As filed with the Securities and Exchange Commission on September __, 2000.
File No.:__________
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-----------------------
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
-------------------
MEDICAL TECHNOLOGY VENTURES, INC.
(Exact name of Registrant as specified in its charter)
<TABLE>
<S> <C> <C> <C>
DELAWARE 2834 65-0082053
(State or other jurisdiction (Primary standard industrial (I.R.S. Employer
of incorporation or organization) classification code number) Identification Number)
</TABLE>
EDWARD G. GREGER, M.D.
CHIEF EXECUTIVE OFFICER AND CHAIRMAN
MEDICAL TECHNOLOGY VENTURES, INC.
1133 WEST OCEAN DRIVE
P.O. BOX 510-099
KEY COLONY BEACH, FL 33051-0099
(305) 743-4334
(Address, including zip code, and telephone number,
including area code, of registrant's principal
executive offices)
--------------------
EDWARD G. GREGER, M.D.
CHIEF EXECUTIVE OFFICER AND CHAIRMAN
MEDICAL TECHNOLOGY VENTURES, INC.
1133 WEST OCEAN DRIVE
P.O. BOX 510-099
KEY COLONY BEACH, FL 33051-0099
(305) 743-4334
(Insert Name, address, zip and telephone number of agent for service)
---------------------
COPIES TO:
GERALD W. GRITTER, ESQUIRE
ENGLISH, MCCAUGHAN & O'BRYAN, P.A.
100 N.E. THIRD AVENUE, SUITE 1100
FT. LAUDERDALE, FLORIDA 33301
(954) 462-3300
---------------------
APPROPRIATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: Upon the
effective time of the merger of Hemokinetics with and into the Registrant
pursuant to terms of the Merger Agreement.
If the securities being registered on this Form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box. [ ]
---------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
==================================================================================================================================
Title of Each Class of Securities Amount to be Proposed Maximum Offering Proposed Maximum Aggregate Amount of
to be Registered Registered Price Per Unit Offering Price Registration Fee(1)
----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$.001 Par Value Common Stock 254,795 $.0171 $4,367 $1
==================================================================================================================================
</TABLE>
(1) PURSUANT TO RULE 457(F)(2) OF THE SECURITIES ACT OF 1933, AS AMENDED, THE
REGISTRATION FEE HAS BEEN ESTIMATED BASED ON THE BOOK VALUE OF THE SECURITIES TO
BE RECEIVED BY THE REGISTRANT IN EXCHANGE FOR THE SECURITIES TO BE ISSUED
HEREUNDER IN THE MERGER DESCRIBED HEREIN.
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.
[Red Herring]
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR 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.
[Red Herring]
<PAGE>
HEMOKINETICS, INC.
1133 WEST OCEAN DRIVE
P.O BOX 510-099
KEY COLONY BEACH, FL 33051-0099
September __, 2000
Dear Hemokinetics Shareholder:
The Board of Directors of Hemokinetics, Inc. ("Hemo") has approved a
merger ("Merger") in which Hemo will be merged with and into Medical Technology
Ventures, Inc., a Delaware corporation ("MTV"). MTV has developed a methodology
which it believes can radically improve the diagnosis and treatment of hormonal
related cancers, such as breast cancer and prostrate cancer, as well as lung
cancer and Acquired Immune Deficiency Syndrome (AIDS).
If the Merger is approved, each five and fourteen hundred fourteen ten
thousandth (5.1414) shares of your Hemo common stock will be exchanged for one
(1) share of MTV common stock. The Merger will turn your Hemo shares into shares
of MTV, a company that has developed promising research to diagnose and treat
cancer. The combined company will benefit from MTV's research and Hemo's large
shareholder base. If the Merger is consummated, MTV intends to have its stock
traded on the OTC Bulletin Board.
The Merger cannot be completed without the approval of Hemo's
shareholders. We have scheduled a special meeting for our shareholders to vote
on the Merger. YOUR VOTE IS IMPORTANT!
The date, time and place of the special meeting are:
September 29, 2000, 2 p.m.
English, McCaughan & O'Bryan, P.A.
100 N.E. Third Avenue, Suite 1100
Fort Lauderdale, FL 33301
Whether or not you plan to attend the special meeting, please vote by
completing the enclosed proxy card and mailing it to us. If you fail to return
your card, you will in effect vote against the Merger.
1
<PAGE>
I strongly support the Merger of Hemo and MTV and strongly recommend
that you vote in favor of the Merger. The Proxy Statement/Prospectus provides
detailed information about the proposed Merger. You should read it carefully.
Very truly yours,
-------------------------------------
Dr. Edward Greger, M.D.,
Chief Executive Officer, and Chairman
September ___, 2000
Key Colony Beach, FL
2
<PAGE>
HEMOKINETICS, INC.
1133 WEST OCEAN DRIVE
P.O. BOX 510-099
KEY COLONY BEACH, FLORIDA 33051-0099
------------------
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON SEPTEMBER 29, 2000
FORT LAUDERDALE, FL 33311
------------------
TO: THE SHAREHOLDERS OF HEMOKINETICS, INC.
A special meeting ("Special Meeting") of the shareholders of
Hemokinetics, Inc., a District of Columbia corporation ("Hemo"), will be held at
2:00 p.m. local time, on September 29, 2000, at the offices of English,
McCaughan & O'Bryan, P.A., 100 North East Third Avenue, Suite 1100, Fort
Lauderdale, Florida 33301 to consider and take action on the following
proposals:
1. PROPOSED MERGER. Your vote on the agreement describing the proposed
merger of Hemo with and into Medical Technology Ventures, Inc., a Delaware
corporation ("MTV") is important. If the Merger is approved, Hemo will be merged
with and into MTV and its separate corporate existence will cease at the time of
the Merger. Shareholders of Hemo will receive one share of MTV's common stock
for each five and fourteen hundred fourteen ten thousandth (5.1414) shares of
Hemo common stock. The Merger Agreement, which describes the terms of the Merger
in greater detail is attached to this Proxy Statement/Prospectus as Exhibit A.
2. OTHER MATTERS. Other business as may properly come before the
Special Meeting or any postponements or adjournments thereof.
Shareholders of record as of August 31, 2000 will be entitled to vote
at the Special Meeting. Details of the proposed transaction and other important
information concerning Hemokinetics and MTV are more fully described in the
accompanying Proxy Statement/Prospectus. Please give this material your careful
attention.
You may revoke your proxy in the manner described in the accompanying
Proxy Statement/Prospectus at any time before it has been voted at the Special
Meeting. Any shareholder attending the Special Meeting may vote in person even
if he or she has returned a proxy.
By Order of the Board of Directors:
-----------------------------------
Dr. Edward G. Greger, M.D.,
Chief Executive Officer and Chairman
3
<PAGE>
September __, 2000
Key Colony Beach, FL
WHETHER OR NOT YOU PLAN TO ATTEND THE SPECIAL MEETING, YOU ARE REQUESTED TO
SIGN, DATE AND MAIL PROMPTLY THE ENCLOSED PROXY CARD WHICH IS BEING SOLICITED ON
BEHALF OF THE HEMOKINETICS BOARD OF DIRECTORS. A RETURN ENVELOPE WHICH REQUIRES
NO POSTAGE IF MAILED IN THE UNITED STATES IS ENCLOSED FOR THAT PURPOSE.
4
<PAGE>
SUBJECT TO COMPLETION, DATED SEPTEMBER ___, 2000
PROXY STATEMENT/PROSPECTUS
------------------
PROXY STATEMENT OF HEMOKINETICS, INC.
FOR
SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON SEPTEMBER 29, 2000
------------------
PROSPECTUS OF MEDICAL TECHNOLOGY VENTURES, INC.
FOR SHARES OF COMMON STOCK TO BE ISSUED IN THE MERGER
------------------
This Proxy Statement/Prospectus is being furnished to holders of Common
Stock of Hemokinetics, Inc., a District of Columbia corporation ("Hemo"), in
connection with the solicitation of proxies by the Board of Directors of Hemo
for use at the Special Meeting of Shareholders of Hemo to be held at the offices
of English, McCaughan & O'Bryan , PA ("EMO"), 100 North East Third Avenue, Suite
1100, Ft. Lauderdale, Florida 33301on September 29, 2000 beginning at 2:00 p.m.,
local time, and at any and all adjournments or postponements thereof.
This Proxy Statement/Prospectus relates to the proposed merger (the
"Merger") of Hemo with and into Medical Technology Ventures, Inc., a Delaware
corporation ("MTV") pursuant to a Merger Agreement dated September __, 2000
between Hemo and MTV (the "Merger Agreement").
If the Merger is approved, Hemo will be merged with and into MTV and the
separate corporate existence of Hemo will cease. Each five and fourteen hundred
fourteen ten thousandth (5.1414) outstanding shares of Hemo common stock will be
converted into the right to receive one (1) share of MTV common stock.
This Proxy Statement/Prospectus also constitutes the Prospectus of MTV
with respect to an aggregate of approximately 254,795 shares of its $.001 par
value common stock to be issued in connection with the Merger (the "Merger
Shares"). Immediately after the consummation of the Merger, the Merger Shares
will represent an aggregate of approximately 10% of the outstanding shares of
MTV common stock after the Merger. MTV plans to list its common stock on the OTC
Bulletin Board upon the closing of the Merger.
FOR CERTAIN FACTORS WHICH SHOULD BE CONSIDERED IN EVALUATING THE
MERGER, SEE "RISK FACTORS" BEGINNING ON PAGE 10.
5
<PAGE>
This Proxy Statement/Prospectus and the accompanying form of proxy are
first being mailed to shareholders of Hemo on or about September __ 2000. A
shareholder of Hemo who has given a proxy may revoke it at any time prior to its
exercise. See "The Special Meeting."
THE SECURITIES TO BE ISSUED PURSUANT TO THE MERGER HAVE NOT BEEN APPROVED OR
DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROXY
STATEMENT/PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
The date of this Proxy Statement/Prospectus is September__, 2000.
6
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
PAGE
<S> <C>
SUMMARY .........................................................................................................9
RECOMMENDATIONS OF THE HEMO BOARD AND THE MTV BOARD..............................................................10
SPECIAL MEETING .................................................................................................10
RISK FACTORS.....................................................................................................10
THE PROPOSED MERGER..............................................................................................13
MANAGEMENT AND OPERATIONS AFTER THE MERGER.......................................................................19
PRO FORMA FINANCIAL STATEMENTS - MTV AFTER THE MERGER............................................................19
INFORMATION CONCERNING THE HEMO MEETING .........................................................................24
INFORMATION ABOUT HEMO...........................................................................................25
PRINCIPAL SHAREHOLDERS...........................................................................................27
MANAGEMENT'S PLAN OF OPERATIONS..................................................................................27
INFORMATION ABOUT MTV............................................................................................28
MANAGEMENT OF MTV................................................................................................32
PRINCIPAL SHAREHOLDERS...........................................................................................33
MANAGEMENT'S PLAN OF OPERATIONS..................................................................................34
DESCRIPTION OF MTV'S CAPITAL STOCK...............................................................................36
APPRAISAL RIGHTS.................................................................................................37
OTHER MATTERS....................................................................................................38
LEGAL MATTERS....................................................................................................39
EXPERTS ........................................................................................................39
7
<PAGE>
INDEPENDENT ACCOUNTANTS..........................................................................................39
INDEX TO FINANCIAL STATEMENTS....................................................................................40
EXHIBIT A........................................................................................................62
AGREEMENT AND PLAN OF MERGER
EXHIBIT B........................................................................................................75
OPINION OF ENGLISH, MCCAUGHAN & O'BRYAN, P.A.
EXHIBIT C........................................................................................................76
SECTION 29-373 OF THE DISTRICT OF COLUMBIA BUSINESS
CORPORATION ACT
EXHIBIT D........................................................................................................77
"FORM OF PROXY" [To be included in amended filing]
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS..................................................................78
SIGNATURES.......................................................................................................80
</TABLE>
8
<PAGE>
SUMMARY
This summary may not contain all the information that is important to
you. For a more complete understanding of the Merger, you should read the entire
document carefully.
HEMO
Since its formation in September 1980, Hemo has completed development
of two products: the Caltrac, a devise for measuring in calories a person's use
of energy, and Tritrac, an ergometer, a devise for measuring the work performed
by a group of muscles. All of Hemo's revenues have been derived from sales of
these products. Pursuant to an acquisition agreement with MTV in April 1997,
Hemo assigned all of its rights and interest in Caltrac and TriTrac to Reining
International, Ltd. ("RIL") in satisfaction of all sums owed to RIL.
Accordingly, since the sale of its working assets in April 1997, Hemo has had
virtually no operations.
Hemo's principal executive office is located at 1133 West Ocean Drive,
P.O. Box 510-099, Key Colony Beach, FL 33051-0099 and Hemo's telephone number is
(305) 743-4334.
MTV
MTV was organized under Delaware law in May 1984. MTV has developed a
methodology which it believes can radically improve the diagnosis and treatment
of hormone related cancers such as breast and prostate cancers, as well as lung
cancer and Acquired Immune Deficiency Syndrome (AIDS).
MTV's executive offices are located at 1133 West Ocean Drive, P.O. Box
510-099, Key Colony Beach, FL 33051-0099 and MTV's telephone number is (305)
743-4334.
THE MERGER AND RELATIONSHIP BETWEEN THE PARTIES
If the Hemo shareholders approve the Merger, Hemo will be merged with
and into MTV pursuant to the terms of a merger agreement dated September __,
2000 between Hemo and MTV (the "Merger Agreement"). As of the effective time of
the Merger, the separate corporate existence of Hemo will terminate, and each
five and fourteen hundred fourteen ten thousandth (5.1414) issued and
outstanding shares of Hemo will be converted into the right to receive one (1)
share of MTV common stock. In the aggregate, all Hemo shareholders will receive
254,795 shares of MTV common stock in the Merger.
Under the laws of the District of Columbia, at least two-thirds of the
shareholders of Hemo must approve the Merger. MTV owns 47.7% of Hemo's common
stock and has indicated that it will vote in favor of the Merger. Accordingly,
only 36.3% of Hemo's shareholders (other than MTV) need to approve the Merger.
9
<PAGE>
RECOMMENDATIONS OF THE HEMO BOARD AND THE MTV BOARD
Hemo's Board has recommended that Hemo's shareholders approve the
Merger because they believe that the combined company will offer increased value
to Hemo's shareholders. MTV has a well-defined business strategy. In contrast,
at the present date, Hemo is a mere shell and does not have a definite business
plan. If Hemo does not merge with MTV, it does not have any other viable
alternatives.
MTV's Board has recommended that its shareholders approve the Merger
because MTV will benefit from Hemo's shareholder base. After the Merger is
completed, MTV plans to list its common stock on the OTC Bulletin Board.
Accordingly, after the Merger is consummated, MTV will be a public company. As
part of a public company, MTV's shareholders may have certain advantages. Among
other things, the value of MTV's common stock may increase, because the shares
may be more liquid and an active trading market may develop. Additionally, MTV's
status as a public company may make it easier for MTV to raise capital in
subsequent financings.
SPECIAL MEETING
The Hemo shareholders will vote on the proposed Merger at a Special
Meeting held on September 29, 2000 at 2:00 p.m. at the offices of English,
McCaughan & O'Bryan, P.A. at 100 North East Third Avenue, Suite 1100, Ft.
Lauderdale, FL 33301.
RISK FACTORS
Shareholders of Hemo, in considering whether to approve the Merger
should consider the following matters. These matters should be considered in
conjunction with the other information included and incorporated by reference in
this Proxy Statement/Prospectus.
MERGER CONSIDERATION. The consideration to be given to MTV and Hemo
shareholders in the Merger has been determined through negotiations between MTV
and Hemo and does not have any direct relation to Hemo or MTV's earnings,
results of operations, book value, asset value or other criteria of value. There
can be no assurances that the Merger consideration represents an accurate
valuation of MTV or Hemo's business.
NO RECORD OF EARNINGS. MTV has a limited operating history and must be
considered a development stage company. Potential investors should be aware of
and understand the difficulties encountered by a new enterprise in its formative
stages, particularly in view of the intense competition from existing
established companies engaged in the same or similar businesses. These companies
may be better organized, are more strongly capitalized and may hold positions of
preeminence in the medical and health industry. There is no significant
information available now upon which to base any assumption that MTV's business
plan will materialize or prove successful.
10
<PAGE>
If MTV's plans prove to be unsuccessful, the stockholders will lose all or a
substantial part of their investment.
NEED FOR SIGNIFICANT ADDITIONAL CAPITAL. MTV will require significant
additional capital to implement both its short term and long term business
strategies. There can be no assurance that MTV will be able to raise capital or
issue debt in the public or private capital markets. Neither MTV nor Hemo have
any commitments or other arrangements for any future financing and there can be
no assurance that any debt or equity financing will be available on acceptable
terms if at all. The absence of significant additional capital whether raised
through private debt or equity financings will have a material adverse effect on
the Company's operations and prospects. Any equity financings would be dilutive
to MTV's shareholders and any debt financings will likely contain restrictive
covenants and additional debt service requirements which could adversely affect
MTV's operating results. Specifically, if the Hemo shareholders approve the
Merger, the Hemo shareholders who received MTV common stock in the Merger would
be diluted in the event of future equity offerings. The exact amount of the
dilution would depend upon the number of shares issued which, in turn, would be
dependent on the price at which the MTV's shares would be sold to the public,
which is difficult to estimate at this time.
GOVERNMENTAL REGULATION. The research and development of MTV's
methodology to treat and diagnose hormone related cancers is subject to
regulation by the Food and Drug Administration ("FDA") and other federal and
state agencies. Since neither hormone receptors or magnetic particle technology
(collectively, the "Technology") are new products, the approval process is the
short "New Drug Use." However, there can be no assurances that the FDA will
quickly approve the Technology. Current FDA procedures may delay initial
approval of the Technology. MTV cannot predict the extent to which it may be
affected by legislative and regulatory developments concerning the Technology.
Regulatory compliance issues or regulatory changes affecting MTV's operations
could have a material adverse effect upon MTV.
COMMERCIALIZATION OF THE TECHNOLOGY. MTV's results of operations will
depend, to a significant extent, upon its ability to successfully commercialize
the Technology. The Technology must be developed and tested, meet strict
regulatory standards, receive requisite regulatory approvals and be manufactured
on a cost-effective basis before successful commercialization can be achieved.
The development and commercialization process is time consuming and costly.
Delays in any part of the process or the inability of MTV to obtain regulatory
approval of its Technology could materially adversely affect MTV's future
results of operations. MTV believes that it will take approximately four years
before its hormone receptor technology will be ready for commercialization.
