U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-KSB
[X] Annual report under Section 13 or 15(d) of the Securities Exchange
Act of 1934
For the fiscal year ended December 31, 2002
Commission file Number 0-25611
VisiJet, Inc.
(Name of small business issuer in its charter)
Delaware 33-0838660
(State of incorporation) (I.R.S. Employer I.D. No.)
188 Technology, Suite D, Irvine, California 92618
(Address of principal executive offices)
Issuer's telephone number (949) 450-1660
Securities registered pursuant to Section 12(b) of the Act:
None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, $.001 par value
(Title of class)
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days. Yes [X] No
[].
Check if disclosure of delinquent filers in response to Item 405 of
Regulation S-B is not contained in this form, and no disclosure will be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB. [X]
The registrant's revenues for fiscal year 2002 were $0.
As of March 26, 2003 the aggregate market value of the voting stock
held by non-affiliates of the registrant was approximately $15,307,414 and the
number of shares outstanding of the registrant's Common Stock was 18,802,745.
PART I
ITEM 1. DESCRIPTION OF BUSINESS
FORWARD LOOKING STATEMENTS
This report contains forward-looking statements that are based on our
beliefs as well as assumptions made by and information currently available to
us. When used in this report, the words "believe," "plan," "expect,"
"anticipate," "estimate," "intends," and similar expressions are intended to
identify forward-looking statements. Such statements are subject to certain
risks, uncertainties and assumptions. Should one or more of those risks or
uncertainties materialize, or should underlying assumptions prove incorrect,
actual results may vary materially from those anticipated, estimated, or
projected. We caution potential investors not to place undue reliance on any
such forward-looking statements, all of which speak only as of the date made.
COMPANY BACKGROUND AND SUMMARY
VisiJet, Inc., formerly known as Ponte Nossa Acquisition Corp. (the
"Company" or "VisiJet"), is a Delaware corporation originally incorporated as a
blank check company on April 21, 1997. The Company was organized for the purpose
of acquiring an interest in a suitable operating business.
On December 20, 2002, the Company entered into a Second Amended and
Restated Agreement and Plan of Merger with VisiJet, Inc., a California
corporation, for the merger of the two companies into a single company through
the merger of VisiJet, Inc. into an acquisition subsidiary, VisiJet Acquisition
Corporation. The merger was consummated on February 11, 2003, and the Company's
name was changed from "Ponte Nossa Acquisition Corp." to "VisiJet, Inc." Under
the terms of the Merger Agreement, 8,600,000 shares of the Company's Common
Stock were issued to the shareholders of Visijet, Inc. Also, 3,528,481 shares of
Common Stock, and warrants to purchase an additional 4,528,481 shares of Common
Stock, were issued to certain investors for cash concurrently with the
consummation of the merger. As a result of the merger, the Company is continuing
the business of VisiJet.
VisiJet is engaged in the development and marketing of ophthalmic
surgery products based on applications of waterjet technology, designed to
result in faster, safer and more efficacious surgery in the two largest surgical
markets in the world, laser eye surgery and cataract surgery.
The Company has focused its earliest efforts at bringing to market two
products, with different applications and markets. First, the HydroKeratome(R)
is a device that utilizes waterjet technology to cut the corneal flap
immediately prior to applying an excimer laser in laser eye surgery to correct
myopia, hyperopia and astigmatism. Second, the Pulsatome(R) utilizes waterjet
technology to remove the cataractous human crystalline lens in the eye during
cataract surgery. VisiJet has made all necessary filings with the U.S. Food and
Drug Administration to allow marketing of the HydroKeratome; however, it plans
to make an additional filing, relating to the computer controls for the
handpiece, before commencing sales, estimated to be in the third quarter of
2003. The Company believes that the use of high pressure fluids and the
Company's proprietary waterjet surgical devices will result in a highly
effective method for surgical procedures, with a potentially significant impact
on the ophthalmic market. Microsurgery and minimally invasive surgery were
pioneered in ophthalmology, and cataracts are now removed in minutes utilizing
2
microscopes, with minimally invasive products and techniques that are constantly
being refined and upgraded. More recently, the refractive surgery market has
experienced a growth phase with the advent of vision correction through the
LASIK procedure, which involves cutting a corneal flap with a microkeratome
prior to ablation of stromal tissue with an excimer laser.
WATERJET TECHNOLOGY
Waterjet technology is an established method for precision cutting of
materials in a variety of industrial applications. It uses the principle of
pressurizing water to extremely high levels, and allowing the water to escape in
a controlled manner through a very small opening, or orifice. Water jets use the
high pressure beam of water exiting the orifice to cut various materials,
including tile, wood, plastic, metal, and stone. In general, industrial
applications of waterjet technology are used in place of a laser or other device
when the "cut" needs to be quicker, cleaner, and with minimum distortion and
temperature increase.
Until recently, medical applications of waterjet technology have been
limited. VisiJet plans to implement a proven industrial technology in the
surgical environment, with added precision, control, miniaturization, and
safety.
VisiJet holds an exclusive license with respect to the ophthalmic
applications of a series of U.S. and foreign patents relating to the technology.
The technology uses a pneumatic-hydraulic pressure intensifier to produce a
collimated high pressure water beam that is approximately the diameter of a
human hair. This self-cleaning, eversharp "hydro-laser" can cut through tissue
at 12mm (.5 inch) per second. The hydraulics are controlled by an embedded
central processing unit with displays, gauges, controls, aspiration and
irrigation fluidics familiar to ophthalmic surgeons.
MARKETS
THE REFRACTIVE SURGERY MARKET
The Company's products assist in surgical procedures relating to the
cornea. The cornea is the clear window that provides most of the focusing power
of the vision system of the eye, as well as allowing light into the eye. The
anterior surface of the cornea is covered with a thin layer called the
epithelium. The epithelium is covered with a liquid tear film.
Physicians generally treat vision disorders by prescribing eyeglasses
or contact lenses or through ophthalmic surgery, all of which compensate for or
correct the vision error. The principal surgical techniques available to treat
vision disorders are radial keratotomy ("RK"), Photo Refractive Keratectomy
("PRK")/LASIK and Refractive Lamellar Keratoplasty ("RLK"). In RK, PRK/LASIK and
RLK, the object of the surgery is to change the shape of the anterior corneal
surface and to eliminate or reduce refractive error. An additional objective is
to minimize lens aberrations to improve visual acuity, which is not possible
with eyeglasses or contact lenses.
The refractive surgery market in its current form began in late 1995
when the FDA approved the first excimer laser for PRK. Before 1995 refractive
surgery was conducted by various manual, non-laser techniques, the most popular
of which was RK. In RK, the surgeon uses a diamond knife to make radial
incisions in the cornea to flatten it. This technique, and others like it, is
highly dependent on the surgeon's skill, and often produces mixed results.
3
By contrast, in PRK utilizing the excimer laser, the
computer-controlled laser is programmed to remove the specified amount of
corneal tissue with precision, delivering a consistent outcome. In spite of its
inherent accuracy and predictability, PRK was not widely accepted by patients,
because it uses the laser to burn away the most sensitive top layers of the
cornea. Patients undergoing PRK often experienced considerable pain, and were
left with a persistent cloudiness of the cornea for days or weeks. PRK generally
met the clinical expectations of the surgeon, but failed to satisfy the
patient's desire for comfort and rapid recovery. For this and other reasons, PRK
failed to attain broad market acceptance.
In late 1996 many ophthalmic surgeons started utilizing a new
procedure, Laser In Situ Keratomileusis ("LASIK"), which addressed many of the
negative aspects of PRK from the patient's standpoint, while preserving the
accuracy of PRK. LASIK utilizes a microkeratome, which is a mechanically driven
razor to create a flap in the surface of the cornea. After creation of the flap,
the excimer laser is used on the exposed internal tissue, called the stroma,
underneath the flap. The excimer laser emits ultraviolet light in very short,
high-energy pulses and ablates part of the corneal surface according to a
prescribed spatial pattern, changing the curvature of the anterior corneal
surface. The laser removes a predetermined amount of tissue to achieve the
desired correction, and the hinged flap is reset as closely as possible to its
original position, where it adheres to the underlying stroma. The adherence
increases over a period of many months. The patient's vision is significantly
improved within minutes of surgery.
