UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM S-1
Registration Statement Under the Securities Act of 1933
PREVENTIA, INC.
(Exact Name of Registrant As Specified In Its Charter)
<s> <c> <c>
Nevada 27-2438013
(State or other jurisdiction (Primary Standard (I.R.S. Employer
of incorporation or Industrial Classification Identification
organization) Code Number) Number)
Murray Friedman
8900 W. Olympic Blvd. 8900 W. Olympic Blvd.
Beverly Hills, CA 90211 Beverly Hills, CA 90211
Telephone (877) 660-6463 Telephone (877) 660-6463
(Address, and telephone number (Name, address and telephone number
of principal executive offices) of agent for service)
Copies to:
Ms. Jody Walker ESQ.
7841 South Garfield Way
Centennial, CO 80122
Phone 303-850-7637 Fax 303-482-2731
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As
soon as practicable after this Registration Statement becomes
effective.
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, 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. [ ]
If delivery of the prospectus is expected to be made pursuant to
Rule 434, please check the following box. [ ]
2
Indicate by check mark whether the registrant is a large accelerated
filer, an accelerate filer, a non-accelerated filer, or a smaller
reporting company.
Large accelerated filer [ ] Accelerated filer [ ]
Non-accelerated filer [ ] Smaller reporting company [x]
CALCULATION OF REGISTRATION FEE
TITLE OF EACH CLASS OF AMOUNT PROPOSED PROPOSED AMOUNT OF
SECURITIES TO BE TO BE MAXIMUM MAXIMUM REGISTRATION
REGISTERED REGISTERED OFFERING PRICE AGGREGATE FEE
PER SHARE OFFER PRICE
<s> <c> <c> <c> <c>
Common Stock 4,000,000 $ .25 $1,000,000 $116.10
--------- ---------- -------
Total 4,000,000 $1,000,000 $116.10
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 hereafter become effective in
accordance with Section 8(a) of the Securities Act of 1933, or until
the registration statement shall become effective on such date as the
Commission, acting pursuant to Section 8(a), may determine.
The information in this preliminary prospectus is not complete and may
be changed. These securities may not be sold until the registration
statement filed with the U.S. Securities and Exchange Commission is
effective. This preliminary prospectus is not an offer to sell these
securities and it is not soliciting an offer to buy these securities in
any jurisdiction where the offer or sale is not permitted.
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Preliminary Prospectus Dated December 10, 2010. SUBJECT TO COMPLETION
$1,000,000
Up to a maximum of 4,000,000 Common Shares at $.25 per Common Share
Preventia, Inc.
The registrant is registering 4,000,000 common shares at the purchase
price of $.25 per common share for the aggregate offering price of
$1,000,000.
The offering will commence on the effective date of this prospectus and
will terminate on or before December 31, 2011.
There is presently no public market for our common shares. We
anticipate applying for quoting of our common shares on the OTC
Bulletin Board or OTCQB upon the effectiveness of the registration
statement of which this prospectus forms a part. There can be no
assurance that a market maker will agree to file the necessary
documents with the Financial Industry Regulatory Authority, which
operates the OTCBB and OTCQB, nor can there be any assurance that such
application for quotation will be approved.
We will sell the common shares ourselves and do not plan to use
underwriters or pay any commissions. We will be selling our common
shares using our best efforts and no one has agreed to buy any of our
common shares. There is no minimum amount of common shares we must
sell so no money raised from the sale of such common shares will go
into escrow, trust or another similar arrangement.
Investing in our common shares involves a high degree of risk. See
Risk Factors beginning on page 6 to read about factors you should
consider before buying our common shares.
Neither the SEC nor any state securities commission has approved these
common shares or determined that this prospectus is accurate or
complete. Any representation to the contrary is a criminal offense.
The information in this prospectus is not complete and may be changed.
We may not sell these securities until the registration statement filed
with the Securities and Exchange Commission is effective. This
prospectus is not an offer to sell these securities and it is not
soliciting an offer to buy these securities in any state where the
offer or sale is not permitted.
Proceeds of the Offering
Per Common Share Total
Offering Price $.25 $1,000,000
Proceeds to Preventia, before expenses $.25 $1,000,000
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TABLE OF CONTENTS
Prospectus Summary 5
Risk Factors 6
Forward Looking Statements 15
Use of Proceeds 15
Plan of Distribution 16
Business Operations 17
Dilution 29
Dividend Policy 30
Determination of Offering Price 31
Management's Discussion and Analysis of Financial
Condition and Results of Operations 31
Directors, Executive Officers Control Persons 33
Security Ownership of Certain Beneficial Owners
and Management 36
Certain Relationships and Related Transactions 36
Description of Capital Stock 37
Shares Eligible for Future Sale 38
Disclosure of Commission Position on Indemnification 39
for Securities Act liabilities
Market for Common Stock and Related Stockholder
Matters 39
Experts 40
Legal Proceedings 40
Legal Matters 40
Where You Can Find More Information 40
Financial Statements 40
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PROSPECTUS SUMMARY
To understand this offering fully, you should read the entire
prospectus carefully, including the risk factors beginning on page 6
and the financial statements.
General
- ------- Preventia, Inc. was incorporated in the state
of Nevada on April 9, 2010. Our principal
executive offices are located at 8900 W.
Olympic Blvd., Beverly Hills, CA 90211. Our
telephone number is (877) 660-6463.
Operations
- ---------- The registrant is a cognitive learning and
development company that builds software tools
for improving occupational and brain health and
performance.
The registrant is in the developmental stage
and will focus on addressing specific
occupational and brain training products, each
of which will be specifically designed for a
distinct market:
Prime - 18-49. Within this segment, the
registrant will specifically target working
professionals aged 24-39 and market the product
as a preventive maintenance tool to inhibit
mental decline and improve work productivity;
Advanced - Adults 50 and over. With the
increased interest in cognitive health among
this growing target segment, the registrant
will offer age-appropriate exercises to
stimulate the brains of older adults and
maintain their mental acuity; and
Progeny - Children 6-17. Will focus on aiding
children with learning disorders by providing
them with structured lessons to enhance their
academic performance and remedy symptoms
associated with learning disabilities.
We have an accumulated deficit of $(14,334) as
of September 30, 2010. In their opinion on our
interim financial statements as of and for the
period from inception to September 30, 2010,
our auditors have indicated that there is
substantial doubt about our ability to continue
as a going concern.
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Common stock
outstanding
- ------------ 8,000,000
Common shares being
sold in this offering
- ---------------------- 4,000,000
Termination of the
Offering
- ------------------ The offering will commence on the effective
date of this prospectus and will terminate on
or before December 31, 2011.
Market for our
common stock
- -------------- There is presently no public market for our
common shares. We anticipate applying for
quoting of our common shares on the OTC
Bulletin Board or OTCQB upon the effectiveness
of the registration statement of which this
prospectus forms a part. There can be no
assurance that a market maker will agree to
file the necessary documents with the Financial
Industry Regulatory Authority, which operates
the OTCBB and OTCQB, nor can there be any
assurance that such application for quotation
will be approved.
Common Stock Control
- -------------------- Murray Friedman, an officer and director,
currently owns and will continue to own
sufficient common shares to control the
operations of the registrant.
RISK FACTORS
The registrant's business is subject to numerous risk factors,
including the following.
1. We cannot offer any assurance as to our future financial results.
We have received a going concern opinion from our auditors. You may
lose your entire investment.
We have not received substantial income from operations to date and
future financial results are uncertain. We cannot assure you that the
registrant can operate in a profitable manner. We have an accumulated
deficit of $(14,334) as of September 30, 2010. Even if we obtain
future revenues sufficient to expand operations, increased production
or marketing expenses would adversely affect liquidity of the
registrant. In their opinion on our interim financial statements as of
and for the period ended September 30, 2010, our auditors have
indicated that there is substantial doubt about our ability to continue
as a going concern.
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2. We do not have a public market in our securities. If our common
stock has no active trading market, you may not be able to sell your
common shares at all.
We do not have a public market for our common shares. Our securities
are not traded on any exchange. We cannot assure you that an active
public market will ever develop. Consequently, you may not be able to
liquidate your investment in the event of an emergency or for any other
reason.
3. We do not meet the requirements for our stock to be quoted on
NASDAQ, American Stock Exchange or any other senior exchange and the
tradability in our stock will be limited under the penny stock
regulation.
The liquidity of our common stock is restricted as the registrant's
common stock falls within the definition of a penny stock.
Under the rules of the Securities and Exchange Commission, if the price
of the registrant's common stock on the OTC Bulletin Board is below
$5.00 per share, the registrant's common stock will come within the
definition of a "penny stock." As a result, the registrant's common
stock is subject to the "penny stock" rules and regulations. Broker-
dealers who sell penny stocks to certain types of investors are
required to comply with the Commission's regulations concerning the
transfer of penny stock. These regulations require broker-dealers to:
- Make a suitability determination prior to selling penny stock to
the purchaser;
- Receive the purchaser's written consent to the transaction; and
- Provide certain written disclosures to the purchaser.
These requirements may restrict the ability of broker/dealers to sell
the registrant's common stock, and may affect the ability to resell the
registrant's common stock.
4. We are dependent on Murray Friedman and key management personnel.
The failure to attract and retain the necessary personnel could have a
materially adverse effect on our business, operations and financial
condition.
Our success is dependent upon, among other things, the services of Dr.
Murray Friedman, chief executive officer. The loss of Dr. Friedman's
services could have a material adverse effect on our business,
operations and financial condition. We do not have key-man life
insurance policy for Dr. Friedman. Dr. Friedman is a doctor of dental
surgery and has held management positions within several industries for
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over twenty seven years. Our chief operating officer, Stuart Katz, has
over twenty years of executive operations experience in the real estate
industry.
The expansion of our business will place further demands on existing
management and future growth. Profitability will depend, in part, on
our ability to hire and retain the necessary personnel to operate our
business. There is no certainty that we will be able to identify,
attract, hire, train, retain and motivate other highly skilled
technical, administrative, managerial, marketing and customer service
personnel. Competition for such personnel is intense and there is no
certainty that we will be able to successfully attract, integrate or
retain sufficiently qualified personnel. The failure to attract and
retain the necessary personnel could have a materially adverse effect
on our business, operations and financial condition.
5. We have operated the registrant for a short period, so we have only
a limited operating history upon which you can evaluate our business
and prospects.
