Attached files
| file | filename |
|---|---|
| EXCEL - IDEA: XBRL DOCUMENT - ARTVENTIVE MEDICAL GROUP, INC. | Financial_Report.xls |
| EX-31 - CERTIFICATION - ARTVENTIVE MEDICAL GROUP, INC. | exhibit31.htm |
| EX-32 - CERTIFICATION - ARTVENTIVE MEDICAL GROUP, INC. | exhibit32.htm |
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C 20549
FORM 10-K
(Mark One)
[X]
ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2011
[ ]
TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from ____ to ____
Commission File No. 333-144226
ARTVENTIVE MEDICAL GROUP, INC.
(Exact name of registrant as specified in its charter)
Nevada
26-0148468
(State or other jurisdiction
(IRS Employer
of incorporation or organization)
Identification No.)
2766 Gateway Road, Carlsbad, California 92009
(Address of principal executive offices)
(760) 471-7700
(Registrant’s telephone number)
Securities registered pursuant to Section 12(b) of the Act:
None
Securities registered pursuant to section 12(g) of the Act:
None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. [ ] Yes [x] No
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. [x] Yes [ ] No
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [x] No [ ]
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
Yes
[X]
No
[ ]
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.
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
[ ]
Accelerated filer
[ ]
Non-accelerated filer
[ ]
Smaller reporting company
[ X ]
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [ ] No [x]
The aggregate market value of the voting and non-voting common equity held by non-affiliates (computed by reference to the price at which the common equity was last sold, as of the last business day of the registrant’s most recently completed second fiscal quarter) as of June 30, 2011, is $48,595,783.
State the number of shares outstanding of each of the issuer’s classes of common equity, as of the latest practicable date:
As of March 26, 2012, there were 49,248,286 shares of the Company’s common stock issued and outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
None.
Contents
ITEM 1. DESCRIPTION OF BUSINESS
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
CERTAIN RELATIONSHIP AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
PRINCIPAL ACCOUNTANT FEES AND SERVICES
EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
CAUTIONARY STATEMENTS REGARDING FORWARD-LOOKING INFORMATION
Except for historical information, this report contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934. Such forward-looking statements involve risks and uncertainties, including, among other things, statements regarding the Company’s business strategy, future revenues and anticipated costs and expenses. Such forward-looking statements include, among others, those statements including the words “expect,” “anticipate,” “intend,” “believe” and similar language. The Company’s actual results may differ significantly from those projected in the forward-looking statements. Factors that might cause or contribute to such differences include, but are not limited to, those discussed in the sections “Plan of Operation” and “Business”. You are cautioned not to place undue reliance on the forward-looking statements, which speak only as of the date of this report. We undertake no obligation to publicly release any revisions to the forward-looking statements or reflect events or circumstances taking place after the date of this document.
Although we believe that the expectations reflected in these forward-looking statements are based on reasonable assumptions, there are a number of risks and uncertainties that could cause actual results to differ materially from such forward-looking statements.
All references depicted in this Form 10-K to the “Company,” “ArtVentive,” “we,” “us” or “our” are to ArtVentive Medical Group, Inc.
ITEM 1. DESCRIPTION OF BUSINESS
General Information
ArtVentive Medical Group, Inc. (the “Company”) was incorporated on January 23, 2007, in the State of Nevada, as Big Bear Resources, Inc. Its name was changed to Uranium Plus Resource Corporation on March 21, 2008. It changed its name on January 26, 2010, to ArtVentive Medical Group, Inc. Its operations are primarily based in Carlsbad, California. The accounting and reporting policies of the Company conform to accounting principles generally accepted in the United States of America, and the Company’s fiscal year end is December 31.
ArtVentive Medical Group, Inc. (“AVTD” or the “Company”), is a Nevada Corporation listed on the OTC-BB (symbol AVTD). On March 21, 2008, the Company changed its name from Big Bear Resources Inc. to Uranium Plus Resource Corporation and subsequently, on January 26, 2010, the Company changed its name to ArtVentive Medical Group, Inc.
On January 9, 2010, the Company completed the acquisition of substantially all of the assets of ArtVentive Medical Inc., a California company.
The Company is concentrating on developing, manufacturing and marketing a family of Endoluminal Occlusion devices (EOS). The Company, through its proprietary technology has developed minimally invasive occlusion devices and procedures, bringing the current interventional, image guided techniques to a new level of sophistication, resolving potentially significant and unaddressed health issues. The EOS device is being developed by the Company to target market demand in several major clinical areas, including women's health, peripheral and neurological vascular disorders and interventional cardiology procedures.
The Company contracted, and expects to continue contracting with specific American and European corporations and consulting groups to assist in the implementation of an ongoing strategic plan for the successful international launch, market development, commercialization and manufacturing of the Company’s products during 2012. The Company entered into an agreement with the Chicago, Illinois based Medical Murray Inc., a leader in the field of medical device development and manufacturing. Medical Murray Inc. is recognized as being ISO certified and FDA registered.
Also, the Company has entered into an agreement with the Northwest Clinical Research Group, Inc. (NCRG), located in Seattle, Washington. NCRG has played an intricate role in building the complex infrastructure and support necessary for outlining regulatory and clinical strategy, in addition to providing a platform of quality controls parallel and synergistic to what Medical Murray is providing. Their responsibility also extends to encompass communication with the FDA and European Notified Body (FDA counterpart).
The Company continues to prepare the foundation to launch into the European markets during 2012. The Company executed an agreement on August 23, 2010, with the firm of BSI Product Services Healthcare, headquartered in the UK. BSI is one of the leading international ISO 9000 ISO 13485 Registrars and CE Marking Notified Bodies. Their current clients include world leading specialized medical device manufacturers, all of whom require efficient and effective CE marking services. BSI is internationally recognized for their conformity assessments which support manufacturers’ objectives of achieving timely and predictable market access.
The Company implemented its Quality Management System (QMS), based on the requirements of, and is intended to comply with, the following regulations and international standards:
·
US FDA Quality System Regulation, 21 CFR 820
·
EU Medical Device Directive (MDD), EEC 93/42
·
Canada Medical Devices Regulations (CMDR), SOR/98-282
·
ISO 13485:2003 Medical Devices – Quality Management Systems - Requirements Regulatory Purposes
Document Control System and Design History File for the EOS project are in continuous process of implementation. The highly secured system utilizes Egnyte software and is hosted on the Northwest Clinical Research Group’s server.
The Company is focused on the continued development and implementation of its proprietary line of lumen occlusion devices in defining new opportunities within the medical device arena. A third patent (Expandable Device Delivery System) of the Company’s intellectual property was filed with the US patent office October, 2010, simultaneous to an International Patent.
To date, the Company’s activities have been focused on its corporate operations, research and development, the finalization of EOS device design and testing, implementation of quality controls and protocols, regulatory strategy for FDA and European trials, in addition to animal studies. In December 2010, the Company formally froze the EOS device design for the peripheral category of indications in preparation for the regulatory phase and prior to commercialization in Europe, followed by the USA. The Company’s Regulatory, Clinical, Research, Development, and Scientific Advisory Board made decisive strides in completing the first Draft of the documentation required to achieve the CE Mark. The Company is now working on the comprehensive final document to complete the formal CE Mark application for commercialization within Europe and abroad.
