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EX-10.8 - InterCore, Inc. | v205608_ex10-8.htm |
EX-10.9 - InterCore, Inc. | v205608_ex10-9.htm |
EX-10.11 - InterCore, Inc. | v205608_ex10-11.htm |
EX-10.10 - InterCore, Inc. | v205608_ex10-10.htm |
EX-10.13 - InterCore, Inc. | v205608_ex10-13.htm |
EX-10.12 - InterCore, Inc. | v205608_ex10-12.htm |
EX-10.14 - InterCore, Inc. | v205608_ex10-14.htm |
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
Form
8-K
Current
Report
Pursuant
to Section 13 or 15(d) of The Securities Exchange Act of 1934
Date
of Report (Date of earliest event reported):
|
December
15, 2010
(December
10, 2010)
|
I-WEB
MEDIA, INC.
(Exact
name of registrant as specified in its charter)
Delaware
(State
or other
jurisdiction
of incorporation)
|
000-54012
(Commission
File
Number)
|
27-2506234
(I.R.S.
Employer
Identification
No.)
|
1
International Boulevard, Suite 400
Mahwah,
NJ 07495
(Address
of principal executive offices) (zip code)
(201)
512-8732
(Registrant’s
telephone number, including area code)
706
Hillcrest Drive
Richmond,
Texas 77469
(Former
name or former address, if changed since last report.)
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
¨ Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
¨ Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
¨ Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
¨ Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
SPECIAL
NOTE REGARDING FORWARD-LOOKING STATEMENTS
This document contains forward-looking
statements within the meaning of the Securities Exchange Act of 1934, as amended
(the “Exchange Act”). These statements are based on management’s
beliefs and assumptions, and on information currently available to
management. Forward-looking statements include the information
concerning possible or assumed future results of operations of the Company
Forward-looking statements also include statements in which words such as
“expect,” “anticipate,” “intend,” “plan,” “believe,” “estimate,” “consider,”
or similar expressions are used.
Forward-looking statements are not
guarantees of future performance. They involve risks, uncertainties,
and assumptions. The Company’s future results and shareholder values
may differ materially from those expressed in these forward-looking
statements. Readers are cautioned not to put undue reliance on any
forward-looking statements.
ITEM
1.01 ENTRY INTO A MATERIAL
DEFINITIVE AGREEMENT
New Horizon
Transaction
On December
8, 2010, we entered into an Asset Purchase Agreement with New Horizon, Inc., a
Texas corporation (the “New Horizon Agreement”). On December 9, 2010,
the transactions contemplated by the New Horizon Agreement closed (the
“Closing”). Pursuant to the New Horizon Agreement, we acquired
certain assets from New Horizon, including the right to receive any proceeds New
Horizon is entitled to receive from the sale of the Myself® pelvic muscle
trainer. The calculation of the amounts we are entitled to receive
from the sales of the Myself® pelvic muscle trainer are listed on Exhibit A to the New
Horizon Agreement, which is attached hereto as Exhibit
10.8.
Under the
New Horizon Agreement, as consideration for the Asset, we agreed to issue to New
Horizon the following: (i) a convertible promissory note in the principal amount
of Two Million Dollars ($2,000,000), convertible into our common stock at the
conversion ratio of One Dollar Fifty Cents ($1.50) per share, with the option by
us to pay the note with our common stock in lieu of cash at the rate of one
shares of our common stock per One Dollar ($1) being paid (see Exhibit 10.2,
attached hereto); (ii) Four Million (4,000,000) shares of our common stock,
restricted in accordance with Rule 144; and (iii) Three Million (3,000,000)
shares of a new series of preferred stock (the “Series B Convertible Preferred
Stock”) to be created by us, restricted in accordance with Rule 144, with the
following rights and preferences: (i) dividend rights equal to the dividend
rights of our common stock; (ii) liquidation preference over our common stock
and equal to that of our Series A Convertible Preferred Stock; (iii) each share
of Series B Convertible Preferred Stock will be convertible into five (5) shares
of our common stock; (iv) no redemption rights; (v) no call rights by us; and
(vi) each share of Series B Convertible Preferred Stock will have one (1) vote
on all matters validly brought to our common stockholders, with the other rights
and preferences to be determined by the our Board of Directors. Under
the terms of the New Horizon Agreement we may be obligated to issue up to an
additional Two Million (2,000,000) shares of our common stock and One Million
Five Hundred Thousand (1,500,000) shares of the Series B Preferred Stock, with
the exact number of additional shares to be issued, if any, being dependent upon
the fair market value of our common stock in July 2012, as set forth in the New
Horizon Agreement.
RWIP
Transaction
On December
10, 2010, we entered into an Asset Purchase Agreement with RWIP, LLC, an Oregon
limited liability company (the “RWIP Agreement”). On December 13,
2010, the transactions contemplated by the RWIP Agreement closed (the
“Closing”). Pursuant to the RWIP Agreement, we acquired certain
assets from RWIP, including a patent application and related rights for a novel
medical applicator that is capable of delivering medicants and internal
devices within the body in an atraumatic fashion (meaning without producing
injury or damage). The description of the assets is listed on Exhibit A to the RWIP
Agreement, which is attached hereto as Exhibit
10.11.
2
Under the
RWIP Agreement, as consideration for the Asset, we agreed to issue the
following: (i) a convertible promissory note in the principal amount of One
Hundred Twenty Five Thousand Dollars ($125,000), convertible into our common
stock at the conversion ratio of One Dollar Fifty Cents ($1.50) per share, (ii)
a warrant to purchase One Hundred Fifty Thousand (150,000) shares of our common
stock, restricted in accordance with Rule 144, with an exercise price of Two
Dollars ($2) per share, and (iii) royalties equal to Twenty Percent (20%) of the
net income (revenue minus expenses) received by us in connection with the assets
purchased from RWIP (in order to calculate this amount the revenue and
expenses related to the RWIP assets will be calculated separately from our other
business assets).
Consulting
Agreement
On December 13, 2010, we entered into a
Consulting Agreement with RWIP, LLC, under which RWIP, LLC is to provide a
variety of services, including testing, development, marketing, and selling
products based on the medical applicator asset. Under the terms of
the agreement, we are obligated to pay RWIP, LLC, an upfront $30,000 retainer
and then $10,000 per month cash for the next twelve (12) months, assuming
certain performance thresholds are met by RWIP with regards to developing the
assets.
ITEM
2.01 COMPLETION OF ACQUISITION OR
DISPOSITION OF ASSETS
On
December 9, 2010, we closed the transaction that is the subject of the New
Horizon Agreement, and on December 13, 2010, we closed the transaction that is
the subject of the RWIP Agreement. Pursuant to the New Horizon
Agreement and the RWIP Agreement we acquired certain assets of New Horizon and
RWIP, respectively, as described herein.
FORM
10 DISCLOSURE
As
disclosed elsewhere in this Current Report, on December 9, 2010 and December 13,
2010, we acquired certain assets of New Horizon and RWIP, respectively, as
described herein.
Prior to
these acquisitions we were a shell company. Following these
acquisitions we are no longer a shell company, and as a result we need to file
certain information regarding our new assets and operations.
Accordingly,
we are providing the following information in this Current Report.
DESCRIPTION
OF BUSINESS
History
and Development of the Company
I-Web
Media, Inc. was incorporated in Delaware on April 29, 2010. At the
time of our incorporation we were a website design service company, but have
never had any material operations. On October 28, 2010, the holder of
the majority of our common stock, as well as one of our officers and directors,
Mr. Kenneth S. Barton, entered into an Agreement to Purchase Common Stock with
Rockland Group, LLC, a Texas limited liability company (“Rockland”), under which
Rockland agreed to purchase an aggregate of 10,000,000 shares of our common
stock from Mr. Barton in exchange for $250,000. These shares
represent approximately 90% of our outstanding common stock. The
transaction closed November 3, 2010. We were a party to the Agreement
for the purpose of acknowledging certain representations and warranties about
the company in the Agreement.
As a
result of the Agreement to Purchase Common Stock between Mr. Barton and
Rockland, all of our officers and one of our directors resigned immediately, and
we appointed one new director and retained new executive officers. In
addition, we changed our business focus from a website design service company to
one focusing on investments and purchasing opportunities primarily in products
and companies involved in the emerging and important market segments of clean
and renewable energy, medical technology, nanotechnology, and
environmentally-friendly (green) waste management.
3
On
November 19, 2010, we filed a Preliminary 14-C Information Statement, and on
December 7, 2010, we filed a Definitive 14-C Information Statement, which was
subsequently mailed to our shareholders, for the purpose of effectuating the
following: (i) appointing two additional members to our Board of Directors; (ii)
amending and restating our Articles of Incorporation to change our name to
Heartland Bridge Capital, Inc. and increasing our authorized common stock from
100,000,000 shares to 250,000,000 shares; (iii) amending and restating our
Bylaws; (iv) changing our fiscal year from March 31st to
December 31st; and
(v) authorizing our Board of Directors to effectuate a future forward stock
split of our common stock if they deem it in the best interests of the
company. We believe these matters will go effective on December 29,
2010.
On December
8, 2010, we entered into an Asset Purchase Agreement with New Horizon, Inc., a
Texas corporation (the “New Horizon Agreement”). On December 9, 2010,
the transactions contemplated by the New Horizon Agreement closed (the
“Closing”). Pursuant to the New Horizon Agreement, we acquired
certain assets from New Horizon, including the right to receive any proceeds New
Horizon is entitled to receive from the sale of the Myself® pelvic muscle
trainer. The calculation of the amounts we are entitled to receive
from the sales of the Myself® pelvic muscle trainer are listed on Exhibit A to the New
Horizon Agreement, which is attached hereto as Exhibit
10.8.
Under the
New Horizon Agreement, as consideration for the Asset, we agreed to issue to New
Horizon the following: (i) a convertible promissory note in the principal amount
of Two Million Dollars ($2,000,000), convertible into our common stock at the
conversion ratio of One Dollar Fifty Cents ($1.50) per share, with the option by
us to pay the note with our common stock in lieu of cash at the rate of one
share of our common stock per One Dollar ($1) being paid (see Exhibit 10.2,
attached hereto); (ii) Four Million (4,000,000) shares of our common stock,
restricted in accordance with Rule 144; and (iii) Three Million (3,000,000)
shares of a new series of preferred stock (the “Series B Convertible Preferred
Stock”) to be created by us, restricted in accordance with Rule 144, with the
following rights and preferences: (i) dividend rights equal to the dividend
rights of our common stock; (ii) liquidation preference over our common stock
and equal to that of our Series A Convertible Preferred Stock; (iii) each share
of Series B Convertible Preferred Stock will be convertible into five (5) shares
of our common stock; (iv) no redemption rights; (v) no call rights by us; and
(vi) each share of Series B Convertible Preferred Stock will have one (1) vote
on all matters validly brought to our common stockholders, with the other rights
and preferences to be determined by the our Board of Directors. Under
the terms of the New Horizon Agreement we may be obligated to issue up to an
additional Two Million (2,000,000) shares of our common stock and One Million
Five Hundred Thousand (1,500,000) shares of the Series B Preferred Stock, with
the exact number of additional shares to be issued, if any, being dependent upon
the fair market value of our common stock in July 2012, as set forth in the New
Horizon Agreement.
