SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM S-1

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

 

AVRA MEDICAL ROBOTICS, INC.

(Exact name of registrant as specified in its charter)

 

Florida   3841   47-3478854

(State or other jurisdiction of

incorporation or organization)

 

(Primary Standard Industrial

Classification Code Number)

 

(I.R.S. Employer

Identification No.)

 

3259 Progress Drive

Suite 126

Orlando, FL 32826

(407) 956-2250

(Address, including zip code, and telephone number,

including area code, of registrant’s principal executive officer)

 

Barry F. Cohen

CEO

3259 Progress Drive

Suite 126

Orlando, FL 32826

(407) 956-2250

Name, address, including zip code, and telephone number,

including area code, of agent for service)

 

Copies to:

Dale S. Bergman, Esq.

Gutierrez Bergman Boulris, PLLC

100 Almeria Avenue, Suite 340

Coral Gables, Florida 33134

(305) 358-5100

 

Approximate date of commencement of proposed sale to the public:  From time to time after the effective date of this Registration Statement.

 

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act, check the following box.   x

 

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.   ¨

 

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.   ¨

 

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.   ¨

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.  See the definitions of “ large accelerated filer ,” “ accelerated filer ” and “ smaller reporting company ” in Rule 12b-2 of the Exchange Act.

 

 Large accelerated filer ¨ Accelerated filer ¨
Non-accelerated filer ¨ Smaller reporting company x
(Do not check if a smaller reporting company)   

  

CALCULATION OF REGISTRATION FEE

 

Title of each class of Securities to be
Registered(1)
    Amount
to be
Registered
      Proposed
Maximum
Offering
Price Per
Share(2)(3)
      Proposed
Maximum
Aggregate
Offering
Price
      Amount of
Registration
Fee
 
                                 
Common Stock, $0.0001 per share     8,612,400     $ 2.00     $ 17,224,800     $ 1,996.35  

 

(1) This registration statement covers the resale by our selling shareholders of up to 8,612,400 shares of common stock previously issued to such selling shareholders.

 

(2) The offering price has been estimated solely for the purpose of computing the amount of the registration fee in accordance with Rule 457.  The proposed maximum offering price is based on the estimated high end of the range at which the common stock will initially be sold.

 

(3) The selling shareholders will offer their shares at $2.00 per share until the Company’s shares are quoted on the OTCQX or the OTCQB tiers of the over-the-counter-market operated by OTC Markets Group, Inc. and, assuming we secure this quotation, thereafter at prevailing market prices or privately negotiated prices.

 

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, as amended, or until the registration statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.

 

 

 

  

The information in this preliminary prospectus is not complete and may be changed.  We may not sell these securities nor may offers to buy these securities be accepted until the registration statement filed with the Securities and Exchange Commission becomes effective.  This preliminary prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.

 

SUBJECT TO COMPLETION, DATED FEBRUARY 14, 2017

 

PROSPECTUS

 

AVRA MEDICAL ROBOTICS, INC.

 

8,612,400 Shares of Common Stock

 

The selling shareholders named in this prospectus are offering up to 8,612,400 shares of common stock through this prospectus.  We will not receive any proceeds from this offering and have not made any arrangements for the sale of these securities.  

 

Our common stock is presently not traded on any market or securities exchange.  Given the foregoing, the selling shareholders will offer their shares at $2.00 per share until the shares are quoted on the OTCQX or the OTCQB tiers of the over-the counter operated by OTC Markets Group, Inc (“ OTC Markets Group ”).  Although we intend to apply for quotation of our common stock on the OTCQX or the OTCQB tiers of the over-the counter market operated by OTC Markets, we may not secure this qualification and even if we do an active public market for our common stock may never materialize.  If we secure this qualification, the sale price to the public of the shares registered hereunder will be at prevailing market prices or privately negotiated prices.

 

The Company is an emerging growth company under the Jumpstart Our Business Startups Act of 2012 (the “ Jobs Act ”) and as such, may elect to comply with certain reduced public company reporting requirements for future filings.

 

The purchase of the shares of common stock offered through this prospectus involves a high degree of risk.  See the section of this prospectus entitled “Risk Factors” beginning at page 5.

 

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed upon the adequacy or accuracy of this prospectus.  Any representation to the contrary is a criminal offense.

 

The prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.

 

The date of this prospectus is ____________ __, 2017

 

 

 

  

TABLE OF CONTENTS

 

    Page
ABOUT THIS PROSPECTUS   1
PROSPECTUS SUMMARY   2
SUMMARY FINANCIAL INFORMATION   5
RISK FACTORS   6
USE OF PROCEEDS   19
DETERMINATION OF OFFERING PRICE   19
DILUTION   19
SELLING SHAREHOLDERS   20
PLAN OF DISTRIBUTION   24
PROPOSED BUSINESS   26
MARKET FOR COMMON EQUITY AND RELATED SHAREHOLDER MATTERS   34
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS   35
MANAGEMENT   38
EXECUTIVE COMPENSATION   42
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT   45
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS   45
DESCRIPTION OF CAPITAL STOCK   46
LEGAL MATTERS   46
EXPERTS   46
AVAILABLE INFORMATION   46
DISCLOSURE OF SEC POSITION ON INDEMNIFICATION FOR SECURITIES ACT LIABILITIES   47
INDEX TO FINANCIAL STATEMENTS   F-1

 

 

 

  

ABOUT THIS PROSPECTUS

 

This prospectus is part of a registration statement that we filed with the Securities and Exchange Commission (the “ SEC ”) using the SEC’s registration rules for a delayed or continuous offering and sale of securities.  Under the registration rules, using this prospectus and, if required, one or more prospectus supplements, the selling shareholders named herein may distribute the shares of common stock covered by this prospectus.  This prospectus also covers any shares of common stock that may become issuable as a result of stock splits, stock dividends or similar transactions.  A prospectus supplement may add, update or change information contained in this prospectus.

 

You should rely only on the information contained in this prospectus. We have not authorized any dealer, salesperson or other person to provide you with information concerning us, except for the information contained in this prospectus. The information contained in this prospectus is complete and accurate only as of the date on the front cover page of this prospectus, regardless when the time of delivery of this prospectus or the sale of any common stock. This prospectus is not an offer to sell, nor is it a solicitation of an offer to buy, our common stock in any jurisdiction in which the offer or sale is not permitted.

 

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PROSPECTUS SUMMARY

 

This summary provides an overview of all material information contained in this prospectus.  It does not contain all the information you should consider before making a decision to purchase the shares our selling shareholders are offering.  You should very carefully and thoroughly read the more detailed information in this prospectus and review our financial statements and all other information that is incorporated by reference in this prospectus.

 

Unless the context otherwise requires, references in this prospectus to “ AMR, ” “ AVRA ” “ the Company, ” “ we, ” “ our ” and “ us ” refers to Avra Medical Robotics, Inc.

 

Overview

 

AVRA was organized by a senior leadership team with broad and deep experience in medical research, innovation and development in the medical robotics field. The Company plans to exploit the growing demand for practical medical robotic devices by developing a platform-independent precision guidance system with an initial focus on skin resurfacing. The Company believes that its team brings the necessary resources, including intellectual property, to develop and commercialize intelligent medical robotic systems, as well as in marketing, chain management, and the implementation of all other aspects of business operations. The Company believes that progress in mechanical and software engineering has made possible lightweight and relatively inexpensive robotic devices for difficult procedures in various medical fields. AVRA and its management team have been active in the medical robotics space for many years, sponsoring, for example, www.allaboutroboticsurgery.com , an extensive reference data base for medical robotics news.

 

Medical robots are already being successfully employed in several areas of surgery, including Urology (Prostate), Colo-Rectal, Gynecology, Thoracic, General Surgery, Neuro and Spine Surgery. Robots are also being used for Tele-medicine and assistive robotic methods are addressing the delivery of healthcare in inaccessible locations, ranging from rural areas lacking specialist expertise to post-disaster and battlefield areas. With the aging population dominating demographics in the US across all spectrums of health care, robotic technologies are being developed toward promoting improved function, less morbidity and improved overall outcomes.

 

Today, the US is the leader in robot-assisted surgery for the possibility of cure and improved quality of life. However, other countries are fast followers, having already recognized both the need and the promise of such technologies. The development of surgical robotics is motivated by the desire to enhance the effectiveness of a procedure by coupling information to action in the operating room or interventional suite, and transcend human physical limitations in performing surgery and other interventional procedures, while still affording human control over the procedure. Two decades after the first reported robotic surgical procedure, surgical robots are now being widely used in the operating room. Surgical robots are beginning to realize their potential in terms of improved accuracy and visualization, as well as enabling new procedures.

 

Current robots used in surgery are under the direct control of a surgeon – the so-called “Master-slave system”, often in a teleoperation scenario in which a human operator manipulates a master input device and the patient-side robot follows the input. In contrast to commonly held beliefs where robots are autonomous, traditional minimally invasive surgical robots provide the surgeon with a higher degree of dexterity inside the body, eliminate operator tremor, scale down operator motions to a fraction of normal distances, and provide a very intuitive connection between the operator and the instrument tips. The surgeon can cut, cauterize, suture and reconstruct tissue with accuracy equal to or better than that of invasive open surgery. A surgical system contains both robotic devices and real-time imaging devices to visualize the operative field during the course of surgery.

 

The use of robotics in medicine inherently involves physical interaction between caregivers, patients, and robots – in all combinations. Developing user-friendly physical interfaces between humans and robots requires all the classic elements of a robotic system: sensing, perception, and action. A great variety of sensing and perception tasks are required, including recording the motions and forces of a surgeon to infer their intent, determining the mechanical parameters of human tissue, and estimating the forces between a rehabilitation robot and a moving stroke patient. The reciprocal nature of interaction means that the robot will also need to provide useful feedback to the human operator, whether that person is a caregiver or a patient. We need to consider systems that involve many human senses, the most common of which are vision, haptics (force and tactile), and sound. A major reason why systems involving physical collaboration between humans and robots are so difficult to design well is that, from the perspective of a robot, humans are extremely uncertain and dynamic.

 

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Unlike in a passive, static environment, humans dynamically change their motion, force, and immediate purpose throughout a procedure. These changes can be caused by something as simple as physiologic movement (e.g., a patient breathing during surgery), or as complex as the motions of a surgeon suturing during surgery. During physical interaction with a robot, the human is an integral part of a closed-loop feedback system, simultaneously exchanging information and energy with the robotic system, and thus cannot simply be thought of as an external system input. In addition, the loop is often closed with both human force and visual feedback, each with its own errors and delays that can potentially cause challenges in a human-robot system. Given these problems, how does one guarantee safe, collaborative and useful physical interaction between robots and humans? To date, no existing systems provide the user with an ideal experience of physically interacting with a robot.

 

Device design and control are essential to the operation of all medical and health robots, since they interact physically with their environment. Accordingly, one of the most important technical challenges is in the area of mechanisms. Miniaturization is challenging in large part because current electromechanical actuators (the standard because of their desirable controllability and power to weight ratio) are relatively large. Biological analogs (e.g., human muscles) are far superior to engineered systems in terms of compactness, energy efficiency, low impedance, and high force output. Interestingly, these biological systems often combine "mechanisms" and "actuation" into an integrated, inseparable system. Goals for systems that achieve high dexterity at any scale will naturally differ greatly depending on the medical application (e.g. the surgery, rehabilitation, and prosthetics).

 

AVRA is focusing on truly innovative technology that is in line with current applications, but delivers an innovative approach. AVRA is integrating image-guidance with navigation and organ-targeting to bring a system that is truly diverse and multi-dimensional. Having identified limitations in the predominantly non-autonomous systems, AVRA proposes a disruptive model, which considers design and development through a seamless collaboration of the Surgeon, the Engineer and the Scientist.

 

For skin resurfacing, technological improvements in motors, materials and in high resolution imaging allow for the use of robotic devices to assist the surgeon to autonomously treat damaged skin. Presently, we are not aware of any commercially available robotic devices designed for this application.

 

In 2016, the global skin care market is estimated to be at least US$121 billion 1 . The male segment of this market is small, but is increasing steadily, suggesting years of additional potential future growth.

 

AVRA is currently developing an intelligent medical robotic system for minimally invasive surgical facial corrections (i.e., skin resurfacing) in partnership with the University of Central Florida (“ UCF ”), pursuant to a research agreement entered into with UCF effective as of May 1, 2016 (the “ Research Agreement ”). UCF is recognized particularly for its work in the area of medical robotic research and design, focusing on the guidance systems. We anticipate that application of this expertise will allow AVRA’s medical robotic system to handle a wide array of the currently available “tools” in the market. The Company plans to target a large market for its initial robotic system, which currently includes such solutions as Botox and CO2 lasers used for keratosis removal and treatment of scarring, discoloration and other skin problems that are often difficult to treat.

 

Moreover, while AVRA is in development of its robotic system and anticipates that it is ready to build a prototype (as all elements of a robotic device have been designed), to date we have no products or training programs approved or ready for retail marketing and there can be no assurance as to when products will be ready to reach market. Unanticipated delays in market readiness will substantially harm the Company’s prospects.

 

To date, the Company has not generated revenues and has operated with limited capital. The Company will require significant capital to implement its business plan.  There can be no assurance that the Company can raise the necessary funds, on favorable terms or otherwise.  Failure to obtain sufficient capital will substantially harm the Company’s prospects.

 

 

  1 Statista, http://www.statista.com/statistics/254612/global-skin-care-market-size/

 

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Corporate Information

 

The Company was incorporated in the state of Florida on February 4, 2015 under the name “ Avra Surgical Microsystems, Inc. ” and changed its name to “ Avra Medical Robotics Inc. ”, on November 5, 2015.

 

Our principal executive offices are located at 3259 Progress Drive, Suite 126, Orlando, FL 32826.  Our telephone number is 407.956.2250. Our corporate website is www.avramedical.com . Information appearing on our corporate website is not part of this prospectus.

 

Selling Shareholders

 

On February 4, 2015, the Company issued an aggregate of 13,100,400 shares to its founder at par value, for aggregate consideration of $1,310. The resale of 5,240,160 of these shares is covered by this prospectus.

 

Effective February1, 2016, the Company issued an aggregate of 5,899,600 shares of common stock in a private offering to initial shareholders and investors (other than its founder) at par value, for aggregate consideration of $590. The resale of 3,372,240 of these shares is covered by this prospectus.

 

The Offering

 

This prospectus relates to the resale from time to time by the selling shareholders identified in this prospectus of 8,612,400 shares of our common stock, par value $0.0001 per share.  No shares are being offered for sale by the Company.

 

Common stock offered by selling shareholders: 8,612,400 shares of common stock.
   
Common stock outstanding on February 10, 2017: 19,135,000 shares of common stock (1).
   
Terms of the Offering: The selling shareholders will determine when and how they will sell the shares of common stock offered in this prospectus.
   
Use of proceeds: We will not receive any proceeds from the sale of the shares of common stock offered by the selling shareholders under this prospectus.
   
Risk factors: The common stock offered hereby involves a high degree of risk and should not be purchase by investors who cannot afford the loss of their entire investment.

  

 

 

(1) Does not include (a) 3,000,000 shares of our common stock reserved for issuance under our 2016 Incentive Stock Plan and (b) 960,000 shares of our common stock issuable upon conversion of $480,000 in outstanding principal amount of our 7.5% Convertible Promissory Notes due June 30, 2017 (the “ Convertible Notes ”).

 

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SUMMARY FINANCIAL INFORMATION

 

The following summary financial data should be read in conjunction with “ Management’s Discussion and Analysis of Financial Condition and Results of Operations ,” and the Financial Statements and Notes thereto, included elsewhere in this prospectus.

 

    For the Nine Months        
    Ended     For the Year Ended  
Statement of Operations   September 30,     December 31,  
    2016     2015  
    (Unaudited)        
             
Revenues   $ -     $ -  
Cost of Sales   $ -     $ -  
Research  and Development   $ 81,654     $ -  
Other Selling, General and Interest Expenses   $ 208,488     $ 34  
Net Loss   $ (290,142 )   $ (34 )

 

    As of     As of  
Balance Sheet Data   September 30,     December 31,  
    2016     2015  
    (Unaudited)        
             
Cash   $ 288,726     $ 100  
Total Assets   $ 339,458     $ 100  
Total Liabilities   $ 534,442     $ 166  
Total Stockholders' Deficiency   $ (194,984 )   $ (66 )

 

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RISK FACTORS

 

The shares of our common stock being offered for resale by the selling shareholders are highly speculative in nature, involve a high degree of risk and should be purchased only by persons who can afford to lose the entire amount invested in the common stock.  Before purchasing any of the shares of common stock, you should carefully consider the following factors relating to our business and prospects.  If any of the following risks actually occurs, our business, financial condition or operating results could be materially adversely affected.  In such case, you may lose all or part of your investment.  You should carefully consider the risks described below and the other information in this process before investing in our common stock.

 

We are a development stage company with a limited operating history and our future profitability is uncertain.

 

We were incorporated in Florida on February 4, 2015 under the name " Avra Surgical Microsystems, Inc ." We changed our name to “ Avra Medical Robotics Inc. ” on November 5, 2015. We are currently in the development stage with a limited operating history and no revenues from operations to date.  We have not yet demonstrated our ability to generate revenue, and we may not be able to produce revenues or operate on a profitable basis.  As a result, it is difficult to evaluate our performance and to forecast our future operating results. Our prospects must be considered in light of the risks, uncertainties, expenses and difficulties frequently encountered by an early development stage company in a relatively new, potentially highly competitive healthcare industry. Moreover, as an early stage company, we have no prior experience in implementing and managing our planned business in an operational setting. Accordingly, there can be no assurance that we will be able to successfully implement our business plans or strategies.

 

We cannot provide any assurance that we will be successful in addressing the risks which we may encounter, and our failure to do so could have a material adverse effect on our business, prospects, financial condition and results of operations.

 

AVRA is party to the Research Agreement with UCF, pursuant to which UCF is undertaking a significant portion of the development work for the prototype of our intelligent medical robot device for skin resurfacing.  If UCF is unable to perform its obligations under this agreement, our business may be adversely affected and your investment may become worthless.

 

Effective May 1, 2016, AVRA entered into the Research Agreement with UCF, pursuant to which UCF is undertaking a significant portion of the development work for the prototype of our planned intelligent medical robotic device for minimally invasive surgical facial corrections (i.e., skin resurfacing). Our ability to develop and ultimately commercialize our initial planned product may be significantly adversely impacted if UCF is unable or otherwise fails to perform its obligations under the Research Agreement. In such case, we may be unable to develop our business as planned. In the event of such inabilities your investment in our common stock may become worthless.

   

As we develop our business we anticipate future losses and negative cash flow, which may limit or delay our ability to become profitable.

 

We have incurred losses since our inception and expect to experience operating losses and negative cash flow for the foreseeable future.  As of September 30, 2016, we had a net loss since inception of $290,208. We anticipate our losses will continue to increase from current levels because we expect to incur additional costs and expenses related to developing our business, including research and development costs, employee related costs, capital expenditures, the costs of complying with government regulations, sales force, manufacturing, distribution and training.  We can provide no assurance as to when, or if, the products we intend to develop will become commercially viable, generate revenues, or become profitable.  Even if we achieve profitability, we may not be able to sustain it.

   

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We will require substantial additional financing to complete development of, obtain regulatory approvals and protections, manufacture and market our planned intelligent medical robotic system and to develop and commercialize other medical robotic systems in the future. A failure to obtain this necessary capital when needed on acceptable terms, or at all, could force us to delay, limit, reduce or terminate our product development activities, other operations or commercialization efforts.

 

We have no products yet developed or approved for retail marketing, have generated no revenues from operations to date and may not be able to produce revenues in the foreseeable future. Our capital needs to date have been met by private offerings of our securities or loans. We believe that we will continue to expend substantial resources for the foreseeable future on the completion of development of our planned intelligent medical robotic system, securing necessary regulatory approvals, manufacture, marketing and other commercialization efforts for the AVRA medical robotic system and development and commercialization of additional medical robotic systems in the future.

 

Our future capital requirements depend on many factors, including:

 

· the scope, progress, results and costs of research and development of our planned medical robotic system and any future products we may seek to develop;

 

· the cost, time and success of obtaining regulatory approval, if any are mandated, of our planned system;

 

· The cost, time and success of obtaining patent and other intellectual property protections;

 

· the cost of commercialization activities of our planned system and any future products which we may develop and seek to commercialize;

 

· our ability to establish and maintain strategic collaborations, licensing or other arrangements and the financial terms of such agreements, if we choose to utilize such arrangements in connection with the commercialization of our planned and future medical robotic systems;

 

· the number and characteristics of any future product we may develop;

 

· any product liability or other lawsuits related to our products or commenced against us;

 

· the expenses needed to attract and retain skilled personnel;

 

· the costs associated with being a public company; and

 

· the costs involved in preparing, filing, prosecuting, maintaining, defending and enforcing patent claims or other intellectual property rights, including litigation costs and the outcome of such litigation.

 

Additional funds may not be available when we need them, on terms that are acceptable to us, or at all. If adequate funds are not available to us on a timely basis, we may be required to:

 

· delay, limit, reduce or terminate development activities for our current or future medical robotic systems, if any;

 

· delay, limit, reduce or terminate our research and development activities; or

 

· delay, limit, reduce or terminate our establishment of sales and marketing capabilities or other activities that may be necessary to commercialize our current or future product candidates.

 

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Raising additional capital may cause dilution to our existing shareholders.

 

We expect to raise some or all of the funds we need to develop our products by selling our securities, including but not limited to sales of our common stock, in private or public offerings.  Sales of our common stock will likely have a dilutive effect on our existing shareholders.

 

If our planned products do not achieve market acceptance, we will not be able to generate the revenue necessary to support our business.

 

We expect that our intelligent medical robotic system, once developed, will offer an important alternative device to perform certain skin resurfacing procedures.  Achieving physician and patient acceptance of our system as a preferred device will be crucial to our success.  If our products fail to achieve market acceptance, customers will not purchase our products and we will not be able to generate the revenue necessary to support our business.  We believe that physicians’ acceptance of the benefits of procedures performed using our system will be essential for acceptance of our systems by patients.  Our system will represent new technologies that will compete with established and emerging treatment options in the world of skin resurfacing procedures.  Some of these procedures are widely accepted in the medical and skin resurfacing communities and in many cases have a long history of use.  Physicians will not recommend the use of our system unless we can demonstrate that they produce results comparable or superior to existing techniques.  Technological advances could also make such traditional treatments more effective or less expensive than using our planned system, which could render our system obsolete or unmarketable.  Studies could also be published that show that other treatment options are more beneficial and/or cost-effective than our planned system. We cannot be certain that physicians will use our systems, if developed and approved, to replace or supplement established treatments or that our system will continue to be competitive with current or future technologies.  If our medical robotic system, once developed, is not accepted and not competitive, our business and financial results will be materially adversely affected.

 

Even if we can prove the effectiveness of our planned intelligent medical robotic system through clinical trials, physicians may elect not to use our products.  For example, physicians may continue to recommend existing techniques or current devices simply because such methods are already widely accepted.  In addition, physicians may be slow to adopt our system because of the perceived liability risks arising from the use of a new system.  If our system does not receive market acceptance, we will not be able to generate the revenue to support our business.

 

We do not have training experience or capabilities on this new system yet and we may encounter delays in developing such experience or capabilities or resistance from customers to the effort required to be trained, problems or delays that could result in lost revenue.

 

We anticipate that there will be a learning process involved for users of our intelligent medical robotic system to become proficient in its use. Broad use of our system will require training. Market acceptance could be delayed by the time required to complete this training. We may not be able to rapidly train users in numbers sufficient to generate adequate demand for our system.

 

Our industry is highly competitive and if we fail to effectively compete, our business and financial results would be significantly harmed.

 

We consider our primary initial competition will come from existing skin resurfacing procedures. Our success will depend in part on convincing hospitals, physician practices and patients to convert from conventional treatment methods to AVRA’s planned intelligent medical robotic system to perform these procedures.

 

In addition, a number of companies manufacture and market or are developing and planning to market various robotic systems that are designed to be used in performing various surgical procedures. Many of these companies have significantly greater experience and financial resources than does AVRA. While we currently do not know of any medical robotic companies currently targeting the skin resurfacing market, our revenues may be reduced or eliminated if our competitors do develop and market products that are more effective or less expensive than our products.

 

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We believe that the primary competitive factors in the market we address will be procedural capability, cost of operations, efficacy, ease of use, quality, reliability, and effective sales support, training and service. If we fail to effectively compete, our business and financial results would be significantly harmed.

 

If defects are discovered in our products, we may incur additional unforeseen costs stemming from physicians, hospitals and other potential customers possibly not purchasing our products and our reputation may suffer.  This would have a material adverse effect on our business.

 

Our products will incorporate mechanical parts, electrical components, optical components and computer software, any of which can contain errors or failures, especially when first introduced.  In addition, new products such as ours or enhancements to them may contain undetected errors or performance problems that, despite testing, are discovered only after commercial shipment.  Because our products will be designed to be used to perform complex surgical procedures, we expect that our customers will have an increased sensitivity to such defects.  We cannot assure that, once developed and marketed, our products will not experience component aging, errors or performance problems.  If we experience flaws or performance problems, any of the following could occur:

 

delays in product shipments;

 

loss of revenue;

 

delay in market acceptance;

 

diversion of our resources;

 

damage to our reputation;

 

product recalls;

 

regulatory actions;

 

increased service or warranty costs; or

 

product liability claims.

 

The use of our products could result in product liability and negligence claims that could be expensive, divert management's attention and harm our business.

 

Our business will expose us to significant risks of product liability claims.  The medical device industry has historically been litigious, and we will face financial exposure to product liability claims if the use of our products were to cause injury or death.  There is also the possibility that defects in the design or manufacture of our products might necessitate a product recall. Any weaknesses in training and services associated with our products may also be subject to product liability lawsuits. Although we plan to obtain and maintain product liability insurance, the coverage limits of these policies may not be adequate to cover future claims. A product liability claim, regardless of its merit or eventual outcome, could result in significant legal defense costs. A product liability or negligence claim or any product recalls could also harm our reputation or result in a decline in revenues. Furthermore, if a patient is harmed by a surgical procedure in which our equipment is used, even in the absence of any alleged system malfunction or defect, we can be exposed to negligence claims based on alleged inadequacies in our training of physicians or our training of our personnel. A negligence claim, regardless of its merit or eventual outcome, could result in significant legal defense costs.  Legal actions also divert management's attention from our business, resulting in a material adverse effect on our operations and financial results.

 

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We do not have manufacturing experience or capabilities and we may encounter manufacturing problems or delays that could result in lost revenue.

 

We expect that manufacturing our planned medical robotic systems will be a complex process.  As a result, we may encounter difficulties in scaling up production of our products, including:

 

problems involving production yields;

 

quality control and assurance;

 

component supply shortages;

 

import or export restrictions on components, materials or technology;

 

shortages of qualified personnel; and

 

compliance with state, federal and foreign regulations.

 

If demand for our products exceeds our manufacturing capacity, we could develop a substantial backlog of customer orders.  If we are unable to maintain larger-scale manufacturing capabilities, our ability to generate revenues will be limited and our reputation in the marketplace could be damaged.

  

We do not have sales and marketing experience or capabilities, which could impair our ability to achieve profitability.

 

We do not have experience as a company in the sales and marketing of our planned products. As such, we may not be successful in marketing and selling those products that we develop and receive approval for in the U.S. or abroad. We intend to establish a sales and marketing organization supported by clinical and technical representatives who will provide training, clinical and technical support and other services to our customers before and during the surgery but may not be able to successfully create and sustain such an organization, which could delay the successful adoption of our products. Additionally, any sales and marketing organization that we develop may be competing against the experienced and well-funded sales and marketing organizations of some of our competitors. We will face significant challenges and risks in developing our sales and marketing organization, including, among others:

 

  our ability to recruit, train and retain adequate numbers of qualified sales and marketing personnel;

 

  the ability of sales personnel to obtain access to leading surgeons and persuade adequate numbers of hospitals to purchase our products;

 

  costs associated with hiring, maintaining and expanding a sales and marketing organization; and

 

  government scrutiny with respect to promotional activities in the healthcare industry.

 

If we are unable to develop and maintain these sales and marketing capabilities, we may be unable to generate revenue and may not become profitable.

 

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If we are unable to protect the intellectual property to be contained in our products from use by third parties, our ability to compete in the market will be harmed.

 

Our commercial success will depend in part on patents we hope to receive and in obtaining additional patent and other intellectual property protection for the technologies to be contained in our products, and on successfully defending our patents and other intellectual property against third party challenges.

 

We may incur substantial costs in obtaining patents and, if necessary, defending our proprietary rights. The patent positions of medical device companies, including ours, can be highly uncertain and involve complex and evolving legal and factual questions. We cannot assure you that we will obtain the patent protection we seek or that the protection we receive will be found valid and enforceable if challenged. We also cannot assure you that we will be able to develop additional patentable proprietary technologies. If we fail to obtain adequate protection of our intellectual property, or if any protection we obtain is reduced or eliminated, others could use our intellectual property without compensating us, resulting in harm to our business. We may also determine that it is in our best interests to voluntarily challenge a third party's products or patents in litigation or administrative proceedings, including patent interferences or reexaminations. In addition, the laws of certain foreign countries do not protect intellectual property rights to the same extent as do the laws of the United States.

 

In addition to patents, we may rely on a combination of trade secret, copyright and trademark laws, nondisclosure agreements and other contractual provisions and technical security measures to protect our intellectual property rights. Nevertheless, these measures may not be adequate to safeguard the technology underlying our products. If these measures do not protect our rights adequately, third parties could use our technology, and our ability to compete in the market would be reduced. In addition, employees, consultants and others who participate in developing our products may breach their agreements with us regarding our intellectual property, and we may not have adequate remedies for the breach. We also may not be able to effectively protect our intellectual property rights in some foreign countries. For a variety of reasons, we may decide not to file for patent, copyright or trademark protection outside the United States. We also realize that our trade secrets may become known through other means not currently foreseen by us. Notwithstanding our efforts to protect our intellectual property, our competitors may independently develop similar or alternative technologies or products that are equal or superior to our technology and products without infringing any of our intellectual property rights, or may design around our proprietary technologies, which would harm our ability to compete in the market.

 

Others may assert that our products infringe on their intellectual property rights, which may cause us to engage in costly disputes and, if we are not successful in defending ourselves, could also require us to pay substantial damages, prohibiting us from selling our products.

 

We are aware of both United States and foreign patents issued to third parties that relate to computer-assisted surgery and minimally invasive surgery. We do not know whether any of these patents, if challenged, would be held valid, enforceable and infringed. The medical device industry has been characterized by extensive litigation and administrative proceedings regarding patents and other intellectual property rights, and companies have employed such actions to gain a competitive advantage. If third parties in any patent action are successful, our potential patent portfolio may be damaged, we may have to pay substantial damages, including treble damages, and we may be required to stop selling our products or obtain a license which, if available at all, may require us to pay substantial royalties. We cannot be certain that we will have the financial resources or the substantive arguments to defend our patents from infringement or claims of invalidity or unenforceability, or to defend against allegations of infringement of third-party patents. In addition, any public announcements related to litigation or administrative proceedings initiated by us, or initiated or threatened against us, could cause our stock price to decline.

 

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The rights and measures we rely on to protect the intellectual property underlying our products may not be adequate to prevent third parties from using our technology, which could harm our ability to compete in the market.

 

In addition to patents, we plan to rely on a combination of trade secret, copyright and trademark laws, nondisclosure agreements and other contractual provisions and technical security measures to protect our intellectual property rights. Nevertheless, these measures may not be adequate to safeguard the technology underlying our products. If they do not protect our rights adequately, third parties could use our technology, and our ability to compete in the market would be reduced. In addition, employees, consultants and others who participate in developing our products may breach their agreements with us regarding our intellectual property, and we may not have adequate remedies for the breach. We also may not be able to effectively protect our intellectual property rights in some foreign countries. For a variety of reasons, we may decide not to file for patent, copyright or trademark protection outside the United States. We also realize that our trade secrets may become known through other means not currently foreseen by us. Notwithstanding our efforts to protect our intellectual property, our competitors may independently develop similar or alternative technologies or products that are equal or superior to our technology and products without infringing any of our intellectual property rights, or may design around our proprietary technologies.

 

We do not yet know what the consequences may be on our business of proposed significant changes in existing health care legislation.

 

President Trump, who took office on January 20, 2017, has pledged to repeal and replace the Patient Protection and Affordable Care Act (" ACA "), which had been implemented by his predecessor, President Obama, in March 2010, in an effort to expand health insurance coverage to uninsured Americans. While there are several replacement plans proposed by members of Congress, as of the date of this prospectus, President Trump has not disclosed the details of his proposed replacement plan and there does not appear to be a consensus around any of the replacement plans proposed by members of Congress. The timing and implementation of a repeal of the ACA and its substitution with a replacement plan is similarly uncertain. Accordingly, the consequences of this proposed legislative revamping are unknown and speculative at this point and no assurance can be given that they will not have a material adverse effect on our planned business operations.

 

Our operations and our products will be subject to extensive domestic government regulation.  If we fail to meet these compliance standards, our ability to market our products would be limited and our business and results of operations would be materially adversely affected.

 

Our products and operations will be subject to extensive and rigorous regulation in the United States by the United States Food and Drug Administration (the “ FDA ”) and by similar agencies in other countries or regions in which we may market our products. In addition, our products, when developed, must meet the requirements of a large and growing body of international standards which govern the design, manufacture, materials content and sourcing, testing, certification, packaging, installation, use and disposal of our products. We will be required to continually keep abreast of these standards and requirements and integrate compliance to these with the development and regulatory documentation for our products. Examples of groups of such standards are electrical safety standards such as those of the International Electrotechnical Commission (e.g. IEC 60601-ss series of standards), composition standards such as the Reduction of Hazardous Substances (RoHS) and Waste Electrical and Electronic Equipment (WEEE) Directives. Failure to comply with FDA or comparable foreign regulations or to meet these standards could materially adversely affect our business and results of operations.

   

If we or our third-party manufacturers or suppliers fail to comply with Federal, state or European manufacturing standards, our manufacturing operations could be interrupted and our product sales and operating results could suffer.

 

We and some of our third-party manufacturers and suppliers are required to comply with the FDA’s Good Manufacturing Practice requirements (“ cGMP ”) and requirements contained in the FDA’s Quality System Regulation (“ QSR ”), which covers the methods and documentation of the design, testing, production, control, quality assurance, labeling, packaging, sterilization, storage and shipping of our products. We and our manufacturers and suppliers are also subject to compliance with International Organization for Standardization (“ ISO ”) quality system standards in order to produce products for sale in Europe, as well as the regulations of other foreign jurisdictions regarding the manufacturing process if we market our products elsewhere overseas. The FDA and the ISO enforce compliance with their respective systems through periodic and unannounced inspections of manufacturing facilities. To date, our facilities have not been subject to any inspections by regulatory authorities, but we anticipate that we and certain of our third-party manufacturers and suppliers will be subject to such inspections in the future. If our facilities or those of our manufacturers or suppliers fail to take satisfactory corrective action in response to an adverse inspection, the FDA, ISO, or other foreign governing agency could take enforcement action, including any of the following sanctions:

 

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  untitled letters, warning letters, fines, injunctions, consent decrees and civil penalties;

 

  customer notifications or repair, replacement, refunds, recall, detention or seizure of our products;

 

  operating restrictions or partial suspension or total shutdown of production;

 

  refusing or delaying requests for 510(k) clearance or PMA approvals of new products or modified products;

 

  withdrawing 510(k) clearances or PMA approvals that have already been granted;

 

  refusal to grant export approval for our products; or

 

  criminal prosecution.

 

Compliance with complex foreign and U.S. laws and regulations that apply to our international operations increases our cost of doing business in international jurisdictions and could expose us or our employees to fines and penalties in the United States and/or abroad. These numerous and sometimes conflicting laws and regulations include U.S. laws such as the Foreign Corrupt Practices Act, and similar laws in foreign countries, such as the U.K. Bribery Act of 2010, which became effective on July 1, 2011. Violations of these laws and regulations could result in fines, criminal sanctions against us, our officers or our employees, prohibitions on the conduct of our business and damage to our reputation. Although we will implement policies and procedures designed to ensure compliance with these laws, there can be no assurance that our employees, contractors or agents will not violate our policies.

 

Complying with FDA regulations is a complex process, and our failure to obtain any necessary approvals could subject us to significant delay and could have an adverse effect on the Company    

 

Our products and operations will be subject to extensive and rigorous regulation in the United States by the United States Food and Drug Administration (the “ FDA ”) and by similar agencies in other countries or regions in which we may market our products. Unless an exemption applies, each medical device that we intend to market in the U.S. must first receive either " 510(k) clearance " or " Premarket (PMA) approval " from the FDA pursuant to the Federal Food, Drug, and Cosmetic Act. The FDA's 510(k) clearance process usually takes from four to 12 months, but it can last longer. The process of obtaining PMA approval is much more costly, lengthy and uncertain. It generally takes from one to three years or even longer. We cannot be sure that 510(k) clearance or PMA approval will be obtained in the future for any product we propose to market.

   

Complying with FDA regulations is a complex process, and our failure to comply fully could subject us to significant enforcement actions.

 

Because our products will be commercially distributed, numerous post-market regulatory requirements apply, including the following:

 

continued compliance with the QSR, which requires manufacturers to follow elaborate design, testing, control, documentation and other quality assurance procedures during the manufacturing process;

 

labeling regulations;

 

the FDA’s general prohibition against false or misleading statements in the labeling or promotion of products for unapproved or “off-label” uses;

 

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the Medical Device Reporting regulation, which requires that manufacturers report to the FDA if their device may have caused or contributed to a death or serious injury or malfunctioned in a way that would likely cause or contribute to a death or serious injury if it were to recur;

  

adequate use of the Corrective and Preventive Actions process to identify and correct or prevent significant systemic failures of products or processes or in trends which suggest same; and

 

the reporting of Corrections and Removals, which requires that manufacturers report to the FDA recalls and field corrective actions taken to reduce a risk to health or to remedy a violation of the FFDCA that may pose a risk to health.

 

We are subject to inspection and marketing surveillance by the FDA to determine our compliance with regulatory requirements.  If the FDA finds that we have failed to comply, it can institute a wide variety of enforcement actions, ranging from a regulatory letter to a public Warning Letter to more severe civil and criminal sanctions including the seizure of our products and equipment or ban on the import or export of our products.  Our failure to comply with applicable requirements could lead to an enforcement action that may have an adverse effect on our financial condition and results of operations.

 

To be able to market and sell our products in other countries, we must obtain regulatory approvals and comply with the regulations of those countries. These regulations, including the requirements for approvals, and the time required for regulatory review vary from country to country. Obtaining and maintaining foreign regulatory approvals is expensive, and we cannot be certain that we will receive regulatory approvals in any foreign country in which we plan to market our products. If we fail to obtain regulatory approval in any foreign country in which we plan to market our products, our ability to generate revenue will be harmed.

 

If we lose our key personnel or are unable to attract and retain additional personnel, our ability to compete will be harmed.

 

We are highly dependent on the principal members of our management and scientific staff. Our product development plans depend, in part, on our ability to attract and retain engineers with experience in mechanics, electronics and associated skills. Attracting and retaining qualified personnel will be critical to our success, and competition for qualified personnel is intense. We may not be able to attract and retain personnel on acceptable terms given the competition for such personnel among technology and healthcare companies and universities. The loss of any of these persons or our inability to attract and retain qualified personnel could harm our business and our ability to compete.

 

We currently rely on our CEO and the loss of his services could have an adverse effect on the Company.

 

Until we further build up our management infrastructure, our success depends in large part upon our CEO.  The loss of his services would currently have a material adverse effect on AVRA. We are party to an employment agreement with our CEO but do not anticipate having key man insurance in place on him in the foreseeable future.

   

We intend to become subject to the periodic reporting requirements of the Securities Exchange Act of 1934 that will require us to incur audit fees and legal fees in connection with the preparation of such reports.  These additional costs could reduce or eliminate our ability to earn a profit.

 

Following the effective date of our registration statement of which this prospectus is a part, we will be required to file periodic reports with the SEC pursuant to the Securities Exchange Act of 1934 (the “ Exchange Act ”) and the rules and regulations promulgated thereunder.  In order to comply with these requirements, our independent registered public accounting firm will have to review our financial statements on a quarterly basis and audit our financial statements on an annual basis.  Moreover, our legal counsel will have to review and assist in the preparation of such reports.  The costs charged by these professionals for such services cannot be accurately predicted at this time because factors such as the number and type of transactions that we engage in and the complexity of our reports cannot be determined at this time and will have a major effect on the amount of time to be spent by our auditors and attorneys.  However, the incurrence of such costs will obviously be an expense to our operations and thus have a negative effect on our ability to meet our overhead requirements and earn a profit.  If we cannot provide reliable financial reports or prevent fraud, our business and operating results could be harmed, investors could lose confidence in our reported financial information, and the trading price of our common stock, if a market ever develops, could drop significantly.

 

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Our internal controls may be inadequate, which could cause our financial reporting to be unreliable and lead to misinformation being disseminated to the public.

 

Our management is responsible for establishing and maintaining adequate internal control over financial reporting.  As defined in Rule 13a-15(f) under the Exchange Act, internal control over financial reporting is a process designed by, or under the supervision of, the principal executive and principal financial officer and effected by the board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and includes those policies and procedures that:

 

  · pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the Company;

 

  · provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and/or directors of the Company; and

  

  · provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements.

 

We will be required to include a report of management on the effectiveness of our internal control over financial reporting.  We expect to incur additional expenses and diversion of management’s time as a result of performing the system and process evaluation, testing and remediation required in order to comply with the management certification requirements.

 

We do not have a sufficient number of employees to segregate responsibilities and may be unable to afford increasing our staff or engaging outside consultants or professionals to overcome our lack of employees.  During the course of our testing, we may identify other deficiencies that we may not be able to timely remediate.  Moreover, effective internal controls, particularly those related to revenue recognition, are necessary for us to produce reliable financial reports and are important to help prevent financial fraud.  If we cannot provide reliable financial reports or prevent fraud, our business and operating results could be harmed, investors could lose confidence in our reported financial information, and the trading price of our common stock, if a market ever develops, could drop significantly.

  

The Jobs Act has reduced the information that the Company is required to disclose.

 

Under the Jobs Act, the information that the Company will be required to disclose has been reduced in a number of ways.

  

As a company that had gross revenues of less than $1 billion during the Company’s last fiscal year, the Company is an “ emerging growth company ,” as defined in the Jobs Act (an “ EGC ”). The Company will retain that status until the earliest of (a) the last day of the fiscal year which the Company has total annual gross revenues of $1,000,000,000 (as indexed for inflation in the manner set forth in the Jobs Act) or more; (b) the last day of the fiscal year of following the fifth anniversary of the date of the first sale of the common stock pursuant to an effective registration statement under the Securities Act; (c) the date on which the Company has, during the previous three year period, issued more than $1,000,000,000 in non-convertible debt; or (d) the date on which the Company is deemed to be a “ large accelerated filer ,” as defined in Rule 12b-2 under the Exchange Act or any successor thereto. As an EGC, the Company is relieved from the following:  

 

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  The Company is excluded from Section 404(b) of Sarbanes-Oxley Act (“ Sarbanes-Oxley ”), which otherwise would have required the Company’s auditors to attest to and report on the Company’s internal control over financial reporting. The JOBS Act also amended Section 103(a)(3) of Sarbanes-Oxley to provide that (i) any new rules that may be adopted by the PCAOB requiring mandatory audit firm rotation or changes to the auditor’s report to include auditor discussion and analysis (each of which is currently under consideration by the PCAOB) shall not apply to an audit of an EGC; and (ii) any other future rules adopted by the PCAOB will not apply to the Company’s audits unless the SEC determines otherwise.

 

  The Jobs Act amended Section 7(a) of the Securities Act to provide that the Company need not present more than two years of audited financial statements in an initial public offering registration statement and in any other registration statement, need not present selected financial data pursuant to Item 301 of Regulation S-K for any period prior to the earliest audited period presented in connection with such initial public offering. In addition, the Company is not required to comply with any new or revised financial accounting standard until such date as a private company (i.e., a company that is not an “ issuer ” as defined by Section 2(a) of Sarbanes-Oxley) is required to comply with such new or revised accounting standard. Corresponding changes have been made to the Exchange Act, which relates to periodic reporting requirements, which would be applicable if the Company were required to comply with them.

 

  As long as the Company is an EGC, the Company may comply with Item 402 of Regulation S-K, which requires extensive quantitative and qualitative disclosure regarding executive compensation, by disclosing the more limited information required of a “ smaller reporting company .”

 

  In the event that the Company registers the common stock under the Exchange Act as it intends to do, the Jobs Act will also exempt the Company from the following additional compensation-related disclosure provisions that were imposed on U.S. public companies pursuant to the Dodd-Frank Act: (i) the advisory vote on executive compensation required by Section 14A(a) of the Exchange Act; (ii) the requirements of Section 14A(b) of the Exchange Act relating to shareholder advisory votes on “golden parachute” compensation; (iii) the requirements of Section 14(i) of the Exchange Act as to disclosure relating to the relationship between executive compensation and our financial performance; and (iv) the requirement of Section 953(b)(1)of the Dodd-Frank Act, which requires disclosure as to the relationship between the compensation of the Company’s chief executive officer and median employee pay.

 

The costs of being a public company could result in us being unable to continue as a going concern.

 

As a public company, we will have to comply with numerous financial reporting and legal requirements, including those pertaining to audits and internal control.  The costs of this compliance could be significant.  If our revenues do not increase and/or we cannot satisfy many of these costs through the issuance of our shares, we may be unable to satisfy these costs in the normal course of business which would result in our being unable to continue as a going concern.

 

Our status as an “emerging growth company” under the JOBS Act of 2012 may make it more difficult to raise capital as and when we need it.

 

Because of the exemptions from various reporting requirements provided to us as an “ emerging growth company ” and because we will have an extended transition period for complying with new or revised financial accounting standards, we may be less attractive to investors and it may be difficult for us to raise additional capital as and when we need it.  Investors may be unable to compare our business with other companies in our industry if they believe that our financial accounting is not as transparent as other companies in our industry.  If we are unable to raise additional capital as and when we need it, our financial condition and results of operations may be materially and adversely affected.

 

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Our Articles of Incorporation, By Laws, employment agreements with our officers and appointment agreements with our directors, provide for indemnification of officers and directors at our expense and limit their liability that may result in a major cost to us and hurt the interests of our shareholders because corporate resources may be expended for the benefit of officers and/or directors.

 

Our Articles of Incorporation, Bylaws, employment agreements with our officers and appointment agreements with our directors, provide for the indemnification of our officers and directors.  We have been advised that, in the opinion of the SEC, indemnification for liabilities arising under federal securities laws is against public policy as expressed in the Securities Act of 1933 (the “ Securities Act ”) and is, therefore, unenforceable.

 

The offering price of the shares has been arbitrarily determined by the Company.

 

The offering price of the shares has been arbitrarily determined by the Company and bears no relationship to the Company’s assets, book value, potential earnings or any other recognized criterion of value.

  

Currently, there is no public market for our securities, and we cannot assure you that any public market will ever develop and it is likely to be subject to significant price fluctuations.

 

Currently, there is no public market for our common stock and our common stock may never be traded on any exchange, or, if traded, a public market may not materialize.  Even if we are successful in developing a public market, there may not be enough liquidity in such market to enable shareholders to sell their stock.

 

Our common stock is unlikely to be followed by any market analysts, and there may be few or no institutions acting as market makers for the common stock.  Either of these factors could adversely affect the liquidity and trading price of our common stock.  Until our common stock is fully distributed and an orderly market develops in our common stock, if ever, the price at which it trades is likely to fluctuate significantly.  Prices for our common stock will be determined in the marketplace and may be influenced by many factors, including the depth and liquidity of the market for shares of our common stock, developments affecting our business, including the impact of the factors referred to elsewhere in these Risk Factors, investor perception of the Company, and general economic and market conditions.  No assurances can be given that an orderly or liquid market will ever develop for the shares of our common stock.  

