Delaware | 3841 | 20-3369218 | ||
(State or Other Jurisdiction of Incorporation or Organization) | (Primary Standard Industrial Classification Code Number) | (I.R.S. Employer Identification No.) |
Large acceleratedAccelerated fileroNon-accelerated filero (Do not check if a smaller reporting company) Title of Class of Securities to be Registered Amount to be Registered(1) Proposed
Maximum
Offering Price Per Unit(2) Proposed
Maximum Aggregate
Offering Price Amount of
Registration
FeeCommon stock, par value $0.001 5,894,317 $ .19 $ 1,119,920.23 $ 44.02 Common stock, par value $0.001 underlying Convertible Securities 5,645,210 $ .19 $ 1,072,589.90 $ 42.16 Total 11,539,527 $ .19 $ 2,195,510.13 $ 86.17
Title of Class of Securities to be Registered | Amount to be Registered(1) | Proposed Maximum Offering Price Per Unit(2) | Proposed Maximum Aggregate Offering Price | Amount of Registration Fee | |||||||||
Common stock, par value $0.001 | 5,918,005 | $ | .19 | $ | 1,124,421 | $ | 44.19 | ||||||
Common stock, par value $0.001 underlying Convertible Securities | 5,645,210 | $ | .19 | $ | 1,072,589.90 | $ | 42.16 | ||||||
Total | 11,563,215 | $ | .19 | $ | 2,197,010.8 | $ | 86.35 |
(1) | All shares registered pursuant to this registration statement are to be offered by the selling stockholders. Pursuant to Rule 416, this registration statement also covers such number of additional shares of common stock to prevent dilution resulting from stock splits, stock dividends and similar transactions. |
(2) | Based on the last sales price in $.19 per share of common stock. The offering price has been estimated solely for the purpose of computing the amount of the registration fee in accordance with Rule 457(e). Our common stock is not traded on any national exchange and in accordance with Rule 457; the offering price was determined by the price the shares were sold to our shareholders in a private placement memorandum on February 20, 2008. The price of $.19 is a fixed price at which the selling security holders may sell their shares until our common stock is quoted on the OTC Bulletin Board at which time the shares may be sold at prevailing market prices or privately negotiated prices. There can be no assurance that a market maker will agree to file the necessary documents with the National Association of Securities Dealers, which operates the OTC Electronic Bulletin Board, nor can there be any assurance that such an application for quotation will be approved. |
PRELIMINARY PROSPECTUS | ||
SUBJECT TO COMPLETION, DATED |
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This prospectus contains some forward-looking statements. Forward-looking statements give our current expectations or forecasts of future events. You can identify these statements by the fact that they do not relate strictly to historical or current facts. Forward-looking statements involve risks and uncertainties. Forward-looking statements include statements regarding, among other things, (a) our projected sales, profitability, and cash flows, (b) our growth strategies, (c) anticipated trends in our industries, (d) our future financing plans and (e) our anticipated needs for working capital. They are generally identifiable by use of the words “may,” “will,” “should,” “anticipate,” “estimate,” “plans,” “potential,” “projects,” “continuing,” “ongoing,” “expects,” “management believes,” “we believe,” “we intend” or the negative of these words or other variations on these words or comparable terminology. These statements may be found under “Management's Discussion and Analysis of Financial Condition and Results of Operations” and “Business,” as well as in this prospectus generally. In particular, these include statements relating to future actions, prospective products or product approvals, future performance or results of current and anticipated products, sales efforts, expenses, the outcome of contingencies such as legal proceedings, and financial results.
Any or all of our forward-looking statements in this report may turn out to be inaccurate. They can be affected by inaccurate assumptions we might make or by known or unknown risks or uncertainties. Consequently, no forward-looking statement can be guaranteed. Actual future results may vary materially as a result of various factors, including, without limitation, the risks outlined under “Risk Factors” and matters described in this prospectus generally. In light of these risks and uncertainties, there can be no assurance that the forward-looking statements contained in this filing will in fact occur. You should not place undue reliance on these forward-looking statements.
The forward-looking statements speak only as of the date on which they are made, and, except to the extent required by federal securities laws, we undertake no obligation to publicly update any forward-looking statements, whether as the result of new information, future events, or otherwise.
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Like the Brain Access System, this product is designed to assist the surgeon in cervical surgeries, allowing the surgeon to gain access to the anterior cervical surgery site.
Common stock outstanding prior to offering | 22,382,879 |
Common stock offered by Company |
0 |
Total shares of common stock offered by selling stockholders |
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Common stock to be outstanding after the offering (assuming all the Convertible Securities have been either exercised or converted) | 28,028,089 |
Use of proceeds of sale |
We will not receive any of the proceeds of sale of the shares of common stock by the selling | ||
Risk Factors |
See “Risk Factors” beginning on page 4 and other information included in this prospectus for a discussion of factors you should consider before deciding to invest in shares of our common stock. |
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stockholders, the respective purchase prices and public offering
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To minimize these risks, we have asked our patent counsel, Hunton & Williams, to provide us with a “freedom to operate” and patent opinion and we are considering obtaining patent insurance. A “freedom to
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operate opinion,” was based upon an investigation into the area of our proposed products. The investigation would attempt to identify ahead of time patents in the area of our proposed products in order to verify that there are no patents in the area very similar to our proposed patent application. However, the freedom to operate plan and the opinion letter can never guarantee that a business entity has a clear path to market its products. It is necessarily limited by the effectiveness of the product clearance search, and the conclusions of the opinion letter are likely to reflect this lack of complete certainty. Patent insurance may either protect a patent holder against loss due to the infringement of a patent held by the patent holder or protect the insured against infringement claims brought by a patent holder. We have not tried to obtain patent insurance and do not know whether it will be available to us and if so whether it will be available at an affordable price.
If we do not reach an agreement30 day payment basis with Lacey or ifwith respect to further work. The Company expects to repay the current payable balance in full by July 1, 2008. There is no interest charge to us on account of this payable.
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disrupted and our financial condition and results of operations may be materially and adversely affected. Competition for senior management and personnel is intense, the pool of qualified candidates in the medical device field is very limited, and we may not be able to retain the services of our senior executives or senior personnel, or attract and retain high-quality senior executives or senior personnel in the future. This failure could materially and adversely affect our future growth and financial condition.
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the existence of convertible securities to purchase shares of common stock at prices that may be below the then current market price of the common stock, could adversely affect the market price of our common stock and could impair our ability to raise capital through the sale of our equity securities.
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As of December 31, 2007 | As of December 31, 2006 | ||||||
Balance Sheet Data: | |||||||
Assets | $ | 47,077 | $ | 141,614 | |||
Liabilities | $ | 740,758 | $ | 468,217 | |||
Total Stockholders’ Deficiency | ($693,681 | ) | $ | (326,603 | ) | ||
Statement of Operations Data: | |||||||
Revenue | $ | 2,565 | $ | — | |||
Operating Expenses | $ | 492,852 | $ | 602,816 | |||
Net Loss | ($490,287 | ) | ($602,816 | ) | |||
Basic and Diluted Loss Per Share | $ | (0.03 | ) | n/a | |||
Weighted Average Number of Shares Outstanding | 18,197,352 | n/a |
As of December 31, 2007 | As of December 31, 2006 | |||||||
Balance Sheet Data: | ||||||||
Assets | $ | 48,161 | $ | 141,614 | ||||
Liabilities | $ | 740,758 | $ | 468,217 | ||||
Total Stockholders’ Deficiency | ($692,597 | ) | $ | (326,603 | ) | |||
Statement of Operations Data: | ||||||||
Revenue | $ | 2,565 | $ | — | ||||
Operating Expenses | $ | 474,832 | $ | 511,959 | ||||
Net Loss | ($472,270 | ) | ($511,959 | ) | ||||
Basic and Diluted Loss Per Share | $ | (0.03 | ) | n/a | ||||
Weighted Average Number of Shares Outstanding | 18,197,352 | n/a |
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products are shipped and title has transferred, provided that a purchase order has been received or a contract executed, there are not uncertainties regarding customer acceptance, the sales price is fixed and determinable and collectability is reasonably assured. Sales discounts, returns and allowances are included in net sales, and the provision for doubtful accounts is included in selling, general and administrative expenses. Additionally, it is our practice to include revenues generated from freight billed to customers in net sales with corresponding freight expense included in cost of sales in the consolidated statement of operations.
(i) | The outstanding Bridge Loan Debenture dated December 14, 2006 in the original principal amount of $172,500 with Fountainhead Capital Partners Limited, which may be converted into approximately 1,876,300 shares of common stock. |
(ii) | A Warrant issued to Fountainhead Capital Partners Limited to Purchase 50.22 Membership Units of the Company (now 805,931 shares of our common stock) dated December 15, 2006 at $.50 per share. |
(iii) | The investment opportunity granted under the Option Agreement with Fountainhead Capital Partners Limited dated December 14, 2006 granting an option to invest up to $1,850,000 within 3 years from December 14, 2006 in exchange for up to 5,182,012 shares of common stock and warrants to convert to 2,870,315 shares of common stock. |
(iv) | Dr. Ezriel E. Kornel entered into a consulting agreement with us on January 10, 2006. Pursuant to the consulting agreement, in consideration for acting as our consultant, Dr. Kornel received options to acquire 240,720 shares of our common stock at a price of $.25 per share. The term of the agreement is for three years. |
(v) | Dr. David Langer entered into an amended and restated consulting agreement with the Company on December 11, 2006. Pursuant to the agreement, Dr. Langer agreed to provide us certain consulting |
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services, which include the role of our Chief Medical Advisor, assistance in the analysis, preparation, submission, publication and presentation of scientific data in relation to our research efforts |
(vi) | Dr. Donald O’Rourke entered into a consulting agreement with us on January 18, 2008. Pursuant to the consulting agreement, Dr. O’Rourke shall provide consulting or advisory services on an as needed basis, to guide us in making important strategic decisions and to evaluate our strategic plans and decisions, research and/or development activities and results, competitive positions and/or other scientific and/or technical issues. In consideration for providing such services, Dr. O’Rourke was granted an option to purchase 50,000 shares of the Company’s common stock at $.50 per share. |
(vii) | GC Advisors LLC is the holder of two warrants to purchase 192,576 shares of our common stock each for a purchase price of $.135 per share. One warrant expires on January 9, 2009 and the other on January 9, 2010. |
(viii) | George Kivotidis is a holder of a warrant to purchase up to 4,000 shares of our common stock at $.50 per share. The warrant is valid from November 6, 2007 for a period of three years. |
(ix) | Martin Magida is a holder of a warrant to purchase up to 160,480 shares of our common stock at $.24 per share. The warrant is valid from September 1, 2007 for a period of five years. |
(x) | Robert Guinta is a holder of a warrant to purchase up to 160,480 shares of our common stock at $.24 per share. The warrant is valid from September 1, 2007 for a period of five years. |
(xi) | Each of Kenneth Coviello and Heather Jensen entered into a stock option agreement with us dated February 15, 2008. Pursuant to the said stock option agreements, each of Kenneth Coviello and Heather Jensen was granted an option to purchase 500,000 shares of common stock of the Company at an exercise price of $.135 per share. The option shall vest 33 1/3% on each of the first, second and third anniversary of the grant and shall expire February 12, 2018. |
(xii) | On April,13, 2007 and May 31, 2007, we entered into 6 month promissory notes with Optimus Services, each having a principal amount of $50,000 |
(xiii) | On January 9, 2007, we entered into a promissory note with GC Advisors, which had a principal amount of $17,000, and matures on January 9, 2009. | |
(xiv) | On February 15, 2008, we entered into a transaction with Regent Private Capital, LLC, whereby Regent Private Capital, LLC agreed to invest $1,000,000 in the purchase of our Convertible Debentures — such investment to be made in two tranches of $500,000 each. In connection with the investment by Regent Private Capital, LLC, Fountainhead Capital Partners Limited agreed to make additional investments totaling $300,000 in two tranches of $150,000 each concurrent with the Regent Private Capital, LLC investments. These Convertible Debentures have a term of one year and are convertible into shares of our common stock at a price of approximately $.123 per share. If fully converted, the Convertible Debentures would result in the issuance of 5,652,954 shares to Regent Private Capital, LLC and 3,017,409 shares to Fountainhead Capital Partners Limited. As of the date hereof, both tranches of investments by Regent Private Capital, LLC and Fountainhead Capital Partners Limited have been completed. |
