DENTALSERV.COM
20 West 55th Street, 5th Floor, New York, New York 10019
INFORMATION STATEMENT
NOTICE OF CHANGE IN CONTROL AND OF A MAJORITY OF DIRECTORS
PURSUANT TO SECTION 14(f) OF THE SECURITIES EXCHANGE ACT OF 1934
AND RULE 14f-1 THEREUNDER
Approximate Date of Mailing: November ___, 2007
Dear Shareholder:
This Notice is furnished by the Board of Directors (the "Board")
of Dentalserv.com (the "Company" or "DSRV") pursuant to Rule 14f-1 of
the Securities and Exchange Act of 1934 (the "Exchange Act") to inform
the Company's shareholders of a change in control of the Company and a
change in the majority of the Board to take effect under the terms of
an Agreement and Plan of Merger, dated September 5, 2007 (the "Merger
Agreement"), by and between the Company, and Medpro Safety Products,
Inc., a closely held Delaware corporation ("MedPro").
This Notice was prepared by the Company, except that information
about the new directors was furnished to the Company by the new
directors. The new directors assume no responsibility for the accuracy
or completeness of the information prepared by the Company.
Please read this Notice and the accompanying Information
Statement carefully. It contains certain biographical and other
information concerning the new directors of the Company. Additional
information about the Merger Agreement and the Company is contained in
the Information Statement, and the Company's Current Reports on Form
8-K/A filed with the United States Securities and Exchange Commission
(the "Commission") on September 10 and November___, 2007. The
Company's periodic reports and accompanying exhibits may be inspected
without charge at the Public Reference Section of the Commission at
Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549.
Copies of such materials may also be obtained from the SEC at
prescribed rates. The SEC also maintains a Web site that contains
reports, proxy and information statements and other information
regarding public companies that file reports with the SEC. Copies of
the Reports may be obtained from the SEC's EDGAR archives at
http://www.sec.gov/cgo-bin/srch-edgar.
- -------------------------------------
CHANGE IN CONTROL
On September 5, 2007 the Company entered into an Agreement and
Plan of Merger with Medpro Safety Products, Inc., a closely held
Delaware corporation. The Merger Agreement provides that MedPro will
merge with and into Dentalserv.com with Dentalserv.com as the
surviving corporation (the "Reverse Merger"). The Reverse Merger is
part of a corporate restructuring through which our controlling
shareholder, Vision Opportunity Master Fund, LLC, and other accredited
investors (the " Vision Investment Group") will invest $13 million in
cash in the combined corporation to acquire newly authorized
convertible preferred stock, in units with various common stock
purchase warrants. The terms of these securities and the private
placement are described in greater detail in the Company's Schedule
14C Information Statement under "The Vision Capital Investment"
accompanying this Information Statement and Notice of Change of
Control.
In the Reverse Merger, the 24,879,363 shares of MedPro common
stock to be outstanding immediately before it becomes effective will
be converted, following a one-for-four reverse split of our Common
Stock, into 11,284,696 shares of newly issued shares of DRSV Common
Stock.
Page 1
As a result of the Reverse Merger and the 1 for 4 reverse split
of our Common Stock, the former shareholders of MedPro will hold
approximately 85.0 % of the issued and outstanding Common Stock of the
combined corporation.
Upon the effectiveness of the Reverse Merger, the name of the
combined corporation will change to "Medpro Safety Products, Inc." (In
this Notice, we will sometimes refer to the combined corporation as
"New MedPro.") At that time, the current sole director of the Company
will be replaced by four persons designated by MedPro. In addition,
the current management of MedPro will become the management of New
MedPro, and will continue to conduct MedPro's current business.
This Notice and the accompanying Information Statements will be
mailed on or about November __ , 2007, to holders of record of the
Company's Common Stock as of the close of business on September 28,
2007. On that date, the Company had 5,584,000 pre-reverse split shares
of Common Stock outstanding, its only class of authorized capital
stock.