 

If a trading market should develop for our common stock, it is likely that it will initially be deemed to be a “penny stock.” Therefore, trading of our common stock may be restricted by the SEC’s penny stock regulations and FINRA’s sales practice requirements, which may limit a shareholder’s ability to buy and sell our common stock.

 

In addition to the “ penny stock ” rules promulgated by the SEC, the Financial Industry Regulatory Authority (“ FINRA ”) has adopted rules that require that in recommending an investment to a customer, a broker-dealer must have reasonable grounds for believing that the investment is suitable for that customer.  Prior to recommending speculative low priced securities to their non-institutional customers, broker-dealers must make reasonable efforts to obtain information about the customer’s financial status, tax status, investment objectives and other information.  Under interpretations of these rules, the FINRA believes that there is a high probability that speculative low-priced securities will not be suitable for at least some customers.  FINRA’s requirements make it more difficult for broker-dealers to recommend that their customers buy our common stock, which may limit your ability to buy and sell our stock.

 

The market for penny stocks has experienced numerous frauds and abuses that could adversely impact investors in our stock.

 

Company management believes that the market for penny stocks has suffered from patterns of fraud and abuse.  Such patterns include:

 

· Control of the market for the security by one or a few broker-dealers that are often related to a promoter or issuer;

 

· Manipulation of prices through prearranged matching of purchases and sales and false and misleading press releases;

 

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· “Boiler room” practices involving high pressure sales tactics and unrealistic price projections by sales persons;

 

· Excessive and undisclosed bid-ask differentials and markups by selling broker-dealers; and

 

· Wholesale dumping of the same securities by promoters and broker-dealers after prices have been manipulated to a desired level, along with the inevitable collapse of those prices with consequent investor losses.

 

Any trading market that may develop for our common stock may be restricted by virtue of state securities “Blue Sky” laws that prohibit trading absent compliance with individual state laws.  These restrictions may make it difficult or impossible to sell shares in those states.

 

There is currently no established public market for our common stock, and there can be no assurance that any established public market will develop in the foreseeable future.  Transfer of our common stock may also be restricted under the securities laws and regulations promulgated by various states and foreign jurisdictions, commonly referred to as “ blue sky ” laws.  Absent compliance with such individual state laws, our common stock may not be traded in such jurisdictions.  Because the securities being registered hereunder have not been registered for resale under the blue sky laws of any state, the holders of such shares, and persons who desire to purchase them in any trading market that might develop in the future, should be aware that there may be significant state blue sky law restrictions upon the ability of investors to sell the securities and of purchasers to purchase the securities.  These restrictions prohibit the secondary trading of our common stock.  We currently do not intend to and may not be able to qualify securities for resale in a number of states that do not offer manual exemptions and require shares to be qualified before they can be resold by our shareholders.  Accordingly, investors should consider the secondary market for our securities to be a limited one.  

 

Our board of directors has the authority, without shareholder approval, to issue preferred stock with terms that may not be beneficial to common shareholders and with the ability to affect adversely shareholder voting power and perpetuate their control over us.

 

Our Amended and Restated Articles of Incorporation allows us to issue shares of preferred stock without any vote or further action by our shareholders.  Our board of directors has the authority to fix and determine the relative rights and preferences of preferred stock.  As a result, our board of directors could authorize the issuance of a series of preferred stock that would grant to holders the preferred right to our assets upon liquidation, the right to receive dividend payments before dividends are distributed to the holders of common stock and the right to the redemption of the shares, together with a premium, prior to the redemption of our common stock.

 

The ability of our executive officers and directors, who are our principal shareholders, to control our business may limit or eliminate minority shareholders’ ability to influence corporate affairs.

 

Our executive officers and directors, who are our principal shareholders, own and, assuming the sale of the shares registered by them hereunder as selling shareholders, will continue to own a majority of our issued and outstanding common stock. Accordingly, they will be able to effectively control the election of directors, as well as all other matters requiring shareholder approval.  The interests of our principal shareholders may differ from the interests of other shareholders with respect to the issuance of shares, business transactions with or sales to other companies, selection of other directors and other business decisions.  The minority shareholders have no way of overriding decisions made by our principal shareholders.  This level of control may also have an adverse impact on the market value of our shares because our principal shareholders may institute or undertake transactions, policies or programs that result in losses and may not take any steps to increase our visibility in the financial community and / or may sell sufficient numbers of shares to significantly decrease our price per share.

 

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We do not expect to pay cash dividends in the foreseeable future.

 

We have never paid cash dividends on our common stock.  We do not expect to pay cash dividends on our common stock at any time in the foreseeable future.  The future payment of dividends directly depends upon our future earnings, capital requirements, financial requirements and other factors that our board of directors will consider.  Since we do not anticipate paying cash dividends on our common stock, return on your investment, if any, will depend solely on an increase, if any, in the market value of our common stock.

 

Because we are not subject to compliance with rules requiring the adoption of certain corporate governance measures, our shareholders have limited protection against interested director transactions, conflicts of interest and similar matters.

 

Sarbanes-Oxley, as well as rule changes proposed and enacted by the SEC, the New York Stock Exchange/NYSE/AMEX and the Nasdaq Stock Market, as a result of Sarbanes-Oxley, require the implementation of various measures relating to corporate governance.  These measures are designed to enhance the integrity of corporate management and the securities markets and apply to securities that are listed on those exchanges or the Nasdaq Stock Market.  Because we are not presently required to comply with many of the corporate governance provisions and because we chose to avoid incurring the substantial additional costs associated with voluntary compliance, we have not yet adopted these measures.

 

We do not currently have independent audit or compensation committees.  As a result, directors have the ability, among other things, to determine their own level of compensation.  Until we comply with such corporate governance measures, regardless of whether such compliance is required, the absence of such standards of corporate governance may leave our shareholders without protections against interested director transactions, conflicts of interest, if any, and similar matters and investors may be reluctant to provide us with funds necessary to expand our operations as a result thereof.

 

We intend to comply with all corporate governance measures relating to director independence as and when required.  However, we may find it very difficult or be unable to attract and retain qualified officers, directors and members of board committees required to provide for our effective management as a result of Sarbanes-Oxley and enactment of Sarbanes-Oxley has resulted in a series of rules and regulations by the SEC that increase responsibilities and liabilities of directors and executive officers.  The perceived increased personal risk associated with these recent changes may make it more costly or deter qualified individuals from accepting these roles.

 

USE OF PROCEEDS

 

We will not receive any proceeds from the sale of the common stock offered through this prospectus by the selling shareholders.  We have agreed to bear the expenses (other than any underwriting discounts or commissions or broker’s commissions) in connection with the registration of the common stock being offered hereby by the selling shareholders.  

 

DETERMINATION OF OFFERING PRICE

 

All shares being offered will be sold by selling shareholders without our involvement, consequently the actual price of the stock will be determined by prevailing market prices at the time of sale or by private transactions negotiated by the selling shareholders.  The offering price will thus be determined by market factors and the independent decisions of the selling shareholders.

 

DILUTION

 

The common stock to be sold by the selling shareholders is common stock that is currently issued and outstanding.  Accordingly, there will be no dilution to our existing shareholders as a result of this offering.

 

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SELLING SHAREHOLDERS

 

This prospectus covers the resale from time to time by the selling shareholders identified in the table below of up to 8,612,400 shares of our common stock, which were issued in various transactions exempt from registration under the Securities Act.  We are registering the shares to permit the selling shareholders and any of their pledgees, donees, transferees, assignees and successors-in-interest to, from time to time, sell any or all of their shares of common stock on any stock exchange, market or trading facility on which the shares are traded or in private transactions when and as they deem appropriate in the manner described in “ Plan of Distribution .” As of the date of this prospectus there are 19,135,000 shares of our common stock issued and outstanding.

 

The following table sets forth, as of the date of this prospectus, the name of each selling shareholder, the number and percentage of shares of our common stock beneficially owned by each selling shareholder prior to the offering for resale of the shares under this prospectus, the number of shares of our common stock beneficially owned by each selling shareholder that may be offered from time to time under this prospectus, and the number and percentage of shares of our common stock beneficially owned by the selling shareholder after the offering of the shares (assuming all of the offered shares are sold by the selling shareholder.

 

There are no agreements between the Company and any selling shareholder pursuant to which the shares subject to this registration statement were issued.  Other than Barry F. Cohen, our Chief Executive Officer and a director, A. Christian Schauer, our Chief Financial Officer, Alexandre S. Clug, our Vice President of Global Business Development, and Peter Carnegie, a director, none of the selling shareholders has ever been an officer or director of the Company and other than rendering services in the ordinary course of business, has had a material relationship with us at any time within the past three years.

 

Beneficial ownership is determined in accordance with the rules of the SEC, and includes any shares of common stock as to which a person has sole or shared voting power or investment power and any shares of common stock which the person has the right to acquire within sixty (60) days through the exercise of any option, warrant or right, through conversion of any security or pursuant to the automatic termination of a power of attorney or revocation of a trust, discretionary account or similar arrangement.

 

  20  

 

 

Name of Selling Shareholder   Total Shares
Owned by
Selling
Shareholders
    Total Shares to
be Registered
Pursuant to this
Offering
    Percentage of
Common Stock
Before Offering
    Number of Shares
Owned by Selling
Shareholder After
Offering
 
                         
Barry F. Cohen (1)     13,100,400       5,240,160       68.9 %     7,860,240  
Robert R. Beuret (2)     600,000       300,000       3.2 %     300,000  
Seymour and Libby Fleisher (3)     600,000       300,000       3.2 %     300,000  
Sudhir Prem Srivastava     300,000       150,000       1.6 %     150,000  
A. Christian Schauer     260,000       104,000       1.4 %     156,000  
Alexandre S. Clug (4)     250,000       150,000       1.3 %     100,000  
Thomas G. Grace     235,000       141,000       1.2 %     94,000  
David Nolan (5)     210,000       126,000       1.1 %     84,000  
Jakob  Hirschbaek and Tim Brockmann (6)     200,000       120,000       1.1 %     80,000  
Andrew M. Economos     200,000       120,000       1.1 %     80,000  
Peter Carnegie     200,000       80,000       1.1 %     120,000  
Vipul Patel (7)     200,000       120,000       1.1 %     80,000  
Jack Pechter     165,000       99,000       *       66,000  
Alen Sands York     150,000       90,000       *       60,000  
Edward Andrew Kerbs     130,000       78,000       *       52,000  
Pauline G. Runkle     100,000       60,000       *       40,000  
Anthony J. Nicholson (8)     90,000       36,000       *       54,000  
Alexander C. Spektor     75,000       45,000       *       30,000  
Ruth Pollak     75,000       45,000       *       30,000  
Steven T. Calzone     75,000       45,000       *       30,000  
Susan Friedlander Calzone     75,000       45,000       *       30,000  
Paul M. Ross     70,000       42,000       *       28,000  
Robert Chanson     64,000       38,400       *       25,600  
Daniel J. Gardella     60,000       36,000       *       24,000  
David P. Hanlon (9)     58,000       34,800       *       23,200  
Eduardo Parra-Davila (10)     50,000       30,000       *       20,000  
Josephine Kling Trippe     50,000       30,000       *       20,000  
Paula E. Grimm     50,000       30,000       *       20,000  
William R. Beuret     50,000       30,000       *       20,000  
Bonny Beuret     50,000       30,000       *       20,000  
Mary A. Perez     45,000       27,000       *       18,000  
Frederic H. Moll (11)     41,000       24,600       *       16,400  
Sandra R. Johnson     37,500       22,500       *       15,000  
Conner S. Calzone     36,000       21,600       *       14,400  
Hannah B. Calzone     36,000       21,600       *       14,400  
Christine A. Bayliss     32,000       19,200       *       12,800  
Niranjan Bhambai (12)     31,000       18,600       *       12,400  
Anthony J. Nicholson     30,000       18,000       *       12,000  
Arathi Gadasalli (13)     30,000       18,000       *       12,000  
Jacqueline Weisblum     30,000       18,000       *       12,000  
Yuman Fong     30,000       18,000       *       12,000  
Kerry Firstenberg     27,700       16,620       *       11,080  
Susan M. Ferris     26,000       15,600       *       10,400  
Marcia Schotz     25,000       15,000       *       10,000  
Stephanie Zacharisiewicz     25,000       15,000       *       10,000  
Keith Kim     25,000       15,000       *       10,000  
Nicole Bergman-Fong     25,000       15,000       *       10,000  
Jay E. Lasner (14)     21,000       12,600       *       8,400  
Farhan Taghizadeh     20,000       12,000       *       8,000  
Juan Jose Badimon     20,000       12,000       *       8,000  

 

  21  

 

 

Michael J. Plotkowski     20,000       12,000       *         8,000  
Nalin H. Tolia     20,000       12,000       *         8,000  
Ray Powers     20,000       8,000       *         12,000  
Robert R. Santangelo     20,000       12,000       *         8,000  
Robin Waite     20,000       12,000       *         8,000  
Nick Shroff (15)     20,000       12,000       *         8,000  
Margaret A. Gilliam     18,000       12,000       *         6,000  
Eric Goldman     15,000       12,000       *         3,000  
Hiep T. Nguyen     15,000       12,000       *         3,000  
Kathleene G. Chambers     15,000       12,000       *         3,000  
Lois Ross     15,000       12,000       *         3,000  
Phyllis J. Schauer     15,000       12,000       *         3,000  
Catherine L. Douglas     15,000       12,000       *         3,000  
Pamela Schlissel     15,000       12,000       *         3,000  
Myra Cohen     12,500       10,000       *         2,500  
Barbara Smith     12,000       9,600       *         2,400  
Barbro C. Ehnbom     12,000       9,600       *         2,400  
Bernard Thomas     12,000       9,600       *         2,400  
Leonard Sandacata (16)     11,000       8,800       *         2,200  
Arnold Ferolito     10,000       8,000       *         2,000  
Dale Bergman     10,000       8,000       *         2,000  
Gabriel Liscano     10,000       8,000       *         2,000  
Kevin S. Forkey     10,000       8,000       *         2,000  
Lance Coetzee     10,000       8,000       *         2,000  
Lisa Gardella Bloom     10,000       8,000       *         2,000  
Richard Roth     10,000       8,000       *         2,000  
Robert Scherban and Janelle B. Scherban     10,000       8,000       *         2,000  
Fanny Barret     10,000       8,000       *         2,000  
Jo Anna Beazley     10,000       8,000       *         2,000  
Marla S. Fleisher     10,000       8,000       *         2,000  
Jeffery Berkley     10,000       8,000       *         2,000  
Rufino Lopez     9,000       7,200       *         1,800  
Vineet Shah     9,000       7,200       *         1,800  
Michael E. Newman     8,000       6,400       *         1,600  
Henry Gewanter     7,500       6,000       *         1,500  
Ingrid Stadtaus     7,500       6,000       *         1,500  
Marcia Ann Meacham     7,500       6,000       *         1,500  
Mandy Dowd     7,000       5,600       *         1,400  
Michael L. Plotkowski     6,500       5,200       *         1,300  
Ettore Tomasetti     6,000       4,800       *         1,200  
George Fertitta     6,000       4,800       *         1,200  
Heywood Y. Epstein     6,000       4,800       *         1,200  
Jesse York     6,000       4,800       *         1,200  
John-Henry Falk     6,000       4,800       *         1,200  
Rafaela Echeverria     6,000       4,800       *         1,200  
Michael Foudy     5,000       4,000       *         1,000  
Jerry McRoberts     5,000       4,000       *         1,000  
Elizabeth Ann Brown     5,000       4,000       *         1,000  
James Dixon     5,000       4,000       *         1,000  
Paul Howard Hollander     5,000       4,000       *         1,000  
Vartan Mardirossian     5,000       4,000       *         1,000  
Doug Holland     5,000       4,000       *         1,000  
Frederick J. Yestadt     4,650       3,720       *         930  
JoAnne R. Mulhall     4,650       3,720       *         930  
Melvin Stier     4,500       3,600       *         900  
Cheryl A. Cofrin     4,000       3,200       *         800  
David Braden     3,700       2,960       *         740  
Brian McLaughlin     3,250       2,600       *         650  
David Franzen     3,000       2,400       *         600  
Felipe Gonzalez-Gordon     3,000       2,400       *         600  

 

  22  

 

 

Jonas Franzen     3,000       2,400       *         600  
Karen A. Grimley     2,500       2,000       *         500  
Lesley A. Healy-Curi     2,500       2,000       *         500  
Lisa Jean LaChance     2,500       2,000       *         500  
Morris Westman     2,500       2,000       *         500  
Roger S. Edling     2,500       2,000       *         500  
Stuart Howitt     2,500       2,000       *         500  
Timothy Dowd     2,250       1,800       *         450  
David R. Burch     2,100       1,680       *         420  
Peter Acker     1,800       1,440       *         360  
Catherine Cassat     1,000       800       *         200  
Charles Dowd     1,000       800       *         200  
James A. Stoller     1,000       800       *         200  
Michael C. Dowd     1,000       800       *         200  

_________________________

*Less than 1%.

(1) Includes 6,950,400 shares owned by Mr. Cohen directly and 6,150,000 shares held by Avra Acquisitions, LLC of which Mr. Cohen is managing member and over which shares Mr. Cohen exercises voting and dispositive control.
(2) Represents shares held by Robert Beuret Revocable Trust of which Mr. Beuret is Trustee and over which shares Mr. Beuret exercises voting and dispositively control.
(3) Represents shares held by The Fleisher Family Trust of which Mr. and Mrs. Fleisher are Trustees and over which shares Mr. and Mrs. Fleisher jointly exercise voting and dispositive control.
(4) Represents shares held by The Mustang Trust of which Mr. Clug is Trustee and over which shares Mr. Clug exercises voting and dispositive control.
(5) Represents shares held by Davos Partners, LP of which Mr. Nolan is managing member of the general partner and over which shares Mr. Nolan exercises voting and dispositive control.
(6) Represents shares held by W Capital Management Limited of which Messrs. Hirschbaek and Brockmann are directors and over which shares Messrs. Hirschbaek and Mr. Brockmann share voting and dispositive control.
(7) Represents shares held by Robotic Minds of which Mr. Patel is principal and over which shares Mr. Patel exercises voting and dispositive control.
(8) Represents shares held by Anthony J. Nicholson Trust of which Mr. Nicholson is Trustee and over which shares Mr. Nicholson exercises voting and dispositive control.
(9) Represents shares held by David P. Hanlon Living Trust of which Mr. Hanlon is Trustee and over which shares Mr. Hanlon exercises voting and dispositive control.
(10) Represents shares held by Pemon LLC of which Mr. Davila is managing member and over which shares Mr. Davila exercises voting and dispositive control.
(11) Represents shares held by Auris Surgical Robotics of which Mr. Moll is principal and over which shares Mr. Moll exercises voting and dispositive control.
(12) Represents shares held by OM Capital LLC of which Mr. Bhambai is managing member and over which shares Mr. Bhambai exercises voting and dispositive control.
(13) Represents shares held by Chikkodi LLC of which Mr. Gadasalli is managing member and over which shares Mr. Gadasalli exercises voting and dispositive control.
(14) Represents shares held by Fire Coral Holdings LLC of which Mr. Lasner is managing member and over which shares Mr. Lasner exercises voting and dispositive control.
(15) Represents shares held by Nick and Leena Shroff Trust of which Mr. Shroff is Trustee and over which shares Mr. Shroff exercises voting and dispositive control.
(16) Represents shares held by Leonard Sandacata Trust of which Mr. Sandacata is Trustee and over which shares Mr. Sandacata exercises voting and dispositive control.
(17) Represents shares held by Aures Systems Ltd. of which Mr. Foudy is principal and over which shares Mr. Foudy exercises voting and dispositive control.
(18) Represents shares held by Eldorado Capital LLC of which Mr. McRoberts is managing member and over which shares Mr. McRoberts exercises voting and dispositive control.                  

 

  23  

 

  

PLAN OF DISTRIBUTION

 

The selling shareholders and any of their pledgees, donees, transferees, assignees and successors-in-interest may, from time to time, sell any or all of their shares of common stock on any stock exchange, market or trading facility on which the shares are traded or in private transactions. As there is currently no trading market for our shares, the selling shareholders will offer their shares at $2.00 per share until the Company’s shares are quoted on the OTCQX or the OTCQB tiers of the over-the-counter market operated by the OTC Markets Group.  Assuming we secure this qualification, thereafter the shares may be sold at fixed or negotiated prices.  The selling shareholders may use any one or more of the following methods when selling shares:

 

  · ordinary brokerage transactions and transactions in which the broker-dealer solicits investors;

 

  · block trades in which the broker-dealer will attempt to sell the shares as agent but may position and resell a portion of the block as principal to facilitate the transaction;

 

· purchases by a broker-dealer as principal and resale by the broker-dealer for its account;
     
  · an exchange distribution in accordance with the rules of the applicable exchange;

 

  · privately negotiated transactions;

 

  · to cover short sales made after the date that this registration statement is declared effective by the SEC;

 

  · broker-dealers may agree with the selling shareholders to sell a specified number of such shares at a stipulated price per share;

 

  · through the distribution of common stock by any selling shareholder to its partners, members or shareholders;

 

  · any other method permitted pursuant to applicable law; and

 

  · a combination of any such methods of sale.

 

Broker-dealers engaged by the selling shareholders may arrange for broker-dealers to participate in sales.  Broker-dealers may receive commissions or discounts from the selling shareholders (or, if any broker-dealer acts as agent for the purchaser of shares, from the purchaser) in amounts to be negotiated.  The selling shareholders do not expect these commissions and discounts to exceed what is customary in the types of transactions involved.

 

The selling shareholders may from time to time pledge or grant a security interest in some or all of the shares of common stock owned by them and, if they default in the performance of their secured obligations, the pledgees or secured parties may offer and sell shares of common stock from time to time under this prospectus, or under an amendment to this prospectus under Rule 424(b)(3) or other applicable provision of the Securities Act amending the list of selling shareholders to include the pledgee, transferee or other successors in interest as selling shareholders under this prospectus.

 

Upon a selling shareholder’s notification to us that any material arrangement has been entered into with a broker-dealer for the sale of such shareholder’s common stock through a block trade, special offering, exchange distribution or secondary distribution or a purchase by a broker or dealer, a supplement to this prospectus will be filed, if required, pursuant to Rule 424(b) under the Securities Act disclosing (i) the name of each such selling shareholder and of the participating broker-dealer(s), (ii) the number of shares involved, (iii) the price at which such shares of common stock were sold, (iv) the commissions paid or discounts or concessions allowed to such broker-dealer(s), where applicable, (v) that such broker-dealer(s) did not conduct any investigation to verify the information set out or incorporated by reference in this prospectus, and (vi) other facts material to the transaction. In addition, upon our being notified in writing by a selling shareholder that a donee or pledgee intends to sell more than 500 shares of common stock, a supplement to this prospectus will be filed if then required in accordance with applicable securities law.

 

  24  

 

  

The selling shareholders also may transfer the shares of common stock in other circumstances, in which case the donees, assignees, transferees, pledgees or other successors in interest will be the selling beneficial owners for purposes of this prospectus and may sell the shares of common stock from time to time under this prospectus after we have filed any necessary supplements to this prospectus under Rule 424(b), or other applicable provisions of the Securities Act supplementing or amending the list of selling shareholders to include such donee, assignee, transferee, pledgee, or other successor-in-interest as a selling shareholder under this prospectus.

 

In the event that the selling shareholders are deemed to be “underwriters,” any broker-dealers or agents that are involved in selling the shares will be deemed to be “underwriters” within the meaning of the Securities Act, in connection with such sales.  In such event, any commissions received by such broker-dealers or agents and any profit on the resale of the shares purchased by them may be deemed to be underwriting commissions or discounts under the Securities Act.  Discounts, concessions, commissions and similar selling expenses, if any, that can be attributed to the sale of the shares of common stock will be paid by the selling shareholder and/or the purchasers.  Each selling shareholder has represented and warranted to us that it acquired the securities subject to this registration statement for his/her own account for investment and not for the benefit of any other person and not with a view to distribute or sell in violation of the Securities Act or any state securities laws or rules and regulations promulgated thereunder.

 

If a selling shareholder uses this prospectus for any sale of the common stock, it will be subject to the prospectus delivery requirements of the Securities Act.  The selling shareholders will be responsible to comply with the applicable provisions of the Securities Act and the Exchange Act and the rules and regulations thereunder promulgated, including, without limitation, Regulation M, as applicable to such selling shareholders in connection with resales of their respective shares under this registration statement.

 

 We are required to pay all fees and expenses incident to the registration of the shares, but we will not receive any proceeds from the sale of the common stock.

 

  25  

 

 

PROPOSED BUSINESS

 

Overview

 

AVRA was organized by a senior leadership team with broad and deep experience in medical research, innovation and development in the medical robotics field. The Company plans to exploit the growing demand for practical medical robotic devices by developing a platform-independent precision guidance system with an initial focus on skin resurfacing. The Company believes that its team brings the necessary resources, including intellectual property, to develop and commercialize intelligent medical robotic systems, as well as in marketing, chain management, and the implementation of all other aspects of business operations. The Company believes that progress in mechanical and software engineering has made possible lightweight and relatively inexpensive robotic devices for difficult procedures in various medical fields. AVRA and its management team have been active in the medical robotics space for many years, sponsoring, for example, www.allaboutroboticsurgery.com , an extensive reference data base for medical robotics news.

 

Medical robots are already being successfully employed in several areas of surgery, including Urology (Prostate), Colo-Rectal, Gynecology, Thoracic, General Surgery, Neuro and Spine Surgery. Robots are also being used for Tele-medicine and assistive robotic methods are addressing the delivery of healthcare in inaccessible locations, ranging from rural areas lacking specialist expertise to post-disaster and battlefield areas. With the aging population dominating demographics in the US across all spectrums of health care, robotic technologies are being developed toward promoting improved function, less morbidity and improved overall outcomes.

 

Today, the US is the leader in robot-assisted surgery for the possibility of cure and improved quality of life. However, other countries are fast followers, having already recognized both the need and the promise of such technologies. The development of surgical robotics is motivated by the desire to enhance the effectiveness of a procedure by coupling information to action in the operating room or interventional suite, and transcend human physical limitations in performing surgery and other interventional procedures, while still affording human control over the procedure. Two decades after the first reported robotic surgical procedure, surgical robots are now being widely used in the operating room. Surgical robots are beginning to realize their potential in terms of improved accuracy and visualization, as well as enabling new procedures.

 

Current robots used in surgery are under the direct control of a surgeon – the so-called “Master-slave system”, often in a teleoperation scenario in which a human operator manipulates a master input device and the patient-side robot follows the input. In contrast to commonly held beliefs where robots are autonomous, traditional minimally invasive surgical robots provide the surgeon with a higher degree of dexterity inside the body, eliminate operator tremor, scale down operator motions to a fraction of normal distances, and provide a very intuitive connection between the operator and the instrument tips. The surgeon can cut, cauterize, suture and reconstruct tissue with accuracy equal to or better than that of invasive open surgery. A surgical system contains both robotic devices and real-time imaging devices to visualize the operative field during the course of surgery.

 

The use of robotics in medicine inherently involves physical interaction between caregivers, patients, and robots – in all combinations. Developing user-friendly physical interfaces between humans and robots requires all the classic elements of a robotic system: sensing, perception, and action. A great variety of sensing and perception tasks are required, including recording the motions and forces of a surgeon to infer their intent, determining the mechanical parameters of human tissue, and estimating the forces between a rehabilitation robot and a moving stroke patient. The reciprocal nature of interaction means that the robot will also need to provide useful feedback to the human operator, whether that person is a caregiver or a patient. We need to consider systems that involve many human senses, the most common of which are vision, haptics (force and tactile), and sound. A major reason why systems involving physical collaboration between humans and robots are so difficult to design well is that, from the perspective of a robot, humans are extremely uncertain and dynamic.

 

  26  

 

 

Unlike in a passive, static environment, humans dynamically change their motion, force, and immediate purpose throughout a procedure. These changes can be caused by something as simple as physiologic movement (e.g., a patient breathing during surgery), or as complex as the motions of a surgeon suturing during surgery. During physical interaction with a robot, the human is an integral part of a closed-loop feedback system, simultaneously exchanging information and energy with the robotic system, and thus cannot simply be thought of as an external system input. In addition, the loop is often closed with both human force and visual feedback, each with its own errors and delays that can potentially cause challenges in a human-robot system. Given these problems, how does one guarantee safe, collaborative and useful physical interaction between robots and humans? To date, no existing systems provide the user with an ideal experience of physically interacting with a robot.

 

Device design and control are essential to the operation of all medical and health robots, since they interact physically with their environment. Accordingly, one of the most important technical challenges is in the area of mechanisms. Miniaturization is challenging in large part because current electromechanical actuators (the standard because of their desirable controllability and power to weight ratio) are relatively large. Biological analogs (e.g., human muscles) are far superior to engineered systems in terms of compactness, energy efficiency, low impedance, and high force output. Interestingly, these biological systems often combine "mechanisms" and "actuation" into an integrated, inseparable system. Goals for systems that achieve high dexterity at any scale will naturally differ greatly depending on the medical application (e.g. the surgery, rehabilitation, and prosthetics).

 

AVRA is focusing on truly innovative technology that is in line with current applications, but delivers an innovative approach. AVRA is integrating image-guidance with navigation and organ-targeting to bring a system that is truly diverse and multi-dimensional. Having identified limitations in the predominantly non-autonomous systems, AVRA proposes a disruptive model, which considers design and development through a seamless collaboration of the Surgeon, the Engineer and the Scientist.

 

For skin resurfacing, technological improvements in motors, materials and in high resolution imaging allow for the use of robotic devices to assist the surgeon to autonomously treat damaged skin. Presently, we are not aware of any commercially available robotic devices designed for this application.

 

AVRA is currently developing an intelligent medical robotic system for minimally invasive surgical facial corrections (i.e., skin resurfacing) in partnership with UCF, pursuant to the Research Agreement entered into with UCF effective as of May 1, 2016. UCF is recognized particularly for its work in the area of medical robotic research and design, focusing on the guidance systems. We anticipate that application of this expertise will allow AVRA’s medical robotic system to handle a wide array of the currently available “tools” in the market. The Company’s plans to target a large market for its initial robotic system, which currently includes such solutions as Botox and CO2 lasers used for keratosis removal and treatment of scarring, discoloration and other skin problems that are often difficult to treat.

 

Moreover, while AVRA is in development of its robotic system and anticipates that it is ready to build a prototype (as all elements of a robotic device have been designed), to date we have no products or training programs approved or ready for retail marketing and there can be no assurance as to when products will be ready to reach market. Unanticipated delays in market readiness will substantially harm the Company’s prospects.

 

To date, the Company has not generated revenues and has operated with limited capital. The Company will require significant capital to implement its business plan.  There can be no assurance that the Company can raise the necessary funds, on favorable terms or otherwise.  Failure to obtain sufficient capital will substantially harm the Company’s prospects.

 

Current Market

 

The concept of using a robot in surgical procedures became a practical reality in 2000 when the FDA approved the da Vinci® robot, introduced to the market by Intuitive Surgical, Inc. (“ ISRG ”). For years, ISRG was, as essentially the only game in town, alone in enjoying the explosive growth in the rapidly emerging field of robotic-assisted, minimally invasive surgery (“ MIS ”).

 

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The global medical robots market is expected to grow to $11.4 billion by 2020 from $4.2 billion in 2015 at a combined annual growth rate of 22.2%. [1]

 

As seen in the following charts, the non-surgical segment of the skin resurfacing market, the target for AVRA’s first planned medical robotic system, has enjoyed explosive growth and is foreseen to continue its fast growth in the near future:

 

 

 

2 Markets And Markets research report, Nov 2015, Medical Robots Market by Product (Robotic systems (Surgical Robots, Rehabilitation Robots, Hospital Robots, Assistive Robots, Telemedicine Robots), Instruments & Accessories) & Application (Orthopedic, Laparoscopy, Neurology) - Global Forecasts to 2020

 

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In 2016, the global skin care market is estimated to be at least $121 billion [2] . The male segment of this market is small, but is increasing steadily, suggesting years of additional future growth lying ahead.

 

 

3 Statista, http://www.statista.com/statistics/254612/global-skin-care-market-size/

 

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As of 2013, there were an estimated 9,600 dermatologists and 7,800 dermatology practices in the U.S according to IMS Health; approximately, 34% of these are solo practices, while approximately 48% are multi-physician (three or more physicians) practices.

 

Most products designed to improve the appearance of the skin do not repair the skin itself; rather, they cover and hide scarring and blemishes temporarily. Wrinkles also are challenging as the skin ages and are hard to cover over. Some current products aim to slow or forestall the development of wrinkles, but with questionable effectiveness.

 

Botox injections and CO 2 Lasers are the common procedures currently in use today for skin resurfacing. Other procedures include Needling, Radiofrequency, Ultrasound, and Cryolipolysis.

 

Botox injections have proved successful for cosmetic enhancement because it shrinks wrinkles dramatically. Botox has enjoyed rapid growth in sales and number of procedures (now about 7 million annually in the US alone). [3] The downside of Botox is pain during the procedures and the need for repeated treatments given the temporary nature of the results achieved.

 

CO 2 Laser resurfacing also can shrink wrinkles, even eliminating small wrinkles by removing the outer layer of skin, allowing new skin to form. While simple, this procedure can be painful. Laser resurfacing works by burning off skin; skin can reach 1500°F (800°C) in the process of being removed, and adjacent areas of skin can approach 400°F. (Unsurprisingly, general anesthesia is often required.) Open wounds are created and healing may take up to three weeks. Skin redness may persist for three months, during which the skin is particularly sensitive to UV light. Other risks of laser resurfacing include scarring, changes in skin pigmentation and bacterial infection.

 

Because wrinkles are a major cosmetic concern of both men and women alike, AVRA believes that a robotic system that actually reduces and eliminates wrinkles with minimal side effects has great market potential. Although no such product currently exists, AVRA intends to focus its initial efforts on addressing this void by being the first to develop, commercialize and market a medical robotic system to aid in skin resurfacing.

 

Efficiently to Market with a Superior Solution

 

AVRA believes that its resurfacing solution will be superior to Botox injections and CO 2 Laser treatments, while being price competitive. Botox needs to be repeated every few months and the costs of acquiring CO 2 Lasers are higher than AVRA’s planned system.

 

AVRA plans to use a treatment delivered by a robotic device that improves the appearance of skin beyond wrinkle elimination. There are no injections of a toxin as in Botox. Recovery is anticipated to be rapid, estimated to be a fraction of the time of CO 2 lasers. Moreover, deep perioral wrinkles (the greatest challenge) respond very well to our solution, with no milia or hypopigmentation.”

 

The Company believes that the safety, efficacy and cost effectiveness of its planned technology, which has already received FDA 510(k) approvals by other users of the technology (the “Technology”), will afford a significant medical and competitive advantage as employed by AVRA.

 

The use of a robotic system will ensure accuracy, speed and minimize human error while also allowing doctors to increase their productivity by performing more procedures daily.

  

 

4 2014 Allergan Presentation

 

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The Company believes it can rapidly develop, commercialize and market its initial robotic system because of the following advantages:

 

  AVRA is ready to build a prototype — all elements of a robotic device have been designed.

 

  AVRA’s team is experienced in medical robotic engineering.

 

  The Technology has already received FDA approvals which the Company anticipates will allow for a sharply reduced time to market.

 

  AVRA is working in conjunction with preeminent physicians, engineers and scientific institutions.

 

  AVRA is prepared for ongoing research, development, commercialization, marketing, and manufacturing of products.

 

  AVRA believes that its modular approach will enable rapid entry into the skin resurfacing and other markets with new and improved devices.

 

Product Elements

 

There are four key elements to the Company’s medical robotic devices, all of which can potentially generate revenues:

 

  Robotic Systems:   Standardized arms, precision guidance system, and software controls designed to the needs of doctors and physicians.
  Robotic Tools: Standardized tools that can be modified to cover a wide range of medical procedures.
  Maintenance:   Ongoing operation and service simplified so the medical user can perform much of the work in house.
  Education, Training: Remote and on-site programs for surgeons, hospitals and medical support staff.

 

Marketing Strategy

 

AVRA and its management team have relationships with many top medical institutions as of the result of their combined years of experience and expertise in exploring new designs for medical robotic systems. Moreover, the Company’s Medical Advisory Board consists of some of the best robotic surgeons in the world who are working to develop new, cutting edge procedures. As a result, AVRA believes that it will be able to capitalize on its experience and relationships to successfully develop, commercialize and launch a new system that it believes will be welcomed into hospital skin resurfacing departments, as well as into individual and skin resurfacing groups. The Company plans to handle initial sales on a direct basis to departments and practices through its extensive contacts in the medical industry.

 

AVRA plans to initially place the new AVRA Skin Resurfacing Robotic System into some of the major and most respected hospital names in the US. The company already has strong relationships with many of these. AVRA will then leverage this into the larger skin resurfacing market with a direct cost effective marketing plan that includes well known social media outlets such as Facebook, Twitter, Instagram and Vimeo.

 

Due to the large market it addresses, the AVRA Skin Resurfacing Robotic System is expected to produce a much higher degree of interest and throng of inquiries than what the internal robotic surgical medical field would generate. The Company anticipates that this will help the company drive patient business directly to our AVRA Skin Resurfacing Robotic System’s doctors and centers.

 

AVRA will utilize the internet to answer the many expected inquiries and will upgrade its website(s) to automatically handle and direct these when appropriate.

 

Development Strategy

 

On May 1, 2016, the Company entered into the Research Agreement with the UCF for the development of a prototype surgical robotic device supporting minimal invasive surgical facial corrections. The Agreement provides that the University will provide personnel to accomplish the objectives as stated in the Statement of Work over a period extending to April 30, 2017. The Company has agreed to provide funding of $163,307 for the project.

 

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In addition, AVRA has paid $43,548 for outright ownership of the University’s Intellectual Property resulting from the collaboration, which amount is shown as Intellectual Property. Management has assessed the carrying value of the asset and believes there has been no diminution of its value and accordingly, no adjustment is necessary.

 

The total cost to the Company is:

 

Research Expense - funded from existing funds   $ 163,307  
Acquisition of Intellectual Property Rights     43,548  
Total   $ 206,855  

 

As of September 30, 2016, $125,202 has been paid under the Agreement. The balance of the amount owing to the University is due November 1, 2016 ($40,827) and February 1, 2017 ($40, 826). The November 1, 2016 payment is expected to be made in February 2017. Additionally, a $68,952 matching funds grant from the Florida High Tech Corridor Council (FHTCC) was approved on July 16, 2016 which will provide the University research funds in addition to the Company’s funding obligation to the University. The FHTCC research grant is subject to certain research obligations and action requirements which if not met may result in the loss of the FHTCC research funding which would require the Company to cover any resulting shortfall.

 

Intellectual Property

 

In connection with the design of its planned medical robotic systems, AVRA has applied for six provisional patents so far, will review existing patents in the United States and the European Union to reduce the risk of infringement claims and will file patent applications as its product development proceeds for elements of its products which qualify for patent protection.

 

The Company intends to file, as necessary, patent applications in the United States, as well as in other jurisdictions where it intends to distribute its products and where the dates of our initial patent applications will give us a right of priority.

 

Patents are granted for a fixed term and eventually expire. Upon expiration, the inventions claimed in a patent enter the public domain. There is no assurance that our patent applications will be granted or that patents granted will prevent others from developing competing products.

 

Government Regulation

 

Our products and operations will be subject to extensive and rigorous regulation in the United States by the United States Food and Drug Administration (the “ FDA ”) and by similar agencies in other countries or regions in which we may market our products.

 

Unless an exemption applies, each medical device that we intend to market in the U.S. must first receive either " 510(k) clearance " or " Premarket (PMA) approval " from the FDA pursuant to the Federal Food, Drug, and Cosmetic Act. The FDA's 510(k) clearance process usually takes from four to 12 months, but it can last longer. The process of obtaining PMA approval is much more costly, lengthy and uncertain. It generally takes from one to three years or even longer. We cannot be sure that 510(k) clearance or PMA approval will be obtained in the future for any product we propose to market.

 

The FDA decides whether a device must undergo either the 510(k) clearance or PMA approval process based upon statutory criteria. These criteria include the level of risk that the agency perceives is associated with the device and a determination whether the product is similar to devices that are already legally marketed. Devices deemed to pose relatively less risk are placed in either class I or II, which requires the manufacturer to request 510(k) clearance, unless an exemption applies. The manufacturer must demonstrate that the proposed device is "substantially equivalent" in intended use, safety and effectiveness to a legally marketed "predicate device" that is either in class I, class II, or is a "preamendment" class III device, one that was in commercial distribution before May 28, 1976, for which the FDA has not yet called for submission of a PMA application. After a device receives 510(k) clearance, any modification to the device that could significantly affect its safety or effectiveness, or that would constitute a major change in its intended use, requires a new 510(k) clearance or could require a PMA approval.

 

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Devices deemed by the FDA to pose the greatest risk, such as life-sustaining, life-supporting or implantable devices, or devices deemed not substantially equivalent to a legally marketed predicate device, are placed in class III. Such devices are required to undergo the PMA approval process in which the manufacturer must prove the safety and effectiveness of the device to the FDA's satisfaction.

 

A PMA application must provide extensive preclinical and clinical trial data as well as information about the device and its components regarding, among other things, device design, manufacturing and labeling. As part of the PMA review, the FDA will inspect the manufacturer's facilities for compliance with CGMP and QSR requirements, which include elaborate testing, control, documentation and other quality assurance procedures. During the FDA's review, an FDA advisory committee, typically a panel of clinicians, likely will be convened to review the application and recommend to the FDA whether, or upon what conditions, the device should be approved. Although the FDA is not bound by the advisory panel decision, the panel's recommendation is important to the FDA's overall decision making process. If the FDA's evaluation of the PMA application is favorable, the FDA typically issues an "approvable letter" requiring the applicant's agreement to comply with specific conditions or to supply specific additional data or information in order to secure final PMA approval.

 

Once the approvable letter conditions are satisfied, the FDA will issue a PMA order for the approved indications, which can be more limited than those originally sought by the manufacturer. The PMA order can include post-approval conditions that the FDA believes necessary to ensure the safety and effectiveness of the device including, among other things, restrictions on labeling, promotion, sale and distribution. Failure to comply with the conditions of approval can result in an enforcement action, including withdrawal of the approval. The PMA process can be expensive and lengthy, and no assurance can be given that any PMA application will ever be approved for marketing. After approval of a PMA, a new PMA or PMA supplement may be required in the event of modifications to the device, its labeling or its manufacturing process.

 

A clinical trial may be required to support a 510(k) submission and generally is required for a PMA application. Such trials generally require an investigational device exemption application, or IDE, approved in advance by the FDA for a specified number of patients and study sites, unless the product is deemed an insignificant risk device eligible for more abbreviated IDE requirements. The IDE must be supported by appropriate data, such as animal and laboratory testing results. Clinical trials may begin if the FDA and the appropriate institutional review boards at the clinical trial sites approve the IDE. Trials must be conducted in conformance with FDA regulations and institutional review board requirements. The sponsor or the FDA may suspend these trials at any time if they are deemed to pose unacceptable health risks or if the FDA finds deficiencies in the way they are being conducted. Data from clinical trials are often subject to varying interpretations that could delay, limit or prevent FDA approval.

 

We will be subject to inspection and market surveillance by the FDA to determine compliance with regulatory requirements. If the FDA finds that we have failed to comply, the agency can institute a wide variety of enforcement actions, ranging from a public warning letter to more severe sanctions. The FDA also has the authority to request repair, replacement or refund of the cost of any medical device manufactured or distributed by us. Our failure to comply with applicable requirements could lead to an enforcement action that may have an adverse effect on our financial condition and results of operations.

 

In order for us to market our products in other countries, we must obtain regulatory approvals and comply with extensive safety and quality regulations in other countries. These regulations, including the requirements for approvals or clearance and the time required for regulatory review, vary from country to country. Failure to obtain regulatory approval in any foreign country in which we plan to market our products may harm our ability to generate revenue and harm our business.

 

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Employees

 

As of the date of this prospectus the Company employs six persons, including its executive officers. The Company also relies on independent third party consultants to perform additional services as needed. As we implement our business plan and subject to the availability of capital, additional employees will be hired in the future as our business expands.

 

Properties

 

The Company currently does not own any properties but leases an office from a UCF at 3259 Progress Drive, Orlando, FL 32826. The lease expires July 31, 2017 at a rental of $240 per month. Pursuant to the Research Agreement, research and development activities are conducted at UCF’s campus.

 

Legal Proceedings

 

Currently there are no legal proceedings pending or threatened against us.  However, from time to time, we may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business.  Litigation is subject to inherent uncertainties, and an adverse result in any such matter may harm our business.

 

MARKET FOR COMMON EQUITY AND RELATED SHAREHOLDER MATTERS

 

There is presently no public market for our common stock and there has never been a market for our common stock. We anticipate applying for quotation of our common stock on the OTCQX or the OTCQB tiers of the over-the- counter market operated by OTC Markets Group following the effectiveness of the registration statement of which this prospectus forms a part. However, we cannot assure you that our shares will be quoted on any tier of OTC Markets Group or, if quoted, that a public market will develop and if developed, be liquid and be sustained.

 

A market maker sponsoring a company’s securities is required to obtain a quotation of the securities on any of the public trading markets, including the OTCQX or OTCQB. If we are unable to obtain a market maker for our common stock, we will be unable to develop a trading market for our common stock. We may be unable to locate a market maker that will agree to sponsor our securities. Even if we do locate a market maker, there is no assurance that our securities will be able to meet the requirements for a quotation or that the securities will be accepted for quotation by OTC Markets Group on the OTCQX or OTCQB.

 

OTCQX and OTCQB securities are not quoted and traded on the floor of an organized national or regional stock exchange. Instead, securities transactions are conducted through a telephone and computer network connecting dealers in stocks. OTCQX and OTCQB stocks are traditionally smaller companies that do not meet the financial and other listing requirements of a regional or national stock exchange.

  

Holders of our Common Stock

 

As of the date of this prospectus, we had 19,135,000 shares of common stock issued and outstanding and 125 holders of record of our common stock.

 

Transfer Agent

 

Following effectiveness of this registration statement of which this prospectus forms a part, we intend to appoint VStock Transfer, LLC, Woodmere, New York, as transfer agent for our common stock.

 

Dividend Policy

 

The payment by us of dividends, if any, in the future rests within the discretion of our board of directors and will depend, among other things, upon our earnings, capital requirements and financial condition, as well as other relevant factors.  We have not paid any dividends since our inception and we do not intend to pay any cash dividends in the foreseeable future, but intend to retain all earnings, if any, for use in our business.

 

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Rule 144 Shares

 

Rule 144 under the Securities Act provides that a person who is not an affiliate and has held restricted securities for a prescribed period of at least six months (if the issuer is a reporting company) or 12 months (if the issuer is a non-reporting company, as is the case herein), may, under certain conditions, sell all or any of his shares without volume limitation.  Affiliates, however, may not sell shares in excess of 1% of the Company’s outstanding common stock in any three month period.  There is no limit on the amount of restricted securities that may be sold by a non-affiliate (i.e., a shareholder who has not been an officer, director or control person for the three months prior to sale) after the restricted securities have been held by the owner for the aforementioned prescribed period of time. An aggregate of 19,000,000 of our outstanding shares of common stock not covered by this prospectus will be eligible for public sale pursuant to Rule 144, commencing 90 days after the date the registration statement of which this prospectus forms a part is declared effective by the SEC and the remaining 135,000 shares will become eligible for public sale pursuant to Rule 144 in August 2017.

   

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 

The following discussion contains forward-looking statements that involve risks and uncertainties. Our actual results may differ materially from those discussed in the forward looking statements as a result of various factors, including, without limitation, those set forth in “ Risk Factors ,” “ Special Note Regarding Forward-Looking Statements ” and other matters included elsewhere in this prospectus. The following discussion of our financial condition and results of operations should be read in conjunction with our financial statements and the notes thereto included elsewhere in this prospectus.

 

Introduction

 

AVRA is currently developing a prototype for skin resurfacing in partnership with the University of Central Florida, recognized particularly for its work in the area of medical robotics research and design, focusing on the guidance systems which will allow AVRA’s medical robotic system to handle any currently available “tool” in the market.