The Company also continues its corporate and international development, and will be required to raise further equity and/or debt capital by way of executing the business strategy of the Corporation as indicated in both the Phases I and II Business Plans of the Company.
Administration
The Company is currently managed by Dr. Leon Rudakov, PhD, President, CTO and a member of the Board of directors, and H. James Graham, CFO, CEO and Chairman of the Board.
Compliance with Government Regulation
As the Company proceeds with its new programs involving medical devices and treatments, it will have to comply with governmental regulations involving such activities. The type and extent of such regulation will be determined in 2010.
Employees
The Company has no employees at this time, other than officers, as of the date of this report.
Research and Development Expenditures
The Company, since its inception, incurred $2.7 million of research and development expenditures in developing unique minimally invasive occlusion devices and procedures.
Subsidiaries
The Company currently has one wholly-owned subsidiary, ArtVentive Women’s Health Group, Inc. This subsidiary has been inactive other than patent filings and is slated to move forward later in 2012.
ITEM 1A
RISK FACTORS
Not Applicable.
ITEM 1B
UNRESOLVED STAFF COMMENTS.
Not Applicable.
ITEM 2
PROPERTIES
The Company’s corporate offices are located at 2766 Gateway Road, Carlsbad, California, 92009. The Company has no other properties.
ITEM 3
LEGAL PROCEEDINGS.
Legal Proceedings
In the ordinary course of business, the Company may, from time to time, become subject to routine litigation or administrative proceedings which are incidental to the business. The Company is not a party to or aware of any existing, pending or threatened lawsuits or other legal actions involving the Company.
ITEM 4
MINE SAFETY DISCLOSURES
Note applicable.
PART II
ITEM 5
MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.
Market Information
“Bid” and ”ask” prices for the Company’s common stock have been quoted on the Over-The-Counter Bulletin Board (the “OTCBB”) under the symbol “AVTD.OB” since April 3, 2008. However, the Company’s stock has only traded once. Following is the high and low price for each quarter during the past 2 years.
Quarter Ended | High | Low |
12/31/11 | $0.91 | $0.91 |
9/30/11 | $0.91 | $0.91 |
6/30/11 | $0.91 | $0.91 |
3/31/11 | $0.91 | $0.91 |
12/31/10 | $0.91 | $0.91 |
9/30/10 | $0.91 | $0.91 |
6/30/10 | $0.91 | $0.91 |
3/31/10 | $0.91 | $0.91 |
12/31/09 | $0.91 | $0.91 |
9/30/09 | $0.91 | $0.91 |
6/30/09 | $0.91 | $0.91 |
3/31/09 | $0.91 | $0.90 |
As of December 31, 2011, the Company had 35 shareholders of record.
Dividends
The Company has never declared any cash dividends with respect to its common stock. Future payment of dividends is within the discretion of the board of directors and will depend on the Company’s earnings, capital requirements, financial condition and other relevant factors. Although there are no material restrictions limiting, or that are likely to limit, the Company’s ability to pay dividends on its common stock, it presently intends to retain future earnings, if any, for use in its business and currently has no intention to offer cash dividends on its common stock.
Recent Sales of Unregistered Securities
During the fiscal year ended December 31, 2011, the Company issued a total of 2,416,670 shares of its common stock raising a total of $2,175,000. The Company sold these shares under exemptions available under Rule 506 of the Securities Act.
ITEM 6
SELECTED FINANCIAL DATA
Not applicable.
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
ArtVentive Medical Group, Inc. (“AVTD” or the “Company”), is a Nevada Corporation listed on the OTC-BB (symbol AVTD). On March 21, 2008, the Company changed its name from Big Bear Resources Inc. to Uranium Plus Resource Corporation and subsequently, on January 26, 2010 the Company changed its name to ArtVentive Medical Group, Inc.
Prior to January 26, 2010, the Company had focused on business development within the resource industry in Peru. On January 9, 2010, the Company completed the acquisition of all of the assets of ArtVentive Medical Inc., a California company.
The Company is focused on developing, manufacturing and marketing a family of Endoluminal Occlusion devices (EOS). The Company, through its proprietary technology has developed minimally invasive occlusion devices and procedures, bringing the current interventional, image guided techniques to a new level of sophistication, resolving potentially significant and unaddressed health issues. The ArtVentive EOS™ device is being developed by the Company to target the market demand in several major clinical areas, including, but not limited to, peripheral and neurological vascular disorders, interventional cardiology and women's health procedures.
The Company has contracted, and expects to continue contracting with specific American and European corporations and consulting groups to assist in the implementation of an ongoing strategic plan for the successful international launch, market development, commercialization and manufacturing of the Company’s products. The Company entered into an agreement with Chicago, Illinois based Medical Murray Inc., a leader in the field of medical device development and manufacturing. Medical Murray Inc. is recognized as being ISO certified and FDA registered.
Also the Company entered into an agreement with the Northwest Clinical Research Group, Inc. (NCRG), located in Seattle, Washington. NCRG has played an intricate role in building the complex infrastructure and support necessary for outlining the regulatory and clinical strategy, in addition to providing a platform of quality controls parallel and synergistic to what Medical Murray is providing. Their responsibility also extends to encompass communication with the FDA and the European Notified Body (FDA counterpart).
The Company implemented its Quality Management System (QMS), based on the requirements of, and is intended to comply with, the following regulations and international standards:
·
US FDA Quality System Regulation, 21 CFR 820
·
EU Medical Device Directive (MDD), EEC 93/42
·
Canada Medical Devices Regulations (CMDR), SOR/98-282
·
ISO 13485:2003 Medical Devices – Quality Management Systems - Requirements Regulatory Purposes
Document Control System and Design History File for the EOS project are in a continuous process of implementation. The highly secured system utilizes Egnyte software and is hosted on the Northwest Clinical Research Group’s server.
Following the successful completion of the ArtVentive Medical Group Inc. “Concept Design Phase” of the Endoluminal Occlusion System (EOS) in January 2011, the Company moved forward in executing the second Phase of its planned ArtVentive EOS™ development, “the Regulatory Phase.” This critical Phase required significant capital increases in research and development, prototyping, testing and documentation for meeting quality standards including, but not limited to, regulatory submissions in preparation for the Company’s projected timeline for commercialization in Europe. This Regulatory Phase is critical to the EOS device submission for European Regulatory approval (CE Mark) and subsequent commercialization. During this Phase of development, the Company manufactured in excess of seven hundred and fifty devices required to meet international standards and guidelines, bench testing, regulatory animal studies, clinical (First in Man) studies, and all other aspects necessary to confirm the device’s safety and high standard of production quality.
Following the conclusion of the Company’s successful animal studies, the management carried out its First in Man clinical study in Paraguay during June and July, 2011 using the ArtVentive EOS peripheral device. The study achieved 100% clinical and procedural success.
In preparation for the Company’s launch into the European markets, management participated in on-going meetings throughout Europe in preparation for all aspects of its European launch. To this end, the Company designed and constructed a corporate booth for industry shows and conferences in addition to generating marketing materials including targeted industry literature, brochures, educational and medical videos.
