Attached files
| file | filename |
|---|---|
| EX-31.1 - WebSafety, Inc. | v203541_ex31-1.htm |
| EX-31.2 - WebSafety, Inc. | v203541_ex31-2.htm |
| EX-32.1 - WebSafety, Inc. | v203541_ex32-1.htm |
| EX-32.2 - WebSafety, Inc. | v203541_ex32-2.htm |
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
10-Q
|
(Mark
One)
|
|
|
x
|
QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
|
|
For
the quarterly period ended: September 30,
2010
|
|
|
Or
|
|
|
o
|
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.)
|
2201
W. Royal Lane, Suite 200, Irving, Texas 75063
(Address
of Principal Executive Offices)
(214)
716-6909
(Issuer’s
telephone number)
BLINDSPOT
ALERT, INC.
(1
Hampshire Court, Newport Beach, CA 92660)
Check
whether the issuer (1) has filed all reports required to be filed by Section 13
or 15(d) of the Exchange Act during the preceding 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 whether the registrant has submitted electronically and posted on
its corporate Web site, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this
chapter) during the preceding 12 months (or for such shorter period that the
registrant was required to submit and post such files). Yes ¨ No ¨
Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a small reporting
company.
|
¨ Large accelerated
filer
|
¨ Accelerated
filer
|
|
¨ Non-accelerated
filer
|
x Small
reporting company
|
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 the
number of shares outstanding of each of the issuer’s classes of common equity,
as of November 22, 2010:
|
Class
|
Outstanding
shares as of November 22, 2010
|
|
Common Stock, $0.001 par
value
|
70,777,862
|
|
INDEX
|
Page
|
|
PART 1-FINANCIAL
INFORMATION
|
3
|
|
Item 1. Financial
Statements
|
3
|
|
Balance
Sheets as of September 30, 2010 (unaudited) and December 31,
2009
|
F-2
|
|
Statements
of Operations (unaudited) for the three and nine months ended September
30, 2010 and September 30, 2009.
|
F-3
|
|
Statements
of Cash Flows (unaudited) for the nine months ended September 30, 2010 and
September 30, 2009.
|
F-4
|
|
Statement
of Stockholder’s Equity (Deficit) for the year ended December 31, 2009 and
the nine months ended September 30, 2010 (unaudited)
|
F-5
|
|
Notes
to Financial Statements
|
F-6
|
|
Item 2. Management’s Discussion and
Analysis of Financial Condition and Results of
Operations
|
4
|
|
Item 3. Quantitative and Qualitative
Disclosures about Market Risk
|
6
|
|
Item 4. Control and
Procedures
|
6
|
|
PART II-OTHER INFORMATION
|
7
|
|
Item 1. Legal
Proceedings
|
7
|
|
Item 1A. Risk
Factors
|
8
|
|
Item 2. Unregistered Sales of Equity
Securities and Use of Proceeds
|
10
|
|
Item 6. Exhibits
|
10
|
|
SIGNATURES
|
11
|
2
PART
I - FINANCIAL INFORMATION
Item
1. Financial Statements
3
INTERIM
FINANCIAL STATEMENTS
(UNAUDITED)
Table
of Contents
|
PAGE
|
|
|
BALANCE
SHEETS
|
F-2
|
|
STATEMENTS
OF OPERATIONS
|
F-3
|
|
STATEMENTS
OF CASH FLOWS
|
F-4
|
|
STATEMENTS
OF STOCKHOLDERS EQUITY
|
F-5
|
|
FOOTNOTES
TO FINANCIAL STATEMENTS
|
F-6
|
F-1
WEBSAFETY,
Inc.
Formerly
Known as BlindSpot Alert, Inc.
BALANCE
SHEETS
|
As
of
|
||||||||
|
September
30, 2010
|
December
31, 2009
|
|||||||
|
(Unaudited)
|
||||||||
|
ASSETS
|
||||||||
|
Current
assets:
|
||||||||
|
Cash
|
$ | 42,489 | $ | 5,748 | ||||
|
Accounts
receivable
|
- | 17,171 | ||||||
|
Total
current assets
|
42,489 | 22,919 | ||||||
|
Property
and Equipment:
|
||||||||
|
Computer
equipment, computer software and furniture, net
|
12,199 | 14,433 | ||||||
|
Software
license and website development, net
|
115,332 | 138,383 | ||||||
|
Total
property and equipment
|
127,531 | 152,816 | ||||||
|
Other
Assets:
|
||||||||
|
Deposits
|
6,837 | 6,820 | ||||||
|
WebSafety
Technology, net
|
1,881,877 | 2,587,580 | ||||||
|
Total
other assets
|
1,888,714 | 2,594,400 | ||||||
| $ | 2,058,734 | $ | 2,770,135 | |||||
|
LIABILITIES
AND STOCKHOLDERS' EQUITY
|
||||||||
|
Current
liabilities:
|
||||||||
|
Accounts
payable
|
$ | 266,578 | $ | 152,359 | ||||
|
Accrued
expense
|
43,193 | 13,868 | ||||||
|
Deferred
revenue
|
20,591 | 114,740 | ||||||
|
Shareholder
Loan
|
380,999 | 81,374 | ||||||
|
Liability
to issue shares
|
150,762 | 103,120 | ||||||
|
Total
current liabilities
|
862,123 | 465,461 | ||||||
|
Stockholders'
equity:
|
||||||||
|
Preferred
stock; $.001 par value, 25,000,000 shares authorized, 2,863,335 and
4,230,002 shares issued and outstanding
respectively
|
2,863 | 4,230 | ||||||
|
Common
stock; $.001 par value, 300,000,000 shares authorized, 68,477,860
and 54,895,714 shares issued and outstanding,
respectively
|
68,478 | 54,896 | ||||||
|
Additional
paid in capital
|
6,562,557 | 4,817,805 | ||||||
|
Deficit
accumulated
|
(5,437,287 | ) | (2,572,257 | ) | ||||
|
Total
stockholders' equity
|
1,196,611 | 2,304,674 | ||||||
| $ | 2,058,734 | $ | 2,770,135 | |||||
The
accompanying notes are an integral part of these financial
statements.
F-2
WebSafety,
Inc.
Formerly
Known as BlindSpot Alert, Inc.
STATEMENTS
OF OPERATIONS
For
The Three and Nine Months Ended September 30, 2010 and
2009
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
|||||||||||||||
|
For
The Three Months Ended September 30,
|
Nine
Months Ended September 30,
|
|||||||||||||||
|
2010
|
2009
|
2010
|
2009
|
|||||||||||||
|
Revenue
|
$ | 119,779 | $ | 4,788 | $ | 242,269 | $ | 4,788 | ||||||||
|
Cost
of goods sold
|
(50,127 | ) | - | (108,269 | ) | |||||||||||
|
Gross
margin
|
69,652 | 4,788 | 134,000 | 4,788 | ||||||||||||
|
Operating
expenses:
|
||||||||||||||||
|
General
and administrative expenses
|
975,184 | 368,354 | 2,245,369 | 697,903 | ||||||||||||
|
Impairment
loss
|
- | 300,000 | - | 300,000 | ||||||||||||
|
Research
& Development
|
- | - | 2,500 | - | ||||||||||||
|
Depreciation
and amortization expense
|
248,847 | 588 | 746,253 | 588 | ||||||||||||
|
Total
operating expenses
|
1,224,031 | 668,942 | 2,994,122 | 998,491 | ||||||||||||
|
(Loss)
from operations
|
(1,154,379 | ) | (664,154 | ) | (2,860,122 | ) | (993,703 | ) | ||||||||
|
Other
income (expense):
|
||||||||||||||||
|
Loss
on option acquire
|
- | - | - | (245,000 | ) | |||||||||||
|
Interest
expense
|
(4,908 | ) | - | (4,908 | ) | - | ||||||||||
|
Total
other income (expense)
|
(4,908 | ) | - | (4,908 | ) | (245,000 | ) | |||||||||
|
(Loss)
before provision for income taxes
|
(1,159,287 | ) | (664,154 | ) | (2,865,030 | ) | (1,238,703 | ) | ||||||||
|
Provision
for income taxes
|
- | |||||||||||||||
|
|
||||||||||||||||
|
Net
(loss)
|
$ | (1,159,287 | ) | $ | (664,154 | ) | $ | (2,865,030 | ) | $ | (1,238,703 | ) | ||||
|
Basic
and diluted loss per share
|
$ | (0.017 | ) | $ | (0.022 | ) | $ | (0.045 | ) | $ | (0.050 | ) | ||||
|
Basic
and diluted weighted average common shares
outstanding
|
67,107,250 | 30,065,714 | 63,216,245 | 24,917,017 | ||||||||||||
The
accompanying notes are an integral part of these financial
statements.
