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UNITED
STATES SECURITIES AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant to Section 13 or 15(d)
of
The Securities and Exchange Act of
1934
Date of Report (date of earliest
event reported): January 15, 2010
AMBICOM
HOLDINGS, INC.
(Exact
name of registrant as specified in its charter)
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Nevada
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333-153402
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26-2964607
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(State or other
jurisdiction of
incorporation)
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(Commission File
Number)
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(IRS Employer Identification
No.)
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405
River Oaks Parkway
San
Jose, California
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95134-1916
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(Address
of principal executive offices)
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(Zip
Code)
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Registrant’s
telephone number, including area code: (408)
321-0822
112 North Curry
Street, Carson City, Nevada 89703 (775)
333-1182
(Former
name or former address, if changed since last report)
Copies
to:
Peter
Campitiello, Esq.
Tarter
Krinsky & Drogin LLP
1350
Broadway
New York,
New York 10018
Tel:
212-216-8085
Fax:
212-216-8001
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions (see General
Instruction A.2. below):
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Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17
CFR 240.14d-2(b))
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17
CFR 240.13e-4(c))
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SAFE
HARBOR STATEMENT
This
Current Report on Form 8-K (this Report) contains “forward-looking statements”
within the meaning of Section 27A of the Securities Act of 1933 (the Securities
Act) and Section 21E of the Securities Exchange Act of 1934 (Exchange Act). The
forward-looking statements are only predictions and provide our current
expectations or forecasts of future events and financial performance and may be
identified by the use of forward-looking terminology, including the terms
“believes,” “estimates,” “anticipates,” “expects,” “plans,” “intends,” “may,”
“will” or “should” or, in each case, their negative, or other variations or
comparable terminology, though the absence of these words does not necessarily
mean that a statement is not forward-looking. The forward-looking statements are
based on current views with respect to future events and financial performance.
Actual results may differ materially from those projected in the forward-looking
statements.
Although
forward-looking statements in this report reflect the good faith judgment of
management, forward-looking statements are inherently subject to known and
unknown risks, business, economic and other risks and uncertainties that may
cause actual results to be materially different from those discussed in these
forward-looking statements. Readers are urged not to place undue reliance on
these forward-looking statements, which speak only as of the date of this
report. We assume no obligation to update any forward-looking statements in
order to reflect any event or circumstance that may arise after the date of this
report, other than as may be required by applicable law or regulation. Readers
are urged to carefully review and consider the various disclosures made by us in
our reports filed with the Securities and Exchange Commission (“SEC”) which
attempt to advise interested parties of the risks and factors that may affect
our business, financial condition, results of operation and cash flows. If one
or more of these risks or uncertainties materialize, or if the underlying
assumptions prove incorrect, our actual results may vary materially from those
expected or projected.
BACKGROUND
On
January 15, 2010, Med Control, Inc. (the “Registrant”) authorized its Articles
of Incorporation (the “Amendment”) to change its name to AmbiCom Holdings, Inc.,
to increase the number of its authorized shares of capital stock from 75,000,000
to 1,050,000,000 shares of which 1,000,000,000 were designated common stock and
50,000,000 were designated preferred stock, par value $0.001 per share (the
“Preferred Stock”) and to effect a forward-split such that 131.2335958 shares of
Common Stock were issued for every 1 share of Common Stock issued and
outstanding immediately prior to filing of the amendment (the “Forward
Split”). The Registrant also amended its Bylaws on January 15,
2010. On January 15, 2010, the Registrant entered into an Agreement
and Plan of Share Exchange (the “Exchange Agreement”) with AmbiCom Acquisition
Corp., a Nevada corporation (“AmbiCom”), whereby the Registrant acquired all of
the issued and outstanding capital stock of AmbiCom in exchange (the “Exchange”)
for 20,000,000 newly issued shares of Common Stock (the “Common Exchange
Shares”), 7,050,000 shares of Series A Preferred Stock, 2,600,000 shares of
Series B Preferred Stock, options to purchase 5.5 million common shares and
2,350,000 shares of Series A Preferred Stock at the purchase price of $.01 per
share and 500,000 warrants to purchase 500,000 shares of Common
Stock. Simultaneously therewith, the Company accepted subscriptions
in an offering (the “Offering”) of its Common Stock at a price of $0.40 per
share, offered pursuant to Regulation D of the Securities Act of 1933, as
amended (the “Securities Act”). The Company sold an aggregate of
1,250,000 shares of Common Stock for aggregate offering price of
$500,000.
ITEM
1.01. ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT:
On
January 15, 2010, the Company consummated the Exchange. For a description of the
Exchange and the material agreements entered into in connection therewith,
please see Item 2.01 of this Current Report on Form 8-K, which disclosure is
incorporated herein by reference.
ITEM 2.01 COMPLETION OF ACQUISITION OR
DISPOSITION OF ASSETS
Acquisition
Of AmbiCom Acquisition Corp.
On
January 15, 2010, the Company acquired AmbiCom Acquisition Corp. a privately
owned Nevada corporation (“AmbiCom”), pursuant to an Agreement and Plan of Share
Exchange (the “Exchange”). AmbiCom was organized under the laws of
the State of Nevada on July 29, 2008. AmbiCom is a holding company
whose operating company, AmbiCom, Inc., is a designer and developer of wireless
products focusing on the wireless medical industry. AmbiCom’s
wireless modules and devices are based on the Company’s innovative application
software and Wi-Fi or Bluetoothâ
technologies.
Pursuant
to the terms of the Exchange, Med Control, Inc. acquired AmbiCom Acquisition
Corp. from the AmbiCom equity holders in exchange for an aggregate of 20,000,000
newly issued shares of Common Stock, 7,050,000 shares of the Company’s Series A
Preferred Stock, 2,600,000 shares of Series B Preferred Stock an option to
purchase 5,500,000 common shares and 2,350,000 shares of Series A Preferred
Stock at the purchase price of $.01 per share and warrants to purchase 500,000
shares of Common Stock at the exercise price of $0.50 per share (collectively,
the “Exchange Shares”). As a result of the Exchange, the AmbiCom
equity holders surrendered all of their issued and outstanding capital stock of
AmbiCom in consideration for the Exchange Shares and AmbiCom Acquisition Corp.
became a wholly-owned subsidiary of Med Control, Inc.
The
Exchange Agreement contains customary representations, warranties and covenants
of Med Control and AmbiCom, for like transactions. Breaches of representations
and warranties are secured by customary indemnification provisions. The Exchange
Agreement contains a post-closing adjustment for breach of the Exchange
Agreement providing for the issuance of a maximum of $4 million in shares to the
non-breaching party(ies).
At the
Closing, our board of directors was reconstituted by and the appointment of John
Hwang, Kenneth Cheng and, Robert Radoff as directors upon appointment by Ms.
Elaine Mayumi Kato, immediately prior to the resignation from her role as sole
principal officer and director of the Company. Our executive management team
also was reconstituted following the resignation of Ms. Kato and new
officers were appointed in place of our former officers.
Prior to
the Exchange, the AmbiCom Holdings, Inc. 2010 Incentive Plan (the “Plan”) was
adopted by the Board and the Company’s Stockholders. Under the Plan,
2,277,778 shares of Common Stock are reserved for issuance as incentive awards
granted to executive officers, key employees, consultants and directors after
the closing of the transactions described herein.
The
parties have taken the actions necessary to provide that the Exchange is treated
as a “tax free exchange” under Section 368 of the Internal Revenue Code of 1986,
as amended.
The
Offering
Simultaneously
upon the Closing, the Company closed an offering (the “Offering”) of its Common
Stock for a at a price of $0.40 per share for a minimum of 1,000,000 shares (the
“Minimum Offering”) and a maximum offering of 1,500,000 shares (the “Maximum
Offering”). The Company accepted subscriptions for an aggregate of
1,250,000 shares of Common Stock for aggregate offering price of
$500,000. The shares of Common Stock were offered and sold in
reliance upon exemptions from registration pursuant to Section 4(2) under the
Securities Act and Rule 506 of Regulation D promulgated there under. The
agreements executed in connection with this sale contain representations to
support the Registrant’s reasonable belief that the Investor had access to
information concerning the Registrant’s operations and financial condition, the
Investor acquired the securities for their own account and not with a view to
the distribution thereof in the absence of an effective registration statement
or an applicable exemption from registration, and that the Investor are
sophisticated within the meaning of Section 4(2) of the Securities Act and are
“accredited investors” (as defined by Rule 501 under the Securities Act). In
addition, the issuances did not involve any public offering; the Registrant made
no solicitation in connection with the sale other than communications with the
Investor; the Registrant obtained representations from the Investor regarding
their investment intent, experience and sophistication; and the Investor either
received or had access to adequate information about the Registrant in order to
make an informed investment decision.
Split-Off
Agreement
In
addition, contemporaneously with the Closing, the Company and our former
principal stockholder, Elaine Mayumi Kato, split-off its wholly owned
subsidiary, MCI Acquisition Corp., a newly-formed Nevada corporation (“MCAC”),
whereby the Company assigned all of its previous operating assets to MCAC in
consideration for the assumption of all of the Company’s liabilities to Ms.
Kato, who is currently the principal shareholder of MCI and the retirement and
cancellation of Ms. Kato’s 6,000,000 shares of Common Stock pursuant to the
terms and conditions of a split-off agreement by and among the Company, Ms.
Kato, and MCAC (the “Split-Off Agreement”).
Lock-up
Leakout Agreement
Shareholders
owning 5% or more of the Registrant have entered into a Lock-up Leakout
Agreement providing certain restrictions on the sale of the Registrant’s stock
in the market.
