Registration of Securities by a Small-Business Issuer — Form SB-2
Filing Table of Contents
Document/Exhibit Description Pages Size
1: SB-2 Registration of Securities by a Small-Business 66± 307K
Issuer
2: EX-2 Plan of Acquisition, Reorganization, Arrangement, 2± 9K
Liquidation or Succession
3: EX-3.(I) Articles of Incorporation/Organization or By-Laws 2 11K
4: EX-3.2 Articles of Incorporation/Organization or By-Laws 11 42K
5: EX-4 Instrument Defining the Rights of Security Holders 1 8K
6: EX-5 Opinion re: Legality 2± 13K
7: EX-10.1 Material Contract 12± 50K
16: EX-10.10 Material Contract 2± 10K
8: EX-10.2 Material Contract 25± 97K
9: EX-10.3 Material Contract 23± 90K
10: EX-10.4 Material Contract 20 62K
11: EX-10.5 Material Contract 19 62K
12: EX-10.6 Material Contract 19 62K
13: EX-10.7 Material Contract 1 9K
14: EX-10.8 Material Contract 2± 12K
15: EX-10.9 Material Contract 2± 11K
17: EX-21 Subsidiaries of the Registrant 1 7K
18: EX-23 Consent of Experts or Counsel 1 8K
19: EX-27 Financial Data Schedule 1 9K
SB-2 — Registration of Securities by a Small-Business Issuer
Document Table of Contents
| Page | (sequential) | | | | (alphabetic) | Top |
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| | |
- Alternative Formats (Word, et al.)
- Because Our Business Will Continually Involve Substantial Operating Expenses, We Anticipate Losses for the Foreseeable Future
- Because Our Principal Stockholders Have Voting Control, They Control Our Corporate Affairs; You May Have Little or No Participation in Our Corporate Affairs
- Because Our Stock Is Considered A Penny Stock Any Investment In Our Stock Is Considered To Be A High-Risk Investment And Is Subject To Restrictions On Marketability
- Because We Have No Management Experience in Operating On-Line Grocery Stores, We May Be Unable to Develop Profitable Operations
- Certain Relationships and Related Transactions
- Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
- Description of Business
- Description of Property
- Description of Securities
- Determination of Offering Price
- Dilution
- Directors, Executive Officers, Promoters, and Control Persons
- Disclosure of Commission Position on Indemnification for Securities Act Liabilities
- Executive Compensation
- Exhibits
- Financial Statements
- If We Are Unable To Retain And Attract Qualified Personnel, Our Business Could Suffer
- If We Are Unsuccessful In Securing A Lease On A Warehouse Facility To Serve As Our Fulfillment Center, Our Operations Will Never Expand
- If We Fail to Address Internet Commerce Security Risks, Our Operations and Brand Name Will Be Negatively Impacted
- If We Fail to Develop A High Quality Service, We Will Be Unable to Develop Repeat Business
- Indemnification of Directors and Officers
- Interest of Experts and Counsel
- Issuance Of Preferred Stock Could Depress The Market Value Of Your Investment And Have A Potential Anti-Takeover Effect
- Legal Proceedings
- Market for Common Equity and Related Stockholder Matters
- Offering Price of Our Securities Is Arbitrary and There Is No Public Market for Our Common Stock; You May Be Unable to Sell Your Securities, The
- Offering, The
- Organization Within Last Five Years
- Other Expenses of Issuance and Distribution
- Our Poor Financial Condition Raises Substantial Doubt About Our Ability to Continue as A Going Concern; You Will Be Unable to Determine Whether We Will Ever Become Profitable
- Plan of Distribution
- Plan of Operations
- Recent Sales of Unregistered Securities
- Risk Factors
- Security Ownership of Certain Beneficial Owners and Management
- Selling Security Holders
- Summary Information and Risk Factors
- The offering
- The Offering Price of Our Securities Is Arbitrary and There Is No Public Market for Our Common Stock; You May Be Unable to Sell Your Securities
- Undertakings
- Use of Proceeds
- We Are Currently Unable To Promote Our Brand; We May Never Develop The Ability To Promote Our Brand
- We Are Subject to Risks Associated With Foreign Currency Transactions That May Negatively Impact Upon Our Financial Condition
- We Face The Possibility Of System Failure That Subjects Us To Risk Of Data Loss, Cessation Of Service And Failure To Keep Our Client Information Confidential
- We Have Never Paid Dividends; You May Never Receive A Dividend From Your Investment
- We Have Possible Conflicts Of Interest With Our Officers And Directors That May Negatively Impact Upon Our Corporate Affairs
- We May Be Subject To Possible Infringement Claims That Could Lead To Damage Awards Against Us Or Limitations On Our Business
- We Will Rely On Third Parties; If We Fail To Establish Or Maintain These Relationships, Our Operations Will Be Negatively Impacted
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| 1 | 1st Page - Filing Submission
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| 3 | Our Poor Financial Condition Raises Substantial Doubt About Our Ability to Continue as A Going Concern; You Will Be Unable to Determine Whether We Will Ever Become Profitable
|
| " | Because Our Business Will Continually Involve Substantial Operating Expenses, We Anticipate Losses for the Foreseeable Future
|
| " | Because We Have No Management Experience in Operating On-Line Grocery Stores, We May Be Unable to Develop Profitable Operations
|
| " | If We Fail to Develop A High Quality Service, We Will Be Unable to Develop Repeat Business
|
| " | We Are Subject to Risks Associated With Foreign Currency Transactions That May Negatively Impact Upon Our Financial Condition
|
| " | The Offering Price of Our Securities Is Arbitrary and There Is No Public Market for Our Common Stock; You May Be Unable to Sell Your Securities
|
| " | Because Our Principal Stockholders Have Voting Control, They Control Our Corporate Affairs; You May Have Little or No Participation in Our Corporate Affairs
|
| " | If We Fail to Address Internet Commerce Security Risks, Our Operations and Brand Name Will Be Negatively Impacted
|
| 4 | Item 3. Summary Information and Risk Factors
|
| " | The offering
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| " | Risk Factors
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| " | We Will Rely On Third Parties; If We Fail To Establish Or Maintain These Relationships, Our Operations Will Be Negatively Impacted
|
| " | We May Be Subject To Possible Infringement Claims That Could Lead To Damage Awards Against Us Or Limitations On Our Business
|
| " | We Are Currently Unable To Promote Our Brand; We May Never Develop The Ability To Promote Our Brand
|
| " | If We Are Unable To Retain And Attract Qualified Personnel, Our Business Could Suffer
|
| " | Issuance Of Preferred Stock Could Depress The Market Value Of Your Investment And Have A Potential Anti-Takeover Effect
|
| " | We Have Possible Conflicts Of Interest With Our Officers And Directors That May Negatively Impact Upon Our Corporate Affairs
|
| " | We Have Never Paid Dividends; You May Never Receive A Dividend From Your Investment
|
| " | We Face The Possibility Of System Failure That Subjects Us To Risk Of Data Loss, Cessation Of Service And Failure To Keep Our Client Information Confidential
|
| " | If We Are Unsuccessful In Securing A Lease On A Warehouse Facility To Serve As Our Fulfillment Center, Our Operations Will Never Expand
|
| " | Because Our Stock Is Considered A Penny Stock Any Investment In Our Stock Is Considered To Be A High-Risk Investment And Is Subject To Restrictions On Marketability
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| " | Item 4. Use of Proceeds
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| " | Item 5. Determination of Offering Price
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| " | Item 6. Dilution
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| " | Item 7. Selling Security Holders
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| " | Item 8. Plan of Distribution
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| " | Item 9. Legal Proceedings
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| " | Item 10. Directors, Executive Officers, Promoters, and Control Persons
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| " | Item 11. Security Ownership of Certain Beneficial Owners and Management
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| " | Item 12. Description of Securities
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| " | Item 13. Interest of Experts and Counsel
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| " | Item 14. Disclosure of Commission Position on Indemnification for Securities Act Liabilities
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| " | Item 15. Organization Within Last Five Years
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| " | Item 16. Description of Business
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| " | Item 17. Plan of Operations
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| " | Item 18. Description of Property
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| " | Item 19. Certain Relationships and Related Transactions
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| " | Item 20. Market for Common Equity and Related Stockholder Matters
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| " | Item 21. Executive Compensation
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| " | Item 22. Financial Statements
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| 16 | Item 23. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
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| 17 | Item 24. Indemnification of Directors and Officers
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| " | Item 25. Other Expenses of Issuance and Distribution
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| " | Item 26. Recent Sales of Unregistered Securities
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| 18 | Item 27. Exhibits
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| " | Item 28. Undertakings
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM SB-2
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
LAZYGROCER.COM, INC.
(Name of small business issuer in our charter)
FLORIDA
(State or other jurisdiction of incorporation or organization)
7385 98-0234906
(Primary standard industrial (I.R.S. Employer
classification code number) Identification No.)
41 YORK STREET, 3RD FLOOR, OTTAWA, ONTARIO K1N 5S7 CANADA
(613) 241-6195
(Address and telephone number of principal executive offices)
41 YORK STREET, 3RD FLOOR,
OTTAWA, ONTARIO K1N 5S7 CANADA
(Name, address and telephone of agent for service)
Brenda Hamilton
555 South Federal Highway, #270
Boca Raton, Florida 33432
(561) 416-8956
WE ARE OFFERING 800,000 UNITS AT THE OFFERING PRICE OF $1.00 PER UNIT. EACH UNIT
CONSISTS ONE SHARE OF COMMON STOCK, ONE OPTION TO ACQUIRE ONE SHARE OF COMMON
STOCK AT A PRICE OF $2.50 PER SHARE AND ONE OPTION TO ACQUIRE ONE SHARE OF
COMMON STOCK AT A PRICE OF $3.50 PER SHARE. EACH OPTION, WHETHER EXERCISEABLE AT
$2.50 OR $3.50 PER SHARE, WILL BE EXERCISABLE FROM THE EFFECTIVE DATE OF THIS
REGISTRATION STATEMENT UNTIL 5:00 P.M. EASTERN STANDARD TIME ON DECEMBER 31,
2001. IN ADDITION, 4,733,535 SHARES OF OUR COMMON STOCK ARE BEING OFFERED BY
SELLING SECURITY HOLDERS.
Approximate date of commencement of proposed sale to the public: From time to
time after this Registration Statement becomes effective.
If any of the Securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, as amended, check the following box: [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act of 1933, please check the
following box and list the Securities Act of 1933 registration number of
the earlier effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act of 1933, check the following box and list the Securities
Act of 1933 registration statement number of the earlier effective
registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(d) under
the Securities Act of 1933, check the following box and list the Securities
Act of 1933 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. [ ]
[Enlarge/Download Table]
CALCULATION OF REGISTRATION FEE (1)
Tittle of class of Amount being Proposed maximum Proposed maximum
securities to be registered offered offering price per share aggregate offering Amount of Registration
price
common stock,
par-value of $.001 per share $4,733,535 $0
Total Registration Fee $0
(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457.
(2) Assumes subscription of 800,000 units at $1.00 per unit and 1,600,000
shares upon exercise of the options.
(3) Selling shareholders hold 4,733,535 of the shares being registered.
These shares will be sold at prevailing market prices. We will not receive
proceeds from the sale of the selling shareholders shares.
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 this Registration Statement shall become
effective on such date as the Commission, acting pursuant to Section 8(a) may
determine.
The information in this prospectus is not complete and may be changed. We
may not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an offer
to sell these securities and it is not soliciting an offer to buy these
securities in any state where the offer or sale is not permitted.
LAZYGROCER.COM, INC.
SUBJECT TO COMPLETION, DATED FEBRUARY 7, 2001
INITIAL PUBLIC OFFERING PROSPECTUS
Our current shareholders are offering 4,733,535 Shares of our common stock.
The selling security holders may offer their shares at any price. We will pay
all expenses of registering the securities.
We are offering on an best efforts basis 800,000 units at $1.00 per unit,
each unit being comprised of one share of our common stock and one option to
acquire one additional share at $2.50 per share and one option to acquire one
additional share at $3.50 per share. Each option will be exercisable from the
effective date of this registration statement until 5:00 p.m. Eastern Standard
Time on December 31, 2001. There is no minimum number of units that we must
sell. This Offering will terminate when all of the units are sold. We will not
place any proceeds from the sale of the units in escrow.
We are offering these securities through our officers and directors without
the use of a professional underwriter. We will not pay commissions on stock
sales. In the event we elect to engage a professional underwriter, we will file
an amendment to this prospectus disclosing terms of the engagement. Our common
stock and the units are not listed on any national securities exchange or the
NASDAQ stock market.
THESE SECURITIES INVOLVE A HIGH DEGREE OF RISK AND SHOULD BE CONSIDERED ONLY BY
PERSONS WHO CAN AFFORD THE LOSS OF THEIR ENTIRE INVESTMENT. SEE "RISK FACTORS"
BEGINNING ON PAGE 10.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
Offering Information
TOTAL PER UNIT
Initial public offering price
$800,000 $1.00
Underwriting discounts/commissions $0.00
$0.00
Estimated offering expenses (1) $0.00
$0.00
Net offering proceeds to us $1.00
$800,000 (1) (2)(3)
(1)Does not include offering costs, including filing, printing, legal,
accounting, transfer agent and escrow agent fees estimated at $50,000. We will
pay these expenses.
(2)Does not include any proceeds that we may receive on the exercise of the
options.
(3)Does not include the 4,733,535 shares being offered by selling
shareholders. We will not receive any proceeds from the sale of the shares by
the selling shareholders.
The information in this prospectus is not complete and may be changed. We may
not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an offer
to sell these securities and it is not soliciting an offer to sell these
securities in any state where the offer or sale is not permitted.
The date of this preliminary prospectus is February 7, 2001
TABLE OF CONTENTS
Part I - Prospectus Information Page
1. Front Cover Page of Prospectus..........................................1
2. Inside Front and Outside Back Cover Pages of Prospectus.................2
3. Summary Information.....................................................8
Risk Factors...........................................................10
Our Poor Financial Condition Raises Substantial Doubt About Our Ability
To Continue As A Going Concern; You Will Be Unable To Determine Whether
We Will Ever Become Profitable. ......................................10
Because We Are A Development Stage Company, In The Internet Grocery
Retailing Business With No Operating History, Revenues Or Profits, We
Are Subject To Development Stage Risks; You Will Have No Ability To
Evaluate Our Business.................................................10
Because Our Business Will Continually Involve Substantial Operating
Expenses, We Anticipate Losses For The Foreseeable Future. ...........11
Because We Have No Management Experience In Operating On-Line
Grocery Stores, We May Be Unable To Develop Profitable Operations. ...12
If We Are Unable To Develop Material Contacts With Internet, Computer,
Technical Of Marketing Professionals Our Website And Other Aspects Of
Our Internet Operations Will Be Negatively Impacted...................12
If We Fail To Develop A High Quality Service, We Will Be Unable To
Develop Repeat Business. .............................................12
If We Are Unsuccessful In Addressing Various Factors Relevant To Our
Business, Our Operating May Negatively Impact Market Acceptance Of Our
Business Model. ......................................................12
We Have Substantial Near-Term And Long-Term Capital Needs; If We Are
Unable To Obtain Needed Additional Funding, Our Website Operations And
Marketing Abilities Will Be Negatively Impacted. .....................13
If We Are Unable To Develop Long-Term Contracts With Our Product
Vendors, We Will Be Unable To Ensure The Availability Of A Product
Inventory.............................................................13
We Will Rely On Third Parties; If We Fail To Establish Or Maintain
These Relationships, Our Operations Will Be Negatively Impacted.......13
We Are Subject To Risks Associated With Foreign Currency Transactions
That May Negatively Impact Upon Our Financial Condition. .............14
The Offering Price Of Our Securities Is Arbitrary And There Is No Public
Market For Our Common Stock; You May Be Unable To Sell Your
Securities. ..........................................................14
We May Be Subject To Possible Infringement Claims That Could Lead To
Damage Awards Against Us Or Limitations On Our Business...............15
We Are Currently Unable To Promote Our Brand; We May Never Develop
The Ability To Promote Our Brand......................................15
If We Are Unable To Retain And Attract Qualified Personnel, Our Business
Could Suffer..........................................................15
If We Lose Any Of Our Key Personnel, Our Business May Be Impaired.....15
Issuance Of Preferred Stock Could Depress The Market Value Of Your
Investment And Have A Potential Anti-Takeover Effect..................16
Because Our Principal Stockholders Have Voting Control, They Control
Our Corporate Affairs; You May Have Little Or No Participation In Our
Corporate Affairs. ..................................................16
We Have Possible Conflicts Of Interest With Our Officers And Directors
That May Negatively Impact Upon Our Corporate Affairs.................16
We Have Never Paid Dividends; You May Never Receive A Dividend From
Your Investment.......................................................16
If We Fail To Address Internet Commerce Security Risks, Our Operations
And Brand Name Will Be Negatively Impacted. ..........................17
We Face The Possibility Of System Failure That Subjects Us To Risk Of
Data Loss, Cessation Of Service And Failure To Keep Our Client
Information Confidential.............................................17
If We Are Unsuccessful In Securing A Lease On A Warehouse Facility
To Serve As Our Fulfillment Center, Our Operations Will Never
Expand................................................................18
Because Our Stock Is Considered A Penny Stock Any Investment In Our
Stock Is Considered To Be A High-Risk Investment And Is Subject To
Restrictions On Marketability........................................ 18
If Our Common Stock Becomes Tradable On The Over-The-Counter
Bulletin Board, Sales Of Our Common Stock By Selling Shareholders
Could Affect The Level Of Public Interest In Our Common Stock As
Well As Its Value.....................................................19
4. Use of Proceeds........................................................19
5. Determination of Offering Price........................................20
6. Dilution...............................................................20
7. Selling Security Holders...............................................21
8. Plan of Distribution...................................................22
9. Legal Proceedings......................................................24
10. Directors, Executive Officers, Promoters and Control Management .......24
11. Security Ownership of Certain Beneficial Owners and Management.........26
12. Description of Securities .............................................27
13. Experts ...............................................................28
14. Disclosure of Commission Position on Indemnification
for Securities Act Liabilities.........................................28
15. Organization Within Last Five Years....................................28
16. Description of Business................................................29
17. Management's Discussion and Analysis or Plan of Operation..............35
18. Description of Property ...............................................42
19. Certain Relationships and Related Transactions.........................43
20. Market for Common Equity and Related Stockholder Matters...............43
21. Executive Compensation ................................................45
22. Financial Statements ...................................................x
23. Changes in and Disagreements with Accountants on Accounting
and Financial Disclosure................................................x
Part II - Information Not Required in Prospectus
24. Indemnification.........................................................x
25. Other Expenses of Issuance and Distribution.............................x
26. Recent Sales of Unregistered Securities.................................x
27. Exhibits................................................................x
28. Undertakings............................................................x
ITEM 3. SUMMARY INFORMATION AND RISK FACTORS
PROSPECTUS SUMMARY
This prospectus contains statements about our future business operations
that involve risks and uncertainties. Our actual results could differ
significantly from our anticipated future operations, as a result of many
factors, including those identified in the "Risk Factors" section beginning on
page 10. The prospectus contains a summary of all material terms of this
prospectus. You should carefully read all information in the prospectus,
including the financial statements and their explanatory notes, beginning on
page 29 prior to making an investment decision.
