Attached files
As filed with the Securities and Exchange Commission on ______, 2011.
Commission File No. 333-165211
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-1
AMENDMENT NO. 2
Registration Statement Under
THE SECURITIES ACT OF 1933
ACTIVEIN, INC.
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(Exact name of registrant as specified in charter)
Delaware 3841 None
--------------------------- -------------------- ---------------------
(State or other jurisdiction (Primary Standard Classi- (IRS Employer
of incorporation) fication Code Number) I.D. Number)
1 Leshem Street
Kiryat Gat
82000, Israel
972-8-6811761
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(Address and telephone number of principal executive offices)
1 Leshem Street
Kiryat Gat
82000, Israel
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(Address of principal place of business or intended principal
place of business)
Adi Plaschkes
1 Leshem Street
Kiryat Gat
82000, Israel
972-8-6811761
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(Name, address and telephone number of agent for service)
Copies of all communications, including all communications sent
to the agent for service, should be sent to:
William T. Hart, Esq.
Hart & Trinen, LLP
1624 Washington Street
Denver, Colorado 80203
303-839-0061
As soon as practicable after the effective date of this Registration Statement
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933 check the following box: [X]
1
If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, please check the following box and list
the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(d) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
Indicate by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
the definitions of "large accelerated filer," "accelerated filer" and "smaller
reporting company" in Rule 12b2 of the Exchange Act.
Large accelerated filer [ ] Accelerated filer [ ]
Non-accelerated filer [ ] Smaller reporting company [X]
(Do not check if a smaller reporting company)
CALCULATION OF REGISTRATION FEE
Title of each Proposed Proposed
Class of Maximum Maximum
Securities Securities Offering Aggregate Amount of
to be to be Price Per Offering Registration
Registered Registered Share (1) Price Fee
---------- ---------- ---------- --------- ------------
Common Stock (2) 5,000,000 $0.20 $1,000,000 $71
Common Stock (3) 275,000 $0.20 $ 55,000 5
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$76
(1) Offering price computed in accordance with Rule 457(c). (2) Shares of common
stock offered by the Company. (3) Shares of common stock offered by selling
shareholders
The registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the registrant shall
file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of l933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
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PROSPECTUS
ACTIVEIN, INC.
Common Stock
5,000,000 shares to be offered by Company
275,000 shares to be offered by Selling Shareholders
By means of this prospectus ActiVein is offering for sale up to 5,000,000
shares of common stock at a price of $0.20 per share and four of ActiVein's
shareholders are offering up to 275,000 shares of common stock at a price of
$0.20 per share.
The shares ActiVein is offering will be sold directly by its officers.
Potential investors will include professional and personal contacts of
ActiVein's executive officers as well as any referrals from these persons.
ActiVein will not pay any commission or other form of remuneration in connection
with the sale of these shares.
The offering by ActiVein is being conducted on a self underwritten/best
efforts basis. There is no minimum number of shares required to be sold.
Proceeds from the sale of shares by ActiVein will be delivered directly to
ActiVein and will not be deposited in any escrow account. If all shares are
sold, ActiVein will receive gross proceeds of $1,000,000. ActiVein plans to end
its offering on June 30, 2011. However, at ActiVein's discretion, its offering
may end sooner or be extended until August 31, 2011. ActiVein will end its
offering prior to June 30, 2011 if all of the shares which it offers have been
sold or it believes that potential investors will not purchase any more shares
offered by ActiVein. ActiVein will extend its offering if the entire offering
has not been sold and it believes that potential investors will purchase
additional shares.
If and when ActiVein's common stock becomes quoted on the OTC Bulletin
Board, and after ActiVein terminates its offering, four of ActiVein's
shareholders may offer to sell, by means of this prospectus, up to 275,000
shares of ActiVein's common stock. The shares owned by the selling shareholders
may be sold at prices and terms then prevailing or at prices related to the
then-current market price of ActiVein's common stock, or in negotiated
transactions. It is not anticipated the selling shareholders will sell their
shares until after ActiVein terminates its offering and after ActiVein's common
stock is quoted on the OTC Bulletin Board. However if the selling shareholders
offer to sell their shares prior to quotation on the OTC Bulletin Board, the
selling shareholders may only offer to sell their shares at a price of $0.20 per
share. Three of these shareholders are officers of ActiVein. The fourth
shareholder is controlled by a director of ActiVein.
ActiVein will not receive any proceeds from the sale of the common stock by
the selling stockholders. ActiVein will pay for the remaining expenses of this
offering, which are estimated to be $40,000.
As of the date of this prospectus there was no public market for ActiVein's
common stock. Although ActiVein plans to have its shares quoted on the OTC
Bulletin Board, ActiVein may not be successful in establishing any public market
for its common stock. As of the date of this prospectus, an application had not
been made to have ActiVein's common stock quoted on the OTC Bulletin Board.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or passed upon the
accuracy or adequacy of this prospectus. Any representation to the contrary is a
criminal offense.
THESE SECURITIES ARE SPECULATIVE AND INVOLVE A HIGH DEGREE OF RISK. FOR A
DESCRIPTION OF CERTAIN IMPORTANT FACTORS THAT SHOULD BE CONSIDERED BY
PROSPECTIVE INVESTORS, SEE "RISK FACTORS" BEGINNING ON PAGE 2 OF THIS
PROSPECTUS.
The date of this prospectus is ___________, 2011. 3
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PROSPECTUS SUMMARY
ActiVein was incorporated in Delaware in January 2007 under the name UNLTD
Ventures Incorporated. Between January 2007 and March 2009 ActiVein did not
conduct any business.
In March 2009 ActiVein acquired ActiVein Ltd., an Israeli corporation, for
4,800,190 shares of its common stock, 3,770,935 shares of its Series A Preferred
stock, and a warrant which allows the holder to purchase an additional 428,768
Series A preferred shares.
The agreement relating to the acquisition of ActiVein, Ltd. provided that
1,000,106 shares would be issued to the ActiVein, Ltd. Employee Stock Ownership
Plan. However, ActiVein and ActiVein, Ltd. agreed that these shares would not be
issued. There is no plan to issue these shares at the present time, primarily
due to the fact that, as of the date of this prospectus, ActiVein did not have
any full-time employees.
On April 9, 2009 UNLTD changed its name to ActiVein, Inc.
Unless otherwise indicated, all references to ActiVein's business and
operations include the business and operations of ActiVein Ltd.
ActiVein is developing a novel intravenous catheter which will reduce the
number of times a hospital patient is stuck with a needle to withdraw blood
samples. An intravenous (IV) catheter, used to deliver fluids to the patient, is
normally inserted into at least one vein of a patient during hospitalization.
For various reasons, blood samples cannot be withdrawn through the same
catheter. As a result, during a hospital stay a patient may be subjected to
numerous needle sticks which are required to obtain blood samples for laboratory
tests.
ActiVein's dual-action catheter is designed to replace the standard
conventional "hospital IV line" by enabling both fluid infusion and blood
withdrawal using a single vein over an entire hospitalization period.
ActiVein has developed a model that replicates the human peripheral venous
system in terms of vessel thickness, diameter, internal valves and pressure. The
fluid in this model mimics human blood in terms of viscosity. ActiVein's
catheter has been tested in the model to analyze vessel penetration, catheter
strength and the capability of the catheter to deliver and draw fluids. The
tests have shown that ActiVein's catheter can provide its intended dual
functionality of fluid or medication delivery as well as blood withdrawal.
As of December 31, 2010 ActiVein had 13,908,257 outstanding shares of
common stock, and 3,770,935 outstanding shares of Series A Preferred stock. Each
Series A Preferred share is convertible into one share of ActiVein's common
stock.
ActiVein will need approximately $40,000 to pay the expenses of this
offering . During the twelve month period following the date of this prospectus
ActiVein will need approximately $200,000 for general and administrative
expenses and $1,500,000 for research and development activities, patent filings,
and preparing applications to be submitted to regulatory agencies.
4
As of the date of this prospectus ActiVein had not applied to the FDA or
any foreign regulatory authority to obtain clearance to sell any of its
products. ActiVein will need FDA clearance to sell any of its products in the
United States and clearance from foreign regulatory authorities to sell its
products in foreign countries.
As of February 28, 2010 and November 30, 2010 ActiVein had total assets of
$106,499 and $20,133 respectively. For the year ended February 28, 2010 and the
nine months ended November 30, 2010 ActiVein had net losses of $(297,237) and
$(161,767) respectively. ActiVein's auditors have expressed substantial doubt
regarding ActiVein's ability to continue as a going concern.
ActiVein's offices are located at 1 Leshem Street, Kiryat Gat, 82000,
Israel. ActiVien's telephone number is 972-8-6811761 and its facsimile number is
972-8-6811763.
ActiVein's website is www.activein.co.il
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Forward Looking Statements
This Prospectus contains various forward-looking statements that are based
on ActiVein's beliefs as assumptions made by and information currently available
to ActiVein. When used in this Prospectus, the words "believe", "expect",
"anticipate", "estimate" "intend", "project", "predict" and similar expressions
are intended to identify forward-looking statements. These statements may
involve projections, capital requirements, operating expenses, and the like, and
are subject to certain risks, uncertainties and assumptions which could cause
actual results to differ materially from projections or estimates. Factors which
could cause actual results to differ materially are discussed at length under
the heading "Risk Factors". Should one or more of the enumerated risks or
uncertainties materialize, or should underlying assumptions prove incorrect,
actual results may vary materially from those anticipated, estimated or
projected. Investors should not place undue reliance on forward-looking
statements, all of which speak only as of the date made.
The Offering
By means of this prospectus:
o ActiVein is offering to sell up to 5,000,000 shares of its common stock
at a price of $0.20 per share, and
o Four of ActiVein's shareholders are offering to sell up to 275,000 shares
of its common stock. If and when ActiVein's common stock becomes quoted
on the OTC Bulletin Board and after ActiVein terminates its offering,
the shares owned by the selling shareholders may be sold in
the over-the-counter market, or otherwise, at prices and terms then
prevailing or at prices related to the then-current market price, or in
negotiated transactions. Three of these shareholders are officers of
ActiVein. The fourth shareholder is controlled by a former director of
ActiVein.
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The purchase of the securities offered by this prospectus involves a high
degree of risk. Risk factors include the lack of any relevant operating history,
losses since ActiVein was incorporated, and the possible need for ActiVein to
sell shares of its common stock to raise additional capital. See "Risk Factors"
below for additional Risk Factors.
RISK FACTORS
Prospective investors should consider the following risk factors which
affect ActiVein's business and this offering. These risk factors discuss all
material risks known to ActiVein which pertain to an investment in ActiVein's
common stock. If any of the risks discussed below materialize, ActiVein's
business may suffer and ActiVein's common stock could decline in value or become
worthless.
Risk Factors Related to ActiVein's Business
ActiVein has a history of losses and may never be profitable. ActiVein has never
earned a profit. ActiVein expects to incur losses during the foreseeable future
and may never be profitable.
The failure of ActiVein to obtain capital may significantly restrict ActiVein's
proposed operations. ActiVein needs additional capital to fund its operating
losses and to develop its intravenous catheter. There is no minimum number of
shares which is required to be sold in this offering and all proceeds from the
sale of the shares will be delivered to ActiVein. If only a small number of
shares are sold, the amount received from this offering may provide little
benefit to ActiVein. During the twelve month period following the date of this
prospectus ActiVein will need approximately $200,000 for general and
administrative expenses and $1,500,000 for research and development activities,
patent filings and preparing applications to be submitted to regulatory
agencies. Accordingly, even if all shares offered are sold, ActiVein will need
additional capital. ActiVein's issuance of equity or equity-related securities
to raise capital will dilute the ownership interest of existing shareholders.
ActiVein does not know what the terms of any future capital raising may be
but any future sale of ActiVein's equity securities would dilute the ownership
of existing stockholders and could be at prices substantially below the price of
the shares of common stock sold in this offering. The failure of ActiVein to
obtain the capital which it requires will result in the slower implementation of
ActiVein's business plan or its inability of ActiVein to implement its business
plan. There can be no assurance that ActiVein will be able to obtain any capital
which it will need.
To enable ActiVein to continue in business ActiVein will eventually need to
earn a profit or obtain additional financing until ActiVein is able to earn a
profit. As a result of ActiVein's short operating history it is difficult for
potential investors to evaluate its business. There can be no assurance that
ActiVein can implement its business plan, that it will be profitable, or that
the shares which may be sold in this offering will have any value.
ActiVein will not receive any proceeds from the sale of the shares offered
by the selling shareholders.
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ActiVein's operations are dependent upon the continued services of its officers.
The loss of its only officers, whether as a result of death, disability or
otherwise, may have a material adverse effect upon the business of ActiVein.
Since one of ActiVein's officers plan to devote only a portion of his time to
ActiVein's business, ActiVein's chances of being profitable will be less than if
it had full time management. As of the date of this prospectus ActiVein had only
three officers. Dr. Yoav Paz, ActiVein's Chief Medical Officer, is employed by
another company and plans on devoting only 20% of his time to ActiVein.
Accordingly, his other responsibilities could take precedence over his duties to
ActiVein.
ActiVein's Auditors have doubt as to its ability to continue in business. In
their report on ActiVein's February 28, 2010 financial statements, Actvein's
auditors expressed substantial doubt as to ActiVein's ability to continue as a
going concern. A going concern qualification could impair ActiVein's ability to
finance operations through the sale of debt or equity securities. ActiVein's
ability to continue as a going concern will depend, in large part, on ActiVein's
ability to obtain additional financing and generate positive cash flow from
operations, neither of which is certain. If ActiVein is unable to achieve these
goals, ActiVein's business would be jeopardized and it may not be able to
continue operations.
To date, ActiVein has not generated any revenue. ActiVein's future success
depends on ActiVein's ability to begin generating revenues on a regular and
continuing basis. Since inception, ActiVein has not generated any revenue.
ActiVein's future success depends on its ability to begin generating revenues on
a regular and continuing basis and to properly manage costs. ActiVein's ability
to generate revenues depends on a number of factors, some of which are outside
ActiVein's control. These factors include the following:
o ActiVein's ability to obtain necessary government and regulatory
approvals;
o ActiVein's ability to successfully complete all the research and
development work on its intravenous catheter;
o ActiVein's ability to successfully commercialize its intravenous
catheter technology; and
o ActiVein's ability to protect its intellectual property.
ActiVein cannot make any assurances that it will be able to meet any of
these challenges, or that ActiVein will be able to generate any revenue. If
ActiVein does not generate any revenue, investors may lose their entire
investment.
Any failure to obtain or any delay in obtaining required regulatory approvals
may adversely affect ActiVein's ability to successfully license or market its
products. In addition, the FDA may determine that ActiVein's products are Class
III Medical Devices which would subject ActiVein to rigorous premarket approval.
The intravenous catheter technology that ActiVein is developing is subject to
oversight by regulatory authorities in the United States and in other countries,
including, without limitation, the FDA. ActiVein believes that its intravenous
catheter will be classified as a Type II Medical Device by the FDA. If
classified as a Type II Medical Device, this product will not come under the
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more rigorous approval guidelines applicable to Type III Medical Devices (e.g.,
HIV test kits) or the arduous Phase I, II, and III clinical trial process that
is required for approval of drugs. Type II Medical Device approval falls under
the category referred to as a 510k application and after submission of
supporting data to the FDA is subject to a 90-day review process. ActiVein has
not initiated the process to obtain marketing clearance for its product in the
United States or any other country. ActiVein has not had any communication with
the FDA regarding whether its products are eligible for approval as Class II
Medical Devices.
However, if the FDA classifies ActiVein's catheter as a Class III medical
device, then a pre market approval would be required which typically requires
more extensive clinical data and a longer regulatory process (approximately one
year or longer if additional data and review are required).
Among other requirements, FDA marketing clearance and approval of the
facilities used to manufacture ActiVein's product will be required before
ActiVein's intravenous catheters may be marketed in the United States.
A similar regulatory process will be required by European regulatory
authorities before ActiVein's products can be marketed in Europe. As with the
FDA review process, there are numerous risks associated with the review of
medical devices by foreign regulatory agencies. The foreign regulatory agencies
may request additional data to demonstrate the clinical safety and efficacy of a
product.
Although FDA marketing clearance may not be required for certain foreign
markets, ActiVein believes that FDA clearance for ActiVein's intravenous
catheter would add credibility when negotiating with overseas distributors.
Failure to obtain FDA marketing clearance in the United States may limit
ActiVein's ability to successfully market its product even where regulatory
approvals are not required.
Delays or rejection in obtaining FDA marketing clearance may also be
encountered based upon changes in applicable law or regulatory policy during the
period of regulatory review. Any failure to obtain, or any delay in obtaining,
marketing clearance would adversely affect ActiVein's ability to license or
market its intravenous catheter. Moreover, even if FDA marketing clearance is
granted, such approval may include significant limitations on indicated uses for
which the product could be marketed.
Both before and after marketing clearance is obtained, a product and its
manufacturer are subject to comprehensive regulatory oversight. Violations of
regulatory requirements at any stage of the process may result in adverse
consequences, including the FDA's delay in approving or refusing to approve a
product for marketing, withdrawal of an approved product from the market and/or
the imposition of criminal penalties against the manufacturer. In addition,
later discovery of previously unknown problems relating to a marketed product
may result in restrictions on such product or manufacturer including withdrawal
of the product from the market.
ActiVein cannot assure any investors that it will receive the required
clearances in order to be able to market its intravenous catheter.
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If ActiVein's products do not achieve market acceptance, ActiVein will be unable
to generate significant revenues. The commercial success of ActiVein's
intravenous catheter will depend primarily on convincing health care providers
to adopt and use ActiVein's product. To accomplish this, ActiVein, together with
any other marketing or distribution collaborators, will need to convince members
of the medical community of the benefits of ActiVein's product through, for
example, published papers, presentations at scientific conferences and
additional clinical data. Medical providers will not use ActiVein's product
unless it can demonstrate that ActiVein's product consistently produces results
comparable or superior to existing products, and has acceptable safety profiles
and costs. If ActiVein is not successful in these efforts, market acceptance of
its product could be limited. Even if ActiVein demonstrates the effectiveness of
its product, medical practitioners may still use other products. If ActiVein's
product does not achieve broad market acceptance, ActiVein will be unable to
generate significant revenues, which would have a material adverse effect on its
business, cash flows and results of operations.
ActiVein may not achieve or maintain a competitive position in its industry and
future technological developments may result in ActiVein's proprietary
technologies becoming uneconomical or obsolete. The field that ActiVein is
involved in is undergoing rapid and significant technological change. Activien's
ability to successfully commercialize various applications of its intravenous
catheter technology will depend on ActiVein's ability to maintain its
technological advantage. ActiVein cannot assure investors that ActiVein will
achieve or maintain such a competitive position or that other technological
developments will not cause its proprietary technologies to become uneconomical
or obsolete. Many of ActiVein's potential competitors, including large
multi-national pharmaceutical companies, well-capitalized biotechnology
companies, and privately and publicly financed research facilities, have
significantly greater financial resources than ActiVein. ActiVein's revenues and
profits will be adversely impacted if it cannot compete successfully with new or
existing products or technologies.