On December
10, 2010, we entered into an Asset Purchase Agreement with RWIP, LLC, an Oregon
limited liability company (the “RWIP Agreement”). On December 13,
2010, the transactions contemplated by the RWIP Agreement closed (the
“Closing”). Pursuant to the Agreement, we acquired certain assets
from RWIP, including a patent for a revolutionary tampon
applicator. The description of the assets is listed on Exhibit A to the RWIP
Agreement, which is attached hereto as Exhibit
10.11.
Under the
RWIP Agreement, as consideration for the Asset, we agreed to issue the
following: (i) a convertible promissory note in the principal amount of One
Hundred Twenty Five Thousand Dollars ($125,000), convertible into our common
stock at the conversion ratio of One Dollar Fifty Cents ($1.50) per share, (ii)
a warrant to purchase One Hundred Fifty Thousand (150,000) shares of our common
stock, restricted in accordance with Rule 144, with an exercise price of Two
Dollars ($2) per share, and (iii) royalties equal to Twenty Percent (20%) of the
net income (revenue minus expenses) received by us in connection with the assets
purchased from RWIP (in order to calculate this amount the revenue and
expenses related to the RWIP assets will be calculated separately from our other
business assets).
Myself® Cash
Flow
As a
result of our transaction with New Horizon, Inc., described above, we purchased
the right to receive New Horizon’s distributions from sales of the Myself®
pelvic muscle trainer. We did not acquire the product or any equity
in the company that owns the Myself® pelvic muscle trainer; we purchased the
rights to receive certain distributions based on the revenue generated by sales
of the Myself® pelvic muscle trainer. The calculation of the amounts
we are entitled to receive from the sales of the Myself® pelvic muscle trainer
are listed on Exhibit
A to the New Horizon Agreement, which is attached hereto as Exhibit
10.8.
4
Products
and Services
As noted above, we purchased a right to
receive certain distributions based on the sales of the Myself® pelvic muscle
trainer, we do not own the product itself or any equity in the consumer products
company that is the owner of the Myself® pelvic muscle
trainer. However, we believe some information regarding the Myself®
pelvic muscle trainer will better allow investors and shareholders to understand
the product upon which our revenue stream right is based.
The
Myself® pelvic muscle trainer is the first FDA cleared, non-prescription product
available direct to the consumer for the treatment of female
incontinence. This innovative device may provide some consumers a
truly “curative” private solution to female incontinence. The product is a
home-use biofeedback product with proprietary technology that allows a woman to
successfully strengthen her pelvic floor muscles on her own. In addition
to urinary incontinence, the Myself® product is an effective therapeutic choice
for a number of other pelvic floor weakness-related conditions affecting
millions of women. These include conditions arising out of pregnancy,
menopausal symptoms, pelvic organ relaxation, and female sexual
dysfunction.
The
Urinary Incontinence Marketplace; Customers
According to various market studies
related to female incontinence:
-
|
over
1 in 3 women experience urinary incontinence at least once a
month
|
|
|
-
|
over
40% of women experience sexual
dissatisfaction
|
|
-
|
an
estimated 37 million women suffer from menopausal
symptoms
|
|
-
|
over
38% of women ages 50-79 have some form of
prolapse
|
|
-
|
approximately
15% of women of age 18-50 experience chronic pelvic
pain
|
|
-
|
over
95% of adult women suffer from occasional vaginal dryness or more frequent
vaginal discomfort symptoms
|
As a result of the above figures, the
marketplace for female incontinence medical devices, especially ones that can be
purchased over the counter and used at home for such a personal matter, is
substantial. It is estimated that the prevalence of female
incontinence rises to 30-40% of all women around middle age and then steadily
increases with aging (30% to 50% in elderly women)1. These statistics,
combined with the fact the U.S. Census estimates that the number of women over
40 in the United States will increase from 63 million today to 80 million in
2020, point to a very significant market potential for the Myself®
product.
Competition
The
Myself® product represents a new category of product in its primary market
segments and, as a result, direct competitive efforts have yet to
evolve. For the majority of women suffering from urinary incontinence
that do not seek medical intervention, their over-the-counter options consist
primarily of diapers or pads. Diapers carry a social stigma and are
usually incompatible with an active lifestyle. Pads are a more
discreet option, but are not as protective and they may still emit an
embarrassing odor. A year’s use of adult diapers can cost an
individual more than $2,000.
1 Kathryn Burgio, “Prevalence, Incidence,
and Correlates of Urinary Incontinence in Healthy, Middle-Age Women,” J Urology,
146:1255-1259, Nov 1991(http://www.medscape.com/viewarticle/462756).
5
Low-tech,
consumer-oriented pelvic muscle strengthening gadgets are
available. These include intra-vaginal weights and spring-loaded
resistance devices. These are mainly available through the internet
and their cost is anywhere from $90-$130. These products do not offer
the biofeedback component that is considered critical by most therapists to
achieving any meaningful level of benefit. These gadgets are largely
unproven and have yet to reach the mass market retail channel.
Competition
|
Estimated
Cost
|
Notes
|
|||
Bladder
Neck Suspension Surgery
|
$ | 10,000 |
1/3rd
of patients require second surgery in 5 years
|
||
Incontinence
Drugs
|
$ |
1,000/year
|
Do
not treat stress or mixed incontinence
|
||
Absorbents
|
$ |
1,500/year
|
Not
curative
|
||
Pelvic
Muscle Exercisers
|
$ | 150-$200 |
Myself®
is the only direct-to-consumer biofeedback
device
|
Intellectual
Property
The consumer products company that is
the owner of the Myself® pelvic muscle trainer, or its affiliates, has multiple
international and domestic patents for the Myself® pelvic muscle
trainer. They also maintain a registered trademark for the name
“Myself” for medical devices, namely, a muscle activity measuring device for use
in the treatment of pelvic floor dysfunction in women in the United
States.
Government
Approvals and Regulations
The
manufacture and sale of medical devices is subject to extensive regulatory
requirements regarding production, product liability, distribution, importation,
marketing, promotion, labeling, advertising, labor, and environmental
issues. In the United States, the medical device industry is subject
to strict federal and state government regulations covering virtually every
aspect of its operations, including production, marketing, promotion, sales,
distribution, pricing, labeling, packaging, and advertising.
Advertising,
marketing, and sales of medical devices are subject to various restrictions in
markets around the world.
Labeling
of medical devices is also regulated in many markets, varying from health
warning labels to consumer information.
Regulatory
decisions and changes in the legal and regulatory environment could increase our
costs and the potential liabilities associated with our business or impact our
business activities.
Research
and Development Activities
Extensive
marketing research continues in support of a potential mass market launch for
this product. All research and development activities for this product are the
sole responsibility of the owner of the product.
Compliance
with Environment Laws
We have
no disclosure required by this Item.
6
Medical Applicator
Asset
As a
result of our transaction with RWIP, LLC, described above, we acquired certain
assets from RWIP, including a patent application for a novel medical applicator
that is capable of delivering medicants and internal devices within the body in
an atraumatic fashion (without producing injury or damage).
Products
and Services
The medical applicator technology has a
number of potential uses in the medical device field. These include
translumenal delivery of arterial repair devices such as stents and grafts,
insertion of analgesics and other medicines to specific locations within a body
orifice or vessel, and delivery of tamponading devices for achieving hemostasis
within a body cavity. Of these applications, the use of the
applicator technology as a vaginal tampon delivery device offers the largest and
nearest-term commercial potential due to its large consumer market and is the
first potential product we are currently researching and testing.
A
development team is currently working to refine the design criteria and market
parameters for the project which will help them create clinical testing
prototypes of the delivery device in its tampon applicator
form.
The
tampon applicator under development is designed to replace the plastic and
cardboard applicators currently used by women to insert
tampons. Targeted advantages for the new applicator include easier
and pain-free insertion, superior disposability (flushable/biodegradable), and
smaller size at a cost equal to or less than current plastic
applicators.
Disposal
of tampons and their plastic applicators is problematic for consumers and the
environment. While plastic applicators are often preferred over flushable
cardboard models due to their smoothness and functionality, today’s plastic
applicators must be disposed of in a waste basket. As a result they
require the user to take a two-step approach to disposal while contributing to
landfill volume. When they do end up in the waste water system, they can
cause blockages in residential and municipal systems. Furthermore, whether
thrown away or flushed, tampons and their components often end up in waterways
and oceans where they take a long time to degrade. Recognizing these
shortcomings of existing applicators, our proposed tampon applicator is designed
to be biodegradable and water dispersible so that no matter what its disposal
path it will not harm the environment.
Tampon
Market Overview
The potential number of worldwide
tampon users includes all women in their menstruating years – which, according
to Population Reference Bureau figures - amounts to 1.62 billion
women.2 In
the United States, tampon sales in 2006 were $577 million (excluding Wal-Mart
sales).3 As in the
United States and Canada, 70% of women in Europe use tampons over sanitary
napkins making for a similar market opportunity in the European Union.4 Over 90% of
tampon customers in the United States prefer applicator-equipped tampons
compared with 30% of European women.5 Historically,
annual growth rates for the tampon market in North America and Europe have been
in the 2-4% range over the past few years, but there is evidence of slowing
growth as baby boomers continue to enter menopause.6 Tampon sales
outside of Europe and North America are expected to increase as living standards
improve. Increasing prosperity will allow more women the option of
choosing tampons over inexpensive pads. Experts predict a market
growth rate in the high single digits for the industrialized Asian
countries.7
4 http://www.stayfreemagazine.org/public/wsj_tampons.html
5 Fighting for footing in feminine
products: industry leaders in feminine hygiene products hope to parlay the
promise of new national brand developments into private label., Private Label Buyer,
9/01/2003
6 Proceed with care: growth in the
feminine care category is varied by product, but product innovation and updated
merchandising is helping spark overall growth, Private Label Buyer,
6/01/2006; and
Sanitary Protection In The
US. advances in technology and design help
drive growth, NonWovens Industry, Nov.
