Attached files
As filed with the Securities and Exchange Commission on October 20, 2010
Registration No. 333-168930
================================================================================
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-1/A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
VANTAGE HEALTH
(Exact name of registrant as specified in its charter)
Nevada 2834 98-0659770
(State or jurisdiction of (Primary Standard Industrial (IRS Employer
incorporation or organization) Classification Code Number) Identification Number)
C/O Steven T Lowe Esq Business Filings Incorporated
Suite 640 311 S Division St
11400 West Olympic Boulevard Carson City NV, 89703
Los Angeles, California 90064-1567 Tel: (949) 487-2436
(310) 477-5811
With a Copy to:
Scott P. Doney, Attorney at Law 3273 E. Warm Springs Las Vegas, NV 89120
telephone (702) 312-6255
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
From time to time after this Registration Statement is declared effective.
(Approximate date of commencement of proposed sale to the public)
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box [X}
If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(d) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
Indicate by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
definitions of "large accelerated filer," "accelerated filer," and "smaller
reporting company: in Rule 12b-2 of the Exchange Act (Check one):
Large accelerated filer [ ] Accelerated Filer [ ]
Non-accelerated filer [ ] Smaller reporting company [X]
(Do not check if a Smaller reporting company)
CALCULATION OF REGISTRATION FEE
================================================================================
Title of Each Proposed Proposed
Class of Maximum Maximum
Securities Offering Aggregate Amount of
to be Amount to be Price Per Offering Registration
Registered Registered Share (1) Price Fee
--------------------------------------------------------------------------------
Common Stock 22,009,375(2) $0.003 per share $66,028.12 $4.71
================================================================================
(1) Estimated solely for the purpose of calculating the registration fee in
accordance with Rule 457 under the Securities Act.
2. Includes 7,859,375 shares of common stock issuable upon the exercise of
warrants.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE
A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF THE
SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SECTION 8(a), MAY
DETERMINE.
================================================================================
SUBJECT TO COMPLETION
PROSPECTUS
VANTAGE HEALTH
14,150,000 SHARES
COMMON STOCK
The selling shareholders named in this prospectus are offering all of the shares
of common stock offered through this prospectus for a period of up to two years
from the effective date.
Our common stock is presently not traded on any market or securities exchange.
THE PURCHASE OF THE SECURITIES OFFERED THROUGH THIS PROSPECTUS INVOLVES A HIGH
DEGREE OF RISK. SEE SECTION ENTITLED "RISK FACTORS" BEGINNING ON PAGE 10 OF THIS
PROSPECTUS.
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY
NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER
TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY THESE
SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
The selling shareholders named in this prospectus are offering up to 22,009,375
shares of common stock, which includes 7,859,375 shares issuable upon exercise
of warrants to purchase shares of common stock through this prospectus. The
14,150,000 shares of common stock offered by the selling shareholders represent
19.1% of the total outstanding shares as of the date of this prospectus. We will
not receive any proceeds from this offering. We will, however, receive
$23,578,125 through the exercise of warrants should all outstanding warrants be
exercised at the exercise price of $3.00 per share.
Underwriting
Offering Discounts and Proceeds to
Price Commissions Selling Shareholders
----- ----------- --------------------
Per Share $ 0.003 None $ 0.003
Total $42,450 None $42,450
Our common stock is presently not traded on any market or securities exchange.
The sales price to the public is fixed at $0.003 per share until such time as
the shares of our common stock are traded on the OTC Bulletin Board electronic
quotation service. We intend to obtain quotation of our common stock on the OTC
Bulletin Board upon the effectiveness of the registration statement, of which
this prospectus forms a part. However, we can provide investors with no
assurance that our shares will be quoted on the OTC Bulletin Board or, if
quoted, that a public market will materialize. In order to obtain quotation on
the OTC Bulletin Board our company will be required to procure the sponsorship
of a registered market maker. There is no guarantee that we will ever obtain the
sponsorship of a market maker and as a result may be unable to quote our common
stock on the OTC Bulletin Board. If our common stock becomes traded on the OTC
Bulletin Board electronic quotation service, then the sale price to the public
will vary according to prevailing market prices or privately negotiated prices
by the selling shareholders. If no market is ever developed for our shares, it
will be difficult for shareholders to sell their stock
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE
ADEQUACY OR ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
The information in this prospectus is not complete and may be changed. We may
not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. The prospectus is not an offer
to sell these securities and is not soliciting an offer to buy these securities
in any state where the offer or sale is not permitted.
THE DATE OF THIS PROSPECTUS IS: OCTOBER 20, 2010
TABLE OF CONTENTS
PAGE
----
Summary 3
Risk Factors 10
Forward-Looking Statements 15
Use of Proceeds 16
Determination of Offering Price 16
Dilution 16
Selling Shareholders 16
Plan of Distribution 19
Description of Securities 22
Interest of Named Experts and Counsel 24
Description of Business 24
Market for Common Equity and Related Stockholder Matters 49
Plan of Operation 50
Changes in and Disagreements with Accountants 55
Directors, Executive Officers, Promoters and Control Persons 56
Executive Compensation 58
Security Ownership of Certain Beneficial Owners and Management 59
Certain Relationships and Related Transactions 60
Disclosure of Commission Position of Indemnification for Securities
Act Liabilities 61
Financial Statements 62
2
SUMMARY
Our auditors have issued a going concern opinion. This means that there is
substantial doubt that we can continue as an ongoing business for the next
twelve months. The financial statements do not include any adjustments that
might result from the uncertainty about our ability to continue in business. We
have suffered operating losses since our inception. As such we may have to cease
operations and you could lose your investment.
As used in this prospectus, unless the context otherwise requires, "we", "us",
"our" "Vantage Health" or "Vantage " refers to Vantage Health All dollar amounts
in this prospectus are in U.S. dollars unless otherwise stated. The following
summary is not complete and does not contain all of the information that may be
important to you. Prospective investors are urged to read the entire prospectus
before making an investment decision to purchase our common shares.
Vantage Health owns a 51% interest in Moxisign (PTY) Ltd. ("Moxisign"), a
company incorporated in South Africa. Through our control of Moxisign we intend
to build and operate an Active Pharmaceutical Ingredients ("APIs") manufacturing
plant alongside a formulation and packaging plant in South Africa to meet the
growing market needs for Antiretrovirals ("ARVs") in South Africa and
potentially other African countries for the treatment of HIV/AIDS. Vantage
Health is the parent company that owns 51% of Moxisign a South African
registered company as only South African registered companies are entitled to
bid at SA government tenders , this company also needs to be at least 30% owned
by a Broad Based Black Economic Empowerment (BBBEE) equity in order to qualify
for government tenders. Currently both Vantage and Moxisign are preparing for
the next government tender and sourcing the necessary technology partner and
operational team to coordinate the project.
Moxisign initially intends to bid at the goverment tender and if successful
build a relationship with a technology partner to start the process of building
a manufacturing plant for ARV's in South Africa. The revenue generated from the
initial supply contract of fully formulated ARV's will be utilized to partly
fund the project. Initially we will be reliant on our technology partners
support and expertise. By having n initial supply agreement with our technology
partner will enable both parties to assess the feasibility of this project. If
Moxisign is successful at the tender it should illustrate to our technology
partner that this business model is viable as the market for our product will be
the SA government.
TENDER PROCESS
In the SA government tenders these tenders are normally advertised in the
government tender bulletins , gazettes and also in the national press. These
tenders permit companies that are registered in South Africa to submit a bid
these companies must also satisfy the government requirement of being at least
30% BBBEE. Moxisign fulfils all the criteria required to bid at government
tenders. The government lists the products it requires and invites bids on
these. The general conditions of the tender as well as special conditions
specific to each tender , these will highlight how the tender will be awarded
(ie points system used) and upon which criteria . This point system is then
reviewed for each submission by the tender bid adjudicating committee who then
advertises the successful candidates. These companies then have to make
3
delivery of the product within the specified time in the conditions, otherwise
they will be penalized , should they fail to deliver then the tender may be
awarded to another company. The government may indicate in the tender that it
reserves the right to recall the tender under certain conditions. The last
tender advertised was the 2008 tender reissued in 2010 which required ARV's incl
TDF but no Fixed Drug Combinations (FDC) of ARV's which included TDF, for
example the last tender required roughly 500,000 tablets per month of TDF, but
no FDC's. Moxisign did not wish to bid for this month to month tender and now
wants to concentrate on the FDC tender that will be announced next. The minimum
proportion of the next tender that would make it a viable business for Moxisign
would be 10 % of the tender assuming the tender is for roughly Rand 3.8 Billion
per annum then if were successful in winning 10% of this tender this would make
it attractive to our Technology partner to commit to the manufacturing plant in
South Africa.Specifically a 10% award would be roughly equal to US$54 million
which would generate approx imately $11million in cashflow to the company. There
is a reasonable expectation that this sum would be adequate to arrange bank
financing to fund in full the $20 million cost of building an API manufacturing
plant Information regarding the tender is appended below
SUBMISSION OF PROPOSAL: (3-6 WEEKS)
In July 2010, the South African government advertised on its tender website a
reissued tender ( same as last tender in 2008) but on this occasion a month to
month tender for duration of two years-.It stated that tender may be recalled or
changed to allow the government to align itself with current treatment
guidelines. The tender is for an abbreviated period due to the fact that the
Department of Health (DOH) we believe has expressed a desire to change the ARV
of choice in keeping with current WHO Guidelines and possibily enter into
longer-term arrangements with pharmaceutical manufacturing companies who are
committed to local API manufacture. The pharmaceutical companies who are
successful at this tender may ultimately form a closed pool of bidders, who
potentially may only need to negotiate new pricing for supply of ARV's every
twelve months, for a period of ten years, rather than having to resubmit tenders
every two years.
The company understands the South African government closed the tender
advertisement before the end of August 2010 but as a result of the Public
Servants strike in South Africa during the month of September 2010 the tender
has not still been awarded, this announcement has been delayed til Feb-March
2011. Moxisign had completed a bid package but did not submit a bid at tender as
this tender was merely the old tender and was only for a month to month basis.
It was not the new anticipated tender for the fixed drug combinations in keeping
with the proposal of Prof Ventner of the SA HIV Clinicians Society and the WHO
recommendations which has suggested the new treatment protocols for HIV/AIDS
should be for Fixed drug combinations of ARV's. This is also the treatment of
choice recommended by the WHO see HAART guidelines below. Once the next tender
for FDC is advertised we believe this to be early next year although there is no
certainity to this , Moxisign intends to bid with the intent of being awarded a
material proportion of the new ARV supply tender in South Africa
4
APPROVAL PROCESS: (12-16 WEEKS)
Once a bid has been submitted to the South African government the Company
believes the decision making process will take between 12-16 weeks for the
proposals to be reviewed and supply contracts to be awarded.
SIGN TECHNOLOGY PARTNERSHIP AGREEMENT (8-12 WEEKS SIMULTANEOUS WITH APPROVAL
PROCESS)
Moxisign intends to sign a technology partnership agreement for the delivery of
formulated drugs initially with either a Chinese and/ or Indian Pharmaceutical
company ie whoever has the ARV's already produced and can be registered with the
MCC, later extending to the supply agreement for APIs for the manufacture of
ARV's in Africa, most likely with a Chinese pharmaceutical company as most
Indian pharmaceutical companies are not keen to expand into Africa. It should be
noted that the main Indian pharmaceutical companies currently supplying the
South African government and DOH actually import their APIs from Chinese
manufacturers. Moxisign's management believes that a direct relationship with
Chinese manufacturers will result in increased profitability. Moxisign has
signed an exclusive supply agreement with Amol on Sept 9th 2010 .This is to
supply formulated ARV's for government tenders in SA. Copy of this is appended .
Amol is a leading pharmaceutical company based in India. Moxisign is also in the
process of signing a Joint Venture Participation and supply contract with
Sinopharm. A Chinese state owned Pharamceutical company. These initial supply
agreements will pertain to supplying formulated ARV's for the purpose of bidding
at the government tenders, as both our technology partners have intimated that
we show that we have the ability to win government tenders, If Moxisign is
awarded a material proportion of the tender for the supply of formulated ARV's
from foreign companies then it should reassure these foreign companies that the
project to produce ARV's in SA would be viable. The SA government would provide
a demand for local production of ARV's. Hence our technology partner would
consider the risk in building a manufacturing plant in SA diminished. Our
management is competent to conduct the operations contemplated by the business
plan as we have significant expertise in manufacturing plant operations headed
by Mr N Tannenberger.
BEGIN DISTRIBUTION OPERATIONS: (12 MONTHS)
If Moxisign is successful in obtaining a material portion of the next 2010 ARV
tender for Fixed Drug combiations and comes to an agreement with either a
Chinese or Indian technology provider, who can supply formulated ARV's we expect
to begin distribution operations. This will entail purchasing the pre-packaged
ARV products from our technology partner and distributing them to the South
African market. Moxisign will act as a medium between the foreign pharmaceutical
supplier and the domestic market for the initial 24 month tender. This period
will allow Moxisign sufficient time to establish a joint venture agreement with
either a Chinese or Indian technology partner to produce ARV's from API in South
Africa and commence commissioning of a formulation plant for ARV initially with
a view towards an API production facility eventually.
5
EXERCISING OF WARRANTS/COMPLETION OF FINANCING (12-16 WEEKS)
If we are successful in obtaining a material portion of the next 2010 tender we
expect to raise capital through the exercising of warrants and through the
completion of a public offering. We expect to complete the public offering
within 16 weeks after the effectiveness of our registration statement and given
we can obtain a material portion of the next 2010 tender.
The Company will have capital requirements of $20,000,000 in order to make 350
tonnes of ARV APIs (Active Pharmaceutical Ingredients) per annum. This capital
will be utilized for operating capital of $5,000,000 including the purchase of
formulated ARV's for the initial supply agreement and $15,000,000 for the
construction of the manufacturing plant for ARV's.The 350 tonnes per annum is
only an assumption at this point and could change based on the size of the
tender awarded to Moxisign, if any at all. We plan to obtain capital in three
ways:
1- Through retained earnings from the first two years of operations from the
supply contract with a technology partner
2- Current share holders exercising warrants
3- Selling additional common shares.
Issuances of additional shares will result in dilution to our existing
shareholders. We currently do not have any material reason to believe our share
price will reach a level where warrant holders will be willing to exercise
warrants. There is no assurance that we will be successful in completing any
equity financing.
ESTABLISH A PHARMACEUTICAL PLANT FOR FORMULATION OF ARV (8 TO 12 MONTHS)
If we are able to raise the required capital the company intends to construct a
pharmaceutical plant in South Africa. The capital requirements for the facility
are estimated by management to be approximately $5,000,000 for a formulation
plant . A formulation and packaging plant is one that merely combines the API's
sourced from overseas to produce ARV's and then packages and labels the
product,.Whereas the API plant produces the API from the fine chemicals these
can be sourced locally or from overseas. Ideally these are often situated next
to each other The Manufacturing plant would be a joint venture between Moxisign
and the Technology partner as well as the formulation/packaging plant, Moxisign
would aim to have the controlling share . The 8 to 12 month period would include
the commissioning of the facility as well as the necessary Medicines Control
Council of South Africa (MCC) Approvals. Comments from the Medicines Control
Council of South Africa could cause additional delays and costs.
SUBMISSION OF AND APPROVAL OF POST 2010 PROPOSAL:
If Moxisign is successful in establishing a pharmaceutical/formulation plant and
is into the first year of the initial 24 month tender, the company will then
submit a proposal for the second 2012 tender. The Company believes the tender
process may again take between 12-16 weeks for the proposals to be reviewed and
supply contracts to be awarded but we are assuming the second 2012 tender will
be for a substantially longer period of up to 10 years, although there can be no
assurance of this
6
CONSTRUCT AN API FACILITY: (12-18 MONTHS)
The development of an API facility will take place if the Company is successful
in obtaining a material portion of the long-term tender is expected to be
advertised in July 2012. This production facility will be added to the
formulation plant which will require necessary EIA, MCC and Government
approvals. The capital requirements for the facility are estimated by management
to be $15,000,000 to $20,000,000. The 12-18 month period includes the
construction of the plant, stability testing for the newly formulated drug and
regulatory approvals for MCC and Department of Health including inspection to
assess the facility is cGMP and GLP approved There is a possibility of
additional costs and delays due to EIA and government review.
BEGIN PRODUCTION:
This new API production facility will have the state of the art technology to
produce API from fine chemicals. This facility will be similar to newer plants
currently being built in Vietnam which will enable the production facility to
switch from the production of a particular API to an alternate compound without
requiring complete overhaul of the plant. Thus if the drug of choice for the
treatment of HIV/AIDS changes it will allow greater flexibility. The production
initially will rely on the importation of fine chemicals from China with
technical assistance and expertise from our technology partners.
At our year end, June 30, 2010 we had assets of $144,383 made up completely of
cash, and a net loss of $6,627. Our current monthly burn rate is approximately
$1,500 and is expected to increase significantly once operations begin. Up to
We were incorporated on April 21, 2010 under the laws of the state of Nevada.
Our principal offices are located at Suite 640, 11400 West Olympic Boulevard,
Los Angeles, California 90064-1567. Our telephone number is (310) 477-5811.
THE OFFERING:
Securities Being Offered Up to 22,009,375 shares of common stock,
including 7,859,375 shares of common stock
issuable upon the exercise of warrants.
Offering Price The selling shareholders will sell our shares at
a fixed price of $0.003 per share unless and
until our shares are quoted on the OTC Bulletin
Board.
There is no public market for our common stock.
We cannot give any assurance that the shares
offered will have a market value, or that they
can be resold at the offered price if and when an
active secondary market might develop, or that a
public market for our securities may be sustained
even if developed. The absence of a public market
for our stock will make it difficult to sell your
shares in our stock.
We intend to apply to the OTC Bulletin Board,
through a market maker that is a licensed broker
dealer, to allow the trading of our common stock
upon our becoming a reporting entity under the
Securities Exchange Act of 1934. If our common
stock becomes so traded and a market for the
stock develops, the actual price of stock will be
determined by prevailing market prices at the
time of sale or by private transactions
negotiated by the selling shareholders. The
offering price would thus be determined by market
factors and the independent decisions of the
selling shareholders.
7
Terms of the Offering The selling shareholders will determine when and
how they will sell the common stock offered in
this prospectus.
Termination of the Offering The offering will conclude when all of the
22,009,375 shares of common stock have been sold,
the shares no longer need to be registered to be
sold due to the operation of Rule 144 or we
decide at any time to terminate the registration
of the shares at our sole discretion but in no
event later than two years from the effective
date of this registration statement. ( Date of
expiration will be provided for this continuous
offering once known)
Securities Issued and
to be Issued 74,150,000 shares of our common stock are issued
and outstanding as of the date of this
prospectus. All of the common stock to be sold
under this prospectus will be sold by existing
shareholders.
Use of Proceeds We will not receive any proceeds from the sale of
the common stock by the selling shareholders.
Registration Rights We have not granted registration rights to the
selling shareholders or to any other persons.
We are paying the expenses of the offering
because we seek to: (i) become a reporting
company with the Commission under the Securities
Exchange Act of 1934; and (ii) enable our common
stock to be traded on the OTC Bulletin Board. We
plan to file a Form 8-A registration statement
with the Commission subsequent to the
effectiveness of the Form S-1 registration
statement. The filing of the Form 8-A
registration statement will cause us to become a
reporting company with the Commission under the
1934 Act. We must be a reporting company under
the 1934 Act in order that our common stock is
eligible for trading on the OTC Bulletin Board.
We believe that the registration of the resale of
shares on behalf of existing shareholders may
facilitate the development of a public market in
our common stock if our common stock is approved
for trading on a recognized market for the
trading of securities in the United States.
We consider that the development of a public
market for our common stock will make an
investment in our common stock more attractive to
future investors. We believe that obtaining
reporting company status under the 1934 Act and
trading on the OTC Bulletin Board should increase
our ability to raise these additional funds from
investors.
8
SUMMARY FINANCIAL INFORMATION
* Moxisign's accounting records and are not maintained in accordance
with US GAAP; but are maintained in accordance with IFRS
(International Financial Reporting Standards).
* Moxisign's financial statements are currently prepared by Friedberg
Miller Gruft Incorporated - Chartered Accountants (South Africa), of
Mezzanine Floor, The Wale Street Chambers, 38 Wale Street, Cape Town,
South Africa. The firm is currently employed on an ad-hoc basis; and
carries out its services in accordance with the terms of an engagement
letter. The accounting records are maintained and the financial
statements are personally prepared by, a director of that firm. The
responsible director is a Chartered Accountant of twenty eight years
standing and is registered as a Chartered Accountant (South Africa)
with The South African Institute of Chartered Accountants; and is
registered as a Registered Auditor with The Independent Regulatory
Body for Auditors. Both of these Bodies have material CPD (Continuing
Professional Development) requirements that have to be complied with
on an annual basis. Due however to the geographical location of the
firm and the nature of its clients, the firm and the director's
education and knowledge of US GAAP is minimal; and the director's
experience in preparing financial statements in compliance with US
GAAP is minimal.