On August 3, 2011, the Company incorporated the ArtVentive Women’s Health Group, Inc., a wholly owned subsidiary of the Company.
Management participated in the EuroMedTech Conference in Turin, Italy and debuted the ArtVentive EOS™ peripheral device at the Cardiovascular and Interventional Radiological Conference (CIRSE) in Munich, Germany. In addition management continued its directive in preparing a solid foundation from which to launch into the European markets by working with clinics, physicians, international distributors and potential partners alike.
The Company’s Regulatory, Clinical, Research and Development, and Scientific Advisory Board made decisive strides in completing the first Draft of the documentation required to achieve the CE Mark. The Company is now working on the comprehensive final document to complete the formal CE Mark application for commercialization within Europe and abroad.
Limited Operating History
There is no historical financial information about the Company upon which to base an evaluation of its performance. The Company is a development stage corporation and has not generated any revenues from its business operations. The Company cannot guarantee that it will be successful in its business operations. The Company’s business is subject to risks inherent in the establishment of a new business enterprise, including limited capital resources and possible cost overruns due to price and cost increases in services and products.
The Company gives no assurance that future financing will be available on acceptable terms. If financing is not available on such terms, the Company may be unable to continue, develop or expand its operations. Additionally, equity financing could result in additional dilution to existing shareholders.
Liquidity and Capital Resources
As of the date of this report, the Company has yet to generate any revenues from its business operations. Since inception the Company’s main source of cash has been the sale of its equity securities.
As of December 31, 2011, cash and total assets were $101,193 and the Company’s total liabilities were $374,450. (See Note 6 of the Notes to Financial Statements included herewith.)
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
Not required by smaller reporting companies.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
ArtVentive Medical Group, Inc.
(A Development Stage Company)
Consolidated Financial Statements
For the Period from January 23, 2007 (Inception) to December 31, 2011
Consolidated Balance Sheets as of December 31, 2011 and December 31, 2010
Statement 1
Consolidated Statements of Operations and Comprehensive Loss for the years
ended December 31, 2011 and December 31, 2010;
and the period from inception (January 23, 2007) through December 31, 2011
Statement 2
Consolidated Statements of Cash Flows for the years ended December 31, 2011
and December 31, 2010;
and for the period from January 23, 2007 (Inception) to December 31, 2011
Statement 3
Consolidated Statement of Changes in Stockholders’ Equity (Deficit) for the period from
January 23, 2007 (Inception) to December 31, 2011
Statement 4
Notes to Consolidated Financial Statements
![[artventivemedicalgroupinc001.jpg]](artventivemedicalgroupinc001.jpg)
Statement 1
ArtVentive Medical Group, Inc.
(A Development Stage Company)
Consolidated Balance Sheets
December 31, 2011 and December 31, 2010
ASSETS | December 31 | December 31 |
| 2011 | 2010 |
CURRENT |
|
|
Cash and cash equivalents | $ 98,221 | $ 176,425 |
Prepaid expenses | 1,048 | 8,500 |
TOTAL CURRENT ASSETS | 99,269 | 184,925 |
|
|
|
PROPERTY, PLANT AND EQUIPMENT |
|
|
Office equipment | 1,382 | 1,382 |
Accumulated Depreciation | (506) | (230) |
NET PROPERTY, PLANT AND EQUIPMENT | 876 | 1,152 |
OTHER ASSETS |
|
|
Deposits | 1,048 | - |
TOTAL OTHER ASSETS | 1,048 | - |
|
|
|
TOTAL ASSETS | $ 101,193 | $ 186,077 |
|
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) |
|
|
CURRENT |
|
|
Accounts payable | $ 374,429 | $ 42,466 |
Payroll taxes payable | 21 | - |
TOTAL CURRENT LIABILITIES | 374,450 | 42,466 |
STOCKHOLDERS’ EQUITY (DEFICIT) |
|
|
Common stock, par value $.001, 100,000,000 shares |
|
|
authorized, 49,248,286 and 46,814,117 shares issued and outstanding at December 31, 2011 and December 31, 2010 respectively after giving effect to 1.65 for 1 split on February 12, 2010 |
49,249 |
46,814 |
Additional paid in capital | 3,565,403 | 1,377,089 |
Deficit accumulated during the development stage | (3,887,909) | (1,280,292) |
TOTAL STOCKHOLDERS’ EQUITY (DEFICIT) | (273,257) | 143,611 |
TOTAL LIABILITIES AND STOCKHOLDER’S EQUITY (DEFICIT) | $ 101,193 | $ 186,077 |
(See accompanying notes)
Statement 2
ArtVentive Medical Group, Inc.
(A Development Stage Company)
Consolidated Statements of Operations and Comprehensive Loss
For the Years Ended December 31, 2011 and December 31, 2010; and the Period from Inception (January 23, 2007) through December 31, 2011;
| For the year ended December 31, 2011 | For the year ended December 31, 2010 | For the period from January 23, 2007 (Inception) to December 31, 2011 |
REVENUES | $ NIL | $ NIL | $ NIL |
OPERATING EXPENSES |
|
|
|
Exploration costs | - | - | 45,533 |
Research and development | 2,035,098 | 704,294 | 2,739,392 |
Selling, general and administrative | 572,640 | 374,879 | 1,105,993 |
Depreciation expense | 276 | 230 | 1,022 |
OPERATING LOSS BEFORE OTHER ITEMS AND INCOME TAXES |
(2,608,014) |
(1,079,403) |
(3,891,940) |
OTHER INCOME |
|
|
|
Interest income | 397 | 3,634 | 4,031 |
Income Taxes | - | - | - |
NET LOSS AVAILABLE TO COMMON STOCKHOLDERS |
(2,607,617) |
(1,075,769) |
(3,887,909) |
COMPREHENSIVE LOSS FOR THE PERIOD | $ (2,607,617) | $ (1,075,769) | $ (3,887,909) |
BASIC AND DILUTED LOSS PER COMMON SHARE | (0.05) | (0.02) | |
WEIGHTED AVERAGE SHARES OUTSTANDING | 48,083,187 | 45,799,740 | |
Statement 3
ArtVentive Medical Group, Inc.