2006
7 Wuagneux,
Ellen, “Scent-sational San-Pro Strategies, NonWovens Industry, Nov,
2004
7
The
tampon market has seen dynamic growth and favorable response to innovation since
recovering from Toxic Shock Syndrome cases in the early
1980s. Innovations such as plastic applicators, compact tampons,
flushable and biodegradable options, and products aimed at teens have
helped fuel growth through the 1990s until today. Tampax’s Pearl built a
12% market share a year from launch in 2002 and built this to a 22% share by
2006.8 Brand
awareness and heavy promotion helped this product’s breakout, but much of its
staying power can be attributed to consumers’ affinity for its improved
features, which included a smooth, user-friendly plastic applicator. The
Tampax Pearl’s success came despite its 25% price premium relative to standard
Tampax tampons. This success reflects consumers’ responsiveness to
innovation in this marketplace.
Competition
Leading
competitors in the Tampon market include consumer giant P&G’s Tampax brand,
Playtex, O.B., and Kimberly-Clark’s Kotex. Tampax is the market leader
with a reported 50% share followed by Playtex at 20%, Kotex and O.B. at 12% and
8% respectively, and private label at 10%.9 Transfers in
market share in this category have been driven by a cycle of innovation and
promotion by Tampax and Playtex. Given the apparent value of tampon
innovation, we believe that if the technology we are developing is successful,
we will be in a position to sell or license it to one or more of the current
tampon manufacturers.
Intellectual
Property
As part of the assets we purchased from
RWIP, LLC, we acquired a U.S. Provisional Application, a PCT Patent Application,
and a U.S. Continuation-in-Part Application related to the medical
applicator. In the RWIP Asset Purchase Agreement, RWIP agreed not to
compete with the medical applicator technology for a period of five (5) years,
which will assist us protecting the asset. Additionally, our
consulting agreement with RWIP contains a confidentiality provision, as well as
an assignment of work product provision, both of which will further protect our
intellectual property rights.
Government
Approvals and Regulations
Tampons
are regulated by the FDA as a Class II product and require FDA clearance prior
to commercial sale and marketing. Depending on the project’s
commercialization status, the Company may pursue FDA clearance prior to
transferring the technology to another company. This could potentially
shorten the time-to-market for the device and add value to the
asset.
Employees
We do not
have any employees. Currently all of our officers are independent
contractors. We believe that our relationship with our staff is
good.
8 http://www.enquirer.com/editions/2003/09/07/biz_pgrivals07.html; and Tampons Segment Needs
a Spark, Chain Drug Review, August 14, 2006
8
Description
of Property
Currently, we do not lease office
space, but maintain a virtual office at a cost of $219 per month, which provides
us with a physical address, a phone number, answering service and use of certain
office facilities, such as conference rooms, on a discounted basis, as
needed.
Available
Information
We are a
fully reporting issuer, subject to the Securities Exchange Act of
1934. Our Quarterly Reports, Annual Reports, and other filings can be
obtained from the SEC’s Public Reference Room at 100 F Street, NE., Washington,
DC 20549, on official business days during the hours of 10 a.m. to 3
p.m. You may also obtain information on the operation of the Public
Reference Room by calling the Commission at 1-800-SEC-0330. The
Commission maintains an Internet site that contains reports, proxy and
information statements, and other information regarding issuers that file
electronically with the Commission at http://www.sec.gov.
Our
Internet website address is http://www.heartlandbridgecapital.com
RISK
FACTORS
We
have a limited operating history and limited historical financial information
upon which you may evaluate our performance.
You
should consider, among other factors, our prospects for success in light of the
risks and uncertainties encountered by companies that, like us, have a limited
operating history. We may not successfully address these risks and
uncertainties or successfully market our existing and new
products. If we fail to do so, it could materially harm our business
and impair the value of our common stock. Even if we accomplish these
objectives, we may not generate the positive cash flows or profits we
anticipate. To date we do not have any revenues and currently our
future revenues are dependent upon the future sales of the Myself® pelvic muscle
trainer, as well on the successful development and sale of our tampon
applicator. Unanticipated problems, expenses, and delays are
frequently encountered in establishing and developing new products in the
medical technology field. These include, but are not limited to,
inadequate funding, lack of consumer acceptance, competition, product
development, and inadequate sales and marketing. The failure by us to
address satisfactorily any of these conditions would have a materially adverse
effect upon us and may force us to reduce or curtail operations. No
assurance can be given that we can or will ever operate profitably.
We
may not be able to meet our future capital needs.
To date,
we have not generated any revenue and we have no cash liquidity or capital
resources. Our future capital requirements will depend on many
factors, including our ability to develop our intellectual property, our ability
to generate positive cash flow from operations, and the effect of competing
market developments. We will need additional capital in the near
future. Any equity financings will result in dilution to our
then-existing stockholders. Sources of debt financing may result in
high interest expense. Any financing, if available, may be on terms
deemed unfavorable.
If
we are unable to meet our future capital needs, we may be required to reduce or
curtail operations.
To date,
we have relied on funding from investors and our officers and directors to fund
operations, and we have generated no revenue. We have limited cash
liquidity and capital resources. Our future capital requirements will
depend on many factors, including our ability to market our products
successfully, our ability to generate positive cash flow from operations, and
our ability to obtain financing in the capital markets. Our business
plan requires additional funding beyond our anticipated cash flow from
operations. Consequently, although we currently have no specific
plans or arrangements for financing, we intend to raise funds through private
placements, public offerings, or other financings. Any equity
financings would result in dilution to our then-existing
stockholders. Sources of debt financing may result in higher interest
expense and may expose us to liquidity problems. Any financing, if
available, may be on terms deemed unfavorable. If adequate funds are
not obtained, we may be required to reduce or curtail
operations.
9
For
the Myself® product sales we are completely dependent upon third parties for the
successful development, marketing, and sale of the product, and those third
parties may prove unsuccessful in their attempts to develop, market, and/or sell
the Myself® product.
Regarding
our ownership in the Myself® cash flow, we are a passive recipient of proceeds
based on sales of the Myself® product, which are wholly outside of our
control. If the third parties that are tasked with the development,
marketing and sale of the Myself® product are unsuccessful then our proceeds
from the Myself® cash flow could be minimal.
There can
be no assurance that the third parties tasked with developing, marketing, and
selling the Myself® product will be successful.
If
we are unable to attract and retain key personnel, we may not be able to compete
effectively in our market.
Our
success will depend, in part, on our ability to attract and retain key
management, both including and beyond what we have today. We will
attempt to enhance our management and technical expertise by recruiting
qualified individuals who possess desired skills and experience in certain
targeted areas. Our inability to retain staff and to attract and
retain sufficient additional employees, and the requisite information
technology, engineering, and technical support resources, could have a material
adverse effect on our business, financial condition, results of operations, and
cash flows. The loss of key personnel could limit our ability to
develop and market our products.
Competition
could have a material adverse effect on our business.
The
medical products industry is a highly competitive industry and the products that
we have an interest in may not compete well in the marketplace, which could
cause our revenues to be less than expected, and/or may cause us to increase the
number of our personnel or our advertising or promotional expenditures to
maintain our competitive position or for other reasons.
An
increase in government regulations could have a material adverse effect on our
business.
The U.S.
and certain other countries in which we operate impose certain federal and state
or provincial regulations, and also require warning labels and signage on
medical products. New or revised regulations or increased licensing
fees, requirements, or taxes could also have a material adverse effect on our
financial condition or results of operations.
We
may be unable to adequately protect our proprietary rights.
Our
ability to compete partly depends on the superiority, uniqueness, and value of
our intellectual property and technology. To protect our proprietary
rights, we will rely on a combination of patent, copyright, and trade secret
laws, confidentiality agreements with our employees and third parties, and
protective contractual provisions. Despite these efforts, any of the
following occurrences may reduce the value of our intellectual
property:
|
·
|
Our
applications for patents relating to our business may not be granted and,
if granted, may be challenged or
invalidated;
|
|
·
|
Issued
patents may not provide us with any competitive
advantages;
|
|
·
|
Our
efforts to protect our intellectual property rights may not be effective
in preventing misappropriation of our
technology;
|
|
·
|
Our
efforts may not prevent the development and design by others of products
or technologies similar to or competitive with, or superior to, those we
develop; or
|
10
|
·
|
Another
party may obtain a blocking patent and we would need to either obtain a
license or design around the patent in order to continue to offer the
contested feature or service in our
products.
|
We
may be forced to litigate to defend our intellectual property rights, or to
defend against claims by third parties against us relating to intellectual
property rights.
We may be
forced to litigate to enforce or defend our intellectual property rights, to
protect our trade secrets, or to determine the validity and scope of other
parties’ proprietary rights. Any such litigation could be very costly
and could distract our management from focusing on operating our
business. The existence and/or outcome of any such litigation could
harm our business.
We
may not be able to effectively manage our growth and operations, which could
materially and adversely affect our business.
We may
experience rapid growth and development in a relatively short period of
time. The management of this growth will require, among other things,
continued development of our financial and management controls and management
information systems, stringent control of costs, increased marketing activities,
the ability to attract and retain qualified management personnel, and the
training of new personnel. We intend to retain additional personnel
in order to manage our expected growth and expansion. Failure to
successfully manage our possible growth and development could have a material
adverse effect on our business and the value of our common stock.
Our
future research and development projects may not be successful.
The
successful development of pharmaceutical products can be affected by many
factors. Products that appear to be promising at their early phases
of research and development may fail to be commercialized for various reasons,
including the failure to obtain the necessary regulatory
approvals. In addition, the research and development cycle for new
products for which we may obtain an approval certificate is long.
There is
no assurance that all of our future research and development projects will be
successful or completed within the anticipated time frame or budget or that we
will receive the necessary approvals from relevant authorities for the
production of these newly developed products, or that these newly developed
products will achieve commercial success. Even if such products can
be successfully commercialized, they may not achieve the level of market
acceptance that we expect.
Any
products we develop, acquire, or invest in may not achieve or maintain
widespread market acceptance.
The
success of any products we develop, acquire, or invest in will be highly
dependent on market acceptance. We believe that market acceptance of
any products will depend on many factors, including, but not limited
to:
|
·
|
the
perceived advantages of our products over competing products and the
availability and success of competing
products;
|
|
·
|
the
effectiveness of our sales and marketing
efforts;
|
|
·
|
our
product pricing and cost
effectiveness;
|
|
·
|
the
safety and efficacy of our products and the prevalence and severity of
adverse side effects, if any; and
|
|
·
|
publicity
concerning our products, product candidates, or competing
products.
|
If our
products fail to achieve or maintain market acceptance, or if new products are
introduced by others that are more favorably received than our products, are
more cost effective, or otherwise render our products obsolete, we may
experience a decline in demand for our products. If we are unable to
market and sell any products we develop successfully, our business, financial
condition, results of operations, and future growth would be adversely
affected.
