As filed with the Securities and Exchange Commission on ______, 2010.
Commission File No. 333-______
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-1
Registration Statement Under
THE SECURITIES ACT OF 1933
ACTIVEIN, INC.
---------------------- ---------------
(Exact name of registrant as specified in charter)
Delaware 3841 None
- ---------------------------- ------------------------ --------------------
(State or other jurisdiction (Primary Standard Classi- (IRS Employer
of incorporation) fication Code Number) I.D. Number)
1 Leshem Street
Kiryat Gat
82000, Israel
972-8-6811761
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(Address and telephone number of principal executive offices)
1 Leshem Street
Kiryat Gat
82000, Israel
-------------------------------------
(Address of principal place of business or intended principal place of business)
Adi Plaschkes
1 Leshem Street
Kiryat Gat
82000, Israel
972-8-6811761
--------------------------- --------------
(Name, address and telephone number of agent for service)
Copies of all communications, including all communications sent
to the agent for service, should be sent to:
William T. Hart, Esq.
Hart & Trinen, LLP
1624 Washington Street
Denver, Colorado 80203
303-839-0061
As soon as practicable after the effective date of this Registration Statement
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
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 check the following box: [X]
If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, please check the following box and list
the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
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. [ ]
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. [ ]
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," "accelerated filer" and "smaller
reporting company" in Rule 12b2 of the Exchange Act.
Large accelerated filer [ ] Accelerated filer [ ]
Non-accelerated filer [ ] Smaller reporting company [X]
(Do not check if a smaller reporting company)
CALCULATION OF REGISTRATION FEE
Title of each Proposed Proposed
Class of Maximum Maximum
Securities Securities Offering Aggregate Amount of
to be to be Price Per Offering Registration
Registered Registered Share (1) Price Fee
- ---------- ---------- --------- ----------- ------------
Common Stock (2) 5,000,000 $0.20 $1,000,000 $71
Common Stock (3) 275,000 $0.20 $ 55,000 5
---
$76
===
- ----------------------------------------------------------------------------
(1) Offering price computed in accordance with Rule 457.
(2) Shares of common stock offered by the Company.
(3) Shares of common stock offered by selling shareholders
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 l933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
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PROSPECTUS
ACTIVEIN, INC.
Common Stock
5,000,000 shares to be offered by Company
275,000 shares to be offered by Selling Shareholders
By means of this prospectus ActiVein is offering for sale up to 5,000,000
shares of common stock at a price of $0.20 per share.
The shares ActiVein is offering will be sold directly by its executive
officers. ActiVein will not pay any commission or other form of remuneration in
connection with the sale of these shares.
This offering is being conducted on a "self-underwritten" basis. There is
no minimum number of shares required to be sold. Proceeds from the sale of
shares by ActiVein will be delivered directly to ActiVein and will not be
deposited in any escrow account. If all shares are sold, ActiVein will receive
gross proceeds of $1,000,000. ActiVein plans to end this offering on June 30,
2010. However, at ActiVein's discretion, this offering may end sooner or be
extended until August 31, 2010.
If and when ActiVein's common stock becomes quoted on the OTC Bulletin
Board or listed on a securities exchange, and after ActiVein terminates its
offering, a number of ActiVein's shareholders may also offer to sell, by means
of this prospectus, up to 275,000 shares of ActiVein's common stock at a price
of $0.20 per share. The shares owned by the selling shareholders may be sold at
prices and terms then prevailing or at prices related to the then-current market
price of ActiVein's common stock, or in negotiated transactions.
ActiVein will not receive any proceeds from the sale of the common stock
by the selling stockholders. ActiVein will pay for the expenses of this
offering, which are estimated to be $40,000, of which approximately $15,000 has
been paid as of the date of this prospectus.
As of the date of this prospectus there was no public market for
ActiVein's common stock. Although ActiVein plans to have its shares quoted on
the OTC Bulletin Board, ActiVein may not be successful in establishing any
public market for its common stock. As of the date of this prospectus, an
application had not been made to have ActiVein's common stock quoted on the OTC
Bulletin Board.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or passed upon the
accuracy or adequacy of this prospectus. Any representation to the contrary is a
criminal offense.
THESE SECURITIES ARE SPECULATIVE AND INVOLVE A HIGH DEGREE OF RISK. FOR A
DESCRIPTION OF CERTAIN IMPORTANT FACTORS THAT SHOULD BE CONSIDERED BY
PROSPECTIVE INVESTORS, SEE "RISK FACTORS" BEGINNING ON PAGE 2 OF THIS
PROSPECTUS.
The date of this prospectus is ________, 2010.
PROSPECTUS SUMMARY
ActiVein was incorporated in Delaware in January 2007 under the name UNLTD
Ventures Incorporated. Between January 2007 and March 2009 ActiVein did not
conduct any business.
In March 2009 ActiVein acquired ActiVein Ltd., an Israeli corporation, for
4,800,190 shares of its common stock, 3,770,935 shares of its Series A Preferred
stock, and a warrant which allows the holder to purchase an additional 428,768
Series A preferred shares.
ActiVein is developing a novel intravenous catheter which will reduce the
number of times a hospital patient is stuck with a needle to withdraw blood
samples. An intravenous (IV) catheter, used to deliver fluids to the patient, is
normally inserted into at least one vein of a patient during hospitalization.
For various reasons, blood samples cannot be withdrawn through the same
catheter. As a result, during a hospital stay a patient may be subjected to
numerous needle sticks which are required to obtain blood samples for laboratory
tests.
ActiVein's dual-action catheter is designed to replace the standard
conventional "hospital IV line" by enabling both fluid infusion and blood
withdrawal using a single vein over an entire hospitalization period.
On April 9, 2009 UNLTD changed its name to ActiVein, Inc.
Unless otherwise indicated, all references to our business and operations
include the business and operations of ActiVein Ltd.
As of February 15, 2010 ActiVein had 13,908,257 outstanding shares of
common stock, and 3,770,935 Series A Preferred shares. Each Series A Preferred
share is convertible into one share of ActiVein's common stock.
As of February 15, 2010 ActiVein Ltd. had not commenced sales and had not
generated any revenue.
ActiVein's offices are located at 1 Leshem Street, Kiryat Gat, 82000,
Israel. Activien's telephone number is 972-8-6811761 and its facsimile number is
972-8-6811763.
ActiVein's website is www.activein.co.il
Forward Looking Statements
This Prospectus contains various forward-looking statements that are based
on ActiVein's beliefs as assumptions made by and information currently available
to ActiVein. When used in this Prospectus, the words "believe", "expect",
"anticipate", "estimate" "intend", "project", "predict" and similar expressions
are intended to identify forward-looking statements. These statements may
involve projections, capital requirements, operating expenses, and the like, and
are subject to certain risks, uncertainties and assumptions which could cause
actual results to differ materially from projections or estimates. Factors which
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could cause actual results to differ materially are discussed at length under
the heading "Risk Factors". Should one or more of the enumerated risks or
uncertainties materialize, or should underlying assumptions prove incorrect,
actual results may vary materially from those anticipated, estimated or
projected. Investors should not place undue reliance on forward-looking
statements, all of which speak only as of the date made.
The Offering
By means of this prospectus:
o ActiVein is offering to sell up to 5,000,000 shares of its common
stock at a price of $0.20 per share, and
o A number of ActiVein's shareholders are offering to sell up to 275,000
shares of its common stock at a price of $0.20 per share. If and when
ActiVein's common stock becomes quoted on the OTC Bulletin Board or
listed on a securities exchange, the shares owned by the selling
shareholders may be sold in the over-the-counter market, or otherwise,
at prices and terms then prevailing or at prices related to the
then-current market price, or in negotiated transactions.
The purchase of the securities offered by this prospectus involves a high
degree of risk. Risk factors include the lack of any relevant operating history,
losses since ActiVein was incorporated, and the possible need for ActiVein to
sell shares of its common stock to raise additional capital. See "Risk Factors"
below for additional Risk Factors.
RISK FACTORS
The securities being offered involve a high degree of risk. Prospective
investors should consider the following risk factors which affect ActiVein's
business and this offering. These risk factors discuss all material risks which
pertain to an investment in ActiVein's common stock. If any of the risks
discussed below materialize, ActiVein's business may suffer and ActiVein's
common stock could decline in value or become worthless.
Risk Factors Related to ActiVein's Business
ACTIVEIN HAS A HISTORY OF LOSSES AND MAY NEVER BE PROFITABLE. ActiVein has never
earned a profit. ActiVein expects to incur losses during the foreseeable future
and may never be profitable.
THE FAILURE OF ACTIVEIN TO OBTAIN CAPITAL MAY SIGNIFICANTLY RESTRICT ACTIVEIN'S
PROPOSED OPERATIONS. ActiVein needs additional capital to fund its operating
losses and to develop its intravenous catheter. ActiVein's issuance of equity or
equity-related securities to raise capital will dilute the ownership interest of
existing shareholders.
ActiVein does not know what the terms of any future capital raising may be
but any future sale of ActiVein's equity securities would dilute the ownership
of existing stockholders and could be at prices substantially below the price of
the shares of common stock sold in this offering. The failure of ActiVein to
2
obtain the capital which it requires will result in the slower implementation of
ActiVein's business plan or its inability of ActiVein to implement its business
plan. There can be no assurance that ActiVein will be able to obtain any capital
which it will need.
To enable ActiVein to continue in business ActiVein will eventually need
to earn a profit or obtain additional financing until ActiVein is able to earn a
profit. As a result of ActiVein's short operating history it is difficult for
potential investors to evaluate its business. There can be no assurance that
ActiVein can implement its business plan, that it will be profitable, or that
the shares which may be sold in this offering will have any value.
ActiVein will not receive any proceeds from the sale of the shares offered
by the selling shareholders.
ACTIVEIN'S OPERATIONS ARE DEPENDENT UPON THE CONTINUED SERVICES OF ITS OFFICERS.
THE LOSS OF ITS ONLY OFFICERS, WHETHER AS A RESULT OF DEATH, DISABILITY OR
OTHERWISE, MAY HAVE A MATERIAL ADVERSE EFFECT UPON THE BUSINESS OF ACTIVEIN.
SINCE ACTIVEIN'S OFFICERS PLAN TO DEVOTE ONLY A PORTION OF THEIR TIME TO
ACTIVEIN'S BUSINESS, ITS CHANCES OF BEING PROFITABLE WILL BE LESS THAN IF IT HAD
FULL TIME MANAGEMENT. As of the date of this prospectus ActiVein had only two
officers. With the exception of Adi Plaschkes, ActiVein's Chief Executive
Officer, the other officer of ActiVein, Boaz Dor, is employed at another company
and that officer's other responsibilities could take precedence over the
officer's duties to ActiVein.
ACTIVEIN'S AUDITORS HAVE DOUBT AS TO ITS ABILITY TO CONTINUE IN BUSINESS. In
their report on ActiVein's February 28, 2009 financial statements, Actvein's
auditors expressed substantial doubt as to ActiVein's ability to continue as a
going concern. A going concern qualification could impair ActiVein's ability to
finance operations through the sale of debt or equity securities. ActiVein's
ability to continue as a going concern will depend, in large part, on ActiVein's
ability to obtain additional financing and generate positive cash flow from
operations, neither of which is certain. If ActiVein is unable to achieve these
goals, ActiVein's business would be jeopardized and it may not be able to
continue operations.
TO DATE, ACTIVEIN HAS NOT GENERATED ANY REVENUE. ACTIVEIN'S FUTURE SUCCESS
DEPENDS ON ACTIVEIN'S ABILITY TO BEGIN GENERATING REVENUES ON A REGULAR AND
CONTINUING BASIS. Since inception, ActiVein has not generated any revenue.
ActiVein's future success depends on its ability to begin generating revenues on
a regular and continuing basis and to properly manage costs. ActiVein's ability
to generate revenues depends on a number of factors, some of which are outside
ActiVein's control. These factors include the following:
o ActiVein's ability to obtain necessary government and regulatory
approvals;
o ActiVein's ability to successfully complete all the research and
development work on its intravenous catheter;
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o ActiVein's ability to successfully commercialize itsits intravenous
catheter technology; and
o ActiVein's ability to protect its intellectual property.
ActiVein cannot make any assurances that it will be able to meet any of
these challenges, or that ActiVein will be able to generate any revenue. If
ActiVein does not generate any revenue, investors may lose their entire
investment.
ANY FAILURE TO OBTAIN OR ANY DELAY IN OBTAINING REQUIRED REGULATORY APPROVALS
MAY ADVERSELY AFFECT ACTIVEIN'S ABILITY TO SUCCESSFULLY LICENSE OR MARKET ITS
PRODUCTS. The intravenous catheter technology that ActiVein is developing is
subject to oversight by regulatory authorities in the United States and in other
countries, including, without limitation, the FDA. ActiVein believes that its
intravenous catheter will be classified as a Type II Medical Device by the FDA.
If classified as a Type II Medical Device, this product will not come under the
more rigorous approval guidelines applicable to Type III Medical Devices (e.g.,
HIV test kits) or the arduous Phase I, II, and III clinical trial process that
is required for approval of drugs. Type II Medical Device approval falls under
the category referred to as a 510k application and after submission of
supporting data to the FDA is subject to a 90-day review process. ActiVein has
not initiated the process to obtain marketing clearance for its product in the
United States.
Among other requirements, FDA marketing clearance and approval of the
facilities used to manufacture ActiVein's product will be required before
ActiVein's intravenous catheters may be marketed in the United States.
A similar regulatory process will be required by European regulatory
authorities before ActiVein's products can be marketed in Europe. As with the
FDA review process, there are numerous risks associated with the review of
medical devices by foreign regulatory agencies. The foreign regulatory agencies
may request additional data to demonstrate the clinical safety and efficacy of a
product.
Although FDA marketing clearance may not be required for certain foreign
markets, ActiVein believes that FDA clearance for ActiVein's intravenous
catheter would add credibility when negotiating with overseas distributors.
Failure to obtain FDA marketing clearance in the United States may limit
ActiVein's ability to successfully market its product even where regulatory
approvals are not required.
Delays or rejection in obtaining FDA marketing clearance may also be
encountered based upon changes in applicable law or regulatory policy during the
period of regulatory review. Any failure to obtain, or any delay in obtaining,
marketing clearance would adversely affect ActiVein's ability to license or
market its intravenous catheter. Moreover, even if FDA marketing clearance is
granted, such approval may include significant limitations on indicated uses for
which the product could be marketed.
4
Both before and after marketing clearance is obtained, a product and its
manufacturer are subject to comprehensive regulatory oversight. Violations of
regulatory requirements at any stage of the process may result in adverse
consequences, including the FDA's delay in approving or refusing to approve a
product for marketing, withdrawal of an approved product from the market and/or
the imposition of criminal penalties against the manufacturer. In addition,
later discovery of previously unknown problems relating to a marketed product
may result in restrictions on such product or manufacturer including withdrawal
of the product from the market.
ActiVein cannot assure any investors that it will receive the required
clearances in order to be able to market its intravenous catheter.
IF ACTIVEIN'S PRODUCTS DO NOT ACHIEVE MARKET ACCEPTANCE, ACTIVEIN WILL BE UNABLE
TO GENERATE SIGNIFICANT REVENUES. The commercial success of ActiVein's
intravenous catheter will depend primarily on convincing health care providers
to adopt and use ActiVein's product. To accomplish this, ActiVein, together with
any other marketing or distribution collaborators, will need to convince members
of the medical community of the benefits of ActiVein's product through, for
example, published papers, presentations at scientific conferences and
additional clinical data. Medical providers will not use ActiVein's product
unless it can demonstrate that ActiVein's product consistently produces results
comparable or superior to existing products, and has acceptable safety profiles
and costs. If ActiVein is not successful in these efforts, market acceptance of
its product could be limited. Even if ActiVein demonstrates the effectiveness of
its product, medical practitioners may still use other products. If ActiVein's
product does not achieve broad market acceptance, ActiVein will be unable to
generate significant revenues, which would have a material adverse effect on its
business, cash flows and results of operations.
ACTIVEIN MAY NOT ACHIEVE OR MAINTAIN A COMPETITIVE POSITION IN ITS INDUSTRY AND
FUTURE TECHNOLOGICAL DEVELOPMENTS MAY RESULT IN ACTIVEIN'S PROPRIETARY
TECHNOLOGIES BECOMING UNECONOMICAL OR OBSOLETE. The field that ActiVein is
involved in is undergoing rapid and significant technological change. Activien's
ability to successfully commercialize various applications of its intravenous
catheter technology will depend on ActiVein's ability to maintain its
technological advantage. ActiVein cannot assure investors that ActiVein will
achieve or maintain such a competitive position or that other technological
developments will not cause its proprietary technologies to become uneconomical
or obsolete. Many of ActiVein's potential competitors, including large
multi-national pharmaceutical companies, well-capitalized biotechnology
companies, and privately and publicly financed research facilities, have
significantly greater financial resources than ActiVein. ActiVein's revenues and
profits will be adversely impacted if it cannot compete successfully with new or
existing products or technologies.
ACTIVEIN'S PATENTS MIGHT NOT PROTECT ITS TECHNOLOGY FROM COMPETITORS. Certain
aspects of ActiVein's technologies areare protected by foreign patents. Although
ActiVein has filed a patent application in the United States, there is no
assurance that any patentpatent applications will result in the issuance of new
patents. Furthermore, there is no assurance as to the breadth and degree of
protection any issued patents might afford ActiVein. ActiVein may not be able to
prevent misappropriation of its proprietary rights, particularly in countries
where the laws may not protect such rights as fully as in the United States.
Thus, any patents that ActiVein owns may not provide commercially meaningful
protection from competition. Disputes may arise between ActiVein and others as
5
to the scope, validity and ownership rights of patents. Any defense of patents
could prove costly and time consuming and ActiVein cannot assure investors that
it will be in a position, or will deem it advisable, to carry on such a defense.
ActiVein's patents may not contain claims that are sufficiently broad to prevent
others from practicing its technologies or developing competing products.
Competitors may be able to use technologies in competing products that perform
substantially the same as ActiVein's technologies but avoid infringing on
ActiVein's patent claims. Under these circumstances, ActiVein's patents would be
of little commercial value.
ACTIVEIN RELIES ON MAINTAINING COMPETITIVELY SENSITIVE KNOW-HOW AND OTHER
INFORMATION AS TRADE SECRETS, WHICH MAY NOT SUFFICIENTLY PROTECT THIS
INFORMATION. DISCLOSURE OF THIS INFORMATION COULD IMPAIR ACTIVEIN'S COMPETITIVE
POSITION. As to many technical aspects of ActiVein's business, ActiVein has
concluded that competitively sensitive information is either not patentable or
that, for competitive reasons, it is not commercially advantageous to seek
patent protection. In these circumstances, ActiVein seeks to protect this
proprietary information by maintaining it in confidence as a trade secret.
However, the disclosure of ActiVein's trade secrets would impair its competitive
position, and adequate remedies may not exist in the event of unauthorized use
or disclosure of ActiVein's confidential information. Further, to the extent
that ActiVein's employees, consultants or contractors use trade secret
technology or know-how owned by others in their work for ActiVein, disputes may
arise as to the ownership of related inventions.
ACTIVEIN MAY INCUR SIGNIFICANT LIABILITY IF IT INFRINGES THE PATENTS AND OTHER
PROPRIETARY RIGHTS OF THIRD PARTIES. In the event that ActiVein's technologies
infringe or violate the patent or other proprietary rights of third parties, it
may be prevented from pursuing product development, manufacturing or
commercialization of any product that uses these technologies. There may be
patents held by others of which ActiVein is unaware that contain claims that
ActiVein's product or operations infringe. In addition, given the complexities
and uncertainties of patent laws, there may be patents of which ActiVein knows
that it may ultimately be held to infringe, particularly if the claims of the
patent are determined to be broader than ActiVein believes them to be.