Because the laser energy is used on the less sensitive inner tissue of
the cornea, the patient experiences very little pain after surgery and there is
generally no clouding of the corneal surface. The patient is usually able to
return to normal function the next day with immediate vision improvement.
The LASIK procedure gained broad market acceptance very quickly.
Currently, over 90% of refractive laser procedures in the U.S. are LASIK
procedures. The success of LASIK in meeting both surgeon and patient needs has
been the principal factor in the dramatic growth in the refractive surgery
market in recent years. By the end of 2000 there were an estimated 1,110 excimer
lasers in service in the United States and at least 1,500 lasers outside of the
U.S.
THE CATARACT SURGERY MARKET
The U.S. cataract surgery market is a relatively mature market.
However, the general aging of the population is a positive demographic trend, as
cataracts are a condition that generally afflicts older persons. Currently,
there are approximately two million surgical procedures for cataracts performed
each year, making it the largest volume procedure in all of surgery. The
worldwide cataract market is about 165% of the U.S. market and growing at over
twice the U.S. rate. This growth outside of the U.S. is due primarily to a later
start and slower adoption of modern surgical techniques developed in the U.S. In
addition, health insurance or governmental reimbursement for cataract surgery
has not been common outside the United States. In the Third World, cataracts are
the leading cause of blindness, a completely curable condition with current
technology. The Company believes its products for cataract surgery may overcome
some of the barriers to expanded cataract surgery for this potential market.
4
THE COMPANY'S PRODUCTS
Although each of the Company's waterjet products has a different
application, they share certain basic characteristics. Each of the waterjet
products consists of a modular console with an intensifier and a hand piece. The
modular unit is attached to a delivery tube, which is in turn attached to a hand
piece. The waterjet may be adjusted for flexible use by the operating physician,
and acts as a cutter or emulsifier. The hand piece delivers the water jet to the
tissue and its integral aspirator removes the emulsified tissue and water
through a tube into a disposable cassette contained in the console.
HYDROKERATOME(R) CORNEAL CUTTING DEVICE
The HydroKeratome is a corneal cutting device for use in the LASIK
procedure. The Company believes the HydroKeratome will eventually replace the
automated lamellar keratotomy instrument, or microkeratome, currently used in
the LASIK refractive procedure. The HydroKeratome is simple, easy to use and
should reduce the risk of human and instrument error associated with the
microkeratome. In general, the cuts from a HydroKeratome are smoother and
cleaner than those of a conventional microkeratome, leaving no debris.
The HydroKeratome works by using a high-pressure micro beam of water to
force a blunt dissection of tissue in the path of the water beam. Since it will
compete directly with products already on the market from several other
companies, VisiJet plans to position the HydroKeratome(R) in the market as a
replacement for the microkeratome. The product will be priced comparably to
existing products, with the disposable component to be priced at a slight
premium. The Company believes that revenues from disposable kits will surpass
revenues from console sales in the near future.
The HydroKeratome is designed to address many of the problems that are
common with mechanical "blade" microkeratomes, such as poor visualization,
inconsistent thickness of flaps, hazing, loose flaps, off center cuts, and
lashes caught in gears. The HydroKeratome uses an embedded CPU controlled
pneumatic-hydraulic pressure intensifier to make the corneal flap for the LASIK
procedure. The suction ring with reticule and applanation plate on the hand
piece allow holding the eye centered while the corneal flap is cut underneath
the applanation plate. The water jet traverses perpendicular to the visual axis,
driven by a precision autoclavable miniature Swiss motor with gear box and
encoder. A foot switch controls the start of the transverse water jet motion,
and the travel distance pre-programmed by the surgeon stops the travel and shuts
off the water jet beam. Approximate travel time is one second.
PULSATOME(R) CATARACT EMULSIFIER
The Pulsatome(R) Cataract Emulsifier is an emulsification device for
quick and safe removal of the cataractous human crystalline lens in the eye, a
necessary procedure before installing a new intraocular lens ("IOL"). The device
creates a pulsating stream of saline solution, and the impact from the pulsating
fluid emulsifies the cataractous human lens and breaks the lens into small
pieces. The Pulsatome simultaneously aspirates the emulsified tissue and removes
it from the interior of the eye.
Once introduced to the marketplace, the Company believes the Pulsatome
will be easier to learn how to use and will require less skill than that
required by current ultrasound phaco emulsification devices. The Pulsatome
should be attractive not only to established phaco surgeons but also to surgeons
5
who have not mastered ultrasound or simply cannot afford the device. With the
Pulsatome, many more surgeons, will be able to perform the state of the art, "no
stitch, foldable lens" procedure.
The Pulsatome and its disposable package will be priced in the low
range of current ultrasound devices, which will make it attractive in
underdeveloped markets, and also attractive in the U.S. and other nations where
cost containment is critical.
The Pulsatome requires minimal technical skill, as it functions like a
hydraulic eraser or paint brush. No sculpting or lens elevation orrotation is
necessary. The balanced irrigation/aspiration fluidics complement the embedded
CPU controlled micro pulses. The foot switch initiates the mode activity
selected by surgeon for the balanced and ergonomically shaped hand piece.
HYDROREFRACTOR(R) CORNEAL SHAPER
The Company is developing the HydroRefractor in order to complete the
entire LASIK procedure without the need for an excimer laser. Once completed,
this device will not only create the lamellar flap required to access the
cornea's stromal bed but will also create a "power cut" (or series of cuts)
which will remove tissue in minute quantities so as to change the refractive
power of the patient's eyes to the desired level. This technology uses a high
pressure water beam to precisely cut away corneal tissue just as the excimer
laser would ablate tissue to create the desired refraction. Ultimately, this
would mean that a one step procedure could be accomplished in the doctor's
office without the need for an excimer laser. The relatively low cost of the
HydroRefractor should permit each ophthalmologist the opportunity to conduct the
entire procedure in his office, without the need for expensive equipment.
The HydroRefractor will be positioned as a single, in-office unit for
performing the LASIK procedure. The Company believes that it will eventually
replace both the microkeratome and the excimer laser.
COMPETITION
The medical technology industry for ophthalmologic surgery products is
highly competitive. Many other companies are engaged in refractive surgery
research and development activities, and many of these have substantially
greater financial, technical and human resources than the Company. As such, they
may be better equipped to develop, manufacture and market their technologies. In
addition, many of these companies have extensive experience in clinical testing
and human clinical studies. Certain of these companies may develop and introduce
products or processes competitive with or superior to those of the Company.
Furthermore, with respect to any other products the Company may, in the future,
be permitted to commercially sell, it will also be competing with respect to
manufacturing efficiency and marketing capabilities, areas in which the Company
has no experience.
The Company expects to encounter direct competition from other
companies utilizing water-jet type devices, and is currently aware of at least
one other company, Medjet, Inc., engaged in the development of a water-jet
device as a means of performing corneal refractive surgery. There may be other
companies developing such technologies, or other technologies applicable to
ophthalmic surgery, of which the Company is unaware.
COMPETITION IN THE MICROKERATOME MARKET
There are approximately ten companies that offer mechanical
microkeratomes to the market. However, with about 60% of the installed base and
70% market share of sales, Chiron Vision, now a division of Bausch & Lomb, is
the clear market leader.
Currently there is only one competitor, Intralase, which offers
"bladeless" LASIK surgery. This laser product creates a lamellar flap for LASIK
using tiny laser "explosions" within the cornea to separate the tissue. It is
highly accurate, approaching that of the HydroKeratome, and also avoids many of
the serious problems associated with microkeratomes. However, the Company
believes that the Intralase product is slower, more expensive, and less
effective than the HydroKeratome.
6
COMPETITION IN THE CATARACT EMULSIFICATION MARKET
The dominant instrument in modern cataract surgery is the ultrasonic
phacoemulsifier. The phaco, as it is commonly called, utilizes an ultrasonic
generator, which vibrates the tip of the phaco hand piece 40,000 times per
second. When the tip is introduced into the eye and placed in contact with the
cataractous lens, the lens is gradually reduced to smaller pieces until it can
be aspirated out of the eye.
Coopervision developed and brought to market dominance the modern
phacoemulsifier during the period from 1975 to 1989. With its acquisition of
Coopervision in 1989, Alcon, a division of the Swiss food giant Nestle, became
the leader in the phaco market, with an estimated market share of 60% of the
phaco equipment and associated disposable packs. Bausch & Lomb is a distant
second, with an estimated 20% market share. There are another fifteen phaco
manufacturers who split up the remaining 20% of the global market, including
Allergan.
