AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 6, 2000
REGISTRATION NO. 333-____________
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
____________________
FORM S-8
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
____________________
SAF-T-HAMMER CORPORATION
(Exact Name of Registrant as Specified in Its Charter)
NEVADA 87-0543688
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
14500 N. Northeight Suite 221
Scottsdale, Arizona 94087
(Address of Principal Executive Offices, Including Zip Code)
Consulting Agreement
(Full Title of the Plan)
____________________
Mitchell L. Saltz
President
14500 N. Northsight Suite 221
(480) 949-9700
(Name, Address, and Telephone Number of Agent for Service)
CALCULATION OF REGISTRATION FEE
Title of Securities Amount to be Proposed Maximum Proposed Maximum Amount of
to be Registered Registered Offering Price per Share Aggregate Offering Price Registration Fee
Common Stock,
par value $0.001 250,000 $ 1.625 (1) $ 406,250 $ 107.25
(1) Estimated solely for the purpose of computing the amount of the
registration fee pursuant to Rule 457(c) based on the closing market price on
April 5, 2000.
EXPLANATORY NOTE
Saf-T-Hammer Corporation ("SAFH") has prepared this Registration Statement in
accordance with the requirements of Form S-8 under the Securities Act of 1933,
as amended (the "1933 Act"), to register certain shares of common stock, par
value $0.001 per share, issued to certain selling shareholders. Under cover of
this Form S-8 is a Reoffer Prospectus SAFH prepared in accordance with Part I of
Form S-3 under the 1933 Act. The Reoffer Prospectus may be utilized for
reofferings and resales of up to 250,000 shares of common stock acquired by the
selling shareholders.
PART I
INFORMATION REQUIRED IN THE SECTION 10(A) PROSPECTUS
SAFH will send or give the documents containing the information specified in
Part 1 of Form S-8 to employees or consultants as specified by Securities and
Exchange Commission Rule 428 (b) (1) under the Securities Act of 1933, as
amended (the "1933 Act"). SAFH does not need to file these documents with the
commission either as part of this Registration Statement or as prospectuses or
prospectus supplements under Rule 424 of the 1933 Act.
REOFFER PROSPECTUS
SAF-T-HAMMER CORPORATION
14500 N. Northeight Suite 221
Scottsdale, Arizona 94087
(480) 949-9747
250,000 SHARES OF COMMON STOCK
The shares of common stock, $0.001 par value per share, of Saf-T-Hammer
Corporation ("SAFH" or the "Company") offered hereby (the "Shares") will be sold
from time to time by the individuals listed under the Selling Shareholders
section of this document (the "Selling Shareholders"). The Selling Shareholders
acquired the Shares pursuant to a Consulting Agreement for consulting services
that the Selling Shareholders provided to SAFH.
The sales may occur in transactions on the over-the-counter market maintained by
Nasdaq at prevailing market prices or in negotiated transactions. SAFH will not
receive proceeds from any of the sale the Shares. SAFH is paying for the
expenses incurred in registering the Shares except with respect to the legal
fees incurred in connection therewith, which have completed by counsel to the
Consultants.
The Shares are "restricted securities" under the Securities Act of 1933 (the
"1933 Act") before their sale under the Reoffer Prospectus. The Reoffer
Prospectus has been prepared for the purpose of registering the Shares under the
1933 Act to allow for future sales by the Selling Shareholders to the public
without restriction. To the knowledge of the Company, the Selling Shareholders
have no arrangement with any brokerage firm for the sale of the Shares. The
Selling Shareholders may be deemed to be an "underwriter" within the meaning of
the 1933 Act. Any commissions received by a broker or dealer in connection with
resales of the Shares may be deemed to be underwriting commissions or discounts
under the 1933 Act.
SAFH's common stock is currently traded on the NASDAQ Over-the-Counter Bulletin
Board under the symbol "SAFHE." Effective March 31, 2000, as a result of our
compliance with NASD Rule 6530, our common stock will be traded under the symbol
"SAFH."
This investment involves a high degree of risk. Please see "Risk Factors"
beginning on page 10.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED WHETHER
THIS REOFFER PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
________________________
April 5, 2000
1
TABLE OF CONTENTS
Where You Can Find More Information 2
Incorporated Documents 2
The Company 4
Risk Factors 10
Use of Proceeds 13
Selling Shareholders 14
Plan of Distribution 14
Legal Matters 15
Experts 15
________________________
You should only rely on the information incorporated by reference or provided in
this Reoffer Prospectus or any supplement. We have not authorized anyone else
to provide you with different information. The common stock is not being
offered in any state where the offer is not permitted. You should not assume
that the information in this Reoffer Prospectus or any supplement is accurate as
of any date other than the date on the front of this Reoffer Prospectus.
WHERE YOU CAN FIND MORE INFORMATION
SAFH is required to file annual, quarterly and special reports, proxy statements
and other information with the Securities and Exchange Commission (the "SEC") as
required by the Securities Exchange Act of 1934, as amended (the "1934 Act").
You may read and copy any reports, statements or other information we file at
the SEC's Public Reference Rooms at:
450 Fifth Street, N.W., Washington, D.C. 20549;
Seven World Trade Center, 13th Floor, New York, N.Y. 10048
Please call the SEC at 1-800-SEC-0330 for further information on the Public
Reference Rooms. Our filings are also available to the public from commercial
document retrieval services and the SEC website (http://www.sec.gov).