NO VOTE OR OTHER ACTION OF THE COMPANY'S SHAREHOLDERS
IS REQUIRED IN CONNECTION WITH THIS INFORMATION STATEMENT
WE ARE NOT ASKING YOU FOR A PROXY AND YOU
ARE REQUESTED NOT TO SEND US A PROXY
Page 2
CHANGES IN MANAGEMENT AND THE BOARD OF DIRECTORS
The Merger Agreement provides that on the effective date of the
Reverse Merger transaction, the Company's Director, President and
Chief Executive Officer, Dr. Lawrence Chimerine and Mr. Robert
Scherne, the Company's Chief Financial Officer and Secretary, will
resign as officers of the Company, and Dr. Chimerine, as the Company's
sole Director, will appoint W. Craig Turner as Chief Executive Officer
of the Company and Walter Weller as President and Chief Operating
Officer of the Company.
In addition, subject to and effective upon compliance with Rule
14f-1 under the Exchange Act, Dr. Chimerine will appoint W. Craig
Turner, Gary Peterson, Warren Rustand, and Walter Weller to the
Company's board of directors immediately before his own resignation as
a director becomes effective. Each will serve until the next annual
meeting of the Company's shareholders and his successor is elected and
qualified. A shareholder vote is not required and will not be taken
with respect to the election of the new directors in connection with
the Reverse Merger. The Reverse Merger will take effect no earlier
than 20 days after the Company files its Information Statement with
the SEC and mails the Information Statement and this Notice to its
shareholders.
DIRECTORS AND EXECUTIVE OFFICERS
The following table identifies the individuals who will become
the directors and executive officers of the Company.
Name Age Positions
- --------------------------------------------------------------------------------
W. Craig Turner 53 Chairman of the Board, Chief Executive Officer
Gary Peterson 56 Vice Chairman of the Board
Walter Weller 55 President, Chief Operating Officer
Warren Rustand 64 Director
The following brief biographies contain information about the
Company's officers, proposed officers, director and proposed
directors. The information includes each person's principal
occupations and business experience for at least the past five years.
This information has been furnished to the Company by the individuals
named. There are no family relationships known to the Company between
any of these persons. There are no legal proceedings known to the
Company that are material to the evaluation of the ability or
integrity of any of the proposed directors or executive officers.
W. Craig Turner is the founder of MedPro and has been Chairman of
its Board of Directors since its inception in 1993. Mr. Turner is
also the President and Chairman of the Board of Directors of CRM
Companies, Inc., a real estate development company specializing in the
development of commercial and industrial properties. At CRM
Properties, Mr. Turner has been directly responsible for the
development of more than $250 million in commercial and industrial
properties. Previously, Mr. Turner served as Director of Industrial
Development for the Commonwealth of Kentucky under then Governors John
Y. Brown and Martha Layne Collins.
Gary A. Peterson is President and Chief Executive Officer of
BATON Development Inc., a virtual incubator for new medical products
and services and Managing Member of BATON Ventures LLC and the Venture
Partner in Affinity Ventures II LLC, venture capital funds. Since
1991, Mr. Peterson has been the President of Peterson-Spencer-Fansler
Company, a capital sourcing and operational consulting company and a
General Partner of PSF Advisors, the General Partner of PSF Health
Care Fund L.P., a venture capital limited partnership. Mr. Peterson
was co-founder and senior executive of Angiomedics Incorporated, which
was acquired by Pfizer, Inc. in 1986 and renamed to Schneider USA.
Page 3
Schneider has since been sold to Boston Scientific. Prior to starting
Angiomedics, Mr. Peterson was involved with several medical device
companies including Cardiac Pacemakers, Inc. (now Guidant) and Renal
Systems, Inc. (now Minntech) in capacities ranging from management
positions in sales and marketing to operating positions in product
management to corporate long range product planning.
