<PAGE> R-1
As filed with the Securities and Exchange Commission on December 7, 2000
Registration No.
------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 2054
FORM SB-2
REGISTRATION STATEMENT
Under
The Securities Act of 1933
Rubicon Medical Corporation
-----------------------
(Name of registrant as specified in its charter)
Delaware 3061 87-0361403
-------- ---- ----------
(State or Jurisdiction of Primary SIC (IRS Employer
incorporation or organization) Identification No.)
2064 West Alexander, Salt Lake City, Utah 84119; (801) 886-9000
---------------------------------------------------------------
(Address, including zip code, and telephone number, including area code of
Small Business Issuer's principal executive offices)
COPY TO:
Richard J. Linder, President/CEO Victor D. Schwarz, Esq.
Rubicon Medical Corporation 2681 Parleys Way, Suite 203
2064 West Alexander Salt Lake City, Utah 84109
Salt Lake City, Utah 84109 Facsimile (801) 463-6085
Telephone: (801) 886-9000
Facsimile: (801) 886-9004
-----------------------------------
(Name, address, including zip code
and telephone number, including area
code, of agent for service)
Approximate date of commencement of proposed sale of the securities to the
public: As soon as practicable after the effective date of this registration
statement.
If 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,
please check the following box: [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, 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
<PAGE> R-2
registration statement number of the earlier effective registration statement
for the same offering: [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box:[ ]
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Proposed Maximum Proposed Maximum
Title of Each Class of Amount to Offering Price Aggregate Amount of
Securities to be Registered Be Registered Per Share(1) Offering Price Registration Fee
<S> <C> <C> <C> <C>
Common Stock offered by Selling
Shareholders 11,508,000 $1.00 $11,508,000 $3,039
Total 11,508,000 $1.00 $11,508,000 $3,039
(1)Estimated solely for purposes of calculating the registration fee. The maximum offering price per share is
based upon anticipated offering price per share of $1.00 pursuant to Rule 457(a), as the Common Stock has never
traded on any market.
</TABLE>
The Registrant hereby amends this Registration Statement on such date or dates
as may be necessary to delay its effective date until the Registrant shall
file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section
8(a), may determine.
<PAGE>
<PAGE> R-3
Table of Contents
Pursuant to Item 502(f) of Regulation S-B
Section Page
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PROSPECTUS SUMMARY 2
Rubicon 2
Contact Information 2
The Offering 3
RISK FACTORS
Our manufacturing operations have not proved
profitable and substantial uncertainties surround
the future profitability of those operations. 3
Without additional funds to complete the
acquisition of Accurate Designs, Inc. and fund
additional medical device research, our ability
to remain operational will be questionable. 3
Purchasers of shares in this offering may
be buying shares at prices higher than
the enterprise value and have trouble
reselling the shares. 3
We have two key employees who have been
responsible for our product development
and the loss of either would have detrimental
effects on our future prospects. 4
Extensive governmental regulations make it costly
for us to move quickly on new opportunities
and limit the work we can pursue. 4
Healthcare regulations on "pass-through"
reimbursements from the HealthCare Finance
Administration (HCFA) may impact our ability
to obtain reimbursements through Medicare on
licensed devices. 5
The Guardian embolization protection system may
not gain regulatory approval in the United
States and/or Europe. 5
FORWARD LOOKING STATEMENTS 5
DIVIDEND POLICY 6
MARKET PRICE OF COMMON STOCK 6
BUSINESS 6
Background 6
Industry overview 7
Contract Manufacturing 7
Equipment Manufacturing 8
Technology Development and Licensing 8
Competition 9
Employees 9
Facilities 10
MANAGEMENT DISCUSSION AND ANALYSIS OF OPERATIONS 10
General 10
Plan of operation 10
Contract Manufacturing 10
Equipment Manufacturing 11
Technology Development and Licensing 11
Liquidity and Capital Resources 12
December 31, 1999 and 1998 12
September 30, 2000 13
Results of Operations 13
December 31, 1999 and 1998 13
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September 30, 2000 14
MANAGEMENT 14
Directors and Executive Officers 14
Executive Compensation 15
PRINCIPAL STOCKHOLDERS 16
CERTAIN TRANSACTIONS 17
SELLING STOCKHOLDERS 17
PLAN OF DISTRIBUTION 18
DESCRIPTION OF SECURITIES 19
Common Stock 19
Preferred Stock 19
2000 Series A Convertible Preferred Stock 19
Transfer Agent 19
LEGAL MATTERS 19
EXPERTS 20
INTEREST OF NAMED EXPERTS AND COUNSEL 20
ADDITIONAL INFORMATION 20
INDEMNIFICATION 20
INDEX TO FINANCIAL STATEMENTS 22
FINANCIAL STATEMENTS F-1
<PAGE>
<PAGE> 1
PRELIMINARY PROSPECTUS SUBJECT TO COMPLETION
--------------------------------------------
Rubicon Medical Corporation
11,508,000 Shares of Common Stock
(par value $.001)
The 11,508,000 shares of common stock, par value $.001 of Rubicon Medical
Corporation, a Delaware corporation are offered by certain selling
stockholders. The expenses of the offering, estimated at $57,039, will be
paid by Rubicon and certain selling stockholders. There is presently no
public market for the shares.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved these securities, or determined if this
Prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
This investment involves a high degree of risk. You should purchase shares
only if you can afford a complete loss of your investment.
Information contained in this prospectus is subject to completion or
amendment. A registration statement relating to these securities has been
filed with the Securities and Exchange Commission. These securities may not
be sold nor may offers to buy be accepted prior to the time the registration
statement becomes effective. This prospectus shall not constitute an offer to
sell or the solicitation of an offer to buy nor shall there be any sale of
these securities in any State in which such offer, solicitation or sale would
be unlawful prior to registration or qualification under the securities laws
of any such State.
The date of this Prospectus is _______, 2000.
<PAGE>
<PAGE> 2
PROSPECTUS SUMMARY
The following is a summary of the information, financial statements and the
notes included in this prospectus.
Rubicon............Rubicon Medical Corporation is a medical products
manufacturing and device development company with three
strategic business units; 1) contract manufacturing, 2)
equipment manufacturing, and 3) technology development and
licensing.
Contact
Information......The corporate offices of Rubicon are located at 2064 West
Alexander, Salt Lake City, Utah 84119; telephone number is
(801) 886-9000.
The Offering:
Securities
Offered..........11,508,000 shares of Common Stock-All by Selling
Stockholders.
Risk Factors......Rubicon has lost money until the second quarter of 2000, and
only recently has had the capital to continue the
development of its products. We are dependent on our
research capabilities to develop new products and as with
any research there is a substantial uncertainty as to the
future economic benefit. We do not have a public market for
our securities and no support from major brokerage houses.
Accordingly, as set forth in more detail, the securities
offered involve a high degree of risk and should not be
purchased by investors who cannot afford the loss of their
entire investment.
Common Stock
Outstanding......48,000,000 shares-no additional shares will be issued by
Rubicon in this offering.
Preferred Stock
Outstanding......163,400 shares of preferred stock are outstanding and a
classified as Series A Convertible Preferred Stock.
<PAGE>
<PAGE> 3
RISK FACTORS
The Common Stock for sale is a speculative investment and very risky.
You should especially consider these risk factors and the information in the
rest of this Prospectus.
Our manufacturing operations have not proved profitable and substantial
uncertainties surround future profitability and our ability to continue in
business.
---------
Our operations are divided into distinct business units. Only one of
these business units has proven profitable at this time. One of the reasons
for the lack of profitability in contract manufacturing and equipment
manufacturing is the nature of the medical device industry, which takes
extensive time and resources to penetrate those markets. We have reached a
point where we now have a facility capable of producing product and services
to sell and have the needed resources to execute our business plan.
Unfortunately, it has taken longer than anticipated to have products and
services ready for the marketplace and there can be no assurance that our
products and services are going to be accepted or that we will be able to sell
enough to be profitable. Purchasers of shares of Rubicon common stock will be
buying shares in an unproven operation with no assurance of future
profitability and limited resources.
Without additional funds to fund manufacturing operations and additional
medical device research, our ability to remain operational will be
questionable.
-------------
Rubicon has recently completed a licensing agreement with Abbott
Laboratories, which provided a cash infusion of $2,000,000. We also raised
$817,000 through the sale of our equity securities. Of this money,
approximately $1,500,000 remains. Except for the 2,000,000 from Abbott,
Rubicon has not produced a profit and none is expected in the next two
quarters. Rubicon's future success will therefore depend on its ability to
raise additional capital and future payments from the licensing agreement with
Abbott. If Abbott were to stop pursuing the commercialization of the products
licensed from Rubicon and cease future payments, our current capital position
would not allow us to continue to expand operation and future solvency of our
business would be in jeopardy.
Purchasers of shares in this offering may be buying shares at prices higher
than the enterprise value and have trouble reselling the shares.
-----------------------------------------------------------
Although this offering does not come within the normal definition of an
initial public offering, there are many similarities that place purchasers of
shares offered pursuant to this Prospectus at particular risk. There is
presently no public market for the shares being offered. The shares sold
pursuant to this Prospectus will be the first shares available to the general
public. This creates a situation where purchasers of the shares offered in
the Prospectus do not have the ability to see how the market views the shares
over time. Additionally, the price of the shares may be affected by the
supply and demand principals far more than the price of securities, which have
an active trading market and have been listed over a period of time.
Purchasers will be buying from a relatively small number of stockholders with
the majority of shares in the hands of only a few selling stockholders. If
larger stockholders do not want to sell some of their position, prices could
increase because of the demand being greater than the available supply of
shares. This is often seen in initial public offerings resulting in the
prices beginning to settle as supply increases. Unlike in the initial public
offering, however, there is no underwriter with expertise to value Rubicon.
<PAGE>
<PAGE> 4
Here, the investor will make his or her own determination of price without the
benefit of an underwriter's assistance.
Shares of Rubicon's common stock also currently do not meet the NASDAQ
listing requirements for the Small Cap(R) Market. Until Rubicon is able to
satisfy NASDAQ's requirements for listing, trading of the shares will be
conducted on the NASD's OTC Bulletin Board, established for securities not
meeting the NASDAQ Small Cap(R) Market listing requirements. Generally,
companies listed on the bulletin board do not have the liquidity ability or
investor following of NASDAQ companies. Consequently, the liquidity of shares
could be impaired. This is not only in the number of securities, which could
be bought and sold, but also potential delays in the timing of transactions,
reduction in security analysts' and news media's coverage of Rubicon resulting
in lower prices for shares than might otherwise be attained.
We have two key employees who have been responsible for our product
development and the loss of either would have detrimental effects on our
future prospects.
----------------------------------------------------------------------------
Richard J. Linder, President/CEO and Harold Pearsall, Vice President of
Operations have been instrumental in the development of our products including
the Guardian Embolization Protection System and RF molding equipment. As a
small company, without extensive training, we do not have employees with the
capabilities to assume either of their roles or who have the technical
knowledge possessed by these individuals. Mr. Linder was responsible for the
development of the Guardian System and subsequent negotiations with Abbott
Laboratories. He has a medical products marketing and production background
that is instrumental in identifying business opportunities for Rubicon. Mr.
Pearsall was the owner of Accurate Designs, prior to its acquisition by
Rubicon, and developed its RF molding equipment. Mr. Pearsall is a recognized
expert in RF molding equipment and manufacturing. To mitigate the risk of
loss, we intend to purchase key man life insurance on both of these
individuals, but the insurance may not cover the long-term downturn in
business from the loss of either gentlemen.
Extensive governmental regulations make it costly for us to move quickly on
new opportunities and limit the work we can pursue.
-----------------------------------------------
The focus of our business is in the medical product field. The nature of
this field requires extensive research and development costs and testing
expenses prior to product being allowed to be used on people. Additionally,
extensive product control measures are required on all products manufactured
for use in the medical industry. As a result of these regulations, the cost
of developing our operations to the point we can now start producing products
has been extensive and drained our limited resources. Outside the medical
tubing and catheter tip markets, we do not anticipate producing the products
we design. Instead our limited resources will require we focus our efforts on
being a design shop and license the end products to other manufacturers and
companies with the ability to pursue human testing and eventual marketing.
This business model will limit our profitability and make it difficult for us
to expand without the efforts of third party large cap company's support of
our designs. Presently, only one of our medical product designs is being
pursued by a large cap company and there is no assurance they will continue to
pursue the commercialization of this product.
<PAGE>
<PAGE> 5
Healthcare regulations on "pass through" reimbursements from the HealthCare
Finance Administration (HCFA) may impact our ability to obtain reimbursements
through Medicare.
-----------------
The HCFA, through Congressional mandate, has limited "pass through"
payments on medical devices to 2.5% of their overall budget. There is a high
budgetary demand and current "pass through" payments may exceed the 2.5%
mandate. This may prevent new and innovative technology accessability to the
elderly who are covered under Medicare and reduce our potential market
opportunities.
The Guardian Embolization Protection System may not gain regulatory approval
in the United States and/or Europe.
--------------------------------
The Guardian embolization protection system has been licensed to Abbott
Laboratories. Abbott has paid the initial $2,000,000 license fee to Rubicon.
Additional license fees and royalties are pending certain milestones including
regulatory approval in Europe and the United States. There is a possibility
that Abbott Laboratories will either not pursue these regulatory approvals or
that the Guardian system cannot obtain these approvals. In either event,
Rubicon may not have the additional working capital necessary to fund new
medical device research and manufacturing operations.
Forward Looking Statements.
This Prospectus contains certain forward looking statements regarding the
plans and objectives of management for future operations, including plans and
objectives relating to Rubicon's future marketing efforts and the future
economic performance of Rubicon. The forward looking statements and
associated risks set forth in this Prospectus include or relate to the ability
of Rubicon to obtain required financing for our future operations, develop new
products, complete the acquisition of additional businesses and commercially
produce and sell our products and services.
The forward-looking statements herein are based on current expectations
involving a number of risks and uncertainties. Such forward-looking
statements are based on the assumptions described in the preceding paragraph.