INCORPORATED DOCUMENTS
The SEC allows SAFH to "incorporate by reference" information into this Reoffer
Prospectus, which means that the Company can disclose important information to
you by referring you to another document filed separately with the SEC. The
information incorporated by reference is deemed to be part of this Reoffer
Prospectus, except for any information superseded by information in this Reoffer
Prospectus.
2
SAFH's Report on Form 8-K, dated April 3, 2000 is incorporated herein by
reference. The Form 10-SB of Lost Coast Ventures, Inc. (the Company's
predecessor), filed with the Commission on January 19, 2000 is incorporated
herein by reference. In addition, all documents filed or subsequently filed by
the Company under Sections 13(a), 13(c), 14 and 15(d) of the 1934 Act, before
the termination of this offering, are incorporated by reference.
The Company will provide without charge to each person to whom a copy of this
Reoffer Prospectus is delivered, upon oral or written request, a copy of any or
all documents incorporated by reference into this Reoffer Prospectus (excluding
exhibits unless the exhibits are specifically incorporated by reference into the
information the Reoffer Prospectus incorporates). Requests should be directed to
the Chief Executive Officer at SAFH=s executive offices, located at 14500 N.
Northsight Suite 221, Scottsdale, Arizona 85260. SAFH=s telephone number is
(480) 949-9700. The Company's corporate Web site address is
http://www.saf-t-hammer.com.
3
COMPANY ORGANIZATION, REORGANIZATION AND OPERATIONS
Prior to incorporation as Saf-T-Hammer Corporation in 1998, the Company
existed as De Oro Mines, Inc. De Oro Mines, Inc. was incorporated on June 17,
1991 in the state of Nevada. Its original Articles of Incorporation provided
for 1,000,000 shares of common stock with a par value of $0.01 per share. On
August 15, 1996, the shareholders of the Company authorized the recapitalization
of the Company and the Amendment of its Articles of Incorporation to allow the
Corporation to issue up to 100,000,000 shares of a single class of Common Stock
with a par value of $0.001. The Amended Articles were duly adopted as stated
and were filed on October 16, 1996 with the Secretary of the State of Nevada.
From its inception, De Oro Mines, Inc. was in the development stage and was
primarily engaged in the business of developing mining properties. During
1992, De Oro lost its remaining assets and settled its liabilities, and from
that date forward remained dormant. Effective October 20, 1998, the company
acquired the assets of Saf-T-Hammer, Inc., and changed its name from De Oro
Mines, Inc. to Saf-T-Hammer Corporation. Prior to this agreement becoming
effective, De Oro Mines, Inc. had a total of 532,788 shares of common stock
issued and outstanding. Pursuant to the Asset Agreement, the Company issued
1,331,250 shares of common stock to Saf-T-Hammer, Inc., which then resulted in a
total of 1,864,038 shares of common stock being issued and outstanding. The
shareholders also approved a four share for one share forward stock split. This
asset purchase agreement and bill of sale was approved by the majority of the
shareholders of both corporations and provided for the purchase of all of the
assets of Saf-T-Hammer, Inc., which included the device more specifically
described below and all rights connected with and concerning the device.
The principal asset of Saf-T-Hammer, Inc. was a product in development and
the patent pending rights to a childproof gun safety device known as the
Saf-T-Hammer, which is an easily removable, external firearm hammerhead that
enables safe storage of weapons, including loaded firearms. Once the
Saf-T-Hammer has been removed, the weapon is incapable of discharging. When the
Saf-T-Hammer is placed back on the weapon, it is again ready to fire. A gun
owner can easily remove the Saf-T-Hammer in approximately one second and take it
with him or her when leaving the home, thereby relieving the fear of death or
injury to a child or other person due to an accidental discharge of the weapon.
Upon the gun owner's return, he or she can easily place the Saf-T-Hammer back on
the weapon in about a second, as well. Thus, the Saf-T-Hammer allows both
safety and protection while the weapon remains loaded. The unique and salient
features of the Saf-T-Hammer are as follows:
o Saf-T-Hammer, unlike trigger locks, can be used with a loaded weapon;
o Saf-T-Hammer cannot be fired when in safety mode;
o Saf-T-Hammer can be removed and re-armed in less than a second;
o Saf-T-Hammer requires no keys;
o Saf-T-Hammer requires no codes to remember;
o Saf-T-Hammer requires no appreciable level of mechanical ability to
operate;
o Saf-T-Hammer cannot be broken, twisted or cut-off;
o Saf-T-Hammer is cheaper than other similar gun safety devices to produce;
and
o Saf-T-Hammer is currently patent pending.
4
The Company's administrative offices and distribution facilities are
located at 14500 N. Northsight, Suite 221, Scottsdale, Arizona 85260. There are
currently six employees who perform managerial and administrative duties for the
Company. To date, Saf-T-Hammer Corporation has had no business operations and
limited prior operating history. For the most part, the Company's operations
have been narrowly confined to research and development, infrastructure and
market planning, and cultivation of its sales and marketing network. As a
direct result of the Company's emphasis upon internal development, it has
fostered two gun safety products ("Saf-T-Hammer" and "Saf-T-Trigger") that will
be marketed and distributed through standard firearms industry distribution
channels, catalogue outlets and direct sales. The Company has also identified a
unique proprietary marketing plan for one of its divisions, an Internet safety
mall. This Internet based "mall" concept will feature products and services
incidental to home and family safety issues and should serve as a secondary
profit center to the Company's core business.
