Registration No.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-1
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
AMERICAN BRIVISION (HOLDING) CORPORATION
(Exact name of registrantRegistrant as specified in its charter)
| Nevada | 5084 | 26-0014658 | ||
| (State or Other Jurisdiction of Incorporation or Organization) | (Primary Standard Industrial Classification Code Number) | (I.R.S. Employer Identification Number) |
11 Sawyers Peak Drive, Goshen, NY, 10924.
(845) 291-1291
(Address, including zip code, and telephone number,
including area code, of registrant’sRegistrant’s principal executive offices)
Copies to:
Louis E. Taubman, Esq.
Hunter Taubman Fischer & Secretary
1450 Broadway, Floor 26
New York, NY 10018
Approximate date of agent for service)
If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, check the following box:box. x
If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. x¨
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o¨
If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,”filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. o
¨ | Accelerated filer | ¨ | |
(Do not check if a smaller reporting company) | ¨ | Smaller reporting company | x |
CALCULATION OF REGISTRATION FEE
| Title of Each Class of Security To be Registered | Amount to be Registered (1) | Proposed Maximum Offering Price per Share (2) | Proposed Maximum Aggregate Offering Price (3) | Amount of Registration Fee |
| Common Stock, $.001 par value per share | 4,340,000 | $1.05 | $4,557,000 | $254.28(4) |
| Title of each class of securities to be registered | Amount to be Registered (1) | Proposed maximum offering price per share(2) | Proposed maximum aggregate offering price | Amount of registration fee | ||||||||||||
| Common stock, par value $.001 per share offered by certain selling stockholders | 32,409,505 | (3) | $ | 2.00 | $ | 64,819,010 | $ | 6,528 | ||||||||
| Total | 32,409,505 | $ | 64,819,010 | $ | 6,528 | |||||||||||
| (1) |
| (2) |
| Estimated solely for |
The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the registration statement shall become effective on such date as the SEC, acting pursuant to said Section 8(a), may determine.
The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission (“SEC”) is effective. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any jurisdictionstate where the offer or sale is not permitted.
| Preliminary Prospectus | Subject to Completion, dated September 13, 2016 |
American BriVision (Holding) Corporation
32,409,505 Shares of Common Stock
This prospectus relates to the resale of up to 32,409,505 shares of common stock of American BriVision (Holding) Corporation, a Nevada corporation (the “Company”), $0.001 par value (the “Common Stock”). The selling stockholders named herein may sell common stock from time to time in the principal market on which the stock is traded at the prevailing market price, at prices related to such prevailing market price, in negotiated transactions or a combination of such methods of sale. We will not receive any proceeds from the sales by the selling stockholders.
Our common stock is quoted on the OTC Markets under the symbol ABVC. Prior to January 14, 2016, our common stock was quoted under the symbol MTOO. Prior to December 15, 2015, our common stock was quoted under the symbol ECOC.
The selling stockholders, and any broker-dealer executing sell orders on behalf of the selling stockholders, may be deemed to be “underwriters” within the meaning of the Securities Act of 1933, as amended. Commissions received by any broker-dealer may be deemed underwriting commissions under the Securities Act of 1933, as amended.
THIS INVESTMENT INVOLVES A HIGH DEGREE OF CONTENTS
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED THESE SECURITIES, OR DETERMINED IF THIS PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
The date of this prospectus is September 13 , 2016
TABLE OF CONTENTS
| PART I. INFORMATION REQUIRED IN PROSPECTUS | 1 | |||
| About This Prospectus | 1 | |||
| 2 | ||||
| Risk Factors | 5 | |||
| Cautionary Note Regarding Forward-Looking Statements | 19 | |||
| Use of Proceeds | 19 | |||
| Determination of Offering Price | 19 | |||
| 20 | ||||
| Business | 29 | |||
| Management | 34 | |||
| Executive Compensation | 36 | |||
| Certain Relationship and Related Transactions | 38 | |||
| Security Ownership of Certain Beneficial Owners and Management | 39 | |||
| Selling Stockholders | 41 | |||
| Plan of Distribution | 45 | |||
| 48 | ||||
| Experts | 48 | |||
| Market For Our Common Stock, Dividends And Related Stockholder Information | 47 | |||
| Incorporation of Certain Information by Reference | ||||
| Disclosure of Commission Position | 48 |
| PART II. INFORMATION NOT REQUIRED IN PROSPECTUS | II-1 | |||
| Other Expenses of | II-1 | |||
| Indemnification of Directors and Officers | II-1 | |||
| Recent Sales of Unregistered Securities | II-2 | |||
| II-3 | ||||
| Undertakings | II-3 |
We have not authorized any person to give you any supplemental information or to make any representations for us. You should not rely only on theupon any information about us that is not contained in this prospectus or in one of our public reports filed with the Securities and Exchange Commission (“SEC”) and incorporated into this prospectus. We and the selling shareholder have not authorized anyone to provide you with information different from thatInformation contained in this prospectus. This prospectus or in our public reports may only be used where it is legal to sell these securities.become stale. You should not assume that the information contained in this prospectus, isany prospectus supplement or the documents incorporated by reference are accurate only as of theany date of this prospectus,other than their respective dates, regardless of the time of delivery of this prospectus or of any sale of common stock.the shares. Our business, financial condition, results of operations and prospects may have changed since those dates. The selling stockholders are offering to sell, and seeking offers to buy, shares of our common stock only in jurisdictions where offers and sales are permitted.
In this prospectus the “Company,” “we,” “us,” and “our” refer to American Brivision (Holding) Corporation, a Nevada corporation and its subsidiaries.
All dealers that date.effect transactions in these securities, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to the dealers’ obligation to deliver a prospectus when acting as underwriters.
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This summary highlights selected information containedappearing elsewhere in this prospectus. ThisWhile this summary sets forthhighlights what we consider to be the material terms of the offering, but does not contain all of themost important information thatabout us, you should considercarefully read this prospectus and the registration statement of which this prospectus is a part in their entirety before investing in our common stock. You should read the entire prospectus carefully before making an investment decision, especially the risks of investing instock, and our common stock described under "Risk Factors."financial statements and related notes beginning on page F-1 and F-4, respectively. Unless the context requires otherwise, requires, the terms "we," "us," "our,"words the “Company,” “American BriVision” “we,” “us” or “our” are references to the combined business of American BriVision (Holding) Corporation and "Ecology" referits consolidated subsidiaries. References to “Brivision” are references to our wholly-owned subsidiary. References to “China” or “PRC” are references to the People’s Republic of China. References to “RMB” are to Renminbi, the legal currency of China, and all references to “$” and dollar are to the U.S. dollar, the legal currency of the United States. All market and industry data provided in this prospectus represents information that is generally available to the public and was not prepared for us for a fee. We did not fund nor were we otherwise affiliated with these sources and we are not attempting to incorporate the information on external web sites into this prospectus. We are only providing textual reference of the information of market and industry data and the web addresses provided in this prospectus are not intended to be hyperlinks and we do not assure that those external web sites will remain active and current.
Our Company
Currently, we are a holding company operating through our wholly owned subsidiary, American BriVision Corporation, a Delaware corporation, or BriVision. BriVision was incorporated in 2015 in the State of Delaware. It is a biotechnology company focused on the development of new drugs and innovative medical devices to fulfill unmet medical needs. The business model of the Company is to integrate research achievements from world-famous institutions, conduct clinical trials of translational medicine for Proof of Concept (POC), out-license to international pharmaceutical companies, and exploit global markets.
We currently have sole licensing rights to the drug and therapeutic use for five compounds developed by BioLite, Inc. (“BioLite”). BioLite is a botanical new drug developer incorporated under the laws of Taiwan in 2006. On December 29, 2015, BriVision entered into a Collaborative Agreement (the “Collaborative Agreement”) with BioLite. Our CEO and sole director, Eugene Jiang, is a director of BioLite and therefore BioLite is considered a related party.
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History and Background
Prior to the consummation of the share exchange transaction described below, we were a public reporting company with nominal operations. Ecology Coatings Inc. incorporated on March 12, 1990 in California (“Ecology-CA”). OCIS Corp (“OCIS”)was incorporated in Nevada on February 6, 2002 as and was a public reporting company.. (“OCIS”). OCIS completed a merger with Ecology-CA on July 26, 2007 (the “Merger”). In the Merger, OCIS changed its name from OCIS Corporation to Ecology Coatings, Inc. The Company filed for Chapter 7 bankruptcy protection on May 15, 2013 and subsequently the corporate shell emerged as its predecessors, directonly unencumbered asset on September 19, 2014 using "fresh start" accounting under section 852-10-45-17 as of date of sale corporate shell to reflect intangible assets sale through section 363. Any business description below and indirect subsidiariesall reporting results of the operating results reported in this filing for the fiscal year ending September 30, 2015 are post "fresh start" activity and affiliates.not comparable to prior results. Post-bankruptcy, the Company operated a web site for the sale of women's apparel. On November 14, 2014, a majority of the stockholders of the Company by unanimous written consent in lieu of a special meeting of stockholders, unanimously approved an amendment to the Articles of Incorporation to change the name of the Company to Metu Brands, Inc. . The Amendment the Articles of Incorporation was filed with the State of Nevada on April 28, 2015. The name change was subsequently approved by the Financial Industry Regulatory Authority (“FINRA”) on August 13, 2015. In conjunction with the name change, the Company’s ticker symbol will be changed to “MTOO”. On December 18, 2015, a Stock Purchase Agreement (“Stock Purchase Agreement”) was entered into by and among Euro-Asia Investment & Finance Corp. Limited, a company incorporated under the laws of Hong Kong Special Administrative Region of China (“Euro-Asia” or “Buyers’ Representative”), seven other buyers listed in Schedule A attached thereto (together with Euro-Asia, collectively, “Buyers”), Shulamit Lazar (“Lazar”), eleven other sellers listed in Schedule B attached thereto (together with Lazar, collectively, “Sellers”),. Pursuant to the Stock Purchase Agreement, for a total consideration of $395,000, the Buyers acquired from the Sellers a total of 65,420,000 shares of the Company’s common stock, $0.001 par value per share (the “Common Stock”) which represented approximately 99.98% of the Company’s 65,431,144 shares of issued and outstanding Common Stock at that time.On December 21, 2015, the majority holder of the issued and outstanding shares of common stock of the Company approved the change of the Company’s name from Metu Brands, Inc. to American BriVision (Holding) Corporation (the “Name Change”), and the increase of its authorized shares of Common Stock from 90,000,000 to 350,000,000, and authorized shares of preferred stock from 10,000,000 to 20,000,000, par value $0.001 per share (the “Increase of Authorized Stock”). A Certificate of Amendment (the “Amendment”) to Articles of Incorporation effectuating the Name Change and Increase of Authorized Stock was filed and became effective as of January 4, 2016. As a result of the Name Change, our trading symbol is changed from “MTOO” to “ABVC”.
Reverse Merger
On February 8, 2016, a Share Exchange Agreement (“Share Exchange Agreement”) was entered into by and among the Company, BriVision, Euro-Asia , being the owners of record of 52,336,000 shares of common stock of the Company, and the owners of record of all of the issued share capital of BriVision (the “BriVision Stock”). Pursuant to the Share Exchange Agreement, upon surrender by the BriVision Shareholders and the cancellation by BriVision of the certificates evidencing the BriVision Stock as registered in the name of each BriVisionShareholder, and pursuant to the registration of the Company in the register of members maintained by BriVision as the new holder of the BriVision Stock and the issuance of the certificates evidencing the aforementioned registration of the BriVision Stock in the name of the Company, the Company issued 52,936,583 shares (the “Acquisition Stock”) (subject to adjustment for fractionalized shares) of the Company’s common stock to the BriVision Shareholders (or their designees), and cancelled 51,945,225 shares of the Company’s common stock owned by Euro-Asia (such shares were retired to treasury). The Acquisition Stock collectively represents 79.70% of the issued and outstanding common stock of the Company immediately after the closing of the transaction contemplated in the Share Exchange Agreement (“Share Agreement”).. As a result of Share Exchange, BriVision became the Company’s wholly owned subsidiary There were no warrants, options or other equity instruments issued in connection with the Share Exchange .
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Following the Share Exchange, we have abandoned our prior business plan and we are now using BriVision’s historical businesses and proposed businesses, which focus on the development of new drugs and innovative medical devices to fulfill unmet medical needs. The business model of the Company
Forward Stock Split
On March 21, 2016, the Board of Directors of the Company approved an amendment to Articles of Incorporation to effect a forward split at a ratio of 1 to 3:141 and increase the number of our authorized shares of common stock, par value $0.001 per share, to 360,000,000, . The amendment to Articles of Incorporation was approved by the majority of the shareholders of the Company and became effective on April 8, 2016..
Merger and Name Change
Ecology Coatings, Inc. (“Ecology-CA”) was originally incorporated in California on March 12, 1990. OCIS Corp. (“OCIS”) was incorporated in Nevada on February 6, 2002. OCIS completed a merger with Ecology-CA on July 27, 2007 (the “Merger”). In the Merger, OCIS issued approximately 30,530,6846,106,137 shares of common stock to the Ecology-CA stockholders. In this transaction, OCIS changed its name from OCIS Corporation to Ecology Coatings, Inc. and our ticker symbol on the OTC Bulletin Board association changed to “ECOC.” As a result of
On November 14, 2014, Ecology-CA changed its name to Metu Brands, Inc., which the merger, we became a Nevada corporation and Ecology-CA became a wholly owned subsidiary.
Principal Executive Office
Our principal executive offices are located at 350 Fifth Avenue, Suite 100, Auburn Hills, MI 49326. Our telephone number is 248-370-9900.
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The Offering
| Common Stock | |
| Common Stock | |
| Common Stock outstanding after | 213,303,222 shares |
| Use of Proceeds | We will not receive any proceeds from the sale of shares |
| Trading Symbol | ABVC |
| Risk Factors |
You should carefully consider the risks described below as well as other information provided to you in this document, including information in the section of this document entitled “Forward Looking Statements”. If any of the following risks actually occur, our business, financial condition or results of operations could be materially adversely affected, the value of our common stock could decline, and you may lose all or part of your investment.
Risks Relating to Our Business
We are a pre-revenue biopharmaceutical company and are thus subject to the risks associated with new businesses in that industry.
We acquired the sole licensing rights to develop and commercialize for drug and therapeutic use of five compounds and have only recently begun to pursue this new business opportunity. As such, we are a clinical stage biopharmaceutical company with no history of revenue-generating operations, and our only assets consist of the intellectual property and related assets licensed to us by BioLite. Therefore, we are, and expect for the foreseeable future to be, subject to all the risks and uncertainties inherent in a new business, in particular new businesses engaged in the development of pharmaceuticals. We still must establish and implement many important functions necessary to operate a business, including the clinical development of the five compounds, establishing our managerial and administrative structure and implementing financial systems and controls.
Accordingly, you should consider our prospects in this prospectus assumeslight of the conversion of 2,170 5% convertible preferred shares with an aggregate purchase price of $2,170,000 into 4,340,000 shares of common stock.
• implement or execute our current business plan, or create a business plan that is sound;
• maintain our anticipated management team;
• raise sufficient funds in the capital markets or otherwise to effectuate our business results to differ fromplan;
• determine that the statements contained herein.
• attract, enter into or maintain contracts with, potential commercial partners such as licensors of technology and have a history of significant operating losses
If we cannot execute any one of the problems,foregoing, our business may fail, in which case you may lose the entire amount of your investment in our Company. To date, we are still setting up our pipeline products. We cannot assure that any of our efforts will be successful or result in the development or timely launch of additional products, or ultimately produce any material revenue.
In addition, as a pre-revenue biopharmaceutical company, we expect to encounter unforeseen expenses, difficulties, complications, delays and complications associated with a business that seeks to generate more significant revenue. We have generated nominal revenue to dateother known and have incurred significant operating losses. Our operating losses have resulted principally from costs incurred in connection with our capital raising efforts and becoming a public company through a merger, promotion of our products, and from salaries and general and administrative costs. We have maintained minimal cash reserves since October 2008 and have relied solely on additional investment from Equity 11. Equity 11 is not committed to make any additional investments.unknown factors. We will need to raise additional capitaltransition at some point from Equity 11 or other investors in fiscal year 2010 in order to continue to fund our operations.
If we fail to raise additional capital, our ability to implement our business model and strategy could be compromised.
We have limited capital resources and operations. To date, our operations have been funded partial from the proceeds from financings or loans from shareholders or our management.
If we do not raise $5,000,000 by December 31, 2016 , we will likely be unable to carry out our business. We may not be able to obtain additional financing on terms acceptable to us, or at all. Even if we obtain financing for our near term operations and product development, we may require additional capital beyond the near term. If we are unable to raise capital when needed, our business, financial condition and results of operations would be materially adversely affected, and financial conditionwe could be forced to reduce or discontinue our operations.
We are highly dependent on our license agreement with BioLite, and the loss of this license would materially impair our business plan and viability.
We have secured sole rights to develop and commercialize five products from BioLite in the North America, and these five products are currently our only product candidates. As such, our Collaboration Agreement with BioLite is critical to our business. In the event that our Collaboration Agreement with BioLite is terminated, we would lose the ability to develop and commercialize the five products, and our business prospects would be materially damaged, which could lead to the loss of your investment.
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We have no experience as a company in obtaining regulatory approval for, or commercializing, any product candidate.
As a company, we have never obtained regulatory approval for, or commercialized, any product candidate. It is possible that the FDA may forcerefuse to accept our planned New Drug Application (or NDA) for any of the five products for substantive review, or may conclude after review of our data that our application is insufficient to obtain regulatory approval of The five products or any future product candidates. If the FDA does not accept or approve our planned NDA for our product candidates, it may require that we conduct additional clinical, preclinical or manufacturing validation studies, which may be costly, and submit that data before it will reconsider our applications. Depending on the extent of these or any other FDA required studies, approval of any NDA or application that we submit may be significantly delayed, possibly for several years, or may require us to seek protection underexpend more resources than we have available. Any delay in obtaining, or an inability to obtain, regulatory approvals would prevent us from commercializing The five products, generating revenues and achieving and sustaining profitability. It is also possible that additional studies, if performed and completed, may not be considered sufficient by the bankruptcy laws.
Dependence on key personnel
Our success will be largely dependentdepend, to a large degree, upon the efforts and abilities of our executive officers.officers and key employees. The loss of the services of one or more of our executive officerskey employees could have a material adverse effect on our operations. In addition, as our business model is implemented, we will need to recruit and prospects.retain additional management and key employees in virtually all phases of our operations. Key employees will require a strong background in our industry. We cannot be certainassure that we will be able to successfully attract and retain the services of such individuals in the future. key personnel.
Our research and development efforts aregrowth is dependent upon a single executive, Sally Ramsey, with whom we have entered into an employment agreement which expires on December 31, 2012. Our success will be dependent upon our ability to hiresuccessfully develop, acquire or license new drugs.
Our growth is supported by continuous investment in time, resources and retain qualified technical, research,capital to identify and develop new products or new formulations for the market via geographic expansion and market penetration. If we are unable to either develop new products on our own or acquire licenses for new products from third parties, our ability to grow revenues and market share will be adversely affected. In addition, we may not be able to recover our investment in the development of new drugs and medical devices, given that projects may be interrupted, unsuccessful, not as profitable as initially contemplated or we may not be able to obtain necessary financing for such development. Similarly, there is no assurance that we can successfully secure such rights from third parties on an economically feasible basis.
We may not be able to secure financing needed for future operating needs on acceptable terms, or on any terms at all.
From time to time, we may seek additional financing to provide the capital required to expand our production facilities, R&D initiatives and/or working capital, as well as to repay outstanding loans if cash flow from operations is insufficient to do so. We cannot predict with certainty the timing or amount of any such capital requirements. If such financing is not available on satisfactory terms, we may be unable to expand our business or to develop new business at the rate desired. If we are able to incur debt, we may be subject to certain restrictions imposed by the terms of the debt and the repayment of such debt may limit our cash flow and growth. If we are unable to incur debt, we may be forced to issue additional equity, which could have a dilutive effect on our current stockholders.
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Expansion of our business may put pressure on our management and the operational infrastructure which could impede our ability to meet an increased demand for our products.
Our business plan is to develop new drug (product) and finish Phase II clinical trial (after finish phase II clinical trial and if the result is good, this is co called prove of concept (POC)), then ABVC would engage with the world leading Pharmaceuticals by out licensing the new drug for the next stage development. The advantages are
| 1. | to diversify the risk involved with leading pharmaceuticals |
| 2. | Quick return on investment (ROI) & Improve cash flow |
| 3. | Sustainable income |
Growth in our business may place a significant strain on our personnel, management, financial systems and other resources. The evolution of our business also presents numerous risks and challenges that include continued acceptance of our products, sales marketing,and market share expansion, costs for expansion, technological evolvement and industrial dynamics.
If we are successful in obtaining rapid market growth of our products, we will be required to deliver large volumes of quality products and services on a timely basis at a reasonable cost to the customers. Meeting any such increased demands will require us to expand our manufacturing facilities, to increase our ability to purchase raw materials, to expand our work force, to expand our quality control capabilities and to increase the scale upon which we provide our products and services. Such demands would require more capital and working capital than we currently have available and we may be unable to meet the needs of our customers, which could adversely affect our relationship with our customers and reduce our revenues.
Our growth strategy includes the pursuit of acquisitions, and new product development, which could have a materially adverse effect on our business, financial condition, results of operations and financial personnel. Wegrowth prospects.
Our business strategy includes growth through strategic acquisitions, and the development of new products, medical devices and technologies, which will compete withinvolve significant capital expenditure and risks. Innovative pharmaceutical development involves R&D costs, but it may achieve no tangible results and instead may adversely affect our future profitability. In addition, any acquisition or combination that we consummate will likely involve, among other companies with greater financialthings, the payment of cash, the incurrence of contingent liabilities and the amortization of expenses related to goodwill and other resources for such personnel. Although we have notintangible assets, and transaction costs, which may adversely affect our business, financial condition, results of operations and growth prospects. Our ability to date experienced difficulty in attracting qualified personnel, we cannot be certainintegrate and organize any new businesses and/or products, whether internally developed or obtained by acquisition or combination, will likely require significant expansion of our operations. There is no assurance that we will be able to retainobtain the necessary resources for such expansion, and the failure to do so could have a materially adverse effect on our present personnelbusiness, financial condition, results of operations and growth prospects. In addition, future acquisitions or acquire additional qualified personnel as and when needed. On September 21, 2009,combinations by the company involve risks of, among other things, entering markets or segments in which we entered intohave no or limited prior experience, the potential loss of key employees or difficulty, delay or failure in the integration of the operations of any such new employment agreementsbusiness with our Chief Executive Officer, Chief Operating Officer,current business and General Counseloperating and entered into an amendment to Ms. Ramsey’s employment agreement. We do notfinancial difficulties of any new or newly combined operations, any of which could have an employment agreementa materially adverse effect on our business, financial condition, results of operations and growth prospects. Moreover, there can be no assurance that the anticipated benefits of any internally developed new business segment or business combination will be realized.
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Our current products have certain side effects. If the side effects associated with our Chief Financial Officer.
Our current products have certain side effects. If significant side effects of our medicines are identified after they are marketed and sold:
| 1) | regulatory authorities may withdraw or modify their approvals of such medicines; |
| 2) | we may be required to reformulate these medicines, change the ways in which they are marketed, conduct additional clinical trials, change the labeling of these medicines or implement changes to obtain new approvals for our manufacturing facilities; |
| 3) | we may have to recall these medicines from the market and may not be able to re-launch them; |
| 4) | we may experience a significant decline in sales of the affected products; |
| 5) | our reputation may suffer; and |
| 6) | We may become a target of lawsuits. |
The occurrence of any Disruptions in Our Systems Would Adversely Affect Us
We may be subject to product liability claims in the future.
We face an inherent business risk of exposure to product liability claims in the event that the uses of our products are alleged to have caused adverse side effects. Side effects or marketing or manufacturing problems pertaining to any of our products could result in product liability claims or adverse publicity. These risks will exist for those products in clinical development and with respect to those products that receive regulatory approval for commercial sale. Furthermore, italthough we have not historically experienced any problems associated with claims by users of our products, we do not currently maintain product liability insurance and there could be no assurance that we are able to acquire product liability insurance with terms that are commercially feasible.
Product liability lawsuits against us could divert our resources, cause us to incur substantial liabilities and limit commercialization of any products that we may develop.
We face an inherent risk of product liability claims as a result of the clinical testing of our products and commercially selling any products that we may develop. For example, we may be sued if any product we develop allegedly causes injury or is possiblefound to be otherwise unsuitable during clinical testing, manufacturing, marketing or sale. Any such product liability claims may include allegations of defects in manufacturing, defects in design, a failure to warn of dangers inherent in the product, negligence, strict liability or a breach of warranties. Claims could also be asserted under state consumer protection acts. If we cannot successfully defend ourselves against product liability claims, we may incur substantial liabilities or be required to limit commercialization of our product candidate. Regardless of the merits or eventual outcome, liability claims may result in:
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| · | decreased demand for our product candidate or products that we may develop; |
| · | injury to our reputation and significant negative media attention; |
| · | withdrawal of clinical trial participants; |
| · | significant costs to defend resulting litigation; |
| · | substantial monetary awards to trial participants or patients; |
| · | loss of revenue; |
| · | reduced resources of our management to pursue our business strategy; and |
| · | the inability to commercialize any products that we may develop. |
We currently do not maintain general liability insurance; and even if we have a general liability insurance in the future this insurance may not fully cover potential liabilities that we may incur. The cost of any product liability litigation or other proceeding, even if resolved in our information systemsfavor, could experience a completebe substantial. We would need to increase our insurance coverage if and when we begin selling any product candidate that receives marketing approval. In addition, insurance coverage is becoming increasingly expensive. If we are unable to obtain or partial shutdown. If such a shutdown occurred, it could impact our ability to report our financial results in a timely mannermaintain sufficient insurance coverage at an acceptable cost or to otherwise operateprotect against potential product liability claims, it could prevent or inhibit the development and commercial production and sale of our business. In this regard,product candidate, which could adversely affect our business, financial datacondition, results of operations and prospects.
If we are unable to keep up with rapid technological changes in our accounting software (QuickBooks) became corrupted and unusable in late June 2009 and the backup system for our computer systems failedfield or compete effectively, we will be unable to backup the data. This resultedoperate profitably.
We are engaged in a delay in our ability to complete our financial statements for the June 30, 2009 quarter and to file our Form 10-Qrapidly changing field. Other products that will compete directly with the SECproducts that we are seeking to develop and market currently exist or are being developed. Competition from fully integrated pharmaceutical companies and more established biotechnology companies is intense and is expected to increase. Most of these companies have significantly greater financial resources and expertise in discovery and development, manufacturing, preclinical and clinical testing, obtaining regulatory approvals and marketing than us. Smaller companies may also prove to be significant competitors, particularly through collaborative arrangements with large pharmaceutical and established biopharmaceutical or biotechnology companies. Many of these competitors have significant products that have been approved or are in development and operate large, well-funded discovery and development programs. Academic institutions, governmental agencies and other public and private research organizations also conduct research, seek patent protection and establish collaborative arrangements for therapeutic products and clinical development and marketing. These companies and institutions compete with us in recruiting and retaining highly qualified scientific and management personnel. In addition to the above factors, we will face competition based on product efficacy and safety, the timing and scope of regulatory approvals, availability of supply, marketing and sales capability, reimbursement coverage, price and patent position. There is no assurance that our competitors will not develop more effective or more affordable products, or achieve earlier patent protection or product commercialization, than our own.
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Other companies may succeed in developing products earlier than ourselves, obtaining FDA approvals for such period.
We have conducted, limited test marketing and thus,may in the future conduct, clinical trials for certain of our product candidate at sites outside the United States, and the FDA may not accept data from trials conducted in such locations.