Walter W. Weller has been President of MedPro since 2003 and
VP/COO from the company's inception in 1993. He has been responsible
for MedPro's product strategy, building customer relationships with
key channel partners, and coordinating day to day activities for the
company. Before joining MedPro, Mr. Weller spent approximately nine
years working in manufacturing, seven years in financial and
operational management, and five years working with financial software
design and implementation services.
Warren Rustand, currently the Managing Partner of SC Capital, has
served as a director for more than 40 public, private and not-for-
profit organizations, including as Chairman of more than half of those
organizations. In the medical field, Mr. Rustand has served as
Chairman of Tucson Medical Center, Chairman of Health Partners of
Arizona, Chairman of TLC Vision (NASDAQ: TLCV), Chairman of Medical
Body Sculpting, and Chairman of Health Equity, Incorporated. Mr.
Rustand also served as Appointment Secretary and Cabinet Secretary to
former U.S. President Gerald Ford.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
AFTER THE REVERSE MERGER
The following table sets forth information known to us regarding
beneficial ownership of our Common Stock as of September 28, 2007 and
after giving effect to the completion of the Reverse Merger, by:
* each person known by us to be the beneficial owner of more than
5% of either class of our common stock;
* each of our current executive officers;
* each of our directors;
* each of the persons who will become executive officers or
directors upon the completion of the Reverse Merger; and
* our executive officers and directors as a group.
As of the date of this Notice, it was not known how many units
individual investors, including Vision, would purchase in the
Company's private placement of convertible preferred stock ("Series A
Stock") and common stock purchase warrants.. The table below does
not reflect the effect of any conversion of Series A Stock or
exercise of warrants by Vision or any other investor as a result of
the Company's private placement of units or after the Reverse Merger.
Shares Beneficially Owned (1)(2)
-----------------------------------------------
As Adjusted for
Current the Reverse Merger
--------------------- ----------------------
Name Number (3) Percent Number (3) Percent
- ------------------------ ---------- ------- ---------- --------
Vision Opportunity
Master Fund, LLC (4) 1,254,038 89.83% 1,254,038 9.45%
Lawrence Chimerine (4) 3,125 0.22%
Robert Scherne(4) 4,688 0.33%
W. Craig Turner (5) -0- -- 5,539,632 41.73%
Page 4
Contd...
Shares Beneficially Owned (1)(2)
-----------------------------------------------
As Adjusted for
Current the Reverse Merger
--------------------- ----------------------
Name Number (3) Percent Number (3) Percent
- ------------------------ ---------- ------- ---------- --------
Gary Peterson (6) -0- -- 1,606,103 12.10%
Baton Development (6) -0- -- 1,529,923 11.53%
MPLLI, LLC (7) -0- -- 1,361,597 10.26%
Walter Weller (5) -0- -- 177,657 1.45%
Warren Rustand (8) -0- -- 593,931 4.47%
Executive Officers
and Directors as a
Group (9) 7,813 0.56% 7,917,322 59.64%
(1) Unless otherwise indicated, each of the listed shareholders has
sole voting and investment power with respect to the shares. Under
SEC rules, each a person or group is considered to be the beneficial
owner of securities that the person may acquire within 60 days through
the exercise or conversion of convertible securities, options,
warrants and rights, if any. Those securities are included in the
total number of outstanding shares when computing the percentage
beneficially owned by the person or group. The securities are not
included in the total number of outstanding shares when computing the
percentage of shares beneficially owned by any other person or group.
(2) The certificate of designations for the Series A Convertible
Preferred Stock ("Series A Stock") and the on stock purchase warrants
to be issued in the private placement provide that the Series A Stock
may only be converted into, and the warrants may only be exercised
for, a number of shares of Common Stock that would cause the
converting or exercising holder to beneficially own a maximum of 9.9%
of the shares of Common Stock then outstanding.
(3) Share amounts adjusted for the 1-for-4 reverse stock split.
