Registration No. 333-113241
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM SB-2
REGISTRATION STATEMENT
(Amendment Number 1)
UNDER
THE SECURITIES ACT OF 1933
--------------------------
ATLANTIC SECURITY, INC.
(Name of Small Business Issuer in its Charter)
FLORIDA 3949 65-0963962
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(State of Other (Primary Standard (IRS Employer
Jurisdiction of Industrial Identification No.
Incorporation or Classification
Organization) Code No.)
Glyme House
St. John's Street,
Bicester,
Oxfordshire,
OX26 6SL
00 44 1869 242378
(Address and telephone number of principal executive offices and principal
place of business)
James G. Dodrill II, Esq.
5800 Hamilton Way
Boca Raton, FL 33496
561-862-0529
(Name, address and telephone number of agent for service)
Copies to:
James G. Dodrill II, Esq.
James G. Dodrill II, P.A.
5800 Hamilton Way
Boca Raton, FL 33496
561-862-0529
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Approximate date of proposed sale to the public:
As soon as practicable after the effective date of this
registration statement.
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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,
check the following box and list the Securities Act registration
statement number of earlier effective registration statement for
the same offering. ( )
If this Form is a post-effective amendment filed pursuant
to Rule 462 (c) under the Securities Act, check the following box
and list the Securities Act registration statement number of the
earlier effective registration statement for the same offering. ( ).
If delivery of the prospectus is expected to be made
pursuant to Rule 434, please check the following box. ( ).
CALCULATION OF REGISTRATION FEE
PROPOSED PROPOSED
TITLE OF EACH CLASS MAXIMUM MAXIMUM
OF AMOUNT TO OFFERING AGGREGATE AMOUNT OF
SHARES TO BE BE PRICE PER OFFERING REGISTRATION
REGISTERED REGISTERED SHARE <F1> PRICE FEE
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Common Stock,
$.0001 par value to be
sold by selling
shareholders 5,514,500 $0.25 $1,142,375 $175.09
TOTAL 5,514,500 $1,142,375 $175.09
(1) Estimated solely for the purpose of calculating the
registration fee pursuant to Rule 457.
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The registrant hereby amends this registration statement on
such date or dates as may be necessary to delay its effective
date until the registrant shall file a further amendment which
specifically states that this registration statement shall
thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the registration statement
shall become effective on such date as the Commission, acting
pursuant to said Section 8(a), may determine.
Information contained herein is subject to completion or
amendment. A registration statement relating to these
securities has been filed with the Securities and Exchange
Commission. We may not sell these securities until the
registration statement filed with the Securities and Exchange
Commission is effective. This prospectus is not an offer to
sell these securities and it is not soliciting an offer to buy
these securities in any state in which the offer or sale is
not permitted.
PROPECTUS
SUBJECT TO COMPLETION, DATED APRIL 22, 2004
5,514,500 Shares of Common Stock
ATLANTIC SECURITY, INC.
(A Florida Corporation)
This is our initial public offering. We are registering a total
of 5,514,500 shares of our common stock, all of which are being
offered by selling shareholders. The selling shareholders who are
affiliates will sell their shares at a price per share of $0.25 for
the duration of the offering and our other selling shareholders will
sell their shares at a price per share of $0.25 per share until our
shares are quoted on the Over The Counter Bulletin Board and
thereafter at prevailing market prices or in privately negotiated
transactions.
We will not receive any proceeds from the sale of any of the
shares by selling shareholders. There is no established public market
for our common stock and we have arbitrarily determined the offering
price. Although we hope to be quoted on the OTC Bulletin Board, our
Common Stock is not currently listed or quoted on any quotation
service. There can be no assurance that our common stock will ever be
quoted on any quotation service or that any market for our stock will
ever develop.
_________________________________
INVESTING IN OUR STOCK INVOLVES RISKS. YOU SHOULD CAREFULLY
CONSIDER THE RISK FACTORS BEGINNING ON PAGE 7 OF THIS PROSPECTUS.
Neither the Securities and Exchange Commission nor any state
securities commission has approved or disapproved of these securities
or passed upon the adequacy or accuracy of this prospectus. Any
representation to the contrary is a criminal offense.
The information in this prospectus is not complete and may be
changed. None of these securities may be sold until a registration
statement filed with the Securities and Exchange Commission is
effective. The 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.
The date of this Prospectus is April 22, 2004
TABLE OF CONTENTS
Page
----
Prospectus Summary 3
The Offering 4
Summary Financial Information 5
Risk Factors 6
Forward Looking Statements 11
Penny Stock Regulations 12
Use of Proceeds 13
Determination of Offering Price 14
Dividend Policy 14
Management's Plan of Operations 15
Business 21
Management 32
Principal Shareholders 35
Selling Shareholders 36
Description of Securities 39
Certain Relationships and Related Transactions 41
Indemnification 42
Plan of Distribution 43
Legal Matters 45
Experts 45
Where You Can Find More Information 46
Index to Financial Statements
PROSPECTUS SUMMARY
Because this is a summary, it does not contain all of the
information that may be important to you. You should read the entire
prospectus. You should consider the information set forth under "Risk
Factors" and our financial statements and accompanying notes that
appear elsewhere in this prospectus.
We are a development stage company and were incorporated in
Florida on December 6, 1999, under the name Warrensburg Enterprises,
Inc. and were formed with the contemplated purpose to engage in
mergers and acquisitions. On May 15, 2003, we consummated an
agreement with Atlantic Security Limited, a United Kingdom
corporation, pursuant to which Atlantic Security Limited exchanged all
of its then issued and outstanding shares of common stock for
approximately 80% of the common stock of Atlantic Security, Inc.
We are led by, Terence Sullivan, our President and Chief
Executive Officer. Mr. Sullivan has extensive experience in the
management and growth of companies with a focus on telecommunications
and security. He has served as an advisor to various companies,
including C&W North America, British Telecom and Reuters.
We are in the process of starting to develop various
applications and technologies with the help of outside organizations.
These products currently under development at this moment are
detectors for identifying bio-terrorism threats; tracking many forms
of illicit cargos, medical application in detecting super bugs. We
are developing these products with the help of Middlesex University
who have the facilities and Professor Gorbunov the owner of the
intellectual property rights and Dr Oliver Cassell of the Oxfordshire
plastic surgical association.
Other products include: (a) intelligent tracking solutions from
a company called Comnytell and European Telecom Limited where we have
reached an oral agreement to acquire global licenses but have not as
yet signed agreements and (b) Smart Wireless Surveillance Solution
from a company called SA limited which owns the rights and have agreed
an oral agreement to sell these to us once we are in the position to
pay. In the mean time it has allowed the company to have global
rights, again by oral agreement.
We intend to own options or the rights to these products at some
point in the future when the company has sufficient funds, in the
short term will need to find partners in industry to build these and
to exploit these under a license from us. Our objective is not to go
into the expense of developing these products ourselves but to sell
the license to other larger companies. In the event that we are
unable to identify and contract with such a partner we would have to
decide whether we have the ability and desire to invest the funds
necessary to fully develop the products.
We have achieved no revenues to date and our loss from inception
to December 31, 2003 have been $234,261. Our principal executive and
administrative offices are located at Glyme House, St. John's Street,
Bicester, Oxfordshire, United Kingdom OX26 6SL +441896242378 fax
+441869322402.
The Offering
Securities Offered 5,514,500 shares of
common stock, all of
which will be offered by
selling shareholders.
The selling shareholders
who are affiliates will
sell their shares at a
price per share of $0.25
for the duration of the
offering and our other
selling shareholders will
sell their shares at a
price per share of $0.25
per share until our
shares are quoted on the
Over The Counter Bulletin
Board and thereafter at
prevailing market prices
or in privately
negotiated transactions.
Common Stock Outstanding, before offering 23,058,000
Common Stock Outstanding, after offering 23,058,000
Use of Proceeds We will not receive any
proceeds from the sale of
common stock by our
selling shareholders.
Dividend Policy We do not intend to pay
dividends on our common
stock. We plan to retain
any earnings for use in
the operation of our
business and to fund
future growth.
Summary Financial Information
The following is a summary of our Financial Statements, which are
included elsewhere in this prospectus. You should read the following
data together with the "Management's Discussion and Analysis of
Financial Condition and Results of Operations" section of this
prospectus as well as with our Financial Statements and the notes
therewith.
For the Period Period
nine from from
months September 6, September 6,
ended 2002 2002
December 31, (Inception) (Inception)
2003 to March to December
(unaudited) 31, 2003 31, 2003
(unaudited)
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Statement of Operations Data:
Total Revenue $ 0 $ 0 $ 0
Total Operating Expenses $ 231,367 $ (2,915) $(234,281)
Net Loss $(231,347) $ (2,915) $(234,261)
As of
December
31, 2003
(unaudited)
-----------
Balance Sheet Data
Cash and cash equivalents $82,030
Total current assets $83,530
Total current liabilities $89,694
Total stockholders' deficiency $(6,164)
Total liabilities and stockholders' deficiency $83,530
Risk Factors
The securities offered by this prospectus are highly speculative
and very risky. We have described the material risks that we face
below. Before you buy, consider the risk factors described and the
rest of this prospectus. This prospectus also contains forward-
looking statements that involve risks and uncertainties. Our actual
results could differ materially from those anticipated in these
forward-looking statements as a result of certain factors, including
the risks faced by us described below and elsewhere in this
prospectus. Please refer to "Risks Associated with Forward-looking
Statements" on page 12.
RISK FACTORS
The securities offered are highly speculative. You should purchase
them only if you can afford to lose your entire investment in us. You
should carefully consider the following risk factors, as well as all
other information in this prospectus.
Investors should assume that if any of the following risks
actually materialize, our business, financial condition or results of
future operations could be materially and adversely affected. In that
case, the trading price of our common stock could decline, and you may
lose all or part of your investment.
Risks related to our business:
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Our financial statements expressed doubt about our ability to continue
as a going concern.
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The notes to our financial statements include an explanatory
paragraph expressing substantial doubt about our ability to continue as
a going concern. Among the reasons cited in the notes as raising
substantial doubt as to our ability to continue as a going concern are
the following: we are a development stage company with no revenues and
have a negative cash flow from operations from inception through
December 31, 2003 of $48,511. Our ability to continue as a going
concern is dependent on our ability to further implement our business
plan, raise additional capital and generate revenues. These conditions
raise substantial doubt about our ability continue as a going concern.
We have a history of operating losses, limited funds and may continue
to incur operating losses.
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We have a history of operating losses. We have incurred
operating losses since our inception and have an accumulated deficit of
$234,261 as of December 31, 2003. We incurred a net loss of $234,347
for the nine months ended December 31, 2003. If our business plan is
not fully executed as planned, we may continue to experience losses as
we continue to invest in our core businesses. As of December 31, 2003
we had $82,030 in cash available for use in executing our business
plan, which is insufficient for execution and expansion of our
business plan. Our ability to execute our business model will depend
on our ability to obtain additional financing and achieve a profitable
level of operations. We anticipate that unless we are able to raise
net proceeds of at least $500,000 within the next twelve months that
we will not be able to execute our business plan in a meaningful way.
Raising this amount will allow us to proceed with the basic elements
of our business plan. However, even if we raise this full amount
there can be no assurance that we will be successful in executing our
plan or achieving profitability. If we are unsuccessful at raising
sufficient funds, for whatever reason, to fund our operations, we may
be forced to seek a buyer for our business or another entity with
which we could create a joint venture. If all of these alternatives
fail, we expect that we will be required to seek protection from
creditors under applicable bankruptcy laws. We wish to confirm,
however that we do not have any plans, nor have we entered into any
negotiations, understandings or agreements to acquire or be acquired
by another company.
Even if we receive all funds anticipated from Citywide Management
Services upon our shares being quoted on the Over the Counter Bulletin
Board, we may need additional financing in the future and if we are
unable to raise such financing we may be forced to file bankruptcy.
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Upon our shares being approved for quotation on the Over the
Counter Bulletin Board we will be entitled to receive $500,000 from
Citywide Management Services pursuant to a Financing Agreement entered
into on August 10, 2003. Even if we receive all such funds, we expect
that we will seek additional financing in the future. Raising
$500,000 allows us to proceed with the basic elements of our business
plan. Raising additional funds, however, would allow us to expedite
various aspects of our operations. However, we may not be able to
obtain additional capital or generate sufficient revenues to fund our
operations. To assist us in our cash flow requirements we may
determine, depending upon the prevailing stock price of our shares, to
seek subscriptions from the sale of securities to private investors,
although there can be no assurance that we will be successful in
securing any investment from private investors at terms and conditions
satisfactory to us, if at all. If we are unsuccessful at raising
sufficient funds, for whatever reason, to fund our operations, we may
be forced to seek a buyer for our business or another entity with
which we could create a joint venture. We wish to confirm, however
that we do not have any plans, nor have we entered into any
negotiations, understandings or agreements to acquire or be acquired
by another company. If all of these alternatives fail, we expect that
we will be required to seek protection from creditors under applicable
bankruptcy laws.
We have not commenced full operations and we may not be able to
achieve or maintain profitability.
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We are a relatively young company and our proposed operations are
subject to all of the risks inherent in such a business enterprise.
The likelihood of our success must be considered in light of the
problems, expenses, difficulties, complications, and delays frequently
encountered in connection with the development of a business in a
competitive industry. As with an investment in any emerging growth
company, ownership of common shares may involve a high degree of risk,
and is not recommended if you cannot reasonably bear the risk of a
total loss of your investment.
If we are unsuccessful in raising at least $500,000 we expect to
continue to incur operating losses in fiscal 2004, which ends March
31, 2004. If we do not achieve revenue growth sufficient to absorb
our planned expenditures, we could experience additional losses in
future periods. These losses or fluctuations in our operating results
could cause the market value of our common stock to decline.
We anticipate that in the future we will make significant
investments in our operations, particularly to support research and
development and marketing activities and, that as a result, operating
expenses are expected to continue to increase. We intend to make such
investments on an ongoing basis, primarily from cash generated from
operations and, to the extent necessary, funds available from
financing activities, as we develop and introduce new products and
expand into new markets. If net sales do not increase with capital or
other investments, we are likely to continue to incur net losses and
our financial condition could be materially adversely affected. There
can be no assurance that we will achieve or sustain profitability on a
quarterly or annual basis.
We do not currently hold the rights to any products or technology and
may never acquire or develop any.
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Although we have held negotiations with the holders of several
technologies and have reached an option agreement to acquire certain
technology from Dr. Boris Gorbunov, our minimal funding has prevented
us from fully acquiring any of these technologies. Among other
payments, our agreement with Dr. Gorbunov will require that we pay
$3,149,000 as an initial payment in order to exercise our option. We
have also negotiated an agreement to license certain technology from
Comnytell Developments Limited. Although an agreement has been
drafted, it has not as yet been signed because executing it would
require that we pay a license fee of $40,000. We decided that our
currently limited funds should be allocated towards fulfilling the
requirements necessary to receive the $500,000 funding from Citywide.