We have relatively little information on whichconducted and may in the future choose to estimateconduct one or more of our levelsclinical trials outside the United States. Although the FDA may accept data from clinical trials conducted outside the United States, acceptance of sales,this data is subject to certain conditions imposed by the amountFDA. For example, the clinical trial must be well designed and conducted and performed by qualified investigators in accordance with ethical principles. The trial population must also adequately represent the U.S. population, and the data must be applicable to the U.S. population and U.S. medical practice in ways that the FDA deems clinically meaningful. Generally, the patient population for any clinical trials conducted outside of revenuethe United States must be representative of the population for whom we intend to seek approval in the United States. In addition, while these clinical trials are subject to the applicable local laws, FDA acceptance of the data will be dependent upon its determination that the trials also complied with all applicable U.S. laws and regulations. There can be no assurance that the FDA will accept data from trials conducted outside of the United States. If the FDA does not accept the data from any of our planned operations will generate and our operating and other expenses. We cannot be certainclinical trials that we will be successful in our effortsdetermine to market our products or to develop our marketsconduct outside the United States, it would likely result in the manner we contemplate.
In addition, the conduct of clinical trials outside the United States could have a significant impact on us. Risks inherent in conducting international clinical trials include:
| ● | foreign regulatory requirements that could restrict or limit our ability to conduct our clinical trials; |
| ● | administrative burdens of conducting clinical trials under multiple foreign regulatory schema; |
| ● | foreign exchange fluctuations; and |
| ● | diminished protection of intellectual property in some countries. |
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If clinical trials of our products offer. Becauseproduct candidates fail to demonstrate safety and efficacy to the satisfaction of these factors, demandthe FDA and market acceptance for new products may be difficult. In mature markets, such as automotive or general industrial,comparable non-U.S. regulators, we may encounter resistance byincur additional costs or experience delays in completing, or ultimately be unable to complete the development and commercialization of our potential customers in changingproduct candidate.
We are not permitted to our technology because of the capital investments they have made in their present productioncommercialize market, promote or manufacturing facilities. Thus, we cannot be certain that our technology and products will become widely accepted. We do not know our future growth rate, ifsell any and size of these markets. If a substantial market fails to develop, develops more slowly than expected, becomes saturated with competitors or if our products do not achieve market acceptance, our business, operating results and financial condition will be materially adversely affected.
Clinical testing is expensive, difficult to design and implement, can take many years to complete and is inherently uncertain as to outcome. Any inability to successfully complete preclinical and clinical development could result in additional costs to us and impair our ability to generate revenues from product sales, regulatory and commercialization milestones and royalties. In addition, if (1) we are required to conduct additional clinical trials or other testing of our product candidate beyond the trials and testing that we contemplate, (2) we are unable to successfully complete clinical trials of our product candidate or other testing, (3) the results of these trials or tests are unfavorable, uncertain or are only modestly favorable, or (4) there are unacceptable safety concerns associated with our product candidate, we, in addition to incurring additional costs, may:
| · | be delayed in obtaining marketing approval for our product candidates; |
| · | not obtain marketing approval at all; |
| · | obtain approval for indications or patient populations that are not as broad as we intended or desired; |
| · | obtain approval with labeling that includes significant use or distribution restrictions or significant safety warnings, including boxed warnings; |
| · | be subject to additional post-marketing testing or other requirements; or |
| · | be required to remove the product from the market after obtaining marketing approval. |
Even if our product candidate receives marketing approval, it may fail to achieve the degree of market acceptance by physicians, patients, third party payors and others in the medical community necessary for commercial success and the market opportunity for the product candidate may be smaller than we estimate.
We have never commercialized a product. Even if our technologyproducts are approved by the appropriate regulatory authorities for marketing and sale, they may nonetheless fail to gain sufficient market acceptance by physicians, patients, third party payors and others in the medical community. For example, physicians are often reluctant to switch their patients from existing therapies even when new and potentially more effective or convenient treatments enter the market. Further, patients often acclimate to the therapy that they are currently taking and do not want to switch unless their physicians recommend switching products successfully or they are required to switch therapies due to lack of reimbursement for existing therapies.
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Efforts to educate the medical community and third party payors(???) on the benefits of our product candidate may require significant resources and may not be successful. If our product candidates are approved but do not achieve an adequate level of market acceptance, we may not generate significant revenues and we may not become profitable. The degree of market acceptance of our products, if approved for commercial sale, will depend on a number of factors, including:
| ● | the efficacy and safety of the products; |
| ● | the potential advantages of the products compared to alternative treatments; |
| ● | the prevalence and severity of any side effects; |
| ● | the clinical indications for which the products are approved; |
| ● | whether the products are designated under physician treatment guidelines as a first-line therapy or as a second- or third-line therapy; |
| ● | limitations or warnings, including distribution or use restrictions, contained in the product approved labeling; |
| ● | our ability to offer the products for sale at competitive prices; |
| ● | our ability to establish and maintain pricing sufficient to realize a meaningful return on our investment; |
| ● | the products’ convenience and ease of administration compared to alternative treatments; |
| ● | the willingness of the target patient population to try, and of physicians to prescribe, the products; |
| ● | the strength of sales, marketing and distribution support; |
| ● | the approval of other new products for the same indications; |
| ● | changes in the standard of care for the targeted indications for the products; |
| ● | the timing of market introduction of our approved products as well as competitive products and other therapies; |
| ● | availability and amount of reimbursement from government payors, managed care plans and other third party payors; |
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| ● | adverse publicity about the products or favorable publicity about competitive products; and |
| ● | potential product liability claims. |
The potential market opportunities for our products are difficult to estimate precisely. Our estimates of the potential market opportunities are predicated on many assumptions, including industry knowledge and publications, third party research reports and other surveys. While we believe that our internal assumptions are reasonable, these assumptions involve the exercise of significant judgment on the part of our management, are inherently uncertain and the reasonableness of these assumptions has not been assessed by an independent source. If any of the assumptions proves to be inaccurate, the actual markets for our products could be smaller than our estimates of the potential market opportunities.
We rely on a limited number of suppliers and the loss of any of our technologysuppliers, or products will be accepteddelays or problems in the marketplace.
We generally rely on a long sales cycle
We may seek to enter into collaborations with substantially greater financial, technological, marketing, personnelthird parties for the development and research and development resources than we currently have. There are direct competitors who have competitive technology and products for manycommercialization of our products. New companies will likelyproduct candidate. If we fail to enter our markets in the future. Although we believe that our productsinto such collaborations, or such collaborations are distinguishable from those of our competitors on the basis of their technological features and functionality at an attractive value proposition,not successful, we may not be able to penetratecapitalize on the market potential of our product candidate.
We may seek third-party collaborators for development and commercialization of our products. Our likely collaborators for any marketing, distribution, development, licensing or broader collaboration arrangements include large and mid-size pharmaceutical companies, regional and national pharmaceutical companies, non-profit organizations, government agencies, and biotechnology companies. Our ability to generate revenues from these arrangements will depend on our collaborators’ abilities to successfully perform the functions assigned to them in these arrangements.
Collaborations involving our products will pose, the following risks to us:
| ● | collaborators may have significant discretion in determining the efforts and resources that they will apply to these collaborations; |
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| ● | collaborators may not pursue development and commercialization of our product candidate or may elect not to continue or renew development or commercialization programs based on preclinical or clinical trial results, changes in the collaborators’ strategic focus or available funding, or external factors such as an acquisition that diverts resources or creates competing priorities; |
| ● | collaborators may delay clinical trials, provide insufficient funding for a clinical trial program, stop a clinical trial or abandon a product candidate, repeat or conduct new clinical trials or require a new formulation of a product candidate for clinical testing; |
| ● | collaborators could independently develop, or develop with third parties, products that compete directly or indirectly with our product candidate if the collaborators believe that competitive products are more likely to be successfully developed or can be commercialized under terms that are more economically attractive than ours; |
| ● | collaborators with marketing and distribution rights to one or more products may not commit sufficient resources to the marketing and distribution of such product or products; |
| ● | collaborators may not properly maintain or defend our intellectual property rights or may use our proprietary information in such a way as to invite litigation that could jeopardize or invalidate our intellectual property or proprietary information or expose us to potential litigation; |
| ● | collaborators may infringe the intellectual property rights of third parties, which may expose us to litigation and potential liability; |
| ● | disputes may arise between the collaborators and us that result in the delay or termination of the research, development or commercialization of our product candidate or that result in costly litigation or arbitration that diverts management attention and resources; and |
| ● | collaborations may be terminated and, if terminated, may result in a need for additional capital to pursue further development or commercialization of the applicable product candidates. |
Collaboration agreements may not lead to development or commercialization of our product candidate in the most efficient manner or at all. If a collaborator of ours were to be involved in a business combination, the continued pursuit and emphasis on our product development or commercialization program could be delayed, diminished or terminated.
We are dependent on obtaining certain patents and protecting our proprietary rights.
Our success will depend, in part, on our ability to obtain patents, maintain trade secret protection and operate without infringing on the proprietary rights of third parties or having third parties circumvent our rights. We are licensing in patented technologies for our products. The patent positions of biotechnology, biopharmaceutical and pharmaceutical companies can be highly uncertain and involve complex legal and factual questions. Thus, there can be no assurance that any of our anticipated competitors’ portionspatent applications will result in the issuance of patents, that we will develop additional proprietary products that are patentable, that any patents issued to us or those that already have been issued will provide us with any competitive advantages or will not be challenged by any third parties, that the market. Manypatents of our anticipated competitors have existing relationships with manufacturers that mayothers will not impede our ability to market our technology to potential customers and build market share. We do not know that we will be able to compete successfully against currently anticipated or future competitorsbusiness or that competitive pressures will not have a material adverse effect on our business, operating results and financial condition.
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We may require the diversion of substantial funds from our operations and may require management to expend efforts that might otherwise be devoted to our operations. Furthermore, we may not be successful in enforcing our patent rights.
A number of pharmaceutical, biopharmaceutical and biotechnology companies and research and academic institutions have developed technologies, filed patent applications or received patents on various technologies that may be related to or affect our business. Some of these technologies, applications or patents may conflict with our technologies or patent applications. Such conflict could limit the scope of the patents, if any, that we may be able to obtain or result in the denial of our patent applications. In addition, if patents that cover our activities are issued to other companies, there can be no assurance that we would be able to obtain licenses to these patents at a license isreasonable cost or be able to develop or obtain alternative technology. If we do not offered,obtain such licenses, we could encounter delays in the introduction of products, or could find that the development, manufacture or sale of products requiring such licenses could be prohibited. In addition, we could incur substantial costs in defending ourselves in suits brought against us on patents it might be required, if possible,infringe or in filing suits against others to redesign those aspectshave such patents declared invalid.
We are subject to various government regulations.
The manufacture and sale of human therapeutic and diagnostic products in the U.S. and foreign jurisdictions are governed by a variety of statutes and regulations. These laws require approval of manufacturing facilities, controlled research and testing of products and government review and approval of a submission containing manufacturing, preclinical and clinical data in order to obtain marketing approval based on establishing the safety and efficacy of the product heldfor each use sought, including adherence to infringe so ascurrent PIC/S GMP during production and storage, and control of marketing activities, including advertising and labeling.
The product we are currently developing will require significant development, preclinical and clinical testing and investment of substantial funds prior to avoid infringement liability. Any redesign efforts undertaken by us mightits commercialization. The process of obtaining required approvals can be expensive, could delay the introduction or the re-introduction of ourcostly and time-consuming, and there can be no assurance that future products into certain markets, or maywill be so significant assuccessfully developed and will prove to be impractical.
Our existing indebtednessmay adversely affect our ability to protectobtain additional funds and may increase our proprietary technologyvulnerability to economic or business downturns.We are subject to a number of risks associated with our indebtedness, including: 1) we must dedicate a portion of our cash flows from operations to pay debt service costs, and informationtherefore we have less funds available for operations and other purposes; 2) it may be more difficult and expensive to obtain additional funds through financings, if available at all; 3) we are more vulnerable to economic downturns and fluctuations in interest rates, less able to withstand competitive pressures and less flexible in reacting to changes in our industry and general economic conditions; and 4) if we default under any of our existing credit facilities or if our creditors demand payment of a portion or all of our indebtedness, we may not have sufficient funds to make such payments.
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We face substantial competition from other pharmaceutical and biotechnology companies and our operating results may suffer if we fail to seeking patent protection,compete effectively.
The development and commercialization of new drug products is highly competitive. We expect that we relywill face significant competition from major pharmaceutical companies, specialty pharmaceutical companies and biotechnology companies worldwide with respect to our products that we may seek to develop or commercialize in the future. Our competitors may succeed in developing, acquiring or licensing technologies and drug products that are more effective, have fewer or more tolerable side effects or are less costly than any product candidates that we are currently developing or that we may develop, which could render our product candidates obsolete and noncompetitive.
Our commercial opportunity could be reduced or eliminated if our competitors develop and commercialize products that are safer, more effective, have fewer or less severe side effects, are more convenient or are less expensive than any products that we may develop. Our competitors also may obtain FDA or other marketing approval for their products before we are able to obtain approval for ours, which could result in our competitors establishing a strong market position before we are able to enter the market.
Many of our existing and potential future competitors have significantly greater financial resources and expertise in research and development, manufacturing, preclinical testing, conducting clinical trials, obtaining marketing approvals and marketing approved products than we do. Mergers and acquisitions in the pharmaceutical and biotechnology industries may result in even more resources being concentrated among a smaller number of our competitors. Smaller or early stage companies may also prove to be significant competitors, particularly through collaborative arrangements with large and established companies. These competitors also compete with us in recruiting and retaining qualified scientific and management personnel and establishing clinical trial sites and patient registration for clinical trials, as well as in acquiring technologies complementary to, or necessary for, our programs.
If we are unable to establish appropriate internal financial reporting controls and procedures, it could cause us to fail to meet our reporting obligations, result in the restatement of our financial statements, harm our operating results, subject us to regulatory scrutiny and sanction, cause investors to lose confidence in our reported financial information and have a negative effect on trade secrets, know-howthe market price for shares of our Common Stock.
Effective internal controls are necessary for us to provide reliable financial reports and continuing technological advancement in special formulations to achieve and thereaftereffectively prevent fraud. We maintain a competitive advantage. Although we have entered into confidentiality and employment agreements with somesystem of internal control over financial reporting, which is defined as a process designed by, or under the supervision of, our employees, consultants, certain potential customersprincipal executive officer and advisors,principal financial officer, or persons performing similar functions, and effected by our board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.
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As a public company, we cannot be certain that such agreementswill have significant additional requirements for enhanced financial reporting and internal controls. We will be honoredrequired to document and test our internal control procedures in order to satisfy the requirements of Section 404 of the Sarbanes-Oxley Act of 2002, which requires annual management assessments of the effectiveness of our internal controls over financial reporting. The process of designing and implementing effective internal controls is a continuous effort that requires us to anticipate and react to changes in our business and the economic and regulatory environments and to expend significant resources to maintain a system of internal controls that is adequate to satisfy our reporting obligations as a public company.
We cannot assure you that we will not, in the future, identify areas requiring improvement in our internal control over financial reporting. We cannot assure you that the measures we will take to remediate any areas in need of improvement will be successful or that we will be ableimplement and maintain adequate controls over our financial processes and reporting in the future as we continue our growth. If we are unable to effectively protectestablish appropriate internal financial reporting controls and procedures, it could cause us to fail to meet our rightsreporting obligations, result in the restatement of our financial statements, harm our operating results, subject us to regulatory scrutiny and sanction, cause investors to lose confidence in our unpatented trade secrets and know-how. Moreover, others may independently develop substantially equivalent proprietaryreported financial information and techniques or otherwise gain access to our trade secrets and know-how.
Risks Relating to Our Securities
Insiders have substantial control over us, and they could delay or prevent a change in our corporate control even if our other stockholders wanted it to occur.
Our executive officers, directors, and principal stockholders own, in the aggregate, approximately 70.86% of our outstanding Common Stock. As a result of their stockholdings, these stockholders are able to assert substantial control over matters requiring stockholder approval, including the election of directors and approval of significant corporate transactions. This could delay or prevent an outside party from acquiring or merging with us even if our other stockholders wanted it to occur.
The market price of our Common Stock may be volatile and there may not be sufficient liquidity in the market for our securities in order for investors to sell their securities.
The market price of our Common Stock has been and will likely to continue to be volatile. Further,highly volatile, as is the limitedstock market forin general. Factors that may materially affect the market price of our sharesCommon Stock are beyond our control, these factors may make it difficult formaterially adversely affect the market price of our investors to sellCommon Stock, regardless of our commonperformance. In addition, the public stock formarkets have experienced extreme price and trading volume volatility. These broad market fluctuations may influence the market price of our Common Stock. There is currently only a positive return on investment
Our articles of our stock were $0.25 per share (March 24, 2009) and $2.00 per share (August 17, 2009). Any future market pricesincorporation allow for our shares are likelyboard to continue to be very volatile. This price volatility may make it more difficult for our shareholder to sell our shares when desired. We do not know of any one particular factor that has caused volatility in our stock price. However, the stock market in general has experienced price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of listed companies. Broad market factors and the investing public’s negative perception of our business may reduce our stock price, regardless of our operating performance. Further, the volume of our traded shares and the market for our common stock is very limited. During the past fiscal year, there have been several days where no shares of our stock have traded. A larger market for our shares may never develop or be maintained. Market fluctuations and volatility, as well as general economic, market and political conditions, could reduce our market price. As a result, this may make it very difficult for our shareholder to sell our common stock.
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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This report contains forward-looking statements and directors
We will not receive any proceeds from the sale of shares by the selling stockholders named in this prospectus. All proceeds from the sale of the common stock will be paid directly to the selling stockholders.
DETERMINATION OF OFFERING PRICE
The selling stockholders may sell these shares in the over-the-counter market or otherwise, at market prices prevailing at the time of sale, at prices related to the prevailing market price, or at negotiated prices. We will not receive any proceeds from the sale of shares by the selling stockholders.
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MANAGEMENT DISCUSSION AND ANALYSIS
The following discussion provides information which management believes is relevant to an assessment and understanding of our results of operations and financial condition. The discussion should be read along with our audited condensed consolidated financial statements and notes for the fiscal years ended September 30, 2015 and 2014 and the three months ended March 31, 2016 and 2015. The following discussion and analysis contains forward-looking statements based upon current expectations that involve risks and uncertainties, such as our plans, objectives, expectations and intentions. Our actual results may differ significantly from the results, expectations and plans discussed in these forward-looking statements. We use words such as “anticipate,” “estimate,” “plan,” “project,” “continuing,” “ongoing,” “expect,” “believe,” “intend,” “may,” “will,” “should,” “could,” and similar expressions to identify forward-looking statements.
See “Cautionary Note Concerning Forward-Looking Statements.”
Introduction
Currently, we are a holding company operating through our wholly owned subsidiary, American BriVision Corporation, a Delaware corporation (“BriVision”). BriVision was incorporated in 2015 in the State of Delaware. It is a biotechnology company focused on the development of new drugs and innovative medical devices to fulfill unmet medical needs. Following the Share Exchange (as described herein below), we have abandoned our prior business plan and we are now pursuing BriVision’s historical businesses and proposed businesses, which focus on the development of new drugs and innovative medical devices to fulfill unmet medical needs. The business model of the Company is to integrate research achievements from world-famous institutions, conduct clinical trials of translational medicine for Proof of Concept (“POC”), out-license to international pharmaceutical companies, and exploit global markets.
Overview
Prior to the Share Exchange, we were a company operating a web site for the sale of women's apparel.
We have had limited operations and have been issued a "going concern" opinion by our auditor, based upon our reliance on the sale of our common stock as the sole source of funds for our future operations.
On February 8, 2016, a Share Exchange Agreement (“Share Exchange Agreement”) was entered into by and among American BriVision (Holding) Corporation(the “Company”), American BriVision Corporation, a Delaware Corporation (“BriVision”), Euro-Asia Investment & Finance Corp. Limited, a company incorporated under the laws of Hong Kong Special Administrative Region of Taiwan (“Euro-Asia”), being the owners of record of 52,336,000 common shares of the Company, and the persons listed in Exhibit A thereof (the “BriVision Shareholders”), being the owners of record of all of the issued share capital of BriVision (the “BriVision Stock”). Pursuant to the Share Exchange Agreement, upon surrender by the BriVision Shareholders and the cancellation by BriVision of the certificates evidencing the BriVision Stock as registered in the name of each BriVision Shareholder, and pursuant to the registration of the Company in the register of members maintained by BriVision as the new holder of the BriVision Stock and the issuance of the certificates evidencing the aforementioned registration of the BriVision Stock in the name of the Company, the Company would issue 52,936,583 shares (the “Acquisition Stock”) (subject to adjustment for fractionalized shares as set forth below) of the Company’s common stock to the BriVision Shareholders (or their designees), and 51,945,225 shares of the Company’s common stock owned by Euro-Asia should be cancelled and retired to treasury. The Acquisition Stock collectively should represent 79.70% of the issued and outstanding common stock of the Company immediately after the Closing, in exchange for the BriVision Stock, representing 100% of the issued share capital of BriVision. As a result of the exchange of the BriVision Stock for the Acquisition Stock (the “Share Exchange”), BriVision became a wholly owned subsidiary (the “Subsidiary”) of the Company and there was a change of control of the Company following the closing. There were no warrants, options or other equity instruments issued in connection with the share exchange agreement.
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As a result of the consummation of the Share Exchange, BriVision is now our wholly-owned subsidiary and its shareholders own approximately 79.70% of our issued and outstanding common stock.
All references to the “Combined Company” refer to American BriVision (Holding) Corporation and its wholly owned subsidiary, American BriVision Corporation.
Accounting Treatment of the Merger
For financial reporting purposes, the Share Exchange represents a “reverse merger” rather than a business combination and BriVision is deemed to be the accounting acquirer in the transaction. The Share Exchange is being accounted for as a reverse-merger and recapitalization. BriVision is the acquirer for financial reporting purposes and the Company is the acquired company. Consequently, the assets and liabilities and the operations that will be reflected in the historical financial statements prior to the Share Exchange will be those of BriVision and will be recorded at the historical cost basis of BriVision, and the consolidated financial statements after completion of the Share Exchange will include the assets and liabilities of the Company and BriVision, and the historical operations of BriVision and operations of the combined entities (American Brivision (Holding) Corporation and its wholly owned subsidiary Brivision) from the closing date of the Share Exchange.
For more information about the Share Exchange, please refer to the current report on Form 8-K we filed on February 12, 2016.
Following the Share Exchange, we have abandoned our prior business plan and we are now pursuing BriVision’s historical businesses and proposed businesses. BriVision is a biotechnology company focused on the development of new drugs to fulfill unmet medical needs. The business model of the Company is to integrate research achievements from world-famous institutions (such as Memorial Sloan Kettering Cancer Center (“MSKCC”) and MD Anderson Cancer Center), conduct clinical trials for Proof of Concept (“POC”), out-license to international pharmaceutical companies, and exploit global markets.
We currently have five products that are licensed to us:
·ABV- 1501 Triple Negative Breast Cancer - Combination therapy for Triple Negative Breast Cancer (TNBC)
·ABV-1502 Solid Tumor with Anti-PD1 - Combination therapy for solid tumors
·ABV-1503 Chronic Lymphocytic Leukemia - Combination therapy for Chronic Lymphocytic Leukemia
·ABV-1504 Major Depressive Disorder - Major Depressive Disorder (MDD)
·ABV-1505 Attention Deficit Hyperactivity Disorder - Attention Deficit Hyperactivity Disorder
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Those 5 drugs all are ready to go into phase II clinical study. ABV-1504 already starts phase II clinical study in Taiwan and we expect it will start in the States this year. ABV-1505 got IND (Investigational New Drug Application) by US FDA on January 2016. ABV-1501 Phase II IND will be filed on February 2016. ABV-1502 and ABV-1503are preparing IDE package now.
Recent Developments
Forward Stock Split
On March 21, 2016, our Board approved an amendment to Articles of Incorporation to effect a forward split at a ratio of 1 to 3:141 and increase the number of our authorized shares of common stock, par value $0.001 per share, to 360,000,000, which went effective on April 8, 2016. The amendment to Articles of Incorporation was approved by the majority of the shareholders of the Company.
Plans of Operation
BriVision will select potential drug candidates (including but not limited to botanical drugs) from different research institutes, start to develop it from pre-clinical stage (including all CMC process and animal study) to clinical study stage. When the phase II clinical trial is finished and the efficacy is approved, we will have reached the “proof of concept” stage. We plan to out license our drugs to big pharmaceutical companies, coordinate with them to develop and enhance the drugs and exploit global markets.
On December 29, 2015, BriVision entered into a Collaborative Agreement (the “Collaborative Agreement”) with BioLite. Pursuant to the Collaborative Agreement, BioLite granted sole licensing rights to BriVision of drug and therapeutic use of five products: BLI-1005 CNS-Major Depressive Disorder; BLI-1008 CNS-Attention Deficit Hyperactivity Disorder; BLI-1401-1 Anti-Tumor Combination Therapy-Solid Tumor with Anti-PD-1; BLI-1401-2 Anti-Tumor Combination Therapy-Triple Negative Breast Cancer; and BLI-1501 Hematology-Chronic Lymphocytic Leukemia, in USA and Canada. Under the Collaborative Agreement, BriVision should pay a total of $100,000,000 in cash or stock of BriVision with equivalent value, according to the following schedule:
·upfront payment shall upon the signing of this Collaborative Agreement: 3.5% of total payment. After receiving upfront payment from BriVision, BioLite has to deliver all data to BriVision in one week.
·upon the first IND submission, BriVision shall pay, but no later than December 15, 2016: 6.5% of total payment. After receiving second payment from BriVision, BioLite has to deliver IND package to BriVision in one week.
·at the completion of first phase II clinical trial, BriVision shall pay, but no later than September 15, 2017: 15% of total payment. After receiving third payment from BriVision, BioLite has to deliver phase II clinical study report to BriVision in three months.
·upon the phase III IND submission, BriVision shall pay, but no later than December 15, 2018: 20% of total payment. After receiving forth payment from BriVision, BioLite has to deliver IND package to BriVision in one week.
·at the completion of phase III, BriVision shall pay, but no later than September 15, 2019:25% of total payment. After receiving fifth payment from BriVision, BioLite has to deliver phase III clinical study report to BriVision in three months
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·upon the NDA submission, BriVision shall pay, but no later than December 15, 2020, BriVision shall pay: 30% of total payment. After receiving sixth payment from BriVision, BioLite has to deliver NDA package to BriVision in one week
On May 6 , 2016, we and Biolite amended the payment terms under the Collaborative Agreement by entering into a Milestone Payment Agreement, pursuant to which we paid $2,600,000 in cash and $900,000 in newly issued shares of our common stock, at the price of $1.60 per share, for an aggregate number of 562,500 shares.
Revenue Generation
Most of our licensed products are still under development and trial stage. Therefore, no revenue is expected in near term.
Research and Development
During the first nine months for the period ended June 30, 2016, we have spent approximately $0 on research and development.
Critical Accounting Policies and Estimates
We believe that the following accounting policies are the most critical to aid you in fully understanding and evaluating this “Management’s Discussion and Analysis of Financial Condition and Results of Operation.”
Basis of Presentation
The accompanying audited financial statements and related notes have been prepared in accordance with generally accepted accounting principles in the United States of America (U.S. GAAP). This basis of accounting involves the application of accrual accounting and consequently, revenues and gains are recognized when earned, and expenses and losses are recognized when incurred. The Company’s financial statements are expressed in U.S. dollars.
Forward Stock split
On March 21, 2016, the Board of Directors of the Company approved an amendment to Articles of Incorporation to effect a forward split at a ratio of 1 to 3:141 and increase the number of our authorized shares of common stock, par value $0.001 per share, to 360,000,000, which was effective on April 8, 2016. The majority of the shareholders of the Company approved the amendment to Articles of Incorporation. See Note 4 for more details.
Use of Estimates
The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the amount of revenues and expenses during the reporting periods. Actual results could differ materially from those results.
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Fair Value Measurements
The Company applies the provisions of ASC Subtopic 820-10, “Fair Value Measurements”, for fair value measurements of financial assets and financial liabilities and for fair value measurements of nonfinancial items that are recognized or disclosed at fair value in the financial statements. ASC 820 also establishes a framework for measuring fair value and expands disclosures about fair value measurements.