THE ADDRESSED MARKET
Three target markets exist for Saf-T-Hammer & Saf-T-Trigger:
1. Current gun owners who store their weapons in residences where children
reside or visit;
2. Future gun owners who will purchase a weapon equipped with Saf-T-Hammer
or Saf-T-Trigger, or replace their current weapon with a gun, which has been
equipped with Saf-T-Hammer or Saf-T-Trigger; and
3. Gun Dealers and Gunsmiths, (technically known as Federal Firearms
Licensees or FFL's) who will act as the distributors of Saf-T-Hammer and
Saf-T-Trigger, and as the point of contact for gun owners wanting to be fitted
with Saf-T-Hammer or Saf-T-Trigger technology. Currently, in the United States,
there are 93,000 FFL's.
The company acknowledges that specialized target marketing strategies will
be required for each of these three markets and has addressed those needs with a
comprehensive marketing plan.
NEW GUN SALES
Saf-T-Hammer plans to license the rights of its product to the major gun
manufacturers for a royalty payment for each Saf-T-Hammer or Saf-T-Trigger. Gun
manufacturers can produce both of these products for a few dollars apiece after
minor changes are made to their existing manufacturing process.
AFTER-MARKET CONVERSIONS
Saf-T-Hammer intends to establish licensed Saf-T-Hammer dealers (existing
gunsmiths) to convert currently owned guns with Saf-T-Hammers and
Saf-T-Triggers. It is anticipated that dealers will purchase the products from
the Company, and will charge the customer for the labor involved in installing a
Saf-T-Hammer or Saf-T-Trigger.
5
The dealers can install the devices in approximately 10 minutes. The Company
anticipates that the total cost of the conversion to the consumer will be less
than $50.00.
BUSINESS STRATEGY
Current and Future Gun Owners
Saf-T-Hammer and Saf-T-Trigger can be marketed successfully to both current
and future gun owners through both conventional techniques, and complimentary
creative strategies. Conventional marketing strategies will include the venues
currently utilized by all gun manufacturers, including magazines, gun shows,
target mailings, etc. Sales data from the major gun manufacturers suggests that
conventional marketing techniques are successful. Additionally, Saf-T-Hammer
can be promoted through unconventional avenues. Some of these include:
Development of relationships with safety organizations such as the National
Safety Council, Center to Prevent Handgun Violence, Mothers Against Violence in
America (MAVIA), the NRA's Eddie Eagle Gun Safety Program, and others which are
spreading across the United States. In some instances, Saf-T-Hammer should
earn the endorsement of safety organizations based on pure product merit. In
other circumstances, a "team approach" can be utilized to benefit both the
non-profit entity and Saf-T-Hammer, through the use of cash incentive donations
to these organizations for sales attributed to the organizations' efforts.
By virtue of the novel and unprecedented safety technology it represents,
Saf-T-Hammer can make good utilization of a major public relations "kick-off"
campaign. The ease and speed with which the technology can be implemented,
coupled with the complete trustworthiness of its safety features makes
Saf-T-Hammer a truly newsworthy invention. Because Saf-T-Hammer's products are
strictly safety devices, they are not burdened by the politics surrounding gun
ownership and gun rights, and can be widely embraced as a solution to unintended
gun injuries and death. The government scrutiny and public focus on gun danger
makes the present a perfect time to launch Saf-T-Hammer into the marketplace.
Gun Dealers and Gunsmiths Performing Conversions
Dealers and gunsmiths ("FFL's") will also require specialized marketing.
To successfully foster a mass desire to sell Saf-T-Hammer-equipped firearms will
depend on communicating the following to FFL's:
The profit potential of selling Saf-T-Hammer equipped guns;
The ease of the conversion process, and the telephone and web-site
availability of on-going technical support;
The ease of the use of the Saf-T-Hammer and Saf-T-Trigger, and the ease
with which it may be demonstrated to the gun owner, as well as the availability
of point-of-purchase promotional and training material to be made available to
gun owners at the dealership.
Detailed strategies for each of these markets are underway.
6
COMPETITION
The major competitors of the Company are the manufacturers of trigger
locks. Currently, most of these devices require that the guns be unloaded.
Saf-T-Hammer is designed to be used on either loaded or un-loaded weapons. We
not only offer a solution to existing gun owners, but to new gun owners as well.
FIREARMS AVAILABLE FOR SAF-T-HAMMERS
Nearly all of the 230 million firearms in the U.S. can be fitted with
either a Saf-T-Trigger or Saf-T-Hammer, and in many cases, both.
INSTITUTION OF A CHARITABLE FOUNDATION FOR GUN SAFETY
In light of numerous recent events, the Company recognizes that now, more
than ever before, a meaningful statement coupled with action must be effected to
stem the tide of both reckless and unintentional gun violence. The management
of Saf-T-Hammer is firmly committed to alleviating the suffering and improving
the quality of life of all victims of senseless firearms violence. To this
end, Saf-T-Hammer will be chartering an independent philanthropic service to
raise and administer funds for the express purpose of financing relief from and
providing answers to tragedies that result from irresponsible gun violence.
After examining the root cause, pattern of practice and most significant areas
of deficiency surrounding this problem, the Company's Board of Directors has
mandated a policy of intervention that will serve to address the blight of
senseless gun violence. The course of action selected by the Company's
directors has culminated in a resolution to support the funding of a charitable
foundation (hereinafter "Foundation for Gun Safety") that will devote its
energies and resources toward the following:
GUN SAFETY EDUCATION FUND: This area of intervention will monitor, select
and award worthy organizations and institutions striving to implement
educational programs that effectively disseminate gun safety and awareness.