 

The financial statements appearing elsewhere in this prospectus have been prepared assuming the Company will continue as a going concern. The company was recently formed and has not established sufficient operations or revenues to sustain the company. These conditions raise substantial doubt about the company’s ability to continue as a going concern.

 

The following table provides selected financial data about our company at December 31, 2015 and September 30, 2016:

 

    As of     As of  
Balance Sheet Data   September 30,     December 31,  
    2016     2015  
    (Unaudited)        
             
Cash   $ 288,726     $ 100  
Total Assets   $ 339,458     $ 100  
Total Liabilities   $ 534,442     $ 166  
Total Stockholders' Deficiency   $ (194,984 )   $ (66 )

 

To date, the company has relied on debt and equity raised in private offerings to finance operations and no other source of capital has been identified or sought. If we experience a shortfall in operating capital we could be faced with having to limit our research activities.

 

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Results of Operations

 

Period from Inception (February 4, 2015) through December 31, 2015

 

General. During the period from inception (February 4, 2015) through December 31, 2015, our operations were limited to organizational and planning activities.

 

Revenues. We had no revenues during the period from inception (February 4, 2015) through December 31, 2015.

 

Research and Development Expenses. We did not incur any research and development expenses during the period from inception (February 4, 2015) through December 31, 2015.

 

General and Administrative Expenses. We incurred $66 in general and administrative expenses during the period from inception (February 4, 2015) through December 31, 2015.

 

Other Expenses . We did not incur any other expenses during the period from inception (February 4, 2015) through December 31, 2015.

 

Net Loss. We incurred a net loss of $66 during the period from inception (February 4, 2015) through December 31, 2015.

 

Nine months ended September 30, 2016 as compared to period from Inception (February 4, 2015) through September 30, 2015

 

Revenues. We had no revenues during either the nine months ended September 30, 2016 or the period from Inception through September 30, 2015.

 

Research and Development Expenses. We incurred $81,654 in research and development expenses during the nine months ended September 30, 2016, as compared to $0 during the prior period, reflecting the raising and deployment of initial capital and the commencement of product development.

 

General and Administrative Expenses. We incurred $194,981 in general and administrative expenses during the nine months ended September 30, 2016, as compared to $34 during the prior period reflecting the raising and deployment of initial capital and commencement of product development.

 

Other Expenses . We incurred $13,507 in other expenses during the nine months ended September 30, 2016, as compared to $0 during the prior period reflecting the raising and deployment of initial capital and commencement of product development.

 

Net Loss. We incurred a net loss of $290,142. during the nine months ended September 30, 2016.

 

Liquidity and Capital Resources

 

The Company expects to require substantial funds for research and development, to continue to develop its initial proposed medical robotic system. The Company plans to meet its operating cash flow requirements by raising additional funds from the sale of our securities and, if possible on favorable terms, by entering into development partnerships to assist us with our technology development activities.

 

During the period from inception (February 4, 2015) through September 30, 2016, the Company raised $1,900 from private offerings of its common stock and $480,000 from a private offering of its Convertible Notes in such principal amount.. In addition, in February 2017, the Company raised an additional $135,000 from a private offering of 135,000 shares of common stock at a price of $1.00 per share made to three investors. While we have been successful in raising funds to fund our operations since inception and we believe that we will be successful in obtaining the necessary financing to fund our operations going forward, we do not have any committed sources of funding and there are no assurances that we will be able to secure additional funding. The accompanying financial statements have been prepared assuming that the Company will continue as a going concern; however, if the efforts noted above are not successful, it would raise substantial doubt about the Company’s ability to continue as a going concern. If we cannot obtain financing, then we may be forced to further curtail our operations or consider other strategic alternatives. Even if we are successful in raising the additional financing, there is no assurance regarding the terms of any additional investment and any such investment or other strategic alternative would likely substantially dilute our current shareholders.

 

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Critical Accounting Policies

 

Use of Estimates

 

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.  Actual results could differ from those estimates.  Significant estimates included deferred revenue, costs incurred related to deferred revenue, the useful lives of property and equipment and the useful lives of intangible assets.

 

Income Taxes

 

The Company accounts for income taxes in accordance with ASC 740, Accounting for Income Taxes, as clarified by ASC 740-10, Accounting for Uncertainty in Income Taxes.  Under this method, deferred income taxes are determined based on the estimated future tax effects of differences between the financial statement and tax basis of assets and liabilities given the provisions of enacted tax laws.  Deferred income tax provisions and benefits are based on changes to the assets or liabilities from year to year.  In providing for deferred taxes, the Company considers tax regulations of the jurisdictions in which the Company operates, estimates of future taxable income, and available tax planning strategies.  If tax regulations, operating results or the ability to implement tax-planning strategies vary, adjustments to the carrying value of deferred tax assets and liabilities may be required.  Valuation allowances are recorded related to deferred tax assets based on the “more likely than not” criteria of ASC 740.

 

ASC 740-10 requires that the Company recognize the financial statement benefit of a tax position only after determining that the relevant tax authority would more likely than not sustain the position following an audit.  For tax positions meeting the “more-likely-than-not” threshold, the amount recognized in the financial statements is the largest benefit that has a greater than 50 percent likelihood of being realized upon ultimate settlement with the relevant tax authority.

 

Off-Balance Sheet Arrangements

 

There are no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.

 

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MANAGEMENT

 

Directors and Executive Officers

 

Our directors and executive officers and their respective ages and titles are as follows:

 

Name   Age   Position(s) and Office(s) Held
Barry F. Cohen   76   Chief Executive Officer and Director
         
A. Christian Schauer   74   Chief Financial Officer
         
Dr. Ray Powers   67   Chief Operating Officer
         
Alexandre S. Clug   48   Vice President of Global Business Development
         
Nicole Bergman-Fong   55   Corporate Counsel
         
Peter Carnegie   47   Director
         
Nikhil L. Shah, D.O.   46   Director

 

Set forth below is a brief description of the background and business experience of our directors and executive officers.

 

Barry F. Cohen founded the Company and has served as its Chief Executive Officer and a director since February 4, 2015. Between 2006 and 2008, Mr. Cohen was a private investor and founded AVRA Surgical, Inc., a medical technology company. From approximately 1979 to 1983 he served as director of Synalloy Corp., a manufacturer of pipe, piping systems and specialty chemicals after which he was appointed to serve as President from 1984 to 1985. Mr. Cohen also served as Chairman of the Executive Board of Wolverine Technologies, Inc., a NYSE listed company from 1979 to 1983 and President of Barry F. Cohen & Co., an NASD member from 1983 to 1999. Mr. Cohen has over 50 years’ experience in managing private and public industrial companies, and 47 years’ experience as a securities executive.  This significant experience qualifies Mr. Cohen to serve as a director.

 

A. Christian Schauer has served as the Company’s Chief Financial Officer since August 1, 2015. Since 2003, he has also served as Chairman, President and CEO of PharmOptima LLC, a pre-clinical contract research company based in Portage, Michigan. From 1999 until it was acquired by Eimo of Finland in 2001, Mr. Schauer served as Chief Executive Officer of Triple S. Plastics. For 25 years prior thereto, he served in various senior management positions with Clausing Corporation, including as Chairman and Chief Executive Officer from 1984 until 1999. Before joining Clausing Corporation, Mr. Schauer was with Ernst & Ernst (now Ernst & Young) for approximately a decade. A certified public accountant, he holds a B.B.A. in accounting from Western Michigan University. Mr. Schauer has served as an executive and non-executive director for several companies, including First of America Bank, Durametallic Corporation, Triple S Plastics, Harter Corporation, The 600 Group Plc. (London), and Z Seven Fund. Mr. Schauer currently serves as a non-executive director for Griffith Foods, Inc., and as a Trustee of the Boards at Kalamazoo Valley Community College and Hope Network.

 

Dr. Ray Powers , who became our Chief Operating Officer on August 1. 2016, was an executive within the Bell System for 30 years prior to moving on to C-level positions in the technology sector in both private and public companies. He has served as Director of Standards for the Project Management Institute, and on their Board of Directors. He has been a professor and an academic department chair in higher education at the Forbes School of Business, holds an MBA in Technology Management, and a Doctoral degree in Leadership from the University of Phoenix.

 

Alexandre S. Clug , who became our Vice President on August 1, 2016, was formerly CFO, and CEO of various businesses in the US, Latin America and Europe. His experience covers all aspects of building a business. He has taken companies public in both the US and Europe, developed a sales force from zero to 6,000 while at Etelix, and built a sales pipeline of over $100 million while at Secure Fortress which, as CEO, he took public in Europe. Mr. Clug graduated with honors from West Point receiving a BS in Electrical Engineering, served with distinction as a Captain in the Army Corps of Engineers, has a MBA from UCLA, and is fluent in English, French and Spanish.

 

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Nicole Bergman-Fong , who became our Corporate Counsel on October 1, 2016, has been advising and supporting the development of a number of start-up businesses and small businesses in New York and across the globe for over a decade. She previously was a finance partner in the law firm of Mayer Brown for 10 years. From 1984 through 1991 Ms. Bergman-Fong was a finance associate at Cravath, Swaine & Moore in the M&A to Structured Finance Area. She attended Brown University and she was a Harlan Fiske Stone Scholar at Columbia Law School where she graduated with honors. She is a member of the New York Bar.

 

Peter Carnegie , who became a director on August 15 2016, is a leader in developing successful robotic surgery programs in storied institutions like the Cleveland Clinic, the University of Alabama, Birmingham, the University of Pittsburgh Medical Center and West Virginia University Hospitals. He also is an expert in developing robotic and medical device training programs, surgeon training programs, nurse training programs, and clinical and sales training programs, Mr. Carnegie has been the CEO of Minimally Invasive Solutions Consulting (MIS), a robotic surgery consulting firm since 2011. Prior to becoming the CEO of MIS, he was its Chief Operating Officer. Before, MIS, he worked at Intuitive Surgical, Inc. as U.S. Program Development Manager for Cardiothoracic, Head & Neck Surgery. Prior to working for Intuitive, he was at Ethicon Endo-Surgery of Johnson & Johnson. He has headed programs in robotic training, including the Symposium on Science, Technology and Advanced Robotics in partnership with the Links Inc. Professional Opportunities Program for Students of the University of Central Florida, the University of South Florida, and Valencia College. He is a decorated war veteran and recipient of the Douglas McArthur Leadership Award, and holds a BS degree in engineering from West Point. This significant experience qualifies Mr. Carnegie to serve as a director.

 

Nikhil L. Shah, D.O. who became a director on October 1, 2016, is one of the top global leaders in robotic cases and serves as the AVRA Chief Medical Robotic Advisor. He is currently the head of Minimal Access & Robotic Surgery at Piedmont Healthcare in Atlanta, GA. He has previously served as the Medical Director of The Jenkins Clinic in Atlanta and is also an Associate Professor (adjunct) at the Georgia Institute of Technology in the College of Computing – Robotics & Intelligent Machines. Prior positions also include the Section Chief of Urology, Department of Surgery, Saint Joseph’s Hospital of Atlanta, and the Director of Robotic Surgery, Saint Joseph’s Hospital of Atlanta. This significant experience qualifies Dr. Shah to serve as a director.

 

Terms of Office

 

Our directors are appointed for a one-year term to hold office until the next annual meeting of our shareholders and until a successor is appointed and qualified, or until their removal, resignation, or death.  Executive officers serve at the pleasure of the board of directors.

 

Director Independence

 

At present, we believe that our two non-employee directors (Mr. Carnegie and Dr. Shah) are “ independent ” as defined under Rule 10A-3(b)(1) under the Exchange Act.

 

Board Committees

 

Our board of directors does not currently have an audit committee, a compensation committee, or a corporate governance committee.  We plan to establish such committees in the near future, all the members of which will be “ independent ” directors.

 

Code of Ethics

 

Effective August 15, 2016, we adopted a Code of Ethics that applies to employees, including our principal executive officer, principal financial officer, or persons performing similar functions.

 

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Board of Directors Role in Risk Oversight

 

Members of the board of directors have periodic meetings with management and the Company’s independent auditors to perform risk oversight with respect to the Company’s internal control processes. The Company believes that the board’s role in risk oversight does not materially affect the leadership structure of the Company .

  

Medical Advisory Board

 

The Company has also established a medical advisory board, whose members meet periodically in person or by telephone with management and/or the board of directors to advise on scientific, product development and marketing matters.  The current members of the medical advisory board are:

 

· Dr. Juan Jose Badimon, PhD
· Dr. Heywood Y. Epstein
· Dr. Yuman Fong
· Dr. Hiep T. Nguyen
· Dr. Vipul Patel
· Dr. Farhan Taghizadeh

 

Dr. Juan Jose Badimon, Ph.D. , is a Professor of Medicine and Director of the Atherothrombosis Research Unit at the Cardiovascular Institute, Mount Sinai School of Medicine, New York. He graduated by the University of Barcelona in 1982. His academic appointments include Mayo Clinic, Massachusetts General Hospital, Harvard University, Boston (and Mount Sinai School of Medicine, New York. His major research interests are focused on pathogenesis and treatment of atherothrombosis and cardiovascular diseases. Dr. Badimon has published more than 370 peer-reviewed articles in athero-thrombosis, imaging and cardiovascular diseases. He serves as reviewer for 10 of the top journals in cardiovascular diseases.

 

Dr. Heywood Y. Epstein was Chief Resident in Radiation Therapy at Montefiore Hospital in the Bronx NY, Assistant Professor of Radiology at Columbia P&S, NYU, Mt. Sinai in NY, and Stoney Brook NY.  While in the US Public Health Service he was both Director of Staten Island Radiology Residency Program, Director of their Radiology Technologist Training Program, and USPHS radiation safety officer for the Northeast United States. Dr. Epstein helped establish NYU’s first ultrasound section in their Radiology Department and has coauthored 25 articles for juried journals.  Dr. Epstein has performed approximately 10,000 angiograms and interventional radiographic procedures, in addition to another 10,000 breast biopsies guided by ultrasound, and stereotactically.

 

Dr. Yuman Fong is an internationally recognized expert in cancer and is a sought-after consultant on a wide range of medical robotic research. Dr. Fong is currently Chair of the Department of Surgery for City of Hope and was at the renowned Memorial Sloan-Kettering Cancer Center in New York City for the prior two decades. Dr. Fong is also both author and innovator: he has developed many new surgical techniques and instruments and written and edited hundreds of scholarly articles as well as nearly a dozen textbooks.

 

Dr. Hiep Nguyen is a world renowned Pediatric Urologist specializing in robotic and minimally invasive surgery, ureter pelvic junction (UPJ) obstruction, vesicoureteral reflux and reconstructive surgery. Dr. Nguyen was Director of the Robotic Surgery, Research and Training Center Rose Zimmerman Mandell, Chair in Innovative Urological Technology; Associate Professor (Surgery), Harvard Medical School, and Boston Children's Hospital. He is currently at the Carson Children’s Medical Center in Mesa, Arizona.

 

Dr. Vipul Patel is Medical Director of the Global Robotics Institute at Florida Hospital. Founder of the Society of Robotic Surgery, Dr. Patel has personally performed the most robotic surgeries in the world, 10,000+ robotic prostatectomies. He is also a Professor at the University of Central Florida College of Medicine.

 

  40  

 

 

Dr. Farhan Taghizadeh has extensive experience as a board-certified ENT and facial plastic and reconstructive surgeon, Dr. Taghizadeh specializes in the use of the most advanced facial cosmetic procedures to help people who are dissatisfied with their appearance. Since 2005, Dr. Taghizadeh has performed more than 2,500 facelifts using the latest advanced surgical techniques that minimize recovery time and provide the most comfort for his clients. In addition, he also specializes in scar revision, revision facelifts, and revision rhinoplasty.

 

Members of the medical advisory board are compensated through the grant of a stock option awards under our 2016 Incentive Stock Plan (the “ Incentive Plan ”). Current members each received a five-year option to purchase 36,000 shares at an exercise price of $0.15 per share, 6,000 shares of which vest upon grant and the balance of which vest in twelve quarterly installments of 2,500 shares each, subject to continued service.

 

  41  

 

 

EXECUTIVE COMPENSATION

 

Summary Compensation Table

 

The table below summarizes all compensation awarded to, earned by, or paid to our Chief Executive Officer, Chief Financial Officer and our other executive officers for the period from inception (February 4, 2015) through December 31, 2015 and for the year ended December 31, 2016.

 

SUMMARY COMPENSATION TABLE

 

                                        Nonqualified              
                                  Non-Equity     Deferred              
Name and                   Stock     Option     Incentive Plan     Compensation     All Other        
Principal       Salary     Bonus     Awards     Awards     Compensation     Earnings     Compensation     Total  
Position   Year     ($)     ($)     (#)     (#)     ($)     ($)     ($)     ($)  
Barry F. Cohen, Chairman and Chief Executive Officer (1)     2016       60,000       0       0       1,000,000       0       0       0       60,000  
      2015       0       0       0       0       0       0       0       0  
                                                                         
Albert Christian Schauer, Chief Financial Officer (2)     2016       45,000       0       0       210,000       0       0       0       45,000  
                                                                         
Dr. Ray Powers, Chief Operating Officer (3)     2016       0       0       0       75,000       0       0       0       0  
                                                                         
Alexandre S. Clug, Vice-President of Global Business Development (4)     2016       40,000       0       0       300,000       0       0       0       40,000  
                                                                         
Nicole Bergman-Fong, Corporate Counsel (5)     2016       0       0       0       60,000       0       0       0       0  

 

(1) Mr. Cohen was granted an option for 1,000,000 shares on August 15, 2016, all vested immediately. Includes $4,013 of accrued but unpaid salary.

 

(2) Mr. Schauer was granted an option for 210,000 shares on August 15, 2016, with 70,000 shares vesting on August 15, 2017, 70,000 on August 15, 2018 and 70,000 on August 15, 2019. Includes $45,000 of accrued but unpaid salary.

 

(3) Dr. Powers was granted an option for 75,000 shares on August 15, 2016 vesting in equal monthly installments over 36 months.

 

(4) Mr. Clug was granted an option for 300,000 shares on August 15, 2016, with 100,000 shares vesting August 15, 2017, 100,000 shares vesting on August 15, 2018 and 100,000 shares vesting on August 15, 2019. Includes $35,000 of accrued but unpaid salary.

 

(5) Ms. Bergman-Fong was granted an option for 60,000 shares on October 1, 2016, with 15,000 shares vesting immediately and the balance vesting in equal monthly installments over 36 months.

 

Employment Agreements

 

The Company is party to employment agreements with Barry F. Cohen, A. Christian Schauer and Alexandre S. Clug, its Chief Executive Officer, Chief Financial Officer and Vice President of Global Business Development, respectively.

 

Mr. Cohen’s employment agreement is for a term of four years commencing July 1, 2016, provides for an initial base salary of $10,000 per month increasing to $15,000 per month effective July 1, 2017, a $500 month travel stipend and the grant of a fully vested option under the Incentive Plan to purchase 1,000,000 shares of our common stock at an exercise price of $0.10 per share.

 

  42  

 

 

Mr. Schauer’ s employment agreement is for a term of one year commencing August 1, 2016, provides for a base salary of $9,000 per month and the grant of an option under the Incentive Plan to purchase 210,000 shares of our common stock at an exercise price of $0.10 per share, which vests in three equal annual installments on the first, second and third anniversaries of the date of the employment agreement.

 

Mr. Clug’s employment agreement is for a term of three years commencing August 1, 2016, provides for a base salary of $8,000 per month increasing to $12,000 per month effective July 1, 2017, a $500 month travel stipend and the grant of an option under the Incentive Plan to purchase 300,000 shares of our common stock at an exercise price of $0.10 per share, which vests in three equal annual installments on the first, second and third anniversaries of the date of the employment agreement.

 

Each of the employment agreements provides for reimbursement of reasonable business expenses incurred by the executive officer in the performance of his duties and contains confidentiality and non-competition provisions.

 

Outstanding Equity Awards at Fiscal Year-End Table

 

The table below summarizes all unexercised options, stock that has not vested, and equity incentive plan awards for each of our executive officers outstanding as of December 31, 2016, the end of our last completed fiscal year.

 

    Number of Securities     Number of
Securities
                      Market value  
    Underlying     Underlying                 Number of     of shares of stock  
    Unexercised
Options
Exercisable
    Unexercised
Options
Unexercised
    Option
Exercise
Price
    Option
Expiration
Date
    Shares that
have not
vested
    that have
 not
vested*
 
                                     
Barry F. Cohen     1,000,000       1,000,000     $ 0.10       August 15, 2021       0          
                                                 
A. Christian Schauer     0       210,000     $ 0.10       August 15, 2021       210,000     $ 24,514  
                                                 
Dr. Ray Powers     10,417       75,000     $ 0.10       August 15, 2021       64,583     $ 7,539  
                                                 
Alexandre S. Clug     0       300,000     $ 0.10       August 15, 2021       300,000     $ 35,020  
                                                 
Nicole Bergman-Fong     18,750       60,000     $ 0.15       October 1, 2021       41,250     $ 4,815  
                                                 
Peter Carnegie     19,167       45,000     $ 0.10       August 15, 2021       26,667     $ 3,113  
                                                 
Nikhil L. Shah, D.O.     30,417       200,000     $ 0.15       October 1, 2021       169,583     $ 19,796  

 

*Volume weighted average exercise/fair value price per share for all options awarded: $0.117

 

Compensation of Directors Table

 

The table below summarizes all compensation paid to our directors for the year ended December 31, 2016, our last completed fiscal year.

 

                DIRECTOR COMPENSATION              
                            Non-Qualified              
    Fees Earned                 Non-Equity     Deferred              
    or paid     Stock     Option     Incentive Plan     Compensation     All Other        
    in Cash     Awards     Awards     Compensation     Earnings     Compensation     Total  
Name   ($)     ($)     ($)     ($)     ($)     ($)     ($)  
                                           
Barry F. Cohen     0       0     11,974       0       0       60,000       71,974  
                                                         
Peter Carnegie     0       0       539       0       0       0       539  
                                                         
Nikhil L. Shah, D.O.     0       0       3,592       0       0       0       3,592  

 

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Narrative Disclosure to the Director Compensation Table

 

Non-employee directors are currently compensated with a grant of options under the Incentive Plan. One of the two current non-employee directors, Mr. Carnegie, was granted an option under the Incentive Plan on August 15, 2016, to purchase 45,000 shares of our common stock at a purchase price of $0.10 per share. The options vested as to 15,000 shares on the date of grant, with the remaining 30,000 shares vesting monthly over a three year period, subject to continued service. The other non-employee director, Dr. Shah, was granted an option under the Incentive Plan on October 1, 2016, to purchase 200,000 shares of our common stock at a purchase price of $0.15 per share. The options vested as to 15,000 shares on the date of grant, with the remaining 185,000 shares vesting monthly over a three year period, subject to continued service. Non-employee directors are reimbursed for travel and lodging expenses in connection with their attendance at in-person meetings of the board. When the Company is sufficiently capitalized, the Company intends to institute payment of cash directors’ fees to its non-employee directors in amounts to be determined at that time.

 

2016 Incentive Stock Plan

 

Our 2016 Incentive Stock Plan (the “ Incentive Plan ”) provides for equity incentives to be granted to our employees, executive officers or directors or to key advisers or consultants.  Equity incentives may be in the form of stock options with an exercise price not less than the fair market value of the underlying shares as determined pursuant to the Incentive Plan, restricted stock awards, other stock based awards, or any combination of the foregoing.  The Incentive Plan is administered by the compensation committee, or alternatively, if there is no compensation committee, the board of directors.  3,000,000 shares of our common stock are reserved for issuance pursuant to the exercise of awards under the Incentive Plan.  The number of shares so reserved automatically adjusts upward on January 1 of each year, so that the number of shares covered by the Incentive Plan is equal to 15% of our issued and outstanding common stock. As of the date of this prospectus, the Company has granted options to purchase 2,558,000 shares under the Incentive Plan, exercisable at prices ranging from of $0.10 to $0.15 per share.

 

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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

 

The following table sets forth, as of the date of this prospectus, the beneficial ownership of our common stock by each director and executive officer, by each person known by us to beneficially own 5% or more of our common stock and by directors and executive officers as a group.  Unless otherwise stated, the address of the persons set forth in the table is c/o the Company, 3259 Progress Drive, Suite 126, Orlando, FL 32826.

 

Names and addresses of beneficial
owners
  Number of shares of
common stock
    Percentage
of class (%)
 
                 
Barry F. Cohen (1)     13,100,400       68.46 %
                 
A. Christian Schauer     260,000       1.36 %
                 
Dr. Ray Powers     20,000       0.10 %
                 
Alexandre S. Clug     250,000       1.31 %
                 
Nicole Bergman-Fong     25,000       0.13 %
                 
Peter Carnegie     200,000       1.05 %
                 
Nikhil L. Shah, D. O.     -       0.00 %
                 
All directors and executive officers as a group (seven persons)     13,855,400       72.41 %

 

 

(1) Includes 6,950,400 shares owned by Mr. Cohen directly and 6,150,000 shares held by Avra Acquisitions, LLC of which Mr. Cohen is managing member and over which shares Mr. Cohen exercises voting and dispositive control.

 

The persons named above have full voting and investment power with respect to the shares indicated.  Under the rules of the SEC, a person (or group of persons) is deemed to be a “beneficial owner” of a security if he or she, directly or indirectly, has or shares the power to vote or to direct the voting of such security, or the power to dispose of or to direct the disposition of such security.  Accordingly, more than one person may be deemed to be a beneficial owner of the same security.

 

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

 

Related Party Transactions

 

From time to time since inception, Barry F. Cohen, our founder, Chief Executive Officer and a director advanced certain sums to us to fund our operations. At December 31, 2015 and September 30, 2016, the Company owed Mr. Cohen $4,013 and $166, respectively, for such advances. The amount is unsecured, non-interest bearing and due on demand.

 

Review, Approval and Ratification of Related Party Transactions

 

Given our small size and limited financial resources, we had not adopted formal policies and procedures for the review, approval or ratification of transactions with our executive officers, directors and significant shareholders.  However, we intend that such transactions will, on a going-forward basis, be subject to the review, approval or ratification of our board of directors, or an appropriate committee thereof.

 

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DESCRIPTION OF CAPITAL STOCK

 

Capital Stock

 

Our authorized capital stock consists of 100,000,000 shares of common stock, par value $0.0001 and 5,000,000 shares of preferred stock, par value $0.0001.

 

Common Stock

 

As of the date of this prospectus, 19,135,000 shares of common stock are outstanding.  The shares of common stock presently outstanding are fully paid and non-assessable.  Each holder of common stock is entitled to one vote for each share owned on all matters voted upon by shareholders, and a majority vote is required for all actions to be taken by shareholders.  In the event we liquidate, dissolve or wind-up our operations, the holders of the common stock are entitled to share equally and ratably in our assets, if any, remaining after the payment of all our debts and liabilities and the liquidation preference of any shares of preferred stock that may then be outstanding.  The common stock has no preemptive rights, no cumulative voting rights, and no redemption, sinking fund, or conversion provisions.

 

Holders of common stock are entitled to receive dividends, if and when declared by the board of directors, out of funds legally available for such purpose, subject to the dividend and liquidation rights of any preferred stock that may then be outstanding.

 

Preferred Stock

 

Our board of directors has the authority, without further action by the shareholders, to issue shares of preferred stock in one or more series and to fix the rights, preferences and the number of shares constituting any series or the designation of such series.  While our Amended and Restated Articles of Incorporation and bylaws do not contain any provisions that may delay, defer or prevent a change in control, the issuance of preferred stock may have the effect of delaying or preventing a change in control or make removal of our management more difficult. No shares of preferred stock are outstanding as of the date of this prospectus.

 

LEGAL MATTERS

 

The validity of the common stock being offered hereby has been passed upon by Gutierrez Bergman Boulris, PLLC, Coral Gables, Florida.  A member of such law firm beneficially owns 10,000 shares of our common stock, whose resale is covered by the prospectus forming a part of this registration statement and holds an option granted under the Incentive Plan to purchase an additional 40,000 shares of our common stock.

 

EXPERTS

 

The audited financial statements included in this prospectus and elsewhere in the registration have so been included in reliance upon the report of De Leon & Company, P. A., independent registered public accountants, upon the authority of said firm as experts in accounting and auditing in giving said report.

 

AVAILABLE INFORMATION

 

We have filed a registration statement on Form S-1 under the Securities Act with the SEC with respect to the shares of our common stock offered through this prospectus.  This prospectus is filed as a part of that registration statement, but does not contain all of the information contained in the registration statement and exhibits.  Statements made in the registration statement are summaries of the material terms of the referenced contracts, agreements or documents of the company.  We refer you to our registration statement and each exhibit attached to it for a more detailed description of matters involving the company.  You may inspect the registration statement, exhibits and schedules filed with the SEC at the SEC’s principal office in Washington, D.C.  Copies of all or any part of the registration statement may be obtained from the Public Reference Section of the SEC, 100 F Street, N.E. Washington, D.C. 20549.  Please call the Commission at 1-800-SEC-0330 for further information on the operation of the public reference rooms.  The SEC also maintains a web site at http://www.sec.gov that contains reports, proxy Statements and information regarding registrants that file electronically with the SEC.  Our registration statement and the referenced exhibits can also be found on this site.

 

  46  

 

 

DISCLOSURE OF SEC POSITION ON INDEMNIFICATION

FOR SECURITIES ACT LIABILITIES

 

In accordance with the provisions in our Amended and Restated Articles of Incorporation, by laws, employment and non-employee director appointment letters we will indemnify an officer, director, or former officer or director, to the full extent permitted by law.

 

Insofar as indemnification for liabilities arising under the Securities Act may be permitted to our directors, officers and controlling persons pursuant to the foregoing provisions, or otherwise, we have been advised that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable.

 

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AVRA MEDICAL ROBOTICS, INC.

INDEX TO FINANCIAL STATEMENTS

 

  Page
   
Report of Independent Registered Public Accounting Firm F-2
   
Balance Sheet as of December 31, 2015 F-3
   
Statement of Operations for the Period from February 4, 2015 (Date of Incorporation) to December 31, 2015 F-4
   
Statement of Changes in Shareholders’ Deficit for Period from February 4, 2015 (Date of Incorporation) to December 31, 2015 F-5
   
Statement of Cash Flows for the Period from February 4, 2015 (Date of Incorporation) to December 31, 2015 F-6
   
Notes to Financial Statements F-7
   
Balance Sheets as of September 30, 2016 (unaudited) and December 31, 2015 F-13
   
Statements of Operations for the nine months ended September 30, 2016 (unaudited) and for the Period from Inception (February 4, 2015) to September 30, 2015 (unaudited) F-14
   
Statement of Changes in Shareholders’ Deficit for Period from Inception (February 4, 2015) to  September 30, 2016 F-15
   
Statements of Cash Flows for the nine months ended September 30, 2016 and for the Period from Inception (February 4, 2015) to September 30, 2015 (unaudited) F-16
   
Notes to Financial Statements (unaudited) F-17

 

 

F- 1  

 

 

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors of Avra Medical Robotics, Inc.

We have audited the accompanying balance sheet of Avra Medical Robotics, Inc. as of December 31, 2015 and the related statements of operations, shareholders’ equity and cash flows for the period from February 4, 2015 (inception) to December 31, 2015. Avra Medical Robotics, Inc.’s management is responsible for these financial statements. Our responsibility is to express an opinion on these financial statements based on our audit. We were not engaged to examine management’s assertion about the effectiveness of Avra Medical Robotics, Inc.’s internal control over financial reporting as of December 31, 2015.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Avra Medical Robotics, Inc. as of December 31, 2015, and the results of its operations and its cash for the period then ended in conformity with accounting principles generally accepted in the United States of America.

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company’s ability to raise additional capital through debt and/or equity financing to fund its operating costs is unknown, which raises substantial doubt about its ability to continue as a going concern. Management’s plan in regard to these matters are also described in Note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

 

De Leon & Company, P.A.

Pembroke Pines, Florida

January 29, 2017  
 
   
   
   

  

 

F- 2  

 

 

AVRA MEDICAL ROBOTICS, INC.

BALANCE SHEET

DECEMBER 31, 2015

AUDITED

 

ASSETS        
CURRENT ASSETS:        
Cash and cash equivalents   $ 100  
Total Current Assets   $ 100  
         
TOTAL ASSETS   $ 100  
         
LIABILITIES AND SHAREHOLDER'S DEFICIT        
CURRENT LIABILITY:        
Account Payable   $ 166  
Total Current Liability   $ 166  
         
SHAREHOLDER'S DEFICIT        
Common stock, 100,000,000 shares authorized, $.0001 par value, 13,100,400 issued and outstanding   $ 1,310  
Subscriptions receivable     (1,310 )
      0  
Preferred stock, 5,000,000 shaes authorized, $.0001 par value, none issued or outstanding Accumulated deficit     (66 )
         
TOTAL SHAREHOLDER'S DEFICIT     (66 )
         
TOTAL LIABILITES AND SHAREHOLDER'S DEFICIT   $ 100  

 

See accompanying Notes to Financial Statements

 

F- 3  

 

  

AVRA MEDICAL ROBOTICS, INC.

STATEMENT OF OPERATIONS

PERIOD FROM FEBRUARY 4, 2015 (DATE OF INCORPORATION) TO DECEMBER 31, 2015

AUDITED

 

REVENUES   $ 0  
         
EXPENSES        
General and administrative expenses     66  
TOTAL EXPENSES     66  
         
LOSS BEFORE INCOME TAXES     (66 )
         
PROVISION FOR INCOME TAXES     0  
         
NET LOSS   $ (66 )
         
BASIC AND DILUTED LOSS PER SHARE     -  
         
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING BASIC AND DILUTED     13,100,400  

 

See accompanying Notes to Financial Statements

 

F- 4  

 

  

AVRA MEDICAL ROBOTICS, INC.

STATEMENT OF SHAREHOLDER'S DEFICIT

PERIOD FROM FEBRUARY 4, 2015 (DATE OF INCORPORATION) TO DECEMBER 31, 2015

AUDITED

 

                            TOTAL  
    COMMON STOCK     SUBSCRIPTION     ACCUMULATED     SHAREHOLDER'S  
    NUMBER     AMOUNT     RECEIVABLE     DEFICIT     DEFICIT  
                               
BALANCE AT INCEPTION                                        
(February 4, 2015)     -       -       -       -       -  
                                         
Common stock issued     13,100,400     $ 1,310     $ (1,310 )     -       -  
Net loss for the period February 4, 2015 to December 31, 2015                           $ (66 )   $ (66 )
                                         
BALANCE AT DECEMBER 31, 2015     13,100,400     $ 1,310     $ (1,310 )   $ (66 )   $ (66 )

 

See accompanying Notes to Financial Statements

 

F- 5  

 

  

AVRA MEDICAL ROBOTICS, INC.

STATEMENT OF CASH FLOWS

PERIOD FROM FEBRUARY 4, 2015 (DATE OF INCORPORATION) TO DECEMBER 31, 2015

AUDITED

 

CASH FLOWS FROM OPERATING ACTIVITIES        
Net Loss   $ (66 )
Increase in Accounts Payable     166  
Net Cash provided by Operating Activities     100  
         
INCREASE IN CASH AND CASH EQUIVALENTS     100  
         
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD     0  
         
CASH AND CASH EQUIVALENTS AT END OF PERIOD   $ 100  
         
SUPPLEMENTAL INFORMATION OF NON-CASH INVESTING AND FINANCING ACTIVITIES        
ISSUANCE OF COMMON STOCK FOR SUBSCRIPTIONS RECEIVABLE   $ 1,300  

 

See accompanying Notes to Financial Statements

 

F- 6  

 

 

AVRA MEDICAL ROBOTICS, INC.

NOTES TO FINANCIAL STATEMENTS

PERIOD FROM FEBRUARY 4, 2015 (Date of Incorporation) TO DECEMBER 31, 2015

 

NOTE 1 – ORGANIZATION AND BASIS OF ACCOUNTING

 

AVRA Medical Robotics, Inc. (the “Company” or “AVRA”) was incorporated as AVRA Surgical Microsystems, Inc. in the State of Florida on February 4, 2015. Effective November 5, 2015, the Company’s corporate name was changed to AVRA Medical Robotics, Inc. The Company was established to develop advanced medical surgical devices. The Company is structured to invest in four principal areas –surgical robotic systems, surgical tools, implantable devices and surgical robotic training.

 

The accompanying financial statements are prepared on the basis of accounting principles generally accepted in the United States of America (“GAAP”). The Company is a development-stage enterprise devoting substantial efforts to establishing a new business, financial planning, raising capital, and research into products which may become part of the Company’s product portfolio. The Company has not realized significant sales through December 31, 2015. A development stage company is defined as one in which all efforts are devoted substantially to establishing a new business and, even if planned principal operations have commenced, revenues are insignificant.

 

The accompanying financial statements have been prepared assuming the continuation of the Company as a going concern. The Company has not yet established an ongoing source of revenues sufficient to cover its operating costs and is dependent on debt and equity financing to fund its operations. Management of the Company is making efforts to raise additional funding until a registration statement relating to an equity funding facility is in effect. While management of the Company believes that it will be successful in its capital formation and planned operating activities, there can be no assurance that the Company will be able to raise additional equity capital, or be successful in the development and commercialization of the products it develops or initiates collaboration agreements thereon. The accompanying 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 possible inability of the Company to continue as a going concern.

 

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Cash and Cash Equivalents

 

The Company considers all cash on hand, cash accounts not subject to withdrawal restrictions or penalties, and all highly liquid debt instruments purchased with a maturity of three months or less to be cash and cash equivalents

 

Stock Compensation Expense

 

The Company accounts for equity instruments issued in exchange for the receipt of goods or services from other than employees in accordance with Accounting Standards Codification ("ASC") Topic 505, " Equity. " Costs are measured at the estimated fair market value of the consideration received or the estimated fair value of the equity instruments issued, whichever is more reliably measurable. The value of equity instruments issued for consideration other than employee services is determined on the earlier of a performance commitment or completion of performance by the provider of goods or services as defined by ASC Topic 505. See Note 5.

 

F- 7  

 

 

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

 

Income Taxes

 

The Company accounts for income taxes pursuant to ASC Topic 740 " Income Taxes. " Under ASC Topic 740, deferred tax assets and liabilities are determined based on temporary differences between the bases of certain assets and liabilities for income tax and financial reporting purposes. The deferred tax assets and liabilities are classified according to the consolidated financial statement classification of the assets and liabilities generating the differences. A valuation allowance is recorded when it is more likely than not that some or all of the deferred tax assets will not be realized.

 

The Company applies the provisions of ASC Topic 740-10-05 " Accounting for Uncertainty in Income Taxes ." The ASC clarifies the accounting for uncertainty in income taxes recognized in an enterprise's financial statements. The ASC prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. The ASC provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosure and transition.

 

Estimates

 

The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities and expenses. The Company regularly evaluates estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates made by management.

 

Concentration of Credit Risk

 

The Company maintains its cash and cash equivalents in financial institutions in the United States which at times may exceed insurance limits. The Company has not experienced any losses on such accounts.

 

Basic and Diluted Loss per Share

 

In accordance with ASC Topic 260 " Earnings Per Share, " basic loss per common share is computed by dividing net loss available to common stockholders by the weighted average number of common shares outstanding during the period. Diluted loss per common share gives effect to dilutive convertible securities, options, warrants and other potential common stock outstanding during the period, only in periods in which such effect is dilutive. The Company had no outstanding potential common shares.

 

F- 8  

 

  

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

 

Revenue Recognition

 

The Company recognizes revenue when all of the following criteria are met: (1) the Company has evidence of an arrangement with a customer; (2) the Company delivers the specified services; (3) terms are fixed or determinable; and (4) collection is probable.

 

Property and Equipment

 

Property and equipment are recorded at cost and depreciated using the straight-line method at rates determined to estimate the useful lives of the assets. The annual rates used in calculating depreciation is as follows:

 

Equipment 5 years straight-line

 

Long-lived Assets

 

In accordance with ASC 360, “ Property Plant and Equipment ”, the Company tests long-lived assets or asset groups for recoverability when events or changes in circumstances indicate that their carrying amount may not be recoverable. Circumstances which could trigger a review include, but are not limited to : significant decreases in the market price of the asset; significant adverse changes in the business climate or legal factors; accumulation of costs significantly in excess of the amount originally expected for the acquisition or construction of the asset; current cash flow or operating losses combined with a history of losses or a forecast of continuing losses associated with the use of the asset and current expectation that the asset will more than likely not be sold or disposed significantly before the end of its estimated useful life. Recoverability is assessed based on the carrying amount of the asset and its fair value which is generally determined based on the sum of the discounted cash flows expected to result from the use and the eventual disposal of the asset, as well as specific appraisal in certain circumstances. An impairment loss is recognized when the carrying amount is not recoverable and exceeds fair value.

 

Fair Value of Financial Instruments

 

Our financial instruments consist principally of accounts receivable, amounts due to related parties and promissory notes payable.

 

ASC 820 Fair Value Measurements and Disclosures and ASC 825, Financial Instruments establish a framework for measuring fair value, establishes a fair value hierarchy based on the quality of the inputs used to measure fair value, and enhances disclosure requirements for fair value measurements.

 

F- 9  

 

  

Fair Value Hierarchy

 

The Company has categorized its financial statements, based on the priority of inputs to the valuation technique, into a three-tier fair value hierarchy. The fair value hierarchy gives the highest

 

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

 

priority to quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest level priority to unobservable inputs (Level 3).

 

Financial assets and liabilities recorded on the balance sheet are categorized based on inputs to the valuation techniques as follows:

 

Level 1 Financial assets and liabilities for which values are based on unadjusted quoted prices for identical assets or liabilities in an active market that management has the ability to access.
Level 2 Financial assets and liabilities for which values are based on quoted prices in markets that are not active or model inputs that are observable either directly or indirectly for substantially the full term of the asset or liability (commodity derivatives and interest rate swaps).
Level 3 Financial assets and liabilities for which values are based on prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement. These inputs reflect management’s own assumptions about the assumptions a market participant would use in pricing the asset or liability.

 

When the inputs used to measure fair value fall within different levels of the hierarchy, the level within which the fair value measurement is categorized is based on the lowest level input that is significant to the fair value measurement in its entirety.

 

The carrying amounts of cash and cash equivalents and promissory notes approximate fair value because of the short-term nature of these items.

 

NOTE 3– INCOME TAXES

 

The Company’s deferred tax asset at December 31, 2015 consists of net operating loss carry forward of $66 with a valuation allowance of $23 based on a federal statutory rate of 35%.

 

Due to the uncertainty of their realization, no income tax benefit has been recorded by the Company for these loss carry forwards as valuation allowances have been established for any such benefits. The increase in the valuation allowance was the result of increases in the net operating loss discussed above. Therefore, the Company’s provision for income taxes is $0 for the year ended December 31, 2015.

 

At December 31, 2015, the Company had no material unrecognized tax benefits and no adjustments to liabilities or operations were required. The Company does not expect that its unrecognized tax benefits will materially increase within the next twelve months. The Company recognizes interest and penalties related to uncertain tax positions in general and administrative expense. At December 31, 2015, the Company has not recorded any provisions for accrued interest and penalties related to uncertain tax positions.

 

F- 10  

 

  

The Company files U.S. federal and state income tax returns in jurisdictions with varying statutes of limitations.

 

NOTE 4 – SHAREHOLDERS’ EQUITY (DEFICIENCY)

 

The Company is authorized to issue up to 100,000,000 shares of common stock, $0.0001 par value per share plus 5,000,000 shares of preferred stock, par value $.0001 per share. As of December 31, 2015, there were 13,100,400 shares of common stock issued to the sole shareholder at a price of $.0001 per share for a total of $1,310. The holder is entitled to one vote for each share of common stock. No preferred stock has been issued.

 

NOTE 5– SUBSEQUENT EVENTS

 

The Company has evaluated subsequent events through the date that the financial statements were issued.

 

Effective May 1, 2016, the Company entered into a Research Agreement with the University of Central Florida for the development of a prototype surgical robotic device supporting minimal invasive surgical facial corrections.

 

The Agreement provides that the University will provide personnel to accomplish the objectives as stated in the Statement of Work over a period extending to April 30, 2017. The Company has agreed to extend funding of $163,307 from AVRA’s existing funds.

 

In addition, AVRA has paid $43,548 for outright ownership of the University’s Intellectual Property developed under the Research Agreement, which amount is shown as Intellectual Property. Management has assessed the carrying value of the asset and believes there has been no diminution of its value and accordingly, no adjustment is necessary.

 

The total cost to the Company is:

 

Research Expense -funded from existing funds   $ 163,307  
Acquisition of Intellectual Property Rights     43,548  
Total   $ 206,855  

 

As of September 30, 2016, $125,202 has been paid under the Agreement. The balance of the amount owing to the University is due November 1, 2016 ($40,827) and February 1, 2017 ($40, 826). The November 1, 2016 payment is expected to be made in February 2017. Additionally, a grant from the Florida High Tech Corridor Council was approved on July 16, 2016 to the University to supplement the Company’s funding.

 

The agreement further provides for the payment of a 1% royalty to the University in any year when the sales of products using the intellectual property exceeds $20,000,000.

 

F- 11  

 

  

On August 1, 2016, the Company entered into a lease agreement with the University of Central Florida to occupy office and laboratory space in Orlando, Florida. The lease agreement expires July 31, 2017 and provides that the Company pay insurance, maintenance and taxes. Monthly lease expense is $240.

 

On July 1, 2016, the Company entered into a four year Employment Agreement with its Chairman and Chief Executive Officer. The agreement provides for an annual salary of $120,000 per year, increasing to $180,000 per year beginning July 2017. The employee agrees to not receive the compensation through Dec 31 2016 in cash until the Board of Directors deems it prudent to pay some or all of his salary. Further the Agreement provides that the employee will receive a three-year option to purchase 1,000,000 shares of the Company’s common stock at an exercise price of $0.10 per share, and becoming fully vested on August 15, 2016.

 

On August 1, 2016, the Company entered into a one-year Employment Agreement with its Chief Financial Officer. The agreement provides for an annual salary of $108,000 per year. The employee agrees to not receive the compensation through Dec 31 2016 in cash until the Board of Directors deems it prudent to pay some or all of his salary. Further the Agreement provides that the employee will receive a three-year option to purchase 210,000 shares of the Company’s common stock at an exercise price of $0.10 per share, with 70,000 shares becoming fully vested upon each yearly anniversary. The options are to be surrendered and cancelled if the Agreement is terminated.

 

On August 1, 2016, the Company entered into a three-year Employment Agreement with its Vice President of Global Development. The agreement provides for an annual salary of $96,000 per year, increasing to $144,000 per year beginning July, 2017. The employee agrees to not receive the compensation through Dec 31 2016 in cash until the Board of Directors deems it prudent to pay some or all of his salary. Further the Agreement provides that the employee will receive a three-year option to purchase 300,000 shares of the Company’s common stock at an exercise price of $0.10 per share, with 100,000 shares vested on each yearly anniversary.

 

Further, on August 1, 2016, the Company entered into Indemnification Agreements with the Chairman and Chief Executive Officer, the Chief Financial Officer and the Vice President of Global Business Development providing for the Company to indemnify the individuals for all expenses judgments, etc. incurred while serving in various capacities with the Company.

 

On August 1, 2016, the Company approved the AVRA 2016 Omnibus Incentive Plan (the “Plan”). The Plan provides for the granting of options to employees, directors, consultants and advisors to purchase up to 3,000,000 shares of the Company’s common stock. The Board is responsible for administration of the Plan. The Board determines the term of each option, the option exercise price, the number of shares for which each option is granted and the rate at which each option is exercisable. Incentive stock options may be granted to any officer or employee at an exercise price per share of not less than the fair market value per common share on the date of the grant. On August 15, 2016, options were granted to certain participants for the purchase of 1,702,000 shares at an exercise price of $0.10 per share. On October 1, 2016, options were granted to certain individuals for the purchase of 856,000 shares at an exercise price of $0.15 per share. All the options issued to-date expire after five years from the issue date. Except for the option for one million shares issued to the CEO that all vested immediately, all the options issued to-date vest over three years.