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Year Ending December 31, | Amount | |||
2008 | $ | 20,000 | ||
2009 | — | |||
2010 | — | |||
2011 | — | |||
2012 | — | |||
Thereafter | — | |||
$ | 20,000 |
Year Ending December 31, | Amount | |||
2008 | $ | 20,000 | ||
2009 | — | |||
2010 | — | |||
2011 | — | |||
2012 | — | |||
Thereafter | — | |||
$ | 20,000 |
Filing Date | Application No. | Country | Title | |||||
Status | ||||||||
June 22, 2005 | 60/692,959 | US — provisional | Surgical Access Instruments for Use with Spinal or Orthopedic Surgery (Cervical) | Converted to PCT | ||||
June 22, 2006 | PCT/US06/24243 | PCT | Surgical Access Instruments for Use with Spinal or Orthopedic Surgery (Cervical) | Entered National Phase | ||||
June 22, 2005 | 11/155,175 | US — utility | Surgical Access Instruments for Use with Delicate Tissues (Brain) | Pending | ||||
November 27, 2006 | PCT/US06/61246 | PCT | Surgical Access Instruments for Use with Delicate Tissues (Brain) | Pending — National Phase Entry on May 27, 2009 | ||||
June 22, 2006 | Canada | Surgical Access Instruments for Use with Spinal or Orthopedic Surgery | Pending | |||||
June 22, 2006 | 06785312.7 | Europe | Surgical Access Instruments for Use with Spinal or Orthopedic Surgery | Pending | ||||
June 22, 2006 | India | Surgical Access Instruments for Use with Spinal or Orthopedic Surgery | Pending | |||||
June 22, 2006 | Israel | Surgical Access Instruments for Use with Spinal or Orthopedic Surgery | Pending | |||||
June 22, 2006 | Japan | Surgical Access Instruments for Use with Spinal or Orthopedic Surgery | Pending | |||||
December 20, 2007 | 11/993,280 | US | Surgical Access Instruments for Use with Spinal or Orthopedic Surgery | Pending |
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Year Ended December 13, | ||||||||||||||||
2007 | 2006 | Increase/ (Decrease) | % Change | |||||||||||||
Revenue | $ | 2,565 | — | $ | 2,565 | — | ||||||||||
Operating Expenses: | ||||||||||||||||
Research and development | $ | 5,885 | $ | 158,823 | ($152,938 | ) | (96.29 | ) | ||||||||
General and administrative | $ | 454,071 | $ | 353,136 | $ | 100,935 | 28.58 | |||||||||
Total Expenses | $ | 459,956 | $ | 511,959 | ($52,003 | ) | 10.16 | |||||||||
Operating loss | ($457,391 | ) | ($511,959 | ) | ($54,568 | ) | 10.66 | |||||||||
Other income (expense) | ($14,879 | ) | — | ($14,879 | ) | — | ||||||||||
Net loss | ($472,270 | ) | ($511,959 | ) | $ | 36,689 | 6.73 |
Year Ended December 31, | |||||||||||||
2007 | 2006 | Increase/ (Decrease) | % Change | ||||||||||
Revenue | $ | 2,565 | — | $ | 2,565 | — | |||||||
Operating Expenses: | |||||||||||||
Research and development | $ | 5,885 | $ | 158,823 | ($152,938 | ) | (96.29 | ) | |||||
General and administrative | $ | 472,088 | $ | 443,993 | $ | 28,095 | 6.33 | ||||||
Total Expenses | $ | 477,973 | $ | 602,816 | ($128,843 | ) | (20.71 | ) | |||||
Operating loss | ($490,287 | ) | ($602,816 | ) | ($112,529 | ) | (18.67 | ) |
earned during the year ended December 31, 2007
Year Ended December 31, | ||||||||||||
2007 | 2006(2) | 2005(1)(2) | ||||||||||
Revenues: | ||||||||||||
Sales | $ | 2,565 | — | — | ||||||||
Operating expenses: | ||||||||||||
Research and development | $ | 5,885 | $ | 158,823 | $ | 103,122 | ||||||
General and administrative | $ | 454,071 | $ | 353,136 | $ | 84,831 | ||||||
Total Operating Expenses | $ | 459,956 | $ | 511,959 | $ | 187,953 | ||||||
Operating loss | ($457,391 | ) | ($511,959 | ) | ($187,953 | ) | ||||||
Other income (expense) | ||||||||||||
Interest expense (net) | ($14,879 | ) | — | — | ||||||||
Net loss | ($472,270 | ) | ($511,959 | ) | (187,953 | ) | ||||||
Loss per common share – basic and diluted | ($0.03 | ) | n/a | n/a | ||||||||
Weighted average shares outstanding | 18,197,352 | n/a | n/a |
Year Ended December 31, | ||||||||||
2007 | 2006 (2) | 2005 (1) (2) | ||||||||
Revenues: | ||||||||||
Sales | $ | 2,565 | — | — | ||||||
Operating expenses: | ||||||||||
Research and development | $ | 5,885 | $ | 158,823 | $ | 103,122 | ||||
General and administrative | $ | 472,088 | $ | 443,993 | $ | 84,831 | ||||
Total Operating Expenses | $ | 477,973 | $ | 602,816 | $ | 187,953 | ||||
Operating loss | ($490,287 | ) | ($602,816 | ) | ($187,953 | ) | ||||
Loss per common share – basic and diluted | ($0.03 | ) | n/a | n/a | ||||||
Weighted average shares outstanding | 18,197,352 | n/a | n/a |
(1) | period from the date of inception (June 17, 2005) through December 31, 2005 |
(2) | In 2006 and 2005 the Company operated as a limited liability company |
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Quarter Ended March 31, | |||||||
2008 | 2007 | ||||||
Revenues: | |||||||
Sales | $ | — | — | ||||
Operating expenses: | |||||||
Research and development | $ | 6,333 | $ | 4,777 | |||
General and administrative | $ | 943,774 | $ | 96,237 | |||
Total Operating Expenses | $ | 950,107 | $ | 101,014 | |||
Operating loss | ($956,097 | ) | ($102,870 | ) | |||
Loss per common share – basic and diluted | ($0.05 | ) | n/a | ||||
Weighted average shares outstanding | 19,860,118 | n/a |
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• | Dr. Ezriel E. Kornel . Dr. Kornel is President of the New York State Neurosurgical Society and a New York State Neurosurgical Society delegate to the Congress of State Neurosurgical Societies. Dr. Kornel serves on the Board of Directors of Medical Liability Mutual Insurance Company (MLMIC). He is Director of the Institute for Neuroscience at Northern Westchester Hospital, Mount Kisco, NY and a partner in the group practice, Neurosurgeons of New York in White Plains, NY. |
• | Dr. David Langer . Dr. Langer is the Director for Cerebrovascular Neurosurgery at St. Luke’s Roosevelt Hospital and is also the Assistant Professor of Neurological Surgery, Albert Einstein College of Medicine. Dr. David Langer is a graduate of the University of Pennsylvania and its medical school. He remained at Penn for his neurosurgical training, which he practiced under the direction of Eugene Flamm until 1998. Upon the completion of his residency he joined Dr. Flamm as his first neurovascular fellow at Beth Israel Medical Center and the Institute for Neurology and Neurosurgery (INN). Dr. Langer’s clinical interests include neurovascular surgery including arteriovenous malformations, aneurysms and carotid artery disease as well as complex spinal disorders and brain tumors. Dr. Langer is the author of many papers and chapters in and has lectured nationally and internationally on a number of topics in neurosurgery. |
• | Dr. Donald O’Rourke . Dr. O’Rourke is a renowned expert in the clinical management of patients with primary and metastatic brain tumors. He is currently an associate professor at the Hospital of the University of Pennsylvania and was the former chief of neurosurgery of the Penn-affiliated Philadelphia Veterans Hospital. In addition, Dr. O'Rourke is Principal Investigator of an independent research laboratory that is funded by The National Institutes of Health and is dedicated to the development of genetic and biological treatments for brain tumors that would complement surgical resection. Dr. O'Rourke received his undergraduate degree from Harvard University and his medical degree and neurosurgical training at the University of Pennsylvania School of Medicine. |
• | Dr. Piero Andrea Oppido . Dr. Oppido is one of the leading surgeons at the National Cancer Institute “Regina Elena” in Rome, Italy. Dr. Oppido’s specialty is neuroendoscopy. Dr. Oppido belongs to the Congress of Neurological Surgeons (CNS), the European Association for NeuroOncology (EANO). Dr. Oppido has presented at numerous congresses throughout Europe and the United States. |
Mr. Girgenti is the Chairman and CEO of Ogilvy Healthworld, a one of the largest multinational healthcare communications companiesthat operates in 53 countries with over 1000 personnel on staff. Mr. Girgenti graduated from Columbia University in 1968 with a BS and received an MBA in 1973. He has worked in the pharmaceutical industry since 1968 for companies such as Bristol-Myers Squibb, Carter Wallace and DuPont, as well as advertising agencies that specialize in healthcare. During his career, Steve has held positions in marketing research, product management, new product planning and commercial development. Mr. Girgenti founded Healthworld in 1986 and now serves as Ogilvy Healthworld Chairman and Chief Executive Officer. He was also honored as the Entrepreneur of the Year by Ernst & Young and NASDAQ in 1999 and as the industry's Man of the Year in 2000.
advisor.
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Cervical Access System . products with a valued list price of $44,000 each, (iv) receive the first production piece at no charge of every new product he assists in development from feasibility to production release, (v) have the option to have an idea processed through our “New Invention” procedure with no research and development expenses, (vi) have the potential to earn a 20% royalty for each part of a new product developed exclusively by him and launched for sale in the worldwide market upon meeting certain mutually agreed sales objectives and (vii) be considered to provide to us special consulting or advisement services for certain projects for a mutually agreed upon fee. The agreement will terminate April 15, 2009.
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the
Brain Access System• | Target Shifting |
• | Real-Time Retractor Positioning Data |
• | TC-VBAS |
• | EC-VBAS |
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that covers the main points for distribution that include but are not limited to sales and marketing in respective territories, regulatory compliance, shipping, and guaranteed annual minimums. Our primary target markets are Europe and Canada for fiscal year 2008. During fiscal 2008, we intend to commence the regulatory approval process in the Japanese and Chinese markets as it is a lengthy process.
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products (please see attached exhibit).
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However, the computerized neuronaviagational image-guided surgery systems is not completed yet. We anticipate this project and product enhancement to be complete by December 2008.
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which has changed little in over 70 years. We are not aware of any other company investing significant resources in brain retractor technology or that is developing cervical access technology ours or that will be competitive with our products.
Filing Date | Application No. | Country | Title | |||||
Status | ||||||||
June 22, 2005 | 60/692,959 | US — provisional | Surgical Access Instruments for Use with Spinal or Orthopedic Surgery (Cervical) | Converted to PCT | ||||
June 22, 2006 | PCT/US06/24243 | PCT | Surgical Access Instruments for Use with Spinal or Orthopedic Surgery (Cervical) | Entered National Phase | ||||
June 22, 2005 | 11/155,175 | US — utility | Surgical Access Instruments for Use with Delicate Tissues (Brain) | Pending | ||||
November 27, 2006 | PCT/US06/61246 | PCT | Surgical Access Instruments for Use with Delicate Tissues (Brain) | Pending — National Phase Entry on May 27, 2009 | ||||
June 22, 2006 | Canada | Surgical Access Instruments for Use with Spinal or Orthopedic Surgery | Pending | |||||
June 22, 2006 | 06785312.7 | Europe | Surgical Access Instruments for Use with Spinal or Orthopedic Surgery | Pending | ||||
June 22, 2006 | India | Surgical Access Instruments for Use with Spinal or Orthopedic Surgery | Pending | |||||
June 22, 2006 | Israel | Surgical Access Instruments for Use with Spinal or Orthopedic Surgery | Pending | |||||
June 22, 2006 | Japan | Surgical Access Instruments for Use with Spinal or Orthopedic Surgery | Pending | |||||
December 20, 2007 | 11/993,280 | US | Surgical Access Instruments for Use with Spinal or Orthopedic Surgery | Pending |
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quotation of a security whose issuer does not meet this filing requirement. Securities already quoted on the OTCBB that become delinquent in their required filings will be removed following a 30 or 60 day grace period if they do not make their required filing during that time. We cannot guarantee that our application will be accepted or approved and our stock listed and quoted for sale. As of the date of this filing, there have been no discussions or understandings between us or anyone acting on our behalf with any market maker regarding participation in a future trading market for our securities.
. On April 15, 2008, Fountainhead Capital Partners Limited assigned its interest in such investment to Fountainhead Capital Management Limited.
. On April 15, 2008, Fountainhead Capital Partners Limited assigned its interest in such investment to Fountainhead Capital Management Limited.
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On April 15, 2008, Fountainhead Capital Partners Limited assigned warrants to purchase 60,445 shares of our common stock to La Pergola Investments Limited.
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all common stock which may be issuable upon conversion of the Regent and Fountainhead debentures. We will thereafter use our commercially reasonable efforts to have such registration statement declared effective by the SEC within one hundred eighty (180) days from the date thereof. For purposes thereof, we will be deemed to be using our “commercially reasonable efforts”, provided we fully and appropriately respond to all comments from the SEC within ten (10) business days of receipt thereof without any undue hardship or unreasonable expenses, and diligently continue to seek effectiveness of such registration statement. Further, we shall take such action to have the Registration Statement declared effective by the SEC within three (3) business days following written confirmation from the SEC that it either will not review the Registration Statement or that it has no further comment on the Registration Statement. We shall not be in breach of our obligation to file and render effective the Registration Statement for any delay arising from (i) issues raised by the SEC relating to Rule 415 of the Securities Act, as amended, or to the structure of the sale and resale of the shares, (ii) information required from person or entities other than the Company, or (iii) issues resulting from or relating to acts or omissions of persons or entities other than the Company.
