirement.
10
A significant portion of the United States economy has evolved around helping
consumers as they navigate through this home and real estate cycle. An enormous
network of support services and products exists to assist consumers in finding a
property, building a property, renting or buying a property, moving, owning a
property and selling a property.
Find a Property. The following real estate professionals and organizations
assist consumers in finding a property:
Real Estate Agents. Real estate agents are independent contractors that are
licensed to negotiate and transact the sale of real estate on behalf of
prospective buyers and sellers. There are over 1.0 million real estate agents in
the United States. Consumers spend in excess of $30 billion annually for
assistance with the finding, buying and selling of residential property.
Real Estate Brokers. Real estate brokers are paid a commission to bring buyers
and sellers together and assist in negotiating contracts. Real estate brokers
often have their own independent offices and may employ other licensed real
estate agents. There are over 100,000 real estate brokers in the United States.
Residential Franchisers. There are six major residential franchisers in the
United States: Century 21, Coldwell Banker and ERA, which collectively comprise
the Cendant franchise; RE/MAX; Prudential; and Better Homes & Gardens. These
franchisers together represent thousands of independently owned and operated
real estate offices and hundreds of thousands of real estate professionals in
the United States.
Multiple Listing Services. MLSs operate proprietary networks that provide real
estate professionals with listings of properties for sale, and are regulated by
a governing body of local brokers and/or agents.
There are approximately 800 MLSs nationwide that aggregate local property
listings by geographic location. We estimate that, as of June 30, 2000, MLS
provided approximately 1.47 million resale home listings nationwide.
National Association of Realtors. The NAR is the largest trade association in
the United States that represents real estate professionals. The NAR consists of
residential and commercial realtors, including brokers, agents, property
managers, appraisers, counselors and others engaged in all aspects of the real
estate industry. The NAR has approximately 720,000 members.
Build a Property. In addition to the real estate professionals and organizations
involved in finding a home, the new home market is also served by a large group
of dedicated professionals including:
o Home Builders. New homes are built primarily by a limited number of
national home builders and a much larger number of local volume and
custom builders. In 1999, home builders built over 800,000 homes,
generating over $160 billion in sales.
o National Association of Home Builders. The NAHB is the second largest
real estate trade association in the United States. As of December 31,
1999, the NAHB's members include approximately 197,000 firms.
Approximately one-third of the NAHB's members are home builders and/or
remodelers, and the remainder work in closely related fields within
the residential real estate industry, such as mortgage, finance,
building products, and building services including subcontractors.
Rent a Property. Today, over 30 million households in the United States reside
in rental housing. In addition to real estate agents and brokers who assist in
the leasing of residential rental units, professionals serving this segment of
the market include the following:
11
o Property Owners. Property owners include owners of individual
apartment units, multi-family apartment complexes, individual single
family rental homes or other residential rental properties. Property
owners may lease and operate their rental properties themselves or
outsource those functions to other real estate professionals, such as
property managers. The residential rental ownership market is highly
fragmented, with the 50 largest owners of multi-family apartment
complexes owning approximately 10% of all apartment rental units in
the United States.
o Property Managers. Property managers are typically responsible for
leasing available rental units, collecting rents, and maintaining the
property. Property managers typically manage a number of apartment
complexes, and will employ third party leasing agents to assist them
with the leasing function. The property manager market is also highly
fragmented, with the 50 largest property managers, many of whom also
own their properties, managing approximately 10% of all apartment
rental units in the United States.
Buy and Sell a Property. Because of the complexity and size of the purchase or
sale transaction, consumers buying or selling a home typically rely upon a
series of professionals, including real estate agents and ancillary service
providers, such as mortgage brokers, title agents, escrow agents, attorneys,
inspectors and appraisers. These professionals and ancillary service providers
offer products and services, such as mortgages, title insurance, credit reports,
appraisals and inspections, that generated in excess of $49 billion in
transactional fees in 1999.
Move. Every time consumers buy, sell or rent a home, they need assistance with
Various relocation related services, such as insurance and moving supplies and
services. We estimate that consumers spend over $100 billion each year for home
and apartment moves including moving services and related product purchases. In
addition, real estate transactions often lead to significant lifestyle changes
for consumers, including changing neighborhoods, schools, shopping malls, banks,
grocers, cleaners and other retail relationships. As a result, consumers need
information about the wide range of available product and service alternatives
relating to all aspects of their relocation.
Maintain a Property. Ownership represents the longest portion of the home and
real estate life cycle. Homeowners purchase a large number of household and home
related products including furniture, appliances, hardware and supplies. During
this phase of the home and real estate life cycle, homeowners also require a
number of ancillary services, relating to such activities as home maintenance
and repairs, refinancing, remodeling and landscaping. As a result, homeowners
are continuously seeking sources of information to assist them in locating
providers of these products and services.
Challenges in the Real Estate Market
Every participant in the home and real estate life cycle faces a unique set of
challenges:
Home Buyers. In order to dispel the fear of purchasing the wrong home or paying
too much for a home, consumers must be assured that they have considered all
available options. Therefore, home buyers require an extensive amount of
information and several decision tools to help bolster confidence during the
home buying process. To make an informed decision, consumers need access to a
comprehensive listing of homes for sale and require information about specific
neighborhoods and listed prices of comparable homes for sale in a given
geographic location.
Once a home has been selected, consumers must consider a broad range of related
services, including mortgage, title, escrow, insurance, moving and relocation
services as well as remodeling alternatives. As a result, consumers are
continually searching for additional information and resources to assist them in
every aspect of the real estate transaction and need a comprehensive, convenient
and integrated source of information that assists them in each step of the
process.
12
Real Estate Agents and Brokers. Real estate agents and brokers depend on
attracting and retaining customers in order to generate increasing numbers of
transactions. Due to its size and complexity, it is not uncommon for the real
estate transaction to take several months to complete. As a result, the job of
real estate agents and brokers is complicated by a variety of factors. Therefore
real estate agents and brokers are looking for additional opportunities to
market their services, become more productive and compete more effectively for
transactions. In addition, they seek greater efficiency in disseminating
information to their prospective clients and are looking for tools that can help
them streamline their current practices.
Home Builders. Home building and real estate professionals who focus on new
homes and new home developments also depend on attracting and retaining
customers in order to sell new properties in a timely manner. However, home
builders have not developed an infrastructure similar to an MLS to aggregate,
update and share data regarding available inventory. Nor do they have the
infrastructure to communicate this information to potential buyers. As a result,
home building and real estate professionals continue to seek new ways to market
their products and services and inform prospective home buyers of the
availability of new properties.
Renters, Property Managers and Owners. To make an informed decision, renters
need access to comprehensive information about available rental units, specific
neighborhoods and rental prices in a given geographic location. Because of the
high turnover rate in rental units, property managers and owners must regularly
attract new tenants to minimize their vacancy rates. We estimate that
approximately $1.8 billion was spent in 1999 to market apartments and rental
homes. The rental market has not developed a central repository for
comprehensive listings accessable by potential renters nationwide and property
managers and owners are continuously seeking to market their available units in
a cost-effective manner.
Ancillary Service Providers. Consumers require a variety of products and
services throughout the home and real estate life cycle. The real estate
transaction provides service providers and retailers the opportunity to target
consumers at a time when they are shifting their buying patterns. Providers and
retailers of these products or services need an effective mechanism to reach
consumers who are most interested in their offerings. Ideally, these providers
of products and services would have a centralized location where they could
advertise their offerings to a target group of consumers who are engaged in the
real estate process.
The Internet and Real Estate
The emergence and acceptance of the Internet is fundamentally changing the way
that consumers and businesses communicate, obtain information, purchase goods
and services and transact business. Because of its size, fragmented nature and
reliance on the exchange of information, the real estate industry is
particularly well suited to benefit from the Internet. The real estate industry
currently spends $3.5 billion a year on advertising and print media. Traditional
sources of advertising and print media, including classifieds and other off-line
sources, are not interactive and are limited by incomplete and inaccurate data
that is local in scope and is typically disseminated on a weekly basis. These
traditional sources also lack content that can be searched based on specified
terms, a centralized database of information and the ability to conduct two-way
communications. The Internet offers a compelling means for consumers, real
estate professionals, home builders, renters, property managers and owners and
ancillary service providers to come together to improve the dissemination of
information and enhance communications.
We plan on pioneering the use of the Internet to bring the real estate industry
online and to enable real estate industry participants to benefit from the
Internet.
13
Our Strategy
Our objective is to provide people who are unfamiliar with a new city with the
resources they need to make an informed decision on where exactly they want to
move to. The key elements of our strategy will include connecting consumers and
professional service providers by increasing the content and relevant data
available on our web site.
Increase Usage of Our Web Site. We will seek to increase the number of people
using our web site as well as the amount of time they will spend there. We plan
to develop distribution arrangements with Internet portals. We intend to pursue
distribution relationships with high traffic web sites and web sites offering
real estate related services. We also expect to increase our marketing efforts
in traditional media, such as newspaper advertisements, radio and television
promotions. We also intend to add features and content to our web site designed
to encourage users to spend more time on our web site.
Industry Professionals. We plan on developing relationships with key real estate
industry participants, such as the NAR, the NAHB, MLSs, brokers and builders in
order to provide us with a distinct competitive advantage. These relationships
will provide us with opportunities to market our services to their members.
These relationships also allow us to provide consumers with comprehensive
information and resources related to all aspects of the home and real estate
life cycle, such as real estate listings and neighborhood information,
directories of REALTORS and real estate news. We plan to pursue additional or
broader listing and marketing relationships with key industry participants.
Develop and Extend Our Brand Recognition. As more consumers and real estate
professionals utilize the Internet for their real estate needs, we believe that
brand awareness will provide us with a significant competitive advantage. We
plan to expand our marketing efforts with advertising campaigns in traditional
media as well as on the Internet in order to build greater recognition for our
web site.
Incorporate Emerging Internet Technologies. We believe the evolution of the
Internet will provide us with the opportunity to move more real estate related
information and activities onto the Internet.
Products and Services
Our site will enable potential home buyers to browse, free of charge, from our
searchable database. We plan to have content arrangements with Multiple Listing
Services across the United States to provide the listings. Our property listings
will typically provide information that is significantly more detailed and
timely than that included in alternative media channels, such as newspaper
classified advertisements. A Multiple Listing Service operates proprietary
networks that provide real estate professionals with listings of properties for
sale and are regulated by a governing body of local brokers and/or agents. We
will receive the balance of our listings from real estate brokers. We will also
provide "for sale by owner" listings.
We plan on providing decision support tools, such as mortgage calculators and
finance worksheets, information concerning the home buying and selling process
and features such as city profiles that aid users in evaluating the attributes
of particular neighborhoods or geographic locations, including but not limited
to school district ratings, neighborhood profiles, restaurant ratings,
information on places of worship and local social events.
Our Find a Home feature will allow potential home buyers to search our database
of home listings. The user will select a geographic region or a specific MLS
property identification number. The user can refine their home search by
selecting neighborhood and home characteristics.
14
Our search engine will return a list of homes ranked by their conformity to the
users' search criteria. The search results will provide pictures of the homes,
if available, descriptions of the properties, the name and contact information
of the agent that represents the home seller and, for certain homes, virtual
tours. For agents, the consumer's search results will also provide a direct link
to their Personalized web site displaying each property listed by the agent.
Our Find a Realtor feature will allow a user to contact a realtor to buy or sell
a home in a given geographic area. The user will be able to search for realtors
who specialize in the cities or zip codes specified by the user. Users will also
be able to search by keyword and/or by office name or name of the realtor. We
will provide a list of realtors meeting the search criteria, which includes a
link to each realtor's home page, their office name, phone and fax numbers,
their e-mail address and a brief description of their specialty.
We intend to create a separate area of the site that will cater specifically to
college students by compiling an extensive list of off-campus housing listings
at major universities throughout the country. This particular area of the real
estate market is one of constant turnover and large demand. Students move into
new off-campus housing on a year to year basis and we feel we can fill the
demand that exists among both the students seeking housing and the owners trying
to rent their properties. Access to these listings will be free to site visitors
and those who place the listings online will be charged a small listing fee. We
anticipate advertising in college newspapers and publications as well as through
word of mouth.
Our Find a Neighborhood feature will enable users to locate desired
neighborhoods by searching information such as quality of schools, crime rate,
average home cost, and urban/rural profiles. Once a profile has been
established, our search engine will return a map ranking geographic areas
according to the user's criteria.