 

The Company also has an agreement with legal counsel whereby counsel will receive payment for up to $35,000 of fees in the form of a grant of options at an exercise price of $0.15 per share of common stock on January 1, 2017.

 

F- 12  

 

   

AVRA MEDICAL ROBOTICS, INC.

BALANCE SHEETS

SEPTEMBER 30, 2016 and DECEMBER 31, 2015

( UNAUDITED)

 

    September 30,     December 31,  
    2016     2015  
     (Unaudited)        
ASSETS                
CURRENT ASSETS:                
Cash and cash equivalents   $ 71,795     $ 100  
Cash held in Escrow     216,931          
Other prepaid expenses and deposit     7,184          
 Total Current Assets     295,910       100  
                 
OTHER ASSETS                
Intellectual Property     43,548          
                 
TOTAL ASSETS   $ 339,458     $ 100  
                 
LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)                
CURRENT LIABILITIES:                
Accounts Payable   $ 4,040          
Accrued expenses     46,389          
Due to majority shareholder     4,013       166  
Promissory Notes     480,000          
 Total Current Liabilities     534,442       166  
                 
SHAREHOLDERS' DEFICIT                
Common stock, 100,000,000 shares authorized, $.0001 par value, 19,000,000 and 13,100,400 issued and outstanding, respectively     1,900       1,310  
Subscriptions receivable     (590 )     (1,310 )
      1,310       0  
Preferred stock, 5,000,000 shaes authorized, $.0001 par value, none issued or outstanding     0       0  
Additional paid-in capital     93,914       0  
Accumulated Deficit     (290,208 )     (66 )
 Total Shareholders' Deficit     (194,984 )     (66 )
                 
TOTAL LIABILITIES AND SHAREHOLDERS' DEFICIT   $ 339,458     $ 100  

 

See accompanying Notes to Financial Statements

 

  F- 13  

 

  

AVRA MEDICAL ROBOTICS, INC.

STATEMENTS OF OPERATIONS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2016 AND THE PERIOD

FROM INCEPTION (FEBRUARY 4, 2015) TO SEPTEMBER 30, 2015

UNAUDITED

 

    Nine Months     Period from  
    Ended     Inception (February 4, 2015)  
    September 30, 2016     to September 30, 2015  
             
REVENUES   $ -     $ -  
                 
OPERATING EXPENSES                
 Research and Development     81,654          
 General and Administrative     194,981       34  
 Total Operating Expenses     276,635       34  
                 
OTHER (INCOME) AND EXPENSE                
 Interest earned     (13 )        
 Interest Expense     13,520          
 Total Other Income and Expense     13,507       0  
                 
LOSS BEFORE INCOME TAXES     (290,142 )     (34 )
                 
PROVISION FOR INCOME TAXES     0       0  
                 
NET LOSS   $ (290,142 )   $ (34 )
                 
BASIC AND DILUTED LOSS PER SHARE   $ 0.01       -  
                 
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING BASIC     17,452,811       13,100,400  

 

See accompanying Notes to Financial Statements

 

  F- 14  

 

  

AVRA MEDICAL ROBOTICS, INC.

STATEMENT OF SHAREHOLDERS' EQUITY (DEFICIT)

PERIOD FROM INCEPTION (FEBRUARY 4, 2015) TO SEPTEMBER 30, 2016

UNAUDITED

 

    Common Stock     Subscriptions     Additional     Accumulated     Total Shareholders'  
    Number     Amount     Receivable     Paid-in capital     Deficit     Deficit  
                                     
BALANCE AT INCEPTION (FEBRUARY 4, 2015)                                                
                                                 
Common stock issued     13,100,400     $ 1,310     $ 1,310                       0  
Net loss for the period February 4, 2015 to December 31, 2015                                     (66 )     (66 )
                                                 
BALANCE AT DECEMBER 31, 2015     13,100,400       1,310       1,310               (66 )     (66 )
                                                 
Stock based compensation expense                             93,914               93,914  
Payment of subscription receivable                     (1,310 )                     1,310  
Subscriptions for purchase of Common Stock Issued     5,899,600       590       590                       0  
Net loss for the period January 1, 2016 to September 30 ,2016                                     (290,142 )     (290,142 )
                                                 
BALANCE AT SEPTEMBER 30, 2016     19,000,000     $ 1,900     $ 590     $ 93,914     $ (290,208 )   $ (194,984 )
                                                 

 

See accompanying Notes to Financial Statements

 

  F- 15  

 

  

AVRA MEDICAL ROBOTICS, INC.

STATEMENT OF CASH FLOWS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2016 AND

FROM INCEPTION (FEBRUARY 4, 2015) TO SEPTEMBER 30, 2015

UNAUDITED

 

        From Inception
 (February 4,
 2015) TO
 
    Nine Months Ended
Sepember 30, 2016,
    September 30,
 2015
 
CASH FLOWS FROM OPERATING ACTIVITIES                
Net Loss   $ (290,142 )   $ (34 )
Adjustments to reconcile net loss to net cash (used) provided in operating activities:                
Stock compensation expense     93,914          
Changes in operating assets and liabilities:                
Increase in prepaid expenses     (7,184 )        
Increase in due to majority shareholder     3,847       1,500  
Increase in accounts payable and accrued expenses     50,429          
                 
Net Cash (Used) Provided in Operating Activities     (149,136 )     1,466  
                 
INVESTING ACTIVITIES                
Acquisition of intellectual property     (43,548 )     0  
Net Cash Used in Investing Activities     (43,548 )     0  
                 
FINANCING ACTIVITIES                
Proceeds from issuance of Promissory Notes     580,000          
Repayment of Promissory Note     (100,000 )        
Issuance of common stock for cash     1,310          
Net Cash Provided by Financing Activities     481,310       0  
                 
INCREASE IN CASH AND CASH EQUIVALENTS     288,626       1,466  
                 
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD     100       0  
                 
CASH AND CASH EQUIVALENTS AND CASH HELD IN ESCROW AT END OF PERIOD   $ 288,726     $ 1,466  
                 
SUPPLEMENTAL INFORMATION OF NON-CASH INVESTING AND FINANCING ACTIVITIES                
Cash paid for interest   $ 1,932       0  

 

See accompanying Notes to Financial Statements

 

  F- 16  

 

 

AVRA MEDICAL ROBOTICS, INC.

NOTES TO FINANCIAL STATEMENTS

NINE MONTHS ENDED SEPTEMBER 30, 2016

 

NOTE 1 – ORGANIZATION AND BASIS OF ACCOUNTING

 

AVRA Medical Robotics, Inc. (the “Company” or “AVRA”) was incorporated as AVRA Surgical Microsystems, Inc. in the State of Florida on February 4, 2015. Effective November 5, 2015, the Company’s corporate name was changed to AVRA Medical Robotics, Inc. The Company was established to develop advanced medical surgical devices. The Company is structured to invest in four principal areas –surgical robotic systems, surgical tools, implantable devices and surgical robotic training.

 

The accompanying financial statements are prepared on the basis of accounting principles generally accepted in the United States of America (“GAAP”). The Company is a development-stage enterprise devoting substantial efforts to establishing a new business, financial planning, raising capital, and research into products which may become part of the Company’s product portfolio. The Company has not realized significant sales through September 30, 2016. A development stage company is defined as one in which all efforts are devoted substantially to establishing a new business and, even if planned principal operations have commenced, revenues are insignificant.

 

The accompanying financial statements have been prepared assuming the continuation of the Company as a going concern. The Company has not yet established an ongoing source of revenues sufficient to cover its operating costs and is dependent on debt and equity financing to fund its operations. Management of the Company is making efforts to raise additional funding until a registration statement relating to an equity funding facility is in effect. While management of the Company believes that it will be successful in its capital formation and planned operating activities, there can be no assurance that the Company will be able to raise additional equity capital, or be successful in the development and commercialization of the products it develops or initiates collaboration agreements thereon. The accompanying 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 possible inability of the Company to continue as a going concern.

 

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Cash and Cash Equivalents

 

The Company considers all cash on hand, cash accounts not subject to withdrawal restrictions or penalties, and all highly liquid debt instruments purchased with a maturity of three months or less to be cash and cash equivalents

 

Stock Compensation Expense

 

The Company accounts for equity instruments issued in exchange for the receipt of goods or services from other than employees in accordance with Accounting Standards Codification ("ASC") Topic 505, " Equity. " Costs are measured at the estimated fair market value of the consideration received or the estimated fair value of the equity instruments issued, whichever is more reliably measurable. The value of equity instruments issued for consideration other than employee services is determined on the earlier of a performance commitment or completion of performance by the provider of goods or services as defined by ASC Topic 505. See Note 5.

 

  F- 17  

 

 

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

 

Income Taxes

 

The Company accounts for income taxes pursuant to ASC Topic 740 " Income Taxes. " Under ASC Topic 740, deferred tax assets and liabilities are determined based on temporary differences between the bases of certain assets and liabilities for income tax and financial reporting purposes. The deferred tax assets and liabilities are classified according to the consolidated financial statement classification of the assets and liabilities generating the differences. A valuation allowance is recorded when it is more likely than not that some or all of the deferred tax assets will not be realized.

 

The Company applies the provisions of ASC Topic 740-10-05 " Accounting for Uncertainty in Income Taxes ." The ASC clarifies the accounting for uncertainty in income taxes recognized in an enterprise's financial statements. The ASC prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. The ASC provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosure and transition.

 

Estimates

 

The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities and expenses. The Company regularly evaluates estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates made by management.

 

Concentration of Credit Risk

 

The Company maintains its cash and cash equivalents in financial institutions in the United States which at times may exceed insurance limits. The Company has not experienced any losses on such accounts.

 

Basic and Diluted Loss per Share

 

In accordance with ASC Topic 260 " Earnings Per Share, " basic loss per common share is computed by dividing net loss available to common stockholders by the weighted average number of common shares outstanding during the period. Diluted loss per common share gives effect to dilutive convertible securities, options, warrants and other potential common stock outstanding during the period, only in periods in which such effect is dilutive. The Company only has stock options that may be converted to outstanding potential common shares.

 

  F- 18  

 

 

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

 

Revenue Recognition

 

The Company recognizes revenue when all of the following criteria are met: (1) the Company has evidence of an arrangement with a customer; (2) the Company delivers the specified services; (3) terms are fixed or determinable; and (4) collection is probable.

 

Property and Equipment

 

Property and equipment are recorded at cost and depreciated using the straight-line method at rates determined to estimate the useful lives of the assets. The annual rates used in calculating depreciation is as follows:

 

Equipment -5 years straight-line

 

Long-lived Assets

 

In accordance with ASC 360, “ Property Plant and Equipment ”, the Company tests long-lived assets or asset groups for recoverability when events or changes in circumstances indicate that their carrying amount may not be recoverable. Circumstances which could trigger a review include, but are not limited to : significant decreases in the market price of the asset; significant adverse changes in the business climate or legal factors; accumulation of costs significantly in excess of the amount originally expected for the acquisition or construction of the asset; current cash flow or operating losses combined with a history of losses or a forecast of continuing losses associated with the use of the asset and current expectation that the asset will more than likely not be sold or disposed significantly before the end of its estimated useful life. Recoverability is assessed based on the carrying amount of the asset and its fair value which is generally determined based on the sum of the discounted cash flows expected to result from the use and the eventual disposal of the asset, as well as specific appraisal in certain circumstances. An impairment loss is recognized when the carrying amount is not recoverable and exceeds fair value.

 

Fair Value of Financial Instruments

 

Our financial instruments consist principally of accounts receivable, amounts due to related parties and promissory notes payable.

 

ASC 820 Fair Value Measurements and Disclosures and ASC 825, Financial Instruments establish a framework for measuring fair value, establishes a fair value hierarchy based on the quality of the inputs used to measure fair value, and enhances disclosure requirements for fair value measurements.

 

  F- 19  

 

 

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

 

Fair Value Hierarchy

The Company has categorized its financial statements, based on the priority of inputs to the valuation technique, into a three-tier fair value hierarchy. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest level priority to unobservable inputs (Level 3).

 

Financial assets and liabilities recorded on the balance sheet are categorized based on inputs to the valuation techniques as follows:

 

Level 1 Financial assets and liabilities for which values are based on unadjusted quoted prices for identical assets or liabilities in an active market that management has the ability to access.
Level 2 Financial assets and liabilities for which values are based on quoted prices in markets that are not active or model inputs that are observable either directly or indirectly for substantially the full term of the asset or liability (commodity derivatives and interest rate swaps).
Level 3 Financial assets and liabilities for which values are based on prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement. These inputs reflect management’s own assumptions about the assumptions a market participant would use in pricing the asset or liability.

 

When the inputs used to measure fair value fall within different levels of the hierarchy, the level within which the fair value measurement is categorized is based on the lowest level input that is significant to the fair value measurement in its entirety.

 

The carrying amounts of cash and cash equivalents and promissory notes approximate fair value because of the short-term nature of these items.

 

NOTE 3– Research collaboration agreement

 

Effective May 1, 2016, the Company entered into a Research Agreement with the University of Central Florida for the development of a prototype surgical robotic device supporting minimal invasive surgical facial corrections.

 

The Agreement provides that the University will provide personnel to accomplish the objectives as stated in the Statement of Work over a period extending to April 30, 2017. The Company has agreed to extend funding of $163,307 from AVRA’s existing funds.

 

In addition, AVRA has paid $43,548 for outright ownership of the University’s Intellectual Property resulting from the collaboration, which amount is shown as Intellectual Property. Management has assessed the carrying value of the asset and believes there has been no diminution of its value and accordingly, no adjustment is necessary.

 

  F- 20  

 

 

NOTE 3– Research collaboration agreement (continued)

 

The total cost to the Company is:

 

Research Expense -funded from existing funds   $ 163,307  
Acquisition of Intellectual Property Rights     43,548  
Total   $ 206,855  

 

As of September 30, 2016, $125,202 has been paid under the Agreement. The balance of the amount owing to the University is due November 1, 2016 ($40,827) and February 1, 2017 ($40, 826). The November 1, 2016 payment is expected to be made in February 2017. Additionally, a $68,952 matching funds grant from the Florida High Tech Corridor Council (FHTCC) was approved on July 16, 2016 which will provide the University research funds in addition to the Company’s funding obligation to the University. The FHTCC research grant is subject to certain research obligations and action requirements which if not met may result in the loss of the FHTCC research funding which would require the Company to cover any resulting shortfall.

 

The agreement further provides for the payment of a 1% royalty to the University in any year when the sales of products using the intellectual property exceeds $20,000,000.

 

NOTE 4 – PROMISSORY NOTES

 

During the nine months ended September 30, 2016, the Company borrowed $480,000 under 7.5% Convertible Promissory Note Agreements. The Notes are due June 30, 2017 and bear interest at 7.5%. The notes are convertible into common stock of the Company at $.50 per share in the event of a voluntary conversion on or before an optional prepayment or the maturity date, or (1) the lower of $.50 or (2) a 20% discount to the effective price per share offering price in the event of a mandatory conversion upon consummation of a “Qualified Financing”, as defined. The Company has pledged all assets as security for the notes. In the event of default, the notes will bear interest at 12% per annum.

 

Further, the Company borrowed $100,000 from an individual on May 16, 2016 under a note bearing interest at 5%. The note, along with accrued interest, was repaid on September 30, 2016.

 

NOTE 5– INCOME TAXES

 

The Company’s deferred tax assets at September 30, 2016 and December 31, 2015 consist of net operating loss carry forwards of $250,584 and $66, respectively. Using a federal statutory tax rate of 35%, the valuation allowance balance as of September 30, 2016 and December 31, 2015 total $87,704 and $17, respectively. The increase in the valuation allowance balance for the nine months ended September 30, 2016 of $87,687 is entirely attributable to the net operating loss.

 

Due to the uncertainty of their realization, no income tax benefits have been recorded by the Company for these loss carry forwards as valuation allowances have been established for any such benefits. The increase in the valuation allowance was the result of increases in the net operating losses discussed above. Therefore, the Company’s provision for income taxes is $0 for the nine months ended September 30, 2016 and the period ended December 31, 2015.

 

  F- 21  

 

 

At September 30, 2016 the Company had no material unrecognized tax benefits and no adjustments to liabilities or operations were required. The Company does not expect that its unrecognized tax benefits will materially increase within the next twelve months. The Company recognizes interest and penalties related to uncertain tax positions in general and administrative expense. At September 30, 2016 the Company has not recorded any provisions for accrued interest and penalties related to uncertain tax positions.

 

The Company files U.S. federal and state income tax returns in jurisdictions with varying statutes of limitations.

 

NOTE 6– SHAREHOLDERS’ DEFICIT

 

The Company is authorized to issue up to 100,000,000 shares of common stock, $0.0001 par value per share plus 5,000,000 shares of preferred stock, par value $.0001. For the period ended December 31, 2015, 13,100,400 shares were issued to the majority shareholder at a price of $.0001 per share (total $1,310) and was paid in 2016. On February 1, 2016 subscriptions were issued for an additional 5,899,600 shares of common stock at $.0001 per share (total $590). At September 30, 2016, $1,900 has been recorded as common stock with the balance of $590 as subscriptions receivable. Holders are entitled to one vote for each share of common stock. No preferred stock has been issued.

 

NOTE 7 –EQUITY INCENTIVE PLAN

 

On August 1, 2016, the Company approved the AVRA 2016 Omnibus Incentive Plan (the “Plan”). The Plan provides for the granting of options to employees, directors, consultants and advisors to purchase up to 3,000,000 shares of the Company’s common stock. The Board is responsible for administration of the Plan. The Board determines the term of each option, the option exercise price, the number of shares for which each option is granted and the rate at which each option is exercisable. Incentive stock options may be granted to any officer or employee at an exercise price per share of not less than the fair market value per common share on the date of the grant.

 

On August 15, 2016, three-year options were granted to certain participants for the purchase of 1,702,000 shares at an exercise price of $.10 per share.

 

At September 30, 2016 options representing 1,039,585 were vested or exercisable.

 

No options were exercised or forfeited during the nine months ended September 30, 2016.

 

Stock options are accounted for in accordance with FASB ASC Topic 718, Compensation –Stock Compensation , with option expense amortized over the vesting period based on the Black-Scholes option-pricing model fair value on the grant date, which includes a number of estimates that affect the amount of expense. During the nine months ended September 30, 2016, $93,914 has been recorded as stock-based compensation and classified in General and Administrative expense in the Income Statement. The total amount of unrecognized compensation cost related to non-vested options was $58,293 as of September 30, 2016. This amount will be recognized over a weighted average period of 3 years.

 

  F- 22  

 

 

The grant date fair value of options granted during the nine months of 2016 were estimated on the grant date using the Black-Scholes model with the following assumptions: expected volatility of 181%, expected term of 2.9 years, risk-free interest rate of 2.0% and expected dividend yield of 0%.

 

Expected volatility is based on the average of the historical volatility of the stock prices of a blend of five publicly traded companies operating in a similar industry as that of the Company. The risk-free rate is based on the rate of U.S Treasury zero-coupon issues with a remaining term equal to the expected life of the options. The Company uses historical data to estimate pre-vesting for feature rates.

 

NOTE 8- EMPLOYMENT AGREEMENTS

 

On July 1, 2016, the Company entered into a four year Employment Agreement with its Chairman and Chief Executive Officer. The agreement provides for an annual salary of $120,000 per year, increasing to $180,000 per year beginning July 2017. The employee agrees to not receive the compensation in cash until the Board of Directors deems it prudent to pay some or all of his salary. Further the Agreement provides that the employee will receive a three-year option to purchase 1,000,000 shares of the Company’s common stock at an exercise price of $0.10 per share, and becoming fully vested on August 15, 2016.

 

On August 1, 2016, the Company entered into a one-year Employment Agreement with its Chief Financial Officer. The agreement provides for an annual salary of $108,000 per year. The employee agrees to not receive the compensation in cash until the Board of Directors deems it prudent to pay some or all of his salary. Further the Agreement provides that the employee will receive a three-year option to purchase 210,000 shares of the Company’s common stock at an exercise price of $.10 per share, with 70,000 shares becoming fully vested upon each yearly anniversary. The options are to be surrendered and cancelled if the Agreement is terminated.

 

On August 1, 2016, the Company entered into a three-year Employment Agreement with its Vice President of Global Development. The agreement provides for an annual salary of $96,000 per year, increasing to $144,000 per year beginning July, 2017. The employee agrees to not receive the compensation in cash until the Board of Directors deems it prudent to pay some or all of his salary. Further the Agreement provides that the employee will receive a three-year option to purchase 300,000 shares of the Company’s common stock at an exercise price of $0.10 per share, with 100,000 shares vested on each yearly anniversary.

 

Further, on August 1, 2016, the Company entered into Indemnification Agreements with the Chairman and Chief Executive Officer, the Chief Financial Officer and the Vice-President of Global Business Development providing for the Company to indemnify the individuals for all expenses judgments, etc. incurred while serving in various capacities with the Company.

 

NOTE 9 – EARNINGS PER SHARE

 

Basic earnings per share (“basic EPS”) is computed by dividing the net income or loss by the weighted average number of common shares outstanding for the reporting period. Diluted earnings per share (“diluted EPS”) gives effect to all dilutive potential shares outstanding. For the nine months ended September 30, 2016 the potential conversion of the Promissory Notes into common stock was excluded from the computation of fully-diluted loss per share as the effect was anti-dilutive. Further, the potential exercise of stock options has been excluded from the computation of loss per share has been excluded as the effect was anti-dilutive.

 

  F- 23  

 

 

NOTE 10– LEASE COMMITMENT

 

The Company occupies office and laboratory space in Orlando, Florida under a lease agreement expiring July 31, 2017. The agreement provides that the Company pay insurance, maintenance and taxes. Monthly lease expense is $240.

 

NOTE 11– SUBSEQUENT EVENTS

 

The Company has evaluated subsequent events through the date that the financial statements were issued. On October 1, 2016, options were granted to certain participants for the purchase of 856,000 shares at an exercise price of $0.15 per share. All the options issued to-date expire after five years from the issue date. Except for the option for one million shares issued to the CEO that all vested immediately, all the options issued to-date vest over three years.

 

The Company also has an agreement with legal counsel whereby counsel will receive payment for $35,000 in fees in the form of a grant of options at an exercise price of $0.15 per share of common stock on January 1, 2017.

 

  F- 24  

 

 

PART II

 

INFORMATION NOT REQUIRED IN THE PROSPECTUS

 

ITEM 13.  OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION

 

Registration Fees   $ 1,996.35  
Transfer Agent Fees   $ *  
Accounting Fees and Expenses   $ *  
Legal Fees and Expenses   $ *  
Miscellaneous Fees and Expenses   $ *  
Total   $ *  

 

*To be filed by amendment.

 

All amounts are estimates other than the SEC’s registration fee.  We are paying all expenses of the offering listed above.  No portion of these expenses will be borne by the selling shareholders.  The selling shareholders, however, will pay any other expenses incurred in selling their common stock, including any brokerage commissions or costs of sale.

 

ITEM 14.  INDEMNIFICATION OF DIRECTORS AND OFFICERS

 

Our Amended and Restated Articles of Incorporation, bylaws, employment agreements and non-employee director appointment letters provide for indemnification of our officers and directors to the fullest extent permitted by the Florida Business Corporation Act.

 

ITEM 15.  RECENT SALES OF UNREGISTERED SECURITIES

 

During the past two years, we effected the following transactions in reliance upon exemptions from registration under the Securities Act, as amended:

 

(a)       On February 4, 2015, we issued 13,100,400 shares of our common stock to our founder and Chief Executive Officer for par value, a purchase price of $1,310.

 

(b)       Effective February 1, 2016, we sold an aggregate of 5,899,600 shares to our founders, initial shareholders and initial investors in a private offering for aggregate consideration of $590.

 

(c)       From April to August, 2016, we sold $480,000 in principal amount of our 7.5% Convertible Promissory Notes due June 30, 2017 (the “ Convertible Notes ”) to 12 investors in a private offering. The Convertible Notes are convertible into shares of our common stock at $0.50 per share at the option of the holder at any time prior to maturity and will automatically convert into shares of common stock upon completion of a private or public offering which generates at least $500,000 in proceeds to the Company at a conversion price equal to the lower of $0.50 per share or a 20% discount the per share price of shares sold such subsequent offering.

 

(d)       In February 2017, we sold 135,000 shares of our common stock for an aggregate of $135,000 or $1.00 per share to three investors in a private offering.

 

All of the foregoing securities were issued in accordance with the exemption from registration afforded by Section 4(a) (2) of and Regulation D promulgated under the Securities Act, as amended, as the persons receiving such shares having provided the Company with appropriate representations as to their investment intent and their status as “ accredited investors ” as defined in Rule 501(a) of Regulation D promulgated under the Securities Act.

 

  II- 1  

 

 

ITEM 16.  EXHIBITS

 

Exhibit

Number

  Description
     
3.1(i)   Amended and Restated Articles of Incorporation*
     
3.2   By-Laws*
     
5.1   Opinion of Gutierrez Bergman Boulris, P.L.L.C.**
     
10.1   2016 Stock Incentive Plan* (1)
     
10.2   Research Agreement with the University of Central Florida*
     
10.3   Employment Agreement with Barry F. Cohen* (1)
     
10.4   Employment Agreement with A. Christian Schauer* (1)
     
10.5   Employment Agreement with Alexandre S. Clug* (1)
     
10.6   Form of Director Appointment Agreement* (1)
     
10.7   Code of Ethical Conduct *
     
23.1   Consent of De Leon & Company, P.A.*
     
23.2   Consent of Gutierrez Bergman Boulris, P.L.L.C. (Included in Exhibit 5.1)**
     
24    Power of Attorney (included in signature page to this registration statement) 

 

 

*Filed herewith.

**To be filed by amendment.

(1) Management compensation plan or arrangement.

 

ITEM 17.  UNDERTAKINGS

 

The undersigned registrant hereby undertakes:

 

1.            To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement;

 

(a)           to include any prospectus required by Section 10(a) (3) of the Securities Act of 1933;

 

(b)           to reflect in the prospectus any facts or events which, individually or together, represent a fundamental change in the information in the registration statement; and 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 prospects filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in the volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement.; and

 

(c)           to include any material information with respect to the plan of distribution not previously disclosed in this registration statement or any material change to such information in the registration statement.

 

  II- 2  

 

 

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 relating to the securities offered herein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

 

3.            To remove from registration by means of a post-effective amendment any of the securities being registered hereby 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 our directors, officers and controlling persons pursuant to the provisions above, or otherwise, we been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act of 1933, and is, therefore, unenforceable.  In the event that a claim for indemnification against such liabilities, other than the payment by us of expenses incurred or paid by one of our directors, officers, or controlling persons in the successful defense of any action, suit or proceeding, is asserted by one of our directors, officers, or controlling persons in connection with the securities being registered, we 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 is against public policy as expressed in the Securities Act of 1933, and we will be governed by the final adjudication of such issue.

 

Each prospectus filed pursuant to Rule 424(b) as part of a registration statement relating to an offering, other than registration statements relying on Rule 430B of the Securities Act or other than prospectuses filed in reliance on Rule 430A of the Securities Act, shall be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness,  provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such date of first use.

 

  II- 3  

 

 

SIGNATURES

 

In accordance with the requirements of the Securities Act of 1933, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-1 and authorized this registration statement to be signed on its behalf by the undersigned, in Orlando, Florida, on February 14, 2017.

 

  AVRA MEDICAL ROBOTICS, INC.
     
  By:  /s/  Barry F. Cohen
    Barry F. Cohen, Chief Executive Officer
    (Principal Executive Officer)
     
   By:  /s/ A. Christian Schauer
    A. Christian Schauer, Chief Financial Officer
    (Principal Financial and Accounting Officer)

 

POWER OF ATTORNEY

 

KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Barry F. Cohen and A. Christian Schauer and each of them, as a true and lawful attorney-in-fact and agent, with full power of substitution and re-substitution, for each of them and in each name, place and stead, in any and all capacities, to sign any and all pre- or post-effective amendments to this registration statement, and to file the same with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorney-in-fact and agent, full power and authority to do and perform each and every act and thing requisite or necessary to be done in and about the premises, as fully to all intents and purposes as each might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agent or his substitute, may lawfully do or cause to be done by virtue hereof.  In accordance with the requirements of the Securities Act of 1933, as amended, this registration statement was signed by the following person in the capacities and on the dates stated.

 

Signatures   Title(s)   Date
         
By:  /s/  Barry F. Cohen   Chief Executive Officer and Director   February 14, 2017
  Barry F. Cohen   (Principal Executive Officer)    
           
By: /s/  A. Christian Schauer   Chief Financial Officer   February 14, 2017
  A. Christian Schauer   (Principal Financial and Accounting Officer)    
           
By: /s/  Peter Carnegie   Director   February 14, 2017
  Peter Carnegie        
           
By: /s/ Nikhil L. Shah   Director   February 14, 2017
  Nikhil L. Shah, D.O.        

 

  II- 4  

 

 

Exhibit 3.1(i)

 

AMENDED AND RESTATED

ARTICLES OF INCORPORATION

OF

AVRA SURGICAL MICROSYSTEMS, INC.

 

The Articles of Incorporation of AVRA SURGICAL MICROSYSTEMS, INC. (the “ Corporation ”), originally filed with the Florida Secretary of State on February 4, 2015, are hereby amended and restated in their entirety under the Florida Business Corporation Act (“FCBA”) as follows:

 

ARTICLE I. NAME

 

The name of the Corporation is AVRA MEDICAL ROBOTICS, INC.

 

ARTICLE II. MAILING ADDRESS

 

The address of the Corporation’s principal office and the mailing address is 1600 SE 15 th Street, #512, Fort Lauderdale, Florida 33316. The Board of Directors of the Corporation may, from time to time, change the address of the Corporation.

 

ARTICLE III. DURATION AND COMMENCEMENT OF EXISTENCE

 

The Corporation shall exist perpetually. The existence of the Corporation will commence on the date of filing of these Articles of Incorporation with the Secretary of the State.

 

ARTICLE IV. PURPOSE

 

The Corporation is organized to engage in any activity or business permitted under the laws of the United States and Florida.

 

ARTICLE V. CAPITAL STOCK

 

The aggregate number of shares of all classes of capital stock which this Corporation shall have authority to issue is one hundred five million (105,000,000), consisting of (i) one hundred million (100,000,000) shares of common stock, par value $.0001 (the " Common Stock ”), and (ii) five million (5,000,000) shares of preferred stock, par value $.0001 (the " Preferred Stock ").

 

The designations preferences, qualifications, limitations, rights and restrictions of the Preferred Stock and the Common Stock are as follows:

 

A.             PROVISIONS RELATING TO THE PREFERRED STOCK :

 

1.             The Preferred Stock may be issued from time to time in one or more classes or series, the shares of each class or series to have such designations, preferences, qualifications, limitations, rights and restrictions as are stated and expressed in these Articles of Incorporation and in the resolution or resolutions providing for the issuance of such class or series adopted by the Board of Directors are prescribed below.

 

1     Page
 
 

 

2.            Authority is hereby expressly granted to and vested in the Board of Directors to authorize the issuance of the Preferred Stock from time to time in one or more classes or series, to determine and take necessary proceedings fully to effect the issuance and redemption of any such Preferred Stock, and, with respect to each class or series of Preferred Stock, to fix and state by the resolution or resolutions from time to time adopted providing for the issuance of the class or series the following:

 

(a)        Whether or not the class or series is to have voting rights, full or limited, or is to be without voting rights;

 

(b)        The number of shares to constitute the class or series and the designations of the class or series;

 

(c)        the preferences and relative, participating, optional or other special rights, if any, and the qualifications, limitations or restrictions, if any, with respect to any class or series;

 

(d)        Whether or not the shares of any class or series shall be redeemable and if redeemable, the redemption price or prices, and the time or times at which the terms and conditions upon which such shares shall be redeemable and the manner of redemption;

 

(e)         whether or not the shares of a class or series shall be subject to the operation of retirement or sinking funds to be applied to the purchase or redemption of such shares for retirement, and if such retirement or sinking fund or funds shall be established, the annual amount thereof and the terms and provisions relative to the operation thereof;

 

(f)         the dividend rate, if any, whether any such dividends are payable in cash, stock of the Corporation or other property, the conditions upon which and the times when any such dividends are payable, the preference to or the relation to the payment of the dividends payable on any other class or series of stock, whether or not such dividends shall be cumulative or non-cumulative, and if cumulative, the date or dates from which such dividends shall accumulate;

 

(g)        The preferences, if any, and the amounts which the holders of any class or series shall be entitled to receive upon the voluntary or involuntary dissolution of or upon any distribution of the assets of the Corporation;

 

(h)        whether or not the shares of any class or series shall be convertible into, or exchangeable for, the shares of any other class or classes or of any other series of the same or any other class or classes of stock of the Corporation and the conversion price, ratio or rate at which such conversion or exchange may be made, with such adjustments, if any, as shall be stated and expressed or provided for in such resolution or resolutions; and

 

(i)          Such other special rights and protective provisions with respect to any class or series as the Board of Directors may deem advisable and in the best interest of the Corporation.

 

  2  
 

 

The shares of each class or series of Preferred Stock may vary from the shares of any other class or series in any or all of the foregoing respects. The Board of Directors may increase the number of shares of Preferred Stock designated for any existing class or series by a resolution adding to such class or series authorized and unissued shares of Preferred Stock not designated for any other class or series. The Board of Directors may decrease the number of shares of Preferred Stock designated for any class or series by a resolution, subtracting from such series unissued shares of Preferred Stock designated for such class or series, and the shares so subtracted shall become authorized, unissued and undesignated shares of Preferred Stock.

 

B.             PROVISIONS RELATED TO THE COMMON STOCK :

 

1.            Except as otherwise required by law or as may be provided by the resolutions of the Board of Directors authorizing the issuance of any class or series of Preferred Stock, as provided above, all rights to vote and all voting power shall be vested exclusively in the holders of Common Stock.

 

2.            Subject to the rights of the holders of the Preferred Stock, the holders of Common Stock shall be entitled to receive when, as and if declared by the Board of Directors, out of funds legally available for such purpose, dividends payable in cash, stock or otherwise.

 

3.             Upon any liquidation, dissolution or winding-up of the Corporation, whether voluntary or involuntary, and after the holders of the Preferred Stock shall have been paid in full the amounts to which they shall be entitled (if any) or a sum sufficient for such payment in full shall have been set aside, the remaining net assets of the Corporation shall be distributed pro rata to the holders of the Common Stock in accordance with their respective rights and interests to the exclusion of the holders of the Preferred Stock.

 

C.             GENERAL PROVISIONS:

 

1.             Except as may be provided by the resolutions of the Board of Directors authorizing the issuance of any class or series of Preferred Stock, as provided above, cumulative voting by any shareholder is hereby expressly denied.

 

2.             No shareholder of this Corporation shall have, by reason of its holding shares of any class or series of stock of the Corporation, any preemptive or preferential rights to purchase or subscribe for any other shares of any class or series of this Corporation now or hereafter authorized and any other equity securities, or any notes, debentures, warrants, bonds, or other securities convertible into, or options or warrants to purchase shares of, any class or series, now or hereafter authorized, whether or not the issuance of any such shares, or such notes, debentures, bonds or other securities, would adversely affect the dividend or voting rights of such shareholder.

 

ARTICLE VI. REGISTERED OFFICE AND AGENT

 

The street address of the registered office of the Corporation is 1600 SE 15 th Street, # 512, Fort Lauderdale, Florida 33316. The Corporation's registered agent at that address is Barry F. Cohen.

 

ARTICLE VII. INCORPORATOR

 

The name and street address of the Incorporator is Barry F. Cohen, 1600 SE 15 th Street, Fort Lauderdale, Florida 33316.

 

  3  
 

 

ARTICLE VII. SHAREHOLDERS’ MEETINGS

 

The Corporation shall hold a special meeting of shareholders only:

 

A.            on call of the Board of Directors or persons authorized to do so by the Corporation's Bylaws; or

 

B.             if the holders of not less than fifty percent (50%) of all votes entitled to be cast on any issue proposed to be considered at the proposed special meeting sign, date, and deliver to the Corporation's secretary one or more written demands for the meeting describing the purpose or purposes for which it is to be held.

 

ARTICLE IX. LIMITATION ON DIRECTOR LIABILITY

 

A director shall not be personally liable to the Corporation or the holders of shares of capital stock for monetary damages for breach of fiduciary duty as a director, except (i) for any breach of the duty of loyalty of such director to the Corporation or such holders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation or law, (iii) under Section 607.0831 of the FBCA, or (iv) for any transaction from which such director derives an improper personal benefit. If the FBCA is hereafter amended to authorize the further or broader elimination or limitation of the personal liability of directors, then the liability of a director of the Corporation shall be eliminated or limited to the fullest extent permitted by the FBCA, as so amended. No repeal or modification of this Article IX shall adversely affect any right of or protection afforded to a director of the Corporation existing immediately prior to such repeal or modification.

 

ARTICLE X. INDEMNIFICATION

 

The Corporation shall indemnify, to the fullest extent permitted by law, as now or hereafter in effect, the Incorporator, and any officer or director of the Corporation. Without limiting the generality of the foregoing, the Bylaws may provide for indemnification of the officers, directors, employees and agents on such terms and conditions as the Board of Directors may from time to time deem appropriate or advisable.

 

ARTICLE XI. BOARD OF DIRECTORS

 

The Corporation shall have no less than one (1) or more than fifteen (15) Directors. The number of Directors may be altered from time to time on accordance with the Corporation’s Bylaws.

 

ARTICLE XII. BYLAWS

 

The power to adopt, alter, amend or repeal the Bylaws shall be vested in the Board of Directors and the shareholders, except that the Board of Directors may not amend or repeal any bylaw adopted by the shareholders if the shareholders specifically provide that the bylaw is not subject to amendment or repeal by the Directors.

 

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ARTICLE XIII. AMENDMENTS

 

The Corporation reserves the right to amend, alter, change, or repeal any provision in these Articles of Incorporation in the manner prescribed by law, and all rights conferred on shareholders are subject to this reservation.

 

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As of the date of filing these Amended and Restated Articles of Incorporation, there are no shareholders and shareholder approval is not required to effectuate such filing. I submit this document and affirm that the facts stated herein are true. I am aware that false information submitted in a document to the Department of State constitutes a third degree felony as provided for in s. 817.155 F.S.

 

Effective Date:  November 5, 2015 .    
  Barry F. Cohen, Incorporator

 

* * * * *

 

ACCEPTANCE OF REGISTERED AGENT

 

The undersigned agrees to act as registered agent for AVRA MEDICAL ROBOTICS, INC. to accept service of process at the place designated in these Amended and Restated Articles of Incorporation, and to comply with the provisions of Chapter 607, Florida Statutes, and acknowledges that the undersigned is familiar with, and accepts, the obligations of such position on this 2nd day of November, 2015.

 

   
  Barry F. Cohen

 

  5  

 

 

Exhibit 3.2

 

BYLAWS

OF

AVRA MEDICAL ROBOTICS, INC.

 

ARTICLE I

 

NAME AND OFFICES

 

1.           Name .           The name of the Corporation is Avra Medical Robotics, Inc. (the “ Corporation ”).

 

2.           Office .           The principal office of the Corporation is to be located at such place, either within or without the State of Florida, as the Board of Directors (the “ Board ”) shall designate from time to time. Offices may also be kept at such other places as the Board may from time to time determine or the business of the Corporation may require.

 

3.           Registered Office and Agent .           The Corporation shall have and continuously maintain a registered office and a registered agent within the State of Florida. The Board, from time to time by resolution, may change the registered agent and the address of the registered office.

 

ARTICLE II

 

SHAREHOLDERS' MEETINGS

 

1.           Place .           All meetings of the shareholders shall be held at the principal office of the Corporation, or at such other places within or without the State of Florida as the Board of the Corporation may designate in the notice of the meeting.

 

2.           Annual Meetings .           An annual meeting of the shareholders for the election of Directors and the transaction of such other business as may properly come before the meeting shall be held on such date as may be specified by the Board or on their failure to do so, on the last Monday in February of each year. If that day is a Saturday, Sunday or legal holiday in the State of Florida, then the annual meeting shall be held on the next business day thereafter. The failure to hold the annual meeting at the time fixed in this Section 2 shall not affect the validity of any corporate action and shall not work a forfeiture or dissolution of the Corporation.

 

3.           Special Meetings .           Special meetings of the shareholders shall be held whenever called by the Secretary upon request of the President or a majority of the Board, or if the holders of at least fifty percent (50%) of the issued and outstanding shares of common stock entitled to vote at such meeting on any issue proposed to be considered at such meeting sign, date, and deliver to the Secretary a written demand for the meeting describing the purpose or purposes for which it is to be held.

 

4.           Notice of Meetings .           Written notice stating the place, date, and time of the meeting and, in the case of a special meeting, the purpose or purposes for which the meeting is called, shall be delivered to each shareholder of record entitled to vote at such meeting not less than ten (10) nor more than sixty (60) days before the date of the meeting, by or at the direction of the President, the Secretary, or the officer or persons calling the meeting. If the notice is mailed at least thirty (30) days before the date of the meeting, it may be done by a class of United States mail other than first class.

 

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5.         Waiver of Notice .           Notice of any shareholders meeting may be waived, in writing, by any shareholder, either before or after the time stated therein and, if any shareholder entitled to note is present at a shareholders meeting and does not object, prior to or at the commencement of the meeting, to the transaction of any business because the meeting is not lawfully called or convened, such shareholder shall be deemed to have waived notice of such meeting. Neither the business to be transacted at, nor the purpose of, any such regular or special meeting of the shareholders need be specified in any written waiver of notice.

 

6.           Notice of Adjourned Meeting .                When a meeting is adjourned to another date, time, or place, it shall not be necessary to give any notice of the adjourned meeting if the new date, time, or place is announced at the meeting at which the adjournment is taken. At the adjourned meeting, any business may be transacted that might have been transacted on the original date of the meeting. If the Board fixes a new record date for the adjourned meeting, however, notice of the adjourned meeting shall be given as provided in Article VIII of these Bylaws to each shareholder of record on the new record date who is entitled to vote at such meeting.

 

7.           List of Voters .                The officer having charge of the stock transfer books of the Corporation shall make, at least ten (10) days before each meeting of shareholders, a complete alphabetical list of the shareholders entitled to vote at such meeting or any adjournment thereof, with the address, and the number of shares held by each. Such list shall be kept available for inspection by any shareholder at the principal office of the Corporation, at a place identified in the meeting notice in the city where the meeting will be held, or at the office of the transfer agent or registrar of the Corporation for a period of ten (10) days prior to such a meeting or such shorter time as exists between the record date and the meeting and shall be subject to inspection by any shareholder at any time during usual business hours and at his expense. Such list shall also be produced and kept open at the meeting and shall be subject to the inspection of any shareholder at any time during the meeting. The shareholders' list shall be prima facie evidence of the identity of the shareholders entitled to examine such list or to vote at any meeting of shareholders. Refusal or failure to comply with the requirements of this Section 7 shall not affect the validity of any action taken at such meeting.

 

8.           Fixing of Record Date .                The Board may fix in advance a date as the " record date " not more than seventy (70) days prior to the meeting date for the determination of shareholders entitled to notice of, or to vote at, any meeting of shareholders or any adjournment thereof. If no record date is fixed for the determination of shareholders entitled to notice or to vote at a meeting of shareholders, then the date on which notice of the meeting is mailed shall be the record date for the determination of shareholders. When a determination of shareholders who are entitled to vote at any meeting of shareholders has been made as provided in this Section 8 , the determination shall apply to any adjournment, unless the Board fixes a new record date for the adjourned meeting, which it must do if the meeting is adjourned to a date more than one hundred twenty (120) days after the date fixed for the original meeting.

 

9.           Quorum .           The presence in person or by proxy of a majority of the shares of the Corporation which are entitled to vote at the meeting shall constitute a quorum for the transaction of business. In the absence of a quorum, a majority of the shares so present may adjourn the meeting from time to time. Once a share is represented for any purpose at a meeting, it is deemed present for quorum purposes for the remainder of the meeting and any adjournment thereof, unless a new record date is set for that adjourned meeting.

 

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10.          Voting of Shares .           At every meeting of the shareholders of the Corporation, each shareholder owning one or more shares of stock on the record date as established in Section 7 of this Article II shall be entitled to one vote in person or by proxy for each share of stock having voting power held by him, unless the Articles of Incorporation or the Florida Business Corporation Act (the “ FBCA ”) provides for more or less than one vote for any share on any matter. All matters, other than the election of Directors, coming before any meeting of the shareholders at which a quorum is present shall be approved if the votes cast by the holders of the shares represented at the meeting and entitled to vote thereon exceed the votes cast opposing the action, unless the vote of a greater number is required by the FBCA. Directors will be elected by a plurality of the votes cast by the shares entitled to vote in the election at a meeting at which a quorum is present.

 

11.          Proxies .           A shareholder may vote either in person or by proxy executed in writing by the shareholder, his duly authorized attorney-in-fact or other person authorized to vote on behalf of the shareholder under the FBCA. Such proxy shall be filed with the Secretary of the Corporation before or at the time of any meeting. No proxy shall be valid after the duration of eleven months from the date thereof unless otherwise provided in the proxy. Every proxy shall be revocable at the pleasure of the shareholder executing it, except as otherwise provided by the FBCA.

 

12.          Action by Shareholders Without a Meeting .           Any action required or permitted by the FBCA, the Articles of Incorporation, or these Bylaws to be taken at any annual or special meeting of the shareholders may be taken without a meeting, prior notice, or a vote, if a consent in writing, setting forth the action so taken, shall be signed and dated by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted, and delivered to the Corporation at its principal office in this state or principal place of business, or delivered to the Secretary or other officer having custody of the book in which proceedings of meetings of shareholders are recorded. Written consents of the number of holders required to take action must be delivered to the Corporation within sixty (60) days of the date of the earliest dated consent delivered to the Corporation. Any consent may be revoked prior to the date that the Corporation receives the required number of consents to authorize the proposed action by delivery, as described in this Section 12 , of a written revocation to the Corporation.

 

Within ten (10) days after obtaining authorization by written consent, notice shall be given to those shareholders who have not consented in writing or who are not entitled to vote in the action. The notice shall fairly summarize the material features of the authorized action. If the action is one for which dissenters' rights are provided under the FBCA, the notice shall contain a clear statement of the right of dissenting shareholders to be paid the fair value of their shares upon compliance with further provisions of the FBCA regarding the rights of dissenting shareholders.

 

ARTICLE III

 

BOARD

 

1.           Management and Number .           All corporate powers shall be exercised by or under the authority of, and the business and affairs of the Corporation shall be controlled and managed by or under the direction of, the Board. Initially, the number of Directors shall be fixed by the Corporation's Articles of Incorporation. Thereafter the number of Directors on the Board shall be fixed, from time to time, by resolution of the Board.

 

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2.           Election and Vacancies .           At each annual meeting of the shareholders, the shareholders shall elect the members of the Board. Each person named in the Articles of Incorporation as a Directors shall hold office until the first annual meeting of the shareholders and until his successor shall have been elected and qualified, or until his earlier resignation, removal from office, or death. Each Directors elected thereafter shall hold office for a term of one year and thereafter until his successor shall have been elected and qualified, or until his earlier resignation, removal from office, or death. Whenever any vacancy on the Board shall occur due to death, resignation, retirement, removal, or resulting from an increase in the authorized number of Directors, or otherwise, a majority of the remaining Directors then in office, even if the remaining Directors are less than a quorum of the entire Board, may fill the vacancy or vacancies so created until a successor or successors shall be duly elected by the shareholders and shall qualify.

 

3.           Resignation and Removal of Directors .           At a meeting of shareholders called expressly for that purpose, any Director or the entire Board may be removed, with or without cause, by the affirmative vote of the holders of a majority of the shares then entitled to vote at an election of Directors. A Director may resign at any time by giving written notice to the President or Secretary.

