Attached files
file | filename |
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EX-5.1 - EXHIBIT 5.1 - Exmovere Holdings, Inc. | exmo_ex51.htm |
EX-10.1 - EXHIBIT 10.1 - Exmovere Holdings, Inc. | exmo_ex101.htm |
EX-10.2 - EXHIBIT 10.2 - Exmovere Holdings, Inc. | exmo_ex102.htm |
EX-99.8 - EXHIBIT 99.8 - Exmovere Holdings, Inc. | exmo_ex998.htm |
EX-10.3 - EXHIBIT 10.3 - Exmovere Holdings, Inc. | exmo_ex103.htm |
EX-99.9 - EXHIBIT 99.9 - Exmovere Holdings, Inc. | exmo_ex999.htm |
EX-99.11 - EXHIBIT 99.11 - Exmovere Holdings, Inc. | exmo_ex9911.htm |
EX-99.10 - EXHIBIT 99.10 - Exmovere Holdings, Inc. | exmo_ex9910.htm |
SECURITIES AND EXCHANGE
COMMISSION
________________________________
________________________________
AMENDMENT
NO. 2 TO FORM S-1
REGISTRATION
STATEMENT
UNDER
THE SECURITIES ACT OF
1933
________________________________
EXMOVERE HOLDINGS,
INC.
|
||
(Exact Name of Registrant in its Charter) |
Delaware
|
20-8024018
|
|||
(State
or other Jurisdiction of Incorporation)
|
(Primary
Standard Classification Code)
|
(IRS
Employer Identification No.)
|
EXMOVERE
HOLDINGS, INC.
1600
Tysons Boulevard
8th
Floor
McLean,
VA 22102
Tel.:
(703) 245-8513
(Address
and Telephone Number of Registrant’s Principal
Executive
Offices and Principal Place of Business)
Corporations
and Companies, Inc.
910
Foulk Road, Suite 201
Wilmington,
Delaware 19803
Tel.
No.: (302) 652-4800
(Name,
Address and Telephone Number of Agent for Service)
Copies of
communications to:
Springs
Law Firm PLLC
7437
Willesden Lane
Charlotte,
NC 28277
Tel.
No.: (704) 241-9995
Fax
No.: (704) 708-4101
vsprings@springslawfirm.com
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.
þ
If this
Form is filed to register additional securities for an offering pursuant to Rule
462(b) under the Securities Act of 1933, please check the following box and list
the Securities Act registration Statement number of the earlier effective
registration statement for the same offering. ¨
If this
Form is a post-effective amendment filed pursuant to Rule 462(c) under the
Securities Act of 1933, 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 of 1933, 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. ¨
Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting
company. See the definitions of “large accelerated filer,”
“accelerated filer” and “smaller reporting company” in Rule 12b-2 of the
Exchange Act.
Large
accelerated filer
|
o |
Accelerated
filer
|
o |
Non-accelerated
filer
|
o |
Smaller
reporting company
|
þ |
CALCULATION
OF REGISTRATION FEE
Title
of Each Class Of Securities to be Registered
|
Amount
to be
Registered
|
Proposed
Maximum
Aggregate
Offering
Price
per
share
|
Proposed
Maximum
Aggregate
Offering
Price
|
Amount
of
Registration
fee
|
||||||||||||
Common
Stock, $0.001 par value per share
|
1,140,407
|
$
|
3.50
|
$
|
3,991,424.50
|
$
|
284.59
|
(1) This
Registration Statement covers the resale by our selling shareholders of up to
1,140,407 shares of common stock previously issued
to such selling shareholders.
(2) The
offering price has been estimated solely for the purpose of computing the amount
of the registration fee in accordance with Rule 457(o). Our common stock is not
traded on any national exchange and in accordance with Rule 457; the offering
price was determined by the price of the shares that were sold to our
shareholders in a private placement memorandum. The price of $3.50 is a fixed
price at which the selling security holders may sell their shares until our
common stock is quoted on the OTCBB at which time the shares may be sold at
prevailing market prices or privately negotiated prices. There can be no
assurance that a market maker will agree to file the necessary documents with
the Financial Industry Regulatory Authority, which operates the OTC Bulletin
Board, nor can there be any assurance that such an application for quotation
will be approved.
THE
REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES AS
MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE A
FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF THE
SECURITIES ACT OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON
SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SUCH 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 (“SEC”) 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.
PRELIMINARY
PROSPECTUS
Subject
to completion, dated March __, 2010
EXMOVERE
HOLDINGS, INC.
1,140,407
SHARES OF COMMON
STOCK
The
selling security holders named in this prospectus are offering all of the shares
of common stock offered through this prospectus. We will not receive
any proceeds from the sale of the common stock covered by this
prospectus.
Our
common stock is presently not traded on any market or securities exchange. The
selling security holders have not engaged any underwriter in connection with the
sale of their shares of common stock. Common stock being registered
in this registration statement may be sold by selling security holders at a
fixed price of $3.50 per share until our common stock is quoted on the OTC
Bulletin Board (“OTCBB”) and thereafter at a prevailing market prices or
privately negotiated prices or in transactions that are not in the public
market. There can be no assurance that a market maker will agree to file the
necessary documents with the Financial Industry Regulatory Authority (“FINRA”),
which operates the OTCBB, nor can there be any assurance that such an
application for quotation will be approved. We have agreed to bear the expenses
relating to the registration of the shares of the selling security
holders.
Investing
in our common stock involves a high degree of risk. See “Risk Factors” beginning
on page 5 to read about factors you should consider before buying shares of
our common stock.
NEITHER THE SECURITIES AND EXCHANGE
COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF
THESE SECURITIES OR DETERMINED IF THIS PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
The
Date of This Prospectus
is:
, 2010
TABLE
OF CONTENTS
PAGE
|
|
Prospectus
Summary
|
1
|
Summary
of Financial Information
|
4
|
Risk
Factors
|
5
|
Use
of Proceeds
|
1 2
|
Determination
of Offering Price
|
1 3
|
Dilution
|
1 3
|
Selling
Shareholders
|
1 3
|
Plan
of Distribution
|
1 5
|
Description
of Securities to be Registered
|
1 6
|
Interests
of Named Experts and Counsel
|
1 7
|
Description
of Business
|
1 7
|
Description
of Property
|
29
|
Legal
Proceedings
|
29
|
Market
for Common Equity and Related Stockholder Matters
|
29
|
Index
to the Financial Statements
|
31
|
Management
Discussion and Analysis of Financial Condition and Financial
Results
|
32
|
Plan
of Operations
|
32
|
Executive
Compensation
|
37
|
Security
Ownership of Certain Beneficial Owners and
Management
|
38
|
Transactions
with Related Persons, Promoters and Certain Control
Persons
|
38
|
Disclosure
of Commission Position on Indemnification of Securities Act
Liabilities
|
38
|
Other
Expenses of Issuance and Distribution
|
41
|
Indemnification
of Directors and Officers
|
41
|
Recent
Sales of Unregistered Securities
|
41
|
Exhibits
and Financial Statement Schedules
|
45
|
ITEM
3. SUMMARY INFORMATION, RISK FACTORS AND RATIO OF EARNINGS TO FIXED
CHARGES.
PROSPECTUS
SUMMARY
This
summary highlights selected information contained elsewhere in this
prospectus. This summary does not contain all the information that
you should consider before investing in the common stock. You should
carefully read the entire prospectus, including “Risk Factors”, “Management’s
Discussion and Analysis of Financial Condition and Results of Operations” and
the Financial Statements, before making an investment decision. In this
Prospectus, the terms “Exmovere,” “Company,” “we,” “us” and “our” refer to
Exmovere Holdings, Inc.
Our
Corporate History
The Company was incorporated in the State of Delaware on
December 18, 2006 as Clopton House Corporation (“Clopton
House”). Based on the Company’s Form 10-SB filed July 9, 2007,
Clopton House was formed for seeking a merger, acquisition or other business
combination transaction with a privately owned entity seeking to become a
publicly owned entity. Pursuant to the terms of a certain Stock
Purchase Agreement (the “Stock Purchase Agreement”) dated January 28, 2009 (the
“Purchase Date”) between BT2 International, Inc. (“BT2 International”), Belmont
Partners, LLC (“Belmont”) and Clopton House, BT2 International purchased a total
of 100,000 shares of the issued and outstanding common stock of Clopton House
(the “Purchase”), from Belmont in exchange for cash and a three percent common
stock interest in the Company after taking into account the transfer of certain
licenses, as discussed in more detail below. The total of 100,000 shares
represented 100% of the shares of issued and outstanding common stock of the
Company at the time of transfer.
Concurrent
with the Purchase, David Bychkov was appointed as a Director, President and
Secretary of the Company and Joseph Meuse, the managing partner of Belmont,
resigned as Director, President and Secretary of the
Company. Immediately, David Bychkov appointed a new Board of
Directors, a new Secretary and a new management team. On the Purchase
Date, the new Board of Directors approved a) the issuance of an additional
15,003,000 common shares, making the total outstanding shares 15,103,000 and b)
the transfer of technology licenses (the “Exmo Licenses”) owned by BT2
International to the Company. Belmont received 453,000 of the newly
issued shares of Exmovere pursuant to the terms of the Stock Purchase Agreement,
which required Belmont to receive a three percent (3%) interest in the Company
after the transfer of the Licenses (in the Stock Purchase Agreement this was
described as the 3% post Vend-in of IP interest). In exchange for the
Exmo Licenses, the Company simultaneously, issued an aggregate of 13,010,000
common shares to BT2 International, David Bychkov, Cheyenne Crow and Robert
Doornick and an additional 1,540,000 shares to other individuals or entities
instrumental in the development of the technology, each of which own directly
and/or indirectly less than 5% of the Company.
Our
Business Goals
We are a company that is still in the development stage. The
Company plans to acquire,
develop and market products that have a focus on healthcare, security, and
transportation and to also purchase and integrate existing, profitable
healthcare businesses. The Company’s Exmo Licenses relate to devices that analyze,
translate, record and transmit biological variables such as electric potentials,
body movement, body temperature, body fluids, chemical concentrations, emotions
etc. into electrical signals and are known as
“biosensors”. More specifically, the Company owns licenses to the
technology for biosensor wristwatches, biosensor turnstiles, biosensor computer mouses, biosensor steering wheels and systems
to detect emotions from such biosensor products and other related
technologies. The technology was
originally created by David Bychkov and developed by Mr. Bychkov and others through the following
entities ; Exmovere LLC, Exmocare LLC, Exmogate LLC and BT2
International. The Company recently purchased
the exclusive right to use patents owned or controlled by Sensatex, Inc.
involving advanced textile technology and the monitoring of the vital signs of
infants (the “Sensatex Licenses”).
Our
Products
The biosensor wristwatches, called the Telepath (“Telepath”) and Empath (“Empath”) respectively, are intended for mass production
and sale to mature adults who need assistance with their daily living and could
benefit from the Empath’s ability to monitor their own vital signs on a regular
basis and the Telepath’s ability to transmit data by Bluetooth. Bluetooth is a wireless protocol licensed and registered by
Bluetooth Special Interest Group (SIG) that uses short-range communications
technology to help transmit data over short distances from fixed and/or mobile
devices, creating wireless personal area networks. The Company is registered and
licensed to use Bluetooth. In the case of the Telepath, the
vital sign results will be monitored by security companies, phone companies,
etc. These data will be assessed by the computers that receive the signals, and
then the computer s will
determine what type of corrective action may be needed on a patient-by-patient
basis.
1
The
Exmogate Turnstile (“Exmogate Turnstile”) is a biosensor-enhanced entry device
similar to a subway turnstile or a metal detector except that it detects
hostility, ensures guard vigilance, and, when required, can block
entry. It is intended for development, mass production and sale to
government agencies, military bases, foreign embassies and governments, airports
and train stations, sports arenas and corporate buildings.
The
Exmovere Mouse (the “Exmovere Mouse”) is a standard mouse with built–in
electronics capable of measuring the skin response and heart rate of a person
who places his/her hands on the surface of the mouse. The Exmovere
Car Steering Wheel (the “Steering Wheel”) is a steering wheel with embedded
metal electrodes (an electrode is a conductor or medium by which an electric
current is conducted from metal to another medium, such as a cell, body or
apparatus) that act as skin responsive sensors that can read skin response,
heart rate and environmental data.
Exmovere’s
Exmobaby (“Exmobaby”) is a new product in the development stages that the
Company is developing using the Sensatex Licenses. The Exmobaby will
be a brand of garments for infants that will use biosensor technology to allow
parents to monitor their infant’s vital signs from another
location.
The C ompany’ s Licenses also include intellectual property related to the
detection of human emotions from vital sign data collected by internal or external biosensors. These emotion
detection devices may be used to detect: like,
dislike, stress, relaxation, anger, depression and a multitude of other human
emotional states with more reliable results when
compared to self-reporting by test subjects.
Exmovere’s
Chariot (“Chariot”) is a self-balancing upright mobility device that surrounds
the user’s thighs, hips and legs in a kind of cocoon. The user’s hands, arms and
chest remain free to do whatever is desired. This would position the vehicle as
a direct competitor to existing sit-down scooters marketed to obese, elderly and
limited mobility persons.
Costs
to Develop and/or Market our Products
The
Company is not going to attempt to market each of its products at this time due
to capital limitations. Therefore, the marketing and/or development
of the Steering Wheel and the Exmovere Mouse will be delayed until the Company
can generate revenue from its other products or business. The Company
expects that it will need at least two million dollars to manufacture and market
the Telepath and Empath. The Company estimates that the marketing of the
Exmogate Turnstile will cost at least one million dollars and it will cost at
least two million dollars to develop the Chariot into a consumer ready product
in compliance with all applicable regulations. The Company estimates
a cost of at least one million dollars to develop Exmobaby inventory and market
it to retailers. Although the Exmovere Mouse and the Steering Wheel
are not in the Company’s marketing plans for the next year, the Company
estimates that it would cost an additional three million dollars to develop or
market those products. The Company anticipates needing up to 2.8
million dollars for advertising costs.
Risks
Associated with Our Business
Our
business is subject to numerous risks, as more fully described in the section
entitled “Risk Factors.” We are a development stage company and we have limited
operating history for investors to evaluate the potential of our business
development. We may be unable for many reasons, including those that
are beyond our control, to implement our current business strategy. We are
dependent on our success in either obtaining a FDA 510k regulatory exemption or
obtaining the regulatory clearances to market our products in major markets. In
the event that the completion of the testing required for FDA approval is
delayed or the FDA requires additional testing to be conducted, the time for
filing the application and for getting the FDA’s response or clearance would be
delayed. Also, in the event that the FDA requires us to file a pre-market
approval, or PMA, a more detailed process for obtaining marketing approvals, the
time until we may market our products in the United States would be further
delayed. We may also be subject to other rules and regulations, such as state
and federal health care regulations, federal contracting rules and foreign
laws.
Moreover,
we have not generated any revenue. We cannot give you any assurance
that any of our research and development will be completed or that we will
obtain the necessary resources to market our products.
2
Where
You Can Find Us
Our
principal executive office is located at 1600 Tysons Boulevard, 8th Floor, McLean, VA and our
telephone number is (703) 245-8513. Our website is www.exmovere.com. The
information found on, or accessible through, the website does not contain all of
the information necessary to evaluate this offering and is not part of this
prospectus.
The
Offering
Common
stock offered by selling security holders
|
1,140,407 shares of common stock. This number
represents approximately 7.27% of our current
outstanding common stock (1).
|
|
Common
stock outstanding before the offering
|
15,675,998 common shares as of December 31 , 2009.
|
|
Common
stock outstanding after the offering
|
15,675,998 shares.
|
|
Terms
of the Offering
|
The
selling security holders will determine when and how they will sell the
common stock offered in this prospectus.
|
|
Termination
of the Offering
|
The
offering will conclude upon the earliest of (i) such time as all of the
common stock has been sold pursuant to the registration statement or (ii)
such time as all of the common stock becomes eligible for resale without
volume limitations pursuant to Rule 144 under the Securities Act, or any
other rule of similar effect.
|
|
Use
of proceeds
|
We
are not selling any shares of the common stock covered by this
prospectus.
|
|
Risk
Factors
|
The
Common Stock offered hereby involves a high degree of risk and should not
be purchased by investors who cannot afford the loss of their entire
investment. See “Risk Factors” beginning on page 5.
|
(1)
|
Based
on 15,675,998 shares of common stock
outstanding as of December 31,
2009.
|
3
Summary
of Consolidated Financial Information
The
following table provides summary consolidated financial statement data as of and
for each of the fiscal years ended December 31, 2008 and 2007, and the unaudited
financial information for the nine months ended September 30, 2009 and 2008. The
financial statement data as of and for each of the fiscal years ended December
31, 2008 and 2007 have been derived from our audited consolidated financial
statements. The results of operations for past accounting periods are not
necessarily indicative of the results to be expected for any future accounting
period. The data set forth below should be read in conjunction with
“Management’s Discussion and Analysis of Financial Condition and Results of
Operations,” our consolidated financial statements and the related notes
included in this prospectus, and the unaudited financial statements and related
notes included in this prospectus.
For
the nine
|
For
the nine
|
For
the Year
|
From
Inception
|
|||||||||||||
Months
Ended
|
Months
Ended
|
Ended
|
Through
|
|||||||||||||
September
30,
|
September
30,
|
December
31,
|
December
30,
|
|||||||||||||
2009
|
2008
|
2008
|
2007
|
|||||||||||||
(unaudited)
|
(unaudited)
|
|||||||||||||||
REVENUE
|
$
|
-
|
$
|
-
|
$
|
--
|
$
|
-
|
||||||||
TOTAL
OPERATING EXPENSES
|
317,020
|
3,517
|
4,754
|
21
|
||||||||||||
LOSS
FROM OPERATIONS
|
(317,020
|
)
|
(3,517
|
)
|
(4,754
|
)
|
(21
|
)
|
||||||||
TOTAL
OTHER INCOME (EXPENSES)
|
4,754
|
-
|
--
|
-
|
||||||||||||
NET
LOSS
|
$
|
(312,266
|
)
|
$
|
(3,517
|
)
|
$
|
(4,754
|
)
|
$
|
(21
|
)
|
||||
NET
LOSS PER COMMON SHARE – BASIC AND DILUTIVE
|
$
|
(0.02
|
)
|
$
|
(0.00
|
)
|
$
|
(0.05
|
)
|
$
|
(0.00
|
)
|
||||
Weighted
Average Number of Shares
|
12,840,506
|
100,000
|
100,000
|
79,167
|
As
of
|
As
of
|
As
of
|
||||||||||
September
30,
|
December
31,
|
December
31,
|
||||||||||
2009
|
2008
|
2007
|
||||||||||
(unaudited)
|
||||||||||||
TOTAL
CURRENT ASSETS
|
$
|
328,313
|
$
|
79
|
$
|
79
|
||||||
TOTAL
ASSETS
|
22,832,818
|
79
|
79
|
|||||||||
TOTAL
LIABILITIES
|
13,013
|
4,754
|
4,571
|
|||||||||
TOTAL
STOCKHOLDERS’ EQUITY (DEFICIT)
|
22,819,805
|
(4,675
|
)
|
79
|
||||||||
TOTAL
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
|
$
|
22,832,818
|
$
|
79
|
$
|
79
|
4
RISK
FACTORS
The
shares of our common stock being offered for resale by the selling security
holders are highly speculative in nature, involve a high degree of risk and
should be purchased only by persons who can afford to lose the entire amount
invested in the common stock. Before purchasing any of the shares of common
stock, you should carefully consider the following factors relating to our
business and prospects. If any of the following risks actually occurs, our
business, financial condition or operating results could be materially adversely
affected. In such case, you may lose all or part of your
investment. You should carefully consider the risks described below
and the other information in this process before investing in our common
stock.
Risks
Related to Our Business
WE
HAVE LIMITED OPERATING HISTORY AND FACE MANY OF THE RISKS AND DIFFICULTIES
FREQUENTLY ENCOUNTERED BY A DEVELOPMENT STAGE
COMPANY.
We are a
development stage company, and to date, our development efforts have been
focused primarily on the research, design, development and marketing of our
business model. We have limited operating history for investors to evaluate the
potential of our business development. We have not built our customer base and
our brand name. In addition, we also face many of the risks and difficulties
inherent in introducing new products and services. These risks include the
ability to:
|
·
|
Increase
awareness of our brand name;
|
|
·
|
Develop
effective business plan;
|
|
·
|
Meet
customer standard;
|
|
·
|
Implement
advertising and marketing plan;
|
|
·
|
Attain
customer loyalty;
|
|
·
|
Maintain
current strategic relationships and develop new strategic
relationships;
|
|
·
|
Respond
effectively to competitive
pressures;
|
|
·
|
Continue
to develop and upgrade our service;
and
|
|
·
|
Attract,
retain and motivate qualified
personnel.
|
Our
future will depend on our ability to bring our service to the market place,
which requires careful planning of providing a product that meets customer
standards without incurring unnecessary cost and expense. Our operating results
can also be affected by our ability to introduce new services or to adjust
pricing to increase our competitive advantage.
OUR
AUDITOR HAS EXPRESSED SUBSTANTIAL DOUBT AS TO OUR ABILITY TO CONTINUE AS A GOING
CONCERN.
Based on
our financial history since inception, our auditor has expressed substantial
doubt as to our ability to continue as a going concern. We are a development
stage company that has never generated any revenue. If we cannot obtain
sufficient funding, we may have to delay the implementation of our business
strategy.
WE
CURRENTLY HAVE NO REVENUES.
We
currently have no revenues and have sustained net losses of $312,266 for the nine months
ended September 30, 2009. We cannot give you any
assurance that we will experience any positive revenues for the foreseeable
future.
WE
NEED TO COMPLETE ADDITIONAL RESEARCH AND DEVELOPMENT AND RAISE CAPITAL TO
DEVELOP OUR BUSINESS.
The
development of our products will require additional research and development and
the commitment of substantial resources to bring them to market. Therefore, it
is likely we would need to seek additional financing through subsequent future
private offering of our equity securities, or through strategic partnerships and
other arrangements.
5
We cannot
give you any assurance that any our research and development will be completed
or that additional financing will be available to us, or if available, will be
on terms favorable to us. The sale of additional equity securities will result
in dilution to our stockholders. The occurrence of indebtedness would result in
increased debt service obligations and could require us to agree to operating
and financing covenants that would restrict our operations. If adequate
additional financing is not available on acceptable terms, we may not be able to
develop our products or continue our business operations.
WE
CURRENTLY HAVE NO MANUFACTURERS OR DISTRIBUTORS FOR OUR PRODUCTS.
We do not
have agreements with manufacturers for our products or distribution
agreements. We cannot give you any assurance that we will be able to complete agreements with manufacturers and
distributors for our products. If we cannot reach agreements with manufacturers
or distributors our products may not be available to the public.
WE
NEED ADDITIONAL CAPITAL TO DEVELOP OUR BUSINESS.
The
development of our services will require the commitment of substantial resources
to increase our advertising and marketing of our business. In addition,
substantial expenditures will be required to enable us to conduct existing and
planned business research, design, development and marketing of our
existing services. Currently, we have no established bank-financing
arrangements. Therefore, it is likely we would need to seek additional financing
through subsequent future private offering of our equity securities, or through
strategic partnerships and other arrangements with corporate
partners.