F-3
Websafety,
Inc.
Formerly
Known as BlindSpot Alert, Inc.
STATEMENTS
OF CASH FLOWS
For
the Nine Months Ended September 30, 2010 and 2009
(Unaudited)
|
(Unaudited)
|
||||||||
|
Nine Months Ended September 30,
|
||||||||
|
2010
|
2009
|
|||||||
|
Operating
activities:
|
||||||||
|
Net
loss
|
$ | (2,865,030 | ) | $ | (1,238,703 | ) | ||
|
Adjustments
to reconcile net loss to net cash used in operating
activities:
|
||||||||
|
Depreciation
and amortization expense
|
746,253 | 588 | ||||||
|
Stock
issued for services
|
989,542 | 36,583 | ||||||
|
Impairment
charge for WQN License
|
- | 300,000 | ||||||
|
Loss
on option expiration
|
- | 245,000 | ||||||
|
Changes
in operating assets and liabilities:
|
||||||||
|
Decrease
(increase) in accounts receivable
|
17,171 | (4,625 | ) | |||||
|
Decrease in
prepaid expense
|
- | 7,137 | ||||||
|
Decrease
in subscriptions receivable
|
- | 200 | ||||||
|
Decrease
in advance to shareholder
|
- | (1,104 | ) | |||||
|
Increase
in deposit
|
(17 | ) | (2,297 | ) | ||||
|
Increase in
accounts payable
|
114,219 | 38,636 | ||||||
|
Decrease in
deferred revenue
|
(94,149 | ) | 41,372 | |||||
|
Increase
in Liability to Issue Shares
|
47,642 | - | ||||||
|
Increase
in accrued expense
|
29,325 | 13,818 | ||||||
|
Net
cash (used in) operating activities
|
(1,015,044 | ) | (563,395 | ) | ||||
|
Investing
activities:
|
||||||||
|
Purchase
of long term assets
|
(15,265 | ) | (134,528 | ) | ||||
|
Increase
(decrease) investment in option to acquire
|
- | (150,000 | ) | |||||
|
Net
cash (used in) investing activities
|
(15,265 | ) | (284,528 | ) | ||||
|
Financing
activities:
|
||||||||
|
Proceeds
from borrowing
|
100,000 | - | ||||||
|
Proceeds
of advances from shareholders
|
299,625 | - | ||||||
|
Proceeds
from stock sales
|
667,425 | 744,000 | ||||||
|
Net
cash provided by financing activities
|
1,067,050 | 744,000 | ||||||
|
Net
changes in cash
|
36,741 | (103,923 | ) | |||||
|
Cash,
beginning of year
|
5,748 | 224,269 | ||||||
|
Cash,
end of period
|
$ | 42,489 | $ | 120,346 | ||||
|
Cash
paid during the period for:
|
||||||||
|
Interest
paid
|
- | 90 | ||||||
|
Tax
paid
|
- | - | ||||||
|
Non
Cash Investing and Financing Activities:
|
||||||||
|
Issuance
of common stock for services
|
$ | 289,919 | $ | 32,500 | ||||
|
Voluntary
conversion of shareholders advance to pain in Capital
|
$ | - | $ | - | ||||
|
Common
stock issued for equipment
|
$ | - | $ | - | ||||
The
accompanying notes are an integral part of these financial
statements.
F-4
WEBSAFETY,
INC.
Formerly
Known as BlindSpot Alert, Inc.
STATEMENTS
OF STOCKHOLDERS' EQUITY (DEFICIT)
For
the Year Ended December 31, 2009 and the Nine Months Ended September 30,
2010
|
Additional
|
Total
|
|||||||||||||||||||||||||||||||
|
Preferred
Stock
|
Common
Stock
|
Subscription
|
Paid-in
|
Accumulated
|
Stockholders'
|
|||||||||||||||||||||||||||
|
Shares
|
Amount
|
Shares
|
Amount
|
Receivable
|
Capital
|
(Deficit)
|
Equity
(Deficit)
|
|||||||||||||||||||||||||
|
Balances
December 31, 2008
|
3,833,335 | $ | 3,833 | 22,300,000 | $ | 22,300 | $ | (200 | ) | $ | 1,357,967 | $ | (644,808 | ) | $ | 739,092 | ||||||||||||||||
|
Subscription
receivable paid
|
200 | 200 | ||||||||||||||||||||||||||||||
|
Issuance
of preferred stock for cash
|
||||||||||||||||||||||||||||||||
|
May
8, 2009 one issuance at $0.30
|
133,334 | 134 | 39,866 | 40,000 | ||||||||||||||||||||||||||||
|
May
11, 2009 one issuance at $0.30
|
56,667 | 57 | 16,943 | 17,000 | ||||||||||||||||||||||||||||
|
June
4, 2009 four issuances at $0.30
|
40,000 | 40 | 11,960 | 12,000 | ||||||||||||||||||||||||||||
|
Issuance
of preferred stock for cash
|
||||||||||||||||||||||||||||||||
|
September
14, 2009 one issuance at $0.30
|
166,666 | 167 | 49,833 | 50,000 | ||||||||||||||||||||||||||||
|
Issuance
of common stock for services
|
||||||||||||||||||||||||||||||||
|
July
9, 2009 one issuance at $0.01
|
1,800,000 | $ | 1,800 | 16,200 | 18,000 | |||||||||||||||||||||||||||
|
July
9, 2009 one issuance at $0.01
|
1,000,000 | $ | 1,000 | 9,000 | 10,000 | |||||||||||||||||||||||||||
|
September
14, 2009 one issuance at $0.001
|
1,000,000 | $ | 1,000 | - | 1,000 | |||||||||||||||||||||||||||
|
September
14, 2009 one issuance at $0.35
|
10,000 | $ | 10 | 3,490 | 3,500 | |||||||||||||||||||||||||||
|
Issuance
of common stock for WebSafety Technology:
|
||||||||||||||||||||||||||||||||
|
September
14, 2009 one issuance at $0.001
|
27,000,000 | $ | 27,000 | 2,673,000 | 2,700,000 | |||||||||||||||||||||||||||
|
Issuance
of common stock for cash
|
||||||||||||||||||||||||||||||||
|
August
31, 2009 one issuance at $0.35
|
1,000,000 | $ | 1,000 | 349,000 | 350,000 | |||||||||||||||||||||||||||
|
September
14, 2009 one issuance at $0.35
|
100,000 | $ | 100 | 34,900 | 35,000 | |||||||||||||||||||||||||||
|
September
14, 2009 one issuance at $0.35
|
142,857 | $ | 143 | 49,857 | 50,000 | |||||||||||||||||||||||||||
|
October
5, 2009 one issuance at $0.35
|
542,857 | $ | 543 | 189,457 | 190,000 | |||||||||||||||||||||||||||
|
Stock
Compensation Expense
|
16,331 | 16,331 | ||||||||||||||||||||||||||||||
|
Net
loss for the period ended December 31, 2009
|
(1,927,449 | ) | (1,927,449 | ) | ||||||||||||||||||||||||||||
|
Balances
December 31, 2009
|
4,230,002 | $ | 4,230 | 54,895,714 | $ | 54,896 | $ | - |
$
|
4,817,805 | $ | (2,572,257 | ) | $ | 2,304,674 | |||||||||||||||||
|
Issuance
of common stock for cash
|
||||||||||||||||||||||||||||||||