11
Developments by competitors may render
our products or technologies obsolete or non-competitive.
The
medical device industry is intensely competitive and subject to rapid and
significant technological changes. A large number of companies are
pursuing the development of medical devices for markets that we are
targeting. We face competition from pharmaceutical and biotechnology
companies in the United States and other countries. In addition,
companies pursuing different but related fields represent substantial
competition. Many of these organizations competing with us have
substantially greater capital resources, larger research and development staffs
and facilities, longer medical device development history in obtaining
regulatory approvals, and greater manufacturing and marketing capabilities than
we do. These organizations also compete with us to attract qualified
personnel and parties for acquisitions, joint ventures, or other
collaborations.
If we fail to
maintain an effective system of internal controls or discover material
weaknesses in our internal controls over financial reporting, we may not be able
to report our financial results accurately or timely or to detect fraud, which
could have a material adverse effect on our business.
An effective internal control
environment is necessary for us to produce reliable financial reports and is an
important part of our effort to prevent financial fraud. We are
required to periodically evaluate the effectiveness of the design and operation
of our internal controls over financial reporting. Based on these
evaluations, we may conclude that enhancements, modifications, or changes to
internal controls are necessary or desirable. While management
evaluates the effectiveness of our internal controls on a regular basis, these
controls may not always be effective. There are inherent limitations
on the effectiveness of internal controls, including collusion, management
override, and failure of human judgment. In addition, control
procedures are designed to reduce rather than eliminate business
risks. If we fail to maintain an effective system of internal
controls, or if management or our independent registered public accounting firm
discovers material weaknesses in our internal controls, we may be unable to
produce reliable financial reports or prevent fraud, which could have a material
adverse effect on our business, including subjecting us to sanctions or
investigation by regulatory authorities, such as the Securities and Exchange
Commission. Any such actions could result in an adverse reaction in
the financial markets due to a loss of confidence in the reliability of our
financial statements, which could cause the market price of our common stock to
decline or limit our access to capital.
Our
common stock may be affected by limited trading volume and may fluctuate
significantly.
There has
been a limited public market for our common stock and there can be no assurance
that an active trading market for our common stock will develop. This
could adversely affect our shareholders’ ability to sell our common stock in
short time periods or possibly at all. Our common stock has
experienced and is likely to continue to experience significant price and volume
fluctuations that could adversely affect the market price of our common stock
without regard to our operating performance. Our stock price could
fluctuate significantly in the future based upon any number of factors such as:
general stock market trends; announcements of developments related to our
business; fluctuations in our operating results; announcements of technological
innovations, new products, or enhancements by us or our competitors; general
conditions in the U.S. and/or global economies; developments in patents or other
intellectual property rights; and developments in our relationships with our
customers and suppliers. Substantial fluctuations in our stock price
could significantly reduce the price of our stock.
12
Our
common stock is traded on the "Over-the-Counter Bulletin Board," which may make
it more difficult for investors to resell their shares due to suitability
requirements.
Our
common stock is currently traded on the OTC Bulletin Board (OTCBB) where we
expect it to remain for the foreseeable future. Broker-dealers often
decline to trade in OTCBB stocks given that the market for such securities is
often limited, the stocks are often more volatile, and the risk to investors is
often greater. In addition, OTCBB stocks are often not eligible to be
purchased by mutual funds and other institutional investors. These
factors may reduce the potential market for our common stock by reducing the
number of potential investors. This may make it more difficult for
investors in our common stock to sell shares to third parties or to otherwise
dispose of their shares. This could cause our stock price to
decline.
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The
following table sets forth, as of December 14, 2010, certain information with
respect to the Company’s equity securities owned of record or beneficially by
(i) each Officer and Director of the Company; (ii) each person who owns
beneficially more than 5% of each class of the Company’s outstanding equity
securities; and (iii) all Directors and Executive Officers as a
group.
Title of Class
|
Name and Address
of Beneficial Owner (2)
|
Nature of
Beneficial
Ownership
|
Amount
|
Percent of
Class (1)
|
||||||||
Common
Stock
|
Harry
Pond (3)
|
Director
|
10,000,000 | (4) | 89.9 | % | ||||||
Common
Stock
|
Anthony
Turnbull (5)
|
Director
|
10,000 |
<1
|
% | |||||||
Common
Stock
|
James
F. Groelinger (3)
|
Chief
Executive Officer
|
0 | 0 | % | |||||||
Common
Stock
|
Frederick
Larcombe (3)
|
CFO
and Secretary
|
0 | 0 | % | |||||||
Common
Stock
|
Wayne
LeBlanc (3)
|
Sr.
Managing Dir. Bus. Development
|
0 | 0 | % | |||||||
Common
Stock
|
New
Horizon, Inc.
|
5%
Shareholder
|
5,333,334 | (6) | 32.4 | %(4) | ||||||
Common
Stock
|
All
Directors and Officers
As a
Group (5 persons)
|
10,010,000 | (4) | 89.9 | % |
|
(1)
|
Based
on 15,125,000 shares outstanding as of November 15, 2010.
Shares of common stock subject to options or warrants currently
exercisable, or exercisable within 60 days, are deemed outstanding for
purposes of computing the percentage of the person holding such options or
warrants, but are not deemed outstanding for the purposes of computing the
percentage of any other person.
|
|
(2)
|
Unless
indicated otherwise, the address of the shareholder is c/o I-Web Media,
Inc., `1 International Boulevard, Suite 400, Mahwah, New Jersey
07495.
|
|
(3)
|
Indicates
an officer and/or director of the
Company
|
|
(4)
|
Includes
shares held in the name of Rockland Group, LLC, an entity controlled by
Mr. Pond.
|
|
(5)
|
Mr.
Turnbull has submitted his resignation, effective upon appointment of the
Director-nominees named herein.
|
|
(6)
|
Includes
1,333,334 shares of common stock underlying $2,000,000 convertible
promissory note, convertible at any time at a value of $1.50 per
share.
|
The
Company is not aware of any person who owns of record, or is known to own
beneficially, five percent or more of the outstanding securities of any class of
the issuer, other than as set forth above. There are no classes of
stock other than common stock issued or outstanding.
Change
in Control
On
October 28, 2010, one of the Company’s affiliate-shareholders, namely, Kenneth
S. Barton, the Company’s President and Chief Executive Officer, a Director, and
a 10%+ shareholder, entered into an Agreement to Purchase Common Stock with
Rockland Group, LLC (“Rockland Group”), under which Rockland Group agreed to
purchase an aggregate of 10,000,000 shares of the Company’s common stock from
this shareholder. These shares represent approximately 90% of the
Company’s outstanding common stock. The transaction closed November
3, 2010.
13
DIRECTORS
AND EXECUTIVE OFFICERS
The
following table sets forth the names and ages of our current directors, director
nominees, and executive officers, the principal offices and positions with the
Company held by each person and the date such person became a director or
executive officer of the Company. The executive officers of the
Company are elected annually by the Board of Directors. The directors
serve one-year terms until their successors are elected. The
executive officers serve terms of one year or until their death, resignation, or
removal by the Board of Directors. Unless described below, there are
no family relationships among any of the directors and officers.
Name
|
Age
|
Position(s)
|
||
James
F. Groelinger
|
66
|
Chief
Executive Officer and Director Nominee (2)
|
||
Frederick
Larcombe
|
54
|
Chief
Financial Officer and Secretary
|
||
Wayne
LeBlanc
|
62
|
Sr.
Managing Director – Business Development and Director Nominee
(2)
|
||
Harry
Pond
|
60
|
Current
Director
|
||
Anthony
R. Turnbull
|
65
|
Current
Director (1)
|
|
(1)
|
Mr.
Turnbull has submitted his resignation to the Company, effective upon the
appointment of new directors, which will be effective on or about December
29, 2010.
|
|
(2)
|
Mr.
Groelinger and Mr. LeBlanc are currently Director Nominees per our
Information Statement on Schedule 14-C, with their appointments being
effective December 29, 2010.
|
James F. Groelinger replaced
Mr. Barton as our Chief Executive Officer. Since 2007, Mr. Groelinger
has been the Managing Director at Bellegrove Associates where he provides
strategic guidance to emerging clean energy entrepreneurs and
companies. This guidance includes, but is not limited to, evaluating
potential energy-related investments, assisting inventors with energy-related
patents and products, as well as developing strategies for creating joint
ventures between U.S. and foreign entities or governments. Since
2009, Mr. Groelinger has also been the Executive Director of Clean Energy
Alliance, Inc., which is a national association of clean energy incubators for
the purpose of fund raising, policy development, and strategy. From
2001 to 2006, Mr. Groelinger was the Chief Executive Officer and a Director, and
was President from 2007 to 2008, of EPV Solar, Inc., which was a photovoltaic
technology company that developed a technology for the production of thin-film
photovoltaic products. As CEO of EPV Solar, Mr. Groelinger led the
company and oversaw sales as they increased from nil to more than $20 million
annually, developed products sales in the U.S., Germany, and Spain, oversaw
joint ventures with foreign manufacturers, and managed a complex $60 million
debt-for-equity recapitalization, setting the stage for a $70 million
third-party financing and initial public offering. Mr. Groelinger
received his BChE from the City College of New York, New York, and his MBA in
Finance from Temple University.
14
Frederick Larcombe replaced
Mr. Turnbull as our Chief Financial Officer and Secretary. From early
2008 to the present, Mr. Larcombe, as a principal with Crimson Partners, a group
of seasoned financial professionals, serves a number of clients primarily in the
life sciences. In this connection and since September 2009, Mr.
Larcombe has served as the Chief Financial Officer for iBio, Inc. (IBPM.OB), a
biotechnology company focused on commercializing its proprietary technology for
the production of biologics including vaccines and therapeutic
proteins. From 2005 to 2007, he was simultaneously the Chief Financial
Officer of Xenomics Inc., and FermaVir Pharmaceuticals, Inc. From
2004 to 2005, he was a consultant with Kroll Zolfo Cooper, a professional
services firm providing interim management and turn-around services, and from
2000 to 2004, he was Chief Financial Officer of MicroDose
Therapeutics. Prior to 2000, Mr. Larcombe held various positions with
ProTeam.com, Cambrex, and PriceWaterhouseCoopers. Mr. Larcombe's
received his BS in Accounting from Seton Hall University, was designated a
Certified Public Accountant in New Jersey, and is an alumnus of the Management
Development Program at Harvard Business School.