By doing so we have assumed the risk that when we go back to execute
the contract that Comnytell may wish to renegotiate the contract and
fee. Accordingly, even if we successfully complete the requirements
necessary to receive funding from Citywide we will not have the funds
necessary to exercise our option with Dr. Gorbunov and may not be able
to consummate the Comnytell agreement either. If we are unable to
acquire either of these technologies or acquire or develop other
technologies we will have no technologies or products of value. In
such a scenario it is likely that investors would lose all of their
investment.
Our officers and directors are not required to continue as
shareholders and may not maintain an equity interest in the company.
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There is no requirement that our current or any of our future
officers and/or directors retain any of their shares of our common
stock. Accordingly, there is no assurance that all or any of our
officers and/or directors will continue to maintain an equity interest
in the company. Any officer or director who ceases to maintain an
equity interest in the company may find that their interests do not
continue to mirror those of other shareholders. In this event such
officer or director may make different decisions than they might make
if they continued to maintain an equity interest in the company and
these decisions may prove to be less beneficial to the company or its
shareholders and accordingly the value of a shareholder's investment
may be diminished.
We have arbitrarily determined the offering price. Accordingly the
price you pay may not accurately reflect the value of our common
stock.
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We have arbitrarily determined the offering price of the common
stock because there is no market for any of our securities. There can
be no assurance that the offering price accurately reflects the value
of our common stock or that investors will be able to sell the common
stock for at least the offering price or at any price at any time.
We are dependent on the services of our President and the loss of
those services would have a material adverse effect on our business.
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We are highly dependent on the services of Terence
Sullivan, our Chairman of the Board and President. Mr. Sullivan
maintains responsibility for our overall corporate strategy. Mr.
Sullivan's business endeavors include substantial experience in the
management and growth of companies with a focus on telecommunications
and security. The loss of the services of Mr. Sullivan would have a
material adverse effect upon our business and prospects. Without Mr.
Sullivan's services we would likely not be able to execute our
business plan unless and until we found a replacement with similar
experience. There can be no assurance that we could find such a
replacement or that if we did that we could persuade such individual
to accept employment with us on acceptable terms, or at all. Please
be aware that we do not currently have "key man" insurance on Mr.
Sullivan and we do not anticipate being able to purchase such
insurance in the near future, if ever.
Our President has the voting power to control our affairs and may make
decisions that do not necessarily benefit all shareholders equally.
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As of the date of this prospectus, our President owns
approximately 41.63% of our outstanding Common Stock. Consequently,
Mr. Sullivan is in a position to substantially influence matters
submitted for shareholder votes, including the ability to elect a
majority of our Board of Directors and to exercise control over our
affairs, generally. Mr. Sullivan's decisions may not necessarily
reflect those of our other shareholders.
Future sales of our common stock may have a depressive effect upon its
price.
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All 23,058,000 of the currently outstanding shares of common
stock were issued at prices lower than the price of the shares of
common stock in this offering. With the exception of the shares of
common stock being registered in this Registration Statement for our
selling shareholders, these shares are "restricted securities" as that
term is defined by Rule 144 of the Securities Act, and in the future,
may be sold in compliance with Rule 144 or pursuant to an effective
registration statement. In the future, sales of presently restricted
securities may have an adverse effect on the market price of our
common stock should a public trading market develop for such shares.
Risks related to this offering:
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There has never been a market for our common stock and one may never
develop.
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Prior to this offering, there has been no public trading market
for our common stock and there can be no assurances that a public
trading market for the common stock will develop or, if developed,
will be sustained. Although we hope to be accepted for quotations on
the Over the Counter Bulletin Board, there can be no assurance that a
regular trading market will develop for the common stock offered
through this prospectus, or, if developed, that it will be maintained.
If a market for our shares never develops it will likely be very
difficult for investors to sell their shares at any price. In that
event investors may lose their entire investment.
There is no assurance of future dividends being paid.
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At this time we do not anticipate paying dividends in the future,
but instead plan to retain any earnings for use in the operation of
our business and to fund future growth. We are under no legal or
contractual obligation to declare or to pay dividends, and the timing
and amount of any future cash dividends and distributions is at the
discretion of our Board of Directors and will depend, among other
things, on our future after-tax earnings, operations, capital
requirements, borrowing capacity, financial condition and general
business conditions.
FORWARD-LOOKING STATEMENTS
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This prospectus includes forward-looking statements that involve risks
and uncertainties. These forward-looking statements include statements
under the captions "Prospectus Summary," "Risk Factors," "Use of
Proceeds," "Management's Discussion and Analysis of Financial
Condition and Results of Operations," "Business" and elsewhere in this
prospectus. You should not rely on these forward-looking statements
that apply only as of the date of this prospectus. These statements
refer to our future plans, objectives, expectations and intentions. We
use words such as "believe," "anticipate," "expect," "intend,"
"estimate" and similar expressions to identify forward-looking
statements. This prospectus also contains forward-looking statements
attributed to third parties relating to their estimates regarding the
growth of certain markets. You should not place undue reliance on
these forward-looking statements, which apply only as of the date of
this prospectus. Our actual results could differ materially from those
discussed in these forward-looking statements. Factors that could
contribute to these differences include those discussed in the
preceding pages and elsewhere in this prospectus.
Risks associated with forward-looking statements.
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This prospectus contains certain forward-looking statements
regarding management's plans and objectives for future operations,
including plans and objectives relating to our planned marketing
efforts and future economic performance. The forward-looking
statements and associated risks set forth in this prospectus includes
or relate to:
(1) The ability to obtain a meaningful degree of consumer
acceptance for the products now and in the future,
(2) The ability to market our products on a global basis at
competitive prices now and in the future,
(3) The ability to maintain brand-name recognition for our
products now and in the future,
(4) The success in forecasting demand for our products now and
in the future,
(5) The ability to maintain pricing and thereby maintain
adequate profit margins,
(6) The ability to achieve adequate intellectual property
protection,
(7) The ability to obtain and retain sufficient capital for
future operations,
(8) US government excluding non US based companies,
(9) Other, better and lower cost products appear and
(10) The technology not delivering all expected features due to
an inability to test.
Penny Stock Regulations
We are not listed on any stock exchange at this time. We hope
to become a bulletin board traded company. Such shares are referred
to as "penny stocks" within the definition of that term contained in
Rules 15g-1 through 15g-9 promulgated under the Securities Exchange
Act of 1934, as amended. These rules impose sales practices and
disclosure requirements on certain broker-dealers who engage in
certain transactions involving penny stocks. These additional sales
practices and disclosure requirements could impede the sale of our
securities, including securities purchased herein, in the secondary
market. In general, penny stocks are low priced securities that do
not have a very high trading volume. Consequently, the price of the
stock is volatile and you may not be able to buy or sell the stock
when you want. Accordingly, the liquidity for our securities may be
adversely affected, with related adverse effects on the price of our
securities.
Under the penny stock regulations, a broker-dealer selling penny
stocks to anyone other than an established customer or "accredited
investor" (generally, an individual with a net worth in excess of
$1,000,000 or annual income exceeding $200,000 or $300,000 together
with his or her spouse) must make a special suitability determination
for the purchaser and must receive the purchaser's written consent to
the transaction prior to the sale, unless the broker-dealer is
otherwise exempt. In addition, unless the broker-dealer or the
transaction is otherwise exempt, the penny stock regulations require
the broker-dealer to deliver, prior to any transaction involving a
penny stock, a disclosure schedule prepared by the Securities and
Exchange Commission relating to the penny stock. A broker-dealer is
also required to disclose commissions payable to the broker-dealer and
the Registered Representative and current quotations for the
securities. A broker-dealer is additionally required to send monthly
statements disclosing recent price information with respect to the
penny stock held in a customer's account and information with respect
to the limited market in penny stocks.
USE OF PROCEEDS
We will not receive any proceeds from the sale of securities
being offered by our selling shareholders.
We expect to incur expenses of approximately $47,500 in
connection with the registration of the shares.
DETERMINATION OF OFFERING PRICE
Prior to this offering, there has been no market for our common
stock. The offering price of the shares was arbitrarily determined and
bears no relationship to assets, book value, net worth, earnings,
actual results of operations, or any other established investment
criteria. Among the factors considered in determining the price were
our historical share sales prices the background and capital
contributions of management, the degree of control which the current
shareholders desired to retain, current conditions of the securities
markets and other information.
DIVIDEND POLICY
It is our present policy not to pay cash dividends and to retain
future earnings for use in the operations of the business and to fund
future growth. Any payment of cash dividends in the future will be
dependent upon the amount of funds legally available, our earnings,
financial condition, capital requirements and other factors that the
Board of Directors may think are relevant.
MANAGEMENT'S PLAN OF OPERATIONS
Results and Plan of Operations
- ---------------------------------
For the period from inception through December 31, 2003 no
revenue was generated. On May 15, 2003, we consummated an agreement
with Atlantic Security Limited, a United Kingdom corporation, pursuant
to which Atlantic Security Limited exchanged all of its then issued
and outstanding shares of common stock for approximately 80% of our
common stock. As a result of the agreement, the transaction was
treated for accounting purposes as a reorganization by the accounting
acquirer (Atlantic Security Limited) and as an recapitalization by the
accounting acquiror (Atlantic Security Limited.).
Our existing employees previously agreed to defer receipt of all
salaries until we raised a minimum of $100,000. Although we have now
raised such amount, members of our management have agreed to continue
deferring receipt of all or a portion of their salaries or converting
such amounts into shares of our common stock. Our principal executive
and administrative offices are located in space that is owned by our
Chief Executive Officer.
The COO has agreed to convert his salary into restricted shares
of our common stock at market share rate once the company has
completed been approved for quotation. The CEO has agreed to continue
to abstain from receiving a salary for the time being and is reviewing
with the board this status every thirty days. Neither officer has
signed an agreement regarding these issues.
Management believes that, though we have expressed substantial
doubt about our ability to continue as a going concern, due to our
minimal cash requirements and the cooperation of our employees in
deferring salary and advancing loans to the company to cover
operational expenses, assuming that we do not commence our anticipated
operations or receive the $500,000 from Citywide Management Services
we will be able to satisfy our cash requirements for at least the next
twelve months. We anticipate that as our new business develops, there
will be significant changes in the number of employees over the next
twelve months. As of April 1, 2004 we had $23,660 in cash on hand.
We have assumed that if we do not commence our anticipated operations
and that our officers continue to abstain from receiving a salary, we
will need approximately $1,000 per month to remain operational. Of
the anticipated $47,500 in expenses associated with this offering we
have already paid a total of $46,575.59.
Assuming we do not commence our anticipated operations, our currently
anticipated future cash requirements are for funding the preparation
and filing of quarterly reports with the Securities and Exchange
Commission. Based on our historical data this is around $2,300.00 per
quarter or for a full twelve month period $9,200.00. This figure is
included in the $1,000.00 per month figure to remain operational.
Two shareholders have advanced $2,444.00 on demand loans to Atlantic
Security Ltd before the share exchange with us. These loans were for
start up costs associated with setting up the company. Both
shareholders have expressed a desire not to redeem these within the
next twelve months. However, there are no contracts or agreements with
either of these shareholders . The repayment of these loans has not
been factored in the next twelve month cash requirements detailed
above.
Liquidity and Capital Resources
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Our current liabilities exceed our current assets and may
continue to do so in the future. Our business expansion will require
significant capital resources that may be funded through the issuance
of shares or notes payable or other debt arrangements that may affect
our debt structure.
To date, we have managed to keep our monthly cash requirements
low for two reasons. In the first instance, although we have now
raised in excess of $100,000, members of our management have agreed to
continue deferring receipt of all or a portion of their salaries or
converting such amounts into shares of our common stock. Secondly, we
have been able to keep our operating expenses to a minimum by
operating in space owned by our Chief Executive Officer and are only
paying the direct expenses associated with our business operations.
Given our low monthly cash flow requirement, management believes
that, even though we have expressed doubt about our ability to
continue as a going concern, and assuming that we do not commence our
anticipated operations it has sufficient financial resources to meet
its obligations for at least the next twelve months.
Please be aware that our independent auditor has expressed
substantial doubt about our ability to continue as a going concern and
believes that our ability to continue as such is dependent on our
ability to implement our business plan, raise capital and generate
revenues. We have executed a contract with Citywide Management
Services that provides that Citywide will invest $500,000 into the
company over approximately a five-month period commencing upon the
approval of our shares for quotation on the Over the Counter Bulletin
Board and the assignment of a trading symbol. Citywide will purchase
shares at a price equal to seventy percent (70%) of the average of the
closing bid price of our common stock for the ten days preceding the
closing for such purchase.
This company's board of directors and its predecessors has had no
connection nor are they in any way affiliated to Citywide Management,
its directors or any person working for Citywide Management.
Plan of Operations
- ------------------
Recent international terrorism events have created a major focus
on emerging technologies that support physical security assurance
opportunities. There are financial and social implications for
companies to provide a cost effective response to terrorism using
advanced technology.
Atlantic Security, Inc., along with Professor Gorbunov and Middlesex
University is developing both applications and technology that we
expect to be technically advanced for biological and molecular
detection. Because Professor Gorbunov's Molecular and
Biological detectors use the same base technology, calibration defines
the differentiating detection methodology between two different
substances.
Further, this technology can be made to specialize its detection on a
specific substance or set of substances. We feel that a device is
made to detect "super' viruses/bacteria in hospitals. This
application can define a viable product although there is no
guarantee that the device can be made to detect super
viruses/bacteria. We are looking to find a partner company for this
medical application who will to help in the development of the product
at their laboratory, for a fee and to distribute the finished product.
Biological and Molecular Detection Technology:
Through our pending relationship with Professor Gorbunov we have the
potential to develop aerosol-based detection of atmospheric elements
of biological and molecular elements used by terrorists. Examples of
biological elements are black plague, small pox, anthrax, castor bean
derivatives, opiates, etc.
Molecular detectors focus on explosive materials such as gunpowder,
nitroglycerin, plastique, fertilizer-based explosives, weapons and
other manufactured devices used by terrorists.
The technology is intended to be copyrighted and patent registered.
Professor Gorbunov and Mr. Smith will team to enter the research and
development marketplace. Targeted collaborative research and
development includes:
* United Kingdom and United States universities that collaborate
with UK and USA national and local government agencies interested
in anti-terrorism technology.
The collaboration marketing will focus on the formation of
research and development teams located in university facilities
including university and company team members. In exchange for
collaborative research on our proprietary technology, the
university will receive a license agreement to use the developed
technology for its own purpose and we will use the technology for
government and commercial market applications.