ActiVein's patents might not protect its technology from competitors. Certain
aspects of ActiVein's technologies areare protected by foreign patents. Although
ActiVein has filed a patent application in the United States, there is no
assurance that any patentpatent applications will result in the issuance of new
patents. Furthermore, there is no assurance as to the breadth and degree of
protection any issued patents might afford ActiVein. ActiVein may not be able to
prevent misappropriation of its proprietary rights, particularly in countries
where the laws may not protect such rights as fully as in the United States.
Thus, any patents that ActiVein owns may not provide commercially meaningful
protection from competition. Disputes may arise between ActiVein and others as
to the scope, validity and ownership rights of patents. Any defense of patents
could prove costly and time consuming and ActiVein cannot assure investors that
it will be in a position, or will deem it advisable, to carry on such a defense.
ActiVein's patents may not contain claims that are sufficiently broad to prevent
others from practicing its technologies or developing competing products.
Competitors may be able to use technologies in competing products that perform
substantially the same as ActiVein's technologies but avoid infringing on
ActiVein's patent claims. Under these circumstances, ActiVein's patents would be
of little commercial value.
ActiVein relies on maintaining competitively sensitive know-how and other
information as trade secrets, which may not sufficiently protect this
information. Disclosure of this information could impair ActiVein's competitive
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position. As to many technical aspects of ActiVein's business, ActiVein has
concluded that competitively sensitive information is either not patentable or
that, for competitive reasons, it is not commercially advantageous to seek
patent protection. In these circumstances, ActiVein seeks to protect this
proprietary information by maintaining it in confidence as a trade secret.
However, the disclosure of ActiVein's trade secrets would impair its competitive
position, and adequate remedies may not exist in the event of unauthorized use
or disclosure of ActiVein's confidential information. Further, to the extent
that ActiVein's employees, consultants or contractors use trade secret
technology or know-how owned by others in their work for ActiVein, disputes may
arise as to the ownership of related inventions.
ActiVein may incur significant liability if it infringes the patents and other
proprietary rights of third parties. In the event that ActiVein's technologies
infringe or violate the patent or other proprietary rights of third parties, it
may be prevented from pursuing product development, manufacturing or
commercialization of any product that uses these technologies. There may be
patents held by others of which ActiVein is unaware that contain claims that
ActiVein's product or operations infringe. In addition, given the complexities
and uncertainties of patent laws, there may be patents of which ActiVein knows
that it may ultimately be held to infringe, particularly if the claims of the
patent are determined to be broader than ActiVein believes them to be.
If a third party claims that ActiVein infringes its patents, any of the
following may occur:
o ActiVein may become liable for substantial damages for past
infringement if a court decides that its technologies infringe upon a
competitor's patent;
o a court may prohibit ActiVein from selling or licensing its product
without a license from the patent holder, which may not be available on
commercially acceptable terms or at all, or which may require ActiVein
to pay substantial royalties or grant cross-licenses to its patents;
and
o ActiVein may have to redesign its product so that it does not infringe
upon the patent rights of others, which may not be possible or could
require substantial funds or time.
In addition, employees, consultants, contractors and others may use the
trade secret information of others in their work for ActiVein or disclose its
trade secret information to others. Either of these events could lead to
disputes over the ownership of inventions derived from that information or
expose ActiVein to potential damages or other penalties.
If product liability lawsuits are brought against ActiVein, ActiVein might incur
substantial liabilities and could be required to limit the commercialization of
its product. If ActiVein's product does not function properly, it may be exposed
to the risk of product liability claims. ActiVein may even be subject to claims
against it despite the fact that the injury is due to the actions of others,
such as manufacturers or medical personnel. Any product liability litigation
would consume substantial amounts of ActiVein's financial and managerial
resources and might result in adverse publicity, regardless of the ultimate
outcome of the litigation. ActiVein does not currently maintain clinical trial
insurance or product liability insurance and it may never obtain such insurance.
In any event, liability insurance is subject to deductibles and coverage
limitations and may not provide adequate coverage against potential claims or
losses. A successful product liability claim brought against ActiVein could
cause it to incur substantial costs and liabilities.
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Federal healthcare reform may adversely affect ActiVein's results of operations.
The Patient Protection Affordable Care Act (the "PPACA") was enacted in March
2010. Under the PPACA, beginning in 2013, medical device manufacturers, such as
ActiVein, will pay a 2.3% excise tax on U.S. sales of certain medical devices.
The PPACA reduces Medicare and Medicaid payments to hospitals, clinical
laboratories and pharmaceutical companies, and could otherwise reduce the volume
of medical procedures. These factors, in turn could result in reduced demand for
ActiVein's products and increased downward pricing pressure. While the PPACA is
intended to expand health insurant coverage to uninsured persons in the United
States, the impact of any overall increase in access to healthcare on potential
sales of ActiVein's products is uncertain at this time. Further, ActiVein cannot
predict with any certainty what other impact the PPACA may have on its business.
Risk Factors Related to this Offering
As of the date of this prospectus there was no public market for ActiVein's
common stock and if no public market develops, purchasers of the shares offered
by this prospectus may be unable to sell their shares. Since there is no minimum
amount required to be sold in this offering, if only a small number of shares
are sold, the market for ActiVein's common stock may not be liquid. If
purchasers are unable to sell their shares, purchasers may never be able to
recover any amounts which they paid for ActiVein's shares.
Because there is no public market for ActiVein's common stock, the price for its
shares was arbitrarily established, does not bear any relationship to ActiVein's
assets, book value or net worth, and may be greater than the price which
investors in this offering may receive when they resell their shares.
Accordingly, the offering price of ActiVein's common stock should not be
considered to be any indication of the value of its shares. The factors
considered in determining the offering price included ActiVein's future
prospects and the likely trading price for its common stock if a public market
ever develops. Investors that purchase shares from ActiVein may pay more for
their shares than investors who purchase their shares from the selling
shareholders.
Should a market for ActiVein's common stock ever develop, disclosure
requirements pertaining to penny stocks may reduce the level of trading activity
in the market for ActiVein's common stock and investors may find it difficult to
sell their shares. If a market ever develops for the common stock of ActiVein,
trades of ActiVein's common stock will be subject to Rule 15g-9 of the
Securities and Exchange Commission, which rule imposes certain requirements on
broker/dealers who sell securities subject to the rule to persons other than
established customers and accredited investors. For transactions covered by the
rule, brokers/dealers must make a special suitability determination for
purchasers of the securities and receive the purchaser's written agreement to
the transaction prior to sale. The Securities and Exchange Commission also has
rules that regulate broker/dealer practices in connection with transactions in
"penny stocks". Penny stocks generally are equity securities with a price of
less than $5.00 (other than securities registered on certain national securities
exchanges or quoted on the NASDAQ system, provided that current price and volume
information with respect to transactions in that security is provided by the
exchange or system). The penny stock rules require a broker/ dealer, prior to a
11
transaction in a penny stock not otherwise exempt from the rules, to deliver a
standardized risk disclosure document prepared by the Commission that provides
information about penny stocks and the nature and level of risks in the penny
stock market. The broker/dealer also must provide the customer with current bid
and offer quotations for the penny stock, the compensation of the broker/dealer
and its salesperson in the transaction, and monthly account statements showing
the market value of each penny stock held in the customer's account. The bid and
offer quotations, and the broker/dealer and salesperson compensation
information, must be given to the customer orally or in writing prior to
effecting the transaction and must be given to the customer in writing before or
with the customer's confirmation.
Future sales, or the potential sale, of a substantial number of shares of
ActiVein's common stock could cause the trading price of ActiVein's common stock
to decline, should a public market for ActiVein's common stock ever develop, and
could impair ActiVein's ability to raise capital through subsequent equity
offerings. As of the date of this prospectus, ActiVein had 13,908,257
outstanding shares of common stock. A total of 275,000 of these shares may be
sold by means of this prospectus by three officers of ActiVein and Eftan
Investment Consulting Ltd,, a company affiliated with a former director of
ActiVein. Any other shares owned by ActiVein's officers and directors, Eftan
Investment Consulting or Xenia Venture Capital Ltd. may be sold beginning 90
days after the date of this prospectus pursuant to Rule 144 of the Securities
and Exchange Commission. All other outstanding shares of ActiVein may be sold
without restriction at any time.
Sales of a substantial number of shares of ActiVein's common stock in the
public markets, or the perception that these sales may occur, could cause the
market price of ActiVein's securities to decline and could materially impair
ActiVein's ability to raise capital through the sale of additional equity
securities.
Since ActiVein is located in Israel, and all of ActiVein's officers and
directors are residents of Israel, in the event a shareholder obtains a judgment
against ActiVein, or ActiVein's officers or directors, the ability to enforce
the judgment in Israel may be difficult or, from a practical standpoint,
impossible.
ActiVein's operations are subject to risks related to doing business in
Israel. All of ActiVein's operations are conducted in Israel. Doing business in
Israel subjects ActiVein to various risks, including changing economic and
political conditions, exchange controls, currency fluctuations, armed conflicts
and unexpected changes in U.S. and foreign laws relating to tariffs, trade
restrictions, transportation regulations, foreign investments and taxation.
ActiVein does not have any control over these risks and may be unable to adjust
to changes in economic and political conditions.
The provisions in ActiVein's Articles of Incorporation relating to the
issuance of preferred stock allow ActiVein's directors to issue preferred stock
with multiple votes per share and dividend rights which would have priority over
any dividends paid with respect to the holders of ActiVein's common stock.
ActiVein's Articles of Incorporation authorize its Board of Directors to issue
up to 10,000,000 shares of preferred stock. The issuance of preferred stock with
these rights may make the removal of management difficult even if the removal
would be considered beneficial to shareholders generally, and will have the
effect of limiting shareholder participation in certain transactions such as
mergers or tender offers if these transactions are not favored by ActiVein's
management.
12
Until ActiVein's common stock is listed on the OTC Bulletin Board, four of
ActiVein's current directors may be removed and replaced without the vote of
ActiVein's shareholders. Removal and replacement of these directors may alter
ActiVein's business plan or significantly change the manner in which ActiVein is
managed.
DILUTION AND COMPARATIVE SHARE DATA
As of November 30, 2010 ActiVein had 13,908,257 outstanding shares of
common stock, which had a negative book value as of that date of approximately
$(0.01) per share. If all shares offered by ActiVein are sold (of which there
can be no assurance), investors will own 5,000,000 shares or approximately 28%
of ActiVein's common stock, for which they will have paid $1,000,000 and
ActiVein's present shareholders will own approximately 72% of its common stock.
If less than all shares offered are sold, the percentage ownership by the
purchasers of the shares offered by ActiVein will be less and the dilution to
these investors will be greater than if all shares offered by ActiVein were
sold.
The following tables illustrates per share dilution and the comparative
stock ownership of ActiVein's stockholders as compared to the investors in this
offering, depending upon the number of shares sold in this offering.
Shares outstanding as of
November 30, 2010 13,908,257 13,908,257 13,908,257 13,908,257
Shares to be sold by ActiVein
in this offering 5,000,000 3,750,000 2,500,000 1,250,000
Offering proceeds $ 1,000,000 $ 750,000 $ 500,000 $ 50,000
Offering expenses $ 40,000 $ 40,000 $ 40,000 $ 40,000
Shares to be outstanding
after offering 18,908,257 17,658,257 16,408,257 15,158,257
Negative net tangible book
value per share as of
November 30, 2010 $ (0.01) $ (0.01) $ (0.01) $ (0.01)
Offering price per share $ 0.20 $ 0.20 $ 0.20 $ 0.20
Net tangible book value per
share after offering $ 0.04 $ 0.03 $ 0.02 $ 0.00
13
Dilution to purchasers of
shares sold by ActiVein $ 0.16 $ 0.17 $ 0.18 $ 0.20
Gain to present shareholders
of ActiVein $ 0.05 $ 0.04 $ 0.03 $ 0.01
Shares to be sold by selling
shareholders (1) 275,000 275,000 275,000 275,000
Equity ownership of
purchasers of shares
in this offering 28% 23% 17% 10%
Equity ownership of
ActiVein's existing
shareholders after offering 72% 77% 83% 90%
(1)Three of these shareholders are officers of ActiVein. The fourth
shareholder is controlled by a former director of ActiVein.
The following tables illustrates per share dilution and the comparative
stock ownership of ActiVein's stockholders as compared to the investors in this
offering, depending upon the number of shares sold in this offering and assuming
all Series A preferred shares referred to in Note A below are converted, the
warrant referred to in Note B below is exercised, and the Series A preferred
shares issuable upon the exercise of the warrant are converted into shares of
ActiVein's common stock.
Shares outstanding as of
November 30, 2010 13,908,257 13,908,257 13,908,257 13,908,257
Shares to be sold by Activein
in this offering 5,000,000 3,750,000 2,500,000 1,250,000
Offering proceeds $ 1,000,000 $ 750,000 $ 500,000 $ 250,000
Offering expenses $ 40,000 $ 40,000 $ 40,000 $ 40,000
Shares issuable upon
conversion of Series A
preferred shares and
exercise of warrant 4,199,703 4,199,703 4,199,703 4,199,703
Share to be outstanding
after offering 23,107,960 21,857,960 20,607,960 19,357,960
14
Negative net tangible book
value per share as of
November 30, 2010 $ (0.01) $ (0.01) $ (0.01)$ (0.01)
Offering price per share $ 0.20 $ 0.20 $ 0.20 $ 0.20
Net tangible book value per
share after offering $ 0.03 $ 0.02 $ 0.01 $ 0.00
Dilution to purchasers of
shares sold by ActiVein $ 0.17 $ 0.18 $ 0.19 $ 0.20
Gain to present shareholders
of ActiVein $ 0.04 $ 0.03 $ 0.02 $ 0.01
Shares to be sold by
selling shareholders (1) 275,000 275,000 275,000 275,000
Equity ownership of
purchasers of shares
in this offering 41% 38% 34% 30%
Equity ownership of
ActiVein's existing
shareholders after offering 59% 62% 66% 70%
(1) Three of these shareholders are officers of ActiVein. The fourth shareholder
is controlled by a former director of ActiVein.
Investors which purchase shares from any selling shareholder at a price of
$0.20 per share will suffer the same dilution as investors which purchase shares
from ActiVein. After ActiVein's offering terminates, the dilution which may be
suffered by any investor which purchases shares from any selling shareholder at
a price other that $0.20 per share will depend upon the price paid for the
shares.
See the section of the prospectus captioned "Management - Transactions with
Related Parties and Recent Sales of Unregistered Securities" for information
concerning the amount paid by the present shareholders of ActiVein for their
shares of ActiVein's common stock:
Others Shares Which May Be Issued
The number of ActiVein's outstanding shares excludes the following:
Number Note
of Shares Reference
--------- ---------
Shares issuable upon conversion of Series A
Preferred shares 3,770,935 A
15
Shares issuable upon exercise of warrant
allowing for
the purchase of additional Series A preferred
shares 428,768 B
A. In connection with the acquisition of ActiVein Ltd., 3,770,935 Series A
Preferred shares were issued to Xenia Venture Capital Ltd. in exchange for
the preferred shares held by Xenia in ActiVein Ltd. Each Series A preferred
share is convertible, at the option of the holder, into one share of
ActiVein's common stock.
B. In exchange for a warrant to purchase additional preferred shares of
ActiVein Ltd., a warrant to purchase 428,768 Series A shares of ActiVein was
issued to Xenia Venture Capital. The warrant entitles Xenia Venture Capital
to purchase 428,768 shares of ActiVein's Series A preferred stock for
$0.0001 per share. Each Series A Preferred share is convertible, at the
option of the holder, into one share of ActiVein's common stock.
USE OF PROCEEDS
The following table shows the intended use of the proceeds of this
offering, depending upon the number of shares sold:
Gross Offering Proceeds
-----------------------------------------------
$250,000 $500,000 $750,000 $1,000,000
-------- -------- -------- ----------
Research and development 160,000 340,000 530,000 645,000
Investor Relations 125,000
General and administrative
expenses, other than officers'
salaries 25,000 60,000 90,000 100,000
Officers' salaries 25,000 60,000 90,000 90,000
Offering expenses 40,000 40,000 40,000 40,000
See the "Business" section of this prospectus for a description of
ActiVein's plan of operation.
ActiVein's research and development expenditures may increase or decrease
depending on the results of its preclinical studies and clinical trials.
If less than $250,000 is raised in this offering the offering proceeds will
be used primarily for pre-clinical trial preparation and final product
improvements.
The projected expenditures shown above are only estimates or approximations
and do not represent a firm commitment by ActiVein.
To the extent that the proposed expenditures are insufficient for the
purposes indicated, supplemental amounts required may be drawn from other
categories of estimated expenditures, if available. Conversely, any amounts not
expended as proposed will be used for general working capital.
There is no commitment by any person to purchase any of the shares of
common stock which ActiVein is offering and there can be no assurance that any
shares will be sold.
16
Even if all shares ActiVein is offering are sold, Activein will need
additional capital to bring its catheter to market and to fund its general and
administrative expenses. In addition, ActiVein's future operations will be
dependent upon its ability to obtain additional capital until, if ever, it can
become profitable. As of the date of this prospectus ActiVein did not have any
commitments from any person to provide it with any additional capital and there
can be no assurance that additional funds may be obtained in the future.
MARKET FOR ACTIVEIN'S COMMON STOCK.
ActiVein's common stock is not quoted on any exchange and there is no
public trading market for ActiVein's common stock.
As of December 31, 2010, ActiVein had 13,908,257 outstanding shares of
common stock and 64 shareholders. See "Dilution and Comparative Share Data" for
information concerning shares that maybe issued as the result of the conversion
of preferred shares or the exercise of warrants.
All of the outstanding shares of ActiVein are restricted securities and may
be sold in accordance with Rule 144 of the Securities and Exchange Commission
beginning 90 days after the date of this prospectus.
Holders of common stock are entitled to receive dividends as may be
declared by the Board of Directors. ActiVein's Board of Directors is not
restricted from paying any dividends but is not obligated to declare a dividend.
No dividends have ever been declared and it is not anticipated that dividends
will ever be paid.
ActiVein's Articles of Incorporation authorize its Board of Directors to
issue up to 10,000,000 shares of preferred stock. The provisions in the Articles
of Incorporation relating to the preferred stock allow ActiVein's directors to
issue preferred stock with multiple votes per share and dividend rights which
would have priority over any dividends paid with respect to the holders of
ActiVein's common stock. The issuance of preferred stock with these rights may
make the removal of management difficult even if the removal would be considered
beneficial to shareholders generally, and will have the effect of limiting
shareholder participation in certain transactions such as mergers or tender
offers if these transactions are not favored by ActiVein's management.
MANAGEMENT'S DISCUSSION AND ANALYSIS
AND PLAN OF OPERATION
The following discussion of financial condition and results of operations
should be read in conjunction with the consolidated financial statements and the
notes to the consolidated financial statements, which are included elsewhere in
this prospectus.
ActiVein was incorporated in Delaware in January 2007. Between January 2007
and March 2009 ActiVein did not conduct any business.
17
In November 2007 ActiVein sold 2,858,067 shares of its common stock at a
price of $0.15 per share to a group of private investors.