Real Estate Agents. This search will enable users desiring to find a realtor to
assist them in their new home search in a specified geographic area. After
entering search criteria, the results will display a list of agents by real
estate office. By clicking on the agent's name, users go to the selected agent's
home page. Links to real estate office are also available. Properties listed on
our web site will include large multi-family apartment complexes as well as
smaller, single family homes.
Multi-Family Apartment Complexes. We will offer property owners and managers of
multi-family apartment complexes the opportunity to list basic rental
information free of charge. Basic listing information is a text-based
presentation of information which will summarize rental listings in a manner
similar to that which might be found in a local listing publication. We will
also offer enhanced features to owners and managers for a monthly subscription
fee. These enhanced features can include:
o color photos and detailed property and rental unit descriptions for
all unit types, including monthly rental ranges;
o premium placement of listings at the top of rental search results
returned, as well as links to an owner's or manager's web page;
o maps and driving instructions to the property;
o inquiries from renters inquiring about specific properties sent by
electronic e-mail; and
o detailed monthly reports of web page and lead activity.
Single Family Homes. Owners of individual units or small buildings listed with a
realtor, and in some areas other real estate professionals, can list their
available rental units with the individual unit listing service. The owner
completes a form which contains up to 24 standard features about the unit and
its amenities.
15
The owner can also designate special amenities about the unit and have a photo
of the unit posted for an additional fee. We plan on offering these services to
real estate professionals on a subscription basis. We plan on selling Internet
banner advertising and sponsorships on our web site to advertisers other than
property owners and property managers, and plan to offer a fee-based consumer
service.
The consumer service allows consumers to receive access to less widely
disseminated rental listings in markets where vacancies are very low, such as in
New York City, San Francisco and Seattle.
Property Listings. The property listings feature will provide access to
commercial property listings by linking to a comprehensive collection of web
sites containing commercial property listings. By providing access to a
centralized resource for commercial property links, we will enable commercial
real estate professionals to connect quickly and easily to web sites containing
listings that were not previously accessible from a single source. Real Estate
Industry Relationships
We plan on establishing relationships with a number of important participants in
the real estate industry. These will include relationships with the NAR and the
NAHB, our content relationships with brokers, homebuilders and MLSs and our
marketing relationships with major real estate franchises.
Sales and Marketing
An important element of our business strategy is to build brand recognition
around our web site and our products and services.
Competition
We believe that the principal competitive factors in attracting consumers to our
web site will be:
o the total number of listings and the number of listings for the
consumer's specific geographic area of interest available on our web
site;
o the parties with which web site operators have listing, marketing or
distribution relationships;
o the quality and comprehensiveness of general real estate related,
particularly home-buying, information available on our web site;
o the availability and quality of other real estate related products and
services available through our web site; and
o the ease of use of our web site.
We believe that the principal competitive factors in attracting advertisers,
content providers and real estate professionals to our web site will be:
o the number of visitors to our web site;
o the average length of time these visitors spend viewing pages on our
web site;
o our relationships with, and support for our services by, the NAR and
the NAHB; and
o our relationships and national contracts with the major home builders
and rental property owners and managers in the United States.
Our main existing and potential competitors for home buyers, sellers and renters
and related content include:
16
o web sites offering real estate listings together with other related
services, such as Apartments.com, CyberHomes, HomeHunter.com,
HomeSeekers, iOwn, LoopNet, Microsoft's HomeAdvisor,
NewHomeNetwork.com and RentNet;
o web sites offering real estate related content and services such as
mortgage calculators and information on the home buying, selling and
renting processes;
o general purpose consumer web sites, such as AltaVista and Yahoo that
also offer real estate-related content; and
o traditional print media such as newspapers and magazines.
Our main existing and potential competitors for advertisements may include:
o general purpose consumer web sites such as AltaVista, America Online,
Excite, Lycos, Netscape's Netcenter and Yahoo;
o general purpose online services that may compete for advertising
dollars;
o online ventures of traditional media, such as Classified Ventures; and
o traditional media such as newspapers, magazines and television.
The barriers to entry for web-based services and businesses are low, making it
possible for new competitors to proliferate rapidly. In addition, parties with
whom we plan to have listing and marketing agreements could choose to develop
their own Internet strategies or competing real estate sites upon the
termination of their agreements with us. Many of our existing and potential
competitors have longer operating histories in the Internet market, greater name
recognition, larger consumer bases and significantly greater financial,
technical and marketing resources than we do.
Operations
We will maintain our computer system at our corporate headquarters. Our
operations are dependent upon our ability to protect our systems against damage
from fire, hurricanes, power loss, telecommunications failure, break-ins,
computer viruses and other events beyond our control. We will maintain access to
the Internet through third-party providers. Any disruption in our Internet
access, failure of our third party providers to handle higher volumes of users
or damage or failure that causes system disruptions or other significant
interruptions in our operations could have an adverse effect on our business.
GOVERNMENT AND STATE REGULATION
Internet Law
Our website is not currently subject to direct federal laws or regulations
applicable to access, content or commerce on the Internet. However, due to the
increasing popularity and use of the Internet, it is possible that a number of
laws and regulations may be adopted with respect to the Internet covering issues
such as:
* user privacy;
* freedom of expression;
* pricing;
* content and quality of products and services;
* taxation;
* advertising;
* intellectual property rights; and
* information security
17
The adoption of any such laws or regulations might decrease the rate of growth
of internet use, which in turn could decrease the demand for our services,
increase the cost of doing business or in some other manner have a material
adverse effect on our business, financial condition and operating results. In
addition, applicability to the Internet of existing laws governing issues such
as property ownership, copyrights and other intellectual property issues,
taxation, libel, obscenity and personal privacy is uncertain. The vast majority
of such laws were adopted prior to the advent of the Internet and related
technologies and, as a result, do not contemplate or address the unique issues
of the Internet and related technologies.
EMPLOYEES
We employ three people on a part-time basis. We will employ additional people as
we continue to implement our plan of operation. None of our employees are
covered by a collective bargaining agreement, and we believe that our
relationship with our employees is satisfactory.
DESCRIPTION OF PROPERTY
We currently use office space in a building located at 142 Mineola Avenue,
Roslyn Heights, New York. The primary tenant is Darrell Lerner, our President.
The lease for such premises is in the name of International Global
Communications, Inc., a company owned by Byron Lerner, one of our shareholders
and the father of Darrell Lerner, our sole officer and director. The lease
provides for monthly rental payments of $475 and expired February 28, 2003.
There was an extension period that commenced March 1, 2003 until February 28,
2004 at the rate of $500 per month.
LEGAL PROCEEDINGS
To the best of our knowledge, there are no known or pending litigation
proceedings against us.
MANAGEMENT
DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth information about our executive officers and
directors.
NAME AGE POSITION
- ---- --- --------
Darrell Lerner 28 President, Chief Executive Officer,
Treasurer and Director
Darrell Lerner has been our President, Chief Executive Officer, Treasurer and
Director since the merger on January 26, 2000. From April 1998 to the present,
Mr. Lerner has been the president and director of Fantasy Sports Net, Inc., an
internet company which provides interactive fantasy sports games and sports
related information. Presently, such company is inactive. Mr. Lerner worked as a
consultant for New Medium Enterprises Inc. (OTC BB: NMEN), a public company,
during the second half of 1999. His responsibilities included meeting with
website companies on behalf of New Medium Enterprises Inc. Mr. Lerner is a Cum
Laude graduate of Hofstra University and a graduate of Hofstra Law School. Mr.
Lerner has a degree in business administration/finance and extensive experience
in telecommunications and journalism. Mr. Lerner shall devote 50% of his time
working for us. Mr. Lerner does not have an employment agreement. At present, we
do not anticipate entering into an employment agreement with Mr. Lerner. Darrell
Lerner is the son of Byron Lerner, one of our principal shareholders,
We intend to expand our Board of Directors, and to seek to recruit and retain a
Chief Financial Officer. We feel that In the future it will be appropriate to
expand our board of directors. Current efforts are underway to recruit
additional members of management, as well. However, we do not expect to appoint
additional Directors or management such as the CFO for the foreseeable future.
18
All officers and directors listed above will remain in office until the next
annual meeting of our stockholders, and until their successors have been duly
elected and qualified. There are no agreements with respect to the election of
Directors. We have not compensated our Directors for service on our Board of
Directors, any committee thereof, or reimbursed for expenses incurred for
attendance at meetings of our Board of Directors and/or any committee of our
Board of Directors. Officers are appointed annually by our Board of Directors
and each Executive Officer serves at the discretion of our Board of Directors.
We do not have any standing committees. To date no compensation has been accrued
for salaries to Darrell Lerner and Byron Lerner. Salaries were expenses for our
management in the amount of $42,000 and $139,888 for 2001 and 2000 respectively.
None of our Officers and/or Directors have filed any bankruptcy petition, been
convicted of or been the subject of any criminal proceedings or the subject of
any order, judgment or decree involving the violation of any state or federal
securities laws within the past five (5) years.
BOARD OF DIRECTORS
The board of directors consists of one director.
BOARD COMMITTEES
The Board of Directors has established no committees.
EXECUTIVE COMPENSATION
Darrell Lerner has been our President, Chief Executive Officer and Treasurer
since inception. To date, we have not entered into any employment agreements
with our officers and do not presently intend to do so. Mr. Lerner received
$21,000 in restricted corporate stock as compensation for services performed
during the 2001 fiscal year. The following table sets forth information
concerning annual and long-term compensation, on an annualized basis for the
2003 fiscal year, for our Chief Executive Officer and for each of our other
executive officers (the "Named Executive Officers") whose compensation on an
annualized basis is anticipated to exceed $100,000 during fiscal 2003.
SUMMARY COMPENSATION TABLE
ANNUAL COMPENSATION LONG TERM COMPENSATION
NAME AND RESTRICTED SECURITIES OPTIONS
PRINCIPAL FISCAL OTHER ANNUAL STOCK UNDERLYING (NO. OF ALL OTHER
POSITION YEAR SALARY BONUS COMPENSATION AWARDS SHARES) COMPENSATION
- -------- ---- ------ ----- ------------ ------ ------- ------------
Darrell Lerner
President Chief
Executive
Officer and
Treasurer 2001 $0 0 0 $21,000 0 0
Darrell Lerner 2002 $0 0 0 $0 0 0
Darrell Lerner 2003 $0 0 0 $0 0 0
(1) Our fiscal year ends November 30.
Our shareholders may in the future determine to pay Directors' fees and
reimburse Directors for expenses related to their activities.
19
STOCK OPTIONS
We did not grant stock options in fiscal year ending 2001, 2002 or 2003.
The following table sets forth information with respect to stock options granted
to the Named Executive Officers during fiscal year 2003:
OPTION GRANTS IN FISCAL 2003
(INDIVIDUAL GRANTS)(1)
NAME NUMBER OF % OF TOTAL OPTIONS EXPIRATION
SECURITIES UNDERLYING GRANTED TO EMPLOYEES IN EXERCISE DATE
OPTIONS GRANTED FISCAL 2003 PRICE
None
No Executive Officer held options during the 2002 or 2003 fiscal year. The
following table sets forth information as to the number of shares of common
stock underlying unexercised stock options and the value of unexercised
in-the-money stock options at the 2002 and 2003 fiscal year ends:
None
PRINCIPAL STOCKHOLDERS
The following table sets forth, as of February 11, 2004, certain information
with respect to the beneficial ownership of the common stock by (1) each person
known by us to beneficially own more than 5% of our outstanding shares, (2) each
of our directors, (3) each Named Executive Officer and (4) all of our executive
officers and directors as a group. Except as otherwise indicated, each person
listed below has sole voting and investment power with respect to the shares of
common stock set forth opposite such person's name.