|
January
6, 2010 one issuance at $0.45
|
100,000 |
$
|
100 | 44,900 | 45,000 | |||||||||||||||||||||||||||
|
January
27, 2010 one issuance at $0.043
|
1,600,000 |
$
|
1,600 | 68,400 | 70,000 | |||||||||||||||||||||||||||
|
March
9, 2010 one issuance at $0.05
|
400,000 |
$
|
400 | 19,600 | 20,000 | |||||||||||||||||||||||||||
|
March
9, 2010 one issuance at $0.045
|
33,333 |
$
|
33 | 14,967 | 15,000 | |||||||||||||||||||||||||||
|
March
9, 2010 one issuance at $0.045
|
23,000 |
$
|
23 | 10,327 | 10,350 | |||||||||||||||||||||||||||
| - | ||||||||||||||||||||||||||||||||
|
Issuance
of common stock for services
|
- | |||||||||||||||||||||||||||||||
|
January
6, 2010 one issuance at $0.04
|
100,000 | $ | 100 | 3,900 | 4,000 | |||||||||||||||||||||||||||
|
January
6, 2010 one issuance at $0.04
|
200,000 | $ | 200 | 7,800 | 8,000 | |||||||||||||||||||||||||||
|
January
6, 2010 one issuance at $0.04
|
28,000 | $ | 28 | 1,092 | 1,120 | |||||||||||||||||||||||||||
|
March
17, 2010 one issuance at $0.025
|
7,000,000 | $ | 7,000 | 168,000 | 175,000 | |||||||||||||||||||||||||||
| - | ||||||||||||||||||||||||||||||||
|
Stock
Compensation Expense
|
128,911 | 128,911 | ||||||||||||||||||||||||||||||
|
Net
loss for the period ended March 31, 2010
|
(849,604 | ) | (849,604 | ) | ||||||||||||||||||||||||||||
|
Balances
March 31, 2010
|
4,230,002 | $ | 4,230 | 64,380,047 | $ | 64,380 | $ | - | $ | 5,285,702 | $ | (3,421,861 | ) | $ | 1,932,451 | |||||||||||||||||
|
Issuance
of common stock for cash
|
||||||||||||||||||||||||||||||||
|
April
5, 2010 one issuance at $0.45
|
26,500 | $ | 27 | 11,898 | 11,925 | |||||||||||||||||||||||||||
|
April
5, 2010 one issuance at $0.45
|
155,400 | $ | 155 | 69,775 | 69,930 | |||||||||||||||||||||||||||
|
April
5, 2010 one issuance at $0.45
|
22,222 | $ | 22 | 9,978 | 10,000 | |||||||||||||||||||||||||||
|
June
2, 2010 one issuance at $0.45
|
50,000 | $ | 50 | 22,450 | 22,500 | |||||||||||||||||||||||||||
|
June
18, 2010 one issuance at $0.45
|
534,192 | $ | 534 | 239,852 | 240,386 | |||||||||||||||||||||||||||
| - | ||||||||||||||||||||||||||||||||
|
Issuance
of common stock for services
|
- | |||||||||||||||||||||||||||||||
|
June
2, 2010 one issuance at $0.45
|
15,000 | $ | 15 | 6,735 | 6,750 | |||||||||||||||||||||||||||
|
June
2, 2010 one issuance at $0.45
|
4,522 | $ | 5 | 2,030 | 2,035 | |||||||||||||||||||||||||||
|
June
2, 2010 one issuance at $0.45
|
55,555 | $ | 56 | 24,944 | 25,000 | |||||||||||||||||||||||||||
|
June
18, 2010 one issuance at $0.45
|
200,000 | $ | 200 | 89,800 | 90,000 | |||||||||||||||||||||||||||
| - | ||||||||||||||||||||||||||||||||
|
Conversion
of preferred shares to common shares at 1.25 to 1
|
(1,000,000 | ) | (1,000 | ) | 1,250,000 | $ | 1,250 | (250 | ) | - | ||||||||||||||||||||||
|
Issuance
of common stock to adjust issue price
|
11,111 | $ | 11 | 4,989 | 5,000 | |||||||||||||||||||||||||||
|
Stock
Compensation Expense
|
128,910 | 128,910 | ||||||||||||||||||||||||||||||
|
Net
loss for the period ended June 30, 2010
|
(856,139 | ) | (856,139 | ) | ||||||||||||||||||||||||||||
|
Balances
June 30, 2010
|
3,230,002 | $ | 3,230 | 66,704,549 | $ | 66,705 | $ | - | $ | 5,896,813 | $ | (4,278,000 | ) | $ | 1,688,748 | |||||||||||||||||
|
Issuance
of common stock for cash
|
||||||||||||||||||||||||||||||||
|
August
6, 2010 one issuance at $0.45
|
47,223 |
$
|
47 | 21,203 | 21,250 | |||||||||||||||||||||||||||
|
September
7, 2010 one issuance at $0.45
|
124,446 |
$
|
124 | 55,876 | 56,001 | |||||||||||||||||||||||||||
|
September
15, 2010 one issuance at $0.45
|
100,000 |
$
|
100 | 44,900 | 45,000 | |||||||||||||||||||||||||||
|
September
22, 2010 one issuance at $0.45
|
55,740 | $ | 56 | 25,027 | 25,083 | |||||||||||||||||||||||||||
| - | ||||||||||||||||||||||||||||||||
|
Issuance
of common stock for services
|
- | |||||||||||||||||||||||||||||||
|
August
6, 2010 one issuance at $0.45
|
25,000 | $ | 25 | 975 | 1,000 | |||||||||||||||||||||||||||
|
August
6, 2010 one issuance at $0.45
|
100,000 | $ | 100 | 44,900 | 45,000 | |||||||||||||||||||||||||||
|
September
15, 2010 one issuance at $0.25
|
135,000 | $ | 135 | 33,615 | 33,750 | |||||||||||||||||||||||||||
|
September
15, 2010 one issuance at $0.40
|
125,000 | $ | 125 | 49,875 | 50,000 | |||||||||||||||||||||||||||
|
September
15, 2010 one issuance at $0.45
|
42,500 | $ | 43 | 19,083 | 19,125 | |||||||||||||||||||||||||||
|
September
22, 2010 one issuance at $0.45
|
10,068 | $ | 10 | 4,521 | 4,531 | |||||||||||||||||||||||||||
|
September
22, 2010 one issuance at $0.25
|
550,000 | $ | 550 | 136,950 | 137,500 | |||||||||||||||||||||||||||
| - | ||||||||||||||||||||||||||||||||
|
Conversion
of preferred shares to common shares at 1.25 to 1
|
(366,667 | ) | (367 | ) | 458,334 | $ | 458 | (92 | ) | - | ||||||||||||||||||||||
|
Stock
Compensation Expense
|
128,910 | 128,910 | ||||||||||||||||||||||||||||||
|
Beneficial
Conversion Feature of Promissory Note
|
100,000 | 100,000 | ||||||||||||||||||||||||||||||
|
Net
loss for the period ended September 30, 2010
|
(1,159,287 | ) | (1,159,287 | ) | ||||||||||||||||||||||||||||
|
Balances
September 30, 2010
|
2,863,335 | $ | 2,863 | 68,477,860 | $ | 68,478 | $ | - | $ | 6,562,557 | $ | (5,437,287 | ) | $ | 1,196,611 | |||||||||||||||||
The
accompanying notes are an integral part of these financial
statements.
F-5
WEBSAFETY,
INC.
Formerly
Known as Blindspot Alert, Inc.