* Commercial applications for biological and molecular
detection technology include:
* Handheld detectors for police, airport security forces,
government security agencies, military personnel and an
inexpensive product suitable for private citizens.
* Use of the biological and molecular detection hardware/software
in collaboration with Heating, Ventilation and Air Conditioning
(HVAC) control manufacturers. The HVAC market has expressed
interest in an inexpensive detection technology that can be
integrated into the HVAC control system to close off building
interiors in the event of internal or external biological or
molecular threats. We will offer license agreements for use of
the biological and molecular detection technology in the HVAC
control system. Research and development contracts will be
offered to maintain and expand the use of the ASI technology.
Dr. Gorbunov will supervise any research and development employees
that we may employ in the future.
* Hospital medical staffs have expressed an interest in ensuring
that their patient wards are free of biological viruses and
bacteria referred to as Super Bugs (e.g.-flesh consuming
bacteria). A hand-held detection device useable by hospital
staff to "sweep" patient wards for Super Bugs prior to patient
occupancy will facilitate patient recovery and improve hospital
operational cost structures. If we develop this product it will
be internally prior to approaching the international health care
market. we believe that here is a large potential license
agreement market for this technology.
Satellite-based Tracking System:
Upon our payment of a license fee to Comnytell we will hold the
global rights to distribute their satellite-based tracking product
that is already in production. We will be able to pay this license
fee upon receipt of funds from Citywide Management Services.
Following successful sales of Comnytell's tracking product, we intend
to expand our relationship with them to include alternative product
manufacturing methods and sites. We intend to have this product
manufactured under license at a facility we have identified in China.
We have identified a manufacturing facility that would reduce the cost
of producing the tracking product to less than half its present
manufacturing cost and allow us to have a low-priced entry point in to
the market place. This price point can allow expansion of our
applications into existing markets due to the cost reduction offered
to current tracking and tracing product suppliers. Additionally, the
product can be adapted to work with cellular/wireless transmission
technology in addition to satellite transmission technology. The use
of cellular systems allows tracking and tracing services to be used
inside of buildings. One example of tracking services is for
retirement home residents who have ambulatory privileges. The
retirement home can maintain a location for each resident for purposes
of ensuring health care and physical security.
We do not presently have a signed agreement with the facility in China
to manufacture this product.
Some of these technologies already exist in the market and the only
distinguishing factor is cost and an outlet for the product. We
anticipate imploying a strategy focusing on a low cost product to
undercut other tracking products in the market. We will concentrate
on the British market which is more mature and active in this area.
We could be ready to deploy into the market place within the next 9
months, provided we successfully attract suitable investment and
trading partnerships.
One significant application for satellite-based tracking systems
is to enhance vehicle fleet management. Companies need to maintain an
accurate inventory of their vehicles for cost management and customer
service can be improved with management knowledge of the precise
location of each vehicle. Vehicle dispatching is improved and can be
managed more accurately with tracking devices that emit a tracing
signal used by the central management system.
The vehicle tracking market remains attractive to us. Over the
last year we have conducted discussions with British Telecomm and the
British Post office, who between them manage 140,000 vehicles. These
vehicles have no tracking devices because of the cost of deploying
tracking devices. We anticipate that reduced product manufacturing
costs will produce a product price to be used to engage their
business. There is no guarantee that they will re-open discussions.
We feel that the current market opportunities are:
* Biological detection systems (systems that are able to identify
biological substances in the air or on objects). The initial market
for these products would be HVAC systems. Collaborative development
is required as well as a license agreement with the HVAC control
system company(s).
* Molecular detection systems (systems that are able to identify
single molecules in the air or on objects). The market for these
products is border control areas like airports.
* Biological Medical detection systems (systems that are able to
identify biological substances in the air and on objects). The
market for these products is the detection of Super Bugs in
Hospitals.
* Asset tracking solutions (systems that are able to detect objects and
personnel using satellites and mobile cells). The initial market for
these products is in the detection and logistical management of
vehicles.
* The Smart Wireless Surveillance Solution products target a number of
markets:
* SWSS is both hardware and software technology owned by SA
Limited and is available to us upon the agreed transfer of the
technology from SA Limited to us. Discussions have progressed
to the point that this transfer seems predictable even though
it has not been completed. SWSS has had extensive market
exposure in United Kingdom and United States markets even
though it is not a completed or marketed product line.
Discussions have been held with national port authorities,
universities, police departments, city traffic control
departments, ocean shipping companies.
* Smart Wireless Surveillance Solutions are "Smart Camera"
control systems (camera systems that are computer aided to add
device intelligence and control in camera and digital
imagery.).
Solution components can include:
* Hardware/software elements mounted on most commercially
available CCTV cameras to allow pan/tilt/zoom control of the
camera.
* Storage of imagery at the camera and at the server
location.
* Wired or wireless communication of video imagery to the
control server.
* SA Limited proprietary computer operating system that
interfaces with most major software operating systems
(Microsoft, etc.).
* Wired or battery electrical supply to permit remote usage
of systems.
The market for these products is in the management of transportation
environments and people on the move.
* Examples of possible applications include:
* Inter-country border monitoring.
* Seaport monitoring.
* City monitoring.
* Company and educational campus monitoring.
* Video inspection of vehicles, aircraft and vessels.
* Video identification of known undesirables through
digital image matching.
* Aircraft on-board monitoring of passengers by sky
marshals and flight crews.
* TransportationTransportation terminal monitoring.
* Video surveillance of large gatherings of people.
BUSINESS
GENERAL AND COMPANY HISTORY
Atlantic Security, Inc. (previously named Warrensburg
Enterprises, Inc.) was incorporated in the state of Florida on
December 6, 1999. We were founded by Ms. Shelley Goldstein as a blank
check company with the contemplated purpose to engage in mergers and
acquisitions. Ms. Goldstein originally held approximately 90% of
our outstanding common stock. From inception through May 15, 2003 we
did not engage in any active trade or business. On May 15, 2003, we
consummated an agreement with Atlantic Security Limited, a United
Kingdom corporation, pursuant to which Atlantic Security Limited paid
$30,000 to Shelly Goldstein, who was then our majority shareholder and
exchanged all of its then issued and outstanding shares of common
stock for 15,922,000 shares of our common stock, representing
approximately 80% of our outstanding common stock. As of the date of
this prospectus we have not generated any revenues.
We are not involved with any development cost of any of the
products mentioned in this prospectus. To date we have only promoted
these products. Even these efforts have been stopped at this time so
that we may concentrate on fulfilling the conditions required for us
to raise funding pursuant to a financing agreement we've entered.
We wish to develop a method of detecting molecular and bio
substances by sniffing vaporized substances in the air and on contact.
The concept of being able to detect such substances was proven on
December 19, 2001 by Professor Boris Gorbunov at the Middlesex
University. Using laboratory equipment he successfully detected a
narcotic substance by sampling the air. The original equipment used
is no way a product or pre product and was only assembled to
demonstrate that vaporized ionized particles could be detected by
sampling the air. Present at this concept demonstration was Professor
Gorbunov, various university staff and Mr. Keith Hellawell QPM the
UK Anti-Drugs co-ordinator for the British Government, this was the
result of ten year's research work by Professor Gorbunov. Since this
time professor Gorbunov has been working to build a very early stage
unit (which we call alpha stage) which is a stand alone unit that can
be used to further improve the detection system. Professor Gorbunov
completed this in February 2003 and since then has been
working to a demonstrable model that can be taken out of the
laboratory and will still function.
We have a purchase option agreement for this technology, which
is exercisable until the end of May 2005. Under this agreement all
parties are bound to each other not to reveal to a third party the
technicalities of the work, in return Atlantic will use it best
endeavors to promote and raise funds to exploit the science for the
benefit of all concerned and Professor Gorbunov and the university
will not approach other interested parties. The agreement calls for us
to make an initial payment of approximately $3,149,000 and bonus and
milestone payments of approximately $4,724,000 to exercise our option.
In addition, the agreement calls for us to pay approximately
$3,149,000 in bonus payments for each of the first two sales of
products using the intellectual property. We intend to raise capital
for this by trying to get partners such as Air conditioning management
control system manufacturers to invest for exclusive licensee
agreements for various parts of the US. We do not presently have any
agreements for such licenses and have not exercised our purchase
option under the agreement.
We have also negotiated into an agreement with Comnytell
Developments Limited. Upon our payment of a one time license fee to
Comnytell of $40,000 we will hold the global rights to exploit their
Asset tracking system. European Telecomm Ltd also have a tracking
device which is far cheaper than Comnytell's product offering now but
lacks the features and is not as far advanced in the development cycle
but has potential to be as good. We have agreed to work with European
Telecomm to find customers who need a simple tracking device at a low
cost. We have not paid the license fee and no contract has been signed with
them as of the date of this prospectus.
We also are in the process of negotiating an agreement with SA
Limited to market and sell their smart camera system.
Our objective over the next 24 months is to develop these
technologies into products with the help of as yet unidentified
partners. Some of these technologies are already in the "pre-
production" stage such as the Asset tracking system and the smart
camera and could be ready to deploy into the market place within the
next 9 months, provided we can successfully attract suitable
investment and we can identify suitable partners. This or these
partners if found would be expected to buy licenses to allow them to
have access to this technology for them to exploit, they may wish to
be involved with the ongoing development, which would require separate
payments, these conditions have as yet not been agreed as to how they
would function. We have not as yet identified any partners. A
technology in the "pre-production" stage is one which has been
developed into a product but has not gone through the production
process of being made in large quantities.
Simultaneously we will look to acquire or license other
technology that compliments these technologies.
PROLIFERATION OF WEAPONS OF MASS DESTRUCTION
On November 14, 1994 President Clinton issued Executive Order
12938, which declared a national emergency to deal with the threat of
the potential use of nuclear, biological & chemical weapons by
terrorists groups or rogue states. The Executive Order stated that
these represented "an unusual & extraordinary threat to the national
security, foreign policy & economy of the United States". This
Executive Order has been renewed every year since inception.
The New Terrorism, Walter Laqueur p.63 [ISBN 1-84212-125-1]
"Colin Powell said in 1993: 'The one that frightens me to death,
perhaps even more so than tactical nuclear weapons, and the one we
have the least capability against, is biological weapons.'"
In a 1998 New York City simulated bio-terrorist attack nearly
all of the members of the emergency units dispatched to the scene
"died" because they were insufficiently protected despite "doing all
the right things" (reported Friday June 19, 1998 in the New York
Times by Judith Miller & William J Broad).
Various authorities have concluded that the early detection of
any such threats is a key element of bio-defense system. The current
Biological Integrated Detection System (BIDS) deployed by the US
Government takes at least 30-minutes to detect any such threats and is
limited to detecting only 4 viruses: anthrax, plague, botulinum toxin
& staphylococcus enterotoxin B. (reported February 22, 2000 by the
Federation of American Scientists)
The need for an accurate and non-invasive molecular 'sniffer'
- -------------------------------------------------------------
Kenneth Mead, Inspector General of the US Transportation
Department recently filed a report stating "[human] airport-security
screeners on several dozen occasions failed to catch guns & simulated
explosives pre- & post-9/11..." Further, "...screeners missed knives
70% of the time; guns 30% of the time; simulated explosives 60% of the
time; & other banned items got through 50% of the time." (reported
March 26, 2002 in Financial Times )
At the UN Conference in Monterrey in 2002 the issues of managing
the US-Mexico border arose yet again. The trade-off is clearly between
maintaining a porous border to facilitate trade between the 2 nations
(under NAFTA) & discouraging misuse / abuse of a porous border by
organized criminal gangs. Current surveillance & security technology
is not integratable & hence, unable to overcome the existing trade-off
between 100% surveillance & screening & subsequent detection of all
traffic with minimal impact of throughput (keeping the economic wheels
'well oiled').
We believe that there is a need for a highly flexible technology that
can be deployed and used by non technical personnel which can detect
these items.
Clearly the post "9/11" environment of 'high security awareness'
provides leading edge security technology vendors with a truly unique
commercial opportunity.
What is nanotechnology?
- -----------------------
Nanotechnology is an umbrella term that covers many areas of
research dealing with objects that are measured in nanometres. A
nanometre (nm) is a billionth of a meter, or a millionth of a
millimetre
The next few paragraphs provide a brief introduction to the core
concepts of molecular nanotechnology.
"Manufactured products are made from atoms. The properties of
those products depend on how those atoms are arranged. If we
rearrange the atoms in coal we can make diamond. If we rearrange
the atoms in sand (and add a few other trace elements) we can
make computer chips. If we rearrange the atoms in dirt, water and
air we can make potatoes". (April 29, 2002, Dr Ralph Merkle, the
Foresight institute)
Today's manufacturing methods are very crude at the molecular
level. Casting, grinding, milling and even lithography move atoms in
great thundering statistical herds. We believe it is analogous to a
child trying to build something using LEGO blocks with boxing gloves
on their hands. Yes, the child can push the LEGO blocks into great
heaps and pile them up, but he or she can't really snap them together
the way they would like. Nanotechnology will let us take off the
boxing gloves we will be able to not only move individual atoms around
but identify these atoms with great accuracy.
Nano-bio terrorism detection
- ----------------------------
* Nanotechnology that could detect 100% of current bio-terrorist
threats.
* When completed and built we will have a real-time, portable
detector with later version having wireless or Satellite
capability.
* these product would be easily added to existing technology and
will have the capability of being integrated into existing
security networks.
Nano- Molecular 'sniffer'
- -------------------------
* Nanotechnology much more sensitive than any 'sniffer dogs' and
second generation will improve on this.
* Detect entire range of threats including: smuggled weapons;
extensive types of explosives;
* nuclear & fissionable materials, including detonators; Drugs;
human & animal cargo; etc
* when completed it should be capable of detecting explosives under
certain conditions up to 100 meters (first generation).
Eventually both products will be merged into a single product only
differentiated by the software running.
Background for the need to detect micro-organisms (The so called super bugs)
- ----------------------------------------------------------------------------
The Nanotechnology used to detect Bio and Molecular will be
modified to isolate and detect specific biological molecules under
specific controlled conditions. This has never been commercially
done before and there is no guarantee that it will work. But if
successful we will be able to detect super bugs.
It is management's belief that in every hospital in the world
there lie undetected micro-organisms or "bugs" of which MRSA
(Methicillin Resistant Staphylococcus Aureus) is the most widely known
and the most dangerous at this time.
MRSA attacks without discrimination hitting the young, old and
the weak, it gets into the wounds of patients or infects them by skin
or oral infection. This bug can be brought into the hospital by
visitors, nurses, on clothing, on boxes etc, and it multiplies and
moves from ward to ward and patient to patient. If undetected before
an operation it can kill even the healthiest individual.