The foregoing assumptions are based on judgments with respect to, among other
things, future economic, competitive and market conditions, and future
business decisions, which are difficult or impossible to predict accurately
and many of which are beyond Rubicon's control. Accordingly, although Rubicon
believes the assumptions underlying the forward looking statements are
reasonable, any such assumption could prove to be inaccurate and there can be
no assurance that the results contemplated in forward-looking statements will
be realized. In addition, as disclosed elsewhere in the "Risk Factors"
section of this Prospectus, there are a number of other risks inherent in
Rubicon's business and operations which could cause Rubicon's operating
results to vary markedly and adversely from prior results or the results
contemplated by the forward looking statements. Increases in maintenance,
fuel or labor costs, general and administrative expenses or the occurrence of
extraordinary events could cause actual results to vary materially from the
results contemplated by the forward looking statements. Management decisions,
including budgeting, are subjective in many respects. Periodic revisions must
be made to reflect actual conditions and business developments; the impact of
which may cause Rubicon to alter our marketing, capital investment and other
expenditures, which may also materially adversely affect Rubicon's results of
operations. In light of significant uncertainties inherent in the forward
looking information included in this Prospectus, the inclusion of such
information should not be regarded as a representation by Rubicon or any other
person that Rubicon's objectives or plans will be achieved.
<PAGE>
<PAGE> 6
Dividend Policy
Rubicon has not paid dividends and does not anticipate paying cash
dividends in the foreseeable future. Instead Rubicon will use any revenue to
expand operations.
Market Price of Common Stock
Prior to this Offering, there has been no public market for Rubicon's
common stock and there can be no assurance that a significant public market
for the common stock will develop or be sustained after the Offering. Rubicon
will seek a market maker to apply to have Rubicon's common stock included for
quotation on the NASD's Electronic Bulletin Board on the effectiveness of
Rubicon's registration statement under the symbol "RBMC." There can be no
assurance that the market maker's activities will continue, or that an active
trading market for the common stock will be developed or maintained. The
future market price of the common stock may be highly volatile. Rubicon is
registering 11,508,000 shares, which will be the only shares able to be sold
to the public. The shares issued to the shareholders of Rubicon Medical, the
Utah corporation, in relation to the reorganization with Hi-Tech Ventures may
be available for resale under Rule 144 in October 2001. As of November 30,
2000, there were approximately 146 record holders of the Company's common
stock.
Business
Background
----------
Rubicon was formed in December 1996 to pursue the development and
marketing of medical products, devices and services. Originally, Rubicon was
formed as a limited liability company under the laws of the State of Utah. On
March 31, 2000, Rubicon changed from a limited liability company form to a
corporate form. In October 2000, Rubicon completed a merger with Hi-Tech
Ventures, Inc., a Delaware corporation, which resulted in Rubicon's management
taking control of Hi-Tech and Rubicon's shareholders becoming the majority
owners of Hi-Tech.
Prior to its merger with Rubicon, Hi-Tech had no operations and nominal
assets. Hi-Tech's prior business operations had ceased in the early 1990's
and it had not engaged in any meaningful business in almost ten years.
Rubicon was originally formed to be a manufacturer of medical tubing.
From this base, Rubicon has expanded to also produce catheter tips. We have
also purchased Accurate Designs, Inc., a Salt Lake City, Utah based catheter-
tipping company. Accurate Designs not only manufactures the catheter tip but
manufactures the related equipment.
The past two years has been spent on the development of our manufacturing
facilities and locating the right people to run the facilities. We have spent
considerable time and money in developing internal manufacturing and quality
systems to comply with ISO9002, which we received on April 10, 2000. Gaining
ISO9002 certification gives us the necessary quality certification to engage
in contract manufacturing in the tubing and catheter markets. The addition of
Accurate Designs, besides adding manufacturing expertise, gives us another
avenue of business, that of equipment manufacturing.
Rubicon has expanded its operation by leveraging on its medical
engineering capabilities to develop other medical products. One of the
products we have been working on is a Guardian embolization protection system
for use in the neuro-interventional and cardiology markets. The Guardian
project is complete through the design engineering, U.S. and international
patent and in-vitro testing stages. Further development is required to
produce multiple product iterations,
<PAGE>
<PAGE> 7
complete animal testing, and obtain regulatory approval for marketing. We
have licensed this product to Abbott Laboratories who will complete the
further development of the product. We licensed this product to Abbott
Laboratories due to the cost and resources required to pursue product
development throughout the animal testing, regulatory approval or marketing
phases. Presently, we do not think it makes sense for a company our size to
try and take a product through the regulatory approval and marketing phase.
Instead we intend to stay at the design phase and license the product concept
and design to large capital companies such as Abbott Laboratories to complete
the regulatory approval and marketing of these products, which is an extremely
expensive undertaking.
Industry overview
-----------------
Contract Manufacturing
----------------------
Our contract manufacturing operation is focused on the medical tubing and
catheter markets. The medical industry continues to grow in terms of product
demand for medical tubing. The international prospects for medical tubing are
focused primarily in two markets, Europe and Asia. The European markets
typically lead the United States market in device regulatory approvals, and is
therefore an early indicator for new products in the United States. The Asian
market is historically supplied by regional raw material suppliers and is not
a market we think we can enter at this time.
There are various categories of medical tubing including single lumen
commodity PVC and multi-lumen specialty tubing. Commodity tubing used in I.V.
tubes, feeding tubes, and endotracheal tubes is consumed in large quantities.
Specialty tubing used in catheter tubing and other invasive tubes, is
difficult to produce and requires substantial development time.
Throughout the United States, medical OEM's are consuming tubing that
must meet very stringent quality demands. Customer specifications list
tolerances as tight as +/-.001". The nationwide demand for quality is growing
as medical devices are getting smaller and smaller, requiring even more from
tubing vendors. One of the fastest growing tubing markets is for micro bore
and multi-lumen tubing.
Rubicon acquired a 1-1/2" extrusion line and began manufacturing medical
tubing in April 1997. Over the past years, we have acquired additional
equipment to expand our manufacturing capacity and product offerings. We
acquired a 1" extruder in August 1997 to produce co-extruded (two materials in
one tube) tubing, and tipping equipment was purchased in September 1997.
Considerable effort was expended to market our services and technologies in
the medical tubing industry. We have since expanded our capacity by
purchasing a 2-1/2" extrusion line in October 1999. This high output/high
capacity machine can produce roughly 500% more tubing than the original 1-1/2"
extrusion line. The new 2-1/2" line is being used to produce PVC tubing for
high volume large contracts.
Rubicon has recently expanded to compete in the non-sterile catheter and
device manufacturing markets that include radio frequency RF tipping and
molding, assembly, perforating, tubing, component welding, bonding, printing,
and laser marking. A catheter tip is required on all tubing that is inserted
into a blood vessel or orifice of the body. Accordingly, the creation of a
catheter tip requires the end of medical tubing be tapered down to a specified
size from its original blunt end. This process while seeming fairly simple
requires exacting specification and specialized equipment.
<PAGE>
<PAGE> 8
Our ability to produce tubing and catheter tips is important for
prospective medical OEM clientele who are looking for "one stop shopping"
partnerships wherein complex products requiring multiple manufacturing
processes and competencies can be outsourced to a single vendor, thus saving
time and money. Successful requirements for consistent advancement in the
market include compliance with ISO quality requirements, class 100,000 clean-
room manufacturing space, a skilled engineering staff, capital equipment, and
a high percentage of on time delivery.
As we have developed our operation, we have focused on these factors
which make us a one-stop shop in the medical tubing and catheter markets. We
now have the ISO certification, three class 100,000 clean rooms, engineering
staff and the equipment to handle most projects. As we have only recently
received our certification and added the catheter tip manufacturing
capabilities, the acceptance of our products and services in the market place
is still somewhat unknown. However, we are hopeful that our level of
expertise and capabilities will attract the OEM customer.
Equipment Manufacturing
-----------------------
In April 2000, we purchased Accurate Designs, Inc., a manufacturer of
catheter tip machines. We have commenced manufacturing at our facility of the
radio frequency RF tipping equipment, which molds the distal ends of catheters
to form atraumatic tips and shapes to enable endovascular advancement.
The companies who purchase RF tipping equipment are spread throughout
North America (U.S., Canada, and Mexico), Europe, Asia, and the Pacific Rim.
Cath-Tip has clients in North America, France, Belgium, Sweden, and Malaysia.
RF molding processes are in the early stages of rapid growth in the
medical device industry. RF provides a cost effective alternative to
injection molding in many circumstances. For example, RF molding is superior
to injection molding in that it enables faster prototyping of new devices at
lower costs, yields a higher quality product manufactured to tighter
tolerances, and provides a reliable and repeatable method for molding
miniature parts that can be smaller than a human hair. These could not be
manufactured by another means. RF molding equipment is less expensive to
purchase and cheaper to operate and maintain.
The current market for catheter tipping machines is approximately
$20,000,000 annually worldwide. Presently, there are three competing
companies pursuing this market.
Technology Development and Licensing
------------------------------------
Over the past three years, Rubicon has expanded its product offering to
include medical design and engineering. After analyzing the potential
markets, we realized that our engineering capabilities and understanding of
manufacturing processes fit well with the design, or redesign of complex
medical products. This product design market is typically dominated by very
large companies due to the cost of designing and commercialization involved in
medical products. We believe a niche market exists in designing and
engineering these products and then licensing the rights to the products to a
larger company to complete regulatory testing and engage in worldwide
marketing.
Rubicon's intent is to develop and pursue new medical device technologies
and prepare them for commercialization. It is not our objective to build a
costly domestic and international sales force, nor is it to make large capital
<PAGE> 9
expenditures to manufacture and distribute FDA approved finished medical
devices across the world. Our niche is to identify and acquire novel
technologies that
have large market potential, patent and develop the technologies to a logical
end-point, and then create marketing relationships with large medical device
companies to sell the product globally. This strategy enables Rubicon to
participate in large capital markets with smaller capital investments while
securing long-term earnings through residual income.
Rubicon's first major project in the medical design field is the Guardian
embolization protection system. This product is an occlusion balloon exchange
guide wire that may enable angioplasty and stenting to be performed in the
carotid artery for the first time without major embolic complications. In
addition to the carotid market, the guardian system may enable heart bypass
grafts to be treated with fewer major adverse cardiac events. Early studies
from the National Institute of Neurological Disorders and Stroke indicate that
embolization protection could decrease procedural stroke rates from 5-7% to 1-
2%. Studies of saphenous vein graft (heart bypass grafts) angioplasty and
stenting show major adverse cardiac events rates as high as 18% without
embolization protection, and approximately 8% with embolization protection.
The Guardian system is a patented technology for primary use in the
neurointerventional and cardiology markets. The total worldwide
neurointerventional, interventional cardiology and peripheral interventional
radiology markets is growing and exceeds $500,000,000 annually.
Rubicon has entered into a licensing agreement with Abbott Laboratories
for the continued development and marketing of the guardian system. Under the
terms of the licensing agreement, we received $2,000,000 as the first payment
of the licensing fee and will receive additional fees for CE regulatory
approval in Europe and for FDA regulatory approval in the United States.
There is still a lot of work to be completed in bringing this product to
market and we do not anticipate the Guardian system to be ready for
commercialization until 2001 in Europe. Regulatory approvals in the United
States largely depend on the regulatory path chosen by Abbott Laboratories.
This could occur either within the next year if a 510(k) path is chosen, or
within three years if a pre-market approval and investigational device
exemption is selected.
This initial licensing agreement will provide Rubicon with the needed
capital to continue to pursue other products. To this end, Rubicon has
developed a medical advisory board to assist us in analyzing new potential
products in addition to the Guardian system.
Competition
-----------
Rubicon competes in a very crowded field in all of its product offerings
except for RF molding equipment. Most of Rubicon's competitors have been
around longer. There is no single competitor that controls any of our markets
and we do not anticipate that one company will emerge as the dominant company
in our field. The ultimate success of Rubicon will be our ability to deliver
high quality products to the OEM's on time and at reasonable prices.
Employees
---------
Rubicon has 13 employees with 5 engineers, 4 in administration and 4 in
production. Richard J. Linder and Harold Pearsall both have employment
contracts, and Rubicon is working on employment contracts for all engineering
and salaried personnel.
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Facilities
----------
Rubicon leases approximately 13,500 square feet in Salt Lake City, Utah
under the terms of a three-year lease that expires December 31, 2002. Monthly
rent is approximately $5,026. We believe these facilities are large enough to
handle our current needs. At this facility, we have three class 100,000 clean
rooms.
Management Discussion and Analysis of Operations
General
-------
Rubicon Medical Corporation has increased revenues each year since
inception in 1996. Losses from operations have decreased every year in
relation to revenues, and for the nine months ended September 30, 2000
earnings before income tax, depreciation and amortization (EBITDA) exceed
$1,200,000. Losses from operations as a percentage of revenues have decreased
every year since inception. We have seen an increase in revenue resulting
from proceeds of the licensing of our Guardian embolization protection system
of $2,000,000, which was recognized in June 2000.
In reviewing our financial position, we have focused on Rubicon Medical's
operations prior to the merger with Hi-Tech. We have treated the merger as a
reorganization, and we are changing Hi-Tech year-ends to December 31 to match
Rubicon Medical.
We have organized operations into three strategic business units (SBU's);
Contract Manufacturing, Equipment Manufacturing, and Technology Development &
Licensing.
Plan of Operation
-----------------
Contract Manufacturing
----------------------
Rubicon has focused on building long-term specialty and commodity tubing
relationships with high volume medical original equipment manufacturers
(OEM's). In 1996 we focused on primarily custom medical tubing and profiles,
however in 1999 we expanded operations to compete in the local and regional
commodity tubing markets. We anticipate revenue growth to come primarily from
large local contracts where we can provide "dock-to-stock" inventory services
and ship with little or no freight costs. Revenues for custom tubing and
catheters should increase as we provide additional manufacturing services in
the future such as printing, hole punching, assembly, and tipping.
We are focusing on large, long-term manufacturing contracts in our
catheter manufacturing operations. We anticipate high growth opportunities
here as we provide manufacturing services for local and regional OEM's who do
not possess the technical competencies that Rubicon possesses. Rubicon has
been successful in developing a small subcutaneous catheter for an OEM client.
A multi-year contract is being sought as we continue in the development of
this product.
Rubicon anticipates entering into manufacturing agreements for catheter
development and assembly, tubing, and RF tipping. We currently have several
clients with whom we are in the product development stage. We will also focus
on vertical integration where sensible and on offering more complete services
and manufacturing options to our clients. Logical expansion into hole
punching and
<PAGE> 11
drilling, printing, insert molding, assembly, and other related services will
take place in the upcoming years. Additionally, we plan on growing through
acquisitions of complimentary organizations that possess competent management
and have substantial market penetration. Criteria for acquiring a company
include earnings, market share, technology advancement, intellectual property
and institutional knowledge, complimentary products and markets, managerial
expertise, and high growth opportunities.