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Title of Class | Name and Address of Beneficial Owner | Amount and Nature of Beneficial Owner | Percent of Class | |||||||||
Common Stock | Kenneth Coviello 80 Orville Drive, Suite 100 Bohemia, New York 11716 | 5,117,922 | 23.439 | % | ||||||||
Common Stock | Heather N. Jensen 80 Orville Drive, Suite 100 Bohemia, New York 11716 | 5,117,922 | 23.439 | % | ||||||||
Common Stock | David Salomon 15400 Knoll Trail, Suite 350 Dallas, TX 75248 | 1,361,111 | 6.233 | % | ||||||||
Common Stock | Pascale Mangiardi 80 Orville Drive, Suite 100 Bohemia, New York 11716 | — | — | |||||||||
Common Stock | Robert Diener 80 Orville Drive, Suite 100 Bohemia, New York 11716 | — | — | |||||||||
Common Stock | Sawmill Trust c/o Mitchell Greene Robinson Brog Greene 1345 Avenue of the Americas New York, NY 10105 | (1) | 5,117,922 | 23.439 | % | |||||||
Common Stock | All executive officers and directors as a group | 15,353,763 | 46.878 | % | ||||||||
Common Stock | Regent Private Capital, LLC 152 West 57th Street, 9th Floor, New York, NY 10019 | 12,464,711 | (1) | 36.34 | % | |||||||
Common Stock | Fountainhead Capital Partners Limited Portman House Hue Street, St, Helier, Jersey JB4 5RP | 8,650,335 | (1) | 28.38 | % |
Title of Class | Name and Address of Beneficial Owner | Amount and Nature of Beneficial Owner (1) | Percent of Class (2) | |||||||
Common Stock | Kenneth Coviello 80 Orville Drive, Suite 100 Bohemia, New York 11716 | 5,117,921 | 22.865 | % | ||||||
Common Stock | Heather N. Jensen 80 Orville Drive, Suite 100 Bohemia, New York 11716 | 5,117,921 | 22.865 | % | ||||||
Common Stock | David Salomon 15400 Knoll Trail, Suite 350 Dallas, TX 75248 | 1,361,111 | 6.081 | % | ||||||
Common Stock | Pascale Mangiardi 80 Orville Drive, Suite 100 Bohemia, New York 11716 | — | — | |||||||
Common Stock | Robert Diener 80 Orville Drive, Suite 100 Bohemia, New York 11716 | — | — | |||||||
Common Stock | Sawmill Trust c/o Mitchell Greene Robinson Brog Greene 1345 Avenue of the Americas New York, NY 10105( | 5,117,921 | 22.865 | % | ||||||
Common Stock | All executive officers and directors as a group | 10,235,842 | 45.731 | % | ||||||
Common Stock | Regent Private Capital, LLC 152 West 57 th Street, 9 th Floor, New York, NY 10019 | 12,867,676(3 | ) | 36.503 | % | |||||
Common Stock | Fountainhead Capital Management Limited Portman House Hue Street, St, Helier, Jersey JB4 5RP | 9,053,306(3 | ) | 28.799 | % |
(1) | In determining beneficial ownership of our common stock, the number of shares shown includes shares which the beneficial owner may acquire upon exercise of debentures, warrants and options which may be acquired within 60 days. In determining the percent of common stock owned by a person or entity on |
(2) | In addition, in determining the percent of common stock owned by a person or entity on | |
(3) | The following table shows the calculation of the beneficial ownership of Regent Private Capital, LLC and Fountainhead Capital Management Limited: |
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Calculation of Fountainhead Capital Management Limited Holdings | |||||||
Fountainhead Bridge Loan Conversion | 1,876,300 | ||||||
Fountainhead Bridge Loan Warrants | 402,966 | ||||||
Option Agreement: | |||||||
Shares | 5,652,954 | ||||||
Warrants | 3,017,409 | ||||||
(less transferred to Regent) | -4,335,182 | ||||||
Net | 4,335,182 | ||||||
Fountainhead Convertible Debenture | |||||||
Tranche #1 | 1,219,430 | ||||||
Tranche #2 | 1,219,430 | ||||||
Total | 9,053,306 | ||||||
Calculation of Regent Private Capital, LLC Holdings | |||||||
1/2 of Fountainhead Bridge Loan Warrants | 402,966 | ||||||
Option Agreement: | |||||||
Shares | 5,652,954 | ||||||
Warrants | 3,017,409 | ||||||
(less retained by Fountainhead) | -4,335,182 | ||||||
Net | 4,335,182 | ||||||
Regent Convertible Debenture | |||||||
Tranche #1 | 4,064,765 | ||||||
Tranche #2 | 4,064,765 | ||||||
Total | 12,867,676 |
Directors and Executive Officers | Position/Title | Age | ||
Kenneth T. Coviello | Chief Executive Officer and a director | 57 | ||
Heather N. Jensen | President and a director | 28 | ||
Pascale Mangiardi | Director | 36 | ||
Robert Diener | Director |
medical devices and healthcare productsmedical technologiesmedical. Previous associations were:applicationsdistributor of diabetic skin care supplies,maintained profitability margins while increasing investment in research and development. Mr. Coviello a former director of YPO, Young Presidents Organization, LI Chapter, and a director for HIMA (Health Industry Manufacturers Association). He has also served as an advisor to NAMES (National Associationdistributor of Medical Equipment Suppliers)devices, equipment and HIDA (Health Industry Distributors Association). Mr. Coviello received his bachelorssuppliesscience from Long Island University.59,60, has been our director since January 25, 2008.Mr. Diener has over 30 years of experience as an attorney and senior corporate executive. The focus of his practice is corporate and securities law, mergers and acquisitions, finance and real estate. While Mr. Diener has experience across a broad range of industries, his emphasis has been in health care, biotechnology, banking and finance, telecommunications and information technology. In addition to the practice of law, he has a strong background and experience in corporate governance, accounting and finance, strategic planning and management information systems.
38
Mr. Diener currently serves as counsel to a number of investors and companies which are focused on acquisition of public companies in the United States, corporate mergers and a wide variety of investment activities. His responsibilities run the full gamut from corporate governance to securities law compliance to major contract negotiations. During his career, Mr. Diener has served as President and CEO of American Health Properties, Inc. (NYSE), one of the largest real estate investment trusts in the country; a senior executive of American Medical International, Inc. (NYSE), one of the country’s largest health care services providers; from 1987-1992, and was Chairman and CEO of UStel, Inc., a publicly traded (NASDAQ) telecommunications company and a partner in a boutique investment banking group.from 1992-1999. He also has extensive experience in international business, having had direct responsibility for transactionsbeen in the United Kingdom, Spain, Germany, Switzerland, Greece, Egypt, Singapore, Australia, Israel, Hong Kong, Japan, Korea, Malaysia, Mexico, Brazil, Venezuela and Ecuador. Mr. Diener has served as a member or advisor to the boardsprivate practice of many public and private companies, including over 20 individual for-profit and not-for-profit hospitals and health care facilities. He has previously served as a director of the Federation of American Hospital Systems and the National Association of Real Estate Investment Trusts. He has lectured frequently in the field of health care finance.law since 1992. Mr. Diener has been an active member of the State Bar of California since 1973. He received a Bachelor of Arts degree in Social Sciences and Communications from the University of Southern California in 1969 and a Juris Doctor degree (Magna Cum Laude) from the University of Santa Clara School of Law in 1973, where he was the Business Editor of the Law Review. He speaks conversational Spanish, French and Italian; has a high degree of computer literacy and a strong working knowledge of generally accepted accounting principles (GAAP). Mr. Diener served in the United States Marine Corps from 1969 through 1975.
He was Chief Executive Officer from August 2002 – November 2005.
39
Name and Principal Position | Year | Salary ($) | Bonus ($) | Stock Awards ($) | Option Awards ($) | Non-Equity Incentive Plan Compensation | Non-Qualified Deferred Compensation Earnings ($) | All other Compensation ($) | Total ($) | |||||||||||||||||||||||||||
Kenneth T. Coviello (Chief Executive Officer) | 2007 | $ | 137,433 | — | — | — | — | — | $ | 17,301.80 | $ | 154,734.80 | ||||||||||||||||||||||||
2006 | $ | 76,363.64 | — | — | — | — | — | $ | 8,767.50 | $ | 85,131.29 | |||||||||||||||||||||||||
Heather Jensen (President) | 2007 | $ | 117,000 | — | — | — | — | — | $ | 17,301.80 | $ | 134,301.80 | ||||||||||||||||||||||||
2006 | $ | 89,843.11 | — | — | — | — | — | $ | 10,276.47 | $ | 100,119.58 |
Name and Principal Position | Year | Salary ($) | Bonus ($) | Stock Awards ($) | Option Awards ($) | Non-Equity Incentive Plan Compensation | Non-Qualified Deferred Compensation Earnings ($) | All other Compensation ($) | Total ($) | ||||||||||||||||||||||||||||||||||
Kenneth T. Coviello (Chief Executive Officer) | 2007 | $ | 137,433 | — | — | — | — | — | $ | 17,301.80 | $ | 154,734.80 | |||||||||||||||||||||||||||||||
2006 | $ | 76,363.64 | — | — | — | — | — | $ | 8,767.50 | $ | 85,131.29 | ||||||||||||||||||||||||||||||||
Heather Jensen (President) | 2007 | $ | 117,000 | — | — | — | — | — | $ | 17,301.80 | $ | 134,301.80 | |||||||||||||||||||||||||||||||
2006 | $ | 89,843.11 | — | — | — | — | — | $ | 10,276.47 | $ | 100,119.58 |
40
41
only upon delivery to us of an undertaking (hereinafter an “undertaking”), by or on behalf of such indemnitee, to repay all amounts so advanced if it shall ultimately be determined by final judicial decision from which there is no further right to appeal (hereinafter a “final adjudication”) that such indemnitee is not entitled to be indemnified for such expenses under the bylaws or otherwise.
42
Name of Stockholder | Total Number of Shares of Common Stock Held Prior to Offering | Number of Shares of Common Stock Held and Offered Pursuant to this Prospectus | Number of Shares of Common Stock Underlying Convertible Securities Held and Offered Pursuant to this Prospectus | Shares Beneficially Owned Before Offering (Percentage) | Shares Beneficially Owned After the Offering (Number) | Shares Beneficially Owned After the Offering (Percentage) | |||||||||||||
Steven Thuilot | 534,939 | 534,939 | — | 2.39 | % | 0 | 0 | ||||||||||||
Dr. Michael Wayne | 100,301 | 100,301 | — | 0.45 | % | 0 | 0 | ||||||||||||
Ed and Joanne Minder | 267,469 | 267,469 | — | 1.19 | % | 0 | 0 | ||||||||||||
Larry Coviello | 281,859 | 281,859 | — | 1.26 | % | 0 | 0 | ||||||||||||
Robert Coviello | 228,365 | 228,365 | — | 1.02 | % | 0 | 0 | ||||||||||||
Neal Clay | 107,041 | 107,041 | — | 0.48 | % | 0 | 0 | ||||||||||||
Joan Pallateri | 107,041 | 107,041 | — | 0.48 | % | 0 | 0 | ||||||||||||
Edwin Tironi | 160,482 | 160,482 | — | 0.72 | % | 0 | 0 | ||||||||||||
Susan and Lambert Dahlin | 160,482 | 160,482 | — | 0.72 | % | 0 | 0 | ||||||||||||
Prateek Parekh | 40,120 | 40,120 | — | 0.18 | % | 0 | 0 | ||||||||||||
Goran Avdicevic | 100,301 | 100,301 | — | 0.45 | % | 0 | 0 | ||||||||||||
Harpreet Anand | 64,193 | 64,193 | — | 0.29 | % | 0 | 0 | ||||||||||||