 

4.           Quorum .           A majority of the Directors shall constitute a quorum for the transaction of business by the Board. Any act or decision of the majority of the Directors present at a meeting at which a quorum is present shall be the act or decision of the Board. A Director who is present at a meeting of the Board at which action on any corporate matter is taken shall be presumed to have assented to the action taken, unless said Director votes against or abstains from the action taken, or objects at the beginning of the meeting (or promptly upon his arrival) to holding it or transacting specified business at the meeting. A majority of the Directors present, whether or not a quorum exists, may adjourn any meeting of the Board to another time and place. Notice of any such adjourned meeting shall be given to the Directors who were not present and, unless announced at the time of adjournment, to the other Directors.

 

5.           Place of Meetings .           Meetings of Directors shall be held at the principal office of the Corporation or such other place or places, either within or without the State of Florida, as may be agreed upon by the Board. Members of the Board may also participate in meetings of the Board by any means of communication by which all Directors participating in the meeting can hear each other simultaneously, and participation in a meeting in such manner shall be deemed presence in person at the meeting for all purposes.

 

6.           Regular and Special Meetings .           Regular meetings of the Board shall be held as frequently and at such time and place as may be determined by the Board from time to time. Special meetings of the Board shall be called by the Secretary at any time on request of the President or a member of the Board.

 

7.           Notice .           Regular meetings of the Board may be held without notice. Special meetings of the Board may be held upon two (2) days notice, which may be either written or oral, of the date, time, and place of the meeting.

 

8.           Executive Committee .           The Board, by resolution adopted by a majority of the full Board, may appoint an Executive Committee and other committees composed of members of the Board, and may vest each such committee with all or any portion of the powers vested by law or in these Bylaws in the full Board, except as provided under the FBCA, and may provide for rules of procedure to govern the operation of such committee.

 

9.           Informal Action by Directors .          Any action which is required to be or may be taken at a meeting of the Board or a committee thereof, may be taken without a meeting if consents in writing, setting forth the action so taken, are signed by all the Directors or members of the committee, as the case may be. Action taken under this Section 9 is effective when the last Director signs the consent, unless otherwise specified in the consent.

 

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10.          Compensation of Directors .           The Directors may be reimbursed for any expenses incurred by them in attendance at any meeting of the Board or of any of its committees. Every Director may be paid a stated salary as Directors and/or a fixed sum for attendance at each meeting which he attends. No payments or reimbursements described herein shall preclude any Director from serving the Corporation in any other capacity and receiving compensation therefor.

 

ARTICLE IV

 

OFFICERS

 

1.           Officers .           The initial officers of the Corporation shall consist of a President who shall be elected by the Board. The Board may also elect a Chairman of the Board, Chief Executive Officer, Chief Financial Officer, Treasurer, Secretary, one or more Vice Presidents, and such other officers and assistant officers and agents as may be deemed necessary from time to time. Any two or more offices may be held by the same person.

 

2.           Election and Term of Office .           The officers of the Corporation shall be elected by the Board. Each officer shall hold office until his successor has been duly elected and has qualified, or until his death, resignation, or removal from office.

 

3.           Vacancies .           A vacancy in any office because of death, resignation, removal, disqualification or otherwise may be filled by the Board for the unexpired portion of the term of office.

 

4.           Resignation and Removal of Officers .           Any officer may resign by giving written notice to the President or the Secretary. Any officer may be removed by the Board at any time with or without cause. Any such removal of an officer shall be without prejudice to his contract rights, if any.

 

5.           Salaries .           The salaries of the officers, if any, shall be fixed from time to time by the Board.

 

6.           Delegation of Power .           In case of absence of any officer of the Corporation or for any other reason that the Board may deem sufficient, the Board may delegate the powers or duties of such officer to any other officer or to any Director or employee of the Corporation, provided that a majority of the entire Board approves.

 

7.           President .           The President shall be the principal executive officer of the Corporation and, subject to the control of the Board, shall generally supervise and control all of the business and affairs of the Corporation. He shall, when present, preside at all meetings of the shareholders and Directors. He may sign, with the Secretary or any other proper officer of the Corporation, certificates for shares of the Corporation, deeds, mortgages, notes, bonds, contracts, and other similar instruments which the Board has authorized to be executed, except in cases where the signing and election thereof has been expressly delegated by the Board or by these Bylaws to some other officer or agent of the Corporation, or is required by law to be otherwise signed or executed. In general, the President shall perform all duties incident to the office of president and such other duties as may be prescribed by the Board from time to time.

 

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8.           Vice-President .              In the absence of the President, or in the event of his death or his inability or refusal to act, a Vice-President (or in the event there is more than one Vice-President, the Vice-Presidents in the order designated at the time of their election, or in the absence of any designation, then in the order of their election) shall perform the duties of the President. When so acting, the Vice-President shall have all powers of, and be subject to all restrictions upon, the President. Any Vice-President may sign with the Secretary or an Assistant Secretary, certificates for shares of the Corporation. The Vice-President shall perform such other duties as from time to time may be assigned to him by the President or by the Board.

 

9.           Secretary .           The Secretary shall attend and record the minutes of all meetings of the Board and of the shareholders in one or more books provided for that purpose; duly give all required notices in accordance with the provisions of these Bylaws or as required by the FBCA; be custodian, or see to the custody, of the corporate records (except the financial records) of the Corporation; sign with the President or Vice-President certificates for shares of the Corporation, the issuance of which shall have been authorized by resolution of the Board; have general charge of the stock record books of the Corporation; and in general perform all duties incident to the office of Secretary and such other duties as from time to time may be assigned to him by the President or by the Board.

 

10.          Treasurer .           The Treasurer shall have custody of, and be responsible for, the financial records, corporate funds and securities of the Corporation; deposit all such monies which are not otherwise employed in the name of the Corporation in such banks, trust companies, or other depositories as shall be selected by the Board; and in general, perform all of the duties as from time to time may be assigned to him by the President or by the Board. If required by the Board, the Treasurer shall give a bond for the faithful discharge of his duties in such sum and with such surety or sureties as the Board determines.

 

11.          Assistant Secretaries and Assistant Treasurers .           The Assistant Secretaries, when authorized by the Board, may sign, with the President or a Vice-President, certificates for shares of the Corporation, the issuance of which shall have been authorized by a resolution of the Board. The Assistant Treasurers shall respectively, if required by the Board, give bonds for the faithful discharge of their duties in such sums and with such sureties as the Board shall determine. The Assistant Secretaries and Assistant Treasurers, in general, shall perform such duties as shall be assigned to them by the Secretary or Treasurer, respectively, or by the President or the Board.

 

ARTICLE V

 

SHARE CERTIFICATES

 

1.           Consideration and Payment .           The stock of the Corporation may be issued for such consideration as may be fixed from time to time by the Board, provided, however, that the consideration may not be less than the par value of any such stock having a par value. No certificate shall be issued for any shares until such shares are fully paid.

 

2.           Issuance .           Every holder of shares in the Corporation shall be entitled to have a certificate representing all shares to which he is entitled. Certificates representing shares in the Corporation shall be signed (either manually or in facsimile) by the President or a Vice President and the Secretary or an Assistant Secretary (to extent there is then one in office). If the person who signed (manually or in facsimile) a share certificate no longer holds office when the certificate is issued, the certificate is nevertheless valid.

 

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3.           Restrictions on Transfer of Shares .           Every certificate representing shares in the Corporation which are restricted as to the sale, disposition, or other transfer of such shares shall state that such shares are restricted as to transfer and shall set forth or fairly summarize on the certificate, or shall state that the Corporation will furnish to any shareholder upon request and without charge a full statement of, the restrictions.

 

4.           Transfer of Stock .           The Corporation shall register a certificate presented to it for transfer if the certificate is properly endorsed by the holder of record or by his duly authorized attorney.

 

5.           Lost, Stolen, or Destroyed Certificates .           If any shareholder claims to have lost or destroyed a certificate for shares issued by the Corporation, a new certificate shall be issued upon the making of an affidavit of that fact by the person claiming the certificate to be lost, stolen, or destroyed. In the discretion of the Board, deposit of a bond or other indemnity in such amount and with reasonable sureties thereon, if any, may be required by the Board.

 

6.           Holders of Record .           The Corporation shall be entitled to treat the holder of record of any shares of stock as the holder in fact thereof and accordingly shall not be bound to recognize any equitable or other claim to or interest in such share or shares on the part of any other person, whether or not it shall have express or other notice thereof, save as expressly provided by the FBCA.

 

ARTICLE VI

 

BOOKS AND RECORDS; REPORTS TO SHAREHOLDERS

 

1.           Books and Records .           The Corporation shall keep as permanent records minutes of the proceedings of its Board and the shareholders and of all actions taken by the Board of the shareholders without a meeting; and of all actions taken by a committee of the Board in place of the Board on behalf of the Corporation. The Corporation shall maintain accurate accounting records and a record of its shareholders, listing the names and addresses of all shareholders alphabetically and the number of shares held by each. The Corporation shall keep copies of the Articles of Incorporation and amendments thereto currently in effect; the Bylaws and all amendments thereto currently in effect; resolutions adopted by the Board creating or fixing the rights, preferences, limitations or different classes or series of shares which are outstanding; minutes and records of all shareholders' meetings or actions for the past three years; written communications to all shareholders or all shareholders of a class or series within the past three years, including financial statements furnished under the Florida Business Corporation Act; the names and business street addresses of the current Directors and officers; and the most recent annual report delivered to the Department of State. The Corporation shall maintain its records in written form or in another form capable of conversion into written form within a reasonable time.

 

2.           Financial Statements for Shareholders . Unless modified by resolution of the shareholders within one hundred eighty (180) days of the close of each fiscal year, the Corporation shall furnish its shareholders annual financial statements, which may be consolidated or combined statements of the Corporation and one or more of its subsidiaries, as appropriate, that include a balance sheet as of the end of the fiscal year, an income statement for that year, and a statement of cash flow for that year. If financial statements are prepared for the Corporation on the basis of generally accepted accounting principles, the annual financial statements must also be prepared on that basis. The annual financial statements must be accompanied by the report of the public accountant who prepared them, if any, or by a statement of the President or Treasurer stating his reasonable belief whether the statements were prepared on the basis of generally accepted accounting principles and, if not, describing the basis of preparation, and describing any respects in which the basis of preparation differed from that of the statements prepared for the preceding year. The Corporation shall mail the annual financial statements to each shareholder within one hundred eighty (180) days after the close of each fiscal year, or within such time thereafter as reasonably necessary if, for reasons beyond the Corporation's control, it is unable to prepare them within the prescribed period. Thereafter, on written request from a shareholder who was not mailed the statements, the Corporation shall mail him the latest annual financial statements.

 

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3.           Report on Indemnification .           If the Corporation indemnifies or advances expenses to any Director, officer, employee, or agent under the FBCA, or otherwise than by court order or action by the shareholders or by an insurance carrier pursuant to insurance maintained by the Corporation, the Corporation shall report the indemnification or advance in writing to the shareholders with or before the notice of the next shareholders' meeting, or prior to such meeting if the indemnification or advance occurs after the giving of such notice but prior to the time such meeting is held. The report shall include a statement specifying the persons paid, the amounts paid, and the nature and status at the time of such payment of the litigation or threatened litigation.

 

ARTICLE VII

 

DISTRIBUTIONS

 

1.           Declaration of Distributions .           The Board may authorize, and the Corporation may make, distributions to its shareholders subject to the Articles of Incorporation, but no distribution may be made if, after giving it effect, the Corporation would not be able to pay its debts as they come due in the usual course of business; or its total assets would be less than the sum of its total liabilities plus (unless the Articles of Incorporation permit otherwise) the amount that would then be needed to satisfy the preferential rights of shareholders whose rights are superior to those receiving the distribution. The determination that a distribution is not prohibited may be based on financial statements prepared on the basis of accounting practices and principles or on a fair valuation or other method that is reasonable under the circumstances. If based on such a valuation, the distribution shall be identified as based on a current valuation of assets the amount per share paid based on such valuation shall be disclosed to the shareholders with their receipt of the distribution. The Corporation's indebtedness to a shareholder by reason of a distribution shall be at parity with its indebtedness to the Corporation's general unsecured creditors, except to the extent subordinated by agreement. Distribution means a direct or indirect transfer of money or other property (except the Corporation's own shares) or incurrence of indebtedness by the Corporation to or for the benefit of shareholders in respect of any of its shares and may be in the form of a declaration or payment of a dividend; a purchase, redemption, or other acquisition of shares; a distribution of indebtedness; or otherwise.

 

2.           Determination of Holders of Record .           For the purpose of determining the shareholders entitled to receive payment of any distribution (other than one involving a purchase, redemption, or other acquisition of the Corporation's shares), the Board may fix in advance a date as the "record date" not more than seventy (70) days prior to the date on which the resolution of the Board declaring the dividend is adopted. If no record date is fixed for the determination of shareholders entitled to receive payment of a distribution, then the date on which the resolution of the Board declaring the distribution is adopted shall be the record date for the determination of shareholders.

 

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ARTICLE VIII

 

NOTICE AND WAIVER

 

1.           Notice .           Delivery of any notice required to be given under the FBCA, the Articles of Incorporation, or these Bylaws, if required to be in writing may be communicated in person or by Unite States mail, overnight courier, email or other form of electronic communication.

 

2.           Attendance as Waiver .           Notice of any meeting required to be given under the provisions of the FBCA, the Articles of Incorporation, or these Bylaws shall be deemed waived by the attendance at such meeting of the party or parties entitled to notice thereof, except when the person attends a meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened.

 

3.           Waiver of Notice .           Whenever any notice is required to be given by the FBCA, the Articles of Incorporation, or these Bylaws, a waiver of notice in writing or approval in writing of the action taken, signed by the person or persons entitled to the notice, whether before or after the time stated in the notice, shall be deemed equivalent to actual receipt of proper notice. Any meeting with respect to which such waiver of notice applies shall be a legal meeting for the transaction of business, notwithstanding that prior notice was not given.

 

ARTICLE IX

 

AMENDMENT

 

1.           By Shareholders .           The shareholders may alter, amend or repeal these Bylaws or adopt new Bylaws.

 

2.           By Directors .           Unless expressly provided to the contrary in the Articles of Incorporation or by the shareholders in amending or repealing the Bylaws generally or a particular Bylaw provision, the Board shall have the power to adopt new Bylaws, and to amend, alter and repeal these and any additional and supplementary Bylaws.

 

ARTICLE X

 

INDEMNIFICATION

 

1.           Indemnification .           The Corporation shall indemnify any person who was or is a party or is threatened to be made a party, to any threatened, pending or contemplated action, suit or proceeding whether civil, criminal, administrative or investigative, by reason of the fact that such person is or was a Director, employee, officer or agent of the Corporation, against expenses (including attorneys’ fees and appellate attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by such person in connection with such action, suit or proceeding if such person acted in good faith and in a manner such person reasonably believed to be in, or not opposed to, the best interest of the Corporation; and, with respect to any criminal action or proceeding, if such person had no reasonable cause to believe his conduct was unlawful; except that no indemnification shall be made in respect to any claim, issue or matter as to which such person shall have been liable for gross negligence or willful misfeasance or malfeasance in the performance of his duty to the Corporation, unless and only to the extent that the court in which such action or suit was brought shall determine, upon application, that despite the adjudication of liability, but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which such court shall deem proper. The termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not, in and of itself, create a presumption that the person did not act in good faith and in a manner which he did not reasonably believe to be in, or not opposed to, the best interest of the Corporation; and with respect to any criminal action or proceeding, that such person had no reasonable cause to believe that his conduct was unlawful.

 

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2.           Expenses .           To the extent that a Director, officer, employee or agent of the Corporation has been successful on the merits or otherwise in defense of any action, suit or proceeding referred to above, or in defense of any claim, issue or matter therein, such person shall be indemnified against expenses (including attorneys’ fees and appellate attorneys’ fees) actually and reasonably incurred by such person in connection therewith.

 

3.           Prepayment of Expenses .           Expenses incurred in defending a civil or criminal action, suit or proceeding may be paid by the Corporation in advance of the final disposition of such action, suit or proceeding as authorized by the Board in the specific case upon receipt of an undertaking by or on behalf of the Director, officer, employee or agent to repay such amount unless it shall ultimately be determined that such person is entitled to be indemnified by the Corporation as authorized in this Article VIII .

 

4.           Not Exclusive .               The indemnification provided by this Article XII shall not be deemed exclusive of any other rights to which those seeking indemnification may be entitled under the laws of the State of Florida, any Bylaw, agreement, vote of members or otherwise; and as to action taken in an official capacity while holding office, shall continue as to a person who has ceased to be a Director, officer, employee, or agent and shall inure to the benefit of the heirs, executors and administrators of such person.

 

5.           Insurance .           The Corporation shall have the power to purchase and maintain insurance on behalf of any person who is or was a Director, officer, employee or agent of the Corporation, or is or was serving at the request of the Corporation as a Director, officer, employee or agent of another Corporation, partnership, joint venture, trust or other enterprise, against any liability asserted against him and incurred by him in any such capacity, as arising out of his status as such, whether or not the Corporation would have the power to indemnify him against such liability under the provisions of this Article XII .

 

ARTICLE XII

 

ACTIONS WITH RESPECT TO SECURITIES OF OTHER CORPORATIONS; CONSTRUCTION

 

1.           Actions with Respect to Securities of Other Corporations .           Unless otherwise directed by the Board, the President or a designee of the president shall have power to vote and otherwise act on behalf of the Corporation, in person or by proxy, at any meeting of shareholders of, or with respect to any action of shareholders of, any other Corporation in which this Corporation may hold securities and to otherwise exercise any and all rights and powers that the Corporation may possess by reason of its ownership of securities in other Corporations.

 

2.           Construction . Whenever a conflict arises between the language of these Bylaws and the Articles of Incorporation, the Articles of Incorporation shall control.

 

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Exhibit 10.1  

 

AVRA MEDICAL ROBOTICS, INC.

 

2016 STOCK INCENTIVE PLAN

 

1.              Purposes of the Plan . The purposes of this Plan are to attract and retain the best available personnel, to provide additional incentives to Employees, Directors and Consultants and to promote the success of the Company’s business.

 

2.              Definitions . The following definitions shall apply as used herein and in the individual Award Agreements except as defined otherwise in an individual Award Agreement. In the event a term is separately defined in an individual Award Agreement, such definition shall supersede the definition contained in this Section 2 .

 

(a)           “ Administrator ” means the Board or any of the Committees appointed to administer the Plan.

 

(b)           “ Affiliate ” and “ Associate ” shall have the respective meanings ascribed to such terms in Rule 12b-2 promulgated under the Exchange Act.

 

(c)           “ Applicable Laws ” means the legal requirements relating to the Plan and the Awards under applicable provisions of federal securities laws, state corporate and securities laws, the Code, the rules of any applicable stock exchange or national market system, and the rules of any non-U.S. jurisdiction applicable to Awards granted to residents therein.

 

(d)           “ Assumed ” means that pursuant to a Corporate Transaction either (i) the Award is expressly affirmed by the Company; or (ii) the contractual obligations represented by the Award are expressly assumed (and not simply by operation of law) by the successor entity or its Parent in connection with the Corporate Transaction with appropriate adjustments to the number and type of securities of the successor entity or its Parent subject to the Award and the exercise or purchase price thereof which at least preserves the compensation element of the Award existing at the time of the Corporate Transaction as determined in accordance with the instruments evidencing the agreement to assume the Award.

 

(e)           “ Award ” means the grant of an Option, SAR, Dividend Equivalent Right, Restricted Stock, Restricted Stock Unit or other right or benefit under the Plan.

 

(f)            “ Award Agreement ” means the written agreement evidencing the grant of an Award executed by the Company and the Grantee, including any amendments thereto.

 

(g)           “ Board ” means the Board of Directors of the Company.

 

(h)           “ Cause ” means, with respect to the termination by the Company or a Related Entity of the Grantee’s Continuous Service, that such termination is for “ Cause ” as such term (or word of like import) is expressly defined in a then-effective written agreement between the Grantee and the Company or such Related Entity, or in the absence of such then-effective written agreement and definition, is based on, in the determination of the Administrator, the Grantee’s: (i) performance of any act or failure to perform any act in bad faith and to the detriment of the Company or a Related Entity; (ii) dishonesty, intentional misconduct or material breach of any agreement with the Company or a Related Entity; or (iii) commission of a crime involving dishonesty, breach of trust, or physical or emotional harm to any person; provided, however, that with regard to any agreement that defines “ Cause ” on the occurrence of or in connection with a Corporate Transaction or a Change in Control, such definition of “ Cause ” shall not apply until a Corporate Transaction or a Change in Control actually occurs.

 

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(i)            “ Change in Control ” means a change in ownership or control of the Company after the Registration Date effected through either of the following transactions:

 

(i)             the direct or indirect acquisition by any person or related group of persons (other than an acquisition from or by the Company or by a Company-sponsored employee benefit plan or by a person that directly or indirectly controls, is controlled by, or is under common control with, the Company) of beneficial ownership (within the meaning of Rule 13d-3 of the Exchange Act) of securities possessing more than fifty percent (50%) of the total combined voting power of the Company’s outstanding securities pursuant to a tender or exchange offer made directly to the Company’s shareholders which a majority of the Continuing Directors who are not Affiliates or Associates of the offeror do not recommend such shareholders accept; or

 

(ii)         a change in the composition of the Board over a period of twelve (12) months or less such that a majority of the Board members (rounded up to the next whole number) ceases, by reason of one or more contested elections for Board membership, to be comprised of individuals who are Continuing Directors.

 

(j)             “ Code ” means the Internal Revenue Code of 1986, as amended.

 

(k)           “ Committee ” means any committee composed of members of the Board appointed by the Board to administer the Plan.

 

(l)            “ Common Stock ” means the common stock of the Company.

 

(m)           “ Company ” means Avra Medical Robotics, Inc., a Florida corporation, or any successor entity that adopts the Plan in connection with a Corporate Transaction.

 

(n)           “ Consultant ” means any person (other than an Employee or a Director, solely with respect to rendering services in such person’s capacity as a Director) who is engaged by the Company or any Related Entity to render consulting or advisory services to the Company or such Related Entity.

 

(o)            “ Continuing Directors ” means members of the Board who either (i) have been Board members continuously for a period of at least twelve (12) months; or (ii) have been Board members for less than twelve (12) months and were elected or nominated for election as Board members by at least a majority of the Board members described in clause (i) who were still in office at the time such election or nomination was approved by the Board.

 

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(p)           “ Continuous Service ” means that the provision of services to the Company or a Related Entity in any capacity of Employee, Director or Consultant is not interrupted or terminated. In jurisdictions requiring notice in advance of an effective termination as an Employee, Director or Consultant, Continuous Service shall be deemed terminated upon the actual cessation of providing services to the Company or a Related Entity notwithstanding any required notice period that must be fulfilled before a termination as an Employee, Director or Consultant can be effective under Applicable Laws. A Grantee’s Continuous Service shall be deemed to have terminated either upon an actual termination of Continuous Service or upon the entity for which the Grantee provides services ceasing to be a Related Entity. Continuous Service shall not be considered interrupted in the case of (i) any approved leave of absence; (ii) transfers among the Company, any Related Entity, or any successor, in any capacity of Employee, Director or Consultant; or (iii) any change in status as long as the individual remains in the service of the Company or a Related Entity in any capacity of Employee, Director or Consultant (except as otherwise provided in the Award Agreement). Notwithstanding the foregoing, except as otherwise determined by the Administrator, in the event of any spin-off of a Related Entity, service as an Employee, Director or Consultant for such Related Entity following such spin-off shall be deemed to be Continuous Service for purposes of the Plan and any Award under the Plan. An approved leave of absence shall include sick leave, military leave, or any other authorized personal leave. For purposes of each Incentive Stock Option granted under the Plan, if such leave exceeds three months, and reemployment upon expiration of such leave is not guaranteed by statute or contract, then the Incentive Stock Option shall be treated as a Non-Qualified Stock Option on the day three months and one day following the expiration of such three month period.

 

(q)           “ Corporate Transaction ” means any of the following transactions, provided, however, that the Administrator shall determine under parts (iv) and (v) whether multiple transactions are related, and its determination shall be final, binding and conclusive:

 

(i)             a merger or consolidation in which the Company is not the surviving entity, except for a transaction the principal purpose of which is to change the state in which the Company is incorporated;

 

(ii)         the sale, transfer or other disposition of all or substantially all of the assets of the Company;

 

(iii)        the complete liquidation or dissolution of the Company;

 

(iv)        any reverse merger or series of related transactions culminating in a reverse merger (including, but not limited to, a tender offer followed by a reverse merger) in which the Company is the surviving entity but (A) the shares of Common Stock outstanding immediately prior to such merger are converted or exchanged by virtue of the merger into other property, whether in the form of securities, cash or otherwise; or (B) in which securities possessing more than forty percent (40%) of the total combined voting power of the Company’s outstanding securities are transferred to a person or persons different from those who held such securities immediately prior to such merger or the initial transaction culminating in such merger, but excluding any such transaction or series of related transactions that the Administrator determines shall not be a Corporate Transaction; or

 

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(v)         acquisition in a single or series of related transactions by any person or related group of persons (other than the Company or by a Company-sponsored employee benefit plan) of beneficial ownership (within the meaning of Rule 13d-3 of the Exchange Act) of securities possessing more than fifty percent (50%) of the total combined voting power of the Company’s outstanding securities but excluding any such transaction or series of related transactions that the Administrator determines shall not be a Corporate Transaction.

 

(r)            “ Covered Employee ” means an Employee who is a “covered employee” under Section 162(m) (3) of the Code.

 

(s)           “ Director ” means a member of the Board or the board of directors of any Related Entity.

 

(t)             “ Disability ” means as defined under the long-term disability policy of the Company or the Related Entity to which the Grantee provides services regardless of whether the Grantee is covered by such policy. If the Company or the Related Entity to which the Grantee provides service does not have a long-term disability plan in place, “Disability” means that a Grantee is unable to carry out the responsibilities and functions of the position held by the Grantee by reason of any medically determinable physical or mental impairment for a period of not less than ninety (90) consecutive days. A Grantee will not be considered to have incurred a Disability unless he or she furnishes proof of such impairment sufficient to satisfy the Administrator in its discretion.

 

(u)           “ Dividend Equivalent Right ” means a right entitling the Grantee to compensation measured by dividends paid with respect to Common Stock.

 

(v)           “ Employee ” means any person, including an Officer or Director, who is in the employ of the Company or any Related Entity, subject to the control and direction of the Company or any Related Entity as to both the work to be performed and the manner and method of performance. The payment of a Director’s fee by the Company or a Related Entity shall not be sufficient to constitute “ employment ” by the Company.

 

(w)          “ Exchange Act ” means the Securities Exchange Act of 1934, as amended.

 

(x)           “ Fair Market Value ” means, as of any date, the value of Common Stock determined as follows:

 

(i)             If the Common Stock is listed on one or more established stock exchanges or national market systems, including without limitation The NASDAQ Global Select Market, The NASDAQ Global Market, The NASDAQ Capital Market of The NASDAQ Stock Market LLC, the New York Stock Exchange or the New York MKT, its Fair Market Value shall be the closing sales price for such stock (or the closing bid, if no sales were reported) as quoted on the principal exchange or system on which the Common Stock is listed (as determined by the Administrator) on the date of determination (or, if no closing sales price or closing bid was reported on that date, as applicable, on the last trading date such closing sales price or closing bid was reported), as reported in The Wall Street Journal or such other source as the Administrator deems reliable;

 

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(ii)         If the Common Stock is regularly quoted on an automated quotation system (including those maintained by OTC Markets, Inc.) or by a recognized securities dealer, its Fair Market Value shall be the closing sales price for such stock as quoted on such system or by such securities dealer on the date of determination or the average of any such prices for such period as determined by the Administrator in good faith not to exceed thirty (30) trading days prior to the date of determination, but if selling prices are not reported, the Fair Market Value of a share of Common Stock shall be the mean between the high bid and low asked prices for the Common Stock on the date of determination (or, if no such prices were reported on that date, on the last date such prices were reported) or the average thereof for such period prior to the date of determination as established by the Administrator above, as reported in The Wall Street Journal or such other source as the Administrator deems reliable; or

 

(iii)        In the absence of an established market for the Common Stock of the type described in (i) and (ii), above, the Fair Market Value thereof shall be determined by the Administrator in good faith.

 

(y)           “ Good Reason means the occurrence after a Corporate Transaction or Change in Control of any of the following events or conditions unless consented to by the Grantee (and the Grantee shall be deemed to have consented to any such event or condition unless the Grantee provides written notice of the Grantee’s non-acquiescence within thirty (30) days of the effective time of such event or condition):

 

(i)             a change in the Grantee’s responsibilities or duties that represents a material and substantial diminution in the Grantee’s responsibilities or duties as in effect immediately preceding the consummation of a Corporate Transaction or Change in Control;

 

(ii)         a reduction in the Grantee’s base salary to a level below that in effect at any time within six months preceding the consummation of a Corporate Transaction or Change in Control or at any time thereafter; provided that an across-the-board reduction in the salary level of substantially all other individuals in positions similar to the Grantee’s by substantially the same percentage amount shall not constitute such a salary reduction; or

 

(iii)        requiring the Grantee to be based at any place outside a 50-mile radius from the Grantee’s job location or residence prior to the Corporate Transaction or Change in Control except for reasonably required travel on business that is not materially greater than such travel requirements prior to the Corporate Transaction or Change in Control.

 

(z)            “ Grantee ” means an Employee, Director or Consultant who receives an Award under the Plan.

 

(aa)         “ Incentive Stock Option ” means an Option intended to qualify as an incentive stock option within the meaning of Section 422 of the Code.

 

(bb)         “ Non-Qualified Stock Option ” means an Option not intended to qualify as an Incentive Stock Option.

 

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(cc)         “ Officer ” means a person who is an officer of the Company or a Related Entity within the meaning of Section 16 of the Exchange Act and the rules and regulations promulgated thereunder.

 

(dd)         “ Option ” means an option to purchase Shares pursuant to an Award Agreement granted under the Plan.

 

(ee)         “ Parent ” means a “parent corporation”, whether now or hereafter existing, as defined in Section 424(e) of the Code.

 

(ff)           “ Performance-Based Compensation ” means compensation qualifying as “performance-based compensation” under Section 162(m) of the Code.

 

(gg)         “ Plan ” means this 2015 Stock Incentive Plan.

 

(hh)         “ Registration Date ” means the first to occur of (i) the closing of the first sale, subsequent to the date this Plan is adopted, to the general public pursuant to a registration statement filed with and declared effective by the Securities and Exchange Commission under the Securities Act of 1933, as amended, of (A) the Common Stock or (B) the same class of securities of a successor corporation (or its Parent) issued pursuant to a Corporate Transaction in exchange for or in substitution of the Common Stock; (ii) the date the Common Stock is otherwise registered under and the Company becomes subject to the reporting requirements of Sections 13 or 15 (d) or the Exchange Act; and (iii) in the event of a Corporate Transaction, the date of the consummation of the Corporate Transaction if the same class of securities of the successor corporation (or its Parent) issuable in such Corporate Transaction shall have been sold to the general public pursuant to a registration statement filed with and declared effective by the Securities and Exchange Commission under the Securities Act of 1933, as amended, on or prior to the date of consummation of such Corporate Transaction.

 

(ii)            “ Related Entity ” means any Parent or Subsidiary of the Company.

 

(jj)            “ Replaced ” means that pursuant to a Corporate Transaction the Award is replaced with a comparable stock award or a cash incentive program of the Company, the successor entity (if applicable) or Parent of either of them which preserves the compensation element of such Award existing at the time of the Corporate Transaction and provides for subsequent payout in accordance with the same (or a more favorable) vesting schedule applicable to such Award. The determination of Award comparability shall be made by the Administrator and its determination shall be final, binding and conclusive.

 

(kk)          “ Restricted Stock ” means Shares issued under the Plan to the Grantee for such consideration, if any, and subject to such restrictions on transfer, rights of first refusal, repurchase provisions, forfeiture provisions, and other terms and conditions as established by the Administrator.

 

(ll)            “ Restricted Stock Units ” means an Award that may be earned in whole or in part upon the passage of time or the attainment of performance criteria established by the Administrator and that may be settled for cash, Shares or other securities or a combination of cash, Shares or other securities as established by the Administrator.

 

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(mm)        “ Rule 16b-3 ” means Rule 16b-3 promulgated under the Exchange Act or any successor thereto.

 

(nn)         “ SAR ” means a stock appreciation right entitling the Grantee to Shares or cash compensation, as established by the Administrator, measured by appreciation in the value of Common Stock.

 

(oo)         “ Share ” means a share of the Common Stock.

 

(pp)         “ Subsidiary ” means a “subsidiary corporation”, whether now or hereafter existing, as defined in Section 424(f) of the Code.

 

3.              Stock Subject to the Plan .

 

(a)           Subject to the provisions of Section 10 , below, the maximum aggregate number of Shares that may be issued pursuant to all Awards is 3,000,000 Shares, plus an annual increase to be added on the first day of the calendar year beginning January 1, 2017 equal to (a) the greater of such number of shares as (i) will set the maximum number of Shares that may be issued pursuant to all Awards shall equal 15% of the number of Shares outstanding as of such date; or (ii) 2% of the number of Shares outstanding as of such date; or (b) a lesser number of Shares determined by the Administrator. Notwithstanding the foregoing, subject to the provisions of Section 10 , below, of the number of Shares specified above, the maximum aggregate number of Shares available for grant of Incentive Stock Options shall be 1,500,000 Shares, increased on the first day of the calendar year beginning January 1, 2017, in a number of Shares proportionate to the increase in the total number of Shares that may be issued pursuant to all Awards under this Plan, as set forth in this Section 3 .  The Shares to be issued pursuant to Awards may be authorized, but unissued or reacquired Shares.

 

(b)           Any Shares covered by an Award (or portion of an Award) that is forfeited, canceled or expires (whether voluntarily or involuntarily) shall be deemed not to have been issued for purposes of determining the maximum aggregate number of Shares that may be issued under the Plan. Shares that actually have been issued under the Plan pursuant to an Award shall not be returned to the Plan and shall not become available for future issuance under the Plan, except that if unvested Shares are forfeited, or repurchased by the Company at the lesser of their original purchase price or their Fair Market Value at the time of repurchase, such Shares shall become available for future grant under the Plan

 

(c)           To the extent not prohibited by the listing requirements of The NASDAQ Stock Market LLC (or other established stock exchange or national market system on which the Common Stock is traded) or Applicable Law, any Shares covered by an Award that are surrendered (i) in payment of the Award exercise or purchase price (including pursuant to the “ net exercise ” of an option pursuant to Section 7(b)(v) ); or (ii) in satisfaction of tax withholding obligations incident to the exercise of an Award shall be deemed not to have been issued for purposes of determining the maximum number of Shares that may be issued pursuant to all Awards under the Plan, unless otherwise determined by the Administrator.

 

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4.              Administration of the Plan .

 

(a)             Plan Administrator .

 

(i)              Administration with Respect to Directors and Officers .           With respect to grants of Awards to Directors or Employees who are also Officers or Directors of the Company, the Plan shall be administered by (A) the Board; or (B) a Committee designated by the Board, which Committee shall be constituted in such a manner as to satisfy the Applicable Laws and to permit such grants and related transactions under the Plan to be exempt from Section 16(b) of the Exchange Act in accordance with Rule 16b-3. Once appointed, such Committee shall continue to serve in its designated capacity until otherwise directed by the Board.

 

(ii)             Administration With Respect to Consultants and Other Employees .           With respect to grants of Awards to Employees or Consultants who are neither Directors nor Officers of the Company, the Plan shall be administered by (A) the Board; or (B) a Committee designated by the Board, which Committee shall be constituted in such a manner as to satisfy the Applicable Laws. Once appointed, such Committee shall continue to serve in its designated capacity until otherwise directed by the Board. The Board may authorize one or more Officers to grant such Awards and may limit such authority as the Board determines from time to time.

 

(iii)            Administration With Respect to Covered Employees . Notwithstanding the foregoing, as of and after the date that the exemption for the Plan under Section 162(m) of the Code expires, as set forth in Section 18 below, grants of Awards to any Covered Employee intended to qualify as Performance-Based Compensation shall be made only by a Committee (or subcommittee of a Committee) that is comprised solely of two or more Directors eligible to serve on a committee making Awards qualifying as Performance-Based Compensation. In the case of such Awards granted to Covered Employees, references to the “ Administrator ” or to a “ Committee ” shall be deemed to be references to such Committee or subcommittee.

 

(iv)            Administration Errors .           In the event an Award is granted in a manner inconsistent with the provisions of this subsection (a) , such Award shall be presumptively valid as of its grant date to the extent permitted by the Applicable Laws.

 

(b)            Powers of the Administrator .           Subject to Applicable Laws and the provisions of the Plan (including any other powers given to the Administrator hereunder), and except as otherwise provided by the Board, the Administrator shall have the authority, in its discretion:

 

(i)             to select the Employees, Directors and Consultants to whom Awards may be granted from time to time hereunder;

 

(ii)            to determine whether and to what extent Awards are granted hereunder;

 

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(iii)           to determine the number of Shares or the amount of other consideration to be covered by each Award granted hereunder;

 

(iv)           to approve forms of Award Agreements for use under the Plan;

 

(v)            to determine the terms and conditions of any Award granted hereunder;

 

(vi)           to amend the terms of any outstanding Award granted under the Plan, provided that

 

(A)         any amendment that would adversely affect the Grantee’s rights under an outstanding Award shall not be made without the Grantee’s written consent, provided , however , that an amendment or modification that may cause an Incentive Stock Option to become a Non-Qualified Stock Option shall not be treated as adversely affecting the rights of the Grantee;

 

(B)          the reduction of the exercise price of any Option awarded under the Plan and the base appreciation amount of any SAR awarded under the Plan shall be subject to shareholder approval; and

 

(C)          canceling an Option or SAR at a time when its exercise price or base appreciation amount (as applicable) exceeds the Fair Market Value of the underlying Shares, in exchange for another Option, SAR, Restricted Stock, or other Award or for cash shall be subject to shareholder approval, unless the cancellation and exchange occurs in connection with a Corporate Transaction. Notwithstanding the foregoing, canceling an Option or SAR in exchange for another Option, SAR, Restricted Stock, or other Award or for cash with an exercise price, purchase price or base appreciation amount (as applicable) that is equal to or greater than the exercise price or base appreciation amount (as applicable) of the original Option or SAR shall not be subject to shareholder approval;

 

(vii)          to construe and interpret the terms of the Plan and Awards, including without limitation, any notice of award or Award Agreement, granted pursuant to the Plan;

 

(viii)         to grant Awards to Employees, Directors and Consultants employed outside the United States on such terms and conditions different from those specified in the Plan as may, in the judgment of the Administrator, be necessary or desirable to further the purpose of the Plan; and

 

(ix)            to take such other action, not inconsistent with the terms of the Plan, as the Administrator deems appropriate.

 

The express grant in the Plan of any specific power to the Administrator shall not be construed as limiting any power or authority of the Administrator; provided that the Administrator may not exercise any right or power reserved to the Board. Any decision made, or action taken, by the Administrator or in connection with the administration of this Plan shall be final, conclusive and binding on all persons having an interest in the Plan.

 

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(c)            Indemnification . In addition to such other rights of indemnification as they may have as members of the Board or as Officers or Employees of the Company or a Related Entity, members of the Board and any Officers or Employees of the Company or a Related Entity to whom authority to act for the Board, the Administrator or the Company is delegated shall be defended and indemnified by the Company to the extent permitted by law on an after-tax basis against all reasonable expenses, including attorneys’ fees, actually and necessarily incurred in connection with the defense of any claim, investigation, action, suit or proceeding, or in connection with any appeal therein, to which they or any of them may be a party by reason of any action taken or failure to act under or in connection with the Plan, or any Award granted hereunder, and against all amounts paid by them in settlement thereof (provided such settlement is approved by the Company) or paid by them in satisfaction of a judgment in any such claim, investigation, action, suit or proceeding, except in relation to matters as to which it shall be adjudged in such claim, investigation, action, suit or proceeding that such person is liable for gross negligence, bad faith or intentional misconduct; provided, however, that within 30 days after the institution of such claim, investigation, action, suit or proceeding, such person shall offer to the Company, in writing, the opportunity at the Company’s expense to defend the same.

 

5.              Eligibility . Awards other than Incentive Stock Options may be granted to Employees, Directors and Consultants. Incentive Stock Options may be granted only to Employees of the Company or a Parent or a Subsidiary of the Company. An Employee, Director or Consultant, who has been granted an Award may, if otherwise eligible, be granted additional Awards. Awards may be granted to such Employees, Directors or Consultants who are residing in non-U.S. jurisdictions as the Administrator may determine from time to time.

 

6.              Terms and Conditions of Awards .

 

(a)            Types of Awards .           The Administrator is authorized under the Plan to award any type of arrangement to an Employee, Director or Consultant that is not inconsistent with the provisions of the Plan and that by its terms involves or might involve the issuance of (i) Shares; (ii) cash; (iii) an Option; (iv) a SAR; or (v) a similar right with a fixed or variable price related to the Fair Market Value of the Shares and with an exercise or conversion privilege related to the passage of time, the occurrence of one or more events, or the satisfaction of performance criteria or other conditions. Such awards include, without limitation, Options, SARs, sales or bonuses of Restricted Stock, Restricted Stock Units or Dividend Equivalent Rights, and an Award may consist of one such security or benefit, or two or more of them in any combination or alternative.

 

(b)           Designation of Award .           Each Award shall be designated in the Award Agreement. In the case of an Option, the Option shall be designated as either an Incentive Stock Option or a Non-Qualified Stock Option. However, notwithstanding such designation, an Option will qualify as an Incentive Stock Option under the Code only to the extent the $100,000 limitation of Section 422(d) of the Code is not exceeded. The $100,000 limitation of Section 422(d) of the Code is calculated based on the aggregate Fair Market Value of the Shares subject to Options designated as Incentive Stock Options that become exercisable for the first time by a Grantee during any calendar year (under all plans of the Company or any Parent or Subsidiary of the Company). For purposes of this calculation, Incentive Stock Options shall be taken into account in the order in which they were granted, and the Fair Market Value of the Shares shall be determined as of the grant date of the relevant Option. In the event that the Code or the regulations promulgated thereunder are amended after the date the Plan becomes effective to provide for a different limit on the Fair Market Value of Shares permitted to be subject to Incentive Stock Options, then such different limit will be automatically incorporated herein and will apply to any Options granted after the effective date of such amendment.

 

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(c)            Conditions of Award .           Subject to the terms of the Plan, the Administrator shall determine the provisions, terms, and conditions of each Award including, but not limited to, the Award vesting schedule, repurchase provisions, rights of first refusal, forfeiture provisions, form of payment (cash, Shares, or other consideration) upon settlement of the Award, payment contingencies, and satisfaction of any performance criteria. The performance criteria established by the Administrator may be based on any one of, or combination of, the following: (i) increase in share price; (ii) earnings per share; (iii) total shareholder return; (iv) operating margin; (v) gross margin; (vi) return on equity; (vii) return on assets; (viii) return on investment; (ix) operating income; (x) net operating income; (xi) pre-tax profit; (xii) cash flow, (xiii) revenue; (xiv) expenses; (xv) earnings before interest, taxes and depreciation; (xvi) economic value added; and (xvii) market share. The performance criteria may be applicable to the Company, Related Entities and/or any individual business units of the Company or any Related Entity. Partial achievement of the specified criteria may result in a payment or vesting corresponding to the degree of achievement as specified in the Award Agreement. In addition, the performance criteria shall be calculated in accordance with generally accepted accounting principles, but excluding the effect (whether positive or negative) of any change in accounting standards and any extraordinary, unusual or nonrecurring item, as determined by the Administrator, occurring after the establishment of the performance criteria applicable to the Award intended to be performance-based compensation. Each such adjustment, if any, shall be made solely for the purpose of providing a consistent basis from period to period for the calculation of performance criteria in order to prevent the dilution or enlargement of the Grantee’s rights with respect to an Award intended to be performance-based compensation.

 

(d)            Acquisitions and Other Transactions .           The Administrator may issue Awards under the Plan in settlement, assumption or substitution for, outstanding awards or obligations to grant future awards in connection with the Company or a Related Entity acquiring another entity, an interest in another entity or an additional interest in a Related Entity whether by merger, stock purchase, asset purchase or other form of transaction.

 

(e)             Deferral of Award Payment .           The Administrator may establish one or more programs under the Plan to permit selected Grantees the opportunity to elect to defer receipt of consideration upon exercise of an Award, satisfaction of performance criteria, or other event that absent the election would entitle the Grantee to payment or receipt of Shares or other consideration under an Award. The Administrator may establish the election procedures, the timing of such elections, the mechanisms for payments of, and accrual of interest or other earnings, if any, on amounts, Shares or other consideration so deferred, and such other terms, conditions, rules and procedures that the Administrator deems advisable for the administration of any such deferral program.

 

11   Page
 

 

(f)             Separate Programs .           The Administrator may establish one or more separate programs under the Plan for the purpose of issuing particular forms of Awards to one or more classes of Grantees on such terms and conditions as determined by the Administrator from time to time.

 

(g)             Individual Limitations on Awards .

 

(i)              Individual Limit for Options and SARs .      Following the date that the exemption from application of Section 162(m) of the Code described in Section 18 (or any exemption having similar effect) ceases to apply to Awards, the maximum number of Shares with respect to which Options and SARs may be granted to any Grantee in any calendar year shall be 100,000 Shares. In connection with a Grantee’s commencement of Continuous Service, a Grantee may be granted Options and SARs for up to an additional 150,000 Shares that shall not count against the limit set forth in the previous sentence. The foregoing limitations shall be adjusted proportionately in connection with any change in the Company’s capitalization pursuant to Section 10 , below. To the extent required by Section 162(m) of the Code or the regulations thereunder, in applying the foregoing limitations with respect to a Grantee, if any Option or SAR is canceled, the canceled Option or SAR shall continue to count against the maximum number of Shares with respect to which Options and SARs may be granted to the Grantee. For this purpose, the repricing of an Option (or in the case of a SAR, the base amount on which the stock appreciation is calculated is reduced to reflect a reduction in the Fair Market Value of the Common Stock) shall be treated as the cancellation of the existing Option or SAR and the grant of a new Option or SAR.

 

(ii)             Individual Limit for Restricted Stock and Restricted Stock Units .           Following the date that the exemption from application of Section 162(m) of the Code described in Section 18 (or any exemption having similar effect) ceases to apply to Awards, for awards of Restricted Stock and Restricted Stock Units that are intended to be Performance-Based Compensation, the maximum number of Shares with respect to which such Awards may be granted to any Grantee in any calendar year shall be 250,000 Shares. The foregoing limitation shall be adjusted proportionately in connection with any change in the Company’s capitalization pursuant to Section 10 .

 

(h)             Deferral .           If the vesting or receipt of Shares under an Award is deferred to a later date, any amount (whether denominated in Shares or cash) paid in addition to the original number of Shares subject to such Award will not be treated as an increase in the number of Shares subject to the Award if the additional amount is based either on a reasonable rate of interest or on one or more predetermined actual investments such that the amount payable by the Company at the later date will be based on the actual rate of return of a specific investment (including any decrease as well as any increase in the value of an investment).

 

(i)              Early Exercise .           The Award Agreement may, but need not, include a provision whereby the Grantee may elect at any time while an Employee, Director or Consultant to exercise any part or all of the Award prior to full vesting of the Award. Any unvested Shares received pursuant to such exercise may be subject to a repurchase right in favor of the Company or a Related Entity or to any other restriction the Administrator determines to be appropriate.

 

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(j)              Term of Award .           The term of each Award shall be the term stated in the Award Agreement, provided, however, that the term of an Award shall be no more than ten (10) years from the date of grant thereof. However, in the case of an Incentive Stock Option granted to a Grantee who, at the time the Option is granted, owns stock representing more than ten percent (10%) of the voting power of all classes of stock of the Company or any Parent or Subsidiary of the Company, the term of the Incentive Stock Option shall be five (5) years from the date of grant thereof or such shorter term as may be provided in the Award Agreement. Notwithstanding the foregoing, the specified term of any Award shall not include any period for which the Grantee has elected to defer the receipt of the Shares or cash issuable pursuant to the Award.