The British National Health service provides a good example
because it keeps records going back to the 1940s and its procedures
are similar to other health services around the world.
Open Wounds:
The current management of open wound infections in a clinical
setting comprises a clinical diagnosis of the infection, the taking of
a tissue specimen or wound swab (essentially wiping a cotton bud
across the wound and placing it in a transport medium), and placing
the patient on a broad cover of antibiotic medications. The swab is
then sent to the laboratory and cultured for 2-5 days before the
results can be obtained (5 days is nearer the detection time of
M.R.S.A 'super bug'), the antibiotics may need to be changed depending
on the swab results.
In the current climate one of the major health problems is
resistant bacteria, M.R.S.A being one, but other more serious strains
are around the corner. M.R.S.A can shutdown wards and even hospitals
and can delay the transfer of patients between wards and hospitals, as
swab screening can take 5 days. This means patients are kept in
isolation or the referring hospital until the process is completed.
The scale of the problem:
Chronic wounds are a major drain on resources, and here is just
one example; around 1% of the population will suffer from leg ulcers
that become recurrently infected. According to the British National
Health service, this generates around 1-4 million operations per year
with a potential wound infection rate of 1%, MRSA and other antibiotic
resistant bacteria are on the rise and these figure which already cost
tens of millions of pounds will rise as well as causing an increasing
demand on nurses and beds.
Problems with current systems
* diagnosis takes too long
* the swab result often is not available within 48 hours
* taking of swab is operator dependent
* swabs are often contaminated rending them useless
* giving "best given antibiotic" is not accurate
* over use of antibiotics is the main cause of M.R.S.A
If we are successful in raising the funds to develop this, then we
believe that there is a large marketplace for such a product.
At present MRSA and the "super bugs" cost the British National
Health service hundreds of millions of pounds per year in addition to
the suffering and deaths of patients. Our intention is to try and
raise funds and find a partner who specializes in supplying high tech
products to the NHS and is willing to work with us on developing and
implementing such a product. We have not yet identified a partner
although we have interchanged ideas with a number of medical companies
but none have signed any contracts. To save development time we would
utilize the existing Nanotechnology that is been designed to combat
terrorist germ warfare in detecting the super bugs. We believe that
by doing so we could detect the superbugs in minutes or hours as
opposed to the current process which takes days.. This would reduce
costs and free up funds for other areas of medication. No research by
Professor Gorbunov on this has been undertaken except to build a
theoretical mathematical model to test the feasibility of such an
undertaking. The company and Dr. Gorbunov believe that the results
were promising. Some of the benefits of such a technology would be:
For the Patient:
* more appropriate treatment
* less pain and suffering
* less time off work
* less time in hospitals
For Hospitals:
* reduced or better use of staff in microbiology laboratories
* reduced bed occupancy
* less medical costs
* savings in antibiotics
* less nursing time needed
* rapid screening
* managed use of theaters
For Doctors:
* targeted treatments
* rapid diagnosis
* less time searching for results
For Countries:
* reduced antibiotic usage (most governments are campaigning to
reduce the use)
* less antibiotic resistant bacteria
* reduce the countries medical resources, freeing them up to do
other work
Intelligent Tracking solution
We have negotiated an agreement to license the technology from
Comnytell Developments Limited. Although an agreement has been
drafted, it has not as yet been signed because executing it would
require that we pay a license fee of $40,000. We decided that our
currently limited funds should be allocated towards fulfilling the
requirements necessary to receive the $500,000 funding from Citywide.
By doing so we have assumed the risk that when we go back to execute
the contract that Comnytell may wish to renegotiate the contract and
fee.
Knowing the location of people and objects like trucks, tanks,
cars, bio and molecular detectors can be very important and knowing if
they move without your authority is also very important. And this
device can operate independently or be integrated into our existing
products. We have given this product the name SatraX and this name has
been agreed with by Comnytell.
The following is a description as to how the product already in
production and use by Comnytell functions and the facilities it can
bring the market place.
SatraX tracking and communication software integrates with
current IT (information technology) environments, and can be made to
be secure and reliable it is ready for use by the Defense Forces,
police forces, for VIP tracking, security transport services, railways
and the transportation sector. The method that is currently being
looked at to secure the data stream is SSL the security system used on
the internet to secure credit card transactions
This unit will be based upon the use of GSM, GPS and GPRS (all as
defined below) to locate people, sniffer locations and vehicles. Using
these combined techniques gives a far more accurate location than just
the use of GPS or Cellemetry. It also allows the finding of locations
in side structures, under buildings, underpasses as well as outside
locations.
* GSM Global Systems for Mobile communication. When first used it
originally stood for Groupe Special Mobile this was the term used
when it was introduced by CEPT committee. Conforence of European
Post and Telecommunications.
* GPS Global Positioning System
* GPRS General Packet Radio Service
Surveillance solution
We have agreed in principle to purchase this technology and
intellectual property rights from SA Ltd once the company is trading
on NASD and has a symbol. In the mean time we have agreed with them
that we can promote their product. If we achieved sufficient sales of
the product to buy the rights then we would purchase before the
company started trading. To date we have not achieved any sales of
their product.
The device has been built and tested but has not been produced in
volume numbers. It is in what we call Beta production, all the parts
are as they would appear if this device was put through a production
run.
Imagine being able to turn a dumb camera into a smart camera,
which knows what it is looking at and can tell other cameras in its
network around the world what it sees and the data associated with it.
What one camera knows all the cameras in the network know and if one
camera goes offline the next and nearest takes over the angle spread
until the camera is on line again.
Think of the opportunities if the camera can pass sound video and
data to passing law enforcement officers as well as send the
information back to a central control center. Imagine it doing this
without being asked. To do this you need to have a computer system
with the same power as a lap or desk-top computer. As it is not
practical to have a lap or desk-top computer attached to a CCTV camera
so to achieve this SA Ltd and Intel have built a computer system as
powerful as a desk top but the size of approximately a packet of
cigarettes. SA owns the intellectual property rights for this
technology.
* Unique real-time data compression & camera network remote-control
capabilities
* Can be made to incorporate proven event management & decision
support software
* Schematically designed to be fully scalable on fault tolerant
secure servers
The prototype of this smart camera computer system was demonstrated to
a number of organizations in both Europe and North America; these
included some spook/dark operation organizations which are not listed
below: Spook/dark operations are government organizations
that wish not to be identified to the general public as existing. The
equipment we demonstrated were crude basic modules to prove the idea
worked. These modules could not in any sense of the word be called a
product; they consisted of an external laptop running the software and
a server running the hardware control.
* Jacksonville ports authority Jan 2002 in the US
* Homelands security commission (Joe Strange ) in the US Jan 2002
* UK Civil Aviation Authority May 2002 in the UK
* British Airways May 2002 in the UK
* Virgin Airways May 2002 in the UK
* British Midland Airlines May 2002 in the UK
* Kroll inc in the US Jan 2002 in the US
The demonstration given was to show that a standard CCTV camera could
be made to store information and transmit this information to another
camera, to a hand held device to simulate a officer on the beat, and
to a central control center at the same time. It also demonstrated
that the camera could be made remotely to zoom, pan and tilt by the
hand held device as well as the central control center. We did not
sign any contracts or agreements with any of the attendees, We have
gone back to all the attendees requesting a new set of demonstrations
with the latest version of this device, and have explained that we are
in the process of trying to raise funds in order to begin production
of the product. All have asked to be kept updated as to our situation
before they agree to the demonstrations, this is because these
organizations require that we have sufficient funding before they
would enter into any discussion, and we do not currently have such
funding.
We are not involved with any development cost for this or any of
the products mentioned in this prospectus. To date we have only
promoted these products. Even these efforts have been stopped to
concentrate on fulfilling the conditions required for us to receive
funding from Citywide.
PRODUCT DEVELOPMENT
We intend to create an organization that values and explores new
ideas and looks for product ideas in unconventional settings. We
intend to refine these ideas and work with outside firms to create
prototypes, masters and the necessary tooling. As of the date of this
prospectus we have not entered into any definitive discussions,
negotiations, contracts or other arrangements with any third party.
We intend to develop technologies and products either from
internally generated ideas or, by acquiring or licensing patented technology
from outside inventors. During the evaluation phase of product development,
we will evaluate the viability of the product and whether the product can be
developed and manufactured in acceptable quantities and at an
acceptable cost, and whether it can be sold at a price that satisfies
our profitability goals.
Once we determine that a product may satisfy our criteria, we
will further assess its potential by continuing to research the
product and its probable market. If the results are positive and we
do not own the product, we will then attempt to acquire the product
outright or obtain rights to the product through a licensing
arrangement. If we develop the product internally, or if we acquire or
license the rights to the product, we will then proceed to develop and
test market the product.
The company has spent none of its own money on research and
development but a lot in the way of time and effort on research and
development. All of the research and development done on the Bio and
Molecular devices have been carried out by Middlesex University. The
University received a grant from the European Union of 6 million Euros
to carry out this work in 1999. We have been involved in focusing the
developers on the market needs as we see them and making sure that
feed back from organizations that we have spoken to are reflected in
the work carried out. Over the last two years we have tried to make
sure the development reflected the changes in the market as we see
them. All other research and development has been conducted by the
owners of the products we wish to sell and market. We have acted as
unpaid consultants to these companies regarding the needs we see in
the hope that these will be incorporated in the different versions of
the product.
PATENTS AND TRADEMARKS
Where appropriate, we will seek patent or trademark protection
for the products or technologies we develop or introduce. However,
there can be no assurance that patents or trademarks will issue from
any of our future applications. As of the date of this prospectus, we
have not filed for any trademarks or patents and do not own any
trademarks or patents.
SUPPLIERS/PARTNERS
We intend to bring our products to market by entering into
license agreements or joint development ventures. We anticipate that
at least some of our future products will be manufactured in either,
the United States, Europe or Asia. We have already identified several
entities that are potential partners for license agreements or joint
development ventures that we will be able to approach regarding
manufacturing our future products. We have only approached one
companies regarding development of our future products and we have not
entered in to any agreements with this company..
MARKETING
We intend to market our products by license agreements or joint
marketing partners.
COMPETITION
The markets in which we plan to do business will be highly
competitive, and are already served by two well-established and well-
financed companies, Lockheed Martin which already supplies Biological
detection products to the US market and Smiths Industries which
already supplies Biological detection products to the UK and Europe .
These competitors have significantly greater financial and marketing
resources than we have. This will give them and their products an
advantage in the marketplace.
We believe that the future principal factors affecting the
market place are product innovation and accuracy.
LEGAL PROCEEDINGS
We are not party to any legal proceedings as of the date of this
prospectus.
EMPLOYEES
As of the date of this prospectus we have three employees. Of
these employees, two serve in management positions as full time
employees and one serves in administration on a part time basis.
DESCRIPTION OF PROPERTY
Our principal office facility is presently located in space owned
by our President. We are not presently incurring any rent expenses
associated with this space. Our President has orally agreed to supply
this space until we receive funding sufficient to support rent of
other space. We anticipate relocating to other office space within 60
days of receipt of funding. If we require additional time to locate
offices our president will continue to supply this space until such
time arises that we can find office space at the low cost.
At the premises owned by the president, he has allocated for us
office space that comprises 200 square feet of space with two computer
systems, two printers, high speed Internet access, two fax machines,
two telephones lines, power, lighting etc. If need be the President
would supply space for as long as the company needs it to achieve its
objectives.
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND/FINANCIAL DISCLOSURE.
We have had no disagreements with our accountants on accounting
and financial disclosure.
MANAGEMENT
Directors and Executive Officers
Our directors and executive officers are:
- -----------------------------------------
Name Age Position Director Since
- -----------------------------------------------------------------------------
Terence Sullivan 54 President, principal 2003
executive officer
and Chairman
James Christopher Holmes 56 Director 2003
Henry Howard Smith 62 Chief Operating Officer 2003
and Director
Gregory Chan 48 Acting Principal
Financial Officer
Terence Sullivan has served as our President, principal executive
officer and Chairman since June 2003. Mr. Sullivan has approximately
twenty-seven years of experience in the management and growth of
companies with a focus on telecommunications and security. From
September 2002 through June 2003 he served as the CEO of Atlantic
Security Limited, which consummated a share exchange with us on May
15, 2003. After retiring from December 2000 through May 2001, Mr.
Sullivan joined Open-Mobile Ltd, a mobile phone application and design
company. From May 2001 until August 2001 as its CEO. From December
1999 until December 2000, he was employed by CyberSafe, Inc., which
sold security software to Deutsch Bank UBS/WDR, CS and
Daimler/Chrysler. He retired from CyberSafe as the Chairman of its
European Division. From December 1998 until December 1999 he ran his
own corporation, Wits Ltd, which was a sales and marketing support
company selling security software.
James Christopher Holmes has served as a director since the take over
May 15 2003. Mr. Holmes has 35 years of experience in the area of
(Information Technology). From 2002-present day Chris started his own
company and is adviser and consultant to the UK
organization for local government, and individual local
government organizations. Here he advises on the use of
technology in delivering services to the community and government. The
organizations that take his advice include civil defense, law
enforcement and social services. 1999-2002 Chris was Deputy Director
of IT for the British Government Cabinet Office where he advised the
Prime minister and ministers on the use of technology in government
and government departments. These department included ministry of
defence looking after defence of the realm and (GCHQ) Government Cipher Head
Quarters of the UK, the UK and US listening and counter intelligence
organization where he oversaw procurement.
Chris retired from this position mid 2002. 1974 to 1999 Chris has
spent over twenty-five years working in British Telecomm Plc. He
started as a manager and the last five years he was head of
Procurement at British Telecommunications and looked after a budget of
over 2.5 billion pounds. Chris Holmes is an experienced government consultant
who has worked for several Central government departments, agencies, local
authorities and the IT services industry.
His management experience inside BT over the twenty five-Years
includes:
* Building Sales, Service and Marketing initiatives across the four
BT Regions
* UK, Europe, Americas, Asia. Marketing of Visual Services,
Messaging, EDI, Network Management Services
* Broadband and networked Groupware services to BTs Global
Customers.
* Managed the Marketing R&D Budgets.
* Represented Global Customers interests in the management of BTs
Intellectual Property Rights and managed the global portfolio of
trademarks and names.
* Marketing input to the development of electronic trading
interfaces with BTs customers.
Established the BT Network and Systems Architecture and is a Member of
the Society of Manufacturing Engineers (US).