Pro
Forma Ownership
Following
the issuance of the Exchange Shares and the retirement of Ms. Kato’s shares
pursuant to the Split-Off Agreement, the former stockholders of AmbiCom and/or
their designees now beneficially own approximately fifty-five percent (55%) of
the total outstanding shares of Common Stock, and after giving effect to the
conversion of the Series A and Series B in accordance with their respective
terms (and the satisfaction of certain conditions to the conversion of such
shares) seventy-six percent (76%) of the total outstanding shares of Common
Stock on a fully-diluted basis. For financial accounting purposes,
the acquisition was a reverse acquisition of the Company. by AmbiCom Acquisition
Corp., under the purchase method of accounting, and was treated as a
recapitalization with AmbiCom Acquisition Corp. as the acquirer. Upon
consummation of the Exchange, the Company adopted the business plan of AmbiCom
Acquisition Corp.
PART
I
1.
DESCRIPTION OF BUSINESS
Company
Overview
AmbiCom
Holdings, Inc. (“AmbiCom Holdings” “the Company”, “us”, “our” or “we,”) was
incorporated as Med Control, Inc. in the State of Nevada as a for-profit company
on July 1, 2008 and established a fiscal year end of July 31. Prior
to the Exchange, the Company was a development-stage company organized to sell
product called “Med Time”, an electronic and portable device aimed to control
the doses and schedules of medications taken by elderly individuals. As a result
of the Exchange with AmbiCom Acquisition Corp., we have adopted the business
plan of AmbiCom Acquisition Corp’s wholly-owned subsidiary, AmbiCom, Inc., a
California corporation, and now design and develop wireless products focusing on
the wireless medical industry.
AmbiCom
is a designer and developer of wireless products focusing on the wireless
medical industry. AmbiCom’s wireless modules and devices are based on
the Company’s innovative application software and Wi-Fi or Bluetoothâ
technologies. While AmbiCom’s focus is on the development of products
for the healthcare industry. AmbiCom will also continue to develop
and explore solutions for non-healthcare applications.
Sales in
the wireless medical device industry have grown at a rapid pace in the last 3
years. AmbiCom believes the reason for this growth and its strategy
to focus on this industry includes:
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Healthcare
providers and insurers are seeking increased out-patient
services. Wireless applications have the ability to provide
“virtual nurse” services such as condition monitoring and
alerts.
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Wireless
applications may eliminate or reduce the need for certain services that
previously required a person, such as nurses, physicians, and billing
positions.
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Automated
monitoring and alerts may produce improved patient outcomes and enable
medical care providers to “virtually” monitor patients around the
clock.
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Improved
usability may enhance quality of life and enable better, easier care
provision.
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Can
enable or improve mobility and greater
convenience.
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AmbiCom’s
business strategy targets and prioritizes areas of need and problems that could
be improved or solved via the application of wireless
capabilities. It then attempts to develop solutions that combine
existing hardware and new software applications which AmbiCom develops to
customize a device. AmbiCom’s solution application wireless devices
include: infusion pumps, heart monitoring machines, and glucose
meters.
AmbiCom sells its products through
multi-channel distribution and original equipment manufacturer (“OEM”)
channels. The Company delivers its medical device OEM modules to
global medical device companies such as Cardinal Health / Carefusion, Siemens/
Draeger, and Roche.
The
Company is headquartered in the heart of the Silicon Valley, San Jose,
California, where all corporate and design operations are based. In
addition, the Company has a logistic support center in Taipei,
Taiwan. AmbiCom’s manufacturing operations and capacity are highly
scalable and cost effective via several manufacturing partners in
Asia.
Business
Strategy
AmbiCom's
primary goal is to continue to provide consumers high quality mobile wireless
products. The Company is committed to wireless design and development
of software and hardware, and to bringing new and innovative products to the
wireless medical and other wireless markets.
AmbiCom
intends to grow both organically and, potentially, through selective
acquisitions. The Company believes many medical devices lack the
technological and operational efficiency to succeed in today’s advanced
technology environment. The Company’s internal growth objective is to
position AmbiCom as a leading designer of application software and hardware,
via the following
approaches and others:
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leveraging
current customer base
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capitalize
on competitive advantage of propriety technology and
software
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exploit
the growing need for cost reduction
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build
strategic partnerships for scalability, efficiencies and
leverage
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expand
sales and marketing activities
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Our
Competitive Advantages
The
Company believes its strengths include the following:
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Proven Results: Deep
domain expertise in wireless technologies and developing new product
applications that innovatively leverage wireless technology to create
product innovations with breakthrough functionalities. AmbiCom has
sold over one million devices since 2000 to customers
worldwide.
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Low Cost Operating
Structure – AmbiCom maintains a low cost operating structure,
focusing resource allocation at its core corporate functions including
sales, marketing, research and development and administration, and
outsourcing manufacturing to several companies in Asia. This
operating structure has allowed the Company to maintain strong gross
margins.
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Products
We
expect our markets to remain competitive and to reflect rapid technological
evolution and continuously evolving customer and regulatory
requirements. Our ability to remain competitive depends in part upon
our success in maintaining our intellectual knowledge base and developing new
and enhanced advanced wireless solutions and introducing these systems at
competitive prices on a timely basis.
Sales and
Marketing
We
believe our intellectual capability, technology sales and marketing efforts have
established our reputation for providing innovative solutions that meet our
customers’ needs in a timely, cost-efficient manner. Our ability to leverage
our distribution network will be an important factor in our success. The
sales and marketing of our products largely depends upon the type of product,
location and target customer.
Manufacturing and
Suppliers
We
currently outsource production of our products primarily to manufacturers in
Asia. Many of the key components and sub-components are purchased
from third party suppliers. We have selected such suppliers based on their
ability to consistently produce these components per our specifications,
striving for the best quality product at the most cost effective
price.
Research and Product
Development
The
general focus of our research and development team is the design and integration
of wireless medical devices. Through these efforts, we constantly
seek to enhance our existing products, design new products and develop solutions
for customer applications. We believe that our responsiveness to
current and perceived future customer demands differentiates us from many of our
competitors, as we rapidly introduce new products to address market
needs. We intend to expand our research and development team as we
believe that increased levels of spending on research and development will be
necessary to successfully develop products that will have a niche
value.
Employees
As of
January 15, 2010, we have approximately 11 employees. We believe we enjoy good
employee relations. None of our employees are members of any labor union, and we
are not a party to any collective bargaining agreement.
CORPORATE
INFORMATION
The
Company's corporate headquarters are located at 405 River Oaks Parkway, San
Jose, California.
RISK FACTORS
Investing
in the Company's common stock involves a high degree of risk. Prospective
investors should carefully consider the risks described below, together with all
of the other information included or referred to in this Current Report on Form
8-K, before purchasing shares of the Company's common stock. There are numerous
and varied risks, known and unknown, that may prevent the Company from achieving
its goals. The risks described below are not the only ones the Company will
face. If any of these risks actually occur, the Company's business, financial
condition or results of operation may be materially adversely affected. In such
case, the trading price of the Company's common stock could decline and
investors in the Company's common stock could lose all or part of their
investment.
Risks
Specific to Us
If
our products do not gain expected market acceptance, prospects for our sales
revenue and profit may be affected.
The
healthcare industry’s relative unfamiliarity with wireless medical products may
slow their market acceptance. Potential customers for our devices and systems
may be reluctant to adopt these as alternatives to traditional technologies
because of regulatory and other factors beyond the Company’s
control
Obstacles
to widespread adoption of our devices include inability to achieve market
penetration before they are rendered obsolete.
If
we are not able to compete effectively with other competitors, our prospects for
future growth will be jeopardized.
There is
significant competition in the healthcare industry with more established
companies. We are not only competing with other wireless device providers but
also with companies offering traditional medical products, which are usually
more established and have greater resources to devote to research and
development, manufacturing and marketing. In addition, we compete
with large companies such as General Electric which have advantages of global
marketing capabilities and substantially greater resources to devote to research
and development and marketing.
Our
competitors may promote devices which are more readily accepted by customers and
we may be required to reduce the prices of our products in order to remain
competitive.
Downturns
in general economic and market conditions could materially and adversely affect
our business.
A
significant amount of medical device purchases are related to the budgets and
purchasing of medical facilities generally and hospitals in
particular. A reduction in spending and budgets would likely cause a
reduction in the demand for our products. If these facilities have
less funds budgeted as a result of general economic conditions, sales of our
wireless medical products for which they have budgeted would inevitably be
influenced by general economic downturns.
If
critical components become unavailable or contract manufacturers delay their
production, our business will be negatively impacted.
Stability
of component supply is crucial to determine our manufacturing process. As some
critical devices and components are supplied by certain third-party
manufacturers, we may be unable to acquire necessary amounts of key components
at competitive prices.
Outsourcing
the production of certain parts and components is one way to reduce
manufacturing costs. We have selected these particular manufacturers based on
their ability to consistently produce these products according to our
requirements in an effort to obtain the best quality product at the most cost
effective price. Contrarily, the loss of all or one of these suppliers or delays
in obtaining shipments could have an adverse effect on our operations until an
alternative supplier could be found, if one may be located at
all. This may cause us to breach our contracts and lose
sales.
If
our contract manufacturers fail to meet our requirements for quality, quantity
and timeliness, our business growth could be harmed.
We design
and outsource our products to contract manufacturers. These
manufacturers procure most of the raw materials for us and provide all necessary
facilities and labor to manufacture our products. If these companies were to
terminate their agreements with us without adequate notice, or fail to provide
the required capacity and quality on a timely basis, we would be delayed in our
ability or unable to process and deliver our products to our
customers.
Our
products could contain defects or they may be installed or operated incorrectly,
which could reduce sales of those products or result in claims against
us.
Although
we have quality assurance practices to ensure good product quality, defects
still may be found in the future in our existing or future
products.