* Moxisign's financial statements and financial results will be
converted from IFRS to US GAAP by the accountants / auditor of Vantage
Health, Moxisign's holding company. To this end, Vantage Health's
accountants / auditor will have available to them the detailed
accounting records and audit working papers prepared by Moxisign's
South African accountants / auditor.
The following financial information summarizes the more complete historical
financial information at the end of this prospectus.
As of June 30, 2010 (Audited)
-----------------------------
BALANCE SHEET
Total Assets $ 144,383
Total Liabilities $ 141,127
Stockholders Equity $ 3,256
Period from April 21, 2010
(date of inception)
to June 30, 2010 (Audited)
--------------------------
INCOME STATEMENT
Revenue $ --
Total Expenses $ 7,264
Net Loss $ (6,627)
9
RISK FACTORS
An investment in our common stock involves a high degree of risk. You should
carefully consider the risks described below and the other information in this
prospectus before investing in our common stock. If any of the following risks
occur, our business, operating results and financial condition could be
seriously harmed. The trading price of our common stock could decline due to any
of these risks, and you may lose all or part of your investment.
WE ARE AT RISK OF THE DEPARTMENT OF HEALTH NOT AWARDING MOXISIGN WITH A MATERIAL
PORTION OF THE 2010 TENDER.
In order to complete our proposed business plan Moxisign must be awarded a
material portion of the 2010 tender from the DOH. . The miimum amount of the
tender that must be awarded to Moxisign is 10% of the tender There is no
guarantee Moxisign will be awarded a material portion of the 2010 tender and as
a result the business could fail.Completion of this business case is based on
the fact that by achieving this degree of success at the tender we would be able
to entice the technology partner to future investment and development of a
manufacturing plant in SA
WE ARE AT RISK OF THE DEPARTMENT OF HEALTH NOT RENEWING OUR SUPPLY AGREEMENT
PAST THE 2012 PERIOD.
If the Company is awarded a material portion of the next 2010 tender, the
Company will have to bid once again to renew the tender for an extended period
of time in 2012. There is no guarantee Moxisign will be awarded a material
portion tender renewal and as a result the business could fail. Due to our small
size, it can be assumed that many of our competitors have significantly greater
financial, technical, marketing and other competitive resources. Accordingly,
these competitors may have already begun to establish an expertise with the
tender process in South Africa. Our inability to compete with other bidders in
the tender process will have an adverse effect on our business, financial
condition and results of operations.
IF WE ARE UNABLE TO ARRANGE A TECHNOLOGY PARTNERSHIP WITH API MANUFACTURING
CAPABILITIES OUR BUSINESS WILL FAIL.
In order to complete our proposed business plan we require a technology
partnership with a foreign API manufacturer. The main suppliers Moxisign intends
on working with are located in China and India. A technology partnership is
needed in order to obtain the pre-manufactured API products. If Moxisign is
unable to arrange a technology partnership our business will fail.
BECAUSE OUR OFFICERS AND DIRECTORS HAVE OTHER BUSINESS INTERESTS, THEY MAY NOT
BE ABLE OR WILLING TO DEVOTE A SUFFICIENT AMOUNT OF TIME TO OUR BUSINESS
OPERATIONS, CAUSING OUR BUSINESS TO FAIL.
10
Our officers and directors will only be devoting limited time to our operations.
Dr. Ramakrishnan intends to devote 50% of her business time to our affairs while
Mr. Lowe intends to devote less than 10% of his business time to our affairs.
Because our senior officers and directors will only be devoting limited time to
our operations, our operations may be sporadic and occur at times which are
convenient to them. As a result, operations may be periodically interrupted or
suspended which could result in a lack of revenues and a possible cessation of
operations. It is possible that the demands on Lisa Ramakrishnan and Steven Lowe
from their other obligations could increase with the result that they would no
longer be able to devote sufficient time to the management of our business. In
addition, Dr. Ramakrishnan and Mr. Lowe may not possess sufficient time for our
business if the demands of managing our business increase substantially beyond
current levels.
BECAUSE A DIRECTOR OWNS 80.92% OF OUR ISSUED AND OUTSTANDING COMMON STOCK, THEY
CAN MAKE AND CONTROL CORPORATE DECISIONS THAT MAY BE DISADVANTAGEOUS TO MINORITY
SHAREHOLDERS.
Our director, Lisa Ramakrishnan, owns approximately 80.92% of the outstanding
shares of our common stock. Accordingly, she will have a significant influence
in determining the outcome of all corporate transactions or other matters,
including mergers, consolidations, and the sale of all or substantially all of
our assets. She will also have the power to prevent or cause a change in
control. The interests of our directors may differ from the interests of the
other stockholders and thus result in corporate decisions that are
disadvantageous to other shareholders.
BECAUSE OUR CONTINUATION AS A GOING CONCERN IS IN DOUBT, WE WILL BE FORCED TO
CEASE BUSINESS OPERATIONS UNLESS WE CAN GENERATE PROFITABLE OPERATIONS IN THE
FUTURE.
We will be incurring losses until we build a break-even level of revenue.
Further losses are anticipated in the development of our business. As a result,
there is substantial doubt about our ability to continue as a going concern. Our
ability to continue as a going concern is dependent upon our ability to generate
profitable operations in the future and/or to obtain the necessary financing to
meet our obligations and repay our liabilities arising from normal business
operations when they come due. We will require additional funds in order to
provide proper service to our potential clients. At this time, we cannot assure
investors that we will be able to obtain financing. If we cannot raise financing
to meet our obligations, we will be insolvent and will be forced to cease our
business operations.
THE AMOUNT OF SHARES TO BE SOLD THROUGH THIS OFFERING MAY MAKE IT UNLIKELY THAT
WE WILL BE ABLE TO MAKE A SUCCESSFUL OFFERING OF OUR SECURITIES IN THE NEAR
FUTURE.
Our selling shareholders are offering a significant percentage (19.08%) of our
outstanding shares through this registration statement. As such, it is unlikely
that we will be able to make a successful offering of our securities to raise
capital in the near future.
11
IF A MARKET FOR OUR COMMON STOCK DOES NOT DEVELOP, SHAREHOLDERS MAY BE UNABLE TO
SELL THEIR SHARES.
There is currently no market for our common stock and we can provide no
assurance that a market will develop. We plan to apply for listing of our common
stock on the over the counter bulletin board upon the effectiveness of the
registration statement, of which this prospectus forms a part. However, we can
provide investors with no assurance that our shares will be traded on the
bulletin board or, if traded, that a public market will materialize. If no
market is ever developed for our shares, it will be difficult for shareholders
to sell their stock. In such a case, shareholders may find that they are unable
to achieve benefits from their investment.
OUR SHARES OF COMMON STOCK ARE SUBJECT TO THE "PENNY STOCK" RULES OF THE
SECURITIES AND EXCHANGE COMMISSION AND THE TRADING MARKET IN OUR SECURITIES WILL
BE LIMITED, WHICH WILL MAKE TRANSACTIONS IN OUR STOCK CUMBERSOME AND MAY REDUCE
THE VALUE OF AN INVESTMENT IN OUR STOCK.
The SEC has adopted rules that regulate broker-dealer practices in connection
with transactions in "penny stocks." Penny stocks generally are equity
securities with a price of less than $5.00 (other than securities registered on
certain national securities exchanges or quoted on the NASDAQ system, provided
that current price and volume information with respect to transactions in such
securities is provided by the exchange or system). Penny stock rules require a
broker-dealer, prior to a transaction in a penny stock not otherwise exempt from
those rules, to deliver a standardized risk disclosure document prepared by the
SEC, which specifies information about penny stocks and the nature and
significance of risks of the penny stock market. A broker-dealer must also
provide the customer with bid and offer quotations for the penny stock, the
compensation of the broker-dealer, and sales person in the transaction, and
monthly account statements indicating the market value of each penny stock held
in the customer's account. In addition, the penny stock rules require that,
prior to a transaction in a penny stock not otherwise exempt from those rules,
the broker-dealer must make a special written determination that the penny stock
is a suitable investment for the purchaser and receive the purchaser's written
agreement to the transaction. These disclosure requirements may have the effect
of reducing the trading activity in the secondary market for stock that becomes
subject to those penny stock rules. If a trading market for our common stock
develops, our common stock will probably become subject to the penny stock
rules, and shareholders may have difficulty in selling their shares.
OUR ABILITY TO RAISE CAPITAL IN THE FUTURE MAY BE LIMITED, AND OUR FAILURE TO
RAISE CAPITAL WHEN NEEDED COULD PREVENT US FROM EXECUTING OUR BUSINESS PLAN.
The timing and amount of our working capital and capital expenditure
requirements may vary significantly depending on many factors, including:
* market acceptance of our products;
* the need to adapt to changing government regulations;
* the existence of opportunities for expansion; and
* access to and availability of sufficient management, technical,
marketing and financial personnel.
12
Our current capital resources are not sufficient to satisfy our liquidity needs.
We must therefore seek to sell additional equity or debt securities or obtain
other debt financing. The sale of additional equity or convertible debt
securities would result in additional dilution to our stockholders. Additional
debt would result in increased expenses and could result in covenants that would
restrict our operations. We have not made arrangements to obtain additional
financing. We may not be able to obtain additional financing, if required, in
amounts or on terms acceptable to us, or at all.
ANY ADDITIONAL FUNDING WE ARRANGE THROUGH THE SALE OF OUR COMMON STOCK WILL
RESULT IN DILUTION TO EXISTING SHAREHOLDERS.
We must raise additional capital in order for our business plan to succeed. Our
most likely source of additional capital will be through the sale of additional
shares of common stock. Such stock issuances will cause stockholders' interests
in our company to be diluted. Such dilution will negatively affect the value of
investors' shares.
WE DO NOT EXPECT TO PAY DIVIDENDS IN THE FORESEEABLE FUTURE.
We have never paid any dividends on our common stock. We do not expect to pay
cash dividends on our common stock at any time in the foreseeable future. The
future payment of dividends directly depends upon our future earnings, capital
requirements, financial requirements and other factors that our board of
directors will consider. Since we do not anticipate paying cash dividends on our
common stock, a return on your investment, if any, will depend solely on an
increase, if any, in the market value of our common stock
WE HAVE NO EXPERIENCE AS A PUBLIC COMPANY.
We have never operated as a public company. We have no experience in complying
with the various rules and regulations, which are required of a public company.
As a result, we may not be able to operate successfully as a public company,
even if our operations are successful. We plan to comply with all of the various
rules and regulations, which are required of a public company. However, if we
cannot operate successfully as a public company, your investment may be
adversely affected. Our inability to operate as a public company could be the
basis of your losing your entire investment in us.
As a public company we will incur additional costs including but not limited to
the following: Audit, Legal, Prospectus printing and drafting, SEC fees, Market
Maker, Transfer Agent, and EDGAR filing fees. These costs are expected to run
between $12,000 and $40,000 per year.
13
IF WE ARE UNABLE TO HIRE AND RETAIN KEY PERSONNEL, WE MAY NOT BE ABLE TO
IMPLEMENT OUR BUSINESS PLAN.
Due to the specified nature of our business, having certain key personnel is
essential to survival of our business. We rely heavily on Dr. Ramakrishnan to
execute our business plan. Consequently, the loss of Dr. Ramakrishnan may have a
substantial effect on our future success or failure. We do not have and
generally do not intend to acquire keyman life insurance on any of our
executives. We may have to recruit qualified personnel with competitive
compensation packages, equity participation, and other benefits that may affect
the working capital available for our operations. Management may have to seek to
obtain outside independent professionals to assist them in assessing the merits
and risks of any business proposals as well as assisting in the development and
operation of many company projects. No assurance can be given that we will be
able to obtain such needed assistance on terms acceptable to us. Our failure to
attract additional qualified employees or to retain the services of key
personnel could have a material adverse effect on our operating results and
financial condition.
WE DO NOT HAVE PRODUCT LIABILITY INSURANCE AND WE COULD BE EXPOSED TO
SUBSTANTIAL LIABILITY.
We face an inherent business risk of exposure to product liability claims in
the event that the use of our products is alleged to have resulted in adverse
side effects. Adverse side effects, marketing or manufacturing problems
pertaining to any of our products could result in:
* decreased demand for our products;
* adverse publicity resulting in injury to our reputation;
* product liability claims and significant litigation costs;
* substantial monetary awards to or costly settlements with consumers;
* product recalls;
* loss of revenues; or
* the inability to commercialize future products.
To date, we have not experienced any product liability claims. However, that
does not mean that we will not have any such claims with respect to our products
in the future. We do not carry product liability insurance. The lack of product
liability insurance exposes us to risks associated with potential product
liability claims, which can be significant.
THE EXISTENCE OF GOVERNMENT REGULATION IN SOUTH AFRICA PRESENTS HURDLES TO
EXECUTING OUR BUSINESS PLAN.
Our operations are subject to various laws and regulations in South Africa.
These laws and regulations govern the research, development, sale and marketing
of pharmaceuticals, taxes, labor standards, occupational health and safety,
toxic substances, chemical products and materials, waste management and other
14
matters relating to the pharmaceutical industry. We may require permits,
registrations or other authorizations to maintain our operations and to carry
out our future research and development activities, and these permits,
registrations or authorizations will be subject to revocation, modification and
renewal.
Existing regulatory requirements for Moxisign are that Moxisign needs to become
registered as a pharmaceutical producer with the MCC of South Africa. Our
company has commenced this registration process and the process of applying with
the Inspectorate of the MCC for registration. Once Moxisign is registered with
the MCC it will be then have to apply for registration with the Department of
Health in order to be eligible to bid for government tenders as a pharmaceutical
supplier. It also will need to be registered with the Pharmacy Council of South
Africa.
Once Moxisign is registered with the MCC, DOH and the Pharmancy Council it will
need to get its ARV samples tested and then registered with the MCC. This drug
registration will involve submitting the necessary pharmaceutical dossiers and
common technical documents to the MCC. Since these ARVs are generics, the
registration process is fairly routine as there is no need for new clinical data
or clinical studies, although biostudies (bio-equivalence and bio-availiability
assays are required). Then with these bio-studies, the ARVs once they have also
completed stability testing will need to be submitted for registration with the
MCC. This can be fast-tracked by the application to the Minister of Health as
ARV's are deemed vital for the HIV/AIDS health crisis. This process could take
4-6 months.
Once the medicines are registered with the MCC, then the ARVs may be utilized
for supplying a tender. In order for Moxisign to later commence production of
ARVs would also entail a further registration requirement from the MCC as a
pharmaceutical manufacturer and warehousing license. This would require a
Quality Control pharmacist, a Production pharmacist and a Regulatory pharmacist
to be employed by Moxisign.
These and other government obstacles along with our limited resources may make
it difficult to penetrate the market in South Africa for our products. If we are
unable to successfully maneuver the South African government regulatory
processes, we may have to endure delays in the tender process, which could
adversely affect our ability to continue as a going concern.
FORWARD-LOOKING STATEMENTS
This prospectus contains forward-looking statements that involve risks and
uncertainties. We use words such as anticipate, believe, plan, expect, future,
intend and similar expressions to identify such forward-looking statements. You
should not place too much reliance on these forward-looking statements. Our
actual results are most likely to differ materially from those anticipated in
these forward-looking statements for many reasons, including the risks faced by
us described in the "Risk Factors" section and elsewhere in this prospectus.
15
USE OF PROCEEDS
We will not receive any proceeds from the sale of the common stock offered
through this prospectus by the selling shareholders. However, if all of the
warrants to issue an additional 7,859,375 shares of our common stock are
exercised, then we will receive a total of $23,578,125.
DETERMINATION OF OFFERING PRICE
The selling shareholders will sell our shares at a fixed price of $0.006 per
share unless and until our shares are quoted on the OTC Bulletin Board. We
determined this offering price arbitrarily by using the last sale price of our
common stock to investors. There is no relationship between this price and our
assets, earnings, book value or any other objective criteria of value.
We intend to apply to the OTC Bulletin Board through a market maker for the
quotation of our common stock upon our becoming a reporting entity under the
Securities Exchange Act of 1934. If our common stock becomes so traded and a
market for the stock develops, the actual price of stock will be determined by
prevailing market prices at the time of sale or by private transactions
negotiated by the selling shareholders. The offering price would thus be
determined by market factors and the independent decisions of the selling
shareholders.
DILUTION
The common stock to be sold by the selling shareholders is common stock that is
currently issued and outstanding. Accordingly, there will be no dilution to our
existing shareholders,unless the existing warrants are exercised.
SELLING SHAREHOLDERS
The selling shareholders named in this prospectus are offering up to 22,009,375
shares of common stock, which includes 7,859,375 shares issuable upon exercise
of warrants to purchase shares of common stock through this prospectus..These
shares were acquired from us in private placements that were exempt from
registration provided under Regulation S and Regulation D of the Securities Act
of 1933. Some shares were acquired outside of the United States by non-U.S.
persons. The shares include the following:
1. 14,150,000 shares of our common stock that the selling shareholders
acquired from us in an offering that was exempt from registration
under Regulation S and Regulation D of the Securities Act of 1933 that
was completed on June 30, 2010;
2. 7,859,375 shares of our common stock underlying warrants with a strike
price of $3,00 per share that the selling shareholders acquired from
us in an offering that was exempt from registration under Regulation S
and Regulation D of the Securities Act of 1933 that was completed on
June 30, 2010
16
The following table provides as of the date of this prospectus, information
regarding the beneficial ownership of our common stock held by each of the
selling shareholders, including:
1. the number of shares owned by each prior to this offering;
2. the total number of shares that are to be offered for each;
3. the total number of shares that will be owned by each upon completion
of the offering; and
4. the percentage owned by each upon completion of the offering.
Total Number Of
Shares To Be Total Shares Percentage of
Offered For to Be Owned Shares owned
Shares Owned Selling Upon Completion Upon Completion
Name Of Prior To This Shareholders Of This of This
Selling Shareholder Offering Account Offering Offering (2)
------------------- -------- ------- -------- ------------
Athena Capital Ltd. (1) 3,712,500 3,712,500 NIL NIL
Robin Phillips 2,250,000 (3) 2,250,000 (3) NIL NIL
Berkshire Int'l Finance (1) 7,875,000 (4) 7,875,000 (4) NIL NIL
Fillmore East Food & Bev (1) 3,625,000 (5) 3,625,000 (5) NIL NIL
Julius R. Luthy 100,000 100,000 NIL NIL
Julius Luthy 100,000 100,000 NIL NIL
Thomas Mani 100,000 100,000 NIL NIL
Donald N Schnyder 100,000 100,000 NIL NIL
Heinz D. Zimmer 100,000 100,000 NIL NIL
Thor Enterprise International 50,000 50,000 NIL NIL
Mark Murphy 50,000 50,000 NIL NIL
Carmela Smedsrud 50,000 50,000 NIL NIL
Kelly Paolini 50,000 50,000 NIL NIL
Shelby Aldous 50,000 50,000 NIL NIL
Erin Murphy 50,000 50,000 NIL NIL
Torey Gault 50,000 50,000 NIL NIL
Claudia DiNatale 50,000 50,000 NIL NIL
Maria DiNatale 50,000 50,000 NIL NIL
Dennis Mendoza 50,000 50,000 NIL NIL
Vannarith Mak 50,000 50,000 NIL NIL
James Walls 50,000 50,000 NIL NIL
Andre Mailloux 100,000 100,000 NIL NIL
17
HealthInvest Partners LLC (1) 1,125,000 (6) 1,125,000 (6) NIL NIL
Indus Consulting Inc. (1) 1,771,875 (7) 1,1771,875 (7) NIL NIL
Orly G. Leif 50,000 50,000 NIL NIL
Randy Leif 50,000 50,000 NIL NIL
Anna Castoro 50,000 50,000 NIL NIL
Michael Castoro 50,000 50,000 NIL NIL
Steven Figliolini 50,000 50,000 NIL NIL
Gold Coast Environmental (1) 100,000 100,000 NIL NIL
Catherine A. Huard 100,000 100,000 NIL NIL
----------
(1) Voting or Investment Control for the above corps are in the names of the
following individuals:
Athena Capital Ltd.: Jonathan Rosen
Berkshire International Finance, Inc.: John Figliolini
Fillmore East Food & Beverage, Inc.: Claudia DiNatale
Thor Enterprise International, Inc.: Demitry Kambolin
HealthInvest Partners LLC.: Mustafa Khan
Indus Consulting Inc.: Mehtab Sultana
Gold Coast Environmental Solutions, Inc.: Catherine Huard
(2) The percentages are based on 74,150,000 shares of common stock issued and
outstanding on the date of this prospectus. In determining the percent of
common stock beneficially owned by a selling security holder on the date
hereof, (a) the numerator is the number of common stock beneficially owned
by such selling security holder (including shares that he has the right to
acquire within 60 days of the date hereof), and (b) the denominator is the
sum of (i) the 74,150,000 shares outstanding on the date hereof, and (ii)
the number of shares of common stock which such selling the stockholder has
the right to acquire within 60 days of the date hereof.