OUTREACH FUND: In recognition of the social and economic climate that
pervades many of our communities, the Foundation for Gun Safety will spearhead a
movement to retro-fit guns with the Saf-T-Hammer in targeted economically
challenged areas. The Outreach Fund's express mission will be to offer this
service on a cost free, "no questions asked" basis.
VICTIM BEREAVEMENT FUND: The aftermath of gun violence leaves its mark on
all strata of the American populace and, oftentimes, it does not discriminate
between those who are financially capable of bearing the brunt of medical and
counseling expenses. To assuage this additional victimization of the families
who are related to persons targeted by senseless firearms violence, the
Foundation for Gun Safety will allocate funds and directly apply them to assist
in supporting selected families burdened by the excessive cost of medical and
counseling expenses.
To ensure the success of this charitable foundation, Saf-T-Hammer expects
to contribute the sum of one dollar ($1.00) for each dollar raised by the
foundation up to a maximum of 5% of its pre-tax profits.
7
SUMMARY OF MANUFACTURING AND SERVICE DIVISIONS
All three divisions, as represented hereinafter, serve as the
manufacturing, service and core business of the Company. The following summary
describes their function and operations in brief detail:
PRODUCTION. This division is dedicated to the research, development and
manufacturing of products and services employed in the safety product industry
at affordable prices. Saf-T-Hammer Corporation ("Saf-T-Hammer") plans to
manufacture and introduce a full line of safety products that will provide
families with simple, safe solutions to the dangers that exist in and out of the
home. At this time, Saf-T-Hammer is currently developing and testing its
Saf-T-Trigger device. The prototypes are built and stress tested to 10,000
rounds. Once the Company is satisfied that a prototype meets its rigorous
design and function requirements, the prototype is sent for bid to
manufacturers. Manufacturing specifications will be strictly adhered to, and
quality control procedures will ensure the high quality of the final product.
Invariably, there is considerable cost and time involved in research and
development prior to the actualization of a new product as it reaches the
manufacturing stage. The Saf-T-Trigger device is expected to be available to the
market by the second quarter of 2000. To mitigate the liability of developing
additional safety products, Company management believes that the impending
revenue generated from the introduction of the Saf-T-Trigger device will be
sufficient to offset the simultaneous research and development cost of its
additional product line. Management fully expects that in following such a
course of development it should afford Saf-T-Hammer a lucrative means of
generating revenue from its retail efforts while new products are developed and
submitted for industry and regulatory approval. This division will serve to
meet the Company's short-term objective of bringing in revenues to support the
R&D activities of the Company while sustaining its long-term objectives of
exponential growth. The Company believes that through this mode of production
it will find increased profitability within one year of commencement of
manufacturing operations. Saf-T-Hammer will provide its products on a retail and
wholesale basis through direct marketing and licensed distribution similar to,
and in such manner as is customarily utilized in the sale of gun parts marketing
programs. However, current plans are underway to effect an Internet "Mall"
concept for purposes of highlighting and showcasing the Company's and others'
home and family safety products.
8
MARKETING. Saf-T-Hammer Corporation will utilize traditional and
non-traditional venues to introduce and promote the Saf-T-Hammer and other
products offered by the Company. Traditional venues will include utilization of
the well-established firearms industry marketing and distribution networks to
sell its products. The Company recently negotiated placement of its products
with market reps, who carry products directly into dealership and sporting goods
stores in all 50 states. Management believes that market representatives offer
an ideal means of introducing the retail environment to a new product, because
they combine on-site, hands-on exposure to the products with education and
personal salesmanship. Saf-T-Hammer Corporation will also use traditional
venues to reach the law enforcement market. Many jurisdictions require their
officers to use a safety device for their firearms while off-duty.
Non-traditional consumer venues include exposure to the family market segment,
through traditional media venues and via partnerships with organizations
promoting safety, including law enforcement, schools, pediatricians and other
public safety officials. Extensive contacts in this arena are underway,
including efforts to coordinate with law enforcement, and other city public
safety officials nationwide. Internet exposure will be utilized to enhance
product exposure and to prime the market by raising public awareness about the
gun safety issue. A large-scale public awareness program is also underway,
which includes exposing press and public officials to the product. As the
Company prepares to place its products on the shelves, an intensive advertising
campaign will compliment the public relations efforts already underway.
E-COMMERCE VENTURES. Saf-T-Hammer Corporation is currently exploring the
development of a complimentary e-commerce element to create additional exposure
for the Company's products, and to generate an additional revenue stream through
sales of an assortment of safety products to the public over the Internet. The
Company's web site is www.saf-t-hammer.com.
9
RISK FACTORS
COMMERCIALIZATION STAGE COMPANY.
Although we were was formed in 1991, since inception we have been engaged
almost exclusively in organizational, research and development activities and
has just recently initiated product commercialization. Accordingly, as a
transitional development stage company, we have had a limited relevant operating
history upon which an evaluation of our prospects can be made. Consequently,
the likelihood of success of our business must be considered in view of all of
the risks, expenses and delays inherent in the establishment of a new business,
including, but not limited to, expenses and delays of an ongoing business that
is commenced, slower than anticipated manufacturing and marketing activities,
the uncertainty of market assimilation of our products, services and other
unforeseen factors. The likelihood of the our success must be considered in
light of the problems and expenses that are frequently encountered in connection
with the operation of a new business and the competitive environment that it
encounters.