You should consider our prospects in light of the risks, expenses, and
difficulties those companies in their earlier stage of development
encounter. Our success depends upon our ability to address those risks
successfully, which includes, among other things:
- whether we will be able to assemble and maintain the necessary
resources, including financial resources, that we will need to
implement our business plan;
- whether we can continue to build and maintain a strong management
team that can develop and execute our business strategy;
- whether we will be successful in establishing and maintaining the
strategic associations necessary to implement our business strategy;
and
- whether we will be successful in implementing our sales and
marketing strategy.
We forecast our future expense levels based on our operating plans and
our estimates of future revenues. If our revenues grow at a slower
rate than we anticipate, or if our spending levels exceed our
expectations or cannot be adjusted to reflect slower revenue growth, we
may not generate sufficient revenues to achieve or sustain
profitability. In this case, the value of your investment could be
reduced or lost. We expect to continue to incur losses for the
immediate future as we build our infrastructure, continue our sales and
marketing efforts, and continue development of our products. Even if
we do achieve profitability, we may not sustain or increase
profitability on a quarterly or annual basis. Failure to achieve or
maintain profitability will materially and adversely affect the market
price of our common stock.
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6. The industry is highly competitive and there can be no assurance
that we will be able to compete effectively.
The market for consumer occupational and brain training applications in
general are highly competitive. The registrant will compete with a
number of domestic and international suppliers of occupational and
brain training and related products. The registrant expects
competition to intensify as current competitors expand their product
offerings, and new competitors enter its targeted markets. The
registrant believes that it competes based on a variety of factors,
including:
- quality of products and services provided;
- price;
- adaptability and flexibility to customers' and target markets'
requirements;
- technical support and effects capabilities;
- new product innovation;
- relevant market experience; and
- time-to-market.
The registrant believes that a number of its customers also use
products provided by its competitors. These relationships may
influence its clients' decisions regarding the volume of products
purchased from the registrant. In addition, because of these
relationships, some of its competitors may acquire information related
to its customers' new requirements before the registrant. The
registrant expects to face competition from these companies and
emerging companies developing new technologies that may meet the needs
of its clients.
A number of the registrant current and potential competitors have
longer operating histories and substantially greater financial,
technical, sales, marketing, distribution and other resources, as well
as greater name recognition and a larger installed customer base than
the registrant. As a result, these competitors may be able to devote
greater resources to the development, promotion, sale, and support of
their products than the registrant In addition, some of our potential
competitors operate their own facilities and have proprietary
technology or licenses, and may have preexisting relationships with
consumer electronics industry clients or potential clients. As a
result, these competitors may be able to adapt more quickly to new or
emerging products, develop new technologies, or address changes in
client requirements.
If the registrant is unable to compete efficiently, such failure could
harm its business, results of operations and financial condition.
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7. Factors out of our control could result in fluctuating quarterly
operating results and negative effects on our financial situation. You
may lose your entire investment.
Our quarterly operating results in the future may vary significantly,
depending on factors such as:
- revenue from our sales of our proposed software,
- the timing of our new product and service announcements and
launches,
- market acceptance of new and enhanced versions of our proposed
products (if any),
- changes in our operating expenses,
- failure to effectively manage our inventory levels,
- changes in our business strategy, and
- general economic factors.
We have limited or no control over many of these factors. Our
quarterly revenues will also be difficult to forecast because the
markets for our proposed products and services are evolving and our
revenues in any period could be significantly affected by new product
announcements and product launches by our competitors, as well as by
alternative technologies. Variations in timing of sales may cause
significant fluctuations in future operating results. In addition,
because a significant portion of our business may be derived from
orders placed by a limited number of large customers, the timing of
such orders can also cause significant fluctuations in our operating
results. Anticipated orders from customers may fail to materialize.
Delivery schedules may be deferred or cancelled for a number of
reasons, including changes in specific customer or international
economic conditions. The adverse impact of a shortfall in our revenues
may be magnified by our inability to adjust spending to compensate for
such shortfall. As a result of these factors and other factors, it is
likely that in some future period our operating results will be below
the expectations of securities analysts or investors, which would
likely result in a significant reduction in the market price of our
stock. Period-to-period comparisons of our results of operations will
not necessarily be meaningful for the foreseeable future.
8. Our operations would be negatively effected if we experience delay
in payments from our customers
We are dependent upon reasonably prompt payments from our customers to
include large commercial businesses, government bodies and other
contracted parties. Delays or disputes may materially affect our cash
flow and place our operations in substantial jeopardy. We are not
certain we can obtain bank lines of credit for financing receivables,
if needed, or that the terms of such credit would be reasonable or
affordable.
9. Market acceptance of our proposed products is uncertain. We may
never achieve profitable operations.
Based on our market research, we believe that there is a large market
demand for occupational and brain training software applications.
However, we have received limited sales of these products to date. We
11
are spending significant engineering resources to design, develop, and
test our occupational and brain training applications. There is no
assurance that the markets will develop as we anticipate. Further,
there is no assurance that we will be able to recoup our design,
development, and production expenses out of these products.
10. Our insurance may not cover all future liabilities.
We intend to carry commercial, general liability, and comprehensive
insurance on our operations, including fire, liability, extended
coverage, other casualty insurance and key man insurance. There may be
risks that are uninsurable on terms that we believe to be economic. In
addition, losses may exceed amounts on the policies.
11. We may not be able to protect our proprietary intellectual
property rights.
Our ability to compete effectively in our markets will depend, in part,
on our ability to protect the proprietary nature of our technology
through copyright, trademark or patent applications, agreements with
third parties, including license and confidentiality agreements, and
trade secret policies and procedures. We will be applying, for both
copyright protections for the designs integrated into our proposed
products and trademark protection for some of the trade identifiers for
our proposed products. We have also taken steps to keep the designs
for our proposed products confidential, protected trade secrets.
Toward this end, our normal policy is to enter into confidentiality
agreements with our business partners, employees, contractors and
others.
We have also instituted steps in our operations to make sure our
designs are kept confidential. In addition, although we have not
applied for patent protection at this time, we plan to apply, where
appropriate, for patent protection of some of our intellectual
property. While we have taken actions to protect our proprietary
assets, no complete protection is ever available.
The agreements that we enter into with third parties may not
effectively prevent disclosure of our confidential information and may
not provide us with an adequate remedy in the event of unauthorized
disclosure of such information. If employees or collaborators develop
products independently that may be applicable to our products under
development, disputes may arise about ownership of proprietary rights
to those products. Those products will not necessarily become our
property, but may remain the property of those persons. Protracted and
costly litigation could be necessary to enforce and determine the scope
of our proprietary rights. Our failure to obtain or maintain
intellectual property protection, for any reason, could have a material
adverse effect on our business, financial position, and results of
operations. Investors in this offering will have to make a judgment
upon the experience and abilities of our management and employees as
opposed to any valuation based on our intellectual property.
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12. The cost of protecting our proprietary intellectual property
rights or defending intellectual property infringement lawsuits brought
by others may prevent us from obtaining profitable operations.
Competition in our markets is intense and our competitors may
independently develop or obtain patents on technologies that are
substantially equivalent or superior to our technology. We could incur
substantial costs in defending intellectual property infringement
lawsuits brought by others and in prosecuting intellectual property
lawsuits against third parties who may infringe our rights.
Intellectual property rights, by their nature, are uncertain and
involve complex legal and factual questions. We may unknowingly
infringe on the proprietary rights of others and may be liable for our
infringement, which could cost us significant amounts. We are not
aware of any third party intellectual property rights that would
prevent our use of our proposed technology, although rights of that
type may exist. If we infringe on the intellectual property of another
party, we could be forced to seek a license to those intellectual
property rights or alter our products or processes so they no longer
infringe on the rights of the third party. If we are required to
obtain a license to another party's proprietary rights, that license
could be expensive, if we could obtain it at all.
13. Our operations may be negatively affected by the rapid
technological change of the industry.
Our operating results will depend to a significant extent on our
ability to successfully introduce new product(s) to the marketplace and
improve our proposed products. Accordingly, our ability to compete
successfully in our markets will depend on a number of factors,
including
- our ability to identify emerging technological trends within our
markets,
- develop and maintain competitive products,
- enhance our proposed products by adding innovative features that
differentiate them from our competitor's products,
- bring products to market on a timely basis at competitive prices
and
- respond effectively to new technological changes or new product
announcements by others.
We believe we will need to make continuing significant expenditures for
research and development in the future.
14. If we discover product defects, we may have product-related
liabilities that may cause us to lose revenues or delay market
acceptance of our products
Our proposed products are very complex and may contain defects. We
have detected defects in the past and have corrected them as quickly as
possible. Correcting any defects we discover in the future may require
us to make significant expenditures of capital and other resources.
Despite our continuing tests, users may find defects in our products
that could cause additional development costs or result in delays in,
or loss of, our market acceptance. Our products are sold into markets
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that are extremely demanding of robust reliable, fully functioning
products. Therefore, delivery of products with production defects or
reliability, quality or compatibility problems could significantly
delay or hinder market acceptance of such products, which could damage
our credibility with our customers and adversely affect our ability to
retain our existing customers and to attract new customers.
Moreover, such errors, defects or functional limitations could cause
problems, interruptions, delays or a cessation of sales to our
customers. Alleviating such problems may require significant
expenditures of capital and resources by us. Despite testing by us,
our resellers or our customers may find errors after commencement of
commercial production, resulting in additional development costs, loss
of, or delays in market acceptance, diversion of technical and other
resources from our other development efforts, product repair or
replacement costs, claims or the loss credibility with our current or
prospective customers.
15. If we are unable to manage future growth effectively, our
business, results of operations and financial condition could be
materially adversely affected.
We hope and expect to grow rapidly, both in the rate of our sales and
operations and the number and complexity of our proposed products,
product distribution channels, and product development activities.
Several members of our key management team only recently joined us, and
integration of those persons into a cohesive management unit may be
problematic. Our growth, coupled with the rapid evolution of our
markets, has placed, and is likely to continue to place, significant
strains on our administrative, operational, technical, and financial
resources and increase demands on our internal management systems,
procedures, and controls. If we are unable to manage future growth
effectively, our business, results of operations and financial
condition could be materially adversely affected.
16. We may be subject to risks associated with global Operations.
These risks may negatively effect our operations.
