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SUBSEQUENT EVENTS
6 Months Ended
Jun. 30, 2011
Notes to Financial Statements  
SUBSEQUENT EVENTS

NOTE H – SUBSEQUENT EVENTS

 

On June 18, 2011, the Company entered into an Agreement and Plan of Merger (the "Agreement") with VitaMedMD, LLC, a Delaware limited liability company ("VitaMed") and VitaMed Acquisition, LLC, a Delaware limited liability company and wholly owned subsidiary of the Company ("Merger Sub").   pursuant to which the Company will acquire 100% of VitaMed and as a result VitaMed will become a wholly-owned subsidiary of the Company.  The proposed acquisition will be accomplished through the merger of Merger Sub with and into VitaMed with VitaMed being the surviving limited liability company (the "Merger").  The Merger will become effective on the date a certificate of merger is filed with the Delaware Secretary of State (the "Effective Time").  The Closing (the “Closing”) is scheduled to occur on or about September 7, 2011 and is subject to completion of the corporate actions described below.

 

VitaMed is a specialty pharmaceutical company focused on creating value by eliminating inefficiencies in the multi-billion dollar prescription and OTC nutrition and medical foods market while leveraging an innovative, patent-pending informational technology platform. VitaMed primarily markets its products directly to women with the recommendation of their doctor.  By significantly eliminating much of the cost associated with the traditional distribution models, vitaMed offers superior-quality products for a lower overall cost to patient and payors while increasing efficiencies for the physician. In addition, vitaMed's information technology collects and analyzes data designed to improve patient compliance and education, facilitate product development and provide immediate feedback on effectiveness of therapies.  The result is increased efficiency and communication between the patient, physician and payor, ultimately creating improved outcomes.

 

In preparation for the Merger, the Company will (i) effectuate a reverse split of its outstanding shares of  Common Stock wherein each of the Company's shareholders will receive one (1) share of Common Stock for each one hundred (100) shares of Common Stock currently owned by such shareholder (the "Reverse Split")  (ii) increase its authorized shares of Common Stock to 250,000,000 shares and change the Company's name to TherapeuticsMD, Inc. and  (iii) amend the LTIP to increase the authorized shares for issuance thereunder to 25,000,000.  These corporate actions were approved by the Company and its majority shareholder on July 18, 2011.  The Company intends to mail an Information Statement to its shareholders of record as of July 28, 2011 on or about August 12, 2011 discussing the approval of these corporate actions.

 

At the Effective Time, each outstanding membership unit of VitaMed ("Unit"), each outstanding option issued pursuant to the VitaMed 2008 Stock Option Plan ("VitaMed Option") and each outstanding warrant issued by VitaMed ("VitaMed Warrant") will be exchanged on a pro-rata basis for shares of the Company's Common Stock or rights to purchase shares of the Company's Common Stock, which in the aggregate will total 70,000,000 shares, resulting in a conversion ratio calculated by the sum of all outstanding Units, VitaMed Options and VitaMed Warrants divided by 70,000,000 (the "Conversion Ratio").  After giving effect to the issuance of shares of the Company's Common Stock in exchange for outstanding Units, the number of shares of the Company's Common Stock approximated to be issued and outstanding immediately following the Closing will be approximately 58,934,800 of which the owners of VitaMed will own approximately 99%.

 

All shares issued in exchange for Units and to be issued pursuant to rights to acquire Units of VitaMed, will be subject to a lock-up agreement for a period of eighteen (18) months from the Closing.

 

At the Closing, the Company's existing sole director shall nominate and appoint such persons as designated by VitaMed to serve as the Company's directors.

 

The Company and the Company's majority shareholder, owning approximately 53.70% of the Company's outstanding shares, approved the Agreement and the corporate actions required thereby.

 

The foregoing description of the terms of the Agreement is qualified, in entirety, by reference to the Agreement, a copy of which is attached as an exhibit to the Company's Current Report on Form 8-K filed with the SEC on July 21, 2011, which filing and exhibit is incorporated herein by reference.