Current percentages are based upon 1,396,000 outstanding shares. Post-
Reverse Merger percentages are based upon 13,274,627 outstanding
shares.
(4) Business address is 20 West 55th Street, New York, New York 10019.
(5) Business address is 817 Winchester Road, Lexington, Kentucky
40505.
(6) Mr. Peterson is the CEO of Baton Development. Business address is
10040 East Happy Valley Road # 37, Scottsdale, Arizona 85260.
(7) Business address is 505 Executive Park, Louisville, Kentucky
40207.
(8) Business address is 4100 Newport Place, Suite 620, Newport Beach,
California 92260.
(9) The group is comprised of Dr. Chimerine and Mr. Scherne
until the effective time of the Reverse Merger, at which time the
members of the group will become Messrs. Turner, Peterson, Rustand and
Weller.
Page 5
MARKET FOR COMMON STOCK AFTER THE REVERSE MERGER
Upon completion of the private placement to the Vision Investment
Group and the effectiveness of the Reverse Merger, a total of
13,274,627 shares of New MedPro Common Stock will be issued and
outstanding. Of these shares, however, the only shares that will be
freely tradable without restriction under applicable federal and state
securities laws will be the 141,942 shares held before the Reverse
Merger by the shareholders of DSRV other than Vision and the other
affiliates of DSRV. References to DSRV shares in this section give
effect to the 1-for-4 reverse stock split.
MedPro shareholders and SC Capital will together receive
11,878,628 shares of New MedPro Common Stock when the Reverse Merger
becomes effective, all of which will be restricted securities.
Currently, a person (or persons whose shares are aggregated) who has
beneficially owned restricted securities for at least one year is
entitled to sell the securities under Rule 144, subject to volume of
sale and certain other restrictions. The restrictions expire if that
person is not an affiliate of New MedPro and has beneficially owned
the restricted securities for at least two years.
Vision will own 1,254,038 of the 1,396,000 DSRV common shares
outstanding before the Reverse Merger. Vision and any other persons
who were affiliates of DSRV before the Reverse Merger will be able to
sell the DSRV shares they held before the Reverse Merger commencing
three months after the effective date of the Reverse Merger, provided
such persons have held any shares purchased from DSRV or its
affiliates for at least one year and are not deemed to be affiliates
of New MedPro after the Reverse Merger. Any such sales must comply
with the volume of sale and certain other conditions of Rule 144.
Certain directors and executive officers of MedPro, who will own
a total of 7,322,392 shares of New MedPro Common Stock after the
Reverse Merger, have entered into lock-up agreements with the Vision
Investor Group. The agreements provide that the shareholder will not
sell any shares of New MedPro that they presently own or may acquire
until a date six months after the effective date of the registration
statement to be filed with the SEC for the resale of the New MedPro
Common Stock issuable upon conversion of the Series A Stock and the
exercise of Warrants.
Vision and the other purchasers in the private placement have
entered into a registration rights agreement with DSRV providing that
after the Reverse Merger, New MedPro will register for resale (a)
shares of New MedPro Common Stock owned by former MedPro shareholders
who have not entered into lock-up agreements and (b) the shares of New
MedPro common stock underlying the Series A Stock and warrants issued
to the Vision Investor Group. If the number of shares registered for
resale must be reduced as a condition of effectiveness by the SEC, the
number of shares to be registered by each former MedPro shareholder
and each member of the Vision Investor Group will be reduced on a pro
rata basis.
Although the shares of New MedPro Common Stock will be quoted on
the Over-the-Counter Bulletin Board (OTCBB.com) after the Reverse
Merger, only a small percentage of the outstanding shares will
initially be freely tradable shares. Accordingly, we do not expect
there to be an active trading market for New MedPro Common Stock
immediately after the Reverse Merger, and such a market can be
expected to develop only after a lengthy period, if at all. Trading
prices may be volatile due to the extremely limited number of freely
tradable shares. In addition, the Registration Rights Agreement will
obligate New MedPro to register for resale a large number of shares of
its Common Stock issuable upon the conversion of Series A Stock and
the exercise of stock purchase warrants. The placing of sale orders
for a large number of newly issued shares relative to the number of
freely tradeable shares would likely have the effect of depressing the
trading price of New MedPro Common Stock.