In March 2009 ActiVein acquired ActiVein Ltd., an Israeli corporation, for
4,800,190 shares of its common stock, 3,770,935 shares of its Series A Preferred
stock, and a warrant which allows the holder to purchase an additional 428,768
Series A preferred shares.
Although from a legal standpoint, ActiVein acquired ActiVein, Ltd., for
financial reporting purposes the acquisition of ActiVein, Ltd. constituted a
recapitalization and the acquisition was accounted for similar to a reverse
merger, with the result that ActiVein Ltd. was deemed to have acquired ActiVein.
As a result, the financial statements for the periods prior to March 2009
reflect only the historical operations of ActiVein, Ltd. The financial
statements after March 2009, following the acquisition of ActiVein, Ltd.,
reflect the operations of both ActiVein and ActiVein, Ltd.
Unless otherwise indicated, all references to ActiVein's business and
operations include the business and operations of ActiVein Ltd.
ActiVein is developing a novel intravenous catheter which will reduce the
number of times a hospital patient is stuck with a needle to withdraw blood
samples. ActiVein's dual-action catheter is designed to replace the conventional
peripheral IV Catheter by enabling both fluid infusion and blood withdrawal
using a single vein over an entire hospitalization period.
Results of Operations
Material changes to items in ActiVein's Statement of Operations for the
year ended February 28, 2010, as compared to the same period in the prior year,
are discussed below.\
Increase (I) or
Item Decrease (D) Reason
---- --------------- ------
Research and Development D Lack of funds
General and Administrative I Increased efforts to raise capital
Expenses
Government Grant I One-time research grant from
Israeli government
Material changes to items in ActiVein's Statement of Operations for the
three months ended November 30, 2010, as compared to the same period in the
prior year, are discussed below.
Increase (I) or
Item Decrease (D) Reason
---- --------------- ------
General and Administrative
Expenses D Overall reduction in expenses to
conserve cash
18
Research and Development I Shortage of cash during the
comparable period in 2009 forced a
curtailment in research and
development during 2009.
Material changes to items in ActiVein's Statement of Operations for the
nine months ended November 30, 2010, as compared to the same period in the prior
year, are discussed below.
Increase (I) or
Item Decrease (D) Reason
---- --------------- ------
General and Administrative
Expenses D Overall reduction in expenses to
conserve cash
Research and Development D Lack of funding
As of March 15, 2011, ActiVein had not commenced sales and had not
generated any revenue.
The significant components of General and Administrative Expenses and
Research and Development Expenses for the periods disclosed above are shown
below:
Three
Year ended Months ended Nine Months ended
General and February 28, November 30, November 30,
Administrative ------------------ ------------------- ------------------
Expenses 2010 2009 2010 2009 2010 2009
---------------- ---- ---- ---- ---- ---- ----
Salary Adi-Plaschkes $24,962 $27,058 $ 2,638 $3,990 $ 5,701 $24,671
Accounting and Auditing 70,176 2,405 15,946 7,305 11,450 42,459
Consulting Fees -
S. Kales/B. Dor 82,800 18,754 -- 24,000 6,500 64,00
Research and Development
Salaries 115,221 142,591 32,041 22,189 96,698 112,302
Materials 31,507 43,662 7,004 3,201 17,361 28,803
Liquidity and Capital Resources
ActiVein's material sources and (uses) of cash during the period from its
inception (November 2005) through November 30, 2010 were:
19
Cash used by operating activities $(954,255)
Purchase of equipment (9,971)
Sale of common stock 446,850
Sale of preferred stock 503,031
Change in foreign currency exchange rates 29,513
ActiVein anticipates that its capital requirements for the twelve months
following the -receiving of the funds will be approximately $1,700,000. See
"Business - Plan of Operation" for more information concerning ActiVein's
anticipated capital requirements. ActiVein will need approximately $200,000
during the twelve months following the date of this prospectus to fund its
general and administrative expenses. Absent this funding ActiVein may need to
cease operations.
In March of 2010 ActiVein thought that, with sufficient funding, by March
2011 its clinical trials would be complete, approvals would have been obtained
from the FDA and foreign regulatory agencies, and ActiVein would have started
commercial sales of its catheter. Due to lack of funding, ActiVein was not able
to accomplish these objectives. As explained in the "Business" section of this
prospectus, and contingent upon the receipt of sufficient capital, ActiVein
plans on beginning its preclinical trials in June 2011.
Other than the matters discussed in the "Risk Factors" section of this
prospectus, ActiVein does not know of any trends, events or uncertainties that
have had or are reasonably expected to have a material impact on ActiVein's
operations.
ActiVein's future plans will be dependent upon the amount of capital
ActiVein is able to raise. ActiVein may attempt to raise additional capital
through the private sale of its equity securities or borrowings from third party
lenders. Although, ActiVein does not have any commitments or arrangements from
any person to provide ActiVein with any additional capital, ActiVein has been
successful in raising capital in the past and believes that it will be able to
raise the capital it will require to continue in business.
BUSINESS
ActiVein is developing a dual-action peripheral intravenous, or "IV",
catheter that enables both fluid infusion and blood withdrawal from the same
vein.
IV therapy is the mainstay of modern medicine since certain treatments
require medications or fluids to be given through a vein. To administer these
treatments, a small plastic tube called an IV catheter is inserted into a vein.
In the United States more than 25 million patients per year require IV
catheters, and more than 330 million IV catheters are sold.
Furthermore, patients that require IV therapy usually require blood
sampling for laboratory analysis. As a result, blood samples are obtained by
venipuncture - the medical term for sticking a needle in a vein.
For most patients, venipuncture is a painful and traumatic experience. For
healthcare workers it is a difficult and time consuming task. Veins are often
difficult to locate and each venipuncture requires between 2 and 5 minutes.
20
Venipuncture is also hazardous, as it places workers at risk for accidental
needlestick injury. Approximately six billion needles are used in the U.S.
healthcare industry each year and, as a result, health care workers suffer an
estimated 800,000 needlestick injuries annually.
Each year 1,000 U.S. healthcare workers contract serious, potentially
life-threatening, infections from accidental needlestick injuries. The
blood-borne diseases that may be transmitted from an accidental needlestick
include HIV/AIDS, hepatitis B virus, hepatitis C virus, and other diseases. It
is estimated that the testing and treatment of needlestick injuries costs the
U.S. healthcare system between $750 million and $1 billion per year.
In response to accidental needlestick injuries, national safety regulations
have enhanced the demand for increased safety for the design and manufacture of
medical products. The U.S. Needlestick Safety and Prevention Act became
effective in 2001 and requires healthcare employers to review new
safety-enhanced products and mandates their use.
ActiVein's catheters, referred to as ActIV and ActIV Jr. (a smaller
catheter), improve patient comfort, healthcare efficiency and healthcare safety
by eliminating the need for venipunctures after IV catheter insertion.
ActiVein's scientists believe that there are two phenomena that prevent
blood withdrawal from a conventional IV catheter:
o Mechnical: Blood withdrawal creates a vacuum, which causes the vein to
collapse at the IV catheter's tube entrance. The collapsed vein
prevents blood flow and inhibits an IV catheter's ability to withdraw
blood.
o Biological: The catheter is a foreign body in the vein. The body
reacts to the foreign body by covering the end of the IV catheter tube
with fibrin sheets. The fibrin sheets obstruct the catheter opening
and prevent the catheter's ability to withdraw blood.
The ActIV overcomes both the mechanical and biological phenomena that
prevent blood withdrawal from an IV catheter.
The ActIV has an inflating balloon at the distal tip of the catheter. The
distal balloon has a dual function, it holds the vein open, which prevents the
vein from collapsing, and it breaks the fibrin sheets to allow a patent opening
for blood flow.
With ActIV, healthcare workers can withdraw blood from the catheter -
without using additional needles.
ActiVein's dual function IV catheter can potentially reduce the number of
venipunctures per hospitalization period to one.
ActiVein has developed a model that replicates the human peripheral venous
system in terms of vessel thickness, diameter, internal valves and pressure. The
fluid in this model mimics human blood in terms of viscosity. ActiVein's
catheter has been tested in the model to analyze vessel penetration, catheter
strength and the capability of the catheter to deliver and draw fluids. The
21
tests have shown that ActiVein's catheter can provide its intended dual
functionality of fluid or medication delivery as well as blood withdrawal.
ActiVein has conducted animal tests in sheep in order to validate the
functionality of its catheter in a live model. Preliminary results indicate that
ActiVein's catheter can provide the same dual functions of fluid/medication
delivery and blood withdrawal. Further tests are planned in animals to validate
the ease of insertion and long term safety of ActiVein's catheter.
ActiVein believes its products can be produced at a cost-competitive
price. ActiVein plans to conduct a longer pre-clinical test (up to 3 days) with
its final prototype during the pre-clinical stage. As of the date of this
prospectus, ActiVein had not determined whether it will manufacture its products
itself or outsource production. It is not anticipated that obtaining the raw
materials required to manufacture ActiVein's catheters will pose a problem since
the metals and plastics that ActiVein will require are regularly used to
manufacture a variety of products around the world.
Competition
The traditional peripheral IV catheter segment is approaching saturation
and most regions have a high concentration of IV manufacturers.
Becton Dickinson is the market leader with a 22% share of total revenues,
and is closely followed by B Braun with an 18% market share. B Braun is the
leader in Europe and has a high stake in the Asian region. Teleflex (Arrow
International) and CR Bard follow with 13% and 11% market shares respectively.
Local and smaller companies generate approximately 36% of total sales. Some
of these companies lead in their respective regions but have relatively small
shares in the global market (e.g. U.K.-based Smiths Medical, Fresenius, Baxter
Healthcare, Cardinal Health, and Terumo).
Numerous companies sell safety needles and syringes, as well as catheter
devices, with features that prevent inadvertent needle injuries. However
ActiVein is not aware of any competing product which permits both
fluid/medication delivery and blood withdrawal. ActiVein believes its ActIV will
be superior to present day catheters and safety needles and syringes since the
ActIV eliminates the need for venipunctures after IV catheter insertion thereby
improving patient comfort, healthcare, efficiency and healthcare safety.
ActiVein plans to market its ActIV catheter at a price comparable to
existing catheters (i.e. $1.3 per device).
Government Regulation
Drugs, pharmaceutical products, medical devices and other related products
are regulated in the United States under the Federal Food, Drug and Cosmetic
Act, the Public Health Service Act, and the laws of certain states. The FDA
exercises significant regulatory control over the clinical investigation,
manufacture and marketing of pharmaceutical, biological products and medical
devices. If ActiVein does not comply with applicable regulatory requirements, it
may be subject to injunction and fines, or be forced to remove its catheter from
the market.
22
Prior to the time a medical device can be marketed in the United States,
approval of the FDA must normally be obtained.
The process regulatory approval process may require substantial resources
and considerable time. Approval of medical devices by regulatory authorities of
most foreign countries must also be obtained prior to marketing in those
countries. The approval process varies from country to country and the time
period required in each foreign country to obtain approval may be longer or
shorter than that required for regulatory approval in the United States.
Approvals from foreign countries may not be accepted by the FDA and product
licensure in a foreign country does not mean that a product will be licensed by
the FDA or any other government entity for manufacturing and/or marketing.
Medical device regulation in the U.S. is based on classification of the
device into three classes, I, II, or III. Class III medical devices are
regulated much like drugs, whereas Class I and II devices have less stringent
data requirements than drugs and do not require clinical trials for FDA
clearance. Products submitted to the FDA for clearance as medical devices can
refer to the safety and effectiveness of medical devices which perform similar
functions to products which the FDA has already cleared. As long as a medical
device submitted to the FDA has the same clinical use as a medical device
previously cleared by the FDA, such medical device will normally receive FDA
clearance upon a showing that the device is substantially equivalent to the
other approved medical devices.
Prior to the time a medical device can be marketed in Europe, the device
must be granted a CE Marking that is achieved by obtaining approval of the
device from various European regulatory agencies.
Medical device regulation in Europe is based on a classification of the
device into four classes, I, IIa, IIb, and III. Class IIb and III devices
usually require clinical studies to prove the device's safety and efficacy.
Class IIa devices may require clinical studies if the device is inserted into
the body for a certain period of time. Medical devices in Europe cannot be
compared to one another for the purpose of obtaining CE marking thus the process
is more stringent than in the U.S.
If ActiVein decides to conduct sales in Israel, its products and
manufacturing processes are subject to regulation under the Israeli Ministry of
Health (the "MOH") and the Israeli Standards Institute (the "ISI"). The MOH
commonly clears medical devices for sale in Israel if the FDA and ISI clear the
device for production and sales.
Based upon ActiVein's review of the FDA's prior classifications of single
function catheters, ActiVein believes that its catheter will be classified as a
Class II medical device in the U.S. and will not require clinical studies for
approval. In Europe, ActiVein expects that its ActIV will be classified as a
Class IIb medical device and will require clinical studies for approval.
Manufacturers of medical devices in the U.S. are required to develop a
process for manufacturing the product in accordance with current good
manufacturing practice requirements (cGMPs). The manufacturing process must be
capable of consistently producing quality batches of the product and the
23
manufacturer must develop methods for testing the quality of the product.
Additionally, appropriate packaging must be selected. Regulations pertaining to
the manufacturer of medical devices in Israel are similar to those in the U.S.
Manufacturing establishments are subject to periodic inspections by the FDA and
by comparable foreign agencies.
However, if the FDA classifies ActiVein's catheter as a Class III medical
device, then a pre market approval, or PMA would be required which typically
requires more extensive clinical data and a longer regulatory process
(approximately one year or longer if additional data and review are required).
Class III devices are those for which insufficient information exists to
assure safety and effectiveness solely through general or special controls, and
include life-sustaining, life-supporting, or implantable devices, and devices
not "substantially equivalent" to a device that is already legally marked.
PMA is the FDA process of scientific and regulatory review to evaluate the
safety and effectiveness of Class III medical devices. Due to the level of risk
associated with Class III devices, the FDA has determined that general and
special controls alone are insufficient to assure the safety and effectiveness
of Class III devices. Therefore, these devices require a PMA application in
order to obtain marketing clearance.
PMA is the most stringent type of device marketing application required by
FDA. The applicant must receive FDA approval of its PMA application prior to
marketing the device. PMA approval is based on an in-depth review of scientific
and clinical data and a determination by FDA that the PMA contains sufficient
valid scientific evidence to assure that the device is safe and effective for
its intended use.
An investigational device exemption (IDE) allows the investigational device
to be used in a clinical study in order to collect safety and effectiveness data
required to support a PMA application. Clinical studies with devices of
significant risk must be approved by the FDA and by an Institutional Review
Board before the study can begin. In addition, and before approving or denying a
PMA, the appropriate FDA advisory committee may review the PMA at a public
meeting and provide the FDA with the committee's recommendation on whether the
FDA should approve the submission.
The FDA's quality system regulations include requirements related to the
methods used in and the facilities and controls used for designing, purchasing,
manufacturing, packaging, labeling, storing, installing and servicing of medical
devices. Labeling includes labels on the device as well as descriptive
informational literature that accompanies the device. Manufacturing facilities
undergo FDA inspections to assure compliance with the quality system
requirements.
Any modification that could significantly affect its safety or
effectiveness, such as a significant change in the design, materials, method of
manufacture, intended use, or labeling requires new PMA approval.
Incidents in which a device may have caused or contributed to a death or
serious injury must to be reported to the FDA under the Medical Device Reporting
Program. In addition, certain malfunctions must also be reported.
24
Patents
ActiVein's catheter has received patent approval from the European patent
office (No. EP 1,490,137) and, as a result, this patent is registered in a
majority of countries in Europe. This patent expires on March 25, 2023.
ActiVein has also received a U.S. patent (No. 7,749,193) for its catheter.
This patent expires on March 25, 2023.
Plan of Operation
ActiVein's plan of operation follows:
Projected Estimated
Completion Date Cost
--------------- ---------
Preclinical Trials June 30, 2011 $270,000
Laboratory and animal studies will be conducted
to determine the safety and efficacy of the ActIV.
Preclinical tests must be conducted in compliance
with good laboratory practice regulations.
Initial Human Trials August 31, 2011 220,000
The ActIV will be tested for three days in two
patients at a hospital in Israel. This first
clinical study will assess the ability of the
ActIV to both infuse fluids and withdraw blood
from a patient.
Phase I Clinical Trials October 31, 2011 130,000
An eleven patient study will be conducted at a
medical center in Israel. This trial will be
designed according to FDA and CE regulations.
The goal of the trial will be to prove the
safety and efficacy of the ActIV.
Regulatory Approval January 31, 2012 130,000
Apply for FDA and CE approval.
Production and Product Launch March 31, 2012 250,000
Complete patent applications. File new patent
Applications as necessary. Manufacture
ActIVcatheters and begin sales to medical
providers.
25
Post Marketing Trials May 31, 2012 500,000
Conduct post marketing trials in two or three
medical centers in the U.S. and Europe. The
purpose of the post-marketing trials will be to
test the ActIV in a larger market.
----------
$1,500,000
==========
The requirements governing the conduct of clinical trials and manufacturing
of ActiVein's catheter outside the United States can vary from country to
country. Foreign approvals may take longer to obtain than FDA approvals and can
require, among other things, additional testing and different trial designs.
Foreign regulatory approval processes include all of the risks associated with
the FDA approval processes. Some of those agencies also must approve prices for
products approved for marketing. Approval of a product by the FDA does not
ensure approval of the same product by the health authorities of other
countries. In addition, changes in regulatory policy in the U.S. or in foreign
countries for product approval during the period of product development and
regulatory review may cause delays or rejections.
Any failure to obtain, or any delay in obtaining, required regulatory
approvals will adversely affect the ability of ActiVein to market its catheter.
Delays will also be encountered if the FDA classifies ActiVein's catheter as a
Class III medical device as opposed to a Class I medical device.
ActiVein anticipates that its capital requirements for the twelve-month
period ending after the date of this prospectus will be:
Research and development/patent filings $1,500,000
General and administrative expenses 200,000
------------
Total $1,700,000
==========
General
ActiVein's offices are located at 1 Leshem Street, Kiryat Gat, 82000,
Israel. The 500 square feet of office space is occupied under a lease requiring
rental payments of $550 per month until December 2011.
As of December 31, 2010 ActiVein did not have any full time employees.
ActiVein anticipates that it will need to hire six employees once it begins
preclinical trials.
MANAGEMENT
ActiVein's officers and directors are listed below. ActiVein's directors
will generally be elected at the annual shareholders' meeting and hold office
until the next annual shareholders' meeting or until their successors are
elected and qualified. ActiVein's executive officers are elected by its board of
directors and serve at its discretion.
26
Name Age Position
---- --- --------
Adi Plaschkes 54 Chief Executive,Financial and Accounting Officer
Dr. Yoav Paz 53 Chief Medical Officer
Ilan Shalev (1) 60 Chief Technical Officer and a Director
Anat Segal (2) 45 Director
Ronen Finegold (1) 41 Director
Boaz Dor (3) 57 Director
(1) Until ActiVein's common stock is quoted on the OTC Bulletin Board, Adi
Plaschkes, Ilan Shalev and Yoav Paz have the right to remove this director
and to designate his replacement.
(2) Until ActiVein's common stock is quoted on the OTC Bulletin Board, Xenia
Venture Capital has the right to remove this director and to designate her
replacement.