NOTES
TO THE FINANCIAL STATEMENTS
SEPTEMBER
30, 2010
Note
1. Condensed Financial Statement
The
accompanying financial statements have been prepared by Websafety ( the Company)
without audit. In the opinion of management, all adjustments (which
include only normal recurring adjustments) necessary to present fairly the
financial position, results of operations, and cash flows at September 30, 2010,
and for all periods presented herein, have been made. Certain
information and footnote disclosures normally included in financial statements
prepared in accordance with accounting principles generally accepted in the
United States of America have been condensed or omitted. It is suggested
that these condensed financial statements be read in conjunction with the
financial statements and notes thereto included in the Company’s December 31,
2009 audited financial statements. The results of operations for the nine
months ended September 30, 2010 are not necessarily indicative of the operating
results that can be anticipated for a complete operating period.
Note
2. Significant Accounting Policies
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 has incurred cumulative net losses of $5,437,287 from the period of July
3, 2006 (Inception) through September 30, 2010 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 2010
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.
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.
Earnings
per Share
Basic
earnings per common share is computed by dividing net earnings by the weighted
average number of common shares outstanding during each year presented. Diluted
earnings per common share give the effect to the assumed exercise of stock
options when dilutive. In a loss year, the calculation for basic and diluted
earnings per share is considered to be the same, as the impact of potential
common shares is anti-dilutive. At September 30, 2010, there were 2,100,000
stock options and 1,393,235 stock warrants issued and outstanding that could
dilute future earnings.
Stock-Based
Compensation
In
December 2004, FASB issued FASB ASC 718 (Previously SFAS No. 123R, Share-Based
Payment.) FASB ASC 718 establishes standards for the
accounting for transactions in which an entity exchanges its equity instruments
for goods or services. It also addresses transactions in which an
entity incurs liabilities in exchange for goods or services that are based on
the fair value of the entity’s equity instruments or that may be settled by the
issuance of those equity instruments. FASB ASC 718 focuses primarily
on accounting for transactions in which an entity obtains employee services in
share-based payment transactions. FASB ASC 718 requires that the
compensation cost relating to share-based payment transactions be recognized in
the financial statements. That cost will be measured based on the
fair value of the equity or liability instruments issued.
F-6
WEBSAFETY,
INC.
Formerly
Known as Blindspot Alert, Inc.
NOTES
TO THE FINANCIAL STATEMENTS
SEPTEMBER
30, 2010
Stock
Based Compensation-continued
The
Company’s accounting policy for equity instruments issued to consultants and
vendors in exchange for goods and services follows the provisions of EITF 96-18,
“Accounting for Equity Instruments That are Issued to Other Than Employees for
Acquiring, or in Conjunction with Selling, Goods or Services” and EITF 00-18,
“Accounting Recognition for Certain Transactions Involving Equity Instruments
Granted to Other Than Employees.” The measurement date for the fair
value of the equity instruments issued is determined at the earlier of
(i) the date at which a commitment for performance by the consultant or
vendor is reached or (ii) the date at which the consultant or vendor’s
performance is complete. In the case of equity instruments issued to
consultants, the fair value of the equity instrument is recognized over the term
of the consulting agreement. Stock-based compensation related to
non-employees is accounted for based on the fair value of the related stock or
options or the fair value of the services, whichever is more readily
determinable in accordance with SFAS 123R.
Beneficial
Conversion Feature
Costs
incurred with parties who are providing financing, which include the intrinsic
value of beneficial conversion features associated with the underlying debt, are
reflected as a debt discount. These discounts are generally amortized
over the life of the related debt. In certain circumstances, the
intrinsic value of the beneficial conversion feature may be greater than the
proceeds associated to the convertible instrument. In such
situations, the amount of the discount assigned to the beneficial conversion
feature is limited to the amount of the proceeds allocated to the convertible
instrument.
Fair
Value of Financial Instruments
The fair
value of the Company’s financial instruments is determined by using available
market information and appropriate valuation methodologies. The Company’s
principal financial instruments are cash, accounts receivable, accounts payable,
common stock and preferred stock. At September 30, 2010 and December 31, 2009,
cash, accounts receivable, and accounts payable, due to their short maturities,
and liquidity, are carried at amounts which reasonably approximate fair
value.
Note
3. Property and Equipment
Property
and equipment consist of the following at :
|
September 30,
2010
|
December 31,
2009
|
|||||||
|
Computer
Equipment
|
$ | 15,715 | $ | 15,715 | ||||
|
Web
Site Software
|
165,928 | 150,963 | ||||||
|
Accumulated
depreciation
|
(54,112 | ) | (13,862 | ) | ||||
|
Total
|
$ | 127,531 | $ | 152,816 | ||||
The
Company has incurred website development costs as part of web site application
and infrastructure development activities. Specifically, 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 in accordance with FASB ASC 350-50 (Prior
authoritative literature: FASB EITF 00-2, “Accounting for Web Site Development
Costs”) (see Exhibit 00-2A section a to f within Website Application and
Infrastructure Development Stage).
F-7
WEBSAFETY,
INC.
Formerly
Known as Blindspot Alert, Inc.
NOTES
TO THE FINANCIAL STATEMENTS
SEPTEMBER
30, 2010
The
intended write-off did not include web site development costs of
$201,523. The Company plans to utilize the web site to launch the
WebSafety software products and expects to generate revenues in the
future. The purchase of WebSafety assets from WQN, Inc. did not
change the recoverability of the carrying amount of the capitalized website
development cost and therefore is not considered impaired in accordance with
FASB ASC 360-10 (Prior authoritative literature: FASB Statement No. 144,
paragraph 8). The website development costs will be amortized over
its useful life once the Websafety software products are put in use in
accordance with FASB ASC 350-30-50 (Prior authoritative literature: FASB
Statement No. 142, “Goodwill and Other Intangible Assets”).
Note
4. WebSafety Technology
On July
2, 2009, the Company entered into an agreement with WQN, Inc. to acquire the
software technology, known as “Websafety”. The Company capitalizes software
development costs when technological feasibility has been established for the
software in accordance with ASC 985-20, formerly SFAS No. 86, “Accounting for
the Costs of Computer Software to be sold, leased, or otherwise marketed.” Such
capitalized costs are amortized on a product-by-product basis over their
economic life or the ratio of current revenues to current anticipated revenues
from such software, whichever provides the greater amortization. The Company
periodically reviews the carrying value of capitalized software development
costs and impairments are recognized in the results of operations when the
expected future undiscounted operating cash flow derived from the capitalized
software is less than its carrying value. Should the Company inaccurately
determine when a product reaches technological feasibility or the economic life
of a product, results could differ materially from those reported. The Company
uses what it believes are reasonable assumptions and where applicable,
established valuation techniques in making its estimates.
Note
5. Intangible Asset
As a
result of the Websafety Technology asset purchase, the Company gained all rights
of ownership to the intellectual property of Websafety
Technology. The Company invested an additional $122,815 to develop
technology to complete the project. On October 1, 2009, the Company
deemed the technology ready to be sold and used by the general
public. The Company recorded the Intangible Asset in the amount of
$2,822,815 and elected to amortize the asset over a 36 month
period.
|
September 30,
2010
|
December 31,
2009
|
|||||||
|
Intangible
assets
|
||||||||
|
Websafety
Technology
|
$ | 2,822,815 | $ | 2,822,815 | ||||
|
Less
accumulated amortization
|
(940,938 | ) | (235,235 | ) | ||||
|
Total
intangible assets
|
$ | 1,881,887 | $ | 2,587,580 | ||||
Amortization
expense for the three months ended September 30, 2010 and for fiscal 2009 was
$235,235. Accumulated amortization at September 30, 2010 was
$940,938.
In
accordance with ASC 360-10-35 a long-lived asset shall be tested for
recoverability whenever events or changes in circumstances indicate that its
carrying amount may not be recoverable. The following are examples of such
events or changes in circumstances:
F-8
WEBSAFETY,
INC.