(3) Includes warrants to purchase 1,250,000 shares of our common stock.
(4) Includes warrants to purchase 4,375,000 shares of our common stock.
(5) Includes warrants to purchase 625,000 shares of our common stock.
(6) Includes warrants to purchase 625,000 shares of our common stock.
(7) Includes warrants to purchase 984,375 shares of our common stock.
18
The named party beneficially owns and has sole voting and investment power over
all shares or rights to these shares. The numbers in this table assume that none
of the selling shareholders sells shares of common stock not being offered in
this prospectus or purchases additional shares of common stock, and assumes that
all shares offered are sold.
Except as listed below, to our knowledge, none of the selling shareholders or
their beneficial owners:
- has had a material relationship with us other than as a shareholder at
any time within the past three years; or
- has ever been one of our officers or directors or an officer or
director of our predecessors or affiliates
- are broker-dealers or affiliated with broker-dealers.
PLAN OF DISTRIBUTION
The selling shareholders may sell some or all of their common stock in one or
more transactions, including block transactions. There are no arrangements,
agreements or understandings with respect to the sale of these securities.
The selling shareholders will sell our shares at a fixed price of $0.003 unless
and until our shares are quoted on the OTC Bulletin Board. We determined this
offering price arbitrarily by using the last sale price of our common stock to
investors. We intend to contact an authorized OTC Bulletin Board market-maker
for sponsorship of our securities on the OTC Bulletin Board. Although we intend
to apply for quotation of our common stock on the OTC Bulletin Board, public
trading of our common stock may never materialize. If our common stock becomes
traded on the OTC Bulletin Board, then the sales price to the public will vary
according to the selling decisions of each selling shareholder and the market
for our stock at the time of resale.
If applicable, the selling shareholders may distribute shares to one or more of
their nominees who are unaffiliated with us. Such nominees may, in turn,
distribute such shares as described above. If these shares being registered for
resale are transferred from the named selling shareholders and the new
shareholders wish to rely on the prospectus to resell these shares, then we must
first file a prospectus supplement naming these individuals as selling
shareholders and providing the information required concerning the identity of
each selling shareholder and he or her relationship to us There is no agreement
or understanding between the selling shareholders and any nominees with respect
to the distribution of the shares being registered for resale pursuant to this
registration statement.
For the purpose of this registration statement nominee will be defined as: (a) a
person or entity who is requested or named to act for another, such as an agent
or trustee, or (b) a potential successor to another's rights under a contract.
We can provide no assurance that all or any of the common stock offered will be
sold by the selling shareholders.
19
We are bearing all costs relating to the registration of the common stock. The
selling shareholders, however, will pay any commissions or other fees payable to
brokers or dealers in connection with any sale of the common stock.
The owners of the shares to be sold by means of this prospectus are referred to
as the "selling" shareholders". The selling shareholders acquired their shares
from us in private negotiated transactions. These shares may be sold by one or
more of the following methods, without limitations.
* A block trade in which a broker or dealer so engaged will attempt to
sell the shares as agent but may position and resell a portion of the
block as principal to facilitate the transaction;
* Purchase by a broker or dealer as principal and resale by such broker
or dealer for its account pursuant to this prospectus;
* Ordinary brokerage transactions and transactions in which the broker
solicits purchasers
* Face to face transactions between sellers and purchasers without a
broker/dealer.
We are deemed to be a shell company in accordance with the Securities Act of
1933. Because we are a shell company our shares of common stock may not be
resold under Rule 144 of the Securities Act of 1933. Our shares may only be
resold through a registration statement declared effective by the SEC or by
meeting the conditions of Rule 144(i). Therefore it is possible that you may not
be able to sell your shares into the market place.
In competing sales, brokers or dealers engaged by the selling shareholders may
arrange for other brokers or dealers to participate. Brokers or dealers may
receive commissions or discounts from selling shareholders in amounts to be
negotiated. As to any particular broker-dealer, this compensation might be in
excess of customary commissions. Neither we, nor the selling stockholders can
presently estimate the amount of such compensation.
The selling shareholders and any broker/dealers who act in connection with the
sale of the shares will be deemed to be "underwriters" within the meaning of the
Securities Acts of 1933, and any commissions received by them and any profit on
any resale of the shares as a principal might be deemed to be underwriting
discounts and commissions under the Securities Act.
If any selling shareholders enters into an agreement to sell his or her shares
to a broker/dealer as principal and the broker/dealer is acting as an
underwriter, we will file a post-effective amendment to the registration
statement, of which this prospectus is a part, identifying the broker/dealer,
providing required information concerning the plan of distribution, and
otherwise revising the disclosures in this prospectus as needed. We will also
file the agreement between the selling shareholder and the broker/dealer as an
exhibit to the post-effective amendment to the registration statement.
20
We have advised the selling shareholders that they and any securities
broker/dealers or others who will be deemed to be statutory underwriters will be
subject to the prospectus delivery requirements under the Securities Act of
1933. We have advised each selling shareholder that in the event of a
"distribution" of the shares owned by the selling shareholder, such selling
shareholder, any "affiliated purchasers", and any broker/dealer or other person
who participates in the distribution may be subject to Rule 102 of Regulation M
under the Securities Exchange Act of 1934 ("1934 Act") until their participation
in that distribution is complete. Rule 102 makes it unlawful for any person who
is participating in a distribution to bid for or purchase stock of the same
class, as is the subject of the distribution. A "distribution" is defined in
Rule 102 as an offering of securities "that is distinguished from ordinary
trading transaction by the magnitude of the offering and the presence of special
selling efforts and selling methods". We have advised the selling shareholders
that Rule 101 of Regulation M under the 1934 Act prohibits any "stabilizing bid"
or "stabilizing purchase" for purpose of pegging, fixing or stabilizing the
price of the common stock in connection with this offering.
No selling shareholderhas, or had, any material relationship with our officers
or directors. No selling shareholder is affiliated with a broker/dealer.
The selling shareholders must comply with the requirements of the Securities Act
and the Securities Exchange Act in the offer and sale of the common stock. In
particular, during such times as the selling shareholders may be deemed to be
engaged in a distribution of the common stock, and therefore be considered to be
an underwriter, they must comply with applicable law and may, among other
things:
1. Not engage in any stabilization activities in connection with our
common stock;
2. Furnish each broker or dealer through which common stock may be
offered, such copies of this prospectus, as amended from time to time,
as may be required by such broker or dealer; and
3. Not bid for or purchase any of our securities or attempt to induce any
person to purchase any of our securities other than as permitted under
the Securities Exchange Act.
The Securities and Exchange Commission has also adopted rules that regulate
broker-dealer practices in connection with transactions in penny stocks. Penny
stocks are generally equity securities with a price of less than $5.00 (other
than securities registered on certain national securities exchanges or quoted on
the NASDAQ system, provided that current price and volume information with
respect to transactions in such securities is provided by the exchange or
system).
The penny stock rules require a broker-dealer, prior to a transaction in a penny
stock not otherwise exempt from those rules, deliver a standardized risk
disclosure document prepared by the Commission, which contains:
21
- a description of the nature and level of risk in the market for penny
stocks in both public offerings and secondary trading;
- a description of the broker's or dealer's duties to the customer and
of the rights and remedies available to the customer with respect to a
violation of such duties or other requirements;
- a brief, clear, narrative description of a dealer market, including
"bid" and "ask" prices for penny stocks and the significance of the
spread between the bid and ask price;
- a toll-free telephone number for inquiries on disciplinary actions;
- a definition of significant terms in the disclosure document or in the
conduct of trading penny stocks; and
- such other information and is in such form (including language, type,
size, and format) as the Commission shall require by rule or
regulation.
The broker-dealer also must provide, prior to effecting any transaction in a
penny stock, the customer with:
- bid and offer quotations for the penny stock;
- the compensation of the broker-dealer and its salesperson in the
transaction;
- the number of shares to which such bid and ask prices apply, or other
comparable information relating to the depth and liquidity of the
market for such stock; and
- monthly account statements showing the market value of each penny
stock held in the customer's account.
In addition, the penny stock rules require that prior to a transaction in a
penny stock not otherwise exempt from those rules; the broker-dealer must make a
special written determination that the penny stock is a suitable investment for
the purchaser and receive the purchaser's written acknowledgment of the receipt
of a risk disclosure statement, a written agreement to transactions involving
penny stocks, and a signed and dated copy of a written suitability statement.
These disclosure requirements will have the effect of reducing the trading
activity in the secondary market for our stock because it will be subject to
these penny stock rules. Therefore, stockholders may have difficulty selling
those securities.
DESCRIPTION OF SECURITIES
GENERAL
Our authorized capital stock consists of 250,000,000 shares of common stock at a
par value of $0.001 per share.
COMMON STOCK
As of June 30, 2010, there were 74,150,000 shares of our common stock issued and
outstanding that are held by 32 stockholders of record.
22
Holders of our common stock are entitled to one vote for each share on all
matters submitted to a stockholder vote. Holders of common stock do not have
cumulative voting rights. Therefore, holders of a majority of the shares of
common stock voting for the election of directors can elect all of the
directors. Holders of our common stock representing a majority of the voting
power of our capital stock issued, outstanding and entitled to vote, represented
in person or by proxy, are necessary to constitute a quorum at any meeting of
our stockholders. A vote by the holders of a majority of our outstanding shares
is required to effectuate certain fundamental corporate changes such as
liquidation, merger or an amendment to our articles of incorporation.
Holders of common stock are entitled to share in all dividends that the board of
directors, in its discretion, declares from legally available funds. In the
event of a liquidation, dissolution or winding up, each outstanding share
entitles its holder to participate pro rata in all assets that remain after
payment of liabilities and after providing for each class of stock, if any,
having preference over the common stock. Holders of our common stock have no
pre-emptive rights, no conversion rights and there are no redemption provisions
applicable to our common stock.
PREFERRED STOCK
We have authorized $10M of "preferred stock. Our board of directors is
authorized by our articles of incorporation to divide the authorized shares of
our preferred stock into one or more series, each of which must be so designated
as to distinguish the shares of each series of preferred stock from the shares
of all other series and classes. Our board of directors is authorized, within
any limitations prescribed by law and our articles of incorporation, to fix and
determine the designations, rights, qualifications, preferences, limitations and
terms of the shares of any series of preferred stock including, but not limited
to, the following:
1. The number of shares constituting that series and the distinctive
designation of that series, which may be by distinguishing number,
letter or title;
2. The dividend rate on the shares of that series, whether dividends will
be cumulative, and if so, from which date(s), and the relative rights
of priority, if any, of payment of dividends on shares of that series;
3. Whether that series will have voting rights, in addition to the voting
rights provided by law, and, if so, the terms of such voting rights;
4. Whether that series will have conversion privileges, and, if so, the
terms and conditions of such conversion, including provision for
adjustment of the conversion rate in such events as the Board of
Directors determines;
5. Whether or not the shares of that series will be redeemable, and, if
so, the terms and conditions of such redemption, including the date or
date upon or after which they are redeemable, and the amount per share
payable in case of redemption, which amount may vary under different
conditions and at different redemption dates;
6. Whether that series will have a sinking fund for the redemption or
purchase of shares of that series, and, if so, the terms and amount of
such sinking fund;
7. The rights of the shares of that series in the event of voluntary or
involuntary liquidation, dissolution or winding up of the corporation,
and the relative rights of priority, if any, of payment of shares of
that series;
8. Any other relative rights, preferences and limitations of that series
23
DIVIDEND POLICY
We have never declared or paid any cash dividends on our common stock. We
currently intend to retain future earnings, if any, to finance the expansion of
our business. As a result, we do not anticipate paying any cash dividends in the
foreseeable future.
SHARE PURCHASE WARRANTS
We have issued warrants to purchase up to 7,859,375 shares of common stock at
$3.00 per share, currently exercisable for three years.
OPTIONS
We have not issued and do not have any outstanding options to purchase shares of
our common stock.
CONVERTIBLE SECURITIES
We have not issued and do not have any outstanding securities convertible into
shares of our common stock or any rights convertible or exchangeable into shares
of our common stock.
INTERESTS OF NAMED EXPERTS AND COUNSEL
No expert or counsel named in this prospectus as having prepared or certified
any part of this prospectus or having given an opinion upon the validity of the
securities being registered or upon other legal matters in connection with the
registration or offering of the common stock was employed on a contingency
basis, or had, or is to receive, in connection with the offering, an interest,
direct or indirect, in the registrant or any of its parents or subsidiaries. Nor
was any such person connected with the registrant or any of its parents or
subsidiaries as a promoter, managing or principal underwriter, voting trustee,
director, officer, or employee.
Scott P. Doney, Attorney at Law 3273 E. Warm Springs Las Vegas, NV 89120 has
provided an opinion on the validity of our common stock.
The financial statements included in this prospectus have been audited by
Silberstein Ungar, PLLC. To the extent and for the periods set forth in their
report appearing elsewhere in this document and in the registration statement
filed with the SEC, and are included in reliance upon such report given upon the
authority of said firm as experts in auditing and accounting.
DESCRIPTION OF BUSINESS
We were incorporated in the State of Nevada on April 21, 2010 and have not begun
operations. Vantage Health owns a 51% interest in Moxisign (PTY) Ltd.
("Moxisign"), a company incorporated in South Africa. Through our control of
24
Moxisign we intend to build and operate an Active Pharmaceutical Ingredients
("APIs") manufacturing plant alongside a formulation and packaging plant in
South Africa to meet the growing market needs for Antiretrovirals ("ARVs") in
South Africa and potentially other African countries. The company intends to
build an Antiretroviral Active Pharmaceutical Ingredient (API) manufacturing
plant in South Africa in order to supply the growing demand in the fight against
HIV/AIDS.
Once Dr Ramakrsihnan was advised by the Department of Trade and Industry of the
chronic shortage and supply of ARV's in SA, she made the decision to pursue her
objective to address this ARV shortage in South Africa, she knew funds would be
required to build a manufactuing facility, as this was one of the main reasons
why no pharmaceutical existed in Africa. She also knew that funding for such a
venture might be difficult in the current South African business climate, so
decided to base the venture from the USA, where capital is generally more
accessible. However, and as described below, in the She also understood the
requirement to involve Broad Based Black Economic empowerment local partners. As
such, she formed a South African operating company (Moxisign Pty Ltd) which
plans to issue 49% of its share capital to these local BBBEE partners. As of
this date, this 49% has not yet been formally issued, nor any payment received
by Moxisign for the issuance of such shares. Regardless, and at the time
Moxisign was incorporated locally, Dr Ramakrishnan formed Vantage Health in
Nevada to own the remaining 51% of Moxisign, once Moxisign issues its BBBEE
partners their 49% share in the local company. As of this date, Vantage Health
owns 51% of Moxisign and until such time as the BBBEE component is formalised,
the remaining 49% is temporarily held in Dr Ramakrishnan's name. As documented
in the company's audited financial statement, on or aroundJune 14 201o, 510
ordinary shares of Moxisign's authorised share capital were alloted to Vantage
Health at price of ZAR 50.00 (par value ZAR 1 plus ZAR 49 premium value) for a
total purchase price of ZAR 25,500.00. The purpose of forming Vantage Health in
the US is to be able to access US markets with a view to raising capital to
cover the costs of building an ARV manufacturing facility. In the event of a
successful capital raise, financial benefits would accrue to both the local
company (49%) and Vantage Health shareholders in the USA (51%). The acquisition
is considered as one involving "parties under common control" for the reasons
descibed above, and by virtue of the fact that once the capitalization of
Moxisign is completed, Vantage Health will own a 51 % majority share of Moxisign
and since Dr Ramakrishnan has majority ownership of Vantage Health, will
therefore leave Dr Ramakrishnan in majority control of both entities. Because Dr
Ramakrishnan formed Moxisign Pty Ltd and Vantage Health with her own funds and
that both companies were brand new formations, the only documentation (other
than the issuance of shares also reflected in the audited financial statements
of both companies) are board minutes reflecting the formal agreement of both
companies boards of directors.
Other than both companies Memoranda and Articles of Association, there exist no
shareholder agreements or any other instruments that would materially alter the
shareholdings as detailed in both companies audits. No shares have been liened,
hypothecated, or in any way pledged. No bonds, convertible or otherwise,
debentures or any debt instruments have been issued by either company. Other
than the warrant units sold by Vantage Health, no other warrants or options
exist. Therefore, the only "controlling instruments" are the issued shares from
Moxisign to Vantage Health and the shares issued to Dr Ramakrishnan from Vantage
Health. In summation, Dr Ramakrishnan holds a personal controlling interest in
Moxisign Pty Ltd through her controlling interest in Vantage Health and has no
plans to relinquish control of either company at this time. In addition, one of
the requirements of being permitted to bid at a South Africa government tenders
is that the company must have at least 30% BBBEE component according to the
government regulations.
25
Vantage Health is under no obligation to provide management,assistance or
financing to Moxisign. No material agreements, loans or contracts exist between
the two entities apart from the sale of 51% of the shareholding of Moxisign to
Vantage Health.
In order to achieve the proposed business operations the company must submit a
bid proposal to the South African government and be awarded a percentage of the
government supply contract. There is no guarantee the company will be awarded a
sufficient percentage of the supply contract to support profitable operations
and if they are unsuccessful in the bidding process the business could fail.
At this time no major API manufacturing plants exist in South Africa. In fact
there is only one small API plant in existence in Cape Town which doesn't
manufacture any Antiretroviral APIs. The South African government has identified
the pharmaceutical manufacturing industry as a growth sector in South Africa's
future planning, by its inclusion in the 2010/11 to 2013 Industrial Policy
Action Plan II ("IPAP II") from the South African Department of Trade and
Industry. This industrial policy has highlighted the pharmaceutical sector as
priority area .
Moxisign's vision is to provide affordable ARVs to allow the South African
government to manage the crippling impact of HIV/ AIDS. By doing this, Moxisign
hopes to achieve its twin objectives of enabling those individuals with HIV to
lead normal extended lives, as treatment continues for the lifetime of the
patient, and secondly, establishing a successful and profitable South African
company within the pharmaceutical sector.
Moxisign originated when a group of well qualified and driven individuals with
proven expertise and successful track records in the medical and healthcare
industry decided to put together a company that would tackle the African
HIV/AIDS crisis. In addition, Moxisign's Board members have an established
pedigree with governmental hierarchy in South Africa. The combination of these
skills, coupled with the drive to make a positive difference makes for a company
with a formidable vision.
Moxisign currently does not have the manufacturing or processing facilities, raw
materials, technical capability or expertise to fulfill the requirements for
antir-retroviral ARV or API production. There is no tender for anti-retroviral
API manufacture, there is only a tender for the supply of formulated
antiretroviral medicines(ARV's). Moxisigns' intention is to commence building a
manufacturing plant to produce ARVs from the API in the second phase of the
business case.This facility would be jointly owned in the joint venture
,Moxisign would aim to have the controlling share We may eventually develop the
ability to produce APIs from fine chemicals. This phase of the business case
will need the assistance of a technology partner especially with regard to our
eventual plan to backward integrate from the production of ARV"s to the
production of API. Our technology partner as will be stipulated in our JV
agreement , will need to give assurance to provide all the technological support
and skills transfer until we are in a position to run the plant independently.
GOVERNMENT REGULATORY REQUIREMENTS
Existing regulatory requirements for Moxisign are that Moxisign needs to become
registered as a pharmaceutical producer with the MCC of South Africa. Our
company has commenced this registration process and the process of applying with
26
the Inspectorate of the MCC for registration. Once Moxisign is registered with
the MCC it will be then have to apply for registration with the Department of
Health in order to be eligible to bid for government tenders as a pharmaceutical
supplier. It also will need to be registered with the Pharmacy Council of South
Africa.
Once Moxisign is registered with the MCC, DOH and the Pharmancy Council it will
need to get its ARV samples tested and then registered with the MCC. This drug
registratioan will involve submitting the necessary pharmaceutical dossiers and
common technical documents to the MCC. Since these ARVs are generics, the
registration processs is fairly routine as there is no need for new clinical
data or clinical studies. Althought biostudies (bio-equivalence and
bio-availiability assays are required). Then with these bio-studies, the ARVs
once they have also completed stability testing will need to be submitted for
registration with the MCC. This can be fast-tracked by the application to the
Minister of Health as ARV's are deemed vital for the HIV/AIDS health crisis.