Henry Howard Smith has served as our Chief Operating Officer since
October 2003. Mr. Smith has over 35 years of experience in
information technology. From June 2001 through October 2003 he served
as President of HMS, LLC, a business and technology consulting entity
at which he developed consulting engagements designed to increase
product value, solve productivity issues and assess merger and
acquisition candidates. Between February 2001 and May 2001 he served
as the Vice President of Marketing and Business Development for Flag
Telecom Holdings, Ltd., a global fiber optic cable company that
constructs broadband services for telecommunications carriers and
business enterprises. Between June 1993 and October 2000 he served
British Telecommunications PLC as a Vice President and General Manager
- - Global Outsourcing Solutions. While at British Telecommunications,
his responsibility was to plan and implement a company to outsource
the information technology infrastructure of multinational
corporations.
Gregory Chan, although not one of our employees, has served as our
acting Chief Financial Officer since May 2003. Mr. Chan brings
with him 20 years experience in diverse managerial roles in multi-
national corporations in the telecom and IT industry. He is
currently employed with MCI WorldCom EMEA where he has been
serving as a Global Account Manager since April 2001. From October
2000 through January 2001 he served in Cidera, Inc., a media content
distribution network provider, as the Vice President of International
Commercial Operations. From January 2000 through October 2000 he
served as the Director of International Business Development for
Teligent Inc. a wireless local access network provider. From July
1999 through January 2000 he was the CEO of Europe for Compose System
Limited, a printing systems developer. For approximately ten years
prior to that he was with Cable & Wireless PLC in various managerial
positions including Senior Manager, Business Development, Manager
Mergers & Acquisitions and Manager Corporate Management Accounting,
Mr. Chan is a qualified Chartered Accountant and he holds a B.Sc.
degree in Business Economics
Directors' Remuneration
Our directors are presently not compensated for serving on the
board of directors.
Executive Compensation
Employment Agreements
We have entered into an executive service agreement with Terence
Sullivan, our Chairman, President and CEO on October 1, 2003 and which
expires on Mr. Sullivan's 75th birthday on April 8, 2024 or with six
months notice by the Company unless there is a change in control,
which requires the Company to provide one-year notice. The agreement
provides that Mr. Sullivan will receive a salary of 150,000 pounds per
year as well as a car allowance equal to 12% of his salary. The
agreement also calls for a bonus of 10% of our net income if we reach
certain sales targets and provides for Mr. Sullivan at his option to
receive a portion of his compensation in the form of shares of our
common stock at a 30% discount.
We have entered into an employment agreement with Henry Howard
Smith to become the COO and President of the North American Division
effective October 6, 2003 at an annual salary of $100,000. The
agreement expires on Mr. Smith's 70th birthday, on September 21, 2011
or with thirty days notice by either party.
Summary Compensation Table
The following table sets forth the total compensation paid to or
accrued for the period from September 6, 2002 (Inception) through
March 31, 2003 to our President.
Annual Compensation
Annual Compensation
Other Restricted Securities All
Name and Annual Stock Underlying LTIP Other
Principal Position Year Salary Bonus Compensation Awards Options Payouts Compensation
- ------------------ ---- ------ ----- ------------ ---------- ---------- ------- ------------
Terence Sullivan,
President 2003 $0 0 0 0 0 0 0
Stock Option Grants in the past fiscal year
We have not issued any grants of stock options in the past fiscal year.
PRINCIPAL SHAREHOLDERS
The following table sets forth information regarding beneficial
ownership of our common stock as of the date of this prospectus and as
adjusted to reflect the sale of all shares which may potentially be
sold in connection with this registration statement, by (i) those
shareholders known to be the beneficial owners of more than five
percent of the voting power of our outstanding capital stock, (ii)
each director, and (iii) all executive officers and directors as a
group:
Number of Percent Number of
Shares Owned Owned Shares Owned Percent
Name and Address of Before Before After After
Beneficial Owner(1) Offering Offering Offering Offering (2)
- -------------------- ------------- ----------- ----------- ------------
Terence Sullivan 9,600,000 41.63% 7,200,000 31.23%
Chris Holmes 400,000 1.73% 300,000 1.30%
Howard Smith 400,000 1.73% 300,000 1.30%
Gregory Chan 12,000 * 9,000 *
Teddy Plaisted Elett, Trustee 1,600,000 6.94% 1,200,000 5.20%
U/A dated August 7, 1992
FBO Teddy Plaisted Elett (3)
PO Box 771240
Naples, FL 34107
E-N Corp(4) 1,400,000 6.07% 1,150,000 4.99%
PO Box 146
Stevenage Herts
SG1 1FT
United Kingdom
All Directors and Officers as
a Group (4 persons) 10,412,000 45.16% 7,809,000 33.87%
- ----------------------------
* Indicates less than 1%
(1) Unless otherwise indicated, the
address of the beneficial owner should be considered the same as
the company's principal business address.
(2) Assumes the sale of all shares
offered hereunder by the selling shareholders.
(3) The Trust is controlled by Teddy
Plaisted Elett, an accredited investor, who has deposited the
acquired shares into such Trust.
(4) The controlling shareholder of E-N
Corp. is Ranjit Sodhi.
SELLING SHAREHOLDERS
The following table sets forth certain information with respect to the
ownership of our common stock by selling shareholders as of April 16, 2004.
Unless otherwise indicated, none of the selling shareholders has or had a
position, office or other material relationship with us within the past three
years.
Ownership of Ownership of
Common Stock Number of Common Stock
Prior to Offering Shares offered After Offering
Selling Shareholder Shares Percent Hereby Shares (1) Percent(1)
- ------------------------------------------------------------------------------------------------------------
Terence Sullivan(2) 9,600,000 41.63% 2,400,000 7,200,000 31.23%
Teddy Plaisted Elett, Trustee 1,600,000 6.94% 400,000 1,200,000 5.20%
E-N Corp(3) 1,400,000 6.07% 350,000 1,150,000 4.99%
William Duncan Swartz 1,000,000 4.34% 250,000 750,000 3.25%
George Beyts 945,000 4.09% 236,250 708,750 3.07%
Niall Duggan 945,000 4.09% 236,250 708,750 3.07%
Peter Goldstein 945,000 4.09% 236,250 708,750 3.07%
Mark Palestine 945,000 4.09% 236,250 708,750 3.07%
Oliver Cassell 400,000 1.73% 100,000 300,000 1.30%
Alan Coe 400,000 1.73% 100,000 300,000 1.30%
Dravrar 400,000 1.73% 100,000 300,000 1.30%
Judy Fishman and
Michael Fishman JTTEN 400,000 1.73% 100,000 300,000 1.30%
Alan Gibson 400,000 1.73% 100,000 300,000 1.30%
James Christopher Holmes(4) 400,000 1.73% 100,000 300,000 1.30%
Daniela Lapuste 400,000 1.73% 100,000 300,000 1.30%
Kwan Lam Ng 400,000 1.73% 100,000 300,000 1.30%
Howard Smith (5) 400,000 1.73% 100,000 300,000 1.30%
Thomas Harrison 340,000 1.47% 85,000 255,000 1.11%
Watson Dave International 300,000 1.30% 75,000 225,000 *
Thomas Gryzmala 60,000 * 15,000 45,000 *
Jeffrey Klein 60,000 * 15,000 45,000 *
Greg Chan (6) 12,000 * 3,000 9,000 *
Ulfat Kiani 8,000 * 2,000 6,000 *
Bob Anderson 4,000 * 1,000 3,000 *
Pamela Anderson 4,000 * 1,000 3,000 *
Jacky Barker 4,000 * 1,000 3,000 *
Kevin Barker 4,000 * 1,000 3,000 *
Erika Bleiberg 4,000 * 1,000 3,000 *
Dan Caggiani 4,000 * 1,000 3,000 *
Brian Callanan 4,000 * 1,000 3,000 *
Lenny Cerbini 4,000 * 1,000 3,000 *
George Chaliss 4,000 * 1,000 3,000 *
Margaret Chan(7) 4,000 * 1,000 3,000 *
Lisa Cohen 4,000 * 1,000 3,000 *
Elizabeth Cooper 4,000 * 1,000 3,000 *
Dorothy Cornwell 4,000 * 1,000 3,000 *
John H. Cornwell Jr. 4,000 * 1,000 3,000 *
John H. Cornwell III 4,000 * 1,000 3,000 *
Sarah Cornwell 4,000 * 1,000 3,000 *
Stephen Echols 4,000 * 1,000 3,000 *
Jon Evans 4,000 * 1,000 3,000 *
Robert Field 4,000 * 1,000 3,000 *
Francis Giles 4,000 * 1,000 3,000 *
Alvin Goldstein 4,000 * 1,000 3,000 *
Inge Goldstein 4,000 * 1,000 3,000 *
Robert Gordon 4,000 * 1,000 3,000 *
Kenneth Greenberg 4,000 * 1,000 3,000 *
Charlotte Guiberson 4,000 * 1,000 3,000 *
Yanna Hache 4,000 * 1,000 3,000 *
Daniel Kallan 4,000 * 1,000 3,000 *
Josh Kallan 4,000 * 1,000 3,000 *
Dr. Michael Kaufman 4,000 * 1,000 3,000 *
Glenda Kelley 4,000 * 1,000 3,000 *
Sean King 4,000 * 1,000 3,000 *
Alex Lichtman 4,000 * 1,000 3,000 *
Debbie Lieberman 4,000 * 1,000 3,000 *
Mo Lan Lo 4,000 * 1,000 3,000 *
Ian Macpherson 4,000 * 1,000 3,000 *
Sarah Macpherson 4,000 * 1,000 3,000 *
Scott Mallet 4,000 * 1,000 3,000 *
James Charles Meghrian 4,000 * 1,000 3,000 *
Amelia Miller 4,000 * 1,000 3,000 *
Harris Millman 4,000 * 1,000 3,000 *
Baldeep Namas 4,000 * 1,000 3,000 *
Mandeep Namas 4,000 * 1,000 3,000 *
Perminder Namas 4,000 * 1,000 3,000 *
Ravi Namas 4,000 * 1,000 3,000 *
Chau Lam Ng 4,000 * 1,000 3,000 *
Lam Fai Ng 4,000 * 1,000 3,000 *
Oi Ling Lee Ng 4,000 * 1,000 3,000 *
Sau Chun Ng 4,000 * 1,000 3,000 *
William Porter 4,000 * 1,000 3,000 *
Nancy Reynolds 4,000 * 1,000 3,000 *
Scott Rhodes 4,000 * 1,000 3,000 *
Adam Ryan 4,000 * 1,000 3,000 *
Shirley Ryan 4,000 * 1,000 3,000 *
Gurpreet Sahota 4,000 * 1,000 3,000 *
Rani K. Sahota 4,000 * 1,000 3,000 *
Surinder Sahota 4,000 * 1,000 3,000 *
Martha Schiff 4,000 * 1,000 3,000 *
Charles Simmons 4,000 * 1,000 3,000 *
Charles E. Simmons 4,000 * 1,000 3,000 *
Tom Sit 4,000 * 1,000 3,000 *
Hardev Kaur Sodhi 4,000 * 1,000 3,000 *
Helen Sodhi 4,000 * 1,000 3,000 *
Rajvir Singh Sodhi 4,000 * 1,000 3,000 *
Ranjit Sodhi 4,000 * 1,000 3,000 *
Katie Somers 4,000 * 1,000 3,000 *
Gary Spielfogel 4,000 * 1,000 3,000 *
Roberto Suarez 4,000 * 1,000 3,000 *
Mark Sullivan(8) 4,000 * 1,000 3,000 *
Hon Wae Wong 4,000 * 1,000 3,000 *
Pui Chun wong 4,000 * 1,000 3,000 *
Allison Woodford 4,000 * 1,000 3,000 *
Kong Yau 4,000 * 1,000 3,000 *
Teresa Yau 4,000 * 1,000 3,000 *
Tung Mei Yau 4,000 * 1,000 3,000 *
Janet Ann Sulivan(9) 1,200 * 300 900 *
Sarah Janet Holmes(10) 800 * 200 600 *
TOTAL 22,058,000 100% 5,514,500 16,543,500
* Indicates less than 1%
1) Assumes that all shares are sold pursuant to this offering and that
no other shares of common stock are acquired or disposed of by the
selling shareholders prior to the termination of this offering.
Because the selling shareholders may sell all, some or none of their
shares or may acquire or dispose of other shares of common stock, no
reliable estimate can be made of the aggregate number of shares that
will be sold pursuant to this offering or the number or percentage
of shares of common stock that each shareholder will own upon
completion of this offering.
2) Mr. Sullivan is our President, principal executive officer and
Chairman.
3) Mr. Holmes is a director.
4) Mr. Ranjit Sodhi owns 4000 shares in his name and no other shares
held in the name of any other shareholder are in any way attributed
to him.
5) Mr. Smith is our Chief Operating Officer and a director.
6) Mr. Chan is our acting Principal Financial Officer.
7) Ms. Chan is the sister of Mr. Greg Chan, our acting Principal
Financial Officer.
8) Mr. Sullivan is the son of Mr. Terence Sullivan, our President,
principal executive officer and Chairman.
9) Mrs. Sullivan is the wife of Terence Sullivan, our President,
principal executive officer and Chairman.
10) Ms. Holmes is the wife of Mr. James Christopher Holmes, a
director.
DESCRIPTION OF SECURITIES
General
Our authorized capital stock consists of 100,000,000 shares of
common stock, par value $0.001 per share, and 10,000,000 shares of
preferred stock, par value $.001 per share. In December 2003 we
consummated a 4 for 1 stock split. As of the date of this prospectus,
23,058,000 shares of common stock and no shares of preferred stock
were outstanding. Corporate Stock Transfer of Denver, Colorado serves
as our transfer agent.
Common Stock
We are authorized to issue 100,000,000 shares of our common
stock, $0.001 par value, of which 23,058,000 shares are issued and
outstanding as of the date of this prospectus. Except as provided by
law or our certificate of incorporation with respect to voting by
class or series, holders of common stock are entitled to one vote on
each matter submitted to a vote at a meeting of shareholders and the
shareholders do not have cumulative voting rights.
Subject to any prior rights to receive dividends to which the
holders of shares of any series of the preferred stock may be
entitled, the holders of shares of common stock will be entitled to
receive dividends, if and when declared payable from time to time by
the board of directors, from funds legally available for payment of
dividends. Upon our liquidation or dissolution, holders of shares of
common stock will be entitled to share proportionally in all assets
available for distribution to such holders. None of our common stock
holders have any preemptive rights.
Preferred Stock
The board of directors has the authority, without further action
by our shareholders, to issue up to 10,000,000 shares of preferred
stock, par value $.001 per share, in one or more series and to fix the
rights, preferences, privileges and restrictions thereof, including
dividend rights, conversion rights, voting rights, terms of
redemption, liquidation preferences and the number of shares
constituting any series or the designation of such series. No shares
of preferred stock are currently issued and outstanding. The issuance
of preferred stock could adversely affect the voting power of holders
of common stock and could have the effect of delaying, deferring or
preventing a change of our control.