There can be no assurances that the Technology will be approved, or that it can
be successfully commercialized.
CONTROL BY DR. GREGER. Following the Merger, Dr. Edward Greger will own
approximately seventy four percent (74%) of the outstanding shares of MTV. Dr.
Greger will be able to effectively control most matters requiring approval by
the shareholders of MTV, including the election of a
11
<PAGE>
majority of the directors. The voting power of Dr. Greger under certain
circumstances also could have the effect of delaying or preventing a change in
control of MTV.
COMPETITION. While MTV is not aware of any current competition for
development of the Company's technology, there can be no assurance that
competitors will not arise, some of whom may have considerably greater financial
resources than the Company.
LIMITED PUBLIC MARKET FOR SECURITIES. If the Merger is approved by the
MTV shareholders, MTV plans to list its common stock on the OTC Bulletin Board.
A variety of brokerage house policies and procedures tend to discourage
individual brokers within those firms from dealing in non- NASDAQ listed stocks.
Such brokers are sometimes subject to internal restrictions on their ability to
recommend non-NASDAQ listed stocks because of the general presumption that such
securities may be highly speculative. Some of these policies and practices
pertain to the payment of broker's commissions and to time-consuming procedures
that make the handling of low priced stocks economically unattractive to
brokers. Holders of MTV's common stock may find it somewhat difficult to dispose
of or to obtain accurate quotations as to the market value of MTV's common
stock. The shares of MTV's common stock, notwithstanding successful completion
of the Merger, will not meet the eligibility criteria for their inclusion in the
NASDAQ inter-dealer automated securities quotation system.
NO DIVIDENDS ANTICIPATED. MTV, a development stage company, has not
paid any dividends upon its common stock and, by reason of its present financial
status and its contemplated financial requirements, does not anticipate paying
any dividends in the foreseeable future. MTV intends to retain earnings for the
foreseeable future for use in the operation and expansion of its business.
FORWARD-LOOKING STATEMENTS. The management of MTV and Hemo believe that
this Proxy Statement/Prospectus contains forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934, including statements regarding, among other
items, (i) that MTV will be able to successfully develop and commercialize the
Technology, (ii) that MTV will be able to develop an active trading market for
its common stock and (iii) that MTV will be able to successfully complete its
public offering. These forward-looking statements are based largely on
management's expectations and are subject to a number of risks and
uncertainties, certain of which are beyond MTV's and Hemo's control. Actual
results could differ materially from these forward-looking statements as a
result of the factors described in "Risk Factors," including, among others,
general economic conditions, the limited operating history of MTV, the unproven
market for MTV's services, governmental regulation and competitive factors. In
light of these risks and uncertainties, there can be no assurance that the
forward-looking information contained in this Proxy Statement/Prospectus will in
fact transpire.
12
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THE PROPOSED MERGER
The following summary of the material terms of the Merger Agreement is
qualified in its entirety by reference to the provisions of the Merger
Agreement, which is attached hereto as Exhibit A to this Proxy
Statement/Prospectus and is incorporated herein by reference.
GENERAL
The respective Boards of Directors of Hemo and MTV, meeting separately,
each approved and adopted the Merger Agreement and the Merger and authorized the
execution and performance of the Merger Agreement. The shareholders of MTV have
approved and adopted the Merger Agreement and the Merger and authorized the
execution and performance of the Merger Agreement as well.
BACKGROUND OF THE MERGER
In April 1993, William Reining, the Chief Executive Officer and
President of Hemo and Edward Greger, the Chairman of MTV, met to discuss a
proposed reverse merger of MTV with and into Hemo. The companies knew of one
another because William Reining, the CEO and President of Hemo, also served on
the Scientific Advisory Board of MTV. Additionally, Christopher Green, served on
the Board of Directors of Hemo and as an advisor to MTV. The parties were
interested in effectuating a merger of MTV with and into Hemo, a so called
"reverse merger." MTV was particularly interested in the reverse merger
structure, because after completing the merger, it would be a public company.
However, for various reasons, the parties did not reach any definitive
agreements on a reverse merger in 1993.
There were no further discussions between Hemo and MTV about a
strategic combination until September 1995. At that time, Hemo and MTV began
discussions regarding MTV's purchase of 625,000 shares of Hemo's common stock
for $10,000, which when completed, would represent 47.7% of Hemo's issued and
outstanding common stock. In November 1995, the parties reached an agreement
regarding MTV's acquisition of a controlling interest, which was outlined in an
Agreement in Principle dated November 8, 1995. The Agreement in Principle
contained six conditions.
One, MTV would purchase 625,000 shares of Hemo's common stock to be
held in treasury for $10,000. Two, William Reining would resign from his
position as the sole officer and director of Hemo and appoint William Casson and
Edward Greger as interim directors until a shareholder's meeting could be held.
Three, Casson and Greger, as officers of Hemo, would sell and assign all rights
in the Caltrac and TriTrac products, including all licenses and agreements
relating to these products and their trademarks to Reining International, Ltd.
("RIL") for cancellation of all sums due RIL by Hemo. RIL is a consulting
service solely owned by Mr. Reining. Four, William Casson and Edward Greger, as
the officers of Hemo, would sell all inventories, furniture, office equipment
and manufacturing equipment to RIL for the sum of One Dollar ($1.00). Five,
certain directors of Hemo
13
<PAGE>
agreed to accept a payment of $1,000 in the aggregate for the full settlement of
loans that they had previously made to Hemo. $1,000 of the $10,000 paid by MTV
for the 625,000 Hemo common shares would be specifically earmarked to be paid to
those certain former directors. Six, William Reining would agree to indemnify
MTV from any un-disclosed liability of Hemo.
Hemo and MTV amended this agreement on August 31, 1996. MTV agreed to
pay an additional $2,000 to settle any debts not outlined in the original
Agreement in Principle, except for the debt owed to American Stock Transfer. MTV
agreed that it would negotiate a settlement with American Stock Transfer
regarding Hemo's outstanding invoices and pay such settlement.
On April 14, 1997, MTV purchased 625,000 shares of Hemo's common stock
held in treasury, representing 47.7% of Hemo's issued and outstanding common
stock for $10,000. On that date, William Reining resigned from his position as
Chief Executive Officer and President of Hemo and Edward Greger and William
Casson were appointed to Hemo's Board. Additionally, William Casson was
appointed as the President and Treasurer of Hemo and Edward Greger was appointed
as the Vice-President and Secretary. In July 1998, William Casson left MTV and
Dr. Edward Greger remained as the sole officer and director of Hemo.
Since the April 1997 purchase of the 625,000 Hemo shares, MTV has had
effective control of Hemo. From April 1997 until September 1998, MTV focused on
its own business of developing a methodology to diagnose and treat hormonal
related cancers. In September 1998, MTV's Board discussed with its legal counsel
various alternatives for structuring a merger of Hemo and MTV. MTV's Board had
considered a reverse merger of MTV with and into Hemo. However, there were two
reasons why the Board decided to restructure the merger, as a merger of Hemo
with and into MTV. One, Hemo was delinquent in its required periodic filings
with the Securities and Exchange Commission and would require significant time
and expense to bring Hemo current with its filings. Two, it was considered more
desirable to have the merged company be a Delaware corporation, which MTV is,
versus a District of Columbia corporation, Hemo's jurisdicition of
incorporation. Accordingly, MTV's Board instructed its legal counsel, EMO, to
prepare a merger agreement in which Hemo would be merged with and into MTV.
The MTV Board and the holder of outstanding stock of MTV having more
than the minimum number of votes necessary to authorize the Merger, approved the
Merger and the Merger Agreement on August 22, 2000 by written consent. Notice of
such corporate action was promptly provided to the remaining MTV shareholders
pursuant to MTV's bylaws. Similarly, the Hemo Board approved the Merger and the
Merger Agreement on August 29, 2000 and recommended that the proposed Merger and
Merger Agreement be submitted to its shareholders for their vote at a Special
Meeting to be held as soon as possible.
REASONS FOR THE MERGER; RECOMMENDATION OF THE HEMO BOARD
Since 1988, Hemo has operated under severe capital constraints. Due to
its inability to obtain capital, Hemo has had virtually no active operations for
the past several years. As part of MTV's acquisition of a controlling interest
in Hemo in April 1997, it was agreed that Hemo would sell all
14
<PAGE>
of its rights to its Caltrac and TriTrac products to RIL in cancellation of all
amounts owed by Hemo to RIL. Accordingly, since April 1997, Hemo has had
virtually no operations.
Hemo's Board has recommended that Hemo's shareholders approve the
Merger because they believe that the combined company will offer increased value
to Hemo's shareholders. MTV has a well-defined business strategy. In contrast,
at the present date, Hemo is a mere shell and does not have a definite business
plan. If Hemo does not merge with MTV, it does not have any other viable
alternatives. The Board believed that there was only one potentially negative
factor in the proposed Merger. The Board was concerned that MTV was still in its
development stage and may not be able to obtain sufficient capital to finance
all of its research and development plans.
After taking into consideration all of the factors set forth above,
particularly given Hemo's lack of viable alternatives, the Board of Directors of
Hemo unanimously determined that the Merger was in the best interest of Hemo and
its shareholders, and that Hemo should proceed with the Merger at this time. In
making this decision, Hemo's Board gave great weight to the factor that Hemo did
not have any other viable alternatives.
REASONS FOR THE MERGER; RECOMMENDATION OF THE MTV BOARD; APPROVED BY MTV
SHAREHOLDERS
MTV's Board recommended that its shareholders approve the Merger because
the Board believed that MTV would benefit from Hemo's shareholder base. After
the Merger is completed, MTV intends to register its common stock under the
Exchange Act of 1934, thereby becoming a public company, and plans to become
listed on the OTC Bulletin Board. As Shareholders of a public company, the Board
determined that MTV's shareholders would have the following advantages.
*Based upon MTV's plans to list its common stock on the Bulletin Board
and complete a public offering, MTV's shareholders would have greater
liquidity, being able to sell their stock in the over-the counter
market.
*Based upon increased liquidity, the value of MTV's stock may increase.
Often, the shares of a public company are more valuable than the shares
of a private company.
*As a public company, MTV may have increased opportunities for
financing. MTV may be able to use its stock to finance future
acquisitions. Many shareholders of target acquisition companies would
prefer to receive shares of a publicly traded company as opposed to
shares of a privately held company.
*MTV will have increased visibility as a public company. This increased
visibility may lead to additional business opportunities for MTV.
Additionally, if MTV's story is marketed well and investors are
receptive, MTV may be able to raise additional capital with greater
ease at a later date.
15
<PAGE>
The MTV Board also considered potential disadvantages of completing the
Merger and becoming a public company, as follows:
*MTV will have an obligation to share certain information with the
public. All material information pertaining to MTV, including important
trade relationships must be disclosed. MTV will also be required to
reveal its financial information in quarterly and annual reports.
*MTV will have certain expenses that a private company does not have.
Some of these additional expenses will include legal, accounting and
transfer agent fees.
*Because of a public trading market, MTV's shareholders may put
pressure on MTV for short term results. Investor sensitivity to
earnings momentum can result in stock price volatility and intensify
pressures to show short-term profitability, possibly at the expense of
long-term goals.
After taking into consideration all of the factors set forth above, the
Board of Directors of MTV unanimously determined that the Merger was in the best
interest of MTV and its shareholders, and that MTV should proceed with the
Merger. In view of the wide variety of factors considered, both positive and
negative, MTV's Board did not find it practicable to, and did not, quantify or
otherwise assign relative weights to the specific factors considered. However,
all material factors considered by MTV's Board of Directors in reaching its
decision to approve the Merger are described above.
EFFECTIVE TIME
The Merger will become effective upon the filing of (i) a Certificate
of Merger with the Secretary of State of Delaware and (ii) Certificate of Merger
with the Secretary of the District of Columbia (the "Effective Time"). The
Effective Time is expected to occur as promptly as practicable after the
required approval of Hemo's shareholders at their Special Meeting, subject to
the terms and conditions contained in the Merger Agreement.
STRUCTURE OF THE MERGER; CONVERSION OF SHARES
At the Effective Time, Hemo will be merged with and into MTV pursuant
to the terms of the Merger Agreement. As of the Effective Time, the separate
corporate existence of Hemo will terminate, and each five and fourteen hundred
fourteen ten thousandth (5.1414) issued and outstanding shares of Hemo will be
converted into the right to receive one (1) share of MTV common stock. In the
aggregate, all Hemo shareholders will receive 254,795 shares of MTV Common Stock
in the Merger.
16
<PAGE>
PROCEDURE TO EXCHANGE OF CERTIFICATES
As soon as is practicable after the Effective Time, MTV's transfer
agent will mail a form of transmittal letter to holders of Hemo common stock.
The form of transmittal letter will contain instructions with respect to the
surrender of certificates representing Hemo common stock.
HEMO COMMON STOCK CERTIFICATES SHOULD NOT BE RETURNED WITH THE ENCLOSED PROXY
AND SHOULD NOT BE FORWARDED TO THE TRANSFER AGENT UNLESS AND UNTIL THE HEMO
SHAREHOLDER RECEIVES A LETTER OF TRANSMITTAL FOLLOWING THE EFFECTIVE TIME.
GOVERNMENTAL APPROVALS
Hemo and MTV do not need to obtain any federal or state governmental
approvals in order to effectuate the Merger.
TERMINATION OF THE MERGER AGREEMENT
Either party may terminate the Merger Agreement without liability to
either party if the Merger is not closed by December 31, 2000.
FEDERAL INCOME TAX CONSEQUENCES
For federal income tax purposes the Merger of Hemo with and into MTV,
in accordance with the terms of the Merger Agreement, will qualify as a
"reorganization" within the meaning of Section 368(a)(1)(A) of the Internal
Revenue Code of 1986, as amended (the "Code"). Provided that the Merger
qualifies as a "reorganization" within the meaning of Section 368(a)(1)(A) of
the Code, (i) no gain or loss will be recognized by either MTV or Hemo as a
result of the consummation of the Merger, (ii) no gain or loss will be
recognized by a shareholder of Hemo upon the receipt by such shareholder of
shares of MTV's Common Stock in exchange for such shareholder's shares of Hemo's
Common Stock in accordance with the terms of the Merger Agreement, (iii) the
aggregate tax basis of the shares of MTV Common Stock received by a shareholder
of Hemo will be the same as the aggregate tax basis of the shares of Hemo Common
Stock surrendered in exchange therefor reduced by the amount of any cash
received and increased by the amount of any gain recognized, and (iv) the
holding period of the shares of Common Stock received by a Hemo shareholder in
exchange for shares of Hemo Common Stock will include the period during which
the shares of Hemo Common Stock surrendered in exchange therefor were held,
provided the shares of Hemo Common Stock were held as capital assets at the
Effective Time.
THE FEDERAL INCOME TAX DISCUSSION SET FORTH ABOVE IS INCLUDED
FOR GENERAL INFORMATION ONLY. HEMO SHAREHOLDERS ARE URGED TO
CONSULT THEIR OWN TAX ADVISORS FOR MORE SPECIFIC AND DEFINITIVE
ADVICE AS TO THE FEDERAL INCOME TAX CONSEQUENCES TO THEM OF THE
17
<PAGE>
CONVERSION OF THEIR SHARES OF HEMO COMMON STOCK PURSUANT TO THE MERGER, AS WELL
AS ADVICE AS TO THE APPLICATION AND EFFECT OF STATE, LOCAL AND FOREIGN INCOME
AND OTHER TAX LAWS AND POSSIBLE AMENDMENTS TO SUCH LAWS.
ACCOUNTING TREATMENT OF THE MERGER
It is anticipated that the Merger will be accounted for as a
recapitalization of MTV on the merger date, in accordance with generally
accepted accounting principals. Therefore, the assets and liabilities of Hemo
will be recorded on MTV's accounting records at their historical cost with a
balancing charge to additional paid in capital.
RESTRICTIONS ON RESALE BY AFFILIATES
The shares of MTV common stock to be issued to Hemo shareholders in the
Merger have been registered under the Securities Act. These shares may be traded
freely and without restriction by those shareholders not deemed to be
"affiliates" of Hemo as that term is defined in the Securities Act. An affiliate
of Hemo, as defined in the Securities Act, is a person who directly or
indirectly, through one or more intermediaries, controls, is controlled by, or
is under common control with Hemo. Any subsequent transfer by an affiliate of
Hemo must be one permitted by the resale provisions of Rule 145 promulgated
under the Securities Act (or Rule 144 promulgated under the Securities Act, in
the case of such persons who become affiliates of Hemo) or as otherwise
permitted under the Securities Act. These restrictions are expected to apply to
the directors and executive officers of Hemo (as well as to certain other
related individuals or entities).
APPRAISAL RIGHTS
Holders of record of shares of Hemo common stock will have appraisal
rights with respect to their shares. Such shareholders who do not vote to
approve and adopt the Merger Agreement and the Merger may elect to have the fair
value of their shares, based on all relevant factors and excluding any element
of value arising from the accomplishment or expectation of the Merger,
judicially appraised and paid to them in cash. Such shareholders must deliver a
written demand for such appraisal to Hemo prior to the taking of the vote on the
approval and adoption of the Merger Agreement and the Merger and comply with the
other requirements of Section 29-373 of the District of Columbia Business
Corporation Act ("DCBCA"), the full text of which is attached to this Proxy
Statement/Prospectus as Exhibit C. Voting for the approval and adoption of the
Merger Agreement and the Merger, or delivering a proxy in connection with the
Special Meeting (unless the proxy specifies a vote against, or expressly
abstains from the vote on, the approval and adoption of the Merger Agreement and
the Merger) will constitute a waiver of a shareholder's right to seek appraisal
and will nullify any written demand for appraisal submitted by such shareholder.
Any deviation from the requirements of Section 29-373 may result in a forfeiture
of appraisal rights. See "Appraisal Rights."
18
<PAGE>
MANAGEMENT AND OPERATIONS AFTER THE MERGER
Following the Merger, all existing members of MTV's management team
will continue to run the combined business. The management team of MTV is as
follows: Dr. Edward G. Greger - Chairman of the Board and Chief Executive
Officer; Gil Dorland - President and Director, Ronald Anderson - Director and
Dr. William Regelson - Director and Director of Scientific Research. Please see
"MTV's Business - Management" on pages 32-33 for a detailed description of the
backgrounds of the MTV management team.
MTV will continue to focus on its business of developing and marketing
processes to diagnose and treat hormone related cancers such as breast and
prostate cancers, as well as lung cancer and Acquired Immune Deficiency Syndrome
(AIDS). MTV will also fulfill its duties as a public company, which duties
include SEC filings and establishing an investor relations program.