This process could take 4-6 months.
Once the medicines are registered with the MCC, then the ARVs may be utilized
for supplying a tender. In order for Moxisign to later commence production of
ARVs would also entail a further registration requirement from the MCC as a
pharmaceutical manufacturer and warehousing license. This would require a
Quality Control pharmacist, a Production pharmacist and a Regulatory pharmacist
to be employed by Moxisign.
Moxisign has fulfilled the other government requirement of BBBEE component in
order to qualify for application to government tenders.
Moxisign's board consist of
Chairperson; Dr Peter Matseke
Directors: Mr Salim Essa, Mr Prabir Badal, Dr Lisa Ramakrishnan, Mr Nick
Tannenberger, Mr Louis Herbert.
Dr. Lisa Ramakrishnan - CEO
Since our inception on April 21, 2010, Lisa Ramakrishnan has been our President,
Chief Executive Officer, Treasurer, Chief Financial Officer, Chief Accounting
Officer and a member of our board of directors. Lisa has not been a member of
the board of directors of any corporations during the last five years. She
intends to devote approximately 50% of her business time to our affairs.
Work History:
Currently CEO of Sahira Pty Ltd (privately held Australian Investment Company)
October 2008 to May 2009
Consultant Radiologist Imaging Partners Online UK
January 2007 to March 2008
Consultant Radiologist Fremantle Hospital
January 2001 to January 2007
WA Radiology registrar training program Sir Charles Gairdner Hospital
27
During the past five years, Dr Ramakrishnan has not been the subject to any of
the following events:
1. Any bankruptcy petition filed by or against any business of which Dr
Ramakrishnan was a general partner or executive officer either at the
time of the bankruptcy or within two years prior to that time.
2. Any conviction in a criminal proceeding or being subject to a pending
criminal proceeding.
3. An order, judgment, or decree, not subsequently reversed, suspended or
vacated, or any court of competent jurisdiction, permanently or
temporarily enjoining, barring, suspending or otherwise limiting Dr
Ramakrishnan's involvement in any type of business, securities or
banking activities.
4. Found by a court of competent jurisdiction (in a civil action), the
Securities and Exchange Commission or the Commodity Future Trading
Commission to have violated a federal or state securities or
commodities law, and the judgment has not been reversed, suspended or
vacated.
Mr. Nick Tannenberger - Director, Operations Manager
Work History:
2000 - 2010
Currently he is the General Manager of Supply Chain for Chevron Global
Lubricants in Europe, Africa and Middle East, based in Houston USA.
1998 - 2000
Director - Global Supply Chain Management W.R. GRACE & Co.
1997 - 1998
Manager of Materials Management, Asia-Pacific W.R. GRACE (HONG KONG) LTD.
1996 - 1997
Product Specialist - Closure Systems, Asia-Pacific for W.R. GRACE (HONG KONG)
LTD.
1995 - 1996
Market Analyst, Southeast Asia for W.R. GRACE (HONG KONG) LTD
1994 - 1995
Market Analyst, Hong Kong and China for W.R. GRACE (HONG KONG) LTD.
During the past five years, Nick Tannenberger has not been the subject to any of
the following events:
1. Any bankruptcy petition filed by or against any business of which Nick
Tannenberger was a general partner or executive officer either at the
time of the bankruptcy or within two years prior to that time.
2. Any conviction in a criminal proceeding or being subject to a pending
criminal proceeding.
3. An order, judgment, or decree, not subsequently reversed, suspended or
vacated, or any court of competent jurisdiction, permanently or
temporarily enjoining, barring, suspending or otherwise limiting Nick
Tannenberger's involvement in any type of business, securities or
banking activities.
4. Found by a court of competent jurisdiction (in a civil action), the
Securities and Exchange Commission or the Commodity Future Trading
Commission to have violated a federal or state securities or
commodities law, and the judgment has not been reversed, suspended or
vacated.
Mr Louis Joseph Herbert - Director, Legal Attorney
Work History:
1994-2010
Currently he is a practising Commercial Attorney who has established his own
boutique legal firm in Cape Town, specialising in South African Corporate and
Commercial Law.
Mr Herbert has been practising as a duly admitted attorney at law, at 74
Shortmarket St in Cape Town, and has been in uninterrupted practise under the
name of Louis Herbert Attorneys, for 16 years.
During the past five years, Louis Herbert has not been the subject to any of the
following events:
1. Any bankruptcy petition filed by or against any business of which
Louis Herbert was a general partner or executive officer either at the
time of the bankruptcy or within two years prior to that time.
2. Any conviction in a criminal proceeding or being subject to a pending
criminal proceeding.
3. An order, judgment, or decree, not subsequently reversed, suspended or
vacated, or any court of competent jurisdiction, permanently or
temporarily enjoining, barring, suspending or otherwise limiting Louis
Herbert's involvement in any type of business, securities or banking
activities.
28
4. Found by a court of competent jurisdiction (in a civil action), the
Securities and Exchange Commission or the Commodity Future Trading
Commission to have violated a federal or state securities or
commodities law, and the judgment has not been reversed, suspended or
vacated.
Mr Salim Essa - Director, Consultant
Work History
Currently Mr Essa is a freelance Consultant and has been retained by Moxisign
Pty Ltd since April 2010.
2008-2010
Currently serves as a Director of iNca Energy, a Renewable Energy development
company in partnership with General Electric Energy of the USA and Goldwind
Energy of China. He is part of the BEE Consortium for Ansaldo of Italy, Larsen
and Toubro of India as well as serving on the boards of several other South
African entities.
May 2007 -2008
Member - Moya Multimedia, Johannesburg, South Africa
January 2006 - March 2007
Vice President - Torq International LLC, Miami, FL
January 2005 - December 2005
Vice President Sales - Sound Solutions Americas LLC, Miami, FL
March 2004 - December 2004
Sales Manager - Sound Solutions, Manchester, United Kingdom
May 2003 - February 2004
Sales Director - Polycom International, Johannesburg, South Africa
October 2001 - April 2003
CEO - Verimark Cellular, Johannesburg, South Africa
During the past five years, Salim Essa has not been the subject to any of the
following events:
1. Any bankruptcy petition filed by or against any business of which
Salim Essa was a general partner or executive officer either at the
time of the bankruptcy or within two years prior to that time.
2. Any conviction in a criminal proceeding or being subject to a pending
criminal proceeding.
3. An order, judgment, or decree, not subsequently reversed, suspended or
vacated, or any court of competent jurisdiction, permanently or
temporarily enjoining, barring, suspending or otherwise limiting Salim
Essa's involvement in any type of business, securities or banking
activities.
4. Found by a court of competent jurisdiction (in a civil action), the
Securities and Exchange Commission or the Commodity Future Trading
Commission to have violated a federal or state securities or
commodities law, and the judgment has not been reversed, suspended or
vacated.
Mr Prabir Badal - Director
2004-2010
Currently employed by SARS and seconded to COSATU on fulltime basis since 2004
to serve as National Treasurer.
Work History
1996, Mr. Prabir Badal joined COSATU whilst on appointment with the South
African Revenue Service (SARS).
2002, he was elected Provincial Treasurer of COSATU in KwaZulu-Natal (National
Education Health and Allied Workers Union) affiliated to Congress of South
African Trade Unions (COSATU).
29
He served in this capacity until he was elected to his incumbent position as
National Treasurer of COSATU in June 2004 at the 7th National Congress.
Mr Badal is a member of the COSATU Central Executive Committee, Chairperson of
COSATU Retirement Fund Reference Group, Chairperson & Trustee of Kopano Ke Matla
Investment Trust (the investment arm of COSATU), Trustee of Kopano Ke Matla
Trust (the 100% shareholder of COSATU Investment Holdings), Deputy Chairperson
of Government Employees Pension Fund (GEPF), Chairperson of Finance & Audit
Committee of GEPF and a member of the Investment Committee of GEPF.
During the past five years, Prabir Badal has not been the subject to any of the
following events:
1. Any bankruptcy petition filed by or against any business of which
Prabir Badal was a general partner or executive officer either at the
time of the bankruptcy or within two years prior to that time.
2. Any conviction in a criminal proceeding or being subject to a pending
criminal proceeding.
3. An order, judgment, or decree, not subsequently reversed, suspended or
vacated, or any court of competent jurisdiction, permanently or
temporarily enjoining, barring, suspending or otherwise limiting
Prabir Badal's involvement in any type of business, securities or
banking activities.
4. Found by a court of competent jurisdiction (in a civil action), the
Securities and Exchange Commission or the Commodity Future Trading
Commission to have violated a federal or state securities or
commodities law, and the judgment has not been reversed, suspended or
vacated.
Dr. Peter Matseke - Director, Chairman
1992-2010
Dr Peter Matseke is the founder and current leader of the Clinix Health Group
has established itself as one of the leaders in empowered healthcare. The group
provides quality private healthcare to previously disadvantaged communities at
four hospitals in Gauteng: Clinix Private Hospital Soweto, Clinix Private
Hospital Vosloorus, Clinix Private Hospital Sebokeng and Clinix Selby Park
Hospital. In addition, the group manages Lesedi Private Hospital in Soweto and
Victoria Private Hospital in Mafikeng, as well as providing emergency services
and occupational health services.
Work History:
CurrentPosition(s):
Admor - Lesedi Private Hospital Limited, Soweto
Medical Doctor - Bafana Bafana Squad
Medical Doctor - Sasol Under 23 Olympic Soccer Team
Colonel - South African National Defence Force, Reserve Force
Medical Officer - Surgical Department, Chris Hani Baragwanath Hospital, Soweto
Managing Director - Clinix Health Group Ltd Managing Director - Clinix (Pty) Ltd
Director - Condomi SA (Pty) Ltd
Director - Matseke Med Investment, Hospitalia Health International SA (Pty) Ltd
Managing Director - Clinix Health Management (Pty) Ltd
Qualifications:
Witwatersrand Graduate School of Business Administration, Management Advancement
Programme
University of Cape Town, Master of Philosophy
University of KwaZulu-Natal, Bachelor of Medicine & Bachelor of Surgery
30
During the past five years, Peter Matseke has not been the subject to any of the
following events:
1. Any bankruptcy petition filed by or against any business of which
Peter Matseke was a general partner or executive officer either at the
time of the bankruptcy or within two years prior to that time.
2. Any conviction in a criminal proceeding or being subject to a pending
criminal proceeding.
3. An order, judgment, or decree, not subsequently reversed, suspended or
vacated, or any court of competent jurisdiction, permanently or
temporarily enjoining, barring, suspending or otherwise limiting Peter
Matseke's involvement in any type of business, securities or banking
activities.
4. Found by a court of competent jurisdiction (in a civil action), the
Securities and Exchange Commission or the Commodity Future Trading
Commission to have violated a federal or state securities or
commodities law, and the judgment has not been reversed, suspended or
vacated.
Moxisign was setup in in 2009 after Dr Ramakrishnan was advised by the the
Department of Trade and Industry to contemplate setting up a production facility
for Antiretrovirals production in South Africa to address the chronic shortage
in ARV's in accordance with the government's industrial plans . Moxisign Pty Ltd
has secured a technology partner and initially a supply agreement for the Supply
of ARV's to the SA government . This is the only business activity that Moxisign
is engaged in currently although it intends to set up a manufacturing plant for
the production of ARV's as stated in this document. Moxisign currently has no
facilities or employees and has no current liabilities.
Profits that accrue to Moxisign by virtue of the 51%; Moxisign profits will
accrue in the consolidated statements, ultimately Vantage Health will derive 51%
of the Moxisign's distrubutable net profit; the remaining 49% of Moxisign profit
will be distributed according to the BBBEE shareholding.
Note 2 prepaid expenses is the July payment for Mr Salim Essa Mr Salim Essa is
the consultant who was employed by Moxisign to liaise with the government
departments as he has been instrumental in putting together BBBEE components for
a number of South African companies . We need to attach his consulting retainer
agreement.
Currently a small number of companies control South Africa's pharmaceutical
supply industry.This is reflected by the fact that in the last ARV tender in
2008 that one company got almost 70% of the tender whilst the company with the
cheapest bid at tender was unsuccessful. This latter company successfully sued
the South African government. The South African Department of Health ("DOH") we
believe is trying to break up this virtual monopoly,( Reuters: S.Africa to buy
cheaper AIDs drugs despite opposition 13 Apr 2010 14:06:06 GMT Source: Reuters)
leading to a more open and transparent pharmaceutical environment in South
Africa. The current environment created by the change in South African
Industrial Policy as foreshadowed in the governments IPAP2 which states that the
pharmaceutical sector is to be a key priority sector with government introducing
incentives to theis sector of industry and forthcoming tender allocation ie in
the fact that the tender is going to be for the new FDC as opposed to the old
tender which was for single ARV's, presents the opportunity for Moxisign to
enter into this market.
31
The change in the political environment and the new government's ambitions in
addressing the AIDS crisis are highly favourable for Moxisign's plans.
The result of the growing demand for ARVs both in South Africa and sub-Saharan
Africa highlights a business opportunity, which in Moxisign's opinion has
significant long-term viability. Moxisign is aware that a suitable technology
partner is vital for the purposes of procuring raw material, intellectual
property, good manufacturing practice, and economies of scale, as well as the
required technical skills. This technology partner will be paramount to the
success of this venture. As a result, Moxisign is acting with due caution and
proceeding with the due diligence necessary in order to select the finest
technology partner globally.
The market for ARVs is clearly defined within this business case as well as the
rationale for an API manufacturing facility in South Africa. This plan confirms
Moxisign's educated belief that such a business venture is both commercially
viable in the short as well as the longer term, with the minimum of risk.
We believe that there is desire expressed by the DOH and the South African
government to encourage local manufacturing facility for ARV's, Moxisign is
poised to take advantage of the judicious timing and intends to become a leading
manufacturer of ARVs for the South African government as we perceive currently
most foreign ARV manufacturers are not committing to developing a production
facility in SA.
At the time of filing this registration statement the company has begun the
development of a corporate website, raised $89,710 in share capital and
completed an audit of the company's financial statements ended June 30, 2010. We
have yet to implement our business model and our current focus is to obtain
effectiveness of our registration statement from the Securities and Exchange
Commission and apply for quotation on the OTC Bulletin Board.
STATE OF THE SOUTH AFRICAN HIV/AIDS EPIDEMIC
Currently 10% of the South African population is HIV positive with almost 1000
people dying of AIDS every day. As of 2010, South Africa carries a quarter of
the HIV disease burden in sub-Saharan Africa and a devastating sixth of the
global disease burden. South Africa's HIV epidemic shows no evidence of decline,
based on the Joint UN Programme on HIV and AIDS report from 2008.
The South African government's stated intention is to reduce, by June 2011, the
rate of infection by 50% and propose to achieve that by testing 15 million South
Africans. The DOH aims, by June 2011, to provide ARV treatment to 80% of those
who need it.
32
THE EPIDEMIC IN NUMBERS:
Adults with HIV 18.1%
People living with HIV 5,700,000
Number of people receiving ARV therapy 701,000
Number of people needing ARV therapy 1,700,000
AIDS related deaths annually 350,000
AIDS orphans 1,400,000
Life expectancy of patients on ARVs is near normal if treatment is started
appropriately. In a recent Botswana Study on the effectiveness of ARVs, the
average increase in lifespan is around 16 years.
There is a well-founded belief that South Africa pays more for some ARVs than
other African nations. Despite this, there are some local pharmaceutical
manufacturers that are reluctant to reduce their pricing of locally formulated
ARVs. This reticence, despite discounts being negotiated with pharmaceutical
companies by charitable institutions including the Clinton Foundation and
Clinton HIV/AIDS Initiative ("CHAI"), has distanced many pharmaceutical
companies from the SA government.
BACKGROUND: SOUTH AFRICAN PHARMACEUTICALS SECTOR
The South African pharmaceuticals sector is relatively well-constructed in most
components, with the glaring exception of the manufacture of active
pharmaceutical ingredients (APIs). The procurement of foreign APIs, formulation,
packaging, labelling and distribution of pharmaceuticals is widespread, together
accounting for the bulk of the country's 17 billion South African rand ("ZAR")
pharmaceuticals sector.
There is virtually no API production in South Africa. A number of attempts over
the last thirty years to study this deficiency have recommended several
suggestions as to how the situation could be improved. Despite this, no
development has occurred. Indeed, several pharmaceutical manufacturers and
private sector companies have actively considered API production, but all
without exception failed to make an investment and build local capabilities. One
local small South African company which manufactures APIs in South Africa has
not expanded to produce ARV APIs. The major constraints to growth have until
recently been the small South African market and an export-averse culture, which
prevents economy of scale being achieved. As a result South African based
companies have not been competitive. This experience is in stark contrast to the
significant growth in API production seen in other countries including India,
South Korea and China.
The South African HIV/AIDS epidemic and the predicted demand for ARVs have
changed this situation. According to the HIV and AIDS strategy (HIV & AIDS and
STI Strategic Plan for South Africa 2007-2011), there will be 1.4 million people
requiring ARVs by 2011. The national procurement cost for ARVs will be
approximately ZAR4.3 billion per annum (2005/6 prices, including adults and
children, assuming 80% coverage and high compliance). The demand for ARVs is
projected to be approximately 700 tonnes per annum (Tpa) of APIs in South
Africa.
33
Moxisign believes that the existence of this growing market will not on its own,
encourage or stimulate private sector investment, because the components of the
ARV treatment regimens are variable. Although there is some certainty around the
total demand, the actual ARVs and APIs that will be procured, may change on a
three year cycle based on World Health Organization treatment guidelines.
Furthermore, newer ARVs may be developed which have greater efficacy and
improved side effect profiles, or currently patented ARVs may come off their
patents permitting their use in generic form, which only then will make them
affordable in Africa.
The relationship between the HAART regimes indicated illustrates that ARV
treatments are constantly updated because of changes and improving with new
products coming into the market . Moxisign's intention is to aim to produce
ARV's in keeping with most recent guidelines. Moxisign has therefore procured
TDF from its Technology partners in keeping with the HAART regime. Moxisign
plans to produce ARV's in SA which do not have patent protection in SA for
example Moxisign is in the process of procuring Fixed drug combinations (FDC)
including TDF, efavirenz and emtracitabine (TDF+ FTC+ EFV)which also does not
have patent protection in SA. The next anticipated tender will require FDC which
is the current treatment guidelines see below. ie for all new patients needing
treatment including pregnant women.
Table 1: Standardised National HAART (Highly Active Anti-retroviral Treatment)
regimens for adults and adolescents:
1st Line
--------
All new patients needing TDF + 3TC/FTC + EFV/NVP For TB co-infection EFV is
treatment, including preferred. For women of
pregnant women child bearing age, not on
reliable contraception, NVP
is preferred.
Currently on d4T based d4T + 3TC + EFV/NVP Remain on d4T if well
regimen with no side tolerated. Early switch
effects with any toxicity.
Subsitute TDF if at high
risk of toxicity (high BMI,
low Hb, older female)
Contraindication to AZT + 3TC + EFV/NVP
TDF: renal disease
2nd Line
--------
Failing on a d4T or TDF + 3TC/FTC + LPV/r
AZT-based 1st line
regimen
Failing on a TDF-based AZT + 3TC + LPV/r
1st line regimen
Salvage
-------
Failing any 2nd line Specialist referral
regimen
34
Table 2: Standardised National HAART regimens for infants and children: NB
Treatments once commenced are for the lifetime of the patient
1st Line
--------
All infants and children ABC + 3TC + LPV/r
under 3 years
Children 3 years or older ABC + 3TC + EFV
Currently on d4T-based Can continue Substitute - once lipodystrophy
regimen with no side effects suspected
2nd Line
--------
Children above 3 years AZT + ddl + LPV/r
Failed ABC + 3TC + EFV
Failed on AZT or ddl- ABC + 3TC + LPV/r
based regimen
Failed on LPV-based Refer Specialist advice necessary
regimen and/or hospital referral
Infants under 3 years Refer Specialist advice necessary
failing 1st line and/or hospital referral
Salvage
-------
Failing any 2nd line Specialist referral
Index:
TDF: Tenovofir NVP: Nevirapine
ddl: Dideoxyinosine AZT: Zidovudine
3TC: Lamivudine LVP/r: Lopinavir
FTC: Emtricitabine ABC: Abacavir
EFV: Efavirenz
The value chain of the South African pharmaceutical sector, from the fine
chemical intermediates to the final `ready for sale' product, is considered
below. The sector is uniquely characterized with regard to the following:
* The local manufacture of APIs is almost non-existent; the total value
of APIs, as utilised for formulation and including the API-equivalent
of imported finished product, is estimated to be about ZAR6.5 billion
(or 37% of the total pharmaceutical market. Of this only ZAR150
million (or 2.3%) is locally produced, based on figures supplied by
the Department of Trade and Industry (`DTI'). The situation for ARVs
is considerably worse, as there is no local ARV API production at all.