We cannot
give you any assurance that any additional financing will be available to us, or
if available, will be on terms favorable to us. The sale of additional equity
securities could result in dilution to our stockholders. The occurrence of
indebtedness would result in increased debt service obligations and could
require us to agree to operating and financing covenants that would restrict our
operations. If adequate additional financing is not available on acceptable
terms, we may not be able to implement our business development plan or continue
our business operations.
WE
MAY NOT BE ABLE TO BUILD OUR BRAND AWARENESS.
Development
and awareness of our brand will depend largely upon our success in increasing
our customer base. In order to attract and retain customers and to promote and
maintain our brand in response to competitive pressures, management plans to
gradually increase our marketing and advertising budgets. If we are unable
to economically promote or maintain our brand, our business, results of
operations and financial condition could be severely harmed.
THE
BIOSENSOR TECHNOLOGY SPACE IS HIGHLY COMPETITIVE AND FRAGMENTED, WHICH MEANS
THAT OUR CUSTOMERS HAVE A NUMBER OF CHOICES FOR PROVIDERS OF SERVICES AND
PRODUCTS AND WE MAY NOT BE ABLE TO COMPETE EFFECTIVELY.
The
market for our products is highly competitive. The market is fragmented, there
are a wide variety of product offerings with different capabilities, and no
company holds a dominant position. Consequently, our competition for clients
varies significantly. Most of our competitors are larger and have
greater technical, financial, and marketing resources and greater name
recognition than we have in the markets we collectively serve.
OUR
ABILITY TO CONTINUE TO DEVELOP AND EXPAND OUR PRODUCT OFFERINGS TO ADDRESS
EMERGING BUSINESS DEMANDS AND TECHNOLOGICAL TRENDS WILL IMPACT OUR FUTURE
GROWTH. IF WE ARE NOT SUCCESSFUL IN MEETING THESE BUSINESS CHALLENGES, OUR
RESULTS OF OPERATIONS AND CASH FLOWS WILL BE MATERIALLY AND ADVERSELY
AFFECTED.
Our
ability to implement solutions for our customers incorporating new developments
and improvements in technology which translate into productivity improvements
for our customers and to develop product offerings that meet the current and
prospective customers’ needs is critical to our
success. The markets we serve are highly competitive. Our competitors may
develop solutions or services which make our offerings obsolete. Our ability to
develop and implement up to date solutions utilizing new technologies which meet
evolving customer needs in backup and disaster recovery solutions will impact
our future revenue growth and earnings.
6
OUR
FUTURE SUCCESS IS DEPENDENT, IN PART, ON THE PERFORMANCE AND CONTINUED SERVICE
OF DAVID BYCHKOV, PRESIDENT, CHAIRMAN, CHIEF EXECUTIVE OFFICER AND CHIEF
FINANCIAL OFFICER, AND CHEYENNE CROW, CHIEF OPERATING OFFICER. WITHOUT THEIR
CONTINUED SERVICE, WE MAY BE FORCED TO INTERRUPT OR EVENTUALLY CEASE OUR
OPERATIONS.
We are
presently dependent to a great extent upon the experience, abilities and
continued services of David Bychkov as President,
Chairman, Chief Executive Officer and Chief Financial Officer, and Cheyenne Crow
as Chief Operating Officer. We currently do not have
an employment agreement with Mr. Bychkov or Mr. Crow. The loss of the services
of our officers could have a material adverse effect on our business, financial
condition or results of operation.
OUR
FUTURE GROWTH MAY REQUIRE RECRUITMENT OF QUALIFIED
EMPLOYEES.
In the
event of our future growth in administration, marketing, manufacturing and
customer support functions, we may have to increase the depth and experience of
our management team by adding new members. Our future success will depend to a
large degree upon the active participation of our key officers and employees.
There is no assurance that we will be able to employ qualified persons on
acceptable terms. Lack of qualified employees may adversely affect our business
development.
WE
HAVE LIMITED CURRENT SALES AND MARKETING CAPABILITY.
We have
no key personnel with experience in sales, marketing and distribution.
Therefore, we must either retain and hire the necessary personnel to distribute
and market our products or enter into collaborative arrangements or distribution
agreement with third parties who will market such products or develop their own
marketing and sales force with technical expertise and supporting distribution
capability. There can be no assurance that we will be able to retain or hire the
personnel with sufficient experience and knowledge to distribute and market our
products or be able to enter into collaborative or distribution arrangements or
develop our own sales sale force, or that such sales and marketing efforts,
including the efforts of the companies, with which we have entered into
collaborative agreements, will be successful.
WE
MAY INCUR SIGNIFICANT COSTS TO BE A PUBLIC COMPANY TO ENSURE COMPLIANCE WITH
U.S. CORPORATE GOVERNANCE AND ACCOUNTING REQUIREMENTS AND WE MAY NOT BE ABLE TO
ABSORB SUCH COSTS.
We may
incur significant costs associated with our public company reporting
requirements, costs associated with newly applicable corporate governance
requirements, including requirements under the Sarbanes-Oxley Act of 2002 and
other rules implemented by the Securities and Exchange Commission. We expect all
of these applicable rules and regulations to significantly increase our legal
and financial compliance costs and to make some activities more time consuming
and costly. We also expect that these applicable rules and regulations may make
it more difficult and more expensive for us to obtain director and officer
liability insurance and we may be required to accept reduced policy limits and
coverage or incur substantially higher costs to obtain the same or similar
coverage. As a result, it may be more difficult for us to attract and retain
qualified individuals to serve on our board of directors or as executive
officers. We are currently evaluating and monitoring developments with respect
to these newly applicable rules, and we cannot predict or estimate the amount of
additional costs we may incur or the timing of such costs. In addition, we may
not be able to absorb these costs of being a public company which will
negatively affect our business operations.
7
THE LACK OF PUBLIC COMPANY EXPERIENCE
OF OUR MANAGEMENT TEAM COULD ADVERSELY IMPACT OUR ABILITY TO COMPLY WITH THE
REPORTING REQUIREMENTS OF U.S. SECURITIES LAWS.
Our management team lacks
public company experience, which could impair our ability to comply with legal
and regulatory requirements such as those imposed by the Sarbanes-Oxley Act of 2002. Our senior management has
never had responsibility for managing a publicly traded company. Such
responsibilities include complying with federal securities laws and making
required disclosures on a timely basis. Our senior management may not be able to
implement programs and policies in an effective and timely manner that
adequately respond to such increased legal, regulatory compliance and reporting
requirements, including the establishing and maintaining internal controls over
financial reporting. Any such deficiencies, weaknesses or lack of
compliance could have a materially adverse effect on our ability to comply with
the reporting requirements of the Securities Exchange Act of 1934 which is
necessary to maintain our public company status. If we were to fail to fulfill
those obligations, our ability to continue as a U.S. public company would be in
jeopardy in which event you could lose your entire investment in our
company.
POTENTIAL FUTURE DELAYS IN PRODUCT
MARKETING DUE TO STRINGENT GOVERNMENT REGULATION.
Unless
the Company’s products are considered exempt from Section 510k of the FDA
Modernization Act of 1997 (the FDAMA) (Pub. L. 105-115), which amended the
device provisions of the Federal Food, Drug, and Cosmetic Act (the “Act”), the
Company's products may be subject to extensive regulation by the U.S. Food and
Drug Administration (the "FDA") and, in some jurisdictions, by state and foreign
governmental authorities. The Company expects that its products will
fit under a FDA regulatory exemption but there is no guarantee the Company will
qualify for such exemption and even exempt products are required to be
registered with the FDA. In particular, the Company may be required
to obtain specific clearance or approval from the FDA before it can market new
products or certain modified products in the U.S. The Company's
ability to market such products is subject to the availability of
funds. The testing on humans of the Company's devices, and the sale
of such devices, are subject to federal and possibly other regulation. Such
regulatory processes may be expected to result in delay and additional expense
in the future in connection with testing and sale of products for which the
Company has not received PMA or 510(k) premarket clearance, modifying existing
products and developing future product applications. The Company also
has to comply with Good Manufacturing Practices, which require that the Company
manufacture its products and maintain its records in a prescribed manner with
respect to manufacturing product applications. There is no assurance that all
required clearances or approvals for sale of the Company's devices in the U.S.
will be obtained. The process of obtaining 510(k) clearances or PMA can be time
consuming and expensive, and there can be no assurance that all clearances or
approvals sought by the Company will be granted or that FDA review will not
involve delays that would adversely affect the marketing and sale of the
Company's products. The Company is required to adhere to applicable regulations
setting forth current, testing and control activities. In addition, the Company
is required to comply with FDA requirements for labeling and promotion of its
products. Failure to comply with applicable federal, state or foreign laws or
regulations could subject the Company to enforcement action, including product
seizures, recalls, withdrawal of clearances or approvals, and civil and criminal
penalties, any one or more of which would have a material adverse effect on the
Company. Medical device laws and regulations with similar substantive and
enforcement provisions are also in effect in many of the foreign countries where
the Company may eventually do business. Federal, state and foreign laws and
regulations regarding the manufacture and sale of medical devices are subject to
future changes. No assurance can be given that such changes will not have a
material adverse effect on the Company.
We may
decide to market some of our products in Europe. In the 25 member
states of the European Union (EU), there is a consolidated system for the
authorization of medical devices. The system of regulating medical devices
operates by way of a certification for each medical device. Each certificated
device is marked with a CE mark which shows that the device has a Certificat de
Conformité. There are National Bodies, also known as Competent Authorities, in
each member state that oversee the implementation of the EU Medical Device
Directive within their jurisdiction. The means for achieving the requirements
for a CE mark vary according to the nature of the device. Under the requirements
of EU member states, our product may be required to be assessed by a Notified
Body. If a Notified Body of one member state has issued a Certificat de
Conformité, the device can be sold throughout the European Union without further
conformance tests being required in other member states. Even
if we receive the necessary approval for marketing our products in Europe, we
must continue to comply with the EU’s regulations and directives. Our failure to
comply with such regulations could lead to the imposition of injunctions,
suspensions or loss of regulatory clearances or approvals, product recalls,
termination of distribution, product seizures or civil penalties. In the most
egregious cases, criminal sanctions or closure of our manufacturing facilities
are possible.
8
We may
also be subject to regulation by the U.S. Consumer Product Safety Commission
which regulates children’s sleepwear and other apparel manufactured from
biosensor-enabled fabrics. The Federal Trade Commission (FTC) may also have
regulations that affect the labeling of the Exmobaby garments with regard to
fabric content and care labeling. Failure to comply with these
regulations may result in civil money penalties, recalls and harm to
consumers.
IF WE PURSUE OUR GOAL OF ACQUIRING
HEALTH CARE FACILITIES, WE MAY BE SUBJECT TO FEDERAL, STATE AND FOREIGN
HEALTHCARE FRAUD AND ABUSE LAWS AND REGULATIONS AND OTHER REGULATORY REFORMS,
AND A FINDING OF FAILURE TO COMPLY WITH SUCH LAWS, REGULATIONS AND REFORMS COULD
HAVE A MATERIAL ADVERSE EFFECT ON OUR BUSINESS.
Our
operations may be directly or indirectly affected by various broad Federal and
state healthcare fraud and abuse laws. These include the Federal anti-kickback
statute, which prohibits any person from knowingly and willfully offering,
paying, soliciting or receiving remuneration, directly or indirectly, in return
for or to induce the referring, ordering, leasing, purchasing or arranging for
or recommending the ordering, purchasing or leasing of an item or service, for
which payment may be made under Federal healthcare programs, such as the
Medicare and Medicaid programs. The Federal anti-kickback statute is very broad
in scope, and many of its provisions have not been uniformly or definitively
interpreted by existing case law or regulations. In addition, many states have
adopted laws similar to the Federal anti-kickback statute, and some of these
laws are broader than that statute in that their prohibitions are not limited to
items or services paid for by a Federal healthcare program but, instead, apply
regardless of the source of payment. While we never have had any such
relationships, in the event that we enter into financial relationships with
healthcare providers and others who provide products or services to Federal
healthcare program beneficiaries or who are in a position directly or indirectly
to recommend or arrange for use of our product, we will potentially be governed
by the Federal anti-kickback statute and similar state laws. If our future
operations are found to be in violation of these laws, we or our officers
individually may be subject to civil or criminal penalties, including large
monetary penalties, damages, fines, imprisonment and exclusion from Medicare and
Medicaid program participation.
In
addition, if we sell our products to federal government agencies, we will have
to comply with the Federal Acquisition Regulations (FAR). This system consists
of sets of regulations issued by agencies of the Federal government of the
United States to govern what is called the "acquisition process," which is the
process through which the government purchases goods and services. That process
consists of three phases: (1) need recognition and acquisition planning, (2)
contract formation, and (3) contract administration. The FAR System regulates
the activities of government personnel in carrying out that
process. If our activities were found to violate Federal or state
false claims provisions, it could have a material adverse effect on our business
and results of operations.
We could
also be subject to investigation and enforcement activity under Title II of the
Health Insurance Portability and Accountability Act of 1996, or HIPAA, which
created a new Federal healthcare fraud statute that prohibits knowingly and
willfully executing a scheme to defraud any healthcare benefit program,
including private payors. A violation of this statute is a felony and could
result in fines, imprisonment or exclusion from government-sponsored
programs.
In the
United States, there have been a number of legislative and regulatory proposals
to change the healthcare system in ways that could impact our ability to sell
our products profitably. Federal and state lawmakers regularly propose and, at
times, enact new legislation establishing significant changes in the healthcare
system. We cannot predict whether new Federal legislation will be enacted in the
future or the full impact that any such new legislation will have on our
business. The potential for adoption of healthcare reform proposals on a
state-by-state basis could require us to develop state-specific marketing and
sales approaches. In addition, we may experience pricing pressures in connection
with the sale of our products due to additional legislative proposals or
healthcare reform initiatives. Our results of operations and our business could
be adversely affected by future healthcare reforms.
9
OUR
PRODUCTS MAY IN THE FUTURE BE SUBJECT TO PRODUCT RECALLS THAT COULD HARM OUR
REPUTATION, BUSINESS AND FINANCIAL RESULTS.
The FDA,
FTC and similar foreign governmental authorities have the authority to require
the recall of commercialized products in the event of material deficiencies or
defects in design or manufacture. In the case of the FDA, the authority to
require a recall must be based on an FDA finding that there is a reasonable
probability that the device would cause serious adverse health consequences or
death. In addition, foreign governmental bodies have the authority to require
the recall of our products in the event of material deficiencies or defects in
design or manufacture. Manufacturers may, under their own initiative, recall a
product if any material deficiency in a device is found. A government-mandated
or voluntary recall by us or one of our distributors could occur as a result of
component failures, manufacturing errors, design or labeling defects or other
deficiencies and issues. Recalls of any of our products would divert managerial
and financial resources, and have an adverse effect on our financial condition
and results of operations.
ONCE
PRODUCTS SALES OCCUR THERE IS A FUTURE RISK OF MATERIAL ADVERSE EFFECT OF ANY
PRODUCT LIABILITY CLAIMS.
Although
the Company carries product liability insurance, there is no assurance that the
Company will not be subjected to substantial claims based upon alleged injurious
effects from the use of its devices and that its product liability insurance
will be maintained, will be available on commercially reasonable rates or in
adequate amounts, if at all, or will be adequate to cover any claim made. If the
Company does not or cannot maintain its existing or comparable liability
insurance, its ability to market its products may be significantly impaired.
Product liability claims or product recalls in the future, regardless of their
ultimate outcome, could result in costly litigation and could have a material
adverse effect on the Company's business or reputation or on its ability to
attract and retain customers for its products.
OUR
ABILITY TO PROTECT OUR INTELLECTUAL PROPERTY AND PROPRIETARY TECHNOLOGY THROUGH
PATENTS AND OTHER MEANS IS UNCERTAIN.
Our
success depends significantly on our ability to protect our intellectual
property and proprietary technologies. We rely on patent-pending protection, as
well as nondisclosure, confidentiality and other contractual restrictions to
protect our proprietary technology. These legal means, however, afford only
limited protection and may not adequately protect our rights or permit us to
gain or keep any competitive advantage. Our provisional pending U.S. patent
applications may not issue as patents or may not issue in a form that will be
advantageous to us. If we do not receive patents for these applications or do
not receive adequate protections, our developments will not have any proprietary
protection and other entities will be able to make the products and compete with
us. Also, any patents we have obtained or do obtain may be challenged by
re-examination, opposition or other administrative proceeding, or may be
challenged in litigation, and such challenges could result in a determination
that the patent is invalid. In addition, competitors may be able to design
alternative methods or devices that avoid infringement of our patents. To the
extent our intellectual property protection offers inadequate protection, or is
found to be invalid, we are exposed to a greater risk of direct competition.
Both the patent application process and the process of managing patent disputes
can be time consuming and expensive. Furthermore, the laws of some foreign
countries may not protect our intellectual property rights to the same extent as
do the laws of the United States.
In
addition to pursuing patents on our technology, we have taken steps to protect
our intellectual property and proprietary technology by entering into
confidentiality agreements and intellectual property assignment agreements with
our employees, consultants, corporate partners and, when needed, our advisors.
Such agreements may not be enforceable or may not provide meaningful protection
for our trade secrets or other proprietary information in the event of
unauthorized use or disclosure or other breaches of the agreements, and we may
not be able to prevent such unauthorized disclosure. Monitoring unauthorized
disclosure is difficult, and we do not know whether the steps we have taken to
prevent such disclosure are, or will be, adequate. The inability to protect our
intellectual property could adversely affect our competitive position and our
business operations.
Risk
Related To Our Capital Stock
WE
MAY NEVER PAY ANY DIVIDENDS TO SHAREHOLDERS.
We have
never declared or paid any cash dividends or distributions on our capital stock.
We currently intend to retain our future earnings, if any, to support operations
and to finance expansion and therefore we do not anticipate paying any cash
dividends on our common stock in the foreseeable future.
10
The
declaration, payment and amount of any future dividends will be made at the
discretion of the board of directors, and will depend upon, among other things,
the results of our operations, cash flows and financial condition, operating and
capital requirements, and other factors as the board of directors considers
relevant. There is no assurance that future dividends will be paid, and, if
dividends are paid, there is no assurance with respect to the amount of any such
dividend.
OUR
ARTICLES OF
INCORPORATION PROVIDE FOR INDEMNIFICATION OF OFFICERS AND DIRECTORS AT OUR
EXPENSE AND LIMIT THEIR LIABILITY WHICH MAY RESULT IN A MAJOR COST TO US AND
HURT THE INTERESTS OF OUR SHAREHOLDERS BECAUSE CORPORATE RESOURCES MAY BE
EXPENDED FOR THE BENEFIT OF OFFICERS AND/OR DIRECTORS.
Our
articles of incorporation and applicable Delaware law provide for the
indemnification of our directors, officers, employees, and agents, under certain
circumstances, against attorney’s fees and other expenses incurred by them in
any litigation to which they become a party arising from their association with
or activities on our behalf. We will also bear the expenses of such litigation
for any of our directors, officers, employees, or agents, upon such person’s
written promise to repay us if it is ultimately determined that any such person
shall not have been entitled to indemnification. This indemnification policy
could result in substantial expenditures by us,
which we will be unable to recoup.
We have
been advised that, in the opinion of the SEC, indemnification for liabilities
arising under federal securities laws is against public policy as expressed in
the Securities Act and is, therefore, unenforceable. In the event that a claim
for indemnification for liabilities arising under federal securities laws, other
than the payment by us of expenses incurred or paid by a director, officer
or controlling person in the successful defense of any action, suit or
proceeding, is asserted by a director, officer or controlling person in
connection with the securities being registered, we will (unless in the opinion
of our counsel, the matter has been settled by controlling precedent) submit to
a court of appropriate jurisdiction, the question whether indemnification by us
is against public policy as expressed in the Securities Act and will be governed
by the final adjudication of such issue. The legal process relating to this
matter if it were to occur is likely to be very costly and may result in us
receiving negative publicity, either of which factors is
likely to materially reduce the market and price for our shares, if such a
market ever develops.
THE
OFFERING PRICE OF THE COMMON STOCK WAS DETERMINED BASED ON THE PRICE OF OUR
PRIVATE OFFERING, AND THEREFORE SHOULD NOT BE USED AS AN INDICATOR OF THE FUTURE
MARKET PRICE OF THE SECURITIES. THEREFORE, THE OFFERING PRICE BEARS NO
RELATIONSHIP TO OUR ACTUAL VALUE, AND MAY MAKE OUR SHARES DIFFICULT TO
SELL.
Since our
shares are not listed or quoted on any exchange or quotation system, the
offering price of $3.50 per share for the shares of common stock was determined
based on the price of our private offering. The facts considered in determining
the offering price were our financial condition and prospects, our limited
operating history and the general condition of the securities market. The
offering price bears no relationship to the book value, assets or earnings of
our company or any other recognized criteria of value. The offering price should
not be regarded as an indicator of the future market price of the
securities.
YOU
MAY EXPERIENCE DILUTION OF YOUR OWNERSHIP INTEREST BECAUSE OF THE FUTURE
ISSUANCE OF ADDITIONAL SHARES OF OUR COMMON STOCK AND OUR PREFERRED
STOCK.
In the
future, we may issue our authorized but previously unissued equity securities,
resulting in the dilution of the ownership interests of our present
stockholders. We are currently authorized to issue an aggregate of 35,000,000
shares of capital stock consisting of 35,000,000 shares of common stock, par
value $0.001 per share, and no shares of preferred stock.
We may
also issue additional shares of our common stock or other securities that are
convertible into or exercisable for common stock in connection with hiring or
retaining employees or consultants, future acquisitions, future sales of our
securities for capital raising purposes, or for other business purposes. The
future issuance of any such additional shares of our common stock or other
securities may create downward pressure on the trading price of our common
stock. There can be no assurance that we will not be required to issue
additional shares, warrants or other convertible securities in the future in
conjunction with hiring or retaining employees or consultants, future
acquisitions, future sales of our securities for capital raising purposes or for
other business purposes, including at a price (or exercise prices) below the
price at which shares of our common stock are currently quoted on the
OTCBB.
11
OUR
COMMON STOCK IS CONSIDERED A PENNY STOCK, WHICH MAY BE SUBJECT TO RESTRICTIONS
ON MARKETABILITY, SO YOU MAY NOT BE ABLE TO SELL YOUR SHARES.
If our
common stock becomes tradable in the secondary market, we will be subject to the
penny stock rules adopted by the Securities and Exchange Commission that require
brokers to provide extensive disclosure to their customers prior to executing
trades in penny stocks. These disclosure requirements may cause a reduction in
the trading activity of our common stock, which in all likelihood would make it
difficult for our shareholders to sell their securities.
