Attached files

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EX-31.2 - WebSafety, Inc.v167471_ex31-2.htm
EX-31.1 - WebSafety, Inc.v167471_ex31-1.htm
EX-32.2 - WebSafety, Inc.v167471_ex32-2.htm
EX-32.1 - WebSafety, Inc.v167471_ex32-1.htm

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K/A
Amendment No. 1
 
(Mark One)
 
x
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
For the fiscal year ended:  December 31, 2008
 
Or
 
¨
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
Commission File No. 333-140378
 
WEBSAFETY, INC.
 
(Exact name of small business issuer as specified in its charter)
 
Nevada
 
20-5150818
(State or other jurisdiction of incorporation or
organization)
 
(I.R.S. Employer Identification No.)

1 Hampshire Court, Newport Beach, California 92660
(Address of Principal Executive Offices)

(949) 642-7816
(Issuer’s telephone number)
 
Blindspot Alert, Inc.
2204 Timber Rose Drive, Las Vegas, Nevada 89134
(Former name, former address and former fiscal year, if changed since last report)

 Securities registered under Section 12(b) of the Exchange Act:
None

Securities registered under Section 12(g) of the Exchange Act:
Common stock $.001 par value
(Title of class)

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
.   Yes ¨ No x

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act.
Yes ¨ No x
Indicate by check mark whether issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.   Yes x No ¨

Indicate by check mark if disclosure of delinquent filers in response to Item 405 of Regulation S-B is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company.  See definition of “large accelerated filer”, “accelerated filer”, and “small reporting company” in Rule 12b-2 of the Exchange Act.  (check one)
Large accelerated filer: . ¨       Accelerated filer:  ¨      Non-accelerated filer: . ¨ Small reporting company: . x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No x
State issuer's revenues for its most recent fiscal year: $0

The aggregate market value of the voting and non-voting common equity held by non-affiliates (affiliates being, for these purposes only, directors, executive officers and holders of more than 5% of the registrant’s common stock):  0 based on 4,550,000 non-affiliate shares outstanding at $0.00 per share.  No bid price was quoted during the most recently completed second fiscal quarter.

The number of shares the registrant's of common stock, $0.001 par value per share, outstanding as of March 31, 2009 was 22,300,000

Documents incorporated by reference: none

 
 

 

Explanation For Amendment to Form 10-K

The Company is amending its from 10-K to reissue its audited financials statements for the years ended December 31, 2008 and 2007 to include the opinions of EFP Rotenberg, LLP, a registered independent public accounting firm. The previously issued financial statements were audited by Moore and Associates whose registration was revoked in August, 2009.

Additionally, the financial statements for the years ended December 31, 2008 and 2007 have been restated for matters related to the following previously reported item: The Company consummated a business combination with Texas Atlantic Capital Partners, LLC (‘Texas Atlantic”) which has been accounted for under the purchase method of accounting followed by a recapitalization of the company. The business combination resulted in the cancellation of 35,500,000 shares of common stock which has been retroactively presented in the statement of stockholders equity.  It has been recorded as if the transaction with Texas Atlantic had occurred as of the earliest period presented which is July 3, 2006 (date of inception) after giving effect to the 13,200,000 shares that were issued to Texas Atlantic in conjunction with the business combination. The recapitalization resulted in no change to total assets, Liabilities or stockholders’ equity.

In addition, interest expense for the year ended December 31, 2008 was increased to $5,022 from $22 via a reclassification from general and administrative expenses.  Also, the date of inception numbers had been previously reported in error through December 31, 2007.  The statement of operations and the statement of cash flows have been updated to include the amounts from inception through December 31, 2008.
The financial statements for the periods ended December 31, 2008 have been restated to reflect the corrections in accordance with SFAS No. 154, "Accounting Change and Error Correction".

The footnotes to the financial statements have been revised to include the disclosure of material events occurring subsequent the financial statements.

 
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Forward Looking Statements
 
This report contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 with respect to the financial condition, results of operations, business strategies, operating efficiencies or synergies, competitive positions, growth opportunities for existing products, plans and objectives of management, markets for stock of Websafety, Inc. fka Blindspot Alert, Inc. and other matters. Statements in this report that are not historical facts are “forward-looking statements” for the purpose of the safe harbor provided by Section 21E of the Securities Exchange Act of 1934, as amended, (the “Exchange Act”) and Section 27A of the Securities Act of 1933, as amended. Such forward-looking statements, including, without limitation, those relating to the future business prospects, revenues and income of Websafety, Inc. fka Blindspot Alert, Inc., wherever they occur, are necessarily estimates reflecting the best judgment of the senior management of Websafety, Inc. fka Blindspot Alert, Inc. on the date on which they were made, or if no date is stated, as of the date of this report. These forward-looking statements are subject to risks, uncertainties and assumptions, including those described in the “Risk Factors” described below, that may affect the operations, performance, development and results of our business. Because the factors discussed in this report could cause actual results or outcomes to differ materially from those expressed in any forward-looking statements made by us or on our behalf, you should not place undue reliance on any such forward-looking statements. New factors emerge from time to time, and it is not possible for us to predict which factors will arise. In addition, we cannot assess the impact of each factor on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements.
 
You should understand that the following important factors, in addition to those discussed in the “Risk Factors” section could affect our future results and could cause those results to differ materially from those expressed in such forward-looking statements:
 
•           general economic conditions;
 
•           the effectiveness of our planned advertising, marketing and promotional campaigns;
 
•           anticipated trends and conditions in the industry in which we operate, including regulatory changes;
 
•           our future capital needs and our ability to obtain financing; and
 
•           other risks and uncertainties as may be detailed from time to time in our public announcements and filings with the Securities and Exchange Commission (“SEC”).
 
Although we believe that our expectations are reasonable, we cannot assure you that our expectations will prove to be correct. Should any one or more of these risks or uncertainties materialize, or should any underlying assumptions prove incorrect, actual results may vary materially from those described in this report as anticipated, believed, estimated, expected or intended.
 
Except to the extent required by law, we undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or any other reason. All subsequent forward-looking statements attributable to us or any person acting on our behalf are expressly qualified in their entirety by the cautionary statements contained or referred to herein. In light of these risks, uncertainties and assumptions, the forward-looking events discussed in this report may not occur.

 
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TABLE OF CONTENTS

 
PAGE
PART I
 
Item 1:     Business
5
Item 1A:  Risk Factors
6
Item 1B:  Unresolved Staff Comments
8
Item 2:     Properties
8
Item 3:     Legal Proceedings
8
Item 4:     Submission of Matters to a Vote of Security Holder
8
PART II
 
Item 5:     Market for Registrant’s Common Equity. Related Stockholder Matters and Issuer  Purchases  of Equity
9
Item 6:     Selected Financial Data
9
Item 7.     Management’s Discussion and Analysis of Financial Condition and Results of  Operation
9
Item 7A:  Quantitative and Qualitative Disclosures about Market Risk
12
Item 8:      Financial Statements and Supplementary Data
12
Item 9.      Changes in and Disagreements with Accountants on Accounting and Financial  Disclosures
13
Item 9A(T)  Controls and Procedures
13
Item 9B     Other Information
14
Part III
 
Item 10:     Directors, Executive Officers and Corporate Governance
14
Item 11.     Executive Compensation
15
Item 12:     Item 12.    Security Ownership of Certain Beneficial Owners and Management and Related  Stockholder Matters
15
Item 13:     Certain Relationships and Related Transactions, and Director Independence
16
Item 14:     Principal Accounting Fees and Services
17
Part IV
 
Item 15:     Exhibits, Financial Statement Schedules
18
Exhibit 31.1
 
Exhibit 31.2
 
Exhibit 32.1
 
Exhibit 32.2
 
 
 
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PART I

ITEM 1.  BUSINESS

Business Development

We were incorporated on July 3, 2006 in the State of Nevada under the name Promotions on Wheels Holdings, Inc.  We changed our name to Blindspot Alert, Inc. on December 12, 2008 and to Websafety, Inc. in July, 2009.  The Company was originally a developmental stage company with a principal business objective of offering live promotions and marketing events utilizing unique custom built mobile displays.  On July 21, 2008, we discontinued that business.

On June 30, 2008, the Company entered into a License Agreement (“License”) with WQN, Inc., a Texas corporation (“WQN”), which, in consideration for the sum of $300,000 grants the Company the right to market and sell WQN’s WebSafety software products.  The License covers software products that have been developed by WQN and grants the Company an exclusive right for a period of 12 months to market and sell the software products through the Home Shopping Network, QVC, Inc., CVS Pharmacy, WalMart, and Walgreens and the non exclusive right to market and sell the software products worldwide.  The Company has attracted a team of experienced, professional marketing personnel to market the software products.

The License provides for the Company to retain 65% of all revenue received from the sale of CYBERSAFETY software and to pay 35% of all revenue to the Licensor, WQN.  The License Agreement requires Licensor to provide Company technical and customer support and requires Licensor to provide Company with all future updates of the software.

Business of Issuer

We are a development stage company that has not significantly commenced its planned principal operations.  Our operations to date have been devoted primarily to startup and development activities, which include the following:

1.      Development of the business plan;
2.      Research on child safety software products and potential markets;
3.      Coordination with the licensor on the development of the software products;
4.      Formulate a marketing plan and marketing campaign in an effort to introduce our products to the market;
5.      Create websites for the Company and products;
6.      Identify appropriate distribution channels utilizing independent sales representatives.

We are attempting to become operational.  In order to generate revenue we must address the following areas:

1.      Complete the development of our software products: We continue to work with the licensor and its software programmers to complete the software products and provide for the downloading of the software products from our website.
2.      Develop and implement a Marketing Plan: In order to penetrate our targeted markets, we will use a multi-faceted marketing plan that includes high-end websites and target specific marketing campaigns that are directed to specific groups whose members will benefit from the software.
3.      Creation of our website:  We have secured a website domain located at www.blindspotalert.com.  The website is currently under construction and upon securing additional funding, we will complete and enhance the website.