End-users
could lose their confidence in our products and Company when they unexpectedly
use defective products or use our products improperly. This could
result in loss of revenue, loss of profit margin, or loss of market
share. Moreover, because our products are employed in the healthcare
industry, if one of our products is a cause, or perceived to be the cause, of
injury or death to a patient, we would likely be subject to a
claim. If we were found responsible it could cause us to incur
liability which could interrupt or even cause us to terminate some or all of our
operations.
If
we are unable to recruit and retain qualified personnel, our business could be
harmed.
Our
growth and success highly depend on qualified personnel. Competition in the
industry could cause us difficultly in recruiting or retaining a sufficient
number of qualified technical personnel, which could harm our ability to develop
new products. If we are unable to attract and retain necessary key talents, it
would harm our ability to develop competitive product and retain good customers
and could adversely affect our business and operating results.
Risks Related to the Securities
Markets and Investments in Our Common Stock
Because our
common stock is quoted on the "OTCBB," your ability to sell shares in the
secondary trading market may be limited.
Our
common stock is currently quoted on the over-the-counter market on the OTC
Electronic Bulletin Board. Consequently, the liquidity of our common stock is
impaired, not only in the number of shares that are bought and sold, but also
through delays in the timing of transactions, and coverage by security analysts
and the news media, if any, of our company. As a result, prices for shares of
our common stock may be lower than might otherwise prevail if our common stock
was quoted and traded on Nasdaq or a national securities
exchange.
Because our
shares are "penny stocks," you may have difficulty selling them in the secondary
trading market.
Federal
regulations under the Securities Exchange Act of 1934 regulate the trading of
so-called "penny stocks," which are generally defined as any security not listed
on a national securities exchange or Nasdaq, priced at less than $5.00 per share
and offered by an issuer with limited net tangible assets and revenues. Since
our common stock currently is quoted on the "OTCBB" at less than $5.00 per
share, our shares are "penny stocks" and may not be traded unless a disclosure
schedule explaining the penny stock market and the risks associated therewith is
delivered to a potential purchaser prior to any trade.
In
addition, because our common stock is not listed on Nasdaq or any national
securities exchange and currently is quoted at and trades at less than $5.00 per
share, trading in our common stock is subject to Rule 15g-9 under the Securities
Exchange Act. Under this rule, broker-dealers must take certain steps prior to
selling a "penny stock," which steps include:
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obtaining financial and investment information from the investor;
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obtaining a written suitability questionnaire and purchase agreement signed by
the investor; and
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providing the investor a written identification of the shares being offered and
the quantity of the shares.
If these
penny stock rules are not followed by the broker-dealer, the investor has no
obligation to purchase the shares. The application of these comprehensive rules
will make it more difficult for broker-dealers to sell our common stock and our
shareholders, therefore, may have difficulty in selling their shares in the
secondary trading market.
By
Virtue of Being a Public Company, the Company is Subject to Certain Regulations
and Expenses.
The
Company is publicly-traded and, accordingly, subject to the information and
reporting requirements of the U.S. securities laws. The U.S. securities laws
require, among other things, review, audit, and public reporting of the
Company’s financial results, business activities, and other
matters. Recent SEC regulation, including regulation enacted as a
result of the Sarbanes-Oxley Act of 2002, has also substantially increased the
accounting, legal, and other costs related to becoming and remaining an SEC
reporting company. The public company costs of preparing and filing
annual and quarterly reports, and other information with the SEC, and furnishing
audited reports to stockholders will cause the Company’s expenses to be higher
than if privately-held. In addition, the Company will
incur substantial expenses in connection with the preparation of the
Registration Statement and related documents with respect to the registration of
the shares issued in the Offering. These increased costs may be material and may
include the hiring of additional employees and/or the retention of additional
advisors and professionals. Failure by the Company to comply with the federal
securities laws could result in private or governmental legal action against the
Company and/or our officers and directors, which could have a detrimental effect
on the Company's business and finances, the value of the Company’s stock, and
the ability of stockholders to resell their stock.
We
may face a claim from the minority shareholders of our operating
subsidiaries.
On May
21, 2009, AmbiCom Acquisition Corp. acquired AmbiCom, Inc. AmbiCom,
Inc. was unable to obtain the consent of all of its minority shareholders to the
transaction. Accordingly, pursuant to the provisions of California
corporate law, there is a risk that one or all of these minority shareholders
may attempt to assert dissenter’s rights in accordance with the
transaction. While the Company believes it has taken steps to protect
itself against such an action, there is no guarantee that if an action were
commenced against the Company that it could be resolved or resolved on terms
favorable to the Company.
Our stock price
may be volatile and your investment in our common stock could suffer a decline
in value.
As of
January 15, 2010, there have been no trading activities in the Company’s common
stock. There can be no assurance that a market will ever develop in
the Company’s common stock in the future. If a market does not
develop, investors could be unable to sell the Company’s common stock, possibly
resulting in a complete loss of any funds invested.
Should a
market develop, the price may fluctuate significantly in response to a number of
factors, many of which are beyond our control. These factors
include:
• Acceptance
of our products in the industry;
• Announcements
of technological innovations or new products by us or our
competitors;
• Government
regulatory action affecting our products or our competitors'
products;
• Developments
or disputes concerning patent or proprietary rights;
• Economic
conditions in the United States or abroad;
• Actual
or anticipated fluctuations in our operating results;
• Broad
market fluctuations; and
• Changes
in financial estimates by securities analysts.
A registration of
a significant amount of our outstanding restricted stock may have a negative
effect on the trading price of our stock.
At
January 15, 2010, shareholders of the Company had approximately 20,000,000
post-split adjusted shares of restricted stock, or [44]% of the outstanding
common stock. If we were to file a registration statement including all of these
shares, and the registration is allowed by the SEC, these shares would be freely
tradable upon the effectiveness of the registration statement. If investors
holding a significant number of freely tradable shares decide to sell them in a
short period of time following the effectiveness of a registration statement,
such sales could contribute to significant downward pressure on the price of our
stock.
We
do not intend to pay any cash dividends in the foreseeable future and,
therefore, any return on your investment in our capital stock must come from
increases in the fair market value and trading price of the capital
stock.
We have
not paid any cash dividends on our common stock and do not intend to pay cash
dividends on our common stock in the foreseeable future. We intend to
retain future earnings, if any, for reinvestment in the development and
expansion of our business. Any credit agreements, which we may enter
into with institutional lenders, may restrict our ability to pay
dividends. Whether we pay cash dividends in the future will be at the
discretion of our board of directors and will be dependent upon our financial
condition, results of operations, capital requirements and any other factors
that the board of directors decides is relevant. Therefore, any
return on your investment in our capital stock must come from increases in the
fair market value and trading price of the capital stock.
We
may issue additional equity shares to fund the Company's operational
requirements which would dilute your share ownership.
The
Company's continued viability may depend on its ability to raise
capital. Changes in economic, regulatory or competitive conditions
may lead to cost increases. Management may also determine that it is
in the best interest of the Company to develop new services or products. In any
such case additional financing will likely be required for the Company to meet
its operational requirements. There can be no assurances that the
Company will be able to obtain such financing on terms acceptable to the Company
and at times required by the Company, if at all. In such event, the
Company may be required to materially alter its business plan or curtail all or
a part of its operational plans as detailed further in Management's Discussion
and Analysis in this Form 8-K. While the Company currently has no offers to sell
its securities to obtain financing, sale or the proposed sale of substantial
amounts of our common stock in the public markets may adversely affect the
market price of our common stock and our stock price may decline
substantially. In the event that the Company is unable to raise or
borrow additional funds, the Company may be required to curtail significantly
its operational plans as further detailed in Requirements for Additional Capital
in the Management Discussion and Analysis of this Form 8-K.
Also, any
new securities issued may have greater rights, preferences or privileges than
our existing common stock which may adversely affect the market price of our
common stock and our stock price may decline substantially.
The
Company’s Amended Articles of Incorporation authorize the issuance of up to
1,050,000,000 total shares of capital stock without additional approval by
shareholders. As of January 15, 2010, we had 45,000,000 adjusted shares of
common stock outstanding.
Large amounts of
our common stock will be eligible for resale under Rule 144.
As of
January 15, 2010, approximately [20,000,000] of the [45,000,000] issued and
outstanding shares of the Company's common stock are restricted
securities as defined under Rule 144 of the Securities Act of 1933, as amended
(the “Act”) and under certain circumstances may be resold without registration
pursuant to Rule 144 or otherwise.
In
general, under Rule 144, a person (or persons whose shares are aggregated) who
has satisfied a six month holding period may, under certain circumstances, sell
within any three-month period a number of securities which does not exceed the
greater of 1% of the then outstanding shares of common stock or the average
weekly trading volume of the class during the four calendar weeks prior to such
sale. Rule 144 also permits, under certain circumstances, the sale of
securities, without any limitation, by a person who is not an Affiliate, as such
term is defined in Rule 144(a)(1), of the Company and who has satisfied a one
year holding period. Any substantial sale of the Company's common stock pursuant
to Rule 144 may have an adverse effect on the market price of the Company's
shares. Since the Company has previously indicated in its filings
with the Commission that it is a shell company, as that term is defined under
the Securities Act, pursuant to Rule 144, shareholders must wait at least one
year from the date of the filing of this Form 8-K to avail themselves of Rule
144 unless we file a registration statement for the sale of such shares prior
thereto.
MANAGEMENT'S
DISCUSSION AND ANALYSIS OF PLAN OF OPERATIONS
Statements
in the following discussion and throughout this report that are not historical
in nature are “forward-looking statements” within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E
of the Securities Exchange Act of 1934, as amended. You can identify
forward-looking statements by the use of words such as the words “expect,”
“anticipate,” “estimate,” “may,” “will,” “should,” “intend,” “believe,” and
similar expressions. Although we believe the expectations reflected in these
forward-looking statements are reasonable, such statements are inherently
subject to risk and we can give no assurances that our expectations will prove
to be correct. Actual results could differ from those described in this report
because of numerous factors, many of which are beyond our control. These factors
include, without limitation, those described as “Risk Factors.” We undertake no
obligation to update these forward-looking statements to reflect events or
circumstances after the date of this report or to reflect actual
outcomes.