(3) Until ActiVein's common stock is quoted on the OTC Bulletin Board, Mr. Dor
can designate his replacement on the Board of Directors in the event of his
resignation.
Following is a brief description of the business backgrounds of ActiVein's
executive officers and directors.
Adi Plaschkes has been the Chief Executive, Financial and Accounting
Officer of ActiVein since March 2009. Since Nov 2006 Mr. Plaschkes has been the
Chief Executive and Financial Officer of ActiVein Ltd. Mr. Plaschkes founded
ActiVein Ltd. in 2006 and since that time has been ActiVein Ltd.'s Chief
Executive Officer. In 2002 Mr. Plaschkes founded, and until 2006 was the
technical manager for Life Support Ltd., a company involved with the design and
management of projects involving medical products and chemical and biological
warfare protection equipment. Between 1996 and 2002 Mr. Plaschkes was the
technical manager of Elad Engineering Ltd., an Israeli company involved with a
variety of research and development projects.
Dr. Yoav Paz has been the Chief Medical Officer of ActiVein since March
2009. Since Nov. 2006 Dr. Paz has been the Chief Medical Officer of ActiVein
Ltd. Since 2008 Dr. Paz has also been cardio thoracic surgeon in the Department
of Cardiac Surgery at Sheba Medical Center, Ramat Gan, Israel. Between 2006 and
2008 Dr. Paz was a cardio thoracic surgeon in the Department of Cardiac Surgery
at Hadassah-Hebrew University Medical Center Hadassah, Jerusalem, Israel.
Between 1996 and 2005 Dr. Paz was a cardio thoracic surgeon in the Department of
Cardiac Surgery at Sheba Medical Center, Ramat Gan, Israel. Between 1996 and
2005, and since 2008, Dr. Paz has also been a member of the Sackler Faculty of
Medicine, Tel-Aviv University, Israel.
Anat Segal has been a director of ActiVein since March 2009. Ms. Segal is
the Chief Executive Officer and one of the founding partners of Xenia Venture
Capital, an investment firm operating a technological incubator which invests in
companies developing information/ communication/internet technologies and
medical devices. Since 2000 Ms. Segal has managed her independent advisory
practice providing strategic counseling and investment banking services to
high-tech companies. From 1998 to early 2000, she served as the Managing
27
Director and Head of Corporate Finance of Tamir Fishman & Co., the then Israeli
affiliate of Hambrecht and Quist. From 1996 to 1998, she served as a Vice
President of Investment Banking, Robertson Stephens & Co/Evergreen. From 1990 to
1996, Ms. Segal held senior positions with Bank Hapoalim Group and Poalim
Capital Markets.
Ilan Shalev has been the Chief Technical Officer and a director of ActiVein
since March 2009. Mr. Shalev has more than 20 years of experience in the
development, production and management of multi-disciplinary systems. Currently
head of development of Elad Engineering Ltd., the company responsible for the
development of the Lektrox family of non-lethal electric ammunition. Mr. Shalev
was formerly General Manager and Head of Small Arms Development for Israel
Military Industries. Among his many achievements, Mr. Shalev is credited for his
work on the Negev machine gun in use by Israel Defence Forces as a service
machinegun, the Desert Eagle pistol for police and civilian markets, the
Crossfire and Timber Wolf rifles, and weapons stations for various calibre
machine guns.
Ronen Finegold has been a director of ActiVein since March, 2011. Since
2000 Mr. Finegold has been the managing member of Katzav Finegold & Co., a
public accounting firm based in Tel Aviv, Israel.
Boaz Dor has been a director of ActiVein since March 2009 After serving in
the Israeli Defence Force, Mr. Dor joined the Israeli Security Services (Shabak)
as an intelligence officer. Working world wide in the International Aviation
Security Division, Mr. Dor served as Head of Security for the Israel Embassy and
El Al Israel Airlines in Cairo, Egypt, and later as Vice-Counsel and Head of
Security for the Israeli Consulate and El Al Israel Airlines in Toronto and
Western Canada. In 1989, Mr. Dor resigned from the public sector and opened a
security consulting firm. In 1991 he was appointed Executive Director Security
for the Seabeco Group of Companies where he oversaw international operations in
Switzerland, Belgium, Russia, New York and Toronto. Mr. Dor has been a director
of Security Devices International Inc., a company traded on the OTC Bulletin
Board, since April 2005. Since 2000 Mr. Dor has owned and operated Ozone Water
Systems Inc., a water purification company.
ActiVein believes that Ms. Segal is qualified to be a director because of
her professional experience in capital markets and investments.
ActiVein believes that Mr. Shalev is qualified to be a director because of
his professional experience with technology companies.
ActiVein believes that Mr. Finegold is qualified to be a director because
of his accounting experience.
ActiVein believes that Mr. Dor is qualified to be a director because of his
experience with the Israeli government and other small international public
companies.
ActiVein does not have a compensation committee. ActiVein's Directors serve
as its Audit Committee. Mr. Finegold serves as ActiVein's financial expert. Mr.
Finegold is independent as that term is defined Section 803 of the listing
standards of the NYSE AMEX.
28
Executive Compensation.
The following table shows the compensation paid or accrued to ActiVein's
officers during the two year period ended February 28, 2010.
All Other
Annual
Stock Option Compen-
Name and Fiscal Salary Bonus Awards Awards sation
Principal Position Year (1) (2) (3) (4) (5) Total
------------------ ----- ------- ----- ------- ------ --------- -----
Adi Plaschkes 2010 $49,345 -- -- -- -- $49,345
Chief Executive 2009 $54,116 -- -- -- -- $54,116
Officer
Dr. Yoav Paz, Chief 2010 -- -- -- -- -- --
Medical Officer 2009 -- -- -- -- -- --
(1) The dollar value of base salary (cash and non-cash) earned.
(2) The dollar value of bonus (cash and non-cash) earned.
(3) During the periods covered by the table, the value of shares issued as
compensation for services to the persons listed in the table.
(4) The value of all stock options granted during the periods covered by the
table.
(5) All other compensation received that could not properly report in any other
column of the table.
Stock Option Plan
ActiVein has a Non-Qualified Stock Option Plan which authorizes the
issuance of 2,000,000 shares of ActiVein's common stock to persons that exercise
options granted pursuant to the Plan. ActiVein's employees, directors, officers,
consultants and advisors are eligible to be granted options pursuant to the
Plan, provided however that bona fide services must be rendered by any
consultants or advisors and the services must not be in connection with a
capital-raising transaction.
The Plan is administered by ActiVein's Board of Directors. The Board of
Directors is vested with the authority to establish the exercise price of any
option, interpret the provisions of the Plan and supervise the Plan's
administration. In addition, the Board of Directors is empowered to select those
persons to whom options are to be granted, to determine the number of shares
subject to each grant of an option and to determine when, and upon what
conditions, options granted under the Plan will vest or otherwise be subject to
forfeiture and cancellation.
In the discretion of the Board of Directors, any option granted pursuant to
the Plan may include installment exercise terms such that the option becomes
fully exercisable in a series of cumulating portions. The Board of Directors may
also accelerate the date upon which any option (or any part of any options) is
29
first exercisable. Any options granted pursuant to the Plan will be forfeited if
any "vesting" schedule established by the Board of Directors at the time of the
grant is not met. For purposes of the Plan, vesting means the period during
which the employee must remain an employee of ActiVein or the period of time a
non-employee must provide services to ActiVein. At the time an employee ceases
working for ActiVein (or at the time a non-employee ceases to perform services
for ActiVein), any options not fully vested will be forfeited and cancelled. At
the discretion of the Board of Directors the exercise price of an option may be
paid through the delivery of shares of ActiVein's common stock having an
aggregate fair market value equal to the exercise price, provided such shares
have been owned by the option holder for at least one year prior to exercise. A
combination of cash and shares of common stock may also be permitted at the
discretion of the Board of Directors.
Options are generally non-transferable except upon death of the option
holder.
ActiVein's Board of Directors may at any time, and from time to time,
amend, terminate, or suspend the Plan in any manner it deems appropriate,
provided that any amendment, termination or suspension will not adversely affect
rights or obligations with respect to options previously granted. The Plan has
not been approved by ActiVein shareholders.
Long-Term Incentive Plans. ActiVein does not provide its officers or
employees with pension, stock appreciation rights, long-term incentive or other
plans, although ActiVein may adopt one or more of these plans in the future.
Employee Pension, Profit Sharing or other Retirement Plans. ActiVein does
not have a defined benefit, pension plan, profit sharing or other retirement
plan, although it may adopt one or more of such plans in the future.
Compensation of Directors. ActiVein's directors did notreceive any
compensation for their services as directors during the fiscal year ended
February 28, 2010.
Consulting Fees. During the twelve months ended March 24, 2010, ActiVein
paid Sheldon Kales and Boaz Dor $6,500 and $1,500 per month, respectively, for
investor relations and investment banking services.
Proposed Compensation. The following table shows the time ActiVein's
officers plan to devote to the business of ActiVein during the twelve month
period ending February 28, 2011 and the amount ActiVein expects to pay to these
officers during this period. Any compensation which may be paid to ActiVein's
officers is dependant upon the amount of capital available to ActiVein.
Time to
be devoted Proposed
Name to ActiVein Compensation
---- ----------- ------------
Adi Plaschkes 100% $98,400
Dr. Yoav Paz 20% $24,000
Ilan Shalev 100% $60,000
30
ActiVein has an employment agreement with Adi Plaschkes. Pursuant to the
agreement, Mr. Plaschkes is entitled to receive monthly compensation of
approximately $8,200, which amount will include approximately $1,500 to be paid
by ActiVein for severance pay,life and disability insurance for Mr. Plaschkes,
contributions for educational purposes and other employee benefits. The
employment agreement also provides that Mr. Plaschkes will be entitled to 15
paid vacation days for each twelve months of consecutive employment. The
employment agreement can be terminated by either ActiVein or Mr. Plaschkes upon
30 days notice. Upon termination of Mr. Plaschkes' employment, all rights
accrued under the life and disability insurance policy will be released to him
and Mr. Plaschkes will be paid for any unused vacation days, up to a maximum of
30 days.
Transactions with Related Parties and Recent Sales of Unregistered Securities
The following lists all shares of ActiVein's common stock issued since its
incorporation:
Date Shares Consideration
Shareholder of Sale Issued Paid for Shares
----------- ------- --------- ------------------
Former Officers and Directors (1) 2007 5,500,000 $0.0001 per share
Private Investors 2007 2,858,067 $0.15 per share
Boaz Dor (2) 3/09 750,000 Services rendered
Shareholders of ActiVein Ltd. (3) 3/09 4,800,190 Shares of ActiVein Ltd.
(1) ActiVein's former officers and directors, all of whom resigned following
the acquisition of ActiVein Ltd., were Sheldon Kales, who was issued 2.5
million shares on February 8, 2007, Dr. Tally Bodenstein, who was issued
2.5 million shares on February 8, 2007, and Rakesh Malhotra, who was issued
500,000 shares on May 10, 2007. The shares were sold to these persons at a
minimal price to compensate those persons for organizing ActiVein.
(2) Mr. Dor introduced ActiVein to ActiVein, Ltd. and assisted in negotiating
the terms of the acquisition of ActiVein, Ltd.. His services were valued at
$10,000.
(3) Adi Plaschkes received 445,193 of these shares, Yoav Paz received 944,985
of these shares, and Eftan Investment Consulting Ltd. received 377,888 of
these shares.
PRINCIPAL SHAREHOLDERS
The following table shows the ownership of ActiVein's common stock as of
the date of this prospectus by each shareholder known by ActiVein to be the
beneficial owner of more than 5% of ActiVein's outstanding shares, each director
and executive officer of ActiVein, and all directors and executive officers as a
group. Except as otherwise indicated, each shareholder has sole voting and
investment power with respect to the shares they beneficially own.
Name and Address Number of Shares Percent of Class
---------------- ---------------- ----------------
Adi Plaschkes 445,198 3.2%
36 Ben Gurion St.
Ramat-Hashron
47321, Israel
31
Name and Address Number of Shares Percent of Class
---------------- ---------------- ----------------
Dr. Yoav Paz 944,986 6.8%
51 Borhov St.
Givataim
53222, Israel
Anat Segal -- --
9 Moshe Kol
Tel Aviv
69626, Israel
Ronen Finegold 521,512 3.7%
7 Khilat Saloniki
Tel Aviv
69513, Israel
Illan Shalev 944,986 6.8%
3 Taiber St.
Givataim
53415, Israel
Boaz Dor 750,000 5.4%
2 Palmerston Drive
Thornhill, Ontario
Canada L4J 7V9
Xenia Venture Capital Ltd. 4,199,703 (1) 30.2%
P.O. Box 720
Kiryat Gat Israel, 82000
Sheldon Kales 2,500,000 18%
2171 Avenue Rd., Suite 103
Toronto, Ontario
Canada M5M 4B4
Dr. Tally Bodenstein 2,500,000 18%
464 Old Orchard Grove
Toronto, Ontario
Canada M5M 2G4
All officers and directors as 3,606,682 25.7%
a group (6 persons)
(1) Represents shares issuable upon the conversion of Series A Preferred shares
held by Xenia Venture Capital. The share total includes 428,768 shares of
common stock which may be acquired upon the exercise of a warrant held by
32
Xenia Venture Capital. The warrant entitles Xenia Venture Capital to
acquire up to 428,768 shares of ActiVein's Series A preferred stock. Each
Series A preferred share is convertible into one share of ActiVein's common
stock. Xenia Venture Capital is controlled by Avishi Noam and Chaim Mer.
OFFERING BY ACTIVEIN
By means of this prospectus ActiVein is offering to the public up to
5,000,000 shares of its common stock at a price of $0.20 per share. ActiVein
arbitrarily determined the $0.20 offering price and this price does not bear any
relationship to ActiVein's assets, book value or any other generally accepted
criteria of value for investment.
ActiVein will offer the shares through its officers and selected sales
agents, on a "best efforts" basis. Potential investors will include professional
and personal contacts of ActiVein's executive officers, as well as any
references from these persons. ActiVein's officers are not registered with the
Securities and Exchange Commission as brokers or dealers. ActiVein's officers
are not required to be registered as brokers or dealers since neither ActiVein's
officers are engaged in the business of buying or selling securities for others.
ActiVein's officers will not be relying on the exemption provided by Rule 3a4-1
of the Securities and Exchange Commission with respect to their participation in
this offering.
ActiVein will not compensate any officer for his participation in this
offering. There is no firm commitment by any person to purchase or sell any of
the shares offered and there is no assurance that any shares offered will be
sold. There is no minimum number of shares which are required to be sold in this
offering. All proceeds from the sale of shares by ActiVein will be delivered
directly to ActiVein and will not be deposited in any escrow account. If all
shares are sold, ActiVein will receive gross proceeds of $1,000,000. ActiVein
plans to end the offering on June 30, 2011. However, ActiVein may at its
discretion end the offering sooner or extend the offering to August 31, 2011.
ActiVein will end the offering prior to June 30, 2011 if all of the shares have
been sold or it believes that investors will not purchase any more shares.
ActiVein will extend the offering if the entire offering has not been sold and
it believes that investors will purchase additional shares.
Subscriptions will be made by delivering a check to ActiVein for the amount
of shares to be purchased. Cash will not be accepted as for payment for shares.
Subscriptions for the shares offered by this prospectus will not be binding upon
Activein until accepted in writing by its President. Returned subscriptions will
not include interest. ActiVein has not established any criteria for accepting or
rejecting any subscriptions. Subscriptions will be accepted or rejected within
ten days after the subscription is received. A subscription will be considered
accepted when ActiVein deposits the funds received for the shares subscribed.
Any subscription may be withdrawn prior to its acceptance by ActiVein, provided
the withdrawal is received by ActiVein prior to the time ActiVein deposits the
funds received for the subscription.
SELLING SHAREHOLDERS
The persons listed in the following table plan to offer the shares shown
opposite their respective names by means of this prospectus. The owners of the
shares to be sold by means of this prospectus are referred to as the "selling
shareholders".
33
ActiVein will not receive any proceeds from the sale of the shares by the
selling shareholders. ActiVein will pay all costs of registering the shares
offered by the selling shareholders. These costs, based upon the time related to
preparing this section of the prospectus, are estimated to be $2,000. The
selling shareholders will pay all sales commissions and other costs of the sale
of the shares offered by them.
Shares to Share
be sold Ownership
Shares in this After Percentage
Name Owned Offering Offering Ownership
---- ----- --------- --------- ----------
Adi Plaschkes 445,198 45,000 400,198 2.9%
Dr. Yoav Paz 944,986 100,000 844,986 6%
Ilan Shalev 944,986 100,000 844,986 6%
Eftan Investment Consulting Ltd. 377,888 30,000 347,888 2.5%
The controlling persons of the non-individual selling shareholders are:
Name of Shareholder Controlling Person
------------------- ------------------
Eftan Investment Consulting Ltd. Eitan Kyiet
To ActiVein's knowledge, no selling shareholder is affiliated with a broker
dealer. Adi Plaschkes, Dr. Yoav Paz and Ilan Shalev are all officers of
ActiVein. Eftan Investment Consulting Ltd. is controlled by Eitan Kyiet, a
formerdirector of ActiVien.
Each of the selling shareholders received their shares of ActiVein in March
of 2009 in exchange for their shares in ActiVein, Ltd.
Manner of Sale
The shares of common stock owned by the selling shareholders may be offered
and sold by means of this prospectus from time to time as market conditions
permit. If and when ActiVein's common stock becomes quoted on the OTC Bulletin
Board and after ActiVein terminates its offering, the shares owned by the
selling shareholders may be sold in the over-the-counter market, or otherwise,
at prices and terms then prevailing or at prices related to the then-current
market price, or in negotiated transactions. These shares may be sold by one or
more of the following methods, without limitation:
o a block trade in which a broker or dealer so engaged will attempt to
sell the shares as agent but may position and resell a portion of the
block as principal to facilitate the transaction;
o purchases by a broker or dealer as principal and resale by such
broker or dealer for its account pursuant to this prospectus;
o ordinary brokerage transactions and transactions in which the
broker solicits purchasers; and
o face-to-face transactions between sellers and purchasers without a
broker/dealer.
34
In competing sales, brokers or dealers engaged by the selling shareholders
may arrange for other brokers or dealers to participate. Brokers or dealers may
receive commissions or discounts from selling shareholders in amounts to be
negotiated. As to any particular broker-dealer, this compensation might be in
excess of customary commissions. Neither ActiVein nor the selling stockholders
can presently estimate the amount of such compensation. Notwithstanding the
above, no NASD member will charge commissions that exceed 8% of the total
proceeds from the sale.
The selling shareholders and any broker/dealers who act in connection with
the sale of the shares may be deemed to be "underwriters" within the meaning of
ss.2(11) of the SecuritiesActs of 1933, and any commissions received by them and
any profit on any resale of the shares as principal might be deemed to be
underwriting discounts and commissions under the Securities Act.