* The local formulation sector is comparatively strong; 59% by value of
the total pharmaceutical market is locally formulated. Based on
information obtained from the Medicines Control Council, there are at
least 77 registered manufacturing entities in South Africa. Although
many of the companies have relatively small and unsophisticated
facilities, there are several large sites which are capable of large
volume production of a variety of pharmaceutical products.
35
* The local market is split between the private and public sector, with
the public sector market comprising 21% of the total market by value,
but approximately 70% by volume. The private market in turn, consists
of "over the counter" medicines and prescription medicines, with the
relative proportions by value being 30% and 70% respectively. The
prescription medicines market (total value is ZAR9.8 billion p.a.)
consists of branded and generic products, with the branded products
being 78% by value and only 50% by volume, thereby implying that the
average branded product is 3.5 times more expensive than generics.
* Pharmaceutical exports, whether at the level of APIs or at the level
of formulated medicines, are low in comparison to the total value (4%
of the total local formulated product output); as a result there is a
noticeable trade imbalance for the sector (estimated to be about
ZAR11.8 billion, with the inclusion of imported APIs and formulated
products). The growing demand may exacerbate this problem. The
possible additional foreign import burden from the escalating ARV
programme may reach ZAR4.5 billion per annum, although this figure is
highly dependent on the actual ARV API components and whether these
will be locally formulated.
* A number of studies have previously referenced the declining
employment levels within the sector and the absence of new investment.
This situation has slowly improved over recent years, with some new
investment in formulation plants by a number of companies, including
Aspen Pharmacare, Ranbaxy and Enaleni.
* According to `The Business of Health in Africa' report commissioned by
the International Finance Corporation of the World Bank, the value of
ex-factory generics formulated in South Africa, was USD$735 million,
or about ZAR5.1 billion in 2008; this implies that generic formulation
accounts for about 50% of total formulated production.
* The same report also notes the existence of an extensive informal
health sector in sub-Saharan countries, a sector that includes
traditional healers and sellers of herbal medicines (including many
HIV herbal "remedies"). It is estimated that expenditure in the
informal sector may amount to 13% in countries such as Zambia, and in
Nigeria, roughly 50% of the population patronize either traditional
healers or medicine dealers. The figures for South Africa are not
known and have not been included in the overall sector summary.
In summary, the pharmaceutical sector in South African is characterized by many
unique features which are all important, although it is quite clear that the
limited capacity in ARV API manufacture is an obvious shortcoming. This latter
predicament creates the fundamentals for Moxisign's business case. Moxisign
could potentially become a key participant and driver in this industry space.
36
IMPORTANCE OF LOCAL API PRODUCTION
Moxisign believes that the long term success of the ARV programme in South
Africa is likely to become dependent on the development of local API
manufacturing and resultant ARVs. The putative benefits of regional production
of ARVs are listed below:
DIRECT BENEFITS
POTENTIAL COST SAVINGS. A dedicated ARV API facility in South Africa could be
competitive against the lowest cost international producers on the basis of
improved process technology, continuous (as opposed to batch) processing, and
better economies of scale as well as cheaper logistics costs. The extent of the
cost saving depends on which APIs are being manufactured and what processing
steps are required. Hence Moxisign has the advantage of being able to source the
most innovative technology as it is starting from scratch hence being able to
significantly reduce production costs as well as obtaining maximum production
efficiencies However, the following general comments can be made:
* Most APIs are produced in batch chemical plants which are highly
inefficient from an asset utilization perspective. Such plants are
generally oversized for the required capacity and operate according to
long batch processing cycles. A dedicated facility, which has been
explicitly designed to manufacture only a few APIs, would provide a
lower cost platform for ARV API production, this would be central to
any project development by moxisign
* Secondly, the process technology itself has been considerably improved
over the last few years through innovative technology. Many of the
established producers are constrained by old processes and
technologies; new entrants such as Moxisign would have greater
flexibility to innovate and select more efficient process routes.
* Thirdly, a South African facility will, in theory, have significant
economy of scale. The volume requirement of the most important ARV
drugs in the current treatment regimen is projected to be 150 and 360
Tpa for tenofovir and efavirenz respectively. In pharmaceutical terms,
the combined requirement for just these two components is considerable
(510 Tpa) and will, in the opinion of Moxisign's management, provide
the necessary efficiencies for a production facility.
RELIABILITY OF SUPPLY. A successful highly active antiretroviral treatment
(HAART) program depends on 100% security of supply. An interruption to the
supply of APIs, and hence the prescribed ARVs, may cause a resumption of high
HIV viral loads and the possibility of developing widespread resistance to
existing ARV treatment regimens. It is therefore critical that the supply of ARV
APIs be guaranteed. Local production would improve the security of supply, and
extend procurement options as well as endear Moxisign to the government's fight
against HIV/AIDS
37
QUALITY STANDARDS. Local production with regular surveillance on quality control
issues in conjunction with health authorities would guarantee quality standards
without compromising on cost. This is also a poignant reminder of why local
production is preferred in most countries, which would assist Moxisign with its
plans
FOREIGN IMPORT SAVINGS. The average price for the ARVs required is $950 to
$1100/kg. By 2012 the total import bill for the estimated South African HAART
procurement program will be about ZAR4.9 billion (2007 prices; this figure is
assuming 1.75 million patients are on HAART and based on a fully imported API
that is locally formulated). Local production should to an extent, offset in
part this foreign exchange exposure and import deficit. It is estimated that the
cost of importing the relevant raw materials is about 55% of the API cost
(dependant on the API) and hence implies a foreign import saving of at least
ZAR2.4 billion per annum This in itself could be a catalyst for the development
of local pharmaceutical production. The latter figure excludes any foreign
currency earnings through the export of ARV APIs to other countries.
INDIRECT BENEFITS
DEVELOPMENT OF THE CHEMICALS SECTOR. The need to diversify the manufacturing
sector, and in particular to stimulate production of more profitable, high
technology products, has been emphasized in several recent policy documents eg
IPAP 2 It is also an objective of the National Industrial Policy Framework of
the Department of Trade and Industry South Africa, in which the pharmaceuticals
sector has been identified as key. Over the last twenty years there has been
strong growth within this sector, to the extent that it now forms a major part
of the high technology activities of many developed countries, alongside
telecommunications and information technologies. Most industrialized countries
for this reason promote growth in the Pharmaceutical sector which compliments
Moxisign's ambitions which are aligned with government
EXPORTS. A local API producer could also become a significant exporter, using
South Africa as a gateway into sub-Saharan African markets. Although the initial
intention is to develop a local supplier of a highly strategic product sviz ARV,
ultimately this could assist in building a regional API production capacity
which could benefit the entire African continent. Which would naturally increase
Moxisign's markets and thus potential profits for the company .
DEVELOPMENT OF HUMAN CAPITAL. Most of the essential skills for a successful API
manufacturing sector are already well developed in South Africa within academic
institutions (organic chemistry, chemical engineering, mechanical engineering,
pharmacology, etc). But experienced professionals with knowledge of
pharmaceutical manufacturing within an industrial environment are very limited
Moxisign could alleviate that shortage by training its technicians overseas
within the technology partners teaching establishments. The main reason for this
gap is the lack of a local API industry. In Hyderabad India, much of the
impressive growth of the API manufacturing sector can be linked to the initial
commitment of Dr K A Reddy and the establishment of his company "Dr Reddy's
Laboratory" in 1984. The history of the API industry in Hyderabad is an
interesting example of how an initial "toe in the water" went on to snowball
into a highly developed, populated and profitable industrial sector. Moxisign
has positioned itself to become a major South African API manufacturer which
should result in a close working relationship with the South African government.
38
The `Business of Health in Africa' study on the health sectors in sub-Saharan
countries, noted that African manufacturers operate at a cost disadvantage
relative to the larger Indian generics companies. This is primarily due to being
small scale, with a relatively expensive asset base, combined with older
technology and high financing costs, as well as the lack of integration with any
API production. These factors are not necessarily applicable to a newly formed
dedicated ARV API facility. Nevertheless, it is evident that better integration
between formulators and API producers may indeed increase the overall cost
effectiveness of the pharmaceuticals sector.
Moxisign believes there are numerous and considerable benefits to local API
manufacturing. This is confirmed by the DTI which has identified this specific
sector as one of its pillars of the IPAP II, and is, in Moxisign's opinion, a
fairly reasonable prognosticator that support from the South African government
for this venture would be available. This is supported by the fact that the DTI
has cash grants available for Pharmaceutical manufacturing of 15% of the cost of
the project.
SOUTH AFRICA'S PROJECTED DEMAND FOR ANTIRETROVIRALS
On the assumption that the number of patients will rise to 1.8 million by 2012
(consisting of 100 000 children and 1.7 million adults), and that 80% of
patients will be on the first line ARV regimen, the projected demand for ARVs
and the estimated costs of their APIs is shown in Table 3. These data are
generated under the assumption that the standard of care for the first line ARV
regimen will remain a triple therapy consisting of two nucleoside reverse
transcriptase inhibitors (NRTIs) and one non-nucleoside reverse transcriptase
inhibitors (NNRTI). This regimen, and in particular the combination of
tenofovir, lamivudine or emtricitabine, and efavirenz or nevirapine, has
recently been shown as being the most effective in the long term control of HIV.
TABLE 3: 2012 DEMAND FOR THE TOP FIVE ARVS:
Estimated cost as API
API DEMAND (Tpa) (2008 R/annum)
--- ------------ --------------
Tenofovir 135 669,023,257
Lamivudine 163 284,077,568
Efavirenz 325 1,296,875,853
Nevirapine 36.1 65,873,059
Zidovudine 36.1 96,064,878
TOTAL 695.2 2,411,914,615
It is note-worthy that the most popular regimen in the developed countries is
the co-formulated product of Atripla, which is a tenofovir, emtricitabine and
efavirenz combination. However this product is patent protected and is unlikely
to be affordable in developing countries until at least 2016. As a result, it is
considered that the key ARV/APIs for the sub-Saharan Africa region will be
tenofovir, lamivudine, efavirenz, nevirapine and zidovudine, the latter due to
its importance in post exposure prophylaxis and in the prevention of mother to
child transmission.
39
Prices of the newer APIs are still decreasing in the short term, as a result of
process innovation improving the overall cost of manufacture. Whereas older
products have stabilised at a relatively optimal level and further improvements
are not anticipated.
It is estimated that the total cost of procurement, based on longer term prices
remaining at the 2008 cost and the South African rand trading at a relatively
stable international exchange rate, will be about ZAR2.4 billion for just the
top five ARV APIs.
AVR/AVI PRODUCTION
Tenofovir is a nucleotide reverse transcriptase inhibitor. It was initially
developed by the Czech scientist Prof Antonin Holy in the late 1970s and was
much later licensed to Gilead Sciences, Inc., in the US. Approval by the US
Federal Drug Administration for the treatment of HIV/AIDS was granted in 2001
(Viread). The molecule is actually a nucleotide (and not nucleoside) reverse
transcriptase inhibitor, and is similar in structure to the GSK product
Abacavir, but with improved efficacy and less side effects. Although the active
compound is tenofovir, the drug is made and sold in the prodrug form, tenofovir
disoproxyl fumarate (TDF) since this form is better absorbed, although its
bioavailability is still only 25%. Moxisign's aim is to initially procure and
eventually produce TDF based FDC.
[GRAPHIC SHOWING THE CHEMICAL STRUCTURE OF TDF]
GOVERNMENT SUPPORT
There are a number of options available to the South African government to
encourage upstream API investment and the development of a robust pharmaceutical
industry as prioritized in the Governemnts IPAP 2. These range from the
establishment of a state pharmaceutical company, to the provision of incentives
to wholly owned private companies. In assessing the various options, the
following aspects of the ARV API market need to be considered:
* The market is presently cost-driven. The API prices are set on a cost
plus model, with the market leader being the lowest cost producer. In
this respect, ARV API's have become commodity chemicals. This is the
result of intervention by various international organisations such as
the Clinton HIV/AIDS Initiative (CHAI) and US President's emergency
plans for Aids relief ("PEPFAR"), which have used their market power
and the convincing arguments around extending access to life-saving
medicines to drive down API prices.
40
* The older the API, the lower the margins. As products mature, the
selling price tends to reflect only the direct costs (variable and
fixed), with all indirect costs either fully depreciated or absorbed
into other products.
* Chinese and Indian API producers benefit from national incentives and
subsidies which are intended to stimulate the pharmaceutical industry.
As a result, the international selling price of APIs is often at a 20%
to 30% discount when compared to the local price, and by implication,
when compared against the full cost of production. The South African
government has stated it would support the development of a
Pharmaceutical industry and has called this area a priority sector.
Moxisign would try and harness all the available support it could from
government in the form of cash grants and loans.
* As a consequence of the narrower margins, competitive advantage for a
single producer is principally achieved through a technology
advantage, and to some extent through integration with formulation.
The lowest cost producer is generally the producer who has managed to
lower the cost of production through process innovation. This aspect
cannot be overemphasised; in any proposed arrangement for local
production, access to modern competitive ARV API process technology is
fundamental and could be the difference between success and failure.
Such technology is generally not traded; therefore a royalty of
between 5% and 10% of net sales (or net revenue) is anticipated.
Alternatively, a Moxisign/foreign pharmaceutical company Joint Venture
could also be formed.
* The initial capital investment is expected to be significant. It is
recommended that a new facility be constructed or purchased and that
such a facility be scaled to manufacture up to 600 Tpa of API. The
cost of such a facility is estimated at USD$20 million, depending on
the selection and number of APIs manufactured. It is also estimated
that the facility will require at least 18 months to become
operational. It is Moxisign's intention to produce multiple APIs in
the facility for a wide variety of chronic disease medications
including treatment for tuberculosis. This will assist in achieving
production economies of scale as well as diversifying the product
offering.
* The components of the treatment regimens change relatively quickly and
some flexibility will be essential in the local ARV API manufacturing
capacity. This can be achieved more easily with the latest technology.
However, even in the best of circumstances, this capacity cannot be
switched instantaneously; it will require a lead time of around 6-12
months for any manufacturer to be able to make a switch from, say TDF
to EFV.
* The pharmaceutical value chain consists of a complex network of design
companies, raw material suppliers, formulators, financiers, etc.;
starting from a zero baseline the development of these networks would
be very difficult, perhaps even insurmountable, for a new entrant.
Therefore, it is important to be able to draw on the experience and
expertise of existing producers and formulators if this business case
is to proceed successfully. Some especially important aspects are
implementation of Good Manufacturing Practice ("GMP"), Good Laboratory
41
Practice ("GLP"), and Good Automated Manufacturing Practice ("GAMP")
which are essential in order for the facility to receive regulatory
approval. This approval can take up to 3 months post commissioning. .
The South African government's rationale for changing the conditions of the
forthcoming tender are probably that it is keen to let competetive market forces
determine the costs of drug procurement and avoid any future litigation . The
South African government has now set a predetermined reference maximum price
that it is prepared to pay for each ARV. This tender has also paved the way for
companies to bid without having their ARVs approved and registered with the
Medicines Control Council ("MCC"), as they will permit registration to occur as
tender bids are appraised. The DOH has offered to ensure that registrations for
ARVs are fast tracked.
The South African government's support for the pharmaceutical sector in other
areas includes construction of a new building to house the MCC, which has been
partly funded by the Centre for Disease Control and prevention ("CDC" see below)
and in conjunction with Columbia University. This will speed up the registration
of new ARV drugs from 4-6 months to 4-6 weeks
The CDC Global AIDS Program ("GAP") South Africa office was launched in June
2000. Since then CDC has been supporting the DOH through activities focusing on
preventing transmission of HIV/AIDS, treatment and care of those who are already
infected with HIV, and increasing laboratory capacity.
The South African government's support for local production over foreign
companies is highlighted by the example in the last ARV tender process in 2007,
where the South Africa government supported a local formulator Aspen over
foreign competition Aurobindo, despite the local bid being around 40% more
expensive than the equivalent bid from this competing foreign pharmaceutical
company. This was based on the fact that the points scoring system in the last
tender was heavily weighted for local production or formulation over foreign
producers.
PROPOSED BUSINESS CASE: PRIVATE SECTOR ENTITY WITH PUBLIC SECTOR INCENTIVES
The South African government also has in place the following set of incentives:
DTI Investment Program Grant: Cash grants of up to 15% of the cost of
capital investment.
Foreign Investment Grant.
Industrial Development Corporation provides loan financing.
Export marketing assistance is also available from the DTI.
42
These incentives can only be specifically quantified once Moxisign has initiated
a comprehensive manufacturing plan. Moxisign intends to apply through the DTI
for these incentives once it commits to the commissioning of an Formulation/API
production plant in South Africa with its technology partner.
POTENTIAL TECHNICAL PARTNERS
Low cost API producers are clustered between India and China. On account of the
existence of some of India's larger API producers currently in the South African
market, coupled with the hunger for market share demonstrated by Chinese
pharmaceutical companies. Moxisign is firmly of the opinion that a Chinese
pharmaceutical manufacturer would be the first choice for a technology partner
in a joint venture in South Africa. Moxisign has identified a number of Chinese
manufacturers and is currently in the process of scrutinizing the appropriate
in-line partner; although the final selection will only be decided once due
diligence has been completed. Moxisign has recently on the 9th September 2010
signed a supply agreement with AMOL Pharmaceuticals Pvt Ltd a company organized
and incorporated in India. Amol is a leading pharmaceutical company who has the
ability to supply ARV's and granular API's to SA.
The term of the contract is for 36 months whereby Amol shall grant Moxisign the
exclusive licence to offer its Anti-retroviral products in SA and make available
any new products in the ARV range .
Moxisign is also currently in the process of securing a partnership agreement
with Sinopharm a Chinese state owned pharmaceutical company, with a view to
having a technology partner for its Phase 2 and Phase 3 plans.
We initially propose to acquire the fully formulated ARV's from our technology
partners and submit for the next tender whilst we will give the government a
written undertaking that we intend to plan to develop a manufacturing plant in
SA for ARV's within a specified timeframe. By having a technology partner who
commits to developing a manufacturing plant in SA and aligning ourselves to the
governments stated objectives we should ensure some degree of success in our
aims. If we are successful in the next tender then it would allow both Moxisign
and its Technology partner a period to assess its relationship and also for the
government to become confident that we would be able to meet our tender
obligations and commit to our pledge to develop local ARV production and perhaps
API production. Obviously if Moxisign does not proceed with its commitment to
government then Moxisign would run the risk of being precluded from subsequent
tenders.
43
LOCAL PARTNER AND BLACK ECONOMIC EMPOWERMENT (BEE)
Black Economic Empowerment ("BEE") was a policy introduced by the first
democratic government in South Africa in 1994. The aim was to harmonize the gaps
created in the South African economy by the previous Apartheid government.
BEE aimed to:
* Increase ownership of equity in companies by Previously Disadvantaged
Individuals ("PDI"). A minimum benchmark was set at 26% and some
sectors now call for 40%.
* Increase Management and Board of Directors participation by PDIs
* Encourage Skills development and transfer
* Create a more equitable economic environment to allow for BEE
companies to emerge and grow
A PDI is defined as:
* A non white citizen or permanent resident who has had residency prior
to 1994
* A woman
* A disabled person
All South African government departments and businesses make use of the
Department of Trade and Industry's BEE scorecard as a gatekeeper for tenders.
This scorecard weighs scoring based on ownership, management, structure,
employment of women and the disabled as well as skills development initiatives.
This has been extended to include local manufacture and assist in the goal of
sustainable job creation.
From 1994 to 2004 the BEE system was allegedly abused, as it seemingly created
an elite group of politically affiliated black business individuals who enjoyed
portfolio stakes in multiple large entities without any change to management or
policies. According to the South African government, this failed the goal of BEE
as it did not distribute the economic benefits equitably. South African
government has, since 2004, favoured the implementation of Broad Based Black
Economic Empowerment ("BBBEE"), which represents and benefits larger groups of
people.
It is imperative for Moxisign to include a BBBEE consortium which consists of
multiple skills and advantages as the local terrain in South Africa is unlike
any other. Furthermore, a grasp of the country's policies as well as
relationships with the relevant stakeholders are essential for success. Thus,
Moxisign has sought to create a consortium to make up its BBBEE component.
44
The consortium may include Kopano Ke Matla Investments (Pty) Ltd., ("Kopano").