LIMITED OPERATING HISTORY; LOSSES.
We presently have had no business operations and we have only a limited
prior operating history. Although organized and incorporated in mid 1998, we
did not commence active operations until the beginning of 1999. To date, our
operations have been narrowly confined to research and development,
infrastructure and market planning, and cultivation of its sales and marketing
network. As of December 31, 1999, there have been no revenues.
We anticipate that we will continue to incur losses and generate negative cash
flow over the next six months. At this time, we have no revenues, and
there is no assurance that we will ever have significant revenues or be
profitable or achieve positive cash flow from operations.
WE ARE PRESENTLY IN UNSOUND FINANCIAL CONDITION WHICH MAKES INVESTMENT IN
OUR SECURITIES HIGHLY RISKY. Our financial statements include an auditor's
report containing a modification regarding an uncertainty about our ability to
continue as a going concern. Our financial statements also include an
accumulated deficit of $1,437,958 as of December 31, 1999 and other indications
of weakness in our present financial position. We have been operating primarily
through the issuance of common stock for services by entities, including
affiliates, that we could not afford to pay in cash. We are consequently deemed
by state securities regulators to presently be in unsound financial condition.
No person should invest in this offering unless they can afford to lose their
entire investment.
RECENTLY REORGANIZED COMPANY.
De Oro Mines, Inc. was incorporated on June 17, 1991 in the state of
Nevada. From its inception, De Oro Mines, Inc. was in the development stage and
was primarily engaged in the business of developing mining properties. During
1992 De Oro lost its remaining assets and settled its liabilities and from that
date forward remained dormant. Effective October 20, 1998, De Oro Mines
acquired the assets of Saf-T-Hammer, Inc., and changed its name from De Oro
Mines, Inc. to Saf-T-Hammer Corporation. The principal asset of Saf-T-Hammer,
Inc. was a product in development and the patent pending rights to the product.
This potential product is a childproof gun safety device.
To date, we have had limited operating history and have not conducted any
significant business. We must therefore be considered promotional and in our
early formative and developmental stages. Potential shareholders should be
aware of the difficulties normally encountered by a new enterprise. There is
nothing at this time on which to base an assumption that our business plans will
prove successful, and there is no assurance that we will be able to operate
profitably.
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DEPENDENCE UPON KEY PERSONNEL.
Our success depends, in part, upon the successful performance of our CEO,
Mr. Mitchell A. Saltz. Although we have entered into a comprehensive employment
contract with Mr. Saltz, and we have employed and will in the future employ
additional qualified executives, employees and consultants having significant
experience delivering the business expertise needed, if Mr. Saltz fails to
perform any of the duties undertaken by him for any reason whatsoever, our
ability to manufacture, market and distribute our products would be harmed. To
mitigate this risk, we have secured and will maintain key man life insurance on
Mr. Saltz. And, pursuant to its terms, we are the designated beneficiary and
will be entitled to receive benefits totaling $500,000. Moreover, we believe
there are available qualified managerial and other personnel in sufficient
numbers to properly staff our facilities and offices, but we cannot be sure we
could do so.
REGULATION.
Our business, as well as all participants in the production and marketing
of gun parts, is subject to various laws and governmental regulations. The
manufacture and marketing of gun parts is governed by various state laws and
federal regulations and protocols. We believe we are in compliance with such
laws and that such laws do not have a material adverse impact on our operations.
Such laws, rules, regulations and protocols are subject to change. Therefore,
our approach to compliance may require modifications to adjust for future
regulatory change.
COMPETITION.
There are several manufacturing entities and service providers that
currently offer products and services similar to those which we have proposed.
These entities may have greater financial and personnel resources than we do.
Manufacture and use of gun safety devices throughout the United States is on the
increase. The gun industry, in general, is dominated by a small number of
companies that are well known to the public. We believe that as a manufacturer
of a firearm safety device line, both wholesale and retail, we should be able to
compete with the better known brands of service companies presently in
operation. Although we consider ourselves favorably positioned to compete in
this market niche, our profitability may be harmed if other competing entities
continue to operate or commence operations in our proposed regional areas.
RELIANCE ON OUTSIDE SUPPLIERS.
We purchase our die molds, raw materials and supplies from independent
sources and will for some time remain dependent upon such outside sources for
all of our unprocessed natural products. We do not know if these sources will
be able to provide adequately for our current and future needs and the needs of
our customers. In the event that any of our suppliers should suffer quality
control problems, lack of raw materials or financial difficulties, we would be
required to find alternative sources for our product lines. The time lost in
seeking and acquiring additional and newer sources could hurt our revenues and
profitability.
EFFECTS ON FLUCTUATIONS IN RAW AND PROCESSED MATERIALS, COSTS AND AVAILABILITY.
We purchase premium grade raw and processed materials for use in our
manufacturing enterprise. Such products are obtained from third party sources
and manufacturing sub-contractors. The price and availability of these materials
are subject to numerous factors not within our control including: weather
conditions, policies of foreign countries and/or trade restrictions as well as
the status of the worldwide demand for raw, organic, metal, chemical and plastic
ingredients. In the event we cannot timely acquire our raw and processed
materials from third party entities, our ability to ship products and to service
our targeted markets on a timely basis, if at all, would be harmed.