OUR COMPANY
We were incorporated in Florida on May 22, 2000. We are a development stage
company that plans to develop an on-line grocery store. We plan to conduct our
operations through our wholly owned subsidiary, LazyGrocer.com Corp., which was
incorporated in Canada on May 12, 1999. Our principal executive offices are
currently located at 41 York Street, 3RD Floor, Ottawa, Ontario K1N 5S7 Canada.
Our telephone number is (613) 241-6195. We are authorized to issue 50,000,000
shares of common stock and 20,000,000 shares of preferred stock. As of February
7, 2000, there were 18,338,001 shares of our common stock issued and
outstanding, and 0 shares of our preferred stock issued and outstanding.
OUR BUSINESS
We currently have no operations, revenues, or profits. We plan to establish
an online grocery store in the Ottawa-Hull region of Canada. We plan to offer a
full selection of competitively priced products, including fresh produce and
meats, as well as non-food items that are typically sold by conventional grocery
providers. Our plans include development of a website at www.lazygrocer.com that
is not now operational. We now offer website visitors the opportunity to
register their email address to receive notification when our website is open
for business. We expect that our website will be operational by approximately
February 2001. Initially, we plan to obtain our products by ordering items from
suppliers according to each customer order followed by our customer delivery.
Later we plan to establish an inventory of our products that will be maintained
in a leased warehouse. There are no assurances that we will have sufficient
funds to develop our business plans or otherwise be successful in our planned
operations of an on-line grocery store.
THE OFFERING
As of February 7, 2001, we had 18,338,001 shares of our common stock
outstanding and 0 shares of preferred stock outstanding. This offering is
comprised of 4,733,535 shares of our common stock offered by selling security
holders and 800,000 Units that we are offering at a price of $1.00 per Unit.
Each Unit consists of one share of our common stock, one option to purchase one
share of our common stock at an exercise price of $2.50 and one option to
purchase one share of our common stock at an exercise price of $3.50. Each
option will be exercisable until 5:00 p.m. Eastern Standard Time on December 31,
2001.
Although we have agreed to pay all offering expenses, we will not receive any
proceeds from the sale by the selling security holders of their securities. We
anticipate offering expenses of approximately $50,000. Because we have no
revenue sources, we may borrow funds from our management or others to pay the
offering expenses.
FINANCIAL SUMMARY INFORMATION.
You should also read carefully all the information in this prospectus,
including the financial statements and their explanatory notes.
[Enlarge/Download Table]
----------------------------------------------------- ---------------------------------------------------
----------------------------------------------------- ------------------------- -------------------------
June 1, 1999
Statement of Operations Five months ended (Inception) to
October 31, 2000 October 31, 2000
----------------------------------------------------- ------------------------- -------------------------
----------------------------------------------------- ------------------------- -------------------------
Net Sales $0 $0
----------------------------------------------------- ------------------------- -------------------------
----------------------------------------------------- ------------------------- -------------------------
Cost of Sales $0 $0
----------------------------------------------------- ------------------------- -------------------------
----------------------------------------------------- ------------------------- -------------------------
Gross profit $0 $0
----------------------------------------------------- ------------------------- -------------------------
----------------------------------------------------- ------------------------- -------------------------
Operating expenses $11,488 $1,714,107
----------------------------------------------------- ------------------------- -------------------------
----------------------------------------------------- ------------------------- -------------------------
Income (loss) from operations $0 $0
----------------------------------------------------- ------------------------- -------------------------
----------------------------------------------------- ------------------------- -------------------------
Other expense, net $ 0 $0
----------------------------------------------------- ------------------------- -------------------------
----------------------------------------------------- ------------------------- -------------------------
Net income (loss) $11,488 $1,714,107
----------------------------------------------------- ------------------------- -------------------------
----------------------------------------------------- ------------------------- -------------------------
Net income per common share $-0.10
----------------------------------------------------- ------------------------- -------------------------
----------------------------------------------------- ---------------------------------------------------
Balance Sheet Five months ended October 31, 2000
----------------------------------------------------- ---------------------------------------------------
----------------------------------------------------- ---------------------------------------------------
Total current assets $16,686
----------------------------------------------------- ---------------------------------------------------
----------------------------------------------------- ---------------------------------------------------
Other assets $3,913
----------------------------------------------------- ---------------------------------------------------
----------------------------------------------------- ---------------------------------------------------
Total Assets $20,599
----------------------------------------------------- ---------------------------------------------------
----------------------------------------------------- ---------------------------------------------------
Current liabilities $150,710
----------------------------------------------------- ---------------------------------------------------
----------------------------------------------------- ---------------------------------------------------
Due to stockholder/officer $28,672
----------------------------------------------------- ---------------------------------------------------
----------------------------------------------------- ---------------------------------------------------
Due to related party $ 0
----------------------------------------------------- ---------------------------------------------------
----------------------------------------------------- ---------------------------------------------------
Total liabilities $150,710
----------------------------------------------------- ---------------------------------------------------
----------------------------------------------------- ---------------------------------------------------
Stockholders equity (deficiency) $ 130,111
----------------------------------------------------- ---------------------------------------------------
----------------------------------------------------- ---------------------------------------------------
Total liabilities and stockholder equity $20,599
----------------------------------------------------- ---------------------------------------------------
RISK FACTORS
An investment in the shares of common stock offered in this prospectus
involves a high degree of risk. We cannot assure that we will ever generate
revenues, develop operations, or make a profit.
OUR POOR FINANCIAL CONDITION RAISES SUBSTANTIAL DOUBT ABOUT OUR ABILITY TO
CONTINUE AS A GOING CONCERN; YOU WILL BE UNABLE TO DETERMINE WHETHER WE WILL
EVER BECOME PROFITABLE.
We are a development stage company that has not generated any revenue to
date. Because we have losses and a net capital deficiency, there is substantial
doubt regarding our ability to continue as a going concern. During the period
from our inception to October 31, 2000, we incurred net losses of $1,714,107. We
had cash of only $1,402 as of October 31, 2000, which is inadequate to conduct
our operations over the next twelve months. Our ability to continue as a going
concern is dependent upon our ability to raise funds through this offering and
subsequent financing efforts; however, there are no assurances that we will be
successful in these efforts. We anticipate that we will experience continued
losses even if we obtain additional funding. Our poor financial condition could
adversely affect our ability to hire and train employees, develop our website,
or purchase equipment and inventory. Because we are currently operating at a
substantial loss with limited operating history and no reliable revenue source,
an investor cannot determine if we will ever become profitable.
BECAUSE WE ARE A DEVELOPMENT STAGE COMPANY IN THE INTERNET GROCERY RETAILING
BUSINESS WITH NO OPERATING HISTORY, REVENUES OR PROFITS, WE ARE SUBJECT TO
DEVELOPMENT STAGE RISKS; YOU WILL HAVE NO ABILITY TO EVALUATE OUR BUSINESS.
We are a development stage company with no operating history upon which you
can evaluate our business. We have not devoted a substantial amount of resources
to develop our Internet grocery business. Our proposed operations will be
subject to inordinate expenses and the risk that we may not be able to transform
a market traditionally characterized by retail outlets into a similar market
available on the Internet. Our lack of any operating history makes it difficult
to evaluate our financial results and future plans. You must consider the risks
involved with our development stage status and the rapidly evolving e-commerce
market, including:
o Whether we are able to develop, maintain, and increase awareness of
our web site;
o Whether we are able to attract and retain customers;
o Whether we are able to develop an effective customer transaction
processing component to our website;
o Whether we are able to compete effectively;
o Whether we are able to develop relationships with third party vendors
and distributors for obtaining, storing and distributing our products;
o Whether we are able to establish and develop relationships with other
entities that market other goods and services to our potential
customers in order to obtain advertising revenues;
o An evolving and unpredictable business model;
o Whether the public will accept our business concept of an on-line
grocery store that involves an impersonal service with the public;
o Operational delays;
o Inordinate development expenses;
o Limited operating history; and
o Limited management resources
Because significant up-front advertising, sales, and other expenses are
required to develop our web site, we anticipate that we may incur losses until
revenues are sufficient to cover our operating costs. Future losses are likely
before our operations will become profitable. As a result of our limited
operating history, you will have no basis upon which to accurately forecast our:
o Total revenues;
o Gross and operating margins;
o Real estate costs;
o Labor costs; and
o Average order size.
Accordingly, you have no basis upon which to judge our ability to develop our
Internet based grocery business or our future growth.
BECAUSE OUR BUSINESS WILL CONTINUALLY INVOLVE SUBSTANTIAL OPERATING EXPENSES, WE
ANTICIPATE LOSSES FOR THE FORESEEABLE FUTURE
We incurred net losses of $ 1,714,107 from our inception of June 1, 1999 to
October 31, 2000. Our business is costly and will require substantial additional
capital to fund our operations and planned expansion. We will incur substantial
costs in the following areas:
o Equipping new customer fulfillment centers for each geographic market;.
o Developing and marketing our brand in each geographic market;
o Continued investment in our computer hardware and software development;
o Developing our website;
o Marketing activities and advertising efforts;
o Establishing customer fulfillment centers;
o Increasing our general and administrative functions to support our
developing operations;
o Developing enhanced technologies and features to improve our website,
once developed;
o Developing our software technology; and
o Developing customer support and administrative infrastructure.
Because we anticipate significant increases in our operating expenses, we
cannot predict whether we will be profitable. There is no assurance that we will
have sufficient financial resources or be able to attract sufficient capital to
meet our business needs. We may incur future losses as we attempt to develop and
increase our business. Our expenditures may exceed our revenues and we may be
unable to implement our business plan. Depending upon the extent that our
development costs outpace our revenues, our losses may accumulate more rapidly.
In addition, we may find that our development efforts are more expensive than we
currently anticipate. There is no assurance that we will have sufficient
financial resources or be able to attract sufficient capital to meet our
business needs.
BECAUSE WE HAVE NO MANAGEMENT EXPERIENCE IN OPERATING ON-LINE GROCERY STORES, WE
MAY BE UNABLE TO DEVELOP PROFITABLE OPERATIONS.
Our management has no experience operating or managing customer fulfillment
centers. Our management has no experience retailing merchandise over the
Internet. Unless management has the financial resources to hire qualified
Internet consultants, as well as marketing and merchandising professionals, the
presentation, marketing, transactional, and technical aspects of our website
and business may suffer.
IF WE ARE UNABLE TO DEVELOP MATERIAL CONTRACTS WITH INTERNET, COMPUTER,
TECHNICAL OR MARKETING PROFESSIONALS OUR WEBSITE AND OTHER ASPECTS OF OUR
INTERNET OPERATIONS WILL BE NEGATIVELY IMPACTED.
We have no contracts or prospective contracts that will assist us in
developing our website. We have no contracts with Internet, computer, technical
or marketing professionals which would assist us in the development, selection
and presentation our website. In addition, we have no contracts or prospective
contracts with other websites that would provide visitation links to our
website. We have not developed a plan to obtain any of the contracts we need,
and we may encounter difficulties in securing these agreements. If we fail to
develop material contracts with the consultants or professionals our website
and other aspects of our internet operations will be negatively impacted.
IF WE FAIL TO DEVELOP A HIGH QUALITY SERVICE, WE WILL BE UNABLE TO DEVELOP
REPEAT BUSINESS.
The online retail industry is subject to high rates of customer attrition.
Our business will be dependent upon repeat customers shopping at our on-line
grocery. If we fail to provide high quality service, we may experience decreases
in repeat customer orders, leading to a decline in customer retention rates.
Should these conditions occur, our revenues may decline and we may never become
profitable.
IF WE ARE UNSUCCESSFUL IN ADDRESSING VARIOUS FACTORS RELEVANT TO OUR BUSINESS,
THE IMPLEMENTATION OF OUR BUSINESS MODEL WILL BE NEGATIVELY IMPACTED.
Our operating results will depend on various factors, some of which are
outside our control. These factors include:
o Our ability to manage our products and maintain gross product profit
margins;
o Our ability to attract new customers at a steady rate and maintain
customer satisfaction;
o The availability and pricing of our products obtained from vendors;
o Acceptance of the Internet as a medium of commerce;
o Whether consumers have confidence in entering into Internet transactions
involving grocery purchases;
o The timing, cost and availability of our advertising on other websites;
o The announcement or introduction of new types of products, service
offerings or customer services by us and our competitors;
o Our ability to retain credit card processors;
o The level of our product returns; and
o Economic conditions specific to Internet commerce.
The occurrence of any of these factors, or our inability to address these
factors, may negatively impact the implementation of our business model.
WE HAVE SUBSTANTIAL NEAR TERM AND LONG-TERM CAPITAL NEEDS; IF WE ARE UNABLE TO
OBTAIN NEEDED ADDITIONAL FUNDING, OUR WEBSITE OPERATIONS AND MARKETING ABILITIES
WILL BE NEGATIVELY IMPACTED.
We will require additional funding over the next twelve months to develop
our business. Our capital requirements will depend on many factors including the
timing of the development of our website. If additional funds are raised through
the issuance of equity securities, the percentage ownership of our current and
future shareholders will be reduced. Moreover, those equity securities may have
rights, preferences, and privileges senior to those of the holders of our common
stock. There can be no assurance that additional capital will be available on
terms favorable to us or to our shareholders. In addition, we have no credit
facility or other committed sources of capital. We may be unable to establish
credit arrangements on satisfactory terms. If capital resources are insufficient
to meet our future capital requirements, we may have to raise additional funds
to continue development of our business. There can be no assurance that such
funds will be available on favorable terms, if at all. Our cash requirements may
vary substantially depending on our rate of development, research results,
competitive and technological advances and other factors. If adequate funds are
not available, we may be required to curtail operations or to obtain funds by
entering into collaboration agreements on unattractive terms. Our inability to
raise capital would impair the technical and presentational aspects of our
website and our marketing abilities.
IF WE ARE UNABLE TO DEVELOP LONG-TERM CONTRACTS WITH OUR PRODUCT VENDORS,
WE WILL BE UNABLE TO ENSURE THE AVAILABILITY OF A PRODUCT INCENTORY.
We have no long-term contracts or arrangements with vendors that guarantee
the availability of products. There can be no assurance that we will be able to
establish vendor relationships that ensure products will be available for sale
on our website. We also rely on vendors shipping procedures. If we are unable to
develop and maintain satisfactory relationships with vendors on acceptable
commercial terms and/or if the quality of service provided by such vendors falls
below a satisfactory standard or if the level of returns exceeds expectations,
the maintenance or our product inventory will be materially
adversely affected.
WE WILL RELY ON THIRD PARTIES; IF WE FAIL TO ESTABLISH OR MAINTAIN THESE
RELATIONSHIPS, OUR OPERATIONS WILL BE NEGATIVELY IMPACTED.
We expect that our operations will depend on a number of third parties over
which we will have limited control. We do not plan to own an Internet gateway,
but instead we will rely on an Internet Service Provider to host our website. We
may experience interruptions in our website connection and our
telecommunications access due to our reliance upon third party Internet service
providers. There are no assurances that we will be able to contract with third
parties on terms favorable to us. In addition, there are no assurances that
third party contractors will accept our proposed terms. We anticipate that we
will use software that is dependent on operating system, database and server
software developed and produced by and licensed by third parties. We may
discover errors and defects in this third party software and have to rely on the
third parties to correct these errors and defects in a timely manner.
Accordingly, continuous or prolonged interruptions in our website connection or
in our telecommunications access would have an adverse effect upon consumer
perception of our ability to provide our services in a timely and efficient
manner, which would negatively affect our business, results of operations and
financial condition. We also plan to use a major Canadian bank as our credit
card processor that is a member in good standing of Visa Canada or MasterCard
Canada.
If we are unable to develop and maintain satisfactory relationships with
these third parties on favorable commercial terms, or the quality of products
and services provided by such third parties falls below a satisfactory standard,
our operations will be materially adversely affected.
WE ARE SUBJECT TO RISKS ASSOCIATED WITH FOREIGN CURRENCY TRANSACTIONS THAT MAY
NEGATIVELY IMPACT UPON OUR FINANCIAL CONDITION
Although our primary operations will be located in Canada, we plan to
conduct financial transactions in the United States as well as in other
international markets. At this time, the Canadian Dollar is weak against other
currencies, including the United States Dollar. As a result, we will be exposed
to foreign currency exchange rate risks because many of our transactions will be
denominated in varying currencies. If the Canadian Dollar continues to be weak,
or becomes weaker against other foreign currencies, our payments for goods and
services purchased outside of Canada will be greater in dollar terms.
THE OFFERING PRICE OF OUR SECURITIES IS ARBITRARY AND THERE IS NO PUBLIC MARKET
FOR OUR COMMON STOCK; YOU MAY BE UNABLE TO SELL YOUR SECURITIES.
There is not, and never has been a market for our securities. We have
arbitrarily established the offering price for our securities. The offering
price does not bear any relationship to our assets, income or net worth, and
should not be considered as an indication of the actual value of our securities.
No assurance can be given that a public trading market for our securities will
ever develop, or that the securities will be able to be resold at the
offering price, or at any price, in the future.
There is no established public trading market or market maker for our
securities. There can be no assurance that a market for our common stock will be
established or that, if established, a market will be sustained. Therefore, if
you purchase our securities you may be unable to sell them. Accordingly, you
should be able to bear the financial risk of losing your entire investment.