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, the Company considers the principal or most advantageous market in which it would transact and it considers assumptions that market participants would use when pricing the asset or liability.
ASC 820 establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 establishes three levels of inputs to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to measurements involving significant unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are as follows:
· Level 1 inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.
· Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the assets or liability, either directly or indirectly, for substantially the full term of the financial instruments.
· Level 3 inputs to the valuation methodology are unobservable and significant to the fair value.
There were no assets or liabilities measured at fair value on a recurring basis subject to the disclosure requirements of ASC 820 as of June 30, 2016.
Cash and Cash Equivalents
The Company considers highly liquid investments with maturities of three months or less, when purchased, to be cash equivalents. As of June 30, 2016 and September 30, 2015, the Company’s cash and cash equivalents amounted $84,904 and $994,830, respectively. All of the Company’s cash deposit is held in a financial institution located in PRC where there is currently regulation mandated on obligatory insurance of bank accounts. The Company believes this financial institution is of high credit quality.
Income Taxes
The Company accounts for income taxes using the asset and liability approach which allows the recognition and measurement of deferred tax assets to be based upon the likelihood of realization of tax benefits in future years. Under the asset and liability approach, deferred taxes are provided for the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. A valuation allowance is provided for deferred tax assets if it is more-likely-than-not that these items will expire before the Company is able to realize their benefits, or that future deductibility is uncertain.
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Under ASC 740, a tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The evaluation of a tax position is a two-step process. The first step is to determine whether it is more-likely-than-not that a tax position will be sustained upon examination, including the resolution of any related appeals or litigations based on the technical merits of that position. The second step is to measure a tax position that meets the more-likely-than-not threshold to determine the amount of benefit to be recognized in the financial statements. A tax position is measured at the largest amount of benefit that is greater than 50 percent likely of being realized upon ultimate settlement. Tax positions that previously failed to meet the more-likely-than-not recognition threshold should be recognized in the first subsequent period in which the threshold is satisfied. Previously recognized tax positions that no longer meet the more-likely-than-not criteria should be de-recognized in the first subsequent financial reporting period in which the threshold is no longer satisfied. Penalties and interest incurred related to underpayment of income tax are classified as income tax expense in the year incurred. No significant penalty or interest relating to income taxes has been incurred during the period from July 21, 2015 (inception) to June 30, 2016. GAAP also provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosures and transition.
As of June 30, 2016 and September 30, 2015, the Company’s income tax expense amounted $836 and $0, respectively.
Recent Accounting Pronouncements
From time to time, new accounting standards issued by the Financial Accounting Standards Board (“FASB”) or other standard setting bodies that are adopted by the Company as of the specified effective date. Unless otherwise discussed, the Company believes that the impact of recently issued standards that are not yet effective will not have a material impact on its financial position or results of operations upon adoption. The recent accounting standards are not expected to have a material impact on the consolidated financial statements upon adoption.
Off-Balance Sheet Arrangements
We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures, or capital resources that is material to investors.
Limited Operating History; Need for Additional Capital
There is no historical financial information about us upon which to base an evaluation of our performance. As of the date of this filing, we have not generated any revenues from operations. We cannot guarantee we will be successful in our filingsbusiness operations. Our business is subject to risks inherent in the establishment of a new business enterprise, including limited capital resources, possible delays in the launching of our games and market or wider economic downturns. We do not believe we have sufficient funds to operate our business for the next 12 months.
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We have no assurance that future financing will be available to us on acceptable terms, or at all. If financing is not available on satisfactory terms, we may be unable to continue, develop or expand our operations. Equity financing could result in additional dilution to existing shareholders.
If we are unable to raise additional capital to maintain our operations in the future, we may be unable to carry out our full business plan or we may be forced to cease operations.
The following discussion and analysis should be read in conjunction with the audited financial statements of BriVision for the period ended September 30, 2015 and accompanying notes that appear in our Annual Report on Form 8-K, as filed with the Securities and Exchange Commission including, specifically,on November 27, 2015 and the “Risk Factors” enumerated herein.
Results of Operation
Our financial statements have been prepared assuming that we believewill continue as a going concern and, accordingly, do not include adjustments relating to the expectations reflectedrecoverability and realization of assets and classification of liabilities that might be necessary should we be unable to continue in operation. We expect we will require additional capital to meet our long term operating requirements. We expect to raise additional capital through, among other things, the forward-looking statements are reasonable,sale of equity or debt securities, but we cannot guarantee that we will be able to achieve the same.
Results of Operations — Three Months Ended June 30, 2016 Compared to The Period from July 21, 2015 (Inception) to September 2015.
The following table presents, for the three months indicated, our consolidated statements of operations information.
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| Three months ended June 30, 2016 | For the period From July 21, 2015 (inception) to September 30, 2015 | |||||||
| REVENUE | $ | - | $ | - | ||||
| COST OF REVENUE | - | - | ||||||
| GROSS LOSS | - | - | ||||||
| OPERATING EXPENSES | ||||||||
| Selling, general and administrative expenses | 289,098 | 315,602 | ||||||
| Total Operating Expenses | 289,098 | 315,602 | ||||||
| NET LOSS FROM OPERATIONS | (289,098 | ) | (315,602 | ) | ||||
| OTHER (EXPENSES) INCOME, NET | ||||||||
| Bank interest income | 361 | - | ||||||
| Gain on exchange differences | 89 | - | ||||||
| Interest Expense | (3,753 | ) | - | |||||
| Total Other (Expenses) Income | (3,303 | ) | - | |||||
| NET LOSS BEFORE TAXES | (292,401 | ) | (315,602 | ) | ||||
| Income tax expense | (836 | ) | - | |||||
| NET LOSS | (293,237 | ) | (315,602 | ) | ||||
Revenues. We generated zero and zero in revenues and zero and zero in cost of sales for the three months ended June 30, 2016 and the period from July 21, 2015 (inception) to September 30, 2015.
Operating Expenses. Our operating expenses were $289,098 in the three months ended June 30, 2016 as compared to $315,602 for the period from July 21, 2015 (inception) to September 30, 2015. The decrease of $26,504 in the current period is the result of fewer professional fees.
Interest Expense. The interest expense were $3,753 in the three months ended June 30, 2016 as compared to $0 for the period from July 21, 2015 (inception) to September 30, 2015.
Net Loss. The net loss was $293,237 for the three months ended June 30, 2016 compared to a loss of $315,602 for the period from July 21, 2015 (inception) to September 30, 2015. The result of decrease of net loss in current period was due to the decreased professional fees incurred during the nine months ended June 30, 2016.
Results of Operations — Nine Months Ended June 30, 2016 Compared to The Period from July 21, 2015 (Inception) to September 2015.
The following table presents, for the three months indicated, our consolidated statements of operations information.
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| Nine months ended June 30, 2016 | For the period From July 21, 2015 (inception) to September 30, 2015 | |||||||
| REVENUE | $ | - | $ | - | ||||
| COST OF REVENUE | 32 | - | ||||||
| GROSS LOSS | (32 | ) | - | |||||
| OPERATING EXPENSES | ||||||||
| - | - | |||||||
| Selling, general and administrative expenses | 349,486 | 315,602 | ||||||
| Total Operating Expenses | 349,486 | 315,602 | ||||||
| NET LOSS FROM OPERATIONS | (349,518 | ) | (315,602 | ) | ||||
| OTHER (EXPENSES) INCOME, NET | ||||||||
| Interest income | 361 | - | ||||||
| Gain on exchange differences | 141 | - | ||||||
| Interest expense | (3,753 | ) | ||||||
| Total Other (Expenses) Income | (3,251 | ) | - | |||||
| NET LOSS BEFORE TAXES | (352,769 | ) | (315,602 | ) | ||||
| Income tax expense | 836 | - | ||||||
| NET LOSS | (353,605 | ) | (315,602 | ) | ||||
Revenues. We generated zero and zero in revenues and $32 and zero in cost of sales for the nine months ended June 30, 2016 and the period from July 21, 2015 (inception) to September 30, 2015.
Operating Expenses. Our operating expenses were $349,486 in the nine months ended June 30, 2016 as compared to $315,602 for the period from July 21, 2015 (inception) to September 30, 2015. The decrease of $33,884 in the current period is the result of fewer professional fees.
Interest Expense. The interest expense were $361 in the nine months ended June 30, 2016 as compared to $0 for the period from July 21, 2015 (inception) to September 30, 2015
Net Loss. The net loss was $353,605 for the nine months ended June 30, 2016 compared to a loss of $315,602 for the period from July 21, 2015 (inception) to September 30, 2015. The result of decrease of net loss in current period was due to the decreased professional fees incurred during the nine months ended June 30, 2016.
Liquidity and Capital Resources
Working Capital
| As of June 30, 2016 ($) | As of September 30,2015 ($) | |||||||
| Current Assets | 3,584,904 | 998,645 | ||||||
| Current Liabilities | 2,061,446 | 369,103 | ||||||
| Working Capital (deficit) | 1,523,458 | 629,542 | ||||||
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Cash Flows
Cash Flow from Operating Activities
During the nine months ended June 30, 2016 and the period from July 21, 2015 (inception) to September 30, 2015, the net cash used in and generated from operating activities were $3,857,447 and $45,871 respectively. There was increase in prepayment and accounts payable during the nine months ended June 30, 2016.
Cash Flow from Investing Activities
During the nine months ended June 30, 2016 and the period from July 21, 2015 (inception) to September 30, 2015, there were no net cash used in or generated from investing activities.
Cash Flow from Financing Activities
During the nine months ended June 30, 2016 and the period from July 21, 2015 (inception) to September 30, 2015, the net cash generated from financing activities were $2,947,521 and $948,959 respectively. A short-term loan raised during the nine months ended June 30, 2016.
Critical Accounting Policy and Estimates
We believe that the following accounting policies are the most critical to aid you in fully understanding and evaluating this “Management’s Discussion and Analysis of Financial Condition and Results of Operation.”
Off-Balance Sheet Arrangements
We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results levels of operations, liquidity, capital expenditures, or capital resources that is material to investors.
The Industry
Biotechnology industry provides breakthrough products and technologies to combat debilitating and rare diseases, reduce our environmental footprint, feed the hungry, use less and cleaner energy, and have safer, cleaner and more efficient industrial manufacturing process.
The biotechnology industry is an extremely important sector in the developed world's economies and human health. Biotechnology companies need to spend large research budgets during the R&D period. Usually it will take 12-16 years to develop a new drug and a new medical device. Not only is a small biotechnology company’s R&D budget smaller than a large, well-known biotechnology company or an international company, but the larger companies are typically more attractive to researchers or employers and maintains better R&D resources. However, at this early stage, we are developing our products, which are licensed from a related party which substantially reduces our R&D cost.
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Business Overview
We are a clinical stage biopharmaceutical company focused on utilizing our licensed technology to (i) enhance the development of pre-existing pharmaceutical products for the treatment of various cancer indications and other diseases, (ii) prospectively identify patients that may respond to such pharmaceutical products and (iii) commercialize such pharmaceutical products for license in various markets. Our business strategy is to integrate research achievements from medical research institutions (such as Memorial Sloan Kettering Cancer Center (“MSKCC”) and MD Anderson Cancer Center), conduct clinical trials of translational medicine for Proof of Concept (“POC”), out-license to pharmaceutical companies. We currently have no revenue generated from our principal operations in clinical product development through research and development efforts. Currently, our only operation is the research and development of five compound licensed to us by BioLite Inc. (“BioLite”), a company formed in Taiwan who is one of our principal shareholders.
Collaboration Agreement with BioLite
On December 29, 2015, we entered into a Collaborative Agreement with BioLite pursuant to which BioLite granted us sole licensing rights for drug and therapeutic use of five compounds they developed: BLI-1005 CNS-Major Depressive Disorder; BLI-1008 CNS-Attention Deficit Hyperactivity Disorder; BLI-1401-1 Anti-Tumor Combination Therapy-Solid Tumor with Anti-PD-1; BLI-1401-2 Anti-Tumor Combination Therapy-Triple Negative Breast Cancer; and BLI-1501 Hematology-Chronic Lymphocytic Leukemia, in USA and Canada. Our CEO and director, Eugene Jiang, is also a director of Biolite.
Pursuant to the Collaborative Agreement, an upfront payment of $3,500,000 (the “Milestone Payment”), which is 3.5% of total payments due under the Collaborative Agreement, was to be paid by us upon signing of the Collaboration Agreement. On May 6, 2016, we and Biolite amended the payment terms under the Collaborative Agreement by entering into a Milestone Payment Agreement, pursuant to which we paid $2,600,000 in cash and $900,000 in newly issued shares of our common stock, at the price of $1.60 per share, for an aggregate number of 562,500 shares.
Our Licensed Compound
We have renamed the five compounds for our purpose and below a brief description of each of the five compounds.
| I. | ABV- 1501 Triple Negative Breast Cancer - Combination therapy for Triple Negative Breast Cancer (TNBC) |
| · | Maitake mushroom extract Phase I clinical trial was preformed by MSKCC and safety was approved. |
| · | ABV-1501 US FDA Phase II IND cross reference with MSKCC Maitake and Phase II Investigational New Drug (IND) was approved in March 2016. |
| · | We are currently negotiating with MSKCC for Phase II clinical study. If MSKCC agreed with our terms, we anticipate to start phase II clinical trial during 2017 Q1and finish the phase II clinical trial by 2018 Q3. |
| · | We plan to apply for Institutional review board (IRB reviewing during 2016 Q4 |
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| II. | ABV-1502 Solid Tumor with Anti-PD1 - Combination therapy for solid tumors with Anti-PD-1 |
| · | This is a kind of anti-tumor Combination therapy of Maitake mushroom extract with standard therapy and anti- PD1 drug for solid tumor. |
| · | Maitake mushroom extract Phase I clinical trial was preformed by MSKCC and safety was approved. |
| · | Currently, we are cooperating with MD Anderson Cancer Center and one of top cancer center in the U.S. to develop Phase II clinical trial IND package |
| III. | ABV-1503 Chronic Lymphocytic Leukemia - Combination therapy for Chronic Lymphocytic Leukemia (CLL) |
| · | Phase II study of Epigallocatechin gallate (EGCG) for CLL. |
| · | We are cooperating with MSKCC to prepare clinical trial agreement. |
| IV. | ABV-1504 Major Depressive Disorder - Major Depressive Disorder (MDD) |
| · | This is Polygala extract for Major Depressive Disorder |
| · | BioLite performed Phase I clinical trial and the safety was proved. |
| · | BioLite has obtained US FDA Phase II Part One/Part Two IND approval and the Phase II Part One was completed with good result. |
| · | BioLite plans to start Phase II Part Two at 2016 Q3 and currently working with five Taiwan medical sites and Stanford University to prepare clinical trial agreement |
| V. | ABV-1505 Attention Deficit Hyperactivity Disorder - Attention Deficit Hyperactivity Disorder |
| · | This is Polygala extract for Attention Deficit Hyperactivity Disorder. |
| · | Same Active Pharmaceutical Ingredients (API) with ABV-1504. Safety was approved. |
| · | BioLite has obtained U.S. FDA Phase II IND approval and is currently negotiating with top medical site for Phase II clinical trial. |
| · | BioLite intends to submit for IRB approval during 2016 Q4 |
| · | BioLite plans to start Phase II clinical trial during 2017 Q1 and complete by 2018 Q3. |
Market Opportunity and Growth Strategy/Business Plan
ABVC will focus on the development of new drugs and innovative medical devices to fulfill unmet medical needs. The business model of ABVC is to integrate research achievements from world-renown medical research institutions (Such as MSKCC and MD Anderson Cancer Center), conduct clinical trials of translational medicine for POC (Proof of Concept), out-license to international pharmaceutical companies, and tap into global market opportunities.
Our business plan is to conduct Phase II clinical trial for the above licensed compound (or potential medical device) in North America (US or Canada) and if we obtain satisfactory results in the Phase II clinical trial for POC, we will out-license the compound to big international pharmaceutical companies for further development.
The competitive advantages of our business model are:
1. Once we complete POC, we will co-develop our product with leading big international pharmaceuticals and in turn, receive more funding for our research and development.
2. Our business model allows us to obtain return on investment (ROI) in a shorter period of time, and thus improve our cash flow circumstances.
3. We will have sustainable income to develop our company.
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Currently, we are in the process of developing five products, but we will continue to search for the appropriate products including potential medical device for in-licensing to our company for further development and generate more revenue for our company.
Intellectual Property
We currently do not own any patent or trademark.
Employees
As of the date of the prospectus, we have seven full-time employees and one consultant. None of our employees are represented by a labor organization and we consider our relationship with our employees to be good.
Our Facilities
| Address | Size | Leased/Owned/Granted | Function | Monthly Rent | ||||
Building 27, 238 North City Road II, Xitun District, Taizhong City Taiwan | 2,772 sq. feet | Leased | Corporate office | $0.00 | ||||
| 11 Sawyers Peak Drive, Goshen, NY 10924 | 1,000sq. feet | Leased | Corporate office | $0.00 |
Government Regulation
Regulation by governmental authorities in the U.S. and other countries is a significant factor in development, manufacture and marketing of our proposed pharmaceutical products and in our ongoing research and product development activities. The nature and extent to which such regulation applies to us will vary depending on the nature of any products that may be developed by us. We anticipate that many, if not all, of our proposed products will require regulatory approval by governmental agencies prior to commercialization. Our products are subject to rigorous pre-clinical test and clinical trial and other approval procedures of the FDA, and similar regulatory authorities in European and other countries. Various governmental statutes and regulations also govern or influence clinical trial, Chemistry, Manufacture and Control (CMC) related to such products and their marketing. The process of obtaining these approvals and the subsequent compliance with appropriate statutes and regulations require the expenditure of substantial time and money, and there can be no guarantee that approvals will be granted.
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FDA Approval Process
Prior to commencement of clinical studies involving humans, pre-clinical testing of new pharmaceutical products is generally conducted on animals in the laboratory to evaluate the potential efficacy and safety of the product candidate. The results of these studies are submitted to the FDA as a part of an Investigational New Drug (“IND”) application, which must become effective before clinical testing in humans can begin. Typically, human clinical evaluation involves a time-consuming and costly three-phase process. In Phase I, clinical trials are conducted with a small number of people to establish safety pattern of drug distribution and metabolism within the body. In Phase II, clinical trials are conducted with groups of patients afflicted with a specific disease in order to determine preliminary efficacy, possible dosages and expanded evidence of safety. In some cases, an initial trial is conducted in diseased patients to assess both preliminary efficacy and preliminary safety and patterns of drug metabolism and distribution, in which case it is referred to as a Phase I/II trial. In Phase III, large-scale, multi-center, comparative trials are conducted with patients afflicted with a target disease in order to provide enough data to demonstrate the efficacy and safety required by the FDA. The FDA closely monitors the progress of each of the three phases of clinical testing; and may, at its discretion, re-evaluate, alter, suspend or terminate the testing based upon the data which have been accumulated to that point and its assessment of the risk/benefit ratio to the patient. Monitoring of all aspects of the study to minimize risks is a continuing process. All adverse events must be reported to the FDA.
The results of the pre-clinical and clinical testing on a non-biologic drug and certain diagnostic drugs are submitted to the FDA in the form of a New Drug Application (“NDA”) for approval prior to commencement of commercial sales. In the case of vaccines or gene and cell therapies, the results of clinical trials are submitted as a Biologics License Application (“BLA”). In responding to a NDA or BLA, the FDA may grant marketing approval, request additional information or refuse to approve if the FDA determines that the application does not satisfy its regulatory approval criteria. There can be no assurance that approvals will be granted on a timely basis, if at all, for any of our proposed products.
European and Other Regulatory Approval
Whether or not FDA approval has been obtained, approval of a product by comparable regulatory authorities in Europe and other countries will likely be necessary prior to commencement of marketing the product in such countries. The regulatory authorities in each country may impose their own requirements and may refuse to grant an approval, or may require additional data before granting it, even though the relevant product has been approved by the FDA or another authority. As with the FDA, the regulatory authorities in the European Union (“EU”), Australia and other developed countries have lengthy approval processes for pharmaceutical products. The process for gaining approval in particular countries varies, but generally follows a similar sequence to that described for FDA approval. In Europe, the European Committee for Proprietary Medicinal Products provides a mechanism for EU-member states to exchange information on all aspects of product licensing. The EU has established a European agency for the evaluation of medical products, with both a centralized community procedure and a decentralized procedure, the latter being based on the principle of licensing within one member country followed by mutual recognition by the other member countries.
We are also subject to various U.S. federal, state, local and international laws, regulations and recommendations relating to the treatment of oocyte donors, the manufacturing environment under which human cells for therapy are derived, safe working conditions, laboratory and manufacturing practices and the use and disposal of hazardous or potentially hazardous substances, including radioactive compounds and infectious disease agents, used in connection with our research work. We cannot accurately predict the extent of government regulation which might result from future legislation or administrative action.
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Legal Proceedings
The Company filed for Chapter 7 bankruptcy protection on May 15, 2013 and subsequently the corporate shell emerged as its only unencumbered asset on September 19, 2014 using "fresh start" accounting under section 852-10-45-17 as of date of sale corporate shell to reflect intangible assets sale through section 363 of the US bankruptcy code. Any business description below and all reporting results of the operating results reported in this filing for the fiscal year ending September 30, 2015 and 2014 are post "fresh start" activity performanceand not comparable to prior results. Post bankruptcy the company has been operating a web site for the sale of women's apparel. Other than disclosed herein, we are currently not a party to any material legal or achievementsadministrative proceedings and are not aware of any pending legal or administrative proceedings against us. We may differ from time to time become a party to various legal or administrative proceedings arising in the past. You should not place undue reliance on these forward-looking statements, which speak onlyordinary course of our business.
The following table sets forth the name, age, and position of our sole officer and director as of the date of this report. Exceptprospectus. Executive officers are elected annually by our Board of Directors. Each executive officer holds his office until he resigns, is removed by the Board, or his successor is elected and qualified. Directors are elected annually by our stockholders at the annual meeting. Each director holds his office until his successor is elected and qualified or his earlier resignation or removal.
The officers of our company are appointed by the board of directors and hold office until their death, resignation or removal from office. The directors and executive officers, their ages, positions held, and duration as such, are as set forth below.
| Name | Position Held | Age | ||||
| Eugene Jiang | Chief Executive Officer, Chief Financial Officer, Chairman, Director, President, | 29 | ||||
| Kira Huang | Chief Financial Officer, Secretary, Treasurer | 46 |
Eugene Jiang – Chief Executive Officer, Chief Financial Officer, Chairman, Director, President,
Mr. Eugene Jiang, age 29, has served as the CEO/Director of American BriVision Corporation which started business since July 2015 through present. From June 2015 until present, Mr. Jiang also serves as Director for BioLite Incorporation. He also serves as CEO for Genepro Investment Company since March 2010. Mr Jiang obtained an EMBA degree from The University of Texas in Arrington in 2009. And in 2008, Mr. Jiang received a bachelor’s degree in Physical Education from Fu Jen Catholic University.
Kira Huang-Chief Financial Officer, Secretary, Treasurer
Kira Huang, has served as Chief Financial Officer of American BriVisionCorporation since November2015. She served as Finance Manager in Coface credit insurance company from 2010 to 2014, and as country controlling of Moody’s Taiwan Corporation from 2008 to 2010. She holds an accounting bachelor degree from Eastern Michigan University and also is a certified public accountant.
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Significant Employees
The following are employees who are not executive officers, but who are expected to make significant contributions to our business:
(Frank)Chih-Chung Liu- Chief Scientific Officer of American BriVision Corporation
Mr. Frank Liu, age 52, has served as the Chief Scientific Officer since our inception. From 2010-2014, he was an associate researcher/cross strait medical affair project manager, Division of Resource Development, Center for Drug Evaluation, Taiwan. From April 2014 until present. Mr. Liu also serves as Director of Research and Development for BioFirst Corporation.
He received his Bachelor of Medical Science degree from Medical College, Jinan University, China. Major in Clinical Medicine and he got both of his Master of Science degree from California University of Pennsylvania, Pennsylvania U.S.A. major in Biology and his Bachelor of Science degree from Geneva College, Pennsylvania U.S.A. Major in Biology, Minor in Chemistry.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Exchange Act and the rules thereunder require our officers and directors, and persons that own more than 10% of a registered class of our equity securities, to file reports of ownership and changes in ownership with the Securities and Exchange Commission and to furnish us with copies. Based solely on our review of the copies of the Section 16(a) forms received by us, or written representations from certain reporting persons, we believe that none of our officers, directors, and greater than 10% beneficial owners filed on a timely basis reports required by law, we do not undertake to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.
Code of Ethics
Our board of directors has adopted a Policy Statement on Business Ethics and Conflicts of Interest (“Code of Ethics”) applicable to all employees, including the Company’s chief executive officer and chief financial officer. A copy of the Code of Ethics and Business Conduct is available on the Company’s website http://content.stockpr.com/onehorizongroup/media/250c1db923f658aca6cc69dfc35c7f89.pdf
Board Leadership Structure and the Board’s Role in Risk Oversight.
The Board of Directors is led by the Chairman who is also the Chief Executive Officer. Although our sole officer is also our sole director, the Board believes that the most effective leadership structure at this time is not to separate the roles of Chairman and Chief Executive Officer. A combined structure provides the Company with a single leader who represents the company to our stockholders, regulators, business partners and other stakeholders, among other reasons set forth below. Should the Board conclude otherwise, the Board will separate the roles and appoint an independent director.
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This structure creates efficiency in the preparation of the meeting agendas and related Board materials as the Company’s Chief Executive Officer works directly with those individuals preparing the necessary Board materials and is more connected to the overall daily operations of the Company. Agendas are also prepared with the permitted input of the full Board of Directors allowing for any concerns or risks of any individual director to be discussed as deemed appropriate. The Board believes that the Company has benefited from this structure, and Dr. Jiang's continuation in the combined role of the Chairman and Chief Executive Officer is in the best interest of the stockholders.
The Company believes that the combined structure is necessary and allows for efficient and effective oversight, given the Company’s relatively small size, its corporate strategy and focus
The Board of Directors does not have a specific role in risk oversight of the Company. The Chairman, President and Chief Executive Officer and other executive officers and employees of the Company provide the Board of Directors with information regarding the Company’s risks.
Director Independence
Presently, we are not required to comply with the director independence requirements of any securities exchange since we are listed on OTC markets.
The following tables set forth, for each of the last two completed fiscal years of the Company, the total compensation awarded to, earned by or paid to any person who was a principal executive officer during the preceding fiscal year and every other highest compensated executive officers earning more than $100,000 during the last fiscal year (together, the “Named Executive Officers”). The tables set forth below reflect quotations priorthe compensation of the Named Executive Officers.
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Summary Compensation Table
Name and Principal | Year | Salary ($) | Bonus ($) | Stock Awards | Option Awards ($) | Non-Equity Incentive Plan Compensation | Change in Pension and Deferred Compensation Earnings ($) | All Other Compensation | Total ($) | |||||||||||||||||||||||||
| Shulamit Lazar (1) | 2015 | Nil | Nil | 60,000 | Nil | Nil | Nil | Nil | 60,000 | |||||||||||||||||||||||||
| 2014 | Nil | Nil | Nil | Nil | Nil | Nil | Nil | Nil | ||||||||||||||||||||||||||
| Eugene Jiang (2) | 2015 | Nil | Nil | Nil | Nil | Nil | Nil | Nil | Nil | |||||||||||||||||||||||||
| 2014 | Nil | Nil | Nil | Nil | Nil | Nil | Nil | Nil | ||||||||||||||||||||||||||
| Kira Huang (3) | 2016 | Nil | Nil | Nil | Nil | Nil | Nil | Nil | Nil | |||||||||||||||||||||||||
| Nil | Nil | Nil | Nil | Nil | Nil | Nil | Nil | |||||||||||||||||||||||||||
(1) Ms. Lazar was the Company’s sole executive officer until December 18, 2015.
(2) Mr. Jiang was elected the Company’s sole executive officer since December 18, 2015.