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CONFLICTS OF INTEREST. Certain conflicts of interest exist between us and
our officers and directors. They have other business interests to which they
devote attention, and they may be expected to continue to do so although
management time should be devoted to our business. As a result, conflicts of
interest may arise that can be resolved only through exercise of such judgment
as is consistent with their fiduciary duties.
POSSIBLE NEED FOR ADDITIONAL FINANCING. We have very limited funds, and
such funds may not be adequate to take advantage of any available business
opportunities. Even if our funds prove to be sufficient to acquire an interest
in, or complete a transaction with, a business opportunity, we may not have
enough capital to exploit the opportunity. Our ultimate success may depend upon
our ability to raise additional capital. We have not investigated the
availability, source, or terms that might govern the acquisition of additional
capital and will not do so until we determine a need for additional financing.
If additional capital is needed, there is no assurance that funds will be
available from any source or, if available, that they can be obtained on terms
acceptable to us. If not available, our operations will be limited to those
that can be financed with our modest capital.
REGULATION OF PENNY STOCKS. Our securities are subject to a Securities and
Exchange Commission rule that imposes special sales practice requirements upon
broker-dealers who sell such securities to persons other than established
customers or accredited investors. For purposes of the rule, the phrase
"accredited investors" means, in general terms, institutions with assets in
excess of $5,000,000, or individuals having a net worth in excess of $1,000,000
or having an annual income that exceeds $200,000 (or that, when combined with a
spouse's income, exceeds $300,000). For transactions covered by the rule, the
broker-dealer must make a special suitability determination for the purchaser
and receive the purchaser's written agreement to the transaction prior to the
sale. Consequently, the rule may affect the ability of broker-dealers to sell
our securities and also may affect the ability of shareholders to sell their
securities.
In addition, the Securities and Exchange Commission has adopted a number of
rules to regulate "penny stocks." Such rules include Rules 3a51-1, 15g-1,
15g-2, 15g-3, 15g-4, 15g-5, 15g-6, and 15g-7 under the Securities Exchange Act
of 1934, as amended. Because our securities may constitute "penny stocks"
within the meaning of the rules, the rules would apply to us and to our
securities. The rules may further affect the ability of owners of our
securities to sell our securities.
12
Shareholders should be aware that, according to Securities and Exchange
Commission Release No. 34-29093, the market for penny stocks has suffered in
recent years from patterns of fraud and abuse. Such patterns include (i)
control of the market for the security by one or a few broker-dealers that are
often related to the promoter or issuer; (ii) manipulation of prices through
prearranged matching of purchases and sales and false and misleading press
releases; (iii) "boiler room" practices involving high-pressure sales tactics
and unrealistic price projections by inexperienced sales persons; (iv) excessive
and undisclosed bid-ask differentials and markups by selling broker-dealers; and
(v) the wholesale dumping of the same securities by promoters and broker-dealers
after prices have been manipulated to a desired level, along with the resulting
inevitable collapse of those prices and with consequent investor losses. We are
aware of the abuses that have occurred historically in the penny stock market.
Although we do not expect to be in a position to dictate the behavior of the
market or of broker-dealers who participate in the market, management will
strive within the confines of practical limitations to prevent the described
patterns from being established with respect to our securities.
LIMITED PUBLIC MARKET EXISTS. There is a limited public market for our
common stock, and no assurance can be given that a market will continue or that
a shareholder ever will be able to liquidate his investment without considerable
delay, if at all. The market price for our stock may be highly volatile.
Factors such as those discussed in this "Risk Factors" section may have a
significant impact upon the market price of our securities. Owing to the low
price of the securities, many brokerage firms may not be willing to effect
transactions in the securities. Even if a purchaser finds a broker willing to
effect a transaction in these securities, the combination of brokerage
commissions, state transfer taxes, if any, and any other selling costs may
exceed the selling price. Further, many lending institutions will not permit
the use of such securities as collateral for any loans.
FORWARD-LOOKING STATEMENTS AND ASSOCIATED RISKS. Management believes that
this Prospectus on Form S-8 contains forward-looking statements, including
statements regarding, among other items, our future plans and growth strategies
and anticipated trends in the industry in which we operate. These
forward-looking statements are based largely on our control. Actual results
could differ materially from these forward-looking statements as a result of
factors we describe herein, including, among others, regulatory or economic
influences.
USE OF PROCEEDS
SAFH will not receive any of the proceeds from the sale of shares of common
stock by the Selling Shareholders.
13
SELLING SHAREHOLDERS
The Shares of the Company to which this Reoffer Prospectus relates are being
registered for reoffers and resales by the Selling Shareholders, who acquired
the Shares pursuant to a compensatory benefit plan with SAFH for consulting
services they provided to SAFH. The Selling Shareholders may resell all, a
portion or none of such Shares from time to time.
The table below sets forth with respect to the Selling Shareholders, based upon
information available to the Company as of April 5, 2000, the number of Shares
owned, the number of Shares registered by this Reoffer Prospectus and the number
and percent of outstanding Shares that will be owned after the sale of the
registered Shares assuming the sale of all of the registered Shares.