Penny
stocks generally are equity securities with a price of less than $5.00 (other
than securities registered on certain national securities exchanges or quoted on
the NASDAQ system). Penny stock rules require a broker-dealer, prior to a
transaction in a penny stock not otherwise exempt from the rules, to deliver a
standardized risk disclosure document that provides information about penny
stocks and the risks in the penny stock market. The broker-dealer also must
provide the customer with current bid and offer quotations for the penny stock,
the compensation of the broker-dealer and its salesperson in the transaction,
and monthly account statements showing the market value of each penny stock held
in the customer’s account. The broker-dealer must also make a special written
determination that the penny stock is a suitable investment for the purchaser
and receive the purchaser’s written agreement to the transaction. These
requirements may have the effect of reducing the level of trading activity, if
any, in the secondary market for a security that becomes subject to the penny
stock rules. The additional burdens imposed upon broker-dealers by such
requirements may discourage broker-dealers from effecting transactions in our
securities, which could severely limit the market price and liquidity of our
securities. These requirements may restrict the ability of broker-dealers to
sell our common stock and may affect your ability to resell our common
stock.
THERE
IS NO ASSURANCE OF A PUBLIC MARKET OR THAT OUR COMMON STOCK WILL EVER TRADE ON A
RECOGNIZED EXCHANGE. THEREFORE, YOU MAY BE UNABLE TO LIQUIDATE YOUR INVESTMENT
IN OUR STOCK.
There is
no established public trading market for our common stock. Our shares have not
been listed or quoted on any exchange or quotation system. There can be no
assurance that a market maker will agree to file the necessary documents with
FINRA, which operates the OTCBB, nor can there be any assurance that such an
application for quotation will be approved or that a regular trading market will
develop or that if developed, will be sustained. In the absence of a
trading market, an investor may be unable to liquidate their
investment.
SPECIAL
NOTE REGARDING FORWARD-LOOKING STATEMENTS
The
information contained in this report, including in the documents incorporated by
reference into this report, includes some statements
that are not purely historical and that are “forward-looking statements.” Such
forward-looking statements include, but are not limited to, statements
regarding our and their management’s expectations, hopes, beliefs, intentions or
strategies regarding the future, including our financial condition, results of
operations, and the expected impact of the Share Exchange on the parties’
individual and combined financial performance. In addition, any statements that
refer to projections, forecasts or other characterizations of future events or
circumstances, including any underlying assumptions, are forward-looking
statements. The words “anticipates,” “believes,” “continue,” “could,”
“estimates,” “expects,” “intends,” “may,” “might,” “plans,” “possible,”
“potential,” “predicts,” “projects,” “seeks,” “should,” “will,” “would” and
similar expressions, or the negatives of such terms, may identify
forward-looking statements, but the absence of these words does not mean that a
statement is not forward-looking.
The
forward-looking statements contained in this report are based on current
expectations and beliefs concerning future developments and the potential
effects on the parties and the transaction. There can be no assurance that
future developments actually affecting us will be those anticipated. These that
may cause actual results or performance to be materially different from
those expressed or implied by these forward-looking statements, including
the following forward-looking statements involve a number of risks,
uncertainties (some of which are beyond the parties’ control) or other
assumptions.
ITEM
4. USE OF PROCEEDS
We will
not receive any proceeds from the sale of common stock by the selling security
holders. All of the net proceeds from the sale of our common stock will go to
the selling security holders as described below in the sections entitled
“Selling Security Holders” and “Plan of Distribution”. We have agreed
to bear the expenses relating to the registration of the common stock for the
selling security holders.
12
ITEM
5. DETERMINATION OF OFFERING PRICE
Since our
common stock is not listed or quoted on any exchange or quotation system, the
offering price of the shares of common stock was determined by the price of the
common stock that was sold to our security holders pursuant to an exemption
under Section 4(2) of the Securities Act of 1933 and Rule 506 of Regulation D
promulgated under the Securities Act of 1933.
The
offering price of the shares of our common stock does not necessarily bear any
relationship to our book value, assets, past operating results, financial
condition or any other established criteria of value. The facts considered in
determining the offering price were our financial condition and prospects, our
limited operating history and the general condition of the securities
market.
Although
our common stock is not listed on a public exchange, we will be filing to obtain
a listing on the OTCBB concurrently with the notice of the
effective date of this Registration . In order to be quoted on the OTCBB,
a market maker must file an application on our behalf in order to make a market
for our common stock. There can be no assurance that a market maker will agree
to file the necessary documents with FINRA, which operates the OTC Bulletin
Board, nor can there be any assurance that such an application for quotation
will be approved.
In
addition, there is no assurance that our common stock will trade at market
prices in excess of the initial offering price as prices for the common stock in
any public market which may develop will be determined in the marketplace and
may be influenced by many factors, including the depth and
liquidity.
ITEM
6. DILUTION
The
common stock to be sold by the selling shareholders listed
below in Item 7 is common stock that is currently
issued. Accordingly, there will be no dilution to our existing
shareholders
ITEM
7. SELLING SECURITY HOLDERS
The
common shares being offered for resale by the selling security holders consist
of the 1,140,407 shares of our common stock
held by 71 shareholders. Such shareholders include
some of the holders of the 122,101 shares sold in our private offering pursuant to
Regulation D Rule 506 completed in March 2009 at an offering price of $1.50,
some of the 77,820 shares sold in our private
offering pursuant to Regulation D Rule 506 completed in June 2009 at an offering price of $2.50, and some of the 173,077 shares sold in our private offering
pursuant to Regulation D Rule 506 completed in October 2009 at an offering price of $3.50. We are also
registering a total of 925,300 shares for
shareholders who received shares in consideration for transfer of technology
licenses from BT2 International to Exmovere.
The
following table sets forth the name of the selling security holders, the number
of shares of common stock beneficially owned by each of the selling stockholders
as of February 12, 2010 and the number of shares of
common stock being offered by the selling stockholders. The shares being offered
hereby are being registered to permit public secondary trading, and the selling
stockholders may offer all or part of the shares for resale from time to time.
However, the selling stockholders are under no obligation to sell all or any
portion of such shares nor are the selling stockholders obligated to sell any
shares immediately upon effectiveness of this prospectus. All information with
respect to share ownership has been furnished by the selling
stockholders.
Name
|
Shares
Beneficially
Owned
Prior To Offering
|
Shares
to
be
Offered
|
Amount
Beneficially
Owned
After Offering
|
Percent
Beneficially
Owned
After
Offering
|
||||
Amanda
R. Romeo
|
200
|
200
|
0
|
0%
|
||||
Angela
Taylor
|
500
|
500
|
0
|
0%
|
||||
Anita
Tipler
|
61,400
|
61,400
|
0
|
0%
|
||||
Antonio
C. Pam and Demetria L. Pam*
|
100
|
100
|
0
|
0%
|
||||
Carolyn
S. Abshire
|
2,000
|
2,000
|
0
|
0%
|
||||
Catherine
W. Morgan
|
10,000
|
10,000
|
0
|
0%
|
||||
Catherine
W. Morgan and James Morgan*
|
5,000
|
5,000
|
0
|
0%
|
||||
Charles
Lambert
|
2,000
|
2,000
|
0
|
0%
|
||||
Charlynda
Credle
|
100
|
100
|
0
|
0%
|
13
Cheyenne
Crow CUST FBO UTMA VA Amy Crow
|
1,000
|
1,000
|
0
|
0%
|
||||
Cheyenne
Crow CUST FBO UTMA VA Joshua Crow
|
1,000
|
1,000
|
0
|
0%
|
||||
Cheyenne
Crow CUST FBO UTMA VA Lauren Crow
|
1,000
|
1,000
|
0
|
0%
|
||||
Cheyenne
Crow CUST FBO UTMA VA Nicholas Crow
|
1,000
|
1,000
|
0
|
0%
|
||||
Cindy
C. Rojas
|
500
|
500
|
0
|
0%
|
||||
Cleonie
Chang Schwartz
|
500
|
500
|
0
|
0%
|
||||
Daniel
Beckmann
|
300
|
300
|
0
|
0%
|
||||
David
R. Mootsey
|
300
|
300
|
0
|
0%
|
||||
Dawana
B. Robinson
|
100
|
100
|
0
|
0%
|
||||
Deepika
Negi
|
500
|
500
|
0
|
0%
|
||||
Deneen
Stambone
|
500
|
500
|
0
|
0%
|
||||
Derek
Winfield
|
200
|
200
|
0
|
0%
|
||||
Dr.
Philippe A. Lowenstein
|
5,000
|
5,000
|
0
|
0%
|
Easton
Peterson
|
1,000
|
1,000
|
0
|
0%
|
||||
Fab
5 Sportz, LLC(2)
|
120
|
120
|
0
|
0%
|
||||
Foster
Rockwell
|
250
|
250
|
0
|
0%
|
||||
Hokenson
Group, Inc.(1)
|
1,000
|
1,000
|
0
|
0%
|
||||
Jaime
Rojas, Jr.
|
10,000
|
10,000
|
0
|
0%
|
||||
Jakeya
L. Morgan
|
1,000
|
1,000
|
0
|
0%
|
||||
James
Morgan
|
10,000
|
10,000
|
0
|
0%
|
||||
Jaroslava
Pickova
|
40,000
|
40,000
|
0
|
0%
|
||||
Jay
Henderson
|
260,600
|
260,600
|
0
|
1.70%
|
||||
Jeffrey
Lance Thomas
|
2,000
|
2,000
|
0
|
0%
|
||||
Jeong-Hwan
Kim
|
25,000
|
25,000
|
0
|
0%
|
||||
John
Rogers
|
250
|
250
|
0
|
0%
|
||||
Joseph
M. Johnson
|
4,000
|
4,000
|
0
|
0%
|
||||
Kaiesha
C. Morgan
|
1,000
|
1,000
|
0
|
0%
|
||||
Kristopher
Ussery
|
300
|
300
|
0
|
0%
|
||||
Lananh
Nguyen
|
14,286
|
14,286
|
0
|
0%
|
||||
Loring
R. Henderson
|
1,000
|
1,000
|
0
|
0%
|
||||
Lucia
F. Mokhsijerjian
|
200
|
200
|
0
|
0%
|
||||
Marianne
McQuade
|
2,000
|
2,000
|
0
|
0% | ||||
Marie
Colter
|
700
|
700
|
0
|
0%
|
||||
Mark
V. Robinson and Sheila L. Robinson*
|
300
|
300
|
0
|
0%
|
||||
Mary
B. O'Connor
|
500
|
500
|
0
|
0%
|
||||
Miles
Henderson
|
1,000
|
1,000
|
0
|
0%
|
||||
Naseem
Ahmed
|
800
|
800
|
0
|
0%
|
||||
Omi
Komaria Madjid
|
25,000
|
25,000
|
0
|
0%
|
||||
Pamela
M. Norick
|
11,400
|
11,400
|
0
|
0%
|
||||
Phyllis
Abshire d’Hoop
|
500,000
|
500,000
|
0
|
3.30%
|
||||
Quynh
Nguyen
|
300
|
300
|
0
|
0%
|
||||
Raul
Grosz
|
100
|
100
|
0
|
0%
|
||||
Regena
Herndon
|
1,334
|
1,334
|
0
|
0%
|
||||
Reginald
d’Hoop
|
1,000
|
1,000
|
0
|
0%
|
||||
Richard
Barksdale
|
100
|
100
|
0
|
0%
|
14
Richard
G. Miller
|
100
|
100
|
0
|
0%
|
||||
Robert
A. Atkins
|
100
|
100
|
0
|
0%
|
||||
Roseanne
Luth
|
4,000
|
4,000
|
0
|
0%
|
||||
Samuel
and Marie Colter*
|
300
|
300
|
0
|
0%
|
||||
Samuel
Colter
|
200
|
200
|
0
|
0%
|
||||
Scott
Lurding
|
2000
|
2000
|
0
|
0%
|
||||
Semyon
Bychkov
|
100,000
|
100,000
|
0
|
0%
|
||||
Sheniqua
L. Morgan
|
1,000
|
1,000
|
0
|
0%
|
||||
Silvia
Cordovi
|
667
|
667
|
0
|
0%
|
||||
Stephanie
Stevens
|
100
|
100
|
0
|
0%
|
||||
Susan
Hoffmaster
|
1,000
|
1,000
|
0
|
0%
|
||||
Tasneem
Ahmed
|
6,000
|
6,000
|
0
|
0%
|
||||
Thomas
A. Nabi
|
2,000
|
2,000
|
0
|
0%
|
||||
Tiffany
S. Ussery
|
500
|
500
|
0
|
0%
|
||||
William
Peterson
|
1,000
|
1,000
|
0
|
0%
|
||||
Zeda
Rosenberg
|
5,000
|
5,000
|
0
|
0%
|
||||
Zoika
Naskova
|
6,700
|
6,700
|
0
|
0%
|
||||
Total
|
1,140,407
|
———————
*The
shares are owned by respective holders as joint tenants with right of
survivorship.
(1)Jeffrey
D. Hokenson is the principal of Hokenson Group, Inc. Jeffrey D. Hokenson, acting
alone, has voting and dispositive power over the shares beneficially owned by
Hokenson Group, Inc.
(2)Marcelle
Joyner is the principal of Fab 5 Sportz, LLC. Marcelle Joyner, acting alone, has
voting and dispositive power over the shares beneficially owned by Fab 5 Sportz,
LLC.
Except
as listed below, to our knowledge, none of the selling shareholders or their
beneficial owners:
-
|
has
had a material relationship with us other than as a shareholder at any
time within the past three years; or
|
-
|
has
ever been one of our officers or directors or an officer or director of
our predecessors or affiliates
|
-
|
are
broker-dealers or affiliated with
broker-dealers.
|
Cheyenne
Crow is an officer and director of the Company and he is selling 4,000 shares
only as custodian for four minors under the Virginia Uniform Transfer to Minors
Act.
ITEM
8. PLAN OF DISTRIBUTION
The
selling security holders may sell some or all of their shares at a fixed price
of $3.50 per share until our shares are quoted on the OTCBB and thereafter at
prevailing market prices or privately negotiated prices. Prior to being quoted
on the OTC Bulletin Board, shareholders may sell their shares in
private transactions to other individuals. Although our common stock is not
listed on a public exchange, we will be filing to obtain a listing on the OTCBB
concurrently with the effective date of this
prospectus. In order to be quoted on the OTC Bulletin Board, a market maker must
file an application on our behalf in order to make a market for our common
stock. There can be no assurance that a market maker will agree to file the
necessary documents with FINRA, which operates the OTC Bulletin Board, nor can
there be any assurance that such an application for quotation will be approved.
However, sales by selling security holders must be
made at the fixed price of $3.50 until a market develops for the
stock.
Once a
market has developed for our common stock, the shares may be sold or distributed
from time to time by the selling stockholders, who may be deemed to be
underwriters, directly to one or more purchasers or through brokers or dealers
who act solely as agents, at market prices prevailing at the time of sale, at
prices related to such prevailing market prices, at negotiated prices or at
fixed prices, which may be changed. The distribution of the shares may be
effected in one or more of the following methods:
15
-
|
ordinary
brokers transactions, which may include long or short
sales,
|
-
|
transactions
involving cross or block trades on any securities or market where our
common stock is trading, market where our common stock is
trading,
|
-
|
through
direct sales to purchasers or sales effected through
agents,
|
-
|
through
transactions in options, swaps or other derivatives (whether exchange
listed of otherwise), or exchange listed or otherwise),
or
|
-
|
any
combination of the foregoing.
|
In
addition, the selling stockholders may enter into hedging transactions with
broker-dealers who may engage in short sales, if short sales were permitted, of
shares in the course of hedging the positions they assume with the selling
stockholders. The selling stockholders may also enter into option or other
transactions with broker-dealers that require the delivery by such
broker-dealers of the shares, which shares may be resold thereafter pursuant to
this prospectus. To our best knowledge, none of the selling security holders are
broker-dealers or affiliates of broker dealers.
We will
advise the selling security holders that the anti-manipulation rules of
Regulation M under the Exchange Act may apply to sales of shares in the market
and to the activities of the selling security holders and their affiliates. In
addition, we will make copies of this prospectus (as it may be supplemented or
amended from time to time) available to the selling security holders for the
purpose of satisfying the prospectus delivery requirements of the Securities
Act. The selling security holders may indemnify any broker-dealer that
participates in transactions involving the sale of the shares against certain
liabilities, including liabilities arising under the Securities
Act.
Brokers,
dealers, or agents participating in the distribution of the shares may receive
compensation in the form of discounts, concessions or commissions from the
selling stockholders and/or the purchasers of shares for whom such
broker-dealers may act as agent or to whom they may sell as principal, or
both (which compensation as to a particular broker-dealer may be in excess of
customary commissions). Neither the selling stockholders nor we can presently
estimate the amount of such compensation. We know of no existing arrangements
between the selling stockholders and any other stockholder, broker, dealer or
agent relating to the sale or distribution of the shares. We will not receive
any proceeds from the sale of the shares of the selling security holders
pursuant to this prospectus. We have agreed to bear the expenses of the
registration of the shares, including legal and accounting fees, and such
expenses are estimated to be approximately $22,785.
Notwithstanding
anything set forth herein, no FINRA member will charge commissions that exceed
8% of the total proceeds of the offering.
ITEM
9. DESCRIPTION OF SECURITIES TO BE REGISTERED
General
We are
authorized to issue an aggregate number of 35,000,000 shares of capital stock,
of which 35,000,000 shares are common stock, $0.001 par value per share, and
there are no preferred shares authorized.
Common
Stock
We are
authorized to issue 35,000,000 shares of common stock, $0.001 par value per
share. Currently we have 15,675,998 shares of common stock issued and
outstanding.
Each
share of common stock shall have one (1) vote per share for all purposes. Our
common stock does not provide a preemptive, subscription or conversion rights
and there are no redemption or sinking fund provisions or rights. Our
common stock holders are not entitled to cumulative voting for election of Board
of Directors.
Preferred
Stock
We are
not authorized to issue shares of preferred stock.
Dividends
We have
not paid any cash dividends to our shareholders. The declaration of
any future cash dividends is at the discretion of our board of directors and
depends upon our earnings, if any, our capital requirements and
financial position, our general economic conditions, and other pertinent
conditions. It is our present intention not to pay any cash dividends
in the foreseeable future, but rather to reinvest earnings, if any, in our
business operations.
16
Warrants
There are
no outstanding warrants to purchase our securities.
Options
There are
no outstanding options to purchase our securities.
Transfer
Agent and Registrar
Our
independent stock transfer agent is Issuer Direct
Corporation, 201 Shannon Oaks Circle, Suite 105, Cary, NC 27511, and can
be reached at (919) 481-4000 .
ITEM
10. INTERESTS OF NAMED EXPERTS AND COUNSEL
No expert
or counsel named in this prospectus as having prepared or certified any part of
this prospectus or having given an opinion upon the validity of the securities
being registered or upon other legal matters in connection with the registration
or offering of the common stock was employed on a contingency basis, or had, or
is to receive, in connection with the offering, a substantial interest, direct
or indirect, in the registrant or any of its parents or subsidiaries. Nor was
any such person connected with the registrant or any of its parents or
subsidiaries as a promoter, managing or principal underwriter, voting trustee,
director, officer, or employee.
The
financial statements included in this prospectus and the registration statement
have been audited by PS Stephenson & Co., PC to the extent and for the
periods set forth in their report appearing elsewhere herein and in the
registration statement, and are included in reliance upon such report given upon
the authority of said firm as experts in auditing and accounting.
ITEM
11. INFORMATION ABOUT THE REGISTRANT
DESCRIPTION
OF BUSINESS
OVERVIEW
We are a development stage company that has exclusive worldwide
licenses on unique healthcare, security and emotion detection technologies. Upon
completion of the Purchase, the Company changed its purpose from a company
seeking a merger, acquisition or other business combination transaction to a
company that plans to acquire, develop and market products that have a focus on
healthcare, security, and transportation and to also purchase and integrate
existing, profitable healthcare businesses. We began this process on
January 28, 2009 by acquiring the Exmo Licenses concurrently with completing the
Purchase . On January 30, 2009 we amended our Articles of
Incorporation and changed our name to Exmovere Holdings, Inc.
The Exmo
Licenses cover all products that are fabricated and manufactured using the
designs from the following technology, some of which have patents pending as
described below (collectively, the “Exmo Technology”):
1.
|
Bluetooth-transmitting
biosensor wristwatch to simultaneously detect and continuously monitor
heart rate, heart rate variability, skin conductance, skin temperature,
relative movement and other vital signs. (In skin conductance, a device
puts an imperceptible electric current across the skin and measures how
easily it travels through the skin. For example, when anxiety raises the
level of sweat in a sweat duct, conductance
increases).
|
2.
|
Biosensor
enhanced steering wheel to simultaneously detect and continuously monitor
electrocardiogram (a graphic tracing showing the variations in electric
force which trigger the contractions of the heart: it is used in the
diagnosis of heart disease), changes in the ability of the skin to conduct
electricity caused by an emotional stimulus, such as fright known as
“galvanic skin response” or “GSR”, skin temperature and relative
movement.
|
3.
|
Biosensor
enhanced turnstile to detect galvanic skin response, skin temperature and
relative movement.
|
4.
|
Biosensor
enhanced PC mouse to detect heart rate, galvanic skin response, skin
temperature and relative
movement.
|
17
5.
|
System
to detect human emotions from the above mentioned wristwatch, above
mentioned steering wheel, above mentioned turnstile and above mentioned
mouse.
|
6.
|
System
to process physiological, emotional and hardware-related alerts through
the internet, cellular networks and other media from the above mentioned
products.
|
David
Bychkov owns all of the Exmo Technology. The Company’s interest is an
exclusive, irrevocable license to use the Exmo Technology in its business
model. The Exmo Technology has been developed over a period of about
10 years, based upon the research and science of David Bychkov individually and
then operating as Biograph North America, LLC (“Biograph”). Biograph
was organized in 2003. Its name was subsequently changed
to Exmovere LLC, a Delaware limited liability company (“Exmovere
LLC”). Subsequently, Mr. Bychkov also organized two additional
companies, Exmogate LLC, a Delaware limited liability company (“Exmogate”) and
Exmocare LLC, a Delaware limited liability company (“Exmocare”) as a means of
using the intellectual assets he created in other similar
applications. Exmogate is a subsidiary of Exmovere
LLC. David Bychkov is the majority owner of Exmovere LLC
(collectively Exmocare, Exmovere LLC and Exmogate are hereinafter referred to as
the “Exmocare Companies”). During the completion of these
products, Mr. Bychkov became aware that the structure of Exmocare Companies was
not conducive to marketing products of this nature and he sought
alternatives. Mr. Bychkov entered into a business relationship with
BT2 International so that BT2 International could convert Mr. Bychkov’s
intellectual property into intellectual assets that could be used to create
revenue. Cheyenne Crow, Robert Doornick and BT2 International’s
leaders, Delbert Blewett and Joseph Batty, worked with Mr. Bychkov’s
intellectual property for over two years to develop a plan that would add the
other items, such as marketing and prototype development, necessary for this
transition. The final distribution of the shares in the Company reflects this
effort and the necessary mix of experience and talent the Company needs to
become a successful business.
Once Mr.
Bychkov’s intellectual property (i.e. the Exmo Technology) was developed into
marketable products, it was determined that the structure of the Exmocare
Companies was not an appropriate method to create a working business
model. By resolution dated December 1, 2007, the Exmocare Companies
transferred the Exmo Technology that was owned by the Exmocare Companies to Mr.
Bychkov.