Acquisition and
Reorganization
On
January 15, 2010, the acquisition of AmbiCom was completed, and the business of
AmbiCom was adopted as our business. As such, the following Management
Discussion is focused on the current and historical operations of AmbiCom, and
excludes the prior operations of the Registrant.
Overview
AmbiCom
is a designer and developer of wireless products focusing on the wireless
medical industry. AmbiCom’s wireless modules and devices are based on
the Company’s proprietary innovative application software and Wi-Fi and
Bluetoothâ
technologies. AmbiCom’s focus is on the development of products for
the healthcare industry. The Company believes that there exits unique
opportunities as a result of the sheer size of the wireless healthcare market
and the Company’s innovative approach and exemplary customer
service. AmbiCom will also continue to develop and explore solutions
for non-healthcare applications.
We
principally generate revenue from selling our products into healthcare
markets.
Revenue
Revenue
is derived from sales of our wireless device products. These products consist of
routers, Compact flash Adapters/Modules, USB Adapters/Modules, Mini PCI Modules,
and PCI Express Mini Module. In addition to the wireless medical
device business, a portion of our revenue comes from our high quality mobile
wireless products.
Cost of Goods
Sold
Our cost
of goods sold consists primarily of labor-related overhead, such as R&D
professionals, designers, and administrative personnel, paid to third-party
manufacturers.
Gross
Profit
Our gross
profit has been and will continue to be affected by a variety of factors,
including changing of the foreign exchange rates for exporting, outsourcing cost
to support project demands, average sales prices of our products, including
fluctuations in the cost of our purchased components, and the product life
cycle.
Operating
Expenses
Operating
expenses consist primarily of salaries and associated costs for employees in
finance, human resources, sales, information technology and administrative
activities. In addition, operating expenses include charges relating to
accounting, legal, insurance and stock-based compensation under Statement of
Financial Accounting Standards No. 123(R), “Share-Based Payment.”
Results of
Operations
Revenue
The
following table represents the consolidated results of the Company for the
periods indicated:
|
Year
Ended December 31,
|
|||||||||||||||
|
2008
|
2007
|
Change
|
%
|
||||||||||||
|
10-WL11C-CFC1
|
137,352.08 | 369,089.34 | (231,737.26 | ) | (62.79%) | ||||||||||
|
BT-GPS
H1-1R1
|
80,533.35 | 31,684.35 | 48,849.00 | 154.17% | |||||||||||
|
GPS-USB
|
93,932.63 | 116,803.81 | (22,871.18 | ) | (19.58%) | ||||||||||
|
WL54-CF-1R1C
|
2,485,826.72 | 3,244,003.66 | (758,176.94 | ) | (23.37%) | ||||||||||
|
Other
Revenue
|
86,706.22 | 172,187.84 | (85,481.62 | ) | (49.64%) | ||||||||||
|
Total
|
2,884,351 | 3,933,769 | (1,049,418 | ) | (26.67%) | ||||||||||
Gross
Profit and Cost of Goods Sold
|
Year
Ended December 31,
|
|||||||||||||||
|
2008
|
2007
|
Change
|
%
|
||||||||||||
|
Revenue
|
2,884,351 | 3,933,769 | (1,049,418 | ) | (26.67%) | ||||||||||
|
Cost
of sales
|
1,922,243 | 2,308,170 | (385,927 | ) | (16.72%) | ||||||||||
|
Gross
profit
|
962,108 | 1,625,599 | (663,491 | ) | (40.81%) | ||||||||||
|
Gross
margin %
|
33.36 | % | 41.32 | % | |||||||||||
Operating
Loss and Expenses
|
Year
Ended December 31,
|
||||||||||||||||
|
2008
|
2007
|
Change
|
%
|
|||||||||||||
|
Operating
expenses
|
1,116,596 | 1,055,262 | 61,334 | 5.81% | ||||||||||||
|
Research
and development expenses
|
208,773 | 193,991 | 14,782 | 7.62% | ||||||||||||
|
Total
operating expenses
|
1,325,369 | 1,249,253 | 76,116 | 6.10% | ||||||||||||
|
Operating
income(loss)
|
(363,261 | ) | 376,346 | 739,607 | (196.52%) | |||||||||||
Earnings
Before Interest, Taxes, Depreciation and Amortization (EBITDA)
Earnings
before interest, taxes, depreciation and amortization (EBITDA) is a non-GAAP
(Generally Accepted Accounting Principle) financial measure provided as
additional information to investors. EBITDA is an alternative method for
assessing our financial condition and operating results. EBITDA is not in
accordance with, or a substitute for, GAAP, and may be different from or
inconsistent with non-GAAP financial measures used by other companies. However,
we believe that EBITDA may provide additional information with respect to our
performance and ability to meet future debt service, capital expenditures and
working capital requirements.
Whenever
we refer to a non-GAAP financial measure we will present the most directly
comparable financial measure calculated and presented in accordance with GAAP,
along with a reconciliation of the differences between the non-GAAP financial
measures we reference with such comparable GAAP financial measure.
The
following table reconciles the GAAP measure net loss to the non-GAAP financial
measure EBITDA:
|
Year
Ended December 31,
|
||||||||||||||||
|
2008
|
2007
|
Change
|
%
|
|||||||||||||
|
Net
income (loss)
|
383,083 | 338,739 | 44,344 | 13.09 | ||||||||||||
|
Plus:
|
||||||||||||||||
|
Interest
expense
|
27,675 | 25,051 | 2,614 | 10.43 | ||||||||||||
|
Depreciation
|
140,140 | 3,638 | 136,502 | |||||||||||||
|
Various
amortization
|
||||||||||||||||
|
Taxes
|
800 | 800 | 0 | 0 | ||||||||||||
|
EBITDA
|
551,688 | 368,228 | 183,460 | 49.82 | % | |||||||||||
For the
year ended December 31, 2008, EBITDA was $551,688 compared to $368,228 in 2007.
The increase was primarily due to the Ambeon settlement.
Sales. Revenues decreased to
$1,451,334 for the nine-month ended September 30, 2009 compared to $2,235,812
for the same period of 2008. This decrease was due to a
decline in demand for our products and services due principally to the overall
economic slowdown.
Cost of Sales. Cost of sales
for the nine-month ended September 30, 2009 was $791,364 or 54.53% of net sales,
as compared to $1,788,160 or 79.98 % for the same period of 2008. This decrease
was due to the decrease in sales and a reduction in components
cost.
Selling, General and Administrative
Expenses. Selling, general and administrative expenses for the nine-month
period ended September 30, 2009 was $835,872 compared to $978,804 for the same
period of 2008. Selling, general and administrative expenses are
principally salary expenses.
Income from Operations. Income
from operations was $(-175,902) for the nine-month period ended September 30,
2009, compared to $(-531,158) for the same period of 2008. This increase was due
principally to reducing depreciation and amortization.
Net Income. Net income for the
nine-month period ended September 30, 2009 was $(-189,906) as compared to
$457,805 for the same period of 2008. The decrease in net income was due largely
because the benefits of the Ambeon settlement were recognized in
2008.
Liquidity
and Capital Resources
Cash and
cash equivalents were $114,148 at December 31, 2008 and $45,034 at December 31,
2007. Our total current assets were $998,041 at December 31, 2008 as compared to
$2,202,312 at December 31, 2007. Our total current liabilities were $585,776 at
December 31, 2008 as compared to $2,458,386 at December 31, 2007.
We had
working capital at September 30, 2009 of $152,729 compared with working capital
of $412,265 at December 31, 2008. This decrease in working capital was primarily
due to paying short and long-term notes and line of credit. During
the nine-month period ended September 30, 2009, net cash provided by operating
activities was $212,212. Net cash used in investing activities was
$(-1,810) and net cash used in financing activities was $(-289,000). Net change
in cash and cash equivalents was a decrease of $ (-78,598).
Off-Balance
Sheet Arrangements
We do not
have any off-balance sheet arrangements as of September 30, 2009.
CRITICAL ACCOUNTING POLICIES
AND ESTIMATES
The
summary of significant accounting policies of AmbiCom, Inc. (the “Company”), is
presented to assist in understanding the Company’s financial statements. The
financial statements and notes are representations of the Company’s management,
who is responsible for their integrity and objectivity. These accounting
policies conform to generally accepted accounting principles and have been
consistently applied in the preparation of the financial
statements.
a) Description of
Business - Ambicom, Inc., is a leading designer and developer of wireless
technologies which emphasize wireless medical and other wireless products.
Ambicom, Inc., was formed in 1997, headquartered in San Jose CA, and has a
branch operation in Taiwan.
b) Segment
Information - The
Company follows SFAS No. 131, “Disclosures about Segments of an Enterprise and
Related Information.” SFAS No. 131 requires that a company report financial and
descriptive information about its reportable operating segments. Operating
segments are components of an enterprise for which separate financial
information is available and is evaluated regularly by the chief operating
decision maker in deciding how to allocate resources and in assessing
performance. The Company’s chief operating decision maker currently evaluates
the Company’s operations from a number of different operational perspectives
including but not limited to a client by client basis. The Company respectively
derives all significant revenues from single reportable operating segment of
business. Accordingly, the Company does not report more than one segment;
nevertheless, management evaluates, at least annually, whether the Company
continues to have one single reportable segment.
c) Use of
Estimates - The preparation of 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 amounts of revenues and
expenses during the reporting period. Actual results may differ from those
estimates, and the differences may be material to the financial statements.