COMPETITION IN THE CORNEAL SHAPING MARKET
There are several competing technologies in the area of reshaping the
cornea to change refractive power. The most prevalent products are the excimer
lasers used in the LASIK procedure, which has been very well accepted by the
public. The major player in this area is VISX, which has placed more lasers than
any other company. Summit, Bausch and Lomb, Nidek and LaserSight follow VISX.
Another corneal reshaping device is Intacs from KeraVision which treats myopia
only. In addition, there are competing companies using intraocular technologies
to change the refractive index of the eye. Staar Surgical is developing the ICL
for placement between the iris and lens capsule. Other companies are developing
intraocular lenses, which would require a clear lensectomy followed by a lens
implant. Other than the excimer laser, none of the other technologies have
reached significant market acceptance.
MANUFACTURING
The Company plans to outsource manufacturing of its products to an ISO
9001 approved local contract manufacturing facility. This contractor will
purchase and stock parts, assemble, test and burn-in units, and will stock
finished goods and ship as required from its bonded warehouse.
7
GOVERNMENT REGULATION
UNITED STATES
The Company's products are medical devices. As such, the Company is
subject to the relevant provisions and regulations of the Federal Food, Drug and
Cosmetic Act, under which the FDA regulates the manufacture, labeling,
distribution, and promotion of medical devices in the United States. The Act
provides that, unless exempted by regulation, medical devices may not be
commercially distributed in the United States unless they have been approved or
cleared by the FDA for marketing. There are two review procedures by which
medical devices can receive such approval or clearance. Some products may
qualify for clearance under a 510(k) notification. Under the 510(k) procedure,
the manufacturer submits to the FDA a pre-market notification that it intends to
begin marketing its product. The notification must demonstrate that the product
is substantially equivalent to another legally marketed product (i.e., it has
the same intended use, is as safe and effective, and does not raise different
questions of safety and effectiveness than does a legally marketed device).
A successful 510(k) notification results in the issuance of a letter
from the FDA in which the FDA acknowledges the substantial equivalence of the
reviewed device to a legally marketed device and clears the reviewed device for
marketing to the public. The Company has received successful 510(k) notification
with respect to the HydroKeratome, and plans to pursue 510(k) approval with
respect to its other products. Before commencement of marketing the
HydroKeratome, it plans to make an additional 510(k) filing relating to the
computer controls of the handpiece.
In addition to laws and regulations enforced by the FDA, the Company's
products may also be subject to labeling laws and regulations enforced by the
Federal Trade Commission.
OTHER COUNTRIES
Sales of medical devices outside the United States are subject to
foreign regulatory requirements that vary widely from country to country. The
time required to obtain approvals required by foreign countries may be longer or
shorter than that required for FDA approval, and requirements for licensing may
differ from FDA requirements. Export sales of investigational devices that have
not received FDA marketing clearance generally are subject to FDA export permit
requirements.
VisiJet plans to distribute its products internationally. Distribution
of the Company's products in countries other than the United States may be
subject to regulation in those countries. In some countries, the regulations
governing such distribution are less burdensome than in the United States and
the Company may pursue marketing its products in such countries prior to
receiving permission to market from the FDA. The Company will endeavor to obtain
the necessary government approvals in those foreign countries where it decides
to manufacture, market and sell its products.
PATENTS AND TRADEMARKS
The technology utilized by the Company in its products is covered by
patents owned by SurgiJet, Inc., a developer of waterjet technology for a
variety of medical and dental applications. The Company has been granted an
exclusive worldwide license to these patents for ophthalmological applications
for the life of the patents. It intends to protect its development work by means
of licensing additional patents and trademarks as necessary and to protect its
own inventions with additional patent applications. VisiJet has licensed
thirteen issued United States patents, two United States patent applications
pending, two issued international patent and twelve foreign patent applications
8
pending. VisiJet has also exclusive licenses to certain non-patented technology
developed by SurgiJet related to ophthalmic applications, and holds exclusive
licenses for certain registered trademarks, including VisiJet(R),
HydroKeratome(R), and Pulsatome(R).
ITEM 2. DESCRIPTION OF PROPERTY
The Company currently occupies a facility of approximately 4,800 square
feet in Irvine, California. Monthly rent is $5,198, and the lease expires in
September 2003.
ITEM 3. LEGAL PROCEEDINGS
The Company is a defendant in an action brought by Michael R. Cimaron,
who claims to be entitled to a commission arising out of the merger between
Ponte Nossa Acquisition Corp. and VisiJet, Inc. The complaint alleges that the
plaintiff is entitled to 105,000 shares of the Company's Common Stock. The
Company denies the material allegations of the complaint and plans to vigorously
contest the action.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
PART II
ITEM 5. MARKET FOR COMMON EQUITY AND RELATED SHAREHOLDER MATTERS
The following table sets forth the high and low closing prices for
shares of our Common Stock for the periods noted, as reported by the National
Daily Quotation Service and the Over-the-Counter Bulletin Board.
High Low
-------- -------
FY 2002
-------
Fourth Quarter 1.45 1.12
Third Quarter 1.45 0.77
Second Quarter 1.78 0.86
First Quarter 2.00 0.56
FY 2001
-------
Fourth Quarter 2.70 1.97
Third Quarter 3.60 1.85
Second Quarter 7.25 2.00
First Quarter 2.47 2.00
Quotations reflect inter-dealer prices, without retail mark-up, mark-down or
commission, and may not represent actual transactions.
As of March 26, 2003, there were 350 record holders of the
Company's Common Stock.
The Company has not paid any cash dividends since its inception and
does not contemplate paying dividends in the foreseeable future. It is
anticipated that earnings, if any, will be retained for the operation of the
Company's business.
9
In April 2002, the Company issued 300,000 shares of restricted Common
stock to an investor in consideration for the investor's cancellation of an
outstanding warrant to purchase 5,500,000 shares of the Company's Common Stock
for an exercise price of $100,000.
In May 2002, the Company issued 135,000 shares of restricted Common
Stock, and a five-year warrant to purchase an additional 135,000 shares of
Common Stock at an exercise price of $2.50 per share, to a single private
investor. The purchase price was $150,000.
In August 2002, the Company issued an additional 100,000 shares of
restricted Common Stock, and a five year warrant to purchase an additional
100,000 shares of Common Stock, at an exercise price of $2.50 per share, to a
single private investor. The purchase price was $100,000.
The Company believes the foregoing issuances were exempt from the
registration requirements of the Securities Act 1933 by reason of Section 4(2)
thereof and Regulation D thereunder.
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
VisiJet, Inc., formerly known as Ponte Nossa Acquisition Corp. (the
"Company" or "VisiJet"), is a Delaware corporation originally incorporated as a
blank check company on April 21, 1997. The Company was organized for the purpose
of acquiring an interest in a suitable operating business. Through December 31,
2002, the Company had not yet engaged in business and had no revenues.
On December 20, 2002, the Company entered into a Second Amended and
Restated Agreement and Plan of Merger with VisiJet, Inc., a California
corporation, for the merger of the two companies into a single company. The
merger was consummated on February 11, 2003, and the Company's name was changed
from "Ponte Nossa Acquisition Corp." to "VisiJet, Inc." The Company has
succeeded to all of the assets and operations of VisiJet, and is continuing the
business of VisiJet. Since this transaction is in substance a recapitalization,
similar to a reverse acquisition, of VisiJet and not a business combination, a
valuation was not performed and no goodwill was recorded.
During 2002 the Company raised $938,157 through a series of private
placements of $225,000, a related party loan of $152,567 and private venture
financing of $560,590. Upon completion of the merger with VisiJet, certain of
the private venture investors are committed to funding an additional $564,000 to
the Company, in order to complete its initial round financing of $1,125,000.
Shortly following the merger, the Company plans to raise up to an additional
$2,500,000 through private placements, to satisfy all its cash needs for the
2003 fiscal year.
It is anticipated that funding beyond the amounts noted above may be
necessary to implement the Company's production schedule and marketing plans.
After the capitalization of $2,500,000 is completed, the Company plans to
initiate efforts to raise additional equity financing of approximately
$5,000,000. These funds will be used to fund product research and development,
purchases of equipment and hiring additional employees, as summarized below.