If any selling shareholder enters into an agreement to sell his or her
shares to a broker-dealer as principal, and the broker-dealer is acting as an
underwriter, ActiVein will file a post-effective amendment to the registration
statement, of which this prospectus is a part, identifying the broker-dealer,
providing required information concerning the plan of distribution, and
otherwise revising the disclosures in this prospectus as needed. ActiVein will
also file the agreement between the selling shareholder and the broker-dealer as
an exhibit to the post-effective amendment to the registration statement.
Other than an unwritten agreement that the selling shareholders will not
sell their shares until after ActiVen terminates its offering, the selling
shareholders do not have any agreement with ActiVein regarding the time when
their shares may be sold.
The selling stockholders may also sell their shares pursuant to Rule 144
under the Securities Act of 1933.
ActiVein has advised the selling shareholders that they and any securities
broker/dealers or others who may be deemed to be statutory underwriters will be
subject to the prospectus delivery requirements under the Securities Act of
1933. ActiVein has also advised each selling shareholder that in the event of a
"distribution" of the shares owned by the selling shareholder, such selling
shareholder, any "affiliated purchasers", and any broker/dealer or other person
who participates in the distribution may be subject to Rule 102 of Regulation M
under the Securities Exchange Act of 1934 ("1934 Act") until their participation
in that distribution is completed. Rule 102 makes it unlawful for any person who
is participating in a distribution to bid for or purchase stock of the same
class as is the subject of the distribution. A "distribution" is defined in Rule
102 as an offering of securities "that is distinguished from ordinary trading
transactions by the magnitude of the offering and the presence of special
selling efforts and selling methods". ActiVein has also advised the selling
shareholders that Rule 101 of Regulation M under the 1934 Act prohibits any
"stabilizing bid" or "stabilizing purchase" for the purpose of pegging, fixing
or stabilizing the price of the common stock in connection with this offering.
35
DESCRIPTION OF SECURITIES
Common Stock
ActiVein is authorized to issue 50,000,000 shares of common stock. As of
the date of this prospectus ActiVein had 13,908,257 outstanding shares of common
stock. Holders of common stock are each entitled to cast one vote for each share
held of record on all matters presented to shareholders. Cumulative voting is
not allowed; hence, the holders of a majority of the outstanding common stock
can elect all directors.
Holders of common stock are entitled to receive such dividends as may be
declared by the Board of Directors out of funds legally available for dividends
and, in the event of liquidation, to share pro rata in any distribution of
ActiVein's assets after payment of liabilities. The Board of Directors is not
obligated to declare a dividend and it is not anticipated that dividends will
ever be paid.
Holders of common stock do not have preemptive rights to subscribe to
additional shares if issued by ActiVein. There are no conversion, redemption,
sinking fund or similar provisions regarding the common stock. All of the
outstanding shares of common stock are fully paid and non-assessable and all of
the shares of common stock offered by this prospectus will be, upon issuance,
fully paid and non-assessable.
Preferred Stock
ActiVein is authorized to issue 10,000,000 shares of preferred stock.
Shares of preferred stock may be issued from time to time in one or more series
as may be determined by ActiVein's Board of Directors. The voting powers and
preferences, the relative rights of each such series and the qualifications,
limitations and restrictions of each series will be established by the Board of
Directors. ActiVein's directors may issue preferred stock with multiple votes
per share and dividend rights which would have priority over any dividends paid
with respect to the holders of ActiVein's common stock. The issuance of
preferred stock with these rights may make the removal of management difficult
even if the removal would be considered beneficial to shareholders generally,
and will have the effect of limiting shareholder participation in transactions
such as mergers or tender offers if these transactions are not favored by
ActiVein's management.
In connection with the acquisition of ActiVein Ltd., 3,770,935 Series A
Preferred shares were issued to Xenia Venture Capital Ltd. in exchange for the
preferred shares held by Xenia in ActiVein Ltd.
Each Series A preferred share is:
o convertible, at the option of the holder, into one share of ActiVein's
common stock.
o entitled to one vote on any matter submitted to ActiVein's shareholders,
and
36
o entitled an annual dividend of $0.0106 per share, as and when dividends
are declared by ActiVein's directors. Dividends which are not declared
do not cumulate.
In the event of ActiVein's liquidation or dissolution, or if ActiVein is
involved in a merger or other reorganization which results in ActiVein's
shareholders owning less than 50% of ActiVein's outstanding shares following the
merger or reorganization, each Series A preferred share is entitled to receive
an amount equal to $0.133, plus $0.0106 for each year after November 2007, plus
all declared but unpaid dividends.
Warrant to Purchase Series A Preferred Shares
In exchange for a warrant to purchase additional preferred shares of
ActiVein Ltd., a warrant to purchase 428,768 Series A shares of ActiVein was
issued to Xenia Venture Capital.
The warrant entitles Xenia Venture Capital to purchase 428,768 shares of
ActiVein's Series A preferred stock for $0.0001 per share. The warrant expires
if ActiVein raises at least $15,000,000 in a public offering, is involved in a
merger or reorganization, or sells all or substantially all of its assets or
common stock to a third party.
Xenia Venture Capital provided ActiVein, Ltd. with a portion of its initial
venture capital. The warrant was a bargained-for component of the securities
received by Xenia Venture Capital for providing funding to ActiVein, Ltd.
Transfer Agent
As of the date of this prospectus ActiVein had not appointed a transfer
agent for its common stock.
LEGAL PROCEEDINGS
ActiVein is not involved in any legal proceedings and ActiVein does not
know of any legal proceedings which are threatened or contemplated.
INDEMNIFICATION
The Delaware General Corporation Code authorizes the indemnification of a
director, officer, employee or agent of ActiVein against expenses incurred in
connection with any action, suit, or proceeding to which he or she is named a
party by reason having acted or served in such capacity, except for liabilities
arising from misconduct or negligence in performance of their duties. In
addition, even a director, officer, employee, or agent of ActiVein who was found
liable for misconduct or negligence in the performance of his or her duties may
obtain such indemnification if, in view of all the circumstances in the case, a
court of competent jurisdiction determines such person is fairly and reasonably
entitled to indemnification. Insofar as indemnification for liabilities arising
under the Securities Act of 1933 may be permitted to directors, officers, or
persons controlling ActiVein pursuant to the foregoing provisions, ActiVein has
been informed 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.
37
AVAILABLE INFORMATION
ActiVein has filed with the Securities and Exchange Commission a
Registration Statement on Form S-1 (together with all amendments and exhibits)
under the Securities Act of 1933, as amended, with respect to the Securities
offered by this prospectus. This prospectus does not contain all of the
information set forth in the Registration Statement, certain parts of which are
omitted in accordance with the rules and regulations of the Securities and
Exchange Commission. For further information, reference is made to the
Registration Statement which may be read and copied at the Commission's Public
Reference Room at 100 F. Street, N.E., Washington, D.C. 20549. The public may
obtain information on the operation of the Public Reference Room by calling the
Commission at 1-800-SEC-0330. The registration statement is also available at
www.sec.gov, the website of the Securities and Exchange Commission.
ActiVein does not know if, or when, it will file a registration statement
under the Securities and Exchange Act of 1934. If ActiVein does not file a
registration statement under the 1934 Act, ActiVein will not be subject to the
proxy rules of the Securities and Exchange Commission. In general, the proxy
rules of the Securities and Exchange Commission require certain disclosures in a
proxy statement, depending upon the matters to be voted upon by the
shareholders.
38
ACTIVEIN INC.
(FORMERLY UNLTD VENTURES INCORPORATED)
(A Development Stage Enterprise)
RESTATED CONSOLIDATED FINANCIAL STATEMENTS
FEBRUARY 28, 2010
(Amounts expressed in US Dollars)
Schwartz Levitsky Feldman llp
CHARTERED ACCOUNTANTS
LICENSED PUBLIC ACCOUNTANTS
TORONTO o MONTREAL
5
ACTIVEIN INC.
(FORMERLY UNLTD VENTURES INCORPORATED)
(A Development Stage Enterprise)
RESTATED CONSOLIDATED FINANCIAL STATEMENTS
FEBRUARY 28, 2010
(Amounts expressed in US Dollars)
TABLE OF CONTENTS
Page No
Report of Independent Registered Public Accounting Firm 1
Consolidated Balance Sheets as at February 28, 2010 and
February 28, 2009 2
Consolidated Statements of Operations and Comprehensive
loss for the years ended February 28, 2010 and
February 28, 2009 and for the period from inception
to February 28, 2010 3
Consolidated Statements of Cash Flows for the years ended
February 28, 2010 (as restated) and February 28, 2009
and for the period from inception to February 28, 2010
(as restated). 4
Consolidated Statements of changes in Stockholders'
Deficiency from Incorporation to February 28, 2010 5
Notes to Consolidated Financial Statements 6-18
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Stockholders of
Activein Inc.
(Formerly UNLTD Ventures Inc.)
We have audited the consolidated balance sheets of Activein Inc. (Formerly UNLTD
Ventures Inc.) (A Development Stage Enterprise) ("the Company") as of February
28, 2010 and February 28, 2009 and the consolidated statements of operations and
comprehensive loss, changes in stockholders' deficiency and cash flows
(restated) for the years then ended and for the period from incorporation to
February 28, 2010. These consolidated financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these consolidated financial statements based on our audits.
We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audits to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above revised
as described in note 12, present fairly, in all material respects, the financial
position of the Company as of February 28, 2010 and February 28, 2009 and the
results of its operations and its cash flows (restated) for the years then ended
and for the period from incorporation to February 28, 2010 in accordance with
generally accepted accounting principles in the United States of America.
The company is not required to have, nor were we engaged to perform, an audit of
its internal control over financial reporting. Our audit included consideration
of internal control over financial reporting as a basis for designing audit
procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the Company's internal controls
over financial reporting. Accordingly, we express no such opinion.
The accompanying consolidated financial statements have been prepared assuming
that the Company will continue as a going concern. As discussed in note 2 of the
consolidated financial statements, the Company has not generated revenue since
its incorporation, has incurred losses in developing its business and further
losses are anticipated and has a working capital deficiency. The Company
requires additional funds to meet its obligations and the cost of its
operations. These factors raise substantial doubt about its ability to continue
as a going concern. Management's plans regarding those matters are also
described in note 2. The consolidated financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
"SCHWARTZ LEVITSKY FELDMAN LLP"
Toronto, Ontario, Canada Chartered Accountants
November 10, 2010, except for additional Licensed Public Accountants
information added to note 1 and the effect
of the restatement discussed in note 12,
which is as of March 23, 2011
1
ACTIVEIN INC.
(FORMERLY UNLTD VENTURES INCORPORATED)
(A Development Stage Enterprise)
Consolidated Balance Sheets as at
February 28, 2010 and February 28, 2009
(Amounts expressed in US Dollars)
February 28, February 28,
2010 2009
ASSETS $ $
CURRENT ASSETS
Cash 102,987 -
Prepaid and other receivables 910 1,855
-----------------------
Total Current Assets 103,897 1,855
Plant and Equipment (note 7) 2,602 2,844
-----------------------
TOTAL ASSETS 106,499 4,699
-----------------------
LIABILITIES
CURRENT LIABILITIES
Accounts payable and accrued liabilities 136,003 60,102
Bank overdraft - 10,039
Loans and advances - 50,000
-----------------------
Total Current Liabilities 136,003 120,141
-----------------------
Going Concern (note 2)
Related Party Transactions (note 6)
Commitments (note 8)
STOCKHOLDERS' DEFICIENCY
Capital Stock (Note 5)
Preference shares Series `A', $0.001 par value,
4,200,000 shares authorized, 3,770,935 shares
outstanding (2009: 3,770,935 shares outstanding)
3,771 3,771
Common shares, $0.0001 par value: 50,000,000 shares
authorized, 13,908,257 shares outstanding (2009:
4,800,190 shares outstanding) 1,391 480
Additional Paid-In Capital 952,114 557,347
Accumulated Other Comprehensive Income 37,524 50,027
Accumulated Deficit (1,024,304) (727,067)
-----------------------
Total Stockholders' Deficiency (29,504) (115,442)
-----------------------
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIENCY 106,499 4,699
-----------------------
The accompanying notes are an integral part of these consolidated
financial statements.
2
ACTIVEIN INC.
(FORMERLY UNLTD VENTURES INCORPORATED)
(A Development Stage Enterprise)
Consolidated Statements of Operations and comprehensive loss
For the periods from Inception to February 28, 2010 and
the years ended February 28, 2010 and
February 28, 2009 (Amounts expressed in US Dollars)
For the For the
year year
Cumulative ended ended
since February February
28, 29,
inception 2010 2009
------------- ------------- -------------
$ $ $
OPERATING EXPENSES
Research and product development 705,526 165,333 221,476
General and administration 402,493 221,057 88,120
Amortization 7,745 2,307 2,659
Grant received from Government (note 10) (91,460) (91,460)
------------- ------------- -------------
TOTAL OPERATING EXPENSES 1,024,304 297,237 312,255
------------- ------------- -------------
LOSS BEFORE INCOME TAXES (1,024,304) (297,237) (312,255)
Income taxes (note 9) - - -
------------- ------------- -------------
NET LOSS (1,024,304) (297,237) (312,255)
============= ============= =============
Loss per share - basic and diluted (0.02) (0.07)
============= =============
Weighted average common shares outstanding 13,885,654 4,800,190
============= =============
Net Loss (297,237) (312,255)
Foreign exchange gain (loss) (12,503) 44,162
-------- -------
COMPREHENSIVE LOSS (309,740) (268,093)
The accompanying notes are an integral part of these consolidated
financial statements.
3
ACTIVEIN INC.
(FORMERLY UNLTD VENTURES INCORPORATED)
(A Development Stage Enterprise)
Restated Consolidated Statements of Cash Flows
For the periods from inception to February 28, 2010 and
the years ended February 28, 2010 and
February 28, 2009 (Amounts expressed in US Dollars)
Cumulative
Since February 28, February 28,
Inception 2010 2009
Cash Flows from Operating Activities (Restated- (Restated-
See note 12) See note 12)
Net Loss (1,024,304) (297,237) (312,255)
Items not requiring an outlay of cash:
Amortization of plant and equipment 7,745 2,307 2,659
Compensation expense on issue of
warrants 57,875 - 22,432
Fair value of interest on interest
free loan received 670 - 670
Changes in non-cash working capital
Prepaid and other receivables (910) 1,132 2,209
Accounts payable and accrued
liabilities* 115,598 49,437 12,618
--------------------------------------
Net cash used in operating activities (843,326) (244,361) (271,667)
--------------------------------------
Cash Flows from Investing Activities
Maturity of short term investment*** 362,606 362,606 -
Purchase of plant and equipment (9,817) (1,843) -
--------------------------------------
Net cash provided by investing
activities 352,789 360,763 -
--------------------------------------
Cash Flows from Financing Activities
Common shares 22 - -
Preference shares 503,031 179,319
Loans and advances** 50,000 - 50,000
Bank overdraft - (10,039) 4,237
--------------------------------------
Net cash provided (used) by financing
activities 553,053 (10,039) 233,556
--------------------------------------
Effect of foreign currency exchange
rate changes on cash 40,471 (3,376) 38,111
--------------------------------------
Net increase in Cash 102,987 102,987 -
Cash- beginning of period - - -
--------------------------------------
Cash - end of period 102,987 102,987 -
--------------------------------------
Supplemental Cash Flow Information
Interest paid - - -
--------------------------------------
Income taxes paid - - -
--------------------------------------
* Excludes liabilities of the accounting acquiree on date of reverse merger
** Does not include the loans to/from the accounting acquirer and acquiree not
settled in cash
*** Represents short term investments of the accounting acquiree acquired on
reverse merger
The accompanying notes are an integral part of these consolidated
financial statements
4
ACTIVEIN INC.
(FORMERLY UNLTD VENTURES INCORPORATED)
(A Development Stage Enterprise)
Consolidated Statements of Changes in Stockholders' Deficiency
from inception to February 28, 2010
(Amounts expressed in US Dollars)
Deficit
Preference accumulated Accumulated
Common Stock Stock Additional Deferred during the Other Total
-------------------------------- Paid stock development Comprehensive Stockholders'
Number Amount Number Amount In Capital compensation stage Income Deficiency
of Shares $ of Shares $ $ $ $ $ $
--------- ----- --------- ------ ---------- ------------ ---------- ------------ --------------
Common shares issued
at par on
incorporation
(adjusted)* 4,800,190 480 (458) 22
Issue of Preference
A shares for cash
(adjusted)* 448,908 449 59,442 59,891
Fair value of
warrants issued
for services 57,875 (57,875) -
Amortization of
deferred stock
compensation 9,646 9,646
Foreign currency
translation 105 105
Net loss (97,376) (97,376)
---------- ----- --------- ----- ------- ------- ---------- ------- --------
Balance February
28, 2007 4,800,190 480 448,908 449 116,859 (48,229) (97,376) 105 (27,712)
Issue of Preference
A shares for cash 1,977,952 1,978 261,841 263,819
Amortization of
deferred stock
compensation 25,797 25,797
Foreign currency
translation 5,760 5,760
Net loss (317,436) (317,436)
---------- ----- --------- ----- ------- ------- ---------- ------- --------
Balance February
29, 2008 4,800,190 480 2,426,860 2,427 378,700 (22,432) (414,812) 5,865 (49,772)
Issue of Preference
A shares for cash 1,344,075 1,344 177,977 179,321
Amortization of
deferred stock
compensation 22,432 22,432
Fair value of
interest on
interest free loan
received 670 670
Foreign currency
translation 44,162 44,162
Net loss (312,255) (312,255)
---------- ----- --------- ----- ------- ------- ---------- ------- --------
Balance February
28, 2009 4,800,190 480 3,770,935 3,771 557,347 -- (727,067) 50,027 (115,442)
Reverse acquisition
adjustment 8,358,067 836 394,842 395,678
Shares issued as
finder fee 750,000 75 (75)
Foreign currency (12,503) (12,503)
translation
Net loss (297,237) (297,237)
---------- ----- --------- ----- ------- ------- ---------- ------- --------
Balance February
28, 2010 13,908,257 1,391 3,770,935 3,771 952,114 -- (1,024,304) 37,524 (29,504)
---------- ----- --------- ----- ------- ------- ---------- ------- --------
* In a reverse merger accounted for as a recapitalization, the historical
stockholders' equity of the accounting acquirer (Activein Ltd) is retroactively
stated for all periods for the equivalent number of shares received in the
merger
The accompanying notes are an integral part of these consolidated
financial statements
5
ACTIVEIN INC.
(FORMERLY UNLTD VENTURES INCORPORATED)
(A Development Stage placeCityEnterprise)
Notes to Financial Statements
dateYear2010Day28Month2February 28, 2010
(Amounts expressed in US Dollars)
1. BASIS OF PRESENTATION
The Company was incorporated under the laws of the State of placeStateDelaware,
placecountry-regionUSA on January 8, 2007. On April 9, 2009 the Company changed
its name to Activein, Inc. In March 2009 the Company acquired 100 % of the
outstanding common and preference shares of Activein Ltd., an Israeli
corporation. In exchange of all issued and outstanding common and preference
shares of Activein Ltd, the shareholders of Activein Ltd received 4,800,190
shares of the Company's common stock, In addition, 3,770,935 shares of Series A
Preferred stock, and a warrant which allows the holder to purchase an additional
428,768 Series A Preferred shares. The warrant was issued in lieu of and to
cancel the warrant issued by Activein Ltd to its warrant holder in financial
year 2007 to acquire 809 series `A" preference shares of Activein Ltd These
Series A Preferred shares are convertible, at the option of the holder of such
shares, into fully paid and non-assessable shares of the Company's common stock.