A market maker sponsoring a company's securities is required to obtain a
listing of the securities on any of the public trading markets, including the
Over the Counter Bulletin Board. If we are unable to obtain a market maker for
our securities, we will be unable to develop a trading market for our common
stock. We may be unable to locate a market maker that will agree to sponsor our
securities. Even if we do locate a market maker, there is no assurance that our
securities will be able to meet the requirements for a quotation or that the
securities will be accepted for listing on the Over the Counter Bulletin Board.
We intend to apply for listing of the Securities on the Over the Counter
Bulletin Board, but there can be no assurance that we will be able to obtain
this listing. Over the Counter Bulletin Board securities are not listed and
traded on the floor of an organized national or regional stock exchange.
Instead, Over the Counter Bulletin Board securities transactions are conducted
through a telephone and computer network connecting dealers in stocks.
Over-the-counter stocks are traditionally smaller companies that do not meet the
financial and other listing requirements of a regional or national stock
exchange. Accordingly, you may be unable to sell your securities.
WE MAY BE SUBJECT TO POSSIBLE INFRINGEMENT CLAIMS THAT COULD LEAD TO DAMAGE
AWARDS AGAINST US OR LIMITATIONS ON OUR BUSINESS.
We do not hold any patents nor have we filed any patent applications for
any proprietary software or other technology we plan to use in our business
model. Rather, we have entered into several software licensing and/or software
maintenance agreements with third parties. Although we are not aware of any
patents that have been issued which would interfere with, inhibit or prevent our
proposed business model, such patents could exist, or applications for such
patents could be pending. It is possible that one or more of our competitors has
a patent pending or has filed applications for patents relating to the sale of
groceries over the Internet. In such an event, we may be subject to a lawsuit by
the patent owner, or their assignee, seeking potential damages and/or
injunctions preventing us from conducting our contemplated business methods or
business model.
WE ARE CURRENTLY UNABLE TO PROMOTE OUR BRAND; WE MAY NEVER DEVELOP THE ABILITY
TO PROMOTE OUR BRAND.
Our ability to compete with companies with greater resources will depend on
our ability to promote our brand name. Presently, we have no patents,
copyrights, trademarks and/or service marks that would protect our brand name or
our proprietary information, nor do we have any current plans to file
applications for such patents, copyrights, trademarks or service marks. Our
inability to promote and/or protect our brand name may have an adverse effect on
our ability to compete effectively in the Internet grocery industry.
IF WE ARE UNABLE TO RETAIN AND ATTRACT QUALIFIED PERSONNEL, OUR BUSINESS COULD
SUFFER.
Our success depends on our ability to identify, attract, hire, train,
retain and motivate highly skilled technical, managerial, sales and marketing,
and customer service personnel. Competition for such employees is intense,
especially in the e-commerce sector. We may be unable to successfully attract,
assimilate or retain sufficiently qualified personnel. If we fail to retain and
attract qualified and competent technical professionals, our website will suffer
in its technical, search, and presentational abilities. If we fail to retain and
attract the necessary managerial, sales, marketing and customer service
personnel, we will not develop a sufficient customer base to adequately sustain
our operations.
IF WE LOSE ANY OF OUR KEY PERSONNEL, OUR BUSINESS WOULD BE IMPAIRED
Our success is heavily dependent upon the continued and active
participation of Pierre Bosse, Ben Bjarnason and Steve Biro. The loss of any of
our key personnel could have a material adverse effect upon the development of
our business. We do not maintain "key person" life insurance on any of our key
personnel. There can be no assurance that we will be able to recruit or retain
qualified personnel should it be necessary to do so.
ISSUANCE OF PREFERRED STOCK COULD DEPRESS THE MARKET VALUE OF YOUR INVESTMENT
AND HAVE A POTENTIAL ANTI-TAKEOVER EFFECT.
We have 20,000,000 authorized shares of preferred stock that may be issued
by action of our Board of Directors. We have not yet issued any shares of
preferred stock. The Board may designate voting control, liquidation, dividend
and other preferred rights to preferred stock holders. Our Board of Directors'
authority to issue preferred stock without shareholder consent may have a
depressive effect on the market value of our common stock. The issuance of
preferred stock, under various circumstances, could have the effect of delaying
or preventing a change in our control or other take-over attempt and could
adversely materially affect the rights of holders of our shares of common stock.
BECAUSE OUR PRINCIPAL STOCKHOLDERS HAVE VOTING CONTROL, THEY CONTROL OUR
CORPORATE AFFAIRS; YOU MAY HAVE LITTLE OR NO PARTICIPATION IN OUR CORPORATE
AFFAIRS.
Prior to this offering, our officers and directors collectively owned
approximately 49% and the remaining stockholders own approximately 51% of our
common stock. Consequently, our officers and directors will have significant
influence over all corporate matters requiring shareholder approval, but not
requiring approval of the minority stockholders. The principal stockholders will
be able to effect the election of the Board of Directors and most corporate
matters requiring stockholder approval by written consent, without the need for
a duly noticed and duly-held meeting of stockholders. Accordingly, you will have
little or no participation in our corporate affairs.
WE HAVE POSSIBLE CONFLICTS OF INTEREST WITH OUR OFFICERS AND DIRECTORS THAT MAY
NEGATIVELY IMPACT UPON OUR CORPORATE AFFAIRS.
Our officers and directors may become involved in other business activities
in the future. If a specific business opportunity becomes available, our
officers and directors may face a conflict in selecting between us and their
other business interests. We have not formulated a policy for the resolution of
such conflicts. We have entered into transactions and may do so in the future
with our officers, directors, and shareholders. These transactions were not
negotiated at "arms length" and there may be conflicts with respect to the
interpretation and enforcement of any agreement between us and our officers,
directors and shareholders. Any dispute with respect to the interpretation or
enforcement of agreements between us and our officers, directors and
shareholders may not be resolved in our favor. There can be no assurance that
future transactions or arrangements with our officers, directors and
shareholders will be advantageous to us, that conflicts of interest will not
arise with respect thereto, or that if conflicts do arise, that they will be
resolved in a manner favorable to our company.
WE HAVE NEVER PAID DIVIDENDS; YOU MAY NEVER RECEIVE A DIVIDEND FROM YOUR
INVESTMENT.
As a new corporation, we have never declared or paid dividends, nor do we
anticipate the declaration or payments of any dividends in the near future. We
intend to retain earnings, if any, to finance the development and expansion of
our business. Future dividend policy will be at the discretion of the Board of
Directors and dependent upon our financial condition, future earnings, if any,
our capital requirements, and agreements we may enter into containing loan
covenants. Therefore, there is no assurance that cash dividends of any kind will
ever be paid.
IF WE FAIL TO ADDRESS INTERNET COMMERCE SECURITY RISKS, OUR OPERATIONS AND BRAND
NAME WILL BE NEGATIVELY IMPACTED.
We will be subject to many risks associated with the collection and
processing of information over our website. A significant barrier to entry in
the area of electronic commerce and communications is the secure transmission of
confidential information over public networks. We will rely on encryption and
authentication technology licensed from third parties to provide the security
and authentication necessary to affect secure transmission of confidential
information. There can be no assurance that advances in computer capabilities,
new discoveries in the field of cryptography or other events or developments
will prevent a compromise or breach of the algorithms we may use to protect
customer transaction data. If any such compromise of our security were to occur,
we may be subject to liability by our users or others.
A party who is able to circumvent our security measures could misappropriate
proprietary or customer information. We may be required to expend significant
capital and other resources to protect against security breaches or to alleviate
problems caused by breaches. Concerns over the security of Internet transactions
and the privacy of users may also inhibit the growth of the Internet generally,
and the World Wide Web in particular, especially as a means of conducting
commercial transactions. To the extent that our future activities or those of
third party contractors whom we may use involve the storage and transmission of
proprietary information, such as credit card numbers, security breaches could
expose us to a risk of loss or litigation. There can be no assurance that we
will be able to implement security measures that will prevent security breaches.
Any security breach and subsequent results of such breach could have a material
impact on our operations, reputation and brand name establishment.
WE FACE THE POSSIBILITY OF SYSTEM FAILURE THAT SUBJECTS US TO RISK OF DATA LOSS,
CESSATION OF SERVICE AND FAILURE TO KEEP OUR CLIENT INFORMATION CONFIDENTIAL.
With our services being delivered over the Internet, we may be affected by
system failure or software malfunction. Lapses in our website operation could
hinder our ability to broaden our customer base, once developed, and to
positively promote our brand name. Our success will also be dependent upon our
communications software and hardware. Our systems will be vulnerable to damage
from earthquake, fire, floods, power loss, telecommunications failures,
break-ins and similar events. Failure of information delivery can occur due to
e-mail system, hosting site and/or local system failures. We have no insurance
coverage on our property or business interruption insurance coverage and we do
not intend to obtain this coverage in the near future. We may be vulnerable to
computer viruses, physical or electronic break-ins, deliberate attempts by third
parties to exceed the capacity of our systems leading to interruptions, delays,
loss of data or cessation of service. The occurrence of any of these events
could cause our current and prospective users to question our ability to keep
their information confidential.
IF WE ARE UNSUCCESSFUL IN SECURING A LEASE ON A WAREHOUSE FACILITY TO SERVE AS
OUR FULFILLMENT CENTER, OUR OPERATIONS WILL NEVER EXPAND.
We are attempting to secure a two year lease of a warehouse facility that
will serve as our fulfillment center. We project a monthly lease cost of $16,000
for a projected two year lease term. There are no assurances that we will be
successful in:
o Negotiating a lease over the next twelve months;
o Negotiating a lease that contains favorable terms to us; and
o Paying our projected annual lease payments of approximately $384,000.
In addition, there are no assurances that a potential lessor of warehouse
facilities will enter into a lease with us because of our poor financial
condition. If we are unable to secure a warehouse lease, we will be unable to
maintain an inventory of our products that will be available to the public on
an expanded basis. Nor will our operations ever expand.
BECAUSE OUR STOCK IS CONSIDERED A PENNY STOCK ANY INVESTMENT IN OUR STOCK IS
CONSIDERED TO BE A HIGH-RISK INVESTMENT AND IS SUBJECT TO RESTRICTIONS ON
MARKETABILITY
Our Shares are "penny stocks" within the definition of that term as
contained in the Securities Exchange Act of 1934, generally defined as equity
securities with a price of less than $5.00. Our shares will then be subject to
rules that impose sales practice and disclosure requirements on broker-dealers
who engage in certain transactions involving a penny stock.
Under the penny stock regulations, a broker-dealer selling a penny stock to
anyone other than an established customer or "accredited investor" 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. Generally, an individual with a net worth in
excess of $1,000,000 or annual income exceeding $200,000 individually or
$300,000 together with his or her spouse is considered an accredited investor.
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 market. A
broker-dealer is also required to disclose commissions payable to the
broker-dealer and its registered representatives and current bid and offer
quotations for the securities. In addition a broker-dealer is required to send
monthly statements disclosing recent price information with respect to the penny
stock held in a customer's account, the account's value and information
regarding the limited market in penny stocks. Because of these regulations,
broker-dealers may encounter difficulties in their attempt to sell our shares,
which may affect the ability of selling security holders or other holders to
sell their shares in the secondary market. In addition, the penny stock rules
generally require that prior to a transaction in a penny stock, the
broker-dealer make a special written determination that the penny stock is a
suitable investment for the purchaser and receive the purchaser's written
agreement to the transaction.
For a stock that becomes subject to the penny stock rules, these disclosure
requirements may have the effect of reducing the level of trading activity in
the secondary market. These additional sales practice and disclosure
requirements could impede the sale of our securities, if our securities become
publicly traded. In addition, the liquidity for our securities may be adversely
affected, with an attendant adverse effect on the price of our securities. Our
shares may someday be subject to such penny stock rules and our shareholders
will, in all likelihood, find it difficult to sell their securities.
IF OUR COMMON STOCK BECOMES TRADABLE ON THE OVER-THE-COUNTER BULLETIN BOARD,
SALES OF OUR COMMON STOCK BY SELLING SHAREHOLDERS COULD AFFECT THE LEVEL OF
PUBLIC INTEREST IN OUR COMMON STOCK AS WELL AS ITS VALUE
By our filing of this registration statement, we are attempting to register
4,733,535 shares of our common stock held by the selling shareholders. If this
registration statement is declared effective, the selling shareholders will be
able to sell their shares at negotiated prices. If our common stock becomes
tradable on the Over the Counter Bulletin Board, prospective purchasers will be
able to purchase our common stock in the open market. In addition, our selling
shareholders will be able to sell their shares on the open market. If a
substantial amount of these shares are sold, especially in the case of the nine
selling shareholders that have shareholdings in excess of 100,000 shares being
registered in this registration statement total 5,451,094 shares, there
may be downward price pressures on our common stock price, causing the market
price of our common stock to decrease in value. In addition, this selling
activity could:
o Decrease the level of public interest in our common stock;
o Inhibit buying activity that might otherwise help support the market price
of our common stock; and
o Prevent possible upward price movements in our common stock.
ITEM 4. USE OF PROCEEDS
We will not receive any proceeds from the sale of the securities by selling
shareholders. We anticipate net proceeds of $800,000 from our sale of the Units
in this offering, assuming the offering is fully subscribed and before deducting
offering expenses. This amount does not include any funds we may receive from
the exercise of the options underlying the Units. We plan to use the proceeds
from this offering, in the priority listed below:
Amount Priority
Development and Licensing Costs $300,000 High
Leasing Cost of Our Warehouse Fulfillment Center $110,000 Medium
Marketing Costs $50,000 Low
Salaries $256,500 High
Inventory $50,000 Medium
Debt Servicing $28,700 Medium
Insurance coverage for warehouse facility $4,800 Medium
The $28,700 attributable to debt servicing is a projected cost and refers
to the balance due towards an interest-free loan disbursed to us by our previous
Interim Chief Financial Officer, Nadir Patel. We have reduced the amount due on
the original loan of $42,000 through payments of $13,300.
ITEM 5. DETERMINATION OF OFFERING PRICE
There is no established public market for the securities covered by this
prospectus. We have arbitrarily determined the offering price of the units and
the exercise price of the options. Among the factors considered in this
determination were estimates of our potential for success, our online grocery
business model, our limited financial resources, an assessment of our
management, the amount of equity desired to be retained by our present
shareholders, and the general condition of the securities and overall market at
the time of the offering. However, the offering price of the units and exercise
price of the options does not bear any relationship to our assets, income, or
net worth. In addition, the offering price of the units and exercise price of
the options should not be considered an indication of the actual value of the
securities. Such price is subject to change as a result of market conditions and
other factors, and no assurance can be given that the securities can be resold
at the offering price, or at any price, in the future. There is no assurance
that the share price of our common stock will ever exceed or equal the exercise
price of the options.
ITEM 6. DILUTION
Investor's purchasing the Units in this offering can expect a substantial
dilution of their investment immediately. We discuss the dilution an investor
would experience upon purchasing a Unit in the offering below. Consolidated net
tangible book value is the net tangible assets of the company, which is equated
by subtracting total liabilities and intangible assets from total assets. As of
the date hereof, there are 18,338,001 shares of the our common stock
outstanding.
Our unaudited consolidated net tangible book value as of October 31, 2000,
was a deficit of approximately $130,111. Considering the 18,338,001 shares
outstanding as of the date of this offering, and in the event that all 800,000
shares offered are sold without paying commission, the pro forma consolidated
net tangible book value of our common stock as of the closing would be increased
by approximately $ .04 per share. These figures include the deduction of all of
the actual expenses of the offering through October 31, 2000, including all
printing, legal, accounting, blue sky and other fees. The pro forma consolidated
net tangible book value of each share will have increased by approximately $.04
per share to the present stockholders, and decreased by approximately $.96 per
share to the investors in the offering if all 800,000 Units are sold.
Such dilution may change based upon the exercise of the options offered as a
part of the units offered hereby. Dilution represents the difference between the
offering prices of the shares offered and the pro forma consolidated net
tangible book value per share immediately after the completion of this offering.
Dilution arises mainly from our arbitrary decision as to the offering price per
share. Dilution of the value of the shares purchased by the investors in this
offering will also be due, in part, to the lower book value of the Shares
presently outstanding, and, in part, to the expense incurred in connection with
this offering.
ITEM 7. SELLING SECURITY HOLDERS
The selling security holders named below are selling the securities that are
owned by them. However, any or all of the securities listed below may be
retained by any of the selling security holders, and therefore, no accurate
forecast can be made as to the number of securities that will be held by the
selling security holders upon termination of this offering. We believe that the
selling security holders listed in the table have sole voting and investment
powers with respect to the securities indicated. We will not receive any
proceeds from the sale of the securities by the selling security holders.
Shareholders who hold a position or office with us or who have held such a
position in the past are noted in the table.