We only recently began to concentrate on developing international
sales. As a result, we could derive substantial portions of our
revenues from customers outside the United States. International
operations are subject to a number of risks, including:
- costs of localizing products and services for international
markets,
- dependence on independent resellers,
- multiple and conflicting regulations regarding communications,
- restrictions on use of data and internet access,
- longer payment cycles,
- unexpected changes in regulatory environments,
- import and export restrictions and tariffs,
- difficulties in staffing and managing international operations,
- greater difficulty or delay in accounts receivable collection,
potentially adverse tax consequences, the burden of complying with a
variety of laws outside the United States, the impact of possible
14
recession prone environments and economies outside the United States
and political and economic instability. Furthermore, we expect that our
export sales would be denominated predominately in United States
dollars. Therefore, an increase in the value of the United States
dollar relative to other currencies could make our products and
services more expensive and potentially less competitive in
international markets.
17. We will need to expand our management systems and hire and retain
key personnel to support our proposed product line.
The development and marketing of our products will continue to place a
significant strain on our limited personnel, management, and other
resources. Our ability to manage any future growth effectively will
require us to successfully attract, train, motivate, retain, and manage
employees, particularly key engineering and managerial personnel, to
effectively integrate new employees into our operations and to continue
to improve our operational, financial and management systems. Our
failure to manage growth and changes in our business effectively and to
attract and retain key personnel could limit our growth and the success
of our products and business. Further, we are highly dependent on the
continued service of and our ability to attract and retain qualified
technical, marketing, sales, and managerial personnel. The competition
for such personnel is intense. The loss of any key person or the
failure to recruit additional key technical and sales personnel in a
timely manner would have a material adverse effect on our business and
operating results. We currently do not maintain key person life
insurance policies on any of our employees.
18. The registrant may outsource a significant portion of its work to
independent contractors outside the United States. We will be subject
to risks associated with foreign operations which could negatively
affect our operations.
In order to meet the production of its products, the registrant may
outsource a significant portion of the production of its products to
companies located outside of the United States. Operations in foreign
countries entail a number of risks, which include unexpected changes
in, or impositions of, legislative or regulatory requirements, quotas,
tariffs and other trade barriers and restrictions, longer payment
cycles, greater difficulty in accounts receivable collection,
fluctuation in currency exchange rates, potentially adverse taxes,
weaker or nonexistent protection of intellectual property, the burden
of complying with a variety of foreign laws and other factors beyond
the registrant's control. In addition, many of the registrant's
clients depend on revenues from foreign countries, thereby exposing the
registrant to risks associated with foreign commerce. There can be no
assurance that the foregoing factors will not have a material adverse
effect on the registrant's business, operating results and financial
condition or require the registrant to modify its current business
practices.
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FORWARD LOOKING STATEMENTS
The statements contained in this prospectus that are not historical
fact are forward-looking statements which can be identified by the
use of forward-looking terminology such as "believes," "expects,"
"may," "should," or "anticipates" or the negative thereof or other
variations thereon or comparable terminology, or by discussions of
strategy that involve risks and uncertainties. We have made the
forward-looking statements with management's best estimates prepared
in good faith.
Because of the number and range of the assumptions underlying our
projections and forward-looking statements, many of which are
subject to significant uncertainties and contingencies that are
beyond our reasonable control, some of the assumptions inevitably
will not materialize and unanticipated events and circumstances may
occur subsequent to the date of this prospectus.
These forward-looking statements are based on current expectations,
and we will not update this information other than required by law.
Therefore, the actual experience of the registrant, and results
achieved during the period covered by any particular projections and
other forward-looking statements should not be regarded as a
representation by the registrant, or any other person, that we will
realize these estimates and projections, and actual results may vary
materially. We cannot assure you that any of these expectations
will be realized or that any of the forward-looking statements
contained herein will prove to be accurate.
USE OF PROCEEDS
Any proceeds received from the sale of our common shares will be
deposited directly into the operating account of the registrant. We
will be attempting to raise up to $1,000,000, minus expenses of
$34,116, from the sale of our common shares. These proceeds will be
used as follows:
Gross Proceeds $1,000,000 $500,000
Expenses 34,116 34,116
---------- --------
Sales & Marketing 349,843 168,743
Research & Development 102,384 49,384
Working Capital 513,657 247,757
-------- --------
Net Proceeds $965,884 $465,884
Gross Proceeds $250,000 $125,000
Expenses 34,116 34,116
---------- --------
Sales and Marketing 78,193 32,918
Research & Development 22,884 9,634
Working Capital 114,807 48,332
-------- --------
Net Proceeds $215,884 $ 90,884
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In the event we are not successful in selling all of the securities to
raise at least $125,000, we would utilize any available funds raised
the following order of priority:
- for general and administrative expenses, including legal and
accounting fees and administrative support expenses incurred in
connection with our reporting obligations with the SEC.
- for sales and marketing; and
- for research and development.
PLAN OF DISTRIBUTION
This prospectus relates to the sale of 4,000,000 common shares.
We will sell the common shares ourselves and do not plan to use
underwriters or pay any commissions. We will be selling our common
shares using our best efforts and no one has agreed to buy any of our
common shares. This prospectus permits our officers and directors to
sell the common shares directly to the public, with no commission or
other remuneration payable to them for any common shares they may sell.
There is no plan or arrangement to enter into any contracts or
agreements to sell the common shares with a broker or dealer. Our
officers and directors will sell the common shares and intend to offer
them to friends, family members and business acquaintances. There is
no minimum amount of common shares we must sell so no money raised from
the sale of our common shares will go into escrow, trust or another
similar arrangement.
The common shares are being offered by Dr. Murray Friedman and Stuart
Katz, officers and directors of the registrant. Messrs. Friedman and
Katz will be relying on the safe harbor in Rule 3a4-1 of the Securities
Exchange Act of 1934 to sell the common shares. No sales commission
will be paid for common shares sold by Messrs. Friedman and Katz.
Messrs. Friedman and Katz are not subject to a statutory
disqualification and are not associated persons of a broker or dealer.
Additionally, Messrs. Friedman and Katz primarily perform substantial
duties on behalf of the registrant otherwise than in connection with
transactions in securities. Neither Dr. Friedman nor Mr. Katz were a
broker or dealer or an associated person of a broker or dealer within
the preceding 12 months and they have not participated in selling an
offering of securities for any issuer more than once every 12 months
other than in reliance on paragraph (a)4(i) or (a)4(iii) of Rule 3a4-1
of the Securities Exchange Act of 1934.
The offering will commence on the effective date of this prospectus and
will terminate on or before December 31, 2011.
These are no finders.
17
Under the rules of the Securities and Exchange Commission, our common
stock will come within the definition of a "penny stock" because the
price of our common stock on the OTC Bulletin Board is below $5.00 per
share. As a result, our common stock will be subject to the "penny
stock" rules and regulations. Broker-dealers who sell penny stocks to
certain types of investors are required to comply with the Commission's
regulations concerning the transfer of penny stock. These regulations
require broker-dealers to:
- Make a suitability determination prior to selling penny stock to
the purchaser;
- Receive the purchaser's written consent to the transaction; and
- Provide certain written disclosures to the purchaser.
These requirements may restrict the ability of broker/dealers to sell
our common stock, and may affect the ability to resell our common
stock.
BUSINESS OPERATIONS
General
- ----------
The registrant was incorporated in the state of Nevada on April 9,
2010.
The registrant is a cognitive learning and development company that
builds software tools for improving occupational and brain health and
performance.
The registrant is in the developmental stage and will focus on
addressing specific occupational and brain training products, each of
which will be specifically designed for a distinct market.
Products
- --------
The registrant is in the process of designing a series of computer-
based exercises developed for adults and children to improve Working
Memory capacity - an important feature of cognitive high performance
that dictates an individual's ability to hold useful information in the
mind and apply in daily life. WM capacity peaks at age 30, and can
decline by almost half by age 60 due to the normal aging process.
Impaired WM capacity can hinder individuals' capability to learn new
skills and information, and can likewise reduce the ability to focus
and concentrate on
18
important tasks. In addition, the occupational and brain training
exercises have also been linked to improved WM capacity among high-
performance adults.(1)
The registrant is in the process of developing a stand-alone product
group (i.e. computer based) for corporations and an on-line version for
individuals, each of which will be specifically designed for the
following target markets:
Prime - 18-49. Within this segment, the registrant will
specifically target working professionals aged 24-39 (22% of the
U.S. population in 2008) and market the product as a preventive
maintenance tool to inhibit mental decline and improve work
productivity;
Advanced - Adults 50 and over. In 2008, nearly 93 million
Americans belonged to this group, 56% of whom are baby boomers.
With the increased interest in cognitive health among this growing
target segment, the registrant intends to offer age-appropriate
exercises to stimulate the brains of older adults and maintain
their mental acuity; and
Progeny - Children 6-17. We intend to focus on aiding children
with learning disorders by providing them with structured lessons
to enhance their academic performance, and attempt to remedy
symptoms associated with learning disabilities.
Each product line will include training exercises that target verbal WM
and visual-spatial WM through individual and combined exercises. These
training exercises will be designed so that users can improve their
cognitive performance peaks or reach them faster, and older adults can
reduce or delay cognitive decline.
Product Features and Benefits
- -----------------------------
The registrant's exercises will contain a proprietary algorithm that
actively tracks a user's real time performance and automatically
adjusts the level of difficulty for each training session. We intend
to develop the algorithm so that it will maintain a balance that
motivates users to perform at increasingly higher levels but also
avoids setting the bar so high that users would be discouraged at
continuing with the exercises.
Users will likewise be able to review their training progress and
improvement through software included with distribution from our
licensees or through the registrant's website for our individual
consumers. We intend to develop the performance reporting so it will
include graphs that show progress over time for individual exercises,
as well as combining reports that measures total progress and WM
- ----------
(1)Klingberg, Torkel, et al., "Computerized Training of Working Memory
in Children with ADHD - A Randomized, Controlled Trial," J American
Academy of Child and Adolescent Psychiatry, 2005.
19
improvement. Our online users may also have the option of comparing
their individual performance with others within the same age groups or
users belonging to online communities such as Facebook.
Fundamental cognitive training, not skills learning. The
registrant will not teach new skills, but rather create a platform for
learning skills. The concept of neuro-plasticity, the idea that the
occupational and brain can reorganize itself and change, is what will
allow the registrant to effectively change the way the occupational and
brain functions to perform at its maximum capacity. We intend to
develop many training programs for various skills such as reading,
math, or time management.