Anirban Sen | 60,181 | 60,181 | — | 0.27 | % | 0 | 0 | ||||||||||||
Joel R. Smart Living Trust | 50,151 | 50,151 | — | 0.22 | % | 0 | 0 | ||||||||||||
Clarence A. Dahlin Living Trust | 50,151 | 50,151 | — | 0.22 | % | 0 | 0 | ||||||||||||
Joel R. Smart Living Trust and Clarence A. Dahlin Living Trust | 100,301 | 100,301 | — | 0.45 | % | 0 | 0 | ||||||||||||
GC Advisors | 80,241 | 80,241 | 385,152 | 0.36 | % | 0 | 0 | ||||||||||||
Kenneth Olson | 100,301 | 100,301 | — | 0.45 | % | 0 | 0 | ||||||||||||
Feldstein Management | 12,197 | 12,197 | — | 0.05 | % | 0 | 0 | ||||||||||||
Dr. David Langer | 24,072 | 24,072 | 320,960 | 0.11 | % | 0 | 0 | ||||||||||||
Vinas & Company | 16,048 | 16,048 | — | 0.07 | % | 0 | 0 | ||||||||||||
David Salomon | 1,361,111 | 250,000 | — | 1.12 | % | 1,111,111 | 4.96 | % | |||||||||||
MAC Strategic Advisors | 40,000 | 40,000 | — | 0.18 | % | 0 | 0 | ||||||||||||
George Kivotidis | 363,158 | 363,158 | 4,000 | 1.62 | % | 0 | 0 | ||||||||||||
Christopher A. Vinas | 263,158 | 263,158 | — | 1.18 | % | 0 | 0 | ||||||||||||
Concordia Financial Group1 | 1,047,494 | 1,047,494 | — | 4.68 | % | 0 | 0 | ||||||||||||
Sichenzia Ross Friedman Ference LLP1 | 523,747 | 523,747 | — | 2.34 | % | 0 | 0 | ||||||||||||
RES Holdings | 47,366 | 47,366 | — | 0.21 | % | 0 | 0 | ||||||||||||
LFI Investments Ltd | 78,947 | 78,947 | — | 0.35 | % | 0 | 0 | ||||||||||||
Jay Berkow | 52,632 | 52,632 | — | 0.24 | % | 0 | 0 | ||||||||||||
Vivek Bhaman | 26,316 | 26,316 | — | 0.12 | % | 0 | 0 | ||||||||||||
Robert Braumann | 26,316 | 26,316 | — | 0.12 | % | 0 | 0 | ||||||||||||
John A. Brown Jr. | 52,632 | 52,632 | — | 0.24 | % | 0 | 0 | ||||||||||||
Vincent P. Carroll | 26,316 | 26,316 | — | 0.12 | % | 0 | 0 | ||||||||||||
Robert A. Frazier | 26,316 | 26,316 | — | 0.12 | % | 0 | 0 |
Name of Stockholder | Number of Shares of Common Stock Held and Offered Pursuant to this Prospectus | Number of Shares of Common Stock Underlying Convertible Securities Held and Offered Pursuant to this Prospectus | Shares Beneficially Owned Before Offering (Percentage) | Shares Beneficially Owned After the Offering (Number) | Shares Beneficially Owned After the Offering (Percentage) | |||||||||||||||
Steven Thuilot | 534,939 | — | 2.450 | % | 0 | 0 | ||||||||||||||
Dr. Michael Wayne | 100,301 | — | 0.459 | % | 0 | 0 | ||||||||||||||
Ed and Joanne Minder | 267,469 | — | 1.225 | % | 0 | 0 | ||||||||||||||
Larry Coviello | 281,859 | — | 1.291 | % | 0 | 0 | ||||||||||||||
Robert Coviello | 228,365 | — | 1.046 | % | 0 | 0 | ||||||||||||||
Neal Clay | 107,041 | — | 0.490 | % | 0 | 0 | ||||||||||||||
Joan Pallateri | 107,041 | — | 0.490 | % | 0 | 0 | ||||||||||||||
Edwin Tironi | 160,482 | — | 0.735 | % | 0 | 0 | ||||||||||||||
Susan and Lambert Dahlin | 160,482 | — | 0.735 | % | 0 | 0 | ||||||||||||||
Prateek Parekh | 40,120 | — | 0.184 | % | 0 | 0 | ||||||||||||||
Goran Avdicevic | 100,301 | — | 0.459 | % | 0 | 0 | ||||||||||||||
Harpreet Anand | 64,193 | — | 0.294 | % | 0 | 0 | ||||||||||||||
Anirban Sen | 60,181 | — | 0.276 | % | 0 | 0 | ||||||||||||||
Joel R. Smart Living Trust | 50,151 | — | 0.230 | % | 0 | 0 | ||||||||||||||
Clarence A. Dahlin Living Trust | 50,151 | — | 0.230 | % | 0 | 0 | ||||||||||||||
Joel R. Smart Living Trust and Clarence A. Dahlin Living Trust | 100,301 | — | 0.459 | % | 0 | 0 | ||||||||||||||
GC Advisors | 80,241 | — | 0.367 | % | 0 | 0 | ||||||||||||||
Kenneth Olson | 100,301 | — | 0.459 | % | 0 | 0 | ||||||||||||||
Feldstein Management | 12,197 | — | 0.056 | % | 0 | 0 | ||||||||||||||
Dr. David Langer | 24,072 | 320,960 | 0.110 | % | 0 | 0 | ||||||||||||||
Vinas & Company | 16,048 | — | 0.073 | % | 0 | 0 | ||||||||||||||
David Salomon | 250,000 | — | 6.233 | % | 1,111,111 | 5.089 | % | |||||||||||||
MAC Strategic Advisors | 40,000 | — | 0.183 | % | 0 | 0 | ||||||||||||||
George Kivotidis | 363,158 | — | 1.663 | % | 0 | 0 | ||||||||||||||
Christopher A. Vinas | 263,158 | — | 1.206 | % | 0 | 0 | ||||||||||||||
Concordia Financial Group | 1,047,494 | — | 2.399%* | 0 | 0 | |||||||||||||||
Sichenzia Ross Friedman Ference LLP | 523,747 | — | 2.399 | % | 0 | 0 | ||||||||||||||
RES Holdings | 23,683 | — | 0.108 | % | 0 | 0 | ||||||||||||||
LFI Investments Ltd | 78,947 | — | 0.362 | % | 0 | 0 | ||||||||||||||
Jay Berkow | 52,632 | — | 0.241 | % | 0 | 0 | ||||||||||||||
Vivek Bhaman | 26,316 | — | 0.121 | % | 0 | 0 | ||||||||||||||
Robert Braumann | 26,316 | — | 0.121 | % | 0 | 0 | ||||||||||||||
John A. Brown Jr. | 52,632 | — | 0.241 | % | 0 | 0 | ||||||||||||||
Vincent P. Carroll | 26,316 | — | 0.121 | % | 0 | 0 | ||||||||||||||
Robert A. Frazier | 26,316 | — | 0.121 | % | 0 | 0 |
43
Name of Stockholder | Number of Shares of Common Stock Held and Offered Pursuant to this Prospectus | Number of Shares of Common Stock Underlying Convertible Securities Held and Offered Pursuant to this Prospectus | Shares Beneficially Owned Before Offering (Percentage) | Shares Beneficially Owned After the Offering (Number) | Shares Beneficially Owned After the Offering (Percentage) | |||||||||||||||
Martin Keating | 26,316 | — | 0.121 | % | 0 | 0 | ||||||||||||||
Vicor F. Keen | 78,947 | — | 0.362 | % | 0 | 0 | ||||||||||||||
Robert M. Richards | 26,316 | — | 0.121 | % | 0 | 0 | ||||||||||||||
Joseph Roberts | 26,316 | — | 0.121 | % | 0 | 0 | ||||||||||||||
Thomas Romano | 26,316 | — | 0.121 | % | 0 | 0 | ||||||||||||||
Edward F. Sager, Jr. | 26,316 | — | 0.121 | % | 0 | 0 | ||||||||||||||
Mark Staples | 26,316 | — | 0.121 | % | 0 | 0 | ||||||||||||||
Neil Strauss | 52,632 | — | 0.241 | % | 0 | 0 | ||||||||||||||
Terry Tyson | 52,632 | — | 0.241 | % | 0 | 0 | ||||||||||||||
Geoffrey C Walker | 26,316 | — | 0.121 | % | 0 | 0 | ||||||||||||||
James Ward | 26,316 | — | 0.121 | % | 0 | 0 | ||||||||||||||
Jay S. Weiss | 52,632 | — | 0.241 | % | 0 | 0 | ||||||||||||||
Fountainhead Capital Partners Limited | — | 2,161,709 | — | 0 | 0 | |||||||||||||||
Regent Private Capital, LLC | — | 2,161,709 | — | 0 | 0 | |||||||||||||||
Ezriel E. Kornel | — | 240,720 | — | 0 | 0 | |||||||||||||||
Donald O’Rourke | — | 50,000 | — | 0 | 0 | |||||||||||||||
GC Advisors LLC | — | 385,152 | — | 0 | 0 | |||||||||||||||
George Kivotidis | — | 4,000 | — | 0 | 0 | |||||||||||||||
Martin Magida | — | 160,480 | — | 0 | 0 | |||||||||||||||
Robert Guinta | — | 160,480 | — | 0 | 0 |
Name of Stockholder | Total Number of Shares of Common Stock Held Prior to Offering | Number of Shares of Common Stock Held and Offered Pursuant to this Prospectus | Number of Shares of Common Stock Underlying Convertible Securities Held and Offered Pursuant to this Prospectus | Shares Beneficially Owned Before Offering (Percentage) | Shares Beneficially Owned After the Offering (Number) | Shares Beneficially Owned After the Offering (Percentage) | |||||||||||||
Martin Keating | 26,316 | 26,316 | — | 0.12 | % | 0 | 0 | ||||||||||||
Vicor F. Keen | 78,947 | 78,947 | — | 0.35 | % | 0 | 0 | ||||||||||||
Robert M. Richards | 26,316 | 26,316 | — | 0.12 | % | 0 | 0 | ||||||||||||
Joseph Roberts | 26,316 | 26,316 | — | 0.12 | % | 0 | 0 | ||||||||||||
Thomas Romano | 26,316 | 26,316 | — | 0.12 | % | 0 | 0 | ||||||||||||
Edward F. Sager, Jr. | 26,316 | 26,316 | — | 0.12 | % | 0 | 0 | ||||||||||||
Mark Staples | 26,316 | 26,316 | — | 0.12 | % | 0 | 0 | ||||||||||||
Neil Strauss | 52,632 | 52,632 | — | 0.24 | % | 0 | 0 | ||||||||||||
Terry Tyson | 52,632 | 52,632 | — | 0.24 | % | 0 | 0 | ||||||||||||
Geoffrey C Walker | 26,316 | 26,316 | — | 0.12 | % | 0 | 0 | ||||||||||||
James Ward | 26,316 | 26,316 | — | 0.12 | % | 0 | 0 | ||||||||||||
Jay S. Weiss | 52,632 | 52,632 | — | 0.24 | % | 0 | 0 | ||||||||||||
Fountainhead Capital Management Limited | — | 2,161,709 | — | 0 | 0 | ||||||||||||||
Regent Private Capital, LLC | — | — | 2,161,709 | — | 0 | 0 | |||||||||||||
Ezriel E. Kornel | — | — | 240,720 | — | 0 | 0 | |||||||||||||
Donald O’Rourke | — | — | 50,000 | — | 0 | 0 | |||||||||||||
Martin Magida | — | — | 160,480 | — | 0 | 0 | |||||||||||||
Robert Guinta | — | — | 160,480 | — | 0 | 0 |
Feb 15, 2008 | 523,747 Shares @ $.19 per share | $ | 99,512 | ||||
Concordia Financial Group | |||||||
Feb 15, 2008 | 523,747 Shares @ $.19 | $ | 99,512 | ||||
May 5, 2008 | 523,747 Shares @ $.19 | $ | 99,512 | ||||
RES Holdings | |||||||
Feb 15, 2008 | 23,683 shares @ $.19 | $ | 4,500 | ||||
May 5, 2008 | 23,683 shares @ $.19 | $ | 4,500 | ||||
GC Advisors | |||||||
Feb 15, 2008 | $4,500 cash | $ | 4,500 | ||||
May 5, 2008 | $4,500 cash | $ | 4,500 | ||||
Total | $ | 316,535 |
Market Price | Total | Combined Market Price | Combined Conv. Price | Aggregate | ||||||||||||||||||
Instrument | Date | Date of Sale | Conversion Price | Possible Conv. Shares | of Conversion Shares | of Conversion Shares | Discount to Market Price | |||||||||||||||
Fountainhead Capital Partners—$172,000 Debenture | Dec. 15, 2006 | $ | 0.19 | $ | 0.10 | 1,086,300 | $ | 206,397 | $ | 105,914 | $ | 100,483 | ||||||||||
David Salomon—$150,000 Convertible Loan | Aug 28, 2007 | $ | 0.19 | $ | 0.14 | 1,211,111 | $ | 230,111 | $ | 169,556 | $ | 60,556 | ||||||||||
Fountainhead Capital Partners—$300,000 Debenture | Feb. 15, 2008 | $ | 0.19 | $ | 0.12 | 2,438,859 | $ | 463,383 | $ | 299,980 | $ | 163,404 | ||||||||||
Regent Capital Partners—$1,000,000 Debenture | Feb 15, 2008 | $ | 0.19 | $ | 0.12 | 8,129,529 | $ | 1,544,611 | $ | 999,932 | $ | 544,678 | ||||||||||
TOTAL | $ | 2,444,502 | $ | 1,575,382 | $ | 869,120 |
Market Price | Total | Combined Market | Combined Conv. | (Premium) Discount | ||||||||||||||||||
Instrument | Date | Date of Sale | Exercise Price | Possible Shares | Price of Shares | Price of Shares | to Market Price | |||||||||||||||
Fountainhead Warrants (including warrants transferred to Regent | 12/4/2006 | $ | 0.14 | $ | 0.50 | 805,931 | $ | 112,830 | $ | 402,966 | ($290,135 | ) | ||||||||||
GC Advisors—Warrants | 1/9/2006 | $ | 0.14 | $ | 0.14 | 192,576 | $ | 26,961 | $ | 26,961 | $ | 0 | ||||||||||
GC Advisors—Warrants | 1/9/2006 | $ | 0.14 | $ | 0.14 | 192,576 | $ | 26,961 | $ | 26,961 | $ | 0 | ||||||||||
Martin Magida—Options | 9/1/2007 | $ | 0.24 | $ | 0.24 | 160,480 | $ | 38,515 | $ | 38,515 | $ | 0 | ||||||||||
George Kivotidis—Options | 11/6/2007 | $ | 0.50 | $ | 0.50 | 4,000 | $ | 2,000 | $ | 2,000 | $ | 0 | ||||||||||
Robert Guinta—Options | 9/1/2007 | $ | 0.24 | $ | 0.24 | 160,480 | $ | 38,515 | $ | 38,515 | $ | 0 | ||||||||||
Ezriel Kornel—Options | 1/1/2006 | $ | 0.25 | $ | 0.25 | 240,720 | $ | 60,180 | $ | 60,180 | $ | 0 | ||||||||||
David Langer—Options | 12/11/2006 | $ | 0.25 | $ | 0.25 | 320,960 | $ | 80,240 | $ | 80,240 | $ | 0 | ||||||||||
Fountainhead Capital Option Agreement | ||||||||||||||||||||||
Purchase Option | 12/14/2006 | $ | 0.25 | $ | 0.33 | 5,652,954 | $ | 1,413,239 | $ | 1,865,475 | ($452,236 | ) | ||||||||||
Warrants | 12/14/2006 | $ | 0.25 | $ | 0.34 | 3,017,409 | $ | 754,352 | $ | 1,025,919 | ($271,567 | ) | ||||||||||