Wayne LeBlanc is our Senior
Managing Director for Business Development. Mr. LeBlanc is a senior
business development executive. Since 1999, Mr. LeBlanc has been a
managing partner in Solutions for Energy Management where he has been involved
in brokering electricity to large customers and serving as a consultant for
demand side management. Mr. LeBlanc is also currently a managing
partner in eMEDiSAFE, a company formed to address the recent requirements to
convert to electronic medical records to reduce health care
costs. From 2007-2008, Mr. LeBlanc was Vice President of Business
Development for EPV Solar. In this position he was part of an
executive team assembled to secure capital for manufacturing expansion, both in
the U.S. and internationally, and recruitment of senior staff. From
2000-2004, Mr. LeBlanc was a founder of Utility Choice Electric, the first
independent retail electric provider in Texas. .
Harry Pond, the Manager of the
Rockland Group, LLC, the holder of 90% of our outstanding common stock, was
appointed to serve on our Board of Directors. From 2005 to present,
Mr. Pond has served as Managing Director of Rockland Group, LLC, which is a real
estate development company active in the Houston, Texas real estate
market. From 2008 to present, Mr. Pond has served as a senior
business executive for Rockland Insurance Agency, Inc. In this
position he is actively involved with the management of loss prevention,
marketing, and recruiting to ensure the company’s profitability and
productivity. From 1979 to present, Mr. Pond has owned and operated
The Harry Pond Insurance Agency, a company that he is currently in the process
of merging with Rockland Insurance Agency, Inc. Mr. Pond received his
BS in mathematics and education from Texas State University.
Anthony R. Turnbull, is our
former Secretary, Treasurer and Chief Financial Officer, and is one of our
current Directors. He holds an MBA and is a CPA with experience in
management, manufacturing accounting, management reporting, payroll, and
taxation. His has been the chief accounting officer of two other public
companies: MedBook World and Molecular Imaging Corporation. For the past
five years Mr. Turnbull has maintain an independent, part-time tax consulting
business, Turnbull & Associates. Since November 2009 he has also
served as the Treasurer and CFO and a Director of MedBook World, Inc., another
small reporting issuer. He has not been involved in the formation,
management or principal ownership of any other companies seeking to go
public. Since 2007 he has also been CFO of KOJO Worldwide a $52,000,000
upholstery and bedding manufacturing company selling to major hotels in the US
and Mexico. In 2006 - 2007 he was CFO of Countryside Hospice Care, a hospice
company with branches in Georgia and Alabama, and in 2004 - 2005 he was CFO of
Prolong Super Lubricants, a manufacturer and seller, including sales via its
internet store, of lubricants. Mr. Turnbull is a promoter of the Company
as that term is defined in Rule 405 of the Securities Act of 1933.
Historical
Compensation of Directors
Other
than as set forth herein no compensation has been given to any of the directors,
although they may be reimbursed for any pre-approved out-of-pocket
expenses.
Compliance
with Section 16(a) of the Securities Exchange Act of 1934
Section
16(a) of the Securities Exchange Act of 1934 requires the Company’s directors
and executive officers and persons who own more than ten percent of a registered
class of the Company’s equity securities to file with the SEC initial reports of
ownership and reports of changes in ownership of common stock and other equity
securities of the Company. Officers, directors and greater than ten
percent shareholders are required by SEC regulations to furnish the Company with
copies of all Section 16(a) forms they file.
15
During
the most recent fiscal year, to the Company’s knowledge, the following
delinquencies occurred:
Name
|
No. of Late
Reports
|
No. of
Transactions
Reported Late
|
No. of
Failures to
File
|
|||
Harry
Pond
|
0
|
0
|
0
|
|||
James
F. Groelinger
|
0
|
0
|
0
|
|||
Frederick
Larcombe
|
0
|
0
|
0
|
|||
Wayne
LeBlanc
|
0
|
0
|
0
|
|||
Anthony
R. Turnbull
|
0
|
0
|
2
|
|||
New
Horizon, Inc.
|
0
|
0
|
0
|
Board Meetings and
Committees
During
the 2010 fiscal year to date, the Board of Directors met on a regular basis and
took written action on numerous other occasions. All the members of
the Board attended the meetings. The written actions were by
unanimous consent.
Code of
Ethics
We have
not adopted a written code of ethics, because we believe and understand that our
officers and directors adhere to and follow ethical standards without the
necessity of a written policy.
Audit
Committee
The
Company does not currently have an audit committee.
Compensation
Committee
The
Company does not currently have a compensation committee.
16
Executive
Compensation
The
following tables set forth certain information about compensation paid, earned
or accrued for services by (i) the Company’s Chief Executive Officer and (ii)
all other executive officers who earned in excess of $100,000 in the period from
our inception (April 29, 2010) to September 30, 2010 (“Named Executive
Officers”):
Name and
Principal
Position
|
Year
|
Salary
($)
|
Bonus
($)
|
Stock
Awards
($)
|
Option
Awards
($)
|
Non-Equity
Incentive Plan
Compensation
($)
|
Nonqualified
Deferred
Compensation
($)
|
All Other
Compensation
($)
|
Total
($)
|
|||||||||||||||||||||||||
James
F. Groelinger
|
2010
|
- | - | - | - | - | - | - | - | |||||||||||||||||||||||||
CEO
|
||||||||||||||||||||||||||||||||||
Frederick
Larcombe
|
2010
|
- | - | - | - | - | - | - | - | |||||||||||||||||||||||||
Secretary
and CFO
|
||||||||||||||||||||||||||||||||||
Wayne
LeBlanc
|
2010
|
- | - | - | - | - | - | - | - | |||||||||||||||||||||||||
Sr.
Managing Dir. Bus. Dev.
|
Employment
Contracts
We
currently do not have written employment agreements with our executive
officers.
Director
Compensation
The
following table sets forth director compensation as of for fiscal year 2010
through September 30, 2010:
Name
|
Fees
Earned
or Paid
in Cash
($)
|
Stock
Awards
($)
|
Option
Awards
($)
|
Non-Equity
Incentive Plan
Compensation
($)
|
Nonqualified
Deferred
Compensation
Earnings
($)
|
All Other
Compensation
($)
|
Total
($)
|
|||||||||||||||||||||
Harry
Pond
|
-0- | -0- | -0- | -0- | -0- | -0- | -0- | |||||||||||||||||||||
Anthony
R. Turnbull (1)
|
-0- | -0- | -0- | -0- | -0- | -0- | -0- |
(1)
|
Mr.
Turnbull has submitted his resignation, effective upon appointment of the
Director-nominees named herein.
|
17
Outstanding
Equity Awards at Fiscal Year-End
The following table sets forth certain
information concerning outstanding stock awards held by the Named Executive
Officers for partial fiscal year 2010 (from inception on April 29, 2010 through
September 30, 2010):
Option Awards
|
Stock Awards
|
|||||||||||||||||||||||||||||||||||
Name
|
Number of
Securities
Underlying
Unexercised
Options
(#)
Exercisable
|
Number of
Securities
Underlying
Unexercised
Options
(#)
Unexercisable
|
Equity
Incentive
Plan
Awards:
Number of
Securities
Underlying
Unexercised
Unearned
Options
(#)
|
Option
Exercise
Price
($)
|
Option
Expiration
Date
|
Number
of
Shares
or Units
of Stock
That
Have
Not
Vested
(#)
|
Market
Value
of
Shares
or
Units
of
Stock
That
Have
Not
Vested
($)
|
Equity
Incentive
Plan
Awards:
Number
of
Unearned
Shares,
Units or
Other
Rights
That
Have Not
Vested
(#)
|
Equity
Incentive
Plan
Awards:
Market
or Payout
Value of
Unearned
Shares,
Units or
Other
Rights
That
Have Not
Vested
($)
|
|||||||||||||||||||||||||||
James
F. Groelinger
|
-0- | -0- | -0- | N/A | N/A | -0- | -0- | -0- | -0- | |||||||||||||||||||||||||||
Frederick
Larcombe
|
-0- | -0- | -0- | N/A | N/A | -0- | -0- | -0- | -0- | |||||||||||||||||||||||||||
Wayne
LeBlanc
|
-0- | -0- | -0- | N/A | N/A | -0- | -0- | -0- | -0- |
CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
On
November 4, 2010, we entered into a Securities Purchase Agreement with Rockland
Group, LLC, an entity controlled by Harry Pond, one of our Directors and our
largest shareholder, under which Rockland Group agreed to purchase Two Million
(2,000,000) Shares of a yet to be created series of our preferred stock in
exchange for $100,000. Under the terms of the Securities Purchase
Agreement we are obligated to create a new class of preferred stock entitled the
Series A Convertible Preferred Stock with the following rights and preferences:
(i) dividend rights equal to the dividend rights our common stock; (ii)
liquidation preference over our common stock; (iii) each share of Series A
Convertible Preferred Stock will be convertible into one share of our common
stock; (iv) no redemption rights; (v) no call rights by us; (vi) each share of
Series A Convertible Preferred stock will have twenty five (25) votes on all
matters validly brought to our common stockholders for approval; and (vii)
mandatory approval by a majority of the Series A Convertible Preferred
stockholders for certain change of control transactions by us. The
other rights and preferences will be determined by our Board of
Directors. We have not created the Series A Convertible Preferred
Stock yet and have, therefore, not issued the shares. We will not be
issuing the shares under the Securities Purchase Agreement until after the class
of Series A Convertible Preferred Stock has been created with the State of
Delaware.
On December
8, 2010, we entered into an Asset Purchase Agreement with New Horizon, Inc., a
Texas corporation (the “New Horizon Agreement”). On December 9, 2010,
the transactions contemplated by the New Horizon Agreement closed (the
“Closing”). Pursuant to the New Horizon Agreement, we acquired
certain assets from New Horizon, including the right to receive any proceeds New
Horizon is entitled to receive from the sale of the Myself® pelvic muscle
trainer. The calculation of the amounts we are entitled to receive
from the sales of the Myself® pelvic muscle trainer are listed on Exhibit A to the New
Horizon Agreement, which is attached hereto as Exhibit
10.8.
18
Under the
New Horizon Agreement, as consideration for the Asset, we agreed to issue to New
Horizon, Inc., the following: (i) a convertible promissory note in the principal
amount of Two Million Dollars ($2,000,000), convertible into our common stock at
the conversion ratio of One Dollar Fifty Cents ($1.50) per share, with the
option by us to pay the note with our common stock in lieu of cash at the rate
of one share of our common stock per One Dollar ($1) being paid (see Exhibit
10.2, attached hereto), (ii) Four Million (4,000,000) shares of our common
stock, restricted in accordance with Rule 144, and (iii) Three Million
(3,000,000) shares of a new series of preferred stock to be created by us,
restricted in accordance with Rule 144, with the following rights and
preferences: (i) dividend rights equal to the dividend rights of our
common stock; (ii) liquidation preference over our common stock and equal to
that of our Series A Convertible Preferred Stock; (iii) each share of Series B
Convertible Preferred Stock will be convertible into five (5) shares of our
common stock; (iv) no redemption rights; (v) no call rights by us; and (vi) each
share of Series B Convertible Preferred Stock will have one (1) vote on all
matters validly brought to our common stockholders, with the other rights and
preferences to be determined by our Board of Directors. Under the
terms of the New Horizon Agreement we may be obligated to issue up to an
additional Two Million (2,000,000) shares of our common stock and One Million
Five Hundred Thousand (1,500,000) shares of the Series B Preferred Stock, with
the exact number of additional shares to be issued, if any, being dependent upon
the fair market value of our common stock in July 2012, as set forth in the New
Horizon Agreement. We have not created the Series B Convertible
Preferred Stock yet and have, therefore, not issued the shares. We
will not be issuing the shares under the Purchase Agreement until after the
class of Series B Convertible Preferred Stock has been created with the State of
Delaware. As a result of this transaction, New Horizon, Inc. became a
holder of more than 10% of our outstanding common stock.