Equipment Manufacturing
-----------------------
The Accurate Designs acquisition in April 2000 has enabled us to
manufacture new products. It has also provided a radio-frequency RF induction
heat catheter molding equipment line that we will be expanding in the future.
Mr. Harold Pearsall, the president of Accurate Designs, was named our Vice
President of Operations and is currently overseeing the Contract Manufacturing
and Equipment Manufacturing SBU's.
Our RF molding equipment is unique in the market and we anticipate growth
in the equipment-manufacturing unit. However, advertising and branding are
important as we move forward. The international market for RF equipment is as
large as the U.S. markets, and therefore we are engaging in on-line commerce
and advertising as a means to penetrate this market to reduce the costs of
international marketing and sales. We anticipate using trade shows and
conferences to introduce our RF molding equipment and showcase our technology
benefits.
We are currently working to develop and brand our RF Tipping equipment.
Substantial effort is taking place to prepare a cohesive marketing effort with
an effective advertising and sales campaign. Moreover, we are working on
making additional advancements in equipment design and functionality. We plan
on expending resources to accomplish these objectives in the sales and
marketing area and in research and development.
The RF markets are demanding smaller and smaller part manufacturing
options
as medical device miniaturization is becoming essential in the minimally
invasive and endovascular markets. Current injection molding technologies
will not have the ability to meet these demands. Injection molding lacks the
control and precise tolerancing that RF molding can provide. Tool design and
tool making will become important as our expectations of tooling vendor's
increase. We are presently contemplating the timing and costs of an internal
tool-making capability. We anticipate purchasing tool-making equipment and
installing it in our facility, which would require additional human resources,
or developing strategic alliances with tool vendors either through equity
investments or acquisition.
Technology Development & Licensing
----------------------------------
Rubicon's objective is to expand into new medical device technologies for
commercialization. We will act as an intellectual property clearinghouse
where new devices are developed, tested, and brought to design freezes
preparatory for use in humans. Once the technology reaches design freeze,
Rubicon will have previously licensed or be concurrently licensing the product
to an FDA registered medical device company who will market the device
nationally and internationally. We will not market a device to physicians
because we are not FDA registered, and currently have no plans to seek FDA
registration.
Rubicon has been developing the Guardian embolization protection system
since 1998 when we acquired the technology through a worldwide
<PAGE> 12
licensing agreement with the University of Southern California (USC).
We subsequently licensed this product to Abbott Laboratories. The
Guardian license allows for three milestone payments; $2,000,000 which was
recognized in June 2000, and two larger future payments for regulatory
approvals in the United States and Europe. The license also establishes
royalty payments on sales of the Guardian system in the United States, Europe,
Japan, Canada, Australia, and Hong Kong.
Rubicon is presently engaged in the development of several new
technologies in the interventional and minimally invasive endovascular
markets. These devices are similar in market size to that of the Guardian
system and have the potential to generate income through license fees and
royalties. Our ability to develop these devices is based on our capacity to
fund design engineering, prototype manufacturing, pre-market testing, and
medical research. Therefore, we will need to acquire additional engineering
resources and develop a research & development laboratory to develop and test
new devices. We have established a medical advisory board, which consists of
some of the most well known physicians in their field. We will meet with them
regularly and they will assist in performing clinical analysis and testing
when necessary.
We are focusing on growth in each business unit. However, we feel it is
important to have a carefully thought out plan that reflects the highest
return on investment. Fund raising will be a necessity in the upcoming year.
We do anticipate with high probability that two milestone payments will be
received within the next two years for the Guardian system. However, we
cannot move forward with our plans for expansion without concrete sources of
funding. We will likely engage in raising additional funds during the first
quarter of 2001.
Liquidity and Capital Resources
-------------------------------
December 31, 1999 and 1998
--------------------------
Financially, Rubicon has experienced its best times since its formation
in 1996. Prior to the year 2000, our operations were not profitable. For the
years ending December 31, 1999 and 1998, our pre-tax losses were $407,904 and
$619,154 respectively. All available funds were used for the development of
our product and work on our facilities to allow us to qualify to manufacture
medical products.
The development of our products and construction of facilities took
longer than anticipated and drained our resources substantially. At the end
of December 31, 1999, our future ability to manufacture product was in serious
doubt. Fortunately, we were able to raise additional capital and to complete
the licensing agreement with Abbott Laboratories which provided us with
operating capital to continue in business.
Since the end of December 1999, we completed the work on our facilities
and received the necessary ISO certification which will allow us to
aggressively pursue further manufacturing contracts. We believe future
revenue will continue to increase and that our current capital resources are
sufficient to meet ongoing needs, except for the payment of any amount owed
under the Accurate Design contract. We do not intend to use any of our
current capital on the Accurate Design contract and will rely on future
revenue and/or seek to raise additional capital to pay for it. If we cannot
raise additional capital and revenue does not increase, we may forfeit the
stock pledged as collateral instead of paying the amounts due with current
capital. Our first payment has been deferred to January 17, 2001.
<PAGE> 13
September 30, 2000 and 1999
---------------------------
For the nine months ended September 30, 2000, we had profits that left
Rubicon with current assets of $2,003,529 compared with current liabilities of
$1,408,214, long-term debt of $1,510,096 and total equity of $1,741,530. This
represents an increase in current assets of $1,946,317 from December 31, 1999,
when current assets were $57,212. The largest increase from December 31, 1999
was in cash, which increased to $1,716,755. The increase in cash was a result
of net profits for the nine months ended September 30, 2000 and the selling of
preferred stock during this period of $817,000.
In April, 2000, Rubicon acquired the assets of Accurate Designs, Inc., a
Utah Corporation, for $250,000 in cash at closing, $750,000 in notes payable
in three semi-annual payments of $250,000 each, and restricted Rubicon shares
payable in April, 2001 with a value of $1,000,000 based on fifty percent of
the bid price on the date of transfer. The notes payable of $750,000 as of
September 30, 2000, are characterized in the balance sheet as current
liabilities. The shares payable of $1,000,000 are characterized in the
balance sheet as a long-term liability.
With a working capital surplus of $595,315, we do not anticipate any
problems with liquidity in the upcoming year to fund operations. We also
anticipate revenues to increase in 2001 resulting in additional cash to fund
operations and expansion. However, we do need additional funds to make
payments pursuant to the Accurate Designs, Inc. acquisition agreement. If
these funds cannot be obtained either through increases in revenues from
contract manufacturing and equipment manufacturing or license fee revenues in
proceeds from the Guardian system, then shares that have been used to
collateralize the three future cash payments to Accurate will be forfeited.
At the request of Abbott Laboratories, a separate development company
required by the licensing agreement was created. This development company
will pay the future development cost of the Guardian system. Accordingly,
this will offset overhead expenses associated with future Guardian system
development through second quarter of 2001. Guardian expenses beyond the
second quarter of 2001 will be funded entirely by Abbott Laboratories.
Rubicon ceased to bear development expenses for the Guardian system in
November, 2000.
Results of Operation
--------------------
December 31, 1999 and 1998
--------------------------
The years ended December 31, 1999, and 1998,were development years for us
as we completed our facilities and refined our manufacturing operations.
Accordingly, revenue for those years was limited with only $205,119 and
$128,008 in revenue for 1999 and 1998 respectively. This limited revenue
resulted in a loss of $407,905 and $619,153 for the years ended December 31,
1999, and 1998, respectively.
The major expense items came from cost of goods sold which was $177,172
and $137,950 in 1999 and 1998, respectively. This represented approximately
86% and 107% of revenue for 1999 and 1998. As we have continued to refine our
operations and the volume of orders increase, we anticipate these percentages
of revenue to decrease. They were particularly high during this time do to
the fixed cost being allocated to cost of goods sold. General and
administrative expenses also declined approximately $169,000 over this period
as we became more efficient.
<PAGE>
<PAGE> 14
September 30, 2000 and 1999
---------------------------
For the nine months ending September 30, 2000, revenue was $2,338,229 and
net income after tax was $690,458. Revenue and net income increases were
associated with the licensing of the Guardian embolization protection system
and an initial payment of $2,000,000, which was recorded in the 2nd quarter,
2000. Presently, future payments for the guardian system are uncertain and
tied to events outside of our control. Accordingly, we have not budgeted
based on any future payments.
Excluding the Guardian system, revenue increased to $338,229 on other
products from $203,191 from a year earlier. This increase is the result of
our ability with ISO certification to bid on more projects and the addition of
a catheter operation. Expenses as a cost of sales increased substantially
with the additional work to $277,295 from $174,274; however, the percentage of
cost of goods sold as compared to revenue declined from approximately 86% to
approximately 82% as we were able to start spreading out our fixed costs and
improve operating efficiencies. We anticipate this trend will continue.
General and administrative expenses did increase substantially to $865,354
because of additional research and development costs associated with the
Guardian system, new product development and a license fee payment of $150,000
to USC.
Management
Directors and Executive Officers
--------------------------------
The members of the Board of Directors of Rubicon serve until the next
annual meeting of stockholders, or until their successors have been elected.
The officers serve at the pleasure of the Board of Directors. All directors
have been directors of Rubicon Medical, Inc., the Utah corporation since 1996
and upon the acquisition by Rubicon Medical Corporation, the Delaware
corporation, became directors of the Delaware corporation as well. The
following are the directors and executive officers of Rubicon.
Name Age Position Held Position Since
---- -- -------- -------------------
Richard J. Linder 31 President, Chief Executive
Officer, Director 2000
David B. Berger 46 Chairman of the Board,
Director 2000
Dennis M. Nasella 48 Director, Chief Financial
Officer, Secretary 2000
Richard J. Linder is the president of Rubicon Medical Corporation. Mr.
Linder was the co-founder of Rubicon Medical Corporation along with David B.
Berger in 1997. Mr. Linder has extensive experience in the medical products
industry. He has additional experience in the industrial and automotive
manufacturing industry, consulting, human resource management and organization
development. Mr. Linder worked for Fidelity Investments, Merit Medical
Systems, Inc. as Assistant Director of Organization Development and Allied
Signal as Director of Human Resources and Organization Development for Utah
manufacturing facilities. Mr. Linder attended the University of Utah and
Brigham Young University majoring in behavioral science and business
administration.
<PAGE> 15
David B. Berger is employed by E.B. Berger, Inc., a Utah based specialty
subcontractor construction company and co-founded Rubicon Medical Corporation.
Mr. Berger received his B.S. in Business Administration from Weber State
University and joined E.B. Berger, Inc. as a Project Manager after graduation.
He was promoted to Department Director, Chief Financial Officer, and finally
President and Chief Executive Officer of E.B. Berger, Inc. Mr. Berger has
over 24 years management experience in various aspects of construction
management. He has additional experience in real estate development,
industrial manufacturing, parts and components distribution, and medical
device manufacturing. Mr. Berger has been instrumental in building E.B.
Berger, Inc. to it's current level of over 125 employees and has increased
shareholder value considerably during his tenure. Mr. Berger has participated
as a member of the board of directors of several companies and trade
associations. He was responsible for the development of Quest Plan 2000, a
management and corporate development initiative that streamlined operations
and improved worker efficiency.
Dennis M. Nasella, CPA, received his B.S. in Business Administration and
Finance from California Western University and began his career with Main
LaFrentz & Company, CPA's where he was working on large institutional bank
audit engagements. He joined JB's Restaurants, Inc. as Corporate Controller
and managed all aspects of accounting, human resources, and audit functions.
Mr. Nasella later formed Nasella, Plummer and Associates, CPA's with a
customer base of over 250 companies and individuals. He then joined E.B.
Berger, Inc. in 1993 as Chief Financial Officer and later as an officer of the
company, and assumed responsibility for all areas of accounting, banking
relations, finance, and outside audit contract and coordination. He has over
25 years experience in finance, accounting and financial audit work, most as a
senior manager.
Executive Compensation
----------------------
The following tables set forth certain summary information concerning the
compensation paid or accrued for each of Rubicon's last three completed fiscal
years to Rubicon or its principal subsidiaries chief executive officer and
each of its other executive officers that received compensation in excess of
$100,000 during such period (as determined at December 1999, the end of
Rubicon's last completed fiscal year):
Summary Compensation Table
--------------------------
<TABLE>
<CAPTION>
Long Term Compensation
----------------------
Annual Compensation Awards Payouts
------------------- ------ -------
Other Restricted
Name and Annual Stock Options LTIP All Other
Principal Position Year Salary Bonus ($) Compensation Awards /SARs Payout Compensation
------------------ ---- ------ -------- ------------ ------ ----- ------ -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Richard Linder 2000 $74,123 $20,000 $15,279 - - - -
1999 $70,008 $ 1,000 $12,315 - - -
1998 $70,008 $ 3,000 $ 2,190 - - - -
</TABLE>
At the fiscal year ends, Hi-Tech sole officer, Eugene Gronning, had
received no compensation. The numbers provided are for Rubicon, prior to the
merger, as they provide the relevant information for the combined entities
going forward. Richard Linder is the presdient and CEO of Rubicon. Mr.
Linder's other compensation in 1998 consisted of $2,190 as a matching 401(k)
<PAGE>
<PAGE> 16
contribution and $1,500 for car allowances. In 1999, Mr. Linder received
$12,315 in car allowances and in 2000 he has received $14,895 in car
allowances and $384 in 401(k) contributions. With the acquisition of Accurate
Designs, Harold Pearsall will also be receiving annual compensation of
$100,000.
Although not executives, the Company has entered into agreements with our
medical advisory board to pay a total of $240,000, payable in shares of our
common stock.
Principal Stockholders
The following table sets forth information relating to the beneficial
ownership of Rubicon's Common Stock as of the date of this Prospectus by each
person known by Rubicon to be the beneficial owner of more than 5% of the
outstanding shares of Common Stock and each of Rubicon's directors and
executive officers. The Percentage After Offering assumes the sale of all
Shares.