Since our inception on July 3, 2006, we have not generated any significant revenues and have incurred a cumulative net loss of $644,807.  We believe that we must raise additional capital of at least $1,000,000 through the sale of equity for us to become operational and sustain operations through the next twelve (12) months.  The capital raise has been budgeted to establish our infrastructure and marketing and sales campaign.  We believe that the recurring revenues from sales of software products eventually will be sufficient to support ongoing operations.  There can be no assurance that the actual expenses incurred will not materially exceed our estimates or that cash flow from sales will be adequate to maintain our business.  As a result, our independent auditors have expressed substantial doubt about our ability to continue as a going concern in the independent auditor’s report to the financial statements included in this report.

 
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We currently have three executive officers and three directors.  These individuals allocate time on a part-time basis.  We have one employee.

ITEM 1A.  RISK FACTORS

The Company was organized during 2006, is at an early stage of operation and has no substantial revenue.  The Company has recently ceased its operations in order to devote its full resources toward marketing, selling and distributing the CYBERSAFETY software products.  The earliest date the Company anticipates receiving revenue from sales of the CYBERSAFETY software is during the second half of 2009.  The Company will need to generate significant revenues to overcome an accumulated deficit and obtain profitability. The Company may never achieve profitability. If revenues grow more slowly than anticipated, or if operating expenses exceed expectations the Company’s business, results of operations, and financial condition could be materially adversely affected.

RISKS RELATING TO OUR BUSINESS

THE COMPANY HAS A LIMITED OPERATING HISTORY AND FACES SIGNIFICANT RISKS AND CHALLENGES IN BUILDING THE BUSINESS

As a result of the Company’s limited operating history, to achieve profitability, the Company must successfully and timely market and sell the CYBERSAFETY software. Although the Company has very concrete and specific marketing and sales programs to be implemented, the Company cannot guarantee the success of such programs and alternately, more expensive marketing and sales programs may need to be implemented.  Additionally, although the Company believes that a strong market exists for the CYBERSAFETY software, the Company has conducted no scientific, reliable market surveys but has only performed its own research and due diligence to ascertain the security concerns of parents and others responsible for the safety of children.  A more scientific analysis could prove that no market exists for the CYBERSAFETY software that the Company intends to market and sell; or, if the market exits, the Company may not be able to reach the market with the Company’s limited financial resources and marketing budget. There can be no assurance that the Company will be able to successfully generate revenues.  The Company has no significant historical basis to assess how it might respond to competitive, economic, regulatory, or technological challenges.  The Company’s business must be considered in light of the risks and uncertainties frequently encountered by companies in the very early stages of development, particularly companies that operate in new and rapidly developing industries and marketplaces.  The Company’s failure to adequately address these risks and uncertainties and rapidly respond to adverse developments as they occur could materially impact the Company’s ability to achieve profitability and, if profitability is achieved, to sustain a level of operations that will cause profitability to be sustained.  Although the Company intends to hire numerous people to implement the business of the Company, there is no assurance that the Company will hire the right people or that future changes will not have to be made to find the right people to implement the Company’s business strategy.  There is no assurance that the Company’s business strategy or marketing plans will achieve success.

THE COMPANY’S RELIANCE ON THE CAPABILITIES OF THE CYBERSAFETY SOFTWARE AND THE LICENSOR, WQN, INC.

The Company is heavily dependent upon the capabilities of the CYBERSAFETY software and of the ability of the Company’s Licensor, WQN, Inc., to provide technical and other support of the software. The failure of the software to accomplish the objectives as represented will hamper if not destroy the Company’s marketing efforts as will the failure or inability of WQN, Inc. to capably provide technical support for the software.

COMPANY’S RELIANCE UPON EXECUTIVES AND CONSULTANTS

The Company’s success is highly dependent upon executive officers and key consultants identified in this report for critical management decisions and to implement and pursue the Company’s business and marketing plan.  A loss of any of the executives or consultants through incapacity or for any other reason could materially adversely impact the ability of the Company to complete its business and marketing plan and would require the Company to seek the assistance of other qualified personnel who may not be available.

 
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CHALLENGES FROM COMPETITION

Although the Company is unaware of an available product that contains all the characteristics, features and capabilities of the CYBERSAFETY software, in the dynamic, ever changing field of technology, many companies of all sizes and capabilities are constantly engaged in software development.  With the notoriety given to child molesters, pedophiles and others causing harm and sometimes death to children, a reasonable assumption is that many companies are currently engaged in software development activities that will possess many of the characteristics and capabilities possessed by CYBERSAFETY software.  In the event another company successfully develops and markets a competitive product before the Company can establish a significant presence in its target markets, the Company may never be able to achieve a level of revenue to sustain the Company’s operations. In addition, there will be inherent competition from the license from WQN, as both the Company and WQN will be selling/licensing the same product to consumers and retailers.  There is no assurance that the Company’s marketing and branding programs will be more efficient than those of WQN.  Additionally, other than to those sales outlets identified above, the Company’s License is non-exclusive and WQN not only has the right to market and sell the software under its WebSafety brand in competition with Company but also has the right to issue licenses to other parties that may be more capable of marketing and selling the software than Company.

RISKS RELATED TO OUR COMMON STOCK

IF MARKET FOR OUR COMMON STOCK DOES NOT DEVELOP, OUR STOCKHOLDERS MAY BE UNABLE TO SELL THEIR SHARES.

There is currently a limited market for our common stock and we can provide no assurance that a more liquid market will develop. If a liquid market does not develop for our shares, it will be difficult for stockholders to sell their stock.  In such a case, stockholders may find that they are unable to achieve benefits from their investment.

IF A MARKET FOR OUR COMMON STOCK DEVELOPS, OUR STOCK PRICE MAY BE VOLATILE.

If a market for our common stock develops, the price at which our common stock will trade may be highly volatile and may fluctuate as a result of a number of factors, including the number of shares available for sale in the market, quarterly variations in our operating results, actual or anticipated announcements of new data, studies, products or services by us or competitors, regulatory investigations or determinations, acquisitions or strategic alliances by us or our competitors, recruitment or departures of key personnel, the gain or loss of significant customers, changes in the estimates of our operating performance, market conditions in our industry and the economy as a whole.

OVER 51% OF OUR STOCK IS CONTROLLED BY A SINGLE STOCKHOLDER WHO HAS THE ABILITY TO SUBSTANTIALLY INFLUENCE THE ELECTION OF DIRECTORS AND THE OUTCOME OF MATTERS SUBMITTED TO STOCKHOLDERS.

As of April 6, 2009, Texas Atlantic Capital Partners, LLC (“Texas Atlantic”), a limited liability company whose managing member is a director of the Company, directly owns 14,000,000 shares, which represents approximately 51% of our 27,091,669 shares of outstanding capital stock on a fully diluted basis.  As a result, TAC presently and is expected to continue to have the ability to determine the outcome of issues submitted to our stockholders.  The interests of this stockholder may not always coincide with our interests or the interests of other stockholders, and it may act in a manner that advances its best interests and not necessarily those of other stockholders.  One consequence of this substantial stockholder’s interest is that it may be difficult for investors to remove management of the Company. It could also deter unsolicited takeovers, including transactions in which stockholders might otherwise receive a premium for their shares over then current market prices.

INVESTORS’ INTERESTS IN OUR COMPANY WILL BE DILUTED AND INVESTORS MAY SUFFER DILUTION IN THEIR NET BOOK VALUE PER SHARE IF WE ISSUE ADDITIONAL SHARES OR RAISE FUNDS THROUGH THE SALE OF EQUITY SECURITIES.

In the event that we are required to issue any additional shares or enter into private placements to raise financing through the sale of equity securities, investors’ interests in our Company will be diluted and investors may suffer dilution in their net book value per share depending on the price at which such securities are sold.  If we issue any such additional shares, such issuances also will cause a reduction in the proportionate ownership and voting power of all other stockholders.  Further, any such issuance may result in a change in our control.

 
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WE HAVE NEVER PAID CASH DIVIDENDS AND DO NOT INTEND TO DO SO.

We have never declared or paid cash dividends on our common stock.  We currently plan to retain any earnings to finance the growth of our business rather than to pay cash dividends.  Payments of any cash dividends in the future will depend on our financial condition, results of operations and capital requirements, as well as other factors deemed relevant by our board of directors.

WE WILL NEED ADDITIONAL FINANCING.

We will need additional financing to maintain and expand the business, and such financing may not be available on favorable terms, if at all.  We intend to finance our business through the private placement and public offering of equity and debt securities.  Additional financing may not be available on favorable terms, if at all.  If we need funds and cannot raise them on acceptable terms, we may not be able to execute our business plan, and our shareholders may lose substantially all of their investment.

TERRORIST ATTACKS, CONTINUED WAR OR OTHER CIVIL DISTURBANCES COULD LEAD TO FURTHER ECONOMIC INSTABILITY AND ADVERSELY AFFECT OUR BUSINESS

On September 11, 2001, the United States was the target of terrorist attacks of unprecedented scope.  The United States is currently engaged in a war in Iraq.  These attacks and this war have caused instability in the marketplace and contributed to a downturn in the global economy.  In the future, there may be armed hostilities, continued war, further acts of terrorism and civil disturbances in the United States or elsewhere, which may further contribute to economic instability in the United States. Additionally, such disturbances could have a material adverse effect on our business, financial condition and operating results.

ITEM 1B.  UNRESOLVED STAFF COMMENTS

On September 29, 2009, we received comments from the SEC on our Form 10-K for the year ended December 31, 2008. We responded to all of the comments on November 20, 2009.

ITEM 2.  DESCRIPTION OF PROPERTY

We currently use the office of our CEO.  Our CEO provides the office space free of charge.  We believe that this space is currently adequate.  When we become operational we may need additional space to serve our customers.

ITEM 3.  LEGAL PROCEEDINGS

On August 25, 2009, the Company terminated its President Clifton Jolley for cause.  In late October 2009, the Company and Mr. Jolley agreed to go to arbitration which the Company believes should occur by the end of the First Quarter of 2010.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE FOR SECURITY HOLDERS

Not applicable.