TOTAL | $ | 2,553,793 | $ | 3,567,731 | ($1,013,938 | ) |
Gross Proceeds of Convertible Notes Transaction | ||||
Regent Private Capital | $ | 1,000,000 | ||
Fountainhead Capital Partners Limited | $ | 300,000 | ||
TOTAL | $ | 1,300,000 | ||
Payment of Fees related to the Sale of Convertible Debentures | ($316,535 | ) | ||
Potential (Discounts) on Sale of Convertible Debentures, etc | ($869,120 | ) | ||
Potential Premium /(Discount) on Exercise of Options, Warrants, etc. | $ | 1,013,938 | ||
Net Proceeds from Sale of Convertible Debentures | $ | 1,128,283 | ||
Percentage of Fees/Premium/Discount to Gross Proceeds | 15.22 | % |
Shs. of Class | Shares Sold | Prior | Curr. | |||||||||||||||||||||||||
Holder: | Date of Transaction | Security | Prev. Held (5) | In Transaction | % Prev. Iss. Shs. | Total Consid. | Price/Sh | Mkt. Price (3) | Mkt. Price (4) | |||||||||||||||||||
Robert Coviello | November 1, 2005 | Common | 0 | 110,733.00 | n/a | $ | 10,345 | $ | 0.09 | $ | 0.09 | $ | 0.19 | |||||||||||||||
Steven Thuilot | November 10, 2005 | Common | 110,733 | 267,467.00 | 241.54 | % | $ | 25,000 | $ | 0.09 | $ | 0.09 | $ | 0.19 | ||||||||||||||
Ed and Joanne Minder | November 10, 2005 | Common | 378,200 | 107,040.00 | 28.30 | % | $ | 10,000 | $ | 0.09 | $ | 0.09 | $ | 0.19 | ||||||||||||||
Larry Coviello | November 10, 2005 | Common | 485,240 | 110,788.00 | 22.83 | % | $ | 10,345 | $ | 0.09 | $ | 0.09 | $ | 0.19 | ||||||||||||||
Dr. Michael Wayne | November 15, 2005 | Common | 596,028 | 100,301.00 | 16.83 | % | $ | 25,000 | $ | 0.25 | $ | 0.25 | $ | 0.19 | ||||||||||||||
Ed and Joanne Minder | January 18, 2006 | Common | 696,329 | 53,389.00 | 7.67 | % | $ | 5,000 | $ | 0.09 | $ | 0.09 | $ | 0.19 | ||||||||||||||
Larry Coviello | January 18, 2006 | Common | 749,718 | 37,392.00 | 4.99 | % | $ | 3,500 | $ | 0.09 | $ | 0.09 | $ | 0.19 | ||||||||||||||
Robert Coviello | January 18, 2006 | Common | 787,110 | 37,392.00 | 4.75 | % | $ | 3,500 | $ | 0.09 | $ | 0.09 | $ | 0.19 | ||||||||||||||
Steven Thuilot | February 3, 2006 | Common | 824,502 | 64,144.00 | 7.78 | % | $ | 6,000 | $ | 0.09 | $ | 0.09 | $ | 0.19 | ||||||||||||||
Steven Thuilot | March 1, 2006 | Common | 888,646 | 107,041.00 | 12.05 | % | $ | 10,000 | $ | 0.09 | $ | 0.09 | $ | 0.19 | ||||||||||||||
Neal Clay | March 14, 2006 | Common | 995,687 | 107,041.00 | 10.75 | % | $ | 10,000 | $ | 0.09 | $ | 0.09 | $ | 0.19 | ||||||||||||||
Edwit Tironi | March 14, 2006 | Common | 1,102,728 | 160,482.00 | 14.55 | % | $ | 15,000 | $ | 0.09 | $ | 0.09 | $ | 0.19 | ||||||||||||||
Ed and Joanne Minder | March 15, 2006 | Common | 1,263,210 | 107,040.00 | 8.47 | % | $ | 10,000 | $ | 0.09 | $ | 0.09 | $ | 0.19 | ||||||||||||||
Larry Coviello | March 19, 2006 | Common | 1,370,250 | 53,439.00 | 3.90 | % | $ | 5,000 | $ | 0.09 | $ | 0.09 | $ | 0.19 | ||||||||||||||
Larry Coviello | March 19, 2006 | Common | 1,423,689 | 80,240.00 | 5.64 | % | $ | 7,500 | $ | 0.09 | $ | 0.09 | $ | 0.19 | ||||||||||||||
Robert Coviello | March 19, 2006 | Common | 1,503,929 | 80,240.00 | 5.34 | % | $ | 7,500 | $ | 0.09 | $ | 0.09 | $ | 0.19 | ||||||||||||||
Susan and Lambert Dahlin | March 24, 2006 | Common | 1,584,169 | 160,482.00 | 10.13 | % | $ | 15,000 | $ | 0.09 | $ | 0.09 | $ | 0.19 | ||||||||||||||
Joan Pallateri | March 27, 2006 | Common | 1,744,651 | 107,041.00 | 6.14 | % | $ | 10,000 | $ | 0.09 | $ | 0.09 | $ | 0.19 | ||||||||||||||
Prateek Parekh | April 10, 2006 | Common | 1,851,692 | 40,120.00 | 2.17 | % | $ | 10,000 | $ | 0.25 | $ | 0.25 | $ | 0.19 | ||||||||||||||
Goran Avdicevic | April 10, 2006 | Common | 1,891,812 | 100,301.00 | 5.30 | % | $ | 25,000 | $ | 0.25 | $ | 0.25 | $ | 0.19 | ||||||||||||||
Harpreet Anand | April 10, 2006 | Common | 1,992,113 | 64,193.00 | 3.22 | % | $ | 16,000 | $ | 0.25 | $ | 0.25 | $ | 0.19 | ||||||||||||||
Anirban Sen | April 10, 2006 | Common | 2,056,306 | 60,181.00 | 2.93 | % | $ | 15,000 | $ | 0.25 | $ | 0.25 | $ | 0.19 | ||||||||||||||
Steven Thuilot | April 13, 2006 | Common | 2,116,487 | 96,288.00 | 4.55 | % | $ | 9,000 | $ | 0.09 | $ | 0.09 | $ | 0.19 | ||||||||||||||
Joel R. Smart Living Trust | July 7, 2006 | Common | 2,212,775 | 50,151.00 | 2.27 | % | $ | 12,500 | $ | 0.25 | $ | 0.25 | $ | 0.19 | ||||||||||||||
Clarence A. Dahlin Living Trust | July 7, 2006 | Common | 2,262,926 | 50,151.00 | 2.22 | % | $ | 12,500 | $ | 0.25 | $ | 0.25 | $ | 0.19 | ||||||||||||||
GC Advisors | September 20, 2006 | Common | 2,313,077 | 48,145.00 | 2.08 | % | $ | 12,000 | $ | 0.25 | $ | 0.25 | $ | 0.19 | ||||||||||||||
Joel R. Smart Living Trust and Clarence A. Dahlin Living Trust | October 26, 2006 | Common | 2,361,222 | 100,301.00 | 4.25 | % | $ | 25,000 | $ | 0.25 | $ | 0.25 | $ | 0.19 | ||||||||||||||
GC Advisors | January 20, 2007 | Common | 2,461,523 | 32,096.00 | 1.30 | % | $ | 8,000 | $ | 0.25 | $ | 0.25 | $ | 0.19 | ||||||||||||||
Kenneth Olson | April 18, 2007 | Common | 2,493,619 | 100,301.00 | 4.02 | % | $ | 25,000 | $ | 0.25 | $ | 0.25 | $ | 0.19 | ||||||||||||||
Feldstein Management | August 14, 2007 | Common | 2,593,920 | 12,196.00 | 0.47 | % | $ | 3,040 | $ | 0.25 | $ | 0.25 | $ | 0.19 | ||||||||||||||
Dr. David Langer | August 14, 2007 | Common | 2,606,116 | 24,072.00 | 0.92 | % | $ | 6,000 | $ | 0.25 | $ | 0.25 | $ | 0.19 | ||||||||||||||
Vinas & Company, Christopher A. Vinas | August 14, 2007 | Common | 2,630,188 | 16,048.00 | 0.61 | % | (1 | ) | n/a | n/a | $ | 0.19 | ||||||||||||||||
David Salomon | August 15, 2007 | Common | 2,646,236 | 150,000.00 | 5.67 | % | $ | 150,000 | $ | 1.00 | $ | 1.00 | $ | 0.19 | ||||||||||||||
MAC Strategic Advisors | November 15, 2007 | Common | 2,796,236 | 40,000.00 | 1.43 | % | (1 | ) | n/a | n/a | $ | 0.19 | ||||||||||||||||
George Kivotidis | November 15, 2007 | Common | 2,836,236 | 100,000.00 | 3.53 | % | $ | 50,000 | $ | 0.50 | $ | 0.50 | $ | 0.19 | ||||||||||||||
Christopher A. Vinas | January 23, 2008 | Common | 2,936,236 | 263,158.00 | 8.96 | % | $ | 50,000 | $ | 0.19 | $ | 0.19 | $ | 0.19 | ||||||||||||||
Concordia Financial Group | February 15, 2008 | Common | 3,199,394 | 523,747.00 | 16.37 | % | (1 | ) | n/a | n/a | $ | 0.19 | ||||||||||||||||
Sichenzia Ross Friedman Ference et al | February 15, 2008 | Common | 3,723,141 | 523,747.00 | 14.07 | % | (1 | ) | n/a | n/a | $ | 0.19 | ||||||||||||||||
RES Holdings | February 26, 2008 | Common | 4,246,888 | 23,683.00 | 0.56 | % | $ | 4,500 | $ | 0.19 | $ | 0.19 | $ | 0.19 | ||||||||||||||
Michael Bailey | February 26, 2008 | Common | 4,270,571 | 78,947.00 | 1.85 | % | $ | 15,000 | $ | 0.19 | $ | 0.19 | $ | 0.19 | ||||||||||||||
Jay Berkow | February 26, 2008 | Common | 4,349,518 | 52,632.00 | 1.21 | % | $ | 10,000 | $ | 0.19 | $ | 0.19 | $ | 0.19 | ||||||||||||||
Vivek Bhaman | February 26, 2008 | Common | 4,402,150 | 26,316.00 | 0.60 | % | $ | 5,000 | $ | 0.19 | $ | 0.19 | $ | 0.19 | ||||||||||||||
Robert Braumann | February 26, 2008 | Common | 4,428,466 | 26,316.00 | 0.59 | % | $ | 5,000 | $ | 0.19 | $ | 0.19 | $ | 0.19 | ||||||||||||||
John A Bown Jr. | February 26, 2008 | Common | 4,454,782 | 52,632.00 | 1.18 | % | $ | 10,000 | $ | 0.19 | $ | 0.19 | $ | 0.19 | ||||||||||||||
Vincent P Carroll | February 26, 2008 | Common | 4,507,414 | 26,316.00 | 0.58 | % | $ | 5,000 | $ | 0.19 | $ | 0.19 | $ | 0.19 | ||||||||||||||
Robert A Frazier | February 26, 2008 | Common | 4,533,730 | 26,316.00 | 0.58 | % | $ | 5,000 | $ | 0.19 | $ | 0.19 | $ | 0.19 | ||||||||||||||
Martin Keating | February 26, 2008 | Common | 4,560,046 | 26,316.00 | 0.58 | % | $ | 5,000 | $ | 0.19 | $ | 0.19 | $ | 0.19 | ||||||||||||||
Vicor F Keen | February 26, 2008 | Common | 4,586,362 | 78,947.00 | 1.72 | % | $ | 15,000 | $ | 0.19 | $ | 0.19 | $ | 0.19 | ||||||||||||||
Robert M Richards | February 26, 2008 | Common | 4,665,309 | 26,316.00 | 0.56 | % | $ | 5,000 | $ | 0.19 | $ | 0.19 | $ | 0.19 | ||||||||||||||
Joseph Roberts | February 26, 2008 | Common | 4,691,625 | 26,316.00 | 0.56 | % | $ | 5,000 | $ | 0.19 | $ | 0.19 | $ | 0.19 | ||||||||||||||
Thomas Romano | February 26, 2008 | Common | 4,717,941 | 26,316.00 | 0.56 | % | $ | 5,000 | $ | 0.19 | $ | 0.19 | $ | 0.19 | ||||||||||||||
Edward F Sager, Jr. | February 26, 2008 | Common | 4,744,257 | 26,316.00 | 0.55 | % | $ | 5,000 | $ | 0.19 | $ | 0.19 | $ | 0.19 | ||||||||||||||
Mark Staples | February 26, 2008 | Common | 4,770,573 | 26,316.00 | 0.55 | % | $ | 5,000 | $ | 0.19 | $ | 0.19 | $ | 0.19 | ||||||||||||||
Neil Strauss | February 26, 2008 | Common | 4,796,889 | 52,632.00 | 1.10 | % | $ | 10,000 | $ | 0.19 | $ | 0.19 | $ | 0.19 | ||||||||||||||
Terry Tyson | February 26, 2008 | Common | 4,849,521 | 52,632.00 | 1.09 | % | $ | 10,000 | $ | 0.19 | $ | 0.19 | $ | 0.19 | ||||||||||||||
Geoffrey C Walker | February 26, 2008 | Common | 4,902,153 | 26,316.00 | 0.54 | % | $ | 5,000 | $ | 0.19 | $ | 0.19 | $ | 0.19 | ||||||||||||||
James Ward | February 26, 2008 | Common | 4,928,469 | 26,316.00 | 0.53 | % | $ | 5,000 | $ | 0.19 | $ | 0.19 | $ | 0.19 | ||||||||||||||
Jay S Weiss | February 26, 2008 | Common | 4,954,785 | 52,632.00 | 1.06 | % | $ | 10,000 | $ | 0.19 | $ | 0.19 | $ | 0.19 | ||||||||||||||
David Salomon | February 14,2008 | Common | 5,007,417 | 1,211,111.00 | 24.19 | % | (2 | ) | n/a | n/a | $ | 0.19 | ||||||||||||||||
George Kivotidis | March 10.2008 | Common | 6,218,528 | 263,158.00 | 4.23 | % | $ | 50,000 | $ | 0.19 | $ | 0.19 | $ | 0.19 | ||||||||||||||
Concordia Financial Group | April 15, 2008 | Common | 6,481,686 | 523,747.00 | 8.08 | % | (1 | ) | n/a | n/a | $ | 0.19 | ||||||||||||||||
RES Holdings | April 15, 2008 | Common | 7,005,433 | 23,683.00 | 0.34 | % | $ | 4,500 | $ | 0.19 | $ | 0.19 | $ | 0.19 |
(1) Issued in consideration of services |
(2) Issued on conversion of Debenture and as additional consideration to induce conversion |
(3) No established market price at the time, therefore, sale is assumed to be at market |
(4) No established market, therefore market price is assumed to be the price of the last share sale |
(5) Excludes shares held by Kenneth Coviello, Heather Jensen and The Sawmill Trust |
On April 15, 2008, Fountainhead Capital Partners Limited assigned its interest in such investment to Fountainhead Capital Management Limited.
44
45
sale of the shares of common stock in the applicable state or the applicable state qualifies the common stock for sale in that state, or the applicable state exempts the common stock from the registration or qualification requirement.
On April 15, 2008, Fountainhead Capital Partners Limited assigned its interest in the Fountainhead Bridge Loan Debenture to Fountainhead Capital Management Limited.
On April 15, 2008, Fountainhead Capital Partners Limited assigned its interest in the Fountainhead Bridge Loan Debenture to Fountainhead Capital Management Limited.
46
On April 15, 2008, Fountainhead Capital Partners Limited assigned Warrants to purchase 60,445 shares of the Company’s common stock to La Pergola Investments Limited.