If a third party claims that ActiVein infringes its patents, any of the
following may occur:
o ActiVein may become liable for substantial damages for past
infringement if a court decides that its technologies infringe upon a
competitor's patent;
o a court may prohibit ActiVein from selling or licensing its product
without a license from the patent holder, which may not be available on
commercially acceptable terms or at all, or which may require ActiVein
to pay substantial royalties or grant cross-licenses to its patents;
and
o ActiVein may have to redesign its product so that it does not infringe
upon the patent rights of others, which may not be possible or could
require substantial funds or time.
In addition, employees, consultants, contractors and others may use the
trade secret information of others in their work for ActiVein or disclose its
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trade secret information to others. Either of these events could lead to
disputes over the ownership of inventions derived from that information or
expose ActiVein to potential damages or other penalties.
IF PRODUCT LIABILITY LAWSUITS ARE BROUGHT AGAINST ACTIVEIN, ACTIVEIN MIGHT INCUR
SUBSTANTIAL LIABILITIES AND COULD BE REQUIRED TO LIMIT THE COMMERCIALIZATION OF
ITS PRODUCT. If ActiVein's product does not function properly, it may be exposed
to the risk of product liability claims. ActiVein may even be subject to claims
against it despite the fact that the injury is due to the actions of others,
such as manufacturers or medical personnel. Any product liability litigation
would consume substantial amounts of ActiVein's financial and managerial
resources and might result in adverse publicity, regardless of the ultimate
outcome of the litigation. ActiVein does not currently maintain clinical trial
insurance or product liability insurance and it may never obtain such insurance.
In any event, liability insurance is subject to deductibles and coverage
limitations and may not provide adequate coverage against potential claims or
losses. A successful product liability claim brought against ActiVein could
cause it to incur substantial costs and liabilities.
Risk Factors Related to this Offering
AS OF THE DATE OF THIS PROSPECTUS THERE WAS NO PUBLIC MARKET FOR ACTIVEIN'S
COMMON STOCK AND IF NO PUBLIC MARKET DEVELOPS, PURCHASERS OF THE SHARES OFFERED
BY THIS PROSPECTUS MAY BE UNABLE TO SELL THEIR SHARES. If purchasers are unable
to sell their shares, purchasers may never be able to recover any amounts which
they paid for ActiVein's shares.
BECAUSE THERE IS NO PUBLIC MARKET FOR ACTIVEIN'S COMMON STOCK, THE PRICE FOR ITS
SHARES WAS ARBITRARILY ESTABLISHED, DOES NOT BEAR ANY RELATIONSHIP TO ACTIVEIN'S
ASSETS, BOOK VALUE OR NET WORTH, AND MAY BE GREATER THAN THE PRICE WHICH
INVESTORS IN THIS OFFERING MAY RECEIVE WHEN THEY RESELL THEIR SHARES.
Accordingly, the offering price of ActiVein's common stock should not be
considered to be any indication of the value of its shares. The factors
considered in determining the offering price included ActiVein's future
prospects and the likely trading price for its common stock if a public market
ever develops.
SHOULD A MARKET FOR ACTIVEIN'S COMMON STOCK EVER DEVELOP, DISCLOSURE
REQUIREMENTS PERTAINING TO PENNY STOCKS MAY REDUCE THE LEVEL OF TRADING ACTIVITY
IN THE MARKET FOR ACTIVEIN'S COMMON STOCK AND INVESTORS MAY FIND IT DIFFICULT TO
SELL THEIR SHARES. If a market ever develops for the common stock of ActiVein,
trades of ActiVein's common stock will be subject to Rule 15g-9 of the
Securities and Exchange Commission, which rule imposes certain requirements on
broker/dealers who sell securities subject to the rule to persons other than
established customers and accredited investors. For transactions covered by the
rule, brokers/dealers must make a special suitability determination for
purchasers of the securities and receive the purchaser's written agreement to
the transaction prior to sale. The Securities and Exchange Commission also has
rules that regulate broker/dealer practices in connection with transactions in
"penny stocks". Penny stocks generally are equity securities with a price of
less than $5.00 (other than securities registered on certain national securities
exchanges or quoted on the NASDAQ system, provided that current price and volume
information with respect to transactions in that security is provided by the
exchange or system). The penny stock rules require a broker/ dealer, prior to a
transaction in a penny stock not otherwise exempt from the rules, to deliver a
standardized risk disclosure document prepared by the Commission that provides
7
information about penny stocks and the nature and level of risks in the penny
stock market. The broker/dealer also must provide the customer with current bid
and offer quotations for the penny stock, the compensation of the broker/dealer
and its salesperson in the transaction, and monthly account statements showing
the market value of each penny stock held in the customer's account. The bid and
offer quotations, and the broker/dealer and salesperson compensation
information, must be given to the customer orally or in writing prior to
effecting the transaction and must be given to the customer in writing before or
with the customer's confirmation.
DILUTION AND COMPARATIVE SHARE DATA
As of February 15, 2010 ActiVein had 13,908,257 outstanding shares of
common stock, which had a negligible net tangible book as of that date.
The following table illustrates per share dilution and the comparative
stock ownership of ActiVein's stockholders as compared to the investors in this
offering, assuming all shares offered by this prospectus are sold.
Shares outstanding as of February 15, 2010 13,908,257
Shares offered by ActiVein 5,000,000
Shares offered by selling shareholders 275,000
Net tangible book value per share at as of February 15, 2010 --
Offering price, per share $0.20
Dilution to purchasers of shares offered by this prospectus $0.20
Equity ownership by purchasers of shares offered by this
prospectus 37%
Equity ownership by present shareholders after offering,
assuming all shares offered by ActiVein and the selling
shareholders are sold 63%
See the section of the prospectus captioned "Management - Transactions
with Related Parties and Recent Sales of Unregistered Securities" for
information concerning the amount paid by the present shareholders of ActiVein
for their shares of ActiVein's common stock:
Others Shares Which May Be Issued
The number of ActiVein's outstanding shares excludes the following:
8
Number Note
of Shares Reference
Shares issuable upon conversion of Series A
Preferred shares 3,770,935 A
Shares issuable upon exercise of warrant
allowing for the purchase of additional
Series A preferred shares 428,768 B
A. In connection with the acquisition of ActiVein Ltd., 3,770,935 Series A
Preferred shares were issued to Xenia Venture Capital Ltd. in exchange for
the preferred shares held by Xenia in ActiVein Ltd. Each Series A preferred
share is convertible, at the option of the holder, into one share of
ActiVein's common stock.
B. In exchange for a warrant to purchase additional preferred shares of
ActiVein Ltd., a warrant to purchase 428,768 Series A shares of ActiVein was
issued to Xenia Venture Capital. The warrant entitles Xenia Venture Capital
to purchase 428,768 shares of ActiVein's Series A preferred stock for
$0.0001 per share. Each Series A Preferred share is convertible, at the
option of the holder, into one share of ActiVein's common stock.
USE OF PROCEEDS
The following table shows the intended use of the proceeds of this offering,
depending upon the number of shares sold:
Gross Offering Proceeds
--------------------------------------------
$250,000 $500,000 $750,000 $1,000,000
-------- -------- -------- ----------
Research and development 180,000 350,000 530,000 750,000
General and administrative
expenses 30,000 60,000 90,000 120,000
Officers' salaries 30,000 60,000 90,000 90,000
Offering expenses 10,000 30,000 40,000 40,000
See the "Business" section of this prospectus for a description of
ActiVein's plan of operation.
ActiVein's research and development expenditures may increase or decrease
depending on the results of its preclinical studies and clinical trials.
If less than $250,000 is raised in this offering the offering proceeds
will be used primarily for pre-clinical trial preparation and final product
improvements.
The projected expenditures shown above are only estimates or
approximations and do not represent a firm commitment by ActiVein.
9
To the extent that the proposed expenditures are insufficient for the
purposes indicated, supplemental amounts required may be drawn from other
categories of estimated expenditures, if available. Conversely, any amounts not
expended as proposed will be used for general working capital.
There is no commitment by any person to purchase any of the shares of
common stock which ActiVein is offering and there can be no assurance that any
shares will be sold.
Even if all shares ActiVein is offering are sold, its future operations
will be dependent upon its ability to obtain additional capital until, if ever,
ActiVein can become profitable. As of the date of this prospectus ActiVein did
not have any commitments from any person to provide it with any additional
capital and there can be no assurance that additional funds may be obtained in
the future.
MARKET FOR ACTIVEIN'S COMMON STOCK.
ActiVein's common stock is not quoted on any exchange and there is no
public trading market for ActiVein's common stock.
As of February 15, 2010, ActiVein had 13,908,257 outstanding shares of
common stock and 64 shareholders. ActiVein does not have any outstanding
options, warrants or other arrangements providing for the issuance of additional
shares of its capital stock.
All of the outstanding shares of ActiVein are restricted securities and
may be sold in accordance with Rule 144 of the Securities and Exchange
Commission beginning on the date of this prospectus.
Holders of common stock are entitled to receive dividends as may be
declared by the Board of Directors. ActiVein's Board of Directors is not
restricted from paying any dividends but is not obligated to declare a dividend.
No dividends have ever been declared and it is not anticipated that dividends
will ever be paid.
ActiVein's Articles of Incorporation authorize its Board of Directors to
issue up to 10,000,000 shares of preferred stock. The provisions in the Articles
of Incorporation relating to the preferred stock allow ActiVein's directors to
issue preferred stock with multiple votes per share and dividend rights which
would have priority over any dividends paid with respect to the holders of
ActiVein's common stock. The issuance of preferred stock with these rights may
make the removal of management difficult even if the removal would be considered
beneficial to shareholders generally, and will have the effect of limiting
shareholder participation in certain transactions such as mergers or tender
offers if these transactions are not favored by ActiVein's management.
10
MANAGEMENT'S DISCUSSION AND ANALYSIS
AND PLAN OF OPERATION
The following discussion of financial condition and results of operations
should be read in conjunction with the consolidated financial statements and the
notes to the consolidated financial statements, which are included elsewhere in
this prospectus.
ActiVein was incorporated in Delaware in January 2007. Between January
2007 and March 2009 ActiVein did not conduct any business.
In November 2007 ActiVein sold 2,858,067 shares of its common stock at a
price of $0.15 per share to a group of private investors.
In March 2009 ActiVein acquired ActiVein Ltd., an Israeli corporation, for
4,800,190 shares of its common stock, 3,770,935 shares of its Series A Preferred
stock, and a warrant which allows the holder to purchase an additional 428,768
Series A preferred shares.
ActiVein is developing a novel intravenous catheter which will reduce the
number of times a hospital patient is stuck with a needle to withdraw blood
samples. ActiVein's dual-action catheter is designed to replace the conventional
peripheral IV Catheter by enabling both fluid infusion and blood withdrawal
using a single vein over an entire hospitalization period.
As of February 15, 2010 ActiVein had not commenced sales and had not
generated any revenue.
Liquidity and Capital Resources
ActiVein's material sources and (uses) of cash during the period from its
inception (November 2005) through November 30, 2009 were:
Cash used by operating activities $(872,435)
Purchase of equipment (9,594)
Sale of common stock 395,700
Sale of preferred stock 503,031
Change in foreign currency exchange rates 33,101
ActiVein anticipates that its capital requirements for the twelve months
following the -receiving of the funds will be approximately $1,700,000. See
"Business - Plan of Operation" for more information concerning ActiVein's
anticipated capital requirements.
Other than the matters discussed in the "Risk Factors" section of this
prospectus, ActiVein does not know of any trends, events or uncertainties that
have had or are reasonably expected to have a material impact on ActiVein's
operations.
ActiVein's future plans will be dependent upon the amount of capital
ActiVein is able to raise. ActiVein may attempt to raise additional capital
through the private sale of its equity securities or borrowings from third party
lenders. ActiVein does not have any commitments or arrangements from any person
11
to provide ActiVein with any additional capital. If additional financing is not
available when needed, ActiVein may continue to operate in its present mode or
ActiVein may need to cease operations.
BUSINESS
ActiVein is developing a dual-action peripheral intravenous, or "IV",
catheter that enables both fluid infusion and blood withdrawal from the same
vein.
IV therapy is the mainstay of modern medicine since certain treatments
require medications or fluids to be given through a vein. For the treatments,
small plastic tubes called catheters are placed into a vein. According to
official publications in the United States the IV catheter is placed in more
than 25 million patients per year to allow access for medication, fluids and
nutrition.
However, patients on IV therapy usually require blood sampling for
laboratory analysis at least once a day. As a result, blood samples are obtained
by venipuncture - the medial term of sticking a needle in the vein.
For patients, venipuncture is a painful and traumatic experience. For
healthcare workers it is a time consuming task, which can take between 2 to 5
minutes per patient. It can also be difficult to locate veins.
Venipuncture is also hazardous, as it places workers at risk for
accidental needlestick injury. Approximately six billion needles are used in the
U.S. healthcare industry each year, and health care workers suffer an estimated
800,000 needlestick injuries annually.
Each year 1,000 U.S. healthcare workers contract serious, potentially
life-threatening, infections from accidental needlestick injuries. The
blood-borne diseases that may be transmitted from an accidental needlestick
include HIV/AIDS, hepatitis B virus, hepatitis C virus, and other diseases. It
is estimated that the testing and treatment of needlestick injuries costs the
U.S. healthcare system between $750 million and $1 billion per year.
In response to accidental needlestick injuries, national safety
regulations have enhanced the demand for safety medical products. The U.S.
Needlestick Safety and Prevention Act became effective in 2001 and requires
healthcare employers to review new safety-enhanced products and mandates their
use.
ActiVein's catheter, referred to as the ActIV, improves patient comfort,
healthcare efficiency and healthcare safety by eliminating the need for
venipunctures after IV catheter insertion.
Activein's scientists believe that there are two phenomena that prevent
blood withdrawal from a conventional IV catheter:
12
o Mechnical: Blood withdrawal creates a vacuum, which causes the vein to
collapse at the IV catheter's tube entrance. The collapsed vein
prevents blood flow and inhibits an IV catheter's ability to withdraw
blood.
o Biological: The catheter is a foreign body in the vein. The body
reacts to the foreign body by covering the end of the IV catheter tube
with fibrin sheets. The fibrin sheets obstruct the catheter opening
and prevent the catheter's ability to withdraw blood.
The ActIV overcomes both the mechanical and biological phenomena that
prevent blood withdrawal from an IV catheter.
The ActIV has an inflating balloon at the distal tip of the catheter. The
distal balloon has a dual function, it holds the vein open, which prevents the
vein from collapsing, and it breaks the fibrin sheets to allow a patent opening
for blood flow.
With ActIV, healthcare workers can withdraw blood from the catheter -
without using additional needles.
ActiVein's dual function IV catheter can potentially reduce the number of
venipunctures per hospitalization period to one.
The ActIV has been used in short period tests (up to two hours) in sheep
to assess the safety and viability of the ActIV. Preliminary results indicate
that the ActIV can safely inflate and deflate the vein, providing dual
functionality - fluid or medication delivery and blood withdrawal.
ActiVein designed its product so it can be mass produced at a
cost-competitive price. ActiVein plans to conduct a longer pre-clinical test (up
to 3 days) with its final prototype during the pre-clinical stage
Competition
The traditional peripheral IV catheter segment is approaching saturation
and most regions have a high concentration of IV manufacturers.
Becton Dickinson is the market leader with a 22% share of total revenues,
and is closely followed by B Braun with an 18% market share. B Braun is the
leader in Europe and has a high stake in the Asian region. Teleflex (Arrow
International) and CR Bard follow with 13% and 11% market shares respectively.
Local and smaller companies generate approximately 36% of total sales.
Some of these companies lead in their respective regions but have relatively
small shares in the global market (e.g. U.K.-based Smiths Medical, Fresenius,
Baxter Healthcare, Cardinal Health, and Terumo).
Numerous companies sell safety needles and syringes, as well as catheter
devices, with features that prevent inadvertent needle injuries. However
ActiVein is not aware of any competing product which permits both
fluid/medication delivery and blood withdrawal. ActiVein believes its ActIV will
13
be superior to present day catheters and safety needles and syringes since the
ActIV eliminates the need for venipunctures after IV catheter insertion thereby
improving patient comport, healthcare, efficiency and healthcare safety.
ActiVein plans to market its ActIV catheter at a price comparable to
existing catheters (i.e. $1.3 per device).
Government Regulation
Drugs, pharmaceutical products, medical devices and other related products
are regulated in the United States under the Federal Food, Drug and Cosmetic
Act, the Public Health Service Act, and the laws of certain states. The FDA
exercises significant regulatory control over the clinical investigation,
manufacture and marketing of pharmaceutical, biological products and medical
devices.
Prior to the time a medical device can be marketed in the United States,
approval of the FDA must normally be obtained.
The process regulatory approval process may require substantial resources
and considerable time. Approval of medical devices by regulatory authorities of
most foreign countries must also be obtained prior to marketing in those
countries. The approval process varies from country to country and the time
period required in each foreign country to obtain approval may be longer or
shorter than that required for regulatory approval in the United States.
Approvals from foreign countries may not be accepted by the FDA and product
licensure in a foreign country does not mean that a product will be licensed by
the FDA or any other government entity for manufacturing and/or marketing.
Medical device regulation in the U.S. is based on classification of the
device into three classes, I, II, or III. Class III medical devices are
regulated much like drugs, whereas Class I and II devices have less stringent
data requirements than drugs and do not require clinical trials for FDA
clearance. Products submitted to the FDA for clearance as medical devices can
refer to the safety and effectiveness of medical devices which perform similar
functions to products which the FDA has already cleared. As long as a medical
device submitted to the FDA has the same clinical use as a medical device
previously cleared by the FDA, such medical device will normally receive FDA
clearance upon a showing that the device is substantially equivalent to the
other approved medical devices.
Prior to the time a medical device can be marketed in Europe, the device
must be granted a CE Marking that is achieved by obtaining approval of the
device from various European regulatory agencies.
Medical device regulation in Europe is based on a classification of the
device into four classes, I, IIa, IIb, and III. Class IIb and III devices
usually require clinical studies to prove the device's safety and efficacy.
Class IIa devices may require clinical studies if the device is inserted into
the body for a certain period of time. Medical devices in Europe cannot be
14
compared to one another for the purpose of obtaining CE marking thus the process
is more stringent than in the U.S.
In the U.S., ActiVein expects that its ActIV will be classified as a Class
II medical device and will not require clinical studies for approval. In Europe,
ActiVein expects that its ActIV will be classified as a Class IIb medical device
and will require clinical studies for approval.
Patents
ActiVein's catheter has received patent approval from the European patent
office (No. 03710201.9) and has been registered in a majority of countries in
Europe.
The U.S. patent application is at the final examination stage and is
expected to be approved by June 30, 2010.
Plan of Operation
ActiVein's plan of operation follows:
Projected
Completion Estimated
Activity Date Cost
-------- ---------- ---------
Preclinical Trials April 2010 $ 270,000
Laboratory and animal studies will
be conducted to determine the safety
and efficacy of the ActIV. Preclinical
tests must be conducted in compliance
with good laboratory practice regulations.
Initial Human Trials June 2010 220,000
The ActIV will be tested for three
days in two patients at a hospital in
Israel. This first clinical study will
assess the ability of the ActIV to both
infuse fluids and withdraw blood from a
patient.
Phase I Clinical Trials August 2010 130,000
An eleven patient study will be
conducted at a medical center in
Israel. This trial will be designed
according to FDA and CE regulations.
The goal of the trial will be to prove
the safety and efficacy of the ActIV.
Regulatory Approval November 2010 130,000
Apply for FDA and CE approval.
Production and Product Launch February 2011 250,000
Complete patent applications. File new
patent applications as necessary.
Manufacture ActIVcatheters and begin
sales to medical providers.
15
Post Marketing Trials May 2011 500,000
Conduct post marketing trials in two -----------
or three medical centers in the U.S.
and Europe. The purpose of the
post-marketing trials will be to test
the ActIV in a larger market.
$1,500,000
===========
ActiVein anticipates that its capital requirements for the twelve-month
period ending February 28, 2011 will be:
Research and development/patent filings $1,500,000
General and administrative expenses 200,000
------------
Total $1,700,000
==========
General
ActiVein's offices are located at 1 Leshem Street, Kiryat Gat, 82000,
Israel. The 500 square feet of office space is occupied under a lease requiring
rental payments of $550 per month until Dec 2011.
