UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-QSB
[X] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934
For the quarterly period ended August 31, 2008
or
[ ] Transition Report Pursuant to Section 13 or 15 (d) of the Securities
Exchange Act of 1934
Commission file No. 0-33259
SECURITY DEVICES INTERNATIONAL INC.
---------------------------------------
(Exact name of registrant as specified in its charter)
Delaware Applied For
- ---------------------------- --------------------------------
(State of incorporation) (I.R.S. Employer Identification Number)
2171 Avenue Rd.
Suite 103
Toronto, Ontario
Canada M5M 4B4
--------------------------------
(Address of Principal Executive Office) Zip Code
(647) 388-1117
------------------------------------------------------
(Registrant's telephone number, including area code)
Check whether the issuer: (1) filed all reports required to be filed by Section
13 or 15 (d) of the Securities Exchange Act of 1934 during the proceeding 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 is a shell company (as defined in
Rule 12b-2 of the Exchange Act):
YES [ ] NO [X]
As of September 30, 2008, the Company had 14,330,050 issued and outstanding
shares of common stock.
SECURITY DEVICES INTERNATIONAL, INC.
(A Development Stage Enterprise)
INTERIM FINANCIAL STATEMENTS
AUGUST 31, 2008
(Amounts expressed in US Dollars)
(Unaudited-Prepared by Management)
SECURITY DEVICES INTERNATIONAL, INC.
(A Development Stage Enterprise)
INTERIM FINANCIAL STATEMENTS
AUGUST 31, 2008
(Amounts expressed in US Dollars)
(Unaudited-Prepared by Management)
TABLE OF CONTENTS
Page No
Balance Sheets as at August 31, 2008 (unaudited)
and November 30, 2007 (audited) 1
Interim Statement of Operations for the nine months
and three months ended August 31, 2008 and August 31,
2007 and the period from Inception (March 1, 2005) to
August 31, 2008 2
Interim Statement of Cash Flows for the nine months ended
August 31, 2008 and August 31, 2007 3
Interim Statements of Changes in Stockholders' Equity for
the nine months ended August 31, 2008 and for the period
from inception (March 1, 2005) to November 30, 2007 4
Condensed Notes to Unaudited Interim Financial Statements 5-12
4
SECURITY DEVICES INTERNATIONAL, INC.
(A Development Stage Enterprise)
Interim Balance Sheets
As at August 31, 2008 and November 30, 2007
(Amounts expressed in US Dollars)
August 31, 2008 November 30, 2007
(unaudited) (audited)
ASSETS
CURRENT
Cash and cash equivalents $ 2,982,487 $ 5,293,176
Prepaid expenses and other 24,726 36,788
----------- -----------
Total Current Assets 3,007,213 5,329,964
Plant and Equipment, net (Note 4) 26,095 23,960
----------- -----------
TOTAL ASSETS $3,033,308 $ 5,353,924
----------- -----------
LIABILITIES
CURRENT LIABILITIES
Accounts payable and accrued liabilities $ 293,119 $ 174,842
----------- -----------
Total Current Liabilities $ 293,119 $ 174,842
----------- -----------
Related Party Transactions (note 7)
Commitments (note 8)
STOCKHOLDERS' EQUITY
Capital Stock (Note 5) 14,330 14,330
Additional Paid-In Capital 13,073,243 11,842,187
Deficit Accumulated During the
Development Stage (10,347,384) (6,677,435)
----------- -----------
Total Stockholders' Equity 2,740,189 5,179,082
----------- -----------
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $ 3,033,308 $ 5,353,924
============= ============
The accompanying condensed notes are an integral part of these unaudited interim
financial statements.
1
SECURITY DEVICES INTERNATIONAL, INC.