 
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PART II

ITEM 5. 
MARKET FOR REGISTRANT’S COMMON EQUITY.  RELATED STOCKHOLDERS MATTERS AND ISSUERPURCHASE OF EQUITY SECURITIES

Market Information

Our common stock is quoted on the OTCBB under the symbol “BSAL”.  The following table shows the high and low bid prices of our common stock, as quoted on the OTCBB, by quarter during our last fiscal year when trading began.  These quotes reflect inter-dealer prices, without retail markup, markdown or commissions and may not represent actual transactions.  The information below was obtained from the OTCBB, for the respective periods.

Year Ending December 31, 2009
 
High
   
Low
 
1st Quarter (through April 6, 2009)
  $ 1.60     $ 0.55  
Year Ended December 31, 20081
               
1st Quarter
  $ 0.00     $ 0.00  
2nd Quarter
    0.00       0.00  
3rd Quarter
    0.35       0.15  
4th Quarter
    0.55       0.50  

1   Over-the-counter market quotations may reflect inter-dealer prices, without retail mark-up, mark-downs or commissions and      may not necessarily represent actual transactions.

Holders

As of April 6, 2009, there were approximately 20 holders of record of our common stock.  This number does not include beneficial owners of common stock whose shares are held in the names of various dealers, clearing agencies, banks, brokers and other fiduciaries.

Dividends

We have never declared or paid any dividends.  We anticipate, as our board of directors deems appropriate, that we will continue to retain all earnings for use in our business.

Securities Authorized For Issuance Under Equity Compensation Plans

None.

Item 6.  SELECTED FINANCIAL DATA

We are a smaller reporting company as defined in 17 CFR229.10(f)(I) and are not required to provide information required by this item, per Item 301 of Regulation S-K (17 CFR 229.201)

ITEM 7. 
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OFOPERATIONS

Plan of Operations

Websafety, Inc. fka Blindspot Alert, Inc. (the Company), a development stage company, formerly known as Promotions on Wheels Holdings, Inc. has, beginning in April 2008, commenced a corporate redirection with the objective of marketing and selling through the internet a range of software applications and services for computers and cell phones that allow parents or other caregivers to monitor and be notified of occurrences of predator advances, cyber bullying and pornography received on children’s computers. The cell phone application would also restrict text messaging while driving and provide location information to parents through the use of GPS technology. In June 2008 the Company acquired for $300,000 a worldwide non exclusive license that permits the Company to sell the proprietary software that identifies the threats from predators, cyber bullies and transmitters of pornography. The license also allows for selective exclusivity within certain markets.

 
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Management believes that the licensed products are a timely solution to the dangers that come with the unprecedented access to information and people that the internet and cell phones provide.

We intend to begin commercial operations in the second half of 2009.  We also intend to market the products and services by developing relationships with “trusted” sources consisting of child protection advocacy groups including church, school and civic organizations.  We intend to also explore opportunities to enter into strategic revenue sharing partnerships with companies having synergy with our products.  These partners may include auto insurers and cell phone manufacturers.

In November 2008, we executed an option to acquire licensing rights to software that provides digital rights management to email and other data transmitted over the internet.  We intend to begin selling this proprietary software in 2009.  The option expired on April 1, 2009.  We are currently negotiating an extension of the option.  Due diligence efforts are currently being conducted.

In 2008, we raised $1,170,800 in new equity funding through the sale of common and preferred stock, the proceeds of which are being used to implement our plan of operations. As of year-end 2008, we had invested $150,963 in website development, this in the furtherance of our marketing efforts and in addition to the $300,000 spent to secure the licensing noted above.

Results of Operations

For the year ended 2008 we sustained a net operating loss of $437,656 as compared to a loss of $188,094 for the same twelve month period ended December 31, 2007. In 2007 we had revenues of $201,536 contrasted to 2008 in which we had no revenue. From inception in July 2006, the Company has generated a total of $644,807 in net operating losses.

The table below highlights on a line item basis the significant elements of expense during the two periods that constituted the preponderance of expense incurred.

   
Year Ended December 31,
   
Difference Over
 
Expense Category
 
2008
   
2007
   
(Under) 2007
 
Cost of Operations
  $ 5,757     $ 110,956     $ (105,199 )
General and Administrative
                       
Payroll
      32,400           -         32,400  
Insurance D&O
      13,500            -         13,500  
Accounting
      34,125           11,200         22,925  
Consulting
      87,500           133,002          
Legal
      121,202           5,500          -11,800  
Marketing
       89,093           -          83,593  
Travel
      46,484           -         46,484  
Other Professional
    -       12,537       -12,537  
Other
       -           110,956          110,956  
Totals    
  $ 427,661     $ 273,195     $  151,109  
 
In 2008 as opposed to 2007 the Company initiated and completed an initial round of financing which resulted in a significant increase in accounting and legal costs as compared to 2007. The balance of the increased costs noted in 2008 in contrast to 2007 related to pre launch consulting, marketing and travel.  Corporate operational activities in 2008 have increased substantially over prior periods.  We intend to become fully operational in the second half of 2009 which would result in revenue generation and an expansion of marketing and administrative activities.

 
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Liquidity

As noted previously, through December 31, 2008 we raised $1,170,800 in new equity. To support planned operations through 2009 and beyond, additional capital will be required. In that regard it is management’s intent to continue fund raising efforts to generate the capital required to support expanding operations.

Recent Accounting Pronouncements

On November 5, 2007, the SEC issued FASB ASC 815-10-S99-1(Prior authoritative literature: SAB No. 109, Written Loan Commitments Recorded at Fair Value Through Earnings).  ASC 815-10-S99-1 provides guidance on the accounting for written loan commitments recorded at fair value under generally accepted accounting principles. Specifically, the ASC 815-10-S99-1 revises the Staff’s views on incorporating expected net future cash flows related to loan servicing activities in the fair value measurement of a written loan commitment. ASC 815-10-S99-1, which supersedes SAB 105, Application of Accounting Principles to Loan Commitments, requires the expected net future cash flows related to the associated servicing of the loan be included in the measurement of all written loan commitments that are accounted for at fair value through earnings.  ASC 815-10-S99-1 is effective in fiscal quarters beginning after December 15, 2007.  The adoption of ASC 815-10-S99-1 did not have a material impact on our financial statements.

In December 2007, the Financial Accounting Standards Board (“FASB”) issued ASC 805(Prior authoritative literature: SFAS No. 141(R), Business Combinations, which replaces SFAS No. 141). ASC 805 establishes principles and requirements for how an acquirer recognizes and measures in its financial statements the identifiable assets acquired, the liabilities assumed, any non-controlling interest in the acquiree and the goodwill acquired. The statement also establishes disclosure requirements which will enable users to evaluate the nature and financial effects of the business combination. ASC 805 is effective for calendar year companies on January 1, 2009.  We do not anticipate that the adoption of ASC 805 will have a material effect on accounting for business combinations once adopted, but the effect is dependent upon acquisitions at that time.

In March 2008, the FASB issued FASB ASC 815-10 (Prior authoritative literature: SFAS No. 161, Disclosures about Derivative Instruments and Hedging Activities, and amendment of SFAS No. 133). This statement will require additional disclosures about how and why we use derivative financial instruments, how derivative instruments and related hedged items are accounted for under ASC 815(Prior authoritative literature: SFAS No. 133, “Accounting for Derivative Instruments and Hedging Activities”, as amended and interpreted), and how derivative instruments and related hedged items affect our financial position, results of operations, and cash flows. ASC 815-10 is effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008; however early adoption is encouraged, as are comparative disclosures for earlier periods. We do not believe that the adoption of ASC 815-10 will have a material impact on our financial statements.

In April 2008, the FASB issued ASC 350-30(Prior authoritative literature: FASB Staff Position No. 142-3, Determination of the Useful Life of Intangible Assets). ASC 350-30 amends the factors that should be considered in developing renewal or extension assumptions used to determine the useful life of a recognized intangible asset under ASC 350(Prior authoritative literature: SFAS No. 142, “Goodwill and Other Intangible Assets”) and also requires expanded disclosure related to the determination of intangible asset useful lives. ASC 350-30 is effective for fiscal years beginning after December 15, 2008. Early adoption is prohibited. We do not believe the adoption of ASC 350-30 will have a material impact on our financial statements.

In May 2008, the FASB issued ASC 470(Prior authoritative literature: FSP APB 14-1, Accounting for Convertible Debt Instruments That May Be Settled in Cash upon Conversion). ASC 470 requires issuers of convertible debt instruments that may be settled in cash upon conversion to account separately for the liability and equity components in a manner that will reflect the entity’s nonconvertible debt borrowing rate when interest cost is recognized in subsequent periods. ASC 470 is effective for financial statements issued for fiscal years beginning after December 15, 2008, and interim periods within those fiscal years. We do not anticipate that the adoption of ASC 470 will have a material effect on our results of operations or financial position.

In May 2008, the Financial Accounting Standards Board (“FASB”) issued FASB ASC 944 (Prior authoritative literature: FASB Statement 163, "Accounting for Financial Guarantee Insurance Contracts—an interpretation of FASB Statement No. 60). FASB ASC 944 interprets Statement 60 and amends existing accounting pronouncements to clarify their application to the financial guarantee insurance contracts included within the scope of that Statement.  FASB ASC 944 is effective for financial statements issued for fiscal years beginning after December 15, 2008, and all interim periods within those fiscal years. ASC 944 has no effect on the Company’s financial position, statements of operations, or cash flows at this time.

 
11

 

In May 2009, the FASB issued FASB ASC 855-10 (prior authoritative literature, FSB No. FAS 165, “Subsequent Events”). FASB ASC 855-10 established general standards of accounting for and disclosure of events that occur after the balance sheet date but before financial statements are issued. FASB ASC 855-10 is effective for interim or annual financial periods ending after June 15, 2009. FASB ASC 855-10 did not have a material effect on the financial position, cash flows, or results of operations.