47
48
49
F-1
F-2
December 31, | ||||||||
2007 | 2006 | |||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 15,739 | $ | 112,992 | ||||
Accounts receivable | 2,565 | — | ||||||
Total current assets | 18,304 | 112,992 | ||||||
Other assets: | ||||||||
Patents, net of accumulated amortization of $9,324 and $4,037 | 22,559 | 21,535 | ||||||
Website, net of accumulated amortization of $2,835 and $1,153 | 6,214 | 7,087 | ||||||
Organization costs, net of accumulated amortization of $38 and $0 | 1,084 | |||||||
Total other assets | 29,857 | 28,622 | ||||||
Total assets | $ | 48,161 | $ | 141,614 | ||||
LIABILITIES AND STOCKHOLDERS’ (MEMBERS’) DEFICIENCY | ||||||||
Current liabilities: | ||||||||
Note payable — member | $ | — | $ | 10,500 | ||||
Accounts payable | 300,994 | 280,900 | ||||||
Accrued liabilities | 264 | 4,317 | ||||||
Total current liabilities | 301,258 | 295,717 | ||||||
Long-term debt | 439,500 | 172,500 | ||||||
Stockholders’ (members’) deficiency | (692,597 | ) | (326,603 | ) | ||||
Total liabilities and stockholders’ (members’) deficiency | $ | 48,161 | $ | 141,614 |
Cash and cash equivalents $ 15,739 $ 112,992 Accounts receivable 2,565 - Patents, net of accumulated amortization of $9,324 and $4,037 22,559 21,535 Website, net of accumulated amortization of $2,835 and $1,153 6,214 7,087 Note payable- member $ - $ 10,500 Accounts payable 285,216 280,900 Accrued interest 15,778 - Accrued liabilities 264 4,317 Preferred stock, $0.001 par value, 10,000,000 shares authorized, None issued and outstanding - Note5 Common stock, $0.001 par value, 100,000,000 shares authorized, 18,289,999 shares issued and outstanding at December 31, 2007 18,290 Note5 Additional paid-in capital 569,085 Note5 Accumulated deficit (1,281,056 ) Note5
F-3
Year Ended December 31, 2007 | Year Ended December 31, 2006 | From Inception (June 5, 2005) to December 31, 2007 | ||||||||||
Revenue | $ | 2,565 | $ | — | $ | 2,565 | ||||||
Operating expenses: | ||||||||||||
Research and development | 5,885 | 158,823 | 267,830 | |||||||||
General and administrative | 454,071 | 353,136 | 889,473 | |||||||||
Interest expense, net | 14,879 | — | 14,879 | |||||||||
Total operating expenses | 474,835 | 511,959 | 1,174,747 | |||||||||
Operating loss | (472,270 | ) | (511,959 | ) | (1,172,182 | ) | ||||||
Basic and diluted loss per share | $ | (0.03 | ) | Note 5 | Note 5 | |||||||
Weighted average number of shares outstanding — basic and diluted | 18,197,352 | Note 5 | Note 5 |
Year Ended December 31, 2007 | Year Ended December 31, 2006 | From Inception (June 5, 2005) to December 31, 2007 | ||||||||
REVENUE | $ | 2,565 | $ | - | $ | 2,565 | ||||
Operating expenses: | ||||||||||
Research and development | 5,885 | 158,823 | 267,830 | |||||||
General and administrative | 472,088 | 443,993 | 1,000,912 | |||||||
Interest expense, net | 14,879 | - | 14,879 | |||||||
Total operating expenses | 492,852 | 602,816 | 1,283,621 | |||||||
Operating loss | $ | (490,287 | ) | $ | (602,816 | ) | $ | (1,281,056 | ) | |
Basic and diluted loss per share | $ | (0.03 | ) | Note 5 | Note5 | |||||
Weighted average number of shares outstanding- basic and diluted | 18,197,352 | Note 5 | Note 5 |
F-4
Stockholders’ (Members’) Capital | Common stock | Additional Paid in Capital | Accumulated Deficit | Total | ||||||||||||||||||||
Shares | Amount | |||||||||||||||||||||||
Balance January 1, 2006 | $ | 101,690 | — | — | — | $ | (187,953 | ) | $ | (86,263 | ) | |||||||||||||
Net loss | — | — | — | — | (511,959 | ) | (511,959 | ) | ||||||||||||||||
Members' contributions | 245,000 | — | — | — | — | 245,000 | ||||||||||||||||||
Warrants issued for services | — | — | — | 26,619 | — | 26,619 | ||||||||||||||||||
Balance December 31, 2006 | 346,690 | — | — | 26,619 | (699,912 | ) | (326,603 | ) | ||||||||||||||||
Net loss | — | — | — | — | (472,270 | ) | (472,270 | ) | ||||||||||||||||
Members' contributions (before change in entity form) | 96,040 | — | — | — | — | 96,040 | ||||||||||||||||||
Conversion of members' interests to common stock | (442,730 | ) | 18,900,000 | — | 442,730 | — | — | |||||||||||||||||
Warrants issued for services | — | — | — | 10,236 | — | 10,236 | ||||||||||||||||||
— | 18,900,000 | — | $ | 479,585 | $ | (1,172,182 | ) | $ | (692,597 | ) |
Additional | |||||||||||||||||||
Members’ | Common stock | Paid in | Accumulated | ||||||||||||||||
Capital | Shares | Amount | Capital | Deficit | Total | ||||||||||||||
Balance January 1, 2006 | $ | 101,690 | ($187,953 | ) | ($86,263 | ) | |||||||||||||
Net loss, period ended Dec. 31, 2006 | (602,816 | ) | (602,816 | ) | |||||||||||||||
Members' contributions | 245,000 | 245,000 | |||||||||||||||||
Value of rights, options and warrants | 117,476 | 117,476 | |||||||||||||||||
Balance December 31, 2006 | 346,690 | 117,476 | (790,769 | ) | ($326,603 | ) | |||||||||||||
Members' contributions | 46,040 | 46,040 | |||||||||||||||||
Conversion of members' interests to | |||||||||||||||||||
common stock | (392,730 | ) | 17,999,999 | 18,000 | 374,730 | - | |||||||||||||
Sale of common stock | 250,000 | 250 | 49,750 | 50,000 | |||||||||||||||
Stock issued for services | 40,000 | 40 | 9,560 | 9,600 | |||||||||||||||
Value of rights and options | 17,569 | 17,569 | |||||||||||||||||
Net loss, Dec. 31, 2007 | (490,287 | ) | (490,287 | ) | |||||||||||||||
Balance December 31, 2007 | - | 18,289,999 | 18,290 | 569,085 | (1,281,056 | ) | (693,681 | ) |
F-5
Year Ended December 31, 2007 | Year Ended December 31, 2006 | From Inception (June 5, 2005) to December 31, 2007 | ||||||||||
Operating activities: | ||||||||||||
Net loss | $ | (472,270 | ) | $ | (511,959 | ) | $ | (1,135,327 | ) | |||
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||||||||||||
Depreciation and amortization | 7,007 | 4,094 | 12,197 | |||||||||
Warrants issued for services | 10,236 | 26,619 | 36,855 | |||||||||
Changes in operating assets and liabilities: | ||||||||||||
Accounts receivable | (2,565 | ) | — | (2,565 | ) | |||||||
Accounts payable | 20,094 | 187,966 | 300,994 | |||||||||
Accrued liabilities | (4,053 | ) | 627 | 264 | ||||||||
Net cash used in operating activities | (441,551 | ) | (292,653 | ) | (824,437 | ) | ||||||
Investing activities: | ||||||||||||
Acquisition of patents | (6,311 | ) | (14,233 | ) | (31,883 | ) | ||||||
Acquisition of website | (809 | ) | (8,240 | ) | (9,049 | ) | ||||||
Capitalized organizational costs | (1,122 | ) | — | (1,122 | ) | |||||||
Net cash used in investing activities | (8,242 | ) | (22,473 | ) | (42,054 | ) | ||||||
Financing activities: | ||||||||||||
Repayment of stockholder (member) loan | (10,500 | ) | — | (10,500 | ) | |||||||
Proceeds from stockholders’ (members’) capital contributions | 96,040 | 245,000 | 442,730 | |||||||||
Proceeds from issuance of long term debt | 267,000 | 173,000 | 450,000 | |||||||||
Net cash provided by financing activities | 352,540 | 418,000 | 882,230 | |||||||||
Net increase (decrease) in cash and cash equivalents | (97,253 | ) | 102,874 | 15,739 | ||||||||
Cash and cash equivalents — beginning of period | 112,992 | 10,118 | — | |||||||||
Cash and cash equivalents — end of period | $ | 15,739 | $ | 112,992 | $ | 15,739 | ||||||
Supplemental disclosures of cash flow information: | ||||||||||||
Cash paid during the year for interest | $ | — |
Year Ended December 31, 2007 | Year Ended December 31, 2006 | From Inception (June 5, 2005) to December 31, 2007 | ||||||||
Operating activities: | ||||||||||
Net loss | $ | (490,287 | ) | $ | (602,816 | ) | $ | (1,281.056 | ) | |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||||||||||
Depreciation and amortization | 6,969 | 4,094 | 12,159 | |||||||
Non-cash compensation | 27,169 | 117,476 | 144,645 | |||||||
Changes in operating assets and liabilities: | ||||||||||
Accounts receivable | (2,565 | ) | - | (2,565 | ) | |||||
Accounts payable | 20,094 | 187,966 | 300,994 | |||||||
Accrued liabilities | (4,053 | ) | 627 | 264 | ||||||
Net cash used in operating activities | (442,673 | ) | (292,653 | ) | (825,559 | ) | ||||
Investing activities: | ||||||||||
Acquisition of patents | (6,311 | ) | (14,233 | ) | (31,883 | ) | ||||
Acquisition of website | (809 | ) | (8,240 | ) | (9,049 | ) | ||||
Net cash used in investing activities | (7,120 | ) | (22,473 | ) | (40,932 | ) | ||||
Financing activities: | ||||||||||
Repayment of stockholder (member) loan | (10,500 | ) | - | (10,500 | ) | |||||
Proceeds from stockholders’ (members’) capital contributions | 96,040 | 245,000 | 442,730 | |||||||
Proceeds from issuance of long term debt | 267,000 | 173,000 | 450,000 | |||||||
Net cash provided by financing activities | 352,540 | 418,000 | 882,230 | |||||||
Net increase (decrease) in cash and cash equivalents | (97,253 | ) | 102,874 | 15,739 | ||||||
Cash and cash equivalents-beginning of period | 112,992 | 10,118 | - | |||||||
Cash and cash equivalents-end of period | $ | 15,739 | $ | 112,992 | $ | 15,739 | ||||
Supplemental disclosures of cash flow information: | ||||||||||
Cash paid during the year for interest | $ | - |
F-6
1 | SIGNIFICANT ACCOUNTING POLICIES |
description
The Company considers all highly liquid debt investments with original maturities of three months or less when purchased to be cash equivalents. The carrying amounts approximate fair market value because of the short maturity.
The Company maintains cash balances at various financial institutions. Accounts at each institution are insured by the Federal Deposit Insurance Corporation up to $100,000. The Company's accounts at these institutions may, at times, exceed the Federally insured limits. The Company has not experienced any losses in such accounts.
F-7
The Company considers all highly liquid debt investments with original maturities of three months or less when purchased to be cash equivalents. The carrying amounts approximate fair market value because of the short maturity. |
The Company maintains cash balances at various financial institutions. Accounts at each institution are insured by the Federal Deposit Insurance Corporation up to $100,000. The Company's accounts at these institutions may, at times, exceed the Federally insured limits. The Company has not experienced any losses in such accounts. |
1 | SIGNIFICANT ACCOUNTING POLICIES (CON’T) |
2 | NOTE PAYABLE- STOCKHOLDER (MEMBER) |
The
3 | LONG-TERM DEBT |
consists of:
Debenture, payable to GC Advisors, with interest at 12%, | ||||
Due the earlier of January 9, 2009, or five business days | ||||
Following the receipt of at least $500,000 in cash from any | ||||
Form of equity or debt financing | $ | 17,000 | ||
Loan, payable to Optimus Services, LLC, with interest at the | ||||
Prime interest rate as reported in the Wall Street Journal | ||||
Payable $20,500 per month | 100,000 | |||
Convertible Promissory Note, payable to David Salomon, | ||||
with principal balance due August 28, 2008. | ||||
Company has the right to convert all of the principal amount of | ||||
This note, prior to the due date, into fully paid and nonassessable | ||||
Common shares of the Company. This option was exercised | ||||
on February 15, 2008 | 150,000 | |||
Convertible Bridge loan debenture, in the amount of $172,500 payable | ||||
To Fountainhead Capital Partners Limited, with interest at the | ||||
Applicable Federal Rate as defined in sec. 1274 (d) of the Internal | ||||
Revenue Code, due June 21, 2007. The due date of this debenture has been extended to February 15, 2009. | 172,500 | |||
$ | 439,500 |
4. | OPTIONS, WARRANTS AND CONVERTIBLE SECURITIES |
4. | OPTIONS, WARRANTS AND CONVERTIBLE SECURITIES (CON’T) |
two advisors which would result in the issuance of an additional 324,960 shares of the Company’s common stock if fully exercised. The foregoing options and convertible securities, if fully exercised or converted, would result, in the aggregate, to the issuance of an additional 1,436,071 shares of the Company’s common stock. Utilizing a Black Scholes valuation model, the Company estimates the fair value of such options and rights to be $17,569 and has recorded such amount as an expense in the year ended December 31, 2007.