Estimates are used primarily in determining the depreciable lives of fixed
assets, inventory valuation and warranty liability. In addition, estimates form
the basis for the reserves for sales allowances, accounts receivable and
inventory. Various assumptions go into the determination of these
estimates. The process of determining significant estimates requires
consideration of factors such as historical experience and current and expected
economic conditions.
d) Cash and Cash
Equivalents - The Company considers all highly liquid investments and
time deposits with original maturities of three months or less when purchased to
be cash equivalents. All cash and cash equivalents are maintained with
nationally recognized financial institutions.
e) Allowance for
Doubtful Accounts - An allowance for doubtful accounts is computed based
on the Company’s historical experience and management’s analysis of possible bad
debts. As of December 31, 2008 and 2007,accounts receivable are shown net of an
allowance for doubtful accounts of $11,831 and $12,453,
respectively.
f) Inventories -
Inventories are stated at the lower of cost or market on an average
basis. Inventory reserves are recorded for damaged, obsolete, excess and
slow-moving inventory. Market value of inventory is estimated based on the
impact of market trends, an evaluation of economic conditions and the value of
current orders relating to the future sales of this type of
inventory.
g) Property and
Equipment - Property and equipment are stated at cost. Depreciation is
calculated using the straight-line method over the following estimated useful
lives of the assets: furniture and fixtures –seven years; machinery and
equipment –five years; software – five years. Major additions and betterments
are capitalized and repairs and maintenance are charged to operations in the
period incurred.
h) Income Taxes -
The Company accounts for income taxes pursuant to the FASB issued
Interpretation No. 48, "Accounting for Uncertainty in Income Taxes", (“FIN 48”).
FIN 48 clarifies the accounting for uncertainty in income taxes recognized in
the Company’s financial statements in accordance with SFAS No.
109. The calculation of the Company's tax provision involves the
application of complex tax rules and regulations within multiple jurisdictions.
The Company's tax liabilities include estimates for all income-related taxes
that the Company believes are probable and that can be reasonably estimated. To
the extent that the Company’s estimates are understated, additional charges to
the provision for income taxes would be recorded in the period in which the
Company determines such understatement. If the Company's income tax estimates
are overstated, income tax benefits will be recognized when
realized. Deferred tax assets and liabilities are recognized for the
future tax consequences attributable to differences between the financial
statement carrying amounts of existing assets and liabilities and their
respective tax bases and operating loss and tax credit carry forwards. Deferred
tax assets are reduced by a valuation allowance when, in the opinion of
management, it is more likely than not that some portion or all of the deferred
tax assets will not be realized. Deferred tax assets and liabilities are
adjusted for the effects of changes in tax laws and rates on the date of
enactment. FIN 48 prescribes a recognition threshold and measurement attributes
for the financial statement recognition and measurement of a tax position taken
or expected to be taken in a tax return.
i) Revenue
Recognition - Sales are recognized when persuasive evidence of an
arrangement exists, product delivery has occurred, pricing is fixed or
determinable and collection is reasonably assured. The Company analyzes sales
returns in accordance with SFAS No. 48 “Revenue Recognition When Right of Return
Exists”. The Company is able to make reasonable and reliable estimates of
product returns for sales based on the Company’s past history. Sales, provisions
for estimated sales returns and the cost of products sold are recorded at the
time title transfers to customers. Actual product returns are charged against
estimated sales return allowances.
j) Shipping and
Handling Costs –
Shipping and handling costs are included in cost of sales.
k) Research and
Development Costs - Research and development costs are expensed as
incurred.
l) Royalty
Expense – The Company enters into license agreements from time to time
that allow it to use certain trademarks and trade names on certain of its
products. These agreements require the Company to pay royalties, generally based
on the sales of such products, and may require guaranteed minimum royalties, a
portion of which may be paid in advance. The Company’s accounting policy is to
match royalty expense with revenue by recording royalties at the time of sale at
the greater of the contractual rate or an effective rate calculated based on the
guaranteed minimum royalty and its estimate of sales during the contract period.
If a portion of the guaranteed minimum royalty is determined not to be
recoverable, the unrecoverable portion is charged to expense at that
time. Royalty expense for each of the years ended December 31, 2008
and 2007 were $0 and $236, respectively.
m) Stock-Based
Compensation - The Company adopted SFAS No. 123R “Share-Based Payment”.
As permitted, the Company elected to adopt disclosure-only provisions of SFAS
No. 123R and SFAS No. 148 “Accounting for Stock-Based Compensation – Transition
and Disclosure – An Amendment of FASB Statement No. 123”. Under the provisions
of SFAS 123R, compensation expense is recognized based on the fair value of
options on the grant date.
n) Fair Value of
Financial Instruments - FASB Statement No. 157, “Fair Value
Measurements”, requires disclosure of the level within the fair value hierarchy
in which fair value measurements in their entirety fall, segregating fair value
measurements using quoted prices in active markets for identical assets or
liabilities (Level 1), significant other observable inputs (Level 2), and
significant unobservable inputs (Level 3). The Company's financial instruments
consist of cash and cash equivalents, short-term trade receivables and payables.
The carrying values of cash and cash equivalents and short-term trade
receivables and payables approximate fair value due to their short-term
nature.
o) Translation of
Foreign Currency - The Company accounts for its foreign operations in
accordance with SFAS No. 52, “Foreign Currency Translation”. For the branch,
non-monetary balance sheet items and related income statements items are
translated at historical exchange rates, while monetary balance sheet items are
translated at current exchange rates. Remaining income statement items, other
than monetary, are translated at the weighted average exchange rate during the
year. Deferred taxes are not provided on translation gains and losses where the
Company expects earnings of a foreign branch to be permanently
reinvested.
p) Concentration
- Financial instruments which potentially subject the Company to
concentrations of credit risk are primarily accounts receivable. The Company
performs ongoing credit evaluations of its customers’ financial condition. If
the collection of the receivable becomes doubtful, the Company establishes a
reserve in an amount determined appropriate for the perceived
risk. The Company maintains its cash accounts at commercial banks.
From time to time, cash balances maintained in such banks may exceed the insured
amount by the Federal Deposit Insurance Corporation (FDIC). As of December 31,
2008 and 2007, the management does not believe they are exposed to any
significant risk on their cash balances. The Company’s products are
primarily sold to global medical device companies. These customers can be
significantly affected by changes in economic, competitive or other factors. The
Company makes substantial sales to a relatively few, large customers, where
company is seeking to capture more business from other targeted medical device
companies. One customer accounted for 47.4% of accounts receivable as
of December 31, 2008, while two customers accounted for 62.4% of accounts
receivable as of December 31, 2007. One customer accounted for 57.3%
and 50.6% of the revenues for the years ended December 31, 2008 and 2007,
respectively. Two vendors accounted for 67.6% of accounts payable as
of December 31, 2007. One vendor accounted for 84.6% and 80.2% of the
purchases for the years ended December 31, 2008 and 2007,
respectively.
q)
Reclassification - Certain accounts were reclassified from the prior
year. The purpose of the reclassification is to give a more accurate
representation of the Company’s operation. The reclassifications did not effect
the representation of the Company’s overall performance.
RECENT
ACCOUNTING PRONOUNCEMENTS
In
September 2007, the FASB issued Statement of Financial Accounting Standard No.
157, Fair Value Measurements (“SFAS 157”) which defines fair value, establishes
guidelines for measuring fair value and expands disclosures regarding fair value
measurements. SFAS 157 does not require any new fair value measurements but
rather eliminates inconsistencies in guidance found in various prior accounting
pronouncements. SFAS 157 is effective for fiscal years beginning after November
15, 2008. The adoption of SFAS 157 is not expected to have a material
impact on the Company’s financial position, results of operations or cash
flows.
In
February 2008, the FASB issued SFAS No. 159, The Fair Value Option for Financial
Assets and Financial Liabilities (“SFAS 159”). SFAS 159 permits entities to
choose to measure many financial instruments and certain other items at fair
value. Unrealized gains and losses on items for which the fair value option has
been elected are reported in earnings. The adoption of SFAS 159 is not expected
to have a material impact on the Company’s financial position, results of
operations or cash flows.
In
December 2008, the FASB issued SFAS No. 141 (revised 2008), Business
Combinations (“SFAS 141R”). SFAS 141R replaces SFAS No. 141, Business
Combinations and changes how business acquisitions are accounted. SFAS 141R
requires the acquiring entity in a business combination to recognize all (and
only) the assets acquired and liabilities assumed in the transaction and
establishes the acquisition-date fair value as the measurement objective for all
assets acquired and liabilities assumed in a business combination. Certain
provisions of this standard will, among other things, impact the determination
of acquisition-date fair value of consideration paid in a business combination
(including contingent consideration); exclude transaction costs from acquisition
accounting; and change accounting practices for acquired contingencies,
acquisition-related restructuring costs, in-process research and development,
indemnification assets, and tax benefits. Most of the provisions of SFAS 141R
apply prospectively to business combinations for which the acquisition date is
on or after the beginning of the first annual reporting period beginning on or
after December 15, 2008. The adoption of SFAS 141R is not expected to have a
material impact on the Company’s financial position, results of operations or
cash flows.
In
December 2008, the FASB issued SFAS No. 160, Noncontrolling Interests in
Consolidated Financial Statements – an amendment of ARB No. 51 (“SFAS 160”).
SFAS 160, amends the accounting and reporting standards for the noncontrolling
interest in a subsidiary and for the deconsolidation of a subsidiary. Under SFAS
160, the noncontrolling interest in a subsidiary is reported as equity in the
parent company’s consolidated financial statements. SFAS 160 also requires that
the parent company’s consolidated statement of operations include both the
parent and noncontrolling interest share of the subsidiary’s statement of
operations. Formerly, the noncontrolling interest share was shown as a reduction
of income on the parent’s consolidated statement of operations. SFAS 160 is
effective for fiscal years, and interim periods within those years, beginning on
or after December 15, 2008. SFAS 160 is to be applied prospectively as of the
beginning of the fiscal year in which this statement is initially applied;
however, presentation and disclosure requirements shall be applied
retrospectively for all periods presented.