Upon effectiveness of the Reverse Merger, 13,274,627 shares of
New MedPro Common Stock will be outstanding. In addition, up to
approximately 31,955,000 shares of New MedPro Common Stock, would be
issuable if all of the Series A Stock were converted and the maximum
number of stock purchase warrants were issued in the Private Placement
were to be exercised in full for cash, a number of shares that
substantially exceeds the total amount currently outstanding. The
following table illustrates the hypothetical dilutive effect the
conversion of the Series A Stock and the exercise of warrants for cash
could have on the ownership interests of New MedPro shareholders.
Page 6
Number of Shares
Holders of Shares of New MedPro of New MedPro Warrant Exercise Warrant Aggregate Percent Interest
Common Stock Common Stock Price Per Share Exercise Price in New MedPro
- ------------------------------- ---------------- ---------------- ----------------- ----------------
Immediately after the Reverse
Merger
- -----------------------------
Former MedPro Shareholders 11,284,696 85.0%
Vision and former DSRV affiliates 1,254,038 9.4%
Other DSRV shareholders 141,962 1.1%
SC Capital 593,931 4.5%
------------- -------
TOTAL 13,274,627 100.0%
Assuming conversion of the Series
A Stock and the exercise of
warrants for the maximum number
of common shares (1)
- ---------------------------------
Former MedPro shareholders 11,284,696 24.6%
All DSRV shareholders 1,396,000 3.0%
SC Capital 593,931 1.3%
Series A Stock 6,668,230 14.6%
A Warrants 6,668,230 $1.81 $ 12,069,496 14.6%
B Warrants 6,668,230 $1.99 $ 13,269,778 14.6%
J Warrants (2) 5,975,116 $2.18 $ 13,025,753 13.0%
C Warrants (2) 5,975,116 $2.18 $ 13,025,753 13.0%
Other Warrants (3) 601,494 (2) $ 1,102,891 1.3%
------------- -------------- -------
TOTAL 45,831,043 $ 52,493,671 100.0%
============= ============== =======
- --------------------------
(1) Assumes no anti-dilution adjustments of conversion price of the
Series A stock and exercise price of warrants.
(2) The Series J and Series C Warrants will only be included in units
issued to an investor who purchases units for an aggregate
purchase price of $5 million or more.
(3) Warrants to purchase 533,458 shares at $1.81 per share and 68,036
shares at $1.99 per share.
If all of the Series A Stock were fully exercised and the maximum
number of warrants were issued in the private placement and converted
in full into New MedPro Common Stock, the ownership of former MedPro
shareholders in New MedPro immediately after the Reverse Merger would
be reduced from 85.0% to 24.6% and the ownership interests of the
current DSRV shareholders other than Vision would be reduced from 1.0%
to 0.3%.
In lieu of exercising their warrants for cash, the holders of
Series A, Series B and Series C Warrants may make a cashless exercise
of their warrants, and receive a number of shares of Common Stock
having an aggregate market value equal to the difference between the
market value of the shares of Common Stock for which the warrant is
being exercised on the date of exercise and the aggregate exercise
price of that number of shares. To the extent warrant holders elect
the cashless exercise option, New MedPro will issue fewer shares and
receive less cash consideration upon the exercise of the warrants, and
New MedPro stockholders will realize a smaller reduction in their
percentage interest in New MedPro.