5. | NET LOSS PER SHARE |
F-8
5. | NET LOSS PER SHARE (CON’T) |
Date of | Conv/Exer | Value at | B/S Value | |||||||||||||||||||
Holder's Name | Issuance | Shares | Price | Expiration | Grant | Per Share | B/S Value | |||||||||||||||
2006: | ||||||||||||||||||||||
Convertible Debentures: | ||||||||||||||||||||||
Fountainhead Capital Partners Ltd. | 12/14/2006 | 1,876,300 | $ | 0.10 | 12/31/2008 | $ | 0.10 | $ | 0.0122 | 22,891 | ||||||||||||
Warrants and Options: | ||||||||||||||||||||||
Fountainhead Capital Partners Ltd. | 12/14/2006 | 805,931 | $ | 0.50 | 12/14/2011 | $ | 0.14 | $ | 0.0001 | 81 | ||||||||||||
GC Advisors | 1/9/2006 | 192,576 | $ | 0.14 | 1/9/2009 | $ | 0.14 | $ | 0.0140 | 2,696 | ||||||||||||
1/9/2006 | 192,576 | $ | 0.14 | 1/9/2010 | $ | 0.14 | $ | 0.0175 | 3,370 | |||||||||||||
Dr. Kornel | 1/10/2006 | 240,720 | $ | 0.25 | 1/10/2011 | $ | 0.25 | $ | 0.0361 | 8,690 | ||||||||||||
Dr. Langer | 12/11/2006 | 320,960 | $ | 0.25 | 12/11/2011 | $ | 0.25 | $ | 0.0364 | 11,683 | ||||||||||||
Option Agreement: | ||||||||||||||||||||||
Fountainhead Capital Partners Ltd.-option | 12/14/2006 | 5,652,954 | $ | 0.33 | 12/14/2009 | $ | 0.25 | $ | 0.0114 | 64,444 | ||||||||||||
Fountainhead Capital Partners Ltd.-warrant | 12/14/2006 | 3,017,409 | $ | 0.44 | 12/14/2009 | $ | 0.25 | $ | 0.0012 | 3,621 | ||||||||||||
2006 Total | 12,299,426 | $ | 117,476 | |||||||||||||||||||
2007: | ||||||||||||||||||||||
Convertible Debentures: | ||||||||||||||||||||||
David Salomon | 8/28/2006 | 1,111,111 | $ | 0.14 | 8/28/2008 | $ | 0.14 | $ | 0.0066 | 7,333 | ||||||||||||
Warrants and Options: | ||||||||||||||||||||||
Martin Magida | 9/1/2007 | 160,480 | $ | 0.24 | 9/1/2012 | $ | 0.24 | $ | 0.0313 | 5,023 | ||||||||||||
George Kivotidis | 11/6/2007 | 4,000 | $ | 0.50 | 11/6/2010 | $ | 0.50 | $ | 0.0476 | 190 | ||||||||||||
Robert Guinta | 9/1/2007 | 160,480 | $ | 0.24 | 9/1/2012 | $ | 0.24 | $ | 0.0313 | 5,023 | ||||||||||||
2007 Total | 1,436,071 | $ | 17,569 | |||||||||||||||||||
2006-2007 Total | 13,735,497 | $ | 135,045 |
5. | NET LOSS PER SHARE (CON’T) |
2007
6 | COMMITMENTS AND CONTINGENCIES |
F-9
7. | RESTATEMENT OF FINANCIAL DATA AS OF DECEMBER 31, 2007 |
RECONCILIATION OF BALANCE SHEET | ||||||||||
As Reported | Adjustments | As Restated | ||||||||
Assets: | ||||||||||
Current assets: | ||||||||||
Cash | $ | 15,739 | 0 | $ | 15,739 | |||||
Accounts receivable | 2,565 | 0 | 2,565 | |||||||
Total current assets | 18,304 | 0 | 18,304 | |||||||
Other assets | 29,857 | (1,084 | ) | 28,773 | ||||||
Total assets | $ | 48,161 | $ | (1,084 | ) | $ | 47,077 | |||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||||
Current liabilities: | ||||||||||
Accounts payable and accrued expenses | $ | 301,258 | 0 | 301,258 | ||||||
Total current liabilities | 301,258 | 0 | 301,258 | |||||||
Long term debt | 439,500 | 439,500 | ||||||||
Stockholders' deficiency: | (692,597 | ) | ( 1,084 | ) | (693,681 | ) | ||||
Total liabilities and stockholders' equity | $ | 48,161 | $ | (1,084 | ) | $ | 47,077 |
7. | RESTATEMENT OF FINANCIAL DATA AS OF DECEMBER 31, 2007 (CON’T) |
As Reported | Adjustments | As Restated | ||||||||
Sales | $ | 0 | $ | 0 | $ | 0 | ||||
Costs and expenses | ||||||||||
Research and development | $ | 158,823 | $ | -0- | $ | 158,823 | ||||
Selling General and administrative | $ | 326,517 | $ | 117,476 | $ | 443,993 | ||||
Interest | $ | 0 | $ | 0 | $ | 0 | ||||
Total cost and expenses | $ | (485,340 | ) | $ | (117,476 | ) | $ | (602,816 | ) | |
Net Loss | $ | (485,340 | ) | $ | (117.476 | ) | $ | ( 602,816 | ) | |
Basic Loss per share | Note 5 | Note 5 | ||||||||
Weighted average number of outstanding shares | Note 5 | Note 5 |
7. | RESTATEMENT OF FINANCIAL DATA AS OF DECEMBER 31, 2007 (CON’T) |
As Reported | Adjustments | As Restated | ||||||||
Sales | $ | 2,565 | $ | 0 | $ | 2,565 | ||||
Costs and expenses | ||||||||||
Research and development | $ | 5,885 | $ | 0 | $ | 5,885 | ||||
Selling General and administrative | $ | 454,071 | $ | 18,017 | $ | 472,088 | ||||
Interest | $ | 14,879 | $ | 0 | $ | 14 879 | ||||
Total cost and expenses | $ | (474,835 | ) | $ | 18,017 | $ | (492,852 | ) | ||
Net Loss | $ | (472,270 | ) | $ | 18,017 | $ | ( 490,287 | ) | ||
Basic Loss per share | $ | (0.03 | ) | $ | 0.00 | $ | (0.03 | ) | ||
Weighted average number of outstanding shares | 18,197,352 | — | 18,197,352 |
March 31, 2008 (unaudited) | Dec. 31, 2007 (audited) | |||||||||
ASSETS | ||||||||||
Current assets: | ||||||||||
Cash and cash equivalents | $ | 481,824 | $ | 15,739 | ||||||
Accounts receivable | -0- | 2,565 | ||||||||
Deposits | 24,660 | -0- | ||||||||
Total current assets | 506,484 | 18,304 | ||||||||
Other assets: | ||||||||||
Patents, net of accumulated amortization of $11,315 and $9,324 at March 31, 2008 and December 31, 2007, respectively | 36,433 | 22,559 | ||||||||
Website, net of accumulated amortization of $3,287 and $2,835 at March 31, 2008 and December 31, 2007, respectively | 5,761 | 6,214 | ||||||||
Security deposit | 834 | -0- | ||||||||
Total other assets | 43,028 | 28,773 | ||||||||
Total assets | $ | 549,512 | $ | 47,077 | ||||||
LIABILITIES AND STOCKHOLDERS’ DEFICIENCY | ||||||||||
Current liabilities: | ||||||||||
Accounts payable | $ | 194,121 | $ | 285,216 | ||||||
Accrued interest payable | 23,472 | 15,778 | ||||||||
Accrued salaries payable | 21,219 | -0- | ||||||||
Accrued payroll taxes payable | 7,557 | -0- | ||||||||
Accrued expenses | 3,750 | 264 | ||||||||
Total current liabilities | 250,119 | 301,258 | ||||||||
Long-term liabilities | ||||||||||
Long-term debt | 890,500 | 439,500 | ||||||||
Stockholders’ (members) deficiency: | ||||||||||
Preferred stock, $0.001 par value, 10,000,000 shares authorized, None issued and outstanding | - | - | ||||||||
Common stock, $0.001 par value, 100,000,000 shares authorized, 21,835,449 and 18,289,999 shares issued and outstanding at March 31, 2008 and December 31, 2007, respectively | 21,835 | 18,290 | ||||||||
Additional paid-in capital | 1,624,211 | 569,085 | ||||||||
Accumulated deficit | (2,237,153 | ) | (1,281,056 | ) | ||||||
Total Stockholders’ (members’ deficiency | (591,107 | ) | (693,681) | |||||||
Total liabilities and stockholders’ deficiency | $ | 549,512 | $ | 47,077 |
2008 | 2007 | From Inception (June 5, 2005) to March 31, 2008 | ||||||||
(unaudited) | (unaudited) | |||||||||
REVENUE | $ | — | $ | — | 2,565 | |||||
Operating expenses: | ||||||||||
Research and development | 6,333 | 4,777 | 274,163 | |||||||
General and administrative | 943,774 | 96,237 | 1,944,686 | |||||||
Interest expense, net | 5,990 | 1,856 | 20,869 | |||||||
Total operating expenses | 956,097 | 102,870 | 2,239,718 | |||||||
Operating loss | (956,097 | ) | (102,870 | ) | (2,237,153 | ) | ||||
Basic and diluted loss per share | (.05 | ) | Note 6 | |||||||
Weighted average number of shares outstanding – basic and diluted | 19,860,118 | Note 6 |
March 31, | From Inception | |||||||||
2008 (unaudited) | 2007 (unaudited) | (June 5, 2005) to March 31, 2008 | ||||||||
Operating activities: | ||||||||||
Net loss | $ | (956,097 | ) | $ | (102,870 | ) | (2,237,153 | ) | ||
Adjustments to reconcile net loss to net cash provided by (used in) operating activities | ||||||||||
Non-cash Compensation expense | 668,671 | -0- | 813,316 | |||||||
Depreciation expense | 2,443 | 1,690 | 14,602 | |||||||
Changes in operating assets and liabilities: | ||||||||||
Accounts receivable | 2,565 | — | — | |||||||
Deposits | (24,660 | ) | — | (24,660 | ) | |||||
Accounts payable | (91,094 | ) | (11,227 | ) | 209,900 | |||||
Accrued interest payable | 7,694 | -0- | 7,694 | |||||||
Accrued salaries payable | 21,219 | -0- | 21,219 | |||||||
Accrued payroll liabilities | 7,293 | (980 | ) | 7,293 | ||||||
Accrued expenses | 3,750 | -0- | 4,014 | |||||||
Net cash used in operating activities | (358,216 | ) | (113,387 | ) | (1,183,775 | ) | ||||
Investing activities: | ||||||||||
Acquisition of patents | (15,865 | ) | (55 | ) | (47,748 | ) | ||||
Acquisition of Website | (9,049 | ) | ||||||||
Cash paid for security deposit | (834 | ) | — | (834 | ) | |||||
Net cash used in investing activities | (16,699 | ) | (55 | ) | (57,631 | ) | ||||
Financial activities | ||||||||||
Repayment of long-term debt | (49,000 | ) | (5,000 | ) | (49,000 | ) | ||||
Repayment of stock holder loan | (10,500 | ) | ||||||||
Proceeds from stockholders’ (members’) capital contributions | 240,000 | 25,000 | 682,730 | |||||||
Proceeds from issuance of long-term debt | 650,000 | — | 1,100,000 | |||||||
Net cash provided by financing activities | 841,000 | 20,000 | 1,723,230 | |||||||
Net increase in cash and cash equivalents | 466,085 | (93,442 | ) | 481,824 | ||||||
Cash and cash equivalents-beginning of period | 15,739 | 112,992 | 15,739 | |||||||
Cash and cash equivalents-end of period | $ | 481,824 | $ | 19,550 | 497,563 | |||||
Supplemental disclosures of cash flow information | $ | -0- | $ | -0- | $ | -0- | ||||
Cash paid during the year for interest | ||||||||||
Noncash investing and financing activities: | ||||||||||
Additional common stock was issued upon the conversion of $150,000 of long-term debt. |
1 | ORGANIZATION AND DESCRIPTION OF BUSINESS |
2. | SIGNIFICANT ACCOUNTING POLICIES |
2. | SIGNIFICANT ACCOUNTING POLICIES (CON’T) |
The Company considers all highly liquid debt investments with original maturities of three months or less when purchased to be cash equivalents. The carrying amounts approximate fair market value because of the short maturity. |
The Company maintains cash balances at various financial institutions. Accounts at each institution are insured by the Federal Deposit Insurance Corporation up to $100,000. The Company's accounts at these institutions may, at times, exceed the Federally insured limits. Cash and cash equivalents exceeding federally insured limits are approximately $381,824 and $0 at March 31, 2008 and 2007. |
2. | SIGNIFICANT ACCOUNTING POLICIES (CON’T) |
3 | LONG-TERM DEBT |
March 31, 2008 | December 31, 2007 | ||||||
Debenture, payable to GC Advisors, with interest at 12%, | |||||||
Due the earlier of January 9, 2009, or five business days | |||||||
Following the receipt of at least $500,000 in cash from any | |||||||
Form of equity or debt financing | $ | 9,000 | $ | 17,000 | |||
Loan, payable to Optimus Services, LLC, with interest at the | |||||||
Prime interest rate as reported in the Wall Street Journal | |||||||
Payable $20,500 per month | 59,000 | 100,000 | |||||
Convertible Promissory Note, payable to David Salomon, | |||||||
with principal balance due August 28, 2008 | |||||||
Company has the right to convert all of the principal amount of | |||||||
This note, prior to the due date, into fully paid and nonassessable | |||||||
Common shares of the Company. This option was exercised | |||||||
on February 15, 2008 | -0- | 150,000 | |||||
Bridge loan debenture, in the amount of $172,500. payable to | |||||||
Fountainhead Capital Partners Limited, with interest at the | |||||||
Applicable Federal Rate as defined in sec. 1274 (d) of the Internal | |||||||
Revenue Code, due June 21, 2007. The due date of this debenture has been extended to February 15, 2009. | 172,500 | 172,500 | |||||
6% Convertible Debenture payable to Fountainhead Capital Partners Limited, with interest at 6% per annum, due February 15, 2009. The Holder is entitled to convert all Or any amount of the principal face amount of the debenture then outstanding into shares of common stock of the Company at the conversion price of $0.1230 per share, subject to adjustment | 150,000 | -0- | |||||
6% Convertible Debenture, payable to Regent Private Capital, LLC, with | |||||||
Interest at 6% per annum, due on or before February 15, 2009. The | |||||||
Holder is entitled to convert all or any amount of the principal face | |||||||
amount of the debenture then outstanding into shares of common stock | |||||||
Of the Company at the Conversion price of $0.1230 per share, subject to adjustment. | 500,000 | -0- | |||||
Total | $ | 890,500 | $ | 439,500 |
4 | ISSUANCE OF COMMON SHARES |
5 | OPTIONS, WARRANTS AND CONVERTIBLE SECURITIES |
6 | NET LOSS PER SHARE |
6 | NET LOSS PER SHARE (CON’T) |
7 | COMMITMENTS AND CONTINGENCIES |
SEC Registration Fee | $ | 87 | ||
Printing Expenses | $ | — | ||
Legal Fees and Expenses | $ | 55,000 | ||
Accountants’ Fees and Expenses | $ | 30,000 | ||
Blue Sky Fees and Expenses | $ | 2,000 | ||
Transfer Agent’ Fees | $ | — | ||
Miscellaneous Expenses | $ | — | ||
Total | $ | 87,087 |
II-1
policy as expressed in the Securities Act and is therefore unenforceable. In the event a claim for indemnification against such liabilities (other than the our payment of expenses incurred or paid by our director, officer or controlling person 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, we will, unless in the opinion of our counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question of whether such indemnification by us is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.