(A Development Stage Enterprise)
Statements of Operations
For the Nine Months and Three Months Ended August 31, 2008 and August 31, 2007
and the Period from inception (March 1, 2005) to August 31, 2008 (Amounts
expressed in US Dollars) (Unaudited- Prepared by Management)
For the For the For the For the
nine months nine months three months three months
Cumulative ended ended ended ended
Since Aug 31, Aug 31, Aug 31, Aug 31,
inception 2008 2007 2008 2007
$ $ $ $ $
OPERATING EXPENSES:
Research and Product
Development Cost 3,956,430 2,073,935 975,321 782,861 342,744
Amortization 8,825 6,228 1,553 2,285 794
General and administration
(note 6) 6,632,930 1,649,457 1,534,618 127,767 236,674
----------- ---------- ---------- --------- --------
TOTAL OPERATING EXPENSES 10,598,185 3,729,620 2,511,492 912,913 580,212
----------- ---------- ---------- --------- --------
LOSS FROM OPERATIONS (10,598,185) (3,729,620) (2,511,492) (912,913) (580,212)
Other Income-Interest 250,801 59,671 136,936 17,469 74,270
----------- ---------- ---------- --------- --------
LOSS BEFORE INCOME TAXES (10,347,384) (3,669,949) (2,374,556) (895,444) (505,942)
Income taxes - - - - -
----------- ---------- ---------- --------- --------
NET LOSS (10,347,384) (3,669,949) (2,374,556) (895,444) (505,942)
----------- ---------- ---------- --------- --------
Loss per share - basic
and diluted (0.26) (0.17) (0.06) (0.04)
Weighted average common
shares outstanding 14,330,050 13,644,366 14,330,050 14,330,050
---------- ---------- --------- --------
The accompanying condensed notes are an integral part of these unaudited interim
financial statements.
2
SECURITY DEVICES INTERNATIONAL, INC.
(A Development Stage Enterprise)
Interim Statement of Cash Flows
For the Nine Months Ended August 31, 2008 and August 31, 2007 and the Period
from inception (March 1, 2005) to August 31, 2008 (Amounts expressed in US
Dollars) (Unaudited - Prepared by Management)
For the For the
nine months nine months
ended ended
Cumulative Aug 31, Aug 31,
since inception 2008 2007
$ $ $
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss for the period (10,347,384) (3,669,949) (2,374,556)
Items not requiring an outlay of cash:
Issue of shares for professional
services 154,000 - 80,000
Stock based compensation 4,727,429 1,231,056 905,284
Compensation expense for warrants
issued 357,094 - -
Loss on cancellation of stock 34,400 - 34,400
Amortization 8,825 6,228 1,553
Changes in non-cash working capital:
Accounts payable and accrued
liabilities 293,119 118,277 50,117
Prepaid expenses and other (24,726) 12,062 (31,058)
----------- --------- ---------
NET CASH USED IN OPERATING ACTIVITIES (4,797,243) (2,302,326) (1,334,260)
----------- --------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of Plant and Equipment (34,920) (8,363) (11,694)
----------- --------- ---------
NET CASH USED IN INVESTING ACTIVITIES (34,920) (8,363) (11,694)
----------- --------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES
Repayments from directors/shareholders - - (2,577)
Net Proceeds from issuance of common
shares 7,769,650 - 5,779,045
Cancellation of common stock (50,000) - (50,000)
Exercise of stock options 95,000 - -
----------- --------- ---------
NET CASH PROVIDED BY FINANCING
ACTIVITIES 7,814,650 - 5,726,468
----------- --------- ---------
NET INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS FOR THE PERIOD 2,982,487 (2,310,689) 4,380,514
Cash and cash equivalents,
beginning of period - 5,293,176 1,463,833
----------- --------- ---------
CASH AND CASH EQUIVALENTS,
END OF PERIOD 2,982,487 2,982,487 5,844,347
=========== ========== ==========
INCOME TAXES PAID - - -
=========== ========== ==========
INTEREST PAID - - -
=========== ========== ==========
The accompanying condensed notes are an integral part of these unaudited interim
financial statements
3
SECURITY DEVICES INTERNATIONAL, INC.
(A Development Stage Enterprise)
Interim Statement of Changes in Stockholders' Equity
Nine months ended August 31, 2008 and for
Period from Inception (March 1, 2005) to November 30, 2007.