(3) The company entered into an employment contract with Kira Huang on February 1, 2016 according to which Ms. Huang was employed as Chief Financial Officer. Pursuant to the employment agreement, the company agrees to compensate Ms. Huang salary of $4,500 per month subject to normal statutory deduction and annual review.
Narrative Disclosure to Summary Compensation Table
Other than set out below, there are no arrangements or plans in which we provide pension, retirement or similar benefits for directors or executive officers. Our directors and executive officers may receive share options at the discretion of our board of directors in the future. We do not have any material bonus or profit sharing plans pursuant to which cash or non-cash compensation is or may be paid to our directors or executive officers, except that share options may be granted at the discretion of our board of directors.
Stock Option Plan
Currently, we do not have a stock option plan in favor of any director, officer, consultant or employee of our company.
Grants of Plan-Based Awards
There were no grants of plan-based awards during the year ended September 30, 2015.
Outstanding Equity Awards at Fiscal Year End
Our former Chief Executive Officer, Shulamit Lazar, received compensation of 30,000,000 shares valued at $30,000 during the year ended September 30, 2015.
Option Exercises and Stock Vested
During our fiscal year ended September 30, 2015 there were no options exercised by our named officer.
Compensation of Directors
We do not have any agreements for compensating our directors for their services in their capacity as directors.
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Pension, Retirement or Similar Benefit Plans
There are no arrangements or plans in which we provide pension, retirement or similar benefits for directors or executive officers. We have no material bonus or profit sharing plans pursuant to which cash or non-cash compensation is or may be paid to our directors or executive officers, except that stock options may be granted at the discretion of the board of directors or a committee thereof.
Employment Contracts
We currently do not have employment contracts with our employees.
Brivision has employment contracts with its CFO Kira Huang, who is also our CFO.
Employment contract with the CFO of BriVision.
BriVision entered into an employment contract with Kira Huang on February 1, 2016 according to which, among other terms, Ms. Huang is required to, as Chief Financial Officer, perform duties and undertake the responsibilities in a professional manner including reporting the financials related matters to American BriVision’s Board of Directors; developing the financial planning and oversee tax reporting activities; monitoring and submitting all required reports to SEC on timely basis, planning and overseeing annual budgets and other duties as may arise from time to time and as may be assigned to her. And pursuant to the employment agreement, American BriVision agrees to compensate Mrs. Huang salary of $4,500 per month subject to normal statutory deduction and annual review. Additional bonus or stock options will be determined by its Board.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
During the fiscal year ended September 30, 2015, we had an unsecured demand note payable due of $9,000 to Shulamit Lazar, our sole officer and director for funds advanced the Company through the bankruptcy process. This is unsecured with a zero percent interest rate and is payable on demand. The note was cancelled as of December 2, 2015.
On December 29, 2015, BriVision entered into a Collaborative Agreement (the “Collaborative Agreement”) with BioLite, of which the Company’s sole officer and director, Eugene Jiang, is a director. Pursuant to the Collaborative Agreement, BioLite shall grant sole licensing rights to BriVision of drug and therapeutic use of five products for 10 years: BLI-1005 CNS-Major Depressive Disorder; BLI-1008 CNS-Attention Deficit Hyperactivity Disorder; BLI-1401-1 Anti-Tumor Combination Therapy-Solid Tumor with Anti-PD-1; BLI-1401-2 Anti-Tumor Combination Therapy-Triple Negative Breast Cancer; and BLI-1501 Hematology-Chronic Lymphocytic Leukemia, in USA and Canada. Under the Collaborative Agreement, BriVision shall pay a total of $100,000,000 in cash or stock of BriVision with equivalent value, according to the following schedule:
·upfront payment shall upon the signing of this Collaborative Agreement: 3.5% of total payment. After receiving upfront payment from BriVision, BioLite has to deliver all data to BriVision in one week.
| 38 |
·upon the first IND submission, BriVision shall pay, but no later than December 15, 2016: 6.5% of total payment. After receiving second payment from BriVision, BioLite has to deliver IND package to BriVision in one week.
·at the completion of first phase II clinical trial, BriVision shall pay, but no later than September 15, 2017: 15% of total payment. After receiving third payment from BriVision,BioLite has to deliver phase II clinical study report to BriVision in three months.
·upon the reverse merger.phase III IND submission, BriVision shall pay, but no later than December 15, 2018: 20% of total payment. After receiving forth payment from BriVision, BioLite has to deliver IND package to BriVision in one week.
| High Close | Low Close | |||||||
| Fiscal Year 2010 | ||||||||
1st Quarter (through November 16, 2009) | $ | .55 | $ | .25 | ||||
| Fiscal Year 2009 | ||||||||
| 1st Quarter | $ | 1.04 | $ | .65 | ||||
| 2nd Quarter | $ | .95 | $ | .25 | ||||
| 3rd Quarter | $ | .89 | $ | .31 | ||||
| 4th Quarter | $ | 2.00 | $ | .40 | ||||
| Fiscal Year Ended September 30, 2008 | ||||||||
| 1st Quarter | $ | 3.15 | $ | 1.01 | ||||
| 2nd Quarter | $ | 3.65 | $ | 1.01 | ||||
| 3rd Quarter | $ | 2.05 | $ | .52 | ||||
| 4th Quarter | $ | 2.50 | $ | .51 | ||||
Fiscal Year Ended September 30, 2007 | ||||||||
| 1st Quarter | $ | 3.18 | $ | .76 | ||||
| 2nd Quarter | $ | 2.22 | $ | 1.46 | ||||
| 3rd Quarter | $ | 4.85 | $ | 1.59 | ||||
| 4th Quarter | $ | 4.90 | $ | 2.95 | ||||
·at the completion of phase III, BriVision shall pay, but no later than September 15, 2019: 25% of total payment. After receiving fifth payment from BriVision, BioLite has to deliver phase III clinical study report to BriVision in three months
·upon the NDA submission, BriVision shall pay, but no later than December 15, 2020,BriVision shall pay: 30% of total payment. After receiving sixth payment from BriVision,BioLite has to deliver NDA package to BriVision in one week
On November 16, 2009May 6 , 2016, we and Biolite amended the last reported sale price of our common stock onpayment terms under the Over-The-Counter Bulletin Board was $0.25 per share.
As of March 31, 2016 and September 30, 2015, the amount due to a related party, BioLite was $0 and $22,517, respectively.
As of March 31, 2016 and September 30, 2015, the amount due to shareholder, YuanGene Corporation, was $5,723 and $46,586, respectively; Mr. Jiang maintains voting control over the shares of the Company’s common stock that YuanGene Corporation owns.
Promoters and we do not expect to pay cash dividends onCertain Control Persons
None of our common stockmanagement or other control persons were “promoters” (within the meaning of Rule 405 under the Securities Act), and none of such persons took the initiative in the foreseeable future. We intend to retain future earnings, ifformation of our business or received any to provide fundsof our debt or equity securities or any of the proceeds from the sale of such securities in exchange for the operationcontribution of our business. Our Securities Purchase Agreement with Equity 11 preventsproperty or services, during the payment of any dividends to our common stockholders without the prior approval of Equity 11. We have paid dividends due Equity 11 for its preferred shares by issuing additional preferred shares in lieu of cash.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information as of September 30, 2009, concerning outstanding options and rights to purchase common stock granted to participants in all of our equity compensation plans and the number of shares of common stock remaining available for issuance under such equity compensation plans.
| Number of Securities | |||||||
| Remaining Available for | |||||||
| Number of Securities to be | Future Issuance Under Equity | ||||||
| Issued Upon Exercise of | Weighted-Average Exercise | Compensation Plans | |||||
Outstanding Options, Warrants | Price of Outstanding Options, | (Excluding Securities | |||||
| and Rights | Warrants and Rights | Reflected in Column (a)) | |||||
Plan Category | (a) | (b) | (c) | ||||
| Equity compensation plans approved by security holders | 5,131,119 | $1.13 | 1,217,881 | ||||
| Equity compensation plans not approved by security holders | - | - | - | ||||
| Total | 5,131,119 | $1.13 | 1,217,881 |
| Issued and Outstanding Shares Held Prior To Offering | Issued and Outstanding Shares Held After The Offering | |||
| Affiliate | Shares | Percentage | Shares | Percentage |
| Equity 11/JB Smith | 5,200,000 | 15.8% | 5,200,000 | 15.8% |
| Richard Stromback | 10,697,300 | 32.6% | 10,697,300 | 32.6% |
| Sally Ramsey | 3,000,000 | 9.1% | 3,000,000 | 9.1% |
| Rocco DelMonaco | - | - | - | - |
| Joe Nirta | - | - | - | - |
| Robert Crockett | - | - | - | - |
| Daniel Iannotti | - | - | - | - |
| Tom Krotine | 10,000 | * | 10,000 | * |
| Kevin Stolz | - | - | - | - |
| Affiliate Total: | 18,907,300 | 57.6% | 18,907,300 | 57.6% |
| Non-Affiliates: | 13,928,384 | 32.4% | 13,928,384 | 32.4% |
Beneficial ownership in this table is determined in accordance with theSEC rules and generally includes voting or investment power with respect to securities. For purposes of the SEC and does necessarily indicate beneficial ownership forthis table, a person or group of persons is deemed to have “beneficial ownership” of any other purpose. Under these rules, the number of shares of common stock deemedthat such person has the right to acquire within 60 days of the date of the respective table. For purposes of computing the percentage of outstanding includes shares issuable upon exercise of options, warrants or convertible securitiesour common stock held by the respectiveeach person or group of persons named above, any shares that may be exercisedsuch person or persons has the right to acquire within 60 days after September 30, 2009.
| Beneficially Held Shares Outstanding Prior To Offering | Beneficially Held Shares Outstanding After The Offering | |||
| Affiliate | Shares | Percentage | Shares | Percentage |
| Equity 11/JB Smith | 18,895,038 | 36.4% | 14,555,038 | 28% |
| Richard Stromback | 11,293,129 | 21.7% | 11,293,129 | 21.7% |
| Sally Ramsey | 3,150,000 | 6% | 3,150,000 | 6% |
| Rocco DelMonaco | 100,000 | * | 100,000 | * |
| Joe Nirta | 100,000 | * | 100,000 | * |
| Robert Crockett | 110,000 | * | 110,000 | * |
| Daniel Iannotti | 110,000 | * | 110,000 | * |
| Tom Krotine | 341,217 | * | 341,217 | * |
| Kevin Stolz | 100,000 | * | 100,000 | * |
| Affiliate Total: | 34,199,384 | 65.7% | 29,859,384 | 57.4% |
| Non-Affiliates: | 17,784,857 | 34.3% | 22,124,857 | 42.6% |
Unless otherwise noted, the business address of each beneficial owner listed is 11 Sawyers Peak Drive, Goshen, NY 10924. Except as otherwise indicated, and subject to applicable community property laws, to our knowledge, each stockholder named in the following table possessespersons listed below have sole voting and investment power over thewith respect to all shares listed, except for those jointly owned with that person’s spouse. Unless otherwise noted below, the address of each person listed on the table is c/o Ecology Coatings, Inc., 2701 Cambridge Court , Suite 100, Auburn Hills, MI 48326. Beneficial ownership representing less than 1% is denoted with an asterisk (*).
| Name and Address of Beneficial Owner | Shares Beneficially Owned Prior to the Offering | Number of Shares Offered | Shares Beneficially Owned After the Offering | ||
| Shares | Percentage | Shares | Percentage | ||
| 10 % Stockholders: | |||||
| Equity 11, Ltd. (1) | 18,895,038 | 36.4% | 4,340,000 | 14,555,038 | 28% |
| Richard Stromback (4) | 11,293,129 | 22.7% | — | 11,293,129 | 22.7% |
| Named Executive Officers and Directors: | |||||
| Richard Stromback (4) | 11,293,129 | 22.7% | — | 11,293,129 | 22.7% |
| Sally Ramsey | 3,150,000 | 6% | — | 3,150,000 | 6% |
| Rocco DelMonaco (5) | 100,000 | * | — | 100,000 | * |
| Joseph Nirta (6) | 100,000 | * | — | 100,000 | * |
| Robert Crockett | 110,000 | * | — | 110,000 | * |
| Thomas Krotine (7) | 341,217 | * | — | 341,217 | * |
| Daniel Iannotti | 110,000 | * | — | 110,000 | * |
| Kevin Stolz (10) | 100,000 | * | * | 100,000 | * |
| J.B. Smith (8) | 18,895,038 | 36.4% | 4,340,000 | 14,555,038 | 28% |
| Others: | |||||
| Trimax, LLC (9) | 3,050,000 | 5.8% | — | 3,050,000 | 5.8% |
| All executive officers and directors as a group (nine people) | 34,199,384 | 65.8% | 4,340,000 | 29,859,384 | 57.4% |
As of any pecuniary interest therein. Mr. SmithSeptember 13, 2016, we had 213,303,222. shares of common stock issued and outstanding.
| Name of Beneficial Owner | Amount and Nature of Beneficial Ownership | Percent Class | ||||||
| Eugene Jiang, Chairman and CEO (1) | 147,842,856 | 70 | % | |||||
| Kira Huang | 31,410 | Less than 1 | % | |||||
| All officers and directors as a group ( persons) | 147,874,266 | 71 | % | |||||
(1) These shares are owned by YuanGene Corporation, a corporation incorporated in Samoa. Eugene Jiang is the managing partnersole director of Sales Attack LC. Sales Attack LC provides marketing services to us pursuant to a Consulting Agreement entered into on September 17, 2008. The selling shareholder and Mr. Smith are not broker-dealers nor affiliates of broker-dealers.
Changes in Control
As a result of the selling shareholder, and purchased under the August 28, 2008 Securities Purchase AgreementShare Exchange, BriVision became our wholly owned subsidiary and the May 15, 2009 Convertible Preferred Securities Purchase Agreement:
| Sales Under Securities Purchase Agreement Date August 28, 2008: | ||||||
| Preferred Shares Selling Date | Amount Sold | No. of Preferred Shares | Conversion Price - Cost Per Share | No. of Common Shares When Converted | Market Price Per Share on Date of Sale | |
| August 28, 2008 | $1,260,000 | 1,260 | $.50 | 2,520,000 | $.62 | |
| September 26, 2008 | $750,000 | 750 | $.50 | 1,500,000 | $1.10 | |
| December 1, 2008 Dividend | 24 | $.50 | 48,000 | |||
| January 23, 2009 | $94,000 | 94 | $.50 | 188,000 (1) | $.901 | |
| February 11, 2009 | $30,000 | 30 | $.50 | 60,000 | $.65 | |
| February 18, 2009 | $25,000 | 25 | $.50 | 50,000 | $.48 | |
| February 26, 2009 | $40,000 | 40 | $.50 | 80,000 (2) | $.552 | |
| March 10, 2009 | $23,000 | 23 | $.50 | 46,000 | $.88 | |
| March 26, 2009 | $80,000 | 80 | $.50 | 160,000 | $.603 | |
| April 14, 2009 | $21,000 | 21 | $.50 | 42,000 | $.65 | |
| April 29, 2009 | $34,000 | 34 | $.50 | 68,000 | $.35 | |
| June 1, 2009 Dividend | 55 | 110,000 | $.45 | |||
| Sales Under Securities Purchase Agreement Date May 15, 2009: | ||||||
| May 15, 2009 | $276,000 | 276 | $.08 | 3,450,000 | $.40 | |
| May 27, 2009 | $40,000 | 40 | $.09 | 444,444 | $.50 | |
| June 10, 2009 | $20,000 | 20 | $.09 | 222,222 | $.45 | |
| June 26, 2009 | $28,000 | 28 | $.09 | 311,111 | $.55 | |
| July 24, 2009 | $75,000 | 75 | $.10 | 750,000 | $.64 | |
| August 12, 2009 | $52,000 | 52 | $.16 | 325,000 | $.70 | |
| August 19, 2009 | $25,000 | 25 | $.24 | 104,167 | $1.30 | |
| August 31, 2009 | $50,000 | 50 | $.26 | 192,308 | $.96 | |
| November 9, 2009 | $50,000 | 50 | $.07 | 714,286 | $.32 | |
| TOTAL: | $2,973,000 | 3,052 | 11,385,538 | |||
Equity Compensation Plan
We do not have in effect any compensation plans under which our equity securities are authorized for issuance and we do not have any outstanding stock options.
DESCRIPTION OF SECURITIES TO BE REGISTERED
Authorized Capital Stock
The following table identifies the dollarCompany’s authorized capital stock consists of 360,000,000shares of common stock, $0.001 par value of the selling shareholder’s investment in theper share and 20,000,000 shares of preferred stock to be converted into common shares which are being registered under this registration statement and the market$0.001 par value per share.
Common Stock
As of thoseSeptember 13, 2016, 213,303,222 shares of our Common Stock are issued and outstanding. Holders of Common Stock are entitled to cast one vote for each share on all matters submitted to a vote of shareholders, including the election of directors. The holders of Common Stock are entitled to receive ratably such dividends, if any, as may be declared by the Board out of funds legally available therefore. Such holders do not have any preemptive or other rights to subscribe for additional shares. All holders of Common Stock are entitled to share ratably in any assets for distribution to shareholders upon the liquidation, dissolution or winding up of the Company. There are no conversion, redemption or sinking fund provisions applicable to the Common Stock. All outstanding shares of Common Stock are fully paid and nonassessable.
Registration Rights
There are no outstanding stockholders’ agreements, voting trusts or arrangements, registration rights agreements, rights of first refusal or other contracts pertaining to the capital stock of the Company.
Transfer Agent
The transfer agent and registrar for our common stock onis: Olde Monmouth Stock Transfer, Inc.; Address: 200 Memorial Pkwy, Atlantic Highlands, NJ 07716; Phone: (732) 872-2727; website:www.oldemonmouth.com.
This prospectus relates to the offering and sale, from time to time, of up to 32,409,505 shares of our common stock held by the stock holders named in the table below. We are registering the shares to permit the Selling Stockholders and their pledgees, donees, transferees and other successors-in-interest that receive their shares from a Selling Stockholder as a gift, partnership distribution or other non-sale related transfer after the date of each investment:
| Preferred Shares Selling Date | Selling Shareholder’s Investment | No. of Preferred Shares | Conversion Price Per Share | No. of Common Shares When Converted | Market Price Per Share on Date of Investment | Market Value of Investment |
| August 28, 2008 | $1,260,000 | 1,260 | $.50 | 2,520,000 | $.62 | $1,562,400 |
| September 26, 2008 | $750,000 | 750 | $.50 | 1,500,000 | $1.10 | $1,650,000 |
| December 1, 2008 Dividend | 24 | $.50 | 48,000 | $.75 | $36,000 | |
| January 23, 2009 | $94,000 | 94 | $.50 | 188,000 | $.90 (1) | $169,200 |
| February 11, 2009 | $30,000 | 30 | $.50 | 60,000 | $.65 | $39,000 |
| February 18, 2009 | $12,000 | 12 | $.50 | 24,000 | $.48 | $11,520 |
| TOTAL: | $2,146,000 | 2,170 | $.50. | 4,340,000 | $3,468,120 |
| Preferred Shares Selling Date | Selling Shareholder’s Investment | No. of Preferred Shares | Conversion Price Per Share | Total Additional Cost to Convert to Common Shares | No. of Common Shares When Converted | Market Price Per Share on Date of Sale | Market Price of Investment | Potential Profit/Discount to Market Price |
| August 28, 2008 | $1,260,000 | 1,260 | $.50 | $0 | 2,520,000 | $.62 | $1,562,400 | $302,400 |
| September 26, 2008 | $750,000 | 750 | $.50 | $0 | 1,500,000 | $1.10 | $1,650,000 | $900,000 |
| December 1, 2008 Dividend | 24 | $.50 | $0 | 48,000 | $.75 | $36,000 | $36,000 | |
| January 23, 2009 | $94,000 | 94 | $.50 | $0 | 188,000 | $.90 (1) | $169,200 | $75,200 |
| February 11, 2009 | $30,000 | 30 | $.50 | $0 | 60,000 | $.65 | $39,000 | $9,000 |
| February 18, 2009 | $12,000 | 12 | $.50 | $0 | 24,000 | $.48 | $11,520 | ($480) |
| TOTAL: | $2,146,000 | 2,170 | $.50 | $0 | 4,340,000 | $3,468,120 | $1,322,120 |
| Warrant Issue Date | Selling Shareholder’s Investment | No. of Shares | Purchase Price Per Share | Total Purchase Price of Warrant | Market Price Per Share on Warrant Issue Date | Market Value of Warrant | Potential Profit/Discount to Market Price |
| August 28, 2008 | $0 (1) | 630,000 | $.75 | $472,500 | $.62 | $390,600 | ($81,900) |
| September 26, 2008 | $0 (1) | 375,000 | $.75 | $281,250 | $1.10 | $412,500 | $131,250 |
| January 23, 2009 | $0 (1) | 47,000 | $.75 | $35,250 | $.90 (2) | $42,300 | $7,050 |
| February 11, 2009 | $0 (1) | 15,000 | $.75 | $11,250 | $.65 | $9,750 | ($1,500) |
| February 18, 2009 | $0 (1) | 12,500 | $.75 | $9,375 | $.48 | $6,000 | ($3,375) |
| February 26, 2009 | $0 (1) | 20,000 | $.75 | $15,000 | $.55 (3) | $11,000 | ($4,000) |
| March 10, 2009 | $0 (1) | 11,500 | $.75 | $8,625 | $.88 | $10,120 | $1,495 |
| March 26, 2009 | $0 (1) | 40,000 | $.75 | $30,000 | $.60 (4) | $24,000 | ($6,000) |
| April 14, 2009 | $0 (1) | 10,750 | $.75 | $8,062 | $.65 | $6,987 | ($1,075) |
| April 29, 2009 | $0 (1) | 16,750 | $.75 | $12,563 | $.35 | $5,863 | ($6,700) |
| TOTAL: | 1,178,500 | $883,875 | $919,120 | $35,245 |
The following table identifies the total payments to the selling shareholder and the total discount to the market price of the common shares and warrants to be issued to the selling shareholder as a percentage of the net proceeds to us:
| Gross Proceeds from Sale of Preferred Stock | Payments Previously Made to Selling Shareholder(1) | Remaining Required Payments to be made to Selling Shareholder (1) | Net Proceeds to Issuer | Total Discount to Market By Selling Shareholder for common stock and warrants | Total Payments to Selling Shareholder as a Percentage of Gross Proceeds | Total Discount to Market Price as a Percentage of Gross Proceeds |
| $2,146,000 | $299,603.72 | $426,752.70 | $1,419,643.60 | $1,357,365 | 34% | 63% |
| the |
| Total Combined Profit Common Shares | Total Combined Profit Warrants | Total Combined Profit Options | Total Combined Profit Notes | Total Combined Profit |
| $1,322,120 | $35,245 | $0 (1) | $1,093 (2) | $1,358,458 |
| ● | the number of |
| 41 |
| ● | the maximum number of shares of our |
| ● | the |
Each Selling Stockholder may offer for sale all or part of the Shares from time to time. The table below assumes that the Selling Stockholders will sell all of the Shares offered for sale. A Selling Stockholder is under no obligation, however, to sell any Shares pursuant to this prospectus.
| 42 |
| Name of Selling Stockholder | Shares of Common Stock Beneficially Owned Prior to Offering (1) | Maximum Number of Shares of Common Stock to be Sold | Number of Shares of Common Stock Owned After Offering (2) | Percentage Ownership After Offering (3) | ||||||||||||
| LU, PO-YEN | 599,994 | 200,000 | 399,994 | 67 | % | |||||||||||
| CHANG, YANG-CHING | 449,996 | 134,998 | 314,998 | 70 | % | |||||||||||
| LEE, WU-HIS | 699,994 | 250,000 | 449,994 | 64 | % | |||||||||||
| CHAO, YU-LIEN | 100,001 | 30,000 | 70,001 | 70 | % | |||||||||||
| WU, HSIN-CHOU | 199,997 | 60,000 | 139,997 | 70 | % | |||||||||||
| KUO, KUN-JUNG | 200,098 | 60,000 | 140,098 | 70 | % | |||||||||||
| TENG, CHIN-CHUN | 1,499,985 | 1,499,985 | 0 | 0 | ||||||||||||
| LIN, YI-LUN | 149,999 | 50,000 | 99,999 | 67 | % | |||||||||||
| YU, LI-LING | 166,665 | 25,000 | 141,665 | 85 | % | |||||||||||
| HUANG, WEI-TAO | 249,999 | 70,000 | 179,999 | 72 | % | |||||||||||
| CHANG, CHIA-HAO | 154,535 | 23,180 | 131,355 | 85 | % | |||||||||||
| TSAI, MING-SHIH | 299,997 | 45,000, | 254,997 | 85 | % | |||||||||||
| PACIFIC CONCORD INTERNATIOINAL (4) | 499,997 | 150,000 | 349,997 | 70 | % | |||||||||||
| LEE, TSUNG-LIN | 206,999 | 31,050 | 175,949 | 85 | % | |||||||||||
| LIU, CHUN-AN | 549,996 | 549,996 | 0 | 0 | ||||||||||||
| YUANGENE CORPORATION (5) | 147,842,856 | 8,000,000 | 139,842,856 | 95 | % | |||||||||||
| EURO-ASIA INVESTMENT & FINANCE CORP LTD (6) | 1,227,425 | 1,227,425 | 0 | 0 | ||||||||||||
| BIOHOPEKING CORPORATION (7) | 1,484,987 | 1,484,987 | 0 | 0 | ||||||||||||
| BUFFETT INVESTMENT CORPORATION (8) | 9,094,917 | 4,000,000 | 5,094,917 | 56 | % | |||||||||||
| LIONGENE CORPORATION (9) | 9,657,913 | 9,657,913 | 0 | 0 | ||||||||||||
| CHEN YANG, LAI-CHUN | 199,997 | 199,997 | 0 | 0 | ||||||||||||
| SHEN, SHU-HUI | 199,997 | 199,997 | 0 | 0 | ||||||||||||
| SHEN, CHIA-CHI | 100,001 | 100,001 | 0 | 0 | ||||||||||||
| LIU, SU-LIEN | 349,996 | 349,996 | 0 | 0 | ||||||||||||
| WU, PENG-YU | 999,991 | 999,991 | 0 | 0 | ||||||||||||
| CHEN, YEN-CHIA | 10,001 | 10,001 | 0 | 0 | ||||||||||||
| FAITH TEAM CORPORATION LIMITED (10) | 299,997 | 299,997 | 0 | 0 | ||||||||||||
| THALIA MEDIA LIMITED (11) | 249,999 | 249,999 | 0 | 0 | ||||||||||||
| KIMHO CONSULTANTS CO,(12) | 49,999 | 49,999 | 0 | 0 | ||||||||||||
| RGENE CORPORATION (13) | 9,319,916 | 1,500,000 | 7,819,916 | 84 | % | |||||||||||
| WU, TZY-YN | 1,499,988 | 749,994 | 749,994 | 50 | % | |||||||||||
| CHANG, ERIC-YUAN | 999,991 | 149,999 | 849,992 | 85 | % | |||||||||||
1) The following table identifies the total of all possible payments by usselling stockholders acquired their shares pursuant to the Share Exchange.
2) Since we do not have the ability to control how many, if any, of their shares each of the selling shareholder,shareholders listed above will sell, we have assumed that the total possible discount to the market priceselling shareholders will sell all of the shares underlyingoffered herein for purposes of determining how many shares they will own after the preferred stockOffering and their percentage of ownership following the total possible discountoffering.
3) All Percentages have been rounded up to the market pricenearest one hundredth of the warrants issued to the selling shareholder as a percentage of the net proceeds to use from the sale of preferred stock to selling shareholder:
| Total of Possible Payments to Selling Shareholder | Total Possible Payments As a % of Net Proceeds | Total Possible Discount Common Shares | Total Possible Discount Common Shares As a % of Net Proceeds | Total Possible Discount Warrants | Total Possible Discount Warrants As a % of Net Proceeds | Total of Payments & Discounts | Total As a % of Net Proceeds |
| $726,366.42 (1) | 60% | $1,322,120 | 95% | $35,245 | 2.5% | $2,083,373.40 | 147% |
4) The person having voting, dispositive or investment power over Pacific Concord International is Shih Yun Lin. The address for Pacific Concord International is Level 2, Lotemau Centre, Vaea Street, P.O. Box 3271, Apia, Western Samoa.