Name and Address of Percentage Percentage
Principal Stockholders: (1) Common Stock Before Offering After Offering
---------------------------- ------------ --------------- --------------
Berger Family Enterprises, FLP (D) 29,520,000 61.5% 61.5%
218 West 12650 South
Draper, Utah 84020
Smith Consulting Services, Inc.(D) 3,930,000 8.2% --
455 Est 500 South, Suite 201
Salt Lake City, Utah 84111
Richard J. Linder (D) 2,880,000 6.0% 6.0%
2064 West Alexander Street
Salt Lake City, Utah 84119
Officers and Directors:
----------------------------
David B. Berger (D) 29,520,000 61.5% 61.5%
Richard J. Linder (D) ------See Above-------
Dennis M. Nasella 150,000 0.3% 0.3
--------- ------ ------
All officers and directors
as a group (3 persons) 32,400,000 67.5% 67.5%
========== ====== ======
Unless otherwise noted below, Rubicon believes that all persons named in
the table have sole voting and investment power with respect to all shares of
Common Stock beneficially owned by them. For purposes hereof, a person is
deemed to be the beneficial owner of securities that can be acquired by such
person within 60 days from the date hereof upon the exercise of warrants or
options or the conversion of convertible securities. Each beneficial owner's
percentage ownership is determined by assuming that any warrants, options or
convertible securities that are held by such person (but not those held by any
other person) and which are exercisable within 60 days from the date hereof,
have been exercised. Those shares owned directly are indicated by a (D) and
those shares owned indirectly are indicated by an (I). Unless otherwise
noted, shares are deemed to be owned directly. David Berger controls Berger
Family Enterprise, FLP, which is a partnership for his family. Dennis Nasella
purchased $75,000 of preferred stock in 2000. These shares are convertible at
50% of the Company's market price. The table assumes a conversion at fifty
cents. Mr. Nasella owns no shares of common stock.
<PAGE>
<PAGE> 17
Certain Transactions
Rubicon's agreement with Abbott Laboratories required a separate
corporation be used for the future development costs associated with the
Guardian system.
Accordingly, a separate corporation was created with Dennis Nasella as its
owner. The entire funds placed in it by Abbott Laboratories will be paid to
only the party doing future development work on the Guardian system. Some of
these funds will be paid to Rubicon but we anticipate the majority of these
funds being paid back to Abbott Laboratories as it proceeds with the
development and testing of the Guardian system.
Selling Stockholders
The shares of Common Stock of Rubicon offered by the Selling Stockholders
will be offered at market prices, as reflected on the National Association of
Securities Dealers Electronic Bulletin Board. It is anticipated that
registered broker-dealers will be allowed the commissions, which are usual and
customary in open market transactions. There are no other arrangements or
understandings with respect to the distribution of the Common Stock. Except
as noted, the Selling Stockholders do not own any Common Stock except as
registered hereby and will own no shares after the completion of the offering.
The relationship, if any, between Rubicon and any Selling Stockholder is set
forth below.
Shares Beneficially Percentage
Name and Address Owned Total Shares
---------------- ------------------ ------------
Smith Consulting Services, Inc. 3,930,000 8.2%
455 East 500 South, Suite 201
Salt Lake City, Utah 84111
Alliance Consulting, Inc. 1,508,000 3.1
935 East Northcliff Drive
Salt Lake City, Utah 84103
Sunrise Financial, Inc. 1,500,000 3.1
68 South Main, Suite 600
Salt Lake City, Utah 84101
Angela Torp 900,000 1.9
4819 Shallow Creek Drive
Kennesaw, Georgia 30144
Atomic Capitol Corp. 900,000 1.9
4819 Shallow Creek Drive
Kennesaw, Georgia 30144
Banyon Investment Co. 800,000 1.7
1247 Moyle Drive
Alpine, Utah 84004
Blackhawk Properties 800,000 1.7
440 East 400 South
Salt Lake City, Utah 84111
Sandra Stevens 600,000 1.3
749 East 200 North
Alpine, Utah 84004
Miscellaneous Shareholders 570,000 1.2
----------
Total 11,508,000 24.0
==========
<PAGE>
<PAGE> 18
Smith Consulting Services has provided consulting work for Rubicon and
has been paid with the shares of stock being registered. Some of the
miscellaneous shareholders, which are those shareholders holding less than 1%
of the shares of common stock have performed consulting work for Rubicon.
Plan of Distribution
Rubicon has applied to have its shares of common stock registered on the
NASD's Electronic Bulletin Board. Rubicon anticipates once the shares are
trading on the Electronic Bulletin Board the selling stockholders will sell
their shares directly into any market created. The prices the selling
stockholders will receive will be determined by the market conditions. The
Shares may be sold by the selling stockholders, as the case may be, from time
to time, in one or more transactions. Rubicon does not intend to enter into
any arrangements with any securities dealers concerning solicitation of offers
to purchase the shares.
Commissions and discounts paid in connection with the sale of the shares
by the selling stockholders will be determined through negotiations between
them and the broker-dealers through or to which the securities are to be sold
and may vary, depending on the broker-dealers fee schedule, the size of the
transaction and other factors. The separate costs of the selling stockholders
will be borne by them. The selling stockholders and any broker-broker dealer
or agent that participates with the selling stockholders in the sale of the
shares by them may be deemed an "underwriter" within the meaning of the
Securities Act, and any commissions or discounts received by them and any
profits on the resale of shares purchased by them may be deemed to be
underwriting commissions under the Securities Act.
Rubicon will bear all costs of the offering in registering the shares but
will bear no selling expense cost. Rubicon will use its best efforts to update
the registration statement and maintain its effectiveness for 120 days.
Description of Securities
Common Stock
------------
Rubicon's Articles of Incorporation authorizes the issuance of
100,000,000 shares of common stock, $.001 par value per share, of which
48,000,000 shares were outstanding as of November 29, 2000. Rubicon has no
plans to sell additional shares of common stock at this time, but has the
right to do so without shareholder approval. Holders of shares of common
stock are entitled to one vote per share on all matters to be voted on by the
stockholders. Holders of common stock have no cumulative voting rights.
Holders of shares of common stock are entitled to share ratably in dividends,
if any, as may be declared, from time to time by the Board of Directors in its
discretion, from funds legally available therefore. In the event of a
liquidation, dissolution or winding up of Rubicon, the holders of shares of
common stock are entitled to share pro rata all assets remaining after payment
in full of all liabilities and the liquidation preference to holders of
preferred stock, if any. Holders of common stock have no preemptive rights to
purchase common stock. There are no conversion rights or redemption or
sinking fund provisions with respect to the common stock. All of the
outstanding shares of common stock are, and the shares of common stock will
be, when issued and delivered, fully paid and non-assessable.
Preferred Stock
---------------
Rubicon's Articles of Incorporation authorize the issuance of 5,000,000
shares of preferred stock, $.001 par value, of which 163,400 shares of
preferred stock are outstanding, designated as the 2000 Series A Convertible
Preferred Stock.
<PAGE>
<PAGE> 19
Rubicon's Board of Directors has authority, without action by the
shareholders, to issue all or any portion of the authorized but unissued
preferred stock in one or more series and to determine the voting rights,
preferences as to dividends and liquidation, conversion rights, and other
rights
of such series. Rubicon considers it desirable to have preferred stock
available to provide increased flexibility in structuring possible future
acquisitions and financing and in meeting corporate needs which may arise. If
opportunities arise that would make desirable the issuance of preferred stock
through either public offering or private placements, the provisions for
preferred stock in Rubicon's Articles of Incorporation would avoid the
possible delay and expense of a shareholder's meeting, except as may be
required by law or regulatory authorities. Issuance of the preferred stock
could result, however, in a series of securities outstanding that will have
certain preferences with respect to dividends and liquidation over the common
stock, which would result in dilution of the income per share and net book
value of the common stock. Issuance of additional Common Stock pursuant to any
conversion right which may be attached to the terms of any series of Preferred
Stock may also result in dilution of the net income per share and the net book
value of the Common Stock. The specific terms of any series of Preferred Stock
will depend primarily on market conditions, terms of a proposed acquisition or
financing, and other factors existing at the time of issuance. Therefore, it
is not possible at this time to determine in what respect a particular series
of Preferred Stock will be superior to Rubicon's Common Stock or any other
series of Preferred Stock which Rubicon may issue. The Board of Directors may
issue additional preferred stock in future financing, but has no current plans
to do so at this time.
The issuance of preferred stock could have the effect of making it more
difficult for a third party to acquire a majority of the outstanding voting
stock of Rubicon.
2000 Series A Convertible Preferred Stock
-----------------------------------------
The 2000 Series A Convertible Preferred Stock is convertible into shares
of common stock any time within two years from its date of issuance at the
rate of fifty percent of the market price on the date of conversion. It also
has a liquidation preference equal to $5.00 per share of preferred stock and
has a fixed dividend of twelve percent of $5.00 per share. The dividend is
only payable if and when declared by the board of directors. The dividend is
not commutative. The Series A Convertible Preferred Stock is redeemable by
Rubicon upon attaining three market makers and is redeemable at one hundred
ten percent of the original purchase price plus any unpaid dividends.
Rubicon intends to furnish holders of its common and preferred stock
annual reports containing audited financial statements and to make public
quarterly reports containing unaudited financial information.
Transfer Agent
--------------
The transfer agent for the Common Stock is Colonial Stock Transfer, 455
East 400 South, Suite 100, Salt Lake City, Utah 84111, and its telephone
number is (801) 355-5740.
Legal Matters
The legality of the Shares offered hereby will be passed upon for Rubicon
by Victor D. Schwarz, LLC.
<PAGE>
<PAGE> 20
Experts
The audited financial statements included in this Prospectus of Rubicon
Medical Corporation as of December 31, 1999, and 1998, and of Hi-Tech
Ventures, Inc. as of September 30, 2000, and 1999, have been audited by HJ and
Associates, LLC, independent certified public accountants, to the extent and
for the periods
set forth in their report thereon and are included in reliance upon such
report given upon the authority of such firm as experts in accounting and
auditing.
Interest of Named Experts
The legality of the shares is being passed on by Victor D. Schwarz who
received securities in Rubicon as payment of past legal fees.
Additional Information
Rubicon has filed a Registration Statement under the Securities Act with
respect to the securities offered hereby with the Securities and Exchange
Commission. This Prospectus, which is a part of the Registration Statement,
does not contain all of the information contained in the Registration
Statement and the exhibits and schedules thereto. Certain items are omitted
in accordance with the rules and regulations of the Commission. For further
information with respect to Rubicon and the securities offered hereby,
reference is made to the Registration Statement, including all exhibits and
schedules thereto, which may be inspected and copied at the public reference
facilities maintained by the Commission at 450 Fifth Street, N.W., Room 1024,
Washington, D.C. 20549, and at its Regional Offices located at 7 World Trade
Center, New York, New York 10048, and at Citicorp Center, 500 West Madison
Street, Suite 1400, Chicago, Illinois 60661 at prescribed rates during regular
business hours. Statements contained in this Prospectus as to the contents of
any contract or other document are not necessarily complete, and in each
instance reference is made to the copy of such contract or document filed as
an exhibit to the Registration Statement, each such statement being qualified
in its entirety by such reference. Rubicon will provide, without charge upon
oral or written request of any person, a copy of any information incorporated
by reference herein. Such request should be directed to Rubicon at 2064 West
Alexander, Salt Lake City, Utah 84119, telephone (801) 886-9900.
Upon effectiveness of the Registration Statement Rubicon will be required
to file reports and other information with the Commission. All such reports
and other information may be inspected and copied at the Commission's public
reference facilities described above. The Commission maintains a web site
that contains reports, proxy and information statements and other information
regarding issuers that file electronically with the Commission. The address
of such site is http://www.sec.gov. In addition, Rubicon intends to make
available to its shareholders annual reports, including audited financial
statements and such other reports as Rubicon may determine.
Indemnification
Rubicon has adopted provisions in its bylaws that limit the liability of
its directors and provide for indemnification of its directors to the full
extent permitted under the Delaware General Corporation Law. Under Rubicon's
bylaws, and as permitted under the Delaware General Corporation Law, directors
are not liable to Rubicon or its stockholders for monetary damages arising
from a breach of their fiduciary duty of care as directors. Such provisions do
not, however, relieve liability for breach of a director's duty of loyalty to
Rubicon or its stockholders, liability for acts or omissions not in good faith
or involving intentional misconduct or knowing violations of law, liability
for transactions in which the director derived an improper personal benefit or
liability for the
<PAGE> 21
payment of a dividend in violation of Delaware law. Further, the provisions do
not relieve a director's liability for violation of, or otherwise relieve
Rubicon or its directors from the necessity of complying with, federal or
state securities laws or affect the availability of equitable remedies such as
injunctive relief or rescission.
At present, there is no pending litigation or proceeding involving a
director, officer, employee or agent of Rubicon where indemnification will be
required or permitted. Rubicon is not aware of any threatened litigation or
proceeding that may result in a claim for indemnification by any director or
officer.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 (the "Act") may be permitted to directors, officers and
controlling persons of Rubicon pursuant to the foregoing provisions, or
otherwise, Rubicon 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 Rubicon of expenses incurred or paid by a director,
officer or controlling person of Rubicon 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, Rubicon
will, unless in the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public policy as
expressed in the Securities Act and will be governed by the final adjudication
of such issue.
<PAGE>
<PAGE> 22
INDEX TO FINANCIAL STATEMENTS
HISTORICAL FINANCIAL INFORMATION OF RUBICON MEDICAL, INC.:
YEARS ENDED DECEMBER 31, 1999 AND 1998
PAGE
----
INDEPENDENT AUDITOR'S REPORT F-1
Balance Sheets F-2
Statements of Operations F-3
Statements of Member's Equity F-5
Statements of Cash Flows F-6
Notes to Financial Statements F-7
PERIOD ENDED SEPTEMBER 30, 2000 (UNAUDITED)
Balance Sheets F-12
Statements of Operations F-14
Statement of Stockholder's and Members' Equity F-15
Statement of Cash Flows F-16
Notes to Financial Statements F-17
HISTORICAL FINANCIAL INFORMATION OF HI-TECH VENTURES, INC.