PRO FORMA FINANCIAL STATEMENTS - MTV AFTER THE MERGER
The accompanying pro forma condensed consolidated financial statements
give effect to the Merger whereby MTV will acquire all of the issued and
outstanding shares of Hemo in exchange for an aggregate of 254,795 shares of MTV
common stock. At the effective time, Hemo will be merged with and into MTV, and
its separate corporate existence will cease.
The accompanying pro forma condensed balance sheet as of December 31,
1999 and the pro forma condensed statement of operations for the fiscal year
ended December 31, 1999 have been prepared as if the Merger of Hemo and MTV had
been completed as of December 31, 1999 and January 1, 1999, respectively. The
unaudited pro forma financial information is presented for illustrative purposes
only and is not necessarily indicative of the consolidated financial position or
operating results that would have occurred if the Merger had been consummated on
the date specified, nor is it indicative of future operating results or
financial position. In the opinion of the management of Hemo and MTV, all
adjustments necessary to presently fairly the unaudited pro forma financial
information have been made.
The pro forma financial information should be read in conjunction with
the historical financial statements of MTV set forth at page 46 and Hemo set
forth at page 55.
19
<PAGE>
MEDICAL TECHNOLOGY VENTURES, INC.
PRO-FORMA BALANCE SHEET
DECEMBER 31, 1999
-----------------
(UNAUDITED)
<TABLE>
<CAPTION>
PRO-FORMA
HISTORICAL ADJUSTMENTS Pro-forma
------------------------------------------ ------------------ -------------------
Medical Medical
Technology Technology
Ventures, Hemokinetics, Ventures,
Inc. Inc. Inc.
------------------- ------------------- -------------------
ASSETS
------
CURRENT ASSETS
<S> <C> <C> <C> <C>
Cash $ 40,791 $ - $ 40,791
Loans receivable -
stockholder 316,695 - 316,695
------------------ ------------------- ------------------
Total Current Assets 357,486 - 357,486
------------------ ------------------- ------------------
FURNITURE AND
FIXTURES, NET 143 - 143
------------------ ------------------- ------------------
TOTAL ASSETS $ 357,629 $ - $ 357,629
================== =================== ==================
LIABILITIES AND STOCKHOLDERS' DEFICIENCY
----------------------------------------
CURRENT LIABILITIES
Accounts payable and
accrued expenses 2,412 1,637 4,049
Due to principal
stockholder - 8,500 (8,500)(2) -
------------------ ------------------- ------------------
Total Current
Liabilities 2,412 10,137 4,049
------------------ ------------------- ------------------
STOCKHOLDERS'
DEFICIENCY
Common stock 2,293 13,100 (12,845)(1) 2,548
Additional paid-in capital 535,787 3,021,494 (3,031,886)(1) 525,395
</TABLE>
See accompanying notes and assumptions to pro-forma
financial statements.
20
<PAGE>
MEDICAL TECHNOLOGY VENTURES, INC.
PRO-FORMA BALANCE SHEET
DECEMBER 31, 1999
-----------------
(UNAUDITED)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
(1)
Deficit (182,863) (3,044,731) 3,053,231(2) (174,363)
------------------ ------------------- ------------------
Total Stockholders'
Deficiency 355,217 (10,137) 353,580
------------------ ------------------- ------------------
TOTAL LIABILITIES
AND
STOCKHOLDERS'
DEFICIENCY $ 357,629 $ - $ 357,629
================== =================== ==================
</TABLE>
See accompanying notes and assumptions to pro-forma
financial statements.
21
<PAGE>
MEDICAL TECHNOLOGY VENTURES, INC.
PRO-FORMA STATEMENT OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
PRO-FORMA
HISTORICAL ADJUSTMENTS PRO-FORMA
----------------------------------------------------
For the 12 months
For the year ended ended For the year ended
December 31, 1999 December 31, 1999 December 31, 1999
Medical Medical
Technology Hemokinetics, Technology
Ventures, Inc. Inc. Ventures, Inc.
----------------------- ----------------------- -----------------------
<S> <C> <C> <C> <C>
REVENUES, NET $ - $ - $ -
COST OF SALES - - -
----------------------- ----------------------- -----------------------
GROSS PROFIT - - -
----------------------- ----------------------- -----------------------
OPERATING EXPENSES
Professional fees 66,746 - 66,746
General and
administrative 6,573 2,075 8,648
----------------------- ----------------------- -----------------------
Total Operating
Expenses 73,319 2,075 75,394
----------------------- ----------------------- -----------------------
LOSS FROM
OPERATIONS (73,319) (2,075) (75,394)
----------------------- ----------------------- -----------------------
OTHER INCOME
(EXPENSE)
Interest income 22,834 - 22,834
----------------------- ----------------------- -----------------------
NET LOSS $ (50,485) $ (2,075) $ (52,560)
======================= ======================= =======================
NET LOSS PER
COMMON SHARE -
BASIC AND DILUTED $ (0.02)
=======================
WEIGHTED AVERAGE
SHARES - BASIC AND
DILUTED
2,547,950
=======================
</TABLE>
See accompanying notes and assumptions to pro-forma
financial statements.
22
<PAGE>
MEDICAL TECHNOLOGY VENTURES, INC.
NOTES TO PRO-FORMA FINANCIAL STATEMENTS
---------------------------------------
(UNAUDITED)
(1) The accompanying pro-forma financial information shows the financial
statements of Medical Technology Ventures, Inc. and Hemokinetics, Inc.
regarding a planned merger with Medical Technology Ventures, Inc. as
the surviving entity. The pro-forma adjustments to the balance sheet
gives effect to the merger as if it occurred on December 31, 1999 and
the pro-forma statement of operations gives effect to the merger as if
it occurred on January 1, 1999. The merger is treated as a
recapitalization of Medical Technology Ventures, Inc. since
Hemokinetics, Inc. is an inactive shell corporation. Accordingly, the
assets and liabilities of Hemokinetics are recorded at their historical
cost on the books of Medical Technology Ventures, Inc. with a balancing
charge to additional paid-in capital. In addition, the common stock
issued to the Hemokinetics, Inc. stockholders is recorded as common
stock at par value with a balancing charge to additional paid- in
capital.
(2) Hemokinetics, Inc. maintains an $8,500 payable to Medical Technology
Ventures, Inc. Medical Technology Ventures, Inc. has fully reserved
this amount as bad debt in a previous year. Accordingly, this amount
has been eliminated in pro-forma consolidation against the accumulated
deficit.
(3) In August 2000, Medical Technology Ventures, Inc. amended its articles
of incorporation to increase its authorized number of shares of common
stock from 1,000 to 20,000,000 and decreased the par value of its
common stock from $0.1 to $0.001. In addition, the Board of Directors
and stockholders approved a 2,358 for 1 stock split. The accompanying
financial statements have been retroactively restated to reflect those
changes.
23
<PAGE>
INFORMATION CONCERNING THE HEMO MEETING PURPOSE, TIME AND PLACE
The Special Meeting of Hemo's shareholders will be held at the offices
of English, McCaughan & O'Bryan in Fort Lauderdale, Florida on September 29,
2000 at 2:00 p.m. (including any and all adjournments or postponements thereof).
At the Special Meeting, the Hemo shareholders will vote on the Merger Agreement
and the Merger of Hemo and MTV.
RECORD DATE, QUORUM AND VOTE REQUIRED
The Hemo Board has fixed the close of business on August 31, 2000 as
the record date for determining the holders of Hemo common stock entitled to
notice of, and to vote at, the Special Meeting. At the close of business on the
Hemo record date, there were 1,309,998.2 shares of Hemo common stock issued and
outstanding.
The presence at the Special Meeting, either in person or by proxy, of
the holders of a majority of the outstanding Hemo common stock is necessary to
constitute a quorum, yet pursuant to District of Columbia Statutes, the
affirmative vote of at least two-thirds of Hemo's outstanding common stock is
required to approve and adopt the Merger Agreement and the Merger. Under
applicable District of Columbia law, in determining whether the proposal to
approve and adopt the Merger Agreement and the Merger has received the requisite
number of affirmative votes, abstentions will be counted and have the same
effect as a vote against the proposal. Brokers who hold shares of Hemo's common
stock as nominees will not have discretionary authority to vote such shares in
the absence of instructions from the beneficial owners thereof. Any shares which
are not voted ("broker non-votes") because the nominee-broker lacks such
discretionary authority will be counted and have the same effect as a vote
against the proposal.
MTV beneficially owns 47.7% of Hemo's issued and outstanding common
stock. MTV has indicated that it will vote its Hemo shares in favor of the
Merger Agreement and the Merger. Accordingly, only 36.3% of Hemo's shareholders,
other than MTV, must approve the Merger Agreement and the Merger.
PROXIES
Shares of Hemo common stock represented by properly executed proxies
received in time for the Special Meeting will be voted at the Special Meeting in
the manner specified on such proxies. Proxies which are properly executed but
which do not contain voting instructions will be voted FOR approval of the
Merger Agreement and the Merger. It is not expected that any matter other than
approval of the Merger Agreement and the Merger will be brought before the
Special Meeting; however, if other matters are properly presented, the persons
named in such proxy will have authority to vote in accordance with their
judgement on any other such matter,
24
<PAGE>
including without limitation, any proposal to adjourn or postpone the meeting or
otherwise concerning the conduct of the Special Meeting.
The grant of a proxy on the enclosed Hemo proxy card does not preclude
a shareholder from voting in person at the Hemo Special Meeting. A shareholder
may revoke a proxy at any time prior to its exercise by (i) delivering, prior to
the Special Meeting, to Dr. Edward Greger, Chairman of Hemo, at 1133 West Ocean
Drive, P.O. Box 510-099, Key Colony Beach, Florida 33051-0099 a written notice
of revocation bearing a later date or time than the proxy, (ii) delivering to
Dr. Edward Greger, Chairman of Hemo, at the previously listed address, a duly
executed proxy bearing a later date or time than the revoked proxy; or (iii)
attending the Hemo Special Meeting and voting in person. Attendance at the
Special Meeting will not by itself constitute revocation of a proxy.
COSTS OF SOLICITATION
Hemo will bear the cost of solicitation of proxies from its
shareholders. In addition to solicitation by mail, the directors and officers of
MTV may solicit proxies from shareholders of Hemo by telephone, telegram or in
person. Arrangements will also be made with brokerage houses and other
custodians, nominees and fiduciaries for the forwarding of solicitation material
to the beneficial owners of stock held of record by such persons, and MTV will
reimburse such custodians, nominees and fiduciaries for their reasonable
out-of-pocket expenses in connection therewith.
INFORMATION ABOUT HEMO
BUSINESS
Since its formation in September 1980, Hemo has completed development
of two products: the Caltrac, a devise for measuring in calories a person's use
of energy, and Tritrac, an ergometer, a devise for measuring the work performed
by a group of muscles. All of Hemo's revenues have been derived from sales of
these products. Pursuant to an acquisition agreement with MTV in April 1997,
Hemo assigned all of its rights and interest in Caltrac and TriTrac to RIL in
satisfaction of all sums owed to RIL. Accordingly, since the sale of its working
assets in April 1997, Hemo has had virtually no operations.
EMPLOYEES
Hemo has no full-time employees. Dr. Edward Greger, the Chief Executive
Officer and Chairman of MTV has been overseeing operations ever since MTV
acquired a controlling interest in Hemo in April 1997.
25
<PAGE>
PROPERTIES
Hemo does not own a manufacturing plant nor the necessary equipment for
the research, development and manufacture of its products, and does not intend
to purchase facilities or major capital equipment due to the lack of working
capital. Hemo maintains office space located at 1133 West Ocean Drive, P.O. Box
510-099, Key Colony Beach, FL, currently at no cost.
LEGAL PROCEEDINGS
There are no legal proceedings pending to which Hemo is subject, nor to
the knowledge of Hemo are any such legal proceedings threatened.
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
Hemo has no changes in or disagreements with its accountant, Weinberg &
Company. P.A.
PRICE RANGE OF COMMON STOCK
Hemo's common stock was traded in the over-the counter market from 1981
- 1991. However, since 1991 Hemo stock has not been actively traded. Hemo
contacted several broker/dealers, but was unable to obtain information on
trading prices of the Hemo's common stock as of a recent date.
The approximately number of common stockholders of record of Hemo as of
August 31, 2000 was 1,301. This number does not reflect the number of persons
having a beneficial interest in shares held of record in "street name" with
broker/dealers.
DIVIDEND POLICY
Hemo has never paid cash dividends on its common stock. Payments of
dividends are within the sole discretion of Hemo's Board of Directors and will
depend, among other factors, upon earnings capital requirements and the
operating and financial condition of Hemo. At the present time, Hemo's
anticipated financial capital requirements are such that it intends to follow a
policy of retaining earnings in order to finance the development of its
business.
DIRECTORS AND OFFICERS OF HEMO
The sole officer and director of Hemo is Dr. Edward Greger. For
information about Dr. Greger's background, please see his biography on page 32
in "MTV- Management."
26
<PAGE>
PRINCIPAL SHAREHOLDERS
The following table contains information as of September ___, 2000, as
to the beneficial ownership of shares of common stock of Hemo of (i) all
officers and directors of Hemo, (ii) each person to the knowledge of Hemo at
that time, whom was the beneficial owner of 10% or more of the outstanding
common stock and (iii) all officers and directors of Hemo as a group. Except as
noted, each shareholder has sole voting and investment power with respect to all
shares of Hemo common stock beneficially owned by MTV. As of September ___,
2000, there were issued and outstanding 1,309,998.2 shares of common stock.
<TABLE>
<CAPTION>
NAME AND ADDRESS OF PERCENT OF CLASS
BENEFICIAL OWNER AMOUNT AND NATURE OF BENEFICIAL OWNERSHIP
--------------------------- ----------------- -----------------------
<S> <C> <C>
Dr. Edward Greger(1) 514,139 0
Sole Officer and Director
Medical Technology Ventures, 625,000 47.7
Inc. (1) Greater than 10% Beneficial
Owner
All Officers and Directors as a 514,139 0
Group (1 person)
</TABLE>
(1) Represents Dr. Edward Greger's 82.26% interest in Medical
Technology Ventures, Inc., a company in which Dr. Gregor is also an officer and
a director. Medical Technology Ventures, Inc. owns 625,000 shares of
Hemokinetics, Inc. The address of each listed shareholder who is an officer or
director of Hemo, or is the beneficial owner of 10% or more of the outstanding
stock of Hemo, is c/o Medical Technology Ventures, Inc., 1133 W. Ocean Drive,
P.O. Box 510-099, Key Colony Beach, FL 33051-0099.
MANAGEMENT'S PLAN OF OPERATIONS
The following discussion should be read in conjunction with Hemo's
audited financial statements for its fiscal years ended June 30, 1999 and June
30, 1998 set forth at page 55.
HISTORY
Since its formation in September 1980, Hemo has completed development
of two products: the Caltrac, a devise for measuring in calories a person's use
of energy, and Tritrac, an ergometer, a devise for measuring the work performed
by a group of muscles. All of Hemo's revenues in the past were derived from
sales of these products. Pursuant to an acquisition agreement with MTV in April
1997, Hemo assigned all of its rights and interest in Caltrac and TriTrac to
Reining
27
<PAGE>
International, Inc. in satisfaction of all sums owed to RIL. Accordingly, since
the sale of its working assets in April 1997, Hemo has had virtually no
operations.
LIQUIDITY AND CAPITAL RESOURCES
Hemo has been virtually dormant since the sale of the Caltrac and
TriTrac systems to Reining International in April, 1997. As a dormant entity,
its need for capital resources has been minimal, and when capital has been
required, Hemo has looked to its principal shareholder, MTV, to meet its cash
flow requirements. As it is anticipated that the Hemo shareholders will approve
the Merger Transaction, Hemo should expect nominal liquidity demands in the
interim, and for those instances which may arise creating a demand for capital,
Hemo will look to its principal stockholder, MTV, to provide such cash.
PROPOSED MERGER
Hemo intends to enter into the Merger Agreement with MTV, and the
Merger is subject to the fulfillment of certain conditions, including the
approval of Hemo shareholders. There can be no assurances that Hemo will be able
to complete the Merger, or even if the Merger is completed, that it will be on
terms acceptable to Hemo. If the proposed Merger takes place, Hemo shareholders
will own 10% of MTV's common stock after the Merger.
If the proposed Merger of Hemo and MTV does not take place, Hemo will
consider various other options. It is highly likely, however that management
will elect to liquidate and dissolve the company.
INFORMATION ABOUT MTV
BUSINESS
OVERVIEW
MTV has developed a methodology which it believes can radically
improve the diagnosis and treatment of hormonal related cancers such as breast
and prostate cancers, as well as lung cancer and Acquired Immune Deficiency
Syndrome (AIDS) (the "Technology").
The Technology combines existing proven scientific methods with
magnetic particle technology to provide a new avenue for the treatment and
diagnosis of these diseases. If successful, purely preventative chemotherapy can
be greatly reduced, saving the ravaging side effects of the treatment. This is a
new use of existing pharmaceutical agents requiring a reduced Federal Drug
Administration approval process. As a result, it is expected that the products
resulting from this breakthrough can come to market in a relatively short period
of time, perhaps three to five years from funding. MTV believes it has found new
uses for existing technology, which it believes will result in a highly
marketable contribution to the fight against cancer.
28
<PAGE>
MTV has developed the concept of utilizing hormone receptor technology
with ferro-fluid technology to produce a detection system for cancer as well as
a delivery system for therapy pinpointing medication to the diseased area.
Utilizing magnetic resonance imaging this system has the ability to detect even
one cancer cell by identifying the existence of hormones in areas associated
with cancer development. Using this technology the spread of cancer can be
tracked. If no spread is found, chemotherapy or radiation need not be utilized,
saving both money and debilitating side effects. These technologies exist now.
The development and FDA approval of these new uses of existing technologies is
MTV's primary business strategy. It is believed that the system for detection of
cancer is a technology which can be available for commercial use within a
relatively short time.
The Technology's delivery system targets medication specifically to the
affected area. This can greatly reduce the side effects of conventional
chemotherapy and other treatment by restricting toxic effects to the afflicted
area. An effective treatment without discomfort would be a major medical
breakthrough. The delivery system for lung cancer would combine magnetic
particle technology and microcrystal technology in order to provide an
aerosol-like delivery system which provides the basis for both detection and
treatment.
It is intended that the required feasibility studies and clinical tests
will be conducted by Bio Interface Technologies, Inc. ("BIT") and Haynes-Pharma
Logic ("Pharma-Logic"), the licensors of hormone receptor technology and
microcrystal technology. MTV intends to have ownership or exclusive rights to
all aspects of the Technology as it is developed and in its final form. It will
be MTV's strategy to market the products to major pharmaceutical firms under
sublicense agreements.