(Amounts expressed in US Dollars)
Number of Common Additional
Common Shares Paid-in Deficit
Shares amount Capital accumulated Total
$ $ $ $
Balance as of March 1, 2005 - - - - -
Issuance of Common shares
for professional services 6,525,000 6,525 58,725 - 65,250
Issuance of common shares
for cash 397,880 398 99,072 99,470
Net loss for the period - - - (188,699) (188,699)
---------- ------- -------- --------- --------
Balance as of November 30,
2005 (audited) 6,922,880 6,923 157,797 (188,699) (23,979)
Issuance of common shares
for cash 956,000 956 94,644 - 95,600
Issuance of common shares
for cash 286,000 286 49,764 - 50,050
Issuance of common shares to
consultant for services 50,000 50 8,700 - 8,750
Issuance of common shares
for cash 2,000,000 2,000 398,000 - 400,000
Exercise of stock options 950,000 950 94,050 - 95,000
Issuance of common shares
for cash (net of agent
commission) 200,000 200 179,785 - 179,985
Stock subscriptions received 1,165,500 - 1,165,500
Stock based compensation - - 1,049,940 - 1,049,940
Net loss for the year - - - (1,660,799) (1,660,799)
---------- ------- -------- --------- --------
Balance as of November 30, 2006
(audited) 11,364,880 11,365 3,198,180 (1,849,498) 1,360,047
Issuance of common shares
for stock subscriptions
received in prior year 1,165,500 1,165 (1,165) - -
Issuance of common shares
for cash 1,170,670 1,171 1,169,499 1,170,670
Issuance of common shares
for cash and services 50,000 50 154,950 155,000
Issuance of common shares
for cash (net of expenses) 2,139,000 2,139 4,531,236 4,533,375
Cancellation of stock (1,560,000) (1,560) (14,040) (15,600)
Stock based compensation 2,446,433 2,446,433
Issue of warrants 357,094 357,094
Net loss for the year ended
November 30, 2007 - - - (4,827,937) (4,827,937)
---------- ------- -------- --------- --------
Balance as of November 30,
2007 (audited) 14,330,050 14,330 11,842,187 (6,677,435) 5,179,082
Stock based compensation - - 1,231,056 - 1,231,056
Net loss for the period - - - (3,669,949) (3,669,949)
---------- ------- ---------- ---------- ----------
Balance as of Aug 31, 2008
(unaudited) 14,330,050 14,330 13,073,243 (10,347,384) 2,740,189
---------- ------- ---------- ---------- ----------
The accompanying notes are an integral part of these unaudited interim financial
statements.
4
SECURITY DEVICES INTERNATIONAL, INC.
(A Development Stage Enterprise)
Condensed Notes to Interim Financial Statements
August 31, 2008
(Amounts expressed in US Dollars)
(Unaudited-Prepared by Management)
1. BASIS OF PRESENTATION
The accompanying unaudited financial statements do not include all the
information and footnotes required by generally accepted accounting
principles for complete financial statements. In the opinion of
management, all adjustments (consisting of all recurring accruals)
considered necessary for fair presentation have been included. Operating
results for the interim period are not necessarily indicative of the
results that may be expected for the year ended November 30, 2008.
Interim financial statements should be read in conjunction with the
Company's annual audited financial statements for the year ended
November 30, 2007.
The Company was incorporated under the laws of the state of Delaware on
March 1, 2005.
2. NATURE OF OPERATIONS
The Company is currently in the advanced stages of developing LEKTROX, a
unique line of wireless electric ammunition for use in military,
homeland security, law enforcement, and professional and home security
scenarios. LEKTROX has been specially designed for use with standards
issue riot guns, M203 grenade launchers and regular 12-guage shotguns.
This will allow military, law enforcement agencies etc. to quickly
deploy LEKTROX without the need for lengthy, complex training methods or
significant functional adjustments to vehicles or personal equipment.
Simplicity of use is also a key benefit for the home security market
where most users have little or no specialized training. LEKTROX is a
3rd generation electric solution. First generation solutions were
electric batons and hand-held stun guns which had a range of arm's
length. 2nd generations were the wired electric charge solutions. 3rd
generations are the wireless electric bullets. Currently, there is still
no 3rd generation wireless electric bullet on the market.
The Company is in the development stage and has not yet realized
revenues from its planned operations. The Company has incurred a loss of
$3,669,949 during the nine month period ended August 31, 2008. At August
31, 2008, the Company had an accumulated deficit during the development
stage of $10,347,384 which includes a non- cash stock based compensation
expense of $4,727,429 and non-cash compensation expense on issue of
warrants for $357,094. The Company has funded operations through the
issuance of capital stock. During the year ended November 30, 2007 the
Company raised $5,779,045 (net of expenses of $279,375) through issue of
common stock.
5
2. NATURE OF OPERATIONS (cont'd)
The Company has a working capital of $2,714,094 and stockholders' equity
of $2,740,189 as at August 31, 2008. Management's plan is to continue
raising additional funds through future equity or debt financing until
it achieves profitable operations.
3. RESEARCH AND PRODUCT DEVELOPMENT
Research and Product Development costs, other than capital expenditures
but including acquired research and product development costs, are
charged against income in the period incurred.
4. PLANT AND EQUIPMENT, NET
Plant and equipment are recorded at cost less accumulated depreciation.