[Enlarge/Download Table]
----------------------- ------------------------- ----------------- --------------- ---------------- -----------------
Name Relationship Amount Amount to be Amount Percentage Owned
Beneficially
Beneficially Owned
Owned Prior to After Before/After
With Issuer Offering Registered Offering(1) Offering(2)
----------------------- ------------------------- ----------------- --------------- ---------------- -----------------
----------------------- ------------------------- ----------------- --------------- ---------------- -----------------
Pierre Bosse Officer/Director 3,008,694 265,577 2,743,117 16.4% / 14.3%
----------------------- ------------------------- ----------------- --------------- ---------------- -----------------
----------------------- ------------------------- ----------------- --------------- ---------------- -----------------
Steve Biro Chief Information 3,008,694 265,577 2,743,117 16.4% / 14.3%
Officer
----------------------- ------------------------- ----------------- --------------- ---------------- -----------------
----------------------- ------------------------- ----------------- --------------- ---------------- -----------------
Ben Bjarnason Officer/Director 3,008,694 265,577 2,743,117 16.4% / 14.3%
----------------------- ------------------------- ----------------- --------------- ---------------- -----------------
----------------------- ------------------------- ----------------- --------------- ---------------- -----------------
Peter Kissick Attorney 443,624 40,000 403,624 2.4% / 2.1%
----------------------- ------------------------- ----------------- --------------- ---------------- -----------------
----------------------- ------------------------- ----------------- --------------- ---------------- -----------------
Nadir Patel Former Director 1,353,043 116,568 1,236,475 7.3% / 6.5%
----------------------- ------------------------- ----------------- --------------- ---------------- -----------------
----------------------- ------------------------- ----------------- --------------- ---------------- -----------------
Douglas Reid 443,624 40,000 403,624 2.4% / 2.1%
----------------------- ------------------------- ----------------- --------------- ---------------- -----------------
----------------------- ------------------------- ----------------- --------------- ---------------- -----------------
Lee Bjarnason 100,000 9,000 91,000 Less than 1%
----------------------- ------------------------- ----------------- --------------- ---------------- -----------------
----------------------- ------------------------- ----------------- --------------- ---------------- -----------------
Harold Bjarnason 100,000 9,000 91,000 Less than 1%
----------------------- ------------------------- ----------------- --------------- ---------------- -----------------
----------------------- ------------------------- ----------------- --------------- ---------------- -----------------
Brenda Bjarnason 100,000 9,000 91,000 Less than 1%
----------------------- ------------------------- ----------------- --------------- ---------------- -----------------
----------------------- ------------------------- ----------------- --------------- ---------------- -----------------
Christiane Bosse 100,000 9,000 91,000 Less than 1%
----------------------- ------------------------- ----------------- --------------- ---------------- -----------------
----------------------- ------------------------- ----------------- --------------- ---------------- -----------------
Michele Bosse 100,000 9,000 91,000 Less than 1%
----------------------- ------------------------- ----------------- --------------- ---------------- -----------------
----------------------- ------------------------- ----------------- --------------- ---------------- -----------------
Myriam Bosse 100,000 9,000 91,000 Less than 1%
----------------------- ------------------------- ----------------- --------------- ---------------- -----------------
----------------------- ------------------------- ----------------- --------------- ---------------- -----------------
Law Office of Brenda Law Firm 100,000 100,000 0 Less than 1%
Lee Hamilton, P.A.
----------------------- ------------------------- ----------------- --------------- ---------------- -----------------
----------------------- ------------------------- ----------------- --------------- ---------------- -----------------
Shannon McKee 100,000 9,000 91,000 Less than 1%
----------------------- ------------------------- ----------------- --------------- ---------------- -----------------
----------------------- ------------------------- ----------------- --------------- ---------------- -----------------
Melissa McKinnon 99,998 9,000 90,998 Less than 1%
----------------------- ------------------------- ----------------- --------------- ---------------- -----------------
----------------------- ------------------------- ----------------- --------------- ---------------- -----------------
Clarence Bosse 100,000 9,000 91,000 Less than 1%
----------------------- ------------------------- ----------------- --------------- ---------------- -----------------
----------------------- ------------------------- ----------------- --------------- ---------------- -----------------
Anne-Marie 100,000 91,000 Less than 1%
Desjardins-Bosse 9,000
----------------------- ------------------------- ----------------- --------------- ---------------- -----------------
----------------------- ------------------------- ----------------- --------------- ---------------- -----------------
Karim Rahemtulla Consultant 887,559 887,559 0 Less than 1%
----------------------- ------------------------- ----------------- --------------- ---------------- -----------------
----------------------- ------------------------- ----------------- --------------- ---------------- -----------------
International
Corporate Structures, Consultant 1,775,118 1,775,118 0 Less than 1%
Inc.
----------------------- ------------------------- ----------------- --------------- ---------------- -----------------
----------------------- ------------------------- ----------------- --------------- ---------------- -----------------
Len Aronoff Consultant 887,559 887,559 0 Less than 1%
----------------------- ------------------------- ----------------- --------------- ---------------- -----------------
----------------------- ------------------------- ----------------- --------------- ---------------- -----------------
----------------------- ------------------------- ----------------- --------------- ---------------- -----------------
----------------------- ------------------------- ----------------- --------------- ---------------- -----------------
TOTAL 20 Selling Security 15,916,607 4,733,535 11,183,072 91.2%/61.3
%
Holders
----------------------- ------------------------- ----------------- --------------- ---------------- -----------------
(1) Assumes all registered selling shareholder shares will be sold.
(2) Assumes a full subscription of shares in this offering.
We intend to seek qualification for sale of the securities in those states
where the securities will be offered. That qualification is necessary to resell
the securities in the public market and the securities may be resold only if the
securities are qualified for sale or are exempt from qualification in the states
in which the selling shareholders or proposed purchasers reside. There is no
assurance that the states in which we seek qualification will approve of the
security resales.
ITEM 8. PLAN OF DISTRIBUTION
We are offering Units, each consisting of one share of common stock, one
option to purchase one share of common stock at $2.50 per share and one option
to purchase one share of common stock at $3.50 per share. Each option is
exercisable for one additional share of common stock at any time from the
effective date of this registration statement and before 5:00 p.m. Eastern
Standard Time on December 31 , 2001 at an exercise price of $2.50 and $3.50 per
share.
The securities are not being sold through any underwriters, and we cannot
assure that any or all of the securities offered hereby will be sold. Payment
for the Units offered should be made to "LazyGrocer.com Inc." We may have
multiple closings of the Units offered. We may, in our discretion, reject an
offer to buy from any prospective investor or limit the number of shares to be
purchased by any investor. We reserve the right to amend, modify or withdraw all
or a portion of the offering. There is no minimum investment.
We may agree to pay registered securities brokers that assist in placing the
Units a commission of up to 12% of the proceeds raised in the offering. We are
responsible for all fees, expenses and disbursements in connection with this
offering.
The securities offered by this prospectus may also be sold by the selling
security holders or by those to whom such shares are transferred. We are not
aware of any underwriting arrangements that have been entered into by the
selling security holders. The distribution of the securities by the selling
security holders may be effected in one or more transactions that may take place
in the over-the-counter market, including broker's transactions, privately
negotiated transactions or through sales to one or more dealers acting as
principals in the resale of these securities.
Any of the selling security holders, acting alone or in concert with one
another, may be considered statutory underwriters under the Securities Act of
1933, if they are directly or indirectly conducting an illegal distribution of
the securities on behalf of our corporation. For instance, an illegal
distribution may occur if any of the selling security holders were to provide us
with cash proceeds from their sales of the securities. If any of the selling
shareholders are determined to be underwriters, they may be liable for
securities violations in connection with any material misrepresentations or
omissions made in this prospectus.
In addition, the selling security holders and any brokers and dealers through
whom sales of the securities are made may be deemed to be "underwriters" within
the meaning of the Securities Act of 1933, and the commissions or discounts and
other compensation paid to such persons may be regarded as underwriters'
compensation.
The selling security holders may pledge all or a portion of the securities
owned as collateral for margin accounts or in loan transactions, and the
securities may be resold pursuant to the terms of such pledges, accounts or loan
transactions. Upon default by such selling security holders, the pledgee in such
loan transaction would have the same rights of sale as the selling security
holders under this prospectus. The selling security holders also may enter into
exchange traded listed option transactions which require the delivery of the
securities listed under this prospectus. The selling security holders may also
transfer securities owned in other ways not involving market makers or
established trading markets, including directly by gift, distribution, or other
transfer without consideration, and upon any such transfer the transferee would
have the same rights of sale as such selling security holders under this
prospectus.
In addition to, and without limiting, the foregoing, each of the selling
security holders and any other person participating in a distribution will be
affected by the applicable provisions of the Securities Exchange Act of 1934,
including, without limitation, Regulation M, which may limit the timing of
purchases and sales of any of the securities by the selling security holders or
any such other person.
There can be no assurances that the selling security holders will sell any or
all of the securities. In order to comply with state securities laws, if
applicable, the securities will be sold in jurisdictions only through registered
or licensed brokers or dealers. In various states, the securities may not be
sold unless these securities have been registered or qualified for sale in such
state or an exemption from registration or qualification is available and is
complied with. Under applicable rules and regulations of the Securities Exchange
Act of 1934, as amended, any person engaged in a distribution of the securities
may not simultaneously engage in market-making activities in these securities
for a period of one or five business days prior to the commencement of such
distribution.
All of the foregoing may affect the marketability of the securities.
Pursuant to the various agreements we have with the selling security holders, we
will pay all the fees and expenses incident to the registration of the
securities, other than the selling security holders' pro rata share of
underwriting discounts and commissions, if any, which is to be paid by the
selling security holders.
ITEM 9. LEGAL PROCEEDINGS
In June of 2000, we authorized the issuance of 3,895,902 shares of our
common stock to Gavin MacFarlane for his founder services and future services to
be rendered to us, including serving on our Board of Directors. On August 15,
2000, Mr. MacFarlane resigned from his position as Chief Operating Officer, and
on November 7, 2000, he resigned from our Board of Directors. Following these
events, we cancelled the issuance of shares to him. As of the date of this
registration statement, we have not reached an agreement with Mr. MacFarlane for
the return of the share certificate previously issued to him. We do not believe
that any claim asserted by Mr. MacFarlane would have any merit. In the event
that any legal action is brought by Mr. MacFarlane against us, we will
vigorously defend any such claim.
We are not a party to any legal proceeding. Other than the above, we are not
aware of any pending or threatened legal proceedings against us.
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS, AND CONTROL PERSONS
DIRECTORS AND EXECUTIVE OFFICERS
The names, ages and positions of our directors and executive officers are as
follows:
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Name Age Position
------------------------------------------- --------- ---------------------------------------------------------------
------------------------------------------- --------- ---------------------------------------------------------------
Pierre Bosse 25 President, Chief Executive Officer and Director
------------------------------------------- --------- ---------------------------------------------------------------
------------------------------------------- --------- ---------------------------------------------------------------
Ben Bjarnason 25 Chief Operating Officer and Director
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Our Bylaws provide that we may have the minimum number of directors
allowable by law. Florida Corporate Law provides that a corporation must have at
least 1 director. Vacancies may be filled by a majority vote of the remaining
directors then in office.
Each director will serve until our next annual shareholder meeting to be
held at an undetermined date or until a successor is elected who accepts the
position. Directors are elected for one-year terms. Our officers will be elected
by the Board of Directors at their first meeting following the annual
shareholder meeting each year. None of our directors hold any directorship in
any reporting Companies.
PIERRE BOSSE has served as our President and Chief Executive Officer since
our inception. Mr. Bosse has also been a Director since our inception, and his
current term as a Director will continue until the next annual shareholder's
meeting. Immediately prior to becoming employed with us, from 1995 to 1999, Mr.
Bosse attended the Queen's University in Kingston, Ontario where he received a
Bachelors Degree in Commerce in 1999. Mr. Bosse has no employment experience.
BEN BJARNASON has served as our Vice President of Marketing since our
inception, and was appointed as our Chief Operating Officer on August 1, 2000.
Mr. Bjarnason has also been a Director since our inception, and his current term
as a Director will continue until the next annual shareholder's meeting.
Immediately prior to becoming employed with us, from 1995 to 1999, Mr. Bjarnason
attended the University of British Columbia in Vancouver, British Columbia where
he received a Bachelor of Arts degree in English in 1999. Mr. Bjarnason has no
employment experience.
SIGNIFICANT EMPLOYEES
STEVE BIRO has served as our Chief Information Officer since August 1, 2000.
From 1994 to 1999, Mr. Biro owned and operated Global X-Change, a private
e-commerce Internet solutions based company that employed over 30 professionals
before it was acquired by another private company. As our Chief Information
Officer, Mr. Biro is responsible for the implementation and ongoing development
of technologies used to support our operations.
We have no other significant employees.
FAMILY RELATIONSHIPS
There are no family relationships among our officers, directors, or persons
nominated for such positions.
LEGAL PROCEEDINGS.
None of our directors or executive officers has been a director or executive
officer of any business, which has filed a bankruptcy petition, or had a
bankruptcy petition filed against it. No director or executive officer of ours
has been convicted of a criminal offence or is the subject of a pending criminal
proceeding. No director or executive officer of ours has been the subject of any
order, judgment or decree of any court permanently or temporally enjoining,
barring, suspending or otherwise limiting his involvement in any type of
business, securities or banking activities
None of our directors or officers has been found by a court to have violated
a federal or state securities or commodities law.
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following tables set forth the ownership, as of January 26, 2001, of our
common stock (a) by each person known by us to be the beneficial owner of more
than 5% of our outstanding common stock, and (b) by each of our directors, by
all executive officers and our directors as a group. To the best of our
knowledge, all persons named have sole voting and investment power with respect
to such shares, except as otherwise noted.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
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-------------------- --------------------------------------------- ------------------- ---------------- --------------
Title of Class Name and Address # of Shares Nature of Current %
Ownership Owned
-------------------- --------------------------------------------- ------------------- ---------------- --------------
-------------------- --------------------------------------------- ------------------- ---------------- --------------
Common Pierre Bosse 3,008,694 Direct 16.4%
302-88 Murray St.
Ottawa, Ontario, Canada K1N
-------------------- --------------------------------------------- ------------------- ---------------- --------------
-------------------- --------------------------------------------- ------------------- ---------------- --------------
Common Steve Biro 3,008,694 Direct 16.4%
20 Basford Cres.
Stittsville, Ontario, Canada K2S
-------------------- --------------------------------------------- ------------------- ---------------- --------------
-------------------- --------------------------------------------- ------------------- ---------------- --------------
Common Nadir Patel 1,353,043 Direct 7.3%
312 First Ave. Apt. 3
Ottawa, Ontario, Canada K1R
-------------------- --------------------------------------------- ------------------- ---------------- --------------
-------------------- --------------------------------------------- ------------------- ---------------- --------------
Common Ben Bjarnason 3,008,694 Direct 16.4%
2302-470 Laurier Ave. W.
Ottawa, Ontario, Canada K1R
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-------------------- --------------------------------------------- ------------------- ---------------- --------------
Common International Corporate Structures, Inc. 1,775,118 Direct 9.6%
94 Cumberland Street
Toronto, Ontario, Canada M5R
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-------------------- --------------------------------------------- ------------------- ---------------- --------------
Total 12,154,243 Direct 66.1%
-------------------- --------------------------------------------- ------------------- ---------------- --------------
SECURITY OWNERSHIP OF OFFICERS AND DIRECTORS
--------------------- ---------------------------------------- ------------------- ------------------- ---------------
Title of Class Name and Address # of Shares Nature of Current %
Ownership Owned
--------------------- ---------------------------------------- ------------------- ------------------- ---------------
--------------------- ---------------------------------------- ------------------- ------------------- ---------------
Common Pierre Bosse 3,008,694 Direct 16.4
302-88 Murray St.
Ottawa, Ontario, Canada K1N
--------------------- ---------------------------------------- ------------------- ------------------- ---------------
--------------------- ---------------------------------------- ------------------- ------------------- ---------------
Common Ben Bjarnason 3,008,694 Direct 16.4
2302-470 Laurier Ave. W.
Ottawa, Ontario, Canada K1R
--------------------- ---------------------------------------- ------------------- ------------------- ---------------
--------------------- ---------------------------------------- ------------------- ------------------- ---------------
Common All Officers and Directors as a Group 6,017,388 Direct 32.8
(2)
--------------------- ---------------------------------------- ------------------- ------------------- ---------------
There are currently no arrangements which would result in a change in our
control.
ITEM 12. DESCRIPTION OF SECURITIES
GENERAL
The following summary is qualified in its entirety by reference to the
Company's Articles of Incorporation and by-laws, as amended, copies of which
have been filed as exhibits to the registration statement of which this
prospectus is a part.
COMMON STOCK.
We are authorized to issue 50,000,000 shares of common stock with a par
value of $.001 per share. As of February 7, 2001, there were 18,338,001 common
shares issued and outstanding. All shares of common stock outstanding are
validly issued, fully paid and non-assessable.
VOTING RIGHTS.
Each share of common stock entitles the holder to one vote, either in
person or by proxy, at meetings of shareholders. The holders are not permitted
to vote their shares cumulatively. Accordingly, the holders of common stock
holding, in the aggregate, more than fifty percent of the total voting rights
can elect all of our directors and, in such event, the holders of the remaining
minority shares will not be able to elect any directors. The vote of the holders
of a majority of the issued and outstanding shares of common stock entitled to
vote thereon is sufficient to authorize, affirm, ratify or consent to such act
or action, except as otherwise provided by law.
DIVIDEND POLICY
If our Board of Directors declares dividends, all Holders of our common stock
are entitled to participate proportionally out of the funds legally available
therefrom. These dividends may be paid in cash, property or additional shares of
common stock. We have not paid any dividends since our inception and presently
anticipate that all earnings, if any, will be retained for development of our
business. Any future dividends will be at the discretion of our Board of
Directors and will depend upon, among other things, our future earnings,
operating and financial condition, capital requirements, and other factors.
Therefore, there can be no assurance that any dividends on the common stock will
be paid in the future.
MISCELLANEOUS RIGHTS AND PROVISIONS
Holders of our common stock have no preemptive or other subscription rights,
conversion rights, redemption or sinking fund provisions. In the event of our
dissolution, whether voluntary or involuntary, each share of our common stock is
entitled to share proportionally in any assets available for distribution to
holders of our equity after satisfaction of all liabilities and payment of the
applicable liquidation preference of any outstanding shares of preferred stock.
PREFERRED STOCK
We are authorized to issue 20,000,000 shares of preferred stock with a par
value of $.001 per share in five (5) series. As of the date of this registration
statement, there were no preferred shares issued and outstanding. Our Board of
Directors is authorized to establish the number of shares to be included in each
series and the preferences, rights of conversion, limitations and other relative
rights of each series of our Preferred Stock.
OPTIONS
Each Unit we are offering contains two options: one option to acquire one
share of common stock at $2.50 per share and one option to acquire one share of
common stock at $3.50 per share. Each option, whether exercisable at $2.50 or
$3.50 per share, will be exercisable from the effective date of this
registration statement until 5:00 p.m. eastern standard time on December 31,
2001.
DEBT SECURITIES.
We have not issued any debt securities.
CERTAIN BYLAW PROVISIONS
Our Articles of Incorporation or by-laws do not contain provisions that would
delay, defer or prevent a change in our control. There are no other material
rights of our common or preferred shareholders not included herein.
ITEM 13. INTEREST OF EXPERTS AND COUNSEL
Our Financial Statements for the period from inception to May 31, 2000, have
been included in this prospectus in reliance upon Salberg and Company, P.A.,
independent Certified Public Accountants, as experts in accounting and auditing.