10
PLAN OF OPERATIONS
The Company plans to continue in the development and marketing of
ophthalmic surgery products based on applications of the waterjet technology,
designed to result in faster, safer and more efficacious surgery in the two
largest surgical markets in the world, laser eye surgery and cataract surgery.
Over the next two years, the Company plans to conduct the following product
research and development activities:
1). HydroKeratome
- a corneal cutting device that produces a bladeless flapcut
for the LASIK procedure resulting in a safer more accurate
cut.
2). Pulsatome
- an emulsification device for the quick and safe removal of a
full range of cataract hardnesses, with a lower cost per
procedure and requiring minimal technical expertise.
3). HydroRefractor
-a potential replacement for the excimer laser, to produce
lamellar flaps and "power cuts" for vision correction using
waterjet technology.
4). Continuing patent development and research on other companies
that offer complements and extensions of ophthalmic surgery
product line.
PROPERTY, PLANT AND EQUIPMENT
The planned research and development activities and the expansion of
marketing and administrative support will require additional expenditures for
property, plant and equipment within the first twelve months.
The following is a schedule of anticipated purchases of plant and
significant equipment, along with estimated expenditures:
1). Compliance with `CE' Mark Requirements $ 40,000
2). Furniture 50,000
3). Inspection, Test Equipment and Tools 67,000
4). Shop Equipment 55,000
5). Facilities Equipment 40,000
6). Tenant Improvements 35,000
7). Office Equipment 42,000
8). Computers 20,000
9). Software 105,000
10) Boardroom furnishings 20,000
----------
Total anticipated capital expenditures: $ 474,000
EMPLOYEE ADDITIONS
The Company anticipates hiring additional employees during the next
twelve months, including a Director of International Sales, a Director of
Operations, a Director of Quality Assurance, a Director of Marketing, a
Manufacturing Engineer, an Engineering Technician, and a Quality Assurance
Engineer. Also, the Company plans to hire approximately six Field Training
Managers and six Field Sales Managers. All such planned additions are contingent
on the Company obtaining sufficient funding.
11
FISCAL YEAR 2002 COMPARED TO FISCAL YEAR 2001
The Company had no sales revenues to report for 2002 and 2001, as its
operations consisted solely of investigating acquisition opportunities, the
negotiation of the merger agreement with VisiJet, and related financing
activities. The deficit for 2002 was $689,414 compared to $61,598 for 2001. The
increased deficit resulted from financial support of VisiJet and legal and
consulting expense to complete the acquisition.
General and administrative expenses increased to $701,906 in 2002 from
$61,598 in 2001. The increase is due to general working capital, administrative
expenses, legal and accounting fees and costs associated with the acquisition
and merger with Visijet, Inc.
Included in general and administrative expenses is a $336,000 charge
related to a settlement agreement with an investor and $18,635 in accrued
interest expense from notes payable to a related party.
Interest income accrued for 2002 was $12,354; there was no similar
accrual in 2001.
Funding for the expenses came from a series of private placements of
$225,000, a related party loan of $152,567 and private venture financing of
$560,590.
The Company advanced funding of $643,358 to VisiJet, Inc., to fund its
continuing progress towards bringing its products to market and completing its
proposed merger with the Company. At December 31, 2002, the notes receivable
accrued interest of $12,354.
The funding resulted in an increase in Notes Payable in 2002 of
$713,157, primarily from private venture investor funding of $560,590 and an
increase in the related party note of $152,567. Interest expense for 2002 on the
private venture investor funding was $7,175, and $11,460 for the related party
note.
CAUTIONARY FACTORS THAT MAY AFFECT FUTURE RESULTS
Additional Financing
The Company will require additional financing to achieve growth in
operations. The company is in the process of seeking additional capital through
the private placement of common stock to accredited investors. The purpose of
the offering is to fund continuing research and development, purchase new
equipment, and provide working capital.
Technological Change
If we fail to keep pace with technological advances in our industry or
if we pursue technologies that do not become commercially acceptable would
result in the need to change the focus of our research and development and
product strategies and could disrupt our business.
12
Employees
If we fail to attract, hire and retain qualified personnel, we may not
be able to develop, market or sell our products or successfully manage our
business.
Patents and Trademarks
We may be subject to intellectual property litigation and infringement
claims, which could cause us to incur significant expenses or prevent us from
selling our products. If we are unable to protect our intellectual property
rights, our business and prospects may be harmed.
ITEM 7. FINANCIAL STATEMENTS
INDEX TO FINANCIAL STATEMENTS
Auditors' Report
Balance Sheets at December 31, 2002 and December 31, 2001 (Audited)
Statements of Operations for the years ended December 31, 2002 and
2001 and the period April 21, 1997 (inception) to December
31, 2002
Statements of Cash Flows for the years ended December 31, 2002 and
2001 and the period April 21, 1997 (inception) to December
31, 2002
Statements of Shareholders' Equity (Deficit) from Inception
(April 17, 1997) to December 31, 2002
Notes to Financial Statements
13
PETERSON & CO.
CERTIFIED PUBLIC ACCOUNTANTS
INDEPENDENT AUDITORS' REPORT
Board of Directors and Stockholders
VisiJet, Inc. (formerly Ponte Nossa Acquisition Corp.)
We have audited the accompanying balance sheet of VisiJet, Inc.
(formerly Ponte Nossa Acquisition Corp.)(a Development Stage Company) as of
December 31, 2002 and 2001, and the related statements of operations,
shareholders' deficit, and cash flows for the year then ended and for the period
April 21, 1997 (inception) to December 31, 2002. These financial statements are
the responsibility of the Company's management. Our responsibility is to express
an opinion on these financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally
accepted in the United States of America. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our 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 VisiJet, Inc.
(formerly Ponte Nossa Acquisition Corp.) as of December 31, 2002 and 2001 and
the results of its operations and its cash flows for the years then ended and
for the period April 21, 1997 (inception) to December 31, 2002 in conformity
with accounting principles generally accepted in the United States of America.
As discussed in Note 1 to the financial statements, VisiJet, Inc.
(formerly Ponte Nossa Acquisition Corp.) has reported accumulated losses during
the development stage aggregating $774,998 and without additional financing,
lacks sufficient working capital to fund operations beyond JUNE 2003, which
raises substantial doubt about its ability to continue as a going concern.
Management's plans as to these matters are described in Note 1. The financial
statements do not include any adjustments to reflect the possible future effects
on the recoverability and classification of assets or the amounts and
classification of liabilities that may result from the outcome of this
uncertainty.
/s/ Peterson & Co.
PETERSON & CO.
San Diego, California
March 21, 2003
14
VisiJet, Inc.
Formerly Ponte Nossa Acquisition Corp.)
(a development stage company)
Balance Sheets
December 31,
2002 2001
---------- ----------
ASSETS
Current assets:
Notes receivable, net of accrued interest 655,712 --
---------- ----------
Total assets $ 655,712 $ --
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Accounts payable $ 60,334 $ 8,000
Accrued interest payable 18,635
Due to related parties 204,150 51,583
Notes payable 560,590 --
---------- ----------
Total current liabilities 843,709 59,583
---------- ----------
Shareholders' equity (deficit)
Preferred stock, 10,000,000 shares authorized,
$.001 par value, none issued and outstanding
at December 31, 2002 and 2001 -- --
Common stock, 20,000,000 shares authorized, $.001 par
value, 13,535,000 and 13,000,000 shares issued
and outstanding at December 31, 2002 and 2001,
respectively 13,535 13,000
Additional paid in capital 573,466 13,001
Deficit accumulated during development stage (774,998) (85,584)
---------- ----------
Shareholders' equity (deficit) (187,997) (59,583)
---------- ----------
Total liabilities and shareholders' equity (deficit) $ 655,712 $ --
========== ==========
The accompanying notes are an integral part of these financial statements.
15
VisiJet, Inc.
(Formerly Ponte Nossa Acquisition Corp.)