In June 2009, the FASB issued FASB ASC 105-10 (prior authoritative literature, FSB No. FAS 168, “The FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles—a replacement of FASB Statement No. 162). FASB ASC 105-10 replaces SFAS 162 and establishes the FASB Accounting Standards Codification as the source of authoritative accounting principles recognized by the FASB to be applied by nongovernmental entities in the preparation of financial statements in conformity with GAAP.  FASB ASC 105-10 is effective for financial statements issued for interim and annual periods ending after September 15, 2009.  As such, the Company is required to adopt this standard in the current period.  Adoption of FASB ASC 105-10 did not have a significant effect on the Company’s consolidated financial statements.
 
ITEM 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

At December 31, 2008, we have invested our cash in money market accounts and marketable securities. We consider any liquid investment with an original maturity of three months or less when purchased to be cash equivalents. We adhere to an investment policy which requires that all investments be investment grade quality and no more than ten percent of our portfolio may be invested in any one security or with one institution.

ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

CONTENTS

 
PAGE
 Report of Independent Registered Public Accounting Firm
F-1
   
FINANCIAL STATEMENTS
 
Balance Sheets As Of December 31, 2008 and 2007
F-2
Statements of Operations for the years ended December 31, 2008 and 2007 and for the period
   Since inception (July 3, 2006) through December 31, 2008
F-3
Statements of Stockholders’ Equity (Deficit) for the period of inception (July 3, 2006) through December 31, 2008
F-4
Statements of Cash Flows for the years ended December 31, 2008 and 2007 and for the period
   Since inception (July 3, 2006) through December 31, 2008
F-5
 
 
12

 

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of
Websafety, Inc. fka Blindspot Alert, Inc.

We have audited the accompanying balance sheets of Websafety, Inc. fka Blindspot Alert, Inc. as of December 31, 2008 and 2007, and the related statements of operations, change in stockholders’ equity (deficit), and cash flows for the years then ended and for the period since inception (July 3, 2006) through December 31, 2008.  Websafety, Inc. fka Blindspot Alert, Inc.’s management is responsible for these financial statements. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Websafety, Inc.fka Blindspot Alert, Inc. as of December 31, 2008 and 2007, and the results of its operations and its cash flows for the years then ended and for the period since inception (July 3, 2006) through December 31, 2008in conformity with accounting principles generally accepted in the United States of America.

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern.  As discussed in Note 2 to the financial statements, the Company has an accumulated deficit of $644,807, which raises substantial doubt about its ability to continue as a going concern.  Management’s plans concerning these matters are also described in Note 2.  The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

/s/ EFP Rotenberg, LLP

EFP Rotenberg, LLP
Rochester, New York
November 20, 2009

 
F-1

 
 
WEBSAFETY, INC..
Formerly Known as Blindspot Alert, Inc.
A Development Stage Company
BALANCE SHEETS
 
   
Restated
December 31,
 
   
2008
   
2007
 
             
ASSETS
           
             
Current assets:
           
Cash
  $ 224,269     $ 314  
Advance to shareholder
    -       1,592  
Prepaid expense
    7,137       -  
Total current assets
    231,406       1,906  
                 
Property and Equipment
               
Software license and website development
    450,963       -  
Other property and equipment
    -       10,243  
Total property and equipment
    450,963       10,243  
                 
Other Assets- Option to acquire
    95,000       -  
    $ 777,369     $ 12,149  
                 
LIABILITIES AND STOCKHOLDERS' EQUITY
               
                 
Current liabilities:
               
Advance from shareholder
  $ 1,104     $ 20,000  
Accounts payable
    37,116       -  
Accrued expense
    56       5,000  
Lease payable
    -       6,000  
Total current liabilities
    38,276       31,000  
                 
Stockholders' equity
               
Preferred stock; $.001 par value, 25,000,000 shares authorized, 3,833,335 and zero shares issued and outstanding respectively
    3,832       -  
                 
Common stock; $.001 par value, 300,000,000 shares authorized, 22,300,000 and 14,700,000 shares issued and outstanding, respectively
    22,300       14,700  
                 
Subscription receivable
    (200 )     -  
                 
Additional paid in capital
    1,357,968       173,600  
Deficit accumulated during development stage
    (644,807 )     (207,151 )
Total stockholders' equity
    739,093       (18,851 )
                 
    $ 777,369     $ 12,149  

The accompanying notes are an integral part of these financial statements.

 
F-2

 

WEBSAFETY, INC.
Formerly Known as Blindspot Alert, Inc.
A Development Stage Company
STATEMENTS OF OPERATIONS
For the years ended December 31, 2008, 2007 and the period
from inception July 3, 2006 to December 31, 2008

   
Restated
Years Ended December 31,
   
Restated
July 3, 2006
(Date of inception)
to
 
    
2008
   
2007
   
December 31, 2008
 
                   
Revenue
  $ -     $ 201,536     $ 231,536  
                         
Operating expenses:
                       
Cost of Operations
    5,757       110,956       125,030  
General and administrative expenses (including fees paid to related parties per note 8)
    427,661       273,195       738,416  
Depreciation and amortization expense
    -       2,597       3,478  
Total operating expenses
    438,418       386,748       871,924  
                         
(Loss) from operations
    (438,418 )     (185,212 )     (640,388 )
                         
Other income (expenses):
                       
Interest income
    -       100       109  
Loss on sale of equipment
    (5,216 )     -       (5,216 )
Other income
    6,000       -       6,000  
Interest expense
    (5,022 )     (2,982 )     (10,312 )
Total other income (expenses)
    762       (2,882 )     (4,419 )
                         
(Loss) before provision for income taxes
    (437,656 )     (188,094 )     (644,807 )
Provision for income taxes
    -               -  
                         
Net (loss)
  $ (437,656 )   $ (188,094 )   $ (644,807 )
                         
Basic and diluted loss per common share
  $ (0.024 )   $ (0.013 )   $ (0.040 )
                         
Basic and diluted weighted average common shares outstanding
    18,483,333       14,700,000       16,213,333  

The accompanying notes are an integral part of these financial statements.

 
F-3

 

WEBSAFETY, INC.
Formerly Known as Blindspot Alert, Inc.
A Development Stage Company
CONDENSED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
For the years ended December 31, 2008, 2007 and the period
from inception July 3, 2006 to December 31, 2008

                                       
Accumulated
       
                                       
(Deficit)
       
                                 
Additional
   
during
   
Total
 
   
Preferred Stock
   
Common Stock
   
Subscription
   
Paid-in
   
development
   
Stockholders'
 
   
Shares
   
Amount
   
Shares
   
Amount
   
Receivable
   
Capital
   
stage
   
Equity (Deficit)
 
Balance at July 3, 2006
                                               
(Date of Inception)
    -       -       14,700,000       14,700             173,600       -       188,300  
                                                               
Net loss for the period ended December 31, 2006
    -       -       -       -             -       (19,057 )     (19,057 )
                                                               
Balances December 31, 2006
    -       -       14,700,000       14,700       -       173,600       (19,057 )     169,243  
                                                                 
Net loss for the period ended December 31, 2007
    -       -       -       -               -       (188,094 )     (188,094 )
                                                                 
Balances  December 31, 2007
    -       -       14,700,000       14,700       -       173,600       (207,151 )     (18,851 )
                                                                 
Issuance of preferred stock for cash
                                                               
June 20, 2008 six issuances at $0.30
    2,083,336       2,083                               622,917               625,000  
July 2, 2008 one issuance at $0.30
    666,667       667                               199,333               200,000  
November 6, 2008 one issuance at$0.30
    333,333       333                               99,667               100,000  
November 13, 2008 one issuance at$0.30
    83,333       83                               24,917               25,000  
December 17, 2008 two issuances at $0.30
    666,666       666                               199,334               200,000  
                                                                 
Issuance of common stock for cash
                                            -               -  
May 1, 2008 six issuances at $0.001
                    2,525,000       2,525               -               2,525  
June 30, 2008 two issuances t $0.001
                    1,175,000       1,175               -               1,175  
Acquisition of Cash in connection
                                                               
With  recapitalization
                                            13,200               13,200  
July 11, 2008 one issuance at $0.001 for services
                    2,400,000       2,400                               2,400  
July 15, 2008 one issuance at $0.001
                    100,000       100               -               100  
September 18, 2008 two issuances at $.001
                    1,200,000       1,200               -               1,200  
December 5, 2008 one issuance at $0.001
                    200,000       200       (200 )     -               -  
Voluntary conversion of shareholder advance to paid in capital
                                            25,000               25,000  
                                                                 
Net loss for the period ended December 31, 2008
                                                    (437,656 )     (437,656 )
                                                                 
Balances  December 31, 2008
    3,833,335       3,832       22,300,000       22,300       (200 )     1,357,968       (644,807 )     739,093  

The accompanying notes are an integral part of these financial statements.

 
F-4

 
 
WEBSAFETY, INC.
Formerly Known as Blindspot Alert, Inc.
A Development Stage Company
STATEMENTS OF CASH FLOWS
For the years ended December 31, 2008, 2007 and the period from
inception, July 2, 2006 to December 31, 2008

               
July 3, 2006
 
               
(Date of inception)
 
   
Years Ended December 31,
   
to
 
   
2008
   
2007
   
December 31, 2008
 
Operating activities:
                 
Net loss
  $ (437,656 )   $ (188,094 )   $ (644,807 )
Adjustments to reconcile net loss to net cash used in operating activities:
                       
Depreciation expense
    -       2,597       3,478  
Stock issued for services
    2,400       20,000       32,400  
Loss on sale of equipment
    5,216       -       5,216  
Changes in operating assets and liabilities:
                       
Decrease in accounts receivable
    -       8,500       -  
(Increase) in prepaid expense
    (7,137 )     -       (7,137 )
Increase (decrease)  in accounts payable
    37,116       (244 )     37,116  
(Decrease)Increase in lease payable
    (6,000 )     6,000       -  
(Decrease)   in accrued expense
    (4,944 )     (8,217 )     56  
Net cash (used in) operating activities
    (411,005 )     (159,458 )     (573,878 )
                         
Investing activities:
                       
Purchase of long term assets- net
    (450,963 )     (2,812 )     (454,884 )
Investment in option to acquire
    (95,000 )     -       (95,000 )
Advance to/from shareholder
    -       (3,636 )     -  
Net cash (used in) investing activities
    (545,963 )     (6,448 )     (549,884 )
                         
Financing activities:
                       
Advances from Shareholder
    7,496       -       25,904  
Proceeds from sale of equipment
    5,026       -       5,026  
Proceeds from stock sales
    1,168,401       148,500       1,316,901  
Net cash provided by financing activities
    1,180,923       148,500       1,347,831  
                         
Net changes in cash
    223,955       (17,406 )     224,269  
                         
Cash, beginning of period
    314       17,720       -  
                         
Cash, end of period
  $ 224,269     $ 314     $ 224,269  
                         
Cash paid during the year for:
                       
                         
Interest
  $ 5,022     $ 2,982     $ 10,290  
Income Taxes
    -       -       -  
Non Cash Investing and Financing Activities:
                       
Voluntary conversion of shareholder advance to paid in capital
  $ 25,000     $ -     $ 25,000  
Issuance of common stock for services
  $ 2,400     $ 20,000     $ 30,000  
Common stock issued for equipment
  $ -     $ -     $ 9,800  

The accompanying notes are an integral part of these financial statements.