5) The person having voting, dispositive or investment power over Yuangene Corporation is Eugene Jiang. The address for Yuangene corporation is 3F, No. 248, Sec 1 Neihu Rd, Taipei City 11493, Taiwan.
6) The person having voting, dispositive or investment power over Euro-Asia Investment & Finance Corp Ltd is Shum Kwok Keung. The address for Euro-Asia Investment & Finance Corp Ltd is Unit 604G, Block A, Po Lung Centre, No. 11 Wang Chiu Road, Kowloon Bay Kin, Hong Kong.
7) The person having voting, dispositive or investment power over Biohopeking Corporation is Mei Na Huang. The address for Biohopeking Corporation is 3F, No. 248 Sect 1 Neihu Rd, Taipei City 11493, Taiwan.
8) The person having voting, dispositive or investment power over Buffett Investment Corporation is Yu Ching Kuo. The address for Buffett Investment Corporation is 3F, No. 248 Sect 1 Neihu Rd, Taipei City 11493, Taiwan.
9) The person having voting, dispositive or investment power over Liongene Corporation is Ya Jing Rui. The address for Liongene Corporation is 3F, No. 248, Sect 1 Neihu Rd, Taipei City 11493, Taiwan.
10) The person having voting, dispositive or investment power over Faith Team Corporation Limited is Shum Kwok Keung. The address for Faith Team Corporation Limited is BLK 1, 7/F, Enterpaise Square I 9, Speung Yuet Road, Kowloon bay, Kowlon, Hongkong.
11) The person having voting, dispositive or investment power over Thalia Media Limited is Sze Ho Yeung Freddy. The address for Thalia Media Limited is RM 604 G, Block A, 6/F, Po Lung Centre 11 Wang Chiu Road, Kowloon Bay Kowloon, Hongkong.
12) The person having voting, dispositive or investment power over Kimho Consultants Co. is Kimberly Leung. The address for Timho Consultants Co. is RM 3, Block 2, 13/F Greer Park Villa, Speung Sriu, NT, HongKong.
13) The person having voting, dispositive or investment power over Rgene Corporation is Ya Jing Rui. The address for Rgene Corporation is 3F, No. 248, Sec 1 Neihu Rd, Taipei City 11493, Taiwan.
| # of shares outstanding prior to Selling Shareholder’s initial investment | # of shares registered for resale by selling shareholder in prior registration statements | # of shares registered for resale by selling shareholder that continue to held by Selling Shareholder | # of shares sold in registered resale transactions by Selling Shareholder | # of shares registered for resale on behalf of Selling Shareholder |
| 32,810,684 | 0 | 4,340,000 | 0 | 4,340,000 |
The selling shareholder of the common stock hereunderstockholders and any of itstheir respective pledgees, donees, assignees and other successors-in-interest may, from time to time, sell any or all of thetheir shares of common stock subject to the prospectus on the Over-The-Counter Bulletin Board,any stock exchange, market or trading facility on which the shares are traded or in private transactions. These sales may be at fixed or negotiated prices. The selling shareholderstockholders may use any one or more of the following methods when selling shares:
| ● | ordinary brokerage transactions and transactions in which the broker-dealer solicits |
| ● | block trades in which the broker-dealer will attempt to sell the shares as agent but may position and resell a portion of the block as |
| ● | facilitate the transaction; |
| ● | purchases by a broker-dealer as principal and resale by the broker-dealer for its account; |
| an exchange distribution in accordance with the rules of the applicable exchange; |
| ● | privately-negotiated transactions; |
| ● | broker-dealers may agree with the selling |
| ● | through the writing of options on the shares; |
| ● | a combination of any such methods of sale; and |
| ● | any other method permitted pursuant to applicable law. |
The selling shareholderstockholders may also sell shares under Rule 144 underof the Securities Act of 1933, as amended (the “Securities Act”“Securities Act”), if available, rather than under this prospectus. So longThe selling stockholders shall have the sole and absolute discretion not to accept any purchase offer or make any sale of shares if it deems the purchase price to be unsatisfactory at any particular time.
The selling stockholders or their respective pledgees, donees, transferees or other successors in interest, may also sell the shares directly to market makers acting as principals and/or broker-dealers acting as agents for themselves or their customers. Such broker-dealers may receive compensation in the form of discounts, concessions or commissions from the selling shareholder is an affiliate of Ecology Coatings, as defined under applicable SEC rules, under Rule 144,stockholders and/or the selling shareholder may not sell in any three month period a numberpurchasers of shares for whom such broker-dealers may act as agents or to whom they sell as principal or both, which exceedscompensation as to a particular broker-dealer might be in excess of customary commissions. Market makers and block purchasers purchasing the greater of: i) one percentshares will do so for their own account and at their own risk. It is possible that a selling stockholder will attempt to sell shares of the outstanding shares shown in our most recent SEC report or statement, or ii) the average weekly reported volume of trading in our common stock as reported byin block transactions to market makers or other purchasers at a price per share which may be below the Over-The-Counter Bulletin Board association during the four calendar weeks preceding prior to the notice of the Rule 144 sale. The selling shareholder is currently an affiliate of Ecology Coatings, Inc. within the meaning of federal securities laws. In the eventthen existing market price. We cannot assure that the selling shareholder is not deemed to have been an "affiliate" at any time during the 90 days preceding a sale and has beneficially owned the shares proposed to be sold for at least six months, the selling shareholder would be entitled to sell those shares under Rule 144 subject to compliance with the current public information requirements of Rule 144. If such selling shareholder has beneficially owned the shares proposed to be sold for at least one year, then the selling shareholder is entitled to sell those shares without complying withall or any of the requirements of Rule 144 so long as we are currentshares offered in our public information requirements under Rule 144 (c).
| 45 |
We are required to pay all fees and expenses incident to the registration of the shares, including fees and disbursements of counsel to the selling stockholders, but excluding brokerage commissions or underwriter discounts.
The selling stockholders, alternatively, may sell all or any other rulepart of similar effect.the shares offered in this prospectus through an underwriter. The resale sharesselling stockholders have not entered into any agreement with a prospective underwriter and there is no assurance that any such agreement will be sold only through registered or licensedentered into.
The selling stockholders may pledge their shares to their brokers or dealers if required under applicable state securities laws. In addition, in certain states, the resale sharesmargin provisions of customer agreements. If a selling stockholder defaults on a margin loan, the broker may, not be sold unless they have been registered or qualified for salefrom time to time, offer and sell the pledged shares. The selling stockholders and any other persons participating in the applicable statesale or an exemption from the registration or qualification requirement is available and is complied with.
If a selling stockholder notifies us that it has a material arrangement with a broker-dealer for the resale of the common stock, then we would be required to amend the registration statement of which this prospectus is a part, and file a prospectus supplement to describe the agreements between the selling stockholder and the broker-dealer.
In compliance with the guidelines of the Financial Industry Regulatory Authority, Inc., or FINRA, the maximum consideration or discount to be received by any member of the FINRA may not exceed 8% of the aggregate amount of the securities offered pursuant to this prospectus.
Selling stockholders hereunder that are FINRA members, or affiliates of FINRA members, are precluded from, directly or indirectly, offering, selling, agreeing to offer or sell, transferring, assigning, pledging, hypothecating or subjecting to hedging, short sale, derivative, put or call transaction, all or any portion of those certain placement agents’ warrants of the Company issued to such selling stockholders on January 5, 2010, or any shares of the company’s common stock thereunder, for the period beginning on the later of: (i) the date of effectiveness of the registration statement of which this prospectus forms a part or (ii) the date of commencement of sales pursuant to this prospectus and ending on the six (6) month anniversary of such date, except in accordance with FINRA Rule 5110 (g)(2).
| 46 |
MARKET FOR OUR COMMON STOCK, DIVIDENDS AND
RELATED STOCKHOLDER INFORMATION
As of September 13, 2016, our company's common stock is quoted on the OTCQB under the symbol ABVC; prior thereto, since December 16, 2015, our symbol was MTOO.
The following table sets forth the quarterly high and low bid prices for the last two fiscal years. The prices set forth below represent inter-dealer quotations, without retail markup, markdown or commission and may not be reflective of actual transactions.
| High | Low | |||||||
| Fiscal 2014 | ||||||||
| Quarter ended December 31, 2013 | $ | 0.02 | $ | 0.00 | ||||
| Quarter ended March 31, 2014 | 0.01 | 0.01 | ||||||
| Quarter ended June 30, 2014 | 0.01 | 0.01 | ||||||
| Quarter ended September 30, 2014 | 0.01 | 0.02 | ||||||
| Fiscal 2015 | ||||||||
| Quarter ended December 31, 2014 | 0.02 | 0.01 | ||||||
| Quarter ended March 31, 2015 | 0.01 | 0.00 | ||||||
| Quarter ended June 30, 2015 | 0.00 | 0.00 | ||||||
| Quarter ended September 30, 2015 | 28.00 | 0.00 | ||||||
| Fiscal 2016 | ||||||||
| Quarter ended December 31, 2015 | 25.00 | 0.00 | ||||||
| Quarter ended March 31, 2016 | 7.96 | 1.62 | ||||||
| Quarter ended June 30, 2016 | 2.00 | 1.00 | ||||||
On September 10, 2016, the closing bid price of the common stock was $2.00.
Holders. As of September 13, 2016, there were 171 stockholders of record and an aggregate of 213,303,222 shares of our common stock were issued and outstanding. Our common shares are issued in registered form. The transfer agent of our company's common stock is Olde Monmouth Stock Transfer, Inc.
Dividend Policy. We have not paid any cash dividends on our common stock and have no present intention of paying any dividends on the shares of our common stock. Our current policy is to retain earnings, if any, for use in our operations and in the development of our business. Our future dividend policy will be determined from time to time by our board of directors.
Securities Authorized for Issuance under Equity Compensation Plans. We do not have in effect any compensation plans under which our equity securities are authorized for issuance and we do not have any outstanding stock options.
| 47 |
Certain legal matters with respect to the shares of common stock offered hereby have be passed upon for us by Hunter Taubman Fischer & Li LLC, New York, New York 10018.
The audited consolidated financial statements of American BriVision (Holing) Inc. and subsidiaries included herein and elsewhere in the registration statement have been audited by AWC(CPA) Limited for the periods and to the extent set forth in their Report appearing herein and elsewhere in the registration statement. Such financial statements have been so included in reliance upon the report of such firm given upon the firm’s authority as experts in accounting and auditing.
DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION FOR SECURITIES ACT LIABILITIES
Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to our directors, officers and controlling persons pursuant to the foregoing provisions, or otherwise, we have been advised that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by us of expenses incurred or paid by one of our directors, officers or controlling persons in the successful defense of any action, suit or proceeding) is asserted by that 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 whether that indemnification by us is against public policy as expressed in the Securities Act and will be governed by the selling shareholderfinal adjudication of that issue.
| 48 |
TABLE OF CONTENTS
| F-1 |
American BriVision (Holding) Corporation.
(formerly METU BRANDS, INC.)
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
| June 30, 2016 | September 30, 2015 | |||||||
| (Unaudited) | (Audited) | |||||||
| Assets | ||||||||
| Current assets | ||||||||
| Cash | $ | 84,904 | $ | 994,830 | ||||
| Prepayment | 3,500,000 | 3,815 | ||||||
| Total Current Assets | 3,584,904 | 998,645 | ||||||
| Deposit | 3,815 | 3,815 | ||||||
| Total Assets | $ | 3,588,719 | $ | 1,002,460 | ||||
| Liabilities and Equity | ||||||||
| Accounts Payable | 11,446 | - | ||||||
| Other payable | - | 300,000 | ||||||
| Due to related party | - | 22,517 | ||||||
| Due to shareholder | - | 46,586 | ||||||
| Short term loan | 2,050,000 | - | ||||||
| Total Liabilities | 2,061,446 | 369,103 | ||||||
| Commitments and Contingencies | ||||||||
| Stockholders’ equity | ||||||||
| Common Stock 360,000,000 authorized at $0.001 par value; shares issued and outstanding 209,352,897 and 3,113,856 at June 30, 2016 and September 30, 2015 | 209,353 | 3,114 | ||||||
| Additional paid-in capital | 1,987,127 | 1,295,845 | ||||||
| Subscription receivable | - | (350,000 | ) | |||||
| Retained earnings-beginning | (315,602 | ) | - | |||||
| Retained earnings | (353,605 | ) | (315,602 | ) | ||||
| Total equity | 1,527,273 | 633,357 | ||||||
| Total liabilities and equity | $ | 3,588,719 | $ | 1,002,460 | ||||
"The accompanying notes are an integral part of these condensed consolidated financial statements."
| F-2 |
American BriVision (Holding) Corporation.
(formerly METU BRANDS, INC.)
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
| For the three months ended June 30, 2016 | For the period From July 21, 2015 (inception) to September 30, 2015 | |||||||
| Revenues | $ | - | $ | - | ||||
| Cost of sales | - | - | ||||||
| Gross loss | - | - | ||||||
| Operating expenses | ||||||||
| Selling, general and administrative expenses | 289,098 | 315,602 | ||||||
| Net loss from operations | (289,098 | ) | (315,602 | ) | ||||
| Other income(expense) | ||||||||
| Bank Interest Income | 361 | |||||||
| Gain on exchange differences | 89 | |||||||
| Sundry income | - | |||||||
| Interest Expense | (3,753 | ) | - | |||||
| Total Other Income | (3,303 | ) | - | |||||
| Loss from continuing operations before income taxes | (292,401 | ) | (315,602 | ) | ||||
| Income taxes | (836 | ) | - | |||||
| Net loss | $ | (293,237 | ) | $ | (315,602 | ) | ||
| Basic and Diluted loss per share | ||||||||
| Basic and diluted loss per share | (0.00 | ) | (0.1 | ) | ||||
| Weighted average number of shares outstanding basic and diluted | 208,779,424 | 3,113,856 | ||||||
"The accompanying notes are an integral part of these condensed consolidated financial statements."
| F-3 |
American BriVision (Holding) Corporation.
(formerly METU BRANDS, INC.)
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW
(Unaudited)
| For the nine months ended June 30, 2016 | For the period From July 21, 2015 (inception) to September 30, 2015 | |||||||
| Cash flows from operating activities | ||||||||
| Net loss from continuing operations | $ | (353,605 | ) | $ | (315,602 | ) | ||
| Adjustments to reconcile net loss to net cash used by operating activities: | ||||||||
| (Increase) decrease in deposit | - | (3,815 | ) | |||||
| (Increase) decrease in prepayment | (3,496,185 | ) | (3,815 | ) | ||||
| (Increase) decrease in due from related party | 350,000 | - | ||||||
| Increase (decrease) in other payable | (300,000 | ) | 300,000 | |||||
| Increase (decrease) in due to related party | (22,517 | ) | 22,517 | |||||
| Increase (decrease) in due to shareholder | (46,586 | ) | 46,586 | |||||
| Increase (decrease) in accounts payable | 11,446 | - | ||||||
| Net cash used in operating activities | (3,857,447 | ) | 45,871 | |||||
| Cash flows from investing activities | ||||||||
| Net cash provided(used) by investing activities | - | - | ||||||
| Cash flows from financing activities | ||||||||
| Proceeds from short term loans | 2,050,000 | - | ||||||
| Proceeds from issuance of shares | 897,521 | 948,959 | ||||||
| Net cash provided(used) by financing activities | 2,947,521 | 948,959 | ||||||
| Effect Of Exchange Rates On Cash | - | - | ||||||
| Net increase(decrease) in cash | (909,926 | ) | 994,830 | |||||
| Cash, beginning of period | 994,830 | - | ||||||
| Cash, end of period | $ | 84,904 | $ | 994,830 | ||||
| Supplemental disclosure of cash flow information | ||||||||
| Interest paid | $ | - | $ | - | ||||
| Income taxes paid | $ | - | $ | - | ||||
"The accompanying notes are an integral part of these condensed consolidated financial statements."
| F-4 |
American BriVision (Holding) Corporation.
(formerly METU BRANDS, INC.)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
AS OF JUNE 30, 2016 AND SEPTEMBER 30, 2015
(Unaudited)
1. ORGANIZATION AND DESCRIPTION OF BUSINESS
American BriVision (Holding) Corporation (the “Company” or any other person. We will make copies“Holding entity”), a Nevada corporation, thru the Company’s operating entity, American BriVision Corporation (“BriVision”), which was incorporated in July 2015 in the State of this prospectus availableDelaware, engages in biotechnology and focuses on the development of new drugs and innovative medical devices to fulfill unmet medical needs. The business model of the Company is to integrate research achievements from world-famous institutions (such as Memorial Sloan Kettering Cancer Center (“MSKCC”) and MD Anderson Cancer Center), conduct clinical trials of translational medicine for Proof of Concept (“POC”), out-license to international pharmaceutical companies, and exploit global markets.
REVERSE MERGER
On February 8, 2016, a Share Exchange Agreement (“Share Exchange Agreement”) was entered into by and among American BriVision (Holding) Corporation (the “Company”), American BriVision Corporation (“BriVision”), Euro-Asia Investment & Finance Corp. Limited, a company incorporated under the laws of Hong Kong Special Administrative Region of Taiwan (“Euro-Asia”), being the owners of record of 52,336,000 shares of common stock of the Company, and the owners of record of all of the issued share capital of BriVision (the “BriVision Stock”). Pursuant to the selling shareholderShare Exchange Agreement, upon surrender by the BriVision Shareholders and have informed themthe cancellation by BriVision of the needcertificates evidencing the BriVision Stock as registered in the name of each BriVision Shareholder, and pursuant to deliverthe registration of the Company in the register of members maintained by BriVision as the new holder of the BriVision Stock and the issuance of the certificates evidencing the aforementioned registration of the BriVision Stock in the name of the Company, the Company should issue 52,936,583 shares (the “Acquisition Stock”) (subject to adjustment for fractionalized shares as set forth below) of the Company’s common stock to the BriVision Shareholders (or their designees), and 51,945,225 shares of the Company’s common stock owned by Euro-Asia should be cancelled and retired to treasury. The Acquisition Stock collectively should represent 79.70% of the issued and outstanding common stock of the Company immediately after the Closing, in exchange for the BriVision Stock, representing 100% of the issued share capital of BriVision. Because of the exchange of the BriVision Stock for the Acquisition Stock (the “Share Exchange”), BriVision became a copywholly owned subsidiary (the “Subsidiary”) of this prospectusthe Company and there was a change of control of the Company following the closing. There were no warrants, options or other equity instruments issued in connection with the share exchange agreement.
Because of the consummation of the Share Exchange, BriVision is now our wholly owned subsidiary and its shareholders own approximately 79.70% of our issued and outstanding common stock.
Following the Share Exchange, we have abandoned our prior business plan and we are now pursuing BriVision’s historical businesses and proposed businesses, which focus on the development of new drugs and innovative medical devices to each purchaser at orfulfill unmet medical needs. The business model of the Company is to integrate research achievements from world-famous institutions, conduct clinical trials of translational medicine for Proof of Concept (“POC”), out-license to international pharmaceutical companies, and exploit global markets.
Accounting Treatment of the Reverse Merger
For financial reporting purposes, the Share Exchange represents a “reverse merger” rather than a business combination and BriVision is deemed the accounting acquirer in the transaction. The Share Exchange is being accounted for as a reverse-merger and recapitalization. BriVision is the acquirer for financial reporting purposes and the Company is the acquired company. Consequently, the assets and liabilities and the operations reflected in the historical financial statements prior to the timeShare Exchange will be those of BriVision and recorded at the historical cost basis of BriVision. In addition, the consolidated financial statements after completion of the sale (including by complianceShare Exchange will include the assets and liabilities of the Company and BriVision, and the historical operations of BriVision and operations of the Combined Company from the closing date of the Share Exchange.
| F-5 |
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The accompanying audited financial statements and related notes have been prepared in accordance with Rule 172 undergenerally accepted accounting principles in the Securities Act).
Certain information and to obtain your signature to show that youfootnote disclosure normally included in financial statements prepared in accordance with US GAAP have received it, before your first trade in a penny stock. This statement contains important information — and you should read it carefully before you sign it, and before you decide to purchasebeen condensed or sell a penny stock.
Use of Estimates
The firm also must send a confirmationpreparation of these pricesconsolidated financial statements in conformity with U.S. GAAP requires management to you aftermake estimates and assumptions that affect the trade. You will need this price information to determine what profit or loss, if any, you will have when you sell your stock.
Forward Stock split
On March 21, 2016, the dealer has no bid price, you may not be able to sell the stock after you buy it, and may lose your whole investment
Fair Value Measurements
The Company applies the provisions of ASC Subtopic 820-10, “Fair Value Measurements”, for fair value measurements of financial assets and 10,000,000 sharesfinancial liabilities and for fair value measurements of preferred stock, parnonfinancial items that are recognized or disclosed at fair value $0.001 per share.
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities, the Company considers the principal or most advantageous market in which it would transact and it considers assumptions that market participants would use when pricing the asset or liability.
ASC 820 establishes a fair value hierarchy that requires an entity to maximize the use of Sharesobservable inputs and minimize the use of Common Outstanding After This Offering
· Level 1 inputs to one votethe valuation methodology are quoted prices (unadjusted) for each share of common stock held of recordidentical assets or liabilities in active markets.
· Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the electionassets or liability, either directly or indirectly, for substantially the full term of directorsthe financial instruments.
· Level 3 inputs to the valuation methodology are unobservable and significant to the fair value.
There were no assets or liabilities measured at fair value on all matters submitted to a vote of stockholders. Holders of our common stock are entitled to receive ratably any dividends that are declared by our board of directors out of legally available funds, subject to any preferential dividend rights of any preferred stock then outstanding. Upon our dissolution, liquidation or winding up, holders of our common stock are entitled to share ratably in our net assets legally available after the payment of all our debts and other liabilities,recurring basis subject to the preferential rightsdisclosure requirements of any preferred stock then outstanding. Holders of our common stock have no preemptive, subscription, redemption or conversion rights. The rights, preferences and privileges of holders of common stock are subject to, and may be adversely affected by, the rights of the holders of shares of any series of preferred stock that we may designate and issue in the future.
| F-6 |
Cash and Cash Equivalents
The Company considers highly liquid investments with maturities of three months or less, when purchased, to acquire 3,230,119 common shares. Ofbe cash equivalents. As of June 30, 2016, the 51,984,241shares beneficially outstanding, 34,199,384 were held by affiliatesCompany’s cash and 17,784,857were held by non-affiliates. For purposescash equivalents amounted $84,904. As of September 30, 2015, the Company’s cash and cash equivalents amounted $994,830. All of the foregoing, we have treated all sharesCompany’s cash deposits are held by executive officers, directorsin a financial institution located in PRC where there is currently regulation mandated on obligatory insurance of bank accounts. The Company believes this financial institution is of high credit quality.
Income Taxes
The Company accounts for income taxes using the asset and Equity 11liability approach which allows the recognition and measurement of deferred tax assets to be based upon the likelihood of realization of tax benefits in future years. Under the asset and liability approach, deferred taxes are provided for the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. A valuation allowance is provided for deferred tax assets if it is more likely than not these items will expire before the Company is able to realize their benefits, or future deductibility is uncertain.
Under ASC 740, a tax position is recognized as “affiliate” shares.
As of November 16, 2009, 32,835,684 shares of our common stock wereJune 30, 2016 and September 30, 2015, the Company’s income tax expense amounted $836 and $0, respectively.
Recent Accounting Pronouncements
From time to time, new accounting standards issued and outstanding. The number of shares of common stock outstanding after this offering will be 37,175,684, including common shares that are converted from certain preferred shares held by the selling shareholder. The numberFinancial Accounting Standards Board (“FASB”) or other standard setting bodies are adopted by the Company as of issuable sharesthe specified effective date. Unless otherwise discussed, the Company believes that the impact of common stock issuable upon the exercise of options and warrantsrecently issued standards that are not vested andyet effective will not vest by January 17,, 2010 is 1,901,000.
3. COLLAOBRATIVE AGREEMENT
On August 28, 2008, weDecember 29, 2015, American BriVision Corporation entered into a Securities PurchaseCollaborative Agreement (“Securities Purchase Agreement”) with Equity 11, Ltd. (“Equity 11”)BioLite Inc., a related party, pursuant to issue upwhich BioLite granted the Company sole licensing rights for drug and therapeutic use of five products: BLI-1005 CNS-Major Depressive Disorder; BLI-1008 CNS-Attention Deficit Hyperactivity Disorder; BLI-1401-1 Anti-Tumor Combination Therapy-Solid Tumor with Anti-PD-1; BLI-1401-2 Anti-Tumor Combination Therapy-Triple Negative Breast Cancer; and BLI-1501 Hematology-Chronic Lymphocytic Leukemia, in USA and Canada. The total consideration of obtaining such grant would be $100,000,000.
Pursuant to $5,000,000the Collaborative Agreement, an upfront payment of $3,500,000 (the “Milestone Payment”), which is 3.5% of total payments due under the Collaborative Agreement, was to be paid by the Company upon signing of that agreement. On May 6, 2016, we and Biolite agreed to amend the Collaborative Agreement, through entry into the Milestone Payment Agreement, whereby we have agreed to pay the Milestone Payment to BioLite $2,600,000 in convertible preferred securities. The securities accrue cumulative dividends at 5% per annumcash and the entire amount then outstanding is convertible at the option of the investor into$900,000 in newly issued shares of our common stock, at fixedthe price of $.50 per share. The preferred securities carry “as converted” voting rights. As of September 30, 2009, we had issued 2,436 of these convertible preferred shares and warrants to acquire 1,178,500 common shares at $.75 per share. When we sold additional convertible preferred securities under the Securities Purchase Agreement, we issued attached warrants (500 warrants for each $1,000 convertible preferred share sold). The warrants are immediately exercisable, expire in five years, and entitle the investor to purchase one share of our common stock at $.75$1.60 per share, for each warrant issued. Equity 11 will convert all of its 2,436 shares of convertible preferred securities into an aggregate number of 4,872,000562,500 shares. The cash payment and shares issuance were completed in June 2016.
| F-7 |
This Collaborative Agreement shall, once signed by both Parties, remain in effect for fifteen years as of the first commercial sales of the Product in the Territory and automatically renew for five more years unless either party gives the other party six month written notice of termination prior to the expiration date of the term.
The Company determined to record the intangible assets and begin to amortize once the first commercial sales was consummated.
The process related to first commercial sales has not begun as of June 30, 2016. The Company cannot make a reasonably reliable estimate of when the first commercial sales would take place.
4. RELATED PARTIES TRANSACTIONS
As of June 30, 2016 and September 30, 2015, the amount due to a related party, BioLite, Inc (“Biolite”) was $0 and $22,517 respectively.
As of June 30, 2016 and September 30, 2015, the amount due to shareholder, YuanGene Corporation, was $0 and $46,586 respectively.
5. ACCOUNTS PAYABLE
As of June 30, 2016 and September 30, 2015, the amount Accounts Payable to LiteArt, Inc. was $11,446 and $0 respectively.
6. EQUTIY
During October 2015, $350,000 of subscription receivable was fully collected from the shareholders.
On March 21, 2016, the Board of Directors of the Company approved an amendment to Articles of Incorporation to effect a forward split at a ratio of 1 to 3:141 (the “Forward Stock Split”) and increase the number of our common stock in connection with this offering. If all of the convertible preferred shares are converted into common stock and all warrants are exercised under the Securities Purchase Agreement, Equity 11 will have acquired a total of 6,050,500 common shares pursuant to this Agreement. Under Section 5.8 of the Securities Purchase Agreement with Equity 11, we have agreed to file a registration statement with the SEC (of which the prospectus is a part) with respect to ourauthorized shares of common stock, held by Equity 11. Until August 28, 2011, the Securities Purchase Agreement allows Equity 11par value $0.001 per share, to elect three360,000,000, which was effective on April 8, 2016.