Formerly
Known as Blindspot Alert, Inc.
NOTES
TO THE FINANCIAL STATEMENTS
SEPTEMBER
30, 2010
f. A current expectation that, more likely than not, a long-lived asset will be sold or otherwise disposed of
significantly before the end of its previously estimated useful life.
Management
conducted an impairment analysis which reviewed the carrying value of
capitalized software development costs and impairments against the expected
future undiscounted operating cash flows derived from the capitalized software
to determine if the cash flows were less than its carrying value of the
asset.
Management
based its analysis over a 3-year time-fame which is equal to the estimated life
of the WebSafety Technology asset. The analysis was conducted based
on the following assumptions:
|
|
·
|
The
Company came out of development state in October 2009 with a
fully-marketable product.
|
|
|
·
|
Revenue
for the year-ended 2009 was approximately $33,000. Given the
fact that this was our first quarter as an operating company, management
expected sales to be relatively small and gradually increase as the
Company continued to roll-out its marketing
plan.
|
|
|
·
|
Our
gross revenue assumptions were based on the projected number of
subscribers which was based on inputs received from our direct sales
force. Revenues are based on our established pricing model
times the projected number of
subscribers.
|
|
|
·
|
Gross
margin is determined primarily by established commission rates for direct
sales along with the amortization of the WebSafety Technology
asset.
|
Based on
our analysis as described above, we expect future undiscounted operating cash
flows derived from the WebSafety Technology asset to exceed the
carrying value of the asset as of December 31, 2009 and therefore concluded that
no impairment was necessary.
Due to
similar operating results between December 31, 2009 and September 30, 2010,
Management deemed an impairment analysis necessary in accordance with ASC
360-10-35.
|
|
·
|
Revenue
in the nine months-ended September 30, 2010 was approximately
$242,269. Given the fact that this was our fourth quarter as an
operating company, management expected sales to be relatively small and
gradually increase as the Company continued to roll-out its marketing
plan.
|
|
|
·
|
Our
gross revenue assumptions were based on the projected number of
subscribers which was based on inputs received from our direct sales
force. Revenues are based on our established pricing models
multiplied times the projected number of
subscribers.
|
|
|
·
|
Gross
margin is determined primarily by established commission rates for direct
sales along with the amortization of the WebSafety Technology
asset.
|
Based on
our analysis as described above, we expect future undiscounted operating cash
flows derived from the WebSafety Technology asset to exceed the
carrying value of the asset as of September 30, 2010 and therefore concluded
that no impairment was necessary.
Note
6. Note Payable
On
September 22, 2010, the Company received a loan in the amount of $100,000, due
March 22, 2011 including interest at 5%. The promissory note provides
the holder the right to convert at any time, all or any unpaid principal and
interest into shares of the Company’s common stock at a price equal to $0.10 per
share.
F-9
WEBSAFETY,
INC.
Formerly
Known as Blindspot Alert, Inc.
NOTES
TO THE FINANCIAL STATEMENTS
SEPTEMBER
30, 2010
Due to
the market price per share of $0.35 at the date of commitment (September 22,
2010), the Company determined that there was a beneficial conversion feature on
the promissory note of approximately $250,000. As a result of the
beneficial conversion feature exceeding the proceeds received from the
promissory note, management discounted the note 100% in accordance with rule and
regulations surrounding the accounting for convertible securities with
beneficial conversion features.
Note
7. Option to acquire and expiration
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 would have allowed
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 were
to be credited to the overall price of the licensing had the option been
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 was to be for an
initial five-year period and would be automatically renewable for periods
thereafter. The overall cost for the rights is $270,000. The option
expired on April 1, 2009 without the final payment of $25,000 being made or the
option being renewed or extended notwithstanding the April 1, 2009 expiration
date of the original option. The accounting treatment
is in recognition of the substance of the occurrence management remains in
discussion with principals of Auberg Adams and ESS.
A principal of Auburg Adams LLC is a
minority shareholder in WebSafety, Inc.
Note
8. Stock Issuances
During
the Nine-Month period ended September 30, 2010 we had the following common stock
issuances.
|
Date
|
Number of
Shares
|
Value
|
||||||
|
January
2010
|
2,028,000 | $ | 128,120 | |||||
|
February
2010
|
- | - | ||||||
|
March
2010
|
7,456,333 | 220,350 | ||||||
|
April
2010
|
204,122 | 91,855 | ||||||
|
June
2010
|
2,120,380 | 391,671 | ||||||
|
August
2010
|
630,557 | 67,250 | ||||||
|
September
2010
|
1,142,754 | 370,989 | ||||||
|
Total
Common Issuances
|
13,582,146 | $ | 1,270,235 | |||||
In
addition to the common stock issued above, during the nine month period ended
September 30, 2010, we also recorded $150,762 of common stock cash receipts that
at September 30, 2010 had not been issued. These receipts were
recorded as a current liability at September 30, 2010 and will be issued in the
fourth quarter of 2010. We also converted 1,366,667 preferred
shares issued at $.30 to 1.25 common shares for a total of 1,708,334 common
stock issued. At June 30, 2010 we also adjusted an issue price from
the first quarter, we issued 100,000 common stock on January 6, 2010 at $0.50 a
share for a total of $50,000. We adjusted the price to $0.45 and
issued an additional 11,111 for total issuance of 111,111 common stock shares at
$0.45 for $50,000.
Note
9. Related party transactions
In the
aggregate, during the nine month period ended September 30, 2010, the Company
owed to related parties $564,288 for consulting, legal and marketing services as
reflected below.
|
Owed To
|
Consulting
|
Legal Services
|
Loan
|
Accounting
|
||||||||||||
|
Rowland
W. Day II
|
$ | 175,000 | $ | 230,758 | $ | 150,241 | ||||||||||
|
John
Williams
|
$ | 8,289 | ||||||||||||||
F-10
WEBSAFETY,
INC.
Formerly
Known as Blindspot Alert, Inc.
NOTES
TO THE FINANCIAL STATEMENTS
SEPTEMBER
30, 2010
Rowland
W. Day II is an affiliate in that he is a more than a 15% beneficial shareholder
in the Company. Mr. Day is our CEO and a director. John
Williams was the former contract Treasurer and CFO of the Company and is the
Chief Accounting Officer of WQN, Inc.
The
services that were provided are outlined below.
Legal-
Rowland Day is the Company’s legal counsel.
Accounting-
Accounting fees paid relates to the review of financial records and preparation
of all financial reporting to SEC including audits and preparation of tax
returns.
On July
2, 2009 the Company entered into an asset purchase agreement with WQN, Inc. E.
Denton Jones, who is also a director of the Company, beneficially owns 335,000
shares of common stock in WQN, Inc. Also, in connection with the transactions
contemplated by the Purchase Agreement, B. Michael Adler entered into an
employment agreement with the Company to serve as the Company’s Chairman of the
Board of Directors. Mr. Adler still serves as the Chief Executive
Officer of WQN, Inc. In addition the Company appointed David W. Sasnett, a
director of WQN, Inc, as a director; and hired John Williams, Chief Financial
Officer of the WQN, Inc., as the contract Treasurer and Chief Financial
Officer. Neither Mr. Sasnett nor Mr. Williams has resigned from their
positions with WQN, Inc.
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 common shares 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.
Note
10. Facilities
The
Company’s corporate headquarters are presently located at 2201 W Royal Lane,
Suite 200, Irving, Texas 75063.
On March
22, 2010, we entered into a five year lease agreement for 5,502 square feet of
corporate office space located in Irving, Texas. The total lease
payment will be $472,255 over the five year period beginning May 1, 2010 and
expiring on April 30, 2015. Total annual lease payments are $70,609
in the first year, $96,285 in the second year, $99,036 in the third year,
$101,787 in the fourth year and $104,538 in the fifth year. We expect
this space to meet our needs for the foreseeable future.