Depreciation is provided commencing in the month following acquisition
using the following annual rate and method:
Computer equipment 30% declining balance method
Furniture and Fixtures 30% declining balance method
Aug 31, 2008 Nov 30, 2007
Accumulated Accumulated
Cost Amortization Cost Amortization
Computer equipment $ 21,180 $ 6,708 $ 18,387 $ 2,597
Furniture and fixtures 13,740 2,117 8,170 -
-------- -------- -------- ---------
34,920 8,825 26,557 2,597
-------- -------- -------- ---------
Net carrying amount $ 26,095 $ 23,960
-------- --------
6
5. ISSUANCE OF CAPITAL STOCK
Year ended November 30, 2007
On December 12, 2006 the Company completed the sale of 2,536,170 shares
of its common stock to a group of private investors. The shares were
sold in the private offering at a price of $1.00 per share and are
restricted securities as that term is defined in Rule 144 of the
Securities and Exchange Commission.
The Company had already issued 200,000 common shares on November 29,
2006 and it issued the balance 2,336,170 shares on December 12, 2006.
The Company relied upon the exemption provided by Section 4(2) of the
Securities Act of 1933 for the sale of these shares.
On March 12, 2007, the Company authorized the issuance of 50,000 common
shares at $1.50 per share for a total cash consideration of $75,000 to a
consultant who rendered investor relation services to the Company during
the quarter ended May 31, 2007.
The market price of the total stock on the date of issuance was
$155,000. The difference of $80,000 between the market price of the
total stock ($155,000) and the issued price ($75,000) represents the
estimated fair value of the consultant's services. The par value of the
shares in the amount of $50 was credited to share capital and the
balance of $154,950 credited to additional paid-in capital and shown as
issuance of common shares for cash and services in the statement of
changes in stockholder's equity.
The Company had entered into an amended agreement in February 2007, with
a director regarding development of its "Electrical Shocker" ("ES")
technology. Pursuant to the original agreement executed in November
2006, the director was paid a total of $38,000 which included $22,000
during the last quarter of 2006 and an additional $16,000 in January
2007. The Company has expensed this payment of $22,000 as Research and
Product Development during 2006 and also expensed the balance $16,000 to
Research and Product Development in the first quarter of 2007. In
addition, the director was paid $62,000 in February, 2007 upon signing
the amended agreement. The Company expensed this payment of $62,000 to
Research and Product Development in the first quarter of 2007. The
director in return had released the Company from a prior obligation to
pay royalty from the sale of any product developed using this
technology. In the absence of acceptance of the ES technology by the
Company, the Company cancelled 1,560,000 shares and the director was
paid $50,000 on March 12, 2007 in accordance with the amended agreement.
The Company accounted for this transaction under the constructive
retirement method in the second quarter of 2007. The cancelled shares
reverted to authorized but unissued status.
7
5. ISSUANCE OF CAPITAL STOCK (Cont'd)
The stock and additional paid-in-capital amounts were reduced with a
total of $15,600 and the Company recognized a loss of $34,400, being the
excess of purchase cost over the original issuance.
On April 25, 2007 the Company sold 1,998,500 shares of its common stock
to a group of private investors. As part of this same financing the
Company sold an additional 140,500 shares to private investors on May 4,
2007. The shares were sold at a price of $2.25 per share and are
restricted securities as that term is defined in Rule 144 of the
Securities and Exchange Commission. In connection with the sale of these
2,139,000 shares, the Company paid a commission of $240,638 to the sales
agent for the offering and incurred legal and other expenditure of
$38,737.
The sales agent also received 106,950 warrants which allow them to
purchase 106,950 shares of the Company's Common stock at a price of
$2.81 per share. The warrants expire in 2009.
The Company agreed to file a registration statement with the Securities
and Exchange Commission registering the resale of the shares sold to the
investors, as well as the shares issuable upon the exercise of the
warrants issued to the sales agent. The registration statement was
declared effective on September 20, 2007.
The Company relied upon the exemption provided by Section 4(2) of the
Securities Act of 1933 for the sale of these securities.
Nine months ended August 31, 2008
---------------------------------
The Company did not raise any capital during the nine month period ended
August 31, 2008.
6. STOCK BASED COMPENSATION
Per SEC Staff Accounting Bulletin 107, Topic 14.F, "Classification of
Compensation Expense Associated with Share-Based Payment Arrangements"
stock based compensation expense is being presented in the same lines
as cash compensation paid and accordingly expensed to general and
administration expense.