(Formally Rubicon Medical Corporation)
YEARS ENDED SEPTEMBER 30, 2000
INDEPENDENT AUDITOR'S REPORT F-18
Balance Sheets F-19
Statements of Operations F-20
Statements of Stockholders Equity (Deficit) F-21
Statements of Cash Flows F-22
Notes to Financial Statements F-23
PRO FORMA FINANCIAL STATEMENTS - RUBICON MEDICAL CORPORATION
Pro Forma Consolidated Balance Sheet - SEPTEMBER 30, 2000
(Unaudited) F-32
Pro Forma Consolidated Statement of Income - SEPTEMBER 30, 2000
(Unaudited) F-34
Pro Forma Consolidated Statement of Income - DECEMBER 31, 1999
(Unaudited) F-35
Pro Forma Consolidated Notes to Financial Statements F-36
<PAGE>
<PAGE> F-1
INDEPENDENT AUDITORS' REPORT
To the Shareholders
Rubicon Medical, L.C.
Draper, Utah
We have audited the accompanying balance sheets of Rubicon Medical, L.C. as of
December 31, 1999 and 1998, and the related statements of operations, members'
equity, and cash flows for the years then ended. These financial statements
are the responsibility of the Company's management. Our responsibility is to
express an opinion on these financial statements based on our audit.
We have conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit 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 audit provides a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly in
all material respects, the financial position of Rubicon Medical, L.C. as of
December 31, 1999 and 1998, and the results of its operations and its cash
flows for the years then ended in conformity with generally accepted
accounting principles.
The accompanying financial statements have been prepared assuming that Rubicon
Medical, L.C. will continue as a going concern. As discussed in Note 2 to the
financial statements, certain conditions raise substantial doubt about the
Company's ability to continue as a going concern. Management's plans
concerning these matters are also discussed in Note 2. The financial
statements do not include any adjustments that might result from the outcome
of this uncertainty.
HJ & Associates, LLC
Salt Lake City, Utah
May 1, 2000
<PAGE>
<PAGE> F-2
RUBICON MEDICAL, L.C.
Balance Sheets
ASSETS
------
December 31,
------------
1999 1998
---- ----
CURRENT ASSETS
Cash and cash equivalents $ 300 $ 300
Accounts receivable, net of
allowance for doubtful
accounts of $8,500 and $1,893,
respectively 14,513 38,151
Inventories 37,519 36,529
Prepaid expenses 4,880 4,880
-------- -------
Total Current Assets 57,212 79,860
-------- -------
PROPERTY AND EQUIPMENT, NET (Note 3) 391,030 446,265
-------- --------
OTHER ASSETS
Patent (net) (Note 5) 16,916 -
-------- --------
Total Other Assets 16,916 -
-------- --------
TOTAL ASSETS $465,158 $526,125
======== ========
<PAGE>
<PAGE> F-3
RUBICON MEDICAL, L.C.
Balance Sheets (Continued)
LIABILITIES AND MEMBERS' EQUITY
-------------------------------
CURRENT LIABILITIES
Bank overdraft $ 2,059 $ 2,927
Accounts payable 29,741 16,648
Accrued liabilities 2,857 4,210
Current installment of
obligations under capital leases
(Note 4) 80,563 108,467
--------- --------
Total Current Liabilities 115,220 132,252
--------- --------
LONG-TERM LIABILITIES
Lease payable - long term (Note 4) 149,270 202,611
Note payable (Note 5) 200,000 -
--------- --------
Total Long-Term Liabilities 349,270 202,611
--------- ---------
Total Liabilities 464,490 334,863
--------- ---------
MEMBERS' EQUITY
Members' capital 1,644,518 1,427,207
Accumulated deficit (1,643,850) (1,235,945)
--------- ---------
Total Members' Equity 668 191,262
--------- ---------
TOTAL LIABILITIES AND MEMBERS' EQUITY $ 465,158 $ 526,125
========= =========
The accompanying notes are an integral part of these financial statements.
<PAGE>
<PAGE> F-4
RUBICON MEDICAL, L.C.
Statements of Operations
December 31,
------------
1999 1998
---- ----
NET SALES $ 205,119 $ 128,008
COST OF SALES 177,172 137,950
--------- ---------
GROSS PROFIT (DEFICIT) 27,947 (9,942)
--------- ---------
EXPENSES
Depreciation and amortization 67,584 63,903
General and administrative 340,453 509,213
--------- ---------
Total Expenses 408,037 573,116
--------- ---------
OPERATING LOSS (380,090) (583,058)
--------- ---------
OTHER EXPENSE
Interest expense 27,815 36,095
--------- ---------
Total Other Expense 27,815 36,095
--------- ---------
NET LOSS $(407,905) $(619,153)
========= =========
The accompanying notes are an integral part of these financial statements
<PAGE>
<PAGE> F-5
RUBICON MEDICAL, L.C.
Statements of Members' Equity
Total
Members' Accumulated Members'
Capital Deficit Equity
------- ----------- --------
Balance, December 31, 1997 $695,439 $ (616,792) $78,647
Member contributions 731,768 - 731,768
Net loss for the year ended
December 31, 1998 - (619,153) (619,153)
---------- ------------ ----------
Balance, December 31, 1998 1,427,207 (1,235,945) 191,262
Member contributions 217,311 - 217,311
Net loss for the year ended
December 31, 1999 - (407,905) (407,905)
---------- ------------ ----------
Balance, December 31, 1999 $1,644,518 $(1,643,850) $ 668
========== =========== ========
The accompanying notes are an integral part of these financial statements.
<PAGE>
<PAGE> F-6
RUBICON MEDICAL, L.C.
Statements of Cash Flows
For the Years Ended
December 31,
------------
1999 1998
---- ----
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $(407,905) $(619,153)
Adjustments to reconcile net loss to net cash
provided (used) by operating activities:
Depreciation and amortization 67,584 63,903
Provision for doubtful accounts 6,607 1,893
Changes in assets and liabilities:
(Increase) decrease in accounts receivable 17,030 (26,886)
(Increase) decrease in inventories (990) (29,775)
(Increase) decrease in prepaid expenses-
(Increase) decrease in other assets (17,700) 6,047
Increase (decrease) in accounts payable 11,050 (2,227)
Increase (decrease) in accrued liabilities 694 2,000
Increase (decrease) in bank overdraft (868) (1,155)
--------- ---------
Net Cash (Used) by Operating Activities (324,498) (605,353)
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES
Payments to purchase property and equipment (11,569) (53,599)
--------- ---------
Net Cash (Used) by Investing Activities (11,569) (53,599)
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from members' contributions 217,312 731,767
Principal payments under capital lease
obligations (81,245) (72,815)
Proceeds from issuance of long-term debt 200,000 -
---------- ---------
Net Cash Provided by Financing Activities 336,067 658,952
---------- ---------
NET INCREASE IN CASH AND CASH EQUIVALENT - -
CASH AND CASH EQUIVALENT AT BEGINNING OF YEAR 300 300
---------- ---------
CASH AND CASH EQUIVALENT AT END OF YEAR $ 300 $ 300
========== =========
Supplemental cash flow information:
Interest $ 27,815 $ 36,095
Income tax $ - $ -
The accompanying notes are an integral part of these financial statements.
<PAGE>
<PAGE> F-7
RUBICON MEDICAL, L.C.
Notes to Financial Statements
December 31, 1999 and 1998
NOTE 1 -ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
a. Description of Business
Rubicon Medical, L.C. was organized in the State of Utah on December 11, 1996.
The Company is a specialty medical product manufacturer. In addition, the
Company has been involved with research and development activities related to
the medical industry.
b. Cash and Cash Equivalents
Cash and cash equivalents consisted of demand deposits with banks.
c. Inventories
Inventories are stated at the lower of first-in-first-out cost or net
realizable market value. Inventory consists of raw material knows as
polyurethane, polyethylene, polypropylene, polyvinylchloride, and other
thermoplastic resin compounds that the Company utilizes to manufacture
catheters.
d. Property and Equipment
Property and equipment is recorded at cost and is depreciated on the straight-
line method over their estimated useful lives of three to ten years.
e. Other Assets
Other assets consisted of costs incurred related to the approval process for
patents and licensing agreement. These assets are being amortized on the
straight-line method over their estimated useful lives of seven to fifteen
years.
f. Income Taxes
The Company is a limited liability company and for tax purposes is treated as
a partnership. Accordingly, the Company makes no provision for income taxes
since the net income of the Company is taxable to the members as individuals,
at their individual rates.
g. Use of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the amounts reported in the financial statements and accompanying
notes. Actual results could differ from those estimates.
h. Fair Value Disclosure
At December 31, 1999 and 1998, the book value of the Company's financial
instruments approximates fair value.
<PAGE>
<PAGE> F-8
RUBICON MEDICAL, L.C.
Notes to Financial Statements
December 31, 1999 and 1998
NOTE 2 -GOING CONCERN
The accompanying financial statements have been prepared on a going concern
basis, which contemplates the realization of assets and satisfaction of
liabilities in the normal course of business. The Company has suffered
recurring losses from operations. This raises substantial doubt about the
ability to continue as a going concern. The Company's continuation as a going
concern is dependent on its ability to generate sufficient cash flow to meet
its obligations on a timely basis, to obtain additional debt and/or equity
financing as may be required, and ultimately to attain profitable operations.
The Company continues to pursue research and development efforts which when
completed would result in increased cash flow.
The members of the Company have committed to continue to fund necessary costs
associated with maintaining the Company through December 31, 2000 in the event
that the Company is unable to generate revenues sufficient to fund operating
and holding costs. The Company intends on merging with an existing public
company.
NOTE 3 -PROPERTY AND EQUIPMENT
Property and equipment is recorded at cost and consisted of the following at
December 31, 1999 and 1998:
1999 1998
---- ----
Furniture and fixtures $31,470 $31,470
Equipment 500,407 488,839
Leasehold improvements 43,832 43,832
------- -------
575,709 564,141
Less accumulated depreciation and
amortization (184,679) (117,876)
--------- --------
$391,030 $446,265
======== ========
Depreciation expense was $66,804 and $63,903 respectively for the years ended
December 31, 1999 and 1998.
NOTE 4 -LEASES
The Company is obligated under capital leases for equipment that expire
through August 2002. At December 31, 1999, equipment with a cost of $423,911
and related accumulated depreciation of $54,999 was recorded under these
capital leases. Depreciation of assets held under capital leases is included
in depreciation expense. The leases are guaranteed by the members.
<PAGE>
<PAGE> F-9
RUBICON MEDICAL, L.C.
Notes to Financial Statements
December 31, 1999 and 1998
NOTE 4 -LEASES (Continued)
Future minimum capital lease payments as of December 31, 1999 are:
Capital
Year ending December 31: Leases
------
2000 $108,467
2001 108,467
2002 41,416
2003 -
2004 -
--------
Total minimum lease payments 258,350
Less amounts representing interest (28,517)
Present value of net minimum capital
lease payments 229,833
Less current installments of obligations
under capital leases 80,563
--------
Obligations under capital leases,
excluding current installments $149,270
========
NOTE 5 -COMMITMENTS AND CONTINGENCIES
The Company leases its office and warehouse under a non-cancelable lease
agreement accounted for as an operating lease through December 2002. Minimal
rental payments under non-cancelable operating lease on office space is as
follows:
Years Ending
December 31, Amount
------------ ------
2000 $ 60,312
2001 62,124
2002 63,996
2003 -
2004 -
---------
Total $186,432
========
The Company leases office space under an operating lease agreement. Rent
expense under this lease was $59,357 and $56,856 in 1999 and 1998,
respectively.
On December 8, 1997, the Company entered into an Option and License agreement
for diagnostic and therapeutic devices to be used in the treatment and
management of patients. The term of the agreement is fifteen years and
includes an annual royalty payment of $10,000 or three percent of net sales,
whichever is greater. In addition, in the event the Company sublicenses the
product, the royalty payment is increased to 25%. This agreement terminated
March 31, 1999.
<PAGE>
<PAGE> F-10
RUBICON MEDICAL, L.C.
Notes to Financial Statements
December 31, 1999 and 1998
NOTE 5 -COMMITMENTS AND CONTINGENCIES (Continued)
On March 31, 1999, an amended agreement was entered into by the Company
whereby they retain the rights to manufacture and market a patented product
associated with the option and license agreement dated December 8, 1997.
Royalty payments consist of an annual payment of $5,000 and 3% of net sales.
In addition, if the product is sold under a sublicense from the Company, 15%
of the revenue received becomes due. The Company plans to market the product
in Europe, Canada, Australia and Japan upon approval. The costs of
registering the Company in these countries totaled $17,700 in 1999, with
amortization expense of $781 associated with such expenses.
The Company entered into an agreement on December 22, 1999 whereby they
received $200,000 from Banyon Investments for a convertible debenture. The
agreement allows Banyon Investments to convert the debenture at any time
after 60 days from the agreement date to two years after. The conversion
would allow Banyon to acquire a 5% equity interest in the new public company.
Management is currently in the process of deciding how many shares will be
issued as part of the conversion. The Company must first merge with a public
company to allow itself to issue shares.
NOTE 6 -LONG-TERM DEBT
December 31,
1999
----
Unsecured convertible debenture, non-interest bearing,
convertible during a twenty-two month period into 5% equity
of the new public company, maturity date of December 22, 2001.
$200,000
--------
Total $200,000
========
Annual maturities of long-term debt are as follows:
Years Ending
December 31, Amount
------------ ------
2000 $ -
2001 200,000
-------
Total $200,000
========
<PAGE>
<PAGE> F-11
RUBICON MEDICAL, L.C.
Notes to Financial Statements
December 31, 1999 and 1998
NOTE 7 -SUBSEQUENT EVENTS
On March 31, 2000, the Company incorporated in the State of Utah as Rubicon
Medical, Inc. (Rubicon).
In April 2000, the Company purchased Accurate Designs, Inc. (dba Cath-Tip) for
the sum of $2,000,000. $250,000 was paid up front, with three remaining
payments of $250,000 due every six months following. These three payments
will be secured by Rubicon issuing shares of its stock equal in value to
$750,000, 60 days following the public trading of Rubicon stock, or whenever
three market makers provide quotes for Rubicon stock, whichever occurs first.
On the dates of the cash payments, Accurate Designs, Inc. will transfer back
to the Company, shares equal in value to $250,000. The remaining $1,000,000
will be paid in April of 2001 with the issuance of stock equal in value of
$1,000,000 based on fifty percent of the bid price on the date of the
transfer.
<PAGE>
<PAGE> F-12
RUBICON MEDICAL, INC.