 
F-5

 

WEBSAFETY, INC.
Formerly Known as Blindspot Alert, Inc.
(A Development Stage Company)
NOTES TO THE FINANCIAL STATEMENTS

Note 1.  Nature of Business and Summary of Significant Accounting Policies

Nature of business and organization

Websafety, Inc. fka Blindspot Alert, Inc. fka Promotions on Wheels Holdings, Inc., a Nevada corporation, (hereinafter referred to as the “Company”) was incorporated in the State of Nevada on July 3, 2006.  The Company from inception through June 2008 had been in the business of offering live promotions and marketing events.

 In June 2008 a majority ownership change was made and the business emphasis was shifted to the marketing and sales through the internet of software and services that allow parents or other caregivers to monitor and be notified of occurrences of predator advances, cyber bullying and pornography. The Company operates under a world-wide licensing agreement that allows for selective exclusivity within certain markets and expects to begin full scale operations in 2009.

On June 20, 2008, The Company issued 13,200,000 shares of its common stock to Texas Atlantic Capital Partners, LLC, (“Texas Atlantic”).  The issuance of these shares represented approximately 62% of the then outstanding stock. The issuance resulted in a change of control and meets the definition of a business combination under paragraph 9, of Statement of Financial Accounting Standards No 141, Business Combinations (FAS 141).  Concurrent with the issuance of the shares to Texas Atlantic, the shareholders elected to cancel certain shares in order to effect the desired post change in control ownership ratio.

The business combination will be accounted for under the purchase method of accounting followed by a recapitalization of the company. The issuance of the 13,200,000 shares and the cancellation of the 35,500,000 shares of common stock will be retroactively presented in the statement of stockholders equity as if the  transaction with Texas Atlantic had occurred as of the earliest period presented. See Note 6.

Development Stage Company

The Company is considered to be in the development stage as defined in FASB ASC 915(Prior authoritative literature: Statement of Financial Accounting Standards (SFAS) No. 7, “Accounting and Reporting by Development Stage Enterprises”). The Company has devoted substantially all of its efforts to business planning and development. Additionally, the Company has allocated a substantial portion of its time and investment to bringing its product to the market and to raising capital.

Use of estimates

The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make certain estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes.  The Company is subject to uncertainty of future events, economic, environmental and political factors and changes in the Company's business environment; therefore, actual results could differ from these estimates.  Accordingly, accounting estimates used in the preparation of the Company's financial statements will change as new events occur, more experience is acquired, as additional information is obtained and as the Company's operating environment changes.  Changes are made in estimates as circumstances warrant.  Such changes in estimates and refinement of estimation methodologies are reflected in the statements.
 
Cash and cash equivalents- concentration of risk

Cash and cash equivalents include interest bearing and non-interest bearing bank deposits, money market accounts, and short-term instruments with a liquidation provision of three months or less.
 
The Company maintains its cash in institutions insured by the Federal Deposit Insurance Corporation (FDIC).  This government corporation insured balances up to $100,000 through October 13, 2008.  As of October 14, 2008 all non-interest bearing transaction deposit accounts at an FDIC-insured institution, including all personal and business checking deposit accounts that do not earn interest, are fully insured for the entire amount in the deposit account.  This unlimited insurance coverage is temporary and will remain in effect for participating institutions until December 31, 2009.

 
F-6

 

WEBSAFETY, INC.
Formerly Known as Blindspot Alert, Inc.
(A Development Stage Company)
NOTES TO THE FINANCIAL STATEMENTS

Note 1.  Nature of Business and Summary of Significant Accounting Policies- continued

All other deposit accounts at FDIC-insured institutions are insured up to at least $250,000 per depositor until December 31, 2009.  On January 1, 2010, FDIC deposit insurance for all deposit accounts, except for certain retirement accounts, will return to at least $100,000 per depositor.  Insurance coverage for certain retirement accounts, which include all IRA deposit accounts, will remain at $250,000 per depositor.
 
Income taxes

The Company accounts for its income taxes in accordance with FASB ASC 740(Prior authoritative literature: SFAS No. 109), which requires recognition of deferred tax assets and liabilities for future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and tax credit carry forwards.  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.  The effect on deferred tax assets and liabilities of a change in tax rates is recognized in operations in the period that includes the enactment date.

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial statement purposes and the amounts used for income tax purposes.  Significant components of the Company’s deferred tax liabilities and assets as of December 31, 2008 are as follows:

Deferred tax assets:
     
Net operating loss
  $ 435,256  
Income tax rate
    34 %
      147,987  
Less valuation allowance
    (147,987 )
Net
    -  

Through December 31, 2008, a valuation allowance has been recorded to offset the deferred tax assets, including those related to the net operating losses.  At December 31, 2008, the Company had approximately $644,800 of federal and state net operating losses.  The net operating loss carry forwards, if not utilized will begin to expire in 2025. T he utilization of these losses for tax purposes will be limited due to the operation of Internal Revenue Code Section 382 which restricts the utilization of net operating loss carry forwards is circumstances where there is a more than 51% change of control in a company.

Reconciliations of the U.S. federal statutory rate to the actual tax rate for the years ended December 31, 2008 and 2007 are as follows:
 
     
2008
   
2007
 
Federal statutory income tax rate
    34.0 %     34.0 %
State tax net of federal benefit
    0.0 %     0.0 %
        34.0 %     34.0 %
Increase in valuation allowance
    (34.0 )%     (34.0 )%
 
Effective tax rate
    0.0 %     0.0 %

Net loss per common share

The Company computes net loss per share in accordance with FASB ASC 260-10(Prior authoritative literature: SFAS No. 128, Earnings per Share and SEC Staff Accounting Bulletin No. 98).  Under the provisions of ASC 260-10, basic net loss per share is computed by dividing the net loss available to common stockholders for the period by the weighted average number of shares of common stock outstanding during the period.  The calculation of diluted net loss per share gives effect to common stock equivalents; however, potential common shares are excluded if their effect is anti-dilutive.

 
F-7

 

WEBSAFETY, INC.
Formerly Known as Blindspot Alert, Inc.
(A Development Stage Company)
NOTES TO THE FINANCIAL STATEMENTS

Note 1.  Nature of Business and Summary of Significant Accounting Policies- continued

Revenue recognition

Revenues are recognized at the time a sale is complete.

Accounts receivable and billing

The Company will be conducting sales primarily through the internet utilizing merchant services for the processing of customer credit card or other electronic means of paying. It is not expected that there will be any significant amount of trade receivables that will result from operations.
 
 Property and equipment
 
Property and equipment are stated at cost net of accumulated amortization and at December 31, 2008 consisted primarily of web site development costs and software licensing fees. No amortization has been taken as of the statement date since revenue operations have not commenced.  Amortization is computed using the straight-line method over the estimated useful life of the related asset.  Expenditures for maintenance, repairs and renewals of minor items are expensed as incurred.  The estimated useful lives are as follows:

Software License
5 Years
Web Site Development
5 Years

Fair value of financial instruments

The FASB ASC 320-12-65(Prior authoritative literature: SFAS No 107, “Disclosures about Fair Value of Financial Instruments”), requires the determination of fair value of the Company’s financial assets and liabilities.  The estimated fair values of financial instruments were determined by management using available market information and appropriate valuation methodologies.  The carrying amounts of financial instruments including cash and advance from shareholder approximate their fair value because of their short maturities.

 Web Site Development Costs

The Company has incurred web site development costs as part of web site application and infrastructure development activities.  Specific activities include coordination of design, engineering, initial integration and design modifications, script writing, web site designs and revisions, application side designs, pre-video production build/test flash prototype for oversize video browser scaling, eCommerce engine, etc.  All of these development costs were capitalized as of December 31, 2008 in accordance with EITF 00-2, “Accounting for Web Site Development Costs.” The total capitalized web site development costs were $150,963 at December 31, 2008.

Stock Based Compensation

We follow the provisions of FASB ASC 718(Prior authoritative literature: SFAS No. 123R, “Share-Based Payment”). FASB ASC 718 requires recognition in the financial statements of the cost of employee services received in exchange for an award of equity instruments over the period the employee is required to perform the services in exchange for the award (presumptively the vesting period). FASB ASC 718 also requires measurement of the cost of employee services received in exchange for an equity award based upon the grant-date fair value of the award. We account for non-employee share-based awards in accordance with FASB ASC 505-50(Prior authoritative literature: EITF No. 96-18, “Accounting for Equity Instruments that are Issued to Other than Employees for Acquisition, or in Conjunction with Selling Goods or Services”).