NAME AND ADDRESS OF AMOUNT AND NATURE OF PERCENT OF
BENEFICIAL OWNER (1) BENEFICIAL OWNERSHIP OUTSTANDING SHARES
- -------------------- -------------------- ------------------
5% STOCKHOLDERS
Darrell Lerner 6,600,000 58.93%
142 Mineola Avenue
Roslyn, New York 11577
Byron Lerner 2,000,000 17.86%
10 Estates Drive
Roslyn, New York 11576
James Tubbs 900,000 8.04%
142 Mineola
Roslyn, New York 11577
DIRECTORS AND NAMED EXECUTIVE
OFFICERS
Darrell Lerner 6,600,000 58.93%
142 Mineola Avenue
Roslyn, New York 11577
All directors and executive 6,600,000 58.93%
officers as a Group (1 person)
20
(1) Under the rules of the SEC, a person is deemed to be the beneficial owner of
a security if such person has or shares the power to vote or direct the voting
of such security or the power to dispose or direct the disposition of such
security. A person is also deemed to be a beneficial owner of any securities if
that person has the right to acquire beneficial ownership within 60 days of the
date hereof. Unless otherwise indicated by footnote, the named entities or
individuals have sole voting and investment power with respect to the shares of
common stock beneficially owned.
(2) This table is based upon information obtained from our stock records. Unless
otherwise indicated in the footnotes to the above table and subject to community
property laws where applicable, we believe that each shareholder named in the
above table has sole or shared voting and investment power with respect to the
shares indicated as beneficially owned.
SELLING STOCKHOLDERS
The shares being offered for resale by the selling stockholders consist of the
1,000,000 shares of common stock sold to investors in the Regulation D Rule 506
private placement undertaken by Relocate411 in July 2002 and the 250,000 shares
issued to Anslow & Jaclin, LLP in September 2002 for services rendered to us.
None of the selling stockholders have had within the past three years any
position, office or other material relationship with us or any of our
predecessors or affiliates.
The following table sets forth the name of the selling stockholders, the number
of shares of common stock beneficially owned by each of the selling stockholders
as of February 11, 2004 and the number of shares of common stock being offered
by the selling stockholders. The shares being offered hereby are being
registered to permit public secondary trading, and the selling stockholders may
offer all or part of the shares for resale from time to time. However, the
selling stockholders are under no obligation to sell all or any portion of such
shares nor are the selling stockholders obligated to sell any shares immediately
upon effectiveness of this prospectus.
Shares of Percent of
common Common Shares of Shares of
Stock owned Stock owned common common
prior prior to stock to be Stock owned
Name of selling stockholder to offering(1) offering sold After offering Percent(1)
- --------------------------- -------------- -------- ----- -------------- ----------
Anslow & Jaclin, LLP 250,000 2.23% 250,000 0 0
4400 Route 9, 2nd Floor
Freehold, New Jersey 07728
Frank Massaro 16,000 .14% 16,000 0 0
160 Stevens Avenue
W. Hempstead, NY 11552
Michael and Thelma Hartman 40,000 .36% 40,000 0 0
73-12 35th Avenue, Apt. D65
Jackson Heights, NY 11372
Nicholas A. Waslyn 20,000 .18% 20,000 0 0
91 Searingtown Road
Searingtown, NY 11507
Eric Tjaden 26,000 .23% 26,000 0 0
33 Admiral Lane
Hicksville, NY 11801
21
Margaret Indelicato 16,000 .14% 16,000 0 0
50 Slabey Avenue
Maluene, NY 11501
Juan C. Morales 4,000 .04% 4,000 0 0
288 Jericho Turnpike,
Apt. 2 Mineola, NY 11501
Sheldon Shalom 4,000 .04% 4,000 0 0
18 Flamingo Road
Roslyn, NY 11576
Patricia Faro 4,000 .04% 4,000 0 0
31 Roger Place
Floral Park, NY 11001
Philip Mazzella 16,000 .14% 16,000 0 0
418 Oak Street
Bellmore, NY 11710
Richard Zapolski 16,000 .14% 16,000 0 0
15 Suydam Lane
Bayport, NY 11705
William Grimm 8,000 .07% 8,000 0 0
33 Foxcroft Road
Albertson, NY 11507
Richard Volpe 16,000 .14% 16,000 0 0
56 The Glen
Glen Head, NY 11545
Mark J. Parendo 20,000 .18% 20,000 0 0
96 McCellan Avenue
Mineola, NY 11501
Mitch Hershkowitz 20,000 .18% 20,000 0 0
101 Lincoln Avenue,
Apt. 4P Mineola, NY 11501
Kristine Gentile 4,000 .04% 4,000 0 0
25 Evelyn Lane
Centereach, NY 11720
Robert M. J. Hartman 20,000 .18% 20,000 0 0
67-30 Clyde Street,
Apt. 5A Forest Hills, NY 11375
Danielle L. Hartman 20,000 .18% 20,000 0 0
70-31 108th Street
Forest Hills, NY 11375
Martin Miller 60,000 .54% 60,000 0 0
38 Pembroke Drive
Glen Cove, NY 11542
Dolores E. Miller 100,000 .90% 100,000 0 0
38 Pembroke Drive
Glen Cove, NY 11542
Dolores E. Miller 20,000 .18% 20,000 0 0
a/c/f Dillon Engel
38 Pembroke Drive
Glen Cove, NY 11542
22
Drew Goldberg 10,000 .09% 10,000 0 0
320 E. 46th Street,
Apt. 16F New York, NY 10017
Carol Sitte 50,000 .45% 50,000 0 0
6534 78th Street
Middle Village, NY
Karen Pasteressa 20,000 .18% 20,000 0 0
a/c/f Samantha Pasteressa
50 Battery Place
New York, NY 10280
Desert Green, Inc. 40,000 .36% 40,000 0 0
24 Pheasant Run Lane
Dix Hills, NY 11746
Robert Giambrone 50,000 .45% 50,000 0 0
24 Pheasant Run Lane
Dix Hills, NY 11746
Anthony Giambrone 60,000 .54% 60,000 0 0
24 Pheasant Run Lane
Dix Hills, NY 11746
Melvin D. Bernstein 52,000 .46% 52,000 0 0
1009 Willis Avenue
Albertson, NY 11507
Linda Bernstein 28,000 .25% 28,000 0 0
155 Salem Road
East Hills, NY 11577
Beth Sussman 40,000 .36% 40,000 0 0
240 W. 75th Street,
Apt. 7B New York, NY 10023
Jeffrey Wenzel 40,000 .36% 40,000 0 0
166 Bellavue Road
Oakdale, NY 11769
Tracey Wenzel 40,000 .36% 40,000 0 0
166 Bellavue Road
Oakdale, NY 11769
Harold Sussman 40,000 .36% 40,000 0 0
2 Richmond Road,
Apt. 5A Ledo Beach, NY 11561
Amy Sussman 40,000 .36% 40,000 0 0
11 Chiswell Drive
Melville, NY 11747
Meg L. Sussman 40,000 .36% 40,000 0 0
26 Leslie Lane
Katonah, NY 10536
(1) Assumes that all of the shares of common stock offered in this prospectus
are sold and no other shares of common stock are sold or issued during the
offering period.
None of the selling shareholders are broker-dealers or are affiliated with
broker-dealers.
23
PLAN OF DISTRIBUTION
Our selling security holders must sell at a fixed price of $.025 per share until
our shares of common stock are quoted on the OTC Bulletin Board, and thereafter,
at prevailing market prices. The shares may be sold or distributed from time to
time by the selling stockholders directly to one or more purchasers or through
brokers, dealers or underwriters who may act solely as agents or may acquire
shares as principals, at market prices prevailing at the time of sale, at prices
related to such prevailing market prices, at negotiated prices or at fixed
prices, which may be changed. We will file a post-effective amendment if the
selling shareholders enter into an agreement, after effectiveness, to sell their
shares to a broker-dealer. In addition, if these shares being registered for
resale are transferred from the named selling shareholders and the new
shareholders wish to rely on the prospectus to resell these shares, then a
post-effective amendment will be filed naming these individuals as selling
shareholders in accordance with the information required by Item 507 of
Regulation S-B. The distribution of the shares may be effected in one or more of
the following methods:
o ordinary brokers transactions, which may include long or short sales,
o transactions involving cross or block trades on any securities or
market where our common stock is trading,
o purchases by brokers, dealers or underwriters as principal and resale
by such purchasers for their own accounts pursuant to this prospectus,
o "at the market" to or through market makers or into an existing market
for the common stock,
o in other ways not involving market makers or established trading
markets, including direct sales to purchasers or sales effected
through agents,
o through transactions in options, swaps or other derivatives (whether
exchange listed or otherwise), or
o any combination of the foregoing, or by any other legally available
means.
In addition, the selling stockholders may enter into hedging transactions with
broker-dealers who may engage in short sales, if short sales were permitted, of
shares in the course of hedging the positions they assume with the selling
stockholders. The selling stockholders may also enter into option or other
transactions with broker-dealers that require the delivery by such
broker-dealers of the shares, which shares may be resold thereafter pursuant to
this prospectus.
Our common stock is not traded on any national stock exchange and in accordance
with Rule 457, the offering price was determined by the price selling
shareholders (except Anslow & Jaclin, LLP) purchased shares in our July 2002
private placement memorandum. Represents shares owned by 35 of our selling
security holders which can be sold at a price of $.025 per share until our
shares of common stock are quoted on the OTC Bulletin Board, and thereafter, at
prevailing market prices or privately negotiated prices.
Brokers, dealers, underwriters or agents participating in the distribution of
the shares may receive compensation in the form of discounts, concessions or
commissions from the selling stockholders and/or the purchasers of shares for
whom such broker-dealers may act as agent or to whom they may sell as principal,
or both (which compensation as to a particular broker-dealer may be in excess of
customary commissions). The selling stockholders and any broker-dealers acting
in connection with the sale of the shares hereunder may be deemed to be
underwriters within the meaning of Section 2(11) of the Securities Act of 1933,
and any commissions received by them and any profit realized by them on the
resale of shares as principals may be deemed underwriting compensation under the
Securities Act of 1933.
24
Neither the selling stockholders nor we can presently estimate the amount of
such compensation. We know of no existing arrangements between the selling
stockholders and any other stockholder, broker, dealer, underwriter or agent
relating to the sale or distribution of the shares.
We will not receive any proceeds from the sale of the shares of the selling
security holders pursuant to this prospectus. We have agreed to bear the
expenses of the registration of the shares, including legal and accounting fees,
and such expenses are estimated to be approximately $15,100.
Scope of Regulation M Trading Restrictions
Rule 101 of Regulation M applies trading restrictions to distribution
participants and their affiliated purchasers, while Rule 102 of Regulation M
makes such trading restrictions applicable to issuers, selling security holders
and their affiliated purchasers. Specifically, these rules make it unlawful for
such persons, during the applicable restricted period, to bid for, purchase, or
attempt to induce any person to bid for or purchase any "covered security."
Regulation M provides that an affiliated purchaser of an issuer or selling
security holder that also is a distribution participant may comply with Rule
101, and not Rule 102, as long as the affiliated purchaser is not the issuer or
selling security holder of the distributed securities.
Regulation M defines "covered securities" to include (i) the security that is
the subject of a distribution and (ii) "reference securities." The term
"reference security" is defined as a security into which a subject security
(i.e., the security that is the subject of the distribution) may be converted,
exchanged or exercised, or which, under the terms of the subject security, may
in whole or significant part determine the value of the subject security,
including an equity-linked security.
The periods during which the restrictions of Rules 101 and 102 apply are
triggered by the time of pricing of the subject security, rather than the
commencement of offers and sales. Specifically, for a security covered by Rules
101 and 102, the trading restrictions apply only during a "restricted period"
that commences on one business day (for a security with a value of average daily
trading volume ("ADTV") over a two calendar month period or 60-day rolling
period of $100,000 or more, of an issuer whose outstanding common equity
securities have a public float value of $25 million or more) or five business
days (for all other securities) prior to the day of pricing of the offered
security (or the date on which the person becomes a distribution participant, if
later).
Excepted Activities. The following activities are excepted from the trading
restrictions of Rule 101 and, therefore, may be conducted by a distribution
participant and its affiliated purchasers during a distribution. The activities
permitted by these exceptions, however, remain subject to the general antifraud
and anti-manipulation provisions of the Securities Act and the Exchange Act.
1. Research. Rule 101 provides an exception for research whereby written
information, opinions and recommendations that satisfy Rules 138 or 139
under the Securities Act may be published or disseminated by a
distribution participant during the restricted period. This exception
codifies a current SEC staff interpretation regarding research under Rule
10b-6, although the current interpretation's restriction on issuing a more
favorable recommendation for research issued in reliance on paragraph (a)
of Rule 139 has been rescinded. The SEC clarified that this exception is
available whether or not the distributed securities are registered under
the Securities Act.