(A Development Stage Company)
Consolidated Statements of Cash Flows
For the Year Ended December 31, 2011 and December 31, 2010; and for the Period from January 23, 2007 (Inception) to December 31, 2011
| For the year ended December 31, 2011 | For the year ended December 31, 2010 | For the period from January 23, 2007 (Inception) to December 31, 2011 |
CASH FLOW FROM OPERATING ACTIVITIES |
|
|
|
Net loss | $ (2,607,617) | $ (1,075,769) | $ (3,887,909) |
ADJUSTMENTS TO RECONCILE NET LOSS TO NET CASH USED BY OPERATING ACTIVITIES |
|
|
|
Non-cash expenses |
|
| 60,805 |
Depreciation expense | 276 | 230 | 1,022 |
Issuance of common stock and options for services | 15,749 | 63,000 | 78,749 |
CHANGES IN OPERATING ASSETS AND LIABILITIES |
|
|
|
Prepaid expenses | 7,452 | (8,500) | (1,048) |
Deposits | (1,048) |
| (1,048) |
Accounts payable | 331,963 | 38,055 | 374,429 |
Payroll taxes payable | 21 | - | 21 |
Accounts payable – related party | - | - | 39,000 |
NET CASH USED BY OPERATING ACTIVITIES | (2,253,204) | (982,984) | (3,335,979) |
CASH FLOWS FROM INVESTING ACTIVITIES |
|
|
|
Disposal of equipment |
|
| 745 |
Purchase of equipment | - | (1,382) | (2,625) |
NET CASH USED BY INVESTING ACTIVITIES | - | (1,382) | (1,880) |
CASH FLOWS FROM FINANCING ACTIVITIES |
|
|
|
Issuance of common stock for cash | 2,175,000 | 1,100,000 | 3,286,080 |
Convertible note payable (see Note 5) |
|
| 150,000 |
NET CASH PROVIDED BY FINANCING ACTIVITIES | 2,175,000 | 1,100,000 | 3,436,080 |
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS |
(78,204) |
115,634 |
98,221 |
EFFECT OF EXCHANGE RATE CHANGES ON CASH |
- |
- |
- |
CASH, BEGINNING OF PERIOD | 176,425 | 60,791 | - |
CASH, END OF PERIOD | $ 98,221 | $ 176,425 | $ 98,221 |
NON-CASH INVESTING AND FINANCING ACTIVITIES
FORGIVENESS OF RELATED PARTY NOTE; APPLIED TO PAID IN CAPITAL | $ - | $ - | $ 39,000 |
STOCK ISSUED UPON CONVERSION OF NOTE PAYABLE | $ 150,000 | $ 150,000 | $ 150,000 |
Statement 4
ArtVentive Medical Group, Inc.
(A Development Stage Company)
Consolidated Statement of Stockholders’ Equity (Deficit)
From Inception, January 23 2007, to December 31, 2011
| Common | Share | Additional Paid in | Deficit Accumulated | Accumulated Other Stockholders’ | Total Equity |
| Shares | Amount | For period | During Period | Income | (Deficit) |
BALANCE, JANUARY 23, 2007 | - | $ - | $ - | $ - | $ - | $ - |
Common shares issued for cash, assets and expenses at $.001 per share | 21,430,200 | 21,430 | (5,350) | - | - | 16,080 |
Capital contribution of Expenses | 47,184 | - | - | 47,184 | ||
Loss during the period from Inception to | ||||||
December 31, 2007 | - | (91,391) | - | (91,391) | ||
Foreign currency translation adjustments | - | - | 455 | 455 | ||
BALANCE, DECEMBER 31, 2007 | 21,430,200 | 21,430 | 41,834 | (91,391) | 455 | (27,672) |
Capital Contribution of Expenses | - | - | 47,639 | - | - | 47,639 |
Loss during the year (2008) | - | - | - | (84,877) | - | (84,877) |
Foreign currency translation adjustments | - | - | - | - | (75) | (75) |
BALANCE, DECEMBER 31, 2008 | 21,430,200 | 21,430 | 89,473 | (176,268) | 380 | (64,985) |
Foreign currency translation adjustments |
|
|
|
| (380) | (380) |
Loss during year (2009) |
|
|
| (28,255) | (28,255) | |
BALANCE DECEMBER 31, 2009 | 21,430,200 | 21,430 | 89,473 | (204,523) | - | (93,620) |
Common shares issued for cash, assets and expenses at $.001 per share | 21,430,200 | 21,430 | (21,430) | - | - | - |
Common shares issued in private placement | 3,767,051 | 3,767 | 1,096,233 | 1,100,000 | ||
Common shares issued for services | 20,000 | 20 | 17,980 | 18,000 | ||
Common shares issued on conversion of note payable | 166,666 | 167 | 149,833 | 150,000 | ||
Stock options issued for services | 45,000 | - | - | 45,000 | ||
Loss during year (2010) | (1,075,769) | (1,075,769) | ||||
BALANCE, DECEMBER 31, 2010 | 46,814,117 | 46,814 | 1,377,089 | (1,280,292) | - | 143,611 |
Common shares issued in private placement | 2,416,670 | 2,417 | 2,172,583 | 2,175,000 | ||
Common shares issued for services | 17,499 | 18 | 15,731 | 15,749 | ||
Loss during year (2011) | (2,607,617) | (2,607,617) | ||||
BALANCE, DECEMBER 31, 2011 | 49,248,286 | $ 49,249 | $ 3,565,403 | $ (3,887,909) | $ - | $ (273,257) |
|
|
|
|
|
|
|
(See accompanying notes)
ArtVentive Medical Group, Inc.
(A Development Stage Company)
Notes to Consolidated Financial Statements
For the Year Ended December 31, 2011
1.
BASIS OF FINANCIAL STATEMENT PRESENTATION
The accompanying audited financial statements have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission.
The information furnished in the financial statements includes normal recurring adjustments and reflects all adjustments which in the opinion of management are necessary for a fair presentation of such financial statements.
2.
ORGANIZATION
Uranium Plus Resource Corporation (the “Company”) was incorporated on January 23, 2007 in the State of Nevada, U.S.A., as Big Bear Resources, Inc. Its name was changed to Uranium Plus Resource Corporation on March 21, 2008. Following the acquisition of the business of ArtVentive, Inc. the Company changed its name on January 26, 2010, from Uranium Plus Resources, Inc. to ArtVentive Medical Group, Inc. The accounting and reporting policies of the Company conform to accounting principles generally accepted in the United States of America, and the Company’s fiscal year end is December 31.
The Company is a medical device corporation, focused on developing, manufacturing and marketing a family of Endoluminal Occlusion Devices (EOS). Through its innovative, proprietary technology the Company has developed unique minimally invasive occlusion devices and procedures, bringing the current interventional, image guided techniques to a new level of sophistication, potentially resolving significant and unaddressed health issues. The EOS device being developed by the Company targets a substantive market demand in several major clinical areas, including women's health, peripheral and neurological vascular disorders, and interventional cardiology procedures.
To date, the Company’s activities have been limited to its formation, research and development of the ArtVentive EOSTM, generation of regulatory strategy for initial clinical indications for FDA and European submissions and approval, corporate operations and the raising of equity capital. The Company conducted the required human clinical studies during 2011 achieving 100% clinical and procedural success, validating the safety and efficiency of the ArtVentive EOSTM device.
On August 3, 2011, the Company incorporated ArtVentive Women’s Health Group, Inc., a wholly owned subsidiary of the Company.
3.
SIGNIFICANT ACCOUNTING POLICIES
PRINCIPLES OF CONSOLIDATION
The consolidated financial statements include the transactions of the Company and its subsidiary.
All inter-company accounts and transactions have been eliminated in consolidation.
ArtVentive Medical Group, Inc.
(A Development Stage Company)
Notes to Consolidated Financial Statements
For the Year Ended December 31, 2011
DEVELOPMENT STAGE COMPANY
The Company is considered to be in the development state as defined in FASC 915-10-05, “Development Stage Entity”. The company is devoting substantially all of its efforts to the execution of its business plan.
USE OF ESTIMATES
The preparation of the Company’s financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Such estimates include deferred tax assets arising as a result of the operating loss carry forwards. Actual results could differ from those estimates. The Company’s periodic filings with the Securities and Exchange Commission include, where applicable, disclosures of estimates, assumptions, uncertainties and markets that could affect the financial statements and future operations of the Company.