OFF-BALANCE SHEET
ARRANGEMENTS
We do not
have any off-balance sheet arrangements that have or are reasonably likely to
have a current or future effect on our financial condition, changes in financial
condition, revenues or expenses, results of operations, liquidity, capital
expenditures or capital resources that are material to our
investors.
3. DESCRIPTION OF
PROPERTY
Following
the Exchange, our address will be 405 River Oaks Parkway, San Jose, California
95134-1916, comprised of 3,000 square feet under a lease which expires in
January 31, 2011 at a monthly rental of $5,350.00.
4. SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The
following table summarizes certain information regarding the beneficial
ownership (as such term is defined in Rule 13d-3 under the Securities Exchange
Act of 1934) of outstanding Common Stock as of January 15, 2010 (after giving
effect to the Exchange) by (i) each person known by us to be the beneficial
owner of more than 5% of the outstanding Common Stock, (ii) each of our
directors, (iii) each of our named executive officers (as defined in Item 403(a)
of Regulation S-K under the Securities Act), and (iv) all executive officers and
directors as a group. Except as indicated in the footnotes below, the security
and stockholders listed below possess sole voting and investment power with
respect to their shares.
|
Name
and Address of Beneficial Owner
|
Amount
and Nature of Beneficial Owner (1)
|
Percent
of Class (2)
|
|
John
Hwang(3)
|
5,700,000
|
13%
|
|
Robert
Radoff
|
100,000
|
0.22%
|
|
Kenneth
Cheng (3),(4)
|
0
|
0%
|
|
Alizay
Consulting Ltd (3),(5)
|
5,700,000
|
13%
|
|
First
Atlantis Trading Corp.(3),(6)
|
5,250,000
|
12%
|
|
All
Directors and Executive Officers as a Group (1 person)
|
5,800,000
|
12.88%
|
(1)
"Beneficial Owner" means having or sharing, directly or indirectly (i) voting
power, which includes the power to vote or to direct the voting, or (ii)
investment power, which includes the power to dispose or to direct the
disposition, of shares of the common stock of an issuer. The definition of
beneficial ownership includes shares, underlying options or warrants to purchase
common stock, or other securities convertible into common stock, that currently
are exercisable or convertible or that will become exercisable or convertible
within 60 days. Unless otherwise indicated, the beneficial owner has sole voting
and investment power.
(2) For
each shareholder, the calculation of percentage of beneficial ownership is based
upon 45,000,000 shares of Common Stock outstanding as of January 15, 2010, and
shares of Common Stock subject to options, warrants and/or conversion rights
held by the shareholder that are currently exercisable or exercisable within 60
days, which are deemed to be outstanding and to be beneficially owned by the
shareholder holding such options, warrants, or conversion rights. The percentage
ownership of any shareholder is determined by assuming that the shareholder has
exercised all options, warrants and conversion rights to obtain additional
securities and that no other shareholder has exercised such rights.
(3) Does
not include 2,350,000 shares of the Company’s Series A Preferred Stock which is
convertible upon certain conditions into shares of the Company’s Common
Stock.
(4)
Includes options to purchase 5,500,000 shares of Common Stock at the purchase
price of $0.01 per share.
(5) The
address for Alizay Consulting Ltd. is 16850-112 Collins Avenue, Suite 199, Sunny
Isles Beach, Florida 33160.
(6) The
address for First Atlantis Trading Corp. is 239 McCarty Drive, Beverly Hills,
California 90212.
5.
DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS.
The
following table sets forth information regarding the members of the Company’s
board of directors and its executive officers. All of the Company’s executive
officers and directors were appointed on January 15, 2010, the effective date of
the Acquisition. All directors hold office until the first annual meeting of the
stockholders of the Company and until the election and qualification of their
successors or their earlier removal or retirement.
Officers
are elected annually by the board of directors and serve at the discretion of
the board.
|
Name
(1)
|
Age
|
Title
|
|
John
Hwang
|
47
|
Chief
Executive Officer, Director
|
|
Kenneth
Cheng
|
57
|
President,
Director
|
|
Robert
Radoff
|
42
|
Director
|
John Hwang, 47, Chief Executive
Officer, Director. Prior thereto and from 2002 through 2007,
Mr. Hwang was the Chairman of Techno Concepts, Inc., a developer and
manufacturer of wireless communications devices. Mr. Hwang also has
over twenty years’ corporate and entrepreneurial leadership experience in
semiconductor technology and consumer electronics. Mr. Hwang was
President of Osicom, a fiber optic and network technologies manufacturer from
1996 through 1998 and Executive Vice-President of Relialogic, from 1992 to 1996
and an Vice-President and Corporate Manger of Samsung America, Inc. from 1985 to
1991. At Samsung, Mr. Hwang helped launch Samsung’s new computer and
monitor division. Mr. Hwang received. Mr. Hqang receive a
Bachelor of Science Degree in Economics from Rutgers Uniersiyv.
Kenneth Cheng. 57, President,
Director. Prior thereto Mr. Cheng was the President and CEO of
AmbiCom Inc. Mr. Cheng has over 23 years of computer industry experience
in Data Communication and VLSI design, including roles as a VLSI Design Engineer
and Project Leader in industry pioneers Lucent Technologies, Chips &
Technologies and LSI Corporation. Mr. Cheng received a MSEE degree from
Oregon State University.
Robert Radoff, 42
Director. Mr. Radoff has created and managed a national broker
network, monitoring sales, distribution, packaging and setting up logistics of
new and existing products, setting objectives and goals for the sales force and
creating presentations to major accounts. He has also helped develop and sell
National Brand and private label and other brands to all accounts in the U.S.
and international markets. Mr. Radoff served active duty in the
United States Army from 1986-1990 and competed his reserve obligations through
1995.
AUDIT
COMMITTEE. The Company intends to establish an audit committee, which will
consist of independent directors. The audit committee's duties would be to
recommend to the Company's board of directors the engagement of independent
auditors to audit the Company's financial statements and to review its
accounting and auditing principles. The audit committee would review the scope,
timing and fees for the annual audit and the results of audit examinations
performed by the internal auditors and independent public accountants, including
their recommendations to improve the system of accounting and internal controls.
The audit committee would at all times be composed exclusively of directors who
are, in the opinion of the Company's board of directors, free from
any relationship which would interfere with the exercise of independent judgment
as a committee member and who possess an understanding of financial statements
and generally accepted accounting principles.
COMPENSATION
COMMITTEE: Our board of directors does not have a standing compensation
committee responsible for determining executive and director
compensation. Instead, the entire board of directors fulfills this
function, and each member of the Board participates in the determination.
Given the small size of the Company and its Board and the Company's
limited resources, locating, obtaining and retaining additional independent
directors is extremely difficult. In the absence of independent
directors, the Board does not believe that creating a separate compensation
committee would result in any improvement in the compensation determination
process. Accordingly, the board of directors has concluded that the
Company and its stockholders would be best served by having the entire board of
directors’ act in place of a compensation committee. When acting in this
capacity, the Board does not have a charter.
In
considering and determining executive and director compensation, our board of
directors review compensation that is paid by other similar public companies to
its officers and takes that into consideration in determining the compensation
to be paid to the Company’s officers. The board of directors also
determines and approves any non-cash compensation to any
employee. The Company does not engage any compensation consultants to
assist in determining or recommending the compensation to the Company’s officers
or employees.
6. EXECUTIVE
COMPENSATION
Summary
Compensation Table
The
following table sets forth all of the compensation awarded to, earned by or paid
to (i) each individual serving as our principal executive officer during our
last completed fiscal year; and (ii) each other individual that served as an
executive officer at the conclusion of the fiscal year ended December 31, 2008
and who received in excess of $100,000 in the form of salary and bonus during
such fiscal year (collectively, the Named Executives).
|
Name
and
Principal
Position
|
Year
|
Salary
|
Bonus
|
Option
Awards
|
Non-Equity
Incentive Plan Compensation
|
All
Other Compensation
|
Total
|
||||||||||||||||||
|
John
Hwang
|
2009
|
- | - | - | - | - | - | ||||||||||||||||||
|
Kenneth
Cheng
|
2009
|
- | - | - | - | - | - | ||||||||||||||||||
|
Robert
Radoff
|
2009
|
- | - | - | - | - | - | ||||||||||||||||||
|
Elaine
Mayumi Kato
|
2009
|
- | - | - | - | - | - | ||||||||||||||||||
|
2008
|
- | - | - | - | - | - | |||||||||||||||||||
|
2007
|
- | - | - | - | - | - | |||||||||||||||||||
Compensation
Policy: Our Company’s executive compensation plan is based on attracting
and retaining qualified professionals who possess the skills and leadership
necessary to enable our Company to achieve earnings and profitability growth to
satisfy our stockholders. We must, therefore, create incentives for these
executives to achieve both Company and individual performance objectives through
the use of performance-based compensation programs. No one component is
considered by itself, but all forms of the compensation package are considered
in total. Wherever possible, objective measurements will be utilized to quantify
performance, but many subjective factors still come into play when determining
performance.
Compensation
Components: As an early-stage development company, the main elements of
our compensation package consist of base salary, stock options and
bonus.
Base
Salary: As we continue to grow and financial conditions improve, these
base salaries, bonuses and incentive compensation will be reviewed for possible
adjustments. Base salary adjustments will be based on both individual and
Company performance and will include both objective and subjective criteria
specific to each executive’s role and responsibility with the
Company.
COMPENSATION
OF DIRECTORS
At this
time, directors receive no remuneration for their services as directors of the
Company, nor does the Company reimburse directors for expenses incurred in their
service to the Board of Directors. The Company does not expect to pay
any fees to its directors for the 2008 fiscal year.