On June
8, 2008, Mr. Bychkov granted BT2 International an exclusive license to use the
Exmo Technology with the rights to manufacture and market the products from his
intellectual assets (the “License Agreement”). After several months
of strategic analysis and planning, BT2 International and Mr. Bychkov adopted a
business plan whereby a new public company would be acquired (Exmovere Holdings,
Inc.) to commence the commercialization of the License Agreement. The
License Agreement is attached as an exhibit to this registration
statement. BT2 International is a private company and it is not
related to the Exmocare Companies, Mr. Bychkov, Belmont Partners, and except for
its minority stock ownership, the Company. Belmont Partners Inc. is a
private company with no relationship to the Exmocare Companies, David Bychkov or
BT2 International and except for its minority stock ownership, the
Company.
On the
Purchase Date, the Exmo Licenses were transferred to the Company. In
exchange for the Exmo Licenses, the Company simultaneously issued an aggregate
of 15,003,000 common shares. As required by the Purchase Agreement,
Belmont Partners was to receive its 3% interest in the Company after the
licenses were transferred to the Company and thus at that time Belmont Partners
received its 453,000 shares as the full remainder payment due for the purchase
of Clopton House. 13,010,000 common shares were distributed to BT2
International, David Bychkov, Cheyenne Crow and Robert Doornick and an
additional 1,540,000 shares were distributed to other individuals or entities
instrumental in the development of the technology, each of which other
individuals or entities own directly and/or indirectly less than 5% of the
Company. The final distribution of the shares in Exmovere Holdings
among Mr. Bychkov (about 32%), Cheyenne Crow (about 32%), BT2 International
(close to 19%) and the other individuals, reflected the huge effort involved in
developing Mr. Bychkov’s Exmo Technology and the necessary mix of experiences
and talent the Company needed to become a successful
business.
On
December 7, 2009, the Company entered into a Technology License Agreement with
Sensatex, Inc., a Delaware corporation (the “Sensatex License
Agreement”). Pursuant to the Sensatex License Agreement, the Company
has been given a revocable, exclusive, worldwide right and license to
manufacture, have manufactured, use, offer to sell, sell and develop Sensatex’s
patents for advanced textile materials and the monitoring of vital signs of
infants (collectively the “Sensatex Technology”) to use with the Company’s
Exmobaby product in the field of medical and non-medical pediatric applications
for children 6 years old and younger, including children’s clothing and remote
child monitoring applications. Sensatex owns all right, title and interest in
the Sensatex Technology. The Company will own all right title and interest in
any technology developed made or otherwise created solely by employees and
consultants of the Company using the Sensatex Technology.
18
Finally,
the Company will seek to acquire controlling interests in existing urgent care
clinics across the US. This suite of products, technologies and assets will
enable us to build a brand that stands for humane treatment of the elderly and
infirm, security based on universal biological traits as opposed to racial or
ethnic factors, and mobility that inspires the imagination. Exmovere intends to
raise significant capital to launch these products and begin the acquisition
process.
PRODUCTS
The
Company is currently focusing its marketing efforts on the following products;
Telepath and Empath wristwatches, the Exmogate Turnstile, the Chariot and the
Exmobaby. The Company plans to turn its attention to the Exmovere
Mouse and the Steering Wheel after it has developed a track record with the
other products.
Telepath and
Empath
Exmovere
owns a Bluetooth biosensor wristwatch that uses infrared sensors to detect heart
rate without a chest strap, 3-d accelerometers (tool to provide you with a way
to see the acceleration data on your phone) to model human movement, and a
variety of metallic sensors to detect skin temperature and GSR. The Telepath
model transmits this data via computer or cell phone to online data centers,
care givers and/or emergency services. The Empath model is a different biosensor
wristwatch that does not transmit the data, but displays and stores it for long
periods of time. The Empath will benefit fitness users as well as those who are
cognitively able to monitor their own vital signs.
The
Telepath and Empath are intended for mass production and sale to mature adults
who need assistance with their daily living and could benefit from the Empath’s
ability to monitor their own vital signs on a regular basis and the Telepath’s
ability to transmit data by Bluetooth. In the case of the Telepath, the vital
sign results will be monitored by security companies, phone companies, etc.
These data will be assessed by the computers that receive the signals, and then
that monitor/computer will determine what type of corrective action may be
needed on a patient-by-patient basis.
The
Company produced an advanced prototype of the Telepath, which was previously
sold in limited quantities in evaluation kit form to large medical device
companies, cell phone service providers and clinical researchers. The feedback
from those users indicates that the eventual Telepath wristwatch is an ideal
product for distribution by cell phone service providers. Because of their
retail outlets, they have the existing infrastructure necessary to explain the
product’s features and to help them configure it for use with their or their
loved ones’ cell phones.
Cell
phone service providers also have the infrastructure needed to process alerts
and a complementary financial model, whereby they charge monthly subscription
fees. The Empath could be separately marketed for eventual retail
sale. We believe that currently there is no other all-in-one wearable tele-care
device that is competitive with our wristwatches.
PRODUCT
STATUS
We have
solicited bids from contractors in South Korea and China to continue the
company's ongoing development of a commercially viable wireless biosensor
wristwatch. If we do not qualify for the FDA 510k exemption
(explained in more detail under “Government Regulation”), we expect to have a
prototype suitable for conducting an FDA 510k case study in March
2010. We will not be able to engage a suitable contractor to assist
with completion of this process until we are able to pay approximately $1
Million.
With
respect to the system to process physiological, emotional and hardware-related
alerts through the internet, cellular networks and other media. the company has
completed software that is able to filter, manipulate and record data for these
purposes. This software is housed on a secure server and is only
accessible by management and/or consultants under non-disclosure agreements. The
software is not-patentable.
The
Company has completed software that is able to filter, manipulate and record
data that detect human emotions from the Telepath and Empath. This software is
housed on a secure server and is only accessibly by management and/or
consultants under non-disclosure Agreements. Software is
not-patentable. This software requires no further
development.
19
PRODUCT
/ SERVICE DESCRIPTIONS
The
Empath and Telepath are non-intrusive chronic care, elder care and fitness
devices with the following features:
1)
|
All-in-one
design monitors all critical vital signs 24/7 from the wrist with
absolutely no cables, straps or
electrodes.
|
2)
|
In
the case of Telepath, a Bluetooth biosensor wristwatch sends alerts via
cell phone or internet.
|
3)
|
A
wristwatch device to detect anxiety, depression and other emotional side
effects of drugs.
|
4)
|
In
the case of Telepath, online care giver account has 350 kinds of
configuration for alerts by SMS (text), email or instant messaging to
guarantee no false alarms.
|
These
wristwatches can simultaneously, non-invasively, continuously and accurately
detect with infrared and tiny metallic sensors from a fully moving wrist: heart
rate, heart rate variability, skin temperature, skin conductance and relative
movement.
The Exmogate
Turnstile
The
Exmogate Turnstile is a biosensor-enhanced, wirelessly controlled secure portal
device that detects hostility, ensures guard vigilance, and, when required, can
block entry. It is intended for development, mass production and sale to
government agencies, military bases, foreign embassies and governments, airports
and train stations, sports arenas and corporate buildings.
The
Exmogate Turnstile design (commercial models have not yet been built)
incorporates embedded GSR, skin temperature, pressure and auto-diagnostic
sensors, as well as a video camera, sensors to detect infectious biological
agents that can cause deadly diseases (biopathogens), a Geiger counter and will
incorporate, radar and sonar. The Exmogate Turnstile will gather and
process physiological data almost instantaneously to help security screeners
detect hostility. Each Exmogate Turnstile will come with a built-in PC for
transmitting and receiving data securely over a local wireless network. A
computer operated by the security screener will control all the Exmogate
Turnstiles in a certain facility or location.
The
Exmogate Turnstile is designed to look and perform like a normal subway or
building turnstile, and thus we intend to primarily market it through the U.S.
General Services Administrations (GSA) schedules, through building security
supply catalogs and directly to corporate/agency security directors. According
to the GSA, under the GSA Schedules Program, GSA establishes long-term
government wide contracts with commercial firms to provide access to over 11
million commercial supplies (products) and services that can be ordered directly
from GSA Schedule contractors or through the GSA Advantage!® online shopping and
ordering system. Through the GSA Schedule, all customers, even those
in remote locations, could order the Exmogate Turnstile. There
is no guarantee that the Company could get on the GSA
Schedule.
To become
a GSA Schedule contractor, a vendor must first submit an offer in response to
the applicable GSA Schedule solicitation. GSA awards contracts to responsible
companies offering commercial items, at fair and reasonable prices, that fall
within the generic descriptions in the GSA Schedule solicitations. GSA
Contracting Officers determine whether prices are fair and reasonable by
comparing the prices/discounts that a company offers the government with the
prices/discounts that the company offers to commercial
customers.
PRODUCT
STATUS
The
Exmogate Turnstile has completed its mechanical design phase. If the
Exmogate Turnstile is not exempted from the FDA 510k rules, we estimate that we
will need at least another $1 Million to complete a prototype worthy of a
potentially required FDA 510k case study for medical device certification. If
the device does not obtain FDA clearance, the device will not be able to be
marketed or used in the USA for its intended use without undergoing a case study
and certification by the FDA as a medical device. It would otherwise still be
able to be marketed for detection of emotional states, such as hostility, anger
and panic. We are primarily pursuing government grants and contracts
as a means of funding development and production of this device. The
cost of identifying and preparing a proposal for each grant or contract
opportunity is approximately $25,000. We intend to pursue at least 4
such opportunities per year for this device.
20
The
Company has completed software that is able to filter, manipulate and record
data that detect human emotions from the Exmogate Turnstile. This software is
housed on a secure server and is only accessibly by management and/or
consultants under non-disclosure Agreements. Software is
not-patentable. This software requires no further
development.
PRODUCT
/ SERVICE DESCRIPTIONS
The
Exmogate Turnstile is a networked, biosensor-enabled portal device. It is
designed to detect hostility, violence and aggression and can be used by
security screeners to more accurately filter out crowds.
The
Chariot
The Company has developed a
self-balancing upright mobility device called the
Chariot that surrounds the user’s thighs, hips and legs in a kind of
cocoon. The user’s hands, arms and chest remain free to do whatever is desired.
This would position the vehicle as a direct competitor to existing sit-down
scooters marketed to obese, elderly and limited mobility
persons. The Company has only produced
prototypes of the Chariot, which demonstrate that the product functions and is a
tool in marketing the product to potential distributors. The Chariot
is not yet in a form for consumer use or in a form to be submitted to any
applicable regulatory agencies. The Company is actively seeking
relationships with companies that might be interested in distributorships prior
to increasing expenditures on this product. The Company entered into
a distributorship agreement in November of 2009 with Horizon International
Corporation for distribution of the Chariot and the Telepath wristwatch in
Canada; however, Horizon defaulted under that agreement which agreement and
default are more specifically addressed in the Form 8k filed on March 3, 2010.
The Company has entered into several non-disclosure agreements with companies
that are evaluating the Chariot’s potential and considering distributorships
now.
The
Exmobaby
We intend
to use Sensatex Technology to design entirely new FDA 510k exempt product for
babies. Biosensor devices will be integrated into the infant’s
garments and a wireless transmission box will be set up in the
home. As the child’s conditions or movement changes, text messages
(through SMS cell phone technology) or email alerts (through wireless internet
connection) will be sent to parents. The goal will be to provide true
peace of mind for new parents. The Company plans to market the
Exmobaby worldwide by approaching major retailers and baby clothes designers
around the world to supply them the product we designed or a product custom
designed to their specifications.
THE
OTHER PRODUCTS AND THEIR STATUS
The
Steering Wheel’s product’s development is complete. The Company needs
$1,000,000 to collect test subject data from this product and to license this
technology to automotive steering wheel manufacturers and does not plan to incur
the expense at this time.
The
Exmovere Mouse is currently in mechanical design phase. We have the expertise in
biosignal processing to make this device, but we have not successfully completed
assembly of a demonstrable prototype yet. We estimate that we need at least $1
Million to complete a prototype worthy of a potentially required FDA 510k case
study for medical device certification. If the device does not
qualify for 510k exemption, the device will have to be modified and not be able
to marketed or used in the USA for healthcare purposes, but rather for emotion
detection purposes, gaming, entertainment and other consumer purposes. The
Company would then also seek to market it abroad for explicitly non-medical,
non-healthcare purposes.
Research
& Development
Both the
Telepath and the Empath are currently in the a lpha stage. That means we
know that the device can detect heart rate and other vital signs at least as
accurately as the BT1 and has superior battery life. An alpha stage product refers to a device that is used internally
by a research group as a proof of concept when considering pursuit of a patent
and/or further development towards a commercial product. The BT1 is
the name of the first wristwatch made by Exmocare. It stands for
Bluetooth Model Number 1. The BT1 was fully developed; however, the
Company has chosen to focus on the more advanced models that we call the
Telepath and Empath. When discussing wireless products such as those
that use the Bluetooth wireless standard, there is a certification
involved. Bluetooth is a trademark and technology controlled by the
Bluetooth SIG. Before commercializing a new product using Bluetooth,
one must register and have it certified as compliant by the Bluetooth
SIG. The Company is registered and certified with Bluetooth
SIG.
21
In order
to make the Empath and/or Telepath shippable as a product to customers, several
things are needed:
· Higher grade plastic parts are
needed for the casing;
· An onboard digital
display and onboard digital signal processing are needed to sift through the
data without having to upload it to a computer first;
· Higher grade
lithium ion batteries are needed to further increase battery life to at least 48
hours of continuous usage;
· Integration of
movement and other sensors are needed to make the product
shippable.
We have
the necessary intellectual property (i.e., software,
firmware, drawings, photographs, prototypes, schematics, websites, data,
documentation and usage of the trademarked Exmovere brand) to do these steps and
will require an additional $2 Million for production of inventory, development
of a sales force and marketing to wireless service providers, retailers and
other potential distributors.
It will
take six months from the time of negotiating vendor agreements until completion
of any potentially required FDA case study and an additional six months to build
inventory, presuming that we can in some way resolve the expected costs of $2
Million through either cash, stock or royalty payment to vendors. If
the FDA requires a clearance application as a medical device and then rejects
our application, we may have to spend an additional six months on development of
a new prototype before we can apply again.
The
Exmogate Turnstile prototype is complete. The estimated total cost involved in marketing the Exmogate Turnstile to the GSA and its target
market is $1 million . Assuming
that the Company is able to raise capital at the same rate that it has in the
first 3 quarters of 2009, the C ompany will be forced to seek out vendors that will
accept restricted shares in the C ompany and
royal ties from future sales as a substantial portion
of their compensation. The Company will
likely need at least
six months to find such
vendors . After locating vendors,
the Company will need at least a year to work with vendors to get a potentially required
FDA 510k case study p rototype
completed. From that point it will take at least six months to validate our test results that the device
can detect unhealthy and hostile persons by stationing the prototype at various
prisons, insane asylums, hospitals and specialized research centers where
appropriate data can be collected on drug addicts, mental patients, terrorists
and other threats to society for a total time of two
years . If we are required by the FDA to apply for clearance as
a medical device but our application is denied, we will have to narrow the Exmogate Turnstile’s applications to diagnostics
unrelated to health of the persons that pass through it. That will
substantially narrow the appeal of the device.
The
Company has a functioning prototype of the Chariot. In order to complete a
product that is ready for regulators and the consumer market, we will have to a)
perform studies, b) enter into a licensing agreement with Segway Inc. for
technology related to, among other things, its smart and long life rechargeable
battery and c) produce a consumer-ready prototype. The total cost is
estimated between 2-3 million dollars. Our strategy with the Chariot is to enter
into distributor agreements whereby the distributor provides the capital to
complete each unit and the distributor engages in the
marketing. There is no guarantee that we will be able to enter into a
licensing agreement with Segway Inc. and if we do not, it will affect the
marketability of our product.
Steering
Wheel: We need to collect data on at least 1000 test drivers under the influence
of alcohol, caffeine and distracting stimuli to validate our hypothesis that the
device can detect sleepy, drunk and/or distracted drivers. To recruit
and test this device to that point will cost $1 Million. The time to
recruit will be at least three months. From this point it will take another
three months to collect and analyze the data for a total of six
months. If the data suggests that hardware or software changes are
needed, that may disrupt our ability to sell a license on the technology and
additional months of development may be needed.
Exmovere Mouse: The
Exmovere M ouse needs at least six months of continued mechanical and industrial design
work that the Company cannot currently pay for. If the Company can
find a vendor willing to work for stock and/or accept royalties on sales as
partial compensation, the Company will be able to complete a potentially
required FDA 510k case study in nine
months. Presuming that the device can reliably detect heart rate from
a user without requiring two -handed contact, despite
movement artifacts caused by the hand that uses it, the Company will have a
device that is practical for monitoring vital signs remotely. If the
device is not able to detect heart rate with only one handed contact, it will be
useful for other applications such as gaming and enhanced online chat
functions. In other words, if the mouse is unable to meet the FDA
510k requirements and/or it requires two handed contact, it will have to be
modified and marketed only as a novelty /entertainment product. It will not be a
biomedical or biofeedback product.
22
The
Exmobaby is still in the development stage. The research has been
completed but the products have to be developed. It will take at
least $1 million to develop a sufficient product line to market to
retailers.
Industry
Participants / Competition
Our
wristwatch devices and services (specifically the Telepath) are targeted at the
home health monitoring or remote patient monitoring service (RPM), generally
considered a branch of tele-medicine that focuses on monitoring a single, or set
of, health related indicators of a patient located in his or her
home.
With the
rapid growth of the RPM industry, there are many innovations in the area and
firms with larger capitalization and resources have developed products and
services that may compete with the Telepath and Empath products. The following
is a summary of recent developments from these firms:
In
January of 2008 the Times Online reported that Microsoft Corporation is
developing software capable of remote physical well-being and competence. The
Times Online reported the computer system would link workers to their computers
via wireless sensors that measure their metabolism allowing managers to monitor
employees performance by measuring their heart rate, body temperature, movement,
facial expression and blood pressure.
The Bosch
Group recently purchased a majority shareholding in Health Hero Network, a
remote health monitoring business. Health Hero Network, headquartered in Palo
Alto, California, develops and sells technology solutions that allow the remote
monitoring and management of patient health data. Since it was founded in 1992,
Health Hero Network has been issued 63 patents. The Bosch Group is a leading
global supplier of technology and services. In the areas of automotive and
industrial technology, consumer goods, and building technology, it has some 260,000 associates and generated sales of 43.7
billion Europa in fiscal 2006.
In July
of 2007, IBM Corp. and the University of Florida announced they had developed
middle-ware which would allow doctors to remotely monitor the health of their
patients. The technology makes it possible for standard wired or wireless
devices like blood-pressure and glucose monitors to be reconfigured so that when
used by patients at home the devices can automatically send the collected
readings to health-care professionals.
Partners
Health Care – the largest healthcare provider in Massachusetts and the parent
company of Massachusetts General and Brigham and Women’s hospitals announced in
January of 2007, the organization would double its investment in tele-care to $6
million over four years to pay for tele-medicine programs for diabetes,
emphysema and depression, as well as a blood pressure trial.
With
regards to the Exmogate Turnstile and the access control market, the major
players include L-3 Communications, L-1 Identity Solutions and BQT
Solutions.
L-3, the
largest and most respected of these companies, has products in aviation, port,
maritime and cargo security as well as solutions for mass transportation. In
addition, L-3 offers other homeland security products and services for crisis
management, intrusion detection, law enforcement and vehicles for first
responders. With an installed base of more than 18,000 systems, L-3 is a major
supplier of mature and next-generation systems and technology products for
aviation, rail and cargo screening; port and border inspection; facility and
infrastructure security; explosives and land mine detection and air
remediation.
With
regards to Exmobaby, the largest competitors are Baby Sight and CST Baby Care
Link. CST Baby Care Link provides clinicians and parents with
innovative Internet supported tools that foster an environment where parents
become more active participants in their baby’s care. This program has been
successfully utilized for both commercially insured and Medicaid
populations. Baby Sight works with the Apple Iphone. When
the software detects a sound, it calls a telephone number and allows
the user to hear the sound made by the child. Downloading the application to the
Iphone has a low monthly retail price. These tools still
require active participation and interaction from parents and other
caregivers.
23
The
Chariot has no known similar competitors that are focusing on the disabled,
obese and elderly. The Chariot will compete with general wheelchair
manufacturers and automatic scooter manufacturers.
Marketing
Appeal
Each of
our products has a unique selling proposition. Remote Patient Monitoring (RPM ) industry professionals have shown an interest in the wristwatches because these professionals who are looking
for several key product features:
· Heart rate that can
be detected by infrared through the skin. Based on our
tests , the Telepath/Empath can do this with
99% accuracy, even while a subject moves.
· Onboard digital
signal processing, data display and data storage. The Empath will make it
possible for a wearer to see all of his vital sign data and emotional states on
the wristwatch display, without having to connect to a computer. The Empath will
be able to store data when it can’t broadcast it, thereby saving battery
life.
· Small form factor
is very important to users. Exmovere wristwatches
are the smallest such biomedical tools in the world.
Customers
currently associate with the Exmocare brand. This is thanks to positive news
articles in AARP Magazine, PC Magazine, Business Week, the Wall Street Journal
and Popular Mechanics.
According
to NASA biomedical researcher William Toscano’s letter to Exmocare LLC, dated
May 20, 2007, after he performed a comparative study of the Exmocare watch
against other products, “An analysis of crew questionnaire data indicated that
the Exmocare bio-watch was more unobtrusive when performing mission tasks and
was easier to operate than the other monitors; however data quality of the
bio-watch was less accurate.” According to AARP’s 2006 publication on
global elder care trends, “Exmocare sensor technology is designed to predict
disasters, instead of relying on the individual to notify others that he or she
requires assistance . . . Exmocare takes cutting-edge technology and puts it to
good use for older people.” According to Dr. William Crounse, Worldwide Health
Director for Microsoft Corporation, “[The Exmocare watch] is just the beginning
of a new era of technologies that will help us extend care into the home and
bring peace of mind to those of us concerned about aging parents who live far
away.” See April 17, 2007 Bill
Crounse, MD blog on www.microsoft.com.
The
unique selling proposition of the Exmogate Turnstile is its ability to provide
valuable, real-time biological, environmental and psychological data to security
screeners around the world. Only the Exmogate Turnstile can non-invasively,
unobtrusively and seamlessly monitor crowded bus terminals, subway stations and
political rallies for signs of hostility, chemical agents and/or
disease.
The
Chariot is innovative and has an appeal for many different types of
consumers. It is a hands-free concept vehicle that is
sensor-activated and the Company believes there is no other product comparable.
Unlike other self-balancing vehicles, the Chariot is controlled by subtle
movements of the person's lower torso and hips. Sensors inside the
cocoon-like shell of the vehicle predict the intended motion of the person
wearing the device. The Chariot does not require any kind of manual dexterity on
the part of the person wearing it. Only minimal physical effort is required, and
the Chariot allows the person wearing it to reach objects and closely approach
them. The upright form of the Chariot permits the person wearing it to make
direct eye contact with other people. The device is battery powered and has the
capability to travel up to twelve miles per hour. The Company is working on
production versions of the Chariot in different forms, and intends to integrate
their vital sign sensors, ground clearance and environmental sensors, wireless
and cellular connectivity products, as well as a small form and unique options
for both military and law enforcement customers. Exmovere intends to
eventually develop a feature of the Chariot that can switch the person wearing
it from an upright position to a seated one. The Company is also considering
partnering with an automotive manufacturer in order to eventually launch a
performance-oriented version of the Chariot.