8
6. STOCK BASED COMPENSATION (Cont'd)
The Company has amended its Non-Qualified Stock Option Plan to increase
the number of Common Shares available under this plan to 5,000,000 and
filed an S-8 registration statement on June 24, 2008.
During the nine month period ended August 31, 2008, the following stock
options were granted: Effective January 24, 2008 the board of directors
granted the following options under its Non-Qualified Stock Option
Plan:
1. Options to one director to acquire 108,000 common shares. The
exercise price was set at $0.10 per share.
2. Options to one director to acquire 117,000 common shares. The
exercise price was set at $0.10 per share.
All of the above options vest immediately and have an expiry date of
January 24, 2013. Stock based compensation cost of $324,891 has been
expensed to general and administration expense.
Effective April 11, 2008 the board of directors granted the following
options under its Non-Qualified Stock Option Plan:
1. Options to two consultants to each acquire 300,000 common shares
for a total of 600,000 common shares. The exercise price was set
at $1.50 per share.
2. Options to one consultant to acquire 150,000 common shares. The
exercise price was set at $1.50 per share
All of the above options vest immediately and have an expiry date of
April 11, 2013. Stock based compensation cost of $850,067 has been
expensed to general and administration expense.
Effective May 21, 2008, the board of directors granted options to an
Investor Relation consultant to acquire 50,000 common shares at an
exercise price of $2.25 per share. All of these options vested
immediately and have an expiry of May 21, 2010. Stock based compensation
cost of $56,098 has been expensed to general and administration expense.
The fair value of each grant was estimated at the grant date using the
Black-Scholes option-pricing model. The Black-Scholes option pricing
model requires the use of certain assumptions, including expected terms,
9
6. STOCK BASED COMPENSATION (Cont'd)
expected volatility, expected dividends and risk-free interest rate to
calculate the fair value of stock-based payment awards.
The expected term calculation is based upon the expected term the option
is to be held, which is the full term of the option. The risk-free
interest rate is based upon the U.S. Treasury yield in effect at the
time of grant for an instrument with a maturity that is commensurate
with the expected term of the stock options. The dividend yield of zero
is based on the fact that we have never paid cash dividends on our
common stock and we have no present intention to pay cash dividends. The
expected forfeiture rate of 0% is based on immediate vesting of options.
Date of grant January 24, April 11, May 21,
2008 2008 2008 Total
------------ -------- ------- -----
Risk free rate 5% 5% 5%
Volatility factor 101.27% 97.80% 100.15%
Expected dividends 0% 0% 0%
Forfeiture rate 0% 0% 0%
Expected life 5 years 5 years 2 years
Exercise price $ 0.10 $ 1.50 $ 2.25
Total number of options granted 225,000 750,000 50,000 1,025,000
Grant date fair value of options $ 1.44 $ 1.13 $ 1.12
Market price of Company's common
stock on date of grant $ 1.50 $ 1.50 $ 2.12
Stock-based compensation cost
expensed during the nine month
period ended Aug 31, 2008 $324,891 $850,067 $56,098 $1,231,056
Unexpended Stock-based
compensation cost deferred
over the vesting period $ nil $ nil $ nil $ nil
As of August 31, 2008 there was $Nil of unrecognized expense related to
non-vested stock-based compensation arrangements granted.
10
7. RELATED PARTY TRANSACTIONS
a) A Company Director has charged the Company a total amount of $4,500
for providing office space during the nine month period ended August
31, 2008.
b) The following transactions are in the normal course of operations
and are measured at the exchange amount, which is the amount of
consideration established and agreed to by the related parties.
During the nine month period ended August 31, 2008, no director was paid
any compensation in cash. All out of pocket expenses of directors were
expensed. The Directors were compensated for their services by issue of
Stock Options (Refer to note 6).
Effective January 24, 2008 the board of directors granted the following
options under its Non-Qualified Stock Option Plan:
1. Options to one director to acquire 108,000 common shares. The
exercise price was set at $0.10 per share.
2. Options to one director to acquire 117,000 common shares. The
exercise price was set at $0.10 per share.
All of the above options vest immediately and have an expiry date of
January 24, 2013. Stock based compensation cost of $324,891 has been
expensed to general and administration expense.