HORMONE RECEPTOR TECHNOLOGY
A key element to MTV's commercial programs is hormone receptor
technology. Using this methodology, agents are ingested or injected into the
body, linking with specific hormone cells. All hormone secreting cells have
receptors which bond with hormone specific agents. These agents are compounded
to link with a specific hormone such as estrogen or testosterone. This results
in the ability to direct the agent to the specific hormone locations. The agent
(also known as a "marker") hones in like an arrow to its target. Special markers
are developed for specific hormones. The importance of hormones in cancer
detection is that cancerous cells secret hormones in areas of the body where
they are not usually found. Both normal and cancerous cells in the breast secret
estrogen, but only cancer cells secret estrogen outside the breast.
An estrogen specific hormone receptor linking to estrogen cells outside
the breast would indicate the spread of cancer beyond the breast. This linkage
is undetectable unless there is a method of tracking the linkage. X-rays or
magnetic resonance imaging alone will not identify linkage. MTV believes it has
solved this problem utilizing a medical technological advancement (hormone
receptors) and magnetic particle technology resulting in a detection system with
far reaching medical and commercial implications.
29
<PAGE>
MTV's concept combines the hormone receptor technology with magnetic
particle science and standard magnetic resonance imaging usage. Magnetic
particles combined with hormone receptors are illuminated under magnetic
resonance imaging. Using an estrogen specific agent, the agent will bond to all
estrogen cells. The magnetic resonance imaging will indicate the presence of
estrogen both in the breast and outside of the breast. If even a single estrogen
cell exists outside the breast, magnetic resonance imaging will indicate its
presence, thus alerting the medical professional that cancer exists.
The standard treatment after breast surgery or other treatments is
chemotherapy to combat the potential spread of cancer which may exist outside
the breast. Chemotherapy is expensive and it has serious side effects. With
MTV's treatment system, doctors can prescribe chemotherapy treatment for the
those areas where cancerous cells previously existed. Thus, by giving smaller
doses of chemotherapy to targeted areas, the serious side effects of
chemotherapy can be minimized.
MICROCRYSTAL TECHNOLOGY
The ideal delivery method for treatment of lung cancer is an aerosol
which provides complete coverage of the lung. MTV also intends to develop an
aerosol-based detection technology using microcrystal technology. Microcrystal
technology involves coating sub-micron sized crystals of a water-insoluble
substance with lecithin. Lecithin is a natural body constituent and a component
of several foods. The FDA classifies lecithin as safe. Dependent upon the
substance, the coated substance alone would be the carrier, or fluorocarbons,
vegetable oils or mineral oils can utilized. Drug release rates, stability, and
other properties can be adjusted by using different oils or lecithin
compositions. With this technology, MTV's ferro-fluid technology concepts can be
implemented. MTV believes this methodology will result in a more accurate
diagnosis, eliminating the need for extensive exposure to x-rays. Further, a
reliable detection system can reduce the use of chemotherapy.
THE FDA APPROVAL PROCESS
Federal Drug Administration (FDA) approval is required for the
marketing of MTV's products. Since neither hormone receptors or magnetic
particle technology are new products, the approval process is expected to be the
shorter "New Drug Use." The following discussion describes the process for
developing the system and the resulting medical product and gaining FDA
approval.
FEASIBILITY STUDIES. The feasibility of combining magnetic particles
and hormone receptor agents must be established. Although MTV is confident of a
successful outcome, the actual synthesis has not been attempted. These studies
are intended to actually produce the marketable detection product. The
feasibility study will also test the product for stability, toxicity, strength,
and other aspects which could affect its safety and effectiveness. This phase is
estimated to take six months.
30
<PAGE>
PRODUCTION CAPACITY. The ability to produce the product in quantity is
required both for FDA approval and marketability. MTV intends to consult with
biochemists, biophysicists and industrial engineers to develop and demonstrate
methods of production. The modification of existing equipment will be required
to meet MTV's production needs. Three months is estimated for this phase.
ANIMAL TESTING. Animal testing, commonly known in the scientific
community as "mouse work," must be performed to study the system's
effectiveness. An acceptable mouse work program is expected to encompass
approximately one year.
HOSPITAL PROTOCOL. Clinical testing of the system (human testing) is
required to be conducted under the auspices of a hospital. Before this can be
accomplished, the hospital must approve the project and the plan for carrying
out the study (protocol). The protocol must be approved by the hospital
decision-making structure. This process can take six months, however it can
proceed at the same time as the animal testing program is being conducted. MTV
has had preliminary discussions with regard to clinical trials.
FDA APPROVAL PROCESS AND CLINICAL TESTING. Upon the submission of the
mouse work data, hospital protocol, and other related documents, preliminary
meetings with the FDA are held. At these meetings the clinical testing program
is negotiated and approved. The clinical testing results which will lead to FDA
approval are also outlined at these meetings. It is estimated that clinical
testing and the approval process period will be two years.
The foregoing time frames are only estimates. The time required for
commercial approval may be shorter or more extended than these approximations.
At any time within this process, licensing of the technology may take place.
Pharmaceutical firms may prefer a fully developed and approved process. However,
the revenue potential of a detection system, which could be a standard procedure
for most breast cancer and prostate incidents, could lead to an early licensing
of the process. MTV will be actively seeking licensing throughout the research
and development process.
EMPLOYEES
At the present time, MTV does not have any full-time employees. MTV's
three executive officers, Dr. Edward Greger, Gil Dorland and Dr. William
Regelson have been overseeing MTV's operations.
LEGAL PROCEEDINGS
There are no legal proceedings pending to which MTV is subject, nor to
the knowledge of MTV are any such legal proceedings threatened.
31
<PAGE>
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
There have been no changes in or disagreements with MTV's accountants,
Weinberg & Company, P.A.
MARKET PRICE AND DIVIDENDS ON COMMON STOCK
MTV is a privately-owned corporation; therefore, there is no public
market price available with respect to MTV's common stock. Since its inception,
MTV has not paid any dividends with respect to MTV's common stock.
On August 31, 2000, MTV had 24 shareholders.
MANAGEMENT OF MTV
The following table sets forth the names, ages and positions of the
executive officers and directors of MTV:
NAME AGE POSITION
---- --- --------
Edward G. Greger, M.D. 72 Chief Executive Officer
and Chairman of the Board
Gil Dorland 62 President and Director
Ronald Anderson 59 Director
William Regelson, M.D. 74 Director and Director of
Scientific Research
Edward G. Greger, M.D. is Chairman of the Board and Chief Executive
Officer of MTV. Dr. Greger was previously the Director, Life Sciences, Central
Intelligence Agency, and is retired from that position. Dr. Greger is in charge
of the medical and scientific aspects of the Company's business. Dr. Greger is
not currently drawing any salary, but is reimbursed for expenses incurred on
behalf of MTV.
Gil Dorland is President and a Director of MTV. Mr. Dorland was
previously Vice President of Twentieth Century Fox (telecommuncations), a
Director of Ramada Inns, Inc., and President of Health Maintenance Programs,
Inc. Mr. Dorland is also the co-author of "Duty, Honor, Company," a book
prescribing West Point principles in business, and "The Business Idea," a book
which follows the development of a business idea from conception to
profitability. Mr. Dorland is not currently drawing any salary, but is
reimbursed for expenses incurred on behalf of MTV.
32
<PAGE>
Ronald Anderson is a Director of MTV and an accomplished entrepreneur
in his own right. Mr. Anderson has over the past 30 years owned and operated
Slumberland Furniture Company in Amery, Wisconsin, which operates two retail
furniture stores, staffed by thirty employees. In addition, Mr. Anderson owns
and manages significant rental real estate holdings in Wisconsin and is
currently developing a 184 lot subdivision, also in Wisconsin. Mr. Anderson also
formerly owned and operated King Koil Manufacturing for 18 years, staffed by 45
employees. Mr. Anderson currently sits on the Housing Authority Board of the
City of Amery, Wisconsin, where he has served for the past 10 years. Mr.
Anderson is not currently drawing any salary, but is reimbursed for expenses
incurred on behalf of MTV.
William Regelson, M.D. is a Director and also the Director of
Scientific Research for MTV. Dr. Regelson is a Professor of Medicine at Virginia
Commonwealth University, College of Medicine (Medical College of Virginia) in
Richmond, Virginia since 1967. He helped in the creation of the University's
Cancer Center and has joint appointments in Microbiology and BioMedical
Engineering. Both basic and clinical research in cancer has been his major
preoccupation for the past 40 years. For the past 20 years he has also focused
on studies in the physiology of aging, and was Research Director of a private
foundation in Washington, D.C. (FIBER) from 1980-1985, stimulating research in
the biology of aging. In connection with involvement with FIBER, Dr. Regelson
has collaborated in writing two popular books, The Melatonin Miracle, and The
Super Hormone Promise (Simon & Shuster) dealing with the decline of reproductive
hormones as key factors in the aging process. For the past five years, apart
from his interest in cancer, Dr. Regelson has done work regarding Alzheimer's
Disease as related to defects in the microcirculation of the brain. He is also
interested in the role of age and the disease related decline in native hormones
such as DHEA, governing resistance to cancer, infection and stress. He is a
coinventor of a novel hearing aid, now on the market, and a new
anti-inflammatory agent currently under development. He has consulted for the
pharmaceutical industry, cosmetic companies, and is involved in the development
of Nutriceuticals as vitamin and antioxidant nutritional supports. Currently,
aside from cancer research, Dr. Regelson is interested in the development of
novel antioxidants, artificial blood, and the fabrication of an auxiliary heart
using novel methods for enhancing pulsatile flow. He has published over 200
scientific articles during his academic career. Dr. Regelson is not currently
drawing any salary, but is reimbursed for expenses incurred on behalf of MTV.
PRINCIPAL SHAREHOLDERS
The following table contains information as of August 31, 2000, as to
the beneficial ownership of shares of common stock of MTV of (i) all officers
and directors of MTV, (ii) each person whom to the knowledge of MTV at that
time, was the beneficial owner of 10% or more of the outstanding stock and (iii)
all officers and directors of MTV as a group. As of August 31, 2000 there were
issued and outstanding 2,293,155 shares of common stock. In contemplation of the
Merger,
33
<PAGE>
the Board of Directors effectuated a forward stock split of 2,358 shares for
each share owned as of August 22, 2000.
<TABLE>
<CAPTION>
NAME AND ADDRESS OF PERCENT OF CLASS
BENEFICIAL OWNER AMOUNT AND NATURE OF BENEFICIAL OWNERSHIP
--------------------------- ----------------- ------------------------
<S> <C> <C>
Edward G. Greger, M.D.(1) 1,886,400 83%
Gil Dorland(1) 0 0%
Ronald Anderson(1) 0 0%
William Regelson(1) 0 0%
All Officers and Directors as a 1,886,400 83%
Group (4 persons)
</TABLE>
(1) Unless otherwise indicated and subject to applicable community
property laws, each shareholder has sole voting and investment power with
respect to all shares of MTV common stock beneficially owned by such
shareholder. Unless otherwise indicated, the address of each shareholder is c/o
Medical Technology Ventures, Inc., 1133 W. Ocean Drive, P.O. Box 510-099, Key
Colony Beach, FL 33051-0099.
MANAGEMENT'S PLAN OF OPERATIONS
The following discussion should be read in conjunction with MTV's
audited financial statements for its fiscal years ended December 31, 1999 and
December 31, 1998, attached hereto at page 46.
HISTORY AND PROSPECTIVE STRATEGIC ALLIANCES
MTV was incorporated under Delaware law on May 29, 1984 by its founder,
Dr. Edward Greger. During its first eight years of existence, MTV was relatively
inactive. In 1992 and 1993, MTV began to develop its business strategy of
developing a technology which would detect and treat hormonal related cancers
and certain pulmonary disorders. At this time, MTV negotiated preliminary
agreements with two research groups. In 1993, MTV reached a preliminary
agreement with Bio Interface Technologies, Inc. ("BIT"). BIT would perform
research to develop a new generation of diagnostic contrast agents and new drug
delivery system, using BIT's proprietary tumor specific, hormone-based contrast
agent in combination with magnetic particles.
MTV had also reached a preliminary accord with RTP Pharma, Inc. RTP
Pharma, Inc. would develop a system of pulmonary disease detection and drug
delivery system utilizing its patented lecithin-based Microcrystal Drug Delivery
Technology in combination with magnetic particles and currently utilized drug
compounds.
34
<PAGE>
The proposed agreements between MTV, BIT and RTP Pharma, Inc. would
grant MTV exclusive rights to the use of proprietary technologies and
information, and for use of any patents issued, filed and to be filed covering
the respective technologies as those patents related to the products to be
initially developed, and to future products to be developed under the
agreements.
In 1993, MTV also negotiated the terms of a strategic alliance with
Ferrofluidics Corporation ("Ferrofluidics") wherein Ferrofluidics would develop
magnetic/ferrous particles to meet the specific needs of the breast cancer and
lung cancer projects and subsequent projects to be undertaken at a future time.
Ferrofluidics is one of the world leaders in the development and application of
ferrous particles.
None of the aforementioned preliminary agreements were actually
executed by the parties due to MTV's absence of adequate funding at the time the
negotiations occurred. MTV's plan is to renew the preliminary agreements once
funding is available.
In November 1998, MTV re-established its relationships with BIT and
Ferrofluidics. BIT and Ferrofluidics have each indicated that they are eager to
execute upon the parties' previously negotiated strategic alliances with MTV.
MTV intends to also reestablish its relationship with RTP Pharma, Inc.
BUSINESS STRATEGY
In the next few months, MTV plans to review the hormone receptor
research to be prepared by BIT. Before entering into a definitive agreement with
BIT, MTV wants to confirm (i) that the hormone receptors are patentable and (ii)
that MTV will own or have exclusive rights to any patents for the hormone
receptor. MTV's management estimates that it will take approximately six months
to review the existing research.
After the research has been conducted and the results verified, MTV
will then ask BIT to perform the feasibility studies and clinical tests. As this
time, MTV also plans on entering into an exclusive supply agreement with
Ferrofluidics. MTV anticipates that conclusion of development and feasibility
work within 12-18 months and conclusion of preliminary human trials within
twelve months. This accelerated timetable is possible since the technologies to
be employed are commercially available, magnetic particles are available and the
drug compounds to be used are presently in common use. In addition, because the
focus in catastrophic diseases such as breast cancer and lung cancer, the
regulatory review path is expected to be expeditious.
RESULTS OF OPERATION
Since the beginning of its development stage on January 1, 1993, MTV
has engaged in business development activities and has had no sales. Its
operating expenses since the beginning of its development stage on January 1,
1993 through April 30, 2000 have been approximately $188,000. These operating
expenses have consisted primarily of the following: reimbursement
35
<PAGE>
of business expenses incurred by officers and directors relating to
investigating business opportunities and establishing relationships, as well as
legal, accounting and consulting fees.
LIQUIDITY AND CAPITAL RESOURCES
MTV has financed its operations and research and development activities
primarily from sales of its common stock and capital contributions from its
founding shareholder, Dr. Greger. In November 1994 and July 1998, MTV completed
private offerings in the amount of $225,000 and $300,000, respectively. Net cash
used in operating activities since MTV's inception is approximately $161,597.
MTV believes that its current cash reserves will allow MTV to meet its
expected operating expenses for at least nine months following the date of this
Proxy Statement/Prospectus. MTV believes that its future working capital
requirements will be satisfied from future borrowing and/or sales by MTV of
additional securities. If MTV is unable to obtain adequate financing, it may be
required to curtail its research or development activities. No additional
funding for any other purpose has been committed to date.
DESCRIPTION OF MTV'S CAPITAL STOCK
The following description of MTV's securities does not purport to be
complete and is subject in all respects to applicable law of the District of
Columbia and to the provisions of MTV's Certificate of Incorporation.
GENERAL
The Amended Certificate of Incorporation of MTV authorizes 20,000,000
shares of Common Stock, $.001 par value per share.
COMMON STOCK
MTV currently has 2,293,155 shares of common stock outstanding. Holders
of MTV's Common Stock are entitled to cast one vote for each share held of
record on all matters submitted to a vote of holders of MTV's common stock,
including the election of directors. There is no right to cumulate votes for the
election of directors. Shareholders holding a majority of the voting power of
the capital stock issued and outstanding and entitled to vote, represented in
person or by proxy, are necessary to constitute a quorum at any meeting of MTV's
shareholders, and the vote by the holders of a majority of such outstanding
shares is required to effect certain fundamental corporate changes such as
liquidation, merger or amendment of MTV's Certificate of Incorporation.
Holders of MTV's common stock are entitled to receive dividends pro
rata based on the number of shares held, when, as and if declared by MTV's Board
of Directors, from funds legally
36
<PAGE>
available therefore. In the event of liquidation, dissolution or winding up of
the affairs of MTV, all assets and funds of MTV remaining after the payment of
all debts and other liabilities shall be distributed, pro rata, among the
holders of MTV common stock. Holders of MTV common stock are not entitled to
preemptive or subscription or conversion rights and there are no redemption or
sinking fund provisions applicable to MTV common stock. All outstanding shares
of MTV common stock are, and the shares of MTV common stock offered hereby will
be when issued, fully paid and non-assessable.
APPRAISAL RIGHTS
Holders of record of Hemo who do not vote in favor of the Merger
Proposal and who otherwise comply with the applicable statutory procedures
summarized herein will be entitled to appraisal rights under Section 29-373 of
the District of Columbia Business Corporation Act ("DCBCA"). A person having a
beneficial interest in shares of Hemo common stock held of record in the name of
another person, such as a broker or nominee, must act promptly to cause the
record holder to follow the steps summarized below properly and in a timely
manner to perfect appraisal rights.
The following discussion is not a complete statement of the law
pertaining to appraisal rights under the DCBCA and is qualified in its entirety
by the full text of Section 29-373 which is reprinted in its entirety as Exhibit
C. All references in Section 29-373 and in this summary to a "shareholder" or
"holder" are to the record holder of the shares of Hemo common stock as to which
appraisal rights are asserted.
Under the DCBCA, holders of shares of Hemo common stock ("Appraisal
Shares") who follow the procedures set forth in Section 29-373 will be entitled
to have their Appraisal Shares appraised by any court of competent jurisdiction
within the District of Columbia and to receive payment forthwith for the "fair
value" for their Appraisal Shares as of the day prior to the date on which the
vote was taken approving the merger, together with interest at the rate of 5%
per annum.
Under Section 29-366 of the DCBCA, where a proposed merger is to be
submitted for approval at a meeting of shareholders, the corporation, not less
than 20 days prior to the meeting, must notify each of its shareholders of
record entitled to vote at such meeting.