Kopano is the investment arm of the South African trade union federation COSATU,
which benefits over 2 million members. Kopano is the largest BBBEE group in
South Africa and has stakes in numerous companies such as Saatchi and Saatchi,
Hernic FerroChrome (Mitsubishi), Ansaldo STS Rail, Airports Company of South
Africa (ACSA) among others. Also included will be NEHAWU, the investment arm of
the Allied Health Workers and Nurses Un
The second group within the consortium is led by Dr Peter Matseke one of the
first black South African medical doctors in South Africa. Dr Matseke is
actively involved in South Africa's health and medical sector as the founder and
Chairman on the Clinix Health Group, the leading BBBEE hospital group with 6
hospitals, targeting the gap between public and private healthcare. Dr. Matseke
has joined the Board of Moxisign as Chairman.
The third group is made up of multiple individuals who have the political
insight, lobbying ability and the will to ensure that a project of this nature
is acknowledged and promoted at the highest levels and that government support
across the relevant government ministries is achieved.
Finally, Moxisign will create an education trust that will benefit the growth of
an industrial pharmaceutical industry in South Africa, supporting home grown
research and development and the establishment of an API industry within the
country. The South African government has warmly welcomed this undertaking.
This consortium should provide the foundation for Moxisign to thrive in South
Africa, as the participants have broad skill sets and are all aligned with South
African government policies which should, in the opinion of Moxisign management,
ensure that Moxisign is astutely politically aligned and also compliant with all
South African government policies.
DEPARTMENT OF HEATH (DOH) ARV TENDER 2010
The DOH ARV tender for 2010 is already up for renewal (originally due in March
2010) and the tender has now been advertised.{(www.globalerfx.com) advertisement
of a new tender} The tender advertisement had been delayed due to the fact that
only a single company (the South African company whose bid was successful at the
last tender) had MCC registration for the new FDC drug cocktails of choice (TDF
based). In fact the government decided to reissue the previous 2008 in July
2010, this tender is only for a short term basis ie month to month supply,
instead of the usual two year period. The SA government probably will soon issue
a new tender for the fixed drug combinations (FDC) of ARV's which are now the
`gold standard` for treatment of HIV/AIDS see HAART recommendations above.
In July 2010 the South African government published a two year year supply
tender advertisement. The reason for the abbreviated period ( tenders are
usually for two years), is apparently due to the fact that the DOH wishes to
enter into longer term arrangements with pharmaceutical manufacturing companies
45
who are committed to local API manufacture. These successful pharmaceutical
companies may ultimately form the closed pool of bidders, who potentially may
only need to negotiate new pricing for supply of ARV's every twelve months, for
a period of ten years, rather than having to resubmit tenders every two years.
In anticipation of supporting emerging pharmaceutical companies, the DOH will
historically allow a company to tender without having the specific drugs
registered first with the MCC. The bidding company will most likely be given 4
months to achieve registration of the drugs with the MCC. The South African
government has indicated that it will lend its support to the MCC to assist in
"fast tracking" these registrations.
The value of this forthcoming two year tender is expected to be in the region of
ZAR3.8 bllion per year and it is possible that each preferred supplier could be
allocated the equivalent of approximately US$100 million of ARV orders for the
first year, although there can be no assurance that this will actually be the
case. This current tender should enable the DOH to provide ARVs to approximately
820 000 patients, with this number growing closer to 1.4 million patients by
2012 for the next tender as tabled above.
If Moxisign fails to secure a material portion of the ARV tender, Moxisign would
still be committed to phase 2 (provided we have the tacit support of the South
African government, through grants and incentives) and phase 3, which may
obviously augment Moxisign's chances significantly of securing a portion of the
next longer term tender in 2012.
THE GOVERNMENT TENDER BIDDING PROCESS
Tenders are advertised weekly on the the Department of Treasury website and the
Government Tender Gazette and Tender bulletins as well as the South African
national press. Tenders are advertised with a closing date for bids, which
usually is a month from the date of advertisement. After this date, all bids are
confidentially reviewed by a bid adjudicating committee and the tenders are
awarded. This is usually 6-8 weeks after the closing date. The bid adjudicating
committee awards the tenders based upon each tender documents preference points
scoring system which is often attached in the Special Conditions of the Tender .
Points are usually awarded for compliance to government regulations. Including
the presence of a BBBEE component, local production component, and pricing. (see
attached tender documents for example). Upon the award of a tender, the
successful bidders have to deliver the tender requirements by the due date of
delivery as per the tenders special conditions ( see attached). Failure to
deliver by the due date may result in penalties. Succesful offers at bid may
receive a proportion of the tender which is judged according to the tender
awards points system. The government called for bids for the first tender in
February 2004, just prior to launching the ARV programme in April 2004, but only
awarded tenders over a year later. Provincial procurement mechanisms had to be
put in place in the interim.
The 2004 tender ran for three years and locked the government into paying the
same prices for drugs for the duration. As new generic versions of ARV drugs
came onto the market and prices dropped, by the end of 2007 the government was
paying almost twice as much as the private sector for first-line drugs like
nevirapine.
46
The second tender for ARVs was in 2008 this tender included estimates of the
numbers of patients who would be taking each of the 10 ARV drugs over the next
two years, for example, a projected 507,000 patients would have been taking
Lamivudine (also known as 3TC), a component of all first-line ARV regimens. the
last tender was in July 2010 . Payment for the successful bidders, according to
the tender documents is usually at terms of 30 days.
Bidders do not necessarily have to be South Afican companies as foreign
companies with a SA registered agent can bid, however, the government BBBEE
requirement and the points awarded for fulfilling the BBBEE component at
government tender make it advantageous to be a local South African company. The
tender is not necessarily for one Anti-retroviral; for example the last tender
advertised for 15 anti-retroviral combinations. Moxisign would bid for a
proportion of the tender dependent on the anti-retrovirals it has registered
with the MCC.
Moxisign believes in the prospect of this business opportunity having a long
term viability for three reasons i) the nature of treatments for HIV are
constantly changing (see above)and the prices of ARV's fluctuate as API prices
are traded as a commodity Thus despite the price per unit being set by the
reference pricing utilized by the government this is only an indicator of the
pricing the government reasonably expects companies to offer their bids at
during the tender process. ii) the pricing for ARV from our suppliers ie
technology partners is very competitive as they are more interested in the long
term benefits of a relationship with Moxisign to produce ARV's in Africa and
supply ARV's to the entire African continent.iii) Moxisign anticipates the
growth in the ARV market to increase for at least the next 10years and even
thereafter the market will continue as treatment for HIV/AIDS is for the
duration of the patients life. At the outset we will be dependent upon third
parties initially for the supply agreement and then for expertise and
assisitance of our Technology partner in developing the production capability to
produce ARV's but our long term intentionis to build our own API production
facility in Africa thereby reducing our costs secondary to grants and
concessions available to local producers and avoiding logistics costs of
importing API or ARV compared to our competition.
SUMMARY
Vantage Health owns 51% of Moxisign. At the time of filing this registration
statement the company has raised $89,584 in share capital and completed an audit
of the company's financial statements ended June 30, 2010. We have yet to
implement our business model and our current focus is to obtain effectiveness of
our registration statement from the Securities and Exchange Commission and apply
for quotation on the OTC Bulletin Board.
Moxisign believes that the timing of this business venture is fortuitous and the
vision outlined within this business case is promising, for a number of reasons:
The South African government's insistence on the establishment of a local ARV
API manufacturing industry foreshadows a great business opportunity for
Moxisign.
47
The change in the ARV treatment programmes: Tenofovir has become the drug of
choice necessitating a change in the tender requirements, and the reluctance of
the South African government to award the tender to only one pharmaceutical
company affords Moxisign the opportunity to participate in current and future
government tenders.
The South African government's commitment to treat 1.6 million patients by 2014,
and their pledge to have 15 million people tested for HIV by June 2011, should
serve to underpin revenue growth.
These are all critical and positive contributory factors to the timing of
Moxisign's proposed tender bid.
The South African government budget for ARVs is projected to grow to over ZAR5
billion per annum by 2012 and Moxisign intends to position itself to be among
the preferred suppliers for a material portion of this business. Moxisign
intends to select the most suitable technology partner to ensure the lowest
possible cost of production and maximum margin efficiency, thereby maximizing
profitability. The government support garnered via the BBBEE consortium should
also ensure that Moxisign's intentions, direction, capabilities and commitment
are conveyed to the DOH and the South African government, counteracting the
possibility of anti-competitive behaviour from various competitors which may
have previously enjoyed a monopoly.
Finally, the phased approach proposed due to the imminent timing of the next
2010 tender should complement Moxisign's intentions to reinvest profits from its
full importation of ARV's in the first 6-12 months, into the roll out and
commissioning of Moxisign's API manufacturing facility.
Moxisign is committed to helping improve the lives of millions of Africans. The
demand for treatment of HIV/AIDS is pressing and growing in South Africa and the
African continent.
THERE IS NO GUARANTEE THAT MOXISIGN WILL BE AWARDED TENDER FOR THE 2010 YEAR OR
THE YEARS BEYOND. IF THE COMPANY IS UNABLE TO PROCURE A MATERIAL PORTION OF THE
2010 TENDER THE BUSINESS WILL FAIL AND YOU COULD LOSE YOUR INVESTMENT.
RESEARCH AND DEVELOPMENT
We have not incurred any other research or development expenditures since our
incorporation.
SUBSIDIARIES
We do not have any subsidiaries, other than our 51% ownership of Moxisign.
PATENTS AND TRADEMARKS
We do not own, either legally or beneficially, any patents or trademarks.
48
GOVERNMENT REGULATIONS
Moxisign will conform to South African government policy, including IPAP II,
whilst also noting that one of the principal drivers of this project is the
current criticism regarding the previous ARV tender in 2007.
Moxisign is cognizant of this IPAP II policy alignment, as any endeavour to
establish a new industry without fitting into defined government policy may face
hurdles. The timing, in the opinion of Moxisign's management, is excellent for
Moxisign to put its plans into operation. In addition, the current social and
economic conditions appear optimal for Moxisign to implement its business case.
OFFICES
Our business office is located at Suite 640, 11400 West Olympic Boulevard, Los
Angeles, California 90064-1567. Our telephone number is (310) 477-5811. We do
not pay any rent to Lowe Law and there is no agreement to pay any rent in the
future. Upon the completion of our offering, we intend to establish an office
elsewhere. As of the date of this prospectus, we have not sought or selected a
new office site.
MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
NO PUBLIC MARKET FOR COMMON STOCK
There is presently no public market for our common stock. We anticipate applying
for trading of our common stock on the over the counter bulletin board upon the
effectiveness of the registration statement of which this prospectus forms a
part. However, we can provide no assurance that our shares will be traded on the
bulletin board or, if traded, that a public market will materialize.
STOCKHOLDERS OF OUR COMMON SHARES
As of the date of this registration statement, we have 32 registered
shareholders.
RULE 144 SHARES
We are currently not eligible to use Rule 144 for the resale of our shares as we
are a shell company.
49
STOCK OPTION GRANTS
To date, we have not granted any stock options.
REGISTRATION RIGHTS
We have not granted registration rights to the selling shareholders or to any
other persons.
DIVIDENDS
There are no restrictions in our articles of incorporation or bylaws that
prevent us from declaring dividends. The Nevada Revised Statutes, however, do
prohibit us from declaring dividends where, after giving effect to the
distribution of the dividend:
1. we would not be able to pay our debts as they become due in the usual
course of business; or
2. our total assets would be less than the sum of our total liabilities
plus the amount that would be needed to satisfy the rights of
shareholders who have preferential rights superior to those receiving
the distribution.
We have not declared any dividends, and we do not plan to declare any dividends
in the foreseeable future.
PLAN OF OPERATION
Our plan of operations is as follows:
The following steps are required in order for the Company to begin operations:
SUBMISSION OF PROPOSAL: (3-6 WEEKS)
In July 2010, the South African government published a month to month supply
tender advertisement. The tender is for an abbreviated period due to the fact
that the DOH wishes to issue another tender for FDC in line with current HIV
treatment guidelines and furthermore enter into longer-term arrangements with
pharmaceutical manufacturing companies who are committed to local API
manufacture. These successful pharmaceutical companies may ultimately form the
closed pool of bidders, who potentially may only need to negotiate new pricing
for supply of ARV's every twelve months, for a period of ten years, rather than
having to resubmit tenders every three years.
50
In anticipation of supporting emerging pharmaceutical companies, the DOH will
historically allow a company to tender without having the specific drugs
registered first with the MCC. The bidding company will most likely be given up
to 4 months to achieve registration of the drugs with the MCC. The South African
government has indicated that it will lend its support to the MCC to assist in
"fast tracking" these registrations.
The company believes the South African government closed the tender
advertisement before the end of August 2010. Moxisign did not bid for this
tender as it was not the tender for FDC.Moxisign intends to bid at the
forthcoming FDC tender with the intent of being awarded a sufficient proportion
of the ARV supply tender in South Africa.
APPROVAL PROCESS: (12-16 WEEKS)
Once a bid has been submitted to the South African government the Company
believes the decision making process will take up to 7 to 12 weeks for the
proposals to be reviewed and supply contracts to be awarded.(see above)
SIGN TECHNOLOGY PARTNERSHIP AGREEMENT (8-12 WEEKS SIMULTANEOUS WITH APPROVAL
PROCESS)
Moxisign intends to sign a technology partnership agreement, most likely with a
Chinese pharmaceutical company and has a supply agreement with an Indian
pharmaceutical company. It should be noted that the main Indian pharmaceutical
companies currently supplying the South African government and DOH actually
import their APIs from Chinese manufacturers. Moxisign's management believes
that a direct relationship with Chinese manufacturers will therefore result in
increased profitability.
This technology partnership as detailed above would have to be phased, due to
the time constraints of this initial tender. Phase 1 will be the importation of
a formulated ARV, with a written commitment to the DOH for the establishment of
phases 2 and 3. In fact, the phase 2 process is expected to begin concurrently
with the 1st phase.
Phase 2 will be the purchase of either a pre-existing approved and MCC
registered formulation facility thereby obviating any further delays in
registration or the development of a new manufacturing plant,. Moxisign has
identified such a pre-existing facility in Cape Town, South Africa and has begun
the due diligence process for the possible purchase of this facility. It is
Moxisign's intention that by the second half of the twelve month tender,
Moxisign should be ready to formulate ARV drugs in South Africa, and only import
the APIs. This facility under consideration is currently engaged in operations
it is currently run by Johnson and Johnson who have two plants that are
possibility up for sale in Cape Town and Johannesburg . This company that
owns/or leases these premises is not an affiliate of Vantage Health or its
shareholders.
ThisThis facility under consideration is run by Johnson and Johnson as an OTC
preparation facility in Cape Town it is anticipated that it would take around
8-12 months to convert this into a production facility to formulate ARV from
API. It may also be worth considering the development of a greenfield site for
the manufacturing site. As it would take 12- 18 months to commission the API
facility ie for production of API's initially which would have to be build from
scratch in another site adjoining this facility or even in a greenfield site as
this would be an industrial plant built to cGMP and GLP specifications.
Commissioning of the plant includes building the plant according to
51
environmental approvals so must be in an area already specified for this
purpose. During commissioning of the plant all other regulatory requirements eg
water purification and waste disposal as well approvals from the MCC would have
to be obtained, furthermore once the plant is completed it would require
inspection by the regulatory authorities including the MCC.Commissioning of the
plant would also entail the required testing for the drugs produced by the new
plant and the obligatory testing of the newly produced drugs by the MCC
Phase 3 has approximately a 12 to18 month span which would entail the actual
commissioning of the API plant see above. The current API manufacturing process
requires a total of 15 processes to produce the API ("N - 15"), and Moxisign
plans to start with an N - 1 or perhaps N - 2 stage. However, depending on
commercial viability this could eventually be taken to the N--15 stage.
The final phase will be the broadening of the range of API's produced in the
facility, and including the treatments for chronic and infectious diseases (for
example, tuberculosis and malaria) which are rampant in Africa and required in
large volumes by the DOH.
Moxisign intends to establish a local scientific research and development
laboratory in conjunction with its technology partner, with the aim of creating
and patenting Moxisign's own ARV API in the future. This strategy is also
consistent with the DOH and South African government's IPAP II policy
guidelines.
BEGIN DISTRIBUTION OPERATIONS: (12 MONTHS)
If Moxisign is successful in obtaining a material portion of the next FDC tender
and with its agreement with a technology provider we expect to begin
distribution operations. This will entail purchasing the pre-packaged ARV
products from our technology partner and distributing them to the South African
market. Moxisign will act as a medium between the foreign supplier and the
domestic market for the initial 24 month tender.This as stated above will allow
sufficient time to develop a relationship with either the Chinese or Indian
technology partner and develop a plan to commence the commissioning of the ARV
production plant. Profits from the initial supply agreement provided we are
successful at the tender will assist in funding this project,
Moxisign anticipates the payment for the initial supply of FDC (assuming we get
10% of the tender) would come partly from operating capital and Moxisign would
also try to obtain a bank Letter of Credit backed up by the tender award once we
have been successful at the tender process.
Distribution of ARV's to 9 provinces in SA, each province has a central
Department of Health depot. The tender award includes the delivery to the DOH
depots as well as unloading. If we receive 10% of the tender award then the
government would purchase from Moxisign 10% of the tender it was award, for
example if 10 companies all submit an offer at tender for the total tender
volume at the same price and all have the same number of preference points
scored in the tender adjudication, then all 10 companies would receive an equal
share of the tender ie 10 % each. Moxisign would bid for as much of the tender
it could supply with regard to the ARV's it has registered to meet the tender
requirements. You would only be able to distribute your proportion of the tender
52
each month to government ie one twelvth of the total volume of your tender.If
you fail to deliver the drugs each month then you are penalized and your tender
allocation for that month may be allotted to another party.
EXERCISING OF WARRANTS/COMPLETION OF FINANCING (12-16 WEEKS)
If we are successful in obtaining a material portion of the 2010 tender we
expect to raise capital through the exercising of warrants and through the
completion of a public offering. We expect to complete the public offering
within 16 weeks after the effectiveness of our registration statement and given
we are successful in obtaining a material portion of the 2010 tender.
The Company will have capital requirements of $20,000,000 in order to make 350
tonnes per annum of ARVAPI. This number is only an assumption at this point and
could change based on the size of the tender awarded to Moxisign, if any at all.
We plan to obtain capital in three ways:
1. Through retained earnings from the first year of operations
2. Current share holders exercising warrants
3. Selling additional common shares.
Issuances of additional shares will result in dilution to our existing
shareholders. Moreover, we currently do not have the authorized capital
necessary to raise $20,000,000 in equity sales. Thus, we would have to increase
our authorized shares prior to conducting any future equity financing. We
currently do not have any material reason our share price will reach a level
where warrant holders will be willing to exercise warrants. There is no
assurance that we will be successful in completing any equity financing.
ESTABLISH A PHARMACEUTICAL PLANT FOR FORMULATION OF ARV (8 TO 12 MONTHS)
If Moxisign is successful in establishing a pharmaceutical/formulation plant and
is into the first year of the initial 24 month tender, the company will then
submit a proposal for the second 2012 tender. The Company believes the tender
process may again take between 12-16 weeks for the proposals to be reviewed and
supply contracts to be awarded but we are assuming the second 2012 tender will
be for a substantially longer period of up to 10 years, although there can be no
assurance of this
SUBMISSION OF AND APPROVAL OF POST 2010 PROPOSAL: (12-16 WEEKS)
If Moxisign is successful in establishing a pharmaceutical plant and is well
into the first year of the initial 24 month tender the company will submit a
proposal for the post 2010 tender ie commencing 2012. The Company believes the
process will take between 12-16 weeks for the proposals to be reviewed and
supply contracts to be awarded.
CONSTRUCT AN API FACILITY: (12-18 MONTHS)
The development of an API facility will take place if the Company is successful
in obtaining a material portion of the long-term tender which may be due to be
advertised in June 2012. This production facility will be added to the
formulation plant which will require necessary EIA and Government and MCC
approvals. The capital requirements for the facility are estimated by management
to be $15,000,000. The 12-18 month period includes the construction of the
plant, stability testing for the newly formulated drug and regulatory approval.
There is a possibility of additional costs and delays due to EIA and government
review.
53
BEGIN PRODUCTION:
This new API production facility will have the state of the art technology to
produce API from fine chemicals. This facility will be similar to newer plants
currently being built in Vietnam which will enable the production facility to
switch from the production of a particular API to an alternate compound without
requiring complete overhaul of the plant. Thus if the drug of choice for the
treatment of HIV/AIDS changes it will allow greater flexibility. The production
initially will rely on the importation of fine chemicals from China with
technical assistance expertise and skills transfer from our technology partners.
SUMMARY
In summary, there is no guarantee that Moxisign will be awarded a material
portion of the government tender for ARV supply. If we are not able to obtain a
material portion our business will fail. If we are awarded a material portion of
the government tender we should be in full operation and begin distribution
within 18 weeks of the filing of this Registration Statement.