Market for Common Equity and Related Stockholder Matters
There is no established public market for our common stock and we
have arbitrarily determined the offering price. Although we hope to
be quoted on the OTC Bulletin Board, our common stock is not currently
listed or quoted on any quotation service. There can be no assurance
that our common stock will ever be quoted on any quotation service or
that any market for our stock will ever develop or, if developed, will
be sustained.
As of February 24, 2004, there were 98 shareholders of record of
our common stock and a total of 23,058,000 shares outstanding. Of the
23,058,000 shares of common stock outstanding, 13,412,000 shares of
common stock are beneficially held by "affiliates" of the company.
All shares of common stock registered pursuant to this Registration
Statement will be freely transferable without restriction or
registration under the Securities Act, except to the extent purchased
or owned by our "affiliates" as defined for purposes of the Securities
Act.
There are currently no outstanding options or warrants to
purchase or any securities that are convertible into our common stock.
Under certain circumstances, restricted shares may be sold
without registration, pursuant to the provisions of rule 144. In
general, under rule 144, a person (or persons whose shares are
aggregated) who has satisfied a one-year holding period may, under
certain circumstances, sell within any three-month period a number of
restricted securities which does not exceed the greater of one percent
of the shares outstanding or the average weekly trading volume during
the four calendar weeks preceding the notice of sale required by rule
144. In addition, rule 144 permits, under certain circumstances, the
sale of restricted securities without any quantity limitations by a
person who is not an affiliate of ours and has satisfied a two-year
holding period. Any sales of shares by shareholders pursuant to rule
144 may have a depressive effect on the price of our common stock.
There are 17,488,500 shares of our common stock that are not being
offered by this registration statement that could in the future be
sold pursuant to rule 144.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
None.
DISCLOSURE OF SEC POSITION
ON INDEMNIFICATION FOR SECURITIES ACT LIABILITIES
Our Articles of Incorporation, as well as our By-Laws provide for
the indemnification of directors, officers, employees and agents of the
corporation to the fullest extent provided by the Corporate Law of the
State of Florida, as well as is described in the Articles of
Incorporation and the By-Laws. These sections generally provide that
the Company may indemnify any person who was or is a party to any
threatened, pending or completed action, suit or proceeding whether
civil, criminal, administrative or investigative except for an action by
or in right of the corporation by reason of the fact that he or she is
or was a director, officer, employee or agent of the corporation.
Generally, no indemnification may be made where the person has been
determined to be negligent or guilty of misconduct in the performance of
his or her duties to the Company.
Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to our directors, officers or
controlling persons, pursuant to the foregoing provisions, 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.
PLAN OF DISTRIBUTION
Our selling shareholders will sell their shares at a price per
share of $0.25 per share until and if our shares are quoted on the
Over The Counter Bulletin Board and thereafter at prevailing market
prices or in privately negotiated transactions. The selling
shareholders may sell or distribute their common stock from time to
time themselves, or by donees or transferees of, or other successors
in interests to, the selling shareholders, directly to one or more
purchasers or through brokers, dealers or underwriters who may act
solely as agents or may acquire such common stock 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. These sales by Selling Shareholders may
occur contemporaneously with sales by us. The selling shareholders
offering will terminate on the earlier of the sale of all of the
shares or 360 days after the date of the prospectus. The sale of the
common stock offered by the selling shareholders through this
prospectus may be affected in one or more of the following:
* Ordinary brokers' transactions;
* Transactions involving cross or block trades or otherwise
* Purchases by brokers, dealers or underwriters as principal and
resale by such purchasers for their own accounts pursuant to this
prospectus;
* "at the market" to or through market makers or into any market for
the common stock which may develop;
* in other ways not involving market makers or established trading
markets, including direct sales to purchasers or sales effected
through agents;
* in privately negotiated transactions; or
* any combination of the foregoing.
Brokers, dealers, underwriters or agents participating in the
distribution of the shares as agents may receive compensation in the
form of commissions, discounts or concessions from the selling
shareholders and/or purchasers of the common stock for whom such
broker-dealers may act as agent, or to whom they may sell as
principal, or both. The compensation paid to a particular
broker-dealer may be less than or in excess of customary commissions.
Neither we nor any selling shareholder can presently estimate the
amount of compensation that any agent will receive. We know of no
existing arrangements between any selling shareholder, any other
shareholder, broker, dealer, underwriter or agent relating to the sale
or distribution of the shares.
In the event that the selling shareholders enter into an
agreement, after the date of this prospectus, with any broker dealer
or underwriter for such broker, dealer or underwriter to act as
principal and such entity is acting as an underwriter, we will file a
post-effective amendment to this prospectus identifying such entity,
providing the required information in this plan of distribution and
revising the disclosures in this prospectus and the related
registration statement. Additionally, in such event we will file any
such agreement as an exhibit to the registration statement.
We will pay all of the expenses incident to the registration,
offering and sale of the shares to the public, but will not pay
commissions and discounts, if any, of underwriters, broker-dealers or
agents, or counsel fees or other expenses of the selling shareholders.
We have advised the selling shareholders that while they are
engaged in a distribution of the shares included in this prospectus
they are required to comply with Regulation M promulgated under the
Securities Exchange Act of 1934, as amended. With certain exceptions,
Regulation M precludes the selling shareholders, any affiliated
purchasers, and any broker-dealer or other person who participates in
such distribution from bidding for or purchasing, or attempting to
induce any person to bid for or purchase any security which is the
subject of the distribution until the entire distribution is complete.
Regulation M also prohibits any bids or purchases make in order to
stabilize the price of a security in connection with the distribution
of that security. All of the foregoing may affect the marketability
of the shares offered hereby in this prospectus.
LEGAL MATTERS
The Law Office of James G. Dodrill II, PA, of Boca Raton, Florida
will give an opinion for us regarding the validity of the common stock
offered in this prospectus.
EXPERTS
The financial statements as of March 31, 2003 and for the period
from September 6, 2002 (inception) to March 31, 2003 included in this
prospectus have been so included in reliance on the report of Webb &
Company, P.A., independent certified public accountants, given on the
authority of said firm as experts in auditing and accounting.
WHERE YOU CAN FIND MORE INFORMATION
We have filed a registration statement under the Securities Act
with respect to the securities offered hereby with the Commission, 450
Fifth Street, N.W., Washington, D.C. 20549. This prospectus, which
is a part of the registration statement, does not contain all of the
information contained in the registration statement and the exhibits
and schedules thereto, certain items of which are omitted in
accordance with the rules and regulations of the Commission. For
further information with respect to Atlantic Security, Inc. and the
securities offered hereby, reference is made to the registration
statement, including all exhibits and schedules thereto, which may be
inspected and copied at the public reference facilities maintained by
the Commission at 450 Fifth Street, N. W., Room 1024, Washington, D.
C. 20549 at prescribed rates during regular business hours. You may
obtain information on the operation of the public reference facilities
by calling the Commission at 1-800-SEC-0330. Also, the SEC maintains
an Internet site that contains reports, proxy and information
statements, and other information regarding issuers that file
electronically with the Commission at http://www.sec.gov. Statements
contained in this prospectus as to the contents of any contract or
other document are not necessarily complete, and in each instance
reference is made to the copy of such contract or document filed as an
exhibit to the registration statement, each such statement being
qualified in its entirety by such reference. Such request should be
directed to us at Atlantic Security, Inc., Glyme House, St. John's
Street, Bicester, Oxfordshire, OX26 6SL UK Attention: Terence Sullivan,
President.
Following the effectiveness of this registration statement, we
will file reports and other information with the Commission. All of
such reports and other information may be inspected and copied at the
Commission's public reference facilities described above. The
Commission maintains a web site that contains reports, proxy and
information statements and other information regarding issuers that
file electronically with the Commission. The address of such site is
http://www.sec.gov. In addition, we intend to make available to our
shareholders annual reports, including audited financial statements,
unaudited quarterly reports and such other reports as we may determine.
We will send a copy of any such report to any shareholder specifically
requesting such report.
ATLANTIC SECURITY LIMITED
(A DEVELOPMENT STAGE COMPANY)
FINANCIAL STATEMENTS
AS OF MARCH 31, 2003
ATLANTIC SECURITY LIMITED
(A DEVELOPMENT STAGE COMPANY)
CONTENTS
PAGE 1 INDEPENDENT AUDITORS' REPORT
PAGE 2 BALANCE SHEET AS OF MARCH 31, 2003
PAGE 3 STATEMENT OF OPERATIONS AND COMPREHENSIVE LOSS FOR
THE PERIOD FROM SEPTEMBER 6, 2002 (INCEPTION) TO
MARCH 31, 2003
PAGE 4 STATEMENT OF CHANGES IN STOCKHOLDERS'
DEFICIENCY FOR THE PERIOD FROM SEPTEMBER 6, 2002
(INCEPTION) TO MARCH 31, 2003
PAGE 5 STATEMENT OF CASH FLOWS FOR THE
PERIOD FROM SEPTEMBER 6, 2002 (INCEPTION) TO
MARCH 31 2003
PAGES 6 - 9 NOTES TO FINANCIAL STATEMENTS
INDEPENDENT AUDITORS' REPORT
To the Board of Directors of:
Atlantic Security Limited
(A Development Stage Company)
We have audited the accompanying balance sheet of Atlantic Security
Limited (a development stage company) as of March 31, 2003, and the
related statements of operations and comprehensive loss, changes in
stockholders' deficiency and cash flows for the period from September
6, 2002 (inception) to March 31, 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 our
audit.
We conducted our audit in accordance with auditing standards generally
accepted in the United States of America. Those standards require
that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audit
provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly in all material respects, the financial position of Atlantic
Security Limited (a development stage company) as of March 31, 2003
and the results of its operations and its cash flows for the period
from September 6, 2002 (inception) to March 31, 2003 in conformity
with accounting principles generally accepted in the United States of
America.
The accompanying financial statements have been prepared assuming that
the Company will continue as a going concern. As discussed in Note 6
to the financial statements, the Company is in the development stage
with no operations, has a negative cash flow from operations of $ 17,
and a working capital and stockholders' deficiency of $ 2,898. These
factors raise substantial doubt about its ability to continue as a
going concern. Management's plans concerning this matter are also
described in Note 6. The accompanying financial statements do not
include any adjustments that might result from the outcome of this
uncertainty.
WEBB & COMPANY, P.A.
Boynton Beach, Florida
July 14, 2003
ATLANTIC SECURITY LIMITED
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEET
MARCH 31, 2003
-----------------
ASSETS $ -
- ------ ========
LIABILITIES AND STOCKHOLDERS' DEFICIENCY
- ----------------------------------------
CURRENT LIABILITIES
Stockholder loans $ 2,898
---------
TOTAL LIABILITIES 2,898
COMMITMENTS AND CONTINGENCIES -
STOCKHOLDERS' DEFICIENCY
Common stock, $0.0158 par value, 1,000,000 shares
authorized, 39,805 shares issued and outstanding 627
Additional paid in capital 161
Accumulated deficit during development stage (2,915)
Accumulated other comprehensive gain 17
Subscription receivable (788)
---------
Total Stockholders' Deficiency (2,898)
---------
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIENCY $ -
=========
See accompanying notes to financial statements
2
ATLANTIC SECURITY LIMITED
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF OPERATIONS AND COMPREHENSIVE LOSS
FOR THE PERIOD FROM SEPTEMBER 6, 2002 (INCEPTION) TO MARCH 31, 2003
-------------------------------------------------------------------
OPERATING EXPENSES
General and administrative $ 2,915
----------
Total Operating Expenses 2,915
----------
LOSS FROM OPERATIONS (2,915)
Provision for Income Taxes -
----------
NET LOSS (2,915)
OTHER COMPREHENSIVE INCOME
Foreign currency translation gain 17
----------
COMPREHENSIVE LOSS $ (2,898)
- ------------------ ============
Net loss per share - basic and diluted $ (0.07)
============
Weighted average number of shares
outstanding during the period - basic
and diluted 39,805
===========
See accompanying notes to financial statements
3
ATLANTIC SECURITY LIMITED
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF STOCKHOLDERS' DEFICIENCY
FOR THE PERIOD FROM SEPTEMBER 6, 2002 (INCEPTION) TO MARCH 31, 2003
-------------------------------------------------------------------
Accumulated
Common Stock Deficit Other
------------------- Additional Development Comprehensive Subscription
Shares Amount Paid-In Capital Stage Gain Receivable Total
--------- -------- --------------- ----------- ------------- ------------ ---------
Stock issued to founders
($0.02 per share) 39,805 $ 627 $ 161 $ - $ - $ (788) $ -
Other comprehensive income - - - - 17 - 17
Net loss for the period from
September 6, 2002
(inception) to March 31, 2003 - - - (2,915) - - (2,915)
Comprehensive loss - - - - - - (2,898)
---------- --------- ------------ ----------- --------- ---------- =========
Balance, March 31, 2003 39,805 627 161 (2,915) 17 (788) (2,898)
See accompanying notes to financial statements
4
ATLANTIC SECURITY LIMITED
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CASH FLOWS
FOR THE PERIOD FROM SEPTEMBER 6, 2002 (INCEPTION) TO MARCH 31, 2003
-------------------------------------------------------------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (2,915)
Changes in operating assets
and liabilities
Stockholder loans 2,898
----------
Net Cash Used In Operating Activities (17)
----------
CASH FLOWS FROM INVESTING ACTIVITIES -
----------
CASH FLOWS FROM FINANCING ACTIVITIES: -
----------
EFFECT OF EXCHANGE RATE ON CASH 17
----------
NET INCREASE IN CASH -
CASH AND CASH EQUIVALENTS AT BEGINNING OF
PERIOD -
----------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ -
==========
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:
- ----------------------------------------------------------------------
During the period ended March 31, 2003, the Company received subscriptions
receivable of $788 for 39,805 shares of common stock.
See accompanying notes to financial statements
5
ATLANTIC SECURITY LIMITED
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
AS OF MARCH 31, 2003
------------------------
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND ORGANIZATION
- ------ -----------------------------------------------------------
(A) Organization
- ----------------
Atlantic Security Limited (a development stage company) (the
"Company") was incorporated in the United Kingdom on
September 6, 2002, and has elected a fiscal year of March 31.
The Company plans to market security products and asset
tracking software.
Activities during the development stage include developing
the business plan and raising capital.
On May 15, 2003, the Company consummated a share-exchange
agreement whereby it became a wholly owned subsidiary of
Atlantic Security, Inc., a Florida corporation (See Note 7).