This Proxy Statement/Prospectus constitutes such notice to the holders
of Appraisal Shares and the applicable statutory provisions of the DCBCA are
attached to this Proxy Statement/Prospectus as Exhibit C. Any shareholder who
wishes to exercise such appraisal rights or who wishes to preserve his right to
do so should review the following discussion and Exhibit C carefully, because
failure to timely and properly comply with the procedures specified will result
in the loss of appraisal rights under the DCBCA.
37
<PAGE>
A holder of Appraisal Shares wishing to exercise such holder's
appraisal rights (a) must file a written objection to the Merger Proposal with
Hemo, prior to or at the September ____, 2000 meeting of shareholders at which
the Merger Proposal is submitted to vote, (b) must not vote in favor of the
Merger Proposal and (c) within 20 days after the Merger is effected, must make
written demand on MTV for payment of the fair value of his or her shares as of
the day prior to the date on which vote was taken approving the Merger. Such a
demand shall state the number and class of the shares owned by the dissenting
shareholder. Any shareholder failing to make demand within the 20 day period
shall be bound by the terms of the Merger.
All written demands for appraisal should be sent or delivered to
English, McCaughan & O'Bryan, P.A., 100 N.E. Third Avenue, Suite 1100, Fort
Lauderdale, Florida 33301, Attention: Gerald W. Gritter, Esq.
If within 30 days after the effective date of the Merger the value of
the shares is agreed upon between the shareholder exercising his or her
appraisal rights and MTV, payment for the Appraisal Shares shall be made within
90 days after the consummation of the Merger, or upon surrender of the
certificate or certificates representing Appraisal Shares. Upon payment of the
agreed value, the dissenting shareholder shall cease to have any interest in
Hemo.
If within the period of 30 days the shareholder and MTV do not agree on
fair value, the dissenting shareholder may, within 60 days after the expiration
of the 30 day period, file a petition in any court of competent jurisdiction
within the District of Columbia asking for a determination of the fair value of
the Appraisal Shares, and shall be entitled to judgment against MTV for the
amount of the fair value as of the day prior to the date on which the vote was
taken approving the Merger Proposal, together with interest at the rate of 5%
per annum to the date of the judgment. The judgment will be payable forthwith,
upon surrender of the certificate or certificates representing the shares of
Hemo. Upon payment of the judgment, the dissenting shareholder shall cease to
have any interest in the shares or in MTV.
The right of a dissenting shareholder to be paid the fair value of his
or her shares as provided by Section 29-373 shall cease if and when the
corporation abandons the Merger.
The foregoing discussion only summarizes Section 29-373. Hemo
shareholders are urged to review such section in its entirety which is included
as Exhibit C to this Proxy Statement/Prospectus. Any holder of Hemo common stock
who intends to dissent from the Merger should review the text of Section 29-373
carefully and should also consult with his or her attorney. Any Hemo shareholder
who fails to strictly follow the procedures set forth in Section 29-373 will
forfeit such dissenters' rights.
OTHER MATTERS
As of the date of this Proxy Statement/Prospectus, the Hemo Board knows
of no matters that will be presented for consideration at the Special Meeting
other than as described in this Proxy
38
<PAGE>
Statement/Prospectus. If any other matters shall properly come before the
Special Meeting or any adjournments or postponements thereof and be voted upon,
the enclosed proxy will be deemed to confer discretionary authority on the
individuals named as proxies therein to vote the shares represented by such
proxy as to any such matters. The persons named as proxies intend to vote or not
to vote in accordance with the recommendation of the management of MTV.
LEGAL MATTERS
The validity of the MTV common stock to be issued in the Merger will be
passed upon by English, McCaughan & O'Bryan, P.A. of Fort Lauderdale, Florida.
EXPERTS
The audited financial statements of MTV at December 31, 1999 and 1998,
and Hemo at June 30, 1999 and 1998, have been audited by Weinberg & Company,
P.A., independent auditors, as set forth in their reports thereon and
incorporated herein. Such audited financial statements have been incorporated
herein in reliance upon such reports given upon the authority of such firm as
experts in accounting and auditing.
INDEPENDENT ACCOUNTANTS
Representatives of Weinberg & Company, P.A. are expected to be present
at the Special Meeting. These representatives will have the opportunity to make
a statement if they desire to do so and will be available to respond to
appropriate questions.
39
<PAGE>
<TABLE>
<CAPTION>
INDEX TO FINANCIAL STATEMENTS
MEDICAL TECHNOLOGY VENTURES, INC. (A DEVELOPMENT STAGE COMPANY)
<S> <C>
Balance Sheet (unaudited) as of April 30, 2000 .......................................................42
Statements of Operations (unaudited) for the Four Months Ended April 30, 2000
and 1999 and for the Period from January 1, 1993 (inception of development
stage) to April 30, 2000 .............................................................................43
Statements of Cash Flows (unaudited) for the Four Months Ended April 30, 2000
and 1999 and for the Period from January 1, 1993 (inception of development
stage) to April 30, 2000 .............................................................................44
Notes to Financial Statements ........................................................................45
MEDICAL TECHNOLOGY VENTURES, INC. (A DEVELOPMENT STAGE COMPANY)
Report of Independent Auditors.......................................................................46
Balance Sheet of Medical Technology Ventures, Inc. at December 31, 1999..............................47
Statements of Operations of Medical Technology Ventures, Inc. for the years
ended December 31, 1999 and 1998 and for the period from January 1, 1993
(inception of development stage) to December 31, 1999................................................48
Statement of Changes in Stockholders' Equity of Medical Technology
Ventures, Inc. for the period from January 1, 1993 (inception of
development stage) to December 31, 1999..............................................................49
Statements of Cash Flows of Medical Technology Ventures, Inc. for the years
ended December 31, 1999 and 1998 and for the period from January 1, 1993
(inception of development stage) to December 31, 1999 ...............................................50
Notes to Financial Statements........................................................................51
HEMOKINETICS, INC.(A DISCONTINUED COMPANY)
Report of Independent Auditors.......................................................................55
Balance Sheet of Hemokinetics, Inc. at June 30, 1999.................................................56
40
<PAGE>
Statements of Operations of Hemokinetics, Inc. for the years ended
June 30, 1999 and 1998 ..............................................................................57
Statement of Changes in Stockholders' Deficiency of Hemokinetics, Inc.
for the years ended June 30, 1999 and 1998 ..........................................................58
Statements of Cash Flows of Hemokinetics, Inc. for the years
ended June 30, 1999 and 1998 ........................................................................59
Notes to Financial Statements........................................................................60
</TABLE>
41
<PAGE>
MEDICAL TECHNOLOGY VENTURES, INC.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEET
APRIL 30, 2000
--------------
<TABLE>
<CAPTION>
ASSETS
<S> <C>
Current Assets
Cash $ 17,584
Loan receivable - stockholder 333,428
---------
Total current assets 351,012
---------
Furniture and fixtures, net 124
---------
TOTAL ASSETS $ 351,136
=========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable and accrued expenses $ 825
---------
Total current liabilities 825
---------
TOTAL LIABILITIES 825
---------
Commitments and contingencies
STOCKHOLDERS' EQUITY
Common stock, $0.001 par value, 20,000,000 shares
authorized, 2,293,155 shares issued and
outstanding 2,293
Additional paid-in capital 535,787
Deficit accumulated during development stage (187,769)
---------
TOTAL STOCKHOLDERS' EQUITY 350,311
---------
TOTAL LIABILITES AND STOCKHOLDERS' EQUITY $ 351,136
=========
</TABLE>
See accompanying notes to financial statements
42
<PAGE>
MEDICAL TECHNOLOGY VENTURES, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF OPERATIONS
------------------------
<TABLE>
<CAPTION>
Cumulative From
January 1, 1993
(Inception of
Development
Stage) to Four Months Ended Four Months Ended
April 30, 2000 April 30, 2000 April 30, 1999
--------------- ---------------- -----------------
<S> <C> <C> <C>
REVENUES $ -- $ -- $ --
----------- ----------- -----------
EXPENSES
Auto expenses 29,627 -- --
Bad debt provision 12,524 4,024 930
Loss on investment 10,000 -- --
Contractual labor/consulting 12,636 -- --
Depreciation expense 373 19 32
Professional fees 155,308 8,349 44,757
Travel expenses 52,096 -- 1,500
General and administrative expenses 10,614 262 298
----------- ----------- -----------
TOTAL EXPENSES 283,178 12,654 47,517
----------- ----------- -----------
LOSS FROM OPERATIONS (283,178) (12,654) (47,517)
OTHER INCOME (EXPENSE)
Interest income 95,410 7,749 7,217
----------- ----------- -----------
NET LOSS $ (187,768) $ (4,905) $ (40,300)
=========== =========== ===========
Net loss per share - basic and diluted $ (0.09) $ (0.002) $ (0.02)
Weighted average number of shares
outstanding during the period -
basic and diluted 2,145,780 2,293,155 2,293,155
</TABLE>
See accompanying notes to financial statements
43
<PAGE>
MEDICAL TECHNOLOGY VENTURES, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CASH FLOWS
------------------------
<TABLE>
<CAPTION>
Cumulative From
January 1, 1993
(Inception of
Development
Stage) to Four Months Ended Four Months Ended
April 30, 2000 April 30, 2000 April 30, 1999
-------------- -------------- --------------
<S> <C> <C> <C>
Cash flows from operating
activities
Net loss $(187,768) $ (4,905) $ (40,300)
Adjustments to reconcile net loss
to net cash used in operating
activites:
Depreciation 373 19 32
Bad debt expense 8,500 -- --
Loss on investment 10,000 -- --
Changes in operating assets
and liabilities:
(Increase) decrease in:
Prepaid expenses -- -- --
Increase (decrease) in:
Accounts payable 824 (1,588) --
--------- --------- ---------
Net cash used in operating
activities (168,071) (6,474) (40,268)
--------- --------- ---------
Cash flows from investing
activities
Purchase of property and
equipment (498) -- --
Purchase of investment (10,000) -- --
Loan receivable from stockholder (333,427) (16,733) (20,039)
Due from Hemokinetics (8,500) -- --
--------- --------- ---------
Net cash provided by investing
activities (352,425) (16,733) (20,039)
--------- --------- ---------
Cash flows from financing
activities
Proceeds from sale of common
stock 538,080 -- --
--------- --------- ---------
Net cash provided by financing
activities 538,080 -- --
--------- --------- ---------
Net increase (decrease) in cash 17,584 (23,207) (60,307)
Cash and cash equivalents at
beginning of year -- 40,791 172,652
--------- --------- ---------
CASH AND CASH
EQUIVALENTS AT APRIL 30 $ 17,584 $ 17,584 $ 112,345
========= ========= =========
</TABLE>
See accompanying notes to financial statements
44
<PAGE>
NOTES TO FINANCIAL STATEMENTS
NOTE 1 BASIS OF PRESENTATION
------ ---------------------
The accompanying unaudited financial statements have been
prepared in accordance with generally accepted accounting
principles and the rules and regulations of the Securities and
Exchange Commission for interim financial information.
Accordingly, they do not include all the information and
footnotes necessary for a comprehensive presentation of
financial position and results of operations.
It is management's opinion, however, that all material
adjustments (consisting of normal recurring adjustments) have
been made which are necessary for a fair financial statement
presentation. The results for the interim period are not
necessarily indicative of the results to be expected for the
year.
For further information, refer to the financial statements and
footnotes, included in the Company's Form S-4 for the year
ended December 31, 1999.
NOTE 2 GOING CONCERN
------ -------------
The accompanying financial statements have been prepared
assuming that the Company will continue as a going concern.
The Company has incurred net losses and negative cash flows
from operating activities form inception through April 30,
2000 and has an accumulated deficit. These conditions raise
substantial doubt about the Company's ability to continue as a
going concern, and if substantial additional funding is not
acquired or alternative sources developed to meet the
Company's working capital needs, management will be required
to curtail its operations.
Management's plans are to merge with Hemokinetics and to seek
additional equity capital to implement its research and
development activities to develop alternative methodologies
regarding the treatment of certain cancers and other terminal
diseases. Management believes that actions presently being
taken to obtain additional funding provide the opportunity for
the Company to continue as a going concern.
NOTE 3 CAPITAL
------ -------
In August 2000, the Company amended its articles of
incorporation to increase its authorized number of shares of
common stock from 1,000 to 20,000,000 and decrease the par
value of its common stock from $0.10 to $0.001. In addition,
the Board of Directors and shareholders approved a 2,358 for 1
stock split.
All share quantities, amounts, per share data, and par value
in the accompanying financial statements have been
retroactively restated to reflect the above change.
45
<PAGE>
MEDICAL TECHNOLOGY VENTURES, INC.
(A DEVELOPMENT STAGE COMPANY)
FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
INDEPENDENT AUDITORS' REPORT
To the Board of Directors of:
Medical Technology Ventures, Inc.
(A Development Stage Company)
We have audited the accompanying balance sheet of Medical Technology Ventures,
Inc. (a development stage company) as of December 31, 1999 and the related
statements of operations, changes in stockholders' equity and cash flows for the
years ended December 31, 1999 and 1998 and for the period from January 1, 1993
(inception of development stage) to December 31, 1999. 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 conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly in all
material respects, the financial position of Medical Technology Ventures, Inc.
(a development stage company) as of December 31, 1999, and the results of its
operations and its cash flows for the years ended December 31, 1999 and 1998 and
for the period from January 1, 1993 (inception of development stage) to December
31, 1999, 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 8 to the
financial statements, the Company has suffered recurring losses from operations
that raise substantial doubt about its ability to continue as a going concern.
Management's plans in regard to these matters are also described in Note 8. The
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.
WEINBERG & COMPANY, P.A.
Boca Raton, Florida
February 28, 2000
46
<PAGE>
MEDICAL TECHNOLOGY VENTURES, INC.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEET
DECEMBER 31, 1999
-----------------
<TABLE>
<CAPTION>
ASSETS
------
<S> <C>
CURRENT ASSETS
Cash $ 40,791
Loans receivable - stockholder 316,695
---------
TOTAL CURRENT ASSETS 357,486
Furniture and fixtures, net 143
---------
TOTAL ASSETS $ 357,629
=========
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
CURRENT LIABILITIES
Accounts payable and accrued expenses $ 2,412
TOTAL CURRENT LIABILITIES 2,412
---------
TOTAL LIABILITIES 2,412
---------
Commitments and contingencies
STOCKHOLDERS' EQUITY
Common stock, $0.001 par value, 20,000,000 shares authorized,
2,293,155 shares issued and outstanding 2,293
Additional paid-in capital 535,787
Deficit accumulated during development stage (182,863)
---------
TOTAL STOCKHOLDERS' EQUITY 355,217
---------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 357,629
=========
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS
47
<PAGE>
MEDICAL TECHNOLOGY VENTURES, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF OPERATIONS
------------------------
<TABLE>
<CAPTION>
Cumulative From
January 1, 1993
(Inception of
Development
Stage) to Year ended Year ended
December 31, 1999 1999 1998
----------------- ---------------- --------------
<S> <C> <C> <C>
REVENUES $ -- $ -- $ --
----------- ----------- -----------
EXPENSES
Auto expenses 29,627 -- 6,087
Bad debt allowance 8,500 -- --
Loss on investment 10,000 -- --
Contractual labor/consulting 12,636 -- 8,736
Depreciation expense 354 95 159
Professional fees 146,959 66,746 69,308
Travel expenses 52,096 5,000 20,274
General and administrative expenses 10,352 1,478 4,201
----------- ----------- -----------
TOTAL EXPENSES 270,524 73,319 108,765
----------- ----------- -----------
LOSS FROM OPERATIONS (270,524) (73,319) (108,765)
OTHER INCOME (EXPENSE)
Interest income 87,661 22,834 19,147
----------- ----------- -----------
NET LOSS $ (182,863) $ (50,485) $ (89,618)
=========== =========== ===========
Net loss per share - basic and diluted $ (0.09) $ (0.02) $ (0.04)
Weighted average number of shares
outstanding during the period -
basic and diluted 2,138,803 2,293,155 2,240,245
</TABLE>
See accompanying notes to financial statements
48
<PAGE>
<TABLE>
<CAPTION>
MEDICAL TECHNOLOGY VENTURES, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
--------------------------------------------
FOR THE PERIOD FROM JANUARY 1, 1993 (INCEPTION OF DEVELOPMENT STAGE) TO DECEMBER 31, 1999
ACCUMULATED
DEFICIT
ADDITIONAL DURING THE
COMMON STOCK PAID-IN DEVELOPMENT SUBSCRIPTIONS
SHARES AMOUNT CAPITAL STAGE RECEIVABLE TOTAL
---------- ---------- ---------- ---------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C>
Common stock issued to founder 1,886,400 $ 1,886 $ (1,806) $ -- $ -- $ 80
Common stock issued for cash 185,103 185 156,815 -- -- 157,000
Contributed capital -- -- 10,000 -- -- 10,000
Net loss 1993 -- -- -- (405) -- (405)
---------- ---------- ---------- ---------- ---------- ----------
Balance, December 31, 1993 2,071,503 2,071 165,009 (405) -- 166,675
Common stock issued for cash 30,654 31 25,969 -- (3,000) 23,000
Net loss 1994 -- -- -- (12,142) -- (12,142)
---------- ---------- ---------- ---------- ---------- ----------
Balance, December 31, 1994 2,102,157 2,102 190,978 (12,547) (3,000) 177,533
Common stock issued for cash 49,518 50 41,950 -- (25,000) 17,000
Common stock refunds (5,895) (6) (4,994) -- -- (5,000)
Contributed capital -- -- 3,000 -- 3,000 6,000
Net loss 1995 -- -- -- (7,129) -- (7,129)
---------- ---------- ---------- ---------- ---------- ----------
Balance, December 31, 1995 2,145,780 2,146 230,934 (19,676) (25,000) 188,404
Payment of subscriptions
receivable -- -- -- --
Common stock refunds (5,895) (6) (4,994) -- -- (5,000)
Net loss 1996 -- -- -- 3,896 -- 3,896
---------- ---------- ---------- ---------- ---------- ----------
Balance, December 31, 1996 2,139,885 2,140 225,940 (15,780) -- 212,300
Common stock issued for cash 17,685 18 14,982 -- -- 15,000
Net loss 1997 -- -- -- (26,980) -- (26,980)
---------- ---------- ---------- ---------- ---------- ----------
Balance, December 31, 1997 2,157,570 2,158 240,922 (42,760) -- 200,320
Common stock issued for cash 141,480 141 299,859 -- -- 300,000
Common stock refunds (5,895) (6) (4,994) -- -- (5,000)
Net loss 1998 -- -- -- (89,618) -- (89,618)
---------- ---------- ---------- ---------- ---------- ----------
Balance, December 31, 1998 2,293,155 $ 2,293 $ 535,787 $ (132,378) $ -- $ 405,702
Net loss 1999 -- -- -- (50,485) -- (36,546)
BALANCE, DECEMBER 31, 1999 2,293,155 $ 2,293 $ 535,787 $ (182,863) $ -- $ 355,217
========== ========== ========== ========== ========== ==========
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS
49
<PAGE>
MEDICAL TECHNOLOGY VENTURES, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CASH FLOWS
------------------------
<TABLE>
<CAPTION>
Cumulative From
January 1, 1993
(Inception of
Development
Stage) to Year ended Year ended
December 31, 1999 December 31, 1999 December 31, 1998
----------------- ----------------- -----------------
<S> <C> <C> <C>
Cash flows from operating activities
Net loss $(182,863) $ (50,485) $ (89,618)
Adjustments to reconcile net loss
to net cash used in operating
Activities:
Depreciation 354 95 159
Bad debt expense 8,500 -- --
Loss on investment 10,000 -- --
Changes in operating assets
And liabilities:
(Increase) decrease in:
Prepaid expenses -- -- 980
Increase (decrease) in:
Accounts payable 2,412 (4,340) 6,752
--------- --------- ---------
Net cash used in operating
activities (161,597) (54,730) (81,727)
--------- --------- ---------
Cash flows from investing activities
Purchase of property and
equipment (498) -- --
Purchase of investment (10,000) -- --
Loan receivable from
Stockholder (316,694) (77,132) (43,869)
Due from hemokinetics (8,500) -- 1,500
Net cash provided by investing
activities (335,692) (77,132) (42,369)
--------- --------- ---------
Cash flows from financing activities
Proceeds from sale of common
stock 538,080 -- 295,000
Net cash provided by financing
activities 538,080 -- 295,000
--------- --------- ---------
Net increase (decrease) in cash 40,791 (131,862) 170,904
Cash and cash equivalents at
beginning of year -- 172,653 1,749
--------- --------- ---------
CASH AND CASH EQUIVALENTS AT
END OF YEAR $ 40,791 $ 40,791 $ 172,653
========= ========= =========
</TABLE>
See accompanying notes to financial statements
50
<PAGE>
MEDICAL TECHNOLOGY VENTURES, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
AS OF DECEMBER 31, 1999
-----------------------
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND ORGANIZATION
------ -----------------------------------------------------------
(A) Organization
------------------
Medical Technology Ventures, Inc. (the "Company") is a
development stage company which has developed concepts for
alternative methodologies regarding the treatment of certain
cancers and other terminal diseases. The Company was
originally incorporated in May 1984 under the name of
Ferro-Medical, Inc. and has been inactive since that time
except for the issuance of common stock pursuant to private
placements in 1993 and 1998 and certain expenses related to
investigating the business and developing relationships with
third parties. The Company is considered to have entered the
development stage when it began the process of raising equity
funds on January 1, 1993.