Focused solution, substantial benefits. The registrant's proposed
products will not be a one-size-fits-all answer, but rather a solution
that improves working memory allowing and to focus and resist
distractions better. If we are successful, this will help academically,
socially, and professionally.
Professional service. A coach trained by the registrant will
provide support throughout an individual's training to help get the
most out of an individual's efforts.
Working Memory Training focuses exclusively on training working
memory, a critically important cognitive function. Working memory is
our ability to hold information in mind and to use that information in
our thinking to perform tasks. It is essential for attention and focus
and plays a critical role in children's academic achievement. Rather
than training a wide array of abilities, the entire Preventia program
will be focused on training this critical cognitive function.
The registrant will not make extravagant claims. The registrant
will not and does not make claims about curing ADHD or eliminating
working memory problems.
Marketing
- ---------
The registrant intends to introduce its products and services to the
marketplace over several phases, formulated to capture revenue streams
that currently exist through our B2B model and obtain new revenues
directly from consumers through our B2C model as the occupational and
brain training market continues to mature. Using a B2B strategy in
combination with a B2C marketing strategy, the registrant intends to
maximize market penetration.
Business-to-Business
We intend for distributors of the registrant's products to market,
sell, and service our products within a locally defined geographic area
to businesses, associations, and government entities. Licensees will
work directly with these organizations, while the registrant will
supply representatives who will support each licensee, providing them
with the service and support they need. We believe that by licensing
we will be able to accomplish the following:
20
- build the Preventia brand;
- leverage the brand quickly;
- leverage sales and marketing both regionally and nationally;
- develop consistency in installation, training, and service;
- access national accounts through corporate programs rather than
regional programs; and
- provide consistent marketing schemes, materials, and programs
with national sales teams.
Business-to-Consumer
we intend to market and deliver our B2C products in an online platform
that combines a portfolio of occupational and brain training, games,
and exercises with personalized tracking and recommendations in
combination with a motivational rewards system that seamlessly blends
entertainment with science and technology to improve an individual's
ability to hold useful information in the mind and apply in daily life.
Target Segments and Profile
Cognitive training programs have slowly emerged as an alternative to
the traditional use of drugs and cognitive therapy in treating various
clinical conditions. In addition, individuals are slowly looking to
occupational and brain training as means of addressing varying personal
needs, such as improving productivity at school or at work, or to delay
the onset of mental decline. In order to be more responsive to
specific consumer needs, the registrant intends to offer three product
lines for the following target segments:
Adults aged 18-49. The registrant's primary target market is
adults aged 18-49, with the core group belonging to the 24-39 age
bracket. In 2008, the 24-39 age group represented 22% (66 million) of
the U.S.' total population.(2) Additionally, this core group includes
about 30 million Americans who earned a bachelor's degree or higher,
and are most likely engaged in demanding careers.(3) These working
professionals have an average disposable income of $20,648, and are
more conscious about maintaining their overall health and wellness.
Research has shown that cognitive performance of adults is threatened
by stressful workplaces, which tend to produce poor conditions for
occupational and brain improvement. In order to stay sharp and in peak
mental form, these individuals need more than everyday mental exertion
at work. These adults need to train their brain with a program that
consists of focused, structured mental exercises in order to stretch
and test their thinking in ways that stimulate the brain.(4)
- ----------
(2)Euromonitor International - Global Market Information Database,
Accessed from www.portal.euromonitor.com.lib.pepperdine.edu/
(3)Crissey, Sarah R., "Educational Attainment in the United States:
2007,"U.S. Census Bureau, January 2009.
(4)Franek, Jacob, "The Occupational and brain-Training Software
Industry," Accessed from www.askmen.com.
21
For this target segment, the registrant intends to offer its standard
product, Preventia Prime. We intend the registrant's mental exercises
to serve as a preventive maintenance tool may aid in mental decline and
may aid delay mental illnesses later on in life. In addition, engaging
in an occupational and brain-training program that demands complete
focus and trains core areas of cognitive function can significantly aid
individuals within this target segment to be more efficient and
successful in the workplace.
Adults aged 50+. In 2008, there were 93 million Americans who
were 50 years or older with 56% of whom were baby boomers. It is
estimated that by 2011, the total population belonging to this target
segment will grow by 7.6% to 101 million, at which point, 68% would be
baby boomers.(5)
Marketing to this target segment will be beneficial for the registrant
given the growing number of baby boomers within this group. As baby
boomers age, they become more health-conscious, which consequently
results to significantly higher health expenditures. With spending
power estimated at around $2.1 trillion, the largest among all U.S.
consumer groups, baby boomers have started investing in their own
occupational and brain fitness to maintain mental acuity and delay
Alzheimer's Disease symptoms.(6)
Increased interest in occupational and brain maintenance within this
age group is linked to several studies that have indicated how adding
occupational and brain exercises to older adults' weekly schedule can
reduce their risk of developing AD symptoms by 64%.(6) Essentially,
the recurring theme within this target segment is use it or lose it.
As a response to their needs for more mentally stimulating activities,
the registrant intends to offer Preventia Advanced. As with the
standard version, Advanced intends to provide older adults with a
challenging training program that will keep their minds sharp.
- ----------
(5)Euromonitor International, Op. cit.
(6) SharpBrains Research, "The State of the Brain Fitness Software
Market," March 2008
22
Children. We intend to also target children, particularly those
with learning disorders. In 2008, there were 49 million American
children aged 6-17.(7) Among this population, about 16% (7.8 million)
had learning disorders such as Attention Deficit Disorder, Attention
Deficit Hyperactivity Disorder, dyslexia, or auditory processing
disorder.(8)
Children with ADHD commonly have problems in the areas of working
memory, internalization of speech, sense of time and goal-directed
behavior.(9) To remedy ADHD and other learning disorders would require
a combination of medications, behavior modifications, lifestyle
changes, and counseling.
The registrant intends to offer, Preventia Progeny, suited for the
younger market. This product will stimulate children's cognitive
performance through focused lessons and games that encourage them to
think aloud or use their executive functions. Through WM training,
Preventia Progeny will likewise work on problem areas associated with
ADHD, consequently alleviating behavioral symptoms and even improving a
number of non-trained cognitive skills.
Research has also established a link between chronic childhood poverty
and impaired WM. Poverty can create a high and constant level of
stress in children that can stifle cognitive brain development in
children and lead to learning disabilities, lower IQs, repeating grades
and dropping out of school.(10) Preventia Progeny will be a useful
tool for schools and non-profit organizations working with
underprivileged children.
Strategy
The registrant intends to design a collective plan for the development
and management of a strategic marketing plan to launch and implement
its integrated campaign. Each initiative of the campaign seeks to
create
- ----------
(7)Euromonitor International - Global Market Information Database,
Accessed from www.portal.euromonitor.com.lib.pepperdine.edu/.
(8)Mintel Reports, "Marketing Health to Parents and Children - U.S. -
March 2009", March 2009
(9)SharpBrains Research, Op. cit.
(10)Toppo, Greg, "Study: Poverty dramatically affects children's
occupational and brains," U.S.A Today, Dec. 7, 2008.
23
awareness and talk-value on a national level, in addition to
effectively positioning the product among both influencers and target
consumers. Overall, the marketing plan seeks to successfully position
occupational and brain training products with a unique, breakthrough
proposition and perceived market difference. The marketing campaign
will consist of the following five elements.
Strategic Marketing Plan Development. We intend to create an
umbrella-marketing plan which will act as a guide for all brand
initiatives by vendors and strategic partners. The plan will include
the constructing of the Preventia brand image with a unique voice and
personality, the creation of core communication messages critical to
impacting target groups and the blueprint for all tactical execution
elements.
Retail Marketing and Sell-in Strategy. Our overall retail
strategy will be developed by working closely with sales teams to
identify unique and relevant distribution outlets beyond big-box mass
retailers and specialty retailers, and create an impactful sell-in
program ensuring successful placement in these key distribution
outlets.
Key Influencer Program. The registrant intends to identify and
work with seasoned outreach specialist(s) to tap the target consumer
influencer market. The registrant's influencer program can serve as a
cornerstone of the integrated marketing campaign by enrolling select
celebrities, key influencers, and media to serve as ambassadors of the
Preventia brand.
Public Relations Outreach. We intend to conduct an aggressive
media outreach to build publicity and top-of-mind awareness among
adults, and ensure the most amount of impact in a short period. This
will include designing press materials/press kits, and working with PR
professionals/agencies to identify core media targets that are aligned
with the registrant's marketing strategy. Such efforts will create an
ongoing dialogue and enable key media to interact with the product.
Additionally, a media outreach will secure targeted media placements on
behalf of the registrant.
Non-Traditional Marketing. The registrant intends to design and
manage the implementation of a variety of cutting-edge and breakthrough
non-traditional programs that seek to reach the core target in their
own environment. A regional strategy will be developed for reaching
the targeted demographic and will solicit partners to further develop
and execute the programs creating viral (word-of-mouth) publicity.
Distribution
- ------------
We intend to license our organizational products through distributors
who are contracted specifically for business-to-business sales and
delivered in an online platform for business-to-consumer sales. We
will combine a portfolio of occupational and brain games and exercises
with personalized tracking and recommendations in combination with a
24
motivational rewards system that seamlessly blends entertainment with
science and technology to improve an individual's ability to hold
useful information in the mind and apply in daily life.
We intend to introduce our products and services to the marketplace
over several phases, formulated to capture revenue streams that
currently exist through our B2B model and obtain new revenues from
consumers in our B2C model as the occupational and brain-training
market matures. Using a B2B strategy in combination with a B2C
marketing strategy, the registrant is of the opinion that we will
maximize market penetration.
We intend to distribute our products under licenses to our licensee's
and services agreements to our individual consumers, which will grant a
nonexclusive right to use our services. The licenses and service
agreements may require us to make arrangements for hot standby systems
or to deposit the source code and data necessary to deliver our
services in an escrow account that may be accessed by the licensee or
customer in the event of our registrant's liquidation, dissolution or
bankruptcy, or if we fail to cure a material breach of contract.
Research and Development
- ------------------------
The registrant is in the developmental stage of its products and
intends to focus on addressing specific occupational and brain training
solutions that integrate with our products and service offerings and
expanding what will become our existing product lines. The registrant
will rely upon external software developers and to some extent upon
acquisitions for our product development efforts. The registrant
believes that it can often respond more quickly to market requirements
by acquiring complementary products or technology.