8. COMMITMENTS
Effective October 25, 2007 the Company entered into a contract with a
consultant for a period of one year which can be terminated by 30 days
written notice to either party. The consultant is to provide investor
relation services. The company granted 150,000 options to purchase
restricted common shares, exercisable at a price of $1.20 per share and
expires on January 31, 2010. These options vested immediately and the
Company expensed $104,874 to general and administration during the year
ended November 30, 2007. The contract with the consultant was
subsequently amended on April 10, 2008 whereby these options were
reduced to 120,000 options exercisable at $1.20 per share and expire
January 31, 2010 and the contract expiry date was amended to expire June
30, 2008. The Company and the consultant agreed that no further options
would be issued by the Company. The contract expired June 30, 2008.
11
8. COMMITMENTS (Cont'd)
Effective April 14, 2008 the Company entered into a contract with a
consultant for a period of six months which can be terminated by 30 days
written notice to either party. The consultant is to provide investor
relation services. The Company will pay the consultant $2,000 per month.
The Company will also grant 100,000 options to purchase common shares,
exercisable at a price of $1.41 per share and expire April 14, 2009 only
after the Company agrees that the consultant has satisfied all duties.
Effective June 19, 2008 the Company advised the consultant that the
contract was terminated due to non performance. No options were issued
to the consultant.
12
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND PLAN OF OPERATIONS
Securities Devices International, Inc. was incorporated on March 1, 2005
and as of August 31, 2008 has not yet generated any revenue. SDI is a defense
technology company which is developing LEKTROX, a unique line of wireless
electric ammunition for use in military, homeland security, law enforcement, and
professional and home security situations.
During the nine months ended August 31, 2007 substantial all of SDI's cash
expenses were related to the development of its LEKTROX technology.
During the nine months ended August 31, 2008:
o general and administrative expenses increased primarily due to
increased activity as well as the result of expenses (which did
not require the use of cash) associated with the issuance of
options and warrants.
o more capital was available to SDI and as a result SDI was able to
spend more on research and product development;
During the period from inception (March 1, 2005) through August 31, 2008
SDI's operations used ($4,797,243) in cash. During this period SDI:
o purchased $34,920 of equipment,
o raised $7,769,650 from the sale of shares of its common stock,
o raised $95,000 from three of its officers and directors upon the
exercise of options to purchase 950,000 shares of common stock.
SDI did not have any material future contractual obligations or off
balance sheet arrangements as of August 31, 2008.
As of August 31, 2008 SDI had:
o completed the tooling and moulds for the 40MM LEKTROX
o developed a fully operational Long Range LEKTROX prototype
(37-38MM)
o developed a fully operational Long Range LEKTROX prototype (40MM)
SDI's plan of operation during the twelve-month-period ending August 31,
2009 is as follows:
Projected
Activity Completion Date
Completion of tooling and moulds for 37-38MM LEKTROX 2009
SDI anticipates that its capital requirements for the twelve-month period
ending August 31, 2009 will be:
Research and Development $ 2,100,000
General and administrative expenses 250,000
--------------
Total $ 2,350,000
============
SDI does not anticipate that it will need to hire any employees prior to
November 30, 2008. SDI does not expect that it will need to raise additional
capital prior to May 31, 2009. SDI believes that its cash on hand will satisfy
its working capital needs until sale of its products have commenced.
SDI does not have any commitments or arrangements from any persons to
provide SDI with any additional capital it may need.
Item 3A(T). - Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Sheldon Kales, SDI's Chief Executive Officer and Rakesh Malhotra, the
SDI's Principal Financial Officer, have evaluated the effectiveness of SDI's
disclosure controls and procedures as of August 31, 2008, and in their opinion
SDI's disclosure controls and procedures are effective and ensure that material
information relating to SDI is made known to them by others within those
entities, particularly during the period in which this report is being prepared,
so as to allow timely decisions regarding required disclosure. SDI has
determined that these controls and procedures are effective as of August 31,
2008.
Changes in Internal Control over Financial Reporting
To the knowledge of Mr. Kales and Mr. Malhotra, there have been no
significant changes in SDI's internal controls or in other factors that could
significantly affect SDI's internal controls subsequent to the date of
evaluation.
PART II
ITEM 6. EXHIBITS
The following exhibits are filed with this report:
Number Description
31 Rule 13a-14(a)/15d-14(a) certifications
32 Section 1350 certifications
SIGNATURES
Pursuant to the requirements of Section 12 of the Securities Exchange Act
of 1934, the registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.
SECURITY DEVICES INTERNATIONAL INC.
October 9, 2008 By /s/ Sheldon Kales
------------------------------------
Sheldon Kales, President
October 9, 2008 By /s/ Rakesh Malhotra
------------------------------------
Rakesh Malhotra, Principal Accounting
and Financial Officer