(B) Use of Estimates
----------------------
In preparing financial statements in conformity with generally
accepted accounting principles, management is required to make
estimates and assumptions that affect the reported amounts of
assets and liabilities and the disclosure of contingent assets
and liabilities at the date of the financial statements and
revenues and expenses during the reported period. Actual
results could differ from those estimates.
(C) Cash and Cash Equivalents
-------------------------------
For purposes of the cash flow statements, the Company
considers all highly liquid investments with original
maturities of three months or less at the time of purchase to
be cash equivalents.
(D) Investments
-----------------
The Company accounts for investments in non-marketable equity
securities in accordance with Accounting Principles Board
Opinion No. 18 ("APB 18") and related interpretations. Under
APB 18, investments in corporate joint ventures and other
common stock of less than 20% are generally accounted for
using the cost method while investments between 20% and 50%
are generally accounted for using the equity method.
Under the cost method, investments are recorded and reported
at original cost until they are partially or entirely disposed
of or the original cost value has been impaired. Under the
equity method, the investment is recorded at original cost and
periodically increased (decreased) by the investor's
proportionate share of earnings (losses) of the investee and
decreased by all dividends received by the investor from the
investee.
51
<PAGE>
MEDICAL TECHNOLOGY VENTURES, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
AS OF DECEMBER 31, 1999
-----------------------
(E) Property and Equipment
----------------------------
Property and equipment are stated at cost, less accumulated
depreciation. Expenditures for maintenance and repairs are
charged to expense as incurred. Depreciation is provided using
the straight-line method over the estimated useful lives of
the assets of five years.
(F) Income Taxes
------------------
The Company accounts for income taxes under the Financial
Accounting Standards Board Statement of Financial Accounting
Standards No. 109 "Accounting for Income Taxes" ('Statement
109"). Under Statement 109, deferred tax assets and
liabilities are recognized for the future tax consequences
attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their
respective tax bases. Deferred tax assets and liabilities are
measured using enacted tax rates expected to apply to taxable
income in the years in which those temporary differences are
expected to be recovered or settled. Under Statement 109, the
effect on deferred tax assets and liabilities of a change in
tax rates is recognized in income in the period that includes
the enactment date.
NOTE 2 CONCENTRATIONS OF CREDIT RISK
------ -----------------------------
Financial instruments which potentially subject the Company to
concentrations of credit risk consist principally of cash
deposits which, at times, exceed federally insured limits.
NOTE 3 LOAN RECEIVABLE - STOCKHOLDER
------ -----------------------------
The Company has entered into a loan agreement with its
principal stockholder whereby the stockholder will repay the
Company for non-compensatory cumulative draws through
December 31, 1999. The loan bears interest at 7%, is
unsecured, and is due six months after demand.
NOTE 4 INVESTMENT IN HEMOKINETICS, INC.
------ --------------------------------
On April 17, 1997 the Company acquired a 47.7% voting interest
in Hemokinetics, Inc. ("Hemokinetics"), an inactive publicly
held company with no recent operations, for a total purchase
price of $10,000. The investment is accounted for under the
equity method of accounting. As of December 31, 1997
Hemokinetics was inactive and had no material assets. The
Company determined that there was a loss in the value of the
investment, which was other than temporary. Accordingly, the
investment in Hemokinetics was reduced to its net realizable
value of zero as of December 31, 1997. The Company intends to
file a Form S-4 with the Securities and Exchange Commission
pursuant to the Securities Act of 1933, as amended, to merge
Hemokinetics into the Company, with the Company becoming the
surviving entity. The merger will be accounted for as a
recapitalization of the Company.
52
<PAGE>
MEDICAL TECHNOLOGY VENTURES, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
AS OF DECEMBER 31, 1999
-----------------------
NOTE 5 DUE FROM HEMOKINETICS
------ ---------------------
During 1997, the Company advanced $8,500 to Hemokinetics.
At December 31, 1997, Hemokinetics was inactive and had no
material assets. Accordingly, the Company has established a
100% allowance for doubtful accounts for this amount.
NOTE 6 INCOME TAXES
------ ------------
The Company has no income tax expense in 1999 and 1998 due to
its operating losses.
The tax effects of temporary differences that give rise to
significant portions of deferred tax assets and liabilities at
December 31, 1999 and 1998 are as follows:
1999 1998
---- ----
Deferred tax assets:
Net operating loss carryforward $ 62,173 $ 45,009
-------- --------
Total gross deferred assets 62,173 45,009
Less valuation allowance (62,173) (45,009)
-------- --------
Net deferred tax assets $ -- $ --
======== ========
At December 31, 1999, the company had net operating loss
carryforwards of approximately $182,000 available to offset
future taxable income expiring on various dates through 2019.
The valuation allowance at January 1, 1999 was $45,009. The
net change in the valuation allowance during 1998 was an
increase of $17,164.
NOTE 7 STOCKHOLDERS EQUITY
------ -------------------
(A) Common Stock
------------------
The Company has authorized 1,000 shares of common stock.
(B) Private Placements
------------------------
In March 1993 the Company initiated a private placement
offering pursuant to Regulation D to offer up to 250 shares of
common stock at a price of $2,000 per share. During the period
from March 1993 to December 31, 1997, the Company raised
$225,000 through the sale of 112.5 shares of common stock.
On April 1, 1998 the Company initiated a private placement
offering pursuant to Regulation D to offer up to 100 shares of
common stock at a price of $5,000 per share. During the period
from April to May 1998 the Company raised $300,000 from three
investors through the sale of 60 shares of common stock.
53
<PAGE>
NOTE 8 GOING CONCERN
------ -------------
The accompanying financial statements have been prepared
assuming that the Company will continue as a going concern.
The Company incurred a net loss of $50,485 and negative cash
flows from operating activities of $54,730 during 1999 and had
an accumulated deficit of $182,863 at December 31, 1999. These
conditions raise substantial doubt about the Company's ability
to continue as a going concern, and if substantial additional
funding is not acquired or alternative sources developed to
meet the Company's working capital needs, management will be
required to curtail its operations.
Management's plans are to merge with Hemokinetics (See Note 4)
and to seek additional equity capital to implement its
research and development activities to develop alternative
methodologies regarding the treatment of certain cancers and
other terminal diseases. Management believes that actions
presently being taken to obtain additional funding provide the
opportunity for the Company to continue as a going concern.
NOTE 9 SUBSEQUENT EVENTS
------ -----------------
In August 2000, the Company amended its Articles of
Incorporation to increase its authorized number of shares of
common stock from 1,000 to 20,000,000 and decrease the par
value of its common stock from $0.1 to $0.001. In addition,
the Board of Directors and shareholders approved a 2,358 for 1
stock split.
All share quantities, amounts, per share data, and par value
in the accompanying financial statements have been
retroactively restated to reflect the above changes.
54
<PAGE>
HEMOKINETICS, INC.
FINANCIAL STATEMENTS
JUNE 30, 1999 AND 1998
INDEPENDENT AUDITORS' REPORT
To the Board of Directors of:
Hemokinetics, Inc.
We have audited the accompanying balance sheet of Hemokinetics, Inc. as of June
30, 1999 and the related statements of operations, changes in stockholders'
deficiency and cash flows for the years ended June 30, 1999 and 1998. 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 conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements are free of material
misstatements. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above, present fairly, in
all material respects, the financial position of Hemokinetics, Inc. as of June
30, 1999 and the results of its operations and its cash flows for the years
ended June 30, 1999 and 1998, 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 5 to the
financial statements, the Company has been inactive for several years, closed
its only bank account in July 1998, and intends to merge with another
corporation that, as a result of the merger, will be the surviving entity. This
raises substantial doubt about its ability to continue as a going concern. The
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.
WEINBERG & COMPANY, P.A.
Boca Raton, Florida
May 22, 2000
55
<PAGE>
HEMOKINETICS, INC.
BALANCE SHEET
JUNE 30, 1999
<TABLE>
<CAPTION>
<S> <C>
ASSETS
TOTAL ASSETS $ --
===========
LIABILITIES AND STOCKHOLDERS' DEFICIENCY
CURRENT LIABILITIES
Accounts payable $ 1,637
Due to principal stockholder 8,500
-----------
TOTAL LIABILITIES 10,137
-----------
STOCKHOLDERS' DEFICIENCY
Common stock, $0.01 par value, 26,250,000 shares authorized 1,309,998
shares issued and outstanding 13,100
Additional paid-in capital 3,021,494
Accumulated deficit (3,044,731)
TOTAL STOCKHOLDERS' DEFICIENCY (10,137)
-----------
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIENCY $ --
===========
</TABLE>
See accompanying notes to financial statements
56
<PAGE>
HEMOKINETICS, INC.
STATEMENT OF CHANGES IN STOCKHOLDERS' DEFICIENCY
FOR THE YEARS ENDED JUNE 30, 1999 AND 1998
------------------------------------------
<TABLE>
<CAPTION>
1999 1998
----------- -----------
<S> <C> <C>
REVENUES $ -- $ --
EXPENSES
General and administrative 2,075 1,690
----------- -----------
TOTAL EXPENSES 2,075 1,690
----------- -----------
NET LOSS $ (2,075) $ (1,690)
=========== ===========
Net loss per share - basic and diluted $ (.0016) $ (.0013)
Weighted average number of shares outstanding during the
period - basic and diluted 1,309,998 1,309,998
</TABLE>
See accompanying notes to financial statements
57
<PAGE>
HEMOKINETICS, INC.
STATEMENT OF CHANGES IN STOCKHOLDERS' DEFICIENCY
FOR THE YEARS ENDED JUNE 30, 1999 AND 1998
------------------------------------------
<TABLE>
<CAPTION>
ADDITIONAL
COMMON STOCK PAID-IN ACCUMULATED
SHARES AMOUNT CAPITAL DEFICIT TOTAL
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance, June 30, 1997 1,309,998 $ 13,100 $ 3,021,494 $(3,040,966) $ (6,372)
Net loss 1997 -- -- -- (1,690) (1,690)
----------- ----------- ----------- ----------- -----------
Balance, June 30, 1998 1,309,998 13,100 3,021,494 (3,042,656) (8,062)
Net loss 1998 -- -- -- (2,075) (2,075)
----------- ----------- ----------- ----------- -----------
Balance, June 30, 1999 1,309,998 $ 13,100 $ 3,021,494 $(3,044,731) $ (10,137)
=========== =========== =========== =========== ===========
</TABLE>
See accompanying notes to financial statements
58
<PAGE>
HEMOKINETICS, INC.
STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED JUNE 30, 1999 AND 1998
------------------------------------------
<TABLE>
<CAPTION>
1999 1998
------- -------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $(2,075) $(1,690)
Adjustments to reconcile net loss to net cash
used in operating activities:
Increase (decrease) in:
Accounts payable 1,637 --
NET CASH USED IN OPERATING ACTIVITIES (438) (1,690)
------- -------
NET INCREASE (DECREASE) IN CASH (438) (1,690)
Cash and cash equivalents at beginning of year 438 2,128
------- -------
CASH AND CASH EQUIVALENTS AT END OF YEAR $ -- $ 438
======= =======
</TABLE>
See accompanying notes to financial statements
59
<PAGE>
HEMOKINETICS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
AS OF JUNE 30, 1999
-------------------
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND ORGANIZATION
------ -----------------------------------------------------------
(A) Organization
------------------
Hemokinetics, Inc. (the "Company") was incorporated in the
District of Columbia in September 1980 to engage in the
business of developing and marketing biomedical products and
processes. The Company has been inactive since July 1993 with
nominal royalty revenues and expenses. In April 1997, Medical
Technology Ventures, Inc., a privately held company, acquired
625,000 common treasury shares of the Company representing a
47.7% voting interest in the Company and all then existing
assets and residual future royalty revenues were assigned to
another principal stockholder. In addition, certain
liabilities to former officers and directors were forgiven. As
of July 1998, the Company closed its only bank account. (See
Note 5)
(B) Use of Estimates
----------------------
In preparing financial statements in conformity with generally
accepted accounting principles, management is required to make
estimates and assumptions that affect the reported amounts of
assets and liabilities and the disclosure of contingent assets
and liabilities at the date of the financial statements and
revenues and expenses during the reported period. Actual
results could differ from those estimates.
(C) Cash and Cash Equivalents
-------------------------------
For purposes of the cash flow statements, the Company
considers all highly liquid investments with original
maturities of three months or less at the time of purchase to
be cash equivalents.
(D) Income Taxes
-----------------
The Company accounts for income taxes under the Financial
Accounting Standards Board Statement of Financial Accounting
Standards No. 109 "Accounting for Income Taxes" ('Statement
109"). Under Statement 109, deferred tax assets and
liabilities are recognized for the future tax consequences
attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their
respective tax bases. Deferred tax assets and liabilities are
measured using enacted tax rates expected to apply to taxable
income in the years in which those temporary differences are
expected to be recovered or settled. Under Statement 109, the
effect on deferred tax assets and liabilities of a change in
tax
60
<PAGE>
HEMOKINETICS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
AS OF JUNE 30, 1999
-------------------
rates is recognized in income in the period that includes the
enactment date. At June 30, 1999, the Company has a
substantial net operating loss carryforward. However, on
merging with another corporation that will become the
survivor, the net operating loss carryforward will not be
available to be utilized against future earnings.
NOTE 2 CONCENTRATIONS OF CREDIT RISK
------ -----------------------------
Financial instruments which potentially subject the Company to
concentrations of credit risk consist principally of cash
deposits. At June 30, 1999, the Company had no deposits at
risk.
NOTE 3 DUE TO PRINCIPAL STOCKHOLDER
------ ----------------------------
At June 30, 1999, Medical Technology Ventures, Inc. ("MTV"), a
47.7% principal stockholder, was owed $8,500 relating to
payments made to the Company's stock transfer agent on behalf
of the Company.
NOTE 4 ACCOUNTS PAYABLE
------ ----------------
At June 30, 1999 accounts payable consisted of amounts due to
the stock-transfer agent.
NOTE 5 GOING CONCERN
------ -------------
The accompanying financial statements have been prepared
assuming that the Company will continue as a going concern.
The Company has been inactive for several years, closed its
only bank account in July 1998, and intends to merge with
Medical Technologies Ventures, Inc. which will become the
surviving corporation. (See Notes 1(A)). This condition raises
substantial doubt about the Company's ability to continue as a
going concern.
61
<PAGE>
EXHIBIT A
================================================================================
AGREEMENT AND PLAN OF MERGER
DATED AS OF SEPTEMBER ____, 2000
AMONG
MEDICAL TECHNOLOGY VENTURES, INC.
AND
HEMOKINETICS, INC.
THIS MERGER AGREEMENT (the "Agreement") is entered into on September
___, 2000, by and among MEDICAL TECHNOLOGY VENTURES, INC., a Delaware
corporation ("MTV") and HEMOKINETICS, INC., a District of Columbia corporation
("Hemokinetics").
RECITALS
The Boards of Directors of Hemokinetics and MTV believe that the merger
of Hemokinetics with and into MTV would be advantageous and beneficial and in
the best interests of MTV and Hemokinetics and their respective shareholders.
It is the intention of the parties hereto that: (i) Hemokinetics shall
be merged with and into MTV (the "Merger") (ii) effective as of Closing, each
outstanding share of the common stock of Hemokinetics will be converted into a
number of shares of the Merger Stock (as hereafter defined) equal to the number
of shares of Merger Stock divided by the number of shares of Hemokinetics common
stock outstanding as of the Closing Date; (ii) the issuance of the Merger Stock
shall be registered under the Securities Act of 1933, as amended (the
"Securities Act"), and under applicable state securities laws; and (iii) the
Merger shall qualify as a tax-free reorganization under Section 368(a)(1)(A) of
the Internal Revenue Code of 1986, as amended (the "Code").