(B) Use of Estimates
- --------------------
In preparing financial statements in conformity with
generally accepted accounting principles, management is
required to make estimates and assumptions that affect the
reported amounts of assets and liabilities and the disclosure
of contingent assets and liabilities at the date of the
financial statements and revenues and expenses during the
reported period. Actual results could differ from those
estimates.
(C) Cash and Cash Equivalents
- -----------------------------
For purposes of the cash flow statements, the Company
considers all highly liquid investments with original
maturities of three months or less at the time of purchase to
be cash equivalents.
(D) Foreign Currency Translation
- --------------------------------
The functional currency of the Company is the British Pound.
The financial statements of the Company are translated to
United States dollars using year-end exchange rates as to
assets and liabilities and average exchange rates as to
revenues and expenses. Capital accounts are translated at
their historical exchange rates when the capital transaction
occurred. Net gains and losses resulting from foreign
exchange translations are included in the statements of
operations ands stockholders' equity as other comprehensive
gain (loss).
6
ATLANTIC SECURITY LIMITED
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
AS OF MARCH 31, 2003
------------------------
(E) Comprehensive Income (Loss)
- -------------------------------
The foreign currency translation gain or loss resulting from
the translation of the financial statements expressed in
British Pounds to United States dollars is reported as other
comprehensive gain (loss) in the statement of operations and
stockholders' deficiency.
(F) Income Taxes
- ----------------
The Company accounts for income taxes under the Statement of
Financial Accounting Standards No. 109, "Accounting for
Income Taxes" ("Statement 109"). Under Statement 109,
deferred tax assets and liabilities are recognized for the
future tax consequences attributable to differences between
the financial statement carrying amounts of existing assets
and liabilities and their respective tax bases. Deferred tax
assets and liabilities are measured using enacted tax rates
expected to apply to taxable income in the years in which
those temporary differences are expected to be recovered or
settled. Under Statement 109, the effect on deferred tax
assets and liabilities of a change in tax rates is recognized
in income in the period that includes the enactment date.
The Company is organized in England and no tax benefit is
expected from the tax credits in the future.
(G) Fair Value of Financial Instruments
- ---------------------------------------
The carrying amounts of the Company's financial instruments
including stockholder loans approximate fair value due to the
relatively short period to maturity for this instrument.
(H) Loss Per Share
- ------------------
Basic and diluted net loss per common share is computed based
upon the weighted average common shares outstanding as
defined by Financial Accounting Standards No. 128, "Earnings
Per Share." As of March 31, 2003, there were no common stock
equivalents.
(I) Business Segments
- ---------------------
The Company operates in one segment and therefore segment
information is not presented.
7
ATLANTIC SECURITY LIMITED
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
AS OF MARCH 31, 2003
------------------------
(J) New Accounting Pronouncements
- ---------------------------------
In April 2003, the FASB issued SFAS No. 149, "Amendment of
Statement 133 on Derivative Instruments and Hedging
Activities". SFAS 149 amends and clarifies financial
accounting and reporting for derivative instruments,
including certain derivative instruments embedded in other
contracts (collectively referred to as derivatives) and for
hedging activities under SFAS No. 133, "Accounting for
Derivative Instruments and Hedging Activities". The changes
in SFAS No. 149 improve financial reporting by requiring that
contracts with comparable characteristics be accounted for
similarly. This statement is effective for contacts entered
into or modified after June 30, 2003 and all of its
provisions should be applied prospectively. The adoption of
this pronouncement will not have a material effect on the
Company's financial position or results of operations.
NOTE 2 STOCKHOLDER LOANS
- ------ -----------------
During 2003, the Company received loans from two stockholders
to fund operations. The loans are non-interest bearing and
due on demand (See Note 5).
NOTE 3 COMMITMENTS AND CONTINGENCIES
- ------ -----------------------------
During December 2002, the Company entered into a worldwide
non-exclusive distribution agreement (the "Agreement") to
distribute the SatraX asset-trading software. The Agreement
is for a term of twelve months with a twelve-month extension
upon mutual consent of the parties. Either party has the
right to terminate the contract after the initial twelve-
month period upon sixty days notice. The Agreement calls for
the Company to pay a $40,0 00 license fee for the Agreement to
become effective. As of July 14, 2003, the Company has not
paid the license fee.
During January 2003, the Company signed an agreement under
which it has a ten-month option to acquire all the
outstanding shares of two companies that hold intellectual
property rights to the Biological Substance Detector and
Molecular Detector. The agreement calls for the Company to
make an initial payment of approximately $3,149,000 and bonus
and milestone payments of approximately $4,724,000 to
exercise its option. In addition, the agreement calls for
the Company to pay approximately $3,149,000 in bonus payments
for each of the first two sales of products using the
intellectual property.
8
ATLANTIC SECURITY LIMITED
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
AS OF MARCH 31, 2003
------------------------
NOTE 4 STOCKHOLDERS' DEFICIENCY
- ------ ------------------------
(A) Issuance of Common Stock to Founders
- ----------------------------------------
During the period ended March 31, 2003, the Company issued
39,805 shares of common stock for a subscription receivable
of $ 788.
NOTE 5 RELATED PARTY TRANSACTIONS
- ------ --------------------------
During 2003, the Company received loans from two stockholders
to fund operations (See Note 2).
NOTE 6 GOING CONCERN
- ------ -------------
As reflected in the accompanying financial statements, the
Company is a development stage company with no revenues, has
a negative cash flow from operations of $17, and a working
capital and stockholders' deficiency of $2,898. These
factors raise substantial doubt about its ability to continue
as a going concern. The ability of the Company to continue
as a going concern is dependent on the Company's ability to
further implement its business plan, raise capital and
generate revenues. The financial statements do not include
any adjustments that might be necessary if the Company is
unable to continue as a going concern.
The Company is negotiating with capital funding sources and
service providers to implement its business plan. Management
believes that actions presently being taken to raise capital
and implement its business plan provides the opportunity for
the Company to continue as a going concern.
NOTE 7 SUBSEQUENT EVENT
- ------ ----------------
On May 15, 2003, the Company consummated an agreement with
Atlantic Security, Inc., a Florida corporation, pursuant to
which the Company exchanged all of its 3,980,500 then issued and
outstanding shares of common stock for 3,980,500 shares of
the common stock of Atlantic Security, Inc. As a result of
the transaction (the "Transaction"), the Company became a
wholly owned subsidiary of Atlantic Security, Inc. and all of
the shareholders of the Company became stockholders of common
stock of Atlantic Security, Inc. As a result of the agreement,
the Transaction will be accounted for accounting purposes as a capital
transaction and recapitalization by the accounting acquirer(Atlantic
Security, Limited) and as a reorganization by the accounting
acquiree (Atlantic Security, Inc.).
9
ATLANTIC SECURITY, INC. AND SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2003
ATLANTIC SECURITY, INC. AND SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)
CONTENTS
PAGE 1 CONDENSED CONSOLIDATED BALANCE SHEET AS OF DECEMBER
31, 2003 (UNAUDITED)
PAGE 2 CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS FOR
THE THREE AND NINE MONTHS ENDED DECEMBER 31, 2003
AND FOR THE THREE MONTHS ENDED DECEMBER 31, 2002
AND FOR THE PERIOD FROM SEPTEMBER 6, 2002
(INCEPTION) TO DECEMBER 31, 2002 AND FOR THE PERIOD
FROM SEPTEMBER 6, 2002 (INCEPTION) TO DECEMBER 31,
2003 (UNAUDITED)
PAGE 3 CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS'
DEFICIENCY FOR THE PERIOD FROM SEPTEMBER 6, 2002
(INCEPTION) TO DECEMBER 31, 2003 (UNAUDITED)
PAGE 4 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS FOR
THE NINE MONTHS ENDED DECEMBER 31, 2003 AND FOR THE
PERIOD FROM SEPTEMBER 6, 2002 (INCEPTION) TO
DECEMBER 31 2002 AND FOR THE PERIOD FROM SEPTEMBER
6, 2002 (INCEPTION) TO DECEMBER 31, 2003 (UNAUDITED)
PAGES 5 - 7 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
ATLANTIC SECURITY, INC. AND SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)
CONDENSED CONSOLIDATED BALANCE SHEET
DECEMBER 31, 2003
-----------------
(UNAUDITED)
ASSETS
- ------
CURRENT ASSETS
Cash $ 82,030
Prepaid expenses 1,500
---------
TOTAL CURRENT ASSETS $ 83,530
- -------------------- ---------
LIABILITIES AND STOCKHOLDERS' DEFICIENCY
- ----------------------------------------
CURRENT LIABILITIES
Accrued officers' salary $ 87,250
Stockholder loans $ 2,444
---------
TOTAL CURRENT LIABILITIES 89,694
COMMITMENTS AND CONTINGENCIES -
STOCKHOLDERS' DEFICIENCY
Common stock, $0.001 par value, 100,000,000 shares
authorized, 23,058,000 shares issued and outstanding 23,058
Additional paid in capital 187,175
Accumulated deficit during development stage (234,261)
Accumulated other comprehensive gain 17,864
---------
Total Stockholders' Deficiency (6,164)
---------
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIENCY $ 83,530
=========
See accompanying notes to condensed consolidated financial statements
1
ATLANTIC SECURITY, INC. AND SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(UNAUDITED)
For the For the Period
Period From From September
For The Three For the Three For the Nine September 6, 2002 6, 2002
Months Ended Months Ended Months Ended (Inception) To (Inception) To
December 31, December 31, December 31, December 31, December 31,
2003 2002 2003 2002 2003
OPERATING EXPENSES
Stock issued for services $ - $ - $ 100,000 $ - $ 100,000
Officers salary 87,250 - 87,250 - 87,250
Professional fees 34,210 - 38,106 - 38,106
Other general and administrative 531 663 6,011 2,254 8,925
---------- ---------- --------- --------- -------------
Total Operating Expenses 121,991 663 231,367 2,254 234,281
---------- ---------- --------- --------- -------------
LOSS FROM OPERATIONS (121,991) (663) (231,367) (2,254) (234,281)
OTHER INCOME
Interest income 14 - 20 - 20
---------- ---------- --------- --------- -------------
Net Loss Before Taxes (121,976) (663) (231,347) (2,254) (234,261)
Provision for Income Taxes - - - - -
---------- ---------- --------- --------- -------------
NET LOSS (121,976) (663) (231,347) (2,254) (234,261)
OTHER COMPREHENSIVE INCOME
Foreign currency translation gain 17,656 - 17,847 - 17,864
---------- ---------- --------- --------- -------------
COMPREHENSIVE LOSS $ (104,320) $ (663) $(213,499) $ (2,254) $ (216,397)
- ------------------ ============ =========== ========== ========== =============
Net loss per share - basic and diluted $ - $ - $ (0.01) $ - $ (0.01)
============ =========== ========== ========== =============
Weighted average number of shares
outstanding during the period - basic
and diluted 21,701,478 15,922,000 20,055,409 15,922,000 18,179,497
=========== ========== ========== ========== ==========
See accompanying notes to condensed consolidated financial statements
2
ATLANTIC SECURITY, INC. AND SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)
CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' DEFICIENCY
FOR THE PERIOD FROM SEPTEMBER 6, 2002 (INCEPTION) TO DECEMBER 31, 2003
(UNAUDITED)
Accumulated
Common Stock Deficit Other
------------------- Additional Development Comprehensive Subscription
Shares Amount Paid-In Capital Stage Income Receivable Total
--------- -------- --------------- ----------- ------------- ------------ ---------
Stock issued to founders
($0.0001 per share) 15,922,000 $ 15,922 $ (15,134) $ - $ - $ (788) $ -
Other comprehensive income - - - - 17 - 17
Net loss for the period from
September 6, 2002
(inception) to March 31, 2003 - - - (2,915) - - (2,915)
Comprehensive loss - - - - - - (2,898)
---------- --------- ------------ ----------- --------- ---------- =========
Balance, March 31, 2003 15,922,000 15,922 (15,134) (2,915) 17 (788) (2,898)
Stock issued in reverse merger 4,000,000 4,000 (3,955) - - - 45
($0.0001 per share)
Proceeds from subscription
receivable - - - - - 788 788
Stock issued for cash
($0.025 per share) 536,000 536 12,864 - - (10,027) 3,373
Stock issued for services
($0.10 per share) 1,000,000 1,000 99,000 - - - 100,000
Stock issued for cash
($0.06 per share) 1,600,000 1,600 94,400 - - - 96,000
Proceeds from subscription receivable - - - - - 10,027 10,027
Other comprehensive Income - - - - 17,847 - 17,847
Net loss for the nine month
period ended December 31, 2003 - - - (231,346) - - (231,346)
Comprehensive loss - - - - - - (213,499)
---------- --------- ------------ ----------- --------- ---------- ---------
BALANCE, DECEMBER 31, 2003 23,058,000 $ 23,058 $ 187,175 $(234,261) $ 17,864 $ - $ (6,164)
=========================== ========== ========= ============ =========== ========= ========== =========
See accompanying notes to condensed consolidated financial statements
3
ATLANTIC SECURITY, INC. AND SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
For The For The
Period From Period From
For The Nine September 6, 2002 September 6, 2002
Months Ended (Inception) To (Inception) to
December 31, December 31, December 31,
2003 2002 2003
------------- ----------------- -----------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (231,346) $ (2,254) $ (234,261)
Adjustments to reconcile net loss
to net cash used in operating
activities:
Stock issued for services 100,000 - 100,000
Changes in operating assets
and liabilities
Increase in prepaid expense (1,500) - (1,500)
Increase in accrued officers salary 87,250 - 87,250
---------- ----------- ----------
Net Cash Used In Operating Activities (45,596) (2,254) (48,511)
---------- ----------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES - - -
---------- ----------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock 110,233 - 110,233
Proceeds from stockholder loans 3,961 2,254 6,859
Payments on stockholder loans (4,415) (4,415)
---------- ----------- ----------
Net Cash Provided By Operating Activities 109,779 2,254 112,677
---------- ----------- ----------
EFFECT OF EXCHANGE RATE ON CASH 17,847 - 17,864
---------- ----------- ----------
NET INCREASE IN CASH 82,030 - 82,030
CASH AND CASH EQUIVALENTS AT BEGINNING OF
PERIOD - - -
---------- ----------- ----------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 82,030 $ - $ 82,030
========== =========== ==========
See accompanying notes to condensed consolidated financial statements
4
ATLANTIC SECURITY, INC. AND SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2003
-----------------------
(UNAUDITED)
NOTE 1 BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial
statements have been prepared in accordance with accounting
principles generally accepted in the United States of America
and the rules and regulations of the Securities and Exchange
Commission for interim financial information. Accordingly,
they do not include all the information necessary for a
comprehensive presentation of financial position and results
of operations.