We do not
have a written policy concerning the review, approval, or ratification of
transactions with related persons.
We do not
have an audit, compensation, or nominating committee, and none of our Directors
are considered independent.
LEGAL
PROCEEDINGS
We are not a party to or otherwise
involved in any legal proceedings.
19
MARKET
PRICE OF AND DIVIDENDS ON THE REGISTRANT’S COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS
Our
common stock has been listed for trading on the OTC Bulletin Board since October
2010. Our current trading symbol is “IWBM,” but we believe this symbol
will change on or about December 29, 2010 in connection with our name change to
Heartland Bridge Capital, Inc. Since our stock has been listed there
have been no trades of our common stock.
The
following table sets forth the high and low bid information for each quarter
within the fiscal year ended March 31, 2011, as provided by the Nasdaq Stock
Markets, Inc. The information reflects prices between dealers, and
does not include retail markup, markdown, or commission, and may not represent
actual transactions.
Fiscal Year
|
||||||||||
Ended
|
Bid Prices
|
|||||||||
March 31, (1)
|
Period
|
High
|
Low
|
|||||||
2011
|
First
Quarter
|
$ | 0 | $ | 0 | |||||
Second
Quarter
|
$ | 0 | $ | 0 | ||||||
Third
Quarter (through December 14, 2010)
|
$ | 0 | $ | 0 |
(1) Effective December 29, 2010, our
fiscal year will be December 31st.
The
Securities Enforcement and Penny Stock Reform Act of 1990 requires additional
disclosure relating to the market for penny stocks in connection with trades in
any stock defined as a penny stock. The Commission has adopted
regulations that generally define a penny stock to be any equity security that
has a market price of less than $5.00 per share, subject to a few exceptions
which we do not meet. Unless an exception is available, the
regulations require the delivery, prior to any transaction involving a penny
stock, of a disclosure schedule explaining the penny stock market and the risks
associated therewith.
There are
currently warrants outstanding to acquire an aggregate of 150,000 shares of our
common stock at an exercise price of $2.00 per share. These warrants may be
exercised at any time within four (4) years from the issuance
date. Additionally, on April 29, 2010, pursuant to
the Plan of Reorganization of AP Corporate Services, Inc. (the “Debtor”) we
issued warrants to purchase 5,000,000 shares of our common stock, to
certain creditors of the Debtor as part of the confirmed Plan of Reorganization.
The warrants consist of 1,000,000 “A Warrants” each convertible into one
share of our common stock at an exercise price of $1.00; 1,000,000 “B Warrants”
each convertible into one share of our common stock at an exercise price of
$2.00; 1,000,000 “C Warrants” each convertible into one share of our common
stock at an exercise price of $3.00; 1,000,000 “D Warrants” each convertible
into one share of our common stock at an exercise price of $4.00; and 1,000,000
“E Warrants” each convertible into one share of our common stock at an exercise
price of $5.00. The “A” through “E” warrants are currently
exercisable and may be exercised at any time prior to January 4,
2014. The “A” through “E” warrants contain a limitation provisions
that the warrants cannot be exercised if it will case the holder to own more
than 4.9% of our then outstanding common stock.
The
number of holders of record of shares of our common stock is 97.
There
have been no cash dividends declared on our common stock, and we do not
anticipate paying cash dividends in the foreseeable future. Dividends
are declared at the sole discretion of our Board of Directors.
20
RECENT
SALES OF UNREGISTERED SECURITIES
On
November 4, 2010, we entered into a Securities Purchase Agreement with Rockland
Group, LLC, an entity controlled by Harry Pond, one of our Directors and our
largest shareholder, under which Rockland Group agreed to purchase Two Million
(2,000,000) Shares of a yet to be created series of our preferred stock in
exchange for $100,000. Under the terms of the Purchase Agreement we
are obligated to create a new class of preferred stock entitled the Series A
Convertible Preferred Stock with the following rights and preferences: (i)
dividend rights equal to the dividend rights our common stock; (ii) liquidation
preference over our common stock; (iii) each share of Series A Convertible
Preferred Stock will be convertible into one share of our common stock; (iv) no
redemption rights; (v) no call rights by us; (vi) each share of Series A
Convertible Preferred stock will have twenty five (25) votes on all matters
validly brought to our common stockholders for approval; and (vii) mandatory
approval by a majority of the Series A Convertible Preferred stockholders for
certain change of control transactions by us. The other rights and
preferences will be determined by our Board of Directors. We have not
created the Series A Convertible Preferred Stock yet and have, therefore, not
issued the shares. We will not be issuing the shares under the
Securities Purchase Agreement until after the class of Series A Convertible
Preferred Stock has been created with the State of Delaware. At that
time we will file a new Form 8-K for the issuance, or put the relevant
information in the appropriate periodic filing. The issuances were
exempt from registration pursuant to Section 4(2) of the Securities Act of 1933,
and each of the investors was either accredited or sophisticated and familiar
with our operations.
Under the
New Horizon Agreement, as consideration for the Asset, we agreed to issue to New
Horizon, Inc., the following: (i) a convertible promissory note in the principal
amount of Two Million Dollars ($2,000,000), convertible into our common stock at
the conversion ratio of One Dollar Fifty Cents ($1.50) per share, with the
option by us to pay the note with our common stock in lieu of cash at the rate
of one share of our common stock per One Dollar ($1) being paid (see Exhibit
10.2, attached hereto), (ii) Four Million (4,000,000) shares of our common
stock, restricted in accordance with Rule 144, and (iii) Three Million
(3,000,000) shares of a new series of preferred stock to be created by us,
restricted in accordance with Rule 144, with the following rights and
preferences: (i) dividend rights equal to the dividend rights of our
common stock; (ii) liquidation preference over our common stock and equal to
that of our Series A Convertible Preferred Stock; (iii) each share of Series B
Convertible Preferred Stock will be convertible into five (5) shares of our
common stock; (iv) no redemption rights; (v) no call rights by us; and (vi) each
share of Series B Convertible Preferred Stock will have one (1) vote on all
matters validly brought to our common stockholders, with the other rights and
preferences to be determined by our Board of Directors. Under the
terms of the New Horizon Agreement we may be obligated to issue up to an
additional Two Million (2,000,000) shares of our common stock and One Million
Five Hundred Thousand (1,500,000) shares of the Series B Preferred Stock, with
the exact number of additional shares to be issued, if any, being dependent upon
the fair market value of our common stock in July 2012, as set forth in the New
Horizon Agreement. We have not created the Series B Convertible
Preferred Stock yet and have, therefore, not issued the shares. We
will not be issuing the shares under the Purchase Agreement until after the
class of Series B Convertible Preferred Stock has been created with the State of
Delaware. As a result of this transaction, New Horizon, Inc. became a
holder of more than 10% of our outstanding common stock. The
issuances were exempt from registration pursuant to Section 4(2) of the
Securities Act of 1933, and each of the investors was either accredited or
sophisticated and familiar with our operations.
Under the RWIP Agreement, as
consideration for the Asset, we agreed to issue RWIP, LLC, the following: (i) a
convertible promissory note in the principal amount of One Hundred Twenty Five
Thousand Dollars ($125,000), convertible into our common stock at the conversion
ratio of One Dollar Fifty Cents ($1.50) per share, (ii) a warrant to purchase
One Hundred Fifty Thousand (150,000) shares of our common stock, restricted in
accordance with Rule 144, with an exercise price of Two Dollars ($2) per share,
and (iii) royalties equal to Twenty Percent (20%) of the net income (revenue
minus expenses) received by us in connection with the assets purchased from RWIP
(in order to calculate this amount the revenue and expenses related to the
RWIP assets will be calculated separately from our other business
assets). The issuances were exempt from registration pursuant to
Section 4(2) of the Securities Act of 1933, and each of the investors was either
accredited or sophisticated and familiar with our operations.
21
On April 29, 2010, pursuant to the
confirmed Plan of Reorganization of AP Corporate Services, Inc. (the “Debtor”)
we issued 1,085,000 shares of our common stock to 93 shareholders by order of
the U.S. Bankruptcy Court for the Central District of California. The
Court ordered the incorporation of the Company, the assignment to us of the
plans to establish a website services provider, and ordered the above securities
to be distributed to creditors of the Debtor in partial satisfaction of their
claims against the Debtor and in order to enhance the creditors’ opportunity for
recovery. The shares were issued in exchange for claims against the
estate of AP Corporate Services, Inc. and were exempt from registration under
the Securities Act of 1933, as amended, because they were issued under section
1145 of the Bankruptcy Code (Title 11 of the U.S. Code), and were therefore
issued without restrictive legend. In addition, we may have also relied upon
section 3(a)(7) of the Securities Act of 1933 as a transaction ordered by a
court as part of a bankruptcy reorganization.
On April
29, 2010, pursuant to the confirmed Plan of Reorganization of the Debtor we also
issued warrants to purchase 5,000,000 shares of our common stock, where
were also distributed to creditors of the Debtor as part of the confirmed Plan
of Reorganization. The warrants consist of 1,000,000 “A Warrants” each
convertible into one share of our common stock at an exercise price of $1.00;
1,000,000 “B Warrants” each convertible into one share of our common stock at an
exercise price of $2.00; 1,000,000 “C Warrants” each convertible into one share
of our common stock at an exercise price of $3.00; 1,000,000 “D Warrants” each
convertible into one share of our common stock at an exercise price of $4.00;
and 1,000,000 “E Warrants” each convertible into one share of our common stock
at an exercise price of $5.00. All warrants are currently exercisable and
may be exercised at any time prior to January 4, 2014. The warrants
were issued in exchange for claims against the estate of AP Corporate Services,
Inc. and were exempt from registration under the Securities Act of 1933, as
amended, because they were issued under section 1145 of the Bankruptcy Code
(Title 11 of the U.S. Code), and were therefore issued without restrictive
legend. In addition, we may have also relied upon section 3(a)(7) of the
Securities Act of 1933 as a transaction ordered by a court as part of a
bankruptcy reorganization.