EMPLOYMENT AGREEMENTS, TERMINATION OF
EMPLOYMENT AND CHANGE-IN-CONTROL ARRANGEMENTS
On
January 15, 2010, the Company entered into employment agreements with its two
executive officers, John Hwang and Kenneth Cheng,
Each
employment agreement provides for a three year term with minimum annual base
salary of $240,000. Under the agreement, Mr. Hwang will be subject to
customary non-competition and employee non-solicitation restrictions while he is
employed by the Company and for a period of 2 year(s) thereafter.
2010
Equity Plan
Before
the Closing Date, our Board and Stockholders approved and adopted the 2010
Equity Plan (the “2009 Plan”). A copy of the 2010 Plan is attached as Exhibit
[10.4] to this Current Report on Form 8-K.
The 2010
Plan is intended to promote the interests of the Company by attracting and
retaining exceptional employees, consultants, directors, officers and
independent contractors (collectively referred to as the “Participants”), and
enabling such Participants to participate in the long-term growth and financial
success of the Company. Under the 2010 Plan, the Company may grant stock
options, which are intended to qualify as “incentive stock options” under
Section 422 of the Internal Revenue Code of 1986, as amended (the “Incentive
Stock Options”), non-qualified stock options (the “Nonqualified Stock Options”),
stock appreciation rights (“SARs”) and restricted stock awards (the “Restricted
Stock Awards”), which are restricted shares of Common Stock (the Incentive Stock
Options, the Nonqualified Stock Options, the SARs and the Restricted Stock
Awards are collectively referred to as “Incentive Awards”). Incentive Awards may
be granted pursuant to the 2010 Plan for 10 years from the Effective
Date.
From time
to time, we may issue Incentive Awards pursuant to the 2010
Plan. Each of the awards will be evidenced by and issued under a
written agreement.
The Board
reserved a total of 2,277,778 shares of our Common Stock for issuance under the
2010 Plan. If an incentive award granted under the 2010 Plan expires,
terminates, is unexercised or is forfeited, or if any shares are surrendered to
us in connection with an incentive award, the shares subject to such award and
the surrendered shares will become available for further awards under the
Plan.
The
number of shares subject to the 2010 Plan, any number of shares subject to any
numerical limit in the 2009 Plan, and the number of shares and terms of any
Incentive Award may be adjusted in the event of any change in our outstanding
Common Stock by reason of any stock dividend, spin-off, stock split, reverse
stock split, recapitalization, reclassification, merger, consolidation,
liquidation, business combination or exchange of shares, or similar
transaction.
7. CERTAIN RELATIONSHIPS AND RELATED
TRANSACTIONS
Currently,
we have one independent director on our Board of Directors, and have no formal
procedures in effect for reviewing and pre-approving any transactions between
us, our directors, officers and other affiliates. We will use our best efforts
to insure that all transactions are on terms at least as favorable to the
Company as we would negotiate with unrelated third parties.
8. DESCRIPTION OF
SECURITIES
Common Stock
Number of
Authorized and Outstanding Shares:
The
Company's Amended and Restated Articles of Incorporation authorizes the issuance
of 1,050,000,000 shares of common stock, $.001 par value per share, of which
45,000,000 shares were outstanding on January 15, 2010.
Voting
Rights:
Holders
of shares of Common Stock are entitled to one vote for each share on all matters
to be voted on by the stockholders. Holders of Common Stock have no cumulative
voting rights. Accordingly, the holders of in excess of 50% of the aggregate
number of shares of Common Stock outstanding will be able to elect all of the
directors of the Company and to approve or disapprove any other matter submitted
to a vote of all stockholders.
Other:
No
shareholder has any preemptive right or other similar right to purchase or
subscribe for any additional securities issued by the Company, and no
shareholder has any right to convert the common stock into other securities. No
shares of common stock are subject to redemption or any sinking fund provisions.
All the outstanding shares of the Company's common stock are fully paid and
non-assessable. Subject to the rights of the holders of the preferred stock, if
any, the Company's shareholders of common stock are entitled to dividends when,
as and if declared by the Board from funds legally available therefore and, upon
liquidation, to a pro-rata share in any distribution to shareholders. The
Company does not anticipate declaring or paying any cash dividends on the common
stock in the foreseeable future.
Preferred
Stock
The
Company's Amended Articles of Incorporation authorizes the issuance of
50,000,000 shares of Preferred Stock, par value $0.001 per share, subject to any
limitations prescribed by law, without further vote or action by the
stockholders, to issue from time to time shares of preferred stock in one or
more series. Each such series of Preferred Stock shall have such number of
shares, designations, preferences, voting powers, qualifications, and special or
relative rights or privileges as shall be determined by the Company's board of
directors, which may include, among others, dividend rights, voting rights,
liquidation preferences, conversion rights and preemptive rights.
Series A Convertible
Preferred Stock
The Company has authorized a total of 9,400,000 shares
of Series A Convertible Preferred Stock (the “Series A”). The Series
A is convertible at any time into shares of the Company’s common stock at the
conversion rate of one share of Common
Stock per each share of Series A converted. If the Company reports net income in two of
the following four years following the Exchange, the Series A shall be
convertible into Common Stock at the conversion rate of two shares of Common
Stock per each share of Series A converted. The Series A is treated
on an “as converted” basis for both voting and liquidation rights. There are
currently 7,050,000 shares of Series A outstanding and options to acquire an
options to purchase an additional 2,350,000 shares of Series A issued and
outstanding.
6% Series B Convertible,
Redeemable Preferred Stock
The
Company has authorized a total of 2,600,000 shares of 6% Series B Convertible,
Redeemable Preferred Stock (the “Series B”). The Series B accrues annual dividends at the rate of 6%
per year in shares of Common Stock at the dividend conversion rate of
$1.00. The Series B, together with any unpaid dividends, is
convertible at any time into shares of the Company’s common stock at the
conversion rate of one share of Common Stock per each share of Series B
converted. Following the second anniversary of the Exchange, the
Series B, together with any unpaid dividends, shall be convertible into Common
Stock at the conversion price of forty cents ($0.40) or seventy percent (70%) of
the daily volume weighted average price of the Common Stock wo shares of Common Stock for the twenty trading days
immediately prior to the conversion. The Series B is redeemable by
the Company, at any time prior to December 31, 2015, in cash at the redemption
rate of $1.00 per share of Series B plus any accrued and unpaid
dividends. On December 31, 2015, all outstanding shares of
Series B shall be redeemed by the Company at a per share redemption price equal
to $1.00 per share of Series B plus an amount of Common Stock equal to the
amount of the accrued and unpaid dividend thereon. The Series B has a
liquidation preference of $2,600,000 and ranks prior to the Series A and the Common Stock. The Series
B votes on an “as converted” basis. There are currently rights to
receive 2,600,000 shares of Series B outstanding.
Options
As of
January 15, 2010, there were options outstanding to purchase 5,500,000 shares of
Common Stock and 2,350,000 shares of Series A Preferred Stock at a purchase
price of $.01 per share. Under the terms of the 2010 Plan, the
Company may issue incentive awards that may include the issuance of an
additional 2,277,778 shares of Common Stock.
Transfer Agent
Shares of
Common Stock are registered at the transfer agent and are transferable at such
office by the registered holder (or duly authorized attorney) upon surrender of
the Common Stock certificate, properly endorsed. No transfer shall be registered
unless the Company is satisfied that such transfer will not result in a
violation of any applicable federal or state securities laws. The Company's
transfer agent for its Common Stock is Signature Stock Transfer Inc., 2632
Coachlight Count, Plano, Texas 75093, Telephone (972)
612-4120.
Penny Stock
The
Commission has adopted rules that define a “penny stock” as equity securities
under $5.00 per share which are not listed for trading on Nasdaq (unless the
issuer (i) has a net worth of $2,000,000 if in business for more than three
years or $5,000,000 if in business for less than three years or (ii) has had
average annual revenue of $6,000,000 for the prior three years). The
Company's securities are characterized as penny stock, and therefore
broker-dealers dealings in the securities are subject to the disclosure rules of
transactions involving penny stock which require the broker-dealer, among other
things, to (i) determine the suitability of purchasers of the securities and
obtain the written consent of purchasers to purchase such securities and (ii)
disclose the best (inside) bid and offer prices for such securities and the
price at which the broker-dealer last purchased or sold the securities. The
additional requirements imposed upon broker-dealers discourage them from
engaging in transactions in penny stocks, which reduces the liquidity of the
Company's securities. The Company's common stock is currently quoted on the OTC
Bulletin Board under the symbol MCNC.OB.
PART II.
1. MARKET
INFORMATION
Currently
the Company’s common shares are listed on the Over-the-Counter Bulletin Board
(OTCBB) under the ticker symbol “MCNC”. However, as of the date of
this report there have been no trading activities in the Company’s common
stock. There can be no assurance that a market will ever develop in
the Company’s common stock in the future. If a market does not
develop then investors would be unable to sell any of the Company’s common stock
likely resulting in a complete loss of any funds therein invested.
Since our
inception, we have not paid any dividends on our Common Stock, and we do not
anticipate that we will pay any dividends in the foreseeable future. We intend
to retain any future earnings for use in our business. At January 15,
2010, we had approximately 74 shareholders of record.
2. LEGAL
PROCEEDINGS
The
Company is not a party to any pending legal proceedings.
No
director, officer, or affiliate of the Company and no owner of record or
beneficial owner of more than 5.0% of the securities of the Company, or any
associate of any such director, officer or security holder is a party adverse to
the Company or has a material interest adverse to the Company in reference to
pending litigation.
3. CHANGES IN AND DISAGREEMENT WITH
ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
Not
applicable.