NUMBER OF % OF SHARES
SHARES NUMBER OF SHARES NUMBER OF OWNED BY
SELLING OWNED REGISTERED BY SHARES OWNED SHAREHOLDER
SHAREHOLDERS BEFORE SALE PROSPECTUS AFTER SALE AFTER SALE
- --------------------- ----------- ---------------- ------------ ------------
M. Richard Cutler (1) 206,000 108,500 97,500 1.09%
- --------------------- ----------- ---------------- ------------ ------------
Brian A. Lebrecht 65,000 35,000 30,000 0.34%
- --------------------- ----------- ---------------- ------------ ------------
Vi Bui 48,750 26,250 22,500 0.25%
- --------------------- ----------- ---------------- ------------ ------------
Asher Starik 125,000 75,000 50,000 0.56%
- --------------------- ----------- ---------------- ------------ ------------
Stephanie Crumpler 5,250 5,250 0 0.00%
- --------------------- ----------- ---------------- ------------ ------------
(1) Of such shares, 97,500 are held by MRC Legal Services LLC. M. Richard
Cutler may be deemed to be the beneficial owner of MRC Legal Services LLC.
PLAN OF DISTRIBUTION
The Selling Shareholders may sell the Shares for value from time to time under
this Reoffer Prospectus in one or more transactions on the Over-the-Counter
Bulletin Board maintained by Nasdaq, or other exchange, in a negotiated
transaction or in a combination of such methods of sale, at market prices
prevailing at the time of sale, at prices related to such prevailing market
prices or at prices otherwise negotiated. The Selling Shareholders may effect
such transactions by selling the Shares to or through brokers-dealers, and such
broker-dealers may receive compensation in the form of underwriting discounts,
concessions or commissions from the Selling Shareholders and/or the purchasers
of the Shares for whom such broker-dealers may act as agent (which compensation
may be less than or in excess of customary commissions).
14
The Selling Shareholders and any broker-dealers that participate in the
distribution of the Shares may be deemed to be "underwriters" within the meaning
of Section 2(11) of the 1933 Act, and any commissions received by them and any
profit on the resale of the Shares sold by them may be deemed be underwriting
discounts and commissions under the 1933 Act. All selling and other expenses
incurred by the Selling Shareholders will be borne by the Selling Shareholders.
In addition to any Shares sold hereunder, the Selling Shareholders may, at the
same time, sell any shares of common stock, including the Shares, owned by him
or her in compliance with all of the requirements of Rule 144, regardless of
whether such shares are covered by this Reoffer Prospectus.
There is no assurance that the Selling Shareholders will sell all or any portion
of the Shares offered.
The Company will pay all expenses in connection with this offering other than
the legal fees incurred in connection with the preparation of this registration
statement and will not receive any proceeds from sales of any Shares by the
Selling Shareholders.
LEGAL MATTERS
The validity of the Common Stock offered hereby will be passed upon for the
Company by the Cutler Law Group, Newport Beach, California.
EXPERTS
The balance sheets as of December 31, 1998 and 1999 and the statements of
operations, shareholders' equity and cash flows for the periods then ended have
been incorporated by reference in this Registration Statement in reliance on the
report of Stonefield Josephson & Co., Inc., independent accountants, given on
the authority of that firm as experts in accounting and auditing.
15
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents are hereby incorporated by reference in this
Registration Statement:
(i) Registrant's Form 8-K for an event on March 31, 2000, filed with the
Commission on April 3, 2000.
(ii) Registrant's Form 10-SB (in the name of Lost Coast Ventures, Inc., the
Company's reporting predecessor), filed with the Commission on January 19, 2000.
(iii) All other reports and documents subsequently filed by the Registrant
pursuant after the date of this Registration Statement pursuant to Sections
13(a), 13(c), 14, or 15(d) of the Securities Exchange Act of 1934 and prior to
the filing of a post-effective amendment which indicates that all securities
offered hereby have been sold or which deregisters all securities then remaining
unsold, shall be deemed to be incorporated by reference and to be a part hereof
from the date of the filing of such documents.
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Certain legal matters with respect to the Common Stock offered hereby will be
passed upon for the Company by the Cutler Law Group, counsel to the Company.
Mr. M. Richard Cutler, principal of the Cutler Law Group is the beneficial owner
of 206,000 shares of Common Stock of the Company. 108,500 shares of the
foregoing are being registered for sale herein. Other employees of the Cutler
Law Group hold an additional 119,000 shares of the Common Stock of the Company.
66,500 shares of the foregoing are being registered for sale herein.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Corporation Laws of the State of Nevada and the Company's Bylaws
provide for indemnification of the Company's Directors for liabilities and
expenses that they may incur in such capacities. In general, Directors and
Officers are indemnified with respect to actions taken in good faith in a manner
reasonably believed to be in, or not opposed to, the best interests of the
Company, and with respect to any criminal action or proceeding, actions that the
indemnitee had no reasonable cause to believe were unlawful. Furthermore, the
personal liability of the Directors is limited as provided in the Company's
Articles of Incorporation.
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ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
The Shares were issued for advisory and legal services rendered. These
sales were made in reliance of the exemption from the registration requirements
of the Securities Act of 1933, as amended, contained in Section 4(2) thereof
covering transactions not involving any public offering or not involving any
"offer" or "sale".
ITEM 8. EXHIBITS
Exhibit No. Description
*3.1 Articles of Incorporation
*3.2 Bylaws
5 Opinion of Cutler Law Group with respect to legality of the
securities of the Registrant begin registered
10.1 Consulting Agreement dated March 31, 2000.
23.1 Consent of Stonefield Josephson & Co., Inc., Certified Public
Accountants
23.3 Consent of Cutler Law Group (contained in opinion to be filed
as Exhibit 5)
_______________________
*Incorporated by reference to the Company's Form 8-K filed April 3, 2000.