The
Exmobaby clothing and apparel will be marketed as playing a significant role in
a) providing parents and caregivers with real-time information about the baby’s
condition, b) substantially increasing the rate of decline in infant mortality,
specifically due to SIDS and accidents, c) giving healthcare and medical care
professionals another tool to help care for premature infants, d) delivering
peace of mind to working parents that have to use daycare, e) ease the fears of
new parents about their baby’s actual condition, f) focusing on region
improvement throughout the world and g) developing solutions that use the
various wireless cell phone technologies. Based on infant birth rates
and mortality rates, the Company may have a key focus in India and
China.
Pricing
Strategy
The
business model for the Exmocare Empath and Telepath is as
follows:
1.
|
We
will license experienced and quality distributors (home health care
providers) who have an existing client and patient base. The home health
care provider business is growing exponentially with the aging of our
population.
|
24
2.
|
The
plan is to engage up to 190 distributors worldwide. Each distributor will
pay an upfront fee as part of their license agreement, ranging from
$100,000 -$5,000,000 depending on the territory and national Gross
Domestic Product. These distributors will then be able to sell their
wristwatches, using the same model as the cellular phone industry, whereby
the end-user gets their wristwatch and then pays a monthly service fee for
monitoring services, online accounts and other
benefits.
|
3.
|
As
we’ve noted before, the most interested businesses for our product are
foreign health management and healthcare IT companies, including wireless
providers. The service that we will provide can potentially lead to a cost
savings in the global health care
system.
|
The
Exmogate Turnstiles will be sold for $5000-$50,000 per unit, in addition to long
term service agreements. If offered through the GSA
Schedule, prices will vary depending on the terms of the government
contract. Units will also be made available for lease, and
purchase financing plans will be offered to customers with excellent
credit.
The
pricing for the Exmobaby has not yet been determined. The Company’s
market analysis shows that the product must be cost effective to have the most
appeal. The cost of the product has to be significantly less than the
amount of savings it generates by reducing medical costs and anxiety
levels.
Marketing
& Promotion Strategy
We
anticipate receiving full marketing consultation from a company affiliated with
Robert Doornick, a member of our board of directors, International Robotics in
New York. International Robotics provides public relations and marketing for up
and coming technology companies. International Robotics provides media
advertising across all media types, including free media.
We
believe that a first year total advertising budget of over $2.8 Million for the wristwatches,
Chariot, turnstiles and Exmobaby will be necessary to ensure maximum
appeal to distributors and end-users. This money will be spent primarily on
trade shows, payment to consultants and ads placed on TV and radio. We expect
advertising and marketing to continuously represent an
expense equal to approximately 25% of the Company’s sales. This will also play a large role in
helping us to raise needed capital from private investors.
Distribution
Strategy
We
believe that cell phone companies, healthcare IT providers and other
infrastructure-rich companies will make the best distributors for our wristwatch
products.
As part
of their licensing agreements, we will place them in direct contact with our
manufacturer in China or India. They will be able to order hardware direct from
the manufacturer in individually packaged and shrink-wrapped batches of 100,000
at a time. We plan to structure a joint venture with the manufacturer to share
profits from this.
We will
also provide the distributors with pre-programmed servers and web sites to
manage their end users, as well as local language documentation. Distributors
will pay all shipping and handling costs. We currently have r egular communication with
potential distributors, including distributors in the following sectors;
fitness/consumer retail, telecommunications, health care/information technology,
medical supply/services, pharmaceutical research and
government/military.
The
Company plans to manufacture the Chariot and enter into distribution agreements
to sell the products. The distributors will be required to spend a
minimum amount on marketing the Chariot. The Company will enter into
service agreements with the distributors.
We intend
to primarily market the Turnstile through the U.S. General Services
Administrations (GSA) schedules, through building security supply catalogs and
directly to corporate/agency security directors.
The
Company plans to market the Exmobaby worldwide by approaching major retailers
and baby clothes designers around the world to supply them the product we
designed or a product custom designed to their
specifications.
25
Governmental
Regulation
Our
products have been designed to comply with FDA 510k Exemption Code Sec. 882.5050
Biofeedback device. Biofeedback is a non-medical process that involves measuring
a subject's specific and quantifiable bodily functions such as blood pressure,
heart rate and brainwaves. Biofeedback is a process that enables an
individual to learn how to change physiological activity for the purposes of
improving health and performance. Precise instruments measure physiological
activity such as brainwaves, heart function, breathing, muscle activity, and
skin temperature. These instruments rapidly and accurately 'feed back'
information to the user. The presentation of this information — often
in conjunction with changes in thinking, emotions, and behavior — supports
desired physiological changes. Over time, these changes can endure without
continued use of an instrument. Biofeedback equipment is classified
by the FDA as a Class II Medical Device. Medical devices have varying
levels of risks and benefits and the degree of regulation is based on the level
of control that the FDA considers being necessary to assure the safety and
effectiveness of the device. There are three levels of classification. Class I
devices have the lowest level of regulation because they present a minimal level
of risk for harm. General controls such as registration, following the Good
Manufacturing Practices, and labeling are considered sufficient for ensuring
safety and effectiveness. Class II devices are those for which special controls
are considered necessary by the FDA for assuring safety and effectiveness and
where there are existing methods for providing such
assurances. Special controls can include guidance documents, special
labeling requirements (e.g. that certain products are not to be used to make
diagnoses), mandatory performance standards, and post market surveillance. Class
III devices require the most stringent regulation because insufficient
information exists for assuring safety and effectiveness and these devices are
generally those that support or sustain human life.
Biofeedback
equipment manufactures are generally required to file a 510(k) Premarket
Notification so that the FDA can determine if the equipment is 'substantially
equivalent' to a legally marketed device that does not require premarket
approval. Unless exempted from premarket notification requirements,
persons may not market a new device, under section 510(k), unless they receive a
substantial equivalence order from the FDA or an order reclassifying the device
into Class I or Class II (section 513(I) of the Act). There is now one
exception, and that is for the selling of battery operated biofeedback
equipment. The FDA has the regulatory authority to exempt a Class II
device from the 510(k) requirement and has done so for battery operated
biofeedback equipment, which it evidently considers to be safe and
effective. The Company believes that its products may qualify under
this exemption as each product will be battery operated biofeedback
equipment. Other FDA requirements, such as FDA labeling regulations,
must still be met. To market biofeedback equipment to someone other than
professionals require the filing of other paperwork with the FDA and their
authorization (approval) that it is safe to do so.
Biofeedback
equipment has been approved for relaxation training and muscle reeducation.
Biofeedback equipment that is to be marketed for other purposes requires a
separate Premarket Notification approval and a prescription legend
(www.fda.gov/cdrh/ode/143.html). Not all manufactures of equipment
have gone through the FDA approval process which is relatively simply for
devices that are generic in design and purpose to devices already approved. Some
consumer groups recommend that all biofeedback equipment manufacturers go
through the FDA Premarket Notification/approval process and thus reduce their
own legal risk, help ensure that the public is protected, and to help
practitioners in ensuring that the equipment they purchase is in fact considered
to be safe and effective by the FDA. Legally, the selling of a device classified
by the FDA as a Class II Medical Device without meeting their requirements is a
violation of law. Violation of existing law is also an ethical
violation.
If
biofeedback is being communicated at great distances using telephone lines
and/or satellite system connections, manufacturers must ensure that they are in
compliance with both the laws of the state in which they operate and in the
state(s) in which the client who is receiving services is located. In addition,
they must take extra precautions to ensure that client confidentiality is not
compromised by inadvertently allowing unauthorized persons to access the session
or clients' data from the session. It requires two-way, audio and
video, real-time interactive communication between the patient and practitioner
and the patient must be receiving the service in a health care setting, such as
a clinic, hospital, or doctors office.
Those who
use computerized storage of data or electronic billing must also take
precautions to ensure that unauthorized access to confidential information does
not occur and that one does not send the information to the wrong email address.
Encrypting files, passwords, and storing data on discs that can be taken out of
the computer and locked up in storage files are all part of the process for
ensuring confidentiality of client information. Medical
products are subject to extensive government regulation in the United States and
in other countries. In order to test, produce and market products for use on
humans, Exmovere must first comply with mandatory procedures and safety
standards established by the FDA and comparable state and foreign regulatory
agencies. The Act requires premarket clearance or premarket approval by the FDA
prior to commercialization of medical devices. Pursuant to the Act, the FDA
regulates the manufacture, distribution and production of medical devices in the
United States.
26
Before a
new device can be introduced into the market, the manufacturer generally must
obtain FDA clearance through either a 510(k) premarket notification or a
premarket approval application ("PMA"). A 510(k) clearance is only
available for devices which are "substantially equivalent" to devices that have
been previously approved by the FDA. The principal purpose of the
510(k) procedure is to avoid costly and time-consuming clinical tests of devices
that have already been proven safe and effective by others. Applicants under the
510(k) procedure must prove that the device for which approval is sought is
substantially equivalent to a device on the market prior to the Medical Device
Amendments of 1976, or a device approved thereafter pursuant to the 510(k)
procedure.
A PMA
must be filed if the proposed device does not satisfy the foregoing conditions
relating to the 510(k) procedure. The PMA procedure is more complex,
time-consuming and costly than the 510(k) procedure. In general, the
PMA procedure requires extensive clinical testing to determine the safety,
efficacy and potential hazards of the medical device. In order to obtain
permission to conduct human clinical studies under the PMA procedure, the
manufacturer is required to obtain an Investigational Device Exemption ("IDE")
from the FDA. If the IDE application is approved, human clinical trials may
begin at a specific number of investigational sites with a minimum specific
number of patients, as approved by the FDA. The clinical trials must
be conducted under the auspices of an independent Institutional Review Board
("IRB") established pursuant to FDA regulations. Upon the completion of all
required testing under the IDE, substantial proof of safety and efficacy must be
submitted to the FDA before the final PMA will be granted. The FDA
has 180 days to review a PMA application, although the review of an
application generally occurs over a significantly longer period of time and can
take up to several years. During this review period, the FDA may request
additional information or clarification of the information already provided.
Also, an advisory panel of experts from outside the FDA may be convened to
review and evaluate the application and provide recommendations to the FDA as to
the approvability of the device. The PMA process can be expensive,
uncertain and lengthy. If granted, the PMA approval may include significant
limitations on the indicated uses for which a product may be marketed and may
require inspection of the manufacturing facility to ensure compliance with the
FDA's requirements.
If we
file a 510(k) application with the FDA, it will take about three months from the
date of filing to receive the FDA’s response. The amount of time before we
receive the marketing approval, though, is contingent upon the number and extent
of the requirements deemed necessary by the FDA. In the event that the FDA
requires additional testing to be conducted, the timelines for filing the
application and for getting the FDA’s response would be delayed. The FDA may
also require us to follow the PMA approval process described
above.
Devices
which have been developed by the Company, but which have not been approved for
commercial distribution in the United States, may be exported if the FDA
approves a request from the Company for permission for export. The FDA requires
that the Company obtain approval from the foreign country to which the device
will be exported and comply with the laws of the foreign
country. Nonetheless, the FDA could still deny permission to export
if it determines that export is contrary to public health and
safety. The Company has not submitted such a request to the FDA for
the export of its products, and no decision has yet been made whether it will do
so in the near future.
The
Company is also required to register with the FDA as a device manufacturer. In
addition, the Company is required to comply with the FDA's Good Manufacturing
Practices regulations. The FDA has authority to conduct detailed inspections of
manufacturing plants, to establish "good manufacturing practices" which must be
followed in the manufacture of medical devices, to require periodic reporting of
product defects to the FDA, to take regulatory actions against devices that are
adulterated and/or misbranded, and to pursue actions in federal court against
companies or individuals that violate the Act. The medical device reporting
regulations require the Company to provide information to the FDA whenever there
is evidence to reasonably suggest that one of its devices may have caused or
contributed to death or serious injury, or that there has occurred a malfunction
that would be likely to cause or contribute to death or serious injury if the
malfunction were to recur.
The Safe
Medical Device Act of 1990 (the "SMD Act") affects medical device manufacturers
in several areas, including post-market surveillance and device tracking
procedures. The SMD Act gives the FDA expanded emergency recall authority,
requires the submission of a summary of the safety and effectiveness in the
510(k) process and adds design validation as a requirement of good manufacturing
practices. The SMD Act also requires all manufacturers to conduct post-market
surveillance on devices that potentially present a serious risk to human health,
and requires manufacturers of certain devices to adopt device tracking methods
to enable patients to receive required notices pertaining to such devices they
receive. The Company does not believe that the SMD Act will have a
material impact on the Company or its operations.
27
Federal
law preempts states or their political subdivisions from regulating medical
devices. Upon application, the FDA may permit state or local regulation of
medical devices which is either more stringent than federal regulations or is
required because of compelling local conditions. The Company does not anticipate
that any state or local requirements, which may be exempted from preemption,
will have a materially adverse effect on Exmovere’s financial condition or
operations. However, there is no assurance that, in the future, state or local
requirements may not have a substantial effect on the Company. If the Company
seeks to market its devices outside of the United States, the Company may also
be subject to regulation by foreign governments.
Health
care reform is an area of national attention. If reform measures are adopted,
they could adversely affect the pricing of diagnostic and therapeutic devices in
the United States or the amount of reimbursement available from third-party
insurers. The impact of these measures upon the Company cannot be
predicted.
Fraud and
Abuse Laws: A
variety of Federal and state laws apply to the sale, marketing and promotion of
medical devices that are paid for, directly or indirectly, by Federal or state
healthcare programs, such as Medicare, Medicaid and TRICARE. The restrictions
imposed by these laws are in addition to those imposed by the FDA, FTC and
corresponding state agencies. Some of these laws significantly restrict or
prohibit certain types of sales, marketing and promotional activities by medical
device manufacturers. Violation of these laws can result in significant
criminal, civil, and administrative penalties, including imprisonment of
individuals, fines and penalties and exclusion or debarment from Federal and
state healthcare and other programs. Many private health insurance companies
also prohibit payment to entities that have been sanctioned, excluded, or
debarred by Federal agencies.
Anti-Kickback
Statute: The Federal anti-kickback statute prohibits persons from
knowingly and willfully soliciting, offering, receiving or providing
remuneration, directly or indirectly, in exchange for or to induce either the
referral of an individual, or the furnishing, arranging for or recommending of a
good or service, for which payment may be made in whole or part under a Federal
healthcare program such as the Medicare and Medicaid programs. The definition of
“remuneration” has been broadly interpreted to include anything of value,
including for example gifts, discounts, the furnishing of supplies or equipment,
payments of cash and waivers of payments. Several courts have interpreted the
statute’s intent requirement to mean that if any one purpose of an arrangement
involving remuneration is to induce referrals or otherwise generate business
involving goods or services reimbursed in whole or in part under Federal
healthcare programs, the statute has been violated. Penalties for violations
include criminal penalties and civil sanctions such as fines, imprisonment and
possible exclusion from Medicare, Medicaid and other Federal healthcare
programs. In addition, some kickback allegations have been claimed to violate
the Federal False Claims Act, discussed in more detail below. The Federal
anti-kickback statute is broad and prohibits many arrangements and practices
that are lawful in businesses outside of the healthcare industry. Recognizing
that the statute is broad and may technically prohibit many innocuous or
beneficial arrangements, the Office of Inspector General of the Department of
Health and Human Services, or OIG, has issued a series of regulations, known as
the “safe harbors.” These safe harbors set forth provisions that, if all their
applicable requirements are met, will assure healthcare providers and other
parties that they will not be prosecuted under the anti-kickback statute. The
failure of a transaction or arrangement to fit precisely within one or more safe
harbors does not necessarily mean that it is illegal or that prosecution will be
pursued. However, conduct and business arrangements that do not fully satisfy an
applicable safe harbor may result in increased scrutiny by government
enforcement authorities such as the OIG or the U.S. Department of Justice.
Many states have adopted laws similar to the Federal anti-kickback statute. Some
of these state prohibitions are broader than the Federal statute, and apply to
the referral of patients and recommendations for healthcare items or services
reimbursed by any source, not only the Medicare and Medicaid programs.
Government officials have focused certain enforcement efforts on marketing of
healthcare items and services, among other activities, and have brought cases
against individuals or entities with sales personnel who allegedly offered
unlawful inducements to potential or existing physician customers in an attempt
to procure their business.
28
Fraud on
a Health Benefit Plan and False Statements: The Health Insurance
Portability and Accountability Act of 1996, or HIPAA, created a new Federal
healthcare fraud statute that prohibits knowingly and willfully violating False Claims
Laws. Federal false claims laws prohibit any person from
knowingly presenting, or causing to be presented, a false claim for payment to
the Federal government or knowingly making, or causing to be made, a false
statement in order to have a false claim paid. The Federal government’s
interpretation of the scope of the law has in recent years grown increasingly
broad. Most states also have statutes or regulations similar to the Federal
false claims laws, which apply to items and services reimbursed under Medicaid
and other state programs, or, in several states, apply regardless of the payor.
Sanctions under these Federal and state laws may include civil monetary
penalties, exclusion of a manufacturer’s products from reimbursement under
government programs, criminal fines, and imprisonment. Several device
manufacturers have been prosecuted under the false claims laws for allegedly
providing free product to physician customers with the expectation that the
physician customers would bill Federal programs for the product. In another
action, a device manufacturer plead guilty not only to shipping an adulterated
device in violation of the FDA requirements, but also to making a false
statement concerning the number of device complaints it had received. Several
recent cases against drug manufacturers have alleged that the manufacturers
improperly promoted their products for “off-label” use, outside of the scope of
the FDA-approved labeling, executing a scheme to defraud any healthcare benefit
program, including private payors. A violation of this statute is a felony and
may result in fines, imprisonment or exclusion from government-sponsored
programs. Among other things, HIPAA also imposes new criminal penalties for
knowingly and willfully falsifying, concealing or covering up a material fact or
making any materially false, fictitious or fraudulent statement in connection
with the delivery of or payment for healthcare benefits, items or services,
along with theft or embezzlement in connection with a healthcare benefits
program and willful obstruction of a criminal investigation involving a Federal
healthcare offense. Violations may result in fines or
imprisonment.
Federal
Acquisition Regulations (FAR): If Exmovere enters into GSA contracts
for its Exmogate Turnstiles, it will have to comply with the
FAR. When a government agency issues a contract or a proposal, it
will specify a list of FAR provisions that apply to that contract, which may be
numerous. In order to be awarded a contract, a bidder must either comply with
the provisions, demonstrate that it will be able to comply with them at the time
of award, and/or claim an exemption from them. As an example, Part 30 (which
references Cost Accounting Standards) allows for small businesses to be exempt
from those requirements; if the bidder can demonstrate that it meets the small
business criteria, Part 30 would then not apply. In many cases, a
contract award can be challenged and set aside if a challenger can prove that
either the contracting agency and/or the successful bidder did not comply with
the contract solicitation requirements, usually so that the challenger can
either be awarded the contract in lieu of the original bidder's award of the
contract or get another shot at a bid. If any fraud is found in the
process of obtaining, administering or monitoring government contracts, a
company could be subject to civil money and criminal
penalties.
The U.S.
Consumer Product Safety Commission (CPSC) has proposed rules and regulations for
children’s sleepwear which will apply to the Exmobaby biosensor pajamas and
other apparel manufactured from biosensor-enabled fabrics. The regulations for
children’s sleepwear are published in the Code of Federal Regulations (CFR),
Title 16, Chapter II. Although these regulations are designed specifically to
require children’s sleepwear to meet flammability standards, they are applicable
to all children’s sleepwear. The Federal Trade Commission (FTC) may
also have regulations that affect the labeling of the Exmobaby. 16
CFR.303.23 states that where a textile fiber product is made wholly of one fiber
or a blend of fibers, the product may be designated according to the fiber
content of the principal fiber or blend of fibers, with an exception naming the
superimposed or added fiber, giving the percentage of each fiber type in
relation to the total fiber weight of the principal fiber or blend of fibers,
and indicating the area or section which contains the superimposed or added
fiber. 16 CFR 303.24 requires the fiber content of pile fabrics to be
stated on the label in such segregated form as will show the fiber content of
the face or pile and of the back or base, with percentages of the respective
fibers as they exist in the face or pile and in the back or
base. Part 423 of Title 16 addresses care instructions through the
use of care labels or other methods.
Property
Protection, Trademarks and Copyrights
The
critical piece of intellectual property involved in our business model is the
digital signal processing software, heart rate libraries. While the hardware and
processes are patent pending, the critical portion that has to be protected is
our internal software.
Several
controls are in place to prevent reverse engineering. Distributors will be
provided with black boxes to ensure that barriers are maintained around our
intellectual property. Several wristwatch companies, including Seiko, have
patents on designs that could be useful to making the wristwatches smaller. We
will work to acquire licenses on those patented
designs. The following are the provisional patents applicable to the Exmo
Technology:
1.
|
Biofeedback
Automotive Steering System Provisional Patent Application filed by
Exmovere Holdings, Inc. with David Bychkov, as inventor, on October 14,
2009 which relates to a biosensor device to be placed in the steering
wheels of vehicles which would be helpful to drivers in measuring their
emotional reactions while driving the vehicle. The device is
designed to make cars sensitive to the moods, feelings and emotions of the
driver and occupants.
|
29
2.
|
Biosensor
Wristwatch Provisional Patent Application filed by Exmovere Holdings, Inc.
with David Bychkov, as inventor, on October 14, 2009 which relates to a
way to detect heart rate from a moving wristwatch worn device, which
device makes it possible to monitor physiological and emotional conditions
in the form of a wristwatch, while the wearer is running, exercising,
shaking or performing any other routine
activities.
|
3.
|
Biofeedback
Turnstile Provisional Patent Application filed by Exmovere Holdings, Inc.
with David Bychkov, as inventor, on October 14, 2009 which relates to a
portal device that makes it possible to keep hostile, psychologically or
physiologically agitated and/or other suspicious persons from gaining
entry to a location without first meeting certain psychological or
physiological parameters.
|
A
provisional patent is not reviewed by the United States Patent Office unless a
non-provisional patent application is submitted within 1 year. We
have an assignment of Trademark Application Serial No. 78686527 for the Exmovere
brand which was assigned from Exmovere LLC to the Company. We have no
copyrights registered with the Library of Congress.
Employees
As of
December 31 , 2009, we have 2 full time employees,
and plan to employ more qualified employees in the near future.
DESCRIPTION
OF PROPERTY
Our
principal executive office is located at 1600 Tysons Boulevard, 8th Floor,
McLean, VA 22102, and our telephone number is (703) 245-8513. We
lease the office space on a month to month basis at a rate of $4,200.00 per
month.
LEGAL
PROCEEDINGS
From time
to time, we may become involved in various lawsuits and legal proceedings, which
arise, in the ordinary course of business. However, litigation is subject to
inherent uncertainties, and an adverse result in these or other matters may
arise from time to time that may harm our business. We are currently not aware
of any such legal proceedings or claims that we believe will have a material
adverse effect on our business, financial condition or operating
results.