25
2. Passive Market Making/Stabilization Transactions. Also excepted from Rule
101 are transactions that comply with the terms and provisions of Rules
103 or 104 of Regulation M involving NASDAQ passive market making and
stabilization, respectively. Rules 103 and 104 are discussed below.
3. Odd-Lot Transactions. The exception for odd-lot transactions contained in
Rule 10b-6(a)(4)(iv) has been expanded under Rule 101 to permit
distribution participants to bid for and purchase odd-lots during the
applicable restricted period, and to offset odd-lot transactions in
connection with odd-lot tender offers made pursuant to Rule 13e-4(h)(5)
under the Exchange Act.
4. Exercises of Securities. The exercise of any option, warrant, right or
conversion privilege set forth in the instrument governing a security also
is excepted. Because bids for purchases of rights are excepted from Rule
101, and in light of the treatment of derivative securities under
Regulation M, the SEC rescinded Rule 10b-8, which restricted purchases of
rights and regulated sales of covered securities. Bids for and purchases
of a security that is the subject of a rights distribution will continue
to be restricted.
5. Unsolicited Transactions. Brokerage transactions that do not involve the
solicitation of customers' orders, in addition to certain unsolicited
principal purchases, are excepted from Rule 101. This exception differs
from the analogous Rule 10b-6 exception in that the purchases may not be
effected on a securities exchange, or effected through an inter-dealer
quotation system or electronic communications network ("ECN"). To qualify
for this exception, however, the purchases need not be of "block" size.
6. Basket Transactions. Purchases of covered securities that are made in
connection with a bona fide basket transaction are excepted from Rule 101,
subject to certain conditions.
7. De Minimis Transactions. Rule 101 excepts inadvertent violations of the
rule that have no market impact. For purposes of this exception, a de
minimis transaction is a bid that was not accepted, or one or more
purchases, other than those of a passive market marker, that in the
aggregate total less than 2% of the security's ADTV. This exception is
available only to firms with established and enforced written policies and
procedures reasonably designed to achieve compliance with Rule 101.
8. Transactions in Connection with the Distribution. Analogous to a Rule
10b-6 exception, Rule 101 provides an exception for transactions among
distribution participants and for purchases from an issuer or selling
security holder that are effected in connection with the distribution but
are not effected on a securities exchange, or through an inter-dealer
quotation system or ECN.
9. Offers to Sell and Solicitation of Offers to Buy. Also excepted from Rule
101 are offers to sell and the solicitation of offers to buy the
securities being distributed. This exception also applies to securities
that are offered as principal by the person who makes the offer or
solicitation.
10. Transactions in Rule 144A Securities. Additionally, Rule 101 is
inapplicable to transactions in Rule 144A-eligible securities offered or
sold in the U.S. solely to qualified institutional buyers ("QIBs") in
transactions exempt from registration under Section 4(2) of the Securities
Act, Regulation D, or Rule 144A under the Securities Act, or to QIBs and
to certain non-U.S. persons under Regulation S during a Section 4(2),
Regulation D, or Rule 144A transaction. The rule does not distinguish
between Rule 144A-eligible securities of foreign or domestic issuers and,
as such, represents an expansion of the exception to Rule 10b-6.
26
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
We currently use office space in a building located at 142 Mineola Avenue,
Roslyn, New York. The primary tenant is Darrell Lerner, our President. The lease
for such premises is in the name of International Global Communications, Inc., a
company owned by Byron Lerner, one of our shareholders and the father of Darrell
Lerner, our sole officer and director. The lease provides for monthly rental
payments of $475 and expired February 28, 2003. There was an extension period
that commenced March 1, 2003 until February 28, 2004 at the rate of $500 per
month.
Although we have no present intention to do so, we may, in the future, enter
into other transactions and agreements relating to our business with our
directors, officers, principal stockholders and other affiliates. Relocate
411.com, Inc. intends for all such transactions and agreements to be on terms no
less favorable to Relocate 411.com, Inc. than those obtainable from unaffiliated
third parties on an arm's-length basis. In addition, the approval of a majority
of Relocate 411.com, Inc.'s directors will be required for any such transactions
or agreements. As set forth above, we do not anticipate any related party
transactions in the near future. Nevertheless, should any related party
transactions occur while there are no disinterested board members, Darrell
Lerner, our sole director, shall continue to have the sole vote and we shall
rely on his integrity, good judgment, and fiduciary duties to make a fair and
equitable decision on our behalf and one behalf of our shareholders.
On January 26, 2000, we entered into a Plan and Agreement of Merger ("Merger
Agreement") with Relocate 411.com, Inc., a New York corporation. We acquired all
of the issued and outstanding stock of Relocate in exchange for 6,600,000 shares
of the 12,615,000 shares of our issued and outstanding common stock. We acquired
all of the assets and liabilities of Relocate. Darrell Lerner, our sole officer
and director, Byron Lerner, one of our principal shareholders and Barry Manko
were founders of Relocate411.com, Inc. They each received 2,200,000 shares or an
aggregate of 6,600,000 shares. On January 27, 2000, we (the surviving entity)
filed a Certificate of Amendment to our Articles of Incorporation changing our
name to Relocate 411.com, Inc.
Byron Lerner, one of the founding shareholders of Relocate411.com, Inc. and
considered a promoter was banned for 5 years, starting 1987, from the New York
Stock Exchange for unauthorized transactions and churning for transactions that
occurred in 1983 or 1984. Mr. Lerner chose not to contest the decision since was
leaving the industry and he was not suspended by any other exchange. On April
22, 2002, the SEC filed a settled civil action against Byron Lerner, the
Chairman and Chief Executive Officer of Teltran International Group, Ltd. The
SEC alleged that Mr. Lerner caused Teltran to materially overstate its reported
financial results during its fiscal year ended December 31, 1999 and to make
other materially false and misleading statements. Mr. Lerner consented, without
admitting or denying the SEC's allegations, to be permanently enjoined from
violating or aiding and abetting certain violations of the 1933 Securities Act
and the 1934 Exchange Act and Mr. Lerner paid disgorgement and prejudgment
interest of $87,500 and a $50,000 civil penalty.
On the effective date of the Merger Agreement, Nachum Blumenfrucht, our sole
officer and director resigned from our Board of Directors and a new Board of
Directors was appointed. The new Board of Directors consisted of Darrell Lerner,
President, Chief Executive Officer, and Treasurer, and Byron R. Lerner,
Vice-President and Secretary. We redeemed 4,100,000 shares of our common stock
from Nachum Blumenfrucht, our previous sole officer, director and principal
shareholder for $150,000. In September 2002, Anslow & Jaclin, LLP were issued
250,000 shares of our common stock for legal services rendered.
27
On May 25, 2000, we loaned $1,117,602 to Teltran International Group, Ltd.
Teltran was a publicly held company presently trading on the NASD OTC Bulletin
Board, and some of its stockholders and officers own approximately 42% of
Relocate. The related stockholders and officers were Jimmy Tubbs and Byron
Lerner who was the President and Chief Executive Officer of Teltran. The loan
matured November 25, 2000 with interest at 9-1/2% annually and is secured by a
promissory note. The reason we made this investment was that we had extra funds
at such time and we believed this note was a strong investment and would provide
a good return on our investment In addition, the note was secured by 600,000
shares each of common stock of Teltran and Antra Holdings Group, Inc. Antra was
also a publicly held company traded on the NASD OTC Bulletin Board and therefore
we believed that we had enough security for this loan. Teltran owns the Antra
shares which were acquired in April, 1999 when each company originally exchanged
2,000,000 shares of their common stock. Additionally, Teltran pledged its one
share of Teltran Web Factory, Ltd., a wholly owned foreign subsidiary of
Teltran. Neither Teltran International Group, Ltd. or Antra Holdings Group, Inc.
trade on the OTC Bulletin Board. The Teltran shares are currently trading on the
Pink Sheets with a market price of $.004 per share and Antra Holdings Group
shares are trading on the Pink Sheets with a market price of $.005. As a result
of the default on this loan we suffered a total loss of $1,117,602 plus
interest.
Teltran also issued to Relocate 250,000 warrants exercisable from May 25, 2000
to May 24, 2005 to purchase Teltran common stock at a price of $1.10 per share.
Teltran defaulted on the loan. As settlement for such default, Teltran agreed to
sell its interest in Teltran Web Factory, Ltd to the NCT Group Ltd., a
Connecticut company, for preferred stock in NCT (Note that at the time of the
transaction, NCT Group, Inc., the consolidated public company, had a common
stock trading value of $0.2475 per share, but a negative book value. NCT Group,
Inc. subsequently retired its preferred stock during the year ended December 31,
2001.). Such preferred stock was transferred to us as consideration for
settlement for repayment of the loan and our agreement to tender our interest in
Teltran Web Factory, Ltd. We then used all of such preferred NCT shares to buy
out all common stock and warrants in Relocate 411.com belonging to the original
investors as follows:
Name Dollars Shares Warrants
- -------------------- --------- --------- ---------
Austost Anstalt Schaan $ 500,000 1,500,000 1,500,000
Balmore Funds, S.A $ 500,000 1,500,000 1,500,000
Amro International, S.A $ 250,000 791,250 791,250
ICT N.V $ 50,000 150,000 150,000
Leval Trading, Inc. $ 150,000 450,000 450,000
Nesher, Inc. $ 50,000 150,000 150,000
Talbiya B. Investments $ 50,000 166,500 166,500
Libra Finance, S.A -- 198,000 198,000
J. Hayut -- 139,500 139,500
Hyett Capital Ltd. -- 69,750 69,750
None of these entities set forth above are affiliated to us or either Byron and
Darrell Lerner. Although we lost money on this loan to Teltran, as part of the
settlement for this default we received preferred shares in NCT which we were
able to use to cancel the 5,115,000 outstanding shares and 5,115,000 outstanding
warrants set forth above. Based on the last filing undertaken by NCT, the
following sets forth the officers, directors and principal shareholders of NCT:
Michael J. Parrella
John J. McCloy
Sam Oolie
Irene Lebovics
Cy E. Hammond
Jonathan M. Charry
Mark Melnick
Carole Salkind
Crammer Road LLC
28
Alpha Capital Aktiengesellschaft
Acme Associates, Inc.
Libra Finance S.A.
Austost Anstalt Schaan
Balmore S.A.
To summarize the above related party transaction, Relocate411.Com loaned 1.2
million dollars to Teltran in 2000. Teltran and Relocate had common investors.
Relocate received stock in Teltran and Antra as security for such loan. An
additional part of the security was Teltran's 1 share ( representing full
ownership) of the Web Factory Ltd., a UK company. Teltran proceeded to sell the
Web Factory to NCT Group Ltd (NCTI) for about 10 million dollars in NCT
preferred stock in a pending NCT offering in the UK (The Artera Group was the
name of the UK subsidiary being created by NCT).
Teltran was subsequently unable to pay back the loan and it was agreed that
Relocate would receive several million pounds of the preferred stock in this
offering in return for Teltran defaulting on the loan as full settlement, and in
return for Relocate relinquishing the collateral (the Web Factory ownership).
That full amount of NCT preferred stock was then used to buy out the original
investors at which point their shares were returned and cancelled. The stock in
Teltran and Antra has no real market value. The related stockholders and
officers were Jimmy Tubbs and Byron Lerner who was the President and Chief
Executive Officer of Teltran.
We have no plans to issue any additional securities to management, promoters,
affiliates or associates at the present time. If our Board of Directors adopts
an employee stock option or pension plan, we may issue additional shares
according to the terms of this plan. Although we have a very large amount of
authorized but un-issued common stock, we intend to reserve this stock to
implement continued expansion of the business. We may attempt to use shares as
consideration, instead of cash. We may issue shares if we engage in a merger or
acquisition or we may issued shares as consideration for services rendered to us
or in other transactions in the normal course of business. In such a case, an
indeterminate amount of unissued stock may be issued by us. We currently have no
plans to acquire or merge with another company.
We have no present intention of acquiring any assets by any promoter, management
or their affiliates or associates.
There are no arrangements or agreements between non-management shareholders and
management under which non-management shareholders may directly or indirectly
participate in or influence our affairs. In the future, we will present all
possible transactions between the Company and its officers, directors or 5%
stockholders, and their affiliates to the Board of Directors for its
consideration and approval. Any such transaction will require approval by a
majority of the directors and such transactions will be on terms no less
favorable than those available to disinterested third parties.