The majority of the five members of our Board of Directors for a period of three years. In addition, so long as Equity 11 retains at least 1,260 convertible preferred shares issued under the Securities Purchase Agreement, Equity 11 will have the right to appoint our Chief Executive Officer. We were unable to pay the cash dividends due on December 1, 2008 and June 1, 2009 for preferred shares purchased under the Securities Purchase Agreement and, as is permitted under the Agreement, we issued additional preferred shares in lieu of cash. Our ability to pay future dividends on preferred shares held by Equity 11 is dependent on our ability to generate revenue and/or raise additional capital from Equity 11 or others.
7. COMMITMENTS AND CONTINGENCIES
Capital Commitment
On December 29, 2015, the Convertible Preferred Shares into shares of our common stock at a fixed conversion price that is twenty percent (20%) of the average of the closing price of our common stock on the Over-The-Counter Bulletin Board for the five trading days prior to each investment. Under Section 5.8 of the Preferred Securities Agreement, we have agreed to file a registration statement with the SEC (of which the prospectus is a part) with respect to the shares of our common stock held by Equity 11. Until May 15, 2012, the Preferred Securities Agreement allows Equity 11 to elect three of the five members of our Board of Directors. In addition, so long as Equity 11 retains at least 1,501 convertible preferred shares issued under the Preferred Securities Agreement, Equity 11 will have the right to appoint our Chief Executive Officer. We were unable to pay the cash dividend due on June 1, 2009 for preferred shares purchased under the Preferred Securities Agreement and issued additional preferred shares in lieu of cash. Our ability to pay future dividends is dependent on our ability to generate revenue and/or raise additional capital.
| Exercise | Date | Expiration | ||||
| Number of Warrants | Price | Issued | Date | |||
| 100,000 | $0.75 | July 28, 2008 | July 28, 2013 | |||
| 5,000 | $0.75 | August 20, 2008 | August 20, 2013 | |||
| 25,000 | $0.75 | August 27, 2008 | August 27, 2013 | |||
| 500,000 | $0.75 | August 29, 2008 | August 29, 2013 | |||
| 375,000 | $0.75 | September 26, 2008 | September 26, 2013 | |||
| 47,000 | $0.75 | January 23, 2009 | January 23, 2014 | |||
| 15,000 | $0.75 | February 12, 2009 | February 12, 2014 | |||
| 12,500 | $0.75 | February 18, 2009 | February 18, 2014 | |||
| 20,000 | $0.75 | February 26, 2009 | February 26, 2014 | |||
| 11,500 | $0.75 | March 10, 2009 | March 10, 2014 | |||
| 40,000 | $0.75 | March 26, 2009 | March 26, 2014 | |||
| 10,750 | $0.75 | April 14, 2009 | April 14, 2014 | |||
| 16,750 | $.075 | April 29, 2009 | April 29, 2014 | |||
| Total: 1,178,500 |
| Number of Warrants | Issue Date | Expiration Date | Acquisition Price per Share | Held By |
| 500,000 | December 18, 2006 | December 18, 2016 | $.90 | Trimax, LLC |
| 2,000,000 | November 11, 2008 | November 11, 2018 | $.50 | Trimax LLC |
| 12,500 | March 1, 2008 | March 1, 2018 | $1.75 | George Resta |
| 262,500 | February 5, 2008 | February 5, 2018 | $2.00 | Hayden Capital USA, LLC |
| 125,000 | March 1, 2008 | March 1, 2018 | $1.75 | Investment Hunter. LLC |
| 210,000 | June 9, 2008 | June 9, 2018 | $2.00 | Hayden Capital USA, LLC |
| 100,000 | June 21, 2008 | June 21, 2018 | $.75 | Mitchell Shaheen |
| 100,000 | July 14, 2008 | July 14, 2018 | $.50 | Mitchell Shaheen |
| 15,000 | July 14, 2008 | July 14, 2018 | $1.75 | George Resta |
| 15,000 | July 14, 2008 | July 14, 2018 | $1.75 | Investment Hunter, LLC |
| 14,400 | October 1, 2009 | October 1, 2019 | $.42 | Stromback Acquisition Corporation |
| Total: 3,354,400 |
| Weighted Average Exercise Price Per Share | Number of Options | Weighted Average (Remaining) Contractual Term | Aggregate Fair Value | |
| Outstanding as of September 30, 2008 | $1.83 | 4,642,119 | 9.2 | $5,011,500 |
| Granted | $.61 | 439,000 | 9.8 | $634,491 |
| Exercised | .50 | 50,000 | --- | $76,447 |
| Forfeited | $2.13 | 850,000 | 7.8 | $1,000,479 |
| Outstanding as of November 16, 2009 | $1.13 | 5,131,119 | 8.5 | $4,569,005 |
| Exercisable | $1.06 | 2,925,119 | 6.7 | $3,249,831 |
Metu Brands, Inc. (“Ecology-CA”) was originally incorporated in California on March 12, 1990. OCIS Corp. (“OCIS”) was incorporated in Nevada on February 6, 2002. OCIS completed a merger with Ecology-CA on July 27, 2007 (the “Merger”). In the Merger, OCIS issued approximately 30,530,684 shares of common stock
Index to the Ecology-CA stockholders. In this transaction, OCIS changed its name from OCIS Corporation to Ecology Coatings, Inc. and our ticker symbol on the OTC Bulletin Board association changed to “ECOC.” As a result of the merger, we became a Nevada corporation and Ecology-CA became a wholly owned subsidiary.
| Page | |||
| Contractual | ||||||||||||||||||||
| Obligations | Total | Less Than 1 Year | 1-3 Years | 4-5 Years | After 5 Years | |||||||||||||||
| Notes Payable | $ | 1,137,604 | $ | 1,137,604 | $ | — | $ | — | $ | — | ||||||||||
| Interest on notes payable | 133,332 | 133,332 | — | — | — | |||||||||||||||
| Contractual Service Agreements | 1,675,139 | 1,162,389 | 512,750 | — | — | |||||||||||||||
| Office Leases | 71,933 | 34,699 | 37,234 | |||||||||||||||||
| Equipment Leases | 21,332 | 7,890 | 13,442 | — | — | |||||||||||||||
| Total Contractual Obligations | $ | 3,039,340 | $ | 2,475,914 | $ | 563,426 | $ | — | $ | — | ||||||||||
| Less Than 1 Year | 1-3 Years | 4-5 Years | After 5 Years | Total | |||||||
| Contractual Service Agreements | $715,835 | $969,750 | --- | --- | $1,685,585 | ||||||
| Office Leases | $28,024 | --- | $28,024 | ||||||||
| Equipment Leases | $7,044 | $5,260 | --- | --- | $12,304 | ||||||
| Total Off-Balance Sheet Obligations | $750,903 | $975,010 | --- | --- | $1,725,913 | ||||||
| Contract Service Provider | Purpose | Monthly Amount | Expiration | Less Than 1 Year | 1-3 Years | 4-5 Years | After 5 Years | Total | |||||||||
| McCloud Communications | IR/PR Services | $5,000 | 12/31/2009 | $30,000 | $30,000 | ||||||||||||
| Wilson, Sonsini, Goodrich & Rosati | SEC Legal Services | $1,667 | 12/31/2009 | $10,002 | $10,002 | ||||||||||||
| RJS Consulting LLC | Business Consulting | $16,000 | 9/17/2011 | $192,000 | $176,000 | $368,000 | |||||||||||
| Robert Crockett | CEO | $16,667 | 9/21/2012 | $200,000 | $400,000 | $600,000 | |||||||||||
| Daniel Iannotti | General Counsel & Secretary | $12,500 | 9/21/2012 | $137,500 | $300,000 | $437,500 | |||||||||||
| F. Thomas Krotine | COO & President | $5,417 | 9/21/2012 | $59,583 | $59,583 | ||||||||||||
| Sally Ramsey | Chief Chemist | $6,250 | 1/1/2012 | $68,750 | $93,750 | $162,500 | |||||||||||
| Total Contractual Service Obligations | $63,501 | $697,835 | $969,750 | $1,667,585 | |||||||||||||
| Contract Service Provider | Purpose | Monthly Amount | Expiration | Less Than 1 Year | 1-3 Years | 4-5 Years | After 5 Years | Total | |
| Seven Industries, Ltd. | Auburn Hills, MI Headquarters | $2,952 | 11/30/2009 | $5,904 | $5,904 | ||||
| $3,110 | 5/31/2010 | $18,966 | $18,966 | ||||||
| $3,154 | 9/30/2010 | $12,617 | $12,617 | ||||||
| Contract Service Provider | Purpose | Monthly Amount | Expiration | Less Than 1 Year | 1-3 Years | 4-5 Years | After 5 Years | Total | |
| Dell Financial Services | Computer Equipment | $42 | 6/17/2010 | $336 | $336 | ||||
| Dell Financial Services | Computer Equipment | $44 | 7/17/2010 | $396 | $396 | ||||
| Ricoh America | Printer/Copier | $526 | 9/22/2011 | $6,312 | $5,260 | $11,572 | |||
| Change in | ||||||||||||||||||||||||||||||||||||
| Pension | ||||||||||||||||||||||||||||||||||||
| Value and | ||||||||||||||||||||||||||||||||||||
| Non-Equity | Nonqualified | |||||||||||||||||||||||||||||||||||
| Incentive | Deferred | |||||||||||||||||||||||||||||||||||
| Stock | Option | Plan | Compensation | All Other | ||||||||||||||||||||||||||||||||
| Year | Salary | Bonus | Awards | Awards | Compensation | Earnings | Compensation | Total | ||||||||||||||||||||||||||||
| Name (a) | (b) | ($) (c) | ($) (d) | ($) (e) | ($) (f) (1) | ($) (g) | ($) (h) | ($) (i) | ($) (j) | |||||||||||||||||||||||||||
| Richard D. Stromback, | 2008 | $ | 305,789 | $ | -0- | $ | -0- | $ | -0- | $ | -0- | $ | -0- | $ | -0- | $ | 305,789 | |||||||||||||||||||
| Chairman & CEO (2) | 2007 | $ | 348,333 | $ | -0- | $ | -0- | $ | 15,399 | $ | -0- | $ | -0- | $ | -0- | $ | 363,732 | |||||||||||||||||||
| Robert G. Crockett, CEO (3) | 2008 | $ | 8,333 | $ | -0- | $ | -0- | $ | 254,701 | $ | -0- | $ | -0- | $ | 1,297 | (5) | $ | 263,034 | ||||||||||||||||||
| 2007 | $ | -0- | $ | -0- | $ | -0- | $ | -0- | $ | -0- | $ | -0- | $ | -0- | $ | -0- | ||||||||||||||||||||
| 9 Months Ending | 6/30/09 | $ | 150,000 | $ | 15,946 | (5) | ||||||||||||||||||||||||||||||
| Sally J.W. Ramsey, | 2008 | $ | 195,833 | $ | -0- | $ | -0- | $ | -0- | $ | -0- | $ | -0- | $ | 12,564 | (5) | $ | 208,397 | ||||||||||||||||||
| Vice President – New | 2007 | $ | 157,146 | $ | 6,667 | $ | -0- | $ | 335,442 | $ | -0- | $ | -0- | $ | 10,081 | (5) | $ | 509,336 | ||||||||||||||||||
| Product Development (4) | ||||||||||||||||||||||||||||||||||||
| 9 Months Ending | 6/30/09 | $ | 74,167 | $ | 12,949 | (5) | ||||||||||||||||||||||||||||||
| F. Thomas Krotine | 2008 | $ | 160,000 | $ | -0- | $ | -0- | $ | -0- | $ | -0- | $ | -0- | $ | 7,342 | (5) | $ | 167,342 | ||||||||||||||||||
| President and COO, Director | 2007 | $ | 155,248 | $ | -0- | $ | -0- | $ | 16,545 | $ | -0- | $ | -0- | $ | -10,341 | (5)(7) | $ | 182,134 | ||||||||||||||||||
| 9 Months Ending | 6/30/09 | $ | 40,667 | $ | 5,008 | (5) | ||||||||||||||||||||||||||||||
| David W. Morgan | 2008 | $ | 210,000 | $ | -0- | $ | -0- | $ | 180,367 | (6) | $ | -0- | $ | -0- | $ | 27,687 | (5)(7) | $ | 418,054 | |||||||||||||||||
| Vice President, CFO and Treasurer (6) | 2007 | $ | 60,000 | $ | -0- | $ | -0- | $ | 469,786 | $ | -0- | $ | -0- | $ | 6,189 | (5)(7) | $ | 535,975 | ||||||||||||||||||
| 9 Months Ending | 6/30/09 | $ | 54,375 | $ | 15,946 | (5) | ||||||||||||||||||||||||||||||
| Kevin Stolz | 2008 | $ | 133,333 | 160,561 | $ | 16,349 | (5) (6) | $ | 310,243 | |||||||||||||||||||||||||||
CFO (6) | 2007 | $ | 80,000 | $ | 16,814 | $ | 3,649 | (5) | $ | 100,463 | ||||||||||||||||||||||||||
| 9 Months Ending | 6/30/09 | $ | 52,500 | $ | 15,946 | (5) | ||||||||||||||||||||||||||||||
| F-9 |
Scrudato & Co., PA
CERTIFIED PUBLIC ACCOUNTING FIRM
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors based on several factors, someand Stockholders of which include responsibilities incumbent with
Metu Brands, Inc.
(formerly Ecology Coatings, Inc.)
We have audited the roleaccompanying balance sheet of each executive to the Company, tenure with the Company,Metu Brands, Inc. (formerly Ecology Coatings, Inc.) as well as Company performance, such as shipment of product at certain thresholds. The vesting period of said options is also tied, in some instances, to Company performance directly related to certain executive’s responsibilities with the Company.
| Option Awards | Stock Awards | |||||||||||||||||||||||||||||||||||
| Equity | Equity | |||||||||||||||||||||||||||||||||||
| Incentive | Incentive | |||||||||||||||||||||||||||||||||||
| Equity | Number | Plan | Plan | |||||||||||||||||||||||||||||||||
| Incentive | of | Market | Awards: | Awards: | ||||||||||||||||||||||||||||||||
| Plan | Shares | Value of | Number of | Market or | ||||||||||||||||||||||||||||||||
| Number of | Number of | Awards: | or Units | Shares or | Unearned | Payout Value | ||||||||||||||||||||||||||||||
| Securities | Securities | Number of | of | Units of | Shares, | of Unearned | ||||||||||||||||||||||||||||||
| Underlying | Underlying | Securities | Stock | Stock | Units or | Shares, Units | ||||||||||||||||||||||||||||||
| Unexercised | Unexercised | Underlying | That | That | Other | or Other | ||||||||||||||||||||||||||||||
| Options | Options | Unexercised | Option | Option | Have | Have | Rights That | Rights That | ||||||||||||||||||||||||||||
| (#) | (#) | Unearned | Exercise | Expiration | Not | Not | Have Not | Have Not | ||||||||||||||||||||||||||||
| Exercisable | Unexercisable | Options (#) | Price | Date | Vested | Vested | Vested | Vested | ||||||||||||||||||||||||||||
| Name (a) | (b) | (c) | (d) | ($) (e) | (f) | (#) (g) | ($) (h) | (#) (i) | ($) (j) | |||||||||||||||||||||||||||
| Richard D. Stromback | 10,000 | 0 | 2.00 | 3/01/2017 | ||||||||||||||||||||||||||||||||
| Sally J.W. Ramsey | 0 | 450,000 | 2.00 | 1/01/2017 | ||||||||||||||||||||||||||||||||
| F. Thomas Krotine | 80,237 | 321,237 | .85 | 11/01/2016 | ||||||||||||||||||||||||||||||||
| 10,000 | 10,000 | 1.00 | 3/01/2017 | |||||||||||||||||||||||||||||||||
| 169,000 | .51 | 9/21/2019 | ||||||||||||||||||||||||||||||||||
| Robert G. Crockett | 110,000 | 1.05 | 9/15/2018 | |||||||||||||||||||||||||||||||||
| 890,000 | .60 | 9/21/2019 | ||||||||||||||||||||||||||||||||||
| J.B. Smith | 0 | 100,000 | 1.05 | 9/17/2018 | ||||||||||||||||||||||||||||||||
| Rocco DelMonaco | 0 | 100,000 | 1.05 | 9/17/2018 | ||||||||||||||||||||||||||||||||
| Change in | ||||||||||||||||||||||||||||
| Pension Value | ||||||||||||||||||||||||||||
| and | ||||||||||||||||||||||||||||
| Fees | Nonqualified | |||||||||||||||||||||||||||
| Earned | Non-Equity | Deferred | ||||||||||||||||||||||||||
| Or Paid | Stock | Option | Incentive Plan | Compensation | All Other | |||||||||||||||||||||||
| in Cash | Awards | Awards | Compensation | Earnings | Compensation | Total | ||||||||||||||||||||||
| Name (a) | ($) | ($) | ($) | ($) | ($) | ($) | ($) | |||||||||||||||||||||
| Richard D. Stromback (1) | $ | -0- | $ | -0- | $ | -0- | (1) | $ | -0- | $ | -0- | $ | -0- | $ | -0- | |||||||||||||
| J.B. Smith (2) | $ | -0- | $ | -0- | $ | 76,971 | (2) | $ | -0- | $ | -0- | $ | 453,259 | (8) | $ | 530,230 | ||||||||||||
| Rocco DelMonaco (3) | $ | -0- | $ | -0- | $ | 76,971 | (3) | $ | -0- | $ | -0- | $ | -0- | $ | 76,971 | |||||||||||||
| F. Thomas Krotine (4) | $ | -0- | $ | -0- | $ | -0- | (5) | $ | -0- | $ | -0- | $ | -0- | $ | -0- | |||||||||||||
| Robert W. Liebig (5) | $ | -0- | $ | -0- | $ | -0- | (6) | $ | -0- | $ | -0- | $ | -0- | $ | -0- | |||||||||||||
| Donald Campion (6) | $ | -0- | $ | -0- | $ | -0- | (7) | $ | -0- | $ | -0- | $ | -0- | $ | -0- | |||||||||||||
| Payment Entity | Purpose | Payment Amount | Frequency | Termination Date | Total Payments Made | Total Payments Remaining |
| Seven Industries, Ltd. (4) | Office Rent | $2,951.76 | Monthly | September 20, 2010 | $25,591.60(2) | $25,072.11 |
| Sales Attack LC (5) | Marketing & Sales Consulting Services | 1) $20,000 per month 2) Stock options to purchase 531,000 shares at $1.05 per share 3) Sales commission of 15% of royalties and 3% of product sales | $20,000 Monthly | May 15, 2009 | $169,333(1) | $0 |
| Jim Juliano (6) | Financial | $7,500 | Monthly | May 15, 2009 | $37,500 (2) | $0 |
| Seven Industries, Ltd. (7) | Promissory Notes | $54,000 | One-Time | May 15, 2009 | $54,337 (3) | $0 |
| JB Smith LC (8) | Promissory Note | $7,000 | One-Time | Terminated | $7,010 (3) | $0 |
| Equity 11 | Purchase of office furniture | $5,832.12 | One-Time | November 14, 2008 | $5,832.12 | $0 |
| JB Smith LC (9) | Promissory Note | $7,716.40 | One-Time | 15 days after demand for payment | $0 | $7,812.59 |
Equity 11 (Selling Shareholder) | Convertible Preferred Shares Dividends | December 1, 2009 | One-Time | If not converted prior to dividend date | $121,800 (11) | |
Equity 11 (Selling Shareholder) | Convertible Preferred Shares Dividends | June 1, 2010 | One-Time | If not converted prior to dividend date | $121,800 (11) | |
Equity 11 (10) (Selling Shareholder) | Convertible Preferred Shares Dividends | December 1, 2010 | One-Time | If not converted prior to dividend date | $121,800 (11) | |
Equity 11 (Selling Shareholder) | Convertible Preferred Shares, Series B Dividends | December 1, 2009 | One-Time | If not converted prior to dividend date | $10,975(11) | |
Equity 11 (Selling Shareholder) | Convertible Preferred Shares, Series B Dividends | June 1, 2010 | One-Time | If not converted prior to dividend date | $10,975(11) | |
Equity 11 (10) (Selling Shareholder) | Convertible Preferred Shares, Series B Dividends | December 1, 2010 | One-Time | If not converted prior to dividend date | $10,975(11) | |
| JB Smith LC | $6500 Promissory Note | September 10, 2009 | One-Time | 15 days after demand for payment | $0 | $6,518 |
| SELLING SHAREHOLDER TOTAL: | $299,603.72 | $426,752.70 | ||||
| ECOLOGY COATINGS, INC. AND SUBSIDIARY | ||
| Consolidated Balance Sheets | ||
| ASSETS | ||
| June 30, 2009 | September 30, 2008 | |
| (Unaudited) | ||
| Current Assets | ||
| Cash and cash equivalents | $4,257 | $974,276 |
| Prepaid expenses | 1,400 | 25,206 |
| Total Current Assets | 5,657 | 999,482 |
| Property and Equipment | ||
| Computer equipment | 30,111 | 22,933 |
| Furniture and fixtures | 21,027 | 18,833 |
| Test equipment | 9,696 | 7,313 |
| Signs | 213 | 213 |
| Software | 6,057 | 1,332 |
| Video | 48,177 | 48,177 |
| Total property and equipment | 115,281 | 98,801 |
| Less: Accumulated depreciation | (42,034) | (22,634) |
| Property and Equipment, net | 73,247 | 76,167 |
| Other Assets | ||
| Patents-net | 437,554 | 421,214 |
| Trademarks-net | 5,771 | 5,029 |
| Total Other Assets | 443,325 | 426,243 |
| Total Assets | $522,229 | $1,501,892 |
| ECOLOGY COATINGS, INC. AND SUBSIDIARY | ||
| Consolidated Balance Sheets | ||
| LIABILITIES AND STOCKHOLDERS' DEFICIT | ||
| June 30, 2009 | September 30, 2008 | |
| (Unaudited) | ||
| Current Liabilities | ||
| Accounts payable | $1,398,823 | $1,359,328 |
| Credit card payable | 114,621 | 92,305 |
| Accrued Liabilities | 4,202 | 12,033 |
| Franchise tax payable | - | 800 |
| Interest payable | 142,380 | 133,332 |
| Notes payable | 582,301 | 894,104 |
| Notes payable - related party | 243,500 | 243,500 |
| Preferred Dividends Payable | 12,258 | 6,300 |
| Total Current Liabilities | 2,498,085 | 2,741,702 |
| Total Liabilities | 2,498,085 | 2,741,702 |
| Commitments and Contingencies (Note 5) | - | - |
| Stockholders' Deficit | ||
| Preferred Stock - 10,000,000 $.001 par value and 10,000,000 | 2 | 2 |
| no par value authorized; 2,800 and 2,010 shares issued and outstanding | ||
| as of June 30, 2009 and September 30, 2008, respectively | ||
| Common Stock - 90,000,000 $.001 par value and 50,000,000 | ||
| no par value authorized; 32,233,600 | ||
| outstanding as of June 30, 2009 and | ||
| September 30, 2008 | 32,234 | 32,234 |
| Additional paid in capital | 19,035,348 | 13,637,160 |
| Accumulated Deficit | (21,043,440) | (14,909,206) |
| Total Stockholders' Deficit | (1,975,856) | (1,239,810) |
| Total Liabilities and Stockholders' Deficit | $522,229 | $1,501,892 |
| ECOLOGY COATINGS, INC. AND SUBSIDIARY | ||||
Consolidated Statements of Operations (Unaudited) | ||||
| For the three months ended | For the three months ended | For the nine months ended | For the nine months ended | |
| June 30, 2009 | June 30, 2008 | June 30, 2009 | June 30, 2008 | |
| Revenues | $- | $4,050 | $- | $24,884 |
| Salaries and Fringe Benefits | 301,700 | 444,920 | 1,105,546 | 1,519,705 |
| Professional Fees | 322,032 | 758,691 | 2,806,104 | 2,245,674 |
| Other general and administrative costs | 63,967 | 111,533 | 239,953 | 556,493 |
| Total General and Administrative Expenses | 687,699 | 1,315,144 | 4,151,603 | 4,321,872 |
| Operating Loss | (687,699) | (1,311,094) | (4,151,603) | (4,296,988) |
| Other Income (Expense) | ||||
| Interest Income | - | 11 | 142 | 5,671 |
| Interest Expense | (49,435) | (966,248) | (222,115) | (1,261,115) |
| Total Other Expenses - net | (49,435) | (966,237) | (221,973) | (1,255,444) |
| Net Loss | $(737,134) | $(2,227,331) | $(4,373,576) | $(5,552,432) |
| Basic and diluted net loss per share | $(0.02) | $(0.07) | $(0.14) | $(0.17) |
| Basic and diluted weighted average | ||||
| common shares outstanding | 32,233,600 | 32,210,684 | 32,233,600 | 32,182,874 |
| For the | For the | ||
| nine months ended | nine months ended | ||
| June 30, 2009 | June 30, 2008 | ||
| OPERATING ACTIVITIES | |||
| Net loss | $(4,373,576) | $(5,552,432) | |
| Adjustments to reconcile net loss | |||
| to net cash used in operating activities: | |||
| Depreciation and amortization | 33,725 | 25,971 | |
| Option expense | 2,866,914 | 1,610,456 | |
| Warrant expense | 63,512 | 841,887 | |
| Beneficial conversion expense | 2,062 | 301,517 | |
| Issuance of stock for extension fee | - | 162,000 | |
| Changes in Asset and Liabilities | |||
| Miscellaneous receivable | - | 1,118 | |
| Prepaid expenses | 23,806 | 41,688 | |
| Accounts payable | 39,495 | 684,429 | |
| Accrued payroll taxes and wages | - | (13,960) | |
| Accrued liabilities | (7,832) | - | |
| Credit card payable | 22,317 | 81,998 | |
| Franchise tax payable | (800) | - | |
| Interest payable | 9,048 | 93,107 | |
| Deferred revenue | - | (24,884) | |
| Net Cash Used In Operating Activities | (1,321,329) | (1,747,105) | |
| INVESTING ACTIVITIES | |||
| Purchase of fixed assets | (16,480) | (49,345) | |
| Purchase of intangibles | (31,409) | (92,546) | |
| Net Cash Used in Investing Activities | (47,889) | (141,891) | |
| FINANCING ACTIVITIES | |||
| Repayment of debt | (372,801) | (91,998) | |
| Proceeds from debt | 61,000 | - | |
| Proceeds from convertible preferred shares | 711,000 | 1,200,000 | |
| Net Cash Provided By Financing Activities | 399,199 | 1,108,002 | |
| Net Change in Cash and Cash Equivalents | (970,019) | (780,994) | |
| CASH AND CASH EQUIVALENTS AT BEGINNING | |||
| OF PERIOD | 974,276 | 808,163 | |
| CASH AND CASH EQUIVALENTS AT END | |||
| OF PERIOD | $4,257 | $27,169 |
| For the | For the | ||
| nine months ended | nine months ended | ||
| June 30, 2009 | June 30, 2008 | ||
| SUPPLEMENTAL DISCLOSURE OF CASH FLOW | |||
| INFORMATION | |||
| Interest paid | $132,000 | $24,614 | |
| SUPPLEMENTAL DISCLOSURE OF NON-CASH | |||
| FINANCING ACTIVITIES | |||
| Common stock for extension fee | $- | $162,000 | |
We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Metu Brands, Inc. (formerly Ecology Coatings, Inc.) as of September 30, 2015 and 2014, and the results of their operations and their cash flows for the year ended September 30, 2015 and the period September 19, 2014 through September 30, 2014(post bankruptcy), the period October 1, 2013 through September 18, 2014 in conformity with accounting principles generally accepted in the United States of America. These interim consolidated
The accompanying financial statements followhave been prepared assuming that Metu Brands, Inc. (formerly Ecology Coatings, Inc.) will continue as a going concern. As more fully described in Note 9, the same accounting policies and methods of their application as theCompany had an accumulated deficit at September 30, 2008 audited annual consolidated financial statements of Ecology Coatings, Inc. (“we”, “us”, the “Company” or “Ecology”). It is suggested that these interim consolidated financial statements be read2015, a net loss and net cash used in conjunction with our September 30, 2008 annual consolidated financial statements included in the Form 10-KSB we filed with the Securities and Exchange Commission on December 23, 2008 which are attached as an exhibit to this registration statement.
| /s/ Scrudato & Co., PA | |
| Califon, New Jersey | |
| October 31, 2015 |
| F-10 |
(Formerly Ecology Coatings, Inc.)