On April
29, 2010 we issued 10,040,000 restricted shares of our common stock. Of the
shares, 10,000,000 shares were issued to our former President, Kenneth S.
Barton; the total consideration paid for these shares was $30,000 or
approximately $0.003 per share. On the same date we issued 10,000 shares
to our Secretary and Treasurer, Anthony Turnbull, and a total of 30,000 shares
to two attorneys in exchange for services rendered. All these shares
were issued with a restrictive legend in accordance with Rule 144. We
relied upon Section 4(2) of the Securities Act of 1933, as amended for the above
issuance.
DESCRIPTION
OF SECURITIES
Our
authorized capital stock consists of 100,000,000 shares of common stock, par
value $0.0001, and 10,000,000 shares of preferred stock, par value
$0.0001. As of December 14, 2010, there are 15,125,000 shares of our
common stock issued and outstanding, and no shares of our preferred stock issued
or outstanding. However, effective December 29, 2010, our authorized
common stock will increase to 250,000,000 shares, par value
$0.0001. In addition, under our agreements with Rockland Group, LLC
and New Horizon, Inc., we have agreed to create two series of preferred stock,
entitled Series A Convertible Preferred Stock and Series B Convertible Preferred
Stock with the rights and preferences set forth below.
Common Stock. Each
shareholder of our common stock is entitled to a pro rata share of cash
distributions made to shareholders, including dividend payments. The
holders of our common stock are entitled to one vote for each share of record on
all matters to be voted on by shareholders. There is no cumulative
voting with respect to the election of our directors or any other
matter. Therefore, the holders of more than 50% of the shares voted
for the election of those directors can elect all of the
directors. The holders of our common stock are entitled to receive
dividends when and if declared by our Board of Directors from funds legally
available therefore. Cash dividends are at the sole discretion of our
Board of Directors. In the event of our liquidation, dissolution, or
winding up, the holders of common stock are entitled to share ratably in all
assets remaining available for distribution to them after payment of our
liabilities and after provision has been made for each class of stock, if any,
having any preference in relation to our common stock. Holders of
shares of our common stock have no conversion, preemptive, or other subscription
rights, and there are no redemption provisions applicable to our common
stock.
22
Dividend Policy. We
have never paid any dividends and do not expect to pay any stock dividend or any
cash dividends on our common stock in the foreseeable future. We
currently intend to retain our earnings, if any, for use in our
business. Any dividends declared on our common stock in the future
will be at the sole discretion of our Board of Directors and may be subject to
any restrictions that may be imposed by lenders or other third
parties.
Preferred Stock. We
are authorized to issue 10,000,000 shares of preferred stock, par value
$0.001. To date we have not issued, nor established any series for,
any of our preferred stock.
However,
under our agreements with Rockland Group, LLC and New Horizon, Inc., we have
agreed to create two series of preferred stock, entitled Series A Convertible
Preferred Stock and Series B Convertible Preferred Stock. Under our
agreement with Rockland Group, LLC, we agreed to issue Two Million (2,000,000)
Shares of a yet to be created series of our preferred stock in exchange for
$100,000. Under the terms of the agreement with Rockland, we are
obligated to create a new class of preferred stock entitled the Series A
Convertible Preferred Stock with the following rights and preferences: (i)
dividend rights equal to the dividend rights our common stock; (ii) liquidation
preference over our common stock; (iii) each share of Series A Convertible
Preferred Stock will be convertible into one share of our common stock; (iv) no
redemption rights; (v) no call rights by us; (vi) each share of Series A
Convertible Preferred stock will have twenty five (25) votes on all matters
validly brought to our common stockholders for approval; and (vii) mandatory
approval by a majority of the Series A Convertible Preferred stockholders for
certain change of control transactions by us. The other rights and
preferences will be determined by our Board of Directors. We have not
created the Series A Convertible Preferred Stock yet and have, therefore, not
issued the shares. We will not be issuing the shares under the
Purchase Agreement until after the class of Series A Convertible Preferred Stock
has been created with the State of Delaware.
Under our
agreement with New Horizon, Inc., we agreed to issue New Horizon, Inc. Three
Million (3,000,000) shares of a new series of preferred stock to be created by
us (“Series B Convertible Preferred Stock”), restricted in accordance with Rule
144, with the following rights and preferences: (i) dividend rights
equal to the dividend rights of our common stock; (ii) liquidation preference
over the our common stock and equal to that of our Series A Convertible
Preferred Stock; (iii) each share of Series B Convertible Preferred Stock will
be convertible into five (5) shares of our common stock; (iv) no redemption
rights; (v) no call rights by us; and (vi) each share of Series B Convertible
Preferred Stock will have one (1) vote on all matters validly brought to our
common stockholders, with the other rights and preferences to be determined by
the Purchaser’s Board of Directors. Under the terms of the New
Horizon Agreement we may be obligated to issue up to an additional Two Million
(2,000,000) shares of our common stock and One Million Five Hundred Thousand
(1,500,000) shares of the Series B Preferred Stock, with the exact number of
additional shares to be issued, if any, being dependent upon the fair market
value of our common stock in July 2012, as set forth in the New Horizon
Agreement. We will not be issuing these shares until after the class
of Series B Convertible Preferred Stock has been created with the State of
Delaware.
The
availability or issuance of preferred shares in the future could delay, defer,
discourage or prevent a change in control.
Warrants. There are
currently warrants outstanding to acquire an aggregate of 150,000 shares of our
common stock at an exercise price of $2.00 per share. These warrants may be
exercised at any time within four (4) years from the issuance
date. Additionally, on April 29, 2010, pursuant to the Plan of
Reorganization of AP Corporate Services, Inc. (the “Debtor”) we issued warrants
to purchase 5,000,000 shares of our common stock, to certain creditors of
the Debtor as part of the confirmed Plan of Reorganization. The warrants
consist of 1,000,000 “A Warrants” each convertible into one share of our common
stock at an exercise price of $1.00; 1,000,000 “B Warrants” each convertible
into one share of our common stock at an exercise price of $2.00; 1,000,000 “C
Warrants” each convertible into one share of our common stock at an exercise
price of $3.00; 1,000,000 “D Warrants” each convertible into one share of our
common stock at an exercise price of $4.00; and 1,000,000 “E Warrants” each
convertible into one share of our common stock at an exercise price of $5.00.
The “A” through “E” warrants are currently exercisable and may be exercised at
any time prior to January 4, 2014. The “A” through “E” warrants contain a
limitation provisions that the warrants cannot be exercised if it will case the
holder to own more than 4.9% of our then outstanding common
stock. Other than as set forth above, none of these parties owns, in
the aggregate and including shares of our common stock that may be acquired upon
exercise of their warrants, more than five percent (5%) of our common
stock.
23
INDEMNIFICATION
OF DIRECTORS AND OFFICERS
Article
VII of our Articles of Incorporation, as amended, provides that no director
shall have personal liability to the corporation or any of its stockholders for
monetary damages for breach of fiduciary duty as a director or officer involving
any act or omission of any such director or officer. The provision
shall not eliminate or limit the liability of a director (i) for any breach of
the director’s duty of loyalty to the corporation or its stockholder, (ii) for
acts or omissions not in good faith, or which involve intentional misconduct or
a knowing violation of law, (iii) under applicable sections of the Delaware
Corporations Code, or (iv) for any transaction from which the director derived
an improper personal benefit.
Under
Article VII of our amended and restated Articles of Incorporation we shall, to
the fullest extent permitted by Section 145 of the General Corporation Law of
the State of Delaware, as the same may be amended and supplemented, indemnify
any and all persons whom it shall have power to indemnify under said section
from and against any and all expenses, liabilities, or other matters referred to
in or covered by said section. Our amended and restated Articles of
Incorporation will be effective on or about December 29, 2010.
Under
Section 35 of our Bylaws, the personal liability of our directors is eliminated
to the fullest extent permitted by the Delaware Corporations
Code. Under Article V of our amended and restated Bylaws, we may, at
our option, to the maximum extent permitted by the Delaware General Corporation
Law and by the Articles of Incorporation, indemnify each of our agents against
expenses, judgments, fines, settlements, and other amounts actually and
reasonably incurred in connection with any proceeding arising by reason of the
fact that such person is or was an agent of the corporation. For the
purposes of this Section, an “agent” of the corporation includes a person who is
or was a Director, officer, employee, or agent of another corporation,
partnership, joint venture, trust, or other enterprise, or was a Director,
officer, employee, or agent of a corporation which was a predecessor corporation
of the corporation or of any other enterprise at the request of such predecessor
corporation. Our amended and restated Bylaws will be effective on or
about December 29, 2010.
Insofar
as indemnification for liabilities arising under the Securities Act of 1933 (the
“Act”) may be permitted to directors, officers and controlling persons of the
issuer pursuant to the foregoing provisions, or otherwise, the issuer has been
advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable.
CHANGES
IN AND DISAGREEMENTS WITH ACCOUNTANTS
There is
no disclosure required under this item.
ITEM
3.02 UNREGISTERED SALES OF EQUITY
SECURITIES
On
November 4, 2010, we entered into a Securities Purchase Agreement with Rockland
Group, LLC, an entity controlled by Harry Pond, one of our Directors and our
largest shareholder, under which Rockland Group agreed to purchase Two Million
(2,000,000) Shares of a yet to be created series of our preferred stock in
exchange for $100,000. Under the terms of the Purchase Agreement we
are obligated to create a new class of preferred stock entitled the Series A
Convertible Preferred Stock with the following rights and preferences: (i)
dividend rights equal to the dividend rights our common stock; (ii) liquidation
preference over our common stock; (iii) each share of Series A Convertible
Preferred Stock will be convertible into one share of our common stock; (iv) no
redemption rights; (v) no call rights by us; (vi) each share of Series A
Convertible Preferred stock will have twenty five (25) votes on all matters
validly brought to our common stockholders for approval; and (vii) mandatory
approval by a majority of the Series A Convertible Preferred stockholders for
certain change of control transactions by us. The other rights and
preferences will be determined by our Board of Directors. We have not
created the Series A Convertible Preferred Stock yet and have, therefore, not
issued the shares. We will not be issuing the shares under the
Purchase Agreement until after the class of Series A Convertible Preferred Stock
has been created with the State of Delaware. At that time we will
file a new Form 8-K for the issuance, or put the relevant information in the
appropriate periodic filing. The issuances were exempt from
registration pursuant to Section 4(2) of the Securities Act of 1933, and each of
the investors was either accredited or sophisticated and familiar with our
operations.