 

(k)             Transferability of Awards .           Incentive Stock Options may not be sold, pledged, assigned, hypothecated, transferred, or disposed of in any manner other than by will or by the laws of descent or distribution and may be exercised, during the lifetime of the Grantee, only by the Grantee. Other Awards shall be transferable (i) by will and by the laws of descent and distribution and (ii) during the lifetime of the Grantee, to the extent and in the manner authorized by the Administrator but only to the extent such transfers are made to family members, to family trusts, to family controlled entities, to charitable organizations, and pursuant to domestic relations orders or agreements, in all cases without payment for such transfers to the Grantee. Notwithstanding the foregoing, the Grantee may designate one or more beneficiaries of the Grantee’s Award in the event of the Grantee’s death on a beneficiary designation form provided by the Administrator.

 

(l)              Time of Granting Awards .           The date of grant of an Award shall for all purposes be the date on which the Administrator makes the determination to grant such Award, or such other later date as is determined by the Administrator.

 

7.              Award Exercise or Purchase Price, Consideration and Taxes .

 

(a)             Exercise or Purchase Price .           The exercise or purchase price, if any, for an Award shall be as follows:

 

(i)             In the case of an Incentive Stock Option:

 

(A)         granted to an Employee who, at the time of the grant of such Incentive Stock Option owns stock representing more than ten percent (10%) of the voting power of all classes of stock of the Company or any Parent or Subsidiary of the Company, the per Share exercise price shall be not less than one hundred ten percent (110%) of the Fair Market Value per Share on the date of grant; or

 

(B)         granted to any Employee other than an Employee described in the preceding paragraph, the per Share exercise price shall be not less than one hundred percent (100%) of the Fair Market Value per Share on the date of grant.

 

(ii)            In the case of a Non-Qualified Stock Option, the per Share exercise price shall be not less than one hundred percent (100%) of the Fair Market Value per Share on the date of grant.

 

13   Page
 

 

(iii)           In the case of Awards intended to qualify as Performance-Based Compensation, the exercise or purchase price, if any, shall be not less than one hundred percent (100%) of the Fair Market Value per Share on the date of grant.

 

(iv)           In the case of SARs, the base appreciation amount shall not be less than one hundred percent (100%) of the Fair Market Value per Share on the date of grant.

 

(v)            In the case of other Awards, such price as is determined by the Administrator.

 

(vi)           Notwithstanding the foregoing provisions of this Section 7(a) , in the case of an Award issued pursuant to Section 6(d) , above, the exercise or purchase price for the Award shall be determined in accordance with the provisions of the relevant instrument evidencing the agreement to issue such Award.

 

(b)            Consideration .           Subject to Applicable Laws, the consideration to be paid for the Shares to be issued upon exercise or purchase of an Award including the method of payment shall be determined by the Administrator. In addition to any other types of consideration the Administrator may determine, the Administrator is authorized to accept as consideration for Shares issued under the Plan the following, provided that the portion of the consideration equal to the par value of the Shares must be paid in cash or other legal consideration permitted by the Florida Business Corporations Law:

 

(i)             cash;

 

(ii)            check;

 

(iii)           surrender of Shares, or delivery of a properly executed form of attestation of ownership of Shares as the Administrator may require, that have a Fair Market Value on the date of surrender or attestation equal to the aggregate exercise price of the Shares as to which said Award shall be exercised;

 

(iv)           with respect to Options, if the exercise occurs on or after the Registration Date, payment through a broker-dealer sale and remittance procedure pursuant to which the Grantee (A) shall provide written instructions to a Company designated brokerage firm to effect the immediate sale of some or all of the purchased Shares and remit to the Company sufficient funds to cover the aggregate exercise price payable for the purchased Shares and (B) shall provide written directives to the Company to deliver the certificates for the purchased Shares directly to such brokerage firm in order to complete the sale transaction;

 

(v)            with respect to Options, payment through a “ net exercise ” such that, without the payment of any funds, the Grantee may exercise the Option and receive the net number of Shares equal to (i) the number of Shares as to which the Option is being exercised, multiplied by (ii) a fraction, the numerator of which is the Fair Market Value per Share (on such date as is determined by the Administrator) less the exercise price per Share, and the denominator of which is such Fair Market Value per Share (the number of net Shares to be received shall be rounded down to the nearest whole number of Shares); or

 

14   Page
 

 

(vi)           any combination of the foregoing methods of payment.

 

The Administrator may at any time or from time to time, by adoption of or by amendment to the standard forms of Award Agreement described in Section 4(b) (iv) , or by other means, grant Awards that do not permit all of the foregoing forms of consideration to be used in payment for the Shares or that otherwise restrict one or more forms of consideration.

 

(c)            Taxes .             No Shares shall be delivered under the Plan to any Grantee or other person until such Grantee or other person has made arrangements acceptable to the Administrator for the satisfaction of any non-U.S., federal, state, or local income and employment tax withholding obligations, including, without limitation, obligations incident to the receipt of Shares. Upon exercise or vesting of an Award the Company shall withhold or collect from the Grantee an amount sufficient to satisfy such tax obligations, including, but not limited to, by surrender of the whole number of Shares covered by the Award sufficient to satisfy the minimum applicable tax withholding obligations incident to the exercise or vesting of an Award (reduced to the lowest whole number of Shares if such number of Shares withheld would result in withholding a fractional Share with any remaining tax withholding settled in cash).

 

8.              Exercise of Award .

 

(a)            Procedure for Exercise; Rights as a Shareholder .

 

(i)             Any Award granted hereunder shall be exercisable at such times and under such conditions as determined by the Administrator under the terms of the Plan and specified in the Award Agreement.

 

(ii)             An Award shall be deemed to be exercised when written notice of such exercise has been given to the Company in accordance with the terms of the Award by the person entitled to exercise the Award and full payment for the Shares with respect to which the Award is exercised has been made, including, to the extent selected, use of the broker-dealer sale and remittance procedure to pay the purchase price as provided in Section 7(b) (iv) .

 

(b)            Exercise of Award Following Termination of Continuous Service . In the event of termination of a Grantee’s Continuous Service for any reason other than Disability or death (but not in the event of a Grantee’s change of status from Employee to Consultant or from Consultant to Employee), such Grantee may, but only during the post-termination exercise period (but in no event later than the expiration date of the term of such Award as set forth in the Award Agreement), exercise the portion of the Grantee’s Award that was vested at the date of such termination or such other portion of the Grantee’s Award as may be determined by the Administrator. The Grantee’s Award Agreement may provide that upon the termination of the Grantee’s Continuous Service for Cause, the Grantee’s right to exercise the Award shall terminate concurrently with the termination of Grantee’s Continuous Service. In the event of a Grantee’s change of status from Employee to Consultant, an Employee’s Incentive Stock Option shall convert automatically to a Non-Qualified Stock Option on the day three months and one day following such change of status. To the extent that the Grantee’s Award was unvested at the date of termination, or if the Grantee does not exercise the vested portion of the Grantee’s Award within the post-termination exercise period, the Award shall terminate.

 

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(c)             Disability of Grantee .           In the event of termination of a Grantee’s Continuous Service as a result of his or her Disability, such Grantee may, but only within six months from the date of such termination (or such longer period as specified in the Award Agreement but in no event later than the expiration date of the term of such Award as set forth in the Award Agreement), exercise the portion of the Grantee’s Award that was vested at the date of such termination; provided, however, that if such Disability is not a “disability” as such term is defined in Section 22(e)(3) of the Code, in the case of an Incentive Stock Option such Incentive Stock Option shall automatically convert to a Non-Qualified Stock Option on the day three months and one day following such termination. To the extent that the Grantee’s Award was unvested at the date of termination, or if Grantee does not exercise the vested portion of the Grantee’s Award within the time specified herein, the Award shall terminate.

 

(d)             Death of Grantee .           In the event of a termination of the Grantee’s Continuous Service as a result of his or her death, or in the event of the death of the Grantee during the post-termination exercise period or during the six month period following the Grantee’s termination of Continuous Service as a result of his or her Disability, the Grantee’s estate or a person who acquired the right to exercise the Award by bequest or inheritance may exercise the portion of the Grantee’s Award that was vested as of the date of termination, within six months from the date of death (or such longer period as specified in the Award Agreement but in no event later than the expiration of the term of such Award as set forth in the Award Agreement). To the extent that, at the time of death, the Grantee’s Award was unvested, or if the Grantee’s estate or a person who acquired the right to exercise the Award by bequest or inheritance does not exercise the vested portion of the Grantee’s Award within the time specified herein, the Award shall terminate.

 

(e)             Extension if Exercise Prevented by Law .               Notwithstanding the foregoing, if the exercise of an Award within the applicable time periods set forth in this Section 8 is prevented by the provisions of Section 9 below, the Award shall remain exercisable until one month after the date the Grantee is notified by the Company that the Award is exercisable, but in any event no later than the expiration of the term of such Award as set forth in the Award Agreement and only in a manner and to the extent permitted under Code Section 409A.

 

9.              Conditions Upon Issuance of Shares .

 

(a)            If at any time the Administrator determines that the delivery of Shares pursuant to the exercise, vesting or any other provision of an Award is or may be unlawful under Applicable Laws, the vesting or right to exercise an Award or to otherwise receive Shares pursuant to the terms of an Award shall be suspended until the Administrator determines that such delivery is lawful and shall be further subject to the approval of counsel for the Company with respect to such compliance. The Company shall have no obligation to effect any registration or qualification of the Shares under federal or state laws.

 

(b)            As a condition to the exercise of an Award, the Company may require the person exercising such Award to represent and warrant at the time of any such exercise that the Shares are being purchased only for investment and without any present intention to sell or distribute such Shares if, in the opinion of counsel for the Company, such a representation is required by any Applicable Laws.

 

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10.            Adjustments Upon Changes in Capitalization .           Subject to any required action by the shareholders of the Company and Section 11 hereof, the number of Shares covered by each outstanding Award, and the number of Shares that have been authorized for issuance under the Plan but as to which no Awards have yet been granted or that have been returned to the Plan, the exercise or purchase price of each such outstanding Award, the maximum number of Shares with respect to which Awards may be granted to any Grantee in any calendar year, as well as any other terms that the Administrator determines require adjustment shall be proportionately adjusted for (i) any increase or decrease in the number of issued Shares resulting from a stock split, reverse stock split, stock dividend, recapitalization, combination or reclassification of the Shares, or similar transaction affecting the Shares; (ii) any other increase or decrease in the number of issued Shares effected without receipt of consideration by the Company; or (iii)  any other transaction with respect to Common Stock including a corporate merger, consolidation, acquisition of property or stock, separation (including a spin-off or other distribution of stock or property), reorganization, liquidation (whether partial or complete) or any similar transaction; provided , however that conversion of any convertible securities of the Company shall not be deemed to have been “effected without receipt of consideration.” In the event of any distribution of cash or other assets to shareholders other than a normal cash dividend, the Administrator shall also make such adjustments as provided in this Section 10 or substitute, exchange or grant Awards to effect such adjustments (collectively “ adjustments ”). Any such adjustments to outstanding Awards will be effected in a manner that precludes the enlargement of rights and benefits under such Awards. In connection with the foregoing adjustments, the Administrator may, in its discretion, prohibit the exercise of Awards or other issuance of Shares, cash or other consideration pursuant to Awards during certain periods of time. Except as the Administrator determines, no issuance by the Company of shares of any class, or securities convertible into shares of any class, shall affect, and no adjustment by reason hereof shall be made with respect to, the number or price of Shares subject to an Award.

 

11.            Corporate Transactions and Changes in Control .

 

(a)            Acceleration of Award Upon Corporate Transaction or Change in Control .           To the extent practicable, not less than thirty (30) days prior to any actual or anticipated Corporate Transaction or Change in Control (which period shall be determined by the Administrator), or if not practicable, at the time of an actual Corporate Transaction or Change in Control, all Awards granted under the Plan shall vest and shall become exercisable for (i) such reasonable period, as determined by the Administrator, so that the Awards may be exercised by Grantees, in the event of an actual Corporate Transaction; or (ii) the exercise period provided for in the respective Award Agreement, in connection with a Change in Control.

 

(b)            Effect of Acceleration on Incentive Stock Options .           Any Incentive Stock Option accelerated under this Section 11 in connection with a Corporate Transaction or Change in Control shall remain exercisable as an Incentive Stock Option under the Code only to the extent the $100,000 dollar limitation of Section 422(d) of the Code is not exceeded.

 

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12.            Effective Date and Term of Plan .           The Plan shall become effective upon the earlier to occur of its adoption by the Board or its approval by the shareholders of the Company. It shall continue in effect for a term of ten years unless sooner terminated. Subject to Section 17 , below, and Applicable Laws, Awards may be granted under the Plan upon its becoming effective.

 

13.            Amendment, Suspension or Termination of the Plan .          

 

(a)            The Board may at any time amend, suspend or terminate the Plan; provided, however, that no such amendment shall be made without the approval of the Company’s shareholders to the extent such approval is required by Applicable Laws.

 

(b)           No Award may be granted during any suspension of the Plan or after termination of the Plan.

 

(c)            No suspension or termination of the Plan (including termination of the Plan under Section 11 , above) shall adversely affect any rights under Awards already granted to a Grantee.

 

14.          Reservation of Shares .

 

(a)            The Company, during the term of the Plan, will at all times reserve and keep available such number of Shares as shall be sufficient to satisfy the requirements of the Plan.

 

(b)            The inability of the Company to obtain authority from any regulatory body having jurisdiction, which authority is deemed by the Company’s counsel to be necessary to the lawful issuance and sale of any Shares hereunder, shall relieve the Company of any liability in respect of the failure to issue or sell such Shares as to which such requisite authority shall not have been obtained.

 

15.            No Effect on Terms of Employment/Consulting Relationship .           The Plan shall not confer upon any Grantee any right with respect to the Grantee’s Continuous Service, nor shall it interfere in any way with his or her right or the right of the Company or any Related Entity to terminate the Grantee’s Continuous Service at any time, with or without cause, including, but not limited to, Cause, and with or without notice. The ability of the Company or any Related Entity to terminate the employment of a Grantee who is employed at will is in no way affected by its determination that the Grantee’s Continuous Service has been terminated for Cause for the purposes of this Plan.

 

16.            No Effect on Retirement and Other Benefit Plans .           Except as specifically provided in a retirement or other benefit plan of the Company or a Related Entity, Awards shall not be deemed compensation for purposes of computing benefits or contributions under any retirement plan of the Company or a Related Entity, and shall not affect any benefits under any other benefit plan of any kind or any benefit plan subsequently instituted under which the availability or amount of benefits is related to level of compensation. The Plan is not a “Pension Plan” or “Welfare Plan” under the Employee Retirement Income Security Act of 1974, as amended.

 

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17.            Shareholder Approval .           The grant of Incentive Stock Options under the Plan shall be subject to approval of the Plan by the shareholders of the Company within twelve (12) months before or after the date the Plan is adopted excluding Incentive Stock Options issued in substitution for outstanding Incentive Stock Options pursuant to Section 424(a) of the Code. Such shareholder approval shall be obtained in the degree and manner required under Applicable Laws. The Administrator may grant Incentive Stock Options under the Plan prior to approval by the shareholders, but until such approval is obtained, no such Incentive Stock Option shall be exercisable. In the event that shareholder approval is not obtained within the twelve (12) month period provided above, all Incentive Stock Options previously granted under the Plan shall be exercisable as Non-Qualified Stock Options.

 

18.            Effect of Section 162(m) of the Code .           Section 162(m) of the Code does not apply to the Plan prior to the Registration Date. Following the Registration Date, the Plan, and all Awards issued thereunder, are intended to be exempt from the application of Section 162(m) of the Code, which restricts under certain circumstances the Federal income tax deduction for compensation paid by a public company to named executives in excess of $1 million per year. The exemption is based on Treasury Regulation Section 1.162-27 (f), in the form existing on the effective date of the Plan, with the understanding that such regulation generally exempts from the application of Section 162(m) of the Code compensation paid pursuant to a plan that existed before a company becomes publicly held. Under such Treasury Regulation, this exemption is available to the Plan for the duration of the period that lasts until the earlier of (i) the expiration of the Plan; (ii) the material modification of the Plan; (iii) the exhaustion of the maximum number of shares of Common Stock available for Awards under the Plan, as set forth in Section 3(a) ; (iv) the first meeting of shareholders at which Directors are to be elected that occurs after the close of the third calendar year following the calendar year in which the Company first becomes subject to the reporting obligations of Section 13 or 15(d) of the Exchange Act; or (v) such other date required by Section 162(m) of the Code and the rules and regulations promulgated thereunder. To the extent that the Administrator determines as of the date of grant of an Award that (i) the Award is intended to qualify as Performance-Based Compensation; and (ii) the exemption described above is no longer available with respect to such Award, such Award shall not be effective until any shareholder approval required under Section 162(m) of the Code has been obtained.

 

19.            Unfunded Obligation .           Grantees shall have the status of general unsecured creditors of the Company. Any amounts payable to Grantees pursuant to the Plan shall be unfunded and unsecured obligations for all purposes, including, without limitation, Title I of the Employee Retirement Income Security Act of 1974, as amended. Neither the Company nor any Related Entity shall be required to segregate any monies from its general funds, or to create any trusts, or establish any special accounts with respect to such obligations. The Company shall retain at all times beneficial ownership of any investments, including trust investments, which the Company may make to fulfill its payment obligations hereunder. Any investments or the creation or maintenance of any trust or any Grantee account shall not create or constitute a trust or fiduciary relationship between the Administrator, the Company or any Related Entity and a Grantee, or otherwise create any vested or beneficial interest in any Grantee or the Grantee’s creditors in any assets of the Company or a Related Entity. The Grantees shall have no claim against the Company or any Related Entity for any changes in the value of any assets that may be invested or reinvested by the Company with respect to the Plan.

 

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20.            Construction .               Captions and titles contained herein are for convenience only and shall not affect the meaning or interpretation of any provision of the Plan. Except when otherwise indicated by the context, the singular shall include the plural and the plural shall include the singular. Use of the term “ or ” is not intended to be exclusive, unless the context clearly requires otherwise.

 

21.            Nonexclusivity of the Plan .           Neither the adoption of the Plan by the Board, the submission of the Plan to the shareholders of the Company for approval, nor any provision of the Plan will be construed as creating any limitations on the power of the Board to adopt such additional compensation arrangements as it may deem desirable, including, without limitation, the granting of Awards otherwise than under the Plan, and such arrangements may be either generally applicable or applicable only in specific cases.

 

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Exhibit 10.2

 

RESEARCH AGREEMENT

Between

AVRA Medical Robotics, Inc.

And

UNIVERSITY OF CENTRAL FLORIDA

12201 Research Parkway, Suite 501, Orlando, FL 32826-3246

 

This research agreement (“Agreement”) is made and entered into by and between AVRA Medical Robotics, lnc. (“Company”) and The University of Central Florida Board of Trustees (“UCF”), (individually, “Party”, or collectively, “Parties”).

 

The terms of this Agreement are intended to provide the administrative framework for the Parties cooperating in the performance of this project as outlined in Appendix A. UCF’s sole obligations under this Agreement are set forth in the terms and conditions of this Agreement.

 

1. STATEMENT OF WORK

 

UCF shall make all reasonable efforts to conduct its work under this Agreement as outlined in the Statement of Work (“SOW”), set forth in Appendix A and incorporated herein by reference.

 

2. TERM

 

This Agreement is effective for the period beginning May 1, 2016 (“Effective Date”) and shall not extend beyond April 30, 2017 unless extended by written modification of this Agreement.

 

3. FINANCIAL SUPPORT

 

This is a fixed price Agreement in the amount of $163,307 U.S. for the project and $43,548 for the assignment of intellectual property rights as outlined in Article 9 and Appendix D for a total of $206,855 (the “Fixed Price”) and shall not be modified unless agreed upon by both Parties in writing. Serially numbered invoices along with deliverables shall be sent in accordance with Appendix A and the Payment Schedule below.

 

Invoices shall be submitted to:

Name: Barry Cohen

Address: AVRA Medical Robotics, Inc.

Address: 1600 S.E 15 th Street

City, State Zip: Ft. Lauderdale, FL 33316

 

Upon receipt of invoice(s), payment shall be made to the University of Central Florida and remitted to the following address:           

 

University of Central Florida

Contracts & Grants Payment

PO Box 160118

Orlando, FL 32816-0118

 

PAYMENT SCHEDULE

 

Payment Due

Date

  Amount     Deliverable
30 Days upon receipt   $ 43,548     Invoice for IP assignment
30 Days upon receipt   $ 40,827     Invoice for payment
08/1/2016   $ 40,827     Quarterly Development Report
11/1/2016   $ 40,827     Quarterly Development Report
02/1/2017   $ 40,826     Quarterly Development Report
TOTAL   $ 206,855      

 

     

 

  

4. ADMINISTRATIVE CONSIDERATION

 

The policies of UCF concerning salaries and fringe benefits are to apply.

 

5. ADMINISTRATIVE PERSONNEL

 

  University of Central Florida
   
Technical Contact: Barry Cohen Technical Contact: Zhihua Qu
Company Name: AVRA Medical Robotics, Inc. University of Central Florida
Address: 1600 S.E. 15 th St.

Department: Computer Science

4000 Central Florida Boulevard

City, State, Zip: Ft. Lauderdale, FL 33316 Orlando, FL 32816
Phone: 954-478-1410 Phone : 407-823-5976
Fax : Fax :
Email: bcohen@avramedicalrobotics.com Email: qu@ucf.edu
   
Contractual Contact : Barry Cohen Contractual Contact : Ginny Pellam
Company Name AVRA Medical Robotics, Inc. University of Central Florida
Address: 1600 S.E. 15 th St.

Office of Research & Commercialization

12201 Research Parkway, Suite 501

City, State, Zip: Ft. Lauderdale, FL 33316 Orlando, FL 32826-3246
Phone: 954-478-1410 Phone: 407-823-3285
Fax : _ Fax :
Email: bcohen@avramedicalrobotics.com Email : Ginny.Pellam@ucf.edu
   
  Intellectual Property: Andrea Adkins
  Email: Andrea.Adkins@ucf.edu
  Phone: 407-823-0138

 

6. AUDIT

 

All costs incurred in the performance of this Agreement will be subject to audit by any cognizant audit agency.

 

7. EQUIPMENT AND PROPRIETARY MATERIALS

 

UCF will be accountable for and hold title to all equipment purchased under this Agreement and will be responsible for employing it for the overall purpose of the project. UCF agrees to maintain sufficient records to enable Company to fulfill its accountability. Each Party will be accountable for and keep title to all equipment it owns and utilizes under this Agreement.

 

8. PUBLICATION

 

Any research or research results generated in conjunction herewith shall be subject to unrestricted publication or dissemination provided that such publication or dissemination will not compromise patent rights or inadvertently divulge proprietary information of a Party.

 

9. INTELLECTUAL PROPERTY

 

“Intellectual Property” means individually and collectively all inventions, improvements and/or discoveries, patentable or unpatentable, copyrightable or uncopyrightable, including but not limited to mask works, computer software, both object and source code, data, data bases and works of authorship.

 

     

 

  

Intellectual Property developed solely by Company shall be solely and exclusively owned by Company “Company Intellectual Property”. Intellectual Property developed solely by UCF in performance of the SOW shall be solely and exclusively owned by UCF “UCF Intellectual Property”. “Joint Intellectual Property” means any Intellectual Property developed jointly by Company and UCF under this Agreement. Joint Intellectual Property will be owned jointly by Company and UCF. Company and UCF agree that Company will have the following agreed to options concerning further dissemination and use of all Joint Intellectual Property under this Agreement:

 

A transfer of ownership of UCF Intellectual Property and UCF’s interest in Joint Intellectual Property with pre-set terms which is fully described in Appendix D, Intellectual Property Option, which is attached hereto and incorporated herein.

 

UCF will promptly disclose Intellectual Property received by UCF’s Office of Technology Transfer to Company’s contractual or intellectual property representative as shown in Article 5. Such disclosure will be made by UCF to Company under the provisions of Article 12 - Confidential Information. Company has ninety (90) days from the receipt of the Intellectual Property disclosure to request UCF assign ownership to Company. If Company elects not to request assignment of Intellectual Property from UCF, UCF shall be free to act in accordance to its own policies for intellectual property protection and licensing without any further obligations to Company.

 

UCF retains an irrevocable, world-wide, royalty-free, non-exclusive right and license to use the UCF Intellectual Property for teaching, research, and educational purposes, subject to the confidentiality obligations herein. UCF shall have the right to sublicense its rights under this section to one or more non- profit academic institutions, subject to the confidentiality obligations herein.

 

“Background Intellectual Property” means Intellectual Property which was in existence prior to the Effective Date of this Agreement, or which is created or developed by a Party outside the course of the SOW. The Parties agree that Background Intellectual Property of Company and UCF is their separate property, respectively, and is not affected by this Agreement. Neither Party shall acquire any claims to or rights in the Background Intellectual Property of the other Party by this Agreement or performance hereunder.

 

Nothing in this Agreement shall circumvent or restrict either Party’s pre-existing obligations with the United States government pertaining to any kind of Intellectual Property, including but not limited to such pre-existing obligations contained in grants, contracts and other types of agreements or arrangements between either Party and the U.S. government. These obligations may include granting licenses to the U.S. government for certain Intellectual Property which is being developed.

 

Notwithstanding any provision to the contrary in this Agreement, UCF shall retain the right to practice any Intellectual Property developed hereunder for its own academic, non-commercial research and teaching purposes.

 

10. EXPORT CONTROL

 

Each Party acknowledges that it is subject to and agrees to abide by the United States laws and regulations controlling the export or transfer of information, technical data, software, items, materials, mockups/prototypes, biological materials and other items, (including the Arms Export control Act (“AECA”), as amended, an enumerated in the International Traffic Arms Regulations (“ITAR”) 22 CFR Parts 123 - 130, and the Export Administration Act (“EAA”) of 1979 enumerated in the Export Administration Regulations (“EAR”) 15 CFR Parts 300 - 799). The transfer of such items and technical data may require a license from the cognizant agency of the U.S. Government or written assurances by Company that it shall not export such items to certain foreign countries and/or foreign persons without prior approval of the cognizant agency. UCF neither represents that a license is or is not required or that, if required, it shall be issued.

 

     

 

  

11. ASSUMPTION OF RISK

 

Each Party assumes any and all risks of personal injury and property damage attributable to the negligent acts or omissions of that Party and its officers, employees, servants, and agents thereof while acting within the scope of their employment. UCF warrants and represents that it is self-funded for liability insurance, both public and property, with said protection being applicable to officers, employees, servants, and agents while acting within the scope of their employment by UCF. Company and UCF further agree that nothing contained herein shall be construed or interpreted as (1) denying to either Party any remedy or defense available to such Party under the laws of the State of Florida: (2) the consent of the State of Florida or its agents and agencies to be sued; or (3) a waiver of sovereign immunity of the State of Florida beyond the waiver provided in Section 768.28, Florida Statutes.

 

12. CONFIDENTIAL INFORMATION

 

The Parties have executed a Confidential Disclosure Agreement with an Effective Date of May 13, 2016 which is incorporated herein by reference and attached as Appendix C, including all associated modifications.

 

13. REPORTING REQUIREMENTS

 

UCF shall render to the Company technical progress reports in accordance with Appendix A.

 

14. NO WARRANTIES

 

UCF, AS A NON-PROFIT EDUCATIONAL INSTITUTION, PERFORMS RESEARCH AND RELATED SERVICES ON A BEST EFFORT BASIS. UCF MAKES NO REPRESENTATIONS AND EXTENDS NO WARRANTIES OF ANY KIND, EITHER EXPRESS OR IMPLIED WITH REGARD TO THE RESEARCH, INTELLECTUAL PROPERTY, AND/OR PROPRIETARY MATERIALS. THERE ARE NO EXPRESS OR IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, OR THAT COMPANY’S USE OF THE RESEARCH DELIVERABLES OR INTELLECTUAL PROPERTY WILL NOT INFRINGE ANY THIRD PARTY PATENT, COPYRIGHT, TRADEMARK, OR OTHER THIRD PARTY RIGHTS. UCF MAKES NO REPRESENTATION AS TO THE USEFULNESS OF RESEARCH DELIVERABLES, INTELLECTUAL PROPERTY, OR PROPRIETARY MATERIALS. IF COMPANY CHOOSES TO EXPLOIT RESEARCH DELIVERABLES, INTELLECTUAL PROPERTY, OR PROPRIETARY MATERIALS IN ANY MANNER WHATSOEVER, IT DOES SO AT ITS OWN RISK.

 

15. FORCE MAJEURE

 

Except as otherwise provided herein, neither Party shall be obligated to perform, and neither Party shall be deemed to be in default of its performance, if prevented by: (a) fire, earthquake, hurricane, wind, flood, act of God, riot, or civil commotion or (b) any law, ordinance, rule, regulation, or order of any public or military authority stemming from the existence of economic or energy controls, hostilities, war, terrorism or governmental law and regulation, or (c) labor dispute which results in a strike or work stoppage affecting the performance under this Agreement.

 

16. GOVERNING LAW

 

This Agreement is governed and construed in accordance with the laws of the State of Florida without regard to its conflict of laws provisions. The Parties shall bring any action in connection with this Agreement in courts of competent jurisdiction in Orange County, Florida. The Parties specifically waive the right to any other jurisdiction and venue, and the defense based on inconvenient forum.

 

17. LIMITATION OF DAMAGES

 

In no event will UCF be responsible for any direct, indirect, incidental damages, consequential damages, exemplary damages of any kind, lost goodwill, lost profits, lost business and/or any indirect economic damages whatsoever regardless of whether such damages arise from claims based upon contract, negligence, tort (including strict liability or other legal theory), a breach of any warranty or term of this Agreement, and regardless of whether a Party was advised or had reason to know of the possibility of incurring such damages in advance.

 

18. NON-USE OF NAMES

 

Neither Party may use each other’s name or trademarks in any promotion, statement, advertisement, press release or communications to the general public or any third party without each other’s express written consent. Any proposed public statement, advertisement, press release or communications by either Party shall be submitted to the other Party for its review and written approval at least thirty (30) days prior to the planned dissemination or publication, unless otherwise required. However, nothing shall prohibit either Party from complying with Florida Statute 1004.22(2) regarding sponsored research activities.

 

     

 

  

19. NO ASSIGNMENT

 

Neither Party may assign or transfer its rights and remedies nor transfer its obligations or subcontract for any of the services to be performed under this Agreement, in whole or part, without the prior written consent of the other Party. This Agreement is binding upon the Parties and their permitted successors and assigns.

 

20. INDEPENDENT CONTRACTOR

 

In the performance of all services under this Agreement, each Party shall be deemed to be, and shall be, an independent contractor. This Agreement shall not be deemed to create any other form of employment relationship or business organization between the Parties. Neither Party is authorized or empowered to act as agent for the other for any purpose and shall not, on behalf of the other, enter into any contract, warranty or representation as to any matter. Neither Party shall be bound by the acts or conduct of the other.

 

21. REMEDIES

 

The Parties understand and agree that a Party may suffer irreparable harm in the event of breach of any of the obligations under this Agreement and that monetary damages may be inadequate to compensate for such breach. Accordingly, the Parties agree that, in the event of a breach, or threatened breach by a Party, of any of the provisions of this Agreement a Party, in addition to any other available rights, remedies or damages, a Party shall be entitled to seek a temporary restraining order, preliminary injunction and permanent injunction in order to prevent or to restrain any such breach by the Party, or its employees, servants, agents and any and all persons directly or indirectly acting for the Party.

 

22. TERMINATION

 

Either Party may terminate this Agreement for convenience upon thirty (30) days written notification to the other. In the event of termination, UCF will be reimbursed for all costs incurred and any non-cancelable obligations properly incurred through the date of termination.

 

Either Party may terminate this Agreement in the event of failure of the other Party to fulfill any of its obligations under this Agreement. Prior to termination, the terminating Party shall provide to the other Party written notification regarding the reason(s) for termination. If the Parties cannot reach an agreement within fourteen (14) calendar days from notice of termination on the corrective measures to be taken and the schedule for corrective action, the terminating Party may terminate this agreement by providing an additional fourteen (14) calendar days written notice to the other. Said notice shall specify the effective time and date of termination.

 

23. MODIFICATIONS

 

Modifications to this Agreement may be made only in writing signed by authorized signatories of both Parties.

 

24. COUNTERPARTS

 

This Agreement may be executed in counterparts, each of which shall be considered an original, but which together shall constitute but one and the same Agreement.

 

     

 

  

25. WAIVER

 

No failure or delay by a Party hereto to insist on the strict performance of any term of this Agreement, or to exercise any right or remedy consequent to a breach thereof, shall constitute a waiver of any breach or any subsequent breach of such term. No waiver of any breach hereunder shall affect or alter the remaining terms of this Agreement, but each and every term of this Agreement shall continue in full force and effect with respect to any other then existing or subsequent breach thereof.

 

26. SEVERABILITY

 

If any one or more of the provisions of this Agreement shall be held to be invalid, illegal or unenforceable, the validity, legality or enforceability of the remaining provisions of this Agreement shall not be in any way affected or impaired thereby and shall remain in full force and effect.

 

27. ENTIRE AGREEMENT

 

This Agreement consists of the following parts with the following order of precedence in the event of any conflict:

 

a. Articles 1 - 27  
b. Appendix A: Scope of Work & Deliverables
c. Appendix B: Budget
d. Appendix C: Confidential Disclosure Agreement
e. Appendix D: Intellectual Property Option

 

and constitutes the entire Agreement of the Parties with respect to the subject matter hereof. Any other understanding, purchase order, or agreement, whether written or oral, relating to the subject matter is hereby superseded.

 

IN WITNESS WHEREOF, the Parties hereto have executed this Agreement with the Effective Date shown herein:

 

AVRA MEDICAL ROBOTICS INC.  

THE UNIVERSITY OF CENTRAL FLORIDA,

BOARD OF TRUSTEES

     
/s/ Barry Cohen   /s/ Ginny Pellam
Name: Barry Cohen   Name: Ginny Pellam
Title: CEO   Title: Sr. Contract Manager
5/17/16   5/17/14
Date   Date

  

    Approved as to Form and Legality
      5-12-16

 

     

 

  

APPENDIX A: SCOPE OF WORK & DELIVERABLES

 

UCF and/or Company shall perform the work described in the attached page.

 

The following deliverable items are required:

 

Due Date   Deliverable
Activity Status Reports   Bi-weekly via email
     
August 1, 2016   Quarterly Development Report
     
November 1, 2016   Quarterly Development Report
     
February 1, 2017   Quarterly Development Report
     
May 30, 2017   Final Report

 

     

 

  

APPENDIX A: SCOPE OF WORK & DELIVERABLES

 

     

 

 

An Intelligent Medical Robotic Device

Statement of Work

 

Professors Zhihua Qu and Eytan Pollak

Department of Electrical and Computer Engineering

University of Central Florida

 

A white paper submitted through

Office of Research & Commercialization

University of Central Florida (UCF)

12201 Research Parkway, Ste. 501

Orlando, FL 32826-3246

 

December 10th, 2015

 

1. Scope

 

AVRA Medical Robotics is currently engaged in the development of a prototype surgical robotic device supporting a minimal invasive surgical facial corrections. The prototype will be based on commercial technologies and capabilities to the greatest extent possible. To facilitate this development effort, AVRA is looking for experts with knowledge in navigation and control algorithms that can support the development and integration of such a prototype robotic medical device. Professors Zhihua Qu and Eytan Pollak (Visiting Research Professor) at UCF have extensive experience in sensing, control and integration of robotic devices. Drs. Zhihua Qu and Eytan Pollak together with UCF students under their supervision will provide support to AVRA for its development, integration and testing of the system outlined in section 3.

 

2. Points of Contact / Period of Performance

 

Development of algorithms, subsequent integration, verification of functionality and final deliverables shall commence on January 1, 2016 and be completed by September 30, 2016. Subsequently, UCF shall have 3 months to pursue joint publication(s) and complete the prototype documentation. Thus, the period of performance (POP) for this effort shall be contract award through December 31 2016.

 

The points of contact (POC) for all efforts associated with this Statement of Work (SOW):

 

AVRA Technical POC

Barry Cohen

AVRA Medical Robotics Inc.

14th Floor, 555 Fifth Avenue, New York, NY 10017

954.478.1410

bcohen@avramedicalrobotics.com

 

   Page 1  

 

 

UCF Technical POC 

Zhihua Qu, Pegasus Professor & Chair

Department of Electrical and Computer Engineering

University of Central Florida

4000 Central Florida Blvd.

Orlando, Florida 32816-2450

407.823.5976 (Work)

qu@ucf.edu

 

AVRA Contract Office POC

Barry Cohen

AVRA Medical Robotics Inc.

14th Floor, 555 Fifth Avenue, New York, NY 10017

954.478.1410

bcohen@avramedicalrobotics.com

 

UCF Contract Office POC

Ginny Pellam

Senior Contract Manager

University of Central Florida

Office of Research and Commercialization

12201 Research Parkway, Suite 501

Orlando, FL 32826-3246

407-823-3285

Ginny.PeIlam@ucf.edu

 

3. Requirements

 

UCF shall pursue the following tasks for the development of the surgical robotic device:

o UCF will develop a design approach that shall be used for development of the surgical robotic device.
o The design approach shall be documented and shall be provided to AVRA for review and approval.
o UCF shall develop a simplified robotic system model that shall provide a framework for the development of the navigation and control algorithms.
o UCF shall develop a prototype navigation and control software for the robotic medical device.
o UCF shall integrate the necessary robotic subcomponents that shall be purchased by AVRA and deliver to UCF Medical Robotic Laboratory as describe in a top level block diagram in figure 1.
o UCF shall conduct testing and verification of the robotic device at the UCF Medical Robotic Lab.
o UCF shall develop a prototype software codes that navigate and control the medical robotic device.

 

4. Budget and Deliverables

 

The budget for the performance period is

 

   Page 2  

 

  

o $163,307 from AVRA for the project cost.
o $54,433 from Florida High Tech Council (which is 1:3 match). Note, funding from FHTC is not guarantee. A separate application will need to be submitted for consideration and is based on availability of funding.

 

The funding from AVRA will be used to support 1.0 graduate student who will be supervised to perform the aforementioned tasks. The FHTC matching funds, if approved, will be used to support 1.5 students. Since FHTC match is 33% of AVRA portion, AVRA will provide the funding so that the project total is $217,740. In addition, AVRA will provide $43,548 (20% of the total project cost as required by UCF regulation) for outright ownership of IP. Hence, the total cost for AVRA is $261,288.

 

Activity status reports, research report(s) and other documentation shall be provided by UCF to AVRA. AVRA and UCF will jointly agree on formats and delivery dates of the reports and documents.

 

o Activity Status Reports shall be provided bi-weekly via email and contain short summary of accomplishments, and/or issues to overall tasks and schedule.
o Development reports shall be provided quarterly and contain summary of prior-period accomplishments, future plans and estimate to complete defined tasks.
o A Report shall be delivered and accepted by AVRA, at the conclusion of each phase.
o A prototype software code that navigates and controls the medical robotic device.

 

5. Final Acceptance

 

o Final acceptance test of the navigation, controls and functionality of the robotic device shall be held at the UCF Medical Robotics Lab.
o Robotic movement and functionality of multiple robotic profiles that agreed by AVRA and UCF shall be demonstrated.
o UCF shall be responsible to correct any issues that are mutually agreed upon in a timely manner.
o Results of the acceptance test will be documented as part of the final report.

 

 

   Page 3  

 

  

APPENDIX B: PROGRAM BUDGET (Excludes IP Assignment fee)

 

Sponsor: AVRA
Title: An intelligent Medical Robotic Device
Dates: 05/1/2016-04/30/2017

 

    INDUSTRY        
    Year 1     Total  
A. Senior Personnel                
Zhihua Qu - PI (1 cal month/year)   $ 24,858          
                 
Total Senior Personnel   $ 24,858     $ 24,858  
                 
B. Other Personnel                
0   Post Doctoral Associates   $ -     $ -  
0   Other Professionals (Technicians)   $ -     $ -  
2   Graduate Students, PhD   $ 26,000     $ 26,000  
0   Graduate Students, Masters   $ -     $ -  
0   Undergraduate Students   $ -     $ -  
0   Other   $ -     $ -  
Total Other Personnel   $ 26,000     $ 26,000  
                 
Total Salaries and Wages (A+B)   $ 50,858     $ 50,858  
                 
C. Fringe Benefits                
Faculty @ 28.95%   $ 7,196     $ 7,196  
Post Doc @ 48.35%, 34.35%, 24.35%*   $ -     $ -  
OPS @ 2.25%, 48.25%, 34.25%, 24.25%**   $ -     $ -  
Students @ 0.65%, 54.30%***   $ 169     $ 169  
Total Fringe Benefits   $ 7,365     $ 7,365  
                 
Total Salaries, Wages and Fringe Benefits   $ 58,223     $ 58,223  
                 
D. Equipment                
See Equipment Tab   $ -     $ -  
Total Equipment   $ -     $ -  
                 
E. Travel                
Domestic (See Travel Tab)   $ -     $ -  
Foreign (See Travel Tab)   $ 7,000     $ 7,000  
Total Travel   $ 7,000     $ 7,000  
                 
F. Participant Support Costs                
Stipends   $ -     $ -  
Travel   $ -     $ -  
Subsistence   $ -     $ -  
Other   $ -     $ -  
Total Participant Support Costs (0)   $ -     $ -  
                 
G. Other Direct Costs                
Material and Supplies (See Supplies Tab)   $ 9,700     $ 9,700  
Publication Costs/Documentation   $ 4,000     $ 4,000  
Consultant Services - Dr. Poliak   $ 26,000     $ 26,000  
Computer (ADPE) Services   $ -     $ -  
Subcontract - NONE   $ -     $ -  
2  Tuition   $ 10,119     $ 10,119  
Total Other Costs   $ 49,819     $ 49,819  
                 
Total Direct Costs   $ 115,042     $ 115,042  
Indirect Costs, Rate 46%, MTDC   $ 48,265     $ 48,265  
Total Direct and Indirect Costs   $ 163,307     $ 163,307

 

   

 

 

APPENDIX C: CONFIDENTIAL DISCLOSURE AGREEMENT

 

This agreement (“Agreement”) is made effective May 13, 2016 (“Effective Date”) between The University of Central Florida Board of Trustees (“UCF”) and AVRA Medical Robotics, Inc. (“Company”), a Company of the State of Florida.

 

UCF shall be: ¨ a Disclosing Party x a Receiving Party ¨ both
   
Company shall be: x a Disclosing Party ¨ Receiving Party ¨ both

 

The scientific/technical representatives of the parties are:

 

UCF:

 

Dr. Zhihua Qu

 

 

Company:

 

Barry Cohen

 

 

 

In consideration of the Purpose, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereby agree as follows:

1. Scope and Purpose

 

The Disclosing Party (“DP”) is in possession of information which DP considers confidential and in which DP has a proprietary interest (“Information”), which is generally described as:

 

UCF:

 

None

 

 

Company:

 

Prototype surgical robotic devices.

 

 

The Receiving Party (“RP”) wishes to receive disclosure of the Information from DP and agrees to hold that disclosure in confidence subject to the terms and conditions in this Agreement. DP is willing to make this disclosure to RP for the purpose(s) of:

 

To facilitate this development in navigation and control algorithms that will support the development and integration of a prototype robotic medical device.

 

(“Purpose”).

 

     

 

   

2. Protected Information

 

2.1 Information. The Information is a valuable asset of DP. DP has a proprietary right and interest in the Information. Information includes any confidential or proprietary information, knowledge, software, documents, drawings, sketches, models, designs, data, memoranda, tapes, records, material and/or know-how whatsoever, provided by DP.

 

2.2 Marking. All Information disclosed to RP in written form shall be clearly marked as confidential or proprietary by DP. All Information disclosed orally or in any other form shall be identified as confidential or proprietary by DP at the time of disclosure, summarized in a writing clearly marked as confidential or proprietary, and delivered to the RP within thirty (30) days of disclosure by DP.

 

3. Duties

 

3.1 Permitted Use. RP will use DP’s Information only for the Purpose as provided in the Agreement, and any other use must be defined in advance by a separate document executed by the parties. RP may disclose the Information to employees who: 1) have a need to know the Information in order to explore or facilitate the Purpose and 2) have agreed to, or have a duty to, hold such Information in confidence in a manner consistent with the terms of this Agreement.

 

3.2 Unauthorized Use. No license (express, implied, by estoppel, or otherwise) or intellectual property right is conveyed by this Agreement, except for the limited right to use Information for the Purpose. RP shall protect DP’s Information from unauthorized use, and unauthorized or accidental disclosure, by the exercise of the same degree of care as it employs to protect its own information of a like nature, but not less than reasonable care.

 

3.3 Governmental Rights. RP understands that DP’s Information may have been developed under a grant or contract from the federal government of the United States or the government of the State of Florida. The federal or state government may be entitled to certain rights in the Information and may also be entitled to exercise certain rights to the Information. DP agrees to provide the RP with further information about any governmental rights as part of the Information if the RP requests this information in writing.

 

3.4 Export Control. Each party acknowledges that it is subject to and agrees to abide by the United States laws and regulations controlling the export or transfer of information, technical data, software, items, materials, mockups/prototypes, biological materials and other items, (including the Arms Export Control Act (“AECA”), as amended, an enumerated in the International Traffic Anns Regulations (“ITAR”) 22 CFR Parts 123 - 130, and the Export Administration Act (“EAA”) of 1979 enumerated in the Export Administration Regulations (“EAR”) 15 CFR Parts 300 - 799). The transfer of such items and technical data may require a license from the cognizant agency of the U.S. Government or written assurances by Company that it shall not export such items to certain foreign countries and/or foreign persons without prior approval of the cognizant agency. UCF neither represents that a license is or is not required or that, if required, it shall be issued.

 

4. Term and Termination

 

4.1 Term. RP will use the Information only during the term of the Agreement, which begins on the Effective Date written above and terminates on April 30, 2017 unless terminated earlier (“Term”). Each party may terminate this Agreement upon thirty (30) days written notice to the other party.

 

4.2 Non-Disclosure Term. Termination shall not affect RP obligations with respect to Information disclosed under this Agreement, but such obligations shall continue in accordance with this paragraph 4.2. RP agrees that it shall, to the exten t permitted by law, keep in confidence and not disclose any part of DP’s information, in any form, to a third party or parties for a three (3) year period beginning on the Effective Date of this Agreement.

 

4.3 Termination Obligations. Upon termination of this Agreement, the RP will return or destroy all Information provided by DP, together with all copies, other forms of reproduction, or description of the Information made by the RP, except that RP may retain one copy of Information for legal and archival purposes only.

 

5. Excluded Information

 

The RP shall not be liable for disclosing DP’s Information to others that is evidenced by written record as:

a) already known to the RP at the time of disclosure;

 

    2  

 

 

b)  generally available to the public or becomes available to the public through no fault of the RP;

c)  developed independently of and without reference to DP’s Information;

d)  received from a third party who had a legal right to disclose such information without restriction;

e)  disclosed under operation of law, regulation, or in response to a judicial, administrative or legislative order, but the RP shall, to the extent permitted by law, first notify the DP to provide the DP an opportunity to prevent disclosure; or

f)  disclosed by RP with DP’s prior written approval.

 

6. Correspondence

 

Addresses of the parties for correspondence concerning this Agreement are:

 

For Company: For UCF:
(Name) Barry Cohen (Name) Ginny Pellam
(Title) (Title) Sr. Contract Manager
Address: Address:
1600 S.E. 15 th St. Office of Research and Commercialization
Ft. Lauderdale, FL 33316 12201 Research Parkway, Suite 501
Orlando, FL 32826-3246

 

This information may be revised by written notice to the other party.

 

7. Miscellaneous

 

7.1 Injunctive Relief. RP acknowledges that a breach by it of any of the terms of this Agreement may cause irreparable harm to DP and that damages may be difficult to determine. Accordingly, in the event of a default, DP may be entitled to, in addition to other legal remedies available to the DP, seek injunctive relief restraining RP from any further or continued breach of its obligations hereunder.

 

7.2. No Warranties. The parties agree that any Information is disclosed “as is” and that any use by RP of that Information will be at the sole risk of RP. DP MAKES NO REPRESENTATION OR WARRANTY, WHETHER EXPRESS OR IMPLIED, WITH RESPECT TO INFORMATION DISCLOSED UNDER THIS AGREEMENT.