As of February 15, 2010 ActiVein did not have any full time employees.
ActiVein anticipates that it will need to hire 6 employees during the twelve
month period following the date fund is received.
MANAGEMENT
ActiVein's officers and directors are listed below. ActiVein's directors
will generally be elected at the annual shareholders' meeting and hold office
until the next annual shareholders' meeting or until their successors are
elected and qualified. ActiVein's executive officers are elected by its board of
directors and serve at its discretion.
Name Age Position
---- --- --------
Adi Plaschkes Chief Executive and Financial Officer
Dr. Yoav Paz Chief Medical Officer
Anat Segal Director
Eitan Kyiet Director
Ilan Shalev Director
Boaz Dor Director
Following is a brief description of the business backgrounds of ActiVein's
executive officers and directors.
Adi Plaschkes has been the Chief Executive and Financial officer of
ActiVein since March 2009. Since Nov 2006 Mr. Plaschkes has been the Chief
Executive and Financial Officer of ActiVein Ltd. Mr. Plaschkes founded ActiVein
Ltd. in 2006 and since that time has been ActiVein Ltd.'s Chief Executive
Officer. In 2002 Mr. Plaschkes founded, and until 2006 was the technical manager
16
for Life Support Ltd., a company involved with the design and management of
projects involving medical products and chemical and biological warfare
protection equipment. Between 1996 and 2002 Mr. Plaschkes was the technical
manager of Elad Engineering Ltd., an Israeli company involved with a variety of
research and development projects.
Dr. Yoav Paz has been the Chief Medical Officer of ActiVein since March
2009. Since Nov. 2006 Dr. Paz has been the Chief Medical Officer of ActiVein
Ltd. Since 2008 Dr. Paz has also been cardio thoracic surgeon in the Department
of Cardiac Surgery at Sheba Medical Center, Ramat Gan, Israel. Between 2006 and
2008 Dr. Paz was a cardio thoracic surgeon in the Department of Cardiac Surgery
at Hadassah-Hebrew University Medical Center Hadassah, Jerusalem, Israel.
Between 1996 and 2005 Dr. Paz was a cardio thoracic surgeon in the Department of
Cardiac Surgery at Sheba Medical Center, Ramat Gan, Israel. Between 1996 and
2005, and since 2008, Dr. Paz has also been a member of the Sackler Faculty of
Medicine, Tel-Aviv University, Israel.
Anat Segal has been a director of ActiVein since March 2009. Ms. Segal is
the Chief Executive Officer and one of the founding partners of Xenia Venture
Capital, an investment firm operating a technological incubator which invests in
companies developing information/communication/internet technologies and medical
devices. Since 2000 Ms. Segal has managed her independent advisory practice
providing strategic counseling and investment banking services to high-tech
companies. From 1998 to early 2000, she served as the Managing Director and Head
of Corporate Finance of Tamir Fishman & Co., the then Israeli affiliate of
Hambrecht and Quist. From 1996 to 1998, she served as a Vice President of
Investment Banking, Robertson Stephens & Co/Evergreen. From 1990 to 1996, Ms.
Segal held senior positions with Bank Hapoalim Group and Poalim Capital Markets.
Ilan Shalev has been a director of ActiVein since March 2009. Mr. Shalev
has more than 20 years of experience in the development, production and
management of multi-disciplinary systems. Currently head of development of Elad
Engineering Ltd., the company responsible for the development of the Lektrox
family of non-lethal electric ammunition. Mr. Shalev was formerly General
Manager and Head of Small Arms Development for Israel Military Industries. Among
his many achievements, Mr. Shalev is credited for his work on the Negev machine
gun in use by Israel Defence Forces as a service machinegun, the Desert Eagle
pistol for police and civilian markets, the Crossfire and Timber Wolf rifles,
and weapons stations for various calibre machine guns.
Eitan Kyiet has been a director of ActiVein since March 2009. Since April
2007 Mr. Kyiet has held various positions with Lumenis Ltd., a company engaged
in the development, marketing and sale of medical, aesthetic and ophthalmic
laser systems. Mr. Kyiet's positions with Lumenis include Director of Lumenis'
Global Strategic Operations and Alliances and previously, Director of Global
Supply Chain. During 2006 and 2007 Mr. Kyiet was a business representative for
the Israeli Prime Minister's Office. From 2000 to 2006 Mr. Kyiet was a partner
with the Tel Aviv law firm of Amit, Pollack, Matalon & Co. Mr. Kyiet holds a
Bachelors Degree in Law and a Masters Degree in Business Management.
17
Boaz Dor has been a director of ActiVein since March 2009 After serving in
the Israeli Defence Force, Mr. Dor joined the Israeli Security Services (Shabak)
as an intelligence officer. Working world wide in the International Aviation
Security Division, Mr. Dor served as Head of Security for the Israel Embassy and
El Al Israel Airlines in Cairo, Egypt, and later as Vice-Counsel and Head of
Security for the Israeli Consulate and El Al Israel Airlines in Toronto and
Western Canada. In 1989, Mr. Dor resigned from the public sector and opened a
security consulting firm. In 1991 he was appointed Executive Director Security
for the Seabeco Group of Companies where he oversaw international operations in
Switzerland, Belgium, Russia, New York and Toronto. Mr. Dor has been a director
of Security Devices International Inc., a company traded on the OTC Bulletin
Board, since April 2005. Since 2000 Mr. Dor has owned and operated Ozone Water
Systems Inc., a water purification company.
ActiVein does not have a compensation committee. ActiVein's Directors
serve as its Audit Committee. ActiVein does not have a financial expert. Eitan
Kyiet is independent as that term is defined Section 803 of the listing
standards of the NYSE AMEX.
Executive Compensation.
The following table shows the compensation paid or accrued to ActiVein's
(Delaware) officer during the period from ActiVein's inception (January 8, 2007)
to February 28, 2008 and for the year ended February 28, 2009. Since its
inception, no officer of ActiVein (Delaware) has received any compensation.
All
Other
Annual
Stock Option Compen-
Name and Principal Fiscal Salary Bonus Awards Awards sation
Position Year (1) (2) (3) (4) (5) Total
- ------------------ ----- ------ ----- ------ ------ ------- -----
Sheldon Kales, 2009
President and Chief 2008 -- -- -- -- -- --
Executive Officer
and Secretary (from
inception to March 2009)
The following table shows the compensation paid or accrued to ActiVein's
(Israel) officers during the twelve month period ending February 28, 2009.
All
Other
Annual
Stock Option Compen-
Name and Principal Salary Bonus Awards Awards sation
Position (1) (2) (3) (4) (5) Total
- ------------------ ------ ----- ------ ------ ------- -----
Adi Plaschkes -- -- -- -- -- --
Chief Executive
Officer
18
Dr. Yoav Paz, Chief -- -- -- -- -- --
Medical Officer
(1) The dollar value of base salary (cash and non-cash) earned.
(2) The dollar value of bonus (cash and non-cash) earned.
(3) During the periods covered by the table, the value of shares issued as
compensation for services to the persons listed in the table.
(4) The value of all stock options granted during the periods covered by the
table.
(5) All other compensation received that could not properly report in any other
column of the table.
Stock Option Plan
ActiVein has a Non-Qualified Stock Option Plan. A summary description of
the Plan follows.
The Non-Qualified Stock Option Plan authorizes the issuance of 2,000,000
shares of ActiVein's common stock to persons that exercise options granted
pursuant to the Plan. ActiVein's employees, directors, officers, consultants and
advisors are eligible to be granted options pursuant to the Plan, provided
however that bona fide services must be rendered by any consultants or advisors
and the services must not be in connection with a capital-raising transaction.
The Plan is administered by ActiVein's Board of Directors. The Board of
Directors is vested with the authority to establish the exercise price of any
option, interpret the provisions of the Plan and supervise the Plan's
administration. In addition, the Board of Directors is empowered to select those
persons to whom options are to be granted, to determine the number of shares
subject to each grant of an option and to determine when, and upon what
conditions, options granted under the Plan will vest or otherwise be subject to
forfeiture and cancellation.
In the discretion of the Board of Directors, any option granted pursuant
to the Plan may include installment exercise terms such that the option becomes
fully exercisable in a series of cumulating portions. The Board of Directors may
also accelerate the date upon which any option (or any part of any options) is
first exercisable. Any options granted pursuant to the Plan will be forfeited if
any "vesting" schedule established by the Board of Directors at the time of the
grant is not met. For purposes of the Plan, vesting means the period during
which the employee must remain an employee of ActiVein or the period of time a
non-employee must provide services to ActiVein. At the time an employee ceases
working for ActiVein (or at the time a non-employee ceases to perform services
for ActiVein), any options not fully vested will be forfeited and cancelled. At
the discretion of the Board of Directors the exercise price of an option may be
paid through the delivery of shares of ActiVein's common stock having an
aggregate fair market value equal to the exercise price, provided such shares
have been owned by the option holder for at least one year prior to exercise. A
combination of cash and shares of common stock may also be permitted at the
discretion of the Board of Directors.
19
Options are generally non-transferable except upon death of the option
holder.
ActiVein's Board of Directors may at any time, and from time to time,
amend, terminate, or suspend the Plan in any manner it deems appropriate,
provided that any amendment, termination or suspension will not adversely affect
rights or obligations with respect to options previously granted. The Plan has
not been approved by ActiVein shareholders.
Long-Term Incentive Plans. ActiVein provides some of the officers or
employees with pension, stock appreciation rights, long-term incentive or other
plans and has intention of implementing - these plans for the foreseeable
future.
Employee Pension, Profit Sharing or other Retirement Plans. ActiVein does
not have a defined benefit, pension plan, profit sharing or other retirement
plan, although it may adopt one or more of such plans in the future.
Compensation of Directors. ActiVein's directors do not receive any
compensation for their services as directors.
Consulting Fees. During the one-year period ending March 24, 2010,
ActiVein has agreed to pay Sheldon Kales and Boaz Dor $6,500 and $1,500 per
month, respectively, for investor relations and investment banking services.
Proposed Compensation. The following table shows the time ActiVein's
officers plan to devote to the business of ActiVein during the twelve month
period ending February 28, 2011 and the amount ActiVein expects to pay to these
officers during this period.
Time to
be devoted Proposed
Name to ActiVein Compensation
---- ----------- ------------
Adi Plaschkes 100% $8,000
Dr. Yoav Paz 20% $2,000
ActiVein has employment agreements with its officers.
Transactions with Related Parties and Recent Sales of Unregistered Securities
The following lists all shares of ActiVein's common stock issued since its
incorporation:
Consideration
Shareholder Date of Sale Shares Issued Paid for Shares
----------- ------------ ------------- ----------------
Former Officers and Directors (1) 2007 5,500,000 $0.0001 per share
Private Investors 2007 2,858,067 $0.15 per share
Boaz Dor 3/09 750,000 Services rendered
Shareholders of ActiVein Ltd. 3/09 4,800,190 Shares of ActiVein Ltd.
20
(1) ActiVein's former officers and directors, all of whom resigned following
the acquisition of ActiVein Ltd., were Sheldon Kales, Dr. Tally Bodenstein,
and Rakesh Malhotra.
PRINCIPAL SHAREHOLDERS
The following table shows the ownership of ActiVein's common stock as of
the date of this prospectus by each shareholder known by ActiVein to be the
beneficial owner of more than 5% of ActiVein's outstanding shares, each director
and executive officer of ActiVein, and all directors and executive officers as a
group. Except as otherwise indicated, each shareholder has sole voting and
investment power with respect to the shares they beneficially own.
Name and Address Number of Shares Percent of Class
- ---------------- ---------------- ----------------
Adi Plaschkes 445,198 3.2%
36 Ben Gurion St.
Ramat-Hashron
47321, Israel
Dr. Yoav Paz 944,986 6.8%
51 Borhov St.
Givataim
53222, Israel
Anat Segal -- --
9 Moshe Kol
Tel Aviv
69626, Israel
Eiten Kyiet 377,888 (1) 2.7%
6 Frank Peleg St.
P.O. Box 55703
Haifa
34987, Israel
Illan Shalev 944,986 6.8%
3 Taiber St.
Givataim
53415, Israel
Boaz Dor 750,000 5.4%
2 Palmerston Drive
Thornhill, Ontario
Canada L4J 7V9
21
Name and Address Number of Shares Percent of Class
- ---------------- ---------------- ----------------
Xenia Venture Capital Ltd. 3,770,935 (2) 27.1%
P.O. Box 720
Kiryat Gat Israel, 82000
Sheldon Kales 2,500,000 18%
2171 Avenue Rd., Suite 103
Toronto, Ontario
Canada M5M 4B4
Dr. Tally Bodenstein 2,500,000 18%
464 Old Orchard Grove
Toronto, Ontario
Canada M5M 2G4
All officers and directors 3,463,058 24.7%
as a group (6 persons)
(1) Shares are held of record by Eftan Investment Consulting Ltd.
(2) Represents shares issuable upon the conversion of Series A Preferred shares
held by Xenia Venture Capital. Does not include 428,768 shares of common
stock which may be acquired upon the exercise of a warrant held by Xenia
Venture Capital. The warrant entitles Xenia Venture Capital to acquire up
to 428,768 shares of ActiVein's Series A preferred stock. Each Series A
preferred share is convertible into one share of ActiVein's common stock.
OFFERING BY ACTIVEIN
By means of this prospectus ActiVein is offering to the public up to
5,000,000 shares of its common stock at a price of $0.20 per share. ActiVein
arbitrarily determined the $0.20 offering price and this price does not bear any
relationship to ActiVein's assets, book value or any other generally accepted
criteria of value for investment.
ActiVein will offer the shares through its officers and selected sales
agents, on a "best efforts" basis. ActiVein's officers are not registered with
the Securities and Exchange Commission as brokers or dealers. ActiVein's
officers are not required to be registered as brokers or dealers since neither
ActiVein's officers are engaged in the business of buying or selling securities
for others. ActiVein's officers will not be relying on the exemption provided by
Rule 3a4-1 of the Securities and Exchange Commission with respect to their
participation in this offering.
ActVein will not compensate any officer for his participation in this
offering. There is no firm commitment by any person to purchase or sell any of
the shares offered and there is no assurance that any shares offered will be
sold. All proceeds from the sale of the shares will be promptly delivered to
22
ActVein. ActVein plans to end the offering on June 30, 2010. However, ActiVein
may at its discretion end the offering sooner or extend the offering to August
31, 2010.
Subscriptions will be made by delivering a check to ActiVein for the
amount of shares to be purchased. Cash will not be accepted as for payment for
shares. Subscriptions for the shares offered by this prospectus will not be
binding upon Actvein until accepted in writing by its President. ActiVein has
not established any criteria for accepting or rejecting any subscriptions.
Subscriptions will be accepted or rejected within ten days after the
subscription is received. A subscription will be considered accepted when
ActiVein deposits the funds received for the shares subscribed. Any subscription
may be withdrawn prior to its acceptance by ActiVein, provided the withdrawal is
received by ActiVein prior to the time ActiVein deposits the funds received for
the subscription.
SELLING SHAREHOLDERS
The persons listed in the following table plan to offer the shares shown
opposite their respective names by means of this prospectus. The owners of the
shares to be sold by means of this prospectus are referred to as the "selling
shareholders".
ActiVein will not receive any proceeds from the sale of the shares by the
selling shareholders. ActiVein will pay all costs of registering the shares
offered by the selling shareholders. These costs, based upon the time related to
preparing this section of the prospectus, are estimated to be $2,000. The
selling shareholders will pay all sales commissions and other costs of the sale
of the shares offered by them.
Shares to Share
be sold Ownership
Shares in this After Percentage
Name Owned Offering Offering Ownership
- ---- ------ --------- ---------- ----------
Ilan Shalev 944,986 100,000 844,986 6%
Yoav Paz 944,986 100,000 844,986 6%
Adi Plaschkes 445,198 45,000 400,198 2.9%
Eftan Investment Consulting Ltd. 377,888 30,000 347,888 2.5%
The controlling persons of the non-individual selling shareholders are:
Name of Shareholder Controlling Person
------------------- ------------------
Eftan Investment Consulting Ltd. Eitan Kyiet
Except as noted above, no selling shareholder has, or had, any material
relationship with ActiVein, or ActiVein's officers or directors. To ActiVein's
knowledge, no selling shareholder is affiliated with a broker dealer.
23
Manner of Sale
The shares of common stock owned by the selling shareholders may be
offered and sold by means of this prospectus from time to time as market
conditions permit. If and when ActiVein's common stock becomes quoted on the OTC
Bulletin Board or listed on a securities exchange, the shares owned by the
selling shareholders may be sold in the over-the-counter market, or otherwise,
at prices and terms then prevailing or at prices related to the then-current
market price, or in negotiated transactions. These shares may be sold by one or
more of the following methods, without limitation:
o a block trade in which a broker or dealer so engaged will attempt to
sell the shares as agent but may position and resell a portion of the
block as principal to facilitate the transaction;
o purchases by a broker or dealer as principal and resale by such broker
or dealer for its account pursuant to this prospectus;
o ordinary brokerage transactions and transactions in which the broker
solicits purchasers; and
o face-to-face transactions between sellers and purchasers without a
broker/dealer.
In competing sales, brokers or dealers engaged by the selling shareholders
may arrange for other brokers or dealers to participate. Brokers or dealers may
receive commissions or discounts from selling shareholders in amounts to be
negotiated. As to any particular broker-dealer, this compensation might be in
excess of customary commissions. Neither ActiVein nor the selling stockholders
can presently estimate the amount of such compensation. Notwithstanding the
above, no NASD member will charge commissions that exceed 8% of the total
proceeds from the sale.
The selling shareholders and any broker/dealers who act in connection with
the sale of the shares may be deemed to be "underwriters" within the meaning of
ss.2(11) of the Securities Acts of 1933, and any commissions received by them
and any profit on any resale of the shares as principal might be deemed to be
underwriting discounts and commissions under the Securities Act.
If any selling shareholder enters into an agreement to sell his or her
shares to a broker-dealer as principal, and the broker-dealer is acting as an
underwriter, ActiVein will file a post-effective amendment to the registration
statement, of which this prospectus is a part, identifying the broker-dealer,
providing required information concerning the plan of distribution, and
otherwise revising the disclosures in this prospectus as needed. ActiVein will
also file the agreement between the selling shareholder and the broker-dealer as
an exhibit to the post-effective amendment to the registration statement.
The selling stockholders may also sell their shares pursuant to Rule 144
under the Securities Act of 1933.
24
ActiVein has advised the selling shareholders that they and any securities
broker/dealers or others who may be deemed to be statutory underwriters will be
subject to the prospectus delivery requirements under the Securities Act of
1933. ActiVein has also advised each selling shareholder that in the event of a
"distribution" of the shares owned by the selling shareholder, such selling
shareholder, any "affiliated purchasers", and any broker/dealer or other person
who participates in the distribution may be subject to Rule 102 of Regulation M
under the Securities Exchange Act of 1934 ("1934 Act") until their participation
in that distribution is completed. Rule 102 makes it unlawful for any person who
is participating in a distribution to bid for or purchase stock of the same
class as is the subject of the distribution. A "distribution" is defined in Rule
102 as an offering of securities "that is distinguished from ordinary trading
transactions by the magnitude of the offering and the presence of special
selling efforts and selling methods". ActiVein has also advised the selling
shareholders that Rule 101 of Regulation M under the 1934 Act prohibits any
"stabilizing bid" or "stabilizing purchase" for the purpose of pegging, fixing
or stabilizing the price of the common stock in connection with this offering.
DESCRIPTION OF SECURITIES
Common Stock
ActiVein is authorized to issue 50,000,000 shares of common stock. As of
the date of this prospectus ActiVein had 13,908,257 outstanding shares of common
stock. Holders of common stock are each entitled to cast one vote for each share
held of record on all matters presented to shareholders. Cumulative voting is
not allowed; hence, the holders of a majority of the outstanding common stock
can elect all directors.