ITEM 14. DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION FOR SECURITIES ACT
LIABILITIES
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to our directors, officers and controlling persons, we
have been advised that in the opinion of the SEC, such indemnification is
against public policy as expressed in the Securities Act of 1933 and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities, other than the payment by us of expenses incurred or paid by
our directors, officers or controlling persons in the successful defense of any
action, suit or proceedings, is asserted by such director, officer, or
controlling person in connection with any securities being registered, we will,
unless in the opinion of our counsel the matter has been settled by controlling
precedent, submit to court of appropriate jurisdiction the question whether such
indemnification by us is against public policy as expressed in the Securities
Act of 1933 and will be governed by the final adjudication of such issues.
ITEM 15. ORGANIZATION WITHIN LAST FIVE YEARS
On January 2, 2001, we issued the following shares for services rendered to us:
1. 3,008,694 shares of our common stock to our president and director, Pierre
Bosse;
2. 3,008,694 shares of our common stock to our Chief Information Officer,
Steven Biro;
3. 3,008,694 shares of our common stock to our director and Chief
Operating Officer, Ben Bjarnason;
4. 1,353,043 shares of our common stock to Nadir Patel who was previously
our Chief Financial Officer; and
5. 1,775,118 shares of our common stock to International Corporate
Structures, Inc. for investor relations services to be rendered to us.
Other than the above transactions, we have not entered into any material
transactions with any director, executive officer, nominee for director,
beneficial owner of five percent or more of our common stock, or family members
of such persons. We are not a subsidiary of any company.
ITEM 16. DESCRIPTION OF BUSINESS
BUSINESS DEVELOPMENT
We were incorporated in the State of Florida on May 22, 2000 to become the
parent corporation of LazyGrocer.Com Corp, our wholly owned subsidiary.
Lazygrocer.com Corp was incorporated as a Canadian Corporation under the Canada
Business Corporation Act on May 12, 1999.
On May 25, 2000, LazyGrocer.Com Corp, by corporate resolution, issued its one
authorized share of common stock to us. We subscribed for this share at a price
of $1.00. As such, Lazygrocer.com corp. became our wholly owned subsidiary.
We have never been the subject of any bankruptcy or receivership. We have
had no material reclassification, merger, consolidation, or purchase or sale of
a significant amount of assets not in the ordinary course of business.
OUR BUSINESS
We have operated as a development stage company since our inception. We have
devoted all our efforts to:
o Financial planning;
o Raising capital;
o Research and development;
o Website development; and
o Attempting to locate a warehouse facility.
On June 28, 2000, we entered into a Software License Agreement with Descartes
Systems Group, Inc. whereby Descartes granted a license to us to use Descartes'
software for our internal data processing only. We will use the Descartes
software for purposes of optimizing both delivery routes and scheduling.
PRINCIPAL PRODUCTS AND SERVICES.
We currently do not have any products or offer any services. We are in the
process of developing a website for an online grocery store that services the
Ottawa-Hull region of Canada. Our website is not yet operational. We have not
generated any revenues to date. We expect that our website will be operational
by the beginning of February 2001. We now offer website visitors the opportunity
to register their email address to receive notification when our website is open
for business. Our website is located at www.lazygrocer.com.
DISTRIBUTION
Delivery
We plan to offer same-day delivery service with up to twelve delivery time
options, depending on location of the consumer. In addition, we plan to offer
shipping incentives based on the pre-tax total of each order. For example,
orders above $67.00 will receive free delivery; orders between $23.00 and $67.00
will be charged $3.30 for delivery, and orders under $23.00 will be charged a
$5.97 fee for delivery. Delivery charges will be subject to change based on
competitiveness and profitability. Delivery personnel will be instructed to
decline tips. Deliveries will be carried out by our employees using company
owned or leased vehicles.
Customer Pick-up
We are considering the option of allowing customers to pick-up groceries
directly from our yet to be leased fulfillment center. This service would be
targeted to individuals who cannot guarantee they will be home at a pre-set
time. The groceries would be guaranteed ready for pickup at the warehouse within
a requested time frame. Customers, however, will not be permitted to shop at the
warehouse at any time.
We now have no agreements with any distributors for the sale and/or
delivery of our groceries. Our website is not operational, and we have not
entered into any agreements for the development of our website.
NEW PRODUCTS OR SERVICES.
We currently have no new products or services announced to the public.
COMPETITIVE BUSINESS CONDITIONS.
The grocery industry in Canada is characterized by a small number of major
chains, most of which are affiliated under an umbrella of corporations such as
Loblaw Companies Limited. A few stores are centrally owned, but many are
franchised to individuals. Franchisees choose to operate under the established
labels to increase purchasing power, to enjoy the benefits of joint marketing,
and to carry private labels.
INDUSTRY DATA
According to the 1999 census, as referenced in Statistics Canada, the
Ottawa-Hull area has a population of approximately 1,065,000 people who comprise
410,000 households with an average weekly food expenditure of $129 per
household. According to the 1996 census, as published by Statistics Canada, the
majority of weekly purchases are made at supermarkets, with expenditures of $81
per household. Accordingly, the total weekly supermarket sales in the
Ottawa-Hull region are approximately $22,133,000 with annual sales of
approximately $1,153,000,000. The total operating revenue in 1999 from 19,000
supermarket and grocery store locations in Canada was $36,267,000,000. On
average, each household spends 9.5% of its disposable income in food stores. The
average gross profit for supermarkets is between 21-23% and the gross profit for
local grocery stores is 25%.
Competition From Traditional Grocery Stores
Traditional sources of groceries include conventional chain supermarkets,
independent grocery stores, and convenience stores, each of which is described
below.
1. Conventional Chain Supermarket
Conventional Chain Supermarkets generate over half of the grocery sales in
Canada, with the remaining providers being independent groceries and
convenience stores. With floor space varying from 12,000 square feet to
over 60,000 square feet, Conventional Chain Supermarkets offer a wide
selection of goods ranging from specialty foods to house wares. Their
location is typically based on the surrounding population and competition.
The majority of stores compete on price and selection. As a result, most
successful stores offer thousands of products and generate very low profit
margins. According to the 1995 edition of Wholesaling and Retailing in
Canada, as published by Statistics Canada, the national profit margin
average for Conventional Chain Supermarkets is 0.83% of sales revenues,
which indicates that high volume sales are a critical component of
operations among the Conventional Chain Supermarkets.
These stores can be described as destination vendors, as opposed to walk-in
vendors, because customers will make it a point to shop there. Many of
these stores offer delivery to customers who request it, provided they come
to the store and fill the order themselves. Conventional Chain Supermarkets
offer a traditional means of purchasing groceries with a cost and selection
advantage due to their purchasing power. Typically, Conventional Chain
Supermarkets carry very high overhead expenses and do not offer walk-in
convenience to the consumer.
2. Independent Grocery Stores
Independent grocery stores tend to be smaller than Conventional Chain
Supermarkets, with 3,000 to 12,000 square feet of selling space. Those
Independent Grocery Stores in prime locations typically sell at higher
mark-ups. While the industry standard gross margin for a Conventional Chain
Supermarket is 20-23%, Independent Grocery Store's gross margins can go as
high as 40%. Independent Grocery Stores are often a hybrid between
destination and walk-in vendors, making sidewalk traffic and parking space
issues of crucial importance. Independent Grocery Stores generally have a
more limited product selection than Conventional Chain Supermarkets due to
space restrictions. Independent Grocery Store's pricing is generally
competitive and a reasonable selection of products is offered to the
consumer. Despite the reduction in size from a Conventional Chain
Supermarket, Independent Grocery Stores are rarely more convenient than the
Conventional Chain Supermarkets and generally do not enjoy the purchasing
power of the larger stores.
3. Convenience Stores
Convenience stores are generally smaller in size than other food purveyors
and offer limited quantities of grocery goods. Large portions of revenues
in convenience stores are generated from non-grocery items such as
magazines or snack foods. The mark-ups in this segment of the industry are
also much higher than that of conventional chain stores. Impulse purchases
are key to these stores, making product displays very important. These
stores are conveniently located and offer a consumer a short wait, but
their selection is limited and prices are not as competitive as in larger
stores.
Competition From Online Grocery Models
The emerging concept of web-based retailing is manifesting itself in the food
retail industry under different models. The following models describe some
emerging online grocery models that will compete with our business.
1. Web Presence Initiative by a Conventional Chain Supermarket
Most Conventional Chain Supermarkets offer delivery services for the
elderly or others who may need help. For the most part, customers must come
to the store, shop the order personally, and then arrange for delivery. In
some cases, the customer is allowed to phone or fax the order in from home.
Some of these supermarkets are currently testing the Internet as a medium
for serving customers. For example, IGA's Cybermarche in the Province of
Quebec caters to anyone who has access to the Internet and lives relatively
close to one of Quebec's 240 IGA supermarkets. Although Conventional Chain
Supermarket Online Stores will enjoy well-established names and locations,
there is a risk that they may cannibalize their own sales at a higher
fulfillment expense.
2. Delivery Service Model
This model mimics the Conventional Chain Supermarket initiative by
providing a virtual store, while creating value through the performance of
the shopping and delivery components. An example of this model is
Telegrocer.com, which receives orders by phone, fax, or the Internet and
charges a fee for its services. Such operations have the possibility of
creating alliances with local supermarkets wherein they receive a portion
of the gross profit from the sales generated.
3. Tiered Online Grocery Provider
The Tiered Online Grocery Provider model permits a customer to order
groceries over the Internet from an independent grocery store and have them
delivered. Currently, The PeachTree is Canada's leading web-based grocery
alternative. In this model, the provider acts as a co-coordinator between
the customer, a local independent grocery store, and an order fulfillment
service. By outsourcing the shopping and delivery services, the company is
able to streamline both its cost structure and operations. Revenue in this
model is derived from a percentage of sales, delivery charges, website
advertising and sales of consumer information.
4. Warehouse Model
The Warehouse Model is the online grocery model that we will primarily use
for our business. The Warehouse-based grocery provider is the most
comprehensive model in that it operates and coordinates all its services
out of a fully integrated warehouse. This model can adopt just-in-time
inventory management resulting in faster turnover rates, guaranteed product
freshness, and reduced spoilage and overall costs. It also allows
management control over cost structure, enabling the company to react
quickly when competition increases. Although this model offers a
streamlined approach and control, the start-up costs are very high to
implement.
5. National Delivery Model
Similar to the Web-based Grocery Provider, this model operates out of a
warehouse. The primary difference is that it operates out of one warehouse
for the entire service area. Groceries are delivered via national courier.
Because of the one to three day delivery-time, only non-perishable food
items are offered. The cost of delivery is a function of order size and the
distance from the central warehouse. This model gives a company access to
very large markets without concerns of spoilage and multiple-location
overhead. Selection limited to non-perishables and delivery costs are very
high with no same day service offering.
SOURCES AND AVAILABILITY OF RAW MATERIALS.
As of the date of this prospectus, we have no raw materials or suppliers. We
have no agreements with any vendors to supply our inventory of grocery items.
CUSTOMER BASE
As of the date of this prospectus, we have no customers. We do not plan on
being dependent upon one single or just a few customers, however, there are no
assurances that we will not become so dependent.
INTELLECTUAL PROPERTY
At present, we do not have any patents, trademarks, licenses, franchises,
concessions, royalty agreements, labor contracts or other proprietary interests.
We have registered the domain names lazygrocer.com with Network Solutions, Inc.
Although we plan to seek trademark registration of "lazygrocer,"
"lazygrocer.com" and "dotcompoints" in Canada, we have no such registration at
this time. Until such time as we secure trademark registration of our
proprietary names, we intend to rely upon common law trademark protection.
GOVERNMENT REGULATION ISSUES.
We are not currently affected by direct government regulation, generally,
or by laws or regulations directly applicable to access to or commerce on the
Internet. However, due to increasing usage of the Internet, a number of laws and
regulations may be adopted relating to the Internet, covering user privacy,
pricing, and characteristics and quality of products and services. Furthermore,
the growth and development for Internet commerce may prompt more stringent
consumer protection laws imposing additional burdens on those companies
conducting business over the Internet. The adoption of any additional laws or
regulations may decrease the growth of the Internet, which, in turn, could
decrease the demand for Internet services and increase the cost of doing
business on the Internet. These factors may have an adverse effect on our
business, results of operations and financial condition.
Moreover, the interpretation of sales tax, libel and personal privacy laws
applied to Internet commerce is uncertain and unresolved. We may be required to
qualify to do business as a foreign corporation in each such state or foreign
country. Our failure to qualify as a foreign corporation in a jurisdiction where
we are required to do so could subject us to taxes and penalties. Any such
existing or new legislation or regulation, including state sales tax, or the
application of laws or regulations from jurisdictions whose laws do not
currently apply to our business, could have a material adverse effect on our
business, results of operations and financial condition.
RESEARCH AND DEVELOPMENT.
We began our research and development on our plan of business in 1999. Our
research and development has consisted of developing our business plan and
studying our competition and other comparative business models. We have spent
no direct funds on research and development because our president has devoted
his services for these purposes. For the next twelve months we anticipate
expenditures in the technology development of our website and related databases.
Further, in order to provide customers with up-to-date selections of food or
household products, we will promote comment and suggestion pages on our website
for new ideas. We also expect to conduct market research and on-going focus
groups to discover new conveniences that may be offered to the customer.
ENVIRONMENTAL LAW COMPLIANCE.
Our planned on-line grocery business will not involve the discharge of
environmental pollutants. Therefore, to the extent that environmental compliance
may be necessary, we do not anticipate any significant compliance expense.
EMPLOYEES.
As of the date hereof, we have four total employees consisting of three
full-time employees and one part-time employee. Our success depends upon our
ability to attract, train and retain qualified personnel. None of our employees
are represented by a union. We believe we have a good relationship with our
employees.
REPORTS TO SECURITY HOLDERS.
After the effective date of this document, we will be a reporting company
under the requirements of the Securities Exchange Act of 1934 and will file
quarterly, annual and other reports with the Securities and Exchange Commission.
Our annual report will contain the required audited financial statements. We are
not required to deliver an annual report to security holders and will not
voluntarily deliver a copy of the annual report to the security holders. The
reports and other information filed by us will be available for inspection and
copying at the public reference facilities of the Commission, 450 Fifth Street,
N.W., Washington, D.C. 20549.
Copies of such material may be obtained by mail from the Public Reference
Section of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, at
prescribed rates. Information on the operation of the Public Reference Room may
be obtained by calling the SEC at 1-800-SEC-0330. In addition, the Commission
maintains a World Wide Website on the Internet at http://www.sec.gov that
contains reports, proxy and information statements and other information
regarding registrants that file electronically with the Commission.
ITEM 17. PLAN OF OPERATIONS
The discussion contained in this prospectus contains "forward-looking
statements" that involve risk and uncertainties. These statements may be
identified by the use of terminology such as "believes", "expects", "may",
"will", or "should", or "anticipates", or expressing this terminology negatively
or similar expressions or by discussions of strategy. The cautionary statements
made in this prospectus should be read as being applicable to all related
forward-looking statements wherever they appear in this prospectus. Our actual
results could differ materially from those discussed in this prospectus.
Important factors that could cause or contribute to such differences include
those discussed under the caption entitled "risk factors," as well as those
discussed elsewhere in this prospectus.
We are a development stage company without operations or revenues. We plan
to develop an online network of grocery stores for the Ottawa-Hull region of
Canada, offering a bilingual virtual store in the languages of English and
French. We plan to offer a full selection of competitively priced products,
including fresh produce and meats, as well as non-food items that are typically
sold by conventional grocery providers. We plan to operate a fulfillment center
and deliver our products through company owned or leased vehicles. However, at
this time, we have no fulfillment centers established or vehicles available for
our use. During the next twelve months, we plan to make our website operational,
obtain inventory, hire additional employees and open a fulfillment center. As of
October 31, 2000, we had cash of $ 1,402. Currently, we are unable to
satisfy our forecasted cash requirements of $800,000 for the next twelve months
without the successful completion of this securities offering or the raising of
additional funds from some other source. We also anticipate the need for
significant research and development expenditures during the next twelve months
and beyond. The information technology development of the website and related
databases are long-term projects, which will help to make our system larger,
faster, more robust, and easier to navigate.
WE HAVE UNDERTAKEN THE FOLLOWING REGARDING OUR PLAN OF OPERATIONS:
INITIATED DEVELOPMENT OF OUR WEBSITE
We have started two website initiatives. The first initiative is our
marketing website that we initiated on July 1, 2000. The intent of the marketing
website is to inform the Ottawa- Hull community of our existence, provide a
brief introduction of our intended service, and to solicit advanced registration
to our service. The second initiative, our prototype site, was developed in July
2000. The prototype, which is a non-functional web-store, has been used to
demonstrate the features we intend to build into our actual web-store.
FORMULATED OUR BUSINESS PLAN
We wrote our business plan over a twelve-month period from May 1999 to May
2000. Our business plan outlines the processes by which we will operate and
market ourselves to the general public and contains, among other discussions,
the following:
o The reasons for our decision to start our operations in the Ottawa Hull
area;
o The grocery industry's current regional and national climate;
o Analysis and comparison of our business model against other existing models
in the on-line and off-line grocery industry;
o Our projected warehouse layout that is designed for efficient order
picking;
o Our projected use of product labeling designed to minimize delivery
errors;
o Our warehouse size and location requirements; and
o Our delivery vehicle capacity and fleet size requirements.
RAISED CAPITAL FOR OUR OPERATIONS
Funding of our operations has consisted of the following:
o Our founders, Pierre Bosse and Gavin MacFarlane provided our initial
funding of $20,000 as a loan to the company;
o Nadir Patel, previously one of our directors, provided a $42,000 interest
fee loan to us. $13,330 has been paid back; and
o In June 2000, we completed a private placement for $200,000.
HIRING OF KEY PERSONNEL
On August 1, 2000 we hired Stephen Biro as our Chief Information Officer to
lead our efforts in the development and acquisition of our technologies. As
Chief Information Officer, Mr. Biro is responsible for all matters related to
our use of technology. This includes overseeing the development and integration
of our various software components, as well as the selection of the software and
hardware we will be acquiring.
In addition, we have interviewed a number of candidates for the position of
our Chief Financial Officer. The Chief Financial Officer will be responsible for
overseeing our financial affairs and ensuring the integrity of our financial
transactions.