Page 7
EXECUTIVE COMPENSATION
The following Executive Compensation chart highlights the
compensation for DSRV's executive officers for the fiscal years ended
December 31, 2005 and 2006:
SUMMARY COMPENSATION TABLE
Non-Equity Non-Qualified
Name and Incentive Deferred
Principal Stock Option Plan Compensation All Other
Position Year Salary Bonus Awards Awards Compensation Earnings Compensation Total
($) ($) ($) ($) ($) ($) ($) ($)
- --------------------------------------------------------------------------------------------------------------
Harry Miller
(CEO and
President) (1) 2006 -0- -0- -0- -0- N/A N/A N/A -0-
2005 -0- -0- -0- -0- N/A N/A N/A -0-
Lawrence Chimerine
(CEO and President)
(2) 2006 -0- -0- -0- -0- N/A N/A N/A -0-
Robert Scherne
Chief Financial
Officer and
Secretary (2) 2006 -0- -0- -0- -0- N/A N/A N/A -0-
(1) Mr. Miller resigned as an officer of DSRV on December 15,
2006.
(2) Messrs. Chimerine and Scherne assumed their respective officer
positions on December 15, 2006.
Employment Agreements
The Company compensates its current officers for their respective
services by agreement as follows:
Our CEO receives cash in the amount of $1,000 per month and
625 shares of restricted Common Stock per Quarter. Our CFO,
Secretary receives $150.00 per hour worked on Company business,
50% of which is payable in cash and 50% of which is payable in
shares of restricted Common Stock at the rate of $0.13 per share.
These agreements are terminable at will.
Employee Stock Compensation Plans
The Company has no other stock compensation arrangements or any
qualified or non-qualified employee stock compensation plans.
CORPORATE GOVERNANCE
Since December 2006, DRSV has not conducted any active business
operations and has no full-time employees. Instead, the Company has
pursued a strategy to seek to combine with an ongoing business with an
opportunity for growth. Since Vision Opportunity Master Fund acquired
89.83% of the Company's outstanding shares of Common Stock on December
15, 2006, the Company has had one director who was appointed by
Vision. Accordingly, the Board has held no meetings and has taken
actions solely by written consent. The Board has no standing
committees.
Page 8
Director Independence
Because the Company has not held an annual meeting of
shareholders for the purpose of electing directors, the Company has
not selected a definition of a national securities exchange by which
to determine the independence of its sole director, Dr. Lawrence
Chimerine.
Of the four persons designated by MedPro to become all of the
Company's directors immediately after the Reverse Merger, none are
expected to be independent under the definition of the NASDAQ Stock
Exchange. Messrs Turner and Weller will be officers and employees of
New MedPro. SC Capital, for which Mr. Rustand is a Managing Director,
is receiving a fee for providing financial advisory services to MedPro
in connection with the Reverse Merger and the private placement. Baton
Ventures, an entity controlled by Gary Peterson, has been a party to
transactions with MedPro described below under "Transactions with
Management and Others."
Audit Committee and Audit Committee Financial Expert
DSRV is not a "listed company" under SEC rules and is therefore
not required to have, and currently does not have, an audit committee
comprised of independent directors. Dr. Chimerine has not determined
whether he qualifies as an "audit committee financial expert" within
the meaning of the rules and regulations of the SEC. He is able to
read and understand fundamental financial statements and has
substantial business experience.
Code of Ethics
A code of ethics relates to written standards that are reasonably
designed to deter wrongdoing and to promote:
* Honest and ethical conduct, including the ethical handling of
actual or perceived conflicts of interest between personal and
professional relationships;
* Full, fair, accurate, timely and understandable disclosure in
reports and documents that are filed with, or submitted to, the
SEC and in other public communications made by an issuer;
* Compliance with applicable governmental laws, rules and
regulations;
* The prompt internal reporting of violations of the code to an
appropriate person or persons identified in the code; and
* Accountability for adherence to the code.
Due to the limited scope of DSRV's current operations, DSRV has
not adopted a corporate code of ethics that applies to its executive
officers.