DESCRIPTION OF SECURITIES
The following is a summary description of our capital stock and certain
provisions of our certificate of incorporation and by- laws, copies of which
have been incorporated by reference as exhibits to the registration statement of
which this prospectus forms a part. The following discussion is qualified in its
entirety by reference to such exhibits.
GENERAL
Our Articles of Incorporation authorize us to issue up to 50,000,000 Common
Shares, $0.0001 par value per common share and 10,000,000 Preferred Shares,
$0.0001 par value. As of February 11, 2004, there were 11,200,000 shares of our
common stock outstanding.
29
COMMON STOCK
The holders of the common stock are entitled to one vote for each share held of
record on all matters submitted to a vote of stockholders. Our certificate of
incorporation and by-laws do not provide for cumulative voting rights in the
election of directors. Accordingly, holders of a majority of the shares of
common stock entitled to vote in any election of directors may elect all of the
directors standing for election. Holders of common stock are entitled to receive
ratably such dividends as may be declared by the Board out of funds legally
available therefore. In the event of our liquidation, dissolution or winding up,
holders of common stock are entitled to share ratably in the assets remaining
after payment of liabilities. Holders of common stock have no preemptive,
conversion or redemption rights.
Liquidation Rights.
Upon our liquidation or dissolution, each outstanding Common Share will be
entitled to share equally in our assets legally available for distribution to
shareholders after the payment of all debts and other liabilities.
Dividend Rights.
We do not have limitations or restrictions upon the rights of our Board of
Directors to declare dividends, and we may pay dividends on our shares of stock
in cash, property, or our own shares, except when we are insolvent or when the
payment thereof would render us insolvent subject to the provisions of the
Delaware Statutes. We have not paid dividends to date, and we do not anticipate
that we will pay any dividends in the foreseeable future. Voting Rights.
Holders of our Common Shares are entitled to cast one vote for each share held
of record at all shareholders meetings for all purposes.
Other Rights.
Common Shares are not redeemable, have no conversion rights and carry no
preemptive or other rights to subscribe to or purchase additional Common Shares
in the event of a subsequent offering.
There are no other material rights of the common shareholders not included
herein. There is no provision in our charter or by-laws that would delay, defer
or prevent a change in control of us. We have not issued debt securities.
We do not have any outstanding options or warrants to purchase, or securities
convertible into, our shares of common stock. The prospectus is registering
1,250,000 shares of our common stock for selling security holders and is not
registering any additional shares. Here of our principal shareholders, including
our sole officer and director, Darrell Lerner, own 9,500,000 of our shares in
the aggregate. Since each shareholder acquired the shares more than one year
ago, they can each sell their shares pursuant to Rule 144 under the 1933
Securities Act.
We presently have 40 shareholders of record for our common stock.
30
Rule 144 Shares
As of February 11, 2004 a total of 11,200,000 shares of our common stock are
outstanding and all as of February 5, 2004, all 11,200,000 shares of our common
stock are available for resale to the public. Such shares are comprised of the
6,600,000 shares of our common stock acquired by Darrell Lerner from us on
January 26, 2000 and February 7, 2003, the 2,000,000 shares of our common stock
acquired by Byron Lerner from us on February 7, 2001, the 250,000 shares of our
common stock acquired by Barry Manko on January 26, 2000, the 200,000 shares of
our common stock acquired by Grushko & Minko on January 26, 2000 and February 7,
2001, the 900,000 shares of our common stock acquired by James Tubbs on January
26, 2000 and the 250,000 shares of our common stock acquired by Anslow & Jaclin,
LLP and the 1,000,000 shares sold to investors in our Regulation D Rule 506 in
September 2002. All such shares must be sold in accordance with the volume and
trading limitations of Rule 144 of the Act.
In general, under Rule 144 as currently in effect, a person who has beneficially
owned shares of a company's common stock for at least one year is entitled to
sell within any three month period a number of shares that does not exceed the
greater of:
1. 1% of the number of shares of the company's common stock then outstanding
which, in our case, would equal approximately 280,380 shares as of the date of
this prospectus; or
2. The average weekly trading volume of the company's common stock during the
four calendar weeks preceding the filing of a notice on form 144 with respect to
the sale.
Sales under Rule 144 are also subject to manner of sale provisions and notice
requirements and to the availability of current public information about the
company.
Under Rule 144(k), a person who is not one of the company's affiliates at any
time during the three months preceding a sale, and who has beneficially owned
the shares proposed to be sold for at least two years, is entitled to sell
shares without complying with the manner of sale, public information, volume
limitation or notice provisions of Rule 144. Notwithstanding same, our
affiliates are subject to the volume limitations and trading limitations of Rule
144 regardless of how long they have held such shares.
INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 102(b)(7) of the DGCL enables a corporation in its original certificate
of incorporation or an amendment thereto to eliminate or limit the personal
liability of a director to a corporation or its stockholders for violations of
the director's fiduciary duty, except:
o for any breach of a director's duty of loyalty to the corporation or
its stockholders,
o for acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law,
o pursuant to Section 174 of the DGCL (providing for liability of
directors for unlawful payment of dividends or unlawful stock
purchases or redemptions), or
o for any transaction from which a director derived an improper personal
benefit.
Our certificate of incorporation provides in effect for the elimination of the
liability of directors to the extent permitted by the DGCL.
31
Section 145 of the DGCL provides, in summary, that directors and officers of
Delaware corporations are entitled, under certain circumstances, to be
indemnified against all expenses and liabilities (including attorney's fees)
incurred by them as a result of suits brought against them in their capacity as
a director or officer, if they acted in good faith and in a manner they
reasonably believed to be in or not opposed to the best interests of the
corporation, and, with respect to any criminal action or proceeding, if they had
no reasonable cause to believe their conduct was unlawful; provided, that no
indemnification may be made against expenses in respect of any claim, issue or
matter as to which they shall have been adjudged to be liable to the
corporation, unless and only to the extent that the court in which such action
or suit was brought shall determine upon application that, despite the
adjudication of liability but in view of all the circumstances of the case, they
are fairly and reasonably entitled to indemnity for such expenses which the
court shall deem proper. Any such indemnification may be made by the corporation
only as authorized in each specific case upon a determination by the
stockholders or disinterested directors that indemnification is proper because
the indemnitee has met the applicable standard of conduct. Our bylaws entitle
our officers and directors to indemnification to the fullest extent permitted by
the DGCL.
We have agreed to indemnify each of our directors and certain officers against
certain liabilities, including liabilities under the Securities Act of 1933.
Insofar as indemnification for liabilities arising under the Securities Act of
1933 may be permitted to our directors, officers and controlling persons
pursuant to the provisions described above, or otherwise, we have been advised
that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Securities Act of
1933 and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities (other
than our payment of expenses incurred or paid by our director, officer or
controlling person in the successful defense of any action, suit or proceeding)
is asserted by such director, officer or controlling person in connection with
the securities being registered, we will, unless in the opinion of our counsel
the matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act and will be governed by
the final adjudication of such issue.
WHERE YOU CAN FIND MORE INFORMATION
You may read and copy any report, proxy statement or other information we file
with the Commission at the Public Reference Room at 450 Fifth Street, N.W.,
Washington, D.C. 20549. You may obtain information on the operation of the
Public Reference Room by calling the Commission at 1-800-SEC-0330. In addition,
we file electronic versions of these documents on the Commission's Electronic
Data Gathering Analysis and Retrieval, or EDGAR, System. The Commission
maintains a web site at http://www.sec.gov that contains reports, proxy
statements and other information filed with the Commission.
We have filed a registration statement on Form SB-2 with the Commission to
register shares of our common stock to be sold by the selling stockholders. This
prospectus is part of that registration statement and, as permitted by the
Commission's rules, does not contain all of the information set forth in the
registration statement. For further information with respect to us or our common
stock, you may refer to the prospectus and to the exhibits and schedules filed
as part of the registration statement. You can review a copy of the registration
statement and its exhibits and schedules at the public reference room maintained
by the Commission, and on the Commission's web site, as described above. You
should note that statements contained in this prospectus that refer to the
contents of any contract or other document are not necessarily complete. Such
statements are qualified by reference to the copy of such contract or other
document filed as an exhibit to the registration statement.
32
TRANSFER AGENT
We have appointed Corporate Stock Transfer as our transfer agent and registrar
for our common stock. Corporate Stock Transfer is located at 3200 Cherry Creek
Drive, Suite 430 Denver, Colorado 80209 and the phone number is (303)282-4800.
LEGAL MATTERS
The validity of the shares of common stock offered in this prospectus has been
passed upon for us by Anslow & Jaclin, LLP, 4400 Route 9, 2nd Floor, Freehold,
New Jersey 07728. Its telephone number is (732) 409-1212. Anslow & Jaclin, LLP
owns 250,000 of our common shares. The 250,000 shares are included in the shares
being offered for resale by the selling stockholders in the prospectus dated
February 5, 2004. Such shares were issued in September 2002 for services
rendered to us by Anslow & Jaclin, LLP.
EXPERTS
The audited financial statements for the fiscal year ended November 30, 2003
included in this prospectus included elsewhere in the registration statement
have been audited by Gately & Associates, LLC and the audited financial
statements for the fiscal year ended November 30, 2002 included in this
prospectus included elsewhere in the registration statement have been audited by
Marvin Kirschenbaum, Certified Public Accountant, as stated in their report
appearing herein and elsewhere in the registration statement (which report
expresses an unqualified opinion and includes an explanatory paragraph referring
to the Company's recurring losses from operations which raise substantial doubt
about its ability to continue as a going concern), and have been so included in
reliance upon the reports of such firm given upon their authority as experts in
accounting and auditing.
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
ON ACCOUNTING AND FINANCIAL DISCLOSURE
On July 7, 2003, the Company replaced Marvin Kirschenbaum, CPA as the
independent auditor for the Company and appointed Gately & Associates as the new
independent auditor for the Company.
Marvin Kirschenbaum, CPA 's report on the financial statements for the year
ended November 30, 2002 contained no adverse opinion or disclaimer of opinion
and was not qualified or modified as to audit scope or accounting principles but
included an explanatory paragraph reflecting an uncertainty because the
realization of a major portion of the Company's assets is dependent upon its
ability to meet its future financing requirements and the success of future
operations.
During the most recent fiscal year and interim period subsequent to November 30,
2002, there have been no disagreements with Marvin Kirschenbaum, CPA on any
matter of accounting principles or practices, financial statement disclosure, or
auditing scope or procedure which disagreements if not resolved to the
satisfaction of Marvin Kirschenbaum, CPA would have caused them to make
reference in their reports on the financial statements for such periods.
On February 14, 2003, Don Fuch as resigned as the independent auditor for the
Company and Marvin Kirschenbaum, CPA was appointed as the new independent
auditor for the Company.
Don Fuchs, CPA reports on our financial statements for the fiscal years ended
November 30, 2001 and November 20, 2000 and through August 31, 2002 contains no
adverse opinion or disclaimer of opinion and were not qualified or modified as
to uncertainty, audit scope or accounting principles.
For the most recent fiscal year and any subsequent interim period through Don
Fuchs' resignation on February 14, 2003, there have been no disagreements with
Don Fuchs' on any matter of accounting principles or practices, financial
statement disclosure, or auditing scope or procedure which disagreements if not
resolved to the satisfaction of Don Fuchs' would have caused them to make
reference in their reports on the financial statements for such periods.
33
RELOCATE 411.COM, INC.
FORM SB-2/A
THE YEAR AS OF NOVEMBER 30, 2003 AND NOVEMBER 30, 2002
- ------------------------------------------------------
Report of Independent Accountant Gately & Associates, LLC F1
Report of Independent Accountant Marvin Kirschenbaum F2
Balance Sheet, As of November 30, 2003 and November 30, 2002 F3
Statement of Operations, For the twelve months ended
November 30, 2003 and 2002 and for the Period From Inception
(December 19, 1997) Through November 30, 2003 F4
Statement of Stockholder' Equity, for November 30, 2003 F5
Statement of Cash Flows, For the twelve months ended
November 30, 2003 and 2002 and for the Period From Inception
(December 19, 1997) Through November 30, 2003 F6
Notes to Financial Statements F7-F11
Gately & Associates, LLC
1248 Woodridge Court
Altamonte Springs, FL 32714
(407) 341-6942
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANT
The Board of Directors
Relocate 411.com, Inc.