DEVELOPMENT OF OUR COMPUTER SOFTWARE
During August 2000 we began the design of our computer software. We have
identified three major components of the software:
o Online ordering;
o Warehouse management; and
o Delivery Routing
Specialized vendors provide the Warehouse Management System and Delivery
Routing system. The Online Ordering component, which lets customers browse thru,
and purchase from our inventory, is being developed by ourselves and by a vendor
with whom we are still negotiating. Most of the communication design needed to
integrate our software components is complete.
OUR SPECIFIC PLAN OF OPERATIONS OVER THE NEXT TWELVE MONTHS:
DESIGN AND OPERATION OF OUR WEBSITE
Our planned website will offer the following functions and options to our
on-line grocery store:
1. LOG IN
Our website will provide an online form for customers to complete, allowing
us to form a database of customer information. Once a consumer has
completed the registration process, they will be able to return to our site
and Log In with their username and password. The Log In process will
immediately provide our systems with customer profiles, including shipping
and delivery instructions, payment arrangements, and prior purchase
history.
2. TOUR
If visitors wish to tour our website they will be prompted to reveal their
postal or zip code. This system will enable us to track customer location
to assist us with any future expansion plans. The postal code information
will be used to determine whether or not the visitor is within regular
delivery range of the fulfillment center. During the tour, visitors will be
able to access all goods and services offered on our website, prior to
deciding if they want to register as a customer.
3. REGISTRATION
To shop on our website, visitors will be required to participate in a
registration process. This registration form will require name, age,
salutation preference, occupation, household size, address, phone number,
email address and credit card information. Customers will have the option
to provide credit card information by telephone. Once the registration
information is provided, the visitor will create a username and choose a
password. The registration process will accomplish the following
objectives:
o Facilitate the shopping process for repeat customers;
o Allow us to gather data relevant to our customers and markets;
o Make special offers and sale notifications to our registered users;
and
o Track our customer's prior purchases to tailor their future
shopping to their continued and changing needs.
4. SHOPPING
Many visitors may initially wish to browse through the virtual grocery
aisles. Each aisle will have descriptive names and icons indicating which
items are available. To increase our level of service, we will develop
access to a picture of the product; information regarding product
ingredients; available nutritional information and an onsite tool to search
and locate items. To add convenience and transparency, a visible running
tab will let shoppers know the total cost of items in the grocery cart.
Further service features may include a list of the customers' previous
purchases or a staple list developed by the consumer.
5. CHECKING OUT
At the checkout, the registered consumer will confirm their order by
entering a password. Customers will be asked to confirm their delivery
address, phone number, email address, and any special delivery
instructions. Payment will be made by credit or debit card only. Once the
consumer submits their order, a credit check will be made with the bank,
ensuring that existing credit card information is valid, and the customer
account will be appropriately charged. A record of the transaction will be
sent to the customer at the email address of the registered user for a
second confirmation of their order.
We plan to complete the design and operation of our website in approximately
February 2001.
OUR OPERATIONAL OFFICER WILL BE RESPONSIBLE FOR:
o Operation of the warehouse facility;
o Marketing and advertising;
o Promotional efforts related to brand name recognition;
o Determining the physical requirements for our warehouse and
refrigeration facilities; and
o Determining our suppliers.
LEASE A WAREHOUSE FACILITY TO SERVE AS OUR FULFILLMENT CENTER
We are negotiating and will continue to negotiate for a warehouse lease that
will contain favorable terms to us. We project an approximate cost of $16,000
per month for the warehouse facility. We plan to enter into a two-year lease.
There are no assurances that we will be successful in securing a warehouse
lease. Accordingly, we do not anticipate the need to purchase a plant facility
during the next twelve months. However, we do anticipate making expenditures for
leasehold improvements and to purchase office and warehouse equipment.
We plan to complete the lease of a warehouse facility approximately four
weeks after our funding is complete and we plan to have the warehouse facility
operational approximately twelve weeks after our funding is complete.
HIRE ADDITIONAL EMPLOYEES
We plan to hire fifteen additional employees that will consist of:
o Chief Financial Officer - Oversee and direct the financial aspects of
our business
o General Manager: The General Manager will be responsible for the
distribution center at an administrative and managerial level. The
Inventory, Deliver and Process managers will report to the General
Manager.
o Inventory Manager: This individual will be responsible for selecting
and maintaining proper inventory levels and will deal directly with
our wholesalers and distributors
o Delivery Manager/Dispatcher: This person will be responsible for
scheduling deliveries, and for the upkeep of our delivery vehicles.
o Process Manager: This person will oversee the day-to-day order picking
operation in our fulfillment center.
o Four Delivery Drivers - The drivers will work in various time shifts
and deliver the goods to our customers.
o Six Shoppers - These individuals will fill the customer orders in our
warehouse
We plan to hire these employees approximately two months after our funding is
secured from this offering.
DESIGN THE LAYOUT OF OUR WAREHOUSE FACILITY
We plan that our warehouse space will consist of two distinct sections:
o Warehousing area in which goods are maintained - This area will be
designed in a circuit configuration in which the merchandise is arranged
in a specific order to increase efficiency and reduce warehouse
congestion. The first part of this circuit will hold our inventory of
dry goods. The final portion of the warehouse circuit will be one 900
square foot walk in refrigerator and one 900 square foot walk-in freezer;
and
o Office space for management and computer equipment.
We plan to complete the design of the layout of our warehouse facility
approximately four weeks after securing the lease to the warehouse facility.
LEASE OUR DELIVERY TRUCKS
We plan to negotiate five-year leases on two trucks to begin our operations.
We estimate an approximate lease cost of $800 per month for each truck. We also
estimate that we will lease one additional truck for every increase of 100
orders per week.
We plan to lease our delivery trucks within approximately eight weeks after
our funding is secured from this offering.
DETERMINE THE COMPOSITION OF OUR INITIAL INVENTORY OF FOOD GOODS AND ESTABLISH A
RELATIONSHIP WITH SUPPLIERS
We will determine the composition of our initial inventory of dry food
products. We estimate an initial cost of $50,000 to assemble our initial
inventory. Our initial inventory will consist solely of dry goods. We intend to
order the majority of these goods from Lumsden Brothers located in Brantford,
Ontario. Traditionally, these goods are ordered on a per order basis, rather
than on a permanent contract basis.
We plan to determine the composition of our initial inventory of food goods
and establish a relationship with suppliers approximately four weeks after our
funding is secured from this offering.
DETERMINE THE COMPOSITION OF OUR INITIAL INVENTORY OF MEATS AND PRODUCE AND
ESTABLISH A RELATIONSHIP WITH SUPPLIERS
We will determine the composition of our initial inventory of fresh meats,
dairy and produce. We estimate an initial cost of $2,000 to assemble our initial
inventory of these fresh goods. We have not yet determined where we will
purchase our fresh products. Traditionally, these products are ordered on a per
order basis, rather than on a permanent contract basis. We will not undertake
assembling our initial inventory of fresh goods until such time that we lease a
warehouse and it is equipped with refrigerators and freezers.
We plan to determine the composition of our initial inventory of meats and
produce approximately four weeks after our funding is secured from this
offering.
DEVELOPMENT OF OUR COMPUTER SOFTWARE FOR OUR ORDER PROCESSING AND INVENTORY
CONTROLS AND DELIVERY ROUTING
We will outsource the initial development work to third parties with the goal
of providing both high quality and speed to market.
o ORDER PROCESSING
o A web interface will be designed to allow users to search, browse and
order our products. The web component will store user information such
as name and address, a copy of available inventory, and orders placed
by users.
o INVENTORY CONTROLS
o A web-based inventory management component will handle receipt,
stocking, picking and reordering of product. The system will be
centrally hosted at our office, and designed to manage the inventory of
all our future distribution centers from one central location.
o DELIVERY ROUTING
o To optimize delivery to the end consumer, a routing software package
has been purchased and will be configured to work with our e-commerce
ordering component.
We plan for these technical components to be designed with:
o Simple user functions and interfaces;
o Secure communications;
o Application scalability;
o Reliable interconnections; and
o Use of common web development tools and practices
We plan to complete the development of our computer software for our order
processing, inventory controls and delivery routing in approximately February
2001.
DEVELOP AND INITIATE OUR ADVERTISING PLANS
We intend to use an advertising campaign composed of radio, print and the
Internet. We will advertise over local radio because it is the least expensive
advertising medium. For instance, a local radio thirty-second advertisement is
approximately $60. We also plan to use local print advertising through the
Ottawa Citizen, the Ottawa Business Journal and the Hill Times. We also plan to
advertise on local websites, that are less expensive than their global
counterparts.
We plan to complete our advertising plans approximately four weeks after our
financing is secured from this offering.
DEVELOP AND INITIATE ADVERTISING ON BEHALF OF VENDORS OF MARKET SPECIFIC
PRODUCTS
A portion of our website screen may be allocated to advertising banners.
Through the aisle method of arranging our site, we may be capable of offering
market-specific space to advertising clients. A manufacturer, for example, could
target their audience by advertising baby foods within the baby aisle. Any
income generated from this Internet advertising will provide us with
supplemental income for our marketing.
We plan to complete the development of our advertising and initiate our
advertising on behalf of vendors of market-specific products approximately
sixteen weeks after our funding is secured.
DEVELOP AND INITIATE OUR REWARDS PROGRAM
We plan to introduce a passive awards program to our customers under the
name of DotcomPoints. DotcomPoints will be an awards program whereby customers
will be awarded one point for every dollar purchased, permitting them to reduce
grocery bills on subsequent visits.
We plan to complete the development and initiate our rewards program twelve
weeks after our funding is secured from this offering.
DEVELOP COMMUNICATIONS WITH CUSTOMERS
Short biographies of personal shoppers and delivery staff will be available
on the website, so that customers can identify employees who make deliveries and
select their goods. In addition, we will provide customers the opportunity to
visit our facilities. Customers will be able to contact customer service
representatives by mail, phone, facsimile and email during hours of operation,
if they wish to communicate concerns or questions.
We plan to complete the development of our communications systems with our
customers approximately twelve weeks after our funding is secured from this
offering.
DEVELOP CUSTOMER DATA SYSTEMS
We may be able to generate revenues through the sale of information
relating to the online purchasing patterns of our customers. The value of this
information depends on the size of our client base and the diversity of products
we offer. Through the information obtained during registration on our website,
we will be able to pinpoint the demographic group into which the household
falls. Aggregate customer data for sale will provide no means of identifying or
contacting customers and must comply with recently enacted Canadian data
collection legislation. Any income generated from the sale of consumer data will
provide supplemental income for our marketing.
We plan to complete the development of our computer data systems
approximately twenty-four weeks after our funding are secured.
ITEM 18. DESCRIPTION OF PROPERTY
We do not own any property nor do we have any plans to own any property in
the future. We currently lease space at 41 York Street, Ottawa Ontario. This
space is approximately 3,200 square feet, and is used for our headquarters at
this time. We lease this property from Inter Ottawa, Inc. Our lease term is from
March 26, 2000 to March 2002. Our monthly rent for this space is $2,500 and our
annual rent is $30,000.
Although we plan to lease a warehouse facility to be used as our fulfillment
center, we have not yet been successful in securing a lease for a warehouse
facility.
We have no policy with respect to investments in real estate or interests in
real estate and no policy with respect to investments in real estate mortgages.
Further, we have no policy with respect to investments in securities of or
interests in persons primarily engaged in real estate activities.
ITEM 19. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
On January 2, 2001, we issued the following shares:
1. 3,008,694 shares of our common stock to our president, Pierre Bosse,
for services rendered in the course of our corporate formation;
2. 3,008,694 shares of our common stock to our Chief Information Officer,
Steven Biro, for services rendered in the course of our corporate
formation;
3. 3,008,694 shares of our common stock to our director and Chief
Operating Officer, Ben Bjarnason, for services rendered in the course
of our corporate formation;
4. 1,353,043 shares of our common stock to Nadir Patel, previously our
Chief Financial Officer, for business services rendered in the course
of our corporate formation; and
5. 1,775,118 shares of our common stock to International Corporate
Structures, Inc. for investor relations services to be rendered to us.
Other than the above transactions, we have not entered into any material
transactions with any director, executive officer, nominee for director,
beneficial owner of five percent or more of our common stock, or family members
of such persons. We are not a subsidiary of any company.
ITEM 20. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.
Market Information.
There is no established public trading market for our securities.
Management has not discussed market making with any market maker or broker
dealer. No market exists for our securities and there is no assurance that a
regular trading market will develop, or if developed will be sustained. A
shareholder in all likelihood, therefore, will not be able to resell their
securities should he or she desire to do so when eligible for public resales.
Furthermore, it is unlikely that a lending institution will accept our
securities as pledged collateral for loans unless a regular trading market
develops. We have no plans, proposals, arrangements or understandings with any
person with regard to the development of a trading market in any of our
securities.
On August 1, 2000 according to our employment agreement with Mr. Bosse, our
President and Chief Executive Officer, we granted Mr. Bosse 500,000
non-transferable options which vest 25,000 each fiscal quarter beginning on
October 31, 2000. Each option gives Mr. Bosse the right to purchase one of our
common shares at an exercise price of $0.10. All vested options are forfeited
upon termination of employment.
On August 1, 2000 according to our employment agreement with Mr. Bjarnason,
our Chief Operating Officer, we granted Mr. Bjarnason 500,000 non-transferable
options which vest 25,000 each fiscal quarter beginning on October 31, 2000.
Each option gives Mr. Bjarnason the right to purchase one of our common shares
at an exercise price of $0.10. Mr. Bjarnason can exercise these options until 30
days after his employment terminates with the Company.
On August 1, 2000 according to our employment agreement with Stephen Biro,
our Chief Information Officer, we granted Mr. Biro 500,000 non-transferable
options each fiscal quarter beginning on January 31, 2001. Each option gives Mr.
Biro the right to purchase one of our common shares at an exercise price of
$0.33. Mr. Biro can exercise these options until thirty days after his
employment terminates with the Company.
We currently have no shares of preferred stock outstanding.
There are 9,026,082 shares of our common stock held by non-affiliates and
9,311,919 shares of our common stock held by affiliates, that Rule 144 of the
Act defines as restricted securities. No shares have been sold pursuant to Rule
144 of the Act and no shares are eligible to be resold pursuant to Rule 144. We
have not agreed to register any shares held by our existing shareholders.
There is no common equity of our Company being offered subject to an employee
benefit plan.
Holders.
As of the date of this registration, we had fifty-two (48) holders of record
of our common stock. There is currently one class of common stock outstanding.
Dividends.
We have not declared any cash dividends on our common stock since our
inception and do not anticipate paying such dividends in the foreseeable future.
We plan to retain any future earnings for use in our business. Any decisions as
to future payment of dividends will depend on our earnings and financial
position and such other factors, as the Board of Directors deems relevant. Penny
Stock Considerations.
Broker-dealer practices in connection with transactions in penny stocks are
regulated by certain penny stock rules adopted by the Securities and Exchange
Commission. Penny stocks generally are equity securities with a price of less
than $5.00. Penny stock rules require a broker-dealer, prior to a transaction in
a penny stock not otherwise exempt from the rules, to deliver a standardized
risk disclosure document that provides information about penny stocks and the
risks in the penny stock market. The broker-dealer also must provide the
customer with current bid and offer quotations for the penny stock, the
compensation of the broker-dealer and its salesperson in the transaction, and
monthly account statements showing the market value of each penny stock held in
the customer's account. In addition, the penny stock rules generally require
that prior to a written determination that the penny stock is a suitable
investment for the Purchaser and receive the purchaser's written agreement to
the transaction.
These disclosure requirements may have the effect of reducing the level of
trading activity in the secondary market for a stock that becomes subject to the
penny stock rules. Our shares will likely be subject to such penny stock rules
and our shareholders will in all likelihood find it difficult to sell their
securities.
ITEM 21. EXECUTIVE COMPENSATION
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Summary Compensation Table
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-------------------------------- ----------------------------------- -------------------------------------------------
Annual Compensation Long Term Compensation
-------------------------------- ----------------------------------- -------------------------------------------------
------------------------- ------ ---------- -------- --------------- ---------------- -------------- --------- -------
Name and Principle Year Salary Bonus Other Annual Restricted Securities LTIP Other
Position ($) ($) Compensation Stock Award(s) Underlying Payouts ($)
($) ($) Options (#) ($)
------------------------- ------ ---------- -------- --------------- ---------------- -------------- --------- -------
Pierre Bosse, 2000 39,870 0 0 0 500,000 0 0
Chief Executive Officer
------------------------- ------ ---------- -------- --------------- ---------------- -------------- --------- -------
------------------------- ------ ---------- -------- --------------- ---------------- -------------- --------- -------
Ben Bjarnason, 2000 39,870 0 0 0 500,000 0 0
Chief Operating Officer
------------------------- ------ ---------- -------- --------------- ---------------- -------------- --------- -------
------------------------- ------ ---------- -------- --------------- ---------------- -------------- --------- -------
Steve Biro 2000 99,675 0 0 0 500,000 0 0
Chief Information
Officer
------------------------- ------ ---------- -------- --------------- ---------------- -------------- --------- -------
Our employment agreement with Pierre Bosse, our President, provides for a
term of employment commencing on August 1, 2000 and which employment term
continues until terminated. The agreement provides that Mr. Bosse will act as
our President. The agreement provides that:
o Mr. Bosse will receive an annual salary of $39,870; and
o Mr. Bosse agrees that a condition of his employment is to enter into a
non-competition agreement which was executed on August 1, 2000.
o We agree to issue Mr. Bosse 500,000 options for 25,000 non-transferable
options each over 20 successive fiscal quarters. Each option gives Mr.
Bosse the right to purchase one of our common shares at an exercise
price of $0.10. All unvested options are forfeited upon termination of
employment.
Our employment agreement with Mr. Bjarnason, chief operating officer,
provides for a term of employment commencing on August 1, 2000 and which
employment term continues until terminated. The agreement provides that Mr.
Bjarnason will act as our Chief Operating Officer. The agreement provides that:
o Mr. Bjarnason will receive an annual salary of $39,870 effective August
1, 2000; and
o Mr. Bjarnason agrees that a condition of his employment is to enter
into a non-competition agreement that was executed on August 1, 2000.
o On August 1, 2000 pursuant to our employment agreement with Mr.