Holders of common stock are entitled to receive such dividends as may be
declared by the Board of Directors out of funds legally available for dividends
and, in the event of liquidation, to share pro rata in any distribution of
ActiVein's assets after payment of liabilities. The Board of Directors is not
obligated to declare a dividend and it is not anticipated that dividends will
ever be paid.
Holders of common stock do not have preemptive rights to subscribe to
additional shares if issued by ActiVein. There are no conversion, redemption,
sinking fund or similar provisions regarding the common stock. All of the
outstanding shares of common stock are fully paid and non-assessable and all of
the shares of common stock offered by this prospectus will be, upon issuance,
fully paid and non-assessable.
Preferred Stock
ActiVein is authorized to issue 10,000,000 shares of preferred stock.
Shares of preferred stock may be issued from time to time in one or more series
as may be determined by ActiVein's Board of Directors. The voting powers and
preferences, the relative rights of each such series and the qualifications,
limitations and restrictions of each series will be established by the Board of
Directors. ActiVein's directors may issue preferred stock with multiple votes
per share and dividend rights which would have priority over any dividends paid
with respect to the holders of ActiVein's common stock. The issuance of
25
preferred stock with these rights may make the removal of management difficult
even if the removal would be considered beneficial to shareholders generally,
and will have the effect of limiting shareholder participation in transactions
such as mergers or tender offers if these transactions are not favored by
ActiVein's management.
In connection with the acquisition of ActiVein Ltd., 3,770,935 Series A
Preferred shares were issued to Xenia Venture Capital Ltd. in exchange for the
preferred shares held by Xenia in ActiVein Ltd.
Each Series A preferred share is:
o convertible, at the option of the holder, into one share of ActiVein's
common stock.
o entitled to one vote on any matter submitted to ActiVein's
shareholders, and
o entitled an annual dividend of $0.0106 per share, as and when
dividends are declared by ActiVein's directors. Dividends which are
not declared do not cumulate.
In the event of ActiVein's liquidation or dissolution, or if ActiVein is
involved in a merger or other reorganization which results in ActiVein's
shareholders owning less than 50% of ActiVein's outstanding shares following the
merger or reorganization, each Series A preferred share is entitled to receive
an amount equal to $0.133, plus $0.0106 for each year after November 2007, plus
all declared but unpaid dividends.
Warrant to Purchase Series A Preferred Shares
In exchange for a warrant to purchase additional preferred shares of
ActiVein Ltd., a warrant to purchase 428,768 Series A shares of ActiVein was
issued to Xenia Venture Capital.
The warrant entitles Xenia Venture Capital to purchase 428,768 shares of
ActiVein's Series A preferred stock for $0.0001 per share. The warrant expires
if ActiVein raises at least $15,000,000 in a public offering, is involved in a
merger or reorganization, or sells all or substantially all of its assets or
common stock to a third party.
Transfer Agent
As of the date of this prospectus ActiVein had not appointed a transfer
agent for its common stock.
LEGAL PROCEEDINGS
ActiVein is not involved in any legal proceedings and ActiVein does not
know of any legal proceedings which are threatened or contemplated.
26
INDEMNIFICATION
The Delaware General Corporation Code authorizes the indemnification of a
director, officer, employee or agent of ActiVein against expenses incurred in
connection with any action, suit, or proceeding to which he or she is named a
party by reason having acted or served in such capacity, except for liabilities
arising from misconduct or negligence in performance of their duties. In
addition, even a director, officer, employee, or agent of ActiVein who was found
liable for misconduct or negligence in the performance of his or her duties may
obtain such indemnification if, in view of all the circumstances in the case, a
court of competent jurisdiction determines such person is fairly and reasonably
entitled to indemnification. Insofar as indemnification for liabilities arising
under the Securities Act of 1933 may be permitted to directors, officers, or
persons controlling ActiVein pursuant to the foregoing provisions, ActiVein has
been informed that in the opinion of the Securities and Exchange Commission,
such indemnification is against public policy as expressed in the Act and is
therefore unenforceable.
AVAILABLE INFORMATION
ActiVein has filed with the Securities and Exchange Commission a
Registration Statement on Form S-1 (together with all amendments and exhibits)
under the Securities Act of 1933, as amended, with respect to the Securities
offered by this prospectus. This prospectus does not contain all of the
information set forth in the Registration Statement, certain parts of which are
omitted in accordance with the rules and regulations of the Securities and
Exchange Commission. For further information, reference is made to the
Registration Statement which may be read and copied at the Commission's Public
Reference Room at 100 F. Street, N.E., Washington, D.C. 20549. The public may
obtain information on the operation of the Public Reference Room by calling the
Commission at 1-800-SEC-0330. The registration statement is also available at
www.sec.gov, the website of the Securities and Exchange Commission.
27
ACTIVEIN INC.
(FORMERLY UNLTD VENTURES INCORPORATED)
FINANCIAL STATEMENTS
YEARS ENDED FEBRUARY 28, 2009 AND FEBRUARY 29, 2008
Together with Report of Independent Registered Public Accounting Firm
(Amounts expressed in US Dollars)
ACTIVEIN INC.
(FORMERLY UNLTD VENTURES INCORPORATED)
FINANCIAL STATEMENTS
YEARS ENDED FEBRUARY 28, 2009 AND FEBRUARY 29, 2008
(Amounts expressed in US Dollars)
TABLE OF CONTENTS
Page No
Report of Independent Registered Public Accounting Firm 1
Balance Sheets as at February 28, 2009 and February 29, 2008 2
Statements of Operations and Comprehensive loss for the
years ended February 28, 2009 and February 29, 2008 3
Statements of Cash Flows for the years ended February 28, 2009
and February 29, 2008 4
Statements of changes in Stockholders' Equity for the years
ended February 28, 2009 and February 29, 2008 5
Notes to Financial Statements 6-14
Schwartz Levitsky Feldman llp
CHARTERED ACCOUNTANTS
LICENSED PUBLIC ACCOUNTANTS
TORONTO o MONTREAL
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Stockholders of
Activein Inc. (Formerly UNLTD Ventures Inc.)
We have audited the accompanying balance sheets of Activein Inc. (Formerly UNLTD
Ventures Inc.) ("the Company") as of February 28, 2009 and February 29, 2008 and
the related statements of operations and comprehensive loss, changes in
stockholders' equity and cash flows for the years then ended. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits 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
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits 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 the Company as of February 28,
2009 and February 29, 2008, the results of its operations and its cash flows for
the years then ended in accordance with generally accepted accounting principles
in the United States of America.
The company is not required to have, nor were we engaged to perform, an audit of
its internal control over financial reporting. Our audit 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 controls
over financial reporting. Accordingly, we express no such opinion.
The accompanying consolidated financial statements have been prepared assuming
that the Company will continue as a going concern. As discussed in note 2 to the
financial statements the Company has no source for operating revenue and expects
to incur significant expenses before establishing operating revenue. This raises
substantial doubt about its ability to continue as a going concern. The
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.
"SCHWARTZ LEVITSKY FELDMAN LLP"
Toronto, Ontario, Canada Chartered Accountants
October 27, 2009 Licensed Public Accountants
1167 Caledonia Road
Toronto, Ontario M6A 2X1
Tel: 416 785 5353
Fax: 416 785 5663
ACTIVEIN INC.
(FORMERLY UNLTD VENTURES INCORPORATED)
Balance Sheets
As at February 28, 2009 and February 29, 2008
(Amounts expressed in US Dollars)
2009 2008
ASSETS $ $
CURRENT
Cash and cash equivalents 3,477 20,233
Short term Investments 362,606 401,978
Loans and advances (note 9) 50,000 -
----------- -----------
Total Current Assets 416,083 422,211
----------- -----------
TOTAL ASSETS 416,083 422,211
----------- -----------
LIABILITIES
CURRENT LIABILITIES
Accounts payable and accrued liabilities 20,405 335
----------- -----------
Total Current Liabilities 20,405 335
----------- -----------
Going Concern (note 2)
Commitments (Note 7)
Subsequent Events (note 10)
Related Party Transactions (note 5)
STOCKHOLDERS' EQUITY
Capital Stock (Note 4)
Preference shares, $0.0001 par value; 1,000,000
shares authorized, no shares issued or outstanding
Common shares, $0.0001 par value: 50,000,000
shares authorized, 8,358,067 shares outstanding
in 2009 and 2008 836 836
Additional Paid-In Capital 428,424 428,424
Accumulated Deficit (33,582) (7,384)
----------- -----------
Total Stockholders' Equity 395,678 421,876
----------- -----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY 416,083 422,211
=========== ===========
The accompanying notes are an integral part of these financial statements.
2
ACTIVEIN INC.
(FORMERLY UNLTD VENTURES INCORPORATED)
Statements of Operations and Comprehensive loss
Years Ended February 28, 2009 and February 29, 2008
(Amounts expressed in US Dollars)
2009 2008
$ $
REVENUE
Interest and other income 10,629 3,625
------------ ------------
EXPENSES:
General and administration 36,121 11,009
Other expense 706 -
------------ ------------
LOSS BEFORE INCOME TAXES (26,198) (7,384)
Income taxes (Note 6) - -
------------ ------------
NET LOSS AND COMPREHENSIVE LOSS (26,198) (7,384)
------------ ------------
Loss per share - basic and diluted (0.00) (0.00)
Weighted average common shares outstanding 8,358,067 4,453,036
The accompanying notes are an integral part of these financial statements.
3
ACTIVEIN INC.
(FORMERLY UNLTD VENTURES INCORPORATED)
Statement of Cash Flows
Years Ended February 28, 2009 and February 29, 2008
(Amounts expressed in US Dollars)
2009 2008
---- ----
$ $
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss for the year (26,198) (7,384)
Adjustments for:
Changes in non-cash working capital:
Loans and advances (50,000) -
Accounts payable and accrued liabilities 20,070 335
---------- ----------
NET CASH USED IN OPERATING ACTIVITIES (56,128) (7,049)
---------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES
Short Term Investments 39,372 (401,978)
NET CASH PROVIDED BY (USED IN) INVESTING
ACTIVITIES 39,372 (401,978)
---------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES
Issuance of share capital - 429,260
---------- ----------
NET CASH PROVIDED BY FINANCING ACTIVITIES - 429,260
---------- ----------
NET INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS FOR THE YEAR (16,756) 20,233
Cash and cash equivalents, beginning of year 20,233 -
---------- ----------
CASH AND CASH EQUIVALENTS, END OF YEAR 3,477 20,233
========== ==========
INCOME TAXES PAID - -
========== ==========
INTEREST PAID - -
========== ==========
The accompanying notes are an integral part of these financial statements.
4
ACTIVEIN INC.
(FORMERLY UNLTD VENTURES INCORPORATED)
Statement of Changes in Stockholders' Equity For the years ended February 28,
2009 and February 29, 2008 (Amounts expressed in US Dollars)
Number of Common Additional Total
Common Shares Paid-in Deficit Shareholders'
Shares amount Capital accumulated Equity
--------- ------ ---------- ----------- -------------
$ $ $ $
Balance as of March 1, 2007 - - - - -
Issuance of common shares to
Directors and officers for cash 5,500,000 550 - - 550
Issuance of common shares to
non- related investors for cash 2,858,067 286 428,424 - 428,710
Net loss for the year - - - (7,384) (7,384)
------------ ------------ ------------ ------------ ------------
Balance as of
February 29, 2008 8,358,067 836 428,424 (7,384) 421,876
Net loss for the year (26,198) (26,198)
------------ ------------ ------------ ------------ ------------
Balance as of
February 28, 2009 8,358,067 836 428,424 (33,582) 395,678
------------ ------------ ------------ ------------ ------------
The accompanying notes are an integral part of these financial statements.
5
ACTIVEIN INC.
(FORMERLY UNLTD VENTURES INCORPORATED)
Notes to Financial Statements
February 28, 2009 and February 29, 2008
(Amounts expressed in US Dollars)
1. BASIS OF PRESENTATION
The Company was incorporated under the laws of the State of Delaware,
USA on January 8, 2007. On April 9, 2009 the Company changed its name to
ActiVein, Inc. The Company proposes to identify and evaluate potential
acquisitions or businesses, and once identified and evaluated, to
negotiate an acquisition or participation subject to receipt of
shareholder and regulatory approval. The Company did not have any
transactions during this period.
2. NATURE OF OPERATIONS AND GOING CONCERN
The company has finalized subsequent to the year end an agreement for
exchange of common stock with ActiVein Ltd, an Israel based Company
which is developing an elegant dual-action IV catheter that can enable
both fluid infusion and blood withdrawal from the same vein.
The Company has no source for operating revenue and expects to incur
significant expenses before establishing operating revenue. The
Company's future success, after it concluded the transaction with
ActiVein Ltd, is dependent upon its ability to raise sufficient capital
which will be required in the development and the marketability of the
products to be manufactured by ActiVein Ltd. There is no assurance that
the business acquired will be profitable.
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The accounting policies of the Company are in accordance with accounting
principles generally accepted in the United States of America. Outlined
below are the significant accounting policies:
a) Cash and Cash Equivalents
Cash consists of cash and cash equivalents, which are short-term, highly
liquid investments with original terms to maturity of 90 days or less.
b) Short-Term Investments
Short-term investments include term deposits carried at the lower of
cost or market value. Short term investments are classified as Held to
Maturity.
6
ACTIVEIN INC.
(FORMERLY UNLTD VENTURES INCORPORATED)
Notes to Financial Statements
February 28, 2009 and February 29, 2008
(Amounts expressed in US Dollars)
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont'd)
c) Income taxes
The Company accounts for income taxes in accordance with SFAS No. 109,
"Accounting for Income Taxes". Deferred tax assets and liabilities are
recorded for differences between the financial statement and tax basis
of the assets and liabilities that will result in taxable or
deductible amounts in the future based on enacted tax laws and rates.
Valuation allowances are established when necessary to reduce deferred
tax assets to the amount expected to be realized. Income tax expense
is recorded for the amount of income tax payable or refundable for the
period increased or decreased by the change in deferred tax assets and
liabilities during the period.
d) Revenue Recognition
The Company's revenue recognition policies are expected to follow
common practice in the manufacturing industry whereby sales are
recognized when all of the following criteria are met: (1) persuasive
evidence of an arrangement exists; (2) delivery has occurred or
services have been rendered; (3) the sellers' price to the buyer is
fixed or determinable; and (4) collectibility is reasonably assured.
e) Stock Based Compensation
All awards granted to employees and non-employees after June 30, 2005
will be valued at fair value in accordance with the provisions of SFAS
123 (R) by using the Black-Scholes option pricing model and recognized
on a straight line basis over the service periods of each award. The
Company accounts for equity instruments issued in exchange for the
receipt of goods or services from other than employees in accordance
with SFAS No. 123 and the conclusions reached by the Emerging Issues
Task Force ("EITF") in Issue No. 96-18, "Accounting for Equity
Instruments That Are Issued to Other Than Employees for Acquiring or
in Conjunction with Selling Goods or Services". Costs are measured at
the estimated fair market value of the consideration received or the
estimated fair value of the equity instruments issued, whichever is
more reliably measurable. The value of equity instruments issued for
consideration other than employee services is determined on the
earlier of a performance commitment or completion of performance by
the provider of goods or services as defined by EITF No. 96-18. As of
February 28, 2009 and February 29, 2008, no awards are granted to
employees and non-employees and accordingly, no amount has been
charged as stock based compensation expense.
f) Use of Estimates
Preparation of financial statements in accordance with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the amounts
reported in the financial statements and related notes to financial
statements. These estimates are based on management's best knowledge
of current events and actions the Company may undertake in the future.
Significant estimates relate to accrual for liabilities. Actual
results may ultimately differ from such estimates.
7
ACTIVEIN INC.
(FORMERLY UNLTD VENTURES INCORPORATED)
Notes to Financial Statements
February 28, 2009 and February 29, 2008
(Amounts expressed in US Dollars)
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont'd)
g) Financial Instruments
The carrying amount of the Company's short term investments and loans
and advances approximates fair values because of the short term
maturity of these instruments.
h) Foreign Currency
The Company maintains its books, records and banking transactions in
U.S. dollars which is its functional currency. As such, no translation
adjustment is created.
i) Comprehensive Income
The Company has adopted SFAS No. 130 Reporting Comprehensive Income.
This standard requires companies to disclose comprehensive income in
their financial statements. In addition to items included in net
income, comprehensive income includes items currently charged or
credited directly to stockholders' equity, such as foreign currency
translation adjustments, unrealized gains (loses) on
available-for-sale securities etc.
j) Loss per Share
The Company has adopted FAS No. 128, "Earnings per Share", which
requires disclosure on the financial statements of "basic" and
"diluted" loss per share. Basic loss per share is computed by dividing
net loss by the weighted average number of common shares outstanding
for the year. Diluted loss per share is computed by dividing net loss
by the weighted average number of common shares outstanding plus
common stock equivalents (if dilutive) related to stock options and
warrants for each year. There were no common equivalent shares
outstanding at February 28, 2009 and February 29,2008 that have been
included in dilutive loss per share calculation. At February 28, 2009,
and February 29, 2008 there were Nil options and Nil warrants
outstanding.
k) Segmented information:
The Company operates in one business segment and has one reporting
unit. All of the Company assets and operations are located in Canada.
l) Recent Pronouncements
In December 2007, the FASB issued SFAS No. 141(R), "Business
Combinations". This Statement replaces SFAS No. 141, Business
Combinations. This Statement retains the fundamental requirements in
Statement 141 that the acquisition method of accounting (which
Statement 141 called the purchase method) be
8
ACTIVEIN INC.
(FORMERLY UNLTD VENTURES INCORPORATED)
Notes to Financial Statements
February 28, 2009 and February 29, 2008
(Amounts expressed in US Dollars)
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont'd)
l) Recent Pronouncements - Cont'd
used for all business combinations and for an acquirer to be
identified for each business combination. This Statement also
establishes principles and requirements for how the acquirer: a)
recognizes and measures in its financial statements the identifiable
assets acquired, the liabilities assumed, and any non-controlling
interest in the acquiree; b) recognizes and measures the goodwill
acquired in the business combination or a gain from a bargain purchase
and c) determines what information to disclose to enable users of the
financial statements to evaluate the nature and financial effects of
the business combination. SFAS No. 141(R) will apply prospectively to
business combinations for which the acquisition date is on or after
Company's fiscal year beginning May 1, 2009. The Company is currently
assessing the impact of FAS 141(R).
In December 2007, the FASB issued SFAS No. 160, "Non-controlling
Interests in Consolidated Financial Statements". This Statement amends
ARB 51 to establish accounting and reporting standards for the
non-controlling (minority) interest in a subsidiary and for the
deconsolidation of a subsidiary. It clarifies that a non-controlling
interest in a subsidiary is an ownership interest in the consolidated
entity that should be reported as equity in the consolidated financial
statements. SFAS No. 160 is effective for the Company's fiscal year
beginning May 1, 2009. The Company is currently assessing the impact
of FAS 160.
In March 2008, the FASB issued SFAS No. 161, "Disclosures about
Derivative Instruments and Hedging Activities--an amendment of FASB
Statement No. 133" ("FAS 161"). FAS 161 changes the disclosure
requirements for derivative instruments and hedging activities.
Entities are required to provide enhanced disclosures about (a) how
and why an entity uses derivative instruments, (b) how derivative
instruments and related hedged items are accounted for under Statement
133 and its related interpretations, and (c) how derivative
instruments and related hedged items affect an entity's financial
position, financial performance, and cash flows. The guidance in FAS
161 is effective for financial statements issued for fiscal years and
interim periods beginning after November 15, 2008, with early
application encouraged. This Statement encourages, but does not
require, comparative disclosures for earlier periods at initial
adoption. The Company is currently assessing the impact of FAS 161.