We intend to develop future applications based on requirement
specifications received from our distributors, end-line customers,
prospective customers, experts in the field, and the registrant's
alliances, among other resources. By maintaining regular contact with
customers and experts in the field and tracking the activity, we will
be able to determine our product direction and product feature
requirements.
Customer Service and Technical Support
- --------------------------------------
The registrant intends to focus on providing its distributors and
clients with a high level of customer services and technical support, a
service that we believe will attract and retain our client base. The
registrant will focus on recruiting and training qualified technical
support engineers, each of whom will have the level of technical
expertise required to handle a diverse range of support-related
challenges.
Due to the critical nature of this technology, customers with questions
regarding the registrant's products and services will be able to
contact our help desk 24 hours a day, 7 days a week and receive a
25
prompt response to their support needs. Our support engineers intends
to be readily able to tap into the client's application in real-time,
perform full diagnostics, and resolve issues directly, immediately.
Additionally, to ensure the education of our clients, the registrant
intends to offer initial and ongoing training sessions using various
delivery methods, user group meetings, and sponsor general forums.
Patents, Trademarks, Intellectual Property, and Proprietary Protection
- ----------------------------------------------------------------------
The registrant does not currently hold any patents with respect to any
of its current products. We anticipate that we will depend
significantly upon proprietary technology and that we will rely on a
combination of copyright, trade secret and trademark laws,
confidentiality procedures and nondisclosure among other contractual
provisions to protect our proprietary rights.
We will seek to protect our software, documentation and other written
materials under trade secret and copyright laws, which afford only
limited protection. Notwithstanding these safeguards, it could be
possible for competitors to obtain and/or imitate the registrant's
software and/or hardware. Further, there can be no assurance that
others will not independently develop products similar or superior to
those of the registrant.
The registrant will also explore technology developed by other entities
that may be licensed or acquired in an effort to reduce the product
development cycle or to complement existing product lines.
Public Relations
- ----------------
Objectives
The primary objective of the registrant's public relations program is
to establish the registrant as a leader in providing of occupational
and brain training solutions. This objective will be accomplished
through a comprehensive PR approach that includes, but is not limited
to the following:
- media relations;
- positioning and key message refinement;
- editorial calendars;
- conference and trade show support;
- one-on-one press visits;
- bylined articles and white papers;
- proactive media outreach; and
- media materials development.
Goals
We intend to use the PR program to garner media coverage, increase
visibility, and heighten awareness of the registrant, its products,
technologies, and executives. The registrant will be presented to
national and regional business, technology, and vertical-industry
press. The goals of the registrant's public relations program are:
26
- Brand Preventia as a household identity
- Clearly establish the registrant as a leading provider of
occupational and brain training products
- Differentiate the registrant, its products and services from
perceived competitors
- Create a greater awareness of the registrant with potential
customers and partners
- Position the registrant's executive team members as a key
spokespersons and industry visionaries
- Identify the registrant as strong, trusted, and progressive
through its partnerships and technologies
Advertising
- -----------
The registrant plans to implement strategic advertising campaigns
focused on brand name recognition. Advertising campaigns will
generally focus on print, using industry publications, although other
means of advertising will also be considered and implemented. The
registrant also plans to use its website as a means of advertising and
as an electronic brochure for generating sales leads and increasing
market awareness.
The registrant intends to implement certain policies and procedures to
control advertising or promotions that will be utilized in its
strategic alliances. These policies and procedures are necessary to
assure the proper representation of the registrant at all times and
include the pre-approval of all advertising material and restrictions
on how strategic alliances can advertise using the Preventia brand.
Pricing
- -------
Our B2B and B2C pricing models were arrived at using bottom-up and top-
down analysis. Costs associated with the engineering and continued
servicing of the product were budgeted, and added to costs associated
with customer acquisition and retention, continued product development,
overhead, and management. Then market pricing was reviewed based on
current competitors' prices.
B2B - Licensing
We intend to use our B2B pricing model to offer volume discounts and
flexible payment plans to organizations with five or more users that
can be transferred from one computer to another, and will provide an
effective way to purchase our software for businesses that plan to grow
their use over time.
We will offer two types of Volume Licenses for businesses with five or
more computers:
- Open Business. Open Business is a single agreement offering a 2-
year term and upfront payments. It's designed for businesses that
don't want to purchase large volumes of software but would prefer to
pay for software licenses, as they need them. The initial order must
be for five or more licenses but can include any combination of the
registrant's products thereafter.
27
- Open Value. Open Value is a single agreement that offers a 3-
year term and allows companies to spread their payments over the term
of the agreement. It allows companies to add the registrant's licensed
products throughout the agreement term with annualized pricing, making
it easier to manage cash flow. Open Value also provides options to
acquire additional services, tools, support and training.
Benefits
Flexibility: Volume Licenses can be tailored to suit the size and type
of any business.
Transfers: Licenses can be transferred from one computer to another.
Control: Volume Licenses serve the needs of organizations that acquire
multiple licenses, but do not need numerous copies of the media and the
documentation.
Volume discount: Businesses with as few as five PCs can acquire
licenses with discounts. Lower pricing is also available for eligible
government and academic organizations.
B2C
Management determined that a simple, service-based fee would assist in
the attracting and retaining B2C customers. Our initial pricing model
will vary from $9.99 to 29.99 a month depending upon the selection
programming.
Competition
- -----------
The registrant believes that the occupational and brain training market
is highly fragmented. However, there are several industry leaders,
including Lumos Labs, Inc., Scientific Brain Training., Vivity Labs,
Inc. CogniFit, and Cogmed, however, no one entity or group of entities
has attained a dominant position in the industry.
The entry requirements for the occupational and brain training industry
are believed by us to be significant. We believe that the principal
competitive factors in our market include:
- service functionality, quality, and performance;
- ease of use, reliability, scalability, and security of services;
- customer service and support;
- establishing a significant base of customers and distribution
partners;
- ability to introduce new services to the market in a timely
manner;
- ability to integrate with third-party offerings and services; and
- pricing.
Although we believe our proposed products and services will be able to
compete favorably with respect to many of these factors, the market is
new and rapidly evolving.
A number of companies have invested in commercializing their
occupational and brain fitness products to both consumer and
institutional buyers. These applications, which target different
28
cognitive skills, are designed to either treat specific health
conditions or enhance cognitive abilities and advocate healthy aging.
Current occupational and brain fitness programs are delivered online,
software, and devices.
Competitive Advantage
- ---------------------
Current occupational and brain fitness software products are mainly
offered to institutions, with very few products (e.g. MindFit and
IntelliGym) being made available directly to consumers. This clear
void within the business to consumer software segment has given the
registrant a lucrative opportunity to tap this relatively new yet
flourishing market, and secure a first mover advantage over its
competitors.
The registrant's products expect to give each user an edge in varying
circumstances. For instance, adults can be more productive in the
workplace due to improved concentration and abilities to solve complex
problems. The training program may likewise contribute to children's
enhanced academic performance. Finally, older adults may benefit from
training their working memory to lessen the effects of normal aging on
the brain, and consequently make everyday tasks easier.
Strategic Partners and Alliances
- --------------------------------
The registrant intends to leverage sales and delivery alliances with
companies whose capabilities complement our capabilities, either by
enhancing our Preventia brand or by helping us extend our offerings to
new geographies. By combining our alliance partners' products and
services with our own capabilities and expertise, we intend to create
innovative, high-value occupational and brain training solutions for
our customers. The intention is that some alliances will be
specifically aligned with our offerings, thereby adding skills,
technology and insights that are applicable across the occupational and
brain training industry. Other alliances will extend and enhance our
offerings specific to a single user group.
In addition, the registrant plans to continue to develop solutions that
address specific market needs, are affordable, and can be easily
integrated with the products and services we currently have in place.
We intend to continue to explore new market opportunities through
product development, strategic partnering, acquisitions, the creation
of new companies or divisions, and the use of partnership/distributor
relationships that will provide increased market penetration in
international markets.
Going Concern
- -------------
The registrant's financial statements have been prepared on a going
concern basis, which contemplates the realization of assets and the
settlement of liabilities and commitments in the normal course of
business. In the near term, the registrant expects operating costs to
continue to exceed funds generated from operations. As a result, the
29
registrant expects to continue to incur operating losses, and the
operations in the near future are expected to continue to use working
capital.
The registrant is a development stage company and management of the
registrant is devoting substantially all of its present efforts to
establish a new educational software business, and its planned
principal operations have not yet commenced. As such, the registrant
has not generated any revenues from operations and has no assurance of
any future revenues. The ability of the registrant to continue as a
going concern is dependent on its ability to raise capital to meet its
operating requirements. The financial statements do not include any
adjustments that might be necessary if the registrant is unable to
continue as a going concern.
Employees
- ---------
We presently have no full-time employees and no part-time employees.
There are no written agreements.
Reports to Security Holders
- ---------------------------
We intend to become a fully reporting company under the requirements of
the Exchange Act, and will file the necessary quarterly and other
reports with the Securities and Exchange Commission. Although we will
not be required to deliver our annual or quarterly reports to security
holders, we intend to forward this information to security holders upon
receiving a written request to receive such information. The reports
and other information filed by us will be available for inspection and
copying at the public reference facilities of the Securities and
Exchange Commission located at 100 F Street N.E., Washington, D.C.
20549.
Copies of such material may be obtained by mail from the Public
Reference Section of the Securities and Exchange Commission at 100 F.
Street N.E., Washington, D.C. 20549, at prescribed rates. Information
on the operation of the Public Reference Room may be obtained by
calling the SEC at 1-800-SEC-0330. In addition, the Commission
maintains a World Wide Website on the Internet at http://www.sec.gov
that contains reports, proxy and information statements and other
information regarding registrants that file electronically with the
Securities and Exchange Commission.
Properties
- -----------
Our corporate and manufacturing offices are located at 8900 W. Olympic
Boulevard, Beverly Hills, CA 90211. Our telephone number is (877) 660-
6463. These offices consist of 500 square feet of shared space that
were provided free of charge by our sole director until September 30,
2010 and thereafter have been leased on a month to month basis for
$500.00 per month.
30
DILUTION
Assuming completion of the offering, there will be up to 12,000,000
common shares outstanding. The following table illustrates the per
common share dilution that may be experienced by investors at various
funding levels.