The certificate of the designation, preferences and rights of the Series A
preferred shares entitles the holder thereof to one vote for each share of
common stock into which such Series A Preferred share could then be converted,
and with respect to such vote, such holder shall have full voting rights and
powers equal to the voting rights and powers of the holders of common stock In
addition, a shareholder agreement was executed whereby, the shareholders of
Activein Ltd could nominate and replace four out of the total strength of five
members of the board of directors and to designate the replacement on the board
of directors of any director so removed. On post acquisition, shareholders of
Activein Ltd control 51% of the voting rights of the Company. The exchange
resulted in Activein Ltd. becoming a wholly owned subsidiary of the Company. The
acquisition is accounted for as a reverse merger (recapitalization) with
Activein Ltd. deemed to be the accounting acquirer, and the Company as the legal
acquirer. The reverse merger between the Company, and Activein Ltd, a private
development stage entity, is a capital transaction in substance because a shell
is normally not a business. The accounting is identical to that resulting from a
reverse acquisition, except that no goodwill or other intangible is recorded.
On March 12, 2009 the Company issued 750,000 Common shares as finder's fees in
connection with the acquisition of Activein Ltd. 1,006,106 common shares were
reserved as an option pool. The financial statements for the year ended February
28, 2010 include the consolidated financial statements of Activein Inc. and
Activein Ltd., whereas the comparative figures are those of Activein Ltd.
The consolidated financial statements include the accounts of Activein Inc. (the
"Company"), and its subsidiary Activein Ltd. (an Israeli corporation). All
material inter-company accounts and transactions have been eliminated.
2. NATURE OF OPERATIONS AND GOING CONCERN
The Company's subsidiary Activein Ltd. is developing an intravenous catheter
which is expected to reduce the number of times a hospital patient is stuck with
a needle to withdraw blood samples.
6
2. NATURE OF OPERATIONS AND GOING CONCERN-Cont'd
The Company has no source for operating revenue and expects to incur significant
expenses before establishing operating revenue. The Company's future success, is
dependent upon its ability to raise sufficient capital which will be required in
the development and the marketability of the products to be manufactured. There
is also no assurance that funds will be available or the Company will be
profitable. The accompanying financial statements do not reflect any adjustments
that may result if the Company is unable to continue as a going concern.
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The accounting policies of the Company are in accordance with accounting
principles generally accepted in the placecountry-regionUnited States of
America. Outlined below are the significant accounting policies:
a) Income taxes
Deferred tax assets and liabilities are recorded for differences
between the financial statement and tax basis of the assets and
liabilities that will result in taxable or deductible amounts in the
future based on enacted tax laws and rates. Valuation allowances are
established when necessary to reduce deferred tax assets to the amount
expected to be realized. Income tax expense is recorded for the amount
of income tax payable or refundable for the period increased or
decreased by the change in deferred tax assets and liabilities during
the period.
7
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont'd)
a) Revenue Recognition
The Company's revenue recognition policies are expected to follow
common practice in the manufacturing industry whereby sales are
recognized when all of the following criteria are met: (1) persuasive
evidence of an arrangement exists; (2) delivery has occurred or
services have been rendered; (3) the sellers' price to the buyer is
fixed or determinable; and (4) collectability is reasonably assured.
b) Stock Based Compensation
All awards granted to employees and non-employees after June 30, 2005
are valued at fair value by using the Black-Scholes option pricing
model and recognized on a straight line basis over the service periods
of each award. The Company accounts for equity instruments issued in
exchange for the receipt of goods or services from other than
employees using the estimated fair market value of the consideration
received or the estimated fair value of the equity instruments issued,
whichever is more reliably measurable. The value of equity instruments
issued for consideration other than employee services is determined on
the earlier of a performance commitment or completion of performance
by the provider of goods or services. As of February 28, 2010 and
February 28, 2009, no awards are granted to employees and
non-employees and accordingly, no amount has been charged as stock
based compensation expense.
c) Use of Estimates
Preparation of financial statements in accordance with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the amounts
reported in the financial statements and related notes to financial
statements. These estimates are based on management's best knowledge
of current events and actions the Company may undertake in the future.
Significant estimates relate to accrual for liabilities and valuation
allowance for deferred tax assets. Actual results may ultimately
differ from such estimates.
8
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont'd)
d) Financial Instruments
The fair market value of the Company's financial instruments
comprising cash, and accounts payable and accrued liabilities were
estimated to approximate their carrying values due to immediate or
short-term maturity of these financial instruments. The Company
maintains cash balances at financial institutions. The Company has not
experienced any material losses in such accounts.
FASB defines fair value as the exchange price that would be received
for an asset or paid to transfer a liability (an exit price) in the
principal or most advantageous market for the asset or liability in an
orderly transaction between market participants on the measurement
date. Valuation techniques used to measure fair value must maximize
the use of observable inputs and minimize the use of unobservable
inputs. The standard describes a fair value hierarchy based on three
levels of inputs, of which the first two are considered observable and
the last unobservable, that may be used to measure fair value, which
are the following:
o Level 1 - Quoted prices in active markets for identical assets or
liabilities
o Level 2 - Inputs other than Level 1 that are observable, either
directly or indirectly, such as quoted prices for similar assets
or liabilities; quoted prices in markets that are not active; or
other inputs that are observable or can be corroborated by
observable market data for substantially the full term of the
assets or liabilities.
o Level 3 -- Unobservable inputs that are supported by little or no
market activity and that are significant to the fair value of the
assets or liabilities.
The Company does not have any assets or liabilities measured at fair
value as at February 28, 2010 and February 28, 2009.
Foreign exchange risk: The Company's subsidiary conducts most of its
operating activities in New Israeli Shekel (NIS). The Company is
therefore subject to gains or losses due to fluctuations in
placeCityNIS currency relative to the US dollar. The Company does not
use derivative instruments to reduce its exposure to foreign currency
risk.
e) Foreign Currency
The Company's subsidiaries functional currency is New Israeli Shekel
(NIS), but these financial statements have been presented in US
dollars. The translation method used is the current rate method where
the functional currency is the foreign currency. Under the current
rate method all assets and liabilities are translated at the current
rate, stockholder's equity accounts are translated at historical rates
and revenues and expenses are translated at average rates for the
year. Due to the fact that items in the financial statements are being
translated at different rates according to their nature, a translation
adjustment is created. This translation adjustment has been included
in accumulated other comprehensive income (loss).
9
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont'd)
f) Comprehensive Income
The Company reports comprehensive income or loss in its consolidated
financial statements. In addition to items included in net income,
comprehensive income includes items currently charged or credited
directly to stockholders' equity, such as foreign currency translation
adjustments.
g) Loss per Share
Basic loss per share is computed by dividing net loss by the weighted
average number of common shares outstanding for the year. Diluted loss
per share is computed by dividing net loss by the weighted average
number of common shares outstanding plus common stock equivalents (if
dilutive) related to stock options and warrants for each year. There
were no common equivalent shares outstanding at
dateYear2010Day28Month2February 28, 2010 and February 28, 2009 that
have been included in dilutive loss per share calculation. At February
28, 2010, and February 28, 2009 there were Nil options and a warrant
to purchase 428,768 Series A Preferred shares outstanding. In a
reverse merger accounted for as a recapitalization, earnings per share
of the accounting acquirer is restated for all periods prior to the
merger to reflect the number of equivalent shares received by the
accounting acquirer.
h) Research and Product Development
Research and Product Development costs, other than capital
expenditures are charged against income in the period incurred.
i) Intellectual Property
Costs incurred in developing Intellectual Property are expensed as
incurred.
j) Plant and Equipment
Plant and equipment are recorded at cost less accumulated
depreciation. Depreciation is provided commencing in the month
following acquisition using the following annual rate and method:
Computer equipment 33% declining balance method
Software 33% declining balance method
Lab equipment 10% declining balance method
Cell Phones 50% declining balance method
k) Segmented information:
The Company operates in one business segment and has one reporting
unit. The Company's assets are located in Israel and Canada.
10
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont'd)
l) Impairment of long lived assets
Long-lived assets to be held and used are analyzed for impairment
whenever events or changes in circumstances indicate that the related
carrying amounts may not be recoverable. The Company evaluates at each
balance sheet date whether events and circumstances have occurred that
indicate possible impairment. If there are indications of impairment,
the Company uses future undiscounted cash flows of the related asset
or asset grouping over the remaining life in measuring whether the
assets are recoverable. In the event such cash flows are not expected
to be sufficient to recover the recorded asset values, the assets are
written down to their estimated fair value. Long-lived assets to be
disposed of are reported at the lower of carrying amount or fair value
of asset less cost to sell.
m) Valuation of warrants
All warrants granted to employees and non-employees after June 30,
2005 for services will be valued at fair value by using the
Black-Scholes option pricing model and recognized on a straight line
basis over the service periods of each warrant issued.
n) Recent Pronouncements
FASB ASC TOPIC 805 - "Business Combinations." The objective of this
topic is to enhance the information that an entity provides in its
financial reports about a business combination and its effects. The
Topic mandates: (i) how the acquirer recognizes and measures the
assets acquired, liabilities assumed and any non-controlling interest
in the acquiree; (ii) what information to disclose in its financial
reports and; (iii) recognition and measurement criteria for goodwill
acquired. This Topic is effective for any acquisitions made on or
after December 15, 2008. The adoption of this Topic did not have a
material impact on the Company's financial statements and disclosures.
FASB ASC TOPIC 810 - "Noncontrolling Interests." The objective of this
Topic is to improve the relevance, comparability, and transparency of
the financial information that a reporting entity provides in its
consolidated financial statements by establishing accounting and
reporting standards that require: (i) the ownership interests in
subsidiaries held by parties other than the parent be clearly
identified, labeled, and presented in the consolidated statement of
financial position within equity, but separate from the parent's
equity; (ii) the amount of consolidated net income attributable to the
parent and to the noncontrolling interest be clearly identified and
presented on the face of the consolidated statement of income; (iii)
changes in a parent's ownership interest while the parent retains its
controlling financial interest in its subsidiary be accounted for
consistently; (iv) when a subsidiary is deconsolidated, any retained
noncontrolling equity investment in the former subsidiary be initially
measured at fair value. The gain or loss on the deconsolidation of the
subsidiary is measured using the fair value of any noncontrolling
equity investment rather than the carrying amount of that retained
investment and; (v) entities provide sufficient disclosures that
clearly identify and distinguish between the interests of the parent
and the interests of the non-controlling owners. This Topic is
effective for fiscal years, and interim periods within those fiscal
years, beginning on or after December 15, 2008. Earlier adoption is
prohibited. The adoption of this Topic did not have a material impact
on the Company's financial statements and disclosures.
11
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont'd)
FASB ASC TOPIC 815 - "Derivatives and Hedging." The use and complexity
of derivative instruments and hedging activities have increased
significantly over the past several years. This Topic requires
enhanced disclosures about an entity's derivative and hedging
activities and thereby improves the transparency of financial
reporting. This Topic is effective for financial statements issued for
fiscal years and interim periods beginning after November 15, 2008,
with early application encouraged. The adoption of this Topic did not
have a material impact on the Company's financial statements and
disclosures
FASB ASC TOPIC 944 - "Financial Services - Insurance." Diversity
exists in practice in accounting for financial guarantee insurance
contracts by insurance enterprises. That diversity results in
inconsistencies in the recognition and measurement of claim
liabilities because of differing views about when a loss has been
incurred. This Topic requires that an insurance enterprise recognize a
claim liability prior to an event of default (insured event) when
there is evidence that credit deterioration has occurred in an insured
financial obligation. This Topic is effective for financial statements
issued for fiscal years beginning after December 15, 2008 and all
interim periods within those fiscal years, except for some disclosures
about the insurance enterprise's risk-management activities. The
adoption of this Topic did not have a material impact on the Company's
financial statements and disclosures
FASB ASC TOPIC 855 - "Subsequent Events." In May 2009, the FASB issued
Topic 855, which establish general standards of accounting and
disclosure of events that occur after the balance sheet date but
before financial statements are issued or are available to be issued.
In particular, this Topic sets forth : (i) the period after the
balance sheet date during which management of a reporting entity
should evaluate events or transactions that may occur for potential
recognition or disclosure in the financial statements, (ii) the
circumstances under which an entity should recognize events or
transactions occurring after the balance sheet date in its financial
statements, (iii) the disclosures that an entity should make about
events or transactions that occurred after the balance sheet date.
This Topic should be applied to the accounting and disclosure of
subsequent events. This Topic does not apply to subsequent events or
transactions that are within the scope of other applicable accounting
standards that provide different guidance on the accounting treatment
for subsequent events or transactions. This Topic was effective for
interim and annual periods ending after June 15, 2009. The adoption of
this Topic did not have a material impact on the Company's financial
statements and disclosures.
FASB ASC TOPIC 105 - "The FASB Accounting Standard Codification and
the Hierarchy of Generally Accepted Accounting Principles." In June
2009, the FASB issued Topic 105, which became the source of
authoritative GAAP recognized by the FASB to be applied by
nongovernmental entities. Rules and interpretive releases of the SEC
under authority of federal securities laws are also sources of
authoritative GAAP for SEC registrants. On the effective date of this
Topic, the Codification will supersede all then-existing non-SEC
accounting and reporting standards. All other non-SEC accounting
literature not included in the Codification will become
non-authoritative. This Topic identifies the sources of accounting
principles and the framework for selecting the principles used in
preparing the financial statements of nongovernmental entities that
are presented in conformity with GAAP and arranged these sources of
GAAP in a hierarchy for users to apply accordingly. This Topic is
effective for financial statements issued for interim and annual
periods ending after September 15, 2009. The adoption of this topic
did not have a material impact on the Company's disclosure of the
financial statements.
12
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont'd)
FASB ASC TOPIC 320 - "Recognition and Presentation of
Other-Than-Temporary Impairments." In April 2009, the FASB issued
Topic 320 amends the other-than-temporary impairment guidance in GAAP
for debt securities to make the guidance more operational and to
improve the presentation and disclosure of other-than-temporary
impairments on debt and equity securities in the financial statements.
This Topic does not amend existing recognition and measurement
guidance related to other-than-temporary impairments of equity
securities. The Topic is effective for interim and annual reporting
periods ending after June 15, 2009, with early adoption permitted for
periods ending after March 15, 2009. Earlier adoption for periods
ending before March 15, 2009, is not permitted. This Topic does not
require disclosures for earlier periods presented for comparative
purposes at initial adoption. In periods after initial adoption, this
Topic requires comparative disclosures only for periods ending after
initial adoption. The adoption of this Topic did not have a material
impact on the Company's financial statements and disclosures.
FASB ASC TOPIC 860 - "Accounting for Transfer of Financial Assets and
Extinguishment of Liabilities." In June 2009, the FASB issued
additional guidance under Topic 860 which improves the relevance,
representational faithfulness, and comparability of the information
that a reporting entity provides in its financial statements about a
transfer of financial assets; the effects of a transfer on its
financial position, financial performance, and cash flows; and a
transferor's continuing involvement, if any, in transferred financial
assets. This additional guidance requires that a transferor recognize
and initially measure at fair value all assets obtained (including a
transferor's beneficial interest) and liabilities incurred as a result
of a transfer of financial assets accounted for as a sale. Enhanced
disclosures are required to provide financial statement users with
greater transparency about transfers of financial assets and a
transferor's continuing involvement with transferred financial assets.
This additional guidance must be applied as of the beginning of each
reporting entity's first annual reporting period that begins after
November 15, 2009, for interim periods within that first annual
reporting period and for interim and annual reporting periods
thereafter. Earlier application is prohibited. This additional
guidance must be applied to transfers occurring on or after the
effective date. The adoption of this Topic is not expected to have a
material impact on the Company's financial statements and disclosures.
FASB ASC TOPIC 810 - "Consolidation of Variables Interest and Special
Purpose Entities." In June 2009, the FASB issued Topic 810, which
requires an enterprise to perform an analysis to determine whether the
enterprise's variable interest or interests give it a controlling
financial interest in a variable interest entity. This analysis
identifies the primary beneficiary of a variable interest entity as
the enterprise that has both of the following characteristics: (i) The
power to direct the activities of a variable interest entity that most
significantly impact the entity's economic performance and (ii) The
obligation to absorb losses of the entity that could potentially be
significant to the variable interest entity or the right to receive
benefits from the entity that could potentially be significant to the
variable interest entity. Additionally, an enterprise is required to
assess whether it has an implicit financial responsibility to ensure
that a variable interest entity operates as designed when determining
whether it has the power to direct the activities of the variable
interest entity that most significantly impact the entity's economic
performance. This Topic requires ongoing reassessments of whether an
enterprise is the primary beneficiary of a variable interest entity
and eliminate the quantitative approach previously required for
determining the primary beneficiary of a variable interest entity,
which was based on determining which enterprise absorbs the majority
of the entity's expected losses, receives a majority of the entity's
expected residual returns, or both. This Topic is effective as of the
beginning of each reporting entity's first annual reporting period
that begins after November 15, 2009, for interim periods within that
first annual reporting period, and for interim and annual reporting
periods thereafter. Earlier application is prohibited. The adoption of
this Topic is not expected to have a material impact on the Company's
financial statements and disclosures.
13
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont'd)
FASB ASC TOPIC 820 - "Fair Value measurement and Disclosures", an
Accounting Standard Update. In September 2009, the FASB issued this
Update to amendments to Subtopic 82010, "Fair Value Measurements and
Disclosures". Overall, for the fair value measurement of investments
in certain entities that calculates net asset value per share (or its
equivalent). The amendments in this Update permit, as a practical
expedient, a reporting entity to measure the fair value of an
investment that is within the scope of the amendments in this Update
on the basis of the net asset value per share of the investment (or
its equivalent) if the net asset value of the investment (or its
equivalent) is calculated in a manner consistent with the measurement
principles of Topic 946 as of the reporting entity's measurement date,
including measurement of all or substantially all of the underlying
investments of the investee in accordance with Topic 820. The
amendments in this Update also require disclosures by major category
of investment about the attributes of investments within the scope of
the amendments in this Update, such as the nature of any restrictions
on the investor's ability to redeem its investments at the measurement
date, any unfunded commitment, and the investment strategies of the
investees. The major category of investment is required to be
determined on the basis of the nature and risks of the investment in a
manner consistent with the guidance for major security types in GAAP
on investments in debt and equity securities in paragraph
320-10-50-lB. The disclosures are required for all investments within
the scope of the amendments in this Update regardless of whether the
fair value of the investment is measured using the practical
expedient. The amendments in this Update apply to all reporting
entities that hold an investment that is required or permitted to be
measured or disclosed at fair value on a recurring or non recurring
basis and, as of the reporting entity's measurement date, if the
investment meets certain criteria The amendments in this Update are
effective for the interim and annual periods ending after December 15,
2009. Early application is permitted in financial statements for
earlier interim and annual periods that have not been issued. The
adoption of this Update is not expected to have a material impact on
the Company's financial statements and disclosures.