Note
11. Sales and Marketing Program
In July
2010 we entered into a sales and marketing agreement with Manage
Mobility. Manage Mobility manages Telecom services for corporations
and municipalities and intends to market our products to their
clients.
In
October 2010 we entered into an agreement with AAA of Northwest
Ohio. AAA of Northwest Ohio offers auto related products and services
to their members.
Management
has developed direct selling, multi-level-marketing channels for the sales of
the Websafety PC and Cellular products. This channel allows the sales of our
services through a person-to-person transaction, away from a fixed retail
location. All of the individuals offering our services are independent
salespeople.
F-11
WEBSAFETY,
INC.
Formerly
Known as Blindspot Alert, Inc.
NOTES
TO THE FINANCIAL STATEMENTS
SEPTEMBER
30, 2010
Note
12. Revenue Recognition
In August
of 2009 the Company began recognizing revenue from the sales of WebSafety
products. WebSafety is a comprehensive software package that gives
parents the capability to monitor and protect children against potentially
dangerous emergency situations. For the period August 2009 through
March 2010 customers purchased annual subscriptions to the WebSafety
service. Since this revenue is earned over a 12-month period, the
company recognizes 1/12 of sales in the month of sale. The remaining
11/12 of revenue is deferred and recognized equally over an 11-month
period. After March 2010 WebSafety changed to monthly
subscriptions.
Note
13. Newly issued pronouncements
In May
2009, the FASB issued FASB ASC 855-10 (Prior authoritative literature: Statement
No. 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 will be effective in
the second quarter of fiscal 2009. The adoption of FASB ASC 855-10 did not have
a material effect on our financial position, cash flows, or results of
operations.
Note
14. Off-balance sheet arrangements
At
September 30, 2010, we did not have any material commitments for capital
expenditures or have any transactions, obligations or relationships that could
be considered off-balance sheet arrangements.
Note
15. Legal Proceedings
On August 25, 2009, the Company
terminated its President Clifton Jolley for cause. In June 2010, the
Company and Mr. Jolley settled the pending arbitration. According to
the settlement the Company must issue 85,000 shares of common stock to Mr.
Jolley and receive a full release from Mr. Jolley.
Note
16. Private Placement Agreement
On
February 8, 2010 Litchfield Enterprises, Inc. signed a non-exclusive consulting
agreement with the Company to assist with a private placement of the Company’s
stock. Per this agreement, Litchfield Enterprises, Inc. will on a “best effort”
basis, seek to raise one million one hundred and twenty-five thousand dollars
($1,125,000) by selling 2,500,000 shares at $.45 per share. Also,
under the private placement agreement, the Company granted Litchfield
Enterprises, Inc. one (1) warrant exercisable at $.80 per share for each share
of their private placement placed. These warrants will be valid for
one (1) year from the date of issuance. As of September 30, 2010, we
issued 800,000 shares of common stock to Litchfield and their investors along
with 600,000 warrants.
On
September 11, 2010 Wakabayashi Fund, LLC. signed a non-exclusive consulting
agreement with the Company to act as a capital consultant for a six month
period. Under the private placement agreement, the Company agrees to
pay Wakabayashi a success fee of seven percent (7%), inclusive of all fees, in
cash of the amount of capital raised as a result of contact by
Wakabayashi.
Note
17. Stock Based Compensation
In
November 2009, the Board of Directors and Shareholders adopted the 2008 Stock
Option Plan providing for the issuance of up to 10,000,000 shares
to Company officers, directors, employees and to independent contractors
who provide services to the Company.
Options
granted under the 2008 Stock Option Plan vest as determined by the Board of
Directors and terminate after the earliest of the following events: expiration
of the option as provided in the option agreement, 90 days subsequent to the
date of termination of the employee, or ten years from the date of grant (five
years from the date of grant for incentive options granted to an employee who
owns more than 10% of the total combined voting power of all classes stock at
the date of grant). In some instances, granted stock options are
immediately exercisable into restricted shares of common stock, which vest in
accordance with the original terms of the related options. The Company
recognizes compensation expense ratably over the requisite service
period.
F-12
WEBSAFETY,
INC.
Formerly
Known as Blindspot Alert, Inc.
NOTES
TO THE FINANCIAL STATEMENTS
SEPTEMBER
30, 2010
The
option price of each share of common stock shall be determined by the Board of
Directors or compensation committee (when one is established), provided that
with respect to incentive stock options, the option price per share shall in all
cases be equal to or greater than 100% of the fair value of a share of common
stock on the date of the grant, except an incentive option granted under the
2008 Stock Option Plan to a shareholder that owns more than 10% of the total
combined voting power of all classes of stock, shall have an exercise price of
not less than 110% of the fair value of a share of common stock on the date of
grant. No participant may be granted incentive stock options, which would result
in shares with an aggregate fair value of more than $10,000,000 first becoming
exercisable in one calendar year.
In
September 2009, 700,000 stock options with an exercise prices ranging from of
$0.10 to $0.35 were granted to officers of the Company which vest as
follows: 20% at the conclusion of each 12 month period from the 5 year
term. These options carry a grant expiration date of 5 years after
issuance. In January 2010, 1,400,000 stock options with exercise
prices of $0.025 were granted to an officer and a board member of the Company
which vest monthly over a 36 month term. These options carry a
grant expiration date of 3 years after issuance. As of September 30,
2010, 268,666 of the stock options had vested.
For the
nine months ended September 30, 2010, the Company recorded compensation costs
for options and shares granted under the plan amounting to
$128,910. There were no stock options or shares granted or
outstanding prior to September 30, 2009, therefore no compensation expense was
recorded for the three months ended June 30, 2009. A deduction is not
allowed for income tax purposes until nonqualified options are exercised. The
amount of this deduction will be the difference between the fair value of the
Company’s common stock and the exercise price at the date of exercise. The tax
effect of the income tax deduction in excess of the financial statement expense,
if any, will be recorded as an increase to additional paid-in
capital. No tax deduction is allowed for incentive stock options.
Accordingly no deferred tax asset is recorded for GAAP expense related to these
options.
Management
has valued the options at their date of grant utilizing the Black Scholes Merton
option pricing model. The fair value of the underlying shares was
determined based on the closing price of the Company’s publicly-traded shares as
of date of the grant. Further, the expected volatility was
calculated using the historical volatility of the Company’s
stock.
The
risk-free interest rate is based on the implied yield available on U.S. Treasury
issues with an equivalent term approximating the expected life of the options
depending on the date of the grant and expected life of the
options. The expected life of options used was based on the
contractual life of the option granted. The Company determined the
expected dividend rate based on the assumption and expectation that earnings
generated from operations are not expected to be adequate to allow for the
payment of dividends in the near future. The following weighted-average
assumptions were utilized in the fair value calculations for options
granted:
|
|
Nine months Ended
|
|||
|
|
September 30, 2010
|
|||
|
Expected
dividend yield
|
0 | % | ||
|
Expected
stock price volatility
|
418.5 | % | ||
|
Risk-free
interest rate (1)
|
1.56 | % | ||
F-13
WEBSAFETY,
INC.
Formerly
Known as Blindspot Alert, Inc.