(a development stage company)
Statements of Operations
For the period
April 21, 1997
(inception) to
Years ended December 31, December 31,
---------------------------- -------------
2002 2001 2002
------------- ------------- -------------
Interest income $ 12,492 $ 12,492 $ 12,492
------------- ------------- -------------
Expense
General and administrative expense 347,271 61,598 432,855
Investor settlement fee 336,000 336,000
Other expense
Interest expense 18,635 18,635
------------- ------------- -------------
Total expense 701,906 61,598 787,490
------------- ------------- -------------
Net loss $ (689,414) $ (61,598) $ (774,998)
============= ============= =============
Net loss per common share - basic and diluted $ (0.0517) $ (0.0047)
============= =============
Basic and diluted weighted average
number of common shares outstanding 13,342,178 13,000,000
============= =============
The accompanying notes are an integral part of these financial statements.
16
VisiJet, Inc.
(Formerly Ponte Nossa Acquisition Corp.)
(a development stage company)
Statements of Shareholders' Equity (Deficit)
Deficit
Accumulated
Preferred Stock Common Stock Additional during the Shareholders'
--------------------------------------------- Paid In Development Equity
Shares Amount Shares Amount Capital Stage (Deficit)
---------------------------------------------------------------------------------------
Inception, April 21, 1997 -- $ -- -- $ -- $ -- $ -- $ --
Issuance of common stock -- -- 500,000 500 -- -- 500
Net loss -- -- -- -- -- (334) (334)
---------------------------------------------------------------------------------------
Balance, December 31, 1997 -- -- 500,000 500 -- (334) 166
Capital contribution -- -- -- -- 349 -- 349
Net loss -- -- -- -- -- (515) (515)
---------------------------------------------------------------------------------------
Balance, December 31, 1998 -- -- 500,000 500 349 (849) --
Capital contribution -- -- -- -- 6,145 -- 6,145
Net loss -- -- -- -- -- (6,145) (6,145)
---------------------------------------------------------------------------------------
Balance, December 31,1999 -- -- 500,000 500 6,494 (6,994) --
Capital contribution -- -- -- -- 16,992 -- 16,992
Net loss -- -- -- -- -- (16,992) (16,992)
---------------------------------------------------------------------------------------
Balance, December 31, 2000 -- -- 500,000 500 23,486 (23,986) --
Capital contribution -- -- -- -- 2,015 -- 2,015
Common shares issued for
26-for-1 stock split
effected July 26, 2001 -- -- 12,500,000 12,500 (12,500) -- --
Net loss -- -- -- -- -- (61,598) (61,598)
---------------------------------------------------------------------------------------
Balance, December 31, 2001 -- -- 13,000,000 13,000 13,001 (85,584) (59,583)
Investor settlement fee 300,000 300 335,700 336,000
Common shares issued in
private offering 235,000 235 249,765 250,000
Offering costs (25,000) (25,000)
Net loss (689,414) (689,414)
---------------------------------------------------------------------------------------
Balance, December 31, 2002 -- $ -- 13,535,000 $ 13,535 $ 573,466 $ (774,998) $ (187,997)
=======================================================================================
The accompanying notes are an integral part of these financial statements.
17
VisiJet, Inc.
(Formerly Ponte Nossa Acquisition Corp.)
(a development stage company)
Statements of Cash Flows
For the period
April 21, 1997
(inception) to
Years ended December 31, December 31,
----------------------------- ------------
2002 2001 2002
------------ ------------ ------------
Cash flows from operating activities
Net loss $ (689,414) $ (61,598) $ (774,998)
Adjustment to reconcile net loss to net
cash used by operating activities
Investor settlement fee 336,000 -- 336,000
Accrued interest receivable (12,354) -- (12,354)
Accounts payable 52,334 8,000 60,334
Accrued interest payable 18,635 -- 18,635
------------ ------------ ------------
Net cash used by operating activities (294,799) (53,598) (372,383)
------------ ------------ ------------
Cash flows from investing activities
Loan to VisiJet (643,358) -- (643,358)
------------ ------------ ------------
Net cash used in investing activities (643,358) -- (643,358)
------------ ------------ ------------
Cash flows from financing activities
Net proceeds from the issuance of common stock 225,000 2,015 251,001
Proceeds from note payable 560,590 -- 560,590
Advance from related party 152,567 51,583 204,150
------------ ------------ ------------
Net cash provided by financing activities 938,157 53,598 1,015,741
------------ ------------ ------------
Net increase (decrease) in cash -- -- --
Cash, beginning of period -- -- --
------------ ------------ ------------
Cash, end of period $ -- $ -- $ --
============ ============ ============
Supplemental disclosures of cash flow information
Investor settlement fee $ 336,000 $ -- $ 336,000
Income taxes paid $ -- $ -- $ --
Interest paid $ -- $ -- $ --
The accompanying notes are an integral part of these financial statements.
18
VISIJET, INC.
(a Development Stage Company formerly Ponte Nossa Acquisition Corp.)
Notes to Financial Statements
NOTE 1 - THE COMPANY
VisiJet, Inc., formerly known as Ponte Nossa Acquisition Corp. (the
"Company" or "VisiJet"), is a Delaware corporation originally incorporated as a
blank check company on April 21, 1997. The Company was organized for the purpose
of acquiring an interest in a suitable operating business.
On December 20, 2002, the Company entered into a Second Amended and
Restated Agreement and Plan of Merger with VisiJet, Inc., a California
corporation, for the merger of the two companies into a single company through a
wholly owned subsidiary of the Company, VisiJet Acquisition Corporation. The
merger was consummated as a reverse merger on February 11, 2003, whereby the
Company's name was changed from "Ponte Nossa Acquisition Corp." to "VisiJet,
Inc," the surviving corporation. Under the terms of the agreement and Plan of
Merger, 12,128,491 shares of the Company's common stock were issued to the
shareholders of VisiJet, Inc. In addition, warrants to purchase an additional
4,528,481 shares of common stock were issued to certain investors for cash
concurrently with the consummation of the merger. The transaction, in substance,
is a recapitalization of VisiJet, Inc. and not a business combination and
therefore a valuation was not performed and no goodwill was recorded.
On an unaudited proforma basis, had the merger occurred on January 1,
2002, the loss from operations would have increased by $763,585 for the year
ended December 31, 2002. In addition, at December 31, 2002, total assets would
have increased $90,651 primarily due to the addition of computer equipment and
other fixed assets, total liabilities would have increased by $2,850,544
primarily due to related party and other investor debt and the accumulated
deficit would have increased by $2,759,893.
GOING-CONCERN CONSIDERATIONS
As reported in the accompanying financial statements, the Company has
accumulated losses of $774,998 during the development stage and has a
stockholders' deficit and a working capital deficiency of $187,997 as of
December 31, 2002. The ability of the Company to continue as a going concern is
dependent on obtaining additional capital and financing and operating at a
profitable level. The Company intends to seek additional capital through debt or
equity offerings and to generate sales volume and operating margins necessary to
achieve profitability. There can be no assurance that any of these fundings will
be consummated in the necessary time frames needed for continuing operations on
terms favorable to the Company. If adequate funds are not available in the
future, the Company will be required to significantly curtail its operating
plans. The financial statements do not include any adjustments that might be
necessary if the Company is unable to continue as a going concern.
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES
PRINCIPLES OF CONSOLIDATION
The accompanying consolidated financial statements include the accounts
of VisiJet, Inc (formerly Ponte Nossa Acquisition Corp.) and its wholly-owned
subsidiaries. All significant intercompany accounts and transactions have been
eliminated.
19
DEVELOPMENT STAGE ENTERPRISE
The Company is a Development Stage Enterprise, as defined in Statement
of Financial Accounting Standards ("SFAS") No. 7 "Accounting and Reporting for
Development Stage Enterprises". Under SFAS No. 7, certain additional financial
information is required to be included in the financial statements for the
period from inception of the Company to the current balance sheet date.
Since the inception of the Company, management has been in the process
of raising capital through private placement stock offerings, effecting its
business merger, and performing research and development activities.
CASH AND CASH EQUIVALENTS
Cash and cash equivalents consist of deposits in an interest bearing
checking account.
NEW ACCOUNTING STANDARDS
In June 2001, the Financial Accounting Standards Board (FASB) issued
SFAS 141, Business Combinations. This statement addresses financial accounting
and reporting for business combinations and supersedes APB Opinion No. 16,
Business Combinations, and SFAS No. 38, Accounting for Preacquisition
Contingencies of Purchased Enterprises. SFAS 141 requires all business
combinations initiated after June 30, 2001 be accounted for under the purchase
method. The adoption of SFAS 141 did not have a material affect on the Company's
financial statements.