ITEM 9. UNDERTAKINGS.
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement to include any material
information with respect to the plan of distribution not previously disclosed in
the Registration Statement or any material change to such information in the
Registration Statement.
(2) That, for the purpose of determining any liability under the Securities
Act of 1933, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial BONA
FIDE offering thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering.
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(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's Annual Report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial BONA FIDE offering thereof.
(c) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that is meets all of the
requirements for filing on Form S-8 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Los Angeles, State of California, on April 5, 2000.
Saf-T-Hammer Corporation
/s/ Mitchell L. Saltz
By: Mitchell L. Saltz
President and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
Chief Executive Officer and
/s/ Mitchell L. Saltz Chairman of the Board
______________________
Mitchell L. Saltz
/s/ Sherry Noreen Vice President and Director
______________________
Sherry Noreen
/s/ Theodore Saltz Secretary/Treasurer and Director
______________________
Theodore Saltz
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[LETTERHEAD OF CUTLER LAW GROUP]
April 5, 2000
Securities and Exchange Commission
Division of Corporate Finance
Washington, D.C. 20549
Re: Saf-T-Hammer Corporation
Ladies and Gentlemen:
This office represents Saf-T-Hammer Corporation, a Nevada corporation (the
"Registrant") in connection with the Registrant's Registration Statement on Form
S-8 under the Securities Act of 1933 (the "Registration Statement"), which
relates to the resale of up to 250,000 shares by certain selling shareholders in
accordance with a Consulting Agreement between the Registrant and the selling
shareholders (the "Registered Securities"). In connection with our
representation, we have examined such documents and undertaken such further
inquiry as we consider necessary for rendering the opinion hereinafter set
forth.
Based upon the foregoing, it is our opinion that the Registered Securities,
when issued as set forth in the Registration Statement, will be legally issued,
fully paid and nonassessable.
We acknowledge that we are referred to under the heading "Legal Matters" in
the Resale Prospectus which is a part of the Registrant's Form S-8 Registration
Statement relating to the Registered Securities, and we hereby consent to such
use of our name in such Registration Statement and to the filing of this opinion
as Exhibit 5 to the Registration Statement and with such state regulatory
agencies in such states as may require such filing in connection with the
registration of the Registered Securities for offer and sale in such states.
Very truly yours,
/s/ Cutler Law Group
CUTLER LAW GROUP
CONSULTING AGREEMENT
CONSULTING AGREEMENT dated as of March 31, 2000 between SAF-T-HAMMER, INC.,
a Nevada corporation, ("SAFH"), on the one hand, and M. RICHARD CUTLER
("Cutler"), BRIAN A. LEBRECHT ("Lebrecht"), VI BUI ("Bui"), ASHER STARIK
("Starik"), STEPHANIE CRUMPLER ("Crumpler", and, together with Cutler, Lebrecht,
Bui and Starik, the "Consultants"), on the other hand.
WHEREAS:
A. Consultants have agreed to render consulting services with regard to
the negotiation and completion of a stock exchange between SAFH and the majority
shareholder of Lost Coast, Inc., a Delaware corporation (the "Lost Coast
Shareholder").
B. In the event SAFH is able to complete the Stock Exchange with the
Lost Coast Shareholder, SAFH wishes to compensate Consultants for their
consulting services.
NOW THEREFORE, it is agreed:
1. Stock Compensation. SAFH shall pay and cause to be issued to the
Consultants a consulting fee of $100,000 cash, plus 250,000 shares of common
stock of SAFH (the "Shares") immediately upon the execution of a stock exchange
agreement with the Lost Coast Shareholder. Such shares shall be subject to
registration by SAFH on Form S-8 within 5 days of SAFH closing on the stock
exchange agreement with the Lost Coast Shareholder. The Consultants agree to
prepare and file the S-8 Registration Statement at their sole expense, except
for the filing fee associated therewith, which shall be reimbursed by SAFH. The
parties agree that the value of the Shares is equal to 50% of the closing bid
price on the date of this Agreement. The Shares shall be issued as follows:
108,500 to Cutler, 35,000 to Lebrecht, 26,250 to Bui, 75,000 to Starik and 5,250
to Crumpler.
2. Miscellaneous. This Agreement (i) shall be governed by the laws of
the State of California; (ii) may be executed in counterparts each of which
shall constitute an original; (iii) shall be binding upon the successors,
representatives, agents, officers and directors of the parties; and (iv) may not
be modified or changed except in a writing signed by all parties.
This Consulting Agreement has been executed as of the date first above
written.
SAF-T-HAMMER, INC.
/s/ Mitchell A. Saltz
____________________________________________________
By: Mitchell A. Saltz, President and Chief Executive Officer
CONSULTANTS
/s/ M. Richard Cutler
____________________________________________________
M. Richard Cutler
/s/ Brian A. Lebrecht
____________________________________________________
Brian A. Lebrecht
/s/ Vi Bui
____________________________________________________
Vi Bui
/s/ Asher Starik
____________________________________________________
Asher Starik
/s/ Stephanie Crumpler
____________________________________________________
Stephanie Crumpler
COSENT OF INDEPENDENT AUDITORS
To The Board of Directors of Saf-T-Hammer Corporation:
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-8 of our report dated March 31, 2000 relating to
the financial statements of Saf-T-Hammer Corporation.
/s/ Stonefield Josephson, Inc.
Stonefield Josephson, Inc.
Certified Public Accountant
Santa Monica, California
April 5, 2000