4. RECENT ISSUANCES OF
UNREGISTERED SECURITIES BY THE REGISTRANT
Since
inception of the Company in November 29, 2006, we have sold unregistered
securities to the following shareholders.
On July
22, 2007 we issued 6,000,000 shares of Common Stock to Elaine Mayumi
Kato, who at the time was the Registrant’s sole officer and director in exchange
of the payment of $6,000, or $0.001 per share.
On
January 15, 2010, the Registrant authorized the issuance of 20,000,000 shares of
Common Stock, 7,050,000 shares of Series A Preferred Stock, 2,600,000 shares of
Series B Preferred Stock, options to purchase 5,500,000 shares of Common Stock
and 2,350,000 shares of Series A Preferred Stock at the purchase price of $0.01
per share and warrants to purchase 500,000 shares of Common Stock at the
exercise price of $0.50 per share, in connection with the execution of an
Agreement and Plan of Share Exchange with the equityholders of AmbiCom
Acquisition Corp. (the “Exchange”).
On
January 15, 2010, the Registrant sold 1,250,000 shares of Common Stock at the
price of $0.40 per share for an aggregate offering of $500,000.
Except as
noted above, the sales of the securities identified above were made pursuant to
privately negotiated transactions that did not involve a public offering of
securities and, accordingly, we believe that these transactions were exempt from
the registration requirements of the Securities Act pursuant to Section 4(2)
thereof and rules promulgated thereunder. Each of the above-referenced investors
in our stock represented to us in connection with their investment that they
were “accredited investors” (as defined by Rule 501 under the Securities Act)
and were acquiring the shares for investment and not distribution, that they
could bear the risks of the investment and could hold the securities for an
indefinite period of time. The investors received written disclosures that the
securities had not been registered under the Securities Act and that any resale
must be made pursuant to a registration or an available exemption from such
registration. All of the foregoing securities are deemed restricted securities
for purposes of the Securities Act.
5. INDEMNIFICATION OF OFFICERS AND
DIRECTORS
Nevada
Revised Statutes (“NRS”) Sections 78.7502 and 78.751 provide the Company with
the power to indemnify any of our directors and officers. The director or
officer must have conducted himself/herself in good faith and reasonably believe
that his/her conduct was in, or not opposed to our best interests. In a criminal
action, the director, officer, employee or agent must not have had reasonable
cause to believe his/her conduct was unlawful.
Under NRS
Section 78.751, advances for expenses may be made by agreement if the director
or officer affirms in writing that he/she believes he/she has met the standards
and will personally repay the expenses if it is determined such officer or
director did not meet the standards.
Pursuant
to the Company’s Articles of Incorporation and bylaws, we may indemnify an
officer or director who is made a party to any proceeding, because of his
position as such, to the fullest extent authorized by Nevada Revised Statutes,
as the same exists or may hereafter be amended. In certain cases, we may advance
expenses incurred in defending any such proceeding.
To the
extent that indemnification for liabilities arising under the Securities Act may
be permitted to directors, officers or persons controlling our company pursuant
to the foregoing provisions, we have been informed that, in the opinion of the
SEC, such indemnification is against public policy as expressed in the
Securities Act and is therefore unenforceable. If a claim for indemnification
against such liabilities (other than the payment by us of expenses incurred or
paid by a director, officer or controlling person of our company in the
successful defense of any action, suit or proceeding) is asserted by any of our
directors, officers or controlling persons 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 us is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of that issue.
Anti-Takeover
Effects of Provisions of Nevada State Law
We may be
or in the future we may become subject to Nevada's control share law. A
corporation is subject to Nevada's control share law if it has more than 200
stockholders, at least 100 of whom are stockholders of record and residents of
Nevada, and if the corporation does business in Nevada or through an affiliated
corporation.
The law
focuses on the acquisition of a “controlling interest” which means the ownership
of outstanding voting shares is sufficient, but for the control share law, to
enable the acquiring person to exercise the following proportions of the voting
power of the corporation in the election of directors: (1) one-fifth or more but
less than one-third, (2) one-third or more but less than a majority, or (3) a
majority or more. The ability to exercise such voting power may be direct or
indirect, as well as individual or in association with others.
The
effect of the control share law is that the acquiring person, and those acting
in association with that person, obtain only such voting rights in the control
shares as are conferred by a resolution of the stockholders of the corporation,
approved at a special or annual meeting of stockholders. The control share law
contemplates that voting rights will be considered only once by the other
stockholders. Thus, there is no authority to take away voting rights from the
control shares of an acquiring person once those rights have been approved. If
the stockholders do not grant voting rights to the control shares acquired by an
acquiring person, those shares do not become permanent non-voting shares. The
acquiring person is free to sell its shares to others. If the buyers of those
shares themselves do not acquire a controlling interest, their shares do not
become governed by the control share law.
If
control shares are accorded full voting rights and the acquiring person has
acquired control shares with a majority or more of the voting power, any
stockholder of record, other than an acquiring person, who has not voted in
favor of approval of voting rights, is entitled to demand fair value for such
stockholder's shares.
Nevada's
control share law may have the effect of discouraging corporate
takeovers.
In
addition to the control share law, Nevada has a business combination law, which
prohibits certain business combinations between Nevada corporations and
"interested stockholders" for three years after the "interested stockholder"
first becomes an "interested stockholder" unless the corporation's board of
directors approves the combination in advance. For purposes of Nevada law, an
"interested stockholder" is any person who is (1) the beneficial owner, directly
or indirectly, of ten percent or more of the voting power of the outstanding
voting shares of the corporation, or (2) an affiliate or associate of the
corporation and at any time within the three previous years was the beneficial
owner, directly or indirectly, of ten percent or more of the voting power of the
then outstanding shares of the corporation. The definition of the term "business
combination" is sufficiently broad to cover virtually any kind of transaction
that would allow a potential acquirer to use the corporation's assets to finance
the acquisition or otherwise to benefit its own interests rather than the
interests of the corporation and its other stockholders.
The
effect of Nevada's business combination law is to potentially discourage parties
interested in taking control of the Company from doing so if it cannot obtain
the approval of our Board of Directors.
ITEM
5.01 CHANGES IN CONTROL OF REGISTRANT.
For a
description of the change of control and the material agreements entered into in
connection therewith, please see Item 2.01 of this Current Report on Form 8-K,
which discussion is incorporated herein by reference.
ITEM 5.02 DEPARTURE OF DIRECTORS OR
PRINCIPAL OFFICERS; ELECTION OF DIRECTORS; APPOINTMENT OF PRINCIPAL
OFFICERS:
On
January 15, 2010, Ms. Elaine Mayumi Kato resigned from her role as the
Registrant’s sole principal officer and director. John Hwang and
Kenneth Cheng were elected as the Registrant’s officers. Mr.
Hwang, Mr. Cheng and Mr. Robert Radoff are the Registrant’s
directors.
ITEM 5.06 CHANGE IN SHELL COMPANY
STATUS:
As
described in Item 2.01 above, which is incorporated by reference into this Item
5.06, we ceased being a shell company (as defined in Rule 12b-2 under the
Exchange Act of 1934, as amended) upon completion of the Exchange.
PART III.
ITEM 9.01
FINANCIAL STATEMENTS AND EXHIBITS.
(a)
Financial statements: As
a result of the Exchange described in Item 2.01, the registrant is filing the
audited financial statement information of AmbiCom Acquisition Corp.’s principal
operating subsidiaries, AmbiCom, Inc. as Exhibit 99.1 to this Current Report on
Form 8-K.
(b)
Pro forma financial
information: The unaudited pro forma consolidated financial information
regarding the registrant and AmbiCom Acquisition Corp. is attached to this
Current Report as Exhibit 99.4.
(c) Shell company transactions:
Reference is made to the disclosure set forth under Item 2.01 of this
Current Report on Form 8-K, which disclosure is incorporated herein by
reference.
(d)
Exhibits:
|
Exhibit
|
Description
|
|
|
Agreement
and Plan of Share Exchange, by and among Med Control, Inc., AmbiCom
Acquisition Corp., and the Shareholders of AmbiCom Acquisition Corp. dated
as of January 15, 2010.
|
||
|
Amended
and Restated Articles of Incorporation of Med Control,
Inc.
|
||
|
Amended
By-Laws of Med Control, inc.
|
||
|
Certificate
of Designation of Rights and Preferences of Series A Preferred
Stock
|
||
|
Certificate
of Designation of Rights and Preferences of 6% Series B Convertible,
Redeemable Preferred Stock
|
||
|
Articles
of Incorporation of AmbiCom Acquisition Corp.
|
||
|
By-laws
of AmbiCom Acquisition Corp.
|
||
|
Form
of Subscription Agreement of Med Control, Inc.
|
||
|
Form
of Warrant
|
||
|
Lock-Up
Leakout Agreement
|
||
|
Employment
Agreement between Med Control, Inc. and John Hwang dated January 15,
2010.
|
||
|
Employment
Agreement between Med Control, Inc. and Kenneth Cheng dated January 15
2010.
|
||
|
Stock
Purchase Agreement between AmbiCom Acquisition Corp. and. AmbiCom, Inc.
dated May 21, 2009
|
||
|
2010
Equity Incentive Plan
|
||
|
Split
Off Agreement between Med Control, Inc., Eliane Mayumi Kato and MCI
Acquisition Corp
|
||
|
Subsidiaries
of AmbiCom, Inc.
|
||
|
Audited
financial statements of AmbiCom Inc. for the period ended December 31,
2008.
|
||
|
Unaudited
Pro Forma Consolidated Financial
Statements
|
SIGNATURES
In
accordance with the requirements of the Exchange Act, the registrant caused this
report to be signed on its behalf by the undersigned, thereunto duly
authorized.
|
MED
CONTROL, INC.
|
|
|
Date:
January 21, 2010
|
/s/
John Hwang
|
|
By:
John Hwang, Chief Executive Officer
|