Funding Level $1,000,000 $500,000 $250,000 $125,000
---------- -------- -------- --------
<s> <c> <c> <c> <c>
Offering price $0.25 $0.25 $0.25 $0.25
Net tangible book
value per common
share before offering (.001) (.001) (.001) (.001)
Increase per common
share attributable to
investors .081 .047 .024 .011
----- ----- ----- -----
Pro forma net tangible
book value per
common share after
offering .080 .046 .023 .010
----- ----- ----- ------
Dilution to investors .170 .204 .227 .240
Dilution as a
percentage of
offering price 68.0% 81.6% 90.8% 96.0%
Based on 8,000,000 common shares outstanding as of September 30, 2010
and total stockholder's deficit of $(6,334) utilizing audited September
30, 2010 financial statements.
Since inception, the officers, directors, promoters and affiliated
persons have paid an aggregate average price of $.001 per common share
in comparison to the offering price of $0.25 per common share.
Further Dilution
- ----------------
The registrant may issue equity and debt securities in the future.
These issuances and any sales of additional common shares may have a
depressive effect upon the market price of the registrant's common
shares and investors in this offering.
DIVIDEND POLICY
We have never declared or paid any dividends. In addition, we
anticipate that we will not declare dividends at any time in the
foreseeable future.
Instead, we will retain any earnings for use in our business. This
policy will be reviewed by our board of directors from time to time in
light of, among other things, our earnings and financial position.
31
No distribution may be made if, after giving it effect, we would not be
able to pay its debts as they become due in the usual course of
business; or the corporation's total assets would be less than the sum
of its total liabilities plus (unless the articles of incorporation
permit otherwise) the amount that would be needed, if we were to be
dissolved at the time of the distribution, to satisfy the preferential
rights upon dissolution of shareholders whose preferential rights are
superior to those receiving the distribution. The board of directors
may base a determination that a distribution is not prohibitive either
on financial statements prepared on the basis of accounting practices
and principles that are reasonable in the circumstances or on a fair
valuation of other method that is reasonable in the circumstances.
DETERMINATION OF OFFERING PRICE
The offering price of the common shares was arbitrarily determined by
the registrant based on the financial needs of the registrant without
regard to the book value or market value, if any, of our common shares.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
The registrant is a cognitive learning and development company that
intends to build software tools for improving occupational and brain
health and performance. Our performance will be significantly affected
by changes in general economic conditions and, specifically, shifts in
consumer confidence and spending. Additionally, our performance will
be affected by competition. Management believes that as the industry
continues to consolidate, competition with respect to price will
intensify. Such a heightened competitive pricing environment will make
it increasingly important for us to successfully distinguish us from
competitors based on quality and superior service and operating
efficiency.
We have neither engaged in any material operations nor generated any
revenues to date. Our only activities since inception have been
organizational activities and those necessary to prepare for this
offering.
We are currently not aware of any other known material trends, demands,
commitments, events or uncertainties that will have, or are reasonable
likely to have, a material impact on our financial condition, operating
performance, revenues and/or income, or results in our liquidity
decreasing or increasing in any material way.
Results of Operations
- ---------------------
For the period from inception (April 9, 2010) through September 30,
2010, we did not receive any revenue and had operating expenses of
$13,854 resulting in an operating loss of $13,854. Operating expenses
consisted of legal and profession fees of $12,800, accounting expenses
of $1,000 and bank changes of $54. Operating expenses will continue to
increase as we implement sales and marketing initiatives.
32
Liquidity and Capital Resources
- -------------------------------
We have not received any revenues to date. Until we are able to raise
funds to pursue our business plan and generate material revenues, our
activities will be restricted.
During the period from inception through September 30, 2010, we did not
pursue any investing activities.
During the period from inception through September 30, 2010, we
received proceeds from an officer advance of $7,905 and proceeds from
the sale of common stock to Dr. Friedman, an officer and director,
resulting in net cash provided by financing activities of $15,905.
Plan of Operations
- ------------------
We believe that we will need to
- increase net sales and expand gross margin by continuing to
design, develop, manufacture or source quality products;
- execute our marketing strategy to enhance customer awareness and
appreciation of the Preventia brand;
- provide a superior client experience through consistent
outstanding customer service that will ensure customer satisfaction and
promote the frequency and value of customer spending;
- expand distribution channels.
Our current cash balance is estimated not to be sufficient to fund our
current operations. We are attempting to commence sales to raise
needed cash for the remainder of the year, which will be supplemented
by officer advances and our efforts to raise cash through the issuance
of equity securities. It is our intent to secure a market share in the
industry which we feel will require additional capital over the long
term to undertake sales and marketing initiatives, and to manage timing
differences in cash flows.
In the event we are not successful in selling all of the securities to
raise $1,000,000, we would give priority to allocating capital to sales
and marketing, research and development and to develop sales in the
industry we are currently working in. Any remaining capital would be
used to fund our working capital needs.
In the event we are not successful in selling all of the securities to
raise at least $125,000, we would utilize any available funds raised
the following order of priority:
- for general and administrative expenses, including legal and
accounting fees and administrative support expenses incurred in
connection with our reporting obligations with the SEC.
- for sales and marketing; and
- for research and development.
33
Controls and Procedures
- -----------------------
We are not currently required to maintain an effective system of
internal controls. We will be required to comply with the internal
control requirements of the Sarbanes-Oxley Act for the fiscal year
ended December 31, 2011. As of the date of this prospectus, we have
not completed an assessment, nor have our auditors tested our systems
of internal controls.
Because it will take time, management involvement and perhaps outside
resources to determine what internal control improvements are necessary
for us to meet regulatory requirements and market expectations for our
operations, we may incur significant expense in meeting our public
reporting responsibilities, particularly in the areas of designing,
enhancing, or remediating internal and disclosure controls. Doing so
effectively may also take longer than we expect, thus increasing our
exposure to financial fraud or erroneous financing reporting.
Once our management's report on internal controls is complete, we will
retain our independent auditors to audit and render an opinion on such
report when required under Section 404 of the Sarbanes-Oxley Act. The
independent auditors may identify additional issues concerning our
operations while performing their audit of internal control over
financial reporting.
Off-Balance Sheet Arrangements; Commitments and Contractual Obligations
- -----------------------------------------------------------------------
As of December 10, 2010, we did not have any off-balance sheet
arrangements and did not have any commitments or contractual
obligations.
DIRECTORS, EXECUTIVE OFFICERS AND CONTROL PERSONS
Our bylaws provide that the number of directors who shall constitute
the whole board shall be such number as the board of directors shall at
the time have designated. We confirm that the number of authorized
directors has been set at five pursuant to our bylaws. Each director
shall be selected for a term of one year and until his successor is
elected and qualified. Vacancies are filled by a majority vote of the
remaining directors then in office with the successor elected for the
unexpired term and until the successor is elected and qualified. The
directors, officers and significant employees are as follows:
NAME AGE POSITIONS HELD SINCE
Dr. Murray Friedman 50 President, CEO, CFO Inception
Director to present
Stuart Katz 46 COO, Secretary Inception
To present
34
Business Experience
- -------------------
Dr. Murray Friedman, President, Chief Executive Officer, Chief
Financial Office, and Director
Dr. Friedman, a Doctor of Dental Surgery and a seasoned management
executive, has used his expertise in working with a broad range of
corporations over the past 27 years, advancing the visions and missions
of corporations through his comprehensive understanding over a broad
range of industries, enabling him to provide continuity and leadership
to a diverse group of companies.
From 1983 to 1989, Dr. Friedman owned and operated, EMF Leasing, an
automobile and equipment finance/leasing company, which he sold for a
substantial profit upon completion of his dental general practice
residency. Upon completion of his residency, Dr. Friedman owned and
operated a multi-faceted dental practice that delivered dental services
to 15 nursing homes and assisted living centers in addition to directed
a satellite service for Staten Island University Hospital from 1989 to
2003, which he sold along with another dental practice he started in
2002, All Smiles Dental, and sold them in separate transactions for
significant profits in 2003.
From 2002 to 2009, Dr. Friedman served as the Chief Operating Officer
for Implant Logic Systems, a Dental Implant Technology Company, using
innovative CT scanning technology integrated with radiographic markers.
Currently Dr. Friedman is a Managing Member of Sapphire Capital
Ventures, a Holding Company for Technology, Healthcare and Real Estate
Ventures, which he formed in 2007.
Dr. Friedman's education is as follows:
1988 DDS Columbia University School of Dental And Oral Surgery
1982 BA Yeshiva University (magna)
Major: Biology, Chemistry, Minor: Sociology
1982 AA Erna Michael College
Major: Jurisprudence
1988-1989 Woodhull Medical and Mental Health Center:
Residency in General Practice/Oral and Maxillo-Facial
Surgery, Rotations: Anesthesia, General Surgery,
Medicine, ENT, Plastic Surgery
Stuart Katz, Chief Operating Officer
Mr. Katz's 20 years of executive operations experience has profitably
directed operations of over 4,000 units in 30 buildings throughout New
York City, responsible for construction and renovations for Weinreb
Management from 1989 to 1994.
From 1994 to 1999, Mr. Katz served as the Assistant Director of Housing
for the Met Council on Jewish Poverty, New York, N.Y., responsible for
the day-to-day operations supervising 1500 non-profit residential units
in four boroughs, directing the construction 100 unit dual-diagnosis
residence on the Upper East Side in addition to planning and building
of two 135 unit elderly apartment buildings in Starret City.
35
From 1999-2004, Mr. Katz served as NET2PHONE's, a technology IPO
Company, Director of Operations where he planned, designed, and oversaw
the construction of 150,000 square feet of offices and seamlessly
organized and implemented headquarters relocation from three locations
with minimal impact to the over 800 employees.
Most recently, from 2004 to 2009, Mr. Katz successfully guided Windsor
Healthcare as its Regional Environmental Specialist and as a Licensed
Nursing Home Administrator.
Mr. Katz is a licensed Paramedic and has served on a neighborhood
volunteer Ambulance Corp for over 20 years. He earned a bachelor of
science degree from Tuoro College in 1985 with a major in business
management.
Dr. Friedman will serve in his capacity as sole director until our next
annual shareholder meeting to be held within six months of our fiscal
year's close. Directors are elected for one-year terms.
Code of Ethics Policy
- ---------------------
We have not yet adopted a code of ethics that applies to our principal
executive officer, principal financial officer, principal accounting
officer or controller or persons performing similar functions.
Corporate Governance
- --------------------
There have been no changes in any state law or other procedures by
which security holders may recommend nominees to our board of
directors. In addition to having no nominating committee for this
purpose, we currently have no specific audit committee and no audit
committee financial expert. Based on the fact that our current
business affairs are simple, any such committees are excessive and
beyond the scope of our business and needs.