142 Mineola Avenue
Roslyn Heights, New York 11577
Gentlemen:
We have audited the accompanying balance sheet of Relocate 411.com, Inc.
(a development stage company) formerly known as Stateside Funding, Inc. as of
November 30, 2003 and the related statements of operations, stockholder's equity
and cash flows for the year ended and from inception (December 31, 1997) through
November 30, 2003. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on the audit. We did not audit the accompanying
balance sheet as of November 30, 2002, and the related statements of operations
and cash flows for the year ended were audited by another auditor. The auditor
expressed in the report dated February 12, 2003 an unqualified opinion on those
statements.
We conducted the audit in accordance with generally accepted auditing
standards. These standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that the audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Relocate 411.com,
Inc. as of November 30, 2003, and the statement of operations and cash flows for
the year then ended and from inception (December 31, 1997) through November 30,
2003, in conformity with generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that
the Company will continue as a going concern. As discussed in Note 10 to the
financial statements, the Company has suffered recurring losses from operations
and has a net capital deficiency that raise substantial doubt about its ability
to continue as a going concern. Management's plan in regard to these matters are
also described in Note 10. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
Gately & Associates, LLC
December 22, 2003
F1
Marvin Kirschenbaum
Certified Public Accountant
332 Meehan Avenue - Reads Landing
West Lawrence, New York 11691-5431
(516) 239-3704
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANT
The Board of Directors
Relocate 411.com, Inc.
142 Mineola Avenue
Roslyn Heights, New York 11577
Gentlemen:
I have audited the accompanying balance sheet of Relocate 411.com, Inc.
(a development stage company) formerly known as Stateside Funding, Inc. as of
November 30, 2002 and the related statements of operations, stockholder's equity
and cash flows for the year ended and from inception (December 31, 1997) through
November 30, 2002. These financial statements are the responsibility of the
Company's management. My responsibility is to express an opinion on these
financial statements based on my audit. I did not audit the accompanying balance
sheet as of November 30, 2003, and the related statements of operations and cash
flows for the year ended were audited by another auditor. The auditor expressed
in his report dated December 22, 2003 an unqualified opinion on those
statements.
I conducted my audit in accordance with generally accepted auditing
standards. These standards require that I plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
I believe that my audit provides a reasonable basis for my opinion.
In my opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Relocate 411.com,
Inc. as of November 30, 2002, and the statement of operations and cash flows for
the year then ended and from inception (December 31, 1997) through November 30,
2002, in conformity with generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that
the Company will continue as a going concern. As discussed in Note 10 to the
financial statements, the Company has suffered recurring losses from operations
and has a net capital deficiency that raise substantial doubt about its ability
to continue as a going concern. Management's plan in regard to these matters are
also described in Note 10. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
Marvin Kirschenbaum
CERTIFIED PUBLIC ACCOUNTANT
February 12, 2003
F2
RELOCATE411.COM, INC.
( A Development Stage Company)
BALANCE SHEET
As of November 30, 2003 and November 30, 2002
ASSETS
------
2003 2002
----------------- -----------------
CURRENT ASSETS
Cash $ 9,092 $ 20,519
----------------- -----------------
Total Current Assets 9,092 20,519
Property and equipment at cost, net of
accumulated depreciation 2,973 4,473
----------------- -----------------
Total Properties 2,973 4,473
TOTAL ASSETS $ 12,065 $ 24,992
================= =================
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
CURRENT LIABILITIES
Accrued liabilities $ 11,525 $ 6,025
Loans payable 14,397 14,397
----------------- -----------------
Total current liabilities 25,922 20,422
SHAREHOLDERS' EQUITY
Preferred stock - $.0001 par value
authorized 10,000,000 shares
issued and outstanding: none - -
Common stock - $.0001 par value;
authorized 50,000,000 shares;
issued and outstanding: 11,200,000 and 11,200,000 1,827 1,827
Additional paid-in-capital 1,401,913 1,401,913
Treasury stock at cost: 7,065,000 and 7,065,000 (1,151,672) (1,151,672)
Accumulated deficit during Development Stage (265,925) (247,498)
----------------- -----------------
Total shareholders' equity (13,857) 4,570
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 12,065 $ 24,992
================= =================
The accompanying notes are an integral part of these consolidated financial statements.
F3
RELOCATE411.COM, INC.
( A Development Stage Company)
STATEMENTS OF OPERATIONS
For the twelve months ended November 30, 2003 and 2002
and for the Period From Inception (December 19, 1997)
Through November 30, 2003
Period from
Inception
Through
November 30,
2003 2002 2003
---------------------------------- -----------------
REVENUES
Revenue $ - $ - $ -
---------------------------------- -----------------
TOTAL REVENUES - - -
-------------- ---------------------------------- -----------------
EXPENSES
Salaries and benefits - - 181,888
General and Administrative 17,927 15,280 158,117
---------------------------------- -----------------
TOTAL EXPENSES 17,927 15,280 340,005
-------------- ---------------------------------- -----------------
OPERATING INCOME (LOSS) (17,927) (15,280) (340,005)
- -----------------------
Provision for tax (500) (500) (6,525)
Interest expense - - (53,956)
Interest income - - 134,561
---------------------------------- -----------------
NET INCOME (LOSS) $ (18,427) $ (15,780) $ (265,925)
- ----------------- ================================== =================
NET INCOME (LOSS) PER COMMON SHARE $ (0.00) $ (0.00)
- ---------------------------------- ==================================
(less than $.01 per share for 2003 and 2002)
WEIGHTED AVERAGE COMMON
SHARES OUTSTANDING 11,200,000 10,262,500
------------------
==================================
The accompanying notes are an integral part of these consolidated financial statements.
F4
RELOCATE411.COM, INC.
( A Development Stage Company)
STATEMENTS OF SHAREHOLDERS' EQUITY
November 30, 2002
Accumulated
Deficit
Additional During the
Common Paid-In Development
Shares Amount Capital Stage Total
-------------------------------------------------------------------------
Issuance of common shares
on August 24, 1999 66 $ 250 $ -- $ -- $ 250
---------- ----- --------- -------- -----
Balance, November 30, 1999 66 250 -- -- 250
Issuance of shares in private placement
and merger: January 26, 2000:
Private placement in cash ($0.29 per share) 5,175,000 518 1,503,732 1,504,250
Deferred offering costs (25,927) (25,927)
Conversion of shares in merger 11,599,934 500 1,267 1,767
Redemption of original shares (4,100,000) (150,000) (150,000)
Net Loss (204,348) (204,348)
---------- ----- --------- -------- -----
Balance, November 30, 2000 12,675,000 1,268 1,329,072 (204,348) 1,125,992
Purchase of treasury stock, 7,065,000 shares
during January, 2001 with cash (1,151,672)
($0.16 per share)
Issuance of shares as stock compensation
on February 7, 2001 4,200,000 420 41,580 42,000
($0.01 per share)
Issuance of shares as stock compensation
for legal fees, February 7, 2001 140,000 14 1,386 1,400
($0.01 per share)
Net Loss (27,370) (27,370)
---------- ----- --------- -------- -----
Balance, November 30, 2001 17,015,000 1,702 1,372,038 (231,718) (9,650)
Issuance of shares in private placement for cash
Reg D, Rule 506, September 7, 2002 1,000,000 100 24,900 25,000
($.025 per share)
Issuance of shares as stock compensation
for legal fees, September 7, 2002 250,000 25 4,975 5,000
($0.02 per share)
Net Loss (15,780) (15,780)
---------- ----- --------- -------- -----
Balance, November 30, 2002 18,265,000 1,827 1,401,913 (247,498) 4,570
---------- ----- --------- -------- -----
Net Loss (18,427) (18,427)
---------- ----- --------- -------- -----
Balance, November 30, 2003 18,265,000 $ 1,827 $ 1,401,913 $ (265,925) $ (13,857)
========== =========== =========== =========== ===========
The accompanying notes are an integral part of these consolidated financial statements.
F5
RELOCATE411.COM, INC.
( A Development Stage Company)
STATEMENTS OF CASH FLOWS
For the twelve months ended November 30, 2003 and 2002
and for the Period From Inception (December 19, 1997)
Through November 30, 2003
Period from
Inception
Through
November 30,
CASH FLOWS FROM OPERATING ACTIVITIES 2003 2002 2003
- ------------------------------------ ----------------- ----------------- ----------------
Net (loss) $ (18,427) $ (15,780) $ (265,925)
Adjustments to reconcile net loss to net cash used in operating
activities:
Depreciation and organization costs 1,500 1,999 9,992
Common stock issued for services 5,000 48,400
Non-cash equity adjustment in reverse merger (1,483)
(Increase) Decrease in interest receivable - - -
Increase (Decrease) in accounts payable and accrued expenses 5,500 (1,230) 11,525
----------------- ----------------- ----------------
Net cash flows provided by (used in) operating activities (11,427) (10,011) (197,491)
CASH FLOWS FROM INVESTING ACTIVITIES
Cash paid for note receivable - - (1,117,602)
Cash received from note receivable - - 1,117,602
Cash paid for equipment - - (11,465)
----------------- ----------------- ----------------
Net cash flows provided by (used in) investing activities - - (11,465)
----------------- ----------------- ----------------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from loans payable - 5,530 14,397
Proceeds from issuance of stock - 25,000 1,531,250
Cash paid for stock redemption - - (150,000)
Deferred offering costs against capital - - (25,927)
Acquisition of treasury stock - - (1,151,672)
----------------- ----------------- ----------------
Net cash flows provided by (used in) financing activities - 30,530 218,048
----------------- ----------------- ----------------
CASH RECONCILIATION
Net increase (decrease) in cash (11,427) 20,519 9,092
Cash at beginning of period 20,519 - -
----------------- ----------------- ----------------
CASH AT END OF PERIOD $ 9,092 $ 20,519 $ 9,092
================= ================= ================
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid during the year for interest $ - $ -
Cash paid during the year for income taxes $ - $ -
The accompanying notes are an integral part of these consolidated financial statements.
F6
RELOCATE 411.COM, INC.
(a development stage company)
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - BASIS OF PRESENTATION
Business
Relocate 411.com, Inc. (the Company), formerly known as Stateside
Fundings, Inc., was organized under the laws of the State of Delaware on
December 19, 1997 and has adopted a fiscal year ending November 30th. The
Company is considered to be in the development stage (a development stage
company) since it is devoting substantially all of its efforts to establishing a
new business. Its planned principal operations have not yet commenced and there
have been no revenues to date. The Company is developing a web site to be
utilized in various real estate services such as relocation, listings of real
estate sales or rentals, mortgage information and other real estate related
information or content.
Organization
On January 26, 2000, the stockholders of Relocate 411.com, Inc., a New
York Corporation incorporated on August 24, 1999, completed a merger and stock
exchange with Stateside Fundings, Inc., a Delaware Corporation, resulting in a
recapitalization of Stateside Fundings, Inc., the acquirer. Relocate 411.com,
Inc. merged into Stateside Fundings, Inc. Stateside Fundings, Inc. acquired all
of the assets and liabilities of Relocate 411.com, Inc.
Under the terms of the Merger Agreement, each share of Relocate 411.com,
Inc. common stock converted into one hundred thousand shares of Stateside
Fundings, Inc. common stock. Contemporaneously, with the merger, Stateside
Fundings, Inc. issued 5,175,000 shares of its common stock in a private
placement transaction, receiving net proceeds of $1,354,250. The net proceeds
received were after a payment of $150,000 to redeem 4,100,000 share of common
stock from the founder of Stateside Fundings, Inc. As part of the merger,
Stateside Fundings, Inc. then issued 6,600,000 common shares to Relocate
411.com, Inc. in exchange for the 66 shares held by the stockholders of Relocate
411.com, Inc.
The financial statements reflect that of the acquirer, Stateside
Fundings, Inc., the entity that survived the merger. The Accumulated Deficit of
Stateside Fundings, Inc. as of January 26, 2000 was $ 1,303.
On January 27, 2000, Stateside Fundings, Inc. filed a Certificate of
Amendment changing their name to Relocate 411.com, Inc.
Note 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Development Stage Activities and Operations:
All costs incurred in development activities are charged to operations
as incurred. The Company has not produced any revenues from operations.