AGREEMENT
NOW, THEREFORE, in consideration of the mutual covenants and agreements
set forth herein and intending to be legally bound, the parties hereto agree as
follows:
1. RECITALS AND DEFINITIONS.
(a) The foregoing RECITALS are true and correct, and are
incorporated herein and made a part hereof.
(b) For purposes of this Agreement, the terms set forth below
shall have the following meanings:
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<TABLE>
<S> <C>
MTV STATEMENTS - audited financial statements of MTV as of and for the fiscal
year ended December 31, 1999
HEMOKINETICS
STATEMENTS - audited financial statements of Hemokinetics as of and for the
fiscal year ended June 30, 1999, and unaudited financial
statements of Hemokinetics as of and for the six months
ended December 31, 1999
CLOSING - the consummation of the transaction of events set forth in
Section 11 hereof
CLOSING DATE - the day on which the Closing is held as set forth in Section 7
hereof and the time that Articles of Merger are filed in
accordance with the laws of the State of Delaware and the
District of Columbia
COMMON STOCK - Common Stock, $.001 par value per share, of MTV
MERGER - the merger of Hemokinetics with and into MTV which will
result in the conversion of each outstanding share of the
common stock of Hemokinetics into shares of the Merger
Stock
MERGER STOCK - 254,795 shares of MTV Common Stock
</TABLE>
2. THE MERGER.
(a) Hemokinetics and MTV agree that on the Closing Date
Hemokinetics shall be merged with and into MTV, which shall be the surviving
corporation. Pursuant to the Merger, each share of common stock of Hemokinetics
issued and outstanding immediately prior to the Closing shall, without any
action on the part of the holder thereof, be converted into a number of shares
of the Merger Stock (as hereafter defined) equal to the number of shares of
Merger Stock divided by the number of shares of Hemokinetics common stock
outstanding as of the Closing Date. No other consideration shall be payable to
the Hemokinetics stockholders in connection with the Merger. The issuance of the
Merger Stock will be registered pursuant to the Securities Act and applicable
state securities laws.
(b) From and after the Closing, the Articles of Incorporation
and Bylaws of MTV as in effect immediately prior to the Closing shall be the
Articles of Incorporation and Bylaws of MTV, as the surviving corporation, until
further amended.
3. REPRESENTATIONS AND WARRANTIES OF MTV. As a material
inducement to Hemokinetics to enter into this Agreement and consummate the
transactions contemplated hereby, MTV makes the following representations and
warranties to Hemokinetics. The representations and warranties
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are true and correct in all material respects at this date, and will be true and
correct in all material respects on the Closing Date as though made on and as of
such date.
(a) DUE ORGANIZATION. MTV is a corporation duly organized and
validly existing; its status is active; it is qualified to do business and in
good standing in each state where the properties owned, leased or operated, or
the business conducted, by them require such qualification and where failure to
so qualify would have a material adverse effect on their financial condition,
properties, business or results of operations. MTV has the power to own its
properties and assets and to carry on its business as now presently conducted.
(b) CAPITALIZATION. The authorized capitalization of MTV
consists of 20,000,000 shares of $.001 par value common stock of which 2,293,155
shares are currently issued and outstanding. All issued and outstanding shares
are duly authorized, validly issued, fully paid and non-assessable, and have
been issued in compliance with applicable federal and state securities laws and
regulations. Except for the foregoing, there are no outstanding or presently
authorized securities, warrants, preemptive rights, subscription rights or
options to issue any of MTV's securities.
(c) SHARES OF MERGER STOCK; NATURE OF TRANSACTIONS. The Merger
Stock will be validly and legally issued, free and clear of all liens,
encumbrances, transfer fees and preemptive rights, and will be fully paid and
non-assessable. When consummated, the transactions provided in this Agreement,
including the issuance and delivery of the Merger Stock, will constitute a
tax-free reorganization under Section 368(a)(1)(A) of the Code.
(d) MTV STATEMENTS. Schedule 3(d) contains the MTV Statements.
The MTV Statements and financial information contained therein present fairly
the financial condition of MTV for the periods covered (subject, in the case of
unaudited statements, to normal year-end audit adjustments which will not be
material to MTV, taken as a whole, in amount or effect). The MTV Statements have
been prepared in accordance with generally accepted accounting principles,
consistently applied. The books and records of MTV, financial and other, are in
all material respects complete and correct and have been maintained in
accordance with good business and accounting practices.
(e) UNDISCLOSED LIABILITIES. MTV does not have any liabilities
or obligations of any nature, fixed or contingent, matured or unmatured, that
are not shown or otherwise provided for in MTV Statements, except for
liabilities and obligations arising subsequent to the date of MTV Statements in
the ordinary course of business, none of which individually or in the aggregate
will be materially adverse to the business or financial condition of MTV. There
are no material loss contingencies (as such term is used in Statement of
Financial Accounting Standards No. 5 of the Financial Accounting Standards
Board) of MTV that will not be adequately provided for.
(f) MATERIAL ADVERSE CHANGE. Since the date of the most
recent MTV Statements, the business of MTV has been operated in the ordinary
course and there has not been:
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(i) Any material adverse change in the business,
condition (financial or otherwise), results of operations, prospects,
properties, assets, liabilities, earnings or net worth of MTV for such period or
at any time during such period.
(ii) Any material damage, destruction or loss
(whether or not covered by insurance) affecting MTV or its assets, properties or
businesses.
(iii) Any declaration, setting aside or payment of
any dividend or other distribution in respect of any shares of the capital stock
of MTV, or any direct or indirect redemption, purchase or other acquisition of
any such stock or any agreement to do so.
(iv) Any issuance or sale by MTV, or agreement by
MTV to sell or pledge any of its securities. No irrevocable proxies have been
given with respect to any securities of MTV.
(v) Any statute, rule, regulation or order
adopted by any governmental body, agency or authority (including orders of
regulatory authorities with jurisdiction over MTV) that materially and adversely
affects MTV or its business or financial condition.
(vi) Any material increase in the rate of
compensation or in bonus or commission payments payable or to become payable to
any of the salaried employees of MTV; provided, however, that this subsection
shall not restrict or limit MTV in any way from hiring additional personnel who
are required for their operations.
(vii) Any other events or conditions of any
character that may reasonably be expected to have a materially adverse effect on
MTV or their business or financial condition.
(g) LITIGATION. There are no actions, suits, claims,
investigations or legal, administrative or arbitration proceedings pending or,
to the knowledge of MTV, threatened against MTV, whether at law or in equity, or
before or by any federal, state, municipal, local, foreign or other governmental
department, commission, board, bureau, agency or instrumentality, nor does MTV
know of any basis for any such action, suit, claim, investigation or proceeding.
(h) COMPLIANCE: GOVERNMENTAL AUTHORIZATIONS. MTV has complied
in all material respects with all federal, state, local or foreign laws,
ordinances, regulations and orders applicable to its business, including without
limitation, federal and state securities, banking collection and consumer
protection laws and regulations that, if not complied with, would materially and
adversely affect its businesses. MTV has all federal, state, local and foreign
governmental licenses and permits necessary for the conduct of its business.
Such licenses and permits are in full force and effect. MTV knows of no
violations of any such licenses or permits. No proceedings are pending or
threatened to revoke or limit the use of such licenses or permits.
(i) TAX MATTERS. MTV has, or at the time of the Closing
hereunder will have, filed all federal, state and local tax or related returns
and reports due or required to be filed, which reports will accurately reflect
in all material respects the amount of taxes due. MTV has paid all amounts or
taxes or assessments that would be delinquent if not paid as of the date of this
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Agreement, and will have paid such required amounts as of the Closing Date.
There are no tax liens with respect to any properties owned by MTV.
(j) DUE AUTHORIZATION. Subject only to approval of this
Agreement by MTV's shareholders, this Agreement has been duly authorized,
executed and delivered by MTV and constitutes a valid and binding agreement of
MTV enforceable in accordance with its terms, except as such enforcement may be
limited by applicable bankruptcy, insolvency, moratorium, and other similar laws
relating to, limiting or affecting the enforcement of creditors rights generally
or by the application of equitable principles. Neither the execution and
delivery of this Agreement, nor the consummation of the transactions
contemplated hereby, nor compliance with any of the provisions hereof, will
violate any order, writ, injunction or decree of any court or governmental
authority, or violate or conflict with in any material respect or constitute a
default under (or give rise to any right of termination, cancellation or
acceleration under) any provisions of MTV's Articles of Incorporation or Bylaws,
the terms or conditions or provisions of any note, bond, lease, mortgage,
obligation, agreement, understanding, arrangement or restriction of any kind to
which MTV is a party or by which MTV or its properties may be bound, or violates
any statute, law, rule or regulation applicable to MTV. No consent or approval
by any governmental authority is required in connection with the execution and
delivery by MTV of this Agreement or the consummation of the transactions
contemplated hereby.
(k) FULL DISCLOSURE. MTV has not, and will not have at
the Closing Date, withheld disclosure of any events, conditions, and facts of
which it may have knowledge and that may materially and adversely affect the
business or prospects of Hemokinetics.
(l) BROKERAGE FEES. MTV has not incurred, and will not
incur, any liability for brokerage or finder's fees or similar charges in
connection with this Agreement.
(m) NO APPROVALS REQUIRED. No approval, authorization,
consent, order or other action of, or filing with, any person, firm or
corporation or any court, administrative agency or other governmental authority
is required in connection with the execution and delivery by MTV of this
Agreement or the consummation of the transactions described herein, except to
the extent that MTV may be required to file reports in accordance with relevant
regulations under federal and state securities laws.
4. REPRESENTATIONS AND WARRANTIES OF HEMOKINETICS. Hemokinetics,
as a material inducement to MTV to enter into this Agreement and consummate the
transactions contemplated hereby, makes the following representations and
warranties to MTV, which representations and warranties are true and correct in
all material respects at this date, and will be true and correct in all material
respects on the Closing Date as though made on and as of such date.
(a) DUE ORGANIZATION. Hemokinetics is a corporation duly
organized, validly existing and in good standing under the laws of the District
of Columbia. Hemokinetics has the corporate power to own its property and to
carry on its business as now presently conducted.
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(b) CAPITALIZATION. The authorized capital stock of
Hemokinetics consists of 26,250,000 shares of Common Stock Class A, $.01 par
value, of which 1,309,998.2 shares are outstanding as of the date of this
Agreement. All of the outstanding shares of Common Stock have been validly
issued and are fully paid and non-assessable. Hemokinetics has no shares of
Common Stock reserved for issuance and there are no outstanding subscriptions,
options, warrants, rights, convertible securities or other agreements or
commitments of any character relating to the issued or unissued Common Stock or
other securities of Hemokinetics obligating Hemokinetics to issue any
securities.
(c) HEMOKINETICS STATEMENTS. Schedule 4(c) contains the
Hemokinetics Statements. The Hemokinetics Statements fairly present the
financial position of Hemokinetics as of the date thereof. The books and
records, financial and other, of Hemokinetics are in all material respects
complete and correct.
(d) UNDISCLOSED LIABILITIES. Hemokinetics has no liabilities
or obligations of any nature, fixed or contingently matured or unmatured, that
are not shown or otherwise provided for in Hemokinetics Statements or have not
been disclosed to MTV.
(e) MATERIAL ADVERSE CHANGE. Since the date of the most
recent Hemokinetics Statements, the business of Hemokinetics has been operated
in the ordinary course and there has not been:
(i) Any material adverse change in the business,
condition (financial or otherwise), results of operations, prospects,
properties, assets, liabilities, earnings or net worth of Hemokinetics for such
period or at any time during such period.
(ii) Any material damage, destruction or loss
(whether or not covered by insurance) affecting Hemokinetics or its assets,
properties or businesses.
(iii) Any declaration, setting aside or payment of
any dividend or other distribution in respect of any shares of the capital stock
of Hemokinetics, or any direct or indirect redemption, purchase or other
acquisition of any such stock or any agreement to do so.
(iv) Any issuance or sale by Hemokinetics, or
agreement by Hemokinetics to sell or pledge any of its securities. No
irrevocable proxies been given with respect to any securities of Hemokinetics.
(v) Any statute, rule, regulation or order
adopted by any governmental body, agency or authority (including orders of
regulatory authorities with jurisdiction over Hemokinetics) that materially and
adversely affects Hemokinetics or its business or financial condition.
(vi) Any material increase in the rate of
compensation or in bonus or commission payments payable or to become payable to
any of the salaried employees of Hemokinetics.
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(vii) Any other events or conditions of any
character that may reasonably be expected to have a materially adverse effect on
Hemokinetics or its business or financial condition.
(f) LITIGATION. There are no actions, suits, claims,
investigations or legal, administrative or arbitration proceedings pending
against Hemokinetics, its assets or business, whether at law or in equity, or
before or by any federal, state, municipal, local, foreign or other governmental
department, commission, board, bureau, agency or instrumentality, nor does
Hemokinetics know of a threat of, or any basis for, any such action, suit,
claim, investigation or proceeding.
(g) COMPLIANCE: GOVERNMENTAL AUTHORIZATIONS. Hemokinetics has
complied in all material respects with all federal, state, local or foreign
laws, ordinances, regulations and orders applicable to its business, including
without limitation, federal and state securities, banking collection and
consumer protection laws and regulations that, if not complied with, would
materially and adversely affect its businesses. Hemokinetics has all federal,
state, local and foreign governmental licenses and permits necessary for the
conduct of its business. Such licenses and permits are in full force and effect.
Hemokinetics knows of no violations of any such licenses or permits. No
proceedings are pending or threatened to revoke or limit the use of such
licenses or permits.
(h) TAX MATTERS. Hemokinetics has filed all federal, state and
local, tax or related returns and reports due or required to be filed, which
reports accurately reflect in all material respects the amount of taxes due.
Hemokinetics has paid all taxes or assessments that have become due, other than
taxes or charges being contested in good faith or not yet finally determined.
Hemokinetics is not aware of any tax liens with respect to any properties owned
by Hemokinetics.
(i) DUE AUTHORIZATION. Subject only to approval of this
Agreement by Hemokinetics' shareholders, this Agreement has been duly
authorized, executed and delivered by Hemokinetics and constitutes a valid and
binding agreement of Hemokinetics enforceable in accordance with its terms,
except as such enforcement may be limited by applicable bankruptcy, insolvency,
moratorium, and other similar laws relating to, limiting or affecting the
enforcement of creditors rights generally or by the application of equitable
principles. Neither the execution and delivery of this Agreement, nor the
consummation of the transactions contemplated hereby, nor compliance with any of
the provisions hereof, will violate any order, writ, injunction or decree of any
court or governmental authority, or violate or conflict with in any material
respect or constitute a default under (or give rise to any right of termination,
cancellation or acceleration under) any provisions of Hemokinetics' Articles of
Incorporation or Bylaws, the terms or conditions or provisions of any note,
bond, lease, mortgage, obligation, agreement, understanding, arrangement or
restriction of any kind to which Hemokinetics is a party or by which
Hemokinetics or its properties may be bound, or violates any statute, law, rule
or regulation applicable to Hemokinetics. No consent or approval by any
governmental authority is required in connection with the execution and delivery
by Hemokinetics of this Agreement or the consummation of the transactions
contemplated hereby.
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(j) FULL DISCLOSURE. Hemokinetics has not, and will not have
at the Closing Date, withheld disclosure of any events, conditions, and facts of
which it may have knowledge and that may materially and adversely affect the
business or prospects of Hemokinetics.
(k) BROKERAGE FEES. Hemokinetics has not incurred, and will
not incur, any liability for brokerage or finder's fees or similar charges in
connection with this Agreement.
(l) NO APPROVALS REQUIRED. No approval, authorization,
consent, order or other action of, or filing with, any person, firm or
corporation or any court, administrative agency or other governmental authority
is required in connection with the execution and delivery by Hemokinetics of
this Agreement or the consummation of the transactions described herein, except
to the extent that Hemokinetics may be required to file reports in accordance
with relevant regulations under federal and state securities laws.
5. COVENANTS AND AGREEMENTS. The parties covenant and agree as
follows:
(a) CONDUCT OF BUSINESS. From the date hereof through the date
of the Closing, Hemokinetics and MTV shall conduct their respective businesses
in the ordinary course and in material compliance with all requirements of law
to which they are subject, keep their respective business and properties
substantially intact.
(b) LITIGATION. Hemokinetics and MTV shall promptly notify
each other of any lawsuit, claims, proceedings or investigations which after the
date hereof are threatened or commenced against it or against any officer,
director, employee, affiliate or consultant of it, with respect to the
transactions contemplated hereby or which reasonably could be expected to have a
material adverse effect.
(c) SHAREHOLDER APPROVAL. At the earliest practicable date
following the date hereof, each of MTV and Hemokinetics shall obtain their
respective shareholders' approval adopting this Agreement and approving the
Merger.
(d) ISSUANCE OF CAPITAL STOCK. Neither MTV nor Hemokinetics
shall issue, commit to issue, redeem or purchase, or amend the terms of, any of
its capital stock after the date hereof.
(e) NOTIFICATION OF CERTAIN EVENTS. Each of MTV and
Hemokinetics shall promptly be given notice by the other of any event, condition
or circumstance occurring from the date hereof through the Closing Date which
would constitute or which would, with the passage of time or giving notice or
both, constitute a violation or breach of any representation or warranty
contained herein occurring with respect to the party required to give notice
pursuant to this Section.
(f) TAX TREATMENT. MTV and Hemokinetics undertake and agree to
take no action which would cause the Merger to fail to qualify as a
reorganization within the meaning of Section 368(a)(1)(A) of the Code, and agree
that they will file no tax returns or otherwise take a position inconsistent
with such tax treatment.
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6. DUE DILIGENCE AND TERMINATION. Hemokinetics and MTV each shall be
entitled to conduct, and all of the parties agree to cooperate in the conduct
of, such due diligence as Hemokinetics or MTV may wish to conduct prior to and
on the Closing Date to verify the truth, accuracy and completeness of
representations and warranties of the other parties to this Agreement. Either
party may terminate this Agreement without liability to the other if the Merger
has not been completed by December 31, 2000.
7. CLOSING DATE. Both parties will diligently and continuously pursue
the actions required to close the Merger as soon as possible, using best efforts
to close by September 29, 2000. Either party may extend the Closing Date upon
demonstration to the reasonable satisfaction of the other party that they are
diligently pursuing the performance of, and compliance with, all conditions
precedent to their obligations hereunder.