MARKET
FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
There is
presently no public market for our shares of common stock. We anticipate
applying for trading of our common stock on the OTCBB upon the effectiveness of
the registration statement of which this prospectus forms apart. However, we can
provide no assurance that our shares of common stock will be traded on the OTCBB
or, if traded, that a public market will materialize.
Holders of Capital
Stock
As of the
date of this registration statement, we had 108
holders of our common stock.
Rule 144
Shares
As of the
date of this registration statement, we do not have any shares of our common
stock that are currently available for sale to the public in accordance with the
volume and trading limitations of Rule 144.
Stock Option
Grants
We do not
have any stock option plans.
Registration
Rights
We have
not granted registration rights to the selling shareholders or to any other
persons.
30
Exmovere
Holdings, Inc.
|
Financial
Statements
|
(Unaudited)
|
September
30, 2009
|
INDEX TO
FINANCIAL STATEMENTS
Page
|
||
Balance
Sheets as of September 30, 2009 and December 31, 2008
|
F-1 | |
Statements
of Operations for the three months ending September 30, 2009 and 2008 and
the nine months ending September 30, 2009 and
2008.
|
F-2 | |
Statements
of Cash Flows For the nine months ending September 30, 2009 and
2008
|
F-3 | |
Notes
to Financial Statements
|
F-5 |
Exmovere
Holdings, Inc.
Balance
Sheet
(Unaudited)
as
at September 30, 2009
Assets
|
Sept
30
2009
|
Dec
31
2008
|
||||||
Current
Assets
|
||||||||
Cash
|
$ | 328,318 | $ | 79 | ||||
328,318 | 79 | |||||||
Other
Assets - Intangibles (Note 3 and Note 6)
|
||||||||
Technology
Licenses
|
22,504,500 | |||||||
22,832,818 | 79 | |||||||
Liabilities
|
||||||||
Current
Liabilities
|
||||||||
Accounts
payable
|
13,013 | 183 | ||||||
Due
to shareholders
|
0 | 4,571 | ||||||
13,013 | 4,754 | |||||||
Shareholders'
Equity
|
||||||||
Share
Capital
|
||||||||
Authorized
|
||||||||
35,000,000
Shares with a par value of $0.001
|
||||||||
Issued
|
||||||||
15,374,460
Shares
|
||||||||
15,374 | 100 | |||||||
Additional
Paid-in capital
|
23,121,472 | –– | ||||||
Accumulated
deficit during the development stage
|
(317,041 | ) | (4,775 | ) | ||||
22,819,805 | (4,675 | ) | ||||||
22,832,818 | 79 |
The
accompanying notes are an integral part of these financial
statements.
F-1
Exmovere
Holdings, Inc.
Statement
of Operations
(Unaudited)
For
the nine months ended September 30, 2009
3
months
ended
|
3
months
ended
|
9 months
ended
|
9
months
ended
|
From
Inception
to
Sept 30,
|
||||||||||||||||
2009
|
2008
|
2009
|
2008
|
2009
|
||||||||||||||||
Revenue
|
$ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | ||||||||||
Expenses
|
||||||||||||||||||||
General
& Administrative
|
121,323 | 3,183 | 317,020 | 3,517 | 321,795 | |||||||||||||||
121,323 | 3,183 | 317,020 | 3,517 | 321,795 | ||||||||||||||||
Income
(loss) before Income tax
|
(121,323 | ) | (3,183 | ) | (317,020 | ) | (3,517 | ) | (321,795 | ) | ||||||||||
Other
income (expense)
|
||||||||||||||||||||
Extinguishment
of shareholder payables
|
–– | –– | 4,754 | –– | 4,754 | |||||||||||||||
Total
other income (expense)
|
–– | –– | 4,754 | –– | 4,754 | |||||||||||||||
Income
tax
|
–– | –– | –– | –– | –– | |||||||||||||||
Net
Income (loss)
|
(121,323 | ) | (3,183 | ) | (312,266 | ) | (3,517 | ) | (317,041 | ) | ||||||||||
Basic
and diluted earnings per share
|
$ | (0.01 | ) | $ | (0.00 | ) | $ | (0.02 | ) | $ | (0.00 | ) | ||||||||
Weighted
average shares outstanding
|
15,190,896 | 100,000 | 12,840,506 | 100,000 |
The
accompanying notes are an integral part of these financial
statements.
F-2
Exmovere
Holdings, Inc.
Statement
of Shareholders' Equity
(Unaudited)
For
the nine months ended September 30,
2009
(Deficit) | ||||||||||||||||||
Additional | During the | |||||||||||||||||
Common
Stock
|
Paid In | Development | ||||||||||||||||
Shares
|
Amount
|
Capital
|
Stage
|
Total
|
||||||||||||||
Balance
at December 18, 2006
|
––
|
$
|
––
|
$
|
––
|
$
|
––
|
$
|
––
|
|||||||||
Balance
at December 31, 2006
|
––
|
––
|
––
|
––
|
––
|
|||||||||||||
Issuance
of common stock
|
||||||||||||||||||
Issued
for cash
|
100,000
|
100
|
––
|
100
|
||||||||||||||
Net
income (loss)
|
(21
|
)
|
(21
|
)
|
||||||||||||||
Balance
at December 31, 2007
|
100,000
|
100
|
––
|
(21
|
)
|
79
|
||||||||||||
Net
income (loss)
|
(4,754
|
)
|
(4,754
|
)
|
||||||||||||||
Balance
at December 31, 2008
|
100,000
|
100
|
––
|
(4,775
|
)
|
(4,675
|
)
|
|||||||||||
Issuance
of common stock
|
||||||||||||||||||
Issued
for technology licenses
|
15,003,000
|
15,003
|
22,489,497
|
22,504,500
|
||||||||||||||
Issued
for cash-1st quarter
|
51,134
|
51
|
76,650
|
76,701
|
||||||||||||||
Issued
for cash-2nd quarter
|
80,408
|
81
|
135,552
|
135,633
|
||||||||||||||
Issued
for cash-3rd quarter
|
139,918
|
139
|
419,773
|
419,912
|
||||||||||||||
Net
income (loss)
|
––
|
––
|
––
|
(312,266
|
)
|
(312,266
|
)
|
|||||||||||
Balance
at Sept 30, 2009
|
15,374,460
|
$
|
15,374
|
$
|
23,121,472
|
$
|
(317,041
|
)
|
$
|
22,819,805
|
The
accompanying notes are an integral part of these financial
statements.
F-3
Exmovere Holdings,
Inc.
Statement
of Cash Flows
(Unaudited)
For
the nine months ended September 30, 2009
9
months
2009
|
9
months
2008
|
From
Inception
to
Sept 30,
2009
|
||||||||||
$ | $ | |||||||||||
CASH
FLOWS FROM OPERATING ACTIVITIES:
|
||||||||||||
Net
Income for the period
|
(312,266 | ) | ( 3,517 | ) | (317,041 | ) | ||||||
Increase
(Decrease) in Accounts Payable
|
12,830 | –– | 109 | |||||||||
Increase
(Decrease) in Due to Shareholders
|
(4,571 | ) | 3,517 | –– | ||||||||
Net
Cash Used on Operating Activities
|
(304,007 | ) | –– | (316,932 | ) | |||||||
CASH
FLOWS FROM FINANCING ACTIVITIES:
|
||||||||||||
Proceeds
from sale of Common Shares
|
632,246 | –– | 212,434 | |||||||||
Net
Cash Provided by Financing Activities
|
632,246 | –– | 212,434 | |||||||||
Net
(Decrease) Increase in Cash and Cash Equivalents
|
328,239 | –– | (104,498 | ) | ||||||||
Cash
and Cash Equivalents at Beginning of Period
|
79 | 79 | –– | |||||||||
Cash
and Cash Equivalents at end of Period
|
328,318 | 79 | (104,498 | ) |
The
accompanying notes are an integral part of these financial
statements.
F-4
Exmovere
Holdings, Inc.
Notes
to Financial Statements
September
30, 2009 and September 30, 2008
1.
|
Description
of the Company and Summary of Significant Accounting
Policies
|
Description
of the Company
Exmovere
Holdings, Inc., formerly known as Clopton House Corporation, (the “Company”) was
formed on December 18, 2006. The Company’s name change was effective January 30,
2009. The Company is seeking registration of its common stock in
accordance with the Securities Exchange Act of 1934. The Company currently
has no operations or significant cash flows.
Basis
of Accounting
The
Company’s policy is to prepare its financial statements on the accrual basis of
accounting in accordance with generally accepted accounting principles.
Revenues are recognized when earned. Expenses are recognized in the
period in which they are incurred. The Statement of Income and Retained
Earnings presents the operations of the Company for the 3 months ended September
30, 2009 and September 30, 2008.
Cash
and Cash Equivalents
For
purposes of the statements of cash flows, the Company considers all highly
liquid investments with original maturities of three months of less to be cash
equivalents. Cash and cash equivalents are stated at cost which
approximates fair market value.
Stock-Based
Compensation Plans
The
Company currently does not have any stock-based compensation plans.
Income
Taxes
The
Company recognizes income tax expense based on the liability method of
accounting for income taxes. Deferred tax assets and liabilities are recognized
for the income tax effect of temporary differences between the tax basis of
assets and liabilities and their carrying values for financial reporting
purposes. Deferred tax expense or benefit is the result of changes in
deferred tax assets and liabilities during the period.
Earnings
(Loss) Per Share
The
Company reports both basic earnings per share, which is based on the weighted
average number of common shares outstanding, and diluted earnings per share,
which is based on the weighted average number of common shares as well as all
potentially dilutive common shares outstanding. For the 3 months ended
September 30, 2009 the Company did not have any potentially dilutive shares
issued or outstanding.
Use
of Estimates
The
preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities at the date of the
financial statements and reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
Management believes that the estimates are reasonable.
F-5
Concentration of Credit
Risk
The
Company has no off-balance-sheet concentrations of credit risk such as foreign
exchange contracts, options contracts or other foreign hedging
arrangements. The Company maintains all of its cash balances with one
financial institution.
Foreign Currency
Translation
The
Company’s functional currency is the United States dollar and the reporting
currency is the United States dollar. Monetary assets and liabilities
resulting from transactions with foreign suppliers and customers are translated
at year end exchange rates while income and expense accounts are translated at
average rates in effect during the year. Gains and losses on
translations are included in income.
2.
|
Going
Concern
|
The
accompanying financial statements have been prepared on the going-concern basis,
which contemplates the realization of assets and the satisfaction of liabilities
in the normal course of business. Currently, the Company has no operations,
significant assets or cash flows. The Company’s continuation as a going
concern is dependent on major shareholder funding and/or the Company entering
into any share exchange agreement with a company who has sufficient
resources.
3.
|
Common
Stock
|
The
Company is authorized to issue up to 35,000,000 shares of its common stock, par
value $0.001 per share.
·
|
On
March 13, 2007, the Company issued 100,000 common shares to Belmont
Partners, LLC at $0.001 per share, or $100.
|
·
|
On
January 28, 2009 the company issued 15,003,000 common
shares as compensation for the Exmo
Licenses (453,000 of those shares being later paid
out to Belmont Partners, LLC as required by the Purchase
Agreement). The Company has adopted the valuation standards in FASB
141, paragraphs D2 – D7 as the G.A.A.P. basis for valuing this
transaction. This standard requires the Company to determine the fair
value of the assets acquired. In order to determine this fair value, the
Company must use either a 3rd
party independent appraisal or the market value of the shares issued.
These options lead us to 2 different
valuations:
|
o
|
A
potential price of the Exmo Licenses as determined by the Pricing Analysis
Memorandum (the “Memorandum”) as prepared by Evans & Evans, Inc. dated
March 31, 2008 (updated on March 27, 2009). In the Memorandum, price
refers to the most likely price at which an arm’s length party would
purchase the Company’s intellectual property through an organized and
regulated and liquid stock market, given the information provided to Evans
& Evans and the following
assumptions:
|
1.
|
An
audit of the financial information provided to Evans & Evans would not
result in any material
changes.
|
2.
|
The
Company’s financial information, as provided by the representatives of the
Company, is assumed to be accurate and complete. Evans &
Evans has not verified the accuracy or completeness of this financial
data.
|
3.
|
The
Company can achieve the projected results as developed by Evans &
Evans using the Company management’s input for market
penetration.
|
4.
|
Evans
& Evans has assumed that the Company and all of its related parties
and its principals have no current and/or other contingent liabilities,
unusual contractual arrangements, or substantial commitments, other than
in the ordinary course of business, nor litigation pending or threatened,
nor judgments rendered against, other than those disclosed by management
and included in the Memorandum, (the Memorandum is not a formal fairness
opinion) that would affect Evans & Evans’ evaluation or
comments.
|
F-6
5.
|
The
Company has complied with all government taxation, import and export and
regulatory practices as well as all aspects of its contractual agreements
that would have an effect on the Report, and there are no other material
agreements entered into by the Company that are not disclosed in the
Memorandum.
|
6.
|
The
Company’s intellectual property is being transferred without any
liabilities and there are no claims against the Company or the Company’s
intellectual property that would have an impact on the pricing
conclusions.
|
7.
|
As
at January 31, 2008, no specific special purchaser(s) was/were identified
that would pay a premium to purchase the Company’s intellectual
property.
|
Most importantly, price as defined in the Memorandum,
which approximates “Market Potential” does not equal fair market value or fair
value. The potential price of
the Exmo Licenses as on January 31, 2008 was in the range of $27,100,000 to
$28,600,000.
o
|
The
fair value of the shares issued, based upon the price new common shares
were purchased from 3rd
party investors. During the 60 day period immediately following the
transfer of the Exmo Licenses into Company,
shares were sold at prices between $1.50 and $3.50 per share. This would make the licenses
worth 15,003,000 shares @ $1.50 per share or a
total of $22,504,500.
|
·
|
The
Company has adopted the lower of these amounts as their standard for the
fair value of this transaction.
|
·
|
During
the period to July 1 to September 30, 2009, the Company sold 139,918
common shares under a Rule 506 offering for total proceeds of $
419,913.
|
·
|
At
September 30, 2009 the Company had 15,374,460 shares of common stock
issued and outstanding. The Company had 100,000 shares of common
stock issued and outstanding at September 30,
2008.
|
4.
|
Borrowings
from Shareholder
|
During
the year ended December 31, 2008, the Company’s initial shareholder, Belmont Partners, LLC, advanced the
Company $4,571 to fund expenses of the Company. The agreement to sell
control of the Company to BT2 International, Inc. required Belmont Partners, LLC
to absorb this loan as part of the purchase price. The Company has written this
loan off during the period.
5.
|
Transfer
of Technology Licenses
|
On
January 28, 2009, the company entered into the Stock
Purchase Agreement with BT2 International and Belmont Partners whereby Belmont
Partners, as sole shareholder, would sell 100,000 shares of common stock of the
Company for $50,000. In addition, Belmont Partners, LLC was to receive a three percent (3%) common stock shares
position in the Company. The stock position was to be based on the capital structure of the
Company after the transfer of the Exmo Licenses to the
Company as more particularly described in the
Agreement. Concurrent with the Agreement, the sole Director, President and
Secretary, who is also the managing partner of Belmont Partners, resigned as
Director, President and Secretary of the Company, and David Bychkov was
appointed as a Director, President and Secretary of the Company and the Company issued an aggregate of 15,003,000 additional
common shares. Belmont received 453,000 of the newly issued shares of
Exmovere pursuant to the terms of the Stock Purchase
Agreement.
On
January 28, 2009, the Company’s Board of Directors approved the transfer of the
Licenses from BT2 International to Exmovere Holdings, Inc. In exchange for the Licenses, the Company simultaneously, issued
an aggregate of 14,550,000 common shares to BT2 International, David Bychkov,
Cheyenne Crow and Robert Doornick and other individuals or entities instrumental
in the development of the Technology and 453,000 common shares to Belmont
Partners, LLC as the remaining payment for the Purchase. This transfer
provides Exmovere Holdings, Inc. with the exclusive world rights to the following technologies: (1) Wireless-enabled and other
biosensor wristwatches to simultaneously detect and continuously monitor heart
rate, heart rate variability, skin conductance, skin temperature, relative
movement and other vital signs; (2) a biosensor enhanced steering wheel to
simultaneously detect and continuously monitor electrocardiogram, galvanic skin
response, skin temperature and relative movement; (3) a biosensor enhanced
turnstile to detect galvanic skin response, skin temperature and torque; (4) a
biosensor enhanced PC mouse to detect heart rate, galvanic skin response, skin
temperature and relative movement; (5) System to detect human emotions from the
above mentioned wristwatch, above mentioned steering wheel, above mentioned
turnstile, above mentioned mouse, or a combination of other biosensors; and (6)
System to process physiological, emotional and hardware-related alerts through
the internet, cellular networks and other media. In addition, the Company will
place 5% of all gross revenue from the sale of products and 10% of all gross
revenues from monitoring and/or the sale or services, into a royalty pool.
Payments from this royalty pool shall be made to the parties named in the License Agreement .
F-7
6.
|
Intangible
Assets
|
The
Company has adopted the FASB Accounting Handbook Section 142 "Goodwill and Other
Intangible Assets". Section 142 requires, among other things, that companies no
longer amortize goodwill or intangible assets, but instead test goodwill or
intangible assets for impairment at least annually. In addition,
Section 142 requires that the Company identify reporting units for the purposes
of assessing potential future impairments of goodwill, reassess the useful lives
of other existing recognized intangible assets, and cease amortization of
intangible assets with an indefinite useful life. An intangible asset
with an indefinite useful life should be tested for impairment in accordance
with the guidance of Section 142.
Intangible
Asset
|
September
30,
2009
|
September30,
2008
|
Amortization
Period
|
||||||
Technology
Licenses
|
$ | 22,504,500 | $ | 0 |
Indefinite
|
||||
Total
|
$ | 22,504,500 | $ | 0 |
7.
|
Property,
Plant and Equipment
|
The
Company has adopted a policy for recording the cost and amortization of
property, plant and equipment, as follows:
Property,
plant and equipment are recorded at cost. When assets are replaced or disposed
of, the cost and accumulated depreciation are removed from the accounts and the
gains or losses are recognized in the period realized. Repairs and maintenance
costs are expensed as incurred. Amortization is provided over the useful lives
using the following methods and annual rates:
Computer
equipment
|
-
30% declining balance basis
|
|
Computer
software (purchased)
|
-
30% declining balance basis
|
|
Furniture
& fixtures
|
-
20% declining balance basis
|
F-8
Exmovere
Holdings, Inc.
|
Financial
Statements
|
(Audited)
|
December
31, 2008
|
INDEX TO
FINANCIAL STATEMENTS
Page
|
|
Report
of Independent Registered Public Accounting Firm
|
F-9
|
Balance
Sheets as of December 31, 2008 and 2007
|
F-10
|
Statement
of Changes in Stockholders’ Equity (Deficit) For the Years Ended December
31, 2008 and 2007
|
F-11
|
Statements
of Cash Flows For the Years Ended December 31, 2008 and
2007
|
F-12
|
Notes
to Financial Statements
|
F-13
|
REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the
Board of Directors
Clopton
House Corporation
We have
audited the accompanying balance sheets of Exmovere Holdings, Inc. (formerly
known as Clopton House Corporation) as of December 31, 2008 and 2007, and the
related statements of income and retained earnings, and cash flows for the years
then ended. These financial statements are the responsibility of the
Company’s management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We
conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that
we plan and perform the audits to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.
In our
opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Clopton House Corporation as of
December 31, 2008 and 2007, and the results of its operations and its cash flows
for the years then ended in conformity with accounting principles generally
accepted in the United States of America.
The
accompanying financial statements have been prepared assuming that the Company
will continue as a going concern. As discussed in Note 2 to the financial
statements, the Company has no operations, significant assets or cash flows
since inception that raise substantial doubt about its ability to continue as a
going concern. Management’s plans regarding these matters are described in
Note 2. The financial statements do not include any adjustments that might
result from the outcome of this uncertainty.
/s/
PS Stephenson & Co., PC
|
|
Wharton,
Texas
April 14,
2009
F-9
Exmovere
Holdings, Inc.
Balance
Sheet
December
31, 2008 and 2007
2008
|
2007
|
|||||||
Assets
|
||||||||
Current
Assets
|
||||||||
Cash
and cash equivalents
|
$
|
79
|
$
|
79
|
||||
Total
Current Assets
|
79
|
79
|
||||||
Total
assets
|
$
|
79
|
$
|
79
|
||||
Liabilities
and Stockholders’ Equity
|
||||||||
Liabilities
|
||||||||
Accounts
Payable
|
$
|
183
|
$
|
-
|
||||
Borrowings
for shareholders
|
4,571
|
-
|
||||||
Total
Liabilities
|
4,571
|
-
|
||||||
Stockholders’
equity
|
||||||||
Common
stock; par value $0.001; 35,000,000 shares
|
||||||||
authorized;
100,000 and -0- shares issued and
|
||||||||
outstanding,
respectively
|
100
|
100
|
||||||
Additional
paid in capital
|
-
|
-
|
||||||
Retained
earnings
|
(4,775
|
)
|
21
|
|||||
Total
stockholders’ equity
|
(4,675
|
)
|
79
|
|||||
Total
liabilities and stockholders’ equity
|
$
|
79
|
$
|
79
|
The
accompanying notes are an integral part of these financial
statements
F-10
Exmovere
Holdings, Inc.
Statements
of Income and Retained Earnings
For
the Years Ended December 31, 2008 and 2007
2008
|
2007
|
|||||||
Revenues
|
$
|
-
|
$
|
-
|
||||
Operating
and Administrative Expenses
|
4,754
|
21
|
||||||
Income
(loss) from operations
|
(4,754
|
)
|
(21
|
)
|
||||
Other
income (expense)
|
-
|
-
|
||||||
Net
income (loss)
|
(4,754
|
)
|
(21
|
)
|
||||
Retained
Earnings, beginning of year
|
(21
|
)
|
-
|
|||||
Retained
Earnings, end of Year
|
$
|
(4,775
|
)
|
$
|
(21
|
)
|
||
Basic
and diluted earnings per share
|
$
|
(0.05
|
)
|
$
|
(0.00
|
)
|
||
Weighted
average shares outstanding
|
100,000
|
79,167
|
The
accompanying notes are an integral part of these financial
statements
F-11
Exmovere
Holdings, Inc.
Statements
of Cash Flows
For
the Years Ended December 31, 2008 and 2007
2008
|
2007
|
|||||||
Cash
Flows Provided from Investing Activities
|
||||||||
Net
Income
|
$
|
(4,754
|
)
|
$
|
(21
|
)
|
||
Adjustments
to reconcile net Income to net cash
|
||||||||
provided
(used) by operating activities
|
||||||||
Increase
in accounts payable
|
183
|
-
|
||||||
Net
cash provided (used) by operating activities
|
(4,571
|
)
|
(21
|
)
|
||||
Cash
Flows Provided from Investing Activities
|
-
|
-
|
||||||
Cash
Flows Used by Financing Activities
|
||||||||
Proceeds
from shareholder loans
|
(4,571
|
)
|
-
|
|||||
Net
proceeds from stock issuance
|
-
|
100
|
||||||
Net
cash provided by Financing Activities
|
(4,571
|
)
|
100
|
|||||
Net
increase (decrease) in cash and cash equivalents
|
-
|
79
|
||||||
Cash
and cash equivalents, beginning of year
|
79
|
-
|
||||||
Cash
and cash equivalents, end of period
|
$
|
79
|
$
|
79
|
The
accompanying notes are an integral part of these financial
statements
F-12
Exmovere
Holdings, Inc.