Family Relationships
- --------------------
None
Involvement in Certain Legal Proceedings
- ----------------------------------------
None of our directors, executive officers and control persons have been
involved in any of the following events during the past five years:
- Any bankruptcy petition filed by or against any business of which
such person was a general partner or executive officer either at the
time of the bankruptcy or within two years prior to that time,
- Any conviction in a criminal proceeding or being subject to any
pending criminal proceeding (excluding traffic violations and other
minor offenses);
- Being subject to any order, judgment or decree, not subsequently
reversed, suspended or vacated, of any court of competent jurisdiction,
permanently or temporarily enjoining, barring, suspending or otherwise
limiting his or her involvement in any type of business, securities or
banking activities,; or
36
- Being found by a court of competent jurisdiction (in a civil
action), the Commission or the Commodity Futures Trading Commission to
have violated a federal or state securities or commodities law, and the
judgment has not been reversed, suspended, or vacated.
Executive Compensation
- ----------------------
Since inception, we have not paid any compensation to our officers.
Dr. Friedman purchased his 8,000,000 common shares for $8,000 in cash
from personal funds.
We may elect to award a cash bonus to key employees, directors,
officers and consultants based on meeting individual and corporate
planned objectives.
We do not have any standard arrangements by which directors are
compensated for any services provided as a director. No cash has been
paid to the directors in their capacity as such.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of November 30, 2010, the number and
percentage of outstanding shares of the registrant's common stock owned
by (i) each person known to us to beneficially own more than 5% of its
outstanding common stock, (ii) each director, (iii) each named
executive officer and significant employee, and (iv) all officers and
directors as a group.
Percentage
Name Amount Percentage After Offering
- ---- ------ ---------- --------------
Dr. Murray Friedman 8,000,000 100.00% 66.67%
130 Central Avenue
Lawrence, NY 11559
Stuart Katz 0 0.00% 0.00%
130 Cumberland Place
Lawrence, NY 11559
Officers and Directors
As a group (2 persons) 8,000,000 100.00% 66.67%
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Director Independence
- ---------------------
The registrant's board of directors consists of Dr. Murray Friedman.
He is not independent as such term is defined by a national securities
exchange or an inter-dealer quotation system.
From inception (April 9, 2010) through September 30, 2010, there were
no transactions with related persons other than as described below.
37
Related Party Loan
- ------------------
As of September 30, 2010, the registrant owed $7,905 to Dr. Murray
Friedman, an officer and director of the registrant. The advances are
unsecured, due on demand and bear interest at 8% per annum.
DESCRIPTION OF CAPITAL STOCK
The following statements constitute brief summaries of the registrant's
certificate of incorporation and bylaws.
Common Shares
- -------------
The registrant's articles of incorporation authorize it to issue up to
25,000,000 common shares and no preferred shares, $0.0001 par value per
common share.
Liquidation Rights
- ------------------
Upon liquidation or dissolution, each outstanding common share will be
entitled to share equally in the assets of the registrant legally
available for distribution to shareholders after the payment of all
debts and other liabilities.
Dividend Rights
- ---------------
There are no limitations or restrictions upon the rights of the board
of directors to declare dividends out of any funds legally available
therefore. The registrant has not paid dividends to date and it is not
anticipated that any dividends will be paid in the foreseeable future.
The board of directors initially may follow a policy of retaining
earnings, if any, to finance the future growth of the registrant.
Accordingly, future dividends, if any, will depend upon, among other
considerations, the registrant's need for working capital and its
financial conditions at the time.
Voting Rights
- -------------
Holders of common shares of the registrant are entitled to voting
rights of one hundred percent. Holders may cast one vote for each
share held at all shareholders meetings for all purposes.
Other Rights
- ------------
Common shares are not redeemable, have no conversion rights and carry
no preemptive or other rights to subscribe to or purchase additional
common shares. Common Shares do not have cumulative voting features.
Our bylaws allow action to be taken by written consent rather than at a
meeting of stockholders with the consent of the holders of a majority
of shares entitled to vote.
38
Transfer Agent
- --------------
Upon completion of the offering, Olde Monmouth Stock Transfer will act
as the registrant's transfer agent.
SHARES ELIGIBLE FOR FUTURE SALE
Upon the date of this prospectus, there are 8,000,000 shares of our
common stock outstanding of which no common shares may be freely traded
without restriction.
Upon the effectiveness of this registration statement, up to an
additional 4,000,000 common shares may be issued and will be eligible
for immediate resale in the public market. The remaining common shares
will be restricted within the meaning of Rule 144 under the Securities
Act, and are subject to the resale provisions of Rule 144.
Pursuant to Rule 144, a person who has beneficially owned restricted
shares of our common stock for at least six months would be entitled to
sell their securities provided that:
- such person is not deemed to have been one of our affiliates at
the time of, or at any time during the three months preceding, a sale;
and
- we are subject to the Exchange Act periodic reporting
requirements for at least three months before the sale and have filed
all required reports under Section 13 or 15(d) of the Exchange during
the 12 months (or such shorter period as we were required to file
reports) preceding the sale.
Persons who have beneficially owned restricted shares of our common
stock for at least six months but who are our affiliates at the time
of, or at any time during the three months preceding, a sale, would be
subject to additional restrictions, by which such person would be
entitled to sell within any three-month period only a number of
securities that does not exceed the greater of:
- 1% of the total number of shares of common stock then
outstanding, which will equal approximately 120,000 shares immediately
after this offering.
Sales by our affiliates under Rule 144 are also limited by manner of
sale provisions and notice requirements and to the availability of
current public information about us.
No predictions can be made of the effect, if any, that market sales of
shares of common stock or the availability of such shares for sale will
have on the market price prevailing from time to time. Nevertheless,
sales of significant amounts of our common stock could adversely affect
the prevailing market price of the common stock, as well as impair our
ability to raise capital through the issuance of additional equity
securities.
39
DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION
FOR SECURITIES ACT LIABILITIES
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of
the small business issuer as provided in the foregoing provisions, or
otherwise, the small business issuer has been advised that in the
opinion of the SEC such indemnification is against public policy as
expressed in the Securities Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities,
other than the payment by the small business issuer of expenses
incurred or paid by a director, officer or controlling person of the
small business issuer 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 small business
issuer will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against
public policy as expressed in the Securities Act and will be governed
by the final adjudication of such issue.
MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
Market Information
- ------------------
There is presently no public market for our common shares. We
anticipate applying for quoting of our common shares on the OTC
Bulletin Board or OTCQB upon the effectiveness of the registration
statement of which this prospectus forms a part. There can be no
assurance that a market maker will agree to file the necessary
documents with the Financial Industry Regulatory Authority, which
operates the OTCBB and OTCQB, nor can there be any assurance that such
application for quotation will be approved.
Holders
- -------
As of December 10, 2010, there was only one shareholder of the
registrant.
Dividends
- ---------
We have not declared any cash dividends on our common stock since our
inception and do not anticipate paying any dividends in the foreseeable
future. We plan to retain any future earnings for use in our business.
Any decisions as to future payment of dividends will depend on our
earnings and financial position and such other factors as the board of
directors deems relevant.
40
EXPERTS
The financial statements of the registrant appearing in this
registration statement have been audited by Gumbiner Savett Inc.,
independent auditors and are included in reliance upon such report
given upon the authority of such firm as experts in accounting and
auditing.
LEGAL PROCEEDINGS
We are not a party to any legal proceedings the outcome of which, in
the opinion of our management, would have a material adverse effect on
our business, financial condition, or results of operation.
LEGAL MATTERS
The validity of the common shares being offered hereby will be passed
upon by Jody M. Walker, Attorney At Law, Centennial Colorado.
WHERE YOU CAN FIND MORE INFORMATION
At your request, we will provide you, without charge, a copy of any
document filed as exhibits in this prospectus. If you want more
information, write or call us at:
8900 Olympic Boulevard
Suite 150
Beverly Hills, CA 90211.
(877) 660-mind
Attention: Dr. Murray Friedman, Chief Executive Officer
Our fiscal year ends on December 31st. Upon completion of this
offering, we will be a reporting company and file annual, quarterly and
current reports with the SEC. You may read and copy any reports,
statements, or other information we file at the SEC's public reference
room at 100 F Street, N.E., Washington D.C. 20549. You can request
copies of these documents, upon payment of a duplicating fee by writing
to the SEC. Please call the SEC at 1-800- SEC-0330 for further
information on the operation of the public reference rooms. Our SEC
filings are also available to the public on the SEC Internet site at
http:\\www.sec.gov.
FINANCIAL STATEMENTS
Report of Independent Registered Public Accounting Firm
Balance Sheet as of September 30, 2010
Interim Statement of Operations for the period from April 9, 2010
(inception) through September 30, 2010
Interim Statement of Stockholders' Deficiency for the period from April
9, 2010 (inception) through September 30, 2010
Interim Statements of Cash Flows form the period from April 9, 2010
(inception) through September 30, 2010
Notes to Interim Financial Statements
41
[Letterhead of Gumbiner Savett Inc.]
Independent Auditors' Report
To the Board of Directors and
Stockholder of Preventia, Inc.
We have audited the accompanying balance sheet of Preventia, Inc. (a
corporation in the development stage) (the "Company") as of September
30, 2010, and the related interim statements of operations,
stockholder's deficiency, and cash flows for the period from April 9,
2010 (inception) through September 30, 2010. 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 audit.
We conducted our audit in accordance with auditing standards generally
accepted in the United States of America. Those standards require that
we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. 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 audit
provides 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 September 30, 2010, and the results of its operations and its
cash flows for the period from April 9, 2010 (inception) through
September 30, 2010, in conformity with accounting principles generally
accepted in the United States of America.
As discussed in Note 2, certain conditions indicate that the Company
may be unable to continue as a going concern. The Company has an
accumulated deficit of $14,334 and has a working capital deficiency of
$8,834 as of September 30, 2010. The accompanying interim financial
statements do not include any adjustments that might be necessary
should the Company be unable to continue as a going concern.
/s/Gumbiner Savett Inc.
October 20, 2010
42
PREVENTIA, INC.