CONSOLIDATED BALANCE SHEETS
SEPTEMBER 30, 2015 AND 2014
(Audited)
| 9/30/2015 | 9/30/2014 | |||||||
| Assets | ||||||||
| Current assets | ||||||||
| Cash | $ | 3,360 | $ | 0 | ||||
| Inventory | 274 | 795 | ||||||
| Total Current Assets | 3,634 | 795 | ||||||
| Property, plant and equipment, net | 0 | 0 | ||||||
| Intangible assets, net | 64,594 | 64,594 | ||||||
| Total Assets | $ | 68,228 | $ | 65,389 | ||||
| Liabilities and Equity (Deficit) | ||||||||
| Accrued expense | 23,150 | 18,030 | ||||||
| Note payable | 7,000 | 7,000 | ||||||
| Related party note payable | 9,000 | 9,000 | ||||||
| Total Liabilities | 39,150 | 34,030 | ||||||
| Commitments and Contingencies (Note 5) | ||||||||
| Preferred stock 10,000,000 authorized at $0.001 par value shares; issued and outstanding 271 and 271 at September 30, 2015 and September 30, 2014 | 1 | 1 | ||||||
| Common stock 90,000,000 authorized at $0.001 par value; shares issued and outstanding 60,011,144 and 11,144 at September 30, 2015 and September 30, 2014 | 60,011 | 11 | ||||||
| Additional paid-in capital | 24,582 | 54,582 | ||||||
| Retained earnings | (55,516 | ) | (23,235 | ) | ||||
| Total equity (deficit) | 29,078 | 31,359 | ||||||
| Total liabilities and equity (deficit) | $ | 68,228 | $ | 65,389 | ||||
The accompanying notes are an integral part of these consolidated financial statements.
| F-11 |
(Formerly Ecology Coatings, Inc.)
STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED SEPTEMBER 30, 2015 AND 2014
(Audited)
| For the year ended September 30, 2015 | For the period from September 19, 2014 through September 30, 2014 | For the period from October 1, 2013 through September 18, 2014 | ||||||||||
| Revenues | $ | 3,360 | $ | 0 | $ | 0 | ||||||
| Cost of sales | 521 | 0 | 0 | |||||||||
| Gross profit | 2,839 | 0 | 0 | |||||||||
| Operating expenses | 35,120 | 23,235 | 70 | |||||||||
| Net income (loss) from operations | (32,281 | ) | (23,235 | ) | (70 | ) | ||||||
| Other income (expense) | ||||||||||||
| Interest expense | 0 | 0 | 0 | |||||||||
| Total Other Income (Expense) | 0 | 0 | 0 | |||||||||
| Income (loss) from continuing operations before income taxes | (32,281 | ) | (23,235 | ) | (70 | ) | ||||||
| Income taxes | 0 | 0 | 0 | |||||||||
| Net income (loss) | $ | (32,281 | ) | $ | (23,235 | ) | $ | (70 | ) | |||
| Basic and Diluted income per share | (0.01 | ) | (2.08 | ) | (0.01 | ) | ||||||
| Weighted average number of shares outstanding - basic and diluted | 5,000,929 | 11,144 | 11,144 | |||||||||
The accompanying notes are an integral part of these consolidated financial statements.
| F-12 |
(Formerly Ecology Coatings, Inc.)
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ (DEFICIENCY) FOR THE YEARS ENDED SEPTEMBER 30, 2015 AND 2014
(Audited)
| Common stock | Preferred stock | Additional paid-in | Accumulated | |||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Capital | Deficit | Total | ||||||||||||||||||||||
| Balance at October 1, 2013 | 11,144 | $ | 11 | 271 | $ | 1 | $ | 28,670,072 | $ | (30,550,258 | ) | $ | (1,880,174 | ) | ||||||||||||||
| Fresh start adjustments | 0 | 0 | 0 | 0 | (30,495,734 | ) | 30,550,328 | 54,594 | ||||||||||||||||||||
| Reorganization adjustments | 0 | 0 | 0 | 0 | 1,880,244 | 0 | (1,880,244 | ) | ||||||||||||||||||||
| Net income for the period ended September 18, 2014 | 0 | 0 | 0 | 0 | 0 | (70 | ) | (70 | ) | |||||||||||||||||||
| Balance at September 18, 2014 | 11,144 | 11 | 271 | 1 | 54,582 | 0 | 54,594 | |||||||||||||||||||||
| (POST BANKRUPTCY) | ||||||||||||||||||||||||||||
| Net income for the period ended September 30, 2014 | 0 | 0 | 0 | 0 | 0 | (23,235 | ) | (23,235 | ) | |||||||||||||||||||
| Balance at September 30, 2014 | 11,144 | 11 | 271 | 1 | 54,582 | (23,235 | ) | 31,359 | ||||||||||||||||||||
| Stock issued as compensation | 30,000,000 | 30,000 | 0 | 0 | 0 | 0 | 30,000 | |||||||||||||||||||||
| Bankruptcy shares issued | 30,000,000 | 30,000 | 0 | 0 | (30,000 | ) | 0 | 0 | ||||||||||||||||||||
| Net income for the year ended September 30, 2015 | 0 | 0 | 0 | 0 | 0 | (32,281 | ) | (32,281 | ) | |||||||||||||||||||
| Balance at September 30, 2015 | 60,011,144 | $ | 60,011 | 271 | $ | 1 | $ | 24,582 | $ | (55,516 | ) | $ | 29,078 | |||||||||||||||
The accompanying notes are an integral part of these consolidated financial statements.
| F-13 |
(Formerly Ecology Coatings, Inc.)
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED SEPTEMBER 30, 2015 AND 2014
(Audited)
| For the year ended September 30, 2015 | For the period from September 19, 2014 through September 30, 2014 | For the period from October 1, 2013 through September 19, 2014 | ||||||||||
| Cash flows from operating activities: | ||||||||||||
| Net income (loss) from continuing operations | $ | (32,281 | ) | $ | (23,235 | ) | $ | (70 | ) | |||
| Adjustments to reconcile net loss to net cash used by operating activities: | ||||||||||||
| Stock issued as compensation | 30,000 | 0 | 0 | |||||||||
| (Increase) decrease in accounts receivable | 0 | 0 | 1,238 | |||||||||
| (Increase) decrease in inventory | 521 | (795 | ) | 0 | ||||||||
| Increase (decrease) in accrued expenses | 5,120 | 17,235 | 0 | |||||||||
| Net cash used in operating activities | 3,360 | (6,795 | ) | 1,168 | ||||||||
| Cash flows from investing activities: | ||||||||||||
| Acquisition of intangible assets | 0 | (64,594 | ) | 0 | ||||||||
| Net cash provided (used) by investing activities | 0 | (64,594 | ) | 0 | ||||||||
| Cash flows from financing activities: | ||||||||||||
| Fresh start adjustment | 0 | 30,389 | 0 | |||||||||
| Capital injection to bankruptcy trustee | 0 | 25,000 | 0 | |||||||||
| Proceeds from related party | 0 | 9,000 | 0 | |||||||||
| Proceeds from note payable | 0 | 7,000 | 0 | |||||||||
| Net cash provided (used) by financing activities | 0 | 71,389 | 0 | |||||||||
| Net increase (decrease) in cash | 3,360 | 0 | 1,168 | |||||||||
| Cash, beginning of period | 0 | 0 | 618 | |||||||||
| Cash, end of period | $ | 3,360 | $ | 0 | $ | 1,786 | ||||||
| Supplemental disclosure of cash flow information: | ||||||||||||
| Interest paid | $ | 0 | $ | 0 | $ | 0 | ||||||
| Income taxes paid | $ | 0 | $ | 0 | $ | 0 | ||||||
| Supplemental disclosure of non-cash activities: | ||||||||||||
| Fresh start adjustment | $ | 0 | $ | 0 | $ | 30,550,328 | ||||||
| Bankruptcy reorganization | $ | 0 | $ | 0 | $ | 1,880,244 | ||||||
See report of independent registered public accounting firm and notes to continue as a going concern.
| F-14 |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED SEPTEMBER 30, 2015 AND 2013
Note 1 — Summary of Significant Accounting Policies
Description of the Company.
Reclassifications. Reclassifications have been made to the prior year financial statements to conform with the current year presentation.
Basis of Preparation. The financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States of America and clean processesare presented in manufacturing. We create proprietary coatings with unique performance and environmental attributes by leveraging our platform of integrated nano-material technologies that reduce overall energy consumption and offer a marked decrease in drying time. Ecology’s markets consist of electronics, automotive and trucking, paper products and original equipment manufacturers (“OEMs”).
Principles of Consolidation.
Use of Estimates.
Revenue Recognition.
Loss Per Share.
Property and Equipment.
| Computer equipment | 3-10 years | |||
| Furniture and fixtures | 3-7 years | |||
| Test equipment | 5-7 years | |||
| Signs | 7 years | |||
| Software | 3 years | |||
| Marketing and Promotional Video | 3 years |
| F-15 |
Repairs and maintenance costs are charged to operations as incurred. Betterments or renewals are capitalized as incurred.
Patents. It is our policy to capitalize costs associated with securing a patent. Costs consist of legal and filing fees. Once a patent is issued, it will be amortized on a straight-line basis over its estimated useful life.
Long-Lived Assets. We review long livedlong-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the undiscounted future net cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets.
Stock-Based Compensation.
We account for stock options granted to non-employees under SFAS No. 123(R) using EITF 96-18, requiring the measurement and recognition of stock-based compensation to consultants under the fair-value method with stock-based compensation expense being charged to earnings on the earlier of the date services are performed or a performance commitment exists.
Recent Accounting Pronouncements
We have reviewed all Accounting Standards Updates issued by the FASBFinancial Accounting Standards Board since we last issued SFAS No. 166, Accounting for Transfers of Financial Assets, as amendment to SFAS No. 140 (SFAS166). SFAS 166 eliminates the concept of a “qualifying special-purpose entity,” changes the requirements for derecognizing financial assets, and requires additional disclosures in order to enhance information reported to users of financial statements by providing greater transparency about transfersand have determined none of financial assets, including securitization transactions, and an entity’s continuing involvement in and exposure to the risks related to transferred financial assets. SFAS 166 is effective for fiscal years beginning after November 15, 2009. We will adopt SFAS 166 in fiscal 2010 as applicable. Itthem would not have had any impact on any of the financial statements that we’ve issued to date.
| F-16 |
Note 2 — "Fresh Start" Accounting Standards Codification TM
METU BRANDS, INC.
(Formerly Ecology Coatings, Inc.)
FRESH START ADJUSTMENTS
| 9/19/2014 | Dr(CR) Reorganization Adjustments | Dr(CR) Fresh Start Adjustments | 9/19/2014 | |||||||||||||
| Assets | ||||||||||||||||
| Current assets | ||||||||||||||||
| Cash | $ | 548 | (548 | ) (1) | - | $ | 0 | |||||||||
| Accounts receivable | 1,238 | (1,238 | ) (1) | - | 0 | |||||||||||
| Total Current Assets | 1,786 | - | - | 0 | ||||||||||||
| Property, plant and equipment, net | 37,249 | (37,249 | ) (1) | - | 0 | |||||||||||
| Intangible assets, net | 192,864 | (192,864 | ) (1) | 54,594 | (2) | 54,594 | ||||||||||
| Total Assets | $ | 231,899 | - | - | $ | 54,594 | ||||||||||
| Liabilities and Equity (Deficit) | ||||||||||||||||
| Total liabilities subject to compromise | 2,112,143 | 2,112,143 | (1) | - | 0 | |||||||||||
| Commitments and Contingencies (Note 5) | ||||||||||||||||
| Metu Brands, Inc. ("MTOO") shareholders' deficit | ||||||||||||||||
| Predecessor Preferred Stock 10,000,000 authorized at $0.001 par value shares issued and outstanding 271 at September 19, 2014 | 1 | - | (1 | (3) | 0 | |||||||||||
| Successor Preferred Stock 10,000,000 authorized at $0.001 par value; shares issued and outstanding 54,593,032 at September 19, 2014 | - | - | 1 | (2) | 1 | |||||||||||
| Predecessor/Successor Common Stock 90,000,000 authorized at $0.001 par value; shares issued and outstanding 54,593,032 at September 19, 2014 | 54,593 | - | - | 54,593 | ||||||||||||
| Additional paid-in capital | 28,615,490 | (1,880,244 | ) (1) | 30,495,734 | (3) | 0 | ||||||||||
| Retained earnings | (30,550,328 | ) | - | (30,550,328) | (4) | 0 | ||||||||||
| Total equity (deficit) | (1,880,244 | ) | - | - | 54,594 | |||||||||||
| Total liabilities and equity (deficit) | $ | 231,899 | $ | 0 | $ | 0 | $ | 54,594 | ||||||||
(1) Reorganization adjustments reflect the transfer of $2,112,143 of liabilities subject to compromise and assets to the Hierarchybankruptcy trustee in accordance with the plan of Generally Accepted Accounting Principles—a replacement of FASB Statement No. 162 (“SFAS 168”). The FASB Accounting Standards CodificationTM (“Codification”) will become the source of authoritative U.S. generally accepted accounting principles (“GAAP”) recognized by the FASB to be applied by nongovernmental entities. Rules and interpretive releasesbankruptcy provisions.
(2) Fresh-start adjustments under section 852-10-45-17 as of the SEC under authority of federal securities laws are also sources of authoritative GAAP for SEC registrants. On the effective date of SFAS 168,sale of the Codification will supersede all then-existing non-SEC accountingcorporate shell to reflect intangible assets sale through section 363 of the bankruptcy code.
(3) Fresh-start adjustments under ASC 852-10-45-17 to predecessor preferred stock and reporting standards. All other non-grandfathered non-SEC accounting literature not included inAPIC reflect the Codification will become non-authoritative. SFAS 168 becomes effective for uscancellation of the predecessor’s preferred stock.
(4) Fresh-start adjustment to retained earnings (accumulated deficit) resets accumulated deficit to zero.
(5) $20,000 was paid to the trustee by Shulamit Lazar for the period ending after September 15, 2009. We have determined thatsubsequent issue of 30,000,000 common shares and $5,000 was paid to the adoptiontrustee by Innovation Consulting LLC for the purchase of SFAS 168 will not have an impact on our financial statements.
| F-17 |
Note 3 — Related Party Transactions
We have borrowed funds for our operations from certain major stockholders, directors and officers as disclosed below:
We have an unsecured demand note payable due of $9,000 to Deanna Stromback,Shulamit Lazar, our sole officer and director for funds advanced the Company through the bankruptcy process. This is unsecured with a principal shareholderzero percent interest rate and former director and sister of our Chairman, Rich Stromback, that bears interest at 4% per annum with principal and interest dueis payable on December 31, 2009. demand.
As of June 30, 2009 and September 30, 2008, the note had an outstanding balance of $110,500. The accrued interest on the note was $12,000 and $8,407 as of June 30, 2009 and September 30, 2008, respectively. The note carries certain conversion rights that allow the holder to convert all or part of the outstanding balance intobankruptcy sale Shulamit Lazar was awarded all 271 of the convertible preferred shares.
Shulamit Lazar received compensation of 30,000,000 shares of our common stock upon mutually agreeable terms and conversion price.
| 12 Months Ending June 30, | |||||
| 2010 | $ | 243,500 | |||
Note 4 — Notes Payable
We have the following notes:
| June 30, 2009 | September 30, 2008 | |||||||
| Chris Marquez Note: note payable, 15% per annum interest rate, principal and interest payment was due May 31, 2008; unsecured, convertible at holder’s option into common shares of the Company at $1.60 per share. Accrued interest of $15,367 was outstanding at September 30, 2008. | --- | $ | 94,104 | |||||
| George Resta Note: subordinated note payable, 25% per annum, unsecured, principal and interest was due June 30, 2008; the Company extended the maturity for 30 days, to July 30, 2008 in exchange for warrants to purchase 15,000 shares of the Company’s common stock at $1.75 per share. Additionally, the Company granted the note holder warrants to purchase 12,500 shares of the Company’s common stock at $1.75 per share. Demand for repayment was made on September 8, 2008. On November 14, 2008, we agreed to pay the note holder $10,000 per month until the principal and accrued interest is paid off. We made such payments in October and November of 2008, but did not make payments thereafter. Accrued interest of $6,388 and $7,329 was outstanding as of June 30, 2009 and September 30, 2008, respectively. | $ | 38,744 | 50,000 | |||||
| Investment Hunter, LLC Note: subordinated note payable, 25% per annum, unsecured, principal and interest was due June 30, 2008; the Company extended the maturity for 30 days, to July 30, 2008 in exchange for warrants to purchase 15,000 shares of the Company’s common stock at $1.75 per share. Additionally, the Company granted the note holder warrants to purchase 125,000 shares of the Company’s common stock at $1.75 per share. Demand for repayment was made on September 5, 2008. On November 13, 2008, we agreed to pay the note holder $100,000 per month until the principal and accrued interest is paid off. The payments for October, November, and December were made, but none have been made since. Accrued interest of $43,416 and $73,288 was outstanding as of June 30, 2009 and September 30, 2008, respectively. | $ | 293,557 | 500,000 | |||||
| Mitchell Shaheen Note: subordinated note payable, 25% per annum, unsecured, principal and interest was due July 18, 2008. Additionally, the Company issued a warrant to purchase 100,000 shares of the Company’s common stock at a price equal to $.75 per share (the “Warrant”). The Warrant is exercisable immediately and carries a ten (10) year term. If applicable, the Company has agreed to include the Conversion Shares in its first registration statement filed with the Securities and Exchange Commission. Demand for repayment was made on August 27, 2008. Accrued interest of $37,003 and $10,685 was outstanding as of June 30, 2009 and September 30, 2008, respectively. | 150,000 | 150,000 | ||||||
| Mitchell Shaheen Note: subordinated note payable, 25% per annum, unsecured, principal and interest was due August 10, 2008. Additionally, the Company issued a warrant to purchase 100,000 shares of the Company’s common stock at a price equal to $.50 per share (the “Warrant”). The Warrant is exercisable immediately and carries a ten (10) year term. If applicable, the Company has agreed to include the Conversion Shares in its first registration statement filed with the Securities and Exchange Commission. Demand for repayment was made on August 27, 2008. Accrued interest of $26,540 and $5,548 was outstanding as of June 30, 2009 and September 30, 2008, respectively. | 100,000 | 100,000 | ||||||
| $582,301 | $894,104 | |||||||
| 12 Months Ending June 30, | ||||
| 2010 | $ | 582,301 | ||
Post bankruptcy the Company recognized an embedded beneficial conversion feature presentacquired the assets of Metu Brands Inc. (a ready to operate web site business). In addition to a $3,000 deposit the Company signed a note payable for $7,000. This note was due September 24, 2014 and carries a zero percent interest rate. This note is note in these Notes. The Company allocated the proceeds based on the fair value of $340,043 to the warrants. The warrants are exercisable through March 31, 2018 and the fair value was amortized to interest expense over the term of the Notes.
Note 5 — Commitments and Contingencies
Contingencies.
All contingencies have been settled through our bankruptcy petition in September 2014 subsequent to this financial reporting period.
Lease Commitments.
None.
Note 6 — Equity
Common Stock
As of September 30, 2014 the Company had 11,144 common shares issued and outstanding and 90,000,000 shares of Common Stock authorized par value $0.001 and the holders of the Company's common stock are entitled to one vote per each share of common stock held. Additionally as part of the bankruptcy sale the Company has had a reverse stock split of 5,000 for 1 2007, we entered into a consulting agreement with The Rationale Group, LLC (“Rationale Group”). The managing memberon August 13, 2014 which has been reflected retroactively in these financial statements. 30,000,000 shares of Rationale Group is Dr. William Coyro, Jr., who serves as the chairman of Ecology’s business advisory board. The agreement expired June 1, 2009. Ecology pays Rationale Group $11,000 per month under the Agreement. Additionally, Ecology granted Rationale Group 200,000 optionscommon stock was issued to Shulamit Lazar for her initial $20,000 deposit to purchase the company. The Company also issued 30,000,000 shares of our common stock in the year ended September 30, 2015 to a related party (Shulamit Lazar) for $2.00 per share. Of these options, 50,000 options vested on December 1, 2007, 50,000 options vested on June 1, 2008, 50,000 options vested on December 1, 2008,services valued at $30,000. As of September 30, 2015 the company had 60,011,144 common shares outstanding.
Preferred Stock
As of September 30, 2015 the Company had 10,000,000 shares of Preferred Stock authorized par value $.001 and the remaining 50,000 options vested on June 1, 2009. Additionally, we agreed to reimburse Rationale Group for all reasonable expenses incurred by Rationale Group in the conduct of our business. On February 11, 2009, we amended the agreement upon the following terms:
| F-18 | |||
| Strike | Date | Expiration | ||||
| Number | Price | Issued | Date | |||
| 100,000 | $0.75 | July 28, 2008 | July 28, 2018 | |||
| 5,000 | $0.75 | August 20, 2008 | August 20, 2018 | |||
| 25,000 | $0.75 | August 27, 2008 | August 27, 2018 | |||
| 500,000 | $0.75 | August 29, 2008 | August 29, 2018 | |||
| 375,000 | $0.75 | September 26, 2008 | September 26, 2018 | |||
| 47,000 | $ 0.75 | January 23, 2009 | January 23, 2014 | |||
| 15,000 | $ 0.75 | February 10, 2009 | February 10, 2014 | |||
| 12,500 | $ 0.75 | February 18, 2009 | February 18, 2014 | |||
| 20,000 | $ 0.75 | February 26, 2009 | February 26, 2014 | |||
| 11,500 | $ 0.75 | March 10, 2009 | March 10, 2014 | |||
| 40,000 | $ 0.75 | March 26, 2009 | March 26, 2014 | |||
| 10,750 | $0.75 | April 14, 2009 | April 14, 2014 | |||
| 16,750 | $0.75 | April 29, 2009 | April 29, 2014 |
Note 7 — Stock Options
There were no stock optionoptions issued during the fiscal years ended September 30 2015 and 2014. As part of our bankruptcy agreement approved on September 19, 2014 all common conversion rights of any kind including the equity compensation plan without limitation , warrants, options and reserved 4,500,000 sharesconvertible notes were cancelled and extinguished for the issuancecurrent and prior fiscal years.
Note 8 — Income Taxes
As of September 30, 2015, the Company had approximately $85,516 in post bankruptcy net operating loss carry forwards for federal income tax purposes which expire between 2015 and 2033. Generally, these can be carried forward and applied against future taxable income at the tax rate applicable at that time. We are currently using a 15% effective tax rate for our projected available net operating loss carry-forward. However, as a result of potential stock options or for awards of restricted stock. On December 2, 2008, our Board of Directors authorized the addition of 1,000,000 shares of our common stock to the 2007 Plan. All prior grants of options were included under this plan. The plan provides for incentive stock options, nonqualified stock options, rights to restricted stockofferings and stock appreciation rights. Eligible recipients are employees, directors, and consultants. Only employees are eligible for incentive stock options.
| Weighted Average Exercise Price Per Share | Number of Options | Weighted Average (Remaining) Contractual Term | Aggregate Fair Value | |
| Outstanding as of September 30, 2008 | $1.83 | 4,642,119 | 9.2 | $5,011,500 |
| Granted | $.77 | 490,000 | 9.4 | $311,035 |
| Exercised | --- | --- | --- | --- |
| Forfeited | $2.14 | 850,000 | 7.8 | $928,806 |
| Outstanding as of June 30, 2009 | $1.26 | 4,282,119 | 8.4 | $4,393,729 |
| Exercisable | $1.26 | 2,408,119 | 7.8 | $2,875,310 |
Components of deferred tax assets and (liabilities) are as follows:
| 2015 | 2014 | |||||||
| Net operating loss carry forwards valuation available | $ | 85,516 | $ | 23,235 | ||||
| Valuation Allowances | (29,075 | ) | (3,485 | ) | ||||
| Deferred Tax Asset | 29,075 | 3,485 | ||||||
| Net Deferred Tax Asset | $ | -0- | $ | -0- | ||||
In accordance with FASB ASC 740 “Income Taxes”, Accounting for Stock-Based Compensation. Under the provisions of SFAS Number 123(R), employee and director stock-based compensation expense is measured utilizing the fair-value method.
Note 8 —9 – Going Concern
The accompanying financial statements have been prepared on a going concern basis, which contemplatesassuming that the realization of assets and the satisfaction of liabilities in the normal course of business. For the nine months ended June 30, 2009 and 2008, we incurred net losses of ($4,373,576) and ($5,552,432), respectively. As of June 30, 2009 and September 30, 2008, we had stockholders’ deficits of ($1,975,856) and ($1,239,810), respectively.
| F-19 |
Note 9 — Subsequent Events
On September 25, 2014 the company entered into an agreement to buy the ready to operate business assets of Metu Brands Inc. The cost of this acquisition was $10,000 which was allocated $795 to inventory and $9,205 to the intangible assets of the "MeTu" trade name and web site MeTuBoutique.com.