COMMON STOCK ISSUED FOR OTHER THAN CASH
Services purchased and other transactions settled in the Company’s common stock and stock options are recorded at the estimated fair value of the stock issued and options granted if that value is more readily determinable than the fair value of the consideration received.
EARNINGS PER SHARE OF COMMON STOCK
The following table sets forth the computation of earnings per share:
December 31, 2011 December 31, 2010
Net income (loss) $ (2,607,617) $ (1,075,769)
Weighted average common shares outstanding 48,083,187 45,799,740
Net (loss) per share $ (0.05) $ (0.02)
PROPERTY AND EQUIPMENT
The company records property and equipment at cost and uses straight-line depreciation methods.
| Estimated Useful Lives | December 31, 2011 | December 31, 2010 |
Computer equipment | 5 years | $ 1,382 | $ 1,382 |
Less accumulated depreciation |
| (506) | (230) |
|
|
|
|
Net property and equipment |
| $ 876 | $ 1,152 |
ArtVentive Medical Group, Inc.
(A Development Stage Company)
Notes to Consolidated Financial Statements
For the Year Ended December 31, 2011
FOREIGN CURRENCY TRANSLATIONS
The Company’s functional and reporting currency is the US dollar. All transactions initiated in other currencies are translated into US dollars using the exchange rate prevailing on the date of transaction. Monetary assets and liabilities denominated in foreign currencies are translated into the US dollar at the rate of exchange in effect at the balance sheet date. Unrealized exchange gains and losses arising from such transactions are deferred until realization and are included as a separate component of stockholders’ equity (deficit) as a component of other comprehensive income or loss. Upon realization, the amount deferred is recognized in income in the period when it is realized.
The Company recorded an unrealized foreign currency translation gain (loss), netting $0 for the period from January 23, 2007 (Inception) to December 31, 2011, in accumulated other comprehensive income.
CASH AND CASH EQUIVALENTS
Cash and cash equivalents consist principally of funds on hand, on deposit with banks and liquid investment funds having maturity of three months or less at the time of the purchase. The Company has no cash equivalents. The Company had funds on deposit of $98,221 as at December 31, 2011.
4.
CONVERTIBLE NOTE PAYABLE
The Company borrowed $150,000 pursuant to an agreement dated April 29, 2008. The loan was payable on demand by the Lender. The Lender had the option to convert the loan into common shares of the Company at a rate of 1 common share for each $1 borrowed (150,000 common shares).
The note was converted into 166,666 shares at a deemed value per share of $.90 effective February 22, 2010.
5.
SHARE CAPITAL
Effective April 22, 2008, the Company forward-split its issued common stock on a ratio of 5.8 shares for each one old share. As a result of this transaction, 11,078,000 shares were issued. Effective February 12, 2010, the Company forward-split its issued common stock on a ratio of 1.65 shares for each one prior share. As a result of this transaction, 8,442,200 shares were issued. Effective February 19, 2010 3,767,051 shares were issued in a private placement. Consideration for the issue of additional shares has been charged against additional paid in capital. The forward stock splits adjustments have been applied retroactively.
Effective April 16, 2010 the Board of Directors of the Company authorized issuance of 20,000 shares to the members of its Scientific Board at a deemed value per share of $.90.
Effective November 2, 2010 the Board of Directors of the Company granted 50,000 non-statutory stock options to a former consultant at an exercise price of $.001 per share with the vesting date of November 2, 2013 and an expiration date of November 2, 2016.
Effective June 2, 2011 and December 30, 2011 the Board of Directors of the Company authorized issuance of 3,888 and 13,611 shares to the former consultants at a deemed value per share of $.90.
ArtVentive Medical Group, Inc.
(A Development Stage Company)
Notes to Consolidated Financial Statements
For the Year Ended December 31, 2011
During the period that the options were issued, the Company had no public trading activity for the Company’s common stock. However , the majority shareholder sold in private transactions shares at $.90 per share. In order to value the Company’s options, the Company chose to use the minimum value method, even though the Company is a public company since there was no measurable trading activity.
6.
GOING CONCERN AND LIQUIDITY CONSIDERATIONS
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates, among other things, the realization of assets and satisfaction of liabilities in the normal course of business. As of December 31, 2011, the Company has a negative working capital balance of $275,181 and an accumulated deficit of $3,887,909. The Company intends to fund operations through equity financing arrangements, which may be insufficient to fund its capital expenditures, working capital and other cash requirements for the next twelve months.
The ability of the Company to emerge from the development stage is dependent upon, among other things, obtaining additional financing to continue operations, research, development and production of its product.
In response to these challenges, management intends to raise additional funds through public or private placement offerings.
These factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern. The accompanying financial statements do not include any adjustments that might result from the outcome of this uncertainty.
7. RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
In June 2009, the FASB established the Accounting Standards Codification (“Codification” or “ASC”) as the source of authoritative accounting principles recognized by the FASB to be applied by nongovernmental entities in the preparation of financial statements in accordance with generally accepted accounting principles in the United States (“GAAP”). Rules and interpretive releases of the Securities and Exchange Commission (“SEC”) issued under authority of federal securities laws are also sources of GAAP for SEC registrants. Existing GAAP was not intended to be changed as a result of the Codification, and accordingly the change did not impact our financial statements. The ASC does change the way the guidance is organized and presented.
Statement of Financial Accounting Standards (“SFAS”) SFAS No. 166 (ASC Topic 810), “Accounting for Transfers of Financial Assets—an Amendment of FASB Statement No. 140”, SFAS No. 167 (ASC Topic 810), “Amendments to FASB Interpretation No. 46(R)”, and SFAS No. 168 (ASC Topic 105), “The FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles—a replacement of FASB Statement No. 162” were recently issued. SFAS No. 166, 167, and 168 have no current applicability to the Company or their effect on the financial statements would not have been significant.
Accounting Standards Update (“ASU”) ASU No. 2009-05 (ASC Topic 820), which amends Fair Value Measurements and Disclosures – Overall, ASU No. 2009-13 (ASC Topic 605), Multiple-
ArtVentive Medical Group, Inc.
(A Development Stage Company)
Notes to Consolidated Financial Statements
For the Year Ended December 31, 2011
Deliverable Revenue Arrangements, ASU No. 2009-14 (ASC Topic 985), Certain Revenue Arrangements that include Software Elements, and various other ASU’s No. 2009-2 through ASU No. 2011-12 which contain technical corrections to existing guidance or affect guidance to specialized industries or entities were recently issued. These updates have no current applicability to the Company or their effect on the financial statements would not have been significant.
8.
PROVISION FOR INCOME TAXES
The Company recognizes the tax effects of transactions in the year in which such transactions enter into the determination of net income, regardless of when reported for tax purposes. Deferred taxes are provided in the financial statements under ASC Topic 740 to give effect to the resulting temporary differences which may arise from differences in the bases of fixed assets, depreciation methods, allowances, and start-up costs based on the income taxes expected to be payable in future years. Exploration and development stage deferred tax assets arising as a result of net operating loss carryforwards have been offset completely by a valuation allowance due to the uncertainty of their utilization in future periods. Tax operating loss carryforwards generated during the period from January 23, 2007 (date of inception) through December 31, 2011 of approximately $3,809,155 will begin to expire in 2027. Accordingly, deferred tax assets of approximately $1,485,571 (2010 – $503,408) related to net operating loss carry-forwards and $30,712 related to stock-based compensation were offset by the valuation allowance in the same amount.