LIMITED OPERATING HISTORY; NEED FOR ADDITIONAL CAPITAL
There is no historical financial information about us upon which to base an
evaluation of our performance. We are a start-up company and have not generated
any revenues. We cannot guarantee success of our business operations. Our
business is subject to risks inherent in the establishment of a new business
enterprise, including limited capital resources and possible cost overruns due
to price and cost increases in services and products.
We have no assurance that future financing will be available to us on acceptable
terms. If financing is not available on satisfactory terms, we may be unable to
continue, develop or expand our operations. Equity financing could result in
additional dilution to existing shareholders.
RESULTS OF OPERATIONS FOR PERIOD ENDING JUNE 30, 2010
We did not earn any revenues from our incorporation on April 21, 2010 to June
30, 2010. We incurred operating expenses in the amount of $7,264 for the period
from our inception on April 21, 2010 through June 30, 2010. These operating
expenses were comprised incorporation costs, web-marketing and other development
costs.
We have not attained profitable operations and are dependent upon obtaining
financing to continue with our business plan. For these reasons, there is
substantial doubt that we will be able to continue as a going concern.
54
LIQUIDITY AND CAPITAL RESOURCES
As of June 30, 2010, we had total current assets of $144,383, consisting of Cash
in the amount of $121,034 and Prepaid Expenses in the amount of $23,349. We had
$141,127 in current liabilities as of June 30, 2010. Thus, we have working
capital of $3,256 as of June 30, 2010.
Operating activities used $102,875 in cash for the period from April 21, 2010
(Date of Inception) until June 30, 2010. Our net loss of $6,627 combined with
$79,190 in deemed dividends and $23,349 in prepaid expenses are the basis for
our negative operating cash flow. Financing Activities during the period from
April 21, 2010 (Date of Inception) until June 30, 2010 generated $223,909 in
cash during the period, represented by $134,199 in related party notes and
$89,710 in proceeds from the sale of our common stock.
As of June 30, 2010, we have insufficient cash to operate our business at the
current level for the next twelve months and insufficient cash to achieve our
business goals. The success of our business plan beyond the next 12 months is
contingent upon us obtaining additional financing. We intend to fund operations
through debt and/or equity financing arrangements, which may be insufficient to
fund our capital expenditures, working capital, or other cash requirements. We
do not have any formal commitments or arrangements for the sales of stock or the
advancement or loan of funds at this time. There can be no assurance that such
additional financing will be available to us on acceptable terms, or at all.
GOING CONCERN
The Company has limited working capital, has incurred losses since inception,
and has not yet received revenues from sales of products or services. These
factors create substantial doubt about the Company's ability to continue as a
going concern. The financial statements do not include any adjustment that might
be necessary if the Company is unable to continue as a going concern.
The ability of Vantage Health to continue as a going concern is dependent on the
Company generating cash from the sale of its common stock and/or obtaining debt
financing and attaining future profitable operations. Management's plans include
selling its equity securities and obtaining debt financing to fund its capital
requirement and ongoing operations; however, there can be no assurance the
Company will be successful in these efforts.
OFF BALANCE SHEET ARRANGEMENTS
As of June 30, 2010, there were no off balance sheet arrangements.
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
We have had no changes in or disagreements with our accountants.
55
DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS
Our executive officers and directors and their age as of the date of this
prospectus is as follows:
DIRECTOR:
Name of Director Age
---------------- ---
Lisa Ramakrishnan 38
Stephen Lowe 52
EXECUTIVE OFFICERS:
Name of Officer Age Office
--------------- --- ------
Lisa Ramakrishnan 38 President, Chief Executive Officer,
Treasurer, Chief Financial Officer and
Chief Accounting Officer
Steven Lowe 52 Secretary
BIOGRAPHICAL INFORMATION
Set forth below is a brief description of the background and business experience
of our officers and directors.
Since our inception on April 21, 2010, Lisa Ramakrishnan has been our President,
Chief Executive Officer, Treasurer, Chief Financial Officer, Chief Accounting
Officer and a member of our board of directors. Lisa has not been a member of
the board of directors of any corporations during the last five years. She
intends to devote approximately 50% of her business time to our affairs.
Work History:
Currently CEO of Sahira Pty Ltd (privately held Australian investment company)
October 2008 to May 2009
Consultant Radiologist Imaging Partners Online UK
January 2007 to March 2008
Consultant Radiologist Fremantle Hospital
January 2001- January 2007
WA Radiology registrar training program Sir Charles Gairdner Hospital
56
During the past five years, Dr. Ramakrishnan has not been the subject to any of
the following events:
1. Any bankruptcy petition filed by or against any business of which Dr.
Ramakrishnan was a general partner or executive officer either at the
time of the bankruptcy or within two years prior to that time.
2. Any conviction in a criminal proceeding or being subject to a pending
criminal proceeding.
3. An order, judgment, or decree, not subsequently reversed, suspended or
vacated, or any court of competent jurisdiction, permanently or
temporarily enjoining, barring, suspending or otherwise limiting Dr.
Ramakrishnan's involvement in any type of business, securities or
banking activities.
4. Found by a court of competent jurisdiction (in a civil action), the
Securities and Exchange Commission or the Commodity Future Trading
Commission to have violated a federal or state securities or
commodities law, and the judgment has not been reversed, suspended or
vacated.
Since our inception on April 21, 2010, Steven Lowe has been our Secretary and a
member of our board of directors. Mr. Lowe is a member of the board of directors
of Receivable Acquisition Management Corporation (RCVA a publicly traded
company). . He intends to devote approximately 10% of his business time to our
affairs.
Work History
1991-Present
Attorney and founder of Lowe Law
During the past five years, Mr. Lowe has not been the subject to any of the
following events:
1. Any bankruptcy petition filed by or against any business of which Mr.
Lowe was a general partner or executive officer either at the time of
the bankruptcy or within two years prior to that time.
2. Any conviction in a criminal proceeding or being subject to a pending
criminal proceeding.
3. An order, judgment, or decree, not subsequently reversed, suspended or
vacated, or any court of competent jurisdiction, permanently or
temporarily enjoining, barring, suspending or otherwise limiting Mr.
Lowe involvement in any type of business, securities or banking
activities.
4. Found by a court of competent jurisdiction (in a civil action), the
Securities and Exchange Commission or the Commodity Future Trading
Commission to have violated a federal or state securities or
commodities law, and the judgment has not been reversed, suspended or
vacated.
57
TERM OF OFFICE
Our officers and directors are appointed for a one-year term to hold office
until the next annual general meeting of our shareholders or until removed from
office in accordance with our bylaws.
SIGNIFICANT EMPLOYEES
We have no significant employees other than our officers and directors. Moxisign
plans to employ operational staff( mainly administrative personnel) only once we
have been successful at tender as there is no certainty that we will obtain any
part of the tender. Hence for the initial 12-24 month period of the tender we
plan to have a supply agreement with our technology partner to provide fully
formulated ARV's in order to fulfil the tender requirements , we would only
therefore require a logistics company to do the distribution, which could be
outsourced and minimal staffing and administrative personnel. We would be
reliant on our technology partners commitment to proceed with the development of
an API production facility.We would be looking for skills transfer from our
technology partner in order to manage the facility initially until such time as
local staff can be trained either locally or overseas with the aid of our
technology partner.
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The table below summarizes all compensation awarded to, earned by, or paid to
our executive officers by any person for all services rendered in all capacities
to us for the fiscal period from our incorporation on April 21, 2010 to June 30,
2010 (our fiscal year end) and subsequent thereto to the date of this
prospectus.
58
SUMMARY COMPENSATION TABLE
Change in
Pension
Value and
Non-Equity Nonqualified
Name and Incentive Deferred
Principal Stock Option Plan Compensation All Other
Position Year Salary($) Bonus($) Awards($) Awards($) Compensation($) Earnings($) Compensation($) Totals($)
-------- ---- --------- -------- --------- --------- --------------- ----------- --------------- ---------
Lisa Ramakrishnan 2010 None None None None None None None None
President, CEO, CFO,
Treasurer, Chief
Accounting Officer,
and Director
Steven Lowe 2010 None None None None None None None None
Secretary and
Director
STOCK OPTION GRANTS
We have not granted any stock options to our executive officer since our
inception.
CONSULTING AGREEMENTS
We do not have an employment or consulting agreement with Lisa Ramakrishnan or
Steven Lowe. We do not pay them for acting as a director or officer at this
time.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table provides the names and addresses of each person known to us
to own more than 5% of our outstanding common stock as of the date of this
prospectus, and by the officers and directors, individually and as a group as at
June 30, 2010 except as otherwise indicated, all shares are owned directly.
59
Title of Name and address Amount of Percent
Class of beneficial owner beneficial ownership of class
----- ------------------- -------------------- --------
Common Lisa Ramakrishnan 60,000,000 80.92%
Stock President, Chief Executive Officer,
Chief Financial, Officer, Treasurer,
Chief Accounting Officer and sole
Director
17 Ouwingerd Road
Capetown South Africa 7806
Common All Officers and Directors as a 60,000,000 80.92%
Stock group that consists of one person shares
The percent of class is based on 74,150,000 shares of common stock issued and
outstanding as of the date of this prospectus.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Dr. Ramakrishnan purchased 60,000,000 shares of Vantage Health at a price of
$0.001 per share on May 22, 2010. She currently owns 80.92% of the company's
outstanding common stock. Dr. Ramkrishnan has loaned Vantage Health $30,000 that
is non interest bearing and due upon demand (see Exhibit 10.1). Athena Capital,
a shareholder of Vantage Health loaned the Company $3,500 that is non interest
bearing and due upon demand (see Exhibit 10.2). None of the following parties
has, since our date of incorporation, had any material interest, direct or
indirect, in any transaction with us or in any presently proposed transaction
that has or will materially affect us:
* Any relative or spouse of any of the foregoing persons who has the
same house as such person;
* Immediate family members of directors, director nominees, executive
officers and owners of 5% or more of our common stock.
Although Moxisign (PTY) Ltd is a private (non-public) South African entity, it
is the intention of management to treat all related party transactions as if
Moxisign were a publicly reporting company. There are two reasons for this; (1)
Moxisign's majority shareholder (Vantage Health) intends to become a publicly
reporting company, and (2) since Moxisign intends to supply government, it needs
to maintain tight fiscal discipline in terms of transparency and specifically,
the avoidance of conflicts of interest. In respect of the latter, it is the
60
policy of Moxisign to continue to independently audit its financial statements
(as required by law in terms of consolidation under Vantage Health for US
reporting purposes), and to have in place procedures to (a) review related party
transactions prior to execution thereof, and (b) to have any reasonable and
lawful related party transaction reviewed first by Moxisign's auditors. In the
first instance, it is the policy of Moxisign to have its board of directors
review and approve all related party transactions, regardless of size or nature.
Once approved by the board of directors, the transaction in question will be put
before the company's auditors and legal counsel for final approval, prior to
execution. In the case of a related party transaction directly involving Vantage
Health, the same procedures will apply, except that in this case, Vantage's US
auditors and legal counsel will first be consulted for an opinion, prior to
execution of the transaction in question.
TRANSACTIONS WITH PROMOTORS
Dr. Ramakrishnan would be considered as a promoter of the company. We know of no
other person that would quality as a promotor of our company.
DISCLOSURE OF COMMISSION POSITION OF INDEMNIFICATION FOR
SECURITIES ACT LIABILITIES
Our Directors and Officers areindemnified as provided by the Nevada Revised
Statutes and our Bylaws. We have been advised that in the opinion of the
Securities and Exchange Commission indemnification for liabilities arising under
the Securities Act is against public policy as expressed in the Securities Act,
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities is asserted by one of our directors, officers, or
controlling persons in connection with the securities being registered, we will,
unless in the opinion of our legal counsel the matter has been settled by
controlling precedent, submit the question of whether such indemnification is
against public policy to court of appropriate jurisdiction. We will then be
governed by the court's decision.
61
VANTAGE HEALTH, INC.
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2010
Report of Independent Registered Public Accounting Firm F-1
Consolidated Balance Sheet as of June 30, 2010 F-2
Consolidated Statement of Operations for the Period from
April 21, 2010 (Inception) to June 30, 2010 F-3
Consolidated Statement of Stockholders' Equity as of June 30, 2010 F-4
Consolidated Statement of Cash Flows for the Period from
April 21, 2010 (Inception) to June 30, 2010 F-5
Notes to Consolidated Financial Statements F-6
62
Silberstein Ungar, PLLC CPAs and Business Advisors
--------------------------------------------------------------------------------
Phone (248) 203-0080
Fax (248) 281-0940
30600 Telegraph Road, Suite 2175
Bingham Farms, MI 48025-4586
www.sucpas.com
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors
Vantage Health, Inc.
Cape Town, South Africa
We have audited the accompanying consolidated balance sheet of Vantage Health,
Inc. and subsidiary as of June 30, 2010, and the related consolidated statements
of operations, stockholders' equity, and cash flows for the period from April
21, 2010 (date of inception) to June 30, 2010. These financial statements are
the responsibility of the Company's management. Our responsibility is to express
an opinion on these financial statements based on our audit. We did not audit
the financial statements for the period referred to below of Moxisign Limited,
the investment in which, as disclosed in Note 5 of the consolidated financial
statements are accounted for by the acquisition method of accounting. The
financial statements of Moxisign Limited as of June 30, 2010 and for the period
then ended were audited by other auditors, whose report has been furnished to
us, and our opinion, insofar as it relates to the amounts included for Moxisign,
is based solely on the report of the other auditors.
We conducted our audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. The Company has determined that it
is not required to have, nor were we engaged to perform, an audit of its
internal control over financial reporting. Our audit included consideration of
internal control over financial reporting as a basis for designing audit
procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the Company's internal control
over financial reporting. Accordingly, we express no such opinion. An audit
includes examining on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation. We believe that our
audit provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Vantage Health, Inc.
and subsidiary, as of June 30, 2010 and the results of their operations and cash
flows for the period from April 21, 2010 (date of inception) to June 30, 2010,
in conformity with accounting principles generally accepted in the United States
of America.
The accompanying consolidated financial statements have been prepared assuming
that Vantage Health, Inc. will continue as a going concern. As discussed in Note
9 to the financial statements, the Company has incurred losses from operations,
has limited working capital, and is in need of additional capital to grow its
operations so that it can become profitable. These factors raise substantial
doubt about the Company's ability to continue as a going concern. Management's
plans with regard to these matters are described in Note 9. The accompanying
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.
/s/ Silberstein Ungar, PLLC
-------------------------------------
Silberstein Ungar, PLLC
Bingham Farms, Michigan
August 10, 2010
F-1
VANTAGE HEALTH, INC.
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED BALANCE SHEET
AS OF JUNE 30, 2010
2010
---------
ASSETS
Current Assets
Cash and equivalents $ 121,034
Prepaid expenses 23,349
---------
Total Current Assets 144,383
---------
TOTAL ASSETS $ 144,383
=========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable and accrued expenses $ 6,928
---------
Long - Term Liabilities
Shareholder loans 134,199
---------
Total Liabilities 141,127
---------
Stockholders' Equity
Common Stock, $.001 par value, 250,000,000 shares
authorized, 74,150,000 shares issued and outstanding 74,150
Additional paid-in capital 15,560
Non-controlling interest (637)
Deficit accumulated during the development stage (85,817)
---------
Total stockholders' equity 3,256
---------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 144,383
=========
See accompanying notes to financial statements.
F-2
VANTAGE HEALTH, INC.
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE PERIOD FROM APRIL 21, 2010 (INCEPTION) TO JUNE 30, 2010
Period from
April 21, 2010
(Inception) to
June 30, 2010
-------------
REVENUES $ 0
------------
EXPENSES
Professional fees 6,832
Office expenses 63
Travel and entertainment 142
Bank fees 227
------------
TOTAL OPERATING EXPENSES 7,264
------------
LOSS FROM OPERATIONS (7,264)
LESS: LOSS ATTRIBUTABLE TO NON-CONTROLLING INTEREST 637
------------
LOSS BEFORE PROVISION FOR INCOME TAXES (6,627)
PROVISION FOR INCOME TAXES 0
------------
NET LOSS $ (6,627)
============
BASIC AND DILUTED LOSS PER SHARE $ (0.00)
============
WEIGHTED AVERAGE COMMON SHARES OUTSANDING: BASIC AND DILUTED 36,777,641
============
See accompanying notes to financial statements.
F-3
VANTAGE HEALTH, INC.
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
FOR THE PERIOD FROM APRIL 21, 2010 (INCEPTION) TO JUNE 30, 2010
Deficit
Accumulated
Common Stock Additional During the
--------------------- Paid in Non-Controlling Development
Shares Amount Capital Interest Stage Total
------ ------ ------- -------- ----- -----
Inception, April 21, 2010 0 $ 0 $ 0 $ 0 $ 0 $ 0
Shares issued to founder for cash 60,000,000 60,000 -- -- -- 60,000
Shares issued for cash at $0.0015
per share 3,712,500 3,713 1,856 -- -- 5,569
Shares issued for cash at $0.002 5,000,000 5,000 5,000 -- -- 10,000
per share
Shares issued for cash at $0.0025
per share 3,700,000 3,700 5,550 -- -- 9,250
Shares issued for cash at
$0.00275 per share 1,287,500 1,287 2,254 -- -- 3,541
Shares issued for cash at $0.003
per share 450,000 450 900 -- -- 1,350
Deemed dividend created by
acquisition of 51% of entity
under common control -- -- -- -- (79,190) (79,190)
Net loss for the period ended
June 30, 2010 -- -- -- (637) (6,627) (7,264)
---------- ------- ------- ------ -------- --------
Balance, June 30, 2010 74,150,000 $74,150 $15,560 $ (637) $(85,817) $ 3,256
========== ======= ======= ====== ======== ========
See accompanying notes to financial statements.
F-4
VANTAGE HEALTH, INC.
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE PERIOD FROM APRIL 21, 2010 (INCEPTION) TO JUNE 30, 2010
Period from
April 21, 2010
(Inception) to
June 30, 2010
-------------
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss for the period $ (6,627)
Adjustments to Reconcile Net Loss to Net
Cash Used in Operating Activities:
Loss attributable to non-controlling interest (637)
Changes in assets and liabilities:
(Increase) in prepaid expenses (23,349)
Increase in accounts payable and accrued expenses 6,928
---------
CASH FLOWS USED BY OPERATING ACTIVITIES (23,685)
---------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from sales of common stock 89,710
Proceeds from note payable - related party 55,009
---------
CASH FLOWS PROVIDED BY FINANCING ACTIVITIES 144,719
---------
NET INCREASE IN CASH 121,034
Cash, beginning of period 0
---------
Cash, end of period $ 121,034
=========
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid for interest $ 0
=========
Cash paid for income taxes $ 0
=========
SUPPLEMENTAL NON-CASH INVESTING AND FINANCING INFORMATION:
Deemed dividend related to acquisition of subsidiary $ 79,190
=========
See accompanying notes to financial statements.
F-5
VANTAGE HEALTH, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2010
NOTE 1 - SUMMARY OF ACCOUNTING POLICIES
Nature of Business
Vantage Health, Inc. ("Vantage Health" and the "Company") is a development stage
company and was incorporated in Nevada on April 21, 2010.
The Company intends to build and operate an Active Pharmaceutical Ingredients
("APIs") manufacturing plant alongside a formulation and packaging plant in
South Africa to meet the growing market needs for Anti-retrovirals ("ARVs") in
South Africa and potentially other African countries. The company intends to
build an Antiretroviral Active Pharmaceutical Ingredient (API) manufacturing
plant in South Africa in order to supply the growing demand in the fight against
HIV/AIDS.
Development Stage Company
The accompanying consolidated financial statements have been prepared in
accordance with generally accepted accounting principles related to
development-stage companies. A development-stage company is one in which planned
principal operations have not commenced or if its operations have commenced, and
there has been no significant revenues there from.
Basis of Presentation
The consolidated financial statements of the Company have been prepared in
accordance with generally accepted accounting principles in the United States of
America and are presented in US dollars. The Company has adopted a June 30
fiscal year end.
Principles of Consolidation
The consolidated financial statements include the accounts of the Company and
its majority-owned subsidiary. Significant intercompany accounts and
transactions have been eliminated.
Cash and Cash Equivalents
Vantage Health considers all highly liquid investments with maturities of three
months or less to be cash equivalents. At June 30, 2010, the Company had
$121,034 of cash.
Fair Value of Financial Instruments
The Company's financial instruments consist of cash and cash equivalents,
prepaid expenses, accounts payable and accrued expenses and shareholder loans.