Conflicts of Interest
DSRV has not established policies or procedures for the
resolution of current or potential conflicts of interest between DSRV,
its officers and directors, or affiliated entities. See "Transactions
with Management and Others," below.
Shareholder Communications
DRSV has no specific policy or procedural requirements for
stockholders to submit recommendations or nomination for directors.
The Board of Directors does not believe that a defined policy with
regard to the consideration of candidates recommended by stockholders
has been necessary to date, because DSRV has no current operations and
its controlling shareholder has the power, at its discretion, to
appoint one or more directors.
DSRV does not have any restrictions on shareholder nominations
under its Articles of Incorporation or by-laws. The only
restrictions are those applicable generally under Nevada law and the
federal proxy rules. There are no formal criteria for nominees.
For the reasons noted above, the Board of Directors has not
adopted procedures for communications from shareholders.
Page 9
Indemnification
Under Nevada law and pursuant to our Articles of Incorporation
and bylaws, DSRV may indemnify its officers and directors for various
expenses and damages resulting from their acting in these capacities.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933, as amended, may be permitted to DSRV's
officers or directors pursuant to the foregoing provisions, DSRV has
been informed that, in the opinion of the SEC, this indemnification is
against public policy as expressed in the Securities Act, and is
therefore unenforceable.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act and regulations thereunder
require the Company's executive officers and directors, and persons
who own more than ten (10%) percent of the Common Stock of the Company
to file reports of ownership and changes in ownership with the
Commission, and to furnish the Company with copies of all such Section
16(a) reports filed. Based solely on the Company's review of copies of
the Section 16(a) reports filed for the fiscal year ended December 31,
2006, the Company believes that all requisite reports have been filed.
TRANSACTIONS WITH MANAGEMENT AND OTHERS
This section describes transactions that have occurred since the
beginning of the last fiscal year or are proposed with respect to
which a director or executive officer of DSRV or MedPro, a beneficial
owner of more than 5% of any class of the securities of DSRV or
MedPro, or any member of the immediate families of the foregoing
persons had or will have a direct or indirect material interest.
Dentalserv.com and Vision
Since December 15, 2006, when it aquired a controlling interest
in the Company, Vision Opportunity Master Fund has funded the
Company's operating expenses and provided the Company with its
principal office space and miscellaneous administrative services, free
of cost. Vision, will also be the primary investor in the Company's
private placement of units comprised of Series A Stock and various
warrants to purchase Common Stock.
MedPro
Bridge Loan from Vision
In anticipation of the closing of the merger and the private
placement to the Vision Investment group, MedPro has borrowed
$1,000,000 from Vision, to be paid back in full upon the closing of
the merger or upon the termination of the merger (the "Bridge Loan").
The Bridge Loan bears interest at a rate of 8% per year and requires
that Medpro pay an origination fee of $50,000. The Bridge Loan is
secured by certain personal property, intangibles and receivables of
MedPro.
Office Lease
MedPro leases its office and storage facility in Lexington,
Kentucky, under a non-cancelable operating lease with a partnership in
which MedPro's Chairman and CEO holds an interest. The lease runs
through 2012 at a monthly rate of $6,500 with an option for two five
year extension options.
Vacumate Merger
On May 22, 2007, Vacumate LLC, a subsidiary in which MedPro owned
a 40% interest, merged into MedPro (the "Vacumate Merger"). Vacumate
held rights to develop certain medical products, such that MedPro's
ownership interest in Vacumate represented a substantial portion of
MedPro's total assets. The purpose of the Vacumate Merger was to
combine Vacumate and MedPro in a manner that gave the equity owners of
each company value in the combined company equivalent to the value
held in each of the predecessor companies. In the Vacumate Merger:
Page 10
* each of the 60 ownership units of Vacumate held by owners other
than MedPro converted automatically into 228,205.33 shares of the
common stock of the combined company; and
* each of the shares of MedPro common stock issued and outstanding
immediately before the effective time was reduced to 0.4 shares
of the common stock of the combined company.