 
F-8

 

WEBSAFETY, INC.
Formerly Known as Blindspot Alert, Inc.
(A Development Stage Company)
NOTES TO THE FINANCIAL STATEMENTS

Note 2.  Going Concern

The accompanying financial statements have been prepared assuming the Company will continue as a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business.  The Company incurred cumulative net losses of approximately $644,807 from the period of July 3, 2006 (Inception) through December 31, 2008 and has used significant cash in support of its operating activities raising substantial doubt about the Company’s ability to continue as a going concern.  The Company in 2008 has raised additional capital and will seek additional sources of capital through the issuance of debt or equity financing, but there can be no assurance the Company will be successful in accomplishing its objectives.
 
The ability of the Company to continue as a going concern is dependent on additional sources of capital and the success of the Company’s plan.  The financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts or the amount and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.
 
Note 3. Concentration of Credit Risk

For the year ended December 31, 2008 the Company had no revenues. In 2007, three customers represented 100% of the Company’s revenues.

Note 4.  Property and Equipment

Property and equipment consist of the following at December 31, 2008 and 2007:

     
2008
   
2007
 
Software Licensing*
    $ 300,000       -  
Web Site Development
      150,963       -  
Equipment- Net
      -     $ 10,243  
 
Total
  $ 450,963     $ 10,243  

*On June 30, 2008 we entered into a license agreement with WQN, Inc., whose common stock trades on the pink sheets under the symbol WQNI. Under the agreement we have the right to license its software technology on a non-exclusive worldwide basis and offer the software on an exclusive basis to: Home Shopping Network, QVC, Inc., Walgreens Drugstore, CVS Pharmacy and Walmart. We have paid a one time fee of $300,000 and will pay a 35% royalty on any net licensing revenue collected by us. The initial term of the license granted pursuant to this agreement shall be perpetual.

Depreciation expense for fiscal 2008 and 2007 totaled $0 and $2,597, respectively.

Note 5.  Option to acquire

In November 2008 the Company entered into an option agreement with Auburg Adams LLC (AA) a Texas limited liability company to acquire certain software licensing rights it had contracted for pursuant to a licensing agreement entered into with Essential Security Software, Inc. the developer. The option allows the Company to secure the rights of Auburg Adams once a payment of $270,000 has been made. Any payments made pursuant to the terms of the option to acquire are to be credited to the overall price of the licensing should the option be exercised. The rights that Auburg Adams has been granted are for the marketing and sales of software that provides for total digital rights management  enabling users to exercise complete control over email transmissions and any attachments related to those transmissions to include restriction of forwarding and timed removal from a recipient computer.  This licensing is for an initial five- year period and is automatically renewable for periods thereafter. The overall cost for the rights is $270,000.

 
F-9

 

WEBSAFETY, INC.
Formerly Known as Blindspot Alert, Inc.
(A Development Stage Company)
NOTES TO THE FINANCIAL STATEMENTS

The option expires on April 1, 2009 but requires periodic payments as outlined below to maintain the option.

Option Maintenance Payment Dates
 
Option Payment Amounts
 
January 1, 2009
  $ 50,000  
February 1, 2009
  $ 50,000  
March 1, 2009
  $ 50,000  
April 1, 2009
  $ 25,000  

Websafety Inc. fka Blindspot Alert, Inc. can exercise the option any time during the option period or let the option lapse by not making a required payment. Through December 31, 2008 the Company had made option payments totaling $95,000.

A principal of Auburg Adams LLC is a minority shareholder in Websafety, Inc. fka Blindspot Alert, Inc.

Note 6.  Ownership change

On June 20, 2008, The Company issued 13,200,000 shares of its common stock to Texas Atlantic Capital Partners. The issuance of these shares represented approximately 62% of the then outstanding stock. The issuance resulted in a change of control and meets the definition of a business combination under paragraph 9, of Statement of Financial Accounting Standards No 141, Business Combinations (FAS 141).

In accordance with FAS 141, the business combination was accounted for under the purchase method of accounting. Under the purchase method of accounting, the cost of the acquired entity shall be allocated to the assets acquired and the liabilities assumed based on their relative fair values at the date of the acquisition.

The Company has measured the fair values at the date of the business and concluded that the fair values approximated their book values. The Company has also analyzed the assets acquired to determine if any intangible assets were acquired that meet the criteria for separate valuation under FAS 141 and concluded that no such intangible existed. After allocating the cost of the assets acquired and the liabilities assumed based on their relative fair values, the company concluded that their fair values approximated their book values and accordingly no goodwill was recorded.

The business combination was accounted for under the purchase method of accounting followed by a recapitalization of the company. The issuance of the 13,200,000 shares and the cancellation of the 35,500,000 shares of common stock was retroactively presented in the statement of stockholders equity as if the  transaction with  Texas Atlantic had occurred as of the earliest period presented.

Also, effective June 30, 2008, we agreed to issue shares of our Series A Convertible Preferred Stock at a price of $.30 per share in a private placement to accredited investors up to a maximum of $1,200,000. Through December 31, 2008 3,833,335 preferred shares had been sold for $1,150,000 pursuant to this offering. Each preferred share may be converted into 1.25 common shares. We intend to sell a maximum of 4,000,000 preferred shares.

Note 7.  Stock Issuances

During 2008 we had the following common and preferred stock issuances.

Common Stock- All issuances were made at $0.001
 
Date
 
For Cash or Services
 
Number of Shares
   
Value
 
May 2008
 
Cash
    2,525,000     $ 2,525  
June  2008
 
Cash
    1,175,000       1,175  
July 2008
 
Services
    2,400,000       2,400  
July 2008
 
Cash
    100,000       100  
September 2008
 
Cash
    1,200,000       1,200  
December 2008
 
Cash
    200,000        200  
Total Common Issuances
    7,600,000     $ 7,600  

 
F-10

 

WEBSAFETY, INC.
Formerly Known as Blindspot Alert, Inc.
(A Development Stage Company)
NOTES TO THE FINANCIAL STATEMENTS

Preferred Stock- All issuances were for cash at $0.30 per share
 
Date
 
Number of Shares
   
Value
 
June  2008
    2,083,336     $ 625,000  
July 2008
    666,667       200,000  
November  2008
    416,666       125,000  
December 2008
    666,666       200,000  
Total Preferred Issuances
    3,833,335     $ 1,150,000  

Note 8.  Related Party Transactions

In the aggregate, during 2008, the Company paid to related parties $241,225 for consulting, legal and marketing services as reflected below.

Paid To
 
Consulting
   
Legal
Services
   
Marketing
   
Accounting
 
Texas Atlantic Capital Partners LLC
  $ 58,500                    
Rowland W. Day II
          $ 63,632              
Robertson Schwartz Agency
                  $ 89,093        
Robert J. Salluzzo
                          $ 30,000  

Texas Atlantic Capital Partners LLC and Rowland W. Day II are affiliates in that Texas Atlantic is a majority and more than 10% shareholder in the Company, Mr. Day is its CEO and Rusty Schwartz, a principal in Robertson Schwartz Agency is President and a member of Websafety, Inc. fka Blindspot Alert’s Board of Directors. Robert J. Salluzzo is a stockholder.

The services that were provided are explained below.

Consulting- Consulting services consisted of the coordination of web design and marketing efforts aimed at product launch to include the evaluation of the appropriate merchant service agencies to be used as well as working with management relating to general corporate matters associated with business plan implementation.

Legal- Rowland Day is the Company’s SEC attorney and is responsible for all quarterly and annual filings as well as any other filings required as a result of the actions of the Company. In addition Mr. Day initiated and provided oversight to the process that resulted in the name change to Blindspot Alert, Inc. and Websafety, Inc.

Marketing- Marketing fees paid relate to the development of a comprehensive marketing plan whose objective is to build brand and product awareness through planned media and other exposures.

Accounting-Accounting fees paid relates to the review of financial records and preparation of all financial reporting to the SEC including, audits and preparation of tax returns.

Note 9.  Loss on Sale of Equipment

During the period ended March 31, 2008, the Company sold all of its equipment to Barry Van Wie (“BVW”), former CEO in exchange for the settlement of advance from BVW in the amount of $5,027.  These assets had a book value of $10,243 net of accumulated depreciation. The Company incurred a loss of approximately $5,200 from the sale.

Note 10.  Other Income

The Company as of March 12, 2008, owed $6,000 to Cab-Tive Advertising, Inc. for unpaid equipment lease fees.  The Company and Cab-Tive Advertising entered into a mutual agreement which provided for an exchange of certain equipment, and a cancellation of the unpaid lease fees resulting in a recording of $6,000 of other income.

 
F-11

 

WEBSAFETY, INC.
Formerly Known as Blindspot Alert, Inc.
(A Development Stage Company)
NOTES TO THE FINANCIAL STATEMENTS

Note 11. Facilities

The Company’s corporate headquarters are presently located at no cost to the Company in the law offices of its Chief Executive Officer.

Note 12. Recent Pronouncements

On November 5, 2007, the SEC issued FASB ASC 815-10-S99-1(Prior authoritative literature: SAB No. 109, Written Loan Commitments Recorded at Fair Value Through Earnings). ASC 815-10-S99-1 provides guidance on the accounting for written loan commitments recorded at fair value under generally accepted accounting principles. Specifically, the ASC 815-10-S99-1 revises the Staff’s views on incorporating expected net future cash flows related to loan servicing activities in the fair value measurement of a written loan commitment. ASC 815-10-S99-1, which supersedes SAB 105, Application of Accounting Principles to Loan Commitments, requires the expected net future cash flows related to the associated servicing of the loan be included in the measurement of all written loan commitments that are accounted for at fair value through earnings.  ASC 815-10-S99-1 is effective in fiscal quarters beginning after December 15, 2007.  The adoption of ASC 815-10-S99-1 did not have a material impact on our financial statements.

In December 2007, the Financial Accounting Standards Board (“FASB”) issued ASC 805(Prior authoritative literature: SFAS No. 141(R), Business Combinations, which replaces SFAS No. 141). ASC 805 establishes principles and requirements for how an acquirer recognizes and measures in its financial statements the identifiable assets acquired, the liabilities assumed, any non-controlling interest in the acquiree and the goodwill acquired. The statement also establishes disclosure requirements which will enable users to evaluate the nature and financial effects of the business combination. ASC 805 is effective for calendar year companies on January 1, 2009. We do not anticipate that the adoption of ASC 805 will have a material effect on accounting for business combinations once adopted, but the effect is dependent upon acquisitions at that time.