(a corporation in the development stage)
BALANCE SHEET
September 30,
2010
ASSETS
Current Assets
Cash in Bank $ 71
---------
Deposit 2,500
---------
TOTAL ASSETS $ 2,571
=========
LIABILITIES AND STOCKHOLDER'S DEFICIENCY
Current Liabilities:
Accrued professional fees $ 1,000
Advances from officer, including accrued interest 7,905
---------
Total current liabilities 8,905
---------
Stockholder's Deficiency
Common stock, $0.0001 par value; 25,000,000
shares authorized; 8,000,000 shares issued and
outstanding 800
Additional paid in capital 7,200
Accumulated deficit (14,334)
---------
Total stockholder's deficiency (6,334)
---------
TOTAL LIABILITIES AND STOCKHOLDER'S DEFICIENCY $ 2,571
=========
The accompanying notes are an integral
part of these financial statements
43
PREVENTIA, INC.
(a corporation in the development stage)
INTERIM STATEMENT OF OPERATIONS
For the period from April 9, 2010 (inception) through
September 30, 2010
Operating Expenses:
Legal and Professional $ 12,800
Accounting 1,000
Bank Charges 54
---------
Total Operating Expenses 13,854
---------
Operating loss (13,854)
Interest and other expenses (480)
---------
Net loss before income taxes (14,334)
Provision for income taxes -
---------
Net loss $(14,334)
=========
Net loss per share-Basic and Diluted -
=========
Weighted average number of common shares outstanding 6,994,286
=========
The accompanying notes are an integral
part of these financial statements
44
PREVENTIA, INC.
(a corporation in the development stage)
INTERIM STATEMENT OF STOCKHOLDERS' DEFICIENCY
For the period from April 9, 2010 (inception) through
September 30, 2010
Additional
Common Stock Paid-in Accumulated
Shares Amount Capital deficit Total
------ ------ ---------- ----------- -----
<s> <c> <c> <c> <c> <c>
Balance at inception - $ - $ - $ - $ -
Issuance of common stock 8,000,000 800 7,200 - 8,000
Net loss - - - (14,334) (14,334)
--------- ------- ------- -------- --------
Balance at September
30, 2010 8,000,000 $ 800 $ 7,200 $(14,334) $ (6,334)
========= ======= ======= ======== ========
The accompanying notes are an integral
part of these financial statements
45
PREVENTIA, INC.
(a corporation in the development stage)
INTERIM STATEMENT OF CASH FLOWS
For the period from April 9, 2010 (inception) through
September 30, 2010
CASH FLOW FROM OPERATING ACTIVITIES:
Net loss $(14,334)
Adjustments to reconcile net loss to net cash
used in operating activities:
Accrued professional fees 1,000
Deposit (2,500)
--------
Net cash used in operating activities (15,834)
--------
CASH FLOW FROM FINANCING ACTIVITIES:
Proceeds from officer advances 7,905
Proceeds from issuance of common stock 8,000
--------
Net cash provided by financing activities 15,905
--------
NET INCREASE IN CASH 71
--------
CASH BALANCE AT BEGINNING OF PERIOD -
--------
CASH BALANCE AT END OF PERIOD $ 71
========
The accompanying notes are an integral
part of these financial statements
46
PREVENTIA, INC.
(a corporation in the development stage)
NOTES TO INTERIM FINANCIAL STATEMENTS
NOTE 1 - NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES
Nature of Operations
- --------------------
Preventia Inc. (the "Company") was incorporated under the laws of the
state of Nevada on April 9, 2010.
The Company was formed to be an educational software provider and build
software tools for improving occupational and brain health and
performance. The Company is in the development of its product.
Summary of Significant Accounting Policies
- ------------------------------------------
Use of estimates. The preparation of the accompanying financial
statements in conformity with accounting principles generally accepted
in the United States requires management to make certain estimates and
assumptions that directly affect the results of reported assets,
liabilities, revenue, and expenses. Actual results may differ from
these estimates.
Cash Equivalents. For purposes of the statements of cash flows, the
Company considers all highly liquid debt instruments with an original
maturity of three months or less to be cash equivalents.
Fair value of financial instruments. All financial instruments are
carried at amounts that approximate estimated fair value.
Income Taxes. Income tax expense is based on pretax financial
accounting income. Deferred tax assets and liabilities are recognized
for the expected tax consequences of temporary differences between the
tax bases of assets and liabilities and their reported amounts. FASB
ASC 740, "Income Tax," requires the recognition of the impact of a tax
position in the financial statements only if that position is more
likely than not of being sustained on a tax return upon examination by
the relevant taxing authority, based on the technical merits of the
position. At September 30, 2010, the Company had no unrecognized tax
benefits. The Company recognizes interest and penalties related to
income tax matters in interest expense and operating expenses,
respectively. As of September 30, 2010, the Company had no accrued
interest or penalties related to uncertain tax positions.
Net Loss Per Share. Basic net loss per share includes no dilution
and is computed by dividing net loss available to common stockholders
by the weighted average number of common stock outstanding for the
period. Diluted net loss per share does not differ from basic net loss
per share as the Company did not have dilutive items during the
reporting period.
47
PREVENTIA, INC.
(a corporation in the development stage)
NOTES TO INTERIM FINANCIAL STATEMENTS
New Accounting Pronouncements. The Company does not believe newly
issued accounting pronouncements will have any material impact on its
financial statements.
NOTE 2 - GOING CONCERN
The Company's financial statements have been prepared on a going
concern basis, which contemplates the realization of assets and the
settlement of liabilities and commitments in the normal course of
business. In the near term, the Company expects operating costs to
continue to exceed funds generated from operations. As a result, the
Company expects to continue to incur operating losses, and the
operations in the near future are expected to continue to use working
capital.
The Company is a development stage company and management of the
Company is devoting substantially all of its present efforts to
establish a new educational software business, and its planned
principal operations have not yet commenced. As such, the Company has
not generated any revenues from operations and has no assurance of any
future revenues. The ability of the Company to continue as a going
concern is dependent on its ability to raise capital to meet its
operating requirements. The financial statements do not include any
adjustments that might be necessary if the Company is unable to
continue as a going concern.
NOTE 3 - NET LOSS PER SHARE
The following table sets forth the computation of basic and diluted net
loss per share:
September 30, 2010
------------------
Numerator:
Net loss $ (14,334)
----------
Denominator:
Weighted average of common shares 6,994,286
----------
Net loss per share-basic and diluted $ (0.00)
NOTE 4 - RELATED PARTY TRANSACTION
As of September 30, 2010, the Company owed $7,905 to an officer of the
Company. The advances are unsecured, due on demand and bear interest at
8% per annum.
48
PREVENTIA, INC.
(a corporation in the development stage)
NOTES TO INTERIM FINANCIAL STATEMENTS
NOTE 5 - SUBSEQUENT EVENT
The Company has evaluated subsequent events through October 20, 2010,
the date which the financial statements were available to be issued.
There were no subsequent events noted that would require adjustment to
or disclosure in the financial statements.
49
Up to a Maximum of 4,000,000 Common Shares at $.25 per Common Share
$1,000,000
Prospectus
Preventia, Inc.
December 10, 2010
YOU SHOULD ONLY RELY ON THE INFORMATION CONTAINED IN THIS PROSPECTUS.
WE HAVE NOT AUTHORIZED ANYONE TO PROVIDE YOU WITH INFORMATION DIFFERENT
FROM THAT CONTAINED IN THIS PROSPECTUS. WE ARE OFFERING TO SELL, AND
SEEKING OFFERS TO BUY, COMMON SHARES ONLY IN JURISDICTIONS WHERE OFFERS
AND SALES ARE PERMITTED.
Until __________________2011, all dealers that effect transactions in
these securities, whether or not participating in this offering, may be
required to deliver a prospectus. This is in addition to the dealers'
obligation to deliver a prospectus when acting as underwriters and with
respect to their unsold allotments or subscriptions.
50
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 13. Other Expenses of Issuance and Distribution
- -----------------------------------------------------
The following table sets forth the estimated expenses to be incurred in
connection with the distribution of the securities being registered.
The registrant shall pay the expenses.
SEC Registration Fee . . . . . . $ 116.10
Printing and Engraving Expenses 1,500.00
Legal Fees and Expenses . . . . 25,000.00
Accounting Fees and Expenses. . 5,000.00
Miscellaneous . . . . . . . . . 2,500.00
----------
TOTAL . . . . . . . . . . . . . $34,116.10
==========
Item 14. Indemnification of Directors and Officers
- ---------------------------------------------------
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of
the small business issuer as provided in the foregoing provisions, or
otherwise, the small business issuer has been advised that in the
opinion of the SEC such indemnification is against public policy as
expressed in the Securities Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities,
other than the payment by the small business issuer of expenses
incurred or paid by a director, officer or controlling person of the
small business issuer 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 small business
issuer will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against
public policy as expressed in the Securities Act and will be governed
by the final adjudication of such issue.
Item 15. Recent Sales of Unregistered Securities
- -------------------------------------------------
On May 1, 2010, Preventia issued Dr. Murray Friedman, an officer and
director, 8,000,000 common shares for cash of $8,000.
The above securities were issued pursuant to an exemption from
registration under Section 4(2) of the Securities Act of 1933 to
sophisticated investors.
51
Item 16. Exhibits and Financial Statement Schedules
- ---------------------------------------------------
INDEX TO EXHIBITS
Exhibit Number and Identification of Exhibit
3-1 Articles of Incorporation
3-2 By-Laws
3-3 Common Stock Certificate
5 Consent and opinion of Jody M. Walker, Attorney At Law.
11 Statement of Computation of Per Share Earnings
This Computation appears in the Financial Statements.
23 Consent of Certified Public Accountant.
Item 17. Undertakings
- ----------------------
(A) 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 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the Registration Statement (or the most recent
post-effective amendment of the Registration Statement) which,
individually or in the aggregate, represent a fundamental change in the
information set forth 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
20 percent 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 being registered which remain unsold at
the termination of the offering.
52
(4) For the purpose of determining liability under the Securities Act
of 1933 to any purchaser, 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 the 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.
(B) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the Registrant pursuant to the provisions
described under Item 14 above 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 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.
53
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant has duly caused this registration statement to be signed on
its behalf by the undersigned, thereunto duly authorized in the City of
Lawrence, State of New York, on December 10, 2010.
Preventia, Inc.
By: /s/Murray Friedman, DDS
----------------
Murray Friedman DDS, CEO
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
By: /s/Murray Friedman
-------------------
Murray Friedman, DDS
Principal Financial Officer,
Controller and Director Dated: December 10, 2010