FASB ASC TOPIC 740 - "Income Taxes", an Accounting Standard Update. In
September 2009, the FASB issued this Update to address the need for
additional implementation guidance on accounting for uncertainty in
income taxes. For entities that are currently applying the standards
for accounting for uncertainty in income taxes, the guidance and
disclosure amendments are effective for financial statements issued
for interim and annual periods ending after September 15, 2009. The
adoption of this Update did not have a material impact on the
Company's financial statements and disclosures.
4. REVERSE ACQUISITION
In March 2009, the Company acquired 100 % of the outstanding common and
preference shares of Activein Ltd. an Israeli Corporation (see note 5- capital
stock). The exchange resulted in the ActiVein Ltd. becoming a wholly owned
subsidiary of ActiVein Inc. Notwithstanding that the Company became the legal
acquirer of Activein Ltd., this transaction has been accounted for in these
financial statements as a reverse merger equivalent to the issuance of stock by
Activein Ltd. for the net monetary assets of the Company accompanied by a
recapitalization. The comparative consolidated financial statements of the
Company are those of Activein Ltd (an Israeli corporation). The historic
shareholders' equity of the accounting acquirer is retroactively restated for
all periods for the equivalent number of shares received in the merger after
giving effect to any difference in par value of the issuer's and accounting
acquirer's stock, with an offset to paid in capital.
14
5. CAPITAL STOCK
a) Authorized
50,000,000 Common shares, $0.0001 par value
And
10,000,000 Preferred shares, $0.001 par value, issuable in varying
series and par values As of Balance sheet date 4,200,000 Series "A"
Preferred shares, $0.001 par value have been authorized. These
preferred shares are convertible, at the option of the holder of such
shares, at any time after the date of issuance of such shares, into
fully paid and non-assessable shares of the Company's common stock.
Each of the holders of Series `A' Preferred shares shall be entitled
to receive for each series `A' preferred share held, non-cumulative
dividends, as and when dividends are declared by the Board, at the
rate of $0.0106.
b) Issued during the year ended February 28, 2010 :
In March 2009, the Company acquired 100 % of the outstanding common
and preference shares of Activein Ltd. an Israeli Corporation The
exchange resulted in the ActiVein Ltd. becoming a wholly owned
subsidiary of ActiVein Inc. In accordance with the reverse take-over
of accounting, the capital structure of issued and outstanding common
and preference shares is that of ActiVein Inc.
Number of Amount
Shares
Common Shares:
Issued:
ActiVein Ltd Common shares (Opening) 9,057 22
Adjustment of reverse take over 4,791,133 458
ActiVein Inc. Common shares 8,358,067 836
Shares issued for finder's fees 750,000 75
---------- -----
Total 13,908,257 1,391
Preference shares;
ActiVein Ltd Preference shares (Opening) 7,115 18
Adjustment of reverse takeover 3,763,820 3,753
--------- -----
Total 3,770,935 3,771
15
6. RELATED PARTY TRANSACTIONS
Year ended February 28, 2010
The Company expensed $ 49,345 (NIS 194,011) being compensation
expense for the CEO of the Company and $11,300 being compensation
expense for a director of the Company.
Year ended February 28, 2009
The Company expensed $ 54,116 (NIS 196,852) being compensation
expense for the CEO of the Company.
7. PLANT AND EQUIPMENT
As at As at
February 28, 2010 February 28, 2009
$ $
---------------------------------------------
Cost
----
Computer Equipment 2,471 1,616
Software 5,795 5,277
Lab Equipment 1,417 981
Phones 664 -
------- -----
10,347 7,874
Less: Accumulated Depreciation (7,745) (5,030)
Net carrying amount $ 2,602 $ 2,844
------- -------
8. COMMITMENTS
For a one year period following the closing of the reverse acquisition, the
Company is committed to pay US$6,500 per month to a consultant for investor
relations and investment banking services For a one year period following the
closing of the reverse acquisition, the Company is committed to pay US$1,500 per
month to a director for investor relations and investment banking services.
16
9. INCOME TAXES
The Company's current and deferred income taxes are as follows:
2010 2009
----- ----
Loss before income taxes $(297,237) $(312,255)
--------- ---------
Expected income tax recovery at the
statutory rates of 25% (2009 - 26%) $ (74,309) $ (81,186)
Increase in income taxes resulting from:
Permanent differences - 5,832
Valuation allowance 74,309 75,354
--------- ---------
Provision for income taxes $ - $ -
========= =========
The Company has deferred income tax assets as follows:
2010 2009
---- ----
Net operating loss carry forward $ 999,342 $668,522
Deferred Income tax on loss carry forward 249,835 173,816
Valuation allowance for deferred income tax
assets $ (249,835) (173,816)
----------- ---------
- -
----------- ---------
The Company has certain non-capital losses of approximately $199,911 available,
which can be applied against future taxable income and which expires as follows:
2027 $7,384
2028 $26,198
2029 $166,329
The Company's subsidiary in Israel has certain non-capital losses of
approximately $799,431 (2010:130,909; 2009:289,823; 2008:291,640; 2007: 87,059)
available, which can be applied against future taxable income and according to
the tax laws in Israel, these losses can be carried forward indefinitely until
absorbed.
As the company has not commenced any operations, it has provided a 100 per cent
valuation allowance on the net deferred tax asset as of February 28, 2010 and
February 28, 2009.
17
10. GOVERNMENT GRANTS
The Company was approved by The Government of Israel for a grant upto 50% of
approved research and product expenditures to a maximum grant of $270,215 (NIS
1,021,653). This grant relates to approved research and development expenditures
to be incurred by the Company during the period June 2009 to May 2010.
11. GEOGRAPHIC LOCATION OF ASSETS
All assets in the financial statements are located in Israel, except for cash of
$21,850 which is located in Canada.
12. REVISION TO FINANCIAL STATEMENTS
The Company has revised its presentation of its Cash Flow statement to exclude
non cash transactions and has revised and enhanced its disclosure to Note 1
relating to `Basis of Presentation'. The revision resulted in no change to the
net increase in cash. The effect of the changes in the financial statements is
summarized as follows:
Cumulative Year ended
Since Inception February 28, 2010
------------------ -----------------------
Prior to Prior to
Restatement Restated Restatement Restated
----------- -------- ----------- --------
$ $ $ $
Consolidated Statement of
Cash Flows
Cash flows from Operating
Activities:
Changes in non-cash working
capital
Accounts payable and accrued
liabilities 136,003 115,598 69,842 49,437
Net cash used in operating
activities (822,921) (843,326) (223,956) (244,361)
Cash Flows from Investing
Activities:
Maturity of short term
investment - 362,606 - 362,606
Net cash provided (used) by
investing activities (9,817) 352,789 (1,843) 360,763
Cash Flows from Financing
Activities:
Common shares 395,700 22 395,678 -
Loans and advances - 50,000 (50,000) -
Net cash provided (used) by
financing activities 898,731 553,053 335,639 (10,039)
Effect of foreign currency
exchange rate changes 36,994 40,471 (6,853) (3,376)
18
ACTIVEIN INC.
(FORMERLY UNLTD VENTURES INCORPORATED)
(A Development Stage Enterprise)
INTERIM CONSOLIDATED FINANCIAL STATEMENTS
NOVEMBER 30, 2010
(Amounts expressed in US Dollars)
(Unaudited-Prepared by Management)
ACTIVEIN INC.
(FORMERLY UNLTD VENTURES INCORPORATED)
(A Development Stage Enterprise)
INTERIM CONSOLIDATED FINANCIAL STATEMENTS
NOVEMBER 30, 2010
(Amounts expressed in US Dollars)
(Unaudited-Prepared by Management)
TABLE OF CONTENTS
Page No
Interim Consolidated Balance Sheets as at November 30, 2010
and February 28, 2010 1 Interim Consolidated Statements of
Operations and Comprehensive loss for the nine months and
three months ended November 30, 2010 and November 30, 2009
and for the period from inception to November 30, 2010 2
Interim Consolidated Statements of Cash Flows for the nine
months ended November 30, 2010 and November 30, 2009 and for
the period from inception to November 30, 2010 3
Interim Consolidated Statements of changes in Stockholders'
Deficiency for the nine months ended November 30, 2010 and for
the period from Inception to November 30, 2010 4
Condensed Notes to Interim Consolidated Financial Statements 5-8
ACTIVEIN INC.
(FORMERLY UNLTD VENTURES INCORPORATED) (A Development Stage Enterprise) Interim
Consolidated Balance Sheets as at November 30, 2010 and February 28, 2010
(Amounts expressed in US Dollars) (Unaudited- Prepared by Management)
November 30, February 28,
2010 2010
ASSETS $ $
CURRENT ASSETS
Cash 15,168 102,987
Prepaid and other receivables 2,888 910
---------- ----------
Total Current Assets 18,056 103,897
Plant and Equipment (note 6) 2,077 2,602
---------- ----------
TOTAL ASSETS 20,133 106,499
---------- ----------
LIABILITIES
CURRENT LIABILITIES
Accounts payable and accrued liabilities 170,057 136,003
---------- ----------
Total Current Liabilities 170,057 136,003
---------- ----------
Going Concern (note 2)
Related Party Transactions (note 5)
STOCKHOLDERS' DEFICIENCY
Capital Stock (Note 4)
Preference shares Series `A', $0.001 par value,
4,200,000 shares authorized, 3,770,935
outstanding 3,771 3,771
Common shares, $0.0001 par value: 50,000,000 shares
authorized, 13,908,257 shares outstanding 1,391 1,391
Additional Paid-In Capital 1,003,264 952,114
Accumulated Other Comprehensive Income 27,721 37,524
Accumulated Deficit (1,186,071) (1,024,304)
----------- ----------
Total Stockholders' Deficiency (149,924) (29,504)
------------ ----------
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIENCY 20,133 106,499
------------ ----------
The accompanying condensed notes are an integral part
of these unaudited interim consolidated financial
statements.
1
ACTIVEIN INC.
(FORMERLY UNLTD VENTURES INCORPORATED)
(A Development Stage Enterprise)
Interim Consolidated Statements of Operations for the periods from Inception to
November 30, 2010 and the nine months and three months ended November 30, 2010
and November 30, 2009 (Amounts expressed in US Dollars) (Unaudited - Prepared by
Management)
For the For the For the For the
nine months nine months three months three months
Cumulative ended ended ended ended
since November 30, November 30, November 30, November 30,
inception 2010 2009 2010 2009
$ $ $ $ $
-------------------------------------------------------------------------
Operating Expenses
General and administration 446,997 44,504 170,871 20,731 48,494
Research and development 822,110 116,584 156,522 39,513 29,299
Amortization 8,424 679 1,938 115 699
Grant received from Government
(Note 8) (91,460) - - - -
----------- ----------- ------------- ------------ ------------
Total Operating Expenses 1,186,071 161,767 329,331 60,359 78,492
Loss before Income tax (1,186,071) (161,767) (329,331) (60,359) (78,492)
Provision for income taxes - - - - -
----------- ----------- ------------- ------------ ------------
Net Loss (1,186,071) (161,767) (329,331) (60,359) (78,492)
----------- ----------- ------------- ------------ ------------
Loss per share-Basic and Diluted (0.01) (0.02) (0.00) (0.01)
=========== =========== ============= ============ ============
Weighted Average Common Shares
Outstanding 13,908,257 13,543,934 13,908,257 13,908,257
=========== =========== ============= ============ ============
The accompanying condensed notes are an integral part
of these unaudited interim consolidated financial
statements
2
ACTIVEIN INC.
(FORMERLY UNLTD VENTURES INCORPORATED)
(A Development Stage Enterprise)
Interim Consolidated Statements of Cash Flows For the periods from inception to
November 30, 2010 and the nine months ended November 30, 2010 and November 30,
2009 (Amounts expressed in US Dollars) (Unaudited - Prepared by Management)
Cumulative
Since November 30, November 30,
Inception 2010 2009
-------------------------------------------------
Cash Flows from Operating Activities
Net Loss (1,186,071) (161,767) (329,331)
Items not requiring an outlay of cash:
Amortization of plant and equipment 8,424 679 1,938
Compensation expense on issue of
warrants 57,875 - -
Fair value of interest on interest
free loan received 670 - -
Changes in non-cash working capital
Prepaid and other receivables (2,862) (1,952) 371
Accounts payable and accrued liabilities 167,709 31,706 59,424
----------- ----------- -----------
Net cash used in operating activities (954,255) (131,334) (267,598)
----------- ----------- -----------
Cash Flows from Investing Activities
Purchase of plant and equipment (9,971) (154) (1,836)
----------- ----------- -----------
Net cash used in investing activities (9,971) (154) (1,836)
----------- ----------- -----------
Cash Flows from Financing Activities
Proceeds from subscription/issuance
of common shares 446,850 51,150 395,678
Proceeds from issuance of preference
shares 503,031 -
Loans and advances - - (50,000)
Bank overdraft - - (10,039)
----------- ----------- -----------
Net cash provided by financing
activities 949,881 51,150 335,639
----------- ----------- -----------
Effect of foreign currency exchange
rate changes 29,513 (7,481) (16,402)
----------- ----------- -----------
Net increase (decrease) in Cash and
Cash equivalents 15,168 (87,819) 49,803
Cash- beginning of period - 102,987 -
----------- ----------- -----------
Cash - end of period 15,168 15,168 49,803
=========== =========== ===========
Supplemental Cash Flow Information
Interest paid - - -
=========== =========== ===========
Income taxes paid - - -
----------- ----------- -----------
The accompanying condensed notes are an integral part
of these unaudited interim consolidated financial
statements
3
ACTIVEIN INC.
(FORMERLY UNLTD VENTURES INCORPORATED)
(A Development Stage Enterprise)
Interim Consolidated Statements of Changes in Stockholders'
Deficiency from inception to November 30, 2010
(Amounts expressed in US Dollars)
Deficit
Preference accumulated Accumulated
Common Stock Stock Additional Deferred during the Other Total
-------------------------------- Paid stock development Comprehensive Stockholders'
Number Amount Number Amount In Capital compensation stage Income Deficiency
of Shares $ of Shares $ $ $ $ $ $
-------------------------------------------------------------------------------------------------------------------------------
Common shares issued
at par on
incorporation
(adjusted)* 4,800,190 480 (458) 22
Issue of Preference
A shares for cash
(adjusted)* 448,908 449 59,442 59,891
Fair value of
warrants issued
for services 57,875 (57,875)
-
Amortization of
deferred stock
compensation 9,646 9,646
Foreign currency
translation 105 105
Net loss (97,376) (97,376)
----------- ----- --------- ------ -------- ---------- ---------- ------ ---------
Balance February
28, 2007 4,800,190 480 448,908 449 116,859 (48,229) (97,376) 105 (27,712)
Issue of Preference
A shares for cash 1,977,952 1,978 261,841 263,819
Amortization of
deferred stock
compensation 25,797 25,797
Foreign currency
translation 5,760 5,760
Net loss (317,436) (317,436)
----------- ----- --------- ------ -------- ---------- ---------- ------ ---------
Balance February
29, 2008 4,800,190 480 2,426,860 2,427 378,700 (22,432) (414,812) 5,865 (49,772)
Issue of Preference
A shares for cash 1,344,075 1,344 177,977 179,321
Amortization of
deferred stock
compensation 22,432 22,432
Fair value of interest
on interest free
loan received 670 670
Foreign currency
translation 44,162 44,162
Net loss (312,255) (312,255)
----------- ----- --------- ------ -------- ---------- ---------- ------ ---------
Balance February
28, 2009 4,800,190 480 3,770,935 3,771 557,347 - (727,067) 50,027 (115,442)
Reverse acquisition
adjustment 8,358,067 836 394,842 395,678
Shares issued as
finder fee 750,000 75 (75)
Foreign currency
translation (12,503) (12,503)
Net loss (297,237) (297,237)
----------- ----- --------- ------ -------- ---------- ---------- ------ ---------
Balance February
28, 2010 13,908,257 1,391 3,770,935 3,771 952,114 - (1,024,304) 37,524 (29,504)
Common stock
subscriptions 51,150 51,150
Foreign currency
translation (9,803) (9,803)
Net loss (161,767) (161,767)
----------- ----- --------- ------ -------- ---------- ---------- ------ ---------
Balance November
30, 2010 13,908,257 1,391 3,770,935 3,771 1,003,264 (1,186,071) 27,721 (149,924)
* In a reverse merger accounted for as a recapitalization, the historical
stockholders' equity of the accounting acquirer (ActiVein Ltd) is
retroactively stated for all periods for the equivalent number of shares
received in the merger.
The accompanying condensed notes are an integral part
of these unaudited interim consolidated financial
statements
4
1. BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements have been
prepared in accordance with the instructions to Form 10-Q and therefore do not
include all information and footnotes necessary for a fair presentation of
financial position, results of operations and cash flows in conformity with U.S.
generally accepted accounting principles (GAAP); however, such information
reflects all adjustments (consisting solely of normal recurring adjustments),
which are, in the opinion of management, necessary for a fair statement of the
results for the interim periods. In the opinion of management, the accompanying
condensed consolidated financial statements reflect all adjustments of a normal
recurring nature considered necessary to fairly state the financial position of
the Company at November 30, 2010 and February 28, 2010, the results of its
operations for the three and nine-month periods ended November 30, 2010 and
November 30, 2009, and its cash flows for the nine-month periods ended November
30, 2010 and November 30, 2009. In addition, some of the Company's statements in
this quarterly report on Form 10-Q may be considered forward-looking and involve
risks and uncertainties that could significantly impact expected results. The
results of operations for the nine-month period ended November 30, 2010 are not
necessarily indicative of results to be expected for the full year.
The Company was incorporated under the laws of the State of Delaware, USA on
January 8, 2007. On April 9, 2009 the Company changed its name to ActiVein, Inc.
In March 2009 the Company acquired 100 % of the outstanding common and
preference shares of ActiVein Ltd., an Israeli corporation. In exchange of all
issued and outstanding common and preference shares of ActiVein Ltd, the
shareholders of ActiVein Ltd. received 4,800,190 shares of the Company's common
stock, In addition, 3,770,935 shares of Series A Preferred stock, and a warrant
which allows the holder to purchase an additional 428,768 Series A Preferred
shares. The warrant was issued in lieu of and to cancel the warrant issued by
ActiVein Ltd. to its warrant holder in financial year 2007 to acquire 809 series
`A" preference shares of ActiVein Ltd.
These Series A Preferred shares are convertible, at the option of the holder of
such shares, into fully paid and non-assessable shares of the Company's. common
stock. The Company had 8,358,067 common shares and Nil preference shares issued
and outstanding prior to the merger. On post acquisition, shareholders of
ActiVein Ltd control 51% of the total issued and outstanding shares of the
Company. The exchange resulted in ActiVein Ltd. becoming a wholly owned
subsidiary of the Company. The Company is a shell company. The acquisition is
accounted for as a reverse merger (recapitalization) with ActiVein Ltd. deemed
to be the accounting acquirer, and the Company as the legal acquirer. The
reverse merger between the Company, a shell corporation as defined in Exchange
Act Rule 12b-2 and ActiVein Ltd., a private development stage entity, is not a
business combination but a capital transaction in substance because a shell is
normally not a business. The accounting is identical to that resulting from a
reverse acquisition, except that no goodwill or other intangible is recorded.