Notes
to Financial Statements
December
31, 2008 and 2007
1.
|
Description
of the Company and Summary of Significant Accounting
Policies
|
Description
of the Company
Exmovere
Holdings, Inc., formerly known as Clopton House Corporation, (the “Company”) was
formed on December 18, 2006. The Company’s name change was effective
January 30, 2009. The Company is seeking registration of its common stock
in accordance with the Securities Exchange Act of 1934. The Company
currently has no operations or significant cash flows.
Basis
of Accounting
The
Company’s policy is to prepare its financial statements on the accrual basis of
accounting in accordance with generally accepted accounting principles.
Revenues are recognized when earned. Expenses are recognized in the
period in which they are incurred. The Statement of Income and Retained
Earnings presents the operations of the Company for the years ended December 31,
2008 and December 31, 2007.
Cash
and Cash Equivalents
For
purposes of the statements of cash flows, the Company considers all highly
liquid investments with original maturities of three months of less to be cash
equivalents. Cash and cash equivalents are stated at cost which
approximates fair market value.
Stock-Based
Compensation Plans
The
Company currently does not have any stock-based compensation plans.
Income
Taxes
The
Company recognizes income tax expense based on the liability method of
accounting for income taxes. Deferred tax assets and liabilities are
recognized for the income tax effect of temporary differences between the
tax basis of assets and liabilities and their carrying values for financial
reporting purposes. Deferred tax expense or benefit is the result of
changes in deferred tax assets and liabilities during the period.
Earnings
(Loss) Per Share
The
Company reports both basic earnings per share, which is based on the weighted
average number of common shares outstanding, and diluted earnings per share,
which is based on the weighted average number of common shares as well as all
potentially dilutive common shares outstanding. For the year ended
December 31, 2008 the Company did not have any potentially dilutive shares
issued or outstanding.
Use
of Estimates
The
preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities at the date of the
financial statements and reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
Management believes that the estimates are reasonable.
2.
|
Going
Concern
|
The
accompanying financial statements have been prepared on the going-concern basis,
which contemplates the realization of assets and the satisfaction of liabilities
in the normal course of business. Currently, the Company has no operations,
significant assets or cash flows. The Company’s continuation as a going
concern is dependent on major shareholder funding and/or the Company entering
into any share exchange agreement with a company who has sufficient
resources.
F-13
Exmovere
Holdings, Inc.
Notes
to Financial Statements
December
31, 2008 and 2007
3.
|
Common
Stock
|
The
Company is authorized to issue up to 35,000,000 shares of its common stock, par
value $0.001 per share. On March 13, 2007, the Company issued 100,000
common shares to Belmont Partners, LLC at $0.001 per share, or $100. At
December 31, 2008 the Company had 100,000 shares of common stock issued and
outstanding. The Company had no common stock issued and outstanding at
December 31, 2007.
4.
|
Borrowings
from Shareholder
|
During
the year ended December 31, 2008, the Company’s sole shareholder, Belmont
Partners, LLC, advanced the Company $4,571 to fund expenses of the Company.
At December 31, 2008, the Company owed $4,571 to the sole shareholder.
The advances are unsecured and due on demand.
5.
|
Subsequent
Events
|
On
January 28, 2009, the company entered into a Common Stock Purchase Agreement
(the “Agreement”) with BT2 International, Inc. and Belmont Partners, LLC,
whereby Belmont Partners, LLC, as sole shareholder, would sell 100,000 shares of
common stock of the Company for $50,000. In addition, Belmont Partners,
LLC will receive a three percent (3%) common stock shares position in the
Company. The Position shall be based on the capital structure of the
Company after Vend-In of I.P., as defined in the Agreement. Concurrent with the
Agreement, the sole Director, President and Secretary, who is also the managing
partner of Belmont Partners, LLC, resigned as Director, President and Secretary
of the Company, and David Bychkov was appointed as a Director, President and
Secretary of the Company.
On
January 28, 2009, the Company’s Board of Directors approved the transfer of
technology licenses (the “Licenses”) from BT2 International to Exmovere
Holdings, Inc. In exchange for the Licenses to be rendered to the Company,
the Company issued an aggregate of 15,003,000 shares
distributed as follows ; 13,010,000 common shares to BT2 International,
David Bychkov, Cheyenne Crow and Robert Doornick, 1,540,000
to other individuals, and 453,000 to Belmont Partners, LLC to complete the terms
of the Purchase Agreement. This transfer provides Exmovere Holdings, Inc.
with the exclusive world rights to the technologies developed by Exmovere LLC,
Exmocare LLC and Exmogate LLC and include: (1) Wireless-enabled and other
biosensor wristwatches to simultaneously detect and continuously monitor heart
rate, heart rate variability, skin conductance, skin temperature, relative
movement and other vital signs; (2) a biosensor enhanced steering wheel to
simultaneously detect and continuously monitor electrocardiogram, galvanic skin
response, skin temperature and relative movement; (3) a biosensor enhanced
turnstile to detect galvanic skin response, skin temperature and torque; (4) a
biosensor enhanced PC mouse to detect heart rate, galvanic skin response, skin
temperature and relative movement; (5) System to detect human emotions from the
above mentioned wristwatch, above mentioned steering wheel, above mentioned
turnstile, above mentioned mouse, or a combination of other biosensors; and (6)
System to process physiological, emotional and hardware-related alerts through
the internet, cellular networks and other media. In addition, the
Company will place 5% of all gross revenue from the sale of products and 10% of
all gross revenues from monitoring and/or the sale or services, into a royalty
pool. Payments from this royalty pool shall be made to the parties named in the
license agreement.
During
February 2009 to April 2009, the Company sold 94,634 common shares under a Rule
506 offering for total proceeds of $141,951.
F-14
MANAGEMENT’S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND
RESULT OF OPERATIONS
The
following plan of operation provides information which management believes is
relevant to an assessment and understanding of our results of operations and
financial condition. The discussion should be read along with our financial
statements and notes thereto. This section includes a number of forward-looking
statements that reflect our current views with respect to future events and
financial performance. Forward-looking statements are often identified by words
like believe, expect, estimate, anticipate, intend, project and similar
expressions, or words which, by their nature, refer to future events. You should
not place undue certainty on these forward-looking statements. These
forward-looking statements are subject to certain risks and uncertainties that
could cause actual results to differ materially from our
predictions.
Plan
of Operations
The
mission of the Company is to acquire, develop and market biosensor and emotion
detection technologies and to integrate existing, profitable businesses, with a
focus on healthcare, security, and transportation. The Company’s main assets are related to biosensor wristwatches,
biosensor turnstiles, emotion detection algorithms and related technologies,
originally developed by David Bychkov through or in
conjunction with the Exmocare Companies and
BT2 International. The Company also has recently
acquired an exclusive license to use advanced textile and infant vital sign
monitoring technology in the development of one of its products. The Company
distributed 200,000 shares to Sensatex in exchange for said
license.
On
January 28, 2009, the Company’s Board of Directors approved the transfer of
technology licenses from BT2 International to the Company. In exchange for
the Licenses to be rendered to the Company, the Company issued an aggregate of
15,003,000 common shares to BT2 International, David Bychkov, Cheyenne Crow and
Robert Doornick, and a number of other individuals
instrumental in the development of the operations. In compliance
with the Purchase Agreement, the Company was required to give 453,000 of those
shares to Belmont Partners. The license transfer provided
Exmovere Holdings, Inc. with the exclusive world rights to the Exmo Technology and include:
1.
Wireless-enabled and other biosensor wristwatches to simultaneously detect and
continuously monitor heart rate, heart rate variability, skin conductance, skin
temperature, relative movement and other vital signs.
2. A
biosensor enhanced steering wheel to simultaneously detect and continuously
monitor electrocardiogram, galvanic skin response, skin temperature and relative
movement.
3. A
biosensor enhanced turnstile to detect galvanic skin response, skin temperature
and torque.
4. A
biosensor enhanced PC mouse to detect heart rate, galvanic skin response, skin
temperature and relative movement.
5. System
to detect human emotions from the above mentioned wristwatch, above mentioned
steering wheel, above mentioned turnstile, above mentioned mouse, or a
combination of other biosensors.
6. System
to process physiological, emotional and hardware-related alerts through the
internet, cellular networks and other media.
In
consideration for the grant of the license, the licensee agreed to pay the
licensor the following amounts; (i) a non-refundable license fee of $5,000 due
120 days from the date of executing the license agreement payable from the first
$100,000 raised by the licensor; (ii) a non-refundable royalty advance of
$25,000 being due and payable 210 days from the date of executing the licensing
agreement and payable from the next $500,000 raised by the
licensor. If the Licensee fails to make a payment when due, the
license agreement may be terminated, an extension may be granted with interest
charged on overdue payments.
31
The
license agreement is effective for a period of 20 years; however, the parties
have agreed to review the commercial viability of the agreement at the end of 2
years and may amend the agreement by mutual consent. The license agreement may
be terminated (i) without cause, by the Licensee giving not less than sixty (60)
days written notice to the Licensor; (ii) by either party if the other commits
any breach of any term of the agreement and is not remedied within fourteen days
of a written request to remedy the same; (iii) if either party shall party shall
convene a meeting of its creditors due to its inability to pay debts as they
become due.
In
addition, the Company will place 5% of all gross revenue from the sale of
products and 10% of all gross revenues from monitoring and/or the sale or
services, into a royalty pool. Payments from this royalty pool shall be made to
the parties named in the license agreement.
Results of
Operation
Three Months Ended
September 30, 2009 Compared to the Three Months Ended September 30,
2008
For the
three months ended September 30, 2009, we had $0 in revenue. Expenses for
the three months totaled $121,323 resulting in a loss of $121,323. Expenses of
$121,323 for the three months consisted of $121,323 for general and
administrative expenses.
For the
three months ended September 30, 2008, we had
$0 in revenue. Expenses for the three months totaled $3,183 resulting in a loss of $3,183 . Expenses of $3183 for
the three months consisted of $3,183 for general and
administrative expenses.
Nine Months Ended
September 30, 2009 Compared to the Nine Months Ended September 30, 2008
For the
Nine Months ended September 30, 2009, we had $0 in revenue. Expenses for
the Nine Months totaled $317,020 resulting in a loss of $317,020. Expenses of
$317,020 for the Nine Months consisted of $312,266 for general and
administrative expenses.
For the
Nine Months ended September 30, 2008, we had $0
in revenue. Expenses for the Nine Months totaled $3,517 resulting in a loss of $3,517 . Expenses of $3,517 for
the Nine Months consisted of $3,517 for general and
administrative expenses.
Capital Resources and
Liquidity
As of
September 30, 2009 we had $328,318 in cash.
We
believe that we will need additional funding to satisfy our cash requirements
for the next twelve months. Completion of our plan of operations is subject to
attaining adequate revenue or financing. We cannot assure investors that we will
generate the revenues needed or that additional financing will be available. In
the absence of attaining adequate revenue or additional financing, we may be
unable to proceed with our plan of operations.
We
anticipate that our operational, and general and administrative expenses for the
next 12 months will total approximately $150,000. We do not anticipate the
purchase or sale of any significant equipment. We also do not expect any
significant additions to the number of employees. We
estimate that we may need 10-15 million dollars over the next 12 months to
complete research and development and marketing of our products. We
currently are not generating revenue; therefore the only means we will have to
fund those needs is by raising additional capital, leases of our licenses to
distributors or loans. If we have to comply with more regulatory
requirements than expected, we may need another 1 – 2 million dollars. We have
entered into the Sensatex License Agreement, which requires royalties to be paid
to Sensatex from certain earnings from our Exmobaby product; however that
agreement does not impose any requirements on the Company to make any specific
earnings, obtain any additional capital or to incur any specific expense in
addition to that already incurred in acquiring the Sensatex
License. The foregoing represents our best estimate of our
cash needs based on current planning and business conditions. The exact
allocation, purposes and timing of any monies raised in subsequent private
financings may vary significantly depending upon the exact amount of funds
raised and our progress with the execution of our business plan. We anticipate
that depending on market conditions and our plan of operations, we may incur
operating losses in the foreseeable future. Therefore, our auditors have raised
substantial doubt about our ability to continue as a going concern.
32
Critical Accounting
Policies
The
Company’s financial statements and related public financial information are
based on the application of accounting principles generally accepted in the
United States (“GAAP”). GAAP requires the use of estimates; assumptions,
judgments and subjective interpretations of accounting principles that have an
impact on the assets, liabilities, revenue and expense amounts reported. These
estimates can also affect supplemental information contained in our external
disclosures including information regarding contingencies, risk and
financial condition. We believe our use if estimates and underlying accounting
assumptions adhere to GAAP and are consistently and conservatively applied. We
base our estimates on historical experience and on various other assumptions
that we believe to be reasonable under the circumstances. Actual results may
differ materially from these estimates under different assumptions or
conditions. We continue to monitor significant estimates made during the
preparation of our financial statement.
Our
significant accounting policies are summarized in Note 1 of our financial
statements. While all of these significant accounting policies impact the
Company’s financial condition and results of operations, we view certain of
these policies as critical. Policies determined to be critical are those
policies that have the most significant impact on the Company and require
management to use a greater degree of judgment and estimates. Actual
results may differ from those estimates. Our management believes that given
current facts and circumstances, it is unlikely that applying any other
reasonable judgments or estimate methodologies would cause effect on
our financial position or liquidity, results of operations or cash flows
for the periods presented.
Off Balance Sheet
Transactions
We have
no off-balance sheet arrangements.
Fiscal Year Ended December
31, 2008 Compared to Fiscal Year Ended December 31, 2007
The
Company was originally incorporated on December 18, 2006 under the laws of the
State of Delaware. The Company was initially formed as a “blank check”
entity for the purpose of seeking a merger, acquisition or other business
combination transaction with a privately owned entity seeking to become a
publicly-owned entity.
The
Company’s previous principal business activity was to seek a suitable reverse
acquisition candidate through acquisition, merger or other suitable business
combination method.
It was
the intent of management and significant stockholders to provide sufficient
working capital necessary to support and preserve the integrity of the corporate
entity. However, there is no legal obligation for either management or
significant stockholders to provide additional future funding. Should this
pledge fail to provide financing, the Company has not identified any alternative
sources. Consequently, there is substantial doubt about the Company’s
ability to continue as a going concern.
The
Company’s need for capital may change dramatically because of any business
acquisition or combination transaction. There can be no assurance that the
Company will identify any such business, product, technology or company suitable
for acquisition in the future. Further, there can be no assurance that the
Company would be successful in consummating any acquisition on favorable terms
or that it will be able to profitably manage the business, product, technology
or company it acquires.
Results
of Operations
For the
period from December 18, 2006 (inception), to December 31, 2008, we had no
revenue. Expenses for the period totaled $4,754 resulting in a net loss of
$4,754. Expenses for the period consisted of $4,754 for General and
administrative expenses.
Capital
Resources and Liquidity
As
of December 31, 2008 we have $ 79.00 cash on
hand.
We
anticipate that depending on market conditions and our plan of operations, we
may incur operating losses in the foreseeable future. Therefore, our auditors
have raised substantial doubt about our ability to continue as a going
concern.
33
Recent Accounting
Pronouncements
In
April 2009, the FASB issued FASB Staff Position (“FSP”) No. 107-1 and
APB 28-1, Interim Disclosures
about Fair Value of Financial Instruments (“FSP 107-1 and APB 28-1”). FSP
107-1 and APB 28-1 require that publicly traded companies include the fair value
disclosures required by SFAS No. 107 in their interim financial statements
and is effective for interim and annual periods ending after June 15, 2009,
with early adoption permitted for periods ending after March 15, 2009, and
must be applied prospectively. The Company does not expect the adoption of FSP
107-1 and APB 28-1 to have any material impact on its financial statements and
required disclosures. In
April 2009, the FASB issued FSP FAS 157-4, Determining Fair Value When the
Volume and Level of Activity for the Asset or Liability Have Significantly
Decreased and Identifying Transactions That Are Not Orderly (“FSP
157-4”). FSP 157-4 provides guidance regarding how to determine whether there
has been a significant decrease in the volume and level of activity for the
asset or liability when compared with normal market activity for the asset or
liability. In such situations, an entity may conclude that transactions or
quoted prices may not be determinative of fair value, and may adjust the
transactions or quoted prices to arrive at the fair value of the asset or
liability. FSP 157-4 is effective for interim and annual reporting periods
ending after June 15, 2009, with early adoption permitted for periods
ending after March 15, 2009, and must be applied prospectively. The Company
does not expect the adoption of FAS 157-4 to have any material impact on its
financial statements or required disclosures.
In
May 2009, the FASB issued SFAS No. 165, Subsequent Events (“SFAS
No. 165”). SFAS No. 165 establishes standards of accounting for and
disclosure of events that occur after the balance sheet date but before
financial statements are issued. Entities are required to disclose the date
through which subsequent events have been evaluated and the basis for that date.
SFAS No. 165 is effective on a prospective basis for interim and annual
periods ending after June 15, 2009. The Company does not expect the
adoption of SFAS No. 165 to have any material impact on its financial
statements or required disclosures.
In June
2009, the FASB issued SFAS 168, “Codification”, which confirmed that
the FASB Accounting Standards Codification will become the single official
source of authoritative US GAAP (other than guidance issued by the SEC),
superseding existing FASB, American Institute of Certified Public Accountants,
Emerging Issues Task Force (“EITF”) and related literature. After that date,
only one level of authoritative US GAAP will exist. All other literature
will be considered non-authoritative. The Codification does not change
US GAAP; instead, it introduces a new structure that is organized in an
easily accessible, user-friendly online research system. The Codification
becomes effective for interim and annual periods ending on or after
September 15, 2009. The Company will apply the Codification beginning in
the third quarter of fiscal 2009.
Off-Balance
Sheet Arrangements
We have
no off-balance sheet arrangements.
CHANGES
IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE
There
have been no changes in or disagreements with accountants on accounting or
financial disclosure matters.
DIRECTORS,
EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS
The
following table sets forth the name and age of officers and director as of
September 2, 2009. Our Executive officers are elected annually by our Board of
Directors. Our executive officers hold their offices until they resign, are
removed by the Board, or his successor is elected and
qualified.
Name
|
Age
|
Position
|
||
David
Bychkov
|
30
|
Chairman,
Chief Executive Officer, President and Chief Financial
Officer
|
||
Cheyenne
Crow
|
43
|
Chief
Operations Officer, Director
|
||
Robert
Doornick
|
63
|
Director
|
||
Joseph
Meuse
|
38
|
Director
|
||
Delbert
G. Blewett
|
74
|
Secretary,
Director
|
Set forth
below is a brief description of the background and business experience of our
executive officers and directors for the past five years.
34
David Bychkov has worked as an
inventor, entrepreneur and psycho-physiologist since 1999. He is currently ABD
(ABD stands for All But Dissertation status and it
is an academic term that refers to a doctoral candidate that has completed his
coursework but who has not yet defended his dissertation. David
Bychkov has completed his doctoral coursework at the European Graduate School in
Saas-Fee, Switzerland and is currently writing his dissertation. He
will defend his dissertation and graduate in June, 2010) in the Philosophy of
Neuroscience at the European Graduate School in Saas Fee,
Switzerland. He completed his Master’s Degree there in 2005. He also
holds a Bachelor’s Degree from the University of Chicago. Mr. Bychkov also
served as Professor of Holographic Cinema and Director of the Laboratory of
Psychophysiology at Universita’ dell’ Immagine in Milan, Italy from
1999-2006.
Cheyenne Crow served as
Director of Publications for Graphic Publications Inc. in 1989, where he
directed international and USA staff. In 1991, he joined Emhart
Corporation/Black and Decker Corporation. There he was a Director of Sales,
Marketing, Worldwide Publications and Communications related to international
defense, health, and special security projects for NASA, the Executive Office of
the President, EPA, NSA, CIA, DOT, DOE, DOH, FAA and others. In 1996, he
launched his own international communications company called Cheyenne E-Digital.
At E-Digital, Cheyenne directed projects for various government agencies,
non-profits, foundations, and Fortune 500 Corporations within the USA, Middle
East, Asia, and Latin America. In 2003, Mr. Crow
was appointed Vice President and Chief Operations Officer of Exmovere
LLC. In 2006 he was also contracted to be Chief Operations Officer of
both Exmogate LLC and Exmocare LLC. He has managed Exmocare projects
for NASA, the Department of State and other agencies He has
been instrumental in corporate strategy, mergers and acquisitions, strategic
business planning, and investor relations on Wall Street. In January, 2009 he became Director, Vice President and Chief
Operations Officer of Exmovere Holdings Inc. Cheyenne assumes
a critical role in the corporate management team He has
managed Exmovere’s operations, ranging from scientific product development in
the defense, health, and transportation sectors. He is
currently based at the company’s world headquarters in the McLean,
Virginia.
Robert Doornick is President
and Founder of International Robotics Inc., and the Techno-Marketing Alliance.
In addition to his work as an inventor of robots, he is also known for
developing original marketing strategies. Mr.
Doornick has been President of International Robotics Inc., since at least the
year 2005. It was Doornick’s Keynote Address at a World
Conference for the shopping center industry which triggered such intense
interest in Techno-Marketing. He has also lectured at The U.S. Space Foundation,
New York University School of Business, Fordham University, the International
Conference for the Exhibit Industry, the International Council of Shopping
Centers, the International Meeting Planners Association, as well as conducting
numerous seminars for Fortune 500 Companies. He
became a Director of the Company in January, 2009.
Joseph Meuse is Founder and
President of Belmont Partners, an international financial consulting firm and
leading provider of public shell vehicles for use in reverse merger transactions
since at least the year 2005 . He is co-owner of
PacWest, LLC, a registered stock transfer agency representing 100 publicly
traded issuers, and is a Principal in Global Filings, an Edgarizing Company.
Mr. Meuse has 13 years of financial management and advisory experience and
holds Series 7, 24 and 6 licenses.
Delbert G. Blewett is a
graduate of the University of Saskatchewan holding the degree of Bachelor of
Science in Agriculture and Bachelor of Laws. Mr. Blewett was in the private
practice of law for some 30 years directed to commercial and corporate law. Much
of the activity was assisting clients in raising capital for their companies,
both private and public. Del Blewett retired from his private practice, does advisory work for other companies and has served as
Secretary of Exmovere since January, 2009.
Term
of Office
Our
directors are appointed for a one-year term to hold office until the next annual
general meeting of our shareholders or until removed from office in accordance
with our bylaws. Our officers are appointed by our board of directors and hold
office until removed by the board.
35
EXECUTIVE
COMPENSATION
The
following summary compensation table sets forth all compensation awarded to,
earned by, or paid to the named executive officers paid by us during the period
ended December 31, 2008 and 2007.