In June 2001, the FASB issued SFAS 142, Goodwill and Other Intangible
Assets. SFAS 142 addresses financial accounting and reporting for acquired
goodwill and other intangible assets and supersedes APB Opinion No. 17,
Intangible Assets. SFAS 142 is effective for fiscal years beginning after
December 15, 2001. The adoption of SFAS 142 did not have a material affect on
the Company's financial statements.
In June 2001, the FASB issued SFAS 143, Accounting for Asset Retirement
Obligations. SFAS 143 addresses financial accounting and reporting for
obligations associated with the retirement of tangible long-lived assets and the
associated asset retirement costs and pertains to legal obligations related to
retirement of long-lived assets that result from the acquisition, construction,
development and the normal operations of long-lived assets, except for certain
obligations of lessees. SFAS 143 is effective for fiscal years beginning after
June 15, 2002. Management does not believe its adoption will affect the
Company's financial statements.
In August 2001, the FASB issued SFAS No. 144, Accounting for the
Impairment or Disposal of Long-Lived Assets. This statement supersedes SFAS No.
121, Accounting for the Impairment of Long-Lived Assets and for Long-Lived
Assets to be Disposed of, and APB Opinion No. 30, Reporting the results of
Operations, Reporting the Effects of Disposal of a Segment of a Business, and
Extraordinary, Unusual and Infrequently Occurring Events and Transactions and
amends ARB No. 51, Consolidated Financial Statements. SFAS 144 is effective for
fiscal years beginning after December 15, 2001. Management does not believe its
adoption will affect the Company's financial statements.
20
In April 2002, the Financial Accounting Standards Board issued SFAS No.
145, which rescinds SFAS No. 4, "Reporting Gains and Losses from Extinguishment
of Debt," SFAS No. 44, "Accounting for Intangible Assets of Motor Carriers" and
SFAS No. 64, "Extinguishments of Debt Made to Satisfy Sinking-Fund Requirements
and amends SFAS No. 13, "Accounting for Leases." This statement updates,
clarifies and simplifies existing accounting pronouncements. As a result of
rescinding SFAS No. 4 and SFAS No. 64, the criteria in Accounting Principles
Bulletin No. 30 will be used to classify gains and losses from extinguishment of
debt. This statement is effective for financial statements issued for fiscal
years beginning after May 15, 2002.
In June 2002, the Financial Accounting Standards Board issued SFAS No.
146, "Accounting for Exit or Disposal Activities." SFAS No. 146 addresses
significant issues regarding the recognition, measurement, and reporting of
costs that are associated with exit and disposal activities, including
restructuring activities that are currently accounted for pursuant to the
guidance that the Emerging Issues Task Force ("EITF") has set forth in EITF
Issue No. 94-3, "Liability Recognition for Certain Employee Termination Benefits
and Other Costs to Exit an Activity (including Certain Costs Incurred in a
Restructuring)." The scope of SFAS No. 146 also includes costs related to
terminating a contract that is not a capital lease and certain termination
benefits provided to employees under the terms of one-time benefit arrangements.
SFAS No. 146 will be effective for exit or disposal activities that are
initiated after December 31, 2002.
USE OF ESTIMATES
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities, the disclosure of contingent assets and liabilities at
the date of the financial statements, and the amount of revenues and expenses
reported during the period. Actual results could differ from those estimates.
INCOME TAXES
The Company records income taxes using the asset and liability method.
Deferred tax assets and liabilities are recognized for the estimated future tax
consequences attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their future respective
tax bases. Deferred tax assets and liabilities are measured using enacted tax
rates in effect for the year in which those temporary differences are expected
to be recorded or settled. 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.
RECLASSIFICATION
Certain account reclassifications have been made to the financial
statements of the prior year in order to conform to classifications used in the
current year. These changes had no impact on previously stated financial
statements of the Company.
NOTE 3 - NOTES RECEIVABLE
In May 2002, the Company provided a loan of $236,000 to VisiJet, Inc.
in exchange for a senior promissory note bearing interest at 3% per annum. The
note balance, plus accrued interest of $4,760, is $240,760 as of December 31,
2002.
21
In August 2002, the Company entered into a Working Capital Loan
Agreement with VisiJet, Inc. in order to facilitate the consummation of
transactions contemplated by the pending merger agreement. The Company agreed to
loan VisiJet, Inc. up to an aggregate of $130,000 in the form of a promissory
note at 10% interest per annum. In November 2002, the Company amended the
Working Capital Loan Agreement with VisiJet, Inc., increasing the principal
amount by $75,000 or up to a total aggregate loan value of $205,000. The total
note balance, plus accrued interest of $4,829 is $207,724 as of December 31,
2002. During the fourth quarter of 2002, the Company paid an additional $106,857
in expenses on behalf of VisiJet, Inc., therefore increasing the total amount of
working capital notes receivable from VisiJet, Inc. under the Agreement to
$314,581.
In August 2002, the Company entered into a Milestone Loan Agreement
with VisiJet, Inc. in order to provide additional funding in contemplation of
the pending merger agreement. The Company agreed to loan VisiJet, Inc. up to an
aggregate of $120,000 in the form of a promissory note at 10% interest per
annum. The note balance, plus accrued interest of $2,765, is $100,371 as of
December 31, 2002.
All of the notes plus accrued interest, which mature on the anniversary
of the dates issued, are payable upon the earlier of i) the date of the closing
of the transactions of the merger agreement by and between the Company and
VisiJet, ii) termination of the merger agreement, iii) sale of the Company or
iv) the maturity date.
NOTE 4 - NOTES PAYABLE
Notes payable consist of the following:
Note payable - private venture investors (subsequently converted to VisiJet
common stock, February 11, 2003)
Senior secured promissory notes, interest at 3% per annum.
Principal and accrued interest due on the earlier of i) the
date on which the closing of the transactions of the merger
agreement by and between the Company and VisiJet,
ii) termination of the merger agreement, iii) sale $ 560,590
of the Company or iv) the maturity date in May 2003. The ==========
note is collateralized by a security interest in certain
assets and common stock of the Company.
During 2002, the proceeds from the note issuances were subsequently
loaned to VisiJet in order to fund the working capital requirements of VisiJet
(see Note 3).
NOTE 5 - RELATED PARTY TRANSACTIONS
The Company's largest shareholder, Financial Entrepreneurs Incorporated
("FEI"), has funded certain expenditures of the Company. On April 14, 2002, the
Company entered into a Promissory Note with FEI for amounts loaned to the
Company bearing an interest rate of 7.5% per annum. As of December 31, 2002,
current due to related parties in the Company's balance sheet amounts to
$215,610, including accrued interest of $11,460.
22
NOTE 6 - INCOME TAXES
There is no provision for Federal or State Income Taxes for the periods
ended December 31, 2002 and 2001, since the Company has incurred losses from
inception. Additionally, the Company has reserved fully for any potential tax
benefits resulting from its carryforward operating losses. Deferred tax assets
at December 31, 2002 and 2001 consist of the following:
2002 2001
----------- -----------
Net operating loss carryforward $ 263,499 $ 29,098
Valuation allowance (263,499) (29,098)
----------- -----------
- 0 - - 0 -
As of December 31, 2002, the Company has net operating loss carryforwards of
approximately $774,998, which may be applied against future income, if any, and
will expire in various years from 2012 through 2017.
NOTE 7 - STOCKHOLDERS' EQUITY
PRIVATE PLACEMENT
In April 2002, the Company issued 300,000 shares of common stock to an
investor in consideration for the cancellation of a warrant to purchase
5,500,000 shares of the Company's common stock for $100,000. These shares of
stock are not registered under the Securities Act of 1933 and must be held for
the time required by Rule 144 promulgated under the Securities Act. The Company
valued the common stock based on the market price as of the close of business on
April 9, 2002. As a result of the settlement, the Company incurred total
investor fees expense of $336,000.
In May 2002, the Company completed a private placement offering of
common stock and warrants with a single investor. The private placement raised
$150,000 (less $15,000 in expenses). The investor received 135,000 shares of
common stock and warrants to purchase an additional 135,000 common shares. The
initial exercise price of the warrants is $2.50 per share, escalating at a rate
of $0.50 per share over a five-year term.
In August 2002, the Company completed another private placement
offering of common stock and warrants with a single investor. The private
placement raised $100,000 (less $10,000 in expense). The investor received
100,000 shares of common stock and warrants to purchase an additional 100,000
common shares. The exercise price of the warrants is $2.50 per share over a
five-year term.