The Company adopted the provisions of FASB Interpretation No. 48 Accounting for Uncertainty in Income Taxes, on January 1, 2007. As a result of the implementation of Interpretation 48, the Company recognized no increase in the liability for unrecognized tax benefits.
The Company has no tax positions at December 31, 2011 and 2010 for which the ultimate deductibility is highly certain but for which there is uncertainty about the timing of such deductibility.
The Company recognizes interest accrued related to unrecognized tax benefits in interest expense and penalties in operating expenses. The Company had no accruals for interest and penalties since inception.
Components of income tax benefits are as follows:
|
| Years Ended December 31, | ||
|
| 2011 |
| 2010 |
Current |
| $ - |
| $ - |
Federal |
| - |
| - |
State |
| - |
| - |
|
| - |
| - |
Deferred |
| - |
| - |
|
| $ - |
| $ - |
ArtVentive Medical Group, Inc.
(A Development Stage Company)
Notes to Consolidated Financial Statements
For the Year Ended December 31, 2011
A reconciliation of the provision for income tax expense with the expected income tax computed by applying the federal statutory income tax to income before provision for income taxes is as follows:
| Years Ended December 31 | |||
| 2011 |
| 2010 | |
Income tax (benefit) computed at |
|
|
| |
Federal statutory tax rate of 34% | $ (886,590) |
| $ (365,761) | |
Change in valuation allowance | 1,016,971 |
| 460,859 | |
State taxes (net of federal benefit) | (130,381) |
| (95,098) | |
| $ - |
| $ - | |
9.
PURCHASE AGREEMENT
On January 8, 2010, the Company entered into an asset purchase agreement with Artventive, Inc. a privately held company. The Company purchased substantially all of the assets of Artventive, Inc. which consisted entirely of patents. The patents were accounted for under SAB Topic 5G using the historical cost basis of zero. The combination was accounted for under ASC 805 as a business combination. Pro Forma financial information as if the combination had taken place as of the earliest period presented has not been included as it is not significant.
10. SUBSEQUENT EVENTS
The Company evaluated all events or transactions that occurred after December 31, 2011, up through the date these consolidated financial statements were issued and determined there were no items that required disclosure.
ITEM 9.
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None
Evaluation of Our Disclosure Controls and Internal Controls
Under the supervision and with the participation of senior management, including the Company’s CEO and CFO, Jim Graham, the management conducted an evaluation of the effectiveness of the design and operation of the Company’s disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as of the end of the period covered by this annual report (the “Evaluation Date”). Based on this evaluation, the CEO and CFO concluded as of the Evaluation Date that the disclosure controls and procedures were not effective such that the information relating to the Company including its consolidated subsidiaries, required to be disclosed in its Securities and Exchange Commission (“SEC”) reports (i) is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, and (ii) is accumulated and communicated to management, including the CEO and CFO, as appropriate to allow timely decisions regarding required disclosure.
Management’s Annual Report on Internal Control over Financial Reporting
The management of the Company is responsible for establishing and maintaining adequate internal control over financial reporting. The internal control process has been designed, under management’s supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the Company’s financial statements for external reporting purposes in accordance with accounting principles generally accepted in the United States of America.
Management conducted an assessment of the effectiveness of the Company’s internal control over financial reporting as of December 31, 2011, including (i) the control environment, (ii) risk assessment, (iii) control activities, (iv) information and communication, and (v) monitoring. Based on this assessment, management has determined that the Company’s internal control over financial reporting as of December 31, 2011 was not effective.
The Company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Therefore, even those systems determined to be effective can provide only reasonable assurance of achieving their control objectives. In evaluating the effectiveness of the Company’s internal control over financial reporting, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in Internal Control – Integrated Framework.
This annual report does not include an attestation report of the Company’s registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by its registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit the Company to provide only management’s report in this annual report.
Officers’ Certifications
Appearing as exhibits to this Annual Report are “Certifications” of the Company’s Chief Executive Officer and Chief Financial Officer. The Certifications are required pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (the “Section 302 Certifications”). This section of the Annual Report contains information concerning the Controls Evaluation referred to in the Section 302 Certification. This information should be read in conjunction with the Section 302 Certifications for a more complete understanding of the topics presented.
Changes in Internal Control over Financial Reporting
There have been no changes in the Company’s internal control over financial reporting that occurred during the quarter ended December 31, 2011 that have materially affected or are reasonably likely to materially affect the internal control over financial reporting.
ITEM 9B. OTHER INFORMATION.
None.
PART II
ITEM 10
DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE
Executive Officers, Directors and Key Employees
Directors serve until the next annual meeting of the stockholders; until their successors are elected or appointed and qualified, or until their prior resignation or removal. Officers serve for such terms as determined by the board of directors. Each officer holds office until such officer’s successor is elected or appointed and qualified or until such officer’s earlier resignation or removal.
The following table sets forth certain information, as of December 31, 2011, with respect to the directors and executive officers.
Name | Positions Held | Age |
|
|
|
H. James Graham | CEO, CFO, Chairman | 62 |
Leon Rudakov | President, CTO, Director | 60 |
Mr. Graham has held the positions of CEO and director since April 28, 2008. He resigned as CEO on February 11, 2010, but agreed to continue on as President and Chairman of the Board. Dr. Rudakov was appointed as CEO and CTO, and as a member of the Board of Directors on February 11, 2010. On February 11, 2011, Mr. Graham and Dr. Rudakov resigned from their respective positions as President, CEO and CFO. On February 11, 2011, Mr. Graham was appointed CEO and CFO, and Dr. Rudakov was appointed President.
Certain biographical information of our directors and officers is set forth below.
H. James Graham has acted as President and CEO of a number of successful corporations including start-up companies. Since 2006, Mr. Graham has also developed global business and marketing strategies in addition to drafting and negotiating international management and distribution agreements. In 2000, Mr. Graham co-founded CyberBroadcastOne Inc., an interactive broadcast company based on the foundation of education, entertainment and commerce. Mr. Graham served as the President and CEO through 2006. From 1993 to 2007, he served as a member of the Board of Directors of Kodiak Oil and Gas, an emerging oil and gas company with its head office in Denver, Colorado and operations throughout America. The Company’s shares trade on the New York Stock Exchange under the symbol KOG. In 1998, Mr. Graham co-founded Pyrotech International Ltd., Singapore, a corporation committed to the development of a revolutionary fire fighting gel recognized globally under the brand name Barricade. Mr. Graham served as CEO from 1998 to 2000.
Previously, Mr. Graham co-founded and was the President of Tri-Pacific Resources Corporation, Hong Kong, a technology based corporation specializing in onboard power supply and energy management systems. He also served as President of Hunter Douglas Canada, Inc., the world’s largest vertically integrated supplier of aluminum and home fashions products to the international market. Hunter Douglas acquired the HJ Graham Company Ltd. in 1989 which was previously founded and headed by Mr. Graham until the acquisition. Mr. Graham also served on the Board of Directors of Bradbury International, Ltd., a diversified Canadian financial investment corporation, which traded on the Vancouver Stock Exchange.