In May 2008, the FASB issued SFAS No. 162, "The Hierarchy of Generally
Accepted Accounting Principles" ("SFAS 162"). SFAS 162 is intended to
improve financial reporting by identifying a consistent framework, or
hierarchy, for selecting accounting principles to be used in preparing
financial statements that are presented in conformity with U.S. GAAP
for nongovernmental entities. SFAS 162 is effective 60 days following
the Securities and Exchange Commission's approval of the Public
Company Accounting
9
ACTIVEIN INC.
(FORMERLY UNLTD VENTURES INCORPORATED)
Notes to Financial Statements
February 28, 2009 and February 29, 2008
(Amounts expressed in US Dollars)
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont'd)
l) Recent Pronouncements - Cont'd
Oversight Board auditing amendments to AU Section 411, "The Meaning of
Present Fairly in Conformity with Generally Accepted Accounting
Principles." The Company does not expect SFAS 162 to have a material
effect on its consolidated financial statements.
In April 2009, the FASB issued FSP FAS 115-2 and FAS 124-2. This FSP
amends SFAS 115, "Accounting for Certain Investments in Debt and
Equity Securities," SFAS 124, "Accounting for Certain Investments Held
by Not-for-Profit Organizations," and EITF Issue No. 99-20,
"Recognition of Interest Income and Impairment on Purchased Beneficial
Interests and Beneficial Interests That Continue to Be Held by a
Transferor in Securitized Financial Assets," to make the
other-than-temporary impairments guidance more operational and to
improve the presentation of other-than-temporary impairments in the
financial statements.. This FSP provides increased disclosure about
the credit and noncredit components of impaired debt securities that
are not expected to be sold and also requires increased and more
frequent disclosures regarding expected cash flows, credit losses, and
an aging of securities with unrealized losses. Although this FSP does
not result in a change in the carrying amount of debt securities, it
does require that the portion of an other-than-temporary impairment
not related to a credit loss for a held-to-maturity security be
recognized in a new category of other comprehensive income and be
amortized over the remaining life of the debt security as an increase
in the carrying value of the security. This FSP shall be effective for
interim and annual periods ending after June 15, 2009, with early
adoption permitted for periods ending after March 15, 2009. The
Company is currently evaluating this new FSP but does not believe that
it will have a significant impact on the determination or reporting of
the financial results.
In April 2009, the FASB issued FSP No. FAS 107-1 and APB 28-1,
"Interim Disclosures about Fair Value of Financial Instruments" ("FSP
FAS 107-1 and APB 28-1"). FSP FAS 107-1 and APB 28-1 require companies
to disclose in interim financial statements the fair value of
financial instruments within the scope of FASB Statement No. 107,
Disclosures about Fair Value of Financial Instruments. The fair-value
information disclosed in the footnotes must be presented together with
the related carrying amount, making it clear whether the fair value
and carrying amount represent assets or liabilities and how the
carrying amount relates to what is reported in the balance sheet. FSP
FAS 107-1 and APB 28-1 also requires that companies disclose the
method or methods and significant assumptions used to estimate the
fair value of financial instruments and a discussion of changes, if
any, in the method or methods and significant assumptions during the
period. The FSP shall be applied prospectively and is effective for
interim and annual periods ending after June 15, 2009, with early
adoption permitted for periods ending after March 15, 2009. The
Company is currently evaluating this new FSP and the impact it will
have on the determination or reporting of the financial results.
In May 2009, the FASB issued SFAS No. 165, "Subsequent Events" ("SFAS
165"). SFAS 165 sets forth the period after the balance sheet date
during which management of a reporting entity should evaluate events
or transactions that may occur for potential recognition or disclosure
in the financial statements, the circumstances under which an entity
should recognize events or transactions occurring after the balance
sheet date in its financial statements, and the disclosures that an
entity should make about events or
10
ACTIVEIN INC.
(FORMERLY UNLTD VENTURES INCORPORATED)
Notes to Financial Statements
February 28, 2009 and February 29, 2008
(Amounts expressed in US Dollars)
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont'd)
l) Recent Pronouncements - Cont'd
transactions that occurred after the balance sheet date. SFAS 165 will
be effective for interim or annual period ending after June 15, 2009
and will be applied prospectively. The Company does not anticipate the
adoption of SFAS 165 will have an impact on its consolidated results
of operations or consolidated financial position.
FAS 166 amends SFAS No. 140 by removing the exemption from
consolidation for Qualifying Special Purpose Entities ("QSPEs"). This
Statement also limits the circumstances in which a financial asset, or
portion of a financial asset, should be derecognized when the
transferor has not transferred the entire original financial asset to
an entity that is not consolidated with the transferor in the
financial statements being presented and/or when the transferor has
continuing involvement with the transferred financial asset. The
Company does not expect the adoption of this standard to have any
material impact on financial statements.
In June 2009, the FASB issued SFAS No. 167, Amendments to FASB
Interpretation No. 46(R), ("SFAS 167") and SFAS No. 166, Accounting
for Transfers of Financial Assets - an amendment of FASB Statement No.
140 ("SFAS 166"). SFAS 167 amends FASB Interpretation 46(R) to
eliminate the quantitative approach previously required for
determining the primary beneficiary of a variable interest entity and
requires ongoing qualitative reassessments of whether an enterprise is
the primary beneficiary of a variable interest entity. The Company
does not expect the adoption of this standard to have a material
impact on the financial statements.
In June 2009, the FASB issued SFAS No. 168, "The FASB accounting
standard codification" and the Hierarchy of Generally Accepted
Accounting Principles ("Codification") which supersedes all existing
accounting standards and will become the single source of
authoritative non -governmental US GAAP. All the accounting literature
not included in the Codification will be considered non-authoritative.
The Codification was implemented on July 1, 2009 and will be effective
for interim and annual periods after September 15, 2009.
4. CAPITAL STOCK
a) Authorized
50,000,000 Common shares, $0.0001 par value
And
1,000,000 Preferred shares, $0.0001 par value
11
ACTIVEIN INC.
(FORMERLY UNLTD VENTURES INCORPORATED)
Notes to Financial Statements
February 28, 2009 and February 29, 2008
(Amounts expressed in US Dollars)
4. CAPITAL STOCK -Cont'd
b) Issued:
Year ended February 29, 2008
----------------------------
i) The Company received $250, being subscription for common shares
from a director of the Company at $0.0001 per share and allotted
2,500,000 common shares.
ii) The Company received $250, being subscription for common shares
from a director of the Company at $0.0001 per share and allotted
2,500,000 common shares.
iii) The Company received $50, being subscription common shares from
an officer of the Company at $0.0001 per share and allotted
500,000 common shares.
iv) The Company received $428,710, being subscription for common
shares from non-related Investors at $0.15 per share and allotted
2,858,067 common shares.
Year ended February 28, 2009
----------------------------
The Company did not receive any subscription for shares during the
year ended February 28, 2009.
c) Purchase Warrants
The Company did not issue any warrants during the years ended February
28, 2009 and February 29, 2008.
5. RELATED PARTY TRANSACTIONS
Year ended February 29, 2008
----------------------------
i) The Company received $250, being subscription for common shares
from a director of the Company at $0.0001 per share and allotted
2,500,000 common shares.
ii) The Company received $250, being subscription for common shares
from a director of the Company at $0.0001 per share and allotted
2,500,000 common shares.
iii) The Company received $50, being subscription for common shares
from an officer of the Company at $0.0001 per share and allotted
500,000 common shares.
Year ended February 28, 2009
----------------------------
There was no related party transactions during the year ended February
28, 2009.
6. INCOME TAXES
The Company has certain non-capital losses of approximately $33,582
available, which can be applied against future taxable income and
which expires as follows:
12
ACTIVEIN INC.
(FORMERLY UNLTD VENTURES INCORPORATED)
Notes to Financial Statements
February 28, 2009 and February 29, 2008
(Amounts expressed in US Dollars)
6. INCOME TAXES-Cont'd
2027 $ 7,384
2028 $26,198
Reconciliation of statutory tax rate to the effective income tax rate:
Federal statutory income tax rate (30.0)%
Deferred tax asset valuation allowance (30.0)%
--------
Effective rate (0.0)%
Deferred tax asset components as of February 29, 2009 are as follows:
Operating losses available to offset future income-taxes $33,582
-------
Expected Income tax recovery at statutory rate of 30% $(10,075)
Valuation Allowance $ 10,075
----------
Net deferred tax assets -
----------
As the company has not commenced any operations, it has provided a 100
per cent valuation allowance on the net deferred tax asset as of
February 28, 2009 and February 29, 2008.
7. COMMITMENTS
The Company is committed to issue 750,000 common shares as finder's
fee after the conclusion of the agreement with ActiVein Ltd. an
Israeli corporation (refer to subsequent event note 10)
8. SEGMENT DISCLOSURES
The Company, after reviewing its reporting systems, has determined
that it has one geographic segment. All assets of the business are
located in Canada.
9. LOANS AND ADVANCES
The Company advanced $50,000 to Activein Ltd an Israeli Corporation
free of interest to facilitate the conclusion of the share exchange
agreement.
13
ACTIVEIN INC.
(FORMERLY UNLTD VENTURES INCORPORATED)
Notes to Financial Statements
February 28, 2009 and February 29, 2008
(Amounts expressed in US Dollars)
10. SUBSEQUENT EVENTS
Subsequent events have been evaluated up to October 20, 2009
Share exchange agreement:
In March 2009 ActiVein Inc. acquired ActiVein Ltd., an Israeli
corporation. In exchange of all issued and outstanding shares of
ActiVein Ltd., the shareholders of the Company received 4,800,190
shares of ActiVein Inc common stock, In addition, 3,770,935 shares of
Series A Preferred stock, and a warrant which allows the holder to
purchase an additional 428,768 Series A preferred shares. The exchange
resulted in the ActiVein Ltd. becoming a wholly owned subsidiary of
ActiVein Inc. The acquisition is accounted for as a reverse merger
(recapitalization) with ActiVein Ltd. deemed to be the accounting
acquirer, and ActiVein Inc. the legal acquirer. 1,006,106 common
shares were reserved as an option pool. ActiVein Ltd. is developing a
novel intravenous catheter which will reduce the number of times a
hospital patient is stuck with a needle to withdraw blood samples. An
intravenous (IV) catheter, used to deliver fluids to the patient, is
normally inserted into at least one vein of a patient during
hospitalization. For various reasons, blood samples cannot be
withdrawn through the same catheter. As a result, during a hospital
stay a patient may be subjected to numerous needle sticks which are
required to obtain blood samples for laboratory tests. ActiVein's
dual-action catheter is designed to replace the standard conventional
"hospital IV line" by enabling both fluid infusion and blood
withdrawal using a single vein over an entire hospitalization period.
Additional issue of shares:
On March 12, 2009 the Company issued 750,000 Common shares as finder's
fees in connection with the acquisition of Activein Ltd.
14
ACTIVEIN LTD.
(A Development Stage Enterprise)
FINANCIAL STATEMENTS
YEARS ENDED FEBRUARY 28, 2009 AND FEBRUARY 29, 2008
Together with Report of Independent Registered Public Accounting Firm
(Amounts expressed in US Dollars)
ACTIVEIN LTD.
(A Development Stage Enterprise)
FINANCIAL STATEMENTS
YEARS ENDED FEBRUARY 28, 2009 AND FEBRUARY 29, 2008
(Amounts expressed in US Dollars)
TABLE OF CONTENTS
Page No
Report of Independent Registered Public Accounting Firm 1
Balance Sheets as at February 28, 2009 and February 29, 2008 2
Statements of Operations for the years ended February 28, 2009
and February 29, 2008 and period from Incorporation to
February 28, 2009 3
Statements of Cash Flows for the years ended February 28, 2009
and February 29, 2008 and period from Incorporation to
February 28, 2009 4
Statements of Changes in Stockholders' Deficiency from
Incorporation to February 28, 2009. 5
Notes to Financial Statements 6-20
Schwartz Levitsky Feldman llp
CHARTERED ACCOUNTANTS
LICENSED PUBLIC ACCOUNTANTS
TORONTO o MONTREAL
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Stockholders of
Activein Ltd.
We have audited the accompanying balance sheets of Activein Ltd. (A Development
Stage Company incorporated in Israel) as of February 28, 2009 and February 29,
2008 and the related statements of operations, changes in stockholders'
deficiency and cash flows for the years then ended and for the period from
incorporation to February 28, 2009. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits 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
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits 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 Activein Ltd. as of February
28, 2009 and February 29, 2008, the results of its operations and its cash flows
for the years then ended and for the period from incorporation to February 28,
2009 in accordance with generally accepted accounting principles in the United
States of America.
The company is not required to have, nor were we engaged to perform, an audit of
its internal control over financial reporting. Our audit 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 controls
over financial reporting. Accordingly, we express no such opinion.
The accompanying consolidated financial statements have been prepared assuming
that the Company will continue as a going concern. As discussed in note 2 to the
financial statements, the company has not generated revenue since its
incorporation, has incurred losses in developing its business, and further
losses were anticipated and has a working capital deficiency. The company
requires additional funds to meet its obligations and the costs of its
operations. These factors raise substantial doubt about its ability to continue
as a going concern. Management's plans regarding those matters are also
described in note 3. The financial statements do not include any adjustments
that might result from the outcome of this uncertainty.
"SCHWARTZ LEVITSKY FELDMAN LLP"
Toronto, Ontario, Canada Chartered Accountants
October 27, 2009 Licensed Public Accountants
1167 Caledonia Road
Toronto, Ontario M6A 2X1
Tel: 416 785 5353
Fax: 416 785 5663
ACTIVEIN LTD.
(A Development Stage Enterprise)
Balance Sheets
As at February 28, 2009 and February 29, 2008
(Amounts expressed in US Dollars)
2009 2008
ASSETS $ $
CURRENT
Prepaid and other receivables 1,855 4,671
----------- -----------
Total Current Assets 1,855 4,671
Plant and Equipment (note 5) 2,844 5,940
----------- -----------
TOTAL ASSETS 4,699 10,611
----------- -----------
LIABILITIES
CURRENT LIABILITIES
Bank overdraft 10,039 5,804
Accounts payable and accrued liabilities (note 6) 60,102 54,579
Loans and advances (note 11) 50,000 -
----------- -----------
Total Current Liabilities 120,141 60,383
Going Concern (note 2)
Incubator Agreement (note 9)
Subsequent Events (note 12)
Related Party Transactions (note 7)
STOCKHOLDERS' DEFICIENCY
Capital Stock (note 4):
Common shares, $0.0025 (NIS 0.01) par value:
992,076 shares authorized; 9,057 shares
outstanding in 2009 and 2008 22 22
Preference shares, Series `A', $0.0025 (NIS 0.01)
par value: 7,924 shares authorized; 7,115 and 4,579
shares outstanding in 2009 and 2008 18 11
Additional Paid-In Capital 561,558 381,574
Deferred stock compensation - (22,432)
Accumulated Other Comprehensive Income 50,027 5,865
Deficit accumulated during the development stage (727,067) (414,812)
----------- -----------
Total Stockholders' Deficiency (115,442) 49,772)
----------- -----------
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIENCY 4,699 10,611
=========== ===========
The accompanying notes are an integral part of these financial statements.
2
ACTIVEIN LTD.
(A Development Stage Enterprise)
Statements of Operations
Years Ended February 28, 2009 and February 29, 2008 and period from
Incorporation to February 28, 2009.
(Amounts expressed in US Dollars)
For the year For the year
Cumulative ended ended
since February 28, February 29,
inception 2009 2008
---------- ------------ ------------
$ $ $
OPERATING EXPENSES
Research and product development 540,193 221,476 250,636
General and administration 181,436 88,120 64,457
Amortization 5,438 2,659 2,343
----------- ----------- -----------
TOTAL OPERATING EXPENSES 727,067 312,255 317,436
----------- ----------- -----------
LOSS BEFORE INCOME TAXES (727,067) (312,255) (317,436)
Income taxes (note 8) - - -
----------- ----------- -----------
NET LOSS (727,067) (312,255) (317,436)
=========== =========== ===========
Loss per share - basic and diluted (36.48) (35.05)
=========== ===========
Weighted average common shares outstanding 9,057 9,057
=========== ===========
The accompanying notes are an integral part of these financial statements.
3
ACTIVEIN LTD.
(A Development Stage Enterprise)
Statement of Cash Flows
Years Ended February 28, 2009 and February 29, 2008 and period from
Incorporation to February 28, 2009
(Amounts expressed in US Dollars)
Cumulative For the Year For the Year
Since ended ended
Incorporation Feb 28, 2009 Feb 29, 2008
------------- ------------ ------------
$ $ $
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss for the year (727,067) (312,255) (317,436)
Items not requiring an outlay of cash:
Amortization of plant and equipment 5,438 2,659 2,343
Compensation expense on issue of warrants 57,875 22,432 25,797
Fair value of interest on interest
free loan received 670 670 -
Changes in non-cash working capital:
Prepaid and other receivables (1,855) 2,209 2,958
Accounts payable and accrued liabilities 60,102 12,618 4,578
------------- ------------ ------------
NET CASH USED IN OPERATING ACTIVITIES (604,837) (271,667) (281,760)
------------- ------------ ------------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of plant and equipment (7,974) - (1,364)
------------- ------------ ------------
NET CASH USED IN INVESTING ACTIVITIES (7,974) - (1,364)
------------- ------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of equity shares 22 - -
Proceeds from issuance of preference 503,031 179,321 263,819
shares
Loans and advances 50,000 50,000
Bank overdraft 10,039 4,235 5,804
------------- ------------ ------------
NET CASH PROVIDED BY FINANCING 563,092 233,556 269,623
ACTIVITIES ------------- ------------ ------------
EFFECT OF FOREIGN CURRENCY EXCHANGE
RATE CHANGES 49,719 38,111 10,945
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS FOR THE YEAR - - (2,556)
Cash and cash equivalents, beginning - - 2,556
of year
CASH AND CASH EQUIVALENTS END OF YEAR - - -
------------- ------------ ------------
INCOME TAXES PAID - - -
INTEREST PAID - - -
The accompanying notes are an integral part of these financial statements.
4
ACTIVEIN LTD.
(A Development Stage Enterprise)
Statement of Changes in Stockholders' Equity (Deficiency)
From Incorporation to February 28, 2009
(Amounts expressed in US Dollars)
Deficit
accumu- Accumu-
Common Stock Preference Stock lated lated Total
------------------- ------------------- Deferred during Other Stock- Compre-
Additional stock the devel- Compre- holders' hensive
Number Number Paid in compen- opment hensive Equity Income
of Shares Amount of Shares Amount Capital sation Stage Income (Deficiency) (Loss)
--------- ------ --------- ------ ---------- -------- --------- ------ ------------ --------
$ $ $ $ $ $ $ $
Common shares
issued at par on
incorporation 9,057 22 22
Issue of Preference
A shares for cash 847 2 59,889 59,891
Fair value of
warrants issued
for services 57,875 (57,875) -
Amortization of
deferred stock
compensation 9,646 9,646
Foreign currency
translation 105 105 105
Net loss (97,376) (97,376) (97,376)
--------- ------ --------- ------ ---------- -------- --------- ------ ------------ --------
Balance February
28, 2007 9,057 22 847 2 117,764 (48,229) (97,376) 105 (27,712) (97,271)
Issue of Preference
A shares for cash 3,732 9 263,810 263,819
Amortization of
deferred stock
compensation 25,797 25,797
Foreign currency
translation 5,760 5,760 5,760
Net loss (317,436) (317,436) (317,436)
--------- ------ --------- ------ ---------- -------- --------- ------ ------------ --------
Balance February
29, 2008 9,057 22 4,579 11 381,574 (22,432) (414,812) 5,865 (49,772) (311,676)
Issue of Preference
A shares for cash 2,536 7 179,314 179,321
Amortization of
deferred stock
compensation 22,432 22,432
Fair value of
interest on
interest free
loan received 670 670
Foreign currency
translation 44,162 44,162 44,162
Net loss (312,255) (312,255) (312,255)
--------- ------ --------- ------ ---------- -------- --------- ------ ------------ --------
Balance February
28, 2009 9,057 22 7,115 18 561,558 0 (727,067) 50,027 (115,442) (268,093)
The accompanying notes are an integral part of these financial statements.