23
The proceeds from the above transactions were used for general working
capital, administrative expenses, legal and accounting fees.
The Company believes the foregoing issuances were exempt from the
registration requirements of the Securities Act 1933 by reason of Section 4(2)
thereof and Regulation D thereunder.
NOTE 8 - SUBSEQUENT EVENTS
PRIVATE PLACEMENT
During the first quarter of fiscal year 2003, the Company completed a
series of private placements of common stock and warrants with various
investors. The private placement, net of expenses, raised $672,300. The
investors received 737,500 shares of common stock for prices ranging from $1.00
to $1.25 plus warrants to purchase an additional 737,500. The exercise price of
the warrants is $2.50 per share over a five-year term.
LITIGATION
On February 5, 2003, a claim was filed against the Company by an
outside consultant stating he is entitled to a commission arising out of the
merger between Ponte Nossa Acquisition Corp. and VisiJet, Inc. The complaint
alleges that the plaintiff is entitled to 105,000 shares of the Company's common
stock. The Company denies the material allegations of the complaint and plans to
vigorously contest the action.
RELATED PARTY TRANSACTIONS
Pursuant to an agreement entered into in connection with the merger, in
February of 2003, FEI converted a promissory note held by it into 378,997 shares
of Common Stock at a conversion rate of $1.00 per share. Also, in February of
2003, the Company issued 164,319 shares of common stock to Randal A. Bailey
("Bailey"), its President and Chief Executive Officer, in cancellation of
$350,000 of unpaid salary. The Company also issued Bailey a two year promissory
note for $150,000 in satisfaction of unpaid salary. The note bears interest at a
rate of 3.5% per annum, and calls for twenty-four equal monthly installments.
Also in February of 2003, pursuant to an agreement entered into in
connection with the merger, FEI cancelled 7,957,000 shares of Company common
stock owned by it, and the Company issued FEI a five year warrant to purchase
1,500,000 shares of Common Stock at an initial exercise price of $5.00 per
share, with the exercise price increasing by $.50 per share each year. Also,
pursuant to the same agreement, the Company issued to Laurence M. Schreiber, its
Secretary, Treasurer and Chief Operating Officer, a five-year warrant to
purchase 25,000 shares of its Common Stock at an exercise price of $3.00 per
share, and issued to Thomas F. DiMele, its former President, a five year warrant
to purchase 25,000 shares of its Common Stock at an exercise price of $3.00 per
share.
ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
NONE.
24
PART III
ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE
WITH SECTION 16(A) OF THE EXCHANGE ACT
DIRECTORS AND EXECUTIVE OFFICERS
The following is a brief description of the directors and officers of the
Company:
NAME POSITION
---- --------
Richard H. Keates, M.D.* Chairman of the Board of Directors
Randal A. Bailey President and Chief Executive Officer
Laurence M. Schreiber Chief Operating Officer, Secretary and
Treasurer
Larry L. Hood Chief Engineer and Director of Research
and Development
Adam Krupp* Director
Norman Schwartz* Director
*Member of the Audit Committee and the Executive Committee
Dr. Keates has been Chairman of the Board of Directors since February
2003. He is an ophthalmologist, consultant, and professor, and has been a
Professor of Ophthalmology at New York Medical College since 1997. Dr. Keates
has served on various boards of directors, including Frigitronics (NYSE), Med
Chem (NYSE), Autonomous Technologies (NASDAQ) and Chiron Vision. Dr. Keates has
consulted for leading health care companies including IO Lab, Alcon, and Bausch
& Lomb. He is a founding partner of Intelligent Biocides, and has published over
100 articles in ophthalmology. Among his many faculty appointments, Dr. Keates
has been a professor at Ohio State University, Professor and Chairman of the
Ophthalmology Department at the University of California, Irvine. He is the
President of the New York Introcular Lens Society and recently completed his
term as the President of the New York Keratorefractive Society. Dr. Keates
graduated from the University of Pennsylvania and from the Jefferson Medical
College. He completed his Ophthalmology training at Harvard Basic Sciences in
Ophthalmology and The Manhattan Eye, Ear & Throat Hospital.
Mr. Bailey has served as President of the Company or its predecessor
since 1995. He has more than twenty-five years experience in management roles at
both medical device and pharmaceutical companies. From 1991 to 1995, Mr. Bailey
was the leader of the sales organization of Pharmacia Ophthalmics, Inc. Between
1989 and 1991, Mr. Bailey was the Vice President of Sales and Marketing for
Novoste, Inc. (NASDAQ) a start up cardiovascular company. Mr. Bailey was a
co-founder and Vice President of Sales and Marketing for Chiron Vision, Inc.,
which was acquired by Bausch & Lomb in 1997. Chiron Vision, now Bausch & Lomb
Surgical, is a leader in the manufacturing and sales of ophthalmic devices
worldwide. From 1980 to 1986 Mr. Bailey was the initial Vice President of Sales
and Marketing for Allergan Medical Optics, Inc., a leader in the ophthalmic
field.
25
Mr. Schreiber has been Secretary and Treasurer of the Company since
August 2001, and became Chief Operating Officer in February 2003. Before 2001 he
founded Diversified International, a multilevel marketing system, and served as
Chief Executive Officer of Learn America, a multimedia productions company
combining advanced computer technology and educational systems. Mr. Schreiber
also served as President and a director of Philibus Systems, a private
educational system, and was President of Advanced Nutritional Associates, which
distributed health care products in the United Kingdom and Europe. He has
developed an independent sales distribution system for Herbalife, and pioneered
markets in the United Kingdom, Spain and Israel.
Mr. Hood has over thirty-five years experience in designing and
bringing systems to market in areas such as data acquisition, telemetry,
orthopedic surgical, ophthalmic surgical, diagnostics, lasers and power
ultrasonics. Mr. Hood has been employed by Cavitron/Coopervision/Alcon, Biomet
and Plesseys in the past, and is an inventor in a number of fields, with more
than fifty U.S. patents issued or pending.
Mr. Krupp has over eighteen years of business experience with emerging
growth companies. He is currently a Managing Director and a member of the
Executive Committee of CS Technology, Inc, a New York based technology
consulting firm. CS Technology provides "mission critical" technology support
services for a myriad of companies from small start-ups to large financial
institutions. Prior to joining CS Technology, Inc., Mr. Krupp spent ten years in
the real estate industry working for several organizations in development,
construction, and leasing. Mr. Krupp holds a B.A. from the University of
Michigan and an M.S. from New York University.
Mr. Schwartz has over thirty years of experience in providing legal and
financial advice to individuals and companies. He has acted as Chief Financial
Officer and president to several companies, both public and private, including
Acubid International, Ameritrust, and Farm Energy Corp. He served on the Board
of International Acuvision Systems, a public company that developed and patented
vision training equipment. He is an active member of the Arizona Bar
Association. Mr. Schwartz graduated from Arizona State University, completed his
JD at the University of Arizona, and received his LLM in taxation from New York
University.
Directors hold office until a successor is elected and qualified or
until their earlier resignation in the manner provided in the Bylaws of the
Company.
SECTION 16 COMPLIANCE
Section 16(a) of the Exchange Act requires the Company's officers and
directors, and persons who own more than 10% of a registered class of the
Company's equity securities (the "10% Stockholders"), to file reports of
ownership and changes of ownership with the Securities and Exchange Commission.
Officers, directors and 10% Stockholders of the Company are required by
Commission regulation to furnish the Company with copies of all Section 16(a)
forms so filed. Based upon a review of filings made and other information
available to it, the Company believes that each of the Company's present Section
16 reporting persons filed all forms required of them during the year 2002 by
Section 16 (a).
ITEM 10. EXECUTIVE COMPENSATION
The Company paid no compensation to its executive officers or directors
during 2002.
26
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED STOCKHOLDER MATTERS
The following table sets forth certain information regarding the
beneficial ownership of the shares of Common Stock as of March 1, 2003 by (i)
each person who is known by the Company to be the beneficial owner of more than
five percent (5%) of the issued and outstanding shares of Common Stock, (ii)
each of the Company's directors and executive officers and (iii) all directors
and executive officers as a group.