Dr. Leon Rudakov has more than 25 years experience in R&D, engineering, product development and project management. He holds a Ph.D. in mechanical engineering from the Moscow Institute of Aviation, and completed Business Executive Program at the Fuqua Business School of the Duke University, NC. He held several executive management and R&D positions with international corporations and start-up companies.
In 2003 Dr. Rudakov joined Merlin Medical, a Singapore-based company, where he held the position of vice-president of Research and Development and chief technology officer. He was responsible for the company's business strategy, and directed its product development and regulatory pathway. Under his leadership the Company developed a new, unique intracranial device for the treatment of intracranial aneurysms with significant potential for the treatment of ischemic disease. He also established the Company intellectual property and led the device development from the initial concept formulation to its production and the clinical studies in several European Union countries. Dr. Rudakov also developed the coronary stent "X'Calibur" and its delivery catheter through to its CE Mark approval and current market presence in Asia.
Dr. Rudakov also served as a Director of Engineering with the Silicon Valley corporation CardioVasc Inc., and led a cross functional group of engineers through the production of several coronary devices, from development to commercial success. Among these CardioVasc projects, Dr. Rudakov led the development of a new coronary stent and delivery system, which was subsequently sold to the Japanese corporation "Goodman Co". He also participated in the device regulatory process leading to its approval in Japan.
Additionally, Dr Rudakov, managed development of a coated stent-graft, for the treatment of failing saphenous vein graft (SVG). This device has received CE Mark and is marketed and sold in the EU by the CardioVasc Corporation.
Dr. Rudakov has served as a Regional Director of Operations for Booz Allen & Hamilton, a worldwide leader in management consulting. He managed the company's operations and regional business development, while working with key corporate clients, providing strategic business planning, corporate restructuring and re-engineering.
In 2009, Dr. Rudakov joined ArtVentive, Inc., of San Marcos, California, as Chief Executive Officer and Chief Technology Officer.
Term of Office
Company directors are elected for one-year terms, to hold office until the next annual general meeting of the shareholders, or until removed from office in accordance with the bylaws of the Company. Officers are appointed by the board of directors and hold office until removed by the board.
Significant Employees
The Company has no significant employees other than the officers and directors described above.
Employment Agreement
On February 2, 2010, the Company entered into an Employment Agreement with its then Chief Executive Officer and Chief Technology Officer, Dr. Leon Rudakov. The Employment Agreement was subsequently updated on March 10, 2011, to reflect Dr. Rudakov’s current positions as Chief Technology Officer and President. Under the terms of the Agreement, Dr. Rudakov will be compensated with an annual salary of $120,000, plus benefits, including options to purchase stock in the Company, the terms of which are to be negotiated, but the share price will be the trading price at the time of issuance or the net book value. Any options granted will expire five years after the date of the grant. In February, 2011, the Employment Agreements were updated to increase the annual salaries of both Dr. Rudakov and Mr. Graham to $170,000 and $180,000, respectively, plus benefits, including options to purchase stock in the company as described above. The term of the Employment Agreement will be for a period of five years, unless earlier terminated under the terms of the Employment Agreement.
On April 1, 2010, the Company entered into a Consulting Agreement with its then President and Chairman of the Board, H. James Graham. Under the terms of the Agreement, Mr. Graham is compensated with annual salary of $100,000, plus benefits. The term of the Employment Agreement will be for a period five years, unless earlier terminated under the terms of the Employment Agreement, effective April 1, 2010. The Consulting Agreement was subsequently updated on March 10, 2011 to reflect Mr. Graham’s current positions of Chief Executive Officer, Chief Financial Officer and the Chairman of the Board of Directors.
Audit Committee
The Company does not currently have a standing audit committee, an audit committee financial expert, or any committee or person performing a similar function. The Corporation has limited working capital and no revenues. Management does not believe that it would be in the best interest of the Company, at this time to retain independent directors to sit on an audit committee. When appropriate, the Company will retain independent directors and form an audit, compensation committee in addition to other pertinent committees.
Board of Directors
The Company does not have an independent director at this time. Directors are reimbursed for expenses, if any, for attendance at meetings of the Board of Directors. The Board of Directors may designate from among its members an executive committee and one or more other committees but has not done so to date. The Company does not have a nominating committee or a nominating committee charter. Further, the Company does not have a policy with regard to the consideration of any director candidates recommended by security holders. To date this has not been a problem as no security holders have made any such recommendations. Directors perform all functions that would otherwise be performed by committees. Given the present size of the board it is not practical for the Company to have such committees. The Company plans to expand the Board of Directors at the first opportunity.
Compliance with Section 16(a) of the Exchange Act
The Company’s common stock is not registered pursuant to Section 12 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Accordingly, officers, directors and principal shareholders are not subject to the beneficial ownership reporting requirements of Section 16(a) of the Exchange Act.
Code of Ethics
As of December 31, 2011, the Company has not yet adopted a Code of Ethics.
ITEM 11
EXECUTIVE COMPENSATION
The following summary compensation table indicates the compensation earned during the years ended December 31, 2011 and 2010 by each person who served as a principal executive officer or principal financial officer.
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Name and Principal Position | Year | Salary ($) | Bonus ($) | Stock Awards ($) | Option Awards ($) | NonEquity Incentive Plan Compensation ($) | Nonqualified Deferred Compensation Earnings ($) | All Other Compensation (4) | Total |
Leon Rudakov(1) | 2011 2010 | $165,833 $110,000 | 0 0 | 0 0 | 0 0 | 0 0 | 0 0 | 0 0 | $165,833 $110,000 |
H. James Graham(2) | 2011 2010 | $173,333 $ 90,000 | 0 0 | 0 0 | 0 0 | 0 0 | 0 0 | 0 0 | $173,333 $ 90,000 |
(1)
Leon Rudakov has served as President and as Chief Technology Officer since February 2, 2011. Dr. Rudakov previously served as CEO from February 11, 2010, until February 2, 2011.
(2)
H. James Graham has served as CFO since July 19, 2010. Mr. Graham has served as CEO since February 2, 2011. Mr. Graham previously served as CEO from April 29, 2008 until February 11, 2010.
(b)
There are no annuity, pension or retirement benefits proposed to be paid to officers, directors, or employees of the corporation in the event of retirement at normal retirement date pursuant to any presently existing plan provided or contributed to by the corporation or any of its subsidiaries.
Director Compensation
Members of the Company’s Board of Directors do not receive compensation, as such, at this time, but are paid consulting fees for specific services as incurred.
Stock Option Grants
As of the date of this Report, the Company has granted 50,000 stock options to consultants for services rendered.
Indemnification
Under the bylaws of the Company, it may indemnify an officer or director who is made a party to any proceeding, including a lawsuit, because of his position, if he acted in good faith and in a manner he reasonably believed to be in the Company’s best interest. The Company may advance expenses incurred in defending a proceeding. To the extent that the officer or director is successful on the merits in a proceeding as to which he is to be indemnified, we must indemnify him against all expenses incurred, including attorney’s fees. With respect to a derivative action, indemnity may be made only for expenses actually and reasonably incurred in defending the proceeding, and if the officer or director is judged liable, only by a court order. The indemnification is intended to be to the fullest extent permitted by the laws of the State of Nevada.