Balance Sheets
ASSETS
------
September 30, December 31,
2000 1999
---- ----
(Unaudited)
CURRENT ASSETS
Cash and cash equivalents $1,716,755 $300
Accounts receivable, net
of allowance for doubtful
accounts of $8,500 122,878 14,513
Inventories 159,016 37,519
Prepaid expenses 4,880 4,880
---------- ---------
Total Current Assets 2,003,529 57,212
---------- ---------
PROPERTY AND EQUIPMENT, NET 706,840 391,030
---------- ---------
OTHER ASSETS
Goodwill (net) 1,933,333 -
Patent (net) 16,138 16,916
----------- ---------
Total Other Assets 1,949,471 16,916
----------- ---------
TOTAL ASSETS $ 4,659,840 $ 465,158
=========== =========
<PAGE>
<PAGE> F-13
RUBICON MEDICAL, INC.
Balance Sheets (Continued)
LIABILITIES AND MEMBERS' AND STOCKHOLDERS' EQUITY
-------------------------------------------------
September 30, December 31,
2000 1999
---- ----
(Unaudited)
CURRENT LIABILITIES
Bank overdraft $ - $ 2,059
Accounts payable 893,178 29,741
Accrued liabilities 358,430 2,857
Current installment of
obligations under capital leases 156,606 80,563
---------- -----------
Total Current Liabilities 1,408,214 115,220
---------- -----------
LONG-TERM LIABILITIES
Lease payable - long term 310,096 149,270
Note payable 1,200,000 200,000
---------- ----------
Total Long-Term Liabilities 1,510,096 349,270
---------- ----------
Total Liabilities 2,918,310 464,490
---------- ----------
MEMBERS' AND STOCKHOLDERS' EQUITY
Preferred stock: 5,000,000
shares authorized;
of $0.001 par value, 163,400
shares issued and
outstanding 163 -
Common stock: 100,000,000 shares
authorized of $0.001 par value,
1,000 shares issued and outstanding 1 -
Additional paid-in capital 2,694,758 -
Members' capital - 1,644,518
Accumulated deficit (953,392) (1,643,850)
----------- -----------
Total Members' and Stockholders'
Equity 1,741,530 668
---------- ----------
TOTAL LIABILITIES AND MEMBERS' AND
STOCKHOLDERS' EQUITY $4,659,840 $465,158
========== ==========
<PAGE>
<PAGE> F-14
RUBICON MEDICAL, INC.
Statements of Operations
(Unaudited)
For the Nine Months Ended
September 30,
-------------
2000 1999
---- ----
NET SALES $338,229 $203,191
COST OF SALES 277,295 174,274
-------- --------
GROSS PROFIT (LOSS) 60,934 28,917
-------- --------
OTHER REVENUE
License fee income 2,000,000 -
--------- --------
Total Other Revenue 2,000,000 -
--------- --------
EXPENSES
Depreciation and amortization 142,647 66,358
General and administrative 865,354 365,023
--------- --------
Total Expenses 1,008,001 431,381
--------- --------
OPERATING INCOME (LOSS) 1,052,933 (402,464)
--------- ---------
OTHER EXPENSE
Interest expense (36,516) -
Interest income 29,741 -
--------- --------
Total Other Expense (6,775) -
--------- --------
INCOME BEFORE INCOME TAXES 1,046,158 (402,464)
INCOME TAX EXPENSE 355,700 -
---------- ---------
NET INCOME (LOSS) $690,458 $(402,464)
========= ==========
<PAGE>
<PAGE> F-15
RUBICON MEDICAL, INC.
Statements of Stockholders' and Members' Equity
<TABLE>
<CAPTION>
Additional Total
Preferred Stock Common Stock Paid-In Accumulated Members'
Shares Amount Shares Amount Capital Deficit Equity
------ ------ ------ ------ ------- ------- ------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance,
December 31, 1998 - $ - - $ - $1,427,207 $(1,235,945) $191,262
Member contributions - - - - 217,311 - 217,311
Net loss for the year ended
December 31, 1999 - - - - - (407,905) (407,905)
------ ------ ------- ------ ---------- ----------- -------
Balance,
December 31, 1999 - - - - 1,644,518 (1,643,850) 668
Capital contributions
(unlimited) - - - - 233,404 - 233,404
Common stock issued for
conversion of partnership
to a corporation
(unaudited) - - 1,000 1 (1) - -
Preferred stock issued
for cash (unaudited) 163,400 163 - - 816,837 - 817,000
Net income for the nine
months ended September 30,
2000 (unaudited) - - - - - 690,458 690,458
------ ------ ------- ------ ---------- ----------- -----------
Balance, September 30,
2000 (unaudited) 163,400 $ 163 1,000 $1 $2,694,758 $(953,392) $1,741,530
========= ====== ======== ====== ========== ============= ===========
</TABLE>
<PAGE>
<PAGE> F-16
RUBICON MEDICAL, INC.
Statements of Cash Flows
For the Nine Months
Ended
September 30,
-------------
2000 1999
---- ----
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) $690,458 $(402,464)
Adjustments to reconcile net loss to net cash
provided (used) by operating activities:
Depreciation and amortization 142,647 50,537
Provision for doubtful accounts - (1,893)
Changes in assets and liabilities:
(Increase) decrease in accounts receivable (108,865) 22,375
(Increase) decrease in inventories (121,497) (10,568)
(Increase) decrease in other assets (2,000,000) (17,700)
Increase (decrease) in accounts payable 1,865,695 13,877
Increase (decrease) in accrued liabilities 197,206 (4,210)
Increase (decrease) in bank overdraft (2,059) 22,042
----------- ---------
Net Cash (Used) by Operating Activities 663,585 (328,004)
---------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES
Payments to purchase property and equipment (391,008) (11,150)
----------- --------
Net Cash (Used) by Investing Activities (391,008) (11,150)
----------- --------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from members' contributions 233,403 399,311
Principal payments under capital lease obligations (60,934) (60,157)
Proceeds from issuance of long-term debt 454,409 -
Proceeds from sale of preferred stock 817,000 -
--------- ---------
Net Cash Provided by Financing Activities 1,443,878 339,154
--------- ---------
NET INCREASE IN CASH AND CASH EQUIVALENT 1,716,455 -
CASH AND CASH EQUIVALENT AT BEGINNING OF YEAR 300 300
----------- ---------
CASH AND CASH EQUIVALENT AT END OF YEAR $1,716,755 $300
========== =========
Supplemental cash flow information:
Interest $36,516 $20,861
Income tax $ - $ -
<PAGE>
<PAGE> F-17
RUBICON MEDICAL, INC.
Notes to Financial Statements
September 30, 2000 and December 31, 1999
NOTE 1 -CONDENSED FINANCIAL STATEMENTS
The accompanying financial statements have been prepared by the Company
without audit. In the opinion of management, all adjustments (which include
only normal recurring adjustments) necessary to present fairly the financial
position, results of operations and cash flows at September 30, 2000 and 1999
and for all periods presented have been made.
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted. It is suggested that these
condensed financial statements be read in conjunction with the financial
statements and notes thereto included in the Company's December 31, 1999
audited financial statements. The results of operations for periods ended
September 30, 2000 and 1999 are not necessarily indicative of the operating
results for the full years.
NOTE 2 -SUBSEQUENT EVENTS
On October 11, 2000, the Company executed an agreement and plan or
reorganization whereby a public company known as Hi-Tech Ventures (Hi-T)
issued 36,000,000 shares of common stock for all of the outstanding stock of
the Company. Hi-T is the acquiring entity for legal purposes and the Company
is the surviving entity for accounting purposes.
<PAGE>
<PAGE> F-18
INDEPENDENT AUDITORS' REPORT
Hi-Tech Ventures, Inc.
(A Development Stage Company)
Salt Lake City, Utah
We have audited the accompanying balance sheet of Hi-Tech Ventures, Inc. (a
development stage company) as of September 30, 2000 and the related statements
of operations, stockholders' equity (deficit) and cash flows for the year
ended September 30, 2000. These financial statements are the responsibility
of the Company's management. Our responsibility is to express an opinion on
these financial statements based on our audits. The financial statements for
the period October 1, 1997 (inception) through September 30, 1999, were
audited by other auditors whose report dated July 7, 2000 expressed an
unqualified opinion on those statements.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit 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 audit provides a reasonable basis
for our opinion.
In our opinion, based on our audit and the report of other auditors, the
financial statements referred to above present fairly, in all material
respects, the financial position of Hi-Tech Ventures, Inc. (a development
stage company) at September 30, 2000 and the results of its operations and its
cash flows for the years ended September 30, 2000, in conformity with
generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 2 to the
financial statements, the Company is a development stage company with no
significant operating results to date, which raises substantial doubt about
its ability to continue as a going concern. Management's plans in regard to
these matters are also described in Note 2. The financial statements do not
include any adjustments that might result from the outcome of the uncertainty.
HJ & Associates
Salt Lake City, Utah
November 21, 2000
<PAGE>
<PAGE> F-19
HI-TECH VENTURES, INC.
(A Development Stage Company)
Balance Sheet
ASSETS
------
September 30,
2000
----
CURRENT ASSETS
Cash $ 9,070
-------
Total Current Assets 9,070
-------
TOTAL ASSETS $ 9,070
=======
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES
Accounts payable and accrued expenses $ 1,649
Notes payable (Note 3) 10,000
-------
Total Current Liabilities 11,649
-------
TOTAL LIABILITIES 11,649
-------
STOCKHOLDERS' EQUITY (DEFICIT)
Common stock: 50,000,000 shares authorized
of $0.001 par value, 9,840,000 shares issued
and outstanding 9,840
Additional paid-in capital 59,863
Retained deficit (66,933)
Deficit accumulated during the development stage (5,349)
-------
Total Stockholders' Equity (Deficit) (2,579)
-------
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY (DEFICIT) $ 9,070
=======
The accompanying notes are an integral part of these financial statements.
<PAGE>
<PAGE> F-20
HI-TECH VENTURES, INC.
(A Development Stage Company)
Statements of Operations
From
Inception of
Development
Stage on
October 1,
For the Years Ended 1997 Through
September 30, September 30,
2000 1999 2000
---- ---- ----
REVENUES
Interest income $ 322 $ 319 $ 643
Other income - - 25
------- ------- -------
Total Revenues 322 319 668
------- ------- -------
EXPENSES
General and administrative 2,396 751 4,500
Interest expense 704 804 1,517
------- ------- -------
Total Expenses 3,100 1,555 6,017
------- ------- -------
NET LOSS $(2,778) $(1,236) $(5,349)
======= ======= =======
BASIC LOSS PER SHARE $ (0.00) $ (0.00)
======= =======
The accompanying notes are an integral part of these financial statements.
<PAGE>
<PAGE> F-21
HI-TECH VENTURES, INC.
(A Development Stage Company)
Statements of Stockholders' Equity (Deficit)
Additional Retained
Common Stock Paid-In Earnings
Shares Amount Capital (Deficit)
------ ------ ------- ---------
Balance, September 30, 1997 9,840,000 $9,840 $59,863 $(66,933)
Net loss for the year ended
September 30, 1998 - - - (1,335)
--------- ------ ------- --------
Balance, September 30, 1998 9,840,000 9,840 59,863 (68,268)
Net loss for the year ended
September 30, 1999 - - - (1,236)
--------- ------ ------- --------
Balance, September 30, 1999 9,840,000 9,840 59,863 (69,504)
Net loss for the year ended
September 30, 2000 - - - (2,778)
--------- ------ ------- --------
Balance, September 30, 2000 9,840,000 $9,840 $59,863 $(72,282)
========= ====== ======= ========
The accompanying notes are an integral part of these financial statements.
<PAGE>
<PAGE> F-22
HI-TECH VENTURES, INC.
(A Development Stage Company)
Statements of Cash Flows
From
Inception of
Development
Stage on
October 1,
For the Years Ended 1997 Through
September 30, September 30,
2000 1999 2000
---- ---- -------
CASH FLOWS FROM OPERATING
ACTIVITIES
Net loss $(2,778) $(1,236) $(5,349)
Changes in operating assets
and liabilities:
Increase (decrease) in accounts
payable 35 (3) 7
Increase (decrease) in accrued
expenses 704 804 1,512
------- ------- -------
Net Cash Used by Operating
Activities (2,039) (435) (3,830)
------- ------- -------
CASH FLOWS FROM INVESTING
ACTIVITIES - - -
------- ------- -------
CASH FLOWS FROM FINANCING
ACTIVITIES
Issuance of note payable - - 10,000
------- ------- -------
Net Cash Provided by Financing
Activities - - 10,000
------- ------- -------
NET INCREASE (DECREASE) IN
CASH (2,039) (435) 6,170
CASH AT BEGINNING OF PERIOD 11,109 11,544 2,900
------- ------- -------
CASH AT END OF PERIOD $9,070 $11,109 $9,070
======= ======= ======
CASH PAID FOR:
Interest $ - $ - $ -
Income taxes $ - $ 109 $ 109
The accompanying notes are an integral part of these financial statements.
<PAGE>
<PAGE> F-23
HI-TECH VENTURES, INC.
(A Development Stage Company)
Notes to the Financial Statements
September 30, 2000
NOTE 1 -ORGANIZATION AND HISTORY
The Company was incorporated on October 19, 1979 under the laws of the State
of Utah. In 1989, the Company acquired Hi-Tech Ventures, Inc., a Delaware
corporation. The Company currently has no operations and is considered a
development stage company which is seeking a merger or acquisition by an
operating company.
a. Accounting Method
The Company's financial statements are prepared using the accrual method of
accounting. The Company has elected September 30 year end.
b. Cash and Cash Equivalents
Cash equivalents include short-term, highly liquid investments with maturities
of three months or less at the time of acquisition.
c. Basic Loss Per Share
For the Year Ended
September 30, 2000
------------------
Loss Shares Per Share
(Numerator) (Denominator) Amount
--------- ----------- ------
Net loss $ (2,778) 9,840,000 $(0.00)
========= =========== ======
For the Year Ended
September 30, 1999
------------------
Loss Shares Per Share
(Numerator) (Denominator) Amount
--------- ----------- ------
Net loss $ (1,236) 9,840,000 $(0.00)
========= =========== ======
The computations of basic loss per share of common stock are based on the
weighted average number of shares outstanding during the period of the
financial statements. Common stock equivalents are not included in diluted
earnings when their effect is antidilutive.
d. Provision for Taxes
At September 30, 2000, the Company had net operating loss carryforwards of
approximately $42,000 that may be offset against future taxable income through
2019. No tax benefit has been reported in the financial statements, because
the Company believes there is a 50% or greater chance the carryforwards will
expire unused. Accordingly, the potential tax benefits of the loss
carryforwards are offset by a valuation account of the same amount.