In March 2008, the FASB issued FASB ASC 815-10 (Prior authoritative literature: SFAS No. 161, Disclosures about Derivative Instruments and Hedging Activities, and amendment of SFAS No. 133). This statement will require additional disclosures about how and why we use derivative financial instruments, how derivative instruments and related hedged items are accounted for under ASC 815(Prior authoritative literature: SFAS No. 133, “Accounting for Derivative Instruments and Hedging Activities”, as amended and interpreted), and how derivative instruments and related hedged items affect our financial position, results of operations, and cash flows. ASC 815-10 is effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008; however early adoption is encouraged, as are comparative disclosures for earlier periods. We do not believe that the adoption of ASC 815-10 will have a material impact on our financial statements.

In April 2008, the FASB issued ASC 350-30(Prior authoritative literature: FASB Staff Position No. 142-3, Determination of the Useful Life of Intangible Assets). ASC 350-30 amends the factors that should be considered in developing renewal or extension assumptions used to determine the useful life of a recognized intangible asset under ASC 350(Prior authoritative literature: SFAS No. 142, “Goodwill and Other Intangible Assets”) and also requires expanded disclosure related to the determination of intangible asset useful lives. ASC 350-30 is effective for fiscal years beginning after December 15, 2008. Early adoption is prohibited. We do not believe the adoption of ASC 350-30 will have a material impact on our financial statements.

In May 2008, the FASB issued ASC 470(Prior authoritative literature: FSP APB 14-1, Accounting for Convertible Debt Instruments That May Be Settled in Cash upon Conversion). ASC 470 requires issuers of convertible debt instruments that may be settled in cash upon conversion to account separately for the liability and equity components in a manner that will reflect the entity’s nonconvertible debt borrowing rate when interest cost is recognized in subsequent periods. ASC 470 is effective for financial statements issued for fiscal years beginning after December 15, 2008, and interim periods within those fiscal years. We do not anticipate that the adoption of ASC 470 will have a material effect on our results of operations or financial position.

 
F-12

 

WEBSAFETY, INC.
Formerly Known as Blindspot Alert, Inc.
(A Development Stage Company)
NOTES TO THE FINANCIAL STATEMENTS

In March 2008, the Financial Accounting Standards Board (“FASB”) issued FASB ASC 815-10 (Prior authoritative literature: FASB Statement 161, "Disclosures about Derivative Instruments and Hedging Activities—an amendment of FASB Statement No. 133”).  FASB ASC 815-10 requires enhanced disclosures about an entity’s derivative and hedging activities.  This Statement is effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008, with early application encouraged. The Company has not yet adopted the provisions of ASC 815-10, but does not expect it to have a material impact on its consolidated financial position, results of operations or cash flows.

In May 2008, the Financial Accounting Standards Board (“FASB”) issued FASB ASC 944 (Prior authoritative literature: FASB Statement 163, "Accounting for Financial Guarantee Insurance Contracts—an interpretation of FASB Statement No. 60). FASB ASC 944 interprets Statement 60 and amends existing accounting pronouncements to clarify their application to the financial guarantee insurance contracts included within the scope of that Statement.  FASB ASC 944 is effective for financial statements issued for fiscal years beginning after December 15, 2008, and
all interim periods within those fiscal years. ASC 944 has no effect on the Company’s financial position, statements of operations, or cash flows at this time.

In May 2009, the FASB issued FASB ASC 855-10 (prior authoritative literature, FSB No. FAS 165, “Subsequent Events”). FASB ASC 855-10 established general standards of accounting for and disclosure of events that occur after the balance sheet date but before financial statements are issued. FASB ASC 855-10 is effective for interim or annual financial periods ending after June 15, 2009.  FASB ASC 855-10 did not have a material effect on the financial position, cash flows, or results of operations.

In June 2009, the FASB issued FASB ASC 105-10 (prior authoritative literature, FSB No. FAS 168, “The FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles—a replacement of FASB Statement No. 162). FASB ASC 105-10 replaces SFAS 162 and establishes the FASB Accounting Standards Codification as the source of authoritative accounting principles recognized by the FASB to be applied by nongovernmental entities in the preparation of financial statements in conformity with GAAP.  FASB ASC 105-10 is effective for financial statements issued for interim and annual periods ending after September 15, 2009.  As such, the Company is required to adopt this standard in the current period.  Adoption of FASB ASC 105-10 did not have a significant effect on the Company’s consolidated financial statements.

Note 13. Subsequent Events

 
On July2, 2009, the Company entered into an agreement with Ziglar, Inc. effective July 2, 2009. Ziglar, Inc. and its principal, Zig Ziglar will provide training and marketing of the company's products and services. The Company also issued 1,000,000 shares, $.001 par value common stock  to the Ziglar Family Trust in connection with the letter agreement dated July 2, 2009; and services they have supplied and will supply.

WQN Websafety Asset Purchase

On July 2, 2009, The Company entered into an agreement with WQN, Inc. to acquire the software technology, known as “Websafety”. The acquisition was an arms-length purchase with an unrelated party.  The closing of the asset acquisition was contingent upon WQN, delivering the technology as well as satisfying certain other conditions pursuant to the agreement. WQN shall deliver to the Company a fully executed Asset Purchase Agreement, a fully executed Bill of Sale, fully executed third party consents and/or approvals, and Title to and possession of the purchased assets. The acquisition was limited to the intellectual property surrounding this asset. On September 14, 2009, all conditions of the acquisition were satisfied and accordingly, the Company paid the consideration of 27,000,000 shares of its common stock and gained all rights of ownership to the Websafety software technology. The acquisition will be recorded as a purchase of an asset in the financial statements as of September 30, 2009n Concurrent  with the asset purchase from WQN which was effective on September 14, 2009, the Company appointed a stockholder of WQN as the Chairman of the Board. In connection with the appointment the Company entered into an employment agreement whereby the appointee is to receive a salary upon the achievement of a certain level of revenue. Additionally, he is to receive 1,500,000 shares of the Company’s company with 100,000 being vested upon the effective date of the agreement, and the remaining 1,400,000 being vested with the achievement of certain levels of revenue. The term of the agreement ends December 31, 2010.
 
 
F-13

 

WEBSAFETY, INC.
Formerly Known as Blindspot Alert, Inc.
(A Development Stage Company)
NOTES TO THE FINANCIAL STATEMENTS

The Company also entered into employment agreements with the Chief Operating Officer and its Chief Technology Officer, effective on September 14, 2009. The agreements grant the employees the right to receive salaries as well as being granted 100,000 stock options each having a 5 year term in which the options vest at the end of each 12 month period.
 
On September 10, 2009 the Board of Directors, resolved to issue 478,000 shares of its common stock to non-employee consultants. Additionally, the Board of Directors granted 100,000 stock options to the Chief Financial Officer.  The term of the options are for a 5 year period in which the options vest at the end of each 12 month period.

As a result of  September 14, 2009 Websafety asset purchase, the Company anticipates writing-off in the third quarter of 2009 the $300,000 software licensing asset listed in “Note 4 Property and Equipment”.
 
On August 25, 2009, the Company terminated its President Clifton Jolley for cause.  In late October 2009, the Company and Mr. Jolley agreed to go to arbitration which the Company believes should occur by the end of the First Quarter of 2010.
 
Management evaluated subsequent events through November 20, 2009, the date the financial statements were issued.

Note 14 Restatement

The financial statements for the years ended December 31, 2008 and in the cancellation of 35,500,000 shares of common stock which has been retroactively presented in the statement of stockholders equity.  It has been recorded as if the transaction with Texas Atlantic had occurred as of the earliest period presented which is July 3, 2006 (date of inception) after giving effect to the 13,200,000 shares that were issued to Texas Atlantic in conjunction with the business combination..

In addition, interest expense for the year ended December 31, 2008 was increased to $5,022 from $22 via a reclassification from general and administrative expenses.  Also, the date of inception numbers had been previously reported in error through December 31, 2007.  The statement of operations and the statement of cash flows have been updated to include the amounts from inception through December 31, 2008.

The financial statements for the periods ended December 31, 2008 have been restated to reflect the corrections in accordance with SFAS No. 154, "Accounting Change and Error Correction".

The footnotes to the financial statements have been revised to include the disclosure of material events occurring subsequent the financial statements.

 
F-14

 

ITEM 9.  Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

None.

ITEM 9A(T). Controls and Procedures

Our management with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act for the end of the period covered by this Annual Report on Form 10-K. Based on that evaluation, our principal executive officer and principal financial officer have concluded that these controls and procedures are effective in all material respects, including those to ensure that information required to be disclosed in reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the rules and forms of the SEC, and is accumulated and communicated to management, including the Chief Executive Officer and the Chief Financial Officer, as appropriate, to allow for timely decisions regarding required disclosure.

It should be noted that any system of controls, however well designed and operated, can provide only reasonable, and not absolute, assurance that the objectives of the system will be met. In addition, the design of any control system is based in part upon certain assumptions about the likelihood of future events.

Report of Management on Internal Control Over Financial Reporting

Management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) and 15d-15(f) of the Exchange Act).  Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America.

Our internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with accounting principles generally accepted in the United States of America and that our receipts and expenditures are being made only in accordance with authorization of our management and directors; (iii) provide reasonable assurance regarding prevention or timely detection of the unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Management has assessed our internal control over financial reporting as of December 31, 2008.  The assessment was based on criteria for effective internal control over financial reporting described in the Internal Control-Integrated Framework issued by the Sponsoring Organizations of the Treadway Commission. Based on the assessment, Management determined internal control over financial reporting was not effective as of December 31, 2008. We failed to properly disclose and record the recapitalization of Texas Atlantic.

This annual report does not include an attestation report of our independent registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by our independent registered public accounting firm pursuant to temporary rules of the SEC that permit us to provide only management’s report in this annual report.