Regarding indemnification for liabilities arising under the Securities Act, which may be permitted to directors or officers under Nevada law, the Company is informed that, in the opinion of the Securities and Exchange Commission, indemnification is against public policy, as expressed in the Act and is, therefore, unenforceable.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information with respect to the beneficial ownership of our common stock known by us as of March 26, 2012, by:
·
each person or entity known by us to be the beneficial owner of more than 5% of our common stock;
·
each of our directors;
·
each of our executive officers; and
·
all of our directors and executive officers as a group.
The percentages in the table have been calculated on the basis of treating as outstanding for a particular person, all shares of our common stock outstanding on such date and all shares of our common stock issuable to such holder in the event of exercise of outstanding options, warrants, rights or conversion privileges owned by such person at said date which are exercisable within 60 days of February 2, 2012. Except as otherwise indicated, the persons listed below have sole voting and investment power with respect to all shares of our common stock owned by them, except to the extent such power may be shared with a spouse.
Name and Address of Beneficial Owner | Title of Class (1) | Shares of Common Stock Beneficially Owned(1) | Percentage Ownership(2) |
MLPRP Enterprises, LLC 17624 15th Ave. SE Suite 112 Mill Creek, WA 98012 | Common | 3,583,718 | 7.3% |
The Estate of Scott Houghton 1525 Yew Street Vancouver, BC V6J 3E5 Canada | Common | 11,220,000 | 22.9% |
Korina Houghton 401 – 958 W. 8th Ave. Vancouver, BC V5Z 1E5 Canada | Common | 5,610,000 | 11.4% |
Philippe Gailloud c/o Parsons/Burnett/Bjordahl/Hume, LLP 10900 NE 4th Street Suite 1850 Bellevue, WA 98004 | Common | 8,515,000 | 17.4% |
Indian Creek International, SA c/o Parsons/Burnett/Bjordahl/Hume, LLP 10900 NE 4th Street, Suite 1850 Bellevue, WA 98004 | Common | 4,400,000 | 9.0% |
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Leon Rudakov, President, CTO, Director | Common | 8,515,000 | 17.4% |
H. James Graham, CFO, CEO, Chairman | Common | 0 | 0% |
All officers and directors as a group (2 persons) |
| 8,515,000 | 17.4% |
(1)
As used herein, the term beneficial ownership with respect to a security is defined by Rule 13d-3 under the Securities Exchange Act of 1934 as consisting of sole or shared voting power (including the power to vote or direct the vote) and/or sole or shared investment power (including the power to dispose or direct the disposition of) with respect to the security through any contract, arrangement, understanding, relationship or otherwise, including a right to acquire such power(s) during the next 60 days.
(2)
Percentage based upon 46,814,117 shares of common stock issued and outstanding as of February 2, 2011.
ITEM 13
CERTAIN RELATIONSHIP AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
Other than as set forth in this section, none of the following parties has, since the date of incorporation, any material interest, direct or indirect, in any transaction with the Company or in any presently proposed transaction that has or will materially affect the Company:
* Director or Officer;
* Any person proposed as a nominee for election as a director;
* Any person who beneficially owns, directly or indirectly, shares carrying more than 10% of the voting rights attached to our outstanding shares of common stock;
* Any promoters;
* Any relative or spouse of any of the foregoing persons who has the same house as such person.
ITEM 14
PRINCIPAL ACCOUNTANT FEES AND SERVICES
Audit Fees
The aggregate fees billed to the Company by its principal accountant for services rendered during the fiscal year ended December 31, 2011 and 2010 is set forth in the table below:
Fee Category |
| Fiscal year ended December 31, 2011 |
| Fiscal year ended December 31, 2010 |
|
|
|
|
|
Audit fees (1) |
| $16,040 |
| $12,500 |
Audit-related fees (2) |
| 0 |
| 0 |
Tax fees (3) |
| 0 |
| 0 |
All other fees (4) |
| 0 |
| 0 |
Total fees |
| $16,040 |
| $12,500 |
(1) Audit fees consist of fees incurred for professional services rendered for the audit of our financial statements, for reviews of the interim financial statements included in the Company’s quarterly reports on Form 10-Q and for services that are normally provided in connection with statutory or regulatory filings or engagements.
(2) Audit-related fees consist of fees billed for professional services that are reasonably related to the performance of the audit or review of the Company’s consolidated financial statements, but are not reported under “Audit fees.”
(3) Tax fees consist of fees billed for professional services relating to tax compliance, tax planning, and tax advice.
(4) All other fees consist of fees billed for all other services.
Audit Committee’s Pre-Approval Practice
The Company does not have an audit committee at this time. The board of directors currently performs the function of an audit committee. Section 10A (i) of the Securities Exchange Act of 1934, as amended, prohibits the Company’s auditors from performing audit services for the Company as well as any services not considered to be audit services unless such services are pre-approved by the audit committee or, in cases where no such committee exists, by the board of directors (in lieu of an audit committee) or unless the services meet certain de minimis standards.
PART IV
ITEM 15
EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
Exhibits
The following exhibits are included as part of this report:
Exhibit No. |
| Description |
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3.1 |
| Articles of Incorporation of Registrant (1) |
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3.2 |
| By-Laws of Registrant (1) |
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3.3 |
| Certificate of Amendment to Articles of Incorporation |
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3.3 |
| Amendment to Bylaws(1) |
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31.1 |
| Rule 13(a)-14(a)/15(d)-14(a) Certification of Principal Financial Officer |
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31.2 |
| Rule 13(a)-14(a)/15(d)-14(a) Certification of Principal Executive Officer |
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32.1 |
| Rule 1350 Certification of Principal Financial Officer |
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32.2 |
| Rule 1350 Certification of Chief Executive Officer |
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101.INS(2) |
| XBRL Instance Document |
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101.SCH(2) |
| XBRL Taxonomy Schema Document |
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101.CAL(2) |
| XBRL Taxonomy Calculation Linkbase |
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101.DEF(2) |
| XBRL Taxonomy Definition Linkbase Document |
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101.LAB(2) |
| XBRL Taxonomy Label Linkbase Document |
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101.PRE(2) |
| XBRL Taxonomy Presentation Linkbase Document |
(1)
Filed with the Securities and Exchange Commission on June 29, 2007, as an exhibit, numbered as indicated above, to the Registrant’s registration statement on the Registrant’s Registration Statement on Form SB-2 (file no. 333-144226), which exhibit is incorporated herein by reference.
(2)
XBRL Information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended and otherwise is not subject to liability under these sections.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
ARTVENTIVE MEDICAL GROUP, INC.
March 26, 2012
/s/ Leon Rudakov
Dr. Leon Rudakov
President, CTO
/s/ H. James Graham
H. James Graham
CEO, CFO
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
/s/ Leon Rudakov
Date: March 26, 2012
Dr. Leon Rudakov, Director
/s/ H. James Graham
Date: March 26, 2012
H. James Graham, Chairman