NAME NUMBER OF SHARES PERCENTAGE
---- ---------------- ----------
Financial Entrepreneurs, Inc. 4,599,001(1) 24.4%
Richard H. Keates, M.D. -0- *
Randal A. Bailey 394,319
Laurence Schreiber 25,000(2) *
Adam Krupp -0- *
Norman Schwartz 6,100 *
Lance Doherty 4,077,206 (3) 21.7(3)
Doherty Trust 591,319 (3) 3.1(3)
PCL Associates, LLC 1,250,000 6.6
David E. Eisenberg Trust 1,250,000 6.6
All directors and executive 425,419 (4) 2.3
officers as a group (5 persons)
(1) Includes 1,500,000 shares issuable upon exercise of currently exercisable
warrants.
(2) Consists solely of shares issuable upon exercise of currently exercisable
warrants.
(3) Subject to confirmation of shareholder records.
(4) Includes 25,000 shares issuable upon exercise of currently exercisable
warrants.
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Company's largest shareholder, Financial Entrepreneurs Incorporated
("FEI"), has funded certain expenditures of the Company. On April 14, 2002, the
Company issued a Promissory Note to FEI for amounts loaned to the Company,
bearing an interest rate of 7.5% per annum. As of December 31, 2002, current
amount due to related parties in the Company's balance sheet amounts to
$215,610, including accrued interest of $11,460.
In February of 2003, FEI converted a promissory note held by it into
378,997 shares of Common Stock at a conversion rate of $1.00 per share. Also, in
February of 2003, the Company issued 164,319 shares of Common Stock to Randal A.
Bailey, its President and Chief Executive Officer, in cancellation of $350,000
27
of unpaid salary. The Company also issued Bailey a two year promissory note for
$150,000 in satisfaction of unpaid salary. The note bears interest at a rate of
3.5% per annum, and calls for twenty-four equal monthly installments.
Also in February of 2003, pursuant to an agreement entered into in
connection with the merger, FEI cancelled 7,957,000 shares of Company Common
Stock owned by it, and the Company issued FEI a five year warrant to purchase
1,500,000 shares of Common Stock at an initial exercise price of $5.00 per
share, with the exercise price increasing by $.50 per share each year. Also,
pursuant to the same agreement, the Company issued to Laurence M. Schreiber, its
Secretary, Treasurer and Chief Operating Officer, a five-year warrant to
purchase 25,000 shares of its Common Stock at an exercise price of $3.00 per
share, and issued to Thomas F. DiMele, its former President, a five year warrant
to purchase 25,000 shares of its Common Stock at an exercise price of $3.00 per
share.
ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
2.1 Second Amended and Restated Agreement and Plan of Merger, dated
December 20, 2002 among Ponte Nossa Acquisition Corp., VisiJet, Inc.,
and VisiJet Acquisition Corporation (1)
2.2 Amendment No. 1, dated January 15, 2003, to Second Amended and Restated
Agreement and Plan of Merger
3.1 Certificate of Incorporation of the Company (2)
3.2 Certificate of Amendment of the Certificate of Incorporation, as filed
on January 16, 2003
3.3 Agreement of Merger, filed February 11, 2003
3.4 Certificate of Ownership and Merger, filed February 12, 2003.
3.5 Amended and Restated Bylaws
10.1 Patent License Agreement between SurgiJet, Inc. and VisiJet, Inc.,
dated October 23, 1998
10.2 Amendment No. 1 to Patent License Agreement, dated December , 2002*
10.3 Technology License Agreement between SurgiJet, Inc. and VisiJet, Inc.,
dated October 23, 1998
10.4 Amendment No. 1 to Technology License Agreement, dated December , 2002*
10.5 Trademark License Agreement between SurgiJet, Inc. and VisiJet, Inc.,
dated October 23, 1998
10.6 Amendment No. 1 to Trademark License Agreement, dated December , 2002*
10.7 Warrant, dated February 11, 2003, issued to PCL Associates
28
10.8 Warrant, dated February 11, 2003, issued to David E. Eisenberg Trust
10.9 Warrant, dated February 11, 2003, issued to Laurence Schreiber
10.10 Warrant, dated February 11, 2003, issued to Financial Entrepreneurs
Incorporated
99.1 Certification of the Chief Executive Officer pursuant to 18 U.S.C.
Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002.
99.2 Certification of the Chief Financial Officer pursuant to 18 U.S.C.
Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002.
(1) Incorporated by reference from Report on Form 8-K of the Company, filed
on January 7, 2003
(2) Incorporated by reference from Registration Statement on Form 10-SB of
the Company, filed on March 22, 1999
(b) Reports on Form 8-K
(i) Report on Form 8-K, dated November 27, 2002, filed on December 6, 2002.
ITEM 14. CONTROLS AND PROCEDURES
Under the supervision and with the participation of our Chief
Executive Officer and Principal Accounting Officer, we conducted an evaluation
of our disclosure controls and procedures, as such term is defined under Rule
13a-14(c) promulgated under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), within 90 days of the filing date of this report. Based on this
evaluation, our Chief Executive Officer and the Principal Accounting Officer
concluded that the Company's disclosure controls and procedures are effective.
Disclosure controls and procedures are designed to ensure that information
required to be disclosed in reports under the Exchange Act are processed and
reported within the time periods specified by law. The design of any such system
of controls is based in part on assumptions about the likelihood of future
events, and there can be no assurance that any such system of controls will
succeed in all circumstances.
Since the date of the evaluation described above, there have been no
significant changes in our internal controls or in other factors that could
significantly affect these controls.
29
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant
caused this Amendment to report to be signed on its behalf by the undersigned,
thereunto duly authorized.
VisiJet, Inc.
Dated: April 11 , 2003 /s/ Randal A. Bailey
------------------------------
Randal A. Bailey, President
/s/ Laurence Schreiber
------------------------------
Laurence Schreiber, Secretary
In accordance with the Exchange Act, this report has been signed by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
Signature Title Date
/s/ Randal A. Bailey
-----------------------
Randal A. Bailey President (Principal Executive Officer) April 11 ,2003
/s/ Laurence Schreiber
-----------------------
Laurence Schreiber Treasurer (Principal Financial Officer) April, 11 2003
/s/ Richard H. Keates
-----------------------
Richard H. Keates, M.D. Director April 11 ,2003
-----------------------
Adam Krupp Director April , 2003
/s/ Norman Schwartz
-----------------------
Norman Schwartz Director April 11, 2003
30
CERTIFICATION
I, Randal A. Bailey, principal executive officer, certify that:
1. I have reviewed this annual report on Form 10-KSB of VisiJet, Inc.;
2. Based on my knowledge, this annual report does not contain any untrue
statement of material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this annual
report;
3. Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this annual report;
4. The registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:
a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly
during the period in which this annual report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls
and procedures as of a date within 90 days prior to the filing date of this
annual report (the "Evaluation Date"); and
c) presented in this annual report our conclusions about the
effectiveness of the disclosure controls and procedures based on our evaluation
as of the date of the Evaluation Date;
5. The registrant's other certifying officer and I have disclosed, based
on our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent functions):
a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to record,
process, summarize and report financial data and have identified for the
registrant's auditors any material weaknesses in internal controls; and
b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal controls; and
6. The registrant's other certifying officer and I have indicated in
this annual report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.
Date: April 11, 2003 By: /S/ RANDAL A. BAILEY
--------------------------------
Randal A. Bailey, President
31
CERTIFICATION
I, Laurence M. Schreiber, principal financial officer, certify that:
1. I have reviewed this annual report on Form 10-KSB of VisiJet, Inc.;
2. Based on my knowledge, this annual report does not contain any untrue
statement of material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this annual
report;
3. Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this annual report;
4. The registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:
a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly
during the period in which this annual report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls
and procedures as of a date within 90 days prior to the filing date of this
annual report (the "Evaluation Date"); and
d) presented in this annual report our conclusions about the
effectiveness of the disclosure controls and procedures based on our evaluation
as of the date of the Evaluation Date;
5. The registrant's other certifying officer and I have disclosed, based
on our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent functions):
c) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to record,
process, summarize and report financial data and have identified for the
registrant's auditors any material weaknesses in internal controls; and
d) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal controls; and
6. The registrant's other certifying officer and I have indicated in
this annual report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.
Date: April 11, 2003 By: /s/ Laurence M. Schreiber
--------------------------------
Laurence M. Schreiber, Treasurer
32