24
Under the
New Horizon Agreement, as consideration for the Asset, we agreed to issue to New
Horizon, Inc., the following: (i) a convertible promissory note in the principal
amount of Two Million Dollars ($2,000,000), convertible into our common stock at
the conversion ratio of One Dollar Fifty Cents ($1.50) per share, with the
option by us to pay the note with our common stock in lieu of cash at the rate
of one share of our common stock per One Dollar ($1) being paid (see Exhibit
10.2, attached hereto), (ii) Four Million (4,000,000) shares of our common
stock, restricted in accordance with Rule 144, and (iii) Three Million
(3,000,000) shares of a new series of preferred stock to be created by us,
restricted in accordance with Rule 144, with the following rights and
preferences: (i) dividend rights equal to the dividend rights of our
common stock; (ii) liquidation preference over our common stock and equal to
that of our Series A Convertible Preferred Stock; (iii) each share of Series B
Convertible Preferred Stock will be convertible into five (5) shares of our
common stock; (iv) no redemption rights; (v) no call rights by us; and (vi) each
share of Series B Convertible Preferred Stock will have one (1) vote on all
matters validly brought to our common stockholders, with the other rights and
preferences to be determined by our Board of Directors. Under the
terms of the New Horizon Agreement we may be obligated to issue up to an
additional Two Million (2,000,000) shares of our common stock and One Million
Five Hundred Thousand (1,500,000) shares of the Series B Preferred Stock, with
the exact number of additional shares to be issued, if any, being dependent upon
the fair market value of our common stock in July 2012, as set forth in the New
Horizon Agreement. We have not created the Series B Convertible
Preferred Stock yet and have, therefore, not issued the shares. We
will not be issuing the shares under the Purchase Agreement until after the
class of Series B Convertible Preferred Stock has been created with the State of
Delaware. As a result of this transaction, New Horizon, Inc. became a
holder of more than 10% of our outstanding common stock. The
issuances were exempt from registration pursuant to Section 4(2) of the
Securities Act of 1933, and each of the investors was either accredited or
sophisticated and familiar with our operations.
Under the RWIP Agreement, as
consideration for the Asset, we agreed to issue RWIP, LLC, the following: (i) a
convertible promissory note in the principal amount of One Hundred Twenty Five
Thousand Dollars ($125,000), convertible into our common stock at the conversion
ratio of One Dollar Fifty Cents ($1.50) per share, (ii) a warrant to purchase
One Hundred Fifty Thousand (150,000) shares of our common stock, restricted in
accordance with Rule 144, with an exercise price of Two Dollars ($2) per share,
and (iii) royalties equal to Twenty Percent (20%) of the net income (revenue
minus expenses) received by the Purchaser in connection with the assets
purchased from RWIP (in order to calculate this amount the revenue and
expenses related to the RWIP assets will be calculated separately from our other
business assets). The issuances were exempt from registration
pursuant to Section 4(2) of the Securities Act of 1933, and each of the
investors was either accredited or sophisticated and familiar with our
operations.
On April 29, 2010, pursuant to the
confirmed Plan of Reorganization of AP Corporate Services, Inc. (the “Debtor”)
we issued 1,085,000 shares of our common stock to 93 shareholders by order of
the U.S. Bankruptcy Court for the Central District of California. The
Court ordered the incorporation of the Company, the assignment to us of the
plans to establish a website services provider, and ordered the above securities
to be distributed to creditors of the Debtor in partial satisfaction of their
claims against the Debtor and in order to enhance the creditors’ opportunity for
recovery. The shares were issued in exchange for claims against the
estate of AP Corporate Services, Inc. and were exempt from registration under
the Securities Act of 1933, as amended, because they were issued under section
1145 of the Bankruptcy Code (Title 11 of the U.S. Code), and were therefore
issued without restrictive legend. In addition, we may have also relied upon
section 3(a)(7) of the Securities Act of 1933 as a transaction ordered by a
court as part of a bankruptcy reorganization.
25
On April
29, 2010, pursuant to the confirmed Plan of Reorganization of the Debtor we also
issued warrants to purchase 5,000,000 shares of our common stock, where
were also distributed to creditors of the Debtor as part of the confirmed Plan
of Reorganization. The warrants consist of 1,000,000 “A Warrants” each
convertible into one share of our common stock at an exercise price of $1.00;
1,000,000 “B Warrants” each convertible into one share of our common stock at an
exercise price of $2.00; 1,000,000 “C Warrants” each convertible into one share
of our common stock at an exercise price of $3.00; 1,000,000 “D Warrants” each
convertible into one share of our common stock at an exercise price of $4.00;
and 1,000,000 “E Warrants” each convertible into one share of our common stock
at an exercise price of $5.00. All warrants are currently exercisable and may be
exercised at any time prior to January 4, 2014. The warrants were
issued in exchange for claims against the estate of AP Corporate Services, Inc.
and were exempt from registration under the Securities Act of 1933, as amended,
because they were issued under section 1145 of the Bankruptcy Code (Title 11 of
the U.S. Code), and were therefore issued without restrictive legend. In
addition, we may have also relied upon section 3(a)(7) of the Securities Act of
1933 as a transaction ordered by a court as part of a bankruptcy
reorganization.
On April
29, 2010 we issued 10,040,000 restricted shares of our common stock. Of the
shares, 10,000,000 shares were issued to our former President, Kenneth S.
Barton; the total consideration paid for these shares was $30,000 or
approximately $0.003 per share. On the same date we issued 10,000 shares
to our Secretary and Treasurer, Anthony Turnbull, and a total of 30,000 shares
to two attorneys in exchange for services rendered. All these shares
were issued with a restrictive legend in accordance with Rule 144. We
relied upon Section 4(2) of the Securities Act of 1933, as amended for the above
issuance.
ITEM
5.06 CHANGES IN COMPANY
SHELL STATUS
New Horizon
Transaction
On December
8, 2010, we entered into an Asset Purchase Agreement with New Horizon, Inc., a
Texas corporation (the “New Horizon Agreement”). On December 9, 2010,
the transactions contemplated by the New Horizon Agreement closed (the
“Closing”). Pursuant to the Agreement, we acquired certain assets
from New Horizon, including the right to receive any proceeds New Horizon is
entitled to receive from the sale of the Myself® pelvic muscle
trainer. The calculation of the amounts we are entitled to receive
from the sales of the Myself® pelvic muscle trainer are listed on Exhibit A to the New
Horizon Agreement, which is attached hereto as Exhibit
10.8.
RWIP
Transaction
On December
10, 2010, we entered into an Asset Purchase Agreement with RWIP, LLC, an Oregon
limited liability company (the “RWIP Agreement”). On December 13,
2010, the transactions contemplated by the RWIP Agreement closed (the
“Closing”). Pursuant to the Agreement, we acquired certain assets
from RWIP, including a patent for a revolutionary tampon
applicator. The description of the actual assets is listed on Exhibit A to the RWIP
Agreement, which is attached hereto as Exhibit
10.11.
Under the
RWIP Agreement, as consideration for the Asset, we agreed to issue the
following: (i) a convertible promissory note in the principal amount of One
Hundred Twenty Five Thousand Dollars ($125,000), convertible into our common
stock at the conversion ratio of One Dollar Fifty Cents ($1.50) per share, (ii)
a warrant to purchase One Hundred Fifty Thousand (150,000) shares of our common
stock, restricted in accordance with Rule 144, with an exercise price of Two
Dollars ($2) per share, and (iii) royalties equal to Twenty Percent (20%) of the
net income (revenue minus expenses) received by the Purchaser in connection with
the assets purchased from RWIP (in order to calculate this amount
the revenue and expenses related to the RWIP assets will be calculated
separately from our other business assets).
Consulting
Agreement
On December 13, 2010, we entered into a
Consulting Agreement with RWIP, LLC, under which RWIP, LLC is to provide a
variety of services, including developing, testing and selling products based on
our medical applicator technology. Under the terms of the agreement,
we are obligated to pay RWIP, LLC, an upfront $30,000 retainer and then $10,000
per month cash for the next twelve (12) months, assuming certain threshholds are
met by RWIP with regards to developing the assets.
26
As a
result of these transactions we acquired assets, and started operations,
sufficient to cease being a shell company, as defined in Rule
12b-2. Additional information regarding these transactions and the
assets are contained herein.
ITEM
9.01 FINANCIAL STATEMENTS
AND EXHIBITS
(a) Financial
Statements of Business Acquired
We are
not required to provide financial statements under this Item
9.01(a).
(b) Pro
Forma Financial Information
We are
not required to provide financial statements under this Item
9.01(b).
(c) Exhibits
2.1
(1)
|
Plan
of Reorganization of AP Corporate Services, Inc.
|
|
3.1
(1)
|
Articles
of Incorporation of I-Web Media, Inc. filed April 29,
2010
|
|
3.2
(1)
|
Bylaws
of I-Web Media, Inc.
|
|
10.1
(1)
|
Form
of “A” Warrant
|
|
10.2
(1)
|
Form
of “B” Warrant
|
|
10.3
(1)
|
Form
of “C” Warrant
|
|
10.4
(1)
|
Form
of “D” Warrant
|
|
10.5
(1)
|
Form
of “E” Warrant
|
|
10.6
(2)
|
Agreement
to Purchase Common Stock by and between Kenneth S. Barton, Rockland Group,
LLC, and I-Web Media, Inc., dated November 3, 2010
|
|
10.7
(2)
|
Securities
Purchase Agreement by and between I-Web Media, Inc. and Rockland Group,
LLC, dated November 4, 2010
|
|
10.8
|
Asset
Purchase Agreement with New Horizon, Inc. dated December 9,
2010
|
|
10.9
|
Convertible
Promissory Note Held by New Horizon, Inc. dated December 9,
2010
|
|
10.10 |
Assignment
of Rights Agreement with New Horizon, Inc. dated December 9,
2010
|
|
10.11
|
Asset
Purchase Agreement with RWIP, LLC dated December 10,
2010
|
|
10.12
|
Convertible
Promissory Note Held by RWIP, LLC dated December 10,
2010
|
|
10.13
|
Warrant
Agreement with RWIP, LLC dated December 10,
2010
|
27
10.14
|
Consulting
Agreement with RWIP, LLC dated December 13,
2010
|
(1)
Incorporated
by reference from our Registration Statement on Form 10-12G/A filed with the
Commission on August 12, 2010.
(2)
Incorporated
by reference from our Current Report on Form 8-K filed with the Commission on
November 8, 2010.
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the Registrant has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
Dated: December
15, 2010
|
I-Web
Media, Inc.
|
|
a
Delaware corporation
|
||
/s/ James F. Groelinger
|
||
By: James F.
Groelinger
|
||
Its: Chief Executive
Officer
|
28