 

7.3 Governing Law and Venue. This Agreement shall be governed by the laws of the State of Florida, without regard to conflict of law principles and, to the extent applicable, by the laws of the United States. Any dispute between the parties concerning the terms of this Agreement shall be decided in a court of competent jurisdiction located in Orange County, Florida.

 

7.4 No Assignment. Neither party shall assign this Agreement or any of its rights or obligations hereunder without obtaining prior written consent of the other party.

 

7.5 Entirety, Amendment, and Severability. This Agreement constitutes the entire agreement of the parties concerning the matters discussed herein. If any of the provisions of this Agreement are determined to be invalid under applicable law, they are, to that extent, deemed omitted. The invalidity of any portion of this Agreement shall not render any other portion invalid. This Agreement may be amended only by a written instrument executed by authorized representatives of the parties.

 

7.6 Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, and all of which together shall be deemed to be one and the same instrument. Signature pages delivered by facsimile or electronic mail to this Agreement or any document delivered hereunder shall be binding to the same extent as an original.

 

In witness thereof, the parties hereby execute this Agreement by their authorized representatives.

 

ACCEPTED BY:    
     
THE UNIVERSITY OF CENTRAL FLORIDA   (Company) AVRA MEDICAL ROBOTICS INC.
BOARD OF TRUSTEES   (Name) Barry Cohen
(Name) Ginny Pellam   (Title)
(Title) Sr. Contract Manager    

 

/s/ Ginny Pellam   /s/ Barry Cohen
Signature     Signature  
         
DATE: 5/17/14   DATE: 5/17/16

 

    3  

 

 

Appendix D Intellectual Property Option

 

Intellectual Property Ownership Transfer 1,2,3,4,5 .

 

A.1          Upfront Fee. Company shall pay UCF an up-front fee of forty-three thousand five hundred forty-eight ($43,548). This fee shall be paid in accordance with Article 3, following execution of the Agreement. An additional 20% assignment fee shall be assessed and paid by Company for any executed amendment to this Agreement that increases the funding authorized under this Agreement. All fees paid to UCF are non-refundable, regardless of whether any Intellectual Property results from the SOW or amendments thereto.

 

In consideration, Company has the right, but not the obligation, to take sole ownership of UCF’s interest in UCF Intellectual Property and Joint Intellectual Property. UCF reserves the right to file a provisional patent application to protect an invention in circumstances where UCF has an expedited need to publish or present results. UCF will promptly disclose new inventions to Company in accordance with Article 9. Company has ninety (90) days from the receipt of the new invention disclosure to request UCF assign ownership to Company.

 

A.2          In partial consideration for assigning ownership, Company shall reimburse UCF for any patent filing costs incurred by UCF within 30 days of receipt of an invoice from UCF.

 

A.3         Company agrees to pay UCF a 1% royalty on the net sales of products or processes utilizing UCF Intellectual Property and Joint Intellectual Property in any full calendar year in which annual sales of such products or processes exceed twenty million dollars ($20,000,000).

 

A.4         UCF retains the right to use UCF Intellectual Property and Joint Intellectual Property for its research and educational purposes, and to grant licenses to other non-profit, or research and educational institutions for the same purpose(s). In the event UCF’s Background Intellectual Property is required by Company in order to practice the rights in UCF Intellectual Property, UCF will negotiate an option or license with Company, to the extent such rights are available. In the event Company’s Background Intellectual Property is required by UCF in order to perform the SOW, Company hereby grants UCF a royalty-free, irrevocable, non-exclusive right and license to use the Company Background Intellectual Property for its teaching, research and educational purposes.

 

A.5          If Company fails to pay the fee due to UCF within thirty (30) days after submission of invoice, then UCF will have the right to unilaterally modify the Agreement and SOW to change the intellectual property terms to grant Company an option to license UCF Intellectual Property under Appendix D- Section B below. Invoices to Company under this Appendix D - Section A will be sent the address shown in Section 3.

 

B.          Company shall have the option to negotiate a license for UCF’s Intellectual Property and UCF’s interest in Joint Intellectual Property on commercially reasonable terms, following disclosure of a new invention to UCF’s Office of Technology Transfer. This option shall expire six (6) months after disclosure of the new invention. All negotiations conducted by the parties under this Section B shall be conducted in good faith using reasonable efforts to reach a mutually beneficial arrangement as soon as practical. Determination of the reasonable royalty shall take into consideration the cost, resources, and time to commercially develop and exploit the invention, the contributions of each party, the proprietary position provided, the profit potential, and customary royalties of the industry for similar intellectual property rights. The rights under this provision apply only to Intellectual Property rights specific to a new invention for which Company for which Company does not elect the terms provided in Appendix D, or fails to timely pay the fee associated with such rights granted in Sections A.

 

 

Option Notes:

1 Option is not available for research awards or subawards/subcontracts for public service or testing.

2 This fee is calculated based on the entire project budget including standard University overhead fees.

3 If federal funding is used in part to develop the IP, the license will be subject to other terms such as performance milestones required to satisfy federal Bayh-Dole obligations.

4 Background property is not included. In the event UCF Background Intellectual Property is required or desired, UCF will negotiate an option or license to the extent such rights are available.

5 If federal funding is used in part to develop the IP, then UCF must retain ownership of the IP as specified by federal statute.

 

    5  

 

 

THE UNIVERSITY OF CENTRAL FLORIDA BOARD OF TRUSTEES

Office of Research & Commercialization

12201 Research Parkway, Suite 501

Orlando, Florida 32826-3246

 

Modification to

Research Agreement between

AVRA Medical Robotics, Inc. and

The University of Central Florida Board of Trustees

Effective May 1 2016

 

Agency: AVRA Medical Robotics, Inc.
Modification No.: 2

 

Type of Modification:

 

x Extension of Budget Period ¨ Change in Special Conditions
¨ Change in Budget Categories ¨ Change in Funding Amount
x Change in Scope of Work x Other:  Update  Appendix A & Appendix C

 

The parties to this Agreement hereby agree to the following revisions. Only the articles, paragraphs and sections referenced below are hereby modified, and all other provisions of the Agreement remain unchanged.

 

Description:

 

Article 2. TERM is hereby deleted in its entirety and replaced with the following:

 

2. TERM

 

This Agreement is effective for the period beginning May 1, 2016 (“Effective Date”) and shall not extend beyond June 30, 2017 unless extended by written modification of this Agreement.

 

Appendix A: Scope of Work & Deliverables: the deliverables are hereby deleted and replaced with the following:

 

The updated SOW is:

I. Tasks to be done by December 2016

 

1) Search for the Plug-in software for MATLAB which will accept exported files from SolidWorks
2) Install and learn how to use the Plug-in
3) Make necessary changes in the design to make it ready for export
4) Demonstration of operating 1 joint of the robotic arm using control loop in MATLAB
5) Demonstration of operating all six joints of the robotic arm using control loop in MATLAB
6) Include end-effector in the exported file and design the control loop for its functionality
7) Derive the Forward and Inverse Kinematics of the whole robot
8) Prepare the D-H table for the robot
9) Design a Control system in MATLAB to control the robot using data from the D-H table

 

II. Goals to achieve by June 2017

 

1) Integrate sensor modeling into the virtual world (including control, etc)
2) Create a GUI/user-interface to operate the robot, (a rough example shown below)
3) Finding a suitable 3D scan of a human subject and importing it into MATLAB
4) Designing a GUI to generate a pattern on the human body surface
5) Path planning of the robot end-effector using coordinates of the pattern on the human body
6) Creating a simulation of the robot cauterizing on a human body.

 

     

 

 

The following deliverable items are required:

 

Due Date   Deliverable
August 1, 2016   Quarterly Development Report
     
November 1, 2016   Quarterly Development Report
     
February 1, 2017   Quarterly Development Report
     
June 30,2017   Final Report

 

Appendix C: Confidential Disclosure Agreement

 

Appendix C: Confidential Disclosure Agreement is hereby updated to include the attached modification:

 

Acceptance and Agreement:

 

The above referenced modifications are hereby incorporated into the Agreement. All other terms and conditions of the Agreement remain unchanged.

 

IN WITNESS WHEREOF, the parties hereto have executed this Modification as of the 6 th day of December 2016.

  

AVRA Medical Robotics, Inc.   The University of Central Florida
Board of Trustees
     
/s/ Barry F. Cohen   /s/ Arlisia Potter
(Signature-Authorized Official)   (Signature-Authorized Official)
     
Barry F. Cohen CEO   Arlisia Potter, Team Manager
(Typed Name and Title)   (Typed Name and Title)

 

    Approved as to Form and Legality
    , 11-9-16

 

     

 

 

CONFIDENTIAL DISCLOSURE AGREEMENT

MODIFICATION NO. 1

 

The Confidential Disclosure Agreement (hereinafter, “Agreement”) effective May 13, 2016 between The University of Central Florida Board of Trustees (UCF) and AVRA Medical Robotics, Inc. (“Company”), (collectively, “The Parties” and individually as a “Party”) is hereby modified as follows:

 

DESCRIPTION:

 

Article 4.1 Term is hereby deleted and replaced with the following:

 

41 Term. RP will use the Information only during the term of the Agreement, which begins on the Effective Date written above and terminates on June 30.2017 unless terminated earlier (“Term”). Each party may terminate this Agreement upon thirty (30) days written notice to the other party.

 

Acceptance and Agreement:

 

The above-referenced Confidential Disclosure Agreement Modification is hereby incorporated into the Agreement. All other terms and condition of the Agreement remain unchanged.

 

AVRA Medical Robotics, Inc.   The University of Central Florida Board of Trustees
     
/s/ Barry F. Cohen   /s/ Arlisia Potter
(Signature-Authorized Official)   (Signature-Authorized Official)
     
Barry F. Cohen   Arlisia Potter
(Typed Name)   (Typed Name)
     
CEO   Team Manager
(Typed Title)   (Typed Title)
     
Dec. 6, 2016   11/9/16
Date   Date

 

    Approved as to Form and Legality
    , 11-9-16

 

     

 

 

 

THE UNIVERSITY OF CENTRAL FLORIDA BOARD OF TRUSTEES

Office of Research & Commercialization

12201 Research Parkway, Suite 501

Orlando, Florida 32826-3246

 

Modification to

Research Agreement between

AVRA Medical Robotics, Inc. and

The University of Central Florida Board of Trustees

Effective May 1 2016

 

Agency: AVRA Medical Robotics, Inc.
Modification No.: 3

 

Type of Modification:

 

¨ Extension of Budget Period ¨ Change in Special Conditions
¨ Change in Budget Categories x Change in Funding Amount
x Change in Appendix B x Other: Update Appendix A & Appendix D

 

The parties to this Agreement hereby agree to the following revisions. Only the articles, paragraphs and sections referenced below are hereby modified, and all other provisions of the Agreement remain unchanged.

 

Description:

 

Article 3 is hereby deleted in its entirety and replaced with the following:

 

This is a fixed price Agreement in the amount of $193,967 U.S. for the project and $49,680 for the assignment of intellectual property rights as outlined in Article 9 and Appendix D for a total of $243,647 (the “Fixed Price”) and shall not be modified unless agreed upon by both Parties in writing Serially numbered invoices along with deliverables shall be sent in accordance with Appendix A and the Payment Schedule below.

 

Invoices shall be submitted to:
Name:       Barry Cohen
Address: AVRA Medical Robotics, Inc.
Address: 1600 S.E 15 th Street
City, State Zip: Ft. Lauderdale, FL 33316
Email: Bcohen@avramedical.com

 

Upon receipt of invoice(s), payment shall be made to the University of Central Florida and remitted to the following address:

  University of Central Florida
  Contracts & Grants Payment
  PO Box 160118
  Orlando, FL 32816-0118

 

PAYMENT SCHEDULE

 

Payment Due Date   Amount     Deliverable
30 Days upon receipt   $ 43,548     Invoice for IP assignment
30 Days upon receipt   $ 40,827     Invoice for payment
08/1/2016   $ 40,827     Quarterly Development Report
1/15/2017   $ 30,660     Invoice for Payment
1/15/2017   $ 6,132     Invoice for IP assignment
11/1/2016   $ 40,827     Quarterly In-Person Progress Meeting
02/1/2017   $ 40,826     Quarterly In-Person Progress Meeting
TOTAL   $ 243,647      

 

     

 

 

Appendix A: Scope of Work & Deliverables: the deliverables are hereby deleted and replaced with the following:

 

The following deliverable items are required:

 

Due Date   Deliverable
August 1, 2016   Quarterly Development Report- submitted 8/12/2016
     
November 1, 2016   Quarterly Development Report - submitted 11/11/2016
     
February 1, 2017   Quarterly In-Person Progress Meeting
     
May 1, 2017   Quarterly In-Person Progress Meeting
     
June 30, 2017   Final Report

 

     

 

 

APPENDIX B: PROGRAM BUDGET

 

Appendix B is hereby updated to include the following budget (including IP Assignment fee)

 

Sponsor AVRA
Title: An Intelligent Medical Robotic Device
Project Dates: 5/01/2016 - 6/30/2017

 

    Year 1-Mod 2  
A. Senior Personnel        
Zhihua Qu - PI   $ -  
         
Total Senior Personnel   $ -  
         
B. Other Personnel        
0 Post Doctral Associates   $ -  
0 Other Professionals (Technicians)   $ -  
1 Graduate Students, PhD   $ -  
0 Graduate Students, Masters   $ -  
0 Undergraduate Students   $ -  
0 Other   $ -  
Total Other Personnel   $ -  
         
Total Salaries and Wages (A-B)   $ -  
         
C. Fringe Benefits        
Faculty @ 28.95%   $ -  
Post Doc @ 48.35%, 34.35%, 24.35% *   $ -  
OPS @ 2.25%, 48.25%, 34.25%, 24.25% **   $ -  
Students @ 0.65%, 54.30% ***   $ -  
Total Fringe Benefits   $ -  
         
Total Salaries, Wages and Fringe Benefits   $ -  
         
D. Equipment        
See Equipment Tab        
Total Equipment   $ -  
         
E. Travel        
Domestic (See Travel Tab)   $ -  
Foreign (See Travel Tab)        
Total Travel   $ -  
         
F. Participant Support Costs        
Stipends   $ -  
Travel   $ -  
Subsistence   $ -  
Other   $ -  
Total Participant Support Costs (0)   $ -  
         
G. Other Direct Costs        
Material and Supplies (See Supplies Tab)   $ 13,000  
Publication Costs/Documentation        
Consultant Services - Dr. Pollak        
Software   $ 8,000
Subcontract - NONE   $ -  
1  Tuition        
Total Other Costs   $ 21,000  
         
Total Direct Costs   $ 21,000  
Indirect Costs, Rate 46%, MTDC   $ 9,660  
Total Direct and indirect Costs   $ 30,660  
IP cost   $ 6,132  
Grand   $ 36,792  
         
Base   $ 21,000  

 

*Based on base salary.

**Based on base salary & number of hours.

***Based on number of hours.

 

     

 

 

Description   Qty.     Price each     Total cost     Year  
Computer System     3       2000       6000       1  
HDMI Display     3       1333.33       4000       1  
Microsoft Surface     2       1500       3000       1  
Item 4     0       100       0       1  
Item 5     0         100       0       1  
                    0          
                      0          
Total                     13000          

 

APPENDIX D Intellectual Property Option

 

The first sentence of Section A. 1 Upfront Fee is hereby deleted and replaced with the following: “Company shall pay UCF an up-front fee of forty-nine thousand six hundred eighty ($49,680).”

 

Acceptance and Agreement;

 

The above referenced modifications are hereby incorporated into the Agreement. All other terms and conditions of the Agreement remain unchanged.

 

IN WITNESS WHEREOF, the parties hereto have executed this Modification as of the 23 rd day of December, 2016.

 

AVRA Medical Robotics, Inc.   The University of Central Florida Board of Trustees
     
    /s/ Arlisia Potter
(Signature-Authorized Official)   (Signature-Authorized Official)
     
    Arlisia Potter, Team Manager
(Typed Name and Title)   (Typed Name and Title)

 

    Legal Content Approved
      , 12/22/2016

 

     

 

Exhibit 10.3

 

 

EMPLOYMENT AGREEMENT

 

THIS AGREEMENT, made effective August 1, 2016 (the "Effective Date"), between AVRA Medical Robotics Inc., a Florida corporation (hereinafter referred to as the "Company"), and Alexandre S. Clug, residing at 262 Fortuna Drive, Palm Beach Gardens, FL 33410, USA (hereinafter referred to as the "Employee").

 

WHEREAS , the Company wishes to engage the services and expertise of the Employee on the terms and conditions hereinafter set forth, and the Employee wishes to accept such an engagement;

 

NOW THEREFORE in consideration of the covenants of each of the parties given to the other and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows:

 

1. SERVICES

 

Effective as of the Effective Date, the Company hereby engages the Employee and the Employee hereby accepts an engagement with the Company to serve as the Vice President of Global Business Development of the Company (the “Services”). Employee shall bear such responsibilities as are customary for such a position in a public company. The parties understand that the position will be full-time employment and that the Employee shall devote sufficient time, attention and abilities to the business of the Company for the proper exercise of the Employee's duties hereunder. Employee understands that the Services may, from time to time, entail extensive travel. Employee may assign the compensation hereunder but not the responsibility to fulfill the services and responsibilities as per this Agreement. Employee shall not be required to move his residence from the Palm Beach, Florida area.

 

2. REMUNERATION

 

The Company agrees to pay the Employee as set out in Schedule A attached hereto.

 

3. CONFIDENTIALITY; OWNERSHIP OF DOCUMENTS; NON-COMPETE

 

3.1 Confidential Information. Employee recognizes and acknowledges that by reason of this Agreement and service to the Company, he will have access to confidential information of the Company and its affiliates, including, without limitation, information and knowledge pertaining to business methods, inventions, innovations, designs, ideas, plans, trade secrets, proprietary information, advertising, sales and profit figures, contact lists, and relationships between the Company and its affiliates, customers, clients, Employees, licensees, suppliers, and others who have business dealings with the Company and its affiliates (“Confidential Information”). Employee acknowledges that such Confidential Information is a valuable and unique asset and covenants that he will not, either during or at any time after the Term of this Agreement, disclose any such Confidential Information to any person for any reason whatsoever without the prior written authorization of the Company, unless such information is in the public domain through no fault of the Employee or except as, and to the extent as, may be required by law.

 

 

 

 

3.2 Non-Competition

 

a. Employee recognizes that in his position as an Employee to the Company, he will acquire such information outlined in Section 3.1 hereof, and for good and valuable consideration, including his engagement by the Company, he agrees that during the Term of this Agreement and for a period of 12 months after termination of this Agreement, Employee will not, unless acting pursuant hereto or with the prior written consent of the Company, directly or indirectly, manage, operate, join, control, or participate in the management, operation, control, or be connected as an officer, director, employee, partner, principal, agent, representative, Employee, or otherwise with or use or permit his name to be used in connection with, any business or enterprise engaged in the primary line of business in which the Company is engaged in at the time of execution of this Agreement.

 

b. The foregoing restriction shall not be construed to prohibit the ownership by the Employee of more than five percent (5%) of any class of securities of any corporation that is engaged in any of the foregoing businesses having a class of securities registered pursuant to the Securities Exchange Act of 1934, provided that such ownership represents a passive investment and that neither the Employee nor any group of persons including the Employee in any way, either directly or indirectly, manages or exercises control of any such corporation, guarantees any of its financial obligations, otherwise takes any part in its business, other than exercising his rights as a shareholder, or seeks to do any of the foregoing.

 

3.3 Non-solicitation; Non-association. The Employee hereby acknowledges and agrees that he, together with other Employees engaged by the Company, is likely to be exposed to a significant amount of Confidential Information concerning the Company’s, business methods, operations, employment relationships, and customers while engaged under this Agreement, that such information might be retained by the Employee and such other Employees in tangible form or simply retained in their memory, and that the protection of the Company’s exclusive rights to such confidential information and the benefits flowing from it can best be ensured by means of a restriction on the Employee’s activities after termination of this Agreement. Therefore, the Employee agrees that for 12 months period following termination of this Agreement, he shall not engage in the following activities:

 

(a) He shall not solicit, divert, or initiate any contact (or attempt to solicit, divert, or initiate any contact) with any relationship of the Company or any affiliate with whom Employee dealt (including any customers or vendors), for the purpose of doing business in the same lines of business as the Company, and further will not solicit or initiate any contact with any potential relationship of the Company or affiliate, that the Employee solicited or contacted while engaged by the Company. This provision does not restrict Employee from developing relationships independently obtained outside of Employee’s position with the Company.

 

  - 2 -  

 

 

(b) He shall not directly solicit the employment of or hire any employee or Employee of the Company or affiliate and will not attempt to persuade any employee or Employee to leave the employment or consulting relationship of the Company or such affiliate.

 

3.4 Equitable Relief.

 

(a)      Employee acknowledges that the restrictions contained in Article 3 hereof are reasonable and necessary to protect the legitimate interests of the Company and that any violation of such restrictions would result in irreparable injury to the Company. If the period of time or other restrictions specified in Article 3 should be adjudged unreasonable at any proceeding, then the period of time or such other restrictions shall be reduced by the elimination or reduction of such portion thereof so that such restrictions may be enforced in a manner adjudged to be reasonable. Employee acknowledges that the Company shall be entitled to preliminary and permanent injunctive relief for a violation of any such restrictions without having to prove actual damages or to post a bond; Company shall also be entitled to an equitable accounting of all earnings, profits and other benefits arising from such violation, which rights shall be cumulative and in addition to any other rights or remedies to which Company may be entitled in law or equity.

 

(b)      Employee agrees that until the expiration of the covenants contained in Sections 3.2 and 3.3 of this Agreement, the Company may provide a copy of the covenant contained in such Sections to any business or enterprise (i) that Employee may directly or indirectly own, manage, operate, finance, join, control, or participate in the ownership, management, operation, financing, control, or control of, or (ii) with which he may be connected as an officer, director, employee, partner, principal, agent, representative, Employee, or otherwise, or in connection with which he may use or permit his name to be used.

 

4. TERM and TERMINATION

 

4.1    The term of this Agreement shall continue for 36 months from the Effective Date and may be renewed thereafter annually by mutual written consent (“Term”). Upon expiration of the Term without renewal, the relationship between the parties will be at will but all other provisions of this Agreement shall be applicable. This agreement may be terminated by either Employee or Company for cause or willful or gross negligence by either party. The Board of Directors of the Company may at any time remove the Employee from his position of Vice President of Global Business Development, which removal shall not be deemed a termination of the Agreement.

 

4.2    Employee’s obligations, and those of Employee’s employees, agents, successors and assignees, if any pursuant to Section 3 (Confidentiality; Ownership of Documents, Non-Compete), 5 (Indemnification), and 8 (Governing Law and Dispute Resolution) shall survive completion of Services, and the expiration or termination of this Agreement.

 

  - 3 -  

 

 

5. REPRESENTATION and WARRANTIES; INDEMNIFICATION

 

5.1   The Employee warrants and represents that he is duly qualified to perform his duties hereunder, and further covenants that in performing his duties hereunder, he will not engage in activity that is in violation of applicable laws or subject the Company to liability thereunder. The Employee further warrants that his execution of this Agreement and the performance of services hereunder does not violate any agreement to which Employee is a party nor give any prior employer, partner, associate or any other person any legal or equitable rights against the Employee or the Company.

 

5.2        While the Employee will not initially be a Director or Officer of the Company, should this change then the Company will commit to obtain a directors’ and officers’ insurance policy, if it does not already have one in place, as soon as commercially reasonable, and the Company will sign an Indemnification Agreement satisfactory to the Employee. To the fullest extent permitted by applicable law, the Company agrees that it will not voluntarily change the terms of such D&O Insurance or the Indemnification Provisions to the detriment of the Employee at anytime while he is entitled to benefit of such D&O Insurance or Indemnification Provisions. Additionally, the Employee shall be entitled to such indemnification by the Company as is prescribed in the laws of the State of Florida or in the Charter or Bylaws of the Company.

 

6. NOTICES

 

Any notices delivered or received between either party shall be deemed to have been received:

 

(a)       if it was delivered in person, on the date it was delivered;

 

(b)       if it was sent by electronic facsimile transmission, on the date it was delivered;

 

(c)       if it was sent by registered mail, on the day it was received to the following address:

 

Avra Medical Robotics Inc.

3259 Progress Drive, Suite 126, Orlando, FL 32826

 

By email: bcohen@avramedical.com

Attention: Barry F. Cohen, CEO

By Facsimile: 407-849-2719

 

Alexandre Clug

262 Fortuna Drive, Palm Beach Gardens, FL 33410

 

By email: aclug@copper.net

 

  - 4 -  

 

 

7. MODIFICATION OF AGREEMENT

 

Any modification of this Agreement must be made in writing and signed by the Employee and the Company, or it shall have no effect and shall be void.

 

8. GOVERNING LAW

 

8.1 This Agreement shall be governed by and construed in accordance with the laws of the State of Florida, without giving effect to any conflict of law rules otherwise.

 

8.2 Any and all disputes arising hereunder, including disputes arising from or relating to termination and the grounds therefor, including all grounds arising from statutory claims alleging discrimination or violations of federal, state or local civil rights law, or otherwise, shall be resolved by binding arbitration in Florida before a single arbitrator in accordance with the arbitration rules of the American Arbitration Association (the “AAA”) applicable to arbitration then in effect. Notice of the demand for arbitration by either party shall be given in writing to the other party to this Agreement. On such demand, the dispute shall be heard by arbitration before a single arbitrator selected pursuant to the AAA rules. Any award rendered by the arbitrator shall be conclusive and binding on the parties hereto; provided, however, that any such award shall be accompanied by a written opinion of the arbitrator giving the reasons for the award. The arbitrator shall be entitled to award equitable relief. Each party shall pay its own expenses of arbitration, including attorneys’ fees. Nothing herein shall prevent the Company from seeking and obtaining preliminary equitable relief from a court pursuant to Section 3.5.

 

8.3 The parties hereby submit to the jurisdiction of the federal and state courts located in Florida for the purpose of an order to compel arbitration, for preliminary relief in aid of arbitration or for a preliminary injunction to maintain the status quo or prevent irreparable harm prior to the appointment of the arbitrators, and to the non-exclusive jurisdiction of the aforementioned courts for the enforcement of any award issued hereunder, and waive any right to stay or dismiss any such actions or proceedings brought before any such court on the basis of forum non conveniens or improper venue.

 

9. HEADINGS

 

The headings utilized in this Agreement are for convenience only and are not to be construed in any way as additions or limitations of the covenants and agreements contained in this Agreement.

 

10. GENERAL MATTERS

 

10.1 The waiver by any party hereto of a breach of any provision of this Agreement shall not operate or be construed as a waiver of any subsequent breach of the same or of any other provisions of this Agreement.

 

  - 5 -  

 

 

10.2       This Agreement shall be binding upon the parties hereto and shall enure to the benefit of and be enforceable by each of the parties hereto and their respective successors and assigns, except that the duties and responsibilities of Employee hereunder are of a personal nature and shall not be assignable or delegable in whole or in part by the Employee without prior written consent of the Company.

 

IN WITNESS WHEREOF the parties hereto have executed this Agreement as of the 1 st day of August 2016.

 

Avra Medical Robotics Inc.,

 

By: /s/ Barry F. Cohen  
Name: Barry F. Cohen  
Title: CEO  

 

/s/ Alexandre Clug  
Alexandre Clug  

 

  - 6 -  

 

 

SCHEDULE “A”

 

REMUNERATION

 

· As full consideration for performance of the services by the Employee, the Company shall (i) pay the Employee a base salary of $8,000 (eight thousand dollars) monthly, beginning with the August 2016 payment, which rate shall be inclusive of all claims by the Employee for his services. The base salary shall increase to $12,000 (twelve thousand dollars) per month beginning with the July 2017 payment. However, Employee agrees to accrue his salary from the Effective Date through and including December 2016 and allows the Board of Directors to decide on whether to convert any or all accrued salary into Company restricted common shares. Beginning on the Effective Date, normal direct business expenses will be covered, including business class travel on flights over 5 hours.

 

· Beginning on the Effective Date, Employee will receive a $500 per month vehicle expense stipend to help mitigate the costs of the frequent travel required to visit the Orlando office and University of Central Florida from the Employee’s home.

 

· Bonus to be as determined by the Board of Directors with the following factors applying equally: achievement of company goals and plans, capital raising, hiring of key employees in key locations. Bonus can be paid out quarterly if approved by the Board of Directors.

 

· Employee will also be granted an option pursuant to the Company’s Equity Incentive Plan (the “Plan”) to purchase 300,000 (three hundred thousand) restricted shares of the Company’s common stock, with an exercise price of $0.10 per share, and a Start Date of Aug 15, 2016. 100,000 shares will be fully vested on each yearly anniversary. Any non-vested options shall be surrendered and cancelled if this Agreement is terminated.

 

*       *       *       *       *

 

  - 7 -  

 

 

Exhibit 10.4

 

 

EMPLOYMENT AGREEMENT

 

THIS AGREEMENT, made effective July 1, 2016 (the "Effective Date"), between AVRA Medical Robotics Inc., a Florida corporation (hereinafter referred to as the "Company"), and Barry F. Cohen, residing at 1600 SE 15th Street, #512, Ft. Lauderdale, FL 33316, USA (hereinafter referred to as the "Employee").

 

WHEREAS , the Company wishes to engage the services and expertise of the Employee on the terms and conditions hereinafter set forth, and the Employee wishes to accept such an engagement;

 

NOW THEREFORE in consideration of the covenants of each of the parties given to the other and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows:

 

1. SERVICES

 

Effective as of the Effective Date, the Company hereby engages the Employee and the Employee hereby accepts an engagement with the Company to serve as the Chief Executive Officer of the Company (the “Services”). Employee shall bear such responsibilities as are customary for the chief executive officer of a public company. The parties understand that the position will be full-time employment and that the Employee shall devote sufficient time, attention and abilities to the business of the Company for the proper exercise of the Employee's duties hereunder. Employee understands that the Services may, from time to time, entail extensive travel. Employee may assign the compensation hereunder but not the responsibility to fulfill the services and responsibilities as per this Agreement. Employee shall not be required to move his residence from the Ft. Lauderdale, Florida area.

 

2. REMUNERATION

 

The Company agrees to pay the Employee as set out in Schedule A attached hereto.

 

3. CONFIDENTIALITY; OWNERSHIP OF DOCUMENTS; NON-COMPETE

 

3.1 Confidential Information. Employee recognizes and acknowledges that by reason of this Agreement and service to the Company, he will have access to confidential information of the Company and its affiliates, including, without limitation, information and knowledge pertaining to business methods, inventions, innovations, designs, ideas, plans, trade secrets, proprietary information, advertising, sales and profit figures, contact lists, and relationships between the Company and its affiliates, customers, clients, Employees, licensees, suppliers, and others who have business dealings with the Company and its affiliates (“Confidential Information”). Employee acknowledges that such Confidential Information is a valuable and unique asset and covenants that he will not, either during or at any time after the Term of this Agreement, disclose any such Confidential Information to any person for any reason whatsoever without the prior written authorization of the Company, unless such information is in the public domain through no fault of the Employee or except as, and to the extent as, may be required by law.

 

 

 

 

3.2 Non-Competition

 

a. Employee recognizes that in his position as an Employee to the Company, he will acquire such information outlined in Section 3.1 hereof, and for good and valuable consideration, including his engagement by the Company, he agrees that during the Term of this Agreement and for a period of 12 months after termination of this Agreement, Employee will not, unless acting pursuant hereto or with the prior written consent of the Company, directly or indirectly, manage, operate, join, control, or participate in the management, operation, control, or be connected as an officer, director, employee, partner, principal, agent, representative, Employee, or otherwise with or use or permit his name to be used in connection with, any business or enterprise engaged in the primary line of business in which the Company is engaged in at the time of execution of this Agreement.

 

b. The foregoing restriction shall not be construed to prohibit the ownership by the Employee of more than five percent (5%) of any class of securities of any corporation that is engaged in any of the foregoing businesses having a class of securities registered pursuant to the Securities Exchange Act of 1934, provided that such ownership represents a passive investment and that neither the Employee nor any group of persons including the Employee in any way, either directly or indirectly, manages or exercises control of any such corporation, guarantees any of its financial obligations, otherwise takes any part in its business, other than exercising his rights as a shareholder, or seeks to do any of the foregoing.

 

3.3 Non-solicitation; Non-association. The Employee hereby acknowledges and agrees that he, together with other Employees engaged by the Company, is likely to be exposed to a significant amount of Confidential Information concerning the Company’s, business methods, operations, employment relationships, and customers while engaged under this Agreement, that such information might be retained by the Employee and such other Employees in tangible form or simply retained in their memory, and that the protection of the Company’s exclusive rights to such confidential information and the benefits flowing from it can best be ensured by means of a restriction on the Employee’s activities after termination of this Agreement. Therefore, the Employee agrees that for 12 months period following termination of this Agreement, he shall not engage in the following activities:

 

(a) He shall not solicit, divert, or initiate any contact (or attempt to solicit, divert, or initiate any contact) with any relationship of the Company or any affiliate with whom Employee dealt (including any customers or vendors), for the purpose of doing business in the same lines of business as the Company, and further will not solicit or initiate any contact with any potential relationship of the Company or affiliate, that the Employee solicited or contacted while engaged by the Company. This provision does not restrict Employee from developing relationships independently obtained outside of Employee’s position with the Company.

 

  - 2 -  

 

 

(b) He shall not directly solicit the employment of or hire any employee or Employee of the Company or affiliate and will not attempt to persuade any employee or Employee to leave the employment or consulting relationship of the Company or such affiliate.

 

3.4 Equitable Relief.

 

(a)      Employee acknowledges that the restrictions contained in Article 3 hereof are reasonable and necessary to protect the legitimate interests of the Company and that any violation of such restrictions would result in irreparable injury to the Company. If the period of time or other restrictions specified in Article 3 should be adjudged unreasonable at any proceeding, then the period of time or such other restrictions shall be reduced by the elimination or reduction of such portion thereof so that such restrictions may be enforced in a manner adjudged to be reasonable. Employee acknowledges that the Company shall be entitled to preliminary and permanent injunctive relief for a violation of any such restrictions without having to prove actual damages or to post a bond; Company shall also be entitled to an equitable accounting of all earnings, profits and other benefits arising from such violation, which rights shall be cumulative and in addition to any other rights or remedies to which Company may be entitled in law or equity.

 

(b)      Employee agrees that until the expiration of the covenants contained in Sections 3.2 and 3.3 of this Agreement, the Company may provide a copy of the covenant contained in such Sections to any business or enterprise (i) that Employee may directly or indirectly own, manage, operate, finance, join, control, or participate in the ownership, management, operation, financing, control, or control of, or (ii) with which he may be connected as an officer, director, employee, partner, principal, agent, representative, Employee, or otherwise, or in connection with which he may use or permit his name to be used.

 

4. TERM and TERMINATION

 

4.1      The term of this Agreement shall continue for 48 months from the Effective Date and may be renewed annually thereafter by mutual written consent (“Term”). Upon expiration of the Term without renewal, the relationship between the parties will be at will but all other provisions of this Agreement shall be applicable. This agreement may be terminated by either Employee or Company for cause or willful or gross negligence by either party. The Board of Directors of the Company may at any time remove the Employee from the position of Chief Executive Officer, which removal shall not be deemed a termination of the Agreement.

 

4.2      Employee’s obligations, and those of Employee’s employees, agents, successors and assignees, if any pursuant to Section 3 (Confidentiality; Ownership of Documents, Non-Compete), 5 (Indemnification), and 8 (Governing Law and Dispute Resolution) shall survive completion of Services, and the expiration or termination of this Agreement.

 

  - 3 -  

 

 

5. REPRESENTATION AND WARRANTIES; INDEMNIFICATION

 

5.1   The Employee warrants and represents that he is duly qualified to perform his duties hereunder, and further covenants that in performing his duties hereunder, he will not engage in activity that is in violation of applicable laws or subject the Company to liability thereunder. The Employee further warrants that his execution of this Agreement and the performance of services hereunder does not violate any agreement to which Employee is a party nor give any prior employer, partner, associate or any other person any legal or equitable rights against the Employee or the Company.

 

5.2     This Agreement is conditional on the Company’s commitment to obtain a directors’ and officers’ insurance policy as soon as commercially reasonable, and the Company signing an Indemnification Agreement satisfactory to the Employee. To the fullest extent permitted by applicable law, the Company agrees that it will not voluntarily change the terms of such D&O Insurance or the Indemnification Provisions to the detriment of the Employee at anytime while he is entitled to benefit of such D&O Insurance or Indemnification Provisions. Additionally, the Employee shall be entitled to such indemnification by the Company as is prescribed in the laws of the State of Florida or in the Charter or Bylaws of the Company.

 

6. NOTICES

 

Any notices delivered or received between either party shall be deemed to have been received:

 

(a)       if it was delivered in person, on the date it was delivered;

 

(b)       if it was sent by electronic facsimile transmission, on the date it was delivered;

 

(c)       if it was sent by registered mail, on the day it was received to the following address:

 

Avra Medical Robotics Inc.

3259 Progress Drive, Suite 126, Orlando, FL 32826

 

By email: acschauer@avramedical.com

Attention: Chris Schauer, CFO

By Facsimile: 407-849-2719

 

Barry F. Cohen

1600 SE 15th Street, #512, Ft. Lauderdale, FL 33316

 

By email: bfc@barryfcohen.com

 

  - 4 -  

 

 

7. MODIFICATION OF AGREEMENT

 

Any modification of this Agreement must be made in writing and signed by the Employee and the Company, or it shall have no effect and shall be void.

 

8. GOVERNING LAW

 

8.1 This Agreement shall be governed by and construed in accordance with the laws of the State of Florida, without giving effect to any conflict of law rules otherwise.

 

8.2 Any and all disputes arising hereunder, including disputes arising from or relating to termination and the grounds therefor, including all grounds arising from statutory claims alleging discrimination or violations of federal, state or local civil rights law, or otherwise, shall be resolved by binding arbitration in Florida before a single arbitrator in accordance with the arbitration rules of the American Arbitration Association (the “AAA”) applicable to arbitration then in effect. Notice of the demand for arbitration by either party shall be given in writing to the other party to this Agreement. On such demand, the dispute shall be heard by arbitration before a single arbitrator selected pursuant to the AAA rules. Any award rendered by the arbitrator shall be conclusive and binding on the parties hereto; provided, however, that any such award shall be accompanied by a written opinion of the arbitrator giving the reasons for the award. The arbitrator shall be entitled to award equitable relief. Each party shall pay its own expenses of arbitration, including attorneys’ fees. Nothing herein shall prevent the Company from seeking and obtaining preliminary equitable relief from a court pursuant to Section 3.5.

 

8.3 The parties hereby submit to the jurisdiction of the federal and state courts located in Florida for the purpose of an order to compel arbitration, for preliminary relief in aid of arbitration or for a preliminary injunction to maintain the status quo or prevent irreparable harm prior to the appointment of the arbitrators, and to the non-exclusive jurisdiction of the aforementioned courts for the enforcement of any award issued hereunder, and waive any right to stay or dismiss any such actions or proceedings brought before any such court on the basis of forum non conveniens or improper venue.

 

9. HEADINGS

 

The headings utilized in this Agreement are for convenience only and are not to be construed in any way as additions or limitations of the covenants and agreements contained in this Agreement.

 

10. GENERAL MATTERS

 

10.1 The waiver by any party hereto of a breach of any provision of this Agreement shall not operate or be construed as a waiver of any subsequent breach of the same or of any other provisions of this Agreement.

 

  - 5 -  

 

 

10.2       This Agreement shall be binding upon the parties hereto and shall enure to the benefit of and be enforceable by each of the parties hereto and their respective successors and assigns, except that the duties and responsibilities of Employee hereunder are of a personal nature and shall not be assignable or delegable in whole or in part by the Employee without prior written consent of the Company.

 

IN WITNESS WHEREOF the parties hereto have executed this Agreement as of the 1 st day of August 2016.

 

Avra Medical Robotics Inc.,

 

By: /s/ A. Christian Schauer  
Name: A. Christian Schauer  
Title: CFO  

 

/s/ Barry F. Cohen  
Barry F. Cohen  

 

  - 6 -  

 

 

SCHEDULE "A"

 

REMUNERATION

 

· As full consideration for performance of the services by the Employee, the Company shall (i) pay the Employee a base salary of $10,000 (ten thousand dollars) monthly, beginning with the July 2016 payment, which rate shall be inclusive of all claims by the Employee for his services. The base salary shall increase to $15,000 per month beginning with the July 2017 payment. However, Employee agrees to accrue his salary from the Effective Date through and including December 2016 and allows the Board of Directors to decide on whether to convert any or all accrued salary into Company restricted common shares. Beginning on the Effective Date, normal direct business expenses will be covered, including business class travel on flights over 5 hours.

 

· Beginning on the Effective Date, Employee will receive a $500 per month vehicle expense stipend to help mitigate the costs of the frequent travel required to visit the Orlando office and University of Central Florida from the Employee’s home.

 

· Bonus to be as determined by the Board of Directors with the following factors applying equally: achievement of company goals and plans, capital raising, hiring of key employees in key locations. Bonus can be paid out quarterly if approved by the Board of Directors.

 

· Employee will also be granted an option pursuant to the Company’s Equity Incentive Plan (the “Plan”) to purchase 1,000,000 (one million) restricted shares of the Company’s common stock, with an exercise price of $0.10 per share, and a Start Date of Aug 15, 2016. All 1,000,000 shares will be fully vested on Aug 15, 2016.

 

*       *       *       *       *

 

  - 7 -  

 

Exhibit 10.5

 

 

EMPLOYMENT AGREEMENT

 

THIS AGREEMENT, made effective August 1, 2016 (the "Effective Date"), between AVRA Medical Robotics Inc., a Florida corporation (hereinafter referred to as the "Company"), and Albert Christian Schauer, residing at 6455 N 39th Street, Augusta, Michigan 49012, USA (hereinafter referred to as the "Employee").

 

WHEREAS , the Company wishes to engage the services and expertise of the Employee on the terms and conditions hereinafter set forth, and the Employee wishes to accept such an engagement;

 

NOW THEREFORE in consideration of the covenants of each of the parties given to the other and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows:

 

1. SERVICES

 

Effective as of the Effective Date, the Company hereby engages the Employee and the Employee hereby accepts an engagement with the Company to serve as the Chief Financial Officer of the Company (the “Services”). Employee shall bear such responsibilities as are customary for such a position in a public company. The parties understand that the position will be full-time employment and that the Employee shall devote sufficient time, attention and abilities to the business of the Company for the proper exercise of the Employee's duties hereunder. Employee understands that the Services may, from time to time, entail extensive travel. Employee may assign the compensation hereunder but not the responsibility to fulfill the services and responsibilities as per this Agreement. Employee shall not be required to move his residence.

 

2. REMUNERATION

 

The Company agrees to pay the Employee as set out in Schedule A attached hereto.

 

3. CONFIDENTIALITY; OWNERSHIP OF DOCUMENTS; NON-COMPETE

 

3.1 Confidential Information. Employee recognizes and acknowledges that by reason of this Agreement and service to the Company, he will have access to confidential information of the Company and its affiliates, including, without limitation, information and knowledge pertaining to business methods, inventions, innovations, designs, ideas, plans, trade secrets, proprietary information, advertising, sales and profit figures, contact lists, and relationships between the Company and its affiliates, customers, clients, Employees, licensees, suppliers, and others who have business dealings with the Company and its affiliates (“Confidential Information”). Employee acknowledges that such Confidential Information is a valuable and unique asset and covenants that he will not, either during or at any time after the Term of this Agreement, disclose any such Confidential Information to any person for any reason whatsoever without the prior written authorization of the Company, unless such information is in the public domain through no fault of the Employee or except as, and to the extent as, may be required by law.

 

 

 

 

3.2 Non-Competition

 

a. Employee recognizes that in his position as an Employee to the Company, he will acquire such information outlined in Section 3.1 hereof, and for good and valuable consideration, including his engagement by the Company, he agrees that during the Term of this Agreement and for a period of 12 months after termination of this Agreement, Employee will not, unless acting pursuant hereto or with the prior written consent of the Company, directly or indirectly, manage, operate, join, control, or participate in the management, operation, control, or be connected as an officer, director, employee, partner, principal, agent, representative, Employee, or otherwise with or use or permit his name to be used in connection with, any business or enterprise engaged in the primary line of business in which the Company is engaged in at the time of execution of this Agreement.

 

b. The foregoing restriction shall not be construed to prohibit the ownership by the Employee of more than five percent (5%) of any class of securities of any corporation that is engaged in any of the foregoing businesses having a class of securities registered pursuant to the Securities Exchange Act of 1934, provided that such ownership represents a passive investment and that neither the Employee nor any group of persons including the Employee in any way, either directly or indirectly, manages or exercises control of any such corporation, guarantees any of its financial obligations, otherwise takes any part in its business, other than exercising his rights as a shareholder, or seeks to do any of the foregoing.

 

3.3 Non-solicitation; Non-association. The Employee hereby acknowledges and agrees that he, together with other Employees engaged by the Company, is likely to be exposed to a significant amount of Confidential Information concerning the Company’s, business methods, operations, employment relationships, and customers while engaged under this Agreement, that such information might be retained by the Employee and such other Employees in tangible form or simply retained in their memory, and that the protection of the Company’s exclusive rights to such confidential information and the benefits flowing from it can best be ensured by means of a restriction on the Employee’s activities after termination of this Agreement. Therefore, the Employee agrees that for 12 months period following termination of this Agreement, he shall not engage in the following activities:

 

(a) He shall not solicit, divert, or initiate any contact (or attempt to solicit, divert, or initiate any contact) with any relationship of the Company or any affiliate with whom Employee dealt (including any customers or vendors), for the purpose of doing business in the same lines of business as the Company, and further will not solicit or initiate any contact with any potential relationship of the Company or affiliate, that the Employee solicited or contacted while engaged by the Company. This provision does not restrict Employee from developing relationships independently obtained outside of Employee’s position with the Company.

 

  - 2 -  

 

 

(b) He shall not directly solicit the employment of or hire any employee or Employee of the Company or affiliate and will not attempt to persuade any employee or Employee to leave the employment or consulting relationship of the Company or such affiliate.

 

3.4 Equitable Relief.

 

(a)      Employee acknowledges that the restrictions contained in Article 3 hereof are reasonable and necessary to protect the legitimate interests of the Company and that any violation of such restrictions would result in irreparable injury to the Company. If the period of time or other restrictions specified in Article 3 should be adjudged unreasonable at any proceeding, then the period of time or such other restrictions shall be reduced by the elimination or reduction of such portion thereof so that such restrictions may be enforced in a manner adjudged to be reasonable. Employee acknowledges that the Company shall be entitled to preliminary and permanent injunctive relief for a violation of any such restrictions without having to prove actual damages or to post a bond; Company shall also be entitled to an equitable accounting of all earnings, profits and other benefits arising from such violation, which rights shall be cumulative and in addition to any other rights or remedies to which Company may be entitled in law or equity.

 

(b)      Employee agrees that until the expiration of the covenants contained in Sections 3.2 and 3.3 of this Agreement, the Company may provide a copy of the covenant contained in such Sections to any business or enterprise (i) that Employee may directly or indirectly own, manage, operate, finance, join, control, or participate in the ownership, management, operation, financing, control, or control of, or (ii) with which he may be connected as an officer, director, employee, partner, principal, agent, representative, Employee, or otherwise, or in connection with which he may use or permit his name to be used.

 

4. TERM and TERMINATION

 

4.1    The term of this Agreement shall continue for 12 months from the Effective Date and may be renewed thereafter annually by mutual written consent (“Term”). Upon expiration of the Term without renewal, the relationship between the parties will be at will but all other provisions of this Agreement shall be applicable. This agreement may be terminated by either Employee or Company for cause or willful or gross negligence by either party. The Board of Directors of the Company may at any time remove the Employee from his position of Vice President of Global Business Development, which removal shall not be deemed a termination of the Agreement.