In the Vacumate Merger, our proposed Director, W. Craig Turner,
and members of his family, who together owned 33 Vacumate units,
received approximately 7.5 million shares of the common stock of the
combined company.
As a result of the Vacumate Merger, each MedPro stock certificate
dated before May 22, 2007 now represents 40% of the number of shares
stated on the certificate.
Technology Development and Option Agreement
On February 19, 2007, MedPro entered into a Technology
Development and Option Agreement (the "Technology Agreement") with
SGPF, LLC. W. Craig Turner who is a director or executive officer of
MedPro, owns 100% of the equity units of SGPF. The Technology
Agreement provides that SGPF will acquire technology and related
products known as the "Blunt Technology" comprised of the Safety
Syringe System, with and without a Distal Protective Needle, in a
Fillable and Pre-filled Configuration. MedPro will manage and direct
the development of the Blunt Technology with the objective of fully
commercializing the Blunt Technology as quickly as possible. MedPro
must pay up to $375,000 towards the cost of developing the Blunt
Technology. MedPro will have the option to purchase the Blunt
Technology for $2,500,000 in cash, reimbursement for certain
development costs, and $2,500,000 in common stock of MedPro based on a
value of $1.81 per share. MedPro will also assume the remaining patent
payments that are due at the time that it executes its option.
SGPF's agreement with Visual Connections and its founder gives
SGPF the right to acquire rights to the Blunt Technology, including
rights to the related patent and patent applications. The agreement
provides for the transfer of the rights to the Blunt Technology upon
SGPF's making an initial transfer payment of $250,000. Thereafter,
SGPF would pay Visual Connections transfer payments totaling
$2,750,000 in installments over three years. Beginning in February
2007, SGPF would also pay a royalty of 5% of on the first $250,000 of
adjusted gross sales of products using the Blunt Technology in any
calendar year, and 4% of the adjusted gross sales of such products for
remainder of the year.
Key-Lok[TM]
During 2006, MedPro acquired a needless IV system, known as Key-
Lok[TM], a product owned by Baton Ventures, LLC, an entity managed by
Baton Development, Inc., an entity owned by MedPro's Vice
Chairman. In the transaction, MedPro issued 1,600,780 shares of
MedPro common stock to Baton Ventures and assumed outstanding legal
bills of approximately $10,000. Baton Ventures, LLC also elected to
convert a total of $452,000 in additional bridge loans to 731,530
shares of MedPro common stock.
Convertible Notes
Upon approval of the Merger Agreement, four holders of
convertible notes issued by MedPro ("Notes") will receive 476,013.5
shares of MedPro common stock at an assumed price per share of $0.6512
to retire the outstanding principal and interest on the Notes totaling
approximately $310,000. A fifth Note holder received $472,983.00 in
cash to retire his Note. To facilitate the cash payment to the Note
holder, MedPro issued 1,136,363.6 shares of its common stock to three
of its existing stockholders in consideration of cash proceeds
totaling $500,000.
Loans to MedPro
Certain officers, directors, shareholders, and their
affiliated entities have made loans to MedPro on varying terms,
including interest rates and conversion features. In May 2007,
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MedPro retired approximately $810,000 of outstanding principal and
accrued interested owed to these related parties in exchange for newly
issued shares, as described in the accompanying information
stated under Certain Relationships and Related Party Transactions" on
page 2. As of June 30, 2007, MedPro's indebtedness to these related
parties totaled $2,520,100. Included in this amount is a $2,000,000
promissory note that carries an interest rate of 6% and is payable to
CRM Companies, Inc., an entity that is owned by MedPro's Chairman.
After the Reverse Merger, New MedPro intends to use a portion of the
net proceeds from the private placement to pay off all of the
outstanding notes payable to and advances from shareholders.
DENTALSERV.COM
Lawrence Chimerine, President and
Chief Executive Officer
New York, New York
November __, 2007
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