SUMMARY
COMPENSATION TABLE
Name
and Principal Position
|
Year
|
Salary
($)
|
Bonus
($)
|
Stock
Awards
($)
|
Option
Awards
($)
|
Non-Equity
Incentive Plan Compensation ($)
|
Non-Qualified
Deferred Compensation Earnings
($)
|
All
Other Compensation
($)
|
Totals
($)
|
||||||||||||
David
Bychkov, President, Chief Executive Officer
|
2008
|
$
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
$
|
0
|
||||||||||
Chief
Financial Officer and Director
|
2007
|
$
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
$
|
0
|
||||||||||
Delbert
G. Blewett,
|
2008
|
$
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
$
|
0
|
||||||||||
Secretary
and Director
|
2007
|
$
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
$
|
0
|
||||||||||
Cheyenne
Crow,
|
2008
|
$
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
$
|
0
|
||||||||||
Chief
Operations Officer, Director
|
2007
|
$
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
$
|
0
|
Option Grants
Table. There were
no individual grants of stock options to purchase our common stock made to the
executive officers named in the Summary Compensation Table through December 31,
2008.
Aggregated
Option Exercises and Fiscal Year-End Option Value Table. There were no stock options
exercised during period ending December 31, 2008 by the executive officers named
in the Summary Compensation Table.
Long-Term Incentive Plan
(“LTIP”) Awards Table.
There were no awards made to a named executive officers in the last
completed fiscal year under any LTIP
Compensation of
Directors
Directors
are permitted to receive fixed fees and other compensation for their services as
directors. The Board of Directors has the authority to fix the compensation of
directors. No amounts have been paid to, or accrued to, directors in such
capacity.
Employment
Agreements
Currently,
we do not have an employment agreement in place with our officers and
directors.
36
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The
following table provides the names and addresses of each person known to us to
own more than 5% of our outstanding shares of common stock as of December 31 , 2009 and by the officers and directors,
individually and as a group. Except as otherwise indicated, all shares are owned
directly and the shareholders listed possess sole
voting and investment power with respect to the shares shown.
Name
|
|
Number
of Shares
Beneficially
Owned
|
|
Percent
of Class (2)
|
|
Estimated
Value (6)
|
David
Bychkov(1)
|
4,799,333
|
30.6%
|
$8,292,600
|
|||
BT2
International, Inc.(3)
|
3,010,000
|
19.2%
|
$5,203,200
|
|||
Belmont
Partners, LLC(4)
|
453,000
|
2.9%
|
$ 785,900
|
|||
Cheyenne
Crow(1)
|
4,799,334
|
30.6%
|
|
$8,292,600
|
||
Robert
Doornick(5)
|
500,000
|
3.2%
|
$ 867,200
|
|||
All
Executive Officers and Directors as a group
|
|
13,561,667
|
|
86.5%
|
$23,441,500
|
(1) |
Unless
otherwise stated, the address for each person is 1600 Tysons Blvd,
8th Floor, McLean VA
22102.
|
(2) |
Based
on 15,675,998 shares of common stock
outstanding as of December 31 ,
2009.
|
(3) |
Delbert
Blewett and Joseph Batty are the control officers of BT2 International,
Inc., and thus are deemed to have beneficial control over these shares.
The address for each person is 1117 Desert Lane, Suite 2067,
Las Vegas, NV 89102.
|
(4) |
Joseph
Meuse is the principal of Belmont Partners, LLC is located at 360 Main
Street, Washington Virginia 22747 and is deemed to have beneficial control
over these shares.
|
(5) |
Unless
otherwise stated, the address for each person is PO Box 710, Kent, CT
06757.
|
(6) |
Based
on the appraised value of the License as determined by the appraisal done
by Evans & Evans, Inc. dated March 31, 2008 (updated on March 27,
2009). This value places the licenses in a range of $27,100,000 to
$28,600,000 and we used the lower
value.
|
TRANSACTIONS
WITH RELATED PERSONS, PROMOTERS AND CERTAIN CONTROL PERSONS
On
January 28, 2009, the Company’s Board of Directors approved the transfer of
technology licenses from BT2 International to Exmovere Holdings, Inc. In
exchange for the licenses to be rendered to the Company, the Company issued an
aggregate of 15,003,000 common shares to BT2
International, David Bychkov, Cheyenne Crow, Robert Doornick and other individuals and entities each of which own less than
5%. 453,000 of those newly issued shares were paid to Belmont
Partners as required by the Stock Purchase Agreement which required Belmont
Partners to receive its shares percentage after the Exmo Licenses were included
in the value of the Company.
The
related parties involved in the transaction are David Bychkov, our President and
Chief Executive Officer, Cheyenne Crow, our Chief Operations Officer and a
Director, Robert Doornick, a Director and BT2
International. BT2 International is 40% owned by our Secretary,
Delbert Blewett through a holding company and 40% owned by Joseph Batty through
a holding company None of the related parties received their shares for future
services. Each of the related parties serves in their employment
position at will. The Directors serve for a term of one
year.
ITEM
12A. DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION OF
SECURITIES ACT LIABILITIES.
Our
directors and officers are indemnified as provided by the Delaware corporate law
and our Bylaws. We have agreed to indemnify each of our directors and certain
officers against certain liabilities, including liabilities under the Securities
Act of 1933. Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to our directors, officers and
controlling persons pursuant to the provisions described above, or otherwise, we
have been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities Act
of 1933 and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than our payment of expenses
incurred or paid by our director, officer or controlling person in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, we will, unless in the opinion of our counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question 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.
37
We have
been advised that in the opinion of the Securities and Exchange Commission
indemnification for liabilities arising under the Securities Act 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 is asserted by one of our directors, officers, or controlling
persons in connection with the securities being registered, we will, unless in
the opinion of our legal counsel the matter has been settled by controlling
precedent, submit the question of whether such indemnification is against public
policy to a court of appropriate jurisdiction. We will then be governed by the
court’s decision.
38
EXMOVERE
HOLDINGS, INC.
1,140,407 SHARES OF COMMON STOCK
PROSPECTUS
YOU
SHOULD RELY ONLY ON THE INFORMATION CONTAINED IN THIS DOCUMENT OR THAT WE HAVE
REFERRED YOU TO. WE HAVE NOT AUTHORIZED ANYONE TO PROVIDE YOU WITH INFORMATION
THAT IS DIFFERENT. THIS PROSPECTUS IS NOT AN OFFER TO SELL COMMON STOCK AND IS
NOT SOLICITING AN OFFER TO BUY COMMON STOCK IN ANY STATE WHERE THE OFFER OR SALE
IS NOT PERMITTED.
Until
_____________, 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 dealer’s obligation to deliver a prospectus when
acting as underwriters and with respect to their unsold allotments or
subscriptions.
The Date of This Prospectus
is
, 2010
39
PART
II INFORMATION NOT REQUIRED IN THE PROSPECTUS
ITEM
13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
Securities
and Exchange Commission registration fee
|
$
|
284.59
|
||
Federal
Taxes
|
$
|
|||
State
Taxes and Fees
|
$
|
|||
Transfer
Agent Fees
|
$
|
2,500
|
||
Accounting
fees and expenses
|
$
|
2,500
|
||
Legal
fees and expense
|
$
|
15,000
|
||
Blue
Sky fees and expenses
|
$
|
2,500
|
||
Miscellaneous
|
$
|
|||
Total
|
$
|
22,784.59
|
All
amounts are estimates other than the Commission’s registration fee. We are
paying all expenses of the offering listed above. No portion of these expenses
will be borne by the selling shareholders. The selling shareholders, however,
will pay any other expenses incurred in selling their common stock, including
any brokerage commissions or costs of sale.
ITEM
14. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Our
directors and officers are indemnified as provided by the Delaware corporate law
and our Bylaws. We have agreed to indemnify each of our directors and certain
officers against certain liabilities, including liabilities under the Securities
Act of 1933. Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to our directors, officers and
controlling persons pursuant to the provisions described above, or otherwise, we
have been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities Act
of 1933 and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than our payment of expenses
incurred or paid by our director, officer or controlling person in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, we will, unless in the opinion of our counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question 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.
We have
been advised that in the opinion of the Securities and Exchange Commission
indemnification for liabilities arising under the Securities Act 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 is asserted by one of our directors, officers, or controlling
persons in connection with the securities being registered, we will, unless
in the opinion of our legal counsel the matter has been settled by
controlling precedent, submit the question of whether such indemnification is
against public policy to a court of appropriate jurisdiction. We will then be
governed by the court’s decision.
ITEM
15. RECENT SALES OF UNREGISTERED SECURITIES.
We were
incorporated in the State of Delaware in December 2006 and 100,000 shares of
common stock were issued to Belmont Partners, LLC (controlled by Joseph Meuse)
for consideration of $100. These shares were issued in reliance on the exemption
under Section 4(2) of the Securities Act of 1933, as amended (the “Act”) and
were issued as founders shares. These shares of our common stock qualified for
exemption under Section 4(2) of the Securities Act of 1933 since the issuance
shares by us did not involve a public offering. The offering was not a “public
offering” as defined in Section 4(2) due to the insubstantial number of persons
involved in the deal, size of the offering, manner of the offering and number of
shares offered. We did not undertake an offering in which we sold a high number
of shares to a high number of investors. In addition, Belmont Partners, LLC had
the necessary investment intent as required by Section 4(2) since they agreed to
and received share certificates bearing a legend stating that such shares
are restricted pursuant to Rule 144 of the 1933 Securities Act. This restriction
ensures that these shares would not be immediately redistributed into the market
and therefore not be part of a “public offering.” Based on an analysis of the
above factors, we have met the requirements to qualify for exemption under
Section 4(2) of the Securities Act of 1933 for this transaction.
40
On
January 28, 2009, the Company’s Board of Directors approved the transfer of
technology licenses from BT2 International to Exmovere Holdings, Inc. In
exchange for the licenses to be rendered to the Company, the Company issued an
aggregate of 14,550,000 (15,003,000 – 453,000)
shares to BT2 International, David Bychkov, Cheyenne Crow Robert Doornick, and other individuals and entities instrumental in the
development of the licenses . These shares of our common stock
qualified for exemption under Section 4(2) of the Securities Act of 1933 since
the issuance shares by us did not involve a public offering. The offering was
not a “public offering” as defined in Section 4(2) due to the insubstantial
number of persons involved in the deal, size of the offering, manner of the
offering and number of shares offered. We did not undertake an offering in which
we sold a high number of shares to a high number of investors. In addition, the
investors had the necessary investment intent as required by Section 4(2) since
they agreed to and received share certificates bearing a legend stating that
such shares are restricted pursuant to Rule 144 of the 1933 Securities Act. This
restriction ensures that these shares would not be immediately redistributed
into the market and therefore not be part of a “public offering.” Based on an
analysis of the above factors, we have met the requirements to qualify for
exemption under Section 4(2) of the Securities Act of 1933 for this
transaction.
In March
2009, we completed a Regulation D Rule 506 offering in which we sold 122,101 shares of common stock to 49 investors, at a price
per share of $1.50 for an aggregate offering price of $183,151.50 . The following sets forth the identity of the
class of persons to whom we sold these shares and the amount of shares for each
shareholder:
Amanda
R. Romeo
|
200
|
Angela
Taylor
|
500
|
Antonio
C. Pam and Demetria L. Pam
|
100
|
Carolyn
S. Abshire
|
2,000
|
Catherine
W. Morgan
|
10,000
|
Catherine
W. Morgan, and James Morgan
|
5,000
|
Charles
Lambert
|
2,000
|
Cleonie
Chang Schwartz
|
500
|
Dawana
B. Robinson
|
100
|
Deepika
Negi
|
500
|
Deneen
Stambone
|
500
|
Dr.
Philippe A. Lowenstein
|
5,000
|
Easton
Peterson
|
1,000
|
Foster
Rockwell
|
250
|
Hokenson
Group, Inc.
|
1,000
|
Jakeya
L. Morgan
|
1,000
|
James
Morgan
|
10,000
|
Jeffrey
Lance Thomas
|
2,000
|
John
Rogers
|
250
|
41
Kaiesha
C. Morgan
|
1,000
|
Kristopher
Ussery
|
300
|
Loring
R. Henderson
|
1,000
|
Lucia
F. Mokhsijerjian
|
200
|
Marianne
McQuade
|
2,000
|
Marie
Colter
|
700
|
Mary
B. O'Connor
|
500
|
Miles
Henderson
|
1,000
|
Ms.
Jaroslava Pickova
|
40,000
|
Pamela
M. Norick
|
5,000
|
Pamela
M. Norick
|
5,000
|
Phyllis
Abshire D'Hoop
|
1,000
|
Quynh
Nguyen
|
300
|
Raul
Grosz
|
100
|
Regena
Herndon
|
1,334
|
Reginald
d'Hoop
|
1,000
|
Richard
Barksdale
|
100
|
Richard
G. Miller
|
100
|
Robert
A. Atkins
|
100
|
Samuel
and Marie Colter
|
300
|
Samuel
Colter
|
200
|
Scott
Lurding
|
2,000
|
Sheniqua
L. Morgan
|
1,000
|
Silvia
Cordovi
|
667
|
Stephanie
Stevens
|
100
|
Thomas
A. Nabi
|
2000
|
Tiffany
S. Ussery
|
500
|
William
Peterson
|
1,000
|
Zeda
F. Rosenberg
|
5,000
|
Zoika
Naskova
|
6,700
|
Please
note that pursuant to Rule 506, all shares purchased in the Regulation D Rule
506 offering completed in March 2009 were restricted in accordance with Rule 144
of the Securities Act of 1933. In addition, each of these shareholders were
either accredited as defined in Rule 501 (a) of Regulation D promulgated under
the Securities Act or sophisticated as defined in Rule 506(b)(2)(ii) of
Regulation D promulgated under the Securities Act.
In June 2009, we completed a Regulation D Rule 506 offering
in which we sold 77,820 shares of common stock to 8 investors, at a price per
share of $2.50 for an aggregate offering price of $194,550. The following sets
forth the identity of the class of persons to whom we sold these shares and the
amount of shares for each shareholder:
Pamela
M. Norick
|
1,400
|
Naseem
Ahmed
|
800
|
Tasneem
Ahmed
|
6,000
|
Joseph
M. Johnson
|
4,000
|
Roseanne
Luth
|
4,000
|
Fab
5 Sportz, LLC
|
120
|
Anita
Tipl e r
|
61,400
|
Charlynda
Credle
|
100
|
Please
note that pursuant to Rule 506, all shares purchased in the Regulation D Rule
506 offering completed in June 2009 were restricted
in accordance with Rule 144 of the Securities Act of 1933. In addition, each of
these shareholders were either accredited as defined in Rule 501 (a) of
Regulation D promulgated under the Securities Act or sophisticated as defined in
Rule 506(b)(2)(ii) of Regulation D promulgated under the Securities
Act.
42
In October 2009, we completed a Regulation D Rule 506
offering in which we sold 173,077 shares of common
stock to 12 investors with one
investor also purchasing as custodian for three other shareholders for a total
of 15 investors , at a price per share of $3.50 for an aggregate offering
price of $605,769.50 . The following sets
forth the identity of the class of persons to whom we sold these shares and the
amount of shares for each shareholder:
David
Mootsey
|
300
|
Daniel
Beckmann
|
300
|
Jay
Henderson
|
600
|
Derek
Winfield
|
200
|
Lananh
Nguyen
|
14,286
|
Xuemi
Jin
|
10,000
|
Victor
S. Mahal
|
2,000
|
Shobha
Gupta Marwah
|
2,100
|
Lananh
Nguyen
|
48,572
|
Lananh
Nguyen, CUST FBO UTMA VA Thulan Hoang
|
2,858
|
Lananh
Nguyen and Viet Van Nguyen
|
4,287
|
Lananh
Nguyen, CUST FBO UTMA VA Emily Nguyen Bul
|
2,858
|
Lananh
Nguyen, CUST FBO UTMA VA Quynh Nguyen
|
2,858
|
Divon
T. Lee
|
1,429
|
Lananh
Nguyen
|
71,429
|
Tuan
Q. Nguyen
|
4,000
|
Pamela
M. Norick
|
5,000
|
Please
note that pursuant to Rule 506, all shares purchased in the Regulation D Rule
506 offering completed in October 2009 were
restricted in accordance with Rule 144 of the Securities Act of 1933. In
addition, each of these shareholders were either accredited as defined in Rule
501 (a) of Regulation D promulgated under the Securities Act or sophisticated as
defined in Rule 506(b)(2)(ii) of Regulation D promulgated under the Securities
Act.
(A)
|
At
the time of the offering we were not: (1) subject to the reporting
requirements of Section 13 or 15 (d) of the Exchange Act; or (2) an
“investment company” within the meaning of the federal securities
laws.
|
|
(B)
|
Neither
we, nor any of our predecessors, nor any of our directors, nor any
beneficial owner of 10% or more of any class of our equity securities, nor
any promoter currently connected with us in any capacity has been
convicted within the past ten years of any felony in connection with the
purchase or sale of any security.
|
|
(C)
|
The
offers and sales of securities by us pursuant to the offerings were not
attempts to evade any registration or resale requirements of the
securities laws of the United States or any of its
states.
|
|
(D)
|
None
of the investors are affiliated with any of our directors, officers or
promoters or any beneficial owner of 10% or more of our
securities.
|
Pursuant
to the Sensatex License Agreement we issued 200,000 shares of our Common Stock
to Sensatex in exchange for the rights and licenses granted pursuant to the
Sensatex License Agreement. These shares were issued in reliance on the
exemption under Section 4(2) of the Securities Act of 1933, as amended (the
“Act”). The issuance of these shares was exempt from registration,
pursuant to Section 4(2) of the Securities Act of 1933. These
securities qualified for exemption under Section 4(2) of the Securities Act of
1933 since the issuance securities by us did not involve a public offering. The
offering was not a “public offering” as defined in Section 4(2) due to the
insubstantial number of persons involved in the deal, size of the offering,
manner of the offering and number of securities offered. We did not undertake an
offering in which we sold a high number of securities to a high number of
investors. In addition, these shareholders had the necessary investment intent
as required by Section 4(2) since they agreed to and received share certificates
bearing a legend stating that such securities are restricted pursuant to Rule
144 of the 1933 Securities Act. This restriction ensures that these securities
would not be immediately redistributed into the market and therefore not be part
of a “public offering.” Based on an analysis of the above factors, we have met
the requirements to qualify for exemption under Section 4(2) of the Securities
Act of 1933 for this transaction.
43
We have
never utilized an underwriter for an offering of our securities. Other than the
securities mentioned above, we have not issued or sold any
securities.
ITEM
16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
EXHIBIT
|
||
NUMBER
|
DESCRIPTION
|
|
3.1
|
Articles
of Incorporation*
|
|
3.2
|
By-Laws*
|
|
5.1
|
Opinion
of Springs Law Firm PLLC
|
|
10.1
|
BT2
Technology License Agreement dated June
2008
|
|
10.2
|
Common
Stock Purchase Agreement With All Exhibits
|
|
10.3
|
Amended
License Agreement dated December 2008
|
|
23.1
|
Consent
of PS Stephenson & Co., PC **
|
|
99.1
|
NASA
Letter **
|
|
99.2
|
AARP
Exmocare Article **
|
|
99.3
|
Exmocare
Business Week Article **
|
|
99.4
|
PC
Magazine Exmocare Article **
|
|
99.5
|
Steering
Patent Application **
|
|
99.6
|
Watch
Patent Application **
|
|
99.7
|
Turnstile Patent Application **
|
|
99.8
|
Exmovere
Trademark
|
|
99.9
|
Wall
Street Journal Article
|
|
99.10
|
Popular
Mechanics Article
|
|
99.11
|
Dr.
Crounse Article on
Microsoft.com
|
———————
●
* Incorporated by
reference to Form S-1 filed with the Securities & Exchange Commission on
September 10, 2009.
● **
Incorporated by reference to Form S-1/A Amendment 1 filed with the Securities
& Exchange Commission on December 3, 2009
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
to:
|
(i)
|
To
include any prospectus required by Section 10(a)(3) of the Securities Act
of 1933;
|
|
(ii)
|
Reflect
in the prospectus any facts or events which, individually or together,
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) any
deviation from the low or high end of the estimated maximum offering range
may be reflected in the form of prospectus filed with the Commission
pursuant to Rule 424(b) if, in the aggregate, the changes in volume and
price represent no more than a 20% change in the maximum aggregate
offering price set forth in the “Calculation of Registration Fee”
table in the effective registration statement; and
|
|
(iii)
|
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 therein, and the offering of such securities at that time shall
be deemed to be the initial bona fide offering
thereof.
|
44
(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.
(B)
The issuer is subject to Rule 430C (ss. 230. 430C of this chapter): Each
prospectus filed pursuant to Rule 424(b)(ss. 230. 424(b) of this chapter)
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 (ss. 230. 430A of this chapter), shall
be deemed to be part of and included in the registration statement as of
the date it is first used after effectiveness. Provided, however, that no
statement made in a registration statement or prospectus that is
part of the registration statement or made in a document incorporated
or deemed incorporated by reference into the registration statement or
prospectus that is part of the registration statement will, as to a
purchaser with a time of contract of sale prior to such first use,
supersede or modify any statement that was made in the registration
statement or prospectus that was part of the registration statement or
made in any such document immediately prior to such date of first
use.
|
45
SIGNATURES
In
accordance with the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-1 and authorized this registration statement
to be signed on its behalf by the undersigned, in McLean, Virginia on March 4, 2010.
EXMOVERE HOLDINGS,
INC.
/s/
David Bychkov
|
|
Name: David Bychkov | |
Position: President, | |
Principal
Executive Officer, Principal
|
|
Principal
Financial Officer,Accounting
|
|
Officer, Director |
46
POWER
OF ATTORNEY
KNOW ALL
MEN BY THESE PRESENTS, that each person whose signature appears below
constitutes and appoints David Bychkov and their true and lawful
attorneys-in-fact and agents, with full power of substitution and
re-substitution, for him and in his name, place and stead, in any and all
capacities (including his capacity as a director and/or officer of Exmovere
Holdings, Inc.) to sign any or all amendments (including post-effective
amendments) to this registration statement and any and all additional
registration statements pursuant to rule 462(b) of the Securities Act of 1933,
as amended, and to file the same, with all exhibits thereto, and all other
documents in connection therewith, with the SEC, granting unto each said
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite and necessary to be done in
and about the premises, as fully to all intents and purposes as he might or
could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents or any of them, or their or his substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
In
accordance with the requirements of the Securities Act of 1933, as amended, this
registration statement was signed below by the following persons in the
capacities and on the dates stated.
Dated:
March 4, 2010
EXMOVERE HOLDINGS,
INC.
By:
|
/s/
Cheyenne Crow
|
|
Cheyenne
Crow
|
||
Chief
Operations Officer
|
||
Director
|
||
/s/
Delbert G. Blewett
|
||
Delbert
G. Blewett
|
||
Secretary
|
||
Director
|
||
/s/ Robert
Doornick
|
||
Robert
Doornick
Director
|
||
/s/ Joseph
Meuse
|
||
Joseph
Meuse
Director
|
47