5
1. BASIS OF PRESENTATION (cont'd)
On March 12, 2009 the Company issued 750,000 Common shares as finder's fees in
connection with the acquisition of ActiVein Ltd. 1,006,106 common shares were
reserved as an option pool.
The interim consolidated financial statements include the accounts of ActiVein
Inc. (the "Company"), and its subsidiary ActiVein Ltd. (an Israeli corporation).
All material inter-company accounts and transactions have been eliminated.
2. NATURE OF OPERATIONS AND GOING CONCERN
The Company's subsidiary ActiVein Ltd. is developing a novel intravenous
catheter which will reduce the number of times a hospital patient is stuck with
a needle to withdraw blood samples.
The Company has no source for operating revenue and expects to incur significant
expenses before establishing operating revenue. The Company's future success, is
dependent upon its ability to raise sufficient capital which will be required in
the development and the marketability of the products to be manufactured. There
is also no assurance that funds will be available or the Company will be
profitable. The accompanying financial statements do not reflect any adjustments
that may result if the Company is unable to continue as a going concern.
The Company's consolidated financial statements have been prepared in accordance
with generally accepted accounting principles applicable to a going concern,
which assumes that the Company will be able to meet its obligations and continue
its operations for its next fiscal year. At November 30, 2010, the Company has
not yet achieved profitable operations, had a working capital deficiency of
$152,001 and has accumulated losses of $1,186,071 since inception and expects to
incur further losses in the development of its business, all of which limits the
Company's ability to continue as a going concern. The Company has a need for
additional working capital for the economic production of its products, meet its
ongoing levels of corporate overhead and to discharge its liabilities as they
come due.
In order to finance the continued development, the Company is working towards
raising of appropriate capital in the near future. During the period ended
November 30, 2010, the Company raised $51,150 (net) through subscription of
common shares. While the Company has been successful in securing financings in
the past, there is no assurance that it will be able to do so in the future.
Accordingly, these financial statements do not give effect to adjustments, if
any that would be necessary should the Company be unable to continue as a going
concern The Company has incurred a loss of $161,767 during the nine month period
ended November 30, 2010 primarily due to its research and development
activities. At November 30, 2010, the Company had an accumulated deficit during
the development stage of $1,186,071.
6
3. REVERSE ACQUISITION
In March 2009, the Company acquired 100 % of the outstanding common and
preference shares of ActiVein Ltd. an Israeli Corporation (see note 4 capital
stock). The exchange resulted in the ActiVein Ltd. becoming a wholly owned
subsidiary of ActiVein Inc. Notwithstanding that the Company became the legal
acquirer of ActiVein Ltd., this transaction has been accounted for in these
financial statements as a reverse merger equivalent to the issuance of stock by
ActiVein Ltd. for the net monetary assets of the Company accompanied by a
recapitalization.
The historic shareholders' equity of the accounting acquirer is retroactively
restated for all periods for the equivalent number of shares received in the
merger after giving effect to any difference in par value of the issuer's and
accounting acquirer's stock, with an offset to paid in capital.
4. CAPITAL STOCK
a) Authorized
50,000,000 Common shares, $0.0001 par value
And
10,000,000 Preferred shares, $0.001 par value, issuable in varying
series and par values As of Balance sheet date 4,200,000 Series "A"
Preferred shares, $0.001 par value have been authorized. These
preferred shares are convertible, at the option of the holder of such
shares, at any time after the date of issuance of such shares, into
fully paid and non-assessable shares of the Company's common stock.
Each of the holders of Series `A' Preferred shares shall be entitled
to receive for each series `A' preferred share held, non-cumulative
dividends, as and when dividends are declared by the Board, at the
rate of $0.0106.
b) Year ended February 28, 2010 :
In March 2009, the Company acquired 100 % of the outstanding common
and preference shares of ActiVein Ltd. an Israeli Corporation The
exchange resulted in the ActiVein Ltd. becoming a wholly owned
subsidiary of ActiVein Inc. In accordance with the reverse take-over
of accounting, the capital structure of issued and outstanding common
and preference shares is that of ActiVein Inc.
7
4. CAPITAL STOCK (cont'd)
Number of
Shares Amount
---------- ------
Common Shares:
Issued:
ActiVein Ltd. Common shares (Opening) 9,057 22
Adjustment of reverse take over 4,791,133 458
ActiVein Inc. Common shares 8,358,067 836
Shares issued for finder's fees 750,000 75
------------ --------
Total 13,908,257 1,391
Preference shares:
ActiVein Ltd Preference shares (Opening) 7,115 18
Adjustment of reverse takeover 3,763,820 3,753
--------- -----
Total 3,770,935 3,771
c) Nine month period ended November 30, 2010 :
During the period ended November 30, 2010, the Company received
subscription for $51,150 (net of commission for $3,850), being the
subscription for 275,000 common shares at $0.20 per common share.
5. RELATED PARTY TRANSACTIONS
Nine month period ended November 30, 2010
The Company expensed $ 12,546 (NIS 47,025) being compensation expense for the
CEO of the Company.
Nine month period ended November 30, 2009
The Company expensed $ 49,345 (NIS 194,011) being compensation expense for the
CEO of the Company and $12,000 being compensation expense for a director of the
Company.
8
6. PLANT AND EQUIPMENT
As at As at
November 30, 2010 February 28, 2010
----------------- -----------------
$ $
Cost
----
Computer Equipment 2,471 2,471
Software 5,795 5,795
Lab Equipment 1,417 1,417
Phones 818 664
------- -------
10,501 10,347
Less: Accumulated Depreciation (8,424) (7,745)
Net carrying amount $ 2,077 $ 2,602
------- -------
7. COMMITMENTS
For a one year period following the closing of the reverse acquisition, the
Company was committed to pay US$6,500 per month to a consultant for investor
relations and investment banking services. The Company paid the final payment
for $6,500 during the quarter ended May 31, 2010 and has no further commitment.
8. GOVERNMENT GRANTS
The Company was approved by The Government of Israel for a grant up to 50% of
approved research and product expenditures to a maximum grant of $270,215 (NIS
1,021,653). This grant relates to approved research and development expenditures
to be incurred by the Company during the period June 2009 to May 2010.
9
TABLE OF CONTENTS
Page
----
PROSPECTUS SUMMARY ..................................................
RISK FACTORS ........................................................
DILUTION AND COMPARATIVE SHARE DATA..................................
USE OF PROCEEDS .....................................................
MARKET FOR ACTIVEIN'S COMMON STOCK ..................................
MANAGEMENT'S DISCUSSION AND ANALYSIS
AND PLAN OF OPERATION .............................................
BUSINESS.............................................................
MANAGEMENT ..........................................................
PRINCIPAL SHAREHOLDERS...............................................
OFFERING BY ACTIVEIN ................................................
SELLING SHAREHOLDERS.................................................
DESCRIPTION OF SECURITIES............................................
LEGAL PROCEEDINGS....................................................
INDEMNIFICATION .....................................................
AVAILABLE INFORMATION................................................
FINANCIAL STATEMENTS.................................................
No dealer, salesperson or other person has been authorized to give any
information or to make any representation not contained in this prospectus, and
if given or made, such information or representations must not be relied upon as
having been authorized by ActiVein. This prospectus does not constitute an offer
to sell, or a solicitation of an offer to buy, any of the securities offered in
any jurisdiction to any person to whom it is unlawful to make an offer by means
of this prospectus.
Until _______, 2011 all dealers effecting transactions in the registered
securities, whether or not participating in this distribution, may be required
to deliver a prospectus. This is in addition to the obligation of dealers to
deliver a prospectus when acting as underwriters and with respect to their
unsold allotments or subscriptions.
PART II
Information Not Required in Prospectus
Item 13. Other Expenses of Issuance and Distribution.
The following table show the costs and expenses payable by the Company in
connection with this registration statement.
SEC Filing Fee $ 76
Legal Fees and Expenses 40,000
Accounting Fees and Expenses 20,000
Miscellaneous Expenses 4,924
--------------
TOTAL $65,000
=======
All expenses other than the SEC filing fee are estimated.
Item 14. Indemnification of Officers and Directors
The Delaware Corporation Code provide that the Company may indemnify any
and all of its officers, directors, employees or agents or former officers,
directors, employees or agents, against expenses actually and necessarily
incurred by them, in connection with the defense of any legal proceeding or
threatened legal proceeding, except as to matters in which such persons shall be
determined to not have acted in good faith and in the Company's best interest.
Item 15. Recent Sales of Unregistered Securities.
The following lists all shares issued by the Company since its inception.
Common Stock
Shareholder Name Date Shares Consideration
---------------- ---- ------ -------------
Sheldon Kales 2/8/07 2,500,000 $ 250
Dr. Tally Bodenstein 2/8/07 2,500,000 $ 250
Rakesh Malhotra 5/10/07 500,000 $ 50
Gil, Petar 11/22/07 20,000 $ 3,000
Gil, Luis 11/22/07 20,000 $ 3,000
Gordan, V. Peter 11/22/07 13,333 $ 2,000
Frewer, Mary 11/22/07 6,667 $ 1,000
Frewer, Tim 11/22/07 6,667 $ 1,000
Delure-Savage, Laune-Ann 11/22/07 66,667 $ 10,000
Homes Unlimited/Ian Savage 11/22/07 233,333 $ 35,000
Savage, Cameron 11/22/07 33,333 $ 5,000
Savage, Ian 11/22/07 300,000 $ 45,000
Dadwan, Sukhvinder 11/22/07 12,500 $ 1,875
Dadwan, Paramjeet 11/22/07 12,500 $ 1,875
1
Shareholder Name Date Shares Consideration
---------------- ---- ------ -------------
Rothbart, Dr. Peter 11/22/07 666,667 $100,000
Gareth, Ellis 11/22/07 166,667 $ 25,000
Kellner, Thomas 11/22/07 23,333 $ 3,500
Gergely Agnes 11/22/07 20,000 $ 3,000
Lombarni, Len 11/22/07 10,000 $ 1,500
Calabretta, Ted 11/22/07 100,000 $ 15,000
Wright,Julie 11/22/07 20,000 $ 3,000
Kellner, Kathy 11/22/07 30,000 $ 4,500
Barsony, Tibor 11/22/07 100,000 $ 15,000
Klein, Mark 11/22/07 50,000 $ 7,500
Simon, Michael 11/22/07 100,000 $ 15,000
Simmons, Wendy 11/22/07 5,000 $ 750
Simmons, Norman 11/22/07 10,000 $ 1,500
Grainger, John C. 11/22/07 20,000 $ 3,000
Kim, Philip 11/22/07 83,333 $ 12,500
MacDonald, Jordan 11/22/07 66,000 $ 9,900
Witzu M. 11/22/07 33,333 $ 5,000
Mooney, Matthew 11/22/07 35,000 $ 5,250
Barsony, Rob 11/22/07 25,000 $ 3,750
Hill, Mary-Eileen 11/22/07 10,000 $ 1,500
Caro, Gad 11/22/07 2,000 $ 300
Pelchovitz, Mark 11/22/07 3,000 $ 450
Pelchovitz, Steven 11/22/07 3,000 $ 450
Abrahim, Salman 11/22/07 2,000 $ 300
Herridge, Paula 11/22/07 10,000 $ 1,500
Mclennan, Corinne 11/22/07 108,900 $ 16,335
Emmett, John 11/22/07 233,333 $ 35,000
Wa, Laura 11/22/07 3,153 $ 473
Sandhu, Satinder 11/22/07 6,680 $ 1,002
Sandhu, Amarjit 11/22/07 6,667 $ 1,000
Gill, Manjit 11/22/07 6,667 $ 1,000
Astortno, Johnny 11/22/07 6,667 $ 1,000
Swartz, Stan 11/22/07 10,000 $ 1,500
Sloan, Allen 11/22/07 10,000 $ 1,500
Paskowitz, J.E. 11/22/07 10,000 $ 1,500
Mclennan, Martin 11/22/07 30,000 $ 4,500
Simmons, Mark 11/22/07 66,667 $ 10,000
Orton Clodagh 11/22/07 20,000 $ 3,000
Sussman, Sam 11/22/07 20,000 $ 3,000
Boaz Dor 3/12/09 750,000 Services rendered,
valued at $10,000
Ilan Shalev 3/24/09 944,986 (1)
Yoav Paz 3/24/09 944,986 (1)
Adi Plaschkes 3/24/09 445,198 (1)
2
Shareholder Name Date Shares Consideration
---------------- ---- ------ -------------
Yifat Gurion 3/24/09 567,098 (1)
Ronen Finegold 3/24/09 521,518 (1)
Eftan Investment Consulting Ltd. 3/24/09 377,888 (1)
Chaim Halperin 3/24/09 287,259 (1)
Ami Sheinfeld 3/24/09 287,259 (1)
Ronen Shafir 3/24/09 211,999 (1)
M.M.T.K. Real Estate Ltd. 3/24/09 211,999 (1)
----------
13,908,257
Series A Preferred Stock
Name Date Shares Consideration
---- ---- ------ -------------
Xenia Venture Capital Ltd. 3/24/09 3,770,935 (2)
(1) Shares of common stock in ActiVein Ltd.
(2) Shares of preferred stock in ActiVein Ltd.
The shares listed above were all issued to non-U.S. persons who reside
outside of the United States. The negotiations and agreements relating to the
issuance of these shares were made by the Company's officers (who were non-U.S.
persons) from Canada. The shares are restricted from resale in the public
markets for a period of six months from the date of their issuance. There is no
market for the Company's securities in the United States and none of the
securities have been transferred since their issuance. The Company relied upon
the exemption provided by Rule 901 of the Securities and Exchange Commission
with respect to the sale of these shares.
Item 16. Exhibits and Financial Statement Schedules
The following exhibits are filed with this Registration Statement:
Exhibit
Number Exhibit Name
------ ------------
3.1 Articles of Incorporation, as amended (1)
3.2 Designation of Series A Preferred Stock (1)
3.3 Warrant - Series A Preferred Stock (1)
3.4 Bylaws (1)
4.1 Non-Qualified Stock Option Plan (2)
5 Opinion of Counsel __
3
10.1 Agreement relating to the acquisition of ActiVein Ltd. (2)
10.2 Shareholder Agreement (2)
10.3 Employment Agreement with Adi Plaschkes (2)
21 Subsidiaries (2)
23.1 Consent of Attorneys __
23.2 Consent of Accountants __
(1) Filed with original registration statement.
(2) Filed with Amendment No. 1 to registration statement.
Item 17. Undertakings
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) To include any prospectus required by Section l0 (a)(3) of the
Securities Act:
(ii) To reflect in the prospectus any facts or events which,
individually or together, represent a fundamental change in the information in
the registration statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any deviation
from the low or high end of the estimated maximum offering range may be
reflected in the form of prospectus filed with the Commission pursuant to Rule
424(b) if, in the aggregate, the changes in volume and price represent no more
than a 20% change in the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective registration statement;
and
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities that remain unsold at the termination of the offering.
4
Insofar as indemnification for liabilities arising under the Securities Act
of l933 (the "Act") may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions or otherwise, the
Registrant 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. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question of whether such indemnification by it is against
public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
(4) That, for the purpose of determining liability under the Securities
Act of 1933 to any purchaser:
(i) If the registrant is relying on Rule 430B:
(A) Each prospectus filed by the registrant pursuant to Rule
424(b)(3) shall be deemed to be part of the registration statement as of the
date the filed prospectus was deemed part of and included in the registration
statement; and
(B) Each prospectus required to be filed pursuant to Rule 424(b)(2),
(b)(5), or (b)(7) as part of a registration statement in reliance on Rule 430B
relating to an offering made pursuant to Rule 415(a)(1)(i), (vii), or (x) for
the purpose of providing the information required by section 10(a) of the
Securities Act of 1933 shall be deemed to be part of and included in the
registration statement as of the earlier of the date such form of prospectus is
first used after effectiveness or the date of the first contract of sale of
securities in the offering described in the prospectus. As provided in Rule
430B, for liability purposes of the issuer and any person that is at that date
an underwriter, such date shall be deemed to be a new effective date of the
registration statement relating to the securities in the registration statement
to which that prospectus relates, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof. Provided,
however, that no statement made in a registration statement or prospectus that
is part of the registration statement or made in a document incorporated or
deemed incorporated by reference into the registration statement or prospectus
that is part of the registration statement will, as to a purchaser with a time
of contract of sale prior to such effective date, supersede or modify any
statement that was made in the registration statement or prospectus that was
part of the registration statement or made in any such document immediately
prior to such effective date; or
(ii) If the registrant is subject to Rule 430C, each prospectus filed
pursuant to Rule 424(b) as part of a registration statement relating to an
offering, other than registration statements relying on Rule 430B or other than
prospectuses filed in reliance on Rule 430A, shall be deemed to be part of and
included in the registration statement as of the date it is first used after
effectiveness. Provided, however, that no statement made in a registration
statement or prospectus that is part of the registration statement or made in a
5
document incorporated or deemed incorporated by reference into the registration
statement or prospectus that is part of the registration statement will, as to a
purchaser with a time of contract of sale prior to such first use, supersede or
modify any statement that was made in the registration statement or prospectus
that was part of the registration statement or made in any such document
immediately prior to such date of first use.
(5) That, for the purpose of determining liability of the registrant under
the Securities Act of 1933 to any purchaser in the initial distribution of the
securities:
The undersigned registrant undertakes that in a primary offering of
securities of the undersigned registrant pursuant to this registration
statement, regardless of the underwriting method used to sell the securities to
the purchaser, if the securities are offered or sold to such purchaser bye means
of any of the following communications, the undersigned registrant will be a
seller to the purchaser and will be considered to offer or sell such securities
to such purchaser:
(i) Any preliminary prospectus or prospectus of the undersigned registrant
relating to the offering required to be filed pursuant to Rule 424;
(ii) Any free writing prospectus relating to the offering prepared by or
on behalf of the undersigned registrant or used or referred to by the
undersigned registrant;
(iii) The portion of any other free writing prospectus relating to the
offering containing material information about the undersigned registrant or its
securities provided by or on behalf of the undersigned registrant; and
(iv) Any other communication that is an offer in the offering made by the
undersigned registrant to the purchaser.
6
SIGNATURES
Pursuant to the requirements of the Securities Act of l933, the registrant
has duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the Kiryat Gat, Israel on the 25th
day of March, 2011.
ACTIVEIN, INC.
By:/s/ Adi Plaschkes
-----------------------------
Adi Plaschkes, President
In accordance with the requirements of the Securities Act of l933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated:
Signature Title Date
--------- ----- ----
/s/ Adi Plaschkes
------------------------- Principal Executive, March 25, 2011
Adi Plaschkes Financial and Accounting
Officer
------------------------- Director
Anat Segal
Ronen Finegold
------------------------- Director March 27, 2011
Ronen Finegold
Ilan Shalev
------------------------- Director March 27, 2011
Ilan Shalev
Boaz Dor
------------------------- Director March 24, 2011
Boaz Dor
7
ACTIVEIN, INC.
FORM S-1
AMENDMENT NO. 2
EXHIBITS