<PAGE>
<PAGE> F-24
HI-TECH VENTURES, INC.
(A Development Stage Company)
Notes to the Financial Statements
September 30, 2000
NOTE 1 ORGANIZATION AND HISTORY (Continued)
e. Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
f. Revenue Recognition
The Company currently has no source of revenues. Revenue recognition policies
will be determined when principal operations begin.
NOTE 2 GOING CONCERN
The Company's financial statements are prepared using generally accepted
accounting principles applicable to a going concern which contemplates the
realization of assets and liquidation of liabilities in the normal course of
business. However, the Company does not have significant cash or other
material assets, nor does it have an established source of revenues sufficient
to cover its operating costs and to allow it to continue as a going concern.
It is the intent of the Company to seek a merger with an existing, operating
company. (See Note 5).
NOTE 3 NOTES PAYABLE
The notes payable consist of two unsecured promissory notes; one note is with
an individual and the other is with a corporation. The notes are dated
September 29, 1998 for $5,000, each with interest at 8% per annum. Lump sum
payment of full principal and interest due the earlier of September 29, 2000,
or the merger or acquisition between the Company and another corporation or
entity that has operations. The note holder has the option to convert the
note into common shares of the Company at the rate of one share for each
$0.001 per share of principal and interest, subject to such adjustment in such
conversion price, if any, as may be required by the provisions of the notes.
As of September 30, 2000, the Company is in default on both notes. On October
11, 2000, the Company merged with another company (Note 5). The notes,
including interest, were converted to into 11,508,000 shares of common stock
at $0.001 per share.
<PAGE>
<PAGE> F-25
HI-TECH VENTURES, INC.
(A Development Stage Company)
Notes to the Financial Statements
September 30, 2000
NOTE 4 -MINERAL DEED
The Company holds a mineral deed for a 50% interest in and to all of the oil,
gas and other minerals in and under and that may be produced from 486.18 acres
of land located in Box Elder County, Utah.
NOTE 5 - SUBSEQUENT EVENTS
Reverse Stock Split
On October 11, 2000, the Company approved a 20-to-1 reverse stock split. As
of September 30, 2000, the total number of common shares outstanding was
9,840,000. After the reverse stock split, the outstanding common shares were
reduced to 492,000.
Reverse Merger with Rubicon Medical, Inc.
On October 11, 2000, Hi-Tech Ventures, Inc. (Hi-T) completed an agreement and
plan of reorganization whereby Hi-T issued 36,000,000 shares of its common
stock in exchange for all of the outstanding common stock of Rubicon Medical,
Inc. Immediately prior to the agreement and plan of reorganization, Hi-T had
492,000 post-split shares of common stock issued and outstanding. Hi-T is the
acquiring entity for legal purposes and Rubicon Medical, Inc. is the surviving
entity for accounting purposes. On October 11, 2000, the shareholders of Hi-T
authorized a 20-to-1 reverse stock split in conjunction with the agreement and
plan of reorganization.
Conversion of Notes Payable
On October 12, 2000, the holders of the two notes payable (Note 3) approved
the conversion of the principal and accrued interest into 11,508,000 shares of
common stock.
Name Change
On October 11, 2000, the Company approved a name change to Rubicon Medical
Corporation.
<PAGE>
<PAGE> F-26
HI-TECH VENTURES, INC.
(A Development Stage Company)
Notes to the Financial Statements
Consolidated Proforma Balance Sheet (Unaudited)
September 30, 2000
NOTE 5 -SUBSEQUENT EVENTS (Continued)
ASSETS
------
Proforma
Adjustments
Rubicon Hi-Tech Increase Proforma
Medical, Inc. Ventures, Inc. (Decrease) Consolidated
------------- -------------- -------- ------------
CURRENT ASSETS
Cash $1,716,755 $9,070 $ - $1,725,825
Inventory 159,016 - - 159,016
Prepaid expenses 4,880 - - 4,880
Accounts receivable,
net 122,878 - - 122,878
---------- ------ -------- ----------
Total Current Assets 2,003,529 9,070 - 2,012,599
---------- ------ -------- ----------
FIXED ASSETS
Furniture and
equipment 966,718 - - 966,718
Accumulated
depreciation (259,878) - - (259,878)
---------- ------ --------- ---------
Total Fixed Assets 706,840 - - 706,840
---------- ------ --------- ---------
OTHER ASSETS
Goodwill 1,933,333 - - 1,933,333
Patent, net 16,138 - - 16,138
---------- ------ --------- ----------
Total Other Assets 1,949,471 - - 1,949,471
---------- ------ --------- ----------
TOTAL ASSETS $4,659,840 $9,070 $ - $4,668,910
========== ====== ========= ==========
<PAGE>
<PAGE> F-27
HI-TECH VENTURES, INC.
(A Development Stage Company)
Notes to the Financial Statements
Consolidated Proforma Balance Sheet (Unaudited) (Continued)
September 30, 2000
NOTE 5 - SUBSEQUENT EVENTS (Continued)
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Proforma
Adjustments
Rubicon Hi-Tech Increase Proforma
Medical, Inc. Ventures, Inc. (Decrease) Consolidated
------------- -------------- -------- ------------
CURRENT
LIABILITIES
Accounts payable
and accrued
expenses $1,251,608 $ 1,649 $23,492 $1,276,749
Notes Payables - 10,000 (10,000) -
Current installment
of obligations
under capital
leases 156,606 - - 156,606
---------- ------ --------- ----------
Total Current
Liabilities 1,408,214 11,649 13,492 1,433,355
---------- ------ --------- ----------
LONG-TERM LIABILITIES
Note payable 1,200,000 - - 1,200,000
Lease payable-
long term 310,096 - - 310,096
---------- ------ --------- ----------
Total Long-Term
Liabilities 1,510,096 - - 1,510,096
---------- ------ --------- ----------
Total Liabilities 2,918,310 11,649 13,492 2,943,451
---------- ------ --------- ----------
STOCKHOLDERS' EQUITY
(DEFICIT)
Preferred stock:
5,000,000
shares authorized;
163,400
shares issued and
outstanding 163 - - 163
Common stock:
100,000,000
shares authorized of
<PAGE>
<PAGE> F-28
NOTE 5 - SUBSEQUENT EVENTS (Continued)
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Proforma
Adjustments
Rubicon Hi-Tech Increase Proforma
Medical, Inc. Ventures, Inc. (Decrease) Consolidated
------------- -------------- -------- ------------
$0.001
par value,
48,000,000 shares
issued and
outstanding 1 492 47,507 48,000
Additional paid-in
capital 2,694,758 69,211 (105,503) 2,658,466
Retained earnings
(deficit) (953,392) (72,282) 44,504 (981,170)
---------- ------ --------- ----------
Total Stockholders'
Equity (Deficit) 1,741,530 (2,579) (13,492) 1,725,459
---------- ------ --------- ----------
TOTAL LIABILITIES AND
STOCKHOLDERS'
EQUITY (DEFICIT) $4,659,840 $9,070 $ - $4,668,910
========== ====== ========= ==========
<PAGE>
<PAGE> F-29
HI-TECH VENTURES, INC.
(A Development Stage Company)
Notes to the Financial Statements
Consolidated Proforma Statement of Operations
September 30, 2000
NOTE 5-SUBSEQUENT EVENTS (Continued)
Proforma
Adjustments
Rubicon Hi-Tech Increase Proforma
Medical, Inc. Ventures, Inc. (Decrease) Consolidated
------------- -------------- -------- ------------
REVENUES $338,229 $ - $ - $ 338,229
COST OF SALES 277,295 - - 277,295
---------- ------ --------- ----------
GROSS PROFIT (LOSS) 60,934 - - 60,934
---------- ------ --------- ----------
OTHER REVENUE
License fee income 2,000,000 - - 2,000,000
---------- ------ --------- ----------
Total Other Revenue 2,000,000 - - 2,000,000
---------- ------ --------- ----------
OPERATING EXPENSES
Depreciation and
amortization 142,647 - - 142,647
General and
administrative 865,354 2,396 25,000 892,750
---------- ------ --------- ----------
Total Operating
Expenses 1,008,001 2,396 25,000 1,035,397
---------- ------ --------- ----------
OPERATING INCOME
(LOSS) 1,052,933 (2,396) (25,000) 1,025,537
---------- ------ --------- ----------
OTHER INCOME
(EXPENSES)
Interest expense (36,516) (704) - (37,220)
Interest income 29,741 322 - 30,063
---------- ------ --------- ----------
Total Other
Income
(Expenses) (6,775) (382) - (7,157)
---------- -------- --------- ---------
INCOME (LOSS) BEFORE
INCOME TAXES 1,046,158 (2,778) (25,000) 1,018,380
INCOME (TAXES)
BENEFIT (355,700) - - (355,700)
---------- ------- --------- ----------
NET INCOME (LOSS) $690,458 $(2,778) $ (25,000) $ 662,680
========== ======= ========= ==========
<PAGE>
<PAGE> F-30
HI-TECH VENTURES, INC.
(A Development Stage Company)
Notes to te Financial Statements
September 30, 2000
Proforma Adjustments
1)Common stock $(35,999)
Additional paid-in capital 105,503
Retained earnings (69,504)
--------
$ -
========
To record the acquisition of Rubicon Medical, Inc., through the issuance of
36,000,000 shares of common stock.
2)Common stock $(11,508)
Note payable 10,000
Interest payable 1,508
--------
$ -
========
To record the issuance of 11,508,000 shares of common stock for notes payable
as part of the acquisition agreement.
3)Acquisition costs $25,000
Account payable (25,000)
$ -
=======
To record estimated expenses associated with the acquisition.
<PAGE>
<PAGE> F-31
RUBICON MEDICAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED PROFORMA FINANCIAL STATEMENTS
SEPTEMBER 30, 2000
<PAGE>
<PAGE> F-32
RUBICON MEDICAL CORPORATION AND SUBSIDIARIES
Consolidated Proforma Balance Sheet
September 30, 2000
(Unaudited)
ASSETS
------
Proforma
Adjustments
Rubicon Hi-Tech Increase Proforma
Medical, Inc. Ventures, Inc. (Decrease) Consolidated
CURRENT ASSETS ------------- -------------- ---------- ------------
Cash $1,716,755 $ 9,070 $ - $ 1,725,825
Inventory 159,016 - - 159,016
Prepaid expenses 4,880 - - 4,880
Accounts receivable,
net 122,878 - - 122,878
---------- --------- ---------- -----------
Total Current
Assets 2,003,529 9,070 - 2,012,599
---------- --------- ---------- -----------
FIXED ASSETS
Furniture and
equipment 966,718 - - 966,718
Accumulated
depreciation (259,878) - - (259,878)
---------- --------- ----------- -----------
Total Fixed Assets 706,840 - - 706,840
---------- --------- ----------- -----------
OTHER ASSETS
Goodwill 1,933,333 - - 1,933,333
Patent, net 16,138 - - 16,138
---------- --------- ----------- -----------
Total Other Assets 1,949,471 - - 1,949,471
---------- --------- ----------- -----------
TOTAL ASSETS $4,659,840 $ 9,070 $ - $ 4,668,910
========== ========= =========== ===========
See Summary of Assumptions and Disclosures.
<PAGE>
<PAGE> F-33
RUBICON MEDICAL CORPORATION AND SUBSIDIARIES
Consolidated Proforma Balance Sheet (Continued)
September 30, 2000 (Unaudited)
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Proforma
Adjustments
Rubicon Hi-Tech Increase Proforma
Medical, Inc. Ventures, Inc. (Decrease) Consolidated
------------- -------------- ---------- ------------
CURRENT LIABILITIES
Accounts payable and
accrued expenses $1,251,608 $ 1,649 $ 23,492 $1,276,749
Notes payable - 10,000 (10,000) -
Current installment
of obligations under
capital leases 156,606 - - 156,606
---------- --------- ----------- -----------
Total Current
Liabilities 1,408,214 11,649 13,492 1,433,355
---------- --------- ----------- -----------
LONG-TERM
LIABILITIES
Note payable 1,200,000 - - 1,200,000
Lease payable -
long term 310,096 - - 310,096
---------- --------- ----------- -----------
Total Long-Term
Liabilities 1,510,096 - - 1,510,096
---------- --------- ----------- -----------
Total Liabilities 2,918,310 11,649 13,492 2,943,451
---------- --------- ----------- -----------
COMMITMENTS AND
CONTINGENCIES
STOCKHOLDERS' EQUITY
(DEFICIT)
Preferred stock:
5,000,000
shares authorized;
163,400
shares issued and
outstanding 163 - - 163
Common stock:
100,000,000 shares
authorized of $0.001
par value,
48,000,000 shares
issued and outstanding 1 492 47,507 48,000
Additional paid-in
capital 2,694,758 69,211 (105,503) 2,658,466
Retained earnings
(deficit) (953,392) (72,282) 44,504 (981,170)
---------- --------- ----------- -----------
Total Stockholders'
Equity (Deficit) 1,741,530 (2,579) (13,492) 1,725,459
---------- --------- ----------- -----------
TOTAL LIABILITIES AND
STOCKHOLDERS'
EQUITY (DEFICIT) $4,659,840 $9,070 $ - $ 4,668,910
========== ========= ============ ===========
See Summary of Assumptions and Disclosures.