5
ACTIVEIN LTD.
(A Development Stage Enterprise)
Notes to Financial Statements
February 28, 2009 and February 29, 2008
(Amounts expressed in US Dollars)
1. BASIS OF PRESENTATION
The Company was incorporated under the laws of Israel in November 2005 by a
group of entrepreneurs and physicians with a goal of developing a new
innovative intravenous (IV) technology that will revolutionize the way
blood is retrieved from patients in the hospital and or long-term care
settings. The Company embarked on developing a dual-action IV catheter that
can enable both fluid infusion and blood withdrawal, thus eliminating the
need for additional venipunctures after the first insertion of the IV
catheter; the result is an improvement of patient comfort, healthcare
efficiency and healthcare safety. The Company is developing a novel
intravenous catheter which will reduce the number of times a hospital
patient is stuck with a needle to withdraw blood samples. An IV catheter,
used to deliver fluids to the patient, is normally inserted into at least
one vein of a patient during hospitalization. For various reasons, blood
samples cannot be withdrawn through the same catheter. As a result, during
a hospital stay a patient may be subjected to numerous needle sticks which
are required to obtain blood samples for laboratory tests. ActiVein's
dual-action catheter is designed to replace the standard conventional
"hospital IV line" by enabling both fluid infusion and blood withdrawal
using a single vein over an entire hospitalization period.
2. NATURE OF OPERATIONS AND GOING CONCERN
The company has finalized, subsequent to the year end, an agreement for
exchange of common stock with ActiVein Inc, a State of Delaware, USA based
Company.
The Company has no source for operating revenue and expects to incur
significant expenses before establishing operating revenue which raises
substantial doubt as to the Company's ability to continue as a going
concern. The Company's future success, is dependent upon its ability to
raise sufficient capital which will be required in the development and the
marketability of the products which are being developed by the Company.
There is no assurance that funds will be available or the Company will be
profitable. The accompanying financial statements do not reflect any
adjustments that may result if the Company is unable to continue as a going
concern.
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The accounting policies of the Company are in accordance with accounting
principles generally accepted in the United States of America. Outlined
below are the significant accounting policies:
a) Cash and Cash Equivalents
Cash consists of cash and cash equivalents, which are short-term, highly
liquid investments with original terms to maturity of 90 days or less.
6
ACTIVEIN LTD.
(A Development Stage Enterprise)
Notes to Financial Statements
February 28, 2009 and February 29, 2008
(Amounts expressed in US Dollars)
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont'd)
b) Income taxes
The Company accounts for income taxes in accordance with SFAS No. 109,
"Accounting for Income Taxes". Deferred tax assets and liabilities are
recorded for differences between the financial statement and tax basis of
the assets and liabilities that will result in taxable or deductible
amounts in the future based on enacted tax laws and rates. Valuation
allowances are established when necessary to reduce deferred tax assets to
the amount expected to be realized.
Income tax expense is recorded for the amount of income tax payable or
refundable for the period increased or decreased by the change in deferred
tax assets and liabilities.
c) Revenue Recognition
The Company's revenue recognition policies are expected to follow common
practice in the manufacturing industry whereby sales are recognized when
all of the following criteria are met: (1) persuasive evidence of an
arrangement exists; (2) delivery has occurred or services have been
rendered; (3) the sellers' price to the buyer is fixed or determinable; and
(4) collectibility is reasonably assured.
d) Stock Based Compensation
All awards granted to employees and non-employees after June 30, 2005 will
be valued at fair value in accordance with the provisions of SFAS 123 (R)
by using the Black-Scholes option pricing model and recognized on a
straight line basis over the service periods of each award. The Company
accounts for equity instruments issued in exchange for the receipt of goods
or services from other than employees in accordance with SFAS No. 123 and
the conclusions reached by the Emerging Issues Task Force ("EITF") in Issue
No. 96-18, "Accounting for Equity Instruments That Are Issued to Other Than
Employees for Acquiring or in Conjunction with Selling Goods or Services".
Costs are measured at the estimated fair market value of the consideration
received or the estimated fair value of the equity instruments issued,
whichever is more reliably measurable. The value of equity instruments
issued for consideration other than employee services is determined on the
earlier of a performance commitment or completion of performance by the
provider of goods or services as defined by EITF No. 96-18. As of February
28, 2009 and February 29, 2008, no awards are granted to employees and
non-employees and accordingly, no amount has been charged as stock based
compensation expense.
7
ACTIVEIN LTD.
(A Development Stage Enterprise)
Notes to Financial Statements
February 28, 2009 and February 29, 2008
(Amounts expressed in US Dollars)
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont'd)
e) Use of Estimates
Preparation of financial statements in accordance with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the amounts
reported in the financial statements and related notes to financial
statements. These estimates are based on management's best knowledge of
current events and actions the Company may undertake in the future.
Significant estimates relate to accruals, valuation allowance for deferred
tax assets, estimating the useful life of its plant and equipment and fair
value of warrants for services. Actual results may ultimately differ from
such estimates.
f) Financial Instruments
The carrying amount of the Company's loans and advances approximates fair
values because of its short term maturity.
Foreign exchange risk: The Company conducts most of its operating
activities in New Israeli Shekel (NIS). The Company is therefore subject to
gains or losses due to fluctuations in NIS currency relative to the US
dollar. The Company does not use derivative instruments to reduce its
exposure to foreign currency risk.
g) Foreign Currency
The Company's functional currency is New Israeli Shekel (NIS), but this
financial statement has been presented in US dollars. The translation
method used is the current rate method where the functional currency is the
foreign currency. Under the current rate method all assets and liabilities
are translated at the current rate, stockholder's equity accounts are
translated at historical rates and revenues and expenses are translated at
average rates for the year. Due to the fact that items in the financial
statements are being translated at different rates according to their
nature, a translation adjustment is created. This translation adjustment
has been included in accumulated other comprehensive income (loss).
h) Comprehensive Income
The Company has adopted SFAS No. 130 Reporting Comprehensive Income. This
standard requires companies to disclose comprehensive income in their
financial statements. In addition to items included in net income,
comprehensive income includes items currently charged or credited directly
to stockholders' equity, such as foreign currency translation adjustments,
unrealized gains (loses) on available-for-sale securities etc.
8
ACTIVEIN LTD.
(A Development Stage Enterprise)
Notes to Financial Statements
February 28, 2009 and February 29, 2008
(Amounts expressed in US Dollars)
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont'd)
i) Research and Product Development
Research and Product Development costs, other than capital expenditures but
including acquired research and product development costs, are charged
against income in the period incurred.
j) Loss per Share
The Company has adopted FAS No. 128, "Earnings per Share", which requires
disclosure on the financial statements of "basic" and "diluted" loss per
share. Basic loss per share is computed by dividing net loss by the
weighted average number of common shares outstanding for the year. Diluted
loss per share is computed by dividing net loss by the weighted average
number of common shares outstanding plus common stock equivalents (if
dilutive) related to stock options and warrants for each year. There were
no common equivalent shares outstanding at February 28, 2009 and February
29, 2008 that have been included in dilutive loss per share calculation. At
February 28, 2009, and February 29, 2008 there were Nil options and 809
warrants outstanding.
k) Intellectual Property with Respect to Patent Applications
The ActIV catheter is based on ActiVein's unique and innovative technology.
ActIV has received patent approval under the name "Vascular Coupling
Device" from the European patent office and was registered in the majority
of countries in Europe. The US patent is pending approval. Expenditures for
patent applications as a result of research activity are not capitalized
due to the uncertain value of the benefits that may accrue.
l) Plant and Equipment
Plant and equipment are recorded at cost less accumulated depreciation.
Depreciation is provided commencing in the month following acquisition
using the following annual rate and method:
Computer equipment 33% declining balance method
Software 33% declining balance method
Lab equipment 10% declining balance method
m) Segmented information:
The Company operates in one business segment and has one reporting unit.
All of the Company assets and operations are located in Israel.
9
ACTIVEIN LTD.
(A Development Stage Enterprise)
Notes to Financial Statements
February 28, 2009 and February 29, 2008
(Amounts expressed in US Dollars)
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont'd)
n) Impairment of long lived assets
In accordance with Statement of Financial Accounting Standards ("SFAS") No.
144, "Accounting for the Impairment or Disposal of Long-Lived Assets",
long-lived assets to be held and used are analyzed for impairment whenever
events or changes in circumstances indicate that the related carrying
amounts may not be recoverable. The Company evaluates at each balance sheet
date whether events and circumstances have occurred that indicate possible
impairment. If there are indications of impairment, the Company uses future
undiscounted cash flows of the related asset or asset grouping over the
remaining life in measuring whether the assets are recoverable. In the
event such cash flows are not expected to be sufficient to recover the
recorded asset values, the assets are written down to their estimated fair
value. Long-lived assets to be disposed of are reported at the lower of
carrying amount or fair value of asset less cost to sell.
o) Valuation of warrants
All warrants granted to employees and non-employees after June 30, 2005 for
services will be valued at fair value by using the Black-Scholes option
pricing model and recognized on a straight line basis over the service
periods of each warrant issued.
p) Recent Pronouncements
In December 2007, the FASB issued SFAS No. 141(R), "Business Combinations".
This Statement replaces SFAS No. 141, Business Combinations.
This Statement retains the fundamental requirements in Statement 141 that
the acquisition method of accounting (which Statement 141 called the
purchase method) be used for all business combinations and for an acquirer
to be identified for each business combination. This Statement also
establishes principles and requirements for how the acquirer: a) recognizes
and measures in its financial statements the identifiable assets acquired,
the liabilities assumed, and any non-controlling interest in the acquiree;
b) recognizes and measures the goodwill acquired in the business
combination or a gain from a bargain purchase and c) determines what
information to disclose to enable users of the financial statements to
evaluate the nature and financial effects of the business combination. SFAS
No. 141(R) will apply prospectively to business combinations for which the
acquisition date is on or after Company's fiscal year beginning May 1,
2009. The Company is currently assessing the impact of FAS 141(R).
10
ACTIVEIN LTD.
(A Development Stage Enterprise)
Notes to Financial Statements
February 28, 2009 and February 29, 2008
(Amounts expressed in US Dollars)
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont'd)
p) Recent Pronouncements (cont'd)
In December 2007, the FASB issued SFAS No. 160, "Non-controlling Interests
in Consolidated Financial Statements". This Statement amends ARB 51 to
establish accounting and reporting standards for the non-controlling
(minority) interest in a subsidiary and for the deconsolidation of a
subsidiary. It clarifies that a non-controlling interest in a subsidiary is
an ownership interest in the consolidated entity that should be reported as
equity in the consolidated financial statements. SFAS No. 160 is effective
for the Company's fiscal year beginning May 1, 2009. The Company is
currently assessing the impact of FAS 160.
In March 2008, the FASB issued SFAS No. 161, "Disclosures about Derivative
Instruments and Hedging Activities--an amendment of FASB Statement No. 133"
("FAS 161"). FAS 161 changes the disclosure requirements for derivative
instruments and hedging activities. Entities are required to provide
enhanced disclosures about (a) how and why an entity uses derivative
instruments, (b) how derivative instruments and related hedged items are
accounted for under Statement 133 and its related interpretations, and (c)
how derivative instruments and related hedged items affect an entity's
financial position, financial performance, and cash flows. The guidance in
FAS 161 is effective for financial statements issued for fiscal years and
interim periods beginning after November 15, 2008, with early application
encouraged. This Statement encourages, but does not require, comparative
disclosures for earlier periods at initial adoption. The Company is
currently assessing the impact of FAS 161.
In May 2008, the FASB issued SFAS No. 162, "The Hierarchy of Generally
Accepted Accounting Principles" ("SFAS 162"). SFAS 162 is intended to
improve financial reporting by identifying a consistent framework, or
hierarchy, for selecting accounting principles to be used in preparing
financial statements that are presented in conformity with U.S. GAAP for
nongovernmental entities. SFAS 162 is effective 60 days following the
Securities and Exchange Commission's approval of the Public Company
Accounting Oversight Board auditing amendments to AU Section 411, "The
Meaning of Present Fairly in Conformity with Generally Accepted Accounting
Principles." The Company does not expect SFAS 162 to have a material effect
on its consolidated financial statements.
In April 2009, the FASB issued FSP FAS 115-2 and FAS 124-2. This FSP amends
SFAS 115, "Accounting for Certain Investments in Debt and Equity
Securities," SFAS 124, "Accounting for Certain Investments Held by
Not-for-Profit Organizations," and EITF Issue No. 99-20, "Recognition of
Interest Income and Impairment on Purchased Beneficial Interests and
Beneficial Interests That Continue to Be Held by a Transferor in
Securitized Financial Assets," to make the other-than-temporary impairments
guidance more operational and to improve the presentation of
other-than-temporary impairments in
11
ACTIVEIN LTD.
(A Development Stage Enterprise)
Notes to Financial Statements
February 28, 2009 and February 29, 2008
(Amounts expressed in US Dollars)
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont'd)
p) Recent Pronouncements (cont'd)
the financial statements. This FSP provides increased disclosure about the
credit and noncredit components of impaired debt securities that are not
expected to be sold and also requires increased and more frequent
disclosures regarding expected cash flows, credit losses, and an aging of
securities with unrealized losses. Although this FSP does not result in a
change in the carrying amount of debt securities, it does require that the
portion of an other-than-temporary impairment not related to a credit loss
for a held-to-maturity security be recognized in a new category of other
comprehensive income and be amortized over the remaining life of the debt
security as an increase in the carrying value of the security. This FSP
shall be effective for interim and annual periods ending after June 15,
2009, with early adoption permitted for periods ending after March 15,
2009. The Company is currently evaluating this new FSP but does not believe
that it will have a significant impact on the determination or reporting of
the financial results.
In April 2009, the FASB issued FSP No. FAS 107-1 and APB 28-1, "Interim
Disclosures about Fair Value of Financial Instruments" ("FSP FAS 107-1 and
APB 28-1"). FSP FAS 107-1 and APB 28-1 require companies to disclose in
interim financial statements the fair value of financial instruments within
the scope of FASB Statement No. 107, Disclosures about Fair Value of
Financial Instruments. The fair-value information disclosed in the
footnotes must be presented together with the related carrying amount,
making it clear whether the fair value and carrying amount represent assets
or liabilities and how the carrying amount relates to what is reported in
the balance sheet. FSP FAS 107-1 and APB 28-1 also requires that companies
disclose the method or methods and significant assumptions used to estimate
the fair value of financial instruments and a discussion of changes, if
any, in the method or methods and significant assumptions during the
period. The FSP shall be applied prospectively and is effective for interim
and annual periods ending after June 15, 2009, with early adoption
permitted for periods ending after March 15, 2009. The Company is currently
evaluating this new FSP and the impact it will have on the determination or
reporting of the financial results.
In May 2009, the FASB issued SFAS No. 165, "Subsequent Events" ("SFAS
165"). SFAS 165 sets forth the period after the balance sheet date during
which management of a reporting entity should evaluate events or
transactions that may occur for potential recognition or disclosure in the
financial statements, the circumstances under which an entity should
recognize events or transactions occurring after the balance sheet date in
its financial statements, and the disclosures that an entity should make
about events or transactions that occurred after the balance sheet date.
SFAS 165 will be effective for interim or annual period ending after June
15, 2009 and will be applied prospectively. The Company does not anticipate
the adoption of SFAS 165 will have an impact on its consolidated results of
operations or consolidated financial position.
12
ACTIVEIN LTD.
(A Development Stage Enterprise)
Notes to Financial Statements
February 28, 2009 and February 29, 2008
(Amounts expressed in US Dollars)
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont'd)
p) Recent Pronouncements (cont'd)
FAS 166 amends SFAS No. 140 by removing the exemption from consolidation
for Qualifying Special Purpose Entities ("QSPEs"). This Statement also
limits the circumstances in which a financial asset, or portion of a
financial asset, should be derecognized when the transferor has not
transferred the entire original financial asset to an entity that is not
consolidated with the transferor in the financial statements being
presented and/or when the transferor has continuing involvement with the
transferred financial asset. The Company does not expect the adoption of
this standard to have any material impact on financial statements.
In June 2009, the FASB issued SFAS No. 167, Amendments to FASB
Interpretation No. 46(R), ("SFAS 167") and SFAS No. 166, Accounting for
Transfers of Financial Assets - an amendment of FASB Statement No. 140
("SFAS 166"). SFAS 167 amends FASB Interpretation 46(R) to eliminate the
quantitative approach previously required for determining the primary
beneficiary of a variable interest entity and requires ongoing qualitative
reassessments of whether an enterprise is the primary beneficiary of a
variable interest entity. The Company does not expect the adoption of this
standard to have a material impact on the financial statements.
In June 2009, the FASB issued SFAS No. 168, "The FASB accounting standard
codification" and the Hierarchy of Generally Accepted Accounting Principles
("Codification") which supersedes all existing accounting standards and
will become the single source of authoritative non -governmental US GAAP.
All the accounting literature not included in the Codification will be
considered non-authoritative. The Codification was implemented on July 1,
2009 and will be effective for interim and annual periods after September
15, 2009.
4. CAPITAL STOCK
a) Authorized
992,076 Common shares, $0.0025 (NIS 0.01) par value
And
7,924 Series `A' Preference shares, $0.0025 (NIS 0.01) par value
13
ACTIVEIN LTD.
(A Development Stage Enterprise)
Notes to Financial Statements
February 28, 2009 and February 29, 2008
(Amounts expressed in US Dollars)
4. CAPITAL STOCK (cont'd)
b) Issued:
9,057 Common shares, $0.0025 (NIS 0.01) par value
7,115 Series `A' Preference shares, $0.0025 (NIS 0.01) par value
Per the articles of the Company, the original issue price of each
Preference A share is US $70.71.
The Preference A Shares confer on the holders thereof all rights accruing
to holders of Ordinary Shares in the Company, and in addition bear the
following rights:
Liquidation Preference.
----------------------
In the event of: (i) any liquidation, dissolution or winding up of the
Company, whether voluntary or involuntary; (ii) any Deemed Liquidation
Event (as defined below), any and all assets of the Company available for
distribution (and, in the case of certain reorganizations, mergers or
consolidations, the securities received by the Company or its shareholders
in such reorganization, merger or consolidation) shall be distributed to
the Shareholders of the Company in the following order and preference:
Primary Distribution.
--------------------
First, prior to the repayment of any shareholders loans and prior and in
preference to any distribution to any of the holders of any other classes
or series of shares of the Company, each holder of Preference A Shares
shall be entitled to receive an amount (in cash, cash equivalents or, if
applicable, securities) for each Preference Share held by it equal to (i)
one time the Original Issue Price of such Preference Share (adjusted for
Recapitalization Events); plus (ii) an 8% annual interest on the Original
Issue Price for such Preference Share, compounded annually from the date of
the issuance of such Preference Share up to the date of distribution; plus
(iii) an amount equal to the declared but unpaid dividends on such
Preference Share (the "Preference Amount"). Such distribution among the
holders of the Preference A Shares shall be made in proportion to the
aggregate respective preferences amounts of the Preference A Shares owned
by each such holder.
After payment in full of the Preference Amounts, all remaining assets, if
any, shall be distributed among all of the Company's Shareholders (holders
of Preference A Shares and Ordinary Shares) pro rata to their holdings in
the Company's issued share capital on an as-converted basis.
14
ACTIVEIN LTD.
(A Development Stage Enterprise)
Notes to Financial Statements
February 28, 2009 and February 29, 2008
(Amounts expressed in US Dollars)
4. CAPITAL STOCK (cont'd)
Dividend Preference. Prior to and in preference to the distribution of any
Dividends to the holders of any class or series of shares of the Company
(including Ordinary Shares), each of the holders of the Preference A Shares
shall be entitled to receive for each Preference Share held by it,
non-cumulative Dividends, as and when Dividends are declared by the Board,
at the rate of 8% (eight percent) of the Original Issue Price (subject to
adjustment for Recapitalization Events) for such Preference Share per
annum, calculated thereon from the respective original issue date of such
share until the date of distribution of such Dividends. After the dividend
preference of the Preference A Shares has been paid in full for a given
calendar year, the Preference A Shares shall participate pro rata with the
Ordinary Shares in the receipt of any additional Dividends distributed, pro
rata and pari passu amongst the holders of the Preference A Shares and the
Ordinary Shares in accordance with their respective shareholdings in the
Company on an as converted basis.