Bjarnason, we granted Mr. Bjarnason 500,000 non-transferable options
each fiscal quarter beginning on October 31, 2000. Each option gives
Mr. Bjarnason the right to purchase 25,000 of our common shares at an
exercise price of $0.10 over 20 successive fiscal quarters. Mr.
Bjarnason can exercise these options until thirty days after his
employment terminates with the Company.
Our August 1, 2000 employment agreement with Stephen Biro provides for a term
of employment commencing on August 1, 2000 and which employment term continues
until terminated. The agreement provides that Mr. Biro will act as our Chief
Information Officer. The agreement provides that:
o Mr. Biro will receive an annual salary of $99,675 that will consist of
a base salary of $66,450 and the remaining $33,225 to be paid in either
cash or in shares of our common stock on or before Mr. Biro's
employment anniversary date;
o Mr. Biro will receive additional compensation of 500,000
non-transferable options each fiscal quarter beginning on January 31,
2001 up to a total of 500,000 options. Each option gives Mr. Biro the
right to purchase one of our common shares at an exercise price of
$0.33. Mr. Biro can exercise these options until thirty days after his
employment terminates with the Company.
o Mr. Biro agrees that a condition of his employment is to enter into a
non-competition agreement that was executed on August 1, 2000.
ITEM 22. FINANCIAL STATEMENTS
Statements included in this prospectus that do not relate to present or
historical conditions are "forward-looking statements." We may make future
forward-looking statements, which may be included in documents that we file with
the Commission other than this registration statement. Forward-looking
statements involve risks and uncertainties that may differ materially from
actual results, and may relate to our plans, strategies, objectives,
expectations, intentions and adequacy of resources.
LAZYGROCER.COM, INC.
AND SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED FINANCIAL STATEMENTS
MAY 31, 2000
LAZYGROCER.COM, INC.
(A DEVELOPMENT STAGE COMPANY)
CONTENTS
PAGE 1 INDEPENDENT AUDITORS' REPORT
PAGE 2 CONSOLIDATED BALANCE SHEET AT MAY 31, 2000
PAGE 3 CONSOLIDATED STATEMENT OF OPERATIONS FOR THE YEAR ENDED MAY 31, 2000
PAGE 4 CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' DEFICIENCY FOR
THE YEAR ENDED MAY 31, 2000
PAGE 5 CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED MAY 31, 2000
PAGES 6 - 13 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
INDEPENDENT AUDITORS' REPORT
To the Board of Directors of:
LazyGrocer.Com, Inc.
(A Development Stage Company)
We have audited the accompanying consolidated balance sheet of LazyGrocer.Com,
Inc. (a development stage company) as of May 31, 2000 and the related
consolidated statements of operations, changes in stockholders' deficiency and
cash flows for year then ended. These consolidated financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these consolidated financial statements based on our audit.
We conducted our audit in accordance with United States generally accepted
auditing standards. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the consolidated financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the consolidated
financial statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall consolidated financial statement presentation. We believe that our audit
provides a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present
fairly in all material respects, the financial position of LazyGrocer.Com, Inc.
(a development stage company) for the year ended May 31, 2000, and the results
of its operations and its cash flows for the year then ended in conformity with
United States generally accepted accounting principles.
The accompanying consolidated financial statements have been prepared assuming
that the Company will continue as a going concern. As discussed in Note 7 to the
financial statements, the Company's operating losses of $168,538 and working
capital deficiency of $107,395 raise substantial doubt about its ability to
continue as a going concern. Management's Plan in regards to these matters is
also described in Note 7. The consolidated financial statements do not include
any adjustments that might result from the outcome of this uncertainty.
SALBERG & COMPANY, P.A.
Boca Raton, Florida
November 28, 2000 (except for Note 5(A) as to which
the date is December 20, 2000)
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LAZYGROCER.COM, INC.
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED BALANCE SHEET
MAY 31, 2000
ASSETS
Current Assets
Prepaid expenses $ 4,984
Taxes receivable 4,466
----------------
----------------
Total Current Assets 9,450
----------------
Property and Equipment, Net 5,162
----------------
TOTAL ASSETS $ 14,612
================
LIABILITIES AND STOCKHOLDERS' DEFICIENCY
Current liabilities
Bank overdraft $ 3,646
Accounts payable and accrued liabilities 45,657
Due to stockholders 67,542
----------------
----------------
TOTAL LIABILITIES 116,845
----------------
Stockholders' Deficiency
Preferred stock, $0.001 par value, 20,000,000 shares authorized,
none issued and outstanding -
Common stock, $0.001 par value, 50,000,000 shares authorized, 14,729,307 shares issued
and outstanding 14,729
Additional paid-in capital 1,854,527
Deficit accumulated during development stage (168,538)
Other comprehensive income 2,687
----------------
----------------
1,703,405
Less deferred stock based consulting fees (1,805,638)
----------------
----------------
TOTAL STOCKHOLDERS' DEFICIENCY (102,233)
----------------
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIENCY $ 14,612
3
See accompanying notes to consolidated financial
statements.
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LAZYGROCER.COM, INC.
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENT OF OPERATIONS
YEAR ENDED MAY 31, 2000
OPERATING EXPENSES
Compensation $ 85,643
Professional fees 54,625
General and administrative 10,301
Rent 8,566
Marketing 7,281
Depreciation 2,122
-------------------------
Total Operating Expenses 168,538
-------------------------
-------------------------
NET LOSS $ (168,538)
=========================
Net loss per share - basic and diluted $ (0.02)
=========================
Weighted average number of shares outstanding during the period - basic and diluted 9,356,466
=========================
4
See accompanying notes to financial
statements.
[Enlarge/Download Table]
LAZYGROCER.COM, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CHANGES IN STOCKHOLDERS' DEFICIENCY
YEAR ENDED MAY 31, 2000
Deficit
Accumulated Accumulated
Additional During Other Deferred Stock
Common Stock Paid-In Development Comprehensive Based
Shares Amount Capital Stage Income Consulting Fees Total
---------- ----------- ---------- ----------- ------------ ---------------- ----------
Balance, May 31, 1999 - $ - $ - $ - $ - - $ -
Issuance of common stock for
cash to founders 9,257,677 9,258 - - - - 9,258
Issuance of common stock for
services 5,471,630 5,471 1,800,167 - - (1,805,638) -
In-kind contribution of services
by stockholders - - 54,360 - - - 54,360
Foreign currency translation
adjustment - - - - 2,687 - 2,687
Net loss for 2000 - - - (168,538) - - (168,538)
----------- ----------- ---------- ----------- ----------- ---------- ------------
---------- ----------- ---------- ----------- ----------- ---------- ------------
Comprehensive loss - - - (168,538) 2,687 - (165,851)
----------- ----------- ---------- ----------- ----------- ---------- ------------
----------- ----------- ---------- ----------- ----------- ---------- ------------
BALANCE, MAY 31, 2000 14,729,307 $ 14,729 1,854,527 $(168,538) $2,687 $(1,805,638) $(102,233)
=========== =========== ========== =========== =========== =========== ============
5
See accompanying notes to financial
statements.
[Enlarge/Download Table]
LAZYGROCER.COM, INC.
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENT OF CASH FLOWS
YEAR ENDED MAY 31, 2000
Cash flows from operating activities
Net loss $ (168,538)
Adjustments to reconcile net loss to net cash used in operating activities:
Non-cash compensation 54,360
Depreciation 2,122
Changes in operating assets and liabilities:
(Increase) decrease in:
Prepaid expenses (4,984)
Taxes receivable (4,466)
Increase (decrease) in:
Accounts payable and accrued liabilities 45,657
---------------
---------------
Net cash (used in) operating activities (75,849)
---------------
Cash flows from investing activities
Purchase of property and equipment (7,284)
---------------
---------------
Net cash (used in) investing activities (7,284)
---------------
Cash flows from financing activities
Due to stockholder 67,542
Proceeds from stock issuances 9,258
Proceeds from bank overdraft line 3,646
--------------
--------------
Net cash provided by financing activities 80,446
--------------
Effect of exchange rate changes on cash 2,687
Net increase in cash -
Cash and cash equivalents at beginning of year -
--------------
Cash and cash equivalents at end of year $ -
==============
LAZYGROCER.COM, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
AS OF MAY 31, 2000
NOTE 1 ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
------ -----------------------------------------------------------
(A) Organization
LazyGrocer.Com, Inc. (the Company) is a United States
development stage company that intends to establish an online
grocery solution for the Ottawa-Hull region through its wholly
owned Canadian subsidiary, LazyGrocer.Com Corp.
The Company was incorporated on May 22, 2000 following a
corporate reorganization whereby the stockholders of the
Canadian subsidiary exchanged their ownership in the Canadian
company for equal ownership in the U.S. parent. The Canadian
subsidiary was incorporated on May 12, 1999, under the Canada
Corporation Business Act. There was no activity in the
Canadian subsidiary prior to June 1, 1999. The transaction was
treated as a recapitalization of LazyGrocer.Com, Corp.
Accordingly, the accompanying consolidated financial
statements reflect operations of the consolidated entity from
June 1, 1999 to May 31, 2000.
Activities during the development stage include raising
capital and development of the Company's business plan,
Securities and Exchange Commission filings and infrastructure.
(B) Principles of Consolidation
The accompanying consolidated financial statements include the
accounts of LazyGrocer.Com, Inc. and the Company's wholly
owned Canadian subsidiary. All material intercompany
transactions and balances have been eliminated.
(C) Foreign Currency Translation
The accounts of the Canadian subsidiary are translated using
the current rate method, as the currency of the Canadian
subsidiary is the Company's functional currency. Under the
current rate method, all assets and liabilities are translated
using exchange rates at the balance sheet date. Revenue and
expense items are translated using the average rate of
exchange prevailing during the period. Exchange gains and
losses resulting from translation of foreign currencies are
recorded in stockholders' deficiency as a cumulative
translation adjustment component of other comprehensive
income.
(D) Use of Estimates
In preparing financial statements, management is required to
make estimates and assumptions that effect the reported
amounts of assets and liabilities and disclosure of contingent
assets and liabilities at the date of the financial statements
and revenues and expenses during the reported period. Actual
results may differ from these estimates.
(E) Cash Equivalents
For the purpose of the cash flow statement, the Company
considers all highly liquid investments with original
maturities of three months or less at the time of purchase to
be cash equivalents.
(F) Property and Equipment
Property and equipment are stated at cost, less accumulated
depreciation. Expenditures for maintenance and repairs are
charged to expense as incurred. Depreciation is provided using
the straight line method over the estimated useful lives of
the assets of three to five years.
(G) Stock-Based Compensation
The Company accounts for its stock options issued to employees
in accordance with the provisions of Accounting Principles
Board ("APB") Opinion No. 25, "Accounting for Stock Issued to
Employees", and related interpretations. As such, compensation
cost is measured on the date of grant as the excess of the
current fair market value of the underlying stock over the
exercise price. Such compensation amounts are amortized over
the respective vesting periods of the option grant. The
Company adopted the disclosure provisions of SFAS No. 123,
"Accounting for Stock-Based Compensation," which permits
entities to provide pro forma net income (loss) and pro forma
earnings (loss) per share disclosures for employee stock
option grants as if the fair-valued based method defined in
SFAS No. 123 had been applied.
The Company accounts for stock options issued to non-employees
for goods or services in accordance with SFAS 123 and
recognizes the expense over the vesting period.
The Company accounts for stock issued for goods or services at
the stock's fair market value on the grant date and recognizes
the expense over the service period.
(H) Income Taxes
The Company accounts for income taxes under the 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 which includes
the enactment date.
(I) Net Loss Per Common Share
Basic net income (loss) per common share (Basic EPS) excludes
dilution and is computed by dividing net income (loss) by the
weighted average number of common shares outstanding during
the year. Diluted net income per share (Diluted EPS) reflects
the potential dilution that could occur if stock options or
other contracts to issue common stock, such as convertible
notes, were exercised or converted into common stock. There
have been no dilutive instruments outstanding through May 31,
2000. Since August 2000 there are 1,500,000 common stock
options outstanding which may dilute future earning per share.
(J) Comprehensive Income (Loss)
The Company accounts for Comprehensive Income (Loss) under
the Financial Accounting Standards Board Statement of
Financial Accounting Standards No. 130, "Reporting
Comprehensive Income" ("Statement No. 130"). Statement No.
130 establishes standards for reporting and display of
comprehensive income and its components, and is effective for
the fiscal years beginning after December 15, 1997.
The foreign currency translation gains (losses) resulting from
the translation of the financial statements of LazyGrocer.Com
Corp. expressed in Canadian dollars to United States dollars
are reported as Accumulated Other Comprehensive Income (Loss)
in the Statement of Stockholders' Equity.
(K) Fair Value of Financial Instruments
Statement of Financial Accounting Standards No. 109,
"Disclosures about Fair Value of Financial Instruments",
requires disclosures of information about the fair value of
certain financial instruments for which it is practicable to
estimate that value. For purposes of this disclosure, the fair
value of a financial instrument is the amount at which the
instrument could be exchanged in a current transaction between
willing parties, other than in a forced sale or liquidation.
The carrying amounts of the Company's short-term financial
instruments, including accounts payable and accrued
liabilities, and due to stockholders, approximate fair value
due to the relatively short period to maturity for these
instruments.
(L) New Accounting Pronouncements
The Financial Accounting Standards Board has recently issued a
new accounting pronouncement. Statement No. 133 as amended by
Statement No. 137 and 138, "Accounting for Derivative
Instruments and Hedging Activities" established accounting and
reporting standards for derivative instruments and related
contracts and hedging activities. This statement is effective
for all fiscal quarters and fiscal years beginning after June
15, 2000.
The adoption of this pronouncement did not have a material
effect on the Company's financial position or results of
operations.
(M) Segment Information
The Company applies Statement of Financial Accounting No. 131
"Disclosures about Segments of an Enterprise and Related
Information." The Company currently operates in one segment
and has no revenues and geographic concentrations, therefore,
segment information is not presented.
(N) Non-Monetary Transactions
The statement of operations includes charges for the fair
value of the in-kind contributions in the form of services
provided.
NOTE 2 PROPERTY AND EQUIPMENT
Property and equipment consists of the following at May 31,
2000:
Computer equipment $ 4,988
Office equipment 2,296
-------------
7,284
Less: Accumulated depreciation (2,122)
-------------
$ 5,162
=============
NOTE 3 DUE TO STOCKHOLDERS
Amounts due to stockholders are non-interest bearing,
unsecured and have no fixed terms of repayment.
NOTE 4 COMMITMENTS
(A) Operating Lease
The Company has entered into an operating lease agreement for
office premises with a monthly rent of approximately $2,500.
The Company's lease commitment over the remaining term of the
lease is:
Year: Amount:
----- -------
2001 $ 29,903
2002 19,935
-----------------
$ 49,838
=================
(B) Advertising and Promotional Service Agreements
On April 1, 2000 (the "effective date"), as amended, the
Company entered into two agreements (the "Agreements") with
service providers (the " Service Providers") to receive
advertising and promotional services as stipulated in the
Agreements for a term of 730 days from the later of the date
the agreement is executed or the date the Service Providers
receive payment, subject to the conditions precedent. The
Agreements stipulate aggregate compensation of $1,000,000 cash
or at the option of the Company 933,835 shares of the
Company's common stock. The Agreements also provides for
registration rights for any shares issued, reimbursement by
the Company for any out-of-pocket expenses incurred by the
Service Providers and indemnification of the Service
providers as stipulated. As of the date of the
accompanying audit report, 933,835 shares were issued
pursuant to these agreements and recorded as a deferred
expense deducted from equity since the services had not
commenced. (See Note 5(A)).
NOTE 5 STOCKHOLDERS' DEFICIENCY
(A) Stock Issuances
During the year, the Company issued 9,257,677 common shares to
founders in exchange for cash consideration of $9,258 and
5,471,630 common shares in exchange for $1,805,638 of services
to be provided. The services were valued at the concurrent
cash-offering price of $0.33 per share offered just subsequent
to year-end. The $1,805,638 cost was deferred as a deduction
from equity. (See Note 4(B) and below.)
Subsequent to year-end, the Company issued 600,000 common
shares for cash of $200,000 pursuant to a private placement
(See Note 7) and 3,008,694 for services (See Note 8(A)).
All of the above shares totaling 18,338,001 were not
physically issued until December 2000 and January 2001.
(B) Stock Options
In August 2000 the Board of Directors adopted the 2000 Stock
Option Plan (the "Plan"). The plan was developed to provide a
means whereby directors and selected employees, officers,
consultants of the Company may be granted incentive (ISO) or
non-qualified stock options to purchase common stock of the
Company. Options granted under the plan may not have an
exercise period greater than 10 years and may not have an
exercise price less than 100% of the fair market value of the
common stock if they are ISOs. Notwithstanding the above the
Board of Directors shall determine the exercise price. As of
the date of the accompanying audit report, the Plan authorizes
options up to an aggregate of 5,000,000 shares of the
Company's common stock.
In August 2000, the Company granted, under employment
agreements and pursuant to the Plan, 500,000 common stock
options to each of two officers and principal stockholders at
an exercise price of $0.10. Another 500,000 options were
granted to a third officer and principal stockholder at an
exercise price of $0.33. 1,000,000 options begin vesting on
October 31, 2000 and 500,000 begin on January 31, 2001 and
vests pro-rata over 20 successive fiscal quarters. All
unvested options are forfeited upon termination of employment.
Up to 1,000,000 vested options for two officers must be
exercised within 30 days of employment termination. The
Company will account for these options pursuant to APB 25 and
the disclosure provisions of SFAS 123.
NOTE 6 INCOME TAXES
There was no income tax expense for the year ended May 31,
2000 due to the Company's net losses.
There were no revenues or expenses in the United States parent
corporation, LazyGrocer.Com, Inc. for the year ended May 31,
2000. The Company's tax expense differs from the "expected"
tax expense for Canadian Federal and Provincial income tax
purposes for the year ended May 31, 2000, (computed by
applying the blended Federal and Provincial Corporate tax rate
of 41.5% to loss before taxes), as follows:
[Download Table]
Computed "expected" tax expense (benefit) $ (69,943)
Effect of net operating loss carryforward 69,943
--------------
$ -
==============
The effects of temporary differences that gave rise to
significant portions of deferred tax assets and liabilities at
May 31, 2000 are as follows:
Deferred tax assets:
Net operating loss carryforward $ 69,943
--------------
Total gross deferred tax assets 69,943
Less valuation allowance (69,943)
--------------
--------------
Net deferred tax assets $ -
==============
There was no valuation allowance at June 1, 1999. The net
change in valuation allowance during the year ended May 31,
2000 was an increase of approximately $69,943. The Company's
subsidiary has net operating losses of approximately $168,600
available to offset the subsidiaries' net income through 2007
under Canadian Federal and Provincial tax laws.