Name of Purchaser (Selling Stockholder) | Date of Sale | Title of Security | Amount of Securities Sold | Consideration | ||||
Kenneth Coviello | September 5, 2005 | Common Stock | 5,117,922 | $7,000 | ||||
Heather N. Jensen | September 5, 2005 | Common Stock | 5,117,922 | $7,000 | ||||
Sawmill Trust c/o Mitchell Greene, Robinson Brog Greene | September 5, 2005 | Common Stock | 5,117,922 | $7,000 | ||||
Steven Thuilot | November 10, 2005 February 3, 2006 March 1, 2006 April 13, 2006 | Common Stock | 534,939 | $50,000 | ||||
Dr. Michael Wayne | November 15, 2005 | Common Stock | 100,301 | $25,000 | ||||
Ed and Joanne Minder | November 10, 2005 January 18, 2006 March 15, 2006 | Common Stock | 267,469 | $25,000 | ||||
Larry Coviello | November 10,2005 January 18, 2006 March 19, 2006 | Common Stock | 281,859 | $26,345 | ||||
Robert Coviello | November 1, 2005 January 18, 2006 March 19, 2006 | Common Stock | 228,365 | $21,345 | ||||
Neal Clay | March 14, 2006 | Common Stock | 107,041 | $10,000 | ||||
Joan Pallateri | March 27, 2006 | Common Stock | 107,041 | $10,000 | ||||
Edwin Tironi | March 14, 2006 | Common Stock | 160,482 | $15,000 | ||||
Susan and Lambert Dahlin | March 24, 2006 | Common Stock | 160,482 | $15,000 | ||||
Prateek Parekh | April 10, 2006 | Common Stock | 40,120 | $10,000 | ||||
Goran Avdicevic | April 10, 2006 | Common Stock | 100,301 | $25,000 | ||||
Harpreet Anand | April 10, 2006 | Common Stock | 64,193 | $16,000 | ||||
Anirban Sen | April 10, 2006 | Common Stock | 60,181 | $15,000 | ||||
Joel R. Smart Living Trust | July 7, 2006 | Common Stock | 50,151 | $12,500 | ||||
Clarence A. Dahlin Living Trust | July 7, 2006 | Common Stock | 50,151 | $12,500 | ||||
Joel R. Smart Living Trust and Clarence A. Dahlin Living Trust | October 26, 2006 | Common Stock | 100,301 | $25,000 |
II-2
Name of Purchaser (Selling Stockholder) | Date of Sale | Title of Security | Amount of Securities Sold | Consideration | |||||
Kenneth Coviello | September 5, 2005 | Common Stock | 5,117,922 | $ | 7,000 | ||||
Heather N. Jensen | September 5, 2005 | Common Stock | 5,117,922 | $ | 7,000 | ||||
Sawmill Trust c/o Mitchell Greene, Robinson Brog Greene | September 5, 2005 | Common Stock | 5,117,922 | $ | 7,000 | ||||
Steven Thuilot | November 10, 2005 February 3, 2006 March 1, 2006 April 13, 2006 | Common Stock | 534,939 | $ | 50,000 | ||||
Dr. Michael Wayne | November 15, 2005 | Common Stock | 100,301 | $ | 25,000 | ||||
Ed and Joanne Minder | November 10, 2005 January 18, 2006 March 15, 2006 | Common Stock | 267,469 | $ | 25,000 | ||||
Larry Coviello | November 10,2005 January 18, 2006 March 19, 2006 | Common Stock | 281,859 | $ | 26,345 | ||||
Robert Coviello | November 1, 2005 January 18, 2006 March 19, 2006 | Common Stock | 228,365 | $ | 21,345 | ||||
Neal Clay | March 14, 2006 | Common Stock | 107,041 | $ | 10,000 | ||||
Joan Pallateri | March 27, 2006 | Common Stock | 107,041 | $ | 10,000 | ||||
Edwin Tironi | March 14, 2006 | Common Stock | 160,482 | $ | 15,000 | ||||
Susan and Lambert Dahlin | March 24, 2006 | Common Stock | 160,482 | $ | 15,000 | ||||
Prateek Parekh | April 10, 2006 | Common Stock | 40,120 | $ | 10,000 | ||||
Goran Avdicevic | April 10, 2006 | Common Stock | 100,301 | $ | 25,000 | ||||
Harpreet Anand | April 10, 2006 | Common Stock | 64,193 | $ | 16,000 | ||||
Anirban Sen | April 10, 2006 | Common Stock | 60,181 | $ | 15,000 | ||||
Joel R. Smart Living Trust | July 7, 2006 | Common Stock | 50,151 | $ | 12,500 | ||||
Clarence A. Dahlin Living Trust | July 7, 2006 | Common Stock | 50,151 | $ | 12,500 | ||||
Joel R. Smart Living Trust and Clarence A. Dahlin Living Trust | October 26, 2006 | Common Stock | 100,301 | $ | 25,000 |
Name of Purchaser (Selling Stockholder) | Date of Sale | Title of Security | Amount of Securities Sold | Consideration | ||||
GC Advisors | September 20, 2006 January 20, 2007 | Common Stock | 80,241 | Professional Services | ||||
Kenneth Olson | April 18, 2007 | Common Stock | 100,301 | $25,000 | ||||
Feldstein Management | August 14, 2007 | Common Stock | 12,197 | $3,040 | ||||
Dr. David Langer | August 14, 2007 | Common Stock | 24,072 | Professional Services | ||||
Vinas & Company | August 14, 2007 | Common Stock | 16,048 | Professional Services | ||||
David Salomon | August 15, 2007 February 13, 2008 | Common Stock | 150,000 1,211,111 | $150,000 | ||||
MAC Strategic Advisors | November 15, 2007 | Common Stock | 40,000 | Professional Services | ||||
George Kivotidis | November 15, 2007 | Common Stock | 100,000 | $50,000 | ||||
March 10, 2008 | Common Stock | 263,158 | $50,000 | |||||
Christopher A. Vinas | January 23, 2008 February 26, 2008 | Common Stock | 263,158 | $50,000 | ||||
RES Holdings | February 26, 2008 | Common Stock | 23,683 | Professional Services | ||||
LFI Investments Ltd | February 20, 2008 | Common Stock | 78,947 | $10,000 | ||||
Jay Berkow | February 20, 2008 | Common Stock | 52,632 | $10,000 | ||||
Vivek Bhaman | February 20, 2008 | Common Stock | 26,316 | $5,000 | ||||
Robert Braumann | February 20, 2008 | Common Stock | 26,316 | $5,000 | ||||
John A. Brown Jr. | February 20, 2008 | Common Stock | 52,632 | $10,000 | ||||
Vincent P. Carroll | February 20, 2008 | Common Stock | 26,316 | $5,000 | ||||
Robert A. Frazier | February 20, 2008 | Common Stock | 26,316 | $5,000 | ||||
Martin Keating | February 20, 2008 | Common Stock | 26,316 | $5,000 | ||||
Vicor F. Keen | February 20, 2008 | Common Stock | 78,947 | $15,000 | ||||
Robert M. Richards | February 20, 2008 | Common Stock | 26,316 | $5,000 | ||||
Joseph Roberts | February 20, 2008 | Common Stock | 26,316 | $5,000 | ||||
Thomas Romano | February 20, 2008 | Common Stock | 26,316 | $5,000 | ||||
Edward F. Sager, Jr. | February 20, 2008 | Common Stock | 26,316 | $5,000 | ||||
Mark Staples | February 20, 2008 | Common Stock | 26,316 | $5,000 | ||||
Neil Strauss | February 20, 2008 | Common Stock | 52,632 | $10,000 | ||||
Terry Tyson | February 20, 2008 | Common Stock | 52,632 | $10,000 | ||||
Geoffrey C Walker | February 20, 2008 | Common Stock | 26,316 | $5,000 | ||||
James Ward | February 20, 2008 | Common Stock | 26,316 | $5,000 | ||||
Jay S. Weiss | February 20, 2008 | Common Stock | 52,632 | $10,000 |
Name of Purchaser (Selling Stockholder) | Date of Sale | Title of Security | Amount of Securities Sold | Consideration | |||||
GC Advisors | September 20, 2006 January 20, 2007 | Common Stock | 80,241 | Professional Services | |||||
Kenneth Olson | April 18, 2007 | Common Stock | 100,301 | $ | 25,000 | ||||
Feldstein Management | August 14, 2007 | Common Stock | 12,197 | $ | 3,040 | ||||
Dr. David Langer | August 14, 2007 | Common Stock | 24,072 | Professional Services | |||||
Vinas & Company | August 14, 2007 | Common Stock | 16,048 | Professional Services | |||||
David Salomon | August 15, 2007 February 13, 2008 | Common Stock | 150,000 1,211,111 | $ | 150,000 | ||||
MAC Strategic Advisors | November 15, 2007 | Common Stock | 40,000 | Professional Services | |||||
George Kivotidis | November 15, 2007 | Common Stock | 100,000 | $ | 50,000 | ||||
March 10, 2008 | Common Stock | 263,158 | $ | 50,000 | |||||
Christopher A. Vinas | January 23, 2008 February 26, 2008 | Common Stock | 263,158 | $ | 50,000 | ||||
RES Holdings | February 26, 2008 | Common Stock | 23,683 | Professional Services | |||||
April 15, 2008 | Common Stock | 23,683 | Professional Services | ||||||
LFI Investments Ltd | February 20, 2008 | Common Stock | 78,947 | $ | 10,000 | ||||
Jay Berkow | February 20, 2008 | Common Stock | 52,632 | $ | 10,000 | ||||
Vivek Bhaman | February 20, 2008 | Common Stock | 26,316 | $ | 5,000 | ||||
Robert Braumann | February 20, 2008 | Common Stock | 26,316 | $ | 5,000 | ||||
John A. Brown Jr. | February 20, 2008 | Common Stock | 52,632 | $ | 10,000 | ||||
Vincent P. Carroll | February 20, 2008 | Common Stock | 26,316 | $ | 5,000 | ||||
Robert A. Frazier | February 20, 2008 | Common Stock | 26,316 | $ | 5,000 | ||||
Martin Keating | February 20, 2008 | Common Stock | 26,316 | $ | 5,000 | ||||
Vicor F. Keen | February 20, 2008 | Common Stock | 78,947 | $ | 15,000 | ||||
Robert M. Richards | February 20, 2008 | Common Stock | 26,316 | $ | 5,000 | ||||
Joseph Roberts | February 20, 2008 | Common Stock | 26,316 | $ | 5,000 | ||||
Thomas Romano | February 20, 2008 | Common Stock | 26,316 | $ | 5,000 | ||||
Edward F. Sager, Jr. | February 20, 2008 | Common Stock | 26,316 | $ | 5,000 | ||||
Mark Staples | February 20, 2008 | Common Stock | 26,316 | $ | 5,000 | ||||
Neil Strauss | February 20, 2008 | Common Stock | 52,632 | $ | 10,000 | ||||
Terry Tyson | February 20, 2008 | Common Stock | 52,632 | $ | 10,000 | ||||
Geoffrey C Walker | February 20, 2008 | Common Stock | 26,316 | $ | 5,000 | ||||
James Ward | February 20, 2008 | Common Stock | 26,316 | $ | 5,000 | ||||
Jay S. Weiss | February 20, 2008 | Common Stock | 52,632 | $ | 10,000 | ||||
Concordia Financial Group | February 20, 2008 | Common Stock | 523,747 | Professional Services | |||||
April 15, 2008 | Common Stock | 523,747 | Professional Services | ||||||
Sichenzia Ross Friedman Ference, LLP | February 20, 2008 | Common Stock | 523,747 | Professional Services |
II-3
guide us in making important strategic decisions and to evaluate our strategic plans and decisions, research and/or development activities and results, competitive positions and/or other scientific and/or technical issues. In consideration for providing such services, Dr. O’Rourke was granted an option to purchase 50,000 shares of the Company’s common stock at $.50 per share.
Fountainhead Capital Partners Limited.
stock) dated December 15, 2006 at $.50 per share.
II-4
Exhibit No. | ||
Description | ||
3.1 | Certificate of Incorporation | |
3.2 | Bylaws | |
3.3 | 6% Convertible Debenture No. 1 to Regent Private Capital, LLC | |
3.4 | 6% Convertible Debenture to Fountainhead Capital Partners Limited | |
3.5 | Fountainhead Capital Partners Limited Warrant | |
3.6 | Fountainhead Capital Partners Limited Bridge Loan Debenture | |
3.7 | GC Advisors LLC Warrants | |
3.8 | George Kivotidis Warrant dated November 6, 2007 | |
3.9 | Martin Magida Warrant dated September 1, 2007 | |
3.10 | Robert Guinta Warrant dated September 1, 2007 | |
5.1 | Opinion of Sichenzia Ross Friedman Ference LLC regarding legality of common stock being registered. | |
10.1 | Fountainhead Capital Partners Limited Option Agreement | |
10.2 | Convertible Debenture Purchase Agreement between Vycor Medical, Inc. and Regent Private Capital, LLC dated February 14, 2008 | |
10.3 | Convertible Debenture Purchase Agreement between Vycor Medical, Inc. and Fountainhead Capital Partners Limited | |
10.4 | Stock Option Agreement with Heather N. Jensen dated February 15, 2008 | |
10.5 | Stock Option Agreement with Kenneth Coviello dated February 15, 2008 | |
10.6 | Assignment of Rights Under Warrant and Under Option Agreement dated February 14, 2008 between Fountainhead Capital Partners Limited, Regent Private Capital LLC and Vycor Medical, Inc. | |
10.7 | Assignment Agreement between John R. Mangiardi and The Sawmill Trust dated September 17, 2005. | |
10.8 | Assignment Agreement between The Sawmill Trust and Vycor Medical LLC dated September 17, 2005. | |
10.9 | Lease Agreement dated March 12, 2008 | |
10.10 | Business Operating Agreement dated September 11, 2007 with Lacey Manufacturing Company. | |
23.1 | Consent of Sichenzia Ross Friedman Ference LLC (will be included in its legal opinion to be filed as Exhibit 5.1) | |
23.2 | Consent of Paritz & Company for use of their report. |
II-5
The undersigned Registrant hereby undertakes
The undersigned registrant hereby undertakesor used or referred to by the undersigned registrant;
II-6 Pursuant to |
II-6
II-7
In accordance with the requirements of the Securities Act of 1933, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-1 and authorizedduly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized in the City of New York State of New York on March 17,the 2nd day of June, 2008.
VYCOR MEDICAL, INC.
VYCOR MEDICAL, INC. | ||
By: | /s/ Kenneth T. Coviello | |
Kenneth T. Coviello Chief Executive Officer and Director |
By: | /s/ Heather N. Jensen | |
Heather N. Jensen President, Founder and Director |
/s/ Kenneth T. Coviello | June 2, 2008 | |||
Kenneth T. Coviello Chief Executive Officer and Director (Principal Executive Officer, Principal Financial Officer, Principal Accounting Officer) | ||||
/s/ Heather N. Jensen | June 2, 2008 | |||
Heather N. Jensen President and Director | ||||
/s/ Pascale Mangiardi | June 2, 2008 | |||
Pascale Mangiardi Director | ||||
June 2, 2008 | ||||
Robert Diener Director |