Note 11 - Net Income (Loss) Per Share
The Company evaluated subsequent events for potential recognition and/or disclosure through August 19, 2009, the date we filed our most recent Form 10-Q periodic reportreports basic and consolidated financial statements. No subsequent events have occurred to cause us to change the financial statements as filed in our most recent Form 10-Q or Form 10-KSB periodic reports.
| Consolidated Balance Sheets | ||||||||
| ASSETS | ||||||||
| September 30, 2008 | September 30, 2007 | |||||||
| Current Assets | ||||||||
| Cash and cash equivalents | $ | 974,276 | $ | 808,163 | ||||
| Miscellaneous receivable | - | 1,118 | ||||||
| Prepaid expenses | 25,206 | 70,888 | ||||||
| Total Current Assets | 999,482 | 880,169 | ||||||
| Property and Equipment | ||||||||
| Computer equipment | 22,933 | 11,285 | ||||||
| Furniture and fixtures | 18,833 | 1,565 | ||||||
| Test equipment | 7,313 | 7,313 | ||||||
| Signs | 213 | 213 | ||||||
| Software | 1,332 | 1,332 | ||||||
| Video | 48,177 | - | ||||||
| Total fixed assets | 98,801 | 21,708 | ||||||
| Less: Accumulated depreciation | (22,634 | ) | (3,794 | ) | ||||
| Property and Equipment, net | 76,167 | 17,914 | ||||||
| Other | ||||||||
| Patents-net | 421,214 | 302,575 | ||||||
| Trademarks-net | 5,029 | 3,465 | ||||||
| Total Other Assets | 426,243 | 306,040 | ||||||
| Total Assets | $ | 1,501,892 | $ | 1,204,123 | ||||
| ECOLOGY COATINGS, INC. AND SUBSIDIARY | ||||||||
| Consolidated Balance Sheets | ||||||||
| LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) | ||||||||
| September 30, 2008 | September 30, 2007 | |||||||
| Current Liabilities | ||||||||
| Accounts payable | $ | 1,359,328 | $ | 429,790 | ||||
| Credit card payable | 92,305 | 14,772 | ||||||
| Deferred revenue | - | 24,884 | ||||||
| Accrued liabilities | 12,033 | - | ||||||
| Payroll taxes payable | - | 1,459 | ||||||
| Accrued wages | - | 12,500 | ||||||
| Franchise tax payable | 800 | 800 | ||||||
| Interest payable | 133,332 | 15,851 | ||||||
| Notes payable | 894,104 | 170,280 | ||||||
| Notes payable - related party | 243,500 | 243,500 | ||||||
| Preferred dividends payable | 6,300 | - | ||||||
| Total Current Liabilities | 2,741,702 | 913,836 | ||||||
| Total Liabilities | 2,741,702 | 913,836 | ||||||
| Commitments and Contingencies (Note 5) | ||||||||
| Stockholders' Equity (Deficit) | ||||||||
| Preferred Stock - 10,000,000 $.001 par value shares | ||||||||
| authorized; 2,010 and 0 shares issued and outstanding | ||||||||
| as of September 30, 2008 and September 30, 2007, respectively | 2 | - | ||||||
| Common Stock - 90,000,000 $.001 par value shares | ||||||||
| authorized; 32,210,684 and 32,150,684 | ||||||||
| outstanding as of September 30, 2008 and | ||||||||
| September 30, 2007, respectively | 32,234 | 32,174 | ||||||
| Additional paid in capital | 13,637,160 | 6,165,282 | ||||||
| Accumulated Deficit | (14,909,206 | ) | (5,907,169 | ) | ||||
| Total Stockholders' Equity (Deficit) | (1,239,810 | ) | 290,287 | |||||
| Total Liabilities and Stockholders' | ||||||||
| Equity (Deficit) | $ | 1,501,892 | �� | $ | 1,204,123 | |||
| ECOLOGY COATINGS, INC. AND SUBSIDIARY | ||||||||
| Consolidated Statements of Operations | ||||||||
| For the Year Ended | For the Year Ended | |||||||
| September 30, 2008 | September 30, 2007 | |||||||
| Revenues | $ | 25,092 | $ | 41,668 | ||||
| Salaries and fringe benefits | 2,006,776 | 1,409,840 | ||||||
| Professional fees | 2,735,360 | 2,583,927 | ||||||
| Other general and administrative costs | 637,668 | 463,199 | ||||||
| Operating Loss | (5,354,712 | ) | (4,415,298 | ) | ||||
| Other Income (Expenses) | ||||||||
| Interest income | 5,784 | 20,940 | ||||||
| Interest expense | (1,421,394 | ) | (256,512 | ) | ||||
| Total Other (Expenses), net | (1,415,610 | ) | (235,572 | ) | ||||
| Net Loss | $ | (6,770,322 | ) | $ | (4,650,870 | ) | ||
| Basic and diluted net loss per share | $ | (0.21 | ) | $ | (0.16 | ) | ||
| Basic and diluted weighted average of | ||||||||
| common shares outstanding | 32,189,864 | 29,178,144 | ||||||
| ECOLOGY COATINGS, INC. AND SUBSIDIARY | |||||||||||||||||||||||||||
| Statement of Changes in Shareholders’ Equity (Deficit) for the Years Ended September 30, 2008 and 2007 | |||||||||||||||||||||||||||
| Additional | Total | ||||||||||||||||||||||||||
| Paid In | Accumulated | Stockholders' | |||||||||||||||||||||||||
| Common Stock | Preferred Stock | Capital | Deficit | Equity | |||||||||||||||||||||||
| Shares | Amount | Shares | Amount | (Deficit) | |||||||||||||||||||||||
| Balance at September 30, 2006 | 28,200,000 | $ | 142,000 | - | $ | - | $ | - | $ | (1,256,299 | ) | $ | (1,114,299) | ||||||||||||||
| Beneficial conversion feature on convertible debt | - | - | - | - | 116,819 | - | 116,819 | ||||||||||||||||||||
| Stock option expense | - | - | - | - | 1,288,670 | - | 1,288,670 | ||||||||||||||||||||
| Warrants issued with debt | - | - | - | - | 4,497 | - | 4,497 | ||||||||||||||||||||
| Issuance of stock, net of issuance costs of $10,789 | 3,950,684 | 4,645,470 | - | - | - | - | 4,645,470 | ||||||||||||||||||||
| Creation of par value stock | - | (4,755,296 | ) | - | - | 4,755,296 | - | - | |||||||||||||||||||
| Net loss | - | - | - | - | - | (4,650,870 | ) | (4,650,870) | |||||||||||||||||||
| Balance at September 30, 2007 | 32,150,684 | $ | 32,174 | - | $ | - | $ | 6,165,282 | $ | (5,907,169 | ) | $ | 290,287 | ||||||||||||||
| Issuance of stock for debt extension | 60,000 | 60 | - | - | 161,940 | - | 162,000 | ||||||||||||||||||||
| Issuance of warrants for debt extension | - | - | - | - | 26,343 | - | 26,343 | ||||||||||||||||||||
| Issuance of preferred stock | - | 2,010 | 2 | 1,500,585 | - | 1,500,585 | |||||||||||||||||||||
| Beneficial conversion feature on preferred stock | - | - | - | - | 2,225,415 | (2,225,415 | ) | - | |||||||||||||||||||
| Warrants issued with preferred stock | - | - | - | - | 509,415 | - | 509,415 | ||||||||||||||||||||
| Beneficial conversion feature on debt | - | - | - | - | 358,654 | - | 358,654 | ||||||||||||||||||||
| Stock option expense | - | - | - | - | 1,847,639 | - | 1,847,639 | ||||||||||||||||||||
| Warrants issued with debt | - | - | - | - | 841,887 | - | 841,887 | ||||||||||||||||||||
| Preferred dividends | - | - | - | - | - | (6,300 | ) | (6,300) | |||||||||||||||||||
| Net Loss | - | - | - | - | - | (6,770,322 | ) | (6,770,322) | |||||||||||||||||||
| Balance at September 30, 2008 | 32,210,684 | $ | 32,234 | 2,010 | $ | 2 | $ | 13,637,160 | $ | (14,909,206 | ) | $ | (1,239,810) | ||||||||||||||
| ECOLOGY COATINGS, INC. AND SUBSIDIARY | ||||||||
| Consolidated Statements of Cash Flows | ||||||||
| For the Year | For the Year | |||||||
| Ended | Ended | |||||||
| September 30, 2008 | September 30, 2007 | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||
| Net loss | $ | (6,770,322 | ) | $ | (4,650,870 | ) | ||
| Adjustments to reconcile net loss | ||||||||
| to net cash (used in) operating activities: | ||||||||
| Depreciation and amortization | 37,486 | 12,757 | ||||||
| Option expense | 1,847,639 | 1,288,670 | ||||||
| Interest paid through conversion to stock | - | 137,391 | ||||||
| Beneficial conversion expense | 374,476 | 116,819 | ||||||
| Issuance of stock for debt extension | 162,000 | 412,500 | ||||||
| Warrants | 868,231 | 4,497 | ||||||
| Changes in Asset and Liabilities | ||||||||
| Miscellaneous receivable | 1,118 | (1,118 | ) | |||||
| Prepaid expenses | 45,683 | (39,531 | ) | |||||
| Accounts payable | 929,539 | 144,122 | ||||||
| Accrued payroll taxes and wages | (13,960 | ) | (28,428 | ) | ||||
| Accrued liabilities | 12,033 | - | ||||||
| Credit card payable | 77,533 | 14,772 | ||||||
| Interest payable | 117,481 | (62,893 | ) | |||||
| Deferred revenue | (24,884 | ) | (41,668 | ) | ||||
| Net Cash Used in Operating Activities | (2,335,947 | ) | (2,692,980 | ) | ||||
| CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||
| Purchase of fixed assets | (77,094 | ) | (12,050 | ) | ||||
| Purchase of intangibles | (138,848 | ) | (85,514 | ) | ||||
| Net Cash Used in Investing Activities | (215,942 | ) | (97,564 | ) | ||||
| Repayment of notes payable - related parties | - | (53,530 | ) | |||||
| Repayment of notes payable | (591,998 | ) | (67,642 | ) | ||||
| Proceeds from notes payable and warrants | 1,300,000 | 500,000 | ||||||
| Issuance of preferred stock | 2,010,000 | - | ||||||
| Issuance of common stock | - | 2,483,500 | ||||||
| Net Cash Provided by Financing Activities | 2,718,002 | 2,862,328 | ||||||
| Net Increase in Cash and Cash Equivalents | 166,113 | 71,784 | ||||||
| CASH AND CASH EQUIVALENTS AT BEGINNING | ||||||||
| OF PERIOD | 808,163 | 736,379 | ||||||
| CASH AND CASH EQUIVALENTS AT END | ||||||||
| OF PERIOD | $ | 974,276 | $ | 808,163 | ||||
| ECOLOGY COATINGS, INC. AND SUBSIDIARY | ||||||||
| Consolidated Statements of Cash Flows | ||||||||
| For the Year | For the Year | |||||||
| Ended | Ended | |||||||
| September 30, 2008 | September 30, 2007 | |||||||
| SUPPLEMENTAL DISCLOSURE OF CASH FLOW | ||||||||
| INFORMATION | ||||||||
| Interest paid | $ | 79,284 | $ | 114,253 | ||||
| Income taxes paid | - | - | ||||||
| SUPPLEMENTAL DISCLOSURE OF NON-CASH | ||||||||
| FINANCING ACTIVITIES | ||||||||
| Conversion of notes and interest for common stock | $ | - | $ | 1,749,470 | ||||
| Issuance of common stock for services | $ | - | $ | 412,500 | ||||
| Issuance of common stock for debt extension | $ | 162,000 | $ | - | ||||
| 2015 | 2014 | |||||||
| Net (Loss) | $ | (32,281 | ) | $ | (23,235 | ) | ||
| Weighted-average common shares outstanding basic | ||||||||
| Weighted-average common stock equivalents | 5,000,929 | 11,144 | ||||||
| Stock options | - | - | ||||||
| Warrants | - | - | ||||||
| Preferred stock | 27,100,000 | 27,100,000 | ||||||
| Weighted-average common shares outstanding - basic and diluted | 3,303,773 | 10,000 | ||||||
Note 11 - Subsequent Events
We have evaluated subsequent events and insurance benefits fortransactions that occurred through the date and time our officers and employees as well as stock based compensation expense for those individuals. Professional fees of $2,735,360 and $2,583,927 for the years ended September 30, 2008 and 2007, respectively, include amounts paid to attorneys, accountants, and consultants, as well as the stock based compensation expense for those services.
| Year Ending September 30, | |||
| 2009 | $243,500 | ||
| September 30, 2008 | September 30, 2007 | |||||||
| Note payable, 20% per annum interest rate, principal and interest payment due December 31, 2007. This note is stated net of an unamortized discount of $2,400 at September 30, 2007. | $ | - | 708 | |||||
| Subordinated note payable, 7.5% per annum interest rate. Principal and interest payment due December 31, 2007 and the note is unsecured. Accrued interest of $415 is outstanding as of September 30, 2007. | - | 26,461 | ||||||
| Note payable, 15% per annum interest rate, principal and interest payment was due May 31, 2008; the note is unsecured. Accrued interest of $15,367 and $4,268 was outstanding as of September 30, 2008 and September 30, 2007, respectively. This note is stated net of unamortized discount of $0 and $13,422 as of September 30, 2008 and September 30, 2007, respectively. The holder made demand upon the Company for repayment of this note on August 18, 2008. See Note 10-Subsequent Evens for further discussion. | 94,104 | 145,873 | ||||||
| Subordinated note payable, 25% per annum, unsecured, principal and interest was due June 30, 2008; the Company extended the maturity for 30 days, to July 30, 2008 in exchange for warrants to purchase 15,000 shares of the Company’s common stock at $1.75 per share. Additionally, the Company granted the note holder warrants to purchase 12,500 shares of the Company’s common stock at $1.75 per share. Demand for repayment was made on September 8, 2008. See Note 10-Subsequent Events for further discussion. Accrued interest of $7,329 was outstanding as of September 30, 2008. This note is stated net of unamortized discount of $0 as of September 30, 2008. | $ | 50,000 | $ | — | ||||
| Subordinated note payable, 25% per annum, unsecured, principal and interest was due June 30, 2008; the Company extended the maturity for 30 days, to July 30, 2008 in exchange for warrants to purchase 15,000 shares of the Company’s common stock at $1.75 per share. Additionally, the Company granted the note holder warrants to purchase 125,000 shares of the Company’s common stock at $1.75 per share. Demand for repayment was made on September 5, 2008. See Note 10-Subsequent Events for further discussion. Accrued interest of $73,288 was outstanding as of September 30, 2008. This note is stated net of unamortized discount of $0 as of September 30, 2008. | $ | 500,000 | $ | - | ||||
| Subordinated note payable, 25% per annum, unsecured, principal and interest was due July 18, 2008. Additionally, the Company issued a warrant to purchase 100,000 shares of the Company’s common stock at a price equal to $.75 per share (the “Warrant”). The Warrant is exercisable immediately and carries a ten (10) year term. Demand for repayment was made on August 27, 2008. Accrued interest of $10,685 was outstanding as of September 30, 2008. This note is stated net of unamortized discount of $0 as of September 30, 2008. | 150,000 | $ | - | |||||
| Subordinated note payable, 25% per annum, unsecured, principal and interest was due August 10, 2008. Additionally, the Company issued a warrant to purchase 100,000 shares of the Company’s common stock at a price equal to $.50 per share (the “Warrant”). The Warrant is exercisable immediately and carries a ten (10) year term.. Demand for repayment was made on August 27, 2008. Accrued interest of $5,548 was outstanding as of September 30, 2008. This note is stated net of unamortized discount of $0 as of September 30, 2008. | 100,000 | $ | - | |||||
| $ | 894,104 | $ | 173,042 | |||||
| Year Ending September 30, | ||
| 2009 | $894,104 | |
| F-20 | |||
| Year Ending September 30, | ||||
| 2009 | $ | 42,589 | ||
| 2010 | 44,364 | |||
| 2011 | 6,312 | |||
| $ | 93,265 | |||
32,409,505 SHARES OF COMMON STOCK
American BriVision (Holding) Corporation was consummated on July 26, 2007.
The shareholders of Ecology acquired 95% of the voting stock of OCIS. OCIS had no significant operating history. The purpose of the acquisition was to provide Ecology with access to the public equity markets in order to more rapidly expand its business operations. The consideration to the shareholders of OCIS was approximately 5% of the stock, at closing, of the successor company. The final purchase price was agreed to as it reflects the value to Ecology of a more rapid access to the public equity markets than a more traditional initial public offering.
| Strike | Date | Expiration | ||||||
| Number | Price | Issued | Date | |||||
| 100,000 | $ | 0.75 | July 28, 2008 | July 28, 2018 | ||||
| 5,000 | $ | 0.75 | August 20, 2008 | August 20, 2018 | ||||
| 25,000 | $ | 0.75 | August 27, 2008 | August 27, 2018 | ||||
| 500,000 | $ | 0.75 | August 29, 2008 | August 29, 2018 | ||||
| 375,000 | $ | 0.75 | September 26, 2008 | September 26, 2018 | ||||
| Weighted | ||||||||||||||||
| Weighted | Average | |||||||||||||||
| Average | (Remaining) | |||||||||||||||
| Exercise Price | Number of | Contractual | Aggregate | |||||||||||||
| per Share | Options | Term | Fair Value | |||||||||||||
| Outstanding as of September 30, 2006 | $ | 2.00 | 150,000 | 8.7 | $ | 184 | ||||||||||
| Granted | $ | 2.04 | 3,036,119 | 9.5 | $ | 3,681,425 | ||||||||||
| Exercised | --- | --- | --- | --- | ||||||||||||
| Forfeited | --- | --- | --- | --- | ||||||||||||
| Exercisable | $ | 2.00 | 375,800 | 9.8 | $ | 552,540 | ||||||||||
| Outstanding as of September 30, 2007 | $ | 2.03 | 3,186,119 | 9.5 | $ | 3,681,609 | ||||||||||
| Granted | $ | 1.49 | 1,456,000 | 10.3 | $ | 1,329,891 | ||||||||||
| Exercised | — | — | — | — | ||||||||||||
| Forfeited | — | — | — | — | ||||||||||||
| Outstanding as of September 30, 2008 | $ | 1.83 | 4,642,119 | 9.2 | $ | 5,011,500 | ||||||||||
| Exercisable | $ | 2.09 | 1,605,228 | 8.4 | $ | 1,966,657 | ||||||||||
| 2008 | 2007 | |||||||
| Assets: | ||||||||
| Federal loss carry forwards | $ | 2,537,985 | $ | 1,481,936 | ||||
| Cash basis accounting differences | 451,603 | 89,925 | ||||||
| Depreciation timing differences | 939 | |||||||
| Liability: | ||||||||
| Depreciation timing differences | (804 | ) | - | |||||
| Net Deferred tax asset | 2,988,784 | 1,572,800 | ||||||
| Valuation allowance | (2,988,784 | ) | (1,572,800 | ) | ||||
| Net deferred tax asset | $ | - | $ | - | ||||
INFORMATION NOT REQUIRED IN PROSPECTUS
The following table sets forth estimated expenses other than transfer taxes and any brokerage discounts or commissions or similar expenses, payable by uswe expect to incur in connection with the sale of the common stockshares being registered under thisregistered. All such expenses are estimated except for the SEC and FINRA registration statement are as follows:
| SEC registration fee | $ | 6,528 | ||
| Printing expenses* | $ | 3,550 | ||
| Fee and expenses of counsel for the Company* | $ | 3,500 | ||
| Fee and expenses of accountants for Company** | $ | |||
| Miscellaneous* | $ | 500 | ||
| Total** | $ |
* Estimated.
** To be provided by amendment.
Our officers and directors are indemnified as provided by the Nevada Revised Statutes (“NRS”) and our bylaws.
Under the NRS, director immunity from liability to a company or its shareholders for monetary liabilities applies automatically unless it is specifically limited by a company’s articles of incorporation that is not the case with our articles of incorporation. Excepted from that immunity are:
(1) a willful failure to deal fairly with the company or its shareholders in connection with a matter in which the director has a material conflict of interest;
(2) a violation of criminal law (unless the director had reasonable cause to believe that his or her conduct was lawful or no reasonable cause to believe that his or her conduct was unlawful);
(3) a transaction from which the director derived an improper personal profit; and
(4) willful misconduct.
Our Articles of Incorporation and Bylaws contain broad indemnification and liability limiting provisions regardingpermits us to indemnify our officers and directors to the fullest extent authorized or permitted by law in connection with any proceeding arising by reason of the fact any person is or was our officer or director. Notwithstanding this indemnity, a director shall be liable to the extent provided by law for any liability incurred by him by his own fraud or willful default.
Our bylaws provide that we will indemnify our directors and employees, includingofficers to the limitationfullest extent not prohibited by Nevada law. Our bylaws provide that we will advance all expenses incurred to any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that he is or was our director or officer, or is or was serving at our request as a director or executive officer of another company, partnership, joint venture, trust or other enterprise, prior to the final disposition of the proceeding, promptly following request. This advance of expenses is to be made upon receipt of an undertaking by or on behalf of such person to repay said amounts should it be ultimately determined that the person was not entitled to be indemnified under our bylaws or otherwise.
| II-1 |
ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES
Recent Sales of Unregistered Equity Securities
As more fully described above, in connection with the Exchange Agreement, the Company issued a total of 52,936,583 shares of our common stock to BriVision’s shareholders. Reference is made to the disclosures set forth under Item 2.01 of this Form 8-K, which disclosures are incorporated herein by reference. The issuance of the common stock to the BriVision’s shareholders pursuant to the Exchange Agreement was exempt from registration in reliance upon Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”) and Regulation S of the Securities Act.
In September 2015, 30,000,000 shares of common stock was issued to Shulamit Lazar – the Company’s former CEO - for her initial $20,000 deposit to purchase the company; she also received another 30,000,000 shares in September 2015 pursuant to an employment agreement.
Innovation Consulting LLC paid $5,000 for 271 shares of preferred stock. The shares converted into 5,420,000 shares of common stocks on November 30, 2015. These shares were sold to Euro-Asia Investment & Finance Corp. Limited on December 18, 2015.
On May 6, 2016, we issued an aggregate number of 562,500 shares to BioLite pursuant to certain Milestone Payment Agreement. The issuance of the common stock to BioLite was exempt from registration in reliance upon Section 4(a)(2) of the Securities Act and Regulation S of the Securities Act.
On August 26, 2016, we issued an aggregate number of 1,468,750 newly issued restricted shares to BioLite pursuant to certain Stock Purchase Agreement. The issuance of the common stock to BioLite was exempt from registration in reliance upon Section 4(a)(2) of the Securities Act and Regulation S of the Securities Act.
Repurchases of Equity Securities
We have not repurchased any equity securities during the periods covered by this Report.
| II-2 |
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a). Exhibits
The following exhibits are filed as part of this registration statement:
| Exhibit No. | Description | |
| 2.1 | Share Exchange Agreement, dated February 8, 2016 (1) | |
| 3.1 | Articles of Incorporation of the Company (2) | |
| 3.2 | Bylaws of the Company (3) | |
| 3.3 | Certificate of Amendment to Articles of Incorporation filed on March 21, 2016 (4) | |
| 3.4 | Certificate of Amendment to Articles of Incorporation filed on December 21, 2016 + | |
| 5.1 | Opinion of Legal Opinion of Hunter Taubman Fischer & Li, LLC ** | |
| 10.1 | Collaboration Agreement dated December 29, 2015 (5) | |
| 10.2 | Collaborative Agreement and Milestone Payment Agreement dated May 6, 2016 (6) | |
| 21.1 | Subsidiaries of the Registrant + | |
| 23.1 | Consent of AWC CPA + | |
| 23.2 | Consent of Hunter Taubman Fischer & Li, LLC (included in Exhibit 5.1) | |
| 101.INS | *** | XBRL Instance Document |
| 101.SCH | *** | XBRL Taxonomy Extension Schema Document |
| 101.CAL | *** | XBRL Taxonomy Extension Calculation Linkbase Document |
| 101.DEF | *** | XBRL Taxonomy Extension Definition Linkbase Document |
| 101.LAB | *** | XBRL Taxonomy Extension Label Linkbase Document XBRL |
| 101.PRE | *** | Taxonomy Extension Presentation Linkbase Document |
| * | Previously filed |
| + | Filed herewith |
| ** | To be filed by amendment |
| *** | XBRL (Extensible Business Reporting Language) information is furnished and not filed herewith, is not a part of a registration statement or prospectus for purposes of sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections. |
| (1) | Incorporated by reference to Exhibit 10.1 the Company’s Current Report of Form 8-K, filed on February 16, 2016. |
| (2) | Incorporated by reference to Exhibit 3.01 to the Company’s Form SB-2 filed on June 28, 2002 |
| (3) | Incorporated by reference to Exhibit 3.02 to the Company’s Form SB-2, filed on June 28, 2002 |
| (4) | Incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K, filed on March 28, 2016. |
| (5) | Incorporated by reference to Exhibit 10.2 the Company’s Current Report of Form 8-K, filed on February 16, 2016. |
| (6) | Incorporated by reference to Exhibit 99.1 to the Company’s Current Report on Form 8-K, filed on May 10, 2016. |
The undersigned registrant hereby undertakes to:
(1) File, during any period in which offers or sales are being made, a post-effective amendment to this registration statement to:
(i) Include any prospectus required by Section 10(a)(3) of the Securities Act of 1933, as amended (the "Securities Act");
(ii) Reflect in the prospectus any facts or events which, individually or together, represent a fundamental change in the information in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of the securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of a prospectus filed with the Commission pursuant to Rule 424(b) under the Securities Act if, in the aggregate, the changes in volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective registration statement, and
| II-3 |
(iii) Include any additional or changed material information on the plan of distribution.
(2) For determining liability for certain violationsunder the Securities Act, treat each post-effective amendment as a new registration statement of fiduciary duties. In addition, we maintain Directorsthe securities offered, and Officers liability insurance. Our shareholders will have only limited recourse against directors and officers.
(3) File a post-effective amendment to remove from registration any of the securities that remain unsold at the end of the offering.
(4) Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of our company under Nevada law or otherwise, we have been advised the opinion of the SEC is that such indemnification is against public policy as expressed in the Securities Act and may, therefore, be unenforceable.
| Number of Warrants | Issue Date | Expiration Date | Acquisition Price per Share | Held By |
| 500,000 | December 18, 2006 | December 18, 2016 | $.90 | Trimax, LLC |
| 2,000,000 | November 11, 2008 | November 11, 2018 | $.50 | Trimax LLC |
| 12,500 | March 1, 2008 | March 1, 2018 | $1.75 | George Resta |
| 262,500 | February 5, 2008 | February 5, 2018 | $2.00 | Hayden Capital USA, LLC |
| 125,000 | March 1, 2008 | March 1, 2018 | $1.75 | Investment Hunter. LLC |
| 210,000 | June 9, 2008 | June 9, 2018 | $2.00 | Hayden Capital USA, LLC |
| 100,000 | June 21, 2008 | June 21, 2018 | $.75 | Mitchell Shaheen |
| 100,000 | July 14, 2008 | July 14, 2018 | $.50 | Mitchell Shaheen |
| 15,000 | July 14, 2008 | July 14, 2018 | $1.75 | George Resta |
| 15,000 | July 14, 2008 | July 14, 2018 | $1.75 | Investment Hunter, LLC |
| 14,400 | October 1, 2009 | October 1, 2019 | $.42 | Stromback Acquisition Corporation |
| Total: 3,354,400 |
(5) Each prospectus filed pursuant to Rule 424(b) as part of a registration statement relating to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A, shall be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such date of first use.
In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.
| II-4 |
SIGNATURES
Pursuant to 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 has duly caused this amendment No. 3 to registration statementForm S-1 Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, this 20th day of November, 2009 in the City of Auburn Hills, Michigan.
| American BriVision (Holding) Corporation | ||||
| By: | /s/ | Eugene Jiang | ||
| Eugene Jiang | ||||
| Chief Executive Officer, Chief Financial Officer and Chairman | ||||
Pursuant to the requirements of the Securities Act of 1933, as amended, this registration statementRegistration Statement has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.
Signature | Title | |||
Date | ||||
| /s/ | ||||
| | Chief Executive Officer and Chairman, Director, Secretary, Treasurer ((Principal Executive Officer) | |||
| /s/ Kira Huang | Kira Huang | September 13, 2016 | ||
| Chief Financial Officer, Principal Accounting Officer |
| II-5 |
INDEX TO EXHIBITS
The following exhibits are filed as part of this registration statement:
| Exhibit No. | Description | |
| 2.1 | Share Exchange Agreement, dated February 8, 2016 (1) | |
| 3.1 | Articles of Incorporation of the Company (2) | |
| 3.2 | Bylaws of the Company (3) | |
| 3.3 | Certificate of Amendment to Articles of Incorporation filed on March 21, 2016 (4) | |
| 3.4 | Certificate of Amendment to Articles of Incorporation filed on December 21, 2016 + | |
| 5.1 | Opinion of Legal Opinion of Hunter Taubman Fischer & Li, LLC ** | |
| 10.1 | Collaboration Agreement dated December 29, 2015 (5) | |
| 10.2 | Collaborative Agreement and Milestone Payment Agreement dated May 6, 2016 (6) | |
| 21.1 | Subsidiaries of the Registrant + | |
| 23.1 | Consent of AWC CPA + | |
| 23.2 | Consent of Hunter Taubman Fischer & Li, LLC (included in Exhibit 5.1) | |
| 101.INS*** | XBRL Instance Document | |
| 101.SCH*** | XBRL Taxonomy Extension Schema Document | |
| 101.CAL*** | XBRL Taxonomy Extension Calculation Linkbase Document | |
| 101.DEF*** | XBRL Taxonomy Extension Definition Linkbase Document | |
| 101.LAB*** | XBRL Taxonomy Extension Label Linkbase Document XBRL | |
| 101.PRE*** | Taxonomy Extension Presentation Linkbase Document |
| * | Previously filed |
| + | Filed herewith |
| ** | To be filed by amendment |
| *** | XBRL (Extensible Business Reporting Language) information is furnished and not filed herewith, is not a part of a registration statement or prospectus for purposes of sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections. |
| (1) | Incorporated by reference to Exhibit 10.1 the Company’s Current Report of Form 8-K, filed on February 16, 2016. |
| (2) | Incorporated by reference to Exhibit 3.01 to the Company’s Form SB-2 filed on June 28, 2002 |
| (3) | Incorporated by reference to Exhibit 3.02 to the Company’s Form SB-2, filed on June 28, 2002 |
| (4) | Incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K, filed on March 28, 2016. |
| (5) | Incorporated by reference to Exhibit 10.2 the Company’s Current Report of Form 8-K, filed on February 16, 2016. |
| (6) | Incorporated by reference to Exhibit 99.1 to the Company’s Current Report on Form 8-K, filed on May 10, 2016. |
| II-6 |