Conversion. The holders of the Preference A Shares shall have conversion
rights as follows (the "Conversion Rights"):
Right to Convert. Each Preference Share shall be convertible, at the option
of the holder of such share, at any time after the date of issuance of such
share, into such number of fully paid and non assessable Ordinary Shares of
the Company as is determined by dividing the applicable Original Issue
Price for such share by the Conversion Price at the time in effect for such
share. The initial Conversion Price per Preference Share shall be the
Original Issue Price for such share.
Automatic Conversion. Notwithstanding anything to the contrary herein, each
series of Preference A Shares shall automatically be converted into fully
paid and non assessable Ordinary Shares by dividing the applicable Original
Issue Price by the Conversion Price at the time in effect for such
Preference A Shares, immediately: (i) prior to the closing of an offering
by the Company of its securities to the public in a bona fide underwriting
pursuant to a registration statement under the U.S. Securities Act of 1933,
as amended, the Israeli Securities Law - 1968, or similar securities law of
another jurisdiction, with gross offering proceeds to the Company of not
less than $15,000,000, which yields an imputed pre-money company valuation
of at least $50,000,000 on a fully diluted basis (the "Qualified IPO"); or
(ii) upon written demand of the holders (on an as converted basis) of at
least 51% of the then outstanding Preference A Shares.
Year ended February 29, 2008
----------------------------
The Company received $263,819 (NIS 1,089,910), being subscription for 3,732
series `A' preference shares at $70.71 per preference share from Xenia
Venture Capital Ltd. and allotted 3,732 series `A' preference shares.
15
ACTIVEIN LTD.
(A Development Stage Enterprise)
Notes to Financial Statements
February 28, 2009 and February 29, 2008
(Amounts expressed in US Dollars)
4. CAPITAL STOCK (cont'd)
Year ended February 28, 2009
----------------------------
The Company received $179,321 (NIS 764,898), being subscription for 2,536
series `A' preference shares at $70.71 per preference share from Xenia
Venture Capital Ltd. and allotted 2,536 series `A' preference shares.
c) Purchase Warrants
The Company did not issue any warrants during the years ended February 28,
2009 and February 29, 2008. However during the period ended February 28,
2007 the Company issued 809 warrants to Xenia Venture Capital Ltd ("Xenia")
in accordance with the Incubator agreement dated October 19, 2006. These
warrants entitled the holder to acquire 809 series `A' preference shares at
$0.0025 (NIS 0.01) per preference share. The Company determined the fair
value of these warrants using the Black Scholes method of valuation at
$57,875 and amortized the compensation cost over a period of 2 years for
management services provided by Xenia commencing November 2006. The
Black-Scholes option pricing model requires the use of certain assumptions,
including expected terms, expected volatility, expected dividends and
risk-free interest rate to calculate the fair value of stock-based payment
awards. As the Company is new and had no data for historic volatility, the
estimated volatility was determined by comparing the volatility of similar
Companies within the industry sector. The assumptions used are risk free
rate 2.95%; volatility factor 100%; expected dividends 0% and forfeiture
rate 0%.
Number of Exercise Expiry
Warrants Granted Prices Date *
---------------- -------- -------
Outstanding at February
28, 2007 and average
exercise price 809 $0.0025
Granted in year 2008 - -
Exercised in year 2008 - -
Forfeited in year 2008 - -
Cancelled in year 2008 - -
-------- -----------
Outstanding at February 29, 2008
and average exercise price 809 $0.0025
Granted in year 2009 - -
Exercised in year 2009 - -
Forfeited in year 2009 - -
Cancelled in year 2009 - -
-------- -----------
Outstanding at February 28, 2009
and average exercise price 809 0.0025
Exercisable at February 28, 2009 809 0.0025
Exercisable at February 29, 2008 809 0.0025
16
ACTIVEIN LTD.
(A Development Stage Enterprise)
Notes to Financial Statements
February 28, 2009 and February 29, 2008
(Amounts expressed in US Dollars)
4. CAPITAL STOCK (cont'd)
* The warrants may be exercised by the Holder at any time during the period
commencing with the date of the grant of the warrant and expiring upon the
consummation of the earlier of the following events: (i) the Company's
initial public offering of its shares, reflecting a pre-money valuation of
the Company of at least 50 million dollars with net proceeds to the Company
of not less than 15 million dollars; ("QIPO") (ii) a merger or
consolidation of the Company with or into another Company, and (iii) the
sale of all or substantially all of the Company's properties and assets or
the sale of all or substantially all of the Company's shares to another
party (each of the events in (ii) and (iii) an "M&A") (the "Exercise
Period") provided, however, that the Company shall provide written notice
to the Holder of an intended QIPO or M&A. The warrant may be exercised by
the holder in whole or in part, by delivering to the Company (a) this
warrant certificate, (b) an amount equal to the Exercise price multiplied
by the number of Warrant shares for which this warrant is being exercised
(the "Purchase Price"), and (c) the Notice of Exercise is duly completed
and executed by the Holder.
5. PLANT AND EQUIPMENT
Feb 28, 2009 Feb 29, 2008
$ $
------------ ------------
Cost
----
Computer Equipment 1,616 1,858
Softwares 5,277 6,065
Lab Equipment 981 1,127
--------- ---------
7,874 9,050
Less: Accumulated Depreciation (5,030) (3,110)
Net carrying amount $ 2,844 $ 5,940
--------- =--------
6. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES
Feb 28, 2009 Feb 29, 2008
------------ ------------
Accounts payable and accrued liabilities
are comprised of the following:
Trade payables 22,430 18,349
Accounts payable 19,042 24,695
Due to Xenia Venture Capital 4,462 4,640
Due to the CEO 10,392 3,875
Accrued Liabilities-Severance 3,776 3,020
---------- ---------
60,102 54,579
========== =========
17
ACTIVEIN LTD.
(A Development Stage Enterprise)
Notes to Financial Statements
February 28, 2009 and February 29, 2008
(Amounts expressed in US Dollars)
7. RELATED PARTY TRANSACTIONS
Year ended February 29, 2008
----------------------------
The Company received $263,819 (NIS 1,089,910), being subscription for 3,732
series `A' preference shares at $70.71 per preference share from Xenia
Venture Capital Ltd., a Company related through common directors, and
allotted 3,732 series `A' preference shares.
The Company expensed $25,797 being the amortization of deferred stock
compensation relating to the issue of warrants to Xenia Venture Capital
Ltd., a Company related through common directors for management services.
The Company expensed $ 71,266 (NIS 286,309) being compensation expense for
the CEO of the Company.
Year ended February 28, 2009
----------------------------
The Company received $179,321 (NIS 764,898), being subscription for 2,536
series `A' preference shares at $70.71 per preference share from Xenia
Venture Capital Ltd., a Company related through common directors, and
allotted 2,536 series `A' preference shares.
The Company expensed $22,432 being the amortization of deferred stock
compensation relating to the issue of warrants to Xenia Venture Capital
Ltd., a Company related through common directors for management services.
The Company expensed $ 54,116 (NIS 196,852) being compensation expense for
the CEO of the Company.
8. INCOME TAXES
The Company has certain non-capital losses of approximately $668,522 (2009:
$289,823; 2008: $291,640; 2007: $87,059) available, which can be applied
against future taxable income and according to the tax laws in Israel,
these losses can be carried forward indefinitely until absorbed.
18
ACTIVEIN LTD.
(A Development Stage Enterprise)
Notes to Financial Statements
February 28, 2009 and February 29, 2008
(Amounts expressed in US Dollars)
8. INCOME TAXES (Cont'd)
The Company's current and deferred income taxes are as follows:
2009 2008
----- ----
Loss before income taxes $(312,255) $(317,436)
---------- ----------
Expected income tax recovery at the
statutory rates of 26% (2008 - 27%) $ (81,186) $ (85,708)
Increase in income taxes resulting from:
Permanent differences 5,832 6,965
Valuation allowance 75,354 78,743
----------- ----------
Provision for income taxes $ - $ -
=========== ==========
The Company has deferred income tax assets as follows:
2009 2008
----- ----
Net operating loss carry forward $ 668,522 $ 378,699
Deferred Income tax on loss carry forward 173,816 102,249
Valuation allowance for deferred income
tax assets $(173,816) $(102,249)
---------- ----------
- -
---------- ----------
As the company has not commenced any operations, it has provided a 100 per
cent valuation allowance on the net deferred tax asset as of February 28,
2009 and February 29, 2008.
9. INCUBATOR AGREEMENT
The Incubator and founders agreement was made on October 16, 2006 between
Xenia Venture Capital Ltd, ("Incubator") and founders and Initial
shareholders and the Company. The founders declared that they had
independently discovered, conceived and developed the concept and /or idea
and/or invention required for the development of the Product and wished to
transfer the concept and /or idea and /or invention required for the
development of the Product to the Company.
19
ACTIVEIN LTD.
(A Development Stage Enterprise)
Notes to Financial Statements
February 28, 2009 and February 29, 2008
(Amounts expressed in US Dollars)
9. INCUBATOR AGREEMENT (cont'd)
The Incubator is entitled to a State-Incubator-Loan (a loan approved by the
Incubators' Administration to be provided by the State to the Incubator in
the sum of NIS 1,680,000 for the performance of the project). The Company
issued to the Incubator 7,115 Series A Preference shares of $0.0025 (NIS
0.01) par value invested by the Incubator at $70.71 per Preference share as
against the State-Incubator-Loan and the supplementary financing. In
addition, the Company issued to the Incubator a warrant to purchase 809
Preferred A Shares which is exercisable at $0.0025 (NIS 0.01) par value for
services to be provided by the Incubator to the Company over a period of
two years.
10. SEGMENT DISCLOSURES
The Company, after reviewing its reporting systems, has determined that it
has one geographic segment. All assets of the business are located in
Israel.
11. LOANS AND ADVANCES
The Company received an advance of $50,000 from Activein Inc. a State of
Delaware, USA based Company free of interest with no security, no repayment
terms and non interest bearing to facilitate the conclusion of the share
exchange agreement. The Company has credited additional paid in capital
with the fair value of interest calculated at 8% pa.
12. SUBSEQUENT EVENTS
Subsequent events have been evaluated up to October 20, 2009.
Share exchange agreement:
In March 2009 the Company was acquired by ActiVein Inc., a State of
Delaware, USA based Company. In exchange of all issued and outstanding
shares of the Company, the shareholders of the Company received 4,800,190
shares of ActiVein Inc common stock, In addition, 3,770,935 shares of
Series A Preferred stock, and a warrant which allows the holder to purchase
an additional 428,768 Series A preferred shares. The exchange resulted in
the Company becoming a wholly owned subsidiary of ActiVein Inc. The
acquisition is accounted for as a reverse merger (recapitalization) with
the Company deemed to be the accounting acquirer, and ActiVein Inc. the
legal acquirer. 1,006,106 common shares were reserved as an option pool
20
ACTIVEIN INC.
(FORMERLY UNLTD VENTURES INCORPORATED)
(A Development Stage Enterprise)
INTERIM CONSOLIDATED FINANCIAL STATEMENTS
NOVEMBER 30, 2009
(Amounts expressed in US Dollars)
(Unaudited-Prepared by Management)
ACTIVEIN INC.
(FORMERLY UNLTD VENTURES INCORPORATED)
(A Development Stage Enterprise)
INTERIM CONSOLIDATED FINANCIAL STATEMENTS
NOVEMBER 30, 2009
(Amounts expressed in US Dollars)
(Unaudited-Prepared by Management)
TABLE OF CONTENTS
Page No
Interim Consolidated Balance Sheets as at November 30, 2009
(unaudited) and February 28, 2009 (audited) 1
Interim Consolidated Statements of Operations for the nine
months and three months ended November 30, 2009 and
November 30, 2008 and for the period from inception
to November 30, 2009 2
Interim Consolidated Statements of Cash Flows for the nine
months ended November 30, 2009 and November 30, 2008 and for
the period from inception to November 30, 2009. 3
Interim Consolidated Statements of changes in Stockholders'
Deficiency for the nine months ended November 30, 2009 and
for the period from Inception to November 30, 2009 4
Condensed Notes to Interim Consolidated Financial Statements 5-9
ACTIVEIN INC.
(FORMERLY UNLTD VENTURES INCORPORATED)
(A Development Stage Enterprise)
Interim Consolidated Balance Sheets as at
November 30, 2009 and February 28, 2009
(Amounts expressed in US Dollars)
November 30, February 28,
2009 2009
---------- ----------
(unaudited) (audited)
ASSETS $ $
CURRENT ASSETS
Cash 49,803 -
Prepaid and other receivables 1,484 1,855
---------- ----------
Total Current Assets 51,287 1,855
Plant and Equipment (note 6) 2,742 2,844
---------- ----------
TOTAL ASSETS 54,029 4,699
---------- ----------
LIABILITIES
CURRENT LIABILITIES
Accounts payable and accrued liabilities 119,526 60,102
Bank overdraft - 10,039
Loans and advances - 50,000
---------- ----------
Total Current Liabilities 119,526 120,141
---------- ----------
Going Concern (note 2)
Related Party Transactions (note 5)
STOCKHOLDERS' DEFICIENCY
Capital Stock (Note 4)
Preference shares Series `A', $0.001 par value,
4,200,000 shares authorized, 3,770,935
outstanding 3,771 18
Common shares, $0.0001 par value: 50,000,000
shares authorized, 13,908,257 shares outstanding 1,391 22
Additional Paid-In Capital
952,114 561,558
Accumulated Other Comprehensive Income 33,625 50,027
Accumulated Deficit (1,056,398) (727,067)
---------- ----------
Total Stockholders' Deficiency (65,497) (115,442)
---------- ----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
(DEFICIENCY) 54,029 4,699
---------- ----------
The accompanying condensed notes are an integral part of these unaudited interim
consolidated financial statements.
1
ACTIVEIN INC.
(FORMERLY UNLTD VENTURES INCORPORATED)
(A Development Stage Enterprise)
Interim Consolidated Statements of Operations
For the periods from Inception to November 30, 2009 and the
nine months and three months ended November 30, 2009 and November 30, 2008
(Amounts expressed in US Dollars) (Unaudited - Prepared by Management)
For the For the For the For the
nine months nine months three months three months
Cumulative ended ended ended ended
since November 30, November 30, November 30, November 30,
inception 2009 2008 2009 2008
---------- ------------ ------------ ------------ ------------
$ $ $ $ $
Operating Expenses
General and administration 352,308 170,871 75,857 48,494 18,751
Research and development 696,714 156,522 165,941 29,299 42,581
Amortization 7,376 1,938 2,052 699 650
------------ ------------ ------------ ------------ ------------
Total Operating Expenses 1,056,398 329,331 243,850 78,492 61,982
------------ ------------ ------------ ------------ ------------
Loss before Income tax (1,056,398) (329,331) (243,850) (78,492) (61,982)
Provision for income taxes - - - - -
Net Loss (1,056,398) (329,331) (243,850) (78,492) (61,982)
Loss per share-Basic
and Diluted (0.02) (0.05) (0.01) (0.01)
============ ============ ============ ============
Weighted Average Common
Shares Outstanding 13,543,934 4,800,190 13,908,257 4,800,190
============ ============ ============ ============
The accompanying condensed notes are an integral part of these unaudited interim
consolidated financial statements
2
ACTIVEIN INC.
(FORMERLY UNLTD VENTURES INCORPORATED)
(A Development Stage Enterprise)
Interim Consolidated Statements of Cash Flows
For the periods from inception to November 30, 2009
and the nine months ended November 30, 2009 and November 30, 2008
(Amounts expressed in US Dollars)
(Unaudited - Prepared by Management)
Cumulative
Since November 30, November 30,
Inception 2009 2008
---------- ------------ ------------
Cash Flows from Operating Activities
Net Loss (1,056,398) (329,331) (243,850)
Items not requiring an outlay of cash:
Amortization of plant and equipment 7,376 1,938 2,052
Compensation expense on issue of
warrants 57,875 - 22,970
Fair value of interest on interest
free loan received 670 - -
Changes in non-cash working capital
Prepaid and other receivables (1,484) 371 1,815
Accounts payable and accrued
liabilities 119,526 59,424 (3,234)
------------ ------------ ------------
Net cash used in operating
activities (872,435) (267,598) (220,247)
------------ ------------ ------------
Cash Flows from Investing Activities
Purchase of plant and equipment (9,594) (1,836) -
------------ ------------ ------------
Net cash used in investing
activities (9,594) (1,836) -
------------ ------------ ------------
Cash Flows from Financing Activities
Proceeds from issuance of common
shares 395,700 395,678 -
Proceeds from issuance of
preference shares 503,031 179,319
Loans and advances - (50,000) -
Bank overdraft - (10,039) (5,804)
------------ ------------ ------------
Net cash provided by financing
activities 898,731 335,639 173,515
------------ ------------ ------------
Effect of foreign currency exchange
rate changes 33,101 (16,402) 46,850
------------ ------------ ------------
Net increase (decrease) in Cash and
Cash equivalents 49,803 49,803 118
Cash- beginning of period - - -
------------ ------------ ------------
Cash - end of period 49,803 49,803 118
============ ============ ============
Supplemental Cash Flow Information
Interest paid - - -
============ ============ ============
Income taxes paid - - -
------------ ------------ ------------
The accompanying condensed notes are an integral part of these unaudited interim
consolidated financial statements
3
ACTIVEIN INC.
(FORMERLY UNLTD VENTURES INCORPORATED)
(A Development Stage Enterprise)
Consolidated Statements of Changes in Stockholders' Deficiency
from inception to November 30, 2009
(Amounts expressed in US Dollars)
Deficit
accumu- Accumu-
Common Stock Preference Stock lated lated Total
------------------- ------------------- Deferred during Other Stock- Compre-
Additional stock the devel- Compre- holders' hensive
Number Number Paid in compen- opment hensive Equity Income
of Shares Amount of Shares Amount Capital sation Stage Income (Deficiency) (Loss)
--------- ------ --------- ------ ---------- -------- --------- ------ ------------ --------
$ $ $ $ $ $ $ $
Common shares
issued at par
on incorporation 9,057 22 22
Issue of Preference
A shares for cash 847 2 59,889 59,891
Fair value of
warrants issued
for services 57,875 (57,875) -
Amortization of
deferred stock
compensation 9,646 9,646
Foreign currency
translation 105 105 105
Net loss (97,376) (97,376) (97,376)
--------- ------ --------- ------ ---------- -------- --------- ------ ---------- --------
Balance February
28, 2007 9,057 22 847 2 117,764 (48,229) (97,376) 105 (27,712) (97,271)
Issue of Preference
A shares for cash 3,732 9 263,810 263,819
Amortization of
deferred stock
compensation 25,797 25,797
Foreign currency
translation 5,760 5,760 5,760
Net loss (317,436) (317,436) (317,436)
--------- ------ --------- ------ ---------- -------- --------- ------ ---------- --------
Balance February
29, 2008 9,057 22 4,579 11 381,574 (22,432) (414,812) 5,865 (49,772) (311,676)
Issue of Preference
A shares for cash 2,536 7 179,314 179,321
Amortization of
deferred stock
compensation 22,432 22,432
Fair value of
interest on
interest free
loan received 670 670
Foreign currency
translation 44,162 44,162 44,162
Net loss (312,255) (312,255) (312,255)
--------- ------ --------- ------ ---------- -------- --------- ------ ---------- --------
Balance February
28, 2009 9,057 22 7,115 18 561,558 0 (727,067) 50,027 (115,442) (268,093)
Recapitalization
pursuant to reverse
acquisition 13,899,200 1,369 3,763,820 3,753 390,556 395,678
Foreign currency
translation (16,402) (16,402) (16,402)
Net loss (329,331) (329,331) (329,331)
--------- ------ --------- ------ ---------- -------- --------- ------ ---------- --------
Balance November
30, 2009 13,908,257 1,391 3,770,935 3,771 952,114 0 (1,056,398) 33,625 (65,497) (345,733)
--------- ------ --------- ------ ---------- -------- --------- ------ ---------- --------
The accompanying condensed notes are an integral part of these unaudited interim
consolidated financial statements
4
ACTIVEIN INC.