Changes in Internal Controls

We have evaluated, with the participation of our Chief Executive Officer and Chief Financial Officer, that there have been no changes in our internal control over financial reporting during our most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect our internal control over financial reporting. Inherent limitations exist in any system of control including the possibility of human error and the potential of overriding controls. The effectiveness of an internal control system may also be affected by changes in conditions.

 
13

 


ITEM 9B.  OTHER INFORMATION

None.
PART III

ITEM 10.  DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

Directors and Executive Officers

Our current officers and directors are listed below.  Each of our directors will serve for one year or until their respective successors are elected and qualified.  Our officers serve at the pleasure of the board of directors.

Name
Age
Position
Start of Term
Rowland W. Day II
53
CEO
Chairman of the Board
Director
February 25, 2008
       
Rusty Robertson
56
President
COO
Director
July 21, 2008
       
Denton Jones
56
Director
July 21, 2008
       
Robert Salluzzo
60
CFO
Treasurer
July 21, 2008

Rowland W. Day II, 53 years of age, Chief Executive Officer and Director.

Mr. Day is a business corporate lawyer.   He has practiced law since 1983.  Mr. Day has been the Chairman of the Board of Clearant, Inc. (OTCBB-CLRA) and is currently a director of RE3W WorldWide and Restaurants on the Run.

Rusty Robertson, 56 years of age, President, Chief Operating Officer and Director.

Ms. Robertson is a principal of the Robertson Schwartz Agency.  Ms. Robertson specializes in marketing, sales, forecasting, literary, advertising and public relations.  Advertising Age Magazine has honored Ms. Robertson as one of the top 100 Marketers and Success Magazine featured Ms. Robertson and her company as one of Americas Super 8 companies.

Denton Jones, 56 years of age, Director.

Mr. Jones has been a private investor for 30 years.  He is the manager of Texas Atlantic Partners, LLC, the holder of 14,200,000 shares of common stock.  Mr. Jones is a director of WQN, Inc.

Robert J. Salluzzo, 60 years of age, Treasurer and interim Chief Financial Officer.

Mr. Salluzzo has been the Chief Financial Officer of four public companies since 1997.  Mr. Salluzzo is a Certified Public Accountant.

Family Relationships
 
There are no family relationships among any of our directors or executive officers.

 
14

 

Legal Proceedings

There have been no events under any bankruptcy act, no criminal proceedings and no judgments, injunctions, orders or decrees, including judgments finding violations of any federal or state securities or commodities law, material to the evaluation of the ability and integrity of any of our directors, executive officers, promoters or control persons during the past five years.

Independent Registered Public Accounting Firm

On August 7, 2009 the Board of Directors of Exclusive Apparel dismissed Moore & Associates, Chartered, Certified Public Accountants.  On September 22, 2009, we engaged the services of Rotenberg & Co., LLP as its independent auditor.  On October 1, 2009 Rotenberg and Company LLP merged with another CPA firm, EFP Group, to form a new firm.  All of the partners and employees of Rotenberg and Company LLP and EFP Group joined the new firm, EFP Rotenberg LLP.  EFP Rotenberg LLP succeeds Rotenberg and Company LLP as the independent registered public accounting firm for Exclusive Apparel, Inc. At no time have there been any disagreements with any accountants regarding any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure.
 
On August 27, 2009, the PCAOB issued PCAOB Release No. 105-2009-006 revoking the registration of Moore & Associates, Chartered and barring Michael J. Moore, CPA, from being an associated person of a registered public accounting firm. The PCAOB imposed these sanctions on the basis of its findings concerning the alleged violations of Moore & Associates, Chartered and Michael J. Moore of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, PCAOB rules and auditing standards in auditing the financial statements, PCAOB rules and quality controls standards, and noncooperation with a Board investigation. A copy of the PCAOB Release can be accessed at the PCAOB website at http:www.pcaobus.org.

As a result of the above action, we may not include the audit reports or consents of Moore & Associates, Chartered in any filings. Therefore, we engaged our current auditor to conduct at audit since inception through December 31, 2008.

ITEM 11.  EXECUTIVE COMPENSATION

No compensation of cash or equity has been paid or granted for the employment of our officers or for the services of our directors.

ITEM 12. 
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

The following table sets forth the securities ownership of our directors, named executive officers, and any person or group who is known to us to be the beneficial owner of more than five percent of our voting stock as of April 6, 2009:

Title of Class
 
Name and Address of Beneficial Owner1
 
Amount and Nature of 
Beneficial Owner1
   
Percent of 
class
 
Common Stock
 
Denton Jones2
   
14,200,000
     
51.7
%
Common Stock
 
Rusty Robertson3
   
2,400,000
     
8.8
%
Common Stock
 
Rowland W. Day II4
   
1,200,000
     
4.4
%
Common Stock
 
Robert J. Salluzzo
   
150,000
     
.5
%
Common Stock
 
All directors and executive officers as a group (4 persons)
   
17,750,000
     
65.5
%

1  Applicable percentage ownership is based on 27,091,669 shares of total voting stock outstanding at April 6, 2009.  The number of shares of voting stock owned are those “beneficially owned” as determined under the rules of the SEC, including any shares of voting stock as to which a person has sole or shared voting or investment power and any shares of voting stock which the person has the right to acquire within sixty days through the exercise of any option, warrant or right.  All addresses are c/o 1 Hampshire Court, Newport Beach, California 92660, unless otherwise noted.

 
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2  Includes 14,200,000 shares owned by Texas Atlantic Capital Partners.  Mr. Jones is the Managing Member of Texas Atlantic Capital Partners.
3  Includes 2,400,000 shares owned by the Robertson Schwartz Agency.  Ms. Robertson is a principal of the Robertson Schwartz Agency.
4..Includes 1,200,000 shares of common stock issued to Rowland W. Day II as Trustee of The Day Family Trust.
 
Unless otherwise indicated, we believe that all persons named in the table have sole voting and investment power with respect to all Shares beneficially owned by them.  A person is deemed to be the beneficial owner of securities which may be acquired by such person within sixty days from the date on which beneficial ownership is to be determined, upon the exercise of options, warrants or convertible securities.  Each beneficial owner’s percentage ownership is determined by assuming that options, warrants and convertible securities that are held by such person (but not those held by any other person) and which are exercisable, convertible or exchangeable within such sixty day period, have been so exercised, converted or exchanged.
 
ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE

Transactions with Related Persons

In the aggregate, during 2008, the Company paid to related parties $241,225 for consulting, legal and marketing services as reflected below.
 
Paid To
 
Consulting
   
Legal Services
   
Marketing
   
Accounting
 
Texas Atlantic Capital Partners LLC
  $ 58,500    
 
   
   
       
Rowland W. Day II
          $ 63,632    
     
       
Robertson Schwartz Agency
                  $ 89,093        
Robert J. Salluzzo
                          $ 30,000  

Denton Jones, a director of the Company is the manager of Texas Atlantic Capital Partners LLC , Rowland W. Day II is our CEO and a director and Rusty Schwartz, a director is a principal in Robertson Schwartz Agency. Robert J. Salluzzo is a stockholder.

The services that were provided are outlined below.

Consulting- Consulting services consisted of the coordination of web design and marketing efforts aimed at product launch to include the evaluation of the appropriate merchant service agencies to be used as well as working with management relating to general corporate matters associated with business plan implementation.

Legal-Legal service consisted of corporate legal advice, document preparation and the preparation of quarterly and annual filings as well as other filings required as a result of the actions of the Company.

Marketing- Marketing services related to the development of a comprehensive marketing plan whose objective is to build brand and product awareness through planned media and other exposures.

Accounting-Accounting fees paid relates to the review of financial records and preparation of all financial reporting to the SEC including, audits and preparation of tax returns.

Director Independence

It is our position that our three directors are not independent.

 
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ITEM 14.  PRINCIPAL ACCOUNTING FEES AND SERVICES

Audit Fees

The following table sets forth the aggregate fees billed to us for the fiscal years ended December 31, 2008 and 2007 by Moore & Associates the company’s prior accountant.

  
 
Fiscal Year
2008
   
Fiscal Year
2007
 
Audit Fees
 
$
3,000
   
$
3,000
 
Audit-Related Fees
 
$
4,500
   
$
3,000
 
All Other Fees
 
$
0
   
$
0
 

Tax Fees

There were no fees paid in either 2008 or 2007 for tax related matters.

 
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PART IV

ITEM 15.  EXHIBITS, FINANCIAL STATEMENT SCHEDULE

Exhibit No.
Description
3.1
Amended and Restated Certificate of Incorporation of Blindspot Alert, Inc., a Nevada corporation. Incorporated by reference to our current report on Form 14-C filed with the SEC on December 5, 2008.
10.1
Incorporated by reference to our current report on Form 8-K filed with the SEC on July 25, 2008 License Agreement dated June 30, 2008.
31.1
Rule 13a-14(a) Certification of Chief Executive Officer
31.2
Rule 13a-14(a) Certification of Chief Financial Officer
32.1
Certification of Chief Executive Officer Pursuant to 18.U.S.C. Section 1350, as Pursuant to Section  906 of the Sarbanes Oxley Act of 2002
32.2
Certification of Chief Financial Officer Pursuant to 18.U.S.C. Section 1350, as Pursuant to Section  906 of the Sarbanes Oxley Act of 2002

 
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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 
WEBSAFETY, INC. FKA BLINDSPOT ALERT, INC.
 
FKA PROMOTIONS ON WHEELS HOLDINGS, INC.
       
Date: November 23, 2009
 
By:
/s/ Rowland W. Day II
   
Rowland W. Day II,
   
Chief Executive Officer
 
Pursuant to the requirements of the Securities and Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated:
 
Signature
 
Title(s)
 
Date
         
/s/  Rowland W. Day II
 
Chief Executive Officer
 
November 23, 2009
Rowland W. Day II
       
         
/s/  John R. Williams, Jr.
 
Chief Financial Officer
 
November 23, 2009
John Williams
       
         
/s/  Denton Jones
 
Director
 
November 23, 2009
Denton Jones
       
         
/s/  Rusty Robertson
 
President and Director
 
November 23, 2009
Rusty Robertson
       

 
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