8. CONDITIONS PRECEDENT TO OBLIGATIONS OF MTV. All obligations of MTV
under this Agreement are subject to the fulfillment, prior to or on the Closing
Date (unless otherwise stated herein), of each of the following conditions, any
one or all of which may be waived by MTV:
(a) The shareholders of Hemokinetics and MTV shall have
approved the execution of this Agreement and the Merger thereby.
(b) The representations and warranties made by Hemokinetics
contained in this Agreement or in any certificate or document delivered to MTV
pursuant to the provisions hereof at the Closing shall be true in all material
respects at and as of the time of the Closing as though such representations and
warranties were made at and as of such time.
(c) Hemokinetics shall have performed and complied in all
material respects with all covenants, agreements and conditions required by this
Agreement to be performed or complied with by it prior to or at the Closing.
(d) Any Due Diligence Examination by MTV prior to the Closing
Date shall not have resulted in the discovery of any materially adverse
information concerning the business, condition (financial or otherwise), results
of operations, prospects, properties, assets, liabilities, earnings or net worth
of Hemokinetics.
9. CONDITIONS PRECEDENT TO OBLIGATIONS OF HEMOKINETICS. All
obligations of Hemokinetics under this Agreement are subject to the fulfillment,
prior to or on the Closing Date, of each of the following conditions, any one or
all of which may be waived in writing by Hemokinetics:
(a) The shareholders of MTV and Hemokinetics shall have
approved the execution of this Agreement and the Merger thereby.
(b) The representations and warranties made by MTV contained
in this Agreement or in any certificate or document delivered to Hemokinetics
pursuant to the provisions
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hereof at the Closing shall be true in all material respects at and as of the
time of the Closing as though such representations and warranties were made at
and as of such time.
(c) MTV shall have performed and complied in all material
respects with all covenants, agreements, and conditions required by this
Agreement to be performed or complied with by it prior to or at the Closing.
(d) Any Due Diligence Examination by Hemokinetics prior to the
Closing Date shall not have resulted in the discovery of any materially adverse
information concerning the business, condition (financial or otherwise), results
of operations, prospects, properties, assets, liabilities, earnings or net worth
of MTV.
10. NATURE OF REPRESENTATIONS AND WARRANTIES. All of the parties
hereto are executing and carrying out the provisions of this Agreement in
reliance on the representations, warranties, covenants and agreements contained
in this Agreement or at the Closing of the transactions herein provided for, and
any investigation that they might have made or any other representations,
warranties, covenants, agreements, promises or information, written or oral,
made by the other party or parties or any other person shall not be deemed a
waiver of any breach of any such representation, warranty, covenant or
agreement.
11. CLOSING. At the Closing, the following transactions shall
occur, all of such transactions being deemed to occur simultaneously:
(a) Hemokinetics will deliver, or cause to be delivered, to
MTV the following:
(i) All corporate records of Hemokinetics,
including without limitation corporate minute books (which shall contain copies
of the Articles of Incorporation and Bylaws, as amended to the Closing Date),
stock books, stock transfer books, corporate seals, and such other corporate
books and records as may reasonably be requested by MTV and its counsel.
(ii) A Certificate of Status from the Secretary
of State of the District of Columbia, dated at or about the Closing Date, to the
effect that such corporation is in good standing under the laws of the District
of Columbia.
(iii) Copies of resolutions of the Board of
Directors and Shareholders of Hemokinetics authorizing the transactions
contemplated under this Agreement.
(iv) Such documents as may be needed to
accomplish the Merger under the corporate laws of the District of Columbia.
(v) Such other instruments, documents and
certificates, if any, as are required to be delivered pursuant to the provisions
of this Agreement or that may be reasonably requested in furtherance of the
provisions of this Agreement.
(b) MTV will deliver or cause to be delivered to Hemokinetics:
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(i) Stock issuance instructions to MTV's
transfer agent for the conversion of Hemokinetics common stock to MTV common
stock, within five business days after the Closing Date.
(ii) A Certificate of Status for MTV from the
Secretary of State of Delaware, dated at or about the Closing Date, to the
effect that such corporation is in good standing under the laws of Delaware.
(iii) Copies of resolutions of the Board of
Directors and Shareholders of MTV authorizing the transactions contemplated
under this Agreement.
(iv) Such documents as may be needed to
accomplish the Merger under the corporate laws of the State of Delaware.
(v) Such other instruments, documents and
certificates, if any, as are required to be delivered pursuant to the provisions
of this Agreement, or that may be reasonably requested in furtherance of the
provisions of this Agreement.
12. MISCELLANEOUS.
(a) FURTHER ASSURANCES. At any time, and from time to time,
after the Closing, each party will execute such additional instruments and take
such further action as may be reasonably requested by the other party to confirm
or perfect title to any property transferred hereunder or otherwise to carry out
the intent and purposes of this Agreement.
(b) TIME. Time is of the essence.
(c) SURVIVAL OF REPRESENTATIONS. All covenants and agreements
made herein shall survive the Closing through all applicable statutes of
limitation. All covenants and agreements by or on behalf of the parties hereto
that are contained or incorporated in this Agreement shall bind and inure to the
benefit of the successors and assigns of all parties hereto.
(d) ENTIRE AGREEMENT. This Agreement constitutes the entire
agreement between the parties hereto with respect to the subject matter hereof.
It supersedes all prior negotiations, letters and understandings relating to the
subject matter hereof.
(e) AMENDMENT. This Agreement may not be amended, supplemented
or modified in whole or in part except by an instrument in writing signed by the
party or parties against whom enforcement of any such amendment, supplement or
modification is sought.
(f) CHOICE OF LAW. This Agreement shall be interpreted,
construed and enforced in accordance with the laws of the State of Florida
(except insofar as District of Columbia and Delaware law shall govern the Merger
and the corporate actions of the parties contemplated hereby).
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(g) HEADINGS. The section and subsection headings in this
Agreement are inserted for convenience only and shall not affect in any way the
meaning or interpretation of this agreement.
(h) CONSTRUCTION. The parties hereto and their respective
legal counsel participated in the preparation of this Agreement; therefore, this
Agreement shall be construed neither against nor in favor of any of the parties
hereto, but rather in accordance with the fair meaning thereof.
(i) EFFECT OF WAIVER. The failure of any party at any time or
times to require performance of any provision of this Agreement will in no
manner affect the right to enforce the same. The waiver by any party of any
breach of any provision of this Agreement will not be construed to be a waiver
by any such party of any succeeding breach of that provision or a waiver by such
party of any breach of any other provision.
(j) SEVERABILITY. The invalidity, illegality or
unenforceability of any provision or provisions of this Agreement will not
affect any other provision of this Agreement, which will remain in full force
and effect, nor will the invalidity, illegality or unenforceability of a portion
of any provision of this Agreement affect the balance of such provision. In the
event that any one or more of the provisions contained in this Agreement or any
portion thereof shall for any reason be held to be invalid, illegal or
unenforceable in any respect, this Agreement shall be reformed, construed and
enforced as if such invalid, illegal or unenforceable provision had never been
contained herein.
(k) ENFORCEMENT. Should it become necessary for any party to
institute legal action to enforce the terms and conditions of this Agreement,
the successful party will be awarded reasonable attorneys' fees at all trial and
appellate levels, expenses and costs. The parties hereto acknowledge and agree
that any party's remedy at law for a breach or threatened breach of any of the
provisions of this Agreement would be inadequate and such breach or threatened
breach shall be per se deemed as causing irreparable harm to such party.
Therefore, in the event of such breach or threatened breach, the parties hereto
agree that, in addition to any available remedy at law, including but not
limited to monetary damages, an aggrieved party, without posting any bond, shall
be entitled to obtain, and the offending party agrees not to oppose the
aggrieved party's request for, equitable relief in the form of specific
enforcement, temporary restraining order, temporary or permanent injunction, or
any other equitable remedy that may then be available to the aggrieved party.
(l) BINDING NATURE. This Agreement will be binding upon and
will inure to the benefit of any successor or successors of the parties hereto.
(m) NO THIRD-PARTY BENEFICIARIES. No person shall be deemed to
possess any third-party beneficiary right pursuant to this Agreement. It is the
intent of the parties hereto that no direct benefit to any third party is
intended or implied by the execution of this Agreement.
(n) EXPENSES. All expenses incident to the preparation of
documents for, and closing of, the Merger will be borne by MTV.
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IN WITNESS WHEREOF, the parties have executed this Agreement on the
date first above written.
HEMOKINETICS, INC.
By: /S/ EDWARD G. GREGER
------------------------
Edward G. Greger. M.D., President
MEDICAL TECHNOLOGY VENTURES, INC.
By: /S/ GIL DORLAND
----------------------
Gil Dorland, President
List of Schedules:
Schedule 3(d) - MTV Financial Statements
Schedule 4(c) - Hemokinetics Financial Statements
74
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EXHIBIT B
================================================================================
OPINION OF ENGLISH, MCCAUGHAN & O'BRYAN, P.A.
ENGLISH, MCCAUGHAN & O'BRYAN LETTERHEAD
GERALD W. GRITTER
September __, 2000
Medical Technology Ventures, Inc.
1133 West Ocean Drive
P.O. Box 510-099
Key Colony Beach, FL 33051
Re: FORM S-4 REGISTRATION STATEMENT
-------------------------------
Gentlemen:
We have acted as counsel to Medical Technology Ventures, Inc., a
Delaware corporation (the "Company") in connection with its Registration
Statement on Form S-4 (the "Registration Statement") filed under the Securities
Act of 1933, as amended (the "Act") relating to the solicitation of proxies in
connection with the proposed merger of Hemokinetics, Inc., a District of
Columbia corporation ("Hemo") with and into the Company (the "Merger"), whereby
a certain number of the shares of the Company's $.001 par value common stock
("Merger Shares") will be exchanged for all of the issued and outstanding shares
of the common stock of Hemo.
In that connection, we have examined originals, or copies certified or
otherwise identified to our satisfaction, of such documents, corporate records
and other instruments as we have deemed necessary or appropriate for purposes of
this opinion, including the Company's Restated Certificate of Incorporation, the
By-Laws of the Company and the Merger Agreement dated September ____, 2000 (the
"Merger Agreement").
Based on the foregoing, we are of the opinion that, the Merger Shares
when issued in connection with the terms of the Merger Agreement will be legally
and validly issued, fully paid and nonassessable.
We hereby consent to the use of this opinion in connection with the
Company's proxy statement/prospectus and the inclusion hereof as an exhibit
hereto. This opinion letter is rendered as of the date first written above and
we disclaim any obligation to advise you of facts, circumstances, events or
developments which hereafter may be brought to our attention and which may
alter, affect or modify the opinion expressed herein. Our opinion is expressly
limited to the matters set forth above and we render no opinion, whether by
implication or otherwise, as to any other matters relating to the Company, the
Merger Agreement or the Merger Shares issuable under such Merger Agreement.
Very truly yours,
ENGLISH, MCCAUGHAN & O'BRYAN, P.A.
By /s/ Gerald Gritter
75
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EXHIBIT C
================================================================================
SECTION 29-373 OF THE DISTRICT OF COLUMBIA BUSINESS
CORPORATION ACT
ss.29-373. RIGHTS OF DISSENTING SHAREHOLDERS.
(a) If a shareholder of a corporation which is a party to a merger or
consolidation shall file with the corporation, prior to or at the meeting of
shareholders at which the plan of merger or consolidation is submitted to a
vote, a written objection to the plan of merger or consolidation, and shall not
vote in favor of the plan, and the shareholder, within 20 days after the merger
or consolidation is effected, shall make written demand on the surviving or new
corporation for payment of the fair value of his or her shares as of the day
prior to the date on which the vote was taken approving the merger or
consolidation, the surviving or new corporation shall pay to the shareholder the
fair value of the shares forthwith, in the case of holders of uncertificated
shares, or upon surrender of the certificate or certificates representing the
shares, in the case of holders of shares represented by certificates. Such a
demand shall state the number and class of the shares owned by the dissenting
shareholder. Any shareholder failing to make demand within the 20-day period
shall be bound by the terms of the merger or consolidation.
(b) If within 30 days after the date on which the merger or consolidation was
effected the value of the shares is agreed upon between the dissenting
shareholder and the surviving or new corporation payment therefor shall be made
within 90 days after the date on which the merger or consolidation was effected,
in the case of holders of uncertificated shares, or upon surrender of the
certificate or certificates representing the shares, in the case of holders of
shares represented by certificates. Upon payment of the agreed value, the
dissenting shareholder shall cease to have any interest in the shares of the
corporation.
(c) If within the period of 30 days the shareholder and the surviving or new
corporation do not agree, the dissenting shareholder may, within 60 days after
the expiration of the 30-day period, file a petition in any court of competent
jurisdiction within the District of Columbia asking for a finding and
determination of the fair value of the shares, and shall be entitled to judgment
against the surviving or new corporation for the amount of the fair value as of
the day prior to the date on which the vote was taken approving the merger or
consolidation, together with interest at the rate of 5% per annum. to the date
of the judgment. The judgment shall be payable forthwith, in the case of holders
of uncertificated shares, or upon surrender of the certificate or certificates
representing the shares to the surviving or new corporation, in the case of
holders of shares represented by certificates. Upon payment of the judgment, the
dissenting shareholder shall cease to have any interest in the shares or in the
surviving or new corporation. The shares may be held and disposed of by the
surviving or new corporation as it may see fit. Unless the dissenting
shareholder shall file the petition within the time herein limited, the
shareholder and all persons claiming under him or her shall be bound by the
terms of the merger or consolidation.
(d) The right of a dissenting shareholder to be paid the fair value of his or
her shares as herein provided shall cease if and when the corporation shall
abandon the merger or consolidation.
76
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EXHIBIT D
================================================================================
"Form of Proxy"
[To be included in amended filing]
77
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Restated Certificate of Incorporation and By-laws of the Registrant
filed as Exhibits 3.1 and 3.2 hereto provide that the Registrant shall indemnify
any person to the fullest extent permitted by the Delaware General Corporation
Law. ( the "DGCL").
In accordance with Section 102(a)(7) of the DGCL, the Restated
Certificate of Incorporation of the Registrant eliminates the personal liability
of directors to the Regristrant or its stockholders for monetary damages for
breach of fiduciary duty as a director with certain exceptions set forth in
Section 102(a)(7).
ITEM 21. EXHIBITS AND FINANCIAL STATEMENTS SCHEDULES
(A) Exhibits
The following Exhibits are filed as part of this Registration
Statement:
<TABLE>
<CAPTION>
Exhibit
NUMBER DESCRIPTION OF EXHIBITS
------ -----------------------
<S> <C>
2 Plan of Merger, dated as of September __, 2000 by and among the Registrant and
Hemokinetics, Inc.(included in the Proxy Statement/Prospectus as Exhibit A)
3.1 Certificate of Incorporation of Registrant
3.2 Restated Certificate of Incorporation of the Registrant
3.3 By-laws of the Registrant
5.1 Opinion of English, McCaughan & O'Bryan, P.A.
10.1* Form of Proxy (included in the Proxy Statement/Prospectus as Exhibit D)
23.1 Consent of Weinberg & Company, P.A. re: Medical Technology Ventures, Inc.
23.2 Consent of Weinberg & Company, P.A. re: Hemokinetics, Inc.
23.3 Consent of English, McCaughan & O,Bryan, P.A. (see Exhibit 5.1)
27.1 Financial Data Schedule for the Fiscal Year Ended December 31, 1999
27.2 Financial Data Schedule for the Four Months Ended April 30, 2000
(b) Financial Statement Schedules
None required.
(c) Reports, Opinions or Appraisals
None required.
</TABLE>
* To be included in amended filing of Proxy Statement/Prospectus
78
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ITEM 22. UNDERTAKINGS
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3) of the
Securities Act;
(ii) To reflect in the prospectus any facts or events which,
individually or together, represent a fundamental change in the information in
the registration statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any deviation
from the low or high end of the estimated maximum offering range may be
reflected in the form of prospectus filed with the Commission pursuant to Rule
424(b) if, in the aggregate, the changes in volume and price represent no more
than a 20% change in in the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective registration statement.
(iii) To include any additional or changed material information on the
plan of distribution.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post- effective amendment shall be deemed to be a new
registration statement of the securities offered, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 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 of expenses incurred or paid by a director, officer or
controlling person of 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 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.
The undersigned Registrant hereby undertakes to respond to requests for
information that is incorporated by reference into the Prospectus pursuant to
Items 4, 10(b), 11 or 13 of this Form, within one business day of receipt of
such request, and to send the incorporated documents by first class mail or
other equally prompt means. This includes information contained in documents
filed subsequent to the effective date of this Registration Statement through
the date of responding to the request.
The undersigned Registrant hereby undertakes to supply by means of a
post-effective amendment all information concerning a transaction, and the
company being acquired involved therein, that was not the subject of and
included in this Registration Statement when it became effective.
79
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant has duly caused this registration statement to be signed on its
behalf by the undersigned, thereunto duly authorized in the City of Fort
Lauderdale, State of Florida on this ____ day of September, 2000.
MEDICAL TECHNOLOGY VENTURES, INC.
By: /S/ EDWARD GREGER
-----------------------------------------
Edward Greger
Chairman and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities indicated on the ______ day of September, 2000.
<TABLE>
<S> <C>
/S/ EDWARD GREGER Chairman of the Board and Chief Executive Officer
----------------- (Principal Executive Officer and Principal Accounting
Edward Greger Officer)
/S/ GIL DORLAND President and Director
---------------
Gil Dorland
/S/ WILLIAM REGELSEN Director
---------------------
William Regelson, M.D.
/S/ RONALD ANDERSON Director
-------------------
Ronald Anderson
</TABLE>
80
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EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBITS
------ -----------------------
<S> <C>
2 Plan of Merger, dated as of September __, 2000 by and among
the Registrant and Hemokinetics, Inc.(included in the Proxy
Statement/Prospectus as Exhibit A)
3.1 Certificate of Incorporation of Registrant
3.2 Restated Certificate of Incorporation of the Registrant
3.3 By-laws of the Registrant
5.1 Opinion of English, McCaughan & O'Bryan, P.A.
10.1* Form of Proxy (included in the Proxy Statement/Prospectus
as Exhibit D)
23.1 Consent of Weinberg & Company, P.A. re: Medical Technology
Ventures, Inc.
23.2 Consent of Weinberg & Company, P.A. re: Hemokinetics, Inc.
23.3 Consent of English, McCaughan & O'Bryan, P.A. (see Exhibit 5.1)
27.1 Financial Data Schedule for the Fiscal Year Ended December 31, 1999
27.2 Financial Data Schedule for the Four Months Ended April 30, 2000
</TABLE>
* To be included in amended filing of Proxy Statement/Prospectus