It is management's opinion however, that all material
adjustments (consisting of normal recurring adjustments) have
been made which are necessary for a fair financial statements
presentation. The results for the interim period are not
necessarily indicative of the results to be expected for the
year.
NOTE 2 USE OF ESTIMATES
In preparing financial statements in conformity with
generally accepted accounting principles, management is
required to make estimates and assumptions that affect the
reported amounts of assets and liabilities and the disclosure
of contingent assets and liabilities at the date of the
financial statements and revenues and expenses during the
reported period. Actual results could differ from those
estimates.
NOTE 3 LOSS PER SHARE
Basic and diluted net loss per common share is computed based
upon the weighted average common shares outstanding as
defined by Financial Accounting Standards No. 128, "Earnings
Per Share." As of December 31, 2003 and 2002, there were no
common share equivalents outstanding.
NOTE 4 REVERSE MERGER
On May 15, 2003, Atlantic Security, Inc. consummated an
agreement with Atlantic Security Limited, a United Kingdom
corporation, pursuant to which Atlantic Security Limited
exchanged all of its 39,805 then issued and outstanding
shares of common stock for 3,980,500 (15,922,000 post split)
shares or approximately 80% of the common stock of Atlantic
Security, Inc. As a result of the agreement, the transaction
was treated for accounting purposes as a reorganization by
the accounting acquirer (Atlantic Security Limited) and as a
recapitalization by the accounting acquiree (Atlantic
Security, Inc.) (See Note 6(C)).
Accordingly, the financial statements include the following:
(1) The balance sheet consists of the net assets of the
acquirer at historical cost and the net assets of the
acquiree at historical cost.
(2) The statement of operations includes the operations of the
acquirer for the periods presented and the operations of
the acquiree from the date of the merger.
NOTE 5 LOAN PAYABLE - STOCKHOLDERS
During the period from inception to December 31, 2003, a
stockholder of the Company paid $6,859 for operating expenses
on behalf of the Company and the Company has repaid the stockholder
$4,415. The balance of the loan of $2,444 is payable on
demand, non-interest bearing and unsecured (See Note 7).
NOTE 6 STOCKHOLDERS' EQUITY
(A) Stock Issued for Cash
During the three months ended June 30, 2003, the Company
issued 1,000,000 (4,000,000 post split) shares of common
stock to the stockholders of Atlantic Security, Inc. in a
reverse merger transaction for cash of $45.
During the three months ended June 30, 2003, the Company
received cash proceeds of $788 on subscription receivables.
During the three months ended September 30, 2003, the Company
issued 134,000 (536,000 post split) shares of common stock
for cash and subscriptions receivable of $3,373 and $10,027,
respectively.
During the three months ended December 31, 2003, the Company
issued 1,600,000 shares of common stock for cash of $96,000.
During the three months ended December 31, 2003, the Company
received cash proceeds of $10,027 on subscriptions
receivable.
(B) Stock Issued for Services
During the three months ended September 30, 2003, the Company
issued 1,000,000 shares of common stock for services with a
fair value of $100,000.
(C) Stock Issued in Reverse Merger
On May 15, 2003, Atlantic Security, Inc. exchanged 3,980,500
(15,922,000 post split) shares of common stock for all the
outstanding shares of Atlantic Security Limited (See Note 4).
(D) Common Stock Split
On December 9, 2003, the Company declared a 4 for 1 common
stock split. Per share and weighted average share amounts
have been retroactively restated in the accompanying
financial statements and related notes to reflect this split.
NOTE 7 RELATED PARTY TRANSACTIONS
A stockholder of the Company paid $6,859 of operating expenses
on behalf of the Company from inception (See Note 5). The Company
has repaid a total of $4,415 to the stockholder.
NOTE 8 COMMITMENTS AND CONTINGENCIES
The Company entered into an employment agreement with a
stockholder to become the CEO and Chairman of the Company
effective October 1, 2003 at an annual salary of $235,000.
The agreement expires on the stockholders 75th birthday or
with six months notice by the Company unless there is a
change in control, which requires the Company to provide one-
year notice. The agreement also calls for a bonus of 10% of
the net income of the Company if the Company reaches certain
sales targets, a 12% car allowance and provides for the
stockholder at his option to receive a portion of his
compensation in the form of stock at a 30% discount.
The Company entered into an employment agreement with an
individual to become the COO and President of the North
American Division effective October 6, 2003 at an annual
salary of $100,000. The agreement expires on the individuals
70th birthday or with thirty days notice by either party.
NOTE 9 GOING CONCERN
As reflected in the accompanying condensed consolidated
financial statements, the Company is a development stage
company with no revenues, has a negative cash flow from
operations from inception of $48,511. These factors raise
substantial doubt about its ability to continue as a going
concern. The ability of the Company to continue as a going
concern is dependent on the Company's ability to further
implement its business plan, raise additional capital and
generate revenues. The financial statements do not include
any adjustments that might be necessary if the Company is
unable to continue as a going concern.
The Company is negotiating with capital funding sources and
service providers to implement its business plan. Management
believes that actions presently being taken to raise
additional capital and implement its business plan provides
the opportunity for the Company to continue as a going
concern.
No dealer, salesman or other
person is authorized to give any
information or to make any
representations not contained in
this prospectus in connection with
the offer made hereby, and, if
given or made, such information or
representations must not be relied
upon as having been authorized by
Atlantic Security, Inc. This
prospectus does not constitute an
offer to sell or a solicitation to
an offer to buy the securities
offered hereby to any person in any
state or other jurisdiction in
which such offer or solicitation
would be unlawful. Neither the
delivery of this prospectus nor any
sale made hereunder shall, under
any circumstances, create any
implication that the information
contained herein is correct as of
any time subsequent to the date
hereof.
Until _________ __, 2004 (90 days
after the date of this prospectus)
all dealers that effect
transactions in these securities,
whether or not participating in
this offering, may be required to
deliver a prospectus. This is in
addition to the dealer's obligation
to deliver a prospectus when acting
as underwriters and with respect to
their unsold allotments or
subscriptions.
TABLE OF CONTENTS
Page
----
Prospectus Summary 3 Atlantic Security, Inc.
The Offering 4
Summary Financial Data 6
Risk Factors 7
Forward Looking Statements 12
Use of Proceeds 13
Determination of Offering Price 14
Dividend Policy 14
Management's Plan of Operation 15 5,514,500 Shares
Business 18
Management 25
Principal Shareholders 28
Selling Shareholders 29
Description of Securities 31
Certain Transactions 33
Indemnification 34 PROSPECTUS
Plan of Distribution 35
Legal Matters 37
Experts 37
Where You Can Find More
Information 38
Financial Statements
April 22, 2004
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 24. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Our Articles of Incorporation, as well as our By-Laws provide
for the indemnification of directors, officers, employees and
agents of the corporation to the fullest extent provided by the
Corporate Law of the State of Florida, as well as is described in
the Articles of Incorporation and the By-Laws. These sections
generally provide that the Company may indemnify any person who
was or is a party to any threatened, pending or completed action,
suit or proceeding whether civil, criminal, administrative or
investigative except for an action by or in right of the
corporation by reason of the fact that he or she is or was a
director, officer, employee or agent of the corporation.
Generally, no indemnification may be made where the person has
been determined to be negligent or guilty of misconduct in the
performance of his or her duties to the Company.
Insofar as indemnification for liabilities arising under
the Securities Act may be permitted to our directors, officers or
controlling persons, pursuant to the foregoing provisions, 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.
ITEM 25. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
We estimate that expenses in connection with this
registration statement will be as follows:
SEC registration fee $175
Accounting fees and expenses $5,000
Legal $37,500
Edgarizing fees* $4,825
----------
Total $47,500
* estimates
ITEM 26. RECENT SALES OF UNREGISTERED SECURITIES
The following information is furnished with regard to all
securities sold by us within the past three years that were not
registered under the Securities Act. The issuances described
hereunder were made in reliance upon the exemptions from
registration set forth in Section 4(2) of the Securities Act or
Regulation D of the Securities Act. None of the foregoing
transactions involved a distribution or public offering.
Date Name # of Shares(1) Total Price
- ----------------------------------------------------------------------
May 15, 2003 Terence Sullivan 9,600,000 $*
December 9, 2003 William Elett 1,600,000 $96,000
May 15, 2003 E-N Corp 1,400,000 $*
May 15, 2003 William Duncan Swartz 1,000,000 $*
September 26, 2003 Oliver Cassell 400,000 $10,000
May 15, 2003 Alan Coe 400,000 $*
May 15, 2003 Dravrar 400,000 $*
May 15, 2003 Judy Fishman and
Michael Fishman JTTEN 400,000 $*
May 15, 2003 Alan Gibson 400,000 $*
May 15, 2003 James Christopher Holmes 400,000 $*
May 15, 2003 Daniela. Lapuste 400,000 $*
May 15, 2003 Kwan Lam Ng 400,000 $*
May 15, 2003 Howard Smith 400,000 $*
May 15, 2003 Thomas Harrison 340,000 $*
May 15, 2003 Watson Dave International 300,000 $*
May 15, 2003 Thomas Gryzmala 60,000 $*
May 15, 2003 Greg Chan 12,000 $*
May 15, 2003 Ulfat Kiani 8,000 $*
August 17, 2003 Jacky Barker 4,000 $100
August 17, 2003 Kevin Barker 4,000 $100
August 17, 2003 George Chaliss 4,000 $100
August 17, 2003 Margaret Chan 4,000 $100
August 17, 2003 Dorothy Cornwell 4,000 $100
August 17, 2003 John H. Cornwell Jr. 4,000 $100
August 17, 2003 John H. Cornwell III 4,000 $100
August 17, 2003 Sarah Cornwell 4,000 $100
August 17, 2003 Jon Evans 4,000 $100
August 17, 2003 Mo Lan Lo 4,000 $100
August 17, 2003 Ian Macpherson 4,000 $100
August 17, 2003 Sarah Macpherson 4,000 $100
August 17, 2003 Baldeep Namas 4,000 $100
August 17, 2003 Mandeep Namas 4,000 $100
August 17, 2003 Perminder Namas 4,000 $100
August 17, 2003 Ravi Namas 4,000 $100
August 17, 2003 Chau Lam Ng 4,000 $100
August 17, 2003 Lam Fai Ng 4,000 $100
August 17, 2003 Oi Ling Lee Ng 4,000 $100
August 17, 2003 Sau Chun Ng 4,000 $100
August 17, 2003 Gurpreet Sahota 4,000 $100
August 17, 2003 Rani K. Sahota 4,000 $100
August 17, 2003 Surinder Sahota 4,000 $100
August 17, 2003 Tom Sit 4,000 $100
August 17, 2003 Hardev Kaur Sodhi 4,000 $100
August 17, 2003 Helen Sodhi 4,000 $100
August 17, 2003 Rajvir Singh Sodhi 4,000 $100
August 17, 2003 Ranjit Sodhi 4,000 $100
August 17, 2003 Mark Sullivan 4,000 $100
August 17, 2003 Hon Wae Wong 4,000 $100
August 17, 2003 Pui Chun wong 4,000 $100
August 17, 2003 Kong Yau 4,000 $100
August 17, 2003 Teresa Yau 4,000 $100
August 17, 2003 Tung Mei Yau 4,000 $100
May 15, 2003 Janet Ann Sullivan 1,200 $*
May 15, 2003 Sarah. Janet. Holmes 800 $*
* issued in exchange for shares in Atlantic Security Limited.
ASL shareholders received 400 shares of our common stock for each
share of ASL previously held.
(1) The number of shares referenced above for each shareholder
are subsequent to a 4 for 1 stock split.
ITEM 27. EXHIBITS
Exhibit Number Description
3.1 Articles of Incorporation of Atlantic Security, Inc.
3.2 Bylaws of Atlantic Security, Inc.*
3.3 Specimen certificate of the Common Stock of
Atlantic Security, Inc.*
5.1 Opinion of Law Office of James G. Dodrill
II, PA as to legality of securities being registered*
10.1 Financing Agreement with Citywide
Management Services, Inc.
10.2 Employment contract with Terence Sullivan
10.3 Employment contract with Howard Smith
23.1 Consent of Webb & Company, PA
23.2 Consent of James G. Dodrill II, PA
(included in Exhibit 5.1)
* to be filed by amendment
ITEM 28. UNDERTAKINGS
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 (the "Act") may be permitted to directors,
officers and controlling persons of the Company pursuant to the
foregoing provisions, or otherwise, the Company has been advised
that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy and as expressed in
the Act and is, therefore, unenforceable.
The Company hereby undertakes to:
(1) File, during any period in which it offers or sells
securities, a post-effective amendment to this registration
statement to:
i. Include any prospectus required by Section
10(a)(3) of the Securities Act;
ii. Reflect in the prospectus any facts or events
which, individually or together, represent a
fundamental change in the information in the
registration statement.
iii. Include any additional or changed material
information on the plan of distribution.
(2) For determining liability under the Securities Act,
treat each post-effective amendment as a new registration
statement of the securities offered, and the offering of
the securities at that time to be the initial bona fide
offering.
(3) File a post-effective amendment to remove from
registration any of the securities that remain unsold at
the end of the offering.
(4) Insofar as indemnification for liabilities arising
under the Securities Act of 1933 (the "Act") may be
permitted to our directors, officers and controlling
persons pursuant to the foregoing provisions, or otherwise,
we have been advised by the Securities and Exchange
Commission that such indemnification is against public
policy as expressed in the Act and is, therefore,
unenforceable.
In the event that a claim for indemnification against such
liabilities (other than the payment by us of expenses incurred or
paid by one of our directors, officers or controlling persons in
the successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in
connection with the securities being registered, we will, unless
in the opinion of our counsel the matter has been settled by
controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by us is
against public policy as expressed in the Securities Act and will
be governed by the final adjudication of such issue.
Signatures
In accordance with the requirements of the Securities Act of
1933, the registrant certifies that it has reasonable ground to
believe that it meets all of the requirements for filing on Form
SB-2/A and authorized this registration statement to be signed on
its behalf by the undersigned, thereunto duly authorized, in the
city of Boca Raton state of Florida, on April 22, 2004.
ATLANTIC SECURITY, INC.
By: /s/ Terence Sullivan
-------------------------
Terence Sullivan
Principal Executive Officer,
President and Chairman
In accordance with the requirements of the Securities Act of
1933, this registration statement has been signed by the following
person in the capacities indicated on April 22, 2004.
/s/ Terence Sullivan Principal Executive Officer, President and Chairman
- -------------------------
Terence Sullivan
/s/ Gregory Chan Acting Principal Financial Officer and
- ------------------------- Acting Principal Accounting Officer
Gregory Chan
/s/ Christopher Holmes Director
- -------------------------
Christopher Holmes
/s/ Howard Smith Director
- -------------------------
Howard Smith