The carrying amount of these financial instruments approximates fair value due
either to length of maturity or interest rates that approximate prevailing
market rates unless otherwise disclosed in these financial statements.
Income Taxes
Income taxes are computed using the asset and liability method. Under the asset
and liability method, deferred income tax assets and liabilities are determined
based on the differences between the financial reporting and tax bases of assets
and liabilities and are measured using the currently enacted tax rates and laws.
A valuation allowance is provided for the amount of deferred tax assets that,
based on available evidence, are not expected to be realized.
Revenue Recognition
The Company recognizes revenue when products are fully delivered or services
have been provided and collection is reasonably assured.
F-6
VANTAGE HEALTH, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2010
NOTE 1 - SUMMARY OF ACCOUNTING POLICIES (CONTINUED)
Use of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date the financial statements and the
reported amount of revenues and expenses during the reporting period. Actual
results could differ from those estimates.
Basic Income (Loss) Per Share
Basic income (loss) per share is calculated by dividing the Company's net loss
applicable to common shareholders by the weighted average number of common
shares during the period. Diluted earnings per share is calculated by dividing
the Company's net income available to common shareholders by the diluted
weighted average number of shares outstanding during the year. The diluted
weighted average number of shares outstanding is the basic weighted number of
shares adjusted for any potentially dilutive debt or equity. There are no such
common stock equivalents outstanding as of June 30, 2010.
Stock-Based Compensation
Stock-based compensation is accounted for at fair value in accordance with SFAS
No. 123 and 123 (R) (ASC 718). To date, the Company has not adopted a stock
option plan and has not granted any stock options.
Recent Accounting Pronouncements
The Company does not expect the adoption of recently issued accounting
pronouncements to have a significant impact on the Company's results of
operations, financial position or cash flow.
NOTE 2 - PREPAID EXPENSES
The amount recorded as prepaid expense at June 30, 2010 is for consulting
services to be used over the next twelve months. Prepaid expenses were $23,349
as of June 30, 2010.
NOTE 3 - SHAREHOLDER LOANS
During the period ended June 30, 2010 the company received loans from two
shareholders for $100,699, $30,000 and $3,500. The loans are non-interest
bearing, unsecured and are due on July 13, 2013. The total amount due to
shareholders was $134,199 as of June 30, 2010.
NOTE 4 - COMMON STOCK
The Company has 250,000,000 shares of $0.001 par value common stock.
During the period ended June 30, 2010 the Company issued 74,150,000 shares of
common stock ranging from $0.001 to $0.003 per share. Vantage received total
proceeds of $89,710.
There are 74,150,000 shares issued and outstanding as of June 30, 2010.
F-7
VANTAGE HEALTH, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2010
NOTE 5 - STOCK WARRANTS
The Company issued 7,859,375 stock warrants in connection with the issuance of
common stock. The Company has accounted for these warrants as equity instruments
in accordance with EITF 00-19 (ASC 815-40), Accounting for Derivative Financial
Instruments Indexed to, and Potentially Settled in, a Company's Own Stock, and
as such, will be classified in stockholders' equity as they meet the definition
of "...indexed to the issuer's stock" in EITF 01-06 (ASC 815-40) The Meaning of
Indexed to a Company's Own Stock. The Company has estimated the fair value of
the warrants issued in connection with the private placement at $13 as of the
grant dates using the Black-Scholes option pricing model. Each common stock
purchase warrant has an exercise price of $3.00 and will expire 36 months from
the effective date of the S-1. The Company has the right to call the common
stock purchase warrants within ten days written notice if the Company's common
stock is trading at or above $3.00 per share and has average daily trading
volume of 200,000 shares of twenty consecutive days. No adjustment was made to
the financial statements due to materiality.
Key assumptions used by the Company are summarized as follows:
Stock price $0.00275
Exercise price $3.00
Expected volatility 105%
Expected dividend yield 0.00%
Risk-free rate over the estimated expected
life of the warrants 0.84%
Expected term (in years) 3
A Stock Price of $0.00275 was used in valuing the warrants. The stock price was
based on the per share issuance price from recent unrelated third party private
placements. Volatility was computed based on the average volatility of similar
companies in the healthcare business.
NOTE 6 - NON-CONTROLLING INTEREST
On June 14, 2010, Vantage acquired 51% of an entity under common control for
cash totaling $3,643. For purposes of these financial statements, the subsidiary
has been consolidated via the acquisition method. We have recorded a deemed
dividend of $79,190msince the book value of Moxisign's liabilities exceeded the
book value of its assets.
NOTE 7 - INCOME TAXES
For the period ended June 30, 2010, Vantage Health has incurred net losses and,
therefore, has no tax liability. The net deferred tax asset generated by the
loss carry-forward has been fully reserved. The cumulative net operating loss
carry-forward is approximately $6,627 at June 30, 2010, and will expire
beginning in the year 2030.
The provision for Federal income tax consists of the following:
2010
-------
Refundable Federal income tax attributable to:
Current Operations $ 2,253
Less: valuation allowance (2,253)
-------
Net provision for Federal income taxes $ 0
=======
F-8
VANTAGE HEALTH, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2010
NOTE 7 - INCOME TAXES (CONTINUED)
The cumulative tax effect at the expected rate of 34% of significant items
comprising our net deferred tax amount is as follows:
2010
-------
Deferred tax asset attributable to:
Net operating loss carryover $ 2,253
Valuation allowance (2,253)
-------
Net deferred tax asset $ 0
=======
NOTE 8 - COMMITMENTS
Vantage Health neither owns nor leases any real or personal property. An officer
has provided office services without charge. There is no obligation for the
officer to continue this arrangement. Such costs are immaterial to the financial
statements and accordingly are not reflected herein. The officers and directors
are involved in other business activities and most likely will become involved
in other business activities in the future.
NOTE 9 - LIQUIDITY AND GOING CONCERN
The Company has limited working capital, has incurred losses since inception,
and has not yet received revenues from sales of products or services. These
factors create substantial doubt about the Company's ability to continue as a
going concern. The financial statements do not include any adjustment that might
be necessary if the Company is unable to continue as a going concern.
The ability of Vantage Health to continue as a going concern is dependent on the
Company generating cash from the sale of its common stock and/or obtaining debt
financing and attaining future profitable operations. Management's plans include
selling its equity securities and obtaining debt financing to fund its capital
requirement and ongoing operations; however, there can be no assurance the
Company will be successful in these efforts.
NOTE 10 - SUBSEQUENT EVENTS
Management has evaluated subsequent events through August 10, the date on which
the financial statements were issued, and has determined it does not have any
material subsequent events to disclose.
F-9
WHERE YOU CAN FIND MORE INFORMATION
We have filed a registration statement on Form S-1 under the Securities Act with
the SEC with respect to the shares of our common stock offered through this
prospectus. This prospectus is filed as a part of that registration statement
but does not contain all of the information contained in the registration
statement and exhibits. Statements made in the registration statement are
summaries of the material terms of the referenced contracts, agreements or
documents of our company. You may inspect the registration statement, exhibits
and schedules filed with the SEC at the SEC's principal office in Washington,
D.C. Copies of all or any part of the registration statement may be obtained
from the Public Reference Section of the SEC, at 100 F Street, NE, Washington,
D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further information on the
operation of the public reference rooms. The SEC also maintains a web site at
http://www.sec.gov that contains reports, proxy statements and information
regarding registrants that file electronically with the SEC. Our registration
statement and the referenced exhibits can also be found on this site.
We are not currently subject to the Exchange Act and currently are not required
to, and do not, deliver annual, quarterly or special reports to stockholders. We
will not deliver such reports to our stockholders until after, and if, this
offering is declared effective by the SEC. Once such effectiveness is granted,
if ever, we plan to file a registration statement pursuant to the Exchange Act
in order to register our common stock under Section 12(g) of the Exchange Act.
Upon our common stock becoming registered under the Exchange Act we will be
required to file annual, quarterly and current reports, proxy statements and
other information with the SEC. Our SEC filings will be available to the public
over the Internet at the SEC's website at http://www.sec.gov.
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The estimated costs of this offering are as follows:
Securities and Exchange Commission registration fee $ 3.03
Transfer Agent Fees $ 3,000.00
Accounting fees and expenses $ 5,000.00
Legal fees and expenses $ 4,500.00
Edgar filing fees $ 750.00
----------
Total $13,253.03
==========
All amounts are estimates other than the Commission's registration fee.
We are paying all expenses of the offering listed above. No portion of these
expenses will be borne by the selling shareholders. The selling shareholders,
however, will pay any other expenses incurred in selling their common stock,
including any brokerage commissions or other costs of sale.
INDEMNIFICATION OF DIRECTORS AND OFFICERS
Our sole officer and director is indemnified as provided by the Nevada Revised
Statutes and our bylaws.
Under the NRS, director immunity from liability to a company or its shareholders
for monetary liabilities applies automatically unless it is specifically limited
by a company's articles of incorporation; that is not the case with our articles
of incorporation. Excepted from that immunity are:
(1) a willful failure to deal fairly with the company or its shareholders
in connection with a matter in which the director has a material
conflict of interest;
(2) a violation of criminal law (unless the director had reasonable cause
to believe that his or her conduct was lawful or no reasonable cause
to believe that his or her conduct was unlawful);
(3) a transaction from which the director derived an improper personal
profit; and
(4) willful misconduct.
II-1
Our bylaws provide that we will indemnify our directors and officers to the
fullest extent not prohibited by Nevada law; provided, however, that we may
modify the extent of such indemnification by individual contracts with our
directors and officers; and, provided, further, that we shall not be required to
indemnify any director or officer in connection with any proceeding (or part
thereof) initiated by such person unless:
(1) such indemnification is expressly required to be made by law;
(2) the proceeding was authorized by our Board of Directors;
(3) such indemnification is provided by us, in our sole discretion,
pursuant to the powers vested us under Nevada law; or
(4) such indemnification is required to be made pursuant to the bylaws.
Our bylaws provide that we will advance all expenses incurred to any person who
was or is a party or is threatened to be made a party to any threatened, pending
or completed action, suit or proceeding, whether civil, criminal, administrative
or investigative, by reason of the fact that he is or was our director or
officer, or is or was serving at our request as a director or executive officer
of another company, partnership, joint venture, trust or other enterprise, prior
to the final disposition of the proceeding, promptly following request. This
advance of expenses is to be made upon receipt of an undertaking by or on behalf
of such person to repay said amounts should it be ultimately determined that the
person was not entitled to be indemnified under our bylaws or otherwise.
Our bylaws also provide that no advance shall be made by us to any officer in
any action, suit or proceeding, whether civil, criminal, administrative or
investigative, if a determination is reasonably and promptly made: (a) by the
board of directors by a majority vote of a quorum consisting of directors who
were not parties to the proceeding; or (b) if such quorum is not obtainable, or,
even if obtainable, a quorum of disinterested directors so directs, by
independent legal counsel in a written opinion, that the facts known to the
decision- making party at the time such determination is made demonstrate
clearly and convincingly that such person acted in bad faith or in a manner that
such person did not believe to be in or not opposed to our best interests.
RECENT SALES OF UNREGISTERED SECURITIES
We issued 60,000,000 shares of our common stock to Lisa Ramakrishnan on May 22,
2010. Dr. Ramakrishnan is our President, Chief Executive Officer, Treasurer and
a director. She acquired these 60,000,000 shares at a price of $0.001 per share
for total proceeds to us of $60,000.00. These shares were issued pursuant to
Section 4(2) of the Securities Act of 1933 (the "Securities Act").
In connection with this issuance, Dr. Ramakrishnan was provided with access to
all material aspects of the company, including the business, management,
offering details, risk factors and financial statements.
II-2
She also represented to us that she was acquiring the shares as principal for
her own account with investment intent. She also represented that she was
sophisticated, having prior investment experience and having adequate and
reasonable opportunity and access to any corporate information necessary to make
an informed decision. This issuance of securities was not accompanied by general
advertisement or general solicitation. The shares were issued with a Rule 144
restrictive legend.
We completed an offering of 3,712,500 shares of our common stock at a price of
$0.0015 per share to Athena Capital on May 28, 2010 for a total proceeds of
$5,568.75. We completed this offering pursuant to Regulation S of the Securities
Act
We completed an offering of 5,000,000 shares of our common stock at a price of
$0.002 per share to the to following three parties on June 20, 2010 for a total
proceeds of $10,000. We completed this offering pursuant to Regulation S of the
Securities Act.
Name of Subscriber Number of Shares
------------------ ----------------
Robin Phillips 1,000,000
Berkshire Int'l Finance *1 3,500,000
Fillmore East Food & Bev *1 500,000
We completed an offering of 3,700,000 shares of our common stock at a price of
$0.0025 per share to the following 19 parties on June 25, 2010 for a total
proceeds of $9,125. We completed this offering pursuant to Regulation S of the
Securities Act.
Name of Subscriber Number of Shares
------------------ ----------------
Fillmore East Food & Bev *1 2,500,000
Julius R. Luthy 100,000
Julius Luthy 100,000
Thomas Mani 100,000
Donald N Schnyder 100,000
Heinz D. Zimmer 100,000
Thor Enterprise International 50,000
Mark Murphy 50,000
Carmela Smedsrud 50,000
Kelly Paolini 50,000
II-3
Shelby Aldous 50,000
Erin Murphy 50,000
Torey Gault 50,000
Claudia DiNatale 50,000
Maria DiNatale 50,000
Dennis Mendoza 50,000
Vannarith Mak 50,000
James Walls 50,000
Andre Mailloux 100,000
We completed an offering of 1,287,500 shares of our common stock at a price of
$0.00275 per share to the following two parties on June 26, 2010 for a total
proceeds of $3,540. We completed this offering pursuant to Regulation D of the
Securities Act.
Name of Subscriber Number of Shares
------------------ ----------------
HealthInvest Partners LLC *1 500,000
Indus Consulting Inc. *1 787,500
We completed an offering of 450,000 shares of our common stock at a price of
$0.003 per share to the following seven parties on June 28, 2010 for a total
proceeds of $1,350. We completed this offering pursuant to Regulation D of the
Securities Act.
Name of Subscriber Number of Shares
------------------ ----------------
Orly G. Leif 50,000
Randy Leif 50,000
Anna Castoro 50,000
Michael Castoro 50,000
Steven Figliolini 50,000
Gold Coast Environmental *1 100,000
Catherine A. Huard 100,000
II-4
1 - Voting or Investment Control for the above corps are in the names of the
following individuals:
1) Athena Capital Ltd.: Jonathan Rosen
2) Berkshire International Finance, Inc.: John Figliolini
3) Fillmore East Food & Beverage, Inc.: Claudia DiNatale
4) Thor Enterprise International, Inc.: Demitry Kambolin
5) HealthInvest Partners LLC.: Mustafa Khan
6) Indus Consulting Inc.: Mehtab Sultana
7) Gold Coast Environmental Solutions, Inc.: Catherine Huard
REGULATION S COMPLIANCE
Each offer or sale was made in an offshore transaction;
We did not make any directed selling efforts in the United States. We also did
not engage any distributors, any respective affiliates, nor any other person on
our behalf to make directed selling efforts in the United States;
Offering restrictions were, and are, implemented;
No offer or sale was made to a U.S. person or for the account or benefit of a
U.S. person;
Each purchaser of the securities certifies that it was not a U.S. person and was
not acquiring the securities for the account or benefit of any U.S. person;
Each purchaser of the securities agreed to resell such securities only in
accordance with the provisions of Regulation S, pursuant to registration under
the Securities Act of 1933, or pursuant to an available exemption from
registration; and agreed not to engage in hedging transactions with regard to
such securities unless in compliance with the Securities Act of 1933;
The securities contain a legend to the effect that transfer is prohibited except
in accordance with the provisions of Regulation S, pursuant to registration
under the Securities Act of 1933, or pursuant to an available exemption from
registration; and that hedging transactions involving those securities may not
be conducted unless in compliance with the Securities Act of 1933; and
We are required, either by contract or a provision in its bylaws, articles,
charter or comparable document, to refuse to register any transfer of the
securities not made in accordance with the provisions of Regulation S pursuant
to registration under the Securities Act of 1933, or pursuant to an available
exemption from registration.
REGULATION D COMPLIANCE
These securities were issued pursuant to Section 4(2) of the Securities Act
and/or Rule 504 promulgated thereunder. Each purchaser represented his intention
to acquire the securities for investment only and not with a view toward
distribution. We did not engage in any public solicitation or general
advertising. Each investor was given adequate access to sufficient information
about us to make an informed investment decision. None of the securities were
sold through an underwriter and accordingly, there were no underwriting
II-5
discounts or commissions involved. No registration rights were granted to any of
the purchasers. We issued the stock certificates and affixed the appropriate
legends to the restricted stock.
EXHIBITS
Exhibit
Number Description
------ -----------
3.1 Articles of Incorporation *
3.2 By-Laws *
5.1 Legal opinion of Scott P. Doney
10.1 Loan Agreement Lisa Ramakrishnan to Vantage Health *
10.2 Loan Agreement Athena Capital to Vantage Heath *
10.3 Supply Agreement Amol
10.4 Consulting Agreement Salim Essa
23.1 Consent of Silberstein Ungar, PLLC.
----------
* Previously filed
THE UNDERSIGNED REGISTRANT HEREBY UNDERTAKES:
THE UNDERSIGNED REGISTRANT HEREBY UNDERTAKES:
1. To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(a) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(b) To reflect in the prospectus any facts or events arising after the
effective date of this registration statement, or most recent
post-effective amendment, which, individually or in the aggregate,
represent a fundamental change in the information set forth in this
registration statement; Notwithstanding the forgoing, any increase or
decrease in Volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the or high end of the estimated maximum offering range
may be reflected in the form of prospectus filed with the commission
pursuant to Rule 424(b)if, in the aggregate, the changes in the volume
and price represent no more than 20% change in the maximum aggregate
offering price set forth in the "Calculation of Registration Fee"
table in the effective registration statement.
(c) To include any material information with respect to the plan of
distribution not previously disclosed in this registration statement
or any material change to such information in the registration
statement.
II-6
2. That, for the purpose of determining any liability under the Securities
Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered herein, and the
offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
3. To remove from registration by means of a post-effective amendment any of
the securities being registered hereby which remain unsold at the
termination of the offering.
4. Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to officers, directors, and controlling persons pursuant
to the provisions above, or otherwise, we have been advised that in the
opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Securities Act, and is,
therefore, unenforceable. In the event that a claim for indemnification
against such liabilities is asserted our director, officer, or other
controlling person in connection with the securities registered, we will,
unless in the opinion of our legal counsel the matter has been settled by
controlling precedent, submit the question of whether such indemnification
is against public policy to a court of appropriate jurisdiction. We will
then be governed by the final adjudication of such issue.
5. Each prospectus filed pursuant to Rule 424(b) as part of a Registration
statement relating to an offering, other than registration statements
relying on Rule 430(B) or other than prospectuses filed in reliance on Rule
430A, shall be deemed to be part of and included in the registration
statement as of the date it is first used after effectiveness. Provided
however, that no statement made in a registration statement or prospectus
that is part of the registration statement or made in a document
incorporated or deemed incorporated by referenced into the registration
statement or prospectus that is part of the registration statement will, as
to a purchaser with a time of contract of sale prior to such first use,
supersede or modify any statement that was made in the registration
statement or prospectus that was part of the registration statement or made
in any such document immediately prior to such date of first use.
Insofar as indemnification for liabilities arising under the Securities Act may
be permitted to our directors, officers and controlling persons pursuant to the
provisions above, or otherwise, we have been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public policy
as expressed in the Securities Act, and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities, other
than the payment by us of expenses incurred or paid by one of our directors,
officers, or controlling persons in the successful defense of any action, suit
or proceeding, is asserted by one of our directors, officers, or controlling
persons in connection with the securities being registered, we will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification is against public policy as expressed in the Securities Act, and
we will be governed by the final adjudication of such issue.
II-7
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant has
duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized in the Carson City, State of Nevada, on
October 20, 2010
Vantage Health
By: /s/ Lisa Ramakrishnan
-------------------------------------
Lisa Ramakrishnan
President, Chief Executive Officer,
Treasurer, Chief Accounting Officer,
Chief Financial Officer and Director
By: /s/ Steven Lowe
-------------------------------------
Steven Lowe
Secretary and Director
Pursuant to the requirements of the Securities Act of 1933, this registration
statement has been signed by the following persons in the capacities and on the
dates stated.
Signature Capacity in Which Signed Date
--------- ------------------------ ----
/s/ Lisa Ramakrishnan President, Chief Executive October 20, 2010
------------------------------------ Officer, Treasurer,
Lisa Ramakrishnan Chief Accounting Officer,
Chief Financial Officer
and Director
/s/ Steven Lowe Secretary and Director October 20, 2010
------------------------------------
Steven Lowe
II-