<PAGE>
<PAGE> F-34
RUBICON MEDICAL CORPORATION AND SUBSIDIARIES
Consolidated Proforma Statement of Operations
For the Nine Months Ended September 30, 2000
(Unaudited)
Proforma
Adjustments
Rubicon Hi-Tech Increase Proforma
Medical, Inc. Ventures, Inc. (Decrease) Consolidated
------------- -------------- ---------- ------------
REVENUES $338,229 $ - $ - $338,229
COST OF SALES 277,295 - - 277,295
---------- --------- ----------- -----------
GROSS PROFIT 60,934 - - 60,934
---------- --------- ----------- -----------
OTHER REVENUE
License fee income 2,000,000 - - 2,000,000
---------- --------- ----------- -----------
Total Other Revenue 2,000,000 - - 2,000,000
---------- --------- ----------- -----------
OPERATING EXPENSES
Depreciation and
amortization 142,647 - 142,647
General and
administrative 865,354 2,396 25,000 892,750
---------- --------- ----------- -----------
Total Operating
Expenses 1,008,001 2,396 25,000 1,035,397
---------- --------- ----------- -----------
OPERATING INCOME
(LOSS) 1,052,933 (2,396) (25,000) 1,025,537
---------- --------- ----------- -----------
OTHER INCOME
(EXPENSES)
Interest expense (36,516) (704) - (37,220)
Interest income 29,741 322 - 30,063
---------- --------- ----------- -----------
Total Other Income
(Expenses) (6,775) (382) - (7,157)
---------- --------- ----------- -----------
INCOME (LOSS) BEFORE
INCOME TAXES 1,046,158 (2,778) (25,000) 1,018,380
INCOME TAX EXPENSE 355,700 - - 355,700
---------- --------- ----------- -----------
NET INCOME (LOSS) $ 690,458 $ (2,778) $ (25,000) $ 662,680
========== ========= =========== ===========
See Summary of Assumptions and Disclosures.
<PAGE>
<PAGE> F-35
RUBICON MEDICAL CORPORATION AND SUBSIDIARIES
Consolidated Proforma Statement of Stockholders' Equity
For the Nine Months Ended September 30, 2000
(Unaudited)
<TABLE>
<CAPTION>
Additional
Preferred Stock Common Stock Paid-In Retained
Shares Amount Shares Amount Capital Earnings
------ ------ ------ ------ ------- --------
<S> <C> <C> <C> <C> <C> <C>
Balance,
January 1, 2000 - $ - 36,000,000 $36,000 $1,608,518 $(1,643,850)
Preferred shares for cash 163,400 163 - - 816,837 -
Common stock issued
in acquisition - - 492,000 492 233,111 -
Common stock exchanged
for debt - - 11,508,000 11,508 - -
Net income for the
nine months ended
September 30, 2000 - - - - - 662,680
--------- ------ ---------- ------- ---------- --------
Balance,
September 30, 2000 $ 163,400 $ 163 48,000,000 $48,000 $2,658,466 $(981,170)
</TABLE>
See Summary of Assumptions and Disclosures.
<PAGE>
<PAGE> F-36
RUBICON MEDICAL CORPORATION AND SUBSIDIARIES
Summary of Assumptions and Disclosures
NOTE 1 -ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
a. Business Organization
The accompanying proforma financial statements are prepared to present the
executed merger with Hi-Tech Ventures, Inc. by Rubicon Medical, Inc. to aid
the user in understanding the merger. The consolidated proforma financial
statements are presented as though the merger took place on January 1, 2000.
The financial statements presented are those of Rubicon Medical, Inc. and
Subsidiaries (the "Company"). The Company was incorporated in the State of
Utah on March 31, 2000. The Company is a specialty medical product
manufacturer. In addition, the Company has been involved with research and
development activities related to the medical industry.
Hi-Tech Ventures, Inc. (Hi-T), was organized
under the laws of the State
of Utah on October 9, 1979. The Company changed its domicile to
Delaware in 1990. Hi-T was organized to seek potential business
ventures which would allow for long term growth.
Accurate Designs, Inc. (Accurate) was incorporated on January 1, 1996, under
the laws of the State of Utah. Accurate was organized to design various
machinery and equipment for the medical and healthcare profession.
On April 17, 2000, the Company entered into an Asset Purchase Agreement under
which the Company acquired Accurate Designs, Inc. (Accurate), a Utah
corporation. Accurate was in the business of designing various machinery and
equipment for the production of specialized catheter tips, the production of
catheter tips and other design and production of equipment for the medical and
healthcare profession.
Reorganization with Hi-Tech Ventures, Inc.
On October 11, 2000, Hi-T completed an agreement and plan of reorganization
whereby Hi-T issued 36,000,000 shares of its common stock in exchange for all
of the outstanding common stock of Rubicon Medical, Inc. Immediately prior to
the agreement and plan of reorganization, Hi-T had 492,000 post-split shares
of common stock issued and outstanding. Hi-T is the acquiring entity for
legal purposes and Rubicon Medical, Inc. is the surviving entity for
accounting purposes. On October 11, 2000, the shareholders of Hi-T authorized
a 20-to-1 reverse stock split in conjunction with the agreement and plan of
reorganization. All references to shares of common stock have been
retroactively restated.
<PAGE>
<PAGE> F-37
RUBICON MEDICAL, INC. AND SUBSIDIARIES
Summary of Assumptions and Disclosures
NOTE 1 -ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(Continued)
b. Proforma Adjustments
1)Common stock $(35,999)
Additional paid-in capital 105,503
Retained earnings (69,504)
--------
$ -
========
To record the acquisition of Rubicon Medical, Inc., through the issuance of
36,000,000 shares of common stock.
2)Common stock $(11,508)
Note payable 10,000
Interest payable 1,508
--------
$ -
========
To record the issuance of 11,508,00 shares of common stock for notes payable
as part of the acquisition agreement.
3)Acquisition costs $25,000
Account payable (25,000)
--------
$ -
========
To record estimated expenses associated with the acquisition.
<PAGE>
<PAGE> 68
BACK COVER OF PROSPECTUS
No dealer, salesman or other person is authorized to give any information
or to make any representations not contained in this Prospectus in connection
with the offer made hereby, and, if given or made, such information or
representations must not be relied upon as having been authorized by Rubicon.
This Prospectus does not constitute an offer to sell or a solicitation of an
offer to buy the securities offered hereby to any person in any state or other
jurisdiction in which such offer or solicitation would be unlawful. Neither
the delivery of this Prospectus nor any sale made hereunder shall, under any
circumstances, create any implication that the information contained herein is
correct as of any time subsequent to the date hereof.
TABLE OF CONTENTS
Page
Prospectus Summary 2
Risk Factors 3
Dividend Policy 6
Market Price of Common Stock 6
Business and Plan of Operation 6
Management's Discussion and Analysis 10
Management 14
Principal Shareholders 16
Certain Transactions 17
Selling Shareholders 17
Description of Securities 19
Legal Matters 19
Experts 20
Additional Information 20
Financial Statements F-1
Rubicon Medical Corporation
11,508,000 SHARES
PROSPECTUS
December , 2000
<PAGE>
<PAGE> R-69
Rubicon Medical Corporation
PART II
Item 24. Indemnification of Directors and Officers.
--------------------------------------------------
Rubicon has adopted provisions in its bylaws that limit the liability of
its directors and provide for indemnification of its directors and officers to
the full extent permitted under the Delaware General Corporation Law. Under
Rubicon's bylaws, and as permitted under the Delaware General Corporation Law,
directors are not liable to Rubicon or its stockholders for monetary damages
arising from a breach of their fiduciary duty of care as directors. Such
provisions do not, however, relieve liability for breach of a director's duty
of loyalty to Rubicon or its stockholders, liability for acts or omissions not
in good faith or involving intentional misconduct or knowing violations of
law, liability for transactions in which the director derived as improper
personal benefit or liability for the payment of a dividend in violation of
Delaware law. Further, the provisions do not relieve a director's liability
for violation of, or otherwise relieve Rubicon or its directors from the
necessity of complying with, federal or state securities laws or affect the
availability of equitable remedies such as injunctive relief or rescission.
At present, there is no pending litigation or proceeding involving a
director, officer, employee or agent of Rubicon where indemnification will be
required or permitted. Rubicon is not aware of any threatened litigation or
proceeding that may result in a claim for indemnification by any director or
officer.
Item 25. Other Expenses of Issuance and Distribution.
-----------------------------------------------------
Filing fee under the Securities Act of 1933 $3,039.00
Printing and engraving (1) $1,000.00
Blue Sky Fees $5,000.00
Auditing Fees (1) $10,000.00
Legal Fees (1) $35,000.00
Miscellaneous (1) $3,000.00
----------
TOTAL $57,039.00
(1)Estimates ==========
Item 26. Recent Sales of Unregistered Securities.
-------------------------------------------------
In November 2000, the Company issued 36,000,000 shares of common stock to
four shareholders of Rubicon Medical, Inc. in exchange for all of the
outstanding shares of Rubicon Medical, Inc. and 163,400 shares of its
preferred stock to 17 preferred stockholders of Rubicon Medical, Inc. All
shares were issued in relation to the acquisition of Rubicon Medical, Inc, the
Utah Corporation by Hi-Tech, the Delaware corporation whose name was
subsequently changed to Rubicon Medical Corporation. The transactions are
believed exempt from registration under Section 4(6) and/or 4(2) of the
Securities Act do to the investment intent of the individuals, their
accredited nature and the number of individuals receiving shares.
<PAGE>
<PAGE> R-70
Item 27. Exhibits and Financial Schedules
-----------------------------------------
SEC Ref No. Exhibit No. Title of Document Location
----------- ----------- ----------------- --------
2. Plan of Acquisition, reorganization, arrangement,
liquidation or Succession
2.1 Agreement and Plan of Reorganization by This Filing
and between Hi-Tech Ventures, Inc. and
Rubicon Medical, Inc.
3. Certificate of Incorporation and Bylaws
3.1 Articles of Incorporation This Filing
3.2 Articles of Amendment This Filing
3.3 2000 Series A Convertible Preferred Stock This Filing
3.4 Bylaws This Filing
4. Instruments defining the rights of holders See Ex. 3.1 and
3.4
5. Opinion of Victor D. Schwarz, LLC as to This Filing
legality of securities being registered.
10. Material Contracts
10.1 Option and License Agreement with U.S.C. This Filing
10.1a Option Exercise and License Amendment
Agreement with U.S.C. This Filing
10.2 Exclusive License and Development Agreement
With Abbott Laboratories This Filing
10.2a Letter of Affirmation and Consent Between U.S.C.
And Abbott Laboratories This Filing
10.2b Letter of Understanding-USC This Filing
10.3 Equipment Lease Agreement with First
Security Leasing Company This Filing
10.3a Promissory Note to Equipment Lease Agreement This Filing
10.3b Lease Schedule to Lease Agreement This Filing
10.3c Lease Schedule to Lease Agreement This Filing
10.3d Lease Schedule to Lease Agreement This Filing
10.4 Asset Purchase Agreement-Accurate Design This Filing
10.5 Employment Agreement-Linder This Filing
10.6 Employment Agreement-Pearsall This Filing
10.7 Consulting Contract with Smith Consulting
Services, Inc. This Filing
21. Subsidiaries of the small business issuer Rubicon Medial, Inc., a Utah
corporation is the only subsidiary.
23. Consents of Experts and Counsel
23.1 Consent of HJ and Associates, LLC This Filing
23.2 Consent of Victor D. Schwarz, LLC This Filing
24. Powers of Attorney
24.1 Powers of Attorney are included on signature page(3)
All other Exhibits called for by Rule 601 of Regulation S-B are not
applicable to this filing.
<PAGE> R-71
(b) Financial Statement Schedules
All schedules are omitted because they are not applicable or because the
required information is included in the financial statements or notes thereto.
Item 28. Undertakings.
----------------------
(a) The undersigned small business issuer hereby undertakes:
(1) To file, during any period in which it offers or sells securities,
a post-effective amendment to this registration statement to: (i) Include any
prospectus required by Section 10(a)(3) of the Securities Act; (ii) Reflect in
the prospectus any facts or events which, individually or together represent a
fundamental change in the information in the registration statement; and (iii)
Include any material or changed information in the plan of distribution.
(2) For determining liability under the Securities Act, treat each
post-effective amendment as a new registration statement of the securities
offered, and the offering of the securities as at that time to be the initial
bona fide offering thereof.
(3) File a post effective amendment to remove from registration any of
the securities that remain unsold at the end of the offering.
(b) To provide to the underwriter at the Closing specified in the
underwriting agreement certificates in such denominations and registered in
such names as may be required by the underwriter to permit prompt delivery to
each purchaser.
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 (the "Act") may be permitted to directors, officers and
controlling persons of the small business issuer pursuant to the foregoing
provisions, or otherwise, the small business issuer has been advised that in
the opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the small business issuer 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 small business issuer will, unless in the opinion of its
counsel that matter has been settled by controlling precedent, submit to a
court of appropriate jurisdiction the question 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.
(d) The undersigned small business issuer hereby undertakes that it
will:
(1) For purposes of determining any liability under the Securities Act
that the information omitted from the form of prospectus filed as part of this
registration statement in reliance upon Rule 430A and contained in a form of
prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4) or 497(h)
under the Securities Act shall be deemed to be a part of this registration
statement as of the time the Commission declared it effective.
(2) For the purpose of determining any liability under the Securities
Act, that each post-effective amendment that contains a form of prospectus as
a new registration statement for the securities offered in the registration
statement, and that offering of the securities at that time as the initial
bona fide offering of those securities.
<PAGE>
<PAGE> R-72
SIGNATURES
In accordance with the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements of filing on Form SB-2 and authorized this
registration statement to be signed on its behalf by the undersigned,
thereunto duly authorized in the City of Salt Lake City, State of Utah on
December 7, 2000.
Rubicon Medical Corporation
By: /S/
----------------
Richard J. Linder
CEO, President, Director
In accordance with the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities indicated on December 7, 2000.
By: /s/ Chairman, and Director
---------------------------
David B. Berger
By: /s/
--------------------------- President and Chief Executive Officer,
Richard J. Linder (Principle executive officer) and
Director
By: /s/ Chief Financial Officer (principal
--------------------------- accounting and financial
Dennis M. Nasella officer) and Director
The above signed officer and/or director of Rubicon Medical Corporation,
a Delaware corporation (the "Corporation"), hereby constitutes and appoints
Richard J. Linder, and each of them, with full power of substitution and
resubstitution, as attorney to sign for the undersigned in any and all
capacities this Registration Statement and any and all amendments thereto, and
any and all applications or other documents to be filed pertaining to this
Registration Statement with the Securities and Exchange Commission or with any
states or other jurisdictions in which registration is necessary to provide
for notice or sale of all or part of the securities to be registered pursuant
to this Registration Statement and with full power and authority to do and
perform any and all acts and things whatsoever required and necessary to be
done in the premises, as fully to all intents and purposes as the undersigned
could do if personally present. The undersigned hereby ratifies and confirms
all that said attorney-in-fact and agent, or any of his substitute or
substitutes, may lawfully do or cause to be done by virtue hereof and
incorporate such changes as any of the said attorneys-in-fact deems
appropriate.