NOTES
TO THE FINANCIAL STATEMENTS
SEPTEMBER
30, 2010
The
Company has granted stock options to officers and employees as
follows:
|
Date of
|
Options
|
Exercise
|
Options Outstanding
|
Expiration
|
Vesting
|
||||||||||
|
Grant
|
Granted
|
Price
|
As of 9/30/2009
|
Date
|
Date
|
||||||||||
|
9/10/09
|
100,000 | $ | 0.35 | 100,000 |
9/10/2014
|
9/102010
|
|||||||||
|
9/14/09
|
100,000 | 0.10 | 100,000 |
9/14/2014
|
9/14/2010
|
||||||||||
|
9/14/09
|
500,000 | 0.10 | 500,000 |
9/14/2014
|
9/14/2010
|
||||||||||
|
01/08/10
|
900,000 | .025 | 900,000 |
01/08/13
|
01/08/13
|
||||||||||
|
01/08/10
|
500,000 | .025 | 500,000 |
01/08/13
|
01/08/13
|
||||||||||
|
Total
|
2,100,000 | ||||||||||||||
The
following table summarizes the status of The Company aggregate stock options
granted under the incentive stock option plan:
|
Number
|
Weighted
|
|||||||||||||||
|
of Shares
|
Average
|
Weighted
|
||||||||||||||
|
Remaining
|
Intrinsic
|
Average
|
Aggregate
|
|||||||||||||
|
Subject to Exercise
|
Options
|
Price
|
Life (Years)
|
Value
|
||||||||||||
|
Outstanding
as of September, 2008
|
- | $ | - | - | - | |||||||||||
|
Granted
– 2009
|
700,000 | $ | 0.214 | 5.00 | $ | 150,000 | ||||||||||
|
Forfeited
– 2009
|
- | $ | - | - | ||||||||||||
|
Exercised
– 2009
|
- | $ | - | - | - | |||||||||||
|
Granted
– 2010
|
1,400,000 | $ | 0.975 | 5.00 | $ | 1,365,000 | ||||||||||
|
Forfeited
– 2010
|
- | $ | - | - | - | |||||||||||
|
Exercised
– 2010
|
- | $ | - | - | - | |||||||||||
|
Outstanding
as of September 30, 2010
|
2,100,000 | $ | 0.721 | 5.00 | $ | 1,515,000 | ||||||||||
|
Exercisable
as of September 30, 2010
|
268,866 | $ | - | - | $ | - | ||||||||||
The
weighted-average grant date fair value of options outstanding at September 30,
2010 was $0.062. The total intrinsic value of options exercised during the three
months ended September 30, 2010 was $0.
The
following table summarizes the status of the Company aggregate non-vested shares
granted under the 2008 Stock Option Plan.
|
|
Number of
Non-
vested
Shares
Subject to
Options
|
Weighted-
Average
Grant-
Date
Fair Value
|
||||||
|
Non-vested as of September 30,
2010
|
- | $ | ||||||
|
Non-vested
granted —nine months ended September 30, 2010
|
2,100,000 | $ | 0.062 | |||||
|
Vested — nine
months ended September 30, 2010
|
268,666 | $ | 0.00 | |||||
|
Forfeited — nine
months ended September 30, 2010
|
- | $ | ||||||
|
Non-vested
as of September 30, 2010
|
1,831,334 | $ | 0.062 | |||||
F-14
WEBSAFETY,
INC.
Formerly
Known as Blindspot Alert, Inc.
NOTES
TO THE FINANCIAL STATEMENTS
SEPTEMBER
30, 2010
As of
September 30, 2010 the unrecognized compensation cost related to non-vested
share based compensation arrangements granted under the plan that was
approximately $1,370,761. These costs are expected to be recognized
on a straight line basis from September 10, 2009 through January 08,
2015. The total fair value of options and shares vested during the
year period ended September 30, 2010 was $205,738.
Note
17. Subsequent Events
On August
25, 2009, the Company terminated President Clifton Jolley for
cause. In June 2010, the Company and Mr. Jolley agreed to settle the
pending arbitration. According to the settlement the Company must
issued 85,000 shares of common stock to Mr. Jolley and receive a full release
from Mr. Jolley.
Note
18. Reclassifications
Certain
amounts in the prior year financial statements have been reclassified to conform
with the current period presentation.
F-15
The
following discussion should be read in conjunction with our unaudited condensed
financial statements as of, and for the three and nine months ended September
30, 2010 and 2009, and with our annual report on Form 10-K for the year ended
December 31, 2009. Certain items have been reclassified to conform to the
current year’s presentation.
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., 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 Exchange Act and Section 27A of the Securities Act. Such
forward-looking statements, including, without limitation, those relating to the
future business prospects, revenues, and income of WebSafety, Inc., wherever
they occur, are necessarily estimates reflecting the best judgment of the senior
management of WebSafety, 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.
Plan
of Operation
WebSafety,
Inc., a development stage company, formerly known as BlindSpot Alert, Inc.,
commenced a corporate redirection in June 2008 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 using GPS technology. In June 2008 we 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. We acquired this license from WQN, Inc.
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 had intended to begin selling this proprietary software in 2009,
however, the option to acquire the rights expired on April 1, 2009 and an
expense in the amount of $245,000 was recorded as of March 31, 2009 to reflect
the substance of the expiration as of that date.
On July
2, 2009 the Company entered into an asset acquisition agreement with WQN, Inc.
Under the agreement we acquired all of the technology known as The WebSafety
Technology and Software for approximately 27,000,000 shares of our common stock.
Consequently, the Company no longer has any royalty commitments to WQN under the
September 30, 2008 license agreement.
Management
believes that our 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.
From June
2008 through September 30, 2009 we have refined our website and we commenced
revenue activity in the third quarter of 2009. We also intend to
market our products and services through relationships developed with “trusted”
sources consisting 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.
4
Cumulatively
through September 30, 2010 we have raised $2,577,024 through the sale of common
and preferred stock. The proceeds of which are being used to
implement WebSafety’s plan of operations. This funding has been
utilized in the furtherance of our plan of operations. Future funding
is intended to be used in the commercialization process.
Results
of Operations
Three
Months Ended September 30, 2010 compared to Three Months Ended September 30,
2009
Revenue
Revenues
were $119,779 during the three months ended September 30, 2010 compared to
revenues of $4,788 for the three months ended September 30, 2009.
Cost
of Revenue
Cost of
revenue was $50,127 during the three months ended September 30,
2010. We did not record any cost of revenues for the three months
ended September 30, 2009.
Operating
Expenses, Other Income and Expenses and Loss from Operations
For the
three months ended September 30, 2010 we sustained a net operating loss of
$1,159,287 compared to a net operating loss of $664,154 for the three months
ended September 30, 2009. The $445,133 net operating loss increase
was mainly due to higher general and administrative expense, which increased
primarily due to an expansion in marketing and sales expense. Also,
there was an increase in depreciation and amortization of $248,259 for the three
months ended September 30, 2010 compared to the three months ended September 30,
2009.
Nine
Months Ended September 30, 2010 compared to Nine Months Ended September 30,
2009
Revenue
Revenues
were $242,269 during the nine months ended September 30, 2010 compared to
revenues of $4,788 for the nine months ended September 30, 2009.
Cost
of Revenue
Cost of
revenue was $108,269 during the nine months ended September 30,
2010. We did not record any cost of revenues for the nine months
ended September 30, 2009.
Operating
Expenses, Other Income and Expenses and Loss from Operations
For the
nine months ended September 30, 2010 we sustained a net operating loss of
$2,865,030 compared to a net operating loss of $1,238,703 for the nine months
ended September 30, 2009. The $1,626,327 net operating loss increase
was mainly due to higher general and administrative expense which increased
primarily due to an expansion in marketing and sales expense. Also,
an increase in depreciation and amortization expense of $745,665 for the nine
months ended September 30, 2010 was offset by a $245,000 decrease in option to
acquire expense for the nine months ended September 30, 2009.
Financial
Condition
Cash on
hand at September 30, 2010 was $42,489 and working capital (the excess of
current assets over current liabilities) was a negative $819,634 compared with
$442,542 at December 31, 2009. The decrease in working capital was primarily
attributable to increased disbursements in 2010 for payroll, marketing, legal,
professional and other costs relating to the implementation of the operating
plan.
Other
assets decreased to $1,888,714 at September 30, 2010 from $2,594,400 at December
31, 2009. The decrease in other assets was primarily a result of
$705,703 of amortization related to the WebSafety Technology
asset. Total current liabilities increase to $862,123 at
September 30, 2010 from $465,461. The increase was due to increased
payables for marketing, legal, professional and other costs relating to the
implementation of the operating plan.