NOTE 7 GOING CONCERN
As reflected in the accompanying consolidated financial
statements, the Company is a development stage company with no
revenues, losses of $168,538 and a working capital deficiency
of $107,395. The ability of the Company to continue as a going
concern is dependent on the Company's ability to raise
additional capital and implement its business plan. 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 anticipates raising additional working capital and
subsequent to May 31, 2000 has issued an additional 600,000
common shares for cash of $200,000. The Company is currently
preparing a Securities and Exchange Commission Form SB-2 to
raise additional equity capital. (See Note 8(D)). Management
believes that the actions presently being taken to obtain
additional funding and implement its business plan provide the
opportunity for the Company to continue as a going concern.
NOTE 8 SUBSEQUENT EVENTS
(A) Stock Issuances
On August 1, 2000 the Company issued 3,008,694 common shares
to a new officer for services rendered. Compensation expense
of $992,869 was recognized immediately since there was no
stated term of the agreement and was based on the recent
cash-offering price of $0.33 per common share.
(B) Software License Agreement
On June 28, 2000 the Company entered into a software license
agreement to license software from a vendor. Total license and
maintenance fees are $119,000 of which $16,000 has been paid
upon execution of the agreement. The remaining amounts are due
on a monthly basis as stipulated in the agreement through
February 2001 beginning August 30, 2000. However, this
schedule has been deferred through a mutual agreement of the
parties until such time that the Company begins usage of the
software. The Company also signed a service agreement to
receive software integration at a price of $29,600 from the
same vendor.
(C) Employment Agreements
The Company entered into three agreements to pay officers
salaries of $39,870, $39,870 and $99,675 with a perpetual term
unless terminated by the Company for any reason. Up to 12
months severance must be paid upon termination. The Company
also issued stock options under the agreements (see Note 5).
(D) Registration Statement
The Company is preparing a Form SB-2 Registration Statement to
offer up to 800,000 units consisting of one share of common
stock, one option exercisable at $2.50 and one option
exercisable at $3.50. Each unit will cost $1.00.
LAZYGROCER.COM, INC.
AND SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED FINANCIAL STATEMENTS
OCTOBER 31, 2000
LAZYGROCER.COM, INC.
(A DEVELOPMENT STAGE COMPANY)
CONTENTS
PAGE 1 CONSOLIDATED BALANCE SHEET AT OCTOBER 31, 2000
PAGE 2 CONSOLIDATED STATEMENT OF OPERATIONS FOR THE FIVE MONTHS ENDING
OCTOBER 31, 2000 AND OCTOBER 31, 1999 AND FROM JUNE 1, 1999
(INCEPTION) TO OCTOBER 31, 2000
PAGE 3 CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE FIVE MONTHS ENDING
OCTOBER 31, 2000 AND OCTOBER 31, 1999 AND FROM JUNE 1, 1999
(INCEPTION) TO OCTOBER 31, 2000
PAGES 4 - 6 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
[Enlarge/Download Table]
LAZYGROCER.COM, INC.
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED BALANCE SHEET
OCTOBER 31, 2000
ASSETS
Current Assets
Cash $ 1,402
Prepaid expenses 4,901
Taxes receivable and other assets 10,383
----------------
----------------
Total Current Assets 16,686
----------------
Property and Equipment, Net 3,913
----------------
TOTAL ASSETS $ 20,599
================
LIABILITIES AND STOCKHOLDERS' DEFICIENCY
Current liabilities
Accounts payable and accrued liabilities 122,038
Due to stockholders 28,672
----------------
----------------
TOTAL LIABILITIES 150,710
----------------
Stockholders' Deficiency
Preferred stock, $0.001 par value, 20,000,000 shares authorized,
none issued and outstanding -
Common stock, $0.001 par value, 50,000,000 shares authorized, 18,338,001 shares issued
and outstanding 18,338
Additional paid-in capital 3,043,787
Deficit accumulated during development stage (1,882,645)
Other comprehensive income 3,866
----------------
----------------
1,183,346
Less deferred stock based consulting fees (1,313,457)
----------------
----------------
TOTAL STOCKHOLDERS' DEFICIENCY (130,111)
----------------
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIENCY $ 20,599
================
2
See accompanying notes to consolidated financial
statements.
[Enlarge/Download Table]
LAZYGROCER.COM, INC.
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENT OF OPERATIONS
Five months ended Five months ended From June 1, 1999
October 31, 2000 October 31, 1999 (inception) to
October 31, 2000
----------------------- ------------------------ -------------------------
----------------------- ------------------------ -------------------------
OPERATING EXPENSES
Compensation 1,022,835 - 1,108,478
Depreciation 855 302 2,977
General and administrative 12,858 2,368 23,159
IT Services 19,863 - 19,863
Marketing 13,242 - 20,523
Professional and consulting fees 505,527 3,920 560,152
Rent 25,238 4,898 33,804
Software and licensing fees 113,689 - 113,689
----------------------- ------------------------ ------------------------
Total Operating Expenses 1,714,107 11,488 1,882,645
NET LOSS $ (1,714,107) $ (11,488) $ (1,882,645)
======================= ======================== ========================
======================= ======================== ========================
Net loss per share - basic and diluted $ (0.10) - (0.16)
======================= ======================== ========================
======================= ======================== ========================
Weighted average number of shares
outstanding during the period - basic and
diluted 17,130,565 9,257,677 11,648,041
======================= ======================== ========================
3
See accompanying notes to financial
statements.
[Enlarge/Download Table]
LAZYGROCER.COM, INC.
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENT OF CASH FLOWS
Five months June 1, 1999
ended Five months ended (inception) to
October 31, 2000 October 31, 1999 October 31, 2000
---------------------- ---------------------- ------------------
Cash flows from operating activities
Net loss $ (1,714,107) $ (11,488) $ (1,882,645)
Adjustments to reconcile net loss to net cash used
in operating activities:
Non-cash compensation - - 54,360
Stock based compensation 1,485,050 - 1,485,050
Depreciation 855 302 2,977
Changes in operating assets and liabilities:
(Increase) decrease in:
Prepaid expenses 83 - (4,901)
Taxes receivable and other assets (5,917) - (10,383)
Increase (decrease) in:
Accounts payable and accrued liabilities 76,381 749 122,038
---------------------- ---------------------- ------------------
---------------------- ---------------------- ------------------
Net cash (used in) operating activities (157,655) (10,437) (233,504)
---------------------- ---------------------- ------------------
---------------------- ---------------------- ------------------
Cash flows from investing activities
Purchase of property and equipment - (2,536) (7,284)
---------------------- ---------------------- ------------------
---------------------- ---------------------- ------------------
Net cash (used in) investing activities - (2,536) (7,284)
---------------------- ---------------------- ------------------
---------------------- ---------------------- ------------------
Cash flows from financing activities
Repayment of bank overdraft (3,646) - -
Due to stockholder (38,870) 5,306 28,672
Proceeds from stock issuances 200,000 9,258 209,258
---------------------- ---------------------- ------------------
---------------------- ---------------------- ------------------
Net cash provided by financing activities 157,484 14,564 237,930
---------------------- ---------------------- ------------------
---------------------- ---------------------- ------------------
Effect of exchange rate changes on cash 1,573 1,412 4,260
Net increase in cash 171 3,003 1,402
Cash and cash equivalents at beginning of period - - -
---------------------- ---------------------- ------------------
---------------------- ---------------------- ------------------
Cash and cash equivalents at end of PERIOD $ 1,402 $ 3,003 $ 1,402
====================== ====================== ==================
====================== ====================== ================
====================== ====================== ================
LAZYGROCER.COM, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
OCTOBER 31, 2000
NOTE 1 BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements
have been prepared in accordance with generally accepted
accounting principles and the rules and regulations of the
Securities and Exchange Commission for interim financial
information. Accordingly, they do not include all the
information and footnotes 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.
For further information, refer to the audited consolidated
financial statements and footnotes for the year ended May 31,
2000 included in the Company's Form SB-2.
NOTE 2 COMMITMENTS
(A) Software License Agreement
On June 28, 2000 the Company entered into a software license
agreement to license software from a vendor. Total license and
maintenance fees are $119,000 of which $16,000 has been paid
upon execution of the agreement. The remaining amounts are due
on a monthly basis as stipulated in the agreement through
February 2001 beginning August 30, 2000. However, this
schedule has been deferred through a mutual agreement of the
parties until such time that the Company begins usage of the
software. The Company also signed a service agreement to
receive software integration at a price of $29,600 from the
same vendor.
(B) Employment Agreements
The Company entered into three agreements to pay officers
salaries of $39,870, $39,870 and $99,675 with a perpetual term
unless terminated by the Company for any reason. Up to 12
months severance must be paid upon termination. The Company
also issued stock options under the agreements (see Note
3(B)).
NOTE 3 STOCKHOLDERS' DEFICIENCY
(A) Stock Issuances
During the five months ended October 31, 2000 the Company
issued 600,000 common shares for cash of $200,000 pursuant to
a private placement and issued 3,008,694 common shares to a
new officer for services valued at $.33 per share based on the
recent cash offering price. Accordingly, a compensation
expense of $992,869 was immediately recognized since the
employment agreement had no stated term. In addition, $492,181
professional and consulting fees were recognized from the
deferred consulting fees based on the services performed
pursuant to the various professional services and consulting
agreements.
(B) Stock Options
In August 2000 the Board of Directors adopted the 2000 Stock
Option Plan (the "Plan"). The plan was developed to provide a
means whereby directors and selected employees, officers,
consultants of the Company may be granted incentive (ISO) or
non-qualified stock options to purchase common stock of the
Company. Options granted under the plan may not have an
exercise period greater than 10 years and may not have an
exercise price less than 100% of the fair market value of the
common stock if they are ISOs. Notwithstanding the above the
Board of Directors shall determine the exercise price. As of
the date of the accompanying audit report, the Plan authorizes
options up to an aggregate of 5,000,000 shares of the
Company's common stock.
In August 2000, the Company granted, under employment
agreements and pursuant to the Plan, 500,000 common stock
options to each of two officers and principal stockholders at
an exercise price of $0.10. Another 500,000 options were
granted to a third officer and principal stockholder at an
exercise price of $0.33. 1,000,000 options begin vesting on
October 31, 2000 and 500,000 begin on January 31, 2001 and
vests pro-rata over 20 successive fiscal quarters. All
unvested options are forfeited upon termination of employment.
Up to 1,000,000 vested options for two officers must be
exercised within 30 days of employment termination. The
Company will account for these options pursuant to APB 25 and
the disclosure provisions of SFAS 123.
(C) Registration Statement
The Company is preparing a Form SB-2 Registration Statement to
offer up to 800,000 units consisting of one share of common
stock, one option exercisable at $2.50 and one option
exercisable at $3.50. Each unit will cost $1.00.
Note 4 Segment Information
The Company applies Statement of Financial Accounting No. 131
"Disclosures about Segments of an Enterprise and Related
Information." The Company currently operates in one segment
and has no revenues and geographic concentrations, therefore,
segment information is not presented.
ITEM 23. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
The accounting firm of Salberg & Company, P.A., Certified Public Accountants
and Consultants, audited our financial statements. Since inception, we have had
no changes in or disagreements with our accountants.
DEALER PROSPECTUS DELIVERY OBLIGATION
Until ninety days after the effectiveness of the registration statement of
which this prospectus is a part, all dealers that effect transactions in these
securities, whether or not participating in this offering, may be required to
deliver a prospectus. This is in addition to the dealers' obligation to deliver
a prospectus when acting as underwriters and with respect to their unsold
allotments or subscriptions.
PART II INFORMATION NOT REQUIRED TO BE INCLUDED IN PROSPECTUS
ITEM 24. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Our Articles of Incorporation provide that we shall indemnify our
directors, officers, employees and agents to the fullest extent permitted by
law. At this time, no statute or provision of the by-laws, any contract or other
arrangement provides for insurance or indemnification of a controlling person,
director or officer of our Company, which would affect his or her liability in
that capacity. Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers or persons
controlling an issuer pursuant to the foregoing provisions, the opinion of the
Commission is that 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
The following table is an itemization of all expenses, without
consideration to future contingencies, incurred or expected to be incurred by
our Corporation in connection with the issuance and distribution of the
securities being offered by this prospectus. Items marked with an asterisk (*)
represent estimated expenses. We have agreed to pay all the costs and expenses
of this offering. Selling security holders will pay no offering expenses.
ITEM EXPENSE
---- -------
SEC Registration Fee $ 0
Legal Fees and Expenses $10,000
Accounting Fees and Expenses $ 8,000
Miscellaneous* $ 5,000
=============================================
Total* $23,000
* Estimated Figure
ITEM 26. RECENT SALES OF UNREGISTERED SECURITIES
On December 12, 2000, we issued the following shares:
1. 443,624 shares of our common stock to Peter Kissick, Esquire, for
his services in assisting with our business plans;
2. 443,624 shares of our common stock to our Advisor, Douglas Reid, as
consideration for his services in assisting with our business plans;
and
3. 99,998 shares of our common stock to Melissa McKinnon, as consideration
for her services in assisting with our business plans.
On May 26, 2000, we issued 100,000 shares of our common stock to the Law Offices
of Brenda Lee Hamilton, P.A., as consideration for legal services rendered to
us.
On June 1, 2000, we sold 600,000 shares of our common stock to 26 individuals at
a price of $.33 per shares or an aggregate of $200,000.
On January 2, 2001, we issued the following shares:
1. 3,008,694 shares of our common stock to our president, Pierre Bosse,
for services rendered in the course of our corporate formation;
2. 3,008,694 shares of our common stock to our Chief Information Officer,
Steven Biro, for services rendered in the course of our corporate
formation;
3. 3,008,694 shares of our common stock to our director and Chief
Operating Officer, Ben Bjarnason, for services rendered in the course
of our corporate formation;
4. 1,353,043 shares of our common stock to our Nadir Patel, for business
services rendered in the course of our corporate formation;
5. 1,775,118 shares of our common stock to International Corporate
Structures, Inc. for investor relations services to be rendered to us;
6. 887,559 shares of our common stock to Karim Rahemtulla for services to
be rendered in developing our business plan;
7. 466,917 shares of our common stock to Gulf Atlantic Publishing for
investor relations services to be rendered to us;
8. 466,918 shares of our common stock to Rainbow Communications, Inc. for
investor relations services to be rendered to us;
9. 887,559 shares of our common stock to Len Arnoff, Esquire for marketing
services to be rendered to us; and
10. 887,559 shares of our common stock to Barcelon Investment Ltd. for
marketing services to be rendered to us.
The aforementioned securities were issued under the exemption from
registration provided by Section 4(2) of the Securities Act of 1933, as amended.
We believed this exemption was available because these issuances were
transactions not involving a public offering. There was no general solicitation
or advertising used to offer our shares; each investor had a prior relationship
with the Company and its shareholders. In addition, each investor had the
knowledge and experience in financial and business matters to evaluate the
merits and risks of this prospective investment and therefore was either
accredited or sufficiently sophisticated to undertake such an investment.
ITEM 27. EXHIBITS
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Exhibit Number Exhibit Description
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2 Corporate Resolution showing the plan of acquisition of Lazygrocer.com Corp.
By Lazygrocer.com Inc.
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3.1 Articles of Incorporation
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3.2 Bylaws
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4 Share Certificate Specimen
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5 Legal Opinion
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10.1 Software License Agreement between Descartes Systems Group, Inc. and LazyGrocer.com
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10.2 Agreement between Rainbow Communications, Inc. and LazyGrocer.com Corporation
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10.3 Agreement between Gulf Atlantic Publishing, Inc. and LazyGrocer.com Corporation
------------------------- --------------------------------------------------------------------------------------------
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10.4 Employment agreement between Stephen Biro and LazyGrocer.com Corporation
------------------------- --------------------------------------------------------------------------------------------
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10.5 Employment Agreement between Ben Bjarnason and LazyGrocer.com Corporation
------------------------- --------------------------------------------------------------------------------------------
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10.6 Employment Agreement between LazyGrocer.com Corporation and Pierre Boss
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10.7 Agreement with Karim Rahemtulla for Consulting Services
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10.8 Agreement with International Corporate Structures, Inc.
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10.9 Agreement with Len Aronoff
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10.10 Agreement with Barcelon Investment Group
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22 Subsidiaries of Registrant
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23 Consents of Experts
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27 Financial Data Schedule
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ITEM 28. UNDERTAKINGS
The undersigned Registrant hereby undertakes:
1. To file, during any period in which it offers or sells securities, a
post-effective amendment to this registration statement to:
a. Include any prospectus required by Section 10(a) (3) of the
Securities Act of 1933;
b. Reflect in the prospectus any facts or events which, individually
or together, represent a fundamental change in the information in
the registration statement;
c. Include any additional or changed material information on the plan
of distribution.
2. That, for determining liability under the Securities Act of 1933, to
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. To 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 may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or
otherwise, the Registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against
public policy as expressed in the Act and is, therefore, unenforceable.
5. In the event that a claim for indemnification against such liabilities,
other than the payment by the Registrant of expenses incurred and paid
by a director, officer or controlling person of the Registrant in
the successful defense of any action, suit or proceeding, is asserted
by such director, officer or controlling person in connection with
the securities being registered hereby, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question
whether such indemnification by it is against public policy as
expressed in the Securities Act of 1933 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 grounds to believe that it meets all
the requirements of filing of Form SB-2 and authorized this registration
statement to be signed on its behalf by the undersigned, in the City of Ottawa,
Ontario on January 26, 2001.
LazyGrocer.com, Inc.
------------------------------------
By: Pierre Bosse
Title: President
In accordance with the requirements of the Securities Act of 1933, this
registration statement was signed by the following persons in the capacities and
on the date stated.
------------------------------------
By: Ben Bjarnason
Title: Chief Operating Officer and Director
Dates Referenced Herein
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