 

4.2     Employee’s obligations, and those of Employee’s employees, agents, successors and assignees, if any pursuant to Section 3 (Confidentiality; Ownership of Documents, Non-Compete), 5 (Indemnification), and 8 (Governing Law and Dispute Resolution) shall survive completion of Services, and the expiration or termination of this Agreement.

 

  - 3 -  

 

 

5. REPRESENTATION and WARRANTIES; INDEMNIFICATION

 

5.1    The Employee warrants and represents that he is duly qualified to perform his duties hereunder, and further covenants that in performing his duties hereunder, he will not engage in activity that is in violation of applicable laws or subject the Company to liability thereunder. The Employee further warrants that his execution of this Agreement and the performance of services hereunder does not violate any agreement to which Employee is a party nor give any prior employer, partner, associate or any other person any legal or equitable rights against the Employee or the Company.

 

5.2        This Agreement is conditional on the Company’s commitment to obtain a directors’ and officers’ insurance policy as soon as commercially reasonable, and the Company signing an Indemnification Agreement satisfactory to the Employee. To the fullest extent permitted by applicable law, the Company agrees that it will not voluntarily change the terms of such D&O Insurance or the Indemnification Provisions to the detriment of the Employee at anytime while he is entitled to benefit of such D&O Insurance or Indemnification Provisions. Additionally, the Employee shall be entitled to such indemnification by the Company as is prescribed in the laws of the State of Florida or in the Charter or Bylaws of the Company.

 

6. NOTICES

 

Any notices delivered or received between either party shall be deemed to have been received:

 

(a)       if it was delivered in person, on the date it was delivered;

 

(b)       if it was sent by electronic facsimile transmission, on the date it was delivered;

 

(c)       if it was sent by registered mail, on the day it was received to the following address:

 

Avra Medical Robotics Inc.

3259 Progress Drive, Suite 126, Orlando, FL 32826

 

By email: bcohen@avramedical.com

Attention: Barry F. Cohen, CEO

By Facsimile: 407-849-2719

 

Christian Schauer

6455 N 39th Street, Augusta, Michigan 49012

 

By email: acschauer@comcast.net

 

  - 4 -  

 

 

7. MODIFICATION OF AGREEMENT

 

Any modification of this Agreement must be made in writing and signed by the Employee and the Company, or it shall have no effect and shall be void.

 

8. GOVERNING LAW

 

8.1 This Agreement shall be governed by and construed in accordance with the laws of the State of Florida, without giving effect to any conflict of law rules otherwise.

 

8.2 Any and all disputes arising hereunder, including disputes arising from or relating to termination and the grounds therefor, including all grounds arising from statutory claims alleging discrimination or violations of federal, state or local civil rights law, or otherwise, shall be resolved by binding arbitration in Florida before a single arbitrator in accordance with the arbitration rules of the American Arbitration Association (the “AAA”) applicable to arbitration then in effect. Notice of the demand for arbitration by either party shall be given in writing to the other party to this Agreement. On such demand, the dispute shall be heard by arbitration before a single arbitrator selected pursuant to the AAA rules. Any award rendered by the arbitrator shall be conclusive and binding on the parties hereto; provided, however, that any such award shall be accompanied by a written opinion of the arbitrator giving the reasons for the award. The arbitrator shall be entitled to award equitable relief. Each party shall pay its own expenses of arbitration, including attorneys’ fees. Nothing herein shall prevent the Company from seeking and obtaining preliminary equitable relief from a court pursuant to Section 3.5.

 

8.3 The parties hereby submit to the jurisdiction of the federal and state courts located in Florida for the purpose of an order to compel arbitration, for preliminary relief in aid of arbitration or for a preliminary injunction to maintain the status quo or prevent irreparable harm prior to the appointment of the arbitrators, and to the non-exclusive jurisdiction of the aforementioned courts for the enforcement of any award issued hereunder, and waive any right to stay or dismiss any such actions or proceedings brought before any such court on the basis of forum non conveniens or improper venue.

 

9. HEADINGS

 

The headings utilized in this Agreement are for convenience only and are not to be construed in any way as additions or limitations of the covenants and agreements contained in this Agreement.

 

10. GENERAL MATTERS

 

10.1 The waiver by any party hereto of a breach of any provision of this Agreement shall not operate or be construed as a waiver of any subsequent breach of the same or of any other provisions of this Agreement.

 

  - 5 -  

 

 

10.2       This Agreement shall be binding upon the parties hereto and shall enure to the benefit of and be enforceable by each of the parties hereto and their respective successors and assigns, except that the duties and responsibilities of Employee hereunder are of a personal nature and shall not be assignable or delegable in whole or in part by the Employee without prior written consent of the Company.

 

IN WITNESS WHEREOF the parties hereto have executed this Agreement as of the 1 st day of August 2016.

 

Avra Medical Robotics Inc.,

 

By: /s/ Barry F. Cohen  
Name: Barry F. Cohen  
Title: CEO  

 

/s/ Albert Christian Schauer  
Albert Christian Schauer  

 

  - 6 -  

 

 

SCHEDULE "A"

 

REMUNERATION

 

· As full consideration for performance of the services by the Employee, the Company shall (i) pay the Employee a base salary of $9,000 (nine thousand dollars) monthly, beginning with the August 2016 payment, which rate shall be inclusive of all claims by the Employee for his services. However, Employee agrees to accrue his salary from the Effective Date through and including December 2016 and allows the Board of Directors to decide on whether to convert any or all accrued salary into Company restricted common shares. Beginning on the Effective Date, normal direct business expenses will be covered, including business class travel on flights over 5 hours.

 

· Bonus to be as determined by the Board of Directors with the following factors applying equally: achievement of company goals and plans, capital raising, hiring of key employees in key locations. Bonus can be paid out quarterly if approved by the Board of Directors.

 

· Employee will also be granted an option pursuant to the Company’s Equity Incentive Plan (the “Plan”) to purchase 210,000 (two hundred ten thousand) restricted shares of the Company’s common stock, with an exercise price of $0.10 per share, and a Start Date of Aug 15, 2016. 70,000 shares will be fully vested on each yearly anniversary. Any non-vested options shall be surrendered and cancelled if this Agreement is terminated.

 

*      *      *      *      *

 

  - 7 -  

 

 

Exhibit 10.6

 

 

AVRA Medical Robotics, Inc.

3259 Progress Drive, Suite 126, Orlando, FL 32826

 

NON-EXECUTIVE DIRECTOR

LETTER OF APPOINTMENT

 

   
   
   
USA  

 

_________________, 201_

 

Dear _________,

 

I am writing to confirm the terms of your appointment as non-executive director of AVRA Medical Robotics, Inc., a Florida corporation ("the Company"), which will be ratified by the board of directors of the Company (“the Board”) no later than at the next board meeting of the Company (“the Effective Date”).

 

1. Appointment

 

You will hold your membership on the Board in accordance with the Florida Business Corporation Act (the “FBCA”) and the Company's Bylaws as amended from time to time ("the Bylaws"). Nothing in this letter shall be taken to exclude or vary the terms of the FBCA or the Bylaws as they apply to you as a director of the Company.

 

2. The Company’s obligations to you

 

The Board will take all reasonable efforts to provide accurate information to enable you to carry out your duties. Such information will be provided to you in a clear, well-presented and timely manner, validated, if required, by the executive officers as to reliability and accuracy. The Board will also make best efforts to procure for you within a reasonable time-scale any information about the business of the Company that you specifically and reasonably request from time to time in order to enable you to carry out your duties.

 

3. Your duties

 

3.1 As a non-executive director, you have the same general legal responsibilities to the Company as any other director.

 

3.2 Other duties, in accordance with the Bylaws, include:

 

3.2.1 We will expect you to attend Board meetings at a location (and in such manner, for example, by telephone) on dates subject to reasonable notice, unless prevented by illness or other good cause. Further meetings may be required if the Company is engaged in acquisitions, investments or other corporate transactions. In addition to meetings of the Board, you will also be required to attend the Annual Meeting of the Shareholders of the Company unless your absence has been authorised by the Board. In addition, you will of course be expected to devote such time as is appropriate to prepare ahead of each meeting.

 

  A- 1 -

 

  

 

 

3.2.3 You may be required and agree in advance to serve on one or more of the Board's committees, or sub-committees when formed, as the Board may decide and in particular upon the Audit and/or Compensation Committee.

 

3.2.4 In addition to your duties above, you may also be asked to attend other functions, meetings or events relating to the Company from time to time and, subject to your availability you may from time to time be consulted by other directors on matters to which your experience, knowledge or skills are of relevance.

 

3.3 You will undertake your duties to the best of your skill and ability and will discharge your responsibilities as non-executive director of the Company in good faith and in the interests of the Company.

 

3.4 You will devote such time and attention as is necessary for the proper discharge of your responsibilities as non-executive director.

 

3.5 By accepting this appointment, you confirm that you are able to allocate sufficient time to meet the expectations of this role. The prior consent of the Board should be obtained before accepting any commitments that might affect, or conflict with, your role as non-executive director of the Company.

 

3.6 You will have no authority to commit the Company or to enter into any legally binding obligation on behalf of the Company or to exercise any powers of the Company.

 

4. Other obligations on you

 

4.1 You will provide all necessary information to enable the Company to comply with its reporting requirements under the Securities Act of 1933 and/or the Securities Exchange Act of 1934 and comply with requirements expected to be undertaken by a director to a company.

 

4.2 You will comply with the Company’s rules relating to share dealings by directors and their families and procure compliance, so far as you are able, by your spouse and any other persons affected.

 

4.3 You are generally reminded of your obligations and responsibilities as a director upon the admission of the Company’s ordinary shares in the capital of the Company (“Shares”) to trading on the particular market where the shares are being traded from time to time (“Market”). Consequently, you should avoid making any statements that might risk a breach of these requirements.

 

  A- 2 -

 

  

 

 

5. Fees and Expenses

 

5.1 In consideration of the performance of your duties outlined above, you will be entitled to a director’s fee that will be determined by the Board within a reasonable time after the Company has raised and received financing in amount equal to a cumulative $2,000,000. Directors’ fees will be reviewed periodically by the Board.

 

5.2 In addition, you will be granted an option pursuant to the Company’s Equity Incentive Plan (the “ Plan ”) to purchase _________________ (____________) common shares (the “Shares”) with an exercise price of $___ per share that will vest as follows: ___________ (__________) shares immediately as of the Effective Date, and the balance of __________ (________) shares, pro rata, on a monthly basis, as of the first of each month thereafter, over a three-year period. Specifically, as long as you are a Director in good standing of the Company, you will be vested _______ shares per month. These share numbers will be adjusted to reflect any stock splits.

 

5.3 The Company will also reimburse you for all reasonable and properly documented expenses you incur in performing the duties of your office including travelling expenses necessarily incurred by you to attend Board meetings. Expenses should be claimed monthly in writing.

 

5.4 On termination of the appointment for any reason, you will not be entitled to any compensation for loss of office.

 

6. Outside Interests

 

It is understood that you have business interests other than those of the Company, and indeed, the fact that you do so is of substantial benefit to the Company and enables you to make a full contribution to the work of the Board by bringing your other experience to bear. In the event that through your other business interests you become aware of a potential conflict of interest with your position with the Company you should notify the other directors promptly.

 

  A- 3 -

 

  

 

 

7. Confidential Information

 

7.1 During the course of your appointment you may have access to and become familiar with various secret, proprietary and/or confidential information as set out below (“Confidential Information and Intellectual Property”). You must not at any time whether before or after the termination of your appointment with the Company disclose to any person, firm, company or organisation whatsoever nor use, share, print nor publish any secret, proprietary or confidential information, matter or thing relating to the Company or the business thereof except in the proper performance of your duties or with the prior written consent of the Board or as required by law. For the purposes of this paragraph, information shall be secret, proprietary and/or confidential if a reasonable business person would expect that the Company wishes it to be confidential. Confidential information may relate to or consist of lists or details of customers, details of customers’ contracts, license agreements, customers’ requirements, information relating to any process or invention, engineering developments, schematics, analysis or research used or produced by the Company and any subsidiary or holding company of the Company or any consultant, or any third party research provider or other service provider to or on behalf of the Company (“the Group”), information and knowledge pertaining to business methods, inventions, innovations, designs, ideas, plans, trade secrets, proprietary information, advertising, sales and profit figures, contact lists, and relationships between the Company and its affiliates, customers, clients, Employees, licensees, suppliers, and others who have business dealings with the Company or the Group, computer codes (whether source or object), computer programs or applications, software specifications, user and/or instruction manuals and/or any other documentation relating to such computer programs or applications, databases of suppliers, customers/clients, employees and target customers/clients, product lists, service level agreements, price lists, discounts, mark-ups, marketing plans, future business strategy, tenders, price-sensitive information, staff salary and incentive details, financial management and organisational information of the Company or any other companies in the Group, any litigation or threatened action involving the Company or any other companies in the Group, all information in respect of which the Company is bound by an express or implied obligation of confidence to any third party and any other matter which is notified to you during the course of your appointment as being secret, proprietary or confidential. This does not apply to any information in the public domain of which you are aware independently of this appointment.

 

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7.2 You shall use the same level of care to prevent any unauthorized use or disclosure of the Confidential Information and Intellectual Property as you exercise in protecting your own information of a similar nature, but in no event less than a reasonable standard of care. You shall not, without the prior written consent of the Company, make use of the Confidential Information disclosed to it for any purpose other than conducting in good faith your duties as director of the Company, This Section will remain in force for three (3) years following the termination of the Agreement. All documents and other tangible objects containing or representing Confidential Information or Intellectual Property that have been disclosed by the Company that are in your possession shall be and remain the property of the Company and shall be promptly returned to the Company upon request.

 

8. Non-Competition during and after Termination/Cessation of Employment

 

8.1 The Company may protect its goodwill and trade connections from any unfair competition.

 

8.2 Throughout the term of this Agreement and for 12 months after termination of your membership on the Board, you are not permitted to seek business nor solicit any person, firm or company who at any time during the 12 months immediately preceding the termination has been a customer of the Company, or done business with it and any of the Company’s employees.

 

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9. Termination

 

The Company may terminate your appointment to the Board at any time in accordance with the provisions of the FBCA. All provisions of this letter, other than the confidentiality provisions of Section 7 and the restrictive covenant in Section 8 hereof, shall terminate simultaneous with the termination of your Board membership. Upon termination, you will receive a certificate for any shares of the Company’s common stock that you have earned and vested, and all shares issued to you hereunder that have not vested shall be cancelled.

 

10. Professional Advice

 

Occasions may arise when you consider that you need professional advice in connection with the performance of your duties as a director and you will be able to consult the Company’s advisers for this purpose. Circumstances may occur when it may be appropriate for you to seek such advice from independent advisers at the Company’s expense. Such circumstances would be unusual and, if possible, the other directors should be referred to in the first instance.

 

11. Representation and Warranties: Indemnification

 

11.1 You warrant and represent that you are duly qualified to perform the duties hereunder, and further covenant that in performing your duties hereunder, you will not engage in activity that is in violation of applicable laws or subject the Company to liability thereunder. You further warrant that your execution of this Agreement and the performance of services hereunder does not violate any agreement to which you are a party nor give any prior employer, partner, associate or any other person any legal or equitable rights against you or the Company.

 

11.2 The Company commits to make all reasonable efforts to obtain a directors’ and officers’ insurance policy as soon as commercially reasonable and the Company further agrees to sign the Indemnification Agreement in the form of Exhibit A hereto. To the fullest extent permitted by applicable law, the Company agrees that it will not voluntarily change the terms of such D&O Insurance to your detriment at anytime while you are entitled to benefit of such D&O Insurance or Indemnification Agreement. Additionally, you shall be entitled to such indemnification by the Company as is prescribed in the laws of the State of Florida or in the Charter or Bylaws of the Company.

 

12. Governing law and jurisdiction

 

This Agreement shall be governed by and construed in accordance with the laws of the State of Florida.

 

Please sign and return to me the enclosed copy to acknowledge acceptance of the terms set out herein.

 

Yours sincerely,

 

Barry F. Cohen

For and on behalf of AVRA Medical Robotics, Inc.

 

I hereby agree to act as non-executive director of AVRA Medical Robotics, Inc. upon the terms set out in the letter of which this is a copy.

 

Signed     Dated  

 

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Role

 

Non-executive directors have the same general legal responsibilities to the Company as any other director. The Board as a whole is collectively responsible for promoting the success of the Company by directing and supervising the Company’s affairs.

 

The Board:

 

· Provides entrepreneurial leadership of the Company within a framework of prudent and effective controls which enable risk to be assessed and managed; and

 

· Set the Company’s strategic aims, ensures that the necessary financial and human resources are in place for the Company to meet its objectives, and reviews management performance; and

 

· Sets the Company’s values and standards and ensures that its obligations to its shareholders and others are understood and met.

 

In addition to these requirements of all directors, the role of a non-executive has the following key elements:

 

· Strategy: constructively challenge and contribute to the development of strategy; and

 

· Performance: scrutinise the performance of management in meeting agreed goals and objectives and monitor the reporting of performance; and

 

· Risk: satisfy themselves that financial information is accurate and that financial controls and systems of risk management are robust and defensible; and

 

· People: be responsible for determining appropriate levels of remuneration of executive directors, taking a prime role in appointing, and where necessary, removing senior management and in succession planning.

 

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EXHIBIT A

 

INDEMNIFICATION AGREEMENT

 

This Indemnification Agreement (this “ Agreement ”), dated as of the ___ day of _________, 201_ is made by and between Avra Medical Robotics Inc., a Florida corporation (the “ Company ”), ___________________________, residing at ______________________________________, USA (hereinafter the “ Indemnitee ”).

 

RECITALS

 

A.           The Company and the Indemnitee recognize that the present state of the law is too uncertain to provide the Company’s officers and directors with adequate and reliable advance knowledge or guidance with respect to the legal risks and potential liabilities to which they may become personally exposed as a result of performing their duties for the Company;

 

B.           The Company and the Indemnitee are aware of the substantial growth in the number of lawsuits filed against corporate officers and directors in connection with their activities in such capacities and by reason of their status as such;

 

C.           The Company and the Indemnitee recognize that the cost of defending against such lawsuits, whether or not meritorious, is typically beyond the financial resources of most officers and directors of the Company;

 

D.           The Company and the Indemnitee recognize that the legal risks and potential liabilities, and the threat thereof, associated with proceedings filed against the officers and directors of the Company bear no reasonable relationship to the amount of compensation received by the Company’s officers and directors;

 

E.           The Company, after reasonable investigation prior to the date hereof, has determined that the liability insurance coverage available to the Company as of the date hereof is inadequate, unreasonably expensive or both. The Company believes, therefore, that the interest of the Company and its current and future stockholders would be best served by a combination of (i) such insurance as the Company may obtain pursuant to the Company’s obligations hereunder and (ii) a contract with its officers and directors, including the Indemnitee, to indemnify them to the fullest extent permitted by law (as in effect on the date hereof, or, to the extent any amendment may expand such permitted indemnification, as hereafter in effect) against personal liability for actions taken in the performance of their duties to the Company;

 

F.           Section 607.0850 of the Florida Business Corporation Act empowers Florida corporations to indemnify their officers and directors and further states that the indemnification provided by Section 607.0850 shall not be deemed exclusive of any other rights to which those seeking indemnification may be entitled under the articles of incorporation or any bylaw, agreement, vote of stockholders or disinterested directors or otherwise, both as to action in an official capacity and as to action in another capacity while holding such office; thus, Section 607.0850 does not by itself limit the extent to which the Company may indemnify persons serving as its officers and directors;

 

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G.           The Company’s Articles of Incorporation and Bylaws authorize the indemnification of the officers and directors of the Company in excess of that expressly permitted by Section 607.0850;

 

H.           The Board of Directors of the Company has concluded that, to retain and attract talented and experienced individuals to serve as officers and directors of the Company and to encourage such individuals to take the business risks necessary for the success of the Company, it is necessary for the Company to contractually indemnify its officers and directors, and to assume for itself liability for expenses and damages in connection with claims against such officers and directors in connection with their service to the Company, and has further concluded that the failure to provide such contractual indemnification could result in great harm to the Company and its stockholders;

 

I.           The Company desires and has requested the Indemnitee to serve or continue to serve as a director or officer of the Company, free from undue concern for the risks and potential liabilities associated with such services to the Company; and

 

J.           The Indemnitee is willing to serve, or continue to serve, the Company, provided, and on the expressed condition, that the Indemnitee is furnished with the indemnification provided for herein.

 

AGREEMENT

 

NOW, THEREFORE, the Company and Indemnitee agree as follows:

 

1.          DEFINITIONS.

 

(a)          “EXPENSES” means, for the purposes of this Agreement, all direct and indirect costs of any type or nature whatsoever (including, without limitation, any fees and disbursements of Indemnitee’s counsel, accountants and other experts and other out-of-pocket costs) actually and reasonably incurred by the Indemnitee in connection with the investigation, preparation, defense or appeal of a Proceeding; provided, however, that Expenses shall not include judgments, fines, penalties or amounts paid in settlement of a Proceeding.

 

(b)          “PROCEEDING” means, for the purposes of this Agreement, any threatened, pending or completed action or proceeding, whether civil, criminal, administrative or investigative (including an action brought by or in the right of the Company) in which Indemnitee may be or may have been involved as a party or otherwise, by reason of the fact that Indemnitee is or was a director or officer of the Company, by reason of any action taken by Indemnitee or of any inaction on his or her part while acting as such director or officer or by reason of the fact that he or she is or was serving at the request of the Company as a director, officer, employee or agent of another foreign or domestic corporation, partnership, joint venture, trust or other enterprise, or was a director or officer of the foreign or domestic corporation which was a predecessor corporation to the Company or of another enterprise at the request of such predecessor corporation, whether or not he or she is serving in such capacity at the time any liability or expense is incurred for which indemnification or reimbursement can be provided under this Agreement.

 

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2.          AGREEMENT TO SERVE. Indemnitee agrees to serve or continue to serve as a director or officer of the Company to the best of his or her abilities at the will of the Company or under separate contract, if such contract exists, for so long as Indemnitee is duly elected or appointed and qualified or until such time as the Indemnitee tenders his or her resignation in writing. Nothing contained in this Agreement is intended to create in Indemnitee any right to continued employment.

 

3.          INDEMNIFICATION.

 

(a)          THIRD PARTY PROCEEDINGS. The Company shall indemnify Indemnitee against Expenses, judgments, fines, penalties or amounts paid in settlement (if the settlement is approved in advance by the Company) actually and reasonably incurred by Indemnitee in connection with a Proceeding (other than a Proceeding by or in the right of the Company) if Indemnitee acted in good faith and in a manner Indemnitee reasonably believed to be in the best interests of the Company, and, with respect to any criminal action or proceeding, had no reasonable cause to believe Indemnitee’s conduct was unlawful. The termination of any Proceeding by judgment, order, settlement, conviction, or upon a plea of NOLO CONTENDERE or its equivalent, shall not, of itself, create a presumption that Indemnitee did not act in good faith and in a manner which Indemnitee reasonably believed to be in the best interests of the Company, or, with respect to any criminal Proceeding, had no reasonable cause to believe that Indemnitee's conduct was unlawful.

 

(b)          PROCEEDINGS BY OR IN THE RIGHT OF THE COMPANY. To the fullest extent permitted by law, the Company shall indemnify Indemnitee against Expenses and amounts paid in settlement, actually and reasonably incurred by Indemnitee in connection with a Proceeding by or in the right of the Company to procure a judgment in its favor if Indemnitee acted in good faith and in a manner Indemnitee reasonably believed to be in the best interests of the Company and its stockholders. Notwithstanding the foregoing, no indemnification shall be made in respect of any claim, issue or matter as to which Indemnitee shall have been adjudged liable to the Company in the performance of Indemnitee’s duty to the Company and its stockholders unless and only to the extent that the court in which such action or Proceeding is or was pending shall determine upon application that, in view of all the circumstances of the case, Indemnitee is fairly and reasonably entitled to indemnity for Expenses and then only to the extent that the court shall determine.

 

(c)          SCOPE. Notwithstanding any other provision of this Agreement but subject to Section 3(b) and Section 14(b), the Company shall indemnify the Indemnitee to the fullest extent permitted by law, notwithstanding that such indemnification is not specifically authorized by other provisions of this Agreement, the Company’s Articles of Incorporation, the Company’s Bylaws or by statute.

 

4.          LIMITATIONS ON INDEMNIFICATION. Any other provision herein to the contrary notwithstanding, the Company shall not be obligated pursuant to the terms of this Agreement:

 

(a)          EXCLUDED ACTS. To indemnify Indemnitee for any acts or omissions or transactions from which a director may not be relieved of liability under applicable law;

 

(b)          EXCLUDED INDEMNIFICATION PAYMENTS. To indemnify or advance Expenses in violation of any prohibition or limitation on indemnification under the statutes, regulations or rules promulgated by any state or federal regulatory agency having jurisdiction over the Company;

 

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(c)          CLAIMS INITIATED BY INDEMNITEE. To indemnify or advance Expenses to Indemnitee with respect to Proceedings or claims initiated or brought voluntarily by Indemnitee and not by way of defense, except with respect to Proceedings brought to establish or enforce a right to indemnification under this Agreement or any other statute or law or otherwise as required under Section 607.0850 of the Florida Business Corporation Act, but such indemnification or advancement of Expenses may be provided by the Company in specific cases if the Board of Directors has approved the initiation or bringing of such suit;

 

(d)          LACK OF GOOD FAITH. To indemnify Indemnitee for any Expenses incurred by the Indemnitee with respect to any Proceeding instituted by Indemnitee to enforce or interpret this Agreement, if a court of competent jurisdiction determines that each of the material assertions made by the Indemnitee in such Proceeding was not made in good faith or was frivolous;

 

(e)          INSURED CLAIMS. To indemnify Indemnitee for Expenses or liabilities of any type whatsoever (including, but not limited to, judgments, fines, ERISA excise taxes or penalties, and amounts paid in settlement) which have been paid directly to or on behalf of Indemnitee by an insurance carrier under a policy of directors’ and officers’ liability insurance maintained by the Company or any other policy of insurance maintained by the Company or Indemnitee; or

 

(f)          CLAIMS UNDER SECTION 16(b). To indemnify Indemnitee for Expenses and the payment of profits arising from the purchase and sale by Indemnitee of securities in violation of Section 16(b) of the Securities Exchange Act of 1934, as amended, or any similar successor statute.

 

5.          DETERMINATION OF RIGHT TO INDEMNIFICATION. Upon receipt of a written claim addressed to the Board of Directors for indemnification pursuant to Section 3, the Company shall determine by any of the methods set forth in Section 607.0850 of the Florida Business Corporation Act whether Indemnitee has met the applicable standards of conduct which makes it permissible under applicable law to indemnify Indemnitee. If such standards have been met and a claim under Section 3 is not paid in full by the Company within ninety (90) days after such written claim has been received by the Company, the Indemnitee may at any time thereafter bring suit against the Company to recover the unpaid amount of the claim and, unless such action is dismissed by the court as frivolous or brought in bad faith, the Indemnitee shall be entitled to be paid also the expense of prosecuting such claim. The court in which such action is brought shall determine whether Indemnitee or the Company shall have the burden of proof concerning whether Indemnitee has or has not met the applicable standard of conduct.

 

6.          ADVANCEMENT AND REPAYMENT OF EXPENSES. Subject to Section 4 hereof, the Expenses incurred by Indemnitee in defending and investigating any Proceeding shall be paid by the Company in advance of the final disposition of such Proceeding within 30 days after receiving from Indemnitee the copies of invoices presented to Indemnitee for such Expenses, if Indemnitee shall provide an undertaking to the Company to repay such amount to the extent it is ultimately determined that Indemnitee is not entitled to indemnification. In determining whether or not to make an advance hereunder, the ability of Indemnitee to repay shall not be a factor. Notwithstanding the foregoing, in a proceeding brought by the Company directly, in its own right (as distinguished from an action bought derivatively or by any receiver or trustee), the Company shall not be required to make the advances called for hereby if the Board of Directors determines, in its sole discretion, that it does not appear that Indemnitee has met the standards of conduct which make it permissible under applicable law to indemnify Indemnitee and the advancement of Expenses would not be in the best interests of the Company and its stockholders.

 

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7.          PARTIAL INDEMNIFICATION. If the Indemnitee is entitled under any provision of this Agreement to indemnification or advancement by the Company of some or a portion of any Expenses or liabilities of any type whatsoever (including, but not limited to, judgments, fines, penalties, and amounts paid in settlement) incurred by him in the investigation, defense, settlement or appeal of a Proceeding, but is not entitled to indemnification or advancement of the total amount thereof, the Company shall nevertheless indemnify or pay advancements to the Indemnitee for the portion of such Expenses or liabilities to which the Indemnitee is entitled.

 

8.          NOTICE TO COMPANY BY INDEMNITEE. Indemnitee shall notify the Company in writing of any matter with respect to which Indemnitee intends to seek indemnification hereunder as soon as reasonably practicable following the receipt by Indemnitee of written notice thereof; provided, however, that any delay in so notifying the Company shall not constitute a waiver by Indemnitee of her rights hereunder. The written notification to the Company shall be addressed to the Board of Directors and shall include a description of the nature of the Proceeding and the facts underlying the Proceeding and be accompanied by copies of any documents filed with the court in which the Proceeding is pending. In addition, Indemnitee shall give the Company such information and cooperation as it may reasonably require and as shall be within Indemnitee’s power.

 

9.          MAINTENANCE OF LIABILITY INSURANCE.

 

(a)          Subject to Section 4 hereof, the Company hereby agrees that so long as Indemnitee shall continue to serve as a director or officer of the Company and thereafter so long as Indemnitee shall be subject to any possible Proceeding, the Company, subject to Section 9(b), shall use reasonable commercial efforts to obtain and maintain in full force and effect directors’ and officers’ liability insurance (“ D&O Insurance ”) which provides Indemnitee the same rights and benefits as are accorded to the most favorably insured of the Company’ directors, if Indemnitee is a director; or of the Company’s officers, if Indemnitee is not a director of the Company but is an officer.

 

(b)          Notwithstanding the foregoing, the Company shall have no obligation to obtain or maintain D&O Insurance if the Company determines in good faith that such insurance is not reasonably available, the premium costs for such insurance are disproportionate to the amount of coverage provided, the coverage provided by such insurance is limited by exclusions so as to provide an insufficient benefit, or the Indemnitee is covered by similar insurance maintained by a subsidiary or parent of the Company.

 

(c)          If, at the time of the receipt of a notice of a claim pursuant to Section 8 hereof, the Company has D&O Insurance in effect, the Company shall give prompt notice of the commencement of such Proceeding to the insurers in accordance with the procedures set forth in the respective policies. The Company shall thereafter take all necessary or desirable action to cause such insurers to pay, on behalf of the Indemnitee, all amounts payable as a result of such Proceeding in accordance with the terms of such policies.

 

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10.         DEFENSE OF CLAIM. In the event that the Company shall be obligated under Section 6 hereof to pay the Expenses of any Proceeding against Indemnitee, the Company, if appropriate, shall be entitled to assume the defense of such Proceeding, with counsel approved by Indemnitee, which approval shall not be unreasonably withheld, upon the delivery to Indemnitee of written notice of its election to do so. After delivery of such notice, approval of such counsel by Indemnitee and the retention of such counsel by the Company, the Company will not be liable to Indemnitee under this Agreement for any fees of counsel subsequently incurred by Indemnitee with respect to the same Proceeding, provided that (i) Indemnitee shall have the right to employ counsel in any such Proceeding at Indemnitee’s expense; and (ii) if (A) the employment of counsel by Indemnitee has been previously authorized by the Company, or (B) Indemnitee shall have reasonably concluded that there may be a conflict of interest between the Company and the Indemnitee in the conduct of such defense or (C) the Company shall not, in fact, have employed counsel to assume the defense of such Proceeding, then the fees and expenses of Indemnitee’s counsel shall be at the expense of the Company.

 

11.         ATTORNEYS’ FEES. In the event that Indemnitee or the Company institutes an action to enforce or interpret any terms of this Agreement, the Company shall reimburse Indemnitee for all of the Indemnitee’s reasonable fees and expenses in bringing and pursuing such action or defense, unless as part of such action or defense, a court of competent jurisdiction determines that the material assertions made by Indemnitee as a basis for such action or defense were not made in good faith or were frivolous.

 

12.         CONTINUATION OF OBLIGATIONS. All agreements and obligations of the Company contained herein shall continue during the period the Indemnitee is a director or officer of the Company, or is or was serving at the request of the Company as a director, officer, fiduciary, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, and shall continue thereafter so long as the Indemnitee shall be subject to any possible proceeding by reason of the fact that Indemnitee served in any capacity referred to herein.

 

13.         SUCCESSORS AND ASSIGNS. This Agreement establishes contract rights that shall be binding upon, and shall inure to the benefit of, the successors, assigns, heirs and legal representatives of the parties hereto.

 

14.         NON-EXCLUSIVITY.

 

(a)          The provisions for indemnification and advancement of expenses set forth in this Agreement shall not be deemed to be exclusive of any other rights that the Indemnitee may have under any provision of law, the Company’s Articles of Incorporation or Bylaws, the vote of the Company’s stockholders or disinterested directors, other agreements or otherwise, both as to action in the Indemnitee’s official capacity and action in another capacity while occupying the Indemnitee’s position as a director or officer of the Company.

 

(b)          In the event of any changes, after the date of this Agreement, in any applicable law, statute, or rule which expand the right of a Florida corporation to indemnify its officers and directors, the Indemnitee’s rights and the Company’s obligations under this Agreement shall be expanded to the full extent permitted by such changes. In the event of any changes in any applicable law, statute or rule, which narrow the right of a Florida corporation to indemnify a director or officer, such changes, to the extent not otherwise required by such law, statute or rule to be applied to this Agreement, shall have no effect on this Agreement or the parties’ rights and obligations hereunder.

 

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15.         EFFECTIVENESS OF AGREEMENT. To the extent that the indemnification permitted under the terms of certain provisions of this Agreement exceeds the scope of the indemnification provided for in the Florida Statutes, such provisions shall not be effective unless and until the Company’s Articles of Incorporation authorize such additional rights of indemnification. In all other respects, the balance of this Agreement shall be effective as of the date set forth on the first page and may apply to acts of omissions of Indemnitee which occurred prior to such date if Indemnitee was an officer, director, employee or other agent of the Company, or was serving at the request of the Company as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, at the time such act or omission occurred.

 

16.         SEVERABILITY. Nothing in this Agreement is intended to require or shall be construed as requiring the Company to do or fail to do any act in violation of applicable law. The Company’s inability, pursuant to court order, to perform its obligations under this Agreement shall not constitute a breach of this Agreement. The provisions of this Agreement shall be severable as provided in this Section 16. If this Agreement or any portion hereof shall be invalidated on any ground by any court of competent jurisdiction, then the Company shall nevertheless indemnify Indemnitee to the full extent permitted by any applicable portion of this Agreement that shall not have been invalidated, and the balance of this Agreement not so invalidated shall be enforceable in accordance with its terms.

 

17.         GOVERNING LAW. This Agreement shall be interpreted and enforced in accordance with the laws of the State of Florida, without reference to its conflict of law principals. To the extent permitted by applicable law, the parties hereby waive any provisions of law which render any provision of this Agreement unenforceable in any respect.

 

18.         NOTICE. All notices, requests, demands and other communications under this Agreement shall be in writing and shall be deemed duly given (i) if delivered by hand and receipted for by the party addressee or (ii) if mailed by certified or registered mail with postage prepaid, on the third business day after the mailing date. Addresses for notice to either party are as shown on the signature page of this Agreement, or as subsequently modified by written notice.

 

19.         MUTUAL ACKNOWLEDGMENT. Both the Company and Indemnitee acknowledge that in certain instances, federal law or applicable public policy may prohibit the Company from indemnifying its directors and officers under this Agreement or otherwise. Indemnitee understands and acknowledges that the Company has undertaken or may be required in the future to undertake with the appropriate state or federal regulatory agency to submit for approval any request for indemnification, and has undertaken or may be required in the future to undertake with the Securities and Exchange Commission to submit the question of indemnification to a court in certain circumstances for a determination of the Company’s right under public policy to indemnify Indemnitee.

 

20.         COUNTERPARTS. This Agreement may be executed in one or more counterparts, each of which shall constitute an original.

 

21.         AMENDMENT AND TERMINATION. No amendment, modification, termination or cancellation of this Agreement shall be effective unless in writing signed by both parties hereto.

 

[ Signature Page Follows ]

 

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IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year set forth above.

 

  AVRA MEDICAL ROBOTICS INC.
     
  BY:  
  Name:  
  Title:  
     
  INDEMNITEE
   
   
  Name:  
     
  Address:  

 

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Exhibit 10.7

 

 

August 20, 2016

 

AVRA MEDICAL ROBOTICS, INC.

 

Code of Business Conduct and Ethics

for Employees and Directors

 

Introduction

 

This is the Code of Conduct for AVRA Medical Robotics, Inc. Employees and Directors (the “Code”). This Code sets out ten important rules that we, as members of the Board of Directors of AVRA Medical Robotics, Inc. (the “Board”), and as employees, have chosen to guide us during our service to AVRA Medical Robotics, Inc. The Board’s Audit Committee administers this Code. Annually, each director and senior management employee acknowledges in writing the receipt, review, and understanding of this Code. Every employee is expected to abide by the spirit and intent of the Code. No code can anticipate every situation that may arise nor can it replace the thoughtful behavior of an ethical employee or director. Rather, this Code provides guidance for handling situations as they arise.

 

We raise any questions or concerns about this Code or any related situation to the Chair of the Audit Committee, who may consult with the Committee as a whole, AVRA Medical Robotics, Inc. Corporate Secretary, Chief Compliance Officer or other counsel.

 

Objective—Earning and Maintaining Trust

 

This Code is part of AVRA Medical Robotics, Inc.’s commitment to integrity. This Code focuses on areas of ethical risk, provides guidance to help us recognize and deal with ethical issues, provides mechanisms to report unethical conduct, and helps foster a culture of honesty and accountability. The ten rules in this Code guide our handling of ethical matters and describe the values that guide us in our decisions, particularly the most essential value – trust. Trust means that others can rely on us to speak truthfully, to honor our commitments, and to treat others fairly. AVRA Medical Robotics, Inc.’s reputation for integrity is one of our most valuable assets. AVRA Medical Robotics, Inc. must earn and keep the trust of investors, consumers, customers, business partners, employees, and the general public. Maintaining and improving this trust requires that we follow this Code’s principles and rules.

 

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The Rules

 

Rule #1. Give AVRA Medical Robotics, Inc. our complete business loyalty.

 

While we serve the Company, AVRA Medical Robotics, Inc. shareholders expect us to make business decisions without the influence of any improper personal interest or gain. Therefore, we avoid situations in which our personal interests interfere, or appear to interfere, in any way with AVRA Medical Robotics, Inc.’s interests. Conflicts arise when our personal interests make it difficult to perform our responsibilities objectively or effectively. Conflicts of interest also may arise when we, or a family member, receive improper personal benefits because of our positions as employees or members of the Board.

 

Situations involving a conflict of interest are not always obvious or easy to resolve. Therefore, we bring any questions concerning potential conflicts to the Chair of the Audit Committee. We disclose immediately to the Chair of the Audit Committee any situation that could involve an actual or potential conflict of interest. Family members for purposes of this Code include a spouse, parents, children, siblings, fathers and mothers-in-law, sons and daughters-in-law, brothers and sisters-in-law. and anyone who shares the employee’s or director’s home.

 

The Chair of the Audit Committee may consult with the Committee as a whole, the Corporate Secretary, General Counsel, Chief Compliance Officer or other counsel regarding any potential conflicts.

 

Examples of common conflicts that we avoid or disclose to the Chair of the Audit Committee include the following:

 

Personal benefits and gifts . We do not receive a personal benefit from any person or firm seeking or currently doing business with AVRA Medical Robotics, Inc. Personal benefits include consultant fees, exercisable stock options or other remuneration, non-cash gifts, meals or entertainment (other than those of nominal value and for ordinary business purposes), or any other benefit that a reasonable person may conclude could affect our objectivity. We never accept cash or cash equivalents, bribes or kickbacks.

 

Competition . We do not compete with AVRA Medical Robotics, Inc.

 

Personal use of AVRA Medical Robotics, Inc. assets . We do not use AVRA Medical Robotics, Inc. assets, labor, resources, or information except for legitimate AVRA Medical Robotics, Inc. business purposes.

 

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Loans and Guarantees. We do not accept loans or guarantees from AVRA Medical Robotics, Inc.

 

Compensation from non - Avra Medical Robotics, Inc .sources. We do not accept compensation (in any form) for services we perform for AVRA Medical Robotics, Inc. from any source other than AVRA Medical Robotics, Inc.

 

Conflicts arising from a role at other organizations. We sometimes serve as a director, officer or employee of, serve as an advisor or consultant to, are a significant investor in, or have a similar role at another organization. If we encounter a situation where our current role in that other organization could have the potential to conflict, or appear to conflict with AVRA Medical Robotics, Inc. interests, we immediately:

 

(i) inform the Chair of the Audit Committee,

(ii) take appropriate action, including recusing ourselves from participation in the Board’s or Committee’s discussion and consideration of any matter related to or giving rise to the potential conflict,

(iii) take all actions requested by the Chair of the Audit Committee or the Chair’s designee, and

(iv) take any other action which is necessary or appropriate under the circumstances.

 

Prior to accepting a new role at another organization, we consider whether that role could have the potential to conflict, or appear to conflict with AVRA Medical Robotics, Inc. interests and follow these same steps.

 

Our family members’ activities also may create a situation involving a conflict of interest and we disclose any family member’s relationship that involves an actual or potential conflict of interest with AVRA Medical Robotics, Inc.

 

Rule #2. Never trade on inside information.

 

We do not trade securities while we have material non-public information. Material information includes anything likely to influence a potential investor’s decision to trade in securities including, but not limited to, information about mergers, earnings, projects, and changes in management. In addition to AVRA Medical Robotics, Inc. securities, this restriction applies to the trading of the securities of AVRA Medical Robotics, Inc. customers, suppliers, or other business partners if we have material non-public information about them. Further, if we cannot make trades because we possess material non-public information, neither can our family members.

 

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Rule #3. Honor Confidentiality.

 

We maintain the confidentiality of all information entrusted to us during our service to AVRA Medical Robotics, Inc. We share that information only when AVRA Medical Robotics, Inc.’s Corporate Secretary or General Counsel advises that disclosure is authorized or legally mandated. Confidential information includes all non-public information related to AVRA Medical Robotics, Inc. We also exercise due care in handling AVRA Medical Robotics, Inc. proprietary and confidential information. We avoid discussing this information in public areas or with family members. Our obligation to preserve AVRA Medical Robotics, Inc. confidential information is ongoing, even after our service on the Board concludes.

 

Rule #4. Never Misappropriate Corporate Opportunities. Ensure Proper Use of Corporate Assets.

 

We owe a duty to AVRA Medical Robotics, Inc. to advance its legitimate interests when the opportunity to do so arises. We do not use opportunities that we discover using AVRA Medical Robotics, Inc. corporate property, information, or position for our personal benefit unless AVRA Medical Robotics, Inc.’s disinterested directors determine that AVRA Medical Robotics, Inc. will not pursue such opportunity. We use corporate property, information, or position only for legitimate business purposes; never for personal gain. We protect AVRA Medical Robotics, Inc. assets and ensure their efficient use.

 

Rule #5. We Provide Accurate Information to AVRA Medical Robotics, Inc.

 

AVRA Medical Robotics, Inc. relies on information that we provide when it prepares disclosure documents and regulatory filings and for other purposes. We are truthful, forthright, and accurate when preparing director questionnaires, stock information forms, expense reimbursement forms, and other documents for AVRA Medical Robotics, Inc. use.

 

Rule #6. Comply with Laws, Rules and Regulations.

 

We do not instruct others to commit illegal or unethical acts for any reason when they are conducting business for AVRA Medical Robotics, Inc.

 

Each of us is an AVRA Medical Robotics, Inc. representative and we deal fairly with others (including AVRA Medical Robotics, Inc. customers, suppliers, competitors, and employees) when conducting AVRA Medical Robotics, Inc. business. We do not take unfair advantage of anyone through manipulation, concealment, abuse of privileged information, misrepresentation of material facts, or any other unfair dealing practice.

 

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Rule #7. Honor AVRA Medical Robotics, Inc. Values.

 

No set of rules could answer every question that we face as employees. When these rules do not address a situation, we refer to AVRA Medical Robotics, Inc. values for guidance. These are:

 

We inspire trust.

We act like owners.

We keep it simple.

We are open and inclusive.

We tell it like it is.

We lead from the head and the heart.

We discuss. We decide. We deliver.

 

As employees and directors of AVRA Medical Robotics, Inc., we champion these values and encourage all AVRA Medical Robotics, Inc. employees and directors to follow them. We ask questions when we are not sure what to do. Fortunately, we have many places to turn for help, among them, the Corporate Secretary, the General Counsel, the Chief Compliance Officer, other counsel, and outside advisors. We never hesitate to consult them.

 

Rule #8. Report Any Concerns.

 

If we suspect a violation of this Code, we promptly communicate that concern to the Chair of the Audit Committee. We communicate any concerns about the Chair of the Audit Committee to the Chairman of the Board.

 

Rule #9. Address Reports of Concerns about Director Behavior.

 

If an employee or director violates this Code, we all suffer consequences, especially AVRA Medical Robotics, Inc. Ignoring violations leads to greater problems and damages trust. The Audit Committee or its designee promptly addresses reports of concerns about employee or director behavior and carefully looks into the facts and circumstances surrounding any report. The Audit Committee or its designee conducts all investigations fairly and considers all relevant information. The Audit Committee actively addresses any violations of this Code. Upon advice of legal counsel, AVRA Medical Robotics, Inc. may report violations of the Code that involve illegal behavior to the appropriate authorities.

 

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Rule #10. We Encourage Others to Report Concerns and We Do Not Retaliate.

 

As employees and directors, we support management’s efforts to promote honest behavior and an ethical environment at AVRA Medical Robotics, Inc. If anyone suspects that there has been a violation of the law, this Code, or any AVRA Medical Robotics, Inc. policy, we encourage them to raise that concern so that AVRA Medical Robotics, Inc. can act quickly. These concerns can be raised immediately and anonymously by calling the AVRA Medical Robotics, Inc. Integrity HelpLine.

 

AVRA Medical Robotics, Inc. does not tolerate retaliation against anyone for raising a concern in good faith. Raising good faith concerns is vital to AVRA Medical Robotics, Inc.’s success.

 

Waivers and Amendments

 

In the unlikely event that a waiver of this Code would be in AVRA Medical Robotics, Inc.’s best interests, only the Board may grant such waiver.

 

Only the Board may amend this Code. AVRA Medical Robotics, Inc. promptly discloses to its shareholders (by posting on www.avra medical.com or making other required public disclosure) any waiver or amendment to this Code.

 

Barry F. Cohen

Chairman of the Board and Chief Executive Officer

 

A.    Christian Schauer

Chief Financial Officer

 

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Exhibit 23.1

 

De Leon & Company, P.A.

CERTIFIED PUBLIC ACCOUNTANTS AND CONSULTANTS

510 NW 159 th Lane

Pembroke Pines, Florida 33028

(954) 445-6478 fax (954) 438-6481

  WWW.DLCPAS.COM

 

 

CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANT

 

We hereby consent to the use in the Form S-1 Registration Statement of Avra Medical Robotics, Inc. to be filed on or around February 14, 2017 our report for the period ended December 31, 2015 relating to the financial statements of Avra Medical Robotics, Inc. which appears in such Form S-1, and to the reference to our Firm under the caption "Experts" in such filing.

 

 

Certified Public Accountants

 

February 14, 2017

 

 

MEMBER: FLORIDA INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS BOARD CERTIFIED IN BUSINESS APPRAISALS
INSTITUTE OF MANAGEMENT ACCOUNTANTS CERTIFIED MANAGEMENT ACCOUNTANT
INSTITUTE OF FRAUD EXAMINERS CERTIFIED IN FINANCIAL MANAGEMENT
  MASTERS IN BUSINESS ADMINISTRATION