5
Stockholders’
equity was $1,196,611 at September 30, 2010 compared to $2,304,674 at December
31, 2009. The $1,108,063 decrease was due to the issuance of
$1,371,603 worth of common shares and $386,731 of additional paid-in capital
related to the compensation expense for stock options off-set by net operating
losses of $2,845,030 for the nine months ended September 30, 2010.
Liquidity
Cumulatively,
through September 30, 2010, the Company had raised $2,682,025 in new equity
including $247,334 being raised in the Third Quarter 2010 to support planned
operations. In light of recent operating results and negative cash flows,
additional capital will be required to fund the Company’s operations. On
February 8, 2010, the Company signed a non-exclusive consulting agreement
Litchfield Enterprises, Inc. (LEI). Through this agreement, LEI will
assist with a private placement of the Company’s stock. Per this
agreement, LEI will on a “best effort” basis, seek to raise one million one
hundred and twenty-five thousand dollars ($1,125,000) by selling 2,500,000
shares at $.45 per share. (See “Note 15-Private Placement Agreement” for further
discussion). If successful, the LEI private placement should generate sufficient
capital needed to fund the Company through the fourth quarter of
2010.
There is
no assurance that the Company will be successful with the LEI private placement
or with the placement agent. On August 6, 2010, the Company entered
into a placement agreement with Aegis Capital (“Aegis”). Aegis was to
act as the Company’s exclusive placement agent on a best efforts basis to raiser
a minimum of $1,350,000 and up to a maximum of $5,400,000. This
agreement was terminated on September 20, 2010. It is management’s
intent to continue fund raising efforts to generate the capital required to
support expanding operations. There can be no assurance that we will
be able to raise any more additional capital on terms that are beneficial to
us.
Critical
Accounting Policies and Estimates
The
discussion and analysis of our financial condition and results of operations is
based upon our financial statements, which have been prepared in accordance with
accounting principles generally accepted in the United
States. Generally accepted accounting principles require management
to make estimates, judgments and assumptions that affect the reported amounts of
assets, liabilities, revenues and expenses, and the disclosure of contingent
assets and liabilities. We base our estimates on experience and on
various other assumptions that we believe to be reasonable under the
circumstances, the results of which form the basis for making judgments about
the carrying values of assets and liabilities that may not be readily apparent
from other sources. Our actual results may differ from those
estimates.
Off-balance
sheet arrangements
At
September 30, 2010, we did not have any material commitments for capital
expenditures or have any transactions, obligations or relationships that could
be considered off-balance sheet arrangements.
ITEM
3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
We have
not entered into, and do not expect to enter into, financial instruments for
trading or hedging purposes.
ITEM
4. CONTROLS AND PROCEDURES
Disclosure
Controls and Procedures
Our
management evaluated, with the participation of our Chief Executive
Officer/Chief Financial Officer, the effectiveness of our disclosure controls
and procedures as of the end of the period covered by this Form 10-Q. Based
on this evaluation, our Chief Executive Officer/ Chief Financial Officer has
concluded that our disclosure controls and procedures (as defined in
Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as
amended (the Exchange Act)), as of the end of such period, are ineffective to
ensure that information required to be disclosed by us in reports that we file
or submit under the Exchange Act is recorded, processed, summarized and reported
within the time periods specified in Securities and Exchange Commission rules
and forms.
6
There
have been no significant changes in our internal controls over financial
reporting during the third quarter ended September 30, 2010 that have materially
affected, or are reasonably likely to materially affect, our internal controls
over financial reporting.
This
Quarterly Report does not include an attestation report of the Company’s
registered public accounting firm regarding internal control over financial
reporting. Management’s report was not subject to attestation by the Company’s
registered public accounting firm pursuant to temporary rules of the Securities
and Exchange Commission that permit the Company to provide only management’s
report in this Quarterly Report.
Management
Report on Internal Control over Financial Reporting
Our
management is responsible for establishing and maintaining adequate internal
control over financial reporting as defined in Rule 13a-15(f) or 15d-15(f)
promulgated under the Exchange Act. Those rules define internal control over
financial reporting as 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 generally accepted
accounting principles and includes those policies and procedures
that:
|
·
|
Pertain
to the maintenance of records that in reasonable detail accurately and
fairly reflect the transactions and dispositions of the assets of the
company;
|
|
·
|
Provide
reasonable assurance that transactions are recorded as necessary to permit
preparation of financial statements in accordance with generally accepted
accounting principles, and the receipts and expenditures of the company
are being made only in accordance with authorizations of management and
directors of the Company; and
|
|
·
|
Provide
reasonable assurance regarding prevention or timely detection of
unauthorized acquisitions, use or disposition of the company’s assets that
could have a material effect on the financial
statements.
|
Because
of its inherent limitations, internal controls over financial reporting may not
prevent or detect misstatements. Projections of any evaluation of effectiveness
to future periods are subject to the risk that controls may become inadequate
because of changes in conditions, or that the degree of compliance with the
policies or procedures may deteriorate.
Management
assessed the effectiveness of our internal control over financial reporting as
of September 30, 2010. In making this assessment, our management used the
criteria established in Internal Control-Integrated Framework issued by the
Committee of Sponsoring Organizations of the Treadway Commission
(COSO).
Changes
in Internal Control
There
have been no changes in our internal control over financial reporting, as
defined in Rule 13a-15(f) under the Securities Exchange Act of 1934, during our
most recent fiscal quarter that have materially affected, or are reasonably
likely to materially affect our internal control over financial
reporting.
On August
25, 2009, the Company terminated its President Clifton Jolley for
cause. In July 2010 we settled the arbitration with Mr.
Jolley. According to the settlement the Company must issue 85,000
shares of common stock and received a full release. The Company has
completed the settlement agreement and has notified the Arbitrator and the
Arbitrator is waiting for Mr. Jolley's signed agreement."
7
Item
1.A. Risk Factors
The Company was organized during 2006
and is at an early stage of operation and has no substantial revenue. The
Company devotes its full resources toward marketing, selling and distributing
the software products. The Company began receiving revenue from sales of
software products during the fourth quarter 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 its software
products. 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 software products, 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 software products that the Company intends to
market and sell; or, if the market exists, 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 operations,
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 SOFTWARE PRODUCTS
The
Company is heavily dependent upon the capabilities of the software products. The
failure of the software to accomplish the objectives as represented will damper
if not destroy the Company’s marketing.
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.
CHALLENGES
FROM COMPETITION
Although
the Company is unaware of an available product that contains all the
characteristics, features and capabilities of the WEBSAFETY 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 WEBSAFETY
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
8
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.
APPROXIMATELY
39% OF OUR COMMON 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
August 9, 2010, WQN, Inc. directly owns 27,000,000 shares, which represents
approximately 39% of our 68,477,860 shares of outstanding common
stock. As a result, WQN 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.
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 its 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.
9
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 war
with Iraq and Afghanistan. These attacks and these wars have caused
instability in the marketplace and contributed to a downturn in the global
economy. In the future, there may be armed hostilities, continued
wars, further acts of terrorism and civil disturbances in the United States or
elsewhere, which may further contribute to economic instability in the United
States. Such disturbances could have a material adverse effect on our business,
financial condition and operating results.
Item
2. Unregistered Sales of Equity Securities and Use of
Proceeds
For the
period ending September 30, 2010, the Company sold 271,669 shares of its
unregistered common stock to various accredited investors for proceeds of
$167,333. The sales were exempt from registration pursuant to the
Securities Act of 1933. The proceeds were used for working
capital.
|
No.
|
Description
of Exhibit
|
|
31.1
|
Rule
13a-14(a) Certification of Chief Executive Officer
|
|
31.2
|
Rule
13e-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
|
10
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.
|
Date:
|
November
22, 2010
|
By:
|
/s/ Rowland W. Day II
|
|
Rowland
W. Day II,
|
|||
|
Principal
Executive Officer
|
11