(FORMERLY UNLTD VENTURES INCORPORATED)
Notes to Financial Statements
November 30, 2009
(Amounts expressed in US Dollars)
1. BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements have
been prepared in accordance with the instructions to Form 10-Q and
therefore do not include all information and footnotes necessary for a fair
presentation of financial position, results of operations and cash flows in
conformity with U.S. generally accepted accounting principles (GAAP);
however, such information reflects all adjustments (consisting solely of
normal recurring adjustments), which are, in the opinion of management,
necessary for a fair statement of the results for the interim periods. In
the opinion of management, the accompanying condensed consolidated
financial statements reflect all adjustments of a normal recurring nature
considered necessary to fairly state the financial position of the Company
at November 30, 2009 and February 28, 2009, the results of its operations
for the three- and nine-month periods ended November 30, 2009 and November
30, 2008, and its cash flows for the nine-month periods ended November 30,
2009 and November 30, 2008. In addition, some of the Company's statements
in this quarterly report on Form 10-Q may be considered forward-looking and
involve risks and uncertainties that could significantly impact expected
results. The results of operations for the nine-month period ended November
30, 2009 are not necessarily indicative of results to be expected for the
full year.
The Company was incorporated under the laws of the State of Delaware, USA
on January 8, 2007. On April 9, 2009 the Company changed its name to
ActiVein, Inc. In March 2009 the Company acquired ActiVein Ltd., an Israeli
corporation. In exchange of all issued and outstanding shares of ActiVein
Ltd., the shareholders of the Company received 4,800,190 shares of ActiVein
Inc common stock, In addition, 3,770,935 shares of Series A Preferred
stock, and a warrant which allows the holder to purchase an additional
428,768 Series A preferred shares. The exchange resulted in the ActiVein
Ltd. becoming a wholly owned subsidiary of ActiVein Inc. The acquisition is
accounted for as a reverse merger (recapitalization) with ActiVein Ltd.
deemed to be the accounting acquirer, and ActiVein Inc. the legal acquirer.
On March 12, 2009 the Company issued 750,000 Common shares as finder's fees
in connection with the acquisition of Activein Ltd. 1,006,106 common shares
were reserved as an option pool. The financial statements for the period
ended August 31, 2009 include the consolidated of Activein Inc. and
Activein Ltd., whereas the comparative period are those of Activein Ltd..
The interim consolidated financial statements include the accounts of
Activein Inc. (the "Company"), and its subsidiary Activein Ltd. (an Israeli
corporation). All material inter-company accounts and transactions have
been eliminated.
5
ACTIVEIN INC.
(FORMERLY UNLTD VENTURES INCORPORATED)
Notes to Financial Statements
November 30, 2009
(Amounts expressed in US Dollars)
2. NATURE OF OPERATIONS AND GOING CONCERN
The Company's subsidiary Activein Ltd. is developing a novel intravenous
catheter which will reduce the number of times a hospital patient is stuck
with a needle to withdraw blood samples. An intravenous (IV) catheter, used
to deliver fluids to the patient, is normally inserted into at least one
vein of a patient during hospitalization. For various reasons, blood
samples cannot be withdrawn through the same catheter. As a result, during
a hospital stay a patient may be subjected to numerous needle sticks which
are required to obtain blood samples for laboratory tests. ActiVein's
dual-action catheter is designed to replace the standard conventional
"hospital IV line" by enabling both fluid infusion and blood withdrawal
using a single vein over an entire hospitalization period.
The Company's subsidiary Activein Ltd. is developing a novel intravenous
catheter which will reduce the number of times a hospital patient is stuck
with a needle to withdraw blood samples. An intravenous (IV) catheter, used
to deliver fluids to the patient, is normally inserted into at least one
vein of a patient during hospitalization. For various reasons, blood
samples cannot be withdrawn through the same catheter. As a result, during
a hospital stay a patient may be subjected to numerous needle sticks which
are required to obtain blood samples for laboratory tests. ActiVein's
dual-action catheter is designed to replace the standard conventional
"hospital IV line" by enabling both fluid infusion and blood withdrawal
using a single vein over an entire hospitalization period.
The Company has no source for operating revenue and expects to incur
significant expenses before establishing operating revenue. The Company's
future success, is dependent upon its ability to raise sufficient capital
which will be required in the development and the marketability of the
products to be manufactured. There is also no assurance that funds will be
available or the Company will be profitable. The accompanying financial
statements do not reflect any adjustments that may result if the Company is
unable to continue as a going concern.
3. REVERSE ACQUISITION
In March 2009, the Company acquired 100 % of the outstanding common and
preference shares of Activein Ltd. an Israeli Corporation (see note 4-
capital stock). The exchange resulted in the ActiVein Ltd. becoming a
wholly owned subsidiary of ActiVein Inc. Notwithstanding that the Company
became the legal acquirer of Activein Ltd., this transaction has been
accounted for in these financial statements as a reverse merger equivalent
to the issuance of stock by Activein Ltd. for the net monetary assets of
the Company accompanied by a recapitalization.
6
ACTIVEIN INC.
(FORMERLY UNLTD VENTURES INCORPORATED)
Notes to Financial Statements
November 30, 2009
(Amounts expressed in US Dollars)
3. REVERSE ACQUISITION (cont'd)
The comparative consolidated financial statements of the Company are those
of Activein Ltd (an Israeli corporation) and the merger and
recapitalization was reported as a line item in the Statements of Changes
in Stockholders' Equity.
4. CAPITAL STOCK
a) Authorized
50,000,000 Common shares, $0.0001 par value
And
10,000,000 Preferred shares, $0.0001 par value, issuable in
varying series and par values
As of Balance sheet date, 4,200,000 Series "A" Preferred shares, $0.001 par
value have been authorized. These preferred shares are convertible, at the
option of the holder of such shares, at any time after the date of issuance
of such shares, into fully paid and non-assessable shares of the Company's
common stock. Each of the holders of Series `A' Preferred shares shall be
entitled to receive for each series `A' preferred share held,
non-cumulative dividends, as and when dividends are declared by the Board,
at the rate of $0.0106.
b) Issued during the nine month period ended November 30, 2009:
In March 2009, the Company acquired 100 % of the outstanding common and
preference shares of Activein Ltd. an Israeli Corporation The exchange
resulted in the ActiVein Ltd. becoming a wholly owned subsidiary of
ActiVein Inc. In accordance with the reverse take-over of accounting, the
capital structure of issued and outstanding common and preference shares is
that of ActiVein Inc.
Number of
Shares Amount
--------- ------
Common Shares:
Issued:
ActiVein Ltd Common shares (Opening) 9,057 22
Adjustment of reverse take over 4,791,133 458
ActiVein Inc. Common shares 8,358,067 836
Shares issued for finder's fees 750,000 75
----------- ---------
Total 13,908,257 1,391
7
ACTIVEIN INC.
(FORMERLY UNLTD VENTURES INCORPORATED)
Notes to Financial Statements
November 30, 2009
(Amounts expressed in US Dollars)
4. CAPITAL STOCK (cond'd)
Preference shares;
ActiVein Ltd Preference shares
(Opening) 7,115 18
Adjustment of reverse takeover 3,763,820 3,753
----------- ---------
Total 3,770,935 3,771
5. RELATED PARTY TRANSACTIONS
Nine month period ended November 30, 2009
The Company expensed $ 49,345 (NIS 194,011)being compensation expense for
the CEO of the Company and $12,000 being compensation expense for a
director of the Company.
6. PLANT AND EQUIPMENT
As at As at
November 30, 2009 February 28, 2009
----------------- -----------------
$ $
Cost
----
Computer Equipment 2,399 1,616
Software 5,795 5,277
Lab Equipment 1,417 981
Phones 664 -
----------- ----------
10,275 7,874
Less: Accumulated Depreciation (7,533) (5,030)
----------- ----------
Net carrying amount $ 2,742 $ 2,844
----------- ----------
7. COMMITMENTS
For a one year period following the closing of the reverse acquisition, the
Company is committed to pay US$6,500 per month to a consultant for investor
relations and investment banking services.
For a one year period following the closing of the reverse acquisition, the
Company is committed to pay US$1,500 per month to a director for investor
relations and investment banking services.
8
ACTIVEIN INC.
(FORMERLY UNLTD VENTURES INCORPORATED)
Notes to Financial Statements
November 30, 2009
(Amounts expressed in US Dollars)
8. SUBSEQUENT EVENTS
The Company has reviewed subsequent events up to February 18, 2010, and has
no events which would require adjustments or disclosure in these interim
consolidated financial statements.
9
TABLE OF CONTENTS
Page
----
PROSPECTUS SUMMARY ....................................
RISK FACTORS ..........................................
DILUTION AND COMPARATIVE SHARE DATA....................
USE OF PROCEEDS .......................................
MARKET FOR ACTIVEIN'S COMMON STOCK ....................
MANAGEMENT'S DISCUSSION AND ANALYSIS
AND PLAN OF OPERATION ............................
BUSINESS...............................................
MANAGEMENT ............................................
PRINCIPAL SHAREHOLDERS.................................
OFFERING BY ACTIVEIN ..................................
SELLING SHAREHOLDERS...................................
DESCRIPTION OF SECURITIES..............................
LEGAL PROCEEDINGS......................................
INDEMNIFICATION .......................................
AVAILABLE INFORMATION..................................
FINANCIAL STATEMENTS...................................
No dealer, salesperson or other person has been authorized to give any
information or to make any representation not contained in this prospectus, and
if given or made, such information or representations must not be relied upon as
having been authorized by Tara Minerals. This prospectus does not constitute an
offer to sell, or a solicitation of an offer to buy, any of the securities
offered in any jurisdiction to any person to whom it is unlawful to make an
offer by means of this prospectus.
Until _______, 2010 all dealers effecting transactions in the registered
securities, whether or not participating in this distribution, may be required
to deliver a prospectus. This is in addition to the obligation of dealers to
deliver a prospectus when acting as underwriters and with respect to their
unsold allotments or subscriptions.
PART II
Information Not Required in Prospectus
Item 13. Other Expenses of Issuance and Distribution.
The following table show the costs and expenses payable by the Company in
connection with this registration statement.
SEC Filing Fee $ 62
Legal Fees and Expenses 40,000
Accounting Fees and Expenses 20,000
Miscellaneous Expenses 938
----------
TOTAL $61,000
==========
All expenses other than the SEC filing fee are estimated.
Item 14. Indemnification of Officers and Directors
The Delaware Corporation Code provide that the Company may indemnify any
and all of its officers, directors, employees or agents or former officers,
directors, employees or agents, against expenses actually and necessarily
incurred by them, in connection with the defense of any legal proceeding or
threatened legal proceeding, except as to matters in which such persons shall be
determined to not have acted in good faith and in the Company's best interest.
Item 15. Recent Sales of Unregistered Securities.
The following lists all shares issued by the Company since its inception.
Common Stock
Shareholder Name Date Shares Consideration
- ---------------- ---- ------ -------------
Sheldon Kales 2/8/07 2,500,000 $250
Dr. Tally Bodenstein 2/8/07 2,500,000 $250
Rakesh Malhotra 5/10/07 500,000 $ 50
Gil, Petar 11/22/07 20,000 $3,000
Gil, Luis 11/22/07 20,000 $3,000
Gordan, V. Peter 11/22/07 13,333 $2,000
Frewer, Mary 11/22/07 6,667 $1,000
Frewer, Tim 11/22/07 6,667 $1,000
Delure-Savage, Laune-Ann 11/22/07 66,667 $10,000
Homes Unlimited/Ian Savage 11/22/07 233,333 $35,000
Savage, Cameron 11/22/07 33,333 $5,000
Savage, Ian 11/22/07 300,000 $45,000
Dadwan, Sukhvinder 11/22/07 12,500 $1,875
Dadwan, Paramjeet 11/22/07 12,500 $1,875
Rothbart, Dr. Peter 11/22/07 666,667 $100,000
1
Shareholder Name Date Shares Consideration
- ---------------- ---- ------ -------------
Gareth, Ellis 11/22/07 166,667 $25,000
Kellner, Thomas 11/22/07 23,333 $3,500
Gergely Agnes 11/22/07 20,000 $3,000
Lombarni, Len 11/22/07 10,000 $1,500
Calabretta, Ted 11/22/07 100,000 $15,000
Wright,Julie 11/22/07 20,000 $3,000
Kellner, Kathy 11/22/07 30,000 $4,500
Barsony, Tibor 11/22/07 100,000 $15,000
Klein, Mark 11/22/07 50,000 $7,500
Simon, Michael 11/22/07 100,000 $15,000
Simmons, Wendy 11/22/07 5,000 $750
Simmons, Norman 11/22/07 10,000 $1,500
Grainger, John C. 11/22/07 20,000 $3,000
Kim, Philip 11/22/07 83,333 $12,500
MacDonald, Jordan 11/22/07 66,000 $9,900
Witzu M. 11/22/07 33,333 $5,000
Mooney, Matthew 11/22/07 35,000 $5,250
Barsony, Rob 11/22/07 25,000 $3,750
Hill, Mary-Eileen 11/22/07 10,000 $1,500
Caro, Gad 11/22/07 2,000 $300
Pelchovitz, Mark 11/22/07 3,000 $450
Pelchovitz, Steven 11/22/07 3,000 $450
Abrahim, Salman 11/22/07 2,000 $300
Herridge, Paula 11/22/07 10,000 $1,500
Mclennan, Corinne 11/22/07 108,900 $16,335
Emmett, John 11/22/07 233,333 $35,000
Wa, Laura 11/22/07 3,153 $473
Sandhu, Satinder 11/22/07 6,680 $1,002
Sandhu, Amarjit 11/22/07 6,667 $1,000
Gill, Manjit 11/22/07 6,667 $1,000
Astortno, Johnny 11/22/07 6,667 $1,000
Swartz, Stan 11/22/07 10,000 $1,500
Sloan, Allen 11/22/07 10,000 $1,500
Paskowitz, J.E. 11/22/07 10,000 $1,500
Mclennan, Martin 11/22/07 30,000 $4,500
Simmons, Mark 11/22/07 66,667 $10,000
Orton Clodagh 11/22/07 20,000 $3,000
Sussman, Sam 11/22/07 20,000 $3,000
Boaz Dor 3/12/09 750,000 Services rendered, valued
at $10,000
Ilan Shalev 3/24/09 944,986 (1)
Yoav Paz 3/24/09 944,986 (1)
Adi Plaschkes 3/24/09 445,198 (1)
Yifat Gurion 3/24/09 567,098 (1)
Ronen Finegold 3/24/09 521,518 (1)
2
Shareholder Name Date Shares Consideration
- ---------------- ---- ------ -------------
Eftan Investment
Consulting Ltd. 3/24/09 377,888 (1)
Chaim Halperin 3/24/09 287,259 (1)
Ami Sheinfeld 3/24/09 287,259 (1)
Ronen Shafir 3/24/09 211,999 (1)
M.M.T.K. Real Estate Ltd. 3/24/09 211,999 (1)
------------
13,908,257
============
Series A Preferred Stock
- ------------------------
Name Date Shares Consideration
- ---- ---- ------ -------------
Xenia Venture Capital Ltd. 3/24/09 3,770,935 (2)
(1) Shares of common stock in ActiVein Ltd.
(2) Shares of preferred stock in ActiVein Ltd.
The shares listed above were all issued to non-U.S. persons who reside
outside of the United States. The negotiations and agreements relating to the
issuance of these shares were made by the Company's officers (who were non-U.S.
persons) from Canada. The shares are restricted from resale in the public
markets for a period of six months from the date of their issuance. There is no
market for the Company's securities in the United States and none of the
securities have been transferred since their issuance. The Company relied upon
the exemption provided by Rule 901 of the Securities and Exchange Commission
with respect to the sale of these shares.
Item 16. Exhibits and Financial Statement Schedules
The following exhibits are filed with this Registration Statement:
Exhibit
Number Exhibit Name
- ------- ------------
3.1 Articles of Incorporation, as amended
3.2 Designation of Series A Preferred Stock
3.3 Warrant - Series A Preferred Stock
3.4 Bylaws
5 Opinion of Counsel
10.1 Agreement relating to the acquisition of ActiVein Ltd.
23.1 Consent of Attorneys
23.2 Consent of Accountants
3
Item 17. Undertakings
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) To include any prospectus required by Section l0 (a)(3) of the
Securities Act:
(ii) To 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
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 prospectus filed with the Commission pursuant to Rule
424(b) 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
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities that remain unsold at the termination of the offering.
Insofar as indemnification for liabilities arising under the Securities Act
of l933 (the "Act") may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question of whether such indemnification by it is against
public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
(4) That, for the purpose of determining liability under the Securities
Act of 1933 to any purchaser:
(i) If the registrant is relying on Rule 430B:
4
(A) Each prospectus filed by the registrant pursuant to Rule
424(b)(3) shall be deemed to be part of the registration statement as of the
date the filed prospectus was deemed part of and included in the registration
statement; and
(B) Each prospectus required to be filed pursuant to Rule 424(b)(2),
(b)(5), or (b)(7) as part of a registration statement in reliance on Rule 430B
relating to an offering made pursuant to Rule 415(a)(1)(i), (vii), or (x) for
the purpose of providing the information required by section 10(a) of the
Securities Act of 1933 shall be deemed to be part of and included in the
registration statement as of the earlier of the date such form of prospectus is
first used after effectiveness or the date of the first contract of sale of
securities in the offering described in the prospectus. As provided in Rule
430B, for liability purposes of the issuer and any person that is at that date
an underwriter, such date shall be deemed to be a new effective date of the
registration statement relating to the securities in the registration statement
to which that prospectus relates, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof. 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 effective date, 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 effective date; or
(ii) If the registrant is subject to Rule 430C, 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.
(5) That, for the purpose of determining liability of the registrant under
the Securities Act of 1933 to any purchaser in the initial distribution of the
securities:
The undersigned registrant undertakes that in a primary offering of
securities of the undersigned registrant pursuant to this registration
statement, regardless of the underwriting method used to sell the securities to
the purchaser, if the securities are offered or sold to such purchaser bye means
of any of the following communications, the undersigned registrant will be a
seller to the purchaser and will be considered to offer or sell such securities
to such purchaser:
(i) Any preliminary prospectus or prospectus of the undersigned registrant
relating to the offering required to be filed pursuant to Rule 424;
(ii) Any free writing prospectus relating to the offering prepared by or
on behalf of the undersigned registrant or used or referred to by the
undersigned registrant;
5
(iii) The portion of any other free writing prospectus relating to the
offering containing material information about the undersigned registrant or its
securities provided by or on behalf of the undersigned registrant; and
(iv) Any other communication that is an offer in the offering made by the
undersigned registrant to the purchaser.
6
SIGNATURES
Pursuant to the requirements of the Securities Act of l933, the registrant
has duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the Kiryat Gat, Israel on the 26th
day of February 2010.
ACTIVEIN, INC.
By: /s/ Adi Plaschkes
-------------------------------------------
Adi Plaschkes, President, Principal
Financial Officer and Principal Accounting
Officer
In accordance with the requirements of the Securities Act of l933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated:
Signature Title Date
/s/ Anat Segal Director February 28, 2010
- -------------------------
Anat Segal
/s/ Eitan Kyiet Director February 24, 2010
- -------------------------
Eitan Kyiet
/s/ Ilan Shalev Director February 24, 2010
- -------------------------
Ilan Shalev
/s/ Boaz Dor Director February 22, 2010
- -------------------------
Boaz Dor
ACTIVEIN, INC.
FORM S-1
EXHIBITS