Use of Estimates:
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those amounts.
F7
Accounts Receivable, deposits, Accounts Payable and accrued Expenses:
Accounts receivable have historically been immaterial and therefore no allowance
for doubtful accounts has been established. Normal operating refundable Company
deposits are listed as Other Assets. Accounts payable and accrued expenses
consist of trade payables created from the normal course of business.
Property and Equipment:
Property and equipment purchased by the Company are recorded at cost.
Depreciation is computed by the straight-line method based upon the estimated
useful lives of the respective assets. Expenditures for repairs and maintenance
are charged to expense as incurred as are any items purchased which are below
the Company's capitalization threshold of $1,000.
For assets sold or otherwise disposed of, the cost and related accumulated
depreciation are removed from accounts, and any related gain or loss is
reflected in income for the period.
Income Taxes:
The Company accounts for income taxes using the liability method which requires
recognition of deferred tax liabilities and assets for the expected future tax
consequences of events that have been included in the financial statements or
tax returns. Deferred tax assets and liabilities are determined based on the
difference between the financial statements and tax basis of assets and
liabilities using enacted tax rates in effect for the year in which the
differences are expected to reverse. The Company's management determines if a
valuation allowance is necessary to reduce any tax benefits when the available
benefits are more likely than not to expire before they can be used.
Stock Based Compensation:
In October 1995, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 123, "Accounting for Stock-Based
Compensation," (SFAS 123), which is effective for periods beginning after
December 15, 1995. SFAS 123 requires that companies either recognize
compensation expense for grants of stock, stock options, and other equity
instruments based on fair value or provide pro-forma disclosure of the effect on
net income and earnings per share in the Notes to the Financial Statements. The
Company has adopted SFAS 123 in accounting for stock-based compensation.
Cash and Cash Equivalents, and Credit Risk:
For purposes of reporting cash flows, the Company considers all cash accounts
with maturities of 90 days or less and which are not subject to withdrawal
restrictions or penalties, as cash and cash equivalents in the accompanying
balance sheet.
The portion of deposits in a financial institution that insures its deposits
with the FDIC up to $100,000 per depositor in excess of such insured amounts are
not subject to insurance and represent a credit risk to the Company.
F8
Fair Value of Financial Instruments:
SFAS No. 107, "Disclosures About Fair Value of Financial Instruments", requires
disclosure of the fair value information whether or not recognized in the
balance sheet, where it is practicable to estimate that value. The carrying
value of cash, cash equivalents, accounts receivable and notes payable
approximates fair value.
Impairment of Long-Lived Assets:
Company's management believes that any evaluation necessitated through the
adoption of SFAS 121, "Accounting for the Impairment Long-Lived Assets and for
Long-Lived Assets to be Disposed of." will not be material.
Loss Per Common Share:
The Company has adopted Financial Accounting Standards Board (FASB) Statement
No. 128, "Earnings per Share". The Statement establishes standards for computing
and presenting earnings per share (EPS). It replaced the presentation of primary
EPS with a presentation of basic EPS and also requires dual presentation of
basic and diluted EPS on the face of the income statement. The statement was
retroactively applied to the prior loss per share but did not have any effect.
Basic loss per share was computed by dividing the Company's net loss by the
weighted average number of common shares outstanding during the period. There is
no presentation of diluted loss per share as the effect of common stock options,
warrants and convertible debt amount are antidilutive
NOTE 3 - NOTE RECEIVABLE
On May 25, 2000, the Company loaned $1,117,602 to Teltran International Group,
Ltd. (Teltran), a publicly held company presently trading on the NASD OTC Pink
Sheets. Some of Teltran's stockholders and officers own approximately 42% of the
Company. The loan bore interest at 9 1/2% annually and was secured by a
promissory note. Teltran pledged its one share of Teltran Web Factory, Ltd. a
wholly owned foreign subsidiary of Teltran as well as issuing 250,000 warrants
exercisable from May 25, 2000 to May 24, 2005 to purchase Teltran common stock
at a price of $1.10 per share.
On March 2, 2001 the Company received preferred shares in NCTN Networks,
Inc. in full settlement of the note receivable and the outstanding interest. The
Company retained the warrants it received and returned all Teltran share
certificates, which were held as security for the note receivable.
Simultaneously, these preferred shares were exchanged as consideration for all
outstanding shares and warrants in the Company held by the Company's investors.
NOTE 4 - ORGANIZATION COSTS
The Company had adopted for fiscal year-ended November 30, 1999 the requirements
set forth in accordance to SOP 98-5. SOP 98-5 requires the costs of organization
expenses to be expensed as incurred for fiscal years beginning after December
15, 1998. The initial application of SOP 98-5 was reported for the fiscal
year-ended November 30, 1999 as a cumulative effect of a change in accounting
principle as described in APB Opinion 20, Accounting Changes.
NOTE 5 - INCOME TAX PAYABLE
Income taxes have been accrued based on alternative methods of computing minimum
New York State and City corporate taxes.
F9
NOTE 6 - STOCKHOLDERS EQUITY
PREFERRED STOCK:
The Company has authorized 10,000,000 preferred shares with a par value of
$.0001, none of which are issued or outstanding.
COMMON STOCK:
The Company has authorized 50,000,000 common shares with a par value of $.0001
of which 11,200,000 shares were issued and outstanding for the year ended
November 30, 2002 and 9,950,000 for the year ended November 30, 2001. The number
of shares disclosed as issued and outstanding do not include common shares held
in treasury.
During January of 2001, the Company repurchased 7,065,000 shares of its common
stock from its initial investors with a payment of a stock offering (See Note 3)
for a total of $1,151,672.
On February 7, 2001, the Company issued 4,200,000 shares of its common stock, as
per the terms of the exchange and release agreement, in consideration for the
shares of NCT Preferred Stock and all common shares and warrants held in the
Company by original investors and in consideration of accrued service fees for a
total of $42,000, or $0.01 per share. The Company's original investor shares and
warrants were cancelled and replaced with the Company's common shares.
On February 7, 2001, the Company issued 140,000 shares of its common stock as
consideration for legal services in the amount of $1,400. or $0.01 per share.
On September 7, 2002, the Company undertook a private placement offering under
Rule 506 of Regulation D of the Securities Act. The Company's management
considers this offering to be exempt under the Securities Act of 1933. The
Company issued a total of 1,000,000 shares of its common stock for a total
consideration of $30,000 in cash, or $.025 per share.
On September 7, 2002, the Company issued 250,000 shares of its common stock for
a consideration of $5,000, or $.02 per share, in reliance on the exemption under
Section 4(2) of the Securities Act of 1933, as amended (the "Act") for legal
services rendered.
NOTE 7 - CONFLICTS OF INTEREST
Certain conflicts of interest have existed and will continue to exist between
management, their affiliates and the Company. Management have other interests
including business interests to which they devote their primary attention.
Management may continue to do so notwithstanding the fact that management time
should be devoted to the business of the Company and in addition, management may
negotiate an acquisition resulting in a conflict of interest.
NOTE 8 - CASH FLOW STATEMENT DISCLOSURE
For the years ended November 30, 2003 and 2002, the Company did not pay in cash
any income tax or interest on debt financing. Non-cash transactions included the
issuance of common shares of the Company's stock in consideration for services
provided to the Company in the amount of $5,000 for the year ended November 30,
2002.
F-10
NOTE 9 - LITIGATION, CONTINGENCIES, OPERATING AND CAPITAL LEASES
From time to time in the normal course of business the Company may be involved
in litigation. The Company's management is not aware of any asserted or
unasserted claims and therefore feels any such proceedings to have an immaterial
effect on the financial statements.
The Company's management has not bound the Company with any contingencies other
than those through the normal course of business.
The Company has no operating or capital leases, but will account for such leases
in accordance with Generally Accepted Accounting Principles when entered into
which would require operating leases to be expensed and capital leases to be
capitalized and amortized over the lease term.
NOTE 10 - GOING CONCERN
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As a development stage company, the
Company has no revenue from operations and limited financing. The Company's
continued existence is dependent upon its ability to meet its financing
requirements on a continuing basis, and to succeed in its future operations. The
financial statements do not include any adjustments that might result from this
uncertainty.
Because of uncertainties surrounding the Company's development and limited
operating history, management anticipates incurring development stage losses in
the foreseeable future. Management's ability to achieve the Company's business
objectives is contingent upon its success in raising additional capital until
adequate revenues are realized from operations. Management believes that the
Company has sufficient cash to meet the minimum development and operating costs
for the next 12 months. The Company will need to raise additional capital to
continue operations past 12 months, and there is no assurance that the Company
will be successful in raising the needed capital.
F-11
RELOCATE 411.COM, INC.
1,250,000 Shares of Common Stock
PROSPECTUS
YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED IN THIS DOCUMENT OR THAT WE
HAVE REFERRED YOU TO. WE HAVE NOT AUTHORIZED ANYONE TO PROVIDE YOU WITH
INFORMATION THAT IS DIFFERENT. THIS PROSPECTUS IS NOT AN OFFER TO SELL COMMON
STOCK AND IS NOT SOLICITING AN OFFER TO BUY COMMON STOCK IN ANY STATE WHERE THE
OFFER OR SALE IS NOT PERMITTED.
February 11, 2004
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 24. INDEMNIFICATION OF DIRECTORS, OFFICERS, EMPLOYEES AND AGENTS.
Section 102(b)(7) of the DGCL enables a corporation in its original certificate
of incorporation or an amendment thereto to eliminate or limit the personal
liability of a director to a corporation or its stockholders for violations of
the director's fiduciary duty, except:
o for any breach of a director's duty of loyalty to the corporation or
its stockholders,
o for acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law,
o pursuant to Section 174 of the DGCL (providing for liability of
directors for unlawful payment of dividends or unlawful stock
purchases or redemptions), or
o for any transaction from which a director derived an improper personal
benefit.
Our certificate of incorporation provides in effect for the elimination of the
liability of directors to the extent permitted by the DGCL.
Section 145 of the DGCL provides, in summary, that directors and officers of
Delaware corporations are entitled, under certain circumstances, to be
indemnified against all expenses and liabilities (including attorney's fees)
incurred by them as a result of suits brought against them in their capacity as
a director or officer, if they acted in good faith and in a manner they
reasonably believed to be in or not opposed to the best interests of the
corporation, and, with respect to any criminal action or proceeding, if they had
no reasonable cause to believe their conduct was unlawful; provided, that no
indemnification may be made against expenses in respect of any claim, issue or
matter as to which they shall have been adjudged to be liable to the
corporation, unless and only to the extent that the court in which such action
or suit was brought shall determine upon application that, despite the
adjudication of liability but in view of all the circumstances of the case, they
are fairly and reasonably entitled to indemnity for such expenses which the
court shall deem proper. Any such indemnification may be made by the corporation
only as authorized in each specific case upon a determination by the
stockholders or disinterested directors that indemnification is proper because
the indemnitee has met the applicable standard of conduct. Our bylaws entitle
our officers and directors to indemnification to the fullest extent permitted by
the DGCL.
We have agreed to indemnify each of our directors and certain officers against
certain liabilities, including liabilities under the Securities Act of 1933.
Insofar as indemnification for liabilities arising under the Securities Act of
1933 may be permitted to our directors, officers and controlling persons
pursuant to the provisions described above, or otherwise, we have been advised
that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Securities Act of
1933 and is, therefore, unenforceable.
II-1
In the event that a claim for indemnification against such liabilities (other
than our payment of expenses incurred or paid by our director, officer or
controlling person in the successful defense of any action, suit or proceeding)
is asserted by such director, officer or controlling person in connection with
the securities being registered, we will, unless in the opinion of our counsel
the matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act and will be governed by
the final adjudication of such issue.
Item 25. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the expenses in connection with the issuance and
distribution of the securities being registered hereby. All such expenses will
be borne by the registrant; none shall be borne by any selling stockholders.
Securities and Exchange $ 100
Commission registration fee
Legal fees and expenses $ 7,500
Accounting fees and $ 7,500
expenses
Miscellaneous $ 0
Total (1) $15,100
Item 26. RECENT SALES OF UNREGISTERED SECURITIES.
On January 26, 2000 we issued the following shares: (i) 2,200,000 shares to
Darrell Lerner, 2,200,000 shares to Byron Lerner and 2,200,000 shares to Barry
Manko in reliance on the exemption under Section 4(2) of the Securities Act of
1933, as amended (the "Act"). The shares were issued as part of the transaction
between us and Relocate411.com, Inc., a New York corporation ("NY Relocate")
whereby we acquired all of the shares of NY Relocate and it became our wholly
owned subsidiary. Each share of NY Relocate was converted into 1000 of our
shares. Darrell Lerner, Byron Lerner and Barry Manko each held 2,200 shares of
NY Relocate prior to the transaction; (ii) 900,000 shares to James Tubbs in
reliance on the exemption under Section 4(2) of the Act for consideration of
$900 or $.001 per share; (iii) 60,000 shares to Grushko & Mittman in reliance on
the exemption under Section 4(2) of the Act for legal services rendered valued
at $20,000 or $.3333 per share. We subsequently entered into an agreement with
Barry Manko in which he agreed to cancel 1,950,000 shares of our common stock
for cash consideration.
These shares of our common stock qualified for exemption under Section 4(2) of
the Securities Act of 1933 since the issuance shares by us did not involve a
public offering. Each of these shareholders was a sophisticated investor and had
access to information regarding us. The offering was not a "public offering" as
defined in Section 4(2) due to the insubstantial number of persons involved in
the deal, size of the offering, manner of the offering and number of shares
offered. We did not undertake an offering in which we sold a high number of
shares to a high number of investors. In addition, these shareholders had the
necessary investment intent as required by Section 4(2) since they agreed to and
received share certificates bearing a legend stating that such shares are
restricted pursuant to Rule 144 of the 1933 Securities Act. This restriction
ensures that these shares would not be immediately redistributed into the market
and therefore not be part of a "public offering." Based on an analysis of the
above factors, we have met the requirements to qualify for exemption under
Section 4(2) of the Securities Act of 1933 for this transaction.
In addition, on January 26 2000, we completed a private placement of our shares
by raising $1,550,000 and issuing a total of (i) 5,115,000 shares of Common
Stock to 10 "accredited investors" and (ii) 5,115,000 Warrants to purchase
5,115,000 shares of Common Stock at an exercise price of $.75 per share (the
"Private Placement"). One share of our common stock and one warrant
(collectively, a "Unit") were valued at $.333 per Unit. Such securities were
sold in reliance on an exemption from registration under Section 4(2) of the
Securities Act of 1933.
II-2
The following sets forth the identity of the class of persons to whom we sold
these shares and the amount of shares and warrants for each shareholder:
Shares Warrants Consideration
------ -------- -------------
Austost Anstalt 1,500,000 1,500,000 $500,000
Schaan
Balmore Funds, S.A. 1,500,000 1,500,000 $500,000
Amro 791,250 791,250 $250,000
International, S.A
ICT N.V 150,000 150,000 $ 50,000
Leval Trading, Inc. 450,000 450,000 $150,000
Nesher, Inc. 150,000 150,000 $ 50,000
Talbiya B 166,500 166,500 $ 50,000
Investments
Libra Finance, S.A 198,000 198,000
J. Hayut 139,500 139,500
Hyett Capital Ltd. 69,750 69,750
The shares of our common stock qualified for exemption under Section 4(2) of the
Securities Act of 1933 since the issuance of such shares by us not involving a
public offering. Each of these shareholders was a sophisticated investor and had
access to information regarding us. The offering was not a "public offering" as
defined in Section 4(2) due to the insubstantial number of persons involved in
the deal, size of the offering, manner of the offering and number of shares
offered. We did not undertake an offering in which it sold a high number of
shares to a high number of investors. In addition, these shareholder had the
necessary investment intent as required by Section 4(2) since they agreed to and
received a share certificate bearing a legend stating that such shares are
restricted pursuant to Rule 144 of the 1933 Securities Act. These restrictions
ensure that these shares would not be immediately redistributed into the market
and therefore not be part of a "public offering." Based on an analysis of the
above factors, we have met the requirements to qualify for exemption under
Section 4(2) of the Securities Act of 1933 for this transaction. All of these
shares and outstanding warrants were cancelled in consideration for the issuance
of the preferred shares received by us in the default of the loan from Teltran.
On February 7, 2001 we issued the following shares: (i) 2,100,000 of our shares
to Darrell Lerner; (ii) 2,100,000 of our shares to Byron Lerner; (iii) 140,000
of our shares to Grushko & Mittman. All such issuances relied on the exemption
under Section 4(2) of the Securities Act of 1933, as amended (the "Act"). Of
such amount, Darrell Lerner and Byron Lerner each received 2,100,000 shares as
compensation in lieu of salaries valued at $.01 per share of $42,000; and
Grushko & Mittman were issued 140,000 shares for legal services rendered to us
valued at $.01 per share at $1,400.
The shares of our common stock qualified for exemption under Section 4(2) of the
Securities Act of 1933 since the issuance of such shares by us not involving a
public offering. Each of these shareholders was a sophisticated investor and had
access to information regarding us. The offering was not a "public offering" as
defined in Section 4(2) due to the insubstantial number of persons involved in
the deal, size of the offering, manner of the offering and number of shares
offered. We did not undertake an offering in which it sold a high number of
shares to a high number of investors. In addition, these shareholder had the
necessary investment intent as required by Section 4(2) since they agreed to and
received a share certificate bearing a legend stating that such shares are
restricted pursuant to Rule 144 of the 1933 Securities Act. These restrictions
ensure that these shares would not be immediately redistributed into the market
and therefore not be part of a "public offering." Based on an analysis of the
above factors, we have met the requirements to qualify for exemption under
Section 4(2) of the Securities Act of 1933 for this transaction.
II-3
In September, 2002, we completed a Regulation D, Rule 506 Offering in which we
issued a total of 1,000,000 shares of our common stock to 34 shareholders for an
aggregate offering price of $25,000. The following sets forth the identity of
the class of persons to whom Relocate sold these shares and the amount of shares
for each shareholder:
Frank Massaro 16,000
Michael and Thelma Hartman 40,000
Nicholas A. Waslyn 20,000
Eric Tjaden 26,000
Margaret Indelicato 16,000
Juan C. Morales 4,000
Sheldon Shalom 4,000
Patricia Faro 4,000
Philip Mazzella 16,000
Richard Zapolski 16,000
William Grimm 8,000
Richard Volpe 16,000
Mark J. Parendo 20,000
Mitch Hershkowitz 20,000
Kristine Gentile 4,000
Robert M. J. Hartman 20,000
Danielle L. Hartman 20,000
Martin Miller 60,000
Dolores E. Miller 100,000
Dolores E. Miller 20,000
Drew Goldberg 10,000
Carol Sitte 50,000
Karen Pasteressa 20,000
Desert Green, Inc. 40,000
Robert Giambrone 50,000
Anthony Giambrone 60,000
Melvin D. Bernstein 52,000
Linda Bernstein 28,000
Beth Sussman 40,000
Jeffrey Wenzel 40,000
Tracey Wenzel 40,000
Harold Sussman 40,000
Amy Sussman 40,000
Meg L. Sussman 40,000
The Common Stock issued in the Company's Regulation D, Rule 506 offering was
issued in a transaction not involving a public offering in reliance upon an
exemption from registration provided by Rule 506 of Regulation D of the
Securities Act of 1933. In accordance with Section 230.506 (b)(1) of the
Securities Act of 1933, these shares qualified for exemption under the Rule 506
exemption for this offerings since it met the following requirements set forth
in Reg. ss.230.506:
(A) No general solicitation or advertising was conducted by the Company in
connection with the offering of any of the Shares.
(B) At the time of the offering the Company was not: (1) subject to the
reporting requirements of Section 13 or 15 (d) of the Exchange Act; or (2)
an "investment company" within the meaning of the federal securities laws.
(C) Neither the Company, nor any predecessor of the Company, nor any director
of the Company, nor any beneficial owner of 10% or more of any class of
the Company's equity securities, nor any promoter currently connected with
the Company in any capacity has been convicted within the past ten years
of any felony in connection with the purchase or sale of any security.
(D) The offers and sales of securities by the Company pursuant to the
offerings were not attempts to evade any registration or resale
requirements of the securities laws of the United States or any of its
states.
II-4
(E) None of the investors are affiliated with any director, officer or
promoter of the Company or any beneficial owner of 10% or more of the
Company's securities.
Please note that pursuant to Rule 506, all shares purchased in the Regulation D
Rule 506 offering completed in September 2002 were restricted in accordance with
Rule 144 of the Securities Act of 1933.
On September 7, 2002, we issued 250,000 shares to Anslow & Jaclin, LLP in
reliance on the exemption under Section 4(2) of the Securities Act of 1933, as
amended (the "Act") for legal services rendered to us.
The shares of our common stock qualified for exemption under Section 4(2) of the
Securities Act of 1933 since the issuance of such shares by us not involving a
public offering. The offering was not a "public offering" as defined in Section
4(2) due to the insubstantial number of persons involved in the deal, size of
the offering, manner of the offering and number of shares offered. We did not
undertake an offering in which it sold a high number of shares to a high number
of investors. In addition, these shareholder had the necessary investment intent
as required by Section 4(2) since they agreed to and received a share
certificate bearing a legend stating that such shares are restricted pursuant to
Rule 144 of the 1933 Securities Act. These restrictions ensure that these shares
would not be immediately redistributed into the market and therefore not be part
of a "public offering." Based on an analysis of the above factors, we have met
the requirements to qualify for exemption under Section 4(2) of the Securities
Act of 1933 for this transaction.
We have never utilized an underwriter for an offering of our securities. Other
than the securities mentioned above, we have not issued or sold any securities.
Item 27. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
(a) Exhibits:
The following exhibits are filed as part of prospectus dated February 11, 2004:
EXHIBIT DESCRIPTION
------- -----------
3.1 Certificate of Incorporation of Relocate411.com, Inc. *
3.2 Certificate of Amendments of the Certificate of Incorporation
of Relocate411.com, Inc. *
3.2 By-laws of Relocate411.com, Inc. *
5.1 Opinion of Anslow & Jaclin LLP
23.1 Consent of Anslow & Jaclin LLP (included in Exhibit 5.1)
23.2 Consent of Gately & Associates, LLC
23.3 Consent of Marvin Kirschenbaum, CPA
24.1 Power of Attorney (included on page II-6 of the registration
statement)
* Filed with the original Form SB-2 filed on October 28, 2002.
II-5
Item 28. UNDERTAKINGS.
(A) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to prospectus dated February 11, 2004 to:
(i) Include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) Reflect in the prospectus any facts or events which, individually
or together, represent a fundamental change in the information
set forth in the prospectus. 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) 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 prospectus; and
(iii)Include any material information with respect to the plan of
distribution not previously disclosed in the prospectus or any
material change to such information in the prospectus.
(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 prospectus relating to the securities offered
therein, and the offering therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering
thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the
termination of the offering.
(B) Undertaking Required by Regulation S-B, Item 512(e).
Insofar as indemnification for liabilities arising under the Securities Act of
1933 may be permitted to directors, officers or controlling persons 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 Securities Act of 1933 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 that the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act of 1933 and will be
governed by the final adjudication of such issue.
II-6
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant has
duly caused registration statement dated February 11, 2004 to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Roslyn,
State of New York, on the 11th day of February, 2004.
RELOCATE411.COM, INC.
By: /s/ Darrell Lerner
------------------------------------
DARRELL LERNER
PRESIDENT AND SECRETARY
POWER OF ATTORNEY
The undersigned directors and officers of Relocate411.com, Inc. hereby
constitute and appoint Darrell Lerner, with full power to act without the other
and with full power of substitution and resubstitution, our true and lawful
attorneys-in-fact with full power to execute in our name and behalf in the
capacities indicated below any and all amendments (including post-effective
amendments and amendments thereto) to registration statement dated February 11,
2004 under the Securities Act of 1933 and to file the same, with all exhibits
thereto and other documents in connection therewith, with the Securities and
Exchange Commission and hereby ratify and confirm each and every act and thing
that such attorneys-in-fact, or any them, or their substitutes, shall lawfully
do or cause to be done by virtue thereof.
Pursuant to the requirements of the Securities Act of 1933, registration
statement dated February 11, 2004 has been signed by the following persons in
the capacities and on the dates indicated.
By: /s/ Darrell Lerner President, Secretary and Dated: February 11, 2004
- ----------------------- Director
Darrell Lerner
II-7